<PAGE>
As filed with the Securities and Exchange Commission on March 25, 1998
Registration No. 333-37511
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(INCLUDING EXHIBITS)
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PSB BANCORP, INC.
(Exact name of registrant in its charter)
<TABLE>
<CAPTION>
Pennsylvania 6035 23-2930740
<S> <C> <C>
(State or other jurisdiction of (Primary SIC No.) (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
Eleven Penn Center, Suite 2601
1835 Market Street
Philadelphia, PA 19103
(215) 979-7900
(Address and telephone number of principal executive offices and place of
business)
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Anthony DiSandro
President and Chief Operating Officer
Eleven Penn Center, Suite 2601
1835 Market Street
Philadelphia, PA 19103
(215) 979-7900
(Name, address and telephone number of agent for service)
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Copies of all communications to:
Jeffrey P. Waldron, Esquire John F. Breyer, Jr., Esquire
Stevens & Lee Aaron M. Kaslow, Esquire
One Glenhardie Corporate Center Breyer & Aguggia
1275 Drummers Lane 1300 I Street, N.W.
P.O. Box 236 Suite 470 East
Wayne, PA 19087 Washington, DC 20005
(610) 964-1480 (202) 737-7900
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 426(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 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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<PAGE>
Calculation of Registration Fee
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<TABLE>
<CAPTION>
Title
of Each Proposed Proposed
Class of Maximum Maximum Amount
Securities Amount Proposed Aggregate of
Being Being Offering Offering Registration
Registered Registered Price Price Fee
<S> <C> <C> <C> <C>
Common Stock, no Par
Value ................. 1,851,500(1) $ 10.00(1) $18,515,000(1) $ 5,610.61
Common Stock, no Par
Value ................. 1,713,198(2) $ 25.75(2) $14,919,292(2) $ 4,521.00
Total .................. 3,564,698 -- $33,434,292 $ 10,131.61
Participation interests -- -- -- (3)
</TABLE>
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(1) As to the shares of Common Stock to be issued in the Conversion Offerings,
the Purchase Price has been estimated solely for purposes of calculating
the registration fee pursuant to Rule 457(a) of the Securities Act of 1933
(the "1933 Act"). The actual number of shares to be issued and sold is
subject to adjustment based upon the estimated pro forma market value of
the registrant and market and financial conditions.
(2) The offering price of shares of Common Stock issued to security holders in
exchange for shares of Savings Bank Common Stock for purposes of the
filing fee shall be calculated pursuant to Rule 457(f)(1) and Rule 457(c)
of the 1933 Act based on the average of the bid and asked price of Savings
Bank Common Stock on October 6, 1997 multiplied by the number of shares of
Savings Bank Common Stock to be received by the registrant.
(3) The securities of PSB Bancorp, Inc. to be purchased by Pennsylvania Savings
Bank 401(k) Plan are included in the amount shown for Common Stock.
Accordingly, pursuant to Rule 457(h) of the Act, no separate fee is
required for the participation interests. Pursuant to such rule, the
amount being registered has been calculated on the basis of the number of
shares of Common Stock that may be purchased with the current assets of
such Plan.
<PAGE>
PROSPECTUS SUPPLEMENT
PSB BANCORP, INC.
PENNSYLVANIA SAVINGS BANK
EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
This Prospectus Supplement relates to the offer and sale to participants
("Participants") in the Pennsylvania Savings Bank Employees' Savings and Profit
Sharing Plan (the "Plan" or the "401(k) Plan") of participation interests and
shares of PSB Bancorp, Inc. common stock, without par value (the "Common
Stock"), as set forth herein.
In connection with the proposed reorganization of Pennsylvania Savings
Bank (the "Savings Bank" or the "Employer") from the mutual holding company
form of organization to a wholly-owned subsidiary of a stock savings and loan
holding company, PSB Bancorp, Inc. (the "Holding Company") has been formed. The
reorganization of the Savings Bank as a wholly-owned subsidiary of the Holding
Company, the exchange of shares of Savings Bank common stock ("Savings Bank
Common Stock") by public stockholders of the Savings Bank (the "Public
Stockholders") for Common Stock and the sale of Common Stock to the public (the
"Conversion Offerings") are herein referred to as the "Conversion and
Reorganization." Applicable provisions of the 401(k) Plan permit the investment
of the Plan assets in Common Stock at the direction of a Plan Participant. This
Prospectus Supplement relates to the election of a Participant to direct the
purchase of Common Stock in connection with the Conversion and Reorganization.
The Prospectus dated March 25, 1998 of the Holding Company ("Prospectus")
which is attached to this Prospectus Supplement includes detailed information
with respect to the Conversion and Reorganization, the Conversion Offerings,
the Common Stock and the financial condition, results of operation and business
of the Savings Bank and the Holding Company. This Prospectus Supplement, which
provides detailed information with respect to the Plan, should be read only in
conjunction with the Prospectus. Terms not otherwise defined in this Prospectus
Supplement are defined in the Plan or the Prospectus.
A Participant's eligibility to purchase Common Stock in the Conversion and
Reorganization through the Plan is subject to the Participant's general
eligibility to purchase shares of Common Stock in the Conversion Offerings and
the maximum and minimum limitations set forth in the Plan of Conversion. See
"THE CONVERSION AND REORGANIZATION" and "-- Limitations on Purchases of Shares"
in the Prospectus.
For a discussion of certain factors that should be considered by each
Participant, see "RISK FACTORS" in the Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC"), THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC")
OR ANY OTHER FEDERAL AGENCY OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SEC, THE OTS, THE FDIC OR ANY OTHER AGENCY OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is March 25, 1998.
No person has been authorized to give any information or to make any
representations other than those contained in the Prospectus or this Prospectus
Supplement in connection with the offering made hereby, and, if given or made,
such information and representations must not be relied upon as having been
authorized by the Holding Company, the Savings Bank or the Plan. This
Prospectus Supplement does not constitute an offer to sell or solicitation of
an offer to buy any securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. Neither the
delivery of this Prospectus Supplement and the Prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Savings Bank or the Plan since the date
hereof, or that the information herein contained or incorporated by reference
is correct as of any time subsequent to the date hereof. This Prospectus
Supplement should be read only in conjunction with the Prospectus that is
attached herein and should be retained for future reference.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
The Offering
Securities Offered .................................................... S-1
Election to Purchase Common Stock in the Conversion ................... S-1
Value of Participation Interests ...................................... S-1
Method of Directing Transfer .......................................... S-1
Time for Directing Transfer ........................................... S-1
Irrevocability of Transfer Direction .................................. S-1
Treatment of Savings Bank Common Stock Held in the Plan ............... S-2
Direction to Purchase Common Stock After the Conversion ............... S-2
Purchase Price of Common Stock ........................................ S-2
Nature of a Participant's Interest in the Holding Company Common Stock S-2
Voting and Tender Rights of Common Stock .............................. S-2
Description of the Plan
Introduction .......................................................... S-3
Eligibility and Participation ......................................... S-3
Contributions Under the Plan .......................................... S-3
Limitations on Contributions .......................................... S-4
Investment of Contributions ........................................... S-5
The Employer Stock Fund ............................................... S-5
Benefits Under the Plan ............................................... S-6
Withdrawals and Distributions from the Plan ........................... S-6
Administration of the Plan ............................................ S-7
Reports to Plan Participants .......................................... S-7
Plan Administrator .................................................... S-7
Amendment and Termination ............................................. S-7
Merger, Consolidation or Transfer ..................................... S-8
Federal Income Tax Consequences ....................................... S-8
Restrictions on Resale ................................................ S-10
Legal Opinions ........................................................... S-10
Investment Form .......................................................... S-11
</TABLE>
S-i
<PAGE>
THE OFFERING
Securities Offered
The securities offered hereby are participation interests in the Plan and
up to _______ shares, at the actual purchase price of $10.00 per share, of
Common Stock which may be acquired by the Plan for the accounts of employees
participating in the Plan. The Holding Company is the issuer of the Common
Stock. Only employees and former employees of the Savings Bank and their
beneficiaries may participate in the Plan. Information with regard to the Plan
is contained in this Prospectus Supplement and information with regard to the
Conversion and Reorganization and the financial condition, results of operation
and business of the Savings Bank and the Holding Company is contained in the
attached Prospectus. The address of the principal executive office of the
Savings Bank is Eleven Penn Center, Suite 2601, 1835 Market Street,
Philadelphia, Pennsylvania 19103. The Savings Bank's telephone number is (215)
979-7900.
Election to Purchase Common Stock in the Conversion and Reorganization
In connection with the Savings Bank's Conversion and Reorganization, each
Participant in the 401(k) Plan may direct the trustees of the Plan
(collectively, the "Trustee") to transfer up to 100% of a Participant's
beneficial interest in the assets of the Plan to the Employer Stock Fund and to
use such funds to purchase Common Stock issued in connection with the
Conversion and Reorganization. Amounts transferred may include salary deferral,
Employer matching and profit sharing contributions. The Employer Stock Fund
consists of investments in the Common Stock. Funds not transferred to the
Employer Stock Fund will be invested at the Participant's discretion in the
other investment options available under the Plan. See "DESCRIPTION OF THE PLAN
- -- Investment of Contributions" below. A Participant's ability to transfer
funds to the Employer Stock Fund in the Conversion Offerings is subject to the
Participant's general eligibility to purchase shares of Common Stock in the
Conversion Offerings. For general information as to the ability of the
Participants to purchase shares in the Conversion Offerings, see "THE
CONVERSION AND REORGANIZATION -- The Subscription, Direct Community and
Syndicated Community Offerings" in the attached Prospectus.
Value of Participation Interests
The assets of the Plan are valued on an ongoing basis and each Participant
is informed of the value of his or her beneficial interest in the Plan on a
semi-annual basis. This value represents the market value of past contributions
to the Plan by the Savings Bank and by the Participants and earnings thereon,
less previous withdrawals, and transfers from the Savings Fund.
Method of Directing Transfer
The last page of this Prospectus Supplement is an investment form to
direct a transfer to the Employer Stock Fund ("Investment Form"). If a
Participant wishes to transfer funds to the Employer Stock Fund to purchase
Common Stock issued in connection with the Conversion Offerings, the
Participant should indicate that decision in Part 2 of the Investment Form. If
a Participant does not wish to make such an election, he or she does not need
to take any action.
Time for Directing Transfer
The deadline for submitting a direction to transfer amounts to the
Employer Stock Fund in order to purchase Common Stock issued in connection with
the Conversion Offerings is __________, 1998. The Investment Form should be
returned to _______________ at the Savings Bank no later than the close of
business on such date.
Irrevocability of Transfer Direction
A Participant's direction to transfer amounts credited to such
Participant's account in the Plan to the Employer Stock Fund in order to
purchase shares of Common Stock in connection with the Conversion Offerings
shall be irrevocable. Participants, however, will be able to direct the sale of
Common Stock, as explained below.
S-1
<PAGE>
Treatment of Savings Bank Common Stock Held in the Plan
Shares of Savings Bank Common Stock held in the Employer Stock Fund prior
to the consummation of the Conversion and Reorganization will be treated in the
same manner as shares held by other Public Stockholders. Such shares will be
exchanged for shares of Common Stock pursuant to the Exchange Ratio.
Application of the Exchange Ratio will result in the holders of the outstanding
Savings Bank Common Stock owning, in the aggregate, approximately the same
percentage of the Common Stock to be outstanding upon the completion of the
Conversion and Reorganization as the percentage of Savings Bank Common Stock
owned by them, in the aggregate, immediately prior to the consummation of the
Conversion. For additional information regarding the treatment of Savings Bank
Common Stock, see "THE CONVERSION AND REORGANIZATION" in the Prospectus.
Direction to Purchase Common Stock After the Conversion and Reorganization
After the Conversion and Reorganization, a Participant will be able to
direct that a certain percentage of such Participant's interests in the trust
assets (the "Trust") be transferred to the Employer Stock Fund and invested in
Common Stock or to the other investment funds available under the Plan.
Alternatively, a Participant may direct that a certain percentage of such
Participant's interest in the Employer Stock Fund be transferred from the
Employer Stock Fund to other investment funds available under the Plan.
Participants will be permitted to direct that future contributions made to the
Plan by or on their behalf be invested in Common Stock. Following the initial
election, the allocation of a Participant's interest in the Employer Stock Fund
may be changed by the Participant on a quarterly basis. Special restrictions
may apply to transfers directed by those Participants who are executive
officers, directors and principal stockholders of the Holding Company who are
subject to the provisions of Section 16(b) of the Securities and Exchange Act
of 1934, as amended (the "Exchange Act").
Purchase Price of Common Stock
The funds transferred to the Employer Stock Fund for the purchase of
Common Stock in connection with the Conversion will be used by the Trustee to
purchase shares of Common Stock. The price paid for such shares of Common Stock
will be the same price as is paid by all other persons who purchase shares of
Common Stock in the Conversion Offerings.
Nature of a Participant's Interest in the Holding Company Stock
The Holding Company Stock purchased for an account of a Participant will
be held in the Employer Stock Fund. Any earnings, losses or expenses with
respect to the Common Stock, including dividends and appreciation or
depreciation in value, will be credited or debited to the account and will not
be credited to or borne by any other accounts.
Voting and Tender Rights of Common Stock
The Trustee generally will exercise voting and tender rights attributable
to all Common Stock held by the Trust as directed by Participants with an
interest in the Employer Stock Fund. With respect to each matter as to which
holders of Common Stock have the right to vote, each Participant will be
allocated a number of voting instruction rights reflecting such Participant's
proportionate interest in the Employer Stock Fund. The percentage of shares of
Common Stock held in the Employer Stock Fund that are voted in the affirmative
or negative on each matter shall be the same percentage of the total number of
voting instruction rights that are exercised in either the affirmative or
negative, respectively.
S-2
<PAGE>
DESCRIPTION OF THE PLAN
Introduction
The Savings Bank adopted the Plan effective as an amendment and
restatement of the Savings Bank's prior retirement plan. The Plan is a cash or
deferred arrangement established in accordance with the requirement under
Section 401(a) and Section 401(k) of the Internal Revenue Code of 1986, as
amended ("Code").
The Savings Bank intends that the Plan, in operation, will comply with the
requirements under Section 401(a) and Section 401(k) of the Code. The Savings
Bank will adopt any amendments to the Plan that may be necessary to ensure the
qualified status of the Plan under the Code and applicable Treasury
Regulations. The Savings Bank has received a determination from the Internal
Revenue Service ("IRS") that the Plan is qualified under Section 401(a) of the
Code and that it satisfies the requirements for a qualified cash or deferred
arrangement under Section 401(k) of the Code.
Employee Retirement Income Security Act. The Plan is an "individual
account plan" other than a "money purchase pension plan" within the meaning of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). As
such, the Plan is subject to all of the provisions of Title I (Protection of
Employee Benefit Rights) and Title 11 (Amendments to the Internal Revenue Code
Relating to Retirement Plans) of ERISA, except the funding requirements
contained in Part 3 of Title I of ERISA, which by their terms do not apply to
an individual account plan (other than a money purchase pension plan). The Plan
is not subject to Title IV (Plan Termination Insurance) of ERISA. Neither the
funding requirements contained in Title IV of ERISA nor the plan termination
insurance provisions contained in Title IV will be extended to Participants or
beneficiaries under the Plan.
APPLICABLE FEDERAL LAW REQUIRES THE PLAN TO IMPOSE SUBSTANTIAL
RESTRICTIONS ON THE RIGHT OF A PLAN PARTICIPANT TO WITHDRAW AMOUNTS HELD FOR
HIS OR HER BENEFIT UNDER THE PLAN PRIOR TO THE PARTICIPANT'S TERMINATION OF
EMPLOYMENT WITH THE SAVINGS BANK. A SUBSTANTIAL FEDERAL TAX PENALTY MAY ALSO BE
IMPOSED ON WITHDRAWALS MADE PRIOR TO THE PARTICIPANT'S ATTAINMENT OF AGE
59-1/2, UNLESS A PARTICIPANT RETIRES AS PERMITTED UNDER THIS PLAN REGARDLESS OF
WHETHER SUCH A WITHDRAWAL OCCURS DURING HIS OR HER EMPLOYMENT WITH THE SAVINGS
BANK OR AFTER TERMINATION OF EMPLOYMENT.
Reference to Full Text of Plan. The following statements are summaries of
the material provisions of the Plan. They are not complete and are qualified in
their entirety by the full text of the Plan, which is filed as an exhibit to
the registration statement filed with the SEC. Copies of the Plan are available
to all employees by filing a request with the Plan Administrator. Each employee
is urged to read carefully the full text of the Plan.
Eligibility and Participation
Any employee of the Savings Bank is eligible to participate and will
become a Participant in the Plan following completion of two years of service
with the Savings Bank and the attainment of age 21. The Plan fiscal year is the
calendar year ("Plan Year"). Directors who are not employees of the Savings
Bank are not eligible to participate in the Plan.
During 1997, approximately 19 employees participated in the Plan.
Contributions Under the Plan
Participant Contributions. Each Participant in the Plan is permitted to
elect to reduce such Participant's Compensation (as defined below) pursuant to
a salary reduction agreement and have that amount (limited to 15 percent of
Compensation) contributed to the Plan on such Participant's behalf. Such
amounts are credited to the Participant's deferral contributions account. For
purposes of the Plan, "Compensation" means a Participant's total amount of
earnings reportable W-2 wages for federal income tax withholding purposes plus
a Participant's elective deferrals pursuant to a salary reduction agreement
under the Plan or any elective deferrals to a Section
S-3
<PAGE>
125 plan. Due to recent statutory changes, the annual Compensation of each
Participant taken into account under the Plan is limited to $160,000 (as
adjusted under applicable Code provisions). A Participant may elect to modify
the amount contributed to the Plan under the participant's salary reduction
agreement during the Plan Year. Deferral contributions are generally
transferred by the Savings Bank to the Trustee of the Plan on a periodic basis.
Employer Contributions. The Savings Bank currently matches [50%] of a
Participant's monthly deferral contributions to a maximum of [3%] of
Compensation. In addition, the Savings Bank may make discretionary
contributions in proportion to each Participant's Compensation.
Limitations on Contributions
Limitations on Annual Additions and Benefits. Pursuant to the requirements
of the Code, the Plan provides that the amount of contributions allocated to
each Participant's Account during any Plan Year may not exceed the lesser of
25% of the Participant's "Section 415 Compensation" for the Plan Year or
$30,000 (as adjusted periodically under applicable Code provisions). A
Participant's "Section 415 Compensation" is a Participant's Compensation,
excluding any amount contributed to the Plan under a salary reduction agreement
or any employer contribution to the Plan or to any other plan or deferred
compensation or any distributions from a plan of deferred compensation. In
addition, annual additions are limited to the extent necessary to prevent the
limitations for the combined plans of the Savings Bank from being exceeded. To
the extent that these limitations would be exceeded by reason of excess annual
additions to the Plan with respect to a Participant, the excess must be
reallocated to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year.
Limitation on 401(k) Plan Contributions. The annual amount of deferred
compensation of a Participant (when aggregated with any elective deferrals of
the Participant under any other employer plan, a simplified employee pension
plan or a tax-deferred annuity) may not exceed $10,000 (as adjusted
periodically under applicable Code provisions). Contributions in excess of this
limitation ("excess deferrals") will be included in the Participant's gross
federal income tax purposes in the year they are made. In addition, any such
excess deferral will again be subject to federal income tax when distributed by
the Plan to the Participant, unless the excess deferral (together with any
income allocable thereto) is distributed to the Participant not later than the
first March 15th following the close of the taxable year in which the excess
deferral is made. Any income on the excess deferral that is distributed not
later than such date shall be treated, for federal income tax purposes, as
earned and received by the Participant in the taxable year in which the excess
deferral is made.
Limitation on Plan Contributions for Highly Compensated
Employees. Sections 401(k) and 401(m) of the Code limit the amount of deferred
compensation contributed to the Plan in any Plan Year on behalf of Highly
Compensated Employees (defined below) in relation to the amount of deferred
compensation contributed by or on behalf of all other employees eligible to
participate in the Plan. Specifically, the actual deferral percentage for a
Plan Year (i.e., the average of the ratios, calculated separately for each
eligible employee in each group, by dividing the amount of salary reduction
contributions credited to the salary reduction contribution account of such
eligible employee by such employee's compensation for the Plan Year) of the
Highly Compensated Employees may not exceed the greater of (a) 125% of the
actual deferred percentage of all other eligible employees, or (b) the lesser
of (i) 100% of the actual deferred percentage of all other eligible employees,
or (ii) the actual deferral percentage of all other eligible employees plus two
percentage points. In addition, the actual contribution percentage for a Plan
Year (i.e., the average of the ratios calculated separately for each eligible
employee in each group, by dividing the amount of employer contributions
credited to the Matching contributions account of such eligible employee by
each eligible employee's compensation for the Plan Year) of the Highly
Compensated Employees may not exceed the greater of (a) 125% of the actual
contribution percentage of all other eligible employees, or (b) the lesser of
(i) 200% of the actual contributions percentage of all other eligible
employees, or (ii) the actual contribution percentage of all other eligible
employees plus two percentage points.
In general, a Highly Compensated Employee includes any employee who,
during the Plan Year or the preceding Plan Year, (1) was at any time a 5% owner
(i.e., owns directly or indirectly more than 5% of the stock of the Employer,
or stock possessing more than 5% of the total combines voting power of all
stock of the Employer) or, (2) during the preceding Plan Year, received Section
415 Compensation in excess of $80,000 (as adjusted periodically under
applicable Code provisions) and, if elected by the Savings Bank, was in the top
paid group of employees for such Plan Year.
S-4
<PAGE>
In order to prevent disqualification of the Plan, any amounts contributed
by Highly Compensated Employees that exceed the average deferral limitation in
any Plan Year ("excess contributions"), together with any income allocable
thereto, must be distributed to such Highly Compensated Employees before the
close of the following Plan Year. However, the Savings Bank will be subject to
a 10% excise tax on any excess contributions unless such excess contributions,
together with any income allocable thereto, either are recharacterized or are
distributed before the close of the first 2 1/2 months following the Plan Year
to which such excess contributions relate. In addition, in order to avoid
disqualification of the Plan, any contributions by Highly Compensated Employees
that exceed the average contribution limitation in any Plan Year ("excess
aggregate contributions") together with any income allocable thereto, must be
distributed to such Highly Compensated Employees before the close of the
following Plan Year. However, the 10% excise tax will be imposed on the Savings
Bank with respect to any excess aggregate contributions, unless such amounts,
plus any income allocable thereto, are distributed within 2 1/2 months
following the close of the Plan Year in which they arose.
Top-Heavy Plan Requirements. If, for any Plan Year, the Plan is a
Top-Heavy Plan (as defined below), then (i) the Savings Bank may be required to
make certain minimum contributions to the Plan on behalf of non-key employees
(as defined below), and (ii) certain additional restrictions would apply with
respect to the combination of annual additions to the Plan and projected annual
benefits under any defined plan maintained by the Savings Bank.
In general, the Plan will be regarded as a "Top-Heavy Plan" for any Plan
Year, if as of the last day of the preceding Plan Year, the aggregate balance
of the accounts of all Participants who are key Employees exceeds 60% of the
aggregate balance of the Accounts of the Participants. "Key Employees"
generally include any employee, who at any time during the Plan Year or any
other the four preceding Plan Years, if (1) an officer of the Savings Bank
having annual compensation in excess of $60,000 who is in administrative or
policy-making capacity, (2) one of the ten employees having annual compensation
in excess of $30,000 and owing, directly or indirectly, the largest interest in
the employer, (3) a 5% owner of the employer (i.e., owns directly or indirectly
more than 5% of the stock of the employer, or stock possessing more than 5% of
the total combined voting power of all stock of the employer), or (4) a 1% of
owner of the employer having compensation in excess of $150,000.
Investment of Contributions
All amounts credited to Participant's Accounts under the Plan are held in
the Trust which is administered by the Trustee. The Trustee is appointed by the
Savings Bank's Board of Directors. The Plan provides that a Participant may
direct the Trustee to invest all or a portion of his or her Accounts in various
managed investment portfolios, made available by the Trustee from time to time.
A Participant may periodically elect to change his or her investment directions
with respect to both past contributions and for more additions to the
Participant's accounts invested in these investment alternatives. A Participant
may also invest all or a portion of his or her Accounts in these investment
vehicles and in a fund which invests in common stock of the Holding Company.
A Participant may elect, to have both past and future contributions and
additions to the Participant's Account invested either in the Employer Stock
Fund or in any of the other managed portfolios listed above. Any amounts
credited to a Participant's Accounts for which investment directions are not
given will be invested by the Trustee.
The net gain (or loss) in the Accounts from investments (including
interest payments, dividends, realized and unrealized gains and losses on
securities, and expenses paid from the Trust) are determined on a quarterly
basis. For purposes of such allocation, all assets of the Trust are valued at
their fair market value.
The Employer Stock Fund
The Employer Stock Fund consists of investments in Common Stock. In
connection with the Conversion Offerings, pursuant to the attached Investment
Form, Participants will be able to change their investments at a time other
than the normal election intervals. Any cash dividends paid on Common Stock
held in the Employer Stock Fund will be credited to a cash dividend subaccount
for each Participant investing in the Employer Stock Fund. To the extent
practicable, all amounts held in the Employer Stock Fund (except the amounts
credited to
S-5
<PAGE>
cash dividend subaccounts) will be used to purchase shares of Common Stock. It
is expected that all purchases will be made at prevailing market prices.
Pending investment in Common Stock, assets held in the Employer Stock Fund will
be placed in bank deposits and other short-term investments.
When Common Stock is purchased or sold, the cost or net proceeds are
charged or credited to the Accounts of Participants affected by the purchase or
sale. A Participant's Account will be adjusted to reflect changes in the value
of shares of Common Stock resulting from stock dividends, stock splits and
similar changes.
To the extent dividends are not paid on Common Stock held in the Employer
Stock Fund, the return on any investment in the Employer Stock Fund will
consist only of the market value appreciation of the Common Stock subsequent to
its purchase.
Investments in the Employer Stock Fund may involve certain risk factors
associated with investments in Common Stock of the Holding Company. For a
discussion of these risk factors, see "RISK FACTORS" on pages ___ through ___
in the Prospectus.
Benefits Under the Plan
Vesting. A Participant, has at all times a fully vested, nonforfeitable
interest in all of his or her deferred contributions and the earnings thereon
under the Plan. A Participant is 100% vested in his or her matching
contributions account and employer discretionary contributions after the
completion of three years of service under the Plan's vesting schedule, or upon
normal retirement (as defined herein), disability or death of a Participant.
Withdrawals and Distributions from the Plan
APPLICABLE FEDERAL LAW REQUIRES THE PLAN TO IMPOSE SUBSTANTIAL
RESTRICTIONS ON THE RIGHT OF A PLAN PARTICIPANT TO WITHDRAW AMOUNTS HELD FOR
HIS OR HER BENEFIT UNDER THE PLAN PRIOR TO THE PARTICIPANT'S ATTAINMENT OF AGE
59 1/2 UNLESS A PARTICIPANT RETIRES AS PERMITTED UNDER THE PLAN REGARDLESS OF
WHETHER SUCH A WITHDRAWAL OCCURS DURING HIS OR HER EMPLOYMENT WITH THE SAVINGS
BANK.
Distribution Upon Retirement, Disability or Termination of
Employment. Payment of benefits to a Participant who retires, incurs a
disability, or otherwise terminates employment generally shall be made in a
lump sum cash payment. At the request of the Participant, the distribution may
include an in-kind distribution of Common Stock credited to the Participant's
Account. A Participant whose total vested account balance equals or exceeds
$3,500 at the time of termination, may elect, in lieu of a lump sum payments,
to be paid in annual installments over a period not exceeding the life
expectancy of the Participant or the joint life expectancies of the Participant
and his or her designated beneficiary. Benefits payments ordinarily shall be
made not later than 60 days following the end of the Plan Year in which occurs
later of the Participant's: (i) termination of employment; (ii) attainment of
age 65; or (iii) tenth anniversary of commencement of participation in the
Plan; but in no event later than April 1 following the calendar year in which
the Participant attains age 70 1/2 (if the Participant is retired). However, if
the vested portion of the Participant's Account balances exceeds $3,500, no
distribution shall be made from the Plan prior to the Participant's attaining
age 65 unless the Participant consents to an earlier distribution. Special
rules may apply to the distribution of Common Stock of the Holding Company to
those Participants who are executive officers, directors and principal
shareholders of the Holding Company who are subject to the provisions of
Section 16(b) of the Exchange Act.
Distribution upon Death. A Participant who dies prior to the benefit
commencement date for retirement, disability or termination of employment, and
who has a surviving spouse, shall have his or her benefits paid to the
surviving spouse in a lump sum, or if the payment of his or her benefits had
commenced before his or her death, in accordance with the distribution method
in effect at his or her death. With respect to an unmarried Participant, and in
the case of a married Participant with spousal consent to the designation of
another beneficiary, payment of benefits to the beneficiary, payments of
benefits to the beneficiary of a deceased Participant shall be made in the form
of a lump sum payment in cash or in Common Stock, or if the payment of his or
her benefit had commenced before his or her death, in accordance with the
distribution method if effect at death.
S-6
<PAGE>
Nonalienation of Benefits. Except with respect to federal income tax
withholding and as provided with respect to a qualified domestic relations
order (as defined in the Code), benefits payable under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution, or levy of any kind,
either voluntary or involuntary, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any rights
to benefits payable under the Plan shall be void.
Administration of the Plan
Trustee. The Trustees with respect to Plan assets, including the Employer
Stock Fund, are currently Vincent J. Fumo and Anthony DiSandro. The Savings
Bank also serves as custodian of the Plan's assets. Except as otherwise
indicated by the context, references in this Prospectus Supplement to the
Trustee refer to Messrs. Fumo and DiSandro.
Pursuant to the terms of the Plan, the Trustee receives and holds
contributions to the Plan in trust and has exclusive authority and discretion
to manage and control the assets of the Plan pursuant to the terms of the Plan
and to manage, invest and reinvest the Trust and income therefrom. The Trustee
has the authority to invest and reinvest the Trust and may sell or otherwise
dispose of Trust investments at any time and may hold trust funds uninvested.
The Trustee has authority to invest the assets of the Trust in "any type of
property, investment or security" as defined under ERISA.
The Trustee has full power to vote any corporate securities in the Trust
in person or by proxy; provided, however, that the Participants will direct the
Trustee as to voting and tendering of all Common Stock held in the Employer
Stock Fund.
The Trustee is entitled to reasonable compensation for its services and is
also entitled to reimbursement for expenses properly and actually incurred in
the administration of the Trust. The expenses of the Trustee and the
compensation of the persons so employed is paid out of the Trust except to the
extent such expenses and compensation are paid by the Savings Bank.
The Trustee must render at least annual reports to the Savings Bank and to
the Participants in such form and containing information that the Trustee deems
necessary.
Reports to Plan Participants
The administrator will furnish to each Participant a statement at least
semiannually showing (i) the balance in the Participant's Account as of the end
of that period, (ii) the amount of contributions allocated to such
Participant's Account for that period, and (iii) the adjustments to such
Participant's Account to reflect earnings or losses (if any).
Plan Administrator
A committee consisting of the Savings Bank's Chairman and Chief Executive
Officer, President, and Vice-President and Treasurer will administer the Plan
(the "Plan Administrator"). The Plan Administrator is responsible for the
administration of the Plan, interpretation of the provisions of the Plan,
prescribing procedures for filing applications for benefits, preparation and
distribution of information explaining the Plan, maintenance of plan records,
books of account and all other data necessary for the proper administration of
the Plan, and preparation and filing of all returns and reports relating to the
Plan which are required to be filed with the U.S. Department of Labor and the
IRS, and for all disclosures required to be made to Participants, beneficiaries
and others under Sections 104 and 105 of ERISA.
Amendment and Termination
The Savings Bank may terminate the Plan at any time. If the Plan is
terminated in whole or in part, then regardless of other provisions in the
Plan, each employee who ceases to be a Participant shall have a fully vested
S-7
<PAGE>
interest in his or her Account. The Savings Bank reserves the right to make,
from time to time, any amendment or amendments to the Plan which do not cause
any part of the Trust to be used for, or diverted to, any purpose other than
the exclusive benefit of the Participants or their beneficiaries.
Merger, Consolidation or Transfer
In the event of the merger or consolidation of the Plan with another plan,
or the transfer of the Trust to another plan, the Plan requires that each
Participant (if either the Plan or the other plan then terminated) receive a
benefit immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
terminated).
Federal Income Tax Consequences
The following is only a brief summary of certain federal income tax
aspects of the Plan which are of general application under the Code and is not
intended to be a complete or definitive description of the federal income tax
consequences of participating in or receiving distributions from the Plan. The
summary is necessarily general in nature and does not purport to be complete.
Moreover, statutory provisions are subject to change, as are their
interpretations, and their application may vary in individual circumstances.
Finally, the consequences under applicable state and local income tax laws may
not be the same as under the federal income tax laws.
PARTICIPANTS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO ANY
DISTRIBUTION FROM THE PLAN AND TRANSACTIONS INVOLVING THE PLAN.
The Plan has received a determination from the IRS that it is qualified
under Section 401(a) and 401(k) of the Code, and that the related Trust is
exempt from tax under Section 501(a) of the Code. A plan that is "qualified"
under these sections of the Code is afforded special tax treatment which
include the following: (1) the sponsoring employer is allowed an immediate tax
deduction for the amount contributed to the Plan of each year; (2) Participants
pay no current income tax on amounts contributed by the employer on their
behalf; and (3) earnings of the Plan are tax-exempt thereby permitting the
tax-free accumulation of income and gains on investments. The Plan will be
administered to comply in operation with the requirements of the Code as of the
applicable effective date of any change in the law. The Savings Bank expects to
timely adopt any amendments to the Plan that may be necessary to maintain the
qualified status of the Plan under the Code. Following such an amendment, the
Plan will be submitted to the IRS for a determination that the Plan, as
amended, continues to qualify under Sections 401(a) and 501(a) of the Code and
that it continues to satisfy the requirements for a qualified cash or deferred
arrangement under Section 401(k) of the Code.
Assuming that the Plan is administered in accordance with the requirements
of the Code, participation in the Plan under existing federal income tax laws
will have the following effects:
(a) Amounts contributed to a Participant's 401(k) account and the
investment earnings are actually distributed or withdrawn from the Plan.
Special tax treatment may apply to the taxable portion of any distribution that
includes Common Stock or qualified as a "Lump Sum Distribution" (as described
below).
(b) Income earned on assets held by the Trust will not be taxable to the
Trust.
Lump Sum Distribution. A distribution from the Plan to a Participant or
the beneficiary of a Participant will qualify as a "Lump Sum Distribution" if
it is made: (i) within a single taxable year of the Participant or beneficiary;
(ii) on account of the Participant's death or separation from service, or after
the Participant attains age 59 1/2; and (iii) consists of the balance to the
credits of the Participant under the Plan and all other profit sharing plans,
if any, maintained by the Savings Bank. The portion of any Lump Sum
Distribution that is required to be included in the Participant's or
beneficiary's taxable income for federal income tax purposes ("total taxable
amount") consists of the entire amount of such Lump Sum Distribution less the
amount of after-tax contributions, if any, made by the Participant to any other
profit sharing plans maintained by the Savings Bank which is included in such
distribution.
S-8
<PAGE>
Averaging Rules. The portion of the total taxable amount of a Lump Sum
Distribution ("ordinary income portion") will be taxable generally as ordinary
income for federal income tax purposes. However, for distributions occurring
prior to January 1, 2000, a Participant who has completed at least five years
of participation in the Plan before the taxable year in which the distribution
is made, or a beneficiary who receives a Lump Sum Distribution on account of
the Participant's death (regardless of the period of the Participant's
participation in the Plan or any other profit sharing plan maintained by the
Employer), may elect to have the ordinary income portion of such Lump Sum
Distribution taxed according to a special averaging rule ("five-year
averaging"). The election of the special averaging rules may apply only to one
Lump Sum Distribution received by the Participant or beneficiary, provided such
amount is received on or after the Participant turns 59 1/2 and the recipient
elects to have any other Lump Sum Distribution from a qualified plan received
in the same taxable year taxed under the special averaging rule. The special
five-year averaging rule has been repealed for distributions occurring after
December 31, 1999. Under a special grandfather rule, individuals who turned 50
by 1986 may elect to have their Lump Sum Distribution taxed under either the
five-year averaging rule (if available) or the prior law ten-year averaging
rule. Such individuals also may elect to have that portion of the Lump Sum
Distribution attributable to the Participant's pre-1974 participation in the
Plan taxed at a flat 20% rate as gain from the sale of a capital asset.
Common Stock Included in Lump Sum Distribution. If a Lump Sum Distribution
includes Common Stock, the distribution generally will be taxed in the manner
described above, except that the total taxable amount will be reduced by the
amount of any net unrealized appreciation with respect to such Common Stock,
i.e., the excess of the value of such Common Stock at the time of the
distribution over its cost to the Plan. The tax basis of such Common Stock to
the Participant or beneficiary for purposes of computing gain or loss on its
subsequent sale will be the value of the Common Stock at the time of
distribution less the amount of net unrealized appreciation. Any gain on a
subsequent sale or other taxable disposition of such Common Stock, to the
extent of the amount of net unrealized appreciation at the time of
distribution, will be considered long-term capital gain regardless of the
holding period of such Common Stock. Any gain on a subsequent sale or other
taxable disposition of the Common Stock in excess of the amount of net
unrealized appreciation at the time of distribution will be considered either
short-term capital gain or long-term capital gain depending upon the length of
the holding period of the Common Stock. The recipient of a distribution may
elect to include the amount of any net unrealized appreciation in the total
taxable amount of such distribution to the extent allowed by the regulations by
the IRS.
Distributions: Rollovers and Direct Transfers to Another Qualified Plan or
to an IRA. Pursuant to a change in the law, effective January 1, 1993,
virtually all distributions from the Plan may be rolled over to another
qualified Plan or to an individual retirement account ("IRA") without regard to
whether the distribution is a Lump Sum Distribution or Partial Distribution.
Effective January 1, 1993, Participants have the right to elect to have the
Trustee transfer all or any portion of an "eligible rollover distribution"
directly to another plan qualified under Section 401(a) of the Code or to an
IRA. If the Participant does not elect to have an "eligible rollover
distribution" transferred directly to another qualified plan of to an IRA, the
distribution will be subject to a mandatory federal withholding tax equal to
20% of the taxable distribution. An "eligible rollover distribution" means any
amount distributed from the Plan except: (1) a distribution that is (a) one of
a series of substantially equal periodic payments made (not less frequently
than annually) over the Participant's life of the joint life of the Participant
and the Participant's designated beneficiary, or (b) for a specified period of
ten years or more; (2) any amount that is required to be distributed under the
minimum distribution rules; and (3) any other distributions excepted under
applicable federal law. The tax law change described above did not modify the
special tax treatment of Lump Sum Distributions, that are not rolled over or
transferred, i.e., forward averaging, capital gains tax treatment and the
nonrecognition of net unrealized appreciation, discussed earlier.
Additional Tax on Early Distributions. A Participant who receives a
distribution from the Plan prior to attaining age 59 1/2 will be subject to an
additional income tax equal to 10% of the taxable amount of the distribution.
The 10% additional income tax will not apply, however, to the extent the
distribution is rolled over into an IRA or another qualified plan or the
distribution is (i) made to a beneficiary (or to the estate of a Participant)
on or after the death of the Participant, (ii) attributable to the
Participant's being disabled within the meaning of Section 72(m)(7) of the
Code, (iii) part of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of the Participant
and his or her beneficiary, (iv) made to the Participant after separation from
service on
S-9
<PAGE>
account of early retirement under the Plan after attainment of age 55, (v) made
to pay medical expenses to the extent deductible for federal income tax
purposes, (vi) pursuant to a qualified domestic relations order, or (vii) made
to effect the distribution of excess contributions or excess deferrals.
THE FOREGOING IS ONLY A BRIEF SUMMARY OF CERTAIN FEDERAL INCOME TAX
ASPECTS OF THE PLAN WHICH ARE OF GENERAL APPLICATION UNDER THE CODE AND IS NOT
INTENDED TO BE A COMPLETE OR DEFINITIVE DESCRIPTION OF THE FEDERAL INCOME TAX
CONSEQUENCES OF PARTICIPATING IN OR RECEIVING DISTRIBUTIONS FROM THE PLAN.
ACCORDINGLY, EACH PARTICIPANT IS URGED TO CONSULT A TAX ADVISOR CONCERNING THE
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN AND RECEIVING
DISTRIBUTIONS FROM THE PLAN.
Restrictions on Resale
Any person receiving shares of the Common Stock under the Plan who is an
"affiliate" of the Savings Bank or the Holding Company as the term "affiliate"
is used in Rules 144 and 405 under the Securities Act of 1933, as amended
("Securities Act") (e.g., directors, officers and substantial shareholders of
the Savings Bank) may reoffer or resell such shares only pursuant to a
registration statement filed under the Securities Act (the Holding Company and
the Savings Bank having no obligation to file such registration statement) or,
assuming the availability thereof, pursuant to Rule 144 or some other exemption
from the registration requirements of the Securities Act. Any person who may be
an "affiliate" of the Savings Bank or the Holding Company may wish to consult
with counsel before transferring any Common Stock owned by him or her. In
addition, Participants are advised to consult with counsel as to the
applicability of the reporting and short-swing profit liability rules of
Section 16 of the Exchange Act which may affect the purchase and sale of the
Common Stock where acquired or sold under the Plan or otherwise.
LEGAL OPINIONS
The validity of the issuance of the Common Stock will be passed upon by
Stevens & Lee, Wayne, Pennsylvania, which firm is acting as special counsel for
the Holding Company in connection with the Savings Bank's Conversion and
Reorganization from the mutual holding company of organization to a
wholly-owned subsidiary by the Holding Company.
S-10
<PAGE>
Investment Form
(Employer Stock Fund)
PENNSYLVANIA SAVINGS BANK
EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Name of Participant:___________________________________
Social Security Number:________________________________
1. Instructions. In connection with the proposed reorganization of
Pennsylvania Savings Bank (the "Savings Bank") from the mutual holding form of
organization to a wholly-owned subsidiary of a savings and loan holding company
(the "Conversion and Reorganization"), participants in the Pennsylvania Savings
Bank Employees' Savings and Profit Sharing Plan ("Plan") may elect to direct
the investment of up to ___% of their 1997 account balances into the Employer
Stock Fund ("Employer Stock Fund"). Amounts transferred at the direction of
Participants into the Employer Stock Fund will be used to purchase shares of
the common stock of PSB Bancorp, Inc. ("Common Stock"), the proposed holding
company for the Savings Bank. A Participant's eligibility to purchase shares of
Common Stock is subject to the Participant's general eligibility to purchase
shares of Common Stock in the Conversion Offerings and the maximum and minimum
limitations set forth in the Plan of Conversion. See the Prospectus for
additional information.
You may use this form to direct a transfer of funds credited to your
account to the Employer Stock Fund, to purchase Common Stock in the Conversion
Offerings. To direct such a transfer to the Employer Stock Fund, you should
complete this form and return it to ___________________ at the Savings Bank, no
later than the close of business on __________, 1998. The Savings Bank will
keep a copy of this form and return a copy to you. (If you need assistance in
completing this form, please contact _____________.
2. Transfer Direction. I hereby direct the Plan Administrator to transfer
$__________ (in increments of $10) from my Plan account to the Employer Stock
Fund to be applied to the purchase of Common Stock in the Conversion Offerings.
Please transfer this amount from the following investments in the amounts
indicated:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. Effectiveness of Direction. I understand that this Investment Form
shall be subject to all of the terms and conditions of the Plan and the terms
and conditions of the Conversion and Reorganization. I acknowledge that I have
received a copy of the Prospectus and the Prospectus Supplement.
- ------------------------------------- -------------------------------------
Signature Date
* * * * *
4. Acknowledgment of Receipt. This Investment Form was received by the
Plan Administrator and will become effective on the date noted below.
- ------------------------------------- -------------------------------------
Plan Administrator Date
S-11
<PAGE>
PROSPECTUS
PSB BANCORP, INC.
(Proposed Holding Company for Pennsylvania Savings Bank)
Up to 3,099,728 Shares of Common Stock
$10.00 Purchase Price Per Share
PSB Bancorp, Inc. (the "Holding Company"), a Pennsylvania corporation, is
offering up to 3,099,728 shares (subject to adjustment to 3,564,698 shares, see
footnote 4 below) of its common stock, no par value per share (the "Common
Stock"), in connection with (i) the Exchange Offering, described below, to
effect the reorganization of Pennsylvania Savings Bank (the "Savings Bank") as
a wholly-owned subsidiary of the Holding Company and (ii) the Conversion
Offerings, described below, to effect the conversion of PSB Mutual Holding
Company (the "MHC") from a mutual holding company to a stock holding company.
The Holding Company, Savings Bank and MHC are collectively referred to herein
as the "Primary Parties." The transactions contemplated by the Exchange
Offering and the Conversion Offerings, which are collectively referred to
herein as the "Conversion and Reorganization," are undertaken pursuant to a
Plan of Conversion from Mutual Holding Company to Stock Holding Company and
Agreement and Plan of Reorganization (the "Plan of Conversion") adopted by the
Boards of Directors or Trustees of the Primary Parties.
The Exchange Offering. Pursuant to the Plan of Conversion, each share of
common stock, par value $1.00 per share, of the Savings Bank (the "Savings Bank
Common Stock") held by the MHC (615,250 shares, or 51.5% of the outstanding
shares, as of the date of this Prospectus) will be canceled and each share of
Savings Bank Common Stock held by the Savings Bank's public shareholders (the
"Public Savings Bank Shares" and "Public Shareholders," respectively) (579,390
shares, or 48.5% of the outstanding shares, as of the date of this Prospectus)
will be exchanged for shares of Common Stock (the "Exchange Shares") pursuant
to a ratio (the "Exchange Ratio") that will result in the Public Shareholders'
aggregate ownership of approximately 48.06% of the outstanding shares of Common
Stock determined without regard to (i) payment of cash in lieu of issuing
fractional Exchange Shares and (ii) Conversion Shares (as defined below) that
may be purchased by the Public Shareholders and by the Savings Bank's employee
stock ownership plan, a tax-qualified employee benefit plan (the "ESOP"), in
the Conversion Offerings or thereafter. The final Exchange Ratio will be based
on the Public Shareholders' ownership interest in the Savings Bank and not on
the market value of the Public Savings Bank Shares. See "THE CONVERSION AND
REORGANIZATION -- Independent Valuation."
(continued on next page)
--------------
FOR INFORMATION ON HOW TO SUBSCRIBE FOR SHARES OF COMMON STOCK,
CALL THE STOCK INFORMATION CENTER AT (215) 979-7904.
--------------
FOR A DISCUSSION OF CERTAIN RISKS THAT SHOULD BE CONSIDERED BY
EACH PROSPECTIVE INVESTOR, SEE "RISK FACTORS" ON PAGE 17
--------------
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR ACCOUNTS AND WILL NOT BE
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), THE BANK
INSURANCE FUND ("BIF"), THE SAVINGS ASSOCIATION INSURANCE FUND ("SAIF") OR ANY
OTHER GOVERNMENT AGENCY.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC"), THE FDIC OR ANY OTHER FEDERAL AGENCY OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SEC, THE FDIC OR ANY OTHER AGENCY OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Estimated
Underwriting
Commissions
and Other
Fees and Estimated
Purchase Price(1) Expenses(2) Net Proceeds(3)
<S> <C> <C> <C>
Minimum Price Per Share ......................... $ 10.00 $ 0.40 $ 9.60
Midpoint Price Per Share ........................ 10.00 0.34 9.66
Maximum Price Per Share ......................... 10.00 0.30 9.70
Maximum Price Per Share, as adjusted(4) ......... 10.00 0.26 9.74
Minimum Total(5) ................................ $11,900,000 $475,000 $11,425,000
Midpoint Total(6) ............................... 14,000,000 475,000 13,525,000
Maximum Total(7) ................................ 16,100,000 475,000 15,625,000
Maximum Total, as adjusted(4)(8) ................ 18,515,000 475,000 18,040,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Determined by the Board of Directors of the Holding Company based upon an
independent appraisal prepared by RP Financial, LC., Arlington, Virginia
("RP Financial"). See "THE CONVERSION AND REORGANIZATION -- Stock Pricing,
Exchange Ratio and Number of Shares to be Issued."
(2) Includes estimated expenses to the Holding Company and the Savings Bank
arising from the Conversion and Reorganization, including fees to be paid
to Charles Webb & Company ("Webb") in connection with the Conversion
Offerings. Webb's fee consists of a $25,000 management fee and a success
fee of 1.5% of the aggregate Purchase Price of Conversion Shares sold in
the Subscription Offering and Community Offering (subject to certain
excluded Common Stock purchases). The success fee is not to exceed
$100,000 and the management fee shall be applied against the success fee,
which may be deemed to be an underwriting fee. Webb may be deemed to be an
underwriter. Expenses, other than fees to be paid to Webb, are estimated
to total approximately $375,000 at each of the minimum, midpoint, maximum
and 15% above the Estimated Valuation Range. Actual expenses may be more
or less than estimated amounts. The Holding Company and the Savings Bank
have agreed to indemnify Webb against certain liabilities, including
liabilities that might arise under the Securities Act of 1933, as amended
("Securities Act"). See "USE OF PROCEEDS" and "THE CONVERSION AND
REORGANIZATION -- Plan of Distribution for the Subscription, Direct
Community and Syndicated Community Offerings."
(3) Actual net proceeds can vary substantially from the estimated amounts
depending upon actual expenses and the number of shares sold in the
Conversion Offerings. See "USE OF PROCEEDS" and "PRO FORMA DATA."
(4) Gives effect to an increase in the number of shares that could be sold in
the Conversion Offerings resulting from an increase in the pro forma
market value of the MHC and the Savings Bank, as converted, up to 15%
above the maximum of the Estimated Valuation Range, without the
resolicitation of subscribers or any right of cancellation. The issuance
of such additional shares will be conditioned on a determination by RP
Financial that such issuance is compatible with its determination of the
estimated pro forma market value of the MHC and the Savings Bank, as
converted. See "THE CONVERSION AND REORGANIZATION -- Stock Pricing,
Exchange Ratio and Number of Shares to be Issued."
(5) Assumes the issuance of 1,190,000 Conversion Shares at $10.00 per share.
(6) Assumes the issuance of 1,400,000 Conversion Shares at $10.00 per share.
(7) Assumes the issuance of 1,610,000 Conversion Shares at $10.00 per share.
(8) Assumes the issuance of 1,851,000 Conversion Shares at $10.00 per share.
--------------
Charles Webb & Company
a Division of Keefe, Bruyette & Woods, Inc.
--------------
The date of this Prospectus is March 25, 1998.
<PAGE>
(continued from prior page)
The Conversion Offerings. Pursuant to the Plan of Conversion,
nontransferable rights to subscribe (the "Subscription Rights") for up to
1,610,000 shares (which may be increased to 1,851,500 shares under circumstances
described in footnote 4 of the table appearing on the cover page of this
Prospectus) of Common Stock (the "Conversion Shares") have been granted, in
order of priority, to (i) depositors with $50.00 or more on deposit at the
Savings Bank as of June 30, 1996 (the "Eligible Account Holders"), (ii) the
ESOP, and (iii) depositors with $50.00 or more on deposit at the Savings Bank as
of December 31, 1997 (the "Supplemental Eligible Account Holders"), subject to
the priorities and purchase limitations set forth in the Plan of Conversion (the
"Subscription Offering"). Subscription Rights are nontransferable. Persons
selling or otherwise transferring their Subscription Rights or subscribing for
Common Stock on behalf of another person will be subject to forfeiture of such
Subscription Rights and possible further sanctions and penalties imposed by
agencies of the U.S. Government and the Commonwealth of Pennsylvania.
Concurrently, but subject to the prior rights of Subscription Rights holders,
the Holding Company is offering the Conversion Shares for sale to members of the
general public through a direct community offering (the "Direct Community
Offering") with preference given first to Public Shareholders who are not
Eligible Account Holders (or Supplemental Eligible Account Holders) and then to
natural persons and trusts of natural persons who are permanent residents of
Philadelphia and Montgomery Counties of the Commonwealth of Pennsylvania (the
"Local Community"). It is anticipated that any Conversion Shares not subscribed
for in the Subscription Offering or purchased in the Direct Community Offering
will be offered to eligible members of the general public on a best efforts
basis by Webb in a syndicated community offering (the "Syndicated Community
Offering"). The Subscription Offering, the Direct Community Offering and the
Syndicated Community Offering are referred to collectively as the "Conversion
Offerings." The Primary Parties reserve the right, in their absolute discretion,
to accept or reject, in whole or in part, any or all orders in the Direct
Community Offering or the Syndicated Community Offering either at the time of
receipt of an order or as soon as practicable following the termination of the
Conversion Offerings. If an order is rejected in part, the purchaser does not
have the right to cancel the remainder of the order.
The Subscription Offering will expire at _______, Eastern Time, on
____________________, 1998 unless extended by the Primary Parties for up to
_____ days to ______________, 1998 (the "Expiration Date"). Such extension may
be granted without additional notice to subscribers. The Direct Community
Offering is also expected to terminate on the Expiration Date or at a date
thereafter, however, in no event later than _________________, 1998. The
Holding Company must receive at an office of the Savings Bank by the Expiration
Date the accompanying original Stock Order Form and a fully executed
Certification Form (collectively, the "Stock Order Form") (facsimile copies and
photocopies will not be accepted), along with full payment (or appropriate
instructions authorizing a withdrawal from a deposit account at the Savings
Bank) of $10.00 per share (the "Purchase Price") for all Conversion Shares
subscribed for or ordered. Payment by wire transfer will not be accepted. Funds
so received will be placed in segregated accounts created for this purpose at
the Savings Bank, and interest will be paid at the Savings Bank's passbook rate
from the date payment is received until the Conversion and Reorganization is
consummated or terminated. Payments authorized by withdrawals from deposit
accounts will continue to earn interest at their contractual rate until the
Conversion and Reorganization is consummated or terminated although such funds
will be unavailable for withdrawal until the Conversion and Reorganization is
consummated or terminated. Orders submitted are irrevocable until the
consummation or termination of the Conversion and Reorganization. If the
Conversion and Reorganization is not consummated within 45 days after the last
day of the Subscription and the Direct Community Offering (which date will be
no later than _________________, 1998) and the Pennsylvania Department of
Banking (the "PDOB") and FDIC consents to an extension of time to consummate
the Conversion and Reorganization, subscribers will be notified in writing of
the time period within which the subscriber must notify the Primary Parties of
his or her intention to increase, decrease or rescind his or her subscription.
If an affirmative response to any such resolicitation is not received by the
Primary Parties from subscribers, such orders will be rescinded and all funds
will be returned promptly with interest. If such period is not extended or, in
any event, if the Conversion and Reorganization is not consummated by
______________, 1998, all subscription funds will be promptly returned,
together with accrued interest and all withdrawal authorizations terminated.
Such extensions may not go beyond ____________________________, 2000.
<PAGE>
The Primary Parties have engaged Webb as their financial advisor and to
assist the Holding Company in the sale of the Conversion Shares in the
Conversion Offerings. Webb is a division of Keefe, Bruyette & Woods, Inc.
("KB&W"), a registered broker-dealer and member of the National Association of
Securities Dealers, Inc. ("NASD"). Neither KB&W nor any other registered
broker-dealer is obligated to take or purchase any Conversion Shares in the
Conversion Offerings. See "THE CONVERSION AND REORGANIZATION -- Plan of
Distribution for the Subscription, Direct Community and Syndicated Community
Offerings."
Independent Valuation. Pennsylvania law and FDIC regulations require that
the offering of Conversion Shares in the Conversion Offerings be based on an
independent valuation of the pro forma market value of the Savings Bank and the
MHC, as converted. RP Financial, LC ("RP Financial") has prepared an
independent appraisal that states that the estimated pro forma market
2
<PAGE>
value of the Conversion Shares and Exchange Shares was $26,954,178 as of
February 13, 1998 (the "Appraisal"). The Appraisal was multiplied by 51.94%,
which represents the MHC's 51.5% interest in the Savings Bank adjusted for
assets held by the MHC, to determine a midpoint of the offering range
($14,000,000), and the minimum and maximum of the range were set at 15% below
and above the midpoint, respectively, resulting in a range of $11,900,000 to
$16,100,000 (the "Estimated Valuation Range").
The Board of Directors of the Holding Company determined that the
Conversion Shares would be sold at $10.00 per share (the "Purchase Price"),
resulting in a range of 1,190,000 to 1,610,000 Conversion Shares being offered.
Upon consummation of the Conversion and Reorganization, the Conversion Shares
and the Exchange Shares will represent approximately 51.94% and 48.06%,
respectively, of the Holding Company's total outstanding shares. Based upon the
Estimated Valuation Range, the Exchange Ratio is expected to range from 1.9005
to 2.5712 resulting in a range of 1,101,131 Exchange Shares to 1,489,728
Exchange Shares to be issued in the Conversion and Reorganization. The
3,099,728 Common Shares offered hereby include up to 1,610,000 Conversion
Shares (subject to adjustment up to 1,851,000 Conversion Shares as described
herein) and up to 1,489,728 Exchange Shares (subject to adjustment up to
1,713,198 shares as described herein). The Estimated Valuation Range may be
increased or decreased to reflect changes in market and economic conditions
prior to completion of the Conversion and Reorganization, and under certain
circumstances specified herein subscribers will be resolicited and given the
right to modify or cancel their orders. See "The CONVERSION AND REORGANIZATION
- -- Stock Pricing, Exchange Ratio and Number of Shares to be Issued."
Purchase Limitations on Conversion Shares. Except for the ESOP, which is
expected to subscribe for 8% of the Conversion Shares issued in the Conversion
Offerings, the Plan of Conversion provides for the following purchase
limitations: (i) the maximum number of Conversion Shares that may be subscribed
for or purchased in all categories in the Conversion Offerings by any person,
when combined with any Exchange Shares received, shall not exceed 1% of the
Conversion Shares issued in the Conversion Offerings, and (ii) the maximum
number of Conversion Shares that may be subscribed for or purchased in all
categories in the Conversion Offerings by any person, together with all
associates or any group of persons acting in concert, when combined with any
Exchange Shares received, shall not exceed 2% of the Conversion Shares issued
in the Conversion Offerings. The minimum order is 25 Conversion Shares. See
"THE CONVERSION AND REORGANIZATION -- The Subscription, Direct Community and
Syndicated Community Offerings," "-- Procedure for Purchasing Conversion Shares
in the Subscription and Direct Community Offerings" and "-- Limitations on
Purchase of Conversion Shares."
Market for the Common Stock. The Holding Company has received [conditional
approval] to list the Common Stock on the Nasdaq National Market under the
symbol "PSBI." Prior to the Conversion and Reorganization, the Public Savings
Bank Shares have been traded on the OTC Bulletin Board under the same trading
symbol. There can be no assurance that an active and liquid trading market for
the Common Stock will develop or, if developed, will be maintained. See "RISK
FACTORS -- Absence of Prior Market for the Common Stock" and "MARKET FOR COMMON
STOCK."
3
<PAGE>
PENNSYLVANIA SAVINGS BANK
PHILADELPHIA, PENNSYLVANIA
[Map to be filed by amendment]
THE CONVERSION AND REORGANIZATION IS CONTINGENT UPON APPROVAL OF THE PLAN OF
CONVERSION BY AT LEAST A MAJORITY OF THE TOTAL NUMBER OF VOTES ELIGIBLE TO BE
CAST BY THE MHC'S MEMBERS (THE "MEMBERS") AS OF ____________, 1998 (THE "VOTING
RECORD DATE"), BY THE HOLDERS OF A MAJORITY OF THE PUBLIC SAVINGS BANK SHARES
AS OF THE VOTING RECORD DATE AND BY HOLDERS OF TWO-THIRDS OF THE SAVINGS BANK
COMMON STOCK (INCLUDING THE MHC) CAST BY HOLDERS OF SAVINGS BANK COMMON STOCK
AT THE MEETING OF SHAREHOLDERS, THE SALE OF AT LEAST 1,190,000 CONVERSION
SHARES PURSUANT TO THE PLAN OF CONVERSION, AND THE RECEIPT OF ALL APPLICABLE
REGULATORY APPROVALS.
4
<PAGE>
CAPSULE SUMMARY
PSB Bancorp, Inc......... The Holding Company was organized on October 3,
1997 under Pennsylvania law at the direction of the
Savings Bank. The Holding Company has been formed to
acquire the Savings Bank as a wholly-owned
subsidiary upon consummation of the Conversion and
Reorganization. The Holding Company has engaged
only in organizational activities to date.
PSB Mutual Holding
Company................. The MHC is the Pennsylvania-chartered mutual
holding company for the Savings Bank formed in
October 1995 to act as the mutual holding company
for the Savings Bank (the "MHC Reorganization"). As
part of the Conversion and Reorganization, the MHC
will convert to a Pennsylvania-chartered interim
stock savings bank and simultaneously merge with and
into the Savings Bank, with the Savings Bank as the
surviving entity.
Pennsylvania Savings
Bank.................... The Savings Bank is a Pennsylvania-chartered savings
bank, headquartered in Philadelphia, Pennsylvania.
The Conversion and
Reorganization.......... Under the Plan of Conversion, (i) the MHC will
convert to an interim state stock savings bank
("Interim A") and simultaneously merge with and into
the Savings Bank, pursuant to which the MHC will
cease to exist and the outstanding shares of Savings
Bank Common Stock held by the MHC will be canceled,
and (ii) an interim state stock savings bank
("Interim B") will be formed as a wholly-owned
subsidiary of the Holding Company and will merge
with and into the Savings Bank, resulting in the
Savings Bank becoming a wholly-owned subsidiary of
the Holding Company, and the outstanding Public
Savings Bank Shares will be converted into the
Exchange Shares at the rate specified by Exchange
Ratio. The Exchange Ratio will result in the holders
of the outstanding Public Savings Bank Shares
owning, in the aggregate, approximately 48.06% of
the Common Stock to be outstanding upon the
completion of the Conversion and Reorganization,
determined without regard to any (i) payment of cash
in lieu of issuing fractional Exchange Shares and
(ii) Conversion Shares that may be purchased by
Public Shareholders (including the ESOP) in the
Conversion Offerings.
The Subscription, Direct
Community and Syndicated
Community Offerings.... The Holding Company is offering up to 1,610,000
Conversion Shares in the Subscription, Direct
Community and Syndicated Community Offerings.
Conversion Shares are first being offered in the
Subscription Offering through the exercise of
Subscription Rights issued, in order of priority, to
(i) Eligible Account Holders; (ii) the ESOP; and
(iii) Supplemental Eligible Account Holders. Subject
to the prior rights of Subscription Rights holders,
Conversion Shares not subscribed for in the
Subscription Offering are being offered in the
Direct Community Offering to members of the general
public with preference given first to Public
Shareholders (who are not Eligible Account Holders
or Supplemental Eligible Account Holders)
5
<PAGE>
and then to natural persons and trusts of natural
persons who are permanent residents of the Local
Community. It is anticipated that shares not
subscribed for in the Subscription Offering and
Direct Community Offering may be offered to the
general public in the Syndicated Community
Offering.
Potential Benefits of Conversion
and Reorganization to
Management.............. The Board of Directors of the Holding Company, the
Board of Trustees of the Savings Bank, and executive
officers and employees of the Holding Company and
the Savings Bank will receive certain additional
benefits as a result of the Conversion and
Reorganization. See "MANAGEMENT -- Compensation of
Officers, Directors and Trustees Through Benefit
Plans."
Purchase Limitations..... Except for the ESOP, (i) the maximum number of
Conversion Shares that may be subscribed for or
purchased in all categories in the Conversion
Offerings by any person, when combined with any
Exchange Shares received, shall not exceed 1% of the
Conversion Shares issued in the Conversion
Offerings, and (ii) the maximum number of Conversion
Shares that may be subscribed for or purchased in
all categories in the Conversion Offerings by any
person, together with all associates or any group of
persons acting in concert, when combined with any
Exchange Shares received, shall not exceed 2% of the
Conversion Shares issued in the Conversion
Offerings. The minimum order is 25 Conversion
Shares.
Stock Pricing and Number of
Shares to be Issued in the
Conversion and
Reorganization.......... Pennsylvania law and FDIC regulations require that
the aggregate purchase price of the Conversion
Shares be based upon an independent valuation of the
pro forma market value of the MHC and the Savings
Bank, which was estimated by RP Financial to be
$26,954,178 as of February 13, 1998 (the
"Appraisal"). The Appraisal was multiplied by 51.94%
which represents the MHC's 51.5% interest in the
Savings Bank adjusted for assets held by the MHC to
determine the midpoint of the valuation range or
$14,000,000. This was multiplied by 15% to determine
the Estimated Valuation Range which ranges from
$11.90 million to $16.10 million, or from 1,190,000
Conversion Shares to 1,610,000 Conversion Shares
based on the Purchase Price as determined by the
Primary Parties. The maximum of the Estimated
Valuation Range may be increased by up to 15% and
the number of Conversion Shares may be increased to
1,851,500 shares.
Based on the 579,390 Public Savings Bank Shares
outstanding at the date of this Prospectus, and
assuming a minimum of 1,190,000 and a maximum of
1,610,000 Conversion Shares are issued in the
Conversion Offerings, the Exchange Ratio is
expected to range from approximately 1.9005
Exchange Shares to 2.5712 Exchange Shares for each
Public Savings Bank Share issued and outstanding
immediately prior to the consummation of the
Conversion and Reorganization.
6
<PAGE>
Use of Proceeds.......... The net proceeds from the sale of the Conversion
Shares are estimated to range from $11.42 million to
$15.63 million, or $18.04 million if the Estimated
Valuation Range is increased by 15%. The Holding
Company has received conditional approval from the
FDIC, the PDOB and the Board of Governors of the
Federal Reserve System (the "Federal Reserve") to
purchase all of the capital stock of the Savings
Bank to be issued in the Conversion and
Reorganization in exchange for 50% of the net
proceeds of the Conversion Offerings. This will
result in the Holding Company retaining, for general
corporate purposes, approximately $5.71 million to
$7.82 million of the net proceeds, or up to $9.02
million if the Estimated Valuation Range is
increased by 15%. See "PRO FORMA DATA" and "USE OF
PROCEEDS."
Market for Common Stock... The Holding Company has received conditional
approval to have the Common Stock listed on the
Nasdaq National Market under the symbol "PSBI" (the
current symbol for the Public Savings Bank Shares,
which are traded on the OTC Bulletin Board). See
"RISK FACTORS -- Absence of Prior Market for the
Common Stock" and "MARKET FOR COMMON STOCK."
Dividend Policy.......... Following consummation of the Conversion and
Reorganization, the Holding Company's Board of
Directors will consider adopting a policy of paying
regular cash dividends on the Common Stock. There
can be no assurance that any dividends will be paid
on the Common Stock or that if paid, such dividends
will not be reduced or eliminated in future periods.
See "DIVIDEND POLICY."
Officers', Directors' and
Trustees' Common Stock
Purchases and Beneficial
Ownership............... In addition to an aggregate of 608,545 Exchange
Shares to be received by officers and trustees of
the Savings Bank in the Exchange Offering based on
an Exchange Ratio of 2.2358, officers and trustees
are expected to subscribe for an aggregate of
approximately 43,646 Conversion Shares, or 3.34% of
the Conversion Shares based on the midpoint of the
Estimated Valuation Range, respectively. See "COMMON
STOCK TO BE PURCHASED OR RECEIVED BY MANAGEMENT."
Risk Factors............. See "RISK FACTORS" for a discussion of certain
risks related to the Conversion Offerings that
should be considered by all prospective investors.
7
<PAGE>
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR ACCOUNTS AND WILL NOT BE
INSURED OR GUARANTEED BY THE FDIC, THE BIF, THE SAIF OR ANY OTHER GOVERNMENT
AGENCY.
PROSPECTUS SUMMARY
The information set forth below should be read in conjunction with and is
qualified in its entirety by the more detailed information and Consolidated
Financial Statements (including the Notes thereto) presented elsewhere in this
Prospectus. The purchase of Common Stock is subject to certain risks. See "RISK
FACTORS.
This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "RISK FACTORS" and elsewhere in this
Prospectus.
PSB Bancorp, Inc.
The Holding Company was organized on October 3, 1997 under Pennsylvania
law at the direction of the Savings Bank. The Holding Company has been formed
to acquire the Savings Bank as a wholly-owned subsidiary upon consummation of
the Conversion and Reorganization. The Holding Company has engaged only in
organizational activities to date. The Holding Company has received conditional
approval from the Federal Reserve to become a bank holding company through the
acquisition of 100% of the capital stock of the Savings Bank. Immediately
following the Conversion and Reorganization, the only significant assets of the
Holding Company will be the outstanding capital stock of the Savings Bank, 50%
of the net proceeds of the Conversion Offerings (see "PRO FORMA DATA") and a
note receivable from the ESOP evidencing a loan to enable the ESOP to purchase
8% of the Conversion Shares issued in the Conversion and Reorganization. Funds
retained by the Holding Company will be used for general business activities.
See "USE OF PROCEEDS." Upon consummation of the Conversion and Reorganization,
the Holding Company will be classified as a bank holding company subject to
Federal Reserve regulation. See "REGULATION -- Bank Holding Company
Regulations." The main office of the Holding Company is located at Eleven Penn
Center, Suite 2601, 1835 Market Street, Philadelphia, Pennsylvania 19103 and
its telephone number is (215) 979-7900.
PSB Mutual Holding Company
The MHC is the Pennsylvania-chartered mutual holding company for the
Savings Bank. The MHC was formed in October 1995 to act as the holding company
for the Savings Bank, a Pennsylvania-chartered capital stock savings bank. The
members of the MHC consist of depositors of the Savings Bank. Currently, the
MHC's sole business activity is holding 615,250 shares of Savings Bank Common
Stock, which represents 51.5% of the outstanding shares as of the date of this
Prospectus. As part of the Conversion and Reorganization, the MHC will convert
to a Pennsylvania-chartered interim stock savings bank and simultaneously merge
with and into the Savings Bank, with the Savings Bank as the surviving entity.
The MHC's main office is located at Eleven Penn Center, Suite 2601, 1835 Market
Street, Philadelphia, Pennsylvania 19103 and its telephone number is (215)
979-7900.
Pennsylvania Savings Bank
The Savings Bank is a Pennsylvania-chartered savings bank, headquartered
in Philadelphia, Pennsylvania. The Savings Bank's deposits are insured by the
FDIC up to applicable legal limits under the BIF, however, it also pays SAIF
insurance premiums with respect to the deposits that it assumed in the MHC
Reorganization. The Savings Bank is regulated by the PDOB and the FDIC. At
December 31, 1997, the Savings Bank had total assets of $129.34 million, total
deposits of $108.73 million, and total shareholders' equity of $15.0 million,
on a consolidated basis. The Savings Bank maintains six full-service offices in
Montgomery and Philadelphia Counties, Pennsylvania. Five full-service offices
are located in South Philadelphia and the Savings Bank's main office is located
at Eleven Penn Center, Suite 2601, 1835 Market Street, Philadelphia,
Pennsylvania 19103 and its telephone number is (215) 979-7900. The Savings Bank
also has an office in Glenside, Montgomery County, Pennsylvania.
8
<PAGE>
The Savings Bank's predecessor, Pennsylvania Savings Association,
converted from a state-chartered mutual savings association to a
state-chartered mutual savings bank in 1990. Effective on October 20, 1995,
this state-chartered mutual savings bank reorganized into a mutual savings bank
holding company and transferred substantially all of its assets and liabilities
to the Savings Bank, a newly-formed stock savings bank (referred to herein as
the "MHC Reorganization.") The Savings Bank is now majority-owned by the MHC.
References in this Prospectus to the Savings Bank include the Savings Bank's
predecessors as the context requires.
On October 20, 1995, when the MHC Reorganization was consummated, the
Savings Bank completed its initial stock offering by issuing 1,173,250 shares
of Savings Bank Common Stock, of which 558,000 shares were purchased by the
Public Shareholders and 615,250 shares were issued to the MHC. Awards under the
Savings Bank 1995 Management Recognition Plan subsequent to the initial public
offering have increased the total shares issued and outstanding to 1,194,640 as
of the date of this Prospectus, of which 579,390 shares are held by the Public
Shareholders and 615,250 shares are held by the MHC.
The Savings Bank's strategy is to maximize profitability by providing
quality deposit and loan products in an efficient manner as a well-capitalized
and independent savings bank. Generally, the Savings Bank has sought to
implement this strategy by emphasizing retail deposits as its primary source of
funds and maintaining a substantial part of its assets in locally originated
residential first mortgage loans, commercial real estate loans, commercial
business loans, construction loans and consumer loans, mortgage-backed
securities and other liquid investment securities.
The Savings Bank started an expansion of its branch network by opening a
branch in Center City Philadelphia on June 14, 1996. The Savings Bank plans
further expansion of its branch network in areas contiguous to its current
market and then into the suburbs of Philadelphia by opening branch offices or
acquiring the branches of other institutions.
As part of this strategy, the Savings Bank continues to expand the
operations of TransNational Mortgage Corp. ("TNMC"), its mortgage banking
subsidiary. TNMC currently maintains a staff of six commissioned sales people
to solicit mortgage loans throughout the Philadelphia metropolitan area and
surrounding counties of Pennsylvania, New Jersey and Delaware. In addition,
TNMC is processing and servicing loans for other mortgage companies and
originating mortgages for sale in the secondary market. See "SUBSIDIARIES."
The Savings Bank also plans to increase loan origination through its
existing office network and is expanding other loan products such as commercial
real estate loans, commercial business loans, construction loans and consumer
loans. For the year ended December 31, 1997 loan originations other than
residential first mortgage loans totalled $26.75 million, or 72.42% of
originations during the period.
The Conversion and Reorganization
Purposes of the Conversion and Reorganization. The Boards of Directors of
the Primary Parties believe that the Conversion and Reorganization is in the
best interests of the MHC and its members, the Savings Bank and its
shareholders, and the communities served by the MHC and the Savings Bank. In
their decision to pursue the Conversion and Reorganization, the Boards of
Directors of the Primary Parties' considered the various advantages of the
stock holding company form of organization, including: (i) the Holding
Company's ability to repurchase Common Stock without adverse tax consequences,
unlike the Savings Bank; (ii) the Holding Company's greater flexibility under
current law and regulations relative to the MHC to acquire other financial
institutions and diversify its operations; (iii) the larger capital base of the
Holding Company relative to the Savings Bank that will result from the
Conversion Offerings; and (iv) the potential increased liquidity in the Common
Stock relative to the Public Savings Bank Shares because of the larger number
of shares of Common Stock to be outstanding upon consummation of the Conversion
and Reorganization. Currently, the Boards of Directors of the Primary Parties
have no specific plans, arrangements or understandings, written or oral,
regarding any stock repurchases or acquisitions. See "THE CONVERSION AND
REORGANIZATION -- Purposes of Conversion and Reorganization."
9
<PAGE>
Description of the Conversion and Reorganization. The Boards of Trustees
of the Savings Bank and the MHC adopted, on July 17, 1997 and amended on
September 25, 1997 and the Board of Directors of the Holding Company adopted,
on _______________, 1998 the Plan of Conversion which describes and controls
the Conversion and Reorganization. Under the Plan of Conversion, (i) the MHC
will convert to an interim Pennsylvania stock savings bank ("Interim A") and
simultaneously merge with and into the Savings Bank, pursuant to which the MHC
will cease to exist and the outstanding shares of Savings Bank Common Stock
held by the MHC (615,250 shares, or 51.5% of the outstanding Savings Bank
Common Stock as of the date of this Prospectus) will be canceled, and (ii) an
interim Pennsylvania stock savings bank ("Interim B") will be formed as a
wholly-owned subsidiary of the Holding Company and will merge with and into the
Savings Bank, resulting in the Savings Bank becoming a wholly-owned subsidiary
of the Holding Company and the outstanding Public Savings Bank Shares (579,390
shares or 48.5% of the outstanding Savings Bank Common Stock as of the date of
this Prospectus) will be converted into the Exchange Shares at the rate
specified by the Exchange Ratio. The Exchange Ratio will result in the holders
of the outstanding Public Savings Bank Shares owning, in the aggregate,
approximately 48.06% of the Common Stock, determined without regard to any (i)
payment of cash in lieu of issuing fractional Exchange Shares and (ii)
Conversion Shares that may be purchased by Public Shareholders (including the
ESOP) in the Conversion Offerings. In accordance with FDIC policy, the Public
Shareholders will receive only 48.06% of the Common Stock, which is slightly
less than their 48.5% ownership in the Savings Bank, to reflect the
contribution to the Holding Company on a consolidated basis, of the assets of
the MHC.
The following diagram outlines the current organizational structure of the
Primary Parties and their ownership interests:
Public
MHC Shareholders
51.5% 48.5%
Savings Bank
100%
Holding Company
100%
Interim B
(in formation)
The following diagram reflects the post-Conversion and Reorganization
organizational structure of the Holding Company and the Savings Bank and their
ownership interests. The ownership interests presented assumes no fractional
Exchange Shares are issued, and does not give effect to purchases of any
Conversion Shares by the Public Shareholders (including the ESOP) or the
exercise of outstanding stock options. The Exchange Ratio is subject to
adjustment if the updated Appraisal delivered prior to closing is adjusted.
Purchasers of Former Public
Conversion Shares Shareholders
51.94% 48.06%
Holding Company
100%
Savings Bank
10
<PAGE>
Required Approvals. The PDOB and the Federal Reserve have approved, and
the FDIC has issued its letter of nonobjection with respect to, the Plan of
Conversion subject to (i) the approval of the holders of at least a majority of
the total number of votes eligible to be cast by the members of the MHC as of
the close of business on the Voting Record Date at a special meeting of members
called for the purpose of considering the Plan of Conversion (the "Members'
Meeting"), (ii) the approval of the holders of at least two-thirds of the
shares of Savings Bank Common Stock (including those shares held by the MHC)
voted by holders of Savings Bank Common Stock at a meeting of shareholders
called for the purpose of considering the Plan of Conversion (the
"Shareholders' Meeting"), and (iii) the approval of the holders of at least a
majority of votes cast by the Public Savings Bank Shares as of the close of
business on the Voting Record Date present in person or by proxy at the
Shareholders' Meeting. The MHC intends to vote its shares of Savings Bank
Common Stock, in favor of the Plan of Conversion at the Shareholders' Meeting.
In addition, as of December 31, 1997, directors and executive officers of the
Primary Parties as a group (13 persons) owned of record 236,323, or 19.78%, of
the outstanding shares of Savings Bank Common Stock, which they intend to vote
in favor of the Plan of Conversion at the Shareholders' Meeting. Shareholders
of the Savings Bank are entitled to dissent with respect to the Plan of
Conversion and to obtain payment of the "fair value" of their Savings Bank
Common Stock if the Plan of Conversion is consummated. See the "Dissenters'
Rights" in the Savings Bank's Proxy Statement.
The Conversion Offerings
The Conversion Offerings are being undertaken pursuant to the Plan of
Conversion. The Holding Company is offering up to 1,610,000 Conversion Shares
in the Conversion Offerings. Conversion Shares are first being offered in the
Subscription Offering through the exercise of Subscription Rights issued, in
order of priority, to (i) Eligible Account Holders; (ii) the ESOP; and (iii)
Supplemental Eligible Account Holders. The Subscription Offering will expire on
the Expiration Date, unless extended by the Board of Directors of the Holding
Company.
Subject to the prior rights of Subscription Rights holders, Conversion
Shares not subscribed for in the Subscription Offering are being offered in the
Direct Community Offering to members of the general public with preference
given first to Public Shareholders (who are not Eligible Account Holders or
Supplemental Eligible Account Holders) and then to natural persons and trusts
of natural persons who are permanent residents of the Local Community. It is
anticipated that shares not subscribed for in the Subscription Offering and
Direct Community Offering may be offered to the general public in the
Syndicated Community Offering. The Primary Parties reserve the absolute right
to reject or accept any orders in the Direct Community Offering or the
Syndicated Community Offering (if any), in whole or in part, either at the time
of receipt of an order or as soon as practicable following the Expiration Date.
The closing with respect to all shares sold in the Conversion Offerings will
occur simultaneously, and all Conversion Shares will be sold at the Purchase
Price.
The Primary Parties have retained Webb as their financial advisor in
connection with the Conversion Offerings and to assist in soliciting
subscriptions in the Conversion Offerings on a best efforts basis. See "The
CONVERSION AND REORGANIZATION -- The Subscription, Direct Community and
Syndicated Offerings."
Potential Benefits of Conversion and Reorganization to Management
1998 Stock Option Plan. The Board of Directors of the Holding Company
intends to implement the 1998 PSB Bancorp, Inc. Stock Option Plan (the "1998
Stock Option Plan"), contingent upon receipt of shareholder approval at a
meeting of the Holding Company's shareholders to be held no earlier than six
months following the Conversion and Reorganization. Assuming 1,610,000
Conversion Shares are issued in the Conversion and Reorganization and receipt
of the required approvals, the Holding Company may grant options to purchase
161,000 shares of the Common Stock to executive officers and directors as a
group (13 persons) under the 1998 Option Plan during the life of the 1998 Stock
Option Plan. The exercise price of the options, which would be granted at no
cost to the recipient thereof, would be the fair market value of the Common
Stock subject to the option on the date the option is granted.
1998 PSB Bancorp, Inc. Management Recognition Plan. The Board of Directors
of the Holding Company intends to implement the 1998 PSB Bancorp, Inc.
Management Recognition Plan (the "1998 MRP") contingent upon the receipt of
shareholder approval at a meeting of the Holding Company's shareholders to be
held no earlier than six months following the Conversion and Reorganization.
Subject to such approval, the 1998 MRP will purchase an amount of shares after
the Conversion and Reorganization equal to up to 4% of the shares
11
<PAGE>
issued in the Conversion and Reorganization (64,400 shares at the maximum of
the Estimated Valuation Range), which are expected to be issued to executive
officers and directors of the Holding Company and its subsidiaries in the year
following the Conversion and Reorganization. Under the 1998 MRP, the shares
issued to directors and employees could be newly-issued shares or shares
purchased in the open market. No shares will be awarded under the 1998 MRP
prior to receipt of shareholder approval. Awards under the 1998 MRP would be
granted at no cost to the recipient thereof.
Prospectus Delivery and Procedure for Purchasing Conversion Shares
To ensure that each prospective purchaser receives a Prospectus at least
48 hours prior to the Expiration Date as required by Rule 15c2-8 under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), no Prospectus
will be mailed later than five days or hand delivered later than two days prior
to the Expiration Date. Execution of the Stock Order Form will confirm receipt
or delivery of a Prospectus as required by Rule 15c2-8. Stock Order Forms will
be distributed only with a Prospectus.
To ensure that Eligible Account Holders and Supplemental Eligible Account
Holders are properly identified, such parties must list all deposit accounts on
the Stock Order Form giving all names on each deposit account and the account
balance at the applicable eligibility date.
Full payment by check, cash (only if delivered in person at an office of
the Savings Bank), money order, bank draft or withdrawal authorization must
accompany an original Stock Order Form (facsimile copies and photocopies will
not be accepted) and a fully executed separate Certification Form. Payment by
wire transfer will not be accepted. Orders cannot and will not be accepted
without execution of the Certification Form appearing on the reverse side of
the Stock Order Form. See "THE CONVERSION AND REORGANIZATION -- Procedure for
Purchasing Conversion Shares in the Subscription and Direct Community
Offering."
Purchase Limitations
Except for the ESOP, which is expected to subscribe for 8% of the
Conversion Shares issued in the Conversion and Reorganization, the Plan of
Conversion provides for the following purchase limitations: (i) the maximum
number of Conversion Shares that may be subscribed for or purchased in all
categories in the Conversion Offerings by any person, when combined with any
Exchange Shares received, shall not exceed 1% of the Conversion Shares issued
in the Conversion Offerings, and (ii) the maximum number of Conversion Shares
that may be subscribed for or purchased in all categories in the Conversion
Offerings by any person, together with all associates or any group of persons
acting in concert, when combined with any Exchange Shares received, shall not
exceed 2% of the Conversion Shares issued in the Conversion Offerings. The
minimum order is 25 Conversion Shares. At any time during the Conversion
Offerings, and without further approval by the MHC Members or the Public
Shareholders, the Primary Parties, in their sole discretion, may increase any
of the purchase limitations to up to 5% of the Conversion Shares issued in the
Conversion and Reorganization. Under certain circumstances, subscribers may be
resolicited in the event of such an increase and given the opportunity to
increase, decrease or rescind their orders. If there is an oversubscription in
the Conversion Offerings, Conversion Shares will be allocated as set forth in
the Plan of Conversion. See "THE CONVERSION AND REORGANIZATION -- The
Subscription, Direct Community and Syndicated Community Offerings," "--
Procedure for Purchasing Conversion Shares in the Subscription and Direct
Community Offerings" and "-- Limitations on Purchases of Conversion Shares."
Because the purchase limitations set forth in the Plan of Conversion take into
account the Exchange Shares to be issued to the Public Shareholders for their
Public Savings Bank Shares, certain Public Shareholders, including members of
management of the Savings Bank, may be limited or have no ability to purchase
Conversion Shares in the Conversion Offerings. See "COMMON STOCK TO BE
PURCHASED OR RECEIVED BY MANAGEMENT."
Stock Pricing and Number of Shares to be Issued in the Conversion and
Reorganization
Pennsylvania law and FDIC regulations require the aggregate purchase price
of the Conversion Shares be consistent with the appraisal of the estimated pro
forma market value of the MHC and the Savings Bank, which was converted by
multiplying the Appraisal by the MHC's percentage interest in the Savings Bank
(51.5%); this
12
<PAGE>
calculation ensures that the Public Shareholders will continue to hold
approximately the same aggregate percentage ownership interest in the Holding
Company as they held in the Savings Bank before the Conversion and
Reorganization (before giving effect to the payment of cash in lieu of issuing
fractional Exchange Shares and any Conversion Shares purchased by the Public
Shareholders or the ESOP in the Conversion Offerings or thereafter). The
resulting figure represents the midpoint of the Estimated Valuation Range. This
amount is $14.00 million, or 1,400,000 Conversion Shares based on the Purchase
Price. Therefore, RP Financial estimated the pro forma market value range from
$11.9 million to $16.10 million as of December 31, 1997, and upon the Board of
Directors and Boards of Trustees of the Primary Parties choosing a purchase
price of $10.00 the number of Conversion Shares issued shall range from
1,190,000 Conversion Shares to 1,610,000 Conversion Shares based on the
Purchase Price.
The full text of the independent appraisal describes the procedures
followed, the assumptions made, limitations on the review undertaken and
matters considered, which included but did not depend on the trading market for
the Savings Bank Common Stock. See "MARKET FOR COMMON STOCK". The appraisal
will be updated or confirmed at the completion of the Conversion Offerings. The
maximum of the Estimated Valuation Range may be increased by up to 15% and the
number of Conversion Shares may be increased to 1,851,500 shares due to
material changes in the financial condition or results of operations of the
Savings Bank or changes in market conditions or general financial, economic or
regulatory conditions. No resolicitation of subscribers will be made and
subscribers will not be permitted to modify or cancel their subscriptions
unless the gross proceeds from the sale of the Conversion Shares are less than
the minimum or more than 15% above the maximum of the current Estimated
Valuation Range. All Conversion Shares will be sold at the Purchase Price,
which was established by the Board of Directors of the Holding Company. Any
increase or decrease in the number of Conversion Shares will result in a
corresponding change in the number of Exchange Shares, so that upon
consummation of the Conversion and Reorganization, the Conversion Shares and
the Exchange Shares will represent approximately 51.94% and 48.06%,
respectively, of the total outstanding shares of Common Stock. Nevertheless,
Exchange Shares may represent a lesser percentage of the total outstanding
shares of Common Stock if there are insufficient shares for the ESOP to
purchase 8.0% of the Conversion Shares issued in the Conversion and
Reorganization, and the Holding Company issues authorized but unissued shares
to the ESOP to satisfy its order. See "PRO FORMA DATA," "RISK FACTORS --
Possible Dilutive Effect of Benefit Programs" and "THE CONVERSION AND
REORGANIZATION -- Stock Pricing, Exchange Ratio and Number of Shares to be
Issued." The appraisal is not intended to be and should not be construed as a
recommendation of any kind as to the advisability of purchasing Common Stock in
the Conversion Offerings nor can assurance be given that purchasers of the
Common Stock in the Conversion Offerings will be able to sell such shares after
consummation of the Conversion and Reorganization at a price that is equal to
or above the Purchase Price. Furthermore, the pro forma shareholders' equity is
not intended to represent the fair market value of the Common Stock and may be
greater than amounts that would be available for distribution to shareholders
in the event of liquidation. A complete copy of the appraisal is available upon
request. See "ADDITIONAL INFORMATION."
Based on the 579,390 Public Savings Bank Shares outstanding at the date of
this Prospectus, and assuming a minimum of 1,190,000 and a maximum of 1,610,000
Conversion Shares are issued in the Conversion Offerings, the Exchange Ratio is
expected to range from approximately 1.9005 Exchange Shares to 2.5712 Exchange
Shares for each Public Savings Bank Share issued and outstanding immediately
prior to the consummation of the Conversion and Reorganization. The Exchange
Ratio will be affected if any stock options to purchase shares of Savings Bank
Common Stock are exercised after the date of this Prospectus and before the
consummation of the Conversion and Reorganization. If any stock options are
outstanding immediately before the consummation of the Conversion and
Reorganization, they will be converted into options to purchase shares of
Common Stock, with the number of shares subject to the option and the exercise
price per share to be adjusted based upon the Exchange Ratio so that the
aggregate exercise price remains unchanged. The duration of the options also
will be unchanged. As of the date of this Prospectus, there were outstanding
options to purchase 36,859 shares of Savings Bank Common Stock at a
weighted-average exercise price of $12.12 per share. The Savings Bank has no
plans to grant additional stock options before the consummation of the
Conversion and Reorganization.
13
<PAGE>
The following table sets forth, based upon the minimum, midpoint, maximum
and 15% above the maximum of the Valuation Price Range, the following: (i) the
total number of Conversion Shares and Exchange Shares to be issued in the
Conversion, (ii) the percentage of the total Common Stock represented by the
Conversion Shares and the Exchange Shares, and (iii) the Exchange Ratio. The
table assumes that there is no cash paid in lieu of issuing fractional Exchange
Shares.
<TABLE>
<CAPTION>
Shares
of Common
Conversion Shares Exchange Stock to Stock to
to Be Issued Be Issued
------------------------- ------------------------- be Out- Exchange
Amount Percent Amount Percent standing Ratio
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Minimum .......... 1,190,000 51.94% 1,101,131 48.06% 2,291,131 1.9005
Midpoint ......... 1,400,000 51.94% 1,295,417 48.06% 2,695,417 2.2358
Maximum .......... 1,610,000 51.94% 1,489,728 48.06% 3,099,728 2.5712
15% above
Maximum ......... 1,851,500 51.94% 1,713,198 48.06% 3,564,698 2.9569
</TABLE>
Use of Proceeds
The net proceeds from the sale of the Conversion Shares are estimated to
range from $11.43 million to $15.63 million, or $18.04 million if the Estimated
Valuation Range is increased by 15%. The Holding Company has received
conditional FDIC and PDOB approval to purchase all of the capital stock of the
Savings Bank to be issued in the Conversion and Reorganization in exchange for
50% of the net proceeds of the Conversion Offerings. This will result in the
Holding Company retaining approximately $5.72 million to $7.82 million of the
net proceeds, or up to $9.02 million if the Estimated Valuation Range is
increased by 15%. See "PRO FORMA DATA."
Receipt of 50% of the net proceeds of the sale of the Common Stock will
increase the Savings Bank's capital and will support the expansion of the
Savings Bank's existing business activities. The Savings Bank will use the
funds contributed to it for general corporate purposes, including, initially,
lending and investment in short-term U.S. Government and agency obligations.
A portion of the net proceeds retained by the Holding Company will be used
for a loan by the Holding Company to the ESOP to enable it to refinance its
existing third party loan used to purchase shares of Savings Bank Common Stock
in the MHC Reorganization $295,000 (outstanding balance at December 31, 1997)
and to purchase 8% of the shares of Conversion Shares issued in the Conversion
and Reorganization ($1.29 million at the maximum of the Estimated Valuation
Range). Such loan would be repaid principally from the Savings Bank's
contributions to the ESOP and from dividends payable on the Common Stock held
by the ESOP. The remaining proceeds retained by the Holding Company initially
will be invested primarily in short-term U.S. Government and agency obligations
or in a deposit account at the Savings Bank or another financial institution.
Such proceeds will be available for additional contributions to the Savings
Bank in the form of debt or equity, to support future diversification or
acquisition activities, as a source of dividends to the shareholders of the
Holding Company and for future repurchases of Common Stock (including possible
repurchases to fund the 1998 MRP or to provide shares to be issued upon
exercise of stock options) to the extent permitted under Pennsylvania and
federal law. The Holding Company will consider exploring opportunities to use
such funds to expand operations through acquiring or establishing additional
branch offices or acquiring other financial institutions. Currently, there are
no specific plans, arrangements, agreements or understandings, written or oral,
regarding any diversification activities. See "Use of Proceeds."
<PAGE>
Market for Common Stock
The Holding Company has never issued capital stock to the public and,
consequently, there is no existing market for the Common Stock. The Holding
Company has received conditional approval to have the Common Stock listed on
the Nasdaq National Market under the symbol "PSBI" (the current symbol for the
Public Savings Bank Shares, which are traded on the OTC Bulletin Board). The
Nasdaq National Market requires the Company to have three market makers for the
Common Stock. The Company expects that KB&W and at least two other
broker-dealers will be market makers for the Common Stock following
consummation of the Conversion and Reorganization. No assurance can be given
that an active and liquid trading market for the Common
14
<PAGE>
Stock will develop or, if developed that it will continue. Further, no
assurance can be given that purchasers will be able to sell their shares at or
above the Purchase Price after the Conversion and Reorganization. See "RISK
FACTORS -- Absence of Prior Market for the Common Stock" and "MARKET FOR COMMON
STOCK."
Dividend Policy
The Savings Bank is not currently paying dividends. Following consummation
of the Conversion and Reorganization, the Holding Company's Board of Directors
will consider adopting a policy of paying regular cash dividends on the Common
Stock. Declarations of dividends (regular and special) by the Holding Company's
Board of Directors will depend upon a number of factors, including the amount
of the net proceeds from the Conversion Offerings retained by the Holding
Company, investment opportunities available to the Holding Company or the
Savings Bank, capital requirements, regulatory limitations, the Holding
Company's and the Savings Bank's financial condition and results of operations,
tax considerations, capital requirements, industry standards, economic
conditions, and other factors, including the regulatory restrictions that
affect the payment of dividends by the Savings Bank to the Holding Company.
Consequently, there can be no assurance that any dividends will be paid on the
Common Stock or that if paid, such dividends will not be reduced or eliminated
in future periods. See "DIVIDEND POLICY."
Officers' and Directors' Common Stock Purchases and Beneficial Ownership
At December 31, 1997, officers and trustees of the Savings Bank (thirteen
persons) beneficially owned 272,182 shares of Savings Bank Common Stock. See
"MANAGEMENT OF THE SAVINGS BANK -- Beneficial Owners of Savings Bank Common
Stock." In addition to an aggregate of 608,545 Exchange Shares to be received
by officers and trustees of the Savings Bank in the Exchange Offering based on
an Exchange Ratio of 2.2358, officers and trustees are expected to subscribe
for an aggregate of approximately 46,827 Conversion Shares, or 3.34% of the
Conversion Shares based on the midpoint of the Estimated Valuation Range. See
"COMMON STOCK TO BE PURCHASED OR RECEIVED BY MANAGEMENT" and "RISK FACTORS --
Antitakeover Considerations -- Voting Control by Insiders."
Risk Factors
See "RISK FACTORS" for a discussion of certain risks related to the
Conversion and Reorganization that should be considered by all prospective
investors.
15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following tables set forth certain information concerning the
consolidated financial position and results of operations of the Savings Bank
and its subsidiaries at the dates and for the periods indicated. This
information is qualified in its entirety by reference to the detailed
information contained in the Consolidated Financial Statements and Notes
thereto presented elsewhere in this Prospectus. After the end of the Savings
Bank's fiscal year ended September 30, 1995, the Savings Bank elected to change
its fiscal year end to December 31.
<TABLE>
<CAPTION>
At or for the
years ended
December 31,
----------------------------
1997 1996
------------- -------------
(Dollars in thousands except
per share data)
<S> <C> <C>
Balance Sheet Data:
Total assets .............................................................. $ 129,338 $ 118,435
Cash and cash equivalents ................................................. 27,888 31,622
Loans receivable, net ..................................................... 61,915 52,586
Loans held for sale ....................................................... 6,575 4,598
Investment securities ..................................................... 22,621 18,973
Mortgage-backed securities ................................................ 5,002 5,942
Deposits .................................................................. 108,734 100,574
Retained earnings and shareholders'
equity (1) ............................................................... 14,998 14,169
Book value per share ...................................................... 12.55 11.94
Summary Statement of Operations:
Interest income ........................................................... 8,740 7,939
Interest expense .......................................................... 4,534 4,082
--------- ---------
Net interest income ...................................................... 4,206 3,857
Provision for loan losses ................................................. 60 133
--------- ---------
Net interest income after provision for loan losses ...................... 4,146 3,724
--------- ---------
Noninterest income ...................................................... 1,071 1,015
Noninterest expense ..................................................... 4,164 4,399
Income before income taxes ................................................ 1,053 340
Income tax provision ...................................................... 345 201
Cumulative effect of prior years of a change in accounting principle ...... -- --
--------- ---------
Net income (2) ............................................................ $ 708 $ 139
========= =========
Earnings per share -- basic (3) ........................................... $ 0.61 $ 0.12
========= =========
Earnings per share -- diluted ............................................. $ 0.60 $ 0.12
========= =========
Performance Data:
Return on average assets .................................................. 0.57% 0.12%
Return on average equity .................................................. 4.83% 0.98%
Dividend payout ratio ..................................................... -- 31.25%
Equity to assets .......................................................... 11.88% 12.29%
Interest rate spread ...................................................... 2.92% 2.88%
Asset Quality Ratios:
Nonperforming loans to total loans ........................................ 3.34% 5.21%
Nonperforming assets to total assets ...................................... 1.97% 2.74%
Allowance for loan losses to total loans .................................. 0.38% 0.39%
Allowance for loan losses to nonperforming loans .......................... 11.37% 7.45%
Allowance for loan losses to nonperforming assets ......................... 9.33% 6.38%
Net charge-offs as a percentage of total loans ............................ 0.05% 0.25%
Loans past due 90 days or more as to interest or principal and accruing
interest ................................................................. $ 200 $ 2,009
Nonaccrual loans .......................................................... 1,894 770
Total nonperforming loans ................................................. 2,094 2,779
Real estate owned (REO) ................................................... 457 465
Total nonperforming assets ................................................ 2,551 3,244
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
At or for the years ended
September 30,
-----------------------------------------
1995 1994 1993
------------- ------------ ------------
(Dollars in thousands except per share
data)
<S> <C> <C> <C>
Balance Sheet Data:
Total assets .............................................................. $ 113,232 $ 99,696 $ 96,261
Cash and cash equivalents ................................................. 29,777 21,371 30,680
Loans receivable, net ..................................................... 51,212 50,285 51,272
Loans held for sale ....................................................... 1,041 185 1,544
Investment securities ..................................................... 22,064 16,362 3,209
Mortgage-backed securities ................................................ 5,578 7,382 6,289
Deposits .................................................................. 94,588 89,429 85,804
Retained earnings and shareholders'
equity (1) ............................................................... 9,491 8,339 8,304
Book value per share ...................................................... -- -- --
Summary Statement of Operations:
Interest income ........................................................... 7,190 6,714 6,543
Interest expense .......................................................... 3,443 3,045 3,160
--------- -------- --------
Net interest income ...................................................... 3,747 3,669 3,383
Provision for loan losses ................................................. 27 21 --
--------- -------- --------
Net interest income after provision for loan losses ...................... 3,720 3,648 3,383
--------- -------- --------
Noninterest income ...................................................... 956 674 1,018
Noninterest expense ..................................................... 3,584 3,211 2,899
Income before income taxes ................................................ 1,092 1,111 1,502
Income tax provision ...................................................... 433 470 610
Cumulative effect of prior years of a change in accounting principle ...... -- -- 36
--------- -------- --------
Net income (2) ............................................................ $ 659 $ 641 $ 928
========= ======== ========
Earnings per share -- basic (3) ........................................... $ -- $ -- $ --
========= ======== ========
Earnings per share -- diluted ............................................. $ -- $ -- $ --
========= ======== ========
Performance Data:
Return on average assets .................................................. 0.60% 0.63% 1.08%
Return on average equity .................................................. 6.94% 7.24% 11.42%
Dividend payout ratio ..................................................... -- -- --
Equity to assets .......................................................... 8.65% 8.74% 8.45%
Interest rate spread ...................................................... 3.24% 3.61% 3.55%
Asset Quality Ratios:
Nonperforming loans to total loans ........................................ 4.50% 4.21% 2.94%
Nonperforming assets to total assets ...................................... 2.49% 2.49% 2.07%
Allowance for loan losses to total loans .................................. 0.40% 0.41% 0.36%
Allowance for loan losses to nonperforming loans .......................... 8.91% 9.65% 12.38%
Allowance for loan losses to nonperforming assets ......................... 7.38% 8.37% 9.36%
Net charge-offs as a percentage of total loans ............................ 0.05% -- --
Loans past due 90 days or more as to interest or principal and accruing
interest ................................................................. $ 1,565 $ 1,417 $ 1,167
Nonaccrual loans .......................................................... 770 738 344
Total nonperforming loans ................................................. 2,335 2,155 1,511
Real estate owned (REO) ................................................... 482 330 486
Total nonperforming assets ................................................ 2,817 2,485 1,997
</TABLE>
- ------------
(1) Includes only retained earnings prior to the MHC Reorganization completed
on October 20, 1995.
(2) The Savings Bank was assessed a one-time fee of $567,000 in 1996 to
recapitalize the SAIF.
(3) Represents earnings per share for the Savings Bank.
(4) Ratios annualized.
16
<PAGE>
RISK FACTORS
Before investing in shares of the Common Stock offered hereby, prospective
investors should carefully consider the Risk Factors presented below, in
addition to matters discussed elsewhere in this Prospectus.
Cost of Expansion
The Savings Bank's business strategy is to maintain its core customer base
in South Philadelphia and to expand its market to include other segments of the
metropolitan Philadelphia market. As a component of the Savings Bank's regional
expansion strategy, the Savings Bank intends to continue its expansion of and
develop nonresidential real estate lending, commercial lending, and mortgage
banking operations throughout the metropolitan Philadelphia area and the
adjacent counties in Pennsylvania, New Jersey and Delaware.
The Savings Bank's expansion strategy, including expansion of its mortgage
banking activities, has materially increased operating expenses associated with
leasing additional office space, related equipment expense and salary and
benefit expenses for additional personnel, and operating expenses are expected
to continue to increase as the Savings Bank continues to expand. Increased
revenues from the expansion of the Savings Bank's territory and services has
and will continue to lag behind the expenses incurred by implementing the
expansion strategy for the foreseeable future. Purchasers should be aware that
this expansion strategy will adversely affect the Savings Bank's earnings and
earnings per share. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- Business Strategy."
Risks of Low Return on Equity After Conversion and Reorganization
Return on equity (net income for a given period divided by average equity
during that period) is a ratio used by many investors to compare the
performance of a particular financial institution to its peers. The Savings
Bank's return on equity for the year ended December 31, 1997 was 4.83% and for
year ended December 31, 1996 it was .98% and the Holding Company's
post-Conversion and Reorganization return on equity will be less than the
average return on equity for publicly traded thrift institutions and their
holding companies. In order for the Holding Company to achieve a return on
equity comparable to the return on equity of other publicly traded companies,
the Savings Bank will have to materially increase net income or reduce
shareholders' equity, or both, commensurate with the increase in equity
resulting from the Conversion and Reorganization. Reductions in equity could be
achieved by, among other things, the payment of regular or special cash
dividends (although no assurances can be given as to their payment or, if paid,
their amount and frequency), the repurchase of shares of Common Stock subject
to applicable regulatory restrictions, or the acquisition of branch offices,
other financial institutions or related businesses (neither the Holding Company
nor the Savings Bank has any present plans, arrangements, or understandings,
written or oral, regarding any repurchase or acquisitions). See "DIVIDEND
POLICY" and "USE OF PROCEEDS." Achievement of increased net income levels will
depend on several important factors outside management's control, such as
general economic conditions, including the level of market interest rates,
competition and related factors, among others. In addition, the expenses
associated with the ESOP and the 1998 MRP (see "-- New Expenses Associated with
ESOP and 1998 MRP"), along with other post-Conversion and Reorganization
expenses are expected to contribute initially to reduced earnings levels.
Subject to market conditions, initially the Savings Bank intends to deploy the
net proceeds of the Conversion Offerings to support its lending activities to
increase earnings per share and book value per share, with the goal of
achieving a return on equity comparable to the average for publicly traded
thrift institutions and their holding companies. This goal will likely take a
number of years to achieve and no assurances can be given that this goal can be
attained. Consequently, for the foreseeable future, investors should not expect
a return on equity that will meet or exceed the average return on equity for
publicly traded thrift institutions.
Risks of Commercial and Nonresidential Lending
There are risks attendant to adding nonresidential real estate lending and
commercial lending to the business of the Savings Bank. Commercial loans are
generally more interest rate sensitive and carry higher yields than do
residential loans, and are generally believed to carry a higher level of credit
risk than do residential loans. In addition, nonresidential loans are generally
more expensive to administer than are residential loans. As
17
<PAGE>
of December 31, 1997, commercial and nonresidential loans and residential
one-to-four family loans comprised 21.24% and 71.59% of the Savings Bank's loan
portfolio. In addition, $2.82 million and $28.32 million of commercial and
non-residential and one-to-four-family loans were originated for the year ended
December 31, 1997.
The non-residential real estate lending that the Savings Bank engages in
typically involves larger loans to a single obligor and is generally viewed as
exposing the lender to a greater risk of loss than residential one-to-four
family lending. Non-residential real estate property values are also generally
subject to greater volatility than residential property values. The liquidation
values of commercial properties may be adversely affected by risks generally
incident to interests in real property, including changes or continued weakness
in general or local economic conditions and/or specific industry segments;
declines in real estate values; declines in rental, room or occupancy rates;
increases in interest rates, real estate and personal property tax rates and
other operating expenses (including energy costs); the availability of
refinancing; changes in governmental rules, regulations and fiscal policies,
including rent control ordinances, environmental legislation and taxation; and
other factors beyond the control of the borrower or the lender. It should also
be noted that the resale market for nonresidential real estate loans is less
liquid than the well established secondary market for residential real estate
loans, which could result in the Savings Bank recognizing losses upon any such
sales. For a more detailed discussion of the specific characteristics of the
Savings Bank's real estate loan portfolio, see "BUSINESS -- Business of the
Savings Bank -- Lending Activities."
Anticipated Increase in Provision for Loan Losses
Historically, the Savings Bank's loan portfolio has consisted mainly of
residential real estate loans and the amount of the allowance for loan losses
has been established based upon the Savings Bank's assessment of the risks
inherent in this residential loan portfolio. Because the Savings Bank is
expanding its origination of commercial, commercial real estate and consumer
loans, which entail greater risk than residential lending, the Savings Bank
anticipates that it will increase its provision for loan losses in future
periods. In addition, the provision for loan losses may increase in 1998 and
1999 if management determines that losses inherent in the existing portfolio of
nonaccrual loans exceeds anticipated recoveries.
Risks of Mortgage Banking
Through its subsidiary, TNMC, the Savings Bank has conducted a mortgage
banking operation since 1989. Mortgage banking consists primarily of the
origination, purchase, sale and servicing of first mortgage loans secured by
one- to four-family homes. Such loans are sold either as individual loans, as
mortgage-backed securities, or as participation certificates issued or
guaranteed by FNMA or FHLMC.
Because mortgage originations fluctuate significantly with the level of
interest rates and other economic conditions, mortgage banking revenues are
very cyclical. The profitability of mortgage banking operations depends
primarily on managing the volume of loan originations and sales and the
expenses associated with loan originations so that gains on the sale of loans
together with fee income exceeds the costs of this activity. Changes in the
level of interest rates and the condition of the local and national economies
affect the amount of loans originated by the Savings Bank and demanded by
investors to whom the loans are sold. Generally, the Savings Bank's loan
origination and sale activity and, therefore, its results of operations, may be
adversely affected by an increasing interest rate environment to the extent
such environment results in decreased loan demand by borrowers and/or
investors. Accordingly, the volume of loan originations and the profitability
of this activity can vary significantly from period to period. In addition, the
Savings Bank's results of operations are affected by the amount of non-interest
expenses associated with mortgage-banking activities, such as compensation and
benefits, occupancy and equipment expenses, and other operating costs. During
periods of reduced loan demand, the Savings Bank's results of operations may be
adversely affected to the extent that it is unable to reduce expenses
commensurate with the decline in loan originations. To the extent TNMC revenues
and profits become a significant component of the Savings Bank's consolidated
revenues and net income, which is currently planned, an investor should be
aware that earnings of the Savings Bank could fluctuate materially.
18
<PAGE>
Dependence Upon Key Personnel
The success of the Savings Bank and the Holding Company will depend
heavily on the expertise and guidance of Vincent J. Fumo, Chief Executive
Officer and Chairman of the Board of the Holding Company and the Savings Bank,
and Anthony DiSandro, the President and Chief Operating Officer of the Holding
Company and the Savings Bank, as well as certain other senior executive
officers. The loss of the services of any of these key individuals would have a
material adverse effect on the Savings Bank and the Holding Company. Neither
the Savings Bank nor the Holding Company maintains key-man life insurance with
respect to any of these individuals. See "MANAGEMENT."
Increased Expenses Associated With ESOP and 1998 MRP
The Savings Bank will recognize material employee compensation and benefit
expenses assuming the ESOP and the 1998 MRP are implemented. The amount of
these new expenses cannot be predicted because applicable accounting practices
require that they be based on the fair market value of the shares of Common
Stock when the expenses are recognized. Such expenses are recognized when
shares are committed to be released in the case of the ESOP and over the
vesting period of awards made to recipients in the case of the 1997 MRP. These
expenses have been reflected in the pro forma financial information under "PRO
FORMA DATA" assuming the Purchase Price as fair market value. Actual expenses,
however, will be based on the fair market value of the Common Stock at the time
of recognition, which may be higher or lower than the Purchase Price. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- Impact of Accounting Pronouncements and Regulatory Policies --
Accounting for Employee Stock Ownership Plans," "- Accounting for Stock-Based
Compensation," "MANAGEMENT -- Management of the Savings Bank -- Benefits --
Employee Stock Ownership Plan" and "-- Benefits -- Management Recognition
Plan."
Potential Benefits to Management
At a meeting of shareholders to be held no earlier than six months
following the consummation of the Conversion and Reorganization, the Holding
Company expects to seek approval of the 1998 MRP and the 1998 Stock Option
Plan. The Holding Company expects to acquire Common Stock on behalf of the 1998
MRP in an amount equal to 4% of the Common Stock issued in the Conversion and
Reorganization, or 47,600 and 64,400 Conversion Shares at the minimum and the
maximum of the Estimated Valuation Range, respectively. These shares will be
acquired either through open market purchases or from authorized but unissued
shares of Common Stock. In addition, the Holding Company intends to reserve for
future issuance pursuant to the 1998 Stock Option Plan a number of authorized
shares of Common Stock equal to 10% of the Conversion Shares issued in the
Conversion and Reorganization (119,000 and 161,000 Conversion Shares at the
minimum and the maximum of the Estimated Valuation Range, respectively).
Voting Control by Insiders. In addition to an aggregate of 608,545
Exchange Shares to be received by trustees or directors, as the case may be,
and officers of the Savings Bank and the Holding Company in the Exchange
Offering based on an Exchange Ratio of 2.2358, directors and officers expect to
subscribe for 46,827 Conversion Shares. Directors and officers are also
expected to control indirectly the voting of approximately 8% of the shares of
Common Stock issued in the Conversion and Reorganization to the ESOP. Under the
terms of the ESOP, the unallocated shares will be voted by the ESOP trustees in
the same proportion as the votes cast by participants with respect to the
allocated shares. Mr. Fumo and Mr. DiSandro serve as the ESOP trustees.
19
<PAGE>
Assuming (i) the receipt of Exchange Shares and the purchase of Conversion
Shares by the directors and officers described above, (ii) the implementation
of the 1998 MRP and the 1998 Stock Option Plan, (iii) the open market purchase
of shares on behalf of the 1998 MRP, (iv) the purchase by the ESOP of 8% of the
Conversion Shares sold in the Conversion Offerings, and (v) the grant of stock
options equal to 10% of the number of shares of Conversion Shares issued in the
Conversion and Reorganization, directors, officers and employees of the Holding
Company and the Savings Bank would have voting control, on a fully diluted
basis, of 36.05% and 35.51% of the Common Stock, based on the issuance of the
minimum and maximum of the Estimated Valuation Range, respectively.
Management's potential voting control might preclude or make more difficult
takeover attempts that certain shareholders may deem to be in their best
interest and might tend to perpetuate existing management.
As a result of the purchases by management and the number of Exchange
Shares to be received by management, management could acquire a substantial
interest in the Company and, if each member of management were to act
consistently with each other, could have significant influence over the outcome
of the election of directors and any other shareholder vote, especially a vote
on matters requiring the approval of 80% of the outstanding Common Stock, such
as certain business combinations. Management might thus have the power to
authorize actions that may be viewed as contrary to the best interests of
non-affiliated holders of Common Stock and might have substantial power to
block actions that such holders may deem to be in their best interests. See
"Pro Forma Data," "Management -- Certain Benefit Plans and Agreements," "The
Conversion -- Proposed Management Purchases," and "Certain Restrictions on
Acquisition of the Company."
Provisions of Employment and Severance Agreements and Severance Plan. The
employment agreements of Vincent J. Fumo and Anthony DiSandro provide for cash
severance payments and/or the continuation of health, life and disability
benefits in the event of their termination of employment following a change in
control of the Holding Company or the Savings Bank. Assuming a change of
control occurred as of December 31, 1997, the aggregate value of the severance
benefits available to these executive officers under the agreements would have
been approximately $4.6 million excluding the value of health insurance, life
insurance and disability benefits. These agreements and plans may have the
effect of increasing the costs of acquiring the Holding Company, thereby
discouraging future attempts to take over the Holding Company or the Savings
Bank. See "MANAGEMENT -- Management of the Savings Bank -- Benefits,"
"RESTRICTIONS ON ACQUISITION OF THE HOLDING COMPANY" and "DESCRIPTION OF
CAPITAL STOCK OF THE HOLDING COMPANY."
Possible Dilutive Effect of Benefit Programs
The 1998 MRP intends to acquire an amount of Common Stock equal to 4% of
the Conversion Shares issued in the Conversion and Reorganization. Such shares
of Common Stock may be acquired by the Holding Company in the open market or
from authorized but unissued shares of Common Stock. If the 1998 MRP acquires
authorized but unissued shares of Common Stock from the Holding Company, the
voting interests of existing shareholders will be diluted and net income per
share and shareholders' equity per share will be decreased. See "PRO FORMA
DATA" and "MANAGEMENT -- Management of the Savings Bank -- Benefits -
Management Recognition Plan." The 1998 MRP is subject to approval by the
Holding Company's shareholders.
The 1998 Stock Option Plan will provide for options to acquire up to a
number of shares of Common Stock of the Holding Company equal to 10% of the
Conversion Shares issued in the Conversion and Reorganization. Upon exercise of
the options, Shares may be issued from authorized but unissued shares which
would result in the dilution of the voting interests of existing shareholders
and may decrease net income per share and shareholders' equity per share. See
"MANAGEMENT -- Management of the Savings Bank -- Benefits -- 1998 Stock Option
Plan." The 1998 Stock Option Plan is subject to approval by the Holding
Company's shareholders.
The Savings Bank maintains a 1995 Stock Option Plan that was implemented
in connection with the MHC Reorganization. As of the date of this Prospectus,
no shares of Savings Bank Common Stock remain reserved for issuance under the
1995 Stock Option Plan and options for 35,859 shares have been granted to
optionees but remain unexercised. Upon consummation of the Conversion and
Reorganization, the 1995 Stock Option Plan will be assumed by the Holding
Company and shares of Common Stock will be issued in lieu of shares of Savings
Bank Common Stock pursuant to the terms of the 1995 Stock Option Plan.
20
<PAGE>
The Board of Directors expects it will award over time MRP shares and
grant options to officers, directors and employees of the Holding Company and
the Savings Bank. At an assumed price of $10.00 the MRP shares have a value of
$442,000 and $598,000 at the minimum and the maximum of the Estimated Valuation
Range, respectively. The Options will have value only if the market price
increases above the exercise price of the option, which will be the market
value of the Common Stock on the date the option is granted.
If the ESOP is not able to purchase 8% of the shares of Conversion Shares
issued in the Conversion Offerings, the ESOP may acquire newly issued shares
from the Holding Company. In such event, the voting interests of existing
shareholders will be diluted and net income per share and shareholders' equity
per share will be decreased. See "MANAGEMENT -- Management of the Savings Bank
- -- Benefits -- Employee Stock Ownership Plan."
Certain Anti-takeover Provisions
The Holding Company's Articles of Incorporation and Bylaws contain certain
provisions that may have the effect of discouraging a non-negotiated tender or
exchange offer for the Common Stock, a proxy contest for control of the Holding
Company, the assumption of control of the Holding Company by a holder of a
large block of Common Stock or the removal of the Holding Company's management,
all of which certain shareholders might deem to be in their best interests.
These provisions include, among other things (i) the classification of the
terms of the members of the Board of Directors, (ii) supermajority provisions
for the approval of certain business combinations and amendments of the
Articles of Incorporation or Bylaws of the Holding Company, and (iii)
elimination of cumulative voting in the election of directors. The provisions
in the Holding Company's Articles of Incorporation requiring a supermajority
vote for the approval of certain business combinations provide that the
supermajority voting requirements and voting restrictions do not apply to
business combinations meeting the Holding Company's Board of Director approval
requirements. The Holding Company's Articles of Incorporation also authorize
the issuance of 5,000,000 shares of preferred stock as well as 15,000,000
shares of Common Stock. These shares could be issued without shareholder
approval on terms or in circumstances that could deter a future takeover
attempt.
Interest Rate Risk
Like all financial institutions, the Savings Bank's financial condition
and results of operations are influenced significantly by general economic
conditions, the related monetary and fiscal policies of the federal government
and government regulations. Deposit flows and the cost of funds are influenced
by interest rates of competing investments and general market interest rates.
Lending activities are affected by the demand for mortgage financing and for
consumer and other types of loans, which in turn is affected by the interest
rates at which such financing may be offered and by other factors affecting the
supply of housing and the availability of funds. The Savings Bank's
profitability, like that of most financial institutions, depends largely on its
net interest income, which is the difference between the interest income
received from its interest-earning assets and the interest expense incurred
from interest-bearing liabilities. The Savings Bank's results of operations
would be adversely affected by a material prolonged increase in market interest
rates. Changes in the level of interest rates also affect the volume of loans
originated or purchased by the Savings Bank and, thus, the amount of loan and
commitment fees, as well as the market value of the Savings Bank's investment
securities and other interest-earning assets. Changes in interest rates also
can affect the average life of loans. Decreases in interest rates may result in
increased prepayments of loans, as borrowers refinance to reduce borrowing
costs. Under these circumstances, the Savings Bank is subject to reinvestment
risk to the extent that it is not able to reinvest such prepayments at rates
that are comparable to the rates on the maturing loans or securities. Moreover,
volatility in interest rates also can result in disintermediation, or the flow
of funds away from savings institutions into direct investments, such as U.S.
Government and corporate securities and other investment vehicles that, because
of the absence of federal insurance premiums and reserve requirements,
generally pay higher rates of return than savings institutions.
Competition
The Savings Bank has faced, and will continue to face, strong competition
both in making loans and attracting deposits. The Savings Bank's primary market
has a high concentration of financial institutions, many
21
<PAGE>
of which are affiliated with large bank holding companies that have greater
financial resources than the Savings Bank and all of which compete with the
Savings Bank in varying degrees. Competition for loans principally comes from
commercial banks, thrift institutions, credit unions and mortgage banking
companies. Historically, commercial banks, thrift institutions and credit
unions have been the Savings Bank's most direct competition for deposits. The
Savings Bank also competes with short-term money market mutual funds and with
other financial institutions, such as brokerage firms and insurance companies,
for deposits. In competing for loans, the Savings Bank may be forced to offer
lower loan interest rates periodically. Conversely, in competing for deposits,
the Savings Bank may be forced to offer higher deposit interest rates
periodically. Either case or both cases could adversely affect net interest
income. See "BUSINESS OF THE SAVINGS BANK -- Competition."
Absence of Prior Market for the Common Stock
The Holding Company has never issued capital stock and, consequently,
there is no existing market for the Common Stock. Prior to the Conversion and
Reorganization, the Public Savings Bank Shares have been traded on the OTC
Bulletin Board under the symbol "PSBI." Although the Holding Company has
received conditional approval to list the Common Stock on the Nasdaq Stock
Market also under the symbol "PSBI," there can be no assurance that an active
and liquid market for the Common Stock will develop or, if developed, will
continue. Furthermore, there can be no assurance that purchasers will be able
to sell their shares at or above the Purchase Price. See "MARKET FOR COMMON
STOCK."
Possible Increase in Estimated Valuation Range and Number of shares Issued
The Estimated Valuation Range may be increased up to 15% to reflect
material changes in the financial condition or results of operations of the
Savings Bank, market conditions or general financial, economic or regulatory
conditions following the commencement of the Conversion Offerings. If the
Estimated Valuation Range is increased, it is expected that the Holding Company
would increase the Estimated Price Range so that up to 1,851,500 Conversion
Shares at the Purchase Price would be issued for an aggregate price of up to
$18,515,000. This increase in the number of shares would decrease a
subscriber's pro forma net income per share and shareholders' equity per share,
increase the Holding Company's pro forma consolidated shareholders' equity and
net earnings, and increase the Purchase Price as a percentage of pro forma
shareholders' equity per share and net income per share. See "PRO FORMA DATA."
Possible Adverse Income Tax Consequences of the Distribution of Subscription
Rights
If the Subscription Rights granted to Eligible Account Holders and
Supplemental Eligible Account Holders of the Savings Bank are deemed to have an
ascertainable value, receipt of such rights may be a taxable event to those
Eligible Account Holders or Supplemental Eligible Account Holders who receive
and/or exercise the Subscription Rights. Additionally, the Savings Bank could
be required to recognize a gain for tax purposes on such distribution. Whether
Subscription Rights are considered to have ascertainable value is an inherently
factual determination. The Savings Bank has been advised by RP Financial that
such rights have no value; however, RP Financial's conclusion is not binding on
the Internal Revenue Service ("IRS"). See "THE CONVERSION AND REORGANIZATION --
Effects of Conversion and Reorganization on Depositors and Borrowers of the
Savings Bank -- Tax Effects."
Risk of Delayed Offering
The Company and the Savings Bank expect to complete the Conversion and
Reorganization within the time periods indicated in this Prospectus.
Nevertheless, it is possible, although not anticipated, that adverse market,
economic or regulatory conditions, or other factors would significantly delay
the completion of the Conversion and result in increased costs or in changes in
the Appraisal.
22
<PAGE>
PSB BANCORP, INC.
The Holding Company was organized on October 3, 1997 under the PBCL at the
direction of the Savings Bank. The Holding Company has been formed to become
the holding company for the Savings Bank upon consummation of the Conversion
and Reorganization. The Holding Company has received conditional approval from
the Federal Reserve to become a bank holding company and acquire 100% of the
capital stock of the Savings Bank. Prior to the Conversion and Reorganization,
the Holding Company will not engage in any material operations. After the
Conversion and Reorganization, the Holding Company will be subject to
regulation by the Federal Reserve, and its principal business will be the
ownership of the Savings Bank. Immediately following the Conversion and
Reorganization, the only significant assets of the Holding Company will be the
capital stock of the Savings Bank, 50% of the net proceeds of the Conversion
Offerings and a note receivable from the ESOP evidencing a loan to enable the
ESOP to purchase 8% of the Common Stock issued in the Conversion and
Reorganization. See "PRO FORMA DATA" and "BUSINESS -- Business of the Holding
Company."
The holding company structure will permit the Holding Company to expand
the financial services currently offered through the Savings Bank. Management
believes that the holding company structure and retention of a portion of the
proceeds of the Conversion Offerings will facilitate the expansion and
diversification of its operations. The holding company structure will also
enable the Holding Company to repurchase its stock without adverse tax
consequences, subject to applicable regulatory restrictions, including waiting
periods. There are no present plans, arrangements, agreements, or
understandings, written or oral, regarding any such activities or repurchases.
See "REGULATION -- Regulation of the Holding Company."
PENNSYLVANIA SAVINGS BANK
The Savings Bank is a Pennsylvania-chartered savings bank, founded in 1923
and headquartered in Philadelphia, Pennsylvania. The Savings Bank's deposits
are insured by the FDIC up to applicable legal limits under the BIF. The
Savings Bank has been a member of the FHLB system since 1937. The Savings Bank
is regulated by the PDOB and the FDIC. At December 31, 1997, the Savings Bank
had total assets of $129.34 million, total deposit accounts of $108.73 million,
and total shareholders' equity of $15.00 million, on a consolidated basis.
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock offered hereby are
estimated to range from $11.43 million to $15,63 million, or up to $18.04
million if the Estimated Valuation Range is increased by 15%. See "PRO FORMA
DATA" for the assumptions used to arrive at such amounts. The Holding Company
has received conditional Federal Reserve approval to purchase all of the
capital stock of the Savings Bank to be issued in the Conversion and
Reorganization in exchange for 50% of the net proceeds of the Conversion
Offerings. This will result in the Holding Company retaining approximately
$5.72 million to $7.82 million of net proceeds, or up to $9.02 million if the
Estimated Valuation Range is increased by 15%. See "PRO FORMA DATA."
Receipt of 50% of the net proceeds of the sale of the Conversion Shares
will increase the Savings Bank's capital and will support the expansion of the
Savings Bank's existing business activities. The Savings Bank will use the
funds contributed to it for general corporate purposes, including, initially,
lending and investment in short-term U.S. Government and agency obligations.
In connection with the Conversion and Reorganization, the Holding Company
intends to loan the ESOP the amount necessary to refinance the ESOP's existing
third party loan used to purchase shares of Savings Bank Common Stock in the
MHC Reorganization ($295,000 outstanding balance at December 31, 1997) and to
purchase 8% of the shares of Common Stock sold in the Conversion Offerings
($6.05 million at the maximum of the Estimated Valuation Range). The Holding
Company's loan to fund the ESOP's purchase of shares of Common Stock in the
Conversion Offerings may range from $925,000 to $1.28 million based on the sale
of 95,200 Conversion Shares to the ESOP (at the minimum of the Estimated
Valuation Range) and 128,800 Conversion Shares (at the maximum of the Estimated
Valuation Range), respectively, at the Purchase Price. If 15% above the maximum
of the Estimated Valuation Range, or 1,851,500 Conversion Shares, are sold in
the Conversion and Reorganization, the Holding Company's loan to the ESOP would
be approximately $1.48 million (based on the sale of 148,120 Conversion Shares
to the ESOP). The principal amount of the ESOP loan will be larger if
23
<PAGE>
the ESOP is unable to purchase shares in the Conversion and Reorganization and
instead purchases shares in the open market at prices above the Purchase Price.
It is anticipated that the ESOP loan will have a ten-year term with interest
payable at the prime rate as published in The Wall Street Journal on the
closing date of the Conversion and Reorganization. The loan will be repaid
principally from the Savings Bank's contributions to the ESOP and from any
dividends paid on shares of Common Stock held by the ESOP.
The net proceeds retained by the Holding Company initially will be
invested primarily in short-term U.S. Government and agency obligations or in a
deposit account either at the Savings Bank or another financial institution.
Such proceeds will be available for additional contributions to the Savings
Bank in the form of debt or equity, to support future diversification or
acquisition activities, as a source of dividends to the shareholders of the
Holding Company and for future repurchases of Common Stock to the extent
permitted under Pennsylvania law and federal regulations. The Holding Company
will consider exploring opportunities to use such funds to expand operations
through acquiring or establishing additional branch offices or acquiring other
financial institutions. Currently, there are no specific plans, arrangements,
agreements or understandings, written or oral, regarding any diversification
activities.
Following consummation of the Conversion and Reorganization, the Holding
Company's Board of Directors will have the authority to adopt plans for
repurchases of Common Stock, subject to statutory and regulatory requirements.
Facts and circumstances upon which the Holding Company's Board of Directors may
determine to repurchase stock in the future would include but are not limited
to: (i) market and economic factors such as the price at which the Common Stock
is trading in the market, the volume of trading, the attractiveness of other
investment alternatives, the ability to increase the book value and/or earnings
per share of the remaining outstanding shares, and the ability to improve the
Holding Company's return on equity; (ii) the avoidance of dilution to
shareholders by not issuing additional shares to cover the exercise of stock
options or to fund employee stock benefit plans; and (iii) any other
circumstances in which repurchases would be in the best interests of the
Holding Company and its shareholders. Any stock repurchases will be subject to
a determination by the Holding Company's Board of Directors that both the
Holding Company and the Savings Bank will be capitalized in excess of all
applicable regulatory requirements and tax and other regulatory considerations.
For a discussion of the regulatory limitations applicable to stock repurchases
and current Federal Reserve and FDIC policy with respect thereto, see "THE
CONVERSION AND REORGANIZATION -- Restrictions on Repurchase of Stock."
DIVIDEND POLICY
General
The Savings Bank currently does not pay dividends. Upon completion of the
Conversion and Reorganization, the Holding Company's Board of Directors will
have the authority to declare dividends on the Common Stock, subject to
statutory and regulatory requirements. Following consummation of the Conversion
and Reorganization, the Board of Directors of the Holding Company will consider
adopting a policy of paying regular cash dividends on the Common Stock. In
addition, the Board of Directors may determine to pay periodic special cash
dividends in addition to, or in lieu of, regular cash dividends. Declarations
or payments of any dividends (regular and special) will be subject to
determination by the Board of Directors, which will take into account the
amount of the net proceeds retained by the Holding Company, the Holding
Company's and the Savings Bank's financial condition and results of operations,
investment opportunities available to the Holding Company or the Savings Bank,
tax considerations, capital requirements, industry standards, economic
conditions and other factors, including the regulatory restrictions that affect
the payment of dividends by the Savings Bank to the Holding Company. The
primary source of dividends payable to the Holding Company will be dividends
from the Savings Bank. The Savings Bank may pay dividends only out of retained
earnings. As of December 31, 1997, the Savings Bank's retained earnings on a
pro forma basis were $793,000. See "Capitalization." See "REGULATION --
Regulation of the Holding Company -- Restrictions on Dividends." No assurances
can be given that any dividends, either regular or special, will be declared
or, if declared, what the amount of dividends will be or whether such
dividends, if commenced, will continue.
24
<PAGE>
MARKET FOR COMMON STOCK
The Holding Company has never issued capital stock and, consequently,
there is no existing market for the Common Stock. Although the Holding Company
has received conditional approval to list the Common Stock on the Nasdaq
National Market under the symbol "PSBI," there can be no assurance that the
Holding Company will meet Nasdaq National Market listing requirements, which
include a minimum market capitalization, at least three market makers and a
minimum number of record holders. KB&W has agreed to make a market for the
Common Stock following consummation of the Conversion and Reorganization,
although it is under no obligation to do so, and will assist the Holding
Company in seeking to encourage at least two additional market makers to
establish and maintain a market in the Common Stock. Making a market involves
maintaining bid and ask quotations and being able, as principal, to effect
transactions in reasonable quantities at those quoted prices, subject to
various securities laws and other regulatory requirements. The Holding Company
anticipates that prior to the completion of the Conversion and Reorganization
it will be able to obtain the commitment from at least two additional
broker-dealers to act as market makers for the Common Stock. Additionally, the
development of a liquid public market depends on the existence of willing
buyers and sellers, the presence of which is not within the control of the
Holding Company, the Savings Bank or any market maker. There can be no
assurance that an active and liquid trading market for the Common Stock will
develop or that, if developed, it will continue. The number of active buyers
and sellers of the Common Stock at any particular time may be limited. Under
such circumstances, investors in the Common Stock could have difficulty
disposing of their shares on short notice and should not view the Common Stock
as a short-term investment. Furthermore, there can be no assurance that
purchasers will be able to sell their shares at or above the Purchase Price.
Since the MHC Reorganization the Public Savings Bank Shares have been
traded on the OTC Bulletin Board under the symbol "PSBI." The following table
sets forth the high and low trading prices, as reported by the OTC Bulletin
Board, and cash dividends paid for each quarter during the 1996 and 1997 fiscal
years. However, there is no relation between the Purchase Price of the Common
Stock and the trading prices of the Savings Bank Shares.
<TABLE>
<CAPTION>
Cash
Dividend
Year Ended December 31, 1996 High Low Declared
- --------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Quarter ended March 31, 1996 .................................. $12.38 $11.50 $0
Quarter ended June 30, 1996 ................................... 11.63 11.00 0.0375
Quarter ended September 30, 1996 .............................. 11.75 10.50 0
Quarter ended December 31, 1996 ............................... 13.75 13.00 0
Year Ended December 31, 1997
Quarter ended March 31, 1997 .................................. $15.00 $14.00 $0
Quarter ended June 30, 1997 ................................... 15.00 13.00 0
Quarter ended September 30, 1997 .............................. 25.00 14.50 0
Quarter ended December 31, 1997 ............................... 29.00 24.00 0
January 1, 1998 to Present
Quarter ended March 31, 1998 (through March 21, 1998) ......... 29.00 25.875 $0
</TABLE>
25
<PAGE>
CAPITALIZATION
The following table presents the historical capitalization of the Savings
Bank at December 31, 1997, and the pro forma consolidated capitalization of the
Holding Company after giving effect to the assumptions set forth under "PRO
FORMA DATA," based on the sale of the number of shares of Common Stock at the
minimum, midpoint, maximum and maximum, as adjusted, of the Estimated Valuation
Range. The shares that would be issued at the maximum, as adjusted, of the
Estimated Valuation Range would be subject to receipt of PDOB and FDIC approval
of an updated appraisal confirming such valuation. A change in the number of
shares to be issued in the Conversion and Reorganization would materially
affect pro forma consolidated capitalization.
<TABLE>
<CAPTION>
Holding Company Pro Forma Consolidated Capitalization
Based Upon the Sale of
-------------------------------------------------------------
Capitalization 1,190,000 1,400,000 1,610,000 1,851,500
of Savings Bank shares at shares at shares at shares at
at $10.00 $10.00 $10.00 $10.00
December 31, 1997 Per Share(1) Per Share(1) Per Share(1) Per Share(2)
------------------- -------------- -------------- -------------- -------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C>
Deposits(3) ..................................... $108,734 $108,734 $108,734 $108,734 $108,734
Borrowings ...................................... 3,136 3,136 3,136 3,136 3,136
-------- -------- -------- -------- --------
Total deposits and borrowed funds ............... $111,870 $111,870 $111,870 $111,870 $111,870
======== ======== ======== ======== ========
Shareholders' equity:
Savings Bank Common Stock:
10,000,000 shares, $1.00 par value per
share authorized; 1,194,640 issued and
outstanding ................................. $ 1,194 $ 0 $ 0 $ 0 $ 0
Holding Company Common Stock:
15,000,000 shares, no par value per share,
authorized; specified number of shares
assumed to be issued and outstanding ........ 1,195 0 0 0 0
Additional paid-in capital ..................... 13,563 26,183 28,283 30,383 32,798
Retained earnings(4) ........................... 546 793 793 793 793
Unrealized loss on securities available- for-
sale, net of tax ............................. (10) (10) (10) (10) (10)
Less:
Holding Company Common Stock
acquired by ESOP(5) ......................... (295) (1,247) (1,415) (1,583) (1,776)
Holding Company Common Stock to be
acquired by 1998 MRP(6) ..................... 0 (476) (560) (644) (741)
-------- -------- -------- -------- --------
Total shareholders' equity ...................... $ 14,998 $ 25,243 $ 27,091 $ 28,939 $ 31,064
======== ======== ======== ======== ========
</TABLE>
- ------------
(1) Does not reflect the possible increase in the Estimated Valuation Range or
the issuance of additional shares under the 1998 Stock Option Plan.
(2) Represents the pro forma capitalization of the Holding Company if the
aggregate number of Conversion Shares issued in the Conversion and
Reorganization is 15% above the maximum of the Estimated Valuation Range.
See "PRO FORMA DATA."
(3) Withdrawals from deposit accounts for the purchase of Conversion Shares are
not reflected. Such withdrawals will reduce pro forma deposits.
(4) Pro forma retained earnings include $247,000 of cash or cash equivalent
assets of the MHC. The other asset of the MHC, investment in subsidiary,
is eliminated upon consolidation. The MHC has no material liabilities. No
consideration will be paid by the Holding Company or the Savings Bank in
connection with the merger of the MHC and the Savings Bank. Retained
earnings are substantially restricted by applicable regulatory capital
requirements. Additionally, the Savings Bank will be prohibited from
paying any dividend that would reduce its regulatory capital below the
amount in the liquidation account that will be established for
26
<PAGE>
the benefit of Eligible Account Holders and Supplemental Eligible Account
Holders at the consummation of the Conversion and Reorganization. See "THE
CONVERSION AND REORGANIZATION -- Effects of Conversion and Reorganization
on Depositors and Borrowers of the Savings Bank -- Liquidation Account."
(5) Assumes that 8% of the Conversion Shares sold in the Conversion and
Reorganization will be acquired by the ESOP with funds borrowed from the
Holding Company. Under generally accepted accounting principles ("GAAP"),
the amount of Conversion Shares to be purchased by the ESOP represents
unearned compensation and is, accordingly, reflected as a reduction of
capital. As shares are released to ESOP participant accounts, a
corresponding reduction in the charge against capital will occur. Because
the funds are borrowed from the Holding Company, the borrowing will be
eliminated in consolidation and no liability will be reflected in the
consolidated financial statements of the Holding Company. See "MANAGEMENT
-- Management of the Savings Bank -- Benefits -- Employee Stock Ownership
Plan."
(6) Assumes the purchase in the open market at the Purchase Price, pursuant to
the proposed 1998 MRP, of a number of shares equal to 4% of the shares of
Conversion Shares issued in the Conversion and Reorganization at the
minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range. The issuance of such additional Conversion Shares to the
1998 MRP from authorized but unissued shares of Common Stock would dilute
the ownership interest of shareholders by 2.04%. The shares are reflected
as a reduction of shareholders' equity. See "RISK FACTORS -- Possible
Dilutive Effect of Benefit Programs," "PRO FORMA DATA" and "MANAGEMENT --
Management of the Savings Bank -- Benefits -- Management Recognition
Plan." The 1998 MRP is subject to shareholder approval, which is expected
to be sought at a meeting to be held no earlier than six months following
consummation of the Conversion and Reorganization.
27
<PAGE>
HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE
The following table presents the Savings Bank's historical and pro forma
capital position relative to its capital requirements at December 31, 1997. The
amount of capital infused into the Savings Bank for purposes of the following
table is 50% of the net proceeds of the Conversion Offerings. For purpose of
the table below, the amount expected to be borrowed by the ESOP and the cost of
the shares expected to be acquired by the 1998 MRP are deducted from pro forma
regulatory capital. For a discussion of the assumptions underlying the pro
forma capital calculations presented below, see "USE OF PROCEEDS,"
"CAPITALIZATION" and "PRO FORMA DATA." The definitions of the terms used in the
table are those provided in the FDIC capital regulations as discussed under
"REGULATION -- Regulation of the Savings Bank -- Capital Requirements."
<TABLE>
<CAPTION>
PRO FORMA AT DECEMBER 31, 1997
-----------------------------------------------
Minimum of Midpoint of
Estimated Estimated
Valuation Range Valuation Range
----------------------- -----------------------
Historical as of 1,900,000 shares 1,400,000 shares
December 31, 1997 at $10.00 Per Share at $10.00 Per Share
----------------------- ----------------------- -----------------------
(Dollars in thousands)
Percent Percent Percent
of of of
Adjusted Adjusted Adjusted
Total Total Total
Amount Assets(1) Amount Assets(1) Amount Assets(1)
---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
GAAP Capital ....................... $14,998 13.35% $19,530 16.58% $20,328 17.12%
Leverage capital(2) ................ $15,001 13.36% $19,533 16.58% $20,331 17.12%
Leverage capital requirement(2)..... 6,739 6.00% 7,068 6.00% 7,126 6.00%
------- ----- ------- ----- ------- -----
Excess ............................. $ 8,262 7.36% $12,465 10.58% $13,205 11.12%
======= ===== ======= ===== ======= =====
Tier 1 risk-based capital(3) ....... $15,001 24.67% $19,533 33.70% $20,331 32.64%
Tier 1 capital requirement ......... 2,432 4.00% 2,476 4.00% 2,484 4.00%
------- ----- ------- ----- ------- -----
Excess ............................. $12,569 20.67% $17,056 27.55% $17,847 28.64%
======= ===== ======= ===== ======= =====
Total risk-based capital(4) ........ $15,239 25.06% $19,770 31.93% $20,568 33.02%
Total risk-based capital
requirement ....................... 4,865 8.00% 4,953 8.00% 4,968 8.00%
------- ----- ------- ----- ------- -----
Excess ............................. $10,374 17.06% $14,817 23.93% $15,600 25.02%
======= ===== ======= ===== ======= =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA AT DECEMBER 31, 1997
-----------------------------------------------
15% Above
Maximum of Maximum of
Estimated Estimated
Valuation Range Valuation Range
----------------------- ----------------------
1,610,000 shares 1,851,500 shares
at $10.00 Per Share at $10.00 Per Share
----------------------- ----------------------
Percent Percent
of of
Adjusted Adjusted
Total Total
Amount Assets(1) Amount Assets(1)
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
GAAP Capital ....................... $21,126 17.64% $22,043 18.24%
Leverage capital(2) ................ $21,129 17.65% $22,046 18.24%
Leverage capital requirement(2)..... 7,184 6.00% 7,250 6.00%
------- ----- ------- -----
Excess ............................. $13,945 11.65% $14,796 12.24%
======= ===== ======= =====
Tier 1 risk-based capital(3) ....... $21,129 33.92% $22,046 35.26%
Tier 1 capital requirement ......... 2,492 4.00% 2,501 4.00%
------- ----- ------- -----
Excess ............................. $18,637 29.92% $19,545 31.26%
======= ===== ======= =====
Total risk-based capital(4) ........ $21,366 34.30% $22,283 34.84%
Total risk-based capital
requirement ....................... 4,984 8.00% 5,001 8.00%
------- ----- ------- -----
Excess ............................. $16,382 26.30% $17,282 26.84%
======= ===== ======= =====
</TABLE>
- ------------
(1) Based upon historical total adjusted assets of the Savings Bank of $112.31
million at December 31, 1997, and $117.80 million, $118.76 million,
$119.73 million and $120.84 million at the minimum, midpoint, maximum, and
maximum, as adjusted, of the Estimated Valuation Range, respectively, for
purposes of the leverage capital requirement; and, for purposes of the
risk-based capital requirements, based upon historical risk-weighted
assets of $60.81 million at December 31, 1997 and $61.91 million, $62.10
million, $62.30 million and of $62.52 million at the minimum, midpoint,
maximum, and maximum, as adjusted, of the Estimated Valuation Range,
respectively.
(2) Percentage represents leverage capital divided by total adjusted assets.
(3) Percentage represents tier 1 capital divided by total risk-weighted assets.
Assumes net proceeds are invested in assets that carry a 20%
risk-weighting.
(4) Percentage represents total capital divided by total risk-weighted assets.
Assumes net proceeds are invested in assets that carry a 20%
risk-weighting.
28
<PAGE>
PRO FORMA DATA
Under the Plan of Conversion, the Conversion Shares must be sold at an
aggregate price equal to the estimated pro forma market value of the MHC and
the Savings Bank as converted determined by an independent valuation and
converted by multiplying the Appraisal by the MHC's percentage interest in the
Savings Bank (51.5%). Based upon this calculation, the Estimated Valuation
Range as of December 31, 1997 is from a minimum of $11.90 million to a maximum
of $16.10 million with a midpoint of $14.0 million or, at a price per share of
$10.00, a minimum number of shares of 1,190,000, a maximum number of shares of
1,610,000 and a midpoint number of shares of 1,400,000. The actual net proceeds
from the sale of the Conversion Shares cannot be determined until the
Conversion and Reorganization is completed. However, net proceeds set forth in
the following table are based upon the following assumptions: (i) Webb will
receive a fee not to exceed $100,000 which consists of a $25,000 management fee
and a success fee of 1.5% of the aggregate Purchase Price of the Conversion
Shares sold in the Subscription and Direct Community Offerings (see "THE
CONVERSION AND REORGANIZATION -- Plan of Distribution for the Subscription, the
Direct Community and the Syndicated Community Offerings); (ii) all of the
Conversion Shares will be sold in the Subscription and Direct Community
Offerings; and (iii) Conversion and Reorganization expenses, including the fees
paid to Webb, will total approximately $475,000 at each of the minimum,
midpoint, maximum and 15% above the Estimated Valuation Range. Actual expenses
may vary from this estimate, and the fees paid will depend upon the percentages
and total number of shares sold in the Subscription, Direct Community and
Syndicated Community Offerings and other factors.
The pro forma consolidated net income of the Savings Bank for the year
ended December 31, 1997 has been calculated as if the Conversion and
Reorganization had been consummated at the beginning of the period and the
estimated net proceeds received by the Holding Company and the Savings Bank had
been invested at 6.03%, at the beginning of the period, which represents the
arithmetic average of the Savings Bank's yield on interest-earning assets and
the rate paid on interest-bearing deposits for the year ended December 31,
1997. As discussed under "USE OF PROCEEDS," the Holding Company expects to
retain 50% of the net proceeds of the Conversion Offerings from which it will
fund the ESOP loan. A pro forma after-tax return of 3.98% is used for both the
Holding Company and the Savings Bank for the period, after giving effect to an
incremental combined federal and state income tax rate of 34.0%. Historical and
pro forma per share amounts have been calculated by dividing historical and pro
forma amounts by the number of shares of Common Stock indicated in the
footnotes to the table. Per share amounts have been computed as if the Common
Stock had been outstanding at the beginning of the period or at December 31,
1997, as applicable, but without any adjustment of per share historical or pro
forma shareholders' equity to reflect the earnings on the estimated net
proceeds.
The following tables summarize the historical net income and retained
earnings of the Savings Bank and the pro forma consolidated net income and
shareholders' equity of the Holding Company for the periods and at the date
indicated, based on the minimum, midpoint and maximum of the Estimated
Valuation Range and based on a 15% increase in the maximum of the Estimated
Valuation Range. No effect has been given to: (i) the shares to be reserved for
issuance under the 1998 Stock Option Plan, which is expected to be voted upon
by shareholders at a meeting to be held no earlier than six months following
consummation of the Conversion and Reorganization; (ii) withdrawals from
deposit accounts for the purpose of purchasing Conversion Shares in the
Conversion Offerings; (iii) the issuance of shares from authorized but unissued
shares to the 1998 MRP, which is expected to be voted upon by shareholders at a
meeting to be held no earlier than six months following consummation of the
Conversion and Reorganization; or (iv) the establishment of a liquidation
account for the benefit of Eligible Account Holders and Supplemental Eligible
Account Holders. See "MANAGEMENT OF THE SAVINGS BANK -- Benefits -- 1998 Stock
Option Plan" and "THE CONVERSION AND REORGANIZATION -- Stock Pricing, Exchange
Ratio and Number of Shares Issued." Conversion Shares may be purchased with
funds on deposit at the Savings Bank, which will reduce deposits by the amounts
of such purchases. Accordingly, the net amount of funds available for
investment will be reduced by the amount of deposit withdrawals used to fund
such purchases.
The following pro forma information may not be representative of the
financial effects of the Conversion and Reorganization at the date on which the
Conversion and Reorganization actually occurs and
29
<PAGE>
should not be taken as indicative of future results of operations.
Shareholders' equity represents the difference between the stated amounts of
consolidated assets and liabilities of the Holding Company computed according
to GAAP. Shareholders' equity has not been increased or decreased to reflect
the difference between the carrying value of loans and other assets and market
value. Shareholders' equity is not intended to represent fair market value nor
does it represent amounts that would be available for distribution to
shareholders in the event of liquidation.
<TABLE>
<CAPTION>
At or For the Year Ended December 31, 1997
-------------------------------------------------------------
15% Above
Minimum of Midpoint of Maximum of Maximum of
Estimated Estimated Estimated Estimated
Valuation Valuation Valuation Valuation
Range Range Range Range
------------- ------------- ------------- -------------
1,190,000 1,400,000 1,610,000 1,851,500
shares shares shares shares
at $10.00 at $10.00 at $10.00 at $10.00
Per Share Per Share Per Share Per Share(1)
------------- ------------- ------------- -------------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds ................................ $ 11,900 $ 14,000 $ 16,100 $ 18,515
Less: estimated expenses ...................... 475 475 475 475
---------- ---------- ---------- ----------
Estimated net proceeds ........................ 11,425 13,525 15,625 18,040
Less: Common Stock acquired by ESOP ........... (952) (1,120) (1,288) (1,481)
Less: Common Stock to be acquired by 1998
MRP .......................................... (476) (560) (644) (741)
---------- ---------- ---------- ----------
Net investable proceeds .................... $ 9,997 $ 11,845 $ 13,693 $ 15,818
========== ========== ========== ==========
Consolidated net income:
Historical ................................... $ 708 $ 708 $ 708 $ 708
Pro forma income on net proceeds(2) .......... 398 471 545 630
Pro forma ESOP adjustments(3) ................ (63) (74) (85) (98)
Pro forma 1998 MRP adjustments(4) ............ (63) (74) (85) (98)
---------- ---------- ---------- ----------
Pro forma net income ....................... $ 980 $ 1,031 $ 1,083 $ 1,142
========== ========== ========== ==========
Consolidated net income per share(5)(6):
Historical ................................... $ 0.33 $ 0.28 $ 0.24 $ 0.21
Pro forma income on net proceeds ............. 0.19 0.18 0.19 0.18
Pro forma ESOP adjustments(3) ................ ( 0.03) ( 0.03) ( 0.03) ( 0.03)
Pro forma 1998 MRP adjustments(4) ............ ( 0.03) ( 0.03) ( 0.03) ( 0.03)
---------- ---------- ---------- ----------
Pro forma net income per share ............. $ 0.46 $ 0.40 $ 0.37 $ 0.33
========== ========== ========== ==========
Offering price as a multiple of pro forma net
earnings per share ........................... 22.22 25.00 27.03 30.30
Number of shares used in earnings per share
calculations ................................. 2,149,295 2,528,583 2,907,868 3,344,049
Shareholders' equity:
Historical(7) ................................ $ 15,245 $ 15,245 $ 15,245 $ 15,245
Estimated net proceeds ....................... 11,425 13,525 15,625 18,040
Less: Common Stock acquired by ESOP .......... (952) (1,120) (1,288) (1,481)
Less: Common Stock to be acquired by 1998
MRP(4) ..................................... (476) (560) (644) (741)
---------- ---------- ---------- ----------
Pro forma shareholders' equity(8) .......... $ 25,242 $ 27,090 $ 28,938 $ 31,064
========== ========== ========== ==========
Consolidated shareholders' equity per
share(6)(9):
Historical(6) ................................ $ 6.65 $ 5.66 $ 4.92 $ 4.28
Estimated net proceeds ....................... 5.00 5.02 5.04 5.06
Less: Common Stock acquired by ESOP .......... ( 0.42) ( 0.42) ( 0.42) ( 0.42)
Less: Common Stock to be acquired by 1998
MRP(4) ..................................... ( 0.21) ( 0.21) ( 0.21) ( 0.21)
---------- ---------- ---------- ----------
Pro forma shareholders' equity(10) ......... $ 11.02 $ 10.05 $ 9.33 $ 8.71
========== ========== ========== ==========
Purchase Price as a percentage of pro forma
shareholders' equity per share ............... 90.74% 99.50% 107.18% 114.81%
</TABLE>
30
<PAGE>
- ------------
(1) Gives effect to the sale of an additional 241,500 Conversion Shares in the
Conversion and Reorganization, which may be issued to cover an increase in
the pro forma market value of the MHC and the Savings Bank, as converted,
without the resolicitation of subscribers or any right of cancellation.
