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<PAGE> 1
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, 2000
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
<PAGE> 2
ITEM 5. OTHER EVENTS.
On February 4, 2000, Local Financial Corporation issued a press release
announcing its earnings for 1999. 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.
SIGNATURE
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, 2000 By: /s/ RICHARD L. PARK
---------------------------
Richard L. Park, Chief Financial Officer
<PAGE> 3
EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
DATE OF REPORT: FEBRUARY 4, 2000
<TABLE>
<CAPTION>
CONSECUTIVE
EXHIBIT NO. DESCRIPTION PAGE NO.
- ---------- ----------- -----------
<S> <C> <C>
Exhibit 99 Press Release dated February 4, 2000 4
</TABLE>
<PAGE> 1
EXHIBIT 99
LOCAL FINANCIAL CORPORATION ANNOUNCES
STRONG EARNINGS FOR 1999
Local Financial Corporation reported net income before extraordinary item for
the year ended December 31, 1999 of $22.2 million or $1.08 basic earnings per
share compared to earnings per share of $0.90 for the same period one year ago,
an increase of 20%. (Cash earnings for 1999 were $1.15 per share versus $0.96
per share for 1998.) During the year ended December 31, 1999, the Company
purchased $4.75 million of Senior Notes which had been issued in connection with
the Company's recapitalization in 1997. This move will reduce future interest
costs associated with those notes. As a result, there is an extraordinary item
charge to income amounting to $257,000 net of tax, which reduces year-to-date
net income to $22.0 million or $1.07 basic earnings per share, an increase of
19%. Chairman Edward A. Townsend stated, "We are extremely pleased with Local's
performance in 1999 and are confident and excited about the Company's plans for
the coming year".
<TABLE>
<CAPTION>
For Three Months Ended For Year Ended
December 31 December 31,
---------------------- ----------------------
1999 1998 1999 1998
-------- -------- -------- --------
(in 000's)
<S> <C> <C> <C> <C>
Net Interest Income $ 19,251 $ 16,442 $ 73,511 $ 54,766
Provision for Loan Losses (500) (500) (2,000) (1,450)
Other Operating Income 4,759 4,623 18,542 14,782
Other Operating Expense 14,385 12,804 55,177 39,407
-------- -------- -------- --------
INCOME BEFORE TAXES AND
EXTRAORDINARY ITEM $ 9,125 $ 7,761 $ 34,876 $ 28,691
Tax Provision 3,299 2,823 12,627 10,254
-------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM $ 5,826 $ 4,938 $ 22,249 $ 18,437
Extraordinary Item - Purchase and Retirement of
Senior Notes, net of tax (75) -- (257) --
-------- -------- -------- --------
NET INCOME $ 5,751 $ 4,938 $ 21,992 $ 18,437
======== ======== ======== ========
Basic Earnings per Share Before Extraordinary $ 0.28 $ 0.24 $ 1.08 $ 0.90
======== ======== ======== ========
Item
Net Income Basic Earnings per Share $ 0.28 $ 0.24 $ 1.07 $ 0.90
======== ======== ======== ========
</TABLE>
Net interest income for the year ended December 31, 1999 was $73.5 million,
representing an increase of $18.7 million or 34% over the prior year. Growth in
net interest income resulted from the Bank's
<PAGE> 2
expanding commercial lending activities as well as the acquisitions of BankSouth
Corporation in October 1998 and Green Country Bank in February of 1998. The
Company continues to gain market share in commercial lending in Oklahoma. "Our
strategy of hiring seasoned loan officers with the ability to move existing
loans has paid significant dividends," stated Mr. Townsend.
Local Financial's net loan balances increased by $323 million during 1999 or
23.7%. Non-performing assets for the Company at December 31, 1999 remained a
modest 0.44% of outstanding loans. "The primary objective behind our loan growth
is asset quality," commented Mr. Townsend.
Noninterest income for the year ended December 31, 1999 totaled $18.5 million, a
$3.8 million or 25.4% increase over prior year. Noninterest expense rose $15.8
million year-over-year reflecting an efficiency ratio of 59%.
-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.
