As filed with the Securities and Exchange Commission on September , 1997
Registration No. 333-31739
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PRE-EFFECTIVE AMENDMENT NO. ONE
TO THE
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST SECURITYFED FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 6035 36-4177515
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification No.)
or organization)
936 North Western Avenue, Chicago, Illinois 60622-4695 (773) 772-4500
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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Julian E. Kulas
President and Chief Executive Officer
First SecurityFed Financial, Inc.
936 North Western Avenue
Chicago, Illinois 60622-4695
(773) 772-4500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Please send copies of all communications to:
Kip A. Weissman, P.C.
Martin L. Meyrowitz, P.C.
SILVER, FREEDMAN & TAFF, L.L.P.
(A limited liability partnership including professional corporations)
1100 New York Avenue, N.W.
Seventh Floor, East Tower
Washington, DC 20005
(202) 414-6100
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Prospectus
[LOGO]
FIRST SECURITYFED FINANCIAL, INC.
(Proposed Holding Company for First Security Federal Savings Bank)
$10.00 Per Share
4,735,000 Shares of Common Stock
(Anticipated Maximum)
First SecurityFed Financial, Inc. (the "Holding Company") is offering up to
4,735,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), in connection with the conversion of First Security Federal Savings
Bank ("First Security" or the "Bank") from a federally chartered mutual savings
bank to a federally chartered stock savings bank and the issuance of all of
First Security's outstanding stock to the Holding Company (the "Conversion").
Pursuant to the Bank's plan of conversion (the "Plan of Conversion" or the
"Plan"), non-transferable rights to subscribe for the Common Stock
("Subscription Rights") have been given to (i) First Security's depositors with
account balances of $50 or more as of December 31, 1995 ("Eligible Account
Holders"), (ii) tax-qualified employee plans of First Security and the Holding
Company ("Tax-Qualified Employee Plans"), provided, however, that the
Tax-Qualified Employee Plans shall have first priority Subscription Rights to
the extent that the total number of shares of Common Stock sold in the
Conversion exceeds the maximum of the Estimated Valuation Range as defined
below, (iii) First Security's depositors with account balances of $50 or more as
of __________ __, 1997 ("Supplemental Eligible Account Holders"), (iv) certain
of its other members ("Other Members"), and (v) its employees, officers and
directors (the "Subscription Offering.)
(continued on next page)
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FOR ADDITIONAL INFORMATION ON HOW TO SUBSCRIBE, PLEASE CALL
THE STOCK CENTER AT (___) ___-____.
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FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED, SEE
"RISK FACTORS" BEGINNING ON PAGE __.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION OR THE FEDERAL DEPOSIT
INSURANCE CORPORATION, NOR HAS SUCH COMMISSION, OFFICE OR CORPORATION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF COMMON
STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
SAVINGS DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENT AGENCY.
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Estimated
Underwriting Fees, Estimated Net
Purchase Commissions and Conversion
Price(1) Other Expenses(2) Proceeds(3)
-------- ----------------- -----------
Per Share(4).................... $10.00 $0.22 $9.78
Minimum Total................... $34,990,000 $839,000 $34,151,000
Midpoint Total.................. $41,170,000 $895,000 $40,274,000
Maximum Total................... $47,350,000 $953,000 $46,397,000
Maximum Total, As Adjusted(5)... $54,450,000 $1,018,000 $53,432,000
================================================================================
(1) Determined on the basis of an appraisal prepared by FinPro, Inc. ("FinPro")
dated July 18, 1997, which states that the estimated aggregate pro forma
market value of the Common Stock to be sold in the Conversion ranged from
$34,990,000 to $47,350,000 or between 3,499,000 shares and 4,735,000 shares
of Common Stock at $10.00 per share. See "The Conversion - Stock Pricing
and Number of Shares to be Issued."
(2) Consists of the estimated costs to the Bank and the Holding Company arising
from the Conversion, including the payment to Friedman, Billings, Ramsey &
Co., Inc. ("FBR") of estimated sales commissions ranging from $301,000 (at
the minimum) to $415,000 (at the maximum) in connection with the sale of
shares in the Offering. Such fees may be deemed to be underwriting fees.
See "Use of Proceeds" and "Pro Forma Data" for the assumptions used to
arrive at these estimates. The Holding Company has agreed to indemnify FBR
against certain liabilities, including liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"). See "The
Conversion - Marketing Arrangements" for a more detailed description of
underwriting fees, commissions and expenses.
(3) Net Conversion proceeds may vary from the estimated amounts, depending on
the Purchase Price, the number of shares issued and the number of shares
sold subject to commissions. The actual number of shares of Common Stock to
be issued in the Conversion will not be determined until after the close of
the Offering.
(4) Assumes the sale of the midpoint number of shares. If the minimum, maximum
or 15% above the maximum number of shares are sold, estimated expenses per
share would be $0.24, $0.20 or $0.19, respectively, resulting in estimated
net Conversion proceeds per share of $9.76, $9.80 or $9.81, respectively.
(5) As adjusted to give effect to the sale of up to an additional 710,000
shares (15% above the maximum of the Estimated Valuation Range) which may
be offered in the Conversion without the resolicitation of subscribers or
any right of cancellation, to reflect changes in market and financial
conditions following the commencement of the Offering. See "Pro Forma
Data," and "The Conversion - Stock Pricing and Number of Shares to be
Issued."
Friedman, Billings, Ramsey & Co., Inc.
The date of this Prospectus is ________ __, 1997
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(continued from prior page)
Subscription Rights are non-transferrable. Persons found to be selling or
otherwise transferring their right to purchase stock in the Subscription
Offering or purchasing Common Stock on behalf of another person will be subject
to forfeiture of such rights and possible further sanctions and penalties
imposed by the Office of Thrift Supervision (the "OTS"), an agency of the United
States Government. Subject to the prior rights of holders of Subscription Rights
and to market conditions, the Holding Company may also offer the Common Stock
for sale through FBR in a direct community offering (the "Direct Community
Offering") and/or a public offering to selected persons to whom this prospectus
is delivered (the "Public Offering" and when referred to together with the
Subscription Offering and the Direct Community Offering, if any, the
"Offering"). Depending on market conditions and availability of shares, the
shares of Common Stock may be offered for sale in the Public Offering on a
best-efforts basis by a selling group of selected broker-dealers to be managed
by FBR. The Bank and the Holding Company reserve the right, in their absolute
discretion, to accept or reject, in whole or in part, any or all orders in the
Public Offering.
The total number of shares to be issued in the Conversion will be based
upon an appraised valuation of the estimated aggregate pro forma market value of
the Holding Company and the Bank as converted. The purchase price per share
("Purchase Price") has been fixed at $10.00. Based on the current valuation
range of the shares to be sold of $34,990,000 to $47,350,000 (the "Estimated
Valuation Range"), the Holding Company is offering up to 4,735,000 shares.
Depending upon the market and financial conditions at the time of the completion
of the Public Offering, if any, the total number of shares to be issued in the
Conversion may be increased or decreased from the 4,735,000 shares offered
hereby, provided that the product of the total number of shares multiplied by
the price per share remains within, or does not exceed by more than 15% the
maximum of the Estimated Valuation Range. If the aggregate Purchase Price of the
Common Stock sold in the Conversion is below $34,990,000 or above $54,450,000,
or if the Offering is extended beyond ______ ___, 1997, subscribers will be
permitted to modify or cancel their subscriptions and to have their subscription
funds returned promptly with interest. Under such circumstances, if subscribers
take no action, their subscription funds will be promptly returned to them with
interest. In all other circumstances, subscriptions are irrevocable by
subscribers. See "The Conversion - Offering of Holding Company Common Stock."
In addition to the shares of the Common Stock to be issued in the
Conversion, the Holding Company intends, subject to member approval, to
contribute, or sell for a price equal to their aggregate par value ($2,500),
250,000 shares of the Common Stock to the Heritage Foundation of First Security
Federal Savings Bank, Inc. (the "Foundation"), a charitable foundation
previously created by the Bank. The purpose of the Foundation is to provide
charitable benefits to persons and organizations residing within the communities
in which the Bank operates. The proposed contribution to the Foundation is
subject to the approval of the Bank's members at the Special Meeting being held
to consider the Plan of Conversion. For a discussion of the Foundation and its
effects on the Conversion, including what would happen if members do not approve
the proposed contribution to the Foundation, see "Risk Factors -- Contribution
to the Charitable Foundation," "Pro Forma Data," and "The Conversion --
Contribution to the Charitable Foundation."
With the exception of the Tax-Qualified Employee Plans, no Eligible Account
Holder, Supplemental Eligible Account Holder or Other Member may purchase in
their capacity as such in the Subscription Offering more than $250,000 of Common
Stock; no person, together with associates of and persons acting in concert with
such person, may purchase more than $250,000 of Common Stock in the Public
Offering and no person, together with associates of and persons acting in
concert with such person, may purchase more than $750,000 of Common Stock. Under
certain circumstances, the maximum purchase limitations may be increased or
decreased at the sole discretion of the Bank and the Holding Company up to 9.99%
of the total number of shares of Common Stock sold in the Conversion or down to
one percent of shares of Common Stock offered in the Conversion. The minimum
purchase is 25 shares. See "The Conversion - Additional Purchase Restrictions."
The Bank and the Holding Company have engaged FBR as financial advisor and agent
to consult, advise and assist in the distribution of shares of Common Stock, on
a best-efforts basis in the Offering including, if necessary, managing selected
broker-dealers to assist in selling stock in the Public Offering. For such
services, FBR will receive a marketing fee of 1.0% of the total dollar amount of
Common Stock sold in the Conversion, excluding purchases by directors, officers,
employees and their immediate family members, and the employee stock ownership
and benefit plans of the Bank and the Holding Company. If selected dealers are
used, the selected dealers will receive a fee estimated to be up to 4.5% of the
aggregate Purchase Price for all shares of Common Stock sold in the Public
Offering through such selected dealers. Such fees may be deemed to be
underwriting commissions. FBR and the selected dealers may be deemed to be
underwriters. See "The Conversion - Marketing Arrangements" and "The Conversion
- - Offering of Holding Company Common Stock."
The Subscription Offering will expire at 12:00 Noon, Chicago, Illinois
Time, on ___________, 1997 ("Expiration Date"), unless extended by the Board of
Directors up to an additional 45 days with the approval of the OTS, if
necessary, but without additional notice to subscribers. To subscribe for shares
of Common Stock in the Subscription Offering, the Holding Company must receive
(at any office of the Bank) a properly executed stock order and certification
form (together, the "Order Form") along with full payment at $10.00 per share
(or appropriate instructions authorizing a withdrawal from a deposit account at
the Bank) for all shares for which subscription is made by the Expiration Date.
The date by which orders must be received in the Public Offering, if any, will
be set by the Holding Company at the time of such offering provided that, if
such offering is extended beyond ________ 1997, each subscriber will have the
right to modify or rescind their order. Subscriptions paid by check, bank draft
or money order will be placed in a segregated account at the Bank and will earn
interest at the Bank's passbook rate from the date of receipt until completion
or termination of the Conversion. Payments authorized by withdrawal from deposit
accounts at the Bank will continue to earn interest at the contractual rate
until the Conversion is completed or terminated; these funds will be otherwise
unavailable to the depositor until such time. Authorized withdrawals from
certificate accounts for the purchase of Common Stock will be permitted without
the imposition of early withdrawal penalties or loss of interest. Once tendered,
subscription orders cannot be revoked or modified without the consent of the
Bank and the Holding Company. The Holding Company is not obligated to accept
orders submitted on photocopied or facsimile Order Forms. If the Conversion is
not consummated within 45 days after the last day of the Subscription Offering
and the OTS consents to an extension of time to complete the Conversion,
subscribers will be given the right to increase, decrease or rescind their
orders. Such extensions may not go beyond _________, 1999.
The Holding Company has applied to have the Common Stock listed on the
Nasdaq Stock Market under the symbol "____." Prior to this offering there has
not been a public market for the Common Stock, and there can be no assurance
that an active and liquid trading market for the Common Stock will develop or
that resales of the Common Stock can be made at or above the Purchase Price. See
"Market for Common Stock" and "The Conversion - Stock Pricing and Number of
Shares to be Issued."
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[MAP TO COME]
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PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified
in its entirety by the detailed information and financial statements appearing
elsewhere herein.
First SecurityFed Financial, Inc.
The Holding Company, First SecurityFed Financial, Inc., was recently
formed by First Security under the laws of Delaware for the purpose of becoming
a savings and loan holding company which will own all of the outstanding capital
stock that First Security will issue in connection with the Conversion.
Immediately following the Conversion, the only significant assets of the Holding
Company will be the capital stock of First Security, a note evidencing the
Holding Company's loan to the Employee Stock Ownership Plan (the "ESOP") and up
to approximately 50% of the net proceeds from the Offering, less the amount of
the ESOP loan. See "Use of Proceeds." Upon completion of the Conversion, the
Holding Company's business initially will consist only of the business of First
Security. See "First SecurityFed Financial, Inc."
First Security
General. First Security is a federally chartered mutual savings bank
headquartered in Chicago, Illinois. While the Bank was originally chartered in
1928, the modern chapter of the Bank did not begin until 1964 when the prior
board of directors resigned and President Kulas and eleven other community
leaders assumed director positions. At that time, the Bank had less than
$300,000 of assets and did not have federal deposit insurance. By the end of
1966, the assets of the Bank more than tripled and the Bank's board of
directors, by pledging their own deposits to an agency of the federal
government, had secured federal deposit insurance. Since that time, First
Security has grown steadily by focusing on the needs of its customers, many of
whom are persons of Ukrainian, Polish, Eastern European and Latin American
descent, and by remaining extremely active in community affairs within its
principal market areas.
First Security currently serves the financial needs of communities in
its market area through its main office located at 936 North Western Avenue,
Chicago, Illinois 60622-4695 and from branch offices located in Chicago,
Illinois, Philadelphia, Pennsylvania and Rolling Meadows, Illinois. Its deposits
are insured up to applicable limits by the Federal Deposit Insurance Corporation
("FDIC"). At April 30, 1997, First Security had total assets of $260.0 million,
deposits of $219.0 million and equity of $30.0 million (or 11.54% of total
assets).
First Security has been, and intends to continue to remain, an
independent, community oriented, financial institution. First Security's
business involves attracting deposits from the general public and using such
deposits, together with other funds, to originate primarily one- to four-family
residential mortgages and, to a lesser extent, commercial real estate,
multi-family, consumer and other loans primarily in its market area. At April
30, 1997, $137.5 million, or 81.32%, of the Bank's total loan portfolio
consisted of one- to four-family residential mortgage loans. The Bank also
invests in mortgage-backed and other securities and other permissible
investments. See "Business Investment Activities - Securities" and "-
Mortgage-Backed and Related Securities."
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Financial and operational highlights of the Bank include the following:
Profitability. First Security historically has been very profitable.
During each of the fiscal years ended December 31, 1992 through December 31,
1995, the Bank reported net income of between $3.0 million and $3.4 million.
During the same periods the Bank's return on average assets ("ROAA") ranged from
1.76% to 1.34%, while its return on average equity ("ROAE") ranged from 17.12%
to 11.64%. For the year ended December 31, 1996, First Security reported net
income of $452,000, which equated to an ROAA of 0.18% and an ROAE of 1.50%. The
decline in profitability for 1996 was primarily attributable to a mandatory $1.3
million one time assessment to recapitalize the Savings Association Insurance
Fund and a $2.5 million contribution to the Foundation. For the year ended
December 31, 1996, net income would have been $2.7 million without the one-time
SAIF assessment and the contribution to the Foundation. ROAA would have been
1.08% and ROAE would have been 8.88%. See "Risk Factors - Stock Contribution to
Charitable Foundation." For the four months ended April 30, 1997, the Bank
recorded net income of $761,000, resulting in an annualized ROAA and ROAE of
0.88% and 7.65%, respectively. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
Capital Strength. As a result of its historic profitability and
commitment to maintaining a high level of capital, First Security has been able
to maintain a strong equity to assets ratio. For each of the fiscal years ended
from December 31, 1993 through December 31, 1996, the Bank's equity to assets
ratio exceeded 11%. At April 30, 1997, the Bank had total equity of $30.0
million, or 11.54% of total assets, which substantially exceeded all of the
applicable regulatory capital requirements with tangible, core and risk-based
capital ratios of 11.4%, 11.4% and 24.4%, respectively. Assuming on a pro forma
basis that $41.2 million, the midpoint of the Estimated Valuation Range, of
shares were sold in the Conversion and approximately 50% of the net proceeds
were contributed by the Holding Company to the Bank, as of April 30, 1997, the
Bank's capital would have been $46.6 million (16.8% of assets). See "Pro Forma
Regulatory Capital Analysis."
Asset Quality. One of the principal aims of First Security's operating
strategy is to maintain a high level of asset quality. The Board has sought to
achieve this goal by emphasizing the origination of one- to four-family
residential mortgage loans in the Bank's market area and by investing in
government-backed or investment grade mortgage-backed and other securities. The
Bank's ratio of non-performing assets to total assets was 0.87% at April 30,
1997. At that date, First Security had no real estate owned.
Core Deposits. The Bank historically has been successful at attracting and
retaining "core" deposits, which consist primarily of passbook, NOW and money
market accounts. The Bank continues to utilize customer service, marketing
initiatives and community outreach programs in order to maintain and expand its
deposit base. At April 30, 1997, $90.8 million, or 41.4% of the Bank's total
deposits consisted of passbook, NOW and money market accounts. These accounts
generally carry lower interest rates and are believed by the Board to be more
resistant to interest rate changes than certificate accounts.
Niche Strategy. First Security has long been extremely active in
community affairs within its urban market areas which are home to many persons
of Ukrainian, Polish, Eastern European and, more recently, Latin American
descent. Although the Bank historically has focused its operations on the
Chicago market, the Bank purchased in 1994 from the Resolution Trust Corporation
the deposits and many of the loans of Ukrainian Savings and Loan Association, a
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Philadelphia, Pennsylvania based thrift located in a community with an ethnic
composition similar to that of the Bank's Chicago urban market areas. As a
result of the Bank's marketing efforts and community involvement, the deposits
of its Philadelphia branch have increased from approximately $22.3 million at
June 24, 1994 to approximately $50.0 million at April 30, 1997.
The Board believes that additional opportunities for future expansion
may exist in other metropolitan areas, including areas with demographics similar
to those of the Bank's Chicago and Philadelphia markets. However, there can be
no assurance that the Bank will be able to identify any such additional
opportunities, or successfully conclude a transaction to take advantage of them.
Strong Community Orientation. The Board of Directors strongly believes
that the Bank's success is closely tied to its focus on the financial and other
needs of its community members, many of whom are of Ukrainian, Polish, Eastern
European or, to a lesser extent, Latin American descent. In an attempt to better
serve its customers, all of the Bank's directors and employees are fluent in at
least one language in addition to English. In addition, the Bank encourages its
employees to be active in the community, and substantially all of the Bank's
employees and its directors and senior officers are active in local charitable
community service organizations. Finally, the Bank itself has been highly active
in community affairs as demonstrated by the formation and funding of a
charitable foundation. See "Stock Contribution to Charitable Foundation."
The Board strongly believes that the Bank can maintain the community
orientation which has been so important to its operations only by remaining
independent. The Board believes that the Bank is well positioned to maintain
independent, community oriented operations into the next century and beyond.
Stock Contribution to Charitable Foundation
As a reflection of the Bank's long-standing commitment to the local
community, in 1996, the Bank established The Heritage Foundation of First
Security Federal Savings Bank, Inc. a private charitable foundation under the
Illinois General Not-For-Profit Corporation Act, (the "Foundation"). The
Foundation was established as a means of supporting the needs of the local
community while simultaneously increasing the visibility and reputation of the
Bank. The Foundation was initially funded by the Bank through several cash
contributions aggregating $2.5 million, all of which were accrued by the Bank
during the fourth quarter of 1996. In addition, under the Plan and subject to
member approval, the Holding Company will contribute to the Foundation 250,000
shares of its Common Stock (the "Stock Contribution"). The Stock Contribution
will be either in the form of a direct contribution or a sale of the shares for
their aggregate par value ($2,500). The Holding Company believes that the Stock
Contribution will be fully tax-deductible for both federal and state income tax
purposes. Finally, the Company may make additional contributions to the
Foundation in the future, although the Company has no current plans regarding
timing or amount of such future contributions, if any. See "Risk Factors --
Risks Associated with the Stock Contribution to a Charitable Foundation."
The Holding Company and the Bank believe that the funding of the
Foundation with Common Stock of the Holding Company is a means of reinforcing
the bond among the Bank and the communities in which the Bank operates, thereby
enabling such communities to share in the potential growth and success of the
Holding Company over the long-term. Although the Stock Contribution will result
in a reduction in the Holding Company's conversion appraisal (but not in its pro
forma capital per share or earnings per share), the Board believes that the
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Stock Contribution will enhance the long term value of the Bank by increasing
customer loyalty as well as the size of its customer base. The Board believes
that customer loyalty and community support are critical for the success of
community oriented institutions such as the Bank.
The Board believes that the Stock Contribution will facilitate the
support of charitable activities even during periods when the Holding Company
may not be in a position to support such activities. (Similarly, the Stock
Contribution could enable the Foundation to offset the impact of variations in
contribution levels from the Holding Company by accumulating funds during
periods of relatively large contributions and disbursing such funds during
periods of relatively small contributions.) In addition, the Board believes that
the Stock Contribution will have a highly beneficial public relations impact.
Finally, the Board believes that the Stock Contribution will facilitate the
participation of non-Holding Company personnel in charitable activities. The
Board believes that the Foundation and the making of the Stock Contribution on
the terms described herein represents an opportunity to make a significant
charitable contribution which will benefit the Holding Company and the Bank at a
time when they have adequate capital, are not yet subject to possible earnings
pressure resulting from the Holding Company's status as a public company and
there is a need for charitable funding in the Bank's market area.
The Foundation has been established to qualify as a private foundation
under the Internal Revenue Code of 1986, as amended (the "Code"). As a private
foundation, the Foundation is required to distribute annually in grants or
donations at least 5% of its net investment assets. The Foundation is dedicated
to the promotion of charitable purposes within the communities in which the Bank
operates, including, but not limited to, providing grants or donations to
community groups, cultural activities, youth and elder care and other types of
organizations or projects. While the Foundation is authorized to engage directly
in charitable activities, in order to limit overhead costs, it is currently
anticipated that the Foundation's primary activity will consist of making grants
to other charitable organizations.
The authority for the affairs of the Foundation is vested in the Board
of Trustees of the Foundation which is currently comprised of Chairman
Nadzikewycz, President Kulas and Director Gawryk, each of whom is also currently
a member of the Bank's Board of Directors. In accordance with the OTS rules
regarding conflicts of interests, such persons excused themselves from the Bank
Board's vote on the Stock Contribution. Under the terms of the Foundation's
articles of incorporation, new trustees may be selected only by the Foundation's
Board of Trustees.
The Foundation's articles of incorporation provide that the earnings of
the Foundation shall not result in any private benefit for its members, trustees
or officers. In addition, it is anticipated that the Foundation will adopt a
conflicts of interest policy to protect against inappropriate benefits for
trustees or officers of the Foundation and any related parties. While these
provisions would not prohibit the payment of reasonable compensation for
services rendered, the members of the Board of Trustees do not currently receive
fees for service on the Board.
The Trustees of the Foundation are responsible for establishing and
carrying out the policies of the Foundation with respect to grants or donations
by the Foundation, consistent with the purposes for which the Foundation was
established. The Trustees of the Foundation are also responsible for directing
the activities of the Foundation, including the management of the shares of
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Common Stock held by the Foundation; provided, however, that the voting of any
such shares will be subject to applicable OTS policy regarding foundations.
Under the terms of the OTS letter approving the conversion application, when
matters are presented for a stockholder vote, the shares of Common Stock held by
the Foundation must be voted in the same ratio as all other shares of the Common
Stock. Under such circumstances, the Board and management of the Holding Company
would derive no additional voting control from such shares. However, in the
event that the OTS were to waive this voting restriction, the Foundation's Board
of Trustees would exercise voting control over such shares. Since the
Foundation's Board of Trustees currently consists of three Holding Company
directors, in the event that the OTS were to waive this restriction, the number
of shares over which the Board of Directors of the Holding Company is deemed to
exercise voting control could increase. However, as of the date hereof, the
Company has no intentions to seek such a waiver.
It is currently anticipated that the Foundation will adopt a policy
addressing affiliated transactions between the Foundation and the Holding
Company or the Bank. Any transactions between the Foundation and the Bank will
comply with applicable provisions of Sections 23A and 23B of the Federal Reserve
Act, as amended, as well as with the OTS conflicts of interests regulations.
Additionally, the Holding Company (but not the Bank) may provide office space
and administrative support to the Foundation without charge provided that such
actions comply with the applicable conflicts of interests restrictions.
Under applicable IRS regulations, the Foundation will be authorized to
purchase shares of the Holding Company's Common Stock in the open market,
subject to certain restrictions. However, it is not currently anticipated that
the Foundation will purchase any such shares. The OTS has informed the Holding
Company that any purchases of Common Stock in the open market would be
considered to be purchases by the Holding Company for the purpose of the OTS
limitations on post-conversion stock repurchases. See "Use of Proceeds."
If approved by members, the Stock Contribution will be made within
twelve months following the completion of the Conversion. However, as discussed
below, the Holding Company will recognize the expense related to the Stock
Contribution in the quarter in which the Conversion is completed. Once made, the
Stock Contribution will not be recoverable by the Holding Company or the Bank.
The Foundation may receive working capital from any dividends that may be paid
on the Holding Company's Common Stock in the future and, subject to applicable
federal and state laws, from loans collateralized by the Common Stock or from
the proceeds of the sale of any of the Common Stock in the open market from time
to time as may be permitted to provide the Foundation with additional liquidity.
One of the conditions imposed on the Stock Contribution by the Holding Company
is that the amount of Common Stock that may be sold by the Foundation in any one
year shall not exceed 5% of the average market value of the assets held by the
Foundation, except where the Board of Trustees of the Foundation, by
three-fourths vote, determines that the failure to sell an amount of Common
Stock greater than such amount would result in a long-term reduction in the
value of the Foundation's assets and as such would jeopardize the Foundation's
capacity to carry out its charitable purposes. The Stock Contribution is also
subject to certain conditions imposed by the OTS in connection with its approval
of the Conversion. See "The Conversion -- Stock Contribution to the Charitable
Foundation." and "-- Regulatory Conditions Imposed on the Foundation." Assuming
the sale of shares at the maximum of the Estimated Valuation Range, the Company
will have 4,985,000 shares issued and outstanding, of which the Foundation will
own 250,000 shares or 5.0%. Due to the additional issuance of shares
8
<PAGE>
of Common Stock to the Foundation, persons purchasing shares in the Conversion
will have their ownership and voting interests in the Company diluted. See "Pro
Forma Data."
If the Stock Contribution is approved by the Bank's members, the
Holding Company will recognize a $2.5 million expense (offset in part by a
corresponding tax benefit), during the quarter in which the Conversion is
completed, which is expected to be the fourth quarter of fiscal 1997. Such
expense will likely eliminate earnings in the quarter in which it is recognized
and have a material adverse impact on the Holding Company's earnings for fiscal
year 1997. Assuming a contribution valued at $2.5 million, the Holding Company
estimates a net tax-effected expense of $1.5 million. If the Stock Contribution
had been expensed during the four month period ended April 30, 1997, the Bank
would have reported a net loss of $739,000 for the four months ended April 30,
1997 rather than net income of $761,000. For further discussion of the
Foundation and its impact on purchasers of Common Stock in the Conversion, see
"Risk Factors Stock Contribution to a Charitable Foundation" and "Pro Forma
Data."
Because the Stock Contribution will result in dilution, it will reduce
the estimated pro forma market value of the stock to be sold by approximately
$4.8 million at the midpoint of the Estimated Valuation Range. As a result, the
pro forma capital of the Holding Company will be $3.4 million lower at the
midpoint of the Estimated Valuation Range than it would have been without the
Stock Contribution. However, because of the lower number of shares which are
being offered (as a result of the lower appraisal), per share capital and
earnings are expected to be approximately the same. See "Comparison of Valuation
and Pro Forma Information With No Stock Contribution."
As a result of the $4.8 million reduction in the estimated pro forma
market value of the stock to be sold caused by the Stock Contribution, the
amount of shares expected to be purchased by directors and executive officers,
assuming the sale of the midpoint number of shares, increased from 5.4% to 6.0%
of the shares sold. See "The Conversion--Participation by the Board and
Executive Officers." However, it should also be noted that their stock incentive
awards, which are calculated as a percentage of the conversion shares, will be
reduced by the reduction in the estimated pro forma market value of the stock to
be sold caused by the Stock Contribution.
The Stock Contribution is subject to the approval of a majority of the
total outstanding votes of the Bank's members eligible to be cast at the Special
Meeting. The Stock Contribution will be considered as a separate matter from the
vote to approve the Plan of Conversion. If the Bank's members approve the Plan
of Conversion, but not the Stock Contribution, the Bank intends to complete the
Conversion without the Stock Contribution. Failure to approve the Stock
Contribution may materially increase the aggregate pro forma market value of the
Common Stock being offered since the Estimated Valuation Range, as set forth
herein, takes into account the after-tax impact of the Stock Contribution. If
the pro forma market value of the shares of the Common Stock to be sold without
the Stock Contribution is either greater than $54.5 million or less than $35.0
million or if the OTS otherwise requires a resolicitation of subscribers, the
Bank will establish a new Estimated Valuation Range and commence a
resolicitation of subscribers (i.e., subscribers will be permitted to continue
or modify their orders, in which case they will need to affirmatively reconfirm
their subscriptions prior to the expiration of the resolicitation offering or
their subscription funds will be promptly refunded with interest.) Any change in
the Estimated Valuation Range must be approved by the OTS. See "Pro Forma Data,"
"Comparison of Valuation and
9
<PAGE>
Pro Forma Information With No Stock Contribution," and "The Conversion--Stock
Contribution to the Charitable Foundation" and "The Conversion--Stock Pricing."
The Conversion
The Offering is being made in connection with the conversion of First
Security from a federally chartered mutual savings bank to a federally chartered
stock savings bank and the formation of First SecurityFed Financial, Inc. as the
holding company of First Security. The Conversion is subject to certain
conditions, including the prior approval of the Plan by the Bank's members at a
Special Meeting to be held on ______ __, 1997. After the Conversion, the Bank's
current voting members (who include certain deposit account holders and
borrowers) will have no voting rights in First Security and will have no voting
rights in the Holding Company unless they become Holding Company stockholders.
Eligible Account Holders and Supplemental Eligible Account Holders, however,
will have certain liquidation rights in the Bank. See "The Conversion Effects of
Conversion to Stock Form on Depositors and Borrowers of the Bank - Liquidation
Rights."
By converting to the stock form of organization, the Bank will be
structured in the form used by all commercial banks, most major business
corporations and an increasing number of savings institutions. The Conversion
will also increase the equity capital of the Bank. See "The Conversion --
Business Purposes."
The Offering. The shares of Common Stock to be issued in the Conversion
are being offered at a Purchase Price of $10.00 per share in the Subscription
Offering pursuant to nontransferable Subscription Rights in the following order
of priority: (i) Eligible Account Holders (i.e., depositors whose accounts in
the Bank totaled $50.00 or more on December 31, 1995); (ii) Tax-Qualified
Employee Plans; provided, however, that the Tax Qualified Employee Plans shall
have first priority Subscription Rights to the extent that the total number of
shares of Common Stock sold in the Conversion exceeds the maximum of the
Estimated Valuation Range; (iii) Supplemental Eligible Account Holders (i.e.,
depositors whose accounts in the Bank totaled $50.00 or more on ________ __,
____); (iv) Other Members (i.e., depositors as of ________ __, ____ and certain
borrowers of the Bank as of ________ __, ____ and _______ __, ____); and (v)
employees, officers and directors of the Bank. Subscription Rights received in
any of the foregoing categories will be subordinated to the Subscription Rights
received by those in a prior category. Subscription Rights will expire if not
exercised by noon, Chicago, Illinois time, on ______ _, ____, unless extended
(the "Expiration Date").
Subject to the prior rights of holders of Subscription Rights and
market conditions at or near the completion of the Subscription Offering, any
shares of Common Stock not subscribed for in the Subscription Offering may be
offered at the same price in a Public Offering and/or Direct Community Offering
through FBR to selected persons to whom this prospectus is delivered. To order
Common Stock in connection with the Public Offering and/or Direct Community
Offering, if any, an executed Order Form and full payment at $10.00 per share in
the form of a check, bank draft or money order must be received by FBR prior to
the termination of such offerings. The date by which orders must be received in
the Public Offering and/or Direct Community Offering, if any, will be set by the
Holding Company at the time of such offering provided that if the Offering is
extended beyond _____ _, 1997, each subscriber will have the right to modify or
rescind his or her subscription. The Holding Company and the Bank reserve the
absolute right to accept or reject any orders in the Public Offering and Direct
Community Offering, in whole or in part.
10
<PAGE>
If necessary, shares of Common Stock may also be offered in connection
with the Public Offering for sale on a best-efforts basis by selected dealers
managed by FBR. See "The Conversion -- Public Offering and Direct Community
Offering."
The Bank and the Holding Company have engaged FBR to consult with and
advise the Holding Company and the Bank with respect to the Offering, and FBR
has agreed to solicit subscriptions and purchase orders for shares of Common
Stock in the Offering. Neither FBR nor any selected broker-dealers will have any
obligation to purchase shares of Common Stock in the Offering. FBR will receive
for its services a marketing fee of 1.0% of the total dollar amount of Common
Stock sold in the Conversion (excluding purchases by directors, officers,
employees and members of their immediate families, the Foundation and the
employee benefit plans of the Holding Company and the Bank, and shares sold by
selected broker-dealers). To the extent selected broker-dealers are utilized in
connection with the sale of shares in the Public Offering, the selected dealers
will receive a fee of up to 4.5% and FBR will receive a fee of 1.0% of the
aggregate Purchase Price for all shares of Common Stock sold through such
broker-dealers. FBR will also receive reimbursement for certain expenses
incurred in connection with the Offering. The Holding Company has agreed to
indemnify FBR against certain liabilities, including certain liabilities under
the Securities Act of 1933, as amended ("Securities Act"). See "The Conversion -
Marketing Arrangements."
The Bank has established a Stock Center, which will be managed by FBR,
to coordinate the Offering, and answer questions about the Offering received by
telephone. All subscribers will be instructed to mail payment to the Stock
Center or deliver payment directly to one of the Bank's offices. In addition,
representatives of FBR will be available to answer questions at the Bank's
Philadelphia, Pennsylvania office. Payment for shares of Common Stock may be
made by cash (if delivered in person), check or money order or by authorization
of withdrawal from deposit accounts maintained with the Bank. Such funds will
not be available for withdrawal and will not be released until the Conversion is
completed or terminated. See "The Conversion - Method of Payment for
Subscriptions."
Purchase Limitations. The Plan of Conversion places limitations on the
number of shares which may be purchased in the Conversion by various categories
of persons. With the exception of the Tax-Qualified Employee Plans, no Eligible
Account Holder, Supplemental Eligible Account Holder, Other Member or director,
officer or employee may purchase in their capacity as such in the Subscription
Offering more than $250,000 of Common Stock; no person, together with associates
of and persons acting in concert with such person, may purchase more than
$250,000 of Common Stock in the Public Offering; and no person or group of
persons acting in concert (other than the Tax-Qualified Employee Plans) may
purchase more than $750,000 of Common Stock in the Conversion. The minimum
purchase limitation is 25 shares of Common Stock. These purchase limits may be
increased or decreased consistent with the Office of Thrift Supervision ("OTS")
regulations at the sole discretion of the Holding Company and the Bank. See "The
Conversion - Offering of Holding Company Common Stock."
Restrictions on Transfer of Subscription Rights. Prior to the
completion of the Conversion, no person may transfer or enter into any agreement
or understanding to transfer the legal or beneficial ownership of the
subscription rights issued under the Plan or the shares of Common Stock to be
11
<PAGE>
issued upon their exercise. Persons found to be selling or otherwise
transferring their right to purchase stock in the Subscription Offering or
purchasing Common Stock on behalf of another person will be subject to
forfeiture of such rights and possible federal penalties and sanctions. See "The
Conversion -- Restrictions on Transfer of Subscription Rights and Shares."
Stock Pricing and Number of Shares of Common Stock to be Issued in the
Conversion. The Purchase Price of the Common Stock is $10.00 per share and is
the same for all purchasers. The aggregate pro forma market value of the Holding
Company and First Security, as converted, was estimated by FinPro, which is
experienced in appraising converting thrift institutions, to be the Estimated
Valuation Range. The Board of Directors has reviewed the Estimated Valuation
Range as stated in the appraisal and compared it with recent stock trading
prices as well as recent pro forma market value estimates for other financial
institutions. The Board of Directors has also reviewed the appraisal report,
including the assumptions and methodology utilized therein, and determined that
it was not unreasonable.
Depending on market and financial conditions at the time of the
completion of the Offering, the total number of shares of Common Stock to be
issued in the Conversion may be increased or decreased significantly from the
4,735,000 shares offered hereby and the Purchase Price may be decreased.
However, subscribers will be permitted to modify or rescind their subscriptions
if the product of the total number of shares to be sold multiplied by the price
per share is less than $35.0 million or more than $54.5 million. The appraisal
is not intended to be, and must not be interpreted as, a recommendation of any
kind as to the advisability of voting to approve the Conversion or of purchasing
shares of Common Stock. The appraisal considers First Security and the Holding
Company only as going concerns and should not be considered as any indication of
the liquidation value of First Security or the Holding Company. Moreover, the
appraisal is necessarily based on many factors which change from time to time.
There can be no assurance that persons who purchase shares in the Offering will
be able to sell such shares at prices at or above the Purchase Price. See "Pro
Forma Data" and "The Conversion - Stock Pricing and Number of Shares to be
Issued" for a description of the manner in which such valuation was made and the
limitations on its use.
Purchases by Directors and Executive Officers
The directors and executive officers of First Security intend to
purchase, for investment purposes and at the same price as the shares are sold
to other investors in the Conversion, approximately $2.1 million of Common
Stock, or 6.0%, 5.1% or 4.4% of the shares to be sold in the Conversion at the
minimum, midpoint and maximum of the Estimated Valuation Range, respectively. In
addition, an amount of shares equal to an aggregate of 8% of the shares to be
issued in the Conversion, including the shares to be issued pursuant to the
Stock Contribution, is anticipated to be purchased by the ESOP. See "The
Conversion -- Participation by the Board and Executive Officers."
12
<PAGE>
Potential Benefits of Conversion to Directors and Executive Officers
Employee Stock Ownership Plan. The Board of Directors of the Bank has
adopted an ESOP, a tax-qualified employee benefit plan for officers and
employees of the Holding Company and the Bank. All employees of the Bank are
eligible to participate in the ESOP after they attain age 21 and complete one
year of service. The Bank's contribution to the ESOP is allocated among
participants on the basis of their relative compensation. Each participant's
account will be credited with cash and shares of Holding Company Common Stock
based upon compensation earned during the year with respect to which the
contribution is made. The ESOP intends to buy up to 8% of the Common Stock
issued in the Conversion, including the shares to be issued pursuant to the
Stock Contribution, (approximately $3.0 million to $4.0 million of the Common
Stock based on the issuance of the minimum and the maximum of the Estimated
Valuation Range and the $10.00 per share Purchase Price). The ESOP will purchase
the shares with funds borrowed from the Holding Company, and it is anticipated
that the ESOP will repay the loans through periodic tax-deductible contributions
from the Bank over a ten-year period. These contributions will increase the
compensation expense of the Bank. See "Management - Benefit Plans - Employee
Stock Ownership Plan" for a description of this plan.
Stock Option and Incentive Plan and Recognition and Retention Plan. The
Board of Directors of the Holding Company intends to adopt a Stock Option and
Incentive Plan (the "Stock Option Plan") and a Recognition and Retention Plan
("RRP") to become effective upon ratification by stockholders following the
Conversion. Certain of the directors and executive officers of the Holding
Company and the Bank will receive awards under these plans. It is currently
anticipated that an amount of shares equal to 10% and 4% of the shares sold in
the Conversion, including the shares to be issued pursuant to the Stock
Contribution, will be reserved for issuance under the Stock Option Plan and RRP,
respectively. Depending upon market conditions in the future, the Holding
Company may purchase shares in the open market to fund these plans. See
"Management - Benefit Plans" for a description of these plans.
Under the proposed Stock Option Plan, it is presently intended that the
directors and executive officers be granted options to purchase, in addition to
the shares to be issued in the Conversion, an amount of shares equal to 8.4% of
the shares issued in the Conversion, including the shares to be issued pursuant
to the Stock Contribution, (or 314,916 and 418,740 shares, respectively, of
Common Stock based on the minimum and maximum of the Estimated Valuation Range)
at an exercise price equal to the market value per share of the Common Stock on
the date of grant. Such options will be awarded at no cost to the recipients and
pose no financial risk to the recipients until exercised. It is presently
anticipated that Julian Kulas, President and Chief Executive Officer, will
receive an option to purchase an amount of shares equal to 2.5% of the shares
issued in the Conversion, including the shares issued pursuant to the Stock
Contribution, (or 93,725 and 124,625 shares, assuming the minimum and maximum of
the Estimated Valuation Range, respectively). See "Management Benefit Plans -
Stock Option and Incentive Plan."
The award and exercise of options pursuant to the Stock Option Plan
will not result in any expense to the Holding Company; however, when the options
are exercised, the interests of existing stockholders will likely be diluted.
13
<PAGE>
It is also intended that directors and executive officers be granted
under the RRP (without any requirement of payment by the grantee) an amount of
shares of restricted stock awards equal to 3.4% of the shares sold in the
Conversion, including the shares issued pursuant to the Stock Contribution, (or
127,466 and 169,490 shares, respectively, based on the minimum and maximum of
the Estimated Valuation Range) which will vest over five years commencing one
year from stockholder ratification and which will have a total value of $1.3
million and $1.7 million based on the Purchase Price of $10.00 per share at the
minimum and maximum of the Estimated Valuation Range, respectively. It is
presently anticipated that President Kulas will receive a restricted stock award
equal to 1.0% of the shares issued in the Conversion, including the shares to be
issued pursuant to the Stock Contribution, (or 37,490 and 49,850 shares,
assuming the minimum and maximum of the Estimated Valuation Range). The
restricted stock award to President Kulas would have an aggregate value ranging
from $374,900 to $498,500 (at the minimum and maximum of the Estimated Valuation
Range) based upon the original Purchase Price of $10.00 per share. See "Risk
Factors - Takeover Defensive Provisions" and "Management - Benefit Plans -
Recognition and Retention Plan."
Following stockholder ratification of the RRP, the RRP will be funded
either with shares purchased in the open market or with authorized but unissued
shares. Based upon the Purchase Price of $10.00 per share, the amount required
to fund the full number of shares available for grant under the RRP through
open-market purchases would range from approximately $1.5 million (based upon
the sale of shares at the minimum of the Estimated Valuation Range) to
approximately $2.0 million (based upon the sale of shares at the maximum of the
Estimated Valuation Range). In the event that the per share price of the Common
Stock increases above the $10.00 per share Purchase Price following completion
of the Offering, the amount necessary to fund the RRP would also increase. The
expense related to the cost of the RRP will be recognized over the five-year
vesting period of the awards made pursuant to such plan. The use of authorized
but unissued shares to fund the RRP would dilute the interests of stockholders
who purchase Common Stock in the Conversion. See "Management - Benefit Plans -
Recognition and Retention Plan."
The Holding Company intends to submit the RRP and the Stock Option Plan
to stockholders for ratification following completion of the Offering, but in no
event prior to six months following the completion of the Conversion. These
plans will only be effective if ratified by the stockholders. In the event the
Stock Option Plan and the RRP are not ratified by stockholders, management may
consider the adoption of alternate incentive plans, although no such plans are
currently contemplated. While the Bank believes that the RRP and the Stock
Option Plan will provide important incentives for the performance and retention
of management, the Bank has no reason to believe that the failure to obtain
shareholder ratification of such plans would result in the departure of any
members of senior management.
Employment and Severance Agreements. The Bank intends to enter into an
employment agreement with President Kulas. It is anticipated that the agreement
will provide for a salary equal to his current salary, will have an initial term
of three years, subject to annual extension for an additional year following the
Bank's annual performance review and will become effective upon the completion
of the Conversion. Under certain circumstances including a change in control, as
defined in the employment agreement, Mr. Kulas will be entitled to a severance
14
<PAGE>
payment in lieu of salary equal to a multiple of his base amount of
compensation, as defined. See "Management - Executive Compensation."
The Bank also intends to enter into change in control severance
agreements with four other executive officers. Such agreements will have initial
terms of 24 months and become effective upon completion of the Conversion. In
the event a covered officer is terminated following a "change in control" (as
defined in the agreements), such officer will be entitled to a severance payment
of 200% of their then current compensation. See "Management - Executive
Compensation - Employment Agreements and Severance Agreements" for the
definition of "change in control" and a more detailed description of these
agreements.
Use of Proceeds
The net proceeds from the sale of Common Stock in the Conversion
(estimated at $34.2 million, $40.3 million, $46.4 million and $53.4 million
based on sales at the minimum, midpoint, maximum and 15% above the maximum of
the Estimated Valuation Range, respectively) will substantially increase the
capital of First Security. See "Pro Forma Data." The Holding Company will
utilize approximately 50% of the net proceeds from the issuance of the Common
Stock to purchase all of the common stock of First Security to be issued upon
Conversion and will retain approximately 50% of the net proceeds. The proceeds
retained by the Holding Company will be invested initially in short-term
investments similar to those currently in the Bank's portfolio. Such proceeds
will subsequently be invested in mortgage-backed securities and investment
securities and will be available for general corporate purposes, including the
possible repurchase of shares of the Common Stock, as permitted by the OTS. The
Holding Company currently has no specific plan to make any such repurchases of
any of its Common Stock. In addition, the Holding Company intends to provide the
funding for the ESOP loan. Based upon the initial Purchase Price of $10.00 per
share, the dollar amount of the ESOP loan would range from $3.0 million (based
upon the sale of shares at the minimum of the Estimated Valuation Range) to $4.0
million (based upon the sale of shares at the maximum of the Estimated Valuation
Range). It is anticipated that the ESOP will repay the loan through periodic
tax-deductible contributions from the Bank over a ten-year period. The interest
rate to be charged by the Holding Company on the ESOP loan will be based upon
the Internal Revenue Service ("IRS") prescribed applicable federal rate at the
time of origination.
Finally, the Holding Company currently intends to use a portion of the
proceeds to fund a Recognition and Retention Plan ("RRP"), subject to
stockholder ratification. Compensation expense related to the RRP will be
recognized as share awards vest. See "Pro Forma Data." Following stockholder
ratification of the RRP, the RRP may be funded either with shares purchased in
the open market or with authorized but unissued shares. Based upon the Purchase
Price of $10.00 per share, the amount required to fund the RRP through
open-market purchases would range from approximately $1.5 million (based upon
the sale of shares at the minimum of the Estimated Valuation Range) to
approximately $2.0 million (based upon the sale of shares at the maximum of the
Estimated Valuation Range). In the event that the per share price of the Common
Stock increases above the $10.00 per share Purchase Price following completion
of the Offering, the amount necessary to fund the RRP would also increase. The
use of authorized but unissued shares to fund the RRP could dilute the interests
of stockholders who purchase Common Stock in the Conversion. See "Management
Benefit Plans - Recognition and Retention Plan."
15
<PAGE>
The net proceeds received by First Security will become part of First
Security's general funds for use in its business and will be used to support the
Bank's existing operations, subject to applicable regulatory restrictions.
Immediately upon the completion of the Conversion, it is anticipated that the
Bank will invest such proceeds into short-term assets. Subsequently, the Bank
intends to redirect the net proceeds to the origination of residential loans
and, to a lesser extent, multi-family and commercial real estate and consumer
loans, subject to market conditions. In addition, a portion of the proceeds may
be used for the creation of one or more de novo branch offices within the
greater Chicago or Philadelphia areas, although the Bank has no specific plans
regarding any new branch offices at this time. Finally, such proceeds will be
available for the acquisition of deposits or assets or both from other
institutions, although no such acquisitions are contemplated at this time.
See "Use of Proceeds" for additional information on the utilization of
the offering proceeds as well as OTS restrictions on repurchases of the Holding
Company's stock.
Dividends
The Holding Company currently has no plans to pay dividends. However,
the Holding Company's Board of Directors may consider a policy of paying
dividends in the future. The declaration and payment of dividends are subject
to, among other things, the Holding Company's financial condition and results of
operations, First Security's compliance with its regulatory capital
requirements, including the fully phased-in capital requirements, tax
considerations, industry standards, economic conditions, regulatory
restrictions, general business practices and other factors. There can be no
assurance as to whether or when the Holding Company will pay a dividend. See
"Dividends."
Market for Common Stock
The Holding Company has applied to have the Common Stock traded on the
Nasdaq Stock Market under the symbol "____." In order to be traded on the Nasdaq
Stock Market, there must be at least two market makers for the Common Stock. FBR
has indicated its intention to make a market in the Holding Company's Common
Stock following completion of the Conversion, depending upon the volume of
trading activity in the Common Stock and subject to compliance with applicable
laws and other regulatory requirements. A second market marker has not yet been
secured by the Holding Company. The Holding Company anticipates that it will be
able to secure the two market makers necessary to enable the Common Stock to be
traded on the Nasdaq Stock Market. A public market having the desirable
characteristics of depth, liquidity and orderliness, however, depends upon the
presence in the marketplace of both willing buyers and sellers of the Common
Stock at any given time, which is not within the control of the Holding Company,
First Security or any market maker. Further, no assurance can be given that an
investor will be able to resell the Common Stock at or above the Purchase Price
after the Conversion. See "Market for Common Stock" and "The Conversion - Stock
Pricing and Number of Shares to be Issued."
16
<PAGE>
Risk Factors
See "Risk Factors" for information regarding certain factors which
should be considered by prospective investors, including interest rate risk
exposure, risks associated with a contribution to a charitable foundation,
competition, takeover defensive provisions contained in the Holding Company's
certificate of incorporation and bylaws, post-conversion overhead expenses,
regulatory oversight, the risk of a delayed offering, the absence of an active
market for the Common Stock and the possible consequences of amendment of the
Plan of Conversion.
17
<PAGE>
SELECTED FINANCIAL INFORMATION
Set forth below are selected financial and other data of the Bank. The
financial data is derived in part from, and should be read in conjunction with
the Consolidated Financial Statements and Notes of the Bank presented elsewhere
in this Prospectus.
In the opinion of management, the unaudited condensed consolidated
financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial condition and
results of operations of First Security as of April 30, 1997 and for the four
month periods ended April 30, 1997 and 1996. Interim results at and for the four
months ended April 30, 1997 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1997.
<TABLE>
<CAPTION>
At December 31,
--------------------------------------------------------------------
At April 30,
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Selected Financial Condition Data:
Total assets ............................. $260,002 $258,115 $251,922 $227,922 $189,846 $177,443
Cash and cash equivalents ................ 7,104 7,300 19,173 6,800 11,365 8,667
Loans receivable, net(1) ................. 165,914 163,348 144,566 136,207 105,946 97,968
Mortgage-backed securities(2):
Held-to-maturity ....................... 22,389 24,109 25,120 42,621 45,445 37,911
Available-for-sale ..................... 18,616 19,727 20,044 -- -- --
Securities(2)
Held-to-maturity ....................... 28,259 25,779 20,566 17,926 20,804 27,693
Available-for-sale ..................... 8,919 8,997 13,743 15,662 -- --
Deposits ................................. 218,987 219,505 209,387 195,875 161,715 154,559
Total borrowings ......................... 7,500 4,000 10,000 3,000 1,000 1,000
Total equity ............................. 29,950 29,261 29,038 25,555 22,395 19,214
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Four Months Year Ended
Ended April 30, December 31,
---------------- --------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Operations Data:
Total interest income ..................................... $ 6,495 $ 6,124 $19,006 $17,650 $15,710 $13,995 $14,764
Total interest expense .................................... 3,220 3,163 9,494 8,727 6,584 6,068 7,308
------- ------- ------- ------- ------- ------- -------
Net interest income ..................................... 3,275 2,961 9,512 8,923 9,126 7,927 7,456
Provision for loan losses ................................. 574 42 706 136 182 249 184
------- ------- ------- ------- ------- ------- -------
Net interest income after provision for loan losses ....... 2,701 2,919 8,806 8,787 8,944 7,678 7,272
------- ------- ------- ------- ------- ------- -------
Fees and service charges .................................. 116 121 362 378 326 281 229
Gain on sales of securities ............................... -- -- 55 24 5 32 28
Other non-interest income ................................. 81 73 328 454 246 286 171
------- ------- ------- ------- ------- ------- -------
Total non-interest income ................................. 197 194 745 856 577 599 428
Total non-interest expense ................................ 1,657 1,520 8,693(3) 4,690 4,271 3,457 3,173
------- ------- ------- ------- ------- ------- -------
Income before taxes ....................................... 1,241 1,593 858 4,953 5,250 4,820 4,527
Income tax provision ...................................... 480 603 406 1,760 1,825 1,644 1,496
------- ------- ------- ------- ------- ------- -------
Net income ................................................ $ 761 $ 990 $ 452 $ 3,193 $ 3,425 $ 3,176 $ 3,031
======= ======= ======= ======= ======= ======= =======
- -------------
<FN>
(1) The allowance for loan losses at April 30, 1997, December 31, 1996, 1995,
1994, 1993 and 1992 was $1,666,000, $1,520,000, $885,000, $792,000,
$608,000 and $360,000, respectively.
(2) The Bank adopted Statement of Financial Accounting Standards ("SFAS") No.
115, "Accounting for Certain Investments in Debt and Equity Securities,"
effective as of January 1, 1994. Prior to the adoption of SFAS No. 115,
marketable equity securities were carried at the lower of amortized cost or
market value and the remaining securities were carried at amortized cost ,
as adjusted for amortization of premiums and accretion of discounts over
the remaining terms of the securities from the dates of purchase.
(3) Includes $1.3 million SAIF special assessment and $2.5 million cash
contribution to the Foundation.
</FN>
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Four Months Year Ended
Ended April 30, December 31,
---------------- ------------------------------------------------
1997(1) 1996(1) 1996 1995 1994 1993 1992
------- ------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net income to average
total assets) .......................................... 0.88% 1.19% 0.18%(2) 1.34% 1.62% 1.74% 1.76%
Return on equity (ratio of net income to average equity) 7.65 10.07 1.50 (2) 11.64 14.23 15.21 17.12
Interest rate spread information:
Average during period .............................. 3.45 3.37 3.51 3.61 4.28 4.22 4.16
Net interest margin(3) ............................. 3.96 3.81 3.98 4.00 4.60 4.56 4.54
Ratio of operating expense to average total assets ...... 1.92 1.83 3.45 (2) 1.97 2.03 1.89 1.84
Efficiency Ratio(4) ..................................... 0.48 0.48 0.85 (2) 0.48 0.44 0.41 0.40
Ratio of average interest-earning assets to average
interest-bearing liabilities ....................... 112.96 110.69 111.81 109.93 109.51 109.55 108.56
Quality Ratios:
Non-performing assets to total assets at end of period .. 0.87 1.18 1.44 1.11 0.72 1.05 1.32
Allowance for loan losses to non-performing loans
at end of period ................................... 73.78 33.46 41.30 38.73 55.58 32.02 16.57
Allowance for loan losses to gross loans receivable
at end of period ................................... 0.98 0.52 0.91 0.60 0.57 0.56 0.36
Capital Ratios:
Equity to total assets at end of period(5) .............. 11.63 11.52 11.42 11.52 11.33 11.80 10.83
Average equity to average assets ........................ 11.50 11.84 11.97 11.55 11.42 11.42 10.27
- ------------
(1) Ratios for the four-month periods have been annualized.
(2) Excluding the $1.3 million SAIF special assessment and the $2.5 million
cash contribution to the Foundation, net of tax, the return on assets,
return on equity and ratio of operating expense to average total assets
would have been 1.10%, 9.19% and 1.94%, respectively. The efficiency ratio
would have been 0.48.
(3) Net interest income divided by average interest-earning assets.
(4) The efficiency ratio represents non-interest expense divided by the sum of
net interest income and non-interest income.
(5) Ratio is exclusive of unrealized gain (loss) on securities
available-for-sale.
</TABLE>
20
<PAGE>
RECENT FINANCIAL DATA
The selected financial and other data of the Bank set forth below at
and for the two and six months ended June 30, 1997 were derived from unaudited
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) necessary for a fair presentation of the financial
condition and results of operations for the unaudited periods presented have
been included. The information presented below is qualified in its entirety by
the detailed information and financial statements included elsewhere in this
Prospectus and should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and the
audited Financial Statements of the Bank and Notes thereto included elsewhere in
this Prospectus.
At June 30, At April 30,
1997 1997
---- ----
Selected Financial Condition Data: (In Thousands)
- ----------------------------------
Total assets ................ $261,294 $260,002
Cash and cash equivalents ... 3,304 7,104
Loans receivable, net ....... 172,627 165,914
Securities available-for-sale 27,382 27,535
Securities held-to-maturity . 49,651 50,648
Deposits .................... 219,996 218,987
Total Borrowings ............ 7,500 7,500
Total Equity ................ 30,555 29,950
<TABLE>
<CAPTION>
Two Months Ended Six Months Ended
June 30, June 30,
----------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
Selected Operations Data: (In Thousands)
- -------------------------
<S> <C> <C> <C> <C>
Interest income ........................................ $3,213 $3,275 $9,708 $9,399
Interest expense ....................................... 1,669 1,558 4,889 4,721
------ ------ ------ ------
Net interest income before
provision for loan losses ........................... 1,544 1,717 4,819 4,678
Provision for loan losses .............................. 41 41 615 83
------ ------ ------ ------
Net interest income after
provision for loan losses ........................... 1,503 1,676 4,204 4,595
Fees and service charges ............................... 64 62 180 183
Other non-interest income .............................. 34 38 115 111
Non-interest expense ................................... 824 856 2,481 2,376
------ ------ ------ ------
Income before taxes .................................... 777 920 2,018 2,513
Income taxes ........................................... 270 343 750 946
------ ------ ------ ------
Net income ........................................... $ 507 $ 577 $1,268 $1,567
====== ====== ====== ======
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
At or for the At or for the
Two Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
1997 1996 1997 1996
------ ------ ------ -----
Selected Financial Ratios and Other Data:
- -----------------------------------------
<S> <C> <C> <C> <C>
Performance Ratios:
Return on average assets(1) .................................. 1.16 1.38 0.97 1.25
Return on average equity(1) .................................. 10.04 11.43 8.46 10.53
Average equity to average assets ............................. 11.60 12.09 11.53 11.91
Equity to total assets at end of period ...................... 11.69 12.03 11.69 12.03
Average interest rate spread(1) .............................. 3.18 3.89 3.37 3.56
Net interest margin(1)(2) .................................... 3.69 4.34 3.87 4.00
Average interest-earning assets to
average interest-bearing liabilities ........................ 112.78 111.52 112.86 110.83
Non-interest expense to average assets(1) .................... 1.89 2.05 1.91 1.90
Efficiency ratio(3) .......................................... 0.50 0.47 0.49 0.48
Asset Quality Ratios:
- ---------------------
Allowance for loan losses as a percent of
gross loans receivable ..................................... 0.97 0.60 0.97 0.60
Allowance for loan losses as a percent of
non-performing loans ....................................... 87.20 25.33 87.20 25.33
<FN>
- ------------
(1) Ratios for the two month periods have been annualized.
(2) Net income divided by average interest-earning assets.
(3) The efficiency ratio represents non-interest expense as a percent of net
interest income and non-interest income.
</FN>
</TABLE>
22
<PAGE>
Comparison of Financial Condition at June 30, 1997 and April 30, 1997
Total assets at June 30, 1997 were $261.3 million compared to $260.0
million at April 30, 1997, an increase of $1.3 million, or 0.5%. The increase in
total assets was due primarily to increases in loans receivable due to strong
loan demand, funded by a slight increase in deposits and advance payments by
borrowers for taxes and insurance, as well as a decrease in cash and cash
equivalents.
Total liabilities at June 30, 1997 were $230.7 million compared to
$230.1 million at April 30, 1997, an increase of $645,000, or 0.3%. The increase
is primarily due to a $1.0 million increase in deposits combined with a $774,000
increase in advance payments by borrowers for taxes and insurance, partially
offset by a $450,000 decrease in accrued interest payable as a result of
interest payments at quarter end.
Total equity at June 30, 1997 was $30.6 million compared to $30.0
million at April 30, 1997, an increase of $605,000, or 2.0% as a result of
$507,000 net income for the period combined with a change in unrealized loss on
securities available-for-sale from $276,000 at April 30, 1997 to $177,000 at
June 30, 1997.
Comparison of Operating Results for the Two Months Ended June 30, 1997 and June
30, 1996
General. Net income for the two months ended June 30, 1997 was
$507,000, a decrease of $70,000, from net earnings of $577,000 for the two
months ended June 30, 1996. The decrease was primarily due to a decrease of
$173,000 in net interest income as a result of increased cost of funds,
partially offset by a decrease in noninterest expense of $32,000 and a decrease
in income taxes of $73,000.
Interest Income. Interest income for the two months ended June 30, 1997
was $3.2 million compared to $3.3 million for the two months ended June 30,
1996, a decrease of $62,000, or 1.9%. The decrease resulted primarily from a
decrease in the average yield on interest-earning assets from 8.28% for the two
months ended June 30, 1996 to 7.68% for the two months ended June 30, 1997. This
was partially offset by an increase in the average balance of interest-earning
assets from $237.2 million for the two months ended June 30, 1996 to $250.9
million for the two months ended June 30, 1997. The average balance of loans
receivable increased from $149.8 million for the two months ended June 30, 1996
to $170.0 million for the two months ended June 30, 1997. The increase in the
average balance of loans receivable was a result of increased demand in the
Bank's market area. The decrease in the average yield on interest-earning assets
was primarily reflective of the decrease in the average yield on loans from
8.59% for the two months ended June 30, 1996 to 8.17% for the two months ended
June 30, 1997. This decrease was a result of repayments of higher rate loans and
the origination of lower yielding loans due to the current rate environment.
Interest Expense. Interest expense was $1.7 million for the two months
ended June 30, 1997 compared to $1.6 million for the two months ended June 30
1996, an increase of $111,000,
23
<PAGE>
or 7.1%. The increase was a result of the increase in the average balance of
interest-bearing liabilities combined with an increase in the average cost of
funds for the periods. The average balance of interest-bearing liabilities
increased from $212.7 for the two months ended June 30, 1996 to $222.5 million
for the two months ended June 30, 1997. The average cost of funds increased from
4.40% for the two months ended June 30, 1996 to 4.50% for the two months ended
June 30, 1997. The increase in the average cost of funds was a result of the
increases in the average balances being primarily in certificates of deposit and
FHLB advances which are at higher rates than the core deposits. The increase in
certificates of deposit was a result of increased market demand.
Net Interest Income. Net interest income was $1.5 million for the two
months ended June 30, 1997, a decrease of $173,000, or 10.1% from net interest
income of $1.7 million for the two months ended June 30, 1996. The decrease was
primarily a result of a decrease in the net interest margin from 4.34% for the
two months ended June 30, 1996 to 3.69% for the two months ended June 30, 1997.
In addition, the net interest spread decreased from 3.89% for the two months
ended June 30, 1996 to 3.18% for the two months ended June 30, 1997. Both
decreases were a result of an increase in the average cost of interest-bearing
liabilities and a decrease in the average yield of interest-earning assets.
Provision for Loan Losses. The Bank recorded a $41,000 provision for
loan losses for the two months ended June 30, 1997 and June 30, 1996. At June
30, 1997, the allowance for loan losses totaled $1.7 million, or .97% of total
loans and 87.0% of total non-performing loans. The amount of the provision and
allowance for estimated losses on loans is influenced by current economic
conditions, actual loss experience, industry trends and other factors, such as
adverse economic conditions, including real estate values, in the Bank's market
area. In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for estimated
losses on loans. Such agencies may require the Bank to provide additions to the
allowance based upon judgments which differ from those of management. Although
management uses the best information available and maintains the Bank's
allowance for losses at a level it believes adequate to provide for losses,
future adjustments to the allowance may be necessary due to economic, operating,
regulatory and other conditions that may be beyond the Bank's control.
Noninterest Income. Noninterest income for the two months ended June
30, 1997 was $98,000 compared to $100,000 for the two months ended June 30,
1996, a decrease of $2,000, or 2.0%.
Noninterest Expense. Noninterest expense was $824,000 for the two
months ended June 30, 1997 compared to $856,000 for the two months ended June
30, 1996, a decrease of $32,000, or 3.7%. The decrease was primarily a result of
a decrease in Federal insurance premiums of $56,000 as a result of a decrease in
rates due to the recapitalization of SAIF during 1996, combined with a decrease
in compensation and benefits of $99,000 primarily due to an employer profit
sharing contribution made in April 1997 of $105,000 compared to the contribution
being made in June of the prior year. These decreases were partially offset by
an increase in REO expense of $113,000.
24
<PAGE>
Income Tax Expense. The provision for income taxes totaled $270,000 for
the two months ended June 30, 1997 compared to $343,000 for the two months ended
June 30, 1996. The decrease was primarily due to a decrease in income before
income taxes of $143,000.
Comparison of Operating Results for the Six Months Ended June 30, 1997 and June
30, 1996
General. Net income for the six months ended June 30, 1997 was $1.3
million compared to net income of $1.6 million for the six months ended June 30,
1996, a decrease of $299,000, or 19.1%. The decrease was primarily a result of a
provision for loan losses of $615,000 for the six months ended June 30, 1997
compared to $83,000 for the six months ended June 30, 1996, combined with an
increase of $105,000 in noninterest expense. These increases were partially
offset by an increase of $141,000 in net interest income and a decrease of
$196,000 in income tax expense. The increase in the provision for loan losses
was a result of the Bennett Funding loans secured by leases as further discussed
herein.
Interest Income. Interest income for the six months ended June 30, 1997
was $9.7 million compared to $9.4 million for the six months ended June 30,
1996, an increase of $309,000, or 3.3%. The increase resulted from an increase
in the average balance of interest-earning assets from $233.9 million for the
six months ended June 30, 1996 to $249.1 million for the six months ended June
30, 1997, partially offset by a decrease in the average yield on
interest-earning assets. The average balance of loans receivable increased by
$19.2 million. The average yield on interest-earning assets decreased from 8.04%
for the six months ended June 30, 1996 to 7.80% for the six months ended June
30, 1997. The decrease was primarily a result of decreased yields on the loan
portfolio due to the repayment of older higher yielding loans and the
origination of lower yielding loans as a result of the current rate environment.
Interest Expense. Interest expense for the six months ended June 30,
1997 was $4.9 million compared to $4.7 million for the six months ended June 30,
1996, an increase of $168,000, or 3.6%. The increase in interest expense is
primarily the result of an increase in the average balance of interest-bearing
liabilities from $211.0 million for the six months ended June 30, 1996 to $220.7
million for the six months ended June 30, 1997 as a result of increased
deposits. This increase was partially offset by a decrease in the average cost
of funds from 4.47% for the six months ended June 30, 1996 to 4.43% for the six
months ended June 30, 1997. The decrease was primarily in certificates of
deposit.
Net Interest Income. Net interest income of $4.8 million for the six
months ended June 30, 1997 represented an increase of $141,000 from the $4.7
million reported for the six months ended June 30, 1996. There was a decrease in
the net interest spread from 3.56% for the six months ended June 30, 1996 to
3.37% for the six months ended June 30, 1997. The decrease in the net interest
rate spread was a result of the average yield of interest-earning assets
decreasing at a more rapid rate than the average cost of interest-bearing
liabilities. However, the ratio of average interest-earning assets to average
interest-bearing liabilities increased from 110.83% for the six months ended
June 30, 1996 to 112.86% for the six months ended June 30, 1997, and the net
interest margin decreased slightly from 4.00% to 3.87% for the same period.
25
<PAGE>
Provision for Loan Losses. The Bank's provision for loan losses for the
six months ended June 30, 1997 was $615,000 compared to $83,000 for the six
months ended June 30, 1996. The increase in the provision for loan losses was
primarily related to various loans to The Bennett Funding Group, Inc. (Bennett
Funding) which were secured by leases. Bennett Funding filed bankruptcy during
1996. The Bank had loans receivable from Bennett Funding of $839,000 at June 30,
1997. As of June 30, 1996, management had not determined whether the leases
securing the loans on their books were legally secured, or whether they were
fraudulent. No additional provision was made at that time as management
continued its investigation and awaited rulings from the bankruptcy court. The
Bank received a settlement offer in February 1997. As a result of the proposed
settlement, the Bank charged off $432,000 of the Bennett Funding loans, leaving
$839,000 of loans on the books. As part of the settlement, the Bank was to
receive a cash payment of $529,000. The remaining $310,000 was to be collected
through future payments from the lessees. Subsequent to June 30, 1997, the Bank
received $713,481 from the trustee as part of the settlement. However, at this
time management is unsure as to the full collectibility of the remaining payment
stream. In addition, the Bank has experienced significant loan growth during
1997. Gross loans increased $21.7 million, or 14.08% from 1996. Management
increases the allowance for loan losses for loan growth based on a statistical
percentage developed considering past loss experience and other factors
discussed below. The allowance for loan losses represented .97% and .60% of
gross loans receivable at June 30, 1997 and 1996, respectively. The amount of
the provision and allowance for estimated losses on loans is influenced by
current economic conditions, actual loss experience, industry trends and other
factors, such as adverse economic conditions, including real estate values, in
the Bank's market area. In addition, various regulatory agencies, as an integral
part of their examination process, periodically review the Bank's allowance for
estimated losses on loans. Such agencies may require the Bank to provide
additions to the allowance based upon judgments which differ from those of
management. Although management uses the best information available and
maintains the Bank's allowance for losses at a level it believes adequate to
provide for losses, future adjustments to the allowance may be necessary due to
economic, operating, regulatory and other conditions that may be beyond the
Bank's control.
Noninterest Income. Noninterest income for the six months ended June
30, 1997 was $295,000 compared to $294,000 for the six months ended June 30,
1996, representing fairly stable service charges and other noninterest income.
Noninterest Expense. Noninterest expense was $2.5 million for the six
months ended June 30, 1997 compared to $2.4 million for the six months ended
June 30, 1996, an increase of $105,000, or 4.4%. The increase was primarily due
to an increase in REO expense of $145,000, combined with an increase in data
processing expense of $13,000, occupancy and equipment expense of $10,000 and
various other items. These items were partially offset by a decrease in FDIC
insurance premiums of $195,000 due to a reduction in rates.
Income Taxes. The provision for income taxes was $750,000 for the six
months ended June 30, 1997 compared to $946,000 for the six months ended June
30, 1996. The decrease was primarily due to a decrease in pretax income of
$495,000.
26
<PAGE>
RISK FACTORS
The following factors, in addition to those discussed elsewhere in this
Prospectus, should be considered by investors before deciding whether to
purchase the Common Stock offered in the Offering.
Interest Rate Risk Exposure
The Bank's profitability is dependent to a large extent upon its net
interest income, which is the difference between its interest income on
interest-earning assets, such as loans and investments, and its interest expense
on interest-bearing liabilities, such as deposits and borrowings. When interest
rates rise, the Bank's net interest income tends to be adversely impacted since
its liabilities tend to reprice more quickly than its assets. Conversely, in a
declining rate environment the Bank's net interest income is generally
positively impacted since its assets tend to reprice more slowly than its
liabilities. Changes in the level of interest rates also affect the amount of
loans originated by the Bank and, thus, the amount of loan and commitment fees,
as well as the market value of the Bank's interest-earning assets. Moreover,
increases in interest rates also can result in disintermediation, which is the
flow of funds away from savings institutions into direct investments, such as
corporate securities and other investment vehicles, which generally pay higher
rates of return than savings institutions. Finally, a flattening of the "yield
curve" (i.e., a decline in the difference between long and short term interest
rates), could adversely impact net interest income to the extent that the Bank's
assets have a longer average term than its liabilities.
In managing its asset/liability mix, the Bank often, depending on the
relationship between long- and short-term interest rates, market conditions and
consumer preference, places more emphasis on managing net interest margin than
on better matching the interest rate sensitivity of its assets and liabilities
in an effort to enhance net interest income. In particular, because of customer
demand, a large majority of the Bank's residential loans carry fixed interest
rates. As a result, the Bank will continue to be significantly vulnerable to
changes in interest rates and to decreases in the difference between long and
short term interest rates.
The Bank has taken a number of steps to limit its sensitivity to
interest rate changes. Nevertheless, at March 31, 1997, the most recent date for
which data is available, the Bank's net portfolio value would have declined by
29% and 58%, respectively, in the event of instantaneous 200 and 400 basis point
increases in general interest rates. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Asset/Liability Management."
27
<PAGE>
Risks Associated with the Stock Contribution to a Charitable Foundation
The Stock Contribution is subject to the approval of the Bank's members
at the Special Meeting. If approved by members, the Stock Contribution will be
made within 12 months following the completion of the Conversion and will be
expensed when the Conversion is completed, which is expected in the fourth
quarter of 1997.
Negative Impact on Earnings. Assuming receipt of approval of the Bank's
members, the Stock Contribution will have an adverse impact on the Holding
Company's earnings. The Holding Company will recognize an expense in the amount
of the $2.5 million ($1.5 million net of taxes) in the quarter in which the
Conversion is completed, which is expected to be the fourth quarter of fiscal
1997. Such expense will reduce earnings and have a material adverse impact on
the Holding Company's earnings in the fiscal quarter and year recorded. The
Holding Company has been advised by its independent accountants that the Stock
Contribution will be tax deductible, subject to a limitation based on 10% of the
Holding Company's annual taxable income. If the Stock Contribution had been made
at April 30, 1997, the Bank would have reported a net loss of $739,000 for the
prior four month period rather than net income of $761,000.
In the future, the Company may make additional contributions to the
Foundation, although the Company has no current plans regarding the amount or
timing of any such future contributions. The amount of future contributions, if
any, will be determined based upon, among other factors, an assessment of the
Company's then current financial position, operations, and prospects and on the
need for charitable activities in the Bank's market area. Any such contribution,
regardless of form, will result in an increase in non-interest expense and thus
a reduction in net earnings. In addition, any contribution of authorized but
unissued shares would dilute the interests of outstanding shares. However, the
Company currently anticipates that any contribution of shares by it to the
Foundation will be funded through shares repurchased in the open market. The
Company does not intend to make any contributions to the Foundation which are
not deductible for federal income tax purposes.
Dilution of Stockholder's Interests. The Stock Contribution will
involve the donation of 250,000 shares of the Common Stock, or the sale of such
shares for their aggregate par value ($2,500), to the Foundation. Upon
completion of the Conversion and the Stock Contribution, the Holding Company
will have 4,367,000 shares issued and outstanding at the midpoint of the
Estimated Valuation Range, of which the Foundation will own 250,000 shares, or
5.7%. As a result, persons purchasing shares in the Conversion will have their
share ownership and voting interest in the Holding Company diluted by 5.7%. See
"Pro Forma Data."
Possible Nondeductibility of the Stock Contribution. The Internal
Revenue Service ("IRS") has determined that the Foundation is exempt from
federal income tax under Section 501(a) of the Code as an organization described
in Section 501(c)(3) of the Code. Assuming that the Foundation so qualifies, the
Holding Company will be entitled to a deduction in the amount of the Stock
Contribution, subject to an annual limitation based on 10% of the Holding
Company's annual taxable income. The Holding Company, however, would be able to
carry forward any unused portion of the deduction for five years following the
Stock Contribution for Federal and Illinois tax purposes. Based on present
information, the Holding Company currently estimates that the Stock Contribution
should be fully deductible for federal tax and Illinois purposes. However, no
assurances can be made that the Holding Company will have sufficient pre-tax
income over the five-year period following the year in which the Stock
Contribution is made to utilize fully the carryover related to the excess
contribution.
Potential Change in Valuation and Capital if the Stock Contribution is
Not Made. The Stock Contribution was taken into account by FinPro in determining
the estimated pro forma market value of the Holding Company. The aggregate price
of the shares of Common Stock being offered in the Offering is based upon the
Appraisal. The pro forma aggregate price of the shares being offered for sale in
the Conversion is currently estimated to be between $35.0 million and $54.5
28
<PAGE>
million, with a midpoint of $41.2 million. The pro forma price to book value
ratio and the pro forma price to earnings ratio are 66.18% and 13.33x,
respectively, at the midpoint of the Estimated Valuation Range.
If the Stock Contribution is not part of the Conversion, the Estimated
Valuation Range of the shares being offered is estimated to be between $39.1
million and $60.8 million. This represents an increase of $4.8 million at the
midpoint of the Estimated Valuation Range. In such event the estimated pro forma
stockholders' equity of the Holding Company would be approximately $69.4 million
at the midpoint based on a pro forma price to book ratio of 66.18% and a pro
forma price to earnings ratio of 13.33x. See "Comparison of Valuation and Pro
Forma Information with No Stock Contribution."
The decrease in the amount of Common Stock being offered for sale as a
result of the Stock Contribution will not have a significant effect on the
Holding Company's or the Bank's capital position. The Bank's regulatory capital
is significantly in excess of its regulatory capital requirements and will
further exceed such requirements following the Conversion. The Bank's tangible,
core and risk-based capital ratios at April 30, 1997 were 11.4%, 11.4% and
24.4%, respectively. Assuming the sale of shares at the midpoint of the
Estimated Valuation Range, the Bank's pro forma tangible, core and risk-based
capital ratios at April 30, 1997 would be 16.7%, 16.7% and 36.5%, respectively.
On a consolidated basis, as of April 30, 1997, the Holding Company's pro forma
stockholders' equity would be $66.0 million, assuming the sale of shares at the
midpoint of the Estimated Valuation Range and contribution to the Foundation.
Pro forma stockholders' equity per share at April 30, 1997 and pro forma net
earnings per share for the four months ended April 30, 1997 would be $15.11 and
$0.25, respectively. If the Stock Contribution were not made in the Conversion,
based on the FinPro estimate, the Holding Company's pro forma stockholders'
equity would be approximately $69.4 million at the midpoint of the estimate and
pro forma stockholders' equity per share and pro forma net earnings per share
would be approximately the same with the Stock Contribution as without the Stock
Contribution. See "Comparison of Valuation and Pro Forma Information with No
Stock Contribution."
Potential Anti-Takeover Effect. If the Stock Contribution is approved
by the Bank's members, upon completion of the Conversion, assuming the sale of
the midpoint number of the Conversion shares of the Estimated Valuation Range,
the Foundation would own 5.7% of the Holding Company's outstanding shares. Such
shares will be owned solely by the Foundation; however pursuant to the terms of
the Stock Contribution as mandated by the OTS, the shares of Common Stock of the
Holding Company held by the Foundation must be voted in the same ratio as other
shares of the Holding Company's Common Stock on all proposals considered by the
stockholders of the Holding Company. See "The Conversion -- Stock Contribution
to Charitable Foundation -- Regulatory Conditions Imposed on the Foundation."
The Holding Company and the Foundation will take the necessary steps to provide
such requirement in the Foundation's corporate governance documents. As such,
the Holding Company does not believe the Foundation will have an anti-takeover
effect on the Holding Company. In the event that the OTS were to waive this
voting restriction, the Foundation's Board of Trustees would exercise sole
voting power over such shares and would no longer be subject to the voting
restriction. However, the OTS could impose additional conditions at that time on
the composition of the Board of the Foundation or which otherwise relate to
control of the Common Stock of the Holding Company held by the Foundation. See
"The Conversion -- the Stock Contribution to the Charitable Foundation --
Regulatory Conditions Imposed on the Foundation." If a waiver of the voting
restriction were granted by the OTS and no
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further conditions were imposed on the Foundation at that time, management of
the Holding Company and the Bank could benefit to the extent that the Board of
Trustees of the Foundation determines to vote the shares of Common Stock held by
the Foundation in favor of proposals supported by the Holding Company and the
Bank. Furthermore, when the Foundation's shares are combined with shares
purchased directly by executive officers and directors of the Holding Company,
shares issued pursuant to proposed stock benefit plans, and shares held in the
Bank's ESOP, the aggregate of such shares could exceed 20% of the Holding
Company's outstanding Common Stock, which could enable management to defeat
stockholder proposals requiring 80% approval. Consequently, this potential
voting control might preclude takeover attempts that other stockholders deem to
be in their best interest, and might tend to perpetuate management. Since the
ESOP shares are allocated to eligible employees of the Bank, and any unallocated
shares will be voted by an independent trustee, and because awards under the
proposed stock benefit plans may be granted to employees other than executive
officers and directors, management of the Holding Company does not expect to
have voting control of all shares held or to be allocated by the ESOP or other
stock benefit plans. See, "-- Certain Anti-Takeover Provisions Which May
Discourage Takeover Attempts -- Voting Control of Officers and Directors."
There are no agreements or understandings, written or tacit, with
respect to the exercise of either direct or indirect control over the management
or policies of the Holding Company by the Foundation, including agreements
related to voting, acquisition or disposition of the Holding Company's Common
Stock. Finally, as the Foundation sells its shares of Common Stock over time,
its ownership interest and voting power in the Holding Company is expected to
decrease.
Potential Challenges. The funding of a charitable foundation as part of
a conversion is innovative and has occurred on only a few other occasions. As
such, the Stock Contribution may be subject to potential challenges
notwithstanding that the Boards of Directors of the Holding Company and the Bank
have carefully considered the various factors involved in the establishment of
the Foundation in reaching their determination to make the Stock Contribution as
part of the Conversion. See "The Conversion--the Stock Contribution to the
Charitable Foundation" In conjunction with its approval of the Conversion, the
Bank determined to submit the Stock Contribution to a vote of members so that
members have a right to vote on whether the Stock Contribution should be made.
If an action were instituted seeking to require the Bank to eliminate the Stock
Contribution in connection with the Conversion, no assurances can be made that
the resolution of such action would not result in a delay in the consummation of
the Conversion or that any objecting persons would not be ultimately successful
in obtaining such removal or other equitable relief or monetary damages against
the Holding Company or the Bank. Additionally, if the Holding Company and the
Bank are forced to eliminate the Stock Contribution, the Holding Company may be
required to resolicit subscribers in the Offering.
Approval of Members. The Stock Contribution is subject to the approval
of a majority of the total outstanding votes of the Bank's members eligible to
be cast at the Special Meeting. The Stock Contribution will be considered as a
separate matter from the proposal to approve the Plan of Conversion. If the
Bank's members approve the Plan of Conversion, but not the Stock Contribution,
the Bank intends to complete the Conversion without the Stock Contribution.
Failure to approve the Stock Contribution may materially increase the pro forma
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market value of the Common Stock being offered for sale in the Offering since
the Estimated Valuation Range, as set forth herein, takes into account the
expense related to the Stock Contribution. If the pro forma market value of the
shares of Holding Company stock to be sold without the Stock Contribution is
either greater than $54.5 million or less than $35.0 million or if the OTS
otherwise requires a resolicitation of subscribers, the Bank will establish a
new Estimated Valuation Range and commence a resolicitation of subscribers
(i.e., subscribers will be permitted to continue or modify their orders, in
which case they will need to affirmatively reconfirm their subscriptions prior
to the expiration of the resolicitation offering or their subscription funds
will be promptly refunded with interest.) Any change in the Estimated Valuation
Range must be approved by the OTS. "See The Conversion-- Stock Pricing."
Competition
First Security experiences significant competition in its local market
area in both originating real estate and other loans and attracting deposits.
This competition arises from other savings institutions as well as credit
unions, mortgage banks, commercial banks, mutual funds and, national and local
securities firms. Due to their size, many competitors can achieve certain
economies of scale and as a result offer a broader range of products and
services than the Bank. The Bank attempts to mitigate the effect of such factors
by emphasizing customer service and community outreach. Such competition may
limit First Security's growth in the future. See "Business - Competition."
Geographic Concentration of Business Activities
The Bank's lending and deposit gathering activities are focused
primarily on selected communities of the greater Chicago and Philadelphia areas.
In the event that such communities experienced an economic slow down or a
decline in real estate values, the Bank's results of operations could be
materially adversely affected. See "Business -- Market Area."
Takeover Defensive Provisions
Holding Company and Bank Governing Instruments. Certain provisions of
the Holding Company's Certificate of Incorporation and Bylaws assist the Holding
Company in maintaining its status as an independent publicly owned corporation.
However, such provisions may also block stockholders from approving a potential
takeover of the Holding Company which a majority of such stockholders believe to
be in their best interests. These provisions provide for, among other things,
limiting voting rights of beneficial owners of more than 10% of the Common
Stock, staggered terms for directors, noncumulative voting for directors, limits
on the calling of special meetings, a fair price/supermajority vote requirement
for certain business combinations and certain notice requirements. The 10% vote
limitation would not affect the ability of an individual who is not the
beneficial owner of more than 10% of the Common Stock to solicit revocable
proxies in a public solicitation for proxies for a particular meeting of
stockholders and to vote such proxies. In addition, provisions in the Bank's
federal stock Charter that have an anti-takeover effect could also be applicable
to changes in control of the Holding Company as the sole shareholder of the
Bank. The Bank's Charter includes a provision applicable for five years which
prohibits acquisitions and offers to acquire, directly or indirectly, the
beneficial ownership of more than 10% of the Bank's securities. Any person
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violating this restriction may not vote the Bank's securities in excess of 10%.
Any or all of these provisions may discourage potential proxy contests and other
takeover attempts, particularly those which have not been negotiated with the
Board of Directors. In addition, the Holding Company's certificate of
incorporation also authorizes preferred stock with terms to be established by
the Board of Directors which may rank prior to the Common Stock as to dividend
rights, liquidation preferences, or both, may have full or limited voting rights
and may have a dilutive effect on the ownership interests of holders of the
Common Stock. See "Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions."
Regulatory and Statutory Provisions. Federal regulations prohibit, for
a period of three years following the completion of the Conversion, any person
from offering to acquire or acquiring the beneficial ownership of more than 10%
of the stock of a converted savings institution or its holding company without
prior OTS approval. Federal law also requires OTS approval prior to the
acquisition of "control" (as defined in OTS regulations) of an insured
institution, including a holding company thereof. See "Restrictions on
Acquisitions of Stock and Related Takeover Defensive Provisions."
Employment Agreement, Severance Agreements and Other Benefit Plans. The
employment agreement, severance agreements, the proposed Stock Option Plan and
the proposed RRP also contain provisions that could have the effect of
discouraging takeover attempts of the Holding Company.
The Bank intends to enter into an employment agreement with President
Kulas and severance agreements with four other executive officers. The
employment agreement provides for an annual base salary in an amount not less
than the employee's current salary and an initial term of three years. The
agreement may be extended for an additional year on each annual anniversary
date, but only if such extensions are approved by the Board of Directors. The
employment agreement also provides for payment of the employee's salary to the
employee for the remainder of the term of the agreement, plus an additional
amount, the sum of which will not exceed a percentage of the employee's base
compensation, in the event there is a "change in control" of the Bank (as
defined in the agreement) where employment terminates involuntarily in
connection with such change in control or within 12 months thereafter.
The Bank also intends to enter into change in control severance
agreements with four other executive officers. Such agreements become effective
upon completion of the Conversion and have initial terms of 24 months. In the
event the officer is terminated following a change in control (as defined in the
agreements), such officer will be entitled to a severance payment equal to 200%
of such employee's annual compensation. Finally, the Bank intends to adopt a
Severance Compensation Plan providing other employees with certain severance
benefits in the event they are terminated within 12 months following a change in
control. For more information regarding these agreements, see "Management -
Executive Compensation."
Possible Dilutive Effects. The issuance of additional shares pursuant
to the proposed Stock Option Plan and RRP will result in a dilution in the
percentage of ownership of the Holding Company of those persons purchasing
Common Stock in the Conversion, assuming that the shares utilized to fund the
proposed Stock Option Plan and RRP awards come from authorized but unissued
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shares. Assuming the exercise of all options available under the Stock Option
Plan and the award of all shares available under the RRP, and assuming the use
of authorized but unissued shares, the interest of stockholders will be diluted
by approximately 9.1% and 3.8%, respectively. See "Pro Forma Data," "Management
- - Benefit Plans - Stock Option and Incentive Plan," and "- Recognition and
Retention Plan" and "Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions." For financial accounting purposes, grants under the
proposed RRP will result in the recording of compensation expense over the
vesting period. See "Pro Forma Data."
Voting Control of Directors and Executive Officers. The directors and
executive officers (13 persons) of the Bank are anticipated to purchase an
aggregate of approximately $2.1 million or approximately 6.0% of the shares
offered in the Conversion at the minimum of the Estimated Valuation Range, or
4.4% of the shares offered in the Conversion at the maximum of the Estimated
Valuation Range, exclusive of shares that may be attributable to directors and
officers through the RRP, the Stock Option Plan and the ESOP, which may give
directors, executive officers and employees the potential to control the voting
of additional Common Stock. In addition, in connection with the Conversion the
Foundation will receive 250,000 shares of Common Stock which, if a waiver of the
voting restriction imposed on such Common Stock is obtained from the OTS, may be
voted as determined by the Trustees of the Foundation who also will be directors
or officers of the Holding Company and the Bank. Management's voting control
could, together with additional stockholder support, defeat stockholder
proposals requiring 80% approval of stockholders. As a result, this voting
control may preclude takeover attempts that certain stockholders deem to be in
their best interest and tend to perpetuate existing management. See
"Restrictions on Acquisition of the Holding Company and the Bank--Restrictions
in the Holding Company's Certificate of Incorporation and Bylaws."
Post Conversion Overhead Expense
After completion of the Conversion, the Holding Company's noninterest
expense is likely to increase as a result of the financial accounting, legal and
tax expenses usually associated with operating as a public company. See
"Regulation - Federal and State Taxation" and "Additional Information." In
addition, it is currently anticipated that the Holding Company will record
additional expense based on the proposed RRP. See "Pro Forma Data" and
"Management - Benefit Plans Recognition and Retention Plan." Finally, the
Holding Company will also record additional expense as a result of the adoption
of the ESOP. See "Management - Benefit Plans - Employee Stock Ownership Plan."
Statement of Position 93-6 "Employers' Accounting for Employee Stock
Ownership Plans" ("SOP 93-6") requires an employer to record compensation
expense in an amount equal to the fair value of shares committed to be released
to employees from an employee stock ownership plan. Assuming shares of Common
Stock appreciate in value over time, SOP 93-6 would increase compensation
expense relating to the ESOP to be established in connection with the
Conversion. It is not possible to determine at this time the extent of such
impact on future net income. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Impact of New Accounting
Standards" and "Pro Forma Data."
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In addition, the Company will experience additional expense in the
quarter in which the Conversion is completed as a result of the Stock
Contribution. See "The Conversion--Stock Contribution to the Charitable
Foundation."
Regulatory Oversight
The Bank is subject to extensive regulation, supervision and
examination by the OTS as its chartering authority and primary federal
regulator, and by the FDIC, which insures its deposits up to applicable limits.
The Bank is a member of the Federal Home Loan Bank (the "FHLB") of Chicago and
is subject to certain limited regulation by the Board of Governors of the
Federal Reserve System ("Federal Reserve Board"). As the savings and loan
holding company of the Bank, the Holding Company will be subject to regulation
and oversight by the OTS. See "Regulation." Such regulation and supervision
governs the activities in which an institution can engage and is intended
primarily for the protection of the insurance fund and depositors. Regulatory
authorities have been granted extensive discretion in connection with their
supervisory and enforcement activities which are intended to strengthen the
financial condition of the banking industry, including the imposition of
restrictions on the operation of an institution, the classification of assets by
the institution, the adequacy of an institution's capital and allowance for loan
losses and the assessment of fees to protect the insurance funds. See
"Regulation - Federal Regulation of Savings Associations" and "- Regulatory
Capital Requirements." Any change in such regulation and oversight, whether by
the OTS, the Federal Reserve Board, the FDIC or Congress, could have a material
impact on the Holding Company, the Bank and their respective operations.
Risk of Delay in Completion of the Offering
The Subscription Offering will expire at ____, Chicago, Illinois time,
on _____ __, 1997 unless extended by the Bank and the Holding Company. Depending
on the availability of shares and market conditions at or near the completion of
the Subscription Offering, the Holding Company may conduct a Public Offering
through FBR. If the Offering is extended beyond ___ _, 1997, all subscribers
will have the right to modify or rescind their subscriptions and to have their
subscription funds returned with interest. There can be no assurance that the
Offering will not be extended as set forth above.
A material delay in the completion of the sale of all unsubscribed
shares in the Public Offering or otherwise may result in a significant increase
in the costs in completing the Conversion. Significant changes in the Bank's
operations and financial condition, the aggregate market value of the shares to
be issued in the Conversion and general market conditions may occur during such
material delay. In the event the Conversion is not consummated within 24 months
after the date of the Special Meeting, OTS regulations would require the Bank to
charge accrued Conversion costs to then-current period operations. See "The
Conversion - Risk of Delay in Completion of the Offering."
Absence of Active Market for the Common Stock
The Holding Company, as a newly organized company, has never issued
capital stock. Consequently, there is not at this time any market for the Common
Stock. The Holding Company has applied for listing of the Common Stock on the
Nasdaq Stock Market under the symbol "____." FBR has agreed to act as a
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market maker and to assist the Holding Company in securing a second market maker
to make a market in the Common Stock. However, there can be no assurance that at
least two market makers will be obtained, that the Bank will receive final
approval for listing on the Nasdaq Stock Market, that an active and liquid
market for the Common Stock will develop or be maintained or that resales of the
Common Stock can be made at or above the Purchase Price. If a second market
maker is not secured or subsequently stops coverage, the Common Stock may not be
listed on the Nasdaq Stock Market (or if initially listed, may be delisted),
which could reduce the activity and liquidity in the market for the Common
Stock. See "Market for Common Stock."
FIRST SECURITYFED FINANCIAL, INC.
The Holding Company was formed at the direction of First Security in
July 1997 for the purpose of becoming a savings and loan holding company and
owning all of the outstanding stock of the Bank issued in the Conversion. The
Holding Company is incorporated under the laws of the State of Delaware. The
Holding Company is authorized to do business in the State of Illinois, and
generally is authorized to engage in any activity that is permitted by the
Delaware General Corporation Law. The business of the Holding Company initially
will consist only of the business of First Security. The holding company
structure will, however, provide the Holding Company with greater flexibility
than the Bank has to diversify its business activities, through existing or
newly formed subsidiaries, or through acquisitions or mergers of stock financial
institutions, as well as, other companies. Although there are no current
arrangements, understandings or agreements regarding any such activity or
acquisition, the Holding Company will be in a position after the Conversion,
subject to regulatory restrictions, to take advantage of any favorable
acquisition opportunities that may arise.
The assets of the Holding Company will consist initially of the stock
of First Security, a note evidencing the Holding Company's loan to the ESOP and
up to 50% of the net proceeds from the Conversion (less the amount used to fund
the ESOP loan). See "Use of Proceeds." Initially, any activities of the Holding
Company are anticipated to be funded by such retained proceeds and the income
thereon and dividends from First Security, if any. See "Dividends" and
"Regulation Holding Company Regulation." Thereafter, activities of the Holding
Company may also be funded through sales of additional securities, through
borrowings and through income generated by other activities of the Holding
Company. At this time, there are no plans regarding such other activities other
than the intended loan to the ESOP to facilitate its purchase of Common Stock in
the Conversion. See "Management - Benefit Plans - Employee Stock Ownership
Plan."
The executive office of the Holding Company is located at 936 North
Western Avenue, Chicago, Illinois 60622-4695. Its telephone number at that
address is (773) ___-____.
FIRST SECURITY
First Security serves the financial needs of communities in its market
area through its main office located at 936 North Western Avenue, Chicago,
Illinois and its branch offices located in Chicago, Illinois, Philadelphia,
Pennsylvania and Rolling Meadows, Illinois. Its deposits are insured up to
applicable limits by the Federal Deposit Insurance Corporation ("FDIC"). At
April 30, 1997, First Security had total assets of $260.0 million, deposits of
$219.0 million and equity of $30.0 million (or 11.54% of total assets).
First Security has been, and intends to continue to be, an independent,
community oriented, financial institution. First Security's business involves
attracting deposits from the general public and using such deposits, together
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with other funds, to originate one- to four-family residential mortgage loans
and, to a lesser extent, multi-family and commercial real estate, consumer and
other loans primarily in its market area. At April 30, 1997, $137.5 million, or
81.32%, of the Bank's total loan portfolio consisted of residential one- to
four-family mortgage loans. See "Business - Lending Activities." The Bank also
invests in mortgage-backed and other securities and other permissible
investments. See "Business - Investment Activities - Securities" and "-
Mortgage-Backed and Related Securities."
The executive office of the Bank is located at 936 North Western
Avenue, Chicago, Illinois 60662-4695. Its telephone number at that address is
(773) 772-4500.
USE OF PROCEEDS
Although the actual net proceeds from the sale of the Common Stock
cannot be determined until the Conversion is completed, it is presently
anticipated that such net proceeds will be between $34.2 million and $46.4
million (or up to $53.4 million in the event of an increase in the aggregate pro
forma market value of the Common Stock of up to 15% above the maximum of the
Estimated Valuation Range). See "Pro Forma Data" and "The Conversion - Stock
Pricing and Number of Shares to be Issued" as to the assumptions used to arrive
at such amounts.
In exchange for all of the common stock of First Security issued in the
Conversion, the Holding Company will contribute approximately 50% of the net
proceeds from the sale of the Holding Company's Common Stock to First Security.
On an interim basis, the proceeds will be invested by the Holding Company and
First Security in short-term investments similar to those currently in the
Bank's portfolio. The specific types and amounts of short-term assets will be
determined based on market conditions at the time of the completion of the
Conversion. In addition, the Holding Company intends to provide the funding for
the ESOP loan. Based upon the initial Purchase Price of $10.00 per share, the
dollar amount of the ESOP loan would range from $3.0 million (based upon the
sale of shares at the minimum of the Estimated Valuation Range) to $4.0 million
(based upon the sale of shares at the maximum of the Estimated Valuation Range).
The interest rate to be charged by the Holding Company on the ESOP loan will be
based upon the IRS prescribed applicable federal rate at the time of
origination. It is anticipated that the ESOP will repay the loan through
periodic tax-deductible contributions from the Bank over a ten-year period.
The net proceeds received by First Security will become part of First
Security's general funds for use in its business and will be used to support the
Bank's existing operations, subject to applicable regulatory restrictions.
Immediately upon the completion of the Conversion, it is anticipated that the
Bank will invest such proceeds into short-term assets. Subsequently, the Bank
will redirect the net proceeds to the origination of loans, subject to market
conditions.
After the completion of the Conversion, the Holding Company will
redirect the net proceeds invested by it in short-term assets into a variety of
mortgage-backed securities and other securities similar to those already held by
the Bank. Also, the Holding Company may use a portion of the proceeds to fund
the RRP, subject to shareholder approval of such plan. Compensation expense
related to the RRP will be recognized as share awards vest. See "Pro Forma
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Data." Following stockholder ratification of the RRP, the RRP will be funded
either with shares purchased in the open market or with authorized but unissued
shares. Based upon the initial Purchase Price of $10.00 per share, the amount
required to fund the RRP through open-market purchases would range from
approximately $1.5 million (based upon the sale of shares at the minimum of the
Estimated Valuation Range) to approximately $2.0 million (based upon the sale of
shares at the maximum of the Estimated Valuation Range). In the event that the
per share price of the Common Stock increases above the $10.00 per share
Purchase Price following completion of the Offering, the amount necessary to
fund the RRP would also increase. The use of authorized but unissued shares to
fund the RRP could dilute the holdings of stockholders who purchase Common Stock
in the Conversion. See "Business Lending Activities" and " - Investment
Activities" and "Management - Benefit Plans - Employee Stock Ownership Plan" and
"- Recognition and Retention Plan."
The proceeds may also be utilized by the Holding Company to repurchase
(at prices which may be above or below the initial offering price) shares of the
Common Stock through an open market repurchase program subject to limitations
contained in OTS regulations, although the Holding Company currently has no
specific plan to repurchase any of its stock. In the future, the Board of
Directors of the Holding Company will make decisions on the repurchase of the
Common Stock based on its view of the appropriateness of the price of the Common
Stock as well as the Holding Company's and the Bank's investment opportunities
and capital needs. Under current OTS regulations, no repurchases may be made
within the first year following Conversion except with OTS approval under
"exceptional circumstances." During the second and third years following
Conversion, OTS regulations permit, subject to certain limitations, the
repurchase of up to five percent of the outstanding shares of stock during each
twelve-month period with a greater amount permitted with OTS approval. In
general, the OTS regulations do not restrict repurchases thereafter, other than
limits on the Bank's ability to pay dividends to the Holding Company to fund the
repurchase. For a description of the restrictions on the Bank's ability to
provide the Holding Company with funds through dividends or other distributions,
see "Dividends" and "The Conversion Restrictions on Repurchase of Stock."
The Bank may use a portion of the proceeds to fund the creation of one
or more new branch offices within the greater Chicago or Philadelphia areas,
although the Bank has no specific plans regarding any new branch offices at the
time. In addition, the Holding Company or First Security might consider
expansion through the acquisition of other financial services providers (or
branches, deposits or assets thereof), although there are no specific plans,
negotiations or written or oral agreements regarding any acquisitions at this
time.
DIVIDENDS
The Holding Company currently has no plans to pay dividends. However,
the Holding Company's Board of Directors may consider a policy of paying
dividends in the future. Dividends, when and if paid, will be subject to
determination and declaration by the Board of Directors at its discretion. They
will take into account the Holding Company's consolidated financial condition,
the Bank's regulatory capital requirements, including the fully phased-in
capital requirements, tax considerations, industry standards, economic
conditions, regulatory restrictions, general business practices and other
factors. The Holding Company may also consider making a one time only special
dividend or distribution (including a tax-free return of capital) provided that
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the Holding Company will take no steps toward making such a distribution for at
least one year following the completion of the Conversion.
It is not presently anticipated that the Holding Company will conduct
significant operations independent of those of First Security for some time
following the Conversion. As such, the Holding Company does not expect to have
any significant source of income other than earnings on the net proceeds from
the Conversion retained by the Holding Company (which proceeds are currently
estimated to range from $17.1 million to $23.2 million based on the minimum and
the maximum of the Estimated Valuation Range, respectively) and dividends from
First Security, if any. Consequently, the ability of the Holding Company to pay
cash dividends to its stockholders will be dependent upon such retained proceeds
and earnings thereon, and upon the ability of First Security to pay dividends to
the Holding Company. See "Description of Capital Stock - Holding Company Capital
Stock - Dividends." First Security, like all savings associations regulated by
the OTS, is subject to certain restrictions on the payment of dividends based on
its net income, its capital in excess of the regulatory capital requirements and
the amount of regulatory capital required for the liquidation account to be
established in connection with the Conversion. See "The Conversion - Effects of
Conversion to Stock Form on Depositors and Borrowers of the Bank - Liquidation
Rights in Proposed Converted Institution" and "Regulation - Regulatory Capital
Requirements" and "- Limitations on Dividends and Other Capital Distributions."
Earnings allocated to First Security's "excess" bad debt reserves and deducted
for federal income tax purposes cannot be used by First Security to pay cash
dividends to the Holding Company without adverse tax consequences. See
"Regulation - Federal and State Taxation."
MARKET FOR COMMON STOCK
First Security, as a mutual thrift institution, and the Holding
Company, as a newly organized company, have never issued capital stock.
Consequently, there is not at this time an existing market for the Common Stock.
The Holding Company has applied for listing of the Common Stock on the Nasdaq
Stock Market under the symbol "____" upon completion of the Conversion. In order
to be quoted on the Nasdaq Stock Market, among other criteria, there must be at
least two market makers for the Common Stock. FBR has agreed, subject to certain
conditions, to act as a market maker for the Holding Company's Common Stock
following the Conversion, and assist in securing a second market maker to do the
same. A public trading market having the desirable characteristics of depth,
liquidity and orderliness depends upon the presence in the marketplace of both
willing buyers and sellers of the Common Stock at any given time. Accordingly,
there can be no assurance that an active and liquid market for the Common Stock
will develop or be maintained or that resales of the Common Stock can be made at
or above the Purchase Price. See "The Conversion - Stock Pricing and Number of
Shares to be Issued."
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PRO FORMA DATA
The following table sets forth the historical net income, equity and
per share data of First Security at and for the four months ended April 30, 1997
and the fiscal year ended December 31, 1996, and after giving effect to the
Conversion, the pro forma net income, capital stock and stockholders' equity and
per share data of the Holding Company at and for the four months ended April 30,
1997 and the fiscal year ended December 31, 1996. The pro forma data has been
computed on the assumptions that (i) the specified number of shares of Common
Stock was sold at the beginning of the specified periods and yielded net
proceeds to the Holding Company as indicated, (ii) 250,000 shares were donated
to the Foundation upon the completion of the Conversion, (iii) 50% of such net
proceeds were retained by the Holding Company and the remainder were used to
purchase all of the stock of First Security, and (iv) such net proceeds, less
the amount of the ESOP and RRP funding, were invested by the Bank and Holding
Company at the beginning of the periods to yield a pre-tax return of 5.90% for
the four months ended April 30, 1997 and for the fiscal year ended December 31,
1996. The after-tax rate of return is 3.54% assuming a combined federal and
state income tax rate of 40%. The assumed return is based upon the market yield
rate of one-year U.S. Government Treasury Securities as of April 30, 1997. The
use of this current rate is viewed to be more relevant in the current interest
rate environment than the use of an arithmetic average of the weighted average
yield earned by the Bank on its interest-earning assets and the weighted average
rate paid on its deposits during such periods. In calculating the underwriting
fees to be paid as part of the Offering, the table assumes that (i) no
commission was paid on $2.1 million of shares sold to directors, officers and
employees, (ii) 8% of the total shares issued in the Conversion including the
Stock Contribution shares were sold to the ESOP at no commission, and (iii) the
remaining shares were sold at a 1.0% commission. (These assumptions represent
management's estimate as to the distribution of stock orders in the Conversion.
However, there can be no assurance that such estimate will be accurate and that
a greater proportion of shares will not be sold at a higher commission, thus
increasing offering expenses.) Fixed expenses are estimated to be $540,000.
Actual Conversion expenses may be more or less than those estimated because the
fees paid to FBR and other brokers will depend upon the categories of
purchasers, the Purchase Price and market conditions and other factors. The pro
forma net income amounts derived from the assumptions set forth herein should
not be considered indicative of the actual results of operations of the Holding
Company that would have been attained for any period if the Conversion had been
actually consummated at the beginning of such period, and the assumptions
regarding investment yields should not be considered indicative of the actual
yields expected to be achieved during any future period.
The total number of shares to be issued in the Conversion may be
increased or decreased significantly, or the price per share decreased, to
reflect changes in market and financial conditions prior to the close of the
Offering. However, if the aggregate Purchase Price of the Common Stock sold in
the Conversion is below $34,990,000 (the minimum of the Estimated Valuation
Range) or more than $54,450,000 (15% above the maximum of the Estimated
Valuation Range), subscribers will be offered the opportunity to modify or
cancel their subscriptions. See "The Conversion - Stock Pricing and Number of
Shares to be Issued."
39
<PAGE>
The following table assumes that the Stock Contribution is approved as
part of the Conversion and therefore gives effect to the issuance of authorized
but unissued shares of the Holding Company's Common Stock to the Foundation
concurrently with the completion of the Conversion.
<TABLE>
<CAPTION>
At or For the Four Months Ended April 30, 1997
---------------------------------------------------------
15% Above
Minimum Midpoint Maximum Maximum
3,499,000 4,117,000 4,735,000 5,445,000
Shares Sold at Shares Sold at Shares Sold at Shares Sold at
$10.00 per $10.00 per $10.00 per $10.00 per
Share Share Share Share
----- ----- ----- -----
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds ..................................................... $ 34,990 $ 41,170 $ 47,350 $ 54,450
Plus: Shares issued to Foundation(1) ............................... 2,500 2,500 2,500 2,500
----------- ----------- ----------- -----------
Pro forma market capitalization .................................... $ 37,490 $ 43,670 $ 49,850 $ 56,950
=========== =========== =========== ===========
Gross proceeds ..................................................... $ 34,990 $ 41,170 $ 47,350 $ 54,450
Less offering expenses and commissions ............................. 839 896 953 1,018
----------- ----------- ----------- -----------
Estimated net conversion proceeds ................................. 34,151 40,274 46,397 53,432
Less ESOP shares ................................................... (2,999) (3,494) (3,988) (4,556)
Less RRP shares .................................................... (1,500) (1,747) (1,994) (2,278)
----------- ----------- ----------- -----------
Estimated proceeds available for investment(2) .................... $ 29,652 $ 35,033 $ 40,415 $ 46,598
=========== =========== =========== ===========
Net Income:
Historical ....................................................... $ 761 $ 761 $ 761 $ 761
Pro Forma Adjustments:
Net earnings from proceeds(3) ................................... 350 413 477 550
ESOP(4) ......................................................... (60) (70) (80) (91)
RRP(5) .......................................................... (60) (70) (80) (91)
----------- ----------- ----------- -----------
Pro forma net income(6) ....................................... $ 991 $ 1,034 $ 1,078 $ 1,129
=========== =========== =========== ===========
Net Income Per Share:
Historical(7) .................................................. $ 0.22 $ 0.19 $ 0.17 $ 0.14
Pro forma Adjustments:
Net earnings from proceeds .................................... 0.10 0.10 0.10 0.10
ESOP(3) ....................................................... (0.02) (0.02) (0.02) (0.02)
RRP(5) ........................................................ (0.02) (0.02) (0.02) (0.02)
----------- ----------- ----------- -----------
Pro forma net income per share(5) ......................... $ 0.28 $ 0.25 $ 0.23 $ 0.20
=========== =========== =========== ===========
Ratio of offering price to pro forma net income per share
(annualized) ............................................... 11.90x 13.33x 14.49x 16.67x
Number of shares Used in calculating EPS(4).................... 3,459,077 4,029,285 4,599,493 5,254,587
Stockholders' Equity (Book Value)(8):
Historical ....................................................... $ 29,950 $ 29,950 $ 29,950 $ 29,950
Pro Forma Adjustments:
Estimated net Conversion proceeds ................................ 34,151 40,274 46,397 53,432
Plus: Tax benefit of Stock Contribution .......................... 1,000 1,000 1,000 1,000
Less: Common stock acquired by:
ESOP(4) ......................................................... (2,999) (3,494) (3,988) (4,556)
RRP(5) .......................................................... (1,500) (1,747) (1,994) (2,278)
----------- ----------- ----------- -----------
Pro forma stockholder's equity(5) ........................... $ 60,602 $ 65,983 $ 71,365 $ 77,548
=========== =========== =========== ===========
Stockholders' Equity (Book Value)(8):
Per Share(7):
Historical ....................................................... $ 7.99 $ 6.86 $ 6.01 $ 5.26
Pro Forma Adjustments:
Estimated net Conversion proceeds ................................ 9.11 9.22 9.31 9.38
Plus: Tax benefit of Stock Contribution .......................... 0.27 0.23 0.20 0.18
Less: Common stock acquired by:
ESOP(4) ......................................................... (0.80) (0.80) (0.80) (0.80)
RRP(5) .......................................................... (0.40) (0.40) (0.40) (0.40)
----------- ----------- ----------- -----------
Pro forma book value per share(6) ........................... $ 16.17 $ 15.11 $ 14.32 $ 13.62
=========== =========== =========== ===========
Pro forma price to book value ...................................... 61.84% 66.18% 69.83% 73.42%
Number of shares (including Foundation shares) ..................... 3,749,000 4,367,000 4,985,000 5,695,000
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
At or For the Year Ended December 31, 1996
---------------------------------------------------------------
15% Above
Minimum Midpoint Maximum Maximum
3,499,000 4,117,000 4,735,000 5,445,000
Shares Sold at Shares Sold at Shares Sold at Shares Sold at
$10.00 per $10.00 per $10.00 per $10.00 per
Share Share Share Share
----- ----- ----- -----
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds ..................................................... $ 34,990 $ 41,170 $ 47,350 $ 54,450
Plus: Shares issued to Foundation(1) ............................... 2,500 2,500 2,500 2,500
----------- ----------- ----------- -----------
Pro forma market capitalization .................................... $ 37,490 $ 43,670 $ 49,850 $ 56,950
=========== =========== =========== ===========
Gross proceeds ..................................................... $ 34,990 $ 41,170 $ 47,350 $ 54,450
Less offering expenses and commissions ............................. 839 896 953 1,018
----------- ----------- ----------- -----------
Estimated net conversion proceeds ................................. 34,151 40,274 46,397 53,432
Less ESOP shares ................................................... (2,999) (3,494) (3,988) (4,556)
Less RRP shares .................................................... (1,500) (1,747) (1,994) (2,278)
----------- ----------- ----------- -----------
Estimated proceeds available for investment(2) .................... $ 29,652 $ 35,033 $ 40,415 $ 46,598
=========== =========== =========== ===========
Net Income(9):
Historical ....................................................... $ 452 $ 452 $ 452 $ 452
Pro Forma Adjustments:
Net earnings from proceeds(3) ................................... 1,050 1,240 1,431 1,650
ESOP(4) ......................................................... (180) (210) (239) (273)
RRP(4) .......................................................... (180) (210) (239) (273)
----------- ----------- ----------- -----------
Pro forma net income(6) ....................................... $ 1,142 $ 1,272 $ 1,405 $ 1,556
=========== =========== =========== ===========
Net Income Per Share(9):
Historical(7) .................................................. $ 0.13 $ 0.11 $ 0.10 $ 0.09
Pro forma Adjustments:
Net earnings from proceeds .................................... 0.30 0.31 0.31 0.31
ESOP(3) ....................................................... (0.05) (0.05) (0.05) (0.05)
RRP(5) ........................................................ (0.05) (0.05) (0.05) (0.05)
----------- ----------- ----------- -----------
Pro forma net income per share(5) ......................... $ 0.33 $ 0.32 $ 0.31 $ 0.30
=========== =========== =========== ===========
Ratio of offering price to pro forma net income per share ..... 30.30x 31.25x 32.26x 33.33x
Number of shares used in calculating EPS(4) ............... 3,479,072 4,052,576 4,626,080 5,284,960
Stockholders' Equity (Book Value)(8):
Historical
Pro Forma Adjustments: ............................................. $ 29,261 $ 29,261 $ 29,261 $ 29,261
Estimated net Conversion proceeds ................................ 34,151 40,274 46,397 53,432
Plus: Tax benefit of Stock Contribution .......................... 1,000 1,000 1,000 1,000
Less: Common stock acquired by:
ESOP(4) ......................................................... (2,999) (3,494) (3,988) (4,556)
RRP(5) .......................................................... (1,500) (1,747) (1,994) (2,278)
----------- ----------- ----------- -----------
Pro forma stockholders' equity(5) ........................... $ 59,913 $ 65,294 $ 70,676 $ 76,859
=========== =========== =========== ===========
Stockholders' Equity (Book Value)(8):
Per Share(7):
Historical ....................................................... $ 7.81 $ 6.70 $ 5.87 $ 5.14
Pro Forma Adjustments:
Estimated net Conversion proceeds ................................ 9.11 9.22 9.31 9.38
Plus: Tax benefit of Stock Contribution .......................... 0.27 0.23 0.20 0.18
Less: Common stock acquired by:
ESOP(4) ......................................................... (0.80) (0.80) (0.80) (0.80)
RRP(5) .......................................................... (0.40) (0.40) (0.40) (0.40)
----------- ----------- ----------- -----------
Pro forma book value per share(6) ........................... $ 15.99 $ 14.95 $ 14.18 $ 13.50
=========== =========== =========== ===========
Offering Price Per Share as a Percentage of Pro Forma
Stockholders' Equity Per Share .................................. 62.54% 66.89% 70.52% 74.07%
Number of shares (including Foundation shares) ..................... 3,749,000 4,367,000 4,985,000 5,695,000
- ----------
(1) Subject to member approval, the Holding Company intends to contribute
250,000 shares to the Foundation within 12 months following the completion
of the Conversion. See "The Conversion--Stock Contribution to the
Charitable Foundation." Since the contributed shares will be donated or
sold for nominal consideration, they will not add to gross proceeds.
</TABLE>
41
<PAGE>
However, since such shares are issued and outstanding, they add to the
Holding Company's market capitalization.
The amount of the Stock Contribution will be accrued as an expense in the
fiscal quarter in which the Conversion is completed. The pro forma earnings
data does not reflect such non-recurring accrual.
Both the historical and pro forma per share data assume that the Stock
Contribution is made.
(2) Reflects a reduction to net proceeds for the cost of the ESOP and the RRP
(assuming stockholder ratification is received) which it is assumed will be
funded from the net proceeds retained by the Holding Company.
(3) No effect has been given to withdrawals from savings accounts for the
purpose of purchasing Common Stock in the Conversion. For purposes of
calculating pro forma net income, proceeds attributable to purchases by the
ESOP and RRP, which purchases are to be funded by the Holding Company and
the Bank, have been deducted from net proceeds.
(4) It is assumed that 8% of the shares of Common Stock offered in the
Conversion including the shares issued to the Foundation will be purchased
by the ESOP. The funds used to acquire such shares will be borrowed by the
ESOP from the net proceeds from the Conversion retained by the Holding
Company. The Bank intends to make contributions to the ESOP in amounts at
least equal to the principal and interest requirement of the debt. The
Bank's payment of the ESOP debt is based upon equal installments of
principal and interest over a 10-year period. However, assuming the Holding
Company makes the ESOP loan, interest income earned by the Holding Company
on the ESOP debt will offset the interest paid by the Bank. Accordingly,
the only expense to the Holding Company on a consolidated basis will be
related to the allocation of earned ESOP shares which will be based on the
number of shares committed to be released to participants for the year at
the average market value of the shares during the year tax-effected at 40%.
The amount of ESOP debt is reflected as a reduction of stockholders'
equity. In the event that the ESOP were to receive a loan from an
independent third party, both ESOP expense and earnings on the proceeds
retained by the Holding Company would be expected to increase. For purposes
of calculating earnings per share, unallocated ESOP shares are not
considered to be outstanding. In addition, the ESOP shares committed to be
released at the end of the year are assumed to be outstanding at the
beginning of the year. For the interim period, shares committed to be
released for the year have been allocated on a pro rata basis.
(5) Adjustments to both book value and net earnings have been made to give
effect to the proposed open market purchase (based upon an assumed purchase
price of $10.00 per share) following Conversion by the RRP (assuming
stockholder ratification of such plan is received) of an amount of shares
equal to 4% of the shares of Common Stock sold in the Conversion for the
benefit of certain directors, officers and employees. It is assumed that
the sale of the shares to the RRP occurred at the beginning of the period.
Funds used by the RRP to purchase the shares will be contributed to the RRP
by the Holding Company if the RRP is ratified by stockholders following the
Conversion. Therefore, this funding is assumed to reduce the proceeds
available for reinvestment. For financial accounting purposes, the amount
of the contribution will be recorded as a compensation expense (although
not an actual expenditure of funds) over the period of vesting. These
grants are scheduled to vest in equal annual installments over the five
years following stockholder ratification of the RRP. However, all unvested
grants will be forfeited in the case of recipients who fail to maintain
continuous service with the Holding Company or its subsidiaries. In the
event the RRP is unable to purchase a sufficient number of shares of Common
Stock to fund the RRP, the RRP may issue authorized but unissued shares of
Common Stock from the Holding Company to fund the remaining balance. In the
event the RRP is funded by the issuance of authorized but unissued shares
in an amount equal to 4% of the shares sold in the Conversion, the
interests of existing stockholders would be diluted by approximately 3.8%.
In the event that the RRP is funded through authorized but unissued shares,
for the four months ended April 30, 1997 and year ended December 31, 1996,
pro forma net income per share would be $0.28, $0.25, $0.23 and $0.21 and
$0.33, $0.32, $0.31 and $0.30, respectively, and pro forma stockholders'
equity per share would be $15.93, $14.91, $14.15 and $13.48 and $15.75,
$14.76, $14.02 and $13.36, respectively, in each case at the minimum,
midpoint, maximum and 15% above the maximum of the Estimated Valuation
Range.
(6) No effect has been given to the shares to be reserved for issuance under
the proposed Stock Option Plan which is expected to be adopted by the
Holding Company following the Conversion, subject to stockholder approval.
In the event the Stock Option Plan is funded by the issuance of authorized
but unissued shares in an amount equal to 10% of the shares sold in the
Conversion, at $10.00 per share, the interests of existing stockholders
would be diluted as follows: pro forma net income per share for the four
months ended April 30, 1997 and the year ended December 31, 1996 would be
$0.27, $0.24, $0.22 and $0.21 and $0.33, $0.32, $0.31 and $0.30,
respectively, and pro forma stockholders' equity per share would be $15.60,
$14.64, $13.92 and $13.29 and $15.44, $14.50, $13.80 and $13.18,
respectively, in each case at the minimum, midpoint, maximum and 15% above
the maximum of the Estimated Valuation Range. In the alternative, the
Holding Company may purchase shares in the open market to fund the Stock
Option Plan following stockholder approval of such plan. To the extent, the
entire 10% of the shares to be reserved for issuance under the Stock Option
Plan were funded through open market purchases at the Purchase Price of
$10.00 per share, proceeds available for reinvestment would be reduced by
$3,749,000, $4,367,000, $4,985,000 and $5,695,000 at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range. See
"Management Benefit Plans - Stock Option and Incentive Plan."
42
<PAGE>
(7) Historical per share amounts have been computed as if the shares of Common
Stock indicated had been outstanding at the beginning of the periods or on
the dates shown, but without any adjustment of historical net income or
historical equity to reflect the investment of the estimated net proceeds
of the sale of shares in the Conversion as described above. All ESOP shares
have been considered outstanding for purposes of computing book value per
share. Pro forma share amounts have been computed by dividing the pro forma
net income or stockholders' equity (book value) by the number of shares
indicated as outstanding under SOP 93-6.
(8) "Book value" represents the difference between the stated amounts of the
Bank's assets (based on historical cost) and liabilities computed in
accordance with generally accepted accounting principles. The amounts shown
do not reflect the effect of the Liquidation Account which will be
established for the benefit of Eligible and Supplemental Eligible Account
Holders in the Conversion, or the federal income tax consequences of the
restoration to income of the Bank's special bad debt reserves for income
tax purposes which would be required in the unlikely event of liquidation.
See "The Conversion - Effects of Conversion to Stock Form on Depositors and
Borrowers of the Bank" and "Regulation - Federal and State Taxation." The
amounts shown for book value do not represent fair market values or
amounts, if any, distributable to stockholders in the unlikely event of
liquidation.
(9) In the event that 1996 net income were calculated without giving effect to
the non-recurring $1.3 million special deposit insurance assessment and the
$2.5 million cash contribution to the Foundation, 1996 pro forma net income
and net income per share would have been as follows assuming an income tax
rate of 40%:
15% Above
Minimum Midpoint Maximum Maximum
------- -------- ------- -------
Net Income:
Historical ............... $ 452 $ 452 $ 452 $ 452
Nonrecurring expenses .... 2,276 2,276 2,276 2,276
------- ------- ------- ----
Adjusted historical .... 2,728 2,728 2,728 2,728
Pro Forma Adjustments:
Net earnings from proceeds 1,050 1,240 1,431 1,650
ESOP ..................... (180) (210) (239) (273)
RRP ...................... (180) (210) (239) (273)
------- ------- ------- ----
Pro form net income .. $ 3,418 $ 3,548 $ 3,681 $ 3,832
======= ======= ======= ====
Net Income Per Share:
Historical ............... $ 0.13 $ 0.11 $ 0.10 $ 0.09
Nonrecurring expenses .... 0.65 0.56 0.49 0.43
------- ------- ------- ----
Adjusted historical .... 0.78 0.67 0.59 0.52
Pro Forma Adjustments:
Net earnings from
proceeds ............... 0.30 0.31 0.31 0.31
ESOP ..................... (0.05) (0.05) (0.05) (0.05)
RRP ...................... (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ----
Pro form net income
per share .......... $ 0.98 $ 0.88 $ 0.80 $ 0.73
======= ======= ======= ====
Ratio of offering price to
pro forma net income
per share ................ 10.20x 11.36x 12.50x 13.70x
43
<PAGE>
COMPARISON OF VALUATION AND PRO FORMA INFORMATION WITH NO
STOCK CONTRIBUTION
In the event that the Stock Contribution to the Foundation is not made,
FinPro has estimated that the amount of Common Stock offered for sale in the
Conversion would increase by approximately $4.8 million and that the overall
market capitalization would increase by $2.3 million, all at the midpoint of the
Estimated Valuation Range as of April 30, 1997. Under such circumstances, pro
forma shareholder equity of the Holding Company would be approximately $69.4
million, at the midpoint, which is approximately $3.4 million greater than the
pro forma shareholder equity of the Holding Company would be if the Stock
Contribution is made. The pro forma price to book ratio and pro forma price to
earnings ratio would be approximately the same under both the current appraisal
and the estimate of the value of the Holding Company without the Stock
Contribution. Further, assuming the midpoint of the Estimated Valuation Range,
pro forma stockholders' equity per share and pro forma earnings per share would
be substantially the same with the Stock Contribution as without the Stock
Contribution. In this regard, pro forma stockholders' equity and pro forma net
income per share at and for the period ended April 30, 1997 would be $15.11 and
$0.25, respectively, at the midpoint of the estimate, assuming no Stock
Contribution, and $15.11 and $0.25, respectively, with the Stock Contribution.
The pro forma price to book value ratio and the pro forma price to earnings
ratio at and for the period ended April 30, 1997 are 66.18% and 13.33x,
respectively, at the midpoint of the estimate, assuming no Stock Contribution
and are 66.18% and 13.33x, respectively, with the Stock Contribution. This
estimate by FinPro was prepared at the request of the OTS and is solely for
purposes of providing members with sufficient information with which to make an
informed decision on the Stock Contribution. There is no assurance that in the
event the Stock Contribution is not approved at the Special Meeting of members
that the appraisal prepared at that time would conclude that the pro forma
market value of the Holding Company would be the same as that estimated herein.
If the Stock Contribution is not made, FinPro has estimated that the
maximum, as adjusted, of the Estimated Valuation Range would be $60.8 million.
Nevertheless, if the pro forma market value of the common stock to be sold by
the Holding Company without the Stock Contribution is either greater than $54.5
million or less than $35.0 million or if the OTS otherwise requires a
resolicitation of subscribers, the Bank will establish a new Estimated Valuation
Range and commence a resolicitation of subscribers (i.e., subscribers will be
permitted to continue their orders, in which case they will need to
affirmatively reconfirm their subscriptions prior to the expiration of the
resolicitation offering or their subscription funds will be promptly refunded
witinterest.) Any change in the Estimated Valuation Range must be approved by
the OTS. "See the Conversion--Stock Pricing."
For comparative purposes only, set forth below are certain pricing
ratios and financial data and ratios, at the minimum, midpoint, maximum and
maximum, as adjusted, of the Estimated Valuation Range, assuming the Conversion
was completed at April 30, 1997.
44
<PAGE>
<TABLE>
<CAPTION>
At the Minimum At the Midpoint At the Maximum
------------------------- -------------------------- --------------------------
With No With No With No
Stock Stock Stock Stock Stock Stock
Contribution Contribution Contribution Contribution Contribution Contribution
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Estimated offering amount .................... $ 34,990 $ 39,100 $ 41,170 $ 46,000 $ 47,350 $ 52,900
Pro forma market capitalization .............. 37,490 39,100 43,670 46,000 49,850 52,900
Total assets ................................. 290,654 293,531 296,035 299,540 301,417 305,548
Total liabilities ............................ 230,052 230,052 230,052 230,052 230,052 230,052
Pro forma stockholders' equity ............... 60,602 63,479 65,983 69,488 71,365 75,496
Pro forma consolidated net earnings(1) ....... 991 1,031 1,034 1,080 1,078 1,128
Pro forma stockholders' equity per share ..... 16.17 16.24 15.11 15.11 14.32 14.27
Pro forma consolidated net earnings
per share(1) ............................... 0.28 0.28 0.25 0.25 0.23 0.23
Pro Forma Pricing Ratios:
Offering price as a percentage of pro
forma stockholders' equity per share ..... 61.84 61.58 66.18 66.18 69.83 70.08
Offering price to pro forma net
earnings per share(1) .................... 11.90 11.90 13.33 13.33 14.49 14.49
Offering price to assets ................... 12.89 13.32 14.75 15.36 16.53 17.31
Pro Forma Financial Ratios:
Return on assets(2) ....................... 1.02 1.05 1.05 1.08 1.07 1.11
Return on stockholders' equity(2) ......... 4.91 4.87 4.70 4.66 4.53 4.48
Stockholders' equity to assets ............ 20.85 21.63 22.29 23.20 23.68 24.71
</TABLE>
At the Maximum
as adjusted
-----------------------------
With No
Stock Stock
Contribution Contribution
------------ ------------
Estimated offering amount .................. $ 54,450 $ 60,840
Pro forma market capitalization ............. 56,950 60,840
Total assets ................................ 307,600 312,462
Total liabilities ........................... 230,052 230,052
Pro forma stockholders'equity ............... 77,548 82,078
Pro forma consolidated net earnings(1) ...... 1,129 1,186
Pro forma stockholders' equity per share ..... 13.62 13.54
Pro forma consolidated net earnings
per share(1) ............................... 0.21 0.21
Pro Forma Pricing Ratios:
Offering price as a percentage of pro
forma stockholders'equity per share ........ 73.42 73.86
Offering price to pro forma net earnings
per share(1) ............................... 15.87 15.87
Offering price to assets .................... 18.51 19.47
Pro Forma Financial Ratios:
Return on assets(2) ......................... 1.10 1.14
Return on stockholders' equity(2) ........... 4.37 4.33
Stockholders' equity to assets .............. 25.21 26.27
------------
(1) For the four month period ended April 30, 1997.
(2) Ratios for the four month periods have been annualized.
45
<PAGE>
PRO FORMA REGULATORY CAPITAL ANALYSIS
At April 30, 1997, the Bank would have exceeded each of the OTS capital
requirements. Set forth below is a summary of the Bank's compliance with the OTS
capital standards as of April 30, 1997 based on historical capital and also
assuming that the indicated number of shares were sold as of such date using the
assumptions contained under the caption "Pro Forma Data."
<TABLE>
<CAPTION>
Pro Forma at April 30, 1997
---------------------------------------------------
3,499,000 Shares Sold 4,117,000 Shares Sold
Historical at Minimum at Midpoint
---------------------- ------------------------ ---------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
GAAP Capital(1) .......................... $29,950 11.5% $44,026 16.1% $46,593 16.8%
======= ==== ======= ==== ======= ====
Tangible Capital(2):
Capital level(3) ........................ $29,468 11.4% $43,544 15.9% $46,111 16.7%
Requirement ............................. 3,892 1.5 4,104 1.5 4,142 1.5
----- --- ----- --- ----- ---
Excess .................................. $25,576 9.9% $39,440 14.4% $41,969 15.2%
======= === ======= ==== ======= ====
Core Capital(2):
Capital level(3) ........................ $29,468 11.4% $43,544 15.9% $46,111 16.7%
Requirement(4) .......................... 7,784 3.0 8,208 3.0 8,284 3.0
----- --- ----- --- ----- ---
Excess .................................. $21,684 8.4% $35,336 12.9% $37,827 13.7%
------- --- ------- ---- ------- ----
Risk-Based Capital(2):
Capital level(5) ........................ $31,060 24.4% $45,161 34.7% $47,733 36.5%
Requirement(6) .......................... 10,186 8.0 10,412 8.0 10,453 8.0
------ --- ------ --- ------ ---
Excess .................................. $20,874 16.4% $34,749 26.7% $37,280 28.5%
======= ==== ======= ==== ======= ====
</TABLE>
Pro Forma at April 30, 1997
------------------------------------
5,445,000 Shares
4,735,000 Shares Sold Sold at 15% above
at Maximum Maximum
--------------------- -----------------
Amount Percent Amount Percent
------ ------- ------ -------
(Dollars in Thousands)
GAAP Capital(1) .......................... $49,161 17.6% $52,110 18.5%
======= ==== ======= ====
Tangible Capital(2):
Capital level(3) ....................... $48,679 17.5% $51,628 18.3%
Requirement ............................ 4,181 1.5 4,225 1.5
------- ---- ------- ----
Excess ................................. $44,498 16.0% $47,403 16.8%
======= ==== ======= ====
Core Capital(2):
Capital level(3) ....................... $48,679 17.5% $51,628 18.3%
Requirement(4) ......................... 8,362 3.0 8,450 3.0
------- ---- ------- ----
Excess ................................. $40,317 14.5% $43,178 15.3%
======= ==== ======= ====
Risk-Based Capital(2):
Capital level(5) ....................... $50,306 38.4% $53,261 40.4%
Requirement(6) ......................... 10,494 8.0 10,541 8.0
------- ---- ------- ----
Excess ................................. $39,812 30.4% $42,720 32.4%
======= ==== ======= ====
- ----------
(1) Total equity as calculated under generally accepted accounting principles
("GAAP"). Assumes that the Bank receives 50% of the net proceeds, offset in
part, by the aggregate Purchase Price of Common Stock acquired at a price
of $10.00 per share by the ESOP in the Conversion.
<PAGE>
(2) Tangible and core capital figures are determined as a percentage of
adjusted total assets; risk-based capital figures are determined as a
percentage of risk-weighted assets. Unrealized gains and losses on debt
securities available for sale are excluded from tangible, core and
risk-based capital. Goodwill and intangibles totaling $400,000 is excluded
from tangible and core capital. Adjusted assets assumed for tangible and
core capital are $259.5 million, $273.6 million, $276.2 million, $278.7
million and $281.7 million at historical, minimum, midpoint, maximum and
15% above maximum. Risk-weighted assets are assumed to be $127.3 million,
$130.1 million, $130.7 million $131.2 million and $131.8 million at
historical, minimum, midpoint, maximum and 15% above the maximum,
respectively.
(3) In April 1991, the OTS proposed a core capital requirement for savings
associations comparable to the requirement for national banks that became
effective on November 30, 1990. This proposed core capital ratio is 3% of
total adjusted assets for thrifts that receive the highest supervisory
rating for safety and soundness ("CAMEL" rating), with a 4% to 5% core
capital requirement for all other thrifts. See "Regulation - Regulatory
Capital Requirements."
(4) Includes $1.7 million of general valuation allowances, of which $1.6
million qualifies as supplementary capital. See "Regulation - Regulatory
Capital Requirements."
(5) Pro forma amounts and percentages assume net proceeds are invested in
assets that carry a 20% risk-weight, such as short-term interest-bearing
deposits.
46
<PAGE>
CAPITALIZATION
Set forth below is the capitalization, including deposits, of First
Security as of April 30, 1997, and the pro forma capitalization of the Holding
Company at the minimum, the midpoint, the maximum and 15% above the maximum of
the Estimated Valuation Range, after giving effect to the Conversion and based
on other assumptions set forth in the table and under the caption "Pro Forma
Data."
<TABLE>
<CAPTION>
Holding Company - Pro Forma Based
Upon Sale at $10.00 per share
----------------------------------------------------
15% Above
Minimum Midpoint Maximum Maximum
Existing 3,499,000 4,117,000 4,735,000 5,445,000
Capitalization Shares Shares Shares Shares
-------------- ------ ------ ------ ------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Deposits(1) ............................................. $ 218,987 $ 218,987 $ 218,987 $ 218,987 $ 218,987
========= ========= ========= ========= =========
Stockholders' Equity:
Serial Preferred Stock ($0.01 par value)
authorized - 500,000 shares; none to be
outstanding ........................................... $ -- $ -- $ -- $ -- $ --
Common Stock ($0.01 par value authorized
- 8,000,000 shares; to be outstanding (as
shown)(2) ............................................. -- 35 41 47 54
Additional paid-in capital ............................ -- 34,116 40,233 46,350 53,378
Shares issued to the Foundation ....................... -- 2,500 2,500 2,500 2,500
Retained earnings, substantially
restricted(3) ......................................... 30,226 30,226 30,226 30,226 30,226
Net unrealized loss on securities available for
sale ................................................... (276) (276) (276) (276) (276)
Stock Contribution expense net of tax
benefit ................................................ -- (1,500) (1,500) (1,500) (1,500)
Less:
Common Stock acquired by ESOP(4) ...................... -- (2,999) (3,494) (3,988) (4,556)
Common Stock acquired by RRP(4) ....................... -- (1,500) (1,747) (1,994) (2,278)
--------- --------- --------- --------- ---------
Total Stockholders' Equity(5) ........................... $ 29,950 $ 60,602 $ 65,983 $ 71,365 $ 77,548
========= ========= ========= ========= =========
- ----------
<FN>
(1) No effect has been given to withdrawals from deposit accounts for the
purpose of purchasing Common Stock in the Conversion. Any such withdrawals
will reduce pro forma deposits by the amount of such withdrawals.
(2) Does not reflect the shares of Common Stock that may be reserved for
issuance pursuant to the Stock Option Plan.
(3) See "Dividends" and "Regulation - Limitations on Dividends and Other
Capital Distributions" regarding restrictions on future dividend payments
and "The Conversion - Effects of Conversion to Stock Form on Depositors and
Borrowers of the Bank" regarding the liquidation account to be established
upon Conversion.
(4) Assumes that 8% of the shares sold in the Conversion will be purchased by
the ESOP. The funds used to acquire the ESOP shares will be borrowed from
the Holding Company. The Bank intends to make contributions to the ESOP
sufficient to service and ultimately retire the ESOP's debt over a ten-year
period. Also assumes that an amount of shares equal to 4% of the amount of
shares sold in the Conversion will be acquired by the RRP, following
shareholder ratification of such plan after completion of the Conversion.
In the event that the RRP is funded by the issuance of authorized but
unissued shares in an amount equal to 4% of the shares sold in the
Conversion, the interest of existing stockholders would be diluted by
approximately 3.8%. The amount to be borrowed by the ESOP and the Common
Stock acquired by the RRP is reflected as a reduction of stockholders'
equity. See "Management - Benefit Plans - Employee Stock Ownership Plan"
and "- Recognition and Retention Plan."
(5) If the Stock Contribution is approved by the Bank's members, the amount of
initial contribution will be accrued as an expense in the fiscal quarter in
which the conversion is completed. See "The Conversion--Stock Contribution
to the Charitable Foundation.
</FN>
</TABLE>
47
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Bank is a financial intermediary engaged primarily in attracting
deposits from the general public and using such deposits to originate one- to
four-family residential mortgage and, to a lesser extent, multi-family and
commercial real estate, consumer and other loans primarily in its market areas,
and to acquire mortgage-backed and other securities. The Bank's revenues are
derived principally from interest earned on loans and mortgage-backed and other
securities. The operations of the Bank are influenced significantly by general
economic conditions and by policies of financial institution regulatory
agencies, including the OTS and FDIC. The Bank's cost of funds is influenced by
interest rates on competing investments and general market interest rates.
Lending activities are affected by the demand for financing of real estate and
other types of loans, which in turn is affected by the interest rates at which
such financings may be offered.
The Bank's net interest income is dependent primarily upon the
difference or spread between the average yield earned on loans receivable and
securities and the average rate paid on deposits, as well as the relative
amounts of such assets and liabilities. The Bank, like other thrift
institutions, is subject to interest rate risk to the degree that its
interest-bearing liabilities mature or reprice at different times, or on a
different basis, than its interest-earning assets.
Business Strategy
The Bank seeks to obtain a competitive advantage in its deposit
gathering and lending operations by maintaining a high level of community
involvement and by offering a high level of personal service.
In its deposit gathering operations, the Bank uses community outreach
and customer service in an attempt to build and maintain a large volume of
passbook and other non-certificate accounts. These accounts generally carry
lower costs than certificate accounts and are believed to represent primarily
"core" deposits that are less vulnerable to interest rate changes (and
competition from other financial products) than certificate accounts.
In its lending operations, the Bank seeks to obtain high quality
residential and, to a lesser extent, other loans by maintaining a high level of
local visibility, offering a high level of customer service and limiting its
secondary market activities. The Bank's one- to four-family residential loan
balances have increased significantly in recent years as a result of these
efforts. At the same time, asset quality has remained high.
Primarily as a result of its cost of funds and its loan yields, the
Bank has been profitable since 1964. The Board has sought to enhance the Bank's
profitability by controlling expenses and maintaining a relatively steady level
of loan and deposit growth.
48
<PAGE>
The Board believes that the Bank's future success is directly tied to
its ability to maintain and build a loyal customer base through its community
and other activities.
Comparison of Financial Condition at April 30, 1997 and December 31, 1996
Total assets at April 30, 1997 were $260.0 million compared to $258.1
million at December 31, 1996, an increase of $1.9 million, or 0.7%. The increase
in total assets was due primarily to increases in loans receivable, funded by an
increase in Federal Home Loan Bank ("FHLB") advances.
Total liabilities at April 30, 1997 were $230.1 million compared to
$228.9 million at December 31, 1996, an increase of $1.2 million, or 0.5%. The
increase is primarily due to an increase in FHLB advances of $3.5 million,
partially offset by a decrease in advance payments by borrowers for taxes and
insurance of $532,000 as a result of the payment of the first installment of
taxes in 1997.
Total equity at April 30, 1997 was $30.0 million compared to $29.3
million at December 31, 1996. This increase of $700,000, or 2.4%, was a result
of $761,000 in net income for the period, partially offset by a $72,000 increase
in unrealized losses on securities available-for-sale from December 31, 1996 to
April 30, 1997.
Comparison of Financial Condition at December 31, 1996 and December 31, 1995
Total assets at December 31, 1996 were $258.1 million compared to
$251.9 million at December 31, 1995, an increase of $6.2 million, or 2.5%. The
increase in total assets was primarily a result of an increase in net loans
receivable of $18.8 million (most of which was in one- to four-family
residential real estate loans), partially offset by a decrease in cash and cash
equivalents of $11.9 million. In December 1995, management transferred $20.2
million of securities from the held-to-maturity portfolio to the
available-for-sale portfolio in accordance with Statement of Financial
Accounting Standards No. 115 "Accounting for Certain Investments in Debt and
Equity Securities."
Total liabilities at December 31, 1996 were $228.9 million compared to
$222.9 million at December 31, 1995, an increase of $6.0 million, or 2.7%. The
increase was primarily a result of an increase in deposits of $10.1 million.
This increase was partially offset by a decrease in FHLB advances of $6.0
million.
Total equity at December 31, 1996 was $29.3 million compared to $29.0
million at December 31, 1995, an increase of $300,000, or 1.0% as a result of
$452,000 of net income for the period offset by a change in the unrealized gain
(loss) on securities available-for-sale from $25,000 in 1995 to ($204,000) in
1996.
49
<PAGE>
Results of Operations
The Bank's results of operations depend primarily upon the level of net
interest income, which is the difference between the interest income earned on
its interest-earning assets such as loans and securities, and the costs of the
Bank's interest-bearing liabilities, primarily deposits and borrowings. Results
of operations are also dependent upon the level of the Bank's noninterest
income, including fee income and service charges, and affected by the level of
its noninterest expenses, including its general and administrative expenses. Net
interest income depends upon the volume of interest-earnings assets and
interest-bearing liabilities and the interest rate earned or paid on them,
respectively.
Comparison of Operating Results for the Four Months Ended April 30, 1997 and
April 30, 1996
General. Net income for the four months ended April 30, 1997 was
$761,000, a decrease of $229,000, from net income of $990,000 for the four
months ended April 30, 1996. The decrease was primarily due to an increase of
$532,000 in the provision for loan losses, partially offset by an increase in
net interest income of $314,000.
Interest Income. Interest income for the four months ended April 30,
1997 was $6.5 million compared to $6.1 million for the four months ended April
30, 1996, an increase of $371,000, or 6.1%. The increase resulted primarily from
an increase in the average balance of interest-earning assets of $14.9 million,
partially offset by a two basis point decrease in the average yield on
interest-earning assets. The average balance of loans receivable increased from
$145.5 million for the four months ended April 30,1996 to $164.1 million for the
four months ended April 30,1997. The increase in the average balance of loans
receivable was a result of increased demand as well as increased marketing
efforts. The decrease in the average yield on interest-earning assets was
primarily reflective of the decrease in the average yield on loans from 8.65%
for the four months ended April 30, 1996 to 8.51% for the four months ended
April 30, 1997. This decrease was a result of maturities of older, higher rate
loans.