The issuance of such additional shares will be conditioned on a
determination by RP Financial that such issuance is compatible with its
determination of the estimated pro forma market value of the MHC and the
Savings Bank, as converted. See "THE CONVERSION AND REORGANIZATION --
Stock Pricing, Exchange Ratio and Number of Shares to be Issued."
(2) No effect has been given to withdrawals from savings accounts for the
purpose of purchasing Conversion Shares. Because funds on deposit at the
Savings Bank may be withdrawn to purchase shares of Common Stock (which
will reduce deposits by the amount of such purchases), the net amount of
funds available to the Savings Bank for investment following receipt of
the net proceeds of the Conversion Offerings will be reduced by the amount
of such withdrawals.
(3) It is assumed that 8% of the Conversion Shares issued in the Conversion and
Reorganization will be purchased by the ESOP. The funds used to acquire
such shares will be borrowed by the ESOP (at an interest rate equal to the
prime rate as published in The Wall Street Journal on the closing date of
the Conversion and Reorganization) from the net proceeds from the
Conversion Offerings retained by the Holding Company. The amount of this
borrowing has been reflected as a reduction from gross proceeds to
determine estimated net investable proceeds. The Savings Bank intends to
make contributions to the ESOP at least equal to the principal and
interest requirement of the debt. As the debt is repaid, shareholders'
equity will be increased. The Savings Bank's payment of the ESOP debt is
based upon equal installments of principal over a 10-year period, assuming
a combined federal and state income tax rate of 34.0%. Interest income
earned by the Holding Company on the ESOP debt offsets the interest paid
by the Savings Bank on the ESOP loan. No reinvestment is assumed on
proceeds contributed to fund the ESOP. The ESOP expense reflects adoption
of Statement of Position ("SOP") 93-6, which requires recognition of
expense based upon shares committed to be released and the exclusion of
unallocated shares from earnings per share computations. The valuation of
shares committed to be released would be based upon the average market
value of the shares during the year, which, for purposes of this
calculation, was assumed to be equal to the Purchase Price. See
"MANAGEMENT -- Management of the Savings Bank -- Benefits -- Employee
Stock Ownership Plan."
(4) In calculating the pro forma effect of the 1998 MRP, it is assumed that the
required shareholder approval has been received, that the shares were
acquired by the 1998 MRP at the beginning of the periods presented in open
market purchases at the Purchase Price, that the amount contributed was
amortized during such periods at the rate of 20% per annum, that for
purposes of this table, compensation expense is recognized on a
straight-line basis over each vesting period, and that the combined
federal and state income tax rate is 34.0%. The issuance of authorized but
unissued shares of Common Stock instead of open market purchases would
dilute the voting interests of existing shareholders by approximately
2.04% and pro forma net income per share would be $.45, $.41, $.37 and
$.34 at the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range for the year ended December 31, 1997,
respectively. Pro forma shareholders' equity per share would be $11.00,
$10.05, $9.35 and $8.74 at the minimum, midpoint, maximum and 15% above
the maximum of the Estimated Valuation Range at December 31, 1997,
respectively. In the event the fair market value per share is greater than
$10.00 per share on the date shares are awarded under the 1998 MRP, total
1998 MRP expense would increase. SEE "RISK FACTORS -- Expenses Associated
with ESOP and 1998 MRP." No effect has been given to the shares reserved
for issuance under the proposed 1998 Stock Option Plan. If shareholders
approve the 1998 Stock Option Plan following the Conversion and
Reorganization, the Holding Company will have reserved for issuance under
the 1998 Stock Option Plan authorized but unissued shares of Common Stock
representing an amount of shares equal to 10% of the Conversion Shares
sold in the Conversion Offerings. If all of the options were exercised,
and shares were issued from authorized but unissued shares, the voting and
ownership interests of existing shareholders would be diluted by
approximately 4.94%. Assuming shareholder approval of the 1998 Stock
Option Plan and that all options were exercised at the end of the year
ended December 31, 1997 at an exercise price of $10.00 per share, pro
forma net earnings per share would be $.46, $.42, $.38 and $.35,
respectively, for the year ended December 31, 1997, and pro forma
shareholders' equity per share would be $10.97,
31
<PAGE>
$10.05, $9.37 and $8.78, respectively, at December 31, 1997 at the minimum,
midpoint, maximum and 15% above the maximum of the Estimated Valuation
Range. See "MANAGEMENT -- Management of the Savings Bank -- Benefits -- 1997
Stock Option Plan" and "-- Benefits -- Management Recognition Plan" and
"RISK FACTORS -- Possible Dilutive Effect of Benefit Programs."
(5) Per share amounts are based upon shares outstanding of 2,149,295,
2,528,583, 2,907,868 and 3,344,049 for the year ended December 31, 1997,
at the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range, respectively. Such amounts include the
Conversion Shares sold in the Conversion and Reorganization, less the
number of shares assumed to be held by the ESOP not committed to be
released within the first year following the Conversion and
Reorganization.
(6) Historical per share amounts have been computed as if the Conversion Shares
expected to be issued in the Conversion and Reorganization had been
outstanding at the beginning of the period or on the dates shown, but
without any adjustment of historical net income or historical retained
earnings to reflect the investment of the estimated net proceeds of the
sale of shares in the Conversion and Reorganization, the additional ESOP
expense or the proposed 1998 MRP expense, as described above.
(7) Historical book value includes $247,000 of assets held by the MHC, that
will be consolidated with the Savings Bank's book value upon consummation
of the Conversion and Reorganization.
(8) "Shareholders equity" represents the difference between the stated amounts
of the Savings Bank's assets and liabilities. The amounts shown do not
reflect the liquidation account that will be established for the benefit
of Eligible Account Holders and Supplemental Eligible Account Holders in
the Conversion and Reorganization, or the federal income tax consequences
of the restoration to income of the Savings Bank's special bad debt
reserves for income tax purposes that would be required in the unlikely
event of liquidation. See "THE CONVERSION AND REORGANIZATION -- Effects of
Conversion and Reorganization to Stock Form on Depositors and Borrowers of
the Savings Bank" and "FEDERAL TAXATION." The amounts shown for book value
do not represent fair market values or amounts distributable to
shareholders in the unlikely event of liquidation.
(9) Per share amounts are based upon shares outstanding of 2,291,131,
2,695,400, 3,099,728 and 3,564,698 at the minimum, midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, respectively.
(10) Shareholders equity per share does not give effect to outstanding options
or MRP awards that may be granted in the future. Amounts are not intended
to represent possible future price appreciation or depreciation of the
Common Stock.
32
<PAGE>
COMMON STOCK TO BE PURCHASED
OR RECEIVED BY MANAGEMENT
The following table sets forth, for each director and executive officer
and for all of the directors and executive officers as a group, (i) Exchange
Shares to be held upon consummation of the Conversion and Reorganization, based
upon their beneficial ownership of Savings Bank Common Stock as of December 31,
1997, (ii) proposed purchases of Conversion Shares, assuming shares available
to satisfy their subscriptions, and (iii) total shares of Common Stock to be
held upon consummation of the Conversion and Reorganization, in each case
assuming that 1,400,000 Conversion Shares are sold at the midpoint of the
Estimated Valuation Range. No individual has entered into a binding agreement
with respect to such intended purchases, and, therefore, actual purchases could
be more or less than indicated below. Directors and executive officers and
their associates may not purchase in excess of 33% of the shares sold in the
Conversion and Reorganization. Directors, officers and employees will pay the
Purchase Price for each share for which they subscribe.
<TABLE>
<CAPTION>
Number of
Exchange Proposed Purchase of Total Common Stock
Conversion Shares to be Held
Shares to ------------------------ ----------------------------
be Held Number Number Percentage
(1)(2) Amount of shares of shares(2) of Total
----------- ---------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Vincent J. Fumo (3)(4)(5) .......... 227,249 $ 0 0 227,249 8.43%
Chief Executive Officer
and Chairman of the Board
Anthony DiSandro (3)(5) ............ 102,646 0 0 102,646 3.81
President and Director
Sylvia M. DiBona (5) ............... 51,982 0 0 51,982 1.92
Director
P. Charles DeRita .................. 11,179 $ 28,210 2,821 14,000 0.52
Director
James W. Eastwood .................. 13,862 $ 138 138 14,000 0.52
Director
James F. Kenney .................... 224 $ 33,000 3,300 3,524 0.13
Director
Roseanne Pauciello ................. 5,590 $ 38,500 3,850 9,440 0.35
Director and Secretary
Thomas J. Finley ................... 0 $140,000 14,000 14,000 0.52
Director
S. Michael Palermo ................. 0 $140,000 14,000 14,000 0.52
Director
Jane Scaccetti Fumo (4)(5) ......... 227,249 0 0 227,249 8.43
Director
Alfonso Tumini ..................... 0 $ 45,370 4,537 4,537 0.17
Director
Leonard A. Green ................... 224 $ 10,000 1,000 1,224 0.05
Director
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Number of
Exchange Proposed Purchase of Total Common Stock
Conversion Shares to be Held
Shares to ------------------------- ----------------------------
be Held Number Number Percentage
(1)(2) Amount of shares of shares(2) of Total
----------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Gary Polimeno (5) ................... 19,769 $ 0 0 19,769 0.73%
Vice President
All directors and executive officers. 432,725 $435,480 43,548 471,734 17.5
as a group (13 persons)
</TABLE>
- ------------
(1) Excludes shares that may be received upon the exercise of outstanding stock
options granted under the 1995 Stock Option Plan. Based upon the Exchange
Ratio of 2.2358 Exchange Shares for each Public Savings Bank Share at the
midpoint of the Estimated Valuation Range, the persons named in the table
would have options to purchase Common Stock as follows: Mr. Fumo, 37,099
shares; Mr. DiSandro, 37,099 shares; and Mr. Polimeno, 5,976 shares.
(2) Excludes stock options that may be granted under the 1998 Stock Option Plan
and awards that may be granted under 1998 MRP if such plans are approved
by shareholders at an annual or special meeting held at least six months
following the Conversion and Reorganization. See "MANAGEMENT OF THE
SAVINGS BANK -- Benefits."
(3) Excludes Exchange Shares held by the ESOP as to which Messrs. Fumo and
DiSandro exercise voting control.
(4) Vincent Fumo and Jane Scaccetti Fumo are husband and wife. Amount includes,
based upon an Exchange Ratio of 2.2358 Exchange Shares for each Public
Savings Bank Share at the midpoint of the Estimated Valuation Range,
40,244 shares held through the 401(k) Plan, 16,109 shares held through the
Profit Sharing Plan, 94,004 shares held in IRA accounts, 22,718 shares
held by the 1995 MRP which have been awarded to Mr. Fumo, 447 shares held
by Mrs. Fumo and 671 shares held on behalf of the daughter of Vincent and
Jane Scaccetti Fumo.
(5) These individuals already own the maximum amount of Common Stock that can
be acquired in the Conversion Offerings and therefore they are not
permitted to purchase additional shares in the Conversion and
Reorganization.
34
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Business Strategy of the Savings Bank
The Savings Bank's strategy is to maximize profitability by providing
quality deposit and loan products in an efficient manner as a well-capitalized
and independent savings bank. Generally, the Savings Bank seeks to implement
this strategy by emphasizing retail deposits as its primary source of funds and
by maintaining a substantial part of its assets in locally-originated
residential first mortgage loans, commercial real estate loans, commercial
business loans, construction loans and consumer loans, mortgage-backed
securities and other liquid investment securities. The Savings Bank started an
expansion of its branch network by opening a branch in Center City Philadelphia
on June 14, 1996. The Savings Bank plans further expansion of its branch
network in areas contiguous to its current market and then into the suburbs of
Philadelphia by opening branch offices or acquiring the branches of other
institutions. The Savings Bank is also expanding the operations of TNMC, its
mortgage banking subsidiary, in an effort to increase its fee income. Retail
mortgage origination is being expanded by maintaining a staff of six
commissioned sales people to solicit mortgage loans throughout the Philadelphia
metropolitan area and surrounding counties in Pennsylvania, New Jersey and
Delaware; wholesale mortgage origination is being expanded by originating,
processing and servicing loans for other mortgage companies. See
"SUBSIDIARIES." The Savings Bank is increasing loan originations through its
existing office network and is increasing origination of other loan products
separate from TNMC such as commercial real estate loans, commercial business
loans, construction loans and consumer loans. During the year ended December
31, 1997, loan originations other than residential mortgage loans totalled
$26.75 million or 72.42% of originations during the period. This increased
origination of loans other than residential mortgage loans reflects
management's effort to diversify the Savings Bank's loan portfolio, achieve a
higher net interest margin through the origination of higher yielding assets.
The Savings Bank expects this diversification trend to continue.
The Savings Bank's business strategy incorporates the following elements:
(1) increasing assets by expanding its retail branch network to include other
contiguous segments of the metropolitan Philadelphia market; (2) increasing fee
income by expanding its mortgage banking operations through the metropolitan
Philadelphia area and the adjacent counties of Pennsylvania, New Jersey and
Delaware, and (3) increasing net interest income and reducing interest rate
risk by emphasizing the origination for portfolio of commercial real estate,
construction, commercial business and consumer loans, which generally bear
higher interest rates and have shorter terms than residential mortgage loans.
The Savings Bank's expansion strategy has resulted in materially increased
operating expenses associated with the lease of the Center City Philadelphia
office space, related equipment expense and salary and benefit expenses for
personnel expansion. Also as expected, the generation of increased revenues
from the new branch and the mortgage banking operation has lagged recognition
of these additional expenses.
In February 1996, the Board of Trustees of Pennsylvania Savings Bank
elected to change the Savings Bank's fiscal year end from September 30th to
December 31st. The Savings Bank filed a transition report pursuant to Section
13 of the Securities Exchange Act of 1934 for the transition period from
October 1, 1995 to December 31, 1995. Due to this change, a portion of the
following discussion compares the Savings Bank's results of operations for its
fiscal year ended December 31, 1996 to its fiscal year ended September 30,
1995. Management of the Savings Bank does not believe that this timing
difference is material to an understanding of the Savings Bank's comparative
results of operations.
Financial Condition -- December 31, 1997 Compared to December 31, 1996
The Savings Bank's total assets increased $10.91 million or 9.21% to
$129.34 million at December 31, 1997 from $118.43 million at December 31, 1996.
The increase in assets was primarily the result of higher levels of office
properties and equipment, net loans, loans held for sale and investments which
were partially offset by a decrease in cash and cash equivalents.
Net loans increased by $9.33 million to $61.92 million at December 31,
1997 from $52.59 million at December 31, 1996. The increase of 17.74% was the
result of modest demand for new mortgage loan origination in the Savings Bank's
market area. Net loans also increased due to the Savings Bank increasing loan
origination of other loan products such as commercial real estate, commercial
business loans, construction loans and consumer loans.
35
<PAGE>
Total investment securities (including mortage-backed securities)
increased $2.70 million, or 10.83%, to $27.62 million at December 31, 1997 from
$24.92 million at December 31, 1996. The increase occurred because the Savings
Bank transferred cash and cash equivalents and new deposit funds into higher
yielding, one to five year maturity investment securities during the year ended
December 31, 1997.
Cash and cash equivalents, including interest-bearing deposits with banks,
decreased $3.73 million to $27.89 million at December 31, 1997 from $31.62
million at December 31, 1996. This decrease was the result of cash used for the
purchase of investments, capital expenditures and disbursements of loan
proceeds net of cash provided from new deposits, maturities of investments and
loan payments.
Total liabilities increased to $114.34 million at December 31, 1997 from
$104.27 million at December 31, 1996. This $10.07 million, or 9.66% increase
reflected an increase in the Savings Bank's primary source of funds, saving
deposits, which aggregated $108.73 million at December 31, 1997, an increase of
$8.16 million, or 8.11% from $100.57 million at December 31, 1996.
Shareholder's equity increased by $830,000, or 5.86%, from $14.17 million
at December 31, 1996 to $15.00 million at December 31, 1997. This increase
reflects the Savings Bank's earnings for the year ended December 31, 1997 and a
decrease of $60,000 in unrealized losses (net of taxes) on investment and
mortgage-backed securities held in the Savings Bank's available for sale
portfolio as well as the payment of $60,000 on the Savings Bank's ESOP loan.
36
<PAGE>
Results of Operations for the Years Ended December 31, 1997 and December 31,
1996
General. The Savings Bank's net income is primarily dependent on its net
interest income, which is the difference between interest income earned on its
interest-earning assets (such as investments and mortgage-backed securities,
other investment securities and loans), and its cost of funds (consisting of
interest paid on deposits). The Savings Bank's net income also is affected by
its provision for loan losses, as well as by the amount of noninterest income,
including income from fees and services charges, net gains and losses on sales
of mortgage-backed securities and other investments, and noninterest expense
such as employee compensation and benefits, deposit insurance premiums,
occupancy and equipment costs, and income taxes. Earnings of the Savings Bank
also are affected significantly by general economic and competitive conditions,
particularly changes in market interest rates, government policies and actions
of regulatory authorities, which events are beyond the control of the Savings
Bank. In particular, the general level of market interest rates tends to be
highly cyclical. In periods of high interest rates, earnings of the Savings
Bank are likely to be depressed, which in turn would be likely to have a
detrimental effect on the market value of any investment in the Holding
Company's Common Stock.
Average Balance Sheet. The following table provides an analysis on a
monthly basis of net interest income, setting forth for the periods (i) average
assets, liabilities and shareholders' equity, (ii) interest income earned on
interest-earning assets and interest expense paid on interest-bearing
liabilities, (iii) average yields earned on interest-earning assets and average
rates paid on interest-bearing liabilities, and (iv) the Savings Bank's net
interest margin (net interest income as a percentage of average total
interest-earning assets).
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------------
1997 1996
----------------------------------- -----------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
----------- ---------- ---------- ----------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Interest-earning deposits(1) ................... $ 25,648 $1,210 4.72% $ 27,803 $1,207 4.34%
Investment securities .......................... 23,182 1,616 6.97 18,880 1,183 6.27
Mortgage-backed securities ..................... 5,696 374 6.57 6,494 431 6.64
Net loans(2) ................................... 62,213 5,540 8.90 56,048 5,118 9.13
-------- ------ ----- -------- ------ -----
Total interest-earning assets ................. 116,739 8,740 7.49 109,225 7,939 7.27
-------- ------ ----- -------- ------ -----
Noninterest-earning assets ...................... 6,565 6,777
-------- --------
Total assets .................................. $123,304 $116,002
======== ========
LIABILITIES
Interest-bearing liabilities:
Savings deposits ............................... $ 40,061 1,137 2.84% $ 40,677 1,122 2.76%
Certificates ................................... 59,178 3,397 5.74 52,253 2,960 5.66
-------- ------ ----- -------- ------ -----
Total deposits ................................ 99,239 4,534 4.57 92,930 4,082 4.39
Borrowed money ................................ 323 31 9.60 387 36 9.30
-------- ------ ----- -------- ------ -----
Total interest-bearing liabilities ............ 99,562 4,565 4.59% 93,317 4,118 4.41%
-------- ------ ----- -------- ------ -----
Noninterest-bearing liabilities ................. 9,096 8,431
-------- --------
Total liabilities ............................. 108,658 101,748
Retained earnings or shareholders' equity ....... 14,646 14,254
-------- --------
Total liabilities and retained
earnings or shareholders' equity .............. $123,304 $116,002
======== ========
Net interest income ............................. $4,175 $3,821
====== ======
Interest rate spread(3) ......................... 2.90% 2.86%
Net yield on interest-earning assets(4) ......... 3.58% 3.50%
Ratio of interest-earning assets to interest-
bearing liabilities ............................ 1.17x 1.17x
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------
1995
-----------------------------------
Average Yield/
Balance Interest Rate
----------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C>
ASSETS
Interest-earning assets:
Interest-earning deposits(1) ................... $ 24,782 $ 817 3.30%
Investment securities .......................... 21,063 1,135 5.39
Mortgage-backed securities ..................... 6,884 493 7.16
Net loans(2) ................................... 51,259 4,745 9.26
-------- ------ -----
Total interest-earning assets ................. 103,988 7,190 6.91%
-------- ------ -----
Noninterest-earning assets ...................... 5,756
--------
Total assets .................................. $109,744
========
LIABILITIES
Interest-bearing liabilities:
Savings deposits ............................... $ 44,277 1,205 2.72%
Certificates ................................... 49,416 2,237 4.53
-------- ------ -----
Total deposits ................................ 93,693 3,437 3.67
Borrowed money ................................ -- 6 --
-------- ------ -----
Total interest-bearing liabilities ............ 93,693 3,443 3.67%
-------- ------ -----
Noninterest-bearing liabilities ................. 6,560
--------
Total liabilities ............................. 100,253
Retained earnings or shareholders' equity ....... 9,491
--------
Total liabilities and retained
earnings or shareholders' equity .............. $109,744
========
Net interest income ............................. $3,747
======
Interest rate spread(3) ......................... 3.24%
Net yield on interest-earning assets(4) ......... 3.60%
Ratio of interest-earning assets to interest-
bearing liabilities ............................ 1.11x
</TABLE>
- ------------
(1) Includes interest-earning deposits with the Federal Home Loan Bank of
Pittsburgh.
(2) Includes nonaccrual loans.
(3) Represents the difference between the average yield on interest-earning
assets and the average cost of interest-bearing liabilities.
(4) Represents net interest earnings divided by average interest-earning
assets.
37
<PAGE>
Rate/Volume Analysis. Net interest income is affected by changes in the
mix of the volume and sales of interest-earning assets and interest-earning
liabilities. The following table represents the extent to which changes in
interest rates and changes in the volume of interest-earning assets and
interest-bearing liabilities have affected the Savings Bank's interest income
and interest expense during the periods indicated.
<TABLE>
<CAPTION>
Year Ended December 31, Year Ended December 31,
------------------------------------ --------------------------------
1997 vs. 1996 1996 vs. 1995
Increase/(Decrease) Increase/(Decrease)
------------------------------------ --------------------------------
Volume Rate Total Volume Rate Total
---------- ---------- ---------- -------- ---------- --------
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Investments(1) .......................... $198 $ 238 $436 $ (6) $ 444 $ 438
Mortgage-backed securities .............. (52) (5) (57) (26) (36) (62)
Loans(2) ................................ 549 (127) 422 437 (64) 373
----- ------- ----- ----- ----- -----
Total interest-earning assets ......... 695 106 801 405 344 749
Interest-bearing liabilities:
Deposits ................................ 380 72 452 39 600 639
Borrowed Money .......................... (6) 1 (5) -- -- --
Total interest-bearing
liabilities. .......................... 374 73 447 39 600 639
------ ------- ------ ----- ----- -----
Net change in net interest income . $321 $ 33 $354 $ 366 ($ 256) $ 110
====== ======= ====== ===== ===== =====
</TABLE>
- ------------
(1) Includes interest-earning deposits and investment securities.
(2) Includes non-accrual loans and loans held for sale.
Net Income. The Savings Bank's net income totaled $708,000 and $139,000
for the year ended December 31, 1997 and December 31, 1996, respectively. This
increase in net income was the result of an eight basis point increase in the
Savings Bank's net yield on interest earning assets principally caused by an
increase of $6.17 million in average loans and a $4.30 million increase in
investment securities and a decrease in noninterest expense associated with the
FDIC's one-time special assessment in the year ended December 31, 1996. Without
the SAIF special assessment, net income for 1996 would have been $513,000.
Earnings per share for 1997 and 1996, were $.61 and $.12, respectively.
Interest Income. Total interest income increased by $801,000, or 10.08%,
to $8.74 million for the year ended December 31, 1997, from $7.94 million for
the year ended December 31, 1996. This reflected a $7.51 million, or 6.88%,
increase in average interest-earning assets, and a 22 basis point increase in
average yield on interest-earning assets. The increase in average
interest-earning assets was comprised of a $3.50 million increase in average
investment and mortgage-backed securities and a $6.17 million increase in
average net loans. The increase in interest-earning assets generally reflected
management's strategy of pursuing moderate growth while maintaining adequate
margins over minimum required capital levels.
Interest Expense. Total interest expense increased to $4.53 million for
the year ended December 31, 1997, from $4.08 million for the year ended
December 31, 1996, representing an increase of $450,000 or 11.03%. Higher
interest expense resulted from a $6.25 million increase in average-interest
bearing liabilities and an 18 basis point incerase in the average yield on
interest-bearing liabilities. This increase in interest-bearing liabilities was
comprised of a $6.93 million increase in higher yielding average certificates
of deposit that was only partially offset by a $616,000 decrease in average
savings deposits. Despite the small decline in savings account deposits, the
Savings Bank attracts a significant portion of its deposits from its passbook
product. Management's experience is that its customer base still finds the
traditional passbook savings account attractive even though higher yields may
be available from alternative deposit products. Accordingly, the Savings Bank
prices its passbook product above its large commercial bank competitors. As a
result, the Savings Bank has been able to fund operations with a significant
percentage of passbook savings accounts and thereby achieve a comparatively low
cost of funds.
38
<PAGE>
Provision for Loan Losses. The Savings Bank makes a provision to its
allowance for loan losses to protect the Savings Bank against possible but not
yet identified losses inherent in the Savings Bank's loan portfolio. This
provision is recognized for financial reporting purposes as a reduction of
income. In making such provision, management of the Savings Bank considers,
among other factors, the nature and volume of the loan portfolio, overall
portfolio quality, review of specific problem loans and current economic
conditions that may affect the borrower's ability to pay. Effective January 1,
1997, interest is discontinued on all loans that are contractually past due 3
months. Prior to January 1, 1997, interest was discontinued on residential
loans that were contractually past due 12 months, unless the value of the
mortgaged property well exceeded the loan balance in which case interest
continued to accrue until the loan balance plus accrued interest equalled the
fair market value of the property securing the loan. Interest was discontinued
on commercial, consumer and unsecured loans that were contractually past due 3
months. During the years ended December 31, 1997 and 1996, the Savings Bank had
charge-offs against the allowance for loan losses of $29,000 and $133,000,
respectively, reflecting write-offs on several different loans in both periods.
During such periods, the Savings Bank provided $60,000 and $133,000,
respectively, for loan losses in order to protect against future losses. The
provision for loan losses was higher in both 1997 and 1996 compared to prior
periods. This occured during these years, in part, because of deterioration in
certain specific credits in 1996 and because of the planning and implementation
of the loan diversification strategy. Management expects the provision for loan
losses to increase in future periods as the Savings Bank achieves its
diversification strategy. In addition, the provision for loan losses may
increase in 1998 and 1999 if management determines that losses inherent in the
existing portfolio of nonaccrual loans exceeds anticipated recoveries.
Net Interest Income After Provision for Loan Losses. Net interest income
after the provision for loan losses for the year ended December 31, 1997,
increased to $4.15 million from $3.72 million for the year ended December 31,
1996, an increase of $430,000, or 11.56%.
Noninterest Income. Noninterest income consists of loan fees, service
charges, rental income, net gains and losses on sales of investment and
mortgage-backed securities and other income. Noninterest income increased by
$60,000, or 5.94%, to $1.07 million for the year ended December 31, 1997 from
$1.01 million for the year ended December 31, 1996. The principal reasons for
the increase in noninterest income was a $174,000 increase in loans fees to
$637,000 in 1997 from $463,000 in 1996 due to higher loan origination volume
which was offset by a $23,000 decrease in service charges attributable to a
major customer of the bank discontinuing services where its daily excess cash
was sent to the Savings Bank and the customer was charged a fee per $1,000.
This service began in the last calendar quarter of 1995 and was discontinued in
the third quarter of 1996; therefore there were no fees charged for the year
ended December 31, 1997. Other income decreased $90,000 from $137,000 for the
year ended December 31, 1996 to $47,000 for the year ended December 31, 1997.
Noninterest Expense. Noninterest expense principally consists of
employees' compensation and benefits, deposit insurance premiums and premises
and occupancy costs. Noninterest expense decreased by $240,000, or 5.45%, to
$4.16 million for the year ended December 31, 1997, from $4.40 million for the
year ended December 31, 1996. The principal reasons for the decrease was a
$671,000 decrease in federal insurance premiums due to the FDIC's one-time
assessment to recapitalize the Savings Association Insurance Fund in the year
ended December 31, 1996 and a $135,000 decrease in expenses of real estate
owned due to a write down of real estate owned for the year ended December 31,
1996. This decrease was offset by an increase of $228,000 in premises and
occupancy costs and a $339,000 increase in compensation and employee benefits
due to the establishment of the new Center City branch, the relocation of the
executive offices to Center City and related increased staffing requirements.
Income Taxes. Income tax provisions for the year ended December 31, 1997
and 1996 of $345,000 and $201,000, respectively, generally reflect the Savings
Bank's pre-tax income at rates then in effect, except that a $37,000 and
$59,000 deferred tax expense as a result of timing differences in the
recognition of revenue and expenses for tax and financial statement purposes
were realized in the December 31, 1997 and 1996 period, respectively.
Results of Operations for the Years Ended December 31, 1996 and September 30,
1995
Net Income
The Savings Bank's net income totalled $139,000 and $659,000 for the years
ended December 31, 1996 and September 30, 1995, respectively. The decrease in
net income was the result of substantially higher non-interest expense
associated with the federal deposit insurance assessment to recapitalize the
SAIF, the Savings Bank's Center City branch expansion, the move of the
executive offices from South Philadelphia to Center City, Philadelphia and the
expansion of the mortgage banking operations and was partially offset by higher
net interest income and noninterest income.
39
<PAGE>
Interest Income. Total interest income increased by $750,000, or 10.43%,
to $7.94 million for the year ended December 31, 1996, from $7.19 million for
the year ended September 30, 1995. This reflected a $5.24 million, or 5.04%,
increase in average interest-earning assets and a 36 basis point increase in
average yield on interest-earning assets. The increase in average
interest-earning assets was comprised of a $3.02 million increase in average
interest-earning deposits and a $4.79 million increase in average net loans.
The increase in net loans resulted from modest loan demand in the Savings
Bank's market area. The increase in interest-earning assets generally reflected
management's strategy of pursuing moderate growth while maintaining adequate
margins over minimum required capital levels.
Interest Expense. Total interest expense increased to $4.08 million for
the year ended December 31, 1996, from $3.44 million for the year ended
September 30, 1995, representing an increase of $640,000, or 18.6%. Higher
interest expense resulted from a $760,000 decrease in average-interest bearing
liabilities but a shift in deposit composition including a $2.84 million
increase in average certificates of deposit and a $3.60 million decrease in
average savings deposits. Customers indicated a preference for certificates of
deposit, which had an average yield increase of 113 basis points, over savings
accounts, which had an average yield increase of only 4 basis points. As a
result, the yield on all interest-bearing liabilities increased 72 basis
points. In 1996 as market interest rates rose and alternative deposit products
began to pay higher yields, the historical relative price inelasticity of the
Savings Bank's passbook accounts diminished. Accordingly, the Savings Bank was
forced to increase rates on passbook accounts which resulted in compression of
its interest rate spread from 3.24% for the year ended September 30, 1995 to
2.88% for the year ended December 31, 1996.
Provision for Loan Losses. For the years ended December 31, 1996 and
September 30, 1995, the Savings Bank had charge-offs against the allowance for
loan losses of $133,000 and $27,000, reflecting write-offs on several different
loans. During such period, the Savings Bank provided $133,000 and $27,000,
respectively, for loan losses in order to protect against future losses. The
significant increase in the provision for loan losses for the year ended
December 31, 1996 from the prior period was caused primarily by a decision on
the part of management to increase the allowance for loan losses in
anticipation of the implementation of the loan diversification strategy of the
Savings Bank.
Net Interest Income After Provision for Loan Losses. Net interest income
after the provision for possible loan losses for the year ended December 31,
1996, of $3.72 million remained unchanged compared to the year ended September
30, 1995.
Noninterest Income. Noninterest income increased by $54,000, or 5.65%, to
$1.01 million for the year ended December 31, 1996 from $956,000 for the year
ended September 30, 1995. The principal reasons for the increase in noninterest
income were a $16,000 increase in rental income and a $300,000 increase in
service charges attributable to a major customer of the Savings Bank requiring
additional services where its daily excess cash is sent to the Savings Bank and
the customer is charged a fee per $1,000. This service began in the last
calendar quarter of 1995; therefore there were no fees charged prior to
September 30, 1995. The increase in noninterest income was offset by a decrease
in other income of $245,000.
Noninterest Expense. Noninterest expense principally consists of
employees' compensation and benefits, deposit insurance premiums and occupancy
and equipment costs. Noninterest expense increased by $820,000, or 22.90%, to
$4.40 million for the year ended December 31, 1996, from $3.58 million for the
year ended September 30, 1995. The principal reasons for the increase were a
$534,000 increase in federal insurance premiums due to the FDIC's one-time
assessment to recapitalize the SAIF, a $128,000 increase in premises and
occupancy costs due to the opening of the new Center City Branch and relocation
of the executive offices in June 1996 and a $107,000 increase in expenses of
real estate owned and a $71,000 increase in noninterest expense.
Income Taxes. Income tax provisions for the years ended December 31, 1996
and September 30, 1995 of $201,000 and $433,000, respectively, generally
reflect the Savings Bank's pre-tax income at rates then in effect, except that
a $59,000 and $33,000 deferred tax expense as a result of timing differences in
the recognition of revenue and expenses for tax and financial statement
purposes were realized in the December 31, 1996 and September 30, 1995 period,
respectively.
Liquidity and Capital Resources
The Savings Bank is required to maintain a sufficient level of liquid
assets, as determined by management and defined and reviewed for adequacy by
the FDIC during its regular examinations. The FDIC, however, does not prescribe
by regulation a minimum amount or percentage of liquid assets. The FDIC allows
any marketable
40
<PAGE>
security, whose sale would not impair the capital adequacy of the Savings Bank,
to be eligible for liquidity. The Savings Bank's liquidity is quantified
through the use of a standard liquidity ratio of liquid assets (cash and cash
equivalents, investment securities available-for-sale, mortgage-backed
securities available-for-sale and Federal Home Loan Bank stock) to short-term
borrowings plus deposits. Using this formula, the Savings Bank's liquidity
ratio was 42.11% as of December 31, 1997. The Savings Bank adjusts its
liquidity levels in order to meet funding needs of deposit outflows and loan
commitments. The Savings Bank also adjusts liquidity as appropriate to meet its
asset/liability management objectives.
The Savings Bank's primary source of funds are deposits, the amortization
and prepayment of loans and mortgage-backed securities, maturities of
investments securities, the sale of mortgage loans as part of TNMC's mortgage
banking business and earnings provided from operations. While scheduled
principal repayments on loans and mortgage-backed securities are a relatively
predictable source of funds, deposit flows and loan prepayments are greatly
influenced by general interest rate levels, economic conditions and
competition. The Savings Bank manages the pricing of its deposits to maintain a
desired deposit balance. In addition, the Savings Bank invests excess funds in
short-term, interest-earning assets and other assets that provide liquidity to
meet lending requirements and interest rate risk management objectives.
Short-term, interest-earning deposits with the FHLB of Pittsburgh amounted to
$26.70 million at December 31, 1997. For additional information about cash
flows from the Savings Bank's operating, financing and investment activities,
see "CONSOLIDATED FINANCIAL STATEMENTS."
A major portion of the Savings Bank's liquidity consists of cash and cash
equivalents, which are a product of its operating investment and financing
activities. The primary sources of cash were net income, principal repayments
on loans and mortgage-backed securities and increases in deposit accounts. At
December 31, 1997, the Savings Bank had unfunded loan commitments of $2.99 and
certificates of deposit due to mature within one year of $45.64 million. The
Savings Bank believes its has sufficient liquidity to meet these obligations.
Asset/Liability Management and Interest Rate Sensitivity Analysis
Interest rate risk may be analyzed by examining the extent to which an
institution's assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period
if it will mature or re-price within that time period. The interest rate
sensitivity gap is defined as the difference between the amount of
interest-earning assets maturing or re-pricing within a specific time period
and the amount of interest-bearing liabilities maturing or re-pricing within
that time period. A gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of interest rate sensitive liabilities. A
gap is considered negative when the amount of interest rate sensitive
liabilities exceeds the amount of interest rate sensitive assets. During a
period of rising interest rates, a negative gap would tend to adversely affect
net interest income while a positive gap would tend to positively affect net
interest income. Conversely, during a period of falling interest rates, a
negative gap would tend to positively affect net interest income while a
positive gap would tend to adversely affect net interest income.
The Savings Bank's portfolio of adjustable rate loans constituted only
11.92% of the total loan portfolio at December 31, 1997. Accordingly, the
Savings Bank's policy in recent years has been to reduce its exposure to
interest rate risk by maintaining high asset liquidity through the purchase of
short-term or adjustable-rate investment securities and mortgage-backed
securities. See "RISK FACTORS -- Interest Rate Risk." Although this requires
the Savings Bank to accept lower yields on these assets, it permits the Savings
Bank to frequently reinvest proceeds of repayments and maturing securities to
take advantage of changing interest rates. As part of its strategy to expand
commercial, commercial real estate and consumer lending, the Savings Bank has
also experienced growth in short-term loans that re-price more frequently and
therefore more closely match the market interest rates.
Of the Savings Bank's $108.73 million in deposits at December 31, 1997,
$45.43 million consisted of deposit accounts that are immediately withdrawable.
The Savings Bank nevertheless believes that, based upon historical experience,
a substantial portion of these deposits represent inelastic deposits and are
not likely to be withdrawn because of changes in interest rates, nor are they
likely to re-price as rapidly as changes in market interest rates.
41
<PAGE>
The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 1997, that are
expected to re-price or mature, based upon certain assumptions, in each of the
future time periods shown. Except as stated below, the amounts of assets and
liabilities shown that re-price or mature during a particular period were
determined in accordance with the earlier of the term of re-pricing or the
contractual term of the asset or liability. Management believes that these
assumptions approximate the standards used in the savings industry and
considers them appropriate and reasonable.
<TABLE>
<CAPTION>
More than More Than
One Year Two Years
Within One To Two To Three
Year Years Years
------------ ------------- -------------
(Dollars in thousands)
<S> <C> <C> <C>
Interest-earning assets:
Loans (1)(2) Mortgage loans:
Residential ..................... $ 3,568 $ 125 $ 570
Commercial. ..................... 1,627 566 1,073
Land and construction
loans .......................... 2,597
Consumer loans. ................. 357 117 165
Other loans ..................... 2,157
-------
Total loans .................... 10,306 808 1,808
------- -------- ---------
Mortgage-backed
securities(3) .................. 625 535 461
Mortgage loans held for
sale. .......................... 6,575
Investment securities(4). ....... 18,234 2,020 --
Other interest-earning
assets. ........................ 23,778
-------
Total interest-earning
assets ....................... $ 59,518 $ 3,363 $ 2,269
======== ======== =========
Interest-bearing liabilities:
Transaction accounts. ............. $ 5,374
Money market accounts ............. 7,201
Other savings accounts. ............ 1,188
Passbook accounts(5). ............. 3,922 3,334 2,834
Certificate of deposit over
100,000. ........................ 8,904 1,284 100
Certificate of deposit under
100,000. ........................ 36,738 12,884 1,472
Repurchase agreement. ............. 1,724 945 173
-------- -------- ---------
Total interest-bearing
liabilities .................... $ 65,051 $ 18,447 $ 4,579
======== ======== =========
Interest-bearing assets net of
interest-bearing liabilities. ..... (5,533) (15,084) (2,310)
Cumulative excess (deficiency)
interest-bearing assets over
interest-bearing liabilities. ..... (5,533) (20,617) (22,927)
Cumulative excess (deficiency)
of interest-earning assets
over interest-bearing liabili-
ties as a percentage of total
assets ............................ (4.28%) (15.94%) (17.73%)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
More Than More Than
Three Five Years
Years To To Ten More Than
Five Years Years Ten Years Total
------------ ------------- ------------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans (1)(2) Mortgage loans:
Residential ..................... $ 2,147 $ 4,059 $ 34,471 $ 44,940
Commercial. ..................... 6,184 1,162 1,510 12,122
Land and construction
loans .......................... 2,597
Consumer loans. ................. 264 49 -- 952
Other loans ..................... 2,157
--------
Total loans .................... 8,595 5,270 35,981 62,768
--------- -------- --------- --------
Mortgage-backed
securities(3) .................. 927 2,453 -- 5,001
Mortgage loans held for
sale. .......................... 6,575
Investment securities(4). ....... -- -- -- 20,254
Other interest-earning
assets. ........................ 23,778
--------
Total interest-earning
assets ....................... $ 9,522 $ 7,723 $ 35,981 $118,376
========= ======== ========= ========
Interest-bearing liabilities:
Transaction accounts. ............. $ 5,374
Money market accounts ............. 7,201
Other savings accounts. ............ 1,188
Passbook accounts(5). ............. 4,817 11,240 -- 26,147
Certificate of deposit over
100,000. ........................ 503 -- -- 10,791
Certificate of deposit under
100,000. ........................ 1,205 405 -- 52,704
Repurchase agreement. ............. -- -- -- 2,842
--------- -------- --------- --------
Total interest-bearing
liabilities .................... $ 6,525 $ 11,645 $ -- $106,247
========= ======== ========= ========
Interest-bearing assets net of
interest-bearing liabilities. ..... 2,997 (3,922) 35,981 12,129
Cumulative excess (deficiency)
interest-bearing assets over
interest-bearing liabilities. ..... (19,930) (23,852) 12,129
Cumulative excess (deficiency)
of interest-earning assets
over interest-bearing liabili-
ties as a percentage of total
assets ............................ (15.41%) (18.44%) 9.38%
</TABLE>
- ------------
(1) Net of deferred loan fees and the allowance for loan losses.
42
<PAGE>
(2) Adjustable-rate loans are included in the period in which interest rates
are next scheduled to adjust rather than in the period in which they are
contractually due to mature. Fixed-rate loans are included in the period
in which they are contractually due to mature.
(3) Reflects the repricing of the underlying loans and/or the expected average
life of the mortgage-backed security.
(4) Reflects repricing or contractual maturity.
(5) For passbook accounts, which totalled $26.15 million, or 24.05% of total
deposits at December 31, 1997, assumes an annual decay rate of 15% through
the fifth year, based upon historical trends.
Significant shortcomings are inherent in the analysis presented by the
foregoing table. For example, although certain assets and liabilities may have
similar maturities or periods to re-pricing, they may react in different
degrees to changes in market interest rates. Also, interest rates on certain
types of assets and liabilities may fluctuate in advance of or lag behind
changes in market interest rates. Additionally, certain assets, such as some
adjustable rate loans, have features that restrict changes in interest rates on
a short term basis and over the life of the asset. Moreover, in the event of a
change in interest rates, prepayment and early withdrawal levels would likely
deviate significantly from those assumed in calculating the table.
Impact of Accounting Pronouncements and Regulatory Policies
Accounting for Employee Stock Ownership Plans. In November 1993 the
American Institute of Certified Public Accountants issued SOP 93-6, which
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 and to exclude unallocated shares from earnings per share
computations. The effect of SOP 93-6 on net income and book value per share in
future periods cannot be predicted due to the uncertainty of the fair value of
the shares at the time they will be committed to be released. See "PRO FORMA
DATA."
Accounting for Stock-Based Compensation. In October 1995, FASB issued SFAS
No. 123. This statement encourages all entities to adopt a fair value-based
method of accounting for employee stock compensation plans, whereby
compensation cost is measured at the grant date based on the value of the award
and is recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," whereby compensation cost is the excess, if any, of the
quoted market price of the stock at the grant date (or other measurement date)
over the amount an employee must pay to acquire the stock. Entities electing to
remain with the accounting in APB Opinion No. 25 must make pro forma
disclosures of net income and earnings per share, as if the fair value-based
method of accounting had been applied.
Generally, stock options issued under the 1995 Stock Option Plan have no
intrinsic value at the grant date, and under APB Opinion No. 25, no
compensation cost is recognized for them. The accounting requirements of this
statement are generally effective for transactions entered into in fiscal years
that begin after December 15, 1995. The disclosure requirements of this
statement are generally effective for financial statements for fiscal years
beginning after December 15, 1995. The Savings Bank has continued accounting
for stock options under APB Opinion No. 25 and has made the pro forma
disclosures prescribed by this Statement. See "PRO FORMA DATA."
Earnings Per Share. SFAS No. 128, "Earnings Per Share," issued in February
1997, establishes standards for computing and presenting earnings per share
("EPS") and applies to entities with publicly-held common stock or potential
common stock. It replaces the presentation of primary EPS with a presentation
of basic EPS and requires the dual presentation of basic and diluted EPS on the
face of the income statement. SFAS No. 128 is effective for the financial
statements for the periods ending after December 15, 1997. SFAS No. 128
requires restatement of all prior period EPS data presented. The impact of its
adoption has not been material to the Savings Bank.
Disclosure of Information About Capital Structure. SFAS No. 129,
"Disclosure of Information About Capital Structure," establishes standards for
disclosing information about an entity's capital structure and applies
43
<PAGE>
to all entities. SFAS No. 129 continues the previous requirements to disclose
certain information about an entity's capital structure found in APB Opinions
No. 10, "Omnibus Opinion - 1966," and No. 15, "Earnings Per Share," and SFAS
No. 47, "Disclosure of Long-Term Obligations," for entities that were subject
to those standards. SFAS No. 129 is effective for financial statements for
periods ending after December 15, 1997. SFAS No. 129 contains no change in
disclosure requirements for entities that were previously subject to the
requirements of APB Opinions Nos. 10 and 15 and SFAS No. 47. The adoption of
the provisions of SFAS No. 129 is not expected to have a material impact on the
Savings Bank.
Disclosure About Comprehensive Income. SFAS No. 130, "Reporting
Comprehensive Income," issued in July 1997, establishes standards for reporting
and presentation of comprehensive income and its components (revenues,
expenses, gains, and losses) in a full set of general-purpose financial
statements. It requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is presented with the same prominence as other
financial statements. SFAS No. 130 requires that companies (i) classify items
of other comprehensive income by their nature in a financial statement and (ii)
display the accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section of the
statement of financial condition. SFAS No. 130 is effective for fiscal years
beginning after December 15, 1997. Reclassification of financial statements for
earlier periods provided for comprehensive purposes is required.
Effect of Inflation and Changing Prices
The consolidated financial statements and related financial data presented
herein have been prepared in accordance with GAAP, which require the
measurement of financial position and operating results in terms of historical
dollars without considering the change in the relative purchasing power of
money over time due to inflation. The primary impact of inflation is reflected
in the increased cost of the Savings Bank's operations. Unlike most industrial
companies, virtually all 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 do general
levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services.
Disclosure Regarding Year 2000 Compliance
The Holding Company and the Savings Bank are taking measures to address
the impact of the "Year 2000" issue on its information systems. The Year 2000
issue, which is common to most businesses, concerns the inability of certain
information systems, primarily certain computer software programs, to properly
recognize and process date sensitive information beyond the year 1999. The
Holding Company and the Savings Bank outsource all data processing applications
to Intrieve, Incorporated ("Intrieve"). Under the agreement with Intrieve,
Intrieve is obligated to incur all software related costs to make its system
Year 2000 compliant. Intrieve has prepared a detailed schedule of functions to
be performed in its compliance project. The expected completion of the project
is scheduled for December 1998. The Holding Company and the Savings Bank are
obligated to incur only the hardware cost associated with implementing the
changes required by Intrieve, however the hardware costs are not expected to be
material. Other computer programs utilized by the Company and the Savings Bank,
such as accounting packages and investment packages, are either Year 2000
compliant or will be Year 2000 compliant in the near future at no significant
cost to the Holding Company and the Savings Bank.
44
<PAGE>
BUSINESS
Business of the Holding Company
General. The Holding Company was organized as a Pennsylvania business
corporation at the direction of the Savings Bank on October 3, 1997 for the
purpose of becoming a holding company for the Savings Bank upon completion of
the Conversion and Reorganization. As a result of the Conversion and
Reorganization, the Savings Bank will be a wholly-owned subsidiary of the
Holding Company and all of the issued and outstanding capital stock of the
Savings Bank will be owned by the Holding Company.
Business. Prior to the Conversion and Reorganization, the Holding Company
has not and will not engage in any significant activities other than that of an
organizational nature. Upon completion of the Conversion and Reorganization,
the Holding Company's primary business activity will be the ownership of the
outstanding capital stock of the Savings Bank. In the future, the Holding
Company may acquire or organize other operating subsidiaries, although there
are no current plans, arrangements, agreements or understandings, written or
oral, to do so.
Initially, the Holding Company will neither own nor lease any property but
will instead use the premises, equipment and furniture of the Savings Bank.
Because the Holding Company will hold only the outstanding capital stock
of the Savings Bank upon consummation of the Conversion and Reorganization, the
competitive conditions applicable to the Holding Company will be the same as
those confronting the Savings Bank. See "BUSINESS -- Business of the Savings
Bank -- Competition."
Business of the Savings Bank
General. The Savings Bank is a Pennsylvania-chartered stock savings bank
headquartered in Philadelphia, Pennsylvania. The Savings Bank is a
community-oriented institution offering traditional deposit and loan products.
The Savings Bank operates five full-service offices in Philadelphia,
Pennsylvania and one full-service office in Glenside, Montgomery County,
Pennsylvania.
In February 1996, the Board of Trustees of Pennsylvania Savings Bank
elected to change the Savings Bank's fiscal year end from September 30th to
December 31st. The Savings Bank filed a Transition Report pursuant to Section
13 of the Securities Exchange Act of 1934 for the transition period from
October 1, 1995 to December 31, 1995.
At December 31, 1997, the Savings Bank had total assets of $129.34
million, total deposits of $108.73 million and shareholders' equity of $15.00
million.
The Savings Bank is primarily engaged in the business of attracting
deposits from the general public in the Savings Bank's market area and
investing such deposits in loans secured by one- to four-family residential
real estate, commercial real estate loans, commercial business loans,
construction loans and investment and mortgage-backed securities. The Savings
Bank's deposits are insured by the SAIF of the FDIC to the extent that such
deposits were assumed from the mutual savings bank in the MHC Reorganization.
Deposits accepted by the Savings Bank after the MHC Reorganization are insured
by the FDIC's BIF, up to applicable limits.
Lending Activities
General. The Savings Bank historically focused its lending activities
primarily on the origination of loans secured by first mortgages on
owner-occupied, one-to four-family residences for retention in the Savings
Bank's portfolio. The Savings Bank has expanded origination of one-to
four-family residential mortgage loans for resale in the secondary market
through expansion of its mortgage banking operations. As part of a strategy to
diversify its loan portfolio, achieve a higher net interest margin and reduce
interest rate risk, the Savings Bank has increased its origination of
construction loans, commercial real estate loans, commercial business loans,
and
45
<PAGE>
multifamily real estate loans which together totalled 26.50% of the Savings
Bank's total loans at December 31, 1997. To a lesser extent, the Savings Bank
and its subsidiaries also originate consumer loans, including home equity,
second mortgage, and other consumer loans. The Savings Bank expects this
diversification trend to continue.
One- to-four-family residential mortgage loans originated for resale in
the secondary market are underwritten according to standards that conform to
FNMA and/or FHLMC guidelines. One- to-four-family residential mortgage loans
originated and held in portfolio are generally underwritten to conform to
secondary market standards but from time to time the Savings Bank originates
non-conforming loans if, in the Savings Bank's judgment, the borrower does not
present an unreasonable risk of default. The Savings Bank and TNMC, its
mortgage banking subsidiary, have sold residential mortgage loans in the
secondary market. The Savings Bank has begun to expand its mortgage banking
capabilities through TNMC and anticipates that its origination of loans for
sale in the secondary market in Southeastern Pennsylvania, Southern New Jersey
and Northern Delaware will increase significantly.
Analysis of Loan Portfolio. Set forth below is selected data relating to
the composition of the Savings Bank's loan portfolio by type of loan as of the
dates indicated, including data regarding the portion of the Savings Bank's
loans that bear fixed and adjustable interest rates, respectively. TNMC has
originated and sold mortgage loans to third party investors within the Savings
Bank's financial reporting periods. Such mortgage loans are not reflected in
the financial tables and financial statements pertaining to a particular period
to the extent that such loans were sold prior to any period end.
<TABLE>
<CAPTION>
At December 31,
------------------------------------------------
1997 1996
----------------------- -----------------------
Amount Percent Amount Percent
---------- ----------- ---------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Real Estate Loans:
One-to-four-family ................ $44,940 71.59% $45,018 84.47%
Construction loans ................ 2,597 4.14 661 1.24
Five or more family residence ..... 702 1.12 654 1.23
Nonresidential .................... 11,421 18.20 5,575 10.46
Commercial loans ................... 1,908 3.04 369 0.69
Consumer loans(1) .................. 1,201 1.91 1,016 1.91
------- ------ ------- ------
Total loans(2) ................... $62,769 100.00% $53,293 100.00%
======= ====== ======= ======
Less:
Unearned fees and discounts ....... $ 478 $ 495
Undisbursed loan proceeds ......... 138 5
Allowance for loan losses ......... 238 207
------- -------
Net Loans ......................... $61,915 $52,586
======= =======
Total loans with:
Fixed rates ....................... $55,289 88.08% $48,701 91.38%
Adjustable rate ................... 7,480 11.92 4,592 8.62
------- ------ ------- ------
Total loans(2) ................... $62,769 100.00% $53,293 100.00%
======= ====== ======= ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
At September 30,
-------------------------------------------------------------------------
1995 1994 1993
----------------------- ----------------------- -----------------------
Amount Percent Amount Percent Amount Percent
---------- ----------- ---------- ----------- ---------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Real Estate Loans:
One-to-four-family ................ $43,033 82.93% $43,105 84.28% $44,258 85.99%
Construction loans ................ 829 1.60 339 0.66 651 1.26
Five or more family residence ..... 508 0.98 405 0.79 412 0.80
Nonresidential .................... 5,940 11.45 5,819 11.38 5,192 10.09
Commercial loans ................... 602 1.16 780 1.53 236 0.46
Consumer loans(1) .................. 977 1.88 696 1.36 720 1.40
------- ------ ------- -------- ------- ------
Total loans(2) ................... $51,889 100.00% $51,144 $ 100.00% $51,469 100.00%
======= ====== ======= ========= ======= ======
Less:
Unearned fees and discounts ....... $ 464 $ -- $ --
Undisbursed loan proceeds ......... 5 24 10
Allowance for loan losses ......... 208 208 187
------- ------- -------
Net Loans ......................... $51,212 $50,912 $51,272
======= ======= =======
Total loans with:
Fixed rates ....................... $47,632 91.80% $46,740 91.39% $47,129 91.57%
Adjustable rate ................... 4,257 8.20 4,404 8.61 4,340 8.43
------- ------ ------- --------- ------- ------
Total loans(2) ................... $51,889 100.00% $51,144 100.00% $51,469 100.00%
======= ====== ======= ========= ======= ======
</TABLE>
- ------------
(1) Consists of both secured and unsecured personal loans.
(2) Does not include loans originated and held for sale by TNMC, the Savings
Bank's subsidiary, which amounted to $6.6 million and $4.6 million, at
December 31, 1997 and 1996, respectively and $1.04 million, $185,000 and
$1.5 million at September 30, 1995, 1994 and 1993, respectively.
One-to Four-Family Residential Real Estate Loans. The primary lending
activity of the Savings Bank historically consisted of the origination for
retention in the Savings Bank's portfolio of owner-occupied one-to four-family
residential mortgage loans secured by properties located in the Savings Bank's
market area. In 1997,
46
<PAGE>
consistent with the Savings Bank's strategy regarding diversification of its
loan portfolio, origination of loans other than residential mortgages loans
totalled $26.75 million, or 72.42%, of originations in 1997. However, at
December 31, 1997, $44.94 million, or 71.59%, of the Savings Bank's total loan
portfolio still consisted of one-to four-family residential mortgage loans.
The Savings Bank currently offers one- to four-family residential mortgage
loans with terms typically ranging from 10 to 30 years, with either adjustable
or fixed interest rates. Originations of fixed-rate mortgage loans versus
adjustable-rate mortgage loans are affected by such things as interest rate
risk policies, customer preferences and competition. In the Savings Bank's
market area borrowers strongly prefer fixed-rate mortgage loans as opposed to
adjustable-rate mortgage loans.
The Savings Bank's fixed-rate loans are generally originated and
underwritten according to standards that permit sale in the secondary mortgage
market. Secondary mortgage market loans typically conform to FNMA and/or FHLMC
guidelines. The Savings Bank has, from time to time, originated loans that do
not conform to such secondary market standards. Such nonconforming loans
include loans exceeding the maximum loan amounts acceptable to FNMA and FHLMC
and loans as to which the Savings Bank's underwriting indicates that the
particular borrower does not present an unreasonable risk of default in view of
underwriting criteria that differ from secondary mortgage market standards.
Whether the Savings Bank can or will sell fixed-rate loans in the secondary
market, however, depends on a number of factors including the yield and the
term of the loan, market conditions, and the Savings Bank's current interest
rate risk position. The Savings Bank has primarily been a portfolio lender, and
at any one time the Savings Bank holds only a nominal amount of loans for
immediate sale.
The Savings Bank's one-to four-family mortgage loans are amortized on a
monthly basis with principal and interest due each month. One- to four-family
residential real estate loans often remain outstanding for significantly
shorter periods than their contractual terms because borrowers may refinance or
prepay loans at their option.
The Savings Bank currently offers adjustable-rate mortgage loans with
initial interest rate adjustment periods of one and three years, based on
changes in a designated market index. After the initial interest rate
adjustment, each adjustable-rate mortgage loan adjusts either annually or every
third year within a periodic interest rate adjustment limit of 200 basis points
and within a maximum interest rate adjustment limit of 600 basis points above
the initial rate. Adjustable-rate mortgage loans are currently priced at a
fixed margin above the weekly average yield on United States Treasury
securities adjusted to a constant term to maturity of one year (or three years
in the case of loans with three year interest rate adjustment periods), as
published by the Federal Reserve. The Savings Bank originates adjustable-rate
mortgage loans with initially discounted rates, which vary depending upon
market conditions and whether the initial rate adjustment period is one or
three years. Adjustable-rate loans represented 11.92% of the Savings Bank's
total loan portfolio at December 31, 1997 due to the difficulty of originating
adjustable-rate mortgage loans in the Savings Bank's primary market.
Traditionally, the Savings Bank's older, low to moderate income residential
customer base has not been receptive to adjustable rate mortgage loans and this
tendency was exacerbated in recent years because of the comparatively low
interest rate environment for fixed rate mortgate loans.
The Savings Bank's one- to four-family residential first mortgage loans
customarily include due-on-sale clauses, which are provisions giving the
Savings Bank the right to declare a loan immediately due and payable in the
event, among other things, that the Borrower sells or otherwise disposes of the
underlying real property serving as security for the loan. Due-on-sale clauses
are an important means of adjusting the rates on the Savings Bank's fixed-rate
mortgage loan portfolio, and the Savings Bank has usually exercised its rights
under these clauses.
Regulations limit the amount that a savings bank may lend relative to the
appraised value of the real estate securing the loan, as determined by an
appraisal at the time of loan origination. Appraisals are performed by
appraisers approved by the Savings Bank's Board of Trustees. Such regulations
permit a maximum loan-to-value ratio of 95% for residential property and 80%
for all other real estate loans. The Savings Bank's lending policies limit the
maximum loan-to-value ratio on both fixed-rate and adjustable-rate mortgage
loans without private mortgage insurance to 80% of the lesser of the appraised
value or the purchase price of the real estate that serves
47
<PAGE>
as collateral for the loan. For one- to four-family real estate loans with
loan-to-value ratios in excess of 80%, the Savings Bank requires the borrower
to obtain private mortgage insurance. The Savings Bank requires fire and
casualty insurance, as well as title insurance on all properties securing real
estate loans made by the Savings Bank.
Construction Loans. The Savings Bank's loan portfolio included $2.60
million of construction loans at December 31, 1997, which amounted to 4.14% of
the Savings Bank's total loan portfolio. The Savings Bank offers fixed and
adjustable rate residential construction loans primarily for the construction
of owner-occupied one-to four-family residences in the Savings Bank's market
area to builders or to owners who have a contract for construction. The Savings
Bank generally does not make a construction loan to a builder unless the
housing unit is under an agreement of sale. Construction loans to owners are
generally structured to become permanent loans, and are originated with terms
up to 30 years with an allowance of up to one year for construction. The
Savings Bank's largest construction loan at December 31, 1997 had a principal
balance of approximately $989,000. Construction loans at December 31, 1997 were
located in Philadelphia County, Montgomery County and Bucks County,
Pennsylvania.
Construction lending generally involves a greater degree of credit risk
than other one- to four-family residential mortgage lending. The repayment of
the construction loan is often dependent upon the successful completion of the
construction project. Construction delays or the inability of the borrower to
sell the property once construction is completed may impair the borrower's
ability to repay the loan.
Five or More Family Residential Real Estate Loans. Loans secured by five
or more family residential real estate constituted approximately $702,000, or
1.12%, of the Savings Bank's total loan portfolio at December 31, 1997. The
Savings Bank's five or more family residential real estate loans are secured by
residence buildings with over 4 family units, which are generally rental
properties. At December 31, 1997, all of the
Savings Bank's five or more family residential real estate loans were secured
by properties located within the Savings Bank's market area. The Savings Bank's
largest five or more family residential real estate loan at December 31, 1997,
had a principal balance of approximately $196,000.
Five or more family residential real estate loans are offered with both
adjustable interest rates and fixed interest rates. The terms of each five or
more family residential real estate loan are negotiated on a case-by-case
basis. The Savings Bank generally makes five or more family residential real
estate loans up to 80% of the lesser of property cost or the appraised value of
the mortgaged property. Loans secured by five or more family residential real
estate generally involve a greater degree of credit risk than one-to
four-family residential mortgage loans. This increased credit risk is a result
of several factors, including the concentration of larger balances 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. Furthermore, the repayment of loans secured by
five or more family residential real estate is typically dependent upon the
successful operation of related real estate property. If the cash flow from the
project is reduced, the borrower's ability to repay the loan may be impaired.
Nonresidential Real Estate Loans. Loans secured by nonresidential real
estate constituted approximately $11.42 million, or 18.20%, of the Savings
Bank's total loan portfolio at December 31, 1997. The Savings Bank's
nonresidential real estate loans are secured by nonresidential properties such
as retail establishments, office buildings, and industrial buildings. The
Savings Bank also originates nonresidential real estate loans through its
subsidiary, PSA Financial Corp. See "SUBSIDIARIES." A significant portion of
the Savings Bank's nonresidential real estate loans are secured by properties
located within the Savings Bank's market area. The Savings Bank's largest
nonresidential real estate loan, which is secured by a business property in the
Savings Bank's market area, had a principal balance of approximately $1.16
million at December 31, 1997, and was performing in accordance with its terms.
Nonresidential real estate loans are offered with both adjustable interest
rates and fixed interest rates. The terms of each nonresidential real estate
loan are negotiated on a case-by-case basis. The Savings Bank generally makes
nonresidential real estate loans up to 75% of the lesser of property cost or
the appraised value of the mortgaged property. As in the case of five or more
family loans, nonresidential real estate loans generally involve a greater
degree of credit risk than one-to four-family residential mortgage loans and
carry larger loan balances.
48
<PAGE>
This increased credit risk results from the concentration of principal in a
more limited number of loans and borrowers, the effects of general economic
conditions on income producing properties, and the increased difficulty of
evaluating and monitoring nonresidential loans. The repayment of loans secured
by nonresidential real estate is typically dependent upon the success of the
related business operation. If the cash flow from the business is impaired, the
borrower's ability to repay the loan may also be impaired.
Commercial Loans. The Savings Bank currently offers commercial loans to
finance various activities in the Philadelphia metropolitan area, some of which
are secured in part by additional real estate collateral, such as business
property and/or personal residences. The Savings Bank originates commercial
loans through its subsidiary, PSA Financial Corp. See "SUBSIDIARIES." At
December 31, 1997, commercial loans totalled approximately $1.91 million or
3.04% of the total loan portfolio. Commercial loans are offered with either
adjustable or fixed interest rates. Adjustable rates are tied to the Savings
Bank's prime rate plus a margin.
Underwriting standards employed by the Savings Bank for commercial loans
include a determination of the applicant's ability to met existing obligations
and payments on the proposed loan from normal cash flows generated by the
applicant's business. The financial strength of each applicant also is assessed
through a review of financial statements provided by the applicant. Commercial
loans generally bear higher interest rates than residential loans, but they
also may involve a higher risk of default since their repayment is generally
dependent on the successful operation of the borrower's business. The Savings
Bank generally obtains personal guarantees from the borrower or a third party
as a condition to originating its commercial loans.
Consumer Loans. As of December 31, 1997, consumer loans totalled $1.20
million, or 1.91%, of the Savings Bank's total loan portfolio. The principal
types of consumer loans offered by the Savings Bank are home equity loans and
lines of credit, unsecured personal loans, and loans secured by deposit
accounts. The Savings Bank's subsidiary, PSA Consumer Discount Company, offers
secured and unsecured personal loans. See "SUBSIDIARIES." Consumer loans are
offered with maturities generally of less than ten years. The Savings Bank's
home equity loans and lines of credit are secured by the borrower's principal
residence with a maximum loan-to-value ratio, including the principal balances
of both the first and second mortgage loans, of 80% in the case of home equity
loans and 70% in the case of lines of credit. Such loans are offered on both a
fixed-rate and an adjustable-rate basis with terms of up to fifteen years.
The underwriting standards employed by the Savings Bank for consumer loans
include a determination of the applicant's credit history and an assessment of
ability to meet existing obligations and payments on the proposed loan. The
stability of the applicant's monthly income may be determined by verification
of gross monthly income from primary employment, and additionally from any
verifiable secondary income. Creditworthiness of the applicant is of primary
consideration; however, the underwriting process also includes a comparison of
the value of the collateral in relation to the proposed loan amount, and in the
case of home equity loans or lines of credit, the Savings Bank either obtains
title insurance or obtains a title search report, depending on the particular
loan.
Consumer loans entail greater credit risk than do residential first
mortgage loans, particularly in the case of consumer loan that are unsecured or
secured by assets that depreciate rapidly. In such cases, repossessed
collateral for a defaulted consumer loan may not provide an adequate source of
repayment for the outstanding loan and the remaining deficiency often does not
warrant further substantial collection efforts against the borrower. See "--
Delinquencies and Classified Assets -- Nonperforming Assets," "-- Loans Past
Due and Nonperforming Assets," and "-- Classification of Assets" for
information regarding the Savings Bank's loan loss experience and reserve
policy.
Mortgage Banking Operations
Through its subsidiary, TNMC, the Savings Bank has conducted a mortgage
banking operation since 1989. Mortgage banking consists primarily of the
origination, purchase, sale and servicing of first mortgage loans secured by
one-to-four family homes. Such loans are sold either as individual loans, as
mortgage-backed secur-ities, or as participation certificates issued or
guaranteed by FNMA or FHLMC. Loans may be sold either on a servicing retained
or servicing released basis.
49
<PAGE>
As of December 31, 1997, the Savings Bank's equity investment in TNMC
totaled ($60,000). For the year ended December 31, 1997, TNMC's loan
originations totaled $18.13 million and net loss totaled ($37,000). For the
year ended December 31, 1996, TNMC sold 81.79% of the loans originated in that
year and at December 31, 1997 TNMC had sold 89.10% of the loans originated in
that year.
The Savings Bank plans to expand into the Philadelphia metropolitan
market, including counties of New Jersey and Delaware, because management
believes this market is more accustomed to obtaining mortgages from mortgage
brokers as well as directly from banks and thrifts. The Savings Bank has
implemented a strategy in this area to expand TNMC's operations in order to
increase the origination of loans for sale in the secondary market and for its
own portfolio and the expansion of its servicing portfolio.
The Savings Bank expects that it will serve as the principal funding
source for TNMC pursuant to a credit arrangement between the parties. TNMC
originates loans in accordance with FNMA and FHLMC underwriting criteria or the
criteria of private investors.
In the past, TNMC has sold loans on a servicing released basis, but, as
origination volume increases, the Savings Bank is establishing loan servicing
capabilities and TNMC expects to sell servicing to the Savings Bank. Loan
servicing income provides a predictable source of fee income and servicing
values are generally countercyclical to the origination side of the mortgage
banking business. At December 31, 1997, the Savings Bank was servicing $ of
loans for others.
Because mortgage originations fluctuate significantly with economic
conditions, mortgage banking revenues are very cyclical. To the extent TNMC
revenues and profits become, as expected, a significant component of the
Savings Bank's consolidated revenues and net income, earnings of the Savings
Bank could fluctuate materially.
Loan Maturity and Re-pricing Schedule. The following table set forth the
maturity or period of re-pricing of the Savings Bank's loan portfolio at
December 31, 1997. Demand loans and loans having no stated schedule of
repayments and no stated maturity are reported as due in one year or less.
Adjustable and floating-rate loans are included in the period in which interest
rates are next scheduled to adjust rather than the period in which they
contractually mature, and fixed-rate loans are included in the period in which
the final contractual repayment is due.
<TABLE>
<CAPTION>
Amounts at December 31, 1997
------------------------------------------------------------------
Multi- Consumer
One to Family and and
Four Nonresidential Construc- Commercial Total
Family Real Estate tion Business Loans
---------- ---------------- ----------- ------------ ---------
(In thousands)
<S> <C> <C> <C> <C> <C>
Amounts due:
Non-accrual ....................... $ 1,497 $ 397 $ -- $ -- $ 1,894
Within one year ................... 2,071 1,230 2,597 2,514 8,412
------- ------- ------ ------ -------
After one year:
1 to 3 years ...................... 695 1,640 -- 282 2,617
3 to 5 years ...................... 2,147 6,184 -- 264 8,595
5 to 10 years ..................... 4,059 1,162 -- 49 5,270
Over 10 years ..................... 34,471 1,510 -- -- 35,981
------- ------- ------ ------ -------
Total due after one year ......... 41,372 10,496 -- 595 52,463
------- ------- ------ ------ -------
Total amounts due ................ $44,940 $12,123 $2,597 $3,109 $62,769
======= ======= ====== ====== =======
</TABLE>
50
<PAGE>
Loan Origination, Purchase and Sale Schedule. The following table shows
total loans originated, purchased, sold and repaid during the periods indicated
for the Savings Bank and its subsidiaries.
<TABLE>
<CAPTION>
For the year ended For the year ended
December 31, September 30,
------------------------- ----------------------------------------
1997 1996 1995 1994 1993
------------ ---------- ---------- ------------ ------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Loans receivable, net and loans held for
sale at beginning of period ................ $ 57,183 $ 54,790 $ 51,097 $ 52,816 $ 48,863
--------- -------- -------- --------- ---------
Originations:
One-to-four family residential real estate. 28,318 20,038 4,447 14,041 24,820
Other real estate ........................... 5,377 24 4,214 0 70
Consumer and commercial
business loans ............................. 3,248 1,033 961 398 292
--------- -------- -------- --------- ---------
Total loan originations ..................... 36,943 21,095 9,622 14,439 25,182
--------- -------- -------- --------- ---------
Loans purchased ............................. 0 0 0 0 0
--------- -------- -------- --------- ---------
Transfer to REO ............................. -- -- -- -- (463)
Principal repayments ........................ (9,648) (9,378) (2,451) (4,595) (16,454)
Sales of loans .............................. (16,152) (9,293) (5,996) (11,598) (4,319)
--------- -------- -------- --------- ---------
Increase (decrease) in loans in process ..... 133 (31) (19) 14 7
--------- -------- -------- --------- ---------
Increase (decrease) in allowance for loan
losses ..................................... 31 0 0 21 0
--------- -------- -------- --------- ---------
Net increase (decrease) in loans ............ 11,307 2,393 1,156 (1,719) 3,953
Loans receivable, net and loans held for
sale at end of period ...................... $ 68,490 $ 57,183 $ 52,253 $ 51,097 $ 52,816
========= ======== ======== ========= =========
</TABLE>
51
<PAGE>
Loans-to-One Borrower. Savings banks are subject to the same loans-to-one
borrower limits as those applicable to national banks, which under current
regulations restrict loans to one borrower to an amount equal to 15% of
unimpaired capital and unimpaired surplus on an unsecured basis, and an
additional amount equal to 10% of unimpaired capital and unimpaired surplus if
the loan is secured by readily marketable collateral (generally, financial
instruments and bullion, but not real estate). As of December 31, 1997, the
Savings Bank's largest loan to one borrower consisted of six loans to one
borrower. Of the six loans, three loans were commercial loans which had an
aggregate outstanding balance of $489,000, one loan was a consumer loan with an
outstanding balance of $26,000 and two loans were construction loans with an
aggregate outstanding balance of $1.56 million at December 31, 1997 and each of
these loans is performing according to its terms.
Delinquencies and Classified Assets
Collection Procedures. The Savings Bank's collection procedures provide
that when a mortgage loan is unpaid within its grace period (either ten or
fifteen days depending on the loan), a late notice will be sent to the borrower
requesting payment. If delinquency continues for approximately fifteen days,
then a second notice may be sent and contact efforts are attempted to
strengthen the collection process and obtain reasons for the delinquency. Plans
to arrange a repayment plan may be made. If a loan becomes two months
delinquent, the property is inspected in anticipation of foreclosure, a
collection letter is sent, personal contact may be attempted,
and the loan becomes subject to possible legal action if suitable arrangements
to repay have not been made. In addition, the borrower is given information
regarding consumer counseling services, to the extent required by regulations
of the PDOB, or the Pennsylvania Department of Housing and Urban Development.
When a loan continues in a delinquent status for 60 to 90 days and a repayment
schedule has not been made or kept by the borrower, generally a notice of
intent to foreclose is sent to the borrower, giving 30 days to cure the
delinquency. If the default is not cured, foreclosure proceedings are
initiated.
Nonperforming Assets. All loans, including residential mortgage loans, are
placed on nonaccrual status when past due 90 days or more unless the loan is in
the process of collection and the value of the collateral well exceeds the loan
balance. Prior to 1997, residential mortgage loans were not placed on
nonaccrual status unless the loan was delinquent for 12 months and the value of
the mortgaged property did not exceed the loan balance. Consumer and unsecured
loans are placed on nonaccrual upon becoming three months delinquent. Although
the Savings Bank viewed its nonaccrual policy as justified based on historical
experience, in 1997 it adopted a more conserative nonaccrual policy that it
believes is more consistent with peer bank practice. No adjustment is made for
interest accrued and unpaid at the time a loan is placed on nonaccrual status.
Interest is discontinued and income is subsequently recognized only to the
extent that cash payments are received, or until in management's judgment, the
borrower's ability to make periodic interest and principal payments is back to
normal, in which case the loan is returned to accrual status.
Real estate acquired by the Savings Bank as a result of foreclosure or by
deed in lieu of foreclosure is classified as REO until such time as it is sold.
When real estate is acquired through foreclosure, by deed in lieu of
foreclosure, it is recorded at its fair value, less estimated costs of
disposal. If the value of the property is less than the loan, less any related
specific loan loss provisions, the difference is charged against the allowance
for loan losses. Any subsequent write-down of REO is charged against earnings.
At December 31, 1997, the Savings Bank had approximately $457,000 of property
acquired as a result of foreclosure.
At December 31, 1997, the Savings Bank had nonperforming loans of $2.09
million, and a ratio of nonperforming loans to total loans of 3.34%. Of the
total nonperforming loans, $1.7 million are single-family residential mortgage
loans. At December 31, 1997, the Savings Bank had nonperforming assets of $2.55
million and a ratio of nonperforming assets to total assets of 1.97%. From 1994
to 1996 the Savings Bank's ratio of nonperforming loans to total loans exceeded
4%. This was due in large part to ineffective implementation of the Savings
Bank's stated collection practices by Savings Bank personnel and outside
counsel. New collection personnel were hired in 1997, resulting in the decline
in the ratios of nonperforming loans to total loans and nonperforming assets to
total assets.
52
<PAGE>
Loans Past Due and Nonperforming Assets. The following table sets forth
information regarding the Savings Bank's loans 90 days or more past due, loans
90 days or more past due and accruing interest, and real estate acquired or
deemed acquired by foreclosure at the dates indicated. For all the dates
indicated, the Savings Bank did not have any material restructured loans within
the meaning of SFAS No. 15.
<TABLE>
<CAPTION>
At December 31, At September 30,
------------------------- ---------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Loans past due 90 days or more as to interest or principal
and accruing interest ................................... $ 200 $ 2,009 $ 1,565 $ 1,417 $ 1,167
Nonaccrual loans(1) ...................................... 1,894 770 770 738 344
Total nonperforming loans ................................ 2,094 2,779 2,335 2,155 1,511
Real estate owned (REO) .................................. 457 465 482 330 486
------- ------- ------- ------- -------
Total nonperforming assets ............................... $ 2,551 $ 3,244 $ 2,817 $ 2,486 $ 1,997
======= ======= ======= ======= =======
Nonperforming loans to total loans ....................... 3.34% 5.21% 4.41% 4.20% 2.85%
Nonperforming assets to total assets ..................... 1.97 2.74 2.47 2.49 2.07
Allowance for loan losses to total loans ................. 0.38 0.39 0.39 0.41 0.35
Allowance for loan losses to
nonperforming loans ..................................... 11.37 7.45 8.91 9.65 12.38
Allowance for loan losses to
nonperforming assets .................................... 9.33 6.38 7.38 8.37 9.36
Net charge-offs as a percentage of total loans ........... 0.05 0.25 0.05 -- --
</TABLE>
(1) The Savings Bank classifies as nonaccrual all loans three months or more
delinquent. Prior to 1997, residential mortgage loans were classified as
nonaccrual when the loan was delinquent 12 months and the value of the
mortgaged property did not well exceed the loan balance.
For the years ended December 31, 1997 and 1996 and September 30, 1995,
gross interest income of approximately $353,000, $175,000, and $157,000,
respectively, would have been recorded on loans accounted for on a nonaccrual
basis if the loans had been current throughout the related periods. No interest
income on nonaccrual loans was included in income during such periods.
In May 1993, the FASB issued SFAS No. 114 "Accounting by Creditors for
Impairment of a Loan." SFAS No. 114 requires that certain impaired loans be
measured based on the present value of expected future cash flows discounted at
the loan's effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. In October 1994, the FASB issued SFAS No. 118 "Accounting
by Creditors for Impairment of a Loan--Income Recognition and Disclosure," that
amends SFAS No. 114 and eliminates its provision regarding how a creditor
should report income on an impaired loan. Originally, SFAS No. 114 would have
required creditors to apply one of two allowable methods. As a result of the
amendment, creditors may now continue to use existing methods for recognizing
income on impaired loans, including methods that are required by certain
industry regulators. SFAS No. 114 and SFAS No. 118 were adopted by Savings Bank
beginning January 1, 1996. At December 31, 1997, the Savings Bank's impaired
loans consisted of two commercial real estate loans with a total balance of
$321,052 for which specific allowances of $16,048 has been established. At
December 31, 1996, the Savings Bank's impaired loans consisted of smaller
balance residential mortgage loans.
Classification of Assets. The Savings Bank's policies, consistent with
regulatory guidelines, provide for the classification of loans and other assets
such as debt and equity securities, considered to be of lesser quality as
"substandard," "doubtful," or "loss" assets. An asset is considered
"substandard" if it is inadequately protected by the current net worth and
paying capacity of the obligor or by the collateral pledged, if any.
"Substandard" assets include those characterized by the "distinct possibility"
that the savings institution will sustain "some loss" if the deficiencies are
not corrected. Assets classified as "doubtful" have all of the weaknesses
inherent in those classified "substandard" with the added characteristic that
the weaknesses present make "collection or liquidation in full," on the basis
of currently existing facts, conditions, and values, "highly questionable and
improbable." Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted. Assets that do not
53
<PAGE>
expose the savings institution to risk sufficient to warrant classification in
one of the aforementioned categories, but which possess some weaknesses, are
required to be designated "special mention" by management. At December 31,
1997, the Savings Bank had $1.4 million of substandard loans and $989,000 of
"special mention" loans.
When a savings bank classifies problem assets as either substandard or
doubtful, it is required to establish general valuation allowances or "loss
reserves" in an amount deemed prudent by management. General allowances
represent loss allowances that have been established to recognize the inherent
risk associated with lending activities, but which, unlike specific allowances,
have not been allocated to particular problem assets. When a savings bank
classifies problem assets as "loss," it is required either to establish a
specific allowance for losses equal to 100% of the amount of the assets so
classified, or to charge off such amount. A savings bank's determination as to
the classification of its assets and the amount of its valuation allowance is
subject to review by its regulatory agencies, which can order the establishment
of additional general or specific loss allowances. The Savings Bank regularly
reviews its asset portfolio to determine whether any assets require
classification in accordance with applicable regulations.
At December 31, 1997, the Savings Bank had no foreign loans and no loan
concentrations exceeding 10% of total loans in the table "Analysis of Loan
Portfolio." Loan concentrations are considered to exist when there are amounts
loaned to a multiple number of borrowers engaged in similar activities that
would cause them to be similarly impacted by economic or other conditions.
Potential problem loans consist of loans that are included in performing
loans, but for which potential credit problems of the borrowers have caused
management to have serious doubts as to the ability of such borrowers to
continue to comply with present repayment terms. At December 31, 1997, loans
past due between 30 and 89 days that are not included in the preceding table
totalled $232,000.
Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the
known and inherent risks in its loan portfolio and current economic conditions.
Accordingly, the Savings Bank consistently applies a methodology to determine
both the adequacy of the allowance for loan losses and the necessary provision
for loan losses to be charged against earnings. This methodology includes:
-- a detailed review of all classified assets to determine if any specific
reserve allocations (which includes impaired loans) are required on an
individual loan basis.
-- the application of reserve allocations to all criticized and classified
assets, based upon allocation percentages, with an "olem" (other loans
especially mentioned), substandard or doubtful rating.
-- the application of reserve allocations to installment and mortgage loans
based upon historical charge-off experience for those loan types. the
application of reserve allocations to all performing loans based upon
historical actual losses incurred from all loan review categories.
The Savings Bank provided $60,000, $132,000 and $27,000 to its allowance
for loan losses for the years ended December 31, 1997 and 1996 and September
30, 1995, respectively. At December 31, 1997, the total allowance for loan
losses was $238,000, which amounted to 9.33% of nonperforming assets. The
Savings Bank will continue to monitor and modify the level of its allowance for
loan losses in order to maintain it at a level that management considers
adequate to provide for potential loan losses. As the Savings Bank continues to
diversify its loan portfolio into commercial, commercial real estate and
construction lending, the Savings Bank expects to increase its provisions for
loan losses in future periods in order to increase the allowance for loan
losses. For the years ended December 31, 1997 and 1996 and September 30, 1995,
respectively, the Savings Bank had $29,000, $133,000 and $27,000 in charge-offs
against this allowance.
54
<PAGE>
Analysis of the Allowance For Loan Losses. The following table sets forth
the analysis of the allowance for loan losses for the periods indicated.
<TABLE>
<CAPTION>
Years Ended Years Ended
December 31, September 30,
----------------------- ------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Allowance, beginning of period ................ $ 207 $ 208 $ 208 $ 187 $ 187
Total charge-offs ............................. 29 133 27 -- --
------- ------- ------- ------- -------
Total recoveries .............................. -- -- -- --
------- ------- ------- -------
Net charge-offs (recoveries) .................. 29 133 27 -- --
Provision charged to operations ............... 60 132 27 21 --
------- ------- ------- ------- -------
Allowance, end of period ...................... $ 238 $ 207 $ 208 $ 208 $ 187
======= ======= ======= ======= =======
Charge-offs (recoveries) to average loans ..... 0.05% 0.25% 0.05% 0.00% 0.00%
Allowance for loan losses as a percentage of
period-end loans ............................. 0.38% 0.39% 0.39% 0.41% 0.35%
</TABLE>
Allocation of Allowance for Loan Losses. The following table sets forth
the allocation of allowance for loan losses by loan category for the periods
indicated.
<TABLE>
<CAPTION>
At December 31,
-----------------------------------------------
1997 1996
---------------------- ----------------------
Amount Percent Amount Percent
-------- ----------- -------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Residential including multifamily real estate $166 72.71% $150 85.70%
Commercial real estate and
commercial business ........................ 67 25.38 44 12.39
Consumer .................................... 5 1.91 13 1.91
Unallocated ................................. -- --
---- ------
Total .................................... $238 100.00% $207 100.00%
==== ====== ==== ======
</TABLE>
<TABLE>
<CAPTION>
At September 30,
------------------------------------------------------------------------
1995 1994 1993
---------------------- ---------------------- ----------------------
Amount Percent Amount Percent Amount Percent
-------- ----------- -------- ----------- -------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Residential including multifamily real estate $150 83.91% $149 85.07% $ 97 86.79%
Commercial real estate and
commercial business ........................ 39 14.21 46 13.57 56 11.81
Consumer .................................... 16 1.88 3 1.36 5 1.40
Unallocated ................................. 3 -- 9 -- 29 --
---- ------ ---- ------ ---- ------
Total .................................... $208 100.00% $207 100.00% $187 100.00%
==== ====== ==== ====== ==== ======
</TABLE>
- ------------
(1) Represents percentage in each category to total loans.
<PAGE>
Investment Activities
The Savings Bank's investment portfolio is comprised of mortgage-backed
securities, investment securities, and cash and cash equivalents. The carrying
value of the Savings Bank's investment securities and mortgage-backed
securities portfolio totalled $27.62 million at December 31, 1997 compared to
$24.92 million at December 31, 1996. The Savings Bank's cash and cash
equivalents, consisting of cash and due from banks, and interest-earning
deposits with other financial institutions, totalled $27.89 million at December
31, 1997 compared to $31.62 million at December 31, 1996, a decrease of $3.73
million or 11.80%. The majority of the Savings Bank's mortgage-backed
securities are issued or guaranteed by the United States Government or agencies
thereof. At December 31, 1997, mortgage-backed securities totalled $5.00
million. The majority of this amount represents securities that were issued or
guaranteed by either FNMA, FHLMC or the Government National Mortgage
Association ("GNMA"). The Savings Bank historically maintains high levels of
interest-earning deposits as part of its strategy for meeting liquidity
requirements and improving interest sensitivity.
55
<PAGE>
The Savings Bank is required under federal regulations to maintain a
minimum amount of liquid assets that may be invested in specified short term
securities and certain other investments. See "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Liquidity and
Capital Resources." The Savings Bank generally has maintained a portfolio of
liquid assets that exceeds regulatory requirements. Liquidity levels may be
increased or decreased depending upon the yields on investment alternatives and
upon management's judgment as to the attractiveness of the yields then
available in relation to other opportunities and its expectation of the level
of yield that will be available in the future, as well as management's
projections as to the short-term demand for funds to be used in the Savings
Bank's loan origination and other activities.
Pursuant to SFAS No. 115, which the Savings Bank adopted in 1994, the
Savings Bank classifies its investment securities and mortgage-backed
securities as either held-to-maturity, available for sale or trading. Available
for sale and trading securities are carried at market value, while
held-to-maturity securities are carried at amortized cost. At December 31,
1997, $10.29 million of the Savings Bank's investment securities and mortgaged-
backed securities were classified held-to-maturity and $17.33 million of the
Savings Bank's investment securities and mortgage-backed securities were
classified available for sale. The Savings Bank did not carry any trading
securities at December 31, 1997.
The Savings Bank's Board of Trustees has also adopted an investment policy
which identifies acceptable types of investments for the Savings Bank and
establishes criteria to guide management in classifying investments as
prescribed by SFAS No. 115. The policy also authorizes the Savings Bank's
investment officer to make single investments of up to $1 million. Under the
investment policy the Savings Bank may invest in certain AAA rated derivative
securities. As of December 31, 1997, the Savings Bank had no collateralized
mortgage obligations. The Savings Bank may not invest in high-risk
collateralized mortgage obligations ("CMOs") and the Savings Bank's investment
officer must periodically analyze the risk of any CMO held by the Savings Bank
to determine that such securities are not within the high-risk category.
Carrying and Market Value of Investment and Mortgage-Backed
Securities. The following table sets forth certain information regarding the
carrying and market values of the Savings Bank's investment securities and
mortgage-backed securities in the Savings Bank's held-to-maturity portfolio for
the periods indicated.
<TABLE>
<CAPTION>
Held to Maturity
At December 31,
--------------------------------------------
1997
--------------------------------------------
Gross Gross
Amor- Unreal- Unreal-
tized ized ized Fair
Cost Gains Losses Value
--------- --------- -------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Debt:
FHLB ............................................. $ 7,219 $ 8 $-- $ 7,227
FNMA ............................................. 1,000 8 -- 1,008
FHLMC ............................................ -- -- -- --
------- ---- --- -------
Total debt securities held to maturity ......... 8,219 16 -- 8,235
Mortgage-backed securities:
GNMA ............................................. 1,980 105 -- 2,085
CMO .............................................. -- -- -- --
FHLMC ............................................ 88 9 97
------- ---- -------
Total mortgage-backed securities held to
maturity .................................... 2,068 114 -- 2,182
------- ---- --- -------
Total securities held to maturity ............. $10,287 $130 $-- $10,417
======= ==== === =======
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Held to Maturity
At December 31,
----------------------------------------------
1996
----------------------------------------------
Gross Gross
Unreal- Unreal-
Amortized ized ized Fair
Cost Gains Losses Value
----------- --------- -------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Debt:
FHLB Notes ........................................... $ 8,000 $ -- $32 $ 7,968
FNMA ................................................. 3,000 3 -- 3,003
FHLMC ................................................ 1,000 -- -- 1,000
Federal Farm Credit .................................. 657 -- -- 657
------- ---- --- -------
Total debt securities held to maturity ............... 12,657 3 32 12,628
Mortgage-backed securities:
GNMA ................................................. 2,355 90 -- 2,445
CMO .................................................. 227 -- 2 225
FHLMC ................................................ 166 16 -- 182
------- ---- --- -------
Total mortgage-backed securities held to maturity..... 2,748 106 2 2,852
------- ---- --- -------
Total securities held to maturity. ................... $15,405 $109 $34 $15,480
======= ==== === =======
</TABLE>
The following table presents the estimated fair value of investment
securities and mortgage-backed securities available for sale and the net
unrealized gain or loss at the periods indicated:
<TABLE>
<CAPTION>
Available for Sale at
December 31,
-----------------------------------------------------
1997
-----------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ------------ ------------ ---------
(In thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Equity:
Investment in mutual funds ................... .... $ 2,354 $12 $ -- $ 2,366
------- --- ---- -------
Debt:
FHLB Notes ....................................... 7,995 23 -- 8,018
Federal Farm Credit .............................. 2,000 12 2,012
FNMA ............................................. 998 13 1,011
SLMA ............................................. 1,000 -- 6 994
------- --- ---- -------
Total debt securities available for sale ......... 11,993 48 6 12,035
Mortgage-backed Securities
FNMA ............................................. 2,227 -- 65 2,162
FHLMC ............................................ 778 -- 6 772
------- --- ---- -------
Total mortgage-backed securities available for
sale ............................................ 3,005 -- 71 2,934
------- --- ---- -------
Total available-for-sale securities .............. $17,352 $60 $ 77 $17,335
======= === ==== =======
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
Available for Sale
December 31, 1996
-----------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ------------ ------------ ---------
(In thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Equity:
Investment in mutual funds ................... ...... $2,305 $ 47 $ -- $2,352
------ ---- ---- ------
Debt:
FNMA Notes ......................................... 3,000 -- 15 2,985
SLMA ............................................... 1,000 -- 21 979
------ ---- ---- ------
Total debt securities available for sale ... ...... 4,000 -- 36 3,964
------ ---- ---- ------
Mortgage-backed Securities:
FNMA ............................................... 2,530 -- 110 2,420
FHLMC .............................................. 792 -- 18 774
------ ---- ---- ------
Total mortgage-backed securities available for
sale .............................................. 3,322 -- 128 3,194
------ ---- ---- ------
Total available-for-sale securities ................ $9,627 $ 47 $164 $9,510
====== ==== ==== ======
</TABLE>
Investment Portfolio Maturities. The following table sets forth the
scheduled maturities, carrying values, and weighted average yields for the
Savings Bank's investment securities and mortgage-backed securities portfolios
classified as being held to maturity and available for sale at December 31,
1997. Adjustable-rate, mortgage-backed securities are included in the period in
which interest rates are next scheduled to adjust.
<TABLE>
<CAPTION>
At December 31, 1997
--------------------------------------------
In one year After one year
or less to five years
--------------------- ---------------------
(Dollars in thousands)
Carrying Average Carrying Average
Value Yield Value Yield
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Held to maturity:
Investment securities ......... $ 8,219 7.13% $ -- --
Mortgage-backed
securities ................... -- -- --
------- ------ --
Total held to maturity ....... $ 8,219 7.13% $ -- --
======= ===== ====== ==
Available for sale:
Investment securities ......... $ 9,995 6.94% $1,998 7.22%
Mortgage-backed
securities ................... 778 5.00% 2,227 5.50%
------- ----- ------ -----
Total available for sale ..... $10,773 11.94% $4,225 12.72%
======= ===== ====== =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
At December 31, 1997
--------------------------------------------------------------------
After five years
to ten years Over ten years
--------------------- ----------------------
(Dollars in thousands)
No stated
Carrying Average Carrying Average Maturity
Value Yield Value Yield or Rate Total
---------- --------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Held to maturity:
Investment securities ......... $ -- -- $ -- -- $ -- $ 8,219
Mortgage-backed
securities ................... -- -- 2,068 8.35% -- 2,068
---- -- ------ ---- ------ -------
Total held to maturity ....... $ -- -- $2,068 8.35% $ -- $10,287
==== == ====== ==== ====== =======
Available for sale:
Investment securities ......... $ -- -- $ -- -- $2,354 $14,347
Mortgage-backed
securities ................... -- -- -- -- -- 3,005
---- -- ------ ---- ------ -------
Total available for sale ..... $ -- -- -- $ -- $2,354 $17,352
==== == ====== ======== ====== =======
</TABLE>
Sources of Funds
General. Deposits are the major source of the Savings Bank's funds for
lending and other investment purposes. In addition to deposits, the Savings
Bank derives funds from the amortization and prepayment of loans and
mortgage-backed securities, the maturity of investment securities, operations
and, if needed, advances from the FHLB. Scheduled loan principal repayments are
a relatively stable source of funds, while deposit inflows and outflows and
loan prepayments are influenced significantly by general interest rates and
market conditions. Borrowings may be used on a short-term basis to compensate
for reductions in the availability of funds from other sources or on a longer
term basis for general business purposes.
Deposits. Consumer and commercial deposits are attracted principally from
within the Savings Bank's market area through the offering of a broad selection
of deposit instruments including checking accounts, passbook savings accounts,
statement savings accounts, money market deposit accounts, term certificate
accounts and
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<PAGE>
individual retirement accounts. Deposit account terms vary according to the
minimum balance required, the period of time during which the funds must remain
on deposit, and the interest rate, among other factors. The Savings Bank
regularly evaluates its internal cost of funds, surveys rates offered by
competing institutions, reviews the Savings Bank's cash flow requirements for
lending and liquidity, and executes rate changes when deemed appropriate. The
Savings Bank does not obtain deposits through brokers, nor does it solicit
funds outside its market area.
The Savings Bank's deposit pricing strategy seeks to retain passbook
savings deposit accounts as an important funding source. Management's
experience is that its customer base finds the traditional passbook savings
account attractive even though higher yields may be available from alternative
deposit products. Accordingly, the Savings Bank typically prices its passbook
product above its large commercial bank competitors whose pricing strategy is
designed for a larger and more diverse market.
The following table sets forth the savings account activities for the
Savings Bank for the periods indicated.
<TABLE>
<CAPTION>
Year Ended December
31, Year Ended September 30,
-------------------- -------------------------------
1997 1996 1995 1994 1993
--------- -------- --------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C>
Increase before interest
credited .................... $4,249 $ 527 $3,187 $ 587 $ 794
Interest credited ............ 3,911 3,571 3,437 3,038 3,152
------ ------ ------ ------ ------
Net deposit increase ......... $8,160 $4,098 $6,624 $3,625 $3,946
====== ====== ====== ====== ======
</TABLE>
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<PAGE>
The following tables set forth the composition of savings deposits in the
various types of savings accounts offered by the Savings Bank between the dates
indicated.
<TABLE>
<CAPTION>
At December 31,
------------------------------------
1997
------------------------------------
Weighted
Average
% of Nominal
Balance Deposits Rate
----------- ---------- ---------
<S> <C> <C> <C>
Savings deposit accounts ................. $ 29,694 27.31% 2.50%
NOW accounts ............................. 8,535 7.85 0.90
Money market accounts .................... 7,201 6.62 3.57
Retail certificates of deposit ........... 57,536 52.91 5.57
Jumbo certificates of deposit(1) ......... 5,768 5.31 5.81%
-------- ------
Total deposits .......................... $108,734 100.00%
======== ======
</TABLE>
<TABLE>
<CAPTION>
At December 31, At September 30,
------------------------------------- ----------------------------------
1996 1995
------------------------------------- ----------------------------------
Weighted Weighted
Average Average
% of Nominal % of Nominal
Balance Deposits Rate Balance Deposits Rate
----------- ---------- ---------- --------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Savings deposit accounts ................. $ 28,992 28.83% 2.49% $33,263 34.63% 3.00%
NOW accounts ............................. 9,105 9.05 1.09 3,845 4.00 1.04
Money market accounts .................... 6,266 6.23 3.63 4,884 5.08 3.61
Retail certificates of deposit ........... 50,175 49.89 5.41 49,243 51.27 5.55
Jumbo certificates of deposit(1) ......... 6,036 6.00 5.72% 4,818 5.02 5.62%
-------- ------ ------- ------
Total deposits .......................... $100,574 100.00% $96,053 100.00%
======== ====== ======= ======
</TABLE>
- ------------
(1) Includes only certificates of deposit of $100,000 or more bearing
negotiated rates.
Time Deposit Maturities. The following table sets forth the amount and
maturities of time deposits at December 31, 1997.
<TABLE>
<CAPTION>
Period to Maturity from
-------------------------------------------------------
December 31, 1997
-------------------------------------------------------
Within One One to
Year Three Years Thereafter Total
------------ ------------- ------------ ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Less than 4.00% .......... $ 327 $ 27 $ 254 $ 608
4.001% - 6.000% .......... 42,248 14,044 1,433 57,725
6.001% - 8.000% .......... 2,569 1,655 681 4,905
8.001% - 10.000% ......... 24 42 -- 66
over 10.000% ............. -- -- -- --
------- ------- ------ -------
Total ................... $45,168 $15,768 $2,368 $63,304
======= ======= ====== =======
</TABLE>
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<PAGE>
Large Certificates of Deposit Maturities. The following table indicates
the amount of the Savings Bank's certificates of deposit of $100,000 or more by
time remaining until maturity at December 31, 1997.
Certificates
Maturity Period of Deposit
- ---------------------------------------------------- ---------------
(In thousands)
One year or less ............................ $ 8,904
Over one year though two years .............. 1,284
Over two years through three years .......... 100
Over three years through five years ......... 503
Over five years through ten years ........... --
Over ten years .............................. --
-------
$10,791
=======
Borrowings
Savings deposits are the primary source of funds for the Savings Bank's
lending and investment activities and for its general business purposes. If the
need arises, the Savings Bank may rely upon advances from the FHLB to
supplement its supply of lendable funds and to meet deposit withdrawal
requirements. At December 31, 1997, the Savings Bank had no FHLB advances
outstanding.
Market Area and Competition
The Savings Bank's market area includes the Philadelphia and metropolitan
area and all counties contiguous thereto as well as counties of New Jersey and
Delaware. This area has a large concentration of financial institutions, many
of which are significantly larger and have greater financial resources than the
Savings Bank, and all of which are competitors of the Savings Bank to varying
degrees. As a result, the Savings Bank encounters strong competition both in
attracting deposits and in originating real estate and other loans. Its most
direct competition for deposits has come historically from commercial banks,
brokerage houses, other savings associations and credit unions in its market
area, and the Savings Bank expects continued strong competition from such
financial institutions in the foreseeable future. The Savings Bank's market
area includes branches of several commercial banks that are substantially
larger than the Savings Bank. The Savings Bank competes for savings deposits by
offering depositors a high level of personal service.
The competition for real estate and other loans comes principally from
commercial banks, mortgage banking companies and other savings institutions.
This competition for loans has increased substantially in recent years as a
result of the large number of institutions competing in the Savings Bank's
market area, as well as the increased efforts by commercial banks to expand
mortgage loan originations.
The Savings Bank competes for loans primarily through the interest rates
and loan fees it charges and the efficiency and quality of services it provides
borrowers, real estate brokers and builders. Factors that affect competition
include general and local economic conditions, interest rate levels and
volatility of the mortgage markets.
Subsidiaries
The Savings Bank owns three direct subsidiaries and one indirect
subsidiary. See "Business of the Savings Bank -- Mortgage Banking Activities."
TNMC is engaged in a mortgage banking business. See "Business of the Savings
Bank -- Mortgage Banking Operations" and "RISK FACTORS -- Interest Rate Risk."
PSA Service Corp. conducts real estate appraisals, processes credit
applications and provides other services in connection with the origination of
loans. PSA Financial Corp. primarily originates business loans and commercial
real estate loans. Its subsidiary, PSA Consumer Discount Company, primarily
originates consumer loans.
Personnel
As of December 31, 1997, the Savings Bank had 47 full-time and no
part-time employees. None of the Savings Bank's employees are represented by a
collective bargaining group. The Savings Bank believes its relationship with
its employees to be good.
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Legal Proceedings
Periodically, there have been various claims and lawsuits involving the
Savings Bank, such as claims to enforce liens, condemnation proceedings on
properties in which the Savings Bank holds security interests, claims involving
the making and servicing of real property loans and other issues incident to
the Savings Bank's business. The Savings Bank is not a party to any pending
legal proceedings that it believes would have a material adverse effect on the
financial condition or operations of the Savings Bank.
Properties
As of December 31, 1997, the Savings Bank conducted operations through an
executive/administrative office, six full-service offices and a branch
administrative office. The Savings Bank owns five of the six full-service
offices and the branch administrative office. The Savings Bank is leasing its
Center City Philadelphia full-service office and executive office for a term of
eleven years.
Environmental Matters
Environmental hazards have become a source of substantial risk and
potential liability in the loan portfolios of financial institutions. If a
property securing one or more of an institutions loans is environmentally
contaminated, the institution may be adversely affected in several different
ways. The value of the collateral could be impaired, environmental clean-up
costs may impair the borrower's repayment ability, liens held by the
institution against the contaminated property may be subordinated to state
and/or federal liens securing clean-up costs, and the institution against the
contaminated property may be subordinated to state and/or federal liens
securing clean-up costs if it has foreclosed on the property or if it is deemed
to have become involved in management of the borrower. To minimize these risks,
the Savings Bank may require an environmental examination of the property of
any borrower or prospective borrower if consideration of the potential loss to
the Savings Bank in relation to the burdens to the borrower. The costs of such
examinations and reports are generally the responsibility of the borrower.
These costs may be substantial and may deter a prospective borrower from
entering into a loan transaction with the Savings Bank. The Savings Bank is not
aware of any borrower who is currently subject to any environmental
investigation or clean-up proceeding which is likely to have a material adverse
impact on the financial condition or results of operations of the Savings Bank.
REGULATION
General
The Savings Bank is a Pennsylvania-chartered stock savings bank and its
deposit accounts are insured up to applicable limits by the FDIC under the SAIF
(to the extent such deposits were assumed from the Savings Bank's mutual
savings bank predecessor) or the BIF (in the case of other insured deposits).
The Savings Bank is subject to extensive regulation by the PDOB, as its
chartering agency, and by the FDIC, as its primary federal regulator and
deposit insurer. The Savings Bank must file reports with the PDOB and the FDIC
concerning its activities and financial condition in addition to obtaining
regulatory approvals prior to engaging in certain activities and transactions
including, but not limited to, mergers and acquisitions. The PDOB and the FDIC
periodically examine the Savings Bank to assess its compliance with various
regulatory requirements. State and federal regulation and supervision create a
framework within which the Savings Bank must operate and are intended primarily
for the protection of the FDIC insurance funds and depositors rather than
shareholders.
The MHC, as a mutual holding company, is also required to file certain
reports with the FRB and to comply with other rules and regulations of the FRB.
Regulatory authorities possess extensive discretion in connection with their
supervisory and enforcement activities and in connection with their examination
policies, including policies regarding the classification of assets and the
adequacy of loan loss reserves. Any change in regulatory policy by the PDOB,
the FRB, or the FDIC could have a material adverse impact on the MHC, the
Savings Bank and their operations. Certain of the regulatory requirements
applicable to the Savings Bank and to the MHC are referred to below or
elsewhere herein.
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<PAGE>
Regulation of the Holding Company
General. The MHC is, and the Holding Company will be, a bank holding
company subject to supervision and regulation by the Federal Reserve under the
Bank Holding Company Act of 1956, as amended. As a bank holding company, the
Holding Company's activities and those of its subsidiary are limited to the
business of banking and activities closely related or incidental to banking,
and the Holding Company may not directly or indirectly acquire the ownership or
control or more than 5% of any class of voting shares or substantially all of
the assets of any company, including a bank, without the prior approval of the
Federal Reserve.
The Savings Bank is subject to supervision and examination by applicable
federal and state banking agencies. The Savings Bank is a member of the Federal
Reserve System, and therefore, subject to the regulations of the Federal
Reserve. The Savings Bank is also a Pennsylvania-chartered bank subject to
supervision and regulation by the PDOB.
In addition, because the deposits of the Savings Bank are insured by the
FDIC, the Savings Bank is subject to regulation by the FDIC. The Savings Bank
is also subject to requirements and restrictions under federal and state law,
including requirements to maintain reserves against deposits, restrictions on
the types and amounts of loans that may be granted and the interest that may be
charged thereon and imitations on the types of investments that may be made and
the types of services that may be offered. Various consumer laws and
regulations also affect the operations of the Savings Bank. In addition to the
impact of regulation, commercial banks are affected significantly by the
actions of the Federal Reserve in attempting to control the money supply and
credit availability in order to influence the economy.
Holding Company Structure. The Savings Bank is subject to restrictions
under federal law which limit its ability to transfer funds to the Holding
Company, whether in the form of loans, other extensions of credit, investments
or asset purchases. Such transfers by the Savings Bank to the Holding Company
are generally limited in amount to 10% of the Savings Bank's capital and
surplus. Furthermore, such loans and extensions of credit are required to be
secured in specific amounts, and all transactions are required to be on an
arm's length basis. The Savings Bank has never made any loan or extension of
credit to the Holding Company nor has it purchased any assets from the Holding
Company.
Under Federal Reserve policy, a bank holding company is expected to act as
a source of financial strength to the Savings Bank and to commit resources to
support the Savings Bank, i.e., to downstream funds to the Savings Bank. This
support may be required at times when, absent such policy, the bank holding
company might not otherwise provide such support. Any capital loans by a bank
holding company to the Savings Bank are subordinate in right of payment to
deposits and to certain other indebtedness of the Savings Bank. In the event of
a bank holding company's bankruptcy, any commitment by the bank holding company
to a federal bank regulatory agency to maintain the capital of the Savings Bank
will be assumed by the bankruptcy trustee and entitled to a priority of
payment.
Regulation of the Savings Bank
Pennsylvania Savings Bank Law. The Savings Bank is incorporated under the
Pennsylvania Banking Code of 1965, as amended (the "Banking Code"). The Banking
Code contains detailed provisions governing the Bank's organization, the
location of its offices, the rights and responsibilities of its trustees,
officers, employees, depositors and shareholders, and its savings, investment
and other operations. The Banking Code delegates extensive rulemaking power and
administrative discretion to the PDOB.
The PDOB generally examines each savings bank not less frequently than
once every two years. Although the PDOB may accept the examinations and reports
of the FDIC in lieu of the PDOB's examination, the current practice is for the
PDOB to conduct individual examinations. The PDOB may order any savings bank to
discontinue any violation of law or unsafe or unsound business practice and may
direct any trustee, officer, employee or attorney of a savings bank engaged in
an objectionable activity, after the PDOB has ordered the activity to be
terminated, to show cause at a hearing before the PDOB why such person should
not be removed.
Interstate Acquisitions. The Commonwealth of Pennsylvania has enacted
legislation regarding the acquisition of commercial banks, bank holding
companies, savings banks and savings and loan associations located
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<PAGE>
in Pennsylvania by institutions located outside of Pennsylvania. The statute
dealing with savings institutions authorizes (i) a savings bank, savings and
loan association or holding company thereof located in another state (a
"foreign institution") to acquire the voting stock of, merge or consolidate
with, or purchase assets and assume liabilities of, a Pennsylvania-chartered
savings bank and (ii) the establishment of branches in Pennsylvania by foreign
institutions, in each case subject to certain conditions including (A)
reciprocal legislation in the state in which the foreign institution seeking
entry into Pennsylvania is located permitting comparable entry by Pennsylvania
savings institutions and (B) approval by the PDOB. Pennsylvania law also
provides for nationwide branching by Pennsylvania-chartered savings banks and
savings and loan associations, subject to the PDOB's approval and certain other
conditions.
On September 29, 1994, the United States Congress enacted the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate
Banking Law"), which amended various federal banking laws to provide for
nationwide interstate banking, interstate bank mergers and interstate
branching. The Interstate Banking Law currently allows the acquisition by a
bank holding company of a bank located in another state, interstate bank
mergers and branch purchase and assumption transactions. Only a few states have
"opted-out" of the merger and purchase and assumption provisions by enacting
laws that specifically prohibit such interstate transactions.
Pursuant to the Interstate Banking Law, states may also enact legislation
to allow for de novo interstate branching by out of state banks.
Capital Maintenance. FDIC regulations require FDIC-insured state-chartered
savings banks, such as the Savings Bank, to maintain minimum levels of capital.
The regulations establish a minimum leverage capital requirement of not less
than 3% Tier 1 capital to total assets for institutions in the strongest
financial and managerial condition, with a CAMEL rating of "1" (the highest
rating of the FDIC for banks). For all other banks, the minimum leverage ratio
is at least 4% to 5%. Tier I capital consists principally of common
shareholders' equity (including retained earnings), noncumulative perpetual
preferred stock and related surplus, and minority interests in consolidated
subsidiaries, minus all intangible assets other than certain supervisory
goodwill, purchased mortgage servicing rights and purchased credit card
relationships.
The FDIC also requires that savings banks meet a risk-based capital
standard. The risk-based capital standard for savings banks requires the
maintenance of total capital (which is defined as Tier 1 capital plus
supplementary (Tier 2) capital) to risk- weighted assets of 8%. In determining
the amount of risk- weighted assets, all assets, plus certain off balance sheet
assets, are multiplied by a risk weight of 0% to 100%, based on the risks the
FDIC believes are inherent in the type of asset or item.
Tier 2 capital includes certain perpetual preferred stock, hybrid capital
instruments, including certain mandatory convertible securities, certain
subordinated debt and intermediate preferred stock and a limited amount of the
general allowance for loan and lease losses. The amount of the allowance for
loan and lease losses includable in Tier 2 capital is limited to a maximum of
1.25% of risk-weighted assets and 100% of Tier 1 capital. Overall, the amount
of capital counted toward Tier 2 capital cannot exceed 100% of Tier 1 capital.
At December 31, 1997, the Savings Bank met its capital requirements.
FDICIA requires the Federal banking agencies to revise their risk-based
capital guidelines to, among other things, take adequate account of interest
rate risk, concentration of credit risk, and risks of nontraditional
activities. The agencies have adopted a specific rule applicable to
institutions whose investment portfolio trading activity exceeds 10% of total
assets or $1 billion. The Savings Bank is not subject to this rule. The
agencies have stated that they will also consider the effects of market and
credit risk and nontraditional activities on a case-by-case basis, and could
impose higher capital requirements on any institution.
Virtually identical capital requirements are imposed on the Holding
Company and enforced by the FRB. The Savings Bank is also subject to PDOB
capital guidelines. Although not adopted in regulation form, the PDOB utilizes
capital standards requiring a minimum of 6% leverage capital and 10% risk-based
capital. The components of leverage and risk-based capital are substantially
the same as those defined by the FDIC.
Insurance of Deposit Accounts. The FDIC has implemented a risk-related
premium schedule for all insured depository institutions that results in the
assessment of premiums based on capital and supervisory measures. Under the
risk-related premium schedule, the FDIC assigns, on a semiannual basis, each
institution to one
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<PAGE>
of three capital groups (well-capitalized, adequately capitalized or
undercapitalized) and further assigns such institution to one of three
subgroups within a capital group. The institution's subgroup assignment is
based upon the FDIC's judgment of the institution's strength in light of
supervisory evaluations, including examination reports, statistical analyses
and other information relevant to measuring the risk posed by the institution.
Only institutions with a total capital to risk-adjusted assets ratio of 10.00%
or greater, a Tier 1 capital to risk-based assets ratio of 6% or greater, and a
Tier 1 leverage ratio of 5.0% or greater, are assigned to the well-capitalized
group. As of December 31, 1996, the Savings Bank was well capitalized for
purposes of calculating insurance assessments.
On September 30, 1996, the President signed into law the Omnibus
Appropriations' Act that included legislation to capitalize the Savings
Association Insurance Fund with a one-time special assessment. The special
assessment was paid on the amount of SAIF-assessable deposits held by the
institution as of March 31, 1995 and the amount of any SAIF assessable deposits
acquired by the institution after that date. The Savings Bank recognized an
expense of $567,000 in the third quarter of 1996. Since the SAIF was deemed
recapitalized as of October 1, 1996, the FDIC also set a new premium range for
the fourth quarter of 1996. Consequently, the Savings Bank received a refund of
$58,000 for the fourth quarter of 1996. The FDIC approved a final rule
establishing a new range of premiums for SAIF and BIF insured deposits
effective January 1, 1997. The FDIC calculated deposit insurance assessments at
the rate of $0.00 for every $100 of deposits for banks in the lowest risk-based
premium category and $0.27 for every $100 of insured deposits for banks in the
highest risk-based category. The Savings Bank is presently in the lowest
premium category.
While the Savings Bank presently pays no premium for deposit insurance, it
is subject to assessments to pay the interest on Financing Corporation ("FICO")
bonds. FICO was created by Congress in 1989 to issue bonds to finance the
resolution of failed thrift institutions. Prior to 1997, only thrift
institutions were subject to assessments to raise funds to pay the FICO bonds.
The Omnibus Budget Act also provided that the BIF deposits would be subject to
1/5 of the assessment to which SAIF deposits are subject for FICO bond payments
through 1999. Beginning in 2000, BIF and SAIF deposits will be subject to the
same assessment for FICO bonds. The FICO assessment for the Savings Bank for
1997 is $.013 for each $100 of BIF deposits and $.0648 for each $100 of SAIF
deposits.
The Savings Bank was chartered as a BIF-insured institution; however, it
will continue to pay premiums to the SAIF at SAIF rates with respect to the
deposits that it assumed in the MHC Reorganization. Therefore, substantially
all of the Savings Bank's deposits are assessed at SAIF rates.
Restrictions on Dividends. Dividend payments by the Savings Bank are
subject to the Banking Code. Under the Banking Code, no dividends may be paid
except from "accumulated net earnings" (generally, undivided profits). Under
the FDI Act, no dividends may be paid by an insured bank if the bank is in
arrears in the payment of any insurance assessment due to the FDIC.
State and federal regulatory authorities have adopted standards for the
maintenance of adequate levels of capital by banks. Adherence to such standards
further limits the ability of the Savings Bank to pay dividends.
Restrictions on Investment Authority of State-Chartered Banks. Section 24
of the FDI Act, and the FDIC regulations promulgated thereunder, generally
limit the activities and equity investments of FDIC insured savings banks and
their subsidiaries to those permissible for national banks and their
subsidiaries, unless such activities and investments are specifically exempted
or consented to by the FDIC. FDIC regulations governing the equity investments
of FDIC insured savings banks generally prohibit equity investments by such
banks and required the divestiture of such investments by December 19, 1996,
unless certain conditions are met. The Savings Bank has no impermissible
investments and does not conduct impermissible activities. Savings banks not
engaging in such activities but that desire to engage in other impermissible
activates may apply for approval from the FDIC to do so.
Transactions with Affiliates. Extensions of credit by the Savings Bank to
executive officers, trustees, and principal shareholders and related interests
of such persons are subject to Sections 22(g) and 22(h) of the FRA and the
Federal Reserve's Regulation O. These rules limit the aggregate amount of loans
to any such individual and their related interests, and require that all such
loans be pre-approved by the full Board of the Holding Company voting without
such person being present. These rules also provide that no institution shall
make any
65
<PAGE>
loan or extension of credit in any manner to any of such persons, unless such
loan or extension of credit is made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, does not involve more than the normal risk of
repayment or present other unfavorable features, and the institution follows
underwriting procedures that are not less stringent than those applicable to
comparable transactions by the institution with persons who are not executive
officers, trustees, principal shareholders, or employees of the institution.
Loans can be made to employees, including executives and trustees, on more
favorable terms than to the general public, if all employees are eligible for
such preferential terms. Regulation O also sets forth additional limitations on
extensions of credit by an institution to its executive officers. Management
believes that the Savings Bank is in compliance with Sections 22(g) and 22(h)
of the FRA and the Federal Reserve's Regulation O.
Federal Reserve System. Under Federal Reserve regulations, the Savings
Bank is required to maintain noninterest-earning reserves against its
transaction accounts (primarily NOW and regular checking accounts). The Federal
Reserve regulations generally require that reserves of 3% must be maintained
against net transaction accounts of $47.8 million or less (subject to
adjustment by the Federal Reserve) and $1.43 million plus 10% of net
transaction accounts in excess of $47.8 million. The Savings Bank is in
compliance with the foregoing requirements. Because required reserves must be
maintained in the form of either vault cash, a noninterest-bearing account at a
Federal Reserve Bank or a pass-through account as defined by the Federal
Reserve, the effect of this reserve requirement is to reduce the Savings Bank's
interest-earning assets.
Federal Home Loan Bank System. As a condition of approval to the Savings
Bank's conversion from a state-chartered savings association to a
state-chartered savings bank in 1990, the Savings Bank is required to retain
its membership in the FHLB System, which consists of 12 regional FHLBs. The
FHLB provides a central credit facility primarily for member institutions. The
Savings Bank, as a member of the FHLB of Pittsburgh, is required to acquire and
hold shares of capital stock in that FHLB in an amount at least equal to 1% of
the aggregate principal amount of its unpaid residential mortgage loans and
similar obligations at the beginning of each year, or 1/20 of its advances
(borrowings) from the FHLB of Pittsburgh, whichever is greater. The Savings
Bank is in compliance with this requirement, with an investment in FHLB of
Pittsburgh stock at December 31, 1997 of $559,900. FHLB advances must be
secured by specified types of collateral and may only be obtained for the
purpose of providing funds for residential housing finance.
The FHLBs are required to provide funds for the resolution of insolvent
thrifts and to contribute funds for affordable housing programs. These
requirements could reduce the amount of dividends that the FHLBs pay to their
members and could also result in the FHLBs imposing a higher rate of interest
on advances to their members. If dividends were reduced, or interest on future
FHLB advances increased, the Savings Bank's net interest income would likely
also be reduced.
FEDERAL TAXATION
General. Upon consummation of the Conversion and Reorganization, the
Holding Company and the Savings Bank will report their income on a fiscal year
basis using the accrual method of accounting and will be subject to federal
income taxation in the same manner as other corporations with some exceptions,
including particularly the Savings Bank's reserve for bad debts discussed
below. The following discussion of tax matters is intended only as a summary
and does not purport to be a comprehensive description of the tax rules
applicable to the Savings Bank or the Holding Company.
Bad Debt Reserve. Historically, savings institutions such as the Savings
Bank which met certain definitional tests primarily related to their assets and
the nature of their business ("qualifying thrift") were permitted to establish
a reserve for bad debts and to make annual additions thereto, which may have
been deducted in arriving at their taxable income. The Savings Bank's
deductions with respect to "qualifying real property loans," which are
generally loans secured by certain interest in real property, were computed
using an amount based on the Savings Bank's actual loss experience, or a
percentage equal to 8% of the Savings Bank's taxable income, computed with
certain modifications and reduced by the amount of any permitted additions to
the non-qualifying reserve. Due to the Savings Bank's loss experience, the
Savings Bank generally recognized a bad debt deduction equal to 8% of taxable
income.
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<PAGE>
The provisions repealing the current thrift bad debt rules were passed by
Congress as part of "The Small Business Job Protection Act of 1996, as amended
by the Taxpayer Relief Act of 1997 (for qualifying thrifts which are S
corporations)." The new rules eliminate the 8% of taxable income method for
deducting additions to the tax bad debt reserves for all thrifts for tax years
beginning after December 31, 1995. These rules also require that all
institutions recapture all or a portion of their bad debt reserves added since
the base year (last taxable year beginning before January 1, 1988). The Savings
Bank has previously recorded a deferred tax liability equal to the bad debt
recapture and as such the new rules will have no effect on net income or
federal income tax expense. For taxable years beginning after December 31,
1995, the Savings Bank's bad debt deduction will be determined under the
experience method using a formula based on actual bad debt experience over a
period of years or, if the Savings Bank is a "large" association (assets in
excess of $500 million) on the basis of net charge-offs during the taxable
year. The new rules allow an institution to suspend bad debt reserve recapture
for the 1996 and 1997 tax years if the institution's lending activity for those
years is equal to or greater than the institutions average mortgage lending
activity for the six taxable years preceding 1996 adjusted for inflation. For
this purpose, only home purchase or home improvement loans are included and the
institution can elect to have the tax years with the highest and lowest lending
activity removed from the average calculation. If an institution is permitted
to postpone the reserve recapture, it must begin its six year recapture no
later than the 1998 tax year. The unrecaptured base year reserves will not be
subject to recapture as long as the institution continues to carry on the
business of banking. In addition, the balance of the pre-1988 bad debt reserves
continue to be subject to provisions of present law referred to below that
require recapture in the case of certain excess distributions to shareholders.
Distributions. To the extent that the Savings Bank makes "nondividend
distributions" to the Holding Company, such distributions will be considered to
result in distributions from the balance of its bad debt reserve as of December
31, 1987 (or a lesser amount if the Savings Bank's loan portfolio decreased
since December 31, 1987) and then from the supplemental reserve for losses on
loans ("Excess Distributions"), and an amount based on the Excess Distributions
will be included in the Savings Bank's taxable income. Nondividend
distributions include distributions in excess of the Savings Bank's current and
accumulated earnings and profits, distributions in redemption of stock and
distributions in partial or complete liquidation. However, dividends paid out
of the Bank's current or accumulated earnings and profits, as calculated for
federal income tax purposes, will not be considered to result in a distribution
from the Savings Bank's bad debt reserve. The amount of additional taxable
income created from an Excess Distribution is an amount that, when reduced by
the tax attributable to the income, is equal to the amount of the distribution.
Thus, if, after the Conversion, the Savings Bank makes a "nondividend
distribution," then approximately one and one-half times the Excess
Distribution would be includable in gross income for federal income tax
purposes, assuming a 34% corporate income tax rate (exclusive of state and
local taxes). See "REGULATION" and "DIVIDEND POLICY" for limits on the payment
of dividends by the Savings Bank. The Savings Bank does not intend to pay
dividends that would result in a recapture of any portion of its tax bad debt
reserve.
Corporate Alternative Minimum Tax. The Code imposes a tax on the
alternative minimum taxable income ("AMTI") of certain corporations at a rate
of 20%. The excess of the tax bad debt reserve deduction using the percentage
of taxable income method over the deduction that would have been allowable
under the experience method is treated as a preference item for purposes of
computing the AMTI. In addition, only 90% of AMTI can be offset by net
operating loss carryovers. AMTI is increased by an amount equal to 75% of the
amount by which the Savings Bank's adjusted current earnings exceeds its OMIT
(determined without regard to this preference and prior to reduction for net
operating losses). For taxable years beginning after December 31, 1986, and
before January 1, 1996, an environment tax of 0.12% of the excess of AMTI (with
certain modification) over $2.0 million is imposed on corporations, including
the Savings Bank, whether or not an Alternative Minimum Tax is paid.
Dividends-Received Deduction. The Holding Company may exclude from its
income 100% of dividends received from the Savings Bank as a member of the same
affiliated group of corporations which elect to file a consolidated return. The
corporate dividends-received deduction is generally 70% in the case of
dividends received from unaffiliated corporations with which the Holding
Company and the Savings Bank will not file a consolidated tax return, except
that if the Holding Company or the Savings Bank owns more than 20% of the stock
of a corporation distributing a dividend, then 80% of any dividends received
may be deducted assuming the applicable holding period has been satisfied.
67
<PAGE>
MANAGEMENT
Management of the Holding Company
Directors will be elected by the shareholders of the Holding Company for
staggered three-year terms, or until their successors are elected and
qualified, at the first annual meeting of shareholders following the
consummation of the Conversion and Reorganization. The Holding Company's Board
of Directors consists of six persons divided into three classes, each of which
contains one third of the Board. One class, consisting of Mr. DiSandro and Ms.
Pauciello has a term of office expiring at the first annual meeting of
shareholders after their election; a second class, consisting of Mrs. Fumo and
Ms. Pauciello, has a term of office expiring at the second annual meeting of
shareholders after her election; and a third class, consisting of Mr. Fumo and
Mr. Finley, has a term of office expiring at the third annual meeting of
shareholders after his election.
The executive officers of the Holding Company will be elected annually by
the Board of Directors and hold office until their respective successors have
been elected and qualified or until death, resignation or removal by the Board
of Directors. The executive officers of the Holding Company are:
<TABLE>
<CAPTION>
Name Position
- ---------------------------------- --------------------------------------------------
<S> <C>
Vincent J. Fumo ............. Chairman of the Board and Chief Executive Officer
Anthony DiSandro ............ President and Director
Gary Polimeno ............... Treasurer and Vice President
Roseanne Pauciello .......... Corporate Secretary and Director
</TABLE>
Since the formation of the Holding Company, none of the executive
officers, directors or other personnel has received remuneration from the
Holding Company. For information concerning the principal occupations,
employment and compensation of the directors and executive officers of the
Holding Company during the past five years, see "MANAGEMENT OF THE SAVINGS BANK
- -- Biographical Information."
Management of the Savings Bank
Directors and Executive Officers. The Savings Bank's Bylaws require that
the Board of Trustees of the Savings Bank consist of between seven and twenty
members, and that the Board of Trustees shall set the exact number from time to
time. The Savings Bank's Board of Trustees has fixed the number of trustees at
twelve members. Such Bylaws establish three classes of Trustees of equal size.
Trustees are elected for three year terms, with one class to be elected each
year.
The following table sets forth information, as of December 31, 1997, with
respect to the trustees and executive officers of the Savings Bank.
Class I Trustee (Term expiring 2000)
<TABLE>
<CAPTION>
Year
First
Elected Principal Occupation
Name/Position Age Trustee(1) During Past Five Years
- ------------------------------------ ----- ------------ ------------------------------------------------
<S> <C> <C> <C>
Class I Trustees:
Sylvia M. DiBona, Trustee .......... 43 1997 Chairman and Chief Executive Officer of the
William Penn Agency
(insurance agency)
James W. Eastwood, Trustee ......... 52 1995 President of Granary Associates, Inc. (hospital
development and consulting firm)
P. Charles DeRita, Trustee ......... 86 1995 Vice President and Manager of Hallmark
Abstract Co.
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
Year
First
Elected Principal Occupation
Name/Position Age Trustee(1) During Past Five Years
- -------------------------------------------- ----- ------------ ----------------------------------------------
<S> <C> <C> <C>
Vincent J. Fumo, Chairman and Chief
54 1995 Chairman and Chief Executive Officer of Penn-
Executive Officer(2) ......................
sylvania Savings Bank and Pennsylvania State
Senator
Class II Trustees (Term expiring 1998):
James F. Kenney, Trustee ................... 39 1995 City of Philadelphia Councilman since 1992
Roseanne Pauciello, Trustee and
53 1995 Corporate Secretary of Pennsylvania Savings
Corporate Secretary .......................
Bank; School District of Philadelphia Home
and School Visitor
Thomas J. Finley, Jr., Trustee ............. 76 1995 Retired
S. Michael Palermo, ........................ 56 1995 Assistant Executive Trustee of Pennsylvania
Turnpike Commission
Class III Trustees (Term expiring 1999):
Jane Scaccetti Fumo, Trustee(2)(3) ......... 42 1995 Certified Public Accountant, Drucker &
Scaccetti, P.C.
Alfonso Tumini, Trustee .................... 47 1995 Attorney
Leonard A. Green, Trustee .................. 78 1995 Attorney
Anthony DiSandro, Trustee, President
50 1995 President and Chief Operating Officer of
and Chief Operating Officer ...............
Pennsylvania Savings Bank
</TABLE>
- ------------
(1) Period indicated excludes service as a trustee of the Savings Bank's
predecessors; each Trustee was selected as an initial trustee of the
Savings Bank in connection with its incorporation on October 20, 1995.
(2) Vincent J. Fumo and Jane Scaccetti Fumo are husband and wife.
(3) Jane Scaccetti Fumo also serves as a director of Nutrition Management
Corp., which has a class of securities registered or subject to the
Securities Exchange Act of 1934, as amended ("Exchange Act").
Executive Officers Who Are Not Trustees
<TABLE>
<CAPTION>
Principal Occupation
Name/Position Age During Past Five Years
- ------------------------------------ ----- ----------------------------------------
<S> <C> <C>
Gary Polimeno, Vice President and
Treasurer ..................... 45 Vice President of Pennsylvania
Savings Bank. Treasurer of Pennsylvania
Savings Bank since 1994.
</TABLE>
Stock Ownership of Management as of December 31, 1997
Amount and Percent of
Nature of Outstanding
Name of Beneficial Shares of
Beneficial Owner Ownership Common Stock
- ---------------------------------- ---------------- -------------
P. Charles DeRita ............. 5,000 0.42%
Sylvia M. DiBona .............. 23,250 1.95%
Anthony DiSandro .............. 104,783(1) 8.77%
James W. Eastwood ............. 6,200 0.52%
Thomas J. Finley, Jr. ......... 0 0%
69
<PAGE>
<TABLE>
<CAPTION>
Amount and Percent of
Nature of Outstanding
Name of Beneficial Shares of
Beneficial Owner Ownership Common Stock
- ------------------------------------------- ---------------- -------------
<S> <C> <C>
Jane Scaccetti Fumo .................... 160,514(2) 13.25%
Vincent J. Fumo ........................ 160,514(2) 13.25%
Leonard A. Green ....................... 100 (3)
James F. Kenney ........................ 100 (3)
S. Michael Palermo ..................... 0 0%
Gary Polimeno .......................... 11,515(4) 0.96%
Roseanne Pauciello ..................... 2,500 0.21%
Alfonso Tumini ......................... 0 0%
All executive officers and trustees as a
group (13 persons) ................... 272,182 22.21%
</TABLE>
- ------------
(1) Amount includes 19,636 shares held indirectly through the 401(k) Plan,
10,000 shares held through the Profit Sharing Plan, 10,160 shares held by
the 1995 MRP that have been awarded to Mr. DiSandro, 6,114 shares held by
Mr. DiSandro directly and 16,593 shares subject to immediately exercisable
options. Also includes 42,280 shares held by the ESOP of which Mr.
DiSandro is a trustee.
(2) Vincent Fumo and Jane Scaccetti Fumo are husband and wife. Amount includes
18,000 shares held through the 401(k) Plan, 7,205 shares held through the
Profit Sharing Plan, 42,045 held in IRA accounts, 10,161 shares held by
the 1995 MRP that have been awarded to Mr. Fumo, 200 shares held by Jane
Scaccetti Fumo, 300 shares held on behalf of the daughter of Vincent and
Jane Scaccetti Fumo and 16,593 shares subject to immediately exercisable
options. Also includes 42,280 shares held by the ESOP of which Mr. Fumo is
a trustee.
(3) Represents less than 1/2 of one percent of total shares outstanding.
(4) Includes 7,773 shares held indirectly through the 401(k) Plan, 1,069 shares
by the 1995 MRP, and 2,673 shares subject to immediately exercisable
options.
Meetings and Committees of the Board of Trustees
The business of the Savings Bank is conducted at regular and special
meetings of the full Board of Trustees and its standing committees. The
standing committees consist of the Executive, Asset/Liability Management,
Budget, Compensation, Loan, Investment, Strategic Planning, Audit and
Nominating Committees. During 1997, the Board of Trustees met at twelve regular
meetings. No member of the Board or any committee thereof attended less than
75% of said meetings.
The Executive Committee of the Board of Trustees consists of Trustee
DiSandro, who serves as Chairman, and Trustees Pauciello and Palermo. The
Executive Committee meets immediately prior to meetings of the full Board. All
significant actions of the Executive Committee are reviewed by the entire
Board; however, the Executive Committee has decision-making authority as
assigned by the Board, such as loan approval authority up to $350,000. The
Executive Committee met twelve times during 1997.
The Asset/Liability Committee consists of Vincent J. Fumo, who serves as
Chairman, Trustees DiSandro, Eastwood, Jane Scaccetti Fumo and Gary Polimeno,
the Savings Bank's Treasurer. This committee meets to review the maturity and
repricing of the Savings Bank's assets and liabilities in an effort to manage
the Savings Bank's interest rate risk in accordance with the Savings Bank's
interest rate risk policy and otherwise reviews the Bank's strategies for
interest rate risk management. This committee met four times during 1997.
The Audit Committee of the Savings Bank consists of Trustee James W.
Eastwood, who serves as Chairman, and Trustees Kenney and DiBona. The Audit
Committee reviews the Savings Bank's general financial condition and the
results of the annual audit. The Audit Committee is authorized to retain the
services of outside independent auditors of the Savings Bank. The Audit
Committee met twelve times in 1997.
70
<PAGE>
The Nominating Committee consists of Trustee Vincent J. Fumo, who serves
as Chairman, and Trustees Anthony DiSandro, Roseanne Pauciello and Jane
Scaccetti Fumo. The Nominating Committee, which met once in 1997, is
responsible for selecting and submitting nominees for trustees to the Board at
its meeting for the purpose of appointing trustees. Shareholder nominations for
trustee must be made in accordance with the Savings Bank's Bylaws.
The Budget Committee of the Savings Bank consists of Trustee Tumini, who
serves as Chairman, and Trustees Kenney and Jane Scaccetti Fumo. The Budget
Committee participates in the formulation of the Savings Bank's budget and
supervises the Savings Bank's adherence to its budget. The Budget Committee met
twelve times in 1997.
The Savings Bank's Strategic Planning Committee consists of Trustee Jane
Scaccetti Fumo, who serves as Chairperson, and Trustees DiBona, Green and
Pauciello. The Savings Bank's Strategic Planning Committee conducts analyses of
the Savings Bank's status and performance to produce recommendations to the
Board for strategies for growth and profitability. The Strategic Planning
Committee met three times in 1997.
The Savings Bank's Loan Committee consists of Trustee DiSandro, who serves
as Chairman, together with officers Gary Polimeno and Renee D'Orazio. The Loan
Committee approves loans of up to $200,000. It submits larger loans to the
Executive Committee or the Board of Trustees for approval. The Loan Committee
met at least once each month in 1997.
Trustee Eastwood serves as Chairman of the Savings Bank's Compensation
Committee, which is responsible for establishing and monitoring compensation
levels in view of management's performance and coordinating and instituting
special compensation plans. Trustees DeRita and Pauciello also serve on the
Compensation Committee, which met four times in 1997.
The Savings Bank's investment portfolio is managed by the Investment
Committee. The Investment Committee makes and monitors investments in
accordance with the Savings Bank's Investment Policy. Trustee Vincent J. Fumo
serves as Investment Committee Chairman, and Trustee DiSandro and officer Gary
Polimeno are members. The committee met four times in 1997.
Trustee Compensation
For the year ended December 31, 1997, trustees were paid $700 per Board
meeting attended. In addition, trustees were paid $350 per committee meeting
attended. Directors of the Savings Bank's subsidiaries and affiliates, PSA
Financial Corp., PSA Service Corp., PSA Consumer Discount Company,
Transnational Mortgage Corp. and PSB Mutual Holding Company, were paid $250,
$150, $150, $250 and $200, respectively, per board meeting attended.
71
<PAGE>
Executive Compensation
The following table sets forth, for the years ended December 31, 1997,
December 31, 1996 and September 30, 1995 certain information as to the total
remuneration paid by the Savings Bank to executive officers who received salary
and bonuses in excess of $100,000 during such fiscal year.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
----------------------------------- --------------------------------------
Other All
Annual Other
Compen- Restricted Securities Compen-
Fiscal sation Stock Underlying sation
Name and Principal Position Year Salary(1) Bonuses (2) Awards(3) Options (4)(5)
- ------------------------------- -------- ----------- ----------- --------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Vincent J. Fumo 1997 $139,987 $117,500 $60,671 10,161 16,593 $23,800
Chairman and Chief Executive 1996 $130,478 $117,500 $40,758 10,161 16,593 $19,174
Officer 1995 $142,170 $108,500 $44,171 $25,414
Anthony DiSandro 1997 $147,456 $125,000 $27,650 10,160 16,593 $56,540
President and Chief Operating 1996 $145,782 $125,000 $47,250 10,160 16,593 $18,263
Officer 1995 $158,935 $113,500 $49,143 $16,788
Gary Polimeno 1997 $ 87,282 $ 35,000 $ 8,400 1,069 2,673 $ 2,996
Vice President and Treasurer 1996 $ 87,282 $ 45,000 $17,660 1,069 2,673 $ --
1995 $ 95,874 $ 45,000 $27,199 $ --
</TABLE>
- ------------
(1) Includes the portion of salary deferred by the executive pursuant to the
401(k) Plan.
(2) Consists of lease payments paid by the Savings Bank with respect to vehicle
provided by the Savings Bank for the executive's use and compensation
expense related to restricted Stock awards.
(3) Mr. Fumo, Mr. DiSandro and Mr. Polimeno each hold 10,161 shares of
restricted stock, 10,160 shares of restricted stock and 1,069 shares of
restricted stock, respectively, which, as of December 31, 1997, had a fair
market value of $294,669, $294,640 and $31,001, respectively. Of such
shares, 5,347, 5,347 and 1,069 shares of each of Messrs. Fumo, DiSandro
and Polimeno were awarded at April 30, 1996 and vest at a rate of 20% per
year over a five (5) year period and 4,814 and 4,813 shares of each of
Messrs. Fumo and DiSandro were granted on December 31, 1996 and vest at a
rate of 20% per year over a five (5) year period. For the year ended
December 31, 1997, Mr. Fumo, Mr. DiSandro and Mr. Polimeno recognized
compensation expense of $40,004, $40,004 and $2,996 for those shares which
were vested as of December 31, 1997. This compensation expense is included
in the above table under "All Other Compensation".
(4) Includes trustees fees of $15,400 and $19,250 paid to Mr. Fumo and Mr.
DiSandro, respectively, for the year ended December 31, 1997, and
directors fees paid by the Savings Bank's subsidiaries to Mr. Fumo, Mr.
DiSandro and Mr. Polimeno of $8,400, $8,400 and $8,400, respectively, for
the year ended December 31, 1997. Includes trustees fees of $12,200 and
$17,100 paid to Mr. Fumo and Mr. DiSandro, respectively, for the year
ended December 31, 1996, and directors fees paid by the Bank's
subsidiaries to Mr. Fumo, Mr. DiSandro and Mr. Polimeno of $11,200,
$11,200 and $8,400, respectively, for the year ended December 31, 1996.
Includes trustee fees of $7,200 and $11,400 paid to Mr. Fumo and Mr.
DiSandro, respectively, in fiscal year 1995, and trustee fees paid by the
Bank's subsidiaries and affiliates to Mr. Fumo, Mr. DiSandro and Mr.
Polimeno of $8,400 each in fiscal year 1995.
<PAGE>
(5) Includes contributions of $17,358, $18,950 and $9,260 made by the Savings
Bank to the accounts of Mr. Fumo, Mr. DiSandro and Mr. Polimeno,
respectively, pursuant to the Profit Sharing Plan for the year ended
December 31, 1996 and contributions of $25,713, $28,028 and $15,131 to the
accounts of Mr. Fumo, Mr. DiSandro and Mr. Polimeno, respectively, for
fiscal year 1995. Also includes $2,858, $1,315 and $3,668 in contributions
to the accounts of Mr. Fumo, Mr. DiSandro and Mr. Polimeno, respectively,
pursuant to the 401(k) Plan for the year ended December 31, 1995. During
the year ended December 31, 1996, the Savings Bank made no profit sharing
or matching contributions to the accounts of Mr. Fumo, Mr. DiSandro, and
Mr. Polimeno, respectively. For the year ended December 31, 1997, no
contributions were made to either the Profit Sharing or the 401K Plan.
Employment Agreements. In connection with the MHC Reorganization, the
Savings Bank entered into employment agreements (the "Employment Agreements")
with Vincent J. Fumo, Chairman and Chief Executive Officer and Anthony
DiSandro, President and Chief Operating Officer. Under the terms of his
Employment
72
<PAGE>
Agreement, Mr. Fumo serves as Chairman and Chief Executive Officer of the MHC
and the Savings Bank at a base salary of $130,500. Under the terms of his
Employment Agreement, Mr. DiSandro serves as President and Chief Operating
Officer of the MHC and the Savings Bank at a base salary of $145,800. Each
Employment Agreement provides for an initial term of three years, which will
thereafter be automatically renewed for an additional three years on each
anniversary date unless terminated pursuant to its terms by the respective
parties.
Each Employment Agreement provides for the payment of certain severance
benefits in the event of the executive's resignation for specified reasons or
as a result of his termination by the MHC or the Savings Bank without "Cause"
(as defined in each Employment Agreement). The executive would be entitled to
severance payments if: (1) he terminates employment during the term of such
agreement following any breach of the Employment Agreement by the Savings Bank
or MHC, loss of title, office or significant authority, reduction in annual
compensation or benefits, or relocation of the executive's principal place of
employment by more than 30 miles, or (2) if the Savings Bank or the MHC
terminates his employment, other than for Cause.
If either executive becomes entitled to receive severance payments under
his Employment Agreement, he would receive, over a period of 36 months, a cash
payment equal to three times his average annual compensation during the
five-year period preceding termination of employment. Payments would be made in
equal monthly installments. In addition to the severance payments, the
executive would be entitled to continue to receive life, medical, dental and
other insurance coverages (or a dollar amount equal to the cost of obtaining
each such coverage) for a period of up to 36 months from the date of
termination. Payments under the Employment Agreements are limited, however, to
the extent (i) that they will constitute excess parachute payments under
Section 280G of the Internal Revenue Code of 1986, as amended ("Code"), or (ii)
not permitted under the Federal Deposit Insurance Act.
Significant Owners of Savings Bank Common Stock
The following table sets forth, as of December 31, 1997, certain
information as to the beneficial ownership of Savings Bank Common Stock by
persons known by the Savings Bank who beneficially own more than 5% of the
outstanding shares of the Savings Bank Common Stock (the "Significant Owners").
For purposes of this table, an individual is considered to beneficially own
shares of Savings Bank Common Stock if he or she has or shares voting power
(which includes the power to vote or direct the voting of the shares) or
investment power (which includes the power to dispose of or direct the
disposition of the shares). Unless otherwise indicated, all shares are owned
directly by the Significant Owners through a trust, corporation or association,
or by the Significant Owners or their spouses as custodians or trustee for the
shares of minor children. The Significant Owners effectively exercise sole
voting and investment power over such shares. Shares that are subject to
options that are exercisable within 60 days of December 31, 1997 are deemed to
be beneficially owned. For information regarding proposed purchases of
Conversion Shares by the Significant Owners and their anticipated ownership of
Common Stock upon consummation of the Conversion and Reorganization, see
"COMMON STOCK TO BE PURCHASED OR RECEIVED BY MANAGEMENT."
<TABLE>
<CAPTION>
Amount and Percent of
Nature of Outstanding
Name and Address of Beneficial Shares of
Title of Class Beneficial Ownership Ownership Common Stock
- ---------------- ------------------------------------ ------------ -------------
<S> <C> <C> <C>
Common Stock PSB Mutual Holding Company 615,250 51.50%
par value Eleven Penn Center, Suite 2601
$1.00 per 1835 Market Street
Philadelphia, Pennsylvania 19103
Vincent J. Fumo and 160,514 13.44%
Jane Scaccetti Fumo
1818 South 13th Street
Philadelphia, Pennsylvania 19148(1)
Anthony DiSandro 104,783 8.77%
1071 Welsh Road
Philadelphia, Pennsylvania 19115(2)
MHC and all officers 880,547 73.71%
and trustees of
the MHC(3)
</TABLE>
73
<PAGE>
- ------------
(1) Vincent Fumo and Jane Scaccetti Fumo are husband and wife. Amount includes
18,000 shares held through the Savings Bank's Cash or Deferred Profit
Sharing Plan (the "401(k) Plan"), 7,205 shares held through the Savings
Bank's Profit Sharing Plan (the "Profit Sharing Plan"), 42,045 held in IRA
accounts, 10,161 shares held by the Pennsylvania Savings Bank Management
Recognition Plan (the "MRP") that 105 have been awarded to Mr. Fumo, 200
shares held by Jane Scaccetti Fumo, 300 shares held on behalf of the
daughter of Vincent and Jane Scaccetti Fumo and 16,593 shares subject to
immediately exercisable options. Also includes 42,280 shares held by the
Pennsylvania Savings Bank Employee Stock Ownership Plan (the "ESOP") of
which Mr. Fumo is a trustee.
(2) Amount includes 19,636 shares held indirectly through the 401(k) Plan,
10,000 shares held through the Profit Sharing Plan, 10,160 shares held by
the MRP that have been awarded to Mr. DiSandro, 6,114 shares held by Mr.
DiSandro directly and 16,593 shares subject to immediately exercisable
options. Also includes 42,280 shares held by the ESOP of which Mr.
DiSandro is a trustee.
(3) The Trustees of the MHC intend to vote their shares, and to cause the MHC
to vote its shares in favor of the Conversion.
Compensation of Officers and Directors Through Benefit Plans
Defined Benefit Retirement Plan. The Savings Bank has maintained a
noncontributory defined benefit retirement plan ("Retirement Plan"). Under the
terms of the Retirement Plan, all employees age 21 or older who have worked at
the Savings Bank for a period of one year and have been credited with 1,000 or
more hours of employment with the Savings Bank during the year are eligible to
accrue benefits under the Retirement Plan. The Savings Bank would annually
contribute an amount to the Retirement Plan necessary to satisfy the
actuarially determined minimum funding requirements in accordance with the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). At
December 31, 1997, the Retirement Plan fully met its funding requirements under
Section 412 of the Code. Employee contributions are not permitted under the
Retirement Plan. The Retirement Plan was "frozen" as of September 30, 1994 and
benefits no longer accrue thereunder. Since the Retirement Plan is fully
funded, the Savings Bank will generally not be required to make any additional
contributions unless asset depreciation from investment occurs. Participants
will continue to vest in accordance with the provisions of the Retirement Plan.
No new employees will be eligible for participation. The Plan, however, remains
subject to all other requirements of the Code.
Benefits under the Retirement Plan begin to vest after three years in
accordance with the following schedule:
Years of Service Percentage Vested
------------------- ------------------
3 years or less 0%
After 3 years 20%
After 4 years 40%
After 5 years 60%
After 6 years 80%
After 7 years 100%
74
<PAGE>
The following table indicates the annual retirement benefit that would be
payable under the Retirement Plan upon retirement at age 65 in calendar year
1998, expressed in the form of a single life annuity for the final average
salary and benefit service classifications specified below.
<TABLE>
<CAPTION>
Years of Service and Benefits Payable at Retirement
Final Average ---------------------------------------------------------------------------
Compensation 15 20 25 30 35 40
- --------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $13,804 $18,405 $23,006 $27,608 $27,608 $27,608
$ 75,000 $21,950 $29,267 $36,583 $43,900 $43,900 $43,900
$ 100,000 $30,096 $40,128 $50,160 $60,192 $60,192 $60,192
$ 125,000 $38,242 $50,990 $63,827 $65,827 $65,827 $65,827
$ 150,000* $46,388 $61,851 $65,827 $65,827 $65,827 $65,827
</TABLE>
- ------------
* Represents the limit on plan compensation imposed by the Code effective
January 1, 1994.
As of December 31, 1997, Mr. Fumo, Mr. DiSandro, and Mr. Polimeno had 18,
17 and 19 years of credited service (i.e. benefit service), respectively.
Pennsylvania Savings Bank Cash or Deferred Profit Sharing Plan
(401(k)). The Savings Bank also maintains the Pennsylvania Savings Cash or
Deferred Profit Sharing Plan, which is a qualified, tax-exempt profit sharing
plan with a cash-or-deferred feature under Section 401(k) of the Code (the
"401(k) Plan"). All employees who have attained age 21 and have completed two
years of employment during which they worked at least 1,000 hours are eligible
to participate. Assets of the 401(k) Plan are managed by the 401(k) Plan's
trustees. Mr. Fumo and Mr. DiSandro presently serve as trustees to the 401(k)
Plan.
Under the 401(k) Plan, participants are permitted to make pre-tax salary
reduction contributions to the plan equal to a percentage of up to 15% of
compensation. Additional after-tax contributions of up to 10% of compensation
may be made to the Plan. For these purposes, "compensation" includes total
compensation (including salary reduction contributions made under the 401(k)
Plan sponsored by the Savings Bank), but does not include compensation in
excess of the Code Section 401(a)(17) limits (presently $160,000). The Savings
Bank may also annually make a discretionary profit sharing contribution to the
401(k) Plan. A participant must complete 1,000 hours of service during the plan
year and be employed on the last day of the plan year to receive an allocation
of the profit sharing contribution. For the 1997 and 1996 plan years, the
Savings Bank made profit sharing contributions of $0 and $40,568.
All employee contributions and profit sharing contributions to the 401(k)
plan and earnings thereon are fully and immediately vested.
Plan benefits will be paid to each participant as a joint and survivor or
single life annuity. In addition, a participant may, under certain
circumstances, elect a lump sum or period certain payment upon normal
retirement, death or disability, or after termination of employment.
Pennsylvania Savings Bank Profit Sharing Plan. The Savings Bank also
maintains the Pennsylvania Savings Bank Profit Sharing Plan, which is a
qualified plan pursuant to Section 401(a) of the Code. Employees who have
completed at least two years of service during which they have worked 1,000
hours or more and who have attained age 21 are eligible to participate in the
Profit Sharing Plan. Pursuant to the Profit Sharing Plan the Savings Bank, in
its discretion, makes contributions to the accounts of eligible employees.
Employee contributions are neither permitted nor required. Benefits under the
Profit Sharing Plan become 100% vested upon entry to the Plan.
Employee Stock Ownership Plan. The Savings Bank ESOP acquired 42,780
shares of the Savings Bank Common Stock with the proceeds of a $427,800 loan
from an unaffiliated financial institution ("1995 Loan"). Upon consummation of
the Conversion and Reorganization, the Savings Bank Common Stock held by the
ESOP will be converted into Exchange Shares based upon the Exchange Ratio.
In order to fund the purchase of up to 8% of the Conversion Shares to be
issued in the Conversion and Reorganization, it is anticipated that the ESOP
will borrow funds from the Holding Company equal to 100% of the
aggregate-purchase price of the Conversion Shares. In addition, the Holding
Company will lend sufficient funds to the ESOP to enable the ESOP to repay the
1995 Loan which had an outstanding principal balance of
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$295,000 at December 31, 1997. The loan to the ESOP will be repaid principally
from the Savings Bank's contributions to the ESOP and dividends payable on
Common Stock held by the ESOP over the anticipated 10- year term of the loan.