<PAGE> 3
LOCAL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year ended
December 31,
------------------------
1999 1998
--------- ---------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME:
Loans $ 130,869 $ 96,851
Securities available for sale 34,141 41,862
Federal Home Loan Bank of Topeka and Federal Reserve
Bank stock 2,215 3,474
Other investments 1,073 5,017
--------- ---------
Total interest and dividend income 168,298 147,204
--------- ---------
INTEREST EXPENSE:
Deposit accounts 70,576 74,743
Advances from the Federal Home Loan Bank of Topeka 14,901 7,547
Securities sold under agreements to repurchase and other -- 678
Notes payable 9,310 9,470
--------- ---------
Total interest expense 94,787 92,438
--------- ---------
Net interest and dividend income 73,511 54,766
Provision for loan losses (2,000) (1,450)
--------- ---------
Net interest and dividend income after provision for loan losses 71,511 53,316
--------- ---------
NONINTEREST INCOME:
Deposit related income 13,606 10,389
Loan fees and loan service charges 2,679 1,737
Net gains on sale of assets 1,201 932
Other 1,056 1,724
--------- ---------
Total noninterest income 18,542 14,782
--------- ---------
NONINTEREST EXPENSE:
Compensation and employee benefits 28,193 19,287
Deposit insurance premiums 898 1,323
Equipment and data processing 5,942 4,276
Occupancy 4,033 3,029
Advertising 1,498 2,080
Professional fees 2,587 2,142
Other 12,026 7,270
--------- ---------
Total noninterest expense 55,177 39,407
--------- ---------
Income before income taxes and extraordinary item 34,876 28,691
Provision for income taxes 12,627 10,254
--------- ---------
Income before extraordinary item 22,249 18,437
--------- ---------
Extraordinary item - purchase and retirement of 11% Senior
Notes, net of tax (257) --
--------- ---------
Net income $ 21,992 $ 18,437
========= =========
</TABLE>
<PAGE> 4
LOCAL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks $ 48,122 $ 27,180
Interest bearing deposits with other banks 7,700 27,700
Securities available for sale 529,230 570,964
Loans receivable, net of allowance for loan losses of $28,297
at December 31, 1999 and $27,901 at December 31, 1998 1,685,550 1,362,272
Federal Home Loan Bank of Topeka stock
and Federal Reserve Bank stock, at cost 24,820 42,693
Premises and equipment, net 31,805 23,959
Assets acquired through foreclosure and repossession, net 723 693
Intangible assets, net 18,227 17,843
Current income taxes receivable and deferred tax asset, net 14,217 29,250
Other assets 21,213 26,425
----------- -----------
Total assets $ 2,381,607 $ 2,128,979
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 458,824 $ 379,796
Savings 73,546 74,963
Time 1,315,970 1,213,315
----------- -----------
Total deposits 1,848,340 1,668,074
Advances from the Federal Home Loan Bank of Topeka 302,035 220,033
Senior notes 75,250 80,000
Other liabilities 27,688 42,066
----------- -----------
Total liabilities 2,253,313 2,010,173
----------- -----------
Commitments and contingencies
Stockholders' Equity:
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, 1999 and 1998 205 205
Preferred stock, $0.01 par value, 5,000,000 shares authorized;
none outstanding -- --
Additional paid-in capital 206,758 206,758
Retained earnings 72,189 50,197
Treasury stock, 60 shares, at cost (151,274) (149,436)
Accumulated other comprehensive income 416 11,082
----------- -----------
Total stockholders' equity 128,294 118,806
----------- -----------
Total liabilities and stockholders' equity $ 2,381,607 $ 2,128,979
=========== ===========
</TABLE>
<PAGE> 5
LOCAL FINANCIAL CORPORATION AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Quarter ended Year ended
December 31, December 31,
------------------------------- -------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS
Yield on earning assets 8.08 % 7.84 % 7.92 % 7.81 %
Cost of funds 5.01 5.03 4.90 5.24
Interest rate spread 3.07 2.81 3.02 2.57
Net interest margin 3.46 3.20 3.46 2.91
Return on average assets 0.98 0.92 0.99 0.93
Return on average equity 17.97 16.79 17.65 17.73
PER SHARE DATA
Income before extraordinary item
Basic $ 0.28 $ 0.24 $ 1.08 $ 0.90
Diluted $ 0.28 $ 0.24 $ 1.08 $ 0.89
Net income
Basic $ 0.28 $ 0.24 $ 1.07 $ 0.90
Diluted $ 0.28 $ 0.24 $ 1.07 $ 0.89
Average Shares Outstanding (in thousands)
Basic 20,537 20,432 20,537 20,432
Diluted 20,537 20,607 20,537 20,607
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------- Percent
1999 1998 Change
------------- ------------- -------------
<S> <C> <C> <C>
FINANCIAL CONDITION DATA
Total assets $ 2,381,607 $ 2,128,979 11.9 %
Loans receivable, net 1,685,550 1,362,272 23.7
Securities available for sale 529,230 570,964 (7.3)
Deposits 1,848,340 1,668,074 10.8
Advances from the Federal Home Loan Bank of Topeka 302,035 220,033 37.3
Senior notes 75,250 80,000 (5.9)
Stockholders' equity 128,294 118,806 8.0
Allowance for loan losses 28,297 27,901 1.4
Book value per share $ 6.25 $ 5.78 8.1
</TABLE>
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