Interest Expense. Interest expense was $3.2 million for the four months
ended April 30, 1997 and 1996. The average balance of interest-bearing
liabilities increased by $9.0 million. This was offset, however, by a decrease
in the average cost of funds from 4.50% for the four months ended April 30, 1996
to 4.40% for the four months ended April 30, 1997. The decrease in the average
cost of funds was a result of the maturity of higher rate certificates of
deposit and the replacement with lower rate certificates as a result of a
decreasing rate environment. The average balance of interest-bearing liabilities
increased largely in the area of certificates of deposit as a result of
increased market demand. In addition, FHLB advances increased to support the
continued loan growth.
Net Interest Income. Net interest income was $3.3 million for the four
months ended April 30, 1997, an increase of $314,000, or 10.6% from net interest
income of $3.0 million for the four months ended April 30, 1996. The increase
was primarily a result of an increase in the ratio of interest-earning assets to
interest-bearing liabilities from 110.69% for the four months ended April 30,
1996 to 112.96% for the four months ended April 30, 1997.
50
<PAGE>
Provision for Loan Losses. The Bank recorded a $574,000 provision for
loan losses for the four months ended April 30, 1997 compared to a $42,000
provision for the four months ended April 30, 1996. The increase in the
provision for loan losses was primarily related to various loans to The Bennett
Funding Group, Inc. ("Bennett Funding") which were secured by equipment leases.
Bennett Funding filed bankruptcy during 1996. As of April 30, 1996, management
had not determined whether the leases securing the loans on their books were
legally secured, or whether they were fraudulent. No additional provision was
made at that time as management continued its investigation and awaited rulings
from the bankruptcy court. The Bank received a settlement offer in February
1997. As a result of the proposed settlement, the Bank charged off $432,000 of
the Bennett Funding loans, leaving $839,000 of loans on its books. As part of
the settlement, the Bank was to receive a cash payment of $529,000. The
remaining $310,000 was to be collected through future payments from the lessees.
Subsequent to April 30, 1997, the Bank received $713,481 from the trustee as
part of the settlement. However, at this time management is unsure as to the
full collectibility of the remaining payment stream. In addition, management was
considering foreclosure proceedings on several other loans for which they were
uncertain they would recover the outstanding balance and related expenses. These
loans also contributed to the increase in the provision for the four months
ended April 30, 1997. The Bank also had a significant increase in the overall
size of the loan portfolio, which contributed to the increase in the allowance
for loan losses. Management increases the allowance for loan losses for loan
growth based on a statistical percentage developed considering past loss
experience and other factors described below. At April 30, 1997, the Bank's
allowance for loan losses totaled $1.7 million, or .98% of total loans and 73.8%
of total non-performing loans. Net charge-offs as a percent of average loans,
exclusive of the Bennett Funding charge-off, has ranged from recoveries of .03%
to charge-offs of .05%. Management does not anticipate a significant change in
this trend and management believes the allowance for loan losses is adequate at
April 30, 1997 given the current information available.
The amount of the provision and allowance for estimated losses on loans
is influenced by current economic conditions, actual loss experience, industry
trends and other factors, including real estate values, in the Bank's market
area. In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for estimated
losses on loans. Such agencies may require the Bank to provide additions to the
allowance based upon judgments which differ from those of management. Although
management uses the best information available and maintains the Bank's
allowance for losses at a level it belives adequate to provide for losses,
future adjustments to the allowance may be necessary due to economic, operating,
regulatory and other conditions that may be beyond the Bank's control.
Non-interest Income. Non-interest income for the four months ended
April 30, 1997 was $197,000 compared to $194,000 for the four months ended April
30, 1996, an increase of $3,000, or 1.5%. The increase was primarily a result of
a $1,000 gain on the sale of real estate owned during the 1997 period compared
to $10,000 in losses on the sale of real estate owned during the 1996 period.
This was partially offset by a decrease in deposit service charges of $5,000.
Non-interest Expense. Non-interest expense was $1.7 million for the
four months ended April 30, 1997 compared to $1.5 million for the four months
ended April 30, 1996, an increase of $137,000, or 9.0%. The increase was
primarily a result of an increase in compensation and benefits of $125,000
primarily due to an employer profit sharing contribution made in April 1997 of
$105,000. The corresponding contribution in 1996 was made subsequent to April
30. Other operating expenses increased $106,000 partially as a result of a
$25,000 loss from a robbery and $34,000 of expenses for real estate owned during
the 1997 period and various other miscellaneous expenses increased slightly.
These items were partially offset by a decrease in federal insurance premiums of
$139,000 as a result of a decrease in rates due to the recapitalization of SAIF
during 1996.
Income Tax Expense. The provision for income taxes totaled $480,000 for
the four months ended April 30, 1997 compared to $603,000 for the four months
ended April 30, 1996. The decrease was primarily due to a decrease in income
before income taxes of $352,000. A valuation allowance of $180,000 was
established in 1996 to reduce the deferred tax assets to the amount that
management believed as more likely than not to be realized. The valuation
allowance related specifically to the deferred tax asset recorded for unrealized
capital losses reflected as a deduction of capital under SFAS No. 115 and to
deferred tax assets recorded for certain future tax deductions that are subject
to various expiration dates. As the amount of the valuation allowance did not
change during the four months ended Apirl 30, 1997, there was no related impact
to income from continuing operations.
51
<PAGE>
Comparison of Operating Results for the Years Ended December 31, 1996 and
December 31, 1995
General Net income for the year ended December 31, 1996 was $452,000
compared to net income of $3.2 million for the year ended December 31, 1995, a
decrease of $2.7 million, or 84.4%. The decrease was primarily a result of a
$1.3 million FDIC special assessment on SAIF insured deposits effective
September 30, 1996 and a $2.5 million accrued expense for contributions to the
Foundation in 1996. In addition, non-interest income decreased $111,000,
primarily as a result of a decrease in gain on sale of real estate owned of
$97,000 combined with a decrease of $37,000 in rental income from real estate
owned. This was partially offset by an increase in gain on sale of securities of
$31,000.
Interest Income. Interest income for the year ended December 31, 1996
was $19.0 million compared to $17.7 million for the year ended December 31,
1995, an increase of $1.3 million, or 7.3%. The increase resulted from the
combination of an increase in the average balance of interest-earning assets and
an increase in the average yield. The yield on average interest-earning assets
increased from 7.92% for the year ended December 31, 1995 to 7.96% for the year
ended December 31, 1996. The average yield on mortgage-backed securities
increased from 6.81% for the year ended December 31, 1995 to 7.81% for the year
ended December 31, 1996 due to the upward repricing of adjustable rate
securities. The average balance of interest-earning assets increased in total by
$15.9 million from $222.9 million for the year ended December 31, 1995 to $238.8
million for the year ended December 31, 1996. Although the yield on average
loans receivable decreased from 8.64% for the year ended December 31, 1995 to
8.59% for the year ended December 31, 1996, the average balance of loans
receivable increased by $12.3 million due to increased market demand. In
addition, the average balance of mortgage-backed securities increased by $5.7
million as a result of the investment of funds from the increase in deposits.
Interest Expense. Interest expense for the year ended December 31, 1996
was $9.5 million compared to $8.7 million for the year ended December 31, 1995,
an increase of $767,000, or 8.8%. The increase in interest expense reflected a
higher interest rate environment, as the average cost of interest-bearing
liabilities increased by 14 basis points from 4.30% for the year ended December
31, 1995 to 4.44% for the year ended December 31, 1996. The average cost of
certificates of deposit increased from 5.35% for the year ended December 31,
1995 to 5.47% for the year ended December 31, 1996. In addition, the average
balance of interest-bearing liabilities increased $10.8 million from $202.8
million for the year ended December 31, 1995 to $213.6 million for the year
ended December 31,1996 as a result of market demand.
Net Interest Income. Net interest income of $9.5 million for the year
ended December 31, 1996 represented an increase of $589,000 from the $8.9
million reported for the year ended December 31, 1995. There was a decrease in
the net interest spread from 3.62% for the year ended December 31, 1995 to 3.52%
for the year ended December 31, 1996. The decrease in the net interest rate
spread was a result of the average cost of interest-bearing deposits increasing
at a more rapid rate than the average yield on interest-earning assets. However,
the ratio of average interest-earning assets to average interest-bearing
liabilities increased from 109.93% for the year ended December 31, 1995 to
111.81% for the year ended December 31, 1996, and the net interest margin
decreased slightly from 4.00% to 3.98% for the same period.
52
<PAGE>
Provision for Loan Losses. The Bank's provision for loan losses for the
year ended December 31, 1996 was $706,000 compared to $136,000 for the year
ended December 31, 1995. The increase in the provision for loan losses was
primarily related to the Bennett Funding loans previously discussed. In
addition, the Bank experienced significant loan growth during 1996 which
resulted in an increase in the allowance for loan losses. Management increases
the allowance for loan losses through a provision charged to expense for loan
growth based on a statistical percentage developed considering past loss
experiences, delinquency trends, general economic conditions and other factors.
Gross loans increased $19.3 million, or 13.14% from 1995. The allowance for loan
losses represented .91% and .60% of gross loans receivable at December 31, 1996
and 1995, respectively.
Non-interest Income. Non-interest income for the year ended December
31, 1996 was $745,000 compared to $856,000 for the year ended December 31, 1995,
a decrease of $111,000, or 13.0%. The decrease was the result of a decrease in
the gain on sale of real estate owned of $97,000 combined with a $37,000
decrease in rental income from real estate owned as a result of the sale of the
property. These decreases were partially offset by an increase in gain on the
sale of securities of $21,000,
Non-interest Expense. Non-interest expense was $8.7 million for the
year ended December 31, 1996 compared to $4.7 million for the year ended
December 31, 1995, an increase of $4.0 million, or 85.1%. The increase was
primarily due to a $1.3 million one-time special assessment on SAIF insured
deposits resulting from federal legislation enacted on September 30, 1996,
combined with the $2.5 million contribution accrual to the Foundation. As a
result of the assessment, and depending upon the Bank's capital level and
supervisory rating, annual deposit insurance premiums were decreased for periods
beginning January 1, 1997 to approximately .065% from the .23% of deposits
previously paid by the Bank. See "Regulation--Insurance Accounts and Regulation
by the FDIC."
Income Taxes. The provision for income taxes was $406,000 for the year
ended December 31, 1996 compared to $1.8 million for the year ended December 31,
1995. The decrease was primarily due to a decrease in pretax income of $4.1
million, which was partially offset by an increase of $180,000 in the valuation
allowance for deferred tax assets. The valuation allowance was established in
1996 to reduce the deferred tax assets to the amount that management believed
was more likely than not to be realized. The valuation allowance related
specifically to the deferred tax asset recorded for unrealized capital losses
reflected as a reduction of capital under SFAS No. 115 and to deferred tax
assets recorded for certain future tax deductions that are subject to various
expiration dates.
Comparison of Operating Results for the Years Ended December 31, 1995 and
December 31, 1994
General. Net income for the year ended December 31, 1995 was $3.2
million compared to $3.4 million for the year ended December 31, 1994, a
decrease of $232,000, or 6.8%. The decrease was primarily a result of a decrease
in net interest income of $203,000 combined with an increase in non-interest
expense of $419,000. This was partially offset by an increase in non-interest
income of $279,000 and a decrease in income taxes of $65,000.
Interest Income. Interest income for the year ended December 31, 1995
was $17.7 million compared to $15.7 million for the year ended December 31,
1994, an increase of $2.0 million, or 12.7%. The increase was primarily a result
of an increase in the average balance of interest earning assets from $198.5
million for the year ended December 31, 1994 to $222.9 million for the year
ended December 31, 1995. This increase was primarily a result of the deployment
of the deposits obtained through the acquisition of the Bank's branch in
Philadelphia in June 1994.
53
<PAGE>
Interest Expense. Interest expense for the year ended December 31, 1995
was $8.7 million compared to $6.6 million for the year ended December 31, 1994,
an increase of $2.1 million, or 31.8%. The increase was the result of an
increase in the average balance of interest-bearing liabilities combined with an
increase in the average cost of funds. The average balance increased by $21.6
million from $181.2 million for the year ended December 31, 1994 to $202.8
million for the year ended December 31, 1995. The increase in the average
balance was primarily a result of the Philadelphia branch acquisition in June
1994. The average cost of funds increased by 67 basis points from 3.63% for the
year ended December 31, 1994 to 4.30% for the year ended December 31, 1995 which
was reflective of a higher interest rate environment.
Net Interest Income. Net interest income for the year ended December
31, 1995 was $8.9 million compared to $9.1 million for the year ended December
31, 1994, a decrease of $203,000, or 2.2%. The decrease in net interest income
was a result of the decrease in the net interest spread from 4.29% for the year
ended December 31, 1994 to 3.62% for the year ended December 31, 1995, as well
as a decrease in the net interest margin from 4.60% to 4.00% for the same
period. These decreases were reflective of the rapid increase in the average
cost of funds while the average yield on earning assets remained stable.
Provision for Loan Losses. The Bank's provision for loan losses for the
year ended December 31, 1995 was $136,000 compared to $182,000 for the year
ended December 31, 1994. The allowance for loan losses represented 0.60% and
0.57% of gross loans receivable at December 31, 1995 and 1994, respectively.
Non-interest Income. Non-interest income for the year ended December
31, 1995 was $856,000 compared to $577,000 for the year ended December 31, 1994,
an increase of $279,000, or 48.4%. The increase was primarily a result of a gain
on the sale of real estate owned of $147,000 in 1995 compared to none in 1994
and the gain on sale of securities of $24,000 in 1995 compared to $5,000 in
1994. In addition, deposit service charges increased $52,000 as a result of
increased deposit balances which were largely the result of the Philadelphia
branch acquisition in June 1994. The Bank also received $48,000 in rental income
on foreclosed real estate in 1995 compared to none in 1994.
Non-interest Expense. Non-interest expense for the year ended December
31, 1995 was $4.7 million compared to $4.3 million for the year ended December
31, 1994, an increase of $419,000, or 9.8%. Several factors contributed to the
increase including an increase in compensation and employee benefits of
$327,000, an increase in Federal insurance premiums of $77,000 and an increase
in other operating expenses of $50,000. These increases were primarily
attributable to the Philadelphia branch acquisition in June 1994.
Income Taxes. The provision for income taxes was $1.8 million for the
years ended December 31, 1995 and 1994 reflecting effective tax rates of 35.5%
and 34.8%, respectively.
54
<PAGE>
The following table presents, for the periods indicated, the total
dollar amount of interest income from average interest-earning assets and the
resultant yields, as well as the interest expense on average interest-bearing
liabilities, expressed both in dollars and rates. No tax equivalent adjustments
were made. The table also presents, at April 30, 1997, the weighted average
yields earned on loans, securities and other interest-earning assets, the
weighted average rates paid on savings deposits and the result and interest rate
spread. All average balances are monthly average balances. Non-accruing loans
have been included in the table as loans carrying a zero yield.
<TABLE>
<CAPTION>
Four Months Ended April 30,
At --------------------------------------------------------------------
April 30, 1997(1) 1996(1)
1997 -------------------------------- ---------------------------------
----- Average Interest Average Interest
Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Rate Balance Paid Rate Balance Paid Rate
---- ------- ---- ---- ------- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Loans receivable(2) ................. 8.15% $164,115 $ 4,653 8.51% $145,504 $ 4,197 8.65%
Mortgage-backed securities(3) ....... 6.99 36,871 1,025 8.34 38,535 1,032 8.03
Mutual funds(3) ..................... 5.96 5,776 109 5.66 5,776 113 5.87
Agencies/Other(3) ................... 6.97 24,531 388 4.75 24,135 420 5.22
CMOs(3) ............................. 5.70 5,808 106 5.48 6,335 126 5.97
Municipal securities(3) ............. 5.58 5,280 97 5.51 4,868 94 5.79
Federal funds sold .................. 5.63 2,489 46 5.54 3,433 66 5.77
Time deposits ....................... 5.65 200 4 6.00 200 4 6.00
Deposits with other institutions .... 5.48 1,504 34 6.78 2,988 42 4.22
FHLB stock .......................... 6.75 1,709 33 5.79 1,601 30 5.62
------- ------- -------- -------
Total interest-earning assets .... 7.65 248,283 6,495 7.85 233,375 6,124 7.87
Non-interest earning assets.......... 11,141 15,821
------- --------
Total assets...................... $259,424 $249,196
======== ========
Interest-Bearing Liabilities:
Money market ....................... 3.06 $ 5,280 54 3.07 $ 5,523 57 3.10
NOW ................................ 2.23 9,851 69 2.10 9,500 65 2.05
Passbook savings ................... 3.00 71,050 705 2.98 69,524 692 2.99
Certificates of Deposit ............ 5.43 128,209 2,285 5.35 123,288 2,293 5.58
Advances ........................... 5.75 5,400 107 5.94 3,000 56 5.60
------- ------ ------- -----
Total interest-bearing
liabilities .................. 4.42 219,790 3,220 4.40 210,835 3,163 4.50
------ -----
Non-interest bearing liabilities .... 9,794 8,863
------- ------
Total liabilities............... 229,584 219,698
Equity............................... 29,840 29,498
------- -------
Total liabilities and equity...... $259,424 $249,196
======== ========
Net interest-earning spread ......... 3.23% $ 3,275 3.45% $ 2,961 3.37%
====== ==== ====== ====
Margin .............................. 3.96% 3.81%
==== ====
Assets to liabilities ............... 112.96% 110.69%
====== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------------------------------------
1996 1995 1994
------------------------------- -------------------------------- ----------------------------
Average Interest Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate Balance Paid Rate
------- ---- ---- ------- ---- ---- ------- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans receivable(2) ............ $152,147 $ 13,068 8.59% $139,860 $ 12,080 8.64% $122,001 $ 11,118 9.11%
Mortgage-backed securities(3) .. 41,735 3,260 7.81 36,034 2,455 6.81 35,873 2,128 5.93
Mutual funds(3) ................ 5,776 338 5.85 5,776 358 6.20 5,776 326 5.64
Agencies/Other(3) .............. 22,714 1,326 5.83 22,189 1,586 7.15 14,473 1,008 6.96
CMOs(3) ........................ 6,313 413 6.54 6,903 412 5.97 7,976 407 5.10
Municipal securities(3) ........ 4,794 277 5.78 5,199 327 6.29 5,488 378 6.89
Federal funds sold ............. 1,829 118 6.45 3,338 225 6.74 4,385 182 4.15
Time deposits .................. 200 11 5.50 200 9 4.50 200 8 4.00
Deposits with other institutions 1,665 84 5.05 1,942 100 5.15 1,013 79 7.80
FHLB stock ..................... 1,645 111 6.75 1,482 98 6.61 1,278 76 5.95
-------- ------- -------- ------ -------- ------
Total interest-earning assets 238,818 19,006 7.96 222,923 17,650 7.92 198,463 15,710 7.92
Non-interest earning assets .... 13,445 14,702 12,330
-------- -------- --------
Total assets ................ $252,263 $237,625 $210,793
======== ======== ========
Interest-Bearing Liabilities:
Money market ................... $ 5,301 167 3.15 $ 6,234 193 3.10 $ 6,753 214 3.17
NOW ............................ 9,810 202 2.06 9,241 184 1.99 7,849 156 1.99
Passbook savings ............... 70,356 2,120 3.01 70,585 2,113 2.99 68,231 2,047 3.00
Certificates of Deposit ........ 124,797 6,827 5.47 112,963 6,044 5.35 95,557 3,987 4.17
Advances ....................... 3,333 178 5.34 3,769 193 5.12 2,846 180 6.32
-------- ----- -------- ----- ------- -----
Total interest-bearing
liabilities ............... 213,597 9,494 4.44 202,792 8,727 4.30 181,236 6,584 3.63
----- ----- -----
Non-interest bearing liabilities 8,471 7,392 5,480
-------- ------- -------
Total liabilities .......... 222,068 210,184 186,716
Equity .......................... 30,195 27,441 24,077
-------- ------- -------
Total liabilities and equity . $252,263 $237,625 $210,793
======== ======= =======
Net interest-earning spread ..... $ 9,512 3.52% $ 8,923 3.62% $ 9,126 4.29%
====== ==== ===== ==== ===== ====
Margin .......................... 3.98% 4.00% 4.60%
==== ==== ====
Assets to liabilities ........... 111.81% 109.93% 109.51%
======== ======= ======
<FN>
- ---------
(1) Annualized yield/rate.
(2) Calculated net of deferred loan fees, loan discounts, loans in process and
loss reserves.
(3) Calculated based on amortized cost.
</FN>
</TABLE>
55
<PAGE>
The following schedule presents the dollar amount of changes in
interest income and interest expense for major components of interest-earning
assets and interest-bearing liabilities. It distinguishes between the changes
related to outstanding balances and that due to the changes in interest rates.
For each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (i) changes in volume (i.e.,
changes in volume multiplied by old rate) and (ii) changes in rate (i.e.,
changes in rate multiplied by old volume). For purposes of this table, changes
attributable to both rate and volume, which cannot be segregated, have been
allocated proportionately to the change due to volume and the change due to
rate.
<TABLE>
<CAPTION>
Four Months Ended
April 30, Year Ended December 31, Year Ended December 31,
1996 vs. 1997 1995 vs. 1996 1994 vs. 1995
---------------------------- --------------------------- ----------------------------
Increase Increase Increase
(Decrease) (Decrease) (Decrease)
Due to Total Due to Total Due to Total
----------------- Increase --------------- Increase --------------- Increase
Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
------ ---- ---------- ------ ---- ---------- ------ ---- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable ........................ $ 529 $ (73) $ 456 $ 1,056 $ (68) $ 988 $ 1,565 $ (603) $ 962
Mortgage-backed securities .............. (45) 38 (7) 418 387 805 10 317 327
Mutual funds ............................ -- (4) (4) -- (20) (20) -- 32 32
Agencies and other ...................... 7 (39) (32) 37 (297) (260) 551 27 578
CMOs .................................... (10) (10) (20) (37) 38 1 (59) 64 5
Municipal securities .................... 8 (5) 3 (24) (26) (50) (19) (32) (51)
Federal funds sold ...................... (18) (2) (20) (98) (9) (107) (51) 94 43
Time deposits ........................... -- -- -- -- 2 2 -- 1 1
Deposits with other
institutions .......................... (27) 19 (8) (14) (2) (16) 54 (33) 21
FHLB stock .............................. 2 1 3 11 2 13 13 9 22
------- ------- ------- ------- ------- ------- ------- ------- -------
Total interest-earning assets .......... 446 (75) 371 1,349 7 1,356 2,064 (124) $ 1,940
Interest-bearing liabilities:
Money market ............................ (2) (1) (3) (29) 3 (26) (16) (5) (21)
NOW ..................................... 2 2 4 12 6 18 28 -- 28
Passbook Savings ........................ 15 (2) 13 (7) 14 7 70 (4) 66
Certificates of deposit ................. 90 (98) (8) 645 138 783 807 1,250 2,057
Advances ................................ 47 4 51 (23) 8 (15) 51 (38) 13
------- ------- ------- ------- ------- ------- ------- ------- -------
Total interest-earning assets ........... $ 152 $ (95) $ 57 $ 598 $ 169 $ 767 $ 940 $ 1,203 $ 2,143
------- ------- ------- ------- ------- ------- ------- ------- -------
Net interest/spread ...................... $ 294 $ 20 $ 314 $ 751 $ (162) $ 589 $ 1,124 $(1,327) $ (203)
</TABLE>
56
<PAGE>
Asset/Liability Management
In an attempt to manage its exposure to changes in interest rates,
management monitors the Bank's interest rate risk. The Board of Directors
reviews at least quarterly the Bank's interest rate risk position and
profitability. The Board of Directors also reviews the Bank's portfolio,
formulates investment strategies and oversees the timing and implementation of
transactions to assure attainment of the Bank's objectives in the most effective
manner. In addition, the Board reviews on a quarterly basis the Bank's
asset/liability position, including simulations of the effect on the Bank's
capital of various interest rate scenarios.
In managing its asset/liability mix, First Security, depending on the
relationship between long- and short-term interest rates, market conditions and
consumer preference, often places more emphasis on managing short term net
interest margin than on better matching the interest rate sensitivity of its
assets and liabilities in an effort to enhance net interest income. Management
believes that the increased net interest income resulting from a mismatch in the
maturity of its asset and liability portfolios can, during periods of declining
or stable interest rates, provide high enough returns to justify the increased
exposure to sudden and unexpected increases in interest rates.
The Board has taken a number of steps to manage the Bank's
vulnerability to changes in interest rates. First, the Bank has long used
community outreach, customer service and marketing efforts to increase the
Bank's passbook and other non-certificate accounts. At April 30, 1997, $90.8
million or 41.4% of the Bank's deposits consisted of passbook, NOW and money
market accounts. The Bank believes that these accounts represent "core" deposits
which are generally somewhat less interest rate sensitive than other types of
deposit accounts. Second, while the Bank continues to originate 30 year fixed
rate residential loans for portfolio as a result of consumer demand, an
increasing proportion of the Bank's residential loans have terms of 15 years or
less or carry adjustable interest rates. Finally, the Bank has focused a
significant portion of its investment activities on securities with adjustable
interest rates or terms of five years or less. At April 30, 1997, $18.9 million
or 46.1% of the Bank's mortgage-backed securities had adjustable interest rates
or terms to maturity (or anticipated average lives in the case of collateralized
mortgage obligations) of five years or less and $11.3 million or 30.4% of the
Bank's other securities had adjustable interest rates or terms to maturity of
five years or less based on their carrying value.
Management utilizes the net portfolio value ("NPV") analysis to
quantify interest rate risk. In essence, this approach calculates the difference
between the present value of liabilities, expected cash flows from assets and
cash flows from off balance sheet contracts. Under OTS regulations, an
institution's "normal" level of interest rate risk in the event of an immediate
and sustained 200 basis point change in interest rates is a decrease in the
institution's NPV in an amount not exceeding 2% of the present value of its
assets. Pursuant to this regulation, thrift institutions with greater than
"normal" interest rate exposure must take a deduction from their total capital
available to meet their risk-based capital requirement. The amount of that
deduction is one-half of the difference between (a) the institution's actual
calculated exposure to the 200 basis point interest rate increase or decrease
57
<PAGE>
(whichever results in the greater pro forma decrease in NPV) and (b) its
"normal" level of exposure which is 2% of the present value of its assets.
Savings institutions, however, with less than $300 million in assets and a total
capital ratio in excess of 12%, will be exempt from this requirement unless the
OTS determines otherwise. The OTS has postponed the implementation of the rule
until further notice. Based upon its asset size and capital level at April 30,
1997, the Bank would qualify for an exemption from this rule; however,
management believes that the Bank would be required to make a deduction from
capital if it were subject to this rule.
Presented below, as of March 31, 1997, is an analysis of the Bank's
estimated interest rate risk as measured by changes in NPV for instantaneous and
sustained parallel shifts in interest rates, up and down 400 basis points in 100
point increments.
Assumed Change $ Change in % Change in
in Interest Rates $ Amount NPV NPV
- ------------------------- ----------------- ----------------- -----------
(Basis Points) (Dollars in Thousands)
+400 $16,073 $(22,210) (58)%
+300 21,571 (16,711) (44)
+200 27,278 (11,005) (29)
+100 33,001 (5,282) (14)
--- 38,282 --- ---
-100 42,378 4,095 11
-200 44,454 6,172 16
-300 47,128 8,845 23
-400 50,448 12,165 32
Certain assumptions utilized in assessing the interest rate risk of
thrift institutions were employed in preparing the preceding table. These
assumptions relate to interest rates, loan prepayment rates, deposit decay
rates, and the market values of certain assets under the various interest rate
scenarios. It was also assumed that delinquency rates will not change as a
result of changes in interest rates although there can be no assurance that this
will be the case. Even if interest rates change in the designated amounts, there
can be no assurance that the Bank's assets and liabilities would perform as set
forth above. In addition, a change in U.S. Treasury rates in the designated
amounts accompanied by a change in the shape of the Treasury yield curve would
cause significantly different changes to the NPV than indicated above.
Liquidity and Capital Resources
The Bank's primary sources of funds are deposits and proceeds from
principal and interest payments on loans and mortgage-backed securities. While
maturities and scheduled amortization of loans and securities are predictable
sources of funds, deposit flows and mortgage prepayments are greatly influenced
by general interest rates, economic conditions and competition. First Security
generally manages the pricing of its deposits to be competitive and to increase
core deposit relationships.
58
<PAGE>
Federal regulations require First Security to maintain minimum levels
of liquid assets. The required percentage has varied from time to time based
upon economic conditions and savings flows and is currently 5% of net
withdrawable savings deposits and borrowings payable on demand or in one year or
less during the preceding calendar month. Liquid assets for purposes of this
ratio include cash, certain time deposits, U.S. Government, government agency
and corporate securities and other obligations generally having remaining
maturities of less than five years. First Security has historically maintained
its liquidity ratio for regulatory purposes at levels in excess of those
required. At April 30, 1997, First Security's liquidity ratio for regulatory
purposes was 8.9%.
The Bank's cash flows are comprised of three primary classifications:
cash flows from operating activities, investing activities and financing
activities. Cash flows provided by operating activities were $382,000 and $1.4
million for the four months ended April 30, 1997 and April 30, 1996
respectively, and $2.1 million, $4.1 million and $3.6 million for the years
ended December 31, 1996, December 31, 1995, and 1994, respectively. Net cash
from investing activities consisted primarily of disbursements for loan
originations and the purchase of investments and mortgage-backed securities,
offset by principal collections on loans, proceeds from maturation and sales of
securities and paydowns on mortgage-backed securities. Net cash from financing
activities consisted primarily of activity in deposit and escrow accounts and
advances from FHLB of Chicago.
The Bank's most liquid assets are cash and short-term investments. The
levels of these assets are dependent on the Bank's operating, financing, lending
and investing activities during any given period. At April 30, 1997, cash and
short-term investments totaled $7.1 million. The Bank has other sources of
liquidity if a need for additional funds arises, including securities maturing
within one year and the repayment of loans. The Bank may also utilize the sale
of securities available-for-sale and Federal Home Loan Bank advances as a source
of funds.
At April 30, 1997, the Bank had outstanding commitments to originate
loans of $3.3 million, of which $2.7 million had fixed interest rates. These
loans are to be secured by properties located in its market area. The Bank
anticipates that it will have sufficient funds available to meet its current
loan commitments. Loan commitments have, in recent periods, been funded through
liquidity or through FHLB advances. Certificates of deposit which are scheduled
to mature in one year or less from April 30, 1997 totaled $102.2 million.
Management believes, based on past experience, that a significant portion of
such deposits will remain with the Bank. Based on the foregoing, in addition to
the Bank's high level of core deposits and capital, the Bank considers its
liquidity and capital resources sufficient to meet its outstanding short-term
and long-term needs.
Liquidity management is both a daily and long-term responsibility of
management. First Security adjusts its investments in liquid assets based upon
management's assessment of (i) expected loan demand, (ii) expected deposit
flows, (iii) yields available on interest-earning deposits and investment
securities, and (iv) the objectives of its asset/liability management program.
Excess liquid assets are invested generally in interest-earning overnight
deposits and short- and intermediate-term U.S. Government and agency obligations
and mortgage-backed securities of short duration. If First Security requires
funds beyond its ability to generate them internally, it has additional
borrowing capacity with the FHLB of Chicago. It is anticipated that immediately
upon completion of the Conversion, the Holding Company's and the Bank's liquid
assets will be increased. See "Use of Proceeds."
59
<PAGE>
First Security is subject to various regulatory capital requirements
imposed by the OTS. At April 30, 1997, First Security was in compliance with all
applicable capital requirements on a fully phased-in basis. See "Regulation -
Regulatory Capital Requirements" and "Pro Forma Regulatory Capital Analysis" and
Note 11 of the Notes to the Consolidated Financial Statements.
Impact of Inflation and Changing Prices
The financial statements and related data presented herein have been
prepared in accordance with generally accepted accounting principles which
require the measurement of financial position and operating results in terms of
historical dollars without considering changes in the relative purchasing power
of money over time due to inflation. The primary impact of inflation on the
operations of the Bank is reflected in increased operating costs. Unlike most
industrial companies, virtually all of the assets and liabilities of a financial
institution are monetary in nature. As a result, interest rates, generally, have
a more significant impact on a financial institution's performance than does
inflation. Interest rates do not necessarily move in the same direction or to
the same extent as the prices of goods and services.
Impact of New Accounting Standards
In March 1995, the FASB issued Statement of Financial Accounting
Standards No. 121 ("SFAS No. 121"), "Accounting for the Impairment of Long Lived
Assets and for Long Lived Assets to be Disposed Of." SFAS No. 121 requires that
long lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or circumstances indicate that the carrying amount of
an asset may not be recoverable. However, SFAS No. 121 does not apply to
financial instruments, core deposit intangibles, mortgage and other servicing
rights or deferred tax assets. The adoption of SFAS No. 121 in 1996 did not have
a material impact on the results of operations or financial condition of the
Bank.
In May 1995, the FASB issued Statement of Financial Accounting
Standards No. 122 ("SFAS No. 122"), "Accounting for Mortgage Servicing Rights."
SFAS No. 122 requires an institution that purchases or originates mortgage loans
and sells or securitizes those loans with servicing rights retained to allocate
the cost of the mortgage loans to the mortgage servicing rights and the loans
(without the mortgage servicing rights) based on their relative fair values. In
addition, institutions are required to assess impairment of the capitalized
mortgage servicing portfolio based on the fair value of those rights. SFAS No.
122 is effective for fiscal years beginning after December 15, 1995. SFAS No.
122 was superseded by Statement of Financial Accounting Standards No. 125 after
December 31, 1996. The adoption of SFAS No. 122 in 1996 did not have a material
impact on the results of operations or financial condition of the Bank.
In November 1995, the FASB issued Statement of Financial Accounting
Standards No. 123 ("SFAS No. 123"), "Accounting for Stock Based Compensation,"
("SFAS No. 123"). This statement establishes financial accounting standards for
stock-based employee compensation plans. SFAS No. 123 permits the Bank to choose
either a new fair value based method or the current APB Opinion 25 intrinsic
value based method of accounting for its stock-based compensation arrangements.
SFAS No. 123 requires pro forma disclosures of net earnings and earnings per
share computed as if the fair value based method had been applied in financial
statements of
60
<PAGE>
companies that continue to follow current practice in accounting for such
arrangements under Opinion 25. The disclosure provisions of SFAS No. 123 are
effective for fiscal years beginning after December 15, 1995. Any effect that
this statement will have on the Bank will be applicable upon the consummation of
the Conversion.
In June 1996, the Financial Accounting Standards Board released
Statement of Financial Accounting Standards No. 125 ("SFAS No. 125"),
"Accounting for Transfers and Extinguishments of Liabilities." SFAS No. 125
provides accounting and reporting standards for transfers and servicing of
financial assets and extinguishments of liabilities. SFAS No. 125 requires 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, and derecognizes liabilities when extinguished. SFAS No. 125 also
supersedes SFAS No. 122 and requires that servicing assets and liabilities be
subsequently measured by amortization in proportion to and over the period of
estimated net servicing income or loss and requires assessment for asset
impairment or increases obligations based on their fair values. SFAS No. 125
applies to transfers and extinguishments occurring after December 31, 1996 and
early or retroactive application is not permitted. Because the volume and
variety of certain transactions will make it difficult for some entities to
comply, some provisions have been delayed by SFAS No. 122. The adoption of SFAS
No. 125 did not have a material impact on the financial condition or operations
of the Bank.
In March 1997, the accounting requirements for calculating earnings per
share were revised. Basic earnings per share for 1998 and later will be
calculated solely on average common shares outstanding. Diluted earnings per
share will reflect the potential dilution of stock options and other common
stock equivalents. All prior calculations will be restated to be comparable to
the new methods. The new calculation methods are not expected to significantly
affect future basic earnings per share and diluted earnings per share.
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130 ("SFAS No. 130") "Reporting Comprehensive Income". This
statement establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in a full set
of general-purpose financial statements. This Statement 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 displayed with
the same prominence as other financial statements. Income tax effects must also
be shown. This statement is effective for fiscal years beginning after December
15, 1997. the adoption of SFAS No. 130 is not expected to have a material impact
on the results of operations or financial condition of First Security.
BUSINESS
General
As a community-oriented financial institution, First Security seeks to
serve the financial needs of communities in its market area. First Security's
business involves attracting deposits from the general public and using such
deposits, together with other funds, to originate primarily one- to four-family
residential mortgage loans and, to a lesser extent, multi-family and commercial
real estate, consumer and other loans in its market area. The Bank also invests
in mortgage-backed and other securities and other permissible investments. See
"Risk Factors."
The Bank offers a variety of accounts having a range of interest rates
and terms. The Bank's deposits include passbook and NOW accounts, money market
accounts and certificate accounts with terms of six months to five years. The
Bank solicits deposits only in its primary market area and does not accept
brokered deposits.
61
<PAGE>
Market Area
The Bank's main office is located in Chicago, Illinois and its branch
offices are located in Chicago, Illinois, Philadelphia, Pennsylvania and Rolling
Meadows, Illinois.
The Bank's Western Avenue office is located on the near northwest side
of Chicago in the "Ukrainian Village" community, a middle-income community where
the Bank has focused its operations since 1964. This community is located
approximately two and one half miles to the northwest of downtown Chicago and
approximately three miles west of Lake Michigan. The majority of the community's
many businesses are small and local companies. Residences within the community
consist primarily of two- to four-family flats and single family homes although
there are also mid-size apartment buildings. Real estate values within this
community have risen sharply over the last ten years as "gentrification" has
begun to occur as a result of the community's proximity to downtown Chicago.
The Bank's Milwaukee Avenue office was opened in 1993 and is located in
the "Norwood Park" neighborhood of Chicago. This community is a stable middle
income area which also has many residents of Eastern European descent.
Residences within the community consist primarily of single family homes as well
as two and three flats and small apartment buildings. This area is located
approximately eight miles northwest of downtown Chicago.
The Bank's Philadelphia branch was acquired in 1994 through a purchase
from the Resolution Trust Corporation. The branch is located in a moderate
income neighborhood of Philadelphia known as "Rhawnhurst." The community is the
home to many persons of Eastern European heritage, including new immigrants.
Residences within the community consist primarily of single family row houses
and, to a lesser extent, small apartment buildings.
The Bank's suburban Chicago branch was opened in 1977 and is located in
Rolling Meadows, Illinois, an upper middle class community located to the
northwest of Chicago, near the western border of Palatine, Illinois. Over the
last 20 years, Rolling Meadows has experienced significant population and
commercial growth. However, as a result of competition, the branch's deposit and
loan growth has been modest.
Lending Activities
General. The principal lending activity of the Bank is originating for
its portfolio fixed and, to a much lesser extent, adjustable rate ("ARM")
mortgage loans secured by one- to four-family residences located primarily in
the Bank's market area. First Security also originates multi-family and
commercial real estate, consumer and other loans in its market area. At April
30, 1997, the Bank's loans receivable, net totaled $165.9 million. See "-
Originations of Loans" and "Use of Proceeds."
62
<PAGE>
The following table sets forth the composition of the Bank's loan
portfolio in dollar amounts and in percentages as of the dates indicated.
<TABLE>
<CAPTION>
December 31,
April 30, ------------------------------------------------------
1997 1996 1995
------------------------- ------------------------- ------------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real Estate Loans:
One- to four-family ......... $137,479 81.32% $134,971 81.14% $117,379 79.83%
Multi-family ................ 9,708 5.74 9,374 5.63 7,926 5.39
Commercial .................. 7,661 4.53 7,647 4.60 7,865 5.35
Mixed use(1) ................ 7,764 4.59 8,004 4.81 7,262 4.94
Construction or
development ............... -- -- -- -- -- --
-------- ----- ------- ----- ------- ------
Total real estate loans ... 162,612 96.18 159,996 96.18 140,432 95.51
Consumer loans:
Share loans ................. 1,182 0.70 1,174 0.71 1,570 1.07
Automobile .................. 72 0.04 74 0.04 110 0.07
Home equity ................. 4,006 2.37 3,431 2.06 3,684 2.51
Home improvement ............ 10 0.01 12 0.01 29 0.02
Other ....................... 351 0.20 395 0.24 445 0.30
-------- ----- ------- ----- ------- -----
Total consumer loans ..... 5,621 3.32 5,086 3.06 5,838 3.97
Loans secured by leases ..... 839 0.50 1,272 0.76 759 0.52
-------- ----- ------- ----- ------- -----
Total loans ............... 169,072 100.00% 166,354 100.00% 147,029 100.00%
====== ====== ======
Less:
Loans in process ............ -- -- --
Deferred fees and
discounts ................. 1,492 1,486 1,578
Allowance for losses ........ 1,666 1,520 885
-------- ------ ------
Total loans receivable, net $165,914 $163,348 $144,566
======== ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------------------------------
1994 1993 1992
----------------------- ----------------------- ----------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real Estate Loans:
One- to four-family ......................... $110,280 79.53% $ 84,401 77.89% $ 76,102 75.90%
Multi-family ................................ 7,731 5.58 7,632 7.04 6,799 6.78
Commercial .................................. 6,911 4.98 4.973 4.59 6,843 6.82
Mixed use(1) ................................ 7,433 5.36 5,847 5.40 4,355 4.34
Construction or
development ............................... -- -- 185 0.17 429 0.43
-------- ----------- -------- ----------- -------- ----------
Total real estate loans ................... 132,355 95.45 103,038 95.09 94,528 94.27
Consumer loans:
Share loans ................................. 1,328 0.96 1,525 1.41 1,436 1.43
Automobile .................................. 141 0.10 150 0.14 159 0.16
Home equity ................................. 3,870 2.79 3,105 2.87 3,599 3.59
Home improvement ............................ 69 0.05 78 0.07 161 0.16
Other ....................................... 452 0.33 459 0.42 387 0.39
-------- ----------- -------- ----------- -------- ----------
Total consumer loans ..................... 5,860 4.23 5,317 4.91 5,742 5.73
Loans secured by leases ..................... 448 0.32 -- -- -- --
-------- ----------- -------- ----------- -------- ----------
Total loans ............................... 138,663 100.00% 108,355 100.00% 100,270 100.00%
=========== ======== =======
Less:
Loans in process ............................ -- 6 43
Deferred fees and
discounts ................................. 1,664 1,795 1,899
Allowance for losses ........................ 792 608 360
-------- -------- --------
Total loans receivable, net ............... $136,207 $105,946 $97,968
======== ======== ========
- -----------
<FN>
(1) Mixed use refers to real estate on which the borrower both resides and
conducts a business.
</FN>
</TABLE>
63
<PAGE>
The following table shows the composition of the Bank's loan portfolio
by fixed- and adjustable-rate at the dates indicated.
<TABLE>
<CAPTION>
December 31,
April 30, ------------------------------------------------------
1997 1996 1995
------------------------- ------------------------- ------------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Fixed-Rate Loans:
Real estate:
One- to four-family ....... $122,397 72.40% $118,308 71.12% $101,015 68.70%
Multi-family .............. 9,504 5.62 9,169 5.51 7,719 5.25
Commercial ................ 6,478 3.83 6,545 3.94 7,370 5.01
Mixed use(1) .............. 7,189 4.25 7,424 4.46 6,666 4.53
Construction or development -- -- -- -- -- --
-------- ------ -------- ------ -------- -----
Total real estate loans ... 145,568 86.10 141,446 85.03 122,770 83.49
Consumer .................... 1,615 0.95 1,655 1.00 2,154 1.46
Loans secured by leases ..... 839 0.50 1,272 0.76 759 0.52
-------- ------ -------- ------ -------- -----
Total fixed-rate loans .... 148,022 87.55 147,804 86.79 125,683 85.47
Adjustable-Rate Loans
Real estate:
One-to-four-family ........ 15,082 8.92 16,663 10.02 16,364 11.13
Multi-family .............. 204 0.12 205 0.12 207 0.14
Commercial ................ 1,183 0.70 1,102 0.66 495 0.34
Mixed use ................. 575 0.34 580 0.35 596 0.41
Consumer .................... 4,006 2.37 3,431 2.06 3,684 2.51
-------- ----- ------- ------ ------- -----
Total adjustable-rate loans 21,050 12.45 21,981 13.21 21,346 14.53
-------- ----- ------- ------ ------- -----
Total loans ............... 169,072 100.00% 166,354 100.00% 147,029 100.00%
====== ====== ======
Less:
Loans in process ............ -- -- --
Deferred fees and discounts . 1,492 1,486 1,578
Allowance for losses ........ 1,666 1,520 885
-------- ------- -------
Total loans receivable, net $165,914 $163,348 $144,566
======== ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------------------------------
1994 1993 1992
----------------------- ----------------------- ----------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Fixed-Rate Loans:
Real estate:
One- to four-family .................. $ 93,139 67.17% $ 76,852 70.93% $ 67,865 67.68%
Multi-family ......................... 7,522 5.43 7,421 6.85 6,799 6.78
Commercial ........................... 6,628 4.78 4,973 4.59 6,843 6.82
Mixed use(1) ......................... 6,790 4.90 5,483 5.06 3,986 3.98
Construction or development .......... -- -- 185 0.17 429 0.43
-------- ---------- -------- ----------- -------- ---------
Total real estate loans .............. 114,079 82.28 94,914 87.60 85,922 85.69
Consumer ............................... 1,990 1.44 2,212 2.04 2,143 2.14
Loans secured by leases ................ 448 0.32 -- -- -- --
-------- ---------- -------- ----------- -------- ---------
Total fixed-rate loans ............... 116,517 84.04 97,126 89.64 88,065 87.83
Adjustable-Rate Loans
Real estate:
One-to-four-family ................... 17,141 12.36 7,549 6.96 8,237 8.22
Multi-family ......................... 209 0.15 211 0.19 -- --
Commercial ........................... 283 0.20 -- -- -- --
Mixed use ............................ 643 0.46 364 0.34 369 0.36
Consumer ............................... 3,870 2.79 3,105 2.87 3,599 3.59
-------- ---------- -------- ----------- -------- ---------
Total adjustable-rate loans .......... 22,146 15.96 11,229 10.36 12,205 12.17
-------- ---------- -------- ---------- -------- --------
Total loans........................... 138,663 100.00% 108,355 100.00% 100,270 100.00%
========== ========== ========
Less:
Loans in process ....................... -- 6 43
Deferred fees and discounts ............ 1,664 1,795 1,899
Allowance for losses ................... 792 608 360
-------- -------- ------
Total loans receivable, net .......... $136,207 $105,946 $ 97,968
======== ======== ======
</TABLE>
64
<PAGE>
The following schedule illustrates the interest rate sensitivity of the
Bank's loan portfolio at April 30, 1997. Mortgages which have adjustable or
renegotiable interest rates are shown as maturing in the period during which the
final payment is due. The schedule does not reflect the effects of possible
prepayments or enforcement of due-on-sale clauses.
<TABLE>
<CAPTION>
Real Estate
-----------------------------------------
Multi-family and
Commercial Real
One- to four-family Estate Consumer and Leases Total
-------------------- ------------------- -------------------- ----------------
Weighted Weighted Weighted Weighted
Average Average Average Average
Amount Rate Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ ---- ------ ----
(Dollars in Thousands)
Due During
Years Ending
April 30,
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 ................................ $ 870 9.30% $ 3,109 10.37% $ 1,130 10.65% $ 5,109 10.25%
1999 ................................ 604 7.98 2,030 8.76 771 8.29 3,405 8.52
2000 to 2002 ........................ 13,092 7.99 12,956 9.31 4,430 8.47 30,478 8.62
2003 to 2007 ........................ 17,314 8.23 2,313 9.68 55 6.58 19,682 8.39
2008 to 2022 ........................ 44,259 8.03 4,138 9.21 74 7.15 48,471 8.13
2023 and following .................. 61,340 7.77 587 7.91 -- -- 61,927 7.77
-------- -------- -------- --------
Total ............................ $137,479 7.94 $ 25,133 9.38% $ 6,460 8.80 $169,072 8.19
======== ======== ======== ========
</TABLE>
The total amount of loans due after April 30, 1998 which have
predetermined interest rates is $149.2 million while the total amount of loans
due after such date which have floating or adjustable interest rates is $14.8
million.
65
<PAGE>
Under federal law, the aggregate amount of loans that the Bank is
permitted to make to any one borrower is generally limited to 15% of unimpaired
capital and surplus (25% if the security for such loan has a "readily
ascertainable" value or 30% for certain residential development loans). At April
30, 1997, based on the above, the Bank's regulatory loans-to-one borrower limit
was approximately $4.5 million. On the same date, the Bank had no borrowers with
outstanding balances in excess of this amount. As of April 30, 1997, the largest
dollar amount outstanding or committed to be lent to one borrower or, group of
related borrowers, related to one residential loan and two commercial real
estate loans totaling $1.2 million secured by the borrower's residence (in a
suburb of Chicago) and two commercial properties (both restaurants) located in
Chicago, Illinois. At April 30, 1997, these loans were performing in accordance
with their terms. As of the same date, there were no other lending relationships
with carrying values in excess of $1.0 million.
All of the Bank's lending is subject to its written underwriting
standards and to loan origination procedures. Decisions on loan applications are
made on the basis of detailed applications and property valuations (consistent
with the Bank's appraisal policy). The loan applications are designed primarily
to determine the borrower's ability to repay and the more significant items on
the application are verified through use of credit reports, financial
statements, tax returns or confirmations. All mortgage loans currently
originated by First Security are approved by the loan committee, currently
comprised of Directors Babyk, Dobrowolsky and Gawryk and Vice President Korb,
and ratified by the full Board of Directors.
The Bank requires title insurance or other evidence of title on its
mortgage loans, as well as fire and extended coverage casualty insurance in
amounts at least equal to the principal amount of the loan or the value of
improvements on the property, depending on the type of loan. The Bank also
requires flood insurance to protect the property securing its interest when the
property is located in a flood plain.
One- to Four-Family Residential Real Estate Lending. The cornerstone of
the Bank's lending program is the origination of loans secured by mortgages on
owner-occupied one- to four-family residences. Historically, the Bank focused
its residential lending activities on fixed rate loans with terms up to 30
years. In the 1980s, in order to reduce the average term to repricing of its
assets, the Bank began to offer 15 year and 10 year fixed rate loans as well as
ARMs (although, as a result of customer preference, the Bank's ARM loan volume
has been limited). Substantially all of the Bank's one- to four-family
residential mortgage originations are secured by properties located in its
market area. All mortgage loans currently originated by the Bank are retained
and serviced by it.
The Bank currently offers fixed-rate mortgage loans with maturities
from 10 to 30 years. The Bank also offers fixed rate balloon products with a 30
year amortization schedule which are due in five or seven years and which, under
certain circumstances, may be extended for an additional term of up to five or
seven years, as applicable. As of April 30, 1997, the Bank had $22.9 million of
fixed rate loans with original terms of 10 years or less (most of which were
five or seven year balloon loans), $38.9 million of fixed rate loans with
66
<PAGE>
original terms of 10-15 years and $60.6 million of fixed rate loans with
original terms of more than 15 years. See "- Originations of Loans."
The Bank also originates fixed rate home equity loans with terms of up
to ten years. These loans are written so that the total balance does not exceed
the lesser of $35,000 or 75% of the appraised value of the security property
when combined with the balance of the first mortgage lien. At April 30, 1997,
the Bank had $786,000 of home equity loans, all of which are classified in the
tabular data as one- to four-family residential loans.
The Bank also offers ARMs which carry interest rates which adjust at a
margin (generally 250 basis points) over the yield on the One Year Average
Monthly U.S. Treasury Constant Maturity Index ("CMT"). Such loans may carry
terms to maturity of up to 30 years. The ARM loans currently offered by the Bank
provide for a cap on annual interest rate changes of 200 basis points and a
lifetime cap generally of 600 basis points over the initial rate. Initial
interest rates offered on the Bank's ARMs may be approximately 100-150 basis
points below the fully indexed rate, although borrowers are qualified at the
fully indexed rate. As a result, the risk of default on these loans may increase
as interest rates increase. At April 30, 1997, one- to four-family ARMs totaled
$15.1 million or 8.92% of the Bank's total loan portfolio.
First Security will generally lend up to 90% of the lesser of the sales
price or appraised value of the security property on owner occupied one- to
four-family loans; provided, however, that private mortgage insurance is
obtained in an amount sufficient to reduce the Bank's exposure to not more than
80% of the sales price or appraised value, as applicable. The loan-to-value
ratio on nonowner occupied, one- to four-family loans is generally 80% of the
lesser of the sales price or appraised value of the security property. Non-owner
occupied one- to four-family loans may pose a greater risk to the Bank than
traditional owner occupied one- to four-family loans. In underwriting one- to
four-family residential real estate loans, the Bank currently evaluates the
borrower's ability to make principal, interest and escrow payments, the
borrower's credit history, the value of the property that will secure the loan
and debt to income ratios.
Residential loans do not currently include prepayment penalties, are
non-assumable and do not produce negative amortization. The Bank's underwriting
practices do not comply in every way with those required by most purchasers in
the secondary market. For instance, the Bank, on occasion, will lend to
borrowers that have income/debt service ratios below that required by many
secondary market purchasers. In that event, the Bank will require that the
borrower have other attributes which justify approving a loan, such as a
favorable repayment record with the Bank on previous lending relationships,
favorable cash flow, a low loan to value ratio or other assets which can be used
as additional collateral. The Bank has found that non-compliance with secondary
market standards at the time of origination does not in and of itself cause
credit problems since the Bank has engaged in this type of lending for many
years and its overall delinquency experience on these loans has been
satisfactory to date. In addition, these loans, once seasoned, generally are
saleable on the secondary market. Furthermore, the Bank has found that these
policies and procedures help the Bank maintain and improve its customer
relations, which is critical in the communities the Bank serves.
While the Bank seeks to originate most of its one- to four-family
residential loans in amounts which are less than or equal to the applicable
67
<PAGE>
Federal Home Loan Mortgage Corporation maximum (currently $214,600), the Bank
does make one- to four-family residential loans in amounts in excess of such
maximum. The Bank's delinquency experience on such loans has been similar to its
experience on its other residential loans.
The Bank's residential mortgage loans customarily include due-on-sale
clauses giving the Bank the right to declare the loan immediately due and
payable in the event that, among other things, the borrower sells or otherwise
disposes of the property subject to the mortgage and the loan is not repaid.
Multi-family and Commercial Real Estate Lending. In order to increase
the yield of its loan portfolio and to complement residential lending
opportunities, the Bank from time to time originates permanent multi-family and
commercial real estate loans secured by properties in its primary market area.
At April 30, 1997, the Bank had multi-family loans totaling $9.7 million, or
5.74% of the Bank's total loan portfolio, and $15.4 million in commercial real
estate loans, representing 9.12% of the total loan portfolio.
The Bank's multi-family loan portfolio consists primarily of loans
secured by nine or fewer units. The Bank's commercial real estate loans are
primarily secured by retail stores, small office buildings, store/apartment
complexes, taverns and store front offices.
The Bank's multi-family real estate loans generally carry a maximum
term of 15 years and have fixed rates, although most of these loans are five
year balloons. These loans are generally made in amounts of up to 80% of the
lesser of the appraised value or the purchase price of the property. Most of the
Bank's commercial real estate loans are five year balloon loans with fixed rates
of interest. Also included in the Bank's commercial real estate loans are $1.2
million of lines of credit secured by commercial real estate with floating
interest rates tied to the prime rate of interest. Commercial real estate loans
are generally made in amounts up to 75% of the lesser of the appraised value or
the purchase price of the property.
Appraisals on properties securing multi-family and commercial real
estate loans in excess of $250,000 are performed by an independent appraiser
designated by the Bank at the time the loan is made. All appraisals on and
multi-family and commercial real estate loans are reviewed by the Bank's loan
committee. In addition, the Bank's underwriting procedures require verification
of the borrower's credit history, income and financial statements, banking
relationships, references and income projections for the property. The Bank
obtains personal guarantees on these loans.
At April 30, 1997, the Bank's largest commercial real estate or
multi-family loan outstanding totaled $729,000 and was secured by a six-unit
office building located in Chicago, Illinois. The loan was performing in
accordance with its terms as of that date.
Multi-family and commercial real estate loans may present a higher
level of risk than loans secured by one- to four-family residences. This greater
risk is due to several factors, including the concentration of principal in a
limited number of loans and borrowers, the effects of general economic
conditions on income producing properties and the increased difficulty of
evaluating and monitoring these types of loans.
68
<PAGE>
Consumer Lending. Management believes that offering consumer loan
products helps to expand the Bank's customer base and to create stronger ties to
its existing customer base. In addition, because consumer loans generally have
shorter terms to maturity and carry higher rates of interest than do residential
mortgage loans, they can be valuable asset/liability management tools. The Bank
originates a variety of different types of consumer loans, including home equity
lines of credit, automobile and deposit account loans for household and personal
purposes. Due to the tax advantages to the borrower of home equity lines of
credit, the Bank has focused its recent consumer lending activities on home
equity lending. At April 30, 1997 consumer loans totaled $5.6 million or 3.32%
of total loans outstanding.
Consumer loan terms vary according to the type and value of collateral,
length of contract and creditworthiness of the borrower. Other than the home
equity lines of credit, the Bank's consumer loans are made at fixed interest
rates, with terms of up to five years.
The Bank's home equity lines of credit are written so that the total
commitment amount, when combined with the balance of the first mortgage lien,
may not exceed 75% of the appraised value of the property. These loans are
written with fixed terms of up to five years and carry interest rates that float
with the prime rate of interest. At April 30, 1997, the Bank's home equity lines
of credit totaled $4.0 million outstanding, or 2.37% of the Bank's total loan
portfolio.
The underwriting standards employed by the Bank for consumer loans
include a determination of the applicant's payment history on other debts and
ability to meet existing obligations and payments on the proposed loan. Although
creditworthiness of the applicant is of primary consideration, the underwriting
process also includes a comparison of the value of the security, if any, in
relation to the proposed loan amount. Consumer loans may entail greater credit
risk than do residential mortgage loans, particularly in the case of consumer
loans which are unsecured or are secured by rapidly depreciable assets, such as
automobiles. In such cases, any repossessed collateral for a defaulted consumer
loan may not provide an adequate source of repayment of the outstanding loan
balance as a result of the greater likelihood of damage, loss or depreciation.
In addition, consumer loan collections are dependent on the borrower's
continuing financial stability, and thus are more likely to be affected by
adverse personal circumstances. Furthermore, the application of various federal
and state laws, including bankruptcy and insolvency laws, may limit the amount
which can be recovered on such loans.
Originations of Loans
Real estate loans are originated by First Security's staff through
referrals from existing customers or real estate agents.
The Bank's ability to originate loans is dependent upon customer demand
for loans in its market and to a lesser extent, customer service and marketing
efforts. Demand is affected by both the local economy and the interest rate
69
<PAGE>
environment. As a result of the strong real estate market in the Bank's primary
market areas and its emphasis on customer service and community outreach, the
Bank has experienced significant loan growth in recent years. See "-- Market
Area." Under current policy, all loans originated by First Security are retained
in the Bank's portfolio. See "-- One- to Four- Family Residential Lending" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Asset/Liability Management."
In order to supplement loan originations, the Bank has acquired a
substantial amount of mortgage-backed and other securities which are held,
depending on the investment intent, in the "held-to-maturity" or
"available-for-sale" portfolios. See "Investment Activities - Mortgage-Backed
and Related Securities" and Note 2 to the Notes to Financial Statements. In
addition, depending on market conditions, the Bank may also consider the
purchase of residential loans from other lenders, although it has not done so
since 1994.
As a reflection of the Bank's emphasis on customer service, the Bank
has not sold loans in the past and does not intend to do so in the future.
The following table shows the loan origination, purchase and repayment
activities of the Bank for the periods indicated.
<TABLE>
<CAPTION>
Four Months Ended Year Ended
April 30, December 31,
------------------------ --------------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C>
Originations by type:
Adjustable rate:
Real estate - one- to four-family ............... $ 126 $ 368 $ 3,067 $ 1,682 $ 9,521
-------- -------- -------- -------- --------
Total adjustable-rate ..................... 126 368 3,067 1,682 9,521
-------- -------- -------- -------- --------
Fixed rate:
Real estate - one- to four-family ............... 10,727 10,615 34,696 20,024 21,893
- multi-family .................. 1,321 1,525 4,329 1,921 1,664
- commercial ..................... -- 492 682 1,215 5,708
Non-real estate - consumer ...................... 544 1,072 2,039 1,824 1,434
Loan secured by leases ........................ -- 500 500 750 748
-------- -------- -------- -------- --------
Total fixed-rate .......................... 12,592 14,204 42,246 25,734 31,447
-------- -------- -------- -------- --------
Total loans originated .................... 12,718 14,572 45,313 27,416 40,968
-------- -------- -------- -------- --------
Purchases:
Real estate - one- to four-family ............... -- -- -- -- 13,232
-------- -------- -------- -------- --------
Total loans purchased ..................... -- -- -- -- 13,232
-------- -------- -------- -------- --------
Principal repayments ............................... (10,000) (11,074) (25,988) (19,050) (23,892)
-------- -------- -------- -------- --------
Total reductions ........................... (10,000) (11,074) (25,988) (19,050) (23,892)
-------- -------- -------- -------- --------
Increase (decrease) in other
items, net ..................................... (152) 26 (543) (7) (47)
-------- -------- -------- -------- --------
Net increase ............................... $ 2,566 $ 3,524 $ 18,782 $ 8,359 $ 30,261
======== ======== ======== ======== ========
</TABLE>
70
<PAGE>
Delinquencies and Non-Performing Assets
Delinquency Procedures. When a borrower fails to make a required
payment on a loan, the Bank attempts to cure the delinquency by contacting the
borrower. Generally, Bank personnel work with the delinquent borrower on a case
by case basis to solve the delinquency. Generally, a late notice is sent on all
delinquent loans followed by a phone call after the thirtieth day of
delinquency. Additional written and verbal contacts may be made with the
borrower between 30 and 60 days after the due date. If the loan is contractually
delinquent for 90 days, the Bank may institute appropriate action to foreclose
on the property. Generally, after 120 days, foreclosure procedures are
initiated. If foreclosed, the property is sold at public sale and may be
purchased by the Bank.
Real estate acquired by First Security as a result of foreclosure or by
deed in lieu of foreclosure is classified as real estate owned until it is sold.
When property is acquired by foreclosure or deed in lieu of foreclosure, it is
recorded at the lower of cost or fair value less estimated selling costs. After
acquisition, all costs incurred in maintaining the property are expensed. Costs
relating to the development and improvement of the property, however, are
capitalized.
71
<PAGE>
The following table sets forth the Bank's loan delinquencies by type,
by amount and by percentage of type at April 30, 1997.
<TABLE>
<CAPTION>
Loans Delinquent For:
----------------------------------------------------------------- Total Loans Delinquent
60-89 Days 90 Days and Over 60 Days or More
---------------------------- ------------------------------ -----------------------------
Percent Percent Percent
of Loan of Loan of Loan
Number Amount Category Number Amount Category Number Amount Category
------ ------ -------- ------ ------ -------- ------ ------ --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
One- to four-
family .................. 9 $ 352 .26% 11 $ 545 .40% 20 $ 897 .66%
Multi-family ............. -- -- -- 1 14 .14 1 14 .14
Commercial ............... -- -- -- 6 838 5.43 6 838 5.43
Consumer ................... -- -- -- 12 22 .39 12 22 .39
------ ------ ---- ------ ---- ----
Total ...................... 9 $ 352 .21% 30 $1,419 .84% 39 $1,771 1.05%
====== ====== ==== ====== ==== =====
</TABLE>
72
<PAGE>
Classification of Assets. Federal regulations require that each savings
institution classify its own assets on a regular basis. In addition, in
connection with examinations of savings institutions, OTS and FDIC examiners
have authority to identify problem assets and, if appropriate, require them to
be classified. There are three classifications for problem assets: Substandard,
Doubtful and Loss. Substandard assets have one or more defined weaknesses and
are characterized by the distinct possibility that the Bank will sustain some
loss if the deficiencies are not corrected. Doubtful assets have the weaknesses
of Substandard assets, with the additional characteristics that the weaknesses
make collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a high possibility of loss. An
asset classified Loss is considered uncollectible and of such little value that
continuance as an asset on the balance sheet of the institution is not
warranted. Assets classified as Substandard or Doubtful require the institution
to establish prudent general allowances for loan losses. If an asset or portion
thereof is classified as a loss, the institution charges off such amount against
the loan loss allowance. If an institution does not agree with an examiner's
classification of an asset, it may appeal this determination to the District
Director of the OTS.
On the basis of management's review of its assets, at April 30, 1997,
the Bank had classified a total of $2.3 million of its loan and other assets as
follows:
At
April 30,
1997
----
(In Thousands)
Substandard........................................... $1,027
Doubtful assets....................................... 1,231
Loss assets........................................... ---
---------
Total........................................... 2,258
=======
General loss allowance................................ 1,666
=======
Specific loss allowance............................... ---
=========
Charge-offs, net...................................... 428
========
First Security's classified assets consist of the non-performing loans
referred to below.
73
<PAGE>
Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Bank's loan portfolio. Accrued
interest on loans delinquent more than 90 days is reversed out of income and
credited to an interest reserve account which offsets the amount of capitalized
interest in loans receivable. See Note 1 of the Notes to Consolidated Financial
Statements. Foreclosed assets include assets acquired in settlement of loans.
<TABLE>
<CAPTION>
December 31,
April 30, -------------------------------------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Non-accruing loans:
One- to four-family ...................................... $ 9 $ 9 $ 9 $ 41 $ -- $ --
Commercial real estate ................................... -- -- -- 254 -- --
------ ------ ------ ------ ------ ------
Total ............................................... 9 9 9 295 -- --
Accruing loans delinquent more than 90 days:
One- to four-family ...................................... 536 1,111 971 500 985 1,726
Multi-family ............................................. 14 180 367 330 16 62
Commercial real estate ................................... 625 882 749 257 887 203
Consumer ................................................. 235 226 189 43 11 181
------ ------ ------ ------ ------ ------
Total ............................................... 1,410 2,399 2,276 1,130 1,899 2,172
Foreclosed assets:
One- to four-family ...................................... -- 40 -- -- -- --
Commercial real estate ................................... -- -- 499 207 96 170
------
Total ............................................... -- 40 499 207 96 170
Non-performing leases(1) ................................... 839 1,272 -- -- -- --
------ ------ ------ ------ ------ ------
Total non-performing assets ................................ $2,258 $3,720 $2,784 $1,632 $1,995 $2,342
====== ====== ====== ====== ====== ======
Total as a percentage of total assets ...................... 0.87% 1.44% 1.11% 0.72% 1.05% 1.32%
====== ====== ====== ====== ====== ======
- -------------
<FN>
(1) See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Comparison of Operating Results for the Four
Months Ended April 30, 1997 and April 30, 1996 -- Provision for Loan
Losses" for a discussion of the Bank's Bennett Funding leases.
</FN>
</TABLE>
For the year ended December 31, 1996 and for the four months ended
April 30, 1997, gross interest income (less additions to the interest reserve)
which would have been recorded had the non-accruing loans (and accruing loans
delinquent more than 90 days) been current in accordance with their original
terms amounted to $93,000 and $94,000, respectively. The amounts that were
included in interest income on non-accruing loans were $0 and $0 for the year
ended December 31, 1996, and for the four months ended April 30, 1997,
respectively.
Other Loans of Concern. In addition to the non-performing assets set
forth in the table above, as of April 30, 1997, there were no other loans with
respect to which known information about the possible credit problems of the
borrowers or the cash flows of the security properties have caused management to
have concerns as to the ability of the borrowers to comply with present loan
repayment terms and which may result in the future inclusion of such items in
the non-performing asset categories.
Management considers the Bank's non-performing and "of concern" assets
in establishing its allowance for loan losses.
74
<PAGE>
The following table sets forth an analysis of the Bank's allowance for
loan losses.
<TABLE>
<CAPTION>
Four Months
Ended
April 30, Year Ended December 31,
---------------- -------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at beginning of period .................. $ 1,520 $ 885 $ 885 $ 792 $ 608 $ 360 $ 171
Charge-offs:
One- to four-family ........................... -- -- -- -- -- -- --
Multi-family .................................. -- -- -- -- -- -- --
Commercial real estate ........................ -- 50 68 28 -- -- --
Construction or development ................... -- -- -- -- -- -- --
Consumer ...................................... -- -- 3 15 -- 1 --
Leases ........................................ 432 -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
432 50 71 43 -- 1 --
Recoveries:
One- to four-family ........................... -- -- -- -- -- -- --
Multi-family .................................. -- -- -- -- -- -- --
Commercial real estate ........................ -- -- -- -- -- -- --
Construction or development ................... -- -- -- -- -- -- --
Consumer ...................................... 4 -- -- -- 2 -- 5
Leases ........................................ -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
4 -- -- -- 2 -- 5
et (charge-offs) recoveries .................... (428) (50) (71) (43) 2 (1) 5
ditions charged to operations ................. 574 42 706 136 182 249 184
------- ------- ------- ------- ------- ------- -------
Balance at end of period ........................ $ 1,666 $ 877 $ 1,520 $ 885 $ 792 $ 608 $ 360
======= ======= ======= ======= ======= ======= =======
Ratio of net charge-offs
(recoveries) during the period
to average loans outstanding during
the period .................................... 0.26% 0.03% 0.05% (0.03)% ---% ---% ---%
======= ======= ======= ======= ======= ======= =======
Ratio of net charge-offs
(recoveries) during the period to
average non-performing assets .................. 18.95% 1.68% 2.15% (1.88)% (0.10)% 0.04% 0.31%
======= ======= ======= ======= ======= ======= =======
</TABLE>
75
<PAGE>
The distribution of the Bank's allowance for losses on loans
at the dates indicated is summarized as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
April 30, 1997 1996
------------------------------------- --------------------------------------
Percent Percent
of Loans of Loans
Amount Loan in Each Amount Loan in Each
of Loan Amounts Category of Loan Amounts Category
Loss by of Total Loss by of Total
Allowance Category Loans Allowance Category Loans
--------- -------- ----- --------- -------- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
One- to four-family ..................... $ 419 $137,479 81.32% $355 $134,971 81.14%
Multi-family ............................ 50 9,708 5.74 56 9,374 5.63
Commercial real estate .................. 311 15,425 9.12 245 15,651 9.41
Construction or
development ............................ -- -- -- -- -- --
Consumer ................................ 69 5,621 3.32 68 5,086 3.06
Loans secured by
leases ................................ 420 839 0.50 318 1,272 0.76
Unallocated ............................. 397 -- -- 478 -- --
-------- -------- ------ -------- -------- -------
Total .............................. $ 1,666 $169,072 100.00% $1,520 $166,354 100.00%
======== ======== ======= ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------------------------
1995 1994
------------------------------------- --------------------------------------
Percent Percent
of Loans of Loans
Amount Loan in Each Amount Loan in Each
of Loan Amounts Category of Loan Amounts Category
Loss by of Total Loss by of Total
Allowance Category Loans Allowance Category Loans
--------- -------- ----- --------- -------- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
One- to four-family ................. $ 310 $117,379 79.83% $ 284 $110,280 79.53%
Multi-family ........................ 56 7,926 5.39 52 7,731 5.58
Commercial real estate .............. 199 15,127 10.29 233 14,344 10.34
Construction or
development ........................ -- -- -- -- -- --
Consumer ............................ 70 5,838 3.97 71 5,860 4.23
Loans secured by
leases ............................ 76 759 0.52 55 448 0.32
Unallocated ......................... 174 -- -- 97 -- --
-------- -------- ------- -------- -------- ------
Total .......................... $ 885 $147,029 100.00% $ 792 $138,663 100.00%
======== ======== ======= ======== ======== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------------------------
1993 1992
------------------------------------- --------------------------------------
Percent Percent
of Loans of Loans
Amount Loan in Each Amount Loan in Each
of Loan Amounts Category of Loan Amounts Category
Loss by of Total Loss by of Total
Allowance Category Loans Allowance Category Loans
--------- -------- ----- --------- -------- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
One- to four-family ................ $ 225 $ 84,401 77.89% $165 $ 76,102 75.90%
Multi-family ....................... 45 7,632 7.04 20 6,799 6.78
Commercial real estate ............. 206 10,820 9.99 105 11,198 11.16
Construction or
development ....................... 15 185 0.17 15 429 0.43
Consumer ........................... 66 5,317 4.91 45 5,742 5.73
Loans secured by
leases ........................... -- -- -- -- -- --
Unallocated ........................ 51 -- -- 10 -- --
-------- -------- ------- ----- -------- ------
Total ......................... $ 608 $108,355 100.00% $360 $100,270 100.00%
======== ======== ======= ===== ======== ======
</TABLE>
76
<PAGE>
The allowance for loan losses is established through a provision for
loan losses charged to earnings based on management's evaluation of the risk
inherent in its entire loan portfolio. Such evaluation, which includes a review
of all loans of which full collectibility may not be reasonably assured,
considers the market value of the underlying collateral, growth and composition
of the loan portfolio, delinquency trends, adverse situations that may affect
the borrower's ability to repay, prevailing and projected economic conditions
and other factors that warrant recognition in providing for an adequate
allowance for loan losses. In determining the general reserves under these
policies, historical charge-offs and recoveries, changes in the mix and levels
of the various types of loans, net realizable values, the current and
prospective loan portfolio and current economic conditions are considered.
While management believes that it uses the best information available
to determine the allowance for loan losses, unforeseen economic and market
conditions could result in adjustments to the allowance for loan losses, and net
earnings could be significantly affected, if circumstances differ substantially
from the assumptions used in making the final determination.
Investment Activities
General. Generally, the investment policy of First Security is to
invest funds among categories of investments based upon the Bank's
asset/liability management policies, investment quality, loan and deposit
volume, liquidity needs and performance objectives. In accordance with the
Bank's asset/liability management policy, the Bank has recently focused a
significant part of its investment activities on instruments with terms to
repricing or maturity of five years or less.
First Security must maintain minimum levels of investments and other
assets that qualify as liquid assets under OTS regulations. Liquidity may
increase or decrease depending upon the availability of funds and comparative
yields on investments in relation to the return on loans. Historically, First
Security has maintained liquid assets at levels above the minimum requirements
imposed by the OTS regulations and above levels believed adequate to meet the
requirements of normal operations, including potential deposit outflows. At
April 30, 1997, First Security's liquidity ratio for regulatory purposes was
8.90%. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Asset/Liability Management" and "- Liquidity and Capital
Resources."
Prior to December 31, 1993, the Bank recorded its marketable equity
securities at the lower of cost or current market value and its remaining
investment securities at amortized cost. Unrealized declines in the market value
of marketable equity securities were reflected in the equity section of the
financial statements. Effective January 1, 1994, First Security adopted SFAS
115. As required by SFAS 115, securities are classified into three categories:
trading, held-to-maturity and available-for-sale. Securities that are bought and
held principally for the purpose of selling them in the near term are classified
as trading securities and are reported at fair value with unrealized gains and
losses included in trading account activities in the statement of operations.
Securities that First Security has the positive intent and ability to hold to
maturity are classified as held-to-maturity and reported at amortized cost. All
other securities not classified as trading or held-to-maturity are classified as
available-for-sale. At April 30, 1997, First Security had no securities which
were classified as trading and $27.5 million of mortgage-backed and investment
securities classified as
77
<PAGE>
available-for-sale. Available-for-sale securities are reported at fair value
with unrealized gains and losses included, on an after-tax basis, in a separate
component of retained earnings.
Mortgage-Backed and Related Securities. In order to supplement its
lending activities and achieve its asset/liability management goals, the Bank
invests in mortgage-backed and related securities. As of April 30, 1997, all of
the mortgage-backed and related securities owned by the Bank are issued, insured
or guaranteed either directly or indirectly by a federal agency or are rated
"AAA" by a nationally recognized credit rating agency. However, it should be
noted that, while a (direct or indirect) federal guarantee or a high credit
rating may indicate a high degree of protection against default, they do not
indicate that the securities will be protected from declines in value based on
changes in interest rates or prepayment speeds.
Consistent with its asset/liability management strategy, at April 30,
1997, $18.6 million, or 45.4% of First Security's mortgage-backed and related
securities were available-for-sale. In addition, on the same date, $17.1 million
or 41.7% of the Bank's mortgage-backed and related securities carried adjustable
rates. Finally, as discussed further below, at April 30, 1997, the Bank had $1.8
million of collateralized mortgage obligations ("CMOs") with anticipated average
lives of five years or less. For additional information regarding the Bank's
mortgage-backed securities portfolio, see Note 2 of the Notes to the
Consolidated Financial Statements.
The Bank's CMOs and real estate mortgage investment conduits ("REMICs")
are securities derived by reallocating the cash flows from mortgage-backed
securities or pools of mortgage loans in order to create multiple classes, or
tranches, of securities with coupon rates and average lives that differ from the
underlying collateral as a whole. The terms to maturity of any particular
tranche is dependent upon the prepayment speed of the underlying collateral as
well as the structure of the particular CMO or REMIC. Although a significant
proportion of the Bank's CMOs and REMICs are interests in tranches which have
been structured (through the use of cash flow priority and "support" tranches)
to give somewhat more predictable cash flows, the cash flow and hence the value
of CMOs and REMICs is subject to change.
The Bank invests in CMOs and REMICs as an alternative to mortgage loans
and conventional mortgage-backed securities as part of its asset/liability
management strategy. Management believes that, depending on market conditions,
CMOs and REMICs may represent attractive investment alternatives relative to
other investments due to the wide variety of maturity and repayment options
available. In particular, the Bank has from time to time concluded that short
and intermediate duration CMOs and REMICs (five year or less average life) often
represent a better combination of rate and duration than adjustable rate
mortgage-backed securities.
To assess price volatility, the Federal Financial Institutions
Examination Council ("FFIEC") adopted a policy in 1992 which requires an annual
"stress" test of mortgage derivative securities. This policy, which has been
adopted by the OTS, requires the Bank to annually test its CMOs and other
mortgage-related securities to determine whether they are high-risk or
nonhigh-risk securities. Mortgage derivative products with an average life or
price volatility in excess of a benchmark 30-year, mortgage-backed, pass-through
security are considered high-risk mortgage securities. Under the policy, savings
institutions may generally only invest in low-risk mortgage securities in order
to reduce interest rate risk. In addition, all high-risk mortgage securities
acquired after February 9, 1992 which are classified as high risk at the time of
purchase must be carried in the institution's
78
<PAGE>
trading account or as assets available-for-sale. At March 31, 1997, the most
recent quarterly test date, none of the Bank's mortgage-backed securities were
classified as "high-risk."
79
<PAGE>
The following table sets forth the composition of the Bank's
mortgage-backed securities at the dates indicated.
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------------------
April 30, 1997 1996 1995 1994
------------------ -------------------- ------------------- --------------------
Carrying % of Carrying % of Carrying % of Carrying % of
Value Total Value Total Value Total Value Total
----- ----- ----- ----- ----- ----- ----- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage-backed securities
held-to-maturity:
GNMA ............................. $ 8,896 21.69% $ 9,226 21.05% $ 5,142 11.39% $ 7,380 17.32%
FNMA ............................. 3,016 7.36 3,294 7.51 4,526 10.02 8,508 19.96
FHLMC ............................ 5,655 13.79 6,280 14.33 9,806 21.71 19,234 45.13
CMOs/REMICs ...................... 4,822 11.76 5,309 12.11 5,646 12.50 7,499 17.59
------- ------ ------- ------ ------- ------ ------- ------
22,389 54.60 24,109 55.00 25,120 55.62 42,621 100.00
Mortgage-backed securities
available-for-sale:
GNMA ............................. 3,277 7.99 3,425 7.81 2,924 6.47 -- --
FNMA ............................. 6,197 15.11 6,572 14.99 6,383 14.14 -- --
FHLMC ............................ 8,400 20.49 8,985 20.50 9,992 22.12 -- --
CMOs/REMICs ...................... 742 1.81 745 1.70 745 1.65 -- --
------- ------ ------- ------ ------- ------ ------- ------
18,616 45.40 19,727 45.00 20,044 44.38 -- --
------- ------ ------- ------ ------- ------ ------- ------
Total mortgage-backed
securities .................. $41,005 100.00% $43,836 100.00% $45,164 100.00% $42,621 100.00%
======= ====== ======= ====== ======= ====== ======= ======
</TABLE>
80
<PAGE>
The following table sets forth the contractual maturities of the Bank's
mortgage-backed securities at April 30, 1997.
<TABLE>
<CAPTION>
April 30,
Due in 1997
---------------------------------------------------------------------- -----------------------------
6 Months 6 Months 1 to 3 to 5 5 to 10 10 to 20 Over 20 Amortized Carrying
or Less to 1 Year 3 Years Years Years Years Years Cost Value
------- --------- ------- ----- ----- ----- ----- ---- -----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal Home Loan
Mortgage Corporation ..... $ -- $458 $ 1 $ 172 $ 1,785 $ 3,256 $ 8,598 $14,270 $14,055
Federal National
Mortgage Association ..... -- -- 386 -- 1,470 1,179 6,344 9,379 9,213
Government National
Mortgage Association ..... -- -- -- -- 522 718 10,928 12,168 12,173
CMOs and REMICs ............ -- -- 780 -- 1,364 1,244 2,147 5,535 5,564
------ ------- ------- ------- ------- ------- ------- ------- -------
Total ................. $ -- $458 $ 1,167 $ 172 $ 5,141 $ 6,397 $28,017 $41,352 $41,005
====== ======= ======= ======== ======= ======= ======= ======= =======
</TABLE>
81
<PAGE>
As of April 30, 1997, the Bank did not have any mortgage-backed
securities in excess of 10% of retained earnings except for FNMA, FHLMC and GNMA
issues, amounting to $9.2 million, $14.1 million and $12.2 million,
respectively.
The market values of a portion of the Bank's mortgage-backed securities
held-to-maturity have been from time to time lower than their carrying values.
However, for financial reporting purposes, such declines in value are considered
to be temporary in nature since they have been due to changes in interest rates
rather than credit concerns. See Note 2 of the Notes to the Consolidated
Financial Statements.
The following table shows mortgage-backed securities purchase, sale and
repayment activities of the Bank for the periods indicated.
<TABLE>
<CAPTION>
Four Months Ended Year Ended
April 30, December 31,
------------------------- --------------------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C>
Purchases:
Adjustable-rate .............................. $ -- $ 2,396 $ 2,396 $ 8,197 $ 1,460
Fixed-rate ................................... -- -- 4,583 1,498 3,830
CMOs ......................................... -- 510 510 -- 3,446
-------- -------- -------- -------- --------
Total purchases ............................. -- 2,906 7,489 9,695 8,736
Principal repayments ......................... (2,872) (1,169) (8,639) (6,999) (11,211)
Discount/premium net change .................. (2) -- 16 (39) (349)
Fair value net change ........................ (39) (76) (194) (114) --
-------- -------- -------- -------- --------
Net increase (decrease) ..................... $ (2,913) $ 1,661 $ (1,328) $ 2,543 $ (2,824)
======== ======== ======== ======== ========
</TABLE>
The Bank's holdings of mortgage-backed securities are a significant
portion of the Bank's total assets. Since pass-through mortgage-backed
securities generally carry a yield approximately 50 to 100 basis points below
that of the corresponding type of residential loan (due to the implied federal
agency guarantee fee and the retention of a servicing spread by the loan
servicer), and the Bank's CMOs and REMICs also carry lower yields (due to the
implied federal agency guarantee and because such securities tend to have
shorter actual durations than 30 year loans), in the event that the proportion
of the Bank's assets consisting of mortgage-backed and related securities
increases, the Bank's asset yields could be somewhat adversely affected. The
Bank will evaluate mortgage-backed and related securities purchases in the
future based on its asset/liability objectives, market conditions and
alternative investment opportunities.
Other Securities. Federally chartered savings institutions have the
authority to invest in various types of liquid assets, including United States
Treasury obligations, securities of various federal agencies, certain
certificates of deposit of insured banks and savings institutions, certain
bankers' acceptances, repurchase agreements and federal funds. Subject to
various restrictions, federally chartered savings institutions may also invest
their assets in commercial paper, investment grade corporate debt securities and
mutual funds whose assets conform to the investments that a federally chartered
savings institution is otherwise authorized to make directly.
82
<PAGE>
In order to complement its lending and mortgage-backed securities, and
to increase its holding of short and intermediate term assets, the Bank invests
in liquid investments and in high-quality investments, such as U.S. Treasury and
agency obligations. At April 30, 1997 and December 31, 1996, the Bank's
securities portfolio totaled $37.2 million and $34.8 million, respectively. At
April 30, 1997, the Bank did not own any other securities of a single issuer
which exceeded 10% of the Bank's retained earnings, other than federal agency
obligations. See Note 2 of the Notes to the Consolidated Financial Statements
for additional information regarding the Bank's other securities portfolio.
83
<PAGE>
The following table sets forth the composition of the Bank's other
securities and other earning assets at the dates indicated.
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------
April 30, 1997 1996 1995 1994
--------------- ------------------- ----------------- -----------------------
Carrying % of Carrying % of Carrying % of Carrying % of
Value Total Value Total Value Total Value Total
----- ----- ----- ----- ----- ----- ----- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities held-to-maturity:
Federal agency obligations ............ $22,801 61.33% $20,320 58.43% $15,445 45.02% $12,452 37.07%
Municipal bonds ....................... 5,207 14.01 5,208 14.98 4,768 13.90 5,120 15.25
Corporate Notes ....................... 251 0.67 251 0.72 353 1.02 354 1.05
------- --------- ------- --------- ------- ---------- ------- ------
28,259 76.01 25,779 74.13 20,566 59.94 17,926 53.37
Securities available-for sale:
US government securities .............. 3,321 8.93 3,350 9.63 7,936 23.13 10,203 30.38
Mutual Funds .......................... 5,598 15.06 5,645 16.23 5,737 16.72 5,389 16.04
Other Equity .......................... -- -- 2 0.01 70 0.21 70 0.21
------- --------- ------- --------- ------- ---------- ------- ------
8,919 23.99 8,997 25.87 13,743 40.06 15,662 46.63
------- --------- ------- --------- ------- ---------- ------- ------
Total securities ................. $37,178 100.00% $34,776 100.00% $34,309 100.00% $33,588 100.00%
======= ========= ======= ========= ======= ========== ======= ======
Average remaining life of
securities: .......................... _______ _______ _______ _______
Other earning assets:
Interest-earning deposits
with banks ........................... $ 904 18.24% $ 2,713 44.58% $ 9,490 71.12% $ 1,588 38.68%
FHLB stock ............................ 1,852 37.37 1,673 27.49 1,553 11.64 1,318 32.10
Federal funds sold .................... 2,000 40.35 1,500 24.65 2,100 15.74 1,000 24.35
Time deposit in other
financial institutions ............... 200 4.04 200 3.28 200 1.50 200 4.87
------- --------- ------- --------- ------- ---------- ------- ------
Total ........................... $ 4,956 100.00% $6,086 100.00% $13,343 100.00% $4,106 100.00%
======= ========= ======= ========= ======= ========== ======= ======
</TABLE>
84
<PAGE>
The composition and maturities of the other securities portfolio,
excluding FHLB stock, are indicated in the following table.
<TABLE>
<CAPTION>
April 30, 1997
---------------------------------------------------------------------------
Less Than 1 to 5 5 to 10 Over
1 Year Years Years 10 years Total Securities
------ ----- ----- -------- ----------------------
Amortized Amortized Amortized Amortized Amortized Fair
Cost Cost Cost Cost Cost Value
---- ---- ---- ---- ---- -----
Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
US government securities ........... $ 999 $ 1,991 $ -- 259 $ 3,249 $ 3,321
Federal agency obligations(1) ...... -- 2,444 15,347 5,010 22,801 22,801(1)
Municipal bonds .................... 100 1,448 2,175 1,484 5,207 5,221
Corporate notes .................... 250 -- -- -- 250 251
------- ------- ------- ------ ------- -------
Total securities ................... $ 1,349 $ 5,883 $17,522 $ 6,753 $31,507 $31,594
======= ======= ======= ======= ======= =======
Weighted average yield ............. 6.89% 6.31% 6.76% 7.20% 6.74%
======= ======= ======= ======= =======
- ----------------
<FN>
(1) $26 million are callable securities.
</FN>
</TABLE>
See Note 2 of the Notes to the Consolidated Financial Statements for a
discussion of the Bank's securities portfolio.
Sources of Funds
General. The Bank's primary sources of funds are deposits, payments
(including prepayments) of loan principal, interest earned on loans and
securities, repayments of securities, borrowings and funds provided from
operations.
Deposits. First Security offers deposit accounts having a wide range of
interest rates and terms. The Bank's deposits consist of passbook, NOW, money
market and various certificate accounts. The Bank relies primarily on
competitive pricing and customer service to attract and retain these deposits.
The Bank's customers may access their accounts through any of the Bank's five
offices and five automated teller machines ("ATMs"). In addition, the Bank's
customers may access their accounts through several nationwide ATM networks. The
Bank only solicits deposits in its market area and does not currently use
brokers to obtain deposits.
The Bank manages the pricing of its deposits in keeping with its
asset/liability management, profitability and growth objectives. The variety of
deposit accounts offered by the Bank has allowed it to be competitive in
obtaining funds and to respond with flexibility to changes in consumer demand.
However, as some customers have become more interest rate conscious, the Bank
has become more susceptible to short-term fluctuations in its certificate of
deposit flows.
Management believes that the "core" portion of the Bank's regular
savings, NOW and money market accounts, which amounted to $90.8 million or 41.4%
of total deposits at April 30, 1997, can have a lower cost and be more resistant
to interest rate changes (and competing non-depository financial products) than
certificate accounts. The Bank utilizes customer service, community outreach and
marketing initiatives in an effort to build and maintain the volume of such
deposits. However, there can be no assurance as to whether the Bank will be able
to maintain or increase its core deposits in the future.
85
<PAGE>
The table below sets forth the Bank's deposit flows for the periods
indicated.
<TABLE>
<CAPTION>
Four Months Ended Year Ended
April 30, December 31,
----------------------------- ----------------------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Opening balance...................... $ 219,505 $ 209,387 $ 209,387 $ 195,875 $ 161,715
Deposits............................. 122,486 114,416 347,280 348,404 344,471
Withdrawals.......................... (125,591) (113,652) (346,192) (343,039) (316,340)
Interest credited.................... 2,587 2,602 9,030 8,147 6,029
----------- ---------- ---------- ---------- ----------
Ending balance....................... $ 218,987 $212,753 $219,505 $209,387 $195,875
========= ======== ======== ======== ========
Net increase (decrease).............. $ (518) $ 3,366 $ 10,118 $ 13,512 $ 34,160
=========== ========== ========= ========= =========
Percent increase (decrease).......... (0.24)% 1.61% 4.83% 6.90% 21.12%
===== ==== ==== ==== =====
</TABLE>
86
<PAGE>
The following table sets forth the dollar amount of savings deposits in
the various types of deposit programs offered by the Bank as of the dates
indicated.
<TABLE>
<CAPTION>
April 30, December 31,
------------------------------------ ---------------------------------------------------------
1997 1996 1996 1995 1994
----------------- ---------------- ---------------- ---------------- -----------------
Percent Percent Percent Percent Percent
Amount of Total Amount of Total Amount of Total Amount of Total Amount of Total
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Transactions and
Savings Deposits
Passbook Accounts 3.00% ....... $ 71,203 32.5% $ 69,509 32.7% $ 71,167 32.4% $ 69,631 33.3% $ 73,548 37.5%
NOW Accounts 2.23% ............ 14,505 6.6 13,077 6.1 14,509 6.6 13,262 6.3 11,673 6.0
Money Market Accounts 3.06% ... 5,137 2.3 5,488 2.6 5,107 2.3 5,612 2.7 6,928 3.5
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total Non-Certificates ........ 90,845 41.4 88,074 41.4 90,783 41.3 88,505 42.3 92,149 47.0
Certificates:
0.00 - 3.99% .................. -- -- 35 -- 119 0.1 310 0.1 20,075 10.2
4.00 - 5.99% .................. 114,663 52.4 106,459 50.0 116,397 53.0 87,775 41.9 76,704 39.2
6.00 - 7.99% .................. 13,365 6.1 18,023 8.5 12,094 5.5 32,629 15.6 6,238 3.2
8.00 - 9.00% .................. 114 0.1 162 0.1 112 0.1 168 0.1 709 0.4
-------- ----- -------- ----- -------- ----- ------ ----- ------ -----
Total Certificates ............ 128,142 58.6 124,679 58.6 128,722 58.7 120,882 57.7 103,726 53.0
-------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Total Deposits ................ $218,987 100.0% $212,753 100.0% $219,505 100.0% $209,387 100.0% $195,875 100.0%
======== ===== ======== ===== ======== ===== ======= ===== ======= =====
- -------
(1) Includes $4.1 million from not for profit organizations.
</TABLE>
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<PAGE>
The following table shows rate and maturity information for the Bank's
certificates of deposit as of April 30, 1997.
<TABLE>
<CAPTION>
Less Than 1 to 2 2 to 3 3 to 4 4 to 5 Greater
1 Year Years Years Years Years than 5 Years Total
------ ----- ----- ----- ----- ------------ -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
4.00 - 4.99%.......... $ 8,774 $ 18 $ --- $ --- $ --- $ --- $ 8,792
5.00 - 5.99%.......... 91,255 10,136 1,910 961 1,609 --- 105,871
6.00 - 6.99%.......... 1,888 95 4,433 1,671 2,695 --- 10,782
7.00 - 7.99%.......... 229 --- 1,629 102 623 --- 2,583
8.00 - 8.99%.......... 18 46 --- --- --- 50 114
---------- ---------- --------- --------- --------- ------- -----------
$102,164 $10,295 $7,972 $2,734 $4,927 50 $128,142
======== ======= ====== ====== ====== ======= ========
</TABLE>
The following table indicates the amount of the Bank's certificates of
deposit and other deposits by time remaining until maturity as of April 30,
1997.
<TABLE>
<CAPTION>
Maturity
----------------------------------------------------------------
Over Over
3 Months 3 to 6 6 to 12 Over
or Less Months Months 12 Months Total
-------------- -------------- -------------- -------------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Certificates of deposit less than
$100,000................................... $30,123 $26,170 $22,571 $17,639 $ 96,503
Certificates of deposit $100,000
or more.................................... 10,033 7,876 5,391 8,339 31,639
-------- -------- -------- -------- --------
Total certificates of deposit.......... $40,156 $34,046 $27,962 $25,978 $128,142
======= ======= ======= ======= ========
</TABLE>
For additional information regarding the composition of the Bank's
deposits, see Note 7 of the Notes to the Consolidated Financial Statements.
Borrowings. First Security's other available sources of funds include
advances from the FHLB of Chicago and other borrowings. The Bank's FHLB advances
to date have primarily consisted of subsidized borrowings to fund special
housing programs. As a member of the FHLB of Chicago, the Bank is required to
own capital stock in the FHLB of Chicago and is authorized to apply for advances
from the FHLB of Chicago. Each FHLB credit program has its own interest rate,
which may be fixed or variable, and range of maturities. The FHLB of Chicago may
prescribe the acceptable uses for these advances, as well as limitations on the
size of the advances and repayment provisions. See Note 8 of the Notes to the
Consolidated Financial Statements.
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<PAGE>
The following table sets forth the maximum month-end balance and
average balance of FHLB advances for the periods indicated.
<TABLE>
<CAPTION>
Four Months Ended Year Ended
April 30, December 31,
----------------------- ---------------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Maximum Balance:
FHLB Advances............................. $7,500 $3,000 $4,000 $10,000 $3,000
Average Balance:
FHLB Advances............................. $5,400 $3,000 $3,333 $3,769 $2,846
Weighted average interest rate of
FHLB advances............................. 5.75% 5.17% 5.25% 5.25% 6.30%
</TABLE>
Subsidiary Activities
As a federally chartered savings bank, First Security is permitted by
OTS regulations to invest up to 2% of its assets in the stock of, or loans to,
service corporation subsidiaries, and may invest an additional 1% of its assets
in service corporations where such additional funds are used for inner-city or
community development purposes. In addition to investments in service
corporations, federal institutions are permitted to invest an unlimited amount
in operating subsidiaries engaged solely in activities which a federal savings
association may engage in directly.
At April 30, 1997, First Security had one wholly owned service
corporation, Western Security Corporation ("Western" or the "Subsidiary").
Western, an Illinois corporation, was incorporated November 1977 for the purpose
of offering customers and members of the general public credit, life, mortgage
and disability insurance. First Security's investment in Western was $47,000 as
of April 30, 1997. Western recognized net income (loss) of $(6,000) during the
four months ended April 30, 1997 and $3,000 during the year ended December 31,
1996.
Competition
First Security faces strong competition both in originating real estate
loans and in attracting deposits. Competition in originating loans comes
primarily from credit unions, mortgage bankers, commercial banks and other
savings institutions, which also make loans secured by real estate located in
the Bank's market area. First Security competes for loans principally on the
basis of the interest rates and loan fees it charges, the types of loans it
originates, community outreach and the quality of services it provides to
borrowers.
Competition for those deposits is principally from credit unions,
commercial banks, mutual funds, securities firms and other savings institutions
located in the same communities. The ability of the Bank to attract and retain
deposits depends on its ability to provide an investment opportunity that
satisfies the requirements of investors as to rate of return, liquidity, risk,
convenient locations and other factors. The Bank competes for these deposits by
offering competitive rates, convenient business hours, community outreach and a
customer oriented staff.
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<PAGE>
Properties
The following table sets forth information concerning the main office
and each branch office of the Bank at April 30, 1997. At April 30, 1997, the
Bank's premises had an aggregate net book value of approximately $3.8 million.
<TABLE>
<CAPTION>
Year Net Book Value
Acquired/ Owned or at
Location Established Leased April 30, 1997 Deposits
-------- ----------- ------ -------------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Main Office:
936 North Western Avenue 1964 Owned $1,340 $143,958
Chicago, Illinois 60622-4695
Branch Offices:
2166 Plum Grove Road 1977 Leased(1) 4 11,444
Rolling Meadows, Illinois 60008
820 N. Western Avenue 1983 Owned 257 2,266
Chicago, Illinois 60622
5670 N. Milwaukee Avenue 1993 Owned 1,197 11,321
Chicago, Illinois 60646
7918 Bustleton Avenue 1994 Owned 663 49,998
Philadelphia, Pennsylvania 19152
</TABLE>
- ---------
(1) The lease expires in July 2000.
The Bank believes that its current facilities are adequate to meet the
present and foreseeable future needs of the Bank and the Holding Company.
However, in the future, the Bank may consider the addition of one or more new
branches within the Chicago or Philadelphia areas.
The Bank's depositor and borrower customer files are maintained by an
independent data processing company. The net book value of the data processing
and computer equipment utilized by the Bank at April 30, 1997 was approximately
$110,700.
Legal Proceedings
From time to time, First Security is involved as plaintiff or defendant
in various legal proceedings arising in the normal course of its business. While
the ultimate outcome of these various legal proceedings cannot be predicted with
certainty, it is the opinion of management that the resolution of these legal
actions should not have a material effect on the Holding Company's and the
Bank's financial position or results of operations.
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<PAGE>
REGULATION
General
First Security is a federally chartered savings bank, the deposits of
which are federally insured and backed by the full faith and credit of the
United States Government. Accordingly, First Security is subject to broad
federal regulation and oversight extending to all its operations. First Security
is a member of the FHLB of Chicago and is subject to certain limited regulation
by the Board of Governors of the Federal Reserve System ("Federal Reserve
Board"). As the savings and loan holding company of First Security, the Holding
Company also is subject to federal regulation and oversight. The purpose of the
regulation of the Holding Company and other holding companies is to protect
subsidiary savings associations. First Security is a member of the Savings
Association Insurance Fund ("SAIF") and the deposits of First Security are
insured by the FDIC. As a result, the FDIC has certain regulatory and
examination authority over First Security.
Certain of these regulatory requirements and restrictions are discussed
below or elsewhere in this document.
Federal Regulation of Savings Associations
The OTS has extensive authority over the operations of savings
associations. As part of this authority, First Security is required to file
periodic reports with the OTS and is subject to periodic examinations by the OTS
and the FDIC. The last regular OTS and FDIC examinations of First Security were
as of June 30, 1996 and April 23 1990, respectively. Under agency scheduling
guidelines, it is likely that another examination will be initiated in the near
future. When these examinations are conducted by the OTS and the FDIC, the
examiners may require First Security to provide for higher general or specific
loan loss reserves. All savings associations are subject to a semi-annual
assessment, based upon the savings association's total assets, to fund the
operations of the OTS.
The OTS also has extensive enforcement authority over all savings
institutions and their holding companies, including First Security and the
Holding Company. This enforcement authority includes, among other things, the
ability to assess civil money penalties, to issue cease-and-desist or removal
orders and to initiate injunctive actions. In general, these enforcement actions
may be initiated for violations of laws and regulations and unsafe or unsound
practices. Other actions or inactions may provide the basis for enforcement
action, including misleading or untimely reports filed with the OTS. Except
under certain circumstances, public disclosure of final enforcement actions by
the OTS is required.
In addition, the investment, lending and branching authority of First
Security is prescribed by federal laws and it is prohibited from engaging in any
activities not permitted by such laws. For instance, no savings institution may
invest in non-investment grade corporate debt securities. In addition, the
permissible level of investment by federal associations in loans secured by
non-residential real property may not exceed 400% of total capital, except with
approval of the OTS. Federal savings associations are also generally authorized
to branch nationwide. First Security is in compliance with the noted
restrictions.
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<PAGE>
First Security's general permissible lending limit for
loans-to-one-borrower is equal to the greater of $500,000 or 15% of unimpaired
capital and surplus (except for loans fully secured by certain readily
marketable collateral, in which case this limit is increased to 25% of
unimpaired capital and surplus). At April 30, 1997, First Security's lending
limit under this restriction was $4.5 million. Assuming the sale of the minimum
number of shares in the Conversion at April 30, 1997, that limit would be
increased to $6.4 million. First Security is in compliance with the
loans-to-one-borrower limitation.
The OTS, as well as the other federal banking agencies, has adopted
guidelines establishing safety and soundness standards on such matters as loan
underwriting and documentation, internal controls and audit systems, interest
rate risk exposure and compensation and other employee benefits. Any institution
which fails to comply with these standards must submit a compliance plan. A
failure to submit a plan or to comply with an approved plan will subject the
institution to further enforcement action. The OTS and the other federal banking
agencies have also proposed additional guidelines on asset quality and earnings
standards. No assurance can be given as to whether or in what form the proposed
regulations will be adopted.
Insurance of Accounts and Regulation by the FDIC
First Security is a member of the SAIF, which is administered by the
FDIC. Deposits are insured up to applicable limits by the FDIC and such
insurance is backed by the full faith and credit of the United States
Government. As insurer, the FDIC imposes deposit insurance premiums and is
authorized to conduct examinations of and to require reporting by FDIC-insured
institutions. It also may prohibit any FDIC-insured institution from engaging in
any activity the FDIC determines by regulation or order to pose a serious risk
to the FDIC. The FDIC also has the authority to initiate enforcement actions
against savings associations, after giving the OTS an opportunity to take such
action, and may terminate the deposit insurance if it determines that the
institution has engaged in unsafe or unsound practices or is in an unsafe or
unsound condition.
The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured depository institutions are placed into one of
nine categories and assessed insurance premiums based upon their level of
capital and supervisory evaluation. Under the system, institutions classified as
well capitalized (i.e., a core capital ratio of at least 5%, a ratio of Tier 1
or core capital to risk-weighted assets ("Tier 1 risk-based capital") of at
least 6% and a risk-based capital ratio of at least 10%) and considered healthy
pay the lowest premium while institutions that are less than adequately
capitalized (i.e., core or Tier 1 risk-based capital ratios of less than 4% or a
risk-based capital ratio of less than 8%) and considered of substantial
supervisory concern pay the highest premium. Risk classification of all insured
institutions will be made by the FDIC for each semi-annual assessment period.
The FDIC is authorized to increase assessment rates, on a semiannual
basis, if it determines that the reserve ratio of the SAIF will be less than the
designated reserve ratio of 1.25% of SAIF-insured deposits. In setting these
increased assessments, the FDIC must seek to restore the reserve ratio to that
designated reserve level, or such higher reserve ratio as established by the
FDIC. The FDIC may also impose special assessments on SAIF members to repay
amounts borrowed from the United States Treasury or for any other reason deemed
necessary by the FDIC.
92
<PAGE>
For the first six months of 1995, the assessment schedule for BIF
members and SAIF members ranged from .23% to .31% of deposits. As is the case
with the SAIF, the FDIC is authorized to adjust the insurance premium rates for
banks that are insured by the BIF of the FDIC in order to maintain the reserve
ratio of the BIF at 1.25% of BIF insured deposits. As a result of the BIF
reaching its statutory reserve ratio the FDIC revised the premium schedule for
BIF insured institutions to provide a range of .04% to .31% of deposits. The
revisions became effective in the third quarter of 1995. In addition, the BIF
rates were further revised, effective January 1996, to provide a range of 0% to
.27%. The SAIF rates, however, were not adjusted. At the time the FDIC revised
the BIF premium schedule, it noted that, absent legislative action (as discussed
below), the SAIF would not attain its designated reserve ratio until the year
2002. As a result, SAIF insured members would continue to be generally subject
to higher deposit insurance premiums than BIF insured institutions until, all
things being equal, the SAIF attains its required reserve ratio.
In order to eliminate this disparity and any competitive disadvantage
between BIF and SAIF member institutions with respect to deposit insurance
premiums, legislation to recapitalize the SAIF was enacted in September 1996.
The legislation provides for a one-time assessment to be imposed on all deposits
assessed at the SAIF rates, as of March 31, 1995, in order to recapitalize the
SAIF. It also provides for the merger of the BIF and the SAIF on January 1, 1999
if no savings associations then exist. The special assessment rate was
established at .657% of deposits and the assessment was paid in November 1996.
Based on First Security's level of SAIF deposits at March 31, 1995, First
Security's assessment was approximately $1.3 million on a pre-tax basis. This
special assessment significantly increased noninterest expense and adversely
affected the Bank's results of operations for the year ended December 31, 1996.
Prior to the enactment of the legislation, a portion of the SAIF
assessment imposed on savings associations was used to repay obligations issued
by a federally chartered corporation to provide financing ("FICO") for resolving
the thrift crisis in the 1980s. Although the FDIC has proposed that the SAIF
assessment be equalized with the BIF assessment schedule, effective October 1,
1996, SAIF-insured institutions will continue to be subject to a FICO assessment
as a result of this continuing obligation. Although the legislation also now
requires assessments to be made on BIF-assessable deposits for this purpose,
effective January 1, 1997, that assessment will be limited to 20% of the rate
imposed on SAIF assessable deposits until the earlier of December 31, 1999 or
when no savings association continues to exist, thereby imposing a greater
burden on SAIF member institutions such as First Security. Thereafter, however,
assessments on BIF-member institutions will be made on the same basis as
SAIF-member institutions. The rates established by the FDIC to implement this
requirement for all FDIC-insured institutions are a 6.5 basis points assessment
on SAIF deposits and 1.5 basis points on BIF deposits until BIF insured
institutions participate fully in the assessment.
Regulatory Capital Requirements
Federally insured savings associations, such as First Security, are
required to maintain a minimum level of regulatory capital. The OTS has
established capital standards, including a tangible capital requirement, a
leverage ratio (or core capital) requirement and a risk-based capital
requirement applicable to such savings associations. These capital requirements
must be generally as stringent as the comparable capital requirements for
national banks. The OTS is also authorized to impose capital requirements in
excess of these standards on individual associations on a case-by-case basis.
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<PAGE>
The capital regulations require tangible capital of at least 1.5% of
adjusted total assets (as defined by regulation). Tangible capital generally
includes common stockholders' equity and retained income, and certain
noncumulative perpetual First Security stock and related income. In addition,
all intangible assets, other than a limited amount of purchased mortgage
servicing rights, must be deducted from tangible capital for calculating
compliance with the requirement. At April 30, 1997, First Security had $400,000
of intangible assets recorded as assets on its financial statements, as a result
of its acquisition of assets and assumption of liabilities from the Resolution
Trust Corporation in 1994. See Note 6 of the Notes to Consolidated Financial
Statements.
The OTS regulations establish special capitalization requirements for
savings associations that own subsidiaries. In determining compliance with the
capital requirements, all subsidiaries engaged solely in activities permissible
for national banks or engaged in certain other activities solely as agent for
its customers are "includable" subsidiaries that are consolidated for capital
purposes in proportion to the association's level of ownership. For excludable
subsidiaries the debt and equity investments in such subsidiaries are deducted
from assets and capital.
Assuming the Bank would have been subject to the OTS capital
requirements, at April 30, 1997, First Security had tangible capital of $29.5
million, or 11.4% of adjusted total assets, which is approximately $25.6 million
above the minimum requirement of 1.5% of adjusted total assets in effect on that
date. On a pro forma basis, after giving effect to the sale of the minimum,
midpoint and maximum number of shares of Common Stock offered in the Conversion
and investment of 50% of the net proceeds in assets not excluded for tangible
capital purposes, First Security would have had tangible capital equal to 15.9%,
16.7% and 17.5%, respectively, of adjusted total assets at April 30, 1997, which
is $39.4 million, $42.0 million and $44.5 million, respectively, above the
requirement.
The capital standards also require core capital equal to at least 3% of
adjusted total assets. Core capital generally consists of tangible capital plus
certain intangible assets, including a limited amount of purchased credit card
relationships. As a result of the prompt corrective action provisions discussed
below, however, a savings association must maintain a core capital ratio of at
least 4% to be considered adequately capitalized unless its supervisory
condition is such to allow it to maintain a 3% ratio.
At April 30, 1997, First Security had core capital equal to $29.5
million, or 11.4% of adjusted total assets, which is $21.7 million above the
minimum leverage ratio requirement of 3% as in effect on that date. On a pro
forma basis, after giving effect to the sale of the minimum, midpoint and
maximum number of shares of Common Stock offered in the Conversion and
investment of 50% of the net proceeds in assets not excluded from core capital,
First Security would have had core capital equal to 15.9%, 16.7% and 17.5%,
respectively, of adjusted total assets at April 30, 1997, which is $35.3
million, $37.8 million and $40.3 million, respectively, above the requirement.
The OTS risk-based requirement requires savings associations to have
total capital of at least 8% of risk-weighted assets. Total capital consists of
core capital, as defined above, and supplementary capital. Supplementary capital
94
<PAGE>
consists of certain permanent and maturing capital instruments that do not
qualify as core capital and general valuation loan and lease loss allowances up
to a maximum of 1.25% of risk-weighted assets. Supplementary capital may be used
to satisfy the risk-based requirement only to the extent of core capital. The
OTS is also authorized to require a savings association to maintain an
additional amount of total capital to account for concentration of credit risk
and the risk of non-traditional activities. At April 30, 1997, First Security
had $1.7 million of general loss reserves of which $1.6 million qualifies as
supplementary capital, which was less than 1.25% of risk-weighted assets.
Certain exclusions from capital and assets are required to be made for
the purpose of calculating total capital. Such exclusions consist of equity
investments (as defined by regulation) and that portion of land loans and
nonresidential construction loans in excess of an 80% loan-to-value ratio and
reciprocal holdings of qualifying capital instruments. First Security had no
such exclusions from capital and assets at April 30, 1997.
In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet items, will be multiplied by a risk weight,
ranging from 0% to 100%, based on the risk inherent in the type of asset. For
example, the OTS has assigned a risk weight of 50% for prudently underwritten
permanent one- to four-family first lien mortgage loans not more than 90 days
delinquent and having a loan to value ratio of not more than 80% at origination
unless insured to such ratio by an insurer approved by the FNMA or FHLMC.
The OTS has adopted a final rule that requires every savings
association with more than normal interest rate risk exposure to deduct from its
total capital, for purposes of determining compliance with such requirement, an
amount equal to 50% of its interest-rate risk exposure multiplied by the present
value of its assets. This exposure is a measure of the potential decline in the
net portfolio value of a savings association, greater than 2% of the present
value of its assets, based upon a hypothetical 200 basis point increase or
decrease in interest rates (whichever results in a greater decline). Net
portfolio value is the present value of expected cash flows from assets,
liabilities and off-balance sheet contracts. The rule provides for a two quarter
lag between calculating interest rate risk and recognizing any deduction from
capital. The rule will not become effective until the OTS evaluates the process
by which savings associations may appeal an interest rate risk deduction
determination. It is uncertain as to when this evaluation may be completed. Any
savings association with less than $300 million in assets and a total capital
ratio in excess of 12% is exempt from this requirement unless the OTS determines
otherwise. Based upon its capital level and assets size at April 30, 1997, First
Security would qualify for an exemption from the requirement.
On April 30, 1997, First Security had total capital of $31.1 million
(including $29.5 million in core capital and $1.6 million in qualifying
supplementary capital) and risk-weighted assets of $127.5 million; or total
capital of 24.4% of risk-weighted assets. This amount was $20.9 million above
the 8% requirement in effect on that date. On a pro forma basis, after giving
95
<PAGE>
effect to the sale of the minimum, midpoint and maximum number of shares of
Common Stock offered in the Conversion, the infusion to First Security of 50% of
the net Conversion proceeds and the investment of those proceeds to First
Security in 20% risk-weighted government securities, First Security would have
had total capital of 34.7%, 36.5% and 38.4%, respectively, of risk-weighted
assets, which is above the current 8% requirement by $33.2 million, $35.5
million and $37.8 million, respectively.
The OTS and the FDIC are authorized and, under certain circumstances
required, to take certain actions against savings associations that fail to meet
their capital requirements. The OTS is generally required to take action to
restrict the activities of an "undercapitalized association" (generally defined
to be one with less than either a 4% core capital ratio, a 4% Tier 1
risked-based capital ratio or an 8% risk-based capital ratio). Any such
association must submit a capital restoration plan and until such plan is
approved by the OTS may not increase its assets, acquire another institution,
establish a branch or engage in any new activities, and generally may not make
capital distributions. The OTS is authorized to impose the additional
restrictions that are applicable to significantly undercapitalized associations.
As a condition to the approval of the capital restoration plan, any
company controlling an undercapitalized association must agree that it will
enter into a limited capital maintenance guarantee with respect to the
institution's achievement of its capital requirements.
Any savings association that fails to comply with its capital plan or
is "significantly undercapitalized" (i.e., Tier 1 risk-based or core capital
ratios of less than 3% or a risk-based capital ratio of less than 6%) must be
made subject to one or more of additional specified actions and operating
restrictions which may cover all aspects of its operations and include a forced
merger or acquisition of the association. An association that becomes
"critically undercapitalized" (i.e., a tangible capital ratio of 2% or less) is
subject to further mandatory restrictions on its activities in addition to those
applicable to significantly undercapitalized associations. In addition, the OTS
must appoint a receiver (or conservator with the concurrence of the FDIC) for a
savings association, with certain limited exceptions, within 90 days after it
becomes critically undercapitalized. Any undercapitalized association is also
subject to the general enforcement authority of the OTS and the FDIC, including
the appointment of a conservator or a receiver.
The OTS is also generally authorized to reclassify an association into
a lower capital category and impose the restrictions applicable to such category
if the institution is engaged in unsafe or unsound practices or is in an unsafe
or unsound condition.
The imposition by the OTS or the FDIC of any of these measures on First
Security may have a substantial adverse effect on First Security's operations
and profitability and the value of the Common Stock purchased in the Conversion.
Holding Company stockholders do not have preemptive rights, and therefore, if
the Holding Company is directed by the OTS or the FDIC to issue additional
shares of Common Stock, such issuance may result in the dilution in the
percentage of ownership of the Holding Company of those persons purchasing
shares in the Conversion.
Limitations on Dividends and Other Capital Distributions
OTS regulations impose various restrictions on savings associations
with respect to their ability to make distributions of capital, which include
dividends, stock redemptions or repurchases, cash-out mergers and other
transactions charged to the capital account. OTS regulations also prohibit a
96
<PAGE>
savings association from declaring or paying any dividends or from repurchasing
any of its stock if, as a result, the regulatory capital of the association
would be reduced below the amount required to be maintained for the liquidation
account established in connection with its mutual to stock conversion. See "The
Conversion--Effects of Conversion to Stock Form on Depositors and Borrowers of
the Bank" and "-Restrictions on Repurchase of Stock."
Generally, savings associations, such as First Security, that before
and after the proposed distribution meet their capital requirements, may make
capital distributions during any calendar year equal to the greater of 100% of
net income for the year-to-date plus 50% of the amount by which the lesser of
the association's tangible, core or risk-based capital exceeds its capital
requirement for such capital component, as measured at the beginning of the
calendar year, or 75% of its net income for the most recent four quarter period.
However, an association deemed to be in need of more than normal supervision by
the OTS may have its dividend authority restricted by the OTS. First Security
may pay dividends in accordance with this general authority.
Savings associations proposing to make any capital distribution need
only submit written notice to the OTS 30 days prior to such distribution.
Savings associations that do not, or would not meet their current minimum
capital requirements following a proposed capital distribution, however, must
obtain OTS approval prior to making such distribution. The OTS may object to the
distribution during that 30-day period notice based on safety and soundness
concerns. See "- Regulatory Capital Requirements."
The OTS has proposed regulations that would revise the current capital
distribution restrictions. Under the proposal a savings association that is a
subsidiary of a holding company may make a capital distribution with notice to
the OTS provided that it has a CAMEL 1 or 2 rating, is not of supervisory
concern, and would remain adequately capitalized (as defined in the OTS prompt
corrective action regulations) following the proposed distribution. Savings
associations that would remain adequately capitalized following the proposed
distribution but do not meet the other noted requirements must notify the OTS 30
days prior to declaring a capital distribution. The OTS stated it will generally
regard as permissible that amount of capital distributions that do not exceed
50% of the institution's excess regulatory capital plus net income to date
during the calendar year. A savings association may not make a capital
distribution without prior approval of the OTS and the FDIC if it is
undercapitalized before, or as a result of, such a distribution. As under the
current rule, the OTS may object to a capital distribution if it would
constitute an unsafe or unsound practice. No assurance may be given as to
whether or in what form the regulations may be adopted.
Liquidity
All savings associations, including First Security, are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. For a discussion of what First Security
includes in liquid assets, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources." This liquid asset ratio requirement may vary from time to time
(between 4% and 10%) depending upon economic conditions and savings flows of all
savings associations. At the present time, the minimum liquid asset ratio is 5%.
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In addition, short-term liquid assets (e.g., cash, certain time
deposits, certain bankers acceptances and short-term United States Treasury
obligations) currently must constitute at least 1% of the association's average
daily balance of net withdrawable deposit accounts and current borrowings.
Penalties may be imposed upon associations for violations of either liquid asset
ratio requirement. At April 30, 1997, First Security was in compliance with both
requirements, with an overall liquid asset ratio of 8.90% and a short-term
liquid assets ratio of 5.60%
Accounting
An OTS policy statement applicable to all savings associations
clarifies and re-emphasizes that the investment activities of a savings
association must be in compliance with approved and documented investment
policies and strategies, and must be accounted for in accordance with GAAP.
Under the policy statement, management must support its classification of and
accounting for loans and securities (i.e., whether held-to-maturity,
available-for-sale or trading) with appropriate documentation. First Security is
in compliance with these amended rules.
The OTS has adopted an amendment to its accounting regulations, which
may be made more stringent than GAAP by the OTS, to require that transactions be
reported in a manner that best reflects their underlying economic substance and
inherent risk and that financial reports must incorporate any other accounting
regulations or orders prescribed by the OTS.
Qualified Thrift Lender Test
All savings associations, including First Security, are required to
meet a qualified thrift lender ("QTL") test to avoid certain restrictions on
their operations. This test requires a savings association to have at least 65%
of its portfolio assets (as defined by regulation) in qualified thrift
investments on a monthly average for nine out of every 12 months on a rolling
basis. Such assets primarily consist of residential housing related loans and
investments. At April 30, 1997, First Security met the test with 78.5% of its
portfolio assets in qualified thrift investments and has always met the test
since its effectiveness.
Any savings association that fails to meet the QTL test must convert to
a national bank charter, unless it requalifies as a QTL and thereafter remains a
QTL. If an association does not requalify and converts to a national bank
charter, it must remain SAIF-insured until the FDIC permits it to transfer to
the BIF. If such an association has not yet requalified or converted to a
national bank, its new investments and activities are limited to those
permissible for both a savings association and a national bank, and it is
limited to national bank branching rights in its home state. In addition, the
association is immediately ineligible to receive any new FHLB borrowings and is
subject to national bank limits for payment of dividends. If such association
has not requalified or converted to a national bank within three years after the
failure, it must divest of all investments and cease all activities not
permissible for a national bank. In addition, it must repay promptly any
outstanding FHLB borrowings, which may result in prepayment penalties. If any
association that fails the QTL test is controlled by a holding company, then
within one year after the failure, the holding company must register as a bank
holding company and become subject to all restrictions on bank holding
companies. See "- Holding Company Regulation."
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Community Reinvestment Act
Under the Community Reinvestment Act ("CRA"), every FDIC insured
institution has a continuing and affirmative obligation consistent with safe and
sound banking practices to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The CRA does not establish
specific lending requirements or programs for financial institutions nor does it
limit an institution's discretion to develop the types of products and services
that it believes are best suited to its particular community, consistent with
the CRA. The CRA requires the OTS, in connection with the examination of First
Security, to assess the institution's record of meeting the credit needs of its
community and to take such record into account in its evaluation of certain
applications, such as a merger or the establishment of a branch, by First
Security. An unsatisfactory rating may be used as the basis for the denial of an
application by the OTS.
The federal banking agencies, including the OTS, have recently revised
the CRA regulations and the methodology for determining an institution's
compliance with the CRA. Due to the heightened attention being given to the CRA
in the past few years, First Security may be required to devote additional funds
for investment and lending in its local community. First Security was examined
for CRA compliance in April 1996 and received a rating of satisfactory.
Transactions with Affiliates
Generally, transactions between a savings association and its
affiliates are required to be on terms as favorable to the association as
transactions with non-affiliates. In addition, certain of these transactions,
such as loans to an affiliate, are restricted to a percentage of the
association's capital. Affiliates of First Security include the Holding Company
and any company which is under common control with First Security. In addition,
a savings association may not lend to any affiliate engaged in activities not
permissible for a bank holding company or acquire the securities of most
affiliates.
Certain transactions with directors, officers or controlling persons
are also subject to conflict of interest regulations enforced by the OTS. These
conflict of interest regulations and other statutes also impose restrictions on
loans to such persons and their related interests. Among other things, such
loans must be made on terms substantially the same as for loans to unaffiliated
individuals.
Holding Company Regulation
The Holding Company will be a unitary savings and loan holding company
subject to regulatory oversight by the OTS. As such, the Holding Company is
required to register and file reports with the OTS and is subject to regulation
and examination by the OTS. In addition, the OTS has enforcement authority over
the Holding Company and its non-savings association subsidiaries which also
permits the OTS to restrict or prohibit activities that are determined to be a
serious risk to the subsidiary savings association.
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As a unitary savings and loan holding company, the Holding Company
generally is not subject to activity restrictions. If the Holding Company
acquires control of another savings association as a separate subsidiary, it
would become a multiple savings and loan holding company, and the activities of
the Holding Company and any of its subsidiaries (other than First Security or
any other SAIF-insured savings association) would become subject to such
restrictions unless such other associations each qualify as a QTL and were
acquired in a supervisory acquisition.
If First Security fails the QTL test, the Holding Company must obtain
the approval of the OTS prior to continuing after such failure, directly or
through its other subsidiaries, any business activity other than those approved
for multiple savings and loan holding companies or their subsidiaries. In
addition, within one year of such failure the Holding Company must register as,
and will become subject to, the restrictions applicable to bank holding
companies. The activities authorized for a bank holding company are more limited
than are the activities authorized for a unitary or multiple savings and loan
holding company. See "- Qualified Thrift Lender Test."
The Holding Company must obtain approval from the OTS before acquiring
control of any other SAIF-insured association. Such acquisitions are generally
prohibited if they result in a multiple savings and loan holding company
controlling savings associations in more than one state. However, such
interstate acquisitions are permitted based on specific state authorization or
in a supervisory acquisition of a failing savings association.
Federal Securities Law
The stock of the Holding Company is registered with the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Holding
Company is subject to the information, proxy solicitation, insider trading
restrictions and other requirements of the SEC under the Exchange Act.
Holding Company stock held by persons who are affiliates (generally
officers, directors and principal stockholders) of the Holding Company may not
be resold without registration or unless sold in accordance with certain resale
restrictions. If the Holding Company meets specified current public information
requirements, each affiliate of the Holding Company is able to sell in the
public market, without registration, a limited number of shares in any
three-month period.
Federal Reserve System
The Federal Reserve Board requires all depository institutions to
maintain non-interest bearing reserves at specified levels against their
transaction accounts (primarily checking, NOW and Super NOW checking accounts).
At April 30, 1997, First Security was in compliance with these reserve
requirements. The balances maintained to meet the reserve requirements imposed
by the Federal Reserve Board may be used to satisfy liquidity requirements that
may be imposed by the OTS. See "-Liquidity."
Savings associations are authorized to borrow from the Federal Reserve
Bank "discount window," but Federal Reserve Board regulations require
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associations to exhaust other reasonable alternative sources of funds, including
FHLB borrowings, before borrowing from the Federal Reserve Bank.
Federal Home Loan Bank System
First Security is a member of the FHLB of Chicago, which is one of 12
regional FHLBs, that administers the home financing credit function of savings
associations. Each FHLB serves as a reserve or central bank for its members
within its assigned region. It is funded primarily from proceeds derived from
the sale of consolidated obligations of the FHLB System. It makes loans to
members (i.e., advances) in accordance with policies and procedures, established
by the board of directors of the FHLB, which are subject to the oversight of the
Federal Housing Finance Board. All advances from the FHLB are required to be
fully secured by sufficient collateral as determined by the FHLB. In addition,
all long-term advances are required to provide funds for residential home
financing. The aggregate amount of advances cannot exceed 20 times the amount of
FHLB stock held by the institutions.
As a member, First Security is required to purchase and maintain stock
in the FHLB of Chicago. At April 30, 1997, First Security had $1.9 million in
FHLB stock, which was in compliance with this requirement. In past years, First
Security has received substantial dividends on its FHLB stock. Over the past
five calendar years such dividends have averaged 6.12% and were 6.8% for
calendar year 1996. As a result of their holdings, the Bank could borrow up to
$38.0 million from the FHLB.
Under federal law the FHLBs are required to provide funds for the
resolution of troubled savings associations and to contribute to low- and
moderately priced housing programs through direct loans or interest subsidies on
advances targeted for community investment and low- and moderate-income housing
projects. These contributions have affected adversely the level of FHLB
dividends paid and could continue to do so in the future. These contributions
could also have an adverse effect on the value of FHLB stock in the future. A
reduction in value of First Security's FHLB stock may result in a corresponding
reduction in First Security's capital.
For the year ended December 31, 1996, dividends paid by the FHLB of
Chicago to First Security totaled $111,000, which constitute a $13,000 increase
from the amount of dividends received in calendar year 1995. The $33,000
dividend received for the four months ended April 30, 1997 reflects an
annualized rate of 5.8%, which is 100 basis points less than the rate for
calendar 1996.
Federal and State Taxation
In August 1996, legislation was enacted that repeals the reserve method
of accounting used by many thrifts to calculate their bad debt reserve for
federal income tax purposes. As a result, small thrifts such as the Bank must
recapture that portion of the reserve that exceeds the balance of its reserves
as of the close of its 1987 tax year. The legislation also requires thrifts to
account for bad debts for federal income tax purposes on the same basis as
commercial banks for tax years beginning after December 31, 1995. The recapture
will occur over a six-year period, the commencement of which will be delayed
until the first taxable year beginning after December 31, 1997, provided the
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institution meets certain residential lending requirements. The management of
the Company does not believe that the legislation will have a material impact on
the Company or the Bank.
In addition to the regular income tax, corporations, including savings
associations such as First Security, generally are subject to a minimum tax. An
alternative minimum tax is imposed at a minimum tax rate of 20% on alternative
minimum taxable income, which is the sum of a corporation's regular taxable
income (with certain adjustments) and tax preference items, less any available
exemption. The alternative minimum tax is imposed to the extent it exceeds the
corporation's regular income tax and net operating losses can offset no more
than 90% of alternative minimum taxable income..
To the extent earnings appropriated to a savings association's bad debt
reserves for "qualifying real property loans" and deducted for federal income
tax purposes exceed the allowable amount of such reserves computed under the
experience method and to the extent of the association's supplemental reserves
for losses on loans ("Excess"), such Excess may not, without adverse tax
consequences, be utilized for the payment of cash dividends or other
distributions to a shareholder (including distributions on redemption,
dissolution or liquidation) or for any other purpose (except to absorb bad debt
losses). As of December 31, 1996, First Security's excess for tax purposes
totaled approximately $2.0 million.
First Security files its federal, state and local income tax returns on
a calendar year basis using the accrual method of accounting.
First Security has not been audited by the IRS with respect to
consolidated federal income tax returns in the past five years. With respect to
years examined by the IRS, either all deficiencies have been satisfied or
sufficient reserves have been established to satisfy asserted deficiencies. In
the opinion of management, any examination of still open returns (including
returns of subsidiary and predecessors of, or entities merged into, First
Security) would not result in a deficiency which could have a material adverse
effect on the financial condition of First Security and its consolidated
subsidiary.
Illinois Taxation. For Illinois income tax purposes, the Bank is taxed
at an effective rate equal to 7.18% of Illinois taxable income. For these
purposes, "Illinois Taxable Income" generally means federal taxable income,
subject to certain adjustments (including the addition of interest income on
state and municipal obligations and the exclusion of interest income on United
States Treasury obligations).
Delaware Taxation. As a Delaware holding company, the Holding Company
is exempted from Delaware corporate income tax but is required to file an annual
report with and pay an annual fee to the State of Delaware. The Holding Company
is also subject to an annual franchise tax imposed by the State of Delaware.
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MANAGEMENT
Directors and Executive Officers of the Holding Company and of the Bank
Directors and Executive Officers of the Holding Company. The Board of
Directors of the Holding Company currently consists of nine members. The
directors of the Holding Company are currently comprised of the directors of the
Bank. See "- Board of Directors of the Bank." Directors of the Holding Company
serve three-year staggered terms so that approximately one-third of the
directors will be elected at each annual meeting of stockholders. The terms of
the current directors of the Holding Company are the same as that of the Bank's
board. Upon the completion of the Conversion, the Holding Company intends to pay
directors a fee of $850 per board meeting attended and $100 per committee
meeting attended. For information regarding stock options and restricted stock
proposed to be awarded to directors following stockholder ratification of such
plans, see "- Benefit Plans."
The executive officers of the Holding Company are elected annually and
hold office until their respective successors have been elected and qualified or
until death, resignation or removal by the Board of Directors. The following
table sets forth information regarding executive officers of the Holding
Company. Each executive officer of the Holding Company has held his or her
position since the incorporation of the Holding Company in July 1997.
Name Title
---- -----
Julian Kulas President and Chief Executive Officer
Harry I. Kucewicz Treasurer and Chief Financial Officer
Mary H. Korb Vice-President - Lending
Irene S. Subota Vice-President - Savings
Adrian Hawryliw Vice President - Philadelphia Branch Manager
The Holding Company does not initially intend to pay executive officers
any fees in addition to fees payable to such persons as executive officers of
the Bank. For information regarding compensation of directors and executive
officers of the Bank, see "Management - Director Compensation" and "- Executive
Compensation." For information regarding stock options and restricted stock
proposed to be awarded to directors and executive officers following stockholder
ratification of the Holding Company's stock-based plans, see "- Benefit Plans."
Board of Directors of the Bank. Prior to the Conversion, the direction
and control of the Bank, as a mutual savings institution, was vested in its
Board of Directors. Upon conversion of the Bank to stock form, each of the
directors of the Bank will continue to serve as a director of the converted
Bank. The Board of Directors of the Bank currently consists of nine members. The
directors serve three-year staggered terms so that approximately one-third of
the directors are elected at each annual meeting of members. Because the Holding
Company will own all of the issued and outstanding shares of capital stock of
the Bank after the Conversion, directors of the Holding Company will elect the
directors of the Bank.
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The following table sets forth certain information regarding the
directors of the Bank.
<TABLE>
<CAPTION>
Director Term
Name Position(s) Held With the Bank Age(1) Since Expires
---- ------------------------------ ------ ----- -------
<S> <C> <C> <C> <C>
Steve Babyk Director 50 1993 1998
Lila Maria Bodnar Director and Recording Secretary 38 1995 1998
Myron Dobrowolsky Director 63 1985 2000
Terry Gawryk Director and Secretary 43 1981 1999
Julian Kulas Director, President and Chief Executive Officer 62 1964 2000
George Kawka Director 53 1986 1998
Paul Nadzikewycz Chairman of the Board 58 1973 2000
Jaroslav H. Sydorenko Director 55 1993 1999
Chrysta Wereszczak Director 41 1993 1999
- --------------------
<FN>
(1) At April 30, 1997.
</FN>
</TABLE>
The business experience of each director of the Holding Company for at
least the past five years is set forth below.
Steve Babyk. Mr. Babyk has worked at Union Tank Car Company since 1969
and is currently the Director of Fleet Leasing. Mr. Babyk is primarily
responsible for the care and leasing of over 50,000 railroad cars in the United
States, Canada and Mexico.
Lila Maria Bodnar. Ms. Bodnar was an accountant with the First National
Bank of Chicago from 1981 to 1985 and was a manager in the accounting department
of the Chicago branch of the Bank of Montreal from 1985 to 1991. Ms. Bodnar has
a Masters of Business Administration from Loyola University, Chicago, Illinois.
Myron Dobrowolsky. Mr. Dobrowolsky has been a construction project
manager with the engineering firm of Dames and Moore, Chicago, Illinois since
1991. Previously, Mr. Dobrowolsky was an engineer with the Illinois Highway
Department.
Terry Gawryk. Mr. Gawryk has practiced law in Chicago, Illinois since
1979.
Julian Kulas. Mr. Kulas has served as the President and Chief Executive
Officer of the Bank since 1964. Mr. Kulas has also been engaged in the private
practice of law since 1959. Mr. Kulas is extremely active in community affairs
and holds a variety of positions on not-for-profit organizations. Mr. Kulas has
been a Commissioner on the Chicago Commission on Human Relations since 1981.
George Kawka. Mr. Kawka has been a senior architectural/engineering
project manager with PAL Telecom Group since 1994 and was previously a senior
project manager with AIC Security Systems, all in Chicago, Illinois.
Paul Nadzikewycz. Mr. Nadzikewycz, a licensed podiatrist, has been a
self-employed investor focusing primarily on real estate since 1987. In
addition, since January 1997, Mr. Nadzikewycz has served as President and Chief
Executive Officer of Oakley Assoc. Ltd., a legal software developer.
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Jaroslav H. Sydorenko. Mr. Sydorenko has been a credit manager at
Kanematsu USA, Inc., an import/export trading company located in Chicago,
Illinois since 1985.
Chrysta Wereszczak. Ms. Wereszczak was employed by the Unisys
Corporation from 1982 to 1989 in a variety of positions, including Financial
Manager and Regional Financial Analyst. She is currently involved with B&B
Formica, a manufacturing business she owns with her spouse. Ms. Wereszczak is a
member of the St. Nicholas School Board.
Executive Officers Who Are Not Directors. Each of the executive
officers of the Bank will retain his or her office in the converted Bank.
Officers are elected annually by the Board of Directors of the Bank. The
business experience of the executive officers who are not also directors is set
forth below.
Harry Kucewicz. Mr. Kucewicz, age 40, is currently serving as the
Treasurer and Chief Operating and Financial Officer of the Bank. He began
working at the Bank in 1978 as the Controller. He was elected Treasurer and
Chief Financial Officer in 1990 and Chief Operating Officer in August 1994.
Mary H. Korb. Ms. Korb, age 49, is currently Vice President - Lending
of the Bank. In such capacity, Ms. Korb supervises all aspects of the Bank's
lending operations including lending compliance. Ms. Korb has been with the Bank
since 1970 and has served in her present capacity since March 1991.
Irene S. Subota. Ms. Subota, age 51, currently serves as Vice President
- - Savings of the Bank. In such capacity, Ms. Subota is in charge of all aspects
of the Bank's savings function including compliance. Ms. Subota has been
employed by the Bank since 1973 and has served in her current position since
1992.
Adrian Hawryliw. Mr. Hawryliw, age 61, has served as Philadelphia
Branch Manager of the Bank since 1994 when the Philadelphia, Pennsylvania branch
was acquired from the Resolution Trust Corporation and is currently a Vice
President of the Bank. Mr. Hawryliw is responsible for supervising operations of
the Philadelphia, Pennsylvania branch, including business development, retail
deposits, real estate lending, accounting and marketing. He has over 34 years of
banking experience in the Philadelphia area, holding various positions including
Chief Financial Officer and Vice President/ Investments for other area
institutions.
Indemnification
The Certificate of Incorporation of the Holding Company provides that a
director or officer of the Holding Company shall be indemnified by the Holding
Company to the fullest extent authorized by the General Corporation Law of the
State of Delaware against all expenses, liability and loss reasonably incurred
or suffered by such person in connection with his activities as a director or
officer of the Holding Company or as a director or officer of another company,
if the director or officer held such position at the request of the Holding
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Company. Delaware law requires that such director, officer, employee or agent,
in order to be indemnified, must have acted in good faith and in a manner
reasonably believed to be not opposed to the best interests of the Holding
Company, and, with respect to any criminal action or proceeding, did not have
reasonable cause to believe his or her conduct was unlawful.
The Certificate of Incorporation and Delaware law also provide that the
indemnification provisions of such Certificate and the statute are not exclusive
of any other right which a person seeking indemnification may have or later
acquire under any statute, provision of the Certificate of Incorporation, Bylaws
of the Holding Company, agreement, vote of stockholders or disinterested
directors or otherwise.
These provisions may have the effect of deterring shareholder
derivative actions, since the Holding Company may ultimately be responsible for
expenses for both parties to the action. A similar effect would not be expected
for third-party claims.
In addition, the Certificate of Incorporation and Delaware law also
provide that the Holding Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Holding
Company or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the Holding
Company has the power to indemnify such person against such expense, liability
or loss under the Delaware General Corporation Law. The Holding Company may
obtain such insurance.
Meetings and Committees of Board of Directors
The Bank. The Bank's Board of Directors meets on a monthly basis. The
Board of Directors met 13 times during the fiscal year ended December 31, 1996.
During fiscal 1996, no director of the Bank attended fewer than 75% of the
aggregate of the total number of Board meetings and the total number of meetings
held by the committees of the Board of Directors on which he or she served.
The Bank has standing Executive, Audit, Salary Review, Loan and
Investment Committees.
The Executive Committee provides oversight of Board-related matters
in-between regularly scheduled Board Meetings. The Executive Committee is
comprised of Director Gawryk and President Julian Kulas. This committee met
approximately five times during fiscal year 1996.
The Audit Committee is comprised of Directors Bodnar, Sydorenko and
Wereszczak. This Committee oversees and reviews the Bank's financial and
internal control matters. The Audit Committee also reviews the Bank's audited
financial statements with the Bank's outside auditors and the Report of the
Examination with the OTS examiners, either separately or with the full Board.
This committee met four times in 1996.
The Salary Review Committee oversees and reviews the Bank's
compensation policies and sets the compensation levels for Executive Management.
This committee is comprised of Directors Gawryk, Nadzikewycz, Wereszczak and
Babyk and met three times in 1996.
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The Loan Committee is composed of Directors Dobrowolsky, Gawryk, and
Babyk and Vice-President Korb. The Loan Committee reviews loan applications
weekly and sets interest rates for all loan types. The Loan Committee met 24
times in 1996.
The Investment Committee is composed of President Kulas, Vice President
Hawryliw, Treasurer Kucewicz and Director Bodnar. This committee meets at least
once a month to handle the investments for the Bank and the implementation of
the Bank's strategy as it relates to interest rate risk and reinvestment
options. The Investment Committee met eight times in 1996.
The Holding Company. The Board of Directors of the Holding Company has
established standing Executive, Audit, Compensation and Nominating Committees.
Director Compensation
Directors of the Bank are paid a monthly fee of $850 for service on the
Board of Directors. Chairman Paul Nadzikewycz and Recording Secretary Lila Maria
Bodnar each receive an additional fee of $250 per month. Directors receive
additional compensation of $100 for each committee meeting attended.
Executive Compensation
The following table sets forth information concerning the compensation
accrued for services in all capacities to First Security for the fiscal year
ended December 31, 1996 for the Bank's President and Chief Executive Officer. No
other executive officer's aggregate annual compensation (salary plus bonus)
exceeded $100,000 in fiscal 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
------------------------------------- ----------------------------
Other Annual Restricted Stock Options/ All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Award ($)(1) SARs (#)(1) Compensation($)
--------------------------- ---- --------- -------- --------------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Julian E. Kulas
President, Chief Executive Officer
and Director 1996 $127,966 $5,419 $7,800 --- --- $22,240(2)
- ----------
</TABLE>
(1) Pursuant to the proposed Stock Option Plan, the Holding Company intends to
grant Mr. Kulas an option to purchase a number of shares equal to 2.5%
(93,725 shares at the minimum and 124,625 shares at the maximum of the
Estimated Valuation Range) of the total number of shares of Common Stock
issued in the Conversion at an exercise price equal to the market value per
share of the Common Stock on the date of grant. See "- Stock Option and
Incentive Plan." In addition, pursuant to the proposed RRP, the Holding
Company intends to grant to Mr. Kulas a number of shares of restricted
stock equal to 1.0% (37,490 shares at the minimum and 49,850 shares at the
maximum of the Estimated Valuation Range) of the total number of shares of
Common Stock sold in the Conversion. See "- Recognition and Retention
Plan."
(2) This amount consists of $22,240 received through the Bank's Profit Sharing
Plan.
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Employment Agreement and Severance Agreements. The Bank intends to
enter into an employment agreement with President Kulas providing for an initial
term of three years and change in control severance agreements with executive
officers Kucewicz, Korb, Subota and Hawryliw providing for an initial term of
two years. The agreements have been filed with the OTS as part of the
application of the Holding Company for approval to become a savings and loan
holding company.
Mr. Kulas' employment agreement will become effective upon completion
of the Conversion and provide for an annual base salary in an amount not less
than his current salary and provide for an annual extension subject to the
performance of an annual formal evaluation by the Board of Directors of the
Bank. The agreement also provides for termination upon the employee's death, for
cause or in certain events specified by OTS regulations. The employment
agreement is terminable by the employee upon 90 days' notice to the Bank.
The employment agreement provides for payment to Mr. Kulas of an amount
equal to 299% of his five-year annual average base compensation, in the event
there is a "change in control" of the Bank where employment involuntarily
terminates in connection with such change in control, as defined, or within
twelve months thereafter. See "Restrictions on Acquisitions of Stock and Related
Takeover Defensive Provisions." If the employment of Mr. Kulas had been
terminated as of April 30, 1997 under circumstances entitling him to severance
pay as described above, he would have been entitled to receive a lump sum cash
payment of approximately $382,600. The agreement also provides for the continued
health coverage for the remainder of the term of his contract should he be
involuntarily terminated in the event of change in control.
The Bank intends to enter into change in control severance agreements
with officers Kucewicz, Korb, Subota and Hawryliw. The agreements become
effective upon completion of the Conversion and provide for an initial term of
24 months. The agreements provide for extensions of one year, on each
anniversary of the effective date of the agreement, subject to a formal
performance evaluation performed by the Bank. The agreements provide for
termination for cause or in certain events specified by OTS regulations.
The agreements provide for a lump sum payment to the employee of 200%
of their annual base compensation and the continued payment for the remaining
term of the contract of life and health insurance coverage maintained by the
Bank in the event there is a "change in control" of the Bank where employment
terminates involuntarily within 12 months of such change in control. This
termination payment is subject to reduction to the extent it is non-deductible
for federal income tax purposes. See "Restrictions on Acquisitions of Stock and
Related Takeover Defensive Provisions."
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Employee Severance Compensation Plan. The Bank's Board of Directors has
established the First Security Employee Severance Compensation Plan which will
provide certain employees with severance pay benefits in the event of a change
in control of the Bank or the Holding Company following Conversion. Management
personnel with individual employment agreements or change in control severance
agreements are not eligible to participate in the Severance Compensation Plan.
The purpose of the Severance Compensation Plan is to recognize the valuable
services and contributions of the Bank's employees and the uncertainties
relating to continuing employment, reduced employee benefits, management changes
and relocations in the event of a change in control. Under the Severance
Compensation Plan, in the event of a change in control, eligible employees who
are terminated or voluntarily terminate employment (for reasons specified under
the Severance Compensation Plan), within one year of a change in control will be
entitled to receive a severance payment. Payments pursuant to the Severance
Compensation Plan are equal to the product of two weeks salary (as defined in
the Severance Compensation Plan) times the number of years of service up to a
maximum of twelve years in the case of officers or seven years in the case of
other employees. In general, the Severance Compensation Plan may be amended or
terminated by the Board of Directors by a majority vote at any time prior to a
change in control but may not be amended or terminated thereafter.