The interest rate for the ESOP loan is expected to be the prime rate as
published in The Wall Street Journal on the closing date of the Conversion and
Reorganization. See "PRO FORMA DATA." To the extent that the ESOP is unable to
acquire 8% of the Common Stock issued in the Conversion and Reorganization, it
is anticipated that the additional shares will be acquired following the
Conversion and Reorganization through open market purchases.
Shares purchased by the ESOP with the proceeds of the loan (including
shares originally acquired by the ESOP with the proceeds of the 1995 Loan) will
be held in a suspense account and released on a pro rata basis as the loan is
repaid. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of each
participant's proportional share of total compensation. Forfeitures will be
reallocated among the remaining plan participants.
In any plan year, the Savings Bank may make additional discretionary
contributions to the ESOP for the benefit of plan participants in either cash
or shares of Common Stock, which may be acquired through the purchase of
outstanding shares in the market or from individual shareholders or which
constitute authorized but unissued shares or shares held in treasury by Holding
Company. The timing, amount, and manner of such discretionary contributions
will be affected by several factors, including applicable regulatory policies,
the requirements of applicable laws and regulations, and market conditions.
Employees of the Savings Bank who have completed 1,000 hours of service
during 12 consecutive months and who have attained age 21 are eligible to
participate in the ESOP.
Benefits under the ESOP generally become 100% vested after the third year
of service or upon normal retirement (as defined in the ESOP), disability or
death of the participant. If a participant terminates employment for any other
reason prior to fully vesting, his nonvested account balance will be forfeited.
Forfeitures will be reallocated among remaining participating employees in the
same proportion as contribution. Benefits may be payable upon death,
retirement, early retirement, disability or separation from service. The
Savings Bank's contribution to the ESOP will not be fixed, so benefits payable
under the ESOP cannot be estimated. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Impact of New Accounting
Standards."
A committee consisting of the Savings Bank's Chairman and Chief Executive
Officer, President and Vice President and Treasurer, will administer the ESOP
(the "ESOP Committee"). An unrelated corporate trustee for the ESOP will be
appointed prior to the completion of the Offering. The ESOP Committee may
instruct the trustee regarding investment of funds contributed to the ESOP. The
ESOP trustee must vote all allocated shares held in the suspense account in a
manner calculated to most accurately reflect the instructions the ESOP trustee
has received from participants regarding the allocated stock, subject to and in
accordance with the fiduciary duties under ERISA owed by the ESOP trustee to
the ESOP participants.
Pursuant to SOP 93-6, compensation expense for a leveraged ESOP is
recorded at the fair market value of the ESOP shares when committed to be
released to participants' accounts. See "PRO FORMA DATA" and "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --
Comparison of Operating Results for the Years Ended December 31, 1996 and
1995."
If the ESOP purchases newly issued shares from the Holding Company, total
shareholders' equity would neither increase nor decrease. However, on a per
share basis, shareholders' equity and per share net earnings would decrease
because of the increase in the number of outstanding shares.
The ESOP is subject to the requirements of ERISA and the regulations of
the IRS and the Department of Labor issued thereunder. The Savings Bank has
received a favorable determination letter from the IRS regarding the
tax-qualified status of the ESOP.
1995 Stock Option and Incentive Plan. In connection with the MHC
Reorganization, the Savings Bank adopted the 1995 Stock Option Plan. The plan
was approved by the Public Shareholders at the Savings Bank's 1996 annual
meeting of shareholders. Options for all shares reserved for issuance under the
1995 Stock Option
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Plan have been granted to officers and employees of the Savings Bank. In
connection with the Conversion and Reorganization, the 1995 Stock Option Plan
will be assumed by the Holding Company and appropriate adjustments will be made
to the exercise price and the number of shares underlying each option to
reflect the applicable Exchange Ratio.
The following options were granted to Messrs. Fumo, DiSandro and Polimeno
under the 1995 Stock Option Plan during the fiscal year ended December 31,
1997.
<TABLE>
<CAPTION>
Number % of
of Shares Total Options
Underlying Granted Exercise Expiration
Name Options to Employees Price Date
- -------------------------- ------------ ---------------- ---------- ------------------
<S> <C> <C> <C> <C>
Vincent J. Fumo .......... 13,368 46.27%(1) $ 11.88 May 29, 2006
3,225 13.25 December 18, 2006
Anthony DiSandro ......... 13,368 46.27%(1) $ 11.88 May 29, 2006
3,225 13.25 December 18, 2006
Gary Polimeno ............ 2,673 7.46% $ 11.88 April 30, 2006
</TABLE>
- ------------
(1) Percentage based on aggregate number of options held by each holder of
options.
There was no exercise of options by any of Messrs. Fumo, DiSandro and
Polimeno under the 1995 Stock Option Plan at and for the fiscal year ended
December 31, 1997.
<TABLE>
<CAPTION>
Value of
Unexercised
In-the Money
Number of Options
Securities at Fiscal Year-
Shares Underlying End ($)(2)
Acquired Value Unexercised Exercisable/
Name on Exercise Realized Options Unexercisable
- -------------------------- ------------- ---------- ------------- ----------------
<S> <C> <C> <C> <C>
Vincent J. Fumo .......... 0 0 16,593 $238,171/$0
Anthony DiSandro ......... 0 0 16,593 238,171/ 0
Gary Polimeno ............ 0 0 16,593 39,079/ 0
</TABLE>
1995 Management Development and Recognition Plans. In connection with the
MHC Reorganization, the Savings Bank adopted Management Development and
Recognition Plans (collectively, the "1995 MRPs") for officers, employees and
nonemployee directors of the Savings Bank. The 1995 MRPs were approved by the
Public Shareholders at the Savings Bank's 1996 annual meeting of shareholders.
All shares under the 1995 MRP have been awarded. For purposes of the Conversion
and Reorganization, the shares awarded under the 1995 MRP participants will be
treated in the same manner as shares held by other minority shareholders.
1998 Stock Option Plan. The Board of Directors of the Holding Company
intends to adopt the 1998 Stock Option Plan and to submit it to the
shareholders for approval at a meeting held no earlier than six months
following consummation of the Conversion and Reorganization. Under current FDIC
regulations, the approval of a majority vote of the Holding Company's
outstanding shares is required prior to the implementation of the 1998 Stock
Option Plan within one year of the consummation of the Conversion and
Reorganization. The Stock Option Plan will comply with all applicable
regulatory requirements. However, the 1998 Stock Option Plan will not be
approved or endorsed by the FDIC.
<PAGE>
The 1998 Stock Option Plan will be designed to attract and retain
qualified management personnel, to provide such officers, and key employees
with a proprietary interest in the Holding Company as an incentive to
contribute to the success of the Holding Company and the Savings Bank, and to
reward officers and key employees for outstanding performance. The 1998 Stock
Option Plan will provide for the grant of incentive stock options ("ISOs")
intended to comply with the requirements of Section 422 of the Code and for
nonqualified stock options ("NQOs"). Upon receipt of shareholder approval of
the 1998 Stock Option Plan, stock options may be granted to key employees of
the Holding Company and its subsidiaries, including the Savings Bank. Unless
sooner terminated, the 1997 Stock Option Plan will continue in effect for a
period of ten years from the date the 1998 Stock Option Plan is approved by
shareholders.
A number of authorized shares of Common Stock equal to 10% of the number
of Conversion Shares of issued in connection with the Conversion and
Reorganization will be reserved for future issuance under the 1998
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Stock Option Plan (161,100 shares based on the issuance of 1,610,000 Conversion
Shares at the maximum of the Estimated Valuation Range). Shares acquired upon
exercise of options will be authorized but unissued shares or treasury shares.
In the event of a stock split, reverse stock split, stock dividend, or similar
event, the number of shares of Common Stock under the 1998 Stock Option Plan,
the number of shares to which any award relates and the exercise price per
share under any option may be adjusted by the Committee (as defined below) to
reflect the increase or decrease in the total number of shares of Common Stock
outstanding.
The 1998 Stock Option Plan will be administered and interpreted by a
committee of the Board of Directors ("Committee"). Subject to applicable FDIC
regulations, the Committee will determine which officers and key employees will
be granted options, whether, in the case of officers and employees, such
options will be ISOs or NQOS, the number of shares subject to each option, and
the exercisability of such options. All options granted to nonemployee
directors will be NQOs. The per share exercise price of all options will equal
at least 100% of the fair market value of a share of Common Stock on the date
the option is granted.
Under current FDIC regulations, if the 1998 Stock Option Plan is
implemented within one year of the consummation of the Conversion and
Reorganization, (i) no officer or employees could receive an award of options
covering in excess of 25%, (ii) no nonemployee director could receive in excess
of 5% and (iii) nonemployee directors, as a group, could not receive in excess
of 30% of the number of shares reserved for issuance under the 1998 Stock
Option Plan.
Under current provisions of the Code, the federal tax treatment of ISOs
and NQOs is different. With respect to ISOs, an optionee who satisfies certain
holding period requirements will not recognize income at the time the option is
granted or at the time the option is exercised. If the holding period
requirements are satisfied, the optionee will generally recognize capital gain
or loss upon a subsequent disposition of the shares of Common Stock received
upon the exercise of a stock option. If the holding period requirements are not
satisfied, the difference between the fair market value of the Common Stock on
the date of grant and the option exercise price, if any, will be taxable to the
optionee at ordinary income tax rates. A federal income tax deduction generally
will not be available to the Holding Company as a result of the grant or
exercise of an ISO, unless the optionee fails to satisfy the holding period
requirements. With respect to NQOs, the grant of an NQO generally is not a
taxable event for the optionee and no tax deduction will be available to the
Holding Company. However, upon the exercise of an NQO, the difference between
the fair market value of the Common Stock on the date of exercise and the
option exercise price generally will be treated as compensation to the optionee
upon exercise, and the Holding Company will be entitled to a compensation
expense deduction in the amount of income realized by the optionee.
Although no specific award determinations have been made at this time, the
Holding Company and the Savings Bank anticipate that if shareholder approval is
obtained it would provide awards to its officers and employees to the extent
and under terms and conditions permitted by applicable regulations. The size of
individual awards will be determined prior to submitting the 1998 Stock Option
Plan for shareholder approval and disclosure of anticipated awards will be
included in the proxy materials for such meeting.
1998 Management Recognition Plan. Following the Conversion and
Reorganization, the Board of Directors of the Holding Company intends to adopt
the 1998 MRP for officers and employees of the Holding Company and the Savings
Bank, subject to shareholder approval. The 1998 MRP will enable the Holding
Company and the Savings Bank to provide participants with a proprietary
interest in the Holding Company as an incentive to contribute to the success of
the Holding Company and the Savings Bank. The 1998 MRP will comply with all
applicable regulatory requirements. However, the 1998 MRP will not be approved
or endorsed by the FDIC. Under current FDIC regulations, the approval of a
majority vote of the Holding Company's outstanding shares is required prior to
the implementation of the 1998 MRP within one year of the consummation of the
Conversion and Reorganization.
The 1998 MRP expects to acquire a number of shares of Common Stock equal
to 4% of the Conversion Shares issued in connection with the Conversion and
Reorganization (64,440 shares based on the issuance of 1,610,000 Conversion
Shares at the maximum of the Estimated Valuation Range). Such shares will be
acquired on the open market, if available, with funds contributed by the
Holding Company or the Savings Bank to a trust which the Holding Company may
establish in conjunction with the 1998 MRP ("1998 MRP Trust") or from
authorized but unissued shares or treasury shares of the Holding Company.
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<PAGE>
A committee of the Board of Directors of the Holding Company will
administer the 1998 MRP, the members of which will also serve as trustees of
the 1998 MRP Trust, if formed. The trustees will be responsible for the
investment of all funds contributed by the Holding Company or the Savings Bank
to the 1998 MRP Trust. The Board of Directors of the Holding Company may
terminate the 1998 MRP at any time and, upon termination, all unallocated
shares of Common Stock will revert to the Holding Company.
Shares of Common Stock granted pursuant to the 1998 MRP will be in the
form of restricted stock payable ratably over a specified vesting period
following the date of grant. During the period of restriction, all shares will
be held in escrow by the Holding Company or by the 1998 MRP Trust. All unvested
1998 MRP awards will vest in the event of the recipient's death or disability.
Unvested 1997 MRP awards will also vest following a change in control (as
defined in the 1998 MRP) of the Holding Company or the Savings Bank to the
extent authorized or not prohibited by applicable law or regulations.
A recipient of a 1998 MRP award in the form of restricted stock generally
will not recognize income upon an award of shares of Common Stock, and the
Holding Company will not be entitled to a federal income tax deduction, until
the termination of the restrictions. Upon such termination, the recipient will
recognize ordinary income in an amount equal to the fair market value of the
Common Stock at the time and the Holding Company will be entitled to a
deduction in the same amount after satisfying federal income tax withholding
requirements. However, the recipient may elect to recognize ordinary income in
the year the restricted stock is granted in an amount equal to the fair market
value of the shares at that time, determined without regard to the
restrictions. In that event, the Holding Company will be entitled to a
deduction in such year and in the same amount. Any gain or loss recognized by
the recipient upon subsequent disposition of the stock will be either a capital
gain or capital loss.
Although no specific award determinations have been made at this time, the
Holding Company and the Savings Bank anticipate that if shareholder approval is
obtained it would provide awards to its directors, officers and employees to
the extent and under terms and conditions permitted by applicable regulations.
Under current FDIC regulations, if the 1998 MRP is implemented within one year
of the consummation of the Conversion and Reorganization, (i) no officer or
employees could receive an award covering in excess of 25%, (ii) no nonemployee
director could receive in excess of 5% and (iii) nonemployee directors, as a
group, could not receive in excess of 30% of the number of shares reserved for
issuance under the 1998 MRP. The size of individual awards will be determined
prior to submitting the 1998 MRP for shareholder approval, and disclosure of
anticipated awards will be included in the proxy materials for such meeting.
Transactions with the Savings Bank
Federal regulations require that all loans or extensions of credit to
executive officers and directors must generally be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons (unless the loan or
extension of credit is made under a benefit program generally available to all
other employees and does not give preference to any insider over any other
employee) and must not involve more than the normal risk of repayment or
present other unfavorable features. Pursuant to the above regulations, the
Savings Bank adopted an Insiders' Loan Policy in December 1996 pursuant to
which trustees/directors, officers and employees of the Savings Bank or any of
its subsidiaries are eligible to receive a 1% reduction of the interest rate of
mortgage loans. Federal regulations also require that loans made to a director
or executive officer in an amount that, when aggregated with the amount of all
other loans to such person and his related interests, are in excess of the
greater of $25,000 or 5% of the Savings Bank's capital and surplus (up to a
maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors. See "REGULATION -- Federal
Regulation of Savings Banks -- Transactions with Affiliates." The aggregate
amount of loans by the Savings Bank to its executive officers and directors was
$1.18 million at December 31, 1997, which is less than .01% of pro forma
shareholders' equity (based on the issuance of the maximum of the Estimated
Valuation Range).
Certain Relationships and Related Transactions
The Savings Bank's Insiders' Loan Policy applies to the following loans:
(1) a first mortgage on an employee's residence, (2) a first mortgage on the
employee's secondary home when it is used by the employee
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<PAGE>
as a vacation home and not as an investment property, and (3) a second mortgage
home equity loan on the employee's personal residence. The interest rate
discount is subject to increase by 1% if the employee does not complete five
years of continuous service with the Savings Bank or its subsidiaries. In
December 1996, mortgage loans were extended to Mr. Fumo and Mr. DiSandro on the
following terms: (1) principal amount of $750,000 at an interest rate of 6.5%
for a term of 360 months to Mr. Fumo; and (2) principal amount of $250,000 at
an interest rate of 6.5% for a term of 360 months to Mr. DiSandro. As of
December 31, 1997, Mr. Fumo's mortgage loan balance was $744,472 and Mr.
DiSandro's mortgage loan balance was $247,921. No additional similar loans were
extended through the year ended December 31, 1997.
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<PAGE>
THE CONVERSION AND REORGANIZATION
The PDOB has approved and the FDIC has issued its letter of nonobjection
with respect to, the Plan of Conversion subject to its approval by the members
of the Savings Bank and the shareholders of the Savings Bank entitled to vote
thereon and to the satisfaction of certain other conditions imposed by the PDOB
and the FDIC. Regulatory approval does not constitute a recommendation or
endorsement of the Plan of Conversion.
General
The Boards of Trustees of the Savings Bank and the MHC adopted, on July
17, 1997 and amended on September 25, 1997 and the Board of Directors of the
Holding Company adopted, on _______________, 1998 the Plan of Conversion which
describes and controls the Conversion and Reorganization. pursuant to which the
MHC will convert from a mutual holding company to a stock holding company and
the Savings Bank simultaneously will reorganize as a wholly-owned subsidiary of
the Holding Company, a newly-formed Pennsylvania corporation. The following
discussion of the Plan of Conversion is qualified in its entirety by reference
to the Plan of Conversion, which is attached as Exhibit A to both the MHC's
Proxy Statement and the Savings Bank's Proxy Statement, and is available to
both members of the MHC and shareholders of the Savings Bank upon request. The
Plan of Conversion is also filed as an exhibit to the Registration Statement.
See "ADDITIONAL INFORMATION." The FDIC has approved the Plan of Conversion
subject to (i) its approval by the members of the MHC entitled to vote on the
matter at the Special Meeting of Members called for that purpose to be held on
__________, 1998, (ii) its approval by the shareholders of the Savings Bank
entitled to vote on the matter at a special meeting of shareholders (including
the MHC) called for that purpose to be held on ____________, 1998, (iii)
approval by two-thirds of the votes of holders of Public Savings Bank Shares
voting at the Special Meeting of Shareholders, and (iv) subject to the
satisfaction of certain other conditions imposed by the PDOB and the FDIC.
Shareholders of the Savings Bank are entitled to dissent with respect to the
Plan of Conversion and to obtain "fair value" of their Savings Bank Common
Stock if the Plan of Conversion is consummated. See "Dissenders' Rights" in the
Savings Bank's Proxy Statement.
Pursuant to the Plan of Conversion, (i) the MHC will convert from a
state-chartered mutual holding company to a state-chartered interim stock
savings bank ("Interim A") and simultaneously merge with and into the Savings
Bank, pursuant to which the MHC will cease to exist and the shares of Savings
Bank Common Stock held by the MHC will be canceled, and (ii) an interim state
stock savings bank ("Interim B") will be formed as a wholly-owned subsidiary of
the Holding Company and will then merge with and into the Savings Bank. As a
result of the merger of Interim B with and into the Savings Bank, the Savings
Bank will become a wholly-owned subsidiary of the Holding Company and the
Public Savings Bank shares will be converted into the Exchange Shares pursuant
to the Exchange Ratio, which will result in the holders of such shares owning
in the aggregate approximately the same percentage of the Common Stock to be
outstanding upon the completion of the Conversion and Reorganization (i.e. the
Conversion Shares and the Exchange shares) as the percentage of Savings Bank
Common Stock owned by them in the aggregate immediately prior to consummation
of the Conversion and Reorganization without regard to (a) the payment of cash
in lieu of issuing fractional Exchange Shares and (b) any shares of Conversion
Stock purchased by the Savings Bank's shareholders in the Conversion Offerings
or the ESOP thereafter.
As part of the Conversion and Reorganization, the Holding Company is
offering Conversion Shares in the Subscription Offering to holders of
Subscription Rights in the following order of priority: (i) Eligible Account
Holders (depositors of the Savings Bank with $50.00 or more on deposit as of
June 30, 1996); (ii) the ESOP; and (iii) Supplemental Eligible Account Holders
(depositors of the Savings Bank with $50.00 or more on deposit as of
__________, 1997).
Concurrently with the Subscription Offering, any Conversion Shares not
subscribed for in the Subscription Offering may be offered for sale in the
Direct Community Offering to members of the general public, with priority being
given first to Public Shareholders (who are not Eligible Account Holders or
Supplemental Eligible Account Holders) and then to natural persons and trusts
of natural persons residing in the Local Community.
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<PAGE>
Conversion Shares not sold in the Subscription and Direct Community Offerings
may be offered in the Syndicated Community Offering. Regulations require that
the Direct Community and Syndicated Community Offerings be completed within 45
days after completion of the fully extended Subscription Offering unless
extended by the Savings Bank or the Holding Company with the approval of the
regulatory authorities. If the Syndicated Community Offering is determined not
to be feasible, the Board of Directors of the Savings Bank will consult with
the regulatory authorities to determine an appropriate alternative method for
selling the unsubscribed Conversion Shares. The Plan of Conversion provides
that the Conversion and Reorganization must be completed within 24 months after
the date of the approval of the Plan of Conversion by the members of the MHC.
No sales of Common Stock may be completed, either in the Subscription
Offering, Direct Community Offering or Syndicated Community Offerings unless
the Plan of Conversion is approved by the members of the MHC and the
shareholders of the Savings Bank.
The completion of the Conversion Offerings, however, is subject to market
conditions and other factors beyond the Savings Bank's control. No assurance
can be given as to the length of time after approval of the Plan of Conversion
at the Special Members Meeting and the Shareholders Meeting that will be
required to complete the Direct Community or Syndicated Community Offerings or
other sale of the Conversion Shares. If delays are experienced, significant
changes may occur in the estimated pro forma market value of the MHC and the
Savings Bank, as converted, together with corresponding changes in the net
proceeds realized by the Holding Company from the sale of the Conversion
Shares. If the Conversion and Reorganization is terminated, the Savings Bank
would be required to charge all Conversion and Reorganization expenses against
current income.
Orders for Conversion Shares will not be filled until at least 1,190,000
Conversion Shares have been subscribed for or sold and the PDOB and the FDIC
approve the final valuation and the Conversion and Reorganization closes. If
the Conversion and Reorganization is not completed within 45 days after the
last day of the fully extended Subscription Offering and the PDOB and the FDIC
consents to an extension of time to complete the Conversion and Reorganization,
subscribers will be given the right to increase, decrease or rescind their
subscriptions. Unless an affirmative indication is received from subscribers
that they wish to continue to subscribe for shares, the funds will be returned
promptly, together with accrued interest at the Savings Bank's passbook rate
from the date payment is received until the funds are returned to the
subscriber. If such period is not extended, or, in any event, if the Conversion
and Reorganization is not completed, all withdrawal authorizations will be
terminated and all funds held will be promptly returned together with accrued
interest at the Savings Bank's passbook rate from the date payment is received
until the Conversion and Reorganization is terminated.
Purposes of Conversion and Reorganization
The MHC, as a state-chartered mutual holding company, does not have
shareholders and has no authority to issue capital stock. As a result of the
Conversion and Reorganization, the Holding Company will be structured in the
form used by holding companies of commercial banks, most business entities and
a growing number of savings institutions. The holding company form of
organization will provide the Holding Company with the ability to diversify the
Holding Company's and the Savings Bank's business activities through
acquisition of, or mergers with, both stock savings institutions and commercial
banks, as well as other companies. Although there are no current arrangements,
understandings or agreements regarding any such opportunities, the Holding
Company will be in a position after the Conversion and Reorganization, subject
to regulatory limitations and the Holding Company's financial position, to take
advantage of any such opportunities that may arise.
The Conversion and Reorganization will be important to the future growth
and performance of the holding company organization by providing a larger
capital base to support the operations of the Savings Bank and Holding Company
and by enhancing their future access to capital markets, their ability to
diversify into other financial services related activities, and their ability
to provide services to the public. Although the Savings Bank currently has the
ability to raise additional capital through the sale of additional shares of
Savings Bank Common Stock, that ability is limited by the mutual holding
company structure which, among other things, requires that the MHC hold a
majority of the outstanding shares of Savings Bank Common Stock.
The Conversion and Reorganization also will result in an increase in the
number of shares of Common Stock to be outstanding as compared to the number of
outstanding shares of Public Savings Bank Shares, which
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will increase the likelihood of the development of an active and liquid trading
market for the Common Stock. See "MARKET FOR COMMON STOCK." In addition, the
Conversion and Reorganization permit the Holding Company to engage in stock
repurchases without adverse federal income tax consequences, unlike the Savings
Bank. Currently, the Holding Company has no plans or intentions to engage in
any stock repurchases, other than repurchases to acquire shares for the ESOP
(to the extent the ESOP is unable to purchase shares in the Conversion and
Reorganization) and repurchases to fund the 1998 MRP (assuming it is adopted by
shareholders of the Holding Company).
An additional benefit of the Conversion and Reorganization will be an
increase in the accumulated earnings and profits of the Savings Bank for
federal income tax purposes. When the Savings Bank (as a mutual institution)
transferred substantially all of its assets and liabilities to its stock
savings bank successor in the MHC Reorganization, its accumulated earnings and
profits tax attribute was not able to be transferred to the Savings Bank
because no tax-free reorganization was involved. Accordingly, this tax
attribute was retained by the Savings Bank when it converted its charter to
that of the MHC, even though the underlying retained earnings were transferred
to the Savings Bank. The Conversion and Reorganization has been structured to
re-unite the accumulated earnings and profits tax attribute retained by the MHC
in the MHC Reorganization with the retained earnings of the Savings Bank by
merging the MHC with and into the Savings Bank in a tax-free reorganization.
This transaction will increase the Savings Bank's ability to pay dividends to
the Holding Company in the future. See "DIVIDEND POLICY."
If the Savings Bank had undertaken a standard conversion involving the
formation of a stock holding company in 1995, applicable Pennsylvania law and
FDIC regulations would have required a greater amount of common stock to be
sold than the amount of net proceeds raised in the MHC Reorganization.
Management believed that it was advisable to profitably invest only the $5.58
million of net proceeds raised in the MHC Reorganization rather than the larger
amount of capital that would have been raised in a standard conversion. A
standard conversion in 1995 also would have immediately eliminated all aspects
of the mutual form of organization.
In light of the foregoing, the Boards of Directors of the Primary Parties
believe that the Conversion and Reorganization is in the best interests of the
MHC and the Savings Bank, their respective members and shareholders, and the
communities served by the Savings Bank.
Effects of Conversion and Reorganization on Depositors and Borrowers of the
Savings Bank
General. Prior to the Conversion and Reorganization, each depositor in the
Savings Bank has both a deposit account in the institution and a pro rata
interest in the net worth of the MHC based upon the balance in his or her
account. This interest may only be realized in the event of a liquidation of
the MHC. Furthermore, this interest is dependent upon the existence of the
depositor's account and has no tangible market value separate from such deposit
account. A depositor who reduces or closes his account receives a portion or
all of the balance in the account but nothing for his interest in the net worth
of the MHC, which is lost to the extent that the balance in the account is
reduced.
Consequently, the depositors of the Savings Bank have only an inchoate
ownership interest in the MHC, which has realizable value only in the unlikely
event that the MHC is liquidated. In such event, the depositors of record at
that time would share pro rata in any residual surplus and reserves of the MHC
after other claims are paid.
Upon consummation of the Conversion and Reorganization, permanent
nonwithdrawable capital stock will be created to represent the ownership of the
net worth of the Holding Company. The Common Stock is separate and apart from
deposit accounts and cannot be and is not insured by the FDIC or any other
governmental agency. Certificates are issued to evidence ownership of the
permanent stock. The share certificates are transferable, and therefore the
stock may be sold or traded if a purchaser is available with no effect on any
deposit and/or loan account(s) the seller may hold in the Savings Bank.
Continuity. The Conversion and Reorganization will not interrupt the
Savings Bank's normal business of accepting deposits and making loans. The
Savings Bank will continue to be subject to regulation by the FDIC and the
PDOB. After the Conversion and Reorganization, the Savings Bank will continue
to provide services for depositors and borrowers under current policies by its
present management and staff.
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The directors and officers of the Savings Bank at the time of the
Conversion and Reorganization will continue to serve as directors and officers
of the Savings Bank after the Conversion and Reorganization. The directors and
officers of the Holding Company consist of individuals currently serving as
directors and officers of the MHC and the Savings Bank, and they generally will
retain their positions in the Holding Company after the Conversion and
Reorganization.
Effect on Public Savings Bank shares. Under the Plan of Conversion, upon
consummation of the Conversion and Reorganization, the Public Savings Bank
Shares shall be converted into Exchange Shares based upon the Exchange Ratio
without any further action on the part of the holder thereof. Upon surrender of
the Public Savings Bank Shares, Common Stock will be issued in exchange for
such shares and the Public Shareholders will become shareholders of the Holding
Company. See "-- Delivery and Exchange of Stock Certificates."
Voting Rights. Presently, depositors of the Savings Bank are members of,
and have very limited voting rights in, the MHC. Upon completion of the
Conversion and Reorganization, the MHC will cease to exist and all voting
rights in the Savings Bank will be vested in the Holding Company as the sole
shareholder of the Savings Bank. Exclusive voting rights with respect to the
Holding Company will be vested in the holders of Common Stock. Depositors of
the Savings Bank will not have voting rights in the Holding Company after the
Conversion and Reorganization, except to the extent that they become
shareholders of the Holding Company.
Savings Accounts and Loans. The Savings Bank's savings accounts, account
balances and existing FDIC insurance coverage of savings accounts will not be
affected by the Conversion and Reorganization. Furthermore, the Conversion and
Reorganization will not affect the loan accounts, loan balances or obligations
of borrowers under their individual contractual arrangements with the Savings
Bank.
Tax Effects. The Savings Bank has received an opinion from Stevens & Lee
that the Conversion and Reorganization will constitute one or more
reorganizations under Section 368(a) of the Code. Among other things, the
opinion provides that: (i) the conversion of the MHC from a mutual holding
company to a state-chartered interim stock savings bank (i.e., Interim A) and
its simultaneous merger with and into the Savings Bank, with the Savings Bank as
the surviving entity, will qualify as one or more reorganizations within the
meaning of Section 368(a) of the Code, (ii) no gain or loss will be recognized
by the Savings Bank upon the receipt of the assets of the MHC in such merger,
(iii) the merger of Interim B with and into the Savings Bank, with the Savings
Bank as the surviving entity, will qualify as a reorganization within the
meaning of Section 368(a)(1)(A) and (a)(2)(E) of the Code, (iv) no gain or loss
will be recognized by Interim B upon the transfer of its assets to the Savings
Bank, (v) no gain or loss will be recognized by the Savings Bank upon the
receipt of the assets of Interim B, (vi) no gain or loss will be recognized by
the Holding Company upon the receipt of Savings Bank Common Stock solely in
exchange for Common Stock, (vii) no gain or loss will be recognized by the
Public Shareholders upon the receipt of Exchange Shares in exchange for their
Public Savings Bank Shares, (viii) the basis of the Exchange Shares to be
received by the Public Shareholders will be the same as the basis of the Public
Savings Bank Shares surrendered in exchange therefor, before giving effect to
any payment of cash in lieu of fractional Exchange Shares, (ix) the holding
period of the Exchange Shares to be received by the Public Shareholders will
include the holding period of the Public Savings Bank Shares, provided that the
Public Savings Bank Shares were held as a capital asset on the date of the
exchange, (x) no gain or loss will be recognized by the Holding Company upon the
sale of shares of Conversion Shares in the Conversion Offerings, (xi) the
Eligible Account Holders and Supplemental Eligible Account Holders will
recognize gain, if any, upon the issuance to them of withdrawable savings
accounts in the Savings Bank following the Conversion and Reorganization,
interests in the liquidation account and nontransferable subscription rights to
purchase Conversion Stock, but only to the extent of the value, if any, of the
subscription rights, and (xii) the tax basis to the holders of Conversion Shares
purchased in the Conversion Offerings will be the amount paid therefor, and the
holding period for the Conversion Shares will begin on the date of consummation
of the Conversion Offerings, if purchased through the exercise of Subscription
Rights, and on the day after the date of purchase, if purchased in the Community
Offering or the Syndicated Community Offering. Unlike a private letter ruling
issued by the IRS, an opinion of counsel is not binding on the IRS and the IRS
could disagree with the conclusions reached therein. In the event of such
disagreement, no assurance can be given that the conclusions reached in an
opinion of counsel would be sustained by a court if contested by the IRS.
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Based upon past rulings issued by the IRS, the opinion provides that the
receipt of Subscription Rights by Eligible Account Holders and Supplemental
Eligible Account Holders under the Plan of Conversion will be taxable to the
extent, if any, that the Subscription Rights are deemed to have a fair market
value. RP Financial, a financial consulting firm retained by the Savings Bank,
whose findings are not binding on the IRS, has issued a letter indicating that
the Subscription Rights do not have any value, based on the fact that such
rights are acquired by the recipients without cost, are nontransferable and of
short duration and afford the recipients the right only to purchase shares of
the Common Stock at a price equal to its estimated fair market value, which
will be the same price paid by purchasers in the Direct Community Offering for
unsubscribed shares of Common Stock. The Savings Bank could also recognize a
gain on the distribution of such Subscription Rights. Eligible Account Holders
and Supplemental Eligible Account Holders are encouraged to consult with their
own tax advisors as to the tax consequences in the event the Subscription
Rights are deemed to have a fair market value.
The Savings Bank has also received an opinion from Stevens & Lee, that,
assuming the Conversion and Reorganization do not result in any federal
income tax liability to the Savings Bank, its account holders, or the Holding
Company, implementation of the Plan of Conversion, alone, will not result in any
Pennsylvania tax liability to such entities or persons.
The opinion of Stevens & Lee and the letter from RP Financial are filed as
exhibits to the Registration Statement. See "ADDITIONAL INFORMATION."
PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS
REGARDING THE TAX CONSEQUENCES OF THE CONVERSION AND REORGANIZATION PARTICULAR
TO THEM.
Liquidation Account. In the unlikely event of a complete liquidation of
the MHC, each depositor of the Savings Bank would receive his or her pro rata
share of any assets of the MHC remaining after payment of claims of all
creditors. Each depositor's pro rata share of such remaining assets would be in
the same proportion as the value of his or her deposit account was to the total
value of all deposit accounts in the Savings Bank at the time of liquidation.
After the Conversion and Reorganization, each depositor, in the event of a
complete liquidation of the Savings Bank, would have a claim as a creditor of
the same general priority as the claim of all other general creditors of the
Savings Bank. However, except as described below, his or her claim would be
solely in the amount of the balance in his or her deposit account plus accrued
interest. Each shareholder would not have an interest in the value or assets of
the Savings Bank or the Holding Company above that amount.
The Plan of Conversion provides for the establishment upon the completion
of the Conversion and Reorganization, of a special "liquidation account" for
the benefit of Eligible Account Holders and Supplemental Eligible Account
Holders in an amount equal to the amount of the greater of (1) the Savings
Bank's retained earnings of $8.74 million at March 31, 1995, the date of the
latest statement of financial condition contained in the final offering
circular utilized in the MHC Reorganization, or (2) 51.5% of the Savings Bank's
total shareholders' equity as reflected in its latest statement of financial
condition contained in the final Prospectus utilized in the Conversion
Offerings. As of the date of this Prospectus, the initial balance of the
liquidation account would be $8.74 million. Each Eligible Account Holder and
Supplemental Eligible Account Holder, if he or she were to continue to maintain
his deposit account at the Savings Bank, would be entitled, upon a complete
liquidation of the Savings Bank after the Conversion and Reorganization to an
interest in the liquidation account prior to any payment to the Holding Company
as the sole shareholder of the Savings Bank. Each Eligible Account Holder and
Supplemental Eligible Account Holder would have an initial interest in such
liquidation account for each deposit account, including passbook accounts,
transaction accounts such as checking accounts, money market deposit accounts
and certificates of deposit, held in the Savings Bank at the close of business
on _____________________ or December 31, 1997, as the case may be. Each
Eligible Account Holder and Supplemental Eligible Account Holder will have a
pro rata interest in the total liquidation account for each of his or her
deposit accounts based on the proportion that the balance of each such deposit
account on the Eligibility Record Date or the Supplemental Eligibility Record
Date, as the case may be, bore to the balance of all deposit accounts in the
Savings Bank on such date.
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If, however, on any December 31 annual closing date of the Savings Bank,
commencing December 31, 1997, the amount in any deposit account is less than
the amount in such deposit account on ____________________ or _____________, as
the case may be, or any other annual closing date, then the interest in the
liquidation account relating to such deposit account would be reduced by the
proportion of any such reduction, and such interest will cease to exist if such
deposit account is closed. In addition, no interest in the liquidation account
would ever be increased despite any subsequent increase in the related deposit
account. Any assets remaining after the above liquidation rights of Eligible
Account Holders and Supplemental Eligible Account Holders are satisfied would
be distributed to the Holding Company as the sole shareholder of the Savings
Bank.
The Subscription, Direct Community and Syndicated Community Offerings
Subscription Offering. In accordance with the Plan of Conversion,
nontransferable Subscription Rights to purchase the Conversion Shares have been
issued to persons and entities entitled to purchase the Conversion Shares in
the Subscription Offering. The amount of Conversion Shares that these parties
may purchase will be subject to the availability of the Conversion Shares for
purchase under the categories set forth in the Plan of Conversion. Subscription
priorities have been established for the allocation of stock to the extent that
the Conversion Shares are available. These priorities are as follows:
Category 1: Eligible Account Holders. Each depositor with $50.00 or more
on deposit at the Savings Bank as of June 30, 1996 will receive nontransferable
Subscription Rights to subscribe for up to the greater of 1% of the shares of
Conversion Stock issued in the Conversion and Reorganization, one-tenth of one
percent of the total offering of Common Stock 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 qualifying deposits of the Eligible Account Holder and the
denominator is the total amount of qualifying deposits of all Eligible Account
Holders. If the exercise of Subscription Rights in this category results in an
oversubscription, shares of Common Stock will be allocated among subscribing
Eligible Account Holders so as to permit each Eligible Account Holder, to the
extent possible, to purchase a number of shares sufficient to make such
person's total allocation equal 100 shares or the number of shares actually
subscribed for, whichever is less. Thereafter, unallocated shares will be
allocated among subscribing Eligible Account Holders proportionately, based on
the amount of their respective qualifying deposits as compared to total
qualifying deposits of all Eligible Account Holders. Subscription Rights
received by officers and directors in this category based on their increased
deposits in the Savings Bank in the one year period preceding June 30, 1996 are
subordinated to the Subscription Rights of other Eligible Account Holders.
Category 2: ESOP. The Plan of Conversion provides that the ESOP shall
receive nontransferable Subscription Rights to purchase up to 8% of the shares
of Common Stock issued in the Conversion and Reorganization. The ESOP intends
to purchase 8% of the shares of Common Stock issued in the Conversion and
Reorganization.
Category 3: Supplemental Eligible Account Holders. Each depositor with
$50.00 or more on deposit as of December 31, 1997 will receive nontransferable
Subscription Rights to subscribe for up to the greater of 1% of the shares of
Conversion Stock issued in the Conversion and Reorganization, one-tenth of one
percent of the total offering of Common Stock 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 qualifying deposits of the Supplemental Eligible Account Holder and
the denominator is the total amount of qualifying deposits of all Supplemental
Eligible Account Holders. If the exercise of Subscription Rights in this
category results in an oversubscription, shares of Common Stock will be
allocated among subscribing Supplemental Eligible Account Holders so as to
permit each Supplemental Eligible Account Holder, to the extent possible, to
purchase a number of shares sufficient to make his total allocation equal 100
shares or the number of shares actually subscribed for, whichever is less.
Thereafter, unallocated shares will be allocated among subscribing Supplemental
Eligible Account Holders proportionately, based on the amount of their
respective qualifying deposits as compared to total qualifying deposits of all
Supplemental Eligible Account Holders.
Subscription Rights are nontransferable. Persons selling or otherwise
transferring their rights to subscribe for Common Stock in the Subscription
Offering or subscribing for Common Stock on behalf of
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another person will be subject to forfeiture of such rights and possible
further sanctions and penalties imposed by the FDIC or another agency of the
U.S. Government. Each person exercising Subscription Rights will be required to
certify that he or she is purchasing such shares solely for his or her own
account and that he or she has no agreement or understanding with any other
person for the sale or transfer of such shares. ONCE TENDERED, SUBSCRIPTION
ORDERS CANNOT BE REVOKED WITHOUT THE CONSENT OF THE SAVINGS BANK AND THE
HOLDING COMPANY.
The Holding Company and the Savings Bank will make reasonable attempts to
provide a Prospectus and related offering materials to holders of Subscription
Rights. However, the Subscription Offering and all Subscription Rights under
the Plan of Conversion will expire at __________, Eastern Time, on the
Expiration Date, whether or not the Savings Bank has been able to locate each
person entitled to such Subscription Rights. Orders for Common Stock in the
Subscription Offering physically received by the Savings Bank after the
Expiration Date will not be accepted. The Subscription Offering may be extended
by the Holding Company and the Savings Bank up to __________, 1998 without
regulatory approval. FDIC regulations require that the Holding Company complete
the sale of Conversion Shares within 45 days after the close of the
Subscription Offering. If the Direct Community Offering and the Syndicated
Community Offerings are not completed by __________, 1998 (or __________, 1998,
if the Subscription Offering is fully extended), all funds received will be
promptly returned with interest at the Savings Bank's passbook rate and all
withdrawal authorizations will be canceled or, if regulatory approval of an
extension of the time period has been granted, all subscribers and purchasers
will be notified of such extension and its duration and will be given the right
to increase, decrease or rescind their orders. If an affirmative response to
any resolicitation is not received by the Holding Company from a subscriber,
the subscriber's order will be rescinded and all funds received will be
promptly returned with interest (or withdrawal authorizations will be
canceled). No single extension can exceed 90 days.
Direct Community Offering. Any shares of Common Stock that remain
unsubscribed for in the Subscription Offering will be offered by the Holding
Company to certain members of the general public in a Direct Community
Offering, with preference given first to Public Shareholders (who are not
eligible to subscribe for Conversion Shares in the Subscription Offering) and
then to natural persons and trusts of natural persons residing in the Local
Community. Purchasers in the Direct Community Offering are eligible to purchase
up to 1% of the shares of Conversion Stock issued in the Conversion and
Reorganization. In the event an insufficient number of shares are available to
fill orders in the Direct Community Offering, the available shares will be
allocated on a pro rata basis determined by the amount of the respective
orders. The Direct Community Offering is expected to commence concurrently with
the commencement of the Subscription Offering. The Direct Community Offering
may terminate on or at any time subsequent to the Expiration Date, but no later
than 45 days after the close of the Subscription Offering, unless extended by
the Holding Company and the Savings Bank, with approval of the PDOB and the
FDIC. The right of any person to purchase shares in the Direct Community
Offering is subject to the absolute right of the Holding Company and the
Savings Bank to accept or reject such purchases in whole or in part. If an
order is rejected in part, the purchaser does not have the right to cancel the
remainder of the order. The Holding Company presently intends to terminate the
Direct Community Offering as soon as it has received orders for all shares
available for purchase in the Conversion and Reorganization.
If all of the Common Stock offered in the Subscription Offering is
subscribed for, no Common Stock will be available for purchase in the Direct
Community Offering.
Syndicated Community Offering. The Plan of Conversion provides that, if
necessary, all shares of Common Stock not purchased in the Subscription
Offering and Direct Community Offering, if any, may be offered for sale to
certain members of the general public in a Syndicated Community Offering
through a syndicate of registered broker-dealers to be managed by Webb acting
as agent of the Holding Company. The Holding Company and the Savings Bank have
the right to reject orders, in whole or part, in their sole discretion in the
Syndicated Community Offering. Neither Webb nor any registered broker-dealer
shall have any obligation to take or purchase any shares of the Common Stock in
the Syndicated Community Offering; however, Webb has agreed to use its best
efforts in the sale of shares in the Syndicated Community Offering.
Conversion Shares sold in the Syndicated Community Offering also will be
sold at the Purchase Price. See "-- Stock Pricing, Exchange Ratio and Number of
Shares to be Issued." No person will be permitted to
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subscribe in the Syndicated Offering for Conversion Shares that exceeds 1% of
the Conversion Shares issued in the Conversion and Reorganization. See "-- Plan
of Distribution for the Subscription, Direct Community and Syndicated Community
Offerings" for a description of the commission to be paid to the selected
dealers and to Webb.
Webb may enter into agreements with selected dealers to assist in the sale
of shares in the Syndicated Community Offering. During the Syndicated Community
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. When and if Webb and the
Holding Company believe that enough indications of interest and orders have
been received in the Subscription Offering, the Direct Community Offering and
the Syndicated Community Offering to consummate the Conversion and
Reorganization, Webb 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 confirmations to such
customers on the next business day after the Order Date. Selected dealers may
debit the accounts of their customers on a date which will be three business
days from the Order Date ("Settlement 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 Settlement Date. On the
Settlement 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 by the FDIC up to the applicable $100,000 legal
limit. After payment has been received by the Holding Company from selected
dealers, funds will earn interest at the Savings Bank's passbook rate until the
completion of the Conversion Offerings. At the completion of the Conversion and
Reorganization, the funds received in the Conversion Offerings will be used to
purchase the shares of Common Stock ordered. The shares issued in the
Conversion and Reorganization cannot and will not be insured by the FDIC or any
other government agency. In the event the Conversion and Reorganization 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 accounts.
The Syndicated Community Offering may terminate on or at any time
subsequent to the Expiration Date, but no later than 45 days after the close of
the Subscription Offering, unless extended by the Holding Company and the
Savings Bank, with approval of the PDOB and the FDIC.
In the event the Savings Bank is unable to find purchasers from the
general public for all unsubscribed shares, other purchase arrangements will be
made by the Board of Directors of the Savings Bank, if feasible. Such other
arrangements will be subject to the approval of the PDOB and the FDIC. The PDOB
and the FDIC may grant one or more extensions of the offering period, provided
that (i) no single extension exceeds 90 days, (ii) subscribers are given the
right to increase, decrease or rescind their subscriptions during the extension
period, and (iii) the extensions do not go more than two years beyond the date
on which the members approved the Plan of Conversion. If the Conversion and
Reorganization is not completed within 45 days after the close of the
Subscription Offering, either all funds received will be returned with interest
(and withdrawal authorizations canceled) or, if the PDOB and the FDIC has
granted an extension of time, all subscribers will be given the right to
increase, decrease or rescind their subscriptions at any time prior to 20 days
before the end of the extension period. If an extension of time is obtained,
all subscribers will be notified of such extension and of their rights to
modify their orders. If an affirmative response to any resolicitation is not
received by the Holding Company from a subscriber, the subscriber's order will
be rescinded and all funds received will be promptly returned with interest (or
withdrawal authorizations will be canceled).
Persons in Non-Qualified States. The Holding Company and the Savings 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 stock pursuant
to the Plan of Conversion reside. However, the Holding Company and the Savings
Bank are not required to offer stock in the Subscription Offering to any person
who resides in a foreign country or resides in a state of the United States
with respect to which (i) a small number of persons otherwise eligible to
subscribe for shares of Common Stock reside in such state or (ii) the Holding
Company or the Savings Bank determines that compliance with the securities laws
of such state would be impracticable for reasons of cost or otherwise,
including but not limited to a request or requirement that the Holding Company
and the Savings Bank or their officers, directors or trustees register as a
broker, dealer, salesman or selling agent, under the securities laws of such
state, or a request or requirement to register or otherwise qualify the
Subscription Rights or Common Stock
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for sale or submit any filing with respect thereto in such state. Where the
number of persons eligible to subscribe for shares in one state is small, the
Holding Company and the Savings Bank will base their decision as to whether or
not to offer the Common Stock in such state on a number of factors, including
the size of accounts held by account holders in the state, the cost of
reviewing the registration and qualification requirements of the state (and of
actually registering or qualifying the shares) or the need to register the
Holding Company, its officers, directors or employees as brokers, dealers or
salesmen.
The Exchange
General. The regulations and policies governing mutual holding companies
provide that in a conversion of a mutual holding company to the stock holding
company form of organization, the Public Shareholders will be entitled to
exchange their Public Savings Bank Shares for Exchange Shares, provided the
Savings Bank and the MHC demonstrate to the satisfaction of the Department and
the FDIC that the basis for the exchange is fair and reasonable. The Boards of
Directors of the Savings Bank and the Holding Company have determined that each
Public Savings Bank Share will, at the Effective Time of the Conversion and
Reorganization, be converted into and become the right to receive a number of
Exchange Shares determined pursuant to the Exchange Ratio that ensures that
after the Conversion and Reorganization and before giving effect to purchases
of Conversion Shares by Public Shareholders in the Conversion Offerings, and
receipt by Public Shareholders of cash in lieu of fractional shares, Public
Shareholders will own approximately the same aggregate percentage of the
Holding Company Common Stock as they own of the Savings Bank Common Stock
immediately prior to the Effective Time adjusted downward to reflect the
aggregate amount of Savings Bank Common Stock dividends waived by the MHC and
the amount of assets, other than Savings Bank Common Stock, held by the MHC.
The MHC had assets of $247,000. No Savings Bank Common Stock dividends were
waived.
The adjustments described above decrease the Public Shareholders'
ownership interest to 48.06% from 48.5% based on the following calculation:
Savings Bank Shareholders' Equity at 12/31/97 X Public Shareholders' 48.5%
Ownership = 48.5%
Savings Bank Shareholders' Equity at 12/31/97
The adjustments described above would further adjust the Public
Shareholders' ownership interest as follows:
48.5% x Pro Forma Market Value of the Holding Company-Market Value of Assets of
MHC Other than Savings Bank Common Stock = 48.06%
Pro Forma Market Value of the Holding Company
To determine the Exchange Ratio, the adjusted Public Shareholders'
ownership interest was multiplied by the number of shares to be issued in the
Conversion and Reorganization, and the result was divided by the number of
Savings Bank Public Shares outstanding (579,390) shares as of December 31,
1997. Immediately prior to consummation of the Conversion and Reorganization,
the Savings Bank will recalculate the Public Shareholders' ownership interest
pursuant to the above formula, which will take into account changes in
shareholders' equity and percentage ownership at such date.
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The following table sets forth, based upon the minimum, midpoint, maximum
and 15% above the maximum of the Estimated Valuation Range, the following: (i)
the total number of Conversion Shares and Exchange Shares to be issued in the
Conversion and Reorganization, (ii) the percentage of the total Common Stock
represented by the Conversion Shares and the Exchange Shares, and (iii) the
Exchange Ratio. The table assumes that there is no cash paid in lieu of issuing
fractional Exchange Shares.
<TABLE>
<CAPTION>
Conversion Shares to be Exchange Shares to be Total Shares of
Issued (1) Issued (1) Common Stock to Exchange
Amount Percent Amount Percent be Outstanding Ratio
----------- ----------- ----------- ----------- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Minimum ................... 1,190,000 51.94% 1,101,131 48.06% 2,291,131 1.9005
Midpoint .................. 1,400,000 51.94 1,295,417 48.06 2,695,417 2.2358
Maximum ................... 1,610,000 51.94 1,489,728 48.06 3,099,728 2.5712
15% above maximum ......... 1,851,500 51.94 1,713,198 48.06 3,564,698 2.9569
</TABLE>
(1) Assumes that outstanding options to purchase 35,859 shares of Savings Bank
Common Stock at December 31, 1997 are not exercised prior to consummation
of the Conversion and Reorganization.
The actual Exchange Ratio is not dependent on the market value of the
Public Savings Bank Shares. It will be determined based upon the number of
Conversion Shares issued in the Conversion Offerings and the Public
Shareholders' percentage ownership in the Savings Bank prior to consummation of
the Conversion and Reorganization adjusted downward to take into account the
effect of the aggregate amount of assets of the MHC other than Savings Bank
Common Stock. At the minimum, midpoint and maximum of the Valuation Price
Range, one Public Savings Bank Share will be exchanged for 1.9005, 2.2358 and
2.5712 shares of Holding Company Common Stock, respectively (which have
calculated equivalent estimated value of $19.05, $22.36 and $25.71 based on the
Purchase Price of Conversion Shares in the Conversion Offerings and the
aforementioned Exchange Ratios). However, there can be no assurance as to the
actual market value of a share of Holding Company Common Stock after the
Conversion and Reorganization or that such shares can be sold at or above the
$10.00 per share Purchase Price. Any increase or decrease in the number of
Conversion Shares will result in a corresponding change in the number of
Exchange Shares, so that upon consummation of the Conversion and
Reorganization, the Conversion Shares and the Exchange Shares will represent
approximately 51.94% and 48.06%, respectively, of the Holding Company's total
outstanding shares of Common Stock. Each holder of a certificate or
certificates evidencing issued and outstanding Public Savings Bank Shares will
be entitled to receive in exchange therefor a certificate or certificates
representing the number of full shares of Common Stock for which the Public
Savings Bank Shares will have been converted based on the Exchange Ratio. To
effect the Exchange, a duly appointed agent of the Savings Bank will promptly
mail to each such holder of record of an outstanding certificate which
immediately prior to the consummation of the Conversion and Reorganization
evidenced Public Savings Bank Shares, a letter of transmittal (which will
specify that delivery shall be effected, and risk of loss and title to such
certificate shall pass, only upon delivery of such certificate to the Exchange
Agent) advising such holder of the terms of the Exchange effected by the
Conversion and Reorganization and of the procedure for surrendering to the
Exchange Agent such certificate in exchange for a certificate or certificates
evidencing Common Stock. Public Shareholders should not forward to the Savings
Bank or the Exchange Agent certificates until they have received the
transmittal letter.
Plan of Distribution for the Subscription, Direct Community and Syndicated
Community Offerings
The Primary Parties have retained Webb to consult with and to advise the
Savings Bank and the Holding Company, and to assist the Holding Company on a
best efforts basis, in the distribution of the Conversion Shares in the
Subscription Offering and Direct Community Offering. The services that Webb
will provide include, but are not limited to (i) training the employees of the
Savings Bank who will perform certain ministerial functions in the Subscription
Offering and the Direct Community Offering regarding the mechanics and
regulatory requirements of the stock offering process, (ii) managing the Stock
Information Center by assisting interested stock subscribers and by keeping
records of all stock orders, (iii) preparing marketing materials, and (iv)
assisting in the solicitation of proxies from the MHC's members and the
shareholders of the Savings Bank for use at the Special Members' Meeting and
the Shareholders' Meeting, respectively. For its services, Webb will receive a
management fee of $25,000 and a success fee of 1.5% of the aggregate Purchase
Price of the Conversion Shares sold in the Subscription Offering and the Direct
Community Offering, excluding shares purchased by the ESOP
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and officers, directors and employees of the Savings Bank, or members of their
immediate families. The management fee shall be applied to the success fee and
the success fee shall not exceed $100,000. The Primary Parties have agreed to
reimburse Webb for its out-of-pocket expenses up to $7,500 and its legal fees
up to $30,000. The Primary Parties have also agreed to indemnify Webb against
certain claims or liabilities, including certain liabilities under the
Securities Act, and will contribute to payments Webb may be required to make in
connection with any such claims or liabilities.
Description of Sales Activities
The Common Stock will be offered in the Subscription Offering and Direct
Community Offering principally by the distribution of this Prospectus and
through activities conducted at the Savings Bank's Stock Information Center at
its main office facility. The Stock Information Center is expected to operate
during normal business hours throughout the Subscription Offering and Direct
Community Offering. It is expected that at any particular time one or more Webb
employees will be working at the Stock Information Center. Stock Information
Center personnel will be responsible for mailing materials relating to the
Conversion Offerings, responding to questions regarding the Conversion and
Reorganization and the Conversion Offerings and processing stock orders.
Sales of Common Stock will be made by registered representatives
affiliated with Webb. The management and employees of the Savings Bank may
participate in the Conversion Offerings in clerical capacities, providing
administrative support in effecting sales transactions or, when permitted by
state securities laws, answering questions of a mechanical nature relating to
the proper execution of the Order Form. Management of the Savings Bank may
answer questions regarding the business of the Savings Bank when permitted by
state securities laws. Other questions of prospective purchasers, including
questions as to the advisability or nature of the investment, will be directed
to registered representatives. The management and employees of the Holding
Company and the Savings Bank have been instructed not to solicit offers to
purchase Common Stock or provide advice regarding the purchase of Common Stock.
No officer, director or employee of the Savings Bank or the Holding
Company will be compensated, directly or indirectly, for any activities in
connection with the offer or sale of securities issued in the Conversion and
Reorganization.
None of the Savings Bank's personnel participating in the Conversion
Offerings is registered or licensed
as a broker or dealer or an agent of a broker or dealer. The Savings Bank's
personnel will assist in the above-described sales activities pursuant to an
exemption from registration as a broker or dealer provided by Rule 3a4-1
promulgated under the Exchange Act. Rule 3a4-1 generally provides that an
"associated person of an issuer" of securities shall not be deemed a broker
solely by reason of participation in the sale of securities of such issuer if
the associated person meets certain conditions. Such conditions include, but
are not limited to, that the associated person participating in the sale of an
issuer's securities not be compensated in connection therewith at the time of
participation, that such person not be associated with a broker or dealer and
that such person observe certain limitations on his participation in the sale
of securities. For purposes of this exemption, "associated person of an issuer"
is defined to include any person who is a director, officer or employee of the
issuer or a company that controls, is controlled by or is under common control
with the issuer.
Procedure for Purchasing shares in the Subscription and Direct Community
Offerings
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 Savings Bank will
accept for processing only orders submitted on original Order Forms. The
Savings Bank is not obligated to accept orders submitted on photocopied or
telecopied Order Forms. Orders cannot and will not be accepted without the
execution of the Certification appearing on the reverse side of the Order Form.
To purchase shares in the Subscription Offering, an executed Order Form
with the required full payment for each share subscribed for, or with
appropriate authorization for withdrawal of full payment from the subscriber's
deposit account with the Savings Bank (which may be given by completing the
appropriate blanks in
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the Order Form), must be received by the Savings Bank by __________, Eastern
Time, on the Expiration Date. Order Forms that are not received by such time or
are executed defectively or are received without full payment (or without
appropriate withdrawal instructions) are not required to be accepted. The
Holding Company and the Savings Bank have the right to waive or permit the
correction of incomplete or improperly executed Order Forms, but do not
represent that they will do so. Pursuant to the Plan of Conversion, the
interpretation by the Holding Company and the Savings Bank of the terms and
conditions of the Plan of Conversion and of the Order Form will be final. In
order to purchase shares in the Direct Community Offering, the Order Form,
accompanied by the required payment for each share subscribed for, must be
received by the Savings Bank prior to the time the Direct Community Offering
terminates, which may be on or at any time subsequent to the Expiration Date.
Once received, an executed Order Form may not be modified, amended or rescinded
without the consent of the Savings Bank unless the Conversion and
Reorganization has not been completed within 45 days after the end of the
Subscription Offering, unless such period has been extended.
In order to ensure that Eligible Account Holders, and Supplemental
Eligible Account Holders are properly identified as to their stock purchase
priorities, depositors as of the Eligibility Record Date (June 30, 1996) and/or
the Supplemental Eligibility Record Date (_____________________, 1997) must
list all accounts on the Order Form giving all names in each account, the
account number and the approximate account balance as of such date.
Full payment for subscriptions may be made (i) in cash if delivered in
person at the Stock Information Center, (ii) by check, bank draft, or money
order, or (iii) by authorization of withdrawal from deposit accounts maintained
with the Savings Bank. Appropriate means by which such withdrawals may be
authorized are provided on the Order Form. No wire transfers will be accepted.
Interest will be paid on payments made by cash, check, bank draft or money
order at the Savings Bank's passbook rate from the date payment is received
until the completion or termination of the Conversion and Reorganization. If
payment is made by authorization of withdrawal from deposit accounts, the funds
authorized to be withdrawn from a deposit account will continue to accrue
interest at the contractual rates until completion or termination of the
Conversion and Reorganization (unless the certificate matures after the date of
receipt of the Order Form but prior to closing, in which case funds will earn
interest at the passbook rate from the date of maturity until consummation of
the Conversion and Reorganization), but a hold will be placed on such funds,
thereby making them unavailable to the depositor until completion or
termination of the Conversion and Reorganization. At the completion of the
Conversion and Reorganization, the funds received in the Conversion Offerings
will be used to purchase the shares of Common Stock ordered. The shares of
Common Stock issued in the Conversion and Reorganization cannot and will not be
insured by the FDIC or any other government agency. If the Conversion and
Reorganization is not consummated for any reason, all funds submitted will be
promptly refunded with interest as described above.
If a subscriber authorizes the Savings Bank to withdraw the amount of the
aggregate Purchase Price from his or her deposit account, the Savings Bank will
do so as of the effective date of Conversion and Reorganization, though the
account must contain the full amount necessary for payment at the time the
subscription order is received. The Savings Bank will waive any applicable
penalties for early withdrawal from certificate accounts. 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 certificate will be canceled at the time of the
withdrawal, without penalty, and the remaining balance will earn interest at
the Savings Bank's passbook rate.
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 at the Purchase Price upon consummation of the Conversion and
Reorganization, provided that there is in force from the time of its
subscription until such time, a loan commitment from an unrelated financial
institution or the Holding Company to lend to the ESOP, at such time, the
aggregate Purchase Price of the shares for which it subscribed.
IRAs maintained in the Savings Bank do not permit investment in the Common
Stock. A depositor interested in using his or her IRA funds to purchase Common
Stock must do so through a self-directed IRA. Since the Savings Bank does not
offer such accounts, it will allow such 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 Common
Stock in the Conversion Offerings. There will be no early withdrawal or IRS
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interest penalties for such transfers. The new trustee would hold the Common
Stock in a self-directed account in the same manner as the Savings 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 Savings Bank IRA to
purchase Common Stock should contact the Stock Information Center so that the
necessary forms may be forwarded for execution and returned prior to the
Expiration Date. In addition, the provisions of ERISA and IRS regulations
require that officers, directors and 10% shareholders who use self-directed IRA
funds to purchase shares of Common Stock in the Subscription Offering, make
such purchases for the exclusive benefit of IRAs.
Stock Pricing, Exchange Ratio and Number of Shares to be Issued
The Plan of Conversion requires that the purchase price of the Conversion
Shares must be based on the appraised pro forma market value of the Conversion
Shares, as determined on the basis of an independent valuation. The Primary
Parties have retained RP Financial to make such valuation. For its services in
making the Appraisal and any expenses incurred in connection therewith, RP
Financial will receive a maximum fee of $20,000 plus out of pocket expenses,
together with a fee of no greater that $7,500 plus out of pocket expenses for
the preparation of a business plan and other services performed in connection
with the Holding Company's application to the FDIC. The Primary Parties have
agreed to indemnify RP Financial and its employees and affiliates against
certain losses (including any losses in connection with claims under the
federal securities laws) arising out of its services as appraiser, except where
RP Financial's liability results from its negligence or bad faith.
The Appraisal has been prepared by RP Financial in reliance upon the
information contained in this Prospectus, including the Consolidated Financial
Statements. RP Financial also considered the following factors, among others:
the present and projected operating results and financial condition of the
Primary Parties and the economic and demographic conditions in the Savings
Bank's existing market area; certain historical, financial and other
information relating to the Savings Bank; a comparative evaluation of the
operating and financial statistics of the Savings Bank with those of other
similarly situated publicly-traded companies located in Pennsylvania and other
regions of the United States; the aggregate size of the offering of the
Conversion Shares; the impact of the Conversion and Reorganization on the
Savings Bank's capital and earnings potential; the proposed dividend policy of
the Holding Company and the Savings Bank; and the trading market for the
Savings Bank Common Stock and securities of comparable companies and general
conditions in the market for such securities.
On the basis of the foregoing, RP Financial has advised the Primary
Parties in its opinion that the estimated pro forma market value of the MHC and
the Savings Bank, as converted, was $26,954,178 as of February 13, 1998.
Because the holders of the Public Savings Bank Shares will continue to hold the
same aggregate percentage ownership interest in the Holding Company as they
currently hold in the Savings Bank (before giving effect to the payment of cash
in lieu of issuing fractional Exchange Shares and any Conversion Shares
purchased by the Public Shareholders in the Conversion Offerings), the
Appraisal was multiplied by 51.94% which represents, the MHC's 51.5% interest
in the Savings Bank, adjusted for assets held by the MHC. The resulting amount
represents the midpoint of the valuation ($14.00 million), and the minimum and
maximum of the valuation were set at 15% below and above the midpoint,
respectively, resulting in a range of $11.9 million to $16.10 million. The
Boards of Directors of the Primary Parties determined that the Conversion
Shares would be sold at $10.00 per share, resulting in a range of 1,190,000 to
1,610,000 Conversion Shares being offered. Upon consummation of the Conversion
and Reorganization, the Conversion Shares and the Exchange Shares will
represent approximately 51.94% and 48.06%, respectively, of the Holding
Company's total outstanding shares. The Boards of Directors of the Primary
Parties reviewed RP Financial's appraisal report, including the methodology and
the assumptions used by RP Financial, and determined that the Estimated
Valuation Range was reasonable and adequate. The Boards of Directors of the
Primary Parties also established the formula for determining the Exchange
Ratio. Based upon such formula and the Estimated Valuation Range, the Exchange
Ratio ranged from a minimum of 1.9005 to a maximum of 2.5712 Exchange Shares
for each Public Savings Bank Share, with a midpoint of 2.2358. Based upon these
Exchange Ratios, the Holding Company expects to issue between 1,101,131 and
1,489,728 shares of Exchange Shares to the holders of Public Savings Bank
Shares outstanding immediately prior to the consummation of the Conversion and
Reorganization. The Estimated Valuation Range
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and the Exchange Ratio may be amended with the approval of the PDOB and the
FDIC, if required, or if necessitated by subsequent developments in the
financial condition of any of the Primary Parties or market conditions
generally. If the Appraisal is updated to below $11.90 million or above $18.51
million (the maximum of the Estimated Valuation Range, as adjusted by 15%),
such Appraisal will be filed with the SEC by post-effective amendment.
Based upon current market and financial conditions and recent practices
and policies of the PDOB and the FDIC, in the event the Holding Company
receives orders for Conversion Shares in excess of $16.10 million (the maximum
of the Estimated Valuation Range) and up to $18.51 million (the maximum of the
Estimated Valuation Range, as adjusted by 15%), the Holding Company may be
required by the PDOB and the FDIC to accept all such orders. No assurances,
however, can be made that the Holding Company will receive orders for
Conversion Shares in excess of the maximum of the Estimated Valuation Range or
that, if such orders are received, that all such orders will be accepted
because the Holding Company's first valuation and number of shares to be issued
are subject to the receipt of an updated appraisal from RP Financial that
reflects such an increase in the valuation and the approval of such increase by
the PDOB and the FDIC. There is no obligation or understanding on the part of
management to take and/or pay for any shares of Conversion Shares to complete
the Conversion Offerings.
RP Financial's valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing Conversion
Shares. RP Financial did not independently verify the Savings Bank's
Consolidated Financial Statements and other information provided by the Savings
Bank and the MHC, nor did RP Financial value independently the assets or
liabilities of the Savings Bank. The valuation considers the Savings Bank and
the MHC as going concerns and should not be considered as an indication of the
liquidation value of the Savings Bank and the MHC. 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 purchasing Conversion Shares or receiving Exchange Shares
in the Conversion and Reorganization will thereafter be able to sell such
shares at prices at or above the Purchase Price or in the range of the
foregoing valuation of the pro forma market value thereof.
No sale of Conversion Shares or issuance of Exchange Shares may be
consummated unless prior to such consummation RP Financial confirms that
nothing of a material nature has occurred that, taking into account all
relevant factors, would cause it to conclude that the Purchase Price is
materially incompatible with the estimate of the pro forma market value of a
share of Common Stock upon consummation of the Conversion and Reorganization.
If such is not the case, a new Estimated Valuation Range may be set, a new
Exchange Ratio may be determined based upon the new Estimated Valuation Range,
a new Subscription, Direct Community Offering and/or Syndicated Community
Offering may be held or such other action may be taken as the Primary Parties
shall determine and the PDOB and the FDIC may permit or require.
Depending upon market or financial conditions following the commencement
of the Subscription Offering, the total number of Conversion Shares to be
issued in the Conversion Offerings may be increased or decreased without a
resolicitation of subscribers, provided that the product of the total number of
shares times the Purchase Price is not below the minimum or more than 15% above
the maximum of the Estimated Valuation Range. In the event market or financial
conditions change so as to cause the aggregate Purchase Price of the shares to
be below the minimum of the Estimated Valuation Range or more than 15% above
the maximum of the Estimated Valuation Range, purchasers will be resolicited
(i.e. 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
with interest at the Savings Bank's passbook rate of interest, or be permitted
to modify or rescind their subscriptions). Any increase or decrease in the
number of Conversion Shares will result in a corresponding change in the number
of Exchange Shares, so that upon consummation of the Conversion and
Reorganization, the Conversion Shares and the Exchange Shares will represent
approximately 51.94% and 48.06%, respectively, of the Holding Company's total
outstanding shares of Common Stock (exclusive of the effects of the exercise of
outstanding stock options).
An increase in the number of Conversion Shares as a result of an increase
in the appraisal of the estimated pro forma market value would decrease both a
subscriber's ownership interest and the Holding Company's pro forma net
earnings and shareholders' equity on a per share basis while increasing pro
forma net earnings and shareholders' equity on an aggregate basis. A decrease
in the number of Conversion Shares would increase both
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a subscriber's ownership interest and the Holding Company's pro forma net
earnings and shareholders' equity on a per share basis while decreasing pro
forma net earnings and shareholders' equity on an aggregate basis. See "RISK
FACTORS -- Possible Dilutive Effect of Benefit Plans" and "PRO FORMA DATA."
The Appraisal of RP Financial has been filed as an exhibit to this
Registration Statement and Application for Conversion of which this Prospectus
is a part and is available for inspection in the manner set forth under
"ADDITIONAL INFORMATION."
Limitations on Purchases of Conversion Shares
The Plan of Conversion provides for certain limitations to be placed upon
the purchase of Conversion Shares by eligible subscribers and others in the
Conversion and Reorganization. Each subscriber must subscribe for a minimum of
25 Conversion Shares. Except for the ESOP, which is expected to subscribe for
8% of the Conversion Shares issued in the Conversion and Reorganization, the
Plan of Conversion provides for the following purchase limitations: (i) the
maximum number of shares of Conversion Shares that may be subscribed for or
purchased in all categories in the Conversion and Reorganization by any person,
when combined with any Exchange Shares received, shall not exceed 1% of the
Conversion Shares issued in the Conversion and Reorganization, and (ii) the
maximum number of shares of Conversion Shares that may be subscribed for or
purchased in all categories in the Conversion and Reorganization by any person,
together with all associates or any group of persons acting in concert when
combined with any Exchange Shares received, shall not exceed 2% of the
Conversion Shares issued in the Conversion and Reorganization. For purposes of
the Plan of Conversion, the directors are not deemed to be acting in concert
solely by reason of their Board membership. Pro rata reductions within each
Subscription Rights category will be made in allocating shares to the extent
that the maximum purchase limitations are exceeded.
The Boards of Directors of the Primary Parties may, in their sole
discretion, increase the maximum purchase limitation set forth above up to 5% of
the Conversion Shares sold in the Conversion and Reorganization, provided that
orders for shares exceed 5% of the Conversion Shares sold in the Conversion and
Reorganization may not exceed, in the aggregate, 10% of the shares sold in the
Conversion and Reorganization. If the minimum or maximum purchase limitations
are changed, subscribers will be provided with notice in writing. Factors
considered in determining whether to change such limitations will be: (1)
whether there is significant demand in which case the limitations could be
increased and thereby provide broader distribution, and (2) whether there is not
a significant demand, in which case the limitaions could thereby be increased to
encourage large purchases to ensure the purchase of the number of shares
necessary to consummate the transaction. The Savings Bank and the Holding
Company do not intend to increase the maximum purchase limitation unless market
conditions are such that an increase in the maximum purchase limitation is
necessary to sell a number of shares in excess of the minimum of the Estimated
Valuation Range. If the Boards of Directors of the Primary Parties decide to
increase the purchase limitation, persons who subscribed for the maximum number
of Conversion Shares will be, and other large subscribers in the discretion of
the Holding Company and the Savings Bank may be, given the opportunity to
increase their subscriptions accordingly, subject to the rights and preferences
of any person who has priority Subscription Rights.
The term "acting in concert" is defined in the Plan of Conversion to mean
(i) knowing participation in a joint activity or interdependent conscious
parallel action towards a common goal whether or not pursuant to an express
agreement; or (ii) a combination or pooling of voting or other interests in the
securities of an issuer for a common purpose pursuant to any contract
understanding, relationship, agreement or other arrangement, whether written or
otherwise. In general, a person who acts in concert with another party also
shall be deemed to be acting in concert with any person who also is acting in
concert with that other party.
The term "associate" of a person is defined in the Plan of Conversion to
mean (i) any corporation or organization (other than the Savings Bank or a
majority-owned subsidiary of the Savings Bank) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10%
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 (excluding
tax-qualified employee plans); and (iii) any relative or spouse of such person,
or any relative of such spouse, who either has the same home as such person or
who is a director or officer of the Savings Bank or any of its parents or
subsidiaries. For example, a corporation of which a person serves as an officer
would be an associate of such person and, therefore, all shares purchased by
such corporation would be included with the number of shares that such person
could purchase individually under the above limitations.
The term "officer" is defined in the Plan of Conversion to mean an
executive officer of the Savings Bank, including its Chairman of the Board,
President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents
in charge of principal business functions, Secretary and Treasurer.
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Common stock purchased or exchanged pursuant to the Conversion and
Reorganization will be freely transferable, except for shares purchased by
directors and officers of the Savings Bank and the Holding Company and by NASD
members. See "-- Restrictions on Transferability by Directors and Officers and
NASD Members."
Delivery and Exchange of Stock Certificates
Conversion Shares. Certificates representing Conversion Shares will be
mailed by the Holding Company's transfer agent to the persons entitled thereto
at the addresses of such persons appearing on the Stock Order Form as soon as
practicable following the consummation of the Conversion and Reorganization.
Any undeliverable certificates will be held by the Holding Company until
claimed by persons legally entitled thereto or otherwise disposed according to
applicable law. Purchasers of Conversion Shares may be unable to sell such
shares until certificates are available and delivered to them.
Exchange Shares. After the consummation of the Conversion and
Reorganization, each holder of a certificate(s) theretofore evidencing issued
and outstanding shares of Savings Bank Common Stock (other than the MHC), upon
surrender of the same to an agent, duly appointed by the Holding Company, which
is anticipated to be the transfer agent for the Common Stock ("Exchange
Agent"), shall be entitled to receive in exchange therefor certificates
representing the number of full Exchange Shares based on the Exchange Ratio.
The Exchange Agent shall mail a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to such
certificate shall pass, only upon delivery of such certificate to the Exchange
Agent) advising such holder of the terms of the Exchange Offering and the
procedure for surrendering to the Exchange Agent such certificates in exchange
for a certificate(s) evidencing Common Stock. The Public Shareholders should
not forward Savings Bank Common Stock certificates to the Savings Bank or the
Exchange Agent until they have received the letter of transmittal.
No holder of a certificate theretofore representing shares of Savings Bank
Common Stock shall be entitled to receive any dividends on the Common Stock
until the certificate representing such shares is surrendered in exchange for
certificates representing shares of Common Stock. In the event that dividends
are declared and paid by the Holding Company in respect of Common Stock after
the consummation of the Conversion and Reorganization, but before surrender of
certificates representing shares of Savings Bank Common Stock, dividends
payable in respect of shares of Common Stock not then issued shall accrue
(without interest). Any such dividends shall be paid (without interest) upon
surrender of the certificates representing such shares of Savings Bank Common
Stock. After the consummation of the Conversion and Reorganization, the Holding
Company shall be entitled to treat certificates representing shares of Savings
Bank Common Stock as evidencing ownership of the number of full shares of
Common Stock into which the shares of Savings Bank Common Stock represented by
such certificates shall have been converted, notwithstanding the failure on the
part of the holder thereof to surrender such certificates.
The Holding Company shall not be obligated to deliver a certificate(s)
representing shares of Common Stock to which a holder of Savings Bank Common
Stock would otherwise be entitled as a result of the Conversion and
Reorganization until such holder surrenders the certificate(s) representing the
shares of Savings Bank Common Stock for exchange as provided above, or, in
default thereof, an appropriate affidavit of loss and indemnity agreement
and/or a bond as may be required in each case by the Holding Company. If any
certificate evidencing shares of Common Stock is to be issued in a name other
than that in which the certificate evidencing Savings Bank Common Stock
surrendered in exchange therefor is registered, it shall be a condition of the
issuance thereof that the certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the person requesting such
exchange pay to the Exchange Agent any transfer or other tax required by reason
of the issuance of a certificate for shares of Common Stock in any name other
than that of the registered holder of the certificate surrendered or otherwise
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not payable.
Restrictions on Repurchase of Stock
Pursuant to FDIC regulations, FDIC-regulated savings banks (and their
holding companies) may not for a period of three years from the date of an
institution's mutual-to-stock conversion repurchase any of its common
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stock from any person, except in the event of (i) an offer made to all of its
shareholders to repurchase the common stock on a pro rata basis, approved by
the FDIC; or (ii) the repurchase of qualifying shares of a director, or (iii) a
purchase in the open market by a tax-qualified or non-tax-qualified employee
stock benefit plan in an amount reasonable and appropriate to fund the plan.
Furthermore, repurchases of any common stock are prohibited if the effect
thereof would cause the savings bank's regulatory capital to be reduced below
(a) the amount required for the liquidation account or (b) the regulatory
capital requirements imposed by the FDIC. Repurchases are generally prohibited
during the first year following conversion. Upon ten days' written notice to
the FDIC, and if the FDIC does not object, an institution may make open market
repurchases of its outstanding common stock during years two and the following
the conversion, provided that certain regulatory conditions are met and that
the repurchase would not adversely affect the financial condition of the
savings bank. Any repurchases of common stock by the Holding Company would be
subject to these regulatory restrictions unless the FDIC would provide
otherwise.
Restrictions on Transferability by Directors and Officers and NASD Members
Shares of Common Stock purchased in the Conversion Offerings by directors
and officers of the Holding Company may not be sold for a period of one year
following consummation of the Conversion and Reorganization, except in the
event of the death of the shareholder or in any exchange of the Common Stock in
connection with a merger or acquisition of the Holding Company. Shares of
Common Stock received by directors or officers through the ESOP or the 1998 MRP
or upon exercise of options issued pursuant to the 1998 Stock Option Plan or
purchased subsequent to the Conversion and Reorganization are not subject to
this restriction. Accordingly, shares of Common Stock issued by the Holding
Company to directors and officers shall bear a legend giving appropriate notice
of the restriction and, in addition, the Holding Company will give appropriate
instructions to the transfer agent for the Holding Company's Common Stock with
respect to the restriction on transfers. Any shares issued to directors and
officers as a stock dividend, stock split or otherwise with respect to
restricted Common Stock shall be subject to the same restrictions.
Purchases of outstanding shares of Common Stock by directors, executive
officers (or any person who was an executive officer or trustee of the Savings
Bank after adoption of the Plan of Conversion and Reorganization) and their
associates during the three-year period following Conversion and Reorganization
may be made only through a broker or dealer registered with the SEC, except
with the prior written approval of the FDIC. This restriction does not apply,
however, to negotiated transactions involving more than 1% of the outstanding
Common Stock or to the purchase of Common Stock pursuant to either the 1995 or
1998 Stock Option Plan.
The Holding Company has filed with the SEC a registration statement under
the Securities Act for the registration of the Common Stock to be issued
pursuant to the Conversion and Reorganization. The registration under the
Securities Act of shares of the Common Stock to be issued in the Conversion and
Reorganization does not cover the resale of such shares. Shares of Common Stock
purchased by persons who are not affiliates of the Holding Company may be
resold without registration. Shares purchased by an affiliate of the Holding
Company will be subject to the resale restrictions of Rule 144 under the
Securities Act. If the Holding Company meets the current public information
requirements of Rule 144 under the Securities Act, each affiliate of the
Holding Company who complies with the other conditions of Rule 144 (including
those that require the affiliate's sale to be aggregated with those of certain
other persons) would be able to sell in the public market, without
registration, a number of shares not to exceed, in any three-month period, the
greater of (i) 1% of the outstanding shares of Common Stock or (ii) the average
weekly volume of trading in such shares during the preceding four calendar
weeks. Provision may be made in the future by the Holding Company to permit
affiliates to have their shares registered for sale under the Securities Act
under certain circumstances.
Under guidelines of the NASD, members of the NASD and their associates are
subject to certain restrictions on the transfer of securities purchased in
accordance with Subscription Rights and to certain reporting requirements upon
purchase of such securities.
CERTAIN RESTRICTIONS ON ACQUISITION
OF THE HOLDING COMPANY
Pennsylvania Law
The Pennsylvania BCL contains certain provisions applicable to the Company
that may have the effect of impeding a change in control of the Company. These
provisions, among other things, (a) require that, following
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any acquisition by any person or group of 20% of a public corporation's voting
power, the remaining shareholders have the right to receive payment for their
shares, in cash, from such person or group in an amount equal to the "fair
value" of their shares, including an increment representing a proportion of any
value payable for acquisition of control of the corporation; and (b) prohibit,
for five years after an interested shareholder's acquisition date, a "business
combination" (which includes a merger or consolidation of the corporation or a
sale, lease or exchange of assets having a minimum specified aggregate value or
representing a minimum specified percentage earning power or net income of the
corporation) with a shareholder or group of shareholders beneficially owning
20% or more of a public corporation's voting power.
In 1990, the Pennsylvania legislature further amended the Pennsylvania BCL
to expand the antitakeover protections afforded by Pennsylvania law by
redefining the fiduciary duty of directors and adopting disgorgement and
control-share acquisition statutes. To the extent applicable to the Holding
Company at the present time, this legislation generally (a) expands the factors
and groups (including shareholders) that the Board of Directors can consider in
determining whether a certain action is in the best interests of the
corporation; (b) provides that the Board of Directors need not consider the
interests of any particular group as dominant or controlling; (c) provides that
directors, in order to satisfy the presumption that they have acted in the best
interests of the corporation, need not satisfy any greater obligation or higher
burden of proof with respect to actions relating to an acquisition or potential
acquisition of control; (d) provides that actions relating to acquisitions of
control that are approved by a majority of "disinterested directors" are
presumed to satisfy the directors' standard unless it is proven by clear and
convincing evidence that the directors did not assent to such action in good
faith after reasonable investigation; and (e) provides that the fiduciary duty
of directors is solely to the corporation and may be enforced by the
corporation or by a shareholder in a derivative action, but not by a
shareholder directly. The 1990 amendments to the BCL explicitly provide that
the fiduciary duty of directors shall not be deemed to require directors (a) to
redeem any rights under, or to modify or render inapplicable, any shareholder
rights plan; (b) to render inapplicable, or make determinations under,
provisions of the BCL relating to control transactions, business combinations,
control-share acquisitions or disgorgement by certain controlling shareholders
following attempts to acquire control; or (c) to act as the board of directors,
a committee of the board or an individual director solely because of the effect
such action might have on an acquisition or potential or proposed acquisition
of control of the corporation or the consideration that might be offered or
paid to shareholders in such an acquisition. One of the effects of these
fiduciary duty provisions may be to make it more difficult for a shareholder to
successfully challenge the actions of the Holding Company's Board of Directors
in a potential change in control context. Pennsylvania case law appears to
provide that the fiduciary duty standard under the 1990 amendment to the BCL
grants directors the statutory authority to reject or refuse to consider any
potential or proposed acquisition of the corporation.
Under the Pennsylvania control-share acquisition statute, a person or
group is entitled to voting rights with respect to "control shares" only after
shareholders (both disinterested shareholders and all shareholders) have
approved the granting of such voting rights at a meeting of shareholders.
"Control shares" are shares acquired since January 1, 1988, that upon
acquisition of voting power by an "acquiring person," would result in a
"control-share acquisition." ("Control shares" also include voting shares where
beneficial ownership was acquired by the "acquiring person" within 180 days of
the control-share acquisition or with the intention of making a control-share
acquisition.) An "acquiring person" is a person or group who makes or proposes
to make a "control-share acquisition." A "control-share acquisition" is an
acquisition, directly or indirectly, of voting power over voting shares that
would, when added to all voting power of the person over other voting shares,
entitle the person to cast or direct the casting of such percentage of votes
for the first time with respect to any of the following ranges that all
shareholders would be entitled to cast in an election of directors: (a) at
least 20% but less than 33 1/3%; (b) at least 33 1/3 but less than 50%; or (c)
50% or more. The effect of these provisions is to require a new shareholder
vote when each threshold is exceeded. In the event shareholders do not approve
the granting of voting rights, voting rights are lost only with respect to
"control shares."
A special meeting of shareholders is required to be called to establish
voting rights of control shares if an acquiring person (a) files with the
corporation an information statement containing specified information, (b)
makes a written request for a special meeting at the time of delivery of the
information statement, (c) makes a control-share acquisition or a bona fide
written offer to make a control-share acquisition, and (d) provides a written
undertaking at the time of delivery of the information statement to pay or
reimburse the corporation for
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meeting expenses. If the information statement is filed and a control-share
acquisition is made or proposed to be made, but no request for a special
meeting is made or no written undertaking to pay expenses is provided, the
issue of voting rights will be submitted to shareholders at the next annual or
special meeting of shareholders of the corporation.
A corporation may redeem all "control shares" at the average of the high
and low sales price, as reported on a national securities exchange or national
quotation system or similar quotation system, on the date the corporation
provides notice of redemption (a) at any time within 24 months after the date
on which the control-share acquisition occurs if the acquiring person does not,
within 30 days after the completion of the control-share acquisition, properly
request that shareholders consider the issue of voting rights to be accorded to
control shares and (b) at any time within 24 months after the issue of voting
rights is submitted to shareholders and such voting rights either are not
accorded or are accorded and subsequently lapse. Voting rights accorded to
control shares by a vote of shareholders lapse and are lost if any proposed
control-share acquisition is not consummated within 90 days after shareholder
approval is obtained.
A person will not be considered an "acquiring person" if the person holds
voting power within any of the ranges specified in the definition of
"control-share acquisition" as a result of a solicitation of revocable proxies
if such proxies (a) are given without consideration in response to a proxy or
consent solicitation made in accordance with the Exchange Act and (b) do not
empower the holder to vote the shares except on the specific matters described
in the proxy and in accordance with the instructions of the giver of the proxy.
The statute does not apply to certain control-share acquisitions effected
pursuant to a gift or laws of inheritance, in connection with certain family
trusts or pursuant to a merger, consolidation or plan of share exchange if the
corporation is a party to the agreement.
The effect of this statutory provision is to deter the accumulation of a
substantial block of Common Stock, including accumulation with a view to
effecting a non-negotiated tender or exchange offer for Common Stock.
Under the disgorgement provisions of the Pennsylvania BCL, any profit
realized by any person or group who is or was a "controlling person or group"
from the disposition of any equity security of a corporation shall belong to
and be recoverable by the corporation where the profit is realized (i) within
18 months after the person becomes a "controlling person or group" and (ii) the
equity security had been acquired by the "controlling person or group" within
24 months prior to or 18 months after obtaining the status of a "controlling
person or group."
A "controlling person or group" is a person or group who (a) has acquired,
offered to acquire or, directly or indirectly, publicly disclosed the intention
of acquiring 20% voting power of the corporation or (b) publicly disclosed that
it may seek to acquire control of the corporation.
A person will not be deemed a "controlling person or group" if the person
holds voting power as a result of a solicitation of revocable proxies if, among
other things, such proxies (a) are given without consideration in response to a
proxy or consent solicitation made in accordance with the Exchange Act and (b)
do not empower the holder to vote the shares except on the specific matters
described in the proxy and in accordance with the instructions of the giver of
the proxy. This exception does not apply to proxy contests in connection with
or as a means toward acquiring control of the Holding Company.
The effect of this statutory provision is to deter the accumulation of a
substantial block of Common Stock with a view to putting the Holding Company
"in play" and then selling shares at a profit (whether to the Holding Company,
in the market or in connection with an acquisition of the Holding Company).
Certain Anti-Takeover Provisions in the Articles of Incorporation and Bylaws of
the Holding Company
While the Board of Directors of the Holding Company is not aware of any
effort that might be made to obtain control of the Holding Company after
Conversion, the Board believes that it is appropriate to include certain
provisions as part of the Holding Company's Articles of Incorporation to
protect the interests of the Holding Company and its shareholders from hostile
takeovers that the Board might conclude are not in the best interests of the
Holding Company or the Holding Company's shareholders. These provisions may
have the effect of discouraging a future takeover attempt that is not approved
by the Holding Company's Board of Directors but
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which individual shareholders may deem to be in their best interests or in
which shareholders may receive a substantial premium for their shares over the
then current market price. As a result, shareholders who might desire to
participate in such a transaction may not have an opportunity to do so. Such
provisions will also render the removal of the Holding Company's current Board
of Directors or management more difficult.
The following discussion is a general summary of certain provisions of the
Articles of Incorporation and Bylaws of the Holding Company that may be deemed
to have such an "anti-takeover" effect. The description of these provisions is
necessarily general and reference should be made in each case to the Articles
of Incorporation and Bylaws of the Holding Company. For information regarding
how to obtain a copy of these documents without charge, see "Additional
Information."
Classified Board of Directors and Related Provisions
The Holding Company's Articles of Incorporation provide that the Holding
Company's Board of Directors is to be divided into three classes that shall be
as nearly equal in number as possible. The directors in each class will hold
office following their initial appointment to office for terms of one year, two
years and three years, respectively, and, upon reelection, will serve for terms
of three years thereafter. Each director will serve until his or her successor
is elected and qualified. The Holding Company's Articles of Incorporation
provide that a director may be removed by shareholders only upon the
affirmative vote of at least a majority of the votes that all shareholders
would be entitled to cast. The Holding Company's Articles of Incorporation
further provide that any vacancy occurring in the Holding Company's 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.
The classified board of directors of the Holding Company could make it
more difficult for shareholders, including those holding a majority of the
outstanding, shares, to force an immediate change in the composition of a
majority of the Holding Company's Board of Directors. Because the terms of only
one-third of the incumbent directors expire each year, it requires at least two
annual elections for the shareholders to chance a majority, whereas a majority
of a non-classified board may be changed in one year. In the absence of the
provisions of the Holding Company's Articles of Incorporation classifying the
Holding Company's Board, all of the Holding Company's directors would be
elected each year.
Management of the Holding Company believes that the staggered election of
directors tends to promote continuity of management because only one-third of
the Holding Company's Board of Directors is subject to election each year.
Staggered terms guarantee that in the ordinary course approximately two-thirds
of the directors, or more, at any one time have had at least one year's
experience as directors of the Holding Company, and moderate the pace of change
in the composition of the Holding Company's Board of Directors by extending the
minimum time required to elect a majority of directors from one to two years.
Other Antitakeover Provisions
The Holding Company's Articles of Incorporation and Bylaws contain certain
other provisions that may also have the effect of deterring or discouraging,
among other things, a non-negotiated tender or exchange offer for the Common
Stock, a proxy contest for control of the Holding Company, the assumption of
control of the Holding Company by a holder of a large block of the Common Stock
and the removal of the Holding Company's management. These provisions: (1)
empower the Holding Company's Board of Directors, without shareholder approval,
to issue preferred stock, the terms of which, including voting power, are set
by the Holding Company's Board; (2) restrict the ability of shareholders to
remove directors; (3) require that shares with at least 80% of total voting
power approve mergers and other similar transactions with a person or entity
holding Common Stock with more than 5% of the Holding Company's voting power,
if the transaction is not approved, in advance, by the Holding Company's Board
of Directors; (4) prohibit shareholders' actions without a meeting; (5) require
that shares with at least 80%, or in certain instances a majority, of total
voting power approve the repeal or amendment of the Holding Company's Articles
of Incorporation; (6) require any person who acquires stock of the Holding
Company with voting power of 25% or more to offer to purchase for cash all
remaining shares of the Holding Company's voting stock at the highest price
paid by such person for shares of the Holding Company's voting stock during the
preceding year; (7) eliminate cumulative voting in elections of directors; and
(8) require that shares with at least 66 2/3% of total voting power approve,
repeal or amend the Bylaws of the Holding Company.
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DESCRIPTION OF CAPITAL STOCK
General
The Holding Company is authorized to issue 15,000,000 shares of Common
Stock, no par value, and 5,000,000 shares of preferred stock, having such par
value as the Board of Directors of the Holding Company shall fix and determine.
The Holding Company currently expects to issue between 1,190,000 and 1,610,000
shares (or, as permitted by the Plan, up to 1,851,500 shares), subject to
adjustment, of the Common Stock and no shares of preferred stock in the
Conversion and Reorganization. The Holding Company has reserved for future
issuance under the 1997 Stock Option Plan and the 1998 MRP an amount of
authorized but unissued shares of Common Stock equal to 10% and 4%,
respectively, of the shares to be issued in the Conversion Offerings.
Common Stock
Voting Rights
Each share of Common Stock will have the same relative rights and will be
identical in all respects with every other share of the Common Stock. The
holders of Common Stock will possess exclusive voting rights in the Holding
Company, except to the extent that shares of preferred stock issued in the
future may have voting rights, if any. Each holder of shares of the Common
Stock will be entitled to one vote for each share held of record on all matters
submitted to a vote of holders of shares of the Common Stock. Holders of Common
Stock will not be entitled to cumulate their votes for election of directors.
Dividends
The Holding Company may, from time to time, declare dividends to the
holders of Common Stock, who will be entitled to share equally in any such
dividends. For additional information as to cash dividends, see "DIVIDEND
POLICY."
Liquidation
In the event of any liquidation, dissolution or winding up of the Savings
Bank, the Holding Company, as holder of all of the capital stock of the Savings
Bank, would be entitled to receive all assets of the Savings Bank after payment
of all debts and liabilities of the Savings Bank. In the event of a
liquidation, dissolution or winding up of the Holding Company, each holder of
shares of Common Stock would be entitled to receive, after payment of all debts
and liabilities of the Holding Company, a pro rata portion of all assets of the
Holding Company available for distribution to holders of Common Stock. If any
preferred stock is issued, the holders thereof may have a priority in
liquidation or dissolution over the holders of Common Stock.
Other Characteristics
Holders of Common Stock will not have preemptive rights with respect to
any additional shares of Common Stock that may be issued. The Common Stock is
not subject to call for redemption, and the outstanding shares of Common Stock,
when issued and upon receipt by the Holding Company of the full purchase price
therefor, will be fully paid and nonassessable.
Preferred Stock
None of the 5,000,000 authorized shares of preferred stock of the Holding
Company will be issued in the Conversion and Reorganization. After the
Conversion and Reorganization is completed, the Board of Directors of the
Holding Company will be authorized, without shareholder approval, to issue
preferred stock and to fix and state voting powers, designations, preferences
or other special rights of such shares and the qualifications, limitations and
restrictions thereof. The preferred stock may rank prior to the Common Stock as
to dividend rights or liquidation preferences, or both, and may have full or
limited voting rights. The Holding Company's Board of Directors has no present
intention to issue any preferred stock. Should the Board of Directors of the
Holding Company subsequently issue preferred stock, no holder of any such stock
shall have any preemptive
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right to subscribe for or purchase any stock or any other securities of the
Holding Company other than such, if any, as the Holding Company's Board of
Directors, in its sole discretion, may determine and at such price or prices
and upon such other terms as the Holding Company's Board of Directors, in its
sole discretion, may fix.
Restrictions on Acquisition
Acquisitions of the Holding Company are restricted by provisions in its
Articles of Incorporation and Bylaws and by the rules and regulations of
various regulatory agencies. See "REGULATION" and "RESTRICTIONS ON ACQUISITION
OF THE HOLDING COMPANY."
REGISTRATION REQUIREMENTS
The Holding Company will register the Common Stock with the SEC pursuant
to Section 12(g) of the Exchange Act upon the completion of the Conversion and
Reorganization and will not deregister its Common Stock for a period of at
least three years following the completion of the Conversion and
Reorganization. Upon such registration, the proxy and tender offer rules,
insider trading reporting and restrictions, annual and periodic reporting and
other requirements of the Exchange Act will be applicable.
LEGAL AND TAX OPINIONS
The legality of the Common Stock has been passed upon for the Holding
Company by Stevens & Lee, Wayne, Pennsylvania. The federal and Pennsylvania tax
consequences of the Conversion and Reorganization have been opined upon by
Stevens & Lee. Stevens & Lee has consented to the references herein to their
opinions. Certain legal matters will be passed upon for Webb by Breyer &
Aguggia, Washington, D.C.
EXPERTS
The consolidated financial statements of the Savings Bank for the years
ended December 31, 1997 and 1996 and September 20, 1995 included in this
Prospectus have been audited by Stockton Bates & Co., P.C., Philadelphia,
Pennsylvania, independent auditors, as stated in their report appearing herein,
and have been so included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
RP Financial has consented to the publication herein of the summary of its
report to the Savings Bank setting forth its opinion as to the estimated pro
forma market value of the MHC and the Savings Bank, as converted, and its
letter with respect to subscription rights and to the use of its name and
statements with respect to it appearing herein.
ADDITIONAL INFORMATION
The Holding Company has filed with the SEC a Registration Statement on
Form S-1 (File No. 333-37511) under the Securities Act with respect to the
Common Stock offered in the Conversion and Reorganization. This Prospectus does
not contain all the information set forth in the Registration Statement certain
parts of which are omitted in accordance with the rules and regulations of the
SEC. Such information may be inspected at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549 and at its regional offices at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies may be obtained at prescribed rates from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company's Common Stock has received conditional approval to be listed on
the Nasdaq National Market, and such material is also available for inspection
and copying at the Nasdaq National Market's Listings Department, 1735 K Street,
N.W., Washington, D.C. 20006. The Registration Statement also is available
through the SEC's World Wide Web site on the Internet (http://www.sec.gov).
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
--------
<S> <C>
Independent Auditors' Report ............................................................. F-2
Financial Statements:
Consolidated Statement of Financial Condition, Years Ended December 31, 1997 and 1996 . F2
Consolidated Statement of Income for the Years Ended December 31, 1997 and 1996, and
September 30, 1995 ................................................................... F3 - 4
Consolidated Statement of Stockholders' Equity for the Years Ended December 31, 1997
and 1996,
and September 30, 1995 ............................................................... F5
Consolidated Statement of Cash Flows for the Years Ended December 31, 1997 and 1996,
and
September 30, 1995 ................................................................... F6 - 8
Notes to Consolidated Financial Statements ............................................... F9 - 31
</TABLE>
* * *
All schedules are omitted as the required information either is not
applicable or is included in the Consolidated Financial Statements or related
Notes.
Separate financial statements for the MHC have not been included herein
because the MHC has no material assets other than its shares of Savings Bank
Common Stock (which will be canceled as part of the Conversion and
Reorganization) and no significant liabilities (contingent or otherwise),
revenues or expenses, and has not engaged in any significant activities to
date.
Separate financial statements for the Holding Company have not been
included herein because the Holding Company, which has engaged in only
organizational activities to date, has no significant assets, liabilities
(contingent or otherwise), revenues or expenses.
F-1
<PAGE>
Stockton Bates
&
Company, P.C.
Certified Public Accountants
Independent Auditors' Report
To the Board of Trustees
Pennsylvania Savings Bank
Eleven Penn Center
1835 Market Street
Philadelphia, Pennsylvania 19103-2986
We have audited the accompanying consolidated statement of financial
condition of Pennsylvania Savings Bank and Subsidiaries as of December 31, 1997
and 1996 and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years ended December 31, 1997 and
1996, and September 30, 1995. These consolidated financial statements are the
responsibility of the Bank's management. Our responsibility is to express an
opinion on these consolidated 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 consolidated 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 condition of
Pennsylvania Savings Bank and Subsidiaries at December 31, 1997 and 1996, the
results of their operations and their cash flows for each of the three years
ended December 31, 1997 and 1996, and September 30, 1995 in conformity with
generally accepted accounting principles.
/s/ Stockton Bates & Company, P.C.
Certified Public Accountants
Philadelphia, Pennsylvania
February 6, 1998
F-2
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1997 1996
---------------- ----------------
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS:
Cash and due from banks .................................................... $ 1,193,195 $ 1,390,220
Interest bearing deposits in other financial institutions .................. 26,695,455 30,232,245
INVESTMENTS:
Investment securities available-for-sale, at fair value .................... 14,401,388 6,316,282
Mortgage-backed securities available-for-sale at fair value ................ 2,933,804 3,193,840
Investment securities held-to-maturity (fair value of $8,234,639 and
$12,628,003) ............................................................. 8,219,223 12,656,815
Mortgage-backed securities held-to-maturity (fair value of $2,182,322 and
$2,851,532) .............................................................. 2,068,059 2,748,444
LOANS RECEIVABLE, net ....................................................... 61,915,068 52,585,549
LOANS HELD FOR SALE ......................................................... 6,574,585 4,597,700
REAL ESTATE:
Acquired in settlement of loans ............................................ 456,528 464,651
OFFICE PROPERTIES AND EQUIPMENT, net of accumulated deprecia-
tion ....................................................................... 1,329,145 1,273,448
FEDERAL HOME LOAN BANK STOCK, at cost (Restricted investment
required by law) ........................................................... 559,900 533,600
ACCRUED INTEREST RECEIVABLE ................................................. 1,285,102 1,216,957
INVESTMENT IN DATA CENTER, common stock, at cost ............................ 15,000 15,000
PREPAID CORPORATE TAXES ..................................................... 445,092 390,971
EXCESS OF ACQUISITION COST OVER FAIR VALUE OF ASSETS
ACQUIRED, net of accumulated amortization .................................. 7,250 8,250
NET DEFERRED TAXES .......................................................... 25,296
CAPITALIZED CONVERSION COSTS ................................................ 155,292
PREPAID EXPENSES AND OTHER ASSETS ........................................... 1,083,865 785,244
------------ ------------
TOTAL ASSETS ............................................................. $129,337,951 $118,434,512
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits ................................................................... $108,734,107 $100,574,376
Securities purchased under agreements to resell ............................ 2,841,733 1,536,188
Advances from borrowers for taxes .......................................... 999,611 930,670
Income taxes payable ....................................................... 308,000 142,000
Net Deferred Taxes ......................................................... 51,158
Accrued pension cost ....................................................... 145,843 149,144
Accrued interest payable on savings accounts ............................... 260,363 183,801
Employee Stock Ownership Plan debt ......................................... 295,355 356,483
Accrued expenses and other liabilities ..................................... 703,957 393,308
------------ ------------
Total liabilities ........................................................ 114,340,127 104,265,970
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock, $1 par value, 10,000,000 shares authorized; 1,194,640
shares issued and outstanding for December 31, 1997 and 1996 ............. 1,194,640 1,194,640
Additional paid-in capital ................................................. 13,563,087 13,563,087
Employee Stock Ownership Plan .............................................. (295,355) (356,483)
Retained earnings (accumulated deficit) .................................... 545,743 (162,734)
Unrealized loss, investments available-for-sale ............................ (10,291) (69,968)
------------ ------------
Total stockholders' equity ............................................... 14,997,824 14,168,542
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................... $129,337,951 $118,434,512
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-3
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30,
----------------------------- --------------
1997 1996 1995
------------- ------------- --------------
<S> <C> <C> <C>
INTEREST INCOME:
Interest on loans ......................................... $5,539,747 $5,118,181 $4,745,476
Mortgage-backed securities ................................ 373,900 430,798 493,305
Investment securities:
Taxable interest ........................................ 1,424,915 1,063,520 1,042,105
Taxable dividends ....................................... 191,364 119,290 92,408
Interest-earning deposits ................................. 1,210,030 1,207,302 817,234
---------- ---------- ----------
Total interest income ................................ 8,739,956 7,939,091 7,190,528
INTEREST EXPENSE:
Interest on deposits .................................... 4,533,646 4,082,377 3,437,143
Interest -- other ....................................... 6,146
----------
Total interest expense ............................... 4,533,646 4,082,377 3,443,289
---------- ---------- ----------
Net interest income .................................. 4,206,310 3,856,714 3,747,239
Provision for loan losses ............................... 60,000 132,633 26,937
---------- ---------- ----------
Net interest income after provision for loan
losses .............................................. 4,146,310 3,724,081 3,720,302
NONINTEREST INCOME:
Loan fees ............................................... 637,167 462,777 474,610
Service charges ......................................... 347,792 371,210 71,679
Rental income ........................................... 38,767 44,286 28,248
Other income ............................................ 47,368 136,712 381,688
---------- ---------- ----------
Total noninterest income ............................. 1,071,094 1,014,985 956,225
---------- ---------- ----------
NONINTEREST EXPENSES:
Compensation and employee benefits ...................... 2,313,717 1,975,078 2,244,878
Premises and occupancy costs ............................ 684,098 455,652 327,683
Federal insurance premiums .............................. 64,167 735,530 201,366
Data Processing ......................................... 126,700 120,782 102,914
Advertising ............................................. 81,400 62,121 75,970
Directors Fees .......................................... 232,300 237,200 92,700
Stationary, printing and postage ........................ 103,040 113,460 48,944
Expenses of real estate owned ........................... 8,244 143,177 35,739
Loss on sale of real estate held for investment ......... 2,465
Other ................................................... 550,592 553,379 454,015
---------- ---------- ----------
Total noninterest expenses ........................... 4,164,258 4,398,844 3,584,209
---------- ---------- ----------
</TABLE>
F-4
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30,
------------------------------- --------------
1997 1996 1995
--------------- -------------- --------------
<S> <C> <C> <C>
INCOME BEFORE PROVISION FOR INCOME TAXES ......... $ 1,053,146 $ 340,222 $1,092,318
Provision for federal and state income taxes:
Current ....................................... 308,000 142,000 399,528
Deferred ...................................... 36,669 59,465 33,131
----------- ---------- ----------
Total income tax provision ................. 344,669 201,465 432,659
----------- ---------- ----------
NET INCOME ....................................... $ 708,477 $ 138,757 $ 659,659
=========== ========== ==========
BASIC EARNINGS PER SHARE ......................... $ .61 $ .12 $ N/A
=========== ========== ==========
DILUTED EARNINGS PER SHARE ....................... $ .60 $ .12 $ N/A
=========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-5
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Employee
Additional Stock
Common Paid-in Ownership
Stock Capital Plan
------------- -------------- --------------
<S> <C> <C> <C>
BALANCE, SEPTEMBER 30, 1994 $ -0- $ -0- $ -0-
Net income for the year ended
September 30, 1995 ..............
Change in unrealized loss on
investment and mortgage-
backed securities available-for-
sale, net of taxes ..............
BALANCE, SEPTEMBER 30, 1995 $ -0- $ -0- $ -0-
========= ========== ======
BALANCE, DECEMBER 31, 1995 $1,173,250 $13,330,472 ($ 417,612)
Net income for the year ended
December 31, 1996 ...............
Issuance of common stock to
Management Recognition Plan 21,390 232,615
Dividends paid ...................
Principal payments made by
Employee Stock Ownership
Plan ............................ 61,129
Change in unrealized loss on
investment and mortgage-
backed securities available-for-
sale, net of taxes ..............
BALANCE, DECEMBER 31, 1996 $1,194,640 $13,563,087 ($ 356,483)
Net income for the year ended
December 31, 1997 ...............
Principal payments made by
Employee Ownership Plan ......... 61,128
Change in unrealized loss on
investment and mortgage-
backed securities available-for-
sale, net of taxes ..............
BALANCE, DECEMBER 31, 1997 $1,194,640 $13,563,087 ($ 295,355)
========== =========== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unrealized gain (loss)
on Investment and
Mortgage-backed
Retained Securities
Earnings Available-for-sale
(Deficit) Net of Taxes Total
-------------- ----------------------- ---------------
<S> <C> <C> <C>
BALANCE, SEPTEMBER 30, 1994 $8,945,553 ($ 606,513) $ 8,339,040
Net income for the year ended
September 30, 1995 .............. 659,659 659,659
Change in unrealized loss on
investment and mortgage-
backed securities available-for-
sale, net of taxes .............. 492,070 492,070
--------- -----------
BALANCE, SEPTEMBER 30, 1995 $9,605,212 ($ 114,443) $ 9,490,769
========== ========= ===========
BALANCE, DECEMBER 31, 1995 ($ 257,494) ($ 13,715) $13,814,901
Net income for the year ended
December 31, 1996 ............... 138,757 138,757
Issuance of common stock to
Management Recognition Plan 254,005
Dividends paid ................... (43,997) (43,997)
Principal payments made by
Employee Stock Ownership
Plan ............................ 61,129
Change in unrealized loss on
investment and mortgage-
backed securities available-for-
sale, net of taxes .............. (56,253) (56,253)
--------- -----------
BALANCE, DECEMBER 31, 1996 ($ 162,734) ($ 69,968) $14,168,542
Net income for the year ended
December 31, 1997 ............... 708,477 708,477
Principal payments made by
Employee Ownership Plan ......... 61,128
Change in unrealized loss on
investment and mortgage-
backed securities available-for-
sale, net of taxes .............. 59,677 59,677
--------- -----------
BALANCE, DECEMBER 31, 1997 $ 545,743 ($ 10,291) $14,997,824
========== ========= ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-6
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30
--------------------------------- ---------------
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................... $ 708,477 $ 138,757 $ 659,659
------------- ------------- ------------
Adjustments to reconcile net income to net cash pro-
vided by (used in) operating activities:
Amortization of premium/discount on mortgage-
backed securities ............................................ 1,784 (4,824) (5,747)
Depreciation and amortization ................................. 122,037 90,943 88,475
Write-down and expenses of real estate owned .................. 8,123 14,000
Loss on sale of real estate ................................... 2,465
Gain on sale of equipment ..................................... (977)
Gain on sale of loans ......................................... (555,987) (335,736) (185,425)
Provision for losses on loans ................................. 60,000 132,633 26,937
Deferred taxes ................................................ 36,669 59,467 33,131
Change in assets and liabilities:
Increase in accrued interest receivable ...................... (68,145) (137,214) (90,236)
Increase in prepaid expenses ................................. (298,621) (491,183) (331,460)
(Increase) decrease in prepaid corporate taxes ............... (54,121) 65,494 (26,884)
Increase (decrease) in corporate taxes payable ............... 166,000 (236,000) (20,897)
Increase (decrease) in accrued pension cost .................. (3,301) 5,768 143,376
Increase in accrued interest payable ......................... 76,562 25,468 85,839
Increase in accrued expenses ................................. 310,649 210,608 30,259
------------- ------------- ------------
Total adjustments ............................................. (198,351) (613,088) (238,632)
------------- ------------- ------------
Net cash provided by (used in) operating activities ........... 510,126 (474,331) 421,027
------------- ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities, available-for-sale ........... (9,042,458) (5,000,000) (2,500,000)
Purchase of investment securities, held-to-maturity ............. (11,714,219) (10,999,687) (2,000,000)
Mortgage-backed security maturities and principal
repayments .................................................... 991,525 864,783 639,539
Maturities of investment securities, available-for-sale ......... 1,000,000 3,000,000 700,000
Maturities of investment securities, held-to-maturity ........... 16,155,737 8,842,857
Acquisition costs of, and proceeds from the sale of, Fed-
eral Home Loan Bank stock ..................................... (26,300) (32,600) 34,400
Proceeds from the sale of loans ................................. 16,707,671 9,714,401 2,636,855
Originations of loans held for sale ............................. (18,128,569) (11,467,165) (3,307,530)
</TABLE>
F-7
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30,
---------------------------------- ----------------
1997 1996 1995
---------------- --------------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES: (Continued)
Increase in total loans receivable, net ........................... ($ 9,389,519) $ 480,336 ($ 1,057,133)
Purchase and improvement of real estate for investment ............ (500) (63,190)
Proceeds from sale of real estate owned net of improvements. 140,921
Increase in capitalized conversion costs .......................... (155,292) 6,261,000
Increase in advances for stock offering ...........................
Proceeds from sale of equipment ................................... 5,300
Capital expenditures .............................................. (176,734) (613,361) (13,314)
------------ ------------ -----------
Net cash used in investing activities ........................... (13,778,158) (6,533,215) 1,330,627
------------ ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits, net ......................................... $ 8,159,731 $ 4,097,882 $ 6,623,403
Change in securities purchased under agreements to resell ......... 1,305,545 69,451
Proceeds from issuance of stock to Management Recognition
Plan ............................................................ 254,005
Dividends Paid .................................................... (43,997)
Change in advances for borrowers' taxes and insurance ............. 68,941 (215,594) 30,944
------------ ------------ -----------
Net cash provided by financing activities ....................... 9,534,217 4,161,747 6,654,347
------------ ------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ....................................................... (3,733,815) (2,845,799) 8,406,001
Cash and cash equivalents, beginning of period .................... 31,622,465 34,468,264 21,371,339
------------ ------------ -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........................... $ 27,888,650 $ 31,622,465 $29,777,340
============ ============ ===========
</TABLE>
F-8
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30,
-------------------------------- --------------
1997 1996 1995
-------------- --------------- --------------
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest on deposits and borrowings ................ $ 4,457,084 $ 4,056,909 $3,357,447
=========== =========== ==========
Income taxes ....................................... $ 280,000 $ 267,788 $ 238,015
=========== =========== ==========
Noncash activities:
Loans transferred to real estate owned ............... $ -0- $ 79,156 $ 103,120
=========== =========== ==========
(Increase) decrease in unrealized loss on investment
mortgage-backed securities available-for-sale, net
of taxes .......................................... $ 59,677 ($ 56,253) $ 492,070
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-9
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995
1. DESCRIPTION OF ORGANIZATION:
Pennsylvania Savings Bank, through its six branch offices, makes
residential and consumer loans to customers and provides community banking
services principally within Southeastern Pennsylvania and Southern New Jersey.
Transnational Mortgage Corporation, a wholly owned subsidiary, originates
residential loans. PSA Financial Corporation, a wholly owned subsidiary,
originates residential and consumer loans. PSA Consumer Discount, a wholly
owned subsidiary of PSA Financial, originates consumer loans. All loan
originations are to customers principally within, but not limited to, the
County of Philadelphia, Pennsylvania. PSA Service Corporation, a wholly owned
subsidiary, processes all loans for Pennsylvania Savings Bank and the other
subsidiaries.
The Bank competes with other banking and financial institutions in its
primary markets. Commercial banks, savings banks, savings and loan
associations, mortgage bankers and brokers, credit unions and money market
funds actively compete for deposits and loans. Such institutions, as well as
consumer finance, mutual funds, insurance companies, and brokerage and
investment banking firms, may be considered competitors of the Bank with
respect to one or more of the services it renders.
The Bank is subject to regulations of certain state and federal agencies
and, accordingly, it is periodically examined by those regulatory authorities.
As a consequence of the extensive regulation of commercial banking activities,
the Bank's business is particularly susceptible to being affected by state and
federal legislation and regulations.
Effective October 20, 1995, Pennsylvania Savings Bank, a mutual savings
bank (the "Mutual Bank"), effected a mutual savings bank holding company
reorganization. This reorganization entailed the following: (1) the Mutual Bank
reorganized into a Pennsylvania chartered mutual savings bank holding company
named PSB Mutual Holding Company, (2) a new Pennsylvania chartered stock
savings bank (the "Stock Bank") was formed, (3) substantially all of the Mutual
Bank's assets (except $250,000 in cash retained by PSB Mutual Holding Company)
and liabilities were transferred to the Stock Bank, (4) 615,250 shares of
common stock, par value $1.00 per share of the Stock Bank, were issued to PSB
Mutual Holding Company and 558,000 shares of such common stock at a price of
$10.00 per share were sold to minority stockholders in a subscription offering,
(5) the Stock Bank received proceeds from the minority stock offering of
$5,580,000 net of commissions and other related expenses totaling $576,880, and
(6) the Stock Bank (named Pennsylvania Savings Bank) registered its common
stock pursuant to the Securities Exchange Act of 1934 ("Exchange Act").
As an Exchange Act registrant, the Bank became subject to the Exchange Act
proxy rules and the periodic reporting and other requirements of the Exchange
Act.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation:
The consolidated financial statements include the accounts of the Bank and
its wholly-owned subsidiaries, PSA Service Corporation, Transnational Mortgage
Corporation and PSA Financial Corporation. Significant intercompany balances
and transactions have been eliminated.
Cash and Cash Equivalents:
Cash and cash equivalents include unrestricted cash on hand, demand
deposits maintained in depository institutions and other readily convertible
investments with original contractual terms to maturity of three months or
less.
Investment in Debt and Marketable Equity Securities and Accounting Change:
SFAS No. 115 requires the Bank to classify its investments, including
marketable securities and mortgage-backed securities in one of three
categories: held-to-maturity, trading or available-for-sale. Debt securities
that
F-10
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: -- (Continued)
the Bank has the positive intent and ability to hold to maturity will be
classified as held-to-maturity and are reported at amortized cost. The Bank
does not engage in security trading and, therefore, the balance of its debt
securities and any equity securities will be classified as available-for-sale.
Net unrealized gains and losses for such securities will be required to be
recognized as a separate component of retained earnings net of taxes and
excluded from the determination of net income.
Investment and Mortgage-Backed Securities Available-for-Sale:
Securities classified as available-for-sale are carried at fair value. Net
unrealized gains and losses are reflected as a separate component of
stockholders' equity, net of tax effects. Securities classified as
available-for-sale are those that management intends to sell or that would be
sold for liquidity, investment management or similar reasons, even if there is
not a present intention of such a sale. Equity securities that have a readily
determinable fair value are also classified as available-for-sale.
Investment and Mortgage-Backed Securities Held-to-Maturity:
Securities are classified as held-to-maturity securities when purchased,
because the Bank has the ability and the intent to hold the securities to
maturity. Decisions to acquire investments of a particular type are based upon
interest rate risk, liquidity and capital adequacy considerations. Investment
securities are stated at cost, adjusted for premium amortization and accretion
of discounts. Premiums paid and discounts received at the time of purchase are
deferred and amortized over the remaining life of the securities using a method
which approximates a level yield. Mortgage-backed security amortization rates
are periodically adjusted to reflect changes in the prepayment speeds of the
underlying mortgages.
Gains and losses realized on sales of investment securities represent
differences between net proceeds and carrying values determined by the specific
identification method.
Loans and Allowance for Loan Losses:
Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff are stated at the amount of
unpaid principal and reduced by an allowance for loan losses. Interest on loans
is accrued and credited to operations based upon the principal amounts
outstanding. Loan origination fees and discounts on mortgage loans are
amortized to income using the interest method over the remaining period to
contractual maturity, adjusted for actual prepayments. The allowance for loan
losses is established through a provision for possible loan losses charged to
expense. Loans are charged against the allowance for loan losses when
management believes that the collectibility of the principal is unlikely. The
allowance is an amount that management believes will be adequate to absorb
possible loan losses on existing loans that may become uncollectible based on
evaluations of the collectibility of loans and prior loan loss experience. Th
evaluations take into consideration such factors as changes in the nature and
volume of the loan portfolio, overall portfolio quality, review of specific
problem loans and current economic conditions that may affect the borrower's
ability to pay.
Effective January 1, 1997, interest is discontinued on all loans that are
contractually past due 3 months. Prior to January 1, 1997, interest was
discontinued on residential loans that were contractually past due 12 months.
unless the value of the mortgaged property well exceeded the loan balance in
which case interest continued to accrue until the loan balance plus accrued
interest equalled the fair market value of the property securing the loan. The
bank has recorded interest income, net of taxes, of $80,341 and $45,646 for the
years ended December 31, 1996 and September 30, 1995, respectively on loans
that were contractually past due for more than three months. The effect on net
income per share would have been a reduction of $.06 for the year ended
December 31, 1996 if this interest had not been accrued. Interest was
discontinued on commercial, consumer and unsecured loans that were
contractually past due 3 months. No adjustment is made for interest previously
accrued. Income is subsequently recognized only to the extent that cash
payments are received, or until in management's judgment, the borrower's
ability to make periodic interest and principal payments is back to normal, in
which case the loan is returned to accrual status.
F-11
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: -- (Continued)
In May 1994, the Financial Accounting Standards Board (FASB) issued SFAS
No. 114, "Accounting by Creditors for Impairment of a Loan." SFAS No. 114
requires an adjustment to the carrying value of a loan through the provision
for loan losses when it is probable that a creditor will be unable to collect
all amounts due according to the contractual terms of the loan. SFAS No. 114
was subsequently amended by SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan-Income Recognition and Disclosure" to allow a creditor to
use existing methods for recognizing interest income on an impaired loan. SFAS
Nos. 114 and 118 are effective for financial statements issued for years
beginning after December 31, 1995. The adoption of SFAS Nos. 114 and 118 did
not have a material impact on the Bank's financial condition or results of
operations.
Loan Origination and Commitment Fees:
Loan fees and certain direct loan origination costs are deferred and the
net fee or cost is recognized as an adjustment of the loan yield over the
contractual life of the loan using the interest method. When a loan is sold,
unamortized fees are recognized as income. Other loan fees and charges
representing service costs for the prepayment of loans, for delinquent payments
or for miscellaneous loan services are recognized when collected. Commitment
fees and costs relating to commitments whose likelihood of exercise is remote
are recognized over the commitment period on a straight-line basis. If the
commitment is subsequently exercised during the commitment period, the
remaining unamortized commitment fee at the time of exercise is recognized over
the life of the loan as an adjustment of yield.
Loans Held for Sale:
Included in loans held for sale are any loans which the Bank believes may
be involved in interest rate risk management or other decisions which might
reasonably result in such loans not being held until maturity. Any such
conforming loans are transferred to loans held for sale and valued at the lower
of aggregrate cost or market, including considering of forward commitments to
sell, until ultimate disposition.
The FSAB issued SFAS No. 125 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," as amended by SFAS No.
127, which provides accounting guidance on transfers of financial assets,
servicing of financial assets and extinguishments of liabilities occurring
after December 31, 1996. The adoption of SFAS No. 125 did not have a material
impact on the Bank's consolidated financial position or results of operations.
Real Estate Owned:
Real estate owned consists of properties acquired through foreclosure.
Real estate owned is stated at the lower of cost or estimated fair value minus
estimated costs to sell. Write-downs of real estate owned which occur after the
initial transfer from the loan portfolio are recorded as expenses of real
estate owned. Costs of holding foreclosed property are charged to expense in
the current period, except for significant property improvements which are
capitalized to the extent that carrying value does not exceed estimated fair
value. Real estate held for investment is carried at the lower of cost,
including cost of improvements and amenities incurred subsequent to
acquisition, or net realizable value
Income Taxes:
The Bank records deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
F-12
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: -- (Continued)
Office Properties and Equipment:
Land is carried at cost. Office properties and equipment are recorded at
cost less accumulated depreciation. Depreciation is computed based on cost
using the straight-line method over estimated useful lives of 25-50 years for
buildings, 10-25 years for land improvements and 3-10 years for office
equipment. Maintenance and repair of property and equipment are charged to
operations. Major improvements are capitalized.
Excess of Acquisition Cost Over Fair Value of Assets Acquired:
Excess of acquisition cost over fair value of assets acquired is
recognized at cost, net of amortization. The asset is being amortized over 19
years using the straight-line method.
Financial Statement Presentation:
Certain items in prior year financial statements have been reclassified to
conform to the 1997 presentation.
Advertising:
Advertising costs are charged to operations when incurred and amounted to
$81,400, $62,121 and $75,970 for the years ended December 31, 1997 and 1996 and
September 30, 1995, respectively.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
The principal estimate that is susceptible to significant change in the
near term relates to the allowance for loan losses. The evaluation of the
adequacy of the allowance for loan losses includes an analysis of the
individual loans and overall risk characteristics and size of the different
loan portfolios, and takes into consideration current economic and market
condition, the capability of specific borrowers to pay specific loan
obligations as well as current loan collateral values. However, actual losses
on specific loans, which also are encompassed in the analysis, may vary from
estimated losses.
Per Share Information:
Earnings per share have been calculated based on the weighted average
common shares outstanding for the respective periods less the uncommitted ESOP
shares. The number of shares used in the computation of earnings per share for
the years ended December 31, 1997 and 1996 was 1,165,105 and 1,152,328,
respectively.
In February 1997, the FSAB issued SFAS No. 128, "Earnings per Share." SFAS
No. 128 establishes standards for computing and presenting earnings per share
(EPS) and applies to entities with publicy held common stock or potential
common stock. This statement simplifies the standards for computing EPS
previously found in Accounting Principles Board (APB) Opinion No. 15, "Earnings
per share," and makes them comparable to international EPS standards. It
replaces the presentation of primary EPS with a presentation of basic EPS and
requires dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. SFAS No. 128 is
effective for financial statements issued for periods ending after December 15,
1997, including interim periods; earlier application is not permitted. This
statement requires restatement of all prior period EPS and diluted EPS and did
not have a material impact on the Bank.
F-13
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: -- (Continued)
Long-Lived Assets:
In March 1995, the FASB issued SFAS No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed of, which
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets
carrying amount. SFAS No. 121 also addresses the accounting for long-lived
assets that are expected be disposed of. Pennsylvania Savings Bank adopted SFAS
No. 121 in the first quarter of 1996. The adoption of SFAS No. 121 did not have
a material effect on Pennsylvania Saving Bank's operations.
Stock-Based Compensation:
SFAS No. 123 "Accounting for Stock-Based Compensation," encourages, but
does not require companies to record compensation cost for stock-based employee
compensation plans at fair value. The Bank has elected to continue to account
for stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Accordingly, compensation cost for
stock options is measured as the excess, if any, of the quoted market price of
the Bank's stock at the date of the grant over the amount an employee must pay
to acquire the stock.
Cash deposited in Financial Institutions:
The Bank maintains cash balances at other financial institutions in the
Philadelphia regional area. Accounts at these financial institutions are
insured by the Federal Deposit Insurance Corporation up to $100,000. In the
normal course of business, the Bank may have deposits that exceed the insured
balance.
3. INVESTMENTS AND MORTGAGE-BACKED SECURITIES:
The following is a summary of the Bank's investment in available-for-sale
and held-to-maturity securities;
<TABLE>
<CAPTION>
Available-for-Sale
December 31, 1997
-------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Investment Securities:
Equity:
Investment in mutual funds ...................... $ 2,354,210 $ 11,884 $ -- $ 2,366,094
Debt:
FNMA .......................................... 998,186 12,876 1,011,062
Federal Farm Credit ........................... 2,000,000 11,642 2,011,642
SLMA .......................................... 1,000,000 (5,843) 994,157
FHLB Notes .................................... 7,995,161 23,272 8,018,433
----------- -------- -----------
11,993,347 47,790 (5,843) 12,035,294
----------- -------- --------- -----------
14,347,557 59,674 (5,843) 14,401,388
----------- -------- --------- -----------
Mortgage-backed Securities:
FNMA .......................................... 2,227,373 (64,963) 2,162,410
FHLMC ......................................... 777,413 (6,019) 771,394
----------- --------- -----------
3,004,786 (70,982) 2,933,804
----------- --------- -----------
Total Available-for- Sale Securities ......... 17,352,343 59,674 (76,825) 17,335,192
----------- -------- --------- -----------
</TABLE>
F-14
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
3. INVESTMENTS AND MORTGAGE-BACKED SECURITIES: -- (Continued)
<TABLE>
<CAPTION>
Held-to-Maturity
December 31, 1997
-------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------ -------------- -------------
<S> <C> <C> <C> <C>
Investment Securities:
Debt:
FNMA ....................................... $ 1,000,000 $ 7,306 $ -- $ 1,007,306
FHLB Notes ................................. 7,219,223 8,110 -- 7,227,333
----------- -------- --------- -----------
8,219,223 15,416 -- 8,234,639
----------- -------- --------- -----------
Mortgage-backed Securities:
GNMA ....................................... 1,979,474 105,576 2,085,050
FHLMC ...................................... 88,585 8,687 -- 97,272
2,068,059 114,263 -- 2,182,322
----------- -------- --------- -----------
Total Held-to-Maturity Securities ......... 10,287,282 129,679 -- 10,416,961
----------- -------- --------- -----------
TOTAL INVESTMENTS AND
MORTGAGE-BACKED
SECURITIES ............................. $27,639,625 $189,353 ($ 76,825) $27,752,153
=========== ======== ========= ===========
</TABLE>
The following is a summary of the Bank's investment in available-for-sale
and held-to-maturity securities;
<TABLE>
<CAPTION>
Available-for-Sale
December 31, 1996
-------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Investment Securities:
Equity:
Investment in mutual funds ..................... $ 2,304,878 $ 47,318 $ -- $ 2,352,196
Debt:
SLMA ......................................... 1,000,000 (20,466) 979,534
FNMA Notes ................................... 3,000,000 (15,448) 2,984,552
----------- ---------- -----------
4,000,000 (35,914) 3,964,086
----------- ---------- -----------
6,304,878 47,318 (35,914) 6,316,282
----------- -------- ---------- -----------
Mortgage-backed Securities:
FNMA ......................................... 2,529,793 (110,404) 2,419,389
FHLMC ........................................ 792,065 (17,614) 774,451
3,321,858 (128,018) 3,193,840
----------- ---------- -----------
Total Available-for-Sale Securities ......... 9,626,736 47,318 (163,932) 9,510,122
----------- -------- ---------- -----------
</TABLE>
F-15
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
3. INVESTMENTS AND MORTGAGE-BACKED SECURITIES: -- (Continued)
<TABLE>
<CAPTION>
Held-to-Maturity
December 31, 1996
--------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
Investment Securities:
Debt:
Federal Farm Credit ......................... $ 657,046 $ -- ($ 6) $ 657,040
FNMA ........................................ 2,999,456 3,510 3,002,966
FHLMC ....................................... 1,000,000 155 1,000,155
FHLB Notes .................................. 8,000,313 (32,471) 7,967,842
----------- --------- -----------
12,656,815 3,665 (32,477) 12,628,003
----------- -------- --------- -----------
Mortgage-backed Securities:
Collateralized mortgage obligations ......... 227,494 (2,849) 224,645
GNMA ........................................ 2,355,143 89,774 2,444,917
FHLMC ....................................... 165,807 16,163 181,970
----------- -------- -----------
2,748,444 105,937 (2,849) 2,851,532
----------- -------- --------- -----------
Total Held-to-Maturity Securities .......... 15,405,259 109,602 (35,326) 15,479,535
----------- -------- --------- -----------
TOTAL INVESTMENTS AND
MORTGAGE-BACKED
SECURITIES .............................. $25,031,995 $156,920 ($ 199,258) $24,989,657
=========== ======== ========= ===========
</TABLE>
Assets, principally securities, carried at approximately $2,841,107 and
$1,536,188 at December 31, 1997 and 1996, respectively were pledged to secure
deposits as required or permitted by law.
F-16
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
3. INVESTMENTS AND MORTGAGE-BACKED SECURITIES: -- (Continued)
The amortized cost and estimated market values of securities at December
31, 1997 and 1996 by contractual maturities, are as follows:
<TABLE>
<CAPTION>
Estimated
Amortized Market
Cost Value
-------------- --------------
<S> <C> <C>
December 31, 1997:
Due less than one year ........................ $18,214,445 $18,249,608
Due after one year through five years ......... 1,998,125 2,020,325
----------- -----------
20,212,570 20,269,933
Mutual Funds .................................. 2,354,210 2,366,094
Mortgage-backed securities .................... 5,072,845 5,116,126
----------- -----------
$27,639,625 $27,752,153
=========== ===========
December 31, 1996:
Due less than one year ........................ $14,156,815 $14,077,913
Due after one year through five years ......... 2,500,000 2,514,176
----------- -----------
16,656,815 16,592,089
Mutual Funds .................................. 2,304,878 2,352,196
Mortgage-backed securities .................... 6,070,302 6,045,372
----------- -----------
$25,031,995 $24,989,657
=========== ===========
</TABLE>
Proceeds from sale of investment securities available-for-sale during the
years ended December 31, 1997 and 1996 and September 30, 1995 totaled
$1,000,000 and $3,000,000 and $700,000, respectively. The proceeds for all
periods were the result of security call options which were exercised and no
gains or losses were realized on those sales.
4. LOANS RECEIVABLE:
Loans receivable consist of the following:
December 31,
-------------------------------
1997 1996
-------------- --------------
Real Estate Loans:
One-to-four family .................... $44,940,010 $45,017,742
Five or more family residence ......... 702,055 654,292
Construction loans .................... 2,597,061 660,898
Nonresidential ........................ 11,420,738 5,575,209
----------- -----------
59,659,864 51,908,141
Consumer loans ......................... 1,201,351 1,016,277
Commercial loans ....................... 1,907,393 368,413
----------- -----------
62,768,608 53,292,831
Less:
Unearned fees and discounts ........... (477,979) (495,686)
Undisbursed loan proceeds ............. (137,677) (4,712)
Allowance for loan losses ............. (237,884) (206,884)
----------- -----------
$61,915,068 $52,585,549
=========== ===========
F-17
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
4. LOANS RECEIVABLE: -- (Continued)
Loans receivable at December 31, 1997 and 1996 includes $55,289,037 and
$48,700,787 of fixed rate loans and $7,479,571 and $4,592,044 of adjustable
rate loans, respectively.
A summary of loan maturities at December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Multi-Family
and Consumer
Commercial and
One to Four Real Commercial Total
Family Estate Construction Business Loans
------------- ------------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Amounts due:
Non-accrual ...................... $ 1,497,050 $ 396,662 $ -- $ -- $ 1,893,712
----------- ----------- ---------- ---------- -----------
Within one year .................. 2,070,509 1,230,528 2,597,061 2,513,640 8,411,738
----------- ----------- ---------- ---------- -----------
After one year:
1 to 3 years .................... 694,583 1,639,735 281,848 2,616,166
3 to 5 years .................... 2,147,317 6,183,775 263,842 8,594,934
5 to 10 years ................... 4,059,398 1,162,408 49,414 5,271,220
Over 10 years ................... 34,471,153 1,509,685 35,980,838
----------- ----------- ---------- ---------- -----------
Total due after one year ......... 41,372,451 10,495,603 595,104 52,463,158
----------- ----------- ---------- ---------- -----------
TOTAL AMOUNTS DUE ................ $44,940,010 $12,122,793 $2,597,061 $3,108,744 $62,768,608
=========== =========== ========== ========== ===========
</TABLE>
A summary of changes in the allowance for possible loan losses is as
follows:
<TABLE>
<CAPTION>
December 31, September 30,
--------------------------- --------------
1997 1996 1995
----------- ------------- --------------
<S> <C> <C> <C>
BALANCE, BEGINNING OF PERIOD ............ $ 206,884 $ 207,589 $ 207,589
Provision charged to operation ......... 60,000 132,633 26,937
Charged off ............................ (29,000) (133,338) (26,937)
--------- ---------- ---------
BALANCE, END OF PERIOD ................. $ 237,884 $ 206,884 $ 207,589
========= ========== =========
</TABLE>
The provision for loan losses charged to expense is based upon past loan
and loss experience and an evaluation of potential losses in the current loan
portfolio, including the evaluation of impaired loans under SFAS Nos. 114 and
118. A loan is considered to be impaired when, based upon current information
and events, it is probable that the Bank will be unable to collect all amounts
due according to the contractual terms of the loan. As of December 31, 1997 and
1996, 100% of the impaired loan balance was measured for impairment based on
the fair value of the loans' collateral. Impairment losses are included in the
provision for loan losses. SFAS Nos. 114 and 118 do not apply to large groups
of smaller balance homogeneous loans that are collectively evaluated for
impairment, except for those loans restructured under a trouble debt
restructuring. Loans collectively evaluated for impairment include consumer
loans and residential real estate loans. At December 31, 1997, the Bank's
impaired loans consisted of two commercial real estate loans with a total
recorded balance of $321,052 for which specific allowances of $16,053 has been
established. At December 31, 1996, the Bank's impaired loans consisted of
smaller balance residential mortgage loans.
<PAGE>
Loans on which the accrual of interest has been discontinued amounted to
$1,893,711 and $769,995 at December 31, 1997 and 1996, respectively. If
interest on those loans had been accrued, accrued interest would have increased
by $352,516 and $175,423 at December 31, 1997 and 1996, respectively and income
would have increased by $116,138 and $60,724 for the years ended December 31,
1997 and 1996, respectively.
Certain directors and officers of the Bank have loans with the Bank. Such
loans were made in the ordinary course of business and do not represent more
than a normal risk of collection. Loans to officers and directors
F-18
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
4. LOANS RECEIVABLE: -- (Continued)
amounted to $1,177,541 and $324,178 at December 31, 1997 and 1996,
respectively. During the years ended December 31, 1997 and 1996 loans of
$1,045,000 and $-0-, respectively, were disbursed to executive officers and
trustees, while principal repayments of $191,637 and $8,391 were received in
those years, respectively.
5. LOANS HELD FOR SALE:
Loans held for sale are as follows:
<TABLE>
<CAPTION>
December 31, 1997
-----------------------------------------------------------
Gross Gross Fair
unrealized unrealized Market
Cost Gains Losses Value
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Residential mortgage loans ......... $6,574,585 $ -0- $ -0- $6,574,585
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
-----------------------------------------------------------
Gross Gross Fair
unrealized unrealized Market
Cost Gains Losses Value
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Residential mortgage loans ......... $4,597,700 $ -0- $ -0- $4,597,700
</TABLE>
6. ACCRUED INTEREST RECEIVABLE:
A summary of accrued interest receivable is as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Loans .............................. $ 687,128 $ 754,462
FHLB Overnight ..................... 105,533 118,804
Mortgage-backed securities ......... 28,571 35,049
Investment securities .............. 463,870 308,642
---------- ----------
$1,285,102 $1,216,957
========== ==========
</TABLE>
<PAGE>
7. OFFICE PROPERTIES AND EQUIPMENT:
Office properties and equipment are summarized by major classification as
follows:
<TABLE>
<CAPTION>
December 31,
---------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
Land, buildings and improvements .......... $ 1,856,499 $ 1,793,292
Furniture, fixtures and equipment ......... 1,329,386 1,215,859
------------ ------------
3,185,885 3,009,151
Less accumulated depreciation ............. (1,856,740) (1,735,703)
------------ ------------
$ 1,329,145 $ 1,273,448
============ ============
</TABLE>
Depreciation expense was $121,037, $89,943 and $87,475 for the years ended
December 31, 1997 and 1996 and September 30, 1995, respectively.
8. REAL ESTATE OWNED -- ACQUIRED THROUGH SETTLEMENT OF LOANS:
Real estate owned consists of the following:
December 31,
-------------------------
1997 1996
----------- -----------
Real estate acquired through
settlement of loans ................. $456,528 $464,651
======== ========
F-19
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
9. FEDERAL HOME LOAN BANK STOCK:
The Bank is a member of the Federal Home Loan Bank System. As a member,
the Bank maintains an investment in the capital stock of the Federal Home Loan
Bank of Pittsburgh in an amount not less than 1% of its outstanding home loans
or 1/20 of its outstanding notes payable, if any, to the Federal Home Loan Bank
of Pittsburgh, whichever is greater, as calculated December 31 of each year.
10. DEPOSITS:
Deposits at December 31, 1997 and 1996 are summarized as follows:
<TABLE>
<CAPTION>
NOTES (Continued) 1997 1996
Weighted Average ---------------------------- ----------------------------
Interest Rate Amount % Amount %
------------------ --------------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Types of Deposits:
Noninterest bearing accounts:
1997 ........................ $ 6,454,066 5.93%
1996 ........................ $ 1,958,303 1.95%
Passbook accounts:
1997 ........................ 3.00% 26,146,377 24.05
1996 ........................ 3.00 26,803,311 26.65
Statement savings accounts:
1997 ........................ 2.49 63,088 .06
1996 ........................ 2.49 28,198 .03
Club accounts:
1997 ........................ 2.00 191,810 .18
1996 ........................ 2.00 202,855 .20
Now accounts:
1997 ........................ .90 5,373,905 4.94
1996 ........................ 1.09 9,104,871 9.05
Money Market: ..................
1997 ........................ 3.57 7,201,284 6.62
1996 ........................ 3.63 6,265,482 6.23
------------ ------
45,430,530 41.78 44,363,020 44.11
------------ ------ ------------ ------
Certificate of deposit:
Less than 4.00%
1997 ........................ 3.00 293,168 .27
1996 ........................ 3.00 319,688 .32
4.00 - 5.00%
1997 ........................ 4.40 1,188,515 1.09
1996 ........................ 4.68 8,154,337 8.11
5.01 - 6.00%
1997 ........................ 5.53 60,737,995 55.86
1996 ........................ 5.46 46,025,469 45.76
6.01 - 7.00%
1997 ........................ 6.77 1,050,766 .97
1996 ........................ 6.64 624,417 .62
7.01 - 8.00%
1997 ........................ 7.85 33,133 .03
1996 ........................ 7.60 1,087,445 1.08
------------ ------
Total of certificates of deposit 63,303,577 58.22 56,211,356 55.89
------------ ------ ------------ ------
TOTAL DEPOSITS .............. $108,734,107 100.00% $100,574,376 100.00%
============ ====== ============ ======
</TABLE>
F-20
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
10. DEPOSITS: -- (Continued)
Certificates of deposit have scheduled maturities as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Within one year ........................ $45,450,499 $40,728,765
One year through two years ............. 14,167,969 10,838,411
Two years through three years .......... 1,571,762 1,947,108
Three years through five years ......... 1,707,871 1,593,958
Five years through ten years ........... 405,476 1,094,302
Over ten years ......................... -- 8,812
----------- -----------
$63,303,577 $56,211,356
=========== ===========
</TABLE>
Interest expense on deposits is comprised of the following:
<TABLE>
<CAPTION>
December 31, September 30,
------------------------------- --------------
1997 1996 1995
-------------- -------------- --------------
<S> <C> <C> <C>
NOW Accounts ....................... $ 90,827 $ 93,641 $ 87,158
Savings Accounts ................... 786,897 829,578 973,300
Money Market Accounts .............. 258,951 199,467 144,885
Certificates of Deposit ............ 3,424,647 2,977,210 2,260,582
---------- ---------- ----------
4,561,322 4,099,896 3,465,925
Early Withdrawal Penalties ......... (27,676) (17,519) (28,782)
---------- ---------- ----------
$4,533,646 $4,082,377 $3,437,143
========== ========== ==========
</TABLE>
The aggregate amount of certificates of deposit accounts with a minimum
denomination of $100,000 was approximately $10,791,394 and $6,240,394 at
December 31, 1997 and 1996, respectively.
The aggregate amount of demand deposits that have been re-classified as
loan balances at December 31, 1997 and 1996 was $88,129 and $104,164,
respectively.
11. INCOME TAX MATTERS:
The Bank and its wholly owned subsidiary file a consolidated federal
income tax return and separate state and local income tax returns on a calendar
year end basis.
F-21
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
11. INCOME TAX MATTERS: -- (Continued)
The provision for income taxes consists of the following:
Year Ended Year Ended
December 31, September 30,
------------------------- --------------
1997 1996 1995
----------- ----------- --------------
Currently payable:
Federal ................ $292,000 $122,000 $324,551
State .................. 16,000 20,000 74,977
-------- -------- --------
308,000 142,000 399,528
Deferred ............... 36,669 59,465 33,131
-------- -------- --------
TOTAL .................. $344,669 $201,465 $432,659
======== ======== ========
The reconciliation between the actual provision for federal and state
income taxes and the amount of income taxes which would have been provided at
statutory rates is as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30,
------------------------- --------------
1997 1996 1995
----------- ----------- --------------
<S> <C> <C> <C>
Expected Income Tax Expense at Federal
tax rate ............................... $ 358,070 $115,675 $371,388
Travel and Entertainment ................. 15,937 25,162 13,987
State Tax net of Federal benefit ......... 10,560 13,200 49,485
Other differences, net ................... (39,898) 47,428 (2,201)
--------- -------- --------
$ 344,669 $201,465 $432,659
========= ======== ========
</TABLE>
Deferred taxes are included in the accompanying statements of financial
condition as of December 31, 1997 and 1996 for the estimated future tax effects
of differences between the financial statement and federal income tax basis of
assets and liabilities given the provisions of currently enacted tax laws.
The net deferred tax assets (liability) consist of the following
components:
December 31,
-----------------------------
1997 1996
------------- -------------
Deferred Tax Assets:
Unrealized loss on available-for-sale
securities .............................. $ 6,860 $ 46,646
Allowance for loan losses ............... 94,754 82,754
Property and equipment .................. -- 11,557
Deferred income ......................... 99,873 119,847
--------- ----------
201,487 260,804
Deferred Tax Liability:
Bad debt expense ........................ (235,508) (235,508)
Property and equipment ......... (17,137
---------
NET DEFERRED TAX ........................ ($ 51,158) $ 25,296
Prior to January 1, 1996, the Bank was allowed a special bad debt
deduction for tax purposes based on a percentage of taxable income (8%) or on
specified experience formulas, subject to certain limitations based upon
F-22
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
11. INCOME TAX MATTERS: -- (Continued)
aggregate loan balances at the end of the year. If the above amounts deducted
were used for purposes other than for loan losses, such as in a distribution in
liquidation, or if the Bank would cease to be a qualified thrift lender under
the tax law, or otherwise, the amounts deducted would be subject to federal
income tax at the then current corporate tax rate.
The special bad debt method of accounting for bad debts for tax purposes
utilized by qualified thrift institutions was repealed effective for tax years
beginning January 1, 1996. Thrift institutions must now use either the direct
write-off or experience method of accounting for bad debts and must treat this
change as a change in accounting method. Any adjustment that is required to be
taken into account because of the change will be determined solely with respect
to the applicable excess reserves of the thrift which will be taken into income
over a six-year period for tax purposes. Pennsylvania Savings Bank qualifies as
a small bank. The Banks applicable excess reserves will be the excess of the
balance of its reserves as of the close of its last tax year beginning before
January 1, 1996 over the greater of (a) its pre-1988 reserves, or (b) what the
thrift's reserves would have been at the close of its last tax year beginning
before January 1, 1996, had the thrift used the experience method. If a Bank
meets the residential loan requirement, the income to be recognized may be
deferred. A Bank meets the residential loan requirement if, for the tax year,
the principal amount of residential loans made by the Bank during the year is
not less than its base amount. The "base amount" generally is the average of
the principal amounts of the residential loans made by the Bank during the six
most recent tax years beginning before January 1, 1996. For the year ended
December 31, 1996, the Bank meets the residential loan requirement and has
elected to deferred recognition of the income.
Prior to January 1, 1988, the Bank was not required and did not record
deferred income taxes on the difference between the allowance for loan losses
reported for financial reporting purposes and the special bad debt deduction
for income tax purposes.
Retained earnings at December 31, 1997 and 1996 includes $2,450,099 for
which no deferred federal income tax liability has been recognized.
Subsequent to December 31, 1987, the base year, and prior to January 1,
1996, the Bank was required to record a deferred tax asset related to the
allowance for loan losses reported for financial reporting purposes and a
deferred tax liability for special bad debt deduction. However, if it is more
likely than not that some portion or all of the deferred tax asset will not be
realized, the deferred tax asset should be reduced by a valuation allowance.
The valuation allowance should be sufficient to reduce the deferred tax asset
to the amount that is more likely than not to be realized.
As required by SFAS No. 109 "Accounting for Income Taxes," the Bank
determined that no valuation reserve was necessary for the net deferred tax
asset since it is more likely than not that the deferred tax asset will be
realized through carryforwards to taxable income in future years and future
reversals of existing temporary differences. The Bank will continue to review
the criteria related to the recognition of deferred tax assets on a quarterly
basis.
The Bank has made additions to the special bad debt deduction allowance
since December 31, 1987 and, therefore, deferred tax liability for the special
bad debt deduction has been recorded in the amount of $235,508 at December 31,
1997 and 1996, respectively.
F-23
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
11. INCOME TAX MATTERS: -- (Continued)
Deferred tax expense results from timing differences in the recognition of
revenue and expense for tax and financial statement purposes. The sources of
these differences are as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, September 30,
-------------------------- --------------
1997 1996 1995
------------- ---------- --------------
<S> <C> <C> <C>
Bad debts ....................... ($ 12,000) $31,035 $ 51,574
Depreciation .................... 28,694 8,455 (11,452)
Deferred loan fees .............. 19,975 19,975 (6,991)
-------- ------- ---------
DEFERRED TAX EXPENSE ......... $ 36,669 $59,465 $ 33,131
======== ======= =========
</TABLE>
12. DIVIDENDS PAID:
On June 30, 1996, the Bank paid a cash dividend of $.0375 per share to
stockholders of record as of June 15, 1996. This dividend was paid from
accumulated net earnings as of June 30, 1996. Subsequently, in September 1996,
the Savings Association Insurance Fund (SAIF) assessed and collected from the
Bank a one time special assessment of $567,000. This assessment eliminated the
Bank's prior earnings and resulted in the bank reporting both significantly
lower net income for the year ended December 31, 1996 and an accumulated
deficit as of December 31, 1996.
13. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 (FDICIA):
FDICIA was signed into law on December 19, 1991 and includes significant
changes to the legal and regulatory environment for insured depository
institutions, including reductions in insurance coverage for certain kinds of
deposits, increased supervision by the federal regulatory agencies, increased
reporting requirements for insured institutions, and new regulations concerning
internal controls, accounting and operations.
The regulations require institutions to have a minimum 4% leverage capital
ratio, a minimum 4% tier 1 risk-based capital ratio and a minimum 8% total
risk-based capital ratio to be considered "adequately capitalized". An
institution is deemed to be "critically undercapitalized" if it has a tangible
equity ratio of 2% or less.
<PAGE>
The following table sets out the Bank's various regulatory capital
categories:
<TABLE>
<CAPTION>
December 31,
1997
-------------------------------------------------------------
Required Actual
--------------------- ------------------------
(Dollars in thousands) % Amount % Amount Excess
- ----------------------------------------- ---------- -------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Tangible equity ratio ................... >2.0% $2,246 13.36% $15,001 $12,755
Leverage capital ratio .................. 6.0 6,739 13.36 15,001 8,262
Total risk-based capital ratio .......... 8.0 4,865 25.06 15,239 10,374
Tier 1 risk-based capital ratio ......... 4.0 2,432 24.67 15,001 12,569
</TABLE>
<TABLE>
<CAPTION>
December 31,
1996
-------------------------------------------------------------
Required Actual
--------------------- ------------------------
% Amount % Amount Excess
---------- -------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Tangible equity ratio ................... >2.0% $2,324 12.24% $14,230 $11,906
Leverage capital ratio .................. 4.0 4,648 12.24 14,230 9,582
Total risk-based capital ratio .......... 8.0 4,003 28.85 14,437 10,434
Tier 1 risk-based capital ratio ......... 4.0 2,002 28.44 14,230 12,228
</TABLE>
F-24
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
14. DIFFERENCES BETWEEN FEDERAL DEPOSITORY INSURANCE CORPORATION CALL REPORT
AND CONSOLIDATED FINANCIAL STATEMENTS:
An adjustment has been made to the accounts which is reflected in the
consolidated financial statements but is not reflected in the Bank's December
Federal Depository Insurance Corporation Call Reports. The adjustment and its
effect on retained earnings are as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Retained earnings per the Bank's December Federal
Depository Insurance Corporation Call Report ............... $ 682,271 ($ 19,574)
Increase in federal and state income tax provision ......... (117,601) (96,803)
Adjustments made to financial statement, subsequently
recorded by Bank ........................................... (18,927) (46,357)
---------- ---------
RETAINED EARNINGS PER ACCOMPANYING
FINANCIAL STATEMENTS ....................................... $ 545,743 ($ 162,734)
========== =========
</TABLE>
15. LEASE COMMITMENTS:
On October 12, 1995, the Bank signed a lease agreement for office and
branch space in center city Philadelphia. The lease commenced on July 1, 1996
and extends for 11 years. Lease expense for this lease for the year ended
December 31, 1997 and 1996 was $265,118 and $79,908.
The Bank was obligated under various other leases. Lease expense for these
leases for the year ended December 31, 1997 and 1996 and September 30, 1995 and
was $37,203, $37,437, and $42,202, respectively.
Minimum annual rentals are as follows:
1998 $ 380,465
1999 352,157
2000 348,651
2001 363,907
2002 374,686
Thereafter 1,761,410
16. RETIREMENT PLANS:
The Bank sponsors the following retirement plans:
A. Defined Benefit Pension Plan:
Covers employees who were at least 21 years of age, with 12 months of
service with the Bank and have accumulated 1,000 hours of service during the
Plan year. The Plan calls for benefits to be paid to eligible employees at
retirement based upon years of service with the Bank and compensation rates
near retirement. Contributions to the Plan reflect benefits attributed to
employees' service. Plan assets consist of common stock, investment grade
corporate bonds and U.S. Government obligations. The Retirement Plan was
"frozen" as of September 30, 1994 and benefits no longer accrue thereunder. No
new employees will be eligible for participation.
