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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 1999
LOCAL FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
001-13949 65-0424192
(Commission File No.) (I.R.S. Employer Identification No.)
3601 N.W. 63rd Street, Oklahoma City, Oklahoma 73116
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 405-841-2298
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ITEM 5. OTHER EVENTS.
On February 4, 1999, Local Financial Corporation issued a press release
with respect to its fourth quarter and full year 1998 earnings. The press
release issued in connection with this announcement is filed as an exhibit to
this report and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibit:
See Exhibit Index following the signature page of this report, which is
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities and Exchanges Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LOCAL FINANCIAL CORPORATION
Date: February 4, 1999 By: /s/Richard L. Park
----------------------------------------
Richard L. Park, Chief Financial Officer
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EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
DATE OF REPORT: FEBRUARY 4, 1999
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
Exhibit 99 Press Release dated February 4, 1999 relating to
fourth quarter and full year 1998 earnings
</TABLE>
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EXHIBIT 99
FEBRUARY 4, 1999
LOCAL FINANCIAL CORPORATION ANNOUNCES
STRONG EARNINGS FOR 1998
OKLAHOMA CITY. Local Financial Corporation, holding company for Local Federal
Bank, announced positive results for the fourth quarter and full year of 1998.
The company reported fourth quarter net income of $4.9 million or $0.24 basic
earnings per share (based on 20.5 million average shares). Earnings for the full
year 1998 were $18.4 million or $0.90 basic earnings per share. These compare to
earnings (loss) per share of $0.63 and ($6.52) for the same periods of 1997. Of
the $0.63 per share earnings in the fourth quarter of 1997, gains on securities
sales accounted for $0.42 per share leaving $0.21 per share from normal
operations.
Edward A. Townsend, Chairman and CEO, said, "We are extremely pleased with the
performance of the company this year and we are certain the acquisitions and
strategic realignments that occurred within the year will position us for future
earnings growth ".
During 1998, Local Financial and its wholly-owned subsidiary, Local Federal
Bank, completed the acquisitions of Green Country Bank, and BankSouth
Corporation, the Lawton, Oklahoma bank holding company for Citizens Bank. In
addition to growth through acquisitions, Local Federal Bank also formed a
corporate lending unit focused on commercial lending within Oklahoma. Local has
the fifth largest deposit franchise in Oklahoma and operates through 50
locations statewide.
<TABLE>
<CAPTION>
For Three Months Ended
December 31 For Year Ended
------------------------ ------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
(in 000's)
<S> <C> <C> <C> <C>
Net Interest Income $ 16,442 $ 13,109 $ 54,766 $ 51,746
Provision for Loan Losses (500) (225) (1,450) (44,272)
Gain/(Loss) on Asset Sales 397 12,816 932 (138,828)
Other Operating Income 4,226 2,632 13,850 12,370
Other Operating Expense 12,804 9,117 39,407 42,569
--------- --------- --------- ---------
INCOME (LOSS) BEFORE TAXES $ 7,761 19,215 $ 28,691 (161,553)
Tax Provision (Benefit) 2,823 6,720 10,254 (52,362)
NET INCOME (LOSS) $ 4,938 $ 12,495 $ 18,437 $(109,191)
========= ========= ========= =========
Basic Earnings (Loss) per Share $ 0.24 $ 0.63 $ 0.90 $ (6.52)
========= ========= ========= =========
</TABLE>
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Net interest income for the fourth quarter rose to $16.4 million, up $2.4
million or 17% over the third quarter, largely as a result of the acquisition of
BankSouth. Loan balances (excluding any acquired loans) rose from $1.3 billion
at September 30 to $1.4 billion at year end. Loan growth resulted primarily from
the significant addition of seasoned loan officers consistent with the Company's
strategy of creating a major commercial bank in Oklahoma. Fourth quarter
noninterest income totaled $4.6 million, representing an increase of more than
$1 million over the third quarter, primarily due to the BankSouth acquisition.
Noninterest expense of $12.8 million for the fourth quarter was $3 million over
the $9.7 million incurred during the third quarter. This increase was
attributable to costs associated with the BankSouth acquisition and costs
related to the formation of a corporate lending unit.
Local Federal Bank's core capital ratio remained well above regulatory capital
guidelines, moving from 6.98% at December 31, 1997 to 7.63% at December 31,
1998.
-End-
For any questions please contact Richard L. Park, (405) 841-2298.
To the extent that statements in this report relate to the plans,
objectives or future performance of Local Financial Corporation, these
statements are considered to be forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements are based
on management's current expectations and the current economic environment.
Actual events and results in future periods may differ materially from those
currently expected due to various risks and uncertainties. Additional discussion
of factors affecting Local Financial's business and prospects is contained in
its periodic filings with the Securities and Exchange Commission.