Benefit Plans
General. First Security currently provides insurance benefits to its
employees, including health and life insurance, subject to certain deductibles
and copayments. First Security also maintains a profit sharing plan for the
benefit of its employees.
Profit Sharing Plan. The Bank maintains a tax-exempt profit sharing
plan and trust (the "Profit Sharing Plan"). All employees serving at least 1,000
hours per year are eligible to participate subject to certain vesting and other
qualifying factors. The Bank anticipates that future profit sharing
contributions will be reduced in order to offset, in part, the expense of the
ESOP.
Prior to the completion of the Conversion, the Bank intends to amend
the Profit Sharing Plan in order to give the participants the opportunity to
direct some or all of their vested interests into Holding Company Common Stock.
Employee Stock Ownership Plan. The Boards of Directors of First
Security and the Holding Company have approved the adoption of an ESOP for the
benefit of employees of First Security. The ESOP is also designed to meet the
requirements of an employee stock ownership plan as described at Section
4975(e)(7) of the Code and Section 407(d)(6) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and, as such, the ESOP is empowered
to borrow in order to finance purchases of the Common Stock.
It is anticipated that the ESOP will be funded with a loan from the
Holding Company. The interest rate of the ESOP loan will be equal to the
applicable federal interest rate as determined by the Internal Revenue Service
for the month in which the loan is made, as calculated pursuant to Section
1274(d) of the Code.
GAAP generally requires that any borrowing by the ESOP from an
unaffiliated lender be reflected as a liability in the Holding Company's
Financial Statements, whether or not such borrowing is guaranteed by, or
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constitutes a legally binding contribution commitment of, the Holding Company or
the Bank. The funds used to acquire the ESOP shares will be borrowed from the
Holding Company. Since the Holding Company will finance the ESOP debt, the ESOP
debt will be eliminated through consolidation and no liability will be reflected
on the Holding Company's financial statements. In addition, shares purchased
with borrowed funds will, to the extent of the borrowings, be excluded from
stockholders' equity, representing unearned compensation to employees for future
services not yet performed. Consequently, if the ESOP purchases already-issued
shares in the open market, the Holding Company's consolidated liabilities will
increase to the extent of the ESOP's borrowings, and total and per share
stockholders' equity will be reduced to reflect such borrowings. If the ESOP
purchases newly issued shares from the Holding Company, total stockholders'
equity would neither increase nor decrease, but per share stockholders' equity
and per share net income would decrease because of the increase in the number of
outstanding shares. In either case, as the borrowings used to fund ESOP
purchases are repaid, total stockholders' equity will correspondingly increase.
All employees of the Bank are eligible to participate in the ESOP after
they attain age 21 and complete one year of service. The Bank's contribution to
the ESOP is allocated among participants on the basis of their relative
compensation. Each participant's account will be credited with cash and shares
of Holding Company Common Stock based upon compensation earned during the year
with respect to which the contribution is made. Contributions credited to a
participant's account become fully vested upon such participant's completing
five years of service. Credit will be given for prior years of service for
vesting purposes. ESOP participants are entitled to receive distributions from
their ESOP accounts only upon termination of service. Distributions will be made
in cash and in whole shares of the Holding Company's Common Stock. Fractional
shares will be paid in cash. Participants will not incur a tax liability until a
distribution is made.
Each participating employee is entitled to instruct the trustee of the
ESOP as to how to vote the shares allocated to his or her account. The trustee
will not be affiliated with the Holding Company or First Security Federal
Savings Bank.
The ESOP may be amended by the Board of Directors, except that no
amendment may be made which would reduce the interest of any participant in the
ESOP trust fund or divert any of the assets of the ESOP trust fund for purposes
other than the benefit of participants or their beneficiaries.
Stock Option and Incentive Plan. Among the benefits to the Bank
anticipated from the Conversion is the ability to attract and retain personnel
through the prudent use of stock options and other stock-related incentive
programs. The Board of Directors of the Holding Company intends to adopt the
Stock Option Plan, subject to ratification by stockholders of the Holding
Company at a meeting to be held not earlier than six months after completion of
the Conversion. Under the terms of the proposed Stock Option Plan, stock options
covering shares representing an aggregate of up to 10% of the shares of Common
Stock issued in the Conversion including the Stock Contribution may be granted
to directors, officers and employees of the Holding Company or its subsidiaries
under the Stock Option Plan.
Options granted under the Stock Option Plan may be either options that
qualify under the Code as "incentive stock options" (options that afford
preferable tax treatment to recipients upon compliance with certain restrictions
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and that do not normally result in tax deductions to the employer) or options
that do not so qualify. The exercise price of stock options granted under the
Stock Option Plan is required to be at least equal to the fair market value per
share of the stock on the date of grant. All grants are made in consideration of
past and future services rendered to the Bank, and in an amount deemed necessary
to encourage the continued retention of the officers and directors who are
considered necessary for the continued success of the Bank. In this regard, all
options are intended to vest in five equal annual installments commencing one
year from the date of grant, subject to the continued service of the holder of
such option.
The proposed Stock Option Plan provides for the grant of stock
appreciation rights ("SARs") at any time, whether or not the participant then
holds stock options, granting the right to receive the excess of the market
value of the shares represented by the SARs on the date exercised over the
exercise price. SARs generally will be subject to the same terms and conditions
and exercisable to the same extent as stock options.
Limited SARs may be granted at the time of, and must be related to, the
grant of a stock option or SAR. The exercise of one will reduce to that extent
the number of shares represented by the other. Limited SARs will be exercisable
only for the 45 days following the expiration of the tender or exchange offer,
during which period the related stock option or SAR will be exercisable.
However, no SAR or Limited SAR will be exercisable by a 10% beneficial owner,
director or senior officer within six months of the date of its grant. The
Holding Company has no present intention to grant any SARs or Limited SARs.
The proposed Stock Option Plan will be administered by the Holding
Company's Salary Review Committee which will consist of at least two
disinterested directors. The Salary Review Committee will select the recipients
and terms of awards made pursuant to the Stock Option Plan. OTS regulations
limit the amount of shares that may be awarded pursuant to stock-based plans to
each individual officer, each non-employee director and all non-employee
directors as a group to 25%, 5% and 30%, respectively, of the total shares
reserved for issuance under each such stock-based plan.
The Salary Review Committee, presently consisting of non-employee
Directors Terry Gawryk, Chrysta Wereszczak and Steve Babyk, intends to grant
options in amounts expressed as a percentage of the shares issued in the
Conversion, as follows: President Kulas - 2.5% and to all executive officers as
a group (5 persons) - 5.4%. In addition, under the terms of the Stock Option
Plan, the Chairman of the Board and each non-employee director of the Holding
Company at the time of stockholder ratification of the Stock Option Plan will be
granted an option to purchase shares of Common Stock equal to .5% and .314%,
respectively, of the shares sold in the Conversion, including the Stock
Contribution. The remaining balance of the available awards is unallocated and
reserved for future use. All options will expire 10 years after the date such
option was granted, which, for the option grants listed above, is expected to be
the date of stockholder ratification of the Stock Option Plan. All proposed
option grants to officers are subject to modification by the Salary Review
Committee based upon its performance evaluation of the option recipients at the
time of stockholder ratification of the Stock Option Plan following completion
of the Conversion.
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After stockholder ratification, the Stock Option Plan will be funded
either with shares purchased in the open market or with authorized but unissued
shares of Common Stock. The use of authorized but unissued shares to fund the
Stock Option Plan could dilute the holdings of stockholders who purchased Common
Stock in the Conversion. See "Pro Forma Data." In no event will the Stock Option
Plan acquire an amount of shares, which, in the aggregate, represent more than
10% of the shares issued in the Conversion.
Under SEC regulations, so long as certain criteria are met, an optionee
may be able to exercise the option at the applicable purchase price and
immediately sell the underlying shares at the then-current market price without
incurring short-swing profit liability. This ability to exercise and immediately
resell, which under the SEC regulations applies to stock option plans in
general, allows the optionee to realize the benefit of an increase in the market
price for the stock without the market risk which would be associated with a
required holding period for the stock after payment of the exercise price. All
grants are subject to ratification of the Stock Option Plan by stockholders of
the Holding Company following completion of the Conversion.
Recognition and Retention Plan. The Holding Company intends to
establish the RRP in order to provide employees with a proprietary interest in
the Holding Company in a manner designed to encourage such persons to remain
with the Holding Company and the Bank. The RRP will be subject to ratification
by stockholders at a meeting to be held not earlier than six months after the
completion of the Conversion. The Holding Company will contribute funds to the
RRP to enable it to acquire in the open market or from authorized but unissued
shares (with the decision between open market or authorized but unissued shares
based on the Holding Company's future stock price, alternate investment
opportunities and capital needs), following stockholder ratification of such
plan, an amount of stock equal to 4.0% of the shares of Common Stock issued in
the Conversion, including the shares to be issued to the Foundation.
The Salary Review Committee of the Board of Directors of the Holding
Company will administer the proposed RRP. Under the terms of the proposed RRP,
awards ("Awards") can be granted to key employees in the form of shares of
Common Stock held by the RRP. Awards are non-transferable and non-assignable.
OTS regulations limit the amount of shares that may be awarded pursuant to
stock-based plans to each individual officer, each non-employee director and all
non-employee directors as a group to 25%, 5% and 30%, respectively, of the total
shares reserved for issuance under each such stock-based plan.
Recipients will earn (i.e., become vested in), over a period of time,
the shares of Common Stock covered by the Award. Awards made pursuant to the RRP
will vest in not less than five equal annual installments commencing one year
from the date of grant. Awards will be 100% vested upon termination of
employment due to death or disability. In addition, no awards under the RRP to
directors and executive officers shall vest in any year in which the Bank is not
meeting all of its fully phased-in capital requirements. When shares become
vested and are actually distributed in accordance with the RRP, but in no event
prior to such time, the participants will also receive amounts equal to any
accrued dividends with respect thereto. Earned shares are distributed to
recipients as soon as practicable following the date on which they are earned.
The Salary Review Committee presently intends to grant restricted stock
awards at the Purchase Price, in amounts expressed as a percentage of the shares
sold in the Conversion, including the Stock Contribution, as follows: to
President Kulas - 1.0% and to all
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executive officers as a group (5 persons) - 2.2%. Pursuant to the terms of the
proposed RRP, the Chairman of the Board and each non-employee director of the
Holding Company at the time of stockholder ratification of the RRP will be
awarded an amount of shares equal to .2% and .125%, respectively, of the shares
sold in the Conversion including the Stock Contribution. All proposed RRP awards
to officers of the Bank are subject to modification by the Salary Review
Committee based upon its performance evaluation of the award recipients at the
time of stockholder ratification of the RRP following completion of the
Conversion.
After stockholder ratification, the RRP will be funded either with
shares purchased in the open market or with authorized but unissued shares of
Common Stock issued to the RRP by the Holding Company. The use of authorized but
unissued shares to fund the RRP could dilute the holdings of stockholders who
had purchased Common Stock in the Conversion. In the event the RRP purchases
stock in the open market at prices above the initial Purchase Price, the total
RRP expense may be above that disclosed under the caption "Pro Forma Data." In
no event will the RRP acquire an amount of shares which, in the aggregate,
represent more than 4.0% of the shares issued in the Conversion.
Certain Transactions
The Bank follows a policy of granting loans to the Bank's directors,
officers and employees. The loans to executive officers and directors are made
in the ordinary course of business and on the same terms and conditions as those
of comparable transactions prevailing at the time (except that the underwriting
fee is waived), in accordance with the Bank's underwriting guidelines and do not
involve more than the normal risk of collectibility or present other unfavorable
features. All loans to directors and executive officers cannot exceed 5% of the
Bank's capital and unimpaired surplus, whichever is greater, unless a majority
of the Board of Directors approves the credit in advance and the individual
requesting the credit abstains from voting. Loans to all directors and executive
officers and their associates, including outstanding balances and commitments
totaled $48,000 at April 30, 1997, which was 0.2% of the Bank's retained
earnings at that date. There were no loans to any single director, executive
officer or their affiliates made at preferential rates or terms which in the
aggregate exceeded $60,000 during the three most recent fiscal years.
THE CONVERSION
The Board of Directors of the Bank and the OTS have approved the Plan
of Conversion. OTS approval does not constitute a recommendation or endorsement
of the Plan of Conversion. Certain terms used in the following summary of the
material terms of the Conversion are defined in the Plan of Conversion, a copy
of which may be obtained by contacting First Security.
General
The Board of Directors of the Bank unanimously adopted the Plan,
subject to approval by the OTS and the members of the Bank. Pursuant to the
Plan, the Bank will convert from a federally chartered mutual savings bank to a
federally chartered stock savings bank, with the concurrent formation of a
holding company.
The Conversion will be accomplished through amendment of the Bank's
federal charter to authorize capital stock, at which time the Bank will become a
wholly owned subsidiary of the Holding Company. The Conversion will be accounted
for as a pooling of interests.
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Subscription Rights have been granted to the Eligible Account Holders
as of December 31, 1995, Tax-Qualified Employee Plans of the Bank and Holding
Company, Supplemental Eligible Account Holders as of _______, 1997, Other
Members, and directors, officers, and employees of the Bank. Additionally,
subject to the availability of shares and market conditions at or near the
completion of the Subscription Offering, the Common Stock may be offered for
sale in a Direct Community Offering to selected persons on a best-efforts basis
through FBR. See "- Offering of Holding Company Common Stock." Subscriptions for
shares will be subject to the maximum and minimum purchase limitations set forth
in the Plan of Conversion.
Stock Contribution to the Charitable Foundation
General. As a reflection of the Bank's long-standing commitment to the
local community, the Bank established during 1996 The Heritage Foundation of
First Security Federal Savings Bank, Inc., a private charitable foundation under
the Illinois General Not For Profit Corporation Act (the "Foundation"). The
Foundation was established as a means of supporting the needs of the local
community while simultaneously increasing the visibility and reputation of the
Bank. The Foundation was initially funded by the Bank through a series of cash
contributions aggregating $2.5 million, all of which were accrued by the Bank
during the fourth quarter of 1996. In addition, under the Plan and subject to
member approval, the Holding Company will contribute to the Foundation 250,000
shares of its Common Stock. The Stock Contribution will either be in the form of
a direct contribution or a sale of the shares for their aggregate par value
($2,500).
In the future, the Company may make additional contributions to the
Foundation, although the Company has no current plans regarding the amount or
timing of any such future contributions. The amount of future contributions, if
any, will be determined based upon, among other factors, an assessment of the
Company's then current financial position, operations, and prospects and on the
need for charitable activities in the Bank's market area. Any such contribution,
regardless of form, will result in an increase in non-interest expense and thus
a reduction in net earnings. In addition, any contribution of authorized but
unissued shares would dilute the interests of outstanding shares. However, the
Company currently anticipates that any contribution of shares by it to the
Foundation will be funded through shares repurchased in the open market. The
Company does not intend to make any contributions to the Foundation which are
not deductible for Federal Income Tax purposes.
The Stock Contribution will be considered as a separate matter from the
proposal to approve the Plan of Conversion. If the Bank's members approve the
Plan of Conversion, but not the Stock Contribution, the Bank intends to complete
the Conversion without the Stock Contribution. Failure to approve the Stock
Contribution may materially affect the pro forma market value of the Common
Stock. If the resulting pro forma market value of the Common Stock to be sold in
the Offering is less than $35.0 million or more than $54.5 million, or if the
OTS otherwise requires a resolicitation, the Bank will establish a new Estimated
Valuation Range and commence a resolicitation of subscribers. In the event of a
resolicitation, unless an affirmative response is received within a specified
period of time, all funds will be promptly returned to investors, as described
elsewhere herein. See "-- Stock Pricing and - Number of Shares to be Issued."
Purpose of the Stock Contribution. The purpose of the Foundation is to
provide funding to support charitable purposes within the communities in which
the Bank operates. The Bank has long emphasized community lending and community
development activities and currently has a satisfactory rating under the
Community Reinvestment Act ("CRA"). The Foundation is a complement to the Bank's
existing community activities, not a replacement for such activities.
The Foundation is a means of supporting the needs of the local
community while simultaneously increasing the visibility and reputation of the
Bank. The Holding Company and the Bank believe that the funding of the
Foundation with Common Stock of the Holding Company is a means of establishing a
common bond between the Bank and the communities in which the Bank operates
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thereby enabling such communities to share in the potential growth and success
of the Holding Company over the long-term. Although the Stock Contribution will
result in a reduction in the Holding Company's conversion appraisal and pro
forma capital (although not in its pro forma capital per share), the Board
believes that the Stock Contribution will enhance the long term value of the
Bank's franchise by increasing customer loyalty as well as the size of its
customer base. The Board believes that customer loyalty and community support
are critical for the success of community oriented institutions such as the
Bank.
The Board believes that the Stock Contribution will enable the
Foundation to support charitable activities during periods when the Holding
Company may not be in a position to support such activities. (Similarly, the
Stock Contribution would enable the Foundation to offset the impact of
variations in contribution levels by accumulating funds during periods of
relatively large contributions from the Holding Company and disbursing such
funds during periods of relatively small contributions.) In addition, the Board
believes that the Stock Contribution will have a highly beneficial public
relations impact. Finally, the Board believes that the Stock Contribution will
facilitate the participation of non-Holding Company personnel in charitable
activities. The Board believes that the Stock Contribution represents an
opportunity to make a significant charitable contribution which will benefit the
Holding Company and the Bank at a time when they have adequate capital, they are
not yet subject to possible earnings pressure resulting from the Holding
Company's status as a public company and there is a need for charitable
donations in the Bank's market area.
Structure of the Foundation. The Foundation is a private foundation
under the Code. As a private foundation, the Foundation will be required to
distribute annually in grants or donations at least 5% of its net investment
assets. The Foundation is dedicated to the promotion of charitable purposes
within the communities in which the Bank operates, including, but not limited
to, providing grants or donations to support cultural activities, not-for-profit
medical facilities, elder and youth care, community groups and other types of
organizations or projects. While the Foundation is authorized to engage directly
in charitable activities, in order to limit overhead costs, the Foundation's
primary activity currently consists of making grants to other charitable
organizations.
The authority for the affairs of the Foundation is vested in the Board
of Trustees of the Foundation which is comprised of Chairman Nadzikewycz,
President Kulas and Director Gawryk. Although all of the Foundation's initial
trustees were selected by the Bank, future Foundation trustees may be nominated
and elected only by its Board of Trustees. As a result, the Board of Trustees is
self-perpetuating.
The Foundation's articles of incorporation provide that the earnings of
the Foundation shall not result in any private benefit for its members, trustees
or officers. In addition, it is anticipated that the Foundation will adopt a
conflicts of interest policy to protect against inappropriate insider benefits.
While these provisions would not prohibit the payment of reasonable compensation
for services rendered, the members of the Board of Trustees do not currently
receive fees for such service. Currently, the Foundation does not have any paid
employees.
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The trustees are responsible for establishing and carrying out the
policies of the Foundation with respect to grants or donations by the
Foundation, consistent with the purposes for which the Foundation was
established. The trustees of the Foundation are also responsible for directing
the activities of the Foundation, and managing its assets.
While the Foundation does not currently intend to purchase any shares
of the Common Stock on the open market, it is authorized to do so. The OTS has
informed the Holding Company that any such purchases would be deemed to be
repurchases by the Holding Company for the purposes of the OTS restrictions on
post-conversion stock repurchases. See "Use of Proceeds."
Under the order of the OTS approving the Bank's conversion application,
all shares of Common Stock held by the Foundation, including those acquired
pursuant to the Stock Contribution, must be voted in the same ratio as all other
shares of the Holding Company's Common Stock on all proposals considered by
stockholders of the Holding Company; provided, however, that the OTS will waive
this voting restriction under certain circumstances if compliance with the
restriction would: (i) cause a violation of the law of the State of Illinois and
the OTS determines that federal law would not preempt the application of the
laws of the State of Illinois to the Foundation; (ii) cause the Foundation to
lose its tax-exempt status or otherwise have a material and adverse tax
consequence on the Foundation; or (iii) cause the Foundation to be subject to an
excise tax under Section 4941 of the Code. In order for the OTS to waive such
voting restriction, the Holding Company's or the Foundation's legal counsel must
render an opinion satisfactory to OTS that compliance with the voting
restriction would have the effect described in clauses (i), (ii) or (iii) above.
Under those circumstances, the OTS will grant a waiver of the voting
restrictions upon submission of such legal opinion(s) by the Holding Company or
the Foundation. In the event that the OTS waives the voting restriction, the
trustees would direct the voting of the Common Stock held by the Foundation.
However, a condition to the OTS approval of the Conversion provides that in the
event such voting restriction is waived or becomes unenforceable, the Director
of the OTS, or his designees, at that time may impose conditions on the
composition of the board of trustees of the Foundation or such other conditions
or restrictions relating to the control of the Common Stock held by the
Foundation, any of which could limit the ability of the board of trustees of the
Foundation to control the voting of the Common Stock held by the Foundation. The
Company has no current intention to seek such a waiver.
There are no agreements or understandings with trustees of the
Foundation regarding the exercise of control directly or indirectly, over the
management or policies of the Holding Company or the Bank, including agreements
related to voting, acquisition or disposition of the Holding Company's stock. As
trustees of a nonprofit corporation, trustees of the Foundation are at all times
bound by their fiduciary duty to advance the Foundation's charitable goals, to
protect the assets of the Foundation and to act in a manner consistent with the
charitable purposes for which the Foundation is established.
It is currently anticipated that the Foundation will adopt a policy
addressing affiliated transactions between the Foundation and the Holding
Company or the Bank. Transactions between the Foundation and the Bank will
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comply with applicable provisions of Sections 23A and 23B of the Federal Reserve
Act, as amended, and the OTS conflicts of interests rules. Additionally, the
Holding Company (but not the Bank) may provide office space and administrative
support to the Foundation without charge provided that such actions comply with
applicable conflicts of interests restrictions.
The Stock Contribution. The Foundation was initially funded with an
aggregate of $2.5 million of contributions from the Bank. These contributions
were accrued during 1996. In addition, under the terms of the Plan, the Holding
Company will contribute, either in the form of a donation or in a sale for their
aggregate par value ($.01 per share), 250,000 shares to the Foundation, subject
to stockholder approval. Such Stock Contribution, once made, will not be
recoverable by the Holding or the Bank. The Holding Company and the Bank
determined to make the Stock Contribution with Common Stock rather than cash
because it desired to form a bond with its community in a manner that would
allow the community to share in the potential growth and success of the Holding
Company and the Bank over the long term. The funding of the Stock Contribution
with stock also provides the Foundation with a potentially larger endowment than
if the Holding Company contributed cash to the Foundation since, as a
shareholder, the Foundation will share in the potential growth and success of
the Holding Company. As such, the Stock Contribution of stock to the Foundation
has the potential to provide a self-sustaining funding mechanism which reduces
the amount of cash that the Holding Company, if it were not making the stock
contribution, would have to contribute to the Foundation in future years in
order to maintain a level amount of charitable grants and donations.
One of the conditions imposed on the gift of Common Stock by the
Holding Company is that the amount of Common Stock that may be sold by the
Foundation in any one year shall not exceed 5% of the average market value of
the assets held by the Foundation, except where the board of directors of the
Foundation, by three-fourths vote, determines that the failure to sell an amount
of common stock greater than such amount would result in a long-term reduction
of the value of the Foundation's assets and as such would jeopardize the
Foundation's capacity to carry out its charitable purposes. While there may be
greater risk associated with a one-stock portfolio in comparison to a
diversified portfolio, the Holding Company believes any such risk is mitigated
by the ability of the Foundation's trustees to sell more than 5% of its stock in
such circumstances. Upon completion of the Conversion and the Stock
Contribution, the Holding Company would have 3,749,000, 4,367,000 and 4,985,000
shares issued and outstanding at the minimum, midpoint and maximum of the
Estimated Valuation Range. Because the Holding Company will have an increased
number of shares outstanding, the voting and ownership interest of shareholders
in the Holding Company's common stock would be diluted by 5.7% at the midpoint,
as compared to their interests in the Holding Company if the Stock Contribution
were not made. For additional discussion of the dilutive effect, see "Comparison
of Valuation and Pro Forma Information With No Stock Contribution" and "Pro
Forma Data."
If the Stock Contribution is approved by the members, the Holding
Company will recognize a $2.5 million expense (offset, in part, by a
corresponding tax deduction), during the quarter in which the Conversion is
completed, which is expected to be the third or fourth quarter of fiscal 1997.
Assuming the contribution of $2.5 million of stock, the Holding Company
estimates a net tax effected expense of $1.5 million. Such expense will likely
eliminate earnings in the quarter recognized and have a material adverse impact
on the Holding Company's earnings for fiscal
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year 1997. If the Stock Contribution had been made at April 30, 1997, the Bank
would have reported a net loss of $739,000 for the four months ended April 30,
1997 rather than net income of $761,000. For further discussion of the
Foundation and its impact on purchasers in the Conversion, see "Risk Factors -
Risks Associated with the Stock Contribution to the Charitable Foundation" and
"Pro Forma Data."
Although the Stock Contribution will be accrued in the third or fourth
quarter of 1997 as described above, such contribution may be paid at any time
during the twelve month period following the completion of the Conversion. The
reason for permitting the Holding Company to pay the Stock Contribution in more
than one tax year is that the five year tax carry forward period commences on
the date of payment rather than the date of accrual and thus that, by paying the
initial contribution over more than one tax year, the Holding Company can
lengthen the period over which the Stock Contribution may be carried forward for
tax purposes. See "--Tax Considerations" below.
Because the funding of the Foundation will result in dilution, it
reduced the estimated value of the stock to be sold in the Conversion by
approximately $3.8 million at the midpoint of the Estimated Valuation Range. As
a result, the pro forma capital of the Holding Company will be $3.8 million
lower at the midpoint of the Estimated Valuation Range than it would have been
without the Foundation. However, because of the lower number of shares which are
being offered (as a result of the lower appraisal), per share capital and
earnings will be essentially identical. See "Comparison of Valuation and Pro
Forma Information with No Stock Contribution."
As a result of the $3.8 million reduction in the amount of shares
offered for sale in the Offering caused by the Stock Contribution, the amount of
shares purchased by directors and executive officers, assuming the sale of the
midpoint number of shares, increased from 4.6% to 5.1% of the shares sold. See
"The Conversion--Participation by the Board and Executive Officers."
Tax Considerations. The Holding Company has been advised by its
independent accountants that the Foundation qualifies as a 501(c)(3) exempt
organization under the Code, and is classified as a private foundation rather
than a public charity. A private foundation typically receives its support from
one person or one corporation whereas a public charity receives its support from
the public. The Foundation has submitted a request to the IRS to be recognized
as an exempt organization. As long as the IRS approves the application, the
effective date of the Foundation's status as a Section 501(c)(3) organization
will be the date of its organization.
A legal opinion of the OTS which addresses the establishment of
charitable foundations by savings associations opines that as a general rule
funds contributed to a charitable foundation should not exceed the deductible
limitation set forth in the Code, and if an association's contributions exceed
the deductible limit, such action must be justified by the board of directors.
In addition, under Delaware law, the Holding Company is authorized by statute to
make charitable contributions and case law has recognized the benefits of such
contributions to a Delaware corporation. In this regard, Delaware case law
provides that a charitable gift must merely be within reasonable limits as to
amount and purpose to be valid. Under the Code, the Holding Company may deduct
up to 10% of its taxable income in any one year and any contributions made by
the Holding Company in excess of the deductible amount will be deductible for
federal tax purposes over each of the five succeeding taxable years. The Holding
Company and the Bank believe that the conversion presents a unique opportunity
to make the Stock Contribution given the substantial amount of additional
capital being
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raised in the Conversion. In making such a determination, the Holding Company
and the Bank considered the dilutive impact of the Stock Contribution on the
conversion appraisal. See "Comparison of Valuation and Pro Forma Information
with No Stock Contribution." Based on such considerations, the Holding Company
and Bank believe that the Stock Contribution to the Foundation in excess of the
10% annual limitation is justified given the Bank's capital position and its
earnings, the substantial additional capital being raised in the Conversion and
the potential benefits of the Foundation to the Bank's community. In this
regard, assuming the sale of the Common Stock at the midpoint of the Estimated
Valuation Range, the Holding Company would have pro forma consolidated capital
of $65.9 million and the Bank's pro forma tangible, core and risk-based capital
ratios would be 16.2%, 16.2% and 35.3%, respectively. See "Regulatory Capital
Compliance," "Capitalization," and "Comparison of Valuation and Pro Forma
Information with No Stock Contribution." Thus, the amount of the Stock
Contribution will not adversely impact the financial condition of the Holding
Company and the Bank, and the Holding Company and the Bank therefore believe
that the amount of the charitable contribution is reasonable given the Holding
Company and the Bank's pro forma capital positions. As such, the Holding Company
and the Bank believe that the Stock Contribution does not raise safety and
soundness concerns.
The Holding Company and the Bank have received an opinion of their
independent accountants that the Holding Company's contribution of its own stock
to the Foundation will not constitute an act of self-dealing, and that the
Holding Company will be entitled to a deduction in the amount of the $2.5
million, subject to a limitation based on 10% of the Holding Company's annual
taxable income. The Holding Company, however, would be able to carry forward any
unused portion of the deduction for five years following the year in which the
contribution is made for federal and Illinois tax purposes.
The Holding Company currently estimates that substantially all of the
Stock Contribution should be deductible. However, no assurances can be made that
the Holding Company will have sufficient pre-tax income over the periods
following the year in which the contributions are made to utilize fully the
carryover related to the excess contribution.
Although the Holding Company has received an opinion of its independent
accountants that the Holding Company is entitled to a deduction for the Stock
Contribution, there can be no assurances that the IRS will recognize the
Foundation as a Section 501(c)(3) exempt organization or that the deduction will
be permitted. In such event, the Holding Company's contribution to the
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foundation would be expensed without tax benefit, resulting in a reduction in
earnings in the year in which the IRS makes such a determination. See "Risk
Factors - Risks Associated with the Stock Contribution to the Charitable
Foundation." In cases of willful, flagrant or repeated acts or failures to act
which result in violations of the IRS rules governing private foundations, a
private foundation's status as a private foundation may be involuntarily
terminated by the IRS. In such event, the managers of a private foundation could
be liable for excise taxes based on such violations and the private foundation
could be liable for a termination tax under the Code. The Foundation's
certificate of incorporation provides that it shall have a perpetual existence.
In the event, however, the Foundation were subsequently dissolved as a result of
a loss of its tax exempt status, the Foundation would be required under the Code
and its articles of incorporation to distribute any assets remaining in the
Foundation at that time for one or more exempt purposes within the meaning of
Section 501(c)(3) of the Code, or to distribute such assets to the federal
government, or to a state or local government, for a public purpose.
As a private foundation, earnings and gains, if any, from the sale of
Common Stock or other assets are exempt from federal and state corporate
taxation. However, investment income, such as interest, dividends and capital
gains, will be subject to a federal excise tax of 2.0%. The Foundation will be
required to make an annual filing with the IRS within four and one-half months
after the close of the Foundation's fiscal year to maintain its tax-exempt
status. The Foundation will be required to publish a notice that the annual
information return will be available for public inspection for a period of 180
days after the date of such public notice. The information return for a private
foundation must include, among other things, an itemized list of all grants made
or approved, showing the amount of each grant, the recipient, any relationship
between a grant recipient and the Foundation's managers and a concise statement
of the purpose of each grant.
Regulatory Conditions Imposed on the Foundation. The Stock Contribution
is subject to the following conditions imposed by the OTS: (i) the Foundation
will be subject to examination by the OTS, at the Foundation's own expense; (ii)
the Foundation must comply with supervisory directives imposed by the OTS; (iii)
the Foundation will provide annual reports to the OTS describing grants made and
grant recipients; (iv) the Foundation will operate in accordance with written
policies adopted by the board of trustees, including a conflict of interest
policy; (v) the Foundation will not engage in self-dealing and will comply with
all laws necessary to maintain its tax-exempt status; and (vi) any shares of
Common Stock of the Holding Company held by the Foundation must be voted in the
same ratio as all other shares of the Holding Company's Common Stock on all
proposals considered by stockholders of the Holding Company; provided, however,
that the OTS will waive this voting restriction under certain circumstances if
compliance with the voting restriction would: (a) cause a violation of the law
of the State of Illinois and the OTS determines the federal law does not preempt
the application of the laws of the State of Illinois to the Foundation; (b)
cause the Foundation to lose its tax-exempt status or otherwise have a material
and adverse tax consequence on the Foundation; or (c) cause the Foundation to be
subject to an excise tax under Section 4941 of the Code. In order for the OTS to
waive such voting restriction, the Holding Company's or the Foundation's legal
counsel must render an opinion satisfactory to OTS that compliance with the
voting restriction would have the effect described in clauses (a), (b) or (c)
above. There can be no assurances that either a legal or tax opinion addressing
these issues will be rendered, or if rendered, that the OTS will grant an
unconditional waiver of the voting restriction. In this regard, a condition to
the OTS approval of the Conversion provides that in the event such voting
restriction is waived or becomes unenforceable, the Director of the OTS, or his
designees, at that time may impose conditions on the composition of the board of
trustees of the Foundation to control the voting of Common Stock held by the
Foundation. In no event will the voting restriction survive the sale of shares
of the Common Stock held by the Foundation.
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The Stock Contribution is subject to the approval of a majority of the
total outstanding votes of the Bank's members eligible to be cast at the Special
Meeting. The Stock Contribution will be considered as a separate matter from
approval of the Plan of Conversion. If the Bank's members approve the Plan of
Conversion, but not the Stock Contribution, the Bank intends to complete the
Conversion without the Stock Contribution. Failure to approve the Foundation may
materially increase the pro forma market value of the Common Stock being offered
since the Estimated Valuation Range, as set forth herein, takes into account the
after-tax impact of the Stock Contribution. See "Pro Forma Data."
Business Purposes
First Security has several business purposes for the Conversion. The
sale of Holding Company Common Stock will have the immediate result of providing
the Bank with additional equity capital in order to support the expansion of its
existing operations, subject to market conditions. See "Business." The sale of
the Common Stock is the most effective means of increasing the Bank's permanent
capital and does not involve the high interest cost and repayment obligation of
subordinated debt. In addition, investment of that part of the net Conversion
proceeds paid by the Holding Company to the Bank is expected to provide
additional operating income to further increase the Bank's capital on a
continuing basis.
The Board of Directors of the Bank believes that a holding company
structure could facilitate the acquisition of both mutual and stock savings
institutions in the future as well as other companies. If a multiple holding
company structure is utilized in a future acquisition, the acquired savings
institution would be able to operate on a more autonomous basis as a wholly
owned subsidiary of the Holding Company rather than as a division of the Bank.
For example, the acquired savings institution could retain its own directors,
officers and corporate name as well as having representation on the Board of
Directors of the Holding Company. As of the date hereof, there are no plans or
understandings regarding the acquisition of any other institutions.
The Board of Directors of the Bank also believes that a holding company
structure can facilitate the diversification of the Bank's business activities.
While diversification will be maximized if a unitary holding company structure
is utilized because the types of business activities permitted to a unitary
holding company are broader than those of a multiple holding company, either
type of holding company may engage in a broader range of activities than may a
thrift institution directly. Currently, there are no plans that the Holding
Company engage in any material activities apart from holding the shares of the
Bank and investing the remaining net proceeds from the sale of Common Stock in
the Conversion.
The preferred stock and additional common stock of the Holding Company
being authorized in the Conversion will be available for future acquisitions and
for issuance and sale to raise additional equity capital, generally without
stockholder approval or ratification, but subject to market conditions. Although
the Holding Company currently has no plans with respect to future issuances of
equity securities, the more flexible operating structure provided by the Holding
Company and the stock form of ownership is expected to assist the Bank in
competing more aggressively with other financial institutions in its principal
market area.
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The Conversion will structure the Bank in the stock form used in the
United States by all commercial banks, most major business corporations and an
increasing number of savings institutions. The Conversion will permit the Bank's
members to become stockholders of the Holding Company, thereby allowing members
to own stock in the financial organization in which they maintain deposit
accounts or with which they have a borrowing relationship. Such ownership should
encourage stockholders to promote the Bank to potential customers, thereby
further contributing to the Bank's earnings potential.
The Bank is also expected to benefit from its management and employees
owning stock, because stock ownership is viewed as an effective performance
incentive and a means of attracting, retaining and compensating personnel.
Effects of Conversion to Stock Form on Depositors and Borrowers of the Bank
Voting Rights. Deposit account holders will have no voting rights in
the converted Bank or the Holding Company and will therefore not be able to
elect directors of either entity or to control their affairs. These rights are
currently accorded to deposit account holders with regard to the Bank.
Subsequent to Conversion, voting rights will be vested exclusively in the
Holding Company as the sole stockholder of the Bank. Voting rights as to the
Holding Company will be held exclusively by its stockholders. Each purchaser of
Holding Company Common Stock shall be entitled to vote on any matters to be
considered by the Holding Company stockholders. A stockholder will be entitled
to one vote for each share of Common Stock owned, subject to certain limitations
applicable to holders of 10% or more of the shares of the Common Stock. See
"Description of Capital Stock."
Deposit Accounts and Loans. The general terms of the Bank's deposit
accounts, the balances of the individual accounts and the existing FDIC
insurance coverage will not be affected by the Conversion. Furthermore, the
Conversion will not affect the loan accounts, the balances of these accounts, or
the obligations of the borrowers under their individual contractual arrangements
with the Bank.
Tax Effects. The Bank has received an opinion from Silver, Freedman &
Taff, L.L.P. with regard to federal income taxation, and an opinion from Crowe
Chizek & Co. with regard to Illinois taxation, to the effect that the adoption
and implementation of the Plan of Conversion set forth herein will not be
taxable for federal or Illinois tax purposes to the Bank or the Holding Company.
See "- Income Tax Consequences."
Liquidation Rights. The Bank has no plans to liquidate, either before
or subsequent to the completion of the Conversion. However, if there should ever
be a complete liquidation, either before or after Conversion, deposit account
holders would receive the protection of insurance by the FDIC up to applicable
limits. Subject thereto, liquidation rights before and after Conversion would be
as follows:
Liquidation Rights in Present Mutual Institution. In addition to the
protection of FDIC insurance up to applicable limits, in the event of a
complete liquidation of the Bank, each holder of a deposit account in
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the Bank in its present mutual form would receive his or her pro rata
share of any assets of the Bank remaining after payment of claims of
all creditors (including the claims of all depositors in the amount of
the withdrawal value of their accounts). Such holder's pro rata share
of such remaining assets, if any, would be in the same proportion of
such assets as the balance in his or her deposit account was to the
aggregate balance in all deposit accounts in the Bank at the time of
liquidation.
Liquidation Rights in Proposed Converted Institution. After Conversion,
each deposit account holder, in the event of a complete liquidation of
the Bank, would have a claim of the same general priority as the claims
of all other general creditors of the Bank in addition to the
protection of FDIC insurance up to applicable limits. Therefore, except
as described below, the deposit account holder's claim would be solely
in the amount of the balance in his or her deposit account plus accrued
interest. The holder would have no interest in the assets of the Bank
above that amount.
The Plan of Conversion provides that there shall be established, upon
the completion of the Conversion, a special "liquidation account" for
the benefit of Eligible Account Holders (i.e., eligible depositors at
December 31, 1995) and Supplemental Account Holders (eligible
depositors at ________ __, 1997) in an amount equal to the net worth of
the Bank as of the date of its latest consolidated statement of
financial condition contained in the final prospectus relating to the
sale of shares of Holding Company Common Stock in the Conversion. Each
Eligible Account Holder and Supplemental Eligible Account Holder would
have an initial interest in such liquidation account for each deposit
account held in the Bank on the qualifying date. An Eligible Account
Holder and Supplemental Eligible Account Holder's interest as to each
deposit account would be in the same proportion of the total
liquidation account as the balance in his or her account on December
31, 1995 and ________ __, 1997, respectively, was to the aggregate
balance in all deposit accounts of Eligible Account Holders and
Supplemental Eligible Account Holders on such dates. However, if the
amount in the deposit account of an Eligible Account Holder or
Supplemental Eligible Account Holder on any annual closing date of the
Bank is less than the lowest amount in such account on December 31,
1995 or _________ __, 1997 and on any subsequent closing date, then the
account holder's interest in this special liquidation account would be
reduced by an amount proportionate to any such reduction, and the
account holder's interest would cease to exist if such deposit account
were closed.
In addition, the interest in the special liquidation account would
never be increased despite any increase in the balance of the account
holders' related accounts after Conversion, and would only decrease.
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Any assets remaining after the above liquidation rights of Eligible
Account Holders and Supplemental Eligible Account Holders were
satisfied would be distributed to the Holding Company as the sole
stockholder of the Bank.
No merger, consolidation, purchase of bulk assets with assumption of
deposit accounts and other liabilities, or similar transaction, whether
the Bank, as converted, or another SAIF-insured institution is the
surviving institution, is deemed to be a complete liquidation for
purposes of distribution of the liquidation account and, in any such
transaction, the liquidation account would be assumed to the full
extent authorized by regulations of the OTS as then in effect. The OTS
has stated that the consummation of a transaction of the type described
in the preceding sentence in which the surviving entity is not a
SAIF-insured institution would be reviewed on a case-by-case basis to
determine whether the transaction should constitute a "complete
liquidation" requiring distribution of any then remaining balance in
the liquidation account. While the Bank believes that such a
transaction should not constitute a complete liquidation, there can be
no assurance that the OTS will not adopt a contrary position.
Common Stock. For information as to the characteristics of the Common
Stock to be issued under the Plan of Conversion, see "Dividends" and
"Description of Capital Stock." Common Stock issued under the Plan of Conversion
cannot, and will not, be insured by the FDIC or any other governmental agency.
The Bank will continue, immediately after completion of the Conversion,
to provide its services to depositors and borrowers pursuant to its existing
policies and will maintain the existing management and employees of the Bank.
Other than for payment of certain expenses incident to the Conversion, no assets
of the Bank will be distributed in the Conversion. First Security will continue
to be a member of the FHLB System, and its deposit accounts will continue to be
insured by the FDIC. The affairs of First Security will continue to be directed
by the existing Board of Directors and management.
Offering of Holding Company Common Stock
Under the Plan of Conversion, 4,735,000 shares of Holding Company
Common Stock will be offered for sale, subject to certain restrictions described
below, initially through the Offering. Federal conversion regulations require,
with certain exceptions, that all shares offered in a conversion be sold in
order for the conversion to become effective.
The Subscription Offering will expire at noon, Chicago, Illinois time,
on ________, 1997 (the "Subscription Expiration Date") unless extended by the
Bank and the Holding Company. Depending on the availability of shares and market
conditions at or near the completion of the Subscription Offering, the Holding
Company may effect a Public Offering of shares to selected persons through FBR.
To order Common Stock in connection with the Public Offering and Direct
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Community Offering, if any, an executed stock order and account withdrawal
authorization and certification must be received by FBR prior to the termination
of the Public Offering and Direct Community Offering. The date by which orders
must be received in the Public Offering, if any, will be set by the Holding
Company at the time of such offering. OTS regulations require that all shares to
be offered in the Conversion be sold within a period ending not more than 45
days after the Subscription Expiration Date (or such longer period as may be
approved by the OTS) or, despite approval of the Plan of Conversion by members,
the Conversion will not be effected and First Security will remain in mutual
form. This period expires on _____, 1997, unless extended with the approval of
the OTS. In addition, if the Offering is extended beyond _____, 1997, all
subscribers will have the right to modify or rescind their subscriptions and to
have their subscription funds returned promptly with interest. In the event that
the Conversion is not effected, all funds submitted and not previously refunded
pursuant to the Offering will be promptly refunded to subscribers with interest
at the Bank's current passbook rate and all withdrawal authorizations will be
terminated.
Stock Pricing and Number of Shares to be Issued
Federal regulations require that the aggregate purchase price of the
securities of a thrift institution sold in connection with its conversion must
be based on an appraised aggregate market value of the institution as converted
(i.e., taking into account the expected receipt of proceeds from the sale of the
securities in the conversion), as determined by an independent valuation.
FinPro, which is experienced in the valuation and appraisal of business
entities, including thrift institutions involved in the conversion process, was
retained by the Bank to prepare an appraisal of the estimated pro forma market
value of the Bank and the Holding Company upon Conversion.
FinPro will receive a fee of approximately $23,000 for its appraisal in
addition to its reasonable out-of-pocket expenses incurred in connection with
the appraisal. FinPro has also agreed to assist in the preparation of the Bank's
business plan and to perform certain records management services for the Bank
for such fee. The Bank has agreed to indemnify FinPro under certain
circumstances against liabilities and expenses (including legal fees) arising
out of, related to, or based upon the Conversion.
FinPro has prepared an appraisal of the estimated pro forma market
value of the Bank as converted. The FinPro appraisal concluded that, at April
30, 1997, an appropriate range for the estimated pro forma market value of the
common stock to be sold in the Offering was from a minimum of $34,990,000 to a
maximum of $47,350,000 with a midpoint of $41,170,000. Assuming that the shares
are sold at $10.00 per share in the Conversion, the estimated number of shares
to be issued in the Conversion (not including the Stock Contribution) is
expected to be between 3,499,000 and 4,735,000. The Purchase Price of $10.00 per
share was determined by discussion among the Boards of Directors of the Bank,
the Holding Company and FinPro, taking into account, among other factors, (i)
the requirement under OTS regulations that the Common Stock be offered on a
manner that would achieve the widest distribution of shares and (ii) liquidity
in the Common Stock subsequent to the Conversion.
The appraisal involved a comparative evaluation of the operating and
financial statistics of the Bank with those of other thrift institutions. The
appraisal also took into account such other factors as the market for thrift
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institution stocks generally, prevailing economic conditions, both nationally
and in Illinois, which affect the operations of thrift institutions, the
competitive environment within which the Bank operates and the effect of the
Bank becoming a subsidiary of the Holding Company. No detailed individual
analysis of the separate components of the Holding Company's and the Bank's
assets and liabilities was performed in connection with the evaluation. The Plan
of Conversion requires that all of the shares subscribed for in the Offering be
sold at the same price per share. The Board of Directors reviewed the appraisal,
including the methodology and the appropriateness of the assumptions utilized by
FinPro and determined that in its opinion the appraisal was not unreasonable.
The Estimated Valuation Range may be amended with the approval of the OTS in
connection with changes in the financial condition or operating results of the
Bank or market conditions generally. As described below, an amendment to the
Estimated Valuation Range above $54,450,000 would not be made without a
resolicitation of subscriptions and/or proxies except in limited circumstances.
If, upon completion of the Offering, at least the minimum number of
shares are subscribed for, FinPro, after taking into account factors similar to
those involved in its prior appraisal, will determine its estimate of the pro
forma market value of the Bank and the Holding Company upon Conversion, as of
the close of the Offering.
If, based on the estimate of FinPro, the aggregate pro forma market
value is not within the Estimated Valuation Range, FinPro, upon the consent of
the OTS, will determine a new Estimated Valuation Range ("Amended Valuation
Range"). If the aggregate pro forma market value of the stock to be sold in the
Offering has increased in the Amended Valuation Range to an amount that does not
exceed $54,450,000 (i.e., 15% above the maximum of the Estimated Valuation
Range), then the number of shares to be issued may be increased to accommodate
such increase in value without a resolicitation of subscriptions and/or proxies.
In such event the Bank and the Holding Company do not intend to resolicit
subscriptions and/or proxies unless the Bank and the Holding Company then
determine, after consultation with the OTS, that circumstances otherwise require
such a resolicitation. If, however, the aggregate pro forma market value of the
Common Stock to be sold of the Holding Company, at that time is less than $35.0
million or more than $54.5 million, a resolicitation of subscribers and/or
proxies may be made, the Plan of Conversion may be terminated or such other
actions as the OTS may permit may be taken. In the event that upon completion of
the Offering, the pro forma market value of the Common Stock to be sold is below
$35.0 million or above $54.5 million (15% above the maximum of the Estimated
Valuation Range), the Holding Company intends to file the revised appraisal with
the SEC by post-effective amendment to its Registration Statement on Form S-1.
See "Additional Information." If the Plan of Conversion is terminated, all funds
would be returned promptly with interest at the rate of the Bank's current
passbook rate, and holds on funds authorized for withdrawal from deposit
accounts would be released. If there is a resolicitation of subscriptions,
subscribers will be given the opportunity to cancel or change their
subscriptions and to the extent subscriptions are so canceled or reduced, funds
will be returned with interest at the Bank's current passbook rate and holds on
funds authorized for withdrawal from deposit accounts will be released or
reduced. Stock subscriptions received by the Holding Company and the Bank may
not be withdrawn by the subscriber and, if accepted by the Holding Company and
the Bank, are final. If the Conversion is not completed prior to ______________
(two years after the date of the Special Meeting), the Plan of Conversion will
automatically terminate.
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Any increase in the total number of shares of Common Stock to be
offered in the Conversion will dilute a subscriber's percentage ownership
interest and will reduce the pro forma net income and net worth on a per share
basis. A decrease in the number of shares to be issued in the Conversion will
increase a subscriber's proportionate ownership interest and will increase both
pro forma net income and net worth on a per share basis while decreasing that
amount on an aggregate basis.
No sale of the shares will take place unless, prior thereto, FinPro
confirms to the OTS that, to the best of FinPro's knowledge and judgment,
nothing of a material nature has occurred which would cause FinPro to conclude
that the actual Purchase Price on an aggregate basis is incompatible with its
estimate of the aggregate pro forma market value of the Holding Company and the
Bank as converted at the time of the sale. If, however, the facts do not justify
such a statement, the Offering or other sale may be canceled, a new Estimated
Valuation Range set and new offering held.
In preparing its valuation of the pro forma market value of the Bank
and the Holding Company upon Conversion, FinPro relied upon and assumed the
accuracy and completeness of all financial and statistical information provided
by the Bank and the Holding Company. FinPro also considered information based
upon other publicly available sources which it believes are reliable. However,
FinPro does not guarantee the accuracy and completeness of such information and
did not independently verify the financial statements and other data provided by
the Bank and the Holding Company or independently value the assets or
liabilities of the Bank and the Holding Company. The appraisal is not intended
to be, and must not be interpreted as, a recommendation of any kind as to the
advisability of voting to approve the Conversion or of purchasing shares of
Common Stock. The appraisal considers First Security and the Holding Company
only as going concerns and should not be considered as any indication of the
liquidation value of First Security or the Holding Company. Moreover, the
appraisal is necessarily based on many factors which change from time to time.
There can be no assurance that persons who purchase shares in the Conversion
will be able to sell such shares at prices at or above the Purchase Price.
Subscription Offering
In accordance with OTS regulations, non-transferable Subscription
Rights have been granted under the Plan of Conversion to the following persons
in the following order of priority: (1) Eligible Account Holders (deposit
account holders of the Bank maintaining an aggregate balance of $50 or more as
of December 31, 1995), (2) the Holding Company and the Bank's Tax-Qualified
Employee Plans; provided, however, that the Tax-Qualified Employee Plans shall
have first priority Subscription Rights to the extent that the total number of
shares of Common Stock sold in the Conversion exceeds the maximum of the
Estimated Valuation Range; (3) Supplemental Eligible Accounts Holders (deposit
account holders of the Bank maintaining a balance of $50 or more as of _____ __,
1997), (4) Other Members (depositors of the Bank at the close of business on
________ and Borrowers of the Bank on ________________ and _________, 1997, the
voting record date for the Special Meeting) and (5) officers, directors and
employees of the Bank. All subscriptions received will be subject to the
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availability of Holding Company Common Stock after satisfaction of all
subscriptions of all persons having prior rights in the Subscription Offering,
and to the maximum and minimum purchase limitations set forth in the Plan of
Conversion.
Category No. 1 is reserved for the Bank's Eligible Account Holders.
Subscription Rights to purchase shares under this category will be allocated
among Eligible Account Holders to permit each such depositor to purchase shares
in this Category in an amount equal to the greater of $250,000 of Common Stock,
one-tenth of one percent (.10%) of the total shares offered in the Conversion,
or 15 times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be issued by a
fraction of which the numerator is the amount of the qualifying deposits of the
Eligible Account Holder and the denominator is the total amount of the
qualifying deposit of the Eligible Account Holders in the Bank, in each case on
the Eligibility Record Date. To the extent shares are oversubscribed in this
category, shares shall be allocated first to permit each subscribing Eligible
Account Holder to purchase, to the extent possible, 100 shares and thereafter
among each subscribing Eligible Account Holder pro rata in the same proportion
that his Qualifying Deposit bears to the total Qualifying Deposits of all
subscribing Eligible Account Holders whose subscriptions remain unsatisfied.
Category No. 2 provides for the issuance of Subscription Rights to
Tax-Qualified Employee Plans to purchase up to 10% of the total amount of shares
of Common Stock issued in the Subscription Offering on a second priority basis.
However, such plans shall not, in the aggregate, purchase more than 10% of the
Holding Company Common Stock issued. The ESOP intends to purchase a total of 8%
of the Common Stock issued in the Conversion, including the shares issued
pursuant to the Stock Contribution, under this category. Subscription Rights
received pursuant to this category shall be subordinated to all rights received
by Eligible Account Holders to purchase shares pursuant to Category No. 1;
provided, however, that notwithstanding any provision of the Plan of Conversion
to the contrary, the Tax-Qualified Employee Plans shall have first priority
Subscription Rights to the extent that the total number of shares of Common
Stock sold in the Conversion exceeds the maximum of the Estimated Valuation
Range.
Category No. 3 is reserved for the Bank's Supplemental Eligible Account
Holders. Subscription Rights to purchase shares under this category will be
allocated among Supplemental Eligible Account Holders to permit each such
depositor to purchase shares in this Category in an amount equal to the greater
of $250,000 of Common Stock, one-tenth of one percent (.10%) of the total shares
of Common Stock offered in the Conversion, or 15 times the product (rounded down
to the next whole number) obtained by multiplying the total number of shares of
Common Stock to be issued by a fraction of which the numerator is the amount of
the qualifying deposit of the Supplemental Eligible Account Holder and the
denominator is the total amount of the qualifying deposit of the Supplemental
Eligible Account Holders in the converting Bank in each case on ______ __, 1997
(the "Supplemental Eligibility Record Date"), subject to the overall purchase
limitation after satisfying the subscriptions of Eligible Account Holders and
Tax Qualified Employee Plans. Any non-transferable Subscription Rights received
by an Eligible Account Holder shall reduce, to the extent thereof, the
subscription rights to be distributed to such person as a Supplemental Eligible
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Account Holder. In the event of an oversubscription for shares, the shares
available shall be allocated first to permit each subscribing Supplemental
Eligible Account Holder, to the extent possible, to purchase a number of shares
sufficient to make his total allocation (including the number of shares, if any,
allocated in accordance with Category No. 1) equal to 100 shares, and thereafter
among each subscribing Supplemental Eligible Account Holder pro rata in the same
proportion that his Qualifying Deposit bears to the total Qualifying Deposits of
all subscribing Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied.
Category No. 4 provides, to the extent that shares are then available
after satisfying the subscriptions of Eligible Account Holders, Tax-Qualified
Employee Plans and Supplemental Eligible Account Holders, for the issuance of
Subscription Rights to Other Members to purchase in this Category up to the
greater of $250,000 of Common Stock, or one-tenth of one percent (.10%) of the
Common Stock offered in the Conversion. In the event of an oversubscription, the
shares available shall be allocated among the subscribing Other Members pro rata
in the same proportion that his number of votes on the Voting Record Date bears
to the total number of votes on the Voting Record Date of all subscribing Other
Members on such date. Such number of votes shall be determined based on the
Bank's mutual charter and bylaws in effect on the date of approval by members of
this Plan of Conversion.
Category No. 5 provides for the issuance of Subscription Rights to
officers, directors and employees of the Bank, to purchase in this Category up
to $250,000 of the Common Stock to the extent that shares are available after
satisfying the subscriptions of eligible subscribers in preference Categories 1,
2, 3 and 4. The total number of shares which may be purchased under this
Category may not exceed 20% of the number of shares of Holding Company Common
Stock. In the event of an oversubscription, the available shares will be
allocated pro rata among all subscribers in this category based on the number of
shares ordered by each subscriber.
Public Offering and Direct Community Offering
To the extent that shares remain available and subject to market
conditions at or near the completion of the Subscription Offering, the Holding
Company may offer shares pursuant to the Plan to selected persons in a Public
Offering and/or Direct Community Offering on a best-efforts basis through FBR in
such a manner as to promote a wide distribution of the Common Stock. Any orders
received in connection with the Public Offering and Direct Community Offering if
any, will receive a lower priority than orders properly made in the Subscription
Offering by persons properly exercising Subscription Rights. In addition
depending on market conditions, FBR may utilize selected broker-dealers
("Selected Dealers") in connection with the sale of shares in the Public
Offering, if any. Common Stock sold in the Public Offering and Direct Community
Offering will be sold at $10.00 per share and hence will be sold at the same
price as all other shares in the Conversion. The Holding Company and the Bank
have the right to reject orders, in whole or in part, in their sole discretion
in the Public Offering and Direct Community Offering.
No person, together with any associate or group of persons acting in
concert, will be permitted to purchase more than $250,000 of Common Stock in the
Public Offering and Direct Community Offering. To order Common Stock in
connection with the Public Offering or Direct Community Offering, if any, an
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executed stock order and account withdrawal authorization and certification must
be received by FBR prior to the termination of such Offering. The date by which
orders must be received in the Public Offering and Direct Community Offering
will be set by the Holding Company at the time of commencement of such offering;
provided however, if the Offering is extended beyond _______, 1997, each
subscriber will have the opportunity to maintain, modify or rescind his or her
subscription. In such event, all subscription funds will be promptly returned
with interest to each subscriber unless he or she affirmatively indicates
otherwise.
It is estimated that the Selected Dealers will receive a negotiated
commission of up to 4.5% of the Common Stock sold by the Selected Dealers,
payable by the Holding Company, and FBR will also receive a fee of 1.0% of
Common Stock sold by such firms. Such fees in the aggregate will not exceed
5.5%. See "- Marketing Arrangements.
FBR may enter into agreements with Selected Dealers to assist in the
sale of shares in the Public Offering. Selected Dealers may only solicit
indications of interest from their customers to place orders with the Holding
Company as of a certain date ("Order Date") for the purchase of shares of
Conversion Stock with the authorization of FBR. When and if FBR and the Holding
Company believe that enough indications of interest and orders have been
received to consummate the Conversion, FBR will request, as of the Order Date,
Selected Dealers to submit orders to purchase shares for which they have
received indications of interest from their customers. Selected Dealers will
send confirmation of the orders to such customers on the next business day after
the Order Date. Customers who authorize Selected Dealers to debit their
brokerage accounts are required to have the funds for payment in their account
on but not before the closing date of the Conversion. On the closing date,
Selected Dealers will remit funds to the account that the Holding Company
established for each Selected Dealer. Each customer's funds so forwarded to the
Holding Company, along with all other accounts held in the same title, will be
insured up to the applicable legal limit. After payment has been received by the
Holding Company from Selected Dealers, funds will earn interest at the Bank's
passbook rate until the completion of the Offering. In the event the Conversion
is not consummated as described above, funds with interest will be returned
promptly to the Selected Dealers, who, in turn, will promptly credit their
customers' brokerage account.
In the event the Holding Company determines to conduct a Public
Offering and/or Direct Community Offering, persons to whom a prospectus is
delivered may subscribe for shares of Common Stock by submitting a completed
stock order and account withdrawal authorization (provided by FBR) and an
executed certification along with immediately available funds (which may be
obtained by debiting a FBR account) to FBR by not later than the public offering
expiration date (as established by the Holding Company). Promptly upon receipt
of available funds, together with a properly executed stock order and account
withdrawal authorization and certification, FBR will forward such funds to First
Security to be deposited in a subscription escrow account.
If a subscription in the Public Offering and/or Direct Community
Offering is accepted, promptly after the completion of the Conversion, a
certificate for the appropriate amount of shares will be forwarded to FBR as
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nominee for the beneficial owner. In the event that a subscription is not
accepted or the Conversion is not consummated, the Bank will promptly refund
with interest the subscription funds to FBR which will then return the funds to
subscribers' accounts. If the aggregate pro forma market value of the Common
Stock to be sold in the Offering is less than $35.0 million or more than $54.5
million, each subscriber will have the right to modify or rescind his or her
subscription.
The opportunity to subscribe for shares of Common Stock in the Public
Offering and/or Direct Community Offering is subject to the right of the Bank
and the Holding Company, in their sole discretion, to accept or reject any such
orders in whole or in part.
Additional Purchase Restrictions
The Plan also provides for certain additional limitations to be placed
upon the purchase of shares in the Conversion. Specifically, no person (other
than a Tax-Qualified Employee Plan) by himself or herself or with an associate,
and no group of persons acting in concert, may subscribe for or purchase more
than $750,000 of Common Stock. For purposes of this limitation, an associate of
a person does not include a Tax-Qualified Employee Plan or Non-Tax Qualified
Employee Plan in which the person has a substantial beneficial interest or
serves as a trustee or in a similar fiduciary capacity. Moreover, for purposes
of this paragraph, shares held by one or more Tax Qualified or Non-Tax Qualified
Employee Plans attributed to a person shall not be aggregated with shares
purchased directly by or otherwise attributable to that person except for that
portion of a plan which is self-directed by a person. See "- Stock Pricing and
Number of Shares to be Issued" regarding potential changes in Subscription
Rights in the event of a decrease in the number of shares to be issued in the
Conversion. Officers and directors and their associates may not purchase, in the
aggregate, more than 30% of the shares to be sold in the Conversion. For
purposes of the Plan, the members of the Board of Directors are not deemed to be
acting in concert solely by reason of their Board membership. For purposes of
this limitation, an associate of an officer or director does not include a
Tax-Qualified Employee Plan. Moreover, any shares attributable to the officers
and directors and their associates, but held by a Tax-Qualified Employee Plan
(other than that portion of a plan which is self-directed) shall not be included
in calculating the number of shares which may be purchased under the limitations
in this paragraph. Shares purchased by employees who are not officers or
directors of the Bank, or their associates, are not subject to this limitation.
The term "associate" is used above to indicate any of the following
relationships with a person: (i) any corporation or organization (other than the
Holding Company or the Bank or a majority-owned subsidiary of the Holding
Company or the Bank) of which a person is an officer or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
security; (ii) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a similar
fiduciary capacity; and (iii) any relative or spouse of such person or any
relative of such spouse who has the same home as such person or who is a
director or officer of the Holding Company or the Bank or any subsidiary of the
Holding Company or the Bank.
The Boards of Directors of the Holding Company and the Bank, in their
sole discretion, may increase the maximum purchase limitations referred to above
up to 9.99% of the total shares to be offered in the Offering, provided that
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orders for shares exceeding 5.0% of the shares being offered in the Offering
shall not exceed, in the aggregate, 10% of the shares being offered in the
Offering or decrease the maximum purchase limitation to one percent of the
Common Stock offered in the Conversion. Requests to purchase additional shares
of Common Stock under this provision will be allocated by the Boards of
Directors on a pro rata basis giving priority in accordance with the priority
rights set forth above. Depending on market and financial conditions, the Boards
of Directors of the Holding Company and the Bank, with the approval of the OTS
and without further approval of the members, may increase or decrease any of the
above purchase limitations.
To the extent that shares are available, each subscriber must subscribe
for a minimum of 25 shares. In computing the number of shares to be allocated,
all numbers will be rounded down to the next whole number.
Common Stock purchased in the Conversion will be freely transferable
except for shares purchased by executive officers and directors of the Bank or
the Holding Company. See "- Restrictions on Transfer of Subscription Rights and
Shares."
Marketing Arrangements
First Security has retained FBR, a broker-dealer registered with the
Securities and Exchange Commission (the "SEC") and a member of the National
Association of Securities Dealers, Inc. (the "NASD"), to consult with and advise
the Bank and to assist in the distribution of shares in the Offering on a
best-efforts basis. Among the services FBR will perform are (i) training and
educating First Security employees, who will be performing certain ministerial
functions in the Offering, regarding the mechanics and regulatory requirements
of the stock sale process, (ii) keeping records of orders for shares of Common
Stock, (iii) targeting First Security's sales efforts including preparation of
marketing materials, (iv) assisting in the collection of proxies from Members
for use at the Special Meeting, and (v) providing its registered stock
representatives to staff the Stock Center and meeting with and assisting
potential subscribers. For its services, FBR will receive a success fee of 1.0%
of the aggregate Purchase Price of Common Stock sold in the Offering, excluding
Common Stock purchased by directors, officers and employees of the Bank, or
members of their immediate families and purchases by tax-qualified plans. A
management fee of $20,000, is being applied against this fee. If the Offering is
terminated before completion, FBR will be entitled to retain such payments
already accrued or received.
To the extent registered broker-dealers are utilized, the Holding
Company will pay a fee (to be negotiated, but not to exceed 4.5% of the
aggregate Purchase Price of shares of Common Stock sold in the Public Offering
and Direct Community Offering) to such Selected Dealers, including any
sponsoring dealer fees. The Holding Company will also pay FBR a fee of 1.0% of
the aggregate Purchase Price of shares of Common Stock sold in the Offering by
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Selected Dealers, which together with the fee to be paid to Selected Dealers
will result in an aggregate fee not to exceed 5.5% of the Common Stock sold in
the Offering. Fees paid to FBR and to any other broker-dealer may be deemed to
be underwriting fees, and FBR and such other broker-dealers may be deemed to be
underwriters. The Holding Company has agreed to reimburse FBR for its reasonable
out-of-pocket expenses (not to exceed $50,000), and its legal fees and expenses
(not to exceed $37,500) and to indemnify FBR against certain claims or
liabilities, including certain liabilities under the Securities Act.
In the event there is a Public Offering or Direct Community Offering,
procedures may be implemented to permit a purchaser to pay for his or her shares
with funds held by or deposited with FBR or a "Selected Dealer." See "- Public
Offering and Direct Community Offering."
Directors and executive officers of the Holding Company and the Bank
may, to a limited extent, participate in the solicitation of offers to purchase
Common Stock. Sales will be made from a Stock Center located away from the
publicly accessible areas (including teller windows) of the Bank's offices.
Other employees of the Bank may participate in the Offering in administrative
capacities, providing clerical work in effecting a sales transaction or
answering questions of a potential purchaser provided that the content of the
employee's responses is limited to information contained in this Prospectus or
other offering document. Other questions of prospective purchasers will be
directed to executive officers or registered representatives of FBR. Such other
employees have been instructed not to solicit offers to purchase Common Stock or
provide advice regarding the purchase of Common Stock. To the extent permitted
under applicable law, directors and executive officers of the Holding Company
and the Bank may participate in the solicitation of offers to purchase Common
Stock, except in the State of Texas where only a representative of FBR will be
able to offer and sell securities to Texas residents. The Holding Company will
rely on Rule 3a4-1 under the Exchange Act and sales of Common Stock will be
conducted within the requirements of Rule 3a4-1, so as to permit officers,
directors and employees to participate in the sale of Common Stock. No officer,
director or employee of the Holding Company or the Bank will be compensated in
connection with his participation by the payment of commissions or other
remuneration based either directly or indirectly on the transactions in the
Common Stock.
A Stock Center will be established at the Bank's headquarters office,
in an area separated from the Bank's banking operations. In addition,
representatives of FBR will be available to answer questions at a designated
area in the Bank's Philadelphia office which is located away from publicly
accessible areas of that office. No sales activities will be conducted in the
public areas of the Bank's offices, but persons will be able to obtain a
Prospectus and sales information at such places, and employees will inform
prospective purchasers to direct their questions to the Stock Center and will
provide such persons with the telephone number of the Stock Center. Completed
stock orders will be accepted at such places, and will be promptly forwarded to
the Stock Center for processing. No officer, director or employee of the Bank
will be compensated in connection with his participation by the payment of
commissions or other remuneration based either directly or indirectly on the
transactions in the Common Stock.
The Bank and the Holding Company will make reasonable efforts to comply
with the securities laws of all states in the United States in which persons
entitled to subscribe for shares, pursuant to the Plan of Conversion, reside.
However, no shares will be offered or sold under the Plan of Conversion to any
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such person who (1) resides in a foreign country or (2) resides in a state of
the United States in which a small number of persons otherwise eligible to
subscribe for shares under the Plan of Conversion reside or as to which the Bank
and the Holding Company determine that compliance with the securities law of
such state would be impracticable for reasons of cost or otherwise, including,
but not limited to, a requirement that the Bank or the Holding Company or any of
their officers, directors or employees register, under the securities laws of
such state, as a broker, dealer, salesmen or agent. No payments will be made in
lieu of the granting of Subscription Rights to any such person.
Method of Payment for Subscriptions
To purchase shares in the Subscription Offering, an executed Order Form
with the required payment for each share subscribed for, or with appropriate
authorization for withdrawal from the Bank's deposit account (which may be given
by completing the appropriate blanks in the order form), must be received by the
Bank by noon, Chicago, Illinois time, on __________, 1997. Order forms which are
not received by such time or are executed defectively or are received without
full payment (or appropriate withdrawal instructions) are not required to be
accepted.
To order Common Stock in connection with the Public Offering and/or
Direct Community Offering, if any, an executed stock order and account
withdrawal authorization must be received by FBR prior to the termination of
such offering. The date by which orders must be received in the Public Offering
and Direct Community Offering will be set by the Holding Company at the time of
commencement of such offerings, if any; provided however, if the Offering is
extended beyond _____, 1997, each subscriber will have the opportunity to
maintain, modify or rescind his or her subscription. In such event, all
subscription funds will be promptly returned with interest to each subscriber
unless he or she affirmatively indicates otherwise. In addition, the Holding
Company and the Bank are not obligated to accept orders submitted on photocopies
or facsimile order forms.
The Holding Company and the Bank have the right to waive or permit the
correction of incomplete or improperly executed forms, but do not represent that
they will do so. Once received, an executed Order Form or stock order and
account withdrawal authorization may not be modified, amended or rescinded
without the consent of the Holding Company and the Bank unless the Conversion
has not been completed by _____, 1997.
Payment for subscriptions in the Subscription Offering, may be made (i)
in cash if delivered in person at the office of the Bank, (ii) by check or money
order or (iii) by authorization of withdrawal from deposit accounts maintained
with the Bank. Interest will be paid on payments made by cash, check, bank draft
or money order, whether or not the Conversion is complete or terminated, at the
Bank's current passbook rate from the date payment is received until the
completion or termination of the Conversion. If payment is made by authorization
of withdrawal from deposit or certificate accounts, the funds authorized to be
withdrawn from such account will continue to accrue interest at the contractual
rates until completion or termination of the Conversion. Such funds will be
unavailable to the depositor until completion or termination of the Conversion.
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If a subscriber authorizes the Bank to withdraw the amount of the
Purchase Price from his certificate account, the Bank will do so as of the
effective date of Conversion. The Bank will waive any applicable penalties for
early withdrawal from certificate accounts at First Security for the purpose of
purchasing Common Stock. If the remaining balance in a certificate account is
reduced below the applicable minimum balance requirement at the time that the
funds actually are transferred under the authorization, the rate paid on the
remaining balance of the certificate will earn interest at the then-current
passbook rate.
A depositor interested in using his or her IRA funds to purchase Common
Stock must do so through a self-directed IRA. Since the Bank does not offer such
accounts, it will allow a depositor to make a trustee-to-trustee transfer of the
IRA funds to a trustee offering a self-directed IRA program with the agreement
that such funds will be used to purchase the Holding Company's Common Stock in
the Offering. There will be no early withdrawal or IRS interest penalties for
such transfers. The new trustee would hold the Common Stock in a self-directed
account in the same manner as the Bank now holds the depositor's IRA funds. An
annual administrative fee may be payable to the new trustee. Depositors
interested in using funds in a Bank IRA to purchase Common Stock should contact
the Stock Center at the Bank as soon as possible so that the necessary forms may
be forwarded for execution and returned prior to the Expiration Date.
The ESOP will not be required to pay for the shares subscribed for at
the time it subscribes, but rather, may pay for such shares of Common Stock
subscribed for the Purchase Price upon consummation of the Conversion, provided
that there is in force from the time of its subscription until such time, a loan
commitment to lend to the ESOP, at such time, the aggregate Purchase Price of
the shares for which it subscribed.
For information regarding the submission of orders in connection with
the Public Offering and Direct Community Offering, see "- Public Offering and
Direct Community Offering."
All refunds and any interest due will be paid after completion of the
Conversion. Certificates representing shares of Common Stock purchased will be
mailed to purchasers at the last address of such persons appearing on the
records of the Bank, or to such other address as may be specified in properly
completed order forms, as soon as practicable following consummation of the sale
of all shares of Common Stock. Any certificates returned as undeliverable will
be disposed of in accordance with applicable law.
To ensure that each purchaser receives a prospectus at least 48 hours
prior to the Expiration Date in accordance with Rule 15c2-8 under the Exchange
Act, no prospectus will be mailed any later than five days prior to such date or
hand delivered any later than two days prior to such date. Execution of the
Order Form will confirm receipt or delivery in accordance with Rule 15c2-8.
Order Forms will only be distributed with a prospectus. The Bank will accept for
processing only orders submitted on original Order Forms. Photocopies or
facsimile copies of Order Forms will not be accepted. Payment by cash, check,
money order, bank draft or debit authorization to an existing account at the
Bank must accompany the Order Form. No wire transfers will be accepted.
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In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priorities, depositors as of the Eligibility Record Date (December 31,
1995), Supplemental Eligibility Record Date (_______ __, 1997) and/or the Voting
Record Date (_____ __, 1997) must list all accounts on the Order Form giving all
names on each account and the account number as of the applicable record date.
In addition to the foregoing, if shares are offered through Selected
Dealers, a purchaser may pay for his shares with funds held by or deposited with
a Selected Dealer. If an Order Form is executed and forwarded to the Selected
Dealer or if the Selected Dealer is authorized to execute the Order Form on
behalf of a purchaser, the Selected Dealer is required to forward the Order Form
and funds to the Bank for deposit in a segregated account on or before noon of
the business day following receipt of the Order Form or execution of the Order
Form by the Selected Dealer. Alternatively, Selected Dealers may solicit
indications of interest from their customers who indicated an interest and seek
their confirmation as to their intent to purchase. Those indicating an intent to
purchase shall forward executed Order Forms to their Selected Dealer or
authorize the Selected Dealer to execute such forms. The Selected Dealer will
acknowledge receipt of the order to its customer in writing on the following
business day and will debit such customer's account on the third business day
after the customer has confirmed his intent to purchase (the "debit date") and
on or before noon of the next business day following the debit date will send
Order Forms and funds to the Bank for deposit in a segregated account. If such
alternative procedure is employed, purchasers' funds are not required to be in
their accounts with Selected Dealers until the debit date.
Restrictions on Transfer of Subscription Rights and Shares
Prior to the completion of the Conversion, the OTS conversion
regulations prohibit any person with subscription rights, including the Eligible
Account Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account
Holders, Other Members and employees, officers and directors, from transferring
or entering into any agreement or understanding to transfer the legal or
beneficial ownership of the subscription rights issued under the Plan or the
shares of Common Stock to be issued upon their exercise. Such rights may be
executed only by the person to whom they are granted and only for his account.
Each person exercising such subscription rights will be required to certify that
he is purchasing shares solely for his own account and that he has no agreement
or understanding regarding the sale or transfer of such shares. The OTS
regulations also prohibit any person from offering or making an announcement of
an offer or intent to make an offer to purchase such subscription rights or
shares of Common Stock prior to the completion of the Conversion.
The Bank and the Holding Company may pursue any and all legal and
equitable remedies in the event they become aware of the transfer of
subscription rights and will not honor orders known by them to involve the
transfer of such rights.
Except as to directors and executive officers of the Bank and the
Holding Company, the shares of Common Stock sold in the Conversion will be
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freely transferable. Shares purchased by directors, executive officers or their
associates in the Conversion shall be subject to the restrictions that said
shares shall not be sold during the period of one year following the date of
purchase, except in the event of the death of the stockholder. Accordingly,
stock certificates issued by the Holding Company to directors, executive
officers and their associates shall bear a legend giving appropriate notice of
such restriction and, in addition, the Bank and the Holding Company will give
appropriate instructions to the transfer agent for the Common Stock with respect
to the applicable restriction upon transfer of any restricted shares. Any shares
issued at a later date as a stock dividend, stock split or otherwise, to holders
of restricted stock, shall be subject to the same restrictions that may apply to
such restricted stock. Holding Company stock (like the stock of most companies)
is subject to the requirements of the Securities Act. Accordingly, Holding
Company stock may be offered and sold only in compliance with registration
requirements or pursuant to an applicable exemption from registration.
Holding Company stock received in the Conversion by persons who are not
"affiliates" of the Holding Company may be resold without registration. Shares
received by affiliates of the Holding Company (primarily the directors, officers
and principal stockholders of the Holding Company) will be subject to the resale
restrictions of Rule 144 under the Securities Act, which are discussed below.
Rule 144 generally requires that there be publicly available certain
information concerning the Holding Company, and that sales thereunder be made in
routine brokerage transactions or through a market maker. If the conditions of
Rule 144 are satisfied, each affiliate (or group of persons acting in concert
with one or more affiliates) is entitled to sell in the public market, without
registration, in any three-month period, a number of shares which does not
exceed the greater of (i) 1% of the number of outstanding shares of Holding
Company stock, or (ii) if the stock is admitted to trading on a national
securities exchange or reported through the automated quotation system of a
registered securities bank, the average weekly reported volume of trading during
the four weeks preceding the sale.
Participation by the Board and Executive Officers
The directors and executive officers of First Security have indicated
their intention to purchase in the Conversion an aggregate of $2.1 million of
Common Stock, equal to 6.0%, 5.1%, 4.4% or 3.8% of the number of shares to be
issued in the Offering, at the minimum, midpoint, maximum and 15% above the
maximum of the Estimated Valuation Range, respectively. The following table sets
forth information regarding Subscription Rights to Common Stock intended to be
exercised by each of the directors of the Bank, including members of their
immediate family and their IRAs, and by all directors and executive officers as
a group. The following table assumes that 4,117,000 shares, the midpoint of the
Estimated Valuation Range, of Common Stock are issued at the Purchase Price of
$10.00 per share and that sufficient shares will be available to satisfy the
subscriptions indicated. The table does not include shares to be purchased
through the ESOP or awarded under the proposed RRP or proposed Stock Option
Plan.
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<TABLE>
<CAPTION>
Number of
Aggregate Shares at Percent of
Purchase $10.00 Shares at
Name Title Price per Share(1) Midpoint
---- ----- ----- ------------ --------
<S> <C> <C> <C> <C>
Julian Kulas Director, President and Chief Executive Officer $500,000 50,000 1.21
Paul Nadzikewycz Chairman of the Board 500,000 50,000 1.21
Steve Babyk Director 150,000 15,000 0.36
Lila Maria Bodnar Director, Recording Secretary 10,000 1,000 0.03
Myron Dobrowolsky Director 50,000 5,000 0.12
Terry Gawryk Director, Secretary 100,000 10,000 0.24
George Kawka Director 200,000 20,000 0.49
Jaroslav H. Sydorenko Director 10,000 1,000 0.03
Chrysta Wereszczak Director 100,000 10,000 0.24
Harry I. Kucewicz Chief Operating Officer, Treasurer 200,000 20,000 0.49
Mary H. Korb Vice President - Lending 100,000 10,000 0.24
Irene S. Subota Vice President - Savings 100,000 10,000 0.24
Adrian Hawryliw Vice President - Philadelphia Manager 100,000 10,000 0.24
----------- -------- -----
Total $2,120,000 212,000 5.14
========== ======= =====
- -----------
<FN>
(1) Does not include subscriptions by the ESOP, or options which are intended
to be granted under the proposed Stock Option Plan or restricted stock
awards which are intended to be granted under the proposed RRP, subject to
stockholder ratification of such plans.
</FN>
</TABLE>
Risk of Delay in Completion of the Offering
The completion of the sale of all unsubscribed shares in the Offering
will be dependent, in part, upon the Bank's operating results and market
conditions at the time of the Offering. Under the Plan of Conversion, all shares
offered in the Conversion must be sold within a period ending 24 months from the
date of the Special Meeting. While the Bank and the Holding Company anticipate
completing the sale of shares offered in the Conversion within this period, if
the Board of Directors of the Bank and the Holding Company are of the opinion
that economic conditions generally or the market for publicly traded thrift
institution stocks make undesirable a sale of the Common Stock, then the
Offering may be delayed until such conditions improve. If the Offering is
extended beyond _________, 1997, all subscribers will have the right to modify
or rescind their subscriptions and to have their subscription funds returned
with interest. There can be no assurance that the Offering will not be extended
as set forth above.
A material delay in the completion of the sale of all unsubscribed
shares in the Public Offering or otherwise may result in a significant increase
in the costs of completing the Conversion. Significant changes in the Bank's
operations and financial condition, the aggregate market value of the shares to
be issued in the Conversion and general market conditions may occur during such
material delay. In the event the Conversion is not consummated within 24 months
after the date of the Special Meeting of Members, the Bank would charge accrued
Conversion costs to then current period operations.
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Approval, Interpretation, Amendment and Termination
All interpretations of the Plan of Conversion, as well as the
completeness and validity of order forms and stock order and account withdrawal
authorizations, will be made by the Bank and the Holding Company and will be
final, subject to the authority of the OTS and the requirements of applicable
law. The Plan of Conversion provides that, if deemed necessary or desirable by
the Boards of Directors of the Bank and the Holding Company, the Plan of
Conversion may be substantively amended by the Boards of Directors of the Bank
and the Holding Company, as a result of comments from regulatory authorities or
otherwise, at any time with the concurrence of the OTS and the SEC. In the event
the Plan of Conversion is substantially amended, other than a change in the
maximum purchase limits set forth herein, the Holding Company intends to notify
subscribers of the change and to refund subscription funds with interest unless
subscribers affirmatively elect to increase, decrease or maintain their
subscriptions. The Plan of Conversion will terminate if the sale of all shares
is not completed within 24 months after the date of the Special Meeting of
Members. The Plan of Conversion may be terminated by the Boards of Directors of
the Holding Company and the Bank with the concurrence of the OTS, at any time. A
specific resolution approved by a two-thirds vote of the Boards of Directors of
the Holding Company and the Bank would be required to terminate the Plan of
Conversion prior to the end of such 24-month period.
Restrictions on Repurchase of Stock
For a period of three years following Conversion, the Holding Company
may not repurchase any shares of its capital stock, except in the case of an
offer to repurchase on a pro rata basis made to all holders of capital stock of
the Holding Company. Any such offer shall be subject to the prior approval of
the OTS. Furthermore, the Holding Company may not repurchase any of its stock
(i) if the result thereof would be to reduce the regulatory capital of the Bank
below the amount required for the liquidation account to be established pursuant
to OTS regulations and (ii) except in compliance with the requirements of the
OTS' capital distribution rule.
The above limitations are subject to the OTS conversion rules which
generally provide that the Holding Company may repurchase its capital stock
provided (i) no repurchases occur within one year following the Conversion
(subject to certain exceptions), (ii) repurchases during the second and third
year after conversion are part of an open market stock repurchase program that
does not allow for a repurchase of more than 5% of the Holding Company's
outstanding capital stock during a 12- month period, (iii) the repurchases do
not cause the Bank to become undercapitalized, and (iv) the Holding Company
provides notice to the OTS at lease 10 days prior to the commencement of a
repurchase program and the OTS does not object to such regulations. In addition,
the above limitations do not preclude repurchases of capital stock by the
Holding Company in the event applicable federal regulatory limitations are
subsequently liberalized.
Income Tax Consequences
Consummation of the Conversion is expressly conditioned upon prior
receipt by the Bank of either a ruling from the IRS or an opinion of Silver,
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Freedman & Taff, L.L.P. with respect to federal taxation, and an opinion of
Crowe, Chizek and Company LLP with respect to Illinois taxation, to the effect
that consummation of the Conversion will not be taxable to the converted Bank or
the Holding Company. The full text of the Silver, Freedman & Taff, L.L.P.
opinion, the FinPro Letter (hereinafter defined) and the Crowe, Chizek and
Company LLP opinion, which opinions are summarized herein, were filed with the
SEC as exhibits to the Holding Company's Registration Statement on Form S-1. See
"Additional Information."
An opinion which is summarized below has been received from Silver,
Freedman & Taff, L.L.P. with respect to the proposed Conversion of the Bank to
the stock form. The Silver, Freedman Taff, L.L.P. opinion states that (i) the
Conversion will qualify as a reorganization under Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended, and no gain or loss will be
recognized to the Bank in either its mutual form or its stock form by reason of
the proposed Conversion, (ii) no gain or loss will be recognized to the Bank in
its stock form upon the receipt of money and other property, if any, from the
Holding Company for the stock of the Bank; and no gain or loss will be
recognized to the Holding Company upon the receipt of money for Common Stock of
the Holding Company; (iii) the assets of the Bank in either its mutual or its
stock form will have the same basis before and after the Conversion; (iv) the
holding period of the assets of the Bank in its stock form will include the
period during which the assets were held by the Bank in its mutual form prior to
Conversion; (v) gain, if any, will be realized by the depositors of the Bank
upon the constructive issuance to them of withdrawable deposit accounts of the
Bank in its stock form, nontransferable subscription rights to purchase Holding
Company Common Stock and/or interests in the Liquidation Account (any such gain
will be recognized by such depositors, but only in an amount not in excess of
the fair market value of the subscription rights and Liquidation Account
interests received); (vi) the basis of the account holder's savings accounts in
the Bank after the Conversion will be the same as the basis of his or her
savings accounts in the Bank prior to the Conversion; (vii) the basis of each
account holder's interest in the Liquidation Account is assumed to be zero;
(viii) based on the FinPro Letter, as hereinafter defined, the basis of the
subscription rights will be zero; (ix) the basis of the Holding Company Common
Stock to its stockholders will be the purchase price thereof; (x) a
stockholder's holding period for Holding Company Common Stock acquired through
the exercise of subscription rights shall begin on the date on which the
subscription rights are exercised and the holding period for the Conversion
Stock purchased in the Offering will commence on the date following the date on
which such stock is purchased; (xi) the Bank in its stock form will succeed to
and take into account the earnings and profits or deficit in earnings and
profits, of the Bank, in its mutual form, as of the date of Conversion; (xii)
the Bank, immediately after Conversion, will succeed to and take into account
the bad debt reserve accounts of the Bank, in mutual form, and the bad debt
reserves will have the same character in the hands of the Bank after Conversion
as if no Conversion had occurred; and (xiii) the creation of the Liquidation
Account will have no effect on the Bank's taxable income, deductions or addition
to reserve for bad debts either in its mutual or stock form.
The opinion from Silver, Freedman & Taff, L.L.P. is based, among other
things, on certain assumptions, including the assumptions that the exercise
price of the Subscription Rights to purchase Holding Company Common Stock will
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be approximately equal to the fair market value of that stock at the time of the
completion of the proposed Conversion. With respect to the Subscription Rights,
the Bank will receive a letter from FinPro (the "FinPro Letter") which, based on
certain assumptions, will conclude that the Subscription Rights to be received
by Eligible Account Holders, Supplemental Eligible Account Holders and other
eligible subscribers do not have any economic value at the time of distribution
or at the time the Subscription Rights are exercised, whether or not a Public
Offering takes place.
The Bank has also received an opinion of Silver, Freedman & Taff,
L.L.P. to the effect that, based in part on the FinPro Letter: (i) no taxable
income will be realized by depositors as a result of the exercise of
non-transferable Subscription Rights to purchase shares of Holding Company
Common Stock at fair market value; (ii) no taxable income will be recognized by
borrowers, directors, officers and employees of the Bank on the receipt or
exercise of Subscription Rights to purchase shares of Holding Company Common
Stock at fair market value; and (iii) no taxable income will be realized by the
Bank or Holding Company on the issuance of Subscription Rights to eligible
subscribers to purchase shares of Holding Company Common Stock at fair market
value.
Notwithstanding the FinPro Letter, if the Subscription Rights are
subsequently found to have a fair market value and are deemed a distribution of
property, it is Silver, Freedman & Taff, L.L.P.'s opinion that gain or income
will be recognized by various recipients of the Subscription Rights (in certain
cases, whether or not the rights are exercised) and the Bank and/or the Holding
Company may be taxable on the distribution of the Subscription Rights.
With respect to Illinois taxation, the Bank has received an opinion
from Crowe, Chizek and Company LLP to the effect that the Illinois tax
consequences to the Bank, in its mutual or stock form, the Holding Company,
eligible account holders, parties receiving Subscription Rights, parties
purchasing conversion stock, and other parties participating in the Conversion
will be the same as the federal income tax consequences described above.
Unlike a private letter ruling, the opinions of Silver, Freedman &
Taff, L.L.P. and Crowe, Chizek and Company LLP, as well as the FinPro Letter,
have no binding effect or official status, and no assurance can be given that
the conclusions reached in any of those opinions would be sustained by a court
if contested by the IRS or the Delaware or Illinois tax authorities.
RESTRICTIONS ON ACQUISITIONS OF STOCK AND
RELATED TAKEOVER DEFENSIVE PROVISIONS
Although the Boards of Directors of the Bank and the Holding Company
are not aware of any effort that might be made to obtain control of the Holding
Company after Conversion, the Board of Directors, as discussed below, believe
that it is appropriate to include certain provisions as part of the Holding
Company's certificate of incorporation to protect the interests of the Holding
Company and its stockholders from takeovers which the Board of Directors of the
Holding Company might conclude are not in the best interests of the Bank, the
Holding Company or the Holding Company's stockholders.
The following discussion is a general summary of material provisions of
the Holding Company's certificate of incorporation and bylaws and certain other
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regulatory provisions which may be deemed to have an "anti-takeover" effect. The
following description of certain of these provisions is necessarily general and,
with respect to provisions contained in the Holding Company's certificate of
incorporation and bylaws and the Bank's proposed stock charter and bylaws,
reference should be made in each case to the document in question, each of which
is part of the Bank's Conversion Application filed with the OTS and the Holding
Company's Registration Statement filed with the SEC. See "Additional
Information."
Provisions of the Holding Company's Certificate of Incorporation and Bylaws
Directors. Certain provisions of the Holding Company's certificate of
incorporation and bylaws will impede changes in majority control of the Board of
Directors. The Holding Company's certificate of incorporation provides that the
Board of Directors of the Holding Company will be divided into three classes,
with directors in each class elected for three-year staggered terms except for
the initial directors. Thus, assuming a Board of nine directors, it would take
two annual elections to replace a majority of the Holding Company's Board. The
Holding Company's certificate of incorporation also provides that the size of
the Board of Directors may be increased or decreased only by a majority vote of
the whole Board or by a vote of 80% of the shares eligible to be voted at a duly
constituted meeting of stockholders called for such purpose. The bylaws also
pro- vide that any vacancy occurring in the Board of Directors, including a
vacancy created by an increase in the number of directors, shall be filled for
the remainder of the unexpired term by a majority vote of the directors then in
office. Finally, the bylaws impose certain notice and information requirements
in connection with the nomination by stockholders of candidates for election to
the Board of Directors or the proposal by stockholders of business to be acted
upon at an annual meeting of stockholders.
The certificate of incorporation provides that a director may only be
removed for cause by the affirmative vote of 80% of the shares eligible to vote.
Restrictions on Call of Special Meetings. The certificate of
incorporation of the Holding Company provides that a special meeting of
stockholders may be called only pursuant to a resolution of the Board of
Directors and for only such business as directed by the Board. Stockholders are
not authorized to call a special meeting.
Absence of Cumulative Voting. The Holding Company's certificate of
incorporation does not provide for cumulative voting rights in the election of
directors.
Authorization of Preferred Stock. The certificate of incorporation of
the Holding Company authorizes 500,000 shares of serial preferred stock, $.01
par value. The Holding Company is authorized to issue preferred stock from time
to time in one or more series subject to applicable provisions of law, and the
Board of Directors is authorized to fix the designations, powers, preferences
and relative participating, optional and other special rights of such shares,
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including voting rights (which could be multiple or as a separate class) and
conversion rights. In the event of a proposed merger, tender offer or other
attempt to gain control of the Holding Company that the Board of Directors does
not approve, it might be possible for the Board of Directors to authorize the
issuance of a series of preferred stock with rights and preferences that would
impede the completion of such a transaction. If the Holding Company issued any
preferred stock which disparately reduced the voting rights of the Common Stock
within the meaning of Rule 19c-4 under the Exchange Act, the Common Stock could
be required to be delisted from the Nasdaq System. An effect of the possible
issuance of preferred stock, therefore, may be to deter a future takeover
attempt. The Board of Directors has no present plans or understandings for the
issuance of any preferred stock and does not intend to issue any preferred stock
except on terms which the Board deems to be in the best interests of the Holding
Company and its stockholders.
Limitation on Voting Rights. The certificate of incorporation of the
Holding Company provides that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit"), be entitled or permitted to any vote in respect
of the shares held in excess of the Limit. This limitation would not inhibit any
person from soliciting (or voting) proxies from other beneficial owners for more
than 10% of the Common Stock or from voting such proxies. Beneficial ownership
is to be determined pursuant to Rule 13d-3 of the General Rules and Regulations
of the Exchange Act, and in any event includes shares beneficially owned by any
affiliate of such person, shares which such person or his affiliates (as defined
in the certificate of incorporation) have the right to acquire upon the exercise
of conversion rights or options and shares as to which such person and his
affiliates have or share investment or voting power but shall not include shares
beneficially owned by directors, officers and employees of the Bank or the
Holding Company. This provision will be enforced by the Board of Directors to
limit the voting rights of persons beneficially owning more than 10% of the
stock and thus could be utilized in a proxy contest or other solicitation to
defeat a proposal that is desired by a majority of the stockholders.
Procedures for Certain Business Combinations. The Holding Company's
certificate of incorporation requires that certain business combinations
(including transactions initiated by management) between the Holding Company (or
any majority-owned subsidiary thereof) and a 10% or more stockholder either (i)
be approved by at least 80% of the total number of outstanding voting shares,
voting as a single class, of the Holding Company, (ii) be approved by two-thirds
of the continuing Board of Directors (i.e., persons serving prior to the 10%
stockholder becoming such) or (iii) involve consideration per share generally
equal to that paid by such 10% stockholder when it acquired its block of stock.
It should be noted that, since the Board and management (13 persons)
intend to purchase approximately $2.1 million of the shares offered in the
Conversion and may control the voting of additional shares through the ESOP and
proposed RRP and Stock Option Plan, the Board and management may be able to
block the approval of combinations requiring an 80% vote even where a majority
of the stockholders vote to approve such combinations.
Amendment to Certificate of Incorporation and Bylaws. Amendments to the
Holding Company's certificate of incorporation must be approved by the Holding
Company's Board of Directors and also by a majority of the outstanding shares of
the Holding Company's voting stock, provided, however, that approval by at least
80% of the outstanding voting stock is generally required for certain provisions
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(i.e., provisions relating to number, classification, election and removal of
directors; amendment of bylaws; call of special stockholder meetings; offers to
acquire and acquisitions of control; director liability; certain business
combinations; power of indemnification; and amendments to provisions relating to
the foregoing in the certificate of incorporation).
The bylaws may be amended by a majority vote of the Board of Directors
or the affirmative vote of at least 80% of the total votes eligible to be voted
at a duly constituted meeting of stockholders.
Purpose and Takeover Defensive Effects of the Holding Company's
Certificate of Incorporation and Bylaws. The Board of Directors of the Bank
believes that the provisions described above are prudent and will reduce the
Holding Company's vulnerability to takeover attempts and certain other
transactions which have not been negotiated with and approved by its Board of
Directors. These provisions will also assist the Bank in the orderly deployment
of the conversion proceeds into productive assets during the initial period
after the Conversion. The Board of Directors believes these provisions are in
the best interest of the Bank and of the Holding Company and its stockholders.
In the judgment of the Board of Directors, the Holding Company's Board will be
in the best position to determine the true value of the Holding Company and to
negotiate more effectively for what may be in the best interests of its
stockholders. Accordingly, the Board of Directors believes that it is in the
best interests of the Holding Company and its stockholders to encourage
potential acquirors to negotiate directly with the Board of Directors of the
Holding Company and that these provisions will encourage such negotiations and
discourage hostile takeover attempts. It is also the view of the Board of
Directors that these provisions should not discourage persons from proposing a
merger or other transaction at prices reflective of the true value of the
Holding Company and which is in the best interests of all stockholders.
Attempts to take over financial institutions and their holding
companies have recently become increasingly common. Takeover attempts which have
not been negotiated with and approved by the Board of Directors present to
stockholders the risk of a takeover on terms which may be less favorable than
might otherwise be available. A transaction which is negotiated and approved by
the Board of Directors, on the other hand, can be carefully planned and
undertaken at an opportune time in order to obtain maximum value for the Holding
Company and its stockholders, with due consideration given to matters such as
the management and business of the acquiring corporation and maximum strategic
development of the Holding Company's assets.
An unsolicited takeover proposal can seriously disrupt the business and
management of a corporation and cause it great expense. Although a tender offer
or other takeover attempt may be made at a price substantially above then
current market prices, such offers are sometimes made for less than all of the
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outstanding shares of a target company. As a result, stockholders may be
presented with the alternative of partially liquidating their investment at a
time that may be disadvantageous, or retaining their investment in an enterprise
which is under different management and whose objectives may not be similar to
those of the remaining stockholders. The concentration of control, which could
result from a tender offer or other takeover attempt, could also deprive the
Holding Company's remaining stockholders of the benefits of certain protective
provisions of the Exchange Act, if the number of beneficial owners becomes less
than the 300 required for Exchange Act registration.
Despite the belief of the Bank and the Holding Company as to the
benefits to stockholders of these provisions of the Holding Company's
certificate of incorporation and bylaws, these provisions may also have the
effect of discouraging a future takeover attempt which would not be approved by
the Holding Company's Board, but pursuant to which stockholders may receive a
substantial premium for their shares over then current market prices. As a
result, stockholders who might desire to participate in such a transaction may
not have any opportunity to do so. Such provisions will also render the removal
of the Holding Company's Board of Directors and of management more difficult.
The Board will enforce the voting limitation provisions of the charter in proxy
solicitations and accordingly could utilize these provisions to defeat proposals
that are favored by a majority of the stockholders. The Boards of Directors of
the Bank and the Holding Company, however, have concluded that the potential
benefits outweigh the possible disadvantages.
Pursuant to applicable law, at any annual or special meeting of its
stockholders after the Conversion, the Holding Company may adopt additional
charter provisions regarding the acquisition of its equity securities that would
be permitted to a Delaware corporation. The Holding Company and the Bank do not
presently intend to propose the adoption of further restrictions on the
acquisition of the Holding Company's equity securities.
Other Restrictions on Acquisitions of Stock
Delaware Anti-Takeover Statute. The Delaware General Corporation Law
(the "DGCL") provides that buyers who acquire more than 15% of the outstanding
stock of a Delaware corporation, such as the Holding Company, are prohibited
from completing a hostile takeover of such corporation for three years. However,
the takeover can be completed if (i) the buyer, while acquiring the 15%
interest, acquires at least 85% of the corporation's outstanding stock (the 85%
requirement excludes shares held by directors who are also officers and certain
shares held under employee stock plans), or (ii) the takeover is approved by the
target corporation's board of directors and two-thirds of the shares of
outstanding stock of the corporation (excluding shares held by the bidder).
However, these provisions of the DGCL do not apply to Delaware
corporations with less than 2,000 stockholders or which do not have voting stock
listed on a national exchange or listed for quotation with a registered national
securities association. No prediction can be made as to whether the Holding
Company will be listed on Nasdaq Stock Market or have 2,000 stockholders. First
Security may exempt itself from the requirements of the statute by adopting an
amendment to its Certificate of Incorporation or Bylaws electing not to be
governed by this provision. At the present time, the Board of Directors does not
intend to propose any such amendment.
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Federal Regulation. A federal regulation prohibits any person prior to
the completion of a conversion from transferring, or entering into any agreement
or understanding to transfer, the legal or beneficial ownership of the
subscription rights issued under a plan of conversion or the stock to be issued
upon their exercise. This regulation also prohibits any person prior to the
completion of a conversion from offering, or making an announcement of an offer
or intent to make an offer, to purchase such subscription rights or stock. For
three years following conversion, this regulation prohibits any person, without
the prior approval of the OTS, from acquiring or making an offer to acquire (if
the offer is opposed by the savings association) more than 10% of the stock of
any converted savings institution if such person is, or after consummation of
such acquisition would be, the beneficial owner of more than 10% of such stock.
In the event that any person, directly or indirectly, violates this regulation,
the securities beneficially owned by such person in excess of 10% may not be
counted as shares entitled to vote and may not be voted by any person or counted
as voting shares in connection with any matter submitted to a vote of
stockholders. Like the charter provisions outlined above, these federal
regulations can make a change in control more difficult, even if desired by the
holders of the majority of the shares of the stock. The Board of Directors
reserves the right to ask the OTS or other federal regulators to enforce these
restrictions against persons seeking to obtain control of the Holding Company,
whether in a proxy solicitation or otherwise. The policy of the Board is that
these legal restrictions must be observed in every case, including instances in
which an acquisition of control of the Holding Company is favored by a majority
of the stockholders.
Federal law provides that no company, "directly or indirectly or acting
in concert with one or more persons, or through one or more subsidiaries, or
through one or more transactions," may acquire "control" of a savings
association at any time without the prior approval of the OTS. In addition,
federal regulations require that, prior to obtaining control of a savings
association, a person, other than a company, must give 60 days' prior notice to
the OTS and have received no OTS objection to such acquisition of control. Any
company that acquires such control becomes a "savings and loan holding company"
subject to registration, examination and regulation as a savings and loan
holding company. Under federal law (as well as the regulations referred to
below) the term "savings association" includes state and federally chartered
SAIF-insured institutions and federally chartered savings banks whose accounts
are insured by the FDIC's BIF and holding companies thereof.
Control, as defined under federal law, in general means ownership,
control of or holding irrevocable proxies representing more than 25% of any
class of voting stock, control in any manner of the election of a majority of a
savings association's directors, or a determination by the OTS that
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the acquiror has the power to direct, or directly or indirectly to exercise a
controlling influence over, the management or policies of the institution.
Acquisition of more than 10% of any class of a savings association's voting
stock, if the acquiror also is subject to any one of eight "control factors,"
constitutes a rebuttable determination of control under the OTS regulations.
Such control factors include the acquiror being one of the two largest
stockholders. The determination of control may be rebutted by submission to the
OTS, prior to the acquisition of stock or the occurrence of any other
circumstances giving rise to such determination, of a statement setting forth
facts and circumstances which would support a finding that no control
relationship will exist and containing certain undertakings. The OTS regulations
provide that persons or companies which acquire beneficial ownership exceeding
10% or more of any class of a savings association's stock must file with the OTS
a certification that the holder is not in control of such institution, is not
subject to a rebuttable determination of control and will take no action which
would result in a determination or rebuttable determination of control without
prior notice to or approval of the OTS, as applicable.
DESCRIPTION OF CAPITAL STOCK
Holding Company Capital Stock
The 8,500,000 shares of capital stock authorized by the Holding Company
certificate of incorporation are divided into two classes, consisting of
8,000,000 shares of Common Stock (par value $.01 per share) and 500,000 shares
of serial preferred stock (par value $.01 per share). The Holding Company
currently expects to issue (not including the Stock Contribution) between
3,499,000 and 4,735,000 shares (subject to increase to 5,445,000) of Common
Stock in the Conversion and no shares of serial preferred stock. The aggregate
par value of the issued shares will constitute the capital account of the
Holding Company on a consolidated basis. Upon payment of the Purchase Price, all
shares issued in the Conversion will be duly authorized, fully paid and
nonassessable. The balance of the purchase price of Common Stock, less expenses
of Conversion, will be reflected as paid-in capital on a consolidated basis. See
"Capitalization."
Each share of the Common Stock will have the same relative rights and
will be identical in all respects with each other share of the Common Stock. The
Common Stock of the Holding Company will represent non-withdrawable capital,
will not be of an insurable type and will not
be insured by the FDIC.
Under Delaware law, the holders of the Common Stock will possess
exclusive voting power in the Holding Company. Each stockholder will be entitled
to one vote for each share held on all matters voted upon by stockholders,
subject to the limitation discussed under "Restrictions on Acquisitions of Stock
and Related Takeover Defensive Provisions - Provisions of the Holding Company's
Certificate of Incorporation and Bylaws - Limitation on Voting Rights." If the
Holding Company issues preferred stock subsequent to the Conversion, holders of
the preferred stock may also possess voting powers.
Liquidation or Dissolution. In the event of any liquidation,
dissolution or winding up of the Bank, the Holding Company, as the sole holder
of the Bank's capital stock would be entitled to receive, after payment or
provision for payment of all debts and liabilities of the Bank (including all
deposit accounts and accrued interest thereon) and after distribution of the
balance in the special liquidation account to Eligible and Supplemental Account
Holders, all assets of the Bank available
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for distribution. In the event of liquidation, dissolution or winding up of the
Holding Company, the holders of its Common Stock would be entitled to receive,
after payment or provision for payment of all its debts and liabilities, all of
the assets of the Holding Company available for distribution. See "The
Conversion - Effects of Conversion to Stock Form on Depositors and Borrowers of
the Bank." If preferred stock is issued subsequent to the Conversion, the
holders thereof may have a priority over the holders of Common Stock in the
event of liquidation or dissolution.
No Preemptive Rights. Holders of the Common Stock will not be entitled
to preemptive rights with respect to any shares which may be issued. The Common
Stock will not be subject to call for redemption, and, upon receipt by the
Holding Company of the full purchase price therefor, each share of the Common
Stock will be fully paid and nonassessable.
Preferred Stock. After Conversion, the Board of Directors of the
Holding Company will be authorized to issue preferred stock in series and to fix
and state the voting powers, designations, preferences and relative,
participating, optional or other special rights of the shares of each such
series and the qualifications, limitations and restrictions thereof. Preferred
stock may rank prior to the Common Stock as to dividend rights, liquidation
preferences, or both, and may have full or limited voting rights. The holders of
preferred stock will be entitled to vote as a separate class or series under
certain circumstances, regardless of any other voting rights which such holders
may have.
Except as discussed above, the Holding Company has no present plans for
the issuance of the additional authorized shares of Common Stock or for the
issuance of any shares of preferred stock. In the future, the authorized but
unissued and unreserved shares of Common Stock will be available for general
corporate purposes, including but not limited to possible issuance as stock
dividends or stock splits, in future mergers or acquisitions, under a cash
dividend reinvestment and stock purchase plan, in a future underwritten or other
public offering, or under a stock based employee plan. The authorized but
unissued shares of preferred stock will similarly be available for issuance in
future mergers or acquisitions, in a future underwritten public offering or
private placement or for other general corporate purposes. Except as described
herein or as otherwise required to approve the transaction in which the
additional authorized shares of common stock or authorized shares of preferred
stock would be issued, no stockholder approval will be required for the issuance
of these shares. Accordingly, the Board of Directors of the Holding Company,
without stockholder approval, can issue preferred stock with voting and
conversion rights which could adversely affect the voting power of the holders
of Common Stock.
Restrictions on Acquisitions of the Holding Company. See "Restrictions
on Acquisitions of Stock and Related Takeover Defensive Provisions" for a
description of certain provisions of the Holding Company's certificate of
incorporation and bylaws which may affect the ability of the Holding Company's
stockholders to participate in certain transactions relating to acquisitions of
control of the Holding Company.
Dividends. The Holding Company's Board of Directors may consider a
policy of paying cash dividends on the Common Stock in the future. No decision
has been made, however, as to the amount or timing of such dividends, if any.
The declaration and payment of dividends are subject to, among other things, the
Holding Company's then current and projected consolidated operating
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results, financial condition, regulatory restrictions, future growth plans and
other factors the Board deems relevant. Therefore, no assurance can be given
that any dividends will be declared.
The ability of the Holding Company to pay cash dividends to its
stockholders will be dependent, in part, upon the ability of the Bank to pay
dividends to the Holding Company. OTS regulations do not permit the Bank to
declare or pay a cash dividend on its stock or repurchase shares of its stock if
the effect thereof would be to cause its regulatory capital to be reduced below
the amount required for the liquidation account or to meet applicable regulatory
capital requirements. See "Regulation - Limitations on Dividends and Other
Capital Distributions" for information regarding OTS regulations governing the
Bank's ability to pay dividends to the Holding Company.
Delaware law generally limits dividends of the Holding Company to an
amount equal to the excess of its net assets over its paid-in capital or, if
there is no such excess, to its net earnings for the current and immediately
preceding fiscal year. In addition, as the Holding Company does not anticipate,
for the immediate future, engaging in activities other than (i) investing in
cash, short-term securities and investment and mortgage-backed securities
similar to those invested in by the Bank and (ii) holding the stock of First
Security, the Holding Company's ability to pay dividends will be limited, in
part, by the Bank's ability to pay dividends, as set forth above.
Earnings appropriated to the Bank's "Excess" bad debt reserves and
deducted for federal income tax purposes cannot be used by the Bank to pay cash
dividends to the Holding Company without adverse tax consequences. See
"Regulation - Federal and State Taxation."
LEGAL AND TAX MATTERS
The legality of the Common Stock and the federal income tax
consequences of the Conversion will be passed upon for First Security by the
firm of Silver, Freedman & Taff, L.L.P. (a limited liability partnership
including professional corporations), 7th Floor, East Tower, 1100 New York
Avenue, NW, Washington, DC 20005. Silver, Freedman & Taff, L.L.P. has consented
to the references herein to its opinions. The Illinois income tax consequences
of the Conversion will be passed upon by Crowe, Chizek and Company LLP. Crowe,
Chizek and Company LLP has consented to references herein to its opinion. FBR
has been represented in the Conversion by Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603.
EXPERTS
The consolidated financial statements of First Security as of December
31, 1996 and 1995 and for the three year period ended December 31, 1996 included
in this Prospectus have been audited by Crowe, Chizek and Company LLP,
independent auditors, as indicated in their report which is included herein and
has been so included in reliance upon such report, given the authority of that
firm as experts in accounting and auditing.
FinPro has consented to the inclusion herein of the summary of its
letter to the Bank setting forth its opinion as to the estimated pro forma
market value of the Holding Company and the Bank as converted and to the
reference to its opinion that subscription rights received by Eligible Account
149
<PAGE>
Holders, Supplemental Eligible Account Holders and other eligible subscribers do
not have any economic value.
ADDITIONAL INFORMATION
The Holding Company has filed with the SEC a Registration Statement
under the Securities Act with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the SEC, this Prospectus does not
contain all the information set forth in the Registration Statement. However,
the prospectus does contain a description of the material provisions of the
documents contained therein. Such information can be examined without charge at
the public reference facilities of the SEC located at 450 Fifth Street, NW,
Washington, DC 20549, and copies of such material can be obtained from the SEC
at prescribed rates. In addition, the SEC maintains a Web site. The address of
the SEC's Web site is "http://www.sec.gov." The statements contained herein as
to the contents of any contract or other document filed as an exhibit to the
Registration Statement are, of necessity, brief descriptions thereof which
describe only the material provisions of such documents; each such statement is
qualified by reference to such contract or document.
The Bank has filed an Application for Conversion with the OTS with
respect to the Conversion. Pursuant to the rules and regulations of the OTS,
this Prospectus omits certain information contained in that Application. The
Application may be examined at the principal offices of the OTS, 1700 G Street,
NW, Washington, DC 20552 and at the Chicago District Office of the OTS, Suite
1300, 200 West Madison Street, Chicago, Illinois 60606, without charge.
In connection with the Conversion, the Holding Company will register
the Common Stock with the SEC under Section 12(g) of the Exchange Act, and, upon
such registration, the Holding Company and the holders of its Common Stock will
become subject to the proxy solicitation rules, reporting requirements and
restrictions on stock purchases and sales by directors, officers and greater
than 10% stockholders, the annual and periodic reporting and certain other
requirements of the Exchange Act. Under the Plan, the Holding Company has
undertaken that it will not terminate such registration for a period of at least
three years following the Conversion.
A copy of the Certificate of Incorporation and Bylaws of the Holding
Company are available without charge from the Bank.
150
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
Chicago, Illinois
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
CONTENTS
REPORT OF INDEPENDENT AUDITORS ............................................ F-2
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS .......................................... F-3
CONSOLIDATED STATEMENTS OF INCOME .................................... F-4
CONSOLIDATED STATEMENTS OF EQUITY .................................... F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS ................................ F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ........................... F-8
All schedules are omitted because the required information
is not applicable or is included in the Consolidated
Financial Statements and related notes.
Financial Statements of the Holding Company have
not been provided because First SecurityFed Financial, Inc. has
not conducted any operations to date and
has not been capitalized.
F-1.
<PAGE>
[CROWE CHIZEK LOGO]
REPORT OF INDEPENDENT AUDITORS
Board of Directors
1st Security Federal Savings Bank
Chicago, Illinois
We have audited the accompanying consolidated balance sheets of 1st Security
Federal Savings Bank and Subsidiary as of December 31, 1996 and 1995, and the
related consolidated statements of income, equity, and cash flows for each of
the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Savings Bank's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of 1st Security Federal
Savings Bank and Subsidiary at December 31, 1996 and 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles.
/s/ Crowe, Chizek and Company LLP
_____________________________
Crowe, Chizek and Company LLP
Oak Brook, Illinois
February 8, 1997
F-2.
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
April 30, 1997 (Unaudited)
(Dollars in thousands)
- --------------------------------------------------------------------------------
(Unaudited) December 31,
April 30, ----------------------
1997 1996 1995
---- ---- ----
ASSETS
Cash and due from bank ................... $ 5,104 $ 5,800 $ 17,073
Federal funds sold ....................... 2,000 1,500 2,100
--------- --------- ---------
Total cash and cash equivalents ...... 7,104 7,300 19,173
Time deposits in other financial
institutions ............................ 200 200 200
Securities available-for-sale ............ 27,535 28,724 33,787
Securities held-to-maturity (fair
value of $50,007 in 1997, $49,881
in 1996 and $46,115 in 1995) ............ 50,648 49,888 45,686
Loans, net of allowance for loan losses .. 165,914 163,348 144,566
Federal Home Loan Bank stock, at cost .... 1,852 1,673 1,553
Premises and equipment, net .............. 3,845 3,923 4,006
Accrued interest receivable .............. 1,949 1,764 1,616
Intangible assets ........................ 332 352 419
Real estate owned ........................ -- 40 499
Other assets ............................. 623 903 417
--------- --------- ---------
Total assets ......................... $ 260,002 $ 258,115 $ 251,922
========= ========= =========
LIABILITIES
Deposits ................................. $ 218,987 $ 219,505 $ 209,387
Advance payments by borrowers for
taxes and insurance ..................... 1,586 2,118 1,681
Advances from Federal Home Loan Bank ..... 7,500 4,000 10,000
Accrued interest payable and other
liabilities ............................. 1,979 3,231 1,816
--------- --------- ---------
Total liabilities .................... 230,052 228,854 222,884
Commitments and contingencies -- -- --
EQUITY
Retained earnings, substantially
restricted .............................. 30,226 29,465 29,013
Net unrealized gain (loss) on securities
available-for-sale, net of income taxes . (276) (204) 25
--------- --------- ---------
Total equity ......................... 29,950 29,261 29,038
--------- --------- ---------
Total liabilities and equity ...... $ 260,002 $ 258,115 $ 251,922
========= ========= =========
- --------------------------------------------------------------------------------
See accompanying notes to consoldiated financial statements.
F-3.
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 1996, 1995, and 1994
Four months ended April 30, 1997 and 1996 (Unaudited)
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
April 30, December 31,
---------------------- -------------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Interest and dividend income
Loans ............................... $ 4,653 $ 4,197 $ 13,068 $ 12,080 $ 11,118
Securities
Taxable .......................... 497 533 1,664 1,944 1,334
Tax-exempt ....................... 97 94 277 327 378
Mortgage-backed securities .......... 1,131 1,158 3,673 2,867 2,535
Federal funds sold and other
interest earning assets ........... 117 142 324 432 345
-------- -------- -------- -------- --------
6,495 6,124 19,006 17,650 15,710
Interest expense
NOW and money market ................ 123 122 369 377 370
Passbook savings .................... 705 692 2,120 2,113 2,047
Certificates of deposit ............. 2,285 2,293 6,827 6,044 3,987
Federal Home Loan Bank
advances and other borrowings ..... 107 56 178 193 180
-------- -------- -------- -------- --------
3,220 3,163 9,494 8,727 6,584
-------- -------- -------- -------- --------
Net interest income ..................... 3,275 2,961 9,512 8,923 9,126
Provision for loan losses ............... 574 42 706 136 182
------- -------- -------- -------- --------
Net interest income after
provision for loan losses ............. 2,701 2,919 8,806 8,787 8,944
Noninterest income
Deposit service charges ............. 116 121 362 378 326
Insurance commissions ............... 15 18 54 58 58
Net gain on sales and calls of
securities .......... -- -- 55 24 5
Net gain (loss) on sale of real
estate owned ...................... 1 (10) 50 147 --
Other income ........................ 65 65 224 249 188
-------- -------- -------- -------- --------
197 194 745 856 577
Noninterest expense
Compensation and benefits ........... 851 726 2,411 2,370 2,043
Occupancy and equipment ............. 225 209 678 630 610
Data processing ..................... 94 87 269 260 282
SAIF assessment ..................... -- -- 1,293 -- --
Federal insurance premiums .......... 43 182 553 521 444
Charitable and foundation
contributions ..................... 43 21 2,558 67 100
Other expense ....................... 401 295 931 842 792
-------- -------- -------- -------- --------
1,657 1,520 8,693 4,690 4,271
-------- -------- -------- -------- --------
Income before income taxes .............. 1,241 1,593 858 4,953 5,250
Income tax provision .................... 480 603 406 1,760 1,825
-------- -------- -------- -------- --------
Net income .............................. $ 761 $ 990 $452 $ 3,193 $ 3,425
======== ======== ======== ======== ========
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-4.
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EQUITY
Years ended December 31, 1996, 1995, and 1994
Four months ended April 30, 1997 (Unaudited)
(Dollars in thousands)
- --------------------------------------------------------------------------------
Unrealized
Gain (Loss)
on Securities
Retained Available-
Earnings for-Sale Total
-------- -------- -----
Balance at January 1, 1994 .................. $ 22,395 $ -- $ 22,395
Net income .................................. 3,425 -- 3,425
Effect of adopting SFAS No. 115, as of
January 1, 1994, net of income
taxes of $189 ............................. -- 295 295
Change in valuation allowance for
securities available-for-sale, net
of income taxes of $358 ................... -- (560) (560)
-------- -------- --------
Balance at December 31, 1994 ............... 25,820 (265) 25,555
Net income .................................. 3,193 -- 3,193
Reclassification of securities from
held-to-maturity to available-for-sale,
net of income taxes of $44 ................ -- 114 114
Change in valuation allowance for
securities available-for-sale, net of
income taxes of $141 ...................... -- 176 176
-------- -------- --------
Balance at December 31, 1995 ................ 29,013 25 29,038
Net income .................................. 452 -- 452
Change in valuation allowance for
securities available-for-sale, net of
income taxes of $146 ...................... -- (229) (229)
-------- -------- --------
Balance at December 31, 1996 ................ 29,465 (204) 29,261
Net income (unaudited) ...................... 761 -- 761
Change in valuation allowance for
securities available- for-sale,
net of income taxes of $47 (unaudited) .... -- (72) (72)
-------- -------- --------
Balance at April 30, 1997 (unaudited) ....... $ 30,226 $ (276) $ 29,950
======== ======== ========
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-5.
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1996, 1995, and 1994
Four months ended April 30, 1997 and 1996 (Unaudited)
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
April 30, December 31,
------------------ --------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net income $ 761 $ 990 $ 452 $ 3,193 $ 3,425
Adjustments to reconcile net income
to net cash from operating activities
Depreciation and amortization
of intangibles 121 99 358 329 268
Net amortization (accretion) of
securities 36 -- (90) 138 318
Net gain on sales and calls of
securities -- -- (55) (24) (5)
Provision for loan losses 574 42 706 136 182
Net (gain) loss on real estate owned (1) 10 (50) (79) --
Deferred loan origination fees 2 (12) (80) (75) (118)
Federal Home Loan Bank
stock dividend -- -- -- (20) --
Provision for deferred income taxes 24 -- (937) 135 212
Net change in:
Accrued interest receivable (185) (97) (148) 119 (618)
Accrued interest payable 465 391 (4) 217 52
Other assets 302 180 (141) 182 (215)
Other liabilities (1,717) (240) 2,129 (190) 59
------- ------- -------- -------- --------
Net cash provided by
operating activities 382 1,363 2,140 4,061 3,560
Cash flows from investing activities
Purchase of securities available-for-sale -- (1,985) (2,989) -- (3,973)
Purchase of securities held-to-maturity (3,598) (9,951) (20,129) (30,451) (20,131)
Proceeds from sales of securities
available-for-sale -- -- -- 1,504 --
Proceeds from calls and maturities
of securities 1,000 5,850 15,814 20,112 2,167
Net loan originations (3,151) (3,566) (19,548) (8,696) (16,360)
Principal payments on mortgage-
backed and related securities 2,872 3,519 7,965 5,916 10,436
Purchase of Federal Home Loan
Bank stock (179) (120) (215) (171)
Acquisition of Ukrainian Federal
Savings and Loan Association
branch, net of cash -- -- -- -- 8,308
Net change in federal funds purchased -- -- -- -- (2,000)
Property and equipment expenditures (15) (24) (189) (119) (759)
Real estate owned expenditures -- 53 (5) (44) --
Proceeds from sale of real estate owned 41 75 614 79 --
------- ------- -------- -------- --------
Net cash used in investing activities (3,030) (6,149) (18,587) (11,914) (22,483)
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
F-6
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1996, 1995, and 1994
Four months ended April 30, 1997 and 1996 (Unaudited)
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
April 30, December 31,
------------------ --------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash flows from financing activities
Net change in deposits $ (516) $ 3,372 $ 10,137 $ 13,568 $ 11,931
Net change in advance payments
by borrowers for taxes and insurance (532) (369) 437 (342) 428
Change in advances from Federal
Home Loan Bank 3,500 (7,000) (6,000) 7,000 2,000
------- -------- -------- -------- --------
Net cash provided by
(used in) financing activities 2,452 (3,997) 4,574 20,226 14,359
------- -------- -------- -------- --------
Net change in cash and cash equivalents (196) (8,783) (11,873) 12,373 (4,564)
Cash and cash equivalents at
beginning of period 7,300 19,173 19,173 6,800 11,364
------- -------- -------- -------- --------
Cash and cash equivalents at
end of period $ 7,104 $ 10,390 $ 7,300 $ 19,173 $ 6,800
======= ======== ======== ======== ========
Supplemental disclosures of
cash flow information
Cash paid during the period for
Interest $ 2,755 $ 2,773 $ 9,498 $ 8,510 $ 6,352
Income taxes 218 451 1,497 1,620 1,658
Schedule of noncash investing
and financing activities
Transfer of securities from
held-to-maturity to available-
for-sale -- -- -- 20,158 --
Real estate acquired in settlement
of loans -- -- 140 276 --
Purchase of branch savings bank
Fair value of assets acquired $ 13,965
Cash received 8,308
--------
Liabilities assumed $ 22,273
========
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-7
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Nature of Business: The consolidated financial
statements include the accounts of 1st Security Federal Savings Bank (Savings
Bank) and its wholly-owned subsidiary, Western Security Service Corporation.
Significant intercompany accounts and transactions have been eliminated. The
consolidated financial statements for the four-month periods ended April 30,
1997 and 1996 are unaudited, but in the opinion of management, reflect all
necessary adjustments, consisting only of normal recurring items necessary for
fair presentation. The Savings Bank's revenues primarily arise from interest
income from residential real estate loans, with operations conducted through its
main office, three branches in Cook County, and one branch in Philadelphia,
Pennsylvania.
Use of Estimates: In preparing financial statements, management must make
estimates and assumptions. These estimates and assumptions affect the amounts
reported for assets, liabilities, income, and expenses, as well as affecting the
disclosures provided. Actual results could differ from the current estimates.
The collectibility of loans, fair values of financial instruments, and status of
contingencies are particularly subject to change.
Securities: Securities are classified as held-to-maturity when the Savings Bank
has the positive intent and ability to hold those securities to maturity.
Accordingly, they are stated at cost, adjusted for amortization of premiums and
accretion of discounts. All other securities are classified as
available-for-sale since the Savings Bank may decide to sell those securities in
response to changes in market interest rates, liquidity needs, changes in yields
or alternative investments, and for other reasons. These securities are carried
at market value with unrealized gains and losses charged or credited, net of
income taxes, to a valuation allowance included as a separate component of
retained earnings. Realized gains and losses on disposition are based on the net
proceeds and the adjusted carrying amounts of the securities sold, using the
specific identification method.
Real Estate Owned: Real estate owned represents property obtained through
foreclosure or in settlement of debt obligations and is carried at the lower of
cost (fair value at date of foreclosure) or fair value less estimated selling
expenses. Valuation allowances are recognized when the fair value less selling
expenses is less than the cost of the asset. Changes in the valuation allowance
are charged or credited to income.
Allowance for Loan Losses: Because some loans may not be repaid in full, an
allowance for loan losses is maintained. Increases to the allowance are recorded
by a provision for loan losses charged to expense. Estimating the risk of loss
and the amount of loss on any loan is necessarily subjective. Accordingly, the
valuation allowance is maintained at levels considered adequate to cover losses
that are currently anticipated based on delinquencies, property appraisals,
- --------------------------------------------------------------------------------
(Continued)
F-8
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
past loss experience, general economic conditions, information about specific
borrower situations including their financial position, and other factors and
estimates which are subject to change over time. While management may
periodically allocate portions of the allowance for specific problem loan
situations, including impaired loans discussed below, the whole allowance is
available for any charge-offs that occur. Loans are charged off in whole or in
part when management's estimate of the undiscounted cash flows from the loan are
less than the recorded investment in the loan, although collection efforts
continue and future recoveries may occur.
Statement of Financial Accounting Standards (SFAS) No. 114, as amended by SFAS
No. 118, was adopted at January 1, 1995. Under these statements, loans
considered to be impaired are reduced to the present value of expected future
cash flows or to the fair value of collateral, by allocating a portion of the
allowance for loan losses to such loans. If these allocations cause the
allowance for loan losses to require increase, such increase is reported as a
provision for loan losses. The adoption of this statement did not have a
material effect on the financial statements.
Smaller balance homogenous loans are defined as residential first mortgage loans
secured by one-to-four family residences, residential construction loans, and
share loans and are evaluated collectively for impairment. Commercial real
estate loans are evaluated individually for impairment. Normal loan evaluation
procedures, as described in the second preceding paragraph, are used to identify
loans which must be evaluated for impairment. In general, loans classified as
doubtful or loss are considered impaired while loans classified as substandard
are individually evaluated for impairment. Depending on the relative size of the
credit relationship, late or insufficient payments of 30 to 90 days will cause
management to reevaluate the credit under its normal loan evaluation procedures.
While the factors which identify a credit for consideration for measurement of
impairment, or nonaccrual, are similar, the measurement considerations differ. A
loan is impaired when management believes it is probable they will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. A loan is placed on nonaccrual when payments are more than 90 days
past due unless the loan is adequately collateralized and in the process of
collection. Although impaired loan and nonaccrual loan balances are measured
differently, impaired loan disclosures under SFAS Nos. 114 and 118 are not
expected to differ significantly from nonaccrual and renegotiated loan
disclosures.
- --------------------------------------------------------------------------------
(Continued)
F-9
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recognition of Income on Loans: Interest on real estate and certain consumer
loans is accrued over the term of the loans based upon the principal balance
outstanding. Where serious doubt exists as to the collectibility of a loan, the
accrual of interest is discontinued. Under SFAS No. 114 as amended by SFAS No.
118, the carrying values of impaired loans are periodically adjusted to reflect
cash payments, revised estimates of future cash flows, and increases in the
present value of expected cash flows due to the passage of time. Cash payments
representing interest income are reported as such. Other cash payments are
reported as reductions in carrying value, while increases or decreases due to
changes in estimates of future payments and due to the passage of time are
reported as adjustments to the allowance for loan losses. If these adjustments
cause the allowance for loan losses to require adjustment, such adjustment is
reported as an adjustment to the provision for loan losses.
Loan fees, net of direct loan origination costs, are deferred and amortized over
the contractual life of the loan as a yield adjustment.
Premises and Equipment: Premises and equipment are stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the respective premises and equipment,
which are primarily thirty to fifty years for premises and five to ten years for
furniture, fixtures, and equipment. Maintenance and repairs are charged to
expense as incurred and improvements which extend the useful lives of assets are
capitalized.
Income Taxes: The provision for income taxes is based on an asset and liability
approach in accordance with SFAS No. 109. The asset and liability approach
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of temporary differences between the carrying amounts
and the tax bases of assets and liabilities.
Statement of Cash Flows: Cash and cash equivalents include cash on hand, amounts
due from banks, and daily federal funds sold. The Savings Bank reports net cash
flows for customer loan transactions, deposit transactions, and time deposits in
other financial institutions.
Reclassifications: Certain prior period items have been reclassified to conform
to the current period's presentation.
- --------------------------------------------------------------------------------
(Continued)
F-10
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 2 - SECURITIES
The Bank's securities are as follows:
<TABLE>
<CAPTION>
(Unaudited)
April 30, 1997
-----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
Securities available-for-sale
U.S. government and agencies $ 3,249 $ 87 $ (15) $ 3,321
Mutual funds 5,775 -- (177) 5,598
------- ----- -------- -------
9,024 87 (192) 8,919
Mortgage-backed securities
Federal Home Loan Mortgage Corporation 8,615 8 (223) 8,400
Government National Mortgage Association 3,272 27 (22) 3,277
Federal National Mortgage Association 6,363 11 (177) 6,197
Collateralized mortgage obligations 713 29 -- 742
------- ----- -------- -------
18,963 75 (422) 18,616
------- ----- -------- -------
$27,987 $ 162 $ (614) $27,535
======= ===== ======== =======
Securities held-to-maturity
U.S. government agencies $22,801 $ 1 $ (404) $22,398
States and political subdivisions 5,207 87 (73) 5,221
Corporate notes 251 -- -- 251
------- ----- -------- -------
28,259 88 (477) 27,870
Mortgage-backed securities
Federal Home Loan Mortgage Corporation 5,655 59 (158) 5,556
Government National Mortgage Association 8,896 102 (80) 8,918
Federal National Mortgage Association 3,016 17 (85) 2,948
Collateralized mortgage obligations 4,822 -- (107) 4,715
------- ----- -------- -------
22,389 178 (430) 22,137
------- ----- -------- -------
$50,648 $ 266 $ (907) $50,007
======= ===== ======== =======
</TABLE>
At April 30, 1997 (unaudited), collateralized mortgage obligations with a
carrying value of $4.8 million of the total $5.6 million were guaranteed or
insured by governmental agencies (e.g., GNMA, FNMA, FHMC).
- --------------------------------------------------------------------------------
(Continued)
F-11
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 2 - SECURITIES (Continued)
<TABLE>
<CAPTION>
December 31, 1996
-----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
Securities available-for-sale
U.S. government and agencies $ 3,245 $ 105 $ -- $ 3,350
Mutual funds 5,776 32 (163) 5,645
Other equity investments 2 -- -- 2
------- ----- -------- -------
9,023 137 (163) 8,997
Mortgage-backed securities
Federal Home Loan Mortgage Corporation 9,238 16 (269) 8,985
Government National Mortgage Association 3,399 39 (13) 3,425
Federal National Mortgage Association 6,685 14 (127) 6,572
Collateralized mortgage obligations 713 32 -- 745
------- ----- -------- -------
20,035 101 (409) 19,727
------- ----- -------- -------
$29,058 $ 238 $ (572) $28,724
======= ===== ======== =======
Securities held-to-maturity
U.S. government agencies $20,320 $ 41 $ (81) $20,280
States and political subdivisions 5,208 150 (15) 5,343
Corporate notes 251 -- -- 251
------- ----- -------- -------
25,779 191 (96) 25,874
Mortgage-backed securities
Federal Home Loan Mortgage Corporation 6,280 89 (190) 6,179
Government National Mortgage Association 9,226 142 (43) 9,325
Federal National Mortgage Association 3,294 19 (42) 3,271
Collateralized mortgage obligations 5,309 -- (77) 5,232
------- ----- -------- -------
24,109 250 (352) 24,007
------- ----- -------- -------
$49,888 $ 441 $ (448) $49,881
======= ===== ======== =======
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
F-12
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 2 - SECURITIES (Continued)
On December 29, 1995, the Savings Bank reclassified a portion of its
held-to-maturity securities to available-for-sale in accordance with "A Guide to
Implementation of Statement No. 115 on Accounting for Certain Investments in
Debt and Equity Securities" in order to improve the Savings Bank's flexibility
in meeting liquidity needs. The amortized cost and unrealized gain on securities
transferred to available-for-sale were $20,157,729 and $113,950, respectively.
<TABLE>
<CAPTION>
December 31, 1995
-----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
Securities available-for-sale
U.S. government and agencies $ 7,743 $ 195 $ (2) $ 7,936
Mutual funds 5,776 42 (81) 5,737
Other equity investments 70 -- -- 70
------- ----- -------- -------
13,589 237 (83) 13,743
Mortgage-backed securities
Federal Home Loan Mortgage Corporation 10,101 17 (126) 9,992
Government National Mortgage Association 2,901 44 (21) 2,924
Federal National Mortgage Association 6,436 18 (71) 6,383
Collateralized mortgage obligations 720 25 -- 745
------- ----- -------- -------
20,158 104 (218) 20,044
------- ----- -------- -------
$33,747 $ 341 $ (301) $33,787
======= ===== ======== =======
Securities held-to-maturity
U.S. government agencies $15,446 $ 93 $ (20) $15,519
States and political subdivisions 4,768 207 (5) 4,970
Corporate notes 352 1 -- 353
------- ----- -------- -------
20,566 301 (25) 20,842
Mortgage-backed securities
Federal Home Loan Mortgage Corporation 9,806 258 (283) 9,781
Government National Mortgage Association 5,142 233 (28) 5,347
Federal National Mortgage Association 4,526 35 (47) 4,514
Collateralized mortgage obligations 5,646 20 (35) 5,631
------- ----- -------- -------
25,120 546 (393) 25,273
------- ----- -------- -------
$45,686 $ 847 $ (418) $46,115
======= ===== ======== =======
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
F-13
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 2 - SECURITIES (Continued)
There were no sales of securities during the four months ended April 30, 1997
(unaudited) or during 1996. The Savings Bank recognized a gain of $4,447 on the
sale of one security available for sale during 1995. Call premiums on debt
securities of $55,376 and $19,625 were recognized by the Savings Bank during
1996 and 1995, respectively.
The carrying values and fair values of debt securities, by contractual maturity,
are shown below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
<TABLE>
<CAPTION>
(Unaudited)
April 30, 1997 December 31, 1996
-------------------- --------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
<S> <C> <C> <C> <C>
Securities available-for-sale
Due in one year or less $ 999 $ 1,002 $ 997 $ 1,007
Due after one year through five years 1,991 1,977 1,989 1,989
Due after ten years 259 342 259 354
------- ------- ------- -------
3,249 3,321 3,245 3,350
Mutual funds 5,775 5,598 5,776 5,645
Other equity investments -- -- 2 2
Mortgage-backed securities
and collateralized mortgage obligations 18,963 18,616 20,035 19,727
------- ------- ------- -------
24,738 24,214 25,813 25,374
------- ------- ------- -------
$27,987 $27,535 $29,058 $28,724
======= ======= ======= =======
Securities held-to-maturity
Due in one year or less $ 351 $ 353 $ 351 $ 356
Due after one year through five years 5,944 5,784 3,244 3,273
Due after five years through ten years 15,472 15,395 14,289 14,353
Due after ten years 6,492 6,338 7,895 7,892
------- ------- ------- -------
28,259 27,870 25,779 25,874
Mortgage-backed securities and
collateralized mortgage obligations 22,389 22,137 24,109 24,007
------- ------- ------- -------
$50,648 $50,007 $49,888 $49,881
======= ======= ======= =======
</TABLE>
There was one security in the amount of $250,000 pledged to secure government
deposits at December 31, 1996. There were no securities pledged at December 31,
1995.
- --------------------------------------------------------------------------------
(Continued)
F-14
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 3 - LOANS RECEIVABLE
Loans receivable consisted of the following:
<TABLE>
<CAPTION>
(Unaudited) December 31,
April 30, -----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
First mortgage loans, including loans purchased
Secured by one-to-four-family residences $ 137,479 $ 134,971 $ 117,379
Secured by multifamily residences 9,708 9,374 7,926
Secured by commercial real estate 15,425 15,651 15,127
--------- --------- ---------
162,612 159,996 140,432
Home equity loans 4,006 3,431 3,684
Less
Net deferred loan origination fees (1,472) (1,470) (1,550)
--------- --------- ---------
Total mortgage loans 165,146 161,957 142,566
Consumer and other loans
Automobile 72 74 110
Share loans 1,182 1,174 1,570
Improvement 10 12 29
Loans secured by leases 839 1,272 759
Other 351 395 445
--------- --------- ---------
2,454 2,927 2,913
Less unearned discounts (20) (16) (28)
--------- --------- ---------
Total consumer and other loans 2,434 2,911 2,885
Less allowance for loan losses (1,666) (1,520) (885)
--------- --------- ---------
$ 165,914 $ 163,348 $ 144,566
========= ========= =========
</TABLE>
The principal balance of loans on nonaccrual status at April 30, 1997
approximated $9,000 (unaudited). The principal balance of loans on nonaccrual
status at December 31, 1996 and 1995 approximated $9,000 in both years. The
Savings Bank maintains an allowance for uncollected interest for mortgage loans
with payments past due. The allowance was approximately $94,000 (unaudited),
$93,000 and $89,000 at April 30, 1997, and December 31, 1996 and 1995,
respectively.
- --------------------------------------------------------------------------------
(Continued)
F-15
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 4 - ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is summarized as follows:
(Unaudited)
April 30, December 31,
----------------- -------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
Balance, beginning of period $ 1,520 $ 885 $ 885 $ 792 $608
Provision for loan losses 574 42 706 136 182
Recoveries 4 -- -- -- 2
Charge-offs (432) (50) (71) (43) --
------- ----- ------- ----- ----
Balance, end of period $ 1,666 $ 877 $ 1,520 $ 885 $792
======= ===== ======= ===== ====
Information regarding impaired loans is as follows:
(Unaudited)
For the For the
Four Months Year
Ended Ended
April 30, December 31,
1997 1996
---- ----
Average investment in impaired loans $1,055 $1,087
Interest income recognized on impaired loans
including interest income recognized on cash basis -- 11
Interest income recognized on impaired loans on
cash basis -- 11
April 30, December 31,
1997 1996
---- ----
Balance of impaired loans $ 839 $1,272
Less portion for which no allowance for loan
Losses is allocated -- --
------ ------
Portion of impaired loan balance for which an
allowance for credit losses is allocated $ 839 $1,272
====== ======
Portion of allowance for loan losses allocated
to the impaired loan balance $ 420 $ 318
====== ======
There were no impaired loans at December 31, 1995.
- --------------------------------------------------------------------------------
(Continued)
F-16
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 5 - PREMISES AND EQUIPMENT
Premises and equipment consisted of the following:
(Unaudited) December 31,
April 30, --------------------
1997 1996 1995
---- ---- ----
Land $ 545 $ 545 $ 545
Buildings and improvements 3,609 3,620 3,528
Furniture and equipment 1,920 1,894 1,796
Real estate acquired for future expansion 377 377 377
------- ------- -------
Total cost 6,451 6,436 6,246
Less accumulated depreciation (2,606) (2,513) (2,240)
------- ------- -------
$ 3,845 $ 3,923 $ 4,006
======= ======= =======
NOTE 6 - INTANGIBLE ASSETS
Intangible assets, which arose from the Savings Bank's acquisition of assets and
assumption of liabilities from the Resolution Trust Corporation consisted of the
following:
(Unaudited) December 31,
April 30, --------------------
1997 1996 1995
---- ---- ----
Excess of purchase price over net
assets acquired $ 156 $ 156 $ 156
Core deposit intangible assets 377 377 377
----- 533 533
Less accumulated amortization (201) (181) (114)
----- ----- -----
Intangible assets, net $ 332 $ 352 $ 419
===== ===== =====
The excess of purchase price over net assets acquired is being amortized over
fifteen years in relation to the remaining lives of the long-term earning assets
acquired. Amortization charged to expense was $3,467 in the four months ended
April 30, 1997 and 1996 (unaudited). Amortization charged to expense was
$10,400, $10,430, and $5,255 in the years ended December 31, 1996, 1995, and
1994, respectively.
- --------------------------------------------------------------------------------
(Continued)
F-17
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 6 - INTANGIBLE ASSETS (Continued)
The core deposit intangible assets were determined in consideration of the value
of non-interest-bearing demand, NOW, savings, and money market deposit accounts
assumed. The valuation method estimated annual cash flow differentials of the
core deposit interest and handling costs of alternative funds sources, such as
certificates of deposit, and then discounted such cash flow differentials to
their present value. The core deposit intangible asset is being amortized over
ten years on an accelerated method. Amortization charged to expense in the four
months ended April 30, 1997 and 1996 was $17,001 and $18,833, respectively
(unaudited). Amortization charged to expense in the years ended December 31,
1996, 1995, and 1994 was $56,500, $64,000, and $34,000, respectively.
NOTE 7 - DEPOSITS
Certificate of deposit accounts with balances of $100,000 or more totaled
$31,639,423 (unaudited), $39,439,746 and $33,879,449 at April 30, 1997, December
31, 1996 and December 31, 1995, respectively. Deposits greater than $100,000 are
not insured.
At April 30, 1997 (unaudited), the scheduled maturities of certificates of
deposit are as follows:
April 30, 1998 $102,164
April 30, 1999 10,295
April 30, 2000 7,972
April 30, 2001 2,734
April 30, 2002 and thereafter 4,977
--------
$128,142
========
At December 31, 1996, the scheduled maturities of certificates of deposit are as
follows:
December 31, 1997 $105,026
December 31, 1998 11,166
December 31, 1999 3,240
December 31, 2000 5,645
December 31, 2001 and thereafter 3,645
--------
$128,722
========
- --------------------------------------------------------------------------------
(Continued)
F-18
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 8 - ADVANCES FROM FEDERAL HOME LOAN BANK
Advances from the Federal Home Loan Bank of Chicago were as follows:
Principal Balance
-------------------------------
Contractual Frequency (Unaudited) December 31,
Maturity Interest of Rate April 30, ------------------
Date Rate Adjustment 1997 1996 1995
---- ---- ---------- ---- ---- ----
March 17, 1996 5.72% Fixed $ -- $ -- $ 1,000
February 11, 1997 4.80 Fixed -- 2,000 2,000
March 18, 1997 5.51 Fixed -- 1,000 --
June 17, 1997 5.56 Fixed 2,500 -- --
February 11, 1998 5.88 Fixed 2,000 -- --
March 20, 1998 5.91 Fixed 1,000 1,000 --
February 21, 2000 5.48 Fixed 1,000 -- --
February 21, 2000 6.08 Fixed 1,000 -- --
Open line 5.31 Daily -- -- 7,000
------ ------ -------
$7,500 $4,000 $10,000
====== ====== =======
The Savings Bank maintains a collateral pledge agreement covering secured
advances whereby the Savings Bank has agreed to at all times keep on hand, free
of all other pledges, liens, and encumbrances, whole first mortgage loans on
improved residential property not more than 90 days delinquent, aggregating no
less than 167% of the outstanding secured advances from the Federal Home Loan
Bank of Chicago.
NOTE 9 - INCOME TAXES
An analysis of the provision for income taxes is as follows:
(Unaudited)
For the Four Months Ended For the Years Ended
April 30, December 31,
------------- ------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
Current
Federal $380 $482 $ 1,132 $1,377 $1,372
State 76 121 211 248 241
Deferred 24 -- (1,117) 135 212
Valuation allowance -- -- 180 -- --
---- ---- ------- ------ ------
$480 $603 $ 406 $1,760 $1,825
==== ==== ======= ====== ======
- --------------------------------------------------------------------------------
(Continued)
F-19
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 9 - INCOME TAXES (Continued)
The net deferred tax asset (liability) included in the accompanying balance
sheets consist of the following:
(Unaudited) December 31,
April 30, ------------------
1997 1996 1995
---- ---- ----
Deferred tax assets
Bad debts $ 72 $ 42 $ --
Amortization of intangible assets 39 36 23
Contribution carryforward 772 851 --
Unrealized loss on securities
available-for-sale 177 130 --
------- ------- -----
1,060 1,059 23
Deferred tax liabilities
Bad debts -- -- (208)
Depreciation (97) (102) (117)
FHLB stock dividend (65) (65) (65)
Loan fees (323) (340) (328)
Unrealized gain on securities
available-for-sale -- -- (16)
------- ------- -----
(485) (507) (734)
Valuation allowance on deferred tax assets (180) (180) --
------- ------- -----
Total deferred tax asset (liability) $ 395 $ 372 $(711)
======= ======= =====
The valuation allowance at April 30, 1997 and December 31, 1996 reflects
management's estimate of temporary deductible differences that may not be
realized.