F-25
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
16. RETIREMENT PLANS: -- (Continued)
The following table sets forth the Pension Plan's funded status in the
Bank's balance sheet as of December 31, 1997 and 1996:
<TABLE>
<CAPTION>
December 31, December 31,
-------------- -------------
1997 1996
-------------- -------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested obligation ................................................... ($ 642,384) ($ 720,684)
Nonvested ........................................................... (1,390) (3,252)
--------- ---------
Accumulated benefit obligation ...................................... (643,774) (723,936)
--------- ---------
Projected benefit obligation for service rendered to date ........... (643,774) (723,936)
Plan assets at fair value ............................................ 739,135 703,874
--------- ---------
Excess of projected benefit obligation over plan assets .............. 95,361 (20,062)
Unrecognized net gain from past experience different from that assumed
and effects of changes in assumptions ............................... (299,351) (191,732)
Unrecognized prior service cost ...................................... (46,800) (48,471)
Unrecognized obligation at December 31, being recognized over 24 years 104,947 111,121
--------- ---------
ACCRUED PENSION COST ................................................. ($ 145,843) ($ 149,144)
========= =========
</TABLE>
Net pension cost included the following components:
<TABLE>
<CAPTION>
December 31, September 30,
---------------------------- --------------
1997 1996 1995
------------- ------------ --------------
<S> <C> <C> <C>
Interest cost on projected benefit obligation ......... $ 47,172 $ 53,315 $ 56,072
Actuarial return on plan assets ....................... (133,177) (94,606) (117,334)
Net amortization and deferral ......................... 82,703 47,059 76,627
--------- --------- ----------
NET PERIODIC PENSION COST FOR THE YEARS
ENDED DECEMBER 31, 1997 AND 1996 AND SEP-
TEMBER 30, 1995 ...................................... ($ 3,302) $ 5,768 $ 15,365
========= ========= ==========
</TABLE>
The significant actuarial assumptions used in calculating the above
information is as follows:
<TABLE>
<CAPTION>
December 31, September 30,
--------------- --------------
1997 1996 1995
------ ------ --------------
<S> <C> <C> <C>
Weighted average discount rate ...................... 8% 8% 8%
Weighted average rate of compensation ............... N/A N/A 4%
Weighted average expected long-term rate of return on
Plan Assets ........................................ 8% 8% 8%
</TABLE>
Pension contributions were $-0- and $-0- and $51,102 for the years ended
December 31, 1997 and 1996 and September 30, 1995.
The following three employee benefit plans cover all eligible employees,
those with two years of service, (a year of service defined as having at least
1,000 hours of service) and being at least 21 years of age on the first day of
the plan year.
F-26
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
16. RETIREMENT PLANS: -- (Continued)
B. Cash or Deferred Profit-Sharing Plan:
Contributions to this Plan are determined by the participant's written
election to reduce their compensation by no more than 15% of eligible
compensation and also not to exceed code section 401(k) and other limitations
as set by the plan documents.
The Bank may also make discretionary contributions made out of net income.
Bank contributions to the Plan for the year ended December 31, 1997 and
1996 and September 30, 1995 , $-0-, $-0-, $18,190, respectively.
C. Profit-sharing Plan:
Contributions to the Plan are determined annually by the Board of Trustees
based upon net income. Allocation of the contributions to participants is based
upon annual compensation.
Contributions to the Plan for the year ended December 31, 1997 and 1996
and September 30, 1995 were $-0- and $74,894, $111,567, respectively.
D. Employee Stock Ownership Plan ("ESOP"):
Effective October 23, 1995, the Bank has established an ESOP for eligible
employees. The ESOP is a tax-qualified plan subject to the requirements of
ERISA and the Code. Employees with a 12-month period of employment with the
Bank during which they worked at least 1,000 hours and who have attained age 21
are eligible to participate. The ESOP borrowed funds from an unrelated third
party lender and used the funds to purchase 42,780 shares of Common Stock.
The Common Stock purchased by the ESOP serves as collateral for the ESOP
loan. The loan will be repaid principally from the Bank's contributions to the
ESOP over a period of up to seven years. Shares purchased by the ESOP will be
held in a suspense account for allocation among participants as the loan is
repaid. Shares released from the suspense account in an amount proportional to
the repayment of the ESOP loan will be allocated among participants on the
basis of compensation in the year of allocation, up to an annual adjusted
maximum level of compensation (currently $150,000).
Benefits under the ESOP generally become 100% vested after the third year
of service or upon normal retirement (as defined in the ESOP), disability or
death of the participant. If a participant terminates employment for any other
reason prior to fully vesting, his nonvested account balance will be forfeited.
Forfeitures will be reallocated among remaining participating employees in the
same proportion as contributions. Benefits may be payable upon death,
retirement, early retirement disability or separation from service. The Bank's
contributions to the ESOP will not be fixed, so benefits payable under the ESOP
cannot be estimated. The Bank's contributions to the ESOP were recorded as
compensation expense for the year ended December 31, 1997 and 1996 were $91,736
and $97,228, respectively.
Information with respect to the ESOP is as follows:
<TABLE>
<CAPTION>
December 31, September 30,
------------------- --------------
1997 1996 1995
-------- -------- --------------
<S> <C> <C> <C>
Allocated shares ........................... 42,780 42,780 N/A
Committed shares ........................... 13,245 7,132 N/A
Uncommitted shares ......................... 29,535 35,648 N/A
Fair value of unearned ESOP shares ......... 84,561 75,662 N/A
Interest expense incurred .................. 30,607 36,099 N/A
Dividends received ......................... N/A 1,604 N/A
</TABLE>
F-27
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
16. RETIREMENT PLANS: -- (Continued)
E. Management Recognition Plan:
The Bank's Board of Trustees has also adopted a Management Recognition
Plan (the "MRP") effective October 20, 1995, as a method of providing certain
senior executive officers of the Bank with a propriety interest in the Bank, to
such officers for their service and to encourage such persons to remain in the
service of the Bank. Benefits may be granted at the sole discretion of the
Compensation Committee of the Bank's Board of Trustees. The MRP is managed by
trustees who are directors of the Bank and who have responsibility to invest
all funds contributed by the Bank to the trust created for the MRP. The Bank
contributed $254,005 to the MRP trust which enabled the MRP to purchase 21,390
shares of Common Stock. Unless the Compensation Committee of the Board
specifies otherwise, shares granted to MRP participants will be in the form of
restricted stock payable over a five-year period at the rate of 20% of such
shares per year. Compensation expense in the amount of the fair market value of
the common stock at the date of the grant to the employee will be recognized
pro rata over the five years during which the shares are payable. As of
December 31, 1997 and 1996, 21,390 shares have been allocated to individual
employees. For the year ended December 31, 1997 and 1996, the Bank recorded
compensation expense of $50,801 and $18,624, respectively for the Management
Recognition Plan.
F. Stock Option Plan:
The Bank's Board of Trustees adopted the Pennsylvania Savings Bank Stock
Option Plan (the "Option Plan") and was approved by a majority of stockholders
on April 30, 1996. The Option Plan provides for the grant of (I) options to
purchase Common Stock intended to qualify as incentive stock options
("Incentive Stock Option") under Section 422 of the Code, and (ii) options that
do not so qualify ("Nonqualified Stock Options"). Pursuant to the Option Plan,
up to 53,475 shares of Common Stock (subject to adjustment) will be reserved
for issuance by the Bank upon exercise of stock options to be granted to
certain officers and employees of the Bank from time to time under the Option
Plan. The purpose of the Option Plan is to give certain officers and employees
an opportunity to acquire Common Stock and thereby help the Bank attract,
retain and motivate key employees and officers.
At April 30, 1996, 29,409 shares of Common Stock were granted at the
market price of $11.87 and on December 31, 1996, 6,450 were granted at the
market price of $13.25. No option was granted in 1997.
If the bank had elected to adopt the accounting provision of SFAS 123 then
compensation cost would have reduced net income and earnings per share by
$241,232 and $.21 in 1996.
The weighted average fair value at date of grant for options granted in
1996 were $6.59 for options granted at April 30th and $7.35 for options granted
at December 31st. The fair value of options at date of grant was estimated
using the Black-Scholes Option Pricing Model with the following assumptions:
expected life 10 years, interest rate 8.00%, volatility 17.00% and dividend
yield of 0.00%. All options expire in 2006. All of the options remained
outstanding at December 31, 1997.
17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Bank is a party to financial instruments with off-balance-sheet risk
in the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit generally
consisting of residential purchase money mortgage commitments, or the unfunded
portion of construction loans in process and standby letter of credit.
Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the loan agreement.
These commitments are comprised of the undisbursed portion of construction
loans and residential loan originations. The Bank's exposure to credit loss
from nonperformance by the other party to the financial instruments for
commitments to extend credit is represented by the contractual
F-28
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK: -- (Continued)
amount of those instruments. The Bank uses the same credit policies in making
commitments and conditional obligations as it does for on-balance-sheet
instruments. Generally, collateral, usually in the form of real estate, is
required to support financial instruments with credit risk.
18. SIGNIFICANT CONCENTRATIONS OF CREDIT RISK:
The Bank grants mortgage, consumer and construction loans primarily to
customers in Southeastern Pennsylvania and Southern New Jersey. Although the
Bank has a diversified loan portfolio, a substantial portion of its customers'
ability to honor their contracts is dependent upon the local economy. The
Bank's net investment in loans is subject to a significant concentration of
credit risk given that the investment is primarily within a specific geographic
area.
As of December 31, 1997 and 1996, the Bank had a net investment of
$61,915,068 and $52,585,549, respectively, in loans receivable. These loans
possess an inherent credit risk given the uncertainty regarding the borrower's
compliance with the terms of the loan agreement. To reduce credit risk, the
loans are secured by varying forms of collateral, including first mortgages on
real estate, liens on personal property, savings accounts, etc. It is generally
Bank policy to file liens on titled property taken as collateral on loans. In
the event of default, the Bank's policy is to foreclose or repossess collateral
on which it has filed liens.
In the event that any borrower completely failed to comply with the terms
of the loan agreement and the related collateral proved worthless, the Bank
would incur a loss equal to the loan balance.
19. COMMITMENTS:
In the normal course of business the Bank makes various commitments and
incurs certain contingent liabilities which are not reflected in the
accompanying financial statements. These commitments and contingent liabilities
include open-end credit available. At December 31, 1997 and 1996, the Bank's
customers had unused lines of credit available of $1,134,820 and $830,247,
respectively.
Outstanding commitments to originate loans are as follows:
December 31,
---------------------------
1997 1996
------------ ------------
First mortgage loans:
Fixed rates ............ $ 521,095 $ 121,590
Variable rates ......... 2,468,000 -0-
---------- ---------
$2,989,095 $ 121,590
========== =========
Commitments under standby letters of credit totaled approximately $387,694
and $565,948 at December 31, 1997 and 1996, respectively.
20. FAIR VALUE OF FINANCIAL INSTRUMENTS:
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," requires the disclosure of the fair value
of financial instruments, both assets and liabilities recognized and not
recognized in the statement of financial position.
A financial instrument is defined as cash, evidence of an ownership
interest in equity, or a contract that both imposed on one entity a contractual
obligation to deliver cash or another financial instrument to a second entity
or to exchange other financial instruments on potentially unfavorable terms
with the second entity, conveys to that second entity a contractual right to
receive cash or another financial instrument from the first entity or the
exchange of other financial instruments on potentially favorable terms with the
first entity.
F-29
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
20. FAIR VALUE OF FINANCIAL INSTRUMENTS: -- (Continued)
The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing parties,
other than in a forced sale or liquidation. Quoted market prices should be used
when available, if not available management's best estimate of fair value may
be based on quoted market price of financial instruments with similar
characteristics or on valuation techniques, such as using the present value of
estimated future cash flows using a discount rate commensurate with the
corresponding risk associated with those cash flows. These techniques are
significantly affected by the assumptions used, including the discount rate and
estimates of future cash flows and future economic conditions. In that regard,
the fair value estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in immediate settlement of
the instrument. In addition, these estimates are only indicative of individual
financial instruments' values and should not be considered an indication of the
fair value of the Bank taken as a whole. Statement No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements.
The following tables represents the carrying value and fair market value
of financial instruments as of December 31, 1997:
<TABLE>
<CAPTION>
Carrying Fair
Amount Value
-------------- --------------
<S> <C> <C>
Assets:
Cash and cash equivalents ............................. $27,888,650 $27,888,650
Investments securities available-for-sale ............. 14,401,388 14,401,388
Mortgage-backed securities available-for-sale ......... 2,933,804 2,933,804
Investment securities held-to-maturity ................ 8,219,223 8,234,639
Mortgage-backed securities held-to-maturity ........... 2,068,059 2,182,322
Loans receivable - net ................................ 61,915,068 61,915,068
Loans Held for Sale ................................... 6,574,585 6,574,585
Federal Home Loan Bank stock .......................... 559,900 559,900
Liabilities:
NOW, MMDA and Passbook accounts ....................... 45,430,530 45,430,530
Certificate of Deposits ............................... 63,303,577 63,303,577
</TABLE>
The following tables represents the carrying value and fair market value
of financial instruments as of December 31, 1996:
<TABLE>
<CAPTION>
Carrying Fair
Amount Value
-------------- --------------
<S> <C> <C>
Assets:
Cash and cash equivalents ............................. $31,622,465 $31,622,465
Investments securities available-for-sale ............. 6,316,282 6,316,282
Mortgage-backed securities available-for-sale ......... 3,193,840 3,193,840
Investment securities held-to-maturity ................ 12,656,815 12,628,003
Mortgage-backed securities held-to-maturity ........... 2,748,444 2,851,532
Loans receivable - net ................................ 52,585,549 52,585,549
Loans Held for Sale ................................... 4,597,700 4,597,700
Federal Home Loan Bank stock .......................... 533,600 533,600
Liabilities:
NOW, MMDA and Passbook accounts ....................... 44,363,020 44,363,020
Certificate of Deposits ............................... 56,211,356 56,211,356
</TABLE>
The following methods and assumptions, where practical to implement as
noted, were used by the Bank in estimating its fair value for those assets.
Cash and Cash Equivalents:
The carrying amounts reported in the statement of financial condition for
cash and cash equivalents approximate the fair value for those assets.
F-30
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
20. FAIR VALUE OF FINANCIAL INSTRUMENTS: -- (Continued)
Investments Securities:
The fair value for investments are based on quoted market prices.
Mortgage-backed Securities:
The fair value of mortgage-backed securities issued by quasi-governmental
agencies is based on quoted market prices.
Loans Receivable:
The Bank estimates that the fair value of its real estate, consumer and
commercial loans approximates the carrying amount. The carrying amount is
adjusted for the estimated future possible loan losses through a valuation
allowance. The Bank's real estate loan portfolio was $59,659,864 and
$51,908,141 at December 31, 1997 and 1996, respectively with rates ranging from
6.00% to 18.00% and maturities through 30 years. The Bank's consumer loan
portfolio was $1,201,351 and $1,016,277 at December 31, 1997 and 1996,
respectively with rates ranging from 5.00% to 22.53% with maturities through 18
years. The Bank's commercial loan portfolio was $1,907,393 and $368,413 at
December 31, 1997 and 1996, respectively with rates ranging from 8.25% to
10.25% with maturities through one year and monthly repayment terms.
Deposits:
The fair value of deposits with no stated maturity, such as non-interest
bearing demand deposits, NOW accounts, savings accounts and money market
accounts, is equal to the amount payable on demand as of December 31, 1997 and
1996. The Bank has not determined the fair values of its time deposits (e.g.
certificates of deposit) due to it not being practical to make such estimates
based on varying interest rates and maturities involved and the excessive cost
that would be incurred. Time deposits were $63,303,577 and $56,211,356 at
December 31, 1997 and 1996, respectively with rates ranging from 3.00% to
8.00%.
Commitments to Extend Credit and Letters to Credit:
The majority of the Bank's commitments to extend credit and letters of
credit carry current market interest rates if converted to loans. Because
commitments to extend credit and letters of credit are generally unassignable
by either the Bank or the borrower, they only have value to the Bank and the
borrower. The Bank is unable to estimate the fair value of the recorded
deferred fee amounts.
21. EARNINGS PER SHARE:
<TABLE>
<CAPTION>
December 31, 1997
---------------------------------------
Per
Income Shares Share
Numerator Denominator Amount
----------- ------------- ---------
<S> <C> <C> <C>
Basic EPS:
Income available to Common Stockholders . $708,477 1,165,105 $ .61
Effect of Dilute Securities:
Stock options ........................... -0- 14,573
-------- ---------
Diluted EPS
Income available to common stockholders
and assumed conversions ............... $708,477 1,179,678 $ .60
======== =========
</TABLE>
F-31
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
21. EARNINGS PER SHARE: -- (Continued)
<TABLE>
<CAPTION>
December 31, 1996
---------------------------------------
Per
Income Shares Share
Numerator Denominator Amount
----------- ------------- ---------
<S> <C> <C> <C>
Basic EPS:
Income available to Common Stockholders . $138,757 1,152,328 $ .12
Effect of Dilute Securities:
Stock options ........................... -0- -0-
-------- ---------
Diluted EPS
Income available to common stockholders
and assumed conversions ............... $138,757 1,152,328 $ .12
======== =========
</TABLE>
22. NEW PRONOUNCEMENTS:
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting of
Comprehensive Income," which establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of financial statements. This statement also 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. This
statement is effective for fiscal years beginning after December 15, 1997.
Earlier application is permitted. Reclassification of financial statements for
earlier periods provided for comparative purposes is required. The Bank does
not anticipate that adoption of SFAS No. 130 will have a material impact on the
Bank's financial statements.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosure about Segments of an Enterprise and Related Information"
(SFAS No. 131), which establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that such enterprises report selected information about
operating segments in interim financial reports issued to shareholders. This
statement also establishes standards for related disclosures about products and
services, geographic areas, and major customers. This statement requires the
reporting of financial and descriptive information about the enterprise's
reportable operating segments. This statement is effective for financial
statements for periods beginning after December 15, 1997. In the initial year
of application, comparative information for earlier years is to be restated.
The Bank does not anticipate that the adoption of SFAS No. 131 will have a
material impact on the Bank's financial statements.
23. FINAL SAVINGS ASSOCIATION INSURANCE FUND LEGISLATION:
On September 30, 1996, the Deposit Insurance Funds Act of 1996 (the Funds
Act) was signed into law which, among other things, imposed a special one-time
assessment to recapitalize the Savings Association Insurance Fund (SAIF). As
required by the Funds Act, the Federal Deposit Insurance Corporation (FDIC)
imposed a special assessment on SAIF-assessable deposits held on March 31,
1995, payable November 27, 1996. The special assessment was recognized as a
tax-deductible expense in 1996. The Bank recorded a special after-tax charge of
$374,397 ($567,269 before tax) as a result of the FDIC special assessment.
24. SUBSEQUENT EVENT:
On July 17, 1997, the Board of Trustees of the Bank adopted a Plan of
Conversion. The Board amended the Plan of Conversion on September 25, 1997 (as
amended, the "Plan"). Under the Plan (i) PSB Mutual Holding Company will
convert to an interim Pennsylvania stock savings bank ("Interim A") and
simultaneously merge with and into the Bank, pursuant to which PSB Mutual
Holding Company will cease to exist and the outstanding shares of the Bank's
Common Stock held by PSB Mutual Holding Company (615,250 shares or 51.5%
F-32
<PAGE>
PENNSYLVANIA SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996 AND SEPTEMBER 30, 1995 -- (Continued)
24. SUBSEQUENT EVENT: -- (Continued)
of the outstanding Bank Common Stock) will be cancelled, and (ii) an interim
Pennsylvania stock savings bank ("Interim B") will be formed as a wholly-owned
subsidiary of PSB Bancorp, Inc., a newly formed a holding company, and will
merge with and into the Bank resulting in the Bank becoming a wholly-owned
subsidiary of PSB Bancorp, Inc. Any outstanding shares of Bank Common Stock not
owned by PSB Mutual Holding Company (579,390 shares or 48.5% of the outstanding
Bank Common Stock) will be converted into shares of PSB Bancorp, Inc. at an
exchange ratio determined in accordance with the Plan. In conjunction with the
conversion being undertaken pursuant to the Plan, PSB Bancorp, Inc. will offer
up to 1,610,000 shares of its common stock (subject to adjustment up to
1,851,500 shares under certain circumstances) in a subscription and community
offering.
F-33
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of
1988 provide that the Holding Company may indemnify any officer or director
acting in his capacity as a representative of the Holding Company who was, is,
or is threatened to be made a party to any action or proceeding against
expenses, judgments, penalties, fines and amounts paid in settlement in
connection with such action or proceeding whether the action was instituted by
a third party or arose by or in the right of the Holding Company (a derivative
action). Generally, the only limitation on the ability of the Holding Company
to indemnify its officers and directors is if the act violates a criminal
statute (unless the person had no reasonable cause to believe his conduct was
unlawful) or if the officer or director did not act in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests
of the corporation. Indemnification is not permitted in a derivative action if
the officer or director in question has been adjudged liable to the
Corporation, unless such indemnification is approved by the court.
The Holding Company's Bylaws provide a right to indemnification to the
full extent permitted by law, for expenses (including attorney's fees),
damages, punitive damages, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by any director or officer whether
or not the indemnified liability arises or arose from any threatened, pending
or completed proceeding by or in the right of the Holding Company (a derivative
action) by reason of the fact that such director or officer is or was serving
as a director, officer, employee or agent of the Holding Company or, at the
request of the Holding Company, as a director, officer, partner, fiduciary or
trustee of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. The Holding Company's Bylaws provide for the
advancement of expenses to an indemnified party upon receipt of an undertaking
by the party to repay those amounts if it is finally determined that the
indemnified party is not entitled to indemnification.
The Holding Company's Bylaws authorize the Holding Company to take steps
to ensure that all persons entitled to the indemnification are properly
indemnified, including, if the Board of Directors so determines, purchasing and
maintaining insurance. As of the date of this Prospectus, no such insurance has
been purchased.
Item 25. Other Expenses of Issuance and Distribution
The estimated expenses payable by the Holding Company in connection with
the issuance and distribution of the securities being registered (other than
underwriting discounts and commissions and the Underwriter's non-accountable
expense allowance) are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee ......... $ 10,131.61
Edgar, printing, copying, postage, mailing .................. 60,000.00
Appraisal/business plan fees and expenses ................... 30,000.00
Securities marketing fees ................................... 100,000.00
Securities marketing firm legal fees ........................ 30,000.00
Data processing fees and expenses ........................... 7,000.00
Legal fees and expenses ..................................... 150,000.00
Accounting fees and expenses ................................ 75,000.00
Blue Sky fees and expenses (including legal fees) ........... 7,000.00
Total ..................................................... $ 475,000.00
</TABLE>
II-1
<PAGE>
Item 26. Recent Sales of Unregistered Securities
Within the past three years no securities of the Holding Company have been
sold without registration under the Securities and Exchange Act of 1933 (the
"Act"), as amended.
Item 27. Exhibits
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------------ ------------------------------------------------------------------------------------ -------
<S> <C> <C>
1.1** Form of Agency Agreement.
2* PSB Mutual Holding Company and Pennsylvania Savings Bank Plan of Conversion
From Mutual Holding Company to Stock Holding Company and Agreement and Plan of
Reorganization.
3.1* Articles of Incorporation of PSB Bancorp, Inc.
3.2* Bylaws of PSB Bancorp, Inc.
4.1** Specimen Stock Certificate representing the Common Stock of PSB Bancorp, Inc.
5.1 Form of Opinion of Stevens & Lee regarding legality of securities being registered.
5.2* Subscription Rights Letter of RP Financial, L.C.
8.1 Form of Opinion of Stevens & Lee regarding certain tax matters.
10.1** Pennsylvania Savings Bank Retirement Plan.
10.2 Pennsylvania Savings Cash or Deferred Profit Sharing Plan.
10.3** Pennsylvania Savings Bank Profit Sharing Plan.
10.4** Employment Agreement with Vincent J. Fumo.
10.5** Employment Agreement with Anthony DiSandro.
10.6** Pennsylvania Savings Bank Employee Stock Ownership Plan.
10.7** Lease Agreement between Eleven Colonial Penn Plaza Associates and Pennsylvania
Savings Bank, dated as of October 10, 1995.
10.8** Lease Agreement between Eleven Colonial Penn Plaza Associates and Pennsylvania
Savings Bank, dated as of October 12, 1995.
21.1* Schedule of Subsidiaries.
23.1 Form of Consent of Stevens & Lee (included in its opinion filed as Exhibit 5.1).
23.2 Consent of Stockton Bates & Co., P.C.
23.3 Consent of RP Financial, LC.
24.1* Power of Attorney (included on signature page).
27.1 Financial Data Schedule.
99.1** Appraisal Agreement with RP Financial, LC.
99.2 Appraisal Report of RP Financial, LC.
99.3 Updated Appraisal Report of RP Financial, L.C.
99.4 Order and Acknowledgment Form (contained in the marketing materials included herein
as Exhibit 99.5).
99.5 Solicitation and Marketing Materials.
99.6** Proxy Statement for Special Meeting of Members of PSB Mutual Holding Company.
99.7** Proxy Statement for Special Meeting of Pennsylvania Savings Bank.
</TABLE>
- ------------
*Previously filed.
**To be filed by amendment.
II-2
<PAGE>
Item 28. Undertakings.
The Undersigned registrant hereby undertakes to:
(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act.
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information set forth in the Registration Statement, and
(iii) include any additional or changed material information on the
plan of distribution;
(2) for determining liability under the Act, treat each such
post-effective amendment as a new registration of the securities offered
and the offering of such securities at that time to be the initial bona
fide offering; and
(3) file a post-effective amendment to remove from registration any of
the securities that remain unsold at the termination of this offering.
Insofar as indemnification for liabilities arising under the Act 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 will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes: (12) to provide to the
underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser; (2) that for the
purpose of determining any liability under the Act, treat the information
omitted from the form of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A, and contained in a prospectus filed by
the Registrant pursuant to Rule 424(b)(1) or (4) or 497(b) under the Act as a
part of this Registration Statement as of the time the Securities and Exchange
Commission declares it effective and (3) that for the purpose of determining
any liability under the Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement for the
securities offered in the Registration Statement therein and that the offering
of the securities at that time is the initial bona fide offering of those
securities.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Amendment No. 1 to Form S-1 and has
authorized this Registration Statement to be signed on its behalf by the
undersigned, in the City of Philadelphia, Commonwealth of Pennsylvania on March
23, 1998.
PSB BANCORP, INC.
By /s/ Anthony DiSandro
----------------------------------------
Anthony DiSandro
Chairman and Chief Operating
Officer
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Anthony DiSandro as his/her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him/her and in his/her name, place and stead, in any and all capacities
(until revoked in writing) to sign any and all amendments (including
post-effective amendments and amendments thereto) to this Amendment No.1 to the
Registration Statement on Form S-1 of PSB Bancorp, Inc. and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, acting alone or his substitute, may
lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------------- ----------------------------------- ---------------
<S> <C> <C>
/s/ Vincent J. Fumo* Chairman, Chief Executive Officer March 23, 1998
- -----------------------------
and Director
Vincent J. Fumo
/s/ Anthony DiSandro* President and Chief Operating March 23, 1998
- -----------------------------
Officer
Anthony DiSandro
/s/ Gary Polimeno* Vice President and Treasurer March 23, 1998
- -----------------------------
(Principal Accounting and
Gary Polimeno
Financial Officer)
/s/ Jane Scaccetti Fumo* Director March 23, 1998
- -----------------------------
Jane Scaccetti Fumo
/s/ Roseanne Pauciello* Director March 23, 1998
- -----------------------------
Roseanne Pauciello
* Pursuant to Power-of-Attorney
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ----------- --------------------------------------------------------------------------- -------
<S> <C> <C>
1.1** Form of Agency Agreement.
2* PSB Mutual Holding Company and Pennsylvania Savings Bank Plan of
Conversion From Mutual Holding Company to Stock Holding Company
and Agreement and Plan of Reorganization.
3.1* Articles of Incorporation of PSB Bancorp, Inc.
3.2* Bylaws of PSB Bancorp, Inc.
4.1** Specimen Stock Certificate representing the Common Stock of PSB Ban-
corp, Inc.
5.1 Form of Opinion of Stevens & Lee regarding legality of securities being
registered.
5.2* Subscription Rights Letter of RP Financial, L.C.
8.1 Form of Opinion of Stevens & Lee regarding certain tax matters.
10.1** Pennsylvania Savings Bank Retirement Plan.
10.2 Pennsylvania Savings Cash or Deferred Profit Sharing Plan.
10.3** Pennsylvania Savings Bank Profit Sharing Plan.
10.4** Employment Agreement with Vincent J. Fumo.
10.5** Employment Agreement with Anthony DiSandro.
10.6** Pennsylvania Savings Bank Employee Stock Ownership Plan.
10.7** Lease Agreement between Eleven Colonial Penn Plaza Associates and
Pennsylvania Savings Bank, dated as of October 10, 1995.
10.8** Lease Agreement between Eleven Colonial Penn Plaza Associates and
Pennsylvania Savings Bank, dated as of October 12, 1995.
21.1* Schedule of Subsidiaries.
23.1 Form of Consent of Stevens & Lee (included in its opinion filed as Exhibit
5.1).
23.2 Consent of Stockton Bates & Co., P.C.
23.3 Consent of RP Financial, LC.
24.1* Power of Attorney (included on signature page).
27.1 Financial Data Schedule.
99.1** Appraisal Agreement with RP Financial, LC.
99.2 Appraisal Report of RP Financial, LC.
99.3 Updated Appraisal Report of RP Financial, L.C.
99.4 Order and Acknowledgment Form (contained in the marketing materials
included herein as Exhibit 99.5).
99.5 Solicitation and Marketing Materials.
99.6** Proxy Statement for Special Meeting of Members of PSB Mutual Holding
Company.
99.7** Proxy Statement for Special Meeting of Pennsylvania Savings Bank.
</TABLE>
- ------------
*Previously filed.
**To be filed by amendment.
<PAGE>
Form of Opinion of Stevens & Lee, P.C.
March , 1998
Board of Directors
PSB Bancorp, Inc.
Pennsylvania Savings Bank
Eleven Penn Center
Suite 2601
1835 Market Street
Philadelphia, Pennsylvania 19103
Re: Registration Statement on Form S-1 (SEC File No. 333-37511)
Gentlemen:
In connection with the proposed offering by PSB Bancorp, Inc. (the
"Holding Company") of up to 3,099,728 shares of the Holding Company's common
stock, no par value per share (the "Common Stock"), covered by the Holding
Company's Registration Statement on Form S-1 (No. 333-37511) (the "Registration
Statement"), we, as special counsel to the Holding Company and the Savings Bank,
have reviewed:
1. the Articles of Incorporation of the Holding Company;
2. the Bylaws of the Holding Company;
3. the Plan of Conversion of PSB Mutual Holding Company to a
stock holding company and the simultaneous reorganization of
Pennsylvania Savings Bank to a wholly-owned subsidiary of the
Holding Company;
4. the minute books of the Company;
5. the Registration Statement; and
6. copies of the certificates representing shares of the Common
Stock.
Based upon our review of such documents, it is our opinion that:
1. The Holding Company has been duly incorporated under the laws
of the Commonwealth of Pennsylvania and is validly existing
and in good standing under the laws of such Commonwealth.
2. The 3,099,728 shares of Common Stock covered by the
Registration Statement has been duly authorized and, when
issued and sold for cash pursuant to the terms described in
the Registration Statement, will be legally issued by the
Holding Company and fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to us under the heading "Legal
Matters" in the related Prospectus. In giving this consent, we do not thereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
STEVENS & LEE
<PAGE>
EXHIBIT 8.1
FORM OF TAX OPINION OF STEVENS & LEE, P.C.
March , 1998
Dear Sirs:
We are acting as counsel to PSB Bancorp, Inc. (the "Holding Company"),
in connection with its proposed acquisition, as a wholly-owned subsidiary, of
Pennsylvania Savings Bank, a Pennsylvania-chartered savings bank headquartered
in Philadelphia, Pennsylvania (the "Savings Bank"), upon consummation of (i) the
conversion of PSB Mutual Holding Company (the "MHC") to an interim state stock
savings bank ("Interim A") and its simultaneous merger with and into the Savings
Bank, and (ii) the organization of "Interim B" (an interim state stock savings
bank) as a wholly-owned subsidiary of the Holding Company and its merger with
and into the Savings Bank. In that connection, our opinion as to the material
federal and certain Pennsylvania income tax consequences of such transactions
are as set forth under the section entitled, "The Conversion and the
Reorganization -- Tax Effects," in the Prospectus relating to such transactions
(the "Prospectus").
We hereby consent to the filing of this opinion as Exhibit 8.1 to the
PSB Bancorp, Inc., Registration Statement on Form S-1 of which the Prospectus is
a part and to the use of our name in connection with the section of the
Prospectus identified above.
Very truly yours,
STEVENS & LEE
<PAGE>
AMENDED AND RESTATED
CASH OR DEFERRED
PROFIT SHARING PLAN AND TRUST
BY AND BETWEEN
PENNSYLVANIA SAVINGS BANK
AND
VINCENT J. FUMO, TRUSTEE
AND
ANTHONY DI SANDRO, TRUSTEE
------------------
ARTICLE ONE
PURPOSE, CREATION AND NAME
1.1 WHEREAS, the Employer heretofore established a Cash or Deferred
Profit Sharing Plan and Trust effective December 1, 1983, (hereinafter called
the "Original Effective Date") known as the Pennsylvania Savings Association
Cash or Deferred Profit Sharing Plan and Trust and which plan shall hereinafter
be known as Pennsylvania Savings Bank Cash or Deferred Profit Sharing Plan and
Trust (herein referred to as the "Plan") in recognition of the contribution made
to its successful operation by its employees and for the exclusive benefit of
its eligible employees; and
WHEREAS, under the terms of the Plan and Trust, the Employer has the
ability to amend the Plan and Trust;
NOW, THEREFORE, effective January 1, 1990 except as otherwise provided,
the Employer and the Trustee in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amend the Plan and Trust in its
entirety and restate the Plan and Trust;
The provisions of this Plan shall apply only to an Employee who
terminates employment on or after the effective date of this amendment and
restatement. The rights and benefits, if any, of a former employee shall be
determined in accordance with the prior provisions of the Plan in effect on the
date his employment terminated;
1.2 THIS AGREEMENT, hereby made and entered into this 15th day of
November, 1990, by and between PENNSYLVANIA SAVINGS BANK (herein referred to as
the "Employer") and VINCENT J. FUMO and ANTHONY DI SANDRO (herein referred to as
the "Trustees").
I-1
<PAGE>
INDEX
Page
ARTICLE ONE
Purpose, Creation and Name ............. I-1
ARTICLE TWO
Definitions of Terms ................... II-1
ARTICLE THREE
Eligibility ............................ III-1
ARTICLE FOUR
Contributions and Management of Funds .. IV-1
ARTICLE FIVE
Retirement Benefits .................... V-1
ARTICLE SIX
Disability Benefits .................... VI-1
ARTICLE SEVEN
Death Benefits ......................... VII-1
ARTICLE EIGHT
Separation Benefits .................... VIII-1
ARTICLE NINE
Payment of Benefits .................... IX-1
ARTICLE TEN
Spendthrift Clause ..................... X-1
ARTICLE ELEVEN
Insurance Contracts .................... XI-1
ARTICLE TWELVE
Right to Alter, Amend or Terminate Trust XII-1
ARTICLE THIRTEEN
Loans .................................. XIII-1
i
<PAGE>
Page
ARTICLE FOURTEEN
Trustee ................................. XIV-1
ARTICLE FIFTEEN
Insurer ................................. XV-1
ARTICLE SIXTEEN
No Reversion to Company ................. XVI-1
ARTICLE SEVENTEEN
Direct Transfers and Rollovers .......... XVII-1
ARTICLE EIGHTEEN
Determination of Top-Heavy Status......... XVIII-1
ARTICLE NINETEEN
Miscellaneous Provisions ................ XIX-1
ii
<PAGE>
ARTICLE TWO
DEFINITION OF TERMS
2.1 The following words and terms as used in this Plan and Trust shall
have the meaning set forth below, unless a different meaning is clearly required
by the context.
(a) Actual Deferred Percentage: The total contribution, both
elective and non-elective, allocated to a Participant during
a Plan Year divided by the Compensation of the Participant.
(b) Affiliated Employer: The Employer and any corporation which
is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which includes the
Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in
Section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is a member
of an affiliated service group (as defined in Section 414(m)
of the Code) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant
to regulations under Section 414(o) of the Code.
(c) Age: A person's age at his last birthday.
(d) Aggregate Account: With respect to each Participant, the
value of all accounts maintained on behalf of a Participant,
whether attributable to Employer or Employee contributions,
subject to the provisions of Article XVIII.
(e) Agreement: This instrument with all amendments and
supplements thereto.
(f) Anniversary Date: First day of Plan Year.
(g) Annual Addition: Means the amount allocated to a
Participant's account during the Limitation Year that
constitutes:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
II-1
<PAGE>
(iv) Amounts described in Sections 415 (1) (1) and
419(A)(d)(2) of the Code.
For the purposes of this definition, Employee contributions
are determined without regard to any rollover
contributions.
(h) Average Actual Deferred Percentage: The sum of the Actual
Deferred Percentages of Participants divided by the number
of Participants.
(i) Beneficiary: The person or persons to whom the share of a
deceased Participant's total account is payable, as provided
in the Plan. For purposes of determining whether the Plan is
a Top-Heavy Plan, a Beneficiary of a deceased Participant
shall be considered a Key Employee or a Non-Key Employee, as
the case may be.
(j) Break in Service: For the purposes of eligibility, any
Eligibility Computation Period in which an Employee has no
more than 500 hours of service. For purposes of vesting, any
Vesting Computation Period in which an Employee has no more
than 500 hours of service.
(k) Cash Value: A Cash Value of Contract providing specific
allocations of amounts to individual participants.
(1) Code: The Internal Revenue Code of 1986, as amended or
replaced from time to time.
(m) Company: Pennsylvania Savings Bank
(n) Compensation: Compensation actually paid to or for the
benefit of an Employee during the Plan Year, inclusive of
overtime pay and commissions, but excluding bonuses, except
that in the event Company is an accrual basis taxpayer,
Company may by written resolution elect to use accrued
compensation in lieu of paid compensation. Compensation
shall be such remuneration that is subject to tax under
Section 3101(a) of the Internal Revenue code, without the
dollar limitation of Section 3121(a). However, Compensation
for any Self-Employed Individual shall be equal to his
earned income; that is, the net earnings from
self-employment as defined in Code Section 401(c)(2),
(reduced by Company's deductible contribution made on
behalf of such individual for such year). Effective for Plan
Years beginning after 12/31/88 this Plan shall not take into
consideration a Participants Compensation to the extent it
exceeds 200,000.00, as indexed under Code Section 415(d).
II-2
<PAGE>
In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer
or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be
treated as a single Participant, except that for this
purpose Family Members shall include only the affected
Participant's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the year.
Notwithstanding the above, for any Top-Heavy Plan Year,
Compensation in excess of $200,000 (or such other amount as
the Secretary of the Treasury may designate) shall be
disregarded, except for purposes of determining maximum
permissible voluntary contributions and the Annual Additions
resulting therefrom, and for purposes of satisfying the
minimum contribution or benefit provisions regarding
Top-Heavy Plans, compensation is determined in accordance
with the definition of Compensation contained in Article IV
with respect to limits on maximum contributions or benefits.
(o) Contract: Any individual or group annuity policy or life
insurance policy for and/or on any Plan Participant, or any
unallocated investment contract issued by an insurer.
(p) Contribution: Non-Integrated.
Maximum Contribution: In any Top-Heavy Plan Year, a
Participant otherwise eligible to share in Contributions or
Forfeitures, but who is paid for fewer than 1,000 Hours of
Service, shall be limited to a maximum allocation of
Contributions and Forfeitures of 3% Percent of Compensation
from all the retirement plans maintained by the Company.
Said contribution shall be provided first from a Money
Purchase Pension Plan, if applicable, in an amount equal to
1% of Compensation and the remainder of the 3% contribution
shall next be provided from the Profit Sharing Plan in an
amount equal to 2% of Compensation. In the event said
contribution is not made from the above-mentioned Plans,
said maximum contribution shall be provided by this Plan
maintained by the Company.
If a Participant also participates in another defined
contribution plan maintained by Company, then the Maximum
Contribution referred to above shall be reduced
II-3
<PAGE>
by any allocation made on his behalf to said other
defined contribution plan.
(q) Deferred Compensation: The portion of a Participant's total
Compensation which has been contributed to the Plan in
accordance with the Participant's election pursuant to
Article IV.
(r) Defined Benefit Fraction: A fraction the numerator of which
is the projected annual benefit of the Participant under all
qualified defined benefit Plans of Company (determined as of
the close of the Limitation Year), and the denominator of
which is the lesser of:
(1) the product of 1.25 multiplied by the dollar
limitation in effect for defined benefit plans under
Internal Revenue Code Section 415(b)(1)(A) for such
year, or
(2) the product of 1.4 multiplied by the percentage of the
Participant's high three (3) consecutive years
compensation which may be taken into account under
Internal Revenue Code Section 415(b)(1)(B) with
respect to such Participant under the Plan for
such year.
Notwithstanding the foregoing, for any Top-Heavy Plan Year,
1.0 shall be substituted for 1.25 above if any Non-Key
Employee Participant eligible for an accrual of benefits
who does not have either an allocation of Company
contributions or forfeitures to a defined contribution plan
of at least 7.5 percent of Compensation for such year or an
accrued benefit in a defined benefit plan in which he
participates of not less than the 3% minimum benefit as
provided in Internal Revenue Code Section 416(h)(2)(A)
(ii)(I) (but not both). However, for any Plan Year in which
this Plan is a Super Top-Heavy Plan, 1.0 shall be
substituted for 1.25 in any event.
(s) Defined Contribution Plan Fraction: A fraction the numerator
of which is the sum of the Annual Additions to the
Participant's account(s) under all qualified defined
contribution plans of Company including voluntary
contribution accounts as of the close of the Limitation
Year, and the denominator of which is the sum of the lesser
of the following amounts determined for such year and for
each prior Year of Service with the Company:
II-4
<PAGE>
(1) Such amount as is determined by multiplying 1.25 by the
dollar limitation in effect for the defined
contribution plans under Internal Revenue Code
Subsection 415(c)(1)(A) for such year (determined
without regard to Section 415(c)(6) of the Code), or
(2) 35 percent of the Participant's compensation for such
year.
Notwithstanding the foregoing, for any Top-Heavy Plan Year,
1.0 shall be substituted for 1.25 above if any Non-Key
Employee Participant eligible for any accrual of benefits
does not have either an allocation of Company contributions
and forfeitures of at least 7.5 percent of Compensation for
such year or an accrued benefit in a defined benefit plan in
which he participates of not less than the 3% minimum benefit
as provided in Code Section 416(h)(2)(A)(ii)(I)(but not
both). However, for any Plan Year in which this Plan is a
Super Top-Heavy Plan, 1.0 shall be substituted for 1.25 in
any event.
(t) Determination Date: For purposes of determining if the Plan
is Top-Heavy, the last day of the preceding Plan Year, or in
the case of the first Plan Year, the last day of such Plan
Year.
(U) Early Retirement Date: The first day of the next Plan year
coinciding with or folowing a Participant's 55th birthday,
but preceding Normal Retirement Date.
(v) Effective Date of this Plan: First day of Plan Year
beginning January 1, 1990.
(w) Elective Contribution: The portion of the Contribution
allocated to a Participant as a result of the Participant's
election to reduce his salary during the Plan Year.
(x) Eligibility Computation Period: The consecutive 12 month
period beginning on the date on which the Employee commenced
employment, and successive consecutive 12 month periods
thereafter. An Employee's Employment Commencement Date is
the first day for which the Employee is entitled to be
credited with an Hour of Service from the Employer
maintaining the Plan. If an Employee incurs a Break in
Service and subsequently is credited with additional hours
of service, his Eligibility Computation Period shall be the
consecutive 12 month period beginning with the date on which
he is
II - 5
<PAGE>
first credited with an hour of service after the Break in
Service, and successive consecutive 12 month periods
thereafter.
(y) Employee: Means employees of the Employer, but excludes any
person who is employed as an independent contractor.
Employee shall include leased employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such leased
employees are covered by a plan described in Code Section
414(n)(5) and such leased employees do not constitute more
than 20% of the recipient's non-highly compensated work
force.
(z) Employer: The Company and any corporation which is a member
of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Company; any trade or
business (whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with the
Company; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined
in Section 414(m) of the Code) which includes the Company;
and any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the
Code.
(aa) Excess Deferred Compensation: With respect to any taxable
year of the Participant, the excess of the aggregate amount
of such Participant's Elective Contribution and the
Non-Elective Contribution made on behalf of a Participant
for such taxable year, over the dollar limitation provided
for in Code Section 402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as
an Annual Addition pursuant to Article IV.
(bb) Family Member: With respect to an affected Participant,
such Participant's spouse, such Participant's lineal
descendants and ascendants and their spouses, all as
described in Code Section 414(g)(6)(B).
(cc) 415 compensation: Compensation as defined in Section
4.10(a).
(dd) 414(s) Compensation: With respect to any Employee means his
Deferred Compensation plus 415 Compensation paid during a
Plan Year. 414(s) Compensation in excess of $200,000 shall
be disregarded. Such amount shall be adjusted at the same
time and in such manner as permitted under Code Section
415(d).
II-6
<PAGE>
(ee) Highly Compensated Employee: An Employee who performed
services for the Employer during the "determination year"
and is in one or more of the following groups:
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall
be the immediately preceding twelve-month period.
The "look-back year" shall be the calendar year ending with
or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable)
shall be the period of time, if any, which extends beyond
the "look-back year" and ends on the last day of the Plan
Year for which testing is being performed (the "lag
period"). If the "lag period" is less than twelve months
long, the dollar threshold amounts specified in (b), (c) and
(d) below shall be prorated based upon the number of months
in the "lag period".
For purposes of this Section, the determination of "415
Compensation" shall be made without regard to Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of
Employer contributions made pursuant to a salary reduction
agreement, without regard to Code Section 403(b).
Additionally, the dollar threshold amounts specified in (b)
and (c) below shall be adjusted at such time and in such
manner as is provided in Regulations. In the case of such an
adjustment, the dollar limits which shall be applied are
those for the calendar year in which the "determination
year" or "look-back year" begins.
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners"
of the Employer. "Five percent owner" means any person
who owns (or is considered as owning within the meaning
of Code Section 318) more than five percent of the
outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting
power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more
than five percent of the capital or profits interest in
the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers.
II-7
<PAGE>
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of
$75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000
and were in the Top Paid Group of Employees for the
Plan Year.
(d) Employees who during the "look-back year" were officers
of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) and
received "415 Compensation" during the "look-back year"
from the Employer greater than 50 percent of the limit
in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to
the lesser of (i) 50 employees; or (ii) the greater of
3 employees or 10 percent of all employees. If the
Employer does not have at least one officer whose
annual "415 Compensation" is in excess of 50 Percent of
the Code Section 415(b)(1)(A) limit, then the highest
paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during
the "determination year" and are also described in (b),
(c) or (d) above when these paragraphs are modified to
substitute "determination year" for "look-back year".
In determining who is a Highly Compensated Employee, all
Affiliated Employers shall be taken into account as a
single employer and leased employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such leased employees are
covered by a plan described in Code Section 414(n)(5) and
are not covered in any qualified plan maintained by the
Employer. In addition, Highly Compensated Former
Employees shall be treated as Highly Compensated
Employees without regard to whether they performed
services during the "determination year".
(ff) Highly Compensated Former Employee: A former Employee who
had a separation year prior to the "determination year" and
was a Highly Compensated Employee in the year of separation
from service or in any "determination
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<PAGE>
year" after attaining age 55. Notwithstanding the foregoing,
an Employee who separated from service prior to 1987 will be
treated as a Highly Compensated Former Employee only if
during the separation year (or year preceding the separation
year) or any year after the Employee attains 55 (or the last
year ending before the Employee's 55th birthday), the
Employee either received "415 Compensation" in excess of
$50,000 or was a "five percent owner". For purposes of this
Section, "determination year", "415 Compensation" and "five
percent owner" shall be determined in accordance with
Section 2.1(ee). Highly Compensated Former Employees shall
be treated as Highly Compensated Employees.
(gg) Highly Compensated Participant: Any Highly Compensated
Employee who is eligible to participate in the Plan.
(hh) Inactive Participant: Any Employee or former Employee who
has ceased to be a Participant and on whose behalf an
account is maintained under the Plan.
(ii) Insurer: Any legal reserve life insurance company.
(jj) Key-Employee: Any Participant (and his Beneficiary) who, at
any time during the Plan Year or any of the preceding four
(4) Plan Years, is:
(1) an officer of Company (as that term is defined
within the meaning of the regulations under
Internal Revenue Code Section 416).
(2) one of the 10 Employees owning (or considered as
owning within the meaning of Code Section 318) the
largest interests in all employers required to be
aggregated under Code Sections 414(b), (c), and
(m) and receiving Compensation at least equal to
the maximum dollar limitation under Internal
Revenue Code Section 415(c)(1) (A) as in effect
for the calendar year in which the Determination
Date falls.
(3) a "five percent owner" of Company. "Five percent
owner" means any person who owns (or is considered
as owning within the meaning of Internal Revenue
Code Section 318) more than 5 percent of the
outstanding stock of Company or stock possessing
more than 5 percent of the total combined voting
power of all stock of Company. In determining
percentage ownership hereunder, employers that
would otherwise be aggregated under Internal
II-9
<PAGE>
Revenue Code Sections 414(b), (c), and (m) shall
be treated as separate employers.
(4) a "one percent owner" of Company having an annual
compensation from Company of more than $150,000.
"one percent owner" means any person who owns (or
is considered as owning within the meaning of
Internal Revenue Code Section 318) more than one
percent (1%) of the outstanding stock of Company
or stock possessing more than one percent (1%) of
the total combined voting power of all stock of
Company. In determining percentage ownership
hereunder, employers that would otherwise be
aggregated under Internal Revenue Code Sections
414(b), (c), and (m) shall be treated as separate
employers. However, in determining whether an
individual has compensation of more than $150,000,
compensation from each employer required to be
aggregated under Internal Revenue Code Sections
414(b), (c), and (m) shall be taken into account.
(kk) Leased Employee: Any person who is not an Employee of
Company and who has, for a period of 1 or more years, and on
a substantially full-time basis, provided services to
Company of a type historically performed by Employees of the
Company, which services are or have been provided pursuant
to an agreement between Company and a leasing organization.
For any Plan Year, any Leased Employee shall be treated as
an Employee of Company for purposes of the participation
standards of Article III, the contribution standards of
Article IV and the vesting standards of Article VIII, unless
such Leased Employee is, for such Plan Year or any portion
thereof during which such Leased Employee provides services
for the Company, a participant in a safe Harbor Plan
provided for such Leased Employee by the leasing
organization leasing the services of such Leased Employee to
the Company. For purposes of the foregoing sentence, a
Leased Employee shall not be treated as an Employee of the
Company until after the close of the aforementioned 1-year
period during which such individual has provided
substantially full-time services to the Company, except that
Years of Service for the Company shall be determined by
taking into account the entire period for which the
individual performed services for the Company.
(ll) Length of Service Required:
(1) on the Effective Date of this Plan: 2 years
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<PAGE>
(2) After the Effective Date of this Plan: 2 years
(mm) Limitation Year: Any period of one year ending on the last
day of the Plan Year. If the Plan Year is changed the
limitation year shall correspond to the new Plan Year
beginning with the first full twelve month Plan Year
subsequent to the commencement of change in Plan Year. In
the event the Limitation Year is or has been changed, by
reason of change in the Plan Year or otherwise, the
limitations of Paragraph 4.1 shall be applicable in the
normal manner as if no change had occurred with respect to
the new Limitation Year, but with respect to the Limitation
Year within which the change is made (the former Limitation
Year) the following rule shall apply. The dollar limit for
Annual Additions shall be prorated for allocations made from
the first day of the former Limitation Year through the day
before the first day of the new Limitation Year (the
limitation period) by multiplying (1) the applicable dollar
limitation for the calendar year in which the limitation
period ends by (2) a fraction, the numerator of which is the
number of months (including any fractional parts of a month)
in the limitation period, and the denominator of which is
12.
(nn) Minimum Participation Age Required:
(1) on the Effective Date of the Plan: 21
(2) After the Effective Date of the Plan: 21
(oo) Named Fiduciary: President of Company, except that if
Company is an unincorporated business, the proprietor of
Company if a sole-proprietorship or the partner designated
in the summary plan description for the Plan for purposes of
service of legal process.
(pp) Net Income: The current or accumulated earnings and profits
of the Company as of the fiscal year of Company ending
within or with the Plan Year for which the contribution is
made before any contribution to any qualified retirement
plan.
(qq) Non-Elective Contribution: The portion of the Contribution
allocated to a Participant which the Company must contribute
in order to satisfy the coverage and discriminatory
requirements of Section 401(k)(3)(A)(i) of the Internal
Revenue Code of 1986, as amended.
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<PAGE>
(rr) Non-Highly Compensated Participant: shall mean any
Participant who is neither a Highly Compensated Employee nor
a Family Member.
(ss) Non-Key Employee: Any Employee who is not a Key-Employee.
(tt) Normal Retirement Age: The earlier of (1) the Participant's
65th birthday or the date 5 years following a Participant's
commencement of participation in the Plan, whichever is
later; or (2) the Normal Retirement Date.
(uu) Normal Retirement Date: Participant's 65th birthday provided
he has completed five (5) Years of Participation.
(vv) Participant: Any Employee who has qualified under this Plan.
A Participant ceases to be a Participant when all funds in
his account to which he is entitled under the Plan have been
distributed in accordance with the Plan.
(ww) Participation Date: The earlier of the first day of the Plan
Year or the first day of the seventh month of such Plan Year
coincident with or following the date an Employee completes
his eligibility requirements of Section 3.1, provided the
Employee was still employed as of that date (or if not
employed on that date, as of the date of rehire a 1-Year
Break in service has not occured).
(xx) Plan Administrator: Company
(yy) Plan Year: Any period of one year ending December 31. The
first Plan Year shall be the period January 1, 1990 through
December 31, 1990.
(zz) Safe Harbor Plan: A money purchase pension plan with a
nonintegrated employer contribution rate of at least 7 1/2
percent of compensation, and providing for immediate
participation and full and immediate vesting.
(A) Service for Predecessor Employer: In any case in which
Company maintains a plan of a predecessor employer, service
for such predecessor shall be treated as service for
Company, and in any case in which Company maintains a plan
which is not the plan maintained by a predecessor employer,
service for such predecessor shall [as provided in Internal
Revenue Code Section
II-12
<PAGE>
414(a) (2)], to the extent required in regulations
prescribed by the Secretary of the treasury or his delegate,
be treated as service for Company.
(B) Shareholder-Employee: If Company is an S Corporation, an
Employee of Company who either individually or together with
his spouse, children, grandchildren and parents, owns more
than 5% of Company's outstanding stock on any day during the
Plan Year.
(C) S Corporation: An electing small business corporation within
the meaning of Internal Revenue Code Section 1362(a).
(D) Super Top-Heavy Plan: A Top-Heavy Plan under which the
present value of accrued benefits or the sum of account
balances (including accounts for Employee contributions) of
Key-Employees under this Plan and any plan of an Aggregation
Group, exceeds 90 percent of the present value of accrued
benefits or the sum of the account balances (including
accounts for Employee contributions) of all Participants
under this Plan and any plan of an Aggregation Group,
measured as of the Determination Date.
(E) Top-Heavy Plan: For Plan Years commencing after December 31,
1983, a Plan under which the present value of accrued
benefits of Key-Employees or the sum of the account balances
(including accounts for Employee contributions) of
Key-Employees under this Plan and any plan of an Aggregation
Group, exceeds 60 percent of the present value of accrued
benefits or the sum of the account balances (including
accounts for Employee contributions) of all Participants
under this Plan and any plan of an Aggregate Group, measured
as of the Determination Date.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan
Year, such Participant's present value of accrued benefit
and/or account balances shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy
Plan (or whether any Aggregation Group which includes this
Plan is a Top-Heavy Group).
(F) Top-Heavy Plan Year: A particular Plan Year commencing after
December 31, 1983, in which the Plan is a Top-Heavy Plan.
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<PAGE>
(G) Top Paid Group: "Top Paid Group" means the top 20 percent of
Employees who performed services for the Employer during the
applicable year, ranked according to the amount of "415
Compensation" received from the Employer during such year.
All Affiliated Employers shall be taken into account as a
single employer, and leased employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such leased employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in
any qualified plan maintained by the Employer. For the
purpose of determining the number of active Employees in any
year, the following Employees shall be excluded. However,
such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2 hours
per week;
(c) Employees who normally work less than six (6)
months during a year;
(d) Employees who have not yet attained age 21;
and
(e) Employees who are non-resident aliens and who
received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer
constituting United States source income within the
meaning of Code Section 861(a)(3).
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor
finds to be collective bargaining agreements between Employee
representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the
identification of particular Employees in the Top Paid Group.
(H) Trust Situs: Pennsylvania
(I) Trustee: The Trustee or Trustees named above and any
successor Trustee or Trustees.
II-14
<PAGE>
(J) Vesting Computation Period: The consecutive 12 month period
beginning on the first day of the Plan Year. If the Vesting
Computation Period is or has been changed, by reason of a
change in the Plan Year or otherwise, the first Vesting
Computation Period after such change shall begin before the
last day of the preceding Vesting Computation Period and an
Employee who is credited with a Year of Service in both the
last Vesting Computation Period before the change and the
first Vesting Computation Period after the change shall be
credited with 2 Years of Service for purposes of vesting.
(K) Year of Service: For purposes of eligibility, any
Eligibility Computation Period in which Employee has not
less than 1,000 hours of service. For purposes of vesting,
any Vesting Computation Period in which Employee has not
less than 1,000 hours of service. If the Length of Service
required under the Plan is or includes a fractional year, an
Employee shall not be required to have any minimum number of
hours of service to receive credit for such fractional year
for purposes of eligibility. For purposes of benefit
accrual, any Plan Year commencing with the Plan Year in
which the Participant commenced participation in which
Employee has not less than 1,000 hours of service.
II-15
<PAGE>
ARTICLE THREE
ELIGIBILITY
3.1 All Employees in the employ of Company on the Effective Date shall
participate as of the Effective Date, provided that on such date they have met
the Minimum Participation Age and Length of Service requirements applicable to
such Employees.
In the event that any Employee in the employ of Company on the Effective
Date does not meet the applicable Minimum Age and service requirements
on the Effective Date, such Employee shall commence participation on the
applicable Participation Date.
3.2 All Employees whose employment commences after the Effective Date
shall commence Participation on the applicable Participation Date.
3.3 Notwithstanding any service requirement of less than one year which
may be contained herein, no Employee who is credited with 1,000 or more hours of
service in an Eligibility Computation Period shall not be considered to have met
at the expiration of said Eligibility Computation Period such required Length of
Service requirement.
3.4 An Employee shall be credited with an hour of service for purposes
of eligibility, vesting and eligibility for Company contributions according to
the following:
(a) An hour of service is each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for Company
during the applicable computation period.
(b) An hour of service is each hour for which an Employee is
paid, or entitled to payment, by Company on account of a
period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty
or leave of absence. Notwithstanding the preceding
sentence:
(1) No more than 501 hours of service are required to be
credited under this subparagraph (b) to an Employee on
account of any single continuous period during which the
Employee performs no duties (whether or not such period
occurs in a single computation period);
III-1
<PAGE>
(2) An hour for which an Employee is directly or indirectly paid
or entitled to payment on account of a period during which
no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable workmen's compensation, or unemployment
compensation or disability insurance laws; and
(3) Hours of service are not required to be credited for a
payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
For purposes of this subparagraph (b), a payment shall be
deemed to be made by or due from Company regardless of whether
such payment is made by or due from Company directly, or
indirectly through, among others, a trust fund, or insurer, to
which Company contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer,
or other entity are for the benefit of particular Employees or
are on behalf of a group of Employees in the aggregate.
(c) An hour of service is each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by
Company. The same hours of service shall not be credited both
under subparagraph (a) or subparagraph (b), as the case may be,
and under this subparagraph. Crediting of hours of service for
back pay awarded or agreed to with respect to periods described
in subparagraph (b) shall be subject to the requirements set
forth in that subparagraph.
Also included is the special rule for determining hours of
service for reasons other than the performance of duties,
as well as the rule for crediting of hours of service to
computation periods, as set forth in Labor Department
Regulations Section 2530.200b-2(b) and (c), respectively.
(d) Additional hours of service in the minimum amount necessary to
prevent a break in service shall be credited to employees for the
following absences:
(1) Authorized leave of absence, provided the Employee
returns to active employment on or before the end of
such leave of absence. Authorized leave of absence
shall include
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<PAGE>
illness and reserve duty in the Armed Forces of
the United states.
(2) Absence of an Employee subsequent to the effective
date who enters the Armed Forces of the United
states and has reemployment rights under law,
provided, he complies with the requirements of the
law as to employment and reemployment.
(e) Additional Hours of Service, but not in excess of 501, based on
the number of Hours of Service which otherwise would normally
have been credited to individuals but for such absence as is
described below, (or if such number cannot be determined, 8 Hours
of Service per day of such absence), shall be credited to
individuals for purposes of eligibility and vesting, but not for
purposes of benefit accrual, (notwithstanding 3.4 above), in the
Eligibility and Vesting Computation Periods in which such absence
begins, if necessary to prevent a 1 year Break in Service in such
Computation Period, but if not so necessary, in the immediately
following Eligibilty and Vesting Computation Periods, provided
that the absence is for maternity or paternity reasons and shall
mean an absence on account of the following:
(i) The pregnancy of the individual;
(ii) The birth of a child of the individual;
(iii) The placement of a child with the
individual in connection with the
adoption of such child by such
individual;
(iv) Care of such child for a period beginning
immediately after his birth or placement.
However, no Hours of Service will be credited under this
subparagraph unless the individual furnishes to the Plan
Administrator such timely information as the Plan
Administrator may reasonably require to establish the number
of days of absence and the reason or reasons therefore.
III-3
<PAGE>
3.5 Hours of service shall be counted for purposes of eligibility,
vesting and benefit accrual on the basis of actual hours for which an Employee
is paid or entitled to payment, as determined in accordance with Paragraph 3.4.
3.6 Within 90 days of the Participation Date on which an Employee shall
become eligible to participate, the Plan Administrator shall notify each such
Employee of his eligibility to participate by providing such Employee with a
summary plan description.
3.7 In the case of an Employee who has a vested benefit and sustains a
Break in Service, such Employee shall recommence active participation on the
first day of his first Eligibility Computation Period after the break during
which he has completed 1,000 hours of service or more. In the case of an
Employee with no vested benefit who sustains a Break in Service, where the
number of consecutive years in which he incurred a Break in service are less
than the aggregate number of years in which he attained a Year of Service before
such break, such Employee shall recommence active participation on the first day
of his first Eligibility Computation Period after the break during which he has
completed 1,000 hours of service or more. In the case of an Employee with no
vested benefit who sustains a Break in Service, where the number of consecutive
years in which he incurred a Break in service are equal to or greater than the
aggregate number of years in which he attained a Year of Service before such
break, such Employee shall be treated as if he were a new Employee for purposes
of eligibility to participate. The aggregate number of Years of Service before a
Break in service shall not include any Years of Service not required to be taken
into account under this Paragraph by reason of any prior Break in Service! For
purposes of vesting for an Employee who has sustained a Break in service, the
provisions of Article 8 shall apply. For purposes of benefit accrual, the
provisions of Article 4 shall apply.
Notwithstanding any provision of the Plan to the contrary, in the case
of an Employee who sustains a Break in Service under a Plan that
provides a Length of Service requirement in excess of one year,
provided such Employee has not satisfied such Length of Service
requirements prior to incurring a Break in service, service before such
Break in Service shall not be taken into account for purposes of
eligibility.
3.8 Notwithstanding any provision of this Plan to the contrary, this
Plan shall not provide contributions or benefits for an Owner-Employee who
controls, or a group of Owner-Employees who together control an unincorporated
trade or business with respect to which the Plan is established, and such Owner-
III-4
<PAGE>
Employee, or group of Owner-Employees also control one or more
unincorporated trades or businesses, unless this Plan and the plans
established with respect to such other trades or businesses when
coalesced constitute a single plan which satisfies the requirements of
Section 401(a) and (d) of the Internal Revenue Code with respect to
the employees of all such unincorporated trades or businesses.
Furthermore, the Plan shall not provide contributions or benefits for
one or more Owner-Employees who control one or more unincorporated
trades or businesses, unless the employees of each such unincorporated
trade or business which such Owner-Employees control are included
under a plan which satisfies the requirements of Section 401(a) and
(d) of the Internal Revenue Code and which provides contributions or
benefit for employees not less favorable than those provided for such
owner-Employees under this Plan. For purposes of this Paragraph 3.8,
an owner-Employee, or a group of Owner-Employees, shall be considered
to control a trade or business if such owner-Employee, or such group
of Owner-Employees together own the entire interest in an
unincorporated trade or business, or in the case of a partnership, own
more than 50% of either the capital interest or the profits interest
in such partnerships. An Owner-Employee shall mean a sole proprietor,
or, in the case of a partnership, any person who owns more than 10% of
the capital or profits interest.
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<PAGE>
ARTICLE FOUR
CONTRIBUTIONS AND MANAGEMENT OF FUNDS
4.1 Company, subject to its rights to terminate and amend this Plan and
Trust, shall contribute to the Trust, within thirty (30) days after the last day
of the Plan Year, such portion of a Participant's compensation with respect to
which the Participant has made a written election to reduce his or her
compensation in accordance with the provisions of Paragraph 4.3 (hereinafter
referred to as the "Elective Contribution").
The Company may make a contribution to the Plan for any Plan Year. Said
contribution (hereinafter referred to as the "Non-Elective Contribution") shall
be a discretionary amount made out of the Company's Net Income. Participants
who perform less than a Year of Service during the Plan Year or are not employed
on the last day of the Plan Year shall not share in this Employer discretionary
contribution. Such Non-Elective Contribution shall be allocated to each
Participant in the same proportion that each such Participant's Compensation for
the year bears to the total Compensation of all Participants for such year.
Only Compensation paid or accrued during a Plan Year on and after the
date an Employee commenced participation shall be taken into account
for purposes of making contributions.
(a) For each Plan Year the annual allocation derived from Elective
Contributions to a Participant's Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral Percentage" of the
Non-Highly Compensated Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group shall not be more than two percentage
points. Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group multiplied by 2. The provisions
of Code Section 401(k)(3) and Regulation 1.401(k)-l(b) are incorporated herein
by reference.
However, in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section 401(m)(9)(A),
any Highly Compensated Participant eligible to
IV-1
<PAGE>
make elective deferrals and to make Employee contributions or to
receive matching contributions under this Plan or under any other
plan maintained by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to Regulation
1.401(m)-2, the provisions of which are incorporated herein by
reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's Elective Account
for such Plan Year to such Participant's "414(s) Compensation" for such Plan
Year. The actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest one hundredth of
one percent. Elective Contributions allocated to each Non-Highly Compensated
Participant's Account shall be reduced by Excess Deferred Compensation to the
extent such excess amounts are made under this Plan or any other plan maintained
by the Employer.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Participant is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the following
shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Elective
Contributions and "414(s) Compensation" of all eligible Family
Members who are Highly Compensated Participants without regard to
family aggregation; and (ii) the ratio determined by aggregating
Elective Contributions and "414(s) Compensation" of all eligible
Family Members (including Highly Compensated Participants). However,
in applying the $200,000 limit to "414(s) Compensation", Family
Member shall include only the affected Employee's spouse and any
lineal descendants who have not attained age 19 before the close of
the Plan Year.
(2) The Elective Contributions and "414(s) Compensation" of all
Family Members shall be disregarded for purposes of determining the
"Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in
paragraph (1) above.
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<PAGE>
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as
one family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.1(a) and 4.2, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to make a deferral election pursuant to this Article, whether or not
such deferral election was made or suspended pursuant to such Article.
(e) For the purposes of this Section, if two or more plans (other than
an employee stock ownership plan as defined in Code Section 4975(e) (7)) which
include cash or deferred arrangements are considered one plan for the purposes
of Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)
the cash or deferred arrangements included in such plans shall be treated as one
arrangement.
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be treated as
one (1) cash or deferred arrangement for the purpose of determining the deferral
percentage with respect to such Highly Compensated Participant. However, if the
cash or deferred arrangements have different Plan Year's, this paragraph shall
be applied by treating all cash or deferred arrangements ending with or within
the same calendar year as a single arrangement.
4.2 In the event that the initial allocations of the Elective
Contributions pursuant to section 4.1 do not satisfy one of the tests set forth
in Section 4.1(a) the Administrator shall adjust Excess Contributions pursuant
to the options set forth below:
(a) On or before the fifteenth day of the third month following the end
of each Plan Year, the Highly Compensated Participant having the highest actual
deferral ratio shall have his portion of Excess Contributions distributed to
him, until one of the tests set forth in Section 4.1(a) is satisfied, or until
his actual deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual deferral ratio. This
process shall continue until one of the tests set forth in Section 4.1(a) is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions on behalf of such Highly
Compensated Participant determined prior to the application of this paragraph)
minus the amount determined by multiplying the
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<PAGE>
Highly Compensated Participant's actual deferral ratio (determined after
application of this paragraph) by his "414(s) Compensation". However,
in determining the amount of Excess Contributions to be distributed with
respect to an affected Highly Compensated Participant as determined
herein, such amount shall be reduced by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated Participant
for his taxable year ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the
succeeding Plan Year;
(ii) shall be made from Qualified Non-Elective Contributions
only to the extent that Excess Contributions exceed the balance
in the Participant's Elective Account attributable to Deferred
Compensation;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
(ii) shall not exceed the amount of Deferred Compensation on
behalf of any Highly Compensated Participant for any Plan Year;
(iii) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and regulation
1.401(k)-l(b). Excess Contributions characterized as voluntary
Employee contributions shall continue to be nonforfeitable and
subject to the same distribution rules provided for in Section
4.11;
(iv) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of voluntary
Employee contributions (determined prior to application of
Section 4.5(a) that such Highly Compensated
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<PAGE>
Participant is permitted to make under the Plan in the
absence of recharacterization; and
(v) shall be adjusted for Income.
(3) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess
Contributions and Income.
(b) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is determined under
the family aggregation rules shall be accomplished as follows:
(1) If the actual deferral ratio for the Highly Compensated
Participant is determined in accordance with Section 4.1(c)(1)(ii),
then the actual deferral ratio shall be reduced as required herein
and Excess Contributions for the family unit shall be allocated
among the Family Members in proportion to the Elective Contributions
of each Family Member that were combined to determine the group
actual deferral ratio.
(2) If the actual deferral ratio for the Highly Compensated
Participant is determined under Section 4.1(c)(1)(i), then the
actual deferral ratio shall first be reduced as required herein, but
not below the actual deferral ratio of the group of Family Members
who are not Highly Compensated Participants without regard to family
aggregation. The Excess Contributions resulting from this initial
reduction shall be allocated (in proportion to Elective
Contributions) among the Highly Compensated Participants whose
Elective Contributions were combined to determine the actual
deferral ratio. If further reduction is still required, then Excess
Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family
Members and shall be allocated among then in proportion to their
respective Elective Contributions.
(c) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.1(a). Such contribution shall be allocated to the
Participant's Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's Compensation for the
year bears to the total Compensation of all Non-Highly Compensated Participants.
4.3 A Participant may elect to reduce his or her Compensation or to
forgo an increase in Compensation and direct that the said amount be contributed
to his account by the Company. At any time
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<PAGE>
the Participant may file a written election, provided by the Plan Administrator
with the Plan Administrator, thus permitting a Participant to reduce his
Compensation by way of a payroll reduction. The Plan Administrator may limit the
frequency of changes in authorized payroll deductions such that no more than two
rates of reduction apply in any Plan Year and shall establish by rules of
general applicability the effective date of such reductions, but contributions
made by payroll reduction may be terminated at any time by the Participant by
means of a written request filed with the Plan Administrator at least 20 days in
advance of the date on which such termination is effective.
A Participant's election to reduce his or her salary will be limited to
fifteen percent (15%) of Compensation not to exceed the dollar limit
imposed on Deferred Compensation under Code Section 401(k) for a specific
calendar year, and further subject to the limitations contained in
Paragraphs 4.1, 4.2, 4.6, 4.8 and 4.11. If any Participant's election would
violate the aforementioned restrictions, the application of the
aforementioned limitations by the Plan Administrator shall be made in a
non-discriminatory manner and may include the distribution of Elective
Contributions.
4.4 Participants are not required to make any contributions under this
Plan. However, a Participant may each Plan Year voluntarily contribute to the
Plan on an after-tax basis up to a maximum of 10 percent of Compensation,
reduced by the voluntary contribution to any other qualified plan of the
Company. Contributions by a Participant may be made at any interval determined
by the Plan Administrator to be convenient. Said maximum shall be based upon the
Participant's cumulative Compensation paid to him by the Company since becoming
a Participant.
(a) For purposes of determining Annual Additions for a Participant
under the Plan, voluntary contributions shall be deemed credited
when made, except that contributions made within 30 days after
the close of a Limitation Year shall be deemed credited to that
Limitation Year, if made with respect thereto.
(b) The voluntary contribution made by a Participant shall be
accounted for as a separate fund under the Trust, apart from that
part of the fund which is a result of the Company's contribution.
Records of the amount contributed by a Participant shall be
maintained separately by the Trustee. A Participant's voluntary
contribution shall be 100 percent vested at the time such
contribution is made. Contributions made hereunder by
Participants are not intended to be deductible by Participants
under Section 219(a) of the Internal Revenue Code. All earnings
on the
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<PAGE>
above mentioned fund shall immediately be 100 percent vested.
Each Participant's account shall be valued at least annually at
fair market value.
(c) Amounts credited to a voluntary account shall be invested by the
Trustee in such proportion and in such investments as Participant
shall direct (unless all assets of the Trust are invested in
Contracts), in which case any investment income and loss shall be
allocated solely to such account. In the absence of such
direction (or in the event all assets of the Trust are invested
in Contracts), Trustee, in its discretion, shall invest the
account proportionately, as Trustee determines, and income and
loss shall be allocated as provided in Subparagraph 4.5(b). The
right of a Participant to direct the investment of his account
shall cease with the termination of his employment with Company.
(d) A Participant who contributed voluntarily may withdraw his
contributions and/or earnings thereon at any time upon 60 days
written notice to the Plan Administrator of such intent to
withdraw, with the written consent of the Participant's spouse,
if any, and with the Plan Administrator's approval; except that
in the event a Participant becomes permanently disabled, retires,
dies, or otherwise terminates employment, distribution of the
amount credited to his voluntary account shall be paid to him or
his Beneficiary in a lump sum payment within a reasonable period
of time following his disability, retirement, death or
termination, if so requested by such Participant, if living; or
if not living, if so requested by the Beneficiary of such
participant. At the request of the Participant or his
Beneficiary, as the case may be, and with the consent of the Plan
Administrator, the amount credited to his voluntary account
distributable upon disability, retirement or death, may be paid
under the options for settlement provided in Paragraph 9.3. If
after a reasonable period of time following termination of a
Participant's employment, the Participant or his Beneficiary, as
the case may be, has not requested payment of the amounts
credited to his voluntary account, the Plan Administrator may
direct the trustee to distribute such amount in a lump sum
payment.
(e) Any withdrawal or distribution from a Participant's account for
voluntary contributions shall be deemed made first from
contributions. Earnings shall be withdrawn or distributed only to
the extent that the total withdrawals and distributions exceeds
the total of the Participant's voluntary contributions.
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<PAGE>
(f) Limitations: The Employer may limit, revoke or amend its
agreement to make employee contributions under Section 4.2 on
behalf of any Participant at any time, but only if it determines
that such limitation, revocation or amendment is necessary under
one of the following circumstances:
(i) in the case of a Participant's after-tax contributions, to
insure that the discrimination tests of Section 401(m) of the
Internal Revenue Code governing permissible levels of employee
contributions are met for such Plan Year, or to insure that one
of the following tests is met for such Plan Year.
(A) The actual Average Percentage of the employee
contributions of the Highly-Compensated Employees eligible
to participate is not more than 1.25 times the Actual
Average Percentage of the employee contributions for all
other Employees eligible to participate; or
(B) The Actual Average Percentage of the employee
contributions for the Highly-Compensated Employees eligible
to participate is not more than 2.0 times the Actual
Average Percentage of the employee contributions for all
other Employees eligible to participate and the Actual
Average Percentage of the employee contributions for the
Highly-Compensated Employees eligible to participate does
not exceed the Actual Average Percentage of the employee
contributions for all other Employees eligible to
participate by more than two (2) percentage points; or
(ii) to insure that a Participant's Additions for any calendar
year will not exceed the limitations of Section 4.3; or
(iii) to insure deductibility of the Employer's entire
contribution to the Plan for federal income tax purposes.
If a limitation or amendment becomes necessary pursuant to
paragraph (i) or (iii) above, such limitation or amendment will
be first applied to the Participant who is the
Highly-Compensated Employee electing the highest percentage of
employee contributions pursuant to Section 4.2 until the tests
of (i) or (iii) are met or until such Participant's election
pursuant to Section 4.2 is reduced to the same percentage level
as the Participant who is the Highly-Compensated Employee
electing the second highest percentage of employee contributions
pursuant to Section 4.2. If further limitations are required,
then both such
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<PAGE>
Participants' percentage elections shall be reduced until the
tests of (i) or (iii) are met or until the two Participants'
elections pursuant to Section 4.2 are reduced to the same
percentage level as the Participant who is the Highly
Compensated Employee electing the third highest percentage of
employee contributions pursuant to Section 4.2, and such
limitations or amendments shall continue to be made in a similar
manner from the Participants who are Highly-Compensated
Employees making the highest percentage elections to the lowest
until the tests of (i) or (iii) are satisfied.
If a Participant is prevented from making a portion of his
employee contributions due to a permissible limitation,
revocation or amendment by the Employer, such portion shall be
returned to the Participant prior to its contribution to the
Trust Fund.
In applying the discrimination tests under this Section,
the employer shall treat employee contributions under plans
which are aggregated under Section 401(a)(4) or 410(b) of the
Internal Revenue Code as made under a single plan. In addition,
if a Highly-Compensated Employee is eligible under more than one
plan subject to Section 401(m) of the Code maintained by the
Employer, the Employee's Actual Average percentage is calculated
by treating all of the plans as one plan.
For purposes of this Section, the family aggregation rules
set forth in Section 2.1 of this Plan shall apply. Where the
family aggregation rule is applicable, the family group shall be
treated as one Highly-Compensated Employee and the Actual
Average Percentage for the family group shall be the greater of:
(1) the ratio determined by combining the
compensation and employee contributions of all eligible
family members who are highly-compensated without regard to
family aggregation; and
(2) the ratio determined by combining the
compensation and employee contributions of all eligible
family members.
For purposes of this Section 4.2(f) the following meanings
shall apply. The "Actual Average Percentage" for a specified
group of Employees for a Plan Year shall be the amount of
employer contributions actually paid to the Trust by each such
Employee for each Plan Year to the Employee's Compensation for
such Plan Year. The term "Compensation" shall include all
amounts paid by the
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<PAGE>
Employer to the Employee which are currently includible in the
Employee's gross income. The Employer shall have the right to
use such alternate definition of Compensation as the Internal
Revenue Service may provide by regulation under Code Section
414(s).
4.5(a) The "Actual Contribution Percentage" for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or participant group, or such percentage for the
Non-Highly Compensated Participant group plus 2 percentage points.
However, to prevent the multiple use of the alternative method
described in this paragraph and Code Section 401(m)(9)(A), any
Highly Compensated Participant eligible to make elective deferrals
pursuant to Section 4.1 or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer and to make
Employee contributions or to receive matching contributions under
this Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions of Code Section
401(m) and Regulations 1.401(m)-l(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.6, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated
Participant group the ratios (calculated separately for each
Participant in each group) of:
(1) the sum of voluntary Employee contributions and Excess
Contributions recharacterized as voluntary Employee contributions on
behalf of each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
4.5(d), the Administrator may elect to take into account, with respect
to Employees eligible to have Employer matching contributions;
voluntary Employee contributions; allocated to their accounts, elective
deferrals (as defined in Regulation 1.402(g)-l(b)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C)
contributed to any plan maintained by the Employer. Such elective
deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(2)
which is incorporated herein by
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<PAGE>
reference. However, the Plan Year must be the same as the plan year of
the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of
a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Employee is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be the greater of: (i) the ratio determined by aggregating Employer
matching contributions made: voluntary Employee contributions,
Excess Contributions recharacterized as voluntary Employee
contributions and "414(s) Compensation" of all eligible Family
Members who are Highly Compensated Participants without regard to
family aggregation; and (ii) the ratio determined by aggregating
Employer matching contributions made : voluntary Employee
contributions made: Excess Contributions recharacterized as
voluntary Employee contributions: and "414(s) Compensation" of all
eligible Family Members (including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s) Compensation,"
Family Members shall include only the affected Employee's spouse and
any lineal descendants who have not attained age 19 before the
close of the Plan Year.
(2) The Employer matching contributions made; voluntary Employee
contributions made; Excess Contributions recharacterized as
voluntary Employee contributions; and "414(s) Compensation" of all
Family Members shall be disregarded for purposes of determining the
"Actual Contribution Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in
paragraph (1) above.
If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section, if two or more plans of the
Employer (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7) to which matching contributions, Employee
contributions, or both, are made are treated as one plan for purposes
of Code Sections 401(a)(4) or 410(b) (other than the average
benefits test under Code Section 410(b)(2)(A)(ii)), such
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<PAGE>
plans shall be treated as one plan for purposes of this Section 4.6.
In addition, two or more plans of the Employer to which matching
contributions, Employee contributions or elective deferrals are made
may be considered as a single plan for purposes of this Section. In
such a case, the aggregated plans must satisfy Code Sections 401(a)(4)
and 410(b) as though such aggregated plans were a single plan.
Notwithstanding the above, contributions to an employee stock
ownership plan as defined in Code Section 4975(e)(7) shall not be
aggregated with this Plan.
(f) If a Highly Compensated Participant participates in two or more
plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) which are maintained by the Employer or an
Affiliated Employer to which matching contributions, Employee
contributions or elective deferrals are made, all such contributions
on behalf of such Highly Compensated Participant shall be aggregated
for purposes of this Section.
(g) For purposes of Sections 4.6(a) and 4.7, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions (whether or
not a deferral election was made or suspended) voluntary Employee
contributions (whether or not voluntary Employee contributions are
made) allocated to his account for the Plan Year.
4.7 (a) In the event that the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.6(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated Participant
having the highest actual contribution ratio, his portion of Excess
Aggregate Contributions (and Income allocable to such contributions)
until either one of the tests set forth in Section 4.6(a) is
satisfied, or until his actual contribution ratio equals the actual
contribution ratio of the Highly Compensated Participant having the
second highest actual contribution ratio. This process shall continue
until one of the tests set forth in Section 4.6(a) is satisfied.
(b) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and Income) shall be treated as a pro rata
distribution, of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and
Income).
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited
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<PAGE>
matching contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the
Plan.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate contributions is equal to the total Employer matching
contributions: voluntary Employee contributions made Excess
Contributions recharacterized as voluntary Employee contributions: and
any qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.6(c) on behalf of the Highly
Compensated Participant (determined prior to the application of this
paragraph) minus the amount determined by multiplying the Highly
Compensated Participant's actual contribution ratio (determined after
application of this paragraph) by his "414(s) Compensation". The
actual contribution ratio must be rounded to the nearest one-hundredth
of one percent. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed
the amount of Employer matching contributions made : voluntary Employee
contributions made, Excess Contributions recharacterized as voluntary
Employee contributions: and any qualified non-elective contributions
or elective deferrals taken into account pursuant to Section 4.6(c) on
behalf of such Highly Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the plan
year of any other qualified cash or deferred arrangement (as defined in
Code Section 401(k)) maintained by the Employer that ends with or
within the Plan Year or which are treated as voluntary Employee
contributions due to recharacterization pursuant to Section 4.6(a).
(f) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules
shall be accomplished as follows:
(1) If the actual contribution ratio for the Highly Compensated
Participant is determined in accordance-with Section 4.6 (d)(1)
(ii), then the actual contribution ratio shall be reduced and the
Excess Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the of Employer
matching contributions made : voluntary Employee contributions made,
Excess Contributions recharacterized as voluntary Employee
contributions : and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.6(c) of
each Family
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<PAGE>
Member that were combined to determine the group actual contribution
ratio.
(2) If the actual contribution ratio for the Highly Compensated
Participant is determined under Section 4.6(d)(1)(i), then the actual
contribution ratio shall first be reduced, as required herein, but
not below the actual contribution ratio of the group of Family
Members who are not Highly Compensated Participants without regard to
family aggregation. The Excess Aggregate Contributions resulting from
this initial reduction shall be allocated among the Highly
Compensated Participants whose Employer matching contributions made;
voluntary Employee contributions made, Excess Contributions
recharacterized as voluntary Employee contributions; and any
qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.6(c) were combined to determine the
actual contribution ratio. If further reduction is still required,
then Excess Aggregate Contributions resulting from this further
reduction shall be determined by taking into account the
contributions of all Family Members and shall be allocated among them
in proportion to their respective Employer matching contributions
made; voluntary Employee contributions made, Excess Contributions
recharacterized as voluntary Employee contributions; and any
qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.6(c).
(g) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.6(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total Compensation
of all Non-Highly Compensated Participants. A separate accounting shall
be maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 4.1(a).
4.8 All payments by the Company shall be made to the Trustee to be
administered in accordance with the Trust Agreement, and consistent
with the provisions of Paragraph 4.11.
4.9 As of the last day of the Plan Year, the fund shall be valued at
fair market value and there shall be added to each Participant's
account derived from Company contributions:
(a) That proportion of the Company's contribution in
accordance with Paragraph 4.1; and
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<PAGE>
(b) That portion of the net accretions and diminutions to the
fund by way of income and loss and realized and unrealized
gains and losses which bears the same ratio to the total
of such net accretions and diminutions as his account
(exclusive of Cash Value) at the preceding Anniversary
Date (reduced by any distributions during the Plan Year)
bore to the total account of all Participants (exclusive
of Cash Value and reduced by any distributions or
forfeitures during the Plan Year) plus any increases in
Cash Value and less the cost of insurance Contracts
allocated to the participant's account. (During the first
Plan Year, such proportion shall be based on the
Participant's share of the Company's contribution.)
4.10 The fact that an allocation shall be made and credited to the
account of the Participant whether by mistake or otherwise shall not
vest in the Participant any right, title or interest in and to any
assets, except at the time or times and upon the terms and conditions
expressly set forth in the Plan.
4.11 The following limits apply to allocations of Annual Additions:
(a) Notwithstanding any provision to the contrary contained
herein, no allocation of an Annual Addition shall be made
to a Participant's account(s) to the extent that such
allocation shall cause the Annual Addition to this Plan,
and to any other qualified defined contribution plan of
the Company (or of any other entity which is a member of a
controlled group of entities as defined in Internal
Revenue Code Section 414(b), (c) and (m) of which Employer
is also a member), to exceed the lesser of $30,000 or 25%
of the Participant's compensation in any given limitation
year. For purposes of applying these limitations
"compensation" shall mean the Participant's "wages,
salaries, fees for professional services and other amounts
received for personal services actually rendered in the
course of employment" with Company and such other amounts
as are specified by Treasury Department Regulation Section
1.415-2(d)(1). Compensation shall exclude all items
specified in Treasury Department Regulation Section
1.415-2(d)(2), including contributions to a plan of deferred
compensation, amounts realized from qualified or non-
qualified stock options, and other amounts which receive
special Federal Income Tax benefit (such as contributions
to 403(b) annuity contracts or premiums qualifying for
exclusion from income under Section 79 of the Code). The
above mentioned dollar limitation shall be adjusted so as
to be equal to the maximum dollar limitation for defined
contribution plans prescribed by the Secretary of the
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<PAGE>
Treasury or his delegate. In the case of a Self-Employed
individual, "Compensation" shall mean the participant's
"Earned Income (within the meaning of Internal Revenue Code
Section 401(c)(2) but determined without regard to any
exclusion under Internal Revenue Code Section 911) from
Company."
(b) If the Annual Addition under this Plan to a Participant's
account is to be reduced as a result of the above limitation,
such reduction shall be effected by:
(i) first, returning any employee contributions made during
the Plan Year which are Annual Additions, (and any
earnings attributable thereto),
(ii) next, allocating Company contributions otherwise
allocable to a Participant's account up to the limitation
on Annual Additions.
(c) Company shall endeavor to avoid making contributions which
would, if allocated according to the terms of the Plan
result in Annual Additions in excess of the limits
described in this paragraph, (an excess amount), but if as
a result of the amount of forfeitures to be allocated or
errors in estimating Compensation or under such other
facts and circumstances as the Commissioner of Internal
Revenue permits there is an excess amount such amount
shall be held unallocated in a suspense account and
allocated in the next Limitation Year (and succeeding
Limitation Years if necessary) to all Participants for
whom allocations of contributions or forfeitures would
normally be made and in the manner and up to the limits
prescribed by this Article and shall reduce any Company
contribution which would otherwise be made to the Plan.
Investment gains and losses shall not be allocated to the
suspense account. If it is discovered that an excess
amount has been improperly allocated, such amount shall be
subtracted immediately from the affected Participant's
account (including the earnings allocated as a result of
such improper allocation) and held in suspense as
described above.
In the event of termination of the Plan the suspense account
shall revert to the Employer pursuant to Paragraph 16.5.
(d) If in any Limitation Year Company maintains any other qualified
defined contribution plan(s), Annual Additions shall be deemed
allocated first to any money purchase pension plan and next to
any profit sharing plan.
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(e) In any case in which an individual is or has been a
Participant in both a defined benefit plan and a defined
contribution plan maintained by Company (or by any other
entity which is a member of a controlled group of entities
as defined in Code Section 414(b), (c) and (m) of which
Employer Plan is a member), the sum of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction
for any Limitation Year may not exceed 1.0. If any
reductions are required in order not to exceed this
fraction they shall be made first to the defined
contribution plans of Company, first to any profit sharing
plan of Company and next to any money purchase pension
plan of Company. Such reduction shall be effected by
reducing the sum of the current Limitation Year Annual
Additions in accordance with the procedure of Subparagraph
4.10(d) so that the Defined Contribution Plan Fraction
does not exceed 1.0 minus the defined benefit fraction at
the end of the Limitations Year. Any amount received by
this reduction shall be held in suspense in accordance
with Subparagraph 4.10(c). Provided further that if this
reduction is insufficient to reduce the overall limit to
1.0 then the Defined Benefit Plan Fraction shall be
reduced to the extent necessary to bring about compliance.
4.12 Notwithstanding any provision of the Plan to the contrary,
Elective Contributions attributable to Participant deferrals shall not
be distributable earlier than upon the Participant's hardship,
retirement death, disability, separation from service
or attainment of age 59 1/2.
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ARTICLE FIVE
RETIREMENT BENEFITS
5.1 A Participant may elect to retire on his Normal Retirement Date,
whereupon his eligibility for Company contributions hereunder shall cease. If a
Participant remains in the employ of Company subsequent to Normal Retirement
Date contributions shall be made for such Participant. If Company consents, a
participant may retire on his Early Retirement Date, whereunder his eligibility
for Company contributions hereunder shall cease.
In the case of Early Retirement, the vesting schedule shall apply. In
the case of Normal Retirement, the total amount credited to an employed
Participant's account shall become 100 percent vested at the
Participant's Normal Retirement Age. If the Company makes a contribution
for a Participant subsequent to such date, such Participant shall be 100
percent vested in that contribution and any earnings thereon.
5.2 The Trustee shall distribute to a retired Participant the value of
his vested amount in accordance with the provisions of Article 9.
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ARTICLE SIX
DISABILITY BENEFITS
6.1 Any Participant who has become totally and permanently disabled
shall be entitled to retire effective the first day of the next Plan Year
subsequent to the date disability commenced, but payment shall be made only
after the Plan Administrator receives written notice of a determination of such
disability by a medical certificate issued by a doctor selected or approved by
the Plan Administrator. Total disability shall mean disability of either a
physical or mental nature, so as to prevent the Participant from performing the
duties of his employment with the Company. Permanent Disability shall mean
disability of either a physical or mental nature which is expected to last for a
period of 6 months or longer and which results in a termination of the
Participant's employment with Company. All Participants shall be treated alike
under similar circumstances.
6.2 A Participant retiring because of such disability shall receive his
total account calculated as of the most recent valuation date. Payment shall be
made after the Participant is entitled to retire and within 6 months of the date
on which the Plan Administrator receives notice in accordance with the preceding
paragraph, unless the Participant elects to defer commencement of payment,
pursuant to Paragraph 9.2, but in no circumstances shall payment be made later
than the period prescribed in Paragraph 9.2.
6.3 In lieu of a determination of disability pursuant to Paragraph 6.1
above, a determination of entitlement for disability benefits under Social
Security shall be conclusive evidence of total and permanent disability, but a
failure to attain such determination shall not be determinative of any rights to
receive disability benefits under this Plan. Recovery from total and/or
permanent disability subsequent to entitlement for receipt of benefits under
this Article shall not prejudice any right to receive or to continue to receive
such benefits.
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ARTICLE SEVEN
DEATH BENEFITS
7.1 In the event of the death of a Participant prior to the
commencement of payment of his retirement benefits, his death benefit shall be
the entire amount in his account (exclusive of Cash Value), as of the most
recent valuation date, and the proceeds of any Contract allocated to his
account, provided that the death benefit of a Participant who has terminated
service with Company shall be equal to his vested interest as computed under
Article 8 or Article 6, as the case may be, (exclusive of Cash Value) and the
proceeds of any Contracts allocated to his account. Such death benefits shall be
paid to his designated Beneficiary as soon as is convenient, but not later than
60 days after the next valuation date.
(a) If insurance exists as a Trust asset, the following shall apply
to the insurance proceeds.
(1) The Plan Administrator, at the direction of the
Participant, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 for the
insurance.
(2) If no mode of settlement has been selected in accordance
with (a) (1) above, the Plan Administrator at the direction
of the Beneficiary, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 within 60
days after the day on which a lump sum in full discharge of
the death benefit obligation under any insurance Contracts
first becomes payable.
Under no circumstances may the mode of settlement from the
insurance proceeds be other than one permitted by Paragraph
9.3.
(b) In regard to non-insurance Trust assets, the following shall
apply:
(1) The Plan Administrator, at the direction of the
Participant, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 for the
Trust assets.
(2) If no mode of settlement has been selected in accordance
with (b) (1) above, the Plan administrator, after
consultation with the
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Beneficiary, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 within 60
days after the day on which a lump sum in full discharge
of the death benefit obligation first becomes payable.
7.2 The Beneficiary or successor Beneficiary of any death benefit shall
be in accordance with the designation made by the Participant. The Participant
shall have the right to designate the Beneficiary or successor Beneficiary by
filing a designation of Beneficiary form with the Plan Administrator. At any
time, and from time to time, each Participant shall have the unrestricted right
to change the designation of the Beneficiary to receive any death benefits
hereunder. All designations shall be made in writing on the form required by the
Plan Administrator and shall be filed with the Plan Administrator. If no
designation has been made, if the designated Beneficiary has predeceased the
Participant, or if the designation of beneficiary is inoperative for any reason
as to any part of any death benefit hereunder, then the Participant shall be
deemed to have designated the following as his Beneficiary with priority in the
order named:
(a) his widow or her widower, as the case may be;
(b) his issue, per stirpes;
(c) his parents;
(d) his brothers and sisters, per stirpes; and
(e) his estate.
Notwithstanding anything to the contrary contained herein, if a
Participant is married, no designation of a beneficiary other than the
Participant's spouse or change of designation from a Participant's
spouse to someone else, shall be valid, unless (a) the Participant's
spouse consents in writing to such election or change, (b) such
Participant election designates a beneficiary (or a form of benefits)
which may not be changed without spousal consent (or the consent of
the spouse expressly permits designations by the Participant without
any requirement of further consent by the spouse), and (c) the
spouse's consent acknowledges the effect of such election, and is
witnessed by the Plan Administrator or a notary public, unless it is
established to the satisfaction of the Plan Administrator that such
consent may not be obtained because there is no spouse, because the
spouse cannot be located, or because of such other circumstance as may
be prescribed by regulations to be issued by the Secretary of the
Treasury. Any such consent by a spouse shall be effective only with
respect to such spouse.
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<PAGE>
7.3 The Trustee shall be designated to receive the proceeds of any
Contract which becomes payable upon the death of the Participant. The Trustee
may, however, request Insurer to make any beneficiary designation as may be made
by the Participant under Paragraph 7.2 above. In such event the Beneficiary so
designated may be revoked only upon the completion of the requirement
established by the Insurer and the terms of any contracts and the rules of the
Insurer.
7.4 Upon the death of a Participant, the Trustee shall take all
necessary steps and shall execute all required documents to permit the
Beneficiary to collect the death benefits provided pursuant to the specified
method of payment.
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<PAGE>
ARTICLE EIGHT
SEPARATION BENEFITS
8.1(a) Vesting. A Participant shall become fully vested in his
Participant account immediately upon entry into the Plan, and as such shall have
at all times a 100% nonforfeitable right to his Participant account.
No Participant shall forfeit any part of his account until the earlier
of (a) five (5) consecutive one-year Breaks in service or (b) a
cash-out distribution of the entire vested portion of his account
balance derived from Company Contributions, following the Participant's
termination of employment. As of the last day of the Plan Year with or
within which such Breaks in Service or cash-out distribution has
occurred, the nonvested portion of such Participant's account, if any,
shall be forfeited and administered as provided in Article 4.
(b) Distribution. If, upon termination of a Participant's
employment for any reason other than retirement, death or
total and permanent disability, the present value of the
Participant's vested account shall not exceed $3,500, (or
such lesser amount as may be prescribed by the regulations
of the Secretary of the Treasury governing such payments),
the Plan Administrator may direct the Trustee to
distribute the value of the vested account to the
Participant.
If the present value of the Participant's vested account exceeds
the amount specified in the preceding sentence, the Participant
and his spouse, if any, may file with the Plan Administrator a
written request for the payment of the entire amount of his
vested account, and the Plan Administrator may thereupon direct
the Trustee to pay out this amount.
(c) Administration of Participants' Accounts. No share of gains or
losses shall be credited to the forfeitable portion of a
Participant's account, if any, after the last valuation date
prior to the date the forfeiture occurs, until the next
valuation date following the date, if any, as of which the
Participant's account is restored.
Following completion of distributions, a Participant's account
derived from Company contributions shall be cancelled, as of the
date the non-vested portion of his account, if any, would be
forfeited.
VIII-1
<PAGE>
If the Participant is not vested in any portion of his account,
upon forfeiture the account shall be cancelled.
If the Participant is vested in all or a portion of his account,
and no distribution is made following termination of employment
or the occurrence of a 1 year Break in Service, a 100% vested
account shall be maintained for his vested interest in the Plan,
as of the date the nonvested portion of his account, if any,
would be forfeited. If this account is subsequently distributed,
upon completion of payment the account shall be cancelled.
Subject to Subparagraph 8.1(d) below, if the Participant,
subsequent to cancellation of his account, becomes eligible at a
later date to share in Company Contributions (including
forfeitures) and earnings thereon they shall be allocated to a
newly established regular account.
(d) Restoration of a Participant's Accounts Following Forfeiture.
The concept "Restoration of a Participant's Account" does not
apply in the case of a Participant who was already 100% vested
in his account prior to the occurrence of an event (distribution
or incurrence of a 1 year Break in Service) which would
otherwise cause a forfeiture.
Only the amount in an account which has been forfeited is
subject potentially to restoration. Such an amount shall be
equal to the amount forfeited to the Trust, unadjusted for gains
or losses, and shall be termed the "Restoration Amount".
If a Year of Service is credited to a Participant following an
event causing forfeiture, restoration of the amount forfeited is
possible, provided that said Year of Service is not preceded by
the incurrence of a period of 5 or more consecutive 1 year
Breaks in Service.
A possible restoration automatically will become an actual
restoration, if no distribution has occurred with respect to the
vested portion of the affected Participant's account deriving
from Company Contributions.
If distribution of all of a Participant's vested account
deriving from Company Contributions has occurred, in order for a
possible restoration to become an actual restoration, the
Participant must repay the full amount of the distribution. Such
repayment may be made no later than the later of: the end of the
5 year period following distribution, or the end of the Vesting
Computation Period within which the Participant has the 5th of 5
consecutive
VIII-2
<PAGE>
1 year Breaks in Service. In the event the Participant repays
the distribution within the time allowed, Company shall add the
amount of repayment to the amount in the Participant's account.
An actual restoration shall occur on the date as of which
Company Contributions, if any, would be allocated, coincident
with or next following the fulfillment of all conditions
required for restoration, and such date shall be termed the
"Restoration Date".
The Restoration Amount shall be derived from Company
contributions, which shall accrue as of the Restoration Date.
Said company Contributions shall be paid no later than the Plan
Year following the end of the Plan Year in which the
contribution is accrued, notwithstanding any absence of profits
of Company.
No repayment by any Participant and no Restoration Amount shall
constitute Annual Additions under the Plan.
It shall be the duty of the Plan Administrator to give timely
notification to any rehired Employee, if such Employee is
eligible to make repayment, of his right to make repayment.
In the event a restoration of a Participant's account following
forfeiture occurs, service performed both prior to and
subsequent to the forfeiture shall be credited, to determine his
vested interest in his entire account derived from Company
contributions.
If an Employee has the right to repay a distribution, service
performed prior to forfeiture may not be disregarded, whether or
not repayment is made, for purposes of determining the
Participant's vested interest in account allocations made
subsequent to the date of forfeiture.
If an Employee is rehired prior to a 1 year Break in Service,
and if no distribution has been made to such Employee in
accordance with Subparagraph 8.1(b), for purposes of determining
the Employee's vested interest in both his pre-termination and
post-termination account allocations under the Plan, service
performed prior to termination shall be taken into account.
If an Employee completes a Year of Service after a Break in
Service consisting of 5 or more consecutive 1 year Breaks in
Service, whether or not a distribution has been made to such
Employee, for purposes of determining the
VIII-3
<PAGE>
Employee's vested percentage in his account allocated to him
before such break, post-break Years of Service shall not be
credited, but pre-break Years of Service shall be credited to
determine the Employee's vested percentage in post-break account
allocations, unless the rule of parity provided in Subparagraph
8.2 (a) applies.
8.2 For purposes of determining Years of Service under Paragraph 8.1
above, all Years of Service with the Company are to be credited for purposes of
vesting, except:
(a) Years of Service prior to any period of consecutive 1 year
Breaks in Service, if the Employee was not vested in
benefits deriving from Company Contributions at the time
he incurs a period of consecutive 1 year Breaks in
Service, and his number of consecutive 1 year Breaks in
Service equals or exceeds the greater of 5 or the
aggregate number of his Years of Service, whether or not
consecutive, completed before such period of consecutive 1
year Breaks in Service.
(b) Years of Service prior to any period of consecutive 1 year
Breaks in Service, until the Participant has completed 1 year of
Service after such period.
8.3 The nonforfeitable account of a Participant shall be the product of
his vested percentage times his account balance. If the vesting schedule of the
Plan is or has been amended, for all Plan Years beginning with the Plan Year in
which the amended vesting schedule is effective, the vested percentage of a
Participant's account balance shall be computed in accordance with the amended
schedule.
However, at no time after the date of adoption of an amended vesting
schedule (or the effective date, if later) shall a Participant's
nonforfeitable amount be less than an amount ("V") determined by the
formula: V = (A x C(1)) + (B x (C(2) - C(1)). For purposes of applying
the formula: A is the vested percentage at the date of adoption of an
amended vesting schedule (or its effective date, if later), B is the
vested percentage at any time after the amendment, computed in
accordance with the amended vesting schedule, C(1) is the account
balance at the date of adoption of the amended vesting schedule (or its
effective date, if later), and C(2) is the account balance at any time
subsequent to the date or adoption (or its effective date, if later).
8.4 A Participant having at least 5 Years of Service with the Company,
prior to the expiration of the election period described below, may elect to
have his vested portion computed under the Plan, without regard to any
subsequent amendment to the vesting schedule. An amendment to the vesting
schedule includes any
VIII-4
<PAGE>
amendment which directly or indirectly affects the computation of the vested
percentage of an Employee's account balance, and includes any change resulting
from the operation of Paragraph 18.4. Such an election shall be irrevocable, and
must be filed with the Plan Administrator no later than 60 days after the day
the Plan amendment is adopted, or becomes effective, or the Participant is
issued written notice of the amended vesting schedule by the Plan Administrator
(whichever last occurs). In the event that a Participant makes the election as
hereinabove provided, the vesting schedule in effect prior to the amendment of
the vesting schedule shall apply to determine the vested percentage of such
participant's account.
Notwithstanding the above, no election shall be permitted if the
vesting schedule in effect prior to the amendment did not satisfy the
requirements of Internal Revenue Code Section 411(a) (2), unless under
such schedule all Participants are at least 50 percent vested after 10
Years of Service and 100 percent vested after 15 Years of Service.
Furthermore, no election shall be allowed to any Participant whose
vested percentage under the Plan, as amended, cannot be less at any
time than such percentage determined without regard to such amendment.
8.5 Any Participant who has terminated employment or who is no longer a
member of an eligible class of Employees, and who is entitled to a deferred
vested benefit under the Plan, and who has not received a distribution of such
benefit by the end of the Plan Year following the Plan Year in which such
termination of employment or eligibility occurred, shall be given notification
of the following by the Plan Administrator: the amount of his vested benefit,
the amount of his pre-retirement death benefit, the Normal Retirement Date of
the Plan, any benefits which are forfeitable if the Participant dies before a
certain date, and such other information as may be prescribed by regulations
issued by the Secretary of the Treasury or his delegate.
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<PAGE>
ARTICLE NINE
PAYMENT OF BENEFITS
9.1 When a participant's employment is terminated or where a 1 year
Break in Service has occurred, the Plan Administrator shall determine his
interest, and if the full amount of his vested interest is not to be distributed
immediately to the Participant, the Plan Administrator shall cause such
Participant's interest to continue to be separately accounted for on the books
and records of the Plan. Until the full amount of his vested interest shall have
been distributed to the Participant in accordance with the terms hereof, there
shall be added to the balance of such Participant's account the income earned by
his account. The Plan Administrator may direct the trustee to place the value of
such account in one or more federally insured bank or savings and loan accounts
(including certificate of deposit accounts) in the name of the Trustee in trust
for said Participant, in which case the interest shall be credited to his
account at such times as are provided by the account but at least annually. In
the absence of such direction, Trustee, in its discretion shall invest the
account proportionately as Trustee determines and income and loss shall be
allocated as provided in Subparagraph 4.5(b). The Trustee may charge against
such account a prorate portion of the fees and expenses incurred in the
administration of the Plan.
9.2 Payments by Trustee to any Participant of such Participant's entire
interest hereunder shall begin on the first day of the month following the
latest to occur of:
(a) the Normal Retirement Age; or
(b) The Plan Anniversary Date coinciding with or following
termination of service with Company. However, in no event
shall such payments commence after April 1st of the
calendar year following (a) the calendar year in which he
attains age 70 1/2, or (b) in the case of a Participant
who is not a 5 percent owner (as defined in Subparagraph
2.1(t)), the calendar year in which he retires, whichever
is the later. Notwithstanding anything herein to the
contrary, clause (b) above shall not apply in the case of
an employee who is a 5 percent owner (as defined in IRC
section 416 (i) (1) (B)) at any time during the 5-plan-year
period ending in the calendar year in which the employee
attains age 70 1/2. If the employee becomes a 5 percent
owner during any subsequent plan year, the required
beginning date shall be April 1 of the calendar year
following the calendar year in which such subsequent plan
year ends.
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<PAGE>
Trustee may make payments at an earlier date than hereinabove set
forth as directed by the Plan Administrator for reasons of death,
disability, early retirement or termination of service; provided,
however, that all Participants shall be treated alike under like
circumstances.
A Participant may make an election to defer commencement of payment of
benefits beyond the latest of the dates given above, provided that the
election is made in writing, signed by the Participant and submitted to
the Plan Administrator prior to the close of the Plan Year following
which payment of benefits would otherwise commence. The election shall
describe the mode of payment of the benefit and the date on which the
payment of such benefit will commence. If payment is to be other than in
the form of a qualified joint and survivor annuity the decision of the
Plan Administrator as to the form in which the benefit shall be payable
shall be required as provided in Subparagraph 9.3(c). In no event may an
election be made which would violate the restrictions contained in
Subparagraph 9.3(c) or which would defer commencement of benefits beyond
the taxable year of the Participant in which he attains 70 1/2.
If a Participant has separated from service with a vested benefit
before the first day of the next Plan Year after attaining his 55th
birthday, he is entitled at that date to receive a benefit equal to the
benefit to which he would be entitled at the Early Retirement Date.
9.3 The Plan Administrator shall take action as may be necessary to
provide a settlement of Participant's account. All payments hereunder shall be
made in cash, securities or such other property as the Plan Administrator may
determine in its sole and absolute discretion. All modes of settlement, basic
and optional, are available to Participants or Beneficiaries under Article 5, 6
and 7 as provided herein. Payments made under Article 8 shall be in the form of
complete lump sum payments only.
(a) The basic mode of settlement for a Participant married on
the date benefits commence shall be a qualified joint and
survivor annuity contract, providing for non-increasing
payments of an actuarially equivalent value of the
Participant's vested Account Balance derived from both
Employer and Employee contributions. Benefits will be
distributed in the form of a qualified joint and survivor
annuity to a married Participant, unless both the
Participant and his spouse elect not to have his benefits
paid in that form. If the Participant is unmarried,
benefits will be provided in the form of an annuity for
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<PAGE>
the life of the Participant, unless the Participant elects
not to receive benefits in that form.
The term "Annuity Starting Date" shall mean (a) the first day of
the first period for which an amount is payable as an annuity,
or (b) in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which
entitle the Participant to such benefit.
A qualified joint and survivor annuity is an annuity for the
life of the participant with a survivor annuity for the life of
his spouse which is not less than one half of, or greater than,
the amount of the annuity payable during the joint lives of the
participant and his spouse and which is the actuarial equivalent
of a single annuity for the life of the Participant.
The specific ratio of the survivor annuity to the joint life
annuity shall be 100% unless the Participant requests otherwise
in which case the ratio shall be determined by the Plan
Administrator subject to the requirement that it be qualified.
Participants with respect to which benefits shall be paid,
absent a contrary election, in the form of a qualified joint and
survivor annuity are those who:
(1) Begin to receive payments on or after the qualified Early
Retirement Date. The qualified Early Retirement Date shall
be the latest of: (A) the earliest date under the Plan for
early retirement, (B) the first day of the 120th month
beginning before the Participant reaches the Normal
Retirement Age, or (C) the date on which the Participant
begins participation; or
(2) Begin to receive payments on or after the Normal Retirement
Date.
If a Participant has not elected not to receive his benefit in
the form of a qualified joint and survivor annuity, the spouse
of such Participant if the participant dies under the
circumstances described below, shall receive a survivor annuity
for life payable at the later of Normal Retirement Date or 60
days after the date of death of the Participant. The spouse may
elect not to receive the survivor annuity, as provided below.
The amount of the survivor annuity shall be in the amount which
can be purchased by the balance in the Participant's account at
the time for commencement of payment of
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<PAGE>
benefits but not less than the amount the spouse would have
received had the Participant commenced receiving benefits at the
later of Normal Retirement Age, or the day before his death in
the form of a qualified joint and survivor annuity which
provided a survivor annuity in an amount equal to the amount of
the annuity payable during the joint lives of the Participant
and his spouse.
In no event, however, shall the spouse survivor annuity be in an
amount greater than that which can be purchased by the balance
in the Participant's account at the time for commencement of
payment of such survivor benefit, less the proceeds of any
Contract payable to a named person (other than the Trustee) who
is not the spouse of the Participant.
The spouse survivor annuity shall be paid, absent any contrary
elections, if the Participant:
(1) Dies on or after the Normal Retirement Age while
employed by Company, or
(2) Dies before beginning to receive benefits after separating
from service on or after the Normal Retirement Age or the
qualified Early Retirement Date but after satisfaction of
eligibility requirements for the payment of benefits under
the Plan.
(b) During the election period described below the Participant, or
his surviving spouse, may elect in writing not to receive
benefits under the Plan in the basic mode of settlement, or the
survivor annuity, as the case may be. In the event that the
Participant or his spouse makes the above election any death
benefits under the Plan shall be paid as provided in Article 7
and any retirement benefits shall be paid as provided under
Subparagraph 9.3(c) below.
The Plan Administrator shall furnish the married Participant in
writing the following basic information:
A general description of the qualified joint and survivor
annuity; the circumstances in which it will be provided
unless the Participant elects not to have benefits provided
in that form; the availability of such election; a general
explanation of the relative financial effect on a
Participant's benefit of such an election; and the
availability of additional information to be furnished
within 30 days from the date of the Participant's written
request on the specific terms and conditions of the
qualified joint
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and survivor annuity and the specific financial
effect on the particular Participant of making the
above election.
The Participant must make such written request for additional
information so that it be received by the Plan Administrator
within 90 days prior to the commencement of benefits. Such basic
information may be furnished to a married Participant at any time
but even if the information has been previously provided, it
must be furnished by mailing or personal delivery so as to be
received on or about the later of 9 months before the married
Participant reaches the qualified early Retirement Date or the
date the married Participant begins participation in the Plan.
The election period shall commence on the day the above basic
information is furnished and shall end on the 60th day before the
commencement of benefits. If the married Participant requests
additional information as provided above the election shall be
extended, if necessary, to include the 90 days following the day
the requested additional information is personally delivered or
mailed to the Participant.
The Plan Administrator shall furnish the surviving spouse
eligible for a survivor annuity a written explanation of the
survivor annuity and of the amounts, forms, and recipients of
payments available pursuant to the provisions of Article 7 of the
Plan. Such information shall be furnished within 30 days after
notification of the death of the Participant. The surviving
spouse may elect to have benefits paid pursuant to the provisions
of Article 7, in lieu of receiving the survivor annuity for which
she is eligible. If such election is not made, the amount
otherwise payable under Article 7 shall instead be payable to the
surviving spouse pursuant to the provisions of this Paragraph.
The period for making this spousal election shall commence on the
day of the receipt of the above written explanation and shall end
on the 30th day thereafter. The period for making the above
election may be extended at the discretion of the Plan
Administrator. Any election made by the Participant or his
surviving spouse, as the case may be, may be revoked in writing
during the applicable election period, and after such election
has been revoked, another election may be made during the
applicable election period.
(c) If the married Participant elects not to receive payment in the
form of a qualified joint and survivor annuity or if the
Participant is not married at the time benefits
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commence, the Plan Administrator upon consultation with the
Participant shall provide a settlement from among the optional
modes of settlement provided below and in conformity with the
following requirements. All modes of settlement, both basic and
optional, shall have an equal present actuarial value at the
time of commencement of payment. No optional settlement shall be
allowed for payments due under Article 5 and 6 under which the
actuarial present value of the payments to be made to the
Participant is not more than 50% of the actuarial present value
of the total payments to be made to the Participant and his
Beneficiaries, except in the case of a distribution over the
joint life and last survivor expectancy of the Participant and
his spouse. No insurance contract distributed as provided below
may permit the time, amount, or duration of payment to be not in
conformity with the above restriction. At any time after
payments commence but before the taxable year of the Participant
following the taxable year in which he attains 70 1/2, a
Participant may request and the Plan Administrator may permit a
change in the optional mode of settlement.
The following optional modes of settlement are provided:
(1) Payment of all or (in the case of (5) below) part of the
Participant's vested accrued benefit in a lump sum.
(2) Payments over the lifetime of the Participant or the life
of the Participant and his spouse.
(3) Payments in annual, semi-annual, quarterly or monthly
installments over a period certain not extending beyond the
life expectancy of the Participant or beyond the joint life
and last survivor expectancy of the Participant and his
spouse, with such expectancy being computed by use of the
expected return multiples contained in Treasury Regulation
Section 1.72-9, or, in the case of payments by Insurer,
the period computed by use of the mortality tables
utilized under the contract.
(4) In the form of a non-transferable annuity Contract
providing payments over a period described in (2) or (3)
above in either non-increasing payments or at a rate which
satisfies the requirements contained in subparagraph 9.3(d)
below.
(5) Any combination of the above.
IX-6
<PAGE>
(d) The timing and amount of any payment to be made (limited to the
unpaid portion of a Participant's accrued benefit) under an
optional mode of settlement shall be determined by the
Participant or by Insurer whose payments are made under a
Contract (subject to such rights as the Contract reserves to the
Participant), subject to the following minimum distribution
requirement: beginning in the later of the taxable year in which
the Participant attains age 70 1/2, or in the case of a
Participant who is not a Key-Employee in a Top-Heavy Plan the
taxable year in which he retires, the amount to be distributed
each year shall be no less than the lesser of the unpaid portion
of the participant's accrued benefit or an amount equal to the
quotations obtained by dividing the entire unpaid portion of the
Participant's accrued benefit at the beginning of such year by
the life expectancy of the Participant (or the joint life and
last survivor expectancy of the Participant and spouse (whichever
is applicable)), determined in either case as of the
Determination Date, that is the date the Participant attains age
70, or, if later, in the case of a Participant who is not a Key-
Employee in a Top-Heavy Plan as of the age (counted in whole
years) at the date the Participant retires, by use of the
expected return multiples in Treasury Regulations Section 1.72-9,
or in case of payments by Insurer or the period computed by use
of the mortality tables utilized under the Contract, reduced by 1
for each taxable year commencing after the measurement date.
However, no distribution need be made in any year, or a lessor
amount may be distributed, if beginning with the year the minimum
distribution requirement first applies, the aggregate amounts
distributed by the end of any taxable year are at least equal to
the aggregate of the minimum amounts required to have been
distributed by the end of such year.
(e) Any sums remaining payable under an optional mode of settlement
at the death of a Participant, either before or after
commencement of distributions to him, shall be paid to his
Beneficiary as follows: If the Beneficiary is the surviving
spouse, the spouse shall have available to him all methods of
distribution permitted under Article 9; if the Beneficiary is
other than a surviving spouse, unless distribution has commenced
over a period certain in accordance with Subparagraph 9. 3 (c)
(3) above, the entire balance remaining payable must be
distributed within 5 Years after the death of the Participant.
However, if distribution has commenced to the Participant under a
method of distribution which takes into account the life or life
expectancy of the Participant's spouse, the 5 year period within
which distributions must be completed will be measured from the
later of the date of death of the
IX-7
<PAGE>
Participant or his spouse. Further provided, however, that the 5
year distribution rule shall not apply if the Participant has,
prior to January 1, 1984, made a written designation to have his
death benefits paid in an alternative method. Any written
designation, if made, shall be binding upon the Plan
Administrator notwithstanding the provision of 9.3.
(f) Actuarial equivalence shall be determined by the Plan
Administrator on the basis of consistently applied reasonable
actuarial factors. Such factors shall be the same for all
Participants retiring during the same Plan Year, but they may be
adjusted from year to year in order to remain reasonable.
(g) "Spouse" for purposes of any spouse survivor benefits payable
under this Plan shall mean "the Spouse of the Participant on the
date payment of benefits commences."
(h) Notwithstanding anything to the contrary contained herein, no
qualified joint and survivor annuity, and no qualified
pre-retirement survivor annuity will be paid, and no optional
mode of settlement will be available if the present value of such
benefit does not exceed $3,500 prior to the Annuity Starting
Date. Such value will be distributed in a lump sum immediately
upon determination of the amount due on account of retirement
(including disability retirement) or death. If the present value
of such benefit exceeds $3,500, the written consent of the
Participant and his spouse, if any, is required before the
commencement of distribution of such benefits.
9.4 A claim for benefits must be filed before payment of retirement,
disability, or death benefits will commence. A claim shall be deemed
filed when a Participant, or Beneficiary, in the case of death
benefits, or their authorized representative, requests, orally or in
writing, payment of benefits due under the Plan. The claim may be
filed with the Plan Administrator; any officer of the Company; or if
the Company has an organizational unit which customarily handles
Employee benefit matters, with any person employed in such unit. In
the event that a claim for benefits is filed, the Plan Administrator,
within 90 days after the claim is filed, shall give notice of the
decision on the claim; and if notice on the denial of a claim is not
furnished, and the claim has not been granted within the 90 day claims
Proceeding period, the claim shall be deemed denied for the purpose of
processing to the review stage as hereinafter Described.
(a) The 90 day time period mentioned above may be extended by the
Plan Administrator for an additional 90 days if
IX-8
<PAGE>
special circumstances require an extension of time for
processing the claim. If an extension is required the Plan
Administrator shall furnish written notice of the 90 day
extension to the claimant prior to the termination of the
initial 90 day period. The extension notice shall indicate the
special circumstances requiring an extension of time and the
date by which the Plan Administrator expects to render the final
decision.
(b) The Plan Administrator shall provide to every claimant who is
denied a claim for benefits written notice setting forth:
(1) The specific reason or reasons for the denial,
(2) The specific reference to the pertinent Plan provisions on
which the denial is based,
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary, and
(4) An explanation of the Plan's claim review procedure.
(c) In the event that the claim of the Participant or Beneficiary is
denied, the claimant or his duly authorized representative may
request a review of the denied claim by means of a written
application for review delivered to the Plan Administrator.
Pursuant to this right to review, the claimant or his duly
authorized representative may review pertinent documents and
submit issues and comments in writing.
(d) Any request for review of a denied claim must be filed no later
than 60 days after the earlier of receipt by the claimant of
written notification of denial of a claim, or the expiration of
the 90 day claims processing period including any extension
thereof.
(e) In the event a request for review has been made as herein above
provided, the Plan Administrator shall make a decision on the
request for review within 60 days after the receipt by the Plan
Administrator of the request for the review, unless special
circumstances require an extension of time for processing the
review, in which case the Plan Administrator shall render a
decision as soon as possible, but in no event later than 120 days
after the Plan Administrator has received the request for review.
IX-9
<PAGE>
If an extension is required the Plan Administrator shall furnish
written notice of the extension to the claimant prior to the
commencement of the extension. The decision on review shall be
furnished to the claimant in writing within the time for review
and shall include specific reasons for the decision, as well as
specific references to the pertinent Plan provisions on which the
decision is based.
9.5 If the Plan Administrator is unable after diligent search to locate
a Participant or Beneficiary to whom a benefit is due under the provisions of
this Plan, such benefit shall be forfeited on the last day of the Plan Year in
which such search is concluded and such forfeiture shall be administered in
accordance with Article 4. If a claim is made subsequently by such Participant
or Beneficiary for the forfeited benefit, such benefit shall be restored in
full.
IX-10
<PAGE>
ARTICLE TEN
SPENDTHRIFT CLAUSE
10.1 The provisions of this Plan are intended as personal protection
for the Participant. A Participant shall not have any right to assign,
anticipate or hypothecate any assets held for his benefit, including amounts
credited to his account, except as security for a loan from the Plan to the
Participant. The benefits under this Plan shall not be subject to seizure, legal
process or be in any way subject to the claim of the Participant's creditors,
including, without limitation, any liability for contracts, debts, torts,
alimony or support of any relatives, except that the Plan has the right to
recover overpayments of benefits previously made to a Participant. None of the
Plan's benefits or the Trust's assets shall be considered an asset of the
Participant in the event of insolvency or bankruptcy.
10.2 Notwithstanding the provisions of this Article the Plan
Administrator and/or Trustee are hereby authorized to comply without objection
to any court order pertaining to benefits in pay status with respect to alimony,
separate maintenance, child support or division of property in the event of
divorce, provided they have received an opinion from counsel that such
compliance would not violate any federal law, jeopardize the qualification of
the trust, or render the Plan Administrator or the Trustee liable to any Plan
Participant or Beneficiary on account of such compliance.
X-1
<PAGE>
ARTICLE ELEVEN
INSURANCE CONTRACTS
11.1 Trustee shall, within 60 days after being directed by the Plan
Administrator, by uniform procedures applicable to all Participants, and with
due regard to the preference of each Participant, purchase paid-up or annual
premium life insurance, endowment, retirement income or annuity Contracts for
the benefit of each Participant. Each Participant has the right to direct the
Plan Administrator to have the Trustee purchase Contract(s) on his life, to
specify the amount of premium on such Contract and type of Contract (subject to
the limitations of this Article and the underwriting limitations of the Insurer
selected by Trustee) or to waive any such purchase contemplated by the Plan
Administrator. Trustee shall be the complete and absolute owner of all Contracts
held in the trust and shall exercise all rights, options and privileges under or
incident to the Contracts, including the privilege to designate the Beneficiary.
Premiums shall be charged, and dividends, refunds or cash surrender values
received under a Contract shall be credited to the account of the participant
for whose benefit the Contract is held. Proceeds payable upon death shall be
paid to the Beneficiary designated, in accordance with Article 7. The aggregate
amount of the premium paid on all ordinary life insurance Contracts purchased
for the benefit of any particular participant shall, at all times, be less than
50 percent of the total Company contributions and forfeitures used to reduce
Company contributions allocated to such Participant's account, provided,
however, if such Participant so elects and voluntary contributions are made by
him, Contracts may be purchased for such Participant in excess of this
limitation, if the premiums on such Contracts will be less than 50 percent of
the total Company contributions and forfeitures used to reduce Company
contributions allocated to the Participant's account plus voluntary
contribution. The aggregate amount of the premiums paid on all term life
insurance contracts purchased for the benefit of any particular participant
shall, at all times, be less than 25 percent of the total Company contributions
and forfeitures used to reduce Company contributions allocated to such
Participant's account, provided, however, if such Participant so elects and
voluntary contributions are made by him, Contracts may be purchased for such
Participant in excess of this limitation, if the premiums on such Contracts will
be less than 25 percent of the total Company contributions and forfeitures used
to reduce Company contributions allocated to the Participant's account plus such
voluntary contribution.
XI-1
<PAGE>
If any Company contributions to any Participant's account are applied to pay
premiums on both ordinary life insurance and term life insurance policies, the
total of the term life insurance premiums and one-half of the ordinary life
insurance premiums shall be less than 25 percent of the total Company
contributions and forfeitures used to reduce Company contributions allocated to
such Participant's account, provided, however, if such Participant so elects and
voluntary contributions are made by him, Contracts may be purchased for
Participant in excess of this limitation, if the total of the term life
insurance premiums and one-half of the ordinary life insurance premiums on such
Contracts will be less than 25 percent of the total amount of Company
contributions and forfeitures used to reduce Company contributions allocated to
the Participant's account plus such voluntary contribution. Solely for purposes
of computing the limitations contained in this paragraph, contributions made by
Company prior to the end of the Plan Year shall be deemed allocated to specific
Participant accounts.
11.2 If at any time the Trustee shall be unable to pay all or any
portion of the premiums for any reason, the Trustee shall be empowered in his
sole and absolute discretion to borrow prorate all or any portion of the
required payment from the Insurer on the security of the Contract, or to convert
the Contract into a paid-up policy, or to cash in the Contract.
11.3 Trustee shall convert the entire value of any life insurance
Contract at or before retirement into cash or an annuity to provide periodic
income, so that no portion of such value may be used to continue lifetime
insurance protection beyond retirement, or Trustee may distribute the Contract
to the Participant. If a Participant terminates employment prior to retirement
such conversion shall take place no later than one year after the date any
benefits would, if forfeitable, be forfeited pursuant to Paragraph 8.1, but if a
distribution is made to such Participant prior to that time the Trustee shall,
if directed by the Plan Administrator, distribute the Contract to the
Participant. In the event that the Participant is less than 100% vested in his
account balance at the time of distribution the Trustee shall, if so directed by
the Plan Administrator, allocate the Participant's vested interest first to the
cash value of the Contract after determining the total dollar value of his
vested interest, with any value of his vested interest in excess of the cash
value of the Contract to be allocated to the remaining portion of his account.
If after making the above allocation, the Participant's vested interest in the
contract is less than the total cash value, the Trustee shall, as directed by
the Plan Administrator, either take a loan against the Contract for the amount
of the non-vested cash value and then distribute the Contract, or sell the
Contract to the Participant for an
XI-2
<PAGE>
amount equal to the difference between the total cash value and the
participant's vested interest therein.
In the event the Contract has no cash value, the trustee shall, when directed by
the Plan Administrator, distribute the Contract to the terminated Participant if
he so requests, whether or not such Participant is vested in all or any portion
of his account.
XI-3
<PAGE>
ARTICLE TWELVE
RIGHT TO ALTER, AMEND OR TERMINATE TRUST
12.1 The Company shall have the right at any time to discontinue its
contributions hereunder and to terminate or partially terminate this Plan and
Trust. In the event that Company shall be legally dissolved, or declared
bankrupt, shall make a general assignment for the benefit of creditors or merge
into or with another company which shall not assume the obligations of this
Agreement, this Plan shall automatically terminate.
In the event the Plan and Trust is automatically terminated as provided in above
or in the event that subsequent to the voluntary termination of the plan by
Company any of the events causing automatic termination occur prior to the final
and complete distribution of assets from the Trust, Trustee shall automatically
be vested with all rights, powers and duties otherwise reserved in this
Agreement and Trust to Company. Plan Administrator and Named Fiduciary,
including but not limited to the right to amend this Agreement and Trust, to
liquidate the Trust, and to continue the Plan and Trust in force.
12.2 The Company reserves the right to amend this Plan and Trust in
writing at any time without the consent of any Participant or Beneficiary;
provided, however, that no amendment to this Plan or Trust shall deprive any
Participant or Beneficiary (including any Participant or Beneficiary who is
already receiving benefits) of any vested interest herein except as may be
allowed by Federal Law nor shall such amendment increase the duties or
obligation of the Trustee herein except with his consent.
12.3 This Plan may not merge or consolidate with, or transfer assets or
liabilities to, any other plan unless each Participant in the Plan would, if the
plan then terminated, receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit that
such Participant would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.
12.4 In the event of partial or complete termination of this Plan and
Trust, or upon the complete discontinuance of Company contributions under the
Plan, the Trustee shall when so directed by the Plan Administrator distribute
the assets of the fund to the Participants affected or their Beneficiaries. The
Plan Administrator may but is not required to grant each
XII-1
<PAGE>
Participant the right to elect in an irrevocable election to receive a complete
distribution from his account. Failure to elect such a distribution shall
constitute an irrevocable election to defer distribution until the times
specified with regard to death, disability and retirement payments as provided
in this Plan or in any successor Plan, and Trustee is hereby precluded from
making distributions at any earlier time to any Participant who fails to elect
complete distribution and whose employment with Company has not terminated. Said
election shall take place during a period of time not exceeding 60 days
prescribed by the Plan Administrator and communicated to Plan Participants.
Alternatively, the Plan Administrator may direct that complete distributions be
made to all participants affected or their Beneficiaries or that all
distributions be made as set forth in the other provisions of the Plan and
Trust. Distributions shall be made in cash, unless the Plan Administrator
directs the Trustee to make distributions in securities or other property
(including Contracts on the lives of Participants). In the absence of any
direction to make distribution to all Participants and/or Beneficiaries, the
Plan and Trust will continue in force, and distributions will be made in the
same manner and under the same conditions as set forth in the Plan and Trust,
and the Plan and Trust will not terminate until all the assets of the Trust have
been distributed. It is the intent of the parties that the exempt status of the
Trust under Section 501 of the Internal Revenue Code of 1986, as amended, will
continue.
12.5 Upon the date of termination of the Plan, partial termination of
the Plan, or complete discontinuance of contributions, the rights of each
affected Participant to the amount credited to his account at such time shall be
fully vested, except as provided in Article 16. If any funds (other than Company
contributions or forfeitures not required to be allocated to meet the
liabilities of this Plan) have not been allocated prior to date of termination,
partial termination, or complete discontinuance of contributions, such funds
shall be allocated on the earlier of the date of liquidation or the Trust on the
next regular allocation date pursuant to Paragraph 4.5, and subject to the
limitations provided in Paragraph 4.3. Any investment earnings and realized or
unrealized gains and losses subsequent to such allocation date shall likewise be
allocated pursuant to Paragraphs 4.5 and 4.3, at least annually and, in any
event, as of the date of final and complete distribution.
XII-2
<PAGE>
ARTICLE THIRTEEN
LOANS
13.1 Trustee, upon application from any Participant, in accordance with
a uniform nondiscriminatory policy, may make a loan or loans to such
Participant.
13.2 Loans will be limited to the lesser of:
(i) 1/2 of the present value of the Participant's
nonforfeitable account balance (except that loans of up to $10,000 may
be made to participants if these loans are adequately secured and are
not in excess of the present value of the Participant's total accrued
benefit);
(ii) $50,000 reduced by the maximum outstanding loan
balance (if any) during the 12 month period ending on the day before the
loan is taken.
13.3 Loans must be made available to all Participants on a reasonably
equitable basis and the availability shall be communicated to all Participants.
Loans shall not be made available to Highly Compensated Employees in an amount
greater than that made available to other Employees.
13.4 A reasonable rate of interest shall be charged on each loan. What
is reasonable depends on factors such as the amount of loan, adequacy of
security, duration of loan, repayment schedule, current market conditions,
variable or fixed rate of interest, what is customary in similar arm's length
transactions in the community; ie, average rate charged by area commercial banks
for the same type of consumer loan, and other economic and time factors.
13.5 All loan agreements shall provide for repayment within five (5)
years from the date of the loan, unless the loan is used to acquire the
Participant's primary residence.
13.6 All plans of all related businesses are to be combined for the
purposes of maximum limits on loans.
13.7 All loans must be evidenced by a written loan agreement signed by
all relevant parties to the loan and evidenced by a promissory note of the
borrower where the borrower personally guarantees the repayment of the loan and
secures the loan on the Participant's account balance.
13.8 A Participant's spouse must consent in writing for a Participant
to use any part of his account balance as security
XIII-1
<PAGE>
for the loan. Spousal consent shall be obtained no earlier than the beginning of
the 90 day period ending on the date the loan is made. The consent must
acknowledge the effect of the loan and must be witnessed by a plan
representative or notary public. The consent is binding with respect to the loan
for which it is given, on any subsequent spouse. A new consent shall be required
if the loan is revised, renegotiated, renewed or extended.
13.9 Loans may not be made to Owner-Employees or Shareholder-Employees
as defined in Code Section 1379.
13.10 The loan document must provide for payments to be made at least
quarterly in a level amount, which will fully amortize the loan over its
duration.
13.11 The Plan Administrator may provide for loans to be considered an
asset of the Trust Fund or as an investment of the borrower's account. The Plan
Administrator shall act consistently in making this determination.
13.12 A loan will not be foreclosed and security attached before a
distributable event occurs under the Plan. Any loan outstanding at the time a
Participant receives a distribution, shall be repaid by offsetting the balance
due (plus accrued interest and any costs) against the amount to be distributed.
13.13 If a valid spousal consent has been obtained in accordance with
Section 13.8, and the Participant's spouse does not receive the Participant's
entire vested benefits, then the vested benefits shall be reduced by the balance
due before determining the benefit payable to the Participant's surviving
spouse.
XIII-2
<PAGE>
ARTICLE FOURTEEN
TRUSTEE
14.1 The duties and responsibilities of the Trustee are limited to
those set forth in this Plan and Trust, and it shall be liable only for the
safeguarding and administration of the Trust principal in accordance with the
provisions of this Plan and Trust, except as otherwise provided by state or
federal law. If at any time there is more than 1 Trustee, all of them will
jointly manage and control the fund unless the responsibilities, obligations and
duties specified in this Plan are allocated among them in accordance with the
procedure set forth below. The Trustee shall discharge its duties with respect
to the Plan solely in the interest of the Participants and the Beneficiaries and
for the exclusive purpose of providing benefits to the Participants and their
Beneficiaries and defraying reasonable expenses of the Plan by administering the
Plan with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims.
14.2 The Trustee shall maintain full and complete records of the
administration of the Trust and shall be responsible for the management of the
Trust operation and its administration.
The Company and Plan Administrator may examine such records from time to time
during business hours. A Participant may also examine such records, as they
relate to his interest in the Trust principal, at such time deemed reasonable by
the Trustee.
14.3 Within a reasonable time after each Plan Year, and within 90 days
after its removal or resignation, Trustee shall file with the Company an account
of its administration of the Trust during such year or from the end of the
preceding Plan Year to the date of removal or resignation. Neither Company nor
any other person shall be entitled to any further accounting by Trustee, except
as provided by law.
14.4 To the extent permitted by the Employee Retirement Income Security
Act of 1974, Trustee shall be released from all liability to anyone as to any
transaction shown in an account stated under Section 14.3 except those as to
which the Company shall, within 90 days after the Trustee's filing of the
account, file with Trustee a written statement setting forth in detail the items
in or with respect to such account to which exception is taken. If such a
statement is filed, Trustee shall, unless the
XIV-1
<PAGE>
matter be compromised with the Company, file its account in any court of
competent jurisdiction for audit and adjudication.
14.5 Upon separate agreement between Trustee and Company, the fund may
be valued more frequently than annually for purposes of determining benefits or
costs under the Plan. If such agreement is made, the provisions of Section 14.4
shall also apply with respect to each such valuation.
14.6 The Trustee shall act at the direction of the Company and the Plan
Administrator, and Company agrees to indemnify Trustee against any liability
imposed as a result of a claim asserted by any person or persons where Trustee
acted in good faith at direction of Company or the Plan Administrator. The
Trustee is authorized on behalf of the Trust to execute the applications and any
other documents required by an Insurer issuing Contracts on the lives of the
Participants, and to exercise all of the rights, privileges and powers under
such Contracts. Written notification to an Insurer setting forth the name of the
Trustee hereunder shall be conclusive evidence for all purposes that the party
so named is Trustee hereunder at the date of such notification. The signature of
the Trustee shall be conclusive proof to the Insurer that the application is
being made for the proper Contract and is in accordance with the terms of this
Plan and Trust.
14.7 The Trustee may consult with any legal counsel even through
counsel for Company with respect to the construction of the Plan and Trust
either as to its duties thereunder or with respect to any legal proceedings or
questions of law, and will be fully protected with respect to any action taken
or omitted by it in good faith pursuant to the advice of such counsel. In
addition, the Company at the request of or with the concurrence of the Trustee
may employ such actuaries, accountants, specialists and other persons as the
Company or Trustee deems necessary or desirable in connection with the
administration of the Plan.
14.8 A Trustee shall not be liable, either individually or as Trustee,
for any losses resulting to the Plan arising from the acts or omissions on the
part of a Co-Trustee or Investment Manager to whom responsibilities, obligations
and duties have been allocated as to certain assets of the Fund. Any such
allocation of responsibilities among Trustees and/or the appointment of an
Investment Manager shall be made by the Named Fiduciary and evidenced by a
writing executed by all of the Trustees, the Named Fiduciary and the Investment
Manager, if any. Except as stated in the foregoing, in addition to any liability
which the Trustee may have under any other section of this Plan, the Trustee
with respect to the Plan shall be liable for breach of fiduciary duty of another
Trustee (1) if such Trustee
XIV-2
<PAGE>
participates knowingly in, or knowingly undertakes to conceal, an act or
omission of such other Trustee, including knowing such act or omission is a
breach; (2) if, by such Trustee's failure to comply with the standards in
performing its duties as set forth in Paragraph 14.1 hereof, in the
administration of such Trustee's specific responsibilities which give rise to
its status as a Trustee it has enabled such other Trustee to commit a breach;
(3) if such Trustee has knowledge of a breach by such other Trustee unless such
Trustee makes reasonable efforts under the circumstances to remedy the breach.
14.9 Trustee shall invest and reinvest the principal and income of the
trust and keep the same invested without distinction between the principal and
income.
14.10 Trustee shall have the following powers in addition to the powers
customarily vested in the Trustee by law and in no way in derogation thereof:
(a) With any cash at any time held by it, to purchase or subscribe
for any authorized investment, and to retain such authorized
investment in trust.
(b) To sell for cash or on credit, convert, redeem or exchange for
another authorized investment, or otherwise dispose of, any
authorized investment at any time held by it.
(c) To maintain a cash reserve in such a manner as the Trustee
shall deem advisable from time to time. Such cash reserve
may consist of uninvested contributions or of the proceeds
of the sale of the investments of the Trust, as the
Trustee in its sole discretion may determine. Such cash
reserve may be in a deposit account or invested in the
savings department of the Trustee if any, or as Trustee
may direct, in a bank, savings and loan association,
building and loan association, or savings bank, including
time deposits or certificates of deposit with maturities
of less than or more than one year.
(d) To exercise any options appurtenant to any authorized investment
in which the fund is invested for conversion thereof into another
authorized investment, or to exercise any rights to subscribe for
additional authorized investment, and to make all necessary
payment therefore.
(e) To join in, consent to, dissent from, oppose or deposit in
connection with the reorganization, consolidation,
recapitalization, sale, merger, foreclosure, or readjustment of
the finances of any corporations or properties in which the fund
may be invested, or the sale, mortgage, pledge or lease on any
such terms and conditions
XIV-3
<PAGE>
as it may deem wise; to do any act (including the exercise of
options, making agreements or subscriptions, and payment of
expenses, assessments or subscriptions) which may be deemed
necessary or advisable in connection therewith; and to accept
any authorized investment which may be issued in or as a result
of any proceeding, and thereafter to hold the same.
(f) To vote, in person or by general or limited proxy, at any
election of any corporation in which the fund is invested, and
similarly to exercise personally or by a general or limited
power of attorney, any right appurtenant to any authorized
investment held in the fund.
(g) To sell, option to sell, mortgage, lease for a term of
years less than or continuing beyond the possible date of
the termination of the trust created hereunder, partition
or exchange any real property which may from time to time
or at any time constitute a portion of the fund either at
public or private sale, for such prices and upon such
terms as it may deem best and to make, execute and deliver
to the purchasers thereof good and sufficient deeds of
conveyance thereof and all assignments, transfers and
other legal instruments, either necessary or convenient
for passing the title and ownership thereof to the
purchaser, free and discharge of all trusts and without
liability on the part of such purchasers to see to the
proper application of the purchase price.
(h) To repair, alter, or improve any buildings which may be on real
estate forming part of the fund, or to erect entirely new
structures thereon.
(i) To renew or extend or participate in the renewal or
extension of any mortgage, upon such terms as may be
deemed advisable, and to agree to a reduction in the rate
of interest on any mortgage or to any other modification
or change in the terms of any mortgage or of any guarantee
pertaining thereto, in any manner and to any extent that
may be deemed advisable for the protection of the fund or
the preservation of the value of the investment; to waive
any default, whether in the performance of any covenant or
condition of any mortgage or in the performance of any
guarantee, or to enforce any such default in such manner
and to such extent as may be deemed advisable; to exercise
and enforce any and all rights or foreclosure, to bid in
property on foreclosure, to take a deed in lieu of
foreclosure with or without paying a consideration
therefore, and in connection therewith to release the
obligation on the bond secured by such mortgage; and to
exercise and enforce in any action, suit or proceeding at
XIV-4
<PAGE>
law or in equity any right or remedies in respect to any
mortgage or guarantee.
(j) To purchase authorized investments at a premium or discount.
(k) To employ suitable agents and counsel with respect to investment
transactions and to pay their reasonable expenses and
compensation.
(l) To borrow or raise monies for the purpose of the Trust, in such
amounts and upon such terms and conditions as Trustee in its
absolute discretion may deem advisable, and for any sum so
borrowed to issue its promissory note as Trustee, and to secure
the repayments thereof by pledging or mortgaging all or any part
of the fund, provided that loans and repayments shall be made
prorata on all property and the Contracts of the same class or
type. No person lending money to Trustee shall be bound to see to
the application of the money lent or to inquire into the
validity, expediency or propriety of such borrowing.
(m) To cause any investment in the fund to be registered in,
or transferred into, its name as Trustee or the name of
its nominee or nominees or to retain them unregistered or
in form permitting transfer by delivery, if authorized by
the Company, but the books and records of Trustee shall at
all times show that all such investments are part of the
fund, and Trustee shall be fully responsible for any
misappropriation or defalcation in respect to any
investment held by its nominee or held in unregistered
form.
(n) To do all acts which it may deem necessary or proper and to
exercise any and all powers appurtenant to Trustee under this
Plan and Trust, upon terms and conditions as to it may seem best
for the best interest of the fund, except as otherwise provided
by state or federal law.
(o) To purchase securities on margins and to rehypothecate same.
(p) To purchase life insurance on the lives of the directors,
principal officers, or other key personnel of the Company made
payable to the Trust for the benefit of the fund.
14.11 "Authorized investment" as used herein shall include stock
(whether preferred or common), bank common trust funds (including those of the
Trustee, if any), bonds, debentures, notes or other evidences of indebtedness or
ownership (secured by mortgages including second mortgages or otherwise), put or
call
XIV-5
<PAGE>
options to buy or sell securities (whether listed or unlisted on any exchange
and whether covered or uncovered), any life insurance, retirement income,
endowment or annuity contract in a legal reserve life insurance company
authorized to do business in the state of domicile of the Trustee; and real and
personal property of all kinds, including leaseholds on improved and unimproved
real estate. Authorized investments shall not be limited to that class of
investments which is specifically authorized as a legal investment for trust
funds under the law of the state of domicile of the Trustee, but no investment
shall constitute an Authorized investment if such investment is prohibited by
governing local or federal law.
14.12 The Trustee shall not cause the Plan to engage in any transaction
if it knows that such transaction constitutes directly or indirectly a
prohibited transaction as described in Section 406 and 407 of the Employee
Retirement Income Security Act of 1974 and Section 4975 of the Internal Revenue
Code, or any amendments thereto, unless such transaction is excluded or exempted
from the provisions of Section 406 and 407 or Code Section 4975, by Section 407
and 408, or Code Section 4975, any exemption issued thereunder, or any
amendments thereto.
14.13 The initial Trustee heretofore designated in this Agreement and
Trust shall serve until his respective resignation, death, incapacity or
removal. Whenever a vacancy shall exist among the Trustees, the Company shall if
no Trustee remains or may if at least 1 Trustee remains name a successor Trustee
who may be an officer or director of the Company or who may be an Employee, or
who may be a person not employed by the Company. Whenever a successor Trustee
shall be appointed, he shall immediately and automatically succeed to and become
vested with the title to any trust assets theretofore vested in the Trustee that
such successor Trustee is replacing and the title of such former Trustee shall
automatically and immediately be extinguished. A successor Trustee shall
likewise serve until his resignation, death, incapacity or removal. The Company
shall always have the right to remove a Trustee for cause or without cause at
any time. Any Trustee may resign at any time by giving the Company 10 days
written notice in advance of such resignation.
14.14 The Company shall pay all expenses of administering the Plan and
Trust, which expenses shall include, but not be limited to, expenses incident to
the functioning of those to whom the Company has delegated certain duties such
as the payment of professional fees and consultants fees, and the costs of
administering the Plan. Notwithstanding the above, if any expenses of
administering the Plan and trust are not paid by Company, they may be paid from
the Trust, at the direction of the Company.
XIV-6
<PAGE>
14.15 The Trustee may be paid such reasonable compensation as shall
from time to time be agreed upon by the Company and the Trustee, except that no
Trustee who is a fulltime paid Employee of Company may be compensated for his
services as Trustee. In addition, the Trustee shall be reimbursed for any
reasonable direct expenses, including reasonable counsel fees (if specifically
authorized in advance in writing by Company), properly and actually incurred by
it in the administration of the Trust and not otherwise reimbursed. All taxes of
any and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust or the income thereof shall be
paid from the Trust.
14.16 The Company shall establish an investment policy to provide for
the benefits provided under this Plan. In accordance with the foregoing, the
Company shall determine whether the Plan has a short term need for liquidity, or
whether liquidity is a long term goal, or whatever other investment policy
should be followed, and communicate this to the Trustees or investment
manager(s), so that the investment policy can be appropriately coordinated with
Plan needs.
14.17 The Named Fiduciary shall be responsible for and have the
authority to control and manage the operation and administration of this Plan
and Trust, although fiduciary and other responsibilities may be allocated to
other parties by the Named Fiduciary by written notification to such parties of
their responsibilities, and written acceptance by such parties of such
responsibilities. Trustee responsibilities may be allocated only among Trustees
or to an investment manager. An investment manager is any fiduciary, other than
the Trustee or Named Fiduciary, who: (a) has the power to manage, acquire or
dispose of any portion of the Fund; (b) is registered as an investment adviser
under the Investment Advisers Act of 1940 or is a bank as defined in that Act or
an insurance company qualified to perform the services described in subsection
(a) hereof; and (c) has acknowledged in writing that he is a fiduciary with
respect to the Plan.
14.18 Whenever the Trust has an investment in a common trust fund
available only to Trusts qualified under Section 401(a) of the Internal Revenue
Code of 1986 as amended, or the corresponding provisions of subsequent law of
similar purpose, all of the provisions of the particular common trust fund
declarations of trust, as amended from time to time, shall be deemed to be
incorporated herein and be a part hereof.
14.19 If at any time there is more than 1 Trustee hereunder, The
Trustees need not call or hold meetings to make any decision or to take any
action, but any decision may be made
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<PAGE>
and any action may be taken by written documents signed by the Trustees then
acting, or, if there are more than 2 Trustees, then by a majority of the
Trustees then acting. However, any one Trustee, acting alone, will have the
authority to sign checks, drafts, notes, insurance applications or any other
documents on behalf of the Trustees and to perform purely ministerial acts. If
at any time there is more than 1 Trustee hereunder, and if any difference of
opinion at any time exists between or among the Trustees in respect of doing or
omitting to do any act in the execution of the Trust, the opinion of the
majority of the Trustees will prevail.
14.20 A Trustee may be a Participant, but if any matter pertaining to
his own particular Participation comes up for the action of the Trustee, such
person will be disqualified to act upon the particular matter (unless he is the
sole Trustee) and such matter will be resolved by the other Trustee(s).
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<PAGE>
ARTICLE FIFTEEN
INSURER
15.1 No Insurer issuing any Contract hereunder shall be deemed a party
to this Plan and Trust or to be responsible for its validity. The obligations
and responsibilities of an Insurer shall be measured and determined solely by
the terms of its Contract and it shall not be required to do any act not
provided for, or contrary to the provisions of its Contract.
15.2 An Insurer shall not be required to look into the terms of the
Plan and Trust or question any action of the Trustee nor shall it be responsible
to see that any action of the Trustee is authorized.
15.3 An Insurer may conclusively assume that the Trustee has full
authority, and is acting within that authority, in any transaction concerning
the Contracts, and shall be fully discharged from any and all liabilities for
any action taken in accordance with the direction of the Trustee. In accepting
application for Contracts, an Insurer has no responsibility for determining
whether the Employee is eligible or whether the proper Contract is being applied
for. In all transactions with the Trustee, an Insurer shall deal with it as
though it were the sole and absolute owner of the Contracts. one Trustee's
signature is sufficient in all matters regarding insurance transactions.
15.4 An Insurer shall be fully protected from any liability for any
action taken prior to receiving notice of any amendment or termination of this
Agreement and Trust, or for dealing with any prior Trustee prior to receiving
notice of appointment of a successor Trustee.
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<PAGE>
ARTICLE SIXTEEN
NO REVERSION TO COMPANY
16.1 No part of the principal or income or other assets of the Trust
shall be used for or diverted to purposes other than for the exclusive benefit
of the Participants or their Beneficiaries and the Company shall not be entitled
to receive back any part of its contribution to the Trust, except as provided in
the remaining Paragraphs of this Article.
16.2 Company contributions are conditioned on initial qualification of
the Plan under Internal Revenue Code Section 401 and if the Plan does not
qualify such contribution shall be returned to Company within 1 year after the
date of denial of initial qualification of the Plan.
16.3 Company contributions are conditioned on the deductibility of the
contribution under Internal Revenue Code Section 404 and to the extent any
deduction is disallowed, such contribution shall be returned to Company within 1
year after the date of disallowance of the deduction.
16.4 In the case of a Company contribution made by reason of a mistake
of fact, such contribution shall be returned to Company within 1 year after the
payment of the contribution. Mistakes of fact shall include but not be limited
to arithmetical errors in calculating the amounts to be contributed to the Plan
under the contribution and allocation sections of the Plan.
