UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 5TH STREET, N.W.
WASHINGTON, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999
_____________
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _____ Commission File No. 0-23571
PROGRESSIVE BANCORP, INC.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 36-4178818
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
601-617 Court Street, Pekin, Illinois 61554
_____________________________________ _______________
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (309)-347-5101
______________
Not applicable
________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the latest practicable date.
Class Outstanding at June 30, 1999
_____________________________________ __________________________
Common Stock, par value $.01 per share 174,473
<PAGE>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Condensed Consolidated Balance Sheets as of June 30, 1999
(Unaudited) and September 30, 1998....................................................1
Condensed Consolidated Statements of Income (Unaudited)
for the Three months ended June 30, 1999 and 1998
and the Nine months ended June 30, 1999 and 1998......................................2
Condensed Consolidated Statements of Cash Flows
(Unaudited) for the Three months ended June 30, 1999
and 1998 and the Nine months ended June 30, 1999 and 1998.............................4
Notes to Condensed Consolidated Financial Statements.......................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................................................8
PART II. OTHER INFORMATION.....................................................................................13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
June 30,
1999 September 30,
(Unaudited) 1998
______________ ______________
ASSETS
<S> <C> <C>
Cash and amounts due from banks $ 1,395 $ 1,639
Interest-bearing deposits 3,568 2,308
Money market investments and investment securities:
Held-to-maturity, at amortized cost (estimated fair
value of $1,628 and $4,299, respectively) 1,606 4,235
Available-for-sale, at fair value 11,598 6,827
Mortgage-backed securities:
Held-to-maturity, at amortized cost (estimated fair
value of $1,135 and $3,215, respectively) 1,134 3,183
Available-for-sale, at fair value 9,241 4,484
Loans receivable, net of allowance for loan loss of
$238 and $228, respectively 61,256 61,999
Other assets 1,972 2,577
----------- ---------
TOTAL ASSETS $ 91,770 $ 87,252
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 75,240 $ 69,791
Borrowed funds 9,500 9,500
Accrued expenses and other liabilities 661 1,308
---------- ----------
Total liabilities 85,401 80,599
---------- ----------
Stockholders' equity:
Serial preferred stock, $.10 par value, 50,000 shares
authorized, no shares issued and outstanding - -
Common stock, $.01 par value, 250,000 shares
authorized, 174,473 shares issued 2 2
Paid-in surplus 1,430 1,430
Retained earnings, substantially restricted 6,574 6,452
Net unrealized gain (loss) on available-for-sale
securities, net of taxes (337) 69
---------- ----------
7,669 7,953
Treasury stock, 25,000 shares at cost (1,300) (1,300)
---------- ----------
Total stockholders' equity 6,369 6,653
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 91,770 $ 87,252
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
1
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<TABLE>
<CAPTION>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Income Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------------- ---------------------------
1999 1998 1999 1998
---- ---- ---- ----
INTEREST INCOME
Loans receivable:
<S> <C> <C> <C> <C>
First mortgage loans $ 933 $ 909 $ 2,816 $ 2,701
Other loans 276 284 847 851
Mortgage-backed securities 125 119 344 373
Interest-bearing deposits 63 26 173 116
Money market investments and
investment securities 202 219 546 622
------------ ------------ ------------ ------------
Total interest income 1,599 1,557 4,726 4,663
------------ ------------ ------------ ------------
INTEREST ON DEPOSITS 894 842 2,651 2,571
INTEREST ON BORROWED FUNDS 132 141 401 380
------------ ------------ ------------ ------------
Total interest expense 1,026 983 3,052 2,951
------------ ------------ ------------ ------------
Net interest income 573 574 1,674 1,712
PROVISION FOR LOAN LOSSES 4 4 13 10
------------ ------------ ------------ ------------
Net interest income after provision
for loan losses 569 570 1,661 1,702
------------ ------------ ------------ ------------
NONINTEREST INCOME
Travel agency fees 767 850 2,348 2,624
Net gain on sales of securities available-
for-sale 3 - 3 32
Net gain on sales of loans held-for-sale 19 20 19 79
Loan origination fees 33 38 94 103
Other 83 82 239 244
------------ ------------ ------------ ------------
Total noninterest income 905 990 2,703 3,082
------------ ------------ ------------ ------------
NONINTEREST EXPENSE
Travel agency cost of sales 744 805 2,253 2,494