- --------------------------------------------------------------------------------
(Continued)
F-20
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 9 - INCOME TAXES (Continued)
The difference between the provision for income taxes shown on the consolidated
statements of income and amounts computed by applying the statutory federal
income tax rate to income before taxes follows:
<TABLE>
<CAPTION>
(Unaudited)
For the Four Months Ended
April 30,
---------------------------------------
1997 1996
---------------- ----------------
<S> <C> <C> <C> <C>
Provision for federal income taxes computed
at statutory rate of 34% $ 422 34.0% $ 542 34.0%
Tax-exempt income (30) (2.4) (30) (1.9)
State income taxes, net of federal income tax benefit 72 5.8 77 4.8
Other 16 1.3 14 1.0
----- ---- ----- ----
$ 480 38.7% $ 603 37.9%
===== ==== ===== ====
</TABLE>
<TABLE>
<CAPTION>
For the Years Ended
December 31,
--------------------------------------------------------------
1 9 9 6 1 9 9 5 1 9 9 4
----------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Provision for federal income
taxes computed at statutory
rate of 34% $ 292 34.0% $ 1,684 34.0% $ 1,785 34.0%
Tax-exempt income (85) (9.9) (2.1) (120) (2.3)
State income taxes, net of
federal income tax benefit 37 4.3 197 4.0 204 3.9
Other (18) (2.1) (19) (.4) (44) (.8)
Valuation allowance 180 21.0 -- -- -- --
----- ---- ------- ---- ------- ----
$ 406 47.3% $ 1,760 35.5% $ 1,825 34.8%
===== ==== ======= ==== ======= ====
</TABLE>
The Savings Bank has qualified under provisions of the Internal Revenue Code
which permit it to deduct from taxable income a provision for bad debts which
differs from the provision charged to income on the financial statements.
Retained earnings at April 30, 1997 (unaudited) and December 31, 1996 and 1995
include approximately $2,023,000 for which no deferred federal income tax
liability has been recorded. Tax legislation passed August 1996 now requires all
thrift institutions to deduct a provision for bad debts for tax purposes based
on actual loss experience and recapture the excess bad debt reserve accumulated
in the tax years after 1987. The related amount of deferred tax liability which
must be recaptured is $573,000 and is payable over a six-year period, starting
no later than 1998.
- --------------------------------------------------------------------------------
(Continued)
F-21
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The Savings Bank is party to financial instruments with off-balance-sheet risk
in the normal course of business to meet financing needs of its customers. These
financial instruments include commitments to fund loans and previously approved
unused lines of credit. The Savings Bank's exposure to credit loss in the event
of nonperformance by the parties to these financial instruments is represented
by the contractual amount of the instruments. The Savings Bank uses the same
credit policy for commitments as it uses for on-balance-sheet items. The
contract amount of these financial instruments is summarized as follows:
(Unaudited) December 31,
April 30, ------------------
1997 1996 1995
---- ---- ----
Commitments to extend credit $3,322 $1,802 $1,542
Unused lines of credit 4,371 4,186 2,498
At April 30, 1997 (unaudited) and December 31, 1996, commitments to extend
credit consist of $2,673,000 and $1,253,000 of fixed rate and $649,000 and
$549,000 of variable rate loan commitments. The fixed rate loan commitments have
rates ranging from 7.375% to 8.875%. These commitments are due to expire within
90 days of issuance. Since many commitments expire without being used, the
amounts above do not necessarily represent future cash commitments. Collateral
may be obtained upon exercise of a commitment. The amount of collateral is
determined by management and may include commercial and residential real estate
and other business and consumer assets.
The Savings Bank's principal loan customers are located in Chicago, Illinois and
Philadelphia, Pennsylvania. Most loans are secured by specific collateral,
including residential and commercial real estate.
The deposits of savings institutions are presently insured by the Savings
Association Insurance Fund (SAIF), which, along with the Bank Insurance Fund
(BIF), is one of the two insurance funds administered by the Federal Deposit
Insurance Corporation (FDIC). Due to the inadequate capitalization of the SAIF,
a recapitalization plan was signed into law on September 30, 1996 which required
a special assessment of approximately .65% of all SAIF-insured deposit balances
as of March 31, 1995. The Bank's assessment of $1,292,882 is reflected in the
1996 statement of income.
The Savings Bank established The Heritage Foundation of First Security Federal
Savings Bank, Inc. (the Foundation) in December 1996. The Foundation is a
not-for-profit charitable foundation. In 1996, the Board approved a $2,500,000
unconditional contribution to the Foundation, of which $250,000 was paid in
1996. An additional $1,850,000 was funded through April 30, 1997. The remaining
$400,000 (unaudited) is included in other liabilities in the balance sheet at
April 30, 1997.
- --------------------------------------------------------------------------------
(Continued)
F-22
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 11 - REGULATORY MATTERS
The Savings Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Savings Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Savings Bank must meet specific capital guidelines that involve quantitative
measures of the Savings Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices. The
Savings Bank's capital amounts and classifications are also subject to
qualitative judgments by the regulators about components, risk weightings, and
other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Savings Bank to maintain minimum amounts and ratios (set forth in
the table below) of Total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of April 30, 1997, that the Savings
Bank meets all capital adequacy requirements to which it is subject.
As of April 30, 1997, the most recent notification from the Office of Thrift
Supervision categorized the Savings Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Savings Bank must maintain minimum Total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the following table.
There are no conditions or events since that notification that management
believes have changed the Savings Bank's category.
The Savings Bank's actual capital amounts and ratios are also presented in the
table.
<TABLE>
<CAPTION>
To be Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Provisions
--------------- ----------------- -----------------------
(Unaudited) Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
As of April 30, 1997:
Total capital (to
risk-weighted assets) $31,066 24.4% $10,186 8.0% $12,733 10.0%
Tier I Capital (to risk-
weighted assets) 29,468 23.1 5,093 4.0 7,640 6.0
Tier I Capital (to
average assets) 29,468 11.4 10,377 4.0 12,971 5.0
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
F-23
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 11 - REGULATORY MATTERS (Continued)
<TABLE>
<CAPTION>
To be Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Provisions
--------------- ----------------- -----------------------
(Unaudited) Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1996:
Total capital (to
risk-weighted assets) $29,954 23.9% $10,045 8.0% $12,556 10.0%
Tier I Capital (to risk-
weighted assets) 28,437 22.6 5,022 4.0 7,534 6.0
Tier I Capital (to
average assets) 28,437 11.2 10,193 4.0 12,742 5.0
</TABLE>
A reconciliation of GAAP capital to regulatory capital is as follows:
April 30, 1997 December 31, 1996
------------------ --------------------
Total Tier I Total Tier I
----- ------ ----- ------
GAAP capital ................... $ 29,950 $ 29,950 $ 29,261 $ 29,261
Goodwill and intangible assets . (400) (400) (429) (429)
Unrealized losses on securities
available-for-sale ............ 144 144 80 80
Disallowed deferred tax assets . (226) (226) (475) (475)
Allowance for loan losses ...... 1,598 -- 1,517 --
-------- -------- -------- --------
$ 31,066 $ 29,468 $ 29,954 $ 28,437
======== ======== ======== ========
NOTE 12 - RELATED PARTY TRANSACTIONS
The Savings Bank has lending transactions with directors, executive officers,
and their associates. Loans to these individuals totaled approximately $48,000
(unaudited), $50,511 and $316,000 at April 30, 1997, December 31, 1996 and
December 31, 1995, respectively.
<PAGE>
NOTE 13 - FAIR VALUES OF FINANCIAL INSTRUMENTS
The approximate carrying amount and estimated fair value of financial
instruments are as follows:
<TABLE>
<CAPTION>
(Unaudited) December 31,
April 30, -------------------------------------------------------
1 9 9 7 1 9 9 6 1 9 9 5
------------------------ ------------------------- -------------------------
Approximate Estimated Approximate Estimated Approximate Estimated
Carrying Fair Carrying Fair Carrying Fair
Amount Value Amount Value Amount Value
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Financial assets
Cash and cash equivalents $ 7,104 $ 7,104 $ 7,300 $ 7,300 $ 19,173 $ 19,173
Time deposits in other
financial institutions 200 200 200 200 200 200
Securities available-for-sale 27,535 27,535 28,724 28,724 33,787 33,787
Securities held-to-maturity 50,648 50,007 49,888 49,881 45,686 46,115
Loans, net of allowance for
loan losses 165,914 169,903 163,348 165,738 144,566 148,670
Accrued interest receivable 1,949 1,949 1,764 1,764 1,616 1,616
Financial liabilities
NOW accounts (19,642) (19,642) (19,616) (19,616) (18,874) (18,874)
Savings (71,203) (71,203) (71,167) (71,167) (69,631) (69,631)
Time deposits (128,142) (128,594) (128,722) (128,805) (120,882) (121,032)
Advance payments by borrowers
for taxes and insurance (1,586) (1,586) (2,118) (2,118) (1,681) (1,681)
Advances from Federal
Home Loan Bank (7,500) (7,489) (4,000) (3,995) (10,000) (9,852)
Accrued interest payable (998) (998) (533) (533) (537) (537)
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
F-24
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 13 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)
For purposes of the above, the following assumptions were used:
Cash and Cash Equivalents: The fair value for cash and cash equivalents is based
on their carrying value due to the short-term nature of these assets.
Securities: The fair value of securities is based on the quoted market value for
the individual security or its equivalent.
Loans: The fair value for loans has been determined by calculating the present
value of future cash flows based on the current rate the Savings Bank would
charge for similar loans with similar maturities at April 30, 1997, December 31,
1996 and December 31, 1995, applied for an estimated time period until the loan
is assumed to be repriced or repaid.
Deposit Liabilities: The fair value for time deposits has been determined by
calculating the present value of future cash flows based on estimates of rates
the Savings Bank would pay on such deposits at April 30, 1997, December 31, 1996
and December 31, 1995, applied for the time period until maturity. The estimated
fair value of NOW and savings accounts is assumed to approximate carrying value
as management establishes rates on these deposits at a level that approximates
the local market area.
Advances from Federal Home Loan Bank: The fair value for the Federal Home Loan
Bank advances was determined by calculating the present value of future cash
flows using the current rate for an advance with a similar length to maturity.
Accrued Interest: The fair value of accrued interest receivable and payable is
assumed to equal the carrying value.
Off-Balance-Sheet Instruments: Off-balance-sheet items consist principally of
unfunded loan commitments. The fair value of these commitments is not material.
Other assets and liabilities of the Savings Bank not defined as financial
instruments, such as property and equipment, are not included in the above
disclosures. Also not included are nonfinancial instruments typically not
recognized in financial statements such as the value of core deposits, loan
servicing rights, customer goodwill, and similar items.
While the above estimates are based on judgments of the most appropriate
factors, there is no assurance that if the Savings Bank disposed of these items
on April 30, 1997, December 31, 1996 and December 31, 1995, the fair value would
have been achieved, because the market value may differ depending on the
circumstances. The fair values at April 30, 1997, December 31, 1996 and December
31, 1995 should not necessarily be considered to apply at subsequent dates.
- --------------------------------------------------------------------------------
(Continued)
F-25
<PAGE>
1ST SECURITY FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
April 30, 1997 and 1996 (Unaudited)
(Table amounts in thousands)
- --------------------------------------------------------------------------------
NOTE 14 - ADOPTION OF PLAN OF CONVERSION (UNAUDITED)
On June 23, 1997, the Board of Directors of the Savings Bank, subject to
regulatory approval and approval by the members of the Savings Bank, adopted a
Plan of Conversion to convert from a federal mutual savings bank to a federal
stock savings bank with the concurrent formation of a holding company and the
adoption of a federal thrift charter. The conversion is expected to be
accomplished through the amendment of the Savings Bank's charter and the sale of
the holding company's common stock in an amount equal to the consolidated pro
forma market value of the holding company and the Savings Bank after giving
effect to the conversion. A subscription offering of the shares of common stock
will be offered initially to the Savings Bank's eligible deposit account
holders, then to other members of the Savings Bank. Any shares of the holding
company's common stock not sold in the subscription offering will be offered for
sale to the general public, giving preference to the Savings Bank's market area.
The Board of Directors of the Savings Bank or the holding company intend to
adopt an Employee Stock Ownership Plan and various stock option and incentive
plans, subject to ratification by the stockholders of the holding company after
conversion, if such stockholder approval is required by any regulatory body
having jurisdiction to require such approval. In addition, the Board of
Directors is authorized to enter into employment contracts with key employees.
At the time of conversion, the Savings Bank will establish a liquidation account
in an amount equal to its total net worth as of the latest statement of
financial condition appearing in the final prospectus. The liquidation account
will be maintained for the benefit of eligible depositors who continue to
maintain their accounts at the Savings Bank after the conversion. The
liquidation account will be reduced annually to the extent that eligible
depositors have reduced their qualifying deposits. Subsequent increases will not
restore an eligible account holder's interest in the liquidation account. In the
event of a complete liquidation, each eligible depositor will be entitled to
receive a distribution from the liquidation account in an amount proportionate
to the current adjusted qualifying balances for accounts then held. The
liquidation account balance is not available for payment of dividends.
The Bank may not declare or pay cash dividends on or repurchase any of
its shares of capital stock if the effect thereof would cause its net worth to
be reduced below applicable regulatory requirements or the amount of the
liquidation accounts of such a declaration and payment would otherwise violate
regulatory requirements.
Conversion costs will be deferred and deducted from the proceeds of the shares
sold in the conversion. If the conversion is not completed, all costs will be
charged to expense. At April 30, 1997, no expenses have been deferred.
- --------------------------------------------------------------------------------
F-26
<PAGE>
No person has been authorized to give any information or to make any
representation other than as contained in this Prospectus in connection with the
offering made hereby, and, if given or made, such other information or
representation must not be relied upon as having been authorized by the Holding
Company or the Bank. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby to any
person in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so, or to any person to whom it is unlawful to make such offer or solicitation
in such jurisdiction. Neither the delivery of this Prospectus nor any sale
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Holding Company or the Bank since any of
the dates as of which information is furnished herein or since the date hereof.
--------------
TABLE OF CONTENTS
Page
----
Prospectus Summary........................................
Selected Financial Information............................
Recent Financial Data.....................................
Risk Factors..............................................
First SecurityFed Financial, Inc..........................
First Security ...........................................
Use of Proceeds...........................................
Dividends.................................................
Market for Common Stock...................................
Pro Forma Data............................................
Comparison of Valuation and Pro Forma Information
With No Stock Contribution...............................
Pro Forma Regulatory Capital Analysis.....................
Capitalization............................................
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................
Business .................................................
Regulation................................................
Management ...............................................
The Conversion............................................
Restrictions on Acquisitions of Stock and Related
Takeover Defensive Provisions..........................
Description of Capital Stock..............................
Legal and Tax Matters.....................................
Experts...................................................
Additional Information....................................
Index to Financial Statements............................. F-1
----------
Until the later of ________, 1997 or 25 days after commencement of the
offering of Common Stock, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
<PAGE>
Up to
4,735,000 Shares
FIRST SECURITYFED FINANCIAL, INC.
(Proposed Holding Company
for First Security Federal Savings Bank)
COMMON STOCK
----------
PROSPECTUS
----------
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
_______, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
Set forth below is an estimate of the amount of fees and expenses (other
than underwriting discounts and commissions) to be incurred in connection with
the issuance of the shares.
SEC registration fees............................................... $ 17,258
NASD fee............................................................ 6,200
Nasdaq registration fee............................................. 32,000
OTS filing fees..................................................... 14,400
Counsel fees and expenses........................................... 135,000
Accounting fees and expenses........................................ 80,000
Appraisal and business plan fees and expenses....................... 25,000
Conversion agent fees and expenses.................................. 17,000
Marketing agent's expenses.......................................... 25,000
Marketing agent's fee............................................... 413,000
Marketing agent's counsel fees and expenses......................... 37,500
Printing, postage and mailing....................................... 120,000
Blue sky fees and expenses.......................................... 5,000
Other expenses...................................................... 25,642
--------
TOTAL.......................................................... $953,000
========
- ---------
(1) Based on maximum of Estimated Valuation Range and assumptions set forth
under "Pro Forma Data" in the Prospectus.
Item 14. Indemnification of Directors and Officers
Article Eleventh of the Holding Company's Certificate of Incorporation
provides for indemnification of directors and officers of the Holding Company
against any and all liabilities, judgments, fines and reasonable settlements,
costs, expenses and attorneys' fees incurred in any actual, threatened or
potential proceeding, except to the extent that such indemnification is limited
by Delaware law and such law cannot be varied by contract or bylaw. Article
Eleventh also provides for the authority to purchase insurance with respect
thereto.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation's Board of Directors to grant indemnity under certain
circumstances to directors and officers, when made, or threatened to be made,
parties to certain proceedings by reason of such
II-1
<PAGE>
status with the corporation, against judgments, fines, settlements and expenses,
including attorneys' fees. In addition, under certain circumstances such persons
may be indemnified against expenses actually and reasonably incurred in defense
of a proceeding by or on behalf of the corporation. Similarly, the corporation,
under certain circumstances, is authorized to indemnify directors and officers
of other corporations or enterprises who are serving as such at the request of
the corporation, when such persons are made, or threatened to be made, parties
to certain proceedings by reason of such status, against judgments, fines,
settlements and expenses, including attorneys' fees; and under certain
circumstances, such persons may be indemnified against expenses actually and
reasonably incurred in connection with the defense or settlement of a proceeding
by or in the right of such other corporation or enterprise. Indemnification is
permitted where such person (i) was acting in good faith; (ii) was acting in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation or other corporation or enterprise, as appropriate; (iii) with
respect to a criminal proceeding, has no reasonable cause to believe his conduct
was unlawful; and (iv) was not adjudged to be liable to the corporation or other
corporation or enterprise (unless the court where the proceeding was brought
determines that such person is fairly and reasonably entitled to indemnity).
Unless ordered by a court, indemnification may be made only following a
determination that such indemnification is permissible because the person being
indemnified has met the requisite standard of conduct. Such determination may be
made (i) by the Board of Directors of the Holding Company by a majority vote of
a quorum consisting of directors not at the time parties to such proceeding; or
(ii) if such a quorum cannot be obtained or the quorum so directs, then by
independent legal counsel in a written opinion; or (iii) by the stockholders.
Section 145 also permits expenses incurred by directors and officers in
defending a proceeding to be paid by the corporation in advance of the final
disposition of such proceedings upon the receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that he
is not entitled to be indemnified by the corporation against such expenses.
Item 15. Recent Sales of Unregistered Securities
The Registrant is newly incorporated, solely for the purpose of acting as
the holding company of First Security Federal Savings Bank pursuant to the Plan
of Conversion (filed as Exhibit 2 herein), and no sales of its securities have
occurred to date, other than the sale of one share of the Registrant's stock to
its incorporator for the purpose of qualifying the Registrant to do business in
Illinois.
II-2
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits:
1.1 Letter Agreement regarding marketing and consulting services
with Friedman, Billings, Ramsey & Co., Inc.*
1.2 Form of Agency Agreement
2 Plan of Conversion
3.1 Certificate of Incorporation of the Holding Company*
3.2 Bylaws of the Holding Company*
3.3 Charter of First Security Federal Savings Bank in stock form*
3.4 Bylaws of First Security Federal Savings Bank in stock form*
4 Form of Stock Certificate of the Holding Company*
5 Opinion of Silver, Freedman & Taff, L.L.P. with respect to legality
of stock*
8.1 Opinion of Silver, Freedman & Taff, L.L.P. with respect to Federal
income tax consequences of the Conversion*
8.2 Opinion of Crowe, Chizek and Company LLP with respect to Illinois
income tax consequences of the Conversion
8.3 FinPro Letter with respect to estimated pro forma market value and
Subscription Rights*
10.1 Employee Stock Ownership Plan*
10.2 Form of Proposed Stock Option and Incentive Plan*
10.3 Form of Proposed Recognition and Retention Plan*
10.4 Form of Employment Agreement with Julian E. Kulas*
10.5 Form of Change-In-Control Severance Agreement with Harry I. Kucewicz*
10.6 Form of Change-In-Control Severance Agreement with Mary H. Korb*
10.7 Form of Change-In-Control Severance Agreement with Irene S. Subota*
10.8 Form of Change-In-Control Severance Agreement with Adrian Hawryliw*
21 Subsidiaries*
23.1 Consent of Silver, Freedman & Taff, L.L.P.*
23.2 Consent of Crowe, Chizek and Company LLP
23.3 Consent of FinPro*
24 Power of Attorney (set forth on signature page)
99.1 Appraisal
99.2 Proxy Statement and form of proxy to be furnished to First Security
Federal Savings Bank account holders*
99.3 Stock Order Form and Order Form Instructions*
99.4 Question and Answer Brochure*
99.5 Advertising, Training and Community Informational Meeting Materials*
- ----------
* Previously filed.
II-3
<PAGE>
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and it will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant
II-4
<PAGE>
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Chicago, State of Illinois
on September 5, 1997.
FIRST SECURITYFED FINANCIAL, INC.
By: /s/ Julian E. Kulas
---------------------------------------------------
Julian E. Kulas, President, Chief Executive Officer
and Director
(Duly Authorized Representative)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Julian E. Kulas, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorney-in-fact and agent or his substitutes
or substitute may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/s/ Julian E. Kulas /s/ Steve Babyk
- -------------------------------------- ----------------------------
Julian E. Kulas Steve Babyk
President, Chief Executive Officer and Director
Director
(Principal Executive Officer)
Date: September 5, 1997 Date: September 5, 1997
/s/ Lila Maria Bodnar /s/ Myron Dobrowolsky
- -------------------------------------- ----------------------------
Lila Maria Bodnar Myron Dobrowolsky
Recording Secretary and Director Director
Date: September 5, 1997 Date: September 5, 1997
II-6
<PAGE>
/s/ Terry Gawryk /s/ George Kawka
- -------------------------------------- ----------------------------
Terry Gawryk George Kawka
Secretary and Director Director
Date: September 5, 1997 Date: September 5, 1997
/s/ Paul Nadzikewycz /s/ Jaroslay H. Sydorenko
- -------------------------------------- ----------------------------
Paul Nadzikewycz Jaroslav H. Sydorenko
Chairman of the Board Director
Date: September 5, 1997 Date: September 5, 1997
/s/ Chrysta Wereszczak
- --------------------------------------
Chrysta Wereszczak
Director
Date: September 5, 1997
II-7
<PAGE>
As filed with the Securities and Exchange Commission on September , 1997
Registration No. 333-31739
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
EXHIBITS TO PRE-EFFECTIVE
AMENDMENT NO. ONE TO THE
FORM S-1
UNDER
THE SECURITIES ACT OF 1933
FIRST SECURITYFED FINANCIAL, INC.
936 North Western Avenue
Chicago, Illinois 60622-4695
================================================================================
<PAGE>
EXHIBIT INDEX
Exhibits:
1.1 Letter Agreement regarding marketing and consulting services with
Friedman, Billings, Ramsey & Co., Inc.*
1.2 Form of Agency Agreement
2 Plan of Conversion
3.1 Certificate of Incorporation of the Holding Company*
3.2 Bylaws of the Holding Company*
3.3 Charter of First Security Federal Savings Bank in stock form*
3.4 Bylaws of First Security Federal Savings Bank in stock form*
4 Form of Stock Certificate of the Holding Company*
5 Opinion of Silver, Freedman & Taff, L.L.P. with respect to legality
of stock*
8.1 Opinion of Silver, Freedman & Taff, L.L.P. with respect to Federal
income tax consequences of the Conversion*
8.2 Opinion of Crowe, Chizek and Company LLP with respect to Illinois
income tax consequences of the Conversion
8.3 FinPro Letter with respect to estimated pro forma market value and
Subscription Rights*
10.1 Employee Stock Ownership Plan*
10.2 Form of Proposed Stock Option and Incentive Plan*
10.3 Form of Proposed Recognition and Retention Plan*
10.4 Form of Employment Agreement with Julian E. Kulas*
10.5 Form of Change-In-Control Severance Agreement with Harry I. Kucewicz*
10.6 Form of Change-In-Control Severance Agreement with Mary H. Korb*
10.7 Form of Change-In-Control Severance Agreement with Irene S. Subota*
10.8 Form of Change-In-Control Severance Agreement with Adrian Hawryliw*
21 Subsidiaries*
23.1 Consent of Silver, Freedman & Taff, L.L.P.*
23.2 Consent of Crowe, Chizek and Company LLP
23.3 Consent of FinPro*
24 Power of Attorney (set forth on signature page)
99.1 Appraisal
99.2 Proxy Statement and form of proxy to be furnished to First Security
Federal Savings Bank account holders*
99.3 Stock Order Form and Order Form Instructions*
99.4 Question and Answer Brochure*
99.5 Advertising, Training and Community Informational Meeting Materials*
- ----------
* Previously filed.
Exhibit 1.2
4,735,000 Shares
(subject to increase up to 5,445,000 shares
in the event of an oversubscription)
FIRST SECURITYFED FINANCIAL, INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
Agency Agreement
____________, 1997
Friedman, Billings, Ramsey & Co., Inc.
1001 Nineteenth Street North
10th Floor
Arlington, VA 22209
Ladies and Gentlemen:
First SecurityFed Financial, Inc., a Delaware corporation (the "Company"),
and First Security Federal Savings Bank, a federal savings bank (the "Bank"),
hereby confirm their agreement with Friedman, Billings, Ramsey & Co., Inc.
("FBR" or the "Agent") with respect to the offer and sale by the Company of
4,735,000 shares (subject to increase up to 5,445,000 shares in the event of an
oversubscription) of the Company's common stock, par value $.01 per share (the
"Common Stock"). In addition, as described herein, the Company expects to
contribute 250,000 shares of Common Stock to The Heritage Foundation of First
Security Federal Savings Bank, Inc. (the "Foundation"), such shares hereinafter
being referred to as the "Foundation Shares." The shares of Common Stock to be
sold by the Company in the Offerings (as hereinafter defined) are hereinafter
called the "Securities."
The Securities are being offered and the Foundation Shares are being
contributed in accordance with the plan of conversion (the "Plan") adopted by
the Board of Directors of the Bank pursuant to which the Bank intends to convert
from a federally chartered mutual savings bank to a federally chartered stock
savings bank and issue all of its stock to the Company. Pursuant to the Plan,
the Company is offering to certain of the Bank's depositors and borrowers and
its tax qualified employee benefit plans (the "Employee Plans") rights to
subscribe for the Securities in a subscription offering (the "Subscription
Offering"). To the extent Securities are not subscribed for in the Subscription
Offering, such Securities may be offered to certain members of the general
public, in a public offering and/or direct community offering (the "Public
Offering," and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription/Public Offering") to be
commenced concurrently with the Subscription Offering. It is currently
anticipated by the Bank and the Company that any Securities not subscribed for
in the Subscription/Public Offering will be offered, subject to Section 2
hereof, in a syndicated public offering (the "Syndicated Public Offering"). The
Subscription/Public Offering and the Syndicated Public Offering are hereinafter
referred to collectively as the "Offerings," and the conversion of the Bank from
<PAGE>
mutual to stock form, the acquisition of all of the capital stock of the Bank by
the Company and the Offerings are hereinafter referred to collectively as the
"Conversion." It is acknowledged that the number of Securities to be sold in the
Conversion may be increased or decreased as described in the Prospectus (as
hereinafter defined). If the number of Securities is increased or decreased in
accordance with the Plan, the term "Securities" shall mean such greater or
lesser number, where applicable. In the event that a holding company form of
organization is not utilized, all pertinent terms of this Agreement will apply
to the conversion of the Bank from the mutual to stock form of organization and
the sale of the Bank's common stock.
In connection with the Conversion and pursuant to the terms of the Plan as
described in the Prospectus, within twelve months following the consummation of
the Conversion, subject to the approval of the members of Bank and compliance
with certain conditions as may be imposed by regulatory authorities, the Company
will contribute 250,000 newly issued shares of Common Stock to the Foundation.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_____), including a
related prospectus, for the registration of the Securities and the Foundation
Shares under the Securities Act of 1933, as amended (the "1933 Act"), has filed
such amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectus constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to the rules and
regulations of the Commission under the 1933 Act, as from time to time amended
or supplemented pursuant to the 1933 Act or otherwise (the "1933 Act
Regulations")), are hereinafter referred to as the "Registration Statement" and
the "Prospectus," respectively, except that if any revised prospectus shall be
used by the Company in connection with the Subscription/ Public Offering or the
Syndicated Public Offering which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription/ Public Offering. Such Prospectus contains information with
respect to the Bank, the Company, the Conversion and the Common Stock.
2
<PAGE>
Section 1. Representations and Warranties. (a) The Company and the Bank
jointly and severally represent and warrant to the Agent as of the date hereof
as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the date hereof does not and at the Closing Time referred to
in Section 2 hereof will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information with respect to the Agent furnished to the
Company in writing by the Agent expressly for use in the Registration
Statement or Prospectus (the "Agent Information," which the Company and the
Bank acknowledge appears only in the sections captioned "Market for Common
Stock" and "The Conversion--Public Offering and Direct Community Offering"
and "The Conversion--Marketing Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the Treasury, Office
of Thrift Supervision (the "OTS") the Company's application for approval of
its acquisition of the Bank (the "Holding Company Application") on Form
H-(e)1 promulgated under the savings and loan holding company provisions of
the Home Owners' Loan Act ("HOLA") and the regulations promulgated
thereunder. The Company has received written notice dated _____________,
1997 from the OTS of its approval of the acquisition of the Bank, such
approval remains in full force and effect and no order has been issued by
the OTS suspending or revoking such approval and no proceedings therefor
have been initiated or, to the knowledge of the Company or the Bank,
threatened by the OTS. At the date of such approval, the Holding Company
Application complied in all material respects with the applicable
provisions of HOLA and the regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS governing the
conversion of federally chartered mutual savings institutions to stock form
(the "Conversion Regulations"), the Bank has filed with the OTS an
application for conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date
hereof (such application, as amended to date, if applicable, and as from
time to time amended or supplemented hereafter, is hereinafter referred to
3
<PAGE>
as the "Conversion Application"), including copies of the Bank's Proxy
Statement, dated _____________, 1997, relating to the Conversion (the
"Proxy Statement"), and the Prospectus. The OTS has, by order dated
____________, 1997 (the "Order"), approved the Conversion Application
(which Application includes the Plan) including the waiver of certain
provisions of the Conversion Regulations specified in such Order with
respect to the establishment of and contribution to the Foundation, such
approval remains in full force and effect and no order has been issued by
the OTS suspending or revoking such approval and no proceedings therefor
have been initiated or, to the knowledge of the Company or the Bank,
threatened by the OTS. At the date of such approval, the Conversion
Application complied in all material respects with the applicable
provisions of the Conversion Regulations except for those provisions
specifically waived by the OTS in the Order.
(iv) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will comply in all material respects with the
applicable provisions of the Conversion Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Prospectus
and all supplemental sales literature, as of the date the Registration
Statement became effective and at the Closing Time referred to in Section
2, complied and will comply in all material respects with the applicable
requirements of the Conversion Regulations and, at or prior to the time of
their first use, will have received all required authorizations of the OTS
for use in final form. The supplemental sales literature does not contain
any untrue statement of a material fact.
(v) The OTS has not, by order or otherwise, prevented or suspended the
use of the Prospectus or any supplemental sales literature authorized by
the Company or the Bank for use in connection with the Offerings.
(vi) At the Closing Time referred to in Section 2, the Company and the
Bank will have satisfied all conditions precedent to the Conversion and the
stock contribution to the Foundation in accordance with the Plan, the
applicable Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the Conversion imposed
upon the Company or the Bank by the OTS, the Federal Deposit Insurance
Corporation (the "FDIC"), or any other regulatory authority, other than
those which the regulatory authority permits to be completed after the
Conversion.
(vii) FinPro, which prepared the valuation of the Bank as part of the
Conversion, satisfies all requirements for an appraiser set forth in the
Conversion Regulations.
(viii) The accountants who certified the financial statements and
supporting schedules of the Bank included in the Registration Statement are
independent public accountants within the meaning of the Code of Ethics of
the American Institute of Certified Public Accountants, and such
accountants are, with respect to the Company, the Bank and the Subsidiary
of the Bank (as hereinafter defined), independent certified public
accountants as required by the 1933 Act and the 1933 Act Regulations.
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(ix) The consolidated financial statements of the Bank and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Bank and the Subsidiary as at
the dates indicated and the results of operations, retained earnings and
cash flows for the periods specified, and comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
Regulations and the Conversion Regulations; except as otherwise stated in
the Registration Statement, said consolidated financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules and tables
included in the Registration Statement present fairly the information
required to be stated therein. The financial statements of the Company are
not required to be included in the Registration Statement and Prospectus
under applicable accounting requirements of the 1933 Act Regulations.
(x) The pro forma financial statements and other pro forma information
included in the Prospectus present fairly the information shown therein,
have been prepared in accordance with generally accepted accounting
principles and the Commission's rules and guidelines with respect to pro
forma financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate under the
circumstances.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein (A) there has been no material adverse change in the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiary considered as one enterprise, whether or not
arising in the ordinary course of business, and (B) except for transactions
specifically referred to or contemplated in the Prospectus, there have been
no transactions entered into by the Company, the Bank or the Subsidiary,
other than those in the ordinary course of business, which are material
with respect to the Company, the Bank and the Subsidiary considered as one
enterprise.
(xii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse effect on
the financial condition, results of operations or business affairs of the
Company, the Bank and the Subsidiary considered as one enterprise.
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<PAGE>
(xiii) Upon consummation of the Conversion, the authorized, issued and
outstanding capital stock of the Company will be within the range set forth
in the Prospectus under "Capitalization" (except for subsequent issuances,
if any, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus and except for the issuance of shares of
Common Stock to the Foundation after completion of the Conversion, subject
to compliance with all conditions imposed thereon by the OTS, in an amount
as described in the Prospectus); except for shares issued in connection
with the initial capitalization of the Company, which shares shall be
canceled upon consummation of the Conversion, no shares of Common Stock
have been or will be issued and outstanding prior to the Closing Time
referred to in Section 2; at the time of Conversion, the Securities and the
Foundation Shares will have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan, will be duly and
validly issued and fully paid and non-assessable; the terms and provisions
of the Common Stock and the capital stock of the Company conform to all
statements relating thereto contained in the Prospectus; and the issuance
of the Securities and the Foundation Shares is not subject to preemptive or
other similar rights.
(xiv) The Bank, as of the date hereof, is a federally chartered
savings bank in mutual form and upon consummation of the Conversion will be
a federally chartered savings bank in stock form, in both instances with
full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; the Company,
the Bank and the Subsidiary have obtained all licenses, permits and other
governmental authorizations currently required for the conduct of their
respective businesses or required for the conduct of their respective
businesses as contemplated by the Holding Company Application and the
Conversion Application, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations or
business affairs of the Company, the Bank and the Subsidiary considered as
one enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the Bank and
the Subsidiary are in all material respects in compliance therewith;
neither the Company, the Bank nor the Subsidiary has received notice of any
proceeding or action relating to the revocation or modification of any such
license, permit or other governmental authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and the Subsidiary,
considered as one enterprise; and the Bank is in good standing under the
laws of the United States and is qualified as a foreign corporation in any
jurisdiction in which the failure to so qualify would have a material
adverse effect on the financial condition, results of operations or
business affairs of the Company, the Bank and the Subsidiary considered as
one enterprise.
(xv) The deposit accounts of the Bank are insured by the FDIC and upon
consummation of the Conversion, the liquidation account for the benefit of
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<PAGE>
eligible account holders and supplemental eligible account holders will be
duly established in accordance with the requirements of the Conversion
Regulations.
(xvi) No shares of common stock of the Bank have been or will be
issued prior to the Closing Time referred to in Section 2; and as of
Closing Time referred to in Section 2, all of the issued and outstanding
capital stock of the Bank will be duly authorized, validly issued and fully
paid and nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of any mortgage,
pledge, lien, encumbrance or claim.
(xvii) The Foundation has been duly incorporated and is validly
existing as a private charitable foundation in good standing under the laws
of the State of Illinois with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus; the Foundation will not be a savings and loan holding company
within the meaning of 12 C.F.R. Section 574.2(q) as a result of the
issuance of shares of Common Stock to it in accordance with the terms of
the Plan and in the amounts as described in the Prospectus; no approvals
are required to establish the Foundation and to contribute the shares of
Common Stock thereto as described in the Prospectus other than those set
forth in the OTS approval of the Conversion Application; except as
specifically disclosed in the Prospectus and the Proxy Statement, there are
no agreements and/or understandings, written or oral or otherwise, between
the Company and/or the Bank and the Foundation with respect to the control,
directly or indirectly, over the voting and the acquisition or disposition
of the shares of Common Stock to be contributed by the Company to the
Foundation; the shares of Common Stock to be issued to the Foundation in
accordance with the Plan and as described in the Prospectus will have been
duly authorized for issuance and, when issued and contributed by the
Company pursuant to the Plan, will be duly and validly issued and fully
paid and non-assessable.
(xviii) The only subsidiary of the Bank, Western Security Corporation
(the "Subsidiary"), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business except where the failure to so qualify
would not have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the Bank and the
Subsidiary considered as one enterprise; the activities of the Subsidiary
are permitted to subsidiaries of a federally chartered savings bank by the
rules, regulations, resolutions and practices of the OTS; all of the issued
and outstanding capital stock of the Subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the
Bank directly, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and the Bank has no indirect
subsidiaries.
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<PAGE>
(xix) The Company and the Bank have taken all corporate action
necessary for them to execute, deliver and perform this Agreement, and this
Agreement has been duly executed and delivered by, and is the valid and
binding agreement of, the Company and the Bank, enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency or other
laws affecting the enforceability of the rights of creditors generally or
the rights of creditors of a federally insured depository institution and
judicial limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities laws.
(xx) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be specifically described, indicated
or contemplated therein, none of the Company, the Bank or the Subsidiary
will have (A) issued any securities or incurred any material liability or
obligation, direct or contingent, or borrowed money, except borrowings in
the ordinary course of business from the same or similar sources and in
similar amounts as indicated in the Prospectus, or (B) entered into any
transaction or series of transactions which is material in light of the
business of the Company, the Bank and the Subsidiary, taken as a whole,
excluding the origination of loans or the purchase or sale of investment
securities or mortgage-backed securities in the ordinary course of business
or otherwise as indicated in the Prospectus.
(xxi) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Securities and the Foundation Shares,
except for the declaration of effectiveness of any required post-effective
amendment to the Registration Statement by the Commission and approval
thereof by the OTS, the issuance of the federal stock charter by the OTS
and as may be required under the securities laws of various jurisdictions.
(xxii) Neither the Company, the Bank nor the Subsidiary is in
violation of its certificate of incorporation, articles of incorporation or
charter or bylaws, as the case may be (and the Bank will not be in
violation of its charter or bylaws in stock form upon consummation of the
Conversion); and neither the Company, the Bank nor the Subsidiary is in
default (nor has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or the Subsidiary is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company, the Bank or the Subsidiary is subject, except for such defaults
that would not, individually or in the aggregate, have a material adverse
effect on the financial condition, results of operations or business of the
Company, the Bank and the Subsidiary considered as one enterprise.
8
<PAGE>
(xxiii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action and do not and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, the Bank or the Subsidiary pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank or the Subsidiary is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company, the Bank or the Subsidiary is subject, except for
such defaults that would not, individually or in the aggregate, have any
adverse effect on the Offerings or the Agent, as such, or have a material
adverse effect on the financial condition, results of operations or
business affairs of the Company, the Bank and the Subsidiary considered as
one enterprise; nor will such action result in any violation of the
provisions of the certificate of incorporation, articles of incorporation
or charter, as the case may be, or bylaws of the Company, the Bank or the
Subsidiary; nor will such action result in any violation of any applicable
law, administrative regulation or administrative or court decree except for
immaterial violations that would not impair the ability of the Company and
the Bank to execute, deliver and perform under this Agreement or consummate
the transactions contemplated herein.
(xxiv) No labor dispute with the employees of the Company, the Bank or
the Subsidi ary exists or, to the knowledge of the Company or the Bank, is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors which might be expected to result in any material adverse
change in the financial condition, results of operations or business
affairs of the Company, the Bank and the Subsidiary considered as one
enterprise.
(xxv) The Company, the Bank and the Subsidiary have good and
marketable title to all properties and assets for which ownership is
material to the business of the Company, the Bank or the Subsidiary and to
those properties and assets described in the Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or restrictions, except
such as are described in the Prospectus or are not material in relation to
the business of the Company, the Bank or the Subsidiary considered as one
enterprise; and all of the leases and subleases material to the business of
the Company, the Bank or the Subsidiary under which the Company, the Bank
or the Subsidiary hold properties, including those described in the
Prospectus, are valid and binding agreements of the Company, the Bank and
the Subsidiary, enforceable in accordance with their terms.
(xxvi) The Company, the Bank and the Subsidiary are not in violation
of any directive from the OTS or the FDIC to make any change in the method
of conducting their respective businesses; the Bank and the Subsidiary have
conducted and are conducting their business so as to comply in all material
respects with all applicable statutes, regulations and administrative and
court decrees (including, without limitation, all regulations, decisions,
directives and orders of the OTS or the FDIC).
9
<PAGE>
(xxvii) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Bank, threatened, against or affecting
the Company, the Bank or the Subsidiary which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or which
might result in any material adverse change in the financial condition,
results of operations or business affairs of the Company, the Bank and the
Subsidiary considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which might materially
and adversely affect the consummation of the Conversion; all pending legal
or governmental proceedings to which the Company, the Bank or the
Subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to their
businesses, are considered in the aggregate not material; and there are no
contracts or documents of the Company, the Bank or the Subsidiary which are
required to be described in or filed as exhibits to the Registration
Statement or the Conversion Application which have not been so described or
filed.
(xxviii) The Bank has obtained an opinion of its counsel, Silver,
Freedman & Taff, L.L.P., with respect to the legality of the Securities and
the Foundation Shares to be issued and the federal and the Illinois income
tax consequences of the Conversion, copies of which are filed as exhibits
to the Registration Statement; all material aspects of the aforesaid
opinions are accurately summarized in the Prospectus; the facts and
representations upon which such opinions are based are truthful, accurate
and complete in all material respects; and neither the Bank nor the Company
has taken any action inconsistent therewith.
(xxix) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxx) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank included
in the Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending, including without limitation
truth in lending (including the requirements of Regulations Z and 12 C.F.R.
Part 226 and Section 563.99), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all disclosure laws
applicable to such loans, except for violations which, if asserted, would
not result in a material adverse effect on the financial condition, results
of operations or business of the Company, the Bank and the Subsidiary
considered as one enterprise.
(xxxi) With the exception of the loan from the Company to the Employee
Stock Ownership Plan as described in the Prospectus, to the knowledge of
the Company and the Bank, none of the Company, the Bank or employees of the
Bank has made any payment of funds of the Company or the Bank as a loan for
the purchase of the Common Stock or made any other payment of funds
prohibited by law, and no funds have been set aside to be used for any
payment prohibited by law.
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<PAGE>
(xxxii) The Company, the Bank and the Subsidiary are in compliance in
all material respects with the applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transaction Reporting
Act of 1970, as amended, and the rules and regulations thereunder.
(xxxiii) Neither the Company, the Bank or the Subsidiary nor any
properties owned or operated by the Company, the Bank or the Subsidiary is
in violation of or liable under any Environmental Law (as defined below),
except for such violations or liabilities that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Company, the
Bank and the Subsidiary considered as one enterprise. There are no actions,
suits or proceedings, or demands, claims, notices or investigations
(including, without limitation, notices, demand letters or requests for
information from any environmental agency) instituted or pending, or to the
knowledge of the Company or the Bank, threatened, relating to the liability
of any property owned or operated by the Company, the Bank or the
Subsidiary thereof, under any Environmental Law. For purposes of this
subsection, the term "Environmental Law" means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life or any other
natural resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of any substance presently listed, defined, designated
or classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxxiv) The Company, the Bank and the Subsidiary have filed all
federal income and state and local franchise tax returns required to be
filed and have made timely payments of all taxes shown as due and payable
in respect of such returns, and no deficiency has been asserted with
respect thereto by any taxing authority.
(xxxv) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Common Stock
quoted on the Nasdaq National Market effective as of the Closing Time.
(b) Any certificate signed by any officer of the Company or the Bank and
delivered to the Agent or counsel for the Agent shall be deemed a representation
and warranty by the Company or the Bank to the Agent as to the matters covered
thereby.
Section 2. Appointment of FBR; Sale and Delivery of the Securities;
Closing. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints FBR as its Agent to consult with and advise the Company, and to assist
the Company with the solicitation of subscriptions and purchase orders for
Securities, in connection with the Company's sale of Common Stock in the
Subscription/Public Offering and the Syndicated Public Offering. On the basis of
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<PAGE>
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, FBR hereby accepts such appointment and agrees
to use its best efforts to assist the Company with the solicitation of
subscriptions and purchase orders for Securities in accordance with this
Agreement; provided, however, that the Agent shall not be obligated to take any
action which is inconsistent with any applicable laws, regulations, decisions or
orders. The services to be rendered by FBR pursuant to this appointment include
the following: (i) consulting as to the securities marketing implications of any
aspect of the Plan of Conversion or related corporate documents; (ii) reviewing
with the Board of Directors the independent appraiser's appraisal of the Common
Stock; (iii) reviewing all offering documents, including the Prospectus, stock
order form and related offering materials (it being understood that preparation
and filing of such documents is the sole responsibility of the Company and the
Bank and their counsel); (iv) assisting in the design and implementation of a
marketing strategy for the Offerings; (v) providing support to the Company and
the Bank in obtaining all requisite regulatory approvals; (vi) assisting Bank
management in preparing for meetings with potential investors and
broker-dealers; and (vii) providing such other general advice and assistance as
may be requested to promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the earlier to
occur of (a) forty-five (45) days after the last day of the Subscription
Offering, unless the Company and the Agent agree in writing to extend such
period and the OTS agrees to extend the period of time in which the Securities
may be sold, or (b) the receipt and acceptance of subscriptions and purchase
orders for all of the Securities.
If any of the Securities remain available after the expiration of the
Subscription/Public Offering, at the request of the Company and the Bank, the
Agent will seek to form a syndicate of registered broker or dealers ("Selected
Dealers") to assist in the solicitation of purchase orders of such Securities on
a best efforts basis, subject to the terms and conditions set forth in a
selected dealers' agreement (the "Selected Dealers' Agreement"), substantially
in the form set forth in Exhibit A to this Agreement. FBR will endeavor to limit
the aggregate fees to be paid by the Company and the Bank under any such
Selected Dealers' Agreement to an amount competitive with gross underwriting
discounts charged at such time for underwritings of comparable amounts of stock
sold at a comparable price per share in a similar market environment; provided,
however, that the aggregate fees payable to the Agent and Selected Dealers shall
not exceed 5.5% of the aggregate Purchase Price (as defined in the Prospectus)
of the Securities sold by such Selected Dealers. The Agent will endeavor to
distribute the Securities among the Selected Dealers in a fashion which best
meets the distribution objective of the Company and the requirements of the
Plan, which may result in limiting the allocation of stock to certain Selected
Dealers. It is understood that in no event shall the Agent be obligated to act
as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
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<PAGE>
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6 and 7 hereof and the obligations of the Agent as
provided in Sections 6 and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover page
of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of _________________, at 10:00 a.m., local time, or at such other place
and time as shall be agreed upon by the parties hereto, on a business day to be
agreed upon by the parties hereto. The Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for all the
Securities. One or more certificates for Securities shall be delivered in such
denomination or denominations and registered in such name or names as FBR
requests. Notwithstanding the foregoing, certificates for Securities purchased
through Selected Dealers shall be made available to the Agent for inspection at
least 48 hours prior to the Closing Time at such office as the Agent shall
designate. The hour and date upon which the Company shall release for delivery
all of the Securities, in accordance with the terms hereof, is herein called the
"Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4 hereof,
the Agent will receive the following compensation for its services hereunder
(the "Marketing Fee"):
(a) One percent (1.0%) of the aggregate Purchase Price of the
Securities sold in the Subscription Offering and the Public Offering,
excluding in each case shares (i) purchased by any employee benefit plan of
the Bank or Company established for the benefit of their respective
directors, officers and employees, (ii) purchased by any director, officer
or employee of the Bank or the Company or members of their immediate
families which term shall mean parents, spouse, siblings, children and
grandchildren and (iii) contributed by the Company to the Foundation; and
(b) with respect to any Securities sold by a National Association of
Securities Dealers, Inc. ("NASD") member firm (other than FBR) under the
Selected Dealers' Agreement in the Syndicated Public Offering, (i) the
compensation payable to Selected Dealers under any Selected Dealers'
Agreement, (ii) any sponsoring dealer's fees; and (iii) a management fee to
FBR of one percent (1.0%).
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If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fee other than the Management Fee (as hereinafter defined) shall
be payable by the Company to FBR; provided, however, the Company shall reimburse
the Agent for all of its reasonable out-of-pocket expenses incurred prior to
termination, including the reasonable fees and disbursements of counsel for the
Agent in accordance with the provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of services already provided by FBR, the Bank
has made advance payments to FBR in the aggregate amount of $20,000 (the
"Management Fee") which shall be credited against the Marketing Fee.
Section 3. Covenants of the Company. The Company and the Bank covenant with
the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the 1933 Act
Regulations or the Conversion Regulations or as may hereafter be reasonably
requested by the Agent. The Company and the Bank will promptly file the
Prospectus and any supplemental sales literature with the OTS and, if required,
with the Commission. Following completion of the Subscription/Public Offering,
in the event of a Syndicated Public Offering, the Company and the Bank will (i)
promptly prepare and file with the Commission a post-effective amendment to the
Registration Statement relating to the results of the Subscription/Public
Offering, any additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information relating
to the results of the Subscription/Public Offering and pricing information
pursuant to Rule 424(c) of the 1933 Act Regulations, in either case in a form
acceptable to the Agent. The Company and the Bank will notify the Agent
immediately, and confirm the notice in writing, (i) of the effectiveness of any
post-effective amendment of the Registration Statement, the filing of any
supplement to the Prospectus and the filing of any amendment to the Conversion
Application, (ii) of the receipt of any comments from the OTS or the Commission
with respect to the transactions contemplated by this Agreement or the Plan,
(iii) of any request by the Commission or the OTS for any amendment to the
Registration Statement, the Conversion Application or the Holding Company
Application or any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the OTS of any order suspending the
Offerings or the use of the Prospectus or the initiation of any proceedings for
that purpose, (v) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, and (vi) of the receipt of any notice with respect
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to the suspension of any qualification of the Securities for offering or sale in
any jurisdiction. The Company and the Bank will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its intention to
file or prepare any amendment to the Conversion Application, the Holding Company
Application or the Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectus (including any
revised prospectus which the Company proposes for use in connection with the
Syndicated Public Offering of the Securities which differs from the prospectus
on file at the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish the Agent
with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which the Agent or
counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered, the
Company and the Bank will comply, at their own expense, with all requirements
imposed upon them by the OTS, by the applicable Conversion Regulations, as from
time to time in force, and by the 1933 Act, the 1933 Act Regulations, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and
regulations of the Commission promulgated thereunder, including, without
limitation, Regulation M under the 1934 Act, so far as necessary to permit the
continuance of sales or dealing in shares of Common Stock during such period in
accordance with the provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
the Company and the Bank will forthwith amend or supplement the Prospectus (in
form and substance satisfactory to counsel for the Agent) so that, as so amended
or supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company and the Bank will
furnish to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company and the Bank will
each furnish such information with respect to itself as the Agent may from time
to time reasonably request.
(f) The Company and the Bank will take all necessary action, in cooperation
with the Agent, to qualify the Securities for offering and sale under the
applicable securities laws of such states of the United States and other
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<PAGE>
jurisdictions as the Conversion Regulations may require and as the Agent and the
Company have agreed; provided, however, that the Company and the Bank shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified.
(g) The Company authorizes FBR and any Selected Dealers to act as agent of
the Company in distributing the Prospectus to persons entitled to receive
subscription rights and other persons to be offered Securities having record
addresses in the states or jurisdictions set forth in a survey of the securities
or "blue sky" laws of the various jurisdictions in which the Offerings will be
made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(i) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions contemplated hereby
occurs, the Company will furnish to its stockholders as soon as practicable
after the end of each such fiscal year an annual report (including consolidated
statements of financial condition and consolidated statements of income,
stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated summary
financial information of the Company for such quarter in reasonable detail. In
addition, such annual report and quarterly consolidated summary financial
information shall be made public through the issuance of appropriate press
releases at the same time or prior to the time of the furnishing thereof to
stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions contemplated hereby
occurs, the Company will furnish to the Agent (i) as soon as available, a copy
of each report or other document of the Company furnished generally to
stockholders of the Company or furnished to or filed with the Commission under
the 1934 Act or any national securities exchange or system on which any class of
securities of the Company is listed or quoted, and (ii) from time to time, such
other information concerning the Company as the Agent may reasonably request.
(k) The Company and the Bank will conduct the Conversion (including the
formation and operation of the Foundation) in all material respects in
accordance with the Plan, the Conversion Regulations (to the extent not waived
by the provisions of the Order) and all other applicable regulations, decisions
and orders, including all applicable terms, requirements and conditions
precedent to the Conversion imposed upon the Company or the Bank by the OTS.
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<PAGE>
(l) The Company and the Bank will use the net proceeds received by them
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(m) The Company will file with the Commission such reports on Form SR as
may be required pursuant to Rule 463 of the 1933 Act Regulations.
(n) The Company will file a registration statement for the Common Stock
under Section 12(g) of the 1934 Act prior to completion of the Offerings and
will request that such registration statement be effective upon completion of
the Conversion. The Company will maintain the effectiveness of such registration
for not less than three years. The Company will file with the Nasdaq Stock
Market all documents and notices required by the Nasdaq Stock Market of
companies that have issued securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
(p) Other than in connection with any employee benefit plan or arrangement
described in the Prospectus, the Company will not, without the prior written
consent of the Agent, sell or issue, contract to sell or otherwise dispose of,
any shares of Common Stock or any securities convertible or exchangeable for
shares of Common Stock other than the Securities or the Foundation Shares for a
period of 180 days following the Closing Time.
(q) The Company and the Bank will comply with the conditions imposed by or
agreed to with the OTS in connection with its approval of the Holding Company
Application and the Conversion Application including those conditions relating
to the operation of the Foundation; the Company and the Bank shall use their
best efforts to ensure that the Foundation submits within the time frames
required by applicable law a request to the Internal Revenue Service to be
recognized as a tax-exempt organization under Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"); the Company and the Bank will
take no action which will result in the possible loss of the Foundation's
tax-exempt status; and neither the Company nor the Bank will contribute any
additional assets to the Foundation until such time that such additional
contributions will be deductible for federal and state income tax purposes.
(r) During the period beginning on the date hereof and ending on the later
of the third anniversary of the Closing Time or the date on which the Agent
receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7 hereof,
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the common stock of the Bank
becoming subject to any security interest, mortgage, pledge, lien or
encumbrance; provided, however, that this covenant shall be null and void if the
Board of Governors of the Federal Reserve System, by regulation, policy
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<PAGE>
statement or interpretive release, or by written order or written advice
addressed to the Bank or the Agent specifically addressing the provisions of
Section 6(a) hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
Section 4. Payment of Expenses. The Company and the Bank jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the printing and
filing of the Registration Statement and the Conversion Application as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the purchasers in the
Offerings, (iv) the fees and disbursements of the Company's and the Bank's
counsel, accountants, conversion agent, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq National Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Bank or the Company pursuant to this Section without
the prior approval of the Bank or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the NASD, (ii) legal fees and expenses of the
Agent's counsel up to an aggregate of $37,500, and (iii) all reasonable out of
pocket expenses incurred by the Agent relating to the Offerings, including,
without limitation, advertising, promotional, syndication and travel expenses
and fees, provided that should the expenses in this clause (iii) exceed $50,000,
the Company must approve such expenses above that amount for FBR to be
reimbursed. All fees and expenses to which the Agent is entitled to
reimbursement under this paragraph of this Section 4 shall be due and payable
upon receipt by the Company or the Bank of a written accounting therefor setting
forth in reasonable detail the expenses incurred by the Agent.
Section 5. Conditions of Agent's Obligations. The Company, the Bank and the
Agent agree that the issuance and the sale of Securities and all obligations of
the Agent hereunder are subject to the accuracy of the representations and
warranties of the Company and the Bank herein contained as of the date hereof
and the Closing Time, to the accuracy of the statements of officers and
directors of the Company and the Bank made pursuant to the provisions hereof, to
the performance by the Company and the Bank of their obligations hereunder, and
to the following further conditions:
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<PAGE>
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, no order suspending the Offerings or
authorization for final use of the Prospectus shall have been issued or
proceedings therefor initiated or threatened by the OTS and no order suspending
the sale of the Securities in any jurisdiction shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Silver,
Freedman & Taff, L.L.P., counsel for the Company and the Bank, in form and
substance satisfactory to counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of Illinois and
the Commonwealth of Pennsylvania and each jurisdiction in which the
failure to so qualify would have a material adverse effect upon the
consolidated financial condition, results of operations or business
affairs of the Company, the Bank and the Subsidiary, taken as a whole.
(iv) Upon consummation of the Conversion and the issuance of
Foundation Shares to the Foundation immediately upon completion
thereof, subject to compliance with all conditions imposed upon the
formation and contribution thereof by the OTS under the terms of the
Order, in an amount as described in the Prospectus, the authorized,
issued and outstanding capital stock of the Company will be within the
range described in the Prospectus and, except for shares issued upon
incorporation of the Company, which shares shall be canceled prior to
or concurrently with the Closing Time, no shares of Common Stock have
been issued and are outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have been duly and
validly authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, will be duly and
validly issued and fully paid and non-assessable.
(vi) The issuance of the Securities and the Foundation Shares is
not subject to preemptive or other similar rights arising by operation
of law or, to their knowledge, otherwise.
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<PAGE>
(vii) The Bank has been at all times since the date hereof and
prior to the Closing Time organized and validly existing under the
laws of the United States of America as a federally chartered savings
bank of mutual form, and, at Closing Time, has become duly chartered
and validly existing under the laws of the United States of America as
a federally chartered savings bank in stock form, in both instances
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Bank is duly
qualified as a foreign corporation in each jurisdiction in which the
failure to so qualify would have a material adverse effect upon the
financial condition, results of operations or business affairs of the
Bank.
(viii) The Bank is a member of the Federal Home Loan Bank of
Chicago and the deposit accounts of the Bank are insured by the FDIC
up to the applicable limits.
(ix) The Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would
have a material adverse effect upon the financial condition, results
of operations or business of the Bank and the Subsidiary, taken as a
whole; the activities of the Subsidiary are permitted to a subsidiary
of a savings association holding company and of a federally chartered
savings bank by the rules, regulations, resolutions and practices of
the OTS; all of the issued and outstanding capital stock of the
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of such counsel's knowledge, is
owned by the Bank directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim, legal, equitable or
otherwise.
(x) The Foundation has been duly incorporated and is validly
existing as a non-stock corporation in good standing under the laws of
the State of Illinois with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus; the Foundation is not a savings and loan holding
company within the meaning of 12 C.F.R. Section 574.2(q) as a result
of the issuance of shares of Common Stock to it in accordance with the
terms of the Plan and in the amounts as described in the Prospectus;
no approvals are required to establish the Foundation and to
contribute the shares of Common Stock thereto as described in the
Prospectus other than those set forth in the Order; the shares of
Common Stock to be issued to the Foundation in accordance with the
Plan and as described in the Prospectus will have been duly authorized
for issuance and, when issued and contributed by the Company pursuant
to the Plan, will be duly and validly issued and fully paid and
non-assessable.
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(xi) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank will be duly authorized and
validly issued and fully paid and nonassessable, and all such capital
stock will be owned beneficially and of record by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance or
claim, legal, equitable or otherwise.
(xii) The OTS has approved the Holding Company Application and
the Conversion Application and no action is pending, or to such
counsel's knowledge, threatened with respect to the Holding Company
Application or the Conversion Application (including therewith, the
establishment of the Foundation and the contribution of shares of
Common Stock thereto) or the acquisition by the Company of all of the
Bank's issued and outstanding capital stock; the Holding Company
Application and the Conversion Application comply as to form in all
material respects with the applicable requirements of the OTS except
as compliance therewith is specifically waived by the provisions of
the Order and include all documents required to be filed as exhibits
thereto; and the Company is authorized to become a savings association
holding company and to establish the Foundation and is duly authorized
to own all of the issued and outstanding capital stock of the Bank to
be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including the
establishment of the Foundation and the contribution thereto of shares
of Common Stock, have been duly and validly authorized by all
necessary corporate action on the part of each of the Company and the
Bank, and this Agreement constitutes the legal, valid and binding
agreement of each of the Company and the Bank, enforceable in
accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited under applicable law (it being
understood that such counsel may avail itself of customary exceptions
concerning the effect of bankruptcy, insolvency or similar laws and
the availability of equitable remedies); the execution and delivery of
this Agreement, the incurrence of the obligations herein set forth and
the consummation of the transactions contemplated herein will not
result in any violation of the provisions of the certificate of
incorporation, articles of incorporation or charter, as the case may
be, or bylaws of the Company, the Bank or the Subsidiary; and, to the
best of such counsel's knowledge, the execution and delivery of this
Agreement, the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not conflict
with or constitute a breach of, or default under, and no default
exists, and no event has occurred which, with notice or lapse of time
or both, would constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Bank or the Subsidiary pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank or the Subsidiary is a party
21
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or by which any of them may be bound, or to which any of the property
or assets of the Company, the Bank or the Subsidiary is subject that,
individually or in the aggregate, would have a material adverse effect
on the financial condition, results of operations or business affairs
of the Company, the Bank and the Subsidiary considered as one
enterprise.
(xiv) The Prospectus has been duly authorized by the OTS for
final use pursuant to the Conversion Regulations and the Order and no
action is pending or, to the best of such counsel's knowledge, is
threatened, by the OTS to revoke such authorization.
(xv) The Registration Statement is effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor
initiated or, to the best of such counsel's knowledge and information,
threatened by the Commission.
(xvi) No further approval, authorization, consent or other order
of any federal or Illinois or Pennsylvania board or body is required
in connection with the execution and delivery of this Agreement, the
issuance of the Securities and the Foundation Shares and the
consummation of the Conversion, except as may be required under the
securities or Blue Sky laws of various jurisdictions as to which no
opinion need be rendered.
(xvii) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements and
appraisal, financial and statistical data included therein, as to
which no opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act, the 1933 Act
Regulations and the Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies with
all applicable statutory requirements.
(xix) To counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against or affecting the Company,
the Bank, the Subsidiary or the Foundation which are required to be
disclosed in the Registration Statement and Prospectus, other than
those disclosed therein, and all pending legal or governmental
proceedings to which the Company, the Bank, the Subsidiary or the
Foundation is a party or to which any of their property is subject
which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(xx) The information in the Prospectus under "Dividends," "The
Conversion--Income Tax Consequences," "Regulation," "The
Conversion--Effects of Conversion to Stock Form on Depositors and
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Borrowers of the Bank," "The Conversion--Stock Contribution to the
Charitable Foundation," "Restrictions on Acquisitions of Stock and
Related Takeover Defensive Provisions" and "Description of Capital
Stock," to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions, has
been reviewed by them and is correct in all material respects.
(xxi) To counsel's knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement
or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xxii) The Plan and the establishment and funding of the
Foundation has been duly authorized by the Board of Directors of the
Company and the Board of Directors of the Bank and the OTS's approval
of the Plan remains in full force and effect; the Bank's charter has
been amended, effective upon consummation of the Conversion and the
filing of such amended charter with the OTS, to authorize the issuance
of permanent capital stock; to such counsel's knowledge, the Company
and the Bank have conducted the Conversion and the establishment and
funding of the Foundation in all material respects in accordance with
applicable requirements of the Conversion Regulations (except to the
extent the requirement to comply therewith was waived specifically by
the terms of the Order), the Plan and all other applicable
regulations, decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions precedent to
the Conversion and the establishment and funding of the Foundation
imposed upon the Company or the Bank by the OTS and no order has been
issued by the OTS to suspend the Offerings and no action for such
purpose has been instituted or, to the best of such counsel's
knowledge, threatened by the OTS; and, to such counsel's knowledge, no
person has sought to obtain review of the final action of the OTS in
approving the Conversion Application (which includes the Plan which
provides for the establishment and funding of the Foundation) and the
Holding Company Application.
(xxiii) To such counsel's knowledge, the Company and the Bank and
the Subsidiary have obtained all material licenses, permits and other
governmental authorizations currently required for the conduct of
their respective businesses as described in the Registration Statement
and Prospectus, and all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company and the
Bank and the Subsidiary are in all material respects complying
therewith.
(xxiv) Neither the Company, nor the Bank nor the Subsidiary is in
violation of its certificate of incorporation, articles of
incorporation or charter, as the case may be (and the Bank will not be
in violation of its charter in stock form upon consummation of the
Conversion); to such counsel's knowledge, the Company, the Bank and
the Subsidiary are not in default (nor has any event occurred which,
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with notice or lapse of time or both, would constitute a default) in
the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the
Bank or the Subsidiary is a party or by which the Company, the Bank or
the Subsidiary or any of their property may be bound in any respect
that would have a material adverse effect upon the financial
condition, results of operations or business affairs of the Company,
the Bank and the Subsidiary taken as a whole.
(xxv) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of Chapman and
Cutler, counsel for the Agent, with respect to the matters set forth in
Sections 5(b)(1)(i), (iv), (v), (vi) (solely as to preemptive rights
arising by operation of law), (xiii), (xvii) and (xviii) and such other
matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(1) and
(b)(2), respectively, of this Section, Silver, Freedman & Taff, L.L.P. and
Chapman and Cutler shall each additionally state that nothing has come to
their attention that would lead them to believe that the Registration
Statement (except for financial statements, the notes thereto and other
financial, statistical and appraisal data included therein, as to which
counsel need make no statement), at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (except for financial statements and
schedules and other financial, statistical or appraisal data included
therein, as to which counsel need make no statement), at the time the
Registration Statement became effective or at Closing Time, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In giving their
opinions, Silver, Freedman & Taff, L.L.P. and Chapman and Cutler may rely
as to matters of fact on certificates of officers and directors of the
Company and the Bank and certificates of public officials, and Chapman and
Cutler may also rely on the opinions of Silver, Freedman & Taff, L.L.P.,
except as to paragraph (xvii) hereof.
(c) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition, results of operations or business affairs of the Company, the Bank
and the Subsidiary considered as one enterprise, whether or not arising in the
ordinary course of business, and the Agent shall have received a certificate of
the President and Chief Executive Officer of the Company and of the Bank and the
24
<PAGE>
chief financial or chief accounting officer of the Company and of the Bank,
dated as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) there shall have been no material transaction entered into
by the Company or the Bank from the latest date as of which the financial
condition of the Company or the Bank is set forth in the Registration Statement
and the Prospectus other than transactions referred to or contemplated therein
and transactions in the ordinary cause of business, (iii) neither the Company
nor the Bank shall have received from the OTS any direction (oral or written) to
make any material change in the method of conducting its business with which it
has not complied (which direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect the business, financial
condition or results of operations of the Company or the Bank, (iv) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(v) the Company and the Bank have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to Closing
Time, (vi) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission and (vii) no order suspending the
Offerings or the authorization for final use of the Prospectus has been issued
and no proceedings for that purpose have been initiated or threatened by the OTS
and no person has sought to obtain regulatory or judicial review of the action
of the OTS in approving the Plan in accordance with the Conversion Regulations
or the OTS approval of the Holding Company Application.
(d) At the time of the execution of this Agreement, the Agent shall have
received from Crowe, Chizek and Company, LLP a letter dated such date, in form
and substance satisfactory to the Agent, to the effect that (i) they are
independent public accountants with respect to the Company, the Bank and the
Subsidiary within the meaning of the Code of Ethics of the AICPA, the 1933 Act
and the 1933 Act Regulations and the Conversion Regulations; (ii) it is their
opinion that the consolidated financial statements and supporting schedules
included in the Registration Statement and covered by their opinion therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations; (iii) based upon
limited procedures set forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Bank and the Subsidiary included in
the Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement and the
Prospectus, (B) the unaudited amounts of net interest inc ome and net income set
forth under "Selected Financial Information" in the Prospectus were not
determined on a basis substantially consistent with that used in determining the
corresponding amounts in the audited financial statements included in the
Registration Statement, (C) as of the date of the most recent financial
statements available prior to the date of this Agreement, there has been any
increase in the consolidated long-term or short-term debt of the Bank and the
Subsidiary or any decrease in consolidated total assets, the allowance for loan
losses, total deposits or net worth of the Bank and the Subsidiary, in each case
as compared with the amounts shown in the April 30, 1997 balance sheet included
in the Registration Statement or, (D) during the period from April 30, 1997 to
the date of the most recent financial statements available prior to the date of
this Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in total interest income, net interest income, net
interest income after provision for loan losses, income before income tax
expense or net inco me of the Bank and the Subsidiary, except in all instances
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for increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (iv) in addition to the examination
referred to in their opinion and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company, the Bank and the
Subsidiary identified in such letter.
(e) At Closing Time, the Agent shall have received from Crowe, Chizek and
Company, LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (d)
of this Section, except that the specified date referred to shall be a date not
more than five days prior to Closing Time.
(f) At Closing Time, the Common Stock shall have been approved for listing
on the Nasdaq National Market upon notice of issuance.
(g) At Closing Time, the Agent shall have received a letter from FinPro,
dated as of the Closing Time, confirming its appraisal.
(h) At Closing Time, counsel for the Agent shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities and the Foundation Shares
as herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities and the Foundation
Shares as herein contemplated shall be satisfactory in form and substance to the
Agent and counsel for the Agent.
(i) At any time prior to Closing Time, (i) there shall not have occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which, in the judgment of the Agent, are so material and
adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
and (ii) trading generally on either the American Stock Exchange or the New York
Stock Exchange shall not have been suspended, and minimum or maximum prices for
trading shall not have been fixed, or maximum ranges for prices for securities
have been required, by either of said Exchanges or by order of the Commission or
any other governmental authority, and a banking moratorium shall not have been
declared by Federal authorities.
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Section 6. Indemnification. (a) The Company and the Bank, jointly and
severally, agree to indemnify and hold harmless the Agent, each person, if any,
who controls the Agent, within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and its respective partners, directors, officers and
employees as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the
Conversion (including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any action
taken by the Agent where acting as agent of the Company or the Bank or
otherwise as described in Section 2 hereof; provided, however, that this
indemnity agreement shall not apply to any loss, liability, claim, damage
or expense found in a final judgment by a court of competent jurisdiction
to have resulted primarily from the bad faith, willful misconduct or gross
negligence of the person seeking indemnification hereunder;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the Company or the Bank, which consent
shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing for or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any claim whatsoever described in clauses (i) or (ii) above,
to the extent that any such expense is not paid under (i), (ii) or (iii)
above; provided, however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of
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any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto) or
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading which was made in reliance upon and in
conformity with written information relating to the Agent furnished to the
Company or the Bank by the Agent expressly for use in the Registration
Statement (or any amendment or supplement thereto) or the Prospectus (or
any amendment or supplement thereto), which information the Company and the
Bank acknowledge is included only in the sections captioned "Market for
Common Stock," "The Conversion--Public Offering and Direct Community
Offering" and "The Conversion--Marketing Arrangements" of the Prospectus
("Agent's Information"). Notwithstanding the foregoing, the indemnification
provided for in this paragraph (a) shall not apply to the Bank in the event
that it is found in a final judgment by a court of competent jurisdiction
to constitute an impermissible covered transaction under Section 23A of the
Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company, the Bank,
their directors, each of the Company's officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, of a
material fact made in the Registration Statement (or any amendment or supplement
thereto) in the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with the Agent's Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Bank, the Company, its security holders or the Bank's or the Company's creditors
relating to or arising out of the engagement of the Agent pursuant to, or the
performance by the Agent of the services contemplated by, this Agreement, except
to the extent that any loss, claim, damage or liability is found in a final
judgment by a court of competent jurisdiction to have resulted primarily from
the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act or any of its partners, directors, officers and employees is requested
or required to appear as a witness or otherwise gives testimony in any action,
proceeding, investigation or inquiry brought by or on behalf of or against the
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Company, the Bank, the Agent or any of their respective affiliates or any
participant in the transactions contemplated hereby in which the Agent or such
person or agent is not named as a defendant, the Company and the Bank jointly
and severally agree to reimburse the Agent for all reasonable and necessary
out-of-pocket expenses incurred by it in connection with preparing or appearing
as a witness or otherwise giving testimony and to compensate the Agent in an
amount to be mutually agreed upon.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the Bank
and the Agent shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that the Agent is responsible for that portion represented by
the percentage that the maximum aggregate marketing fees appearing on the cover
page of the Prospectus bears to the maximum aggregate gross proceeds appearing
thereon and the Company and the Bank are jointly and severally responsible for
the balance or (ii) if, but only if, the allocation provided for in clause (i)
is for any reason held unenforceable, in such proportion as is appropriate to
reflect not only the relative benefits to the Company and the Bank on the one
hand and the Agent on the other, as reflected in clause (i), but also the
relative fault of the Company and the Bank on the one hand and the Agent on the
other, as well as any other relevant equitable considerations; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section, each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Agent, and each director of the Company and of the
Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company and the Bank. Notwithstanding anything to
the contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or the Bank submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Agent or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities.
Section 9. Termination of Agreement. (a) The Agent may terminate this
Agreement, by notice to the Company and the Bank, at any time at or prior to
Closing Time (i) if there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the financial condition, results of
29
<PAGE>
operations or business affairs of the Company or the Bank, or the Company, the
Bank and the Subsidiary considered as one enterprise, whether or not arising in
the ordinary course of business; (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, are so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities; (iii) or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal or New
York authorities; (iv) if any condition specified in Section 5 shall not have
been fulfilled when and as required to be fulfilled; (v) if there shall have
been such material adverse change in the condition or prospects of the Company
or the Bank or the prospective market for the Company's securities as in the
Agent's good faith opinion would make it inadvisable to proceed with the
offering, sale or delivery of the Securities; (vi) if in the Agent's good faith
opinion, the price for the Securities established by the Company is not
reasonable or equitable under then prevailing market conditions; or (vii) if the
Conversion is not consummated on or prior to ____________, 1997.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
Section 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 1001 Nineteenth Street North, 10th Floor,
Arlington, VA 22209, attention of Robert A. Kotecki, with a copy to Jonathan A.
Koff, Esq., Chapman and Cutler, 111 West Monroe Street, Chicago, IL 60603;
notices to the Company and the Bank shall be directed to either of them at First
Security Federal Savings Bank, 936 North Western Avenue, Chicago, IL 60622,
attention of Julian E. Kulas, President and Chief Executive Officer, with a copy
to Kip A. Weissman, Esq., Silver, Freedman & Taff, L.L.P., 1100 New York Avenue,
N.W., Washington, D.C. 20005.
Section 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
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Company and the Bank and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
Section 12. Entire Agreement; Amendment. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. No waiver, amendment or other modification of this Agreement
shall be effective unless in writing and signed by the parties hereto.
Section 13. Governing Law and Time. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Central time.
Section 14. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 15. Headings. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
FIRST SECURITYFED FINANCIAL, INC.
By:_____________________________________
Julian E. Kulas
President and Chief Executive Officer
FIRST SECURITY FEDERAL SAVING BANK
By:_____________________________________
Julian E. Kulas
President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By:______________________________
Robert A. Kotecki
Senior Vice President
Exhibit 2
First Security Federal Savings Bank
Chicago, Illinois
AMENDED PLAN OF CONVERSION
From Mutual to Stock Form of Organization
I. GENERAL
On June 23, 1997, the Board of Directors of First Security Federal
Savings Bank (the "Bank") adopted and on the same day the Board amended this a
Plan of Conversion whereby the Bank would convert from a mutual savings
institution to a stock savings institution. The Plan includes, as part of the
conversion, the concurrent formation of a holding company, to be named in the
future. The Plan provides that non-transferable subscription rights to purchase
Holding Company Conversion Stock will be offered first to Eligible Account
Holders of record as of the Eligibility Record Date, then to the Holding Company
and the Bank's Tax-Qualified Employee Plans, then to Supplemental Eligible
Account Holders of record as of the Supplemental Eligibility Record Date, then
to Other Members, and then to directors, officers and employees. Concurrently
with, at any time during, or promptly after the Subscription Offering, and on a
lowest priority basis, an opportunity to subscribe may also be offered to the
general public in a Direct Community Offering or a Public Offering. The price of
the Holding Company Conversion Stock will be based upon an independent appraisal
of the Bank and will reflect its estimated pro forma market value, as converted.
It is the desire of the Board of Directors of the Bank to attract new capital to
the Bank in order to increase its capital, support future savings growth and
increase the amount of funds available for residential and other mortgage
lending. The Converted Bank is also expected to benefit from its management and
other personnel having a stock ownership in its business, since stock ownership
is viewed as an effective performance incentive and a means of attracting,
retaining and compensating management and other personnel. No change will be
made in the Board of Directors or management as a result of the Conversion.
In furtherance of the Bank's long term commitment to its community, the
Plan provides that, in connection with the Conversion, the Holding Company will
make a donation to The Heritage Foundation of First Security Federal Savings
Bank, Inc., a charitable foundation originally established by the Bank, of
250,000 shares of its stock. Under the terms of the Plan, this donation will be
subject to the approval of the voting members of the Bank. In the event that the
donation is not approved, the Bank may determine to complete the Conversion
without the donation.
II. DEFINITIONS
Acting in Concert: The term "acting in concert" shall have the same
meaning given it in '574.2(c) of the Rules and Regulations of the OTS.
Actual Subscription Price: The price per share, determined as provided
in Section V of the Plan, at which Holding Company Conversion Stock will be sold
in the Subscription Offering.
Affiliate: An "affiliate" of, or a Person "affiliated" with, a specified
Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.
Associate: The term "associate," when used to indicate a relationship
with any Person, means (i) any corporation or organization (other than the
Holding Company, the Bank or a majority-owned subsidiary
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of the Holding Company) of which such Person is an officer or partner or is,
directly or indirectly, the beneficial owner of ten percent or more of any class
of equity securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person or
who is a director or officer of the Holding Company or the Bank or any
subsidiary of the Holding Company; provided, however, that any Tax-Qualified or
Non-Tax-Qualified Employee Plan shall not be deemed to be an associate of any
director or officer of the Holding Company or the Bank, to the extent provided
in Section V hereof.
Bank: First Security Federal Savings Bank or such other name as the
institution may adopt.
Conversion: Change of the Bank's charter and bylaws to federal stock
charter and bylaws; sale by the Holding Company of Holding Company Conversion
Stock; and issuance and sale by the Converted Bank of Converted Bank Common
Stock to the Holding Company, all as provided for in the Plan.
Converted Bank: The federally chartered stock savings institution
resulting from the Conversion of the Bank in accordance with the Plan.
Deposit Account: Any withdrawable or repurchasable account or deposit
in the Bank including Savings Accounts and demand accounts.
Direct Community Offering: The offering to the general public of any
unsubscribed shares which may be effected as provided in Section V hereof.
Eligibility Record Date: The close of business on December 31, 1995.
Eligible Account Holder: Any Person holding a Qualifying Deposit in the
Bank on the Eligibility Record Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Foundation: The Heritage Foundation of First Security Federal Savings
Bank.
Holding Company: A corporation which upon completion of the Conversion
will own all of the outstanding common stock of the Converted Bank, and the
name of which will be selected in the future.
Holding Company Conversion Stock: Shares of common stock, par value
$.01 per share, to be issued and sold by the Holding Company as a part of the
Conversion; provided, however, that for purposes of calculating Subscription
Rights and maximum purchase limitations under the Plan, references to the number
of shares of Holding Company Conversion Stock shall refer to the number of
shares offered in the Subscription Offering.
Local Community: The geographic area encompassing Cook County, Illinois
and Philadelphia County, Pennsylvania.
Market Maker: A dealer (i.e., any Person who engages directly or
indirectly as agent, broker or principal in the business of offering, buying,
selling, or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide,
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competitive bid and offer quotations in a recognized inter-dealer quotation
system; or (ii) furnishes bona fide competitive bid and offer quotations on
request; and (iii) is ready, willing, and able to effect transactions in
reasonable quantities at his quoted prices with other brokers or dealers.
Maximum Subscription Price: The price per share of Holding Company
Conversion Stock to be paid initially by subscribers in the Subscription
Offering.
Member: Any Person or entity that qualifies as a member of the Bank
pursuant to its charter and bylaws.
Non-Tax-Qualified Employee Plan: Any defined benefit plan or defined
contribution plan of the Bank or the Holding Company, such as an employee stock
ownership plan, stock bonus plan, profit-sharing plan or other plan, which with
its related trust does not meet the requirements to be "qualified" under Section
401 of the Internal Revenue Code.
OTS: Office of Thrift Supervision, Department of the Treasury, and its
successors.
Officer: An executive officer of the Holding Company or the Bank, including
the Chairman of the Board, President, Executive Vice Presidents, Senior Vice
Presidents in charge of principal business functions, Secretary and Treasurer.
Order Forms: Forms to be used in the Subscription Offering to exercise
Subscription Rights.
Other Members: Members of the Bank, other than Eligible Account
Holders, Tax-Qualified Employee Plans or Supplemental Eligible Account Holders,
as of the Voting Record Date.
Person: An individual, a corporation, a partnership, an association, a
joint-stock company, a trust, any unincorporated organization, or a government
or political subdivision thereof.
Plan: This Plan of Conversion of the Bank, including any amendment
approved as provided in this Plan.
Public Offering: The offering for sale through the Underwriters to
selected members of the general public of any shares of Holding Company
Conversion Stock not subscribed for in the Subscription Offering or the Direct
Community Offering, if any.
Public Offering Price: The price per share at which any unsubscribed
shares of Holding Company Conversion Stock are initially offered for sale in the
Public Offering.
Qualifying Deposit: The aggregate balance of $50 or more of each
Deposit Account of an Eligible Account Holder as of the Eligibility Record Date
or of a Supplemental Eligible Account Holder as of the Supplemental Eligibility
Record Date.
SAIF: Savings Association Insurance Fund.
Savings Account: The term "Savings Account" means any withdrawable
account in the Bank except a demand account.
SEC: Securities and Exchange Commission.
Special Meeting: The Special Meeting of Members called for the purpose
of considering and voting upon the Plan of Conversion.
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Subscription Offering: The offering of shares of Holding Company
Conversion Stock for subscription and purchase pursuant to Section V of the
Plan.
Subscription Rights: Non-transferable, non-negotiable, personal rights
of the Bank's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members, and directors, Officers
and employees to subscribe for shares of Holding Company Conversion Stock in the
Subscription Offering.
Supplemental Eligibility Record Date: The last day of the calendar
quarter preceding approval of the Plan by the OTS.
Supplemental Eligible Account Holder: Any person holding a Qualifying
Deposit in the Bank (other than an officer or director and their associates) on
the Supplemental Eligibility Record Date.
Tax-Qualified Employee Plans: Any defined benefit plan or defined
contribution plan of the Bank or the Holding Company, such as an employee stock
ownership plan, stock bonus plan, profit-sharing plan or other plan, which with
its related trust meets the requirements to be "qualified" under Section 401 of
the Internal Revenue Code.
Underwriters: The investment banking firm or firms agreeing to offer
and sell Holding Company Conversion Stock in the Public Offering.
Voting Record Date: The date set by the Board of Directors in accordance
with federal regulations for determining Members eligible to vote at the Special
Meeting.
III. STEPS PRIOR TO SUBMISSION OF PLAN OF CONVERSION TO THE MEMBERS FOR
APPROVAL
Prior to submission of the Plan of Conversion to its Members for
approval, the Bank must receive from the OTS approval of the Application for
Approval of Conversion to convert to the federal stock form of organization. The
following steps must be taken prior to such regulatory approval:
A. The Board of Directors shall adopt the Plan by not less than a two-thirds
vote.
B. The Bank shall notify its Members of the adoption of the Plan by publishing
a statement in a newspaper having a general circulation in each community
in which the Bank maintains an office.
C. Copies of the Plan adopted by the Board of Directors shall be made
available for inspection at each office of the Bank.
D. The Bank will promptly cause an Application for Approval of Conversion on
Form AC to be prepared and filed with the OTS, an Application on Form
H-(e)1 (or other applicable form) to be prepared and filed with the OTS and
a Registration Statement on Form S-1 to be prepared and filed with the SEC.
E. Upon receipt of notice from the OTS to do so, the Bank shall notify its
Members that it has filed the Application for Approval of Conversion by
posting notice in each of its offices and by publishing notice in a
newspaper having general circulation in each community in which the Bank
maintains an office.
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IV. CONVERSION PROCEDURE
Following approval of the application by the OTS, the Plan will be
submitted to a vote of the Members at the Special Meeting. If the Plan is
approved by Members holding a majority of the total number of votes entitled to
be cast at the Special Meeting, the Bank will take all other necessary steps
pursuant to applicable laws and regulations to convert to a federal stock
savings institution as part of a concurrent holding company formation pursuant
to the terms of the Plan.
The Holding Company Conversion Stock will be offered for sale in the
Subscription Offering at the Maximum Subscription Price to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members and directors, Officers and employees of the Bank, prior to or
within 45 days after the date of the Special Meeting. The Bank may, either
concurrently with, at any time during, or promptly after the Subscription
Offering, also offer the Holding Company Conversion Stock to and accept
subscriptions from other Persons in a Direct Community Offering or a Public
Offering; provided that the Bank's Eligible Account Holders, Tax-Qualified
Employee Plans, Supplemental Eligible Account Holders, Other Members and
directors, Officers and employees shall have the priority rights to subscribe
for Holding Company Conversion Stock set forth in Section V of this Plan.
However, the Holding Company and the Bank may delay commencing the Subscription
Offering beyond such 45-day period in the event there exist unforeseen material
adverse market or financial conditions. If the Subscription Offering commences
prior to the Special Meeting, subscriptions will be accepted subject to the
approval of the Plan at the Special Meeting.
The period for the Subscription Offering and Direct Community Offering
will be not less than 20 days nor more than 45 days unless extended by the Bank.
Upon completion of the Subscription Offering and the Direct Community Offering,
if any, any unsubscribed shares of Holding Company Conversion Stock may be sold
through the Underwriters to selected members of the general public in the Public
Offering. If for any reason all of the shares are not sold in the Subscription
Offering, the Direct Community Offering, if any, and the Public Offering, if
any, the Holding Company and the Bank will use their best efforts to obtain
other purchasers, subject to OTS approval. Completion of the sale of all shares
of Holding Company Conversion Stock not sold in the Subscription Offering is
required within 45 days after termination of the Subscription Offering, subject
to extension of such 45-day period by the Holding Company and the Bank with the
approval of the OTS. The Holding Company and the Bank may jointly seek one or
more extensions of such 45-day period if necessary to complete the sale of all
shares of Holding Company Conversion Stock. In connection with such extensions,
subscribers and other purchasers will be permitted to increase, decrease or
rescind their subscriptions or purchase orders to the extent required by the OTS
in approving the extensions. Completion of the sale of all shares of Holding
Company Conversion Stock is required within 24 months after the date of the
Special Meeting.
V. STOCK OFFERING
A. Total Number of Shares and Purchase Price of Conversion Stock
The total number of shares of Holding Company Conversion
Stock to be issued in the Conversion will be determined jointly
by the Boards of Directors of the Holding Company and the Bank
prior to the commencement of the Subscription Offering, subject
to adjustment if necessitated by market or financial conditions
prior to consummation of the Conversion. The total number of
shares of Holding Company Conversion Stock shall also be subject
to increase in connection with any oversubscriptions in the
Subscription Offering or Direct Community Offering.
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The aggregate price for which all shares of Holding Company
Conversion Stock will be issued will be based on an independent
appraisal of the estimated total pro forma market value of the
Holding Company and the Converted Bank. Such appraisal shall be
performed in accordance with OTS guidelines and will be updated
as appropriate under or required by applicable regulations.
The appraisal will be made by an independent investment
banking or financial consulting firm experienced in the area of
thrift institution appraisals. The appraisal will include, among
other things, an analysis of the historical and pro forma
operating results and net worth of the Converted Bank and a
comparison of the Holding Company, the Converted Bank and the
Conversion Stock with comparable thrift institutions and holding
companies and their respective outstanding capital stocks.
Based upon the independent appraisal, the Boards of
Directors of the Holding Company and the Bank will jointly fix
the Maximum Subscription Price.
If, following completion of the Subscription Offering and
Direct Community Offering, if any, a Public Offering is effected,
the Actual Subscription Price for each share of Holding Company
Conversion Stock will be the same as the Public Offering Price at
which unsubscribed shares of Holding Company Conversion Stock are
initially offered for sale by the Underwriters in the Public
Offering.
If, upon completion of the Subscription Offering, Public
Offering, if any, and Direct Community Offering, if any, all of
the Holding Company Conversion Stock is subscribed for or only a
limited number of shares remain unsubscribed for, subject to Part
VII hereof, the Actual Subscription Price for each share of
Holding Company Conversion Stock will be determined by dividing
the estimated appraised aggregate pro forma market value of the
Holding Company and the Converted Bank, based on the independent
appraisal as updated upon completion of the Subscription Offering
or other sale of all of the Holding Company Conversion Stock, by
the total number of shares of Holding Company Conversion Stock to
be issued by the Holding Company upon Conversion. Such appraisal
will then be expressed in terms of a specific aggregate dollar
amount rather than as a range.
B. Subscription Rights
Non-transferable Subscription Rights to purchase shares
will be issued without payment therefor to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible
Account Holders, Other Members and directors, Officers and
employees of the Bank as set forth below.
1. Preference Category No. 1: Eligible Account Holders
Each Eligible Account Holder shall receive
non-transferable Subscription Rights to subscribe for
shares of Holding Company Conversion Stock in an amount
equal to the greater of $250,000, or one-tenth of one
percent (.10%) of the total offering of shares, or 15 times
the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of
common stock to be issued by a fraction of which the
numerator is the amount of the qualifying deposit of the
Eligible Account Holder and the
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denominator is the total amount of qualifying deposits of
all Eligible Account Holders in the converting Bank in each
case on the Eligibility Record Date.
If sufficient shares are not available, shares shall
be allocated first to permit each subscribing Eligible
Account Holder to purchase to the extent possible 100
shares, and thereafter among each subscribing Eligible
Account Holder pro rata in the same proportion that his
Qualifying Deposit bears to the total Qualifying Deposits of
all subscribing Eligible Account Holders whose subscriptions
remain unsatisfied.
Non-transferable Subscription Rights to purchase
Holding Company Conversion Stock received by directors and
Officers of the Bank and their Associates, based on their
increased deposits in the Bank in the one-year period
preceding the Eligibility Record Date, shall be subordinated
to all other subscriptions involving the exercise of
non-transferable Subscription Rights of Eligible Account
Holders.
2. Preference Category No. 2: Tax-Qualified Employee Plans
Each Tax-Qualified Employee Plan shall be entitled to
receive non-transferable Subscription Rights to purchase up
to 10% of the shares of Holding Company Conversion Stock,
provided that singly or in the aggregate such plans (other
than that portion of such plans which is self-directed)
shall not purchase more than 10% of the shares of the
Holding Company Conversion Stock. Subscription Rights
received pursuant to this Category shall be subordinated to
all rights received by Eligible Account Holders to purchase
shares pursuant to Category No. 1; provided, however, that
notwithstanding any other provision of this Plan to the
contrary, the Tax-Qualified Employee Plans shall have a
first priority Subscription Right to the extent that the
total number of shares of Holding Company Conversion Stock
sold in the Conversion exceeds the maximum of the appraisal
range as set forth in the subscription prospectus.
3. Preference Category No. 3: Supplemental Eligible Account
Holders
Each Supplemental Eligible Account Holder shall
receive non-transferable Subscription Rights to subscribe
for shares of Holding Company Conversion Stock in an amount
equal to the greater of $250,000, or one-tenth of one
percent (.10%) of the total offering of shares, or 15 times
the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of
common stock to be issued by a fraction of which the
numerator is the amount of the qualifying deposit of the
Supplemental Eligible Account Holder and the denominator is
the total amount of qualifying deposits of all Supplemental
Eligible Account Holders in the converting Bank in each
case on the Supplemental Eligibility Record Date.
Subscription Rights received pursuant to this
category shall be subordinated to all Subscription Rights
received by Eligible Account Holders and Tax-Qualified
Employee Plans pursuant to Category Nos. 1 and 2 above.
Any non-transferable Subscription Rights to purchase
shares received by an Eligible Account Holder in accordance
with Category No. 1 shall reduce to the extent thereof the
Subscription Rights to be distributed to such person
pursuant to this Category.
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In the event of an oversubscription for shares under
the provisions of this subparagraph, the shares available
shall be allocated first to permit each subscribing
Supplemental Eligible Account Holder, to the extent
possible, to purchase a number of shares sufficient to make
his total allocation (including the number of shares, if
any, allocated in accordance with Category No. 1) equal to
100 shares, and thereafter among each subscribing
Supplemental Eligible Account Holder pro rata in the same
proportion that his Qualifying Deposit bears to the total
Qualifying Deposits of all subscribing Supplemental
Eligible Account Holders whose subscriptions remain
unsatisfied.
4. Preference Category No. 4: Other Members
Each Other Member shall receive non-transferable
Subscription Rights to subscribe for shares of Holding
Company Conversion Stock remaining after satisfying the
subscriptions provided for under Category Nos. 1 through 3
above, subject to the following conditions:
a. Each Other Member shall be entitled to subscribe for an
amount of shares equal to the greater of $250,000, or
one-tenth of one percent (.10%) of the total offering
of shares of common stock in the Conversion, to the
extent that Holding Company Conversion Stock is
available.
b. In the event of an oversubscription for shares under
the provisions of this subparagraph, the shares
available shall be allocated among the subscribing
Other Members pro rata in the same proportion that his
number of votes on the Voting Record Date bears to the
total number of votes on the Voting Record Date of all
subscribing Other Members on such date. Such number of
votes shall be determined based on the Bank's mutual
charter and bylaws in effect on the date of approval by
members of this Plan of Conversion.
5. Preference Category No. 5: Directors, Officers and Employees
Each director, Officer and employee of the Bank as of
the date of the commencement of the Subscription Offering
shall be entitled to receive non-transferable Subscription
Rights to purchase shares of the Holding Company Conversion
Stock to the extent that shares are available after
satisfying subscriptions under Category Nos. 1 through 4
above. The shares which may be purchased under this Category
are subject to the following conditions:
a. The total number of shares which may be purchased under
this Category may not exceed 20% of the number of
shares of Holding Company Conversion Stock.
b. The maximum amount of shares which may be purchased
under this Category by any Person is $250,000 of
Holding Company Conversion Stock. In the event of an
oversubscription for shares under the provisions of
this subparagraph, the shares available shall be
allocated pro rata among all subscribers in this
Category.
C. Public Offering and Direct Community Offering
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1. Any shares of Holding Company Conversion Stock not
subscribed for in the Subscription Offering may be offered
for sale in a Direct Community Offering. This may involve
an offering of all unsubscribed shares directly to the
general public with a preference to those natural persons
residing in the Local Community. The Direct Community
Offering, if any, shall be for a period of not less than 20
days nor more than 45 days unless extended by the Holding
Company and the Bank, and shall commence concurrently with,
during or promptly after the Subscription Offering. The
purchase price per share to the general public in a Direct
Community Offering shall be the same as the Actual
Subscription Price. The Holding Company and the Bank may
use an investment banking firm or firms on a best efforts
basis to sell the unsubscribed shares in the Subscription
and Direct Community Offering. The Holding Company and the
Bank may pay a commission or other fee to such investment
banking firm or firms as to the shares sold by such firm or
firms in the Subscription and Direct Community Offering and
may also reimburse such firm or firms for expenses incurred
in connection with the sale. The Holding Company Conversion
Stock will be offered and sold in the Direct Community
Offering, if any, in accordance with OTS regulations, so as
to achieve the widest distribution of the Holding Company
Conversion Stock. No person, by himself or herself, or with
an Associate or group of Persons acting in concert, may
subscribe for or purchase more than $250,000 of Holding
Company Conversion Stock in the Direct Community Offering,
if any. Further, the Bank may limit total subscriptions
under this Section V.C.1 so as to assure that the number of
shares available for the Public Offering may be up to a
specified percentage of the number of shares of Holding
Company Conversion Stock. Finally, the Bank may reserve
shares offered in the Direct Community Offering for sales
to institutional investors.
In the event of an oversubscription for shares in the
Community Offering, shares may be allocated (to the extent
shares remain available) first to cover any reservation of
shares for a public offering or institutional orders, next
to cover orders of natural persons residing in the Local
Community, then to cover the orders of any other person
subscribing for shares in the Community Offering so that
each such person may receive 1,000 shares, and thereafter,
on a pro rata basis to such persons based on the amount of
their respective subscriptions.
The Bank and the Holding Company, in their sole discretion,
may reject subscriptions, in whole or in part, received from
any Person under this Section V.C. Further, the Bank and the
Holding Company may, at their sole discretion, elect to
forego a Direct Community Offering and instead effect a
Public Offering as described below.
2. Any shares of Holding Company Conversion Stock not sold in
the Subscription Offering or in the Direct Community
Offering, if any, may then be sold through the Underwriters
to selected members of the general public in the Public
Offering. It is expected that the Public Offering will
commence as soon as practicable after termination of the
Subscription Offering and the Direct Community Offering, if
any. The Bank and the Holding Company, in their sole
discretion, may reject any subscription, in whole or in
part, received in the Public Offering. The Public Offering
shall be completed within 45 days after the termination of
the Subscription Offering, unless such period is extended as
provided in Section IV hereof. No person, by himself or
herself, or with an Associate or group of Persons acting in
concert, may purchase more than $250,000 in the Public
Offering, if any.
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3. If for any reason any shares remain unsold after the
Subscription Offering, the Public Offering, if any, and the
Direct Community Offering, if any, the Boards of Directors
of the Holding Company and the Bank will seek to make other
arrangements for the sale of the remaining shares. Such
other arrangements will be subject to the approval of the
OTS and to compliance with applicable securities laws.
D. Additional Limitations Upon Purchases of Shares of Holding Company
Conversion Stock
The following additional limitations shall be imposed on all
purchases of Holding Company Conversion Stock in the Conversion:
1. No Person, by himself or herself, or with an Associate or
group of Persons acting in concert, may subscribe for or
purchase in the Conversion a number of shares of Holding
Company Conversion Stock which exceeds an amount of shares
equal to $750,000. For purposes of this paragraph, an
Associate of a Person does not include a Tax-Qualified or
Non-Tax Qualified Employee Plan in which the person has a
substantial beneficial interest or serves as a trustee or in
a similar fiduciary capacity. Moreover, for purposes of this
paragraph, shares held by one or more Tax-Qualified or
Non-Tax Qualified Employee Plans attributed to a Person
shall not be aggregated with shares purchased directly by or
otherwise attributable to that Person.
2. Directors and Officers and their Associates may not purchase
in all categories in the Conversion an aggregate of more
than 30% of the Holding Company Conversion Stock. For
purposes of this paragraph, an Associate of a Person does
not include any Tax-Qualified Employee Plan. Moreover, any
shares attributable to the Officers and directors and their
Associates, but held by one or more Tax-Qualified Employee
Plans shall not be included in calculating the number of
shares which may be purchased under the limitation in this
paragraph.
3. The minimum number of shares of Holding Company Conversion
Stock that may be purchased by any Person in the Conversion
is 25 shares, provided sufficient shares are available.
4. The Boards of Directors of the Holding Company and the Bank
may, in their sole discretion, increase the maximum purchase
limitation referred to in subparagraph 1. herein up to
9.99%, provided that orders for shares exceeding 5% of the
shares being offered in the Conversion shall not exceed, in
the aggregate, 10% of the shares being offered in the
Conversion. Requests to purchase additional shares of
Holding Company Conversion Stock under this provision will
be allocated by the Boards of Directors on a pro rata basis
giving priority in accordance with the priority rights set
forth in this Section V.
Depending upon market and financial conditions, the Boards
of Directors of the Holding Company and the Bank, with the
approval of the OTS and without further approval of the Members,
may increase or decrease any of the above purchase limitations.
For purposes of this Section V, the directors of the Holding
Company and the Bank shall not be deemed to be Associates or a
group acting in concert solely as a result of their serving in
such capacities.
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Each Person purchasing Conversion Stock in the Conversion
shall be deemed to confirm that such purchase does not conflict
with the above purchase limitations.
E. Restrictions and Other Characteristics of Holding Company
Conversion Stock Being Sold
1. Transferability. Holding Company Conversion Stock purchased
by Persons other than directors and Officers of the Holding
Company or the Bank will be transferable without
restriction. Shares purchased by directors or Officers shall
not be sold or otherwise disposed of for value for a period
of one year from the date of Conversion, except for any
disposition of such shares (i) following the death of the
original purchaser, or (ii) resulting from an exchange of
securities in a merger or acquisition approved by the
applicable regulatory authorities. Any transfers that could
result in a change of control of the Bank or the Holding
Company or result in the ownership by any Person or group
acting in concert of more than 10% of any class of the
Bank's or the Holding Company's equity securities are
subject to the prior approval of the OTS.
The certificates representing shares of Holding Company
Conversion Stock issued to directors and Officers shall bear
a legend giving appropriate notice of the one-year holding
period restriction. Appropriate instructions shall be given
to the transfer agent for such stock with respect to the
applicable restrictions relating to the transfer of
restricted stock. Any shares of common stock of the Holding
Company subsequently issued as a stock dividend, stock
split, or otherwise, with respect to any such restricted
stock, shall be subject to the same holding period
restrictions for Holding Company or Bank directors and
Officers as may be then applicable to such restricted stock.
No director or Officer of the Holding Company or of the
Bank, or Associate of such a director or Officer, shall
purchase any outstanding shares of capital stock of the
Holding Company for a period of three years following the
Conversion without the prior written approval of the OTS,
except through a broker or dealer registered with the SEC or
in a "negotiated transaction" involving more than one
percent of the then-outstanding shares of common stock of
the Holding Company. As used herein, the term "negotiated
transaction" means a transaction in which the securities are
offered and the terms and arrangements relating to any sale
are arrived at through direct communications between the
seller or any Person acting on its behalf and the purchaser
or his investment representative. The term "investment
representative" shall mean a professional investment advisor
acting as agent for the purchaser and independent of the
seller and not acting on behalf of the seller in connection
with the transaction.
2. Repurchase and Dividend Rights. Except as permitted by
applicable regulations, for a period of three years
following Conversion, the Converted Bank shall not
repurchase any shares of its capital stock, except in the
case of an offer to repurchase on a pro rata basis made to
all holders of capital stock of the Converted Bank. A
repurchase of qualifying shares of a director shall not be
deemed to be a repurchase for purposes of this Section
V.E.2.
Present regulations also provide that the Converted Bank may
not declare or pay a cash dividend on or repurchase any of
its stock (i) if the result thereof would be to reduce the
regulatory capital of the Converted Bank below the amount
required for the liquidation
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account to be established pursuant to Section XIII hereof,
and (ii) except in compliance with requirements of Section
563.134 of the Rules and Regulations of the OTS.
The above limitations are subject to Section 563b.3 (g)(3)
of the Rules and Regulations of the OTS, which generally
provides that the Converted Bank may repurchase its capital
stock provided (i) no repurchases occur within one year
following conversion, (ii) repurchases during the second and
third year after conversion are part of an open market stock
repurchase program that does not allow for a repurchase of
more than 5% of the Bank's outstanding capital stock during
a twelve-month period without OTS approval, (iii) the
repurchases do not cause the Bank to become
undercapitalized, and (iv) the Bank provides notice to the
OTS at least 10 days prior to the commencement of a
repurchase program and the OTS does not object. In addition,
the above limitations shall not preclude payments of
dividends or repurchases of capital stock by the Converted
Bank in the event applicable federal regulatory limitations
are liberalized or waived subsequent to regulatory approval
of the Plan.
3. Voting Rights. After Conversion, holders of deposit accounts
will not have voting rights in the Bank or the Holding
Company. Exclusive voting rights as to the Bank will be
vested in the Holding Company, as the sole stockholder of
the Bank. Voting rights as to the Holding Company will be
held exclusively by its stockholders.
F. Exercise of Subscription Rights; Order Forms
1. If the Subscription Offering occurs concurrently with the
solicitation of proxies for the Special Meeting, the
subscription prospectus and Order Form may be sent to each
Eligible Account Holder, Tax-Qualified Employee Plan,
Supplemental Eligible Account Holder, Other Member, and
director, Officer and employee at their last known address
as shown on the records of the Bank. However, the Bank may,
and if the Subscription Offering commences after the Special
Meeting the Bank shall, furnish a subscription prospectus
and Order Form only to Eligible Account Holders,
Tax-Qualified Employee Plans, Supplemental Eligible Account
Holders, Other Members, and directors, Officers and
employees who have returned to the Bank by a specified date
prior to the commencement of the Subscription Offering a
post card or other written communication requesting a
subscription prospectus and Order Form. In such event, the
Bank shall provide a postage-paid post card for this purpose
and make appropriate disclosure in its proxy statement for
the solicitation of proxies to be voted at the Special
Meeting and/or letter sent in lieu of the proxy statement to
those Eligible Account Holders, Tax-Qualified Employee Plans
or Supplemental Eligible Account Holders who are not Members
on the Voting Record Date.
2. Each Order Form will be preceded or accompanied by a
subscription prospectus describing the Holding Company and
the Converted Bank and the shares of Holding Company
Conversion Stock being offered for subscription and
containing all other information required by the OTS or the
SEC or necessary to enable Persons to make informed
investment decisions regarding the purchase of Holding
Company Conversion Stock.
3. The Order Forms (or accompanying instructions) used for the
Subscription Offering will contain, among other things, the
following:
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(i) A clear and intelligible explanation of the
Subscription Rights granted under the Plan to Eligible
Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members,
and directors, Officers and employees;
(ii) A specified expiration date by which Order Forms must
be returned to and actually received by the Bank or its
representative for purposes of exercising Subscription
Rights, which date will be not less than 20 days after
the Order Forms are mailed by the Bank;
(iii) The Maximum Subscription Price to be paid for each
share subscribed for when the Order Form is returned;
(iv) A statement that 25 shares is the minimum number of
shares of Holding Company Conversion Stock that may be
subscribed for under the Plan;
(v) A specifically designated blank space for indicating
the number of shares being subscribed for;
(vi) A set of detailed instructions as to how to complete
the Order Form including a statement as to the
available alternative methods of payment for the shares
being subscribed for;
(vii) Specifically designated blank spaces for dating and
signing the Order Form;
(viii) An acknowledgement that the subscriber has received
the subscription prospectus;
(ix) A statement of the consequences of failing to properly
complete and return the Order Form, including a
statement that the Subscription Rights will expire on
the expiration date specified on the Order Form unless
such expiration date is extended by the Holding Company
and the Bank, and that the Subscription Rights may be
exercised only by delivering the Order Form, properly
completed and executed, to the Bank or its
representative by the expiration date, together with
required payment of the Maximum Subscription Price for
all shares of Holding Company Conversion Stock
subscribed for;
(x) A statement that the Subscription Rights are
non-transferable and that all shares of Holding Company
Conversion Stock subscribed for upon exercise of
Subscription Rights must be purchased on behalf of the
Person exercising the Subscription Rights for his own
account; and
(xi) A statement that, after receipt by the Bank or its
representative, a subscription may not be modified,
withdrawn or canceled without the consent of the Bank.
G. Method of Payment
Payment for all shares of Holding Company Conversion Stock
subscribed for, computed on the basis of the Maximum Subscription
Price, must accompany all completed Order Forms. Payment may be
made in cash (if presented in Person), by check, or, if the
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subscriber has a Deposit Account in the Bank (including a
certificate of deposit), the subscriber may authorize the Bank to
charge the subscriber's account.
If a subscriber authorizes the Bank to charge his or her
account, the funds will continue to earn interest, but may not be
used by the subscriber until all Holding Company Conversion Stock
has been sold or the Plan of Conversion is terminated, whichever
is earlier. The Bank will allow subscribers to purchase shares by
withdrawing funds from certificate accounts without the
assessment of early withdrawal penalties with the exception of
prepaid interest in the form of promotional gifts. In the case of
early withdrawal of only a portion of such account, the
certificate evidencing such account shall be canceled if the
remaining balance of the account is less than the applicable
minimum balance requirement, in which event the remaining balance
will earn interest at the passbook rate. This waiver of the early
withdrawal penalty is applicable only to withdrawals made in
connection with the purchase of Holding Company Conversion Stock
under the Plan of Conversion. Interest will also be paid, at not
less than the then-current passbook rate, on all orders paid in
cash, by check or money order, from the date payment is received
until consummation of the Conversion. Payments made in cash, by
check or money order will be placed by the Bank in an escrow or
other account established specifically for this purpose.
In the event of an unfilled amount of any subscription
order, the Converted Bank will make an appropriate refund or
cancel an appropriate portion of the related withdrawal
authorization, after consummation of the Conversion, including
any difference between the Maximum Subscription Price and the
Actual Subscription Price (unless subscribers are afforded the
right to apply such difference to the purchase of additional
whole shares). If for any reason the Conversion is not
consummated, purchasers will have refunded to them all payments
made and all withdrawal authorizations will be canceled in the
case of subscription payments authorized from accounts at the
Bank.
If any Tax-Qualified Employee Plans or Non-Tax-Qualified
Employee Plans subscribe for shares during the Subscription
Offering, such plans will not be required to pay for the shares
subscribed for at the time they subscribe, but may pay for such
shares of Holding Company Conversion Stock subscribed for upon
consummation of the Conversion. In the event that, after the
completion of the Subscription Offering, the amount of shares to
be issued is increased above the maximum of the appraisal range
included in the Prospectus, the Tax Qualified and Non-Tax
Qualified Employee Plans shall be entitled to increase their
subscriptions by a percentage equal to the percentage increase in
the amount of shares to be issued above the maximum of the
appraisal range provided that such subscriptions shall continue
to be subject to applicable purchase limits and stock allocation
procedures.
H. Undelivered, Defective or Late Order Forms; Insufficient Payment
The Boards of Directors of the Holding Company and the Bank
shall have the absolute right, in their sole discretion, to
reject any Order Form, including but not limited to, any Order
Forms which (i) are not delivered or are returned by the United
States Postal Service (or the addressee cannot be located); (ii)
are not received back by the Bank or its representative, or are
received after the termination date specified thereon; (iii) are
defectively completed or executed; (iv) are not accompanied by
the total required payment for the shares of Holding Company
Conversion Stock subscribed for (including cases in which the
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subscribers' Deposit Accounts or certificate accounts are
insufficient to cover the authorized withdrawal for the required
payment); or (v) are submitted by or on behalf of a Person whose
representations the Boards of Directors of the Holding Company
and the Bank believe to be false or who they otherwise believe,
either alone or acting in concert with others, is violating,
evading or circumventing, or intends to violate, evade or
circumvent, the terms and conditions of this Plan. In such event,
the Subscription Rights of the Person to whom such rights have
been granted will not be honored and will be treated as though
such Person failed to return the completed Order Form within the
time period specified therein. The Bank may, but will not be
required to, waive any irregularity relating to any Order Form or
require submission of corrected Order Forms or the remittance of
full payment for subscribed shares by such date as the Bank may
specify. The interpretation of the Holding Company and the Bank
of the terms and conditions of this Plan and of the proper
completion of the Order Form will be final, subject to the
authority of the OTS.
I. Member in Non-Qualified States or in Foreign Countries
The Holding Company and the Bank will make reasonable
efforts to comply with the securities laws of all states in the
United States in which Persons entitled to subscribe for Holding
Company Conversion Stock pursuant to the Plan reside. However, no
shares will be offered or sold under the Plan of Conversion to
any such Person who (1) resides in a foreign country or (2)
resides in a state of the United States in which a small number
of Persons otherwise eligible to subscribe for shares under the
Plan of Conversion reside or as to which the Holding Company and
the Bank determine that compliance with the securities laws of
such state would be impracticable for reasons of cost or
otherwise, including, but not limited to, a requirement that the
Holding Company or the Bank or any of their officers, directors
or employees register, under the securities laws of such state,
as a broker, dealer, salesman or agent. No payments will be made
in lieu of the granting of Subscription Rights to any such
Person.
VI. FEDERAL STOCK CHARTER AND BYLAWS
A. As part of the Conversion, the Bank will take all appropriate
steps to amend its charter to read in the form of federal stock
savings institution charter as prescribed by the OTS. The name of
the Bank, as converted, will be "First Security Federal Savings
Bank." A copy of the proposed stock charter is available upon
request. By their approval of the Plan, the Members of the Bank
will thereby approve and adopt such charter.
B. The Bank will also take appropriate steps to amend its bylaws to
read in the form prescribed by the OTS for a federal stock
savings institution. A copy of the proposed federal stock bylaws
is available upon request.
C. The effective date of the adoption of the Bank's federal stock
charter and bylaws shall be the date of the issuance and sale of
the Holding Company Conversion Stock as specified by the OTS.
VII. ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION
As part of the Conversion, and notwithstanding any other statement herein
to the contrary, the Holding Company intends to issue 250,000 shares of its
Common Stock from its authorized but unissued shares to the Heritage Foundation
of First Security Federal Savings Bank, Inc., a charitable organization
P-15
<PAGE>
created under Section 501(c)(3) of the Internal Revenue Code (the "Foundation").
Such issuance (the "Contribution") shall be in the form of either a direct
contribution or a sale for the aggregate amount of their par value. The
Contribution is being made in connection with the Conversion in order to
complement the Bank's existing community reinvestment activities and to support
the communities in which the Bank operates. The Contribution is expected to be
completed not later than twelve months after the completion of the Conversion.
The Foundation is dedicated to the promotion of charitable purposes within
the communities in which the Bank operates, including, but not limited to,
grants or donations to support not-for-profit medical facilities, cultural
activities, community groups and other types of organizations or projects. As a
private Foundation, the Foundation is required to distribute annually in grants
or donations at least 5% of its net investment assets.
The authority for the affairs of the Foundation is vested in the Board of
Trustees of the Foundation, none of whom may vote as directors of the Bank or
the Holding Company on the Donation.
The Contribution is subject to the approval of a majority of the total
outstanding votes of the Bank's members eligible to be cast at the Special
Meeting. The Contribution will be considered as a separate matter from approval
of the Plan of Conversion. If the Bank's members approve the Plan of Conversion,
but not the Contribution, the Bank intends to complete the Conversion without
the Contribution. Failure to approve the Contribution may materially increase
the pro forma market value of the Common Stock being offered since the estimated
valuation range takes into account the after-tax impact of the Donation. If such
an event occurs, the Bank would be required to resolicit subscribers. For
comparison purposes, voting members will be provided with a projection of the
pro forma market value of the Conversion Stock, an estimated price range and
certain selected pro forma data that would result if the Conversion were
consummated without the Contribution.
VIII. HOLDING COMPANY CERTIFICATE OF INCORPORATION
A copy of the proposed certificate of incorporation of the Holding Company
will be made available to members upon request.
IX. DIRECTORS OF THE CONVERTED BANK
Each Person serving as a member of the Board of Directors of the Bank at
the time of the Conversion will thereupon become a director of the Converted
Bank.
X. STOCK OPTION AND INCENTIVE PLAN AND RECOGNITION AND RETENTION PLAN
In order to provide an incentive for directors, Officers and employees of
the Holding Company and its subsidiaries (including the Bank), the Board of
Directors of the Holding Company intends to adopt, subject to shareholder
approval, a stock option and incentive plan and a recognition and retention plan
as soon as permitted by applicable regulation.
XI. CONTRIBUTIONS TO TAX-QUALIFIED EMPLOYEE PLANS
The Converted Bank and the Holding Company may in their discretion make
scheduled contributions to any Tax-Qualified Employee Plans, provided that any
such contributions which are for the acquisition of Holding Company Conversion
P-16
<PAGE>
Stock, or the repayment of debt incurred for such an acquisition, do not cause
the Converted Bank to fail to meet its regulatory capital requirements.
XII. SECURITIES REGISTRATION AND MARKET MAKING
Promptly following the Conversion, the Holding Company will register its
stock with the SEC pursuant to the Exchange Act. In connection with the
registration, the Holding Company will undertake not to deregister such stock,
without the approval of the OTS, for a period of three years thereafter.
The Holding Company shall use its best efforts to encourage and assist two
or more market makers to establish and maintain a market for its common stock
promptly following Conversion. The Holding Company will also use its best
efforts to cause its common stock to be quoted on the National Association of
Securities Dealers, Inc. Automated Quotations System or to be listed on a
national or regional securities exchange.
XIII. STATUS OF SAVINGS ACCOUNTS AND LOANS SUBSEQUENT TO CONVERSION
Each Deposit Account holder shall retain, without payment, a withdrawable
Deposit Account or Accounts in the Converted Bank, equal in amount to the
withdrawable value of such account holder's Deposit Account or Accounts prior to
Conversion. All Deposit Accounts will continue to be insured by the SAIF up to
the applicable limits of insurance coverage, and shall be subject to the same
terms and conditions (except as to voting and liquidation rights) as such
Deposit Account in the Bank at the time of the Conversion. All loans shall
retain the same status after Conversion as these loans had prior to Conversion.
XIV. LIQUIDATION ACCOUNT
For purposes of granting to Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain Deposit Accounts at the
Converted Bank a priority in the event of a complete liquidation of the
Converted Bank, the Converted Bank will, at the time of Conversion, establish a
liquidation account in an amount equal to the net worth of the Bank as shown on
its latest statement of financial condition contained in the final offering
circular used in connection with the Conversion. The creation and maintenance of
the liquidation account will not operate to restrict the use or application of
any of the regulatory capital accounts of the Converted Bank; provided, however,
that such regulatory capital accounts will not be voluntarily reduced below the
required dollar amount of the liquidation account. Each Eligible Account Holder
and Supplemental Eligible Account Holder shall, with respect to the Deposit
Account held, have a related inchoate interest in a portion of the liquidation
account balance ("subaccount balance").
The initial subaccount balance of a Deposit Account held by an Eligible
Account Holder and/or Supplemental Eligible Account Holder shall be determined
by multiplying the opening balance in the liquidation account by a fraction of
which the numerator is the amount of the Qualifying Deposit in the Deposit
Account on the Eligibility Record Date and/or the Supplemental Eligibility
Record Date and the denominator is the total amount of the Qualifying Deposits
of all Eligible Account Holders and Supplemental Eligible Account Holders on
such record dates in the Bank. For Deposit Accounts in existence at both dates,
separate subaccounts shall be determined on the basis of the Qualifying Deposits
in such Deposit Accounts on such record dates. Such initial subaccount balance
shall not be increased, and it shall be subject to downward adjustment as
provided below.
P-17
<PAGE>
If the deposit balance in any Deposit Account of an Eligible Account Holder
or Supplemental Eligible Account Holder at the close of business on any annual
closing date subsequent to the record date is less than the lesser of (i) the
deposit balance in such Deposit Account at the close of business on any other
annual closing date subsequent to the Eligibility Record Date or the
Supplemental Eligibility Record Date or (ii) the amount of the Qualifying
Deposit in such Deposit Account on the Eligibility Record Date or Supplemental
Eligibility Record Date, the subaccount balance shall be reduced in an amount
proportionate to the reduction in such deposit balance. In the event of a
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any increase in the deposit balance of the related Deposit
Account. If all funds in such Deposit Account are withdrawn, the related
subaccount balance shall be reduced to zero.
In the event of a complete liquidation of the Bank (and only in such
event), each Eligible Account Holder and Supplemental Eligible Account Holder
shall be entitled to receive a liquidation distribution from the liquidation
account in the amount of the then-current adjusted subaccount balances for
Deposit Accounts then held before any liquidation distribution may be made to
stockholders. No merger, consolidation, bulk purchase of assets with assumptions
of Deposit Accounts and other liabilities, or similar transactions with another
institution the accounts of which are insured by the SAIF, shall be considered
to be a complete liquidation. In such transactions, the liquidation account
shall be assumed by the surviving institution.
XV. RESTRICTIONS ON ACQUISITION OF CONVERTED BANK
Regulations of the OTS limit acquisitions, and offers to acquire, direct or
indirect beneficial ownership of more than 10% of any class of an equity
security of the Converted Bank or the Holding Company. In addition, consistent
with the regulations of the OTS, the charter of the Converted Bank shall provide
that for a period of five years following completion of the Conversion: (i) no
Person (i.e., no individual, group acting in concert, corporation, partnership,
association, joint stock company, trust, or unincorporated organization or
similar company, syndicate, or any other group formed for the purpose of
acquiring, holding or disposing of securities of an insured institution) shall
directly or indirectly offer to acquire or acquire beneficial ownership of more
than 10% of any class of the Bank's equity securities. Shares beneficially owned
in violation of this charter provision shall not be counted as shares entitled
to vote and shall not be voted by any Person or counted as voting shares in
connection with any matter submitted to the shareholders for a vote. This
limitation shall not apply to any offer to acquire or acquisition of beneficial
ownership of more than 10% of the common stock of the Bank by a corporation
whose ownership is or will be substantially the same as the ownership of the
Bank, provided that the offer or acquisition is made more than one year
following the date of completion of the Conversion; (ii) shareholders shall not
be permitted to cumulate their votes for elections of directors; and (iii)
special meetings of the shareholders relating to changes in control or amendment
of the charter may only be called by the Board of Directors.
XVI. AMENDMENT OR TERMINATION OF PLAN
If necessary or desirable, the Plan may be amended at any time prior to
submission of the Plan and proxy materials to the Members by a two-thirds vote
of the respective Boards of Directors of the Holding Company and the Bank. After
submission of the Plan and proxy materials to the Members, the Plan may be
amended by a two-thirds vote of the respective Boards of Directors of the
Holding Company and the Bank only with the concurrence of the OTS. In the event
that the Bank determines that for tax purposes or otherwise it is in the best
interest of the Bank to convert from a federal mutual to a federal stock
institution without the concurrent formation of a holding company, the Plan may
be substantively amended, with OTS approval, in such respects as the Board of
Directors of the Bank deems appropriate to reflect such change from a holding
company conversion to a direct conversion. In the event the Plan is so amended,
P-18
<PAGE>
common stock of the Bank will be substituted for Holding Company Conversion
Stock in the Subscription, Direct Community or Public Offerings, and subscribers
will be resolicited as described in Section V hereof. Any amendments to the Plan
(including amendments to reflect the elimination of the concurrent holding
company formation) made after approval by the Members with the concurrence of
the OTS shall not necessitate further approval by the Members unless otherwise
required.
The Plan may be terminated by a two-thirds vote of the Bank's Board of
Directors at any time prior to the Special Meeting of Members, and at any time
following such Special Meeting with the concurrence of the OTS. In its
discretion, the Board of Directors of the Bank may modify or terminate the Plan
upon the order or with the approval of the OTS and without further approval by
Members. The Plan shall terminate if the sale of all shares of Conversion Stock
is not completed within 24 months of the date of the Special Meeting. A specific
resolution approved by a majority of the Board of Directors of the Bank is
required in order for the Bank to terminate the Plan prior to the end of such
24-month period.
XVII. EXPENSES OF THE CONVERSION
The Holding Company and the Bank shall use their best efforts to assure
that expenses incurred by them in connection with the Conversion shall be
reasonable.
XVIII. TAX RULING
Consummation of the Conversion is expressly conditioned upon prior receipt
of either a ruling of the United States Internal Revenue Service or an opinion
of tax counsel with respect to federal taxation, and either a ruling of the
Illinois taxation authorities or an opinion of tax counsel or other tax advisor
with respect to Illinois taxation, to the effect that consummation of the
transactions contemplated herein will not be taxable to the Holding Company or
the Bank.
XIX. EXTENSION OF CREDIT FOR PURCHASE OF STOCK
The Bank may not knowingly loan funds or otherwise extend credit to any
Person to purchase in the Conversion shares of Holding Company Conversion Stock.
P-19
Exhibit 8.2
[CROWE CHIZEK LETTERHEAD]
July 21, 1997
Board of Directors
First Security Federal Savings Bank
936 N. Western Avenue
Chicago, IL 60622
RE: Illinois Income Tax Opinion relating to the conversion of First
Security Federal Savings Bank from a Federally-Chartered Mutual
Savings Bank to a Federally-Chartered Stock Savings Bank under Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended.
Ladies and Gentlemen:
In accordance with your request, we render our opinion relating to the Illinois
income tax consequences of the conversion of First Security Federal Savings
Bank.
Statement of Facts
- ------------------
The facts and circumstances surrounding the proposed charter conversion are
quite detailed and are described at length in the Plan of Conversion and the
federal tax opinion issued by Silver, Freedman, & Taff, L.L.P., which are hereby
incorporated herein. However, a brief summary of the proposed Plan of Conversion
is as follows:
First Security Federal Savings Bank ("Mutual") is a federally chartered mutual
savings bank. As a mutual savings bank, Mutual has no authorized stock. For what
are stated to be valid business reasons, Mutual wishes to amend its charter to
permit it to continue operations in the form of a federally-chartered stock
savings bank ("Stock Bank"). The fair market value of Stock Bank deposit
accounts received by Mutual deposit account holders will be equal to the fair
market value of Mutual deposit accounts surrendered as a result of the
conversion process.
Opinion
- -------
You have provided us with a copy of the federal income tax opinion of the
transaction prepared by Silver, Freedman, & Taff, L.L.P., dated July 11, 1997,
in which they have opined that the Conversion will be a transaction described in
Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended. Our
opinion regarding the Illinois tax consequences is based on the facts and
assumptions and incorporates the capitalized terms contained in the Silver,
Freedman, & Taff, L.L.P. federal tax opinion. Our opinion on the Illinois tax
consequences assumes that the final federal income tax consequences of the
proposed transaction are those outlined in the Silver, Freedman, & Taff, L.L.P.
federal tax opinion.
<PAGE>
Board of Directors
July 21, 1997
Page 2
Should it finally be determined that the facts and the federal income tax
consequences are not as outlined in the Silver, Freedman, & Taff, L.L.P. federal
tax opinion, the Illinois tax consequences and our Illinois tax opinion will
differ from what is contained herein. Our opinion is based on the current
Illinois tax law which is subject to change.
Our opinion adopts and relies upon the facts, assumptions, and conclusions as
set forth in the Silver, Freedman, & Taff, L.L.P. federal tax opinion letter.
Based upon that information, we render the following opinion with respect to the
Illinois income tax consequences of the Conversion.
(1) No gain or loss shall be recognized by Mutual or Stock Bank as a
result of the Conversion. ITA Sec. 403(a)(35 ILCS 5/403(a))
(2) Stock Bank will recognize no gain or loss upon the receipt of money
and other property, if any, in the Conversion, in exchange for its
stock. ITA Sec. 403(a)(35 ILCS 5/403(a))
(3) No gain or loss will be recognized by the Holding Company upon the
receipt of money for Holding Company Conversion Stock. ITA Sec.
403(a)(35 ILCS 5/403(a)).
(4) The basis of Mutual's assets in the hands of Stock Bank will be the
same as the basis of those assets in the hands of Mutual immediately
prior to the transaction. ITA Sec. 403(a)(35 ILCS 5/403(a))
(5) Stock Bank's holding period of the assets of Mutual will include the
period during which such assets were held by Mutual prior to the
Conversion. ITA Sec. 403(a)(35 ILCS 5/403(a))
(6) The tax attributes of Mutual will be taken into account by Stock Bank
as if there had been no reorganization. Accordingly, the tax year of
Mutual will not end on the effective date of the Conversion. The part
of the tax year of Mutual before the conversion will be includable in
the tax year of Stock Bank after the conversion. Therefore, Mutual
will not have to file a Illinois income tax return for the portion of
the tax year prior to the conversion. ITA Sec. 401(a)(35 ILCS
5/401(a))
(7) Depositors will realize gain, if any, upon the constructive issuance
to them of withdrawable deposit accounts of Stock Bank, Subscription
Rights and/or interests in the liquidation account of Stock Bank. Any
gain resulting therefrom will be recognized, but only in an amount not
in excess of the fair market value of the liquidation accounts and/or
Subscription Rights received. The liquidation accounts will have
nominal, if any, fair market value. Based solely on the accuracy of
the conclusion reached in the Appraiser's Opinion, and our reliance on
such opinion, that the Subscription Rights have no value at the time
of distribution or exercise, no gain or loss was required to be
recognized by depositors upon receipt or distribution of Subscription
Rights. Likewise, based solely on the accuracy of the aforesaid
conclusion reached in the Appraiser's
<PAGE>
Board of Directors
July 21, 1997
Page 3
Opinion, and our reliance thereon, we give the following opinions: (a)
no taxable income will be recognized by the borrowers, directors,
officers, and employees of Mutual upon the distribution to them of
Subscription Rights or upon the exercise or lapse of the Subscription
Rights to acquire Holding Company Conversion Stock at fair market
value; (b) no taxable income will be realized by the depositors of
Mutual as a result of the exercise or lapse of the Subscription Rights
to purchase Holding Company Conversion Stock at fair market value; and
(c) no taxable income will be realized by Mutual or Stock Bank on the
issuance or distribution of Subscription Rights to depositors of
Mutual to purchase shares of Holding Company Conversion Stock at fair
market value. ITA Sec. 203(a)(1)(35 ILCS 5/203(a)(1))
Notwithstanding the Appraiser's Opinion, if the Subscription Rights
are subsequently found to have a fair market value, income may be
recognized by various recipients of the Subscription Rights (in
certain cases, whether or not the rights are exercised) and Holding
Company and/or Stock Bank may be taxable on the distribution of the
Subscription Rights.
(8) The creation of the liquidation account on the records of Stock Bank
will have no effect on Mutual's or Stock Bank's taxable income,
deductions, or additions to the reserve for bad debts. ITA Sec.
403(a)(35 ILCS 5/403(a))
(9) Stock Bank will succeed to and take into account, immediately after
the reorganization, the dollar amounts of those accounts of Mutual
which represent bad debt reserves in respect of which Mutual had taken
a bad debt deduction for taxable years ending on or before the date of
the reorganization. The bad debt reserves will not be required to be
restored to the gross income of either Mutual or Stock Bank as a
consequence of the Conversion for the taxable year of the
reorganization, and such bad debt reserves will have the same
character in the hands of Stock Bank as they would have had in the
hands of Mutual if no reorganization had occurred. ITA Sec. 402(a)(35
ILCS 5/402(a)) No opinion is being expressed as to whether the bad
debt reserves will be required to be restored to the gross income of
either Mutual or Stock Bank for the taxable year of the transfer if
mutual or Stock Bank fails to meet the requirements of Section
593(a)(2) of the Internal Revenue Code during such taxable year
(10) A depositor's basis in the savings deposits of Stock Bank will be the
same as the basis of his savings deposits in Mutual. Based upon the
Appraiser's Opinion, the basis of the Subscription Rights will be
zero. The basis of the interest in the liquidation account of Stock
Bank received by Eligible Account Holders and Supplemental Eligible
Account Holders will be equal to the cost of such property; i.e., the
fair market value of the proprietary interest in Mutual, which in this
transaction we assumed to be zero. ITA Sec. 203(a)(1)(35 ILCS
5/203(a)(1))
<PAGE>
Board of Directors
July 21, 1997
Page 4
(11) The basis of Holding Company Conversion Stock to its shareholders will
be the purchase price thereof. ITA Sec. 203(a)(1)(35 ILCS 5/203(a)(1))
(12) A shareholder's holding period for Holding Company Conversion Stock
acquired through the exercise of the Subscription Rights shall begin
on the date on which the Subscription Rights are exercised. The
holding period for the Holding Company Conversion Stock purchased
pursuant to the direct community offering, public offering, or under
other purchase arrangements will commence on the date following the
date on which such stock is purchased. ITA Sec. 203(a)(1)(35 ILCS
5/203(a)(1))
(13) Regardless of any book entries that were made for the establishment of
a liquidation account, the reorganization will not diminish the
accumulated earnings and profits of Mutual available for the
subsequent distribution of dividends. Stock Bank will succeed to and
take into account the earnings and profits, or deficit in earnings and
profits, of Mutual as of the date of Conversion. ITA Sec. 403(a)(35
ILCS 5/403(a))
The above opinions are effective to the extent that Mutual is solvent. No
opinion is expressed about the tax treatment of the transaction if Mutual is
insolvent. Whether or not Mutual is solvent will be determined at the end of the
taxable year in which the transaction is consummated.
Our opinion is based upon legal authorities currently in effect, which
authorities are subject to modification or challenge at any time and perhaps
with retroactive effect. Further, no opinion is expressed under the provisions
of any of the other sections of the Illinois Code and Income Tax Regulations
which may also be applicable thereto, or to the tax treatment of any conditions
existing at the time of, or effects resulting from, the transaction which are
not specifically covered by the opinions set forth above.
If any fact contained in this opinion letter or the Silver, Freedman, & Taff,
L.L.P. federal tax opinion changes to alter the federal tax treatment, it is
imperative we be notified to determine the effect on the Illinois income tax
consequences, if any.
Very truly yours,
/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
1st Security Federal Savings Bank
We consent to the use in this Registration Statment on Form S-1 filed with the
Securities and Exchange Commission and Form AC filed with the Office of Thrift
Supervision on July 21, 1997, of our report dated February 8, 1997, on the
financial statements of 1st Security Federal Savings Bank. We also consent to
the reference to us under the headings "The Conversion - Income Tax
Consequences" and "-The Contribution" and "-Effects of Conversion to Stock Form
on Depositors and Borrowers of the Bank"; "Experts"; and "Legal and Tax Matters"
in this Registration Statement on Forms S-1 and AC.
/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP
Oak Brook, Illinois
September 5, 1997
[FINPRO LETTERHEAD]
July 18, 1997
Board of Directors
First Security Federal Savings Bank
936 North Western Avenue
Chicago, IL 60622
Dear Board Members:
We hereby consent to the use of our firm's name, FinPro, Inc. ("FinPro") in the
Form AC Application for Conversion and the prospectus included therein filed by
First Security Federal Savings Bank and any amendments thereto, for the
Valuation Appraisal Report ("Report") regarding the valuation of First Security
Federal Savings Bank provided by FinPro, and our opinion regarding subscription
rights filed as exhibits to the Form AC referred to above. We also consent to
the use of our firm's name and the inclusion of, summary of and references to
our Report and Opinion in the prospectus of First Security Federal Savings Bank
and any amendments thereto.
Very Truly Yours,
/s/ Donald J. Musso
Donald J. Musso
Liberty Corner, New Jersey
July 18, 1997
<PAGE>
[FINPRO LETTERHEAD]
July 18, 1997
Board of Directors
First Security Federal Savings Bank
936 North Western Avenue
Chicago, IL 60622
Dear Board Members:
All capitalized terms not otherwise defined in this letter have the meanings
given such terms in the Plan of Conversion and Agreement and Plan of
Reorganization (the "Plan") adopted by the Board of Directors of First Security
Federal Savings Bank (the "Bank"), whereby the Bank will convert from a
federally chartered mutual savings institution to a federally chartered stock
savings institution and issue shares of Common Stock in a Subscription and
Community Offering.
We understand that in accordance with the Plan, Subscription Rights to purchase
shares of the Company's Common Stock are to be issued to (i) Eligible Account
Holders; (ii) Supplemental Eligible Account Holders; (iii) Other Members and ;
(iv) Directors, Officers and Employees, collectively referred to as the
"Recipients". Based solely on our observation that the Subscription Rights will
be available to such Recipients without cost, will be legally non-transferable
and of short duration, and will afford the Recipients the right only to purchase
shares of Common Stock at the same price as will be paid by members of the
general public in the Direct Community Offering, but without undertaking any
independent investigation of state or federal law or the position of the
Internal Revenue Service with respect to this issue, we are of the belief that:
(1) the Subscription Rights will have no ascertainable market value; and
(2) the price at which the Subscription Rights are excercisable will not
be more or less than the pro forma market value of the shares upon
issuance.
Changes in the local and national economy, the legislative and regulatory
environment, the stock market, interest rates, and other external forces (such
as natural disasters or significant world events) may occur from time to time,
often with great unpredictability and may materially impact the value of thrift
stocks as a whole or the Bank's value alone. Accordingly, no assurance can be
given that persons who subscribe to shares of Common Stock in the offering will
thereafter be able to buy or sell such shares at the same price paid in the
Subscription Offering.
Very Truly Yours,
FinPro, Inc.
/s/ Donald J. Musso
Donald J. Musso
President
<PAGE>
RB 20 Certification
1. FinPro, Inc. and Donald J. Musso (President) hereby certifies that neither
party has been the subject of any criminal, civil or administrative
judgments, consents, undertakings or orders, or any past or ongoing
indictments, formal investigations, examinations, or administrative
proceedings (excluding routine or customary audits, inspections and
investigations) issued by any federal or state court, any department,
agency, or commission of the U.S. Government, any state or municipality,
any self-regulatory trade or professional organization, or any foreign
government or governmental entity, which involve:
(i) commission of a felony, fraud, moral turpitude, dishonesty or breach
of trust;
(ii) violation of securities or commodities laws or regulations;
(iii) violation of depository institution laws or regulations;
(iv) violation of housing authority laws or regulations;
(v) violation of the rules, regulations, codes of conduct or ethics of a
self-regulatory trade or professional organization;
(vi) adjudication of bankruptcy or insolvency or appointment of a receiver,
conservator, trustee, referee, or guardian.
2. FinPro, Inc. and Donald J. Musso have never filed:
(i) any application relating to the organization of or obtaining insurance
of accounts for a bank, savings bank, or savings and loan association;
(ii) an application to acquire any of the foregoing under the Savings and
Loan Holding Company Act or the Bank Holding Company Act;
(iii)a notice relating to a change in control of any of the foregoing
under the Change in Savings and Loan Control Act; or
(iv) an application to acquire a foreign bank or parent thereof;
<PAGE>
which was denied, or was withdrawn by FinPro, Inc. after receipt of
formal or informal notice of a recommendation of denial.
3. FinPro, Inc. and Donald J. Musso do not hold any equity securities of an
insured institution or holding company thereof, other than the institution
or institution or company that is the subject of the application.
4. FinPro, Inc. and Donald J. Musso have no investments in other savings and
loan associations in excess of the levels permitted under Section
10(e)(1)(A)(iii) of the Homeowners' Loan Act.
5. FinPro, Inc. and Donald J. Musso have disclosed the debts of all companies,
partnerships, and joint ventures in which either party has a controlling
interest of 25 percent or more.
I hereby certify that the statements I have made herein are true, complete, and
correct to the best of my knowledge and belief.
On behalf of FinPro, Inc On behalf of Donald J. Musso
Date
/s/ Donald J. Musso Donald J. Musso
--------------------- ---------------------
Donald J. Musso, President Donald J. Musso
FinPro, Inc. Individual
<PAGE>
Affidavit of Independence
FinPro, Inc. ("FinPro") hereby certifies that:
(1) The pro-forma market value of First Security Federal Savings Bank
represents FinPro's independent judgement;
(2) The amount of remuneration is not related to the final value estimated by
FinPro in its appraisal report;
(3) FinPro is independent and has fully disclosed in a written statement to the
OTS any relationships that may have a material bearing upon the question of
independence;
(4) The indemnity agreement between FinPro and First Security Federal Savings
Bank has been fully disclosed in a written statement to the OTS; and
(5) FinPro has not been unduly influenced by the converting association, the
selling agent, the applicants law firm or any other agent connected with
the conversion.
I hereby certify that the statements I have made herein are true, complete, and
correct to the best of my knowledge and belief.
Date Applicant
/s/ Donald J. Musso
July 15, 1997 --------------------------
Donald J. Musso, President
FinPro, Inc.
Witnessed
/s/ Robert C. Ahrens
June 15, 1997 --------------------------
Sealed
<PAGE>
Table of Contents
First Security Federal Savings Bank
Chicago, Illinois
INTRODUCTION 1
1. OVERVIEW AND FINANCIAL ANALYSIS 3
GENERAL OVERVIEW 3
STRATEGIC DIRECTION 4
BALANCE SHEET TRENDS 5
LOAN PORTFOLIO 8
SECURITIES 11
INVESTMENTS AND MORTGAGE-BACKED SECURITIES 12
ASSET QUALITY 14
FUNDING COMPOSITION 17
ASSET/LIABILITY MANAGEMENT 20
NET WORTH AND CAPITAL 21
INCOME AND EXPENSE TRENDS 22
SUBSIDIARIES 26
LEGAL PROCEEDINGS 26
2. MARKET AREA ANALYSIS 27
BRANCH FACILITIES 28
MARKET AREA DEMOGRAPHICS 29
MARKET AREA DEPOSIT CHARACTERISTICS 30
3. COMPARISONS WITH PUBLICLY TRADED THRIFTS 33
INTRODUCTION 33
SELECTION SCREENS 33
SELECTION CRITERIA 34
COMPARABLE GROUP PROFILES 37
CORPORATE DATA 42
KEY FINANCIAL DATA 43
CAPITAL DATA 44
ASSET QUALITY DATA 45
PROFITABILITY DATA 46
INCOME STATEMENT DATA 47
GROWTH DATA 48
MARKET CAPITALIZATION DATA 49
DIVIDEND DATA 50
PRICING DATA 51
<PAGE>
4. MARKET VALUE DETERMINATION 52
INTRODUCTION 52
FINANCIAL STRENGTH 53
EARNINGS QUALITY, PREDICTABILITY AND GROWTH 55
MARKET AREA 59
MANAGEMENT 60
DIVIDENDS 61
LIQUIDITY OF THE ISSUE 62
SUBSCRIPTION INTEREST 63
RECENT REGULATORY MATTERS 64
MARKET FOR SEASONED THRIFT STOCKS 65
ACQUISITION MARKET 69
ADJUSTMENTS TO VALUE 75
VALUATION APPROACH 76
VALUATION CONCLUSION 79
<PAGE>
List of Figures
First Security Federal Savings Bank
Chicago, Illinois
FIGURE 1 - CURRENT BRANCH LIST 3
FIGURE 2 - HISTORICAL TIMELINE 4
FIGURE 3 - ASSET AND RETAINED EARNINGS CHART 5
FIGURE 4 - AVERAGE YIELDS AND COSTS 6
FIGURE 5 - KEY BALANCE SHEET DATA 7
FIGURE 6 - KEY OPERATIONS DATA 7
FIGURE 7 - LOAN MIX AS OF APRIL 30, 1997 CHART 8
FIGURE 8 - NET LOANS RECEIVABLE CHART 9
FIGURE 9 - LOAN MIX 10
FIGURE 10 - SECURITIES CHART 11
FIGURE 11 - INVESTMENT MIX 12
FIGURE 12 - INVESTMENT PORTFOLIO MATURITY 12
FIGURE 13 - MBS PORTFOLIO 13
FIGURE 14 - MBS PORTFOLIO MATURITY 13
FIGURE 15 - NON-PERFORMING ASSETS CHART 14
FIGURE 16 - NON-PERFORMING LOANS 15
FIGURE 17 - ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES CHART 16
FIGURE 18 - DEPOSIT MIX 17
FIGURE 19 - DEPOSIT AND BORROWING TREND CHART 18
FIGURE 20 - TIME DEPOSITS MATURITY SCHEDULE 19
FIGURE 21 - NPV ANALYSIS CHART 20
FIGURE 22 - CAPITAL ANALYSIS 21
FIGURE 23 - NET INCOME CHART 22
FIGURE 24 - SPREAD AND MARGIN CHART 23
FIGURE 25 - INCOME STATEMENT TRENDS 24
FIGURE 26 - PROFITABILITY TREND CHART 25
FIGURE 27 - TARGET MARKETS 27
FIGURE 28 - BRANCH FACILITY TABLE 28
FIGURE 29 - POPULATION & HOUSEHOLD DEMOGRAPHICS 29
FIGURE 30 - DEPOSIT TRENDS AND MARKET SHARE TABLE 30
FIGURE 31 - DEPOSIT TRENDS AND MARKET SHARE TABLE 31
FIGURE 32 - DEPOSIT TRENDS AND MARKET SHARE TABLE 31
FIGURE 33 - DEPOSIT TRENDS AND MARKET SHARE TABLE 32
FIGURE 34 - KEY FINANCIAL INDICATORS 40
FIGURE 35 - COMPARABLE CORPORATE DATA 42
FIGURE 36 - COMPARABLE KEY FINANCIAL DATA 43
FIGURE 37 - COMPARABLE CAPITAL DATA 44
FIGURE 38 - COMPARABLE ASSET QUALITY DATA 45
FIGURE 39 - COMPARABLE PROFITABILITY DATA 46
FIGURE 40 - COMPARABLE INCOME STATEMENT DATA 47
FIGURE 41 - COMPARABLE GROWTH DATA 48
FIGURE 42 - COMPARABLE MARKET CAPITALIZATION DATA 49
FIGURE 43 - COMPARABLE DIVIDEND DATA 50
FIGURE 44 - COMPARABLE PRICING DATA 51
FIGURE 45 - NET INCOME CHART 56
FIGURE 46 - SPREAD AND MARGIN CHART 57
FIGURE 47 - SNL THRIFT INDEX CHART 65
<PAGE>
FIGURE 48 - HISTORICAL SNL INDEX 66
FIGURE 49 - EQUITY INDICES 67
FIGURE 50 - HISTORICAL RATES 68
FIGURE 51 - DEALS FOR LAST FIVE QUARTERS 69
FIGURE 52 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO BOOK 70
FIGURE 53 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO
TANGIBLE BOOK 71
FIGURE 54 - THRIFT ACQUISITION MULTIPLES, PRICE TO EARNINGS 71
FIGURE 55 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO ASSETS 72
FIGURE 56 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO DEPOSITS 72
FIGURE 57 - DEAL MULTIPLES 73
FIGURE 58 - ILLINOIS THRIFT ACQUISITION TABLE 73
FIGURE 59 - VALUE RANGE OFFERING DATA 77
FIGURE 60 - COMPARABLE PRICING MULTIPLES 78
FIGURE 61 - RECENT STANDARD CONVERSION MULTIPLES 78
FIGURE 62 - ADJUSTED SUPERMAX TO RECENT CONVERSION COMPARISON 78
<PAGE>
List of Exhibits
First Security Federal Savings Bank
Chicago, Illinois
Exhibit
- -------
1 Consolidated Balance Sheets
2 Consolidated Statements of Income
3 Consolidated Statements of Equity
4 Consolidated Statements of Cash Flows
5 Selected Data on all Public Thrifts, Illinois Thrifts, and Comparables
6 Market Multiples - All Public Thrifts, Illinois Thrifts, and Comparables
7 Standard Conversions - 1996-to-Date - Selected Market Data
8 Appraisal April 30, 1997 12 Months Data No Foundation With Earnings
Adjustment
9 Appraisal April 30, 1997 12 Months Data With Foundation With Earnings
Adjustment
10 Appraisal December 31, 1996 12 Months Data No Foundation No Earnings
Adjustment
11 Appraisal December 31, 1996 12 Months Data With Foundation No Earnings
Adjustment
12 Appraisal April 30, 1997 4 Months Data No Foundation No Earnings Adjustment
13 Appraisal April 30, 1997 4 Months Data With Foundation No Earnings
Adjustment
14 Profile of FinPro, Inc.
<PAGE>
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Introduction
This report represents FinPro, Inc.'s ("FinPro") independent appraisal of the
estimated pro-forma market value of the common stock ( the "Common Stock") of
First Security Federal Savings Bank (the "Bank" or "First Security") in
connection with the Plan of Conversion ("Conversion") of First Security from a
federally chartered mutual savings bank to a federally chartered stock savings
bank. Pursuant to the Plan of Conversion, (i) the Bank will convert from a
federally chartered savings bank organized in mutual form to a federally
chartered savings bank organized in the stock form, (ii) the Bank will offer and
sell shares of its common stock in a subscription and community offering.