16.5 The Company reserves the right to recover at the termination of
this Agreement and Trust any balance remaining in the Trust due to erroneous
actuarial computations after the satisfaction of all liabilities with respect to
the Participants and their Beneficiaries under this Plan and Trust. A balance
due to erroneous actuarial computations is the surplus arising because actual
liabilities differ from expected liabilities. Any funds held in a suspense
account required to prevent violations of the limitations on annual additions
and benefits established by Internal Revenue Code Section 415 and which are not
required to be allocated at time of termination to satisfy the liabilities of
the Plan shall be considered a balance due to erroneous actuarial computations.
16.6 The amount which shall be returned to Company as provided in
Paragraph 16.3 and 16.4 is the excess of (1) the amount contributed over (2) the
amount that would have been contributed had there not occurred a mistake of fact
or a mistake in determining the amount of the deduction. Earnings
XVI-1
<PAGE>
attributable to the excess contribution shall not be returned to Company, but
losses attributable thereto shall reduce the amount to be so returned.
Furthermore, no excess contribution shall be returned to Company to the extent
that such reversion would cause the balance of the account, derived from Company
contributions, of any Participant to be reduced to less than the balance which
would have been in the account had the mistaken amount not been contributed.
XVI-2
<PAGE>
ARTICLE SEVENTEEN
DIRECT TRANSFERS AND ROLLOVER
17.1 If a Participant shall be entitled to receive benefits under this
Plan pursuant to Article 5, 6 and 7 or 8 above, the Trustee, at the direction of
the Plan Administrator, may transfer the Participant's vested benefits under
this Plan directly to the Trustee of a Plan and Trust qualified pursuant to
Section 401 of the Internal Revenue Code of 1986 or any successor provisions
thereof, of the Participant's current or new employer if the following
conditions are satisfied:
(a) the Trustee of the other plan shall be authorized to accept the
benefits under this Plan; and
(b) the value of the Participant's transferred assets shall be
separately accounted for in the other Trust; and
(c) the Participant's transferred assets shall not be forfeitable or
reduce in any way the obligation of the employer receiving
benefits from this Plan.
The Trustee of this Plan is authorized to accept, at the direction of the Plan
Administrator, assets for the benefit of an Employee upon the conditions as set
forth above from a trustee of another plan and trust maintained by either a
corporate or non-corporate Plan sponsor qualified pursuant to Section 401 of the
Internal Revenue Code of 1986 or any successor provisions thereof.
17.2 With the permission of the Plan Administrator any Employee who is
a member of a class of Employees eligible to participate may make a Rollover
Contribution to the Trustee at any time. The Trustee shall credit the fair
market value of any Rollover Contribution to the account of the contributing
Employee as of the date of the Rollover Contribution is made. For purposes of
the Plan's vesting provisions a Rollover Contribution shall be considered to be
an Employee Contribution and shall be 100% vested on the date of contribution.
The term "Rollover Contribution" is defined as the contribution of a Qualifying
Rollover Distribution on or before the 60th day immediately following the day
the contributing Employee receives the Qualifying Rollover Distribution.
The term "Qualifying Rollover Distribution" is defined as:
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<PAGE>
(a) Any portion of the property received from a qualified plan and
trust, provided that the balance to the credit of an Employee
reduced by any Employee contributions has been paid to him in
one or more distributions
(1) within one taxable year of the Employee on account of the
termination of a qualified plan or, in the case of a
profit-sharing or stock bonus plan, a complete
discontinuance of contributions under such plan; or
(2) which constitute a lump sum distribution within the
meaning of Section 402 (e) (4) (A) [determined without
reference to Section 402 (e) (4) (B) and (H) ] of the
Internal Revenue Code of 1986.
In the case of a distribution of property other than money from
a qualified plan and trust, except for the proceeds from the
sale of such property (including appreciation from date of
distribution) other property (including money) may not be
substituted in making a Rollover Contribution; or
(b) The entire amount (including money and any other property)
in an Individual Retirement Account, Individual Retirement
Annuity, or Individual Retirement Bond (as defined in
Sections 408 and 409 of the Internal Revenue Code of 1986)
maintained for the benefit of the Employee making the
Rollover Contribution, which amount has been distributed
from such Individual Retirement Account, Individual
Retirement Annuity or Individual Retirement Bond. Such
amount will constitute a Qualifying Rollover Distribution
only if the amount in such Individual Retirement Account,
Individual Retirement Annuity, or Individual Retirement
Bond is solely attributable to a Rollover Contribution
made by the Employee from his interest as a Participant in
a trust described in Section 401(a) of the Internal
Revenue Code of 1986 or an annuity plan described in
Section 403(a) of the Internal Revenue Code of 1986 plus
the earnings thereon; but
(c) In no case does a Qualifying Rollover Distribution include any
amount which is attributable to a distribution from a trust or
annuity plan if the Employee who received the distribution was
an Employee within the meaning of Section 401(c) (1) of the
Internal Revenue Code of 1986 at the time contributions to such
trust or annuity plan were made on his behalf.
17.3 No assets transferred to this Plan in accordance with the
provisions of this Article shall be considered Employee
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<PAGE>
contributions for purposes of Subparagraph 2.1(d) and Paragraph 4.2.
17.4 Distribution of said assets shall follow the general provisions of
the Plan for distribution of the Participant's account derived from employer
contributions.
17.5 The specific assets transferred to the Plan shall be general
assets of the trust, subject to the general investment powers of the Trustees
(or the Participants, if such powers have been granted them).
17.6 For purposes of valuing gains and losses in the account(s)
maintained for transferred assets, the provisions of Paragraph 4.5 shall apply.
Premiums on any insurance policies transferred to the Plan may be paid from the
account established for employer contributions, subject to the limits of
Paragraph 11.1. In the event of said premium payments, an equitable share of
increases in Cash Value from the date of transfer shall be allocated to the
account established for employer contributions. Said equitable share shall be
equal to the difference between the actual Cash Value of the policy and the Cash
Value the policy would have had if it had been placed in reduced paid-up status.
XVII-3
<PAGE>
ARTICLE EIGHTEEN
DETERMINATION OF TOP-HEAVY STATUS
18.1 In determining whether or not this Plan is Top-Heavy or Super
Top-Heavy for any Plan Year, the following calculations shall be made:
(a) In the case of a defined benefit plan, a Participant's
present value of accrued benefit shall be determined as of
the most recent valuation date used for computing plan
costs which is within a 12 month period ending on the
Determination Date, as if the individual terminated
service as of such valuation date. In the first year of a
Plan, however, the accrued benefit shall be determined as
if the individual terminated service as of the
Determination Date. The assumptions used for the
calculation shall be the interest and post-retirement
mortality assumptions used in determining Actuarial
Equivalence. The benefit valued is that payable at Normal
Retirement Date (or attained age, if later). Employee
contribution accounts shall be included in determining the
value of benefits.
(b) In the case of a defined contribution plan, a Participant's
account balance (including accounts for Employee contributions)
as of the Determination Date is the sum of:
(1) his account balance as of the most recent valuation
occurring within a 12 month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date.
In the case of a plan not subject to the minimum funding
requirements of Internal Revenue Code Section 412 such
adjustment shall be the amount of any contributions
actually made after the valuation date but before the
Determination Date, except for the first Plan year when
such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year. In the
case of a plan that is subject to the minimum funding
requirements, the account balance shall also be adjusted
to include contributions allocated as of a date not later
than
XVIII-1
<PAGE>
the Determination Date, even though those amounts are
not yet required to be contributed.
Also, the adjustment shall reflect the amount of any
contribution actually made (or due to be made) after the
valuation date but before the expiration of the extended
payment period in Internal Revenue Code Section 412 (c) 10);
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the 4 preceding
Plan Years. However, in the case of distributions made after
the valuation date and prior to the Determination Date, such
distributions are not included as distributions for
Top-Heavy purposes to the extent that such distributions are
already included in the Participant's present value of
accrued benefit or account balance as of the valuation date;
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
deductible employee contributions shall not be considered to
be a part of the Participant's account balance;
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides for
rollovers or plan-to-plan transfers, it shall always
consider such rollover or plan-to-plan transfer made to
another plan as a distribution for the purposes of this
Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such
rollovers or plan-to-plan transfers accepted after December
31, 1983 as part of the Participant's account balance.
However, rollovers or plan-to-plan transfers accepted prior
to January 1, 1984 shall be considered as part of the
Participant's account balance; with respect to related
rollovers and plan-to-plan transfers (ones either not
initiated by the Employee or made to a plan maintained by
the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is
the plan accepting such rollover or plan-to-plan transfer,
it shall consider such rollover or plan-to-plan transfer as
part of the Participant's present value of accrued benefits
or account balance,
XVIII-2
<PAGE>
irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
In determining whether or not rollovers or plan-to-plan
transfers are made to the same or another Employer, all
Employers aggregated under Internal Revenue Code Sections
414(b), (c) or (m) are treated as the same Employer.
In calculating the accrued benefits or account balances of
Participants there shall not be considered any benefit or
account balances of any Participant who is not a Key-Employee
but who in any prior year was a Key-Employee.
(c) In the case of both a defined benefit plan and a defined
contribution plan, a Participant's accrued benefit or account
balance shall be increased by:
(1) any plan distributions made within the Plan Year that
includes the Determination Date, or within the four
preceding Plan Years. The preceding sentence shall also
apply to distributions under a terminated plan which, if it
had not been terminated, would have been required to be
included in an aggregation group. However, in the case of
distributions made after the valuation date and prior to
the Determination Date, such distributions are not included
as distributions for Top-Heavy purposes, to the extent that
such distributions are already included in the
Participant's present value of accrued benefit or account
balance as of the valuation date;
(2) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
deductible employee contributions shall not be considered
to be a part of the Participant's account balance;
(3) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee
and made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides for
rollovers or plan-to-plan transfers, it shall always
consider such rollover or plan-to-plan transfer made to
another plan as a distribution for the purposes of this
Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such
rollover or plan-to-plan transfer accepted after December
31, 1983 as part of the Participant's account balance.
However, any rollover or plan-to-plan transfer accepted
prior to January 1, 1984 shall
XVIII-3
<PAGE>
be considered as part of the Participant's account
balance;
(4) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or
made to a plan maintained by the same employer), if this
Plan provides the rollover or plan-to-plan transfer, it
shall not be counted as a distribution for purposes of
this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's present value of accrued benefits or account
balance, irrespective of the date on which such rollover
or plan-to-plan transfer is accepted.
In determining whether or not rollovers or plan-to-plan
transfers are made to the same or another Employer, all
Employers aggregated under Internal Revenue Code Sections 414
(b), (c) or (m) are treated as the same Employer.
(d) In calculating the accrued benefits or account balances of
Participants, there shall not be considered any benefit or
account balances of any Participant who is not a Key-Employee
but who in any prior year was a Key-Employee.
(e) For Plan Years commencing after December 31, 1984, in
calculating the accrued benefits or account balances of
Participants, there shall not be considered any benefit or
account balance of any individual who has not performed any
service for the Company (other than benefits under the Plan) at
any time during the five year period ending on the
Determination Date.
18.2 If Company maintains more than one plan, the plans shall
constitute an Aggregation Group provided the following conditions are satisfied:
(a) Each plan of Company in which a Key Employee is a Participant,
including any terminated plan and each other plan of Company
which enables any plan in which a Key-Employee participates to
meet the requirements of Internal Revenue Code Sections 401 (a)
(4) or 410, will be required to be aggregated. Such group shall
be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a
XVIII-4
<PAGE>
Top-Heavy Plan if the Aggregation Group is not a Top-
Heavy Group.
(b) Company may by execution of a written resolution provide
for the creation of a Permissive Aggregation Group to
consist of the Required Aggregation Group and any other
plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as
a whole, would continue to satisfy the provisions of
Internal Revenue Code Sections 401(a) (4) or 410. If the
Permissive Aggregation Group is not Top-Heavy no plans in
the Group will be considered Top-Heavy.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top-Heavy Plan if the Permissive Aggregation
Group is a Top-Heavy Group.
(c) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated
in order to determine whether such plans are Top-Heavy Plans.
(d) A Top-Heavy Group is an Aggregation Group in which, as of the
Determination Date, the sum of the present value of accrued
benefits of Key Employees under all defined benefit plans
included in the group, and the account balances of
Key-Employees under all defined contribution plans included in
the group, exceed 60 percent of a similar sum determined for
all Participants.
18.3 In determining whether or not an Employee is a Key-Employee, the
following shall apply:
(a) An officer shall be an administrative executive in regular
and continued service. If the number of Employees of all
the employers aggregated under Internal Revenue Code
Sections 414(b), (c) or (m) is less than 30 employees for
a particular year, no more than 3 individuals shall be
treated as Key-Employees for that year by reason of being
officers. If the number of Employees of all organizations
aggregated under Internal Revenue Code Sections 414(b), (c) or
(m) is greater than 30 but less than 500 for a particular
year, no more than 10 percent of the number of Employees will
be treated as Key-Employees for that year by reason of being
officers. If the number of Employees of employers aggregated
under Internal Revenue Code Sections 414(b), (c) and (m)
exceed 500 for a particular year, no more than 50 Employees
are considered as Key Employees for that year by reason of
being officers. This limited number of officers is comprised
of the individual
XVIII-5
<PAGE>
officers, selected from the group of all individuals who were
officers in the current Plan Year or any one of the four
preceding Plan Years, who had the largest annual compensation
in that five-year period.
(b) An individual who is a "one percent owner" shall be considered
as having compensation of more than $150,000 based on the
definition of compensation contained in Article 4 herein used
for purposes of computing limits on maximum contributions or
benefits, but contributions more on behalf of a Self Employed
Individual shall be excluded from the definition of
compensation.
18.4 In any Top-Heavy Plan Year, a Participant shall have a
nonforfeitable right to a percentage of his accrued benefit derived from Company
contributions determined as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
Notwithstanding the above, the vesting schedule contained in this Paragraph
shall not apply in any Top-Heavy Plan Year if the vesting schedule contained
elsewhere herein provides for equal or more rapid vesting at every year shown on
the schedule, nor shall it apply if the Plan otherwise provides for 100 percent
vesting after 3 or fewer Years of Service.
18.5 The vesting schedule applicable to any Top-Heavy Plan Year shall
not apply to any Employee who does not have an hour of service after the Plan
becomes Top-Heavy. His vested interest shall be determined under the vesting
provision of the Plan as in effect on the date of his last hour of service.
18.6 In any Top-Heavy Plan Year an eligible Participant who is a
Non-Key Employee shall receive no less than either a minimum contribution to a
defined contribution plan equal to the lesser of 3% of compensation or the
largest percentage of compensation provided on behalf of any Key-Employee or a
minimum accrual in a defined benefit plan equal in value to an accrued benefit
at any point in time of 2% of his Average Annual Compensation for the five
consecutive years in which his compensation was highest times his Years of
Service for benefit accrual beginning on or after January 1, 1984 and during
which the Plan was Top-Heavy up to a maximum of 20%, payable at Normal
Retirement Date in the form of a straight life annuity. If a
XVIII-6
<PAGE>
Non-Key Employee is a Participant in both a defined benefit plan and a defined
contribution plan which are Top-Heavy the Participant shall receive no less than
either a defined contribution minimum equal to 5% of compensation or the defined
benefit minimum accrual described above (but not including a 2% accrual and
reducing the 20% maximum by 2% for each Top-Heavy Plan Year during the first 10
Top-Heavy Plan Years in which the minimum 5% contribution is made on his behalf
to a defined contribution plan). Compensation for purposes of the defined
benefit minimum benefit shall not include compensation after the last Plan Year
in which the Plan is Top-Heavy and shall be compensation as defined in Article 4
for purposes or computing limits on maximum contributions or benefits.
For any Top Heavy Plan Year, the minimum allocations set forth above shall be
allocated to the Participant's Account of all Non-Key Employees who are
Participants and who are employed by the Employer on the last day of the Plan
Year, including Non-Key Employees who have (1) failed to complete a Year of
Service; (2) declined to make mandatory contributions (if required) to the Plan;
and (3) been excluded from participation because of their level of Compensation.
18.7 In the case of a Participant in a defined benefit plan, in no case
will the operation of the Top-Heavy rules, including rules applicable to Super
Top-Heavy Plans, pertaining for example and not by way of limitation to the
definitions of the Defined Benefit Plan Fraction or Defined Contribution Plan
Fraction, effect a reduction in the Participant's accrued benefit. However, the
mere application of the rules for establishing which Plan is primary in assuring
compliance with Section 415 of the Code in the case of a Participant in both a
defined benefit plan and a defined contribution plan shall not be considered as
effecting a reduction in an accrued benefit.
XVIII-7
<PAGE>
ARTICLE NINETEEN
MISCELLANEOUS PROVISIONS
19.1 Purpose: This Agreement and Trust which is created is purely
voluntary on the part of the Company, and the Company may change or discontinue
payments hereunder at any time or from time to time as the Company may decide;
provided, however, that such discontinuance of payment or termination is
approved as required by federal law. Except as otherwise provided by federal
law, neither the establishment of the Agreement and Trust nor any modification
hereof, nor the creation of any fund or account, nor the payment of any benefit,
shall be construed as giving any person whomsoever any legal or equitable right
against the Company or the Trustee, but any and all claims or rights arising
under this Agreement and Trust shall be expressly limited in enforcement to the
assets of the Trust fund, and in those instances where a Contract has been
issued, the right to such benefits shall also be limited by the terms and
conditions of the Contract. Nothing contained in this Agreement and Trust shall
be construed or interpreted as giving any Employee the right to be retained in
the service of the Company or shall affect or impair the right of the Company to
control its Employees and to terminate the service of any Employee at any time.
19.2 Headings: Headings or titles of Articles are for general
information only and this Agreement and Trust shall not be construed by
reference to such titles.
19.3 Severability: If any provision of this Agreement and Trust is held
invalid or unenforceable, such invalidity or unenforceability shall not effect
any other provision, and this Agreement and Trust shall be construed and
enforced as if such provision had not been included.
19.4 The terms of this Trust shall be construed in accordance with the
laws of the Trust Situs, except to the extent preempted by federal law.
19.5 Binding Effect: This Agreement and Trust shall be binding upon and
inure to the benefit of the Company and the Trustee, their successors and the
Participants and their Beneficiaries in accordance with the terms of this
Agreement and Trust.
19.6 Construction: Whenever used in this Agreement and Trust unless the
context indicates otherwise, singular shall include plural and the plural shall
include singular; and the male gender shall include the female gender.
XIX-1
<PAGE>
19.7 Termination: Upon the return of all contributions to the Company
as provided in Paragraph 16.2 hereof, the Trust shall terminate, and the Trustee
shall be discharged from all obligations under the Trust.
19.8 Indemnification: The Company shall indemnify those to whom the
Company has delegated fiduciary responsibilities against any and all claims,
losses, damages, expenses and liabilities arising from their responsibilities in
connection with the Plan, unless the same is determined to be due to gross
negligence or willful misconduct.
19.9 Interpretation: Except as otherwise provided by federal law, in
all matters concerning the interpretation of this Agreement and Trust and the
operation of the Plan and Trust, the decisions made by the Plan Administrator
shall be final and conclusive upon all the parties. All such decisions shall
apply uniformly to all Participants in like situations.
19.10 Rules: The Plan Administrator may from time to time formulate and
issue such rules and regulations, not inconsistent with the declared purposes
and provisions of the Plan, as the Plan Administrator may deem necessary to
administer and carry out the Plan and Trust. No such rule or regulation will be
ineffective by reason of the fact that such rule or regulation may amend the
purely administrative provisions of the Plan or conform to any change in the
Plan as may be made by amendment.
19.11 Conformity with federal Law: This Agreement and Trust shall at
all times be construed and administered so as to conform to the requirements for
qualification under the Internal Revenue Code of 1986, as amended, as well as to
conform to the requirements of all governing federal law and the Agreement and
Trust shall be deemed amended automatically to conform to such legal
requirements, to the extent necessary.
19.12 Controlled Group: For purposes of interpreting and administering
Plan provisions required for tax qualification under Internal Revenue Code
Section 401, including Plan provisions relating to participation, vesting,
benefit accrual, and limitations on benefits and contributions, all employees
of all entities which are members of a Controlled Group of entities, as defined
in Internal Revenue Code Section 414(b) and (c), and/or which are members of an
Affiliated Service Group as defined in Internal Revenue Code Section 414 (m),
shall be treated as if employed by a single employer.
For purposes of determining years of Service for eligibility and
vesting purposes for any Employee or former Employee of Company,
service with any entity which is a member of a Controlled Group
XIX-2
<PAGE>
or an Affiliated Service Group in which Company is included shall be
considered service with Company. In determining service for purposes
of benefit accrual for any Employee or former Employee of Company,
service during any Plan Year in which an Employee was a Participant in
a Plan maintained by a member of a Controlled Group or an Affiliated
Service Group in which Company is included shall be taken into
account.
19.13 Successor Company: Any successor organization of Company may
adopt this Plan and Trust, with the written consent of Company, if then in
existence. Such successor shall thereby succeed to all the rights, powers, and
duties of Company hereunder.
IN WITNESS WHEREOF, Company and Trustee have caused this Agreement to
be executed the day and date previously written.
ATTEST: PENNSYLVANIA SAVINGS BANK
By:
- --------------------------- -----------------------------------
Roseanne Pauciello, Vincent J. Fumo,
Secretary President
- --------------------------- -----------------------------------
Gary Polimeno, Vincent J. Fumo,
Treasurer Trustee
-----------------------------------
Anthony Di Sandro,
Trustee
XIX-3
<PAGE>
The undersigned President of the above named Corporation does hereby
certify that the foregoing are true and correct copies of the Cash or Deferred
Profit Sharing Plan and Trust instruments, adopted by said Corporation and
approved by its Board of Directors at a special meeting of the Directors.
He further certifies that the Cash or Deferred Profit Sharing Plan and
Trust instruments were duly executed by the Corporation and the Trustees named
in said instruments.
(SEAL)
----------------------------
Vincent J. Fumo,
President
XIX-4
<PAGE>
FIRST AMENDMENT TO THE AMENDED
CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
OF PENNSYLVANIA, A SAVINGS BANK
Amendment made this 17th day of November, 1994 to the above Plan and
Trust.
WHEREAS, the Employer maintains the retirement plan and trust qualified
for Federal income tax purposes; and
WHEREAS, certain changes in the plan and trust are deemed advisable and
desirable.
NOW THEREFORE, the plan and trust is amended as follows to be effective
January 1, 1994.
1. 2.1(n) compensation is amended by adding the following paragraphs at
the end thereof:
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to
the contrary, for plan years beginning on or after January 1,
1994, the annual compensation of each employee taken into
account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the
cost of living in accordance with section 401(a)(17)(B) of the
Internal Revenue Code. The cost-of-living adjustment in
<PAGE>
effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section
401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision. If
compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current plan year, the compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning
before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit
is $150,000.
-2-
<PAGE>
2. There is added to the plan a new Article XX. Article XX
provides the following:
This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to
the contrary that would otherwise limit a distributee's
election, under this Article, a distributee may elect, at the
time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the
distributee in a direct rollover.
a. Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distributions does not include: any
distribution that is one of a series of substantially equal
periodic payments not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such
-3-
<PAGE>
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
b. Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in section
408(b) of the Code, an individual retirement annuity described
in Section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of the
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
c. Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former
employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in
section 414(p) of the code, are distributees with
-4-
<PAGE>
regard to the interest of the spouse or former spouse.
d. Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by the
distributee.
3. Articles 12.1 and 12.2 are deleted in their entirety and restated as follows:
12.1 The Company, through its duly elected Board of
Directors, shall have the right at any time to
discontinue its contributions hereunder, and to
terminate or partially terminate this Plan and Trust. In
the event that Company shall be legally dissolved, or
declared bankrupt, shall make a general assignment for
the benefit of creditors, or merge into or with another
company which shall not assume the obligations of this
Agreement, this Plan shall automatically terminate.
In the event the Plan and Trust is automatically
terminated as provided above, or in the event that
subsequent to the voluntary termination of the plan by
Company, any of the events causing automatic termination
occur prior to the final and
-5-
<PAGE>
complete distribution of assets from the Trust, Trustee
shall automatically be vested with all rights, powers
and duties otherwise reserved in this Agreement and
Trust to Company, Plan Administrator and Named
Fiduciary, including but not limited to the right to
amend this Agreement and Trust, to liquidate the Trust,
and to continue the Plan and Trust in force.
12.2 The Company, through its duly elected Board of
Directors, reserves the right to amend this Plan and
Trust in writing at any time without the consent of any
Participant or Beneficiary; provided, however, that no
amendment to this Plan or Trust shall deprive any
Participant or Beneficiary (including any Participant or
Beneficiary who is already receiving benefits) of any
vested interest herein, except as may be allowed by
Federal Law, nor shall such amendment increase the
duties or obligations of the Trustee herein except with
his consent. Further provided, that to the extent
required by Federal Law, subject to regulations issued
by the Secretary of the Treasury, no amendment to
-6-
<PAGE>
this Plan and Trust shall be permitted which has the
effect of: (a) eliminating or reducing an early
retirement benefit or a retirement-type subsidy for a
Participant who satisfied (either before or after the
amendment) the pre-amendment conditions for the benefit
or subsidy, or (b) eliminating an optional form of
benefit, in both cases with respect to benefits
attributable to service before such amendment.
IN WITNESS WHEREOF, Pennsylvania Savings Bank has caused this Amendment
to be executed by its duly authorized officers the date above written.
ATTEST: SAVING BANK
/s/ Rosanne Pauciello BY: /s/ Anthony Di Sandro
- ------------------------------ ----------------------------------
Rosanne Pauciello Anthony Di Sandro
Secretary President
-7-
<PAGE>
AMENDMENT
TO
CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
OF
PENNSYLVANIA SAVINGS BANK
WHEREAS, Article 12 permits the Employer to amend the Plan,
WHEREAS, the Employer has determined that it is advisable to amend the
Plan to permit directed investment accounts,
Now, THEREFORE, the Plan is amended by the addition of the following
which shall be known as Article 20.
ARTICLE 20
DIRECTED INVESTMENT ACCOUNT
(a) The Administrator shall determine that all Participants be
permitted to direct a Trustee as to the investment of all or a
portion of the vested interest in any one or more of their individual
account balances. If such authorization is given, Participants may,
subject to a procedure established by the Administrator and applied
in a uniform, non-discriminatory manner, direct the Trustee in
writing to invest the vested portion of their account in specific
assets, specific funds or other investments permitted under the Plan
and the directed investment procedure. That portion of the vested
account of any Participant so directing will thereupon be considered
a directed investment account, which shall not share the trust fund
earnings.
<PAGE>
(b) A separate directed investment account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and his directed
investment account shall be charged and credited as the case may be
to each account. The directed investment account shall not share in
trust fund earnings, but it shall be charged or credited as
appropriate with the net earnings, gains, losses and expenses as well
as any appreciation or depreciation in market value during each Plan
Year attributable to such account.
(c) The Trustee shall not be responsible for, nor liable
for, any loss or expense which may arise from or result from
compliance with any directions from the Participant. The Trustee
shall not be responsible for, nor liable for, any loss or expense
which may result from the Trustee's refusal or failure to comply with
any directions from the Participant. The Trustee may refuse to comply
with any direction from the Participant in the event the Trustee, in
its sole and absolute discretion, deems such direction improper by
-2-
<PAGE>
virtue of applicable law. Any costs and expenses related to compliance
with the Participant's directions shall be borne by the Participant's
account.
IN WITNESS WHEREOF, the Employer has executed this Amendment on the
date indicated below.
PENNSYLVANIA SAVINGS BANK
BY: /s/ Anthony Di Sandro
----------------------------------
President
ATTEST:
/s/ Rosanne Pauciello
----------------------------------
Secretary
DATED:
------------------------
-3-
<PAGE>
Stockton Bates
&
Company, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the inclusion of our Independent Auditors' Report
dated February 6, 1998, pertaining to the financial statements of Pennsylvania
Savings Bank at and for the years ended December 31, 1997 and 1996 and September
30, 1995 for use in Amendment No. 1 to the Registration Statement on Form S-1 of
PSB Bancorp, Inc. under the Securities Act of 1933.
/s/ Stockton Bates & Company, P.C.
-----------------------------------
Certified Public Accountants
Philadelphia, Pennsylvania
March 18, 1998
42 South 15th Street, Suite 600; Philadelphia, Pennsylvania 19102;
215.241.7500 Fax 215.567.3813
Offices in Haddonfield, New Jersey and Lancaster, Pennsylvania.
Member of American Group of CPA Firms with Worldwide Affiliations
<PAGE>
RP FINANCIAL, LC.
Financial Services Industry Consultants
March 19, 1998
Board of Directors
PSB Mutual Holding Company
Pennsylvania Savings bank
1835 Market Street
Philadelphia, Pennsylvania 19103
Gentlemen:
We hereby consent to the use of our firm's name in the Application for
Conversion of PSB Mutual Holding Company, the mutual holding company for
Pennsylvania Savings Bank, Philadelphia, Pennsylvania and any amendments
thereto, in the Form 18(c) and any amendments thereto, in the Form S-1
Registration Statement and any amendments thereto and in the Form FRY-1 for PSB
Bancorp, Inc. We also hereby consent to the inclusion of, summary of and
references to our Appraisal Report, including any updated appraisal reports, in
such filings including the Prospectus of PSB Bancorp, Inc.
Sincerely,
RP FINANCIAL, L.C.
/s/ James J. Oren
---------------------------
James J. Oren
Senior Vice President
Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210
Arlington, VA 22209
Telephone: (703) 528-1700
Fax No: (703) 528-1788
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 27,888
<SECURITIES> 27,623
<RECEIVABLES> 68,252
<ALLOWANCES> 238
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,186
<DEPRECIATION> 1,857
<TOTAL-ASSETS> 129,338
<CURRENT-LIABILITIES> 114,340
<BONDS> 0
0
0
<COMMON> 1,195
<OTHER-SE> 13,803
<TOTAL-LIABILITY-AND-EQUITY> 129,338
<SALES> 8,740
<TOTAL-REVENUES> 8,740
<CGS> 4,534
<TOTAL-COSTS> 4,534
<OTHER-EXPENSES> 4,164
<LOSS-PROVISION> 60
<INTEREST-EXPENSE> 4,534
<INCOME-PRETAX> 1,053
<INCOME-TAX> 345
<INCOME-CONTINUING> 708
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 708
<EPS-PRIMARY> 0.61
<EPS-DILUTED> 0.60
</TABLE>
<PAGE>
___________________________________________
CONVERSION APPRAISAL REPORT
PSB BANCORP, INC.
PROPOSED HOLDING COMPANY FOR
PENNSYLVANIA SAVINGS BANK
Philadelphia, Pennsylvania
Stock Prices As Of:
September 19, 1997
___________________________________________
Prepared By:
RP Financial, LC.
1700 North Moore Street
Suite 2210
Arlington, Virginia 22209
<PAGE>
RP FINANCIAL, LC.
- --------------------------------------------
Financial Services Industry Consultants
September 19, 1997
Boards of Trustees
PSB Mutual Holding Company
Pennsylvania Savings Bank
1835 Market Street
Philadelphia, Pennsylvania 19103
To the Boards:
At your request, we have completed and hereby provide an independent
appraisal of the estimated pro forma market value of the common stock which is
to be issued by PSB Bancorp, Inc., Philadelphia, Pennsylvania (the "Holding
Company"), in connection with the mutual-to-stock conversion of PSB Mutual
Holding Company (the "MHC"). The MHC currently has a majority ownership interest
in, and its principal asset consists of, the common stock of Pennsylvania
Savings Bank, Philadelphia, Pennsylvania (the "Savings Bank"). It is our
understanding that the Holding Company will offer its stock in a Subscription
and Community offering to the Savings Bank's Eligible Account Holders, to the
Savings Bank's employee stock ownership plan ("ESOP"), to Supplemental Eligible
Account Holders of the Savings Bank, to Public Shareholders, and to the Local
Community (the "Conversion Offerings").
This Appraisal is furnished pursuant to the conversion regulations
promulgated by the Office of Thrift Supervision ("OTS") and adopted by the
Pennsylvania Department of Banking ("PDOB") and the Federal Deposit Insurance
Corporation ("FDIC"). This Appraisal has been prepared in accordance with the
written valuation guidelines promulgated by the OTS and adopted by the PDOB and
FDIC, most recently updated as of October 21, 1994. Specifically, this Appraisal
has been prepared in accordance with the "Guidelines for Appraisal Reports for
the Valuation of Savings and Loan Associations Converting from Mutual to Stock
Form of Organization" of the OTS, as successor to the Federal Home Loan Bank
Board ("FHLBB"), dated as of October 21, 1994, and applicable regulatory
interpretations thereof.
Description of Reorganization
- ------------------------------
On July 17, 1997, the Boards of Trustees of the Savings Bank and the
MHC adopted the Plan of Conversion (the "Plan") pursuant to which the MHC will
convert from a Pennsylvania chartered mutual holding company to a Pennsylvania
chartered stock corporation. In the reorganization process, to become effective
concurrent with the completion of the stock sale, which is targeted for the
fourth calendar quarter of 1997: (1) the MHC will convert to an interim federal
stock savings bank ("Interim A") and simultaneously merge with and into the
Savings Bank, pursuant to which the MHC will cease to exist and the outstanding
shares of Savings Bank Common Stock held by the MHC (615,250 shares or 51.5
percent of the outstanding Savings Bank Common Stock as of the date hereof) will
be cancelled, and (ii) an interim federal stock savings bank ("Interim B") will
be formed as a wholly-owned subsidiary of the Holding Company and will merge
with and into the Savings Bank, resulting in the Savings Bank becoming a
wholly-owned subsidiary of the Holding Company and the outstanding Public
Savings Bank Shares (579,390 shares or 48.5 percent of the outstanding Savings
Bank Common Stock as of the date hereof) will be converted into the Exchange
Shares pursuant to the Exchange Ratio. The Exchange Ratio will result in the
holders of the outstanding Public Savings Bank Shares owning,
in the aggregate, approximately the same percentage of the Common Stock to be
outstanding upon the completion of the Conversion and Reorganization (i.e., the
Conversion Shares and the Exchange Shares) as the percentage of Savings Bank
Common Stock owned by them in the aggregate immediately before consummation
________________________________________________________________________________
Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210 Telephone: (703) 528-1700
Arlington, VA 22209 Fax No.: (703) 528-1788
<PAGE>
RP Financial, LC.
Boards of Trustees
September 19, 1997
Page 2
of the Conversion and Reorganization, before giving effect to any (i) payment of
cash in lieu of issuing fractional Exchange Shares, (ii) Conversion Shares that
may be purchased by Public Shareholders or the ESOP in the Conversion Offerings,
and (iii) any adjustment to the ownership interest represented by the Public
Savings Bank Shares pursuant to FDIC policy to reflect the contribution of the
assets of the MHC owned solely by depositors.
RP Financial, LC.
- -----------------
RP Financial, LC. ("RP Financial") is a financial consulting firm that
specializes in financial valuations and analyses of business enterprises and
securities. The background and experience of RP Financial are detailed in
Exhibit V-1. We believe that, except for the fee we will receive for our
appraisal and assisting the Savings Bank in the preparation of its business
plan, we are independent of the Savings Bank, the MHC, the Holding Company and
other parties engaged by the Savings Bank to assist in the stock issuance
process.
Valuation Methodology
- ---------------------
In preparing our appraisal, we have reviewed the Holding Company's
Application for Approval of Conversion, including the Proxy Statement, as filed
with the PDOB and the FDIC and the Holding Company's Form SB-2 registration
statement as filed with the Securities and Exchange Commission ("SEC"). We have
conducted an analysis of the Savings Bank and the MHC (hereinafter, collectively
referred to as the "Savings Bank"), that has included due diligence related
discussions with the Savings Bank's management. All conclusions and assumptions
set forth in the appraisal were reached independently from such discussions. In
addition, where appropriate, we have considered information based on other
available published sources that we believe are reliable. While we believe the
information and data gathered from all these sources are reliable, we cannot
guarantee the accuracy and completeness of such information.
We have investigated the competitive environment within which the
Savings Bank operates, and have assessed the Savings Bank's relative strengths
and weaknesses. We have kept abreast of the changing regulatory and legislative
environment and analyzed the potential impact on the Savings Bank and the
industry as a whole. We have analyzed the potential effects of the stock
offering on the Savings Bank's operating characteristics and financial
performance as they relate to the pro forma market value of the Savings Bank. We
have reviewed the economy in the Savings Bank's primary market area and have
compared the Savings Bank's financial performance and condition with selected
publicly-traded thrift institutions in the Commonwealth of Pennsylvania, the
Mid-Atlantic U.S. and the U.S. as a whole. We have reviewed conditions in the
securities markets in general and for thrift stocks in particular, including the
market for existing thrift issues, the market for initial public offerings and
second step conversion offerings by thrifts and the market for the Public
Savings Bank Shares.
Our appraisal is based on the Savings Bank's representation that the
information contained in the regulatory applications and additional information
furnished to us by the Savings Bank and its independent auditors are truthful,
accurate and complete. We did not independently verify the financial statements
and other information provided by the Savings Bank and its independent auditors,
nor did we independently value the individual assets or liabilities of the
Savings Bank. The valuation considers the Savings Bank only as a going concern
and should not be considered as an indication of the liquidation value of the
Savings Bank.
Our appraised value is predicated on a continuation of the current
operating environment for the Savings Bank and for all thrifts. 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) may occur from time to time, often with great unpredictability and
may materially impact the value of thrift stocks as a
<PAGE>
RP Financial, LC.
Boards of Trustees
September 19, 1997
Page 3
whole or the Savings Bank's value alone. To the extent that such factors can be
foreseen, they have been factored into our analysis.
Pro forma market value is defined as the price at which the Holding
Company's shares would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and both having
reasonable knowledge of relevant facts.
Valuation Conclusion
- ----------------------
It is our opinion that, as of September 19, 1997, the aggregate pro
forma market value of the Savings Bank and the MHC, inclusive of the sale of the
MHC's ownership interest in the Conversion Offerings, was $21,906,226 at the
midpoint. Based on this valuation and the approximate 52.04 percent ownership
interest being sold in the Conversion Offerings, the midpoint of the Holding
Company's stock offering was $11,400,000, equal to 1,400,000 shares offered at a
per share value of $10.00. Pursuant to conversion guidelines, the 15 percent
offering range includes a minimum of $9,690,000 and a maximum of $13,110,000.
Based on the $10.00 per share offering price, this range equates to an offering
of 969,000 shares at the minimum to 1,311,000 shares at the maximum. The Holding
Company's offering also includes a provision for a super range, which if
exercised, would result in an offering size of $15,076,500, equal to 1,507,650
shares at the $10.00 per share offering price.
Exchange Ratio for Public Shares
- ---------------------------------
Federal regulations provide that in a conversion of a mutual holding
company, the minority stockholders are entitled to exchange their shares of the
Savings Bank Common Stock for common stock of the Holding Company. The Board of
Trustees of the MHC has independently established a formula to determine the
exchange ratio. The formula has been designed to preserve the current aggregate
percentage ownership in the Savings Bank represented by the Public Savings Bank
Shares adjusted, in accordance with FDIC policy, to reflect the contribution of
the assets of the MHC owned solely by depositor. After taking into account these
factors, the Public Savings Bank Shares are to be exchanged for an approximate
47.96 percent ownership interest (compared to the approximate 48.50 percent
ownership interest currently owned by the Public Savings Bank Shares). Pursuant
to the formula, the Exchange Ratio will be determined at the end of the Holding
Company's stock offering based on the total number of shares sold in the
Conversion Offerings. Based upon this formula, and the valuation conclusion and
offering range concluded herein, the Exchange Ratio would be 1.5413 shares,
1.8133 shares, 2.0853 shares and 2.3981 shares of Holding Company stock issued
for each Public Savings Bank Share, at the minimum, midpoint, maximum and super
range of the offering, respectively.
Limiting Factors and Considerations
- ------------------------------------
Our valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing shares of the
common stock. 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 initial offering will thereafter be able to sell
such shares at prices related to the foregoing valuation of the pro forma market
value. The appraisal reflects only a valuation range as of this date for the pro
forma market value of the Savings Bank immediately upon issuance of the stock.
RP Financial's valuation was determined based on the financial
condition, operations and shares outstanding as of June 30, 1997, the date of
the financial data included in the Prospectus. The proposed
<PAGE>
RP Financial, LC.
Boards of Trustees
September 19, 1997
Page 4
Exchange Ratio and the exchange of Public Savings Bank Shares for newly issued
Holding Company shares was determined by the Boards of Trustees of the MHC and
the Savings Bank. RP Financial expresses no opinion on the proposed Exchange
Ratio and the exchange of Public Savings Bank Shares for newly issued Holding
Company shares.
RP Financial is not a seller of securities within the meaning of any
federal and state securities laws and any report prepared by RP Financial shall
not be used as an offer or solicitation with respect to the purchase or sale of
any securities. RP Financial maintains a policy which prohibits the company, its
principals or employees from purchasing stock of its client institutions.
The valuation will be updated should market conditions or changes in
the Savings Bank's operating results warrant. The valuation will also be updated
at the completion of the Conversion Offerings. These updates will consider,
among other things, any developments or changes in the Savings Bank's financial
performance and condition, management policies, current conditions in the equity
markets for thrift shares, both existing issues and new issues, and the market
for the Public Savings Bank Shares. Also, these updates will consider changes in
other external factors which impact value including, but not limited to: various
changes in the legislative and regulatory environment (including changes in the
appraisal guidelines), the stock market and the market for thrift stocks, and
interest rates. Should any such new developments or changes be material, in our
opinion, to the valuation of the shares, appropriate adjustments to the
estimated pro forma market value will be made. The reasons for any such
adjustments will be explained in the update at the date of the release of the
update.
Respectfully submitted,
RP FINANCIAL, LC.
DRAFT
William E. Pommerening
Chief Executive Officer
WEP:dye
<PAGE>
RP Financial, LC.
TABLE OF CONTENTS
PAGE
DESCRIPTION NUMBER
- ----------- ------
CHAPTER ONE OVERVIEW AND FINANCIAL ANALYSIS
- -----------
Plan of Conversion and Holding Company Reorganization 1.1
Strategic Discussion 1.2
Balance Sheet Trends 1.5
Income and Expense Trends 1.8
Interest Rate Risk Management 1.11
Lending Activities and Strategy 1.12
Asset Quality 1.15
Funding Composition and Strategy 1.15
Subsidiary 1.16
Legal Proceedings 1.17
CHAPTER TWO MARKET AREA
- -----------
Introduction 2.1
National Economy 2.2
Market Area Demographics 2.4
Local Economy 2.5
Competition 2.7
CHAPTER THREE PEER GROUP ANALYSIS
- --------------
Selection of Peer Group 3.1
Financial Condition 3.5
Income and Expense Components 3.8
Loan Composition 3.11
Credit Risk 3.13
Interest Rate Risk 3.13
Summary 3.16
<PAGE>
RP Financial, LC.
TABLE OF CONTENTS
(continued)
PAGE
DESCRIPTION NUMBER
- ------------ ------
CHAPTER FOUR VALUATION ANALYSIS
- ------------
Introduction 4.1
Appraisal Guidelines 4.1
Valuation Analysis 4.2
1. Financial Condition 4.2
2. Profitability, Growth and Viability of Earnings 4.4
3. Asset Growth 4.5
4. Primary Market Area 4.5
5. Dividends 4.7
6. Liquidity of the Shares 4.8
7. Marketing of the Issue 4.8
A. The Public Market 4.8
B. The Neww Issue Market 4.8
C. Secondary Step Conversion Offerings 4.13
D. The Acquisition Market 4.13
E. Trading in Pennsylvania Savings' Stock 4.17
8. Management 4.17
9. Effect of Government Regulation and Regulatory Reform 4.18
Summary of Adjustments 4.18
Valuation Approaches 4.18
1. Price-to-Tangible Book ("P/TB") 4.20
2. Price-to-Earnings ("P/E") 4.21
3. Price-to-Assets ("P/A") 4.21
Valuation Conclusion 4.22
Establishment of Exchange Ratio 4.22
<PAGE>
RP Financial, LC.
LIST OF TABLES
TABLE
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
1.1 Historical Balance Sheets 1.6
1.2 Historical Income Statements 1.9
2.1 Major Philadelphia County Employers 2.6
2.2 Market Area Unemployment Trends 2.7
2.3 Deposit Summary 2.8
3.1 Peer Group of Publicly-Traded Thrifts 3.3
3.2 Balance Sheet Composition and Growth Rates 3.6
3.3 Income as a Percent of Average Assets
and Yields, Costs, Spreads 3.9
3.4 Loan Portfolio Composition & Related Info. 3.12
3.5 Credit Risk Measures & Related Information 3.14
3.6 Interest Rate Risk Comparative Analysis 3.15
4.1 Peer Group Market Area Comparative Analysis 4.6
4.2 Recent Conversions: Market Pricing Comparatives 4.12
4.3 Market Pricing Comparatives 4.14
4.4 Completed Second Step Conversions 4.15
4.5 MHC Institutions - Implied Pricing Ratios 4.16
4.6 Public Market Pricing: Valuation Conclusion 4.23
<PAGE>
RP Financial, LC.
Page 1.1
I. OVERVIEW AND FINANCIAL ANALYSIS
Pennsylvania Savings Bank ("Pennsylvania Savings" or the "Savings
Bank") is a Pennsylvania chartered stock savings bank headquartered in Center
City Philadelphia, Pennsylvania. In addition to its main office, Pennsylvania
Savings maintains four full service branches located in south Philadelphia and
one full service branch in the suburbs of adjacent Montgomery County. Exhibit
I-1 presents a map showing the location of the Savings Bank's offices. The
Savings Bank was established in 1888 as a state chartered building and loan
association. The Savings Bank is a member of the Federal Home Loan Bank ("FHLB")
system and deposits are insured up to the regulatory maximums by the Savings
Association Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation
("FDIC"). At June 30, 1997, Pennsylvania Savings had $124.3 million in total
assets, $104.4 million in deposits and stockholders' equity of $14.5 million or
11.7 percent of total assets. For the twelve months ended June 30, 1997, the
Savings Bank recorded positive net income of $22,000, equal to 0.02 percent of
average assets. The Savings Bank's audited financial statements are incorporated
by reference in Exhibit I-2, and key operating ratios are presented in Exhibit
I-3.
On October 20, 1995, the Savings Bank completed a reorganization from a
mutual savings bank to a stock savings bank through the formation of a
Pennsylvania chartered mutual holding company. Pursuant to the reorganization,
Pennsylvania Savings transferred substantially all of its assets and liabilities
to a newly-formed stock bank in exchange for 615,250 shares of stock issued to
PSB Mutual Holding Company (the "MHC"). Simultaneously, the Savings Bank sold
558,000 shares of stock to the public in a subscription and community offering.
As of June 30, 1997, after taking into account the exercise of options, there
were 1,194,640 total shares of the Savings Bank common stock issued and
outstanding, of which 615,250 shares, or 51.50 percent, are owned by the MHC and
579,390 shares, or 48.50 percent, are owned by the non-MHC investors. Since the
mutual holding company reorganization, Pennsylvania Savings has declared and
paid one cash dividend of $0.0375 per share, which was not waived by the MHC.
Plan of Conversion and Holding Company Reorganization
On July 17, 1997, the Boards of Trustees of the Savings Bank and the
MHC adopted the Plan of Conversion (the "Plan") pursuant to which the MHC will
convert from a Pennsylvania chartered mutual holding company to a Pennsylvania
chartered stock corporation. In the reorganization process, to become effective
concurrent with the completion of the stock sale, which is targeted for the
fourth calendar quarter of 1997: (1) the MHC will convert to an interim federal
stock savings bank ("Interim A") and simultaneously merge with and into the
Savings Bank, pursuant to which the MHC will cease to exist and the outstanding
shares of Savings Bank Common Stock held by the MHC (615,250 shares or 51.50
percent of the outstanding Savings Bank
<PAGE>
RP Financial, LC.
Page 1.2
Common Stock as of the date hereof) will be cancelled, and (ii) an interim
federal stock savings bank ("Interim B") will be formed as a wholly-owned
subsidiary of the Holding Company and will merge with and into the Savings Bank,
resulting in the Savings Bank becoming a wholly-owned subsidiary of the Holding
Company and the outstanding Public Savings Bank Shares (579,390 shares or 48.50
percent of the outstanding Savings Bank Common Stock as of the date hereof) will
be converted into the Exchange Shares pursuant to the Exchange Ratio. The
Exchange Ratio will result in the holders of the outstanding Public Savings Bank
Shares owning, in the aggregate, approximately the same percentage of the Common
Stock to be outstanding upon the completion of the Conversion and Reorganization
(i.e., the Conversion Shares and the Exchange Shares) as the percentage of
Savings Bank Common Stock owned by them in the aggregate immediately before
consummation of the Conversion and Reorganization, before giving effect to any
(i) payment of cash in lieu of issuing fractional Exchange Shares, (ii)
Conversion Shares that may be purchased by Public Shareholders or the ESOP in
the Conversion Offerings, and (iii) any adjustment to the ownership interest
represented by the Public Savings Bank Shares pursuant to FDIC policy to reflect
the contribution of the assets of the MHC owned solely by depositors. Other than
shares of the Savings Bank, the only material asset of the MHC is approximately
$244,000 of cash that will be merged with the Savings Bank's assets upon
completion of the reorganization.
Going forward, the Holding Company will own 100 percent of the Savings
Bank's stock, and the Savings Bank will be the Holding Company's sole
subsidiary. Up to 50 percent of the net proceeds received from the sale of
common stock will be used to purchase all of the then to be issued and
outstanding capital stock of the Savings Bank, with the balance of the proceeds
being retained by the Holding Company. At this time, no other activities are
contemplated for the Holding Company other than the ownership of the Savings
Bank, a loan to the employee stock ownership plan ("ESOP"), the payment of
quarterly dividends to shareholders, and investment of the cash retained at the
Holding Company in investment securities and mortgage-backed securities ("MBS")
consistent with the Savings Bank's current investment practices and procedures.
In the future, the Holding Company may repurchase shares, diversify its business
possibly through existing or newly-formed subsidiaries, through acquisitions or
mergers of other insured financial institutions as well as other related
companies. There are currently no arrangements, understandings or agreements
regarding any such acquisitions or mergers.
Strategic Discussion
Pennsylvania Savings' operations have historically been oriented
towards the traditional strategy of originating 1-4 family mortgage loans, with
such investments funded by local deposit funds and retained earnings. Beginning
several years ago, the Savings Bank embarked on a multiple pronged strategy that
included: (1) reducing interest rate risk; (2) diversifying operations beyond
the Savings Bank's traditional slow
<PAGE>
RP Financial, LC.
Page 1.3
growth, blue collar markets in south Philadelphia; (3) increasing earnings
through asset growth, mortgage banking, and non-residential lending; and (4)
pursuing a community banking strategy, including becoming more "bank-like" in
terms of loan products, deposit composition and operations. Within the context
of these objectives, the Savings Bank completed its mutual holding company
reorganization in 1995, which provided the increased capital to support the
Savings Bank's business plan.
The Savings Bank's objectives were pursued with varying degrees of
success. For example, the Savings Bank has been successful in reducing interest
rate risk especially in light of the high concentration of fixed rate
residential loans remaining in its portfolio. The reduction in interest rate
risk is attributable to maintaining a large concentration of cash and
investments, successful efforts to increase the balance of passbook accounts,
and moderately successful efforts to lengthen the term to maturity of CDs.
To date, the Savings Bank has had mixed success in achieving its other
objectives. For example, the Bank has sought to diversify beyond its traditional
south Philadelphia market by relocating the main office to Center City
(completed in June 1996), seeking branching alternatives throughout the
Philadelphia market with several possible sites identified, and expanding
lending activities throughout the greater Philadelphia metropolitan area. With
regard to earnings improvement strategies, the Savings Bank has successfully
pursued moderate balance sheet growth, has put in place the infrastructure to
pursue mortgage banking on a larger scale, and has installed the personnel and
policies to pursue non-residential lending. To date, the progress made by the
Savings Bank in increasing its earnings has been largely in positioning for
future business activities -- specifically incurring the up front expenses
necessary to position for future growth. Finally, with regard to positioning the
Savings Bank to pursue a community banking strategy, the Savings Bank has
installed the necessary infrastructure, products and personnel to pursue the
diversified lending and banking activities of a full service community bank, and
has further begun to originate a diverse mixture of loans. Importantly, the full
transition to a community banking strategy has not been completed. Over the past
several years, management of the Savings Bank has sought to restructure and
position for future growth. During this period, management and the Board opted
to not pursue aggressive growth or lending activities, preferring instead to
maintain a large (and increasing) balance of cash and investments while
attention was concentrated on putting in place the key restructuring strategies
mentioned above.
At this point in time, management and the Board believe that the
up-front investments in personnel, systems and infrastructure have been largely
completed. The future business plan of Pennsylvania Savings includes beginning
to deploy the Savings Bank's considerable financial resources into its community
banking and lending activities, reducing the balances of cash and investments by
deploying such funds into whole loans, growing the balance sheet and shifting
management's focus from "infrastructure" to generating earnings. Pennsylvania
Savings' Board of Trustees has determined that a full conversion to stock form
is an attractive
<PAGE>
RP Financial, LC.
Page 1.4
business strategy at this time for several reasons. First, it will provide the
capital necessary to improve the overall competitive position of the Savings
Bank in its market area, as the additional capital will enhance the Savings
Bank's flexibility with regard to rates and services. Second, the conversion
will provide the opportunity for expanded local stock ownership which could
enhance the financial success of the Savings Bank as local shareholders
consolidate their banking business with Pennsylvania Savings and promote the
Savings Bank's products and services to other local residents, thereby
contributing to growth in the Savings Bank's loans, deposits, and earnings.
Third, the conversion is expected to provide the Savings Bank with greater
flexibility to expand its franchise via internal growth, branch purchases and de
novo branching. The conversion will also provide additional capital for future
acquisitions although there are presently no specific plans for such activities.
The proceeds from the conversion are expected to be deployed as
follows:
o PSB Bancorp. Approximately 50 percent of the net conversion proceeds
will be retained by the Holding Company. Such funds will be invested
initially into short term liquidity investments consistent with the
Savings Bank's current portfolio composition, and a loan to the
Savings Bank's Employee Stock Ownership Plan ("ESOP") to fund stock
purchases in the conversion. Going forward, the Holding Company funds
will be utilized for various corporate purposes, including the
payment of regular dividends and possibly special dividends, possible
repurchase of common stock consistent with regulatory limitations and
time frames, and possible diversification through the purchase of
other operating entities or financial institutions.
o Pennsylvania Savings. The remaining 50 percent of the net proceeds of
the conversion will be infused into the Savings Bank in exchange for
all of the Savings Bank's newly issued stock. Proceeds infused into
the Savings Bank will initially be held in short-term cash and
investments until the Savings Bank is able to redeploy the funds into
loans receivable pursuant to the underlying lending objectives of the
Savings Bank.
On a pro forma basis, Pennsylvania Savings will be in an
overcapitalized position. The Board of Trustees has determined to pursue a
strategy of controlled growth in the greater Philadelphia metropolitan area in
order to leverage capital and, over time, to diversify Pennsylvania Savings'
product lines in conjunction with changing market demand and the Savings Bank's
stated objectives of being a community banking organization. Asset growth is
expected to be funded through internal deposit growth, branching and borrowings.
The Board recognizes that asset growth is a long term strategy, however, and
that the Savings Bank will operate in the near term in an overcapitalized
position.
<PAGE>
RP Financial, LC.
Page 1.5
Balance Sheet Trends
Beginning with the fiscal year ended December 31, 1996, the Savings
Bank changed its fiscal year end from September 30th to December 31st. All
financial information provided in the following sections reflects this change.
From September 30, 1993 through June 30, 1997, Pennsylvania Savings exhibited
annual asset growth of approximately 7.1 percent (see Table 1.1). The growth in
total assets has been driven primarily by an increase in the portfolio of cash
and investments, as excess cash resulting from deposit growth and the mutual
holding company reorganization was channelled primarily into such investments as
opposed to loans receivable while management concentrated on positioning the
Savings Bank for the future. Over the three and three-quarter years ended June
30, 1997, cash and investments increased an annualized rate of 11.9 percent and
loans receivable increased at an annualized rate of 4.4 percent. The growth in
total assets has been driven by increases in deposit liabilities, which have
increased at an annualized rate of 5.4 percent over the past three and
three-quarter years and the mutual holding company reorganization in October
1995 which increased the Savings Bank's capital accounts.
As of June 30, 1997, the largest component of the Savings Bank's asset
base was loans receivable, which comprised 50.0 percent of assets. Pennsylvania
Savings' concentration on residential lending is reflected in the composition of
the portfolio, as fully 76.2 percent of gross loans receivable continue to be
secured by 1-4 family mortgages. Multi-family and commercial real estate loans
comprised 16.5 percent of gross loans receivable, and the remainder of the
portfolio was comprised of construction loans at 3.4 percent of the portfolio,
consumer loans at 2.0 percent and commercial business loans at 1.9 percent. The
overall size of the loan portfolio has increased moderately September 30, 1993,
with the majority of growth realized in the last two years as management has
begun the process of leveraging the Savings Bank's capital in conjunction with
the business plan. The Savings Bank has historically been a portfolio lender,
with loan originations in the local market being retained as portfolio loans. In
the past several years, the Savings Bank has initiated a residential mortgage
banking operation through its subsidiary, and has originated conforming
residential loans for resale, on a servicing released basis, in surrounding
markets.
The second largest component of the balance sheet, cash and investments
comprised $51.6 million of total assets, equal to 41.5 percent of the balance
sheet. Over the past several years, the Savings Bank has maintained a large
balance of cash and investments, well in excess of regulatory requirements,
ranging from 35 to 46 percent of total assets. In the past several years, the
Savings Bank has channelled a portion of excess cash flow into cash and
investment securities as an interest rate risk management tool. At June 30,
1997, cash and investments were comprised of cash and equivalents of $1.4
million, interest-bearing deposits in other financial institutions of $27.6
million, investment securities held as "available for sale" of $5.3 million
(market value)
<PAGE>
Table 1.1
Pennsylvania Savings Bank
Historical Balance Sheets
(Amount and Percent of Assets)
<TABLE>
<CAPTION>
As of September 30,
--------------------------------------------------------------------------------
1993 1994 1995
------------------------ ------------------------ ------------------------
Amount Pct Amount Pct Amount Pct
------ --- ------ --- ------ ---
($000) (%) ($000) (%) ($000) (%)
<S> <C> <C> <C> <C> <C> <C>
Total Amount of:
Assets $96,261 100.0% $99,696 100.0% $113,232 100.0%
Loans receivable (net) 52,816 54.9% 51,097 51.3% 52,253 46.1%
Mortgage-backed securities 6,289 6.5% 7,382 7.4% 5,578 4.9%
Cash and investments 33,889 35.2% 37,734 37.8% 51,841 45.8%
Deposits 85,804 89.1% 89,429 89.7% 94,588 83.5%
Borrowings 0 0.0% 0 0.0% 1,465 1.3%
Retained earnings or Shareholders' equity 8,304 8.6% 8,339 8.4% 9,491 8.4%
</TABLE>
<TABLE>
<CAPTION>
Annual
At December 31, 1996 At June 30, 1997 Growth
------------------------- ------------------------ Rate
Amount Pct Amount Pct Pct
------ --- ------ --- ---
($000) (%) ($000) (%) (%)
<S> <C> <C> <C> <C> <C>
Total Amount of:
Assets $118,434 100.0% $124,298 100.0% 7.05%
Loans receivable (net) 57,183 48.3% 62,140 50.0% 4.43%
Mortgage-backed securities 5,942 5.0% 5,718 4.6% -2.51%
Cash and investments 50,596 42.7% 51,568 41.5% 11.85%
Deposits 100,574 84.9% 104,437 84.0% 5.38%
Borrowings 1,536 1.3% 2,953 2.4% N/M
Retained earnings or Shareholders' equity 14,168 12.0% 14,526 11.7% 16.08%
</TABLE>
____________________________
(1) Ratios are as a percent of ending assets.
Source: Prospectus, audited financial reports, RP Financial calculations.
<PAGE>
RP Financial, LC.
Page 1.7
including an investment in mutual funds, and investment securities
held-to-maturity of $17.2 million comprised primarily of agency securities (see
Exhibit I-4). The mutual fund and investment securities held as available for
sale are carried at market value as of June 30, 1997. The investment securities
held to maturity are carried at historical cost, and had an unrealized pre-tax
loss of $33,000 at of June 30, 1997.
The Savings Bank maintains a moderate portfolio of MBS totaling $5.7
million, or 4.6 percent of assets at June 30, 1997. The balance of MBS has
decreased from levels maintained as of September 30, 1994, as the Savings Bank
has allowed its MBS portfolio to gradually decline through scheduled principal
amortization and prepayments. Approximately $2.7 million of the MBS portfolio is
held to maturity, consisting primarily of GNMA securities of $2.4 million, with
lesser balances of collateralized mortgage obligations ("CMOs") and FHLMC pass
through securities. Approximately $3.1 million of MBS are classified as
available for sale, held at their current market values. MBS classified as
available for sale include $2.4 million of FNMA pass through securities and $0.8
million of FHLMC pass through securities. At June 30, 1997, there was an
unrealized pre-tax gain of approximately $102,000 in the portfolio of held to
maturity MBS.
The Savings Bank's assets were funded with a combination of deposit
liabilities, borrowed funds and stockholders' equity at June 30, 1997. Retail
deposits have consistently met the substantial portion of Pennsylvania Savings'
funding needs. Since fiscal year end 1993, deposits have experienced a 5.4
percent annualized growth rate. Virtually all deposits are taken in by the
Savings Bank's main office in Center City and five branches from depositors who
reside in Pennsylvania Savings' primary market area. In the past, the Savings
Bank has utilized borrowings to a limited degree and had approximately $3.0
million of reverse repurchase agreements ("retail repos") on the books at June
30, 1997, consisting of large balance deposit funds received from retail
customers that are held and secured by the Savings Bank (as opposed to the
Savings Bank holding such funds as uninsured deposits).
Over the past three and three-quarter years since September 30, 1993,
the Savings Bank has posted several years of profitable operations and
successful completed a mutual holding company reorganization that raised
approximately $5.6 million of net conversion proceeds. As a result, total
capital increased from $8.3 million at September 30, 1993 to $14.5 million at
June 30, 1997, representing a compound growth rate of 16.1 percent.
Substantially all of the Savings Bank's capital is tangible capital. As a result
of the stock offering and growth in retained earnings, the Savings Bank's
equity-to-assets ratio increased from 8.6 percent of assets at September 30,
1993 to 11.7 percent at June 30, 1997. Pennsylvania Savings maintains capital
surpluses relative to its regulatory capital requirements, and the addition of
the proceeds from the second step stock offering will increase the capital
surpluses.
<PAGE>
RP Financial, LC.
Page 1.8
Income and Expense Trends
The Savings Bank has reported positive earnings for the past three and
three-quarter fiscal years (see Table 1.2), ranging from a high of 1.08 percent
of average assets in the fiscal year ended September 30, 1993 to a low of 0.02
percent of average assets for the twelve months ended June 30, 1997.
Pennsylvania Savings' earnings have been largely sustained through recurring
sources of income, with the Savings Bank's continued profitable operations
supported by its net interest margin and other operating income (designated as
"Other Income"). The Savings Bank's operations include a relatively high cost
operating structure, related to the specific operating strategies pursued and
the size and nature of the Savings Bank's branch structure. With the exception
of the most recent reporting periods in which the Savings Bank incurred the
one-time SAIF assessment, non-operating income has generally not been a
significant factor in the Savings Bank's earnings. Loan loss provisions have had
a modest, but limited impact on operating results over the time period shown.
The Savings Bank's net interest income ratio before provisions for loan
losses declined between the fiscal years ended September 30, 1993 to the fiscal
year ended December 31, 1996, declining from 3.94 percent of average assets to
3.33 percent. In the most recent twelve month period, the Savings Bank's net
interest income increased to 3.43 percent. These changes correspond to the
Savings Bank's balance sheet structure. Specifically, net interest income
reduced in the years during which the Savings Bank increased its holdings of
(low yielding) cash and investments; and net interest income began to increase
recently as the Savings Bank has pursued moderate growth and has deployed a
greater portion of the balance sheet into higher yielding whole loans. Net
interest income can be expected to increase in the future as the Savings Bank
continues to implement its business plan, specifically deploying its cash and
investments into higher yielding whole loans. The reinvestment of interest-free
capital received in the Savings Bank's stock offering should also serve to
support net interest income in future periods. As highlighted in Exhibit I-5,
changes in the Savings Bank's yields and costs have also contributed to the
improvements in net interest income. Specifically, the Savings Bank's yield-cost
spread has widened from 2.88 percent for the year ended December 31, 1996 to
3.00 percent for the six months ended June 30, 1997. This increase is due
primarily to an increase in yields on cash and investments and to the greater
concentration of loans receivable in the Savings Bank's balance sheet.
Loss provisions have not been a significant item in the Savings Bank's
operating results over the past three and three-quarter fiscal years (see
Exhibit I-6). During fiscal 1996 and the twelve months ended June 30, 1997, the
Savings Bank established loss provisions equal to 0.11 percent of average
assets. The Savings Bank establishes loss provisions consistent with its asset
classification policies, and as of June 30, 1997, the Savings Bank's total
valuation allowances were in compliance with its interest policies. Loss
provisions are considered
<PAGE>
Table 1.2
Pennsylvania Savings Bank
Historical Income Statement
(Amount and Percent of Average Assets)
<TABLE>
<CAPTION>
For the Fiscal Year Ended September 30,
--------------------------------------------------------------------------------
1993 1994 1995
------------------------ ------------------------ ------------------------
Amount Pct Amount Pct Amount Pct
------ --- ------ --- ------ ---
($000) (%) ($000) (%) ($000) (%)
<S> <C> <C> <C> <C> <C> <C>
Interest Income $6,543 7.61% $6,714 6.60% $7,190 6.55%
Interest Expense (3,160) -3.68% (3,045) -2.99% (3,443) -3.13%
------ ------ ------ ----- ------ ------
Net Interest Income $3,383 3.94% $3,669 3.61% $3,747 3.41%
Provision for Loan Losses 0 0.00% (21) -0.02% (27) -0.02%
------ ------ ------ ----- ------ ------
Net Interest Income after Provisions $3,383 3.94% $3,648 3.59% $3,720 3.39%
Other Income 914 1.06% 666 0.65% 956 0.87%
Operating Expense (2,854) -3.32% (3,115) -3.06% (3,548) -3.23%
------ ------ ------ ----- ------ ------
Net Operating Income $1,443 1.68% $1,199 1.18% $1,128 1.03%
Net gain (loss) on IEA $104 0.12% $8 0.01% $0 0.00%
Net gain (loss) on RE operations (45) -0.05% (96) -0.09% (36) -0.03%
Special SAIF assessment 0 0.00% 0 0.00% 0 0.00%
------ ------ ------ ----- ------ ------
Net non-operating income $59 0.07% ($88) -0.09% ($36) -0.03%
Net Income Before Tax $1,502 1.75% $1,111 1.09% $1,092 0.99%
Income Taxes (610) -0.71% (470) -0.46% (433) -0.39%
------ ------ ------ ----- ------ ------
Net Income (Loss) Before Extraordinary Items $892 1.04% $641 0.63% $659 0.60%
Extraordinary Items 36 0.04% 0 0.00% 0 0.00%
------ ------ ------ ----- ------ ------
Net Income (Loss) $928 1.08% $641 0.63% $659 0.60%
Estimated core net income calculations
Net income (loss) before extraordinary items $892 1.04% $641 0.63% $659 0.60%
Net non-operating income (59) -0.07% 88 0.09% 36 0.03%
Taxes on adjustments(2) 20 0.02% (30) -0.03% (12) -0.01%
------ ------ ------ ----- ------ ------
Estimated core net income $853 0.99% $699 0.69% $683 0.62%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year Ended Twelve Months Ended
December 31, 1996 June 30, 1997
------------------------- ------------------------
Amount Pct Amount Pct
------ --- ------ ---
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Interest Income $7,939 6.85% 8,295 7.02%
Interest Expense (4,082) -3.52% (4,240) -3.59%
------ ------ ------ ------
Net Interest Income $3,857 3.33% $4,055 3.43%
Provision for Loan Losses (133) -0.11% (133) -0.11%
------ ------ ------ ------
Net Interest Income after Provisions $3,724 3.21% $3,922 3.32%
Other Income 1,015 0.88% 1,076 0.91%
Operating Expense (3,687) -3.18% (4,136) -3.50%
------ ------ ------ ------
Net Operating Income $1,052 0.91% $862 0.73%
Net gain (loss) on IEA 0 0.00% 0 0.00%
Net gain (loss) on RE operations (145) -0.13% (138) -0.12%
Special SAIF assessment (567) -0.49% (567) -0.48%
------ ------ ------ ------
Net non-operating income ($712) -0.61% ($705) -0.60%
Net Income Before Tax $340 0.29% $157 0.13%
Income Taxes (201) -0.17% (135) -0.11%
------ ------ ------ ------
Net Income (Loss) Before Extraordinary Items $139 0.12% $22 0.02%
Extraordinary Items 0 0.00% 0 0.00%
------ ------ ------ ------
Net Income (Loss) $139 0.12% $22 0.02%
Estimated core net income calculations
Net income (loss) before extraordinary items $139 0.12% $22 0.02%
Net non-operating income 712 0.61% 705 0.60%
Taxes on adjustments(2) (242) -0.21% (240) -0.20%
------ ------ ------ ------
Estimated core net income $609 0.53% $487 0.41%
</TABLE>
(1) Ratios are as a percent of average assets.
(2) Assumes tax rate of 34 percent throughout periods shown.
Source: Prospectus, audited financial reports, RP Financial calculations.
<PAGE>
RP Financial, LC.
Page 1.10
to be a recurring expense, as provisions are established based upon both the
overall level of loans receivable (which are anticipated to grow in future
years) and the balances of classified assets..
Pennsylvania Savings' operations are moderately well diversified,
resulting in a relatively high level of non-interest operating income throughout
the period shown in Table 1.2. As a percent of average assets, Pennsylvania
Savings' non-interest operating income ranged from 0.65 percent to 1.06 percent
over the past three and three-quarter fiscal years. For the twelve months ended
June 30, 1997, the Savings Bank recorded non-interest operating income equal to
0.91 percent of average assets. The Savings Bank generates non-interest
operating income from a variety of sources, including rental income from excess
space in its branch offices, fees and charges earned from originating loans,
service release fees from loans sold into the secondary market, retail banking
activities, and such non-traditional activities as financing local check cashing
operations. The Savings Bank's primary strategy to increase non-interest
operating income in the future is to expand its mortgage banking operation, with
the objective of generating increased loan fees and loan servicing fees. The
Savings Bank's relatively strong level of non-interest operating not only
directly impacts earnings, but also tends to decrease the Savings Bank's
interest rate risk exposure as earnings are less dependent upon the net interest
margin.
While Pennsylvania Savings' operational diversification results in
healthy non-interest operating income, it also has resulted in higher than usual
operating expenses. Pennsylvania Savings maintained operating expenses at
greater than 3.00 percent of average assets since fiscal 1993, and recently
realized an increase in operating expense ratios to a level of 3.50 percent of
average assets for the twelve months ended June 30, 1997. The Savings Bank's
operating expenses are related to several factors, including small average
branch size (six branches required to support a deposit base of $104 million),
greater staffing levels (i.e, each Pennsylvania Savings' employee supports
$2.486 million of assets versus an industry average of $4.437 million per
employee -- see Table 3.3), operational diversification into mortgage banking,
commercial business lending and consumer finance, general increases in operating
expenses, and in the most recent periods, the up-front costs of relocating to
Center City and installing infrastructure to support future operations. In large
measure, the Savings Bank's greater level of operating expenses are incurred to
adequately service the Savings Bank's deposit base in south Philadelphia and to
support fee generating activities in the Savings Bank's subsidiary operations.
Pennsylvania Savings anticipates that its operating expense ratios will be
subject to increases over the next several years, as a result of the additional
costs associated with expanding the Savings Bank's mortgage banking activity,
expanding commercial lending activities, operating as a full stock owned
institution, and normal inflationary cost increases. Over time, management
expects that revenues will expand to cover the increased operating expenses. In
the near term, however, the Savings Bank's earnings are expected to come under
pressure as a result of higher operating expenses.
<PAGE>
RP Financial, LC.
Page 1.11
Gains and losses from the sale of securities and other assets have
generally have not had a significant impact on Pennsylvania Savings' earnings.
In fiscal years 1993 through 1996 and during the twelve months ended June 30,
1997, the Savings Bank recorded several non-operating losses, primarily related
to the write-down of real estate owned and other real estate related expenses
during those years. For the twelve months ended June 30, 1997, the Savings Bank
recorded a net non-operating loss of 0.60 percent of average assets, related
primarily to a net loss on real estate operations and the one-time special SAIF
assessment incurred in the quarter ended September 30, 1996. The special
assessment totaled $567,000. Gains and losses from asset sales are expected to
remain an insignificant factor in the Savings Bank's future earnings.
Interest Rate Risk Management
Pennsylvania Savings manages interest rate risk primarily from the
asset side of the balance sheet, with the intent of maintaining a low level of
interest rate risk in the Savings Bank's earnings. To help offset the interest
rate risk associated with its remaining concentration of fixed rate mortgage
loans (i.e., 90 percent of loans receivable are fixed rate loans, see Exhibit
I-9), Pennsylvania Savings has implemented several asset strategies, including:
(1) increased the size of its commercial real estate loan portfolio (primarily
short-term and/or balloon loans); (2) increased the size of the portfolio of
short-term cash and investments to make up a sizeable 42 percent of the balance
sheet; (3) implemented a residential mortgage banking operation to sell long
term fixed rate originations into the secondary market; and (4) pursued to a
limited degree short-term construction lending, commercial business lending and
consumer finance. These strategies have served to shorten the repricing term of
the Savings Bank's asset base, reducing interest rate risk in the Savings Bank's
earnings.
In addition, the Savings Bank has pursued liability strategies to
reduce interest rate risk, including seeking to attract core passbook and
checking accounts and lengthening, whenever market conditions permit, the term
to maturity of CDs. The Savings Bank has generally increased its balances of
checking accounts but, notwithstanding efforts to attract passbook accounts, the
Savings Bank has experienced a moderate reduction in the balances of passbook
accounts as funds attracted earlier with attractive pricing strategies have
reduced over time. The strategy to lengthen CD maturities was less successful
because of consumer resistance to such products made them difficult to attract
at reasonable interest rates.
Pennsylvania Savings recorded one and three year cumulative
gap-to-assets ratios of negative 8.26 percent and negative 14.84 percent,
respectively, at June 30, 1997 (see Exhibit I-7 and I-8, Loan Portfolio
Duration, and Gap Analysis, respectively). These gap measures indicate that,
notwithstanding the strategies outlined above, net interest income remains
exposed to fluctuations in interest rates. Specifically, if interest
<PAGE>
RP Financial, LC.
Page 1.12
rates were to decline, it would be expected that the Savings Bank would realize
an increase in net interest income. Alternatively, in a rising interest rate
environment, the Savings Bank's net interest margin could be expected to come
under pressure.
Lending Activities and Strategy
The Savings Bank's lending activities have traditionally concentrated
on the origination and retention or sale of 1-4 family permanent mortgage loans
(see Exhibits I-9 and I-10, Loan Portfolio Composition and Loan Originations
Purchases and Sales, respectively). As of June 30, 1997, residential mortgage
loans secured by 1-4 family properties totaled $47.9 million or 76.2 percent of
gross loans receivable. Pennsylvania Savings originates both fixed-rate and
adjustable rate mortgages, but over the past several years the Savings Bank
experienced low demand for ARM loans due both to the interest rate environment
(low rates on fixed rate loans were attractive to consumers) and to the
resistance of the Savings Bank's predominantly blue collar customer base to ARM
loans. The majority of residential loans are originated through the Savings
Bank's TransNational Mortgage Corporation ("TNMC") subsidiary. Residential loans
originated through TNMC are generally sold, for interest rate risk management
and earnings purposes, into the secondary market to private investors on a
servicing released basis. Occasionally, the Savings Bank will retain in its
portfolio selected high quality residential mortgages originated by TNMC. TNMC
originates loans to the secondary market standards of both the federal agencies
(FNMA and FHLMC) and private investors. Loans originated by TNMC include
conforming loans, FHA/VA loans, and non-conforming "B" through "D" loans
originated to specifications of its investors.
ARM loans originated and/or retained by the Savings Bank typically
consist of one- or three-year ARMs that are indexed to the one-year or
three-year Treasury index, with a fixed adjustment margin above the index. ARM
loans have periodic and lifetime repricing caps of 2.0 percent and 6.0 percent,
respectively. In an attempt to enhance demand for ARM loans, the Savings Bank's
initial ARM loan rate is being offered at a discount to the fully indexed rate.
Notwithstanding the discounted initial rates, the Savings Bank has experienced
low demand for ARM loans in its local market.
Fixed rate loans originated and/or retained by the Savings Bank have
terms ranging between 10 and 30 years. Through TNMC, the Savings Bank originates
conventional and FHA/VA loans. The majority of the Savings Bank's residential
lending activity is conventional lending. The majority of fixed rate residential
loans retained by the Savings Bank are originated to underwriting standards of
the secondary market -- either based on underwriting standards of the federal
agencies (FHLMC or FNMA) or the underwriting standards of private investors.
Loans originated by the Savings Bank or loans originated by TNMC within the
Savings
<PAGE>
RP Financial, LC.
Page 1.13
Bank's south Philadelphia market are usually retained as portfolio loans. All
residential mortgage loans are underwritten with maximum loan-to-value ratios of
80 percent. Loans in excess of 80 percent are required to have private mortgage
insurance. All FHA/VA loans are originated for resale into the secondary market
on a servicing released basis.
Substantially all of the Savings Bank's residential loans are secured
by properties located in its primary lending territory of the Philadelphia MSA,
with a very minor portion of Pennsylvania Savings' residential lending
activities consisting of financing homes to existing customers that are located
within Pennsylvania, but outside of the local market area. The majority of
residential mortgage originations are typically generated through TNMC, through
existing and past customers, Realtors, referrals, walk-ins and to a lesser
degree local newspaper and radio advertising. With the exception of loans
purchased internally from the TNMC subsidiary, Pennsylvania Savings does not
generally purchase loans. Residential loans are priced based on current market
conditions, competition, and in the case of TNMC which originates loans for
resale, the secondary market.
Commercial real estate and multi-family lending has been the most
prominent type of lending diversification exhibited by the Savings Bank, with
commercial real estate and multi-family loans totaling $10.4 million or 16.5
percent of gross loans receivable at June 30, 1997. The majority of these loans
are secured by commercial real estate (very few multi-family loans). The terms
of commercial real estate and multi-family loans are negotiated between
Pennsylvania Savings and the borrower. Commercial real estate and multi-family
loans are typically originated with the objective of minimizing interest rate
and credit risk, with loan terms ranging from adjustable rate loans tied to the
Prime lending rate to fixed rate loans with a short 7 to 10 year amortization
period (most new such loans with a 3 year balloon feature). Most commercial real
estate and multi-family loans are originated with balloon features and a maximum
loan-to-value ratio of 70 percent. Pennsylvania Savings' diversification into
commercial real estate loans serves to enhance the yield and interest
sensitivity of its loan portfolio, and is projected to remain the most prominent
area of lending diversification for the Savings Bank. The Savings Bank's
commercial real estate and multi-family loans are primarily commercial real
estate loans secured by small mixed use properties, i.e., "store and tenant"
loans, small office buildings, retail stores, apartment buildings and storage
facilities. Substantially all commercial real estate and multi-family loans are
secured by properties within the Philadelphia MSA. Consistent with the Savings
Bank's business plan objectives, the Savings Bank anticipates significant growth
in the commercial real estate and multi-family portfolio.
At June 30, 1997, the Savings Bank maintained a moderate amount of
construction loans equal to $2.1 million or 3.4 percent of gross loans
receivable. Construction loans are substantially all secured by local
residential properties, and are made either on a spec basis to local builders or
as construction/permanent loans to the end borrowers. The Savings Bank attempts
to limit the credit and interest rate risk in construction loans
<PAGE>
RP Financial, LC.
Page 1.14
by stressing construction/permanent loans, offering either fixed rate or
floating interest rates tied to the Prime lending rate, short terms to maturity,
a maximum loan-to-value ratio of 80 percent of the lower of cost or appraised
value, and limiting loans to smaller developers with strict limitations on the
number of loans that can be in process at any one time. The Savings Bank views
construction loans as an attractive source of permanent 1-4 family loans, and
intends to increase the construction lending activity in the future.
Pennsylvania Savings' development of a non-mortgage loan portfolio is
in the areas of commercial business lending and consumer lending, with the
Savings Bank's portfolio of consumer loans totaling $1.2 million or 2.0 percent
of gross loans outstanding at June 30, 1997 and commercial business loans
totaling $1.2 million or 1.9 percent of gross loans receivable. Commercial
business loans and consumer loans are originated by both the Savings Bank
directly and through a subsidiary operation. Consumer loans originated by the
Savings Bank include primarily home equity loans and lines of credit, unsecured
personal loans, loans secured by deposits, and other loans. Consumer loans are
generally made with a term to maturity of 10 years or less and are offered with
either fixed rate terms or adjustable rate terms tied to the Prime lending rate.
Commercial business loans are generally made to borrowers throughout the
Philadelphia MSA. Commercial business loans are offered with either fixed rate
terms or adjustable rate terms tied to the Prime lending rate. The Savings Bank
underwrites commercial business loans based on a variety of factors, requires
personal guarantees, and in many cases requires additional real estate
collateral such as a personal residence. Although the size of the consumer and
commercial business loan portfolios is relatively small, the Savings Bank's
intentions are to gradually increase the size of the portfolios due to the
attractive yields and repricing benefits of consumer and commercial business
loans.
Pennsylvania Savings has experienced moderate loan growth in recent
years, as originations have exceeded loan repayments and secondary market sales.
The majority of growth has occurred since September 30, 1995, as the Savings
Bank has begun to increase its lending activities. Since September 30, 1995,
loans receivable have increased by $9.9 million, an increase of approximately
18.9 percent. As shown in Exhibit I-10, consistent with the Savings Bank's
residential mortgage lending emphasis, the Savings Bank successfully originated
real estate mortgages of $20.1 million and $12.9 million for the fiscal year
ended December 31, 1996 and the six months ended June 30, 1997, respectively.
The most recent six month period represents an increase in residential lending,
reflecting the increase in mortgage banking activity through TNMC. At the same
time, for the six months ended June 30, 1997, the Savings Bank has increased its
lending activities in other areas as well, originating $1.2 million of consumer
and commercial business loans (versus $1.0 million during fiscal 1996).
The amount of mortgages sold into the secondary market has generally
tracked with the level of real estate loan originations, albeit at significantly
lower levels reflective of the Savings Bank's relatively new
<PAGE>
RP Financial, LC.
Page 1.15
entrance into residential mortgage banking. Loan sales were primarily long-term
conforming loans and "B" through "D" paper originated by TNMC and sold on a
servicing released basis. As of June 30, 1997, reflective of the Savings Bank's
practice of selling on a servicing released basis, the Savings Bank maintained a
- -0- balance portfolio of loans servicing for others. The Savings Bank's future
plans with regard to its lending activities are to increase residential mortgage
banking in the Philadelphia MSA, originating a greater volume of loans and
beginning to sell on a servicing retained basis directly to the federal
agencies.
Asset Quality
As shown in Exhibit I-11, the credit quality of Pennsylvania Savings'
loan portfolio has remained relatively consistent over the past three and
three-quarter years, with non-performing assets maintained at levels ranging
between 2.1 and 2.7 percent of assets. Non-performing assets consist of loans 90
days or more delinquent and still accruing ("90+ Delinquent Loans"), nonaccrual
loans, and real estate owned. As of June 30, 1997, Pennsylvania Savings' ratio
of non-performing assets (or "NPAs") was 2.70 percent of assets, consisting of
$1.5 million of 90+ Delinquent Loans, $1.4 million of nonaccrual loans, and $0.5
million of real estate owned. The Savings Bank's potential loss exposure in
these assets is believed to be moderate. At June 30, 1997, Pennsylvania Savings
maintained valuation allowances of $0.2 million, equal to 0.3 percent of loans
receivable and 6.2 percent of NPAs. The Savings Bank's historical loss
experience indicates generally favorable credit quality. The level of NPAs and
90+ Delinquent Loans and related reserve coverage ratios, however, indicate a
greater degree of credit risk relative to industry standards which include a
greater level of valuation allowances as a percent of loans and NPAs.
Funding Composition and Strategy
Deposits have consistently been the Savings Bank's primary source of
funds and at June 30, 1997, deposits constituted the majority of Pennsylvania
Savings' interest-bearing liabilities. As with most savings institutions,
short-term CDs have been Pennsylvania Savings' primary source of deposits. As of
June 30, 1997, the CD portfolio totaled $59.4 million, with $48.4 million or
81.4 percent of those CDs having maturities of one year or less. Negotiated
jumbo CDs, which tend to more rate sensitive than other types of CDs, amounted
to $5.3 million or 5.1 percent of total deposits at June 30, 1997. The Savings
Bank does not utilize brokered CDs and typically offers CD rates that are
competitive or at a slight premium to the average CD rates paid by the local
competition. Exhibits I-12 and I-13 provide further detail with respect to the
Savings Bank's deposit base.
<PAGE>
RP Financial, LC.
Page 1.16
Lower costing savings and transaction accounts comprised the balance of
Pennsylvania Savings' deposits, totaling $45.0 million or 43.1 percent of total
deposits at June 30, 1997. Like most financial institutions, Pennsylvania
Savings has reduced the rates paid on NOW and passbook savings accounts, with
those accounts paying nominal rates of 1.09 percent and 2.49 percent,
respectively, at June 30, 1997. Over the past year and three-quarters (since
September 30, 1995), the Savings Bank has realized shrinkage of 15.5 percent in
passbook accounts, growth of 138.6 percent in NOW accounts, and growth of 57.9
percent in money market accounts.
The Savings Bank's funding strategy has not historically included
borrowed funds, and the only borrowings utilized over the past three and
three-quarter years have been retail reverse repurchase agreements from retail
depositors whose deposits otherwise would have exceeded the FDIC deposit
insurance limitations. At June 30, 1997, the Savings Bank had approximately $3.0
million of retail reverse repurchase agreements outstanding. In the future,
should liquidity or other needs so dictate, the Savings Bank has the capacity to
utilize FHLB advances as an alternative source of cash to fund operations. There
are no such plans to utilize FHLB advances in the near term.
Pennsylvania Savings' deposits and internal funding are expected to be
adequate enough to fund the lending and investment activities in the near term.
The new branch in Center City Philadelphia is expected to continue to provide
the Savings Bank with access to new deposits to supplement the current deposit
base in south Philadelphia. Deposits are expected to remain the primary source
of funds for lending. In addition to the possible use of FHLB advances as an
alternative funding source, however, the Savings Bank intends to utilize
borrowed funds provided by the Holding Company to finance the purchase of ESOP
shares, which will likely be a floating rate loan approximating the Prime rate
of interest (funds will be lent to the ESOP trust by the Holding Company from
funds raised in the conversion transaction).
Subsidiary
Pennsylvania Savings has three wholly-owned subsidiaries and one
second-tier subsidiary. TNMC is a wholly-owned subsidiary engaged in a mortgage
banking business. TNMC has not engaged in loan servicing activities to date, but
may embark on such activity as the mortgage banking operation is expanded in the
future. TNMC receives all of its funding from Pennsylvania Savings in the form
of loans (TNMC has no external funding sources). For the six months ended June
30, 1997, TNMC reported total loan originations of $6.4 million. The Savings
Bank's total equity investment in TNMC was negative $0.1 million.
<PAGE>
RP Financial, LC.
Page 1.17
PSA Service Corp. ("PSA Service") conducts real estate appraisals,
processes credit applications, and provides other services in connection with
the origination of loans. Additionally, PSA Service owns a nominal amount of
shares in the Savings Bank's service bureau. As of June 30, 1997, PSA Service
reported assets of $0.1 million. The Savings Bank's investment in PSA Service
was $0.1 million.
PSA Financial Corp. ("PSA Financial") is a wholly-owned subsidiary of
Pennsylvania Savings, engaged in the business of originating commercial business
loans and commercial real estate loans. Through its subsidiary, PSA Consumer
Discount Company, PSA Financial is engaged in the consumer finance business. As
of June 30, 1997, PSA Financial reported assets of $2.6 million. At that same
date, PSA Consumer Discount Company reported assets of $0.2 million.
The Savings Bank's investment in PSA Financial was $1.0 million.
The Savings Bank's entire investment in subsidiary is a qualifying
investment for regulatory capital purposes. At this time, with the exception of
expanded mortgage banking activity contemplated for TNMC and expansion of
lending activities in other subsidiaries, no other (or new) activities are
contemplated for TNMC, PSA Service, PSA Financial, or PSA Consumer Discount
Finance, and the Savings Bank currently has no plans to add additional
subsidiaries.
Legal Proceedings
Pennsylvania Savings is currently not 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 Savings Bank.
<PAGE>
RP Financial, LC.
Page 2.1
II. MARKET AREA
Pennsylvania Savings conducts operations out of its headquarters office
in the Center City of Philadelphia, Pennsylvania (Philadelphia County), four
full service branches in Philadelphia, and one full service branch located in
Glenside, Pennsylvania in adjacent Montgomery County (see Exhibit II-1).
Philadelphia and Montgomery Counties are two of the five Pennsylvania counties
included in the Philadelphia Metropolitan Statistical Area ("MSA"). The three
other Pennsylvania counties in the MSA include Bucks, Chester, and Delaware
County (the MSA also encompasses three counties in New Jersey). The Bank's
operations have been historically tied to the primarily blue collar market in
south Philadelphia, and the Bank has operated continuously in south Philadelphia
since 1888. Management of Pennsylvania Savings considers Philadelphia County and
particularly south Philadelphia to be the Bank's primary lending and deposit
market, although the Bank conducts business with customers residing in other
areas of the MSA as well.
The Philadelphia MSA is the nation's fourth largest metropolitan area
in terms of total population. Based on 1990 census data, the population of the
entire MSA was estimated at 5.0 million. The Pennsylvania counties included in
the MSA had an estimated population of 3.7 million, which constitutes nearly
one-third of Pennsylvania's total population. The Philadelphia area economy is
typical of most large northeast and Midwest cities where the traditional
manufacturing-based economy has diminished somewhat to be replaced with service
sector growth. The growth in service employment in Philadelphia has enhanced the
MSA's economic diversity, and employment in the market area today is derived
from a number of different employment sectors.
Over the past several decades, the Philadelphia MSA has become a major
center for financial services, and Pennsylvania Savings competes with a number
of very large financial institutions that are either headquartered or maintain
offices in Philadelphia County. Some of the larger commercial banks operating in
the MSA include Corestates Bank, with more than $20 billion in assets
(headquartered in Philadelphia), First Union, Mellon Bank, and PNC Bank.
Pennsylvania Savings also competes with a number of large thrifts who maintain
branches in or are headquartered in Philadelphia County, including Commonwealth
FSB, Firstrust SB, and Beneficial Mutual SB. Overall, the magnitude of the
competition that Pennsylvania Savings faces is apparent when it is considered
that as of June 30, 1996, there were over 44 commercial banks and 47 thrifts
(including savings banks) who operated a total over 1,129 branches in
Pennsylvania Savings' five county market area. These numbers do not include the
large number of credit union competitors, nor do they account for the
competition derived from mortgage banking companies, investment houses, mutual
funds and other sources.
Future growth opportunities for Pennsylvania Savings depend on several
different growth indicators in the market area, particularly the future growth
and stability of the regional economy, demographic growth trends, and the nature
and intensity of the competitive environment. These factors have been briefly
examined
<PAGE>
RP Financial, LC.
Page 2.2
in the following pages to help determine the growth potential that exists for
the Bank and the relative economic health of the Bank's market area. The growth
potential and the stability provided by the market area have a direct bearing on
the market value of the Bank, and will be factored into our valuation analysis
accordingly.
National Economy
Over the past year, national economic growth has been mixed. The third
quarter of 1996 started with a continuation of second quarter trends, although
mid-July Congressional testimony by the Federal Reserve Chairman hinted of
expectations that the economy would taper off slightly in the second half of
1996. However, much of the economic data released during July and August
continued to indicate a fairly robust pace of economic growth. Such economic
data included a stronger than expected increase in July durable goods orders,
the consumer confidence index hitting a six year high and a decline in the
August unemployment rate. Comparatively, for the balance of the third quarter,
economic data, such as a decline in August durable goods orders and smaller than
expected increases in August retail sales and consumer prices, suggested that
the economy was cooling off. A slight increase in the September unemployment
rate further signaled a slowing economy.
Economic data released at the beginning of the fourth quarter generally
confirmed that the national economy was slowing. October unemployment remained
at 5.2 percent, although the number of new jobs being added to the economy was
lower compared to job growth recorded during the late-spring and the summer.
Third quarter GDP growth fell to a 2.2 percent annual rate, versus a comparative
4.7 percent rate in the second quarter. Wage data also indicated that inflation
was under control, as wages remained flat for production and nonsupervisory
workers in October, despite a $0.50 increase in the minimum wage rate that
became effective on October 1, 1996. While the November unemployment rate
climbed to 5.4 percent from 5.2 percent in October, inflation concerns were
heightened somewhat by an unexpectedly sharp $0.09 jump in average hourly
earnings. However, most of the economic data released at the close of 1996,
which included jobless claims rising to a five month high in November and a
decline in November durable goods orders, suggested that the economy was
sluggish and non-inflationary.
While fourth quarter GDP growth came in at a stronger than expected 4.7
percent annual growth rate (subsequently revised to 3.9 percent), most of the
economic data released during the beginning of the first quarter of 1997
indicated a continuation of moderate economic growth. Such measures as a 1.9
percent decline in December durable goods orders and a modest uptick in the
January 1997 unemployment rate to 5.4 percent, versus 5.3 percent in December
1996, eased concerns that the economy was overheating. However, the increase in
the unemployment rate was attributable to more people who entered the job force,
and some
<PAGE>
RP Financial, LC.
Page 2.3
markets have been experiencing labor shortages. In congressional testimony at
the end of February 1997, the Federal Reserve Chairman indicated that he
anticipated recent signs of lower job insecurity among workers would lead to
upward pressure in wages, which could possibly trigger the Federal Reserve to
boost interest rates. Signs of inflation became more notable during March and
April, with most economic indicators posting month-to-month increases from
January to February. Most notably, during February industrial production
increased 0.5 percent, housing starts rose 12.2 percent and the sale of existing
homes jumped 9.0 percent. Accelerating economic growth was further indicated by
a decline in the March unemployment rate to 5.2 percent, versus 5.3 percent for
February, and a higher than expected rise in the March "core" producer price
index, which posted its largest increase in 18 months. The revised first quarter
GDP growth rate, released in late May 1997, was an annual rate of 5.9 percent,
far exceeding analysts' projections, and gave more evidence of the strong
economy. The unemployment rate for April 1997 declined to 4.9 percent, also an
indicator of a strong economy.
More recent economic data released in the second quarter of 1997
indicates a continued expanding economy, as retail sales have increased modestly
from the prior quarter's level, and business inventories have also increased,
which added to the first quarter GDP growth figures. New home sales also
remained steady based on the latest data available. Automobile sales for May
increased from April levels, but remained below year-earlier levels. Overall,
GDP growth for the second quarter of 1997 is estimated at 2.0 to 2.5 percent, a
significant drop from the first quarter 1997 results.
Consistent with recent economic activity, interest rate trends have
been varied as well over the past year. In early-July 1996, the release of a
strong June employment report had a more severe effect on bond prices, as the
large drop in unemployment provided for one of the largest one day declines in
bond prices with the yield on the 30-year benchmark bond increasing from 6.93
percent to 7.18 percent. After trending lower for a brief period during early-
and mid-August, interest rates moved higher in late-August and early-September
as inflation concerns were raised by the stronger than expected economic growth.
The Federal Reserve's decision not to raise interest rates at its September and
October 1996 meetings, along with economic data providing indications of a
cooling economy, translated into a declining interest rate environment during
late-September and through most of October. Interest rates continued to edge
lower through November, as the October economic data suggested that inflationary
pressures were non-threatening. Bond prices declined slightly in early-December,
as investors focused on weakness in the dollar and rising oil prices. Concern
over Japanese investors slowing their buying of U.S. Treasury notes caused bond
prices to slide in mid-December, despite economic data which continued to
indicate mild inflation. Interest rates were somewhat trendless at the close of
1996, as the Federal Reserve elected not to change interest rates at its
December meeting.
<PAGE>
RP Financial, LC.
Page 2.4
With few inflationary signs, interest rates held steady at the
beginning of 1997, which was followed by a mild easing in interest rates during
the first half of February. Indications of slowing economic growth and the
Federal Reserve's decision to leave rates unchanged at its early-February
meeting spurred the downward trend in interest rates. However, interest rates
edged higher in late-February, following renewed concerns by the Federal Reserve
Chairman over the sharp rise in the stock market during the past two years.
After stabilizing briefly, the strengthening economy and growing expectations of
a rate increase by the Federal Reserve propelled interest rates higher in
late-March 1997.
The Federal Reserve increased short-term interest rates by 0.25 percent
in late-March 1997, which was followed by a sharp sell-off in the bond market.
For the first time in six months, the rate on the 30-year benchmark bond moved
above 7.0 percent. Inflation concerns pushed interest rates higher during the
first half of April 1997, which was followed by a slight decline in interest
rates on rumors of a national budget accord. Throughout the end of April and the
month of May 1997, interest rates continued to fluctuate in a moderately narrow
range as various economic indicators showed various signs of growth and/or
stability in the economy. The most recent revision to the inflation rate in May
1997 showed a 2.2 percent annual rate. Confidence in the nation's economy was
relatively strong through August 1997, reflecting little signs of inflation,
continued strong stock market performance and an overall positive business
outlook, and as of mid-September 1997 one- and thirty-year U.S. Government bonds
were yielding 5.46 percent and 6.38 percent, respectively (see Exhibit II-2 for
historical interest rate information).
Market Area Demographics
Exhibit II-3 includes detailed information regarding the demographic
trends for Philadelphia County as well as the MSA aggregates from 1990 to 1997
and projected through 2002. Data for the Commonwealth of Pennsylvania is
included for comparative purposes. The population trends in Philadelphia County
are significantly less favorable than MSA averages, reflecting the urban flight
typical of most Northeastern urban areas, whereby cities have been losing
population to outlying suburban areas. This is true in Philadelphia as well, as
the surrounding counties, all of which are more suburban than Philadelphia
County, have experienced positive population growth over the past several years.
Household growth trends in Philadelphia County have paralleled the population
growth trends since 1990, exhibiting shrinkage in overall number of households
versus positive growth for the MSA overall. In the near term future, the
population and household growth trends in Philadelphia County and the MSA are
forecasted to continue following the same trends that were experienced over the
past several years. Pennsylvania Savings' historical market in south
Philadelphia will likely provide limited growth opportunities due to a shrinking
population base, but the broader Philadelphia MSA will most likely provide
adequate lending and growth opportunities provided that the Bank can access such
markets.
<PAGE>
RP Financial, LC.
Page 2.5
Income levels in the market area are highlighted by the median
household income and per capita income data in Exhibit II-3 as well.
Philadelphia County recorded below average income levels relative to the MSA as
the area contains a number of blue collar communities close to the city, as well
as a number of low income areas. There is a mix of high and low income residents
in Philadelphia County, as jobs in the market area consist of a mixture of
higher wage, more high tech industries as well as those in lower wage, unskilled
manufacturing industries. Unfortunately, many of the workers in higher wage jobs
live in the surrounding counties of the MSA and commute into the city to work.
Accordingly, the residents of Philadelphia County are predominantly lower wage
workers.
In summary, the Bank's analysis of demographic trends in the primary
market has shaped the overall lending and growth strategies of the Plan. The
Plan contemplates continued service to the Bank's historical south Philadelphia
communities, but also contemplates seeking growth through accessing all markets
in the greater Philadelphia MSA through residential lending via the
TransNational Mortgage Corporation subsidiary and commercial and consumer
lending through the Bank and its other wholly owned subsidiaries. The broader
Philadelphia MSA, including counties adjacent to Philadelphia County, is
expected to provide the Bank with access to a healthier more economically
diverse economy. Based on the demographics, it appears that the broader market
area can support growth and lending opportunities into the future.
Local Economy
Employment in Pennsylvania Savings' market area is derived from a broad
base of employment sectors, including manufacturing, services, wholesale/retail
trade, state and local government, transportation/utilities, FIRE (finance,
insurance, and real estate), and others. Philadelphia's central location in the
northeast corridor, its well-educated and skilled population base,
infrastructure, and other factors have made Pennsylvania Savings' broader market
area attractive to many large corporate employers. These include many Fortune
500 companies, including UNISYS, CIGNA, Bell Atlantic, Scott Paper, ALCO, Sun
Co., and many others. There are also a number of Fortune 500 companies
headquartered in the region surrounding the MSA, including E.I. DuPont,
Bethlehem Steel, Union Pacific, Hercules, and others.
Service employment has exhibited the most rapid growth over the last
several decades, particularly in the health care industry, professional
services, and business services. Wholesale/retail trade employment has also
exhibited strong growth trends. Much of this non-manufacturing employment growth
has taken place in suburban areas proximate to where such workers reside.
Importantly, the growth in non-manufacturing employment has absorbed some of the
loss in manufacturing employment that has occurred in the MSA. Although the
number of manufacturing jobs has steadily declined in the market area, the MSA
contains some
<PAGE>
RP Financial, LC.
Page 2.6
of Pennsylvania's leading counties in terms of number of manufacturing
employees. The largest manufacturing employers in Philadelphia include Sun
Company, The Budd Company, and Rohm and Haas Co. Table 2.1 lists the top 10
Philadelphia County private sector employers, highlighting the major role of
educations, health care and financial services to the Philadelphia County
economy.
Table 2.1
Pennsylvania Savings Bank
Major Philadelphia County Employers
<TABLE>
<CAPTION>
Approximate
Employer Industry/Product of Employees
-------- ---------------- ------------
<S> <C> <C>
University of Penn & Hosp. of Univ College Education/Medical 26,800
Thomas Jefferson Univ. College Education 7,500
CoreStates Financial Commercial Banking 3,200
Bell Atlantic-Pennsylvania Inc. Communication 5,400
Aramark, Inc. Services/Distribution 4,500
Albert Einstein Healthcare Health Care 3,900
CIGNA Corporation Insurance 3,700
Conrail, Inc. Rail freight Transport 2,400
PECO Energy Co. Electric/Gas Provider 2,100
</TABLE>
Source: Philadelphia County Chamber of Commerce.
Due to the large number of employers with a national or multi-national
scope of business in the MSA and Philadelphia County, the Philadelphia economy
is exposed to national and global recessionary trends. This was reflected in the
slow down in the economy that occurred as a result of the national recession in
the early 1990s. Today, the unemployment rate has decreased somewhat with
increased employment opportunities that have become available in the market area
with the improvement in the national economy. Unemployment in the MSA has
generally approximated state averages as displayed by the data in Table 2.2,
although the MSA average has been skewed upward by the higher than average
unemployment rate in Philadelphia County. The past concentration of the Bank's
operations in Philadelphia County, the county with the highest unemployment in
the MSA, was relatively unfavorable from the standpoint of supporting growth in
its existing market -- underscoring the rationale for the Bank's plan to expand
operations into the counties adjacent to Philadelphia County.
<PAGE>
RP Financial, LC.
Page 2.7
Table 2.2
Pennsylvania Savings Bank
Market Area Unemployment Trends(1)
July 1996 July 1997
Region Unemployment Unemployment
------ ------------ ------------
Pennsylvania 5.3% 5.4%
Philadelphia MSA 5.5% 5.3%
Bucks County 4.6% 4.5%
Chester County 3.7% 3.7%
Delaware County 4.9% 4.9%
Montgomery County 3.9% 3.9%
Philadelphia County 7.1% 7.0%
(1) Data is not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics.
Competition
Forecasts of increases in population, households and median household
income should support deposit growth by financial institutions operating in the
market area. Table 2.3 displays deposit trends for thrifts and commercial banks
in the market area from 1994 to 1996. The data indicates that since 1994,
deposit growth in Pennsylvania and Philadelphia, Delaware and Montgomery
Counties has been negative for savings and loans. Commercial banks have
experienced modest deposit growth statewide at a rate below the rate of interest
credited. The slow deposit growth in Pennsylvania overall and in Philadelphia
County can be attributed to the low interest rate environment that has prevailed
over the past two years, whereby many depositors have pulled funds out of low
yielding financial institution deposit accounts and reinvested them into higher
yielding instruments, such as stocks or mutual funds. In addition to very slow
or negative growth in the market overall for thrift deposits, the Bank faces
significant competition from a multitude of large financial institutions
offering their services in the Philadelphia market.
Pennsylvania Savings has experienced positive deposit growth from 1994
to 1996 in contrast to the overall deposit shrinkage experienced by thrifts in
Philadelphia County from 1994 to 1996. As a result, the Bank has increased its
market share of thrift deposits in the County. Pennsylvania Savings' long
history as a locally based financial institution with a community orientation,
as well as the Bank's strong financial condition, focus on providing customers
with a broad array of deposit and loan products, with an emphasis on customer
convenience and service, should facilitate its efforts to compete with the many
larger financial institutions operating in its market, particularly with the
additional flexibility provided by the stock proceeds raised in the conversion.
<PAGE>
Table 2.3
Pennsylvania Savings Bank
Deposit Summary
<TABLE>
<CAPTION>
As of June 30,
-----------------------------------------------------------------------------
1994 1996
------------------------------------- ------------------------------------- Deposit
Market Number of Market No. of Growth Rate
Deposits Share Branches Deposits Share Branches 1994-1996
---------- ------ ---------- ------------ ------- -------- -----------
(Dollars In Thousands) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
State of Pennsylvania $159,814,000 100.0% 4,472 $164,675,292 100.0% 4,476 1.5%
Commercial Banks 132,388,899 82.8% 3,685 137,758,314 83.7% 3,701 2.0%
Savings and Loans 27,425,101 17.2% 787 26,916,978 16.3% 775 -0.9%
Philadelphia County $23,662,779 100.0% 361 $24,289,556 100.0% 343 1.3%
Commercial Banks 19,413,633 82.0% 270 20,587,006 84.8% 263 3.0%
Savings and Loans 4,249,146 18.0% 91 3,702,550 15.2% 80 -6.7%
Pennsylvania SB (1) 82,164 1.9% 5 95,957 2.6% 5 8.1%
Pennsylvania SB (2) 0.3% 0.4%
Delaware County $6,761,006 100.0% 172 $6,584,880 100.0% 170 -1.3%
Commercial Banks 5,132,662 75.9% 125 5,082,203 77.2% 123 -0.5%
Savings and Loans 1,628,344 24.1% 47 1,502,677 22.8% 47 -3.9%
Pennsylvania SB (1) 0.0% 0.0% NA
Pennsylvania SB (2) 0.0% 0.0%
Bucks County $6,500,843 100.0% 200 $6,533,847 100.0% 194 0.3%
Commercial Banks 5,026,509 77.3% 156 4,949,749 75.8% 144 -0.8%
Savings and Loans 1,474,334 22.7% 44 1,584,098 24.2% 50 3.7%
Pennsylvania SB (1) 0.0% 0.0% NA
Pennsylvania SB (2) 0.0% 0.0%
Montgomery County $11,950,231 100.0% 310 $11,627,943 100.0% 316 -1.4%
Commercial Banks 8,930,219 74.7% 231 8,844,530 76.1% 239 -0.5%
Savings and Loans 3,020,012 25.3% 79 2,783,413 23.9% 77 -4.0%
Pennsylvania SB (1) 7,366 0.2% 1 6,879 0.2% 1 -3.4%
Pennsylvania SB (2) 0.1% 0.1%
Chester County $4,013,025 100.0% 144 $4,150,054 100.0% 154 1.7%
Commercial Banks 3,167,853 78.9% 116 3,255,224 78.4% 121 1.4%
Savings and Loans 845,172 21.1% 28 894,830 21.6% 33 2.9%
Pennsylvania SB (1) 0.0% 0.0% NA
Pennsylvania SB (2) 0.0% 0.0%
</TABLE>
(1) Percent of S&L deposits.
(2) Percent of total deposits.
Source: FDIC; OTS.
<PAGE>
III. PEER GROUP ANALYSIS
This chapter presents an analysis of the Savings Bank's operations
versus a group of comparable savings institutions (the "Peer Group") selected
from the universe of all publicly-traded savings institutions. The basis of the
pro forma market valuation of the Savings Bank is provided by these
institutions. Factors affecting the Savings Bank's pro forma value such as
financial condition, credit risk, interest rate risk, loan composition and
recent operating results can be readily assessed in relation to the Peer Group.
Current market pricing of the Peer Group, subject to appropriate adjustments to
account for differences between the Savings Bank and the Peer Group, will then
be used as a basis for the pro forma valuation of the Savings Bank's
to-be-issued common stock.
Selection of Peer Group
We consider the appropriate Peer Group to be comprised of only those
publicly-traded savings institutions whose common stock is either listed on a
national exchange or is NASDAQ listed, since the market for companies trading in
this fashion is regular and reported. We believe non-listed institutions are
inappropriate since the trading activity for thinly-traded stocks is typically
highly irregular in terms of frequency and price and may not be a reliable
indicator of market value. We have also excluded from the Peer Group those
companies under acquisition, and recent conversions, since their pricing ratios
are subject to distortion and/or do not have a seasoned trading history. We have
considered only "fully converted" institutions, i.e., no mutual holding company
subsidiaries, because on a pro forma basis after the second step conversion
Pennsylvania Savings will be a fully converted institution.
From the universe of publicly-traded thrifts, we selected ten
institutions with characteristics similar to those of the Savings Bank. In the
selection process, we applied two primary "screens" to the universe of all
public companies:
o Screen #1. Mid-Atlantic institutions, with assets less than $250 million and
equity-to-assets ratios greater than 12.0 percent. A total of eleven (11)
companies met the criteria for Screen #1. Of these companies, we excluded from
consideration the two mutual holding company subsidiaries (SKBO-First Carnegie
MHC of PA and PHSB-Peoples Home SB of PA) because the pricing ratios of a
mutual holding company subsidiary are not comparable to a fully converted
institution. Of the remaining companies, we excluded the three recently
completed conversions (AFED-AFSALA Bancorp, Inc., AFBC-Advance Financial
Bancorp of WV and GOSB-GSB Financial Corp of NY) because they do not yet have
a year of fully converted operations. We excluded TPNZ-Tappan Zee Financial,
Inc. of NY because the most recent available financial data for this company
is December 31, 1996. We included the remaining five (5) institutions in the
Peer Group, including: HRBF-Harbor Federal Bancorp of MD, PEEK-Peekskill
Financial Corp. of NY, PWBK-Pennwood Savings Bank of PA, SFED-SFS Bancorp of
NY, and WHGB-WHG Bancshares of MD. Exhibit III-2 details the financial
characteristics of all publicly-traded Mid-Atlantic institutions with less
than $250 million in assets and equity-to-assets greater than 12 percent.
<PAGE>
o Screen #2. Pennsylvania companies with assets less than $1 billion,
equity-to-assets ratios in excess of 10 percent and excluding MHC
subsidiaries. Eight (8) institutions met the selection criteria for Screen #2
(see Exhibit III-3), and five were included as part of Bank's Peer Group:
GAF-GA Financial Corp. of PA, LARL-Laurel Capital Group of PA, PHFC-Pittsburgh
Home Financial of PA, PRBC-Prestige Bancorp of PA, and THRD-TF Financial Corp.
of PA. These institutions were selected because they all reported
equity-to-assets ratios in excess of 10 percent, and small asset sizes, and
four of the five reported return on equity (ROE) measures based on core
earnings less than 10 percent which we consider to be comparable to the
Company's ROE measures on a pro forma basis. The three companies in this
screen that were not included in the Peer Group were either high ROE companies
(i.e., over 10 percent on a core ROE basis) or companies operating in Western
Pennsylvania in a market geographically removed from Philadelphia or, in the
case of Pennwood Savings, were included in the Screen #1.
Table 3.1 on the following page shows the general characteristics of
each of the Peer Group companies and Table 4.1 provides summary demographic data
for the primary market areas served by each of the Peer Group companies. While
there are some differences between the Peer Group companies and the Savings
Bank, we believe that the Peer Group provides a good representation of
publicly-traded thrifts with operations comparable to those of the Savings Bank
and, thus, will provide a good basis for valuation. The following sections
present a comparison of the Savings Bank's financial condition, income and
expense trends, loan composition, interest rate risk and credit risk versus the
Peer Group. The conclusions drawn from the comparative analysis are then
factored into the valuation analysis discussed in the final chapter.
A summary description of the key characteristics of each of the Peer
Group companies, which we determined warranted their inclusion as a comparable
institution to the Savings Bank, is detailed below.
o GA Financial Corp of Pennsylvania. Selected based on its shared
regional market in Pennsylvania, this Pittsburgh based institution has
access to a large metropolitan area which provides ample growth
opportunities to leverage its capital. GA Financial also operates as a
residential lender with excess capital and a low ROE, all of which we
considered to be comparable to Pennsylvania Savings.
o TF Financial Corp of Pennsylvania. TF Financial was selected for the
Peer Group because of its shared market in the greater Philadelphia
MSA, its residential lending emphasis, excess capital, moderate
earnings and below market ROE on a core basis. All of these factors,
including the shared market area in Philadelphia, qualified TF
Financial as an appropriate Peer Group member.
o Pittsburgh Home Financial of Pennsylvania. Selected due to its shared
regional Pennsylvania market area, Pittsburgh Home operates in the
metropolitan Pittsburgh market, serving several older, blue collar
communities in the same manner as Pennsylvania Savings' traditional
markets. These shared market area characteristics, coupled with
Pittsburgh Home's residential lending emphasis, relatively high
equity-to-assets ratio and low ROE on a core basis, make this company
an appropriate Peer Group member for the valuation.
<PAGE>
RP FINANCIAL, L.C.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Table 3.1
Peer Group of Publicly-Traded Thrifts
October 14, 1997(1)
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ -------
($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAF GA Financial Corp. of PA AMEX Pittsburgh PA Thrift 750 13 12-31 03/96 19.00 152
THRD TF Financial Corp. of PA OTC Philadelphia PA Thrift 641 14 06-30 07/94 21.37 87
PHFC Pittsburgh Home Fin. of PA OTC Pittsburgh PA Thrift 256 6 09-30 04/96 19.25 38
HRBF Harbor Federal Bancorp of MD OTC Baltimore MD Thrift 216 9 03-31 08/94 22.00 37
LARL Laurel Capital Group of PA OTC Southwestern PA Thrift 212 6 06-30 02/87 24.75 36
PEEK Peekskill Fin. Corp. of NY OTC Southeast NY Thrift 183 3 06-30 12/95 17.00 54
SFED SFS Bancorp of Schenectady NY OTC Eastern NY Thrift 173 3 12-31 06/95 22.00 27
PRBC Prestige Bancorp of PA OTC Western PA Thrift 136 0 12-31 06/96 17.62 16
WHGB WHG Bancshares of MD OTC Baltimore MD Thrift 100 5 09-30 04/96 15.63 23
PWBK Pennwood SB of PA (3) OTC Pittsburgh PA Thrift 50 3 12-31 07/96 17.25 10
</TABLE>
NOTES: (1) Or most recent date available (M=March, S=September, D=December,
J=June, E=Estimated, and P=Pro Forma)
(2) Operating strategies are: Thrift=Traditional Thrift,
M.B.=Mortgage Banker, R.E.=Real Estate Developer,
Div.=Diversified, and Ret.=Retail Banking.
(3) FDIC savings bank institution.
Source: Corporate offering circulars, data derived from information
published in SNL Securities Quarterly Thrift Report, and financial
reports of publicly-traded thrifts.
Date of Last Update: 10/14/97
<PAGE>
o Harbor Federal Bancorp of Maryland. Harbor Federal also shares several
operating characteristics with Pennsylvania Savings: excess capital, an
emphasis on residential mortgage lending and a below market ROE based
on core earnings. Harbor Federal's market area in the greater Baltimore
market also provides comparable growth opportunities as the markets of
Pennsylvania Savings.
o Laurel Capital Group of Pennsylvania. Laurel Capital Group shares
several operating characteristics with Pennsylvania Savings, excess
capital, an emphasis on residential lending, and the same shared
regional market in Pennsylvania.
o Peekskill Financial Corp of New York. Peekskill Financial has the
highest equity-to-assets ratio of any of the Peer Group companies.
Peekskill Financial was included in the Peer Group due to its
residential lending emphasis, its shared regional market area in the
Mid-Atlantic U.S. , and the comparability of its financial
characteristics such as excess capital and a below market ROE on a core
earnings basis.
o SFS Bancorp of Schenectady New York. Included in the Peer Group
primarily based on its shared regional market in the Mid-Atlantic U.S.,
SFS Bancorp also operates with similar limited resources (only $173
million in assets), a strong capital position, moderate earnings, below
market ROE on a core earnings basis, and a primary emphasis on
residential real estate lending.
o Prestige Bancorp of Pennsylvania. Prestige Bancorp was included in the
Peer Group because of its shared market in Pennsylvania, its relatively
small asset size of $136 million, its strong capital position and
moderate earnings. In addition, although not located immediately in
Pittsburgh, Prestige Bancorp has access to the greater Pittsburgh
market which provides growth opportunities similar to the metropolitan
markets of Pennsylvania Savings.
o WHG Bancshares of Maryland. WHG Bancshares operates in the greater
Baltimore market, which shares many growth and demographic
characteristics with Pennsylvania Savings' markets. WHG was included in
the Peer Group because of similar financial characteristics such as
asset size ($100 million), strong capital and moderate earnings.
o Pennwood Savings Bank of Pennsylvania. Pennwood Savings is the smallest
company included in the Peer Group with assets of just $50 million.
Pennwood Savings was included in the Peer Group because of the
similarities of market areas (Pennwood Savings operates in proximity to
a metropolitan Pennsylvania market), strong capital levels, limited
resources and moderate earnings levels measured by ROE based on core
earnings.
In aggregate, the Peer Group companies are more highly capitalized than
the industry average (14.76 percent of assets versus 12.91 percent for the all
SAIF average), generate moderately higher earnings as a percent of average
assets (0.96 percent core ROAA versus 0.85 percent for the all SAIF average),
and generate a lower ROE (6.43 percent core ROE versus 7.48 percent for the all
SAIF average). Overall, the Peer Group's average P/B ratio was lower than, and
the core P/E multiple was higher than, the respective comparable SAIF averages
(see Table 4.6 in Chapter IV for a summary pricing analysis). We reviewed this
pricing differential with two conclusions: first, the lower P/B of the Peer
Group is consistent with the Peer Group's higher equity-to-assets ratio and
lower ROE relative to the all SAIF average and, second, the higher P/E multiple
of the Peer
<PAGE>
Group is consistent with the Peer Group's higher equity-to-assets ratio in which
investors are willing to "pay up" relative to earnings for an overcapitalized
company in anticipation of future leverage. In general, the companies selected
for the Peer Group were fairly comparable to the Savings Bank, as will be
highlighted in the following comparative analysis.
Financial Condition
Table 3.2 shows comparative balance sheet measures for the Savings Bank
and the Peer Group, reflecting the expected similarities and some differences
given the selection procedures outlined above. The ratios of both the Savings
Bank and the Peer Group reflect balances as of June 30, 1997. The Savings Bank's
stockholders' equity equal to 11.7 percent was below the Peer Group's average
net worth ratio of 14.8 percent; however, with the addition of stock proceeds,
the Savings Bank's pro forma capital position (consolidated with the holding
company) can be expected to be comparable to or exceed the Peer Group's ratio.
Intangibles equaled 0.0 percent of assets for Pennsylvania Savings while
intangible assets were nominal for the Peer Group on average (0.2 percent of
assets). Factoring in intangible assets, Pennsylvania Savings' tangible capital
equaled 11.7 percent versus an average of 14.6 percent for the Peer Group. Both
the Savings Bank's and the Peer Group's capital ratios reflected capital
surpluses with respect to the regulatory capital requirements, with the Peer
Group's ratios currently indicating slightly greater capital surpluses. On a pro
forma basis, the Savings Bank's capital surpluses will be more comparable to or
exceed the Peer Group's ratios.
The interest-earning asset compositions for the Savings Bank and the
Peer Group were broadly similar, with loans constituting a majority of
interest-earning assets for the Savings Bank and the Peer Group. The Savings
Bank's level of loans was slightly lower than the Peer Group's ratio (50.0
percent versus 58.8 percent for the Peer Group). Neither the Savings Bank nor
the Peer Group had an especially high concentration of loans receivable relative
to national averages for public companies. Accordingly, both the Savings Bank
and the Peer Group maintained a sizeable component of the their respective
balance sheets in cash, investments and MBS. Cash, investments and MBS in
aggregate comprised 46.1 percent and 38.7 percent, respectively, of the Savings
Bank's and Peer Group's balance sheets. The Savings Bank's cash and investments
to assets ratio was significantly higher than the comparable ratio for the Peer
Group (41.5 percent versus 22.5 percent for the Savings Bank) with a
correspondingly lower concentration of MBS (4.6 percent for the Savings Bank
versus 16.2 percent on average for the Peer Group). A more detailed analysis of
the respective loan portfolios of Pennsylvania Savings and the Peer Group will
be detailed in a following section and will show that: (1) both Pennsylvania
Savings and the Peer Group are primarily mortgage lenders; and (2) Pennsylvania
Savings has diversified its portfolio to a greater extent with commercial real
estate and multi-family loans while conversely, the Peer Group's portfolio has
been primarily concentrated on residential assets
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.2
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of June 30, 1997
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets
----------------------------------------------------------------------------------------
Cash and Borrowed Subd. Net Goodwill Tng Net MEMO:
Investments Loans MBS Deposits Funds Debt Worth & Intang Worth Pref.Stock
----------- ------ ------ -------- -------- ------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank
- -------------------------
June 30, 1997 41.5 50.0 4.6 84.0 2.4 0.0 11.7 0.0 11.7 0.0
SAIF-Insured Thrifts 18.0 67.4 11.3 71.0 14.6 0.2 12.6 0.2 12.4 0.0
State of PA 23.6 61.1 12.5 70.0 18.2 0.3 9.5 0.3 9.1 0.0
Comparable Group Average 22.5 58.8 16.2 71.7 11.7 0.0 14.8 0.2 14.6 0.0
Mid-Atlantic Companies 22.5 58.8 16.2 71.7 11.7 0.0 14.8 0.2 14.6 0.0
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 30.6 37.3 30.3 61.2 22.5 0.0 15.2 0.2 15.0 0.0
HRBF Harbor Federal Bancorp of MD 23.1 68.2 6.1 78.8 6.2 0.0 12.9 0.0 12.9 0.0
LARL Laurel Capital Group of PA 22.5 69.1 6.8 82.6 5.2 0.0 10.0 0.0 10.0 0.0
PEEK Peekskill Fin. Corp. of NY 20.1 24.9 53.9 72.5 0.0 0.0 25.7 0.0 25.7 0.0
PWBK Pennwood SB of PA 38.5 54.0 3.7 71.7 8.9 0.0 17.5 0.0 17.5 0.0
PHFC Pittsburgh Home Fin. of PA 16.3 67.0 14.5 54.2 32.9 0.0 10.9 0.1 10.8 0.0
PRBC Prestige Bancorp of PA 21.5 66.9 9.0 65.5 22.3 0.0 11.1 0.0 11.1 0.0
SFED SFS Bancorp of Schenectady NY 14.7 71.8 10.9 85.6 0.0 0.0 12.5 0.0 12.5 0.0
THRD TF Financial Corp. of PA 23.8 49.3 23.4 71.9 15.4 0.0 11.1 1.4 9.8 0.0
WHGB WHG Bancshares of MD 13.5 79.3 2.9 73.3 4.0 0.0 20.7 0.0 20.7 0.0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Annual Growth Rates Regulatory Capital
------------------------------------------------------------ -------------------------
Cash and Loans Borrows. Net Tng Net
Assets Investments & MBS Deposits &Subdebt Worth Worth Tangible Core Reg.Cap.
------ ----------- ------ -------- -------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank
- -------------------------
June 30, 1997 10.15 3.88 15.56 7.83 NM 5.12 5.12 13.97 13.97 26.40
SAIF-Insured Thrifts 12.30 8.84 13.18 8.46 17.60 0.62 -0.13 10.98 11.04 22.95
State of PA 17.17 21.55 13.63 8.53 32.05 3.27 2.15 8.15 9.70 19.26
Comparable Group Average 15.12 19.13 16.04 9.00 7.13 -6.67 -8.18 13.92 14.88 32.67
Mid-Atlantic Companies 15.12 19.13 16.04 9.00 7.13 -6.67 -8.18 13.92 14.88 32.67
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 33.32 26.68 36.70 7.73 NM -11.39 -12.32 13.10 13.10 37.00
HRBF Harbor Federal Bancorp of MD 7.63 -5.00 12.97 5.78 58.82 0.42 0.42 11.61 11.61 25.51
LARL Laurel Capital Group of PA 7.64 46.55 0.16 6.28 74.55 0.83 0.83 NM 9.91 20.61
PEEK Peekskill Fin. Corp. of NY -4.58 -13.84 -2.31 3.21 -100.00 -21.43 -21.43 24.87 24.87 96.81
PWBK Pennwood SB of PA 6.57 -10.84 24.63 -4.06 NM NM NM NM 17.46 34.37
PHFC Pittsburgh Home Fin. of PA 39.27 38.05 39.51 20.79 NM -7.96 -8.98 NM 24.02 10.60
PRBC Prestige Bancorp of PA 32.27 78.36 24.24 7.58 NM -1.07 -1.07 11.29 11.29 24.58
SFED SFS Bancorp of Schenectady NY 5.16 -9.65 7.53 6.18 NM -3.29 -3.29 12.45 12.45 24.21
THRD TF Financial Corp. of PA 21.14 54.67 10.93 34.80 -4.84 -5.18 -16.82 9.00 9.00 20.80
WHGB WHG Bancshares of MD 2.73 -13.72 6.01 1.71 NM -11.00 -11.00 15.11 15.11 32.25
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
such as 1-4 family mortgage loans and MBS. Overall, the Savings Bank's
interest-earning assets amounted to 96.1 percent of assets, which was below the
comparable Peer Group ratio of 97.5 percent.
The Savings Bank's funding liabilities reflect a funding strategy
similar to that of the Peer Group's funding composition, with retail deposits
constituting the major source of interest-bearing funds utilized by the Savings
Bank and the Peer Group. The Savings Bank's deposits equaled 84.0 percent of
assets, which was higher than the Peer Group average of 71.7 percent. Partially
offsetting the Savings Bank's higher ratio of deposits was its lower level of
borrowings, as indicated by borrowings-to-assets ratios of 2.4 percent and 11.7
percent for the Savings Bank and the Peer Group, respectively. Total
interest-bearing liabilities maintained by the Savings Bank and the Peer Group,
as a percent of assets, equaled 86.4 percent and 83.4 percent, respectively,
with the Peer Group's lower ratio being supported by maintenance of a higher
capital position, a situation which will largely be addressed with the
completion of the conversion of the mutual holding company and the second step
stock offering.
A key measure of balance sheet strength for a thrift institution is its
IEA/IBL ratio. Presently, the Savings Bank's IEA/IBL ratio is lower than the
Peer Group's ratio, based on respective ratios of 111.2 percent and 117.1
percent. The additional capital realized from stock proceeds should serve to
partially address the lower IEA/IBL ratio currently maintained by the Savings
Bank, as the interest free capital realized in the Savings Bank's stock offering
will be deployed into interest-earning assets.
The growth rate section of Table 3.2 shows annual growth rates for key
balance sheet items. The Savings Bank's growth rates are based on annual growth
for the six (6) months ended June 30, 1997, while the Peer Group's growth rates
are based on annual growth for the most recent twelve month period available.
Asset growth rates of positive 10.2 percent and 15.1 percent were posted by the
Savings Bank and the Peer Group, respectively. The Savings Bank's asset growth
measures reflect that favorable loan growth was recorded during the period
(positive growth rate of 15.6 percent), with funding for the loan portfolio
being largely provided by growth in deposits (7.8 percent annual growth) and
borrowings (borrowings more than doubled). The Peer Group's stronger asset
growth was skewed upward by the strong growth posted by several Peer Group
members that pursued aggressive leverage strategies during the recent year. The
Peer Group's balance sheet growth matched or exceeded the Savings Bank's in
virtually all measures including total assets, cash and investments (19.1
percent growth versus 3.9 percent for the Savings Bank), loans and MBS (16.0
percent growth versus 15.6 percent for the Savings Bank), and deposits (9.0
percent growth versus 7.8 percent for the Savings Bank). Despite recording a
lower return on average assets ratio, the Savings Bank posted a stronger capital
growth rate than the Peer Group (positive 5.1 percent versus negative 6.7
percent for the Peer Group). Higher dividend payments and stock repurchases (the
Peer Group is comprised of full stock companies), as well as possible negative
SFAS 115 adjustments, were likely factors that accounted for the Peer Group's
negative capital growth rate. Following the increase in capital realized from
conversion proceeds, the Savings Bank's capital growth rate will be depressed by
(1) a higher pro forma capital position and comparatively lower marginal
returns, (2) dividends which will be paid on all outstanding shares, and (3)
potentially stock repurchases.
<PAGE>
Income and Expense Components
The Savings Bank and the Peer Group reported net income to average
assets ratios of 0.02 percent and 0.67 percent, respectively, based on earnings
for the twelve months ended June 30, 1997 (see Table 3.3). Both the Savings
Bank's and most of the Peer Group's earnings were depressed by the one time
assessment to recapitalize the SAIF, which is shown as a non-operating item
under net gains in Table 3.3. The Savings Bank's earnings were characterized by
a healthy level of net interest income, a favorable level of earnings
diversification (i.e., healthy level of non-interest operating income) and
significantly higher than normal operating expenses. Notwithstanding these
differences, both the Savings Bank's and the Peer Group's income statements
reflected those of "traditional" thrift, relying on net interest income and
operating expenses as the primary determinate of profitability.
Net interest income was the primary component of the Savings Bank's and
the Peer Group's earnings. Pennsylvania Savings' net interest income was
slightly less favorable than the net interest income recorded by the Peer Group
(3.43 percent of average assets for Pennsylvania Savings versus 3.51 percent for
the Peer Group). The unfavorable net interest income was recorded primarily
because of the Savings Bank's lower capital level and greater concentration of
(lower yielding) cash and investments. Pennsylvania Savings' interest income as
a percent of assets was slightly lower than the Peer Group average (7.02 percent
of average assets versus 7.22 percent for the Peer Group), and the Savings
Bank's ratio of interest expense to assets was moderately lower (3.59 percent of
average assets versus 3.70 percent for the Peer Group). As shown in the
yield-cost section of Table 3.3, Pennsylvania Savings' yield on interest-earning
assets was slightly less favorable than the Peer Group's (7.38 percent and 7.44
percent, respectively), a result of the Savings Bank's concentration of cash and
investments. The Savings Bank operated with a moderately more favorable cost of
funds (4.38 percent versus 4.51 percent for the Peer Group), which was related
to the large portfolio of passbook savings accounts and the Savings Bank's
smaller reliance on borrowings relative to the Peer Group. The benefits of the
Savings Bank's slightly wider yield-cost spread, however, were reduced by its
greater reliance on interest-bearing liabilities for funding. This is a direct
result of the Savings Bank's lower capital.
The establishment of loss provisions had a comparable effect on the
Savings Bank's earnings, representing 0.11 percent of average assets versus 0.06
percent for the Peer Group. These measures are lower
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.3
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended June 30, 1997
<TABLE>
<CAPTION>
Net Interest Income Other Income
---------------------------- -------------------
Loss NII Total
Net Provis. After Loan R.E. Other Other
Income Income Expense NII on IEA Provis. Fees Oper. Income Income
------ ------ ------- ------ ------- ------- ---- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank
- -------------------------
June 30, 1997 0.02 7.02 3.59 3.43 0.11 3.32 0.00 0.00 0.91 0.91
SAIF-Insured Thrifts 0.66 7.38 4.09 3.29 0.14 3.16 0.12 0.01 0.30 0.42
State of PA 0.67 7.26 4.04 3.22 0.14 3.09 0.08 -0.01 0.22 0.29
Comparable Group Average 0.67 7.22 3.70 3.51 0.06 3.45 0.04 -0.01 0.17 0.19
Mid-Atlantic Companies 0.67 7.22 3.70 3.51 0.06 3.45 0.04 -0.01 0.17 0.19
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 0.99 7.21 3.34 3.87 0.05 3.82 0.00 0.00 0.27 0.27
HRBF Harbor Federal Bancorp of MD 0.46 7.39 4.49 2.90 0.03 2.87 0.03 0.00 0.07 0.10
LARL Laurel Capital Group of PA 1.14 7.51 3.77 3.73 0.01 3.72 0.03 0.02 0.26 0.30
PEEK Peekskill Fin. Corp. of NY 0.97 6.61 2.92 3.70 0.08 3.62 0.06 0.00 0.07 0.13
PWBK Pennwood SB of PA 0.69 7.80 3.53 4.27 0.06 4.20 0.00 -0.13 0.23 0.10
PHFC Pittsburgh Home Fin. of PA 0.62 7.56 4.39 3.17 0.16 3.01 0.00 -0.01 0.18 0.17
PRBC Prestige Bancorp of PA 0.37 6.86 3.66 3.20 0.06 3.14 0.00 0.00 0.27 0.27
SFED SFS Bancorp of Schenectady NY 0.44 7.15 3.75 3.40 0.07 3.33 0.09 0.01 0.13 0.23
THRD TF Financial Corp. of PA 0.55 6.91 3.80 3.12 0.07 3.05 0.10 0.00 0.10 0.20
WHGB WHG Bancshares of MD 0.51 7.16 3.38 3.78 0.06 3.72 0.03 0.00 0.10 0.13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
---------------- -------------- -------------------------
MEMO: MEMO:
G&A Goodwill Net Extrao. Yield Cost Yld-Cost Assets/ Effective
Expense Amort. Gains Items On Assets Of Funds Spread FTE Emp. Tax Rate
------- ------- ------- ------- --------- -------- ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank
- -------------------------
June 30, 1997 3.50 0.00 -0.60 0.00 7.38 4.38 3.00 2,486 34.00
SAIF-Insured Thrifts 2.22 0.02 -0.32 0.00 7.41 4.65 2.76 4,458 36.94
State of PA 2.00 0.04 -0.35 0.00 7.53 4.60 2.93 4,437 33.07
Comparable Group Average 2.17 0.01 -0.44 0.00 7.44 4.51 2.93 4,320 34.09
Mid-Atlantic Companies 2.17 0.01 -0.44 0.00 7.44 4.51 2.93 4,320 34.09
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 2.29 0.01 -0.42 0.00 7.52 4.19 3.33 3,712 45.05
HRBF Harbor Federal Bancorp of MD 1.84 0.00 -0.38 0.00 7.64 5.26 2.38 4,508 38.61
LARL Laurel Capital Group of PA 1.77 0.00 -0.46 0.00 7.67 4.33 3.34 4,240 36.68
PEEK Peekskill Fin. Corp. of NY 1.78 0.00 -0.47 0.00 6.68 4.16 2.52 7,302 34.56
PWBK Pennwood SB of PA 2.69 0.00 -0.66 0.00 8.14 4.46 3.67 4,544 28.23
PHFC Pittsburgh Home Fin. of PA 1.94 0.01 -0.27 0.00 7.73 5.19 2.55 4,418 35.35
PRBC Prestige Bancorp of PA 2.41 0.00 -0.43 0.00 7.07 4.26 2.81 4,113 36.34
SFED SFS Bancorp of Schenectady NY 2.56 0.00 -0.53 0.00 7.33 4.40 2.93 2,701 5.24
THRD TF Financial Corp. of PA 1.94 0.12 -0.29 0.00 7.14 4.37 2.78 4,081 39.72
WHGB WHG Bancshares of MD 2.45 0.00 -0.52 0.00 7.49 4.47 3.01 3,580 41.15
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
than industry averages, but were not considered unusual. Neither the Savings
Bank nor the Peer Group's earnings were unduly affected by loan loss provisions,
and the differences in loan loss provisions was not considered material to the
valuation.
Non-interest income made a larger contribution to the Savings Bank's
earnings relative to the Peer Group's (0.91 percent of average assets versus
0.19 percent for the Peer Group). The Savings Bank's measure is higher than the
industry average, and indicates that Pennsylvania Savings operates with greater
than average diversification of operations. Non-interest income for the Savings
Bank and the Peer Group is primarily comprised of deposit fee income, service
charges, including late charges on loans, subsidiary income, income (losses)
from real estate operations, and other miscellaneous fee revenues. The Savings
Bank's greater level of non-interest income is related to its mortgage banking
activity, rental income and several consumer finance activities. For valuation
purposes, the stability of Pennsylvania Savings' non-interest income was
considered to be substantially equivalent between the Savings Bank and the Peer
Group.
Pennsylvania Savings' operating expense ratio was significantly higher
than the Peer Group ratio (3.50 percent of average assets versus 2.17 percent
for the Peer Group). The reasons for the higher operating expenses include a
relatively high number of branch offices for an institution with $124 million in
assets, a lower assets per employee ratio for Pennsylvania Savings versus the
Peer Group ($2.4 million in assets per employee versus $4.3 million average for
the Peer Group), the recent costs of relocating the main office to Center City
and the up-front costs of improving the Savings Bank's lending and operational
infrastructure, and an operating strategy that includes several high cost
services such as a deposit base concentrated in passbook accounts, mortgage
banking, commercial lending, construction lending and consumer lending. When
viewed together, net interest income, non-interest income and operating expenses
provide an insight into an institution's earnings strength, since those sources
of income and expense are typically the most prominent components of earnings
and are generally more predictable than losses and gains realized from the sale
of assets. In this regard, as measured by their expense coverage spreads (the
amount by which net interest income and non-interest income exceeds operating
expenses), Pennsylvania Savings and the Peer Group both have favorable recurring
earnings potential. An expense coverage spread of greater than -0- indicates
that an institution is able to sustain pre-tax profitability without having to
rely on non-interest sources of income. Pennsylvania Savings' expense coverage
spread of 0.84 percent of average assets was less favorable than the Peer
Group's spread of 1.53 percent of average assets. Although the Savings Bank's
net interest income is expected to increase as a result of the conversion
(reinvestment income), operating expenses related to operating as a stock
company and increasing its lending activities are likely to offset any increase
in net interest income.
<PAGE>
Net non-operating losses of 0.60 percent for the Savings Bank compared
less favorably to the Peer Group's measure of 0.44 percent of net losses. Both
the Savings Bank and all Peer Group companies incurred a one-time special
assessment to recapitalize the SAIF, which is reflected in the trailing twelve
month period. The valuation analysis, included in the following section, will
adjust for the non-recurring nature of these items. Specifically, the historical
earnings base utilized in the valuation will be adjusted to an estimated core
earnings figure net of these non-operating items, eliminating their impact from
the valuation analysis.
Loan Composition
Table 3.4 presents data related to the loan composition of Pennsylvania
Savings and the Peer Group. An emphasis on low risk residential lending was
apparent in both the Savings Bank's and the Peer Group's loan compositions, with
1-4 family permanent mortgage loans and MBS accounting for 79.1 percent and 88.6
percent of Pennsylvania Savings' and the Peer Group's total loan and MBS
portfolios, respectively. Both the Savings Bank and the Peer Group are primarily
portfolio lenders, with the Peer Group reporting a moderate level of loans
serviced for others (the only Peer Group member that reported a significant
portfolio of loans serviced for others relative to total assets was TF Financial
Corp. Pennsylvania Savings maintained a lower concentration of residential MBS
than the Peer Group, while the Peer Group maintained a lower concentration of
1-4 family residential loans than the Savings Bank.
The patterns of lending diversification for Pennsylvania Savings and
the Peer Group were comparable, as multi-family and commercial real estate loans
were the primary areas of lending diversification for both Pennsylvania Savings
and the Peer Group (15.3 percent of loans and MBS for Pennsylvania Savings
versus 4.0 percent for the Peer Group). The remaining diversification for the
Peer Group was comprised of commercial business loans, construction loans and
consumer loans. The remaining diversification for the Savings Bank was comprised
of construction loans, consumer loans and commercial business loans. Overall,
the Savings Bank's loan portfolio composition reflected slightly greater
diversification into higher yielding and higher risk types of loans.
Taking into account the entire balance sheet composition, including
cash and investments and the concentration of MBS in the portfolio, as indicated
by the risk weighted assets ratio in Table 3.4 (i.e., the "RWA/Assets" column),
the benefits of Pennsylvania Savings' residential loan portfolio and the high
concentration of cash and investments offset the higher risk nature of the
Savings Bank's loan diversification, resulting in a substantially comparable
risk-weighting in total assets for Pennsylvania Savings relative to the Peer
Group (risk-weighted assets measured 45.2 percent of total assets for
Pennsylvania Savings versus 44.9 percent for the Peer Group). Overall,
notwithstanding these moderate differences, the high concentration of 1-
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.4
Loan Portfolio Composition and Related Information
Comparable Institution Analysis
As of June 30, 1997
<TABLE>
<CAPTION>
Portfolio Composition as a Percent of MBS and Loans
---------------------------------------------------------
1-4 Constr. 5+Unit Commerc. RWA/
Institution MBS Family & Land Comm RE Business Consumer Assets
- ----------- ------ ------ ------ ------ ------ -------- ------
(%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank 8.43 70.64 3.14 15.32 1.75 1.80 45.17
SAIF-Insured Thrifts 15.11 61.77 5.27 11.76 6.53 1.69 52.06
State of PA 17.01 64.93 4.27 6.12 7.13 1.90 48.64
Comparable Group Average 22.29 66.28 3.59 4.03 4.36 0.57 44.85
Comparable Group
- ----------------
GAF GA Financial Corp. of PA 43.29 43.72 0.98 3.02 9.59 0.05 34.98
HRBF Harbor Federal Bancorp of MD 10.75 73.83 10.77 5.81 0.82 2.14 45.86
LARL Laurel Capital Group of PA 6.57 72.33 1.32 5.85 13.92 0.00 50.76
PEEK Peekskill Fin. Corp. of NY 70.63 28.19 0.49 0.45 0.47 0.00 25.62
PWBK Pennwood SB of PA 8.26 71.53 6.33 11.34 4.37 0.00 52.43
PHFC Pittsburgh Home Fin. of PA 14.84 74.42 7.18 1.61 0.60 1.35 46.56
PRBC Prestige Bancorp of PA 16.08 77.01 0.85 0.61 5.05 0.88 47.05
SFED SFS Bancorp of Schenectady NY 15.34 80.21 0.25 3.65 0.42 0.00 53.13
THRD TF Financial Corp. of PA 33.40 56.50 2.65 3.83 3.37 1.29 44.63
WHGB WHG Bancshares of MD 3.72 85.03 5.09 4.11 4.97 0.00 47.46
Serviced Servicing
Institution For Others Assets
- ----------- ---------- ------
($000) ($000)
<S> <C> <C>
Pennsylvania Savings Bank 0 0
SAIF-Insured Thrifts 392,306 2,656
State of PA 202,048 999
Comparable Group Average 8,523 67
Comparable Group
- ----------------
GAF GA Financial Corp. of PA 0 0
HRBF Harbor Federal Bancorp of MD 355 0
LARL Laurel Capital Group of PA 1,229 0
PEEK Peekskill Fin. Corp. of NY 0 0
PWBK Pennwood SB of PA 149 0
PHFC Pittsburgh Home Fin. of PA 0 0
PRBC Prestige Bancorp of PA 0 0
SFED SFS Bancorp of Schenectady NY 3,841 0
THRD TF Financial Corp. of PA 79,657 669
WHGB WHG Bancshares of MD 0 0
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
4 family mortgages and MBS maintained by the Savings Bank and the Peer Group
tended to minimize the overall credit risk of their respective lending
activities.
Credit Risk
Table 3.5 reflects the relative levels of credit risk exposure for the
Savings Bank and the Peer Group, in terms of NPAs as a percent of total assets
and valuation allowances maintained as a percent of NPAs. In substantially all
measures, the asset quality measures of the Savings Bank are less favorable than
those reported by the Peer Group. For example, the level of non-performing
assets posted by Pennsylvania Savings was greater than the level reported by the
Peer Group (NPAs and 90+ delinquencies of 2.70 percent of assets versus 0.59
percent for the Peer Group). The Savings Bank reported a lower level of loan
loss reserves as a percent of total loans (0.33 percent of loans for the Savings
Bank versus reserves of 0.70 percent for the Peer Group). And finally, the
Savings Bank reported a substantially less favorable level of loan loss reserves
as a percent of NPAs and 90+ delinquencies (reserves of 6.18 percent of NPAs and
90+ delinquencies versus 123.84 percent for the Peer Group). The Savings Bank
recorded a higher level of chargeoffs during the trailing twelve month period
covered in Table 3.5. Notwithstanding the generally favorable credit history
experienced by the Savings Bank in recent years, the less favorable asset
quality measures reported by Pennsylvania Savings' versus the Peer Group
represent an unfavorable comparison in terms of overall credit quality of the
Savings Bank's balance sheet.
Interest Rate Risk
Table 3.6 reflects the relative interest rate risk exposure of
Pennsylvania Savings and the Peer Group companies. The data indicates cumulative
one year gap to assets ratios of negative 8.3 percent and negative 4.2 percent
for Pennsylvania Savings and the Peer Group, respectively. Since not all of the
Peer Group members reported gap measures, and since each institution utilizes
difference prepayment/decay rate assumptions for calculating its gap measures,
the significance of the comparable gap analysis was diminished. Based on
available data, the Savings Bank's gap measure was less favorable than the Peer
Group on average. The negative gap measure would serve to depress net interest
income in a rising interest rate environment.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.5
Credit Risk Measures and Related Information
Comparable Institution Analysis
As of June 30, 1997 or Most Recent Date Available
<TABLE>
<CAPTION>
NPAs & Rsrves/
REO/ 90+Del/ NPLs/ Rsrves/ Rsrves/ NPAs & Net Loan NLCs/
Institution Assets Assets Loans Loans NPLs 90+Del Chargoffs Loans
- ----------- ------- ------ ------ ------- ------- ------- --------- -----
(%) (%) (%) (%) (%) (%) ($000) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank 0.38 2.70 4.63 0.33 14.61 6.18 133 0.21
SAIF-Insured Thrifts 0.28 0.79 0.85 0.81 176.09 131.36 398 0.16
State of PA 0.25 0.77 0.76 0.97 190.18 129.52 254 0.19
Comparable Group Average 0.05 0.59 0.85 0.70 133.98 123.84 30 0.06
Comparable Group
- ----------------
GAF GA Financial Corp. of PA 0.00 0.12 0.32 0.43 132.49 132.49 6 -0.02
HRBF Harbor Federal Bancorp of MD 0.00 0.05 0.07 0.28 379.63 379.63 0 0.00
LARL Laurel Capital Group of PA 0.00 0.43 0.62 1.31 212.35 212.35 181 -0.01
PEEK Peekskill Fin. Corp. of NY 0.12 1.22 2.33 1.35 57.97 27.98 0 0.00
PWBK Pennwood SB of PA 0.07 0.98 1.00 1.03 103.30 57.43 37 0.59
PHFC Pittsburgh Home Fin. of PA 0.20 1.60 2.07 0.76 36.82 32.18 40 0.10
PRBC Prestige Bancorp of PA 0.01 0.30 0.44 0.38 87.47 85.33 0 0.00
SFED SFS Bancorp of Schenectady NY 0.05 0.73 0.87 0.57 66.24 57.17 34 -0.04
THRD TF Financial Corp. of PA 0.03 0.33 0.61 0.62 102.59 92.84 2 0.00
WHGB WHG Bancshares of MD 0.00 0.15 0.18 0.29 160.96 160.96 0 0.00
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
Table 3.6
Pennsylvania Savings Bank
Comparative Interest Rate Measures
<TABLE>
<CAPTION>
Non-Earn. One
Equity/ IEA/ Assets/ Year
Institution Assets IBL Assets GAP
- ----------- ------- ---- --------- ----
(%) (%) (%) (%)
<S> <C> <C> <C> <C>
Pennsylvania Savings Bank 11.7 111.2 3.9 -8.3
Peer Group Average 14.6 117.1 2.6 -4.2
Comparable Group
GA Financial Corp of PA 15.0 117.4 1.8 -13.4
Harbor Federal Bancorp of MD 12.9 114.6 2.5 na
Laurel Capital Group of PA 10.0 112.1 1.6 -5.6
Peekskill Fin Corp of NY 25.7 136.4 1.1 na
Pennwood SB of PA 17.5 119.3 3.8 4.0
Pittsburgh Home Fin of PA 10.8 112.4 2.2 3.0
Prestige Bancorp of PA 11.1 110.9 2.6 -19.6
SFS Bancorp of Schenectady NY 12.5 113.8 2.6 na
TF Financial Corp of PA 9.8 110.5 3.6 6.3
WHG Bancshares of MD 20.7 123.9 4.3 na
</TABLE>
With regard to the other measures, the Savings Bank's interest rate
risk appears slightly less attractive than the Peer Group. Pennsylvania Savings
operated with a lower level of interest-free capital than the Peer Group, which
was a key factor in the lower IEA/IBL ratio maintained by the Savings Bank
relative to the Peer Group's ratio (111.2 percent versus 117.1 percent for the
Peer Group). The Savings Bank's lower capital and IEA/IBL ratios both indicate
that increases in funding costs should generally have a more detrimental impact
on Pennsylvania Savings' net interest margin than the average net interest
margin of the Peer Group companies. However, the Savings Bank's capital ratio
and IEA/IBL ratio will increase on a post conversion basis. The Savings Bank
maintained a greater level of non-interest earning assets than the Peer Group,
indicating a slight disadvantage from fewer assets repricing upward in response
to higher interest rates. Overall, on a pro forma basis, after considering
current earnings and capital ratios, we believe that Pennsylvania Savings
operates with a comparable degree of risk versus the Peer Group in terms of
interest rate risk, and both Pennsylvania Savings and the Peer Group have
limited interest rate risk in their earnings.
<PAGE>
Summary
Based on the above analysis and the criteria employed by RP Financial
in the selection of the companies for the Peer Group, RP Financial concluded
that the Peer Group forms a reasonable basis for determining the pro forma
market value of the Savings Bank. Such general characteristics as regional
market area, asset size, capital position, interest-earning asset composition,
funding composition, core earnings measures and loan composition all tend to
support the reasonability of the Peer Group from a financial standpoint.
<PAGE>
IV. VALUATION ANALYSIS
Introduction
This chapter presents the valuation analysis, consistent with current
valuation methodology promulgated by the OTS, and key valuation factors and
assumptions considered in estimating pro forma market value of the common stock
to be issued in conjunction with the conversion of the MHC. The MHC is
converting to a Pennsylvania stock corporation pursuant to the Plan. The
valuation has been prepared utilizing the same general pro forma valuation
methodology that has been used in the valuation of standard conversions since
1983. The pro forma valuation methodology has been modified to reflect the
unique characteristics of the conversion of the MHC, specifically the fact that
the MHC will be selling only a partial ownership interest in the Conversion
Offerings, instead of a 100 percent ownership interest as would be the case in a
standard conversion.
Appraisal Guidelines
The OTS appraisal guidelines, originally released in October 1983,
specify the methodology for estimating the pro forma market value of an
institution. The methodology included: (1) selection of a peer group of
comparable seasoned publicly-traded institutions whose pricing is not distorted
due to a variety of factors; (2) a fundamental analysis of the subject company
to the peer group; and (3) a pro forma valuation analysis of the subject company
based on the market pricing of the peer group as of the date of valuation. The
amended valuation guidelines also limit the amount of a new issue discount which
may be incorporated into the valuation and thereby curtail the potential price
appreciation in the after-market.