Compensation and benefits 260 228 785 692
Other operating expenses 227 236 819 682
------------ ------------ ------------ ------------
Total noninterest expense 1,231 1,269 3,857 3,868
------------ ------------ ------------ ------------
</TABLE>
2
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<TABLE>
<CAPTION>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Income Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------------- ---------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income before income taxes and
cumulative effect of change
in accounting principle $ 243 $ 291 $ 507 $ 916
INCOME TAXES 88 110 182 344
------------ ------------ ------------ ------------
Income before cumulative effect
of change in accounting
principle 155 181 325 572
CUMULATIVE EFFECT ON PRIOR
YEARS (TO SEPTEMBER 30, 1998)
OF EXPENSING ORGANIZATIONAL
COSTS AS INCURRED, NET OF
INCOME TAXES OF $21 - - 33 -
------------ ------------ ------------ ------------
NET INCOME $ 155 $ 181 $ 292 $ 572
============ ============ ============ ============
BASIC INCOME PER SHARE
Before cumulative effect of accounting
change $ 1.03 $ 1.18 $ 2.17 $ 3.50
Accounting change - - .22 -
------------ ------------ ------------ ------------
Basic income per share $ 1.03 $ 1.18 $ 1.95 $ 3.50
============ ============ ============ ============
DILUTED INCOME PER SHARe
Before cumulative effect of accounting
change $ 1.00 $ 1.12 $ 2.10 $ 3.30
Accounting change - - .21 -
------------ ------------ ------------ ------------
Diluted income per share $ 1.00 $ 1.12 $ 1.89 $ 3.30
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic 149,473 154,288 149,473 163,547
============ ============ ============ ============
Diluted 154,179 161,700 154,382 173,111
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------ ----------------------
1999 1998 1999 1998
---- ---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net cash provided by (used in) operating activities $ 202 $ (102) $ 245 $ 474
--------- --------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Principal received on mortgage-backed securities 635 751 2,775 1,882
Proceeds from the maturity of investment securities 1,500 1,000 8,000 2,500
Proceeds from sale of investment securities available-
for-sale 503 - 503 1,025
Purchase of investment securities (4,113) (516) (11,049) (4,650)
Purchase of mortgage-backed securities (3,640) (515) (5,662) (1,017)
Net (increase) decrease in loans receivable 957 (1,158) 639 (2,370)
Other - 18 (4) 1
--------- --------- --------- --------
Net cash used in investing activities (4,158) (420) (4,798) (2,629)
--------- --------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 1,982 269 5,449 (753)
Proceeds from FHLB advances - 1,000 - 2,500
Payments to acquire treasury stock - (1,300) - (1,300)
Other (301) (314) 120 33
--------- --------- --------- --------
Net cash provided by (used in)
financing activities 1,681 (345) 5,569 480
--------- --------- --------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,275) (867) 1,016 (1,675)
Cash and cash equivalents at
beginning of period 7,238 4,160 3,947 4,968
--------- --------- --------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 4,963 $ 3,293 $ 4,963 $ 3,293
========= ========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the periods
for:
Interest on deposits and borrowed funds $ 1,027 $ 979 $ 3,054 $ 2,941
========= ========= ========= ========
Income taxes, net of refunds $ 8 $ 29 $ 336 $ 118
========= ========= ========= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------ ----------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING ACTIVITIES
Transfers from loans to real estate acquired
through foreclosure $ - $ - $ - $ 241
========= ========= ========= ========
Additions to loans resulting from sales of
real estate owned $ 3 $ 153 $ - $ 153
========= ========= ========= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - Basis of Presentation
The Company's unaudited consolidated financial statements were prepared in
accordance with the instructions for Form 10-QSB and, therefore, do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles. In the opinion of management of the Company,
however, the consolidated financial statements reflect all adjustments
(consisting of only normal recurring accruals) which are necessary to present
fairly the consolidated financial position and the consolidated results of
operations of the Company. The consolidated results of operations for the nine
month periods ended June 30, 1999 and 1998 are not necessarily indicative of the
results which may be expected for an entire year.
NOTE 2 - EARNINGS PER COMMON Share
Basic earnings per share is computed based upon the weighted average number of
common shares outstanding during the period. Diluted income per share is
computed based upon the weighted average number of shares outstanding during the
period plus the shares that would be outstanding assuming the exercise of the
dilutive stock options.