It is our understanding that the Bank will offer its stock in a subscription and
community offering to the Bank's Eligible Account Holders, to Supplemental
Eligible Account Holders of the Bank, to Other Participants, to the board
members, officers and employees of the Bank, and to the community. This
appraisal has been prepared in accordance with Regulation 563b.7 and with the
"Guidelines for Appraisal Reports for the Valuation of Savings and Loan
Associations Converting from Mutual to Stock Form of Organization" of the Office
of Thrift Supervision ("OTS") which have been adopted in practice by the Federal
Deposit Insurance Corporation ("FDIC"), including the most recent revisions as
of October 21, 1994, and applicable regulatory interpretations thereof.
In the course of preparing our report, we reviewed the audited financial
statements of the Bank's operations for the four month period ended April 30,
1997 and the Bank's operations and financials for the prior three years ending
December 31, 1996. We also reviewed the Bank's Application for Approval of
Conversion including the Proxy Statement and the Company's Form S-1 registration
statement as filed with the Securities and Exchange Commission ("SEC"). We have
conducted due diligence analysis of the Bank and the Company (hereinafter,
collectively referred to as "the Bank") and held due diligence related
discussions with the Bank's management and board, Crowe, Chizek, and Company,
L.L.P. (the Bank's independent audit firm), Freedman, Billings, Ramsey & Co.,
Inc. (the Bank's underwriter), and Silver, Freedman & Taff, L.L.P. (the Bank's
special counsel). The valuation parameters set forth in the appraisal were
predicated on these discussions but all conclusions related to the valuation
were reached and made independent of such discussions.
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Where appropriate, we considered information based upon other publicly available
sources, which we believe to be reliable; however, we cannot guarantee the
accuracy or completeness of such information. We visited the Bank's primary
market area and reviewed the market area economic condition. We also reviewed
the competitive environment in which the Bank operates and its relative
strengths and weaknesses. We compared the Bank's performance with selected
publicly traded thrift institutions. We reviewed conditions in the securities
markets in general and in the market for savings institutions in particular. Our
analysis included a review of the estimated effects of the Conversion on the
Bank, operation and expected financial performance as they related to the Bank's
estimated pro-forma value.
In preparing our valuation, we relied upon and assumed the accuracy and
completeness of financial and other information provided to us by the Bank and
its independent accountants. We did not independently verify the financial
statements and other information provided by the Bank and its independent
accountants, nor did we independently value any of the Bank's assets or
liabilities. This estimated valuation considers the Bank only as a going concern
and should not be considered as an indication of its liquidation value.
Our valuation is not intended, and must not be construed, to be a recommendation
of any kind as the advisability of purchasing shares of Common Stock in the
Conversion. Moreover, because such valuation is necessarily based upon estimates
and projections of a number of matters, all of which are subject to change from
time to time, no assurance can be given that persons who purchase shares of
Common Stock in the Conversion will thereafter be able to sell such shares at
prices related to the foregoing valuation of the pro-forma market value thereof.
FinPro is not a seller of securities within the meaning of any federal or state
securities laws and any report prepared by FinPro shall not be used as an offer
or solicitation with respect to the purchase or sale of any securities.
The estimated valuation herein will be updated as appropriate. These updates
will consider, among other factors, any developments or changes in the Bank
financial condition, operating performance, management policies and procedures,
and current conditions in the securities market for thrift institution common
stock. Should any such developments or changes, in our opinion, be material to
the estimated pro-forma market value of the Bank, appropriate adjustments to the
estimated pro-forma market value will be made. The reasons for any such
adjustments will be explained at that time.
<PAGE>
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1. Overview and Financial Analysis
General Overview
The Bank after the Conversion, will be a federally chartered stock savings bank.
As of April 30, 1997, the Bank had $260.0 million in total assets, $219.0
million in deposits, $165.9 million in net loans and $30.0 million in equity.
The following table shows the Bank's branch network as of April 30, 1997.
FIGURE 1 - CURRENT BRANCH LIST
Branch Office Town
- ------------- ----
936 N. Western Avenue Chicago, IL
2166 Plum Grove Road Rolling Meadows, IL
820 N. Western Avenue Chicago, IL
5670 N. Milwaukee Avenue Chicago, IL
7918 Bustleton Avenue Philadelphia, PA
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The Bank was formed in 1964. Additional notable events include:
FIGURE 2 - HISTORICAL TIMELINE
1966 FDIC Insurance obtained
1978 Opened Rolling Meadows branch office
1983 Converted to a Federal Mutual Association and changed name to
First Security Federal Savings Bank
1984 Opened walk-up and drive-up facility at 820 N. Western Ave.
1989 The Financial Institutions Reform Recovery and Enforcement Act
signed into law.
1991 Federal Deposit Insurance Improvement Act became law.
1993 Opened de-novo branch at 5670 Milwaukee Ave., Chicago
1994 Purchased branch, deposits and loans of Ukrainian Savings and
Loan in Philadelphia from the RTC
1997 The Bank initiated conversion from a mutual savings bank to a
stock institution through a planned IPO.
Strategic Direction
The Bank has been a community oriented institution accepting deposits from the
general public and uses such deposits, together with other funds, to originate
primarily one-to-four family residential mortgages. To a lessor extent, the Bank
has originated loans for commercial real estate, multi-family, consumer and
other loans.
<PAGE>
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Balance Sheet Trends
The asset size of the Bank has increased steadily since December 31, 1992, at
which time the Bank had assets of $177.4 million. Since that time, assets have
grown $82.6 million, or 46.53%, to $260.0 million at April 30, 1997. Retained
earnings has followed a similar trend growing from $19.2 million at December 31,
1992 to $30.0 million at April 30, 1997, or 55.88%.
FIGURE 3 - ASSET AND RETAINED EARNINGS CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Both spread and margin have increased for the four month period ending April 30,
1997, when compared to the same four month period ending April 30, 1996.
FIGURE 4 - AVERAGE YIELDS AND COSTS
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Conversion Valuation Appraisal Report Page: 1 - 7
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The following tables set forth certain information concerning the financial
position of the Bank along with operations data at the dates indicated.
FIGURE 5 - KEY BALANCE SHEET DATA
[GRAPHIC OMITTED]
Source: Offering Prospectus
FIGURE 6 - KEY OPERATIONS DATA
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Loan Portfolio
The Bank originates primarily one-to-four family loans, which comprise 81.32% of
the loan mix. The Bank also originates commercial, mixed use, multi-family and
consumer loans to a lesser extent.
FIGURE 7 - LOAN MIX AS OF APRIL 30, 1997 CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Conversion Valuation Appraisal Report Page: 1 - 9
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The Bank has experienced solid loan growth. Loans have grown from $98.0 million
at December 31, 1992 to $165.9 million at April 30, 1997, which translates into
growth of 69.36% over that period. The Bank maintained a net loans to assets
ratio in excess of 60.00% at April 30, 1997.
FIGURE 8 - NET LOANS RECEIVABLE CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Conversion Valuation Appraisal Report Page: 1 - 10
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The Bank's loan mix has shifted toward adjustable rate loans.
FIGURE 9 - LOAN MIX
[GRAPHIC OMITTED]
Source: Offering Prospectus
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 11
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Securities
The combined investment and mortgage-backed security portfolio has remained
stable on an actual dollar basis since December 31, 1995, shifting its mix
towards held-to-maturity. As a percentage of assets the portfolio has decreased
from 31.55% to 30.07% over the same period.
FIGURE 10 - SECURITIES CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Investments and Mortgage-backed Securities
The Bank's investment portfolio has grown from $33.6 million at December 31,
1992 to $37.2 million at April 30, 1997. The mix has shifted away from U.S.
Government securities and toward federal agency obligations, which now comprise
61.33% of the portfolio.
FIGURE 11 - INVESTMENT MIX
[GRAPHIC OMITTED]
Source: Offering Prospectus
FIGURE 12 - INVESTMENT PORTFOLIO MATURITY
[GRAPHIC OMITTED]
Source: Offering Prospectus
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The mortgaged-backed securities portfolio has decreased from $42.6 million to
$41.0 million from December 31, 1994 to April 30, 1997.
FIGURE 13 - MBS PORTFOLIO
[GRAPHIC OMITTED]
Source: Offering Prospectus
The investment portfolio is weighted toward the long term with $34.4 million, or
83.22%, maturing in over ten years.
FIGURE 14 - MBS PORTFOLIO MATURITY
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Asset Quality
Non-performing loans, as defined in the offering prospectus, have decreased from
$2.2 million at December 31, 1992 to $1.4 million at April 30, 1997. The Bank
currently does not have any REO. At April 30, 1997 the Bank had $0.8 million in
non-performing leases. This equates to a nonperforming assets to period end
assets ratio of 0.87%.
FIGURE 15 - NON-PERFORMING ASSETS CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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FIGURE 16 - NON-PERFORMING LOANS
At April 30, 1997
($ in thousands)
-----------------
Non-performing loans $1,419
Non-performing leases $ 839
Real estate owned, net $ 0
Total non-performing assets $2,258
Non-performing loans as a percentage of total loans 0.55%
Non-performing assets to total assets 0.87%
Source: Offering Prospectus
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The Bank has grown its allowance for loan and lease losses from $0.4 million at
December 31, 1992 to $1.7 million at April 30, 1997. ALLL to non-performing
assets is 73.78% as of April 30, 1997.
FIGURE 17 - ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Funding Composition
The Bank's deposit mix as of April 30, 1997 is presented below.
FIGURE 18 - DEPOSIT MIX
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Total deposits have grown $64.4 million or 41.69% since December 31, 1992.
Borrowings have grown from $1.0 million at December 31, 1992 to $7.5 million at
April 30, 1997.
FIGURE 19 - DEPOSIT AND BORROWING TREND CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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FIGURE 20 - TIME DEPOSITS MATURITY SCHEDULE
[GRAPHIC OMITTED]
The Bank's certificates are weighted toward the short term with $102.2 million,
or 79.73%, maturing within one year.
Source: Offering Prospectus
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Asset/Liability Management
The Bank manages its interest rate risk through normal balance sheet activities
and does not utilize any hedging techniques. The following chart was calculated
by the OTS utilizing the March 31, 1997 TFR as a data source.
FIGURE 21 - NPV ANALYSIS CHART
[GRAPHIC OMITTED]
Source: Calculated by the OTS, March 31, 1997 data.
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Net Worth and Capital
At April 30, 1997, the Bank had capital in excess of the minimum requirements
for all three measures.
FIGURE 22 - CAPITAL ANALYSIS
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Income and Expense Trends
The chart below shows the Bank's net income for the past five fiscal years plus
the four month period ending April 30, 1997. The December 31, 1996, net income
of $452 thousand is skewed due to two one-time items, which were:
o $2.5 million contribution to the Heritage Foundation of First Security
Federal Savings Bank, Inc.
o $1.3 million one-time SAIF assessment.
FIGURE 23 - NET INCOME CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
Note: April 1997 data is for the four month period and is not annualized.
The annualized 1997 net income would be $2.283 million.
<PAGE>
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Spread and margin have declined since December 31, 1992, as shown in the
following chart.
FIGURE 24 - SPREAD AND MARGIN CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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A summary of the Bank's income statement is presented below. Net income for the
four month period ending April 30, 1997 is lower than net income for the same
four month period ending April 30, 1996. The figures for the year ended December
31, 1996, are skewed due to the $2.5 million charitable contribution and the
$1.3 million SAIF assessment.
FIGURE 25 - INCOME STATEMENT TRENDS
[GRAPHIC OMITTED]
Source: Offering Prospectus
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The ROA and ROE data shown below is not adjusted for the one-time events and the
April 1997 data is for the four month period annualized.
FIGURE 26 - PROFITABILITY TREND CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
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Subsidiaries
The Bank has one subsidiary Western Security Service Corporation ("Western").
Western, an Illinois corporation, was incorporated for the purpose of offering
customers and members of the general public credit, life, mortgage and
disability insurance.
Legal Proceedings
The Bank is not currently involved in any legal proceedings other than routine
legal proceedings that occur in the ordinary course of business, which, in
aggregate, involve amounts that are believed to be immaterial to the financial
condition of the Bank.
<PAGE>
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2. Market Area Analysis
For presentation purposes, market areas have been defined as a 1.5 mile radius
around each of the Bank's branch facilities (with the two Western Ave. branches
included as one branch). Data for each demographic element is aggregated for the
market area around each branch and displayed in comparison to the other markets.
The Bank's four market areas are defined as follows (note that only portions of
the communities/towns may be included in the radius markets):
FIGURE 27 - TARGET MARKETS
Market Communities / Towns
- ---------------------------------- ----------------------------------
1. Chicago - N. Western Ave., IL West Town, Humboldt Park, Logan
Park, Wicker Park
2. Chicago - N. Milwaukee Ave., IL Norwood Park, Gladstone, Jefferson
Park
3. Rolling Meadows, IL Arlington Heights, Palatine,
Rolling Meadows, Schaumburg, Mount
Prospect
4. Philadelphia, PA Rhawnhurst, Bustleton, Fox Chase,
Burholme, Lexington Park and
Eastern Montgomery County
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Branch Facilities
The Bank operates four branches in Illinois and one in Philadelphia,
Pennsylvania. The 936 N. Western Avenue location serves as the main office.
FIGURE 28 - BRANCH FACILITY TABLE
Branch Office Owned/Leased
------------- ------------
936 N. Western Ave., Chicago, IL Owned
2166 Plum Grove Rd., Rolling Meadows, IL Leased
820 N. Western Ave., Chicago, IL Owned
5670 N. Milwaukee Ave., Chicago, IL Owned
7918 Bustleton Ave., Philadelphia, PA Owned
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Market Area Demographics
For presentation purposes, market areas have been defined as a 1.5 mile radius
around each of the Bank's branch facilities (with the two Western Ave. branches
included as one branch). Data for each demographic element is aggregated for the
market area around each branch and displayed in comparison to the other markets.
The Bank's four market areas are defined as follows (note that only portions of
the communities/towns may be included in the radius markets):
FIGURE 29 - POPULATION & HOUSEHOLD DEMOGRAPHICS
[GRAPHIC OMITTED]
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Market Area Deposit Characteristics
CHICAGO - N. WESTERN AVE. MARKET AREA
The following table illustrates that there is a moderate level of
competition for deposits in this market area, with 8 institutions
operating 9 active branch offices competing for $752.3 million in
deposits. This has been a stable market with no branch closures and one
new entrant.
Total deposits in the market have decreased by 0.33% in this market
over the last three years. The Bank had a market share of 19.31% at
June 30, 1995 and has experienced a decrease of 1.16% in deposits over
the last three years.
FIGURE 30 - DEPOSIT TRENDS AND MARKET SHARE TABLE
($ in 000's)
[GRAPHIC OMITTED]
Source: FDIC, data
CHICAGO - N. MILWAUKEE AVE. MARKET AREA
The following table illustrates that there is a high level of
competition for deposits in this market area, with 12 institutions
operating 16 active branch offices competing for $1.4 billion in
deposits. This has been a stable market with one new entrant and no
branch closures.
Total deposits have increased by 4.98% over the last three years. The
Bank had a market share of 0.50% at June 30, 1995 and entered the
market in 1994.
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FIGURE 31 - DEPOSIT TRENDS AND MARKET SHARE TABLE
($ in 000's)
[GRAPHIC OMITTED]
Source: FDIC, data
CHICAGO - ROLLING MEADOWS MARKET AREA
The following table illustrates that there is a moderate level of
competition for deposits in this immediate market area, with 8
institutions operating 10 active branch offices competing for $470.8
million in deposits. This has been a stable market with two new
entrants and one branch closure.
Total deposits have increased by 20.75% over the last three years. The
Bank had market share of 2.57% at June 30, 1995, and has experienced a
growth in deposits of 11.01%.
FIGURE 32 - DEPOSIT TRENDS AND MARKET SHARE TABLE
($ in 000's)
[GRAPHIC OMITTED]
Source: FDIC, data
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CHICAGO - PHILADELPHIA MARKET AREA
This table illustrates that there is a high level of competition for
deposits in this immediate market area, with 10 institutions operating
20 active branch offices competing for $1.4 billion in deposits. This
has been a declining market with 1 new entrant and 4 branch closures.
As the following table illustrates, total deposits have decreased by
7.87% over the last three years. The Bank had market share of 2.96% at
June 30, 1995. The Bank's branch efficiency ratio of 19.71% is below
the 100% guideline.
FIGURE 33 - DEPOSIT TRENDS AND MARKET SHARE TABLE
($ in 000's)
[GRAPHIC OMITTED]
Source: FDIC, data
<PAGE>
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3. Comparisons With Publicly Traded Thrifts
Introduction
This chapter presents an analysis of the Bank's operations against a Comparable
Group of publicly traded savings institutions. The Comparable Group ("Comparable
Group") was selected from a universe of 421 public thrifts as of July 10, 1997.
The Comparable Group was selected based upon similarity of characteristics to
the Bank. The Comparable Group multiples provide the basis for the fair market
valuation of the Bank. Factors that influence the Bank's value such as balance
sheet structure and size, profitability, income and expense trends, capital
levels, credit risk, interest rate risk and recent operating results can be
measured against the Comparable Group. The Comparable Group current market
pricing, coupled with the appropriate adjustments for differences between the
Bank and the Comparable Group, will then be utilized as the basis for the
pro-forma valuation of the Bank to-be-issued common stock.
Selection Screens
The selection screens utilized to identify possible Comparables from the list of
421 public thrifts at July 10, 1997 included:
1. The institution had to be traded on either the AMEX or NASDAQ to ensure
liquidity. This eliminated tightly held and "pink sheet" organizations who
lack liquidity.
2. The IPO date had to be on or before March 31, 1996, eliminating any new
conversions.
3. The total asset size had to be greater than or equal to $200 million and
less than or equal to $350 million.
4. The Conversion had to be a standard conversion.
5. The institution had to be located in Illinois, Indiana, Minnesota,
Missouri, or Wisconsin.
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Utilizing these screens, the 421 possibilities were narrowed down to 15
candidates. After scanning these candidates the following 5 institutions were
eliminated from the Comparable Group for the reasons shown:
[GRAPHIC OMITTED]
This resulted in a Comparable Group of 10 institutions.
[GRAPHIC OMITTED]
Selection Criteria
To be eligible for selection to the Comparable Group, thrifts had to be publicly
traded on either the American Stock Exchange or traded on the national
over-the-counter ("OTC") markets listed on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") System. Each company selected
is a member of one of the exchanges listed above.
<PAGE>
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Also excluded from the Comparable Group were institutions that were pending
mergers or acquisitions along with companies whose prices appear to be distorted
by speculative factors or unusual operating conditions. Finally, institutions
that completed their conversions within the last year were also excluded as the
earnings of newly converted institutions do not reflect a full years benefit
from the reinvestment of proceeds, and thus the price/earnings multiples and
return on equity measures for these institutions tend to be skewed upward and
downward respectively.
In an ideal world, all of the Comparable Group would contain the exact
characteristics of the Bank. The goal of the selection criteria process is to
find those institutions that most closely match those of the Bank. None of the
Comparables selected will be exact clones of the Bank.
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The members of the Comparable Group were selected based upon the following
criteria:
1. Liquidity of the issue
2. Asset size
3. Profitability
4. Capital level
5. Asset mix
6. Operating strategy
7. Date of conversion
1. Liquidity of the -- Issue The existence of an active and regular trading
market for a stock is critical to the reliability of share price data. Weak or
thinly traded stocks are questionable due to an irregular frequency of trades or
highly varied trading prices. Thinly traded stocks also tend to exhibit a very
wide bid/ask range. As such, companies exhibiting thin liquidity were excluded
from the selection. Also, institutions involved in an acquisition and/or
companies with market prices that appear to be influenced by announced or
rumored acquisitions have been excluded as the stock prices could be either
artificially high or low. For selection of the Comparable Group, only those
institutions listed on AMEX or NASDAQ were selected. Nine of the members of the
Comparable Group are listed on NASDAQ and one is listed on AMEX.
2. Asset size -- The Comparable Group should have a similar asset size to the
Bank. Large institutions are not appropriate for the peer group due to a more
extensive branch network, greater financial strength, more access to diverse
markets and more capacity in terms of infrastructure. The Comparable Group
ranged from $201.9 million to $342.4 million in total assets. The Bank's asset
size was $260.0 million as of April 30, 1997.
3. Profitability -- The Comparable Group should have similar financial
conditions and recent earnings that are comparable to the Bank. They should show
a comparable return on equity and return on assets measures. As such, the
Comparable Group have ROAs averaging 0.96% and ROEs averaging 8.14% for the most
recent quarter available. The Comparable Group profitability measures had a
dispersion about the mean for the ROA measure ranging from a low of 0.46% to a
high of 1.46% while the ROE measure ranged from a low of 5.23% to a high of
10.91%. The Bank had an annualized ROA of 0.88% and ROE of 7.65% for the four
month period ending April 30, 1997.
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4. Capital level -- The Comparable Group should have a capital level similar to
the Bank's. Capital is important in that it is a determinant of asset size and
regulatory rating. Institutions with capital in a similar range as the Bank were
selected. The average equity to assets ratio for the Comparable Group was 12.06%
with a high of 15.57% and a low of 6.30%. At April 30, 1997, the Bank had an
equity to assets ratio of 11.63%.
5. Asset Mix -- The asset mix is very important in the selection criteria for
Comparables. At April 30, 1997, the Bank had a total net loan to asset ratio of
63.81%. The average loan to asset ratio for the Comparables was 74.43%, ranging
from a low of 55.61% to a high of 90.00%.
6. Operating strategy -- An institution's operating characteristics are
important because they determine future performance. They also affect expected
rates of return and investor's general perception of the quality, risk and
attractiveness of a given company. Specific operating characteristics include
profitability, balance sheet growth, asset quality, capitalization, and
non-financial factors such as management strategies and lines of business.
7. Date of conversion -- Recent conversions, those completed after March 31,
1996, were excluded since the earnings of a newly converted institution do not
reflect a full year's benefits of reinvestment of conversion proceeds.
Additionally, new issues tend to trade at a discount to the market averages.
Comparable Group Profiles
o Capital Savings Bancorp Inc. CAPS is a SAIF insured institution
that operates 7 offices and is headquartered in Jefferson City,
Missouri. CAPS had the highest reserve to nonperforming loan
ratio, 234.98%, and return on equity ratio, 10.91%, of the
Comparable Group. CAPS was one of the eight Comparables that had
no intangibles. CAPS was included in the Comparable Group based
on its balance sheet mix, and capital, profitability, and income
statement ratios.
o 1st Bancorp. FBCV is a SAIF insured, Indiana institution that
operates 1 branch. FBCV had the highest interest expense to
average assets, 4.99%, efficiency ratio, 84.12%, overhead ratio,
81.64%, and deposit growth rate, 34.88%. HBBI was included in the
Comparable Group based on its loan to asset, capital, and
profitability ratios.
o Home Bancorp. HBFW is a SAIF insured institution that operates 9
branches and has its headquarters in Fort Wayne, Indiana. HBFW
had no borrowings, no intangibles, and no nonperforming assets.
It was selected as a Comparable based on its balance sheet mix,
and profitability and income statement ratios.
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o HomeCorp Inc. HMCI, a Rockford, Illinois institution with 9
branches, is a SAIF insured institution. HMCI was one of two
members of the Comparable Group that paid no dividends. HMCI had
the highest deposit to asset ratio, 92.31%, nonperforming asset
to asset ratio, 3.25%, nonperforming assets to equity ratio,
51.58%, noninterest income to average assets, 0.64%, and
noninterest expense to average assets ratios, 2.75%, and lowest
return on average assets, 0.46%, and capital ratios. HMCI was
included in the Comparable Group based on its balance sheet mix,
return on equity, and net interest margin.
o Kankakee Bancorp Inc. KNK is a SAIF insured institution with 9
branches located in Kankakee, Illinois and is the largest member
of the Comparable Group with $342.4 million in assets. KNK was
the only member of the Comparable Group that trades on the AMSE.
KNK had the highest intangible assets to equity, 6.39%, and
reserves to loans, 1.01%, ratios, and the lowest level of loans
to deposits, 83.19%, asset growth, (9.43%), and loan growth,
(8.16%), of the Comparable Group. KNK was included with the
Comparable Group based on its balance sheet mix, and capital,
profitability, and income statement ratios.
o MBLA Financial Corp. MBLF is a SAIF insured institution that
operates 2 offices in Macon, Missouri. MBLF had the highest
borrowings to assets, 39.05%, and total risk based capital,
36.14%, ratios in the Comparable Group. MBLF was included in the
Comparable Group based on its loans to assets, equity to assets,
nonperforming loans to loans, and profitability ratios.
o MFB Corp. MFBC is a SAIF insured thrift that operates 4 branches
in Mishawaka, Indiana. MFBC had the highest core capital ratio,
13.84%, and asset growth, 18.48%, and loan growth, 20.53%, rates
in the Comparable Group. MFBC had no nonperforming assets. MFBC
was selected based on its balance sheet mix, and profitability
and income statement ratios.
o Peoples Bancorp. PFDC is a SAIF insured thrift that operates 6
offices in Auburn, Indiana. PFDC had no intangibles. PFDC had the
highest return on average assets, 1.46%, net interest margin,
3.62%, and dividend yield, 2.67%, of the Comparable Group. PFDC
was selected based on its balance sheet mix, asset quality, and
income statement ratios.
o Wells Financial Corp. WEFC is a SAIF insured institution that
operates 7 branches in Wells, Minnesota. WEFC paid no dividends.
WEFC had the highest loans to deposits, 125.36%, and loans to
assets, 90.00%, ratios, and the lowest total assets, $201.9
million, in the Comparable Group. WEFC was selected based on its
capital, profitability, and income statement ratios.
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o Westco Bancorp. WCBI is a SAIF insured institution that operates
1 branch in Westchester, Illinois. WCBI had the highest equity to
assets, 15.57%, nonperforming loans to loans, 1.10%, and dividend
payout, 44.63%, ratios in the Comparable Group. WCBI had no
borrowings or intangibles. WCBI was included in the Comparable
Group based on its balance sheet mix and income statement ratios.
All data presented in figures 34 through 44 is from SNL Securities utilizing the
most recent quarter for balance sheet and income statement related items. All
data for the Bank is from the prospectus or the audited financials. The market
pricing data for the Comparables is as of July 10, 1997. Nonperforming loans and
nonperforming assets, as defined by SNL Securities, do not include loans
delinquent over 90 days and still accruing. This differs from the nonperforming
numbers reported in Chapter 2 of this document, which are based on the offering
prospectus.
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FIGURE 34 - KEY FINANCIAL INDICATORS
The Bank and the Comparable Group
Comparable Group
The Bank at Quarter Average (Most
April 30, 1997 Recent Quarter)
-------------- ---------------
Balance Sheet Data
- ------------------
Gross Loans to Deposits ................. 76.53% 103.21%
Total Net Loans to Assets ............... 63.81% 74.43%
Deposits to Assets ...................... 84.23% 73.75%
Borrowed Funds to Assets ................ 2.88% 13.06%
Balance Sheet Growth
- --------------------
Asset Growth Rate ....................... 2.19% 3.97%
Loan Growth Rate ........................ 4.71% 4.70%
Deposit Growth Rate ..................... (0.71)% 9.04%
Capital
- -------
Equity to Assets ........................ 11.63% 12.06%
Tangible Equity to Assets ............... 11.40% 11.98%
Intangible Assets to Equity ............. 1.61% 0.86%
Regulatory Core Capital to Assets ....... 11.40% 10.51%
Equity + Reserves to Assets ............. 12.16% 12.41%
Total Capital to Risk Adjusted Assets ... 24.40% 22.65%
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The Bank Comparable Group
-------- ----------------
Asset Quality
- -------------
Non-Performing Loans to Loans ..................... 0.51% 0.45%
Reserves to Non-Performing Loans .................. 196.46% 96.65%
Non-Performing Assets to Assets ................... 0.33% 0.64%
Non-Performing Assets to Equity ................... 2.83% 7.90%
Reserves to Loans ................................. 0.99% 0.49%
Reserves to Non-Performing Assets + 90 Days Del ... 73.78% 156.91%
Profitability
- -------------
Return on Average Assets .......................... 0.88% 0.96%
Return on Average Equity .......................... 7.65% 8.14%
Income Statement
- ----------------
Net Interest Margin ............................... 3.96% 3.10%
Interest Income to Average Assets ................. 7.51% 7.33%
Interest Expense to Average Assets ................ 3.72% 4.31%
Net Interest Income to Average Assets ............. 3.79% 3.02%
Noninterest Income to Average Assets .............. 0.23% 0.32%
Noninterest Expense to Average Assets ............. 1.92% 1.84%
Efficiency Ratio .................................. 47.72% 54.81%
Overhead Ratio .................................... 44.58% 51.08%
Source: The Bank Offering Prospectus, FinPro calculations and SNL Securities
Note: All of the Bank data is for the four month period ending April 30, 1997
and annualized where appropriate.
Note: All of the Comparable data is as of the most recent quarter.
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Corporate Data
FIGURE 35 - COMPARABLE CORPORATE DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Key Financial Data
Selected balance sheet ratios for the Comparable Group are shown in the
following table:
FIGURE 36 - COMPARABLE KEY FINANCIAL DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Capital Data
FIGURE 37 - COMPARABLE CAPITAL DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Asset Quality Data
FIGURE 38 - COMPARABLE ASSET QUALITY DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Profitability Data
FIGURE 39 - COMPARABLE PROFITABILITY DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Income Statement Data
FIGURE 40 - COMPARABLE INCOME STATEMENT DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Growth Data
FIGURE 41 - COMPARABLE GROWTH DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Market Capitalization Data
FIGURE 42 - COMPARABLE MARKET CAPITALIZATION DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Dividend Data
FIGURE 43 - COMPARABLE DIVIDEND DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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Pricing Data
FIGURE 44 - COMPARABLE PRICING DATA
[GRAPHIC OMITTED]
Source: SNL Securities
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4. Market Value Determination
Introduction
The estimated pro-forma market value of the Bank, along with certain adjustments
to its value relative to market values for the Comparable Group are delineated
in this section. The adjustments delineated in this section are made from
potential investors' viewpoints. A potential investor includes depositors
holding subscription rights and unrelated parties who may purchase stock in the
community offering and who are assumed to be aware of all relevant and necessary
facts as they pertain to the value of the Bank relative to other publicly traded
thrift institutions and relative to alternative investment opportunities.
There are numerous criteria on which the market value adjustments are based, but
the major ones utilized for purposes of this report include:
o Financial Strength
o Earnings Quality, Predictability and Growth
o Market Area
o Management
o Dividends
o Liquidity of the Issue
o Subscription Interest
o Recent Regulatory Matters
o Market for Seasoned Thrift Stocks
o Acquisition Market
After identifying the adjustments that should be made to market value, the
pro-forma market value for the Bank is computed and adjusted. The estimated
pro-forma market value for the Bank is then compared with the market valuation
ratios of the Comparable Group, recently converted public thrifts and the
aggregate ratios for all public thrifts.
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Financial Strength
The financial strength of an institution is an important market value
determinant, as the investment community considers such factors as bank
liquidity, capitalization, asset composition, funding mix, intangible levels and
interest rate risk in assessing the attractiveness of investing in the common
stock of a thrift. Following is a synopsis of the key financial elements of the
Bank measured against the Comparable Group. The numbers utilized for the Bank in
this comparison were on a pro-forma basis.
Liquidity - The liquidity of the Bank and the Comparable Group appear
similar and were sufficient to meet all regulatory guidelines.
Capitalization - The Comparable Group's average equity to assets ratio
of 12.06% is consistent with the Bank's ratio of 11.63%.
Asset Composition - The Bank's net loan to asset ratio of 63.81% is
lower than the average for the Comparable Group of 74.43%. Management
anticipates holding this current ratio.
Asset Quality - The Bank's ALLL to loans ratio of 0.99% is double that
of the Comparable Group's 0.49%. However, due to the large amount, $1.4
million, of loans delinquent more than 90 days and still accruing, the
Bank's ALLL to nonperforming assets + 90 days delinquent ratio of
73.78% is half that of the Comparable Group's 156.91%.
Funding Mix - The Bank is funded through deposits, borrowings, and
retained earnings. The Comparable Group had 13.06% of its funding base
from borrowings as compared to the Bank's 2.88%. The low level of
borrowings provides additional funding flexibility when weighted to the
Comparable Group.
Intangible Levels - One of the most important factors influencing
market values is the level of intangibles that an institution carries
on its books. Thrifts trade more on tangible book than on book. The
Bank had $332 thousand of intangibles on its books at April 30, 1997.
Of the Comparable Group, two had intangibles. As such, the Bank had a
higher intangible assets to equity ratio than the Comparable Group's
and a lower tangible equity to assets ratio than the Comparable
Group's.
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Interest Rate Risk - The Bank has an average level of interest rate
risk.
Based on these factors, the Bank's market value should not be adjusted in
comparison to the Comparable Group for these measures.
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Earnings Quality, Predictability and Growth
The earnings quality, predictability and growth are critical components in the
establishment of market values for thrifts. Thrift earnings are primarily a
function of:
o net interest income
o loan loss provision
o non-interest income
o non-interest expense
The quality and predictability of earnings is dependent on both internal and
external factors. Some internal factors include the mix of the balance sheet,
the interest rate sensitivity of the balance sheet, the asset quality, and the
infrastructure in place to deliver the assets and liabilities to the public.
External factors include the competitive market for both assets and liabilities,
the global interest rate scenario, local economic factors and regulatory issues.
Each of these factors can influence the earnings of an institution, and each of
these factors is volatile. Investors prefer stability and consistency. As such,
solid, consistent earnings are preferred to high but risky earnings. Investors
also prefer earnings to be diversified and not entirely dependent on interest
income.
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The Bank has been declining since December 31, 1994. Net income for the year
ending December 31, 1996 was down dramatically from the previous year due to the
following expenses:
o $2.5 million contribution to the Heritage Foundation of First
Security Federal Savings Bank, Inc.;
o $1.3 million one-time SAIF assessment.
FIGURE 45 - NET INCOME CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
Note: Excluding the one time expenses, net income for 1996 would be, on a tax
adjusted basis, $2.7 million.
Note: April 1997 data is for the four month period and is not annualized.
The annualized 1997 net income would be $2.3 million.
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The Bank's net interest spread and margin has been declining since December 31,
1994.
FIGURE 46 - SPREAD AND MARGIN CHART
[GRAPHIC OMITTED]
Source: Offering Prospectus
The Bank has been posting loan loss provisions sufficient to cover period
charge-offs and to maintain reserve ratios. At April 30, 1997, the Bank had an
allowance for loan and lease losses (ALLL) to total loans ratio of 0.99%, which
is double that of the Comparable Group.
The Bank has generated less non-interest income than the Comparable Group. Using
the annualized four month period ended April 30, 1997, the Bank had 0.23% of
non-interest income to average assets compared to the Comparable average of
0.32%.
For the four month period ended April 30, 1997, the Bank had an annualized
non-interest expense to average assets of 1.92% which was slightly greater than
the 1.84% average of the Comparable Group.
Currently, investors are focusing on earnings sustainability as the interest
rate volatility has caused wide variation in income levels. With the intense
competition for both assets and deposits, banks can not easily replace lost
spread and margin with balance sheet growth. Additionally, the lower market
values of most thrifts relative to banks makes acquisitions more difficult.
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First Security has experienced a decline in its asset growth rate, in its spread
and margin, and in its net income. The Bank's operating expenses are growing
faster than its assets. In addition, as a percent of assets the Bank's
non-interest income is less than the Comparable Group and its non-interest
expense is greater. Therefore, the market value for earnings is adjusted
slightly downward.
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Market Area
The market area that an institution serves has a significant impact on value, as
future success is interrelated with the economic, demographic and competitive
aspects of the market. Specifics on the Bank's market were delineated in Section
2 - Market Area Analysis.
Two of the Bank's markets - Chicago - N. Western Ave. and Philadelphia - are
experiencing deposit runoff. While the other two markets - Chicago - Milwaukee
Avenue and Rolling Meadows have experienced modest deposit growth.
Population and households have declined in three of the four markets with only
Rolling Meadows experiencing growth.
The growth in the two of the markets offsets the decline in the other two
markets, therefore, the valuation is not adjusted.
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Management
The Bank has developed a good management team with considerable banking
experience and length of service with the bank.
The Board is active and oversees and advises on all key strategic and policy
decisions. The organization chart appears reasonable for an institution of the
Bank's size and complexity.
As such, no adjustment appears to be warranted for this factor.
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Dividends
Historically, thrifts typically have not established dividend policies
immediately at or after conversion to stock ownership. Rather, newly converted
institutions, in general, have preferred to establish an earnings track record,
fully invest the conversion proceeds, and allow for seasoning of the stock
before establishing a dividend policy. In the late 1980's and early 1990's
however, there has been a tendency toward initiating dividend policies
concurrent with the conversion as a means of increasing the attractiveness of
the issue and to utilize the proceeds. Particularly as a result of the Savings
and Loan negative publicity, many thrifts felt the need to provide the
additional enticement of a dividend to attract more investors.
The last few years have seen yet another shift away from dividend policies
concurrent with conversion. Recent issues have been fully or over subscribing
without the need for the additional enticement of dividends. After conversion is
another issue however. Recent pressures on ROE and on internal rate of returns
to investors has prompted the industry toward cash dividends. This trend is
exacerbated by the lack of growth potential. Typically, when institutions are in
a growth mode, they issue stock dividends or do not declare a dividend. When
growth is stunted, these institutions shift toward reducing equity levels and
thus utilize cash dividends as a tool in this regard.
Eight of the ten comparable institutions had declared dividends. The average
dividend payout ratio for the Comparable Group was 28.94%, ranging from a high
of 44.63% to a low of 0%.
The Bank will have the earnings and capital levels to afford to pay dividends.
As such, no adjustment is indicated for this factor.
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Liquidity of the Issue
The Comparable Group is by definition composed only of companies that trade in
the public markets with nine of the Comparables trading on NASDAQ and one on
AMSE. Typically, the number of shares outstanding and the market capitalization
provides an indication of how much liquidity there will be in a given stock. The
actual liquidity can be measured by volume traded over a given period of time.
The market capitalization values of the Comparable Group range from a low of
$21.8 million to a high of $66.4 million with an average market capitalization
of $38.9 million. The Bank expects to have $66.2 million of market capital at
the midpoint on a pro-forma basis.
Based on the comparison with the Comparable Group and the above data, no
adjustment appears warranted.
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Subscription Interest
The outcome of subscription offerings has been, historically, difficult to
predict. Since 1992, however, the conversions have experienced robust
subscription interest with the exception of late 1994 when the pricing multiples
were high. During late 1994, many subscriptions had the need to resolicit due to
lack of professional investor demand. During 1995, the investor demand returned
and the subscription interest increased, primarily the result of lower market
multiples. The vast majority of recent conversions have oversubscribed and gone
off at the maximum or super-maximum. However, there were some offerings in May
and June 1996 that went off at or below the midpoint, indicating a possible
shift away from interest in thrift public offerings at that time.
Of more importance is the general strength of the aftermarket. Thrift stock
prices have soared upwards in recent months (see Figure 47) and is showing
strength across the board. Additionally, as shown in Exhibit 7, the most recent
conversions (within the last 3 months) have demonstrated a strong price
appreciation.
As such, an upward adjustment for subscription interest is warranted at this
time.
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Recent Regulatory Matters
As a result of large after-market price increases of conversions during 1993 and
early 1994, the regulatory agencies have issued guidelines on appraisals for
conversions. The regulators publicly indicated that only modest immediate
after-market price increases are appropriate for converting institutions. The
guidelines issued November 22, 1994, indicate that the reasonableness and
adequacy of an appraisal will be partially judged by the immediate price
movement of the conversion stock in the after-market, using a very short time
frame of the second day of trading following closing. The guidelines further
discuss that the average price appreciation for all IPOs has been between 10 and
15%, which was deemed to be too high.
At around the same time period, IPO pricing was elevated on a book basis and
IPOs in late 1994 did not experience much appreciation. In fact, numerous IPOs
actually depreciated. 1995 brought back lower premiums to book but they have
been rising throughout 1996 to approximately the same levels as late 1994. 1997
has continued the trend with IPO's popping over 30% on average, for the first
day of trading.
The price is adjusted downward for this factor due to recent regulatory
decisions limiting the amount of stock repurchases and the continued thrift
charter uncertainty.
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Market for Seasoned Thrift Stocks
Data for all public thrifts as of July 10, 1997 is provided in Exhibit 5. A
common measure utilized as a proxy for the performance of the thrift industry is
the SNL thrift index graphically shown below and tabularly shown on the
following page:
FIGURE 47- SNL THRIFT INDEX CHART
[GRAPHIC OMITTED]
Source: SNL Securities
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FIGURE 48 - HISTORICAL SNL INDEX
[GRAPHIC OMITTED]
Source: SNL Securities
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FIGURE 49 - EQUITY INDICES
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
As the Figures 47 and 48 illustrate, the performance of the SNL index has been
robust through 1992, 1993, 1994 and 1995. The dip in the index, occurring in
late 1994, was the product of the interest rate rise during that period along
with the overall uneasiness in the stock market in general. The rate scenario
covering the same period as the SNL index can be seen in the chart on the
following page.
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FIGURE 50 - HISTORICAL RATES
[GRAPHIC OMITTED]
Source: Prudential Bache Securities
As the graph demonstrates, the rate rise in late 1994 correlates closely to the
fall in thrift prices. The drop in rates in 1995 was one of the primary drivers
of the rapid rise in the SNL index. During 1996, rates increased slightly and
then remained stable, fueling the rise in the conversion prices. 1997 has seen a
continuation of this trend, with the average IPO pricing at 70.9%, 71.5%, and
72.3% of book value for the first, second, and third quarters of 1997
respectively.
Thrift pricing in general was robust in 1995 due to the falling interest rates,
the industry consolidation and renewed earnings. Contrasting this view, in late
1994 investors faced shrinking spreads and margins due to rising rates and
consolidation that was tailing off and slowing down. The blockbuster level of
consolidations have led many investors to think that all institutions are fair
game for acquisitions and prices have risen accordingly.
As Figure 49 shows, the SNL index has risen at a slower pace than the stock
market (using DJIA and S&P as proxies).
The average current price to book multiple for all standard conversions that
have taken place since July 1, 1996 is 108.87%; the price to earnings multiple
is not available (see Exhibit 7).
As such, a slight downward adjustment for this measure is warranted.
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Acquisition Market
The level of deals in 1997 is below that of 1996, but the second quarter did
increase modestly from the first quarter's level.
FIGURE 51 - DEALS FOR LAST FIVE QUARTERS
[GRAPHIC OMITTED]
Source: SNL Securities
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From 1994 through July 1997, thrift deal prices remained high. As illustrated by
the following graphs and tables, thrift deal prices as a multiple of book value
continue to climb through July 10, 1997, for all thrifts, thrifts in the Midwest
region, and similar deal size thrifts. Price to earnings for all three segments
rose as did price to assets and price to deposits.
FIGURE 52 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO BOOK
[GRAPHIC OMITTED]
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FIGURE 53 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO TANGIBLE BOOK
[GRAPHIC OMITTED]
FIGURE 54 - THRIFT ACQUISITION MULTIPLES, PRICE TO EARNINGS
[GRAPHIC OMITTED]
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FIGURE 55 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO ASSETS
[GRAPHIC OMITTED]
FIGURE 56 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO DEPOSITS
[GRAPHIC OMITTED]
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 73
================================================================================
FIGURE 57 - DEAL MULTIPLES
[GRAPHIC OMITTED]
Currently there is one local pending thrift acquisition announced, Standard
Financial by TCF Financial Corp. The acquisition multiples associated with all
deals are shown below. Additionally, one merger of equals, Liberty Bancorp and
Hinsdale Financial Corp closed recently.
FIGURE 58 - ILLINOIS THRIFT ACQUISITION TABLE
At Announcement Offer Divided By
--------------------------------
PENDING Book Value LTM EPS
- ------- ---------- -------
Standard Financial 151 33.3
Pending Merger Average 168 24.6
COMPLETED
- ---------
Completed Merger Average 165 32.1
Source: SNL Securities
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 74
================================================================================
A downward adjustment is warranted for this factor at time of conversion, since
new conversions are not readily available for acquisition for well over one year
from the date of conversion and since the market prices of the Comparables
already have this acquisition premium built in their prices.
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 75
================================================================================
Adjustments to Value
Overall, FinPro believes that the Bank pro-forma market value should be
discounted relative to the Comparable Group, reflecting the following
adjustments.
Key Valuation Parameters Valuation Adjustment
- ------------------------ --------------------
Financial Strength No Adjustment
Earnings Quality Slightly Downward
Market Area No Adjustment
Management No Adjustment
Dividends No Adjustment
Liquidity of the Issue No Adjustment
Subscription Interest Upward
Recent Regulatory Matters Slightly Downward
Market for Seasoned Thrift Stocks Slightly Downward
Acquisition Market Downward
As such, and as a result of all the factors discussed, a full offering discount
in the 40% - 45% range from the average trading values of the comparable
companies appears to be reasonable. This is particularly true as these numbers
represent a modest discount to book value for recent standard conversions.
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 76
================================================================================
Valuation Approach
In applying the accepted valuation methodology promulgated by the regulators,
i.e., the pro-forma market value approach, four key pricing multiples were
considered. The four multiples include:
Price to earnings ("P/E")
Price to tangible book value ("P/TB")
Price to book value ("P/B")
Price to assets ("P/A")
All of the approaches were calculated on a pro-forma basis including the effects
of the conversion proceeds. All of the assumptions utilized are presented in
Exhibits 8 and 9.
To ascertain the pro-forma estimated market value of the Bank, the market
multiples for the Comparable Group, all publicly traded thrifts and the recent
(1996 to date) standard conversion group were assessed.
Since thrift earnings in general have had a high degree of volatility over the
past decade, the P/B approach has gained in importance and is utilized
frequently as the benchmark for market value. It is interesting to note that the
P/B approach is more of a benchmark than a reliable valuation technique. A
better approach is the P/TB approach. In general, investors tend to price
financial institutions on a tangible book basis, because it incorporates the P/B
approach adjusted for intangibles. Recently, the P/E approach has regained favor
among investors.
As such, in estimating the market value for the Bank, the P/TB was weighted
higher than the P/B approach. Additionally, the P/E approach was given equal
weighting to the P/TB approach as investors rely on the earnings stream for
investment decisions going forward. The P/A ratio was not given much weight in
the valuation process
In terms of the market multiples, most weight was given to the Comparable Group
and the recent (1996 to date) standard conversions. Less weight was ascribed to
all public thrifts and all Illinois thrifts. The multiples for the Comparable
Group, all publicly traded thrifts, and Illinois publicly traded thrifts are
shown in Exhibit 6.
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 77
================================================================================
Based upon the approximately 40% discount defined in the section above, the Bank
pricing at the midpoint is estimated to be $41,170,000. Based upon a range below
and above the midpoint value, the relative values are $34,990,000 at the minimum
and $47,350,000 at the maximum respectively. At the supermaximum of the range
the offering value would be $54,450,000.
At the various levels of the estimated value range, the offering would result in
the following offering data:
FIGURE 59 - VALUE RANGE OFFERING DATA
[GRAPHIC OMITTED]
Source: FinPro Inc. Proforma Model
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 78
================================================================================
This equates to the following multiples:
FIGURE 60 - COMPARABLE PRICING MULTIPLES
[GRAPHIC OMITTED]
Source: FinPro Calculations
FIGURE 61 - RECENT STANDARD CONVERSION MULTIPLES
[GRAPHIC OMITTED]
Source: FinPro Calculations
As the tables above demonstrate, a discount is applied to the Bank relative to
the Comparable Group on price to earnings, price to book, and price to tangible
book basis and at a premium on a price to assets basis. In comparison to the
recent standard conversions the Bank is priced at a discount on all bases.
FIGURE 62 - ADJUSTED SUPERMAX TO RECENT CONVERSION COMPARISON
[GRAPHIC OMITTED]
Source: FinPro Calculations
The price to earnings discounts in Figures 60 and 61 are magnified due to the
one time SAIF assessment. The assessment is included in the Comparable Group's
and Recent Conversion's multiples but not in the Bank's, thereby overstating the
relationship. The earnings multiple for the Bank, adjusted for the one time
assessment, would be 15.87, resulting in a discount to the Comparable Group of
46.12%.
In addition, the Recent Conversion multiple is based on public offerings which
have typically subscribed at the supermaximum. Figure 62 adjusts for these
factors by including the Bank's one time SAIF expense in the pro forma earnings
and by calculating the discount or premium in comparison to the Bank's multiples
at the supermaximum.
<PAGE>
Conversion Valuation Appraisal Report Page: 1 - 79
================================================================================
Valuation Conclusion
It is, therefore, our opinion that as of July 10, 1997, the estimated pro-forma
market value of the Bank in a full offering was $41,170,000 at the midpoint of a
range with a minimum of $34,990,000 to a maximum of $47,350,000 at 15% below and
15% above the midpoint of the range respectively. Assuming an adjusted maximum
value of 15% above the maximum value, the adjusted maximum value or supermaximum
value in a full offering is $54,450,000. The stock will be issued at $10.00 per
share.
Pro-forma comparisons of the Bank's value range with the Comparable Group, all
public thrifts, Illinois public thrifts and the recent standard conversion group
is shown in Exhibits 8 and 9.
<PAGE>
Exhibit 1
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited) December 31,
April 30, -------------------------
Assets 1997 1996 1995
- ------ ---- ---- ----
<S> <C> <C> <C>
Cash and due from bank ........................................................... $ 5,104 $ 5,800 $ 17,073
Fed funds sold ................................................................... 2,000 1,500 2,100
----- ----- -----
Total cash and cash equivalents ........................................... 7,104 7,300 19,173
Time deposits in other financial institutions .................................... 200 200 200
Securities available-for-sale .................................................... 27,535 28,724 33,787
Securities held-to-maturity (fair value of $50,007 in 1997, $49,881
in 1996 and $46,115 in 1995) ................................................... 50,648 49,888 45,686
Loans, net of allowance for loan losses .......................................... 165,914 163,348 144,566
Federal Home Loan Bank stock, at cost ............................................ 1,852 1,673 1,553
Premises and equipment, net ...................................................... 3,845 3,923 4,006
Accrued interest receivable ...................................................... 1,949 1,764 1,616
Intangible assets ................................................................ 332 352 419
Real estate owned ................................................................ -- 40 499
Other assets ..................................................................... 623 903 417
--- --- ---
Total assets ............................................................... $ 260,002 $ 258,115 $ 251,922
========= ========= =========
Liabilities and Equity
- ----------------------
Liabilities
- -----------
Deposits ......................................................................... $ 218,987 $ 219,505 $ 209,387
Advance payments by borrowers for taxes and insurance ............................ 1,586 2,118 1,681
Advances from Federal Home Loan Bank ............................................. 7,500 4,000 10,000
Accrued interest payable and other liabilities ................................... 1,979 3,231 1,816
Total liabilities .......................................................... 230,052 228,854 222,884
------- ------- -------
Equity
- ------
Retained earnings ................................................................ 30,226 29,465 29,013
Net unrealized gain (loss) on securities available-for-sale ...................... (276) (204) 25
---- ---- --
Total equity ................................................................ 29,950 29,261 29,038
------ ------ ------
Total liabilities and equity ............................................... $ 260,002 $ 258,115 $ 251,922
========= ========= =========
</TABLE>
Source: Audited Financial Statements
<PAGE>
Exhibit 2
Consolidated Statements of Income
$ in 000's
<TABLE>
<CAPTION>
(Unaudited)
Four Months Ended Years Ended
April 30, December 31,
----------------- -------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Interest and dividend income:
Loans $4,653 $4,197 $13,068 $12,080 $11,118
Securities
Taxable 497 533 1,664 1,944 1,334
Tax-exempt 97 94 277 327 378
Mortgage-backed securities 1,131 1,158 3,673 2,867 2,535
Federal funds sold and others 117 142 324 432 345
------ ------ ------- ------- -------
Total interest income 6,495 6,124 19,006 17,650 15,710
Interest expense:
NOW and money market 123 122 369 377 370
Passbook savings 705 692 2,120 2,113 2,047
Certificates of deposit 2,285 2,293 6,827 6,044 3,987
Federal Home Loan Bank advances and other borrowings 107 56 178 193 180
------ ------ ------- ------- -------
Total interest expense 3,220 3,163 9,494 8,727 6,584
------ ------ ------- ------- -------
Net interest income 3,275 2,961 9,512 8,923 9,126
------ ------ ------- ------- -------
Provision for loan losses 574 42 706 136 182
------ ------ ------- ------- -------
Net interest income after provision
for loan losses 2,701 2,919 8,806 8,787 8,944
Noninterest income:
Deposit service charges 116 121 362 378 326
Insurance commissions 15 18 54 58 58
Net gain on sale and call of securities -- -- 55 24 5
Net gain (loss) on sale of real estate owned 1 (10) 50 147 --
Other income 65 65 224 249 188
------ ------ ------- ------- -------
Total noninterest income 197 194 745 856 577
Noninterest expense:
Compensation and benefits 851 726 2,411 2,370 2,043
Occupancy and equipment 225 209 678 630 610
Data processing 94 87 269 260 282
SAIF assessment -- -- 1,293 -- --
Federal insurance premiums 43 182 553 521 444
Charitable and foundation contributions 43 21 2,558 67 100
Other expense 401 295 931 842 792
------ ------ ------- ------- -------
Total noninterest expense 1,657 1,520 8,693 4,690 4,271
------ ------ ------- ------- -------
Income before income taxes 1,241 1,593 858 4,953 5,250
Income tax provision 480 603 406 1,760 1,825
------ ------ ------- ------- -------
Net income $ 761 $ 990 $ 452 $ 3,193 $ 3,425
====== ====== ======= ======= =======
</TABLE>
Source: Audited Financial Statements
<PAGE>
Exhibit 3
Consolidated Statements of Equity
<TABLE>
<CAPTION>
Unrealized
Gain (Loss)
on Securities
Retained Available-
Earnings for-Sale Total
-------- -------- -----
<S> <C> <C> <C>
Balance at January 1, 1994 $22,395 $ -- $22,395
Net income 3,425 -- 3,425
Effect of adopting SFAS No. 115, as of January 1, 1994,
net of income taxes of $189 -- 295 295
Change in valuation allowance for securities available-for-sale,
net of income taxes of $358 -- (560) (560)
------ ------ --------
Balance at December 31, 1994 25,820 (265) 25,555
Net income 3,193 -- 3,193
Reclassification of securities from held-to-maturity to
available-for-sale, net of tax of $44 -- 114 114
Change in valuation allowance for securities available-for-sale,
net of income taxes of $141 -- 176 176
------ ------ --------
Balance at December 31, 1995 29,013 25 29,038
Net income 452 -- 452
Change in valuation allowance for securities available-for-sale,
net of income taxes of $146 -- (229) (229)
------ ------ --------
Balance at December 31, 1996 29,465 (204) 29,261
Net income (unaudited) 761 -- 761
Change in valuation allowance for securities available-for-sale,
net of income taxes of $47 -- (72) (72)
------ ------ --------
Balance at April 30, 1997 (unaudited) $30,226 $(276) $ 29,950
</TABLE>
Source: Audited Financial Statements
<PAGE>
Exhibit 4
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
(Unaudited)
Four Months Ended Years Ended
April 30, December 31,
------------------- --------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income .......................................................... $ 761 $ 990 $ 452 $ 3,193 $ 3,425
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization of intangibles ......................... 121 99 358 329 268
Net amortization of securities ....................................... 36 -- (90) 138 318
Net gain on sales and calls of securities ............................ -- -- (55) (24) (5)
Provision for loan losses ............................................ 574 42 706 136 182
Net gain on real estate owned ........................................ (1) 10 (50) (79) --
Deferred loan origination fees ....................................... 2 (12) (80) (75) (118)
Federal Home Loan Bank stock dividend ................................ -- -- -- (20) --
Provision for deferred income taxes .................................. 24 -- (937) 135 212
Net change in:
Accrued interest receivable ...................................... (185) (97) (148) 119 (618)
Accrued interest payable ......................................... 465 391 (4) 217 52
Other assets ..................................................... 302 180 (141) 182 (215)
Other liabilities ................................................ (1,717) (240) 2,129 (190) 59
------ ---- ----- ---- --
Net cash provided by operating activities .............................. 382 1,363 2,140 4,061 3,560
Cash flows from investing activities:
Purchase of securities available-for-sale ............................ -- (1,985) (2,989) -- (3,973)
Purchase of securities held-to-maturity .............................. (3,598) (9,951) (20,129) (30,451) (20,131)
Proceeds from sales of securities available-for-sale ................. -- -- -- 1,504 --
Proceeds from calls and maturities of securities ..................... 1,000 5,850 15,814 20,112 2,167
Net loan originations ................................................ (3,151) (3,566) (19,548) (8,696) (16,360)
Principal payments on mortgage-backed and related securities ......... 2,872 3,519 7,965 5,916 10,436
Purchase of Federal Home Loan Bank stock ............................. (179) (120) (120) (215) (171)
Acquisition of Ukrainian Federal Savings and Loan
Association branch, net of cash .................................. -- -- -- -- 8,308
Net change in federal funds purchased ................................ -- -- -- -- (2,000)
Property and equipment expenditures .................................. (15) (24) (189) (119) (759)
Real estate owned expenditures ....................................... -- 53 (5) (44) --
Proceeds from sale of real estate owned .............................. 41 75 614 79 --
------ ------- -------- -------- --------
Net cash used in investing activities .................................. (3,030) (6,149) (18,587) (11,914) (22,483)
Cash flows from financing activities:
Net change in deposits ............................................... (516) 3,372 10,137 13,568 11,931
Net change in advance payments by borrowers
for taxes and insurance ............................................ (532) (369) 437 (342) 428
Change in advances from Federal Home Loan Bank ....................... 3,500 (7,000) (6,000) 7,000 2,000
----- ------ ------ ----- -----
Net cash provided by (used in) financing activities .................... 2,452 (3,997) 4,574 20,226 14,359
----- ------ ----- ------ ------
Net change in cash and cash equivalents ................................ (196) (8,783) (11,873) 12,373 (4,564)
Cash and cash equivalents at beginning of period ....................... 7,300 19,173 19,173 6,800 11,364
----- ------ ------ ----- ------
Cash and cash equivalents at end of period ............................. $ 7,104 $ 10,390 $ 7,300 $ 19,173 $ 6,800
======== ======== ======== ======== ========
Supplemental disclosures of cash flow information Cash
paid during the year for:
Interest ......................................................... $ 2,755 $ 2,773 $ 9,498 $ 8,510 $ 6,352
Income taxes ..................................................... 218 451 1,497 1,620 1,658
Schedule of noncash investing and financing activities
Transfer of securities from held-to-maturity to
available-for-sale .......................................... -- -- -- 20,158 --
Real estate acquired in settlement of loans ...................... -- -- 140 276 --
Purchase of branch savings bank
Fair value of assets acquired .............................. $ 13,965
Cash received .............................................. 8,308
-----
Liabilities assumed ................................. $ 22,273
- --------------
<FN>
Source: Audited Financial Statements
</FN>
</TABLE>
<PAGE>
Exhibit 5
Selected Data on all Public Thrifts
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB Private Dallas TX 227 NA SAIF Not Avail.
%CCMD Chevy Chase Bank, FSB Private Chevy Chase MD 107 NA SAIF Not Avail.
AABC Access Anytime Bancorp, Inc. NASDAQ Clovis NM 3 08/08/86 SAIF Regular
AADV Advantage Bancorp Inc. NASDAQ Kenosha WI 15 03/23/92 SAIF Regular
ABBK Abington Bancorp Inc. NASDAQ Abington MA 7 06/10/86 BIF Regular
ABCL Alliance Bancorp Inc. NASDAQ Hinsdale IL 14 07/07/92 SAIF Regular
ABCW Anchor BanCorp Wisconsin NASDAQ Madison WI 34 07/16/92 SAIF Regular
AFBC Advance Financial Bancorp NASDAQ Wellsburg WV 2 01/02/97 SAIF Regular
AFCB Affiliated Community Bancorp NASDAQ Waltham MA 11 10/19/95 SAIF Not Avail.
AFED AFSALA Bancorp Inc. NASDAQ Amsterdam NY 4 10/01/96 SAIF Regular
AFFFZ America First Financial Fund NASDAQ San Francisco CA 36 NA SAIF Not Avail.
AHCI Ambanc Holding Co. Inc. NASDAQ Amsterdam NY 9 12/27/95 BIF Regular
AHM Ahmanson & Company (H.F.) NYSE Irwindale CA 391 10/25/72 SAIF Regular
ALBC Albion Banc Corp. NASDAQ Albion NY 2 07/26/93 SAIF Regular
ALBK ALBANK Financial Corporation NASDAQ Albany NY 71 04/01/92 SAIF Regular
AMFB American Federal Bank FSB NASDAQ Greenville SC 40 01/19/89 SAIF Modified
AMFC AMB Financial Corp. NASDAQ Munster IN 4 04/01/96 SAIF Regular
ANA Acadiana Bancshares Inc. AMSE Lafayette LA 4 07/16/96 SAIF Regular
ANBK American National Bancorp NASDAQ Baltimore MD 10 10/31/95 SAIF Not Avail.
ANDB Andover Bancorp Inc. NASDAQ Andover MA 12 05/08/86 BIF Regular
ASBI Ameriana Bancorp NASDAQ New Castle IN 8 03/02/87 SAIF Regular
ASBP ASB Financial Corp. NASDAQ Portsmouth OH 1 05/11/95 SAIF Regular
ASFC Astoria Financial Corporation NASDAQ Lake Success NY 45 11/18/93 SAIF Regular
ATSB AmTrust Capital Corp. NASDAQ Peru IN 2 03/28/95 SAIF Regular
AVND Avondale Financial Corp. NASDAQ Chicago IL 5 04/07/95 SAIF Regular
BANC BankAtlantic Bancorp Inc. NASDAQ Fort Lauderdale FL 56 11/29/83 SAIF Regular
BDJI First Federal Bancorporation NASDAQ Bemidji MN 5 04/04/95 SAIF Regular
BFD BostonFed Bancorp Inc. AMSE Burlington MA 10 10/24/95 SAIF Regular
BFFC Big Foot Financial Corp. NASDAQ Long Grove IL 3 12/20/96 SAIF Regular
BFSB Bedford Bancshares Inc. NASDAQ Bedford VA 3 08/22/94 SAIF Regular
BKC American Bank of Connecticut AMSE Waterbury CT 15 12/01/81 BIF Regular
BKCO Bankers Corp. NASDAQ Perth Amboy NJ 15 03/16/90 BIF Regular
BKCT Bancorp Connecticut Inc. NASDAQ Southington CT 3 07/03/86 BIF Regular
BKUNA BankUnited Financial Corp. NASDAQ Coral Gables FL 14 12/11/85 SAIF Regular
BNKU Bank United Corp. NASDAQ Houston TX 71 08/09/96 SAIF Not Avail.
BPLS Bank Plus Corp. NASDAQ Los Angeles CA 33 NA SAIF Not Avail.
BSBC Branford Savings Bank NASDAQ Branford CT 5 11/04/86 BIF Regular
BTHL Bethel Bancorp NASDAQ Portland ME 8 08/19/87 BIF Regular
BVCC Bay View Capital Corp. NASDAQ San Mateo CA 45 05/09/86 SAIF Regular
BWFC Bank West Financial Corp. NASDAQ Grand Rapids MI 3 03/30/95 SAIF Regular
BYFC Broadway Financial Corp. NASDAQ Los Angeles CA 3 01/09/96 SAIF Regular
CAFI Camco Financial Corp. NASDAQ Cambridge OH 11 NA SAIF Not Avail.
CAPS Capital Savings Bancorp Inc. NASDAQ Jefferson City MO 7 12/29/93 SAIF Regular
CASB Cascade Financial Corp. NASDAQ Everett WA 8 09/16/92 SAIF Regular
CASH First Midwest Financial Inc. NASDAQ Storm Lake IA 12 09/20/93 SAIF Regular
CATB Catskill Financial Corp. NASDAQ Catskill NY 4 04/18/96 BIF Regular
CBCI Calumet Bancorp Inc. NASDAQ Dolton IL 5 02/20/92 SAIF Regular
CBCO CB Bancorp Inc. NASDAQ Michigan City IN 3 12/28/92 SAIF Regular
CBES CBES Bancorp Inc. NASDAQ Excelsior Springs MO 2 09/30/96 SAIF Regular
CBK Citizens First Financial Corp. AMSE Normal IL 6 05/01/96 SAIF Regular
CBNH Community Bankshares Inc. NASDAQ Concord NH 11 05/08/86 BIF Regular
CBSA Coastal Bancorp Inc. NASDAQ Houston TX 36 NA SAIF Not Avail.
CBSB Charter Financial Inc. NASDAQ Sparta IL 8 12/29/95 SAIF Not Avail.
CCFH CCF Holding Company NASDAQ Jonesboro GA 4 07/12/95 SAIF Regular
CEBK Central Co-operative Bank NASDAQ Somerville MA 8 10/24/86 BIF Regular
CENB Century Bancorp Inc. NASDAQ Thomasville NC 1 12/23/96 SAIF Regular
CENF CENFED Financial Corp. NASDAQ Pasadena CA 18 10/25/91 SAIF Regular
CFB Commercial Federal Corporation NYSE Omaha NE 107 12/31/84 SAIF Regular
CFBC Community First Banking Co. NASDAQ Carrollton GA 12 07/01/97 SAIF Regular
CFCP Coastal Financial Corp. NASDAQ Myrtle Beach SC 9 09/26/90 SAIF Regular
CFFC Community Financial Corp. NASDAQ Staunton VA 3 03/30/88 SAIF Regular
CFNC Carolina Fincorp Inc. NASDAQ Rockingham NC 4 11/25/96 SAIF Regular
CFSB CFSB Bancorp Inc. NASDAQ Lansing MI 17 06/22/90 SAIF Regular
CFTP Community Federal Bancorp NASDAQ Tupelo MS 1 03/26/96 SAIF Regular
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation AMSE Keene NH 43 02/12/87 BIF Regular
CIBI Community Investors Bancorp NASDAQ Bucyrus OH 3 02/07/95 SAIF Regular
CKFB CKF Bancorp Inc. NASDAQ Danville KY 1 01/04/95 SAIF Regular
CLAS Classic Bancshares Inc. NASDAQ Ashland KY 3 12/29/95 SAIF Regular
CMRN Cameron Financial Corp NASDAQ Cameron MO 3 04/03/95 SAIF Regular
CMSB Commonwealth Bancorp Inc. NASDAQ Norristown PA 54 06/17/96 SAIF Not Avail.
CMSV Community Savings (MHC) NASDAQ North Palm Beach FL 19 10/24/94 SAIF Mutual HC
CNIT CENIT Bancorp Inc. NASDAQ Norfolk VA 22 08/06/92 SAIF Regular
CNSB CNS Bancorp Inc. NASDAQ Jefferson City MO 5 06/12/96 SAIF Regular
CNY Carver Bancorp Inc. AMSE New York NY 7 10/25/94 SAIF Regular
COFD Collective Bancorp Inc. NASDAQ Egg Harbor City NJ 82 02/07/84 SAIF Regular
COFI Charter One Financial NASDAQ Cleveland OH 174 01/22/88 SAIF Regular
CONE Conestoga Bancorp, Inc. NASDAQ Roslyn NY 8 03/30/94 SAIF Regular
COOP Cooperative Bankshares Inc. NASDAQ Wilmington NC 17 08/21/91 SAIF Regular
CRZY Crazy Woman Creek Bancorp NASDAQ Buffalo WY 1 03/29/96 SAIF Regular
CSA Coast Savings Financial NYSE Los Angeles CA 92 12/23/85 SAIF Regular
CSBF CSB Financial Group Inc. NASDAQ Centralia IL 2 10/09/95 SAIF Regular
CTZN CitFed Bancorp Inc. NASDAQ Dayton OH 35 01/23/92 SAIF Regular
CVAL Chester Valley Bancorp Inc. NASDAQ Downingtown PA 7 03/27/87 SAIF Regular
CZF CitiSave Financial Corp AMSE Baton Rouge LA 6 07/14/95 SAIF Regular
DCBI Delphos Citizens Bancorp Inc. NASDAQ Delphos OH 1 11/21/96 SAIF Regular
DIBK Dime Financial Corp. NASDAQ Wallingford CT 11 07/09/86 BIF Regular
DIME Dime Community Bancorp Inc. NASDAQ Brooklyn NY 15 06/26/96 BIF Regular
DME Dime Bancorp Inc. NYSE New York NY 86 08/19/86 BIF Regular
DNFC D & N Financial Corp. NASDAQ Hancock MI 37 02/13/85 SAIF Regular
DSL Downey Financial Corp. NYSE Newport Beach CA 82 01/01/71 SAIF Not Avail.
EBSI Eagle Bancshares NASDAQ Tucker GA 14 04/01/86 SAIF Regular
EFBC Empire Federal Bancorp Inc. NASDAQ Livingston MT 3 01/27/97 SAIF Regular
EFBI Enterprise Federal Bancorp NASDAQ West Chester OH 5 10/17/94 SAIF Regular
EGFC Eagle Financial Corp. NASDAQ Bristol CT 29 02/03/87 SAIF Regular
EGLB Eagle BancGroup Inc. NASDAQ Bloomington IL 3 07/01/96 SAIF Regular
EIRE Emerald Isle Bancorp Inc. NASDAQ Quincy MA 8 09/08/86 BIF Regular
EMLD Emerald Financial Corp. NASDAQ Strongsville OH 14 NA SAIF Regular
EQSB Equitable Federal Savings Bank NASDAQ Wheaton MD 4 09/10/93 SAIF Supervisory
ESBK Elmira Savings Bank (The) NASDAQ Elmira NY 6 03/01/85 BIF Regular
ESX Essex Bancorp Inc. AMSE Norfolk VA 4 07/18/90 SAIF Not Avail.
ETFS East Texas Financial Services NASDAQ Tyler TX 2 01/10/95 SAIF Regular
FAB FirstFed America Bancorp Inc. AMSE Fall River MA 13 01/15/97 SAIF Regular
FBBC First Bell Bancorp Inc. NASDAQ Pittsburgh PA 7 06/29/95 SAIF Regular
FBCI Fidelity Bancorp Inc. NASDAQ Chicago IL 5 12/15/93 SAIF Regular
FBCV 1ST Bancorp NASDAQ Vincennes IN 1 04/07/87 SAIF Regular
FBER 1st Bergen Bancorp NASDAQ Wood-Ridge NJ 4 04/01/96 SAIF Regular
FBHC Fort Bend Holding Corp. NASDAQ Rosenberg TX 6 06/30/93 SAIF Regular
FBNW FirstBank Corp. NASDAQ Lewiston ID 5 07/02/97 SAIF Regular
FBSI First Bancshares Inc. NASDAQ Mountain Grove MO 6 12/22/93 SAIF Regular
FCB Falmouth Co-Operative Bank AMSE Falmouth MA 2 03/28/96 BIF Regular
FCBF FCB Financial Corp. NASDAQ Neenah WI 6 09/24/93 SAIF Regular
FCIT First Citizens Financial Corp. NASDAQ Gaithersburg MD 15 12/17/86 SAIF Regular
FCME First Coastal Corporation NASDAQ Westbrook ME 7 NA BIF Not Avail.
FDEF First Defiance Financial NASDAQ Defiance OH 9 10/02/95 SAIF Not Avail.
FED FirstFed Financial Corp. NYSE Santa Monica CA 25 12/16/83 SAIF Regular
FESX First Essex Bancorp Inc. NASDAQ Andover MA 15 08/04/87 BIF Regular
FFBA First Colorado Bancorp Inc. NASDAQ Lakewood CO 26 01/02/96 SAIF Not Avail.
FFBH First Federal Bancshares of AR NASDAQ Harrison AR 12 05/03/96 SAIF Regular
FFBI First Financial Bancorp Inc. NASDAQ Belvidere IL 2 10/04/93 SAIF Regular
FFBS FFBS BanCorp Inc. NASDAQ Columbus MS 3 07/01/93 SAIF Regular
FFBZ First Federal Bancorp Inc. NASDAQ Zanesville OH 6 07/13/92 SAIF Regular
FFCH First Financial Holdings Inc. NASDAQ Charleston SC 33 11/10/83 SAIF Regular
FFDB FirstFed Bancorp Inc. NASDAQ Bessemer AL 8 11/19/91 SAIF Regular
FFDF FFD Financial Corp. NASDAQ Dover OH 1 04/03/96 SAIF Regular
FFED Fidelity Federal Bancorp NASDAQ Evansville IN 4 08/31/87 SAIF Regular
FFES First Federal of East Hartford NASDAQ East Hartford CT 12 06/23/87 SAIF Regular
FFFC FFVA Financial Corp. NASDAQ Lynchburg VA 12 10/12/94 SAIF Regular
FFFD North Central Bancshares Inc. NASDAQ Fort Dodge IA 4 03/21/96 SAIF Not Avail.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. NASDAQ St. Cloud FL 11 10/13/88 SAIF Regular
FFFL Fidelity Bankshares Inc. (MHC) NASDAQ West Palm Beach FL 20 01/07/94 SAIF Mutual HC
FFHC First Financial Corp. NASDAQ Stevens Point WI 128 12/24/80 SAIF Regular
FFHH FSF Financial Corp. NASDAQ Hutchinson MN 11 10/07/94 SAIF Regular
FFHS First Franklin Corporation NASDAQ Cincinnati OH 7 01/26/88 SAIF Regular
FFIC Flushing Financial Corp. NASDAQ Flushing NY 7 11/21/95 BIF Regular
FFKY First Federal Financial Corp. NASDAQ Elizabethtown KY 8 07/15/87 SAIF Regular
FFLC FFLC Bancorp Inc. NASDAQ Leesburg FL 9 01/04/94 SAIF Regular
FFOH Fidelity Financial of Ohio NASDAQ Cincinnati OH 11 03/04/96 SAIF Not Avail.
FFPB First Palm Beach Bancorp Inc. NASDAQ West Palm Beach FL 40 09/29/93 SAIF Regular
FFSL First Independence Corp. NASDAQ Independence KS 2 10/08/93 SAIF Regular
FFSX First Fed SB of Siouxland(MHC) NASDAQ Sioux City IA 13 07/13/92 SAIF Mutual HC
FFWC FFW Corp. NASDAQ Wabash IN 3 04/05/93 SAIF Regular
FFWD Wood Bancorp Inc. NASDAQ Bowling Green OH 6 08/31/93 SAIF Regular
FFYF FFY Financial Corp. NASDAQ Youngstown OH 12 06/28/93 SAIF Regular
FGHC First Georgia Holding Inc. NASDAQ Brunswick GA 9 02/11/87 SAIF Regular
FIBC Financial Bancorp Inc. NASDAQ Long Island City NY 5 08/17/94 SAIF Regular
FISB First Indiana Corporation NASDAQ Indianapolis IN 26 08/02/83 SAIF Regular
FKFS First Keystone Financial NASDAQ Media PA 5 01/26/95 SAIF Regular
FKKY Frankfort First Bancorp Inc. NASDAQ Frankfort KY 3 07/10/95 SAIF Regular
FLAG FLAG Financial Corp. NASDAQ LaGrange GA 4 12/11/86 SAIF Regular
FLFC First Liberty Financial Corp. NASDAQ Macon GA 31 12/06/83 SAIF Regular
FLGS Flagstar Bancorp Inc. NASDAQ Bloomfield Hills MI 15 NA SAIF Not Avail .
FLKY First Lancaster Bancshares NASDAQ Lancaster KY 1 07/01/96 SAIF Regular
FMBD First Mutual Bancorp Inc. NASDAQ Decatur IL 12 07/05/95 SAIF Regular
FMCO FMS Financial Corporation NASDAQ Burlington NJ 18 12/14/88 SAIF Regular
FMSB First Mutual Savings Bank NASDAQ Bellevue WA 7 12/17/85 BIF Regular
FNGB First Northern Capital Corp. NASDAQ Green Bay WI 20 12/29/83 SAIF Regular
FOBC Fed One Bancorp NASDAQ Wheeling WV 9 01/19/95 SAIF Not Avail.
FPRY First Financial Bancorp NASDAQ Tallahassee FL 6 03/29/88 SAIF Regular
FRC First Republic Bancorp NYSE San Francisco CA 13 NA BIF Not Avail.
FSBI Fidelity Bancorp Inc. NASDAQ Pittsburgh PA 8 06/24/88 SAIF Regular
FSFC First Southeast Financial Corp NASDAQ Anderson SC 11 10/08/93 SAIF Regular
FSLA First Savings Bank (MHC) NASDAQ Woodbridge NJ 16 07/10/92 SAIF Mutual HC
FSNJ First Savings Bk of NJ (MHC) NASDAQ Bayonne NJ 4 01/09/95 SAIF Mutual HC
FSPG First Home Bancorp Inc. NASDAQ Pennsville NJ 10 04/20/87 SAIF Regular
FSPT FirstSpartan Financial Corp. NASDAQ Spartanburg SC 5 07/09/97 SAIF Regular
FSSB First FS&LA of San Bernardino NASDAQ San Bernardino CA 4 02/02/93 SAIF Regular
FSTC First Citizens Corp. NASDAQ Newnan GA 9 03/01/86 SAIF Regular
FTF Texarkana First Financial Corp AMSE Texarkana AR 5 07/07/95 SAIF Regular
FTFC First Federal Capital Corp. NASDAQ La Crosse WI 45 11/02/89 SAIF Regular
FTNB Fulton Bancorp Inc. NASDAQ Fulton MO 2 10/18/96 SAIF Regular
FTSB Fort Thomas Financial Corp. NASDAQ Fort Thomas KY 2 06/28/95 SAIF Regular
FWWB First SB of Washington Bancorp NASDAQ Walla Walla WA 21 11/01/95 SAIF Regular
GAF GA Financial Inc. AMSE Pittsburgh PA 13 03/26/96 SAIF Regular
GBCI Glacier Bancorp Inc. NASDAQ Kalispell MT 16 03/30/84 SAIF Regular
GDVS Greater Delaware Valley (MHC) NASDAQ Broomall PA 7 03/03/95 SAIF Mutual HC
GDW Golden West Financial NYSE Oakland CA 246 05/29/59 SAIF Not Avail.
GFCO Glenway Financial Corp. NASDAQ Cincinnati OH 5 11/30/90 SAIF Regular
GFED Guaranty Federal SB (MHC) NASDAQ Springfield MO 4 04/10/95 SAIF Mutual HC
GFSB GFS Bancorp Inc. NASDAQ Grinnell IA 1 01/06/94 SAIF Regular
GLBK Glendale Co-Operative Bank NASDAQ Everett MA 1 01/10/94 BIF Regular
GLN Glendale Federal Bank FSB NYSE Glendale CA 154 10/01/83 SAIF Regular
GOSB GSB Financial Corporation NASDAQ Goshen NY 2 07/09/97 BIF Regular
GPT GreenPoint Financial Corp. NYSE New York NY 74 01/28/94 BIF Regular
GRTR Greater New York Savings Bank NASDAQ New York NY 14 06/17/87 BIF Regular
GSBC Great Southern Bancorp Inc. NASDAQ Springfield MO 25 12/14/89 SAIF Regular
GSFC Green Street Financial Corp. NASDAQ Fayetteville NC 3 04/04/96 SAIF Regular
GSLA GS Financial Corp. NASDAQ Metairie LA 3 04/01/97 SAIF Regular
GTFN Great Financial Corporation NASDAQ Louisville KY 45 03/31/94 SAIF Regular
GTPS Great American Bancorp NASDAQ Champaign IL 3 06/30/95 SAIF Regular
GUPB GFSB Bancorp Inc. NASDAQ Gallup NM 1 06/30/95 SAIF Regular
GWBC Gateway Bancorp Inc. NASDAQ Catlettsburg KY 2 01/18/95 SAIF Regular
HALL Hallmark Capital Corp. NASDAQ West Allis WI 3 01/03/94 SAIF Regular
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. NASDAQ Fort Pierce FL 23 01/06/94 SAIF Mutual HC
HARL Harleysville Savings Bank NASDAQ Harleysville PA 4 08/04/87 SAIF Regular
HARS Harris Savings Bank (MHC) NASDAQ Harrisburg PA 32 01/25/94 SAIF Mutual HC
HAVN Haven Bancorp Inc. NASDAQ Woodhaven NY 20 09/23/93 SAIF Regular
HBBI Home Building Bancorp NASDAQ Washington IN 2 02/08/95 SAIF Regular
HBEI Home Bancorp of Elgin Inc. NASDAQ Elgin IL 5 09/27/96 SAIF Regular
HBFW Home Bancorp NASDAQ Fort Wayne IN 9 03/30/95 SAIF Regular
HBNK Highland Federal Bank FSB NASDAQ Burbank CA 8 NA SAIF Not Avail.
HBS Haywood Bancshares Inc. AMSE Waynesville NC 4 12/18/87 BIF Not Avail.
HCBB HCB Bancshares Inc. NASDAQ Camden AR 6 05/07/97 SAIF Regular
HCFC Home City Financial Corp. NASDAQ Springfield OH 1 12/30/96 SAIF Regular
HEMT HF Bancorp Inc. NASDAQ Hemet CA 19 06/30/95 SAIF Regular
HFFB Harrodsburg First Fin Bancorp NASDAQ Harrodsburg KY 2 10/04/95 SAIF Regular
HFFC HF Financial Corp. NASDAQ Sioux Falls SD 19 04/08/92 SAIF Regular
HFGI Harrington Financial Group NASDAQ Richmond IN 3 NA SAIF Not Avail.
HFNC HFNC Financial Corp. NASDAQ Charlotte NC 9 12/29/95 SAIF Regular
HFSA Hardin Bancorp Inc. NASDAQ Hardin MO 3 09/29/95 SAIF Regular
HHFC Harvest Home Financial Corp. NASDAQ Cheviot OH 3 10/10/94 SAIF Regular
HIFS Hingham Instit. for Savings NASDAQ Hingham MA 5 12/20/88 BIF Regular
HMCI HomeCorp Inc. NASDAQ Rockford IL 9 06/22/90 SAIF Regular
HMLK Hemlock Federal Financial Corp NASDAQ Oak Forest IL 3 04/02/97 SAIF Regular
HMNF HMN Financial Inc. NASDAQ Spring Valley MN 7 06/30/94 SAIF Regular
HOMF Home Federal Bancorp NASDAQ Seymour IN 16 01/23/88 SAIF Regular
HPBC Home Port Bancorp Inc. NASDAQ Nantucket MA 2 08/25/88 BIF Regular
HRBF Harbor Federal Bancorp Inc. NASDAQ Baltimore MD 9 08/12/94 SAIF Regular
HRZB Horizon Financial Corp. NASDAQ Bellingham WA 12 08/01/86 BIF Regular
HTHR Hawthorne Financial Corp. NASDAQ El Segundo CA 6 NA SAIF Not Avail.
HVFD Haverfield Corporation NASDAQ Cleveland OH 10 03/19/85 SAIF Regular
HWEN Home Financial Bancorp NASDAQ Spencer IN 1 07/02/96 SAIF Regular
HZFS Horizon Financial Svcs Corp. NASDAQ Oskaloosa IA 3 06/30/94 SAIF Regular
IBSF IBS Financial Corp. NASDAQ Cherry Hill NJ 10 10/13/94 SAIF Regular
IFSB Independence Federal Savings NASDAQ Washington DC 2 06/06/85 SAIF Regular
IFSL Indiana Federal Corporation NASDAQ Valparaiso IN 16 02/04/87 SAIF Regular
INBI Industrial Bancorp NASDAQ Bellevue OH 10 08/01/95 SAIF Regular
INCB Indiana Community Bank SB NASDAQ Lebanon IN 3 12/15/94 SAIF Regular
IPSW Ipswich Savings Bank NASDAQ Ipswich MA 5 05/26/93 BIF Regular
ISBF ISB Financial Corporation NASDAQ New Iberia LA 25 04/07/95 SAIF Regular
ITLA ITLA Capital Corp. NASDAQ La Jolla CA 9 10/24/95 BIF Not Avail.
IWBK InterWest Bancorp Inc. NASDAQ Oak Harbor WA 37 NA SAIF Not Avail.
JOAC Joachim Bancorp Inc. NASDAQ De Soto MO 1 12/28/95 SAIF Regular
JSBA Jefferson Savings Bancorp NASDAQ Ballwin MO 32 04/08/93 SAIF Regular
JSBF JSB Financial Inc. NASDAQ Lynbrook NY 13 06/27/90 BIF Regular
JXSB Jacksonville Savings Bk (MHC) NASDAQ Jacksonville IL 4 04/21/95 SAIF Mutual HC
JXVL Jacksonville Bancorp Inc. NASDAQ Jacksonville TX 6 04/01/96 SAIF Not Avail.
KFBI Klamath First Bancorp NASDAQ Klamath Falls OR 7 10/05/95 SAIF Regular
KNK Kankakee Bancorp Inc. AMSE Kankakee IL 9 01/06/93 SAIF Regular
KSAV KS Bancorp Inc. NASDAQ Kenly NC 4 12/30/93 SAIF Regular
KSBK KSB Bancorp Inc. NASDAQ Kingfield ME 8 06/24/93 BIF Regular
KYF Kentucky First Bancorp Inc. AMSE Cynthiana KY 2 08/29/95 SAIF Regular
LARK Landmark Bancshares Inc. NASDAQ Dodge City KS 5 03/28/94 SAIF Regular
LARL Laurel Capital Group Inc. NASDAQ Allison Park PA 6 02/20/87 SAIF Regular
LFBI Little Falls Bancorp Inc. NASDAQ Little Falls NJ 6 01/05/96 SAIF Regular
LFCO Life Financial Corp. NASDAQ Riverside CA 5 NA SAIF Not Avail.
LFED Leeds Federal Savings Bk (MHC) NASDAQ Baltimore MD 1 05/02/94 SAIF Mutual HC
LIFB Life Bancorp Inc. NASDAQ Norfolk VA 20 10/11/94 SAIF Regular
LISB Long Island Bancorp Inc. NASDAQ Melville NY 36 04/18/94 SAIF Regular
LOGN Logansport Financial Corp. NASDAQ Logansport IN 1 06/14/95 SAIF Regular
LONF London Financial Corporation NASDAQ London OH 1 04/01/96 SAIF Regular
LSBI LSB Financial Corp. NASDAQ Lafayette IN 4 02/03/95 BIF Regular
LSBX Lawrence Savings Bank NASDAQ North Andover MA 5 05/02/86 BIF Regular
LVSB Lakeview Financial NASDAQ West Paterson NJ 8 12/22/93 SAIF Regular
LXMO Lexington B&L Financial Corp. NASDAQ Lexington MO 1 06/06/96 SAIF Regular
MAFB MAF Bancorp Inc. NASDAQ Clarendon Hills IL 20 01/12/90 SAIF Regular
MARN Marion Capital Holdings NASDAQ Marion IN 2 03/18/93 SAIF Regular
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. NASDAQ Reading MA 14 05/28/86 BIF Regular
MBB MSB Bancorp Inc. AMSE Goshen NY 16 09/03/92 BIF Regular
MBBC Monterey Bay Bancorp Inc. NASDAQ Watsonville CA 7 02/15/95 SAIF Regular
MBLF MBLA Financial Corp. NASDAQ Macon MO 2 06/24/93 SAIF Regular
MBSP Mitchell Bancorp Inc. NASDAQ Spruce Pine NC 1 07/12/96 SAIF Regular
MCBN Mid-Coast Bancorp Inc. NASDAQ Waldoboro ME 2 11/02/89 SAIF Regular
MCBS Mid Continent Bancshares Inc. NASDAQ El Dorado KS 10 06/27/94 SAIF Regular
MDBK Medford Savings Bank NASDAQ Medford MA 16 03/18/86 BIF Regular
MECH Mechanics Savings Bank NASDAQ Hartford CT 14 06/26/96 BIF Regular
MERI Meritrust Federal SB NASDAQ Thibodaux LA 8 NA SAIF Not Avail.
METF Metropolitan Financial Corp. NASDAQ Mayfield Heights OH 15 NA SAIF Not Avail.
MFBC MFB Corp. NASDAQ Mishawaka IN 4 03/25/94 SAIF Regular
MFCX Marshalltown Financial Corp. NASDAQ Marshalltown IA 3 03/31/94 SAIF Regular
MFFC Milton Federal Financial Corp. NASDAQ West Milton OH 2 10/07/94 SAIF Regular
MFLR Mayflower Co-operative Bank NASDAQ Middleboro MA 4 12/23/87 BIF Regular
MFSL Maryland Federal Bancorp NASDAQ Hyattsville MD 26 06/02/87 SAIF Regular
MGNL Magna Bancorp Inc. NASDAQ Hattiesburg MS 63 03/13/91 SAIF Regular
MIFC Mid-Iowa Financial Corp. NASDAQ Newton IA 6 10/14/92 SAIF Regular
MIVI Mississippi View Holding Co. NASDAQ Little Falls MN 1 03/24/95 SAIF Regular
MLBC ML Bancorp Inc. NASDAQ Villanova PA 25 08/11/94 SAIF Regular
MONT Montgomery Financial Corp. NASDAQ Crawfordsville IN 4 07/01/97 SAIF Mutual HC
MRKF Market Financial Corporation NASDAQ Mount Healthy OH 2 03/27/97 SAIF Regular
MSBF MSB Financial Inc. NASDAQ Marshall MI 2 02/06/95 SAIF Regular
MSBK Mutual Savings Bank FSB NASDAQ Bay City MI 22 07/17/92 SAIF Regular
MWBI Midwest Bancshares Inc. NASDAQ Burlington IA 4 11/12/92 SAIF Regular
MWBX MetroWest Bank NASDAQ Framingham MA 11 10/10/86 BIF Regular
MWFD Midwest Federal Financial NASDAQ Baraboo WI 9 07/08/92 SAIF Regular
NASB North American Savings Bank NASDAQ Grandview MO 7 09/27/85 SAIF Not Avail.
NBN Northeast Bancorp AMSE Portland ME 8 08/19/87 BIF Regular
NBSI North Bancshares Inc. NASDAQ Chicago IL 2 12/21/93 SAIF Regular
NEIB Northeast Indiana Bancorp NASDAQ Huntington IN 3 06/28/95 SAIF Regular
NHTB New Hampshire Thrift Bncshrs NASDAQ New London NH 10 05/22/86 SAIF Regular
NMSB NewMil Bancorp Inc. NASDAQ New Milford CT 13 02/01/86 BIF Regular
NSBC NewSouth Bancorp, Inc. NASDAQ Washington NC 8 04/08/97 SAIF Regular
NSLB NS&L Bancorp Inc. NASDAQ Neosho MO 2 06/08/95 SAIF Regular
NSSB Norwich Financial Corp. NASDAQ Norwich CT 19 11/14/86 BIF Regular
NSSY Norwalk Savings Society NASDAQ Norwalk CT 7 06/16/94 BIF Regular
NTMG Nutmeg Federal S&LA NASDAQ Danbury CT 3 NA SAIF Not Avail.
NWEQ Northwest Equity Corp. NASDAQ Amery WI 3 10/11/94 SAIF Regular
NWSB Northwest Savings Bank (MHC) NASDAQ Warren PA 56 11/07/94 SAIF Mutual HC
NYB New York Bancorp Inc. NYSE Douglaston NY 29 01/28/88 SAIF Regular
OCFC Ocean Financial Corp. NASDAQ Toms River NJ 10 07/03/96 SAIF Regular
OCWN Ocwen Financial Corporation NASDAQ West Palm Beach FL 1 NA SAIF Not Avail.
OFCP Ottawa Financial Corp. NASDAQ Holland MI 26 08/19/94 SAIF Regular
OHSL OHSL Financial Corp. NASDAQ Cincinnati OH 5 02/10/93 SAIF Regular
PALM Palfed, Inc. NASDAQ Aiken SC 22 12/15/85 SAIF Regular
PAMM PacificAmerica Money Center NASDAQ Woodland Hills CA 1 06/25/96 BIF Not Avail.
PBCI Pamrapo Bancorp Inc. NASDAQ Bayonne NJ 8 11/14/89 SAIF Regular
PBCT People's Bank (MHC) NASDAQ Bridgeport CT 97 07/06/88 BIF Mutual HC
PBKB People's Bancshares Inc. NASDAQ New Bedford MA 14 10/30/86 BIF Regular
PBNB People's Savings Financial Cp. NASDAQ New Britain CT 9 08/20/86 BIF Regular
PCBC Perry County Financial Corp. NASDAQ Perryville MO 1 02/13/95 SAIF Regular
PCCI Pacific Crest Capital NASDAQ Agoura Hills CA 3 NA BIF Not Avail.
PDB Piedmont Bancorp Inc. AMSE Hillsborough NC 1 12/08/95 SAIF Regular
PEEK Peekskill Financial Corp. NASDAQ Peekskill NY 3 12/29/95 SAIF Regular
PERM Permanent Bancorp Inc. NASDAQ Evansville IN 12 04/04/94 SAIF Regular
PERT Perpetual Bank (MHC) NASDAQ Anderson SC 6 10/26/93 SAIF Mutual HC
PETE Primary Bank NASDAQ Peterborough NH 9 10/14/93 BIF Regular
PFDC Peoples Bancorp NASDAQ Auburn IN 6 07/07/87 SAIF Regular
PFED Park Bancorp Inc. NASDAQ Chicago IL 3 08/12/96 SAIF Regular
PFFB PFF Bancorp Inc. NASDAQ Pomona CA 23 03/29/96 SAIF Regular
PFFC Peoples Financial Corp. NASDAQ Massillon OH 2 09/13/96 SAIF Regular
PFNC Progress Financial Corporation NASDAQ Blue Bell PA 10 07/18/83 SAIF Regular
PFSB PennFed Financial Services Inc NASDAQ West Orange NJ 17 07/15/94 SAIF Regular
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) NASDAQ Pocahontas AR 6 04/05/94 SAIF Mutual HC
PHBK Peoples Heritage Finl Group NASDAQ Portland ME 132 12/04/86 BIF Regular
PHFC Pittsburgh Home Financial Corp NASDAQ Pittsburgh PA 7 04/01/96 SAIF Regular
PHSB Peoples Home Savings Bk (MHC) NASDAQ Beaver Falls PA 9 NA SAIF Mutual HC
PKPS Poughkeepsie Financial Corp. NASDAQ Poughkeepsie NY 13 11/19/85 SAIF Regular
PLSK Pulaski Savings Bank (MHC) NASDAQ Springfield NJ 6 04/03/97 SAIF Mutual HC
PMFI Perpetual Midwest Financial NASDAQ Cedar Rapids IA 5 03/31/94 SAIF Regular
POBS Portsmouth Bank Shares NASDAQ Portsmouth NH 3 02/09/88 BIF Regular
PRBC Prestige Bancorp Inc. NASDAQ Pleasant Hills PA 3 06/27/96 SAIF Regular
PROV Provident Financial Holdings NASDAQ Riverside CA 9 06/28/96 SAIF Regular
PSBK Progressive Bank Inc. NASDAQ Fishkill NY 17 08/01/84 BIF Regular
PSFC Peoples-Sidney Financial Corp. NASDAQ Sidney OH 1 04/28/97 SAIF Regular
PSFI PS Financial Inc. NASDAQ Chicago IL 1 11/27/96 SAIF Regular
PTRS Potters Financial Corp. NASDAQ East Liverpool OH 4 12/31/93 SAIF Regular
PULB Pulaski Bank, Svgs Bank (MHC) NASDAQ St. Louis MO 5 05/11/94 SAIF Mutual HC
PULS Pulse Bancorp NASDAQ South River NJ 4 09/18/86 SAIF Regular
PVFC PVF Capital Corp. NASDAQ Bedford Heights OH 9 12/30/92 SAIF Supervisory
PVSA Parkvale Financial Corporation NASDAQ Monroeville PA 29 07/16/87 SAIF Regular
PWBC PennFirst Bancorp Inc. NASDAQ Ellwood City PA 11 06/13/90 SAIF Regular
PWBK Pennwood Bancorp Inc. NASDAQ Pittsburgh PA 3 07/15/96 SAIF Regular
QCBC Quaker City Bancorp Inc. NASDAQ Whittier CA 8 12/30/93 SAIF Regular
QCFB QCF Bancorp Inc. NASDAQ Virginia MN 2 04/03/95 SAIF Regular
QCSB Queens County Bancorp Inc. NASDAQ Flushing NY 13 11/23/93 BIF Regular
RARB Raritan Bancorp Inc. NASDAQ Raritan NJ 6 03/01/87 BIF Regular
RCSB RCSB Financial Inc. NASDAQ Rochester NY 38 04/29/86 BIF Regular
REDF RedFed Bancorp Inc. NASDAQ Redlands CA 14 04/08/94 SAIF Regular
RELI Reliance Bancshares Inc. NASDAQ Milwaukee WI 1 04/19/96 SAIF Regular
RELY Reliance Bancorp Inc. NASDAQ Garden City NY 28 03/31/94 SAIF Regular
RIVR River Valley Bancorp NASDAQ Madison IN 3 12/20/96 SAIF Regular
ROSE TR Financial Corp. NASDAQ Garden City NY 15 06/29/93 BIF Regular
RSLN Roslyn Bancorp Inc. NASDAQ Roslyn NY 8 01/13/97 BIF Regular
RVSB Riverview Savings Bank (MHC) NASDAQ Camas WA 9 10/26/93 SAIF Mutual HC
SBCN Suburban Bancorporation Inc. NASDAQ Cincinnati OH 7 09/30/93 SAIF Regular
SBFL SB of the Finger Lakes (MHC) NASDAQ Geneva NY 4 11/11/94 SAIF Mutual HC
SBOS Boston Bancorp (The) NASDAQ South Boston MA 7 11/09/83 BIF Regular
SCBS Southern Community Bancshares NASDAQ Cullman AL 1 12/23/96 SAIF Regular
SCCB S. Carolina Community Bancshrs NASDAQ Winnsboro SC 3 07/07/94 SAIF Regular
SECP Security Capital Corporation NASDAQ Milwaukee WI 42 01/03/94 SAIF Regular
SFED SFS Bancorp Inc. NASDAQ Schenectady NY 3 06/30/95 SAIF Regular
SFFC StateFed Financial Corporation NASDAQ Des Moines IA 2 01/05/94 SAIF Regular
SFIN Statewide Financial Corp. NASDAQ Jersey City NJ 16 10/02/95 SAIF Regular
SFNB Security First Network Bank NASDAQ Atlanta GA 1 NA SAIF Not Avail.
SFSB SuburbFed Financial Corp. NASDAQ Flossmoor IL 12 03/04/92 SAIF Regular
SFSL Security First Corp. NASDAQ Mayfield Heights OH 15 01/22/88 SAIF Regular
SGVB SGV Bancorp Inc. NASDAQ West Covina CA 8 06/29/95 SAIF Regular
SHEN First Shenango Bancorp Inc. NASDAQ New Castle PA 4 04/06/93 SAIF Regular
SISB SIS Bancorp Inc. NASDAQ Springfield MA 24 02/08/95 BIF Regular
SKAN Skaneateles Bancorp Inc. NASDAQ Skaneateles NY 8 06/02/86 BIF Regular
SKBO First Carnegie Deposit (MHC) NASDAQ Carnegie PA 3 04/04/97 SAIF Mutual HC
SMBC Southern Missouri Bancorp Inc. NASDAQ Poplar Bluff MO 8 04/13/94 SAIF Regular
SMFC Sho-Me Financial Corp. NASDAQ Mt. Vernon MO 8 07/01/94 SAIF Regular
SOBI Sobieski Bancorp Inc. NASDAQ South Bend IN 3 03/31/95 SAIF Regular
SOPN First Savings Bancorp Inc. NASDAQ Southern Pines NC 5 01/06/94 SAIF Regular
SOSA Somerset Savings Bank NASDAQ Somerville MA 5 07/09/86 BIF Regular
SPBC St. Paul Bancorp Inc. NASDAQ Chicago IL 52 05/18/87 SAIF Regular
SRN Southern Banc Company Inc. AMSE Gadsden AL 4 10/05/95 SAIF Regular
SSB Scotland Bancorp Inc AMSE Laurinburg NC 2 04/01/96 SAIF Regular
SSFC South Street Financial Corp. NASDAQ Albemarle NC 2 10/03/96 SAIF Regular
SSM Stone Street Bancorp Inc. AMSE Mocksville NC 2 04/01/96 SAIF Regular
STFR St. Francis Capital Corp. NASDAQ Milwaukee WI 22 06/21/93 SAIF Regular
STND Standard Financial Inc. NASDAQ Chicago IL 14 08/01/94 SAIF Regular
STSA Sterling Financial Corp. NASDAQ Spokane WA 41 NA SAIF Not Avail.
SVRN Sovereign Bancorp Inc. NASDAQ Wyomissing PA 134 08/12/86 SAIF Regular
SWBI Southwest Bancshares NASDAQ Hometown IL 6 06/24/92 SAIF Regular
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank NASDAQ Sandwich MA 11 07/25/86 BIF Regular
SZB SouthFirst Bancshares Inc. AMSE Sylacauga AL 2 02/14/95 SAIF Regular
TBK Tolland Bank AMSE Tolland CT 7 12/19/86 BIF Regular
THR Three Rivers Financial Corp. AMSE Three Rivers MI 4 08/24/95 SAIF Regular
THRD TF Financial Corporation NASDAQ Newtown PA 14 07/13/94 SAIF Regular
TPNZ Tappan Zee Financial Inc. NASDAQ Tarrytown NY 1 10/05/95 SAIF Regular
TRIC Tri-County Bancorp Inc. NASDAQ Torrington WY 2 09/30/93 SAIF Regular
TSBS Peoples Bancorp Inc. (MHC) NASDAQ Lawrenceville NJ 14 08/03/95 BIF Mutual HC
TSH Teche Holding Co. AMSE Franklin LA 9 04/19/95 SAIF Regular
TWIN Twin City Bancorp NASDAQ Bristol TN 3 01/04/95 SAIF Regular
UBMT United Financial Corp. NASDAQ Great Falls MT 4 09/23/86 SAIF Regular
UFRM United Federal Savings Bank NASDAQ Rocky Mount NC 13 07/01/80 SAIF Regular
USAB USABancshares, Inc. NASDAQ Philadelphia PA 1 NA BIF Not Avail.
VABF Virginia Beach Fed. Financial NASDAQ Virginia Beach VA 15 11/01/80 SAIF Not Avail.
VFFC Virginia First Financial Corp. NASDAQ Petersburg VA 24 01/01/78 SAIF Not Avail.
WAMU Washington Mutual Inc. NASDAQ Seattle WA 452 03/11/83 BIF Regular
WAYN Wayne Savings & Loan Co. (MHC) NASDAQ Wooster OH 6 06/25/93 SAIF Mutual HC
WBST Webster Financial Corporation NASDAQ Waterbury CT 77 12/12/86 SAIF Regular
WCBI Westco Bancorp NASDAQ Westchester IL 1 06/26/92 SAIF Regular
WCFB Webster City Federal SB (MHC) NASDAQ Webster City IA 1 08/15/94 SAIF Mutual HC
WEFC Wells Financial Corp. NASDAQ Wells MN 7 04/11/95 SAIF Regular
WEHO Westwood Homestead Fin. Corp. NASDAQ Cincinnati OH 2 09/30/96 SAIF Regular
WES Westcorp NYSE Irvine CA 26 05/01/86 SAIF Not Avail.
WFCO Winton Financial Corp. NASDAQ Cincinnati OH 5 08/04/88 SAIF Regular
WFSG Wilshire Financial Services NASDAQ Portland OR 2 12/19/96 SAIF Not Avail.
WFSL Washington Federal Inc. NASDAQ Seattle WA 104 11/17/82 SAIF Regular
WHGB WHG Bancshares Corp. NASDAQ Lutherville MD 5 04/01/96 SAIF Regular
WOFC Western Ohio Financial Corp. NASDAQ Springfield OH 10 07/29/94 SAIF Regular
WRNB Warren Bancorp Inc. NASDAQ Peabody MA 6 07/09/86 BIF Regular
WSB Washington Savings Bank, FSB AMSE Waldorf MD 4 NA SAIF Not Avail.
WSFS WSFS Financial Corporation NASDAQ Wilmington DE 16 11/26/86 BIF Regular
WSTR WesterFed Financial Corp. NASDAQ Missoula MT 35 01/10/94 SAIF Regular
WVFC WVS Financial Corporation NASDAQ Pittsburgh PA 5 11/29/93 SAIF Regular
WWFC Westwood Financial Corporation NASDAQ Westwood NJ 2 06/07/96 SAIF Not Avail.