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LOCAL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
December 31,
-------------------------------
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks $ 27,180 $ 34,152
Interest bearing deposits with other banks 27,700 20,000
Securities purchased under agreements to resell -- 178,000
Securities available for sale 570,964 518,107
Loans receivable, net of allowance for loan losses of $27,901
at December 31, 1998 and $20,484 at December 31, 1997 1,362,272 953,470
Federal Home Loan Bank of Topeka stock, at cost 42,693 45,147
Premises and equipment, net 23,959 10,646
Assets acquired through foreclosure and repossession, net 693 260
Intangible assets, net 17,843 1,779
Deferred tax asset, net 10,959 26,058
Current income taxes receivable 18,291 28,427
Other assets 26,425 65,319
----------- -----------
Total assets $ 2,128,979 $ 1,881,365
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $ 379,796 $ 247,264
Savings 74,963 68,937
Time 1,213,315 1,286,332
----------- -----------
Total deposits 1,668,074 1,602,533
Advances from borrowers for taxes and insurance 4,400 5,046
Advances from the Federal Home Loan Bank of Topeka 220,033 80,136
Senior notes 80,000 80,000
Other liabilities 37,666 31,025
----------- -----------
Total liabilities 2,010,173 1,798,740
----------- -----------
Common stock, $0.01 par value, 25,000,000 shares authorized;
20,537,269 shares issued and 20,537,209 shares outstanding at
December 31, 1998; 25,000,000 shares authorized; 19,700,060
shares issued and 19,700,000 shares outstanding at 205 197
December 31, 1997
Preferred stock, $0.01 par value, 5,000,000 shares authorized;
none outstanding -- --
Additional paid-in capital 206,758 197,766
Retained earnings 50,197 31,760
Treasury stock, 60 shares, at cost (149,436) (149,436)
Accumulated other comprehensive income 11,082 2,338
----------- -----------
Total stockholders' equity 118,806 82,625
----------- -----------
Total liabilities and stockholders' equity $ 2,128,979 $ 1,881,365
=========== ===========
</TABLE>
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LOCAL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Year Ended
December 31,
---------------------------
1998 1997
---------- ----------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME:
Loans $ 96,851 $ 104,324
Securities available for sale 41,862 62,009
Securities held to maturity - 16,345
Federal Home Loan Bank of Topeka stock 3,474 3,070
Short term investments and other 5,017 3,020
---------- ----------
Total interest and dividend income 147,204 188,768
---------- ----------
INTEREST EXPENSE:
Deposit accounts 74,743 82,544
Advances from the Federal Home Loan Bank of Topeka 7,547 39,095
Securities sold under agreements to repurchase and other 678 11,848
Notes payable 9,470 3,535
---------- ----------
Total interest expense 92,438 137,022
---------- ----------
Net interest and dividend income 54,766 51,746
Provision for loan losses (1,450) (44,272)
---------- ----------
Net interest and dividend income after provision for loan losses 53,316 7,474
---------- ----------
NONINTEREST INCOME:
Deposit related income 10,389 7,850
Loan fees and loan service charges 1,737 2,682
Net gains (losses) on sale of assets 932 (138,828)
Other 1,724 1,838
---------- ----------
Total noninterest income (loss) 14,782 (126,458)
---------- ----------
NONINTEREST EXPENSE:
Compensation and employee benefits 19,287 15,159
Deposit insurance premiums 1,323 1,050
Provision for uninsured risk - 2,700
Equipment and data processing 4,276 3,035
Occupancy 3,029 2,809
Advertising 2,080 1,203
Professional fees 2,142 1,561
Other 7,270 15,052
---------- ----------
Total noninterest expense 39,407 42,569
---------- ----------
Income (loss) before provision (benefit) for income taxes 28,691 (161,553)
Provision (benefit) for income taxes 10,254 (52,362)
---------- ----------
NET INCOME (LOSS) $ 18,437 $ (109,191)
========== ==========
</TABLE>
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LOCAL FINANCIAL CORPORATION AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------------
1998 1997
-------- --------
<S> <C> <C>
SELECTED FINANCIAL RATIOS
Yield on earning assets 7.81 % 7.77 %
Cost of funds 5.24 5.86
Interest rate spread 2.57 1.91
Net interest margin 2.91 2.13
Return on average assets 0.93 (4.35)
Return on average equity 17.73 (117.17)
PER SHARE DATA
Basic earnings per share $ 0.90 ($6.52)
Diluted earnings per share $ 0.89 ($6.52)
Book value per share $ 5.78 $4.19
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------ Percent
1998 1997 Change
------------- -------------
<S> <C> <C> <C>
FINANCIAL CONDITION DATA
Total assets $ 2,128,979 $ 1,881,365 13.2%
Loans receivable, net 1,362,272 953,470 42.9%
Securities available for sale 570,964 518,107 10.2%
Deposits 1,668,074 1,602,533 4.1%
Advances from the Federal Home Loan Bank of Topeka 220,033 80,136 174.6%
Senior notes 80,000 80,000 --
Stockholders' equity 118,806 82,625 43.8%
Allowance for loan losses 27,901 20,484 36.2%
</TABLE>