RP Financial's valuation analysis complies with the October 1983 OTS
appraisal guidelines as revised on October 21, 1994, incorporating a
"fundamental analysis" relative to the Peer Group and a "technical analysis" of
final conversion pricing and trading levels of recently completed conversions
(given the emphasis of limiting after-market appreciation). It should be noted
that such analysis cannot possibly fully account for all the market forces which
impact after-market trading activity and pricing characteristics of a stock on a
given day.
The pro forma market value determined herein is a preliminary value for
the Holding Company's to-be-issued stock. Throughout the conversion process, RP
Financial will: (1) review changes in the Savings Bank's operations and
financial condition; (2) monitor the Savings Bank's operations and financial
condition relative to the Peer Group to identify any fundamental changes; (3)
monitor the external factors affecting value including, but not limited to,
local and national economic conditions, interest rates, and the stock market
<PAGE>
environment, including the market for thrift stocks; and (4) monitor pending
initial and second step conversion offerings (including those in the offering
phase) both regionally and nationally. If material changes should occur during
the conversion process, RP Financial will prepare updated valuation reports
reflecting such changes and their related impact on value, if any, over the
course of the conversion process. RP Financial will also prepare a final
valuation update at the closing of the conversion offering to determine if the
preliminary range of value continues to be appropriate.
The appraised value determined herein is based on the current market
and operating environment for the Savings Bank and for all thrifts. Subsequent
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 major world events), which may occur from time to time
(often with great unpredictability), may materially impact the market value of
all thrift stocks, including Pennsylvania Savings, or Pennsylvania Savings'
value alone. To the extent a change in factors impacting the Savings Bank's
value can be reasonably anticipated and/or quantified, RP Financial has
incorporated the estimated impact into its analysis.
Valuation Analysis
A fundamental analysis discussing similarities and differences relative
to the Peer Group was presented in Chapter III. The following sections summarize
such differences between the Savings Bank and the Peer Group and how those
differences affect the pro forma valuation. Emphasis is placed on the specific
strengths and weaknesses of the Savings Bank relative to the Peer Group in such
key areas as financial condition, profitability, growth and viability of
earnings, asset growth, primary market area, dividends, liquidity of the issue,
marketing of the issue, management, and the effect of government regulations
and/or regulatory reform. We have also considered the market for thrift stocks,
and in particular new issues, including second step conversions, to assess the
impact on value of Pennsylvania Savings coming to market at this time.
1. Financial Condition
The financial strength of an institution is an important determinant in
pro forma market value, because investors typically look to such factors as
liquidity, capital, asset composition and quality, and funding sources in
assessing investment attractiveness. The similarities and differences in the
Savings Bank's financial strength can be summarized as follows:
o Overall Asset/Liability Composition. Residential assets, including
1-4 family permanent mortgage loans and MBS, funded by retail
deposits were the primary components of both Pennsylvania Savings'
and the Peer Group's balance sheet. The Savings Bank maintains a
significantly larger portfolio of cash and investments, which would
generally serve to reduce
<PAGE>
overall credit risk in the Savings Bank relative to the Peer Group
(see "Credit Quality" discussion below), and the Savings Bank's loan
portfolio is slightly more diversified into commercial real estate
and multi-family loans (i.e., greater concentration of
non-residential assets) than the Peer Group's average balance sheet.
Notwithstanding the differences in the major balance sheet
categories, both the Savings Bank's and the Peer Group's balance
sheets were reflective of a traditional thrift, with a high
concentration of portfolio loans. Accordingly, the overall A/L
composition was considered comparable for valuation purposes.
o Credit Quality. The Savings Bank recorded significantly less
favorable credit quality measures relative to the Peer Group in terms
of NPAs and 90+ delinquencies to assets (2.70 percent of assets
versus 0.59 percent for the Peer Group) and in less favorable reserve
coverage ratios than the Peer Group (6.18 percent reserve coverage of
NPAs and 90+ delinquencies versus 123.84 percent of NPAs and 90+
delinquencies for the Peer Group). Although these weaknesses are
offset somewhat by the Savings Bank's greater concentration of cash
and investments, Pennsylvania Savings operates with less favorable
credit quality measures than the Peer Group. The Savings Bank's lower
credit quality was considered in the valuation analysis.
o Balance Sheet Liquidity. The Savings Bank operated with a
significantly higher balance of cash and investment securities than
the Peer Group (41.5 percent of assets versus 22.5 percent for the
Peer Group). Additionally, both Pennsylvania Savings and the Peer
Group appear to have adequate borrowing capacity (which could be used
in an emergency to cover liquidity shortfalls). Notwithstanding that
both the Savings Bank and the Peer Group maintain adequate liquidity,
we concluded that the Savings Bank's greater level of liquid assets
results in more favorable balance sheet liquidity characteristics
than the Peer Group.
o Funding Liabilities. The Savings Bank and the Peer Group rely to a
comparable extent on deposits as the primary interest-bearing source
of funds. The Peer Group utilizes a moderate amount of borrowings as
a supplemental funding source, while the Savings Bank's deposit base
was considered more attractive in light of its lower interest costs
and greater concentration of passbook accounts. For purposes of
valuation, RP Financial concluded that Pennsylvania Savings' funding
liability composition was more favorable than that of the Peer Group.
o Tangible Capital. The Savings Bank operates with a lower
pre-conversion tangible capital level than the Peer Group, 11.7
percent of assets versus 14.6 percent, respectively. This
disadvantage will be substantially addressed as a result of the stock
offering and no valuation adjustments were warranted for the Savings
Bank's tangible capital level.
The Savings Bank and the Peer Group exhibited comparable
asset-liability composition, and on a pro forma basis the Savings Bank's
tangible capital should be comparable to or exceed that of the Peer Group.
Notwithstanding these similarities, the Savings Bank has significantly less
favorable credit quality measures in terms of NPAs and reserve coverage. This
disadvantage is offset somewhat by the Savings Bank's greater balance sheet
liquidity and more favorable funding liability composition. Overall, we
concluded that a moderate downward valuation adjustment is warranted for
financial condition.
<PAGE>
2. Profitability, Growth and Viability of Earnings
Earnings are an important factor in determining pro forma market value,
as the level and risk characteristics of an institution's earnings stream and
the prospects and ability to generate future earnings are typically heavily
factored into an investment decision. The historical income statements of
Pennsylvania Savings and the Peer Group were generally reflective of traditional
thrift operating strategies, with net interest income and operating expenses
being the major determinants of their respective core earnings. The specific
factors considered in the valuation include:
o Reported Earnings. The Savings Bank recorded lower earnings on a ROAA
basis (0.02 percent of average assets versus 0.67 percent for the
Peer Group). Although the difference will be reduced somewhat by
reinvestment of the net proceeds of the conversion, Pennsylvania
Savings' earnings disadvantage is structural, not dependent upon
non-recurring items, and the lower level of reported earnings is
therefore a disadvantage relative to the Peer Group.
o Core Earnings. The Savings Bank's comparable net interest income
(3.43 percent of average assets versus 3.51 percent for the Peer
Group) and advantage in non-interest income (0.91 percent of average
assets versus 0.19 percent) is offset by significantly higher
operating expenses (3.50 percent for the Savings Bank versus 2.17
percent for the Peer Group), resulting in a lower expense coverage
spread of 0.84 percent of average assets for Pennsylvania Savings
versus 1.53 percent for the Peer Group. We would expect this
disadvantage to be offset somewhat by the reinvestment of the
conversion proceeds and the increased interest income resulting from
the Savings Bank's lending activities in future periods, but the
Savings Bank is currently at a disadvantage in core earnings.
o Interest Rate Risk. The Savings Bank operates with a slightly greater
level of interest rate risk relative to the Peer Group. The Savings
Bank's one year asset-liability gap ratio of negative 8.3 percent was
less favorable than the comparable measure for the Peer Group of
negative 4.2 percent. Other measures of interest rate risk, such as
capital ratios, the IEA/IBL ratio and the level of non-interest
earning assets to total assets are at a slight disadvantage relative
to the Peer Group, although such disadvantage will be offset somewhat
by the impact of the conversion. RP Financial concluded that, on a
pro forma basis, Pennsylvania Savings' earnings will be exposed to a
comparable extent to fluctuating interest rates.
o Credit Quality. The Savings Bank recorded less favorable levels of
NPAs versus the Peer Group and lower reserve coverage ratios (i.e.,
reserves as a multiple of NPAs and NPLs). For these reasons, RP
Financial concluded that Pennsylvania Savings' earnings are more
exposed to future credit losses than the Peer Group.
o Earnings Growth Potential. First, the Savings Bank maintains a
greater level of liquid cash and investments than the Peer Group. We
considered the Savings Bank's higher balance sheet liquidity to be an
advantage relative to the Peer Group in terms of earnings growth
potential, because the Savings Bank has more liquid funds that could
be deployed into higher current yielding investments (the Peer Group
on average does not have the balance sheet liquidity to take
advantage of current high interest rates to increase its earnings).
Second, we expect that the net proceeds of the stock conversion will
enhance the advantage in earnings growth potential discussed above.
Third, although the Savings Bank's traditional market area in south
Philadelphia provides limited opportunities locally to pursue asset
growth, the Savings Bank's business plan incorporates growth by
greatly expanding mortgage banking operations
<PAGE>
in the Philadelphia MSA and gaining greater access to the faster
growth markets in the suburbs. (The Savings Bank is currently in the
process of implementing these strategies.) On balance, we concluded
that the Savings Bank's earnings growth potential is more favorable
than that of the Peer Group, based on the Savings Bank's greater
level of cash and investments and the potential to access the
surrounding markets to pursue growth.
Overall, RP Financial concluded that Pennsylvania Savings' disadvantage
in core earnings strength was compounded by the Savings Bank's less favorable
credit quality measures. These disadvantages are offset by the greater earnings
growth potential of Pennsylvania Savings. Overall, these factors caused RP
Financial to conclude that a slight downward adjustment was warranted for
profitability, growth and viability of earnings.
3. Asset Growth
The Savings Bank's historical recent asset growth has been driven by
the relocation of the main office to Center City and by stepped up lending
activity consistent with the community bank strategy. Although recent growth
trends are less favorable than those of the Peer Group companies, on average,
the Savings Bank has adopted a business plan that contemplates continued future
growth with such growth derived from increasing the Savings Bank's mortgage
banking activities in the suburbs and eventually branching into markets adjacent
to south Philadelphia. We do not have access to comparable future plans of the
Peer Group companies, i.e. growth projections, but have concluded based on our
judgment and experience that the Savings Bank's future plans (and its ability to
access a large and healthy market like the Philadelphia MSA) warrant a slight
upward adjustment to the valuation for purposes of asset growth.
4. Primary Market Area
The general condition of a financial institution's primary market area
has a significant impact on value, as future success is in part dependent upon
opportunities for profitable activities in the local market. Pennsylvania
Savings' primary market area in the Philadelphia metropolitan area is a large
diversified market, with a broad distribution of employers and industries. Based
on its size and diversity, the Savings Bank's primary market can be expected to
continue to provide adequate opportunities for retail deposit gathering and
lending at the Savings Bank's current level, as well as support any growth
strategy adopted on a post-conversion basis.
The primary market served by Pennsylvania Savings, the Philadelphia MSA
is larger than all of the Peer Group companies (see Table 4.1) in terms of total
population, implying more favorable opportunities for deposit and lending growth
for Pennsylvania Savings, on average. Although historical and projected
population growth is lower for the Savings Bank's primary market area in
Philadelphia County
<PAGE>
Table 4.1
Peer Group Market Area Comparative Analysis
<TABLE>
<CAPTION>
Population Proj.
------------------ Pop. 1990-97 1997-2002 Median
Institution County 1990 1997 2002 % Change % Change Age
- ----------- ------ ---- ---- ---- -------- --------- ------
(000) (000)
<S> <C> <C> <C> <C> <C> <C> <C>
GA Financial Corp. of PA Allegheny 1,336 1286 1,252 -3.8% -2.6% 38.8
TF Financial Corp of PA Bucks 541 585 615 8.0% 5.1% 36.0
Pittsburgh Home Fin. of PA Allegheny 1,336 1286 1,252 -3.8% -2.6% 38.8
Harbor Federal Bancorp of MD Baltimore 692 721 741 4.2% 2.8% 37.0
Laurel Capital Group of PA Allegheny 1,336 1286 1,252 -3.8% -2.6% 38.8
Peekskill Fin Corp of NY Westchester 875 896 910 2.4% 1.6% 37.3
SFS Bancorp of NY Schenectady 149 147 145 -1.7% -1.2% 37.0
Prestige Bancorp of PA Allegheny 1,336 1286 1,252 -3.8% -2.6% 38.8
WHG Banchshares of MD Baltimore 692 721 741 4.2% 2.8% 37.0
Pennwood SB of PA Allegheny 1,336 1286 1,252 -3.8% -2.6% 38.8
Averages: 963 950 941 -0.2% -0.2% 37.8
Medians: 1,106 1,091 1,081 -2.7% -1.9% 38.1
Pennsylvania SB of PA Philadelphia County 1,586 1,458 1,422 -8.0% -2.5% 35.2
Philadelphia MSA 4,922 4,956 5,031 0.7% 1.5% 35.8
Per Capita Income
--------------------
Deposit
% State Market
Institution Amount Average Share(1)
- ----------- ------ -------- ---------
<S> <C> <C> <C>
GA Financial Corp. of PA 18,708 103.9% 1.5%
TF Financial Corp of PA 23,879 132.6% 1.9%
Pittsburgh Home Fin. of PA 18,708 103.9% 0.3%
Harbor Federal Bancorp of MD 21,680 102.1% 0.6%
Laurel Capital Group of PA 18,708 103.9% 0.5%
Peekskill Fin Corp of NY 27,713 149.8% 0.7%
SFS Bancorp of NY 16,937 91.5% 6.0%
Prestige Bancorp of PA 18,708 103.9% 0.3%
WHG Banchshares of MD 21,680 102.1% 0.5%
Pennwood SB of PA 18,708 103.9% 0.1%
20,543 109.7% 1.2%
18,708 103.9% 0.6%
Pennsylvania SB of PA $16,210 90.0% 0.4%
$21,830 121.2% 0.2%
</TABLE>
(1) Total institution deposits in headquarters county as percent of total county
deposits.
Sources: CACI, Inc, SNL Securities
<PAGE>
(i.e., 2.5 percent shrinkage projected through 2002 for Philadelphia county
versus 0.2 percent shrinkage projected on average for the Peer Group), the size
and diversity of the Philadelphia market versus to Peer Group average
compensates for the slower growth. Including the population from the broader
market constituting the Philadelphia MSA, the Savings Bank's market area
exhibits a projected growth rate of 1.5 percent through 2002, a figure that
compares attractively with the Peer Group. Pennsylvania Savings and the Peer
Group, on average, operate in markets with comparable median ages. Income levels
in Philadelphia County (the Savings Bank's primary market) were lower than the
Peer Group average but the MSA was comparable. Although these measures are
comparable, we concluded that Pennsylvania Savings has a slight advantage
relative to the Peer Group in the potential for future growth in the primary
market area, based on the total size of the market, the healthy per capita
income, and the diversity of the market area. In terms of competition,
Pennsylvania Savings holds a much smaller deposit market share in its primary
market area than exhibited by the Peer Group. We considered the larger size and
diversity of the market and comparable demographics in other measures to warrant
a slight upward adjustment to the Savings Bank's valuation.
5. Dividends
The Holding Company has not specified a dividend policy, indicating
that payment of cash dividends will depend on a number of factors, including the
amount of net proceeds retained by the Holding Company, investment opportunities
available to the Holding Company or the Savings Bank, capital requirements,
regulatory limitations, the Holding Company's and the Savings Bank's financial
condition and results of operations, tax considerations and general economic
conditions. As publicly-traded thrifts' capital levels and profitability have
improved and as weak institutions have been resolved, the proportion of
institutions with cash dividend policies has increased. All ten institutions in
the Peer Group presently pay regular cash dividends, with implied dividend
yields ranging from 0.68 percent to 2.53 percent. The average dividend yield on
the stocks of the Peer Group institutions was 1.71 percent as of September 19,
1997, representing an average earnings payout ratio of 34.72 percent. As of
September 19, 1997, approximately 84 percent of all publicly-traded SAIF-insured
thrifts have adopted cash dividend policies (see Exhibit IV-1), exhibiting an
average yield of 1.92 percent and an average payout ratio of 41.9 percent. The
dividend paying thrifts generally maintain higher than average profitability
ratios, facilitating their ability to pay cash dividends, which supports a
market pricing premium on average relative to non-dividend paying thrifts. The
absence of a stated cash dividend policy by Pennsylvania Savings suggests a
valuation discount relative to the Peer Group (that all pay dividends); however,
Pennsylvania Savings will have sufficient capital and earnings to support a cash
dividend at a level comparable to the Peer Group (i.e., comparable dividend
paying capacity) and we thus concluded that the Savings Bank's dividend policy
warrants just a slight downward adjustment in the valuation.
<PAGE>
6. Liquidity of the Shares
The Peer Group is by definition composed of companies that are traded
in the public markets, all of which trade on the NASDAQ system. Typically, the
number of shares outstanding and market capitalization provides an indication of
how much liquidity there will be in a particular stock. The market
capitalization of the Peer Group companies ranged from $10 million to $152
million as of September 19, 1997, with an average market value of $48 million.
The shares outstanding of the Peer Group members ranged from 580,000 to 8.0
million, with average shares outstanding of approximately 2.5 million. The
Savings Bank's pro forma market value will be materially lower than the Peer
Group average, and pro forma shares outstanding will be comparable to or
slightly lower than the Peer Group average -- both factors which would suggest
lower liquidity in the shares of Pennsylvania Savings stock. At the same time,
it is anticipated that Pennsylvania Savings' stock will be traded on the NASDAQ
National Market System, which will provide adequate liquidity to the shares.
Accordingly, in general, we anticipate that there will be a relatively liquid
trading market for the Savings Bank's stock, which will be similar but slightly
less attractive than the stock liquidity characteristics of the Peer Group
companies on average. We applied a slight downward adjustment for this factor.
7. Marketing of the Issue
We believe that several separate markets exist for thrift stocks coming
to market such as Pennsylvania Savings: (A) the after-market for public
companies, in which trading activity is regular and investment decisions are
made based upon financial condition, earnings, capital, ROE and dividends; (B)
the new issue market in which converting thrifts are evaluated on the basis of
the same factors but on a pro forma basis without the benefit of a stock trading
history and reporting quarterly operating results as a publicly-held company;
(C) the market for second step conversions by MHCs; (D) the acquisition market
for thrift franchises in the Commonwealth of Pennsylvania; and (E) the market
for the public stock of Pennsylvania Savings. All of these markets were
considered in the valuation of the Savings Bank's second step conversion.
A. Public Market
The value of publicly-traded thrift stocks is easily
measurable, and is tracked by most investment houses and related organizations.
Exhibit IV-1 provides pricing and financial data on all publicly-traded thrifts.
In general, thrift stock values react to market stimuli such as interest rates,
inflation, perceived industry health, projected rates of economic growth,
regulatory issues and stock market conditions in general. Exhibit IV-2 displays
historical stock market trends for various indices and includes historical stock
price index values for thrifts and commercial banks. Exhibit IV-3 displays
historical stock price indices for thrifts only.
<PAGE>
In terms of assessing general stock market conditions, the
stock market has generally trended higher over the past year. The stock market
rose in early-September 1996, as investors reacted positively to the inflation
data contained in the August employment report. Oil stocks sustained the upward
trend in the stock market in early-September 1996, as renewed tension between
the U.S. and Iraq pushed crude oil prices to their highest level in five years.
Both bond and stock prices surged higher as most of the economic data for August
1996 indicated that the economy was slowing down and investors became more
optimistic that the Federal Reserve would not raise interest rates in September
1996.
The Federal Reserve's decision not to raise interest rates at
its September 1996 meeting, and generally healthy third quarter earnings results
sustained the upward momentum in the stock market during the beginning of the
fourth quarter. Favorable inflation data and lower interest rates further
spurred the upward trend in the stock market prior to the election. Investors
were cheered by the "status quo" election results, as stocks rallied strongly
immediately following the election with the DJIA posting ten consecutive
advances through mid-November. Economic stability and a rising bond market
sustained the stock market rally through the end of November. For the entire
month of November, the DJIA increased 492.3 points, or 8.2 percent. Following
the rapid rise in the stock market during November, stocks retreated during the
first half of December. Profit taking, concern about speculative excesses in the
stock market and higher interest rates all contributed to the decline in the
stock market.
The stock market resumed an upward trend during the end of 1996
and the first three weeks of 1997, with the DJIA establishing several new highs
in the process. Factors contributing to the rally in the stock market included
the Federal Reserve's decision to leave rates unchanged at its December meeting,
economic data which reflected moderate growth and low inflation, and favorable
fourth quarter earnings particularly in the technology sector. However, a
disappointing fourth quarter earnings report by IBM ignited a sell-off in the
stock market in late-January. Higher interest rates extended the downturn, as
the 30-year bond approached 7.0 percent at the end of January. A high degree of
market volatility was evident throughout most of February 1997, reflecting
concern over speculative excesses in the stock market; particularly, as the DJIA
closed above the 7000 mark in mid-February. Profit taking, growing expectations
of a correction and comments by the Federal Reserve Chairman pulled the market
lower in late-February.
Following a downturn in late-February 1997, the market
recovered in early-March. Despite increasing expectations of an interest rate
hike by the Federal Reserve, the Dow Jones Industrial Average ("DJIA") closed to
a new record high of 7085.16 on March 11, 1997. However, an upward revision to
the January retail sales figure triggered a one day sell-off in stocks and bonds
on March 13, 1997, as the stronger than expected growth heightened expectations
of an interest rate increase by the Federal Reserve. Unease over higher interest
rates, profitability concerns in the technology sector and litigation concerns
for tobacco stocks
<PAGE>
pulled the stock market lower in mid-March. As expected, the Federal Reserve
increased the rate on short-term funds by 0.25 percent at its late-March
meeting. Following the rate increase, the sell-off in the stock market became
more severe amid further signs of an accelerating economy. Stocks bottomed-out
on news of a stronger than expected rise in core producer prices for March, with
the DJIA closing at 6391.69 on April 11, 1997, or 9.8 percent below its all-time
high recorded a month ago.
Some favorable first quarter earnings reports and news of a
possible settlement by tobacco companies to resolve the threat of liability
lawsuits provided for a modest recovery in the stock market in mid-April 1997.
In late-April, the release of economic data which indicated mild inflationary
pressures furthered the rally in bond and stock prices. News of a budget
agreement and a favorable ruling for tobacco companies sent the stock market
soaring to record highs in early-May. Mixed economic data and the Federal
Reserve's decision to leave its target for the federal-funds rate unchanged at
its May meeting sustained a positive trend in the stock market through the end
of May. Profit worries caused a sell-off in high-technology stocks in
early-June, while declining interest rates served to stabilize the broader
market. The stock market rose during late June, July and early August based on
positive consumer confidence, little sign of inflation with continued low
unemployment rates, and continued strong second quarter earnings reports. After
reaching an all time high of 8259.31 on August 6, 1997, the DJIA suffered
declines of 157 points on August 8, 101 points on August 12, and 247 points on
August 15, 1997 to close at 7694.66 as of that date, a decline of 6.8 percent in
less than two weeks. Through September 5, 1997, the stock market has followed a
fluctuating trend, as the market has reacted to investor fears of inflation,
public statements regarding the health of the economy by regional federal
reserve bank presidents, and an overall perception that the market had reached
excessive levels, leading to certain profit-taking. On September 19, 1997, the
DJIA closed at 7917.3, an increase of 34 percent from one year ago.
Similar to the overall stock market, the market for thrift
stocks has generally been favorable during the past twelve months, as a bullish
outlook on the financial institution sector in general served to bolster prices.
Thrift stocks settled into a narrow trading range in late-August 1996 and
early-September 1996, as higher interest rates dampened interest in the thrift
sector. For the balance of September, trading activity in thrift stocks was
somewhat mixed. Higher thrift prices were recorded in mid-September, as the
yield on the 30-year U.S. Treasury bond briefly dropped below 7.0 percent.
However, the rally in financial services stocks faltered in late-September,
reflecting renewed fears about higher interest rates and rising bad debt on
credit cards.
Thrift prices generally moved higher during October and
November 1996. The upward trend in thrift prices was supported by lower interest
rates, with the slow down in economic growth pushing the 30-year U.S. bond rate
below 6.5 percent during the second half of November. Investors also reacted
positively to the SAIF rescue legislation, in light of the reduction in deposit
insurance premiums to be paid by SAIF-insured
<PAGE>
thrifts following the one time special assessment. Similar to the overall stock
market, thrift prices traded lower in early-December. Profit taking and
expectations of higher interest rates were factors contributing to the pull back
in thrift issues.
Bullish sentiment for thrift stocks heightened at the beginning
of 1997, as investors reacted positively to the favorable inflation data and
generally strong fourth quarter earnings. The rally in thrift issues was driven
by the large California institutions, reflecting expectations that there would
be further consolidation among the large California thrifts. The acquisition
speculation for the large California thrifts became a reality in mid-February,
as H.F. Ahmanson's unsolicited offer to acquire Great Western Financial sent the
SNL Index soaring in mid-February. Stable interest rates and acquisition
activity supported higher thrift prices in early-March, with the SNL Index
posting a new high of 579.1 on March 11, 1997. Like the stock market in general,
the peak in thrift prices was followed by a sharp sell-off in mid-March. In
fact, interest-rate sensitive issues were among the sectors hardest hit by the
revised January retail sales report, as the 30-year bond approached 7.0 percent.
Interest-rate sensitive issues continued to experience selling pressure in
late-March and early-April, as signs of a strengthening economy pushed interest
rates higher. The sell-off in thrift stocks culminated on April 11, 1997, as
interest rates increased sharply on news of the higher than expected rise in
core producer prices for March. Thrift prices edged modestly higher in
mid-April, reflecting generally favorable first quarter earnings and a slight
decline in interest rates following the release of economic data which showed
that inflation was low. Favorable inflation data and the budget agreement
provided for a more substantial rally in thrift stocks in late-April and
early-May, as interest-rate sensitive issues were bolstered by a decline in
interest rates. Thrift stocks continued to trend higher through the second and
third quarters of 1997, based on the improved interest-rate outlook, consumer
confidence and the overall rise in the stock market. The SNL Index for all
publicly-traded thrifts closed at 725.8 on September 19, 1997, an increase of 74
percent from one year ago.
B. The New Issue Market
In addition to thrift stock market conditions in general, the
new issue market for converting thrifts is also an important consideration in
determining the Savings Bank's pro forma market value. There was generally
strong interest in converting issues during the second half of 1996, as most
offerings experienced oversubscriptions. Fewer offerings, more attractive
pricing, lower interest rates, and the general positive trend in thrift prices
were among the most prominent factors contributing to the investor interest
shown for converting thrift issues. The favorable market environment for
converting thrift issues has generally been sustained during the first three
quarters of 1997 and there has been an increase in the number of conversion
offerings completed during the past three months in comparison to previous
periods. As shown in Table 4.2, the median one week change in price for
offerings completed during the latest three months equaled positive 46.3
percent.
<PAGE>
-------------------------------------------------------------------------------
Table 4.2
Recent Conversions (Last Three Months)
Conversion Pricing Characteristics: Sorted Chronologically
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Information Pre-Conversion Data
- ------------------------------------------------------------------------------------------------- Offering
Financial Info. Asset Quality Information
------------------------------------------------------------------
Conversion Equity/ NPAs/ Res. Gross % of Exp./
Institution State Date Ticker Assets Assets Assets Cov. Proc. Mid. Proc.
- ----------- ----- ---- ------ ------ ------ ------ --- ----- ---- ----
($Mil) (%) (%)(2) (%) ($Mil) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Citizens Bancorp IN 09/19/97 P.Sheet $46 12.28% 0.45% 84% 10.6 132% 4.6%
WSB Holding Company PA 08/29/97 P.Sheet 33 6.04% 2.34% 26% $3.3 132% 8.5%
Bayonne Bancshares (8) NJ 08/22/97 FSNJ 577 8.33% 0.81% 53% 48.7 132% 3.8%
FirstSpartan Fin. Corp. SC* 07/09/97 FSPT 388 11.81% 0.75% 44% 88.6 132% 1.6%
GSB Financial Corp. NY 07/09/97 GOSB 96 12.68% 0.07% 188% 22.5 132% 4.1%
FirstBank Corp. ID* 07/02/97 FBNW 138 8.00% 0.99% 68% 19.8 132% 3.5%
Montgomery Fin. Corp.(8) IN 07/01/97 MONT 94 9.83% 0.91% 20% 11.9 132% 4.5%
Community First Bankg. Corp. GA 07/01/97 CFBC 366 7.02% 1.68% 40% 48.3 132% 2.9%
First Robinson Fin. Corp.(9) IL 06/30/97 FRFC 72 6.78% 0.63% 89% 8.6 132% 4.7%
Security Bancorp TN 06/30/97 P.Sheet 46 5.46% 0.06% NM 4.4 132% 6.9%
Sistersville Bancorp WV 06/30/97 P.Sheet 27 17.91% 0.31% 198% 6.6 110% 6.8%
Averages: $184 9.39% 0.86% 81% $26.3 130% 4.7%
Medians: 95 8.17% 0.78% 53% $15.9 132% 4.3%
Averages, Excluding 2nd Steps $146 9.46% 0.85% 93% 25.3 130% 4.9%
Medians, Excluding 2nd Steps $84 7.51% 0.69% 68% $14.2 132% 4.4%
- ------------------------------------------------------------------------------------------------------------
Institutional Information Insider Purchases Pro Forma Data
- ------------------------------------------------------------------------------------------------------------
Pricing Ratios(4)
----------------------------------------------------
Benefit Plans
Conversion Recog. Mgmt.
Institution State Date Ticker ESOP Plans & Dirs. P/TB P/E(5) P/A
- ----------- ----- ---- ------ ---------------------- ---- ----- ---
(%) (%) (%)(3) (%) (x) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Citizens Bancorp IN 09/19/97 P.Sheet 8.0% 4.0% 16.1% 72.9% 14.8 14.8
WSB Holding Company PA 08/29/97 P.Sheet 8.0% 4.0% 31.0% 71.4% 16.6 9.2%
Bayonne Bancshares (8) NJ 08/22/97 FSNJ 8.0% 4.0% 10.0% 100.9% NM 14.6%
FirstSpartan Fin. Corp. SC* 07/09/97 FSPT 8.0% 4.0% 1.5% 72.4% 17.3 19.1%
GSB Financial Corp. NY 07/09/97 GOSB 8.0% 4.0% 2.6% 72.5% 22.5 19.6%
FirstBank Corp. ID* 07/02/97 FBNW 8.0% 4.0% 8.2% 71.4% 22.8 12.9%
Montgomery Fin. Corp.(8) IN 07/01/97 MONT 8.0% 4.0% 4.6% 89.1% 24.1 16.0%
Community First Bankg. Corp. GA 07/01/97 CFBC 8.0% 4.0% 1.0% 72.3% 24.5 11.9%
First Robinson Fin. Corp.(9) IL 06/30/97 FRFC 8.0% 4.0% 9.8% 71.4% 16.7 10.9%
Security Bancorp TN 06/30/97 P.Sheet 8.0% 4.0% 2.0% 72.0% 14.1 8.8%
Sistersville Bancorp WV 06/30/97 P.Sheet 8.0% 4.0% 5.4% 65.0% 18.9 20.6%
Averages: 8.0% 4.0% 7.6% 75.8% 19.7 14.3%
Medians: 8.0% 4.0% 5.0% 72.1% 18.9 13.7%
Averages, Excluding 2nd Steps 8.0% 4.0% 7.7% 71.1% 19.2 14.1%
Medians, Excluding 2nd Steps 8.0% 4.0% 4.0% 71.7% 18.1 12.4%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Information Post-IPO Pricing Trends
- ------------------------------------------------------------------------------------------------------------------------------------
Fin. Characteristics Closing Price:
-------------------- ------------------------------------
First After
Conversion IPO Trading % First
Institution State Date Ticker ROA TE/A ROE Price Day Chg. Week(6)
- ----------- ----- ---- ------ --- ---- --- ----- --- --- ------
(%) ($) ($) (%) ($) (%) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Citizens Bancorp IN 09/19/97 P.Sheet 1.1% 46.3% 2.4% $10.00 $14.00 40.0% $14.25
WSB Holding Company PA 08/29/97 P.Sheet 0.6% 12.9% 4.3% 10.00 13.50 35.0% 14.50
Bayonne Bancshares (8) NJ 08/22/97 FSNJ NM 14.4% NM 10.00 11.75 17.5% 11.88
FirstSpartan Fin. Corp. SC* 07/09/97 FSPT 1.1% 26.3% 4.2% 20.00 36.69 83.4% 36.62
GSB Financial Corp. NY 07/09/97 GOSB 0.9% 27.1% 3.2% 10.00 14.63 46.3% 14.75
FirstBank Corp. ID* 07/02/97 FBNW 0.6% 18.0% 3.1% 10.00 15.81 58.1% 15.56
Montgomery Fin. Corp.(8) IN 07/01/97 MONT 0.7% 17.9% 3.7% 10.00 11.13 11.2% 11.25
Community First Bankg. Corp. GA 07/01/97 CFBC 0.5% 16.4% 2.9% 20.00 31.88 59.4% 33.00
First Robinson Fin. Corp.(9) IL 06/30/97 FRFC 0.7% 15.2% 4.3% 10.00 14.50 45.0% 14.38
Security Bancorp TN 06/30/97 P.Sheet 0.6% 12.2% 5.1% 10.00 14.50 45.0% 15.00
Sistersville Bancorp WV 06/30/97 P.Sheet 1.1% 31.6% 3.4% 10.00 13.75 37.5% 13.88
Averages: 0.7% 19.2% 3.8% $12.00 $17.81 43.8% $18.08
Medians: 0.7% 17.2% 3.6% $10.00 $14.50 45.0% $14.63
Averages, Excluding 2nd Steps 0.7% 20.0% 3.8% $11.25 $19.41 51.2% $19.71
Medians, Excluding 2nd Steps 0.6% 17.2% 3.8% $10.00 $14.56 45.6% $14.88
- --------------------------------------------------------------------------------
Institutional Information Post-IPO Pricing Trends
- --------------------------------------------------------------------------------
Closing Price:
---------------
% After
Conversion First First %
Institution State Date Ticker Chg. Month(7) Chg.
- ----------- ----- ---- ------ --- ------- ---
(%) ($) (%)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Citizens Bancorp IN 09/19/97 P.Sheet 42.5%
WSB Holding Company PA 08/29/97 P.Sheet 45.0% $14.00 40.0%
Bayonne Bancshares (8) NJ 08/22/97 FSNJ 18.8% 12.38 23.8%
FirstSpartan Fin. Corp. SC* 07/09/97 FSPT 83.1% 35.63 78.1%
GSB Financial Corp. NY 07/09/97 GOSB 47.5% 14.38 43.8%
FirstBank Corp. ID* 07/02/97 FBNW 55.6% 17.88 78.8%
Montgomery Fin. Corp.(8) IN 07/01/97 MONT 12.5% 11.75 17.5%
Community First Bankg. Corp. GA 07/01/97 CFBC 65.0% 34.25 71.3%
First Robinson Fin. Corp.(9) IL 06/30/97 FRFC 43.8% 16.50 65.0%
Security Bancorp TN 06/30/97 P.Sheet 50.0% 15.25 52.5%
Sistersville Bancorp WV 06/30/97 P.Sheet 38.8% 14.00 40.0%
Averages: 46.0% $18.60 51.1%
Medians: 46.3% $14.81 48.1%
Averages, Excluding 2nd Steps 53.6% $20.23 58.7%
Medians, Excluding 2nd Steps 48.8% $15.88 58.8%
</TABLE>
Note: * - Appraisal performed by RP
Financial; "NT" - Not Traded;
"NA" - Not Applicable, Not Available. September 19, 1997
(1) Non-OTS regulated thrifts.
(3) As reported in prospectus.
(4) Does not take into account the adoption of SOP 93-6.
(5) Excludes impact of special SAIF assessment on earnings (6) Latest price if
offering less than one week old.
(7) Latest price if offering more than one week but less than one month old.
(8) Second-step conversions. (9) Simultaneously converted to commercial bank
charter.
- --------------------------------------------------------------------------------
<PAGE>
In examining the current pricing characteristics of
institutions completing their conversions during the last three months (see
Table 4.3), we note there exists a considerable difference in pricing ratios
compared to the universe of all publicly-traded thrifts. Specifically, the
current average P/B ratio of the conversions completed in the most recent three
month period of 120.37 percent reflects a discount of 28.5 percent from the
average P/B ratio of all publicly-traded savings institutions (equal to 147.78
percent), and the average core P/E ratio of 29.17 times reflects a premium of
51.6 percent from the all public average core P/E ratio of 19.24 times. The
pricing ratios of the better capitalized but lower earning recently converted
savings institutions (based on return on equity measures) suggest that the
investment community has determined to discount their stocks on a book basis
until the earnings improve through redeployment and leveraging of the proceeds
over the longer term.
In determining our valuation adjustment for marketing of the
issue, we considered trends in both the overall savings institution market and
the new issue market. The overall market for savings institution stocks is
considered to be positive, as savings institution stocks are currently
exhibiting pricing ratios that are in the range of historically high levels.
Investor interest in the new issue market has been favorable, as most of the
recently completed offerings have been oversubscribed and have recorded price
increases in initial post-conversion trading activity.
C. Secondary Step Conversion Market
There is a pronounced difference in the pricing of second step
conversions relative to full conversion offerings in which 100 percent of the
shares are issued. As noted in Table 4.4, during the past twelve months, the
median pro forma price/tangible book ratios of second step conversions exceeded
82 percent, as compared to the median price/tangible book of conversions over
the last three months which just exceeds 71 percent, perhaps reflecting the
smaller offering and some seasoning as a public company for second steps.
Furthermore, as shown in Table 4.5, assuming the publicly-traded MHCs completed
second step conversions (utilizing standard assumptions for each MHC) at their
current market prices, the implied median price/tangible book is computed at
approximately 103 percent.
D. Acquisition Market
Also considered in the valuation was the potential impact on
Pennsylvania Savings' stock price of recently completed and pending acquisitions
of other thrifts operating in the Savings Bank's market area. As shown in
Exhibit IV-4, there were seven Pennsylvania savings institutions acquired or
under acquisition since
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.3
Market Pricing Comparatives
Prices As of September 19, 1997
<TABLE>
<CAPTION>
Market Per Share Data
Capitalization -------------- Pricing Ratios(3)
--------------- Core Book ---------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 23.28 163.37 1.15 15.70 21.97 147.78 18.07 151.64 19.24
Special Selection Grouping(8) 21.37 73.91 0.58 17.55 0.00 120.37 23.93 120.65 29.17
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
FSNJ Bayonne Banchsares of NJ 12.37 111.24 -0.04 9.91 NM 124.82 18.00 124.82 NM
CFBC Community First Bnkg Co. of GA 35.00 84.49 1.06 28.74 NM 121.78 18.75 123.46 NM
FBNW FirstBank Corp of Clarkston WA 17.00 33.73 0.44 14.00 NM 121.43 21.90 121.43 NM
FSPT FirstSpartan Fin. Corp. of SC 35.62 157.80 1.16 27.63 NM 128.92 33.93 128.92 NM
GOSB GSB Financial Corp. of NY 16.00 35.97 0.44 13.78 NM 116.11 31.42 116.11 NM
MONT Montgomery Fin. Corp. of IN 12.25 20.25 0.42 11.22 NM 109.18 19.56 109.18 29.17
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ --------------- -------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
- --------------------- ------- ------ ------- ------ ------- ------- ------- ------- ------- -----
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
SAIF-Insured Thrifts 0.38 1.67 30.28 1,158 12.91 0.79 0.63 5.45 0.85 7.48
Special Selection Grouping(8) 0.13 0.51 11.32 318 19.86 1.56 0.55 2.47 0.62 2.93
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
FSNJ Bayonne Banchsares of NJ 0.17 1.37 NM 618 14.42 1.22 -0.35 -2.42 -0.06 -0.40
CFBC Community First Bnkg Co. of GA 0.60 1.71 56.60 451 15.40 2.02 0.56 3.65 0.57 3.69
FBNW FirstBank Corp of Clarkston WA 0.00 0.00 0.00 154 18.04 2.07 0.70 3.86 0.57 3.14
FSPT FirstSpartan Fin. Corp. of SC 0.00 0.00 0.00 465 26.32 NA 0.95 3.62 1.11 4.20
GOSB GSB Financial Corp. of NY 0.00 0.00 0.00 114 27.06 NA 1.02 3.77 0.86 3.19
MONT Montgomery Fin. Corp. of IN 0.00 0.00 0.00 104 17.91 0.91 0.42 2.32 0.67 3.74
</TABLE>
<PAGE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month data,
adjusted to omit non-operating items (including the SAIF assessment) on a
tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/CORE = Price to estimated core earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month earnings and average equity and assets balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
(8) Includes Converted Last 3 Mths (no MHC);
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP Financial, LC.
August 29, 1997
- --------------------------------------------------------------------------------
Table 4.4
Pricing Characteristics and After-Market Trends
Second Step Conversions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Information Pre-Conversion Data
- ------------------------------------------------------------------------------------------------ Offering
Financial Info. Asset Quality Information
------------------------------------------------------------------
Conversion Equity/ NPAs/ Res. Gross % of Exp./
Institution State Date Ticker Assets Assets Assets Cov. Proc. Mid. Proc.
- ----------- ----- ---- ------ ------ ------ ------ --- ----- ---- ----
($Mil) (%) (%)(2) (%) ($Mil) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bayonne Bancshares NJ 08/22/97 FSNJ $577 8.33% 0.81% 53% $48.7 132% 3.8%
Montgomery Fin. Corp. IN 07/01/97 MONT 94 9.83% 0.91% 20% 11.9 132% 4.5%
Cumberland Mtn. Bncshrs. KY* 04/01/97 P.Sheet 92 5.14% 1.31% 19% 4.4 132% 8.0%
Kenwood Bancorp OH* 07/01/96 P.Sheet 48 6.88% 0.00% NM 1.6 102% 22.2%
Commonwealth Bancorp PA* 06/17/96 CMSB 2,054 6.71% 0.51% 109% 98.7 110% 1.9%
Westwood Financial Corp. NJ 06/07/96 WWFC 85 7.05% 0.00% NM 3.9 99% 9.9%
Jacksonville Bancorp TX 04/01/96 JXVL 198 10.47% 1.41% 36% 16.2 106% 4.4%
North Central Bancshares IA 03/21/96 FFFD 180 16.47% 0.17% 562% 26 106% 3.5%
Fidelity Financial of Ohio OH* 03/04/96 FFOH 227 13.23% 0.50% 69% 22.8 132% 3.2%
First Colorado Bancorp CO* 01/02/96 FFBA 1,400 12.71% 0.31% 20% 134.1 105% 1.9%
Charter Financial IL* 12/29/95 CBSB 293 12.17% 0.27% 281% 29.2 116% 3.4%
American Nat'l Bancorp MD* 11/03/95 ANBK 426 6.80% 2.23% 67% 21.8 132% 3.3%
First Defiance Fin. Corp. OH* 10/02/95 FDEF 476 15.27% 0.24% 135% 64.8 132% 2.3%
Community Bank Shares IN* 04/10/95 CBIN 205 7.00% 0.33% 80% 10.1 132% 4.4%
Fed One Bancorp WV* 01/19/95 FOBC 305 9.2% 0.32% 142% 16.1 85% 7.7%
Home Financial Corp. FL* 10/25/94 HOFL 1,005 13.4% 0.91% 44% 175.6 112% 3.1%
Jefferson Bancorp LA* 08/18/94 JEBC 257 6.3% 0.9% 25% 16.1 107% 3.9%
Averages: $440 9.28% 0.62% 104% $39.0 110% 5.1%
Medians: 257 9.25% 0.50% 67% $21.8 112% 3.8%
- ---------------------------------------------------------------------------------------------------------------------
Institutional Information Insider Purchases Pro Forma Data
- ---------------------------------------------------------------------------------------------------------------------
Pricing Ratios(4)
-------------------------------------------------------------
Benefit Plans
Conversion Recog. Mgmt.
Institution State Date Ticker ESOP Plans & Dirs. P/TB P/E(7) P/Core P/A
- ----------- ----- ---- ------ ---------------------- ---- ----- --- ---
(%) (%) (%)(3) (%) (x) (x) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Bayonne Bancshares NJ 08/22/97 FSNJ 8.0% 4.0% 10.0% 100.9% NM NM 14.6%
Montgomery Fin. Corp. IN 07/01/97 MONT 8.0% 4.0% 4.6% 89.1% 24.1 24.1 16.0%
Cumberland Mtn. Bncshrs. KY* 04/01/97 P.Sheet 6.2% 4.0% 4.5% 81.2% 13.8 13.8 7.1%
Kenwood Bancorp OH* 07/01/96 P.Sheet 8.0% 4.0% 6.4% 67.6% NM NM 6.0%
Commonwealth Bancorp PA* 06/17/96 CMSB 8.0% 4.0% 0.1% 109.3% 12.1 12.5 8.4%
Westwood Financial Corp. NJ 06/07/96 WWFC 0.0% 0.0% 2.5% 80.0% 10.1 10.1 7.3%
Jacksonville Bancorp TX 04/01/96 JXVL 8.0% 4.0% 2.0% 77.7% 14.9 14.9 12.6%
North Central Bancshares IA 03/21/96 FFFD 3.2% 0.0% 0.5% 74.2% 12.1 12.5 19.7%
Fidelity Financial of Ohio OH* 03/04/96 FFOH 8.0% 4.0% 5.6% 82.6% 18.1 18.1 16.6%
First Colorado Bancorp CO* 01/02/96 FFBA 0.0% 2.0% 2.0% 87.0% 12.7 13.4 13.2%
Charter Financial IL* 12/29/95 CBSB 3.3% 0.0% 0.1% 81.4% 12.3 12.3 15.5%
American Nat'l Bancorp MD* 11/03/95 ANBK 8.0% 4.0% 0.6% 83.9% 17.7 17.7 9.0%
First Defiance Fin. Corp. OH* 10/02/95 FDEF 8.0% 4.0% 0.9% 85.6% 18.2 18.2 20.6%
Community Bank Shares IN* 04/10/95 CBIN 8.0% 0.0% 17.9% 85.5% 10.3 9.0 9.3%
Fed One Bancorp WV* 01/19/95 FOBC 7.0% 4.0% 0.9% 67.9% 9.0 9.0 8.8%
Home Financial Corp. FL* 10/25/94 HOFL 8.0% 4.0% 0.6% 86.4% 10.6 12.4 21.3%
Jefferson Bancorp LA* 08/18/94 JEBC 7.0% 3.0% 1.5% 71.7% 10.2 10.2 7.9%
Averages: 6.5% 2.7% 3.4% 78.4% 12.9 13.0 11.9%
Medians: 8.0% 4.0% 2.0% 82.6% 12.3 12.5 12.6%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Institutional Information Post-IPO Pricing Trends
- -------------------------------------------------------------------------------------------------------------------------------
Fin. Characteristics Closing Price:
-------------------- -------------------------------
First After
Conversion IPO Trading % First
Institution State Date Ticker ROA TE/A ROE Price Day Chg. Week(5)
- ----------- ----- ---- ------ --- ---- --- ----- --- --- ------
(%) ($) ($) (%) ($) (%) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Bayonne Bancshares NJ 08/22/97 FSNJ -0.5% 14.4% -6.6% $10.00 $11.75 17.5% $11.94
Montgomery Fin. Corp. IN 07/01/97 MONT 0.7% 17.9% 3.7% 10.00 11.13 11.2% 11.25
Cumberland Mtn. Bncshrs. KY* 04/01/97 P.Sheet 0.5% 8.8% 5.9% 10.00 11.88 18.8% 12.25
Kenwood Bancorp OH* 07/01/96 P.Sheet 0.1% 8.8% 1.7% 10.00 NT NA NT
Commonwealth Bancorp PA* 06/17/96 CMSB 0.7% 6.7% 10.4% 10.00 10.50 5.0% 10.75
Westwood Financial Corp. NJ 06/07/96 WWFC 0.7% 9.2% 7.9% 10.00 10.75 7.5% 10.38
Jacksonville Bancorp TX 04/01/96 JXVL 0.8% 16.2% 5.2% 10.00 9.75 -2.5% 9.63
North Central Bancshares IA 03/21/96 FFFD 1.6% 26.5% 6.1% 10.00 10.88 8.7% 10.69
Fidelity Financial of Ohio OH* 03/04/96 FFOH 0.9% 20.0% 4.6% 10.00 10.50 5.0% 10.00
First Colorado Bancorp CO* 01/02/96 FFBA 1.0% 15.2% 6.9% 10.00 11.44 14.4% 11.63
Charter Financial IL* 12/29/95 CBSB 1.3% 19.1% 6.6% 10.00 10.81 8.1% 10.88
American Nat'l Bancorp MD* 11/03/95 ANBK 0.5% 10.7% 4.7% 10.00 9.38 -6.3% 9.75
First Defiance Fin. Corp. OH* 10/02/95 FDEF 1.1% 24.1% 4.7% 10.00 10.38 3.8% 10.31
Community Bank Shares IN* 04/10/95 CBIN 0.9% 10.9% 8.3% 10.00 12.00 20.0% 12.75
Fed One Bancorp WV* 01/19/95 FOBC 1.0% 13.0% 7.6% 10.00 11.00 10.0% 11.00
Home Financial Corp. FL* 10/25/94 HOFL 2.0% 24.6% 8.2% 10.00 9.59 -4.1% 10.00
Jefferson Bancorp LA* 08/18/94 JEBC 0.8% 11.1% 7.0% 10.00 13.00 30.0% 14.25
Averages: 0.9% 14.3% 5.9% $9.44 10.28 7.3% 10.43
Medians: 0.8% 14.4% 6.1% $10.00 $10.84 7.8% $10.81
- --------------------------------------------------------------------------------
Institutional Information Post-IPO Pricing Trends
- --------------------------------------------------------------------------------
Closing Price:
---------------
% After
Conversion First First %
Institution State Date Ticker Chg. Month(6) Chg.
- ----------- ----- ---- ------ --- ------- ---
(%) ($) (%)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Bayonne Bancshares NJ 08/22/97 FSNJ 19.4% $11.94 19.4%
Montgomery Fin. Corp. IN 07/01/97 MONT 12.5% 12.13 21.2%
Cumberland Mtn. Bncshrs. KY* 04/01/97 P.Sheet 22.5% 12.63 26.3%
Kenwood Bancorp OH* 07/01/96 P.Sheet NA NT NA
Commonwealth Bancorp PA* 06/17/96 CMSB 7.5% 10.00 0.0%
Westwood Financial Corp. NJ 06/07/96 WWFC 3.8% 10.62 6.2%
Jacksonville Bancorp TX 04/01/96 JXVL -3.8% 9.88 -1.2%
North Central Bancshares IA 03/21/96 FFFD 6.9% 10.44 4.4%
Fidelity Financial of Ohio OH* 03/04/96 FFOH 0.0% 10.13 1.3%
First Colorado Bancorp CO* 01/02/96 FFBA 16.3% 12.00 20.0%
Charter Financial IL* 12/29/95 CBSB 8.7% 11.38 13.8%
American Nat'l Bancorp MD* 11/03/95 ANBK -2.5% 9.88 -1.2%
First Defiance Fin. Corp. OH* 10/02/95 FDEF 3.1% 10.13 1.3%
Community Bank Shares IN* 04/10/95 CBIN 27.5% 12.25 22.5%
Fed One Bancorp WV* 01/19/95 FOBC 10.0% 11.62 16.2%
Home Financial Corp. FL* 10/25/94 HOFL 0.0% 10.31 3.1%
Jefferson Bancorp LA* 08/18/94 JEBC 42.5% 14.25 42.5%
Averages: 8.9% $10.48 11.0%
Medians: 7.2% $10.62 6.2%
</TABLE>
Note: "NT" - Not Traded; "NA" - Not Applicable, Not Available.
(1) Non-OTS regulated thrifts.
(2) As reported in summary pages of prospectus.
(3) As reported in prospectus.
(4) Does not take into account the adoption of SOP 93-6.
(5) Latest price if offering less than one week old.
(6) Latest price if offering more than one week but less than one month old.
(7) Price to core earnings if converted after 9/30/96 due to impact of SAIF
assessment.
- --------------------------------------------------------------------------------
<PAGE>
RP FINANCIAL. LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.5
MHC INSTITUTIONS IMPLIED PRICING RATIOS FULL CONVERSION BASIS
As of September 19, 1997
<TABLE>
<CAPTION>
Fully Converted
Implied Value Per Share (8) Pricing Ratios(3)
----------------- ---------------- --------------------------------------------
Implied Core Book
Price/ Market 12-Mth Value/
Share(1) Val(8) EPS(2) Share P/E P/B P/A P/TB P/CORE
-------- ------ ------ ----- --- --- --- ---- ------
($) ($Mil) ($) ($) (X) (%) (%) (X) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(7)
- -----------------------
Averages 23.28 163.37 1.15 15.70 21.97 147.78 18.07 151.64 19.24
Medians -- -- -- -- 22.05 140.90 16.61 143.95 18.88
Publicly-Traded MHC Institutions, Full Conversion Basis
- -------------------------------------------------------
Averages 26.10 248.32 1.16 25.27 26.45 102.39 21.97 103.22 22.95
Medians -- -- -- -- 28.27 103.33 21.22 102.96 21.85
Publicly-Traded MHC Institutions, Full Conversion Basis
- -------------------------------------------------------
CMSV Commty. Svgs, MHC of FL (48.5) 32.12 163.49 1.47 29.35 28.94 109.44 21.22 109.44 21.85
FFFL Fidelity FSB, MHC of FL (47.7) 27.25 184.51 1.11 24.35 NM 111.91 17.08 112.32 24.55
SKBO First Carnegie,MHC of PA (45.0) 16.25 37.38 0.55 17.72 NM 91.70 22.34 91.70 29.55
FFSX First FS&LA. MHC of IA (6.1) 30.00 84.84 1.56 27.33 28.30 109.77 16.73 110.21 19.23
FSLA First SB SLA MHC of NJ (7 5) 34.75 252.42 1.67 28.90 28.48 120.24 22.04 126.59 20.81
GDVS Greater DV SB,MHC of PA (19.9) 24.00 78.53 0.86 24.80 NM 96.77 26.42 96.77 27.91
HARS Harris SB, MHC of PA (24.3) 44.00 493.81 1.75 42.58 28.39 103.33 20.94 107.98 25.14
JXSB Jacksonville SB,MHC of IL (45.6) 22.25 28.30 1.06 23.60 NM 94.28 16.11 94.28 20.99
LFEO Leeds FSB, MHC of MO (36.3) 30.25 104.51 1.34 29.38 28.27 102.96 30.94 102.96 22.57
NWSB Northwest SB, MHC of PA (30.7) 25.37 593.05 1.22 23.26 25.89 109.07 24.34 111.42 20.80
PBCT Peoples Bank, MHC of CT (40.1) 31.62 1930.50 1.46 26.85 17.37 117.77 21.83 117.81 21.66
PHSB Ppls Home SB. MHC of PA (45.0) 16.25 44.85 0.87 21.87 NM 74.30 17.96 74.30 18.68
PULB Pulaski SB, MHC of MO (29.8) 27.25 57.06 1.25 27.11 26.72 100.52 26.98 100.52 21.80
PLSK Pulaski SB, MHC of NJ (46.0) 16.75 34.67 0.72 17.80 NM 94.10 17.96 94.10 23.26
SBFL SB Fngr Lakes MHC of NY (33.1) 24.25 43.29 0.88 25.27 NM 95.96 17.96 95.96 27.56
WAYN Wayne S&L Co. MHC of OH (47.8) 23.31 52.40 1.02 20.68 NM 112.72 18.90 112.72 22.85
WCFB Wbstr Cty FSB MHC of IA (45.2) 18.00 37.80 0.86 18.81 25.71 95.69 33.73 95.69 20.93
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
------------------------- --------------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ ------------- -------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
----- ----- -------- ------ ------ ------ --- --- --- ---
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(7)
- -----------------------
Averages 0.38 1.67 30.28 1,158 12.91 0.79 0.63 5.45 0.85 7.48
Medians -- -- -- -- -- -- -- -- -- --
Publicly-Traded MHC Institutions, Full Conversion Basis
- -------------------------------------------------------
Averages 0.55 2.12 40.39 1,141 21.70 0.70 0.77 3.53 1.00 4.64
Medians -- -- -- -- -- -- -- -- -- --
Publicly-Traded MHC Institutions, Full Conversion Basis
- -------------------------------------------------------
CMSV Commty. Svgs, MHC of FL (48.5) 0.90 2.80 61.22 770 19.39 0.55 0.77 3.84 1.02 5.09
FFFL Fidelity FSB, MHC of FL (47.7) 0.90 3.30 NM 1,080 15.26 0.34 0.57 3.41 0.77 4.62
SKBO First Carnegie,MHC of PA (45.0) 0.30 1.85 54.55 167 24.36 NA 0.60 2.48 0.76 3.10
FFSX First FS&LA. MHC of IA (6.1) 0.48 1.60 30.77 507 15.24 0.11 0.60 3.95 0.89 5.81
FSLA First SB SLA MHC of NJ (7 5) 0.48 1.38 28.74 1,145 18.33 0.68 0.80 4.30 1.09 5.89
GDVS Greater DV SB,MHC of PA (19.9) 0.36 1.50 41.86 297 27.30 2.79 0.76 2.72 0.97 3.49
HARS Harris SB, MHC of PA (24.3) 0.58 1.32 33.14 2,358 20.26 0.65 0.82 3.72 0.93 4.20
JXSB Jacksonville SB,MHC of IL (45.6) 0.40 1.80 37.74 176 17.09 0.66 0.49 2.69 0.82 4.53
LFEO Leeds FSB, MHC of MO (36.3) 0.76 2.51 56.72 338 30.05 0.02 1.12 3.68 1.40 4.61
NWSB Northwest SB, MHC of PA (30.7) 0.32 1.26 26.23 2,437 22.31 0.72 1.00 4.26 1.24 5.30
PBCT Peoples Bank, MHC of CT (40.1) 0.68 2.15 46.58 8,842 18.54 0.90 1.30 6.99 1.05 5.60
PHSB Ppls Home SB. MHC of PA (45.0) 0.00 0.00 0.00 250 24.17 NA 0.57 2.38 0.96 3.98
PULB Pulaski SB, MHC of MO (29.8) 1.10 4.04 NM 211 26.84 NA 1.01 3.78 1.23 4.64
PLSK Pulaski SB, MHC of NJ (46.0) 0.30 1.79 41.67 193 19.08 0.65 0.46 2.86 0.79 4.91
SBFL SB Fngr Lakes MHC of NY (33.1) 0.40 1.65 45.45 241 18.71 0.69 0.40 2.08 0.68 3.52
WAYN Wayne S&L Co. MHC of OH (47.8) 0.62 2.66 60.78 277 16.77 0.73 0.52 3.08 0.84 4.99
WCFB Wbstr Cty FSB MHC of IA (45.2) 0.80 4.44 NM 112 35.24 0.26 1.31 3.75 1.61 4.60
</TABLE>
(1) Current stock price of minority stock. Average of High/Low or Bid/Ask price
per share.
(2) EPS (estimated core earnings) is based on reported trailing twelve month
data, adjusted to omit non-operating gains and losses (including the SAIF
assessment) on a tax effected basis. Public MHC data reflects additional
earnings from reinvestment of proceeds of second step conversion.
(3) P/E - Price to Earnings; P/B - Price to Book; P/A . Price to Assets; P/TB -
Price to Tangible Book; and P/CORE - Price to Core Earnings. Ratios are pro
forma assuming a second step conversion to full stock form.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated twelve month dividend (as a percent of trailing twelve month
estimated core earnings (earnings adjusted to reflect second step
conversion).
(6) RDA (return on assets) and ROE return on equity ) are indicated ratios
based on trailing twelve month earnings and average equity and assets
balances.
(7) Excludes from averages and medians those companies the subject of actual or
rumored acquisition activities or unusual operating characteristics.
(8) Figures estimated by RP Financial to reflect a second step conversion of
the MHC to full stock form.
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
the beginning of 1995. The recent acquisition activity involving Pennsylvania
savings institutions may imply a certain degree of acquisition speculation for
the Savings Bank's stock. To the extent that acquisition speculation may impact
the Savings Bank's offering, we have largely taken this into account in
selecting Pennsylvania savings institutions that also experience a degree of
acquisition speculation.
E. Trading in Pennsylvania Savings' Stock
Since Pennsylvania Savings' minority stock currently trades
under the symbol "PSBI" on the OTC Bulletin Board system, RP Financial also
considered the recent trading activity in its valuation analysis. Pennsylvania
Savings had a total of 1,194,640 shares issued and outstanding at June 30, 1997,
of which 579,390 were held by Public Stockholders and were traded as public
securities. As of September 19, 1997, the Savings Bank's stock price was
approximately $23.25 per share. There are significant differences between the
Savings Bank's minority stock (currently being traded) and the conversion stock
that will be issued by the Holding Company. Such differences include different
liquidity characteristics (the new conversion stock will be significantly more
liquid owing to greater public shares available to trade), a lower return on
equity for the Holding Company's conversion stock, and the anticipated
difference in dividend for the conversion stock. Since the pro forma impact has
not been publicly disseminated to date, it is appropriate to discount the
current trading level. As the pro forma impact is made known publicly, the
trading level will become more informative.
Taking these factors and trends into account, RP Financial
concluded that no adjustment was appropriate in the valuation analysis for
purposes of marketing of the issue.
8. Management
Pennsylvania Savings' management team has experience and
expertise in all of the key areas of the Savings Bank's operations. Exhibit IV-5
lists Pennsylvania Savings' Board of Directors and executive management with
summary resumes. The Savings Bank's operations to date indicates that
Pennsylvania Savings' management team, in conjunction with the Board, has
developed and implemented an effective operating philosophy. Pennsylvania
Savings has no apparent senior management or Board vacancies and there appears
to be a well-defined organizational structure. Similarly, the financial results
of the Peer Group companies indicate that they have been effectively managed, as
all of the Peer Group companies maintained healthy capital positions, solid core
earnings and favorable credit quality measures. We have therefore concluded
that, in general, Pennsylvania Savings is currently being operated at least as
effectively as the Peer Group companies and no adjustment for this factor was
necessary.
<PAGE>
9. Effect of Government Regulation and Regulatory Reform
The Savings Bank and most of the Peer Group companies were
similarly impacted by the recently enacted SAIF rescue legislation, as the
affected institutions are SAIF-insured and subject to the same one time
assessment and their deposits will be assessed at the same rate going forward.
In summary, as a fully-converted SAIF-insured savings bank, Pennsylvania Savings
will operate in substantially the same regulatory environment as the Peer Group
members -- all of whom are adequately capitalized institutions and are operating
with no apparent restrictions. Exhibit IV-6 reflects the Savings Bank's pro
forma regulatory capital ratios. On balance, RP Financial concluded that no
adjustment to the Savings Bank's value was warranted for this factor.
Summary of Adjustments
Overall, we believe the Savings Bank's pro forma market value
should take into account the valuation adjustments relative to the Peer Group:
Key Valuation Parameters: Valuation Adjustment
- ------------------------- --------------------
Financial Condition Moderate Downward
Profitability, Growth and Viability of Earnings Slight Downward
Asset Growth Slight Upward
Primary Market Area Slight Upward
Dividends Slight Downward
Liquidity of the Shares Slight Downward
Marketing of the Issue No Adjustment
Management No Adjustment
Effect of Government Regulations and Regulatory Reform No Adjustment
Valuation Approaches
In applying the accepted valuation methodology promulgated by the OTS
and adopted by the PDOB and FDIC, i.e., the pro forma market value approach, we
considered the three key pricing ratios in valuing Pennsylvania Savings'
to-be-issued stock -- the price/earnings ("P/E"), price/book ("P/B"), and
price/assets ("P/A") approaches -- all performed on a pro forma basis including
the effects of the conversion proceeds from selling the MHC's interest to the
public. In computing the pro forma impact of the conversion and the related
pricing ratios, we have incorporated the assumptions disclosed in Pennsylvania
Savings' prospectus for offering expenses, and the effective tax rate and stock
benefit plan assumptions (summarized in Exhibits IV-7 and IV-8). We have
utilized the reinvestment rate set forth in the prospectus, derived from the
OTS's suggested formula equal to the arithmetic average of the yield on interest
earning assets and the cost of deposits (5.88 percent). We compared this
assumption to the blended rate reflected the Savings Bank's business plan, and
concluded it
<PAGE>
to be appropriate. With regard to the employee stock ownership plan
and stock reward plans, we have performed the valuation assuming the ESOP
purchases an amount equal to 8.0 percent of the second step offering (10 year
amortization) and the MRP acquires 4.0 percent of the second step offering. In
our estimate of value, we assessed the relationship of the pro forma pricing
ratios relative to the Peer Group and the recent conversions.
RP Financial's valuation placed emphasis on the following:
o P/E Approach. The P/E approach is generally the best indicator of
long-term value for a stock. Since the Savings Bank and the Peer
Group reported pro forma core profitability, the P/E approach was
considered in this valuation. In applying this approach, we took into
account primarily estimated core earnings.
o P/B Approach. P/B ratios have generally served as a useful benchmark
in the valuation of thrift stocks, with the greater determinant of
long term value being earnings. We have also modified the P/B
approach to exclude the impact of intangible assets (i.e.,
price/tangible book value or "P/TB"). RP Financial considered the
P/TB approach to be a reliable indicator of value given current
market conditions, particularly the market for new conversions, which
often exhibit a willingness to pay premium P/E multiples in the
expectation that such institutions will implement leveraging
strategies to promote earnings growth. At the same time, with lower
ROE ratios, new conversions are typically discounted on a book value
basis relative to the market at least until there is partial
realization of leveraging strategies.
o P/A Approach. P/A ratios are generally a less reliable indicator of
market value, as investors do not place exclusive weight simply on
the size of total assets as a determinant of market value.
Furthermore, this approach does not take into account the amount of
stock purchases funded by deposit withdrawals, thus understating the
pro forma P/A ratio. Investors place significantly greater weight on
book value and earnings -- which have received greater weight in our
valuation analysis. At the same time, the P/A ratio is an indicator
of franchise value and, in the case of a highly capitalized
institution, a high P/A ratio limits the investment community's
willingness to pay average market multiples for earnings and book
value when ROE is low.
o Trading of PSBI Stock. Converting institutions generally do not have
stock outstanding. Pennsylvania Savings, however, has public shares
outstanding due to the mutual holding company form of ownership.
Because PSBI stock is currently traded albeit to a limited extent in
the markets, it is an indicator of investor interest in the Savings
Bank's conversion stock and therefore received some weight in our
valuation. Based on the September 19, 1997 stock price of
approximately $23.25 per share and the 1,194,640 shares of Savings
Bank stock issued and outstanding, the implied value of $27.8 million
was considered in the valuation process. However, since the
conversion stock will have different characteristics than the
minority shares, since the minority shares trade infrequently, and
since pro forma information has not been publicly disseminated to
date, the current trading price of PSBI stock was somewhat discounted
herein but will become more important towards the closing of the
offering.
The Savings Bank intends to adopt Statement of Position ("SOP" 93-6),
which will cause earnings per share computations to be based on shares issued
and outstanding excluding shares owned by an ESOP where
<PAGE>
there is not a commitment to release such shares. For the purpose of preparing
the pro forma pricing tables and exhibits, we have reflected all shares issued
in the offering including shares purchased by the ESOP as outstanding to capture
the full dilutive impact of such stock to the Savings Bank's shareholders.
However, we have considered the impact of adoption of SOP 93-6 on the Savings
Bank in the determination of the Savings Bank's pro forma value.
Based on the application of the valuation approaches, taking into
consideration the valuation adjustments discussed above, and placing the
greatest weight on the P/TB and P/E approaches, considering the recent trading
in PSBI stock, and followed by the P/A approach, RP Financial concluded that the
pro forma market value of the Savings Bank's conversion stock is $21,906,226 at
the midpoint at this time (please note this valuation figure reflects the
rounding of the stock offering amount).
The current ownership percentage represented by the Public Shareholders
is 48.50 percent. However, pursuant to federal policy, the minority ownership
interest is required to be adjusted pursuant to a two-step process to reflect
both waived dividends and assets held by the MHC solely for the benefit of
depositors. There have been no dividends waived by the MHC. There are
approximately $244,000 of assets held at the MHC level. Based upon the assets at
the MHC, and our estimated pro forma fully converted value of $21.9 million, the
resulting pro forma ownership interest of the minority stockholders would be
approximately 47.96 percent, based on this formula (see Exhibit IV-7). Our
calculations for the exchange ratio and the size of the offering were based upon
this figure.
1. Price-to-Tangible Book ("P/TB"). The application of the P/TB
valuation method requires calculating the Savings Bank's pro forma market value
by applying a valuation P/TB ratio to Pennsylvania Savings' pro forma tangible
book value. The pre-conversion book value for Pennsylvania Savings of
$14,770,000 was equal to the Savings Bank's reported capital at June 30, 1997,
plus the $244,000 of mutual holding company assets which will be consolidated
with the Holding Company as a result of the conversion. Based on the $21,906,226
midpoint valuation, Pennsylvania Savings' pro forma P/TB ratio was 90.05
percent. In comparison to the average P/TB ratio for the Peer Group of 128.64
percent, Pennsylvania Savings' valuation reflected a discount of 30.0 percent.
(At the superrange maximum, the implied discount was 18.3 percent.) RP Financial
considered the discount under the P/TB approach to be reasonable in light of the
valuation adjustments discussed previously, particularly the adjustments for
credit risk and earnings. Given the historically high P/TB pricing for thrifts
in today's market, a valuation discount under the P/TB approach could only be
expected and is consistent with the aftermarket trading of new conversion
issues.
Given the emphasis on limiting near term aftermarket trading in the
revised appraisal guidelines, RP Financial also considered the pro forma P/TB
ratios of recent conversions in its valuation analysis. It is these
<PAGE>
companies that provide a proxy for aftermarket trading for new thrift issues. At
the midpoint value, Pennsylvania Savings' pro forma P/TB ratio of 90.05 percent
represented a discount of 25.4 percent from the 120.65 percent average P/TB
ratio of the recently converted thrifts (see Table 4.3).
2. Price-to-Earnings ("P/E"). The application of the P/E valuation
method requires calculating the Savings Bank's pro forma market value by
applying a valuation P/E multiple times the pro forma earnings base. Ideally,
the pro forma earnings base is composed principally of the Savings Bank's
recurring earnings base, that is, earnings adjusted to exclude any one-time
non-operating items, plus the estimated after-tax earnings benefit of the
reinvestment of net conversion proceeds. As shown below, the Savings Bank
recorded several non-operating items during the twelve month period which were
all deemed non-operating and not included in the core earnings base. The Savings
Bank's core earnings were calculated to equal the following (Note: the
adjustments applied to the Peer Group's earnings in the calculation of core
earnings are shown in Exhibit IV-8, including the SAIF assessment):
Amount
------
($000)
Net Income $22
Plus: Loss on Real Estate Opns 138
Plus: SAIF Assessment 567
Tax-Effect Adjustments @ 34% (240)
-----
Adjusted (Core) Income After Tax $487
Based on Pennsylvania Savings' trailing twelve month core earnings, and
incorporating the impact of the pro forma assumptions previously discussed, the
Savings Bank's pro forma core P/E multiple at the $21,906,226 midpoint value
equaled 29.72 times. Comparatively, the Peer Group posted an average core P/E
multiple of 20.67 times, which indicates a premium of 43.8 percent in the
Savings Bank's pro forma earnings multiple. In reaching the valuation
conclusion, we also evaluated the Savings Bank's price/earnings multiple on the
basis of projected earnings as reflected in the business plan.
3. Price-to-Assets ("P/A"). The P/A valuation methodology determines
market value by applying a valuation P/A ratio to the Savings Bank's pro forma
asset base, conservatively assuming no deposit withdrawals are made to fund
stock purchases. In all likelihood there will be deposit withdrawals, which
results in understating the pro forma P/A ratio which is computed herein. At the
midpoint of the valuation range, Pennsylvania Savings' value equaled 16.34
percent of pro forma assets. Comparatively, the Peer Group companies exhibited
an average P/A ratio of 18.29 percent, which implies a 10.7 percent discount
being applied to the Savings Bank's pro forma P/A ratio.
<PAGE>
Valuation Conclusion
It is our opinion that, as of September 19, 1997, the aggregate pro
forma market value of the Savings Bank, inclusive of the sale of the MHC's
ownership interest in the Subscription and Community Offering was $21,906,226 at
the midpoint. Based on this valuation and the approximate 52.04 percent
ownership interest (adjusted for assets at the MHC level) being sold in the
Conversion Offerings, the midpoint value of the Holding Company's stock offering
was $11,400,000 (i.e., 0.5204 x $21,906,226), equal to 1,140,000 shares at a per
share value of $10.00. Pursuant to federal conversion guidelines, the 15 percent
offering range includes a minimum offering value of $9,690,000 and a maximum
value of $13,110,000. Based on the $10.00 per share offering price, this range
equates to an offering of 969,000 shares at the minimum to 1,311,000 shares at
the maximum. The Holding Company's offering also includes a provision for a
superrange, which if exercised, would result in an offering size of $15,076,500,
equal to 1,507,650 shares at the $10.00 per share offering price. The
comparative pro forma valuation ratios relative to the Peer Group are shown in
Table 4.6, and the key valuation assumptions are detailed in Exhibit IV-9. The
pro forma calculations for the range are detailed in Exhibit IV-10.
Establishment of Exchange Ratio
Federal regulations provide that in a conversion of a mutual holding
company, the minority stockholders are entitled to exchange their shares of the
Savings Bank's common stock for common stock of the Holding Company. The Board
of Trustees of the Savings Bank and Mutual Holding Company has independently
established a formula to determine the exchange ratio. The formula has been
designed to preserve the current aggregate percentage ownership in the Savings
Bank represented by the Public Savings Bank Shares, as adjusted to reflect the
contribution of assets of the MHC owned solely by depositors, which is an
approximate 47.96 percent ownership interest. Pursuant to the formula, the
Exchange Ratio will be determined at the end of the Holding Company's stock
offering based on the total number of shares sold in the offerings. Based upon
this formula, and the valuation conclusion and offering range concluded above,
the Exchange Ratio would be 1.5413 shares, 1.8133 shares, 2.0853 shares and
2.3981 shares of PSB Bancorp, Inc. stock issued for each public savings bank
share, at the minimum, midpoint, maximum and supermaximum of the offering,
respectively. The Exchange Ratio formula and share exchange procedures were
determined independently by the Boards of Trustees. RP Financial expresses no
opinion on the proposed exchange of Holding Company shares for the public
savings bank shares or on the proposed Exchange Ratio.
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.6
Public Market Pricing
Pennsylvania Savings Bank and the Comparables
As of September 19, 1997
<TABLE>
<CAPTION>
Market Per Share Data
Capitalization -------------- Pricing Ratios(3)
--------------- Core Book ---------------------------------------
Price Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
------- ------ ----- ----- ---- --- --- ---- ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank
- -------------------------
Range Maximum 10.00 28.97 0.28 9.51 80.70 105.11 21.10 105.11 35.16
Range Midpoint 10.00 25.19 0.31 10.25 80.49 97.52 18.58 97.52 32.38
Range Minimum 10.00 21.91 0.34 11.11 80.54 90.05 16.34 90.05 29.72
10.00 18.62 0.37 12.26 80.26 81.59 14.04 81.59 26.71
SAIF-Insured Thrifts(7)
- -----------------------
Averages 23.28 163.37 1.15 15.70 21.97 147.78 18.07 151.64 19.24
Medians --- --- --- --- 22.05 140.90 16.61 143.95 18.88
All Non-MHC State of PA(7)
- --------------------------
Averages 21.99 137.79 1.39 14.45 22.25 159.23 14.19 159.74 16.95
Medians --- --- --- --- 23.75 150.03 14.46 150.03 18.11
Comparable Group Averages
- -------------------------
Averages 19.59 48.03 1.01 15.50 24.46 126.64 18.29 128.64 20.67
Medians --- --- --- --- 25.44 124.34 17.03 129.82 20.89
State of PA
- -----------
CVAL Chester Valley Bancorp of PA 23.00 49.73 1.27 12.52 25.84 183.71 15.36 183.71 18.11
CMSB Cmnwealth Bancorp of PA 19.50 333.37 0.88 12.89 28.26 151.28 14.56 193.45 22.16
FSBI Fidelity Bancorp, Inc. of PA 21.25 32.94 1.72 15.83 19.68 134.24 9.07 134.24 12.35
FBBC First Bell Bancorp of PA 15.87 103.33 1.23 10.78 14.97 147.22 14.46 147.22 12.90
FKFS First Keystone Fin. Corp of PA 29.59 36.34 1.93 19.09 21.92 155.00 11.33 155.00 15.33
SHEN First Shenango Bancorp of PA 31.50 65.27 2.20 21.75 18.64 144.83 15.86 144.83 14.32
GAF GA Financial Corp. of PA 19.00 151.72 1.02 14.25 23.75 133.33 20.24 134.75 18.63
HARL Harleysville SA of PA 25.75 42.54 2.00 13.31 17.64 193.46 12.64 193.46 12.88
LARL Laurel Capital Group of PA 24.75 35.71 2.03 14.73 15.37 168.02 16.85 168.02 12.19
MLBC ML Bancorp of Villanova PA(7) 25.94 292.94 1.15 12.80 20.43 202.66 14.14 206.20 22.56
PVSA Parkvale Financial Corp of PA 32.25 130.77 2.54 18.54 18.75 173.95 13.19 175.27 12.70
PWBC PennFirst Bancorp of PA 17.00 90.20 0.91 12.44 26.98 136.66 11.04 146.17 18.68
PWBK Pennwood SB of PA 17.25 10.01 0.92 15.04 NM 114.69 20.02 114.69 18.75
PHFC Pittsburgh Home Fin. of PA 19.25 37.90 0.88 14.21 27.90 135.47 14.79 136.91 21.88
PRBC Prestige Bancorp of PA 17.62 16.12 0.83 16.51 NM 106.72 11.88 106.72 21.23
PFNC Progress Financial Corp. of PA 14.31 54.58 0.65 5.78 26.50 247.58 13.04 280.59 22.02
SVRN Sovereign Bancorp of PA 16.00 1120.16 0.96 6.25 25.81 256.00 10.28 NM 16.67
THRD TF Financial Corp. of PA 21.37 87.25 1.13 17.44 25.44 122.53 13.62 139.67 18.91
WVFC WVS Financial Corp. of PA 28.25 49.35 2.11 18.83 16.72 150.03 16.75 150.03 13.39
YFED York Financial Corp. of PA 24.37 170.78 1.29 14.28 24.13 170.66 14.69 170.66 18.89
Comparable Group
- ----------------
GAF GA Financial Corp. of PA 19.00 151.72 1.02 14.25 23.75 133.33 20.24 134.75 18.63
HRBF Harbor Federal Bancorp of MD 22.00 37.25 0.90 16.48 NM 133.50 17.21 133.50 24.44
LARL Laurel Capital Group of PA 24.75 35.71 2.03 14.73 15.37 168.02 16.85 168.02 12.19
PEEK Peekskill Fin. Corp. of NY 17.00 54.28 0.75 14.71 29.82 115.57 29.73 115.57 22.67
PWBK Pennwood SB of PA 17.25 10.01 0.92 15.04 NM 114.69 20.02 114.69 18.75
PHFC Pittsburgh Home Fin. of PA 19.25 37.90 0.88 14.21 27.90 135.47 14.79 136.91 21.88
PRBC Prestige Bancorp of PA 17.62 16.12 0.83 16.51 NM 106.72 11.88 106.72 21.23
SFED SFS Bancorp of Schenectady NY 22.00 27.19 1.07 17.44 NM 126.15 15.73 126.15 20.56
THRD TF Financial Corp. of PA 21.37 87.25 1.13 17.44 25.44 122.53 13.62 139.67 18.91
WHGB WHG Bancshares of MD 15.63 22.85 0.57 14.16 NM 110.38 22.80 110.38 27.42
<PAGE>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Amount/ Payout Total Equity/ NPAs Reported Core MEMO: MEMO:
Share Yield Ratio(5) Assets Assets Assets ------------- -------------- Exchange Offer-
----- ----- ------- ------ ------ ------ ROA ROE ROA ROE Ratio ing
----- ----- ------ ----- ----- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania Savings Bank
- -------------------------
Range Maximum 0.00 0.00 0.00 137 20.07 2.44 0.26 1.30 0.60 2.99 2.3981 15.1
Range Midpoint 0.00 0.00 0.00 136 19.05 2.47 0.23 1.21 0.57 3.01 2.0853 13.1
Range Minimum 0.00 0.00 0.00 134 18.14 2.50 0.20 1.12 0.55 3.03 1.8133 11.4
Range Minimum 0.00 0.00 0.00 133 17.21 2.53 0.17 1.02 0.53 3.05 1.5413 9.7
SAIF-Insured Thrifts(7)
- -----------------------
Averages 0.38 1.67 30.28 1,158 12.91 0.79 0.63 5.45 0.85 7.48
Medians --- --- --- --- --- --- --- --- --- ---
All Non-MHC State of PA(7)
- --------------------------
Averages 0.38 1.71 28.01 1,126 9.47 0.67 0.69 7.38 0.94 10.10
Medians --- --- --- --- --- --- --- --- --- ---
Comparable Group Averages
- -------------------------
Averages 0.34 1.71 34.72 272 14.76 0.59 0.68 4.52 0.96 6.43
Medians --- --- --- --- --- --- --- --- --- ---
State of PA
- -----------
CVAL Chester Valley Bancorp of PA 0.42 1.83 33.07 324 8.36 0.23 0.65 7.42 0.93 10.59
CMSB Cmnwealth Bancorp of PA 0.28 1.44 31.82 2,289 9.63 0.50 0.55 5.26 0.70 6.71
FSBI Fidelity Bancorp, Inc. of PA 0.36 1.69 20.93 363 6.75 0.44 0.51 7.35 0.81 11.71
FBBC First Bell Bancorp of PA 0.40 2.52 32.52 714 9.83 0.07 1.07 7.64 1.24 8.87
FKFS First Keystone Fin. Corp of PA 0.20 0.68 10.36 321 7.31 1.60 0.54 7.21 0.77 10.30
SHEN First Shenango Bancorp of PA 0.60 1.90 27.27 411 10.95 0.54 0.89 7.82 1.16 10.18
GAF GA Financial Corp. of PA 0.48 2.53 47.06 750 15.18 0.12 1.00 5.26 1.27 6.71
HARL Harleysville SA of PA 0.40 1.55 20.00 337 6.53 0.03 0.75 11.71 1.03 16.04
LARL Laurel Capital Group of PA 0.52 2.10 25.62 212 10.03 0.43 1.14 10.88 1.43 13.72
MLBC ML Bancorp of Villanova PA(7) 0.40 1.54 34.78 2,071 6.98 0.46 0.74 10.23 0.67 9.27
PVSA Parkvale Financial Corp of PA 0.65 2.02 25.59 991 7.58 0.27 0.73 9.76 1.08 14.42
PWBC PennFirst Bancorp of PA 0.33 1.94 36.26 817 8.08 0.65 0.46 6.31 0.67 9.12
PWBK Pennwood SB of PA 0.32 1.86 34.78 50 17.45 0.98 0.70 4.05 1.12 6.54
PHFC Pittsburgh Home Fin. of PA 0.24 1.25 27.27 256 10.92 1.60 0.62 4.71 0.79 6.00
PRBC Prestige Bancorp of PA 0.12 0.68 14.46 136 11.13 0.30 0.37 2.84 0.65 5.01
PFNC Progress Financial Corp. of PA 0.11 0.77 16.92 419 5.27 1.46 0.54 10.19 0.65 12.26
SVRN Sovereign Bancorp of PA 0.08 0.50 8.33 10,898 4.01 0.57 0.44 11.07 0.68 17.14
THRD TF Financial Corp. of PA 0.40 1.87 35.40 641 11.11 0.33 0.55 4.76 0.74 6.40
WVFC WVS Financial Corp. of PA 0.80 2.83 37.91 295 11.16 0.30 1.07 8.59 1.34 10.72
YFED York Financial Corp. of PA 0.60 2.46 46.51 1,162 8.61 2.39 0.62 7.41 0.79 9.46
Comparable Group
- ----------------
GAF GA Financial Corp. of PA 0.48 2.53 47.06 750 15.18 0.12 1.00 5.26 1.27 6.71
HRBF Harbor Federal Bancorp of MD 0.48 2.18 53.33 216 12.90 0.05 0.46 3.52 0.71 5.46
LARL Laurel Capital Group of PA 0.52 2.10 25.62 212 10.03 0.43 1.14 10.88 1.43 13.72
PEEK Peekskill Fin. Corp. of NY 0.36 2.12 48.00 183 25.73 1.22 0.98 3.54 1.29 4.65
PWBK Pennwood SB of PA 0.32 1.86 34.78 50 17.45 0.98 0.70 4.05 1.12 6.54
PHFC Pittsburgh Home Fin. of PA 0.24 1.25 27.27 256 10.92 1.60 0.62 4.71 0.79 6.00
PRBC Prestige Bancorp of PA 0.12 0.68 14.46 136 11.13 0.30 0.37 2.84 0.65 5.01
SFED SFS Bancorp of Schenectady NY 0.28 1.27 26.17 173 12.47 0.73 0.44 3.41 0.79 6.09
THRD TF Financial Corp. of PA 0.40 1.87 35.40 641 11.11 0.33 0.55 4.76 0.74 6.40
WHGB WHG Bancshares of MD 0.20 1.28 35.09 100 20.65 0.15 0.51 2.23 0.85 3.75
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEMO:
Exchange MEMO:
Ratio Offering
<S> <C> <C>
Pennsylvania Savings Bank
- -------------------------
Range Maximum
Range Midpoint
Range Minimum
SAIF-Insured Thrifts(7)
- -----------------------
Averages
Medians
All Non-MHC State of PA(7)
- --------------------------
Averages
Medians
Comparable Group Averages
- -------------------------
Averages
Medians
State of PA
- -----------
CVAL Chester Valley Bancorp of PA
CMSB Cmnwealth Bancorp of PA
FSBI Fidelity Bancorp, Inc. of PA
FBBC First Bell Bancorp of PA
FKFS First Keystone Fin. Corp of PA
SHEN First Shenango Bancorp of PA
GAF GA Financial Corp. of PA
HARL Harleysville SA of PA
LARL Laurel Capital Group of PA
MLBC ML Bancorp of Villanova PA(7)
PVSA Parkvale Financial Corp of PA
PWBC PennFirst Bancorp of PA
PWBK Pennwood SB of PA
PHFC Pittsburgh Home Fin. of PA
PRBC Prestige Bancorp of PA
PFNC Progress Financial Corp. of PA
SVRN Sovereign Bancorp of PA
THRD TF Financial Corp. of PA
WVFC WVS Financial Corp. of PA
YFED York Financial Corp. of PA
Comparable Group
- ----------------
GAF GA Financial Corp. of PA
HRBF Harbor Federal Bancorp of MD
LARL Laurel Capital Group of PA
PEEK Peekskill Fin. Corp. of NY
PWBK Pennwood SB of PA
PHFC Pittsburgh Home Fin. of PA
PRBC Prestige Bancorp of PA
SFED SFS Bancorp of Schenectady NY
THRD TF Financial Corp. of PA
WHGB WHG Bancshares of MD
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) EPS (core basis) is based on actual trailing twelve month data, adjusted to
omit the impact of non-operating items (including the SAIF assessment) on a
tax effected basis, and is shown on a pro forma basis where appropriate.
(3) P/E = Price to Earnings; P/B = Price to Book; P/A = Price to Assets; P/TB =
Price to Tangible Book; and P/CORE = Price to Core Earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated twelve month dividend as a percent of trailing twelve month
estimated core earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and total
assets balances.
(7) Excludes from averages and medians those companies the subject of actual or
rumored acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
EXHIBITS
<PAGE>
RP Financial, LC.
LIST OF EXHIBITS
Exhibit
Number Description
- ------ -----------
I-1 Map of Office Locations
I-2 Audited Financial Statements
I-3 Key Operating Ratios
I-4 Investment Portfolio Composition
I-5 Yields and Costs
I-6 Loan Loss Allowance Activity
I-7 Loan Portfolio Duration
I-8 GAP Analysis
I-9 Loan Portfolio Composition
I-10 Loan Originations, Purchases, and Sales
I-11 Non-Performing Assets
I-12 Deposit Composition
I-13 Deposit Maturities
II-1 List of Office Locations
II-2 Historical Interest Rates
II-3 Demographic/Economic Reports
III-1 General Characteristics of Publicly-Traded
Institutions
III-2 Peer Group Screen #1
III-3 Peer Group Screen #2
<PAGE>
LIST OF EXHIBITS (continued)
IV-1 Stock Prices: September 19, 1997
IV-2 Historical Stock Price Indices
IV-3 Historical Thrift Stock Indices
IV-4 Market Area Acquisition Activity
IV-5 Directors and Management Summary Resumes
IV-6 Pro Forma Regulatory Capital Ratios
IV-7 Impact of Waived Dividends
IV-8 Peer Group Core Earnings Analysis
IV-9 Pro Forma Analysis Sheet
IV-10 Pro Forma Effect of Conversion Proceeds
V-1 Firm Qualifications Statement
<PAGE>
EXHIBIT I-1
Pennsylvania Savings Bank
Map of Office Locations
[MAP]
<PAGE>
EXHIBIT I-2
Pennsylvania Savings Bank
Audited Financial Statements
[Incorporated by Reference]
<PAGE>
EXHIBIT I-3
Pennsylvania Savings Bank
Key Operating Ratios
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Return on average assets 0.30% 0.41% 0.12% 0.60% 0.63% 1.08% 0.76%
Return on average equity 2.43% 3.22% 0.97% 7.00% 7.24% 11.42% 9.17%
Interest rate spread 3.00% 2.66% 2.88% 3.24% 3.61% 3.55% 2.77%
ASSET QUALITY RATIOS:
Nonperforming loans to total loans 4.63% 4.67% 4.84% 4.41% 4.20% 2.85% 3.71%
Nonperforming assets to total assets 2.70% 2.56% 2.74% 2.47% 2.49% 2.07% 2.17%
Allowance for loan losses to total loans 0.33% 0.37% 0.36% 0.39% 0.41% 0.35% 0.38%
Allowance for loan losses to
nonperforming loans 7.18% 7.82% 7.45% 8.91% 9.65% 12.38% 10.28%
Allowance for loan losses to
nonperforming assets 6.18% 6.69% 6.38% 7.38% 8.37% 9.36% 9.43%
Net charge-offs as a percentage of
total loans -- -- 0.23% 0.05% -- -- --
Loans past due (90 days or more) 2,885 2,660 2,779 2,335 2,155 1,511 1,819
Loans past due 90 days and accruing -- -- -- -- -- -- --
Total nonperforming loans 2,885 2,660 2,779 2,335 2,155 1,511 1,819
Real estate owned (REO) 467 449 465 482 330 486 486
Total nonperforming assets 3,352 3,109 3,244 2,817 2,485 1,997 2,305
</TABLE>
<PAGE>
EXHIBIT 1-4
Pennsylvania Savings Bank
Investment Portfolio Composition
<TABLE>
<CAPTION>
Held to Maturity
At June 30,
--------------------------------------------------------------
1997
--------------------------------------------------------------
Gross Gross
Amor- Unreal- Unreal-
tized ized ized Fair
Cost Gains Losses Value
--------- --------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Investment in mutual funds ................ $ -- $ -- $ -- $ --
Debt:
FHLB ...................................... 13,215 -- 36 13,179
FNMA ...................................... 3,000 3 -- 3,003
FHLMC ..................................... 1,000 -- -- 1,000
------- ------- ------- -------
Total Debt Securities ................... 17,215 3 36 17,182
Mortgage-backed securities:
GNMA ...................................... 2,272 91 -- 2,363
CMO ....................................... 177 -- 1 176
FHLMC ..................................... 125 12 -- 137
------- ------- ------- -------
Total mortgage-backed securities held to
maturity ............................. 2,574 103 1 2,676
------- ------- ------- -------
Total securities held to maturity ...... $19,789 $ 106 $ 37 $19,858
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Held to Maturity
At December 31,
---------------------------------------------------------------
1996
---------------------------------------------------------------
Gross Gross
Amor- Unreal- Unreal-
tized ized ized Fair
Cost Gains Losses Value
--------- --------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Investment in mutual funds ......................... $ -- $ -- $ -- $ --
Debt:
FHLB ............................................... 8,000 -- 32 7,968
FNMA ............................................... 2,999 4 -- 3,003
FHLMC .............................................. 1,000 -- -- 1,000
Federal Farm Credit ................................ 657 -- -- 657
------- ------- ------- -------
Total Debt Securities ........................... 12,656 4 32 12,628
Mortgage-backed securities:
GNMA ............................................... 2,355 90 -- 2,445
CMO ................................................ 227 -- 3 224
FHLMC .............................................. 166 16 -- 182
------- ------- ------- -------
Total mortgage-backed securities held to maturity 2,748 106 3 2,851
------- ------- ------- -------
Total securities held to maturity ............... $15,404 $ 110 $ 35 $15,479
======= ======= ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Available for Sale
June 30, 1997
------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ------------ ------------ -------
(In thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Equity:
Investment in mutual funds .................... $2,354 $ 6 $ -- $2,360
------ ------ ------ ------
Debt:
FHLB Notes ................................... 2,000 -- 10 1,990
SLMA ......................................... 1,000 -- 22 978
------ ------ ------ ------
Total debt securities available for sale ..... 3,000 -- 32 2,968
Mortgage-backed Securities
FNMA ......................................... 2,497 -- 126 2,371
FHLMC ........................................ 786 -- 13 773
------ ------ ------ ------
Total mortgage-backed securities available for
sale ........................................ 3,283 -- 139 3,144
------ ------ ------ ------
Total available-for-sale securities .......... $8,637 $ 6 $ 171 $8,472
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Available for Sale
December 31, 1996
------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ------------ ------------ -------
(In thousands)
<S> <C> <C> <C> <C>
Investment Securities:
Equity:
Investment in mutual funds .................... $2,305 $ 47 $ -- $2,352
------ ------ ------ ------
Debt:
FHLB Notes ................................... 3,000 -- 15 2,985
SLMA ......................................... 1,000 -- 21 979
------ ------ ------ ------
Total debt securities available for sale .... 4,000 -- 36 3,964
------ ------ ------ ------
Mortgage-backed Securities:
FNMA ......................................... 2,530 -- 110 2,420
FHLMC ........................................ 792 -- 18 774
------ ------ ------ ------
Total mortgage-backed securities available for
sale ........................................ 3,322 -- 128 3,194
------ ------ ------ ------
Total available-for-sale securities .......... $9,627 $ 47 $ 164 $9,510
====== ====== ====== ======
</TABLE>
<PAGE>
EXHIBIT I-5
Pennsylvania Savings Bank
Yields and Costs
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------------------------------------------------
1997 1996
---------------------------------- ---------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- ---------- -------- --------- ---------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Interest-earning deposits(1) ......... $ 28,076 $ 655 4.67% $ 31,198 $ 667 4.28%
Investment securities ............... 21,089 743 7.05% 16,501 491 5.95%
Mortgage-backed securities ............ 5,956 197 6.62% 6,730 223 6.63%
Net loans ........................... 59,298 2,628 8.86% 55,026 2,486 9.04%
--------- -------- --------- --------
Total interest-earning assets ...... 114,419 4,223 7.38% 109,455 3,867 7.07%
Noninterest-earning assets ............ 5,911 5,792
--------- ---------
Total assets ........................ $120,330 $115,247
========= =========
LIABILITIES
Interest-bearing liabilities:
Savings deposits ..................... $ 39,086 580 2.97% $ 38,151 520 2.73%
Certificates ........................ 60,579 1,604 5.30% 53,732 1,507 5.61%
--------- -------- --------- --------
Total deposits ..................... 99,665 2,184 4.38% 91,883 2,027 4.41%
Borrowed money ........................ -- -- -- --
Total interest-bearing liabilities . 99,665 2,184 4.38% 91,883 2,027 4.41%
--------- -------- --------- --------
Non-interest-bearing liabilities ...... 6,261 9,266
--------- ---------
Total liabilities .................. 105,926 101,149
Shareholders' equity .................. 14,404 14,098
--------- ---------
Total liabilities and shareholders'
equity .............................. $120,330 $115,247
========= =========
Net interest income .................. $ 2,039 $ 1,840
======== ========
Interest rate spread(2) ............... 3.00% 2.66%
Net yield on interest-earning assets(3) 3.56% 3.36%
Ratio of interest-earning assets to
interest-bearing liabilities ......... 1.15X 1.19X
</TABLE>
- ------------
(1) Includes interest-earning deposits with the Federal Home Loan Bank of
Pittsburgh.
(2) Represents the difference between the average yield on interest-earning
assets and the average cost of interest-bearing liabilities.
(3) Represents net interest earnings divided by average interest-earning assets.
(4) Yield/rate data is annualized.
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, Year Ended September 30,
---------------------------------- ------------------------------------
1996 1995
---------------------------------- ------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
--------- ---------- -------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Interest-earning deposits(1) ......... $ 27,803 $1,207 4.34% $ 24,782 $ 818 3.30%
Investment securities ............... 18,880 1,183 6.27 21,063 1,134 5.38
Mortgage-backed securities ............ 6,494 431 6.64 6,884 493 7.16
Net loans ........................... 56,048 5,118 9.13 51,259 4,745 9.26
--------- ------- ------- --------- ------- -------
Total interest-earning assets ...... 109,225 7,939 7.27 103,988 7,190 6.91%
--------- ------- ------- --------- ------- -------
Noninterest-earning assets ............ 6,777 5,756
--------- ---------
Total assets ........................ $116,002 $109,744
========= =========
LIABILITIES
Interest-bearing liabilities:
Savings deposits ..................... $ 40,677 1,122 2.76% $ 44,277 1,206 2.72%
Certificates ........................ 52,253 2,960 5.66 49,416 2,237 4.53
--------- ------- ------- --------- -------- --------
Total deposits ..................... 92,930 4,082 4.39 93,693 3,443 3.67
Borrowed money ..................... -- -- -- -- -- --
--------- ------- ------- --------- ------- -------
Total interest-bearing liabilities . 92,930 4,082 4.39% 93,693 3,443 3.67%
--------- ------- ------- --------- ------- -------
Noninterest-bearing liabilities ...... 8,904 6,560
--------- ---------
Total liabilities .................. 101,834 100,253
Retained earnings or shareholders'
equity .............................. 14,168 9,491
--------- ---------
Total liabilities and retained
earnings or shareholders' equity . $116,002 $109,744
========= =========
Net interest income .................. $3,857 $3,747
======= =======
Interest rate spread(2) ............... 2.88% 3.24%
Net yield on interest-earning assets(3) 3.53% 3.60%
Ratio of interest-earning assets to
interest-bearing liabilities ......... 1.18x 1.11x
</TABLE>
- ------------
(1) Includes interest-earning deposits with the Federal Home Loan Bank of
Pittsburgh.
(2) Represents the difference between the average yield on interest-earning
assets and the average cost of interest-bearing liabilities.
(3) Represents net interest earnings divided by average interest-earning
assets.
<PAGE>
EXHIBIT I-6
Pennsylvania Savings Bank
Loan Loss Allowance Activity
<TABLE>
<CAPTION>
Six Months Year Ended Years Ended
Ended June 30, December 31, September 30,
----------------------- -------------- ----------------------------------
1997 1996 1996 1995 1994 1993
-------- ------- ------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Allowance, beginning of period ............ $ 207 $ 208 $ 208 $ 208 $ 187 $ 187
Total charge-offs ........................ -- -- 133 27 -- --
------- ------- ------- ------- ------- -------
Total recoveries ........................... -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Net charge-offs (recoveries) ............... -- -- 133 27 -- --
Provision charged to operations ............ -- -- 132 27 21 --
------- ------- ------- ------- ------- -------
Allowance, end of period .................. $ 207 $ 208 $ 207 $ 208 $ 208 $ 187
======= ======= ======= ======= ======= =======
Charge-offs (recoveries) to average loans . 0.00% 0.00% 0.23% 0.05% 0.00% 0.00%
Allowance for loan losses as a percentage
of period-end loans ..................... 0.33% 0.37% 0.36% 0.39% 0.41% 0.35%
</TABLE>
<PAGE>
EXHIBIT I-7
Pennsylvania Savings Bank
Loan Portfolio Duration
<TABLE>
<CAPTION>
Amounts at June 30, 1997
-------------------------------------------------------------
Multi- Consumer
One to Family and and
Four Commercial Construc- Commercial Total
Family Real Estate tion Business Loans
--------- ------------- ----------- ------------ --------
(In thousands)
<S> <C> <C> <C> <C> <C>
Amounts due:
Non-accrual $ 1,111 $ 313 $ -- $ -- $ 1,424
Within one year 8,015 941 2,128 1,594 12,678
After one year:
1-3 years 479 1,746 -- 541 2,766
3 to 5 years 1,563 5,005 -- 188 6,756
5 to 10 years 3,794 841 -- 85 4,720
Over 10 years 32,970 1,553 -- -- 34,523
Total due after one year 38,806 9,145 -- 814 48,765
Total amount $47,932 $10,399 $2,128 $2,408 $62,867
</TABLE>
<PAGE>
EXHIBIT I-8
Pennsylvania Savings Bank
Gap Analysis
<TABLE>
<CAPTION>
More than More Than More Than More Than
One Year Two Years Three Five Years
Within One To Two To Three Years To To Ten More Than
Year Years Years Five Years Years Ten Years Total
------------ ----------- ----------- ------------ ----------- ----------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1)(2)
Mortgage loans:
Residential.................... $ 2,395 $ 115 $ 365 $ 1,563 $ 3,794 $ 32,970 $ 41,202
Commercial .................... 663 826 920 5,005 841 1,553 9,808
Land and construction
loans......................... 2,406 2,406
Consumer loans ................ 226 114 428 188 85 -- 1,041
Other loans.................... 1,285 1,285
--------- -------- -------- --------- -------- -------- --------
Total loans .................. 6,975 1,055 1,713 6,756 4,720 34,523 55,742
--------- -------- -------- --------- -------- -------- --------
Mortgage-backed
securities(3) ............... 576 509 451 954 3,075 -- 5,565
Mortgage loans held for
sale.......................... 5,620 5,620
Investment securities(4) ...... 19,183 1,000 -- -- -- -- 20,183
Other interest-earning
assets........................ 26,220 26,220
--------- --------
Total interest-earning
assets ..................... $ 58,574 $ 2,564 $ 2,164 $ 7,710 $ 7,795 $ 34,523 $113,330
========= ======== ======== ========= ======== ======== ========
Interest-bearing liabilities:
Transaction accounts ............ $ 5,363 $ 5,363
Money market accounts ........... 7,710 7,710
Other savings accounts ........... 772 772
Passbook accounts(5) ............ 3,897 3,313 2,816 4,787 11,170 -- 25,983
Certificate of deposit over
100,000........................ 8,277 531 103 400 -- -- 9,311
Certificate of deposit under
100,000 ....................... 40,994 5,951 2,074 1,204 520 9 50,752
Repurchase agreement............. 1,824 956 173 -- -- -- 2,953
--------- -------- -------- --------- -------- -------- --------
Total interest-bearing
liabilities .................. $ 68,837 $ 10,751 $ 5,166 $ 6,391 $ 11,690 $ 9 $102,844
========= ======== ======== ========= ======== ======== ========
Interest-bearing assets net of
interest-bearing liabilities .... (10,263) (8,187) (3,002) 1,319 (3,895) 34,514 10,486
Cumulative excess (deficiency)
interest-bearing assets over
interest-bearing liabilities .... (10,263) (18,450) (21,452) (20,133) (24,028) 10,486
Cumulative excess (deficiency)
of interest-earning assets
over interest-bearing liabili-
ties as a percentage of total
assets ........................ -8.26% -14.84% -17.26% -16.20% -19.33% 8.44%
</TABLE>
- ------------
(1) Net of deferred loan fees and the allowance for loan losses.
(2) Adjustable-rate loans are included in the period in which interest rates
are next scheduled to adjust rather than in the period in which they are
contractually due to mature. Fixed-rate loans are included in the period
in which they are contractually due to mature.
(3) Reflects the repricing of the underlying loans and/or the expected average
life of the mortgage-backed security.
(4) Reflects repricing or contractual maturity.
(5) For passbook accounts, which totalled $25.98 million, or 24.88% of total
deposits at June 30, 1997, assumes an annual decay rate of 15% through the
fifth year, based upon historical trends.
<PAGE>
EXHIBIT I-9
Pennsylvania Savings Bank
Loan Portfolio Composition
<TABLE>
<CAPTION>
At June 30, At December 31,
------------------------------------------ --------------------
1997 1996 1996
-------------------- -------------------- --------------------
Amount Percent Amount Percent Amount Percent
--------- --------- --------- --------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Residential real
estate loans..................... $47,932 76.24% $48,074 84.35% $49,616 85.71%
Real estate
construction loans............... 2,128 3.38 1,085 1.90 661 1.14
Multi-family real
estate loans..................... 711 1.13 665 1.17 654 1.13
Commercial real
estate loans..................... 9,688 15.41 5,609 9.84 5,575 9.63
Commercial business
loans............................ 1,190 1.89 594 1.04 368 0.64
Consumer loans(1)................. 1,218 1.95 964 1.70 1,016 1.75
------- ------- ------- ------- ------- -------
Total loans(2) ................. $62,867 100.00% $56,991 100.00% $57,890 100.00%
======= ======= ======= ======= ======= =======
Less:
Unearned fees and discounts...... $ 456 $ 502 $ 495
Undisbursed loan proceeds........ 64 13 5
Allowance for loan losses........ 207 208 207
-------- -------- --------
Net Loans ....................... $62,140 $56,268 $57,183
Total loans with:
Fixed rates ..................... $56,594 90.02% $ 52,291 91.75% $53,298 92.07%
Adjustable rate ................. 6,273 9.98 4,700 8.25 4,592 8.36
------- ------- ------- ------- ------- -------
Total loans(2) ................. $62,867 100.00% $56,991 100.00% $57,890 100.00%
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
At September 30,
------------------------------------------------------------------
1995 1994 1993
-------------------- -------------------- ----------------------
Amount Percent Amount Percent Amount Percent
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Residential real
estate loans..................... $44,074 83.27% $43,290 84.34% $45,802 86.40%
Real estate
construction loans .............. 829 1.57 339 0.66 651 1.23
Multi-family real
estate loans .................... 508 0.96 405 0.79 412 0.78
Commercial real
estate loans .................... 5,940 11.22 5,819 11.34 5,192 9.79
Commercial business
loans ........................... 602 1.14 780 1.52 236 0.45
Consumer loans(1) ................ 977 1.84 696 1.36 720 1.36
------- ------- ------- ------- ------- -------
Total loans(2) ................. $52,930 100.00% $51,329 100.00% $53,013 100.00%
======= ======= ======= ======= ======= =======
Less:
Unearned fees and discounts...... $ 464 $ --- $ ---
Undisbursed loan proceeds........ 5 24 10
Allowance for loan losses........ 208 208 187
------- ------- -------
Net Loans........................ $52,253 $51,097 $52,816
Total loans with:
Fixed rates...................... $48,673 91.96% $46,925 91.42% $48,673 91.81%
Adjustable rate.................. 4,257 8.04 4,404 8.58 4,340 8.19
------- ------- ------- ------- ------- -------
Total loans(2).................. $52,930 100.00% $51,329 100.00% $53,013 100.00%
======= ======= ======= ======= ======= =======
</TABLE>
- ------------
(1) Consists of both secured and unsecured personal loans.
(2) Includes loans originated and held by the Savings Bank's subsidiaries,
which amount to $4.6 million at December 31, 1996.
<PAGE>
EXHIBIT I-10
Pennsylvania Savings Bank
Loan Originations, Purchases, and Sales
<TABLE>
<CAPTION>
For the six months
ended For the year ended For the years ended
June 30, December 31, September 30,
--------------------------- -------------- ---------------------------
1997 1996 1996 1995 1994
-------- -------- -------------- -------- --------
<S> <C> <C> <C> <C> <C>
Total net loans receivable at
beginning of period ............... $ 57,183 $ 54,318 $ 54,791 $ 51,097 $ 52,815
-------- -------- -------- -------- --------
Originations Real estate loans ..... 12,850 10,135 20,062 8661 14041
Consumer and commercial
business loans .................... 1,234 402 1,033 951 398
-------- -------- -------- -------- --------
Total loan originations ............ 14,084 10,537 21,095 9,822 14,439
-------- -------- -------- -------- --------
Loans purchased .................... 0 0 0 0 0
-------- -------- -------- -------- --------
Principal repayments and sales of
loans ............................. (9,166) (8,587) (18,872) (8,447) (16,193)
-------- -------- -------- -------- --------
Increase (decrease) in loans in
process ........................... 59 (31) (19) 14
-------- -------- -------- -------- --------
Increase (decrease) in allowance
for loan losses ................... 0 0 0 0 21
-------- -------- -------- -------- --------
Net increase (decrease) in loans ... 4,957 1,950 2,392 1,156 (1,718)
-------- -------- -------- -------- --------
Total net loans receivable at end of
period ............................ $ 62,140 $ 56,268 $ 57,183 $ 52,253 $ 51,097
======== ======== ======== ======== ========
</TABLE>
<PAGE>
EXHIBIT I-11
Pennsylvania Savings Bank
Non-Performing Assets
<TABLE>
<CAPTION>
At June 30, At December 31, At September 30,
-------------------- -------------------- -----------------------------------------
1997 1996 1996 1995 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans past due 90 days or more as to
interest or principal and accruing interest $ 1,461 $ 1,993 $ 2,009 $ 1,645 $ 1,565 $ 1,417 $ 1,167 $ 1,174
Nonaccrual loans(1) ........................ 1,424 667 770 607 770 738 344 645
Loans restructured to provide a reduction
or deferral of interest principal ......... -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- --------
Total nonperforming loans .................. 2,885 2,660 2,779 2,252 2,335 2,155 1,511 1,819
Real estate owned (REO) .................... 467 449 465 528 482 330 486 163
--------- --------- --------- --------- --------- --------- --------- --------
Total nonperforming assets ................. $ 3,352 $ 3,109 $ 3,244 $ 2,780 $ 2,817 $ 2,486 $ 1,997 $ 1,982
========= ========= ========= ========= ========= ========= ========= ========
Nonperforming loans to total loans ......... 4.6 4.6 4.8 4.1 4.4 4.2 2.8 3.71%
Nonperforming assets to total assets ....... 2.7 2.5 2.7 2.4 2.4 2.4 2.0 2.17
Allowance for loan losses to total loans ... 0.3 0.3 0.3 0.3 0.3 0.4 0.3 0.38
Allowance for loan losses to
nonperforming loans ....................... 7.1 7.8 7.4 9.2 8.9 9.6 12.3 10.28
Allowance for loan losses to
nonperforming assets ...................... 6.1 6.6 6.3 7.4 7.3 8.3 9.3 9.43
Net charge-offs as a percentage of total
loans ..................................... -- -- 0.2 0.1 0.05 -- -- --
</TABLE>
(1) Except in the case of residential and commercial real estate loans, the
Savings Bank classifies as nonperforming all loans three months or more
delinquent.
<PAGE>
EXHIBIT I-12
Pennsylvania Savings Bank
Deposit Composition
<TABLE>
<CAPTION>
At June 30,
--------------------------------------------------------------------------
1997 1996
------------------------------------ -----------------------------------
Weighted Weighted
Average Average
% of Nominal % of Nominal
Balance Deposits Rate Balance Deposits Rate
---------- ---------- ---------- ---------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Savings deposit accounts ............... $ 28,118 26.92% 2.49% $ 31,126 30.39% 2.50%
NOW accounts ........................... 9,176 8.79 1.09 12,151 11.86 0.66
Money market accounts .................. 7,710 7.38 3.63 5,740 5.60 3.57
Retail certificate of deposit ......... 54,147 51.85 5.41 49,683 48.51 5.31
Jumbo certificates of deposit(1) ...... 5,286 5.06% 5.72% 3,727 3.64 5.52%
--------- ------- --------- --------
Total deposits ........................ $104,437 100.00% $102,427 100.00%
========= ======= ========= ========
</TABLE>
<TABLE>
<CAPTION>
At December 31, At September 30,
------------------------------------ ----------------------------------
1996 1995
------------------------------------ ----------------------------------
Weighted Weighted
Average Average
% of Nominal % of Nominal
Balance Deposits Rate Balance Deposits Rate
---------- ---------- ---------- --------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Savings deposit accounts ............... $ 28,992 28.83% 2.49% $33,263 34.63% 3.00%
NOW accounts ........................... 9,105 9.05 1.09 3,845 4.00 1.04
Money market accounts .................. 6,266 6.23 3.63 4,884 5.08 3.61
Retail certificate of deposit ......... 50,175 49.89 5.41 49,243 51.27 5.55
Jumbo certificates of deposit(1) ...... 6,036 6.00 5.72% 4,818 5.02 5.62%
--------- ------- -------- -------
Total deposits ........................ $100,574 100.00% $96,053 100.00%
========= ======= ======== =======
</TABLE>
1 _________________________
2 (1) Includes only certificates of deposit of greater than $100,000 bearing
3 negotiated rates.
<PAGE>
EXHIBIT I-13
Pennsylvania Savings Bank
Deposit Maturities
<TABLE>
<CAPTION>
Period to Maturity from
------------------------------------------------------
June 30, 1997
------------------------------------------------------
Within One One to
Year Three Years Thereafter Total
------------ ------------- ------------ --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
4.00% - Less ............ $ 350 $ 246 $ 4 $ 600
4.001% - 6.000% ......... 45,940 7,037 2,116 55,093
6.001% - 8.000% ......... 2,064 1,306 284 3,654
8.001% - 10.000% ...... 36 25 25 86
10.001% - 99.999% ...... -- -- -- --
-------- ------- ------- --------
Total .................. $48,390 $8,614 $2,429 $59,433
======== ======= ======= ========
</TABLE>
<PAGE>
EXHIBIT II-1
Pennsylvania Savings Bank
List of Office Locations
Properties
As of June 30, 1997, the Savings Bank conducted operations through an
executive/administrative office, six, (6) full-service offices and a branch
administrative office. The Savings Bank owns five (5) of the six (6)
full-service offices and the branch administrative office. The Savings Bank is
leasing its Center City Philadelphia full-service office and executive office
for a term of eleven years.
<PAGE>
Exhibit II-2
Historical Interest Rates(1)
Prime 90 Day One Year 30 Year
Year/Qtr. Ended Rate T-Bill T-Bill T-Bond
- --------------- ---- ------ ------ ------
1991: Quarter 1 8.75% 5.92% 6.24% 8.26%
Quarter 2 8.50% 5.72% 6.35% 8.43%
Quarter 3 8.00% 5.22% 5.38% 7.80%
Quarter 4 6.50% 3.95% 4.10% 7.47%
1992: Quarter 1 6.50% 4.15% 4.53% 7.97%
Quarter 2 6.50% 3.65% 4.06% 7.79%
Quarter 3 6.00% 2.75% 3.06% 7.38%
Quarter 4 6.00% 3.15% 3.59% 7.40%
1993: Quarter 1 6.00% 2.95% 3.18% 6.93%
Quarter 2 6.00% 3.09% 3.45% 6.67%
Quarter 3 6.00% 2.97% 3.36% 6.03%
Quarter 4 6.00% 3.06% 3.59% 6.34%
1994: Quarter 1 6.25% 3.56% 4.44% 7.09%
Quarter 2 7.25% 4.22% 5.49% 7.61%
Quarter 3 7.75% 4.79% 5.94% 7.82%
Quarter 4 8.50% 5.71% 7.21% 7.88%
1995: Quarter 1 9.00% 5.86% 6.47% 7.43%
Quarter 2 9.00% 5.57% 5.63% 6.63%
Quarter 3 8.75% 5.42% 5.68% 6.51%
Quarter 4 8.50% 5.09% 5.14% 5.96%
1996: Quarter 1 8.25% 5.14% 5.38% 6.67%
Quarter 2 8.25% 5.16% 5.68% 6.87%
Quarter 3 8.25% 5.03% 5.69% 6.92%
Quarter 4 8.25% 5.18% 5.49% 6.64%
1997: Quarter 1 8.50% 5.32% 6.00% 7.10%
Quarter 2 8.50% 5.17% 5.66% 6.78%
September 19, 1997 8.50% 5.04% 5.46% 6.38%
(1) End of period data.
Source: SNL Securities.
<PAGE>
Exhibit II-2
STATE DEMOGRAPHIC REPORT
State 00
State Name UNITED STATES
<TABLE>
<CAPTION>
Population 1997 Age Distribution 1997 Average Disposable Income
- ---------- --------------------- ------------------------------
<S> <C> <C> <C> <C> <C>
1980 226,542,204 0-4 7.2 Total $35,584
1990 248,709,873 5-9 7.4 Householder <35 $30,999
1997 267,805,150 10-14 7.1 Householder 35-44 $40,281
2002 281,208,787 15-19 7.1 Householder 45-54 $45,940
20-24 6.5 Householder 55-64 $39,611
Population Growth Rate 1 25-44 31.4 Householder 65+ $22,603
Households 45-64 20.5
- ---------- 65-84 11.3
1990 91,947,410 85+ 1.4 Spending Potential Index*
1997 99,019,931 18+ 74.3 -------------------------
2002 104,000,643 Median Age Auto Loan 100
---------- Home Loan 100
1990 32.9 Investments 100
Household Growth Rate 1 1997 34.8 Retirement Plans 100
Average Household Size 2.64 Home Repair 100
Male/Female Ratio 95.9 Lawn & Garden 100
Families Per Capita Income $18,100 Remodeling 100
- -------- Appliances 100
1990 64,517,947 1997 Household Income* Electronics 100
1997 68,999,546 ---------------------- Furniture 100
Base 99,019,225 Restaurants 100
Family Growth Rate 0.9 % <$15K 17.7 Sporting Goods 100
% $15K-25K 14.4 Theater/Concerts 100
Race 1990 1997 % $25K-50K 33.5 Toys & Hobbies 100
- ---- ---- ---- % $50K-100K 26.5 Travel 100
% White 80.3 78.4 % $100K-150K 5.4 Video Rental 100
% Black 12.1 12.4 % >$150K 2.6 Apparel 100
% Asian Median Household Income Auto Aftermarket 100
/Pacific Isl. 2.9 3.7 ------------------------ Health Insurance 100
% Hispanic* 9 10.8 1997 $36,961
2002 $42,042
Pets & Supplies 100
</TABLE>
- --------------------------------------------------------------------------------
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
- --------------------------------------------------------------------------------
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 10/8/97
<PAGE>
STATE DEMOGRAPHIC REPORT
State 42
State Name PENNSYLVANIA
<TABLE>
<CAPTION>
Population 1997 Age Distribution 1997 Average Disposable Income
- ---------- --------------------- ------------------------------
<S> <C> <C> <C> <C> <C>
1980 11,864,720 0-4 6.3 Total $34,866
1990 11,881,643 5-9 6.9 Householder <35 $31,173
1997 12,064,301 10-14 6.8 Householder 35-44 $40,274
2002 12,242,288 15-19 6.9 Householder 45-54 $46,631
20-24 6.2 Householder 55-64 $39,290
Population Growth Rate 0.2 25-44 29.3 Householder 65+ $21,312
Households 45-64 21.7
- ---------- 65-84 14 Spending Potential Index*
1990 4,495,966 85+ 1.8 -------------------------
1997 4,580,592 18+ 76.1 Auto Loan 99
2002 4,662,073 Median Age Home Loan 94
---------- Investments 102
1990 35 Retirement Plans 97
Household Growth Rate 0.3 1997 37.2 Home Repair 99
Average Household Size 2.56 Lawn & Garden 98
Male/Female Ratio 92.6 Remodeling 98
Families Per Capita Income $18,013 Appliances 100
- -------- Electronics 97
1990 3,155,989 Furniture 99
1997 3,147,326 1997 Household Income* Restaurants 97
---------------------- Sporting Goods 99
Base 4,580,564 Theater/Concerts 98
Family Growth Rate 0 % <$15K 17.7 Toys & Hobbies 101
% $15K-25K 14.8 Travel 99
Race 1990 1997 % $25K-50K 35 Video Rental 98
- ---- ---- ---- % $50K-100K 25.3 Apparel 97
% White 88.5 87.5 % $100K-150K 4.9 Auto Aftermarket 97
% Black 9.2 9.5 % >$150K 2.3 Health Insurance 101
% Asian Median Household Income Pets & Supplies 100
/Pacific Isl. 1.2 1.6 -----------------------
% Hispanie 2 2.5 1997 $36,131
2002 $41,557
</TABLE>
- --------------------------------------------------------------------------------
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
- --------------------------------------------------------------------------------
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 10/8/97
<PAGE>
MSA DEMOGRAPHIC REPORT
MSA 6160
MSA Name PHILADELPHIA, PA-NJ
<TABLE>
<CAPTION>
Population 1997 Age Distribution 1997 Average Disposable Income
- ---------- --------------------- ------------------------------
<S> <C> <C> <C> <C> <C>
1980 4,781,235 0-4 6.9 Total $41,951
1990 4,922,175 5-9 7.5 Householder <35 $37,183
1997 4,956,089 10-14 7.1 Householder 35-44 $46,106
2002 5,030,763 15-19 6.6 Householder 45-54 $54,327
20-24 5.9 Householder 55-64 $47,794
Population Growth Rate 0.1 25-44 31.2 Householder 65+ $26,186
Households 45-64 20.8
- ---------- 65-84 12.4 Spendinq Potential Index*
1990 1,801,159 85+ 1.6 -------------------------
1997 1,821,487 18+ 74.7 Auto Loan 101
2002 1,852,009 Median Age Home Loan 105
---------- Investments 108
1990 33.7 Retirement Plans 106
Household Growth Rate 0.2 1997 35.8 Home Repair 101
Average Household Size 2.65 Lawn & Garden 102
Male/Female Ratio 92.4 Remodeling 95
Families Per Capita Income $21,830 Appliances 102
- -------- Electronics 101
1990 1,259,166 Furniture 107
1997 1,239,697 1997 Household Income* Restaurants 104
---------------------- Sporting Goods 103
Base 1,821,461 Theater/Concerts 105
Family Growth Rate -0.2 % **$15K 13.3 Toys & Hobbies 103
% $15K-25K 10.8 Travel 107
Race 1990 1997 % $25K-50K 31.2 Video Rental 100
- ---- ---- ---- % $50K-100K 32.3 Apparel 105
% White 76.6 74.6 % $100K-150K 8.2 Auto Aftermarket 103
% Black 19.1 19.8 % >$150K 4.1 Health Insurance 99
% Asian Median Household Income Pets & Supplies 102
/Pacific Isl. 2.1 3 -----------------------
% Hispanic* 3.6 4.5 1997 $45,014
2002 $52,512
</TABLE>
- --------------------------------------------------------------------------------
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
- --------------------------------------------------------------------------------
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 10/8/97
<PAGE>
COUNTY DEMOGRAPHIC REPORT
State/County 42101
County Name PHILADELPHIA PA
<TABLE>
<CAPTION>
Population 1997 Age Distribution 1997 Average Disposable Income
- ---------- --------------------- -------------------------------
<S> <C> <C> <C> <C> <C>
1980 1,688,210 0-4 7.1 Total $31,041
1990 1,585,577 5-9 7.2 Householder <35 $28,855
1997 1,458,266 10-14 6.7 Householder 35-44 $35,093
2002 1,421,700 15-19 6.8 Householder 45-54 $40,070
20-24 6.8 Householder 55-64 $35,821
Population Growth Rate -1.1 25-44 30.6 Householder 65+ $20,703
Households 45-64 19.5
- ---------- 65-84 13.4 Spending Potential Index*
1990 603,075 85+ 1.9 -------------------------
1997 559,525 18+ 75.3 Auto Loan 94
2002 546,772 Median Age Home Loan 90
---------- Investments 99
1990 33.2 Retirement Plans 88
Household Growth Rate -1 1997 35.2 Home Repair 99
Average Household Size 2.54 Lawn & Garden 93
Male/Female Ratio 87.7 Remodeling 85
Families Per Capita Income $16,210 Appliances 97
- -------- Electronics 91
1990 378,045 Furniture 98
1997 340,828 1997 Household Income* Restaurants 88
---------------------- Sporting Goods 92
Base 559,519 Theater/Concerts 94
Family Growth Rate -1.4 % **$15K 23.9 Toys & Hobbies 93
% $15K-25K 15.3 Travel 100
Race 1990 1997 % $25K-50K 33.1 Video Rental 97
- ---- ---- ---- % $50K-100K 22.4 Apparel 93
% White 53.5 49.3 % $100K-150K 3.8 Auto Aftermarket 94
% Black 39.9 42.3 % >$150K 1.6 Health Insurance 93
% Asian Median Household Income Pets & Supplies 94
/Pacific Isl. 2.7 3.7 -----------------------
% Hispanic 5.6 7 1997 $31,634
2002 $37,357
</TABLE>
- --------------------------------------------------------------------------------
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
- --------------------------------------------------------------------------------
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 10/8/97
<PAGE>
COUNTY DEMOGRAPHIC REPORT
State/County 42091
County Name MONTGOMERY PA
<TABLE>
<CAPTION>
Population 1997 Age Distribution 1997 Average Disposable Income
- ---------- --------------------- -------------------------------
<S> <C> <C> <C> <C> <C>
1980 643,371 0-4 6.2 Total $51,171
1990 678,111 5-9 7.3 Householder <35 $42,203
1997 713,698 10-14 7.1 Householder 35-44 $54,903
2002 738,190 15-19 5.9 Householder 45-54 $65,118
20-24 4.8 Householder 55-64 $58,818
Population Growth Rate 0.7 25-44 30.8 Householder 65+ $33,739
Households 45-64 22.3
- ---------- 65-84 13.6
1990 254,995 85+ 2 Spending Potential Index*
1997 270,454 18+ 75.8 -------------------------
2002 281,065 Median Age Auto Loan 105
---------- Home Loan 116
1990 35.8 Investments 118
Household Growth Rate 0.8 1997 37.8 Retirement Plans 118
Average Household Size 2.57 Home Repair 106
Male/Female Ratio 93.1 Lawn & Garden 111
Families Per Capita Income $27,526 Remodeling 101
- -------- Appliances 105
1990 181,075 Electronics 108
1997 187,512 1997 Household Income* Furniture 114
---------------------- Restaurants 116
Family Growth Rate 0.5 Base 270,452 Sporting Goods 109
% <$15K 7.5 Theater/Concerts 114
% $15K-25K 9 Toys & Hobbies 109
Race 1990 1997 % $25K-50K 30.1 Travel 116
- ---- ---- ---- % $50K-100K 35.6 Video Rental 101
% White 91.4 89.4 % $100K-l50K 10.4 Apparel 116
% Black 5.8 6.6 % >$150K 7.3 Auto Aftermarket 109
% Asian Health Insurance 104
/Pacific Isl. 2.4 3.4 Median Household Income Pets & Supplies 105
% Hispanie 1.2 1.7 -----------------------
1997 $52,647
2002 $58,752
</TABLE>
- --------------------------------------------------------------------------------
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current dollars,
including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
- --------------------------------------------------------------------------------
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 10/8/97
<PAGE>
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
California Companies
--------------------
AHM Ahmanson and Co. H.F. of CA NYSE Nationwide M.B. 47,532 391 12-31 10/72 56.56 5,505
GDW Golden West Fin. Corp. of CA NYSE Nationwide M.B. 39,095 246 12-31 05/59 90.94 5,160
GSB Glendale Fed. Bk, FSB of CA NYSE CA Div. 16,218 154 06-30 10/83 30.75 1,548
CSA Coast Savings Financial of CA NYSE California R.E. 9,103 92 12-31 12/85 50.44 939
DSL Downey Financial Corp. of CA NYSE Southern CA Thrift 5,886 82 12-31 01/71 23.75 635
FED FirstFed Fin. Corp. of CA NYSE Los Angeles CA R.E. 4,193 25 12-31 12/83 33.37 353
WES Westcorp Inc. of Orange CA NYSE California Div. 3,678 26 12-31 05/86 21.81 571
BPLS Bank Plus Corp. of CA OTC Los Angeles CA R.E. 3,534 33 12-31 / 12.00 232
BVCC Bay View Capital Corp. of CA OTC San Francisco CA M.B. 3,096 45 12-31 05/86 28.13 365
PFFB PFF Bancorp of Pomona CA OTC Southern CA Thrift 2,631 23 03-31 03/96 20.00 374
CENF CENFED Financial Corp. of CA OTC Los Angeles CA Thrift 2,295 18 12-31 10/91 35.87 205
FRC First Republic Bank of CA (3) NYSE CA,NV M.B. 2,238 13 12-31 / 27.62 268
AFFFZ America First Fin. Fund of CA OTC San Francisco CA Div. 2,191 36 12-31 / 41.62 250
HEMT HF Bancorp of Hemet CA OTC Southern CA Thrift 984 M 19 06-30 06/95 15.37 97
REDF RedFed Bancorp of Redlands CA OTC Southern CA Thrift 912 14 12-31 04/94 17.50 126
HTHR Hawthorne Fin. Corp. of CA OTC Southern CA Thrift 863 6 12-31 / 17.25 52
ITLA Imperial Thrift & Loan of CA (3) OTC Los Angeles CA R.E. 850 9 12-31 / 18.75 147
QCBC Quaker City Bancorp of CA OTC Los Angeles CA R.E. 801 8 06-30 12/93 22.37 105
PROV Provident Fin. Holdings of CA OTC Southern CA M.B. 615 9 06-30 06/96 19.75 97
HBNK Highland Federal Bank of CA OTC Los Angeles CA R.E. 504 8 12-31 / 30.75 71
MBBC Monterey Bay Bancorp of CA OTC West Central CA Thrift 413 7 12-31 02/95 18.25 59
SGVB SGV Bancorp of W. Covina CA OTC Los Angeles CA Thrift 409 8 06-30 06/95 17.00 40
PCCI Pacific Crest Capital of CA (3) OTC Southern CA R.E. 371 3 12-31 / 17.00 50
BYFC Broadway Fin. Corp. of CA OTC Los Angeles CA Thrift 122 3 12-31 01/96 11.00 9
PAMM PacificAmerica Money Ctr of CA (3) OTC Los Angeles CA Div. 112 M 1 12-31 06/96 23.75 90
Florida Companies
-----------------
OCN Ocwen Financial Corp. of FL OTC Southeast FL Div. 2,787 1 12-31 / 42.69 1,144
BANC BankAtlantic Bancorp of FL OTC Southeastern FL M.B. 2,730 56 12-31 11/83 13.50 303
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Florida Companies (continued)
-----------------------------
BKUNA BankUnited SA of FL OTC Miami FL Thrift 1,807 14 09-30 12/85 12.87 114
FFPB First Palm Beach Bancorp of FL OTC Southeast FL Thrift 1,666 40 09-30 09/93 34.75 175
HARB Harbor FSB, MHC of FL (46.6) OTC Eastern FL Thrift 1,117 23 09-30 01/94 57.50 286
FFFL Fidelity FSB, MHC of FL (47.7) OTC Southeast FL Thrift 999 20 12-31 01/94 27.25 185
CMSV Commty. Svgs, MHC of FL (48.5) OTC Southeast FL Thrift 700 19 12-31 10/94 32.12 163
FFLC FFLC Bancorp of Leesburg FL OTC Central FL Thrift 387 9 12-31 01/94 31.50 73
FFFG F.F.O. Financial Group of FL OTC Central FL R.E. 320 M 11 12-31 10/88 6.75 57
Mid-Atlantic Companies
----------------------
DME Dime Bancorp, Inc. of NY (3) NYSE NY,NJ,FL M.B. 20,087 86 12-31 08/86 21.06 2,184
GPT GreenPoint Fin. Corp. of NY (3) NYSE New York City NY Thrift 13,300 74 12-31 01/94 60.31 2,717
SVRN Sovereign Bancorp of PA OTC PA,NJ,DE M.B. 10,898 120 12-31 08/86 16.00 1,120
ASFC Astoria Financial Corp. of NY OTC NY Thrift 7,665 45 12-31 11/93 49.69 1,042
LISB Long Island Bancorp, Inc of NY OTC Long Island NY M.B. 5,909 36 09-30 04/94 46.56 1,116
RCSB RCSB Financial, Inc. of NY (3) OTC NY M.B. 4,032 M 36 11-30 04/86 53.13 775
ALBK ALBANK Fin. Corp. of Albany NY OTC Upstate NY,MA,VT Thrift 3,602 70 12-30 04/92 45.87 588
ROSE T R Financial Corp. of NY (3) OTC New York City NY Thrift 3,552 15 12-31 06/93 30.00 526
NYB New York Bancorp, Inc. of NY NYSE Southeastern NY Thrift 3,284 29 09-30 01/88 29.62 640
RSLN Roslyn Bancorp, Inc. of NY (3) OTC Long Island NY M.B. 3,159 6 12-31 01/97 22.50 982
GRTR The Greater New York SB of NY (3) OTC New York NY Div. 2,571 M 14 12-31 06/87 23.19 318
CMSB Cmnwealth Bancorp of PA OTC Philadelphia PA M.B. 2,289 39 06-30 06/96 19.50 333
NWSB Northwest SB, MHC of PA (30.7) OTC Pennsylvania Thrift 2,091 53 06-30 11/94 25.37 593
MLBC ML Bancorp of Villanova PA OTC Philadelphia PA M.B. 2,071 18 03-31 08/94 25.94 293
HARS Harris SB, MHC of PA (24.3) OTC Southeast PA Thrift 2,044 31 12-31 01/94 44.00 494
RELY Reliance Bancorp, Inc. of NY OTC New York City NY Thrift 1,977 28 06-30 03/94 32.12 282
HAVN Haven Bancorp of Woodhaven NY OTC New York City NY Thrift 1,782 20 12-31 09/93 43.00 188
JSB JSB Financial, Inc. of NY AMEX New York City NY Thrift 1,531 13 12-31 06/90 47.50 468
WSFS WSFS Financial Corp. of DE (3) OTC DE Div. 1,509 16 12-31 11/86 16.37 203
QCSB Queens County Bancorp of NY (3) OTC New York City NY Thrift 1,467 13 12-31 11/93 52.37 533
OCFC Ocean Fin. Corp. of NJ OTC Eastern NJ Thrift 1,448 10 12-31 07/96 34.62 298
PFSB PennFed Fin. Services of NJ OTC Northern NJ Thrift 1,322 17 06-30 07/94 30.50 147
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
----------------------------------
DIME Dime Community Bancorp of NY OTC New York City NY Thrift 1,315 15 06-30 06/96 20.00 262
YFED York Financial Corp. of PA OTC PA,MD Thrift 1,162 22 06-30 02/84 24.37 171
MFSL Maryland Fed. Bancorp of MD OTC MD Thrift 1,157 25 02-28 06/87 48.00 154
FSLA First SB SLA MHC of NJ (47.5) OTC Eastern NJ Thrift 1,033 16 12-31 07/92 34.75 252
PVSA Parkvale Financial Corp of PA OTC Southwestern PA Thrift 991 28 06-30 07/87 32.25 131
PKPS Poughkeepsie Fin. Corp. of NY OTC Southeast NY Thrift 880 13 12-31 11/85 7.87 99
PSBK Progressive Bank, Inc. of NY (3) OTC Southeast NY Thrift 879 17 12-31 08/84 32.75 125
FFIC Flushing Fin. Corp. of NY (3) OTC New York City NY Thrift 860 7 12-31 11/95 22.12 176
PWBC PennFirst Bancorp of PA OTC Western PA Thrift 817 9 12-31 06/90 17.00 90
MBB MSB Bancorp of Middletown NY (3) AMEX Southeastern NY Thrift 814 16 12-31 09/92 24.75 70
GAF GA Financial Corp. of PA AMEX Pittsburgh PA Thrift 750 13 12-31 03/96 19.00 152
IBSF IBS Financial Corp. of NJ OTC Southwest NJ Thrift 733 10 09-30 10/94 16.62 183
FBBC First Bell Bancorp of PA OTC Pittsburgh PA Thrift 714 7 12-31 06/95 15.87 103
SFIN Statewide Fin. Corp. of NJ OTC Northern NJ Thrift 673 16 12-31 10/95 20.62 97
THRD TF Financial Corp. of PA OTC Philadelphia PA Thrift 641 14 06-30 07/94 21.37 87
TSBS Trenton SB,FSB MHC of NJ(35.9) OTC Central NJ Thrift 631 14 12-31 08/95 29.87 270
FSNJ Bayonne Banchsares of NJ OTC Northern NJ Thrift 618 P 4 03-31 08/97 12.37 111
FMCO FMS Financial Corp. of NJ OTC Southern NJ Thrift 555 18 12-31 12/88 27.50 66
FSPG First Home Bancorp of NJ OTC NJ,DE Thrift 522 10 12-31 04/87 22.25 60
PULS Pulse Bancorp of S. River NJ OTC Central NJ Thrift 520 4 09-30 09/86 23.00 71
ANBK American Nat'l Bancorp of MD OTC Baltimore MD R.E. 505 M 10 07-31 10/95 20.50 74
AHCI Ambanc Holding Co., Inc. of NY (3) OTC East-Central NY Thrift 485 9 12-31 12/95 15.37 68
LVSB Lakeview SB of Paterson NJ OTC Northern NJ Thrift 482 M 8 07-31 12/93 37.25 86
PFNC Progress Financial Corp. of PA OTC Southeastern PA M.B. 419 9 12-31 07/83 14.31 55
CNY Carver Bancorp, Inc. of NY AMEX New York, NY Thrift 414 7 03-31 10/94 12.12 28
SHEN First Shenango Bancorp of PA OTC Western PA Thrift 411 4 12-31 04/93 31.50 65
RARB Raritan Bancorp. of Raritan NJ (3) OTC Central NJ Thrift 379 6 12-31 03/87 22.25 54
PBCI Pamrapo Bancorp, Inc. of NJ OTC Northern NJ Thrift 371 8 12-31 11/89 23.37 66
FSBI Fidelity Bancorp, Inc. of PA OTC Southwestern PA Thrift 363 8 09-30 06/88 21.25 33
FOBC Fed One Bancorp of Wheeling WV OTC Northern WV,OH Thrift 357 9 12-31 01/95 23.00 55
HARL Harleysville SA of PA OTC Southeastern PA Thrift 337 4 09-30 08/87 25.75 43
CVAL Chester Valley Bancorp of PA OTC Southeastern PA Thrift 324 6 06-30 03/87 23.00 50
FKFS First Keystone Fin. Corp of PA OTC Philadelphia PA Thrift 321 5 09-30 01/95 29.59 36
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
----------------------------------
EQSB Equitable FSB of Wheaton MD OTC Central MD Thrift 308 4 09-30 09/93 42.00 25
LFBI Little Falls Bancorp of NJ OTC New Jersey Thrift 300 6 12-31 01/96 18.12 50
WVFC WVS Financial Corp. of PA (3) OTC Pittsburgh PA Thrift 295 5 06-30 11/93 28.25 49
YFCB Yonkers Fin. Corp. of NY OTC Yonkers NY Thrift 288 4 09-30 04/96 19.25 58
FBER First Bergen Bancorp of NJ OTC Northern NJ Thrift 285 4 09-30 04/96 18.37 55
CATB Catskill Fin. Corp. of NY (3) OTC Albany NY Thrift 284 4 09-30 04/96 16.62 78
FIBC Financial Bancorp, Inc. of NY OTC New York, NY Thrift 282 5 09-30 08/94 23.31 40
LFED Leeds FSB, MHC of MD (36.3) OTC Baltimore MD Thrift 282 M 1 06-30 05/94 30.25 105
IFSB Independence FSB of DC OTC Washington DC Ret. 263 M 2 12-31 06/85 14.50 19
WYNE Wayne Bancorp of NJ OTC Northern NJ Thrift 261 0 12-31 06/96 24.75 52
WSB Washington SB, FSB of MD AMEX Southeastern MD Thrift 258 M 4 07-31 / 7.00 30
PHFC Pittsburgh Home Fin. of PA OTC Pittsburgh PA Thrift 256 6 09-30 04/96 19.25 38
GDVS Greater DV SB,MHC of PA (19.9) (3) OTC Southeast PA Thrift 244 7 12-31 03/95 24.00 79
PHSB Ppls Home SB, MHC of PA (45.0) OTC Western PA Thrift 229 P 9 12-31 07/97 16.25 45
ESBK The Elmira SB FSB of Elmira NY (3) OTC NY,PA Thrift 228 6 12-31 03/85 28.75 20
SBFL SB Fngr Lakes MHC of NY (33.1) OTC Western NY Thrift 217 4 04-30 11/94 24.25 43
HRBF Harbor Federal Bancorp of MD OTC Baltimore MD Thrift 216 9 03-31 08/94 22.00 37
LARL Laurel Capital Group of PA OTC Southwestern PA Thrift 212 6 06-30 02/87 24.75 36
PEEK Peekskill Fin. Corp. of NY OTC Southeast NY Thrift 183 3 06-30 12/95 17.00 54
PLSK Pulaski SB, MHC of NJ (46.0) OTC New Jersey Thrift 177 6 12-31 04/97 16.75 35
SFED SFS Bancorp of Schenectady NY OTC Eastern NY Thrift 173 3 12-31 06/95 22.00 27
AFED AFSALA Bancorp, Inc. of NY OTC Central NY Thrift 159 4 09-30 10/96 17.00 25
SKBO First Carnegie,MHC of PA(45.0) OTC Western PA Thrift 150 P 3 03-31 04/97 16.25 37
PRBC Prestige Bancorp of PA OTC Western PA Thrift 136 0 12-31 06/96 17.62 16
TPNZ Tappan Zee Fin., Inc. of NY OTC Southeast NY Thrift 120 S 1 03-31 10/95 18.00 27
GOSB GSB Financial Corp. of NY OTC Southeast NY Thrift 114 P 2 09-30 07/97 16.00 36
WWFC Westwood Fin. Corp. of NJ OTC Northern NJ Thrift 111 2 03-31 06/96 27.44 18
AFBC Advance Fin. Bancorp of WV OTC Northern Neck WV Thrift 104 M 2 06-30 01/97 15.75 17
WHGB WHG Bancshares of MD OTC Baltimore MD Thrift 100 5 09-30 04/96 15.63 23
ALBC Albion Banc Corp. of Albion NY OTC Western NY Thrift 69 2 09-30 07/93 23.25 6
PWBK Pennwood SB of PA (3) OTC Pittsburgh PA Thrift 50 3 12-31 07/96 17.25 10
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COFI Charter One Financial of OH OTC OH,MI Div. 14,565 155 12-31 01/88 58.50 2,702
CFB Commercial Federal Corp. of NE NYSE NE,CO,KS,OK,IA M.B. 7,097 107 06-30 12/84 46.50 1,002
FFHC First Financial Corp. of WI OTC WI,IL Div. 5,931 129 12-31 12/80 36.87 1,335
SPBC St. Paul Bancorp, Inc. of IL OTC Chicago IL Div. 4,611 52 12-31 05/87 24.50 833
SECP Security Capital Corp. of WI OTC Wisconsin Div. 3,673 42 06-30 01/94 112.25 1,034
MAFB MAF Bancorp of IL OTC Chicago IL Thrift 3,236 M 20 12-31 01/90 34.25 527
CTZN CitFed Bancorp of Dayton OH OTC Dayton OH M.B. 3,098 33 03-31 01/92 48.25 417
GTFN Great Financial Corp. of KY OTC Kentucky M.B. 3,046 45 12-31 03/94 42.25 583
ABCW Anchor Bancorp Wisconsin of WI OTC Wisconsin M.B. 1,926 33 03-31 07/92 29.00 262
STFR St. Francis Cap. Corp. of WI OTC Milwaukee WI Thrift 1,646 13 09-30 06/93 37.50 199
DNFC D&N Financial Corp. of MI OTC MI Ret. 1,609 37 12-31 02/85 21.00 172
FTFC First Fed. Capital Corp. of WI OTC Southern WI M.B. 1,530 M 44 12-31 11/89 25.62 234
FISB First Indiana Corp. of IN OTC Central IN M.B. 1,521 28 12-31 08/83 23.75 251
FLGS Flagstar Bancorp, Inc of MI OTC MI Thrift 1,519 M 15 12/31 / 21.25 290
ABCL Allied Bancorp of IL OTC Chicago IL M.B. 1,404 14 09-30 07/92 33.75 180
JSBA Jefferson Svgs Bancorp of MO OTC St. Louis MO,TX Thrift 1,297 M 32 12-31 04/93 38.00 190
AADV Advantage Bancorp of WI OTC WI,IL Thrift 1,020 15 09-30 03/92 48.62 157
OFCP Ottawa Financial Corp. of MI OTC Western MI Thrift 861 26 12-31 08/94 25.50 125
CFSB CFSB Bancorp of Lansing MI OTC Central MI Thrift 845 17 12-31 06/90 31.00 158
NASB North American SB of MO OTC KS,MO M.B. 737 7 09-30 09/85 52.00 116
GSBC Great Southern Bancorp of MO OTC Southwest MO Thrift 708 25 06-30 12/89 19.00 154
HOMF Home Fed Bancorp of Seymour IN OTC Southern IN Thrift 683 16 06-30 01/88 34.25 116
MSBK Mutual SB, FSB of Bay City MI OTC Michigan M.B. 673 22 12-31 07/92 14.12 60
SFSL Security First Corp. of OH OTC Northeastern OH R.E. 653 13 03-31 01/88 18.25 138
FNGB First Northern Cap. Corp of WI OTC Northeast WI Thrift 638 20 12-31 12/83 13.12 116
AVND Avondale Fin. Corp. of IL OTC Chicago IL Ret. 607 5 12-31 04/95 16.37 57
EMLD Emerald Financial Corp of OH OTC Cleveland OH Thrift 603 13 12-31 / 14.50 73
FFYF FFY Financial Corp. of OH OTC Youngstown OH Thrift 599 10 06-30 06/93 27.12 112
HMNF HMN Financial, Inc. of MN OTC Southeast MN Thrift 567 7 12-31 06/94 24.94 105
HFFC HF Financial Corp. of SD OTC South Dakota Thrift 562 19 06-30 04/92 25.25 75
FDEF First Defiance Fin.Corp. of OH OTC Northwest OH Thrift 552 9 06-30 10/95 15.25 143
FFBH First Fed. Bancshares of AR OTC Northern AR Thrift 535 12 12-31 05/96 21.25 104
FFOH Fidelity Financial of OH OTC Cincinnati OH Thrift 525 4 12-31 03/96 16.00 89
CBCI Calumet Bancorp of Chicago IL OTC Chicago IL Thrift 497 5 06-30 02/92 45.00 95
FBCI Fidelity Bancorp of Chicago IL OTC Chicago IL Thrift 490 5 09-30 12/93 23.62 66
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
CAFI Camco Fin. Corp. of OH OTC Eastern OH M.B. 490 7 12-31 / 22.00 71
FFSX First FS&LA. MHC of IA (46.1) OTC Western IA Thrift 469 13 06-30 07/92 30.00 85
HFGI Harrington Fin. Group of IN OTC Eastern IN Thrift 447 3 06-30 / 13.50 44
PERM Permanent Bancorp of IN OTC Southwest IN Thrift 433 12 03-31 04/94 23.50 47
SFSB SuburbFed Fin. Corp. of IL OTC IL,IN Thrift 427 12 12-31 03/92 28.50 36
FMBD First Mutual Bancorp of IL OTC Central IL Thrift 418 12 12-31 07/95 15.50 54
HALL Hallmark Capital Corp. of WI OTC Milwaukee WI Thrift 410 3 06-30 01/94 25.50 37
MCBS Mid Continent Bancshares of KS OTC Central KS M.B. 409 9 09-30 06/94 37.75 74
ASBI Ameriana Bancorp of IN OTC Eastern IN,OH Thrift 398 8 12-31 03/87 21.25 69
PMFI Perpetual Midwest Fin. of IA OTC EastCentral IA Thrift 397 5 12-31 03/94 22.37 42
WOFC Western Ohio Fin. Corp. of OH OTC Western OH Thrift 396 6 12-31 07/94 26.19 61
CBSB Charter Financial Inc. of IL OTC Southern IL Thrift 393 8 09-30 12/95 21.44 89
PFSL Pocahnts Fed, MHC of AR (47.0) OTC Northeast AR Thrift 379 6 09-30 04/94 35.00 57
SWBI Southwest Bancshares of IL OTC Chicago IL Thrift 378 6 12-31 06/92 20.50 54
FFHH FSF Financial Corp. of MN OTC Southern MN Thrift 378 11 09-30 10/94 20.00 61
FFKY First Fed. Fin. Corp. of KY OTC Central KY Thrift 377 8 06-30 07/87 22.75 95
CASH First Midwest Fin. Corp. of IA OTC IA,SD R.E. 375 12 09-30 09/93 18.78 51
PVFC PVF Capital Corp. of OH OTC Cleveland OH R.E. 356 M 9 06-30 12/92 19.75 50
HBEI Home Bancorp of Elgin IL OTC Northern IL Thrift 353 5 12-31 09/96 18.12 124
INBI Industrial Bancorp of OH OTC Northern OH Thrift 347 10 12-31 08/95 16.75 88
HVFD Haverfield Corp. of OH OTC Cleveland OH Thrift 346 10 12-31 03/85 29.00 55
KNK Kankakee Bancorp of IL AMEX Illinois Thrift 342 9 12-31 01/93 31.50 45
HBFW Home Bancorp of Fort Wayne IN OTC Northeast IN Thrift 335 9 09-30 03/95 23.50 59
HMCI Homecorp, Inc. of Rockford IL OTC Northern IL Thrift 332 9 12-31 06/90 17.00 29
SMFC Sho-Me Fin. Corp. of MO OTC Southwest MO Thrift 329 8 12-31 07/94 41.37 62
WFI Winton Financial Corp. of OH OTC Cincinnati OH R.E. 317 4 09-30 08/88 16.12 32
WCBI WestCo Bancorp of IL OTC Chicago IL Thrift 312 1 12-31 06/92 26.62 66
PFDC Peoples Bancorp of Auburn IN OTC Northeastern IN Thrift 288 6 09-30 07/87 29.25 67
GFCO Glenway Financial Corp. of OH OTC Cincinnati OH Thrift 287 6 06-30 11/90 27.75 32
CBK Citizens First Fin.Corp. of IL AMEX Central IL Thrift 272 6 12-31 05/96 18.25 47
FCBF FCB Fin. Corp. of Neenah WI OTC Eastern WI Thrift 271 M 6 03-31 09/93 26.50 108
FBCV 1st Bancorp of Vincennes IN OTC Southwestern IN M.B. 270 1 06-30 04/87 37.75 26
EFBI Enterprise Fed. Bancorp of OH OTC Cincinnati OH Thrift 257 M 5 09-30 10/94 22.00 44
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
WAYN Wayne S&L Co. MHC of OH (47.8) OTC Central OH Thrift 254 6 03-31 06/93 23.31 52
FFED Fidelity Fed. Bancorp of IN OTC Southwestern IN Thrift 250 M 4 06-30 08/87 8.87 22
MFBC MFB Corp. of Mishawaka IN OTC Northern IN Thrift 248 4 09-30 03/94 23.34 39
CAPS Capital Savings Bancorp of MO OTC Central MO Thrift 243 8 06-30 12/93 17.25 33
MBLF MBLA Financial Corp. of MO OTC Northeast MO Thrift 235 2 06-30 06/93 27.00 35
OHSL OHSL Financial Corp. of OH OTC Cincinnati, OH Thrift 230 4 12-31 02/93 25.00 30
LARK Landmark Bancshares of KS OTC Central KS Thrift 228 5 09-30 03/94 26.25 45
FFHS First Franklin Corp. of OH OTC Cincinnati OH Thrift 227 7 12-31 01/88 19.75 24
FFFD North Central Bancshares of IA OTC Central IA Thrift 213 4 12-31 03/96 17.62 57
BFFC Big Foot Fin. Corp. of IL OTC Chicago IL Thrift 212 M 3 07-31 12/96 17.00 43
CMRN Cameron Fin. Corp. of MO OTC Northwest MO Thrift 208 3 09-30 04/95 18.00 47
MWFD Midwest Fed. Fin. Corp of WI OTC Central WI Thrift 207 9 12-31 07/92 22.25 36
WEFC Wells Fin. Corp. of Wells MN OTC Southcentral MN Thrift 202 7 12-31 04/95 17.00 33
FFBZ First Federal Bancorp of OH OTC Eastern OH Thrift 201 6 09-30 06/92 19.00 30
MFFC Milton Fed. Fin. Corp. of OH OTC Southwest OH Thrift 200 2 09-30 10/94 14.00 32
GFED Guarnty FS&LA,MHC of MO (31.0) OTC Southwest MO Thrift 200 4 06-30 04/95 23.50 73
HCBB HCB Bancshares of AR OTC Southern AR Thrift 199 P 6 06-30 05/97 13.50 36
LSBI LSB Fin. Corp. of Lafayette IN OTC Central IN Thrift 194 4 12-31 02/95 24.00 22
FFWC FFW Corporation of Wabash IN OTC Central IN Thrift 180 3 06-30 04/93 31.25 22
PULB Pulaski SB, MHC of MO (29.8) OTC St. Louis MO Thrift 178 M 5 09-30 05/94 27.25 57
NEIB Northeast Indiana Bncrp of IN OTC Northeast IN Thrift 176 3 12-31 06/95 18.50 33
PFED Park Bancorp of Chicago IL OTC Chicago IL Thrift 176 3 12-31 08/96 16.75 41
EGLB Eagle BancGroup of IL OTC Central IL Thrift 174 3 12-31 07/96 16.62 21
MARN Marion Capital Holdings of IN OTC Central IN Thrift 173 2 06-30 03/93 26.50 47
SMBC Southern Missouri Bncrp of MO OTC Southeast MO Thrift 166 M 8 06-30 04/94 17.87 29
HMLK Hemlock Fed. Fin. Corp. of IL OTC Chicago IL Thrift 165 3 12-31 04/97 15.12 31
FBSI First Bancshares of MO OTC Southcentral MO Thrift 164 6 06-30 12/93 24.00 26
FFWD Wood Bancorp of OH OTC Northern OH Thrift 164 6 06-30 08/93 17.00 36
JXSB Jcksnville SB,MHC of IL (45.6) OTC Central IL Thrift 163 4 12-31 04/95 22.25 28
BWFC Bank West Fin. Corp. of MI OTC Southeast MI Thrift 156 3 06-30 03/95 18.87 33
QCFB QCF Bancorp of Virginia MN OTC Northeast MN Thrift 150 M 2 06-30 04/95 25.00 36
MWBI Midwest Bancshares, Inc. of IA OTC Southeast IA Thrift 147 4 12-31 11/92 36.75 13
RIVR River Valley Bancorp of IN OTC Southeast IN Thrift 140 3 12-31 12/96 16.75 20
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
GTPS Great American Bancorp of IL OTC East Central IL Thrift 137 3 12-31 06/95 17.00 30
WEHO Westwood Hmstd Fin Corp of OH OTC Cincinnati OH Thrift 135 2 12-31 09/96 15.12 42
FKKY Frankfort First Bancorp of KY OTC Frankfort KY Thrift 132 3 06-30 07/95 10.25 34
CLAS Classic Bancshares of KY OTC Eastern KY Thrift 132 M 3 03-31 12/95 14.87 19
MFCX Marshalltown Fin. Corp. of IA OTC Central IA Thrift 128 3 09-30 03/94 16.75 24
MIFC Mid Iowa Financial Corp. of IA OTC Central IA Thrift 126 6 09-30 10/92 9.87 17
PTRS Potters Financial Corp of OH OTC Northeast OH Thrift 121 4 12-31 12/93 25.25 12
NBSI North Bancshares of Chicago IL OTC Chicago IL Thrift 120 2 12-31 12/93 24.12 24
ASBP ASB Financial Corp. of OH OTC Southern OH Thrift 112 1 06-30 04/95 13.00 22
FFSL First Independence Corp. of KS OTC Southeast KS Thrift 111 2 09-30 10/93 14.62 15
BDJI First Fed. Bancorp. of MN OTC Northern MN Thrift 111 5 09-30 04/95 22.00 15
HFFB Harrodsburg 1st Fin Bcrp of KY OTC Central KY Thrift 109 2 09-30 10/95 16.00 32
PSFC Peoples Sidney Fin. Corp of OH OTC WestCentral OH Thrift 108 P 2 06-30 04/97 17.00 30
HFSA Hardin Bancorp of Hardin MO OTC Western MO Thrift 108 3 03-31 09/95 17.75 15
DCBI Delphos Citizens Bancorp of OH OTC Northwest OH Thrift 107 1 09-30 11/96 17.50 36
MONT Montgomery Fin. Corp. of IN OTC Westcentral IN Thrift 104 P 4 06-30 07/97 12.25 20
FTNB Fulton Bancorp of MO OTC Central MO Thrift 99 M 2 06-30 10/96 25.50 44
CNSB CNS Bancorp of MO OTC Central MO Thrift 98 5 12-31 06/96 17.25 29
FTSB Fort Thomas Fin. Corp. of KY OTC Northern KY Thrift 97 2 09-30 06/95 12.50 19
NWEQ Northwest Equity Corp. of WI OTC Northwest WI Thrift 97 3 03-31 10/94 16.75 14
CBES CBES Bancorp of MO OTC Western MO Thrift 95 M 2 06-30 09/96 19.12 20
WCFB Wbstr Cty FSB MHC of IA (45.2) OTC Central IA Thrift 95 1 12-31 08/94 18.00 38
AMFC AMB Financial Corp. of IN OTC Northwest IN Thrift 94 4 12-31 04/96 15.50 15
CIBI Community Inv. Bancorp of OH OTC NorthCentral OH Thrift 92 3 06-30 02/95 15.50 14
GFSB GFS Bancorp of Grinnell IA OTC Central IA Thrift 92 1 06-30 01/94 15.50 15
INCB Indiana Comm. Bank, SB of IN OTC Central IN Ret. 91 M 3 06-30 12/94 17.00 16
THR Three Rivers Fin. Corp. of MI AMEX Southwest MI Thrift 91 M 4 06-30 08/95 16.81 14
KYF Kentucky First Bancorp of KY AMEX Central KY Thrift 89 2 06-30 08/95 13.62 18
PFFC Peoples Fin. Corp. of OH OTC Northeast OH Thrift 86 2 09-30 09/96 19.00 28
HZFS Horizon Fin'l. Services of IA OTC Central IA Thrift 86 3 06-30 06/94 19.37 8
SFFC StateFed Financial Corp. of IA OTC Des Moines IA Thrift 86 2 06-30 01/94 22.12 17
FFDF FFD Financial Corp. of OH OTC Northeast OH Thrift 85 M 1 06-30 04/96 15.12 22
FFBI First Financial Bancorp of IL OTC Northern IL M.B. 85 2 12-31 10/93 19.50 8
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
LOGN Logansport Fin. Corp. of IN OTC Northern IN Thrift 83 1 12-31 06/95 15.87 20
HHFC Harvest Home Fin. Corp. of OH OTC Southwest OH Thrift 83 M 3 09-30 10/94 12.00 11
PSFI PS Financial of Chicago IL OTC Chicago IL Thrift 83 1 12-31 11/96 16.00 35
SOBI Sobieski Bancorp of S. Bend IN OTC Northern IN Thrift 82 3 06-30 03/95 16.50 13
PCBC Perry Co. Fin. Corp. of MO OTC EastCentral MO Thrift 81 1 09-30 02/95 20.87 17
MSBF MSB Financial Corp. of MI OTC Southcentral MI Thrift 75 2 06-30 02/95 16.50 21
ATSB AmTrust Capital Corp. of IN OTC Northcentral IN Thrift 71 M 2 06-30 03/95 13.19 7
MIVI Miss. View Hold. Co. of MN OTC Central MN Thrift 70 1 09-30 03/95 16.25 13
HCFC Home City Fin. Corp. of OH OTC Southwest OH Thrift 68 M 1 06-30 12/96 15.50 15
GWBC Gateway Bancorp of KY OTC Eastern KY Thrift 64 2 12-31 01/95 18.00 19
CKFB CKF Bancorp of Danville KY OTC Central KY Thrift 61 1 12-31 01/95 19.00 18
NSLB NS&L Bancorp of Neosho MO OTC Southwest MO Thrift 60 2 09-30 06/95 19.25 14
LXMO Lexington B&L Fin. Corp. of MO OTC West Central MO Thrift 59 1 09-30 06/96 16.00 18
MRKF Market Fin. Corp. of OH OTC Cincinnati OH Thrift 57 2 09-30 03/97 14.62 20
CSBF CSB Financial Group Inc of IL (3) OTC Centralia IL Thrift 48 M 2 09-30 10/95 12.50 12
RELI Reliance Bancshares Inc of WI (3) OTC Milwaukee WI Thrift 47 1 June 04/96 8.50 21
HBBI Home Building Bancorp of IN OTC Southwest IN Thrift 45 2 09-30 02/95 23.00 7
HWEN Home Financial Bancorp of IN OTC Central IN Thrift 43 1 06-30 07/96 16.50 8
FLKY First Lancaster Bncshrs of KY OTC Central KY Thrift 40 M 1 06-30 07/96 15.50 15
LONF London Financial Corp. of OH OTC Central OH Thrift 38 1 09-30 04/96 15.12 8
JOAC Joachim Bancorp of MO OTC Eastern MO Thrift 35 1 03-31 12/95 15.00 11
New England Companies
---------------------
PBCT Peoples Bank, MHC of CT (40.1) (3) OTC Southwestern CT Div. 7,870 97 12-31 07/88 31.62 1,930
WBST Webster Financial Corp. of CT OTC Central CT Thrift 5,944 77 12-31 12/86 58.25 698
PHBK Peoples Heritage Fin Grp of ME (3) OTC ME,NH,MA Div. 5,591 132 12-31 12/86 43.00 1,177
EGFC Eagle Financial Corp. of CT OTC Western CT Thrift 2,013 19 09-30 02/87 38.75 243
CFX CFX Corp of NH (3) AMEX NH,MA M.B. 1,859 43 12-31 02/87 21.00 276
SISB SIS Bancorp Inc of MA (3) OTC Central MA Div. 1,435 24 12-31 02/95 33.87 189
ANDB Andover Bancorp, Inc. of MA (3) OTC MA,NH M.B. 1,251 12 12-31 05/86 35.50 183
FESX First Essex Bancorp of MA (3) OTC MA,NH Div. 1,245 15 12-31 08/87 20.37 153
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
New England Companies (continued)
---------------------------------
AFCB Affiliated Comm BC, Inc of MA OTC MA Thrift 1,090 11 12-31 10/95 30.12 195
MDBK Medford Bank of Medford, MA (3) OTC Eastern MA Thrift 1,073 16 12-31 03/86 35.50 161
FAB FirstFed America Bancorp of MA AMEX MA,RI M.B. 1,021 12 03-31 01/97 21.00 183
FFES First FS&LA of E. Hartford CT OTC Central CT Thrift 984 12 12-31 06/87 35.12 94
BFD BostonFed Bancorp of MA AMEX Boston MA M.B. 976 10 12-31 10/95 21.94 130
MASB MassBank Corp. of Reading MA (3) OTC Eastern MA Thrift 905 14 12-31 05/86 43.00 154
DIBK Dime Financial Corp. of CT (3) OTC Central CT Thrift 874 11 12-31 07/86 31.25 161
MECH Mechanics SB of Hartford CT (3) OTC Hartford CT Thrift 824 14 12-31 06/96 24.75 131
NSSB Norwich Financial Corp. of CT (3) OTC Southeastern CT Thrift 713 19 12-31 11/86 28.81 156
NSSY Norwalk Savings Society of CT (3) OTC Southwest CT Thrift 617 M 7 12-31 06/94 36.37 88
BKC American Bank of Waterbury CT (3) AMEX Western CT Thrift 606 15 12-31 12/81 37.25 86
MWBX MetroWest Bank of MA (3) OTC Eastern MA Thrift 566 11 12-31 10/86 6.62 92
PBKB People's SB of Brockton MA (3) OTC Southeastern MA Thrift 549 M 14 12-31 10/86 17.56 63
SOSA Somerset Savings Bank of MA (3) OTC Eastern MA R.E. 515 5 12-31 07/86 4.00 67
SWCB Sandwich Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 502 11 12-31 07/86 38.25 73
ABBK Abington Savings Bank of MA (3) OTC Southeastern MA M.B. 501 7 12-31 06/86 32.75 61
PETE Primary Bank of NH (3) OTC Southern NH Thrift 432 9 12-31 10/93 26.37 55
BKCT Bancorp Connecticut of CT (3) OTC Central CT Thrift 428 3 12-31 07/86 32.75 83
EIRE Emerald Island Bancorp, MA (3) OTC Eastern MA R.E. 425 8 12-31 09/86 25.00 56
LSBX Lawrence Savings Bank of MA (3) OTC Northeastern MA Thrift 366 5 12-31 05/86 12.87 55
WRNB Warren Bancorp of Peabody MA (3) OTC Eastern MA R.E. 358 6 12-31 07/86 18.75 71
NMSB Newmil Bancorp. of CT (3) OTC Eastern CT Thrift 323 13 06-30 02/86 14.25 55
CEBK Central Co-Op. Bank of MA (3) OTC Eastern MA Thrift 321 M 8 03-31 10/86 21.25 42
NHTB NH Thrift Bancshares of NH OTC Central NH Thrift 315 10 12-31 05/86 19.50 40
NBN Northeast Bancorp of ME (3) OTC Eastern ME Thrift 248 M 8 06-30 08/87 19.50 25
TBK Tolland Bank of CT (3) AMEX Northern CT Thrift 238 7 12-31 12/86 17.62 27
HIFS Hingham Inst. for Sav. of MA (3) OTC Eastern MA Thrift 218 5 12-31 12/88 27.50 36
HPBC Home Port Bancorp, Inc. of MA (3) OTC Southeastern MA Thrift 199 2 12-31 08/88 23.75 44
IPSW Ipswich SB of Ipswich MA (3) OTC Northwest MA Thrift 189 5 12-31 05/93 14.00 33
BSBC Branford SB of CT (3) OTC New Haven CT R.E. 187 5 12-31 11/86 5.28 35
FCME First Coastal Corp. of ME (3) OTC Southern ME Thrift 152 7 12-31 / 12.25 17
KSBK KSB Bancorp of Kingfield ME (3) OTC Western ME M.B. 140 M 8 12-31 06/93 13.75 17
MFLR Mayflower Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 126 4 04-30 12/87 19.25 17
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
New England Companies (continued)
---------------------------------
NTMG Nutmeg FS&LA of CT OTC CT M.B. 102 3 12-31 / 10.37 8
FCB Falmouth Co-Op Bank of MA (3) AMEX Southeast MA Thrift 94 2 09-30 03/96 19.62 29
MCBN Mid-Coast Bancorp of ME OTC Eastern ME Thrift 60 2 03-31 11/89 27.00 6
North-West Companies
--------------------
WAMU Washington Mutual Inc. of WA (3) OTC WA,OR,ID,UT,MT Div. 48,764 290 12-31 03/83 69.00 8,719
WFSL Washington FS&LA of Seattle WA OTC Western US Thrift 5,760 89 09-30 11/82 28.62 1,358
IWBK Interwest SB of Oak Harbor WA OTC Western WA Div. 1,833 31 12-31 / 42.50 342
STSA Sterling Financial Corp. of WA OTC WA,OR M.B. 1,686 41 06-30 / 19.37 108
FWWB First Savings Bancorp of WA (3) OTC Central WA Thrift 1,008 M 16 03-31 11/95 24.12 254
KFBI Klamath First Bancorp of OR OTC Southern OR Thrift 728 7 09-30 10/95 20.50 205
HRZB Horizon Financial Corp. of WA (3) OTC Northwest WA Thrift 519 12 03-31 08/86 15.75 117
FMSB First Mutual SB of Bellevue WA (3) OTC Western WA M.B. 432 6 12-31 12/85 20.87 56
CASB Cascade SB of Everett WA OTC Seattle WA Thrift 352 M 6 06-30 08/92 14.25 37
RVSB Rvrview SB,FSB MHC of WA(41.7) OTC Southwest WA M.B. 230 9 03-31 10/93 29.62 72
FBNW FirstBank Corp of Clarkston WA OTC West. WA/East ID Thrift 154 P 5 03-31 07/97 17.00 34
EFBC Empire Federal Bancorp of MT OTC Southern MT Thrift 110 P 3 12-31 01/97 17.62 46
South-East Companies
--------------------
FFCH First Fin. Holdings Inc. of SC OTC CHARLESTON SC Div. 1,667 32 09-30 11/83 37.00 235
LIFB Life Bancorp of Norfolk VA OTC Southeast VA Thrift 1,488 20 12-31 10/94 26.00 256
MGNL Magna Bancorp of MS OTC MS,AL M.B. 1,353 62 06-30 03/91 28.62 394
FLFC First Liberty Fin. Corp. of GA OTC Georgia M.B. 1,289 31 9-30 12/83 24.75 191
ISBF ISB Financial Corp. of LA OTC SouthCentral LA Thrift 939 M 25 12-31 04/95 25.62 177
HFNC HFNC Financial Corp. of NC OTC Charlotte NC Thrift 895 8 06-30 12/95 16.00 275
EBSI Eagle Bancshares of Tucker GA OTC Atlanta GA Thrift 848 10 03-31 04/86 18.00 102
VFFC Virginia First Savings of VA OTC Petersburg VA M.B. 817 M 23 06-30 01/78 23.87 139
CNIT Cenit Bancorp of Norfolk VA OTC Southeastern VA Thrift 710 15 12-31 08/92 53.25 88
PALM Palfed, Inc. of Aiken SC OTC Southwest SC Thrift 665 19 12-31 12/85 21.25 112
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
South-East Companies (continued)
--------------------------------
VABF Va. Beach Fed. Fin. Corp of VA OTC Southeast VA M.B. 618 12 12-31 11/80 15.50 77
FFFC FFVA Financial Corp. of VA OTC Southern VA Thrift 559 11 12-31 10/94 32.87 149
CFCP Coastal Fin. Corp. of SC OTC SC Thrift 503 9 09-30 09/90 24.50 114
FSPT FirstSpartan Fin. Corp. of SC OTC Northwestern SC Thrift 465 P 5 06-30 07/97 35.62 158
CFBC Community First Bnkg Co. of GA OTC Westcentral GA Thrift 451 12 12-31 07/97 35.00 84
TSH Teche Holding Company of LA AMEX Southern LA Thrift 406 9 09-30 04/95 19.12 66
COOP Cooperative Bk.for Svgs. of NC OTC Eastern NC Thrift 352 17 03-31 08/91 31.00 46
FSFC First So.east Fin. Corp. of SC OTC Northwest SC Thrift 335 M 11 06-30 10/93 15.63 69
FSTC First Citizens Corp of GA OTC Western GA M.B. 326 M 9 03-31 03/86 35.00 64
SOPN First SB, SSB, Moore Co. of NC OTC Central NC Thrift 294 5 06-30 01/94 23.00 85
UFRM United FS&LA of Rocky Mount NC OTC Eastern NC M.B. 276 9 12-31 07/80 12.25 38
ANA Acadiana Bancshares of LA (3) AMEX Southern LA Thrift 262 M 4 12-31 07/96 21.88 60
PERT Perpetual of SC, MHC (46.8) OTC Northwest SC Thrift 256 6 09-30 10/93 56.50 85
SSFC South Street Fin. Corp. of NC (3) OTC South Central NC Thrift 242 2 09-30 10/96 18.87 85
MERI Meritrust FSB of Thibodaux LA OTC Southeast LA Thrift 228 8 12-31 / 43.75 34
FLAG Flag Financial Corp of GA OTC Western GA M.B. 222 4 12-31 12/86 15.50 32
CFTP Community Fed. Bancorp of MS OTC Northeast MS Thrift 209 1 09-30 03/96 17.25 80
ESX Essex Bancorp of VA AMEX VA,NC M.B. 190 12 12-31 / 4.94 5
CFFC Community Fin. Corp. of VA OTC Central VA Thrift 175 3 03-31 03/88 23.00 29
GSFC Green Street Fin. Corp. of NC OTC Southern NC Thrift 175 3 09-30 04/96 18.75 81
FTF Texarkana Fst. Fin. Corp of AR AMEX Southwest AR Thrift 171 5 09-30 07/95 23.75 43
FGHC First Georgia Hold. Corp of GA OTC Southeastern GA Thrift 156 9 09-30 02/87 9.12 28
BFSB Bedford Bancshares of VA OTC Southern VA Thrift 135 3 09-30 08/94 25.25 29
FFBS FFBS Bancorp of Columbus MS OTC Columbus MS Thrift 131 3 06-30 07/93 22.00 34
GSLA GS Financial Corp. of LA OTC New Orleans LA Thrift 123 3 12-31 04/97 15.75 54
PDB Piedmont Bancorp of NC AMEX Central NC Thrift 123 2 06-30 12/95 10.75 30
CFNC Carolina Fincorp of NC (3) OTC Southcentral NC Thrift 112 4 06-30 11/96 17.75 33
TWIN Twin City Bancorp of TN OTC Northeast TN Thrift 107 3 12-31 01/95 13.62 12
KSAV KS Bancorp of Kenly NC OTC Central NC Thrift 106 3 12-31 12/93 18.50 16
SSM Stone Street Bancorp of NC AMEX Central NC Thrift 106 2 12-31 04/96 21.12 40
SRN Southern Banc Company of AL AMEX Northeast AL Thrift 105 M 4 06-30 10/95 16.12 20
CCFH CCF Holding Company of GA OTC Atlanta GA Thrift 101 4 12-31 07/95 16.50 14
CENB Century Bancshares of NC (3) OTC Charlotte NC Thrift 100 M 1 06-30 12/96 79.50 32
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
South-East Companies (continued)
--------------------------------
SZB SouthFirst Bancshares of AL AMEX Central AL Thrift 97 2 09-30 02/95 18.00 15
SFNB Security First Netwrk Bk of GA OTC GA (Internet) Div. 79 1 12-31 / 11.75 101
SCBS Southern Commun. Bncshrs of AL OTC NorthCentral AL Thrift 70 M 1 09-30 12/96 16.37 19
SSB Scotland Bancorp of NC AMEX S. Central NC Thrift 69 2 09-30 04/96 18.00 34
SCCB S. Carolina Comm. Bnshrs of SC OTC Central SC Thrift 46 M 1 06-30 07/94 22.25 16
MBSP Mitchell Bancorp of NC (3) OTC Western NC Thrift 33 1 12-31 07/96 17.37 16
South-West Companies
--------------------
CBSA Coastal Bancorp of Houston TX OTC Houston TX M.B. 2,964 40 12-31 / 32.25 160
FBHC Fort Bend Holding Corp. of TX OTC Eastcentral TX M.B. 319 5 03-31 06/93 36.25 30
JXVL Jacksonville Bancorp of TX OTC East Central TX Thrift 226 6 09-30 04/96 16.94 42
FFDB FirstFed Bancorp of AL OTC Central AL Thrift 177 7 03-31 11/91 17.75 20
ETFS East Texas Fin. Serv. of TX OTC Northeast TX Thrift 113 2 09-30 01/95 19.25 20
AABC Access Anytime Bancorp of NM OTC Eastern NM Thrift 105 3 12-31 08/86 6.88 8
GUPB GFSB Bancorp of Gallup NM OTC Northwest NM Thrift 87 M 1 06-30 06/95 20.12 17
Western Companies (Excl CA)
---------------------------
FFBA First Colorado Bancorp of Co OTC Denver CO Thrift 1,510 26 12-31 01/96 18.75 311
WSTR WesterFed Fin. Corp. of MT OTC MT Thrift 956 35 06-30 01/94 26.37 147
GBCI Glacier Bancorp of MT OTC Western MT Div. 568 16 12-31 03/84 18.00 123
UBMT United Fin. Corp. of MT OTC Central MT Thrift 108 M 4 12-31 09/86 23.75 29
TRIC Tri-County Bancorp of WY OTC Southeastern WY Thrift 89 2 12-31 09/93 22.75 14
CRZY Crazy Woman Creek Bncorp of WY OTC Northeast WY Thrift 54 1 09-30 03/96 14.62 14
Other Areas
-----------
</TABLE>
NOTES: (1) Or most recent date available (M=March, S=September, D=December,
J=June, E=Estimated, and P=Pro Forma)
(2) Operating strategies are: Thrift=Traditional Thrift,
M.B.=Mortgage Banker, R.E.=Real Estate Developer,
Div.=Diversified, and Ret.=Retail Banking.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
November 13, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(3) FDIC savings bank.