WYNE Wayne Bancorp Inc. NASDAQ Wayne NJ 4 06/27/96 SAIF Regular
YFCB Yonkers Financial Corporation NASDAQ Yonkers NY 4 04/18/96 SAIF Regular
YFED York Financial Corp. NASDAQ York PA 22 02/01/84 SAIF Regular
--------------------------------------------------------------------------------
Average 421
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporate
--------------------------------------------------------------------------------
Deposit
Number Insurance
of Agency Conversion
Ticker Short Name Exchange City State Offices IPO Date (BIF/SAIF) Type
- --------------------------------------- --------------------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. NASDAQ Jefferson City MO 7 12/29/93 SAIF Regular
FBCV 1ST Bancorp NASDAQ Vincennes IN 1 04/07/87 SAIF Regular
HBFW Home Bancorp NASDAQ Fort Wayne IN 9 03/30/95 SAIF Regular
HMCI HomeCorp Inc. NASDAQ Rockford IL 9 06/22/90 SAIF Regular
KNK Kankakee Bancorp Inc. AMSE Kankakee IL 9 01/06/93 SAIF Regular
MBLF MBLA Financial Corp. NASDAQ Macon MO 2 06/24/93 SAIF Regular
MFBC MFB Corp. NASDAQ Mishawaka IN 4 03/25/94 SAIF Regular
PFDC Peoples Bancorp NASDAQ Auburn IN 6 07/07/87 SAIF Regular
WEFC Wells Financial Corp. NASDAQ Wells MN 7 04/11/95 SAIF Regular
WCBI Westco Bancorp NASDAQ Westchester IL 1 06/26/92 SAIF Regular
--------------------------------------------------------------------------------
Average 10
Maximum
Minimum
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB 30,325,660 124.77 70.02 56.12 32.54
%CCMD Chevy Chase Bank, FSB 6,165,989 83.15 59.08 71.05 18.67
AABC Access Anytime Bancorp, Inc. 106,492 49.33 45.66 92.55 0.00
AADV Advantage Bancorp Inc. 1,021,439 85.29 56.11 65.78 23.83
ABBK Abington Bancorp Inc. 492,058 98.82 61.39 62.12 30.04
ABCL Alliance Bancorp Inc. 1,313,141 108.90 83.31 76.50 12.24
ABCW Anchor BanCorp Wisconsin 1,884,983 113.49 79.02 69.63 22.89
AFBC Advance Financial Bancorp 103,578 107.58 82.37 76.57 7.49
AFCB Affiliated Community Bancorp 1,054,997 100.43 63.32 63.05 26.30
AFED AFSALA Bancorp Inc. 152,254 NA NA 84.30 1.07
AFFFZ America First Financial Fund 2,183,062 75.97 65.79 86.60 4.28
AHCI Ambanc Holding Co. Inc. 478,117 80.84 52.66 65.15 21.40
AHM Ahmanson & Company (H.F.) 47,532,068 95.04 65.47 68.88 23.24
ALBC Albion Banc Corp. 66,316 96.00 72.82 75.86 13.98
ALBK ALBANK Financial Corporation 3,496,331 85.85 73.37 85.46 2.88
AMFB American Federal Bank FSB 1,306,915 86.65 66.27 76.48 12.94
AMFC AMB Financial Corp. 93,643 102.67 74.08 72.16 10.14
ANA Acadiana Bancshares Inc. 261,687 98.28 71.97 73.23 8.50
ANBK American National Bancorp 505,318 99.12 64.64 65.21 24.13
ANDB Andover Bancorp Inc. 1,209,604 101.64 72.38 71.21 19.90
ASBI Ameriana Bancorp 402,163 89.21 71.46 80.10 7.00
ASBP ASB Financial Corp. 109,414 82.74 66.03 79.81 2.64
ASFC Astoria Financial Corporation 7,689,409 61.80 36.12 58.45 33.04
ATSB AmTrust Capital Corp. 71,031 99.62 71.64 71.92 17.12
AVND Avondale Financial Corp. 635,447 106.22 60.29 56.76 33.00
BANC BankAtlantic Bancorp Inc. 2,773,085 102.93 67.71 65.78 25.86
BDJI First Federal Bancorporation 107,716 63.43 48.09 75.82 11.78
BFD BostonFed Bancorp Inc. 941,007 139.74 80.91 57.90 32.34
BFFC Big Foot Financial Corp. 212,245 69.60 41.04 58.97 21.96
BFSB Bedford Bancshares Inc. 131,506 115.62 86.02 74.40 10.65
BKC American Bank of Connecticut 588,583 82.77 61.74 74.59 16.95
BKCO Bankers Corp. 2,541,672 96.09 62.08 64.61 26.31
BKCT Bancorp Connecticut Inc. 413,729 82.73 60.68 73.36 15.44
BKUNA BankUnited Financial Corp. 1,453,152 119.50 83.18 69.61 17.36
BNKU Bank United Corp. 11,002,625 159.42 73.40 46.04 43.89
BPLS Bank Plus Corp. 3,294,647 107.08 81.80 76.40 16.00
BSBC Branford Savings Bank 177,425 79.17 70.36 88.88 0.56
BTHL Bethel Bancorp 218,187 114.79 77.14 67.20 22.23
BVCC Bay View Capital Corp. 3,044,610 140.12 76.21 54.39 37.98
BWFC Bank West Financial Corp. 147,019 104.71 71.55 68.33 15.69
BYFC Broadway Financial Corp. 118,763 96.41 84.20 87.34 0.00
CAFI Camco Financial Corp. 472,430 108.47 83.48 76.95 11.88
CAPS Capital Savings Bancorp Inc. 237,915 111.18 79.09 71.14 18.91
CASB Cascade Financial Corp. 352,321 124.37 81.74 65.72 26.11
CASH First Midwest Financial Inc. 370,177 105.53 67.14 63.62 23.79
CATB Catskill Financial Corp. 273,940 63.33 45.58 71.97 0.00
CBCI Calumet Bancorp Inc. 494,557 109.02 77.05 70.68 11.43
CBCO CB Bancorp Inc. 227,135 60.90 40.17 65.96 23.46
CBES CBES Bancorp Inc. 95,219 120.99 90.20 74.55 5.25
CBK Citizens First Financial Corp. 271,614 111.36 81.91 73.56 10.77
CBNH Community Bankshares Inc. 580,645 98.58 69.73 70.73 20.39
CBSA Coastal Bancorp Inc. 2,852,767 93.85 43.29 46.12 48.65
CBSB Charter Financial Inc. 394,815 106.20 73.91 69.59 14.78
CCFH CCF Holding Company 86,940 98.57 81.85 83.04 1.73
CEBK Central Co-operative Bank 320,950 90.68 73.20 80.73 7.79
CENB Century Bancorp Inc. 99,948 85.80 59.65 69.53 0.00
CENF CENFED Financial Corp. 2,263,399 101.00 69.89 69.20 24.83
CFB Commercial Federal Corporation 6,901,835 116.83 74.80 64.03 28.65
CFBC Community First Banking Co. 352,532 88.62 77.36 87.30 5.19
CFCP Coastal Financial Corp. 484,610 117.94 80.85 68.55 23.89
CFFC Community Financial Corp. 167,707 128.60 89.41 69.52 15.50
CFNC Carolina Fincorp Inc. 108,680 92.07 68.92 74.86 0.00
CFSB CFSB Bancorp Inc. 834,252 130.96 87.85 67.08 23.56
CFTP Community Federal Bancorp 206,049 93.85 60.09 64.03 0.73
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation 1,744,449 95.77 67.17 70.14 19.67
CIBI Community Investors Bancorp 97,446 103.55 76.52 73.90 13.99
CKFB CKF Bancorp Inc. 60,197 126.34 89.94 71.19 3.73
CLAS Classic Bancshares Inc. 131,554 82.10 62.73 76.41 8.20
CMRN Cameron Financial Corp 197,693 135.77 85.60 63.04 12.77
CMSB Commonwealth Bancorp Inc. 2,236,008 77.56 51.95 66.98 20.77
CMSV Community Savings (MHC) 682,314 74.17 58.48 78.85 7.62
CNIT CENIT Bancorp Inc. 706,797 91.74 63.38 69.09 23.20
CNSB CNS Bancorp Inc. 98,104 84.97 63.45 74.68 0.00
CNY Carver Bancorp Inc. 423,512 75.12 47.26 62.92 28.59
COFD Collective Bancorp Inc. 5,478,568 83.83 53.13 63.37 28.14
COFI Charter One Financial 14,040,397 108.91 60.81 55.84 35.82
CONE Conestoga Bancorp, Inc. 494,348 28.70 23.21 80.86 2.02
COOP Cooperative Bankshares Inc. 348,498 98.50 79.19 80.40 11.54
CRZY Crazy Woman Creek Bancorp 52,042 99.07 53.55 54.05 17.31
CSA Coast Savings Financial 8,797,075 94.25 69.57 73.81 19.76
CSBF CSB Financial Group Inc. 47,996 77.10 57.40 74.45 0.00
CTZN CitFed Bancorp Inc. 2,937,269 100.40 57.56 57.33 35.16
CVAL Chester Valley Bancorp Inc. 305,187 101.92 80.97 79.45 10.37
CZF CitiSave Financial Corp 74,942 74.06 60.58 81.79 0.00
DCBI Delphos Citizens Bancorp Inc. 107,072 100.64 71.44 70.98 0.00
DIBK Dime Financial Corp. 814,431 57.16 48.22 84.37 7.12
DIME Dime Community Bancorp Inc. 1,237,274 70.96 55.19 77.77 4.33
DME Dime Bancorp Inc. 18,464,786 85.71 59.65 69.59 23.80
DNFC D & N Financial Corp. 1,528,468 108.47 71.50 65.92 27.31
DSL Downey Financial Corp. 5,484,473 110.05 90.19 81.95 9.79
EBSI Eagle Bancshares 666,166 110.84 69.07 62.31 25.15
EFBC Empire Federal Bancorp Inc. 107,938 64.15 39.85 62.11 0.00
EFBI Enterprise Federal Bancorp 256,704 119.16 66.39 55.71 31.16
EGFC Eagle Financial Corp. 1,512,036 79.53 57.01 71.69 18.79
EGLB Eagle BancGroup Inc. 170,531 86.27 66.92 77.57 9.56
EIRE Emerald Isle Bancorp Inc. 412,141 80.19 67.67 84.38 8.17
EMLD Emerald Financial Corp. 588,634 87.18 75.77 86.92 4.73
EQSB Equitable Federal Savings Bank 296,002 85.51 69.23 80.96 13.28
ESBK Elmira Savings Bank (The) 222,618 85.74 78.70 91.79 1.18
ESX Essex Bancorp Inc. 179,930 114.82 87.43 76.14 14.38
ETFS East Texas Financial Services 111,689 57.99 46.62 80.39 0.00
FAB FirstFed America Bancorp Inc. 979,736 114.43 84.56 73.90 11.34
FBBC First Bell Bancorp Inc. 709,011 111.08 77.90 70.13 16.92
FBCI Fidelity Bancorp Inc. 486,010 112.71 76.62 67.98 19.98
FBCV 1ST Bancorp 273,090 123.79 66.47 53.70 37.10
FBER 1st Bergen Bancorp 252,294 59.84 49.51 82.74 0.00
FBHC Fort Bend Holding Corp. 295,080 56.85 48.20 84.80 5.53
FBNW FirstBank Corp. 129,832 81.96 72.80 88.83 1.77
FBSI First Bancshares Inc. 160,048 113.80 81.23 71.38 13.84
FCB Falmouth Co-Operative Bank 90,267 69.97 52.09 74.45 0.87
FCBF FCB Financial Corp. 271,185 147.67 83.40 56.48 23.93
FCIT First Citizens Financial Corp. 693,803 95.31 74.79 78.47 14.08
FCME First Coastal Corporation 151,143 87.14 67.23 77.15 13.78
FDEF First Defiance Financial 546,060 111.97 77.56 69.27 8.54
FED FirstFed Financial Corp. 4,129,737 154.89 76.28 49.25 44.84
FESX First Essex Bancorp Inc. 1,146,854 100.92 62.10 61.54 29.58
FFBA First Colorado Bancorp Inc. 1,509,514 94.42 72.21 76.48 8.75
FFBH First Federal Bancshares of AR 519,765 93.89 77.93 83.00 0.58
FFBI First Financial Bancorp Inc. 93,156 107.55 78.27 72.77 18.20
FFBS FFBS BanCorp Inc. 128,676 87.79 70.09 79.83 0.00
FFBZ First Federal Bancorp Inc. 191,686 130.39 87.42 67.05 24.36
FFCH First Financial Holdings Inc. 1,602,018 127.83 84.82 66.36 25.97
FFDB FirstFed Bancorp Inc. 178,124 80.97 71.81 88.69 0.56
FFDF FFD Financial Corp. 85,286 97.24 62.33 64.10 10.06
FFED Fidelity Federal Bancorp 250,285 113.22 84.05 74.24 19.53
FFES First Federal of East Hartford 974,693 30.21 17.79 58.89 34.40
FFFC FFVA Financial Corp. 549,771 80.72 59.73 74.00 12.37
FFFD North Central Bancshares Inc. 203,497 129.14 84.00 65.05 9.48
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. 320,031 79.14 70.64 89.26 3.12
FFFL Fidelity Bankshares Inc. (MHC) 926,891 92.82 74.49 80.25 9.05
FFHC First Financial Corp. 5,808,506 78.47 60.70 77.35 14.33
FFHH FSF Financial Corp. 367,312 112.66 64.44 57.20 30.34
FFHS First Franklin Corporation 226,235 77.36 67.99 87.88 2.80
FFIC Flushing Financial Corp. 811,189 71.75 52.89 73.71 9.37
FFKY First Federal Financial Corp. 372,300 116.73 86.91 74.45 11.20
FFLC FFLC Bancorp Inc. 358,538 84.11 68.36 81.28 3.33
FFOH Fidelity Financial of Ohio 513,079 98.71 80.80 81.86 4.27
FFPB First Palm Beach Bancorp Inc. 1,558,235 87.65 68.46 78.10 13.54
FFSL First Independence Corp. 109,230 95.71 64.97 67.88 20.60
FFSX First Fed SB of Siouxland(MHC) 462,829 102.19 72.91 71.35 19.34
FFWC FFW Corp. 158,441 112.39 69.67 61.99 27.28
FFWD Wood Bancorp Inc. 163,498 111.90 80.71 72.13 14.45
FFYF FFY Financial Corp. 598,667 102.26 76.48 74.80 9.37
FGHC First Georgia Holding Inc. 147,094 105.51 86.38 81.86 8.46
FIBC Financial Bancorp Inc. 269,197 72.02 55.16 76.59 12.26
FISB First Indiana Corporation 1,481,157 115.54 84.01 72.71 16.45
FKFS First Keystone Financial 314,637 81.60 57.94 71.01 20.28
FKKY Frankfort First Bancorp Inc. 128,328 137.90 92.42 67.02 5.94
FLAG FLAG Financial Corp. 222,072 83.34 68.50 82.19 6.46
FLFC First Liberty Financial Corp. 1,248,033 99.14 69.93 70.53 20.88
FLGS Flagstar Bancorp Inc. 1,519,099 173.59 87.68 50.51 30.65
FLKY First Lancaster Bancshares 40,448 159.08 86.38 54.30 10.34
FMBD First Mutual Bancorp Inc. 424,597 89.61 71.29 79.55 5.65
FMCO FMS Financial Corporation 553,599 65.97 56.54 85.70 6.93
FMSB First Mutual Savings Bank 426,292 99.57 78.67 79.01 12.71
FNGB First Northern Capital Corp. 617,899 119.17 90.14 75.64 11.64
FOBC Fed One Bancorp 346,214 57.29 41.90 73.15 14.54
FPRY First Financial Bancorp 240,379 88.86 77.63 87.36 5.41
FRC First Republic Bancorp 2,183,453 140.50 88.66 63.11 28.47
FSBI Fidelity Bancorp Inc. 327,896 67.28 48.15 71.57 20.45
FSFC First Southeast Financial Corp 334,751 92.78 78.38 84.48 4.48
FSLA First Savings Bank (MHC) 1,024,715 65.30 51.38 78.68 11.01
FSNJ First Savings Bk of NJ (MHC) 578,574 54.87 41.85 76.27 13.94
FSPG First Home Bancorp Inc. 508,243 90.47 52.55 58.09 34.77
FSPT FirstSpartan Financial Corp. 356,966 103.93 89.04 85.68 0.00
FSSB First FS&LA of San Bernardino 103,674 75.29 71.56 95.05 0.00
FSTC First Citizens Corp. 326,365 92.35 76.34 82.67 5.46
FTF Texarkana First Financial Corp 168,094 101.23 83.55 82.54 0.03
FTFC First Federal Capital Corp. 1,530,237 109.73 75.56 68.86 23.86
FTNB Fulton Bancorp Inc. 99,464 127.14 85.77 67.46 6.54
FTSB Fort Thomas Financial Corp. 94,681 123.64 89.47 72.36 10.25
FWWB First SB of Washington Bancorp 1,007,633 119.76 64.77 54.08 29.15
GAF GA Financial Inc. 670,342 51.00 34.64 67.93 13.73
GBCI Glacier Bancorp Inc. 552,372 121.30 70.98 58.52 29.69
GDVS Greater Delaware Valley (MHC) 238,686 74.79 59.29 79.27 8.70
GDW Golden West Financial 38,530,009 134.71 80.22 59.55 32.26
GFCO Glenway Financial Corp. 280,813 102.51 83.06 81.02 8.07
GFED Guaranty Federal SB (MHC) 196,034 104.62 77.95 74.51 10.79
GFSB GFS Bancorp Inc. 88,154 131.52 87.02 66.16 21.53
GLBK Glendale Co-Operative Bank 36,927 47.28 39.49 83.53 0.00
GLN Glendale Federal Bank FSB 15,393,708 124.67 74.39 59.67 32.47
GOSB GSB Financial Corporation 95,617 NA NA 86.28 0.00
GPT GreenPoint Financial Corp. 13,261,221 69.50 58.85 84.69 2.17
GRTR Greater New York Savings Bank 2,570,533 57.80 37.49 64.87 26.07
GSBC Great Southern Bancorp Inc. 679,153 128.44 87.54 68.16 22.05
GSFC Green Street Financial Corp. 174,365 114.11 71.42 62.58 0.00
GSLA GS Financial Corp. 135,339 41.26 33.33 80.79 0.00
GTFN Great Financial Corporation 3,002,142 107.08 65.47 61.14 27.23
GTPS Great American Bancorp 137,898 90.52 70.47 77.86 0.00
GUPB GFSB Bancorp Inc. 86,911 82.01 52.16 63.61 18.93
GWBC Gateway Bancorp Inc. 65,806 41.54 30.53 73.49 0.00
HALL Hallmark Capital Corp. 409,287 101.79 66.97 65.79 25.92
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. 1,104,924 90.57 73.74 81.42 9.10
HARL Harleysville Savings Bank 332,558 89.47 72.08 80.57 11.77
HARS Harris Savings Bank (MHC) 1,943,327 73.02 44.17 60.49 30.77
HAVN Haven Bancorp Inc. 1,727,798 79.92 53.82 67.34 23.70
HBBI Home Building Bancorp 46,804 76.19 60.41 79.29 7.91
HBEI Home Bancorp of Elgin Inc. 358,695 103.84 73.25 70.54 0.00
HBFW Home Bancorp 327,789 94.05 79.98 85.04 0.00
HBNK Highland Federal Bank FSB 480,192 112.25 81.58 72.68 18.22
HBS Haywood Bancshares Inc. 146,331 98.11 75.92 77.39 7.18
HCBB HCB Bancshares Inc. 180,417 63.16 54.19 85.79 5.54
HCFC Home City Financial Corp. 68,235 108.24 78.99 72.98 5.87
HEMT HF Bancorp Inc. 984,455 56.33 48.09 85.37 5.08
HFFB Harrodsburg First Fin Bancorp 108,187 102.30 74.06 72.39 0.00
HFFC HF Financial Corp. 561,287 103.61 77.20 74.51 13.14
HFGI Harrington Financial Group 515,360 65.70 16.69 25.41 67.83
HFNC HFNC Financial Corp. 842,917 139.73 74.24 53.13 26.69
HFSA Hardin Bancorp Inc. 103,354 77.96 52.95 67.92 18.38
HHFC Harvest Home Financial Corp. 83,103 76.48 52.98 69.27 17.69
HIFS Hingham Instit. for Savings 205,667 101.89 76.55 75.13 14.15
HMCI HomeCorp Inc. 336,447 84.75 78.24 92.31 0.00
HMLK Hemlock Federal Financial Corp 164,493 41.57 33.03 79.45 0.91
HMNF HMN Financial Inc. 553,021 94.63 62.31 65.84 19.12
HOMF Home Federal Bancorp 663,658 110.05 85.43 77.63 13.23
HPBC Home Port Bancorp Inc. 189,204 123.97 83.35 67.24 20.74
HRBF Harbor Federal Bancorp Inc. 219,462 84.61 66.11 78.13 7.52
HRZB Horizon Financial Corp. 515,341 94.74 78.10 82.43 0.00
HTHR Hawthorne Financial Corp. 837,975 100.53 84.95 84.50 9.23
HVFD Haverfield Corporation 341,664 108.75 86.96 79.97 9.37
HWEN Home Financial Bancorp 39,443 136.75 83.14 60.80 20.28
HZFS Horizon Financial Svcs Corp. 78,368 92.53 66.63 72.01 16.74
IBSF IBS Financial Corp. 740,027 34.99 26.99 77.12 4.96
IFSB Independence Federal Savings 262,753 77.74 59.17 76.11 16.34
IFSL Indiana Federal Corporation 818,924 112.96 75.92 67.21 23.36
INBI Industrial Bancorp 333,846 112.35 87.84 78.18 2.40
INCB Indiana Community Bank SB 91,329 90.47 78.66 86.95 0.00
IPSW Ipswich Savings Bank 165,510 91.19 75.85 83.18 9.06
ISBF ISB Financial Corporation 938,968 77.51 63.52 81.94 5.06
ITLA ITLA Capital Corp. 810,494 99.30 82.04 82.61 4.87
IWBK InterWest Bancorp Inc. 1,771,523 89.05 59.12 66.39 26.16
JOAC Joachim Bancorp Inc. 35,656 96.06 66.88 69.62 0.00
JSBA Jefferson Savings Bancorp 1,296,929 90.74 75.42 83.12 7.39
JSBF JSB Financial Inc. 1,530,902 76.98 57.37 74.53 0.00
JXSB Jacksonville Savings Bk (MHC) 163,830 89.03 78.17 87.81 0.19
JXVL Jacksonville Bancorp Inc. 218,349 91.15 74.64 81.89 0.92
KFBI Klamath First Bancorp 683,830 122.83 74.51 60.66 17.51
KNK Kankakee Bancorp Inc. 342,379 83.19 67.62 81.28 7.08
KSAV KS Bancorp Inc. 100,754 104.15 84.78 81.40 3.97
KSBK KSB Bancorp Inc. 139,993 97.30 73.05 75.08 16.17
KYF Kentucky First Bancorp Inc. 88,923 90.20 55.35 61.36 21.45
LARK Landmark Bancshares Inc. 223,799 97.61 65.16 66.76 17.29
LARL Laurel Capital Group Inc. 208,577 86.50 70.83 81.89 5.30
LFBI Little Falls Bancorp Inc. 303,384 54.13 40.60 75.00 11.08
LFCO Life Financial Corp. 157,707 57.16 47.41 82.94 6.34
LFED Leeds Federal Savings Bk (MHC) 281,899 75.56 61.67 81.62 0.24
LIFB Life Bancorp Inc. 1,407,861 87.84 46.09 52.47 35.81
LISB Long Island Bancorp Inc. 5,814,296 97.86 61.72 63.07 24.86
LOGN Logansport Financial Corp. 79,298 96.20 72.05 74.89 4.41
LONF London Financial Corporation 37,937 99.44 76.82 77.26 2.11
LSBI LSB Financial Corp. 188,027 129.03 86.76 67.24 23.25
LSBX Lawrence Savings Bank 342,037 61.69 45.57 73.88 16.18
LVSB Lakeview Financial 481,646 NA NA 77.55 12.20
LXMO Lexington B&L Financial Corp. 59,748 105.88 75.06 70.90 0.00
MAFB MAF Bancorp Inc. 3,236,449 108.90 77.09 70.79 19.40
MARN Marion Capital Holdings 174,415 123.34 85.67 69.46 4.72
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. 901,117 31.65 27.92 88.22 0.10
MBB MSB Bancorp Inc. 810,679 47.21 42.58 90.18 0.04
MBBC Monterey Bay Bancorp Inc. 422,380 74.33 55.83 75.12 13.59
MBLF MBLA Financial Corp. 209,783 118.49 55.61 46.93 39.05
MBSP Mitchell Bancorp Inc. 33,894 151.66 81.33 53.63 0.00
MCBN Mid-Coast Bancorp Inc. 57,838 113.92 83.59 73.38 17.62
MCBS Mid Continent Bancshares Inc. 371,169 86.71 54.52 62.88 25.59
MDBK Medford Savings Bank 1,054,075 71.43 54.13 75.78 14.84
MECH Mechanics Savings Bank 788,513 81.98 66.44 81.04 8.52
MERI Meritrust Federal SB 228,591 57.82 52.41 90.64 0.00
METF Metropolitan Financial Corp. 807,054 102.96 84.07 81.65 12.66
MFBC MFB Corp. 234,290 106.94 74.55 69.71 14.73
MFCX Marshalltown Financial Corp. 127,107 59.05 49.25 83.40 0.00
MFFC Milton Federal Financial Corp. 178,757 84.44 64.17 75.99 8.77
MFLR Mayflower Co-operative Bank 124,688 73.38 59.39 80.94 8.82
MFSL Maryland Federal Bancorp 1,157,445 NA NA 69.75 19.74
MGNL Magna Bancorp Inc. 1,383,130 100.02 65.93 65.91 21.44
MIFC Mid-Iowa Financial Corp. 123,572 76.09 52.89 69.50 20.23
MIVI Mississippi View Holding Co. 69,755 80.25 64.36 80.20 0.00
MLBC ML Bancorp Inc. 1,959,847 97.32 43.37 44.56 45.60
MONT Montgomery Financial Corp. 93,627 115.47 89.62 77.61 11.14
MRKF Market Financial Corporation 56,343 70.50 45.19 64.10 0.00
MSBF MSB Financial Inc. 75,630 159.24 87.12 54.71 27.60
MSBK Mutual Savings Bank FSB 662,536 65.55 40.32 61.51 30.82
MWBI Midwest Bancshares Inc. 139,006 79.76 59.93 75.14 17.27
MWBX MetroWest Bank 554,921 92.89 76.70 82.57 9.10
MWFD Midwest Federal Financial 201,070 95.52 74.48 77.97 12.31
NASB North American Savings Bank 689,246 122.55 88.22 71.99 18.81
NBN Northeast Bancorp 247,525 128.03 80.00 62.49 29.03
NBSI North Bancshares Inc. 120,011 103.02 61.91 60.10 23.16
NEIB Northeast Indiana Bancorp 172,874 166.23 88.14 53.02 31.24
NHTB New Hampshire Thrift Bncshrs 313,038 97.57 82.41 84.46 7.29
NMSB NewMil Bancorp Inc. 317,013 62.83 53.30 84.83 4.12
NSBC NewSouth Bancorp, Inc. 254,863 79.80 72.57 90.94 0.48
NSLB NS&L Bancorp Inc. 58,089 75.11 55.13 73.40 5.16
NSSB Norwich Financial Corp. 701,234 80.96 69.73 86.13 1.70
NSSY Norwalk Savings Society 617,367 102.35 69.91 68.31 23.39
NTMG Nutmeg Federal S&LA 93,645 112.06 91.88 81.99 10.07
NWEQ Northwest Equity Corp. 95,097 126.90 82.14 64.73 23.24
NWSB Northwest Savings Bank (MHC) 1,997,563 92.48 75.13 81.24 7.72
NYB New York Bancorp Inc. 3,174,997 114.55 61.67 53.83 38.91
OCFC Ocean Financial Corp. 1,387,836 74.56 50.80 68.14 12.63
OCWN Ocwen Financial Corporation 2,649,471 86.07 68.44 79.52 10.01
OFCP Ottawa Financial Corp. 858,934 114.11 84.49 74.04 15.85
OHSL OHSL Financial Corp. 229,812 94.60 71.48 75.56 12.32
PALM Palfed, Inc. 655,707 97.81 82.26 84.10 7.23
PAMM PacificAmerica Money Center 112,340 82.43 54.04 65.55 3.72
PBCI Pamrapo Bancorp Inc. 367,360 69.13 56.62 81.90 3.50
PBCT People's Bank (MHC) 7,538,100 94.16 67.64 71.84 18.42
PBKB People's Bancshares Inc. 548,774 80.84 48.37 59.83 33.59
PBNB People's Savings Financial Cp. 479,099 73.14 54.93 75.11 14.10
PCBC Perry County Financial Corp. 79,714 19.97 15.58 78.03 3.14
PCCI Pacific Crest Capital 342,750 75.52 62.97 83.38 8.75
PDB Piedmont Bancorp Inc. 118,519 118.23 81.72 69.12 13.08
PEEK Peekskill Financial Corp. 182,594 33.65 24.46 72.68 0.00
PERM Permanent Bancorp Inc. 423,698 75.62 50.11 66.26 23.67
PERT Perpetual Bank (MHC) 245,671 89.29 67.28 75.35 10.58
PETE Primary Bank 435,716 78.70 55.67 70.74 22.09
PFDC Peoples Bancorp 283,242 94.81 79.21 83.54 0.82
PFED Park Bancorp Inc. 177,981 51.57 37.18 72.10 2.81
PFFB PFF Bancorp Inc. 2,535,767 107.98 72.86 67.48 20.90
PFFC Peoples Financial Corp. 89,687 74.65 53.79 72.06 0.00
PFNC Progress Financial Corporation 400,366 88.25 68.32 77.41 15.38
PFSB PennFed Financial Services Inc 1,252,387 99.82 70.73 70.86 20.43
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) 373,262 118.23 39.45 33.37 58.34
PHBK Peoples Heritage Finl Group 5,458,036 90.97 69.10 75.96 12.74
PHFC Pittsburgh Home Financial Corp 236,998 116.62 67.76 58.10 28.69
PHSB Peoples Home Savings Bk (MHC) 202,216 55.25 48.07 87.00 4.01
PKPS Poughkeepsie Financial Corp. 861,136 112.09 75.90 67.72 22.65
PLSK Pulaski Savings Bank (MHC) 192,501 NA NA 77.19 0.00
PMFI Perpetual Midwest Financial 397,780 102.80 75.36 73.31 16.94
POBS Portsmouth Bank Shares 262,921 50.48 37.26 73.82 0.00
PRBC Prestige Bancorp Inc. 126,833 94.98 65.36 68.81 17.98
PROV Provident Financial Holdings 608,705 102.49 84.61 82.55 1.12
PSBK Progressive Bank Inc. 877,667 74.84 67.78 90.57 0.00
PSFC Peoples-Sidney Financial Corp. 93,734 106.43 92.40 86.82 2.67
PSFI PS Financial Inc. 75,118 85.49 47.65 55.73 0.00
PTRS Potters Financial Corp. 116,921 71.29 59.74 83.79 6.43
PULB Pulaski Bank, Svgs Bank (MHC) 177,827 92.80 78.12 84.17 1.24
PULS Pulse Bancorp 515,936 31.41 24.94 79.41 12.12
PVFC PVF Capital Corp. 356,251 121.66 93.42 76.79 14.41
PVSA Parkvale Financial Corporation 972,597 78.92 70.38 89.18 1.89
PWBC PennFirst Bancorp Inc. 706,237 66.38 31.63 47.65 44.39
PWBK Pennwood Bancorp Inc. 47,929 61.44 46.68 75.97 3.07
QCBC Quaker City Bancorp Inc. 780,843 118.35 82.74 69.91 19.35
QCFB QCF Bancorp Inc. 149,637 NA NA 70.13 10.59
QCSB Queens County Bancorp Inc. 1,373,295 115.57 86.06 74.46 7.72
RARB Raritan Bancorp Inc. 375,138 74.67 65.78 88.09 2.71
RCSB RCSB Financial Inc. 4,104,367 94.89 54.16 57.08 29.87
REDF RedFed Bancorp Inc. 908,660 97.56 85.75 87.89 2.14
RELI Reliance Bancshares Inc. 46,836 151.52 58.38 38.53 12.81
RELY Reliance Bancorp Inc. 1,926,800 61.71 44.98 72.90 17.72
RIVR River Valley Bancorp 138,325 92.54 79.38 85.78 0.36
ROSE TR Financial Corp. 3,404,326 73.60 51.96 70.60 21.11
RSLN Roslyn Bancorp Inc. 2,849,427 37.89 22.92 60.50 15.62
RVSB Riverview Savings Bank (MHC) 224,385 90.08 68.01 75.50 12.22
SBCN Suburban Bancorporation Inc. 221,926 136.10 81.78 60.09 26.83
SBFL SB of the Finger Lakes (MHC) 212,821 58.71 43.73 74.49 15.13
SBOS Boston Bancorp (The) 1,715,070 24.42 19.25 78.85 7.61
SCBS Southern Community Bancshares 70,106 73.15 56.76 77.59 0.00
SCCB S. Carolina Community Bancshrs 46,412 105.88 77.65 73.34 0.00
SECP Security Capital Corporation 3,646,981 120.87 76.72 63.47 18.08
SFED SFS Bancorp Inc. 168,841 82.56 70.60 85.51 0.00
SFFC StateFed Financial Corporation 85,282 133.97 79.59 59.41 22.28
SFIN Statewide Financial Corp. 677,384 72.01 48.76 67.71 22.17
SFNB Security First Network Bank 79,581 14.03 6.82 48.59 1.41
SFSB SuburbFed Financial Corp. 407,800 76.87 61.45 79.93 12.19
SFSL Security First Corp. 634,761 128.70 90.26 70.13 19.49
SGVB SGV Bancorp Inc. 399,776 102.66 72.40 70.53 21.43
SHEN First Shenango Bancorp Inc. 400,915 95.34 64.04 67.17 20.94
SISB SIS Bancorp Inc. 1,403,745 62.84 45.07 71.73 18.67
SKAN Skaneateles Bancorp Inc. 241,425 101.90 85.96 84.35 7.52
SKBO First Carnegie Deposit (MHC) 117,814 54.08 37.46 69.27 14.28
SMBC Southern Missouri Bancorp Inc. 165,688 85.32 64.02 75.03 8.17
SMFC Sho-Me Financial Corp. 304,496 139.54 87.71 62.86 26.62
SOBI Sobieski Bancorp Inc. 79,080 98.14 73.21 74.60 8.98
SOPN First Savings Bancorp Inc. 271,121 92.77 69.24 74.63 0.00
SOSA Somerset Savings Bank 522,150 88.36 75.59 85.55 7.75
SPBC St. Paul Bancorp Inc. 4,484,882 87.38 66.15 75.70 13.70
SRN Southern Banc Company Inc. 104,978 NA NA 82.46 0.00
SSB Scotland Bancorp Inc 68,924 111.91 69.00 61.66 0.00
SSFC South Street Financial Corp. 238,791 78.79 46.53 59.06 14.66
SSM Stone Street Bancorp Inc. 105,491 128.37 80.65 62.83 0.00
STFR St. Francis Capital Corp. 1,578,969 68.62 44.27 64.52 26.48
STND Standard Financial Inc. 2,488,854 85.46 61.04 71.43 16.47
STSA Sterling Financial Corp. 1,557,216 105.01 63.09 60.08 32.61
SVRN Sovereign Bancorp Inc. 10,286,606 114.76 64.00 55.77 37.25
SWBI Southwest Bancshares 371,563 96.42 72.16 74.84 12.77
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank 475,245 87.31 70.70 80.98 9.79
SZB SouthFirst Bancshares Inc. 92,910 105.19 72.25 68.69 15.16
TBK Tolland Bank 237,311 70.03 61.59 87.96 5.01
THR Three Rivers Financial Corp. 91,165 101.03 66.49 65.81 19.02
THRD TF Financial Corporation 644,368 69.40 49.64 71.53 16.04
TPNZ Tappan Zee Financial Inc. 121,841 56.72 45.77 80.70 0.00
TRIC Tri-County Bancorp Inc. 85,975 73.28 41.69 56.89 26.87
TSBS Peoples Bancorp Inc. (MHC) 626,350 79.11 61.24 77.41 4.79
TSH Teche Holding Co. 393,556 123.41 85.48 69.26 16.54
TWIN Twin City Bancorp 104,488 90.30 73.87 81.81 3.83
UBMT United Financial Corp. 107,723 46.33 33.13 71.51 4.64
UFRM United Federal Savings Bank 270,180 83.32 74.40 89.29 0.00
USAB USABancshares, Inc. 39,301 58.62 46.17 78.77 8.03
VABF Virginia Beach Fed. Financial 607,370 112.52 76.22 67.74 24.58
VFFC Virginia First Financial Corp. 817,313 124.32 90.53 72.81 18.01
WAMU Washington Mutual Inc. 46,051,025 134.16 70.79 52.76 40.86
WAYN Wayne Savings & Loan Co. (MHC) 252,175 99.47 83.40 83.85 6.36
WBST Webster Financial Corporation 5,583,619 87.63 63.62 72.61 21.15
WCBI Westco Bancorp 309,921 89.55 73.48 82.05 0.00
WCFB Webster City Federal SB (MHC) 93,160 77.06 57.65 74.82 0.31
WEFC Wells Financial Corp. 201,886 125.36 90.00 71.79 12.88
WEHO Westwood Homestead Fin. Corp. 129,956 120.43 73.28 60.85 8.07
WES Westcorp 3,405,772 95.69 53.63 56.05 18.70
WFCO Winton Financial Corp. 307,174 115.77 86.57 74.77 17.20
WFSG Wilshire Financial Services 1,098,088 177.45 74.82 42.16 46.85
WFSL Washington Federal Inc. 5,760,385 146.15 72.81 49.82 36.31
WHGB WHG Bancshares Corp. 98,458 110.51 80.02 72.41 4.06
WOFC Western Ohio Financial Corp. 400,059 125.17 74.60 59.60 26.57
WRNB Warren Bancorp Inc. 361,273 70.48 62.09 88.09 0.57
WSB Washington Savings Bank, FSB 258,330 58.07 50.63 87.18 3.87
WSFS WSFS Financial Corporation 1,478,119 115.78 59.36 51.27 41.95
WSTR WesterFed Financial Corp. 932,440 94.85 64.53 68.04 18.11
WVFC WVS Financial Corporation 279,894 91.13 54.72 60.04 25.14
WWFC Westwood Financial Corporation 107,981 46.20 37.59 81.36 9.26
WYNE Wayne Bancorp Inc. 245,435 85.65 63.13 73.71 11.00
YFCB Yonkers Financial Corporation 284,401 46.48 32.33 69.57 14.76
YFED York Financial Corp. 1,157,356 102.61 86.69 84.48 5.46
------------------------------------------------------------
Average 1,340,283 93.61 66.47 72.32 13.84
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Key Financial Data as of The Most Recent Quarter
------------------------------------------------------------
Total Loans/ Loans/ Deposits/ Borrowings/
Assets Deposits Assets Assets Assets
Ticker Short Name ($000) (%) (%) (%) (%)
- --------------------------------------- ------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. 237,915 111.18 79.09 71.14 18.91
FBCV 1ST Bancorp 273,090 123.79 66.47 53.70 37.10
HBFW Home Bancorp 327,789 94.05 79.98 85.04 0.00
HMCI HomeCorp Inc. 336,447 84.75 78.24 92.31 0.00
KNK Kankakee Bancorp Inc. 342,379 83.19 67.62 81.28 7.08
MBLF MBLA Financial Corp. 209,783 118.49 55.61 46.93 39.05
MFBC MFB Corp. 234,290 106.94 74.55 69.71 14.73
PFDC Peoples Bancorp 283,242 94.81 79.21 83.54 0.82
WEFC Wells Financial Corp. 201,886 125.36 90.00 71.79 12.88
WCBI Westco Bancorp 309,921 89.55 73.48 82.05 0.00
------------------------------------------------------------
Average 275,674 103.21 74.43 73.75 13.06
Maximum 342,379 125.36 90.00 92.31 39.05
Minimum 201,886 83.19 55.61 46.93 0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB 7.51 5.31 30.94 5.87 8.83 11.69
%CCMD Chevy Chase Bank, FSB 5.64 5.05 11.08 6.59 7.12 13.44
AABC Access Anytime Bancorp, Inc. 6.80 6.80 0.00 6.70 7.23 17.03
AADV Advantage Bancorp Inc. 8.84 8.24 7.36 6.37 9.40 14.81
ABBK Abington Bancorp Inc. 6.88 6.20 10.45 6.27 7.27 13.58
ABCL Alliance Bancorp Inc. 9.31 9.20 1.31 8.28 9.73 15.15
ABCW Anchor BanCorp Wisconsin 6.25 6.14 1.97 5.77 7.46 10.69
AFBC Advance Financial Bancorp 15.45 15.45 0.00 15.44 15.78 26.03
AFCB Affiliated Community Bancorp 9.77 9.71 0.62 9.92 10.52 19.54
AFED AFSALA Bancorp Inc. 13.85 13.82 0.25 13.91 NA 33.88
AFFFZ America First Financial Fund 8.28 8.17 1.42 7.22 8.61 16.63
AHCI Ambanc Holding Co. Inc. 12.72 12.72 0.00 10.00 13.50 24.94
AHM Ahmanson & Company (H.F.) 5.18 4.60 11.88 NA 6.00 NA
ALBC Albion Banc Corp. 8.90 8.90 0.00 NA 9.38 NA
ALBK ALBANK Financial Corporation 9.20 8.08 13.26 7.23 9.92 12.47
AMFB American Federal Bank FSB 8.99 8.43 6.74 8.36 9.85 14.81
AMFC AMB Financial Corp. 16.30 16.30 0.00 12.20 16.67 23.00
ANA Acadiana Bancshares Inc. 17.43 17.43 0.00 13.75 18.42 27.64
ANBK American National Bancorp 8.97 8.97 0.00 NA 9.72 NA
ANDB Andover Bancorp Inc. 8.07 8.07 0.00 8.10 9.09 14.90
ASBI Ameriana Bancorp 10.85 10.84 0.09 9.73 11.12 18.66
ASBP ASB Financial Corp. 15.74 15.74 0.00 12.15 16.54 27.02
ASFC Astoria Financial Corporation 7.60 6.41 16.80 5.43 7.78 15.78
ATSB AmTrust Capital Corp. 10.17 10.07 1.07 10.20 10.83 16.58
AVND Avondale Financial Corp. 8.26 8.26 0.00 8.10 11.48 14.56
BANC BankAtlantic Bancorp Inc. 5.50 4.53 18.61 6.49 6.45 11.12
BDJI First Federal Bancorporation 11.17 11.17 0.00 9.75 11.57 19.42
BFD BostonFed Bancorp Inc. 8.90 8.62 3.44 NA 9.48 NA
BFFC Big Foot Financial Corp. 16.98 16.98 0.00 12.27 17.13 35.40
BFSB Bedford Bancshares Inc. 14.32 14.32 0.00 12.53 14.81 23.17
BKC American Bank of Connecticut 7.98 7.65 4.41 7.65 8.86 13.79
BKCO Bankers Corp. 7.78 7.67 1.60 8.01 8.07 18.17
BKCT Bancorp Connecticut Inc. 10.40 10.40 0.00 10.26 11.60 16.90
BKUNA BankUnited Financial Corp. 6.81 5.98 12.87 8.39 7.00 13.34
BNKU Bank United Corp. 5.17 5.06 2.20 6.93 5.57 12.68
BPLS Bank Plus Corp. 4.92 4.91 0.20 6.47 6.52 12.29
BSBC Branford Savings Bank 9.52 9.52 0.00 9.53 11.70 16.99
BTHL Bethel Bancorp 8.48 7.36 14.28 7.38 9.63 13.39
BVCC Bay View Capital Corp. 6.31 6.02 4.95 6.13 7.23 10.98
BWFC Bank West Financial Corp. 15.31 15.31 0.00 13.30 15.45 26.46
BYFC Broadway Financial Corp. 11.50 11.50 0.00 8.80 12.50 15.09
CAFI Camco Financial Corp. 9.69 8.99 8.00 8.55 9.96 16.04
CAPS Capital Savings Bancorp Inc. 8.66 8.66 0.00 7.85 8.96 16.51
CASB Cascade Financial Corp. 6.17 6.17 0.00 6.30 7.01 11.36
CASH First Midwest Financial Inc. 11.59 10.40 11.51 9.50 12.24 16.20
CATB Catskill Financial Corp. 26.98 26.98 0.00 20.94 27.65 61.28
CBCI Calumet Bancorp Inc. 15.94 15.94 0.00 10.56 17.13 17.53
CBCO CB Bancorp Inc. 9.18 9.18 0.00 8.18 9.97 14.80
CBES CBES Bancorp Inc. 18.39 18.39 0.00 13.54 18.80 17.70
CBK Citizens First Financial Corp. 14.64 14.64 0.00 10.37 14.83 18.82
CBNH Community Bankshares Inc. 7.13 7.13 0.00 7.46 7.84 11.04
CBSA Coastal Bancorp Inc. 3.42 2.91 15.53 5.46 3.66 12.51
CBSB Charter Financial Inc. 14.13 12.62 12.26 11.04 14.72 20.74
CCFH CCF Holding Company 14.31 14.31 0.00 NA 14.96 NA
CEBK Central Co-operative Bank 10.45 9.42 10.95 9.42 11.36 16.22
CENB Century Bancorp Inc. 29.94 29.94 0.00 NA 30.48 NA
CENF CENFED Financial Corp. 5.10 5.10 0.18 5.72 5.82 11.20
CFB Commercial Federal Corporation 5.92 5.30 11.01 6.31 6.64 13.32
CFBC Community First Banking Co. 7.16 7.16 0.00 6.90 7.90 10.90
CFCP Coastal Financial Corp. 6.09 6.09 0.00 6.04 7.02 10.95
CFFC Community Financial Corp. 13.92 13.92 0.00 11.88 14.53 18.46
CFNC Carolina Fincorp Inc. 23.70 23.70 0.00 24.00 24.07 NA
CFSB CFSB Bancorp Inc. 7.63 7.63 0.00 7.36 8.18 13.25
CFTP Community Federal Bancorp 33.52 33.52 0.00 31.75 33.80 74.87
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation 7.67 7.19 6.79 7.91 8.57 14.20
CIBI Community Investors Bancorp 11.52 11.52 0.00 10.40 11.99 20.60
CKFB CKF Bancorp Inc. 23.68 23.68 0.00 20.31 23.86 35.60
CLAS Classic Bancshares Inc. 14.72 12.72 15.62 12.00 15.33 25.60
CMRN Cameron Financial Corp 22.96 22.96 0.00 17.95 23.77 26.76
CMSB Commonwealth Bancorp Inc. 9.57 7.51 23.21 6.60 10.02 14.30
CMSV Community Savings (MHC) 11.23 11.23 0.00 11.40 11.60 24.13
CNIT CENIT Bancorp Inc. 7.10 6.53 8.55 NA 7.65 NA
CNSB CNS Bancorp Inc. 24.81 24.81 0.00 19.65 25.18 41.96
CNY Carver Bancorp Inc. 8.06 7.75 4.26 6.96 8.59 16.00
COFD Collective Bancorp Inc. 7.28 6.68 8.85 NA 7.52 NA
COFI Charter One Financial 6.78 6.33 6.98 5.25 7.25 10.67
CONE Conestoga Bancorp, Inc. 16.18 16.18 0.00 12.17 16.22 27.71
COOP Cooperative Bankshares Inc. 7.49 7.49 0.00 7.63 7.73 14.74
CRZY Crazy Woman Creek Bancorp 27.84 27.84 0.00 19.97 28.39 48.63
CSA Coast Savings Financial 4.96 4.89 1.37 5.36 5.91 10.93
CSBF CSB Financial Group Inc. 25.07 23.98 5.74 25.61 25.38 55.70
CTZN CitFed Bancorp Inc. 6.33 5.68 10.92 6.06 6.90 13.78
CVAL Chester Valley Bancorp Inc. 8.56 8.56 0.00 8.49 9.45 15.36
CZF CitiSave Financial Corp 16.62 16.62 0.00 14.61 16.72 31.93
DCBI Delphos Citizens Bancorp Inc. 28.35 28.35 0.00 19.10 28.44 43.70
DIBK Dime Financial Corp. 7.83 7.56 3.66 8.33 9.39 19.95
DIME Dime Community Bancorp Inc. 15.42 13.53 14.19 10.45 16.22 21.55
DME Dime Bancorp Inc. 5.71 5.66 0.93 6.32 6.27 13.30
DNFC D & N Financial Corp. 5.81 5.75 1.11 5.15 6.53 9.90
DSL Downey Financial Corp. 7.30 7.20 1.47 6.54 7.86 12.58
EBSI Eagle Bancshares 8.71 8.71 0.00 6.70 9.29 11.60
EFBC Empire Federal Bancorp Inc. 36.85 36.85 0.00 23.16 37.04 67.09
EFBI Enterprise Federal Bancorp 12.33 12.32 0.11 11.40 12.52 21.30
EGFC Eagle Financial Corp. 6.90 5.28 24.73 5.35 7.48 13.09
EGLB Eagle BancGroup Inc. 12.10 12.10 0.00 9.81 12.64 18.01
EIRE Emerald Isle Bancorp Inc. 6.96 6.96 0.00 6.96 7.62 12.25
EMLD Emerald Financial Corp. 7.50 7.39 1.71 7.25 7.76 12.38
EQSB Equitable Federal Savings Bank 5.07 5.07 0.00 5.07 5.28 11.29
ESBK Elmira Savings Bank (The) 6.30 6.05 4.26 6.11 6.93 9.97
ESX Essex Bancorp Inc. 8.41 8.30 1.36 8.38 9.72 14.25
ETFS East Texas Financial Services 19.03 19.03 0.00 16.22 19.27 45.19
FAB FirstFed America Bancorp Inc. 12.47 12.47 0.00 10.34 13.37 20.24
FBBC First Bell Bancorp Inc. 10.20 10.20 0.00 9.18 10.29 22.37
FBCI Fidelity Bancorp Inc. 10.19 10.17 0.26 8.53 10.36 18.33
FBCV 1ST Bancorp 7.97 7.80 2.22 8.24 8.33 15.69
FBER 1st Bergen Bancorp 16.44 16.44 0.00 11.30 17.63 28.90
FBHC Fort Bend Holding Corp. 6.25 5.81 7.31 NA 6.70 14.77
FBNW FirstBank Corp. 7.98 7.98 0.00 7.98 8.52 14.14
FBSI First Bancshares Inc. 14.35 14.33 0.14 11.70 14.64 18.40
FCB Falmouth Co-Operative Bank 24.45 24.45 0.00 24.70 25.00 45.99
FCBF FCB Financial Corp. 17.49 17.49 0.00 14.12 18.01 24.23
FCIT First Citizens Financial Corp. 6.11 6.11 0.00 6.10 7.10 10.60
FCME First Coastal Corporation 8.88 8.88 0.00 8.73 10.67 15.68
FDEF First Defiance Financial 21.42 21.42 0.00 12.60 21.84 23.00
FED FirstFed Financial Corp. 4.73 4.67 1.28 5.85 6.66 11.58
FESX First Essex Bancorp Inc. 7.31 6.36 13.84 6.39 8.19 12.06
FFBA First Colorado Bancorp Inc. 12.73 12.57 1.40 11.27 12.99 21.92
FFBH First Federal Bancshares of AR 15.82 15.82 0.00 12.23 16.06 23.15
FFBI First Financial Bancorp Inc. 7.80 7.80 0.00 7.60 8.34 15.08
FFBS FFBS BanCorp Inc. 19.42 19.42 0.00 16.10 19.88 30.10
FFBZ First Federal Bancorp Inc. 7.66 7.65 0.12 6.88 8.55 11.64
FFCH First Financial Holdings Inc. 6.15 6.15 0.00 6.68 6.86 11.05
FFDB FirstFed Bancorp Inc. 10.06 9.30 8.30 9.40 10.47 15.99
FFDF FFD Financial Corp. 24.74 24.74 0.00 15.80 24.91 34.10
FFED Fidelity Federal Bancorp 5.14 5.14 0.00 6.63 5.85 10.89
FFES First Federal of East Hartford 6.25 6.25 0.00 6.56 6.53 21.71
FFFC FFVA Financial Corp. 12.98 12.73 2.21 9.97 13.58 20.54
FFFD North Central Bancshares Inc. 24.59 24.59 0.00 22.27 25.58 41.09
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. 6.49 6.49 0.00 6.20 8.23 12.60
FFFL Fidelity Bankshares Inc. (MHC) 8.82 8.75 0.83 8.80 9.05 17.70
FFHC First Financial Corp. 6.98 6.79 2.93 6.45 7.38 15.20
FFHH FSF Financial Corp. 11.77 11.77 0.00 10.60 11.99 21.00
FFHS First Franklin Corporation 8.82 8.76 0.71 6.38 9.24 14.72
FFIC Flushing Financial Corp. 16.02 16.02 0.00 12.22 16.69 27.06
FFKY First Federal Financial Corp. 13.60 12.88 6.09 11.92 14.07 19.64
FFLC FFLC Bancorp Inc. 14.47 14.47 0.00 11.40 14.79 25.20
FFOH Fidelity Financial of Ohio 13.11 11.71 12.11 9.80 13.42 19.40
FFPB First Palm Beach Bancorp Inc. 6.76 6.60 2.59 6.20 7.27 12.10
FFSL First Independence Corp. 10.50 10.50 0.00 8.22 11.14 19.32
FFSX First Fed SB of Siouxland(MHC) 8.13 8.07 0.89 8.19 8.52 17.21
FFWC FFW Corp. 10.01 10.01 0.00 8.18 10.34 14.83
FFWD Wood Bancorp Inc. 12.70 12.70 0.00 8.29 13.03 14.77
FFYF FFY Financial Corp. 14.10 14.10 0.00 9.94 14.62 17.67
FGHC First Georgia Holding Inc. 8.48 7.80 8.71 8.46 9.16 10.52
FIBC Financial Bancorp Inc. 9.73 9.68 0.51 7.43 10.20 18.94
FISB First Indiana Corporation 9.59 9.47 1.28 8.93 10.92 12.76
FKFS First Keystone Financial 7.07 7.07 0.00 7.25 7.92 16.49
FKKY Frankfort First Bancorp Inc. 26.19 26.19 0.00 23.65 26.27 46.49
FLAG FLAG Financial Corp. 9.40 9.40 0.00 8.99 11.40 14.85
FLFC First Liberty Financial Corp. 7.34 6.62 10.53 6.41 8.21 11.28
FLGS Flagstar Bancorp Inc. 5.46 NA NA 5.43 5.73 10.06
FLKY First Lancaster Bancshares 34.24 34.24 0.00 31.06 34.49 58.13
FMBD First Mutual Bancorp Inc. 13.41 10.65 23.05 20.61 13.74 21.26
FMCO FMS Financial Corporation 6.29 6.17 2.08 7.23 6.80 15.11
FMSB First Mutual Savings Bank 6.68 6.68 0.00 6.80 7.65 NA
FNGB First Northern Capital Corp. 11.51 11.51 0.00 10.60 11.99 17.51
FOBC Fed One Bancorp 11.61 11.12 4.73 10.11 12.03 25.26
FPRY First Financial Bancorp 6.35 6.35 0.00 6.20 7.00 10.80
FRC First Republic Bancorp 7.41 7.41 0.08 7.40 8.25 15.08
FSBI Fidelity Bancorp Inc. 6.96 6.96 0.00 7.10 7.47 14.90
FSFC First Southeast Financial Corp 10.23 10.23 0.00 9.87 10.62 20.76
FSLA First Savings Bank (MHC) 9.19 8.23 11.40 8.31 9.73 21.85
FSNJ First Savings Bk of NJ (MHC) 8.57 8.57 0.00 9.13 9.08 26.41
FSPG First Home Bancorp Inc. 6.59 6.48 1.80 6.50 7.33 16.49
FSPT FirstSpartan Financial Corp. 12.37 12.37 0.00 12.40 12.65 21.50
FSSB First FS&LA of San Bernardino 4.33 4.18 3.63 4.29 5.38 8.52
FSTC First Citizens Corp. 9.13 7.01 24.99 6.70 10.28 10.29
FTF Texarkana First Financial Corp 16.03 16.03 0.00 16.04 16.71 27.37
FTFC First Federal Capital Corp. 6.36 5.98 6.28 5.98 6.87 12.22
FTNB Fulton Bancorp Inc. 25.01 25.01 0.00 16.40 25.87 29.40
FTSB Fort Thomas Financial Corp. 16.09 16.09 0.00 14.66 16.60 24.06
FWWB First SB of Washington Bancorp 14.75 13.73 8.01 13.68 15.42 26.77
GAF GA Financial Inc. 17.26 17.11 1.07 14.43 17.43 36.88
GBCI Glacier Bancorp Inc. 9.56 9.32 2.81 9.48 10.16 17.05
GDVS Greater Delaware Valley (MHC) 11.48 11.48 0.00 12.11 12.69 27.91
GDW Golden West Financial 6.26 6.26 0.00 6.37 6.81 13.74
GFCO Glenway Financial Corp. 9.56 9.42 1.56 8.50 9.83 13.70
GFED Guaranty Federal SB (MHC) 13.83 13.83 0.00 13.02 14.94 24.16
GFSB GFS Bancorp Inc. 11.57 11.57 0.00 9.83 12.27 18.33
GLBK Glendale Co-Operative Bank 16.38 16.38 0.00 16.43 16.66 NA
GLN Glendale Federal Bank FSB 6.41 6.04 6.19 6.05 7.49 11.82
GOSB GSB Financial Corporation 12.68 12.68 0.00 12.57 NA 22.10
GPT GreenPoint Financial Corp. 10.81 6.49 42.71 6.20 11.60 15.01
GRTR Greater New York Savings Bank 8.28 8.28 0.00 7.31 8.92 15.35
GSBC Great Southern Bancorp Inc. 8.97 8.97 0.00 7.91 11.24 11.78
GSFC Green Street Financial Corp. 36.08 36.08 0.00 36.08 36.21 84.35
GSLA GS Financial Corp. 18.28 18.28 0.00 17.97 18.56 61.34
GTFN Great Financial Corporation 9.30 8.93 4.36 8.21 9.77 18.88
GTPS Great American Bancorp 21.15 21.15 0.00 18.59 21.45 33.45
GUPB GFSB Bancorp Inc. 16.30 16.30 0.00 NA 16.66 NA
GWBC Gateway Bancorp Inc. 26.09 26.09 0.00 22.91 26.21 NA
HALL Hallmark Capital Corp. 6.99 6.99 0.00 6.25 7.39 11.54
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. 8.22 7.93 3.75 7.93 9.24 16.52
HARL Harleysville Savings Bank 6.36 6.36 0.00 6.57 6.92 13.45
HARS Harris Savings Bank (MHC) 7.91 6.90 13.73 6.85 8.35 13.85
HAVN Haven Bancorp Inc. 5.80 5.77 0.41 6.81 6.46 14.82
HBBI Home Building Bancorp 12.07 12.07 0.00 9.57 12.24 20.62
HBEI Home Bancorp of Elgin Inc. 28.11 28.11 0.00 20.15 28.38 41.42
HBFW Home Bancorp 13.95 13.95 0.00 12.01 14.37 26.80
HBNK Highland Federal Bank FSB 7.46 7.46 0.00 7.54 9.32 11.53
HBS Haywood Bancshares Inc. 14.13 13.68 3.71 NA 14.63 NA
HCBB HCB Bancshares Inc. 7.76 7.01 10.40 NA 8.55 NA
HCFC Home City Financial Corp. 20.61 20.61 0.00 15.59 21.29 29.31
HEMT HF Bancorp Inc. 8.21 6.82 18.19 5.94 8.74 15.72
HFFB Harrodsburg First Fin Bancorp 26.36 26.36 0.00 20.90 26.63 41.60
HFFC HF Financial Corp. 9.19 9.17 0.25 7.47 9.99 13.18
HFGI Harrington Financial Group 4.78 4.78 0.00 6.69 4.82 31.69
HFNC HFNC Financial Corp. 18.83 18.83 0.00 19.44 19.77 37.09
HFSA Hardin Bancorp Inc. 12.78 12.78 0.00 11.19 12.93 28.85
HHFC Harvest Home Financial Corp. 12.50 12.50 0.00 NA 12.63 NA
HIFS Hingham Instit. for Savings 9.55 9.55 0.00 9.85 10.25 16.15
HMCI HomeCorp Inc. 6.30 6.30 0.00 4.91 6.78 8.44
HMLK Hemlock Federal Financial Corp 18.28 18.28 0.00 10.37 18.74 35.38
HMNF HMN Financial Inc. 14.24 14.24 0.00 11.60 14.68 27.96
HOMF Home Federal Bancorp 8.45 8.20 3.25 8.06 8.97 12.11
HPBC Home Port Bancorp Inc. 10.82 10.82 0.00 10.85 12.10 18.43
HRBF Harbor Federal Bancorp Inc. 12.86 12.86 0.00 11.09 13.03 27.25
HRZB Horizon Financial Corp. 15.23 15.23 0.00 15.22 15.90 30.43
HTHR Hawthorne Financial Corp. 5.27 5.27 0.00 6.67 6.90 11.11
HVFD Haverfield Corporation 8.39 8.39 0.00 7.21 9.26 11.19
HWEN Home Financial Bancorp 18.63 18.63 0.00 15.20 19.15 28.80
HZFS Horizon Financial Svcs Corp. 10.50 10.50 0.00 7.90 10.87 14.80
IBSF IBS Financial Corp. 17.03 17.03 0.00 16.87 17.18 61.20
IFSB Independence Federal Savings 6.52 5.76 12.36 5.76 6.73 14.75
IFSL Indiana Federal Corporation 8.78 8.30 6.04 6.50 9.63 10.43
INBI Industrial Bancorp 18.49 18.49 0.00 16.30 18.97 31.43
INCB Indiana Community Bank SB 12.39 12.39 0.00 NA 12.95 NA
IPSW Ipswich Savings Bank 6.16 6.16 0.00 6.18 7.12 13.31
ISBF ISB Financial Corporation 12.19 10.53 15.21 10.33 12.69 21.08
ITLA ITLA Capital Corp. 11.37 11.33 0.44 11.01 12.71 14.22
IWBK InterWest Bancorp Inc. 6.71 6.56 2.31 6.69 7.19 14.15
JOAC Joachim Bancorp Inc. 28.98 28.98 0.00 22.70 29.19 46.70
JSBA Jefferson Savings Bancorp 8.20 6.37 23.83 6.66 8.81 11.86
JSBF JSB Financial Inc. 22.17 22.17 0.00 13.76 22.53 20.17
JXSB Jacksonville Savings Bk (MHC) 10.30 10.30 0.00 10.00 10.79 14.80
JXVL Jacksonville Bancorp Inc. 15.63 15.63 0.00 13.90 16.13 28.00
KFBI Klamath First Bancorp 20.44 20.44 0.00 17.92 20.61 38.14
KNK Kankakee Bancorp Inc. 10.68 10.06 6.39 8.66 11.36 16.30
KSAV KS Bancorp Inc. 13.83 13.82 0.06 NA 14.13 13.63
KSBK KSB Bancorp Inc. 7.17 6.77 5.92 6.77 7.89 11.49
KYF Kentucky First Bancorp Inc. 16.11 16.11 0.00 14.15 16.54 26.81
LARK Landmark Bancshares Inc. 14.63 14.63 0.00 12.16 15.00 27.30
LARL Laurel Capital Group Inc. 10.42 10.42 0.00 10.40 11.35 21.41
LFBI Little Falls Bancorp Inc. 12.93 12.03 7.97 8.71 13.27 27.28
LFCO Life Financial Corp. 7.30 7.30 0.00 7.19 8.44 10.51
LFED Leeds Federal Savings Bk (MHC) 16.18 16.18 0.00 15.91 16.37 35.48
LIFB Life Bancorp Inc. 10.78 10.49 3.06 8.91 11.49 22.07
LISB Long Island Bancorp Inc. 9.01 8.93 0.96 7.39 9.59 14.94
LOGN Logansport Financial Corp. 19.65 19.65 0.00 19.87 19.96 38.01
LONF London Financial Corporation 19.87 19.87 0.00 15.50 20.36 29.70
LSBI LSB Financial Corp. 9.08 9.08 0.00 8.29 10.00 11.69
LSBX Lawrence Savings Bank 8.78 8.78 0.00 8.90 9.82 18.21
LVSB Lakeview Financial 9.52 7.76 20.04 NA NA NA
LXMO Lexington B&L Financial Corp. 27.62 27.62 0.00 22.60 27.99 45.00
MAFB MAF Bancorp Inc. 7.88 6.92 13.18 7.01 8.44 14.96
MARN Marion Capital Holdings 23.05 23.05 0.00 20.28 24.21 31.62
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. 9.98 9.98 0.00 9.85 10.23 35.51
MBB MSB Bancorp Inc. 8.44 4.69 46.66 5.60 8.69 NA
MBBC Monterey Bay Bancorp Inc. 10.74 9.94 8.32 8.54 11.08 19.61
MBLF MBLA Financial Corp. 13.50 13.50 0.00 12.92 13.77 36.14
MBSP Mitchell Bancorp Inc. 43.32 43.32 0.00 33.80 43.82 60.50
MCBN Mid-Coast Bancorp Inc. 8.60 8.60 0.00 8.53 9.11 15.24
MCBS Mid Continent Bancshares Inc. 10.04 10.04 0.00 9.11 10.15 24.05
MDBK Medford Savings Bank 8.80 8.20 7.42 8.41 9.46 15.93
MECH Mechanics Savings Bank 9.73 9.73 0.00 10.15 10.87 19.34
MERI Meritrust Federal SB 7.90 7.90 0.00 7.90 8.21 18.03
METF Metropolitan Financial Corp. 3.81 3.43 10.34 5.46 4.39 8.41
MFBC MFB Corp. 14.51 14.51 0.00 13.84 14.66 30.36
MFCX Marshalltown Financial Corp. 15.61 15.61 0.00 12.01 15.71 32.68
MFFC Milton Federal Financial Corp. 14.74 14.74 0.00 12.20 15.04 26.30
MFLR Mayflower Co-operative Bank 9.43 9.28 1.77 9.43 10.36 16.80
MFSL Maryland Federal Bancorp 8.38 8.29 1.25 NA NA NA
MGNL Magna Bancorp Inc. 9.56 9.28 3.27 8.02 10.30 16.45
MIFC Mid-Iowa Financial Corp. 9.09 9.08 0.12 7.50 9.33 19.05
MIVI Mississippi View Holding Co. 18.26 18.26 0.00 15.74 19.50 33.06
MLBC ML Bancorp Inc. 6.92 NA NA NA 7.68 NA
MONT Montgomery Financial Corp. 9.83 9.83 0.00 9.40 10.01 13.80
MRKF Market Financial Corporation 34.60 34.60 0.00 22.60 34.69 68.80
MSBF MSB Financial Inc. 16.61 16.61 0.00 12.89 17.11 21.97
MSBK Mutual Savings Bank FSB 6.01 6.01 0.00 6.33 6.29 17.18
MWBI Midwest Bancshares Inc. 6.94 6.94 0.00 6.47 7.44 15.77
MWBX MetroWest Bank 7.33 7.33 0.00 7.58 8.38 10.84
MWFD Midwest Federal Financial 8.61 8.30 3.90 7.58 9.37 11.99
NASB North American Savings Bank 7.97 7.73 3.25 8.00 8.85 13.04
NBN Northeast Bancorp 7.76 6.88 12.17 7.00 8.81 12.20
NBSI North Bancshares Inc. 14.61 14.61 0.00 13.70 14.78 32.40
NEIB Northeast Indiana Bancorp 15.16 15.16 0.00 12.54 15.79 21.47
NHTB New Hampshire Thrift Bncshrs 7.48 6.41 15.26 6.04 8.41 10.35
NMSB NewMil Bancorp Inc. 9.97 9.97 0.00 10.40 11.57 20.00
NSBC NewSouth Bancorp, Inc. 7.52 7.52 0.00 8.53 8.51 13.10
NSLB NS&L Bancorp Inc. 19.92 19.92 0.00 15.00 20.00 35.40
NSSB Norwich Financial Corp. 10.99 9.97 10.28 10.18 12.99 14.07
NSSY Norwalk Savings Society 8.06 7.79 3.56 8.03 9.25 15.94
NTMG Nutmeg Federal S&LA 6.17 6.17 0.00 6.24 6.73 10.61
NWEQ Northwest Equity Corp. 11.42 11.42 0.00 NA 11.90 NA
NWSB Northwest Savings Bank (MHC) 9.72 9.18 6.09 9.35 10.39 18.80
NYB New York Bancorp Inc. 5.06 5.06 0.00 4.91 5.68 11.76
OCFC Ocean Financial Corp. 17.82 17.82 0.00 11.44 18.26 30.85
OCWN Ocwen Financial Corporation 8.50 8.50 0.00 9.48 9.31 13.22
OFCP Ottawa Financial Corp. 8.84 7.20 19.96 6.44 9.19 10.60
OHSL OHSL Financial Corp. 11.04 11.04 0.00 8.92 11.26 18.74
PALM Palfed, Inc. 8.11 8.11 0.00 6.90 9.17 10.70
PAMM PacificAmerica Money Center 22.43 22.43 0.00 15.76 24.02 17.94
PBCI Pamrapo Bancorp Inc. 12.80 12.71 0.84 12.23 13.55 26.16
PBCT People's Bank (MHC) 8.41 8.40 0.14 7.10 9.55 14.30
PBKB People's Bancshares Inc. 5.61 5.39 4.21 5.89 6.41 13.23
PBNB People's Savings Financial Cp. 9.61 9.05 6.32 9.12 9.99 18.67
PCBC Perry County Financial Corp. 18.32 18.32 0.00 15.93 18.35 73.70
PCCI Pacific Crest Capital 7.22 7.22 0.00 7.36 8.24 11.48
PDB Piedmont Bancorp Inc. 16.96 16.96 0.00 15.68 17.61 29.77
PEEK Peekskill Financial Corp. 25.58 25.58 0.00 24.50 25.91 97.73
PERM Permanent Bancorp Inc. 9.23 9.16 0.83 8.27 9.73 20.80
PERT Perpetual Bank (MHC) 12.13 12.13 0.00 11.30 12.81 20.40
PETE Primary Bank 6.62 6.61 0.19 6.81 7.19 13.05
PFDC Peoples Bancorp 15.18 15.18 0.00 12.60 15.49 26.80
PFED Park Bancorp Inc. 21.69 21.69 0.00 16.90 21.97 60.60
PFFB PFF Bancorp Inc. 10.47 10.37 1.12 8.46 11.56 16.54
PFFC Peoples Financial Corp. 26.90 26.90 0.00 19.20 27.12 46.00
PFNC Progress Financial Corporation 5.21 4.59 12.40 5.16 6.04 8.68
PFSB PennFed Financial Services Inc 7.53 6.29 17.54 5.70 7.75 12.31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) 6.38 6.38 0.00 6.38 6.85 16.95
PHBK Peoples Heritage Finl Group 8.21 7.02 15.58 9.05 9.43 15.36
PHFC Pittsburgh Home Financial Corp 11.47 11.35 1.17 20.63 12.00 9.39
PHSB Peoples Home Savings Bk (MHC) 8.23 8.23 0.00 7.94 8.94 15.63
PKPS Poughkeepsie Financial Corp. 8.42 8.42 0.00 6.86 9.52 11.61
PLSK Pulaski Savings Bank (MHC) 6.60 NA NA 6.60 NA 17.33
PMFI Perpetual Midwest Financial 8.49 8.49 0.00 7.84 9.20 12.51
POBS Portsmouth Bank Shares 25.13 25.13 0.00 24.00 25.39 60.40
PRBC Prestige Bancorp Inc. 11.69 11.69 0.00 11.97 11.94 26.81
PROV Provident Financial Holdings 14.22 14.22 0.00 9.83 15.09 17.19
PSBK Progressive Bank Inc. 8.35 7.47 11.41 7.39 9.43 14.43
PSFC Peoples-Sidney Financial Corp. 10.15 10.15 0.00 10.20 10.57 16.10
PSFI PS Financial Inc. 43.23 43.23 0.00 43.10 43.48 15.59
PTRS Potters Financial Corp. 8.90 8.90 0.00 8.53 10.83 19.60
PULB Pulaski Bank, Svgs Bank (MHC) 13.00 13.00 0.00 13.00 13.26 30.80
PULS Pulse Bancorp 7.80 7.80 0.00 7.36 8.25 26.96
PVFC PVF Capital Corp. 7.02 7.02 0.00 NA 7.76 NA
PVSA Parkvale Financial Corporation 7.48 7.42 0.83 6.97 8.94 14.80
PWBC PennFirst Bancorp Inc. 7.07 6.49 8.78 6.01 7.57 19.16
PWBK Pennwood Bancorp Inc. 19.47 19.47 0.00 19.76 20.13 39.39
QCBC Quaker City Bancorp Inc. 8.91 8.90 0.13 7.33 9.94 12.31
QCFB QCF Bancorp Inc. 18.09 18.09 0.00 NA NA NA
QCSB Queens County Bancorp Inc. 14.98 14.98 0.00 10.09 15.66 18.16
RARB Raritan Bancorp Inc. 7.68 7.55 1.80 7.54 8.51 13.76
RCSB RCSB Financial Inc. 7.62 7.45 2.41 NA 8.26 NA
REDF RedFed Bancorp Inc. 8.18 8.17 0.11 7.80 9.31 11.59
RELI Reliance Bancshares Inc. 47.98 NA NA 47.59 48.29 85.04
RELY Reliance Bancorp Inc. 8.04 5.77 29.89 5.43 8.29 14.95
RIVR River Valley Bancorp 12.36 12.19 1.56 15.72 13.21 31.10
ROSE TR Financial Corp. 6.16 6.16 0.00 6.39 6.59 18.35
RSLN Roslyn Bancorp Inc. 21.57 21.48 0.53 NA 22.39 NA
RVSB Riverview Savings Bank (MHC) 11.15 10.22 9.31 10.26 11.52 20.93
SBCN Suburban Bancorporation Inc. 11.67 11.67 0.00 10.30 13.08 19.90
SBFL SB of the Finger Lakes (MHC) 9.45 9.45 0.00 9.69 9.99 26.10
SBOS Boston Bancorp (The) 12.34 12.34 0.00 10.06 12.45 26.75
SCBS Southern Community Bancshares 21.97 21.97 0.00 NA 23.11 NA
SCCB S. Carolina Community Bancshrs 25.96 25.96 0.00 23.20 26.59 48.90
SECP Security Capital Corporation 15.85 15.85 0.00 17.45 16.97 18.70
SFED SFS Bancorp Inc. 12.99 12.99 0.00 12.98 13.39 25.17
SFFC StateFed Financial Corporation 17.60 17.60 0.00 11.27 17.90 19.46
SFIN Statewide Financial Corp. 9.30 9.29 0.20 9.02 9.70 24.56
SFNB Security First Network Bank 42.48 42.09 1.57 NA 42.57 NA
SFSB SuburbFed Financial Corp. 6.56 6.54 0.43 5.93 6.76 14.01
SFSL Security First Corp. 9.36 9.22 1.73 7.92 10.15 11.38
SGVB SGV Bancorp Inc. 7.27 7.15 1.80 6.34 7.57 14.25
SHEN First Shenango Bancorp Inc. 10.70 10.70 0.00 8.80 11.43 17.69
SISB SIS Bancorp Inc. 7.22 7.22 0.00 7.07 8.38 13.71
SKAN Skaneateles Bancorp Inc. 6.87 6.65 3.29 6.60 7.68 11.32
SKBO First Carnegie Deposit (MHC) 12.47 12.47 0.00 12.50 12.71 49.30
SMBC Southern Missouri Bancorp Inc. 15.67 15.67 0.00 12.61 16.08 25.01
SMFC Sho-Me Financial Corp. 9.54 9.54 0.00 8.48 10.15 16.10
SOBI Sobieski Bancorp Inc. 15.40 15.40 0.00 11.20 15.66 29.00
SOPN First Savings Bancorp Inc. 24.61 24.61 0.00 24.60 24.83 55.17
SOSA Somerset Savings Bank 5.91 5.91 0.00 5.95 7.18 9.62
SPBC St. Paul Bancorp Inc. 8.74 8.71 0.31 8.66 9.52 16.92
SRN Southern Banc Company Inc. 16.89 16.75 1.04 NA NA NA
SSB Scotland Bancorp Inc 36.69 36.69 0.00 27.80 37.03 56.53
SSFC South Street Financial Corp. 25.45 25.45 0.00 25.45 25.62 74.20
SSM Stone Street Bancorp Inc. 35.84 35.84 0.00 NA 36.34 NA
STFR St. Francis Capital Corp. 8.10 7.19 12.01 6.72 8.48 12.75
STND Standard Financial Inc. 10.90 10.89 0.14 8.36 11.20 20.43
STSA Sterling Financial Corp. 5.58 5.00 10.88 6.71 6.09 11.69
SVRN Sovereign Bancorp Inc. 4.98 3.95 21.62 4.87 5.47 14.88
SWBI Southwest Bancshares 10.79 10.79 0.00 8.05 10.99 16.62
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank 8.24 7.89 4.68 8.08 9.04 14.81
SZB SouthFirst Bancshares Inc. 13.98 13.98 0.00 13.98 14.27 22.05
TBK Tolland Bank 6.73 6.54 3.09 6.90 7.93 12.90
THR Three Rivers Financial Corp. 13.76 13.71 0.40 11.65 14.29 22.81
THRD TF Financial Corporation 10.84 9.58 12.86 7.98 11.14 18.36
TPNZ Tappan Zee Financial Inc. 17.42 17.42 0.00 NA 17.96 NA
TRIC Tri-County Bancorp Inc. 15.31 15.31 0.00 15.30 15.80 34.10
TSBS Peoples Bancorp Inc. (MHC) 16.66 15.44 8.60 15.22 17.11 26.89
TSH Teche Holding Co. 13.31 13.31 0.00 11.53 14.14 22.90
TWIN Twin City Bancorp 12.92 12.92 0.00 12.46 13.16 22.69
UBMT United Financial Corp. 22.65 22.65 0.00 15.20 22.72 40.40
UFRM United Federal Savings Bank 7.60 7.60 0.00 7.52 8.65 11.81
USAB USABancshares, Inc. 12.62 12.34 2.54 11.65 13.15 24.30
VABF Virginia Beach Fed. Financial 6.78 6.78 0.00 6.69 7.52 12.72
VFFC Virginia First Financial Corp. 8.06 7.80 3.47 7.66 9.14 11.77
WAMU Washington Mutual Inc. 5.27 5.00 5.38 NA 6.07 NA
WAYN Wayne Savings & Loan Co. (MHC) 9.17 9.17 0.00 9.16 9.53 17.45
WBST Webster Financial Corporation 5.08 4.31 15.86 6.09 5.99 13.49
WCBI Westco Bancorp 15.57 15.57 0.00 13.51 15.85 30.45
WCFB Webster City Federal SB (MHC) 23.55 23.55 0.00 23.56 23.94 54.22
WEFC Wells Financial Corp. 14.23 14.23 0.00 10.57 14.56 19.02
WEHO Westwood Homestead Fin. Corp. 30.95 30.95 0.00 26.04 31.09 42.18
WES Westcorp 9.39 9.37 0.28 10.37 10.57 10.30
WFCO Winton Financial Corp. 7.15 7.00 2.24 6.90 7.43 11.20
WFSG Wilshire Financial Services 5.85 5.85 0.00 NA 11.98 NA
WFSL Washington Federal Inc. 12.08 11.15 8.66 10.34 12.52 18.88
WHGB WHG Bancshares Corp. 21.89 21.89 0.00 15.16 22.11 32.02
WOFC Western Ohio Financial Corp. 13.41 12.74 5.75 12.35 13.85 24.13
WRNB Warren Bancorp Inc. 10.10 10.10 0.00 9.76 11.22 15.07
WSB Washington Savings Bank, FSB 8.30 8.30 0.00 7.81 8.77 19.59
WSFS WSFS Financial Corporation 5.13 5.08 0.92 6.66 6.81 10.78
WSTR WesterFed Financial Corp. 10.98 8.88 21.00 8.51 11.47 14.96
WVFC WVS Financial Corporation 12.72 12.72 0.00 13.11 13.44 29.21
WWFC Westwood Financial Corporation 9.21 8.25 11.38 6.81 9.42 19.10
WYNE Wayne Bancorp Inc. 14.56 14.56 0.00 11.07 15.34 26.59
YFCB Yonkers Financial Corporation 15.29 15.29 0.00 12.89 15.67 35.16
YFED York Financial Corp. 8.43 8.43 0.00 7.34 8.99 11.83
----------------------------------------------------------------------------------
Average 12.36 12.08 2.96 10.85 12.99 22.32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves/ Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- --------------------------------------- -----------------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. 8.66 8.66 0.00 7.85 8.96 16.51
FBCV 1ST Bancorp 7.97 7.80 2.22 8.24 8.33 15.69
HBFW Home Bancorp 13.95 13.95 0.00 12.01 14.37 26.80
HMCI HomeCorp Inc. 6.30 6.30 0.00 4.91 6.78 8.44
KNK Kankakee Bancorp Inc. 10.68 10.06 6.39 8.66 11.36 16.30
MBLF MBLA Financial Corp. 13.50 13.50 0.00 12.92 13.77 36.14
MFBC MFB Corp. 14.51 14.51 0.00 13.84 14.66 30.36
PFDC Peoples Bancorp 15.18 15.18 0.00 12.60 15.49 26.80
WEFC Wells Financial Corp. 14.23 14.23 0.00 10.57 14.56 19.02
WCBI Westco Bancorp 15.57 15.57 0.00 13.51 15.85 30.45
------------------------------------------------------------------------------
Average 12.06 11.98 0.86 10.51 12.41 22.65
Maximum 15.57 15.57 6.39 13.84 15.85 36.14
Minimum 6.30 6.30 0.00 4.91 6.78 8.44
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB 1.79 105.10 1.52 20.21 1.89 86.98 1.05 13.67
%CCMD Chevy Chase Bank, FSB 1.45 172.23 2.65 47.07 2.51 55.76 0.76 14.27
AABC Access Anytime Bancorp, Inc. 3.33 28.14 1.59 23.43 0.94 26.80 0.42 7.20
AADV Advantage Bancorp Inc. 0.54 188.91 0.56 6.30 1.01 102.27 1.01 11.21
ABBK Abington Bancorp Inc. 0.26 244.65 0.24 3.52 0.64 133.04 0.86 12.49
ABCL Alliance Bancorp Inc. 0.16 311.07 0.18 1.89 0.50 236.73 0.52 5.74
ABCW Anchor BanCorp Wisconsin 0.48 319.36 0.75 11.95 1.53 161.56 1.01 15.44
AFBC Advance Financial Bancorp 0.45 89.84 0.37 2.40 0.40 89.84 0.90 5.77
AFCB Affiliated Community Bancorp 0.73 163.83 0.46 4.73 1.19 163.49 1.12 11.50
AFED AFSALA Bancorp Inc. NA NA NA NA NA NA 0.75 5.39
AFFFZ America First Financial Fund 0.48 103.97 0.41 4.92 0.50 80.65 1.10 13.57
AHCI Ambanc Holding Co. Inc. 1.53 96.14 0.95 7.44 1.47 72.94 0.54 4.22
AHM Ahmanson & Company (H.F.) NA NA 1.90 36.74 1.25 NA 0.96 19.32
ALBC Albion Banc Corp. 0.63 104.30 NA NA 0.65 NA 0.69 7.68
ALBK ALBANK Financial Corporation 0.85 115.39 0.74 8.03 0.98 78.02 1.07 11.57
AMFB American Federal Bank FSB 0.60 215.51 0.44 4.95 1.30 193.22 1.44 16.23
AMFC AMB Financial Corp. 0.79 64.22 0.58 3.57 0.50 64.22 1.04 6.15
ANA Acadiana Bancshares Inc. 0.66 208.64 0.51 2.94 1.37 192.62 1.18 6.62
ANBK American National Bancorp NA NA NA NA 1.17 NA 0.79 8.75
ANDB Andover Bancorp Inc. 1.36 104.01 1.14 14.18 1.41 89.41 1.06 13.36
ASBI Ameriana Bancorp 0.44 87.49 0.38 3.49 0.38 63.58 0.88 8.01
ASBP ASB Financial Corp. 1.44 84.76 1.56 9.91 1.22 50.98 0.85 5.41
ASFC Astoria Financial Corporation 0.83 60.72 0.45 5.97 0.50 35.00 0.83 10.52
ATSB AmTrust Capital Corp. 3.66 25.47 2.84 27.96 0.93 23.48 0.42 4.16
AVND Avondale Financial Corp. 2.68 200.01 1.66 20.05 5.35 194.88 (4.92) (48.80)
BANC BankAtlantic Bancorp Inc. 0.86 162.72 0.75 13.64 1.40 120.47 0.96 16.85
BDJI First Federal Bancorporation 0.01 NM 0.21 1.91 0.82 127.79 0.50 4.37
BFD BostonFed Bancorp Inc. 0.54 132.70 0.63 7.06 0.71 91.43 0.85 8.74
BFFC Big Foot Financial Corp. 0.00 NM 0.00 0.00 0.34 151.52 0.70 4.13
BFSB Bedford Bancshares Inc. 0.00 NM 0.00 0.00 0.57 77.52 1.26 8.81
BKC American Bank of Connecticut 2.70 52.83 1.97 24.74 1.43 44.68 1.32 15.72
BKCO Bankers Corp. 1.45 31.65 1.06 13.65 0.46 23.83 1.15 14.66
BKCT Bancorp Connecticut Inc. 1.37 144.46 1.11 10.69 1.98 108.02 1.36 13.32
BKUNA BankUnited Financial Corp. 0.77 30.72 0.70 10.29 0.24 26.73 0.56 7.45
BNKU Bank United Corp. 1.10 49.44 1.07 20.73 0.54 37.09 0.81 15.80
BPLS Bank Plus Corp. 3.06 64.17 3.22 65.47 1.96 49.87 0.51 10.40
BSBC Branford Savings Bank 2.33 132.65 1.94 20.34 3.09 112.22 1.22 13.06
BTHL Bethel Bancorp NA NA NA NA 1.48 NA 0.56 6.48
BVCC Bay View Capital Corp. 0.59 204.11 0.76 12.11 1.20 115.33 0.68 10.72
BWFC Bank West Financial Corp. 0.00 NM 0.03 0.20 0.20 458.70 0.70 4.47
BYFC Broadway Financial Corp. 1.65 72.32 2.42 21.07 1.19 41.50 0.21 1.85
CAFI Camco Financial Corp. 0.40 79.91 0.36 3.69 0.32 38.86 1.00 10.41
CAPS Capital Savings Bancorp Inc. 0.16 234.98 0.16 1.82 0.38 116.53 0.93 10.91
CASB Cascade Financial Corp. 0.36 287.71 0.59 9.51 1.02 142.60 0.60 9.88
CASH First Midwest Financial Inc. 1.16 83.36 0.79 6.84 0.97 81.68 0.92 7.85
CATB Catskill Financial Corp. 0.76 194.39 0.50 1.86 1.47 133.79 1.37 4.96
CBCI Calumet Bancorp Inc. 1.29 119.76 1.40 8.77 1.54 84.90 1.41 8.88
CBCO CB Bancorp Inc. 0.57 350.39 2.90 31.58 1.98 27.47 1.32 14.61
CBES CBES Bancorp Inc. 0.83 55.57 0.77 4.16 0.46 54.05 1.10 5.90
CBK Citizens First Financial Corp. 0.29 80.95 0.43 2.91 0.24 35.90 0.63 4.20
CBNH Community Bankshares Inc. 0.52 195.79 0.59 8.23 1.01 115.48 0.95 12.82
CBSA Coastal Bancorp Inc. 0.99 56.37 0.57 16.56 0.56 37.23 0.45 13.53
CBSB Charter Financial Inc. 0.51 155.27 0.51 3.64 0.80 114.56 1.17 7.99
CCFH CCF Holding Company 0.42 189.90 0.34 2.39 0.79 189.90 0.14 0.97
CEBK Central Co-operative Bank NA NA NA NA 1.23 NA 0.97 9.36
CENB Century Bancorp Inc. 0.44 207.22 0.39 1.31 0.91 139.39 1.80 9.12
CENF CENFED Financial Corp. 1.31 78.56 1.40 27.52 1.03 51.06 0.64 12.30
CFB Commercial Federal Corporation 1.01 94.47 1.01 17.01 0.96 70.94 0.95 16.20
CFBC Community First Banking Co. 2.29 41.66 1.82 25.43 0.95 40.50 NA NA
CFCP Coastal Financial Corp. 0.19 589.86 0.26 4.32 1.14 350.59 1.17 18.83
CFFC Community Financial Corp. 0.34 206.36 0.40 2.90 0.69 153.55 1.22 8.85
CFNC Carolina Fincorp Inc. 0.40 133.67 0.28 1.16 0.54 133.67 1.24 5.17
CFSB CFSB Bancorp Inc. 0.07 893.54 0.09 1.23 0.62 565.80 1.11 14.59
CFTP Community Federal Bancorp 0.59 79.45 0.35 1.06 0.47 79.45 1.69 5.03
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation 0.75 177.91 0.61 7.93 1.34 147.62 1.17 13.95
CIBI Community Investors Bancorp 0.86 71.32 0.72 6.26 0.62 65.53 1.01 8.86
CKFB CKF Bancorp Inc. 0.64 30.66 0.89 3.75 0.20 12.02 1.21 4.96
CLAS Classic Bancshares Inc. 0.68 143.29 0.68 4.62 0.97 76.14 0.91 6.17
CMRN Cameron Financial Corp 0.33 288.53 0.28 1.23 0.95 135.41 1.20 5.11
CMSB Commonwealth Bancorp Inc. 0.71 121.63 0.42 4.41 0.86 106.34 0.86 8.35
CMSV Community Savings (MHC) 0.66 98.32 0.57 5.07 0.64 66.20 0.81 7.05
CNIT CENIT Bancorp Inc. 0.46 191.03 0.61 8.58 0.87 85.28 0.60 8.46
CNSB CNS Bancorp Inc. 0.71 80.36 0.45 1.82 0.57 80.36 0.94 3.81
CNY Carver Bancorp Inc. 1.64 68.37 0.80 9.86 1.12 34.62 (1.41) (16.22)
COFD Collective Bancorp Inc. NA NA NA NA 0.45 NA 1.18 16.49
COFI Charter One Financial 0.36 216.97 0.26 3.82 0.77 147.01 1.26 18.67
CONE Conestoga Bancorp, Inc. 0.23 80.00 0.16 0.99 0.18 26.87 0.60 3.72
COOP Cooperative Bankshares Inc. 0.29 105.94 0.30 4.02 0.30 53.51 0.68 8.95
CRZY Crazy Woman Creek Bancorp 0.43 240.34 0.23 0.82 1.03 240.34 1.30 4.63
CSA Coast Savings Financial 1.34 102.69 1.34 27.11 1.37 71.08 0.56 11.41
CSBF CSB Financial Group Inc. NA NA NA NA 0.53 41.29 0.48 1.90
CTZN CitFed Bancorp Inc. 0.41 243.92 0.45 7.06 0.99 128.08 0.86 13.32
CVAL Chester Valley Bancorp Inc. 0.39 280.83 0.47 5.54 1.10 187.15 0.98 11.26
CZF CitiSave Financial Corp 0.17 92.11 0.20 1.22 0.15 46.05 1.03 6.16
DCBI Delphos Citizens Bancorp Inc. 0.00 NM 0.02 0.08 0.13 93.46 1.89 6.59
DIBK Dime Financial Corp. 0.69 470.63 0.44 5.67 3.23 337.58 1.94 23.85
DIME Dime Community Bancorp Inc. 1.20 120.17 0.82 5.30 1.45 97.78 1.13 6.52
DME Dime Bancorp Inc. 3.51 26.67 2.36 41.27 0.94 23.73 0.69 12.66
DNFC D & N Financial Corp. 0.41 244.81 0.37 6.44 1.01 192.28 0.89 15.07
DSL Downey Financial Corp. 0.88 70.58 1.11 15.22 0.62 50.35 0.93 12.44
EBSI Eagle Bancshares 0.92 91.35 0.88 10.12 0.84 65.80 0.75 8.43
EFBC Empire Federal Bancorp Inc. 0.00 NM 0.00 0.00 0.47 NM 1.56 5.45
EFBI Enterprise Federal Bancorp 0.02 NM 0.01 0.09 0.28 NM 0.97 7.55
EGFC Eagle Financial Corp. 1.80 56.52 1.21 17.60 1.01 47.66 0.79 10.79
EGLB Eagle BancGroup Inc. 1.93 41.41 1.67 13.83 0.80 31.93 0.30 2.34
EIRE Emerald Isle Bancorp Inc. 0.88 109.78 0.62 8.92 0.97 105.23 0.86 12.45
EMLD Emerald Financial Corp. 0.09 356.29 0.16 2.16 0.34 75.41 1.00 13.14
EQSB Equitable Federal Savings Bank 0.00 NM 0.68 13.39 0.31 19.82 0.89 17.70
ESBK Elmira Savings Bank (The) 0.60 134.29 0.82 13.07 0.80 76.33 0.30 4.82
ESX Essex Bancorp Inc. 2.23 67.35 3.23 38.44 1.50 40.63 0.04 NM
ETFS East Texas Financial Services 0.38 138.38 0.25 1.29 0.53 100.00 0.66 3.51
FAB FirstFed America Bancorp Inc. NA NA NA NA 1.06 NA (1.49) (17.16)
FBBC First Bell Bancorp Inc. 0.07 166.26 0.09 0.88 0.12 107.87 1.14 9.70
FBCI Fidelity Bancorp Inc. 0.92 24.69 0.70 6.90 0.23 24.69 0.82 7.90
FBCV 1ST Bancorp 0.90 61.23 0.71 8.97 0.55 51.00 0.81 10.01
FBER 1st Bergen Bancorp 1.31 184.24 0.74 4.48 2.41 161.82 0.81 4.87
FBHC Fort Bend Holding Corp. NA NA NA NA 0.95 NA 0.74 11.69
FBNW FirstBank Corp. 2.49 29.79 1.87 23.46 0.74 27.73 (0.65) (8.15)
FBSI First Bancshares Inc. 0.04 819.64 0.08 0.55 0.35 88.44 1.13 7.93
FCB Falmouth Co-Operative Bank 0.03 NM 0.02 0.06 1.06 NM 0.80 3.22
FCBF FCB Financial Corp. 0.18 347.77 0.15 0.85 0.62 347.77 1.06 6.06
FCIT First Citizens Financial Corp. 0.83 160.28 1.92 31.38 1.33 52.05 0.82 13.43
FCME First Coastal Corporation 2.07 128.12 1.62 18.19 2.65 105.48 0.71 7.98
FDEF First Defiance Financial 0.47 117.35 0.45 2.12 0.55 93.68 1.15 5.30
FED FirstFed Financial Corp. 1.86 136.55 1.74 36.87 2.53 110.91 0.50 10.61
FESX First Essex Bancorp Inc. 0.86 165.05 0.62 8.44 1.42 143.10 0.76 10.30
FFBA First Colorado Bancorp Inc. 0.12 305.71 0.19 1.53 0.37 136.49 1.28 9.52
FFBH First Federal Bancshares of AR 0.20 152.33 0.19 1.18 0.31 127.62 1.18 7.41
FFBI First Financial Bancorp Inc. 0.18 391.41 0.27 3.44 0.69 200.40 0.64 8.23
FFBS FFBS BanCorp Inc. 0.05 NM 0.03 0.16 0.66 109.44 1.62 8.37
FFBZ First Federal Bancorp Inc. 0.59 171.61 0.52 6.79 1.02 153.04 0.92 12.02
FFCH First Financial Holdings Inc. 1.99 42.33 1.77 28.85 0.84 39.24 0.89 14.50
FFDB FirstFed Bancorp Inc. 0.56 101.95 0.48 4.74 0.57 36.36 0.99 9.88
FFDF FFD Financial Corp. NA NA NA NA 0.27 NA 0.90 3.61
FFED Fidelity Federal Bancorp 0.11 748.74 0.12 2.30 0.85 455.75 0.84 16.26
FFES First Federal of East Hartford 2.29 68.79 0.41 6.56 1.57 55.25 0.52 8.23
FFFC FFVA Financial Corp. 0.16 617.38 0.10 0.79 1.01 585.64 1.40 10.31
FFFD North Central Bancshares Inc. 0.18 660.13 0.22 0.88 1.18 457.01 1.74 7.15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. 3.85 64.02 3.17 48.84 2.47 55.02 0.74 11.45
FFFL Fidelity Bankshares Inc. (MHC) 0.27 112.34 0.30 3.36 0.31 77.48 0.55 6.01
FFHC First Financial Corp. 0.35 185.64 0.29 4.12 0.65 137.23 1.33 18.50
FFHH FSF Financial Corp. 0.12 285.51 0.10 0.87 0.34 216.04 0.79 6.58
FFHS First Franklin Corporation 0.65 95.70 0.50 5.64 0.62 68.29 0.62 6.98
FFIC Flushing Financial Corp. 0.44 288.53 0.27 1.68 1.28 251.62 0.98 5.80
FFKY First Federal Financial Corp. 0.00 NM 0.11 0.83 0.53 115.33 1.65 12.16
FFLC FFLC Bancorp Inc. 0.22 213.09 0.27 1.86 0.46 116.25 1.10 7.35
FFOH Fidelity Financial of Ohio 0.22 174.34 0.18 1.35 0.38 174.34 0.95 7.20
FFPB First Palm Beach Bancorp Inc. 1.27 58.20 1.06 15.62 0.74 46.69 0.61 8.57
FFSL First Independence Corp. 0.69 140.24 0.46 4.37 0.97 69.84 0.61 5.62
FFSX First Fed SB of Siouxland(MHC) 0.14 386.65 0.12 1.47 0.52 263.34 0.76 9.39
FFWC FFW Corp. 0.29 169.52 0.22 2.24 0.48 150.42 1.13 11.11
FFWD Wood Bancorp Inc. 0.00 NM 0.02 0.14 0.41 346.50 1.43 11.21
FFYF FFY Financial Corp. 0.94 73.52 0.72 5.12 0.69 73.17 1.29 9.15
FGHC First Georgia Holding Inc. 1.35 58.25 1.35 15.92 0.79 50.33 1.11 13.24
FIBC Financial Bancorp Inc. 3.56 23.93 2.77 28.44 0.85 16.97 0.88 8.93
FISB First Indiana Corporation 1.56 101.72 1.55 16.21 1.59 85.76 1.11 11.58
FKFS First Keystone Financial 3.21 45.32 2.45 34.67 1.46 34.36 0.85 11.89
FKKY Frankfort First Bancorp Inc. 0.00 NM 0.00 0.00 0.08 138.89 0.95 3.69
FLAG FLAG Financial Corp. 6.20 46.92 4.52 48.03 2.91 44.14 1.11 12.30
FLFC First Liberty Financial Corp. 0.67 183.70 0.75 10.21 1.23 114.80 1.13 14.78
FLGS Flagstar Bancorp Inc. NA NA NA NA 0.30 NA 1.30 22.40
FLKY First Lancaster Bancshares 0.53 54.35 0.45 1.33 0.29 32.89 1.48 4.15
FMBD First Mutual Bancorp Inc. 0.06 723.04 0.04 0.34 0.46 207.98 0.08 0.56
FMCO FMS Financial Corporation 1.31 68.65 1.07 16.98 0.90 47.56 1.00 15.69
FMSB First Mutual Savings Bank NA NA NA NA 1.24 NA 1.02 15.39
FNGB First Northern Capital Corp. 0.13 413.71 0.13 1.14 0.54 368.77 0.90 7.83
FOBC Fed One Bancorp 0.28 357.14 0.13 1.15 1.00 93.85 0.96 8.23
FPRY First Financial Bancorp NA NA NA NA 0.84 NA 0.43 6.80
FRC First Republic Bancorp 1.18 80.08 1.25 16.84 0.95 65.82 0.74 11.31
FSBI Fidelity Bancorp Inc. 0.72 147.49 0.35 4.98 1.06 100.48 0.82 11.77
FSFC First Southeast Financial Corp 0.10 476.73 0.11 1.05 0.50 362.15 1.08 10.56
FSLA First Savings Bank (MHC) 0.90 117.67 0.57 6.22 1.05 93.31 0.99 10.67
FSNJ First Savings Bk of NJ (MHC) 1.70 71.33 0.81 9.44 1.21 58.25 0.44 5.45
FSPG First Home Bancorp Inc. 1.24 113.64 0.79 12.02 1.41 93.39 1.03 15.57
FSPT FirstSpartan Financial Corp. 0.99 31.69 0.90 7.28 0.31 13.93 NA NA
FSSB First FS&LA of San Bernardino 1.43 102.26 2.31 53.29 1.47 45.41 (0.12) (2.83)
FSTC First Citizens Corp. 1.12 133.73 NA NA 1.50 NA 0.34 3.72
FTF Texarkana First Financial Corp 0.00 NM 0.13 0.83 0.82 144.57 1.71 10.67
FTFC First Federal Capital Corp. 0.15 457.81 0.17 2.63 0.68 308.37 0.99 15.73
FTNB Fulton Bancorp Inc. NA NA NA NA 1.01 NA 0.91 3.65
FTSB Fort Thomas Financial Corp. 2.26 25.00 2.02 12.58 0.57 25.00 0.97 5.58
FWWB First SB of Washington Bancorp 0.32 319.51 0.31 2.13 1.03 210.94 1.22 8.08
GAF GA Financial Inc. 0.35 136.73 0.12 0.70 0.48 136.73 1.15 6.16
GBCI Glacier Bancorp Inc. 0.16 527.06 0.15 1.60 0.85 212.30 1.47 15.17
GDVS Greater Delaware Valley (MHC) 1.75 117.40 2.52 21.92 2.05 43.72 0.93 7.90
GDW Golden West Financial 1.54 43.87 1.44 23.02 0.68 37.62 0.88 13.95
GFCO Glenway Financial Corp. 0.09 370.94 0.16 1.69 0.32 84.04 0.79 8.23
GFED Guaranty Federal SB (MHC) 0.39 366.16 0.43 3.10 1.42 206.36 0.93 6.72
GFSB GFS Bancorp Inc. 1.74 46.59 1.54 13.33 0.81 45.77 1.27 11.06
GLBK Glendale Co-Operative Bank 0.00 NM 0.00 0.00 0.72 NM 0.75 4.58
GLN Glendale Federal Bank FSB 1.61 89.82 1.66 25.96 1.45 64.79 0.60 9.32
GOSB GSB Financial Corporation NA NA NA NA NA NA 0.43 3.43
GPT GreenPoint Financial Corp. 4.48 30.32 2.84 26.27 1.36 28.16 1.20 10.86
GRTR Greater New York Savings Bank 18.84 9.13 7.44 89.87 1.72 8.61 0.74 8.92
GSBC Great Southern Bancorp Inc. 1.32 197.04 1.83 20.45 2.60 124.20 1.73 19.40
GSFC Green Street Financial Corp. 0.19 97.92 0.14 0.38 0.19 97.92 1.57 4.38
GSLA GS Financial Corp. 0.39 214.61 0.13 0.72 0.85 214.61 1.28 4.98
GTFN Great Financial Corporation 0.45 159.69 0.38 4.13 0.72 13.77 1.05 10.66
GTPS Great American Bancorp 0.02 NM 0.01 0.07 0.42 188.02 0.57 2.56
GUPB GFSB Bancorp Inc. NA NA NA NA 0.69 NA 0.81 4.76
GWBC Gateway Bancorp Inc. 1.96 20.56 0.60 2.30 0.40 15.82 1.28 4.94
HALL Hallmark Capital Corp. 0.02 NM 0.01 0.19 0.60 NM 0.66 9.38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. 0.26 522.95 0.47 5.74 1.38 216.59 1.22 14.81
HARL Harleysville Savings Bank 0.00 NM 0.11 1.71 0.77 475.58 1.03 16.28
HARS Harris Savings Bank (MHC) 0.64 153.30 0.67 8.48 0.98 61.77 1.06 12.22
HAVN Haven Bancorp Inc. 1.34 92.04 0.78 13.46 1.23 84.95 0.82 14.11
HBBI Home Building Bancorp 0.86 32.51 0.52 4.30 0.28 32.51 0.83 6.78
HBEI Home Bancorp of Elgin Inc. 0.33 110.92 0.35 1.25 0.37 77.63 1.00 3.53
HBFW Home Bancorp 0.00 NM 0.00 0.00 0.53 468.58 0.98 7.03
HBNK Highland Federal Bank FSB 3.56 64.14 3.23 43.25 2.28 57.68 1.06 14.60
HBS Haywood Bancshares Inc. 1.14 57.05 2.09 14.79 0.65 23.67 0.89 6.02
HCBB HCB Bancshares Inc. NA NA NA NA 1.47 NA 0.27 3.46
HCFC Home City Financial Corp. 0.79 110.38 0.62 3.02 0.87 110.38 1.04 5.08
HEMT HF Bancorp Inc. NA NA NA NA 1.10 NA 0.14 1.76
HFFB Harrodsburg First Fin Bancorp 0.00 NM 0.00 0.00 0.37 58.12 1.32 4.96
HFFC HF Financial Corp. 0.46 224.76 0.40 4.34 1.04 200.58 0.94 10.16
HFGI Harrington Financial Group 0.39 63.20 0.23 4.84 0.25 17.87 0.66 13.64
HFNC HFNC Financial Corp. 1.14 111.26 0.99 5.27 1.26 94.51 0.84 3.17
HFSA Hardin Bancorp Inc. 0.50 57.66 0.36 2.85 0.29 41.58 0.74 5.38
HHFC Harvest Home Financial Corp. 0.29 90.48 0.15 1.21 0.26 90.48 0.78 6.27
HIFS Hingham Instit. for Savings 0.72 125.61 0.55 5.80 0.91 125.61 1.25 12.95
HMCI HomeCorp Inc. 0.46 132.98 3.25 51.58 0.62 13.13 0.46 7.34
HMLK Hemlock Federal Financial Corp 0.00 NM 0.00 0.00 1.37 NM (0.92) (6.81)
HMNF HMN Financial Inc. 0.09 742.94 0.08 0.55 0.70 555.50 1.07 7.34
HOMF Home Federal Bancorp 0.48 125.97 0.43 5.06 0.61 121.80 1.33 15.79
HPBC Home Port Bancorp Inc. 0.01 NM 0.04 0.34 1.53 501.45 1.68 15.45
HRBF Harbor Federal Bancorp Inc. 0.20 131.49 0.13 1.02 0.26 131.49 0.72 5.62
HRZB Horizon Financial Corp. 0.00 NM 0.00 0.00 0.85 NM 1.59 10.36
HTHR Hawthorne Financial Corp. NA NA NA NA 1.92 NA 0.65 12.36
HVFD Haverfield Corporation 1.15 87.57 1.00 11.87 1.00 87.44 0.95 11.13
HWEN Home Financial Bancorp 1.18 53.63 NA NA 0.63 NA 0.81 4.16
HZFS Horizon Financial Svcs Corp. 0.85 66.14 1.02 9.73 0.56 36.63 0.79 7.35
IBSF IBS Financial Corp. 0.55 94.57 0.15 0.88 0.52 94.57 0.73 3.67
IFSB Independence Federal Savings NA NA NA NA 0.34 NA 0.45 6.97
IFSL Indiana Federal Corporation 0.78 142.17 0.70 7.94 1.11 102.87 1.10 12.73
INBI Industrial Bancorp 0.20 279.79 0.18 0.96 0.55 115.71 1.48 7.91
INCB Indiana Community Bank SB NA NA NA NA 0.71 NA 0.60 4.77
IPSW Ipswich Savings Bank 1.33 95.03 1.94 31.39 1.26 49.55 1.18 19.18
ISBF ISB Financial Corporation NA NA NA NA 0.79 NA 0.77 6.29
ITLA ITLA Capital Corp. 1.62 100.53 1.78 15.67 1.63 75.09 1.42 12.81
IWBK InterWest Bancorp Inc. 0.53 152.32 0.69 10.28 0.81 69.69 1.12 16.90
JOAC Joachim Bancorp Inc. 0.49 63.25 0.68 2.35 0.31 30.45 0.63 2.13
JSBA Jefferson Savings Bancorp 0.25 326.10 0.52 6.39 0.82 117.45 0.86 10.69
JSBF JSB Financial Inc. 1.66 37.50 1.00 4.50 0.62 33.09 1.69 7.65
JXSB Jacksonville Savings Bk (MHC) 0.49 129.49 0.39 3.83 0.63 125.08 0.63 6.11
JXVL Jacksonville Bancorp Inc. 0.79 85.40 1.04 6.67 0.67 48.35 1.26 7.97
KFBI Klamath First Bancorp 0.13 176.70 0.10 0.49 0.24 176.70 1.48 6.99
KNK Kankakee Bancorp Inc. 0.72 140.69 0.57 5.30 1.01 64.54 0.89 8.42
KSAV KS Bancorp Inc. 0.50 70.56 0.42 3.07 0.35 70.56 1.24 9.06
KSBK KSB Bancorp Inc. 2.08 47.95 1.64 22.82 1.00 43.71 0.94 13.08
KYF Kentucky First Bancorp Inc. 0.00 NM 0.00 0.00 0.77 295.31 1.17 7.02
LARK Landmark Bancshares Inc. 0.17 341.15 0.11 0.74 0.57 62.24 1.05 7.14
LARL Laurel Capital Group Inc. 0.70 188.32 0.51 4.91 1.31 181.26 1.41 13.36
LFBI Little Falls Bancorp Inc. 1.60 51.25 0.90 6.99 0.82 36.77 0.59 4.43
LFCO Life Financial Corp. 2.50 96.36 1.94 26.50 2.41 59.01 6.32 90.48
LFED Leeds Federal Savings Bk (MHC) 0.03 977.36 0.02 0.12 0.30 977.36 1.23 7.61
LIFB Life Bancorp Inc. 0.96 160.03 0.49 4.55 1.54 144.60 0.98 9.07
LISB Long Island Bancorp Inc. 1.43 66.07 1.04 11.55 0.95 56.14 0.84 9.22
LOGN Logansport Financial Corp. 0.62 67.13 0.45 2.28 0.42 67.13 1.39 7.02
LONF London Financial Corporation 1.03 62.54 0.79 3.97 0.64 62.54 0.86 4.17
LSBI LSB Financial Corp. 1.55 68.99 1.34 14.78 1.07 68.99 0.78 8.41
LSBX Lawrence Savings Bank 0.31 727.93 0.36 4.06 2.27 290.57 1.52 17.82
LVSB Lakeview Financial NA NA NA NA NA NA 1.12 11.44
LXMO Lexington B&L Financial Corp. 0.82 60.05 0.63 2.30 0.49 58.31 1.00 3.40
MAFB MAF Bancorp Inc. 0.54 134.63 0.44 5.55 0.72 113.73 1.15 14.65
MARN Marion Capital Holdings 0.88 153.22 0.76 3.28 1.35 153.22 2.06 9.01
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. 0.51 173.33 0.19 1.91 0.88 128.64 1.11 10.60
MBB MSB Bancorp Inc. 1.34 45.01 0.70 8.28 0.60 36.62 0.47 5.35
MBBC Monterey Bay Bancorp Inc. 0.65 94.16 0.36 3.36 0.61 94.16 0.45 4.20
MBLF MBLA Financial Corp. 0.44 111.87 0.25 1.82 0.49 111.87 0.70 5.23
MBSP Mitchell Bancorp Inc. 2.30 26.77 2.06 4.76 0.62 24.32 1.83 4.21
MCBN Mid-Coast Bancorp Inc. 0.29 212.95 0.40 4.62 0.61 128.70 0.87 9.16
MCBS Mid Continent Bancshares Inc. 0.23 82.89 0.19 1.88 0.19 53.92 1.07 10.33
MDBK Medford Savings Bank 0.77 158.17 0.45 5.12 1.22 146.30 1.08 12.12
MECH Mechanics Savings Bank 2.43 71.06 1.71 17.55 1.72 67.13 1.08 10.71
MERI Meritrust Federal SB 0.40 142.98 0.25 3.15 0.58 80.65 1.20 15.23
METF Metropolitan Financial Corp. 0.37 186.65 0.50 13.24 0.68 106.74 0.61 15.88
MFBC MFB Corp. 0.00 NM 0.00 0.00 0.20 529.85 0.91 6.11
MFCX Marshalltown Financial Corp. 0.00 NM 0.00 0.00 0.19 NM 0.77 4.92
MFFC Milton Federal Financial Corp. 0.27 172.55 0.17 1.16 0.46 91.83 0.64 4.28
MFLR Mayflower Co-operative Bank 1.62 96.40 1.02 10.83 1.56 90.08 1.10 11.50
MFSL Maryland Federal Bancorp NA NA NA NA NA NA 0.82 9.77
MGNL Magna Bancorp Inc. 2.32 48.15 2.34 24.52 1.12 22.63 1.63 16.84
MIFC Mid-Iowa Financial Corp. 0.24 186.45 0.13 1.38 0.44 186.45 1.08 11.71
MIVI Mississippi View Holding Co. 0.25 772.32 0.21 1.15 1.93 488.70 1.02 5.89
MLBC ML Bancorp Inc. NA NA NA NA 1.73 NA 0.73 9.71
MONT Montgomery Financial Corp. 0.00 NM 1.36 13.83 0.20 NA 0.62 6.43
MRKF Market Financial Corporation 0.00 NM 0.00 0.00 0.20 10.40 0.68 2.56
MSBF MSB Financial Inc. 0.17 333.63 0.15 0.90 0.57 48.65 1.40 7.76
MSBK Mutual Savings Bank FSB 0.22 328.42 0.17 2.83 0.71 168.15 0.02 0.29
MWBI Midwest Bancshares Inc. 1.37 61.28 0.82 11.81 0.84 61.28 0.72 10.23
MWBX MetroWest Bank 0.77 177.67 0.78 10.65 1.37 88.62 1.31 17.68
MWFD Midwest Federal Financial 0.19 543.01 0.14 1.61 1.01 543.01 1.41 16.32
NASB North American Savings Bank 3.13 31.89 3.34 41.85 1.00 26.40 1.64 21.78
NBN Northeast Bancorp 1.40 94.76 1.37 17.69 1.32 77.15 0.74 9.51
NBSI North Bancshares Inc. 0.00 NM 0.00 0.00 0.28 NM 0.77 5.19
NEIB Northeast Indiana Bancorp 0.56 126.20 0.49 3.26 0.71 126.20 1.15 7.49
NHTB New Hampshire Thrift Bncshrs 0.62 184.03 0.74 9.95 1.14 91.05 0.94 12.59
NMSB NewMil Bancorp Inc. 2.00 150.10 1.27 12.78 3.01 123.07 0.87 8.26
NSBC NewSouth Bancorp, Inc. 0.24 567.71 0.54 7.21 1.37 183.21 0.68 8.11
NSLB NS&L Bancorp Inc. 0.00 NM 0.00 0.00 0.13 127.27 0.86 4.19
NSSB Norwich Financial Corp. 1.12 255.91 1.00 9.10 2.87 200.13 1.19 10.52
NSSY Norwalk Savings Society 2.76 61.66 2.03 25.22 1.70 56.84 0.69 8.21
NTMG Nutmeg Federal S&LA 0.70 85.90 1.11 17.96 0.60 NA 0.68 11.07
NWEQ Northwest Equity Corp. NA NA NA NA 0.59 NA 0.95 8.00
NWSB Northwest Savings Bank (MHC) 0.83 107.13 0.84 8.61 0.89 80.17 0.94 9.54
NYB New York Bancorp Inc. 1.72 58.62 1.14 22.45 1.01 48.39 1.77 34.11
OCFC Ocean Financial Corp. 1.07 81.76 0.64 3.62 0.88 69.12 1.07 5.79
OCWN Ocwen Financial Corporation 0.57 210.83 4.10 48.29 1.19 19.90 2.61 32.05
OFCP Ottawa Financial Corp. 0.19 217.83 0.18 2.07 0.42 112.26 0.80 9.01
OHSL OHSL Financial Corp. 0.01 NM 0.01 0.06 0.31 68.18 0.94 8.31
PALM Palfed, Inc. 1.76 73.13 2.52 31.08 1.29 42.12 0.82 10.28
PAMM PacificAmerica Money Center 2.08 141.98 4.94 22.00 2.95 26.13 10.66 51.38
PBCI Pamrapo Bancorp Inc. 3.20 41.42 2.28 17.82 1.33 20.89 1.45 9.87
PBCT People's Bank (MHC) 1.22 137.78 0.91 10.77 1.68 125.48 1.14 14.03
PBKB People's Bancshares Inc. 1.49 110.53 0.88 15.61 1.65 91.08 0.97 16.28
PBNB People's Savings Financial Cp. 0.87 79.54 0.54 5.58 0.69 70.66 0.90 9.22
PCBC Perry County Financial Corp. 0.31 64.10 0.05 0.27 0.20 64.10 1.18 6.34
PCCI Pacific Crest Capital 0.65 247.90 1.23 17.00 1.62 82.93 1.01 13.23
PDB Piedmont Bancorp Inc. 0.82 97.35 0.67 3.95 0.80 71.22 1.25 7.47
PEEK Peekskill Financial Corp. 2.53 53.62 0.74 2.89 1.36 26.98 1.15 4.43
PERM Permanent Bancorp Inc. 2.16 46.31 1.11 11.98 1.00 45.38 0.61 6.50
PERT Perpetual Bank (MHC) NA NA NA NA 1.01 NA 1.03 8.13
PETE Primary Bank 1.13 90.55 1.05 15.90 1.02 54.10 0.82 12.29
PFDC Peoples Bancorp 0.47 82.91 0.40 2.62 0.39 73.36 1.46 9.59
PFED Park Bancorp Inc. 0.45 167.22 0.20 0.93 0.76 139.28 1.11 4.86
PFFB PFF Bancorp Inc. 2.05 73.13 1.84 17.61 1.50 58.44 0.39 3.71
PFFC Peoples Financial Corp. 0.02 NM 0.01 0.05 0.41 NM 0.88 3.23
PFNC Progress Financial Corporation 0.51 238.93 1.36 26.06 1.22 61.30 1.15 22.12
PFSB PennFed Financial Services Inc 0.90 34.69 0.69 9.18 0.31 31.83 0.85 11.30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) 0.26 458.85 0.22 3.45 1.20 170.57 0.69 10.90
PHBK Peoples Heritage Finl Group 0.95 185.55 0.83 10.10 1.77 130.42 1.26 15.50
PHFC Pittsburgh Home Financial Corp 2.38 32.78 1.74 15.14 0.78 30.40 0.74 6.09
PHSB Peoples Home Savings Bk (MHC) 1.19 124.37 0.59 7.18 1.48 108.23 NA NA
PKPS Poughkeepsie Financial Corp. 3.38 42.89 3.35 39.79 1.45 26.20 0.52 6.26
PLSK Pulaski Savings Bank (MHC) NA NA 0.68 10.25 NA NA 0.56 7.92
PMFI Perpetual Midwest Financial 0.51 185.19 0.40 4.76 0.94 172.00 0.44 5.15
POBS Portsmouth Bank Shares 0.46 151.21 0.21 0.84 0.70 69.08 2.29 9.31
PRBC Prestige Bancorp Inc. 0.48 80.50 0.32 2.77 0.39 78.54 0.65 5.34
PROV Provident Financial Holdings 1.96 52.42 1.97 13.88 1.03 44.11 0.76 5.31
PSBK Progressive Bank Inc. 0.98 160.96 0.82 9.78 1.58 127.85 0.96 11.53
PSFC Peoples-Sidney Financial Corp. 0.76 60.06 0.70 6.89 0.45 42.00 0.90 8.70
PSFI PS Financial Inc. 0.91 57.23 0.43 1.00 0.52 57.23 2.25 5.32
PTRS Potters Financial Corp. 1.40 231.18 0.83 9.37 3.23 231.18 1.53 16.55
PULB Pulaski Bank, Svgs Bank (MHC) NA NA NA NA 0.33 NA 0.93 7.21
PULS Pulse Bancorp 2.21 82.99 0.59 7.54 1.83 60.59 1.11 14.26
PVFC PVF Capital Corp. 0.95 83.44 0.90 12.84 0.79 61.53 1.39 20.03
PVSA Parkvale Financial Corporation 0.32 650.68 0.24 3.25 2.08 604.11 1.06 14.76
PWBC PennFirst Bancorp Inc. 1.81 86.87 0.58 8.16 1.57 86.14 0.65 8.92
PWBK Pennwood Bancorp Inc. 1.47 95.14 0.83 4.29 1.40 57.64 1.02 5.15
QCBC Quaker City Bancorp Inc. 1.57 79.78 1.49 16.76 1.25 69.17 0.70 7.78
QCFB QCF Bancorp Inc. NA NA NA NA NA NA 1.55 8.53
QCSB Queens County Bancorp Inc. 0.58 138.21 0.61 4.05 0.80 91.25 2.12 14.19
RARB Raritan Bancorp Inc. 0.66 191.14 0.46 6.04 1.27 179.82 1.06 13.56
RCSB RCSB Financial Inc. 0.85 138.85 0.61 8.02 1.18 83.90 0.82 10.67
REDF RedFed Bancorp Inc. 3.04 43.63 3.26 39.88 1.33 34.86 1.06 12.85
RELI Reliance Bancshares Inc. 0.00 NM 0.00 0.00 0.52 NM 1.54 3.14
RELY Reliance Bancorp Inc. 1.50 37.60 0.73 9.10 0.56 33.69 0.87 10.58
RIVR River Valley Bancorp 0.08 NM 0.12 0.98 1.06 700.00 0.98 8.05
ROSE TR Financial Corp. 0.57 145.05 0.38 6.21 0.83 108.61 0.93 15.08
RSLN Roslyn Bancorp Inc. 1.23 293.03 0.31 1.44 3.59 264.38 0.34 1.72
RVSB Riverview Savings Bank (MHC) 0.06 944.32 0.10 0.89 0.54 372.65 1.33 11.97
SBCN Suburban Bancorporation Inc. 0.24 725.46 0.19 1.67 1.73 725.46 0.84 7.18
SBFL SB of the Finger Lakes (MHC) 1.50 81.42 0.78 8.22 1.22 68.91 0.35 3.56
SBOS Boston Bancorp (The) 1.41 42.86 0.65 5.23 0.61 18.09 3.18 28.19
SCBS Southern Community Bancshares 3.88 52.10 2.20 10.03 2.02 50.34 1.15 5.20
SCCB S. Carolina Community Bancshrs 1.60 50.96 1.78 6.85 0.81 35.52 1.05 4.04
SECP Security Capital Corporation 0.13 NM 0.11 0.71 1.46 989.84 1.49 9.47
SFED SFS Bancorp Inc. 0.88 64.32 0.68 5.20 0.57 58.23 0.54 4.19
SFFC StateFed Financial Corporation 0.88 42.59 0.70 3.96 0.37 15.67 1.27 7.18
SFIN Statewide Financial Corp. 0.72 111.69 0.41 4.40 0.81 80.61 0.82 8.57
SFNB Security First Network Bank NA NA NA NA 1.35 NA (21.61) (62.99)
SFSB SuburbFed Financial Corp. 0.40 81.27 0.25 3.75 0.33 75.49 0.64 9.74
SFSL Security First Corp. 0.29 302.37 0.26 2.77 0.87 301.46 1.37 14.70
SGVB SGV Bancorp Inc. 0.59 71.50 0.61 8.39 0.42 49.82 0.30 3.77
SHEN First Shenango Bancorp Inc. 0.50 228.04 0.50 4.71 1.14 144.74 1.13 10.53
SISB SIS Bancorp Inc. 0.75 343.46 0.36 5.02 2.57 254.44 0.81 11.03
SKAN Skaneateles Bancorp Inc. 1.42 66.38 1.52 22.13 0.94 49.27 0.67 9.78
SKBO First Carnegie Deposit (MHC) 0.08 855.88 0.17 1.38 0.66 33.56 NA NA
SMBC Southern Missouri Bancorp Inc. 1.60 40.26 1.10 7.01 0.64 37.60 1.02 6.41
SMFC Sho-Me Financial Corp. 0.09 812.23 0.08 0.79 0.70 664.29 1.30 13.21
SOBI Sobieski Bancorp Inc. 0.34 102.04 0.25 1.61 0.35 102.04 0.67 4.04
SOPN First Savings Bancorp Inc. 0.12 274.55 0.12 0.47 0.32 192.97 1.73 6.96
SOSA Somerset Savings Bank 6.34 26.59 6.50 110.01 1.69 19.62 0.76 13.01
SPBC St. Paul Bancorp Inc. 0.44 269.26 0.36 4.10 1.18 163.91 1.07 12.03
SRN Southern Banc Company Inc. NA NA 0.00 0.00 NA NA 0.49 2.93
SSB Scotland Bancorp Inc 0.00 NM 0.00 0.00 0.50 NM 1.73 4.70
SSFC South Street Financial Corp. 0.59 65.44 0.28 1.11 0.39 63.69 1.25 4.80
SSM Stone Street Bancorp Inc. 0.00 NM 0.00 0.00 0.62 274.87 1.99 5.58
STFR St. Francis Capital Corp. 0.56 156.77 0.26 3.15 0.88 143.07 0.81 9.33
STND Standard Financial Inc. 0.35 141.71 0.22 2.01 0.49 137.54 0.67 6.06
STSA Sterling Financial Corp. 0.27 298.69 0.43 7.70 0.81 119.58 0.59 10.33
SVRN Sovereign Bancorp Inc. 0.70 109.26 0.54 10.82 0.77 81.74 0.37 7.20
SWBI Southwest Bancshares 0.25 112.82 0.18 1.67 0.28 112.82 1.05 9.91
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank 1.30 87.03 1.08 13.10 1.13 62.63 0.90 11.05
SZB SouthFirst Bancshares Inc. 0.46 86.73 0.50 3.59 0.40 44.97 0.51 3.65
TBK Tolland Bank 3.09 63.14 2.30 34.22 1.95 52.07 0.79 11.40
THR Three Rivers Financial Corp. 1.07 75.00 1.21 8.80 0.80 44.02 0.80 5.68
THRD TF Financial Corporation 0.62 95.55 0.33 3.08 0.60 88.83 0.72 6.53
TPNZ Tappan Zee Financial Inc. NA NA NA NA 1.18 NA 0.90 5.07
TRIC Tri-County Bancorp Inc. 0.02 NM 0.05 0.33 1.16 965.12 1.07 6.93
TSBS Peoples Bancorp Inc. (MHC) 1.07 70.16 0.66 3.99 0.75 59.50 1.24 7.49
TSH Teche Holding Co. 0.31 318.68 0.27 2.06 0.97 303.33 1.17 8.80
TWIN Twin City Bancorp 0.00 NM 0.08 0.62 0.33 127.41 0.96 7.48
UBMT United Financial Corp. NA NA NA NA 0.21 16.41 1.39 5.81
UFRM United Federal Savings Bank 1.13 125.22 0.85 11.17 1.42 124.07 0.79 10.49
USAB USABancshares, Inc. 1.34 84.84 0.62 4.92 1.14 84.84 0.55 4.31
VABF Virginia Beach Fed. Financial 0.15 660.83 0.47 6.96 0.96 63.74 0.60 8.80
VFFC Virginia First Financial Corp. 1.76 67.88 2.29 28.37 1.19 47.29 1.11 13.59
WAMU Washington Mutual Inc. 1.03 109.64 0.93 17.69 1.13 85.52 1.01 18.88
WAYN Wayne Savings & Loan Co. (MHC) 0.44 98.39 0.69 7.52 0.43 51.61 0.69 7.42
WBST Webster Financial Corporation 1.09 131.95 0.94 18.43 1.44 97.81 (0.38) (6.97)
WCBI Westco Bancorp 1.10 35.28 0.84 5.42 0.39 33.74 1.39 8.92
WCFB Webster City Federal SB (MHC) 0.26 264.23 0.27 1.16 0.67 141.96 1.50 6.38
WEFC Wells Financial Corp. 0.22 166.58 0.21 1.45 0.36 106.53 1.11 7.87
WEHO Westwood Homestead Fin. Corp. 0.00 NM 0.00 0.00 0.19 NM 1.17 3.58
WES Westcorp 1.33 166.14 1.02 10.91 2.20 115.45 0.94 9.91
WFCO Winton Financial Corp. NA NA NA NA 0.33 NA 1.06 14.66
WFSG Wilshire Financial Services NA NA NA NA 8.20 NA 1.34 19.87
WFSL Washington Federal Inc. 0.62 96.71 0.73 6.05 0.60 59.65 1.89 15.84
WHGB WHG Bancshares Corp. 0.48 57.59 0.39 1.77 0.28 57.59 0.84 3.69
WOFC Western Ohio Financial Corp. 0.64 91.77 0.49 3.68 0.59 45.88 0.33 4.32
WRNB Warren Bancorp Inc. 1.45 124.92 1.32 13.05 1.81 81.06 2.75 27.54
WSB Washington Savings Bank, FSB NA NA NA NA 0.92 NA 0.73 8.78
WSFS WSFS Financial Corporation 2.61 108.08 2.09 40.81 2.83 76.62 1.15 21.26
WSTR WesterFed Financial Corp. 0.13 602.90 0.09 0.80 0.76 226.57 0.70 5.46
WVFC WVS Financial Corporation 0.57 229.86 0.31 2.45 1.31 229.86 1.33 10.31
WWFC Westwood Financial Corporation 0.00 NM 0.00 0.00 0.54 146.31 0.75 8.12
WYNE Wayne Bancorp Inc. 1.34 92.02 0.85 5.83 1.24 91.84 0.82 5.47
YFCB Yonkers Financial Corporation 1.87 62.57 0.73 4.79 1.17 51.78 1.09 6.78
YFED York Financial Corp. 0.12 529.96 1.43 16.92 0.65 22.69 1.04 12.73
--------------------------------------------------------------------------------------
Average 0.95 153.48 0.81 9.38 0.97 120.90 0.93 9.10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Profitability as of
Asset Quality as of The Most Recent Quarter The Most Recent Quarter
----------------------------------------------------------- -----------------------
NPLs/ Reserves/ NPAs/ NPAs/ Reserves/ Reserves/ Return on Return on
Loans NPLs Assets Equity Loans NPAs + 90 Avg Assets Avg Equity
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- ----------------------------------------------------------- -----------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. 0.16 234.98 0.16 1.82 0.38 116.53 0.93 10.91
FBCV 1ST Bancorp 0.90 61.23 0.71 8.97 0.55 51.00 0.81 10.01
HBFW Home Bancorp 0.00 NM 0.00 0.00 0.53 468.58 0.98 7.03
HMCI HomeCorp Inc. 0.46 132.98 3.25 51.58 0.62 13.13 0.46 7.34
KNK Kankakee Bancorp Inc. 0.72 140.69 0.57 5.30 1.01 64.54 0.89 8.42
MBLF MBLA Financial Corp. 0.44 111.87 0.25 1.82 0.49 111.87 0.70 5.23
MFBC MFB Corp. 0.00 NM 0.00 0.00 0.20 529.85 0.91 6.11
PFDC Peoples Bancorp 0.47 82.91 0.40 2.62 0.39 73.36 1.46 9.59
WEFC Wells Financial Corp. 0.22 166.58 0.21 1.45 0.36 106.53 1.11 7.87
WCBI Westco Bancorp 1.10 35.28 0.84 5.42 0.39 33.74 1.39 8.92
--------------------------------------------------------------------------------------
Average 0.45 96.65 0.64 7.90 0.49 156.91 0.96 8.14
Maximum 1.10 234.98 3.25 51.58 1.01 529.85 1.46 10.91
Minimum 0.00 0.00 0.00 0.00 0.20 13.13 0.46 5.23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB 2.79 6.80 4.25 2.54 1.01 2.09 53.94 35.70
%CCMD Chevy Chase Bank, FSB 4.56 7.76 3.90 3.86 4.49 6.80 76.90 50.06
AABC Access Anytime Bancorp, Inc. 2.83 6.67 3.93 2.74 0.67 3.12 91.34 89.21
AADV Advantage Bancorp Inc. 3.10 7.45 4.48 2.98 0.60 2.09 56.13 47.31
ABBK Abington Bancorp Inc. 3.50 7.23 3.91 3.32 0.76 2.69 62.89 54.38
ABCL Alliance Bancorp Inc. 2.87 6.90 4.15 2.75 1.11 2.66 69.22 56.81
ABCW Anchor BanCorp Wisconsin 3.16 7.63 4.60 3.03 0.59 2.01 59.27 51.39
AFBC Advance Financial Bancorp 3.82 7.55 3.83 3.73 0.27 2.53 63.36 60.70
AFCB Affiliated Community Bancorp 3.40 7.47 4.16 3.32 0.16 1.61 46.18 43.53
AFED AFSALA Bancorp Inc. 3.60 6.98 3.52 3.46 0.28 2.38 63.42 60.46
AFFFZ America First Financial Fund 2.89 7.07 4.30 2.77 0.31 1.88 59.15 54.57
AHCI Ambanc Holding Co. Inc. 3.48 7.25 3.89 3.36 0.20 2.35 63.57 61.44
AHM Ahmanson & Company (H.F.) 2.68 7.08 4.52 2.56 0.53 1.74 48.49 37.77
ALBC Albion Banc Corp. 3.51 7.49 4.13 3.37 0.49 2.76 76.86 73.50
ALBK ALBANK Financial Corporation 3.99 7.38 3.60 3.78 0.36 2.25 51.39 46.72
AMFB American Federal Bank FSB 4.48 7.75 3.49 4.26 1.22 2.92 52.35 38.76
AMFC AMB Financial Corp. 3.89 7.53 3.73 3.81 0.43 2.80 66.18 62.34
ANA Acadiana Bancshares Inc. 3.69 7.57 3.97 3.61 0.39 2.15 54.63 49.75
ANBK American National Bancorp 3.30 7.64 4.45 3.19 0.16 2.13 57.64 55.47
ANDB Andover Bancorp Inc. 3.23 7.25 4.13 3.11 0.46 1.83 47.85 40.14
ASBI Ameriana Bancorp 3.14 7.31 4.30 3.01 0.53 2.25 63.36 56.89
ASBP ASB Financial Corp. 3.29 7.52 4.30 3.22 0.25 2.19 63.13 60.27
ASFC Astoria Financial Corporation 2.77 6.97 4.30 2.67 0.17 1.41 45.21 41.79
ATSB AmTrust Capital Corp. 2.85 7.03 4.30 2.73 0.47 2.74 85.66 83.20
AVND Avondale Financial Corp. 4.61 8.88 4.45 4.43 1.04 3.75 68.44 61.02
BANC BankAtlantic Bancorp Inc. 4.01 7.67 3.98 3.69 0.91 3.10 65.35 56.86
BDJI First Federal Bancorporation 3.33 7.20 4.03 3.17 0.48 2.87 78.80 75.61
BFD BostonFed Bancorp Inc. 3.30 7.11 3.94 3.18 0.38 1.99 66.91 62.90
BFFC Big Foot Financial Corp. 3.21 6.61 3.49 3.11 0.14 2.19 66.76 65.27
BFSB Bedford Bancshares Inc. 4.11 7.75 3.82 3.93 0.43 2.25 51.86 46.62
BKC American Bank of Connecticut 3.42 7.20 3.92 3.28 0.72 1.93 42.95 30.41
BKCO Bankers Corp. 2.76 7.03 4.31 2.71 0.09 0.84 27.58 25.22
BKCT Bancorp Connecticut Inc. 3.69 7.41 3.81 3.60 0.29 1.90 49.19 45.09
BKUNA BankUnited Financial Corp. 2.97 7.29 4.47 2.82 0.30 2.14 64.89 61.18
BNKU Bank United Corp. 2.57 7.23 4.80 2.43 0.73 2.00 53.14 39.07
BPLS Bank Plus Corp. 2.49 7.05 4.61 2.45 0.33 2.19 68.67 64.41
BSBC Branford Savings Bank 4.41 7.70 3.38 4.31 0.29 3.16 65.57 63.22
BTHL Bethel Bancorp 4.39 8.43 4.25 4.18 0.73 3.83 75.36 71.06
BVCC Bay View Capital Corp. 2.78 7.53 4.80 2.72 0.34 1.90 61.65 56.81
BWFC Bank West Financial Corp. 3.06 7.18 4.27 2.91 0.56 2.64 76.11 71.50
BYFC Broadway Financial Corp. 4.48 7.52 3.17 4.34 0.30 3.71 78.74 77.28
CAFI Camco Financial Corp. 3.46 7.51 4.20 3.31 0.44 2.35 62.20 57.12
CAPS Capital Savings Bancorp Inc. 3.18 7.49 4.35 3.13 0.58 2.12 57.55 49.70
CASB Cascade Financial Corp. 2.72 7.55 4.92 2.63 0.33 2.15 72.22 68.70
CASH First Midwest Financial Inc. 3.25 7.44 4.30 3.14 0.38 1.98 53.45 47.76
CATB Catskill Financial Corp. 4.24 7.22 3.06 4.16 0.15 1.95 46.10 44.22
CBCI Calumet Bancorp Inc. 3.87 7.75 4.16 3.60 0.10 1.52 59.07 57.92
CBCO CB Bancorp Inc. 3.98 7.69 3.84 3.84 0.76 2.15 46.59 35.98
CBES CBES Bancorp Inc. 4.42 7.95 3.68 4.27 0.53 3.02 62.53 57.92
CBK Citizens First Financial Corp. 3.20 7.24 4.15 3.08 0.52 2.53 70.26 65.26
CBNH Community Bankshares Inc. 4.35 7.82 3.73 4.09 0.56 3.35 71.09 67.11
CBSA Coastal Bancorp Inc. 2.10 6.92 4.87 2.04 0.20 1.42 59.12 55.02
CBSB Charter Financial Inc. 3.84 7.66 3.99 3.68 0.56 2.30 50.60 43.01
CCFH CCF Holding Company 4.03 7.39 3.62 3.76 1.12 5.50 112.63 116.40
CEBK Central Co-operative Bank 3.68 7.23 3.64 3.59 0.23 2.63 65.61 63.40
CENB Century Bancorp Inc. 4.07 7.61 3.75 3.85 0.08 1.16 29.58 28.09
CENF CENFED Financial Corp. 2.48 7.29 4.89 2.40 0.36 1.52 52.98 45.94
CFB Commercial Federal Corporation 2.60 7.36 4.86 2.50 0.87 1.78 47.73 29.57
CFBC Community First Banking Co. NA NA NA NA NA NA NA NA
CFCP Coastal Financial Corp. 3.97 7.87 4.14 3.73 0.72 2.67 59.50 51.63
CFFC Community Financial Corp. 4.01 7.78 3.95 3.83 0.34 2.14 51.17 46.82
CFNC Carolina Fincorp Inc. 3.93 7.27 3.44 3.82 0.42 2.51 59.21 54.75
CFSB CFSB Bancorp Inc. 3.07 7.31 4.32 2.99 0.54 1.91 53.80 45.49
CFTP Community Federal Bancorp 3.81 6.98 3.19 3.79 0.20 1.22 30.71 27.03
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation 4.04 7.29 3.58 3.71 0.95 2.96 62.51 52.95
CIBI Community Investors Bancorp 3.39 7.60 4.25 3.35 0.14 1.86 51.90 49.94
CKFB CKF Bancorp Inc. 3.72 7.41 3.75 3.65 0.10 1.92 43.62 42.08
CLAS Classic Bancshares Inc. 3.99 7.27 3.51 3.76 0.29 2.86 67.86 65.41
CMRN Cameron Financial Corp 4.07 7.88 3.99 3.90 0.13 1.89 46.96 45.24
CMSB Commonwealth Bancorp Inc. 3.53 6.93 3.63 3.30 0.58 2.94 67.96 62.37
CMSV Community Savings (MHC) 3.53 7.19 3.86 3.34 0.53 2.57 66.33 60.95
CNIT CENIT Bancorp Inc. 3.24 7.16 4.12 3.04 0.49 2.44 67.83 62.63
CNSB CNS Bancorp Inc. 3.56 7.13 3.65 3.48 0.18 2.22 60.85 58.82
CNY Carver Bancorp Inc. 2.70 5.69 3.10 2.59 0.27 2.64 89.47 88.38
COFD Collective Bancorp Inc. 2.92 7.02 4.17 2.86 0.33 1.33 38.03 30.93
COFI Charter One Financial 2.88 7.33 4.54 2.80 0.43 1.34 40.48 31.26
CONE Conestoga Bancorp, Inc. 2.84 6.42 3.68 2.73 0.16 2.05 70.85 69.16
COOP Cooperative Bankshares Inc. 2.97 7.23 4.30 2.92 0.16 1.97 63.79 61.85
CRZY Crazy Woman Creek Bancorp 3.79 7.30 3.54 3.76 0.15 1.92 49.21 47.22
CSA Coast Savings Financial 2.67 7.08 4.54 2.54 0.57 1.78 55.52 45.59
CSBF CSB Financial Group Inc. 2.80 6.04 3.33 2.71 0.23 2.65 86.04 84.83
CTZN CitFed Bancorp Inc. 2.51 6.86 4.49 2.37 1.01 2.08 56.52 38.07
CVAL Chester Valley Bancorp Inc. 3.71 7.48 3.85 3.64 0.36 2.55 63.92 60.35
CZF CitiSave Financial Corp 4.08 7.12 3.25 3.87 1.46 3.90 73.29 63.19
DCBI Delphos Citizens Bancorp Inc. 4.06 7.35 3.40 3.95 0.20 1.51 36.45 33.27
DIBK Dime Financial Corp. 3.52 7.31 3.87 3.44 0.27 1.74 45.13 40.91
DIME Dime Community Bancorp Inc. 4.13 7.22 3.30 3.92 0.24 2.18 46.65 43.32
DME Dime Bancorp Inc. 2.54 6.77 4.33 2.44 0.42 1.57 52.39 44.14
DNFC D & N Financial Corp. 3.15 7.66 4.59 3.07 0.43 2.05 58.66 52.92
DSL Downey Financial Corp. 3.04 7.39 4.51 2.89 0.28 1.38 57.69 53.60
EBSI Eagle Bancshares 4.08 8.39 4.64 3.76 1.56 4.04 78.22 69.18
EFBC Empire Federal Bancorp Inc. 4.48 7.69 3.30 4.40 0.93 2.74 51.47 41.21
EFBI Enterprise Federal Bancorp 3.05 7.58 4.62 2.96 0.05 1.65 54.35 53.60
EGFC Eagle Financial Corp. 3.10 7.04 4.06 2.98 0.38 1.89 49.11 42.67
EGLB Eagle BancGroup Inc. 2.47 6.98 4.60 2.37 0.18 1.98 78.36 76.76
EIRE Emerald Isle Bancorp Inc. 3.39 7.62 4.30 3.31 0.19 2.00 56.96 54.48
EMLD Emerald Financial Corp. 2.95 7.60 4.70 2.90 0.26 1.60 49.92 45.36
EQSB Equitable Federal Savings Bank 2.62 7.25 4.73 2.51 0.53 1.54 58.41 49.62
ESBK Elmira Savings Bank (The) 3.73 7.61 4.02 3.59 0.77 3.67 81.05 76.99
ESX Essex Bancorp Inc. 2.90 7.61 4.88 2.74 1.36 4.11 93.71 90.59
ETFS East Texas Financial Services 3.11 6.94 3.89 3.05 0.15 2.22 68.81 67.29
FAB FirstFed America Bancorp Inc. 2.89 6.93 4.13 2.79 0.46 2.23 68.68 63.53
FBBC First Bell Bancorp Inc. 2.56 6.87 4.35 2.52 0.07 0.67 25.68 23.50
FBCI Fidelity Bancorp Inc. 3.14 7.36 4.30 3.06 0.24 1.97 59.38 56.15
FBCV 1ST Bancorp 2.63 7.52 4.99 2.53 0.40 2.54 84.12 81.64
FBER 1st Bergen Bancorp 3.68 7.10 3.56 3.55 0.11 2.10 57.86 56.59
FBHC Fort Bend Holding Corp. 3.07 7.04 4.15 2.89 1.54 3.51 85.07 77.13
FBNW FirstBank Corp. 3.38 7.79 4.58 3.21 0.67 5.26 135.50 142.94
FBSI First Bancshares Inc. 3.58 7.57 4.16 3.42 0.27 1.79 49.83 45.81
FCB Falmouth Co-Operative Bank 3.84 6.83 3.06 3.77 0.13 2.78 71.20 70.24
FCBF FCB Financial Corp. 3.48 7.48 4.06 3.42 0.26 1.74 47.38 43.32
FCIT First Citizens Financial Corp. 3.18 7.45 4.42 3.03 0.32 2.07 63.52 59.64
FCME First Coastal Corporation 3.99 7.55 3.86 3.69 0.36 3.30 79.46 77.47
FDEF First Defiance Financial 4.32 7.80 3.65 4.15 0.27 2.45 54.19 51.20
FED FirstFed Financial Corp. 2.43 7.12 4.80 2.32 0.22 1.09 44.50 39.27
FESX First Essex Bancorp Inc. 3.39 7.48 4.23 3.25 0.28 2.19 57.92 54.30
FFBA First Colorado Bancorp Inc. 3.38 7.10 3.84 3.25 0.33 1.50 41.50 35.54
FFBH First Federal Bancshares of AR 3.28 7.58 4.35 3.23 0.25 1.65 47.35 43.31
FFBI First Financial Bancorp Inc. 2.92 7.12 4.30 2.82 0.45 2.50 76.55 72.78
FFBS FFBS BanCorp Inc. 3.66 7.35 3.74 3.61 0.53 1.78 42.91 34.46
FFBZ First Federal Bancorp Inc. 3.75 7.52 4.06 3.46 0.46 2.53 66.45 62.02
FFCH First Financial Holdings Inc. 3.12 7.50 4.47 3.03 0.74 2.26 59.85 50.00
FFDB FirstFed Bancorp Inc. 3.53 7.55 4.14 3.41 0.49 2.27 55.79 49.44
FFDF FFD Financial Corp. 3.34 6.88 3.58 3.30 0.07 1.83 54.43 53.47
FFED Fidelity Federal Bancorp 2.59 7.81 5.38 2.43 1.85 3.11 72.52 51.53
FFES First Federal of East Hartford 2.47 6.79 4.38 2.41 0.15 1.50 58.18 55.57
FFFC FFVA Financial Corp. 3.89 7.85 4.07 3.78 0.22 1.84 45.37 42.12
FFFD North Central Bancshares Inc. 4.15 7.64 3.63 4.01 0.95 2.17 43.79 30.52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. 3.55 7.36 4.02 3.34 0.76 2.91 69.95 63.10
FFFL Fidelity Bankshares Inc. (MHC) 3.47 7.28 4.01 3.27 0.40 2.70 72.20 68.80
FFHC First Financial Corp. 3.47 7.54 4.22 3.32 0.75 1.93 45.95 33.73
FFHH FSF Financial Corp. 3.07 7.38 4.40 2.98 0.36 2.00 59.96 55.10
FFHS First Franklin Corporation 2.64 7.05 4.49 2.57 0.16 1.80 64.62 62.43
FFIC Flushing Financial Corp. 4.02 7.63 3.65 3.97 0.20 2.37 56.37 54.21
FFKY First Federal Financial Corp. 4.19 7.84 3.89 3.95 0.61 2.03 42.95 34.12
FFLC FFLC Bancorp Inc. 3.60 7.35 3.90 3.45 0.22 1.85 50.31 47.08
FFOH Fidelity Financial of Ohio 3.22 7.33 4.24 3.10 0.19 1.88 53.14 50.32
FFPB First Palm Beach Bancorp Inc. 3.11 7.43 4.47 2.95 0.38 2.35 69.44 65.51
FFSL First Independence Corp. 2.79 7.29 4.56 2.73 0.20 1.99 67.67 65.32
FFSX First Fed SB of Siouxland(MHC) 3.08 7.40 4.44 2.96 0.46 2.22 64.98 59.50
FFWC FFW Corp. 3.31 7.77 4.55 3.22 0.38 1.84 51.19 45.45
FFWD Wood Bancorp Inc. 4.25 7.97 3.86 4.11 0.23 2.15 49.46 46.63
FFYF FFY Financial Corp. 3.76 7.73 4.08 3.66 0.16 1.79 46.94 44.65
FGHC First Georgia Holding Inc. 4.07 8.38 4.57 3.81 0.75 3.16 68.23 61.96
FIBC Financial Bancorp Inc. 3.96 7.32 3.55 3.77 0.22 2.08 53.24 50.50
FISB First Indiana Corporation 4.39 8.37 4.17 4.20 0.75 2.53 52.04 43.43
FKFS First Keystone Financial 3.34 7.15 3.96 3.19 0.33 2.18 62.23 58.38
FKKY Frankfort First Bancorp Inc. 3.68 7.15 3.53 3.62 0.05 2.22 60.56 60.05
FLAG FLAG Financial Corp. 3.94 7.55 3.95 3.60 1.26 3.19 65.27 53.09
FLFC First Liberty Financial Corp. 3.95 7.82 4.19 3.63 0.82 2.72 58.93 49.59
FLGS Flagstar Bancorp Inc. 3.38 7.45 4.37 3.08 3.61 4.46 66.71 27.72
FLKY First Lancaster Bancshares 4.99 8.08 3.16 4.93 0.00 2.64 53.57 53.57
FMBD First Mutual Bancorp Inc. 2.85 6.73 4.09 2.65 0.30 2.79 86.52 84.98
FMCO FMS Financial Corporation 3.70 7.22 3.69 3.53 0.46 2.40 57.85 52.36
FMSB First Mutual Savings Bank 9.04 8.20 4.64 3.55 0.35 2.22 56.99 52.78
FNGB First Northern Capital Corp. 3.26 7.17 4.03 3.14 0.44 2.13 59.38 53.67
FOBC Fed One Bancorp 3.54 7.22 3.78 3.44 0.17 2.02 53.45 51.08
FPRY First Financial Bancorp 3.15 7.62 4.63 2.98 0.52 2.92 82.09 78.98
FRC First Republic Bancorp 2.42 7.64 5.24 2.40 0.13 1.37 49.46 46.72
FSBI Fidelity Bancorp Inc. 3.27 7.27 4.09 3.18 0.25 2.00 58.36 55.03
FSFC First Southeast Financial Corp 3.32 7.50 4.30 3.20 0.33 1.75 50.19 45.00
FSLA First Savings Bank (MHC) 3.28 7.01 3.87 3.14 0.23 1.65 45.73 41.69
FSNJ First Savings Bk of NJ (MHC) 2.03 6.35 4.39 1.96 0.19 1.71 78.73 76.64
FSPG First Home Bancorp Inc. 3.13 7.50 4.46 3.04 0.19 1.64 51.03 47.99
FSPT FirstSpartan Financial Corp. NA NA NA NA NA NA NA NA
FSSB First FS&LA of San Bernardino 3.67 7.74 4.33 3.41 0.89 4.27 100.81 101.02
FSTC First Citizens Corp. 3.92 6.98 3.27 3.71 0.76 4.15 90.31 88.32
FTF Texarkana First Financial Corp 3.93 7.90 4.06 3.84 0.38 1.51 35.71 29.39
FTFC First Federal Capital Corp. 3.01 7.38 4.53 2.85 1.17 2.56 62.98 47.84
FTNB Fulton Bancorp Inc. 3.69 7.50 3.87 3.63 0.49 2.43 59.22 53.66
FTSB Fort Thomas Financial Corp. 4.12 8.38 4.36 4.02 0.19 2.31 54.86 52.73
FWWB First SB of Washington Bancorp 3.56 7.53 4.05 3.48 0.29 1.94 47.45 43.02
GAF GA Financial Inc. 3.94 7.20 3.36 3.83 0.23 2.24 54.57 51.85
GBCI Glacier Bancorp Inc. 4.43 7.77 3.58 4.20 1.39 3.14 55.71 41.05
GDVS Greater Delaware Valley (MHC) 3.48 6.96 3.59 3.36 0.28 2.20 61.31 58.10
GDW Golden West Financial 2.37 7.09 4.79 2.30 0.19 0.83 33.45 27.97
GFCO Glenway Financial Corp. 3.24 7.44 4.33 3.11 0.25 2.10 60.36 57.21
GFED Guaranty Federal SB (MHC) 3.39 7.61 4.35 3.26 0.24 2.02 59.55 56.63
GFSB GFS Bancorp Inc. 3.44 8.02 4.60 3.42 0.15 1.65 46.11 43.75
GLBK Glendale Co-Operative Bank 3.91 7.18 3.35 3.83 0.27 2.96 72.03 70.06
GLN Glendale Federal Bank FSB 2.65 7.03 4.50 2.53 0.60 1.75 53.02 41.83
GOSB GSB Financial Corporation 3.83 6.73 3.19 3.55 0.23 3.06 81.08 79.86
GPT GreenPoint Financial Corp. 3.93 7.23 3.58 3.65 0.33 2.07 43.50 38.47
GRTR Greater New York Savings Bank 3.16 6.92 3.95 2.97 0.32 2.11 57.06 52.48
GSBC Great Southern Bancorp Inc. 4.04 8.30 4.33 3.97 1.28 2.41 45.64 28.13
GSFC Green Street Financial Corp. 4.35 7.31 2.99 4.32 0.06 1.88 43.05 42.21
GSLA GS Financial Corp. 4.29 6.96 2.89 4.08 0.01 2.14 52.34 52.24
GTFN Great Financial Corporation 3.05 7.39 4.52 2.87 0.92 2.47 63.98 52.46
GTPS Great American Bancorp 4.34 7.21 3.14 4.07 0.45 3.43 76.24 73.60
GUPB GFSB Bancorp Inc. 3.13 7.07 3.97 3.10 0.05 1.76 56.02 55.28
GWBC Gateway Bancorp Inc. 3.21 6.75 3.57 3.18 0.11 1.53 46.59 44.76
HALL Hallmark Capital Corp. 2.50 7.50 5.05 2.44 0.23 1.53 57.02 52.91
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. 3.70 7.66 4.07 3.59 0.35 1.90 47.25 42.06
HARL Harleysville Savings Bank 2.87 7.39 4.59 2.80 0.12 1.29 44.25 41.87
HARS Harris Savings Bank (MHC) 2.71 7.07 4.48 2.59 0.31 1.72 55.49 50.17
HAVN Haven Bancorp Inc. 3.21 7.14 4.06 3.08 0.58 2.25 60.44 52.96
HBBI Home Building Bancorp 3.51 7.49 4.12 3.37 0.28 2.36 64.51 61.56
HBEI Home Bancorp of Elgin Inc. 4.20 6.89 2.88 4.01 0.49 2.84 63.79 59.36
HBFW Home Bancorp 2.94 7.33 4.43 2.90 0.07 1.32 44.45 43.15
HBNK Highland Federal Bank FSB 4.41 8.74 4.62 4.12 0.38 2.41 51.65 47.18
HBS Haywood Bancshares Inc. 3.34 7.04 3.86 3.18 0.35 2.06 65.28 61.43
HCBB HCB Bancshares Inc. 2.76 7.17 4.51 2.65 0.27 2.26 72.89 70.18
HCFC Home City Financial Corp. 3.93 8.14 4.30 3.84 0.13 2.18 54.80 53.28
HEMT HF Bancorp Inc. 2.40 6.84 4.54 2.30 0.23 2.21 77.42 75.18
HFFB Harrodsburg First Fin Bancorp 3.65 7.06 3.48 3.58 0.07 1.65 45.27 44.13
HFFC HF Financial Corp. 3.55 7.79 4.41 3.38 1.11 3.17 69.18 59.06
HFGI Harrington Financial Group 1.60 6.66 5.10 1.56 0.05 0.92 57.33 56.05
HFNC HFNC Financial Corp. 3.69 7.45 3.91 3.55 0.13 1.72 46.62 44.63
HFSA Hardin Bancorp Inc. 2.79 7.32 4.58 2.74 0.24 1.76 59.79 56.27
HHFC Harvest Home Financial Corp. 2.88 7.06 4.24 2.83 0.06 1.69 58.47 57.56
HIFS Hingham Instit. for Savings 3.96 7.62 3.78 3.83 0.35 2.16 50.64 46.09
HMCI HomeCorp Inc. 3.12 7.19 4.33 2.86 0.64 2.75 83.66 79.99
HMLK Hemlock Federal Financial Corp 2.89 6.60 3.74 2.86 0.28 1.95 62.16 58.45
HMNF HMN Financial Inc. 2.84 7.15 4.35 2.80 0.20 1.53 50.85 47.38
HOMF Home Federal Bancorp 3.75 7.90 4.34 3.56 0.87 2.20 49.17 36.76
HPBC Home Port Bancorp Inc. 4.74 8.13 3.53 4.60 0.44 2.23 44.30 38.95
HRBF Harbor Federal Bancorp Inc. 2.94 7.28 4.39 2.89 0.07 1.78 60.25 59.25
HRZB Horizon Financial Corp. 3.57 7.63 4.11 3.51 0.25 1.33 35.37 30.78
HTHR Hawthorne Financial Corp. 3.43 8.19 4.89 3.30 0.35 2.54 69.84 66.62
HVFD Haverfield Corporation 3.66 7.92 4.34 3.58 0.66 2.70 62.79 55.95
HWEN Home Financial Bancorp 4.72 8.81 4.23 4.58 0.16 3.42 74.62 73.72
HZFS Horizon Financial Svcs Corp. 3.42 7.69 4.36 3.33 0.46 2.51 62.47 57.26
IBSF IBS Financial Corp. 3.10 6.88 3.87 3.01 0.09 1.97 63.73 62.68
IFSB Independence Federal Savings 2.63 7.20 4.68 2.52 1.15 3.05 79.68 70.39
IFSL Indiana Federal Corporation 3.54 7.48 4.23 3.26 0.88 2.44 56.70 45.01
INBI Industrial Bancorp 4.19 7.97 3.86 4.11 0.13 1.90 44.65 42.84
INCB Indiana Community Bank SB 4.45 7.76 3.44 4.32 0.90 3.97 76.08 71.08
IPSW Ipswich Savings Bank 3.81 7.17 3.55 3.62 0.64 2.55 59.60 52.50
ISBF ISB Financial Corporation 3.70 7.22 3.77 3.46 0.55 2.64 61.81 55.68
ITLA ITLA Capital Corp. 4.79 9.68 4.93 4.75 0.17 2.22 44.62 42.63
IWBK InterWest Bancorp Inc. 3.42 7.52 4.31 3.21 0.64 2.10 54.75 45.75
JOAC Joachim Bancorp Inc. 4.25 7.11 2.95 4.16 0.15 2.96 68.77 67.66
JSBA Jefferson Savings Bancorp 3.02 7.43 4.51 2.92 0.19 1.64 49.48 46.19
JSBF JSB Financial Inc. 4.73 7.01 2.56 4.45 0.20 1.72 38.70 35.96
JXSB Jacksonville Savings Bk (MHC) 3.71 7.48 4.13 3.35 0.43 2.72 71.81 68.19
JXVL Jacksonville Bancorp Inc. 3.70 7.58 3.97 3.60 0.49 2.16 54.97 48.83
KFBI Klamath First Bancorp 3.37 7.38 4.04 3.34 0.06 1.45 42.76 41.74
KNK Kankakee Bancorp Inc. 3.25 7.24 4.11 3.13 0.42 2.32 63.36 58.42
KSAV KS Bancorp Inc. 4.02 8.08 4.27 3.81 0.16 1.94 48.60 46.41
KSBK KSB Bancorp Inc. 4.48 8.17 3.83 4.34 0.85 3.33 62.77 55.48
KYF Kentucky First Bancorp Inc. 3.51 7.20 3.77 3.43 0.17 1.90 52.83 50.53
LARK Landmark Bancshares Inc. 3.16 7.38 4.28 3.10 0.25 1.60 47.98 43.79
LARL Laurel Capital Group Inc. 3.73 7.41 3.76 3.65 0.28 1.69 44.05 39.81
LFBI Little Falls Bancorp Inc. 2.73 6.56 3.95 2.62 0.10 1.70 57.66 56.02
LFCO Life Financial Corp. 2.41 6.50 4.40 2.09 17.15 7.03 35.57 (492.06)
LFED Leeds Federal Savings Bk (MHC) 2.98 7.02 4.09 2.93 0.10 0.98 32.45 30.15
LIFB Life Bancorp Inc. 2.66 7.23 4.66 2.56 0.22 1.31 44.80 40.06
LISB Long Island Bancorp Inc. 2.90 6.84 4.08 2.77 0.48 1.90 57.16 49.69
LOGN Logansport Financial Corp. 3.90 7.52 3.72 3.80 0.17 1.61 40.51 37.80
LONF London Financial Corporation 3.74 7.44 3.74 3.70 0.17 2.55 65.93 64.37
LSBI LSB Financial Corp. 3.56 7.70 4.35 3.35 0.28 2.45 67.43 64.65
LSBX Lawrence Savings Bank 3.37 7.23 3.95 3.28 0.32 2.33 63.52 59.98
LVSB Lakeview Financial 3.57 7.02 3.62 3.41 0.83 2.39 49.11 36.65
LXMO Lexington B&L Financial Corp. 3.86 7.53 3.74 3.79 0.14 2.25 57.12 55.48
MAFB MAF Bancorp Inc. 3.07 7.18 4.27 2.92 0.42 1.43 47.02 39.32
MARN Marion Capital Holdings 4.39 7.89 3.79 4.11 0.19 1.65 36.56 33.70
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. 2.93 6.63 3.75 2.88 0.19 1.42 44.76 41.09
MBB MSB Bancorp Inc. 3.26 6.68 3.67 3.00 0.44 2.50 58.88 52.83
MBBC Monterey Bay Bancorp Inc. 2.90 7.22 4.44 2.78 0.29 2.21 65.44 61.79
MBLF MBLA Financial Corp. 1.96 6.69 4.74 1.94 0.01 0.63 31.85 31.52
MBSP Mitchell Bancorp Inc. 5.13 7.72 2.68 5.04 0.07 2.17 42.53 41.72
MCBN Mid-Coast Bancorp Inc. 4.29 8.34 4.38 3.96 0.34 2.95 68.50 65.82
MCBS Mid Continent Bancshares Inc. 2.48 6.78 4.49 2.30 1.88 2.47 58.65 24.81
MDBK Medford Savings Bank 3.33 6.90 3.70 3.20 0.28 1.76 47.07 42.45
MECH Mechanics Savings Bank 4.06 7.16 3.30 3.86 1.17 3.03 59.75 47.56
MERI Meritrust Federal SB 3.54 7.23 3.84 3.39 0.75 2.22 53.76 43.57
METF Metropolitan Financial Corp. 3.43 8.17 4.91 3.26 0.39 2.47 66.60 62.60
MFBC MFB Corp. 3.28 7.41 4.21 3.20 0.14 1.83 54.81 52.79
MFCX Marshalltown Financial Corp. 2.69 6.94 4.30 2.64 0.12 1.87 68.04 66.63
MFFC Milton Federal Financial Corp. 3.15 7.27 4.22 3.05 0.12 2.19 68.99 67.75
MFLR Mayflower Co-operative Bank 4.13 7.49 3.59 3.91 0.39 2.39 54.94 50.46
MFSL Maryland Federal Bancorp 2.72 7.31 4.61 2.69 0.22 1.57 52.52 48.69
MGNL Magna Bancorp Inc. 5.51 8.26 3.48 4.78 2.66 4.54 57.74 34.24
MIFC Mid-Iowa Financial Corp. 3.04 7.25 4.28 2.98 0.79 2.05 54.95 43.02
MIVI Mississippi View Holding Co. 3.85 7.53 3.64 3.89 0.23 2.34 56.76 54.22
MLBC ML Bancorp Inc. 3.17 7.20 4.23 2.96 0.43 2.33 70.31 66.01
MONT Montgomery Financial Corp. 3.03 7.75 4.84 2.91 0.01 1.81 64.77 64.62
MRKF Market Financial Corporation 2.98 6.29 3.35 2.94 0.01 1.91 64.89 64.80
MSBF MSB Financial Inc. 4.75 7.96 3.37 4.59 0.53 2.89 56.54 51.56
MSBK Mutual Savings Bank FSB 1.70 6.31 4.64 1.67 0.45 2.12 100.09 100.11
MWBI Midwest Bancshares Inc. 2.92 7.39 4.56 2.84 0.25 1.91 62.18 58.81
MWBX MetroWest Bank 4.12 7.65 3.72 3.94 0.37 2.67 61.86 58.29
MWFD Midwest Federal Financial 3.98 7.82 4.14 3.68 0.82 2.72 59.58 50.63
NASB North American Savings Bank 3.42 8.13 4.80 3.33 0.68 1.75 46.80 35.89
NBN Northeast Bancorp 4.05 8.39 4.47 3.92 0.94 3.54 70.52 63.49
NBSI North Bancshares Inc. 3.32 7.22 3.95 3.26 0.17 2.51 73.21 71.83
NEIB Northeast Indiana Bancorp 3.56 7.74 4.23 3.51 0.27 1.75 46.35 42.25
NHTB New Hampshire Thrift Bncshrs 4.15 8.57 4.64 3.92 0.60 2.96 62.57 56.85
NMSB NewMil Bancorp Inc. 4.08 7.45 3.51 3.93 0.41 2.79 65.82 62.25
NSBC NewSouth Bancorp, Inc. 4.01 7.68 3.74 3.93 0.64 3.28 71.80 67.20
NSLB NS&L Bancorp Inc. 3.15 6.55 3.48 3.07 0.32 2.27 66.80 63.31
NSSB Norwich Financial Corp. 4.43 7.58 3.38 4.21 0.50 2.59 52.45 46.85
NSSY Norwalk Savings Society 3.17 7.16 4.08 3.08 0.55 2.50 69.15 63.63
NTMG Nutmeg Federal S&LA 4.32 7.47 3.35 4.12 1.09 4.08 76.77 70.61
NWEQ Northwest Equity Corp. 3.89 8.01 4.33 3.68 0.33 2.30 57.50 53.69
NWSB Northwest Savings Bank (MHC) 3.85 7.81 4.12 3.69 0.30 2.31 57.23 53.76
NYB New York Bancorp Inc. 3.97 7.53 3.67 3.86 0.37 1.77 40.46 34.78
OCFC Ocean Financial Corp. 3.27 6.81 3.63 3.17 0.18 1.65 49.22 46.40
OCWN Ocwen Financial Corporation 3.20 8.36 5.70 2.66 0.82 1.40 99.85 99.81
OFCP Ottawa Financial Corp. 3.30 7.32 4.25 3.07 0.30 2.07 57.14 52.95
OHSL OHSL Financial Corp. 3.31 7.58 4.33 3.26 0.14 1.91 56.24 54.36
PALM Palfed, Inc. 3.89 8.03 4.36 3.67 0.67 2.92 65.23 58.88
PAMM PacificAmerica Money Center 0.47 9.65 3.78 5.87 47.26 33.65 62.31 (240.86)
PBCI Pamrapo Bancorp Inc. 4.82 7.66 3.09 4.57 0.31 2.55 50.59 47.19
PBCT People's Bank (MHC) 3.66 6.88 3.48 3.41 2.27 3.72 64.57 40.94
PBKB People's Bancshares Inc. 3.46 7.23 3.95 3.28 0.24 2.67 75.70 73.90
PBNB People's Savings Financial Cp. 3.36 7.11 3.89 3.23 0.61 2.18 53.96 45.18
PCBC Perry County Financial Corp. 2.96 6.83 3.91 2.92 0.05 1.04 34.96 33.73
PCCI Pacific Crest Capital 4.70 9.43 4.86 4.57 0.12 2.73 54.37 53.13
PDB Piedmont Bancorp Inc. 3.95 7.73 3.89 3.83 0.24 2.07 50.99 47.98
PEEK Peekskill Financial Corp. 3.73 6.67 2.98 3.69 0.11 1.78 46.77 45.13
PERM Permanent Bancorp Inc. 2.79 7.17 4.48 2.68 0.36 1.97 63.15 58.25
PERT Perpetual Bank (MHC) 4.24 8.01 3.91 4.09 1.18 3.20 61.08 49.90
PETE Primary Bank 3.66 7.17 3.76 3.41 0.60 3.06 74.61 70.13
PFDC Peoples Bancorp 3.62 7.55 3.97 3.58 0.22 1.42 37.35 33.45
PFED Park Bancorp Inc. 3.68 7.05 3.51 3.54 0.13 2.01 56.95 55.39
PFFB PFF Bancorp Inc. 2.97 7.22 4.34 2.88 0.39 2.15 64.14 59.32
PFFC Peoples Financial Corp. 3.63 6.94 3.40 3.54 0.03 2.23 62.39 62.06
PFNC Progress Financial Corporation 4.33 8.00 3.99 4.02 0.90 3.94 73.58 67.68
PFSB PennFed Financial Services Inc 2.81 7.13 4.44 2.69 0.16 1.43 42.99 39.67
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) 2.06 6.82 4.87 1.95 0.34 1.20 52.25 43.99
PHBK Peoples Heritage Finl Group 4.70 7.57 3.28 4.28 0.92 3.21 58.73 49.92
PHFC Pittsburgh Home Financial Corp 3.33 7.60 4.47 3.13 0.15 2.05 61.93 60.04
PHSB Peoples Home Savings Bk (MHC) NA NA NA NA NA NA NA NA
PKPS Poughkeepsie Financial Corp. 3.30 7.54 4.40 3.15 0.39 2.49 67.55 63.56
PLSK Pulaski Savings Bank (MHC) 2.87 6.74 3.95 2.79 0.06 1.80 62.89 62.07
PMFI Perpetual Midwest Financial 2.88 7.48 4.72 2.75 0.41 2.24 70.08 65.66
POBS Portsmouth Bank Shares 4.07 6.94 3.02 3.92 0.12 1.35 33.37 31.41
PRBC Prestige Bancorp Inc. 3.22 6.80 3.67 3.13 0.24 2.26 67.20 64.73
PROV Provident Financial Holdings 3.25 7.03 3.93 3.10 0.67 2.70 73.33 67.61
PSBK Progressive Bank Inc. 4.03 7.71 3.89 3.82 0.39 2.39 53.18 48.42
PSFC Peoples-Sidney Financial Corp. 3.27 7.69 4.49 3.20 0.07 1.67 50.92 49.80
PSFI PS Financial Inc. 5.61 7.21 2.22 4.99 0.09 1.46 28.78 27.43
PTRS Potters Financial Corp. 3.43 7.11 3.79 3.33 0.26 2.49 74.27 72.27
PULB Pulaski Bank, Svgs Bank (MHC) 3.64 7.45 3.90 3.56 0.24 2.45 64.59 62.18
PULS Pulse Bancorp 2.80 7.02 4.29 2.73 0.06 1.06 37.46 36.11
PVFC PVF Capital Corp. 4.11 8.79 4.70 4.09 0.53 2.38 51.60 45.36
PVSA Parkvale Financial Corporation 2.94 7.14 4.24 2.90 0.21 1.42 44.91 40.87
PWBC PennFirst Bancorp Inc. 2.11 6.81 4.75 2.06 0.12 1.16 50.67 47.82
PWBK Pennwood Bancorp Inc. 4.35 7.70 3.51 4.18 0.23 2.81 63.17 61.17
QCBC Quaker City Bancorp Inc. 3.21 7.73 4.61 3.12 0.29 1.98 55.17 50.97
QCFB QCF Bancorp Inc. 4.05 7.09 3.07 4.02 0.35 1.82 41.66 36.64
QCSB Queens County Bancorp Inc. 4.64 8.05 3.54 4.51 0.09 1.93 42.04 40.88
RARB Raritan Bancorp Inc. 3.78 7.27 3.62 3.66 0.19 2.00 50.82 48.22
RCSB RCSB Financial Inc. 3.56 7.57 4.25 3.32 1.57 3.23 66.70 50.95
REDF RedFed Bancorp Inc. 3.51 7.09 3.78 3.32 0.77 2.84 63.79 55.35
RELI Reliance Bancshares Inc. 4.92 7.34 2.46 4.88 0.02 2.29 46.79 46.59
RELY Reliance Bancorp Inc. 3.51 7.11 3.79 3.32 0.18 1.80 45.63 42.75
RIVR River Valley Bancorp 4.00 7.48 3.59 3.89 0.60 3.12 69.05 64.26
ROSE TR Financial Corp. 2.70 7.15 4.50 2.65 0.23 1.37 47.50 43.00