NOTE 3 - YEAR 2000 COMPLIANCE
The Company presently believes that with modifications to existing software and
conversion to new software, the year 2000 issue will not pose significant
operational problems for the Company's business operations. To date, management
believes the systems conversion finalized in November 1998 brought its major
operating system into year 2000 compliance status. In addition, the Company
outsources its computer systems to a third party supplier, who has informed the
Company that it expects to be year 2000 compliant in mid-1999. Implementation of
the Company's plan to test in-house and out-sourced software has been underway
since the first quarter of 1998. Total compliance for all systems, including the
Company's outsourced computer systems, is expected by management to be completed
by the third quarter of 1999; management currently estimates that such
compliance will cost $50,000. The plan implementation team is responsible for
progress and will continue to provide a status report to the board of directors
on a monthly basis through December 31, 1999. However, if such modifications and
conversions are not made, or are not completed timely, the year 2000 issue could
have a material adverse impact on the operations of the Company. The Company has
in place a contingency plan in the event its outsourced computer systems are not
year 2000 compliant on a timely basis. In addition, there can be no assurance
that unforeseen problems in the Company's outsourced computer systems will not
have an adverse effect on the Company's systems or operations. The Company does
not have sufficient information accumulated from customers to enable the Company
to assess the degree to which customers' operations are susceptible to potential
problems relating to the year 2000 issue.
6
<PAGE>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - COMPREHENSIVE INCOME
Effective October 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components. The adoption of this
Statement had no impact on the Company's net income or shareholders' equity.
Statement 130 requires the Company's net change in unrealized gain (loss) on
available-for-sale securities, which prior to adoption were reported separately
in shareholders' equity, to be included in other comprehensive income. Total
comprehensive income (loss), which was comprised of net income and net change in
unrealized gain (loss) on available-for-sale securities, was approximately
$(152,000) and $169,000 for the three months ended June 30, 1999 and 1998,
respectively, and $(114,000) and $557,000 for the nine months ended June 30,
1999 and 1998, respectively.
7
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
FINANCIAL CONDITION
Total assets increased $4.5 million or 5.2 percent from September 30, 1998 to
June 30, 1999. Interest-bearing deposits increased $1.3 million or 54.6 percent
from September 30, 1998 to June 30, 1999. All money market investments and
investment securities increased $2.1 million or 19.4 percent from September 30,
1998 to June 30, 1999, and mortgage-back securities increased $2.7 million or
35.3 percent during this same period. Loan receivable, net, decreased $743,000
or 1.2 percent for this period. Deposits increased $5.4 million or 7.8 percent
from September 30, 1998 to June 30, 1999. The Company, faced with lower demand
in first mortgage loans and other loan originations, invested in current coupon
mortgage-back-securities guaranteed by GNMA and issued by FNMA or FHLMC.
Investments were also made in current coupon obligations issued by U.S.
Government sponsored agencies.
CAPITAL
Total equity decreased $284,000 or 4.2 percent to $6.4 million during the nine
months ended June 30, 1999, reflecting $337,000 in net unrealized losses on
available-for-sale securities, net of taxes at June 30, 1999. The FDIC requires
that the Company meet minimum amounts and ratios of total and Tier I Capital (as
defined in the regulations) to risk-weighted assets (as defined), and Tier I
Capital (as defined) to average assets (as defined). As of June 30, 1999, the
Company had total capital of $7.0 million or 18.09 percent of risk-weighted
assets and Tier I Capital of $6.7 million or 17.39 percent of risk-weighted
assets or 7.28 percent of average assets. As of June 30, 1999, the Company was
in full compliance with all three minimum capital requirements.
LIQUIDITY
FDIC regulations require that savings banks maintain an average daily balance of
liquid assets (cash, certain time deposits, bankers' acceptances, and specified
United States Government, state, or federal agency obligations) equal to a
monthly average of not less than 5 percent of its net withdrawable deposits plus
short-term borrowing. At June 30, 1999, the Company's average liquidity position
was $17.2 million or 21.7 percent compared to $12.5 million or 16.6 percent at
September 30, 1998. The Company adjusts its liquidity levels in order to meet
funding needs for deposit outflows, payment of real estate taxes escrowed on
mortgage loans, repayment of borrowings, when applicable, and loan commitments.
The Company also adjusts liquidity as appropriate to meet its asset, liability,
and management objectives.
8
<PAGE>
RESULTS OF OPERATIONS
INTEREST INCOME
Interest income increased 2.7 percent or $42,000 for the three months ended June
30, 1999, compared to the three months ended June 30, 1998. Interest income
increased 1.4 percent or $63,000 for the nine months ended June 30, 1999,
compared to nine months ended June 30, 1998. The increase in interest income for
the three months ended June 30, 1999 reflected an increase in average
interest-earning assets to $88.3 million from $82.5 million for a 7.0 percent
increase or $5.8 million for the three months ended June 30, 1999, compared to
the three months ended June 30, 1998. Average interest-earning assets of $86.3
million for the nine months ended June 30, 1999, increased $4.0 million or 4.9
percent, compared to the average interest-bearing assets of $82.3 million for
the nine months ended June 30, 1998. The increase in interest income for the
three months ended June 30, 1999, was partially offset by a decrease in the
average yield on interest-earning assets to 7.41 percent from 7.87 percent. The
average yield on interest-earning assets for the nine months ended June 30, 1999
decreased to 7.52 percent from 7.85 percent for the nine months ended June 30,
1998.