</TABLE>
Source: Corporate offering circulars, SNL Securities Quarterly Thrift Report,
and financial reports of publicly Traded Thrifts.
Date of Last Update: 11/13/97
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-2
Market Pricing Comparatives
Prices As of September 19, 1997
<TABLE>
<CAPTION>
Per Share Data
Market --------------- Pricing Ratios(3)
Capitalization Core Book ---------------------------------------
---------------
Price/ Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
------- ------- ------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Financial Institution ($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
- ---------------------
SAIF-Insured Thrifts 23.28 163.37 1.15 15.70 21.97 147.78 18.07 151.64 19.24
Special Selection Grouping(8) 17.56 26.66 0.70 14.55 25.28 121.47 21.45 121.47 22.63
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
AFED AFSALA Bancorp, Inc. of NY 17.00 24.74 0.82 14.74 20.73 115.33 15.54 115.33 20.73
AFBC Advance Fin. Bancorp of WV 15.75 17.07 0.71 14.76 NM 106.71 16.48 106.71 22.18
SKBO First Carnegie,MHC of PA(45.0) 16.25 16.82 0.35 10.21 NM 159.16 24.91 159.16 NM
GOSB GSB Financial Corp. of NY 16.00 35.97 0.44 13.78 NM 116.11 31.42 116.11 NM
HRBF Harbor Federal Bancorp of MD 22.00 37.25 0.90 16.48 NM 133.50 17.21 133.50 24.44
PEEK Peekskill Fin. Corp. of NY 17.00 54.28 0.75 14.71 29.82 115.57 29.73 115.57 22.67
PWBK Pennwood SB of PA 17.25 10.01 0.92 15.04 NM 114.69 20.02 114.69 18.75
PHSB Ppls Home SB, MHC of PA (45.0) 16.25 20.18 0.67 14.36 NM 113.16 19.59 113.16 24.25
SFED SFS Bancorp of Schenectady NY 22.00 27.19 1.07 17.44 NM 126.15 15.73 126.15 20.56
TPNZ Tappan Zee Fin., Inc. of NY 18.00 26.95 0.49 14.35 NM 125.44 22.48 125.44 NM
WHGB WHG Bancshares of MD 15.63 22.85 0.57 14.16 NM 110.38 22.80 110.38 27.42
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ ---------------- ---------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------- ------ ------- ------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Financial Institution ($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
- ---------------------
SAIF-Insured Thrifts 0.38 1.67 30.28 1,158 12.91 0.79 0.63 5.45 0.85 7.48
Special Selection Grouping(8) 0.25 1.37 31.91 145 17.82 0.71 0.61 3.65 0.84 5.17
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
AFED AFSALA Bancorp, Inc. of NY 0.16 0.94 19.51 159 13.47 0.45 0.79 6.46 0.79 6.46
AFBC Advance Fin. Bancorp of WV 0.32 2.03 45.07 104 15.45 0.37 0.39 4.31 0.79 8.74
SKBO First Carnegie,MHC of PA(45.0) 0.30 1.85 NM 150 15.65 NA 0.37 2.35 0.54 3.43
GOSB GSB Financial Corp. of NY 0.00 0.00 0.00 114 27.06 NA 1.02 3.77 0.86 3.19
HRBF Harbor Federal Bancorp of MD 0.48 2.18 53.33 216 12.90 0.05 0.46 3.52 0.71 5.46
PEEK Peekskill Fin. Corp. of NY 0.36 2.12 48.00 183 25.73 1.22 0.98 3.54 1.29 4.65
PWBK Pennwood SB of PA 0.32 1.86 34.78 50 17.45 0.98 0.70 4.05 1.12 6.54
PHSB Ppls Home SB, MHC of PA (45.0) 0.00 0.00 0.00 229 17.31 NA 0.39 2.23 0.81 4.67
SFED SFS Bancorp of Schenectady NY 0.28 1.27 26.17 173 12.47 0.73 0.44 3.41 0.79 6.09
TPNZ Tappan Zee Fin., Inc. of NY 0.28 1.56 57.14 120 17.92 1.73 0.70 4.22 0.65 3.90
WHGB WHG Bancshares of MD 0.20 1.28 35.09 100 20.65 0.15 0.51 2.23 0.85 3.75
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month data,
adjusted to omit non-operating items (including the SAIF assessment) on a
tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/CORE = Price to estimated core
earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month earnings and average equity and assets
balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
(8) Includes Mid-Atlantic Companies; Equity/Assets >12%; Assets less than $250
Million;
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Exhibit III-3
Market Pricing Comparatives
Prices As of September 19, 1997
Market Per Share Data
Capitalization -------------- Pricing Ratios(3)
--------------- Core Book ---------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- --------------------- ------- ------- ------- ------- ------- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
SAIF-Insured Thrifts 23.28 163.37 1.15 15.70 21.97 147.78 18.07 151.64 19.24
Comparable Group Average 22.37 56.67 1.39 16.60 21.30 134.45 16.25 136.95 17.41
Mid-Atlantic Companies 22.37 56.67 1.39 16.60 21.30 134.45 16.25 136.95 17.41
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
SHEN First Shenango Bancorp of PA 31.50 65.27 2.20 21.75 18.64 144.83 15.86 144.83 14.32
GAF GA Financial Corp. of PA 19.00 151.72 1.02 14.25 23.75 133.33 20.24 134.75 18.63
LARL Laurel Capital Group of PA 24.75 35.71 2.03 14.73 15.37 168.02 16.85 168.02 12.19
PWBK Pennwood SB of PA 17.25 10.01 0.92 15.04 NM 114.69 20.02 114.69 18.75
PHFC Pittsburgh Home Fin. of PA 19.25 37.90 0.88 14.21 27.90 135.47 14.79 136.91 21.88
PRBC Prestige Bancorp of PA 17.62 16.12 0.83 16.51 NM 106.72 11.88 106.72 21.23
THRD TF Financial Corp. of PA 21.37 87.25 1.13 17.44 25.44 122.53 13.62 139.67 18.91
WVFC WVS Financial Corp. of PA 28.25 49.35 2.11 18.83 16.72 150.03 16.75 150.03 13.39
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ --------------- ---------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
- --------------------- ------- ------ ------- ------ ------- ------- ------- ------- ------- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
SAIF-Insured Thrifts 0.38 1.67 30.28 1,158 12.91 0.79 0.63 5.45 0.85 7.48
Comparable Group Average 0.44 1.88 31.22 344 12.24 0.58 0.79 6.11 1.06 8.16
Mid-Atlantic Companies 0.44 1.88 31.22 344 12.24 0.58 0.79 6.11 1.06 8.16
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
SHEN First Shenango Bancorp of PA 0.60 1.90 27.27 411 10.95 0.54 0.89 7.82 1.16 10.18
GAF GA Financial Corp. of PA 0.48 2.53 47.06 750 15.18 0.12 1.00 5.26 1.27 6.71
LARL Laurel Capital Group of PA 0.52 2.10 25.62 212 10.03 0.43 1.14 10.88 1.43 13.72
PWBK Pennwood SB of PA 0.32 1.86 34.78 50 17.45 0.98 0.70 4.05 1.12 6.54
PHFC Pittsburgh Home Fin. of PA 0.24 1.25 27.27 256 10.92 1.60 0.62 4.71 0.79 6.00
PRBC Prestige Bancorp of PA 0.12 0.68 14.46 136 11.13 0.30 0.37 2.84 0.65 5.01
THRD TF Financial Corp. of PA 0.40 1.87 35.40 641 11.11 0.33 0.55 4.76 0.74 6.40
WVFC WVS Financial Corp. of PA 0.80 2.83 37.91 295 11.16 0.30 1.07 8.59 1.34 10.72
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month data,
adjusted to omit non-operating items (including the SAIF assessment) on a
tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/CORE = Price to estimated core
earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month earnings and average equity and assets
balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
EXHIBIT IV-1
Stock Prices:
As of September 19, 1997
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- -------- --------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
Market Averages. SAIF-Insured Thrifts(no MHC)
- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(303) 23.14 5,519 169.2 23.87 15.31 22.55 2.61 216.44 34.95
NYSE Traded Companies(9) 42.64 36,632 1,817.0 43.57 24.69 41.47 2.13 308.36 40.53
AMEX Traded Companies(17) 19.49 3,580 82.5 20.89 13.63 18.99 2.90 270.49 27.62
NASDAQ Listed OTC Companies(277) 22.69 4,554 117.1 23.37 15.08 22.11 2.61 204.44 35.19
California Companies(21) 28.64 18,905 827.2 29.23 16.86 27.88 2.45 148.14 40.80
Florida Companies(6) 27.06 13,098 361.9 28.40 16.22 27.20 0.60 180.77 36.58
Mid-Atlantic Companies(59) 24.28 6,413 165.1 24.92 15.33 23.69 2.71 193.04 43.42
Mid-West Companies(146) 21.55 3,400 93.0 22.24 14.61 20.99 2.58 239.13 31.61
New England Companies(9) 29.12 5,009 177.5 29.31 17.32 27.73 5.39 399.03 49.75
North-West Companies(7) 24.27 12,610 348.8 24.94 17.09 23.15 4.42 178.08 29.48
South-East Companies(42) 22.95 3,474 78.3 24.17 16.42 22.43 2.27 198.51 31.06
South-West Companies(7) 21.35 1,785 42.5 21.65 13.66 20.82 2.62 1.93 30.07
Western Companies (Excl CA)(6) 20.71 5,288 106.1 21.69 15.47 20.55 0.45 289.01 22.77
Thrift Strategy(239) 22.00 3,645 88.5 22.73 14.91 21.47 2.47 192.26 33.22
Mortgage Banker Strategy(37) 29.09 13,899 571.1 29.65 17.48 27.97 4.05 284.16 46.25
Real Estate Strategy(11) 24.65 7,817 219.1 25.54 14.95 24.29 1.51 213.11 41.50
Diversified Strategy(12) 34.47 25,590 937.2 35.44 20.48 33.60 2.10 205.84 36.70
Retail Banking Strategy(4) 17.22 3,472 65.9 18.31 11.88 16.72 3.15 382.50 26.71
Companies Issuing Dividends(256) 23.30 5,328 168.3 24.05 15.49 22.68 2.73 228.57 34.15
Companies Without Dividends(47) 22.20 6,646 174.4 22.80 14.24 21.80 1.87 135.21 40.12
Equity/Assets <6%(23) 26.93 17,616 581.0 27.85 15.93 26.48 1.72 172.57 41.48
Equity/Assets 6-12%(144) 25.97 5,842 202.2 26.54 16.31 25.10 3.47 232.77 40.62
Equity/Assets >12%(136) 19.75 3,187 68.3 20.60 14.22 19.40 1.92 176.61 27.70
Converted Last 3 Mths (no MHC)(6) 21.37 3,620 73.9 22.34 18.80 21.05 2.23 0.00 26.01
Actively Traded Companies(41) 32.44 17,226 696.9 33.07 19.85 31.74 1.81 239.48 44.96
Market Value Below $20 Million(58) 17.27 874 14.2 17.81 12.55 16.91 2.19 240.59 26.75
Holding Company Structure(268) 23.18 5,311 168.9 23.90 15.43 22.57 2.69 200.26 33.93
Assets Over $1 Billion(61) 33.87 17,598 656.9 34.56 20.59 32.96 2.87 252.61 40.01
Assets $500 Million-$1 Billion(49) 22.48 5,707 113.5 23.33 14.10 21.86 2.49 244.61 42.92
Assets $250-$500 Million(68) 23.41 2,549 56.1 24.03 15.49 22.76 2.95 191.17 38.80
Assets less than $250 Million(125) 18.34 1,446 25.4 19.10 13.25 17.93 2.36 136.90 27.15
Goodwill Companies(123) 27.07 9,109 290.7 27.70 16.96 26.27 3.22 246.01 39.21
Non-Goodwill Companies(179) 20.51 3,107 87.6 21.31 14.20 20.05 2.19 172.07 31.92
Acquirors of FSLIC Cases(10) 37.12 33,589 1,633.4 37.55 21.96 35.94 2.45 300.62 44.33
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
Market Averages. SAIF-Insured Thrifts(no MHC)
- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(303) 0.85 1.17 15.89 15.42 155.82
NYSE Traded Companies(9) 1.96 2.77 20.08 19.19 358.54
AMEX Traded Companies(17) 0.55 0.84 15.57 15.39 109.25
NASDAQ Listed OTC Companies(277) 0.83 1.13 15.76 15.29 151.64
California Companies(21) 0.96 1.43 17.01 16.41 262.00
Florida Companies(6) 0.98 0.88 13.56 12.84 185.50
Mid-Atlantic Companies(59) 0.99 1.38 16.23 15.59 169.87
Mid-West Companies(146) 0.82 1.09 15.73 15.40 136.06
New England Companies(9) 0.81 1.40 17.48 16.28 242.59
North-West Companies(7) 0.91 1.21 14.25 13.72 140.82
South-East Companies(42) 0.74 1.00 15.43 15.10 123.57
South-West Companies(7) 0.66 1.19 16.36 15.47 218.19
Western Companies (Excl CA)(6) 0.89 1.05 15.96 15.27 106.34
Thrift Strategy(239) 0.80 1.11 16.03 15.63 140.54
Mortgage Banker Strategy(37) 1.14 1.52 16.11 15.06 238.29
Real Estate Strategy(11) 0.90 1.39 14.30 14.00 220.08
Diversified Strategy(12) 1.60 1.86 14.01 13.46 198.90
Retail Banking Strategy(4) 0.18 -0.01 13.11 12.67 168.59
Companies Issuing Dividends(256) 0.91 1.23 15.99 15.48 152.29
Companies Without Dividends(47) 0.50 0.82 15.30 15.04 176.71
Equity/Assets <6%(23) 0.97 1.57 13.79 12.92 286.58
Equity/Assets 6-12%(144) 1.04 1.40 16.34 15.61 197.17
Equity/Assets >12%(136) 0.66 0.88 15.79 15.64 93.63
Converted Last 3 Mths (no MHC)(6) 0.52 0.58 17.55 17.48 91.92
Actively Traded Companies(41) 1.46 2.01 17.58 16.93 236.29
Market Value Below $20 Million(58) 0.51 0.81 15.44 15.35 117.83
Holding Company Structure(268) 0.83 1.15 16.15 15.69 153.14
Assets Over $1 Billion(61) 1.33 1.85 17.95 16.65 254.74
Assets $500 Million-$1 Billion(49) 0.91 1.11 14.10 13.62 153.64
Assets $250-$500 Million(68) 0.85 1.19 16.62 16.11 166.92
Assets less than $250 Million(125) 0.61 0.87 15.25 15.18 105.59
Goodwill Companies(123) 1.08 1.43 16.56 15.39 204.42
Non-Goodwill Companies(179) 0.70 1.00 15.44 15.44 123.30
Acquirors of FSLIC Cases(10) 1.66 2.43 18.85 17.79 305.74
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have been
adjusted for stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- -------- ---------- ------ ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
- --------------------------------------------
BIF-Insured Thrifts(66) 25.74 7,958 223.1 26.29 15.75 24.99 3.42 227.95 44.31
NYSE Traded Companies(3) 36.33 52,819 1,722.9 38.64 21.79 35.60 1.83 311.56 44.88
AMEX Traded Companies(6) 23.69 4,007 91.4 24.15 14.84 22.94 3.35 116.42 47.85
NASDAQ Listed OTC Companies(57) 25.33 5,649 145.9 25.78 15.48 24.59 3.52 238.28 43.82
California Companies(4) 21.12 6,822 154.9 21.16 12.06 20.46 4.03 513.78 45.91
Mid-Atlantic Companies(17) 27.38 17,448 519.7 28.61 16.59 26.60 3.41 145.53 39.57
Mid-West Companies(2) 12.50 942 11.8 12.50 9.50 11.87 5.31 0.00 23.52
New England Companies(34) 25.47 4,648 126.4 25.78 15.00 24.57 4.10 247.01 50.36
North-West Companies(4) 20.25 6,879 142.3 21.21 13.31 20.21 0.17 103.60 32.21
South-East Companies(5) 31.07 2,083 45.2 31.30 22.57 30.97 0.54 0.00 31.78
Thrift Strategy(44) 26.01 4,858 158.6 26.61 16.19 25.36 3.16 218.09 43.55
Mortgage Banker Strategy(9) 25.90 25,700 572.8 26.60 15.24 25.22 2.32 248.97 46.81
Real Estate Strategy(6) 19.88 4,200 81.0 20.28 11.62 19.16 4.05 342.23 38.52
Diversified Strategy(7) 28.40 13,218 430.5 28.40 16.09 26.59 7.34 182.05 54.39
Companies Issuing Dividends(54) 27.04 8,344 241.5 27.68 16.67 26.29 3.15 220.29 43.46
Companies Without Dividends(12) 17.76 5,594 110.3 17.78 10.10 17.05 5.04 304.57 49.42
Equity/Assets <6%(5) 17.25 30,528 621.0 17.45 9.00 16.66 3.58 143.59 75.53
Equity/Assets 6-12%(45) 27.61 6,140 212.4 28.20 16.28 26.70 3.92 243.23 45.62
Equity/Assets >12%(16) 22.94 6,576 139.4 23.49 16.19 22.62 1.95 37.92 30.79
Actively Traded Companies(20) 27.69 11,775 304.6 28.04 16.16 26.84 3.13 281.57 46.75
Market Value Below $20 Million(6) 15.72 940 14.3 15.87 10.75 15.27 3.95 285.00 28.43
Holding Company Structure(43) 25.79 6,787 182.2 26.25 16.02 25.04 3.57 229.31 42.21
Assets Over $1 Billion(17) 31.69 22,573 700.4 32.57 18.39 30.55 4.06 235.39 48.48
Assets $500 Million-$1 Billion(16) 27.38 5,024 113.3 27.87 16.60 26.92 1.95 206.28 44.05
Assets $250-$500 Million(14) 20.55 3,098 59.7 21.27 12.85 20.00 3.14 259.52 37.88
Assets less than $250 Million(19) 23.03 1,465 29.1 23.20 14.93 22.20 4.52 215.67 46.54
Goodwill Companies(31) 27.09 12,018 355.6 27.82 16.44 26.30 3.24 220.55 45.26
Non-Goodwill Companies(35) 24.52 4,305 103.9 24.91 15.12 23.82 3.58 240.90 43.49
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
- --------------------------------------------
BIF-Insured Thrifts(66) 1.58 1.57 15.69 14.87 156.16
NYSE Traded Companies(3) 1.93 1.92 19.07 14.47 239.94
AMEX Traded Companies(6) 1.14 1.11 16.02 13.92 167.23
NASDAQ Listed OTC Companies(57) 1.61 1.60 15.43 15.01 149.54
California Companies(4) 1.37 1.27 12.48 12.46 155.24
Mid-Atlantic Companies(17) 1.27 1.35 16.32 14.46 170.61
Mid-West Companies(2) 0.21 0.32 12.77 12.04 50.95
New England Companies(34) 1.89 1.83 14.34 13.78 166.96
North-West Companies(4) 1.17 1.14 11.98 11.61 108.54
South-East Companies(5) 1.28 1.33 26.59 26.59 98.18
Thrift Strategy(44) 1.54 1.53 16.59 15.65 150.51
Mortgage Banker Strategy(9) 1.51 1.57 14.44 14.00 187.42
Real Estate Strategy(6) 1.52 1.45 11.02 11.01 129.69
Diversified Strategy(7) 2.12 2.08 13.05 12.03 187.23
Companies Issuing Dividends(54) 1.54 1.53 16.40 15.47 161.42
Companies Without Dividends(12) 1.81 1.77 11.28 11.18 123.96
Equity/Assets <6%(5) 1.13 1.04 7.41 7.19 136.87
Equity/Assets 6-12%(45) 1.90 1.87 15.45 14.33 183.20
Equity/Assets >12%(16) 0.82 0.88 18.70 18.56 86.36
Actively Traded Companies(20) 1.87 1.81 15.30 14.53 179.65
Market Value Below $20 Million(6) 1.44 1.50 13.44 13.25 85.19
Holding Company Structure(43) 1.52 1.51 16.03 15.33 142.21
Assets Over $1 Billion(17) 1.85 1.85 15.65 14.14 186.03
Assets $500 Million-$1 Billion(16) 1.85 1.78 16.33 15.03 183.85
Assets $250-$500 Million(14) 1.21 1.21 13.12 12.96 128.07
Assets less than $250 Million(19) 1.38 1.40 17.30 17.03 124.94
Goodwill Companies(31) 1.60 1.58 15.68 13.95 187.78
Non-Goodwill Companies(35) 1.55 1.55 15.69 15.69 127.70
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have been
adjusted for stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- --------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(21) 25.87 5,109 53.6 26.92 13.72 25.69 0.56 298.64 73.14
BIF-Insured Thrifts(2) 27.81 32,163 394.4 28.31 12.59 27.75 0.08 301.78 97.85
NASDAQ Listed OTC Companies(23) 26.10 8,292 93.7 27.09 13.59 25.93 0.50 299.68 76.67
Florida Companies(3) 29.69 5,931 83.6 30.50 15.63 29.19 1.61 0.00 55.10
Mid-Atlantic Companies(10) 25.76 6,389 60.1 26.65 12.60 25.85 -0.30 247.50 102.59
Mid-West Companies(7) 24.16 2,108 22.2 25.55 14.08 23.72 1.36 349.78 56.67
New England Companies(1) 31.62 61,053 773.2 31.87 15.92 31.25 1.18 301.78 64.26
Thrift Strategy(21) 25.75 4,994 51.2 26.79 13.44 25.60 0.46 298.64 77.62
Diversified Strategy(1) 31.62 61,053 773.2 31.87 15.92 31.25 1.18 301.78 64.26
Companies Issuing Dividends(22) 26.71 8,638 98.3 27.73 13.58 26.50 0.76 299.68 76.67
Companies Without Dividends(1) 16.25 2,760 20.2 16.87 13.62 16.87 -3.68 0.00 0.00
Equity/Assets 6-12%(16) 27.97 10,688 123.6 29.05 13.92 27.70 0.98 299.68 78.68
Equity/Assets >12%(7) 21.60 2,542 21.8 22.37 12.80 21.70 -0.64 0.00 69.30
Actively Traded Companies(1) 34.75 7,264 118.3 35.00 14.77 34.00 2.21 247.50 87.84
Holding Company Structure(1) 34.75 7,264 118.3 35.00 14.77 34.00 2.21 247.50 87.84
Assets Over $1 Billion(5) 33.94 25,729 298.3 34.53 14.33 33.69 0.83 274.64 95.74
Assets $500 Million-$1 Billion(3) 29.69 5,931 83.6 30.50 15.63 29.19 1.61 0.00 55.10
Assets $250-$500 Million(5) 27.85 2,844 34.0 30.50 15.56 27.75 0.36 349.78 61.88
Assets less than $250 Million(10) 20.63 2,207 16.2 21.23 11.97 20.56 0.11 0.00 78.91
Goodwill Companies(9) 32.17 18,753 220.1 33.56 15.51 31.67 1.74 299.68 81.72
Non-Goodwill Companies(14) 22.79 2,586 24.7 23.56 12.54 22.81 -0.18 0.00 72.88
MHC Institutions(23) 26.10 8,292 93.7 27.09 13.59 25.93 0.50 299.68 76.67
MHC Converted Last 3 Months(1) 16.25 2,760 20.2 16.87 13.62 16.87 -3.68 0.00 0.00
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(21) 0.49 0.80 12.21 11.94 111.50
BIF-Insured Thrifts(2) 0.81 0.73 9.79 9.78 101.80
NASDAQ Listed OTC Companies(23) 0.53 0.79 11.92 11.69 110.36
Florida Companies(3) 0.62 0.94 13.91 13.87 142.53
Mid-Atlantic Companies(10) 0.44 0.71 11.63 11.22 102.82
Mid-West Companies(7) 0.49 0.84 11.84 11.82 107.35
New England Companies(1) 1.39 1.03 10.93 10.92 128.90
Thrift Strategy(21) 0.48 0.78 11.98 11.74 109.20
Diversified Strategy(1) 1.39 1.03 10.93 10.92 128.90
Companies Issuing Dividends(22) 0.55 0.80 11.77 11.52 112.07
Companies Without Dividends(1) 0.32 0.67 14.36 14.36 82.97
Equity/Assets 6-12%(16) 0.57 0.84 11.94 11.61 126.35
Equity/Assets >12%(7) 0.45 0.68 11.87 11.87 71.96
Actively Traded Companies(1) 0.80 1.25 13.39 11.94 142.18
Holding Company Structure(1) 0.80 1.25 13.39 11.94 142.18
Assets Over $1 Billion(5) 0.89 1.02 11.85 10.91 135.68
Assets $500 Million-$1 Billion(3) 0.62 0.94 13.91 13.87 142.53
Assets $250-$500 Million(5) 0.56 0.94 12.47 12.43 120.12
Assets less than $250 Million(10) 0.32 0.59 11.26 11.26 85.99
Goodwill Companies(9) 0.79 1.01 12.25 11.59 142.66
Non-Goodwill Companies(14) 0.39 0.68 11.74 11.74 92.73
MHC Institutions(23) 0.53 0.79 11.92 11.69 110.36
MHC Converted Last 3 Months(1) 0.32 0.67 14.36 14.36 82.97
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ---------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 56.56 97,336 5,505.3 57.56 26.25 54.62 3.55 201.65 74.03
CSA Coast Savings Financial of CA 50.44 18,616 939.0 50.50 31.25 48.62 3.74 336.33 37.74
CFB Commercial Federal Corp. of NE 46.50 21,553 1,002.2 46.50 27.67 45.00 3.33 ***.** 45.31
DME Dime Bancorp, Inc. of NY* 21.06 103,719 2,184.3 21.75 12.87 20.50 2.73 109.34 42.78
DSL Downey Financial Corp. of CA 23.75 26,733 634.9 24.37 15.40 23.00 3.26 118.69 27.07
FRC First Republic Bank of CA* 27.62 9,693 267.7 27.62 14.87 27.62 0.00 513.78 64.90
FED FirstFed Fin. Corp. of CA 33.37 10,575 352.9 34.87 19.37 33.69 -0.95 106.63 51.68
GSB Glendale Fed. Bk, FSB of CA 30.75 50,349 1,548.2 31.50 17.50 30.81 -0.19 89.23 32.26
GDW Golden West Fin. Corp. of CA 90.94 56,739 5,159.8 90.94 56.37 86.00 5.74 247.23 44.07
GPT GreenPoint Fin. Corp. of NY* 60.31 45,044 2,716.6 66.56 37.62 58.69 2.76 N.A. 26.97
NYB New York Bancorp, Inc. of NY 29.62 21,591 639.5 32.00 15.12 30.31 -2.28 317.77 52.92
WES Westcorp Inc. of Orange CA 21.81 26,195 571.3 23.87 13.25 21.19 2.93 197.54 -0.32
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares of LA* 21.88 2,731 59.8 22.25 13.62 21.75 0.60 N.A. 47.14
BKC American Bank of Waterbury CT* 37.25 2,306 85.9 39.00 25.87 35.75 4.20 98.67 33.04
BFD BostonFed Bancorp of MA 21.94 5,947 130.5 21.94 12.87 19.62 11.82 N.A. 48.75
CFX CFX Corp of NH* 21.00 13,144 276.0 21.25 13.81 21.25 -1.18 76.47 35.48
CNY Carver Bancorp, Inc. of NY 12.12 2,314 28.0 13.37 7.37 12.00 1.00 93.92 46.91
CBK Citizens First Fin.Corp. of IL 18.25 2,594 47.3 18.50 11.37 18.25 0.00 N.A. 27.00
ESX Essex Bancorp of VA(8) 4.94 1,057 5.2 7.94 1.00 4.44 11.26 -70.51 125.57
FCB Falmouth Co-Op Bank of MA* 19.62 1,455 28.5 19.62 12.00 17.62 11.35 N.A. 49.54
FAB FirstFed America Bancorp of MA 21.00 8,707 182.8 21.00 13.62 20.12 4.37 N.A. N.A.
GAF GA Financial Corp. of PA 19.00 7,985 151.7 19.50 12.87 17.87 6.32 N.A. 25.66
JSB JSB Financial, Inc. of NY 47.50 9,845 467.6 49.37 35.00 47.94 -0.92 313.04 25.00
KNK Kankakee Bancorp of IL 31.50 1,425 44.9 31.87 20.37 30.37 3.72 215.00 27.27
KYF Kentucky First Bancorp of KY 13.62 1,319 18.0 15.12 10.56 12.75 6.82 N.A. 25.30
MBB MSB Bancorp of Middletown NY* 24.75 2,844 70.4 24.75 15.50 23.87 3.69 147.50 26.15
PDB Piedmont Bancorp of NC 10.75 2,751 29.6 19.12 9.25 10.56 1.80 N.A. 2.38
SSB Scotland Bancorp of NC 18.00 1,914 34.5 19.25 12.75 18.62 -3.33 N.A. 27.48
SZB SouthFirst Bancshares of AL 18.00 848 15.3 18.00 12.25 16.75 7.46 N.A. 35.85
SRN Southern Banc Company of AL 16.12 1,230 19.8 16.37 12.25 16.12 0.00 N.A. 22.87
SSM Stone Street Bancorp of NC 21.12 1,898 40.1 27.25 17.50 21.44 -1.49 N.A. 3.02
TSH Teche Holding Company of LA 19.12 3,438 65.7 19.37 13.00 18.37 4.08 N.A. 33.05
FTF Texarkana Fst. Fin. Corp of AR 23.75 1,790 42.5 24.87 13.62 24.25 -2.06 N.A. 51.95
THR Three Rivers Fin. Corp. of MI 16.81 824 13.9 16.81 12.62 16.19 3.83 N.A. 20.07
TBK Tolland Bank of CT* 17.62 1,560 27.5 18.00 8.25 17.37 1.44 143.03 95.78
WSB Washington SB, FSB of MD 7.00 4,247 29.7 7.37 4.38 6.94 0.86 460.00 43.74
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 37.75 698 26.3 37.75 27.14 36.50 3.42 N.A. 32.46
AFED AFSALA Bancorp, Inc. of NY 17.00 1,455 24.7 17.87 11.31 17.25 -1.45 N.A. 41.67
ALBK ALBANK Fin. Corp. of Albany NY 45.87 12,825 588.3 45.87 27.37 44.25 3.66 97.29 46.22
AMFC AMB Financial Corp. of IN 15.50 964 14.9 15.50 11.00 14.50 6.90 N.A. 16.98
ASBP ASB Financial Corp. of OH 13.00 1,721 22.4 18.25 11.50 13.00 0.00 N.A. 0.00
ABBK Abington Savings Bank of MA* 32.75 1,852 60.7 33.00 16.87 31.87 2.76 394.71 67.95
AABC Access Anytime Bancorp of NM 6.88 1,193 8.2 6.88 5.25 6.50 5.85 1.93 25.09
AFBC Advance Fin. Bancorp of WV 15.75 1,084 17.1 16.25 12.75 15.87 -0.76 N.A. N.A.
AADV Advantage Bancorp of WI 48.62 3,234 157.2 49.00 31.25 47.75 1.82 428.48 50.76
AFCB Affiliated Comm BC, Inc of MA 30.12 6,465 194.7 30.12 16.00 26.50 13.66 N.A. 76.14
ALBC Albion Banc Corp. of Albion NY 23.25 250 5.8 24.25 16.50 23.25 0.00 78.85 38.81
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 1.98 3.16 20.35 17.34 488.33
CSA Coast Savings Financial of CA 0.99 2.48 24.06 23.76 488.97
CFB Commercial Federal Corp. of NE 2.05 2.89 19.77 17.53 329.27
DME Dime Bancorp, Inc. of NY* 1.05 1.33 10.21 9.74 193.67
DSL Downey Financial Corp. of CA 0.86 1.43 15.26 15.05 220.16
FRC First Republic Bank of CA* 1.56 1.33 16.56 16.55 230.89
FED FirstFed Fin. Corp. of CA 1.13 2.07 19.14 18.93 396.52
GSB Glendale Fed. Bk, FSB of CA 0.79 1.85 17.81 15.83 322.12
GDW Golden West Fin. Corp. of CA 6.74 8.22 43.90 43.90 689.03
GPT GreenPoint Fin. Corp. of NY* 3.17 3.09 30.44 17.11 295.27
NYB New York Bancorp, Inc. of NY 1.98 2.32 7.73 7.73 152.08
WES Westcorp Inc. of Orange CA 1.11 0.55 12.71 12.67 140.42
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares of LA* 0.47 0.47 16.70 16.70 95.82
BKC American Bank of Waterbury CT* 3.13 2.69 21.77 20.90 262.73
BFD BostonFed Bancorp of MA 0.74 0.96 14.42 13.94 164.10
CFX CFX Corp of NH* 1.10 1.31 10.52 9.84 141.44
CNY Carver Bancorp, Inc. of NY -0.74 0.01 14.93 14.32 178.81
CBK Citizens First Fin.Corp. of IL 0.30 0.59 14.74 14.74 104.69
ESX Essex Bancorp of VA(8) -0.05 0.05 0.49 0.31 179.83
FCB Falmouth Co-Op Bank of MA* 0.52 0.49 15.40 15.40 64.49
FAB FirstFed America Bancorp of MA -0.21 0.50 14.26 14.26 117.25
GAF GA Financial Corp. of PA 0.80 1.02 14.25 14.10 93.89
JSB JSB Financial, Inc. of NY 2.78 2.65 35.54 35.54 155.52
KNK Kankakee Bancorp of IL 1.62 2.02 26.59 24.99 239.77
KYF Kentucky First Bancorp of KY 0.58 0.75 11.17 11.17 67.44
MBB MSB Bancorp of Middletown NY* 0.49 0.51 21.15 10.38 286.18
PDB Piedmont Bancorp of NC -0.19 0.30 7.42 7.42 44.62
SSB Scotland Bancorp of NC 0.51 0.62 13.44 13.44 36.30
SZB SouthFirst Bancshares of AL -0.03 0.25 16.06 16.06 114.72
SRN Southern Banc Company of AL 0.13 0.44 14.42 14.27 85.35
SSM Stone Street Bancorp of NC 0.80 0.96 16.13 16.13 55.91
TSH Teche Holding Company of LA 0.78 1.08 15.53 15.53 118.17
FTF Texarkana Fst. Fin. Corp of AR 1.31 1.62 15.03 15.03 95.73
THR Three Rivers Fin. Corp. of MI 0.61 0.88 15.22 15.22 110.64
TBK Tolland Bank of CT* 1.11 1.16 10.60 10.30 152.71
WSB Washington SB, FSB of MD 0.30 0.44 5.05 5.05 60.83
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 1.18 0.50 32.00 31.34 387.52
AFED AFSALA Bancorp, Inc. of NY 0.82 0.82 14.74 14.74 109.40
ALBK ALBANK Fin. Corp. of Albany NY 2.29 2.82 25.85 22.59 280.88
AMFC AMB Financial Corp. of IN 0.66 0.73 14.61 14.61 97.70
ASBP ASB Financial Corp. of OH 0.39 0.56 10.15 10.15 65.23
ABBK Abington Savings Bank of MA* 2.16 1.92 18.73 16.87 270.66
AABC Access Anytime Bancorp of NM -0.45 -0.11 6.53 6.53 87.72
AFBC Advance Fin. Bancorp of WV 0.35 0.71 14.76 14.76 95.55
AADV Advantage Bancorp of WI 1.27 2.81 29.05 27.16 315.25
AFCB Affiliated Comm BC, Inc of MA 1.53 1.74 16.49 16.40 168.67
ALBC Albion Banc Corp. of Albion NY 0.27 0.96 23.96 23.96 274.51
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ---------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ABCL Allied Bancorp of IL 33.75 5,345 180.4 34.00 23.25 34.00 -0.74 237.50 35.00
ATSB AmTrust Capital Corp. of IN 13.19 526 6.9 13.19 8.75 12.87 2.49 N.A. 31.90
AHCI Ambanc Holding Co., Inc. of NY* 15.37 4,392 67.5 16.62 10.00 15.12 1.65 N.A. 36.62
ASBI Ameriana Bancorp of IN 21.25 3,230 68.6 22.00 13.50 21.62 -1.71 130.23 32.81
AFFFZ America First Fin. Fund of CA(8) 41.62 6,011 250.2 41.75 28.00 40.37 3.10 121.97 37.59
ANBK American Nat'l Bancorp of MD(8) 20.50 3,613 74.1 20.50 11.37 20.00 2.50 N.A. 69.14
ABCW Anchor Bancorp Wisconsin of WI 29.00 9,049 262.4 29.00 16.50 27.75 4.50 97.41 62.28
ANDB Andover Bancorp, Inc. of MA* 35.50 5,148 182.8 36.00 20.52 32.56 9.03 230.23 38.56
ASFC Astoria Financial Corp. of NY 49.69 20,978 1,042.4 50.25 27.62 48.37 2.73 89.30 34.77
AVND Avondale Fin. Corp. of IL 16.37 3,495 57.2 18.50 12.75 16.87 -2.96 N.A. -4.38
BKCT Bancorp Connecticut of CT* 32.75 2,534 83.0 33.50 21.25 31.75 3.15 274.29 45.56
BPLS Bank Plus Corp. of CA 12.00 19,308 231.7 13.75 9.62 11.37 5.54 N.A. 4.35
BWFC Bank West Fin. Corp. of MI 18.87 1,753 33.1 18.87 10.25 18.62 1.34 N.A. 77.68
BANC BankAtlantic Bancorp of FL 13.50 22,473 303.4 17.12 12.12 12.56 7.48 224.52 0.97
BKUNA BankUnited SA of FL 12.87 8,869 114.1 12.87 7.75 12.87 0.00 137.02 28.70
BVCC Bay View Capital Corp. of CA 28.13 12,979 365.1 28.62 17.50 26.50 6.15 42.43 32.75
FSNJ Bayonne Banchsares of NJ 12.37 8,993 111.2 13.06 5.20 12.56 -1.51 N.A. 57.78
BFSB Bedford Bancshares of VA 25.25 1,142 28.8 25.25 16.62 25.25 0.00 140.48 43.30
BFFC Big Foot Fin. Corp. of IL 17.00 2,513 42.7 17.75 12.31 17.00 0.00 N.A. 30.77
BSBC Branford SB of CT(8)* 5.28 6,559 34.6 5.28 3.19 5.06 4.35 149.06 36.43
BYFC Broadway Fin. Corp. of CA 11.00 835 9.2 11.25 9.00 11.00 0.00 N.A. 18.92
CBES CBES Bancorp of MO 19.12 1,025 19.6 19.12 12.62 18.00 6.22 N.A. 34.18
CCFH CCF Holding Company of GA 16.50 820 13.5 17.12 12.75 16.50 0.00 N.A. 11.86
CENF CENFED Financial Corp. of CA 35.87 5,729 205.5 36.87 21.82 36.12 -0.69 128.76 34.90
CFSB CFSB Bancorp of Lansing MI 31.00 5,096 158.0 31.00 16.36 26.00 19.23 244.44 74.84
CKFB CKF Bancorp of Danville KY 19.00 925 17.6 20.75 17.50 19.00 0.00 N.A. -6.17
CNSB CNS Bancorp of MO 17.25 1,653 28.5 17.50 12.50 17.00 1.47 N.A. 14.09
CSBF CSB Financial Group Inc of IL* 12.50 942 11.8 12.50 9.50 11.87 5.31 N.A. 23.52
CBCI Calumet Bancorp of Chicago IL 45.00 2,111 95.0 45.00 27.75 44.25 1.69 122.22 35.34
CAFI Camco Fin. Corp. of OH 22.00 3,214 70.7 22.00 14.05 18.25 20.55 N.A. 45.50
CMRN Cameron Fin. Corp. of MO 18.00 2,627 47.3 18.00 14.50 18.00 0.00 N.A. 12.50
CAPS Capital Savings Bancorp of MO 17.25 1,892 32.6 18.25 10.25 16.37 5.38 30.19 32.69
CFNC Carolina Fincorp of NC* 17.75 1,851 32.9 17.87 13.00 17.50 1.43 N.A. 32.76
CASB Cascade SB of Everett WA(8) 14.25 2,571 36.6 16.80 10.40 12.75 11.76 11.33 10.47
CATB Catskill Fin. Corp. of NY* 16.62 4,720 78.4 17.25 12.00 16.75 -0.78 N.A. 18.71
CNIT Cenit Bancorp of Norfolk VA 53.25 1,650 87.9 53.25 38.50 50.37 5.72 235.33 28.31
CEBK Central Co-Op. Bank of MA* 21.25 1,965 41.8 21.50 14.75 20.87 1.82 304.76 21.43
CENB Century Bancshares of NC* 79.50 407 32.4 79.50 62.00 79.50 0.00 N.A. 22.31
CBSB Charter Financial Inc. of IL 21.44 4,150 89.0 21.50 12.50 21.25 0.89 N.A. 71.52
COFI Charter One Financial of OH 58.50 46,186 2,701.9 59.00 37.12 56.19 4.11 234.29 39.29
CVAL Chester Valley Bancorp of PA 23.00 2,162 49.7 23.00 13.90 21.37 7.63 103.00 63.12
CTZN CitFed Bancorp of Dayton OH 48.25 8,638 416.8 48.25 25.17 47.50 1.58 436.11 46.21
CLAS Classic Bancshares of KY 14.87 1,305 19.4 15.00 11.25 14.00 6.21 N.A. 27.97
CMSB Cmnwealth Bancorp of PA 19.50 17,096 333.4 19.50 11.50 17.62 10.67 N.A. 30.00
CBSA Coastal Bancorp of Houston TX 32.25 4,972 160.3 33.25 19.62 32.50 -0.77 N.A. 41.01
CFCP Coastal Fin. Corp. of SC 24.50 4,641 113.7 27.75 14.25 25.00 -2.00 145.00 55.56
CMSV Commty. Svgs, MHC of FL (48.5) 32.12 5,090 79.3 32.75 16.25 31.12 3.21 N.A. 56.68
CFTP Community Fed. Bancorp of MS 17.25 4,629 79.9 20.00 13.37 17.25 0.00 N.A. 1.47
CFFC Community Fin. Corp. of VA 23.00 1,275 29.3 23.50 20.50 21.75 5.75 228.57 10.84
CFBC Community First Bnkg Co. of GA 35.00 2,414 84.5 35.00 31.87 34.75 0.72 N.A. N.A.
CIBI Community Inv. Bancorp of OH 15.50 929 14.4 16.00 10.33 15.50 0.00 N.A. 36.80
COOP Cooperative Bk.for Svgs. of NC 31.00 1,492 46.3 31.00 18.25 27.50 12.73 210.00 53.09
CRZY Crazy Woman Creek Bncorp of WY 14.62 955 14.0 14.87 11.25 14.87 -1.68 N.A. 21.83
DNFC D&N Financial Corp. of MI 21.00 8,191 172.0 21.00 13.75 20.37 3.09 140.00 25.37
DCBI Delphos Citizens Bancorp of OH 17.50 2,039 35.7 17.50 11.75 17.37 0.75 N.A. 45.83
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ABCL Allied Bancorp of IL 0.91 1.33 23.40 23.11 262.72
ATSB AmTrust Capital Corp. of IN 0.40 0.26 13.73 13.58 135.04
AHCI Ambanc Holding Co., Inc. of NY* -0.64 -0.67 14.29 14.29 110.42
ASBI Ameriana Bancorp of IN 0.75 1.05 13.49 13.48 123.14
AFFFZ America First Fin. Fund of CA(8) 5.51 6.76 30.76 30.38 364.44
ANBK American Nat'l Bancorp of MD(8) 0.37 0.86 12.54 12.54 139.86
ABCW Anchor Bancorp Wisconsin of WI 1.55 2.00 13.24 13.00 212.83
ANDB Andover Bancorp, Inc. of MA* 2.57 2.65 19.59 19.59 243.00
ASFC Astoria Financial Corp. of NY 1.96 2.80 28.59 24.01 365.36
AVND Avondale Fin. Corp. of IL -0.85 -2.63 15.85 15.85 173.75
BKCT Bancorp Connecticut of CT* 2.15 2.03 17.32 17.32 169.05
BPLS Bank Plus Corp. of CA -0.46 0.04 9.27 9.26 183.03
BWFC Bank West Fin. Corp. of MI 0.53 0.47 12.89 12.89 88.80
BANC BankAtlantic Bancorp of FL 0.98 0.71 6.83 5.61 121.50
BKUNA BankUnited SA of FL 0.29 0.48 7.59 6.15 203.77
BVCC Bay View Capital Corp. of CA 0.97 1.58 15.12 12.69 238.56
FSNJ Bayonne Banchsares of NJ -0.24 -0.04 9.91 9.91 68.72
BFSB Bedford Bancshares of VA 1.14 1.46 16.80 16.80 118.61
BFFC Big Foot Fin. Corp. of IL 0.04 0.35 14.34 14.34 84.46
BSBC Branford SB of CT(8)* 0.32 0.32 2.64 2.64 28.44
BYFC Broadway Fin. Corp. of CA -0.19 0.29 14.65 14.65 146.40
CBES CBES Bancorp of MO 0.69 0.86 17.08 17.08 92.90
CCFH CCF Holding Company of GA 0.05 0.07 14.36 14.36 122.93
CENF CENFED Financial Corp. of CA 1.98 2.82 20.85 20.81 400.68
CFSB CFSB Bancorp of Lansing MI 1.37 1.73 12.65 12.65 165.90
CKFB CKF Bancorp of Danville KY 1.17 0.86 15.75 15.75 65.74
CNSB CNS Bancorp of MO 0.25 0.46 14.84 14.84 59.50
CSBF CSB Financial Group Inc of IL* 0.21 0.32 12.77 12.04 50.95
CBCI Calumet Bancorp of Chicago IL 2.72 3.45 36.46 36.46 235.23
CAFI Camco Fin. Corp. of OH 1.11 1.24 14.58 13.45 152.41
CMRN Cameron Fin. Corp. of MO 0.78 0.97 17.18 17.18 79.22
CAPS Capital Savings Bancorp of MO 0.82 1.15 11.28 11.28 128.18
CFNC Carolina Fincorp of NC* 0.68 0.65 13.75 13.75 60.25
CASB Cascade SB of Everett WA(8) 0.61 0.77 8.46 8.46 137.04
CATB Catskill Fin. Corp. of NY* 0.85 0.86 15.08 15.08 60.22
CNIT Cenit Bancorp of Norfolk VA 3.75 3.44 31.12 28.58 430.03
CEBK Central Co-Op. Bank of MA* 1.44 1.46 17.07 15.20 163.33
CENB Century Bancshares of NC* 4.31 4.36 73.51 73.51 245.57
CBSB Charter Financial Inc. of IL 1.05 1.47 13.71 12.13 94.76
COFI Charter One Financial of OH 2.98 3.73 21.15 19.80 315.35
CVAL Chester Valley Bancorp of PA 0.89 1.27 12.52 12.52 149.71
CTZN CitFed Bancorp of Dayton OH 1.94 2.73 22.83 20.57 358.59
CLAS Classic Bancshares of KY 0.45 0.63 14.84 12.52 100.81
CMSB Cmnwealth Bancorp of PA 0.69 0.88 12.89 10.08 133.89
CBSA Coastal Bancorp of Houston TX 1.45 2.52 19.85 16.50 596.15
CFCP Coastal Fin. Corp. of SC 0.95 1.04 6.68 6.68 108.33
CMSV Commty. Svgs, MHC of FL (48.5) 0.73 1.09 15.46 15.46 137.48
CFTP Community Fed. Bancorp of MS 0.59 0.72 12.40 12.40 45.16
CFFC Community Fin. Corp. of VA 1.32 1.67 18.86 18.86 137.58
CFBC Community First Bnkg Co. of GA 1.05 1.06 28.74 28.35 186.68
CIBI Community Inv. Bancorp of OH 0.63 0.96 11.96 11.96 99.36
COOP Cooperative Bk.for Svgs. of NC -1.80 0.45 18.03 18.03 236.22
CRZY Crazy Woman Creek Bncorp of WY 0.58 0.71 14.67 14.67 56.83
DNFC D&N Financial Corp. of MI 1.10 1.45 10.95 10.84 196.42
DCBI Delphos Citizens Bancorp of OH 0.72 0.72 14.93 14.93 52.56
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ---------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
DIME Dime Community Bancorp of NY 20.00 13,093 261.9 20.00 13.25 19.50 2.56 N.A. 35.59
DIBK Dime Financial Corp. of CT* 31.25 5,147 160.8 31.25 16.50 29.62 5.50 197.62 81.16
EGLB Eagle BancGroup of IL 16.62 1,238 20.6 17.00 12.25 17.00 -2.24 N.A. 11.77
EBSI Eagle Bancshares of Tucker GA 18.00 5,660 101.9 18.50 13.62 17.50 2.86 148.28 16.13
EGFC Eagle Financial Corp. of CT 38.75 6,279 243.3 38.75 25.25 36.37 6.54 342.86 27.05
ETFS East Texas Fin. Serv. of TX 19.25 1,025 19.7 19.53 14.50 19.53 -1.43 N.A. 17.59
EMLD Emerald Financial Corp of OH 14.50 5,062 73.4 15.50 10.50 15.00 -3.33 N.A. 28.89
EIRE Emerald Island Bancorp, MA* 25.00 2,246 56.2 25.87 12.40 24.50 2.04 228.08 56.25
EFBC Empire Federal Bancorp of MT 17.62 2,592 45.7 17.62 12.50 15.63 12.73 N.A. N.A.
EFBI Enterprise Fed. Bancorp of OH 22.00 2,001 44.0 25.12 13.50 24.00 -8.33 N.A. 51.72
EQSB Equitable FSB of Wheaton MD 42.00 602 25.3 42.00 25.25 40.00 5.00 N.A. 48.67
FFFG F.F.O. Financial Group of FL(8) 6.75 8,446 57.0 7.06 2.62 6.62 1.96 -18.77 100.30
FCBF FCB Fin. Corp. of Neenah WI 26.50 4,073 107.9 28.00 17.12 26.75 -0.93 N.A. 43.24
FFBS FFBS Bancorp of Columbus MS 22.00 1,557 34.3 26.00 21.00 22.00 0.00 N.A. -4.35
FFDF FFD Financial Corp. of OH 15.12 1,455 22.0 15.63 10.75 15.63 -3.26 N.A. 14.11
FFLC FFLC Bancorp of Leesburg FL 31.50 2,318 73.0 32.25 18.25 32.25 -2.33 N.A. 46.51
FFFC FFVA Financial Corp. of VA 32.87 4,521 148.6 33.00 17.50 32.00 2.72 N.A. 60.34
FFWC FFW Corporation of Wabash IN 31.25 711 22.2 31.25 19.75 29.87 4.62 N.A. 42.82
FFYF FFY Financial Corp. of OH 27.12 4,145 112.4 28.25 24.00 26.87 0.93 N.A. 7.15
FMCO FMS Financial Corp. of NJ 27.50 2,388 65.7 31.50 15.50 27.25 0.92 205.56 50.68
FFHH FSF Financial Corp. of MN 20.00 3,033 60.7 21.00 12.75 17.75 12.68 N.A. 32.28
FOBC Fed One Bancorp of Wheeling WV 23.00 2,373 54.6 23.00 15.37 20.25 13.58 130.00 46.03
FBCI Fidelity Bancorp of Chicago IL 23.62 2,792 65.9 24.25 16.25 23.87 -1.05 N.A. 38.94
FSBI Fidelity Bancorp, Inc. of PA 21.25 1,550 32.9 22.00 16.82 21.25 0.00 174.90 16.89
FFFL Fidelity FSB, MHC of FL (47.7) 27.25 6,771 87.9 28.25 15.00 27.25 0.00 N.A. 53.52
FFED Fidelity Fed. Bancorp of IN 8.87 2,490 22.1 11.75 7.50 9.25 -4.11 25.82 -9.03
FFOH Fidelity Financial of OH 16.00 5,579 89.3 16.37 9.75 16.00 0.00 N.A. 39.13
FIBC Financial Bancorp, Inc. of NY 23.31 1,722 40.1 23.94 14.00 22.75 2.46 N.A. 55.40
FBSI First Bancshares of MO 24.00 1,096 26.3 25.25 15.00 24.00 0.00 88.24 44.40
FBBC First Bell Bancorp of PA 15.87 6,511 103.3 17.37 13.12 15.87 0.00 N.A. 19.77
FBER First Bergen Bancorp of NJ 18.37 3,000 55.1 19.50 10.94 17.87 2.80 N.A. 59.74
SKBO First Carnegie,MHC of PA(45.0) 16.25 2,300 16.8 16.75 11.62 16.25 0.00 N.A. N.A.
FSTC First Citizens Corp of GA 35.00 1,833 64.2 35.12 20.75 33.00 6.06 180.00 38.61
FCME First Coastal Corp. of ME* 12.25 1,359 16.6 12.25 6.62 11.00 11.36 N.A. 58.06
FFBA First Colorado Bancorp of Co 18.75 16,561 310.5 20.12 15.00 18.87 -0.64 468.18 10.29
FDEF First Defiance Fin.Corp. of OH 15.25 9,366 142.8 15.50 10.62 15.37 -0.78 N.A. 23.28
FESX First Essex Bancorp of MA* 20.37 7,504 152.9 20.37 11.62 18.62 9.40 239.50 55.26
FFES First FS&LA of E. Hartford CT 35.12 2,676 94.0 35.16 18.75 34.62 1.44 440.31 52.70
FFSX First FS&LA. MHC of IA (46.1) 30.00 2,828 39.1 35.00 20.75 28.00 7.14 349.78 53.85
BDJI First Fed. Bancorp. of MN 22.00 683 15.0 22.00 15.12 21.00 4.76 N.A. 18.92
FFBH First Fed. Bancshares of AR 21.25 4,896 104.0 21.62 14.75 21.12 0.62 N.A. 33.90
FTFC First Fed. Capital Corp. of WI 25.62 9,141 234.2 26.50 13.67 24.37 5.13 241.60 63.50
FFKY First Fed. Fin. Corp. of KY 22.75 4,170 94.9 23.00 17.75 22.75 0.00 44.44 12.35
FFBZ First Federal Bancorp of OH 19.00 1,572 29.9 19.75 13.25 18.25 4.11 90.00 18.75
FFCH First Fin. Holdings Inc. of SC 37.00 6,357 235.2 37.00 19.25 36.00 2.78 202.04 64.44
FFBI First Financial Bancorp of IL 19.50 415 8.1 19.50 15.50 19.25 1.30 N.A. 22.87
FFHC First Financial Corp. of WI(8) 36.87 36,209 1,335.0 36.87 18.70 33.25 10.89 134.10 50.49
FFHS First Franklin Corp. of OH 19.75 1,192 23.5 21.00 14.25 19.75 0.00 50.53 19.70
FGHC First Georgia Hold. Corp of GA 9.12 3,052 27.8 9.50 4.17 7.75 17.68 138.12 60.85
FSPG First Home Bancorp of NJ 22.25 2,708 60.3 22.37 13.50 20.37 9.23 270.83 60.42
FFSL First Independence Corp. of KS 14.62 997 14.6 14.62 9.50 14.62 0.00 N.A. 40.98
FISB First Indiana Corp. of IN 23.75 10,561 250.8 25.00 17.37 23.50 1.06 75.93 10.98
FKFS First Keystone Fin. Corp of PA 29.59 1,228 36.3 29.59 17.75 28.75 2.92 N.A. 53.71
FLKY First Lancaster Bncshrs of KY 15.50 959 14.9 16.25 13.87 15.50 0.00 N.A. 6.02
FLFC First Liberty Fin. Corp. of GA 24.75 7,725 191.2 24.75 16.50 22.12 11.89 387.20 34.73
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
DIME Dime Community Bancorp of NY 0.94 1.01 14.58 12.56 100.44
DIBK Dime Financial Corp. of CT* 2.82 2.83 13.52 13.08 169.78
EGLB Eagle BancGroup of IL -0.12 0.27 16.69 16.69 140.80
EBSI Eagle Bancshares of Tucker GA 0.64 0.87 12.45 12.45 149.91
EGFC Eagle Financial Corp. of CT 0.19 1.13 22.02 17.19 320.65
ETFS East Texas Fin. Serv. of TX 0.34 0.70 19.97 19.97 109.95
EMLD Emerald Financial Corp of OH 0.81 1.00 9.03 8.89 119.14
EIRE Emerald Island Bancorp, MA* 1.52 1.60 13.39 13.39 189.23
EFBC Empire Federal Bancorp of MT 0.35 0.46 14.76 14.76 42.30
EFBI Enterprise Fed. Bancorp of OH 0.82 0.91 15.82 15.80 128.29
EQSB Equitable FSB of Wheaton MD 2.20 3.51 25.80 25.80 511.96
FFFG F.F.O. Financial Group of FL(8) 0.25 0.36 2.46 2.46 37.89
FCBF FCB Fin. Corp. of Neenah WI 0.60 0.71 11.65 11.65 66.58
FFBS FFBS Bancorp of Columbus MS 0.95 1.20 16.15 16.15 83.98
FFDF FFD Financial Corp. of OH 0.44 0.61 14.50 14.50 58.62
FFLC FFLC Bancorp of Leesburg FL 1.06 1.53 22.51 22.51 167.00
FFFC FFVA Financial Corp. of VA 1.32 1.60 16.29 15.95 123.62
FFWC FFW Corporation of Wabash IN 1.89 2.36 24.11 21.72 253.24
FFYF FFY Financial Corp. of OH 1.28 1.82 19.82 19.82 144.57
FMCO FMS Financial Corp. of NJ 1.56 2.29 15.24 14.97 232.38
FFHH FSF Financial Corp. of MN 0.78 0.99 14.16 14.16 124.71
FOBC Fed One Bancorp of Wheeling WV 0.99 1.41 16.63 15.86 150.32
FBCI Fidelity Bancorp of Chicago IL 0.95 1.33 18.22 18.18 175.45
FSBI Fidelity Bancorp, Inc. of PA 1.08 1.72 15.83 15.83 234.39
FFFL Fidelity FSB, MHC of FL (47.7) 0.50 0.79 12.36 12.27 147.58
FFED Fidelity Fed. Bancorp of IN 0.17 0.30 5.17 5.17 100.52
FFOH Fidelity Financial of OH 0.51 0.75 12.17 10.74 94.06
FIBC Financial Bancorp, Inc. of NY 0.87 1.55 15.35 15.28 164.04
FBSI First Bancshares of MO 1.29 1.56 20.26 20.23 149.61
FBBC First Bell Bancorp of PA 1.06 1.23 10.78 10.78 109.72
FBER First Bergen Bancorp of NJ 0.38 0.66 13.47 13.47 94.92
SKBO First Carnegie,MHC of PA(45.0) 0.24 0.35 10.21 10.21 65.23
FSTC First Citizens Corp of GA 1.45 1.43 16.26 12.20 178.05
FCME First Coastal Corp. of ME* 4.50 4.36 10.35 10.35 112.13
FFBA First Colorado Bancorp of Co 0.81 0.80 11.79 11.63 91.20
FDEF First Defiance Fin.Corp. of OH 0.43 0.59 12.57 12.57 58.96
FESX First Essex Bancorp of MA* 1.32 1.15 11.57 10.05 165.97
FFES First FS&LA of E. Hartford CT 1.52 2.50 23.63 23.63 367.56
FFSX First FS&LA. MHC of IA (46.1) 0.69 1.19 13.74 13.63 165.69
BDJI First Fed. Bancorp. of MN 0.47 1.00 17.60 17.60 161.92
FFBH First Fed. Bancshares of AR 0.81 1.11 16.36 16.36 109.31
FTFC First Fed. Capital Corp. of WI 1.18 1.37 10.64 9.97 167.40
FFKY First Fed. Fin. Corp. of KY 1.14 1.36 12.40 11.68 90.50
FFBZ First Federal Bancorp of OH 0.88 1.23 9.66 9.65 128.03
FFCH First Fin. Holdings Inc. of SC 1.43 2.10 16.03 16.03 262.26
FFBI First Financial Bancorp of IL -0.85 0.94 17.63 17.63 203.69
FFHC First Financial Corp. of WI(8) 1.51 2.03 11.67 11.37 163.81
FFHS First Franklin Corp. of OH 0.36 1.21 17.17 17.06 190.39
FGHC First Georgia Hold. Corp of GA 0.32 0.25 4.21 3.86 51.24
FSPG First Home Bancorp of NJ 1.64 2.14 12.85 12.64 192.91
FFSL First Independence Corp. of KS 0.47 0.75 11.60 11.60 111.21
FISB First Indiana Corp. of IN 1.17 1.43 13.77 13.60 144.00
FKFS First Keystone Fin. Corp of PA 1.35 1.93 19.09 19.09 261.24
FLKY First Lancaster Bncshrs of KY 0.46 0.56 14.44 14.44 42.18
FLFC First Liberty Fin. Corp. of GA 1.32 1.08 12.30 11.09 166.85
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ---------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CASH First Midwest Fin. Corp. of IA 18.78 2,734 51.3 19.87 15.00 18.75 0.16 N.A. 22.50
FMBD First Mutual Bancorp of IL 15.50 3,507 54.4 16.12 13.00 15.25 1.64 N.A. 3.33
FMSB First Mutual SB of Bellevue WA* 20.87 2,702 56.4 22.25 12.73 20.50 1.80 169.29 31.18
FNGB First Northern Cap. Corp of WI 13.12 8,834 115.9 14.00 8.00 13.31 -1.43 80.72 61.38
FFPB First Palm Beach Bancorp of FL 34.75 5,031 174.8 35.00 22.75 35.00 -0.71 N.A. 47.12
FSLA First SB SLA MHC of NJ (47.5) 34.75 7,264 118.3 35.00 14.77 34.00 2.21 247.50 87.84
SOPN First SB, SSB, Moore Co. of NC 23.00 3,679 84.6 24.00 17.25 20.50 12.20 N.A. 22.67
FWWB First Savings Bancorp of WA* 24.12 10,519 253.7 24.87 16.56 24.25 -0.54 N.A. 31.30
SHEN First Shenango Bancorp of PA 31.50 2,072 65.3 31.75 20.25 31.75 -0.79 N.A. 40.00
FSFC First So.east Fin. Corp. of SC(8) 15.63 4,388 68.6 15.87 9.12 15.50 0.84 N.A. 66.63
FBNW FirstBank Corp of Clarkston WA 17.00 1,984 33.7 19.00 15.50 17.00 0.00 N.A. N.A.
FFDB FirstFed Bancorp of AL 17.75 1,148 20.4 18.50 12.50 17.75 0.00 N.A. 42.00
FSPT FirstSpartan Fin. Corp. of SC 35.62 4,430 157.8 37.00 35.00 35.75 -0.36 N.A. N.A.
FLAG Flag Financial Corp of GA 15.50 2,037 31.6 15.75 10.25 15.50 0.00 58.16 44.19
FLGS Flagstar Bancorp, Inc of MI 21.25 13,670 290.5 21.25 13.00 20.37 4.32 N.A. N.A.
FFIC Flushing Fin. Corp. of NY* 22.12 7,979 176.5 23.50 17.37 21.88 1.10 N.A. 22.08
FBHC Fort Bend Holding Corp. of TX 36.25 827 30.0 36.25 17.75 33.75 7.41 N.A. 42.16
FTSB Fort Thomas Fin. Corp. of KY 12.50 1,495 18.7 14.75 9.25 12.25 2.04 N.A. -14.50
FKKY Frankfort First Bancorp of KY 10.25 3,280 33.6 12.25 8.00 10.62 -3.48 N.A. -9.85
FTNB Fulton Bancorp of MO 25.50 1,719 43.8 25.75 12.50 24.00 6.25 N.A. 65.91
GFSB GFS Bancorp of Grinnell IA 15.50 988 15.3 15.50 10.12 14.25 8.77 N.A. 45.95
GUPB GFSB Bancorp of Gallup NM 20.12 839 16.9 20.12 13.50 18.75 7.31 N.A. 26.78
GSLA GS Financial Corp. of LA 15.75 3,438 54.1 16.12 13.37 16.00 -1.56 N.A. N.A.
GOSB GSB Financial Corp. of NY 16.00 2,248 36.0 16.00 14.25 14.37 11.34 N.A. N.A.
GWBC Gateway Bancorp of KY(8) 18.00 1,076 19.4 18.25 13.25 17.94 0.33 N.A. 26.32
GBCI Glacier Bancorp of MT 18.00 6,812 122.6 20.25 15.33 18.69 -3.69 272.67 10.23
GFCO Glenway Financial Corp. of OH 27.75 1,140 31.6 27.75 18.25 27.75 0.00 N.A. 35.37
GTPS Great American Bancorp of IL 17.00 1,760 29.9 18.00 13.50 18.00 -5.56 N.A. 14.79
GTFN Great Financial Corp. of KY(8) 42.25 13,791 582.7 42.87 28.13 42.75 -1.17 N.A. 45.09
GSBC Great Southern Bancorp of MO 19.00 8,105 154.0 19.00 14.75 19.00 0.00 550.68 6.68
GDVS Greater DV SB,MHC of PA (19.9)* 24.00 3,272 15.6 24.75 9.25 24.25 -1.03 N.A. 131.44
GSFC Green Street Fin. Corp. of NC 18.75 4,298 80.6 19.00 14.87 18.62 0.70 N.A. 20.97
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 23.50 3,125 22.8 24.25 9.75 22.00 6.82 N.A. 94.86
HCBB HCB Bancshares of AR 13.50 2,645 35.7 14.12 12.62 13.62 -0.88 N.A. N.A.
HEMT HF Bancorp of Hemet CA 15.37 6,282 96.6 15.87 9.62 14.87 3.36 N.A. 38.22
HFFC HF Financial Corp. of SD 25.25 2,979 75.2 27.00 14.75 24.12 4.68 405.00 45.87
HFNC HFNC Financial Corp. of NC 16.00 17,192 275.1 22.06 14.87 16.81 -4.82 N.A. -10.46
HMNF HMN Financial, Inc. of MN 24.94 4,212 105.0 25.75 16.00 25.00 -0.24 N.A. 37.64
HALL Hallmark Capital Corp. of WI 25.50 1,443 36.8 26.00 16.75 23.37 9.11 N.A. 43.66
HARB Harbor FSB, MHC of FL (46.6)(8) 57.50 4,970 133.2 58.22 29.25 57.25 0.44 N.A. 60.84
HRBF Harbor Federal Bancorp of MD 22.00 1,693 37.2 22.00 14.00 20.00 10.00 120.00 39.68
HFSA Hardin Bancorp of Hardin MO 17.75 859 15.2 17.75 11.56 16.87 5.22 N.A. 42.00
HARL Harleysville SA of PA 25.75 1,652 42.5 27.75 14.00 27.00 -4.63 45.07 62.97
HFGI Harrington Fin. Group of IN 13.50 3,257 44.0 13.50 9.75 12.56 7.48 N.A. 25.58
HARS Harris SB, MHC of PA (24.3) 44.00 11,223 119.8 45.00 14.87 44.25 -0.56 N.A. 141.10
HFFB Harrodsburg 1st Fin Bcrp of KY 16.00 2,025 32.4 19.00 14.75 15.75 1.59 N.A. -15.21
HHFC Harvest Home Fin. Corp. of OH 12.00 915 11.0 13.00 9.25 12.00 0.00 N.A. 23.08
HAVN Haven Bancorp of Woodhaven NY 43.00 4,377 188.2 43.00 25.56 41.75 2.99 N.A. 50.24
HVFD Haverfield Corp. of OH(8) 29.00 1,906 55.3 29.00 17.75 27.50 5.45 87.10 51.67
HTHR Hawthorne Fin. Corp. of CA 17.25 3,035 52.4 17.75 6.62 17.25 0.00 -37.27 112.18
HMLK Hemlock Fed. Fin. Corp. of IL 15.12 2,076 31.4 15.50 12.50 15.12 0.00 N.A. N.A.
HBNK Highland Federal Bank of CA 30.75 2,300 70.7 30.75 14.25 30.25 1.65 N.A. 80.88
HIFS Hingham Inst. for Sav. of MA* 27.50 1,303 35.8 28.00 15.00 25.75 6.80 503.07 46.67
HBEI Home Bancorp of Elgin IL 18.12 6,856 124.2 19.31 11.81 18.12 0.00 N.A. 34.22
HBFW Home Bancorp of Fort Wayne IN 23.50 2,525 59.3 24.75 15.87 24.75 -5.05 N.A. 23.68
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CASH First Midwest Fin. Corp. of IA 1.00 1.27 15.62 13.84 137.10
FMBD First Mutual Bancorp of IL 0.10 0.32 15.30 11.59 119.10
FMSB First Mutual SB of Bellevue WA* 1.56 1.52 10.91 10.91 159.89
FNGB First Northern Cap. Corp of WI 0.44 0.63 8.14 8.14 72.19
FFPB First Palm Beach Bancorp of FL -0.09 0.08 21.76 21.23 331.23
FSLA First SB SLA MHC of NJ (47.5) 0.80 1.25 13.39 11.94 142.18
SOPN First SB, SSB, Moore Co. of NC 1.06 1.27 18.26 18.26 79.97
FWWB First Savings Bancorp of WA* 0.89 0.84 14.13 13.00 95.79
SHEN First Shenango Bancorp of PA 1.69 2.20 21.75 21.75 198.56
FSFC First So.east Fin. Corp. of SC(8) 0.01 0.70 7.80 7.80 76.29
FBNW FirstBank Corp of Clarkston WA 0.54 0.44 14.00 14.00 77.62
FFDB FirstFed Bancorp of AL 0.95 1.45 14.48 13.20 153.77
FSPT FirstSpartan Fin. Corp. of SC 1.00 1.16 27.63 27.63 104.97
FLAG Flag Financial Corp of GA -0.03 0.17 10.44 10.44 108.95
FLGS Flagstar Bancorp, Inc of MI 0.00 0.00 6.07 6.07 111.13
FFIC Flushing Fin. Corp. of NY* 0.93 0.97 16.68 16.68 107.79
FBHC Fort Bend Holding Corp. of TX 0.74 1.71 23.24 21.64 385.33
FTSB Fort Thomas Fin. Corp. of KY 0.33 0.50 10.40 10.40 64.84
FKKY Frankfort First Bancorp of KY -0.11 0.22 6.94 6.94 40.38
FTNB Fulton Bancorp of MO 0.41 0.58 14.47 14.47 57.86
GFSB GFS Bancorp of Grinnell IA 0.88 1.08 10.66 10.66 93.18
GUPB GFSB Bancorp of Gallup NM 0.69 0.87 16.88 16.88 103.59
GSLA GS Financial Corp. of LA 0.34 0.34 16.36 16.36 35.85
GOSB GSB Financial Corp. of NY 0.52 0.44 13.78 13.78 50.92
GWBC Gateway Bancorp of KY(8) 0.52 0.72 16.04 16.04 59.32
GBCI Glacier Bancorp of MT 1.10 1.23 8.12 7.90 83.33
GFCO Glenway Financial Corp. of OH 1.06 1.78 23.89 23.57 251.83
GTPS Great American Bancorp of IL 0.19 0.24 16.68 16.68 77.83
GTFN Great Financial Corp. of KY(8) 1.59 1.51 20.40 19.53 220.89
GSBC Great Southern Bancorp of MO 1.15 1.30 7.45 7.45 87.33
GDVS Greater DV SB,MHC of PA (19.9)* 0.23 0.42 8.64 8.64 74.69
GSFC Green Street Fin. Corp. of NC 0.56 0.68 14.73 14.73 40.62
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 0.37 0.56 8.80 8.80 63.86
HCBB HCB Bancshares of AR -0.08 0.29 13.73 13.16 75.24
HEMT HF Bancorp of Hemet CA -0.40 -2.74 12.87 10.53 156.71
HFFC HF Financial Corp. of SD 1.23 1.67 17.78 17.78 188.54
HFNC HFNC Financial Corp. of NC 0.43 0.59 9.37 9.37 52.08
HMNF HMN Financial, Inc. of MN 0.94 1.17 19.42 19.42 134.58
HALL Hallmark Capital Corp. of WI 1.33 1.68 20.56 20.56 284.01
HARB Harbor FSB, MHC of FL (46.6)(8) 2.05 2.64 18.85 18.23 224.69
HRBF Harbor Federal Bancorp of MD 0.58 0.90 16.48 16.48 127.80
HFSA Hardin Bancorp of Hardin MO 0.58 0.89 15.69 15.69 125.75
HARL Harleysville SA of PA 1.46 2.00 13.31 13.31 203.79
HFGI Harrington Fin. Group of IN 0.61 0.51 7.67 7.67 137.18
HARS Harris SB, MHC of PA (24.3) 0.79 0.99 14.59 12.76 182.15
HFFB Harrodsburg 1st Fin Bcrp of KY 0.55 0.73 14.49 14.49 53.80
HHFC Harvest Home Fin. Corp. of OH 0.23 0.50 11.35 11.35 90.82
HAVN Haven Bancorp of Woodhaven NY 2.09 3.11 24.20 24.12 407.02
HVFD Haverfield Corp. of OH(8) 1.02 1.94 15.52 15.52 181.61
HTHR Hawthorne Fin. Corp. of CA 0.64 1.38 13.07 13.07 284.38
HMLK Hemlock Fed. Fin. Corp. of IL 0.10 0.55 14.57 14.57 79.44
HBNK Highland Federal Bank of CA 0.96 1.41 16.39 16.39 219.30
HIFS Hingham Inst. for Sav. of MA* 1.86 1.86 15.62 15.62 166.99
HBEI Home Bancorp of Elgin IL 0.25 0.43 13.73 13.73 51.43
HBFW Home Bancorp of Fort Wayne IN 0.72 1.15 17.62 17.62 132.62
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization ----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- -------- ---------- ------- ------- ------- --- ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HBBI Home Building Bancorp of IN 23.00 312 7.2 23.00 17.00 20.50 12.20 N.A. 16.46
HCFC Home City Fin. Corp. of OH 15.50 952 14.8 16.25 12.00 15.50 0.00 N.A. 16.98
HOMF Home Fed Bancorp of Seymour IN 34.25 3,396 116.3 34.25 19.17 31.50 8.73 240.80 33.01
HWEN Home Financial Bancorp of IN 16.50 470 7.8 17.00 12.00 17.00 -2.94 N.A. 29.41
HPBC Home Port Bancorp, Inc. of MA* 23.75 1,842 43.7 23.75 15.50 22.75 4.40 196.88 43.94
HMCI Homecorp, Inc. of Rockford IL 17.00 1,693 28.8 17.75 11.83 17.00 0.00 70.00 33.33
HZFS Horizon Fin'l. Services of IA 19.37 426 8.3 19.75 14.50 18.87 2.65 N.A. 28.11
HRZB Horizon Financial Corp. of WA* 15.75 7,417 116.8 16.50 10.65 15.87 -0.76 37.92 34.16
IBSF IBS Financial Corp. of NJ 16.62 11,012 183.0 18.75 12.61 16.62 0.00 N.A. 22.30
ISBF ISB Financial Corp. of LA 25.62 6,901 176.8 26.25 15.25 25.37 0.99 N.A. 42.33
ITLA Imperial Thrift & Loan of CA* 18.75 7,836 146.9 18.87 13.19 18.00 4.17 N.A. 25.00
IFSB Independence FSB of DC 14.50 1,281 18.6 14.75 6.75 13.87 4.54 625.00 81.25
INCB Indiana Comm. Bank, SB of IN 17.00 922 15.7 19.00 14.25 15.75 7.94 N.A. 4.62
INBI Industrial Bancorp of OH 16.75 5,277 88.4 16.75 12.00 14.87 12.64 N.A. 31.37
IWBK Interwest SB of Oak Harbor WA 42.50 8,036 341.5 42.50 27.62 38.75 9.68 325.00 31.78
IPSW Ipswich SB of Ipswich MA* 14.00 2,376 33.3 14.12 4.87 14.12 -0.85 N.A. 133.33
JXVL Jacksonville Bancorp of TX 16.94 2,490 42.2 17.00 12.50 16.94 0.00 N.A. 15.87
JXSB Jcksnville SB,MHC of IL (45.6) 22.25 1,272 12.9 22.50 11.50 22.50 -1.11 N.A. 67.92
JSBA Jefferson Svgs Bancorp of MO 38.00 5,005 190.2 38.00 22.25 36.00 5.56 N.A. 46.15
JOAC Joachim Bancorp of MO 15.00 722 10.8 15.25 12.75 14.50 3.45 N.A. 3.45
KSAV KS Bancorp of Kenly NC 18.50 885 16.4 19.12 13.59 18.50 0.00 N.A. 24.08
KSBK KSB Bancorp of Kingfield ME(8)* 13.75 1,238 17.0 16.00 7.00 12.50 10.00 N.A. 79.27
KFBI Klamath First Bancorp of OR 20.50 10,019 205.4 20.87 13.94 19.87 3.17 N.A. 30.16
LSBI LSB Fin. Corp. of Lafayette IN 24.00 932 22.4 24.00 15.71 21.50 11.63 N.A. 29.24
LVSB Lakeview SB of Paterson NJ 37.25 2,302 85.7 37.75 20.68 36.00 3.47 N.A. 49.78
LARK Landmark Bancshares of KS 26.25 1,711 44.9 27.25 15.75 25.75 1.94 N.A. 45.83
LARL Laurel Capital Group of PA 24.75 1,443 35.7 24.87 15.00 24.50 1.02 93.36 50.00
LSBX Lawrence Savings Bank of MA* 12.87 4,274 55.0 12.87 6.75 12.69 1.42 274.13 58.30
LFED Leeds FSB, MHC of MD (36.3) 30.25 3,455 38.0 32.25 13.25 31.25 -3.20 N.A. 89.06
LXMO Lexington B&L Fin. Corp. of MO 16.00 1,138 18.2 16.62 10.50 15.75 1.59 N.A. 18.52
LIFB Life Bancorp of Norfolk VA 26.00 9,847 256.0 26.62 15.50 25.75 0.97 N.A. 44.44
LFBI Little Falls Bancorp of NJ 18.12 2,745 49.7 18.25 11.12 16.87 7.41 N.A. 42.12
LOGN Logansport Fin. Corp. of IN 15.87 1,260 20.0 16.00 11.12 15.75 0.76 N.A. 41.07
LONF London Financial Corp. of OH 15.12 515 7.8 17.50 10.87 15.00 0.80 N.A. 7.08
LISB Long Island Bancorp, Inc of NY 46.56 23,968 1,116.0 47.44 28.19 43.56 6.89 N.A. 33.03
MAFB MAF Bancorp of IL 34.25 15,393 527.2 34.75 17.17 31.75 7.87 302.94 47.82
MBLF MBLA Financial Corp. of MO 27.00 1,298 35.0 27.00 19.00 24.75 9.09 N.A. 42.11
MFBC MFB Corp. of Mishawaka IN 23.34 1,690 39.4 23.50 15.50 23.50 -0.68 N.A. 40.43
MLBC ML Bancorp of Villanova PA(8) 25.94 11,293 292.9 25.94 13.75 21.25 22.07 N.A. 83.71
MSBF MSB Financial Corp. of MI 16.50 1,249 20.6 18.00 9.12 15.50 6.45 N.A. 73.68
MGNL Magna Bancorp of MS(8) 28.62 13,754 393.6 29.00 16.75 27.37 4.57 472.40 63.54
MARN Marion Capital Holdings of IN 26.50 1,768 46.9 27.50 19.25 23.50 12.77 N.A. 37.66
MRKF Market Fin. Corp. of OH 14.62 1,336 19.5 14.75 12.25 14.62 0.00 N.A. N.A.
MFCX Marshalltown Fin. Corp. of IA(8) 16.75 1,411 23.6 16.87 14.25 16.87 -0.71 N.A. 12.64
MFSL Maryland Fed. Bancorp of MD 48.00 3,210 154.1 50.50 30.71 49.00 -2.04 357.14 38.13
MASB MassBank Corp. of Reading MA* 43.00 3,575 153.7 43.00 24.56 42.64 0.84 336.11 50.40
MFLR Mayflower Co-Op. Bank of MA* 19.25 890 17.1 20.00 14.75 20.00 -3.75 285.00 13.24
MECH Mechanics SB of Hartford CT* 24.75 5,290 130.9 24.75 13.62 24.50 1.02 N.A. 57.14
MDBK Medford Bank of Medford, MA* 35.50 4,541 161.2 35.81 23.00 34.00 4.41 407.14 37.86
MERI Meritrust FSB of Thibodaux LA 43.75 774 33.9 43.87 30.75 43.50 0.57 N.A. 38.36
MWBX MetroWest Bank of MA* 6.62 13,953 92.4 6.81 3.87 6.37 3.92 60.68 23.28
MCBS Mid Continent Bancshares of KS(8) 37.75 1,958 73.9 38.00 18.75 37.25 1.34 N.A. 61.53
MIFC Mid Iowa Financial Corp. of IA 9.87 1,676 16.5 10.00 6.00 9.62 2.60 97.40 54.95
MCBN Mid-Coast Bancorp of ME 27.00 233 6.3 27.00 18.00 25.00 8.00 372.85 42.11
MWBI Midwest Bancshares, Inc. of IA 36.75 348 12.8 39.00 25.00 36.50 0.68 267.50 38.68
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HBBI Home Building Bancorp of IN 0.29 0.74 18.51 18.51 144.44
HCFC Home City Fin. Corp. of OH 0.51 0.77 14.77 14.77 71.68
HOMF Home Fed Bancorp of Seymour IN 2.02 2.35 17.05 16.53 201.06
HWEN Home Financial Bancorp of IN 0.54 0.68 15.31 15.31 90.44
HPBC Home Port Bancorp, Inc. of MA* 1.72 1.71 11.39 11.39 107.90
HMCI Homecorp, Inc. of Rockford IL 0.27 0.85 12.81 12.81 195.87
HZFS Horizon Fin'l. Services of IA 0.65 1.04 19.75 19.75 201.81
HRZB Horizon Financial Corp. of WA* 1.07 1.05 10.91 10.91 69.93
IBSF IBS Financial Corp. of NJ 0.33 0.58 11.59 11.59 66.59
ISBF ISB Financial Corp. of LA 0.77 1.04 16.58 14.06 136.06
ITLA Imperial Thrift & Loan of CA* 1.45 1.45 11.92 11.87 108.50
IFSB Independence FSB of DC 0.29 0.66 13.38 11.73 205.12
INCB Indiana Comm. Bank, SB of IN 0.16 0.50 12.27 12.27 99.06
INBI Industrial Bancorp of OH 0.45 0.88 11.63 11.63 65.68
IWBK Interwest SB of Oak Harbor WA 1.82 2.47 15.46 15.12 228.05
IPSW Ipswich SB of Ipswich MA* 0.84 0.66 4.55 4.55 79.70
JXVL Jacksonville Bancorp of TX 0.90 1.18 13.55 13.55 90.84
JXSB Jcksnville SB,MHC of IL (45.6) 0.36 0.79 13.43 13.43 127.94
JSBA Jefferson Svgs Bancorp of MO 0.69 1.63 21.24 16.18 259.13
JOAC Joachim Bancorp of MO 0.23 0.38 13.63 13.63 48.39
KSAV KS Bancorp of Kenly NC 1.08 1.40 16.22 16.21 119.91
KSBK KSB Bancorp of Kingfield ME(8)* 1.04 1.08 8.10 7.62 113.08
KFBI Klamath First Bancorp of OR 0.55 0.83 14.20 14.20 72.65
LSBI LSB Fin. Corp. of Lafayette IN 1.51 1.33 18.44 18.44 208.28
LVSB Lakeview SB of Paterson NJ 2.78 1.93 19.91 15.92 209.23
LARK Landmark Bancshares of KS 1.13 1.33 18.38 18.38 133.31
LARL Laurel Capital Group of PA 1.61 2.03 14.73 14.73 146.91
LSBX Lawrence Savings Bank of MA* 1.40 1.38 7.45 7.45 85.71
LFED Leeds FSB, MHC of MD (36.3) 0.63 0.90 13.20 13.20 81.59
LXMO Lexington B&L Fin. Corp. of MO 0.55 0.71 14.74 14.74 52.05
LIFB Life Bancorp of Norfolk VA 1.01 1.23 15.94 15.49 151.14
LFBI Little Falls Bancorp of NJ 0.29 0.51 14.51 13.40 109.29
LOGN Logansport Fin. Corp. of IN 0.74 0.96 12.67 12.67 65.99
LONF London Financial Corp. of OH 0.48 0.73 14.60 14.60 74.25
LISB Long Island Bancorp, Inc of NY 1.44 1.67 22.17 21.95 246.53
MAFB MAF Bancorp of IL 1.51 2.10 16.57 14.39 210.25
MBLF MBLA Financial Corp. of MO 1.11 1.42 21.98 21.98 180.91
MFBC MFB Corp. of Mishawaka IN 0.77 1.16 20.05 20.05 146.89
MLBC ML Bancorp of Villanova PA(8) 1.27 1.15 12.80 12.58 183.41
MSBF MSB Financial Corp. of MI 0.65 0.80 10.16 10.16 59.81
MGNL Magna Bancorp of MS(8) 1.35 1.49 10.06 9.79 98.39
MARN Marion Capital Holdings of IN 1.38 1.65 22.10 22.10 98.02
MRKF Market Fin. Corp. of OH 0.32 0.32 14.82 14.82 42.35
MFCX Marshalltown Fin. Corp. of IA(8) 0.30 0.65 14.23 14.23 90.38
MFSL Maryland Fed. Bancorp of MD 2.17 3.14 30.22 29.84 360.57
MASB MassBank Corp. of Reading MA* 2.73 2.59 26.94 26.94 253.26
MFLR Mayflower Co-Op. Bank of MA* 1.39 1.31 13.67 13.44 141.20
MECH Mechanics SB of Hartford CT* 2.76 2.76 15.93 15.93 155.69
MDBK Medford Bank of Medford, MA* 2.45 2.29 21.24 19.79 236.19
MERI Meritrust FSB of Thibodaux LA 1.99 3.10 24.22 24.22 295.20
MWBX MetroWest Bank of MA* 0.52 0.52 3.02 3.02 40.60
MCBS Mid Continent Bancshares of KS(8) 1.87 2.12 19.59 19.59 208.68
MIFC Mid Iowa Financial Corp. of IA 0.71 1.00 7.00 7.00 74.91
MCBN Mid-Coast Bancorp of ME 1.06 1.66 22.06 22.06 256.39
MWBI Midwest Bancshares, Inc. of IA 1.81 3.01 29.09 29.09 421.10
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- -------- ---------- ------ ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MWFD Midwest Fed. Fin. Corp of WI 22.25 1,628 36.2 24.50 16.75 21.75 2.30 345.00 20.27
MFFC Milton Fed. Fin. Corp. of OH 14.00 2,310 32.3 16.00 12.75 14.37 -2.57 N.A. -3.45
MIVI Miss. View Hold. Co. of MN 16.25 819 13.3 16.25 11.75 15.87 2.39 N.A. 35.42
MBSP Mitchell Bancorp of NC* 17.37 931 16.2 17.37 12.12 17.25 0.70 N.A. 21.89
MBBC Monterey Bay Bancorp of CA 18.25 3,242 59.2 18.25 13.37 16.87 8.18 N.A. 23.73
MONT Montgomery Fin. Corp. of IN 12.25 1,653 20.2 14.00 11.00 11.87 3.20 N.A. -5.77
MSBK Mutual SB, FSB of Bay City MI 14.12 4,274 60.3 14.56 5.12 14.00 0.86 61.37 156.73
NHTB NH Thrift Bancshares of NH 19.50 2,048 39.9 19.75 10.75 19.37 0.67 322.08 54.52
NSLB NS&L Bancorp of Neosho MO 19.25 707 13.6 19.25 12.50 19.12 0.68 N.A. 41.34
NMSB Newmil Bancorp. of CT* 14.25 3,834 54.6 14.25 7.00 12.25 16.33 123.70 46.15
NASB North American SB of MO 52.00 2,229 115.9 55.00 30.75 52.00 0.00 ***.** 51.82
NBSI North Bancshares of Chicago IL 24.12 997 24.0 24.50 15.75 22.62 6.63 N.A. 46.18
FFFD North Central Bancshares of IA 17.62 3,258 57.4 17.62 12.37 17.00 3.65 N.A. 29.94
NBN Northeast Bancorp of ME* 19.50 1,275 24.9 19.50 12.75 17.62 10.67 65.96 39.29
NEIB Northeast Indiana Bncrp of IN 18.50 1,763 32.6 18.50 12.62 17.00 8.82 N.A. 35.83
NWEQ Northwest Equity Corp. of WI 16.75 839 14.1 16.75 10.50 16.00 4.69 N.A. 38.20
NWSB Northwest SB, MHC of PA (30.7) 25.37 23,376 182.1 26.25 11.75 25.25 0.48 N.A. 89.75
NSSY Norwalk Savings Society of CT* 36.37 2,410 87.7 37.00 22.50 36.00 1.03 N.A. 55.63
NSSB Norwich Financial Corp. of CT* 28.81 5,413 155.9 29.00 16.25 28.37 1.55 311.57 46.84
NTMG Nutmeg FS&LA of CT 10.37 738 7.7 11.00 7.00 10.25 1.17 N.A. 38.27
OHSL OHSL Financial Corp. of OH 25.00 1,196 29.9 25.25 19.50 24.75 1.01 N.A. 16.99
OCFC Ocean Fin. Corp. of NJ 34.62 8,606 297.9 35.75 22.87 34.06 1.64 N.A. 35.76
OCN Ocwen Financial Corp. of FL 42.69 26,800 1,144.1 44.75 20.25 43.31 -1.43 N.A. 59.59
OFCP Ottawa Financial Corp. of MI 25.50 4,911 125.2 25.50 14.54 25.00 2.00 N.A. 66.78
PFFB PFF Bancorp of Pomona CA 20.00 18,716 374.3 20.00 12.12 19.37 3.25 N.A. 34.50
PSFI PS Financial of Chicago IL 16.00 2,182 34.9 16.00 11.62 15.25 4.92 N.A. 36.17
PVFC PVF Capital Corp. of OH 19.75 2,556 50.5 21.75 13.18 20.50 -3.66 348.86 37.92
PCCI Pacific Crest Capital of CA* 17.00 2,938 49.9 17.00 8.13 15.75 7.94 N.A. 47.83
PAMM PacificAmerica Money Ctr of CA(8)* 23.75 3,799 90.2 26.00 10.62 22.75 4.40 N.A. 63.79
PALM Palfed, Inc. of Aiken SC(8) 21.25 5,284 112.3 21.50 13.00 21.50 -1.16 38.26 51.79
PBCI Pamrapo Bancorp, Inc. of NJ 23.37 2,843 66.4 23.87 18.50 23.75 -1.60 315.10 16.85
PFED Park Bancorp of Chicago IL 16.75 2,431 40.7 17.00 10.75 16.75 0.00 N.A. 28.85
PVSA Parkvale Financial Corp of PA 32.25 4,055 130.8 32.25 22.20 31.00 4.03 289.49 24.04
PEEK Peekskill Fin. Corp. of NY 17.00 3,193 54.3 17.00 13.25 16.50 3.03 N.A. 19.30
PFSB PennFed Fin. Services of NJ 30.50 4,822 147.1 30.75 18.00 30.75 -0.81 N.A. 50.62
PWBC PennFirst Bancorp of PA 17.00 5,306 90.2 17.00 12.27 15.87 7.12 113.03 37.21
PWBK Pennwood SB of PA* 17.25 580 10.0 17.25 10.75 16.25 6.15 N.A. 25.45
PBKB People's SB of Brockton MA* 17.56 3,595 63.1 17.56 10.12 17.00 3.29 195.62 65.35
PFDC Peoples Bancorp of Auburn IN 29.25 2,274 66.5 29.25 19.25 25.00 17.00 67.14 44.44
PBCT Peoples Bank, MHC of CT (40.1)* 31.62 61,053 773.2 31.87 15.92 31.25 1.18 301.78 64.26
PFFC Peoples Fin. Corp. of OH 19.00 1,491 28.3 19.00 11.50 17.00 11.76 N.A. 40.74
PHBK Peoples Heritage Fin Grp of ME* 43.00 27,371 1,177.0 43.00 22.50 39.75 8.18 180.86 53.57
PSFC Peoples Sidney Fin. Corp of OH 17.00 1,785 30.3 17.00 12.56 15.50 9.68 N.A. N.A.
PERM Permanent Bancorp of IN 23.50 2,011 47.3 26.50 16.25 23.00 2.17 N.A. 16.05
PMFI Perpetual Midwest Fin. of IA 22.37 1,883 42.1 22.37 18.12 21.50 4.05 N.A. 16.21
PERT Perpetual of SC, MHC (46.8)(8) 56.50 1,505 39.8 56.50 20.25 52.50 7.62 N.A. 132.99
PCBC Perry Co. Fin. Corp. of MO 20.87 828 17.3 22.25 17.00 20.87 0.00 N.A. 22.76
PHFC Pittsburgh Home Fin. of PA 19.25 1,969 37.9 19.50 11.50 18.62 3.38 N.A. 43.98
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 35.00 1,632 26.9 35.00 14.25 28.00 25.00 N.A. 100.00
PTRS Potters Financial Corp of OH 25.25 487 12.3 25.25 15.50 24.75 2.02 N.A. 26.25
PKPS Poughkeepsie Fin. Corp. of NY 7.87 12,595 99.1 8.13 4.87 7.87 0.00 1.55 49.90
PHSB Ppls Home SB, MHC of PA (45.0) 16.25 2,760 20.2 16.87 13.62 16.87 -3.68 N.A. N.A.
PRBC Prestige Bancorp of PA 17.62 915 16.1 17.62 11.75 17.00 3.65 N.A. 30.52
PETE Primary Bank of NH(8)* 26.37 2,089 55.1 26.87 11.67 26.50 -0.49 N.A. 73.03
PFNC Progress Financial Corp. of PA 14.31 3,814 54.6 15.12 5.95 13.75 4.07 29.97 79.32
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MWFD Midwest Fed. Fin. Corp of WI 1.79 1.37 11.21 10.81 127.18
MFFC Milton Fed. Fin. Corp. of OH 0.39 0.54 11.37 11.37 86.53
MIVI Miss. View Hold. Co. of MN 0.59 0.88 16.08 16.08 85.20
MBSP Mitchell Bancorp of NC* 0.51 0.60 15.39 15.39 35.49
MBBC Monterey Bay Bancorp of CA 0.29 0.55 14.43 13.30 127.33
MONT Montgomery Fin. Corp. of IN 0.26 0.42 11.22 11.22 62.63
MSBK Mutual SB, FSB of Bay City MI 0.18 0.07 9.57 9.57 157.56
NHTB NH Thrift Bancshares of NH 0.54 0.80 11.78 10.03 153.95
NSLB NS&L Bancorp of Neosho MO 0.41 0.64 16.52 16.52 84.46
NMSB Newmil Bancorp. of CT* 0.68 0.65 8.27 8.27 84.26
NASB North American SB of MO 4.10 3.86 25.37 24.52 330.46
NBSI North Bancshares of Chicago IL 0.58 0.81 16.95 16.95 119.95
FFFD North Central Bancshares of IA 1.02 1.18 14.81 14.81 65.34
NBN Northeast Bancorp of ME* 0.93 0.86 13.49 11.66 194.14
NEIB Northeast Indiana Bncrp of IN 0.98 1.15 15.19 15.19 100.01
NWEQ Northwest Equity Corp. of WI 0.88 1.11 13.22 13.22 115.48
NWSB Northwest SB, MHC of PA (30.7) 0.58 0.82 8.49 8.00 89.47
NSSY Norwalk Savings Society of CT* 2.42 2.76 20.64 19.90 256.17
NSSB Norwich Financial Corp. of CT* 1.42 1.35 14.70 13.27 131.66
NTMG Nutmeg FS&LA of CT 0.33 0.45 7.72 7.72 138.80
OHSL OHSL Financial Corp. of OH 1.12 1.57 21.21 21.21 192.34
OCFC Ocean Fin. Corp. of NJ 0.04 1.49 27.35 27.35 168.27
OCN Ocwen Financial Corp. of FL 2.65 1.60 9.10 8.69 103.99
OFCP Ottawa Financial Corp. of MI 0.82 1.32 15.31 12.29 175.39
PFFB PFF Bancorp of Pomona CA 0.21 0.61 14.51 14.36 140.60
PSFI PS Financial of Chicago IL 0.70 0.71 14.66 14.66 37.88
PVFC PVF Capital Corp. of OH 1.40 1.80 9.79 9.79 139.38
PCCI Pacific Crest Capital of CA* 1.11 1.04 8.95 8.95 126.32
PAMM PacificAmerica Money Ctr of CA(8)* 1.82 1.82 6.63 6.63 29.57
PALM Palfed, Inc. of Aiken SC(8) 0.13 0.76 10.37 10.37 125.83
PBCI Pamrapo Bancorp, Inc. of NJ 1.16 1.60 16.62 16.49 130.49
PFED Park Bancorp of Chicago IL 0.62 0.86 16.27 16.27 72.22
PVSA Parkvale Financial Corp of PA 1.72 2.54 18.54 18.40 244.45
PEEK Peekskill Fin. Corp. of NY 0.57 0.75 14.71 14.71 57.18
PFSB PennFed Fin. Services of NJ 1.43 2.09 20.17 16.87 274.11
PWBC PennFirst Bancorp of PA 0.63 0.91 12.44 11.63 153.97
PWBK Pennwood SB of PA* 0.57 0.92 15.04 15.04 86.17
PBKB People's SB of Brockton MA* 1.16 0.69 8.56 8.20 152.65
PFDC Peoples Bancorp of Auburn IN 1.39 1.82 19.23 19.23 126.46
PBCT Peoples Bank, MHC of CT (40.1)* 1.39 1.03 10.93 10.92 128.90
PFFC Peoples Fin. Corp. of OH 0.53 0.53 15.78 15.78 58.01
PHBK Peoples Heritage Fin Grp of ME* 2.36 2.39 15.77 13.29 204.27
PSFC Peoples Sidney Fin. Corp of OH 0.56 0.73 14.09 14.09 60.57
PERM Permanent Bancorp of IN 0.72 1.30 19.74 19.45 215.43
PMFI Perpetual Midwest Fin. of IA 0.25 0.61 18.00 18.00 210.96
PERT Perpetual of SC, MHC (46.8)(8) 1.00 1.41 20.13 20.13 170.24
PCBC Perry Co. Fin. Corp. of MO 0.90 1.04 18.80 18.80 97.95
PHFC Pittsburgh Home Fin. of PA 0.69 0.88 14.21 14.06 130.15
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 1.39 1.93 14.76 14.76 232.05
PTRS Potters Financial Corp of OH 1.16 2.06 21.97 21.97 248.85
PKPS Poughkeepsie Fin. Corp. of NY 0.24 0.37 5.85 5.85 69.88
PHSB Ppls Home SB, MHC of PA (45.0) 0.32 0.67 14.36 14.36 82.97
PRBC Prestige Bancorp of PA 0.47 0.83 16.51 16.51 148.33
PETE Primary Bank of NH(8)* 1.24 1.47 14.33 14.31 206.65
PFNC Progress Financial Corp. of PA 0.54 0.65 5.78 5.10 109.77
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- -------- ---------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PSBK Progressive Bank, Inc. of NY* 32.75 3,821 125.1 34.00 20.33 33.12 -1.12 144.95 43.96
PROV Provident Fin. Holdings of CA 19.75 4,920 97.2 20.12 12.00 19.87 -0.60 N.A. 41.07
PULB Pulaski SB, MHC of MO (29.8) 27.25 2,094 17.0 27.50 12.75 25.62 6.36 N.A. 87.93
PLSK Pulaski SB, MHC of NJ (46.0) 16.75 2,070 15.9 17.50 11.50 16.25 3.08 N.A. N.A.
PULS Pulse Bancorp of S. River NJ 23.00 3,071 70.6 24.00 15.50 21.37 7.63 85.93 46.03
QCFB QCF Bancorp of Virginia MN 25.00 1,426 35.7 26.25 15.00 25.00 0.00 N.A. 36.99
QCBC Quaker City Bancorp of CA 22.37 4,703 105.2 22.37 11.60 21.94 1.96 198.27 47.17
QCSB Queens County Bancorp of NY* 52.37 10,181 533.2 54.25 24.58 53.13 -1.43 N.A. 65.83
RCSB RCSB Financial, Inc. of NY(8)* 53.13 14,591 775.2 53.37 26.62 51.00 4.18 331.60 83.21
RARB Raritan Bancorp. of Raritan NJ* 22.25 2,412 53.7 25.50 14.17 22.25 0.00 245.50 43.55
REDF RedFed Bancorp of Redlands CA 17.50 7,174 125.5 17.50 10.81 16.37 6.90 N.A. 29.63
RELY Reliance Bancorp, Inc. of NY 32.12 8,776 281.9 32.37 17.50 31.87 0.78 N.A. 64.72
RELI Reliance Bancshares Inc of WI(8)* 8.50 2,528 21.5 10.12 6.50 8.50 0.00 N.A. 25.93
RIVR River Valley Bancorp of IN 16.75 1,190 19.9 17.25 13.25 16.50 1.52 N.A. 21.82
RSLN Roslyn Bancorp, Inc. of NY* 22.50 43,642 981.9 24.31 15.00 22.25 1.12 N.A. N.A.
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 29.62 2,419 27.1 29.75 13.64 29.25 1.26 N.A. 86.17
SCCB S. Carolina Comm. Bnshrs of SC 22.25 704 15.7 25.25 15.00 23.00 -3.26 N.A. 48.33
SBFL SB Fngr Lakes MHC of NY (33.1) 24.25 1,785 14.3 25.50 12.75 24.25 0.00 N.A. 76.36
SFED SFS Bancorp of Schenectady NY 22.00 1,236 27.2 22.50 12.75 21.50 2.33 N.A. 49.15
SGVB SGV Bancorp of W. Covina CA 17.00 2,342 39.8 17.87 9.38 17.87 -4.87 N.A. 51.11
SISB SIS Bancorp Inc of MA* 33.87 5,577 188.9 33.87 22.12 33.00 2.64 N.A. 48.10
SWCB Sandwich Co-Op. Bank of MA* 38.25 1,915 73.2 39.00 21.75 39.00 -1.92 343.74 28.57
SECP Security Capital Corp. of WI(8) 112.25 9,208 1,033.6 112.25 63.25 107.75 4.18 N.A. 52.20
SFSL Security First Corp. of OH 18.25 7,574 138.2 19.25 9.00 17.75 2.82 75.48 51.08
SFNB Security First Netwrk Bk of GA(8) 11.75 8,620 101.3 25.25 5.50 12.00 -2.08 N.A. 14.63
SMFC Sho-Me Fin. Corp. of MO(8) 41.37 1,499 62.0 42.87 18.87 40.25 2.78 N.A. 90.21
SOBI Sobieski Bancorp of S. Bend IN 16.50 775 12.8 17.00 12.25 17.00 -2.94 N.A. 13.79
SOSA Somerset Savings Bank of MA(8)* 4.00 16,652 66.6 4.03 1.94 3.97 0.76 -21.88 103.05
SSFC South Street Fin. Corp. of NC* 18.87 4,496 84.8 19.50 12.12 18.87 0.00 N.A. 34.79
SCBS Southern Commun. Bncshrs of AL 16.37 1,137 18.6 16.37 13.00 16.25 0.74 N.A. 23.55
SMBC Southern Missouri Bncrp of MO 17.87 1,638 29.3 18.00 14.00 17.87 0.00 N.A. 19.13
SWBI Southwest Bancshares of IL 20.50 2,652 54.4 21.75 17.92 21.06 -2.66 105.00 12.33
SVRN Sovereign Bancorp of PA 16.00 70,010 1,120.2 16.50 8.96 16.19 -1.17 257.94 46.25
STFR St. Francis Cap. Corp. of WI 37.50 5,308 199.1 38.75 25.00 37.25 0.67 N.A. 44.23
SPBC St. Paul Bancorp, Inc. of IL 24.50 33,988 832.7 24.62 13.53 23.87 2.64 120.13 56.35
SFFC StateFed Financial Corp. of IA 22.12 784 17.3 22.75 16.25 22.00 0.55 N.A. 34.06
SFIN Statewide Fin. Corp. of NJ 20.62 4,710 97.1 20.62 12.50 20.12 2.49 N.A. 43.49
STSA Sterling Financial Corp. of WA 19.37 5,567 107.8 20.37 13.00 19.62 -1.27 113.09 37.18
SFSB SuburbFed Fin. Corp. of IL 28.50 1,262 36.0 28.50 16.25 27.50 3.64 327.29 50.00
ROSE T R Financial Corp. of NY* 30.00 17,519 525.6 30.00 14.31 27.12 10.62 N.A. 69.01
THRD TF Financial Corp. of PA 21.37 4,083 87.3 21.37 14.62 20.25 5.53 N.A. 31.51
TPNZ Tappan Zee Fin., Inc. of NY 18.00 1,497 26.9 18.00 12.37 17.37 3.63 N.A. 32.16
ESBK The Elmira SB FSB of Elmira NY* 28.75 706 20.3 28.75 14.75 25.50 12.75 100.07 57.53
GRTR The Greater New York SB of NY(8)* 23.19 13,717 318.1 23.50 12.00 22.75 1.93 149.09 70.26
TSBS Trenton SB,FSB MHC of NJ(35.9)(8) 29.87 9,037 97.0 30.25 14.00 30.00 -0.43 N.A. 86.69
TRIC Tri-County Bancorp of WY 22.75 609 13.9 24.25 18.00 23.50 -3.19 N.A. 26.39
TWIN Twin City Bancorp of TN 13.62 853 11.6 13.87 11.17 13.75 -0.95 N.A. 18.43
UFRM United FS&LA of Rocky Mount NC 12.25 3,074 37.7 12.50 7.25 11.75 4.26 276.92 44.12
UBMT United Fin. Corp. of MT 23.75 1,223 29.0 24.25 18.00 24.12 -1.53 126.19 23.38
VABF Va. Beach Fed. Fin. Corp of VA 15.50 4,976 77.1 16.25 8.13 16.00 -3.13 230.49 64.19
VFFC Virginia First Savings of VA(8) 23.87 5,805 138.6 24.50 12.37 23.94 -0.29 ***.** 87.22
WHGB WHG Bancshares of MD 15.63 1,462 22.9 15.87 12.12 15.75 -0.76 N.A. 19.13
WSFS WSFS Financial Corp. of DE* 16.37 12,421 203.3 16.37 8.13 15.00 9.13 125.79 60.65
WVFC WVS Financial Corp. of PA* 28.25 1,747 49.4 28.25 21.50 27.50 2.73 N.A. 14.74
WRNB Warren Bancorp of Peabody MA* 18.75 3,781 70.9 19.37 12.75 18.37 2.07 456.38 25.00
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PSBK Progressive Bank, Inc. of NY* 2.30 2.26 19.67 17.57 230.00
PROV Provident Fin. Holdings of CA 0.39 0.34 17.37 17.37 125.10
PULB Pulaski SB, MHC of MO (29.8) 0.59 0.82 11.04 11.04 84.92
PLSK Pulaski SB, MHC of NJ (46.0) 0.21 0.51 10.20 10.20 85.68
PULS Pulse Bancorp of S. River NJ 1.20 1.80 13.63 13.63 169.39
QCFB QCF Bancorp of Virginia MN 1.41 1.41 18.98 18.98 104.93
QCBC Quaker City Bancorp of CA 0.60 0.98 14.94 14.93 170.40
QCSB Queens County Bancorp of NY* 2.15 2.18 17.08 17.08 144.08
RCSB RCSB Financial, Inc. of NY(8)* 2.64 2.61 21.69 21.14 276.36
RARB Raritan Bancorp. of Raritan NJ* 1.46 1.55 12.48 12.27 157.31
REDF RedFed Bancorp of Redlands CA 0.31 0.80 10.75 10.71 127.16
RELY Reliance Bancorp, Inc. of NY 1.25 1.85 18.54 13.36 225.25
RELI Reliance Bancshares Inc of WI(8)* 0.16 0.17 9.08 9.08 18.60
RIVR River Valley Bancorp of IN 0.46 0.62 14.63 14.41 118.02
RSLN Roslyn Bancorp, Inc. of NY* 0.59 0.93 14.58 14.51 72.39
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 0.88 1.10 10.67 9.74 94.94
SCCB S. Carolina Comm. Bnshrs of SC 0.52 0.70 17.11 17.11 65.93
SBFL SB Fngr Lakes MHC of NY (33.1) 0.15 0.51 11.63 11.63 121.40
SFED SFS Bancorp of Schenectady NY 0.60 1.07 17.44 17.44 139.85
SGVB SGV Bancorp of W. Covina CA 0.31 0.75 12.77 12.56 174.78
SISB SIS Bancorp Inc of MA* 3.31 3.29 18.52 18.52 257.23
SWCB Sandwich Co-Op. Bank of MA* 2.34 2.39 20.83 19.94 262.09
SECP Security Capital Corp. of WI(8) 4.88 5.82 64.62 64.62 398.94
SFSL Security First Corp. of OH 0.88 1.10 8.13 7.99 86.25
SFNB Security First Netwrk Bk of GA(8) -3.30 -3.38 3.02 2.97 9.12
SMFC Sho-Me Fin. Corp. of MO(8) 2.08 2.35 19.81 19.81 219.35
SOBI Sobieski Bancorp of S. Bend IN 0.32 0.61 15.95 15.95 105.49
SOSA Somerset Savings Bank of MA(8)* 0.25 0.24 1.96 1.96 30.90
SSFC South Street Fin. Corp. of NC* 0.45 0.57 13.58 13.58 53.77
SCBS Southern Commun. Bncshrs of AL 0.19 0.47 13.54 13.54 61.66
SMBC Southern Missouri Bncrp of MO 0.70 0.69 15.85 15.85 101.15
SWBI Southwest Bancshares of IL 1.05 1.44 15.69 15.69 142.66
SVRN Sovereign Bancorp of PA 0.62 0.96 6.25 4.71 155.67
STFR St. Francis Cap. Corp. of WI 1.77 1.95 24.43 21.59 310.01
SPBC St. Paul Bancorp, Inc. of IL 0.93 1.34 11.67 11.64 135.68
SFFC StateFed Financial Corp. of IA 1.17 1.42 19.43 19.43 109.28
SFIN Statewide Fin. Corp. of NJ 0.76 1.29 13.90 13.88 142.93
STSA Sterling Financial Corp. of WA 0.28 0.90 12.41 10.82 302.93
SFSB SuburbFed Fin. Corp. of IL 1.23 1.79 21.92 21.84 338.12
ROSE T R Financial Corp. of NY* 1.84 1.66 12.58 12.58 202.74
THRD TF Financial Corp. of PA 0.84 1.13 17.44 15.30 156.93
TPNZ Tappan Zee Fin., Inc. of NY 0.53 0.49 14.35 14.35 80.07
ESBK The Elmira SB FSB of Elmira NY* 1.13 1.10 20.32 19.48 322.70
GRTR The Greater New York SB of NY(8)* 1.38 0.74 11.75 11.75 187.40
TSBS Trenton SB,FSB MHC of NJ(35.9)(8) 0.86 0.73 11.79 10.81 69.82
TRIC Tri-County Bancorp of WY 1.10 1.40 22.50 22.50 146.89
TWIN Twin City Bancorp of TN 0.66 0.93 16.18 16.18 125.84
UFRM United FS&LA of Rocky Mount NC 0.19 0.33 6.70 6.70 89.63
UBMT United Fin. Corp. of MT 0.94 1.16 19.95 19.95 88.08
VABF Va. Beach Fed. Fin. Corp of VA 0.26 0.58 8.50 8.50 124.16
VFFC Virginia First Savings of VA(8) 1.81 1.66 11.35 10.96 140.79
WHGB WHG Bancshares of MD 0.34 0.57 14.16 14.16 68.56
WSFS WSFS Financial Corp. of DE* 1.47 1.48 6.32 6.27 121.45
WVFC WVS Financial Corp. of PA* 1.69 2.11 18.83 18.83 168.69
WRNB Warren Bancorp of Peabody MA* 2.01 1.71 9.82 9.82 94.69
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
----------------------- 52 Week (1) % Change From
Shares Market -------------- --------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- -------- ---------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
WFSL Washington FS&LA of Seattle WA 28.62 47,462 1,358.4 29.25 20.00 28.00 2.21 96.16 18.80
WAMU Washington Mutual Inc. of WA(8)* 69.00 126,357 8,718.6 69.50 35.12 64.00 7.81 271.77 59.32
WYNE Wayne Bancorp of NJ 24.75 2,120 52.5 24.87 13.62 24.50 1.02 N.A. 62.30
WAYN Wayne S&L Co. MHC of OH (47.8) 23.31 2,248 25.1 24.25 12.67 24.00 -2.88 N.A. 42.74
WCFB Wbstr Cty FSB MHC of IA (45.2) 18.00 2,100 17.1 18.50 12.75 18.50 -2.70 N.A. 30.91
WBST Webster Financial Corp. of CT 58.25 11,985 698.1 59.06 33.62 57.75 0.87 517.06 58.50
WEFC Wells Fin. Corp. of Wells MN 17.00 1,959 33.3 17.00 12.50 16.00 6.25 N.A. 29.57
WCBI WestCo Bancorp of IL 26.62 2,476 65.9 26.97 20.00 26.97 -1.30 166.20 23.81
WSTR WesterFed Fin. Corp. of MT 26.37 5,565 146.7 26.37 15.25 23.25 13.42 N.A. 44.49
WOFC Western Ohio Fin. Corp. of OH 26.19 2,339 61.3 26.62 19.62 24.50 6.90 N.A. 20.41
WWFC Westwood Fin. Corp. of NJ(8) 27.44 645 17.7 27.50 12.50 27.16 1.03 N.A. 66.30
WEHO Westwood Hmstd Fin Corp of OH 15.12 2,795 42.3 16.00 10.37 15.25 -0.85 N.A. 24.75
WFI Winton Financial Corp. of OH 16.12 1,986 32.0 16.75 11.25 15.75 2.35 N.A. 40.17
FFWD Wood Bancorp of OH 17.00 2,119 36.0 18.00 10.08 17.00 0.00 N.A. 50.04
YFCB Yonkers Fin. Corp. of NY 19.25 3,036 58.4 19.87 12.00 19.25 0.00 N.A. 49.57
YFED York Financial Corp. of PA 24.37 7,008 170.8 26.75 16.00 24.37 0.00 157.88 49.97
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
WFSL Washington FS&LA of Seattle WA 1.94 2.14 14.66 13.39 121.37
WAMU Washington Mutual Inc. of WA(8)* 1.14 2.42 19.30 18.32 385.92
WYNE Wayne Bancorp of NJ 0.50 0.50 16.44 16.44 123.13
WAYN Wayne S&L Co. MHC of OH (47.8) 0.35 0.74 10.46 10.46 113.09
WCFB Wbstr Cty FSB MHC of IA (45.2) 0.48 0.64 10.53 10.53 45.09
WBST Webster Financial Corp. of CT 1.60 2.86 24.91 21.28 495.93
WEFC Wells Fin. Corp. of Wells MN 0.73 1.08 14.64 14.64 103.13
WCBI WestCo Bancorp of IL 1.41 1.78 19.18 19.18 125.85
WSTR WesterFed Fin. Corp. of MT 0.81 1.02 18.73 14.99 171.72
WOFC Western Ohio Fin. Corp. of OH 0.52 0.72 23.38 21.79 169.51
WWFC Westwood Fin. Corp. of NJ(8) 0.78 1.34 15.76 14.04 172.70
WEHO Westwood Hmstd Fin Corp of OH 0.30 0.45 14.17 14.17 48.18
WFI Winton Financial Corp. of OH 1.60 1.34 11.36 11.12 159.81
FFWD Wood Bancorp of OH 0.79 0.94 9.52 9.52 77.36
YFCB Yonkers Fin. Corp. of NY 0.76 1.02 14.14 14.14 94.89
YFED York Financial Corp. of PA 1.01 1.29 14.28 14.28 165.87
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ --------------------- --------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------ ------ ------ ------ ------ ------ ------
(%) (%) (%) (%) (%) (%) (%)
Market Averages. SAIF-Insured Thrifts(no MHCs)
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(303) 12.96 12.71 0.64 5.51 3.40 0.85 7.51
NYSE Traded Companies(9) 5.88 5.64 0.61 10.41 4.29 0.80 14.37
AMEX Traded Companies(17) 16.10 16.00 0.55 2.86 2.39 0.87 5.19
NASDAQ Listed OTC Companies(277) 13.01 12.76 0.64 5.51 3.43 0.85 7.41
California Companies(21) 7.44 7.18 0.30 4.48 2.30 0.43 6.99
Florida Companies(6) 7.63 7.18 0.92 11.46 3.77 0.74 9.13
Mid-Atlantic Companies(59) 11.04 10.70 0.62 6.35 3.74 0.86 8.89
Mid-West Companies(146) 14.08 13.89 0.68 5.37 3.57 0.90 7.12
New England Companies(9) 7.87 7.46 0.36 4.81 3.24 0.63 8.58
North-West Companies(7) 15.91 15.62 0.83 6.61 3.39 1.04 8.85
South-East Companies(42) 16.10 15.91 0.69 4.82 2.90 0.94 6.59
South-West Companies(7) 10.80 10.54 0.38 2.90 2.27 0.66 6.39
Western Companies (Excl CA)(6) 16.23 15.79 0.98 6.66 4.38 1.16 7.72
Thrift Strategy(239) 14.19 13.97 0.66 5.04 3.38 0.89 7.00
Mortgage Banker Strategy(37) 7.36 6.90 0.48 7.02 3.46 0.64 9.48
Real Estate Strategy(11) 7.33 7.14 0.55 7.01 3.83 0.76 10.31
Diversified Strategy(12) 7.66 7.42 1.06 13.44 4.63 1.08 14.25
Retail Banking Strategy(4) 8.40 8.19 0.11 2.23 0.75 0.03 1.72
Companies Issuing Dividends(256) 13.29 13.03 0.68 5.89 3.67 0.91 7.89
Companies Without Dividends(47) 10.99 10.84 0.38 3.29 1.80 0.52 5.28
Equity/Assets (less than) 6%(23) 4.94 4.65 0.38 7.53 3.38 0.56 11.40
Equity/Assets 6-12%(144) 8.62 8.27 0.57 6.66 3.63 0.75 8.85
Equity/Assets (greater than) 12%(136) 18.53 18.39 0.75 4.06 3.18 1.00 5.55
Converted Last 3 Mths (no MHC)(6) 19.86 19.82 0.55 2.47 2.07 0.62 2.93
Actively Traded Companies(41) 8.66 8.42 0.72 8.67 4.26 0.95 11.96
Market Value Below $20 Million(58) 15.44 15.38 0.54 3.39 2.81 0.80 5.44
Holding Company Structure(268) 13.45 13.22 0.63 5.28 3.34 0.86 7.27
Assets Over $1 Billion(61) 7.82 7.30 0.62 8.11 3.79 0.81 10.96
Assets $500 Million-$1 Billion(49) 10.28 9.99 0.63 6.46 3.60 0.79 8.02
Assets $250-$500 Million(68) 11.11 10.79 0.58 5.33 3.46 0.81 7.50
Assets less than $250 Million(125) 17.29 17.23 0.68 4.06 3.13 0.92 5.74
Goodwill Companies(123) 9.04 8.43 0.62 7.08 3.82 0.79 9.14
Non-Goodwill Companies(179) 15.59 15.59 0.65 4.46 3.12 0.90 6.42
Acquirors of FSLIC Cases(10) 7.19 6.79 0.57 7.79 3.88 0.82 11.71
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- ------- ------ ------ ------- ------ ------ ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
Market Averages. SAIF-Insured Thrifts(no MHCs)
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(303) 0.80 129.28 0.82 21.97 144.85 17.73 149.30 19.02
NYSE Traded Companies(9) 1.25 74.44 1.28 22.36 200.52 12.55 197.88 15.94
AMEX Traded Companies(17) 0.65 149.37 0.72 23.91 126.10 20.53 127.28 19.69
NASDAQ Listed OTC Companies(277) 0.79 130.27 0.81 21.83 144.28 17.74 149.35 19.11
California Companies(21) 1.88 70.98 1.33 24.12 159.71 11.25 159.10 17.76
Florida Companies(6) 1.52 73.71 0.80 19.87 166.71 17.57 188.38 23.27
Mid-Atlantic Companies(59) 0.87 95.41 0.93 21.83 148.30 15.75 153.33 18.23
Mid-West Companies(146) 0.62 155.12 0.70 21.53 138.61 18.43 141.99 18.95
New England Companies(9) 0.63 116.41 1.00 24.48 162.53 12.58 176.36 19.75
North-West Companies(7) 0.70 128.29 0.61 19.05 168.56 23.40 176.50 19.20
South-East Companies(42) 0.87 130.25 0.85 23.18 148.70 22.53 153.51 20.64
South-West Companies(7) 0.65 95.50 0.71 22.23 126.71 12.83 134.77 18.54
Western Companies (Excl CA)(6) 0.29 169.72 0.72 22.13 140.22 20.95 147.47 20.21
Thrift Strategy(239) 0.71 135.15 0.74 22.12 136.55 18.64 140.74 19.08
Mortgage Banker Strategy(37) 1.00 101.28 1.02 22.28 181.96 12.88 190.65 19.64
Real Estate Strategy(11) 1.42 97.09 1.35 18.65 171.01 12.39 174.05 16.93
Diversified Strategy(12) 1.31 120.54 1.12 21.05 222.60 19.64 230.30 18.10
Retail Banking Strategy(4) 1.85 101.37 1.82 19.09 135.50 11.09 139.79 18.23
Companies Issuing Dividends(256) 0.69 133.19 0.78 22.00 146.01 18.15 150.59 18.91
Companies Without Dividends(47) 1.47 105.24 1.07 21.53 137.77 15.27 141.41 19.94
Equity/Assets (less than) 6%(23) 1.41 83.13 1.03 22.10 185.27 10.00 189.56 18.38
Equity/Assets 6-12%(144) 0.91 124.60 0.93 21.33 158.07 13.67 166.18 17.52
Equity/Assets (greater than) 12%(136) 0.57 143.15 0.67 22.86 126.01 22.99 127.57 20.86
Converted Last 3 Mths (no MHC)(6) 1.56 30.20 0.73 0.00 120.37 23.93 120.65 29.17
Actively Traded Companies(41) 1.15 105.56 0.96 21.62 185.41 15.27 188.09 17.22
Market Value Below $20 Million(58) 0.78 107.65 0.68 22.78 112.72 17.28 113.41 20.01
Holding Company Structure(268) 0.80 125.34 0.81 22.42 142.55 18.16 146.28 19.24
Assets Over $1 Billion(61) 0.98 94.93 0.98 21.88 184.79 14.71 197.41 18.28
Assets $500 Million-$1 Billion(49) 0.95 170.56 1.06 21.72 158.77 16.20 163.99 18.84
Assets $250-$500 Million(68) 0.73 136.59 0.74 21.74 145.37 15.85 151.24 18.11
Assets less than $250 Million(125) 0.69 126.11 0.69 22.29 122.06 20.68 122.74 20.00
Goodwill Companies(123) 0.85 113.89 0.89 21.48 163.43 14.38 174.85 18.11
Non-Goodwill Companies(179) 0.76 140.62 0.77 22.40 132.25 19.98 132.25 19.72
Acquirors of FSLIC Cases(10) 1.53 51.85 0.89 22.57 185.39 12.87 185.14 17.55
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- ------
($) (%) (%)
Market Averages. SAIF-Insured Thrifts(no MHCs)
----------------------------------------------
<S> <C> <C> <C>
SAIF-Insured Thrifts(303) 0.37 1.65 35.60
NYSE Traded Companies(9) 0.32 0.87 18.69
AMEX Traded Companies(17) 0.40 2.03 45.59
NASDAQ Listed OTC Companies(277) 0.37 1.65 35.87
California Companies(21) 0.15 0.49 12.75
Florida Companies(6) 0.24 0.84 14.64
Mid-Atlantic Companies(59) 0.39 1.59 36.76
Mid-West Companies(146) 0.36 1.74 36.15
New England Companies(9) 0.46 1.45 34.62
North-West Companies(7) 0.36 1.31 27.43
South-East Companies(42) 0.44 2.05 45.11
South-West Companies(7) 0.35 1.63 52.02
Western Companies (Excl CA)(6) 0.56 2.73 56.15
Thrift Strategy(239) 0.38 1.77 38.35
Mortgage Banker Strategy(37) 0.32 1.08 27.04
Real Estate Strategy(11) 0.13 0.72 12.64
Diversified Strategy(12) 0.46 1.41 30.22
Retail Banking Strategy(4) 0.20 1.15 18.18
Companies Issuing Dividends(256) 0.43 1.92 41.90
Companies Without Dividends(47) 0.00 0.00 0.00
Equity/Assets (less than) 6%(23) 0.22 0.79 15.22
Equity/Assets 6-12%(144) 0.38 1.50 33.56
Equity/Assets (greater than) 12%(136) 0.38 1.93 42.47
Converted Last 3 Mths (no MHC)(6) 0.13 0.51 11.43
Actively Traded Companies(41) 0.49 1.63 32.03
Market Value Below $20 Million(58) 0.33 1.93 44.45
Holding Company Structure(268) 0.37 1.69 37.03
Assets Over $1 Billion(61) 0.43 1.24 29.50
Assets $500 Million-$1 Billion(49) 0.34 1.51 36.39
Assets $250-$500 Million(68) 0.37 1.70 33.10
Assets less than $250 Million(125) 0.34 1.85 40.42
Goodwill Companies(123) 0.40 1.50 32.93
Non-Goodwill Companies(179) 0.34 1.74 37.75
Acquirors of FSLIC Cases(10) 0.38 1.30 23.87
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data
and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common
equity and assets balances; ROI (return on investment) is current EPS
divided by current price.
(6) Annualized, based on last regular quarterly cash dividend
announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities
or unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have
been adjusted for stock splits, stock dividends, and secondary
offerings.