RSLN Roslyn Bancorp Inc. 3.56 7.01 3.56 3.45 0.25 1.62 43.59 39.54
RVSB Riverview Savings Bank (MHC) 4.40 8.12 4.02 4.10 0.89 2.99 56.55 47.15
SBCN Suburban Bancorporation Inc. 2.96 7.44 4.55 2.89 0.29 1.96 63.15 59.41
SBFL SB of the Finger Lakes (MHC) 3.14 7.06 4.01 3.05 0.26 2.63 79.16 77.40
SBOS Boston Bancorp (The) 2.95 6.88 4.00 2.87 0.15 1.27 42.96 39.99
SCBS Southern Community Bancshares 3.57 6.94 3.40 3.54 0.18 1.99 53.56 51.19
SCCB S. Carolina Community Bancshrs 4.03 7.54 3.60 3.94 0.27 2.56 60.70 58.02
SECP Security Capital Corporation 3.67 7.53 4.00 3.53 0.63 1.95 46.94 37.53
SFED SFS Bancorp Inc. 3.52 7.16 3.74 3.42 0.21 2.70 74.67 73.15
SFFC StateFed Financial Corporation 3.52 7.77 4.43 3.35 0.10 1.45 46.96 45.38
SFIN Statewide Financial Corp. 3.83 7.42 3.71 3.72 0.22 2.55 64.64 62.53
SFNB Security First Network Bank 3.89 5.88 2.61 3.27 6.53 36.98 372.31 916.33
SFSB SuburbFed Financial Corp. 2.85 7.08 4.31 2.77 0.65 2.49 72.42 65.96
SFSL Security First Corp. 3.99 8.18 4.32 3.86 0.26 2.02 48.65 45.25
SGVB SGV Bancorp Inc. 2.61 7.12 4.60 2.53 0.24 2.03 72.58 70.01
SHEN First Shenango Bancorp Inc. 3.21 7.38 4.21 3.17 0.20 1.45 42.13 38.43
SISB SIS Bancorp Inc. 3.85 7.11 3.46 3.64 0.76 2.87 65.38 58.14
SKAN Skaneateles Bancorp Inc. 3.94 7.62 3.88 3.74 0.62 3.23 73.36 68.96
SKBO First Carnegie Deposit (MHC) NA NA NA NA NA NA NA NA
SMBC Southern Missouri Bancorp Inc. 3.04 6.94 3.95 2.99 0.32 1.86 59.96 55.64
SMFC Sho-Me Financial Corp. 3.35 7.77 4.50 3.26 0.44 1.61 43.40 35.77
SOBI Sobieski Bancorp Inc. 3.40 7.21 3.91 3.29 0.25 2.46 69.43 67.13
SOPN First Savings Bancorp Inc. 3.89 7.37 3.54 3.83 0.15 1.27 32.10 29.48
SOSA Somerset Savings Bank 3.93 8.01 4.30 3.71 0.21 2.93 65.87 63.91
SPBC St. Paul Bancorp Inc. 3.05 6.96 4.04 2.92 0.89 2.15 57.26 44.18
SRN Southern Banc Company Inc. 2.86 7.02 4.21 2.80 0.06 2.07 70.78 70.15
SSB Scotland Bancorp Inc 4.68 7.38 2.77 4.61 0.09 1.92 40.75 39.54
SSFC South Street Financial Corp. 3.61 7.31 3.74 3.56 0.05 1.63 45.02 44.28
SSM Stone Street Bancorp Inc. 4.94 7.99 3.13 4.86 0.13 1.70 34.14 32.40
STFR St. Francis Capital Corp. 2.75 7.04 4.47 2.57 0.35 2.01 63.69 58.71
STND Standard Financial Inc. 2.82 7.05 4.30 2.75 0.17 1.82 61.97 59.59
STSA Sterling Financial Corp. 3.00 7.67 4.81 2.86 0.53 2.32 63.39 56.60
SVRN Sovereign Bancorp Inc. 2.56 6.96 4.51 2.45 0.25 1.44 49.03 43.81
SWBI Southwest Bancshares 3.42 7.44 4.23 3.21 0.18 1.80 56.10 53.66
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank 3.83 7.17 3.55 3.62 0.50 2.59 59.80 54.29
SZB SouthFirst Bancshares Inc. 3.80 7.42 3.93 3.49 0.66 3.29 79.13 75.15
TBK Tolland Bank 3.64 7.15 3.69 3.46 0.46 2.78 68.08 63.84
THR Three Rivers Financial Corp. 3.66 7.36 3.83 3.53 0.52 2.83 69.51 64.99
THRD TF Financial Corporation 3.31 6.95 3.80 3.15 0.20 2.12 58.81 56.21
TPNZ Tappan Zee Financial Inc. 3.89 7.36 3.56 3.80 0.12 2.33 58.68 57.41
TRIC Tri-County Bancorp Inc. 3.18 7.10 4.01 3.09 0.15 1.69 52.08 49.70
TSBS Peoples Bancorp Inc. (MHC) 3.57 6.78 3.39 3.39 0.27 1.92 49.28 45.19
TSH Teche Holding Co. 3.42 7.48 4.15 3.33 0.62 2.40 60.93 53.62
TWIN Twin City Bancorp 3.79 7.58 3.92 3.66 0.40 2.70 68.49 65.06
UBMT United Financial Corp. 3.87 7.00 3.26 3.73 0.54 2.05 47.98 40.45
UFRM United Federal Savings Bank 3.53 7.89 4.56 3.33 1.11 3.38 75.11 66.79
USAB USABancshares, Inc. 5.08 9.55 4.62 4.94 0.11 3.99 77.91 77.41
VABF Virginia Beach Fed. Financial 3.17 7.95 4.85 3.10 0.34 2.59 75.20 72.47
VFFC Virginia First Financial Corp. 4.01 8.31 4.43 3.87 0.65 3.35 73.67 69.25
WAMU Washington Mutual Inc. 2.94 7.34 4.53 2.82 0.62 1.71 48.65 37.40
WAYN Wayne Savings & Loan Co. (MHC) 3.27 7.52 4.34 3.18 0.19 2.35 69.69 67.90
WBST Webster Financial Corporation 3.31 6.99 3.85 3.14 0.51 2.23 57.01 49.98
WCBI Westco Bancorp 3.58 7.44 3.95 3.49 0.24 1.58 42.46 38.48
WCFB Webster City Federal SB (MHC) 3.77 7.19 3.50 3.69 0.18 1.44 36.99 33.99
WEFC Wells Financial Corp. 3.44 7.45 4.05 3.40 0.45 1.87 48.48 41.61
WEHO Westwood Homestead Fin. Corp. 3.69 7.52 3.87 3.66 0.09 1.92 51.21 49.96
WES Westcorp 3.58 7.42 4.33 3.09 4.93 7.00 86.82 65.79
WFCO Winton Financial Corp. 3.27 8.04 4.84 3.21 0.12 1.80 54.87 53.16
WFSG Wilshire Financial Services 1.65 7.38 6.04 1.34 2.99 2.91 78.88 31.75
WFSL Washington Federal Inc. 3.67 8.13 4.57 3.56 0.08 0.75 21.52 19.84
WHGB WHG Bancshares Corp. 4.03 7.23 3.37 3.87 0.12 2.51 63.08 61.98
WOFC Western Ohio Financial Corp. 2.82 7.06 4.40 2.66 0.22 2.31 76.14 74.13
WRNB Warren Bancorp Inc. 4.80 7.71 3.13 4.58 0.38 3.06 54.00 50.19
WSB Washington Savings Bank, FSB 2.70 8.06 5.47 2.59 0.21 1.60 64.23 61.33
WSFS WSFS Financial Corporation 3.51 8.12 4.68 3.44 0.69 2.30 53.90 44.72
WSTR WesterFed Financial Corp. 3.52 7.37 4.06 3.31 0.55 2.60 65.51 59.81
WVFC WVS Financial Corporation 3.76 7.59 3.87 3.72 0.11 1.64 42.70 40.95
WWFC Westwood Financial Corporation 2.97 6.91 4.02 2.89 0.17 1.35 41.28 37.84
WYNE Wayne Bancorp Inc. 3.63 7.25 3.68 3.56 0.22 2.19 60.03 57.60
YFCB Yonkers Financial Corporation 4.03 7.43 3.48 3.95 0.29 2.25 53.38 49.98
YFED York Financial Corp. 3.32 7.54 4.41 3.13 0.40 1.89 58.29 52.99
-------------------------------------------------------------------------------------------
Average 3.52 7.40 4.05 3.36 0.61 2.44 59.50 53.88
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Statement as of The Most Recent Quarter
-------------------------------------------------------------------------------------------
Net Interest Interest Net Interest Noninterest Noninterest
Interest Income/ Expense/ Income/ Income/ Expense/ Efficiency Overhead
Margin Avg Assets Avg Assets Avg Assets Avg Assets Avg Assets Ratio Ratio
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- --------------------------------------- -------------------------------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. 3.18 7.49 4.35 3.13 0.58 2.12 57.55 49.70
FBCV 1ST Bancorp 2.63 7.52 4.99 2.53 0.40 2.54 84.12 81.64
HBFW Home Bancorp 2.94 7.33 4.43 2.90 0.07 1.32 44.45 43.15
HMCI HomeCorp Inc. 3.12 7.19 4.33 2.86 0.64 2.75 83.66 79.99
KNK Kankakee Bancorp Inc. 3.25 7.24 4.11 3.13 0.42 2.32 63.36 58.42
MBLF MBLA Financial Corp. 1.96 6.69 4.74 1.94 0.01 0.63 31.85 31.52
MFBC MFB Corp. 3.28 7.41 4.21 3.20 0.14 1.83 54.81 52.79
PFDC Peoples Bancorp 3.62 7.55 3.97 3.58 0.22 1.42 37.35 33.45
WEFC Wells Financial Corp. 3.44 7.45 4.05 3.40 0.45 1.87 48.48 41.61
WCBI Westco Bancorp 3.58 7.44 3.95 3.49 0.24 1.58 42.46 38.48
-------------------------------------------------------------------------------------------
Average 3.10 7.33 4.31 3.02 0.32 1.84 54.81 51.08
Maximum 3.62 7.55 4.99 3.58 0.64 2.75 84.12 81.64
Minimum 1.96 6.69 3.95 1.94 0.01 0.63 31.85 31.52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB 332.03 351.98 400.67 NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB (0.65) 0.11 16.65 NA NA NA NA NA NA
AABC Access Anytime Bancorp, Inc. (1.35) 17.45 1.61 7.31 6.125 6.250 5.250 6.34 6.34
AADV Advantage Bancorp Inc. (3.79) (3.00) (10.75) 127.65 40.250 41.250 31.750 27.93 25.87
ABBK Abington Bancorp Inc. 4.19 1.73 6.96 51.13 21.000 22.750 19.000 17.86 15.99
ABCL Alliance Bancorp Inc. 386.35 315.42 468.08 160.53 29.000 31.250 24.750 22.93 22.63
ABCW Anchor BanCorp Wisconsin 3.38 9.09 2.06 226.78 44.250 47.000 35.500 25.73 25.22
AFBC Advance Financial Bancorp 13.45 6.24 16.77 16.27 14.000 14.500 12.750 14.75 14.75
AFCB Affiliated Community Bancorp 8.83 8.84 7.75 153.53 19.000 21.900 17.300 16.23 16.13
AFED AFSALA Bancorp Inc. 6.43 NA 8.56 22.73 13.500 14.250 12.000 15.66 15.62
AFFFZ America First Financial Fund (4.71) 7.18 10.87 236.29 31.125 34.500 28.750 28.43 28.03
AHCI Ambanc Holding Co. Inc. 4.82 0.41 17.97 71.37 13.375 14.375 11.375 13.85 13.85
AHM Ahmanson & Company (H.F.) (9.57) (2.46) (19.27) 4,501.78 43.188 47.125 35.250 20.35 17.34
ALBC Albion Banc Corp. 10.72 1.25 14.96 5.92 18.500 19.000 16.500 23.62 23.62
ALBK ALBANK Financial Corporation (1.12) (0.19) (3.33) 493.05 36.375 37.500 30.500 25.10 21.77
AMFB American Federal Bank FSB (3.48) 8.26 5.16 382.62 27.000 29.750 18.875 10.64 9.92
AMFC AMB Financial Corp. 35.03 9.76 47.42 14.22 13.813 14.250 12.750 14.29 14.29
ANA Acadiana Bancshares Inc. (4.07) 6.53 (3.73) 55.99 18.750 19.250 14.875 16.70 16.70
ANBK American National Bancorp 10.41 19.55 9.69 70.45 14.375 14.750 12.625 13.08 13.08
ANDB Andover Bancorp Inc. 1.59 1.51 17.99 155.74 26.625 29.500 25.000 18.96 18.96
ASBI Ameriana Bancorp 5.45 5.19 4.30 53.46 15.500 16.375 15.500 13.38 13.37
ASBP ASB Financial Corp. (8.62) 13.39 (0.38) 20.66 11.500 13.000 11.500 10.62 10.62
ASFC Astoria Financial Corporation 22.92 19.03 (1.67) 979.05 36.000 43.125 36.000 27.51 22.89
ATSB AmTrust Capital Corp. (6.58) (2.97) 10.48 6.61 12.125 12.250 10.000 13.72 13.57
AVND Avondale Financial Corp. 26.78 72.24 36.32 49.35 17.000 18.500 16.000 14.88 14.88
BANC BankAtlantic Bancorp Inc. 25.72 5.84 (1.87) 345.29 12.625 13.700 10.400 8.23 6.70
BDJI First Federal Bancorporation (7.34) (0.04) (9.95) 14.10 18.500 19.250 17.500 17.18 17.18
BFD BostonFed Bancorp Inc. 58.71 44.56 108.22 113.66 15.125 17.125 14.375 15.02 14.50
BFFC Big Foot Financial Corp. 4.11 26.48 (2.43) 40.83 14.875 15.000 13.250 14.35 14.35
BFSB Bedford Bancshares Inc. 5.88 3.14 6.47 27.42 19.250 20.000 17.500 17.43 17.43
BKC American Bank of Connecticut 21.59 1.25 37.33 88.05 31.000 32.875 27.375 20.39 19.49
BKCO Bankers Corp. 13.32 (22.54) 3.23 364.01 24.875 25.500 20.375 15.98 15.72
BKCT Bancorp Connecticut Inc. (5.41) (0.13) (8.18) 63.90 23.250 24.125 21.500 16.81 16.81
BKUNA BankUnited Financial Corp. 37.35 60.60 60.72 86.73 10.500 11.250 9.250 7.33 5.89
BNKU Bank United Corp. (2.06) 3.77 5.32 1,188.78 29.500 33.000 24.250 18.01 17.61
BPLS Bank Plus Corp. (4.28) (7.91) 3.37 207.57 10.375 13.750 10.375 8.88 8.86
BSBC Branford Savings Bank (13.27) (5.40) (4.15) 30.75 3.813 4.250 3.734 2.58 2.58
BTHL Bethel Bancorp 3.68 (5.87) (7.28) 15.15 13.250 13.250 11.000 13.71 11.51
BVCC Bay View Capital Corp. (30.99) (30.41) (24.52) 340.47 25.500 28.625 20.625 14.82 14.09
BWFC Bank West Financial Corp. 10.71 13.11 12.37 24.52 11.500 12.125 10.500 12.62 12.62
BYFC Broadway Financial Corp. 5.69 10.54 6.78 9.60 10.750 11.250 9.250 14.27 14.27
CAFI Camco Financial Corp. 2.54 4.30 6.20 57.06 17.143 17.857 14.048 14.25 13.11
CAPS Capital Savings Bancorp Inc. 3.78 5.69 19.73 33.11 13.750 14.750 12.750 10.89 10.89
CASB Cascade Financial Corp. 4.91 27.21 11.10 35.95 13.600 14.000 12.400 8.47 8.47
CASH First Midwest Financial Inc. 0.32 3.39 5.00 48.06 17.375 17.500 15.250 15.18 13.43
CATB Catskill Financial Corp. (2.45) (2.45) 5.95 79.27 16.375 16.500 13.750 14.70 14.70
CBCI Calumet Bancorp Inc. (12.28) (8.56) (12.66) 80.87 35.625 37.000 32.500 35.23 35.23
CBCO CB Bancorp Inc. 1.03 (5.67) (2.65) 39.80 33.750 33.750 23.750 17.94 17.94
CBES CBES Bancorp Inc. 15.48 12.47 38.31 18.32 16.813 17.500 14.000 17.08 17.08
CBK Citizens First Financial Corp. 15.25 14.72 (4.63) 44.08 15.250 15.750 13.875 15.91 15.91
CBNH Community Bankshares Inc. 21.83 14.98 15.06 96.76 33.000 33.875 20.250 16.80 16.80
CBSA Coastal Bancorp Inc. (3.22) (0.68) 1.50 150.92 25.750 28.250 22.375 19.35 16.34
CBSB Charter Financial Inc. 15.54 25.13 25.86 74.91 16.750 17.250 12.500 13.22 11.60
CCFH CCF Holding Company (7.09) 38.45 32.51 13.70 16.250 16.375 14.750 14.38 14.38
CEBK Central Co-operative Bank (4.13) 1.42 (1.81) 39.05 16.000 18.500 16.000 17.07 15.20
CENB Century Bancorp Inc. 7.47 10.97 7.69 29.02 69.500 71.000 62.000 73.45 73.45
CENF CENFED Financial Corp. 14.42 17.83 2.01 195.14 30.227 31.818 25.909 20.05 20.01
CFB Commercial Federal Corporation 1.96 3.52 (0.20) 834.36 33.750 39.000 31.125 18.99 16.90
CFBC Community First Banking Co. NA NA NA 80.85 NA NA NA NA NA
CFCP Coastal Financial Corp. 27.01 6.25 12.60 111.86 16.500 19.125 14.438 6.37 6.37
CFFC Community Financial Corp. 2.50 1.40 8.74 29.01 23.063 23.500 21.000 18.30 18.30
CFNC Carolina Fincorp Inc. 5.64 17.09 8.29 28.24 14.500 15.250 13.313 13.91 13.91
CFSB CFSB Bancorp Inc. 2.15 5.89 4.39 128.67 19.318 20.000 17.273 12.32 12.32
CFTP Community Federal Bancorp 0.05 6.27 2.41 76.01 17.875 20.000 16.750 16.13 16.13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation 51.03 13.55 22.93 247.95 16.875 18.500 15.125 10.25 9.55
CIBI Community Investors Bancorp 6.93 10.63 9.46 12.70 11.500 12.167 10.333 11.82 11.82
CKFB CKF Bancorp Inc. 1.30 6.40 0.20 17.85 18.000 20.250 17.500 16.59 16.59
CLAS Classic Bancshares Inc. 9.95 9.54 12.97 18.27 13.375 13.875 11.625 14.67 12.38
CMRN Cameron Financial Corp 12.12 20.97 1.78 46.39 16.000 17.000 15.500 16.92 16.92
CMSB Commonwealth Bancorp Inc. 21.90 7.40 1.65 277.78 15.125 16.000 14.625 12.50 9.60
CMSV Community Savings (MHC) 16.55 7.63 18.92 109.48 19.625 20.500 18.500 15.57 15.57
CNIT CENIT Bancorp Inc. (0.17) 18.74 (8.53) 80.42 43.750 46.000 40.000 30.58 27.97
CNSB CNS Bancorp Inc. 2.56 2.04 2.10 26.86 15.750 17.500 15.000 14.73 14.73
CNY Carver Bancorp Inc. 55.21 363.82 4.70 27.77 9.625 10.375 8.375 14.76 14.13
COFD Collective Bancorp Inc. (2.83) 4.30 (3.06) 952.51 44.875 46.500 38.000 19.48 17.76
COFI Charter One Financial 3.91 18.20 (0.09) 2,476.25 43.875 49.500 41.125 20.53 19.10
CONE Conestoga Bancorp, Inc. 4.86 (4.86) 5.85 NA 20.625 20.780 20.125 17.58 17.58
COOP Cooperative Bankshares Inc. 8.44 17.97 2.95 36.55 21.000 21.500 20.000 17.49 17.49
CRZY Crazy Woman Creek Bancorp (4.19) 14.04 (12.91) 13.82 13.750 14.250 11.875 14.42 14.42
CSA Coast Savings Financial 4.23 12.09 8.61 852.93 39.625 48.750 35.875 23.45 23.13
CSBF CSB Financial Group Inc. 3.95 (4.04) 4.52 11.30 11.375 11.375 10.000 12.78 12.05
CTZN CitFed Bancorp Inc. 2.62 14.66 19.25 350.98 35.125 37.250 31.500 21.59 19.23
CVAL Chester Valley Bancorp Inc. 20.70 4.59 (0.42) 42.36 17.250 17.500 14.800 12.72 12.72
CZF CitiSave Financial Corp (1.83) (1.93) (1.06) 19.36 19.500 19.625 13.625 12.95 12.95
DCBI Delphos Citizens Bancorp Inc. 1.74 14.61 (0.36) 30.84 13.250 14.500 12.000 14.89 14.89
DIBK Dime Financial Corp. 33.61 (7.46) 42.78 134.18 18.000 21.250 17.250 12.41 11.96
DIME Dime Community Bancorp Inc. 1.70 25.43 5.87 252.67 18.750 19.625 14.500 14.53 12.47
DME Dime Bancorp Inc. (8.59) 5.93 (0.21) 1,821.38 15.375 17.875 14.625 10.01 9.92
DNFC D & N Financial Corp. 15.05 9.71 18.00 158.00 18.125 18.500 16.375 10.56 10.44
DSL Downey Financial Corp. 22.03 21.08 30.80 614.88 19.286 22.500 18.095 14.98 14.76
EBSI Eagle Bancshares 14.97 18.04 2.61 83.08 15.500 16.000 13.625 12.74 12.74
EFBC Empire Federal Bancorp Inc. NA NA NA 37.26 12.750 14.438 12.750 15.35 15.35
EFBI Enterprise Federal Bancorp 16.73 20.44 (0.08) 38.21 15.875 16.500 14.125 15.74 15.72
EGFC Eagle Financial Corp. 14.81 11.82 6.16 143.67 28.250 30.750 28.250 22.91 17.25
EGLB Eagle BancGroup Inc. (4.95) 24.40 (5.10) 20.28 15.750 16.250 14.500 16.28 16.28
EIRE Emerald Isle Bancorp Inc. 2.44 19.64 12.66 43.59 18.625 20.500 15.450 12.83 12.83
EMLD Emerald Financial Corp. 14.90 17.54 14.71 68.33 11.500 12.250 10.625 8.73 8.58
EQSB Equitable Federal Savings Bank 13.07 7.56 15.72 23.49 33.250 34.500 28.500 24.91 24.91
ESBK Elmira Savings Bank (The) (0.40) 7.43 (4.57) 13.77 21.000 21.000 16.750 20.20 19.34
ESX Essex Bancorp Inc. 13.00 17.91 18.22 1.45 1.625 2.188 1.000 0.12 (0.08)
ETFS East Texas Financial Services (6.16) 11.99 (9.01) 18.46 17.750 18.750 16.875 19.69 19.69
FAB FirstFed America Bancorp Inc. 3.39 19.11 20.64 154.55 13.625 15.250 13.625 14.03 14.03
FBBC First Bell Bancorp Inc. 32.20 15.66 10.96 111.40 16.000 16.375 13.250 10.63 10.63
FBCI Fidelity Bancorp Inc. 1.57 6.57 3.59 54.09 20.000 20.875 16.875 17.74 17.69
FBCV 1ST Bancorp 17.39 (1.48) 34.88 21.80 31.000 32.000 28.500 31.19 30.50
FBER 1st Bergen Bancorp 8.45 (6.42) 9.00 46.36 14.000 15.125 11.375 13.76 13.76
FBHC Fort Bend Holding Corp. 23.76 57.53 19.66 24.26 24.750 24.750 22.000 22.41 20.77
FBNW FirstBank Corp. NA NA NA 30.75 NA NA NA NA NA
FBSI First Bancshares Inc. 7.73 11.95 4.84 24.86 19.500 20.750 16.500 19.80 19.77
FCB Falmouth Co-Operative Bank 7.90 28.27 11.93 24.00 14.250 15.630 13.125 15.17 15.17
FCBF FCB Financial Corp. 3.96 1.23 0.95 111.70 22.000 23.500 18.500 19.25 19.25
FCIT First Citizens Financial Corp. 3.85 4.59 4.13 95.31 26.188 28.625 18.250 14.39 14.39
FCME First Coastal Corporation 9.23 6.44 5.31 13.07 9.250 10.125 7.250 9.89 9.89
FDEF First Defiance Financial 1.95 5.16 (4.46) 141.35 13.750 14.063 11.813 12.41 12.41
FED FirstFed Financial Corp. (1.36) 3.09 15.60 337.28 23.500 28.000 21.500 18.48 18.24
FESX First Essex Bancorp Inc. 29.87 4.31 8.55 132.84 14.750 16.750 13.375 11.20 9.65
FFBA First Colorado Bancorp Inc. (1.21) 9.26 6.56 316.74 16.750 18.875 16.500 11.60 11.44
FFBH First Federal Bancshares of AR 11.09 7.34 8.09 102.21 18.500 20.375 15.875 16.79 16.79
FFBI First Financial Bancorp Inc. (5.75) (7.40) 11.88 7.79 16.500 16.500 15.500 17.50 17.50
FFBS FFBS BanCorp Inc. 4.88 13.26 4.98 40.49 22.250 23.125 22.000 17.01 17.01
FFBZ First Federal Bancorp Inc. 5.55 6.56 6.98 26.72 18.500 18.500 16.000 8.38 8.37
FFCH First Financial Holdings Inc. 4.99 9.17 1.20 204.13 24.500 28.250 22.250 15.57 15.57
FFDB FirstFed Bancorp Inc. 3.69 (10.29) 2.69 21.94 14.375 14.375 12.500 14.55 13.34
FFDF FFD Financial Corp. (4.05) 13.06 1.61 21.28 14.000 14.000 13.000 14.51 14.51
FFED Fidelity Federal Bancorp (15.20) (2.83) (5.16) 21.76 9.000 10.000 8.750 5.17 5.17
FFES First Federal of East Hartford 6.74 6.87 10.50 77.79 25.500 28.500 22.875 23.00 23.00
FFFC FFVA Financial Corp. 11.95 4.35 9.44 119.93 21.000 25.000 20.000 16.99 16.61
FFFD North Central Bancshares Inc. 0.80 7.53 8.18 53.11 15.875 16.625 13.375 14.59 14.59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. 3.89 1.77 (1.75) 40.12 4.063 4.250 3.375 2.46 2.46
FFFL Fidelity Bankshares Inc. (MHC) 24.42 15.94 28.29 135.31 20.000 20.000 17.563 12.08 11.98
FFHC First Financial Corp. 7.58 (1.18) 4.34 1,072.07 26.125 28.250 23.500 11.14 10.81
FFHH FSF Financial Corp. 5.45 16.02 18.36 55.12 17.250 18.250 14.750 15.87 15.87
FFHS First Franklin Corporation 7.08 7.27 8.57 23.57 18.500 18.750 16.000 16.93 16.81
FFIC Flushing Financial Corp. 18.49 42.04 11.62 165.80 17.875 19.938 17.375 16.06 16.06
FFKY First Federal Financial Corp. 5.70 4.39 15.29 89.45 20.000 21.000 17.750 12.16 11.42
FFLC FFLC Bancorp Inc. 13.97 28.12 12.39 63.16 25.000 27.500 20.500 22.16 22.16
FFOH Fidelity Financial of Ohio 10.53 16.54 11.60 83.91 13.000 13.750 11.500 12.03 10.57
FFPB First Palm Beach Bancorp Inc. 14.71 4.90 16.87 161.55 27.750 30.000 23.250 21.04 20.50
FFSL First Independence Corp. 1.16 3.03 22.83 11.57 12.000 12.250 10.250 11.41 11.41
FFSX First Fed SB of Siouxland(MHC) 4.83 2.77 0.05 67.14 22.333 22.333 18.833 13.32 13.20
FFWC FFW Corp. 0.61 9.04 1.33 19.52 26.750 26.750 21.500 22.75 22.75
FFWD Wood Bancorp Inc. 9.53 14.07 4.83 34.33 16.250 17.250 15.750 13.91 13.91
FFYF FFY Financial Corp. 11.22 0.98 (11.22) 109.55 25.500 25.625 25.000 19.50 19.50
FGHC First Georgia Holding Inc. (9.18) 7.03 (15.88) 23.66 7.625 7.625 5.333 4.08 3.72
FIBC Financial Bancorp Inc. 15.58 3.61 5.26 32.63 16.625 18.500 15.000 14.99 14.91
FISB First Indiana Corporation (4.08) 3.26 (6.76) 236.37 18.375 24.300 18.375 13.51 13.34
FKFS First Keystone Financial 5.08 6.78 2.23 28.70 21.750 22.500 19.000 18.12 18.12
FKKY Frankfort First Bancorp Inc. (4.87) 10.65 (7.69) 31.31 10.625 11.375 9.750 9.93 9.93
FLAG FLAG Financial Corp. 0.21 (13.26) 10.14 29.79 12.500 12.875 10.250 10.25 10.25
FLFC First Liberty Financial Corp. 11.66 3.12 5.96 171.88 21.250 22.500 18.250 11.87 10.62
FLGS Flagstar Bancorp Inc. 68.41 78.12 91.47 230.68 NA NA NA NA NA
FLKY First Lancaster Bancshares 38.96 29.59 4.07 14.62 15.500 16.000 14.500 14.44 14.44
FMBD First Mutual Bancorp Inc. 111.91 25.71 265.84 54.35 15.125 16.000 14.750 16.60 12.77
FMCO FMS Financial Corporation 8.78 4.32 18.66 58.47 19.500 20.750 18.375 14.59 14.29
FMSB First Mutual Savings Bank 9.08 (1.13) 10.28 49.25 17.614 18.636 15.909 10.55 10.55
FNGB First Northern Capital Corp. 1.56 (1.78) 7.91 99.44 19.000 19.750 16.250 16.09 16.09
FOBC Fed One Bancorp 5.05 30.37 5.70 50.30 18.000 19.500 15.750 17.07 16.26
FPRY First Financial Bancorp 15.07 16.41 12.26 NA 20.750 21.125 20.250 17.07 17.07
FRC First Republic Bancorp 4.98 3.25 7.31 233.57 22.250 24.625 16.875 16.19 16.18
FSBI Fidelity Bancorp Inc. 9.44 7.08 1.74 30.85 20.114 21.705 16.818 14.82 14.82
FSFC First Southeast Financial Corp 10.72 10.10 6.73 61.98 10.125 11.500 9.375 7.80 7.80
FSLA First Savings Bank (MHC) 15.24 8.74 5.86 197.49 21.000 23.500 18.250 13.00 11.52
FSNJ First Savings Bk of NJ (MHC) (43.80) 0.85 (1.68) 215.61 23.000 23.000 15.250 16.18 16.18
FSPG First Home Bancorp Inc. 7.90 6.76 6.81 53.15 17.875 19.000 13.875 12.36 12.14
FSPT FirstSpartan Financial Corp. NA NA NA 161.71 NA NA NA NA NA
FSSB First FS&LA of San Bernardino 12.49 (10.05) 13.89 3.16 9.750 10.500 9.000 13.68 13.18
FSTC First Citizens Corp. 107.39 88.20 106.01 49.39 25.750 25.750 21.250 16.29 12.22
FTF Texarkana First Financial Corp 11.06 9.69 10.36 37.63 16.500 17.125 14.875 14.70 14.70
FTFC First Federal Capital Corp. 3.91 7.76 11.57 216.74 18.667 19.667 15.833 10.65 9.98
FTNB Fulton Bancorp Inc. 0.01 (5.46) (3.72) 34.81 17.875 18.500 14.750 14.47 14.47
FTSB Fort Thomas Financial Corp. 15.68 15.23 21.11 14.86 11.250 14.313 10.750 10.19 10.19
FWWB First SB of Washington Bancorp 12.51 29.36 9.39 232.73 18.875 22.125 18.000 15.25 14.03
GAF GA Financial Inc. 22.90 (0.97) 5.14 145.72 14.875 17.250 14.875 14.94 14.78
GBCI Glacier Bancorp Inc. 4.67 2.22 1.86 123.26 16.333 16.500 15.500 7.77 7.55
GDVS Greater Delaware Valley (MHC) 4.11 10.36 0.61 54.00 13.000 14.000 10.125 8.37 8.37
GDW Golden West Financial 8.47 7.90 15.28 4,137.64 62.750 74.250 61.750 42.19 42.19
GFCO Glenway Financial Corp. 3.00 6.70 (2.16) 30.31 22.625 23.500 19.000 23.06 22.70
GFED Guaranty Federal SB (MHC) 10.72 9.48 (1.92) 55.47 12.875 13.000 11.500 8.68 8.68
GFSB GFS Bancorp Inc. 2.41 0.64 (0.88) 13.71 11.500 11.500 10.125 10.33 10.33
GLBK Glendale Co-Operative Bank (0.22) (0.88) (1.02) 6.68 20.000 21.000 17.000 24.46 24.46
GLN Glendale Federal Bank FSB 7.02 5.24 18.49 1,395.98 23.000 28.000 22.625 15.31 14.24
GOSB GSB Financial Corporation (5.56) NA (0.40) 33.16 NA NA NA NA NA
GPT GreenPoint Financial Corp. (1.93) 21.64 (7.75) 2,994.97 51.500 63.375 45.625 34.57 19.81
GRTR Greater New York Savings Bank 4.51 (1.97) 0.18 299.20 17.250 17.875 13.375 11.48 11.48
GSBC Great Southern Bancorp Inc. 5.78 9.72 87.91 133.13 17.375 18.000 17.000 7.35 7.35
GSFC Green Street Financial Corp. (4.12) 2.44 (9.88) 75.75 17.375 18.875 15.500 14.64 14.64
GSLA GS Financial Corp. 218.34 5.44 312.08 51.15 NA NA NA NA NA
GTFN Great Financial Corporation 14.49 3.88 6.98 472.09 30.875 34.750 29.125 19.83 18.97
GTPS Great American Bancorp 16.71 23.37 26.41 29.04 16.500 16.500 14.563 18.36 18.36
GUPB GFSB Bancorp Inc. 25.12 21.60 10.63 15.28 17.500 17.500 15.750 16.88 16.88
GWBC Gateway Bancorp Inc. (3.81) 19.48 (6.81) 19.09 15.250 15.250 14.250 15.96 15.96
HALL Hallmark Capital Corp. 12.58 27.47 13.53 31.38 18.000 19.375 17.000 19.82 19.82
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. 16.82 7.39 16.86 223.28 36.625 38.500 33.500 18.30 17.61
HARL Harleysville Savings Bank 10.27 3.65 14.76 38.42 20.500 23.000 15.200 12.82 12.82
HARS Harris Savings Bank (MHC) 39.64 8.08 0.70 245.47 19.500 22.625 18.250 13.71 11.83
HAVN Haven Bancorp Inc. 36.44 38.86 9.05 160.31 32.125 36.000 27.875 23.13 23.04
HBBI Home Building Bancorp 20.11 (2.40) 27.10 6.86 21.000 21.000 18.500 19.88 19.88
HBEI Home Bancorp of Elgin Inc. 2.65 0.77 1.97 131.42 15.000 15.500 13.000 14.39 14.39
HBFW Home Bancorp 3.22 6.58 2.47 55.74 20.375 20.875 19.000 17.43 17.43
HBNK Highland Federal Bank FSB (7.93) 11.02 (37.35) 57.05 23.250 24.000 17.500 15.70 15.70
HBS Haywood Bancshares Inc. 47.15 3.76 21.97 21.91 16.625 18.250 16.625 16.52 15.91
HCBB HCB Bancshares Inc. NA NA NA 34.72 NA NA NA NA NA
HCFC Home City Financial Corp. 0.56 23.09 1.90 13.93 13.500 14.250 12.000 16.05 16.05
HEMT HF Bancorp Inc. (11.19) 12.34 (2.67) 89.42 12.750 14.000 11.000 12.87 10.53
HFFB Harrodsburg First Fin Bancorp 4.24 5.20 4.66 31.38 15.875 18.250 15.500 15.27 15.27
HFFC HF Financial Corp. 6.19 (8.70) 4.39 64.27 19.563 20.500 16.750 16.51 16.47
HFGI Harrington Financial Group (9.11) 26.38 (3.04) 41.52 11.000 11.000 9.750 7.57 7.57
HFNC HFNC Financial Corp. (26.04) 15.97 3.52 255.74 18.250 22.063 16.750 9.23 9.23
HFSA Hardin Bancorp Inc. 26.14 17.23 13.76 13.11 15.500 15.500 12.250 15.37 15.37
HHFC Harvest Home Financial Corp. (2.66) 11.13 (1.32) 10.98 11.500 13.000 9.250 11.11 11.11
HIFS Hingham Instit. for Savings 8.10 12.80 12.01 28.68 18.500 19.250 18.250 15.09 15.09
HMCI HomeCorp Inc. 0.74 0.96 (1.50) 24.76 14.167 15.167 12.667 12.52 12.52
HMLK Hemlock Federal Financial Corp 49.42 0.35 (1.67) 29.85 NA NA NA NA NA
HMNF HMN Financial Inc. (1.23) (8.54) 1.82 94.77 20.047 23.750 18.000 18.71 18.71
HOMF Home Federal Bancorp 8.13 11.54 6.90 95.78 27.375 28.000 24.250 16.54 16.00
HPBC Home Port Bancorp Inc. (1.53) 10.54 (23.30) 37.30 17.125 19.250 16.125 11.11 11.11
HRBF Harbor Federal Bancorp Inc. 1.25 7.59 8.99 34.65 16.250 18.250 15.375 16.09 16.09
HRZB Horizon Financial Corp. 8.55 (11.09) 7.25 120.70 13.478 14.565 11.522 10.61 10.61
HTHR Hawthorne Financial Corp. (4.35) 15.14 (5.40) 33.19 10.250 11.750 7.750 12.37 12.37
HVFD Haverfield Corporation (5.99) 0.55 (8.38) 49.57 22.750 23.000 17.750 15.04 15.04
HWEN Home Financial Bancorp 4.23 39.51 (6.68) 7.29 15.000 15.500 12.750 15.12 15.12
HZFS Horizon Financial Svcs Corp. 23.36 5.44 7.17 8.09 17.500 17.750 15.000 19.33 19.33
IBSF IBS Financial Corp. (6.79) 16.17 (3.31) 203.73 14.783 15.761 13.261 11.45 11.45
IFSB Independence Federal Savings 3.23 10.79 (5.26) 12.72 7.500 9.750 7.500 13.39 11.74
IFSL Indiana Federal Corporation (8.56) (5.89) (13.14) 137.64 26.125 27.250 22.438 15.03 14.12
INBI Industrial Bancorp 8.86 8.19 2.98 74.73 12.625 13.000 12.500 11.41 11.41
INCB Indiana Community Bank SB 9.48 (5.47) 11.40 13.83 16.500 19.000 15.750 12.27 12.27
IPSW Ipswich Savings Bank 16.53 13.87 25.76 20.20 14.750 16.375 11.875 8.59 8.59
ISBF ISB Financial Corporation 4.18 14.36 4.81 165.63 24.500 26.125 17.625 17.45 14.80
ITLA ITLA Capital Corp. 0.03 1.86 (0.45) 133.10 14.875 17.250 14.000 11.77 11.72
IWBK InterWest Bancorp Inc. 16.04 21.59 7.39 314.72 32.250 36.250 31.750 14.81 14.47
JOAC Joachim Bancorp Inc. 6.22 (4.27) 12.65 11.03 14.000 14.625 14.000 13.59 13.59
JSBA Jefferson Savings Bancorp 51.86 38.64 55.28 146.65 28.500 30.500 25.250 23.22 17.69
JSBF JSB Financial Inc. 3.93 8.48 (1.19) 432.92 42.500 43.000 36.000 34.52 34.52
JXSB Jacksonville Savings Bk (MHC) 59.70 32.13 66.58 21.63 18.000 18.000 13.750 13.26 13.26
JXVL Jacksonville Bancorp Inc. 0.13 8.91 5.56 38.44 14.875 15.750 14.000 13.27 13.27
KFBI Klamath First Bancorp 6.38 16.35 12.96 196.13 17.625 18.625 15.000 15.39 15.39
KNK Kankakee Bancorp Inc. (9.43) (8.16) 1.35 42.07 27.250 27.875 23.375 25.74 24.10
KSAV KS Bancorp Inc. (0.34) 17.61 (1.63) 16.91 15.375 16.125 14.813 15.75 15.74
KSBK KSB Bancorp Inc. 16.78 8.68 (15.58) 18.70 28.000 34.000 23.000 24.31 22.87
KYF Kentucky First Bancorp Inc. 4.78 9.98 0.40 16.33 11.500 11.875 10.875 10.86 10.86
LARK Landmark Bancshares Inc. 3.28 17.01 19.15 36.61 18.750 19.750 18.000 18.11 18.11
LARL Laurel Capital Group Inc. 12.06 (2.69) 2.32 30.64 21.000 21.750 16.500 14.51 14.51
LFBI Little Falls Bancorp Inc. (0.18) 16.77 (1.34) 42.55 13.500 14.000 12.188 14.29 13.15
LFCO Life Financial Corp. 206.51 30.08 210.46 103.90 NA NA NA 10.76 10.76
LFED Leeds Federal Savings Bk (MHC) 5.16 25.81 2.84 67.37 18.000 19.000 15.500 13.21 13.21
LIFB Life Bancorp Inc. (3.35) 10.63 3.49 251.09 16.750 21.000 16.750 15.42 14.95
LISB Long Island Bancorp Inc. 3.82 15.33 0.66 863.13 33.063 39.250 33.063 21.62 21.41
LOGN Logansport Financial Corp. 8.39 0.66 13.89 17.46 13.250 15.000 11.125 12.41 12.41
LONF London Financial Corporation 6.69 15.67 7.14 7.60 17.500 17.500 14.125 14.63 14.63
LSBI LSB Financial Corp. 7.41 5.46 32.43 19.14 19.048 19.762 17.857 19.42 19.42
LSBX Lawrence Savings Bank 4.95 5.91 10.76 54.27 9.875 10.250 8.125 7.06 7.06
LVSB Lakeview Financial 8.35 NA 13.52 75.98 27.625 33.500 27.625 19.91 15.92
LXMO Lexington B&L Financial Corp. (12.34) (6.41) 0.21 17.54 15.250 15.750 13.000 15.17 15.17
MAFB MAF Bancorp Inc. 0.76 7.67 5.10 452.32 26.000 27.833 22.250 16.31 14.16
MARN Marion Capital Holdings (3.16) 1.62 (8.95) 42.05 22.000 22.000 19.250 21.99 21.99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. 5.80 3.12 3.36 130.03 41.000 42.500 37.500 33.49 33.49
MBB MSB Bancorp Inc. (4.99) 5.52 (2.77) 56.74 16.750 20.500 16.750 19.72 8.47
MBBC Monterey Bay Bancorp Inc. (3.18) 2.02 (1.08) 52.73 16.625 18.250 14.625 15.01 13.76
MBLF MBLA Financial Corp. 1.69 14.13 27.48 30.93 20.625 20.750 19.000 21.51 21.51
MBSP Mitchell Bancorp Inc. (3.61) 9.07 (4.29) 15.85 16.000 16.000 14.000 15.17 15.17
MCBN Mid-Coast Bancorp Inc. 13.45 19.25 (1.97) 4.51 19.000 19.938 18.000 21.61 21.61
MCBS Mid Continent Bancshares Inc. 17.60 13.46 15.32 57.77 25.250 27.000 23.375 19.46 19.46
MDBK Medford Savings Bank 5.77 1.76 3.37 139.07 24.500 29.750 24.500 20.43 18.91
MECH Mechanics Savings Bank 22.41 17.12 (9.81) 101.83 16.750 19.000 15.500 14.50 14.50
MERI Meritrust Federal SB 3.53 9.07 2.04 30.19 35.500 36.000 31.500 23.34 23.34
METF Metropolitan Financial Corp. 19.75 17.10 23.69 59.94 11.000 11.250 10.750 8.73 7.83
MFBC MFB Corp. 18.48 20.53 4.32 33.17 19.750 19.750 16.625 19.59 19.59
MFCX Marshalltown Financial Corp. 3.76 8.32 1.46 23.73 15.125 15.250 14.250 14.06 14.06
MFFC Milton Federal Financial Corp. 6.95 14.33 11.92 31.71 13.625 14.750 13.625 12.22 12.22
MFLR Mayflower Co-operative Bank 14.08 3.16 7.08 15.36 16.750 19.750 16.000 13.21 12.98
MFSL Maryland Federal Bancorp 10.27 NA 9.34 143.25 37.750 38.250 34.375 30.22 29.84
MGNL Magna Bancorp Inc. 12.26 (1.45) 4.54 365.35 18.250 20.250 17.000 9.61 9.30
MIFC Mid-Iowa Financial Corp. 22.23 14.58 34.55 14.67 8.000 8.500 6.375 6.71 6.70
MIVI Mississippi View Holding Co. (3.26) 1.41 (2.83) 12.28 15.250 15.500 12.000 15.55 15.55
MLBC ML Bancorp Inc. 18.08 9.34 18.97 201.15 15.375 17.750 13.750 13.03 NA
MONT Montgomery Financial Corp. (4.21) (0.09) 1.79 18.39 13.000 13.000 11.000 NA NA
MRKF Market Financial Corporation 92.84 29.88 (14.01) 17.70 12.625 12.938 12.625 14.59 14.59
MSBF MSB Financial Inc. 54.64 19.96 0.56 18.01 20.750 21.750 19.000 19.94 19.94
MSBK Mutual Savings Bank FSB (1.29) 21.43 (2.73) 45.41 6.875 7.875 5.500 9.31 9.31
MWBI Midwest Bancshares Inc. 7.57 6.79 9.91 11.41 28.000 30.000 26.500 27.68 27.68
MWBX MetroWest Bank 24.76 34.30 15.74 81.05 5.250 5.375 4.813 2.92 2.92
MWFD Midwest Federal Financial 9.72 9.53 11.23 32.90 17.625 18.500 16.750 10.66 10.24
NASB North American Savings Bank (26.77) (25.88) 5.36 113.28 38.000 39.500 33.875 24.35 23.56
NBN Northeast Bancorp 15.21 19.97 32.77 18.81 13.750 14.250 13.250 13.49 11.66
NBSI North Bancshares Inc. 8.64 3.90 (8.08) 20.70 19.750 19.750 15.750 16.94 16.94
NEIB Northeast Indiana Bancorp 7.86 12.15 29.61 28.20 15.000 15.750 13.500 14.87 14.87
NHTB New Hampshire Thrift Bncshrs 73.61 71.39 94.29 32.41 12.375 12.750 11.750 11.46 9.71
NMSB NewMil Bancorp Inc. 6.61 13.19 7.67 44.71 9.500 9.750 8.750 8.13 8.13
NSBC NewSouth Bancorp, Inc. 112.14 50.52 125.85 81.47 NA NA NA NA NA
NSLB NS&L Bancorp Inc. (2.09) 4.80 2.31 11.76 16.375 16.750 13.625 16.36 16.36
NSSB Norwich Financial Corp. 10.50 9.80 12.92 116.12 18.750 23.250 18.000 14.27 12.80
NSSY Norwalk Savings Society 18.85 12.91 (1.50) 73.61 23.250 26.000 22.938 20.69 19.95
NTMG Nutmeg Federal S&LA 1.49 2.87 (4.05) 6.17 7.000 7.750 7.000 7.35 7.35
NWEQ Northwest Equity Corp. (5.89) (3.06) (5.66) 12.53 14.125 14.500 11.875 14.19 14.19
NWSB Northwest Savings Bank (MHC) 17.91 12.38 20.45 385.70 15.375 15.750 13.250 8.30 7.79
NYB New York Bancorp Inc. 6.79 8.88 2.00 620.15 29.000 33.500 24.875 9.81 9.81
OCFC Ocean Financial Corp. 25.76 11.42 4.68 311.85 27.688 32.250 25.500 27.30 27.30
OCWN Ocwen Financial Corporation 26.70 51.94 38.98 877.68 29.000 34.750 25.250 8.40 8.40
OFCP Ottawa Financial Corp. 5.01 3.89 8.66 115.63 20.875 20.875 16.875 15.07 12.06
OHSL OHSL Financial Corp. 26.23 13.35 9.81 30.05 23.750 23.750 21.000 21.00 21.00
PALM Palfed, Inc. (5.74) 6.21 8.38 85.77 16.250 16.250 13.875 10.07 10.07
PAMM PacificAmerica Money Center (9.03) 48.64 (36.33) 66.08 30.000 35.000 28.000 13.35 13.35
PBCI Pamrapo Bancorp Inc. 4.90 (4.20) 0.12 59.70 19.625 23.750 19.000 16.43 16.29
PBCT People's Bank (MHC) (5.60) (13.48) 16.54 1,609.32 21.667 24.333 18.959 10.39 10.38
PBKB People's Bancshares Inc. 42.44 (16.04) (9.41) 59.27 12.000 13.000 10.500 8.57 8.21
PBNB People's Savings Financial Cp. (2.73) 5.47 2.00 72.94 32.000 32.875 27.500 24.14 22.61
PCBC Perry County Financial Corp. (3.45) 8.25 (1.59) 16.98 19.750 20.250 17.000 18.06 18.06
PCCI Pacific Crest Capital 50.86 8.99 28.66 37.82 13.000 13.750 11.000 8.43 8.43
PDB Piedmont Bancorp Inc. (21.00) 1.10 4.78 28.88 10.875 11.125 9.250 7.31 7.31
PEEK Peekskill Financial Corp. (10.54) 5.74 6.45 49.65 13.875 15.250 13.500 14.58 14.58
PERM Permanent Bancorp Inc. 10.39 0.67 13.94 50.86 20.750 22.500 20.375 19.05 18.89
PERT Perpetual Bank (MHC) 40.67 34.97 41.90 47.02 25.500 26.500 22.563 19.81 19.81
PETE Primary Bank 7.78 11.91 4.09 54.27 17.500 18.375 15.250 13.82 13.79
PFDC Peoples Bancorp 4.14 1.71 4.18 51.28 22.500 23.000 19.500 18.86 18.86
PFED Park Bancorp Inc. (0.48) (2.99) (1.62) 40.12 15.250 16.125 13.000 15.87 15.87
PFFB PFF Bancorp Inc. 1.77 3.88 6.64 348.64 14.375 16.938 14.250 14.09 13.93
PFFC Peoples Financial Corp. 1.99 18.09 2.94 22.92 15.250 16.000 13.000 16.18 16.18
PFNC Progress Financial Corporation 17.43 28.50 4.82 39.10 8.750 9.125 8.250 5.52 4.84
PFSB PennFed Financial Services Inc 12.76 28.02 5.66 131.98 23.500 25.250 20.000 21.21 17.49
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) 0.19 8.91 33.03 35.43 20.000 20.000 16.750 14.61 14.61
PHBK Peoples Heritage Finl Group 4.42 1.46 (3.75) 1,070.33 30.750 32.000 26.188 15.76 13.30
PHFC Pittsburgh Home Financial Corp 33.48 29.76 5.02 30.53 14.875 15.500 13.000 13.71 13.55
PHSB Peoples Home Savings Bk (MHC) NA NA NA 33.60 NA NA NA NA NA
PKPS Poughkeepsie Financial Corp. 1.14 6.40 5.48 93.68 6.000 6.500 5.250 5.76 5.76
PLSK Pulaski Savings Bank (MHC) 79.09 NA 3.73 27.95 NA NA NA NA NA
PMFI Perpetual Midwest Financial 9.52 (3.79) 8.77 38.00 19.750 20.250 18.750 17.71 17.71
POBS Portsmouth Bank Shares (12.79) (10.96) (8.11) 98.36 15.000 16.000 13.480 11.25 11.25
PRBC Prestige Bancorp Inc. 42.54 31.44 16.49 14.75 16.000 16.125 13.000 16.11 16.11
PROV Provident Financial Holdings 11.85 11.49 12.98 95.79 15.125 17.188 13.750 17.06 17.06
PSBK Progressive Bank Inc. 1.14 1.42 0.35 117.62 25.250 25.250 22.750 19.17 16.98
PSFC Peoples-Sidney Financial Corp. 6.23 4.89 0.75 25.44 NA NA NA NA NA
PSFI PS Financial Inc. (0.08) (3.71) (3.18) 31.64 13.125 14.250 11.750 14.88 14.88
PTRS Potters Financial Corp. 9.63 29.27 2.82 10.71 20.000 20.250 19.188 21.39 21.39
PULB Pulaski Bank, Svgs Bank (MHC) 3.15 7.20 2.68 41.36 19.250 20.000 14.500 11.04 11.04
PULS Pulse Bancorp 4.90 (9.95) 8.25 62.11 17.875 18.875 15.750 13.14 13.14
PVFC PVF Capital Corp. 9.98 11.72 (6.62) 44.14 16.750 18.000 15.000 10.77 10.77
PVSA Parkvale Financial Corporation 11.55 31.60 12.22 112.17 27.250 29.500 24.500 17.91 17.76
PWBC PennFirst Bancorp Inc. 4.29 5.84 4.37 71.38 13.750 14.500 13.500 12.77 11.65
PWBK Pennwood Bancorp Inc. 10.47 15.91 16.01 9.00 14.125 14.500 13.000 15.30 15.30
QCBC Quaker City Bancorp Inc. 8.57 (0.13) 18.63 89.00 15.600 16.400 14.200 14.56 14.54
QCFB QCF Bancorp Inc. 7.39 NA 8.18 31.73 19.125 19.750 17.500 18.98 18.98
QCSB Queens County Bancorp Inc. 4.31 9.11 (0.52) 510.92 36.583 39.167 30.333 21.22 21.22
RARB Raritan Bancorp Inc. (0.27) 19.91 (0.85) 50.09 16.667 17.000 15.500 12.53 12.30
RCSB RCSB Financial Inc. 7.14 34.51 (4.30) 694.90 40.938 41.125 29.500 21.42 20.90
REDF RedFed Bancorp Inc. 11.86 21.16 3.96 116.41 14.125 15.438 12.875 10.37 10.36
RELI Reliance Bancshares Inc. 20.01 33.61 2.63 20.70 7.250 7.750 6.625 8.89 NA
RELY Reliance Bancorp Inc. 10.35 10.52 9.59 251.95 23.625 25.313 18.625 17.56 12.31
RIVR River Valley Bancorp (19.83) (0.94) (22.27) 18.45 13.750 15.500 13.250 14.37 14.15
ROSE TR Financial Corp. 17.76 12.30 10.22 402.92 18.188 18.438 16.563 12.77 12.77
RSLN Roslyn Bancorp Inc. (84.97) 96.33 (47.40) 954.68 16.313 18.625 15.000 14.08 14.01
RVSB Riverview Savings Bank (MHC) (0.16) 10.37 4.01 53.61 18.000 21.000 15.227 10.36 9.40
SBCN Suburban Bancorporation Inc. 5.84 9.92 13.90 30.60 17.500 19.375 15.250 18.02 18.02
SBFL SB of the Finger Lakes (MHC) 24.73 14.70 12.22 30.79 15.000 15.750 13.250 11.27 11.27
SBOS Boston Bancorp (The) (36.27) (23.33) 3.59 NA 41.750 42.250 36.250 40.29 40.29
SCBS Southern Community Bancshares (11.34) 0.97 (11.58) 17.34 13.563 14.000 13.000 13.54 13.54
SCCB S. Carolina Community Bancshrs 4.29 3.05 6.45 13.38 19.000 20.500 15.000 17.11 17.11
SECP Security Capital Corporation (1.20) 3.71 5.36 876.58 86.000 88.000 70.000 59.17 59.17
SFED SFS Bancorp Inc. 9.59 0.35 10.69 22.56 16.250 18.000 14.750 17.26 17.26
SFFC StateFed Financial Corporation 11.95 (2.25) 20.29 14.89 18.500 19.000 16.500 19.00 19.00
SFIN Statewide Financial Corp. 26.00 2.67 1.42 89.16 14.750 17.500 14.125 13.21 13.18
SFNB Security First Network Bank (107.40) (308.28) (145.86) 68.52 8.000 13.500 8.000 3.79 3.73
SFSB SuburbFed Financial Corp. 3.67 12.86 21.18 33.89 22.500 23.750 19.000 21.23 21.14
SFSL Security First Corp. 6.71 12.32 (0.86) 110.07 18.875 19.250 17.500 11.88 11.67
SGVB SGV Bancorp Inc. 32.40 4.88 53.93 33.38 12.750 13.875 11.125 12.41 12.19
SHEN First Shenango Bancorp Inc. (4.80) (2.92) 2.52 56.73 22.250 25.750 22.000 20.79 20.79
SISB SIS Bancorp Inc. 16.35 4.18 15.41 156.22 24.000 27.375 22.375 18.23 18.23
SKAN Skaneateles Bancorp Inc. (1.25) 1.12 0.72 20.59 19.125 20.000 16.000 17.41 16.84
SKBO First Carnegie Deposit (MHC) NA NA NA 32.49 NA NA NA NA NA
SMBC Southern Missouri Bancorp Inc. 15.12 12.75 18.77 28.25 16.250 17.250 14.250 15.85 15.85
SMFC Sho-Me Financial Corp. 8.72 15.20 20.62 56.21 29.500 30.250 21.750 20.99 20.99
SOBI Sobieski Bancorp Inc. 0.52 16.92 0.07 11.39 14.750 15.000 13.750 17.52 17.52
SOPN First Savings Bancorp Inc. 7.87 5.41 11.46 81.79 19.625 20.250 17.875 18.04 18.04
SOSA Somerset Savings Bank 3.72 (0.26) 3.78 45.79 2.750 2.880 1.984 1.85 1.85
SPBC St. Paul Bancorp Inc. 11.72 19.33 6.97 750.09 27.375 28.750 22.800 17.16 17.11
SRN Southern Banc Company Inc. (1.01) NA (2.00) 19.22 14.375 14.625 13.125 14.42 14.27
SSB Scotland Bancorp Inc 5.04 10.83 6.78 29.21 15.500 16.750 14.250 13.74 13.74
SSFC South Street Financial Corp. 17.97 (0.88) 0.89 76.44 16.125 17.000 13.750 14.64 14.64
SSM Stone Street Bancorp Inc. (1.19) 7.55 (1.72) 38.55 24.750 27.250 20.000 20.72 20.72
STFR St. Francis Capital Corp. 48.15 37.00 55.55 193.90 29.500 32.250 26.000 23.89 21.02
STND Standard Financial Inc. 13.91 7.19 13.61 403.08 22.875 23.625 19.375 16.74 16.72
STSA Sterling Financial Corp. 5.43 14.39 14.77 105.32 17.125 17.375 13.625 10.98 9.31
SVRN Sovereign Bancorp Inc. 36.19 26.10 54.16 1,112.98 12.000 14.000 10.938 6.60 4.84
SWBI Southwest Bancshares (11.31) 7.51 (3.34) 54.10 19.250 20.500 18.000 15.19 15.19
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicl MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank 9.20 18.89 (3.52) 60.04 28.000 34.000 28.000 20.55 19.59
SZB SouthFirst Bancshares Inc. (0.86) 4.35 (5.43) 13.87 14.250 14.500 12.875 15.82 15.82
TBK Tolland Bank 8.66 (0.92) 6.08 22.28 14.250 16.125 11.625 13.63 13.21
THR Three Rivers Financial Corp. 8.49 7.37 (2.48) 13.18 14.375 15.250 13.750 15.23 15.17
THRD TF Financial Corporation (2.15) 10.92 (6.97) 82.77 17.750 19.250 16.250 18.51 16.13
TPNZ Tappan Zee Financial Inc. 17.53 (6.57) 19.93 25.60 14.250 15.250 13.625 13.84 13.84
TRIC Tri-County Bancorp Inc. 0.41 0.77 3.11 14.61 18.500 18.750 18.000 21.63 21.63
TSBS Peoples Bancorp Inc. (MHC) 16.86 0.39 (5.22) 189.78 18.500 18.500 15.750 11.54 10.55
TSH Teche Holding Co. 4.78 4.34 12.46 60.16 16.375 16.375 14.375 15.23 15.23
TWIN Twin City Bancorp (2.11) (6.86) (0.97) 17.39 19.000 19.000 17.500 15.82 15.82
UBMT United Financial Corp. 14.97 4.96 (8.47) 28.14 19.500 19.750 18.750 19.94 19.94
UFRM United Federal Savings Bank 14.39 17.64 9.82 37.56 9.625 9.625 8.000 6.70 6.70
USAB USABancshares, Inc. 12.12 34.37 42.67 6.12 NA NA NA 8.31 8.10
VABF Virginia Beach Fed. Financial 0.81 7.66 (11.31) 73.34 10.375 11.313 9.375 8.29 8.29
VFFC Virginia First Financial Corp. 4.34 6.36 10.44 132.85 14.750 16.250 12.375 11.35 10.96
WAMU Washington Mutual Inc. 13.46 24.81 3.63 7,541.97 48.313 58.875 42.750 19.53 18.42
WAYN Wayne Savings & Loan Co. (MHC) 3.39 0.09 4.29 39.34 17.333 18.167 15.833 10.28 10.28
WBST Webster Financial Corporation 170.11 138.84 123.82 551.15 35.125 41.000 35.125 23.72 19.96
WCBI Westco Bancorp (1.38) 5.23 (1.35) 66.41 22.000 23.000 20.000 18.89 18.89
WCFB Webster City Federal SB (MHC) (2.77) (5.91) (7.07) 33.86 14.250 14.625 12.750 10.45 10.45
WEFC Wells Financial Corp. 1.11 1.85 (1.13) 29.54 15.000 16.000 12.875 14.20 14.20
WEHO Westwood Homestead Fin. Corp. 33.36 47.02 (0.02) 41.23 13.625 14.500 12.000 14.15 14.15
WES Westcorp 8.48 21.99 7.48 486.15 14.500 22.875 14.500 12.29 12.26
WFCO Winton Financial Corp. 20.41 23.56 14.67 26.07 12.516 14.000 11.750 11.06 10.81
WFSG Wilshire Financial Services 182.66 331.67 (30.80) 138.15 14.500 18.000 14.500 8.48 8.48
WFSL Washington Federal Inc. (1.98) 2.68 5.26 1,237.00 25.688 27.688 22.500 14.66 13.39
WHGB WHG Bancshares Corp. 10.83 0.87 (0.07) 21.93 14.250 14.625 13.125 14.00 14.00
WOFC Western Ohio Financial Corp. 7.43 12.60 8.97 49.87 21.500 22.500 21.000 23.21 21.88
WRNB Warren Bancorp Inc. 2.58 (2.71) 2.39 64.63 16.250 16.250 14.750 9.88 9.88
WSB Washington Savings Bank, FSB 2.65 3.38 1.95 26.55 4.938 5.625 4.875 5.05 5.05
WSFS WSFS Financial Corporation 35.50 13.10 6.97 175.41 11.500 12.130 10.500 6.05 5.99
WSTR WesterFed Financial Corp. 261.75 253.22 338.02 125.60 20.125 21.750 17.875 18.44 14.57
WVFC WVS Financial Corporation 5.76 2.66 0.12 45.54 25.750 26.500 24.000 20.50 20.50
WWFC Westwood Financial Corporation 10.98 1.93 12.20 13.87 20.000 20.000 15.750 15.42 13.67
WYNE Wayne Bancorp Inc. 2.22 20.99 4.37 42.59 16.250 18.000 14.875 16.57 16.57
YFCB Yonkers Financial Corporation 34.00 14.93 7.34 49.29 15.250 15.250 12.750 13.68 13.68
YFED York Financial Corp. (0.92) (6.39) 14.77 141.17 18.375 19.750 16.000 13.99 13.99
---------------------------- ---------------------------------------------------------------
Average 12.79 13.65 12.52 179.79 19.54 20.98 17.33 15.67 15.18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Growth as of
The Most Recent Quarter Market Data as of The Most Recent Quarter
---------------------------- ---------------------------------------------------------------
Asset Loan Deposit MRQ MRQ MRQ MRQ MRQ Publicly MRQ Tangible
Growth Growth Growth Market Price Price Price Reported Publicly Rep
Rate Rate Rate Value Per Share High Low Book Value Book Value
Ticker Short Name (%) (%) (%) ($) ($) ($) ($) ($) ($)
- ------------------------------------- ---------------------------- ---------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. 3.78 5.69 19.73 33.11 13.750 14.750 12.750 10.89 10.89
FBCV 1ST Bancorp 17.39 (1.48) 34.88 21.80 31.000 32.000 28.500 31.19 30.50
HBFW Home Bancorp 3.22 6.58 2.47 55.74 20.375 20.875 19.000 17.43 17.43
HMCI HomeCorp Inc. 0.74 0.96 (1.50) 24.76 14.167 15.167 12.667 12.52 12.52
KNK Kankakee Bancorp Inc. (9.43) (8.16) 1.35 42.07 27.250 27.875 23.375 25.74 24.10
MBLF MBLA Financial Corp. 1.69 14.13 27.48 30.93 20.625 20.750 19.000 21.51 21.51
MFBC MFB Corp. 18.48 20.53 4.32 33.17 19.750 19.750 16.625 19.59 19.59
PFDC Peoples Bancorp 4.14 1.71 4.18 51.28 22.500 23.000 19.500 18.86 18.86
WEFC Wells Financial Corp. 1.11 1.85 (1.13) 29.54 15.000 16.000 12.875 14.20 14.20
WCBI Westco Bancorp (1.38) 5.23 (1.35) 66.41 22.000 23.000 20.000 18.89 18.89
---------------------------- ---------------------------------------------------------------
Average 3.97 4.70 9.04 38.88 20.64 21.32 18.43 19.08 18.85
Maximum 18.48 20.53 34.88 66.41 31.00 32.00 28.50 31.19 30.50
Minimum (9.43) (8.16) (1.50) 21.80 13.75 14.75 12.67 10.89 10.89
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB NA NA NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB NA NA NA NA NA NA NA NA
AABC Access Anytime Bancorp, Inc. 0.000 0.00 NM 6.57 12.76 NM 96.61 96.61
AADV Advantage Bancorp Inc. 1.013 33.66 16.32 12.50 13.53 39.11 141.42 152.69
ABBK Abington Bancorp Inc. 1.481 21.16 16.36 10.39 12.98 14.29 151.18 168.86
ABCL Alliance Bancorp Inc. 2.158 10.00 17.51 12.24 23.54 30.13 131.38 133.12
ABCW Anchor BanCorp Wisconsin 1.131 16.84 13.52 12.03 12.76 17.55 192.38 196.27
AFBC Advance Financial Bancorp 2.133 NA NA 15.71 NA NA 101.69 101.69
AFCB Affiliated Community Bancorp 2.021 30.00 14.39 14.53 13.19 16.49 146.33 147.24
AFED AFSALA Bancorp Inc. 1.024 NA NA 14.93 18.60 NA 99.78 100.03
AFFFZ America First Financial Fund 4.070 35.32 7.36 10.82 11.30 8.68 138.28 140.25
AHCI Ambanc Holding Co. Inc. 0.000 0.00 NM 14.93 25.39 NM 117.33 117.33
AHM Ahmanson & Company (H.F.) 1.903 49.72 15.07 9.47 11.45 26.13 227.27 266.72
ALBC Albion Banc Corp. 1.378 140.91 23.94 8.48 12.50 102.27 95.26 95.26
ALBK ALBANK Financial Corporation 1.556 27.41 15.68 14.14 14.39 19.58 153.64 177.14
AMFB American Federal Bank FSB 1.386 40.91 21.11 29.23 20.61 26.23 325.42 349.04
AMFC AMB Financial Corp. 1.627 NA NA 16.82 15.36 NA 103.22 103.22
ANA Acadiana Bancshares Inc. 1.756 NA NA 21.40 16.53 NA 122.75 122.75
ANBK American National Bancorp 0.615 23.68 22.41 13.94 17.41 51.32 149.08 149.08
ANDB Andover Bancorp Inc. 2.248 21.74 11.68 12.87 12.20 11.96 159.55 159.55
ASBI Ameriana Bancorp 3.636 80.56 16.18 13.37 15.28 22.92 123.32 123.41
ASBP ASB Financial Corp. 3.333 NM 20.34 18.88 21.43 29.27 112.99 112.99
ASFC Astoria Financial Corporation 1.297 25.29 17.26 12.78 16.06 26.58 168.12 202.05
ATSB AmTrust Capital Corp. 1.592 11.36 46.53 9.31 20.94 28.55 91.57 92.58
AVND Avondale Financial Corp. 0.000 0.00 NM 7.77 NM NM 94.09 94.09
BANC BankAtlantic Bancorp Inc. 0.803 12.03 18.59 9.70 12.95 15.10 176.18 216.42
BDJI First Federal Bancorporation 0.000 0.00 19.54 13.09 22.87 38.70 117.14 117.14
BFD BostonFed Bancorp Inc. 1.469 31.25 21.91 12.08 14.44 29.79 126.92 131.47
BFFC Big Foot Financial Corp. 0.000 NA NA 19.24 25.39 NA 113.24 113.24
BFSB Bedford Bancshares Inc. 2.333 38.02 15.38 20.85 15.79 19.83 137.69 137.69
BKC American Bank of Connecticut 3.765 51.18 14.88 14.96 11.95 12.88 187.59 196.25
BKCO Bankers Corp. 2.179 32.16 13.79 14.31 13.11 14.76 183.82 186.86
BKCT Bancorp Connecticut Inc. 3.520 42.08 14.20 15.47 12.02 13.59 148.72 148.72
BKUNA BankUnited Financial Corp. 0.000 0.00 19.10 6.16 21.09 44.02 138.13 171.90
BNKU Bank United Corp. 1.488 NA NA 10.80 13.44 NA 208.91 213.66
BPLS Bank Plus Corp. 0.000 0.00 NM 6.30 12.36 NM 128.10 128.39
BSBC Branford Savings Bank 1.706 13.79 16.17 17.33 14.65 16.17 181.71 181.71
BTHL Bethel Bancorp 2.560 20.83 16.89 6.89 16.45 13.02 91.17 108.60
BVCC Bay View Capital Corp. 1.219 34.44 17.74 11.18 16.83 29.17 177.13 186.30
BWFC Bank West Financial Corp. 2.036 48.28 26.96 16.68 21.48 23.71 108.95 108.95
BYFC Broadway Financial Corp. 1.860 NM 51.19 8.08 38.39 NM 75.33 75.33
CAFI Camco Financial Corp. 2.790 42.97 13.35 12.08 11.99 17.07 124.56 135.39
CAPS Capital Savings Bancorp Inc. 1.371 27.63 15.77 13.92 15.09 23.03 160.70 160.70
CASB Cascade Financial Corp. 0.000 0.00 20.00 10.20 19.44 26.42 165.29 165.29
CASH First Midwest Financial Inc. 2.118 34.02 12.14 12.98 14.66 17.71 111.99 126.58
CATB Catskill Financial Corp. 1.792 NA NA 28.67 19.53 NA 106.29 106.29
CBCI Calumet Bancorp Inc. 0.000 0.00 14.49 17.31 13.28 17.55 108.57 108.57
CBCO CB Bancorp Inc. 0.000 0.00 16.39 17.52 14.27 18.51 190.91 190.91
CBES CBES Bancorp Inc. 2.238 NA NA 19.24 16.55 NA 104.65 104.65
CBK Citizens First Financial Corp. 0.000 NA NA 16.23 28.13 NA 98.99 98.99
CBNH Community Bankshares Inc. 1.631 30.10 23.50 16.66 18.51 19.05 233.63 233.63
CBSA Coastal Bancorp Inc. 1.580 27.40 13.26 5.29 11.87 20.80 156.98 185.89
CBSB Charter Financial Inc. 1.803 32.10 17.23 18.97 17.07 21.91 134.27 153.02
CCFH CCF Holding Company 3.308 318.18 50.38 16.54 103.91 75.57 115.61 115.61
CEBK Central Co-operative Bank 1.610 10.96 13.43 12.17 12.42 13.61 116.43 130.76
CENB Century Bancorp Inc. 2.807 NA NA 29.04 15.22 NA 97.00 97.00
CENF CENFED Financial Corp. 1.063 17.57 12.73 8.62 14.11 18.61 168.95 169.29
CFB Commercial Federal Corporation 0.723 14.17 14.14 12.08 13.09 20.08 204.05 229.29
CFBC Community First Banking Co. 0.000 NA NA NA NA NA NA NA
CFCP Coastal Financial Corp. 1.492 38.37 26.22 23.08 20.80 28.05 378.73 378.73
CFFC Community Financial Corp. 2.462 38.97 13.38 17.30 14.58 16.73 124.32 124.32
CFNC Carolina Fincorp Inc. 1.311 NA NA 25.98 21.18 NA 109.63 109.63
CFSB CFSB Bancorp Inc. 2.376 41.25 17.41 15.64 14.68 22.95 204.95 204.95
CFTP Community Federal Bancorp 1.690 45.45 22.47 36.89 22.19 26.89 110.04 110.04
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFX CFX Corporation 4.632 57.32 14.07 14.21 13.19 17.27 185.37 198.95
CIBI Community Investors Bancorp 1.995 33.85 13.51 13.03 12.38 19.96 113.16 113.16
CKFB CKF Bancorp Inc. 2.597 165.52 22.38 29.65 22.92 22.13 116.03 116.03
CLAS Classic Bancshares Inc. 2.000 27.66 21.21 14.05 NM 29.79 95.43 113.09
CMRN Cameron Financial Corp 1.600 35.00 17.50 23.74 19.02 21.88 103.43 103.43
CMSB Commonwealth Bancorp Inc. 1.723 NA NA 12.43 14.51 NA 130.00 169.27
CMSV Community Savings (MHC) 4.045 100.61 17.80 16.05 20.60 27.13 142.90 142.90
CNIT CENIT Bancorp Inc. 2.041 44.12 17.38 11.37 19.76 24.02 160.24 175.19
CNSB CNS Bancorp Inc. 1.231 NA NA 27.38 27.08 NA 110.32 110.32
CNY Carver Bancorp Inc. 1.667 0.00 NM 6.56 NM NM 81.30 84.93
COFD Collective Bancorp Inc. 2.151 39.68 15.40 17.39 14.72 18.45 238.71 261.82
COFI Charter One Financial 1.871 32.11 14.93 17.64 14.37 19.09 260.29 279.78
CONE Conestoga Bancorp, Inc. NA 28.17 NA NA NA NA NA NA
COOP Cooperative Bankshares Inc. 0.000 0.00 122.50 10.49 16.55 NM 140.08 140.08
CRZY Crazy Woman Creek Bancorp 2.909 67.31 21.15 26.55 20.22 26.44 95.35 95.35
CSA Coast Savings Financial 0.000 0.00 20.57 9.70 18.20 68.47 195.63 198.34
CSBF CSB Financial Group Inc. 0.000 0.00 37.50 23.55 50.00 54.55 93.90 99.59
CTZN CitFed Bancorp Inc. 0.785 15.29 16.63 11.95 14.76 23.97 188.74 211.91
CVAL Chester Valley Bancorp Inc. 2.133 39.07 16.24 13.88 14.73 23.98 162.15 162.15
CZF CitiSave Financial Corp 1.988 587.50 33.54 25.84 26.48 50.31 155.41 155.41
DCBI Delphos Citizens Bancorp Inc. 0.000 NA NA 28.80 14.00 NA 101.58 101.58
DIBK Dime Financial Corp. 1.531 12.36 10.01 16.47 9.20 10.09 210.52 218.44
DIME Dime Community Bancorp Inc. 0.935 NA NA 20.42 18.51 NA 132.48 154.37
DME Dime Bancorp Inc. 0.000 0.00 13.12 9.87 13.96 16.81 172.96 174.53
DNFC D & N Financial Corp. 0.000 0.00 12.42 10.34 12.50 18.10 179.92 181.99
DSL Downey Financial Corp. 1.391 36.72 16.31 11.21 12.50 27.71 153.54 155.83
EBSI Eagle Bancshares 3.288 67.44 15.87 12.47 16.90 21.22 143.25 143.25
EFBC Empire Federal Bancorp Inc. 2.087 NA NA 34.52 NA NA 93.65 93.65
EFBI Enterprise Federal Bancorp 5.263 147.06 19.79 14.88 15.32 22.35 120.71 120.87
EGFC Eagle Financial Corp. 2.921 51.69 13.35 9.49 13.13 17.70 137.49 182.61
EGLB Eagle BancGroup Inc. 0.000 NA NA 11.89 40.00 NA 98.28 98.28
EIRE Emerald Isle Bancorp Inc. 1.436 17.62 12.91 10.58 12.83 13.64 151.99 151.99
EMLD Emerald Financial Corp. 1.778 39.47 14.06 11.61 11.64 17.76 154.64 157.34
EQSB Equitable Federal Savings Bank 0.000 0.00 11.71 7.93 9.65 18.75 156.56 156.56
ESBK Elmira Savings Bank (The) 3.282 71.91 22.67 6.19 20.31 21.91 96.53 100.83
ESX Essex Bancorp Inc. 0.000 0.00 NM 0.81 NM NM NM NM
ETFS East Texas Financial Services 1.111 51.28 25.71 17.39 23.68 46.15 91.42 91.42
FAB FirstFed America Bancorp Inc. 0.000 NA NA 15.77 NA NA 126.51 126.51
FBBC First Bell Bancorp Inc. 2.443 331.68 13.88 15.71 14.62 16.21 154.05 154.05
FBCI Fidelity Bancorp Inc. 1.652 29.89 15.88 11.13 13.45 22.27 109.22 109.53
FBCV 1ST Bancorp 1.280 42.37 208.33 7.98 10.02 34.34 100.19 102.46
FBER 1st Bergen Bancorp 0.780 NA NA 18.38 21.35 NA 111.74 111.74
FBHC Fort Bend Holding Corp. 0.949 30.77 18.21 8.22 11.90 32.42 131.64 142.03
FBNW FirstBank Corp. 0.000 NA NA NA NA NA NA NA
FBSI First Bancshares Inc. 0.920 16.95 14.80 15.77 13.94 18.43 109.85 110.02
FCB Falmouth Co-Operative Bank 1.212 19.23 32.35 26.59 34.38 31.73 108.77 108.77
FCBF FCB Financial Corp. 2.642 71.29 22.90 24.76 22.71 26.98 141.56 141.56
FCIT First Citizens Financial Corp. 0.000 0.00 19.86 13.74 18.39 29.70 224.98 224.98
FCME First Coastal Corporation 0.000 0.00 2.04 8.65 12.66 1.85 97.32 97.32
FDEF First Defiance Financial 2.133 69.77 26.79 25.88 22.06 34.88 120.87 120.87
FED FirstFed Financial Corp. 0.000 0.00 17.26 8.17 16.63 34.34 172.82 175.10
FESX First Essex Bancorp Inc. 2.704 32.65 13.76 11.58 15.85 12.07 158.48 183.94
FFBA First Colorado Bancorp Inc. 2.301 44.30 17.87 20.97 16.49 24.21 164.87 167.18
FFBH First Federal Bancshares of AR 0.958 NA NA 19.66 15.81 NA 124.33 124.33
FFBI First Financial Bancorp Inc. 0.000 0.00 19.33 8.36 12.67 NM 107.14 107.14
FFBS FFBS BanCorp Inc. 1.923 51.55 21.14 31.47 19.12 26.80 152.85 152.85
FFBZ First Federal Bancorp Inc. 1.412 29.11 15.89 13.94 17.00 21.52 202.86 203.11
FFCH First Financial Holdings Inc. 2.233 50.75 16.04 12.74 14.40 24.07 207.13 207.13
FFDB FirstFed Bancorp Inc. 2.817 59.26 13.98 12.27 12.68 21.91 121.99 133.06
FFDF FFD Financial Corp. 2.051 NA NA 24.94 26.12 NA 100.79 100.79
FFED Fidelity Federal Bancorp 4.571 466.67 32.41 8.71 10.94 58.33 169.25 169.25
FFES First Federal of East Hartford 2.051 39.22 11.99 7.95 15.90 19.12 127.17 127.17
FFFC FFVA Financial Corp. 1.809 36.21 18.82 21.81 16.58 22.87 156.16 159.73
FFFD North Central Bancshares Inc. 1.563 26.88 14.95 26.96 14.81 17.20 109.66 109.66
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFFG F.F.O. Financial Group Inc. 0.000 0.00 13.97 12.51 16.96 19.00 193.09 193.09
FFFL Fidelity Bankshares Inc. (MHC) 4.000 153.06 25.32 14.60 27.78 40.82 165.56 166.94
FFHC First Financial Corp. 2.025 39.13 15.67 18.57 14.52 21.47 265.93 274.05
FFHH FSF Financial Corp. 2.778 68.49 19.57 15.17 18.00 24.66 113.42 113.42
FFHS First Franklin Corporation 1.600 123.08 18.02 10.42 17.24 76.92 118.13 118.98
FFIC Flushing Financial Corp. 1.171 13.79 24.70 20.44 20.50 23.56 127.65 127.65
FFKY First Federal Financial Corp. 2.419 45.79 16.80 24.05 14.53 20.09 176.81 188.27
FFLC FFLC Bancorp Inc. 1.761 44.68 19.89 17.80 17.03 28.99 122.97 122.97
FFOH Fidelity Financial of Ohio 1.867 48.89 20.00 16.35 17.05 33.33 124.69 141.91
FFPB First Palm Beach Bancorp Inc. 1.860 NM 215.00 10.37 17.53 NM 153.28 157.32
FFSL First Independence Corp. 2.151 44.27 15.71 10.70 18.16 24.22 101.88 101.88
FFSX First Fed SB of Siouxland(MHC) 2.021 68.39 19.96 14.51 19.15 35.45 178.30 179.92
FFWC FFW Corp. 2.571 30.77 11.72 12.32 11.11 14.36 123.08 123.08
FFWD Wood Bancorp Inc. 1.739 31.31 18.11 21.00 15.13 23.23 165.35 165.35
FFYF FFY Financial Corp. 2.673 56.52 16.47 18.93 13.93 22.77 134.30 134.30
FGHC First Georgia Holding Inc. 0.688 18.38 21.53 16.08 14.90 26.72 189.95 208.33
FIBC Financial Bancorp Inc. 2.105 40.63 13.01 12.34 13.57 23.75 126.75 127.43
FISB First Indiana Corporation 2.133 37.07 NA 15.96 14.80 18.29 166.54 168.67
FKFS First Keystone Financial 0.856 7.52 11.93 9.12 10.08 17.58 129.00 129.00
FKKY Frankfort First Bancorp Inc. 3.892 NM 25.00 24.40 23.13 35.58 93.15 93.15
FLAG FLAG Financial Corp. 2.325 NM 97.50 13.41 12.19 NM 142.68 142.68
FLFC First Liberty Financial Corp. 1.798 29.87 15.45 13.77 12.64 17.80 187.45 209.51
FLGS Flagstar Bancorp Inc. 0.000 NA NA NA NM NA NA NA
FLKY First Lancaster Bancshares 3.279 NA NA 36.15 23.83 NA 105.61 105.61
FMBD First Mutual Bancorp Inc. 2.065 238.46 50.00 13.66 193.75 119.23 93.37 121.38
FMCO FMS Financial Corporation 0.816 14.71 11.89 10.56 11.14 18.01 167.92 171.45
FMSB First Mutual Savings Bank 1.096 12.73 13.32 11.55 12.01 12.76 172.99 172.99
FNGB First Northern Capital Corp. 2.844 78.21 19.23 16.09 18.15 28.85 139.84 139.84
FOBC Fed One Bancorp 2.729 61.29 15.63 14.99 16.10 22.85 124.49 130.69
FPRY First Financial Bancorp NA 39.66 NA NA NA NA NA NA
FRC First Republic Bancorp 0.000 0.00 18.26 10.70 15.38 16.23 144.38 144.47
FSBI Fidelity Bancorp Inc. 1.800 27.93 12.05 9.40 12.50 19.05 134.95 134.95
FSFC First Southeast Financial Corp 1.699 NM 19.89 18.52 16.82 NM 181.09 181.09
FSLA First Savings Bank (MHC) 1.761 54.81 22.71 19.27 20.04 40.07 209.62 236.55
FSNJ First Savings Bk of NJ (MHC) 1.681 NM 66.11 15.76 33.81 NM 183.87 183.87
FSPG First Home Bancorp Inc. 2.038 23.46 11.03 10.46 10.44 12.11 158.78 161.66
FSPT FirstSpartan Financial Corp. 0.000 NM NA NA NA NM NA NA
FSSB First FS&LA of San Bernardino 0.000 0.00 NM 3.05 NM NM 70.36 73.03
FSTC First Citizens Corp. 1.630 27.85 17.20 15.13 48.21 17.09 165.75 220.95
FTF Texarkana First Financial Corp 2.715 261.36 12.73 22.49 12.28 15.63 140.31 140.31
FTFC First Federal Capital Corp. 2.021 39.89 16.05 14.18 15.63 22.20 223.00 237.98
FTNB Fulton Bancorp Inc. 0.988 NA NA 35.00 36.16 NA 139.94 139.94
FTSB Fort Thomas Financial Corp. 2.381 NM 22.34 16.58 17.50 36.21 103.04 103.04
FWWB First SB of Washington Bancorp 1.266 23.16 20.87 23.10 17.84 23.29 145.08 157.70
GAF GA Financial Inc. 2.192 26.25 20.74 22.89 19.01 22.81 122.16 123.48
GBCI Glacier Bancorp Inc. 2.648 39.16 14.86 22.31 15.63 16.63 233.27 240.07
GDVS Greater Delaware Valley (MHC) 2.182 NM 68.75 22.62 24.26 NM 197.13 197.13
GDW Golden West Financial 0.608 6.37 9.27 10.74 12.47 11.23 171.40 171.40
GFCO Glenway Financial Corp. 2.566 70.62 15.77 10.79 13.80 28.19 114.92 116.74
GFED Guaranty Federal SB (MHC) 2.254 113.33 36.22 28.30 31.70 59.17 204.49 204.49
GFSB GFS Bancorp Inc. 1.874 23.81 13.34 15.55 12.39 16.52 134.32 134.32
GLBK Glendale Co-Operative Bank 0.000 0.00 25.23 18.08 24.11 24.55 110.38 110.38
GLN Glendale Federal Bank FSB 0.000 0.00 20.86 9.07 21.02 81.62 181.25 194.87
GOSB GSB Financial Corporation 0.000 NA NA NA NM NA NA NA
GPT GreenPoint Financial Corp. 1.566 25.22 21.08 22.58 16.99 18.95 184.77 322.44
GRTR Greater New York Savings Bank 0.914 12.35 31.25 11.64 27.34 27.01 190.55 190.55
GSBC Great Southern Bancorp Inc. 2.443 36.90 13.76 19.98 11.70 15.60 222.79 222.79
GSFC Green Street Financial Corp. 2.496 NA NA 43.44 25.92 NA 120.39 120.39
GSLA GS Financial Corp. 0.000 NA NA NA NA NA NA NA
GTFN Great Financial Corporation 1.765 33.10 23.94 15.94 16.04 23.45 171.46 179.23
GTPS Great American Bancorp 2.424 250.00 43.42 21.06 41.25 103.13 89.87 89.87
GUPB GFSB Bancorp Inc. 2.105 111.94 22.62 18.35 22.62 28.36 112.56 112.56
GWBC Gateway Bancorp Inc. 2.254 76.92 NA 29.02 23.36 34.13 111.22 111.22
HALL Hallmark Capital Corp. 0.000 0.00 13.68 7.67 11.82 17.98 109.74 109.74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HARB Harbor Florida Bancorp Inc. 3.111 64.77 17.72 20.21 17.05 23.32 245.90 255.54
HARL Harleysville Savings Bank 1.720 27.19 12.77 11.54 11.63 18.16 181.36 181.36
HARS Harris Savings Bank (MHC) 2.651 156.76 23.78 12.63 13.02 59.12 159.56 184.91
HAVN Haven Bancorp Inc. 1.622 27.15 11.21 9.27 12.50 16.74 159.97 160.59
HBBI Home Building Bancorp 1.364 96.77 29.33 14.65 16.18 70.97 110.66 110.66
HBEI Home Bancorp of Elgin Inc. 2.133 NA NA 36.64 33.48 NA 130.30 130.30
HBFW Home Bancorp 0.941 28.17 18.97 17.01 16.10 29.93 121.92 121.92
HBNK Highland Federal Bank FSB 0.000 0.00 25.00 11.88 11.36 43.86 159.24 159.24
HBS Haywood Bancshares Inc. 3.200 63.53 14.46 14.97 17.50 20.59 105.93 109.99
HCBB HCB Bancshares Inc. 0.000 NA NA NA NA NA NA NA
HCFC Home City Financial Corp. 2.188 NA NA 20.41 18.28 NA 91.12 91.12
HEMT HF Bancorp Inc. 0.000 0.00 52.72 9.08 59.31 NM 110.60 135.18
HFFB Harrodsburg First Fin Bancorp 2.581 94.83 20.95 29.01 20.39 26.72 101.51 101.51
HFFC HF Financial Corp. 1.674 32.94 14.73 11.48 12.80 20.09 130.22 130.54
HFGI Harrington Financial Group 0.941 0.00 17.00 8.06 12.26 25.00 168.43 168.43
HFNC HFNC Financial Corp. 1.882 961.11 20.66 30.34 30.99 27.55 161.16 161.16
HFSA Hardin Bancorp Inc. 3.148 78.43 18.37 12.68 17.33 29.90 99.22 99.22
HHFC Harvest Home Financial Corp. 3.333 NM 24.00 13.50 16.67 52.17 108.01 108.01
HIFS Hingham Instit. for Savings 2.182 27.17 12.72 13.92 11.22 12.72 145.79 145.79
HMCI HomeCorp Inc. 0.000 0.00 20.60 7.36 17.41 73.13 116.81 116.81
HMLK Hemlock Federal Financial Corp 0.000 NA NA NA NA NA NA NA
HMNF HMN Financial Inc. 0.000 0.00 19.23 17.13 14.80 22.50 120.26 120.26
HOMF Home Federal Bancorp 1.770 19.40 12.96 14.43 11.58 14.95 170.80 176.56
HPBC Home Port Bancorp Inc. 3.951 44.38 12.05 19.71 12.05 11.98 182.27 182.27
HRBF Harbor Federal Bancorp Inc. 2.025 74.07 23.24 15.79 20.57 36.57 122.75 122.75
HRZB Horizon Financial Corp. 2.452 62.71 15.99 23.42 14.57 15.69 153.75 153.75
HTHR Hawthorne Financial Corp. 0.000 0.00 34.12 3.96 18.57 40.73 102.06 102.06
HVFD Haverfield Corporation 2.154 61.93 16.05 14.51 15.12 29.55 172.87 172.87
HWEN Home Financial Bancorp 1.333 NA NA 18.48 22.06 NA 99.21 99.21
HZFS Horizon Financial Svcs Corp. 1.684 41.56 17.92 10.32 13.19 24.68 98.29 98.29
IBSF IBS Financial Corp. 1.730 131.71 30.83 27.53 35.58 52.86 161.57 161.57
IFSB Independence Federal Savings 2.214 0.00 15.29 4.84 10.80 34.27 74.22 84.65
IFSL Indiana Federal Corporation 2.504 66.06 18.55 16.80 15.29 26.38 191.28 203.61
INBI Industrial Bancorp 3.475 61.11 17.48 22.38 14.39 30.70 121.06 121.06
INCB Indiana Community Bank SB 2.400 NM 31.25 15.14 25.00 100.00 122.25 122.25
IPSW Ipswich Savings Bank 1.412 13.70 14.78 12.20 11.18 11.64 197.90 197.90
ISBF ISB Financial Corporation 1.667 42.68 21.62 17.90 20.69 29.27 137.54 162.16
ITLA ITLA Capital Corp. 0.000 0.00 12.50 16.42 11.81 12.50 144.44 145.05
IWBK InterWest Bancorp Inc. 1.529 30.51 17.07 17.77 16.09 22.18 265.02 271.25
JOAC Joachim Bancorp Inc. 3.448 200.00 37.18 30.92 51.79 58.00 106.70 106.70
JSBA Jefferson Savings Bancorp 1.356 43.04 14.97 11.31 12.50 37.34 127.05 166.76
JSBF JSB Financial Inc. 3.182 47.89 17.81 28.25 17.46 16.86 127.46 127.46
JXSB Jacksonville Savings Bk (MHC) 2.353 125.00 26.15 13.20 21.25 53.13 128.21 128.21
JXVL Jacksonville Bancorp Inc. 3.306 NA NA 17.82 13.50 NA 113.98 113.98
KFBI Klamath First Bancorp 1.524 48.28 23.16 28.68 18.23 33.94 127.93 127.93
KNK Kankakee Bancorp Inc. 1.620 29.37 15.76 12.29 14.52 20.72 115.09 122.93
KSAV KS Bancorp Inc. 2.353 92.78 12.92 16.79 14.06 19.72 121.43 121.51
KSBK KSB Bancorp Inc. 0.533 6.08 12.10 13.27 13.55 13.68 185.11 196.76
KYF Kentucky First Bancorp Inc. 4.040 648.15 17.93 18.36 15.47 22.92 113.95 113.95
LARK Landmark Bancshares Inc. 1.975 41.67 16.60 16.36 15.82 21.09 111.82 111.82
LARL Laurel Capital Group Inc. 2.071 28.47 11.81 15.26 11.55 14.76 146.45 146.45
LFBI Little Falls Bancorp Inc. 0.774 37.50 29.25 14.02 22.79 55.36 108.47 117.87
LFCO Life Financial Corp. 0.000 NA NA 11.54 2.02 NA 157.99 157.99
LFED Leeds Federal Savings Bk (MHC) 3.897 107.81 21.91 23.90 19.50 30.47 147.62 147.62
LIFB Life Bancorp Inc. 1.882 44.00 20.08 17.83 17.71 25.50 165.37 170.57
LISB Long Island Bancorp Inc. 1.684 35.71 21.46 14.84 17.46 25.45 164.78 166.39
LOGN Logansport Financial Corp. 2.883 485.71 15.42 21.98 15.77 19.82 111.80 111.80
LONF London Financial Corporation 1.627 NA NA 20.03 21.69 NA 100.82 100.82
LSBI LSB Financial Corp. 1.600 29.88 23.28 10.18 12.35 19.85 104.27 104.27
LSBX Lawrence Savings Bank 0.000 0.00 9.96 15.87 10.99 9.96 180.59 180.59
LVSB Lakeview Financial 0.758 9.51 18.86 15.78 15.28 13.15 165.75 207.29
LXMO Lexington B&L Financial Corp. 1.860 NA NA 29.36 31.01 NA 106.30 106.30
MAFB MAF Bancorp Inc. 0.961 14.96 13.87 14.08 12.77 18.67 178.57 205.69
MARN Marion Capital Holdings 3.826 65.04 15.44 24.11 11.98 18.70 104.59 104.59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MASB MASSBANK Corp. 2.233 27.48 14.75 14.42 13.44 13.70 144.45 144.45
MBB MSB Bancorp Inc. 3.000 181.82 19.80 7.00 20.83 60.61 101.42 236.13
MBBC Monterey Bay Bancorp Inc. 0.615 31.25 28.02 12.48 27.08 50.78 108.26 118.10
MBLF MBLA Financial Corp. 1.702 40.82 18.36 14.74 21.76 23.98 109.25 109.25
MBSP Mitchell Bancorp Inc. 0.000 NA NA 46.76 24.08 NA 107.94 107.94
MCBN Mid-Coast Bancorp Inc. 2.667 54.84 13.00 7.76 9.20 20.97 90.24 90.24
MCBS Mid Continent Bancshares Inc. 1.356 22.86 14.82 15.56 14.75 16.86 151.59 151.59
MDBK Medford Savings Bank 2.351 37.50 14.11 13.19 12.76 13.67 149.90 161.95
MECH Mechanics Savings Bank 0.000 NA NA 12.91 12.34 NA 132.76 132.76
MERI Meritrust Federal SB 1.795 38.24 14.23 13.21 11.61 22.94 167.10 167.10
METF Metropolitan Financial Corp. 0.000 NA NA 7.43 12.50 NA 194.73 217.11
MFBC MFB Corp. 1.673 32.35 19.13 14.16 15.94 28.13 97.63 97.63
MFCX Marshalltown Financial Corp. 0.000 0.00 30.57 18.67 24.73 57.98 119.58 119.58
MFFC Milton Federal Financial Corp. 4.404 706.98 23.90 17.74 26.20 31.69 111.50 111.50
MFLR Mayflower Co-operative Bank 3.478 36.84 14.02 12.32 11.35 12.97 130.58 132.90
MFSL Maryland Federal Bancorp 1.793 33.43 14.08 12.38 15.49 20.66 147.67 149.55
MGNL Magna Bancorp Inc. 2.259 39.77 17.03 26.42 16.60 20.12 276.41 285.62
MIFC Mid-Iowa Financial Corp. 0.914 12.90 NA 11.87 11.51 14.11 130.40 130.60
MIVI Mississippi View Holding Co. 1.067 41.38 17.65 17.61 17.86 25.86 96.46 96.46
MLBC ML Bancorp Inc. 2.071 31.15 18.05 10.26 15.58 15.83 148.22 NA
MONT Montgomery Financial Corp. 3.596 NA NA NA NA NA NA NA
MRKF Market Financial Corporation 0.000 NA NA 31.41 NA NA 90.82 90.82
MSBF MSB Financial Inc. 1.956 40.00 18.12 23.85 17.89 22.90 143.56 143.56
MSBK Mutual Savings Bank FSB 0.000 0.00 NM 6.85 NM 66.41 114.12 114.12
MWBI Midwest Bancshares Inc. 1.832 32.56 11.95 8.21 12.41 19.04 118.32 118.32
MWBX MetroWest Bank 2.064 31.63 11.86 14.61 12.11 11.86 199.08 199.08
MWFD Midwest Federal Financial 1.679 26.05 16.88 16.36 12.66 17.02 189.96 197.75
NASB North American Savings Bank 1.592 17.42 13.40 16.45 9.66 13.09 206.37 213.29
NBN Northeast Bancorp 2.169 44.44 22.35 7.60 12.72 20.49 109.34 126.50
NBSI North Bancshares Inc. 2.400 82.35 28.57 17.25 22.73 39.22 118.06 118.06
NEIB Northeast Indiana Bancorp 2.000 33.70 14.81 16.31 13.33 17.39 107.60 107.60
NHTB New Hampshire Thrift Bncshrs 3.150 108.70 22.36 10.35 12.80 34.51 138.53 163.49
NMSB NewMil Bancorp Inc. 2.087 37.29 20.18 14.10 17.97 19.49 141.45 141.45
NSBC NewSouth Bancorp, Inc. 1.429 NA NA NA NA NA NA NA
NSLB NS&L Bancorp Inc. 3.008 113.64 28.66 20.25 21.88 37.78 101.62 101.62
NSSB Norwich Financial Corp. 2.605 43.08 17.62 16.56 14.93 16.54 150.67 167.97
NSSY Norwalk Savings Society 1.306 8.20 46.40 11.92 17.81 12.55 148.02 153.51
NTMG Nutmeg Federal S&LA 0.000 30.00 25.00 6.58 13.28 34.00 115.65 115.65
NWEQ Northwest Equity Corp. 3.213 47.62 14.09 13.18 12.88 17.78 105.27 105.27
NWSB Northwest Savings Bank (MHC) 1.939 55.26 19.64 19.31 20.63 28.95 198.80 211.81
NYB New York Bancorp Inc. 2.092 25.18 16.56 19.73 11.81 17.00 389.91 389.91
OCFC Ocean Financial Corp. 2.302 NA NA 22.68 20.68 NA 127.29 127.29
OCWN Ocwen Financial Corporation 0.000 NA NA 33.13 13.00 NA 389.88 389.88
OFCP Ottawa Financial Corp. 1.702 50.00 19.92 13.79 17.28 33.57 155.94 194.86
OHSL OHSL Financial Corp. 3.538 76.70 16.92 13.07 14.81 24.15 118.45 118.45
PALM Palfed, Inc. 0.738 150.00 23.21 13.08 16.25 NM 161.37 161.37
PAMM PacificAmerica Money Center 0.000 NA NA 58.82 6.78 NA 262.17 262.17
PBCI Pamrapo Bancorp Inc. 4.762 95.36 15.67 16.37 12.50 21.65 127.81 128.91
PBCT People's Bank (MHC) 2.528 42.42 24.65 21.35 18.32 19.98 253.85 254.09
PBKB People's Bancshares Inc. 2.667 25.83 21.71 10.80 11.46 13.75 192.53 200.97
PBNB People's Savings Financial Cp. 2.405 43.19 18.84 15.22 17.71 17.96 158.45 169.17
PCBC Perry County Financial Corp. 1.905 50.00 16.15 21.30 16.94 26.25 116.28 116.28
PCCI Pacific Crest Capital 0.000 0.00 14.80 11.03 11.92 12.50 152.73 152.73
PDB Piedmont Bancorp Inc. 3.810 NM 26.92 24.37 18.75 NM 143.64 143.64
PEEK Peekskill Financial Corp. 2.323 63.16 20.95 27.19 22.79 27.19 106.31 106.31
PERM Permanent Bancorp Inc. 1.649 46.61 21.65 11.75 20.91 41.10 127.30 128.37
PERT Perpetual Bank (MHC) 4.480 106.19 20.03 19.14 19.53 27.65 157.75 157.75
PETE Primary Bank 0.000 0.00 16.35 12.46 16.25 15.85 188.13 188.54
PFDC Peoples Bancorp 2.667 44.03 12.36 18.11 12.50 16.79 119.30 119.30
PFED Park Bancorp Inc. 0.000 NA NA 22.54 21.71 NA 103.97 103.97
PFFB PFF Bancorp Inc. 0.000 0.00 32.46 13.75 33.04 123.33 131.30 132.81
PFFC Peoples Financial Corp. 3.252 NA NA 25.56 27.46 NA 95.02 95.02
PFNC Progress Financial Corporation 0.780 14.63 18.98 9.76 9.15 25.00 185.69 211.78
PFSB PennFed Financial Services Inc 1.023 10.29 13.35 10.54 12.44 20.13 129.07 156.52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PFSL Pocahontas FS&LA (MHC) 4.138 65.50 14.60 9.49 13.94 16.86 148.87 148.87
PHBK Peoples Heritage Finl Group 1.876 31.51 16.40 19.98 15.99 17.52 243.50 288.53
PHFC Pittsburgh Home Financial Corp 1.548 NA NA 12.97 16.85 NA 113.06 114.39
PHSB Peoples Home Savings Bk (MHC) 0.000 NM NA NA NA NM NA NA
PKPS Poughkeepsie Financial Corp. 1.344 76.92 NA 10.88 20.66 57.22 129.13 129.13
PLSK Pulaski Savings Bank (MHC) 2.222 NA NA NA NA NA NA NA
PMFI Perpetual Midwest Financial 1.500 200.00 40.00 9.59 22.73 133.33 112.93 112.93
POBS Portsmouth Bank Shares 3.582 82.52 19.03 37.41 16.11 16.58 148.89 148.89
PRBC Prestige Bancorp Inc. 0.744 NA NA 11.69 17.53 NA 100.09 100.09
PROV Provident Financial Holdings 0.000 NA NA 15.74 19.66 NA 110.64 110.64
PSBK Progressive Bank Inc. 2.211 23.26 12.50 13.40 13.98 12.55 160.41 181.10
PSFC Peoples-Sidney Financial Corp. 0.000 NA NA NA NA NA NA NA
PSFI PS Financial Inc. 2.207 NA NA 42.13 18.13 NA 97.45 97.45
PTRS Potters Financial Corp. 1.636 43.84 13.92 9.16 6.25 30.14 102.85 102.85
PULB Pulaski Bank, Svgs Bank (MHC) 5.063 197.92 28.21 23.26 24.69 41.15 178.89 178.89
PULS Pulse Bancorp 3.457 66.04 12.50 12.01 11.25 19.10 154.11 154.11
PVFC PVF Capital Corp. 0.000 0.00 7.66 12.39 9.69 13.19 176.42 176.42
PVSA Parkvale Financial Corporation 1.882 31.07 11.61 11.53 11.32 17.37 154.24 155.55
PWBC PennFirst Bancorp Inc. 1.973 114.67 16.44 10.11 15.73 24.33 142.91 156.65
PWBK Pennwood Bancorp Inc. 2.169 NA NA 18.78 16.76 NA 96.41 96.41
QCBC Quaker City Bancorp Inc. 0.000 0.00 20.60 11.47 16.16 38.27 128.78 128.95
QCFB QCF Bancorp Inc. 0.000 0.00 12.43 21.21 12.36 15.24 117.23 117.23
QCSB Queens County Bancorp Inc. 1.744 30.05 22.38 37.20 17.38 22.06 216.19 216.19
RARB Raritan Bancorp Inc. 2.286 30.42 14.09 12.86 13.46 15.33 167.60 170.73
RCSB RCSB Financial Inc. 1.260 18.07 19.44 16.93 21.65 19.13 222.34 227.87
REDF RedFed Bancorp Inc. 0.000 0.00 27.08 12.81 12.70 180.56 156.70 156.85
RELI Reliance Bancshares Inc. 0.000 NA NA 44.21 29.24 NA 92.10 NA
RELY Reliance Bancorp Inc. 2.226 49.12 16.43 13.16 15.63 25.44 163.72 233.55
RIVR River Valley Bancorp 0.000 NA NA 13.34 12.50 NA 107.86 109.54
ROSE TR Financial Corp. 2.261 21.59 14.84 11.91 13.07 13.07 180.11 180.11
RSLN Roslyn Bancorp Inc. 0.914 NA NA 33.50 NA NA 155.36 156.14
RVSB Riverview Savings Bank (MHC) 1.082 24.06 20.54 23.89 17.89 26.10 214.17 236.04
SBCN Suburban Bancorporation Inc. 2.892 82.19 19.58 13.79 16.21 28.42 115.15 115.15
SBFL SB of the Finger Lakes (MHC) 2.319 500.00 123.21 14.47 43.13 215.63 153.06 153.06
SBOS Boston Bancorp (The) NA 10.89 NA NA NA NA NA NA
SCBS Southern Community Bancshares 1.967 NA NA 24.74 19.06 NA 112.63 112.63
SCCB S. Carolina Community Bancshrs 3.158 111.11 27.14 28.83 26.39 35.19 111.05 111.05
SECP Security Capital Corporation 1.260 18.97 18.32 24.04 16.42 21.90 160.98 160.98
SFED SFS Bancorp Inc. 1.534 28.13 16.44 13.74 24.01 28.52 105.74 105.74
SFFC StateFed Financial Corporation 2.105 37.04 14.07 17.60 13.57 17.59 100.00 100.00
SFIN Statewide Financial Corp. 2.133 40.54 14.65 13.21 14.65 25.34 141.94 142.26
SFNB Security First Network Bank 0.000 0.00 NM 86.07 NM NM 214.38 217.83
SFSB SuburbFed Financial Corp. 1.191 32.99 17.01 8.31 13.71 27.71 126.59 127.13
SFSL Security First Corp. 2.182 37.61 14.97 17.34 14.10 18.80 185.19 188.52
SGVB SGV Bancorp Inc. 0.000 0.00 24.15 8.35 27.40 61.96 114.83 116.90
SHEN First Shenango Bancorp Inc. 2.182 32.65 NA 14.15 12.50 18.71 132.28 132.28
SISB SIS Bancorp Inc. 1.726 3.58 8.38 11.22 13.91 8.30 152.57 152.57
SKAN Skaneateles Bancorp Inc. 1.850 20.38 14.23 8.53 12.87 13.77 124.21 128.41
SKBO First Carnegie Deposit (MHC) 0.000 NA NA NA NA NA NA NA
SMBC Southern Missouri Bancorp Inc. 2.899 69.44 16.91 17.05 16.59 23.96 108.83 108.83
SMFC Sho-Me Financial Corp. 0.000 0.00 19.23 18.71 14.88 22.59 178.66 178.66
SOBI Sobieski Bancorp Inc. 1.867 24.14 26.32 14.41 20.83 51.72 85.62 85.62
SOPN First Savings Bancorp Inc. 3.616 84.95 19.58 30.17 19.07 23.79 122.64 122.64
SOSA Somerset Savings Bank 0.000 0.00 14.47 8.77 11.46 14.47 148.65 148.65
SPBC St. Paul Bancorp Inc. 1.449 31.87 18.00 16.87 16.56 26.93 193.04 193.60
SRN Southern Banc Company Inc. 2.240 228.26 28.94 18.31 32.55 67.93 108.36 109.50
SSB Scotland Bancorp Inc 1.890 NA NA 42.38 23.35 NA 115.54 115.54
SSFC South Street Financial Corp. 2.353 NA NA 32.01 25.00 NA 116.12 116.12
SSM Stone Street Bancorp Inc. 2.130 NA NA 36.55 18.21 NA 101.95 101.95
STFR St. Francis Capital Corp. 1.333 28.95 20.11 12.28 16.07 23.68 150.69 171.27
STND Standard Financial Inc. 1.608 48.57 23.03 16.20 23.92 35.54 148.60 148.77
STSA Sterling Financial Corp. 0.000 0.00 23.46 6.76 15.83 135.71 173.04 204.08
SVRN Sovereign Bancorp Inc. 0.502 11.89 NA 10.82 33.20 26.13 241.48 329.30
SWBI Southwest Bancshares 3.707 75.51 15.07 14.56 14.24 20.92 134.96 134.96
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SWCB Sandwich Co-operative Bank 3.810 50.46 14.19 12.63 14.86 14.45 153.28 160.80
SZB SouthFirst Bancshares Inc. 3.053 NM 96.32 14.47 29.24 NM 103.51 103.51
TBK Tolland Bank 1.053 6.15 13.67 9.39 12.84 14.62 139.40 143.83
THR Three Rivers Financial Corp. 2.250 52.38 17.20 14.45 17.39 25.40 105.06 105.47
THRD TF Financial Corporation 1.975 43.04 18.41 12.84 17.46 25.63 109.40 125.54
TPNZ Tappan Zee Financial Inc. 1.198 33.90 20.35 21.01 21.96 28.28 120.58 120.58
TRIC Tri-County Bancorp Inc. 2.500 39.60 18.75 16.99 15.79 23.76 110.96 110.96
TSBS Peoples Bancorp Inc. (MHC) 1.667 40.70 28.00 30.30 23.86 24.42 181.98 199.05
TSH Teche Holding Co. 2.857 60.98 15.35 15.29 12.15 21.34 114.90 114.90
TWIN Twin City Bancorp 3.141 90.14 20.38 16.64 16.98 28.70 128.79 128.79
UBMT United Financial Corp. 4.174 95.79 19.83 26.12 19.17 24.21 115.35 115.35
UFRM United Federal Savings Bank 1.959 111.11 31.41 13.90 18.01 68.06 182.84 182.84
USAB USABancshares, Inc. 0.000 0.00 36.61 15.57 28.47 36.61 123.35 126.54
VABF Virginia Beach Fed. Financial 1.356 89.47 29.50 12.07 20.49 77.63 177.93 177.93
VFFC Virginia First Financial Corp. 0.437 5.56 26.60 16.25 15.05 12.71 201.54 208.71
WAMU Washington Mutual Inc. 1.631 97.92 26.58 16.38 17.15 66.44 326.58 346.26
WAYN Wayne Savings & Loan Co. (MHC) 3.543 189.59 23.97 15.60 23.03 54.69 170.23 170.23
WBST Webster Financial Corporation 1.739 39.11 15.18 9.85 NM 25.70 193.93 230.46
WCBI Westco Bancorp 2.308 44.63 16.67 21.43 16.67 21.49 137.64 137.64
WCFB Webster City Federal SB (MHC) 4.961 170.21 NA 36.35 23.71 34.31 154.31 154.31
WEFC Wells Financial Corp. 0.000 0.00 14.71 15.04 12.93 23.08 105.63 105.63
WEHO Westwood Homestead Fin. Corp. 1.931 NA NA 31.73 25.89 NA 102.47 102.47
WES Westcorp 2.140 34.67 74.75 14.27 15.57 16.39 152.06 152.43
WFCO Winton Financial Corp. 3.505 40.95 10.76 8.49 8.20 12.50 118.67 121.42
WFSG Wilshire Financial Services 0.000 NA NA 12.58 11.70 NA 215.21 215.21
WFSL Washington Federal Inc. 3.530 44.76 11.96 21.47 11.64 13.30 177.78 194.65
WHGB WHG Bancshares Corp. 1.333 NA NA 23.45 26.79 NA 107.14 107.14
WOFC Western Ohio Financial Corp. 4.651 208.33 31.62 12.43 38.39 44.79 92.63 98.26
WRNB Warren Bancorp Inc. 3.014 28.57 10.99 17.62 6.96 9.13 174.60 174.60
WSB Washington Savings Bank, FSB 1.600 35.71 15.24 10.28 15.63 22.32 123.76 123.76
WSFS WSFS Financial Corporation 0.000 0.00 10.77 11.87 10.94 10.85 231.40 233.72
WSTR WesterFed Financial Corp. 1.856 51.60 20.20 13.47 22.63 27.93 122.70 155.28
WVFC WVS Financial Corporation 3.069 141.10 12.97 16.18 12.53 15.99 127.14 127.14
WWFC Westwood Financial Corporation 0.930 NA NA 12.85 17.34 NA 139.43 157.28
WYNE Wayne Bancorp Inc. 1.013 NA NA 17.35 19.75 NA 119.19 119.19
YFCB Yonkers Financial Corporation 1.290 NA NA 17.33 14.90 NA 113.30 113.30
YFED York Financial Corp. 2.963 59.67 16.74 12.20 12.05 21.09 144.75 144.75
---------------------------------------------------------------------------------------------
Average 1.724 55.72 21.28 16.76 17.79 27.26 144.53 150.43
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividends Current Pricing Data as of 7/10/97
----------------------- --------------------------------------------------------------------
Current LTM Dividend Price/ Price/ Price/Tang
Dividend Payout LTM Price/ Price/ Price/ Publicly Rep Publicly Rep
Yield Ratio Core EPS Assets Earnings LTM EPS Book Value Book Value
Ticker Short Name ($) (%) (x) (%) (x) (x) (%) (%)
- ------------------------------------- ----------------------- --------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAPS Capital Savings Bancorp Inc. 1.371 27.63 15.77 13.92 15.09 23.03 160.70 160.70
FBCV 1ST Bancorp 1.280 42.37 208.33 7.98 10.02 34.34 100.19 102.46
HBFW Home Bancorp 0.941 28.17 18.97 17.01 16.10 29.93 121.92 121.92
HMCI HomeCorp Inc. 0.000 0.00 20.60 7.36 17.41 73.13 116.81 116.81
KNK Kankakee Bancorp Inc. 1.620 29.37 15.76 12.29 14.52 20.72 115.09 122.93
MBLF MBLA Financial Corp. 1.702 40.82 18.36 14.74 21.76 23.98 109.25 109.25
MFBC MFB Corp. 1.673 32.35 19.13 14.16 15.94 28.13 97.63 97.63
PFDC Peoples Bancorp 2.667 44.03 12.36 18.11 12.50 16.79 119.30 119.30
WEFC Wells Financial Corp. 0.000 0.00 14.71 15.04 12.93 23.08 105.63 105.63
WCBI Westco Bancorp 2.308 44.63 16.67 21.43 16.67 21.49 137.64 137.64
---------------------------------------------------------------------------------------------
Average 1.36 28.94 36.07 14.20 15.29 29.46 118.42 119.43
Maximum 2.67 44.63 208.33 21.43 21.76 73.13 160.70 160.70
Minimum 0.00 0.00 12.36 7.36 10.02 16.79 97.63 97.63
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
%CAL California Federal Bank, a FSB NA
%CCMD Chevy Chase Bank, FSB NA
AABC Access Anytime Bancorp, Inc. NA
AADV Advantage Bancorp Inc. 263
ABBK Abington Bancorp Inc. 160
ABCL Alliance Bancorp Inc. 460
ABCW Anchor BanCorp Wisconsin 561
AFBC Advance Financial Bancorp NA
AFCB Affiliated Community Bancorp 195
AFED AFSALA Bancorp Inc. NA
AFFFZ America First Financial Fund 396
AHCI Ambanc Holding Co. Inc. NA
AHM Ahmanson & Company (H.F.) NA
ALBC Albion Banc Corp. NA
ALBK ALBANK Financial Corporation 1,174
AMFB American Federal Bank FSB NA
AMFC AMB Financial Corp. NA
ANA Acadiana Bancshares Inc. NA
ANBK American National Bancorp NA
ANDB Andover Bancorp Inc. 267
ASBI Ameriana Bancorp 147
ASBP ASB Financial Corp. 23
ASFC Astoria Financial Corporation 925
ATSB AmTrust Capital Corp. NA
AVND Avondale Financial Corp. 192
BANC BankAtlantic Bancorp Inc. 985
BDJI First Federal Bancorporation 40
BFD BostonFed Bancorp Inc. 257
BFFC Big Foot Financial Corp. NA
BFSB Bedford Bancshares Inc. 37
BKC American Bank of Connecticut 131
BKCO Bankers Corp. 269
BKCT Bancorp Connecticut Inc. 110
BKUNA BankUnited Financial Corp. 242
BNKU Bank United Corp. 1,504
BPLS Bank Plus Corp. 476
BSBC Branford Savings Bank 74
BTHL Bethel Bancorp NA
BVCC Bay View Capital Corp. 539
BWFC Bank West Financial Corp. 54
BYFC Broadway Financial Corp. NA
CAFI Camco Financial Corp. 177
CAPS Capital Savings Bancorp Inc. 78
CASB Cascade Financial Corp. 101
CASH First Midwest Financial Inc. 99
CATB Catskill Financial Corp. 63
CBCI Calumet Bancorp Inc. 130
CBCO CB Bancorp Inc. 67
CBES CBES Bancorp Inc. NA
CBK Citizens First Financial Corp. 93
CBNH Community Bankshares Inc. 228
CBSA Coastal Bancorp Inc. 448
CBSB Charter Financial Inc. 106
CCFH CCF Holding Company NA
CEBK Central Co-operative Bank NA
CENB Century Bancorp Inc. 11
CENF CENFED Financial Corp. 359
CFB Commercial Federal Corporation 1,530
CFBC Community First Banking Co. 177
CFCP Coastal Financial Corp. 168
CFFC Community Financial Corp. 42
CFNC Carolina Fincorp Inc. 41
CFSB CFSB Bancorp Inc. 229
CFTP Community Federal Bancorp 26
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
CFX CFX Corporation 769
CIBI Community Investors Bancorp NA
CKFB CKF Bancorp Inc. 8
CLAS Classic Bancshares Inc. 47
CMRN Cameron Financial Corp 53
CMSB Commonwealth Bancorp Inc. 724
CMSV Community Savings (MHC) 227
CNIT CENIT Bancorp Inc. NA
CNSB CNS Bancorp Inc. 27
CNY Carver Bancorp Inc. 96
COFD Collective Bancorp Inc. NA
COFI Charter One Financial 2,582
CONE Conestoga Bancorp, Inc. 105
COOP Cooperative Bankshares Inc. 114
CRZY Crazy Woman Creek Bancorp 10
CSA Coast Savings Financial 1,499
CSBF CSB Financial Group Inc. NA
CTZN CitFed Bancorp Inc. 714
CVAL Chester Valley Bancorp Inc. 107
CZF CitiSave Financial Corp 44
DCBI Delphos Citizens Bancorp Inc. 22
DIBK Dime Financial Corp. 145
DIME Dime Community Bancorp Inc. 242
DME Dime Bancorp Inc. 2,917
DNFC D & N Financial Corp. 489
DSL Downey Financial Corp. 1,095
EBSI Eagle Bancshares 433
EFBC Empire Federal Bancorp Inc. NA
EFBI Enterprise Federal Bancorp 37
EGFC Eagle Financial Corp. 342
EGLB Eagle BancGroup Inc. 51
EIRE Emerald Isle Bancorp Inc. 110
EMLD Emerald Financial Corp. 134
EQSB Equitable Federal Savings Bank NA
ESBK Elmira Savings Bank (The) 132
ESX Essex Bancorp Inc. NA
ETFS East Texas Financial Services 26
FAB FirstFed America Bancorp Inc. NA
FBBC First Bell Bancorp Inc. 59
FBCI Fidelity Bancorp Inc. 105
FBCV 1ST Bancorp 139
FBER 1st Bergen Bancorp 55
FBHC Fort Bend Holding Corp. NA
FBNW FirstBank Corp. NA
FBSI First Bancshares Inc. 62
FCB Falmouth Co-Operative Bank 26
FCBF FCB Financial Corp. 66
FCIT First Citizens Financial Corp. 180
FCME First Coastal Corporation NA
FDEF First Defiance Financial 145
FED FirstFed Financial Corp. 441
FESX First Essex Bancorp Inc. 286
FFBA First Colorado Bancorp Inc. 354
FFBH First Federal Bancshares of AR 146
FFBI First Financial Bancorp Inc. 32
FFBS FFBS BanCorp Inc. 31
FFBZ First Federal Bancorp Inc. 71
FFCH First Financial Holdings Inc. 537
FFDB FirstFed Bancorp Inc. 65
FFDF FFD Financial Corp. NA
FFED Fidelity Federal Bancorp 118
FFES First Federal of East Hartford 189
FFFC FFVA Financial Corp. 132
FFFD North Central Bancshares Inc. NA
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
FFFG F.F.O. Financial Group Inc. NA
FFFL Fidelity Bankshares Inc. (MHC) 268
FFHC First Financial Corp. 1,772
FFHH FSF Financial Corp. 90
FFHS First Franklin Corporation 47
FFIC Flushing Financial Corp. 200
FFKY First Federal Financial Corp. 104
FFLC FFLC Bancorp Inc. 120
FFOH Fidelity Financial of Ohio 105
FFPB First Palm Beach Bancorp Inc. 404
FFSL First Independence Corp. 24
FFSX First Fed SB of Siouxland(MHC) 160
FFWC FFW Corp. 40
FFWD Wood Bancorp Inc. 43
FFYF FFY Financial Corp. 176
FGHC First Georgia Holding Inc. 83
FIBC Financial Bancorp Inc. 56
FISB First Indiana Corporation 603
FKFS First Keystone Financial 72
FKKY Frankfort First Bancorp Inc. 25
FLAG FLAG Financial Corp. 113
FLFC First Liberty Financial Corp. 527
FLGS Flagstar Bancorp Inc. NA
FLKY First Lancaster Bancshares NA
FMBD First Mutual Bancorp Inc. 163
FMCO FMS Financial Corporation 258
FMSB First Mutual Savings Bank NA
FNGB First Northern Capital Corp. 215
FOBC Fed One Bancorp 122
FPRY First Financial Bancorp NA
FRC First Republic Bancorp 168
FSBI Fidelity Bancorp Inc. 105
FSFC First Southeast Financial Corp 121
FSLA First Savings Bank (MHC) 230
FSNJ First Savings Bk of NJ (MHC) 79
FSPG First Home Bancorp Inc. 115
FSPT FirstSpartan Financial Corp. NA
FSSB First FS&LA of San Bernardino 51
FSTC First Citizens Corp. 138
FTF Texarkana First Financial Corp 34
FTFC First Federal Capital Corp. 651
FTNB Fulton Bancorp Inc. NA
FTSB Fort Thomas Financial Corp. 19
FWWB First SB of Washington Bancorp NA
GAF GA Financial Inc. 196
GBCI Glacier Bancorp Inc. 255
GDVS Greater Delaware Valley (MHC) 67
GDW Golden West Financial 4,452
GFCO Glenway Financial Corp. 65
GFED Guaranty Federal SB (MHC) 58
GFSB GFS Bancorp Inc. 16
GLBK Glendale Co-Operative Bank NA
GLN Glendale Federal Bank FSB 2,555
GOSB GSB Financial Corporation NA
GPT GreenPoint Financial Corp. 1,954
GRTR Greater New York Savings Bank 548
GSBC Great Southern Bancorp Inc. 385
GSFC Green Street Financial Corp. 30
GSLA GS Financial Corp. NA
GTFN Great Financial Corporation 822
GTPS Great American Bancorp NA
GUPB GFSB Bancorp Inc. NA
GWBC Gateway Bancorp Inc. 9
HALL Hallmark Capital Corp. 73
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
HARB Harbor Florida Bancorp Inc. 313
HARL Harleysville Savings Bank 52
HARS Harris Savings Bank (MHC) 486
HAVN Haven Bancorp Inc. 435
HBBI Home Building Bancorp 14
HBEI Home Bancorp of Elgin Inc. 122
HBFW Home Bancorp 83
HBNK Highland Federal Bank FSB 115
HBS Haywood Bancshares Inc. NA
HCBB HCB Bancshares Inc. NA
HCFC Home City Financial Corp. 14
HEMT HF Bancorp Inc. NA
HFFB Harrodsburg First Fin Bancorp 15
HFFC HF Financial Corp. 259
HFGI Harrington Financial Group 51
HFNC HFNC Financial Corp. 125
HFSA Hardin Bancorp Inc. 18
HHFC Harvest Home Financial Corp. NA
HIFS Hingham Instit. for Savings 63
HMCI HomeCorp Inc. 181
HMLK Hemlock Federal Financial Corp 59
HMNF HMN Financial Inc. NA
HOMF Home Federal Bancorp 246
HPBC Home Port Bancorp Inc. 46
HRBF Harbor Federal Bancorp Inc. 51
HRZB Horizon Financial Corp. 117
HTHR Hawthorne Financial Corp. NA
HVFD Haverfield Corporation 95
HWEN Home Financial Bancorp 15
HZFS Horizon Financial Svcs Corp. 27
IBSF IBS Financial Corp. 130
IFSB Independence Federal Savings NA
IFSL Indiana Federal Corporation 285
INBI Industrial Bancorp 83
INCB Indiana Community Bank SB NA
IPSW Ipswich Savings Bank 54
ISBF ISB Financial Corporation NA
ITLA ITLA Capital Corp. 151
IWBK InterWest Bancorp Inc. 563
JOAC Joachim Bancorp Inc. 14
JSBA Jefferson Savings Bancorp NA
JSBF JSB Financial Inc. 355
JXSB Jacksonville Savings Bk (MHC) 80
JXVL Jacksonville Bancorp Inc. 71
KFBI Klamath First Bancorp 101
KNK Kankakee Bancorp Inc. 117
KSAV KS Bancorp Inc. 27
KSBK KSB Bancorp Inc. NA
KYF Kentucky First Bancorp Inc. 22
LARK Landmark Bancshares Inc. 45
LARL Laurel Capital Group Inc. 50
LFBI Little Falls Bancorp Inc. 39
LFCO Life Financial Corp. 167
LFED Leeds Federal Savings Bk (MHC) 27
LIFB Life Bancorp Inc. 224
LISB Long Island Bancorp Inc. 1,470
LOGN Logansport Financial Corp. 12
LONF London Financial Corporation NA
LSBI LSB Financial Corp. 61
LSBX Lawrence Savings Bank 100
LVSB Lakeview Financial NA
LXMO Lexington B&L Financial Corp. NA
MAFB MAF Bancorp Inc. 808
MARN Marion Capital Holdings 31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
MASB MASSBANK Corp. 179
MBB MSB Bancorp Inc. 239
MBBC Monterey Bay Bancorp Inc. NA
MBLF MBLA Financial Corp. 12
MBSP Mitchell Bancorp Inc. 6
MCBN Mid-Coast Bancorp Inc. 22
MCBS Mid Continent Bancshares Inc. 160
MDBK Medford Savings Bank 256
MECH Mechanics Savings Bank 226
MERI Meritrust Federal SB 91
METF Metropolitan Financial Corp. 261
MFBC MFB Corp. 61
MFCX Marshalltown Financial Corp. 32
MFFC Milton Federal Financial Corp. 50
MFLR Mayflower Co-operative Bank 47
MFSL Maryland Federal Bancorp NA
MGNL Magna Bancorp Inc. 1,102
MIFC Mid-Iowa Financial Corp. 36
MIVI Mississippi View Holding Co. 21
MLBC ML Bancorp Inc. NA
MONT Montgomery Financial Corp. NA
MRKF Market Financial Corporation NA
MSBF MSB Financial Inc. 18
MSBK Mutual Savings Bank FSB 229
MWBI Midwest Bancshares Inc. 39
MWBX MetroWest Bank 174
MWFD Midwest Federal Financial 88
NASB North American Savings Bank 240
NBN Northeast Bancorp NA
NBSI North Bancshares Inc. 32
NEIB Northeast Indiana Bancorp 38
NHTB New Hampshire Thrift Bncshrs 119
NMSB NewMil Bancorp Inc. 122
NSBC NewSouth Bancorp, Inc. NA
NSLB NS&L Bancorp Inc. 17
NSSB Norwich Financial Corp. 244
NSSY Norwalk Savings Society NA
NTMG Nutmeg Federal S&LA NA
NWEQ Northwest Equity Corp. NA
NWSB Northwest Savings Bank (MHC) 773
NYB New York Bancorp Inc. 495
OCFC Ocean Financial Corp. 229
OCWN Ocwen Financial Corporation 629
OFCP Ottawa Financial Corp. 247
OHSL OHSL Financial Corp. 59
PALM Palfed, Inc. 301
PAMM PacificAmerica Money Center NA
PBCI Pamrapo Bancorp Inc. 80
PBCT People's Bank (MHC) 2,821
PBKB People's Bancshares Inc. 204
PBNB People's Savings Financial Cp. 122
PCBC Perry County Financial Corp. NA
PCCI Pacific Crest Capital 62
PDB Piedmont Bancorp Inc. 30
PEEK Peekskill Financial Corp. 24
PERM Permanent Bancorp Inc. 125
PERT Perpetual Bank (MHC) NA
PETE Primary Bank 184
PFDC Peoples Bancorp 79
PFED Park Bancorp Inc. NA
PFFB PFF Bancorp Inc. 470
PFFC Peoples Financial Corp. 19
PFNC Progress Financial Corporation 170
PFSB PennFed Financial Services Inc 185
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
PFSL Pocahontas FS&LA (MHC) 58
PHBK Peoples Heritage Finl Group 2,365
PHFC Pittsburgh Home Financial Corp 56
PHSB Peoples Home Savings Bk (MHC) 75
PKPS Poughkeepsie Financial Corp. 266
PLSK Pulaski Savings Bank (MHC) NA
PMFI Perpetual Midwest Financial 103
POBS Portsmouth Bank Shares 63
PRBC Prestige Bancorp Inc. 32
PROV Provident Financial Holdings NA
PSBK Progressive Bank Inc. 271
PSFC Peoples-Sidney Financial Corp. 18
PSFI PS Financial Inc. 15
PTRS Potters Financial Corp. 41
PULB Pulaski Bank, Svgs Bank (MHC) NA
PULS Pulse Bancorp 53
PVFC PVF Capital Corp. NA
PVSA Parkvale Financial Corporation 232
PWBC PennFirst Bancorp Inc. 111
PWBK Pennwood Bancorp Inc. 11
QCBC Quaker City Bancorp Inc. 148
QCFB QCF Bancorp Inc. NA
QCSB Queens County Bancorp Inc. NA
RARB Raritan Bancorp Inc. 86
RCSB RCSB Financial Inc. NA
REDF RedFed Bancorp Inc. 276
RELI Reliance Bancshares Inc. NA
RELY Reliance Bancorp Inc. 389
RIVR River Valley Bancorp 57
ROSE TR Financial Corp. 441
RSLN Roslyn Bancorp Inc. 383
RVSB Riverview Savings Bank (MHC) 82
SBCN Suburban Bancorporation Inc. 58
SBFL SB of the Finger Lakes (MHC) 63
SBOS Boston Bancorp (The) NA
SCBS Southern Community Bancshares NA
SCCB S. Carolina Community Bancshrs NA
SECP Security Capital Corporation 911
SFED SFS Bancorp Inc. 61
SFFC StateFed Financial Corporation NA
SFIN Statewide Financial Corp. NA
SFNB Security First Network Bank NA
SFSB SuburbFed Financial Corp. 161
SFSL Security First Corp. 156
SGVB SGV Bancorp Inc. 88
SHEN First Shenango Bancorp Inc. 99
SISB SIS Bancorp Inc. 467
SKAN Skaneateles Bancorp Inc. 109
SKBO First Carnegie Deposit (MHC) NA
SMBC Southern Missouri Bancorp Inc. 43
SMFC Sho-Me Financial Corp. 78
SOBI Sobieski Bancorp Inc. 22
SOPN First Savings Bancorp Inc. 40
SOSA Somerset Savings Bank 138
SPBC St. Paul Bancorp Inc. 1,071
SRN Southern Banc Company Inc. NA
SSB Scotland Bancorp Inc 14
SSFC South Street Financial Corp. 37
SSM Stone Street Bancorp Inc. 18
STFR St. Francis Capital Corp. 340
STND Standard Financial Inc. 436
STSA Sterling Financial Corp. 510
SVRN Sovereign Bancorp Inc. 1,578
SWBI Southwest Bancshares 96
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
<S> <C> <C>
SWCB Sandwich Co-operative Bank 154
SZB SouthFirst Bancshares Inc. 45
TBK Tolland Bank 85
THR Three Rivers Financial Corp. NA
THRD TF Financial Corporation 153
TPNZ Tappan Zee Financial Inc. NA
TRIC Tri-County Bancorp Inc. 19
TSBS Peoples Bancorp Inc. (MHC) 134
TSH Teche Holding Co. 138
TWIN Twin City Bancorp 52
UBMT United Financial Corp. NA
UFRM United Federal Savings Bank 141
USAB USABancshares, Inc. NA
VABF Virginia Beach Fed. Financial 182
VFFC Virginia First Financial Corp. 398
WAMU Washington Mutual Inc. 8,773
WAYN Wayne Savings & Loan Co. (MHC) 104
WBST Webster Financial Corporation 1,123
WCBI Westco Bancorp 55
WCFB Webster City Federal SB (MHC) 21
WEFC Wells Financial Corp. NA
WEHO Westwood Homestead Fin. Corp. 18
WES Westcorp 2,756
WFCO Winton Financial Corp. NA
WFSG Wilshire Financial Services NA
WFSL Washington Federal Inc. 660
WHGB WHG Bancshares Corp. NA
WOFC Western Ohio Financial Corp. 124
WRNB Warren Bancorp Inc. 142
WSB Washington Savings Bank, FSB NA
WSFS WSFS Financial Corporation 285
WSTR WesterFed Financial Corp. 360
WVFC WVS Financial Corporation 56
WWFC Westwood Financial Corporation 15
WYNE Wayne Bancorp Inc. 50
YFCB Yonkers Financial Corporation 57
YFED York Financial Corp. 380
----------------
Average 302
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Productivity
---------------
Full Time
Equivalent
Employees
Ticker Short Name Most Recent Qtr
- ------------------------------------- ---------------
Comparable Thrift Data
<S> <C> <C>
CAPS Capital Savings Bancorp Inc. 78
FBCV 1ST Bancorp 139
HBFW Home Bancorp 83
HMCI HomeCorp Inc. 181
KNK Kankakee Bancorp Inc. 117
MBLF MBLA Financial Corp. 12
MFBC MFB Corp. 61
PFDC Peoples Bancorp 79
WEFC Wells Financial Corp. NA
WCBI Westco Bancorp 55
----------------
Average 89.44
Maximum 181.00
Minimum 0.00
</TABLE>
<PAGE>
Exhibit 6
Market Multiples
Pricing Data as of July 10, 1997
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank, a FSB NA NA NA NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB NA NA NA NA NA NA NA NA NA
AABC Access Anytime Bancorp, Inc. 6.125 7.31 12.76 NM 96.61 96.61 6.57 0.000 0.00
AADV Advantage Bancorp Inc. 39.500 127.65 13.53 39.11 141.42 152.69 12.50 1.013 33.66
ABBK Abington Bancorp Inc. 27.000 51.13 12.98 14.29 151.18 168.86 10.39 1.481 21.16
ABCL Alliance Bancorp Inc. 30.125 160.53 23.54 30.13 131.38 133.12 12.24 2.158 10.00
ABCW Anchor BanCorp Wisconsin 49.500 226.78 12.76 17.55 192.38 196.27 12.03 1.131 16.84
AFBC Advance Financial Bancorp 15.000 16.27 NA NA 101.69 101.69 15.71 2.133 NA
AFCB Affiliated Community Bancorp 23.750 153.53 13.19 16.49 146.33 147.24 14.53 2.021 30.00
AFED AFSALA Bancorp Inc. 15.625 22.73 18.60 NA 99.78 100.03 14.93 1.024 NA
AFFFZ America First Financial Fund 39.313 236.29 11.30 8.68 138.28 140.25 10.82 4.070 35.32
AHCI Ambanc Holding Co. Inc. 16.250 71.37 25.39 NM 117.33 117.33 14.93 0.000 0.00
AHM Ahmanson & Company (H.F.) 46.250 4,501.78 11.45 26.13 227.27 266.72 9.47 1.903 49.72
ALBC Albion Banc Corp. 22.500 5.92 12.50 102.27 95.26 95.26 8.48 1.378 140.91
ALBK ALBANK Financial Corporation 38.563 493.05 14.39 19.58 153.64 177.14 14.14 1.556 27.41
AMFB American Federal Bank FSB 34.625 382.62 20.61 26.23 325.42 349.04 29.23 1.386 40.91
AMFC AMB Financial Corp. 14.750 14.22 15.36 NA 103.22 103.22 16.82 1.627 NA
ANA Acadiana Bancshares Inc. 20.500 55.99 16.53 NA 122.75 122.75 21.40 1.756 NA
ANBK American National Bancorp 19.500 70.45 17.41 51.32 149.08 149.08 13.94 0.615 23.68
ANDB Andover Bancorp Inc. 30.250 155.74 12.20 11.96 159.55 159.55 12.87 2.248 21.74
ASBI Ameriana Bancorp 16.500 53.46 15.28 22.92 123.32 123.41 13.37 3.636 80.56
ASBP ASB Financial Corp. 12.000 20.66 21.43 29.27 112.99 112.99 18.88 3.333 NM
ASFC Astoria Financial Corporation 46.250 979.05 16.06 26.58 168.12 202.05 12.78 1.297 25.29
ATSB AmTrust Capital Corp. 12.563 6.61 20.94 28.55 91.57 92.58 9.31 1.592 11.36
AVND Avondale Financial Corp. 14.000 49.35 NM NM 94.09 94.09 7.77 0.000 0.00
BANC BankAtlantic Bancorp Inc. 14.500 345.29 12.95 15.10 176.18 216.42 9.70 0.803 12.03
BDJI First Federal Bancorporation 20.125 14.10 22.87 38.70 117.14 117.14 13.09 0.000 0.00
BFD BostonFed Bancorp Inc. 19.063 113.66 14.44 29.79 126.92 131.47 12.08 1.469 31.25
BFFC Big Foot Financial Corp. 16.250 40.83 25.39 NA 113.24 113.24 19.24 0.000 NA
BFSB Bedford Bancshares Inc. 24.000 27.42 15.79 19.83 137.69 137.69 20.85 2.333 38.02
BKC American Bank of Connecticut 38.250 88.05 11.95 12.88 187.59 196.25 14.96 3.765 51.18
BKCO Bankers Corp. 29.375 364.01 13.11 14.76 183.82 186.86 14.31 2.179 32.16
BKCT Bancorp Connecticut Inc. 25.000 63.90 12.02 13.59 148.72 148.72 15.47 3.520 42.08
BKUNA BankUnited Financial Corp. 10.125 86.73 21.09 44.02 138.13 171.90 6.16 0.000 0.00
BNKU Bank United Corp. 37.625 1,188.78 13.44 NA 208.91 213.66 10.80 1.488 NA
BPLS Bank Plus Corp. 11.375 207.57 12.36 NM 128.10 128.39 6.30 0.000 0.00
BSBC Branford Savings Bank 4.688 30.75 14.65 16.17 181.71 181.71 17.33 1.706 13.79
BTHL Bethel Bancorp 12.500 15.15 16.45 13.02 91.17 108.60 6.89 2.560 20.83
BVCC Bay View Capital Corp. 26.250 340.47 16.83 29.17 177.13 186.30 11.18 1.219 34.44
BWFC Bank West Financial Corp. 13.750 24.52 21.48 23.71 108.95 108.95 16.68 2.036 48.28
BYFC Broadway Financial Corp. 10.750 9.60 38.39 NM 75.33 75.33 8.08 1.860 NM
CAFI Camco Financial Corp. 17.750 57.06 11.99 17.07 124.56 135.39 12.08 2.790 42.97
CAPS Capital Savings Bancorp Inc. 17.500 33.11 15.09 23.03 160.70 160.70 13.92 1.371 27.63
CASB Cascade Financial Corp. 14.000 35.95 19.44 26.42 165.29 165.29 10.20 0.000 0.00
CASH First Midwest Financial Inc. 17.000 48.06 14.66 17.71 111.99 126.58 12.98 2.118 34.02
CATB Catskill Financial Corp. 15.625 79.27 19.53 NA 106.29 106.29 28.67 1.792 NA
CBCI Calumet Bancorp Inc. 38.250 80.87 13.28 17.55 108.57 108.57 17.31 0.000 0.00
CBCO CB Bancorp Inc. 34.250 39.80 14.27 18.51 190.91 190.91 17.52 0.000 0.00
CBES CBES Bancorp Inc. 17.875 18.32 16.55 NA 104.65 104.65 19.24 2.238 NA
CBK Citizens First Financial Corp. 15.750 44.08 28.13 NA 98.99 98.99 16.23 0.000 NA
CBNH Community Bankshares Inc. 39.250 96.76 18.51 19.05 233.63 233.63 16.66 1.631 30.10
CBSA Coastal Bancorp Inc. 30.375 150.92 11.87 20.80 156.98 185.89 5.29 1.580 27.40
CBSB Charter Financial Inc. 17.750 74.91 17.07 21.91 134.27 153.02 18.97 1.803 32.10
CCFH CCF Holding Company 16.625 13.70 103.91 75.57 115.61 115.61 16.54 3.308 318.18
CEBK Central Co-operative Bank 19.875 39.05 12.42 13.61 116.43 130.76 12.17 1.610 10.96
CENB Century Bancorp Inc. 71.250 29.02 15.22 NA 97.00 97.00 29.04 2.807 NA
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CENF CENFED Financial Corp. 33.875 195.14 14.11 18.61 168.95 169.29 8.62 1.063 17.57
CFB Commercial Federal Corporation 38.750 834.36 13.09 20.08 204.05 229.29 12.08 0.723 14.17
CFBC Community First Banking Co. 33.500 80.85 NA NA NA NA NA 0.000 NA
CFCP Coastal Financial Corp. 24.125 111.86 20.80 28.05 378.73 378.73 23.08 1.492 38.37
CFFC Community Financial Corp. 22.750 29.01 14.58 16.73 124.32 124.32 17.30 2.462 38.97
CFNC Carolina Fincorp Inc. 15.250 28.24 21.18 NA 109.63 109.63 25.98 1.311 NA
CFSB CFSB Bancorp Inc. 25.250 128.67 14.68 22.95 204.95 204.95 15.64 2.376 41.25
CFTP Community Federal Bancorp 17.750 76.01 22.19 26.89 110.04 110.04 36.89 1.690 45.45
CFX CFX Corporation 19.000 247.95 13.19 17.27 185.37 198.95 14.21 4.632 57.32
CIBI Community Investors Bancorp 13.375 12.70 12.38 19.96 113.16 113.16 13.03 1.995 33.85
CKFB CKF Bancorp Inc. 19.250 17.85 22.92 22.13 116.03 116.03 29.65 2.597 165.52
CLAS Classic Bancshares Inc. 14.000 18.27 NM 29.79 95.43 113.09 14.05 2.000 27.66
CMRN Cameron Financial Corp 17.500 46.39 19.02 21.88 103.43 103.43 23.74 1.600 35.00
CMSB Commonwealth Bancorp Inc. 16.250 277.78 14.51 NA 130.00 169.27 12.43 1.723 NA
CMSV Community Savings (MHC) 22.250 109.48 20.60 27.13 142.90 142.90 16.05 4.045 100.61
CNIT CENIT Bancorp Inc. 49.000 80.42 19.76 24.02 160.24 175.19 11.37 2.041 44.12
CNSB CNS Bancorp Inc. 16.250 26.86 27.08 NA 110.32 110.32 27.38 1.231 NA
CNY Carver Bancorp Inc. 12.000 27.77 NM NM 81.30 84.93 6.56 1.667 0.00
COFD Collective Bancorp Inc. 46.500 952.51 14.72 18.45 238.71 261.82 17.39 2.151 39.68
COFI Charter One Financial 53.438 2,476.25 14.37 19.09 260.29 279.78 17.64 1.871 32.11
CONE Conestoga Bancorp, Inc. NA NA NA NA NA NA NA NA 28.17
COOP Cooperative Bankshares Inc. 24.500 36.55 16.55 NM 140.08 140.08 10.49 0.000 0.00
CRZY Crazy Woman Creek Bancorp 13.750 13.82 20.22 26.44 95.35 95.35 26.55 2.909 67.31
CSA Coast Savings Financial 45.875 852.93 18.20 68.47 195.63 198.34 9.70 0.000 0.00
CSBF CSB Financial Group Inc. 12.000 11.30 50.00 54.55 93.90 99.59 23.55 0.000 0.00
CTZN CitFed Bancorp Inc. 40.750 350.98 14.76 23.97 188.74 211.91 11.95 0.785 15.29
CVAL Chester Valley Bancorp Inc. 20.625 42.36 14.73 23.98 162.15 162.15 13.88 2.133 39.07
CZF CitiSave Financial Corp 20.125 19.36 26.48 50.31 155.41 155.41 25.84 1.988 587.50
DCBI Delphos Citizens Bancorp Inc. 15.125 30.84 14.00 NA 101.58 101.58 28.80 0.000 NA
DIBK Dime Financial Corp. 26.125 134.18 9.20 10.09 210.52 218.44 16.47 1.531 12.36
DIME Dime Community Bancorp Inc. 19.250 252.67 18.51 NA 132.48 154.37 20.42 0.935 NA
DME Dime Bancorp Inc. 17.313 1,821.38 13.96 16.81 172.96 174.53 9.87 0.000 0.00
DNFC D & N Financial Corp. 19.000 158.00 12.50 18.10 179.92 181.99 10.34 0.000 0.00
DSL Downey Financial Corp. 23.000 614.88 12.50 27.71 153.54 155.83 11.21 1.391 36.72
EBSI Eagle Bancshares 18.250 83.08 16.90 21.22 143.25 143.25 12.47 3.288 67.44
EFBC Empire Federal Bancorp Inc. 14.375 37.26 NA NA 93.65 93.65 34.52 2.087 NA
EFBI Enterprise Federal Bancorp 19.000 38.21 15.32 22.35 120.71 120.87 14.88 5.263 147.06
EGFC Eagle Financial Corp. 31.500 143.67 13.13 17.70 137.49 182.61 9.49 2.921 51.69
EGLB Eagle BancGroup Inc. 16.000 20.28 40.00 NA 98.28 98.28 11.89 0.000 NA
EIRE Emerald Isle Bancorp Inc. 19.500 43.59 12.83 13.64 151.99 151.99 10.58 1.436 17.62
EMLD Emerald Financial Corp. 13.500 68.33 11.64 17.76 154.64 157.34 11.61 1.778 39.47
EQSB Equitable Federal Savings Bank 39.000 23.49 9.65 18.75 156.56 156.56 7.93 0.000 0.00
ESBK Elmira Savings Bank (The) 19.500 13.77 20.31 21.91 96.53 100.83 6.19 3.282 71.91
ESX Essex Bancorp Inc. 1.375 1.45 NM NM NM NM 0.81 0.000 0.00
ETFS East Texas Financial Services 18.000 18.46 23.68 46.15 91.42 91.42 17.39 1.111 51.28
FAB FirstFed America Bancorp Inc. 17.750 154.55 NA NA 126.51 126.51 15.77 0.000 NA
FBBC First Bell Bancorp Inc. 16.375 111.40 14.62 16.21 154.05 154.05 15.71 2.443 331.68
FBCI Fidelity Bancorp Inc. 19.375 54.09 13.45 22.27 109.22 109.53 11.13 1.652 29.89
FBCV 1ST Bancorp 31.250 21.80 10.02 34.34 100.19 102.46 7.98 1.280 42.37
FBER 1st Bergen Bancorp 15.375 46.36 21.35 NA 111.74 111.74 18.38 0.780 NA
FBHC Fort Bend Holding Corp. 29.500 24.26 11.90 32.42 131.64 142.03 8.22 0.949 30.77
FBNW FirstBank Corp. 15.500 30.75 NA NA NA NA NA 0.000 NA
FBSI First Bancshares Inc. 21.750 24.86 13.94 18.43 109.85 110.02 15.77 0.920 16.95
FCB Falmouth Co-Operative Bank 16.500 24.00 34.38 31.73 108.77 108.77 26.59 1.212 19.23
FCBF FCB Financial Corp. 27.250 111.70 22.71 26.98 141.56 141.56 24.76 2.642 71.29
FCIT First Citizens Financial Corp. 32.375 95.31 18.39 29.70 224.98 224.98 13.74 0.000 0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FCME First Coastal Corporation 9.625 13.07 12.66 1.85 97.32 97.32 8.65 0.000 0.00
FDEF First Defiance Financial 15.000 141.35 22.06 34.88 120.87 120.87 25.88 2.133 69.77
FED FirstFed Financial Corp. 31.938 337.28 16.63 34.34 172.82 175.10 8.17 0.000 0.00
FESX First Essex Bancorp Inc. 17.750 132.84 15.85 12.07 158.48 183.94 11.58 2.704 32.65
FFBA First Colorado Bancorp Inc. 19.125 316.74 16.49 24.21 164.87 167.18 20.97 2.301 44.30
FFBH First Federal Bancshares of AR 20.875 102.21 15.81 NA 124.33 124.33 19.66 0.958 NA
FFBI First Financial Bancorp Inc. 18.750 7.79 12.67 NM 107.14 107.14 8.36 0.000 0.00
FFBS FFBS BanCorp Inc. 26.000 40.49 19.12 26.80 152.85 152.85 31.47 1.923 51.55
FFBZ First Federal Bancorp Inc. 17.000 26.72 17.00 21.52 202.86 203.11 13.94 1.412 29.11
FFCH First Financial Holdings Inc. 32.250 204.13 14.40 24.07 207.13 207.13 12.74 2.233 50.75
FFDB FirstFed Bancorp Inc. 17.750 21.94 12.68 21.91 121.99 133.06 12.27 2.817 59.26
FFDF FFD Financial Corp. 14.625 21.28 26.12 NA 100.79 100.79 24.94 2.051 NA
FFED Fidelity Federal Bancorp 8.750 21.76 10.94 58.33 169.25 169.25 8.71 4.571 466.67
FFES First Federal of East Hartford 29.250 77.79 15.90 19.12 127.17 127.17 7.95 2.051 39.22
FFFC FFVA Financial Corp. 26.531 119.93 16.58 22.87 156.16 159.73 21.81 1.809 36.21
FFFD North Central Bancshares Inc. 16.000 53.11 14.81 17.20 109.66 109.66 26.96 1.563 26.88
FFFG F.F.O. Financial Group Inc. 4.750 40.12 16.96 19.00 193.09 193.09 12.51 0.000 0.00
FFFL Fidelity Bankshares Inc. (MHC) 20.000 135.31 27.78 40.82 165.56 166.94 14.60 4.000 153.06
FFHC First Financial Corp. 29.625 1,072.07 14.52 21.47 265.93 274.05 18.57 2.025 39.13
FFHH FSF Financial Corp. 18.000 55.12 18.00 24.66 113.42 113.42 15.17 2.778 68.49
FFHS First Franklin Corporation 20.000 23.57 17.24 76.92 118.13 118.98 10.42 1.600 123.08
FFIC Flushing Financial Corp. 20.500 165.80 20.50 23.56 127.65 127.65 20.44 1.171 13.79
FFKY First Federal Financial Corp. 21.500 89.45 14.53 20.09 176.81 188.27 24.05 2.419 45.79
FFLC FFLC Bancorp Inc. 27.250 63.16 17.03 28.99 122.97 122.97 17.80 1.761 44.68
FFOH Fidelity Financial of Ohio 15.000 83.91 17.05 33.33 124.69 141.91 16.35 1.867 48.89
FFPB First Palm Beach Bancorp Inc. 32.250 161.55 17.53 NM 153.28 157.32 10.37 1.860 NM
FFSL First Independence Corp. 11.625 11.57 18.16 24.22 101.88 101.88 10.70 2.151 44.27
FFSX First Fed SB of Siouxland(MHC) 23.750 67.14 19.15 35.45 178.30 179.92 14.51 2.021 68.39
FFWC FFW Corp. 28.000 19.52 11.11 14.36 123.08 123.08 12.32 2.571 30.77
FFWD Wood Bancorp Inc. 23.000 34.33 15.13 23.23 165.35 165.35 21.00 1.739 31.31
FFYF FFY Financial Corp. 26.188 109.55 13.93 22.77 134.30 134.30 18.93 2.673 56.52
FGHC First Georgia Holding Inc. 7.750 23.66 14.90 26.72 189.95 208.33 16.08 0.688 18.38
FIBC Financial Bancorp Inc. 19.000 32.63 13.57 23.75 126.75 127.43 12.34 2.105 40.63
FISB First Indiana Corporation 22.500 236.37 14.80 18.29 166.54 168.67 15.96 2.133 37.07
FKFS First Keystone Financial 23.375 28.70 10.08 17.58 129.00 129.00 9.12 0.856 7.52
FKKY Frankfort First Bancorp Inc. 9.250 31.31 23.13 35.58 93.15 93.15 24.40 3.892 NM
FLAG FLAG Financial Corp. 14.625 29.79 12.19 NM 142.68 142.68 13.41 2.325 NM
FLFC First Liberty Financial Corp. 22.250 171.88 12.64 17.80 187.45 209.51 13.77 1.798 29.87
FLGS Flagstar Bancorp Inc. 16.875 230.68 NM NA NA NA NA 0.000 NA
FLKY First Lancaster Bancshares 15.250 14.62 23.83 NA 105.61 105.61 36.15 3.279 NA
FMBD First Mutual Bancorp Inc. 15.500 54.35 193.75 119.23 93.37 121.38 13.66 2.065 238.46
FMCO FMS Financial Corporation 24.500 58.47 11.14 18.01 167.92 171.45 10.56 0.816 14.71
FMSB First Mutual Savings Bank 18.250 49.25 12.01 12.76 172.99 172.99 11.55 1.096 12.73
FNGB First Northern Capital Corp. 22.500 99.44 18.15 28.85 139.84 139.84 16.09 2.844 78.21
FOBC Fed One Bancorp 21.250 50.30 16.10 22.85 124.49 130.69 14.99 2.729 61.29
FPRY First Financial Bancorp NA NA NA NA NA NA NA NA 39.66
FRC First Republic Bancorp 23.375 233.57 15.38 16.23 144.38 144.47 10.70 0.000 0.00
FSBI Fidelity Bancorp Inc. 20.000 30.85 12.50 19.05 134.95 134.95 9.40 1.800 27.93
FSFC First Southeast Financial Corp 14.125 61.98 16.82 NM 181.09 181.09 18.52 1.699 NM
FSLA First Savings Bank (MHC) 27.250 197.49 20.04 40.07 209.62 236.55 19.27 1.761 54.81
FSNJ First Savings Bk of NJ (MHC) 29.750 215.61 33.81 NM 183.87 183.87 15.76 1.681 NM
FSPG First Home Bancorp Inc. 19.625 53.15 10.44 12.11 158.78 161.66 10.46 2.038 23.46
FSPT FirstSpartan Financial Corp. 36.500 161.71 NA NM NA NA NA 0.000 NM
FSSB First FS&LA of San Bernardino 9.625 3.16 NM NM 70.36 73.03 3.05 0.000 0.00
FSTC First Citizens Corp. 27.000 49.39 48.21 17.09 165.75 220.95 15.13 1.630 27.85
FTF Texarkana First Financial Corp 20.625 37.63 12.28 15.63 140.31 140.31 22.49 2.715 261.36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FTFC First Federal Capital Corp. 23.750 216.74 15.63 22.20 223.00 237.98 14.18 2.021 39.89
FTNB Fulton Bancorp Inc. 20.250 34.81 36.16 NA 139.94 139.94 35.00 0.988 NA
FTSB Fort Thomas Financial Corp. 10.500 14.86 17.50 36.21 103.04 103.04 16.58 2.381 NM
FWWB First SB of Washington Bancorp 22.125 232.73 17.84 23.29 145.08 157.70 23.10 1.266 23.16
GAF GA Financial Inc. 18.250 145.72 19.01 22.81 122.16 123.48 22.89 2.192 26.25
GBCI Glacier Bancorp Inc. 18.125 123.26 15.63 16.63 233.27 240.07 22.31 2.648 39.16
GDVS Greater Delaware Valley (MHC) 16.500 54.00 24.26 NM 197.13 197.13 22.62 2.182 NM
GDW Golden West Financial 72.313 4,137.64 12.47 11.23 171.40 171.40 10.74 0.608 6.37
GFCO Glenway Financial Corp. 26.500 30.31 13.80 28.19 114.92 116.74 10.79 2.566 70.62
GFED Guaranty Federal SB (MHC) 17.750 55.47 31.70 59.17 204.49 204.49 28.30 2.254 113.33
GFSB GFS Bancorp Inc. 13.875 13.71 12.39 16.52 134.32 134.32 15.55 1.874 23.81
GLBK Glendale Co-Operative Bank 27.000 6.68 24.11 24.55 110.38 110.38 18.08 0.000 0.00
GLN Glendale Federal Bank FSB 27.750 1,395.98 21.02 81.62 181.25 194.87 9.07 0.000 0.00
GOSB GSB Financial Corporation 14.750 33.16 NM NA NA NA NA 0.000 NA
GPT GreenPoint Financial Corp. 63.875 2,994.97 16.99 18.95 184.77 322.44 22.58 1.566 25.22
GRTR Greater New York Savings Bank 21.875 299.20 27.34 27.01 190.55 190.55 11.64 0.914 12.35
GSBC Great Southern Bancorp Inc. 16.375 133.13 11.70 15.60 222.79 222.79 19.98 2.443 36.90
GSFC Green Street Financial Corp. 17.625 75.75 25.92 NA 120.39 120.39 43.44 2.496 NA
GSLA GS Financial Corp. 14.875 51.15 NA NA NA NA NA 0.000 NA
GTFN Great Financial Corporation 34.000 472.09 16.04 23.45 171.46 179.23 15.94 1.765 33.10
GTPS Great American Bancorp 16.500 29.04 41.25 103.13 89.87 89.87 21.06 2.424 250.00
GUPB GFSB Bancorp Inc. 19.000 15.28 22.62 28.36 112.56 112.56 18.35 2.105 111.94
GWBC Gateway Bancorp Inc. 17.750 19.09 23.36 34.13 111.22 111.22 29.02 2.254 76.92
HALL Hallmark Capital Corp. 21.750 31.38 11.82 17.98 109.74 109.74 7.67 0.000 0.00
HARB Harbor Florida Bancorp Inc. 45.000 223.28 17.05 23.32 245.90 255.54 20.21 3.111 64.77
HARL Harleysville Savings Bank 23.250 38.42 11.63 18.16 181.36 181.36 11.54 1.720 27.19
HARS Harris Savings Bank (MHC) 21.875 245.47 13.02 59.12 159.56 184.91 12.63 2.651 156.76
HAVN Haven Bancorp Inc. 37.000 160.31 12.50 16.74 159.97 160.59 9.27 1.622 27.15
HBBI Home Building Bancorp 22.000 6.86 16.18 70.97 110.66 110.66 14.65 1.364 96.77
HBEI Home Bancorp of Elgin Inc. 18.750 131.42 33.48 NA 130.30 130.30 36.64 2.133 NA
HBFW Home Bancorp 21.250 55.74 16.10 29.93 121.92 121.92 17.01 0.941 28.17
HBNK Highland Federal Bank FSB 25.000 57.05 11.36 43.86 159.24 159.24 11.88 0.000 0.00
HBS Haywood Bancshares Inc. 17.500 21.91 17.50 20.59 105.93 109.99 14.97 3.200 63.53
HCBB HCB Bancshares Inc. 13.125 34.72 NA NA NA NA NA 0.000 NA
HCFC Home City Financial Corp. 14.625 13.93 18.28 NA 91.12 91.12 20.41 2.188 NA
HEMT HF Bancorp Inc. 14.234 89.42 59.31 NM 110.60 135.18 9.08 0.000 0.00
HFFB Harrodsburg First Fin Bancorp 15.500 31.38 20.39 26.72 101.51 101.51 29.01 2.581 94.83
HFFC HF Financial Corp. 21.500 64.27 12.80 20.09 130.22 130.54 11.48 1.674 32.94
HFGI Harrington Financial Group 12.750 41.52 12.26 25.00 168.43 168.43 8.06 0.941 0.00
HFNC HFNC Financial Corp. 14.875 255.74 30.99 27.55 161.16 161.16 30.34 1.882 961.11
HFSA Hardin Bancorp Inc. 15.250 13.11 17.33 29.90 99.22 99.22 12.68 3.148 78.43
HHFC Harvest Home Financial Corp. 12.000 10.98 16.67 52.17 108.01 108.01 13.50 3.333 NM
HIFS Hingham Instit. for Savings 22.000 28.68 11.22 12.72 145.79 145.79 13.92 2.182 27.17
HMCI HomeCorp Inc. 14.625 24.76 17.41 73.13 116.81 116.81 7.36 0.000 0.00
HMLK Hemlock Federal Financial Corp 14.375 29.85 NA NA NA NA NA 0.000 NA
HMNF HMN Financial Inc. 22.500 94.77 14.80 22.50 120.26 120.26 17.13 0.000 0.00
HOMF Home Federal Bancorp 28.250 95.78 11.58 14.95 170.80 176.56 14.43 1.770 19.40
HPBC Home Port Bancorp Inc. 20.250 37.30 12.05 11.98 182.27 182.27 19.71 3.951 44.38
HRBF Harbor Federal Bancorp Inc. 19.750 34.65 20.57 36.57 122.75 122.75 15.79 2.025 74.07
HRZB Horizon Financial Corp. 16.313 120.70 14.57 15.69 153.75 153.75 23.42 2.452 62.71
HTHR Hawthorne Financial Corp. 12.625 33.19 18.57 40.73 102.06 102.06 3.96 0.000 0.00
HVFD Haverfield Corporation 26.000 49.57 15.12 29.55 172.87 172.87 14.51 2.154 61.93
HWEN Home Financial Bancorp 15.000 7.29 22.06 NA 99.21 99.21 18.48 1.333 NA
HZFS Horizon Financial Svcs Corp. 19.000 8.09 13.19 24.68 98.29 98.29 10.32 1.684 41.56
IBSF IBS Financial Corp. 18.500 203.73 35.58 52.86 161.57 161.57 27.53 1.730 131.71
IFSB Independence Federal Savings 9.938 12.72 10.80 34.27 74.22 84.65 4.84 2.214 0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
IFSL Indiana Federal Corporation 28.750 137.64 15.29 26.38 191.28 203.61 16.80 2.504 66.06
INBI Industrial Bancorp 13.813 74.73 14.39 30.70 121.06 121.06 22.38 3.475 61.11
INCB Indiana Community Bank SB 15.000 13.83 25.00 100.00 122.25 122.25 15.14 2.400 NM