INTEREST EXPENSE
Interest expense increased 4.4 percent or $43,000 for the three months ended
June 30, 1999 compared to the three months ended June 30, 1998. Interest expense
also increased 3.4 percent or $101,000 for the nine months ended June 30, 1999,
compared to the nine months ended June 30, 1998. The increase for the three
months ended June 30, 1999, compared to the three months ended June 30, 1998 was
due to an increase in average deposits of $6.1 million from $67.9 million to
$74.0 million. Average borrowed funds decreased to $9.5 million for the period
ended June 30, 1999, compared to $10.1 million for the period ended June 30,
1998. The increase for the nine month period ended June 30, 1999, compared to
the nine month period ended June 30, 1998, was due to an increase in average
deposits of $4.1 million from $68.3 million to $72.4 million. Average borrowed
funds were $9.5 million and $9.0 million for the nine month periods ended June
30, 1999 and 1998, respectively. Helping to offset this increase, the average
cost of the deposits and borrowed funds decreased to 4.93 percent from 5.04
percent for the three months ended June 30, 1999, compared to the three months
ended June 30, 1998. The average cost of deposits and borrowed funds for the
nine months ended June 30, 1999, was 4.98 percent compared to the 5.09 percent
for the nine months ended June 30, 1998.
9
<PAGE>
NET INTEREST INCOME
Net interest income decreased 0.2 percent or $1,000 and 2.2 percent or $38,000
for the respective three months and nine months ended June 30, 1999, as compared
to these same periods ended June 30, 1998. Contributing to these decreases was a
decline in originations of first mortgage and other loans during both periods,
as well as increased first mortgage loan refinancings in both periods resulting
in lower interest rates on the refinanced mortgage loans. Putting further
pressure on net interest income, the Company continued to offer competitive
interest rates on savings deposits in order to compete with the local credit
unions, mutual fund offerings and other investment options. Because of these
factors, the Company's net interest spread declined to 2.48 percent from 2.83
percent for the three months ended June 30, 1999, compared to the three months
ended June 30, 1998. The net interest rate spread also declined for the nine
month period ended June 30, 1999 to 2.53 percent from 2.76 percent for the nine
month period ended June 30, 1998.
PROVISION FOR LOAN LOSSES
The provision for loan losses for the three months ended June 30, 1999 and 1998
remained the same at $4,000. The provision for the nine months ended June 30,
1999 was $13,000 compared to $10,000 for the nine months ended June 30, 1998.
This increase was a result of increased charge-offs in the Company's consumer
loan portfolio, thereby increasing the loan loss provision to maintain adequate
loss reserves. Provisions for losses on first mortgage loans and real estate
sold on contract are charged to operations when the loss becomes probable and
estimable, based upon the Bank's past loan loss experience, known and inherent
risk in the portfolio, estimated values of the underlying collateral, and
current and prospective economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the Bank's allowance for loan losses. Such agencies may require the Bank to
recognize additions to the allowance for loan losses based on their judgment of
information available to them at the time of their examination.
NONINTEREST INCOME
Noninterest income decreased 8.6 percent or $85,000 for the three months ended
June 30, 1999, and decreased 12.3 percent or $379,000 for the nine months ended
June 30, 1999, as compared to the three months and nine months ended June 30,
1998. The Company's wholly owned subsidiary Pekin Travel Company experienced a
decrease in agency fees of 9.8 percent or $83,000 for the three months ended
June 30, 1999 compared to the three months ended June 30, 1998. These agency
fees also decreased 10.5 percent or $276,000 for the nine months ended June 30,
1999, compared to the nine months ended June 30, 1998. Net gains on sales of
securities available-for-sale and gains on sales of loans held-for-sale totaled
$22,000 and $20,000 for the three months ended June 30, 1999 and 1998,
respectively. However, the decrease in market value of investments
available-for-sale and loans held-for-sale was reflected for the nine months
ended June 30, 1999, when net gains totaled $22,000 compared to net gains of
$111,000 for the nine months ended June 30, 1998. Because of the decrease in
loan originations, fees for the three months ended June 30, 1999 were $5,000 or
13.2 percent less than for the three months ended June 30, 1998. For the nine
months ended June 30, 1999, loan origination fees decreased 8.7 percent or
$9,000 to $94,000 from $103,000 for the nine months ended June 30, 1998.