IPSW Ipswich Savings Bank 17.000 20.20 11.18 11.64 197.90 197.90 12.20 1.412 13.70
ISBF ISB Financial Corporation 24.000 165.63 20.69 29.27 137.54 162.16 17.90 1.667 42.68
ITLA ITLA Capital Corp. 17.000 133.10 11.81 12.50 144.44 145.05 16.42 0.000 0.00
IWBK InterWest Bancorp Inc. 39.250 314.72 16.09 22.18 265.02 271.25 17.77 1.529 30.51
JOAC Joachim Bancorp Inc. 14.500 11.03 51.79 58.00 106.70 106.70 30.92 3.448 200.00
JSBA Jefferson Savings Bancorp 29.500 146.65 12.50 37.34 127.05 166.76 11.31 1.356 43.04
JSBF JSB Financial Inc. 44.000 432.92 17.46 16.86 127.46 127.46 28.25 3.182 47.89
JXSB Jacksonville Savings Bk (MHC) 17.000 21.63 21.25 53.13 128.21 128.21 13.20 2.353 125.00
JXVL Jacksonville Bancorp Inc. 15.125 38.44 13.50 NA 113.98 113.98 17.82 3.306 NA
KFBI Klamath First Bancorp 19.688 196.13 18.23 33.94 127.93 127.93 28.68 1.524 48.28
KNK Kankakee Bancorp Inc. 29.625 42.07 14.52 20.72 115.09 122.93 12.29 1.620 29.37
KSAV KS Bancorp Inc. 19.125 16.91 14.06 19.72 121.43 121.51 16.79 2.353 92.78
KSBK KSB Bancorp Inc. 45.000 18.70 13.55 13.68 185.11 196.76 13.27 0.533 6.08
KYF Kentucky First Bancorp Inc. 12.375 16.33 15.47 22.92 113.95 113.95 18.36 4.040 648.15
LARK Landmark Bancshares Inc. 20.250 36.61 15.82 21.09 111.82 111.82 16.36 1.975 41.67
LARL Laurel Capital Group Inc. 21.250 30.64 11.55 14.76 146.45 146.45 15.26 2.071 28.47
LFBI Little Falls Bancorp Inc. 15.500 42.55 22.79 55.36 108.47 117.87 14.02 0.774 37.50
LFCO Life Financial Corp. 17.000 103.90 2.02 NA 157.99 157.99 11.54 0.000 NA
LFED Leeds Federal Savings Bk (MHC) 19.500 67.37 19.50 30.47 147.62 147.62 23.90 3.897 107.81
LIFB Life Bancorp Inc. 25.500 251.09 17.71 25.50 165.37 170.57 17.83 1.882 44.00
LISB Long Island Bancorp Inc. 35.625 863.13 17.46 25.45 164.78 166.39 14.84 1.684 35.71
LOGN Logansport Financial Corp. 13.875 17.46 15.77 19.82 111.80 111.80 21.98 2.883 485.71
LONF London Financial Corporation 14.750 7.60 21.69 NA 100.82 100.82 20.03 1.627 NA
LSBI LSB Financial Corp. 20.250 19.14 12.35 19.85 104.27 104.27 10.18 1.600 29.88
LSBX Lawrence Savings Bank 12.750 54.27 10.99 9.96 180.59 180.59 15.87 0.000 0.00
LVSB Lakeview Financial 33.000 75.98 15.28 13.15 165.75 207.29 15.78 0.758 9.51
LXMO Lexington B&L Financial Corp. 16.125 17.54 31.01 NA 106.30 106.30 29.36 1.860 NA
MAFB MAF Bancorp Inc. 29.125 452.32 12.77 18.67 178.57 205.69 14.08 0.961 14.96
MARN Marion Capital Holdings 23.000 42.05 11.98 18.70 104.59 104.59 24.11 3.826 65.04
MASB MASSBANK Corp. 48.375 130.03 13.44 13.70 144.45 144.45 14.42 2.233 27.48
MBB MSB Bancorp Inc. 20.000 56.74 20.83 60.61 101.42 236.13 7.00 3.000 181.82
MBBC Monterey Bay Bancorp Inc. 16.250 52.73 27.08 50.78 108.26 118.10 12.48 0.615 31.25
MBLF MBLA Financial Corp. 23.500 30.93 21.76 23.98 109.25 109.25 14.74 1.702 40.82
MBSP Mitchell Bancorp Inc. 16.375 15.85 24.08 NA 107.94 107.94 46.76 0.000 NA
MCBN Mid-Coast Bancorp Inc. 19.500 4.51 9.20 20.97 90.24 90.24 7.76 2.667 54.84
MCBS Mid Continent Bancshares Inc. 29.500 57.77 14.75 16.86 151.59 151.59 15.56 1.356 22.86
MDBK Medford Savings Bank 30.625 139.07 12.76 13.67 149.90 161.95 13.19 2.351 37.50
MECH Mechanics Savings Bank 19.250 101.83 12.34 NA 132.76 132.76 12.91 0.000 NA
MERI Meritrust Federal SB 39.000 30.19 11.61 22.94 167.10 167.10 13.21 1.795 38.24
METF Metropolitan Financial Corp. 17.000 59.94 12.50 NA 194.73 217.11 7.43 0.000 NA
MFBC MFB Corp. 19.125 33.17 15.94 28.13 97.63 97.63 14.16 1.673 32.35
MFCX Marshalltown Financial Corp. 16.813 23.73 24.73 57.98 119.58 119.58 18.67 0.000 0.00
MFFC Milton Federal Financial Corp. 13.625 31.71 26.20 31.69 111.50 111.50 17.74 4.404 706.98
MFLR Mayflower Co-operative Bank 17.250 15.36 11.35 12.97 130.58 132.90 12.32 3.478 36.84
MFSL Maryland Federal Bancorp 44.625 143.25 15.49 20.66 147.67 149.55 12.38 1.793 33.43
MGNL Magna Bancorp Inc. 26.563 365.35 16.60 20.12 276.41 285.62 26.42 2.259 39.77
MIFC Mid-Iowa Financial Corp. 8.750 14.67 11.51 14.11 130.40 130.60 11.87 0.914 12.90
MIVI Mississippi View Holding Co. 15.000 12.28 17.86 25.86 96.46 96.46 17.61 1.067 41.38
MLBC ML Bancorp Inc. 19.313 201.15 15.58 15.83 148.22 NA 10.26 2.071 31.15
MONT Montgomery Financial Corp. 11.125 18.39 NA NA NA NA NA 3.596 NA
MRKF Market Financial Corporation 13.250 17.70 NA NA 90.82 90.82 31.41 0.000 NA
MSBF MSB Financial Inc. 28.625 18.01 17.89 22.90 143.56 143.56 23.85 1.956 40.00
MSBK Mutual Savings Bank FSB 10.625 45.41 NM 66.41 114.12 114.12 6.85 0.000 0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MWBI Midwest Bancshares Inc. 32.750 11.41 12.41 19.04 118.32 118.32 8.21 1.832 32.56
MWBX MetroWest Bank 5.813 81.05 12.11 11.86 199.08 199.08 14.61 2.064 31.63
MWFD Midwest Federal Financial 20.250 32.90 12.66 17.02 189.96 197.75 16.36 1.679 26.05
NASB North American Savings Bank 50.250 113.28 9.66 13.09 206.37 213.29 16.45 1.592 17.42
NBN Northeast Bancorp 14.750 18.81 12.72 20.49 109.34 126.50 7.60 2.169 44.44
NBSI North Bancshares Inc. 20.000 20.70 22.73 39.22 118.06 118.06 17.25 2.400 82.35
NEIB Northeast Indiana Bancorp 16.000 28.20 13.33 17.39 107.60 107.60 16.31 2.000 33.70
NHTB New Hampshire Thrift Bncshrs 15.875 32.41 12.80 34.51 138.53 163.49 10.35 3.150 108.70
NMSB NewMil Bancorp Inc. 11.500 44.71 17.97 19.49 141.45 141.45 14.10 2.087 37.29
NSBC NewSouth Bancorp, Inc. 28.000 81.47 NA NA NA NA NA 1.429 NA
NSLB NS&L Bancorp Inc. 16.625 11.76 21.88 37.78 101.62 101.62 20.25 3.008 113.64
NSSB Norwich Financial Corp. 21.500 116.12 14.93 16.54 150.67 167.97 16.56 2.605 43.08
NSSY Norwalk Savings Society 30.625 73.61 17.81 12.55 148.02 153.51 11.92 1.306 8.20
NTMG Nutmeg Federal S&LA 8.500 6.17 13.28 34.00 115.65 115.65 6.58 0.000 30.00
NWEQ Northwest Equity Corp. 14.938 12.53 12.88 17.78 105.27 105.27 13.18 3.213 47.62
NWSB Northwest Savings Bank (MHC) 16.500 385.70 20.63 28.95 198.80 211.81 19.31 1.939 55.26
NYB New York Bancorp Inc. 38.250 620.15 11.81 17.00 389.91 389.91 19.73 2.092 25.18
OCFC Ocean Financial Corp. 34.750 311.85 20.68 NA 127.29 127.29 22.68 2.302 NA
OCWN Ocwen Financial Corporation 32.750 877.68 13.00 NA 389.88 389.88 33.13 0.000 NA
OFCP Ottawa Financial Corp. 23.500 115.63 17.28 33.57 155.94 194.86 13.79 1.702 50.00
OHSL OHSL Financial Corp. 24.875 30.05 14.81 24.15 118.45 118.45 13.07 3.538 76.70
PALM Palfed, Inc. 16.250 85.77 16.25 NM 161.37 161.37 13.08 0.738 150.00
PAMM PacificAmerica Money Center 35.000 66.08 6.78 NA 262.17 262.17 58.82 0.000 NA
PBCI Pamrapo Bancorp Inc. 21.000 59.70 12.50 21.65 127.81 128.91 16.37 4.762 95.36
PBCT People's Bank (MHC) 26.375 1,609.32 18.32 19.98 253.85 254.09 21.35 2.528 42.42
PBKB People's Bancshares Inc. 16.500 59.27 11.46 13.75 192.53 200.97 10.80 2.667 25.83
PBNB People's Savings Financial Cp. 38.250 72.94 17.71 17.96 158.45 169.17 15.22 2.405 43.19
PCBC Perry County Financial Corp. 21.000 16.98 16.94 26.25 116.28 116.28 21.30 1.905 50.00
PCCI Pacific Crest Capital 12.875 37.82 11.92 12.50 152.73 152.73 11.03 0.000 0.00
PDB Piedmont Bancorp Inc. 10.500 28.88 18.75 NM 143.64 143.64 24.37 3.810 NM
PEEK Peekskill Financial Corp. 15.500 49.65 22.79 27.19 106.31 106.31 27.19 2.323 63.16
PERM Permanent Bancorp Inc. 24.250 50.86 20.91 41.10 127.30 128.37 11.75 1.649 46.61
PERT Perpetual Bank (MHC) 31.250 47.02 19.53 27.65 157.75 157.75 19.14 4.480 106.19
PETE Primary Bank 26.000 54.27 16.25 15.85 188.13 188.54 12.46 0.000 0.00
PFDC Peoples Bancorp 22.500 51.28 12.50 16.79 119.30 119.30 18.11 2.667 44.03
PFED Park Bancorp Inc. 16.500 40.12 21.71 NA 103.97 103.97 22.54 0.000 NA
PFFB PFF Bancorp Inc. 18.500 348.64 33.04 123.33 131.30 132.81 13.75 0.000 0.00
PFFC Peoples Financial Corp. 15.375 22.92 27.46 NA 95.02 95.02 25.56 3.252 NA
PFNC Progress Financial Corporation 10.250 39.10 9.15 25.00 185.69 211.78 9.76 0.780 14.63
PFSB PennFed Financial Services Inc 27.375 131.98 12.44 20.13 129.07 156.52 10.54 1.023 10.29
PFSL Pocahontas FS&LA (MHC) 21.750 35.43 13.94 16.86 148.87 148.87 9.49 4.138 65.50
PHBK Peoples Heritage Finl Group 38.375 1,070.33 15.99 17.52 243.50 288.53 19.98 1.876 31.51
PHFC Pittsburgh Home Financial Corp 15.500 30.53 16.85 NA 113.06 114.39 12.97 1.548 NA
PHSB Peoples Home Savings Bk (MHC) 14.000 33.60 NA NM NA NA NA 0.000 NM
PKPS Poughkeepsie Financial Corp. 7.438 93.68 20.66 57.22 129.13 129.13 10.88 1.344 76.92
PLSK Pulaski Savings Bank (MHC) 13.500 27.95 NA NA NA NA NA 2.222 NA
PMFI Perpetual Midwest Financial 20.000 38.00 22.73 133.33 112.93 112.93 9.59 1.500 200.00
POBS Portsmouth Bank Shares 16.750 98.36 16.11 16.58 148.89 148.89 37.41 3.582 82.52
PRBC Prestige Bancorp Inc. 16.125 14.75 17.53 NA 100.09 100.09 11.69 0.744 NA
PROV Provident Financial Holdings 18.875 95.79 19.66 NA 110.64 110.64 15.74 0.000 NA
PSBK Progressive Bank Inc. 30.750 117.62 13.98 12.55 160.41 181.10 13.40 2.211 23.26
PSFC Peoples-Sidney Financial Corp. 14.250 25.44 NA NA NA NA NA 0.000 NA
PSFI PS Financial Inc. 14.500 31.64 18.13 NA 97.45 97.45 42.13 2.207 NA
PTRS Potters Financial Corp. 22.000 10.71 6.25 30.14 102.85 102.85 9.16 1.636 43.84
PULB Pulaski Bank, Svgs Bank (MHC) 19.750 41.36 24.69 41.15 178.89 178.89 23.26 5.063 197.92
PULS Pulse Bancorp 20.250 62.11 11.25 19.10 154.11 154.11 12.01 3.457 66.04
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PVFC PVF Capital Corp. 19.000 44.14 9.69 13.19 176.42 176.42 12.39 0.000 0.00
PVSA Parkvale Financial Corporation 27.625 112.17 11.32 17.37 154.24 155.55 11.53 1.882 31.07
PWBC PennFirst Bancorp Inc. 18.250 71.38 15.73 24.33 142.91 156.65 10.11 1.973 114.67
PWBK Pennwood Bancorp Inc. 14.750 9.00 16.76 NA 96.41 96.41 18.78 2.169 NA
QCBC Quaker City Bancorp Inc. 18.750 89.00 16.16 38.27 128.78 128.95 11.47 0.000 0.00
QCFB QCF Bancorp Inc. 22.250 31.73 12.36 15.24 117.23 117.23 21.21 0.000 0.00
QCSB Queens County Bancorp Inc. 45.875 510.92 17.38 22.06 216.19 216.19 37.20 1.744 30.05
RARB Raritan Bancorp Inc. 21.000 50.09 13.46 15.33 167.60 170.73 12.86 2.286 30.42
RCSB RCSB Financial Inc. 47.625 694.90 21.65 19.13 222.34 227.87 16.93 1.260 18.07
REDF RedFed Bancorp Inc. 16.250 116.41 12.70 180.56 156.70 156.85 12.81 0.000 0.00
RELI Reliance Bancshares Inc. 8.188 20.70 29.24 NA 92.10 NA 44.21 0.000 NA
RELY Reliance Bancorp Inc. 28.750 251.95 15.63 25.44 163.72 233.55 13.16 2.226 49.12
RIVR River Valley Bancorp 15.500 18.45 12.50 NA 107.86 109.54 13.34 0.000 NA
ROSE TR Financial Corp. 23.000 402.92 13.07 13.07 180.11 180.11 11.91 2.261 21.59
RSLN Roslyn Bancorp Inc. 21.875 954.68 NA NA 155.36 156.14 33.50 0.914 NA
RVSB Riverview Savings Bank (MHC) 22.188 53.61 17.89 26.10 214.17 236.04 23.89 1.082 24.06
SBCN Suburban Bancorporation Inc. 20.750 30.60 16.21 28.42 115.15 115.15 13.79 2.892 82.19
SBFL SB of the Finger Lakes (MHC) 17.250 30.79 43.13 215.63 153.06 153.06 14.47 2.319 500.00
SBOS Boston Bancorp (The) NA NA NA NA NA NA NA NA 10.89
SCBS Southern Community Bancshares 15.250 17.34 19.06 NA 112.63 112.63 24.74 1.967 NA
SCCB S. Carolina Community Bancshrs 19.000 13.38 26.39 35.19 111.05 111.05 28.83 3.158 111.11
SECP Security Capital Corporation 95.250 876.58 16.42 21.90 160.98 160.98 24.04 1.260 18.97
SFED SFS Bancorp Inc. 18.250 22.56 24.01 28.52 105.74 105.74 13.74 1.534 28.13
SFFC StateFed Financial Corporation 19.000 14.89 13.57 17.59 100.00 100.00 17.60 2.105 37.04
SFIN Statewide Financial Corp. 18.750 89.16 14.65 25.34 141.94 142.26 13.21 2.133 40.54
SFNB Security First Network Bank 8.125 68.52 NM NM 214.38 217.83 86.07 0.000 0.00
SFSB SuburbFed Financial Corp. 26.875 33.89 13.71 27.71 126.59 127.13 8.31 1.191 32.99
SFSL Security First Corp. 22.000 110.07 14.10 18.80 185.19 188.52 17.34 2.182 37.61
SGVB SGV Bancorp Inc. 14.250 33.38 27.40 61.96 114.83 116.90 8.35 0.000 0.00
SHEN First Shenango Bancorp Inc. 27.500 56.73 12.50 18.71 132.28 132.28 14.15 2.182 32.65
SISB SIS Bancorp Inc. 27.813 156.22 13.91 8.30 152.57 152.57 11.22 1.726 3.58
SKAN Skaneateles Bancorp Inc. 21.625 20.59 12.87 13.77 124.21 128.41 8.53 1.850 20.38
SKBO First Carnegie Deposit (MHC) 14.125 32.49 NA NA NA NA NA 0.000 NA
SMBC Southern Missouri Bancorp Inc. 17.250 28.25 16.59 23.96 108.83 108.83 17.05 2.899 69.44
SMFC Sho-Me Financial Corp. 37.500 56.21 14.88 22.59 178.66 178.66 18.71 0.000 0.00
SOBI Sobieski Bancorp Inc. 15.000 11.39 20.83 51.72 85.62 85.62 14.41 1.867 24.14
SOPN First Savings Bancorp Inc. 22.125 81.79 19.07 23.79 122.64 122.64 30.17 3.616 84.95
SOSA Somerset Savings Bank 2.750 45.79 11.46 14.47 148.65 148.65 8.77 0.000 0.00
SPBC St. Paul Bancorp Inc. 33.125 750.09 16.56 26.93 193.04 193.60 16.87 1.449 31.87
SRN Southern Banc Company Inc. 15.625 19.22 32.55 67.93 108.36 109.50 18.31 2.240 228.26
SSB Scotland Bancorp Inc 15.875 29.21 23.35 NA 115.54 115.54 42.38 1.890 NA
SSFC South Street Financial Corp. 17.000 76.44 25.00 NA 116.12 116.12 32.01 2.353 NA
SSM Stone Street Bancorp Inc. 21.125 38.55 18.21 NA 101.95 101.95 36.55 2.130 NA
STFR St. Francis Capital Corp. 36.000 193.90 16.07 23.68 150.69 171.27 12.28 1.333 28.95
STND Standard Financial Inc. 24.875 403.08 23.92 35.54 148.60 148.77 16.20 1.608 48.57
STSA Sterling Financial Corp. 19.000 105.32 15.83 135.71 173.04 204.08 6.76 0.000 0.00
SVRN Sovereign Bancorp Inc. 15.938 1,112.98 33.20 26.13 241.48 329.30 10.82 0.502 11.89
SWBI Southwest Bancshares 20.500 54.10 14.24 20.92 134.96 134.96 14.56 3.707 75.51
SWCB Sandwich Co-operative Bank 31.500 60.04 14.86 14.45 153.28 160.80 12.63 3.810 50.46
SZB SouthFirst Bancshares Inc. 16.375 13.87 29.24 NM 103.51 103.51 14.47 3.053 NM
TBK Tolland Bank 19.000 22.28 12.84 14.62 139.40 143.83 9.39 1.053 6.15
THR Three Rivers Financial Corp. 16.000 13.18 17.39 25.40 105.06 105.47 14.45 2.250 52.38
THRD TF Financial Corporation 20.250 82.77 17.46 25.63 109.40 125.54 12.84 1.975 43.04
TPNZ Tappan Zee Financial Inc. 16.688 25.60 21.96 28.28 120.58 120.58 21.01 1.198 33.90
TRIC Tri-County Bancorp Inc. 24.000 14.61 15.79 23.76 110.96 110.96 16.99 2.500 39.60
TSBS Peoples Bancorp Inc. (MHC) 21.000 189.78 23.86 24.42 181.98 199.05 30.30 1.667 40.70
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TSH Teche Holding Co. 17.500 60.16 12.15 21.34 114.90 114.90 15.29 2.857 60.98
TWIN Twin City Bancorp 20.375 17.39 16.98 28.70 128.79 128.79 16.64 3.141 90.14
UBMT United Financial Corp. 23.000 28.14 19.17 24.21 115.35 115.35 26.12 4.174 95.79
UFRM United Federal Savings Bank 12.250 37.56 18.01 68.06 182.84 182.84 13.90 1.959 111.11
USAB USABancshares, Inc. 10.250 6.12 28.47 36.61 123.35 126.54 15.57 0.000 0.00
VABF Virginia Beach Fed. Financial 14.750 73.34 20.49 77.63 177.93 177.93 12.07 1.356 89.47
VFFC Virginia First Financial Corp. 22.875 132.85 15.05 12.71 201.54 208.71 16.25 0.437 5.56
WAMU Washington Mutual Inc. 63.781 7,541.97 17.15 66.44 326.58 346.26 16.38 1.631 97.92
WAYN Wayne Savings & Loan Co. (MHC) 17.500 39.34 23.03 54.69 170.23 170.23 15.60 3.543 189.59
WBST Webster Financial Corporation 46.000 551.15 NM 25.70 193.93 230.46 9.85 1.739 39.11
WCBI Westco Bancorp 26.000 66.41 16.67 21.49 137.64 137.64 21.43 2.308 44.63
WCFB Webster City Federal SB (MHC) 16.125 33.86 23.71 34.31 154.31 154.31 36.35 4.961 170.21
WEFC Wells Financial Corp. 15.000 29.54 12.93 23.08 105.63 105.63 15.04 0.000 0.00
WEHO Westwood Homestead Fin. Corp. 14.500 41.23 25.89 NA 102.47 102.47 31.73 1.931 NA
WES Westcorp 18.688 486.15 15.57 16.39 152.06 152.43 14.27 2.140 34.67
WFCO Winton Financial Corp. 13.125 26.07 8.20 12.50 118.67 121.42 8.49 3.505 40.95
WFSG Wilshire Financial Services 18.250 138.15 11.70 NA 215.21 215.21 12.58 0.000 NA
WFSL Washington Federal Inc. 26.063 1,237.00 11.64 13.30 177.78 194.65 21.47 3.530 44.76
WHGB WHG Bancshares Corp. 15.000 21.93 26.79 NA 107.14 107.14 23.45 1.333 NA
WOFC Western Ohio Financial Corp. 21.500 49.87 38.39 44.79 92.63 98.26 12.43 4.651 208.33
WRNB Warren Bancorp Inc. 17.250 64.63 6.96 9.13 174.60 174.60 17.62 3.014 28.57
WSB Washington Savings Bank, FSB 6.250 26.55 15.63 22.32 123.76 123.76 10.28 1.600 35.71
WSFS WSFS Financial Corporation 14.000 175.41 10.94 10.85 231.40 233.72 11.87 0.000 0.00
WSTR WesterFed Financial Corp. 22.625 125.60 22.63 27.93 122.70 155.28 13.47 1.856 51.60
WVFC WVS Financial Corporation 26.063 45.54 12.53 15.99 127.14 127.14 16.18 3.069 141.10
WWFC Westwood Financial Corporation 21.500 13.87 17.34 NA 139.43 157.28 12.85 0.930 NA
WYNE Wayne Bancorp Inc. 19.750 42.59 19.75 NA 119.19 119.19 17.35 1.013 NA
YFCB Yonkers Financial Corporation 15.500 49.29 14.90 NA 113.30 113.30 17.33 1.290 NA
YFED York Financial Corp. 20.250 141.17 12.05 21.09 144.75 144.75 12.20 2.963 59.67
Count 416 389 324 401 399 402 337 281
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Illinois
ABCL Alliance Bancorp Inc. 30.125 160.53 23.54 30.13 131.38 133.12 12.24 2.158 10.00
AVND Avondale Financial Corp. 14.000 49.35 NM NM 94.09 94.09 7.77 0.000 0.00
BFFC Big Foot Financial Corp. 16.250 40.83 25.39 NA 113.24 113.24 19.24 0.000 NA
CBCI Calumet Bancorp Inc. 38.250 80.87 13.28 17.55 108.57 108.57 17.31 0.000 0.00
CBSB Charter Financial Inc. 17.750 74.91 17.07 21.91 134.27 153.02 18.97 1.803 32.10
CBK Citizens First Financial Corp. 15.750 44.08 28.13 NA 98.99 98.99 16.23 0.000 NA
CSBF CSB Financial Group Inc. 12.000 11.30 50.00 54.55 93.90 99.59 23.55 0.000 0.00
EGLB Eagle BancGroup Inc. 16.000 20.28 40.00 NA 98.28 98.28 11.89 0.000 NA
FBCI Fidelity Bancorp Inc. 19.375 54.09 13.45 22.27 109.22 109.53 11.13 1.652 29.89
FFBI First Financial Bancorp Inc. 18.750 7.79 12.67 NM 107.14 107.14 8.36 0.000 0.00
FMBD First Mutual Bancorp Inc. 15.500 54.35 193.75 119.23 93.37 121.38 13.66 2.065 238.46
GTPS Great American Bancorp 16.500 29.04 41.25 103.13 89.87 89.87 21.06 2.424 250.00
HMLK Hemlock Federal Financial Corp 14.375 29.85 NA NA NA NA NA 0.000 NA
HBEI Home Bancorp of Elgin Inc. 18.750 131.42 33.48 NA 130.30 130.30 36.64 2.133 NA
HMCI HomeCorp Inc. 14.625 24.76 17.41 73.13 116.81 116.81 7.36 0.000 0.00
JXSB Jacksonville Savings Bk (MHC) 17.000 21.63 21.25 53.13 128.21 128.21 13.20 2.353 125.00
KNK Kankakee Bancorp Inc. 29.625 42.07 14.52 20.72 115.09 122.93 12.29 1.620 29.37
MAFB MAF Bancorp Inc. 29.125 452.32 12.77 18.67 178.57 205.69 14.08 0.961 14.96
NBSI North Bancshares Inc. 20.000 20.70 22.73 39.22 118.06 118.06 17.25 2.400 82.35
PFED Park Bancorp Inc. 16.500 40.12 21.71 NA 103.97 103.97 22.54 0.000 NA
PSFI PS Financial Inc. 14.500 31.64 18.13 NA 97.45 97.45 42.13 2.207 NA
SWBI Southwest Bancshares 20.500 54.10 14.24 20.92 134.96 134.96 14.56 3.707 75.51
SPBC St. Paul Bancorp Inc. 33.125 750.09 16.56 26.93 193.04 193.60 16.87 1.449 31.87
STND Standard Financial Inc. 24.875 403.08 23.92 35.54 148.60 148.77 16.20 1.608 48.57
SFSB SuburbFed Financial Corp. 26.875 33.89 13.71 27.71 126.59 127.13 8.31 1.191 32.99
WCBI Westco Bancorp 26.000 66.41 16.67 21.49 137.64 137.64 21.43 2.308 44.63
Count 26 24 17 25 25 25 16 14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Price in Relation to
Current Current ------------------------------------------------- Current LTM
Stock Market Tangible Dividend Dividend
Price Value Earnings LTM EPS Book Value Book Value Assets Yield Payout Ratio
Ticker Short Name ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Comparable Group
CAPS Capital Savings Bancorp Inc. 17.500 33.11 15.09 23.03 160.70 160.70 13.92 1.371 27.63
FBCV 1ST Bancorp 31.250 21.80 10.02 34.34 100.19 102.46 7.98 1.280 42.37
HBFW Home Bancorp 21.250 55.74 16.10 29.93 121.92 121.92 17.01 0.941 28.17
HMCI HomeCorp Inc. 14.625 24.76 17.41 73.13 116.81 116.81 7.36 0.000 0.00
KNK Kankakee Bancorp Inc. 29.625 42.07 14.52 20.72 115.09 122.93 12.29 1.620 29.37
MBLF MBLA Financial Corp. 23.500 30.93 21.76 23.98 109.25 109.25 14.74 1.702 40.82
MFBC MFB Corp. 19.125 33.17 15.94 28.13 97.63 97.63 14.16 1.673 32.35
PFDC Peoples Bancorp 22.500 51.28 12.50 16.79 119.30 119.30 18.11 2.667 44.03
WEFC Wells Financial Corp. 15.000 29.54 12.93 23.08 105.63 105.63 15.04 0.000 0.00
WCBI Westco Bancorp 26.000 66.41 16.67 21.49 137.64 137.64 21.43 2.308 44.63
10 10 10 10 10 10 10 10
Comparable Average 38.88 15.29 29.46 118.42 119.43 14.20 1.36 28.94
Comparable Median 33.14 15.52 23.53 115.95 118.06 14.45 1.50 30.86
All Public Average 179.79 18.24 29.12 144.89 150.81 16.76 2.13 69.21
All Public Median 50.58 16.04 22.92 134.30 140.25 14.86 1.77 35.52
Illinois Average 104.98 29.40 41.54 120.06 123.69 16.97 2.00 74.69
Illinois Median 43.08 19.69 27.71 115.09 118.06 16.20 1.53 31.87
</TABLE>
<PAGE>
Exhibit 7
Standard Conversions - 1996 to Date
Selected Market Data
Market Data as of 7/10/97
<TABLE>
<CAPTION>
Price to Pro-Forma
Pro-Forma ------------------------------------------
Gross Conversion Total Pro-Forma Pro-Forma Pro-Forma Adjusted
IPO Price Proceeds Assets Equity Book Value Tang. Book Earnings Assets
Ticker Short Name IPO Date ($) ($000) ($000) ($000) (%) (%) (x) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FBNW FirstBank Corp. 07/02/97 10.000 19,838 133,194 27,578 71.9 71.9 19.2 13.0
CFBC Community First Banking Co. 07/01/97 20.000 48,271 352,532 66,357 72.7 72.7 36.1 12.0
---------------------------------------------------------------------------------------------------------------------------
Q3 '97 Average 72.3 72.3 27.7 12.5
Median 72.3 72.3 27.7 12.5
---------------------------------------------------------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 05/07/97 10.000 26,450 171,241 36,760 72.0 72.0 29.0 13.4
PSFC Peoples-Sidney Financial Corp. 04/28/97 10.000 17,854 86,882 25,061 71.2 71.2 11.5 17.0
NSBC NewSouth Bancorp, Inc. 04/08/97 15.000 43,643 194,139 55,487 78.7 78.7 22.1 18.4
HMLK Hemlock Federal Financial Corp 04/02/97 10.000 20,763 146,595 28,989 71.6 71.6 37.5 12.4
GSLA GS Financial Corp. 04/01/97 10.000 34,385 86,521 53,934 63.8 63.8 38.7 28.4
---------------------------------------------------------------------------------------------------------------------------
Q2 '97 Average 71.5 71.4 27.8 17.9
Median 71.6 71.6 29.0 17.0
---------------------------------------------------------------------------------------------------------------------------
MRKF Market Financial Corporation 03/27/97 10.000 13,357 45,547 18,795 71.1 71.1 26.2 22.7
EFBC Empire Federal Bancorp Inc. 01/27/97 10.000 25,921 86,810 38,067 68.1 68.1 21.5 23.0
FAB FirstFed America Bancorp Inc. 01/15/97 10.000 87,126 723,778 120,969 72.0 72.0 13.6 10.7
RSLN Roslyn Bancorp Inc. 01/13/97 10.000 423,714 1,596,744 588,624 72.0 72.0 9.3 21.0
AFBC Advance Financial Bancorp 01/02/97 10.000 10,845 91,852 15,256 71.1 71.1 16.8 10.6
---------------------------------------------------------------------------------------------------------------------------
Q1 '97 Average 70.9 70.9 17.5 17.6
Median 71.1 71.1 16.8 21.0
---------------------------------------------------------------------------------------------------------------------------
1997 YTD Average 71.4 71.3 23.5 16.9
Median 71.8 71.8 21.8 15.2
---------------------------------------------------------------------------------------------------------------------------
HCFC Home City Financial Corp. 12/30/96 10.000 9,522 55,728 13,373 71.2 71.2 13.7 14.6
CENB Century Bancorp Inc. 12/23/96 50.000 20,367 81,304 28,246 72.1 72.1 18.9 20.0
SCBS Southern Community Bancshares 12/23/96 10.000 11,374 64,381 15,290 74.4 74.4 14.5 15.0
BFFC Big Foot Financial Corp. 12/20/96 10.000 25,128 194,624 34,576 72.7 72.7 33.1 11.4
RIVR River Valley Bancorp 12/20/96 10.000 11,903 86,604 16,314 73.0 73.0 15.2 12.1
PSFI PS Financial Inc. 11/27/96 10.000 21,821 53,520 30,338 71.9 71.9 17.2 29.0
CFNC Carolina Fincorp Inc. 11/25/96 10.000 18,515 94,110 24,052 77.0 77.0 17.2 16.4
DCBI Delphos Citizens Bancorp Inc. 11/21/96 10.000 20,387 88,022 28,226 72.2 72.2 14.6 18.8
FTNB Fulton Bancorp Inc. 10/18/96 10.000 17,193 85,496 23,705 72.5 72.5 14.6 16.7
SSFC South Street Financial Corp. 10/03/96 10.000 44,965 166,978 58,917 76.3 76.3 26.1 21.2
AFED AFSALA Bancorp Inc. 10/01/96 10.000 14,548 133,046 20,281 71.7 71.7 13.7 9.9
---------------------------------------------------------------------------------------------------------------------------
Q4 '96 Average 73.2 73.2 18.1 16.8
Median 72.5 72.5 15.2 16.4
---------------------------------------------------------------------------------------------------------------------------
CBES CBES Bancorp Inc. 09/30/96 10.000 10,250 86,168 16,788 61.1 61.1 13.2 10.6
WEHO Westwood Homestead Fin. Corp. 09/30/96 10.000 28,434 96,638 38,512 73.8 73.8 NA 22.7
HBEI Home Bancorp of Elgin Inc. 09/27/96 10.000 70,093 304,520 96,498 72.6 72.6 24.9 18.7
PFFC Peoples Financial Corp. 09/13/96 10.000 14,910 78,078 23,187 64.3 64.3 28.6 16.0
PFED Park Bancorp Inc. 08/12/96 10.000 27,014 158,939 40,524 66.7 66.7 26.2 14.5
ANA Acadiana Bancshares Inc. 07/16/96 12.000 32,775 225,248 45,564 71.9 71.9 NA 12.7
PWBK Pennwood Bancorp Inc. 07/15/96 10.000 6,101 41,592 9,034 67.5 67.5 14.5 12.8
MBSP Mitchell Bancorp Inc. 07/12/96 10.000 9,799 28,222 13,991 70.0 70.0 NA 25.8
OCFC Ocean Financial Corp. 07/03/96 20.000 167,762 1,036,445 235,685 71.2 71.2 13.4 13.9
HWEN Home Financial Bancorp 07/02/96 10.000 5,059 33,462 7,436 68.0 68.0 11.4 13.1
EGLB Eagle BancGroup Inc. 07/01/96 10.000 13,027 150,974 22,288 58.4 58.4 100.1 7.9
FLKY First Lancaster Bancshares 07/01/96 10.000 9,588 35,361 12,840 74.7 74.7 18.5 21.3
---------------------------------------------------------------------------------------------------------------------------
Q3 '96 Average 68.4 68.4 27.9 15.8
Median 69.0 69.0 18.5 14.2
---------------------------------------------------------------------------------------------------------------------------
PROV Provident Financial Holdings 06/28/96 10.000 51,252 570,691 82,149 62.4 62.4 19.9 8.2
PRBC Prestige Bancorp Inc. 06/27/96 10.000 9,630 91,841 15,172 63.5 63.5 28.8 9.5
WYNE Wayne Bancorp Inc. 06/27/96 10.000 22,314 207,997 35,926 62.1 62.1 18.9 9.7
DIME Dime Community Bancorp Inc. 06/26/96 10.000 145,475 665,187 204,706 71.1 71.1 15.5 17.9
MECH Mechanics Savings Bank 06/26/96 10.000 52,900 662,482 73,516 72.0 72.0 NA 7.4
CNSB CNS Bancorp Inc. 06/12/96 10.000 16,531 85,390 23,176 71.3 71.3 24.4 16.2
LXMO Lexington B&L Financial Corp. 06/06/96 10.000 12,650 49,981 17,802 71.1 71.1 20.8 20.2
FFBH First Federal Bancshares of AR 05/03/96 10.000 51,538 454,479 79,239 65.0 65.0 10.5 10.2
CBK Citizens First Financial Corp. 05/01/96 10.000 28,175 227,872 37,414 75.3 75.3 15.7 11.0
RELI Reliance Bancshares Inc. 04/19/96 8.000 20,499 32,260 27,465 74.6 74.6 32.3 38.9
CATB Catskill Financial Corp. 04/18/96 10.000 56,868 230,102 76,844 74.0 74.0 18.6 19.8
YFCB Yonkers Financial Corporation 04/18/96 10.000 35,708 208,283 46,227 77.2 77.2 15.9 14.6
GSFC Green Street Financial Corp. 04/04/96 10.000 42,981 151,028 58,793 73.1 73.1 14.6 22.2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price to Pro-Forma
Pro-Forma ------------------------------------------
Gross Conversion Total Pro-Forma Pro-Forma Pro-Forma Adjusted
IPO Price Proceeds Assets Equity Book Value Tang. Book Earnings Assets
Ticker Short Name IPO Date ($) ($000) ($000) ($000) (%) (%) (x) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFDF FFD Financial Corp. 04/03/96 10.000 14,548 58,955 20,239 71.9 71.9 25.4 19.8
AMFC AMB Financial Corp. 04/01/96 10.000 11,241 68,851 15,421 72.9 72.9 17.9 14.0
FBER 1st Bergen Bancorp 04/01/96 10.000 31,740 223,167 41,156 77.1 77.1 21.0 12.5
LONF London Financial Corporation 04/01/96 10.000 5,290 34,152 7,515 70.4 70.4 24.5 13.4
PHFC Pittsburgh Home Financial Corp 04/01/96 10.000 21,821 157,570 29,090 75.0 75.0 17.0 12.2
SSB Scotland Bancorp Inc 04/01/96 10.000 18,400 57,718 23,853 77.1 77.1 16.9 24.2
SSM Stone Street Bancorp Inc. 04/01/96 15.000 27,376 84,996 35,445 77.2 77.2 19.1 24.4
WHGB WHG Bancshares Corp. 04/01/96 10.000 16,201 85,027 22,144 73.2 73.2 15.2 16.0
---------------------------------------------------------------------------------------------------------------------------
Q2 '96 Average 71.8 71.8 19.6 16.3
Median 72.9 72.9 18.8 14.6
---------------------------------------------------------------------------------------------------------------------------
CRZY Crazy Woman Creek Bancorp 03/29/96 10.000 10,580 37,510 14,752 71.7 71.7 15.8 22.0
PFFB PFF Bancorp Inc. 03/29/96 10.000 198,375 1,899,412 279,603 70.9 70.9 25.0 9.5
FCB Falmouth Co-Operative Bank 03/28/96 10.000 14,548 73,735 21,169 68.7 68.7 17.6 16.5
CFTP Community Federal Bancorp 03/26/96 10.000 46,288 162,042 63,020 73.4 73.4 13.6 22.2
GAF GA Financial Inc. 03/26/96 10.000 89,000 476,259 122,643 72.6 72.6 13.5 15.7
BYFC Broadway Financial Corp. 01/09/96 10.000 8,927 102,512 12,768 69.9 69.9 13.0 8.0
LFBI Little Falls Bancorp Inc. 01/05/96 10.000 30,418 196,394 41,370 73.5 73.5 36.4 13.4
---------------------------------------------------------------------------------------------------------------------------
Q1 '96 Average 71.5 71.6 19.3 15.3
Median 71.7 71.7 15.8 15.7
---------------------------------------------------------------------------------------------------------------------------
1996 YTD Average 71.2 71.3 20.8 16.2
Median 72.0 72.0 17.2 15.0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1/1/96 Average 71.3 71.3 21.3 16.3
to ---------------------------------------------------------------------------------------------------------------------------
7/10/97 Median 71.9 71.9 17.9 15.0
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Percent Change from IPO Current Price to
------------------------------------ ---------------------------------
After After After After Tangible Current
1 Day 1 Week 1 Month 3 Months LTM EPS Book Value Book Value Stock Price
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) 7/10/97
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FBNW FirstBank Corp. 58.13% 55.63% NA NA NA NA NA 15.500
CFBC Community First Banking Co. 59.38% 65.00% NA NA NA NA NA 33.500
------------------------------------------------------------------------------------------------------
Q3 '97 Average 58.75% 60.32% 0.00% 0.00% -- -- --
Median 58.75% 60.32% 0.00% 0.00% -- -- --
------------------------------------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 26.25% 27.50% 28.75% NA NA NA NA 13.125
PSFC Peoples-Sidney Financial Corp. 25.63% 28.75% 32.50% NA NA NA NA 14.250
NSBC NewSouth Bancorp, Inc. 35.00% 46.67% 59.17% 70.00% NA NA NA 28.000
HMLK Hemlock Federal Financial Corp 28.75% 28.75% 30.00% 40.00% NA NA NA 14.375
GSLA GS Financial Corp. 33.75% 37.50% 40.00% 51.25% NA NA NA 14.875
------------------------------------------------------------------------------------------------------
Q2 '97 Average 29.88% 33.83% 38.08% 53.75% -- -- --
Median 28.75% 28.75% 32.50% 51.25% -- -- --
------------------------------------------------------------------------------------------------------
MRKF Market Financial Corporation 29.38% 22.50% 26.25% 37.50% NA 90.82 90.82 13.250
EFBC Empire Federal Bancorp Inc. 32.50% 35.00% 37.50% 31.25% NA 93.65 93.65 14.375
FAB FirstFed America Bancorp Inc. 36.25% 41.25% 48.75% 38.75% NA 126.51 126.51 17.750
RSLN Roslyn Bancorp Inc. 50.00% 59.38% 60.00% 58.75% NA 155.36 156.14 21.875
AFBC Advance Financial Bancorp 28.75% 29.38% 40.00% 40.00% NA 101.69 101.69 15.000
------------------------------------------------------------------------------------------------------
Q1 '97 Average 35.38% 37.50% 42.50% 41.25% -- 113.61 113.76
Median 32.50% 35.00% 40.00% 38.75% -- 101.69 101.69
------------------------------------------------------------------------------------------------------
1997 YTD Average 36.98% 39.78% 40.29% 45.94% -- 113.61 113.76
Median 33.13% 36.25% 38.75% 40.00% -- 101.69 101.69
------------------------------------------------------------------------------------------------------
HCFC Home City Financial Corp. NA 25.00% 35.00% 35.00% NA 91.12 91.12 14.625
CENB Century Bancorp Inc. 25.25% 32.00% 30.25% 36.00% NA 97.00 97.00 71.250
SCBS Southern Community Bancshares 30.00% 37.50% 35.00% 40.00% NA 112.63 112.63 15.250
BFFC Big Foot Financial Corp. 23.13% 25.00% 38.75% 41.25% NA 113.24 113.24 16.250
RIVR River Valley Bancorp 36.88% 38.75% 50.00% 45.00% NA 107.86 109.54 15.500
PSFI PS Financial Inc. 16.41% 16.88% 25.00% 37.50% NA 97.45 97.45 14.500
CFNC Carolina Fincorp Inc. 30.00% 30.00% 36.25% 47.50% NA 109.63 109.63 15.250
DCBI Delphos Citizens Bancorp Inc. 21.25% 21.25% 20.63% 41.25% NA 101.58 101.58 15.125
FTNB Fulton Bancorp Inc. 25.00% 28.75% 47.50% 65.00% NA 139.94 139.94 20.250
SSFC South Street Financial Corp. NA 25.00% 23.75% 41.25% NA 116.12 116.12 17.000
AFED AFSALA Bancorp Inc. 13.75% 13.13% 15.63% 20.00% NA 99.78 100.03 15.625
------------------------------------------------------------------------------------------------------
Q4 '96 Average 24.63% 26.66% 32.52% 40.89% -- 107.85 108.03
Median 25.00% 25.00% 35.00% 41.25% -- 107.9 109.5
------------------------------------------------------------------------------------------------------
CBES CBES Bancorp Inc. 26.25% 34.38% 32.50% 42.50% NA 104.65 104.65 17.875
WEHO Westwood Homestead Fin. Corp. 7.50% 6.25% 5.00% 21.25% NA 102.47 102.47 14.500
HBEI Home Bancorp of Elgin Inc. 18.13% 25.00% 26.25% 33.75% NA 130.30 130.30 18.750
PFFC Peoples Financial Corp. 8.75% 15.00% 27.50% 30.00% NA 95.02 95.02 15.375
PFED Park Bancorp Inc. 2.50% 4.38% 5.00% 20.00% NA 103.97 103.97 16.500
ANA Acadiana Bancshares Inc. 0.00% -2.08% 3.13% 15.63% NA 122.75 122.75 20.500
PWBK Pennwood Bancorp Inc. -5.00% -8.75% -3.75% 11.88% NA 96.41 96.41 14.750
MBSP Mitchell Bancorp Inc. NA 6.25% 10.00% 21.25% NA 107.94 107.94 16.375
OCFC Ocean Financial Corp. 6.25% 0.63% 5.00% 18.13% NA 127.29 127.29 34.750
HWEN Home Financial Bancorp 2.50% -1.25% 5.00% 20.00% NA 99.21 99.21 15.000
EGLB Eagle BancGroup Inc. 12.50% 12.50% 11.25% 30.00% NA 98.28 98.28 16.000
FLKY First Lancaster Bancshares 35.00% 33.75% 37.50% 38.75% NA 105.61 105.61 15.250
------------------------------------------------------------------------------------------------------
Q3 '96 Average 12.71% 14.01% 14.94% 25.26% -- 107.83 107.83
Median 7.50% 6.25% 7.50% 21.25% -- 104.31 104.31
------------------------------------------------------------------------------------------------------
PROV Provident Financial Holdings 9.70% 8.10% 1.25% 23.75% NA 110.64 110.64 18.875
PRBC Prestige Bancorp Inc. 3.75% 2.50% -2.50% 22.50% NA 100.09 100.09 16.125
WYNE Wayne Bancorp Inc. 11.25% 13.75% 12.50% 36.25% NA 119.19 119.19 19.750
DIME Dime Community Bancorp Inc. 16.87% 20.00% 18.75% 33.75% NA 132.48 154.37 19.250
MECH Mechanics Savings Bank 15.00% 15.00% 12.50% 45.00% NA 132.76 132.76 19.250
CNSB CNS Bancorp Inc. 10.00% 16.25% 15.00% 30.00% NA 110.32 110.32 16.250
LXMO Lexington B&L Financial Corp. -5.00% -2.50% 1.25% 0.63% NA 106.30 106.30 16.125
FFBH First Federal Bancshares of AR 30.00% 32.50% 36.90% 36.25% NA 124.33 124.33 20.875
CBK Citizens First Financial Corp. 5.00% 0.00% 1.25% -1.25% NA 98.99 98.99 15.750
RELI Reliance Bancshares Inc. 4.69% 3.13% -0.75% 3.13% NA 92.10 NA 8.188
CATB Catskill Financial Corp. 3.75% 6.25% 3.75% 0.00% NA 106.29 106.29 15.625
YFCB Yonkers Financial Corporation -2.50% 1.25% -0.60% -2.50% NA 113.30 113.30 15.500
GSFC Green Street Financial Corp. 28.75% 22.50% 23.10% 30.60% NA 120.39 120.39 17.625
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Percent Change from IPO Current Price to
------------------------------------ ---------------------------------
After After After After Tangible Current
1 Day 1 Week 1 Month 3 Months LTM EPS Book Value Book Value Stock Price
Ticker Short Name (%) (%) (%) (%) (%) (%) (%) 7/10/97
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFDF FFD Financial Corp. 5.00% 5.00% 3.10% 1.25% NA 100.79 100.79 14.625
AMFC AMB Financial Corp. 5.00% 5.00% 5.00% 5.00% NA 103.22 103.22 14.750
FBER 1st Bergen Bancorp 0.00% -5.00% -3.75% -7.50% NA 111.74 111.74 15.375
LONF London Financial Corporation 8.12% 6.25% 1.25% 3.10% NA 100.82 100.82 14.750
PHFC Pittsburgh Home Financial Corp 10.00% 10.00% 6.25% 1.90% NA 113.06 114.39 15.500
SSB Scotland Bancorp Inc 22.50% 25.00% 17.50% 23.75% NA 115.54 115.54 15.875
SSM Stone Street Bancorp Inc. 16.67% 20.00% 18.33% 12.50% NA 101.95 101.95 21.125
WHGB WHG Bancshares Corp. 11.25% 10.60% 12.50% 10.00% NA 107.14 107.14 15.000
------------------------------------------------------------------------------------------------------
Q2 '96 Average 11.66% 11.98% 10.74% 18.12% -- 110.54 112.63
Median 9.70% 8.10% 5.00% 10.00% -- 110.32 110.48
------------------------------------------------------------------------------------------------------
CRZY Crazy Woman Creek Bancorp NA 7.50% 5.00% 1.25% 26.44 95.35 95.35 13.750
PFFB PFF Bancorp Inc. 13.75% 16.25% 16.25% 11.25% 123.33 131.30 132.81 18.500
FCB Falmouth Co-Operative Bank 7.50% 12.50% 7.50% 3.75% 31.73 108.77 108.77 16.500
CFTP Community Federal Bancorp 26.25% 28.75% 26.25% 33.75% 26.89 110.04 110.04 17.750
GAF GA Financial Inc. 13.75% 15.00% 10.00% 10.00% 22.81 122.16 123.48 18.250
BYFC Broadway Financial Corp. 3.75% 2.50% 2.50% 3.75% NM 75.33 75.33 10.750
LFBI Little Falls Bancorp Inc. 13.13% 13.75% 10.00% 8.10% 55.36 108.47 117.87 15.500
------------------------------------------------------------------------------------------------------
Q1 '96 Average 13.02% 13.75% 11.07% 10.26% -- 107.35 109.09
Median 13.44% 13.75% 10.00% 8.10% 29.31 108.77 110.04
------------------------------------------------------------------------------------------------------
1996 YTD Average 14.86% 16.25% 17.00% 24.10% 47.76 108.88 109.97
Median 11.25% 13.75% 12.50% 21.25% 29.31 107.86 108.36
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
1/1/96 Average 19.77% 21.20% 21.16% 27.28% 47.76 109.31 110.31
to ------------------------------------------------------------------------------------------------------
7/10/97 Median 15.00% 16.25% 16.25% 30.00% 29.31 107.50 107.94
------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 8
First Security Savings Bank
Pro-Forma Analysis Sheet - Twelve Months Ended
30-Apr-97
Includes SOP 93-6
Name of Association: First Security Savings Bank
Date of Letter to Association: 7/18/97
Date of Market Prices: 7/10/97
<TABLE>
<CAPTION>
Comparable All Publicly Recent Standard
Companies State Thrifts Traded Thrifts Conversion Thrifts
First Security -------------- -------------- -------------- ------------------
Symbols Value Mean Median Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio P/E
- --------------------
Last Twelve Months N/A
At Minimum of Range 10.87
At Midpoint of Range 12.20 29.46 23.53 41.54 27.71 29.12 22.92 23.50 21.80
At Maximum of Range 13.33
At SuperMaximum of Range 14.93
Price-Book Ratio P/B
- ----------------
Last Twelve Months N/A
At Minimum of Range 61.65%
At Midpoint of Range 66.27% 118.42% 115.95% 120.06% 115.09% 44.89% 134.30% 71.40% 71.80%
At Maximum of Range 70.13%
At SuperMaximum of Range 73.91%
Price-Tangible Book Ratio P/TB
- -------------------------
Last Twelve Months N/A
At Minimum of Range 61.35%
At Midpoint of Range 65.96% 119.43% 118.06% 123.69% 118.06% 150.81% 140.25% 71.30% 71.80%
At Maximum of Range 69.83%
At SuperMaximum of Range 73.64%
Price-Assets Ratio P/A
- ------------------
Last Twelve Months N/A
At Minimum of Range 13.32%
At Midpoint of Range 15.36% 14.20% 14.45% 16.97% 16.20% 16.76% 14.86% 16.90% 15.20%
At Maximum of Range 17.32%
At SuperMaximum of Range 19.48%
Valuation Parameters
- --------------------
Prior Twelve Mos. Earning Base Y
Period Ended April 30, 1997 $ 223 (1)
Pre-Conversion Book Value B
As of April 30, 1997 $29,950
Pre-Conversion Assets A
As of April 30, 1997 $260,002
Return on Money R 3.54% (2)
Conversion Expenses $ 1,011
X 2.20% (3)
Proceeds Not Invested $ 5,520 (4)
Estimated ESOP Borrowings $3,680
ESOP Purchases E 8.00% (5)
Cost of ESOP Borrowings $368 (5)
Cost of ESOP Borrowings S 0.00% (5)
Amort of ESOP Borrowings T 10 Years
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 1,840 (6)
MRP Purchases M 4.00%
MRP Expense $ 368
Foundation Amount $ --
Foundation Amount F 0.00%
Tax Rate TAX 40.00%
Percentage Sold PCT 100.00%
Tax Benefit Z $0
Earnings Multiplier 1.00
</TABLE>
- --------------
(1) Net income for the twelve months ended April 30, 1997 and is unadjusted.
(2) Net Return assumes a reinvestment rate of 5.90 percent (the 1 year Treasury
at April 30, 1997), and a tax rate of 40%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP.
(5) Assumes ESOP is amortized straight line over ten years.
(6) Assumes MRP is amortized straight line over five years.
<PAGE>
Pro Forma Calculation
Calculation of Estimated Value (V) at Midpoint
Value
3. V= P/E*Y = $46,000,000
------
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $46,000,000
----------
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $46,000,000
-------
1-P/A*PCT*(1-X-E-M-F)
<TABLE>
<CAPTION>
Full
Total Price per Conversion Exchange Conversion Gross Exchange Exchange
Conclusion Shares Share Value Shares Percent Shares Percent Proceeds Value Ratio
- ---------- ------ ----- ----- ------ ------- ------ ------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Appraised Value - Midpoint 4,600 $10 $46,000 0 0.00% 4,600 100.00% $46,000 $0 0.000
Appraised Value - Minimum 3,910 $10 $39,100 0 0.00% 3,910 100.00% $39,100 $0 0.000
Appraised Value - Maximum 5,290 $10 $52,900 0 0.00% 5,290 100.00% $52,900 $0 0.000
Appraised Value - SuperMaximum * 6,084 $10 $60,840 0 0.00% 6,084 100.00% $60,840 $0 0.000
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
</TABLE>
<PAGE>
Proforma Effect of Conversion Proceeds
As of April 30, 1997
(Dollars in Thousands)
<TABLE>
<CAPTION>
Minimum Midpoint Maximum SuperMax
------- -------- ------- --------
<S> <C> <C> <C> <C>
Conversion Proceeds
- -------------------
Total Shares Offered 3,910 4,600 5,290 6,084
Conversion Shares Offered 3,910 4,600 5,290 6,084
Price Per Share $10 $10 $10 $10
--- --- --- ---
Gross Proceeds $39,100 $46,000 $52,900 $60,840
Less: Est. Conversion Expenses $948 $1,011 $1,075 $1,148
---- ------ ------ ------
Net Proceeds $38,152 $44,989 $51,825 $59,692
Estimated Income from Proceeds
- ------------------------------
Net Conversion Proceeds $38,152 $44,989 $51,825 $59,692
Less: ESOP Adjustment(3) $3,128 $3,680 $4,232 $4,867
Less: MRP Adjustment (3) $1,564 $1,840 $2,116 $2,434
------ ------ ------ ------
Net Proceeds Reinvested $33,460 $39,469 $45,477 $52,391
Estimated Incremental Rate of Return 3.54% 3.54% 3.54% 3.54%
---- ---- ---- ----
Estimated Incremental Return $1,184 $1,397 $1,610 $1,855
Less: Cost of ESOP(4) $0 $0 $0 $0
Less: Amortization of ESOP(7) $188 $221 $254 $292
---- ---- ---- ----
Less: MRP Adjustment(7) $188 $221 $254 $292
Pro-forma Net Income $808 $955 $1,102 $1,271
Earnings Before Conversion $223 $223 $223 $223
---- ---- ---- ----
Earnings Excluding Adjustment $1,031 $1,178 $1,325 $1,494
Earnings Adjustment(6) $2,276 $2,276 $2,276 $2,276
------ ------ ------ ------
Earnings After Conversion $3,307 $3,454 $3,601 $3,770
Pro-forma Net Worth
- -------------------
Net Worth at April 30, 1997 $ 29,950 $ 29,950 $ 29,950 $ 29,950
Net Conversion Proceeds 38,152 44,989 51,825 59,692
Plus: MHC Adjustment(7) 0 0 0 0
Less: ESOP Adjustment(1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment(2) (1,564) (1,840) (2,116) (2,434)
------ ------ ------ ------
Pro-forma Net Worth $63,410 $69,419 $75,427 $82,341
Pro-forma Tangible Net Worth
- ----------------------------
Pro-forma Net Worth $63,410 $69,419 $75,427 $82,341
Less: Intangible(5) $332 $332 $332 $332
---- ---- ---- ----
Pro-forma Tangible Net Worth $63,742 $69,751 $75,759 $82,673
Pro-forma Assets
- ----------------
Total Assets at April 30, 1997 $260,002 $260,002 $260,002 $260,002
Net Conversion Proceeds $38,152 $44,989 $51,825 $59,692
Plus: MHC Adjustment(7) 0 0 0 0
Less: ESOP Adjustment(1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment(2) (1,564) (1,840) (2,116) (2,434)
------ ------ ------ ------
Pro-forma Assets Excluding Adjustment 293,462 299,471 305,479 312,393
Plus: Adjustment(6) 0 0 0 0
------- ------- ------- -------
Pro-forma Total Assets $293,462 $299,471 $305,479 $312,393
Stockholder's Equity Per Share
- ------------------------------
Net Worth at April 30, 1997 $7.66 $6.51 $5.66 $4.92
Estimated Net Proceeds $9.76 $9.78 $9.80 $9.81
Plus: MHC Adjustment $0.00 $0.00 $0.00 $0.00
Less: ESOP Stock $(0.80) $(0.80) $(0.80) $(0.80)
Less: MRP Stock $(0.40) $(0.40) $(0.40) $(0.40)
------ ------ ------ ------
Pro-forma Net Worth Per Share $16.22 $15.09 $14.26 $13.53
Less: Intangible $0.08 $0.07 $0.06 $0.05
----- ----- ----- -----
Pro-forma Tangible Net Worth Per Share $16.30 $15.16 $14.32 $13.58
Net Earnings Per Share
- ----------------------
Historical Earnings Per Share(8) $0.06 $0.05 $0.05 $0.04
Incremental return Per Share(8) $0.33 $0.33 $0.33 $0.33
ESOP Adjustment Per Share(8) ($0.05) ($0.05) ($0.05) ($0.05)
MRP Adjustment Per Share(8) ($0.05) ($0.05) ($0.05) ($0.05)
Normalizing Adjustment Per Share $0.63 $0.54 $0.47 $0.40
----- ----- ----- -----
Proforma Earnings Per Share(8) $0.92 $0.82 $0.75 $0.67
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Shares Utilized
- ---------------
Shares Utilized 3,613 4,250 4,888 5,621
Pro-forma Ratios
- ----------------
Price/EPS without Adjustment 10.87 12.20 13.33 14.93
Price/EPS with Adjustment 10.87 12.20 13.33 14.93
Price/Book Value per Share 61.65% 66.27% 70.13% 73.91%
Price/Tangible Book Value 61.35% 65.96% 69.83% 73.64%
Market Value/Assets 13.32% 15.36% 17.32% 19.48%
Total Shares Offered 3,910 4,600 5,290 6,084
Price Per Share $10 $10 $10 $10
--- --- --- ---
Gross Proceeds 39,100 46,000 52,900 60,840
Estimated Insider Purchases -1,200 -1,200 -1,200 -1,200
ESOP Purchases -3,128 -3,680 -4,232 -4,867
----- ----- ----- -----
Proceeds to Base Fee On 34,772 41,120 47,468 54,773
Underwriters Percentage 1.00% 1.00% 1.00% 1.00%
------ ------ ------ ------
Underwriters Fee 348 411 475 548
Advisory Fee 0 0 0 0
---- ---- ---- ----
Total Underwriters Fee 348 411 475 548
All Other Expenses 600 600 600 600
--- --- --- ---
Total Expense 948 1,011 1,075 1,148
Shares Outstanding 3,910 4,600 5,290 6,084
Less: New ESOP Adjustment 313 368 423 487
Less: Old ESOP Adjustment(1) 0 0 0 0
Plus: New SOP 93-6 ESOP Shares(2) 16 18 21 24
Plus: Old SOP 93-6 ESOP Shares(2) 0 0 0 0
---- ---- ---- ----
Shares for all EPS Calculations 3,613 4,250 4,888 5,621
Dilution of Stock Options 10.82%
Dilution of MRP 4.33%
</TABLE>
- -------
(1) ESOP Borrowings are deducted from net worth and assets, and amortized over
10 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized over 5
years.
(3) Consists of ESOP and MRP amortization.
(4) Not applicable
(5) Not applicable
(6) Earnings were adjusted $1.293 million for one time SAIF assessment and
$2,500 for the cash foundation expense tax impacted 40%.
(7) ESOP and MRP are amortized over 10 and 5 years respectively, and tax
impacted at 40%.
(8) All EPS computations are done in accordance with SOP 93-6.
<PAGE>
Exhibit 9
First Security Savings Bank
Pro-Forma Analysis Sheet with Foundation
Includes SOP 93-6
Name of Association: First Security Savings Bank
Date of Letter to Association: 7/18/97
Date of Market Prices: 7/10/97
<TABLE>
<CAPTION>
Comparable All Publicly Recent Standard
Companies State Thrifts Traded Thrifts Conversion Thrifts
First Security -------------- -------------- -------------- ------------------
Symbols Value Mean Median Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio P/E
- --------------------
Last Twelve Months N/A
At Minimum of Range 10.87
At Midpoint of Range 12.05 29.46 23.53 41.54 27.71 29.12 22.92 23.50 21.80
At Maximum of Range 13.33
At SuperMaximum of Range 14.71
Price-Book Ratio P/B
- ----------------
Last Twelve Months N/A
At Minimum of Range 61.92%
At Midpoint of Range 66.27% 118.42% 115.95% 120.06% 115.09% 144.89% 134.30% 71.40% 71.80%
At Maximum of Range 69.93%
At SuperMaximum of Range 73.53%
Price-Tangible Book Ratio P/TB
- -------------------------
Last Twelve Months N/A
At Minimum of Range 61.58%
At Midpoint of Range 65.92% 119.43% 118.06% 123.69% 118.06% 150.81% 140.25% 71.30% 71.80%
At Maximum of Range 69.59%
At SuperMaximum of Range 73.15%
Price-Assets Ratio P/A
- ------------------
Last Twelve Months N/A
At Minimum of Range 12.90%
At Midpoint of Range 14.76% 14.20% 14.45% 16.97% 16.20% 16.76% 14.86% 16.90% 15.20%
At Maximum of Range 16.54%
At SuperMaximum of Range 18.52%
</TABLE>
<PAGE>
Valuation Parameters
- --------------------
Twelve Mos. Earning Base Y
Period Ended April 30, 1997 $ 223 (1)
Pre-Conversion Book Value B
As of April 30, 1997 $ 29,950
Pre-Conversion Assets A
As of April 30, 1997 $260,002
Return on Money R 3.54%(2)
Conversion Expenses $ 965
X 2.34 (3)
Proceeds Not Invested $ 5,240 (4)
Estimated ESOP Borrowings $ 3,494
ESOP Purchases E 8.49%
Cost of ESOP Borrowings $ 349 (5)
Cost of ESOP Borrowings S 0.00%
Amort of ESOP Borrowings T 10 Years
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 1,747 (6)
MRP Purchases M 4.24%
MRP Expense $ 349
Foundation Amount $ 2,500 (7)
Foundation Amount F 6.07% 0.00%
Foundation Opportunity Cost $ 89
Tax Benefit Z $ 1,000 (8)
Tax Rate TAX 40.00%
Percentage Sold PCT 100.00%
Amount to be Issued to Public $ 41,170 (9)
Earnings Multiplier 1.00
(1) The expenses of the Foundation are not considered.
(2) Net Return assumes a reinvestment rate of 5.90 percent (the 1 year Treasury
at April 30, 1997), and a tax rate of 40%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP
(5) Assumes ESOP is amortized straight line over ten years.
(6) Assumes MRP is amortized straight line over five years.
(7) The Foundation is assumed to be $2.5 million flat under any scenario.
(8) The after-tax benefit of the Foundation is assumed to be 40% of Foundation.
(9) The amount to be offered to public.
Pro Forma Calculation
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $41,170
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $41,170
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $41,170
-----
1-P/A*PCT*(1-X-E-M-F)
<TABLE>
<CAPTION>
Pre-Foundation
- -------------------------------------------------------------------------------------------------------------------
Implied
Total Price per Total Exchange Conversion Exchange Gross Exchange
Conclusion Shares Share Value Shares Shares Ratio Proceeds Value
- ---------- ------ ----- ----- ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Appraised Value - Midpoint 4,117 $10 $41,170 -- 4,117 0.000 $41,170 $0
Appraised Value - Minimum 3,499 $10 $34,990 -- 3,499 0.000 $34,990 $0
Appraised Value - Maximum 4,735 $10 $47,350 -- 4,735 0.000 $47,350 $0
Appraised Value - Superrange 5,445 $10 $54,450 -- 5,445 0.000 $54,450 $0
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Proforma Effect of Conversion Proceeds
As of April 30, 1997
(Dollars in Thousands)
-----------------------------------------------
Minimum Midpoint Maximum SuperMax
-----------------------------------------------
- ----------------------------------------
Conversion Proceeds
- ----------------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 3,499 4,117 4,735 5,445
Conversions Shares Offered 3,499 4,117 4,735 5,445
Price Per Share $10 $10 $10 $10
-----------------------------------------------
Gross Proceeds $34,990 $41,170 $47,350 $54,450
Plus: Value issued to Foundation (9) 2,500 2,500 2,500 2,500
-----------------------------------------------
Pro Forma Market Capitalization $37,490 $43,670 $49,850 $56,950
===============================================
Gross Proceeds $34,990 $41,170 $47,350 $54,450
Less: Est. Conversion Expenses $908 $965 $1,022 $1,087
-----------------------------------------------
Net Cash Proceeds $34,082 $40,205 $46,328 $53,363
===============================================
Net Cash Proceeds $34,082 $40,205 $46,328 $53,363
Less: ESOP Adjustment (3) $2,999 $3,494 $3,988 $4,556
Less: MRP Adjustment (3) $1,500 $1,747 $1,994 $2,278
-----------------------------------------------
Net Proceeds Reinvested $29,583 $34,965 $40,346 $46,529
===============================================
Earnings Before Conversion $ 223 $ 223 $ 223 $ 223
Estimated Incremental Return $1,047 $1,238 $1,428 $1,647
Less: Cost of ESOP (4) $0 $0 $0 $0
Less: Amortization of ESOP (7) $180 $210 $239 $273
Less: MRP Adjustment (8) $180 $210 $239 $273 5
-----------------------------------------------
Pro-forma Incremental Net Income $687 $819 $950 $1,100
-----------------------------------------------
Pro Forma Earnings Excluding Adjustment $910 $1,042 $1,173 $1,323
Earnings Adjustment $2,276 $2,276 $2,276 $2,276
-----------------------------------------------
Earnings After Conversion $3,186 $3,317 $3,449 $3,599
- ----------------------------------------
Pro-forma Net Worth
- ----------------------------------------
Net Worth at April 30, 1997 $29,950 $29,950 $29,950 $29,950
Net Conversion Proceeds $34,082 $40,205 $46,328 $53,363
Plus: MHC Adjustment $0 $0 $0 $0
Plus: After tax Foundation Contribution $ 1,000 $ 1,000 $ 1,000 $ 1,000
Less: ESOP Adjustment (1) (2,999) (3,494) (3,988) (4,556)
Less: MRP Adjustment (2) (1,500) (1,747) (1,994) (2,278)
-----------------------------------------------
Pro-forma Net Worth $60,533 $65,915 $71,296 $77,479
- ----------------------------------------
Pro-forma Tangible Net Worth
- ----------------------------------------
Pro-forma Net Worth $60,533 $65,915 $71,296 $77,479
Less: Intangible (5) $352 $352 $352 $352
-----------------------------------------------
Pro-forma Tangible Net Worth $60,885 $66,267 $71,648 $77,831
- ----------------------------------------
Pro-forma Assets
- ----------------------------------------
Total Assets at April 30, 1997 $260,002 $260,002 $260,002 $260,002
Net Conversion Proceeds $34,082 $40,205 $46,328 $53,363
Plus: MHC Adjustment $0 $0 $0 $0
Plus: Tax Benefit of Foundation $1,000 $1,000 $1,000 $1,000
Less: ESOP Adjustment (1) (2,999) (3,494) (3,988) (4,556)
Less: MRP Adjustment (2) (1,500) (1,747) (1,994) (2,278)
-----------------------------------------------
Pro-forma Assets Excluding Adjustment 290,585 295,967 301,348 307,531
Plus: Adjustment 0 0 0 0
-----------------------------------------------
Pro-forma Total Assets $290,585 $295,967 $301,348 $307,531
- ----------------------------------------
Per Share Data
- ----------------------------------------
Net Worth at April 30, 1997 $7.99 $6.86 $6.01 $5.26
Estimated Net Proceeds $9.09 $9.21 $9.29 $9.37
Plus: MHC Adjustment $0.00 $0.00 $0.00 $0.00
Plus: Foundation Contribution $0.27 $0.23 $0.20 $0.18
Less: ESOP Stock ($0.80) ($0.80) ($0.80) ($0.80)
Less: MRP Stock ($0.40) ($0.40) ($0.40) ($0.40)
------ ------- ------- -------
Pro-forma Net Worth Per Share $16.15 $15.09 $14.30 $13.60
Less: Intangible $0.09 $0.08 $0.07 $0.06
------ ------ ------ -----
Pro-forma Tangible Net Worth Per Share $16.24 $15.17 $14.37 $13.67
Historical Earnings Per Share (8) $0.06 $0.06 $0.05 $0.04
Incremental return Per Share (8) $0.30 $0.31 $0.31 $0.31
ESOP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
MRP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
Earnings Adjustment (8) $0.66 $0.56 $0.49 $0.43
------ ------ ------ -----
Proforma Earnings Per Share (8) $0.92 $0.83 $0.75 $0.68
Shares Utilized 3,464 4,035 4,606 5,262
- ----------------------------------------
Pro-forma Ratios
- ----------------------------------------
Price/EPS without Adjustment 10.87 12.05 13.33 14.71
Price/EPS with Adjustment 10.87 12.05 13.33 14.71
Price/Book Value per Share 61.92% 66.27% 69.93% 73.53%
Price/Tangible Book Value 61.58% 65.92% 69.59% 73.15%
Market Value/Assets 12.90% 14.76% 16.54% 18.52%
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized over
10 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized over 5
years.
(3) Consists of ESOP and MRP amortization.
(4) The ESOP loan is from Holding Company and therefore, there are no costs.
(5) Not applicable
Page 3
<PAGE>
(6) Earnings are adjusted for one time SAIF assessment (1.293 million tax
impacted 40%) and cash foundation expense of ($2.500 million tax impacted
40%).
(7) ESOP and MRP are amortized over 10 and 5 years respectively, and tax
impacted at 40%.
(8) All EPS computations are done in accordance with SOP 93-6.
(9) The Foundation is assumed to be $2.5 million under any scenario
Total Shares Offered 3,499 4,117 4,735 5,445
Price Per Share 10 10 10 10
-------------------------------------------
Gross Proceeds 34,990 41,170 47,350 54,450
Estimated Insider Purchases -1,200 -1,200 -1,200 -1,200
ESOP Purchases -2,999 -3,494 -3,988 -4,556
-------------------------------------------
Proceeds to Base Fee On 30,791 36,476 42,162 48,694
Underwriters Percentage 1.00% 1.00% 1.00% 1.00%
-------------------------------------------
Underwriters Fee 308 365 422 487
Advisory Fee 0 0 0 0
-------------------------------------------
Total Underwriters Fee 308 365 422 487
All Other Expenses 600 600 600 600
-------------------------------------------
Total Expense 908 965 1,022 1,087
Shares Outstanding 3,749 4,367 4,985 5,695
Less: New ESOP Adjustment 300 349 399 456
Less: Old ESOP Adjustment 0 0 0 0
Plus: New SOP 93-6 ESOP Shares 15 17 20 23
Plus: Old SOP 93-6 ESOP Shares 0 0 0 0
-- -- -- --
Shares for all EPS Calculations 3,464 4,035 4,606 5,262
Dilution of Stock Options 10.82%
Dilution of RRP 4.33%
Page 4
<PAGE>
<TABLE>
<CAPTION>
Post-Foundation
- --------------------------------------------------------------------------------------------------------------------
Shares Shares Issued Implied
Issued and Price per To Total Exchange Conversion Exchange Gross Exchange
Exchanged Share Foundation Shares Shares Shares Ratio Proceeds Value
--------- ----- ---------- ------ ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Midpoint 3,499 $10 250 3,749 -- 3,499 0.000 $34,990 $0
Minimum 4,117 $10 250 4,367 -- 4,117 0.000 $41,170 $0
Maximum 4,735 $10 250 4,985 -- 4,735 0.000 $47,350 $0
Superrange 5,445 $10 250 5,695 -- 5,445 0.000 $54,450 $0
</TABLE>
Page 5
<PAGE>
Exhibit 10
First Security Savings Bank
Pro-Forma Analysis Sheet - Twelve Months Ended
30-Apr-97
Includes SOP 93-6
Name of Association: First Security Savings Bank
Date of Letter to Association: 7/18/97
Date of Market Prices: 7/10/97
<TABLE>
<CAPTION>
Comparable All Publicly Recent Standard
Companies State Thrifts Traded Thrifts Conversion Thrifts
First Security -------------- -------------- -------------- ------------------
Symbols Value Mean Median Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio P/E
- --------------------
Last Twelve Months N/A
At Minimum of Range 27.78
At Midpoint of Range 29.41 29.46 23.53 41.54 27.71 29.12 22.92 23.50 21.80
At Maximum of Range 31.25
At SuperMaximum of Range 32.26
Price-Book Ratio P/B
- ----------------
Last Twelve Months N/A
At Minimum of Range 62.38%
At Midpoint of Range 66.93% 118.42% 115.95% 120.06% 115.09% 144.89% 134.30% 71.40% 71.80%
At Maximum of Range 70.82%
At SuperMaximum of Range 74.52%
Price-Tangible Book Ratio P/TB
- -------------------------
Last Twelve Months N/A
At Minimum of Range 62.03%
At Midpoint of Range 66.58% 119.43% 118.06% 123.69% 118.06% 150.81% 140.25% 71.30% 71.80%
At Maximum of Range 70.47%
At SuperMaximum of Range 74.18%
Price-Assets Ratio P/A
- ------------------
Last Twelve Months N/A
At Minimum of Range 13.41%
At Midpoint of Range 15.46% 14.20% 14.45% 16.97% 16.20% 16.76% 14.86% 16.90% 15.20%
At Maximum of Range 17.43%
At SuperMaximum of Range 19.60%
</TABLE>
Page 1
<PAGE>
Valuation Parameters
- --------------------
Prior Twelve Mos. Earning Base Y
Period Ended December 31, 1996 $ 452 (1)
Pre-Conversion Book Value B
As of December 31, 1996 $ 29,261
Pre-Conversion Assets A
As of December 31, 1996 $258,115
Return on Money R 3.54%(2)
Conversion Expenses $ 1,035
X 2.25 (3)
Proceeds Not Invested $ 5,520 (4)
Estimated ESOP Borrowings $ 3,680
ESOP Purchases E 8.00%(5)
Cost of ESOP Borrowings $ 368 (5)
Cost of ESOP Borrowings S 0.00%(5)
Amort of ESOP Borrowings T 10 Years
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 1,840 (6)
MRP Purchases M 4.00%
MRP Expense $ 368
Foundation Amount $ --
Foundation Amount F 0.00%
Tax Rate TAX 40.00%
Percentage Sold PCT 100.00%
Tax Benefit Z $ 0
Earnings Multiplier 1.00
(1) Net income for the twelve months ended December 31, 1996
(2) Net Return assumes a reinvestment rate of 5.90 percent (the 1 year Treasury
at April 30, 1997), and a tax rate of 40%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP.
(5) Assumes ESOP is amortized straight line over ten years.
(6) Assumes MRP is amortized straight line over five years.
Pro Forma Calculation
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $46,000,000
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $46,000,000
---------
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $46,000,000
-----
1-P/A*PCT*(1-X-E-M-F)
<TABLE>
<CAPTION>
Full Implied
Total Price per Conversion Exchange Conversion Gross Exchange Exchange
Conclusion Shares Share Value Shares Percent Shares Percent Proceeds Value Ratio
- ---------- ------ ----- ----- ------ ------- ------ ------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Appraised Value - Midpoint 4,600 $10 $46,000 0 0.00% 4,600 100.00% $46,000 $0 0.000
Appraised Value - Minimum 3,910 $10 $39,100 0 0.00% 3,910 100.00% $39,100 $0 0.000
Appraised Value - Maximum 5,290 $10 $52,900 0 0.00% 5,290 100.00% $52,900 $0 0.000
Appraised Value - SuperMaximum* 6,084 $10 $60,840 0 0.00% 6,084 100.00% $60,840 $0 0.000
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Page 2
<PAGE>
<TABLE>
<CAPTION>
Proforma Effect of Conversion Proceeds
As of December 31, 1996
(Dollars in Thousands)
-----------------------------------------------
Minimum Midpoint Maximum SuperMax
-----------------------------------------------
- ---------------------------------------
Conversion Proceeds
- ---------------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 3,910 4,600 5,290 6,084
Conversion Shares Offered 3,910 4,600 5,290 6,084
Price Per Share $10 $10 $10 $10
-----------------------------------------------
Gross Proceeds $39,100 $46,000 $52,900 $60,840
Less: Est. Conversion Expenses $972 $1,035 $1,099 $1,172
-----------------------------------------------
Net Proceeds $38,128 $44,965 $51,801 $59,668
- ---------------------------------------
Estimated Income from Proceeds
- ---------------------------------------
Net Conversion Proceeds $38,128 $44,965 $51,801 $59,668
Less: ESOP Adjustment (3) $ 3,128 $3,680 $4,232 $4,867
Less: MRP Adjustment (3) $ 1,564 $1,840 $2,116 $2,434
-----------------------------------------------
Net Proceeds Reinvested $33,436 $39,445 $45,453 $52,367
Estimated Incremental Rate of Return 3.54% 3.54% 3.54% 3.54%
-----------------------------------------------
Estimated Incremental Return $1,184 $1,396 $1,609 $1,854
Less: Cost of ESOP (4) $0 $0 $0 $0
Less: Amortization of ESOP (7) $188 $221 $254 $292
Less: MRP Adjustment (7) $188 $221 $254 $292
-----------------------------------------------
Pro-forma Net Income $808 $954 $1,101 $1,270
Earnings Before Conversion $452 $452 $452 $452
-----------------------------------------------
Earnings Excluding Adjustment $1,260 $1,406 $1,553 $1,722
Earnings Adjustment (6) $0 $0 $0 $0
-----------------------------------------------
Earnings After Conversion $1,260 $1,406 $1,553 $1,722
- ---------------------------------------
Pro-forma Net Worth
- ---------------------------------------
Net Worth at December 31, 1996 $29,261 $29,261 $29,261 $29,261
Net Conversion Proceeds 38,128 44,965 51,801 59,668
Plus: MHC Adjustment (7) 0 0 0 0
Less: ESOP Adjustment (1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment (2) (1,564) (1,840) (2,116) (2,434)
-----------------------------------------------
Pro-forma Net Worth $62,697 $68,706 $74,714 $81,628
- ---------------------------------------
Pro-forma Tangible Net Worth
- ---------------------------------------
Pro-forma Net Worth $62,697 $68,706 $74,714 $81,628
Less: Intangible (5) $352 $352 $352 $352
-----------------------------------------------
Pro-forma Tangible Net Worth $63,049 $69,058 $75,066 $81,980
- ---------------------------------------
Pro-forma Assets
- ---------------------------------------
Total Assets at December 31, 1996 $258,115 $258,115 $258,115 $258,115
Net Conversion Proceeds $38,128 $44,965 $51,801 $59,668
Plus: MHC Adjustment (7) 0 0 0 0
Less: ESOP Adjustment (1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment (2) (1,564) (1,840) (2,116) (2,434)
-----------------------------------------------
Pro-forma Assets Excluding Adjustment 291,551 297,560 303,568 310,482
Plus: Adjustment (6) 0 0 0 0
-----------------------------------------------
Pro-forma Total Assets $291,551 $297,560 $303,568 310,482
- ---------------------------------------
Stockholder's Equity Per Share
- ---------------------------------------
Net Worth at December 31, 1996 $7.48 $6.36 $5.53 $4.81
Estimated Net Proceeds $9.75 $9.78 $9.79 $9.81
Plus: MHC Adjustment $0.00 $0.00 $0.00 $0.00
Less: ESOP Stock ($0.80) ($0.80) ($0.80) ($0.80)
Less: MRP Stock ($0.40) ($0.40) ($0.40) ($0.40)
------ ------ ------ ------
Pro-forma Net Worth Per Share $16.03 $14.94 $14.12 $13.42
Less: Intangible $0.09 $0.08 $0.07 $0.06
------ ------ ------ -----
Pro-forma Tangible Net Worth Per Share $16.12 $15.02 $14.19 $13.48
- ---------------------------------------
Net Earnings Per Share
- ---------------------------------------
Historical Earnings Per Share (8) $0.13 $0.11 $0.09 $0.08
Incremental return Per Share (8) $0.33 $0.33 $0.33 $0.33
ESOP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
MRP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
Normalizing Adjustment Per Share $0.00 $0.00 $0.00 $0.00
------ ------ ------ ------
Proforma Earnings Per Share (8) $0.36 $0.34 $0.32 $0.31
- ---------------------------------------
Shares Utilized
- ---------------------------------------
Shares Utilized 3,613 4,250 4,888 5,621
- ---------------------------------------
Pro-forma Ratios
- ---------------------------------------
Price/EPS without Adjustment 27.78 29.41 31.25 32.26
Price/EPS with Adjustment 27.78 29.41 31.25 32.26
Price/Book Value per Share 62.38% 66.93% 70.82% 74.52%
Price/Tangible Book Value 62.03% 66.58% 70.47% 74.18%
Market Value/Assets 13.41% 15.46% 17.43% 19.60%
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized over
10 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized over 5
years.
(3) Consists of ESOP and MRP amortization.
(4),(5) Not applicable
(6) Not applicable
(7) ESOP and MRP are amortized over 10 and 5 years respectively, and tax
impacted at 40%.
(8) All EPS computations are done in accordance with SOP 93-6.
Page 3
<PAGE>
Total Shares Offered 3,910 4,600 5,290 6,084
Price Per Share 10 10 10 10
-----------------------------------------
Gross Proceeds 39,100 46,000 52,900 60,840
Estimated Insider Purchases 1,200 1,200 1,200 1,200
ESOP Purchases -3,128 -3,680 -4,232 -4,867
-----------------------------------------
Proceeds to Base Fee On 37,172 43,520 49,868 57,173
Underwriters Percentage 1.00% 1.00% 1.00% 1.00%
-----------------------------------------
Underwriters Fee 372 435 499 572
Advisory Fee 0 0 0 0
-----------------------------------------
Total Underwriters Fee 372 435 499 572
All Other Expenses 600 600 600 600
-----------------------------------------
Total Expense 972 1,035 1,099 1,172
Shares Outstanding 3,910 4,600 5,290 6,084
Less: New ESOP Adjustment 313 368 423 487
Less: Old ESOP Adjustment (1) 0 0 0 0
Plus: New SOP 93-6 ESOP Shares (2) 16 18 21 24
Plus: Old SOP 93-6 ESOP Shares (2) 0 0 0 0
-- -- -- --
Shares for all EPS Calculations 3,613 4,250 4,888 5,621
0
0
0
0
Dilution of Stock Options 10.82%
Dilution of MRP 4.33%
Options Dilution
Shares utilized for Equity 4,301 5,060 5,819 6,692
New Net Worth $62,711 $68,722 $74,733 $81,650
New Tangible Net Worth $63,063 $69,074 $75,085 $82,002
New Net Worth Per Share 14.58 13.58 12.84 12.20
New Tangible Net Worth Per Share 14.66 13.65 12.90 12.25
Shares utilized for EPS 4,004 4,710 5,417 6,229
New EPS $0.35 $0.33 $0.32 $0.31
MRP Dilution
Shares utilized for Equity 4,066 4,784 5,502 6,327
New Net Worth $62,703 $68,713 $74,721 $81,637
New Tangible Net Worth $63,055 $69,065 $75,073 $81,989
New Net Worth Per Share 15.42 14.36 13.58 12.90
New Tangible Net Worth Per Share 15.51 14.44 13.65 12.96
Shares utilized for EPS 3,769 4,434 5,100 5,864
New EPS $0.33 $0.32 $0.30 $0.29
Page 4
<PAGE>
<TABLE><CAPTION>
Offering Circular Input
Proforma Effect of Conversion Proceeds
As of December 31, 1996
(Dollars in Thousands)
------------------------------------------
Minimum Midpoint Maximum SuperMax
------------------------------------------
- -----------------------------------------
Conversion Proceeds
- -----------------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 3,910 4,600 5,290 6,084
Conversion Shares Offered 3,910 4,600 5,290 6,084
Price Per Share $10 $10 $10 $10
Gross Proceeds $39,100 $46,000 $52,900 $60,840
Less: Est. Conversion Expenses ($972) ($1,035) ($1,099) ($1,172)
Estimated Net Proceeds $38,128 $44,965 $51,801 $59,668
Less: ESOP Adjustment (3) ($3,128) ($3,680) ($4,232) ($4,867)
Less: MRP Adjustment (3) ($1,564) ($1,840) ($2,116) ($2,434)
Estimated Net Proceeds as adjusted $33,436 $39,445 $45,453 $52,367
- -----------------------------------------
Consolidated Net Earnings
- -----------------------------------------
Historical Earnings $452 $452 $452 $452
Proforma earnings on net proceeds $1,184 $1,396 $1,609 $1,854
Less: Proforma ESOP Adjustment (7) $188 $221 $254 $292
Less: Proforma MRP Adjustment (7) $188 $221 $254 $292
Proforma net earnings $1,260 $1,406 $1,553 $1,722
- -----------------------------------------
Per Share Net Earnings
- -----------------------------------------
Historical Earnings Per Share (8) $0.13 $0.11 $0.09 $0.08
Proforma Earnings on net Proceeds (8) $0.33 $0.33 $0.33 $0.33
ESOP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
MRP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
Proforma Earnings Per Share (8) $0.36 $0.34 $0.32 $0.31
- -----------------------------------------
Stockholder's Equity
- -----------------------------------------
Net Worth at December 31, 1996 $29,261 $29,261 $29,261 $29,261
Net Conversion Proceeds 38,128 44,965 51,801 59,668
Plus: MHC Adjustment (7) 0 0 0 0
Less: ESOP Adjustment (1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment (2) (1,564) (1,840) (2,116) (2,434)
Pro-forma Net Worth $62,697 $68,706 $74,714 $81,628
- -----------------------------------------
Stockholder's Equity Per Share
- -----------------------------------------
Net Worth at December 31, 1996 $7.48 $6.36 $5.53 $4.81
Estimated Net Proceeds $9.75 $9.78 $9.79 $9.81
Plus: MHC Adjustment $0.00 $0.00 $0.00 $0.00
Less: ESOP Stock ($0.80) ($0.80) ($0.80) ($0.80)
Less: MRP Stock ($0.40) ($0.40) ($0.40) ($0.40)
------- ------- ------- -------
Pro-forma Net Worth Per Share $16.03 $14.94 $14.12 $13.42
Less: Intangible $0.09 $0.08 $0.07 $0.06
------- ------- ------- ------
Pro-forma Tangible Net Worth Per Share $16.12 $15.02 $14.19 $13.48
- -----------------------------------------
Pro-forma Ratios
- -----------------------------------------
Price/Book Value per Share 62.38% 66.93% 70.82% 74.52%
Price/EPS without Adjustment 27.78 29.41 31.25 32.26
------------------------------------------
For FinPro Use Only - Not In Offering Circular
- ----------------------------------------- ------------------------------------------
Pro-forma Tangible Net Worth
- -----------------------------------------
Pro-forma Net Worth $62,697 $68,706 $74,714 $81,628
Less: Intangible (5) $352 $352 $352 $352
Pro-forma Tangible Net Worth $63,049 $69,058 $75,066 $81,980
- -----------------------------------------
Pro-forma Assets
- -----------------------------------------
Total Assets at December 31, 1996 $258,115 $258,115 $258,115 $258,115
Net Conversion Proceeds $38,128 $44,965 $51,801 $59,668
Plus: MHC Adjustment (7) 0 0 0 0
Less: ESOP Adjustment (1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment (2) (1,564) (1,840) (2,116) (2,434)
Pro-forma Assets Excluding Adjustment 291,551 297,560 303,568 310,482
Plus: Adjustment (6) 0 0 0 0
Pro-forma Total Assets $291,551 $297,560 $303,568 $310,482
Shares Utilized 3,613 4,250 4,888 5,621
Price/EPS with Adjustment 27.78 29.41 31.25 32.26
Price/Tangible Book Value 62.03% 66.58% 70.47% 74.18%
Market Value/Assets 13.41% 15.46% 17.43% 19.60%
</TABLE>
Page 5
<PAGE>
Exhibit 11
First Security Savings Bank
Pro-Forma Analysis Sheet with Foundation
Includes SOP 93-6
Name of Association: First Security Savings Bank
Date of Letter to Association: 7/18/97
Date of Market Prices: 7/10/97
<TABLE>
<CAPTION>
Comparable All Publicly Recent Standard
Companies State Thrifts Traded Thrifts Conversion Thrifts
First Security -------------- -------------- -------------- ------------------
Symbols Value Mean Median Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio P/E
- --------------------
Last Twelve Months N/A
At Minimum of Range 30.30
At Midpoint of Range 31.25 29.46 23.53 41.54 27.71 29.12 22.92 23.50 21.80
At Maximum of Range 32.26
At SuperMaximum of Range 33.33
Price-Book Ratio P/B
- ----------------
Last Twelve Months N/A
At Minimum of Range 62.66%
At Midpoint of Range 66.93% 118.42% 115.95% 120.06% 115.09% 144.89% 134.30% 71.40% 71.80%
At Maximum of Range 70.62%
At SuperMaximum of Range 74.18%
Price-Tangible Book Ratio P/TB
- -------------------------
Last Twelve Months N/A
At Minimum of Range 62.66%
At Midpoint of Range 66.93% 119.43% 118.06% 123.69% 118.06% 150.81% 140.25% 71.30% 71.80%
At Maximum of Range 70.62%
At SuperMaximum of Range 74.18%
Price-Assets Ratio P/A
- ------------------
Last Twelve Months N/A
At Minimum of Range 12.99%
At Midpoint of Range 14.85% 14.20% 14.45% 16.97% 16.20% 16.76% 14.86% 16.90% 15.20%
At Maximum of Range 16.65%
At SuperMaximum of Range 18.64%
</TABLE>
Page 1
<PAGE>
Valuation Parameters
- --------------------
Twelve Mos. Earning Base Y
Period Ended December 31, 1996 $ 452 (1)
Pre-Conversion Book Value B
As of December 31, 1996 $ 29,261
Pre-Conversion Assets A
As of December 31, 1996 $258,115
Return on Money R 3.54%(2)
Conversion Expenses $ 965
X 2.34%(3)
Proceeds Not Invested $ 5,240 (4)
Estimated ESOP Borrowings $ 3,494
ESOP Purchases E 8.49%
Cost of ESOP Borrowings $ 349 (5)
Cost of ESOP Borrowings S 0.00%
Amort of ESOP Borrowings T 10 Years
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 1,747 (6)
MRP Purchases M 4.24%
MRP Expense $ 349
Foundation Amount $ 2,500 (7)
Foundation Amount F 6.07% 0.00%
Foundation Opportunity Cost $ 89
Tax Benefit Z $ 1,000 (8)
Tax Rate TAX 40.00%
Percentage Sold PCT 100.00%
Amount to be Issued to Public $ 41,170 (9)
Earnings Multiplier 1.00
(1) The expenses of the Foundation are not considered.
(2) Net Return assumes a reinvestment rate of 5.90 percent (the 1 year Treasury
at April 30, 1997), and a tax rate of 40%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP
(5) Assumes ESOP is amortized straight line over ten years.
(6) Assumes MRP is amortized straight line over five years.
(7) The Foundation is assumed to be $2.5 million under any scenario.
(8) The after-tax benefit of the Foundation is assumed to be 37% of Foundation.
(9) The amount to be offered to public.
Pro Forma Calculation
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $41,170
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $41,170
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $41,170
-----
1-P/A*PCT*(1-X-E-M-F)
<TABLE>
<CAPTION>
Pre-Foundation
- -------------------------------------------------------------------------------------------------------------------
Implied
Total Price per Total Exchange Conversion Exchange Gross Exchange
Conclusion Shares Share Value Shares Shares Ratio Proceeds Value
- ---------- ------ ----- ----- ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Appraised Value - Midpoint 4,117 $10 $41,170 -- 4,117 0.000 $41,170 $0
Appraised Value - Minimum 3,499 $10 $34,990 -- 3,499 0.000 $34,990 $0
Appraised Value - Maximum 4,735 $10 $47,350 -- 4,735 0.000 $47,350 $0
Appraised Value - Superrange 5,445 $10 $54,450 -- 5,445 0.000 $54,450 $0
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Proforma Effect of Conversion Proceeds
As of December 31, 1996
(Dollars in Thousands)
-----------------------------------------------
Minimum Midpoint Maximum SuperMax
-----------------------------------------------
- ----------------------------------------
Conversion Proceeds
- ----------------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 3,499 4,117 4,735 5,445
Conversions Shares Offered 3,499 4,117 4,735 5,445
Price Per Share $10 $10 $10 $10
-----------------------------------------------
Gross Proceeds $34,990 $41,170 $47,350 $54,450
Plus: Value issued to Foundation (9) 2,500 2,500 2,500 2,500
-----------------------------------------------
Pro Forma Market Capitalization $37,490 $43,670 $49,850 $56,950
===============================================
Gross Proceeds $34,990 $41,170 $47,350 $54,450
Less: Est. Conversion Expenses $908 $965 $1,022 $1,087
-----------------------------------------------
Net Cash Proceeds $34,082 $40,205 $46,328 $53,363
===============================================
Net Cash Proceeds $34,082 $40,205 $46,328 $53,363
Less: ESOP Adjustment (3) $2,999 $3,494 $3,988 $4,556
Less: MRP Adjustment (3) $1,500 $1,747 $1,994 $2,278
-----------------------------------------------
Net Proceeds Reinvested $29,583 $34,965 $40,346 $46,529
===============================================
Earnings Before Conversion $ 452 $ 452 $ 452 $ 452
Estimated Incremental Return $1,047 $1,238 $1,428 $1,647
Less: Cost of ESOP (4) $0 $0 $0 $0
Less: Amortization of ESOP (7) $180 $210 $239 $273
Less: MRP Adjustment (8) $180 $210 $239 $273
-----------------------------------------------
Pro-forma Incremental Net Income $687 $819 $950 $1,100
-----------------------------------------------
Pro Forma Earnings Excluding Adjustment $1,139 $1,270 $1,401 $1,552
Earnings Adjustment $0 $0 $0 $0
-----------------------------------------------
Earnings After Conversion $1,139 $1,270 $1,401 $1,552
- ----------------------------------------
Pro-forma Net Worth
- ----------------------------------------
Net Worth at March 31, 1997 $29,261 $29,261 $29,261 $29,261
Net Conversion Proceeds $34,082 $40,205 $46,328 $53,363
Plus: MHC Adjustment $0 $0 $0 $0
Plus: After tax Foundation Contribution $ 1,000 $ 1,000 $ 1,000 $ 1,000
Less: ESOP Adjustment (1) (2,999) (3,494) (3,988) (4,556)
Less: MRP Adjustment (2) (1,500) (1,747) (1,994) (2,278)
-----------------------------------------------
Pro-forma Net Worth $59,844 $65,226 $70,607 $76,790
- ----------------------------------------
Pro-forma Tangible Net Worth
- ----------------------------------------
Pro-forma Net Worth $59,844 $65,226 $70,607 $76,790
Less: Intangible (5) $0 $0 $0 $0
-----------------------------------------------
Pro-forma Tangible Net Worth $59,844 $65,226 $70,607 $76,790
- ----------------------------------------
Pro-forma Assets
- ----------------------------------------
Total Assets at March 31, 1997 $258,115 $258,115 $258,115 $258,115
Net Conversion Proceeds $34,082 $40,205 $46,328 $53,363
Plus: MHC Adjustment $0 $0 $0 $0
Plus: Tax Benefit of Foundation $1,000 $1,000 $1,000 $1,000
Less: ESOP Adjustment (1) (2,999) (3,494) (3,988) (4,556)
Less: MRP Adjustment (2) (1,500) (1,747) (1,994) (2,278)
-----------------------------------------------
Pro-forma Assets Excluding Adjustment 288,698 294,080 299,461 305,644
Plus: Adjustment 0 0 0 0
-----------------------------------------------
Pro-forma Total Assets $288,698 $294,080 $299,461 $305,644
- ----------------------------------------
Per Share Data
- ----------------------------------------
Net Worth at March 31, 1997 $7.81 $6.70 $5.87 $5.14
Estimated Net Proceeds $9.09 $9.21 $9.29 $9.37
Plus: MHC Adjustment $0.00 $0.00 $0.00 $0.00
Plus: Foundation Contribution $0.27 $0.23 $0.20 $0.18
Less: ESOP Stock ($0.80) ($0.80) ($0.80) ($0.80)
Less: MRP Stock ($0.40) ($0.40) ($0.40) ($0.40)
------ ------ ------ ------
Pro-forma Net Worth Per Share $15.96 $14.94 $14.16 $13.48
Less: Intangible $0.00 $0.00 $0.00 $0.00
------ ------ ------ ------
Pro-forma Tangible Net Worth Per Share $15.96 $14.94 $14.16 $13.48
Historical Earnings Per Share (8) $0.13 $0.11 $0.10 $0.09
Incremental return Per Share (8) $0.30 $0.31 $0.31 $0.31
ESOP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
MRP Adjustment Per Share (8) ($0.05) ($0.05) ($0.05) ($0.05)
Earnings Adjustment (8) $0.00 $0.00 $0.00 $0.00
------ ------ ------ ------
Proforma Earnings Per Share (8) $0.33 $0.32 $0.31 $0.30
Shares Utilized 3,464 4,035 4,606 5,262
- ----------------------------------------
Pro-forma Ratios
- ----------------------------------------
Price/EPS without Adjustment 30.30 31.25 32.26 33.33
Price/EPS with Adjustment 30.30 31.25 32.26 33.33
Price/Book Value per Share 62.66% 66.93% 70.62% 74.18%
Price/Tangible Book Value 62.66% 66.93% 70.62% 74.18%
Market Value/Assets 12.99% 14.85% 16.65% 18.64%
-----------------------------------------------
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized over
10 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized over 5
years.
(3) Consists of ESOP and MRP amortization.
(4) The ESOP loan is from Holding Company and therefore, there are no costs.
(5) Not applicable
(6) Not applicable
(7) ESOP and MRP are amortized over 10 and 5 years respectively, and tax
impacted at 40%.
(8) All EPS computations are done in accordance with SOP 93-6.
(9) The Foundation is assumed to be $2.5 million under any scenario.
Page 3
<PAGE>
Total Shares Offered 3,499 4,117 4,735 5,445
Price Per Share 10 10 10 10
-------------------------------------
Gross Proceeds 34,990 41,170 47,350 54,450
Estimated Insider Purchases -1,200 -1,200 -1,200 -1,200
ESOP Purchases -2,999 -3,494 -3,988 -4,556
-------------------------------------
Proceeds to Base Fee On 30,791 36,476 42,162 48,694
Underwriters Percentage 1.00% 1.00% 1.00% 1.00%
-------------------------------------
Underwriters Fee 308 365 422 487
Advisory Fee 0 0 0 0
-------------------------------------
Total Underwriters Fee 308 365 422 487
All Other Expenses 600 600 600 600
-------------------------------------
Total Expense 908 965 1,022 1,087
Shares Outstanding 3,749 4,367 4,985 5,695
Less: New ESOP Adjustment 300 349 399 456
Less: Old ESOP Adjustment 0 0 0 0
Plus: New SOP 93-6 ESOP Shares 15 17 20 23
Plus: Old SOP 93-6 ESOP Shares 0 0 0 0
-- -- -- --
Shares for all EPS Calculations 3,464 4,035 4,606 5,262
Dilution of Stock Options 10.82%
Dilution of RRP 4.33%
<TABLE>
<CAPTION>
Post Foundation
- --------------------------------------------------------------------------------------------------------------------
Shares Shares Issued Implied
Issued and Price per To Total Exchange Conversion Exchange Gross Exchange
Exchanged Share Foundation Shares Shares Shares Ratio Proceeds Value
--------- ----- ---------- ------ ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Midpoint 3,499 $10 250 3,749 -- 3,499 0.000 $34,990 $0
Minimum 4,117 $10 250 4,367 -- 4,117 0.000 $41,170 $0
Maximum 4,735 $10 250 4,985 -- 4,735 0.000 $47,350 $0
Superrange 5,445 $10 250 5,695 -- 5,445 0.000 $54,450 $0
</TABLE>
Options Dilution
Shares utilized for Equity 3,849 4,529 5,209 5,990
New Net Worth $59,857 $65,240 $70,624 $76,809
New Tangible Net Worth $59,857 $65,240 $70,624 $76,809
New Net Worth Per Share 15.55 14.41 13.56 12.82
New Tangible Net Worth Per Share 15.55 14.41 13.56 12.82
MRP Dilution
Shares utilized for Equity 3,639 4,282 4,924 5,663
New Net Worth $59,849 $65,232 $70,614 $76,798
New Tangible Net Worth $59,849 $65,232 $70,614 $76,798
New Net Worth Per Share 16.45 15.24 14.34 13.56
New Tangible Net Worth Per Share 16.45 15.24 14.34 13.56
Page 4
<PAGE>
Exhibit 12
First Security Savings Bank
Pro-Forma Analysis Sheet - Four Months Ended
30-Apr-97
Includes SOP 93-6
Name of Association: First Security Savings Bank
Date of Letter to Association: 7/18/97
Date of Market Prices: 7/10/97
<TABLE>
<CAPTION>
Comparable All Publicly Recent Standard
Companies State Thrifts Traded Thrifts Conversion Thrifts
First Security -------------- -------------- -------------- ------------------
Symbols Value Mean Median Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio P/E
- --------------------
Last Twelve Months N/A
At Minimum of Range 11.90
At Midpoint of Range 13.33 29.46 23.53 41.54 27.71 29.12 22.92 23.50 21.80
At Maximum of Range 14.49
At SuperMaximum of Range 15.87
Price-Book Ratio P/B
- ----------------
Last Twelve Months N/A
At Minimum of Range 61.69%
At Midpoint of Range 66.27% 118.42% 115.95% 120.06% 115.09% 144.89% 134.30% 71.40% 71.80%
At Maximum of Range 70.18%
At SuperMaximum of Range 73.91%
Price-Tangible Book Ratio P/TB
- -------------------------
Last Twelve Months N/A
At Minimum of Range 61.39%
At Midpoint of Range 65.96% 119.43% 118.06% 123.69% 118.06% 150.81% 140.25% 71.30% 71.80%
At Maximum of Range 69.88%
At SuperMaximum of Range 73.64%
Price-Assets Ratio P/A
- ------------------
Last Twelve Months N/A
At Minimum of Range 13.32%
At Midpoint of Range 15.36% 14.20% 14.45% 16.97% 16.20% 16.76% 14.86% 16.90% 15.20%
At Maximum of Range 17.32%
At SuperMaximum of Range 19.48%
</TABLE>
Page 1
<PAGE>
Valuation Parameters
- --------------------
Prior Twelve Mos. Earning Base Y
Period Ended April 30, 1997 $ 761 (1)
Pre-Conversion Book Value B
As of April 30, 1997 $ 29,950
Pre-Conversion Assets A
As of April 30, 1997 $260,002
Return on Money R 3.54%(2)
Conversion Expenses $ 1,035
X 2.25 (3)
Proceeds Not Invested $ 5,520 (4)
Estimated ESOP Borrowings $ 3,680
ESOP Purchases E 8.00%(5)
Cost of ESOP Borrowings $ 368 (5)
Cost of ESOP Borrowings S 0.00%(5)
Amort of ESOP Borrowings T 10 Years
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 1,840 (6)
MRP Purchases M 4.00%
MRP Expense $ 368
Foundation Amount $ --
Foundation Amount F 0.00%
Tax Rate TAX 40.00%
Percentage Sold PCT 100.00%
Tax Benefit Z $ 0
Earnings Multiplier 0.33
(1) Net income for the twelve months ended April 30, 1997
(2) Net Return assumes a reinvestment rate of 5.90 percent (the 1 year Treasury
at April 30, 1997), and a tax rate of 40%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP.
(5) Assumes ESOP is amortized straight line over ten years.
(6) Assumes MRP is amortized straight line over five years.
Pro Forma Calculation
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $4,600,000
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $4,600,000
---------
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $4,600,000
-----
1-P/A*PCT*(1-X-E-M-F)
<TABLE>
<CAPTION>
Full Implied
Total Price per Conversion Exchange Conversion Exchange Gross Exchange
Conclusion Shares Share Value Shares Shares Ratio Proceeds Value
- ---------- ------ ----- ----- ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Appraised Value - Midpoint 4,600 $10 $46,000 0 4,600 0.000 $46,000 $0
Appraised Value - Minimum 3,910 $10 $39,100 0 3,910 0.000 $39,100 $0
Appraised Value - Maximum 5,290 $10 $52,900 0 5,290 0.000 $52,900 $0
Appraised Value - SuperMaximum* 6,084 $10 $60,840 0 6,084 0.000 $60,840 $0
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Page 2
<PAGE>
<TABLE>
<CAPTION>
Proforma Effect of Conversion Proceeds
As of April 30, 1997
(Dollars in Thousands)
-----------------------------------------------
Minimum Midpoint Maximum SuperMax
-----------------------------------------------
- ---------------------------------------
Conversion Proceeds
- ---------------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 3,910 4,600 5,290 6,084
Conversion Shares Offered 3,910 4,600 5,290 6,084
Price Per Share $10 $10 $10 $10
-----------------------------------------------
Gross Proceeds $39,100 $46,000 $52,900 $60,840
Less: Est. Conversion Expenses $972 $1,035 $1,099 $1,172
-----------------------------------------------
Net Proceeds $38,128 $44,965 $51,801 $59,668
- ---------------------------------------
Estimated Income from Proceeds
- ---------------------------------------
Net Conversion Proceeds $38,128 $44,965 $51,801 $59,668
Less: ESOP Adjustment (3) $ 3,128 $3,680 $4,232 $4,867
Less: MRP Adjustment (3) $ 1,564 $1,840 $2,116 $2,434
-----------------------------------------------
Net Proceeds Reinvested $33,436 $39,445 $45,453 $52,367
Estimated Incremental Rate of Return 3.54% 3.54% 3.54% 3.54%
-----------------------------------------------
Estimated Incremental Return $395 $465 $536 $618
Less: Cost of ESOP (4) $0 $0 $0 $0
Less: Amortization of ESOP (7) $63 $74 $85 $97
Less: MRP Adjustment (7) $63 $74 $85 $97
-----------------------------------------------
Pro-forma Net Income $269 $317 $366 $424
Earnings Before Conversion $761 $761 $761 $761
-----------------------------------------------
Earnings Excluding Adjustment $1,030 $1,078 $1,127 $1,185
Earnings Adjustment (6) $0 $0 $0 $0
-----------------------------------------------
Earnings After Conversion $1,030 $1,078 $1,127 $1,185
- ---------------------------------------
Pro-forma Net Worth
- ---------------------------------------
Net Worth at April 30, 1997 $29,950 $29,950 $29,950 $29,950
Net Conversion Proceeds 38,128 44,965 51,801 59,668
Plus: MHC Adjustment (7) 0 0 0 0
Less: ESOP Adjustment (1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment (2) (1,564) (1,840) (2,116) (2,434)
-----------------------------------------------
Pro-forma Net Worth $63,386 $69,395 $75,403 $82,317
- ---------------------------------------
Pro-forma Tangible Net Worth
- ---------------------------------------
Pro-forma Net Worth $63,386 $69,395 $75,403 $82,317
Less: Intangible (5) $352 $352 $352 $352
-----------------------------------------------
Pro-forma Tangible Net Worth $63,718 $69,727 $75,735 $82,649
- ---------------------------------------
Pro-forma Assets
- ---------------------------------------
Total Assets at April 30, 1997 $260,002 $260,002 $260,002 $260,002
Net Conversion Proceeds $38,128 $44,965 $51,801 $59,668
Plus: MHC Adjustment (7) 0 0 0 0
Less: ESOP Adjustment (1) (3,128) (3,680) (4,232) (4,867)
Less: MRP Adjustment (2) (1,564) (1,840) (2,116) (2,434)
-----------------------------------------------
Pro-forma Assets Excluding Adjustment 293,438 299,447 305,455 312,369
Plus: Adjustment (6) 0 0 0 0
-----------------------------------------------
Pro-forma Total Assets $293,438 $299,447 $305,455 312,369
- ---------------------------------------
Per Share Data
- ---------------------------------------
Net Worth at April 30, 1997 $7.66 $6.51 $5.66 $4.92
Estimated Net Proceeds $9.75 $9.78 $9.79 $9.81
Plus: MHC Adjustment $0.00 $0.00 $0.00 $0.00
Less: ESOP Stock ($0.80) ($0.80) ($0.80) ($0.80)
Less: MRP Stock ($0.40) ($0.40) ($0.40) ($0.40)
------ ------ ------ ------
Pro-forma Net Worth Per Share $16.21 $15.09 $14.25 $13.53
Less: Intangible $0.08 $0.07 $0.06 $0.05
------ ------ ------ -----
Pro-forma Tangible Net Worth Per Share $16.29 $15.16 $14.31 $13.58
Historical Earnings Per Share (8) $0.21 $0.18 $0.16 $0.14
Incremental return Per Share (8) $0.11 $0.11 $0.11 $0.11
ESOP Adjustment Per Share (8) ($0.02) ($0.02) ($0.02) ($0.02)
MRP Adjustment Per Share (8) ($0.02) ($0.02) ($0.02) ($0.02)
Normalizing Adjustment Per Share $0.00 $0.00 $0.00 $0.00
------ ------ ------ ------
Proforma Earnings Per Share (8) $0.28 $0.25 $0.23 $0.21
Shares Utilized 3,602 4,238 4,874 5,605
- ---------------------------------------
Pro-forma Ratios
- ---------------------------------------
Price/EPS without Adjustment 11.90 13.33 14.49 15.87
Price/EPS with Adjustment 11.90 13.33 14.49 15.87
Price/Book Value per Share 61.69% 66.27% 70.18% 73.91%
Price/Tangible Book Value 61.39% 65.96% 69.88% 73.64%
Market Value/Assets 13.32% 15.36% 17.32% 19.48%
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized over
10 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized over 5
years.
(3) Consists of ESOP and MRP amortization.
(4),(5) Not applicable
(6) Not applicable
(7) ESOP and MRP are amortized over 10 and 5 years respectively, and tax
impacted at 40%.
(8) All EPS computations are done in accordance with SOP 93-6.
Page 3
<PAGE>
Total Shares Offered 3,910 4,600 5,290 6,084
Price Per Share 10 10 10 10
-----------------------------------------
Gross Proceeds 39,100 46,000 52,900 60,840
Estimated Insider Purchases 1,200 1,200 1,200 1,200
ESOP Purchases -3,128 -3,680 -4,232 -4,867
-----------------------------------------
Proceeds to Base Fee On 37,172 43,520 49,868 57,173
Underwriters Percentage 1.00% 1.00% 1.00% 1.00%
-----------------------------------------
Underwriters Fee 372 435 499 572
Advisory Fee 0 0 0 0
-----------------------------------------
Total Underwriters Fee 372 435 499 572
All Other Expenses 600 600 600 600
-----------------------------------------
Total Expense 972 1,035 1,099 1,172
Shares Outstanding 3,910 4,600 5,290 6,084
Less: New ESOP Adjustment 313 368 423 487
Less: Old ESOP Adjustment (1) 0 0 0 0
Plus: New SOP 93-6 ESOP Shares (2) 5 6 7 8
Plus: Old SOP 93-6 ESOP Shares (2) 0 0 0 0
-- -- -- --
Shares for all EPS Calculations 3,602 4,238 4,874 5,605
Dilution of Stock Options 10.85%
Dilution of MRP 4.34%
Options Dilution
Shares utilized for Equity 4,301 5,060 5,819 6,692
New Net Worth $63,400 $69,411 $75,422 $82,339
New Tangible Net Worth $63,732 $69,743 $75,754 $82,671
New Net Worth Per Share 14.74 13.72 12.96 12.30
New Tangible Net Worth Per Share 14.82 13.78 13.02 12.35
MRP Dilution
Shares utilized for Equity 4,066 4,784 5,502 6,327
New Net Worth $63,392 $69,402 $75,410 $82,326
New Tangible Net Worth $63,724 $69,734 $75,742 $82,658
New Net Worth Per Share 15.59 14.51 13.71 13.01
New Tangible Net Worth Per Share 15.67 14.58 13.77 13.06
Page 4
<PAGE>
Exhibit 13
First Security Savings Bank
Pro-Forma Analysis Sheet with Foundation
Includes SOP 93-6
Name of Association: First Security Savings Bank
Date of Letter to Association: 7/18/97
Date of Market Prices: 7/10/97
<TABLE>
<CAPTION>
Comparable All Publicly Recent Standard
Companies State Thrifts Traded Thrifts Conversion Thrifts
First Security --------------- --------------- --------------- ------------------
Symbols Value Mean Median Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio P/E
- --------------------
Last Twelve Months N/A
At Minimum of Range 11.90
At Midpoint of Range 13.33 29.46 23.53 41.54 27.71 29.12 22.92 23.50 21.80
At Maximum of Range 14.49
At SuperMaximum of Range 15.87
Price-Book Ratio P/B
- ----------------
Last Twelve Months N/A
At Minimum of Range 61.92%
At Midpoint of Range 66.27% 118.42% 115.95% 120.06% 115.09% 144.89% 134.30% 71.40% 71.80%
At Maximum of Range 69.93%
At SuperMaximum of Range 73.53%
Price-Tangible Book Ratio P/TB
- -------------------------
Last Twelve Months N/A
At Minimum of Range 61.58%
At Midpoint of Range 65.92% 119.43% 118.06% 123.69% 118.06% 150.81% 140.25% 71.30% 71.80%
At Maximum of Range 69.59%
At SuperMaximum of Range 73.21%
Price-Assets Ratio P/A
- ------------------
Last Twelve Months N/A
At Minimum of Range 12.90%
At Midpoint of Range 14.76% 14.20% 14.45% 16.97% 16.20% 16.76% 14.86% 16.90% 15.20%
At Maximum of Range 16.54%
At SuperMaximum of Range 18.52%
</TABLE>
Page 1
<PAGE>
Valuation Parameters
- --------------------
Prior four Mos. Earning Base Y
Period Ended April 30, 1997 $ 761(1)
Pre-Conversion Book Value B
As of April 30, 1997 $ 29,950
Pre-Conversion Assets A
As of April 30, 1997 $260,002
Return on Money R 3.54%(2)
Conversion Expenses $ 965
X 2.34%(3)
Proceeds Not Invested $ 5,240(4)
Estimated ESOP Borrowings $ 3,494
ESOP Purchases E 8.49%
Cost of ESOP Borrowings $ 349(5)
Cost of ESOP Borrowings S 0.00%
Amort of ESOP Borrowings T 10 Years
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 1,747(6)
MRP Purchases M 4.24%
MRP Expense $ 349
Foundation Amount $ 2,500(7)
Foundation Amount F 6.07% 0.00%
Foundation Opportunity Cost $ 89
Tax Benefit Z $ 1,000(8)
Tax Rate TAX 40.00%
Percentage Sold PCT 100.00%
Amount to be Issued to Public $ 41,170(9)
Earnings Multiplier 0.33
- ----------
(1) The expenses of the Foundation are not considered.
(2) Net Return assumes a reinvestment rate of 5.90 percent (the 1 year Treasury
at April 30, 1997), and a tax rate of 40%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP
(5) Assumes ESOP is amortized straight line over ten years.
(6) Assumes MRP is amortized straight line over five years.
(7) The Foundation is assumed to be $2.5 million under any scenario.
(8) The after-tax benefit of the Foundation is assumed to be 40% of Foundation.
(9) The amount to be offered to public.
Pro Forma Calculation
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $41,170
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $41,170
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A $41,170
-----
1-P/A*PCT*(1-X-E-M-F)
<TABLE>
<CAPTION>
Pre-Foundation
- -----------------------------------------------------------------------------------------------------------------
Implied
Total Price per Total Exchange Conversion Exchange Gross Exchange
Conclusion Shares Share Value Shares Shares Ratio Proceeds Value
- ---------- ------ ----- ----- ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Appraised Value - Midpoint 4,117 $10 $41,170 -- 4,117 0.000 $41,170 $0
Appraised Value - Minimum 3,499 $10 $34,990 -- 3,499 0.000 $34,990 $0
Appraised Value - Maximum 4,735 $10 $47,350 -- 4,735 0.000 $47,350 $0
Appraised Value - Superrange 5,445 $10 $54,450 -- 5,445 0.000 $54,450 $0
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Proforma Effect of Conversion Proceeds
As of April 30, 1997
(Dollars in Thousands)
------------------------------------------
Minimum Midpoint Maximum SuperMax
- --------------------------------------- ------- -------- ------- --------
Conversion Proceeds
- ---------------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 3,499 4,117 4,735 5,445
Conversion Shares Offered 3,499 4,117 4,735 5,445
Price Per Share $ 10 $ 10 $ 10 $ 10
-------- -------- -------- --------
Gross Proceeds $ 34,990 $ 41,170 $ 47,350 $ 54,450
Plus: Value issued to Foundation (9) 2,500 2,500 2,500 2,500
-------- -------- -------- --------
Pro Forma Market Capitalization $ 37,490 $ 43,670 $ 49,850 $ 56,950
======== ======== ======== ========
Gross Proceeds $ 34,990 $ 41,170 $ 47,350 $ 54,450
Less: Est. Conversion Expenses $ 908 $ 965 $ 1,022 $ 1,087
-------- -------- -------- --------
Net Cash Proceeds $ 34,082 $ 40,205 $ 46,328 $ 53,363
======== ======== ======== ========
Net Cash Proceeds $ 34,082 $ 40,205 $ 46,328 $ 53,363
Less: ESOP Adjustment (3) $ 2,999 $ 3,494 $ 3,988 $ 4,556
Less: MRP Adjustment (3) $ 1,500 $ 1,747 $ 1,994 $ 2,278
-------- -------- -------- --------
Net Proceeds Reinvested $ 29,583 $ 34,965 $ 40,346 $ 46,529
======== ======== ======== ========
Earnings Before Conversion $ 761 $ 761 $ 761 $ 761
Estimated Incremental Return $ 349 $ 413 $ 476 $ 549
Less: Cost of ESOP (4) $ 0 $ 0 $ 0 $ 0
Less: Amortization of ESOP (7) $ 60 $ 70 $ 80 $ 91
Less: MRP Adjustment (8) $ 60 $ 70 $ 80 $ 91 5
-------- -------- -------- --------
Pro-forma Incremental Net Income $ 229 $ 273 $ 317 $ 367
-------- -------- -------- --------
Pro Forma Earnings Excluding Adjustment $ 990 $ 1,034 $ 1,078 $ 1,128
Earnings Adjustment $ 0 $ 0 $ 0 $ 0
-------- -------- -------- --------
Earnings After Conversion $ 990 $ 1,034 $ 1,078 $ 1,128
- ---------------------------------------
Pro-forma Net Worth
- ---------------------------------------
Net Worth at March 31, 1997 $ 29,950 $ 29,950 $ 29,950 $ 29,950
Net Conversion Proceeds $ 34,082 $ 40,205 $ 46,328 $ 53,363
Plus: MHC Adjustment $ 0 $ 0 $ 0 $ 0
Plus: After tax Foundation Contribution $ 1,000 $ 1,000 $ 1,000 $ 1,000
Less: ESOP Adjustment (1) (2,999) (3,494) (3,988) (4,556)
Less: MRP Adjustment (2) (1,500) (1,747) (1,994) (2,278)
-------- -------- -------- --------
Pro-forma Net Worth $ 60,533 $ 65,915 $ 71,296 $ 77,479
- ---------------------------------------
Pro-forma Tangible Net Worth
- ---------------------------------------
Pro-forma Net Worth $ 60,533 $ 65,915 $ 71,296 $ 77,479
Less: Intangible (5) $ 332 $ 332 $ 332 $ 332
-------- -------- -------- --------
Pro-forma Tangible Net Worth $ 60,865 $ 66,247 $ 71,628 $ 77,811
- ---------------------------------------
Pro-forma Assets
- ---------------------------------------
Total Assets at March 31, 1997 $260,002 $260,002 $260,002 $260,002
Net Conversion Proceeds $ 34,082 $ 40,205 $ 46,328 $ 53,363
Plus: MHC Adjustment $ 0 $ 0 $ 0 $ 0
Plus: Tax Benefit of Foundation $ 1,000 $ 1,000 $ 1,000 $ 1,000
Less: ESOP Adjustment (1) (2,999) (3,494) (3,988) (4,556)
Less: MRP Adjustment (2) (1,500) (1,747) (1,994) (2,278)
-------- -------- -------- --------
Pro-forma Assets Excluding Adjustment 290,585 295,967 301,348 307,531
Plus: Adjustment 0 0 0 0
-------- -------- -------- --------
Pro-forma Total Assets $290,585 $295,967 $301,348 $307,531
- ---------------------------------------
Per Share Data
- ---------------------------------------
Net Worth at March 31, 1997 $ 7.99 $ 6.86 $ 6.01 $ 5.26
Estimated Net Proceeds $ 9.09 $ 9.21 $ 9.29 $ 9.37
Plus: MHC Adjustment $ 0.00 $ 0.00 $ 0.00 $ 0.00
Plus: Foundation Contribution $ 0.27 $ 0.23 $ 0.20 $ 0.18
Less: ESOP Stock ($ 0.80) ($ 0.80) ($ 0.80) ($ 0.80)
Less: MRP Stock ($ 0.40) ($ 0.40) ($ 0.40) ($ 0.40)
-------- -------- -------- --------
Pro-forma Net Worth Per Share $16.15 $15.09 $14.30 $13.60
Less: Intangible $ 0.09 $ 0.08 $ 0.07 $ 0.06
-------- -------- -------- --------
Pro-forma Tangible Net Worth Per Share $16.24 $15.17 $14.37 $13.66
Historical Earnings Per Share (8) $ 0.22 $ 0.19 $ 0.17 $ 0.15
Incremental return Per Share (8) $ 0.10 $ 0.10 $ 0.10 $ 0.10
ESOP Adjustment Per Share (8) ($ 0.02) ($ 0.02) ($ 0.02) ($ 0.02)
MRP Adjustment Per Share (8) ($ 0.02) ($ 0.02) ($ 0.02) ($ 0.02)
Earnings Adjustment (8) $ 0.00 $ 0.00 $ 0.00 $ 0.00
-------- -------- -------- --------
Proforma Earnings Per Share (8) $ 0.28 $ 0.25 $ 0.23 $ 0.21
Shares Utilized 3,454 4,024 4,593 5,247
- ---------------------------------------
Pro-forma Ratios
- ---------------------------------------
Price/EPS without Adjustment 11.90 13.33 14.49 15.87
Price/EPS with Adjustment 11.90 13.33 14.49 15.87
Price/Book Value per Share 61.92% 66.27% 69.93% 73.53%
Price/Tangible Book Value 61.58% 65.92% 69.59% 73.21%
Market Value/Assets 12.90% 14.76% 16.54% 18.52%
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized over
15 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized over 5
years.
(3) Consists of ESOP and MRP amortization.
(4) The ESOP loan is from Holding Company and therefore, there are no costs.
(5) Not applicable
(6) Not applicable
(7) ESOP and MRP are amortized over 15 and 5 years respectively, and tax
impacted at 40%.
(8) All EPS computations are done in accordance with SOP 93-6.
(9) The Foundation is assumed to be $2.5 million under any scenario.
Page 3
<PAGE>
Total Shares Offered 3,499 4,117 4,735 5,445
Price Per Share 10 10 10 10
------ ------ ------ ------
Gross Proceeds 34,990 41,170 47,350 54,450
Estimated Insider Purchases -1,200 -1,200 -1,200 -1,200
ESOP Purchases -2,999 -3,494 -3,988 -4,556
------ ------ ------ ------
Proceeds to Base Fee On 30,791 36,476 42,162 48,694
Underwriters Percentage 1.00% 1.00% 1.00% 1.00%
------ ------ ------ ------
Underwriters Fee 308 365 422 487
Advisory Fee 0 0 0 0
------ ------ ------ ------
Total Underwriters Fee 308 365 422 487
All Other Expenses 600 600 600 600
------ ------ ------ ------
Total Expense 908 965 1,022 1,087
Shares Outstanding 3,749 4,367 4,985 5,695
Less: New ESOP Adjustment 300 349 399 456
Less: Old ESOP Adjustment 0 0 0 0
Plus: New SOP 93-6 ESOP Shares 5 6 7 8
Plus: Old SOP 93-6 ESOP Shares 0 0 0 0
------ ------ ------ ------
Shares for all EPS Calculations 3,454 4,024 4,593 5,247
Dilution of Stock Options 10.85%
Dilution of RRP 4.34%
Page 4
<PAGE>
<TABLE>
<CAPTION>
Post Foundation
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Issued
Shares ----------------------------- Implied
Issued and Price per to Total Exchange Conversion Exchange Gross Exchange
Exchanged Share Foundation Shares Shares Shares Ratio Proceeds Value
--------- ----- ---------- ------ ------ ------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Minimum 3,499 $10 250 3,749 -- 3,499 #DIV/0! $34,990 $0
Midpoint 4,117 $10 250 4,367 -- 4,117 #DIV/0! $41,170 $0
Maximum 4,735 $10 250 4,985 -- 4,735 #DIV/0! $47,350 $0
Supermaximum 5,445 $10 250 5,695 -- 5,445 #DIV/0! $54,450 $0
Options Dilution
Shares utilized for Equity 3,849 4,529 5,209 5,990
New Net Worth $60,546 $65,929 $71,313 $77,498
New Tangible Net Worth $60,878 $66,261 $71,645 $77,830
New Net Worth Per Share 15.73 14.56 13.69 12.94
New Tangible Net Worth Per Share 15.82 14.63 13.76 12.99
MRP Dilution
Shares utilized for Equity 3,639 4,282 4,924 5,663
New Net Worth $60,538 $65,921 $71,303 $77,487
New Tangible Net Worth $60,870 $66,253 $71,635 $77,819
New Net Worth Per Share 16.64 15.40 14.48 13.68
New Tangible Net Worth Per Share 16.73 15.47 14.55 13.74
</TABLE>
Page 5
<PAGE>
Exhibit 14
[FINPRO LOGO]
About the Firm
FinPro, Inc. was established in 1988 as a full service management consulting
firm specializing in providing advisory services to the Financial Institutions
Industry. FinPro provides management advisory services for Banks, Thrifts,
Finance Companies and NonBank Banks. Additionally, FinPro has performed work for
the Federal Bankruptcy Court, Federal Deposit Insurance Corporation, Office of
Thrift Supervision and the Resolution Trust Corporation. FinPro is recognized as
an expert in banking and in loan analysis by the Federal Bankruptcy Court.
FinPro is independently owned, not associated or affiliated with any transaction
oriented firm. This provides FinPro with an unbiased platform from which to make
analytical recommendations. FinPro believes that a client deserves to be told
all of the alternatives, along with their associated benefits and downsides and
that a decision should be made on its merits. This uniquely positions FinPro as
an objective third party willing to suggest the unpopular strategies, unlike its
competitors who rely on a transaction to get paid.
FinPro is headquartered in Liberty Corner, New Jersey and has a branch office in
Buffalo, New York. FinPro focuses geographically on the Mid-Atlantic region, but
has performed work in all other regions across the nation.
FinPro principals are frequent speakers and presenters at financial institution
trade association functions. In addition, FinPro designed the Statistical Report
Analysis currently produced quarterly by the New Jersey Savings League for its
members. FinPro also hosts a tri-annual President's Breakfast for Presidents of
New Jersey Community Banks.
FinPro maintains a library of databases encompassing bank and thrift capital
markets data, census data, branch deposit data, national peer data, market
research data along with many other related topics. As such, FinPro can provide
quick, current and precise analytical assessments based on timely data. In
addition, FinPro's geographic mapping capabilities give it a unique capability
to thematically illustrate multiple issues and to provide targeted marketing
opportunities to its clients.
<PAGE>
FinPro, Inc.
About the Firm Page: 2
- --------------------------------------------------------------------------------
FinPro has also designed and built PC-based software programs to utilize as
tools in its work. Examples include:
o A proprietary software program (LaRS (R)) to perform loan review
analytics.
o A duration based asset/liability model.
o A five year strategic planning, three year business planning, and
one year budgetary model that completely simulates an entire
institution.
o A branch and product profitability model.
o A market performance grid and branch improvement grid model.
Using systems such as these, FinPro provides state-of-the-art end products in
all of its product and service areas.
<PAGE>
FinPro, Inc.
About the Firm Page: 3
- --------------------------------------------------------------------------------
Key Player Biographies
Donald J. Musso - Managing Director and President
Donald founded FinPro, Inc. in 1987 as a consulting and investment
banking firm located in New Jersey that specializes in providing
advisory services to the financial institutions industry. Mr. Musso
has a broad background in capital markets, bank valuations,
enhancing franchise value, corporate finance, mergers and
acquisitions, asset/liability management, strategic planning, market
feasibility and differentiation, branch acquisition, sales,
consolidation and profitability, financial modeling and analysis,
balance sheet restructuring, product and segment profitability,
business development and project management. Besides his consulting
experience, he has solid industry experience, having worked for two
$10 billion plus east coast financial institutions.
Mr. Musso has provided expert testimony on financial institutions
matters for the Federal Bankruptcy Court, the Office of Thrift
Supervision and the United States Attorney's Office.
He is a frequent speaker on Financial Institution related topics and
has assisted trade groups in various activities.
Prior to establishing FinPro, Donald had direct industry experience
having managed the Corporate Planning and Mergers and Acquisitions
departments for Meritor Financial Group, a $20 billion institution
in Philadelphia. Before that, he had responsibility for the banking,
thrift and real estate consulting practice in the State of New
Jersey for Deloitte Haskins & Sells.
Donald has a B.S. in Finance from Villanova University and a M.B.A.
in Finance from Fairleigh Dickenson University.
<PAGE>
FinPro, Inc.
About the Firm Page: 4
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Steven P. Musso - Managing Director
Steve joined FinPro in 1989 and is one of the founding members of
the firm. He has extensive experience in performing a wide array of
market feasibility studies, branch profitability analysis, CRA
analysis, loan reviews and work-outs and strategic planning
engagements.
Steve manages the FinPro office in Western New York. Additionally,
he is responsible for managing many strategic planning, loan
reviews, market feasibility and CRA engagements.
Steve is responsible for the development of FinPro's CRA, market
feasibility and Loan Review products.
Steve is currently a licensed real estate agent in New Jersey. Prior
to joining FinPro he practiced real estate in Philadelphia,
Pennsylvania.
Mr. Musso has a B.S. in Finance from Syracuse University.
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FinPro, Inc.
About the Firm Page: 5
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Kenneth G. Emerson, CPA - Director
Ken joined FinPro in October 1996 and has concentrated on bank
valuations, strategic plans, and branch profitability. His twelve
years of experience at banks and brokerage firms, with respect to
accounting, reporting, and information systems serve him well in
this capacity. Ken's prior employers include Summit Bancorp, Valley
Savings Bank, Howard Savings Bank, Carteret Mortgage Company, CIT
Data Corp., and Mahler & Emerson Inc. While at those institutions
his responsibilities included asset/liability, cash, back office,
operations, objective, and LAN management, in addition to regulatory
reporting (FRB, FDIC, OTS, State of New Jersey Department of
Banking, and NASD), SEC reporting, shareholder reporting, budgeting,
acquisitions, sales, conversions, interfaces, and FASB
implementation.
Mr. Emerson has a B.A. in Accounting from Franklin & Marshall
College.
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FinPro, Inc.
About the Firm Page: 6
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Dennis E. Gibney - Senior Financial Analyst
Dennis has been concentrating on the firm's asset/liability
products. market feasibility, competitive analysis, branch
profitability and branch sales/acquisitions are other areas of
specialization.
Dennis joined the firm in June of 1996. He received a B.S. from
Babson College with a triple-major in Finance, Investments and
Economics. Prior to joining the firm, Dennis received broad based
experience in the securities industry.
Dennis worked for Merrill Lynch & Co. supporting their
Mortgage-Backed trading desk in New York as an Allocations
Specialist and for Sandler O'Neill & Partners, where he provided
sales and trade support.