10
<PAGE>
NONINTEREST EXPENSE
Noninterest expense increased 3.0 percent or $38,000 for the three months ended
June 30, 1999, compared to the three months ended June 30, 1998. For the
comparable nine months ended June 30, 1999 and 1998, noninterest expense
decreased $11,000 or 0.3 percent. With less volume from the travel agency, fees
related to the cost of sales for the travel agency decreased 7.6 percent or
$61,000 for the three months ended June 30, 1999, compared to the three months
ended June 30, 1998. The travel agency cost of sales also decreased 9.7 percent
or $241,000 for the nine months ended June 30, 1999, compared to the nine months
ended June 30, 1998.
The Company's compensation and benefits cost increased 14.0 percent or $32,000
for the three months ended June 30, 1999, compared to the three months ended
June 30, 1998. For the nine months ended June 30, 1999 these costs increased
13.4 percent or $93,000 compared to the nine months ended June 30, 1998.
Employee benefits costs increased $21,000 for the three months ended June 30,
1999, compared to the three months ended June 30, 1998. For the nine months
ended June 30, 1999, benefits costs increased $65,000, compared to the nine
months ended June 30, 1998. These increases resulted from the Company changing
its officer insurance coverage and insurance carriers. The majority of these
increases in benefit costs were one time costs only. Other operating costs for
the nine months ended June 30, 1999, increased 20.1 percent or $137,000,
compared to the nine months ended June 30, 1998. One time costs related to the
Company's on-line conversion totaling $128,000 accounted for the majority of
this increase.
NET INCOME
Net income decreased 14.4 percent or $26,000 for the comparable three months
ended June 30, 1999 and 1998. Net income decreased 48.9 percent or $280,000 for
the nine months ended June 30, 1999, compared to the nine months ended June 30,
1998. The net decrease for the three month comparable periods was mainly a
result of the decreased volume in the travel agency fees less the travel agency
cost of sales. This net figure decreased $22,000 for the three months ended June
30, 1999, compared to the three months ended June 30, 1998. Contributing to the
decrease for the nine months ended June 30, 1999, compared to the nine months
ended June 30, 1998, the Company's net interest income decreased 2.2 percent or
$38,000. Because of a decline in the market value of investments
available-for-sale, the Company did not have available-for-sale securities to be
sold at a gain during the nine months ended June 30, 1999, compared to the nine
months ended June 30, 1998, resulting in a decrease in net gain from sales of
$29,000. Also contributing to the decrease were the one time costs associated
with the Company's on-line conversion of $137,000 for the nine months ended June
30, 1999. Also part of the decrease for the nine months ended June 30, 1999 was
the expensing of unamortized organizational costs associated with the formation
of the Company's bank holding company in October 1997. This totaled $33,000, net
of income taxes.
11
<PAGE>
SAFE HARBOR STATEMENT
This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995, and is including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies, and expectations of the Company, are
generally identifiable by use of the words "believe", "expect", "intend",
"anticipate", "estimate", "project", or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.
Factors which could have a material adverse effect on the operations and future
prospects of the Company and the subsidiaries include, but are not limited to,
changes in: interest rates, general economic conditions, the
legislative/regulatory situation, monetary and fiscal policies of the U.S.
Government, including policies of the U.S. Treasury and the Federal Reserve
Board, the quality of composition of the loan or investment portfolios, demand
for loan products, deposit flows, competition, demand for financial services in
the Company's market area, and accounting principles, policies, and guidelines.
These risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements.
Further information concerning the Company and its business, including
additional factors that could materially affect the Company's financial results,
is included in the Bank's filings with the Federal Deposit Insurance
Corporation.
12
<PAGE>
PROGRESSIVE BANCORP, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceeding
There are no material legal proceedings to which the Company or the Bank
is a party or of which any of their property is subject. From time to
time, the Bank is a party to various legal proceedings incident to its
business.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8_K
(a) Exhibits: none
(b) Reports on Form 8_K: none
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROGRESSIVE BANCORP, INC.
(Registrant)
DATE: August 13, 1999 By: /s/ Arthur E. Krile, Jr.
--------------------------------------
Arthur E. Krile, Jr., President and
Chief Executive Officer
14
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0001044610
<NAME> Progressive Bancorp, Inc.
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