Source: Corporate reports and offering circulars for publicly traded
companies, and RP Financial, Inc. calculations. The information
provided in this report has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------ ------- ------- ------ ------ ------- ------
(%) (%) (%) (%) (%) (%) (%)
Market Averages. BIF-Insured Thrifts(no MHCs)
---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BIF-Insured Thrifts(66) 11.70 11.33 1.11 11.04 6.33 1.12 10.88
NYSE Traded Companies(3) 7.58 6.00 0.77 10.55 5.30 0.78 10.86
AMEX Traded Companies(6) 11.89 11.10 0.74 7.96 4.45 0.74 8.04
NASDAQ Listed OTC Companies(57) 11.94 11.69 1.18 11.46 6.62 1.19 11.24
California Companies(4) 8.41 8.40 1.07 12.37 6.64 1.01 11.55
Mid-Atlantic Companies(17) 11.42 10.75 0.83 8.45 4.40 0.91 9.04
Mid-West Companies(2) 25.06 23.63 0.43 1.59 1.68 0.66 2.42
New England Companies(34) 8.99 8.69 1.27 13.76 7.94 1.22 13.17
North-West Companies(4) 12.39 12.00 1.21 10.53 5.99 1.18 10.22
South-East Companies(5) 27.76 27.76 1.14 4.44 3.34 1.23 4.77
Thrift Strategy(44) 12.92 12.50 1.12 9.95 6.17 1.12 9.74
Mortgage Banker Strategy(9) 8.83 8.62 0.86 11.23 5.69 0.95 11.87
Real Estate Strategy(6) 8.88 8.87 1.37 15.11 7.77 1.29 14.24
Diversified Strategy(7) 6.77 6.23 1.23 17.80 7.68 1.21 17.45
Companies Issuing Dividends(54) 11.91 11.50 1.03 10.52 5.54 1.04 10.37
Companies Without Dividends(12) 10.46 10.27 1.60 14.68 11.17 1.59 14.42
Equity/Assets (less than) 6%(5) 5.45 5.32 0.97 17.27 6.64 0.87 15.46
Equity/Assets 6-12%(45) 8.62 8.15 1.20 12.92 7.47 1.18 12.69
Equity/Assets (greater than) 12%(16) 22.08 21.89 0.92 4.15 3.04 1.03 4.63
Actively Traded Companies(20) 8.85 8.44 1.18 13.70 6.98 1.13 13.05
Market Value Below $20 Million(6) 20.96 20.64 1.55 4.88 10.38 1.69 5.70
Holding Company Structure(43) 13.20 12.84 1.17 10.22 6.19 1.18 10.15
Assets Over $1 Billion(17) 9.09 8.43 1.06 12.66 5.90 1.09 12.80
Assets $500 Million-$1 Billion(16) 9.48 8.95 1.16 12.71 6.76 1.12 12.15
Assets $250-$500 Million(14) 11.16 11.06 1.02 10.71 5.80 1.00 10.53
Assets less than $250 Million(19) 16.83 16.63 1.21 7.93 6.74 1.25 7.90
Goodwill Companies(31) 9.27 8.47 0.93 11.19 5.84 0.94 11.05
Non-Goodwill Companies(35) 13.90 13.90 1.28 10.90 6.77 1.28 10.71
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
------------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- ------- ------ -------- ------- ------ ------- ------ -------
(%) (%) (%) (X) (%) (%) (%) (x)
Market Averages. BIF-Insured Thrifts(no MHCs)
--------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BIF-Insured Thrifts(66) 0.84 145.34 1.44 16.04 166.96 18.34 171.21 16.96
NYSE Traded Companies(3) 1.88 43.17 1.03 18.93 190.39 14.42 191.55 18.71
AMEX Traded Companies(6) 0.99 209.73 1.25 15.62 152.07 17.08 176.60 15.02
NASDAQ Listed OTC Companies(57) 0.75 143.53 1.49 15.86 167.38 18.74 169.58 16.97
California Companies(4) 1.32 77.71 1.37 15.32 171.34 14.23 171.60 16.68
Mid-Atlantic Companies(17) 0.85 130.78 1.37 18.71 162.47 18.12 172.29 18.61
Mid-West Companies(2) 0.56 57.14 0.57 0.00 97.89 24.53 103.82 0.00
New England Companies(34) 0.87 162.82 1.66 14.42 178.28 15.90 181.23 15.20
North-West Companies(4) 0.16 215.39 1.03 18.40 168.79 20.25 173.73 19.15
South-East Companies(5) 0.67 135.35 0.76 22.27 124.02 33.74 124.02 24.83
Thrift Strategy(44) 0.83 150.36 1.38 16.52 157.33 19.36 163.68 17.53
Mortgage Banker Strategy(9) 0.71 135.17 1.41 16.53 182.05 15.50 188.32 17.29
Real Estate Strategy(6) 1.08 103.33 1.46 13.51 181.22 15.94 181.39 13.97
Diversified Strategy(7) 0.91 153.67 2.06 13.76 222.66 14.99 215.55 14.27
Companies Issuing Dividends(54) 0.77 149.98 1.37 16.87 167.35 18.83 172.17 17.79
Companies Without Dividends(12) 1.21 119.22 1.84 11.14 164.68 15.32 165.77 11.74
Equity/Assets (less than) 6%(5) 1.40 69.21 1.56 15.75 223.48 13.36 230.48 18.39
Equity/Assets 6-12%(45) 0.88 134.63 1.54 15.19 177.18 15.58 182.81 15.47
Equity/Assets (greater than) 12%(16) 0.53 198.42 1.12 21.62 127.13 27.46 128.67 22.59
Actively Traded Companies(20) 0.79 144.52 1.51 15.02 183.57 15.90 186.14 15.93
Market Value Below $20 Million(6) 1.31 63.72 1.25 8.29 116.92 23.61 118.59 16.30
Holding Company Structure(43) 0.74 147.47 1.49 16.59 165.25 20.20 170.10 17.56
Assets Over $1 Billion(17) 0.94 129.97 1.51 17.46 197.94 18.22 198.44 18.08
Assets $500 Million-$1 Billion(16) 0.84 142.79 1.54 14.86 172.67 15.95 187.41 15.82
Assets $250-$500 Million(14) 0.65 165.99 1.62 15.10 161.12 16.85 162.54 15.06
Assets less than $250 Million(19) 0.91 145.38 1.11 16.87 137.50 22.13 140.50 18.72
Goodwill Companies(31) 0.99 125.67 1.50 16.69 175.68 15.52 185.37 17.61
Non-Goodwill Companies(35) 0.70 164.28 1.38 15.39 158.56 20.88 158.56 16.33
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- -------
($) (%) (%)
Market Averages. BIF-Insured Thrifts(no MHCs)
--------------------------------------------
<S> <C> <C> <C>
BIF-Insured Thrifts(66) 0.47 1.69 27.64
NYSE Traded Companies(3) 0.39 0.81 15.59
AMEX Traded Companies(6) 0.61 2.38 34.16
NASDAQ Listed OTC Companies(57) 0.45 1.65 28.00
California Companies(4) 0.00 0.00 0.00
Mid-Atlantic Companies(17) 0.48 1.67 34.45
Mid-West Companies(2) 0.00 0.00 0.00
New England Companies(34) 0.51 1.88 27.52
North-West Companies(4) 0.29 1.55 27.22
South-East Companies(5) 0.68 1.99 40.85
Thrift Strategy(44) 0.51 1.82 31.51
Mortgage Banker Strategy(9) 0.37 1.44 18.95
Real Estate Strategy(6) 0.20 0.97 11.07
Diversified Strategy(7) 0.45 1.44 21.37
Companies Issuing Dividends(54) 0.54 1.96 32.78
Companies Without Dividends(12) 0.00 0.00 0.00
Equity/Assets (less than) 6%(5) 0.18 1.03 16.86
Equity/Assets 6-12%(45) 0.52 1.80 26.96
Equity/Assets (greater than) 12%(16) 0.40 1.55 34.46
Actively Traded Companies(20) 0.52 1.80 26.97
Market Value Below $20 Million(6) 0.28 1.54 26.27
Holding Company Structure(43) 0.49 1.73 28.02
Assets Over $1 Billion(17) 0.53 1.60 26.11
Assets $500 Million-$1 Billion(16) 0.52 1.81 26.78
Assets $250-$500 Million(14) 0.36 1.59 24.94
Assets less than $250 Million(19) 0.45 1.71 32.38
Goodwill Companies(31) 0.49 1.73 27.34
Non-Goodwill Companies(35) 0.45 1.64 27.92
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data
and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common
equity and assets balances; ROI (return on investment) is current EPS
divided by current price.
(6) Annualized, based on last regular quarterly cash dividend
announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities
or unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have
been adjusted for stock splits, stock dividends, and secondary
offerings.
Source: Corporate reports and offering circulars for publicly traded
companies, and RP Financial, Inc. calculations. The information
provided in this report has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
<TABLE>
<CAPTION>
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- ------ ------ ------- ------- ------
(%) (%) (%) (%) (%) (%) (%)
Market Averages. MHC Institutions
---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(21) 12.10 11.92 0.50 4.21 1.88 0.79 6.89
BIF-Insured Thrifts(2) 10.02 10.02 0.72 8.22 2.68 0.71 7.56
NASDAQ Listed OTC Companies(23) 11.86 11.70 0.52 4.68 1.97 0.78 6.97
Florida Companies(3) 9.81 9.78 0.47 4.51 2.05 0.72 6.91
Mid-Atlantic Companies(10) 12.12 11.84 0.45 3.95 1.64 0.74 6.52
Mid-West Companies(7) 12.88 12.87 0.56 4.28 2.05 0.89 7.17
New England Companies(1) 8.48 8.47 1.12 13.72 4.40 0.83 10.17
Thrift Strategy(21) 12.07 11.90 0.48 4.12 1.82 0.78 6.77
Diversified Strategy(1) 8.48 8.47 1.12 13.72 4.40 0.83 10.17
Companies Issuing Dividends(22) 11.52 11.35 0.53 4.84 1.97 0.78 7.12
Companies Without Dividends(1) 17.31 17.31 0.39 2.23 1.97 0.81 4.67
Equity/Assets 6-12%(16) 9.68 9.45 0.46 5.01 1.93 0.71 7.48
Equity/Assets (greater than) 12%(7) 17.10 17.10 0.66 3.90 2.07 0.97 5.75
Actively Traded Companies(1) 9.42 8.40 0.58 6.23 2.30 0.91 9.74
Holding Company Structure(1) 9.42 8.40 0.58 6.23 2.30 0.91 9.74
Assets Over $1 Billion(5) 8.85 8.20 0.72 8.19 2.69 0.84 9.28
Assets $500 Million-$1 Billion(3) 9.81 9.78 0.47 4.51 2.05 0.72 6.91
Assets $250-$500 Million(5) 11.24 11.22 0.51 4.51 1.96 0.84 7.73
Assets less than $250 Million(10) 14.11 14.11 0.44 3.04 1.59 0.75 5.55
Goodwill Companies(9) 8.68 8.23 0.62 7.02 2.49 0.78 8.78
Non-Goodwill Companies(14) 13.59 13.59 0.47 3.41 1.69 0.79 5.99
MHC Institutions(23) 11.86 11.70 0.52 4.68 1.97 0.78 6.97
MHC Converted Last 3 Months(1) 17.31 17.31 0.39 2.23 1.97 0.81 4.67
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------ ------ -------- ------ -------- ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
Market Averages. MHC Institutions
---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(21) 0.51 176.05 0.72 0.00 206.10 24.53 201.65 27.17
BIF-Insured Thrifts(2) 1.85 82.27 1.77 22.75 283.54 28.33 283.67 0.00
NASDAQ Listed OTC Companies(23) 0.70 162.65 0.84 22.75 215.78 24.98 212.59 27.17
Florida Companies(3) 0.45 64.99 0.46 0.00 214.12 20.91 214.92 29.47
Mid-Atlantic Companies(10) 0.89 200.99 1.02 0.00 213.79 25.58 206.15 26.03
Mid-West Companies(7) 0.44 154.71 0.52 0.00 204.93 25.62 205.28 27.17
New England Companies(1) 0.90 121.39 1.60 22.75 289.30 24.53 289.56 0.00
Thrift Strategy(21) 0.68 165.83 0.79 0.00 210.88 25.01 207.09 27.17
Diversified Strategy(1) 0.90 121.39 1.60 22.75 289.30 24.53 289.56 0.00
Companies Issuing Dividends(22) 0.70 162.65 0.81 22.75 222.62 25.32 219.69 27.75
Companies Without Dividends(1) 0.00 0.00 1.40 0.00 113.16 19.59 113.16 24.25
Equity/Assets 6-12%(16) 0.79 95.58 0.91 22.75 230.29 22.59 226.96 27.66
Equity/Assets (greater than) 12%(7) 0.14 565.11 0.68 0.00 183.85 30.72 183.85 26.19
Actively Traded Companies(1) 0.68 83.02 1.06 0.00 259.52 24.44 291.04 27.80
Holding Company Structure(1) 0.68 83.02 1.06 0.00 259.52 24.44 291.04 27.80
Assets Over $1 Billion(5) 0.74 89.86 1.13 22.75 282.55 25.37 290.30 27.80
Assets $500 Million-$1 Billion(3) 0.45 64.99 0.46 0.00 214.12 20.91 214.92 29.47
Assets $250-$500 Million(5) 0.29 456.80 0.42 0.00 223.45 25.26 224.04 25.21
Assets less than $250 Million(10) 1.01 83.46 0.95 0.00 188.28 25.69 188.28 26.85
Goodwill Companies(9) 0.57 127.39 0.89 22.75 257.29 23.01 255.70 26.51
Non-Goodwill Companies(14) 0.79 189.10 0.82 0.00 196.91 26.06 196.91 27.50
MHC Institutions(23) 0.70 162.65 0.84 22.75 215.78 24.98 212.59 27.17
MHC Converted Last 3 Months(1) 0.00 0.00 1.40 0.00 113.16 19.59 113.16 24.25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- -------
($) (%) (%)
Market Averages. MHC Institutions
---------------------------------
<S> <C> <C> <C>
SAIF-Insured Thrifts(21) 0.56 2.16 51.63
BIF-Insured Thrifts(2) 0.52 1.83 48.92
NASDAQ Listed OTC Companies(23) 0.55 2.12 51.18
Florida Companies(3) 0.90 3.05 0.00
Mid-Atlantic Companies(10) 0.39 1.47 47.15
Mid-West Companies(7) 0.68 2.91 69.57
New England Companies(1) 0.68 2.15 48.92
Thrift Strategy(21) 0.54 2.12 51.63
Diversified Strategy(1) 0.68 2.15 48.92
Companies Issuing Dividends(22) 0.59 2.25 61.42
Companies Without Dividends(1) 0.00 0.00 0.00
Equity/Assets 6-12%(16) 0.54 1.93 61.42
Equity/Assets (greater than) 12%(7) 0.59 2.57 0.00
Actively Traded Companies(1) 0.48 1.38 60.00
Holding Company Structure(1) 0.48 1.38 60.00
Assets Over $1 Billion(5) 0.52 1.53 59.38
Assets $500 Million-$1 Billion(3) 0.90 3.05 0.00
Assets $250-$500 Million(5) 0.62 2.26 69.57
Assets less than $250 Million(10) 0.46 2.13 0.00
Goodwill Companies(9) 0.57 1.84 61.42
Non-Goodwill Companies(14) 0.54 2.28 0.00
MHC Institutions(23) 0.55 2.12 51.18
MHC Converted Last 3 Months(1) 0.00 0.00 0.00
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data
and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common
equity and assets balances; ROI (return on investment) is current EPS
divided by current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities
or unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have been
adjusted for stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded
companies, and RP Financial, Inc. calculations. The information
provided in this report has been obtained from sources we believe
are reliable, but we cannot guarantee the accuracy or completeness
of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- -------- ------- ------ ---------------
(%) (%) (%) (%) (%) (%) (%)
NYSE Traded Companies
---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AHM Ahmanson and Co. H.F. of CA 4.17 3.55 0.39 9.68 3.50 0.62 15.44
CSA Coast Savings Financial of CA 4.92 4.86 0.21 4.28 1.96 0.53 10.73
CFB Commercial Federal Corp. of NE 6.00 5.32 0.65 11.03 4.41 0.91 15.55
DME Dime Bancorp, Inc. of NY* 5.27 5.03 0.56 10.57 4.99 0.71 13.39
DSL Downey Financial Corp. of CA 6.93 6.84 0.44 5.82 3.62 0.73 9.68
FRC First Republic Bank of CA* 7.17 7.17 0.70 11.10 5.65 0.60 9.46
FED FirstFed Fin. Corp. of CA 4.83 4.77 0.29 6.19 3.39 0.53 11.34
GSB Glendale Fed. Bk, FSB of CA 5.53 4.91 0.26 4.71 2.57 0.61 11.03
GDW Golden West Fin. Corp. of CA 6.37 6.37 1.02 16.09 7.41 1.24 19.62
GPT GreenPoint Fin. Corp. of NY* 10.31 5.79 1.06 9.99 5.26 1.03 9.74
NYB New York Bancorp, Inc. of NY 5.08 5.08 1.38 26.83 6.68 1.62 31.44
WES Westcorp Inc. of Orange CA 9.05 9.02 0.87 9.10 5.09 0.43 4.51
AMEX Traded Companies
---------------------
ANA Acadiana Bancshares of LA* 17.43 17.43 0.50 3.67 2.15 0.50 3.67
BKC American Bank of Waterbury CT* 8.29 7.95 1.27 15.35 8.40 1.10 13.19
BFD BostonFed Bancorp of MA 8.79 8.49 0.51 5.08 3.37 0.66 6.58
CFX CFX Corp of NH* 7.44 6.96 0.94 11.53 5.24 1.12 13.73
CNY Carver Bancorp, Inc. of NY 8.35 8.01 -0.44 -4.95 -6.11 0.01 0.07
CBK Citizens First Fin.Corp. of IL 14.08 14.08 0.29 1.95 1.64 0.58 3.84
ESX Essex Bancorp of VA(8) 0.27 0.17 -0.03 -16.67 -1.01 0.03 16.67
FCB Falmouth Co-Op Bank of MA* 23.88 23.88 0.84 3.43 2.65 0.79 3.23
FAB FirstFed America Bancorp of MA 12.16 12.16 -0.20 -2.35 NM 0.47 5.61
GAF GA Financial Corp. of PA 15.18 15.02 1.00 5.26 4.21 1.27 6.71
JSB JSB Financial, Inc. of NY 22.85 22.85 1.80 8.12 5.85 1.71 7.74
KNK Kankakee Bancorp of IL 11.09 10.42 0.66 6.35 5.14 0.82 7.92
KYF Kentucky First Bancorp of KY 16.56 16.56 0.87 4.64 4.26 1.12 6.00
MBB MSB Bancorp of Middletown NY* 7.39 3.63 0.17 2.40 1.98 0.18 2.50
PDB Piedmont Bancorp of NC 16.63 16.63 -0.42 -1.94 -1.77 0.66 3.07
SSB Scotland Bancorp of NC 37.02 37.02 1.41 3.88 2.83 1.72 4.72
SZB SouthFirst Bancshares of AL 14.00 14.00 -0.03 -0.19 -0.17 0.23 1.62
SRN Southern Banc Company of AL 16.90 16.72 0.15 0.82 0.81 0.51 2.77
SSM Stone Street Bancorp of NC 28.85 28.85 1.43 4.18 3.79 1.71 5.02
TSH Teche Holding Company of LA 13.14 13.14 0.69 5.03 4.08 0.96 6.96
FTF Texarkana Fst. Fin. Corp of AR 15.70 15.70 1.41 8.40 5.52 1.74 10.38
THR Three Rivers Fin. Corp. of MI 13.76 13.76 0.57 3.94 3.63 0.82 5.68
TBK Tolland Bank of CT* 6.94 6.74 0.75 11.37 6.30 0.78 11.89
WSB Washington SB, FSB of MD 8.30 8.30 0.50 6.00 4.29 0.73 8.80
NASDAQ Listed OTC Companies
---------------------------
FBCV 1st Bancorp of Vincennes IN 8.26 8.09 0.31 3.80 3.13 0.13 1.61
AFED AFSALA Bancorp, Inc. of NY 13.47 13.47 0.79 6.46 4.82 0.79 6.46
ALBK ALBANK Fin. Corp. of Albany NY 9.20 8.04 0.84 9.16 4.99 1.04 11.28
AMFC AMB Financial Corp. of IN 14.95 14.95 0.73 4.14 4.26 0.81 4.57
ASBP ASB Financial Corp. of OH 15.56 15.56 0.60 3.25 3.00 0.86 4.67
ABBK Abington Savings Bank of MA* 6.92 6.23 0.82 12.05 6.60 0.73 10.71
AABC Access Anytime Bancorp of NM 7.44 7.44 -0.50 -8.75 -6.54 -0.12 -2.14
AFBC Advance Fin. Bancorp of WV 15.45 15.45 0.39 4.31 2.22 0.79 8.74
AADV Advantage Bancorp of WI 9.21 8.62 0.40 4.49 2.61 0.89 9.94
AFCB Affiliated Comm BC, Inc of MA 9.78 9.72 0.96 9.78 5.08 1.09 11.12
ALBC Albion Banc Corp. of Albion NY 8.73 8.73 0.11 1.14 1.16 0.38 4.07
ABCL Allied Bancorp of IL 8.91 8.80 0.52 5.86 2.70 0.76 8.56
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ----------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------ ------ -------- ------ -------- ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
NYSE Traded Companies
---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AHM Ahmanson and Co. H.F. of CA 1.90 42.90 1.25 28.57 277.94 11.58 NM 17.90
CSA Coast Savings Financial of CA 1.40 65.70 1.37 NM 209.64 10.32 212.29 20.34
CFB Commercial Federal Corp. of NE 0.89 76.36 0.91 22.68 235.20 14.12 265.26 16.09
DME Dime Bancorp, Inc. of NY* 1.57 31.98 0.85 20.06 206.27 10.87 216.22 15.83
DSL Downey Financial Corp. of CA 0.95 55.76 0.58 27.62 155.64 10.79 157.81 16.61
FRC First Republic Bank of CA* 1.19 69.68 0.94 17.71 166.79 11.96 166.89 20.77
FED FirstFed Fin. Corp. of CA 1.39 134.39 2.46 29.53 174.35 8.42 176.28 16.12
GSB Glendale Fed. Bk, FSB of CA 1.46 69.38 1.36 NM 172.66 9.55 194.25 16.62
GDW Golden West Fin. Corp. of CA 1.31 42.43 0.68 13.49 207.15 13.20 207.15 11.06
GPT GreenPoint Fin. Corp. of NY* 2.89 27.84 1.30 19.03 198.13 20.43 NM 19.52
NYB New York Bancorp, Inc. of NY 1.22 48.76 0.97 14.96 NM 19.48 NM 12.77
WES Westcorp Inc. of Orange CA 0.74 134.25 1.95 19.65 171.60 15.53 172.14 NM
AMEX Traded Companies
---------------------
ANA Acadiana Bancshares of LA* 0.52 190.96 1.35 NM 131.02 22.83 131.02 NM
BKC American Bank of Waterbury CT* 1.81 48.13 1.45 11.90 171.11 14.18 178.23 13.85
BFD BostonFed Bancorp of MA 0.52 114.29 0.74 29.65 152.15 13.37 157.39 22.85
CFX CFX Corp of NH* 0.72 120.07 1.23 19.09 199.62 14.85 213.41 16.03
CNY Carver Bancorp, Inc. of NY 1.37 42.60 1.02 NM 81.18 6.78 84.64 NM
CBK Citizens First Fin.Corp. of IL 0.59 37.65 0.26 NM 123.81 17.43 123.81 NM
ESX Essex Bancorp of VA(8) 2.63 42.63 1.34 NM NM 2.75 NM NM
FCB Falmouth Co-Op Bank of MA* 0.07 806.45 0.98 NM 127.40 30.42 127.40 NM
FAB FirstFed America Bancorp of MA 0.40 235.98 1.10 NM 147.27 17.91 147.27 NM
GAF GA Financial Corp. of PA 0.12 132.49 0.43 23.75 133.33 20.24 134.75 18.63
JSB JSB Financial, Inc. of NY 1.08 33.97 0.62 17.09 133.65 30.54 133.65 17.92
KNK Kankakee Bancorp of IL 0.94 67.06 0.92 19.44 118.47 13.14 126.05 15.59
KYF Kentucky First Bancorp of KY 0.07 630.51 0.75 23.48 121.93 20.20 121.93 18.16
MBB MSB Bancorp of Middletown NY* 0.71 38.66 0.63 NM 117.02 8.65 238.44 NM
PDB Piedmont Bancorp of NC 0.91 71.58 0.79 NM 144.88 24.09 144.88 NM
SSB Scotland Bancorp of NC NA NA 0.50 NM 133.93 49.59 133.93 29.03
SZB SouthFirst Bancshares of AL 0.75 39.15 0.40 NM 112.08 15.69 112.08 NM
SRN Southern Banc Company of AL NA NA NA NM 111.79 18.89 112.96 NM
SSM Stone Street Bancorp of NC 0.27 187.50 0.62 26.40 130.94 37.77 130.94 22.00
TSH Teche Holding Company of LA 0.27 304.97 0.96 24.51 123.12 16.18 123.12 17.70
FTF Texarkana Fst. Fin. Corp of AR 0.46 145.12 0.79 18.13 158.02 24.81 158.02 14.66
THR Three Rivers Fin. Corp. of MI 1.21 44.02 0.80 27.56 110.45 15.19 110.45 19.10
TBK Tolland Bank of CT* 2.13 54.09 1.87 15.87 166.23 11.54 171.07 15.19
WSB Washington SB, FSB of MD NA NA 0.92 23.33 138.61 11.51 138.61 15.91
NASDAQ Listed OTC Companies
---------------------------
FBCV 1st Bancorp of Vincennes IN 0.94 45.77 0.66 NM 117.97 9.74 120.45 NM
AFED AFSALA Bancorp, Inc. of NY 0.45 150.77 1.43 20.73 115.33 15.54 115.33 20.73
ALBK ALBANK Fin. Corp. of Albany NY 0.91 78.77 0.99 20.03 177.45 16.33 203.05 16.27
AMFC AMB Financial Corp. of IN 0.81 49.41 0.53 23.48 106.09 15.86 106.09 21.23
ASBP ASB Financial Corp. of OH 1.02 71.62 1.09 NM 128.08 19.93 128.08 23.21
ABBK Abington Savings Bank of MA* 0.20 211.97 0.69 15.16 174.85 12.10 194.13 17.06
AABC Access Anytime Bancorp of NM 1.60 29.31 0.92 NM 105.36 7.84 105.36 NM
AFBC Advance Fin. Bancorp of WV 0.37 89.84 0.40 NM 106.71 16.48 106.71 22.18
AADV Advantage Bancorp of WI 0.44 128.03 1.01 NM 167.37 15.42 179.01 17.30
AFCB Affiliated Comm BC, Inc of MA 0.39 191.75 1.20 19.69 182.66 17.86 183.66 17.31
ALBC Albion Banc Corp. of Albion NY 0.72 53.94 0.54 NM 97.04 8.47 97.04 24.22
ABCL Allied Bancorp of IL 0.15 257.09 0.53 NM 144.23 12.85 146.04 25.38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- ------
($) (%) (%)
NYSE Traded Companies
---------------------
<S> <C> <C> <C>
AHM Ahmanson and Co. H.F. of CA 0.88 1.56 44.44
CSA Coast Savings Financial of CA 0.00 0.00 0.00
CFB Commercial Federal Corp. of NE 0.28 0.60 13.66
DME Dime Bancorp, Inc. of NY* 0.16 0.76 15.24
DSL Downey Financial Corp. of CA 0.32 1.35 37.21
FRC First Republic Bank of CA* 0.00 0.00 0.00
FED FirstFed Fin. Corp. of CA 0.00 0.00 0.00
GSB Glendale Fed. Bk, FSB of CA 0.00 0.00 0.00
GDW Golden West Fin. Corp. of CA 0.44 0.48 6.53
GPT GreenPoint Fin. Corp. of NY* 1.00 1.66 31.55
NYB New York Bancorp, Inc. of NY 0.60 2.03 30.30
WES Westcorp Inc. of Orange CA 0.40 1.83 36.04
AMEX Traded Companies
---------------------
ANA Acadiana Bancshares of LA* 0.36 1.65 NM
BKC American Bank of Waterbury CT* 1.44 3.87 46.01
BFD BostonFed Bancorp of MA 0.28 1.28 37.84
CFX CFX Corp of NH* 0.88 4.19 NM
CNY Carver Bancorp, Inc. of NY 0.20 1.65 NM
CBK Citizens First Fin.Corp. of IL 0.00 0.00 0.00
ESX Essex Bancorp of VA(8) 0.00 0.00 NM
FCB Falmouth Co-Op Bank of MA* 0.20 1.02 38.46
FAB FirstFed America Bancorp of MA 0.00 0.00 NM
GAF GA Financial Corp. of PA 0.48 2.53 60.00
JSB JSB Financial, Inc. of NY 1.40 2.95 50.36
KNK Kankakee Bancorp of IL 0.48 1.52 29.63
KYF Kentucky First Bancorp of KY 0.50 3.67 NM
MBB MSB Bancorp of Middletown NY* 0.60 2.42 NM
PDB Piedmont Bancorp of NC 0.40 3.72 NM
SSB Scotland Bancorp of NC 0.30 1.67 58.82
SZB SouthFirst Bancshares of AL 0.50 2.78 NM
SRN Southern Banc Company of AL 0.35 2.17 NM
SSM Stone Street Bancorp of NC 0.45 2.13 56.25
TSH Teche Holding Company of LA 0.50 2.62 64.10
FTF Texarkana Fst. Fin. Corp of AR 0.56 2.36 42.75
THR Three Rivers Fin. Corp. of MI 0.40 2.38 65.57
TBK Tolland Bank of CT* 0.20 1.14 18.02
WSB Washington SB, FSB of MD 0.10 1.43 33.33
NASDAQ Listed OTC Companies
---------------------------
FBCV 1st Bancorp of Vincennes IN 0.40 1.06 33.90
AFED AFSALA Bancorp, Inc. of NY 0.16 0.94 19.51
ALBK ALBANK Fin. Corp. of Albany NY 0.72 1.57 31.44
AMFC AMB Financial Corp. of IN 0.24 1.55 36.36
ASBP ASB Financial Corp. of OH 0.40 3.08 NM
ABBK Abington Savings Bank of MA* 0.40 1.22 18.52
AABC Access Anytime Bancorp of NM 0.00 0.00 NM
AFBC Advance Fin. Bancorp of WV 0.32 2.03 NM
AADV Advantage Bancorp of WI 0.40 0.82 31.50
AFCB Affiliated Comm BC, Inc of MA 0.48 1.59 31.37
ALBC Albion Banc Corp. of Albion NY 0.32 1.38 NM
ABCL Allied Bancorp of IL 0.66 1.96 72.53
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- ------ ------- ------ ------- ------
(%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
---------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ATSB AmTrust Capital Corp. of IN 10.17 10.06 0.29 2.88 3.03 0.19 1.87
AHCI Ambanc Holding Co., Inc. of NY* 12.94 12.94 -0.59 -4.26 -4.16 -0.62 -4.45
ASBI Ameriana Bancorp of IN 10.96 10.95 0.61 5.52 3.53 0.85 7.73
AFFFZ America First Fin. Fund of CA(8) 8.44 8.34 1.49 19.31 13.24 1.83 23.69
ANBK American Nat'l Bancorp of MD(8) 8.97 8.97 0.28 2.90 1.80 0.65 6.74
ABCW Anchor Bancorp Wisconsin of WI 6.22 6.11 0.75 12.06 5.34 0.96 15.56
ANDB Andover Bancorp, Inc. of MA* 8.06 8.06 1.10 13.91 7.24 1.13 14.34
ASFC Astoria Financial Corp. of NY 7.83 6.57 0.56 7.09 3.94 0.79 10.12
AVND Avondale Fin. Corp. of IL 9.12 9.12 -0.49 -5.19 -5.19 -1.51 -16.06
BKCT Bancorp Connecticut of CT* 10.25 10.25 1.32 12.60 6.56 1.24 11.90
BPLS Bank Plus Corp. of CA 5.06 5.06 -0.26 -5.31 -3.83 0.02 0.46
BWFC Bank West Fin. Corp. of MI 14.52 14.52 0.64 3.91 2.81 0.57 3.47
BANC BankAtlantic Bancorp of FL 5.62 4.62 0.90 14.98 7.26 0.65 10.86
BKUNA BankUnited SA of FL 3.72 3.02 0.21 4.55 2.25 0.34 7.54
BVCC Bay View Capital Corp. of CA 6.34 5.32 0.39 6.37 3.45 0.63 10.37
FSNJ Bayonne Banchsares of NJ 14.42 14.42 -0.35 -2.42 -1.94 -0.06 -0.40
BFSB Bedford Bancshares of VA 14.16 14.16 1.01 6.98 4.51 1.29 8.94
BFFC Big Foot Fin. Corp. of IL 16.98 16.98 0.05 0.28 0.24 0.42 2.45
BSBC Branford SB of CT(8)* 9.28 9.28 1.16 12.75 6.06 1.16 12.75
BYFC Broadway Fin. Corp. of CA 10.01 10.01 -0.14 -1.23 -1.73 0.21 1.88
CBES CBES Bancorp of MO 18.39 18.39 0.77 5.22 3.61 0.96 6.51
CCFH CCF Holding Company of GA 11.68 11.68 0.05 0.30 0.30 0.07 0.42
CENF CENFED Financial Corp. of CA 5.20 5.19 0.51 10.04 5.52 0.73 14.30
CFSB CFSB Bancorp of Lansing MI 7.63 7.63 0.85 10.96 4.42 1.07 13.84
CKFB CKF Bancorp of Danville KY 23.96 23.96 1.81 7.25 6.16 1.33 5.33
CNSB CNS Bancorp of MO 24.94 24.94 0.42 1.70 1.45 0.77 3.13
CSBF CSB Financial Group Inc of IL* 25.06 23.63 0.43 1.59 1.68 0.66 2.42
CBCI Calumet Bancorp of Chicago IL 15.50 15.50 1.15 7.22 6.04 1.46 9.16
CAFI Camco Fin. Corp. of OH 9.57 8.82 0.82 9.11 5.05 0.92 10.18
CMRN Cameron Fin. Corp. of MO 21.69 21.69 1.07 4.43 4.33 1.33 5.51
CAPS Capital Savings Bancorp of MO 8.80 8.80 0.67 7.61 4.75 0.93 10.68
CFNC Carolina Fincorp of NC* 22.82 22.82 1.14 4.92 3.83 1.09 4.70
CASB Cascade SB of Everett WA(8) 6.17 6.17 0.46 7.49 4.28 0.58 9.46
CATB Catskill Fin. Corp. of NY* 25.04 25.04 1.43 5.21 5.11 1.45 5.27
CNIT Cenit Bancorp of Norfolk VA 7.24 6.65 0.87 12.05 7.04 0.80 11.05
CEBK Central Co-Op. Bank of MA* 10.45 9.31 0.88 8.78 6.78 0.90 8.90
CENB Century Bancshares of NC* 29.93 29.93 1.76 5.86 5.42 1.78 5.93
CBSB Charter Financial Inc. of IL 14.47 12.80 1.13 7.49 4.90 1.59 10.49
COFI Charter One Financial of OH 6.71 6.28 0.98 14.64 5.09 1.23 18.32
CVAL Chester Valley Bancorp of PA 8.36 8.36 0.65 7.42 3.87 0.93 10.59
CTZN CitFed Bancorp of Dayton OH 6.37 5.74 0.58 9.12 4.02 0.82 12.83
CLAS Classic Bancshares of KY 14.72 12.42 0.55 3.05 3.03 0.77 4.27
CMSB Cmnwealth Bancorp of PA 9.63 7.53 0.55 5.26 3.54 0.70 6.71
CBSA Coastal Bancorp of Houston TX 3.33 2.77 0.25 7.57 4.50 0.44 13.16
CFCP Coastal Fin. Corp. of SC 6.17 6.17 0.94 15.22 3.88 1.03 16.67
CMSV Commty. Svgs, MHC of FL (48.5) 11.25 11.25 0.56 4.87 2.27 0.84 7.27
CFTP Community Fed. Bancorp of MS 27.46 27.46 1.33 4.15 3.42 1.62 5.07
CFFC Community Fin. Corp. of VA 13.71 13.71 1.01 7.32 5.74 1.28 9.26
CFBC Community First Bnkg Co. of GA 15.40 15.19 0.56 3.65 3.00 0.57 3.69
CIBI Community Inv. Bancorp of OH 12.04 12.04 0.62 5.22 4.06 0.94 7.95
COOP Cooperative Bk.for Svgs. of NC 7.63 7.63 -0.80 -10.08 -5.81 0.20 2.52
CRZY Crazy Woman Creek Bncorp of WY 25.81 25.81 1.06 3.69 3.97 1.30 4.52
DNFC D&N Financial Corp. of MI 5.57 5.52 0.61 10.68 5.24 0.80 14.08
DCBI Delphos Citizens Bancorp of OH 28.41 28.41 1.45 6.45 4.11 1.45 6.45
DIME Dime Community Bancorp of NY 14.52 12.50 0.96 5.96 4.70 1.04 6.41
DIBK Dime Financial Corp. of CT* 7.96 7.70 1.90 23.27 9.02 1.91 23.35
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------- ------ -------- ------ ------- ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ATSB AmTrust Capital Corp. of IN 2.84 23.48 0.93 NM 96.07 9.77 97.13 NM
AHCI Ambanc Holding Co., Inc. of NY* 0.63 124.04 1.40 NM 107.56 13.92 107.56 NM
ASBI Ameriana Bancorp of IN 0.40 71.19 0.38 28.33 157.52 17.26 157.64 20.24
AFFFZ America First Fin. Fund of CA(8) 0.40 81.55 0.49 7.55 135.31 11.42 137.00 6.16
ANBK American Nat'l Bancorp of MD(8) 0.74 102.82 1.17 NM 163.48 14.66 163.48 23.84
ABCW Anchor Bancorp Wisconsin of WI 0.92 126.05 1.48 18.71 219.03 13.63 223.08 14.50
ANDB Andover Bancorp, Inc. of MA* 1.01 99.08 1.41 13.81 181.21 14.61 181.21 13.40
ASFC Astoria Financial Corp. of NY 0.51 37.96 0.48 25.35 173.80 13.60 206.96 17.75
AVND Avondale Fin. Corp. of IL 3.18 96.19 5.33 NM 103.28 9.42 103.28 NM
BKCT Bancorp Connecticut of CT* 1.19 100.82 1.98 15.23 189.09 19.37 189.09 16.13
BPLS Bank Plus Corp. of CA 2.88 58.99 2.11 NM 129.45 6.56 129.59 NM
BWFC Bank West Fin. Corp. of MI 0.28 51.72 0.20 NM 146.39 21.25 146.39 NM
BANC BankAtlantic Bancorp of FL 0.97 102.98 1.39 13.78 197.66 11.11 240.64 19.01
BKUNA BankUnited SA of FL 0.60 28.73 0.21 NM 169.57 6.32 209.27 26.81
BVCC Bay View Capital Corp. of CA 0.83 137.32 1.51 29.00 186.04 11.79 221.67 17.80
FSNJ Bayonne Banchsares of NJ 1.22 43.59 1.36 NM 124.82 18.00 124.82 NM
BFSB Bedford Bancshares of VA 0.60 79.85 0.56 22.15 150.30 21.29 150.30 17.29
BFFC Big Foot Fin. Corp. of IL 0.09 151.52 0.34 NM 118.55 20.13 118.55 NM
BSBC Branford SB of CT(8)* 1.42 141.26 3.06 16.50 200.00 18.57 200.00 16.50
BYFC Broadway Fin. Corp. of CA 2.06 39.74 1.01 NM 75.09 7.51 75.09 NM
CBES CBES Bancorp of MO NA NA NA 27.71 111.94 20.58 111.94 22.23
CCFH CCF Holding Company of GA 0.18 325.68 0.72 NM 114.90 13.42 114.90 NM
CENF CENFED Financial Corp. of CA 1.28 58.93 1.10 18.12 172.04 8.95 172.37 12.72
CFSB CFSB Bancorp of Lansing MI 0.17 308.01 0.61 22.63 245.06 18.69 245.06 17.92
CKFB CKF Bancorp of Danville KY 1.26 14.79 0.20 16.24 120.63 28.90 120.63 22.09
CNSB CNS Bancorp of MO 0.53 72.14 0.58 NM 116.24 28.99 116.24 NM
CSBF CSB Financial Group Inc of IL* 0.56 57.14 0.57 NM 97.89 24.53 103.82 NM
CBCI Calumet Bancorp of Chicago IL 1.16 102.51 1.57 16.54 123.42 19.13 123.42 13.04
CAFI Camco Fin. Corp. of OH 0.49 54.74 0.32 19.82 150.89 14.43 163.57 17.74
CMRN Cameron Fin. Corp. of MO 0.73 111.82 0.97 23.08 104.77 22.72 104.77 18.56
CAPS Capital Savings Bancorp of MO 0.31 97.24 0.39 21.04 152.93 13.46 152.93 15.00
CFNC Carolina Fincorp of NC* 0.14 254.78 0.51 26.10 129.09 29.46 129.09 27.31
CASB Cascade SB of Everett WA(8) 0.39 203.69 0.95 23.36 168.44 10.40 168.44 18.51
CATB Catskill Fin. Corp. of NY* 0.47 140.85 1.48 19.55 110.21 27.60 110.21 19.33
CNIT Cenit Bancorp of Norfolk VA 0.51 103.23 0.76 14.20 171.11 12.38 186.32 15.48
CEBK Central Co-Op. Bank of MA* 0.85 97.49 1.21 14.76 124.49 13.01 139.80 14.55
CENB Century Bancshares of NC* 0.39 139.39 0.91 18.45 108.15 32.37 108.15 18.23
CBSB Charter Financial Inc. of IL 0.56 104.84 0.79 20.42 156.38 22.63 176.75 14.59
COFI Charter One Financial of OH 0.27 164.80 0.73 19.63 276.60 18.55 295.45 15.68
CVAL Chester Valley Bancorp of PA 0.23 381.68 1.10 25.84 183.71 15.36 183.71 18.11
CTZN CitFed Bancorp of Dayton OH 0.41 143.79 0.95 24.87 211.34 13.46 234.56 17.67
CLAS Classic Bancshares of KY 0.94 65.45 0.93 NM 100.20 14.75 118.77 23.60
CMSB Cmnwealth Bancorp of PA 0.50 86.54 0.79 28.26 151.28 14.56 193.45 22.16
CBSA Coastal Bancorp of Houston TX 0.58 39.81 0.51 22.24 162.47 5.41 195.45 12.80
CFCP Coastal Fin. Corp. of SC 0.21 436.85 1.15 25.79 NM 22.62 NM 23.56
CMSV Commty. Svgs, MHC of FL (48.5) 0.55 67.15 0.63 NM 207.76 23.36 207.76 29.47
CFTP Community Fed. Bancorp of MS 0.30 91.63 0.46 29.24 139.11 38.20 139.11 23.96
CFFC Community Fin. Corp. of VA 0.39 148.67 0.65 17.42 121.95 16.72 121.95 13.77
CFBC Community First Bnkg Co. of GA 2.02 26.10 0.83 NM 121.78 18.75 123.46 NM
CIBI Community Inv. Bancorp of OH 0.63 83.42 0.63 24.60 129.60 15.60 129.60 16.15
COOP Cooperative Bk.for Svgs. of NC 0.46 50.09 0.29 NM 171.94 13.12 171.94 NM
CRZY Crazy Woman Creek Bncorp of WY 0.39 136.15 1.04 25.21 99.66 25.73 99.66 20.59
DNFC D&N Financial Corp. of MI 0.34 198.09 0.93 19.09 191.78 10.69 193.73 14.48
DCBI Delphos Citizens Bancorp of OH 0.35 27.76 0.13 24.31 117.21 33.30 117.21 24.31
DIME Dime Community Bancorp of NY 0.73 112.22 1.43 21.28 137.17 19.91 159.24 19.80
DIBK Dime Financial Corp. of CT* 0.40 355.33 3.17 11.08 231.14 18.41 238.91 11.04
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- -------
($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C>
ATSB AmTrust Capital Corp. of IN 0.20 1.52 50.00
AHCI Ambanc Holding Co., Inc. of NY* 0.20 1.30 NM
ASBI Ameriana Bancorp of IN 0.64 3.01 NM
AFFFZ America First Fin. Fund of CA(8) 1.60 3.84 29.04
ANBK American Nat'l Bancorp of MD(8) 0.12 0.59 32.43
ABCW Anchor Bancorp Wisconsin of WI 0.32 1.10 20.65
ANDB Andover Bancorp, Inc. of MA* 0.68 1.92 26.46
ASFC Astoria Financial Corp. of NY 0.60 1.21 30.61
AVND Avondale Fin. Corp. of IL 0.00 0.00 NM
BKCT Bancorp Connecticut of CT* 1.00 3.05 46.51
BPLS Bank Plus Corp. of CA 0.00 0.00 NM
BWFC Bank West Fin. Corp. of MI 0.32 1.70 60.38
BANC BankAtlantic Bancorp of FL 0.13 0.96 13.27
BKUNA BankUnited SA of FL 0.00 0.00 0.00
BVCC Bay View Capital Corp. of CA 0.32 1.14 32.99
FSNJ Bayonne Banchsares of NJ 0.17 1.37 NM
BFSB Bedford Bancshares of VA 0.56 2.22 49.12
BFFC Big Foot Fin. Corp. of IL 0.00 0.00 0.00
BSBC Branford SB of CT(8)* 0.08 1.52 25.00
BYFC Broadway Fin. Corp. of CA 0.20 1.82 NM
CBES CBES Bancorp of MO 0.40 2.09 57.97
CCFH CCF Holding Company of GA 0.55 3.33 NM
CENF CENFED Financial Corp. of CA 0.36 1.00 18.18
CFSB CFSB Bancorp of Lansing MI 0.68 2.19 49.64
CKFB CKF Bancorp of Danville KY 0.50 2.63 42.74
CNSB CNS Bancorp of MO 0.24 1.39 NM
CSBF CSB Financial Group Inc of IL* 0.00 0.00 0.00
CBCI Calumet Bancorp of Chicago IL 0.00 0.00 0.00
CAFI Camco Fin. Corp. of OH 0.49 2.23 44.14
CMRN Cameron Fin. Corp. of MO 0.28 1.56 35.90
CAPS Capital Savings Bancorp of MO 0.24 1.39 29.27
CFNC Carolina Fincorp of NC* 0.24 1.35 35.29
CASB Cascade SB of Everett WA(8) 0.00 0.00 0.00
CATB Catskill Fin. Corp. of NY* 0.28 1.68 32.94
CNIT Cenit Bancorp of Norfolk VA 1.00 1.88 26.67
CEBK Central Co-Op. Bank of MA* 0.32 1.51 22.22
CENB Century Bancshares of NC* 2.00 2.52 46.40
CBSB Charter Financial Inc. of IL 0.32 1.49 30.48
COFI Charter One Financial of OH 1.00 1.71 33.56
CVAL Chester Valley Bancorp of PA 0.42 1.83 47.19
CTZN CitFed Bancorp of Dayton OH 0.36 0.75 18.56
CLAS Classic Bancshares of KY 0.28 1.88 62.22
CMSB Cmnwealth Bancorp of PA 0.28 1.44 40.58
CBSA Coastal Bancorp of Houston TX 0.48 1.49 33.10
CFCP Coastal Fin. Corp. of SC 0.36 1.47 37.89
CMSV Commty. Svgs, MHC of FL (48.5) 0.90 2.80 NM
CFTP Community Fed. Bancorp of MS 0.30 1.74 50.85
CFFC Community Fin. Corp. of VA 0.56 2.43 42.42
CFBC Community First Bnkg Co. of GA 0.60 1.71 57.14
CIBI Community Inv. Bancorp of OH 0.32 2.06 50.79
COOP Cooperative Bk.for Svgs. of NC 0.00 0.00 NM
CRZY Crazy Woman Creek Bncorp of WY 0.40 2.74 68.97
DNFC D&N Financial Corp. of MI 0.20 0.95 18.18
DCBI Delphos Citizens Bancorp of OH 0.00 0.00 0.00
DIME Dime Community Bancorp of NY 0.00 0.00 0.00
DIBK Dime Financial Corp. of CT* 0.40 1.28 14.18
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- -------- ------ ------ -------- ------
(%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
_______________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
EGLB Eagle BancGroup of IL 11.85 11.85 -0.09 -0.77 -0.72 0.20 1.73
EBSI Eagle Bancshares of Tucker GA 8.30 8.30 0.43 5.14 3.56 0.58 6.99
EGFC Eagle Financial Corp. of CT 6.87 5.36 0.08 1.08 0.49 0.46 6.44
ETFS East Texas Fin. Serv. of TX 18.16 18.16 0.31 1.65 1.77 0.63 3.40
EMLD Emerald Financial Corp of OH 7.58 7.46 0.72 9.43 5.59 0.89 11.64
EIRE Emerald Island Bancorp, MA* 7.08 7.08 0.85 12.35 6.08 0.89 13.00
EFBC Empire Federal Bancorp of MT 34.89 34.89 0.83 2.37 1.99 1.09 3.12
EFBI Enterprise Fed. Bancorp of OH 12.33 12.32 0.71 5.16 3.73 0.79 5.73
EQSB Equitable FSB of Wheaton MD 5.04 5.04 0.46 9.09 5.24 0.74 14.50
FFFG F.F.O. Financial Group of FL(8) 6.49 6.49 0.68 10.82 3.70 0.97 15.58
FCBF FCB Fin. Corp. of Neenah WI 17.50 17.50 0.92 5.20 2.26 1.09 6.16
FFBS FFBS Bancorp of Columbus MS 19.23 19.23 1.16 5.96 4.32 1.47 7.53
FFDF FFD Financial Corp. of OH 24.74 24.74 0.78 3.42 2.91 1.08 4.74
FFLC FFLC Bancorp of Leesburg FL 13.48 13.48 0.70 4.57 3.37 1.01 6.60
FFFC FFVA Financial Corp. of VA 13.18 12.90 1.11 7.86 4.02 1.34 9.52
FFWC FFW Corporation of Wabash IN 9.52 8.58 0.84 8.39 6.05 1.05 10.48
FFYF FFY Financial Corp. of OH 13.71 13.71 0.90 5.84 4.72 1.27 8.31
FMCO FMS Financial Corp. of NJ 6.56 6.44 0.69 10.76 5.67 1.02 15.79
FFHH FSF Financial Corp. of MN 11.35 11.35 0.66 5.22 3.90 0.84 6.63
FOBC Fed One Bancorp of Wheeling WV 11.06 10.55 0.68 5.85 4.30 0.97 8.33
FBCI Fidelity Bancorp of Chicago IL 10.38 10.36 0.55 5.34 4.02 0.78 7.48
FSBI Fidelity Bancorp, Inc. of PA 6.75 6.75 0.51 7.35 5.08 0.81 11.71
FFFL Fidelity FSB, MHC of FL (47.7) 8.38 8.31 0.38 4.15 1.83 0.60 6.56
FFED Fidelity Fed. Bancorp of IN 5.14 5.14 0.16 3.18 1.92 0.28 5.62
FFOH Fidelity Financial of OH 12.94 11.42 0.70 4.68 3.19 1.02 6.89
FIBC Financial Bancorp, Inc. of NY 9.36 9.31 0.56 5.74 3.73 1.00 10.23
FBSI First Bancshares of MO 13.54 13.52 0.91 6.15 5.38 1.10 7.44
FBBC First Bell Bancorp of PA 9.83 9.83 1.07 7.64 6.68 1.24 8.87
FBER First Bergen Bancorp of NJ 14.19 14.19 0.44 2.73 2.07 0.77 4.74
SKBO First Carnegie,MHC of PA(45.0) 15.65 15.65 0.37 2.35 1.48 0.54 3.43
FSTC First Citizens Corp of GA 9.13 6.85 1.12 11.27 4.14 1.11 11.11
FCME First Coastal Corp. of ME* 9.23 9.23 4.21 NM 36.73 4.08 NM
FFBA First Colorado Bancorp of Co 12.93 12.75 0.89 6.25 4.32 0.88 6.17
FDEF First Defiance Fin.Corp. of OH 21.32 21.32 0.75 3.36 2.82 1.03 4.62
FESX First Essex Bancorp of MA* 6.97 6.06 0.96 13.00 6.48 0.83 11.33
FFES First FS&LA of E. Hartford CT 6.43 6.43 0.42 6.80 4.33 0.70 11.19
FFSX First FS&LA. MHC of IA (46.1) 8.29 8.23 0.43 5.21 2.30 0.73 8.99
BDJI First Fed. Bancorp. of MN 10.87 10.87 0.30 2.56 2.14 0.63 5.44
FFBH First Fed. Bancshares of AR 14.97 14.97 0.77 4.84 3.81 1.06 6.63
FTFC First Fed. Capital Corp. of WI 6.36 5.96 0.74 11.34 4.61 0.86 13.16
FFKY First Fed. Fin. Corp. of KY 13.70 12.91 1.30 9.44 5.01 1.55 11.27
FFBZ First Federal Bancorp of OH 7.55 7.54 0.73 9.58 4.63 1.02 13.38
FFCH First Fin. Holdings Inc. of SC 6.11 6.11 0.57 9.30 3.86 0.84 13.65
FFBI First Financial Bancorp of IL 8.66 8.66 -0.38 -4.73 -4.36 0.42 5.23
FFHC First Financial Corp. of WI(8) 7.12 6.94 0.96 13.35 4.10 1.28 17.95
FFHS First Franklin Corp. of OH 9.02 8.96 0.19 2.14 1.82 0.65 7.20
FGHC First Georgia Hold. Corp of GA 8.22 7.53 0.66 7.98 3.51 0.51 6.23
FSPG First Home Bancorp of NJ 6.66 6.55 0.89 13.61 7.37 1.16 17.76
FFSL First Independence Corp. of KS 10.43 10.43 0.43 3.84 3.21 0.69 6.12
FISB First Indiana Corp. of IN 9.56 9.44 0.83 8.86 4.93 1.01 10.83
FKFS First Keystone Fin. Corp of PA 7.31 7.31 0.54 7.21 4.56 0.77 10.30
FLKY First Lancaster Bncshrs of KY 34.23 34.23 1.15 3.72 2.97 1.40 4.52
FLFC First Liberty Fin. Corp. of GA 7.37 6.65 0.88 12.11 5.33 0.72 9.91
CASH First Midwest Fin. Corp. of IA 11.39 10.09 0.74 6.46 5.32 0.94 8.21
FMBD First Mutual Bancorp of IL 12.85 9.73 0.10 0.57 0.65 0.31 1.84
FMSB First Mutual SB of Bellevue WA* 6.82 6.82 1.02 15.34 7.47 1.00 14.95
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ----------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------- ------ -------- ------ ------- ----- --------
(%) (%) (%) (X) (%) (%) (%) (x)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EGLB Eagle BancGroup of IL 1.48 35.83 0.76 NM 99.58 11.80 99.58 NM
EBSI Eagle Bancshares of Tucker GA 1.07 63.66 0.95 28.13 144.58 12.01 144.58 20.69
EGFC Eagle Financial Corp. of CT 0.52 94.68 0.86 NM 175.98 12.08 225.42 NM
ETFS East Texas Fin. Serv. of TX 0.17 141.97 0.50 NM 96.39 17.51 96.39 27.50
EMLD Emerald Financial Corp of OH 0.24 106.84 0.35 17.90 160.58 12.17 163.10 14.50
EIRE Emerald Island Bancorp, MA* 0.40 151.40 0.89 16.45 186.71 13.21 186.71 15.63
EFBC Empire Federal Bancorp of MT 0.06 312.50 0.46 NM 119.38 41.65 119.38 NM
EFBI Enterprise Fed. Bancorp of OH 0.03 576.09 0.29 26.83 139.06 17.15 139.24 24.18
EQSB Equitable FSB of Wheaton MD 0.49 36.72 0.26 19.09 162.79 8.20 162.79 11.97
FFFG F.F.O. Financial Group of FL(8) 3.28 52.54 2.40 27.00 274.39 17.81 274.39 18.75
FCBF FCB Fin. Corp. of Neenah WI 0.15 412.16 0.82 NM 227.47 39.80 227.47 NM
FFBS FFBS Bancorp of Columbus MS 0.37 118.76 0.62 23.16 136.22 26.20 136.22 18.33
FFDF FFD Financial Corp. of OH NA NA 0.27 NM 104.28 25.79 104.28 24.79
FFLC FFLC Bancorp of Leesburg FL 0.19 163.65 0.44 29.72 139.94 18.86 139.94 20.59
FFFC FFVA Financial Corp. of VA 0.18 318.63 0.98 24.90 201.78 26.59 206.08 20.54
FFWC FFW Corporation of Wabash IN 0.16 203.56 0.50 16.53 129.61 12.34 143.88 13.24
FFYF FFY Financial Corp. of OH 0.67 74.18 0.64 21.19 136.83 18.76 136.83 14.90
FMCO FMS Financial Corp. of NJ 1.06 48.50 0.92 17.63 180.45 11.83 183.70 12.01
FFHH FSF Financial Corp. of MN 0.03 636.64 0.34 25.64 141.24 16.04 141.24 20.20
FOBC Fed One Bancorp of Wheeling WV 0.40 101.18 0.93 23.23 138.30 15.30 145.02 16.31
FBCI Fidelity Bancorp of Chicago IL 0.80 21.76 0.22 24.86 129.64 13.46 129.92 17.76
FSBI Fidelity Bancorp, Inc. of PA 0.44 112.57 1.01 19.68 134.24 9.07 134.24 12.35
FFFL Fidelity FSB, MHC of FL (47.7) 0.34 62.82 0.29 NM 220.47 18.46 222.09 NM
FFED Fidelity Fed. Bancorp of IN 0.16 455.75 0.85 NM 171.57 8.82 171.57 29.57
FFOH Fidelity Financial of OH 0.08 381.04 0.37 NM 131.47 17.01 148.98 21.33
FIBC Financial Bancorp, Inc. of NY 1.81 26.91 0.89 26.79 151.86 14.21 152.55 15.04
FBSI First Bancshares of MO 0.56 52.51 0.36 18.60 118.46 16.04 118.64 15.38
FBBC First Bell Bancorp of PA 0.07 147.42 0.13 14.97 147.22 14.46 147.22 12.90
FBER First Bergen Bancorp of NJ 0.83 129.82 2.50 NM 136.38 19.35 136.38 27.83
SKBO First Carnegie,MHC of PA(45.0) NA NA 0.68 NM 159.16 24.91 159.16 NM
FSTC First Citizens Corp of GA NA NA 1.47 24.14 215.25 19.66 286.89 24.48
FCME First Coastal Corp. of ME* 2.01 85.72 2.52 2.72 118.36 10.92 118.36 2.81
FFBA First Colorado Bancorp of Co 0.23 121.82 0.38 23.15 159.03 20.56 161.22 23.44
FDEF First Defiance Fin.Corp. of OH 0.45 96.96 0.56 NM 121.32 25.86 121.32 25.85
FESX First Essex Bancorp of MA* 0.56 146.94 1.43 15.43 176.06 12.27 202.69 17.71
FFES First FS&LA of E. Hartford CT 0.37 71.33 1.42 23.11 148.62 9.55 148.62 14.05
FFSX First FS&LA. MHC of IA (46.1) 0.11 342.10 0.52 NM 218.34 18.11 220.10 25.21
BDJI First Fed. Bancorp. of MN 0.27 137.04 0.76 NM 125.00 13.59 125.00 22.00
FFBH First Fed. Bancshares of AR 0.19 119.50 0.30 26.23 129.89 19.44 129.89 19.14
FTFC First Fed. Capital Corp. of WI NA NA 0.65 21.71 240.79 15.30 256.97 18.70
FFKY First Fed. Fin. Corp. of KY 0.64 71.13 0.52 19.96 183.47 25.14 194.78 16.73
FFBZ First Federal Bancorp of OH 0.53 163.59 1.01 21.59 196.69 14.84 196.89 15.45
FFCH First Fin. Holdings Inc. of SC 1.66 41.99 0.84 25.87 230.82 14.11 230.82 17.62
FFBI First Financial Bancorp of IL 0.41 142.00 0.91 NM 110.61 9.57 110.61 20.74
FFHC First Financial Corp. of WI(8) 0.26 148.86 0.64 24.42 NM 22.51 NM 18.16
FFHS First Franklin Corp. of OH 0.52 82.31 0.62 NM 115.03 10.37 115.77 16.32
FGHC First Georgia Hold. Corp of GA 3.10 20.52 0.75 28.50 216.63 17.80 236.27 NM
FSPG First Home Bancorp of NJ 0.64 114.23 1.39 13.57 173.15 11.53 176.03 10.40
FFSL First Independence Corp. of KS 0.87 69.37 0.91 NM 126.03 13.15 126.03 19.49
FISB First Indiana Corp. of IN 1.50 91.12 1.62 20.30 172.48 16.49 174.63 16.61
FKFS First Keystone Fin. Corp of PA 1.60 30.58 0.84 21.92 155.00 11.33 155.00 15.33
FLKY First Lancaster Bncshrs of KY 0.75 32.89 0.29 NM 107.34 36.75 107.34 27.68
FLFC First Liberty Fin. Corp. of GA 0.81 110.00 1.29 18.75 201.22 14.83 223.17 22.92
CASH First Midwest Fin. Corp. of IA 0.85 75.48 0.93 18.78 120.23 13.70 135.69 14.79
FMBD First Mutual Bancorp of IL 0.19 182.28 0.46 NM 101.31 13.01 133.74 NM
FMSB First Mutual SB of Bellevue WA* 0.01 NA 1.27 13.38 191.29 13.05 191.29 13.73
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- ------
($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C>
EGLB Eagle BancGroup of IL 0.00 0.00 NM
EBSI Eagle Bancshares of Tucker GA 0.60 3.33 NM
EGFC Eagle Financial Corp. of CT 1.00 2.58 NM
ETFS East Texas Fin. Serv. of TX 0.20 1.04 58.82
EMLD Emerald Financial Corp of OH 0.24 1.66 29.63
EIRE Emerald Island Bancorp, MA* 0.28 1.12 18.42
EFBC Empire Federal Bancorp of MT 0.30 1.70 NM
EFBI Enterprise Fed. Bancorp of OH 1.00 4.55 NM
EQSB Equitable FSB of Wheaton MD 0.00 0.00 0.00
FFFG F.F.O. Financial Group of FL(8) 0.00 0.00 0.00
FCBF FCB Fin. Corp. of Neenah WI 0.80 3.02 NM
FFBS FFBS Bancorp of Columbus MS 0.50 2.27 52.63
FFDF FFD Financial Corp. of OH 0.30 1.98 68.18
FFLC FFLC Bancorp of Leesburg FL 0.48 1.52 45.28
FFFC FFVA Financial Corp. of VA 0.48 1.46 36.36
FFWC FFW Corporation of Wabash IN 0.72 2.30 38.10
FFYF FFY Financial Corp. of OH 0.70 2.58 54.69
FMCO FMS Financial Corp. of NJ 0.28 1.02 17.95
FFHH FSF Financial Corp. of MN 0.50 2.50 64.10
FOBC Fed One Bancorp of Wheeling WV 0.62 2.70 62.63
FBCI Fidelity Bancorp of Chicago IL 0.32 1.35 33.68
FSBI Fidelity Bancorp, Inc. of PA 0.36 1.69 33.33
FFFL Fidelity FSB, MHC of FL (47.7) 0.90 3.30 NM
FFED Fidelity Fed. Bancorp of IN 0.40 4.51 NM
FFOH Fidelity Financial of OH 0.28 1.75 54.90
FIBC Financial Bancorp, Inc. of NY 0.40 1.72 45.98
FBSI First Bancshares of MO 0.20 0.83 15.50
FBBC First Bell Bancorp of PA 0.40 2.52 37.74
FBER First Bergen Bancorp of NJ 0.20 1.09 52.63
SKBO First Carnegie,MHC of PA(45.0) 0.30 1.85 NM
FSTC First Citizens Corp of GA 0.44 1.26 30.34
FCME First Coastal Corp. of ME* 0.00 0.00 0.00
FFBA First Colorado Bancorp of Co 0.48 2.56 59.26
FDEF First Defiance Fin.Corp. of OH 0.32 2.10 74.42
FESX First Essex Bancorp of MA* 0.48 2.36 36.36
FFES First FS&LA of E. Hartford CT 0.60 1.71 39.47
FFSX First FS&LA. MHC of IA (46.1) 0.48 1.60 69.57
BDJI First Fed. Bancorp. of MN 0.00 0.00 0.00
FFBH First Fed. Bancshares of AR 0.24 1.13 29.63
FTFC First Fed. Capital Corp. of WI 0.48 1.87 40.68
FFKY First Fed. Fin. Corp. of KY 0.56 2.46 49.12
FFBZ First Federal Bancorp of OH 0.24 1.26 27.27
FFCH First Fin. Holdings Inc. of SC 0.72 1.95 50.35
FFBI First Financial Bancorp of IL 0.00 0.00 NM
FFHC First Financial Corp. of WI(8) 0.60 1.63 39.74
FFHS First Franklin Corp. of OH 0.32 1.62 NM
FGHC First Georgia Hold. Corp of GA 0.05 0.55 15.63
FSPG First Home Bancorp of NJ 0.40 1.80 24.39
FFSL First Independence Corp. of KS 0.25 1.71 53.19
FISB First Indiana Corp. of IN 0.48 2.02 41.03
FKFS First Keystone Fin. Corp of PA 0.20 0.68 14.81
FLKY First Lancaster Bncshrs of KY 0.50 3.23 NM
FLFC First Liberty Fin. Corp. of GA 0.40 1.62 30.30
CASH First Midwest Fin. Corp. of IA 0.36 1.92 36.00
FMBD First Mutual Bancorp of IL 0.32 2.06 NM
FMSB First Mutual SB of Bellevue WA* 0.20 0.96 12.82
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FNGB First Northern Cap. Corp of WI 11.28 11.28 0.64 5.50 3.35 0.91 7.88
FFPB First Palm Beach Bancorp of FL 6.57 6.41 -0.03 -0.42 -0.26 0.03 0.37
FSLA First SB SLA MHC of NJ (47.5) 9.42 8.40 0.58 6.23 2.30 0.91 9.74
SOPN First SB, SSB, Moore Co. of NC 22.83 22.83 1.44 5.83 4.61 1.73 6.99
FWWB First Savings Bancorp of WA* 14.75 13.57 1.05 6.25 3.69 1.00 5.90
SHEN First Shenango Bancorp of PA 10.95 10.95 0.89 7.82 5.37 1.16 10.18
FSFC First So.east Fin. Corp. of SC(8) 10.22 10.22 0.01 0.11 0.06 0.92 7.48
FBNW FirstBank Corp of Clarkston WA 18.04 18.04 0.70 3.86 3.18 0.57 3.14
FFDB FirstFed Bancorp of AL 9.42 8.58 0.62 6.31 5.35 0.94 9.63
FSPT FirstSpartan Fin. Corp. of SC 26.32 26.32 0.95 3.62 2.81 1.11 4.20
FLAG Flag Financial Corp of GA 9.58 9.58 -0.03 -0.29 -0.19 0.15 1.65
FLGS Flagstar Bancorp, Inc of MI 5.46 5.46 0.00 0.00 0.00 0.00 0.00
FFIC Flushing Fin. Corp. of NY* 15.47 15.47 0.93 5.55 4.20 0.97 5.78
FBHC Fort Bend Holding Corp. of TX 6.03 5.62 0.19 3.18 2.04 0.44 7.36
FTSB Fort Thomas Fin. Corp. of KY 16.04 16.04 0.54 2.94 2.64 0.81 4.45
FKKY Frankfort First Bancorp of KY 17.19 17.19 -0.28 -1.14 -1.07 0.56 2.28
FTNB Fulton Bancorp of MO 25.01 25.01 0.74 3.81 1.61 1.05 5.39
GFSB GFS Bancorp of Grinnell IA 11.44 11.44 1.00 8.59 5.68 1.22 10.55
GUPB GFSB Bancorp of Gallup NM 16.30 16.30 0.74 3.86 3.43 0.93 4.86
GSLA GS Financial Corp. of LA 45.63 45.63 1.08 3.63 2.16 1.08 3.63
GOSB GSB Financial Corp. of NY 27.06 27.06 1.02 3.77 3.25 0.86 3.19
GWBC Gateway Bancorp of KY(8) 27.04 27.04 0.83 3.23 2.89 1.15 4.47
GBCI Glacier Bancorp of MT 9.74 9.48 1.44 15.09 6.11 1.61 16.87
GFCO Glenway Financial Corp. of OH 9.49 9.36 0.43 4.51 3.82 0.72 7.57
GTPS Great American Bancorp of IL 21.43 21.43 0.26 1.09 1.12 0.32 1.37
GTFN Great Financial Corp. of KY(8) 9.24 8.84 0.75 7.89 3.76 0.71 7.50
GSBC Great Southern Bancorp of MO 8.53 8.53 1.38 14.76 6.05 1.56 16.69
GDVS Greater DV SB,MHC of PA (19.9)* 11.57 11.57 0.32 2.71 0.96 0.58 4.95
GSFC Green Street Fin. Corp. of NC 36.26 36.26 1.37 3.84 2.99 1.66 4.66
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 13.78 13.78 0.61 4.30 1.57 0.92 6.51
HCBB HCB Bancshares of AR 18.25 17.49 -0.11 -0.58 -0.59 0.39 2.11
HEMT HF Bancorp of Hemet CA 8.21 6.72 -0.27 -3.07 -2.60 -1.88 -21.03
HFFC HF Financial Corp. of SD 9.43 9.43 0.66 7.12 4.87 0.89 9.66
HFNC HFNC Financial Corp. of NC 17.99 17.99 0.86 3.47 2.69 1.19 4.76
HMNF HMN Financial, Inc. of MN 14.43 14.43 0.71 4.79 3.77 0.88 5.96
HALL Hallmark Capital Corp. of WI 7.24 7.24 0.48 6.83 5.22 0.61 8.62
HARB Harbor FSB, MHC of FL (46.6)(8) 8.39 8.11 0.95 11.52 3.57 1.23 14.84
HRBF Harbor Federal Bancorp of MD 12.90 12.90 0.46 3.52 2.64 0.71 5.46
HFSA Hardin Bancorp of Hardin MO 12.48 12.48 0.52 3.53 3.27 0.79 5.41
HARL Harleysville SA of PA 6.53 6.53 0.75 11.71 5.67 1.03 16.04
HFGI Harrington Fin. Group of IN 5.59 5.59 0.39 8.22 4.52 0.33 6.87
HARS Harris SB, MHC of PA (24.3) 8.01 7.01 0.49 5.78 1.80 0.62 7.24
HFFB Harrodsburg 1st Fin Bcrp of KY 26.93 26.93 1.03 3.77 3.44 1.36 5.01
HHFC Harvest Home Fin. Corp. of OH 12.50 12.50 0.27 1.87 1.92 0.58 4.07
HAVN Haven Bancorp of Woodhaven NY 5.95 5.93 0.56 9.27 4.86 0.83 13.79
HVFD Haverfield Corp. of OH(8) 8.55 8.55 0.57 6.82 3.52 1.08 12.97
HTHR Hawthorne Fin. Corp. of CA 4.60 4.60 0.23 5.32 3.71 0.51 11.47
HMLK Hemlock Fed. Fin. Corp. of IL 18.34 18.34 0.13 0.99 0.66 0.73 5.45
HBNK Highland Federal Bank of CA 7.47 7.47 0.46 6.25 3.12 0.68 9.17
HIFS Hingham Inst. for Sav. of MA* 9.35 9.35 1.21 12.60 6.76 1.21 12.60
HBEI Home Bancorp of Elgin IL 26.70 26.70 0.49 1.99 1.38 0.85 3.42
HBFW Home Bancorp of Fort Wayne IN 13.29 13.29 0.56 3.93 3.06 0.89 6.27
HBBI Home Building Bancorp of IN 12.82 12.82 0.20 1.59 1.26 0.52 4.05
HCFC Home City Fin. Corp. of OH 20.61 20.61 0.78 6.27 3.29 1.17 9.46
HOMF Home Fed Bancorp of Seymour IN 8.48 8.22 1.05 12.65 5.90 1.22 14.72
HWEN Home Financial Bancorp of IN 16.93 16.93 0.64 3.78 3.27 0.80 4.76
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------ ------- -------- ------- ------- ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FNGB First Northern Cap. Corp of WI 0.06 798.69 0.53 29.82 161.18 18.17 161.18 20.83
FFPB First Palm Beach Bancorp of FL 0.73 55.75 0.60 NM 159.70 10.49 163.68 NM
FSLA First SB SLA MHC of NJ (47.5) 0.68 83.02 1.06 NM 259.52 24.44 291.04 27.80
SOPN First SB, SSB, Moore Co. of NC 0.08 241.60 0.31 21.70 125.96 28.76 125.96 18.11
FWWB First Savings Bancorp of WA* 0.30 215.39 0.97 27.10 170.70 25.18 185.54 28.71
SHEN First Shenango Bancorp of PA 0.54 135.75 1.15 18.64 144.83 15.86 144.83 14.32
FSFC First So.east Fin. Corp. of SC(8) 0.11 362.15 0.50 NM 200.38 20.49 200.38 22.33
FBNW FirstBank Corp of Clarkston WA 2.07 31.12 0.78 NM 121.43 21.90 121.43 NM
FFDB FirstFed Bancorp of AL 0.84 49.36 0.59 18.68 122.58 11.54 134.47 12.24
FSPT FirstSpartan Fin. Corp. of SC NA NA 0.49 NM 128.92 33.93 128.92 NM
FLAG Flag Financial Corp of GA 4.27 47.62 2.91 NM 148.47 14.23 148.47 NM
FLGS Flagstar Bancorp, Inc of MI 3.41 8.26 0.32 NM NM 19.12 NM NM
FFIC Flushing Fin. Corp. of NY* 0.29 223.21 1.15 23.78 132.61 20.52 132.61 22.80
FBHC Fort Bend Holding Corp. of TX 0.37 141.08 1.03 NM 155.98 9.41 167.51 21.20
FTSB Fort Thomas Fin. Corp. of KY 1.48 32.73 0.54 NM 120.19 19.28 120.19 25.00
FKKY Frankfort First Bancorp of KY 0.09 86.21 0.08 NM 147.69 25.38 147.69 NM
FTNB Fulton Bancorp of MO 0.81 106.69 1.01 NM 176.23 44.07 176.23 NM
GFSB GFS Bancorp of Grinnell IA NA NA 0.82 17.61 145.40 16.63 145.40 14.35
GUPB GFSB Bancorp of Gallup NM 0.18 199.36 0.69 29.16 119.19 19.42 119.19 23.13
GSLA GS Financial Corp. of LA 0.11 293.18 0.84 NM 96.27 43.93 96.27 NM
GOSB GSB Financial Corp. of NY NA NA NA NM 116.11 31.42 116.11 NM
GWBC Gateway Bancorp of KY(8) 0.90 14.14 0.38 NM 112.22 30.34 112.22 25.00
GBCI Glacier Bancorp of MT 0.27 229.89 0.85 16.36 221.67 21.60 227.85 14.63
GFCO Glenway Financial Corp. of OH 0.31 91.62 0.34 26.18 116.16 11.02 117.73 15.59
GTPS Great American Bancorp of IL 0.23 140.69 0.44 NM 101.92 21.84 101.92 NM
GTFN Great Financial Corp. of KY(8) 3.06 15.68 0.72 26.57 207.11 19.13 216.33 27.98
GSBC Great Southern Bancorp of MO 1.91 114.73 2.59 16.52 255.03 21.76 255.03 14.62
GDVS Greater DV SB,MHC of PA (19.9)* 2.79 43.15 1.93 NM 277.78 32.13 277.78 NM
GSFC Green Street Fin. Corp. of NC 0.16 83.63 0.18 NM 127.29 46.16 127.29 27.57
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 0.50 216.62 1.36 NM 267.05 36.80 267.05 NM
HCBB HCB Bancshares of AR NA NA 1.47 NM 98.32 17.94 102.58 NM
HEMT HF Bancorp of Hemet CA NA NA NA NM 119.43 9.81 145.96 NM
HFFC HF Financial Corp. of SD 0.33 244.25 1.01 20.53 142.01 13.39 142.01 15.12
HFNC HFNC Financial Corp. of NC 0.87 97.22 1.14 NM 170.76 30.72 170.76 27.12
HMNF HMN Financial, Inc. of MN 0.08 531.97 0.71 26.53 128.42 18.53 128.42 21.32
HALL Hallmark Capital Corp. of WI 0.16 273.18 0.64 19.17 124.03 8.98 124.03 15.18
HARB Harbor FSB, MHC of FL (46.6)(8) 0.46 222.68 1.37 28.05 NM 25.59 NM 21.78
HRBF Harbor Federal Bancorp of MD 0.05 379.63 0.28 NM 133.50 17.21 133.50 24.44
HFSA Hardin Bancorp of Hardin MO 0.09 179.21 0.32 NM 113.13 14.12 113.13 19.94
HARL Harleysville SA of PA 0.03 NA 0.77 17.64 193.46 12.64 193.46 12.88
HFGI Harrington Fin. Group of IN 0.25 18.93 0.23 22.13 176.01 9.84 176.01 26.47
HARS Harris SB, MHC of PA (24.3) 0.65 64.15 0.97 NM NM 24.16 NM NM
HFFB Harrodsburg 1st Fin Bcrp of KY 0.47 59.81 0.38 29.09 110.42 29.74 110.42 21.92
HHFC Harvest Home Fin. Corp. of OH 0.11 117.00 0.26 NM 105.73 13.21 105.73 24.00
HAVN Haven Bancorp of Woodhaven NY 0.74 86.28 1.15 20.57 177.69 10.56 178.28 13.83
HVFD Haverfield Corp. of OH(8) 1.04 82.48 0.99 28.43 186.86 15.97 186.86 14.95
HTHR Hawthorne Fin. Corp. of CA 7.17 19.99 1.67 26.95 131.98 6.07 131.98 12.50
HMLK Hemlock Fed. Fin. Corp. of IL NA NA 1.30 NM 103.77 19.03 103.77 27.49
HBNK Highland Federal Bank of CA 3.09 55.00 2.13 NM 187.61 14.02 187.61 21.81
HIFS Hingham Inst. for Sav. of MA* 0.41 165.13 0.89 14.78 176.06 16.47 176.06 14.78
HBEI Home Bancorp of Elgin IL 0.41 69.84 0.36 NM 131.97 35.23 131.97 NM
HBFW Home Bancorp of Fort Wayne IN 0.05 835.54 0.51 NM 133.37 17.72 133.37 20.43
HBBI Home Building Bancorp of IN 0.38 47.98 0.29 NM 124.26 15.92 124.26 NM
HCFC Home City Fin. Corp. of OH 0.62 110.38 0.87 NM 104.94 21.62 104.94 20.13
HOMF Home Fed Bancorp of Seymour IN 0.46 117.33 0.62 16.96 200.88 17.03 207.20 14.57
HWEN Home Financial Bancorp of IN 1.74 31.30 0.67 NM 107.77 18.24 107.77 24.26
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- -------
($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C>
FNGB First Northern Cap. Corp of WI 0.32 2.44 72.73
FFPB First Palm Beach Bancorp of FL 0.60 1.73 NM
FSLA First SB SLA MHC of NJ (47.5) 0.48 1.38 60.00
SOPN First SB, SSB, Moore Co. of NC 0.88 3.83 NM
FWWB First Savings Bancorp of WA* 0.28 1.16 31.46
SHEN First Shenango Bancorp of PA 0.60 1.90 35.50
FSFC First So.east Fin. Corp. of SC(8) 0.24 1.54 NM
FBNW FirstBank Corp of Clarkston WA 0.00 0.00 0.00
FFDB FirstFed Bancorp of AL 0.50 2.82 52.63
FSPT FirstSpartan Fin. Corp. of SC 0.00 0.00 0.00
FLAG Flag Financial Corp of GA 0.34 2.19 NM
FLGS Flagstar Bancorp, Inc of MI 0.00 0.00 NM
FFIC Flushing Fin. Corp. of NY* 0.24 1.08 25.81
FBHC Fort Bend Holding Corp. of TX 0.40 1.10 54.05
FTSB Fort Thomas Fin. Corp. of KY 0.25 2.00 NM
FKKY Frankfort First Bancorp of KY 0.36 3.51 NM
FTNB Fulton Bancorp of MO 0.20 0.78 48.78
GFSB GFS Bancorp of Grinnell IA 0.26 1.68 29.55
GUPB GFSB Bancorp of Gallup NM 0.40 1.99 57.97
GSLA GS Financial Corp. of LA 0.28 1.78 NM
GOSB GSB Financial Corp. of NY 0.00 0.00 0.00
GWBC Gateway Bancorp of KY(8) 0.40 2.22 NM
GBCI Glacier Bancorp of MT 0.48 2.67 43.64
GFCO Glenway Financial Corp. of OH 0.80 2.88 NM
GTPS Great American Bancorp of IL 0.40 2.35 NM
GTFN Great Financial Corp. of KY(8) 0.60 1.42 37.74
GSBC Great Southern Bancorp of MO 0.40 2.11 34.78
GDVS Greater DV SB,MHC of PA (19.9)* 0.36 1.50 NM
GSFC Green Street Fin. Corp. of NC 0.44 2.35 NM
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 0.44 1.87 NM
HCBB HCB Bancshares of AR 0.20 1.48 NM
HEMT HF Bancorp of Hemet CA 0.00 0.00 NM
HFFC HF Financial Corp. of SD 0.42 1.66 34.15
HFNC HFNC Financial Corp. of NC 0.28 1.75 65.12
HMNF HMN Financial, Inc. of MN 0.00 0.00 0.00
HALL Hallmark Capital Corp. of WI 0.00 0.00 0.00
HARB Harbor FSB, MHC of FL (46.6)(8) 1.40 2.43 68.29
HRBF Harbor Federal Bancorp of MD 0.48 2.18 NM
HFSA Hardin Bancorp of Hardin MO 0.48 2.70 NM
HARL Harleysville SA of PA 0.40 1.55 27.40
HFGI Harrington Fin. Group of IN 0.12 0.89 19.67
HARS Harris SB, MHC of PA (24.3) 0.58 1.32 73.42
HFFB Harrodsburg 1st Fin Bcrp of KY 0.40 2.50 72.73
HHFC Harvest Home Fin. Corp. of OH 0.40 3.33 NM
HAVN Haven Bancorp of Woodhaven NY 0.60 1.40 28.71
HVFD Haverfield Corp. of OH(8) 0.56 1.93 54.90
HTHR Hawthorne Fin. Corp. of CA 0.00 0.00 0.00
HMLK Hemlock Fed. Fin. Corp. of IL 0.24 1.59 NM
HBNK Highland Federal Bank of CA 0.00 0.00 0.00
HIFS Hingham Inst. for Sav. of MA* 0.48 1.75 25.81
HBEI Home Bancorp of Elgin IL 0.40 2.21 NM
HBFW Home Bancorp of Fort Wayne IN 0.20 0.85 27.78
HBBI Home Building Bancorp of IN 0.30 1.30 NM
HCFC Home City Fin. Corp. of OH 0.32 2.06 62.75
HOMF Home Fed Bancorp of Seymour IN 0.50 1.46 24.75
HWEN Home Financial Bancorp of IN 0.20 1.21 37.04
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- ------- ------ ------ ------- ------
(%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HPBC Home Port Bancorp, Inc. of MA* 10.56 10.56 1.67 15.78 7.24 1.66 15.69
HMCI Homecorp, Inc. of Rockford IL 6.54 6.54 0.14 2.17 1.59 0.43 6.83
HZFS Horizon Fin'l. Services of IA 9.79 9.79 0.36 3.35 3.36 0.57 5.36
HRZB Horizon Financial Corp. of WA* 15.60 15.60 1.57 9.99 6.79 1.54 9.80
IBSF IBS Financial Corp. of NJ 17.41 17.41 0.49 2.68 1.99 0.86 4.71
ISBF ISB Financial Corp. of LA 12.19 10.33 0.69 4.59 3.01 0.93 6.20
ITLA Imperial Thrift & Loan of CA* 10.99 10.94 1.47 12.75 7.73 1.47 12.75
IFSB Independence FSB of DC 6.52 5.72 0.14 2.19 2.00 0.33 4.98
INCB Indiana Comm. Bank, SB of IN 12.39 12.39 0.16 1.24 0.94 0.51 3.88
INBI Industrial Bancorp of OH 17.71 17.71 0.72 3.87 2.69 1.42 7.57
IWBK Interwest SB of Oak Harbor WA 6.78 6.63 0.87 12.91 4.28 1.18 17.52
IPSW Ipswich SB of Ipswich MA* 5.71 5.71 1.21 20.39 6.00 0.95 16.02
JXVL Jacksonville Bancorp of TX 14.92 14.92 1.02 6.45 5.31 1.34 8.46
JXSB Jcksnville SB,MHC of IL (45.6) 10.50 10.50 0.30 2.72 1.62 0.66 5.97
JSBA Jefferson Svgs Bancorp of MO 8.20 6.24 0.30 3.91 1.82 0.70 9.25
JOAC Joachim Bancorp of MO 28.17 28.17 0.47 1.59 1.53 0.77 2.62
KSAV KS Bancorp of Kenly NC 13.53 13.52 0.96 6.86 5.84 1.25 8.89
KSBK KSB Bancorp of Kingfield ME(8)* 7.16 6.74 0.96 13.72 7.56 1.00 14.25
KFBI Klamath First Bancorp of OR 19.55 19.55 0.81 3.67 2.68 1.23 5.54
LSBI LSB Fin. Corp. of Lafayette IN 8.85 8.85 0.77 8.34 6.29 0.68 7.35
LVSB Lakeview SB of Paterson NJ 9.52 7.61 1.37 13.73 7.46 0.95 9.53
LARK Landmark Bancshares of KS 13.79 13.79 0.89 5.95 4.30 1.05 7.01
LARL Laurel Capital Group of PA 10.03 10.03 1.14 10.88 6.51 1.43 13.72
LSBX Lawrence Savings Bank of MA* 8.69 8.69 1.75 20.90 10.88 1.73 20.60
LFED Leeds FSB, MHC of MD (36.3) 16.18 16.18 0.79 4.89 2.08 1.13 6.98
LXMO Lexington B&L Fin. Corp. of MO 28.32 28.32 1.03 3.49 3.44 1.33 4.50
LIFB Life Bancorp of Norfolk VA 10.55 10.25 0.71 6.60 3.88 0.87 8.03
LFBI Little Falls Bancorp of NJ 13.28 12.26 0.27 1.94 1.60 0.48 3.41
LOGN Logansport Fin. Corp. of IN 19.20 19.20 1.17 5.64 4.66 1.52 7.31
LONF London Financial Corp. of OH 19.66 19.66 0.66 3.18 3.17 1.00 4.83
LISB Long Island Bancorp, Inc of NY 8.99 8.90 0.61 6.58 3.09 0.71 7.63
MAFB MAF Bancorp of IL 7.88 6.84 0.79 10.57 4.41 1.10 14.70
MBLF MBLA Financial Corp. of MO 12.15 12.15 0.67 5.10 4.11 0.85 6.52
MFBC MFB Corp. of Mishawaka IN 13.65 13.65 0.57 3.66 3.30 0.86 5.52
MLBC ML Bancorp of Villanova PA(8) 6.98 6.86 0.74 10.23 4.90 0.67 9.27
MSBF MSB Financial Corp. of MI 16.99 16.99 1.19 6.43 3.94 1.47 7.91
MGNL Magna Bancorp of MS(8) 10.22 9.95 1.39 14.23 4.72 1.53 15.70
MARN Marion Capital Holdings of IN 22.55 22.55 1.39 6.09 5.21 1.67 7.28
MRKF Market Fin. Corp. of OH 34.99 34.99 0.84 3.14 2.19 0.84 3.14
MFCX Marshalltown Fin. Corp. of IA(8) 15.74 15.74 0.34 2.15 1.79 0.73 4.66
MFSL Maryland Fed. Bancorp of MD 8.38 8.28 0.61 7.41 4.52 0.89 10.72
MASB MassBank Corp. of Reading MA* 10.64 10.64 1.10 10.79 6.35 1.04 10.24
MFLR Mayflower Co-Op. Bank of MA* 9.68 9.52 1.03 10.64 7.22 0.97 10.03
MECH Mechanics SB of Hartford CT* 10.23 10.23 1.92 19.45 11.15 1.92 19.45
MDBK Medford Bank of Medford, MA* 8.99 8.38 1.08 12.07 6.90 1.01 11.29
MERI Meritrust FSB of Thibodaux LA 8.20 8.20 0.67 8.71 4.55 1.05 13.56
MWBX MetroWest Bank of MA* 7.44 7.44 1.38 18.37 7.85 1.38 18.37
MCBS Mid Continent Bancshares of KS(8) 9.39 9.39 1.02 9.79 4.95 1.16 11.10
MIFC Mid Iowa Financial Corp. of IA 9.34 9.34 1.00 10.76 7.19 1.40 15.15
MCBN Mid-Coast Bancorp of ME 8.60 8.60 0.43 4.92 3.93 0.67 7.71
MWBI Midwest Bancshares, Inc. of IA 6.91 6.91 0.45 6.61 4.93 0.75 10.99
MWFD Midwest Fed. Fin. Corp of WI 8.81 8.50 1.43 16.39 8.04 1.09 12.55
MFFC Milton Fed. Fin. Corp. of OH 13.14 13.14 0.49 3.07 2.79 0.68 4.25
MIVI Miss. View Hold. Co. of MN 18.87 18.87 0.69 3.74 3.63 1.03 5.57
MBSP Mitchell Bancorp of NC* 43.36 43.36 1.40 3.24 2.94 1.64 3.81
MBBC Monterey Bay Bancorp of CA 11.33 10.45 0.25 2.04 1.59 0.47 3.87
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------ ------ -------- ------ -------- ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HPBC Home Port Bancorp, Inc. of MA* 0.08 NA 1.56 13.81 208.52 22.01 208.52 13.89
HMCI Homecorp, Inc. of Rockford IL 3.35 14.24 0.59 NM 132.71 8.68 132.71 20.00
HZFS Horizon Fin'l. Services of IA 1.22 25.93 0.52 29.80 98.08 9.60 98.08 18.63
HRZB Horizon Financial Corp. of WA* NA NA 0.84 14.72 144.36 22.52 144.36 15.00
IBSF IBS Financial Corp. of NJ 0.08 171.10 0.52 NM 143.40 24.96 143.40 28.66
ISBF ISB Financial Corp. of LA NA NA 0.80 NM 154.52 18.83 182.22 24.63
ITLA Imperial Thrift & Loan of CA* 1.47 84.20 1.50 12.93 157.30 17.28 157.96 12.93
IFSB Independence FSB of DC 2.02 9.82 0.32 NM 108.37 7.07 123.61 21.97
INCB Indiana Comm. Bank, SB of IN NA NA 0.71 NM 138.55 17.16 138.55 NM
INBI Industrial Bancorp of OH 0.30 156.98 0.55 NM 144.02 25.50 144.02 19.03
IWBK Interwest SB of Oak Harbor WA 0.64 73.79 0.78 23.35 274.90 18.64 281.08 17.21
IPSW Ipswich SB of Ipswich MA* 1.52 56.87 1.18 16.67 NM 17.57 NM 21.21
JXVL Jacksonville Bancorp of TX 0.78 67.63 0.70 18.82 125.02 18.65 125.02 14.36
JXSB Jcksnville SB,MHC of IL (45.6) 0.66 72.96 0.61 NM 165.67 17.39 165.67 28.16
JSBA Jefferson Svgs Bancorp of MO 0.46 140.15 0.84 NM 178.91 14.66 234.86 23.31
JOAC Joachim Bancorp of MO 0.20 109.86 0.32 NM 110.05 31.00 110.05 NM
KSAV KS Bancorp of Kenly NC 0.35 80.53 0.33 17.13 114.06 15.43 114.13 13.21
KSBK KSB Bancorp of Kingfield ME(8)* 1.78 43.20 1.03 13.22 169.75 12.16 180.45 12.73
KFBI Klamath First Bancorp of OR 0.08 213.23 0.23 NM 144.37 28.22 144.37 24.70
LSBI LSB Fin. Corp. of Lafayette IN 1.17 63.71 0.84 15.89 130.15 11.52 130.15 18.05
LVSB Lakeview SB of Paterson NJ 0.98 66.74 1.50 13.40 187.09 17.80 233.98 19.30
LARK Landmark Bancshares of KS 0.31 123.70 0.57 23.23 142.82 19.69 142.82 19.74
LARL Laurel Capital Group of PA 0.43 212.35 1.31 15.37 168.02 16.85 168.02 12.19
LSBX Lawrence Savings Bank of MA* 0.30 328.94 2.29 9.19 172.75 15.02 172.75 9.33
LFED Leeds FSB, MHC of MD (36.3) 0.02 977.36 0.30 NM 229.17 37.08 229.17 NM
LXMO Lexington B&L Fin. Corp. of MO 0.48 78.37 0.49 29.09 108.55 30.74 108.55 22.54
LIFB Life Bancorp of Norfolk VA 0.39 166.43 1.48 25.74 163.11 17.20 167.85 21.14
LFBI Little Falls Bancorp of NJ 1.04 33.93 0.82 NM 124.88 16.58 135.22 NM
LOGN Logansport Fin. Corp. of IN 0.61 44.88 0.38 21.45 125.26 24.05 125.26 16.53
LONF London Financial Corp. of OH 0.80 61.11 0.63 NM 103.56 20.36 103.56 20.71
LISB Long Island Bancorp, Inc of NY 1.03 55.02 0.92 NM 210.01 18.89 212.12 27.88
MAFB MAF Bancorp of IL 0.45 120.51 0.71 22.68 206.70 16.29 238.01 16.31
MBLF MBLA Financial Corp. of MO 0.25 109.19 0.50 24.32 122.84 14.92 122.84 19.01
MFBC MFB Corp. of Mishawaka IN 0.08 177.07 0.19 NM 116.41 15.89 116.41 20.12
MLBC ML Bancorp of Villanova PA(8) 0.46 163.34 1.71 20.43 202.66 14.14 206.20 22.56
MSBF MSB Financial Corp. of MI 0.66 61.34 0.44 25.38 162.40 27.59 162.40 20.63
MGNL Magna Bancorp of MS(8) 2.92 26.42 1.11 21.20 284.49 29.09 292.34 19.21
MARN Marion Capital Holdings of IN 0.81 144.01 1.35 19.20 119.91 27.04 119.91 16.06
MRKF Market Fin. Corp. of OH 0.75 12.24 0.20 NM 98.65 34.52 98.65 NM
MFCX Marshalltown Fin. Corp. of IA(8) NA NA 0.19 NM 117.71 18.53 117.71 25.77
MFSL Maryland Fed. Bancorp of MD 0.47 85.38 0.46 22.12 158.84 13.31 160.86 15.29
MASB MassBank Corp. of Reading MA* 0.16 149.80 0.87 15.75 159.61 16.98 159.61 16.60
MFLR Mayflower Co-Op. Bank of MA* 0.96 92.14 1.52 13.85 140.82 13.63 143.23 14.69
MECH Mechanics SB of Hartford CT* 1.13 152.02 2.58 8.97 155.37 15.90 155.37 8.97
MDBK Medford Bank of Medford, MA* 0.37 176.45 1.22 14.49 167.14 15.03 179.38 15.50
MERI Meritrust FSB of Thibodaux LA 0.37 83.87 0.58 21.98 180.64 14.82 180.64 14.11
MWBX MetroWest Bank of MA* 0.91 126.64 1.48 12.73 219.21 16.31 219.21 12.73
MCBS Mid Continent Bancshares of KS(8) 0.15 71.76 0.19 20.19 192.70 18.09 192.70 17.81
MIFC Mid Iowa Financial Corp. of IA 0.02 NA 0.45 13.90 141.00 13.18 141.00 9.87
MCBN Mid-Coast Bancorp of ME 0.73 70.32 0.62 25.47 122.39 10.53 122.39 16.27
MWBI Midwest Bancshares, Inc. of IA 0.77 63.17 0.81 20.30 126.33 8.73 126.33 12.21
MWFD Midwest Fed. Fin. Corp of WI 0.12 658.13 1.05 12.43 198.48 17.49 205.83 16.24
MFFC Milton Fed. Fin. Corp. of OH 0.32 86.42 0.46 NM 123.13 16.18 123.13 25.93
MIVI Miss. View Hold. Co. of MN 0.33 370.39 1.91 27.54 101.06 19.07 101.06 18.47
MBSP Mitchell Bancorp of NC* 2.03 26.19 0.62 NM 112.87 48.94 112.87 28.95
MBBC Monterey Bay Bancorp of CA 0.33 111.47 0.60 NM 126.47 14.33 137.22 NM
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- -------
($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C>
HPBC Home Port Bancorp, Inc. of MA* 0.80 3.37 46.51
HMCI Homecorp, Inc. of Rockford IL 0.00 0.00 0.00
HZFS Horizon Fin'l. Services of IA 0.32 1.65 49.23
HRZB Horizon Financial Corp. of WA* 0.40 2.54 37.38
IBSF IBS Financial Corp. of NJ 0.40 2.41 NM
ISBF ISB Financial Corp. of LA 0.50 1.95 64.94
ITLA Imperial Thrift & Loan of CA* 0.00 0.00 0.00
IFSB Independence FSB of DC 0.22 1.52 NM
INCB Indiana Comm. Bank, SB of IN 0.36 2.12 NM
INBI Industrial Bancorp of OH 0.48 2.87 NM
IWBK Interwest SB of Oak Harbor WA 0.64 1.51 35.16
IPSW Ipswich SB of Ipswich MA* 0.12 0.86 14.29
JXVL Jacksonville Bancorp of TX 0.50 2.95 55.56
JXSB Jcksnville SB,MHC of IL (45.6) 0.40 1.80 NM
JSBA Jefferson Svgs Bancorp of MO 0.40 1.05 57.97
JOAC Joachim Bancorp of MO 0.50 3.33 NM
KSAV KS Bancorp of Kenly NC 0.60 3.24 55.56
KSBK KSB Bancorp of Kingfield ME(8)* 0.08 0.58 7.69
KFBI Klamath First Bancorp of OR 0.30 1.46 54.55
LSBI LSB Fin. Corp. of Lafayette IN 0.34 1.42 22.52
LVSB Lakeview SB of Paterson NJ 0.25 0.67 8.99
LARK Landmark Bancshares of KS 0.40 1.52 35.40
LARL Laurel Capital Group of PA 0.52 2.10 32.30
LSBX Lawrence Savings Bank of MA* 0.00 0.00 0.00
LFED Leeds FSB, MHC of MD (36.3) 0.76 2.51 NM
LXMO Lexington B&L Fin. Corp. of MO 0.30 1.88 54.55
LIFB Life Bancorp of Norfolk VA 0.48 1.85 47.52
LFBI Little Falls Bancorp of NJ 0.20 1.10 68.97
LOGN Logansport Fin. Corp. of IN 0.40 2.52 54.05
LONF London Financial Corp. of OH 0.24 1.59 50.00
LISB Long Island Bancorp, Inc of NY 0.60 1.29 41.67
MAFB MAF Bancorp of IL 0.28 0.82 18.54
MBLF MBLA Financial Corp. of MO 0.40 1.48 36.04
MFBC MFB Corp. of Mishawaka IN 0.32 1.37 41.56
MLBC ML Bancorp of Villanova PA(8) 0.40 1.54 31.50
MSBF MSB Financial Corp. of MI 0.28 1.70 43.08
MGNL Magna Bancorp of MS(8) 0.60 2.10 44.44
MARN Marion Capital Holdings of IN 0.88 3.32 63.77
MRKF Market Fin. Corp. of OH 0.28 1.92 NM
MFCX Marshalltown Fin. Corp. of IA(8) 0.00 0.00 0.00
MFSL Maryland Fed. Bancorp of MD 0.84 1.75 38.71
MASB MassBank Corp. of Reading MA* 0.96 2.23 35.16
MFLR Mayflower Co-Op. Bank of MA* 0.68 3.53 48.92
MECH Mechanics SB of Hartford CT* 0.00 0.00 0.00
MDBK Medford Bank of Medford, MA* 0.72 2.03 29.39
MERI Meritrust FSB of Thibodaux LA 0.70 1.60 35.18
MWBX MetroWest Bank of MA* 0.12 1.81 23.08
MCBS Mid Continent Bancshares of KS(8) 0.40 1.06 21.39
MIFC Mid Iowa Financial Corp. of IA 0.08 0.81 11.27
MCBN Mid-Coast Bancorp of ME 0.52 1.93 49.06
MWBI Midwest Bancshares, Inc. of IA 0.60 1.63 33.15
MWFD Midwest Fed. Fin. Corp of WI 0.34 1.53 18.99
MFFC Milton Fed. Fin. Corp. of OH 0.60 4.29 NM
MIVI Miss. View Hold. Co. of MN 0.16 0.98 27.12
MBSP Mitchell Bancorp of NC* 0.40 2.30 NM
MBBC Monterey Bay Bancorp of CA 0.12 0.66 41.38
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- ------- ------ ------ ------- ------
(%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONT Montgomery Fin. Corp. of IN 17.91 17.91 0.42 2.32 2.12 0.67 3.74
MSBK Mutual SB, FSB of Bay City MI 6.07 6.07 0.11 1.93 1.27 0.04 0.75
NHTB NH Thrift Bancshares of NH 7.65 6.52 0.39 5.25 2.77 0.58 7.77
NSLB NS&L Bancorp of Neosho MO 19.56 19.56 0.49 2.37 2.13 0.77 3.71
NMSB Newmil Bancorp. of CT* 9.81 9.81 0.83 8.14 4.77 0.79 7.78
NASB North American SB of MO 7.68 7.42 1.26 17.18 7.88 1.19 16.18
NBSI North Bancshares of Chicago IL 14.13 14.13 0.49 3.27 2.40 0.68 4.57
FFFD North Central Bancshares of IA 22.67 22.67 1.64 6.41 5.79 1.90 7.41
NBN Northeast Bancorp of ME* 6.95 6.01 0.51 6.99 4.77 0.47 6.47
NEIB Northeast Indiana Bncrp of IN 15.19 15.19 1.04 6.33 5.30 1.22 7.42
NWEQ Northwest Equity Corp. of WI 11.45 11.45 0.78 6.47 5.25 0.98 8.16
NWSB Northwest SB, MHC of PA (30.7) 9.49 8.94 0.69 7.05 2.29 0.98 9.96
NSSY Norwalk Savings Society of CT* 8.06 7.77 0.97 12.53 6.65 1.11 14.29
NSSB Norwich Financial Corp. of CT* 11.17 10.08 1.09 10.08 4.93 1.04 9.58
NTMG Nutmeg FS&LA of CT 5.56 5.56 0.26 4.60 3.18 0.35 6.28
OHSL OHSL Financial Corp. of OH 11.03 11.03 0.61 5.29 4.48 0.85 7.42
OCFC Ocean Fin. Corp. of NJ 16.25 16.25 0.03 0.16 0.12 0.98 5.97
OCN Ocwen Financial Corp. of FL 8.75 8.36 2.81 33.59 6.21 1.69 20.28
OFCP Ottawa Financial Corp. of MI 8.73 7.01 0.48 5.25 3.22 0.78 8.45
PFFB PFF Bancorp of Pomona CA 10.32 10.21 0.16 1.41 1.05 0.46 4.09
PSFI PS Financial of Chicago IL 38.70 38.70 1.94 4.74 4.38 1.96 4.81
PVFC PVF Capital Corp. of OH 7.02 7.02 1.05 15.56 7.09 1.35 20.00
PCCI Pacific Crest Capital of CA* 7.09 7.09 1.04 13.26 6.53 0.97 12.43
PAMM PacificAmerica Money Ctr of CA(8)* 22.42 22.42 5.63 41.65 7.66 5.63 41.65
PALM Palfed, Inc. of Aiken SC(8) 8.24 8.24 0.10 1.29 0.61 0.61 7.54
PBCI Pamrapo Bancorp, Inc. of NJ 12.74 12.64 0.90 6.37 4.96 1.24 8.78
PFED Park Bancorp of Chicago IL 22.53 22.53 0.87 4.19 3.70 1.21 5.81
PVSA Parkvale Financial Corp of PA 7.58 7.53 0.73 9.76 5.33 1.08 14.42
PEEK Peekskill Fin. Corp. of NY 25.73 25.73 0.98 3.54 3.35 1.29 4.65
PFSB PennFed Fin. Services of NJ 7.36 6.15 0.57 7.43 4.69 0.84 10.86
PWBC PennFirst Bancorp of PA 8.08 7.55 0.46 6.31 3.71 0.67 9.12
PWBK Pennwood SB of PA* 17.45 17.45 0.70 4.05 3.30 1.12 6.54
PBKB People's SB of Brockton MA* 5.61 5.37 0.80 14.41 6.61 0.47 8.57
PFDC Peoples Bancorp of Auburn IN 15.21 15.21 1.12 7.33 4.75 1.47 9.59
PBCT Peoples Bank, MHC of CT (40.1)* 8.48 8.47 1.12 13.72 4.40 0.83 10.17
PFFC Peoples Fin. Corp. of OH 27.20 27.20 0.90 3.32 2.79 0.90 3.32
PHBK Peoples Heritage Fin Grp of ME* 7.72 6.51 1.28 15.68 5.49 1.29 15.88
PSFC Peoples Sidney Fin. Corp of OH 23.26 23.26 0.92 3.97 3.29 1.21 5.18
PERM Permanent Bancorp of IN 9.16 9.03 0.34 3.64 3.06 0.62 6.57
PMFI Perpetual Midwest Fin. of IA 8.53 8.53 0.12 1.38 1.12 0.29 3.36
PERT Perpetual of SC, MHC (46.8)(8) 11.82 11.82 0.67 5.44 1.77 0.94 7.68
PCBC Perry Co. Fin. Corp. of MO 19.19 19.19 0.93 4.93 4.31 1.07 5.70
PHFC Pittsburgh Home Fin. of PA 10.92 10.80 0.62 4.71 3.58 0.79 6.00
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 6.36 6.36 0.60 9.75 3.97 0.84 13.54
PTRS Potters Financial Corp of OH 8.83 8.83 0.48 5.37 4.59 0.85 9.54
PKPS Poughkeepsie Fin. Corp. of NY 8.37 8.37 0.35 4.21 3.05 0.54 6.49
PHSB Ppls Home SB, MHC of PA (45.0) 17.31 17.31 0.39 2.23 1.97 0.81 4.67
PRBC Prestige Bancorp of PA 11.13 11.13 0.37 2.84 2.67 0.65 5.01
PETE Primary Bank of NH(8)* 6.93 6.92 0.61 9.35 4.70 0.73 11.09
PFNC Progress Financial Corp. of PA 5.27 4.65 0.54 10.19 3.77 0.65 12.26
PSBK Progressive Bank, Inc. of NY* 8.55 7.64 0.99 12.02 7.02 0.98 11.81
PROV Provident Fin. Holdings of CA 13.88 13.88 0.32 2.24 1.97 0.28 1.95
PULB Pulaski SB, MHC of MO (29.8) 13.00 13.00 0.69 5.42 2.17 0.96 7.53
PLSK Pulaski SB, MHC of NJ (46.0) 11.90 11.90 0.25 2.97 1.25 0.61 7.21
PULS Pulse Bancorp of S. River NJ 8.05 8.05 0.72 9.24 5.22 1.08 13.86
QCFB QCF Bancorp of Virginia MN 18.09 18.09 1.36 7.11 5.64 1.36 7.11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- ------- ------ ------ -------- ----- ------ ---- --------
(%) (%) (%) (X) (%) (%) (%) (x)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONT Montgomery Fin. Corp. of IN 0.91 20.00 0.20 NM 109.18 19.56 109.18 29.17
MSBK Mutual SB, FSB of Bay City MI 0.11 272.91 0.67 NM 147.54 8.96 147.54 NM
NHTB NH Thrift Bancshares of NH 0.70 125.20 1.05 NM 165.53 12.67 194.42 24.38
NSLB NS&L Bancorp of Neosho MO 0.03 210.00 0.13 NM 116.53 22.79 116.53 NM
NMSB Newmil Bancorp. of CT* 1.11 152.08 3.18 20.96 172.31 16.91 172.31 21.92
NASB North American SB of MO 3.11 27.16 0.98 12.68 204.97 15.74 212.07 13.47
NBSI North Bancshares of Chicago IL NA NA 0.27 NM 142.30 20.11 142.30 29.78
FFFD North Central Bancshares of IA 0.12 814.90 1.19 17.27 118.97 26.97 118.97 14.93
NBN Northeast Bancorp of ME* 1.37 77.15 1.32 20.97 144.55 10.04 167.24 22.67
NEIB Northeast Indiana Bncrp of IN 0.40 159.54 0.71 18.88 121.79 18.50 121.79 16.09
NWEQ Northwest Equity Corp. of WI 1.26 38.04 0.59 19.03 126.70 14.50 126.70 15.09
NWSB Northwest SB, MHC of PA (30.7) 0.72 90.87 0.88 NM 298.82 28.36 NM NM
NSSY Norwalk Savings Society of CT* NA NA 1.54 15.03 176.21 14.20 182.76 13.18
NSSB Norwich Financial Corp. of CT* 1.29 151.12 2.83 20.29 195.99 21.88 217.11 21.34
NTMG Nutmeg FS&LA of CT 1.19 40.69 0.55 NM 134.33 7.47 134.33 23.04
OHSL OHSL Financial Corp. of OH 0.14 161.25 0.31 22.32 117.87 13.00 117.87 15.92
OCFC Ocean Fin. Corp. of NJ 0.55 79.68 0.87 NM 126.58 20.57 126.58 23.23
OCN Ocwen Financial Corp. of FL 5.11 17.43 1.34 16.11 NM 41.05 NM 26.68
OFCP Ottawa Financial Corp. of MI 0.32 112.76 0.42 NM 166.56 14.54 207.49 19.32
PFFB PFF Bancorp of Pomona CA 1.73 60.66 1.46 NM 137.84 14.22 139.28 NM
PSFI PS Financial of Chicago IL 0.79 28.66 0.51 22.86 109.14 42.24 109.14 22.54
PVFC PVF Capital Corp. of OH 1.24 57.99 0.78 14.11 201.74 14.17 201.74 10.97
PCCI Pacific Crest Capital of CA* 1.29 79.26 1.67 15.32 189.94 13.46 189.94 16.35
PAMM PacificAmerica Money Ctr of CA(8)* 4.97 27.75 2.22 13.05 NM 80.32 NM 13.05
PALM Palfed, Inc. of Aiken SC(8) 2.12 51.22 1.32 NM 204.92 16.89 204.92 27.96
PBCI Pamrapo Bancorp, Inc. of NJ 2.77 26.10 1.29 20.15 140.61 17.91 141.72 14.61
PFED Park Bancorp of Chicago IL 0.21 134.41 0.73 27.02 102.95 23.19 102.95 19.48
PVSA Parkvale Financial Corp of PA 0.27 537.53 1.97 18.75 173.95 13.19 175.27 12.70
PEEK Peekskill Fin. Corp. of NY 1.22 27.98 1.35 29.82 115.57 29.73 115.57 22.67
PFSB PennFed Fin. Services of NJ 0.59 33.53 0.28 21.33 151.21 11.13 180.79 14.59
PWBC PennFirst Bancorp of PA 0.65 93.15 1.49 26.98 136.66 11.04 146.17 18.68
PWBK Pennwood SB of PA* 0.98 57.43 1.03 NM 114.69 20.02 114.69 18.75
PBKB People's SB of Brockton MA* 0.82 91.19 1.57 15.14 205.14 11.50 214.15 25.45
PFDC Peoples Bancorp of Auburn IN 0.36 83.87 0.38 21.04 152.11 23.13 152.11 16.07
PBCT Peoples Bank, MHC of CT (40.1)* 0.90 121.39 1.60 22.75 289.30 24.53 289.56 NM
PFFC Peoples Fin. Corp. of OH NA NA 0.39 NM 120.41 32.75 120.41 NM
PHBK Peoples Heritage Fin Grp of ME* 0.91 126.66 1.66 18.22 272.67 21.05 NM 17.99
PSFC Peoples Sidney Fin. Corp of OH 1.00 42.00 0.45 NM 120.65 28.07 120.65 23.29
PERM Permanent Bancorp of IN 1.09 45.43 0.99 NM 119.05 10.91 120.82 18.08
PMFI Perpetual Midwest Fin. of IA 0.40 185.58 0.95 NM 124.28 10.60 124.28 NM
PERT Perpetual of SC, MHC (46.8)(8) 0.12 502.32 0.87 NM 280.68 33.19 280.68 NM
PCBC Perry Co. Fin. Corp. of MO NA NA 0.19 23.19 111.01 21.31 111.01 20.07
PHFC Pittsburgh Home Fin. of PA 1.60 32.18 0.76 27.90 135.47 14.79 136.91 21.88
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 0.15 308.72 1.12 25.18 237.13 15.08 237.13 18.13
PTRS Potters Financial Corp of OH 0.50 350.66 2.78 21.77 114.93 10.15 114.93 12.26
PKPS Poughkeepsie Fin. Corp. of NY 4.28 25.28 1.45 NM 134.53 11.26 134.53 21.27
PHSB Ppls Home SB, MHC of PA (45.0) NA NA 1.40 NM 113.16 19.59 113.16 24.25
PRBC Prestige Bancorp of PA 0.30 85.33 0.38 NM 106.72 11.88 106.72 21.23
PETE Primary Bank of NH(8)* 0.82 75.47 1.08 21.27 184.02 12.76 184.28 17.94
PFNC Progress Financial Corp. of PA 1.46 51.92 1.08 26.50 247.58 13.04 280.59 22.02
PSBK Progressive Bank, Inc. of NY* 0.85 131.46 1.65 14.24 166.50 14.24 186.40 14.49
PROV Provident Fin. Holdings of CA NA NA 1.31 NM 113.70 15.79 113.70 NM
PULB Pulaski SB, MHC of MO (29.8) NA NA 0.33 NM 246.83 32.09 246.83 NM
PLSK Pulaski SB, MHC of NJ (46.0) 0.65 71.47 0.81 NM 164.22 19.55 164.22 NM
PULS Pulse Bancorp of S. River NJ 0.69 65.20 1.93 19.17 168.75 13.58 168.75 12.78
QCFB QCF Bancorp of Virginia MN 0.17 499.62 2.10 17.73 131.72 23.83 131.72 17.73
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- ------
($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C>
MONT Montgomery Fin. Corp. of IN 0.00 0.00 0.00
MSBK Mutual SB, FSB of Bay City MI 0.00 0.00 0.00
NHTB NH Thrift Bancshares of NH 0.50 2.56 NM
NSLB NS&L Bancorp of Neosho MO 0.50 2.60 NM
NMSB Newmil Bancorp. of CT* 0.24 1.68 35.29
NASB North American SB of MO 0.80 1.54 19.51
NBSI North Bancshares of Chicago IL 0.48 1.99 NM
FFFD North Central Bancshares of IA 0.25 1.42 24.51
NBN Northeast Bancorp of ME* 0.32 1.64 34.41
NEIB Northeast Indiana Bncrp of IN 0.32 1.73 32.65
NWEQ Northwest Equity Corp. of WI 0.52 3.10 59.09
NWSB Northwest SB, MHC of PA (30.7) 0.32 1.26 55.17
NSSY Norwalk Savings Society of CT* 0.40 1.10 16.53
NSSB Norwich Financial Corp. of CT* 0.56 1.94 39.44
NTMG Nutmeg FS&LA of CT 0.00 0.00 0.00
OHSL OHSL Financial Corp. of OH 0.88 3.52 NM
OCFC Ocean Fin. Corp. of NJ 0.80 2.31 NM
OCN Ocwen Financial Corp. of FL 0.00 0.00 0.00
OFCP Ottawa Financial Corp. of MI 0.36 1.41 43.90
PFFB PFF Bancorp of Pomona CA 0.00 0.00 0.00
PSFI PS Financial of Chicago IL 0.32 2.00 45.71
PVFC PVF Capital Corp. of OH 0.00 0.00 0.00
PCCI Pacific Crest Capital of CA* 0.00 0.00 0.00
PAMM PacificAmerica Money Ctr of CA(8)* 0.00 0.00 0.00
PALM Palfed, Inc. of Aiken SC(8) 0.12 0.56 NM
PBCI Pamrapo Bancorp, Inc. of NJ 1.00 4.28 NM
PFED Park Bancorp of Chicago IL 0.00 0.00 0.00
PVSA Parkvale Financial Corp of PA 0.65 2.02 37.79
PEEK Peekskill Fin. Corp. of NY 0.36 2.12 63.16
PFSB PennFed Fin. Services of NJ 0.28 0.92 19.58
PWBC PennFirst Bancorp of PA 0.33 1.94 52.38
PWBK Pennwood SB of PA* 0.32 1.86 56.14
PBKB People's SB of Brockton MA* 0.44 2.51 37.93
PFDC Peoples Bancorp of Auburn IN 0.64 2.19 46.04
PBCT Peoples Bank, MHC of CT (40.1)* 0.68 2.15 48.92
PFFC Peoples Fin. Corp. of OH 0.50 2.63 NM
PHBK Peoples Heritage Fin Grp of ME* 0.76 1.77 32.20
PSFC Peoples Sidney Fin. Corp of OH 0.20 1.18 35.71
PERM Permanent Bancorp of IN 0.40 1.70 55.56
PMFI Perpetual Midwest Fin. of IA 0.30 1.34 NM
PERT Perpetual of SC, MHC (46.8)(8) 1.40 2.48 NM
PCBC Perry Co. Fin. Corp. of MO 0.40 1.92 44.44
PHFC Pittsburgh Home Fin. of PA 0.24 1.25 34.78
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 0.90 2.57 64.75
PTRS Potters Financial Corp of OH 0.36 1.43 31.03
PKPS Poughkeepsie Fin. Corp. of NY 0.10 1.27 41.67
PHSB Ppls Home SB, MHC of PA (45.0) 0.00 0.00 0.00
PRBC Prestige Bancorp of PA 0.12 0.68 25.53
PETE Primary Bank of NH(8)* 0.00 0.00 0.00
PFNC Progress Financial Corp. of PA 0.11 0.77 20.37
PSBK Progressive Bank, Inc. of NY* 0.68 2.08 29.57
PROV Provident Fin. Holdings of CA 0.00 0.00 0.00
PULB Pulaski SB, MHC of MO (29.8) 1.10 4.04 NM
PLSK Pulaski SB, MHC of NJ (46.0) 0.30 1.79 NM
PULS Pulse Bancorp of S. River NJ 0.70 3.04 58.33
QCFB QCF Bancorp of Virginia MN 0.00 0.00 0.00
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
--------------------- ------- ------- ------- ------ ------ ------- ------
(%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
QCBC Quaker City Bancorp of CA 8.77 8.76 0.37 4.12 2.68 0.60 6.74
QCSB Queens County Bancorp of NY* 11.85 11.85 1.60 10.80 4.11 1.63 10.95
RCSB RCSB Financial, Inc. of NY(8)* 7.85 7.65 0.95 12.54 4.97 0.94 12.40
RARB Raritan Bancorp. of Raritan NJ* 7.93 7.80 0.96 12.55 6.56 1.02 13.33
REDF RedFed Bancorp of Redlands CA 8.45 8.42 0.25 3.24 1.77 0.65 8.37
RELY Reliance Bancorp, Inc. of NY 8.23 5.93 0.58 7.07 3.89 0.86 10.46
RELI Reliance Bancshares Inc of WI(8)* 48.82 48.82 0.86 1.78 1.88 0.92 1.89
RIVR River Valley Bancorp of IN 12.40 12.21 0.46 4.24 2.75 0.62 5.72
RSLN Roslyn Bancorp, Inc. of NY* 20.14 20.04 0.86 4.12 2.62 1.35 6.49
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 11.24 10.26 0.96 8.70 2.97 1.20 10.87
SCCB S. Carolina Comm. Bnshrs of SC 25.95 25.95 0.82 2.99 2.34 1.10 4.03
SBFL SB Fngr Lakes MHC of NY (33.1) 9.58 9.58 0.13 1.32 0.62 0.44 4.49
SFED SFS Bancorp of Schenectady NY 12.47 12.47 0.44 3.41 2.73 0.79 6.09
SGVB SGV Bancorp of W. Covina CA 7.31 7.19 0.20 2.37 1.82 0.47 5.74
SISB SIS Bancorp Inc of MA* 7.20 7.20 1.38 18.82 9.77 1.37 18.70
SWCB Sandwich Co-Op. Bank of MA* 7.95 7.61 0.95 11.65 6.12 0.97 11.90
SECP Security Capital Corp. of WI(8) 16.20 16.20 1.25 7.87 4.35 1.50 9.38
SFSL Security First Corp. of OH 9.43 9.26 1.07 11.49 4.82 1.34 14.36
SFNB Security First Netwrk Bk of GA(8) 33.11 32.57 -29.36 NM -28.09 -30.07 NM
SMFC Sho-Me Fin. Corp. of MO(8) 9.03 9.03 1.04 10.44 5.03 1.17 11.79
SOBI Sobieski Bancorp of S. Bend IN 15.12 15.12 0.31 1.87 1.94 0.59 3.56
SOSA Somerset Savings Bank of MA(8)* 6.34 6.34 0.81 13.81 6.25 0.78 13.26
SSFC South Street Fin. Corp. of NC* 25.26 25.26 0.92 4.51 2.38 1.17 5.71
SCBS Southern Commun. Bncshrs of AL 21.96 21.96 0.32 2.52 1.16 0.79 6.23
SMBC Southern Missouri Bncrp of MO 15.67 15.67 0.71 4.42 3.92 0.70 4.35
SWBI Southwest Bancshares of IL 11.00 11.00 0.75 6.94 5.12 1.02 9.52
SVRN Sovereign Bancorp of PA 4.01 3.03 0.44 11.07 3.88 0.68 17.14
STFR St. Francis Cap. Corp. of WI 7.88 6.96 0.64 7.35 4.72 0.70 8.09
SPBC St. Paul Bancorp, Inc. of IL 8.60 8.58 0.72 8.22 3.80 1.03 11.84
SFFC StateFed Financial Corp. of IA 17.78 17.78 1.11 6.16 5.29 1.35 7.47
SFIN Statewide Fin. Corp. of NJ 9.73 9.71 0.54 5.46 3.69 0.91 9.26
STSA Sterling Financial Corp. of WA 4.10 3.57 0.10 2.46 1.45 0.32 7.91
SFSB SuburbFed Fin. Corp. of IL 6.48 6.46 0.39 5.87 4.32 0.56 8.55
ROSE T R Financial Corp. of NY* 6.20 6.20 0.98 15.73 6.13 0.89 14.19
THRD TF Financial Corp. of PA 11.11 9.75 0.55 4.76 3.93 0.74 6.40
TPNZ Tappan Zee Fin., Inc. of NY 17.92 17.92 0.70 4.22 2.94 0.65 3.90
ESBK The Elmira SB FSB of Elmira NY* 6.30 6.04 0.36 5.66 3.93 0.35 5.51
GRTR The Greater New York SB of NY(8)* 6.27 6.27 0.74 12.34 5.95 0.40 6.62
TSBS Trenton SB,FSB MHC of NJ(35.9)(8) 16.89 15.48 1.34 7.53 2.88 1.14 6.39
TRIC Tri-County Bancorp of WY 15.32 15.32 0.80 5.14 4.84 1.02 6.55
TWIN Twin City Bancorp of TN 12.86 12.86 0.53 4.13 4.85 0.75 5.82
UFRM United FS&LA of Rocky Mount NC 7.48 7.48 0.22 2.87 1.55 0.38 4.98
UBMT United Fin. Corp. of MT 22.65 22.65 1.09 4.70 3.96 1.34 5.80
VABF Va. Beach Fed. Fin. Corp of VA 6.85 6.85 0.21 3.15 1.68 0.47 7.02
VFFC Virginia First Savings of VA(8) 8.06 7.78 1.36 17.14 7.58 1.25 15.72
WHGB WHG Bancshares of MD 20.65 20.65 0.51 2.23 2.18 0.85 3.75
WSFS WSFS Financial Corp. of DE* 5.20 5.16 1.31 23.71 8.98 1.32 23.87
WVFC WVS Financial Corp. of PA* 11.16 11.16 1.07 8.59 5.98 1.34 10.72
WRNB Warren Bancorp of Peabody MA* 10.37 10.37 2.13 22.09 10.72 1.81 18.79
WFSL Washington FS&LA of Seattle WA 12.08 11.03 1.67 14.37 6.78 1.84 15.85
WAMU Washington Mutual Inc. of WA(8)* 5.00 4.75 0.35 6.81 1.65 0.74 14.45
WYNE Wayne Bancorp of NJ 13.35 13.35 0.44 2.94 2.02 0.44 2.94
WAYN Wayne S&L Co. MHC of OH (47.8) 9.25 9.25 0.31 3.42 1.50 0.66 7.23
WCFB Wbstr Cty FSB MHC of IA (45.2) 23.35 23.35 1.06 4.61 2.67 1.42 6.15
WBST Webster Financial Corp. of CT 5.02 4.29 0.41 8.14 2.75 0.74 14.55
WEFC Wells Fin. Corp. of Wells MN 14.20 14.20 0.72 5.07 4.29 1.06 7.49
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- ---------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
--------------------- -------- ------ ------ -------- ------ ------ ------ --------
(%) (%) (%) (X) (%) (%) (%) (x)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
QCBC Quaker City Bancorp of CA 1.31 74.10 1.19 NM 149.73 13.13 149.83 22.83
QCSB Queens County Bancorp of NY* 0.68 95.23 0.74 24.36 NM 36.35 NM 24.02
RCSB RCSB Financial, Inc. of NY(8)* 0.76 83.90 1.18 20.13 244.95 19.22 251.32 20.36
RARB Raritan Bancorp. of Raritan NJ* 0.29 297.45 1.29 15.24 178.29 14.14 181.34 14.35
REDF RedFed Bancorp of Redlands CA 2.19 45.70 1.15 NM 162.79 13.76 163.40 21.88
RELY Reliance Bancorp, Inc. of NY 0.79 33.33 0.57 25.70 173.25 14.26 240.42 17.36
RELI Reliance Bancshares Inc of WI(8)* NA NA 0.53 NM 93.61 45.70 93.61 NM
RIVR River Valley Bancorp of IN 0.49 170.62 1.03 NM 114.49 14.19 116.24 27.02
RSLN Roslyn Bancorp, Inc. of NY* 0.27 278.21 3.46 NM 154.32 31.08 155.07 24.19
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 0.14 278.46 0.56 NM 277.60 31.20 NM 26.93
SCCB S. Carolina Comm. Bnshrs of SC 1.78 35.52 0.81 NM 130.04 33.75 130.04 NM
SBFL SB Fngr Lakes MHC of NY (33.1) 0.69 76.89 1.16 NM 208.51 19.98 208.51 NM
SFED SFS Bancorp of Schenectady NY 0.73 57.17 0.57 NM 126.15 15.73 126.15 20.56
SGVB SGV Bancorp of W. Covina CA NA NA 0.44 NM 133.12 9.73 135.35 22.67
SISB SIS Bancorp Inc of MA* 0.47 244.29 2.48 10.23 182.88 13.17 182.88 10.29
SWCB Sandwich Co-Op. Bank of MA* 0.83 92.55 1.09 16.35 183.63 14.59 191.83 16.00
SECP Security Capital Corp. of WI(8) 0.12 918.65 1.44 23.00 173.71 28.14 173.71 19.29
SFSL Security First Corp. of OH 0.28 273.91 0.85 20.74 224.48 21.16 228.41 16.59
SFNB Security First Netwrk Bk of GA(8) NA NA 1.28 NM NM 128.84 NM NM
SMFC Sho-Me Fin. Corp. of MO(8) 0.14 425.11 0.66 19.89 208.83 18.86 208.83 17.60
SOBI Sobieski Bancorp of S. Bend IN 0.15 158.73 0.33 NM 103.45 15.64 103.45 27.05
SOSA Somerset Savings Bank of MA(8)* 6.28 22.01 1.81 16.00 204.08 12.94 204.08 16.67
SSFC South Street Fin. Corp. of NC* 0.27 65.44 0.39 NM 138.95 35.09 138.95 NM
SCBS Southern Commun. Bncshrs of AL 2.48 46.17 1.94 NM 120.90 26.55 120.90 NM
SMBC Southern Missouri Bncrp of MO 1.10 37.60 0.64 25.53 112.74 17.67 112.74 25.90
SWBI Southwest Bancshares of IL 0.30 67.34 0.28 19.52 130.66 14.37 130.66 14.24
SVRN Sovereign Bancorp of PA 0.57 78.85 0.72 25.81 256.00 10.28 NM 16.67
STFR St. Francis Cap. Corp. of WI 0.19 181.58 0.80 21.19 153.50 12.10 173.69 19.23
SPBC St. Paul Bancorp, Inc. of IL 0.32 232.75 1.09 26.34 209.94 18.06 210.48 18.28
SFFC StateFed Financial Corp. of IA NA NA NA 18.91 113.84 20.24 113.84 15.58
SFIN Statewide Fin. Corp. of NJ 0.43 95.58 0.83 27.13 148.35 14.43 148.56 15.98
STSA Sterling Financial Corp. of WA 0.61 79.43 0.82 NM 156.08 6.39 179.02 21.52
SFSB SuburbFed Fin. Corp. of IL 0.48 41.27 0.31 23.17 130.02 8.43 130.49 15.92
ROSE T R Financial Corp. of NY* 0.46 90.99 0.80 16.30 238.47 14.80 238.47 18.07
THRD TF Financial Corp. of PA 0.33 92.84 0.62 25.44 122.53 13.62 139.67 18.91
TPNZ Tappan Zee Fin., Inc. of NY 1.73 31.27 1.18 NM 125.44 22.48 125.44 NM
ESBK The Elmira SB FSB of Elmira NY* 0.66 97.39 0.85 25.44 141.49 8.91 147.59 26.14
GRTR The Greater New York SB of NY(8)* NA NA 1.71 16.80 197.36 12.37 197.36 NM
TSBS Trenton SB,FSB MHC of NJ(35.9)(8) 0.73 55.92 0.67 NM 253.35 42.78 276.32 NM
TRIC Tri-County Bancorp of WY NA NA 1.11 20.68 101.11 15.49 101.11 16.25
TWIN Twin City Bancorp of TN 0.16 130.95 0.29 20.64 84.18 10.82 84.18 14.65
UFRM United FS&LA of Rocky Mount NC 0.58 135.44 0.98 NM 182.84 13.67 182.84 NM
UBMT United Fin. Corp. of MT NA NA 0.22 25.27 119.05 26.96 119.05 20.47
VABF Va. Beach Fed. Fin. Corp of VA 1.26 56.59 0.93 NM 182.35 12.48 182.35 26.72
VFFC Virginia First Savings of VA(8) 2.29 47.29 1.19 13.19 210.31 16.95 217.79 14.38
WHGB WHG Bancshares of MD 0.15 160.96 0.29 NM 110.38 22.80 110.38 27.42
WSFS WSFS Financial Corp. of DE* 1.70 96.79 2.65 11.14 259.02 13.48 261.08 11.06
WVFC WVS Financial Corp. of PA* 0.30 230.13 1.25 16.72 150.03 16.75 150.03 13.39
WRNB Warren Bancorp of Peabody MA* 1.15 98.45 1.79 9.33 190.94 19.80 190.94 10.96
WFSL Washington FS&LA of Seattle WA 0.73 59.65 0.60 14.75 195.23 23.58 213.74 13.37
WAMU Washington Mutual Inc. of WA(8)* 0.81 93.26 1.12 NM NM 17.88 NM 28.51
WYNE Wayne Bancorp of NJ 0.91 83.50 1.15 NM 150.55 20.10 150.55 NM
WAYN Wayne S&L Co. MHC of OH (47.8) 0.73 50.94 0.45 NM 222.85 20.61 222.85 NM
WCFB Wbstr Cty FSB MHC of IA (45.2) 0.26 152.85 0.69 NM 170.94 39.92 170.94 28.13
WBST Webster Financial Corp. of CT 0.85 103.47 1.45 NM 233.84 11.75 273.73 20.37
WEFC Wells Fin. Corp. of Wells MN 0.28 121.72 0.37 23.29 116.12 16.48 116.12 15.74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dividend Data(6)
-----------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
--------------------- ------- ------- -------
($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C>
QCBC Quaker City Bancorp of CA 0.00 0.00 0.00
QCSB Queens County Bancorp of NY* 1.00 1.91 46.51
RCSB RCSB Financial, Inc. of NY(8)* 0.60 1.13 22.73
RARB Raritan Bancorp. of Raritan NJ* 0.48 2.16 32.88
REDF RedFed Bancorp of Redlands CA 0.00 0.00 0.00
RELY Reliance Bancorp, Inc. of NY 0.64 1.99 51.20
RELI Reliance Bancshares Inc of WI(8)* 0.00 0.00 0.00
RIVR River Valley Bancorp of IN 0.16 0.96 34.78
RSLN Roslyn Bancorp, Inc. of NY* 0.24 1.07 40.68
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 0.24 0.81 27.27
SCCB S. Carolina Comm. Bnshrs of SC 0.60 2.70 NM
SBFL SB Fngr Lakes MHC of NY (33.1) 0.40 1.65 NM
SFED SFS Bancorp of Schenectady NY 0.28 1.27 46.67
SGVB SGV Bancorp of W. Covina CA 0.00 0.00 0.00
SISB SIS Bancorp Inc of MA* 0.56 1.65 16.92
SWCB Sandwich Co-Op. Bank of MA* 1.20 3.14 51.28
SECP Security Capital Corp. of WI(8) 1.20 1.07 24.59
SFSL Security First Corp. of OH 0.32 1.75 36.36
SFNB Security First Netwrk Bk of GA(8) 0.00 0.00 NM
SMFC Sho-Me Fin. Corp. of MO(8) 0.00 0.00 0.00
SOBI Sobieski Bancorp of S. Bend IN 0.32 1.94 NM
SOSA Somerset Savings Bank of MA(8)* 0.00 0.00 0.00
SSFC South Street Fin. Corp. of NC* 0.40 2.12 NM
SCBS Southern Commun. Bncshrs of AL 0.30 1.83 NM
SMBC Southern Missouri Bncrp of MO 0.50 2.80 71.43
SWBI Southwest Bancshares of IL 0.76 3.71 72.38
SVRN Sovereign Bancorp of PA 0.08 0.50 12.90
STFR St. Francis Cap. Corp. of WI 0.48 1.28 27.12
SPBC St. Paul Bancorp, Inc. of IL 0.40 1.63 43.01
SFFC StateFed Financial Corp. of IA 0.40 1.81 34.19
SFIN Statewide Fin. Corp. of NJ 0.44 2.13 57.89
STSA Sterling Financial Corp. of WA 0.00 0.00 0.00
SFSB SuburbFed Fin. Corp. of IL 0.32 1.12 26.02
ROSE T R Financial Corp. of NY* 0.60 2.00 32.61
THRD TF Financial Corp. of PA 0.40 1.87 47.62
TPNZ Tappan Zee Fin., Inc. of NY 0.28 1.56 52.83
ESBK The Elmira SB FSB of Elmira NY* 0.64 2.23 56.64
GRTR The Greater New York SB of NY(8)* 0.20 0.86 14.49
TSBS Trenton SB,FSB MHC of NJ(35.9)(8) 0.35 1.17 40.70
TRIC Tri-County Bancorp of WY 0.60 2.64 54.55
TWIN Twin City Bancorp of TN 0.43 3.16 65.15
UFRM United FS&LA of Rocky Mount NC 0.24 1.96 NM
UBMT United Fin. Corp. of MT 0.98 4.13 NM
VABF Va. Beach Fed. Fin. Corp of VA 0.20 1.29 NM
VFFC Virginia First Savings of VA(8) 0.10 0.42 5.52
WHGB WHG Bancshares of MD 0.20 1.28 58.82
WSFS WSFS Financial Corp. of DE* 0.00 0.00 0.00
WVFC WVS Financial Corp. of PA* 0.80 2.83 47.34
WRNB Warren Bancorp of Peabody MA* 0.52 2.77 25.87
WFSL Washington FS&LA of Seattle WA 0.92 3.21 47.42
WAMU Washington Mutual Inc. of WA(8)* 1.08 1.57 NM
WYNE Wayne Bancorp of NJ 0.20 0.81 40.00
WAYN Wayne S&L Co. MHC of OH (47.8) 0.62 2.66 NM
WCFB Wbstr Cty FSB MHC of IA (45.2) 0.80 4.44 NM
WBST Webster Financial Corp. of CT 0.80 1.37 50.00
WEFC Wells Fin. Corp. of Wells MN 0.48 2.82 65.75
</TABLE>
<PAGE>
RP FINANCIAL, LC.
---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of September 19, 1997
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- --------------- NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
--------------------- ------- ------- ------- ------ ------ ------- ------- ------- ------- -----
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WCBI WestCo Bancorp of IL 15.24 15.24 1.12 7.29 5.30 1.42 9.20 0.60 47.07 0.38
WSTR WesterFed Fin. Corp. of MT 10.91 8.73 0.63 5.09 3.07 0.79 6.41 0.25 191.01 0.73
WOFC Western Ohio Fin. Corp. of OH 13.79 12.85 0.33 2.24 1.99 0.45 3.10 NA NA 0.58
WWFC Westwood Fin. Corp. of NJ(8) 9.13 8.13 0.49 5.12 2.84 0.85 8.80 0.13 159.15 0.55
WEHO Westwood Hmstd Fin Corp of OH 29.41 29.41 0.70 2.41 1.98 1.04 3.62 0.06 255.81 0.21
WFI Winton Financial Corp. of OH 7.11 6.96 1.00 14.08 9.93 0.84 11.80 0.35 78.21 0.32
FFWD Wood Bancorp of OH 12.31 12.31 1.07 8.25 4.65 1.27 9.81 0.24 143.64 0.44
YFCB Yonkers Fin. Corp. of NY 14.90 14.90 0.86 5.06 3.95 1.16 6.79 0.57 65.11 1.02
YFED York Financial Corp. of PA 8.61 8.61 0.62 7.41 4.14 0.79 9.46 2.39 23.05 0.64
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
--------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
--------------------- -------- ------ -------- ------ ------- ------- ------ -------
(X) (%) (%) (%) (x) ($) (%) (%)
NASDAQ Listed OTC Companies (continued)
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WCBI WestCo Bancorp of IL 18.88 138.79 21.15 138.79 14.96 0.60 2.25 42.55
WSTR WesterFed Fin. Corp. of MT NM 140.79 15.36 175.92 25.85 0.44 1.67 54.32
WOFC Western Ohio Fin. Corp. of OH NM 112.02 15.45 120.19 NM 1.00 3.82 NM
WWFC Westwood Fin. Corp. of NJ(8) NM 174.11 15.89 195.44 20.48 0.20 0.73 25.64
WEHO Westwood Hmstd Fin Corp of OH NM 106.70 31.38 106.70 NM 0.28 1.85 NM
WFI Winton Financial Corp. of OH 10.08 141.90 10.09 144.96 12.03 0.46 2.85 28.75
FFWD Wood Bancorp of OH 21.52 178.57 21.98 178.57 18.09 0.40 2.35 50.63
YFCB Yonkers Fin. Corp. of NY 25.33 136.14 20.29 136.14 18.87 0.24 1.25 31.58
YFED York Financial Corp. of PA 24.13 170.66 14.69 170.66 18.89 0.60 2.46 59.41
</TABLE>
<PAGE>
Exhibit IV-2
Historical Stock Price Indices(1)
<TABLE>
<CAPTION>
SNL SNL
NASDAQ Thrift Bank
Year/Qtr. Ended DJIA S&P 500 Composite Index Index
- --------------- ---- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1991: Quarter 1 2881.1 375.2 482.3 125.5 66.0
Quarter 2 2957.7 371.2 475.9 130.5 82.0
Quarter 3 3018.2 387.9 526.9 141.8 90.7
Quarter 4 3168.0 417.1 586.3 144.7 103.1
1992: Quarter 1 3235.5 403.7 603.8 157.0 113.3
Quarter 2 3318.5 408.1 563.6 173.3 119.7
Quarter 3 3271.7 417.8 583.3 167.0 117.1
Quarter 4 3301.1 435.7 677.0 201.1 136.7
1993: Quarter 1 3435.1 451.7 690.1 228.2 151.4
Quarter 2 3516.1 450.5 704.0 219.8 147.0
Quarter 3 3555.1 458.9 762.8 258.4 154.3
Quarter 4 3754.1 466.5 776.8 252.5 146.2
1994: Quarter 1 3625.1 445.8 743.5 241.6 143.1
Quarter 2 3625.0 444.3 706.0 269.6 152.6
Quarter 3 3843.2 462.6 764.3 279.7 149.2
Quarter 4 3834.4 459.3 752.0 244.7 137.6
1995: Quarter 1 4157.7 500.7 817.2 278.4 152.1
Quarter 2 4556.1 544.8 933.5 313.5 171.7
Quarter 3 4789.1 584.4 1,043.5 362.3 195.3
Quarter 4 5117.1 615.9 1,052.1 376.5 207.6
1996: Quarter 1 5587.1 645.5 1,101.4 382.1 225.1
Quarter 2 5654.6 670.6 1,185.0 387.2 224.7
Quarter 3 5882.2 687.3 1,226.9 429.3 249.2
Quarter 4 6442.5 737.0 1,280.7 483.6 280.1
1997: Quarter 1 6583.5 757.1 1,221.7 527.7 292.5
Quarter 2 7672.8 885.1 1,442.1 624.5 333.3
September 19, 1997 7917.3 950.5 1,680.4 725.8 380.8
</TABLE>
(1) End of period data.
Sources: SNL Securities; Wall Street Journal.
<PAGE>
EXHIBIT IV-3
Historical Thrift Stock Indices
ThriftINVESTOR
Index Values
<TABLE>
<CAPTION>
Index Values Percent Change Since
----------------------------------------- ----------------------------
08/29/97 1 Month YTM LTM 1 Month YTD LTM
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
All Pub. Traded Thrifts 664.6 684.5 483.6 408.3 -2.90 37.43 62.77
MHC Index 851.7 751.0 538.0 423.3 13.40 58.29 101.19
Insurance Indices
- --------------------------------------------------------------------------------------------------------------------------
SAIF Thrifts 609.2 608.2 439.2 373.1 0.16 38.70 63.30
BIF Thrifts 838.4 908.5 616.8 514.2 -7.71 35.92 63.05
Stock Exchange Indices
- --------------------------------------------------------------------------------------------------------------------------
AMEX Thrifts 200.9 197.0 156.2 139.8 2.01 28.63 43.70
NYSE Thrifts 410.3 421.4 277.3 230.0 -2.63 47.96 78.40
OTC Thrifts 755.6 779.9 569.7 486.4 -3.11 32.63 55.34
Geographic Indices
- --------------------------------------------------------------------------------------------------------------------------
Mid-Atlantic Thrifts 1,347.6 1,342.6 970.7 792.4 0.38 38.83 70.08
Midwestern Thrifts 1,451.6 1,455.2 1,159.3 996.6 -0.25 25.21 45.66
New England Thrifts 593.0 592.0 428.9 355.8 0.17 38.26 66.65
Southeastern Thrifts 628.7 608.6 447.2 408.0 3.30 40.59 54.08
Southwestern Thrifts 409.6 416.4 315.9 269.2 -1.64 29.68 52.13
Western Thrifts 675.8 730.2 474.7 401.6 -7.44 42.37 68.27
Asset Size Indices
- --------------------------------------------------------------------------------------------------------------------------
Less than $250M 750.5 721.9 586.6 555.7 3.97 27.94 35.05
$250M to $500M 1,034.7 1,011.5 789.8 700.1 2.30 31.01 47.79
$500M to $1B 688.4 672.1 521.8 458.7 2.42 31.93 50.05
$1B to $5B 756.5 747.6 546.0 462.3 1.19 38.55 63.66
Over $5B 423.4 453.3 305.8 251.4 -6.60 38.45 68.39
Comparative Indices
- --------------------------------------------------------------------------------------------------------------------------
Dow Jones Industrials 7,622.4 8,222.6 6,448.3 5,647.7 -7.30 18.21 34.97
S&P 500 899.5 954.3 740.7 657.4 -5.75 21.43 37.96
</TABLE>
All SNL indices are market-value weighted: i.e., an institution's effect on an
index is proportionate to that institution's market capitalization. All SNL
thrift indices, except for the SNL MHC Index, began at 100 on March 30, 1984.
The SNL MHC Index began at 201.082 on Dec. 31, 1992, the level of the SNL
Thrift Index on that date. On March 30, 1984, the S&P 500 closed at 159.2 and
the Dow Jones Industrials stood at 1164.9.
Mid-Atlantic: DE, DC, MD, NJ, NY, PA, PR; Midwest: IA, IL, IN, KS, KY, MI, MN,
MO, ND, NE, OH, SD, WI;
New England: CT, MA, ME, NH, RI, VT; Southeast: AL, AR, FL, GA, MS, NC, SC,
TN, VA, WV;
Southwest: CO, LA, NM, OK, TX, UT; West: AZ, AK, CA, HI, ID, MT, NV, OR, WA, WY
<PAGE>
Exhibit IV-4
Pennsylvania Savings Bank
Market Area Acquisition Activity
Pennsylvania Thrift Merger and Acquisition Activity
Deals Announced 1/1/95 to Present
<TABLE>
<CAPTION>
Total TgEq/ YTD YTD NPAs/
Annd Comp Assets Assets ROAA ROAE Assets
Date Date Buyer ST Seller ST ($000) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/18/97 Pending Sovereign Bancorp PA ML Bancorp PA 2,071,285 6.87 0.75 10.64 0.46
09/16/96 04/03/97 PennFirst Bancorp PA Troy Hill Bancorp PA 80,484 22.20 1.34 5.98 0.51
06/27/96 02/21/97 Northwest Bancorp PA Bridgeville SB PA 55,712 28.51 1.21 4.24 0.25
11/14/95 12/29/95 ML Bancorp PA Suburban Federal SB PA 66,103 5.36 0.22 4.08 7.22
11/13/95 04/19/96 Harris Svngs Bk, MHC PA First Harrisburg PA 313,989 7.69 0.82 9.73 0.64
09/18/95 03/31/96 Northwest Bancorp PA First FSB of Kane PA 48,729 9.36 0.39 4.20 1.08
02/24/95 11/30/95 USABancShares PA Peoples Thrift SB PA 19,141 7.87 -0.23 -2.94 0.00
Average 379,349 12.55 0.64 5.13 1.45
Median 66,103 7.87 0.75 4.24 0.51
</TABLE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Rsrvs Deal Deal
Annd Comp NPLs Value Price Per
Date Date Buyer ST Seller ST (%) ($M) Share($) Consid.
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/18/97 Pending Sovereign Bancorp PA ML Bancorp PA 193.13 400.3 27.35 Stock
09/16/96 04/03/97 PennFirst Bancorp PA Troy Hill Bancorp PA 183.03 23.3 21.15 Mixture
06/27/96 02/21/97 Northwest Bancorp PA Bridgeville SB PA 102.86 18.3 16.00 Cash
11/14/95 12/29/95 ML Bancorp PA Suburban Federal SB PA 29.81 5.5 10.25 Cash
11/13/95 04/19/96 Harris Svngs Bk, MHC PA First Harrisburg PA 60.84 39.4 14.77 Cash
09/18/95 03/31/96 Northwest Bancorp PA First FSB of Kane PA 99.24 7.2 32.40 Cash
02/24/95 11/30/95 USABancShares PA Peoples Thrift SB PA NA 1.3 16.80 Cash
Average 111.49 70.8 19.82
Median 101.05 18.3 16.80
</TABLE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Deal Deal Pr Deal Pr/ Deal Pr/
Annd Comp Pr/Bk Tg Bk Assets 4-Otr
Date Date Buyer ST Seller ST (%) (%) (%) EPS(x)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/18/97 Pending Sovereign Bancorp PA ML Bancorp PA 199.90 203.47 NA NA
09/16/96 04/03/97 PennFirst Bancorp PA Troy Hill Bancorp PA 122.33 122.33 22.70 22.99
06/27/96 02/21/97 Northwest Bancorp PA Bridgeville SB PA 113.72 113.72 33.04 34.04
11/14/95 12/29/95 ML Bancorp PA Suburban Federal SB PA 155.15 155.15 8.32 24.89
11/13/95 04/19/96 Harris Svngs Bk, MHC PA First Harrisburg PA 149.49 149.49 12.93 14.77
09/18/95 03/31/96 Northwest Bancorp PA First FSB of Kane PA 151.87 151.87 14.78 24.74
02/24/95 11/30/95 USABancShares PA Peoples Thrift SB PA 90.21 90.21 6.02 NA
Average 140.38 140.89 16.30 24.29
Median 149.49 149.49 13.86 24.74
</TABLE>
Source: SNL Securities
<PAGE>
EXHIBIT IV-5
Pennsylvania Savings Bank
Directors and Management Summary Resumes
Class I Trustee (Term expiring 2000)
<TABLE>
<CAPTION>
Year
First
Elected Principal Occupation
Name/Position Age Trustee(1) During Past Five Years
- ---------------------------------- ----- ------------ ------------------------------------------------
<S> <C> <C> <C>
Class I Trustees:
Sylvia M. DiBona, Trustee.............. 42 1997 Chairman and Chief Executive Officer of the
William Penn Agency
(insurance agency)
James W. Eastwood, Trustee............. 51 1995 President of Granary Associates, Inc. (hospital
development and consulting firm)
P. Charles DeRita, Trustee............. 86 1995 Vice President and Manager of Hallmark
Abstract Co.
Vincent J. Fumo, Chairman and
Chief Executive Officer (2)............ 54 1995 Chairman and Chief Executive Officer of
Pennsylvania Savings Bank and Pennsylvania State Senator
</TABLE>
Class II Trustees (Term expiring 1998):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
James F. Kenney, Trustee............... 38 1995 City of Philadelphia Councilman since 1992
Roseanne Pauciello, Trustee and
Corporate Secretary ................... 53 1995 Corporate Secretary of Pennsylvania Savings Bank;
School District of Philadelphia Home and School Visitor
Thomas J. Finley, Jr., Trustee......... 76 1995 Retired
S. Michael Palermo, Trustee............ 56 1995 Assistant Executive Trustee of Pennsylvania Turnpike Commission
</TABLE>
<PAGE>
Class III Trustees (Term expiring 1999):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Jane Scaccetti Fumo, Trustee(2)(3)..... 42 1995 Certified Public
Accountant, Drucker & Scaccetti, P.C.
Alfonso Tumini, Trustee................ 47 1995 Attorney
Leonard A. Green, Trustee.............. 78 1995 Attorney
Anthony DiSandro, Trustee, President
and Chief Operating Officer............ 49 1995 President and Chief Operating Officer of
Pennsylvania Savings Bank
</TABLE>
________________________
(1) Period indicated excludes service as a trustee of the Bank's predecessors;
each Trustee was selected as an initial trustee of the Savings Bank in
connection with its incorporation on October 20, 1995.
(2) Vincent J. Fumo and Jane Scaccetti Fumo are husband and wife.
(3) Jane Scaccetti Fumo also serves as a director of Nutrition Management
Corp., which has a class of securities registered or subject to the
Securities Exchange Act of 1934, as amended ("Exchange Act").
Executive Officers Who Are Not Trustees
<TABLE>
<CAPTION>
Principal Occupation
Name/Position Age During Past Five Years
- ------------------------------------ ----- ----------------------------------------
<S> <C> <C>
Gary Polimeno, Vice President and
Treasurer ..................... 44 Vice President of Pennsylvania Savings
Savings Bank. Also Treasurer of Pennsylvania
Savings Bank since 1994.
</TABLE>
<PAGE>
EXHIBIT IV-6
Pennsylvania Savings Bank
Pro Forma Regulatory Capital Ratios
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA AT JUNE 30, 1997
-----------------------------------------------------------
Minimum of Midpoint of
Estimated Estimated
Valuation Range Valuation Range
-------------------------- ----------------------------
969,000 shares 1,140,000 shares
June 30, 1997 at $10.00 Per Share at $10.00 Per Share
-------------------------- --------------------------- ----------------------------
Percent Percent Percent
of of of
Adjusted Adjusted Adjusted
Total Total Total
Amount Assets(1) Amount Assets(1) Amount Assets(1)
--------- ----------- --------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
GAAP Capital ................ $14,526 13.88% $18,546 14.15% $18,865 14.56%
Leverage capital(2) ......... $14,617 13.97% $18,782 16.78% $18,956 17.25%
Leverage capital requirement 6,280 6.00% 7,726 6.00% 6,595 6.00%
Excess ...................... $ 8,337 7.97% $11,056 10.78% $12,361 11.25%
Tier 1 risk-based capital(3) $14,617 26.03% $18,782 32.09% $18,956 33.14%
Tier 1 capital requirement(2) 2,246 4.00% 2,282 4.00% 2,288 4.00%
Excess ...................... $12,371 22.03% $16,500 28.09% $16,668 29.14%
Total risk-based capital(4) . $14,824 26.40% $18,989 32.46% $19,163 35.50%
Total risk-based capital
requirement ................ 4,492 8.00% 4,563 8.00% 4,576 8.00%
Excess ...................... $10,332 18.40% $14,426 24.46% $14,587 25.50%
<CAPTION>
PRO FORMA AT JUNE 30, 1997
------------------------------------------------------------------
15% Above
Maximum of Maximum of
Estimated Estimated
Valuation Range Valuation Range
------------------------------ ------------------------------
1,311,000 shares 1,507,650 shares
at $10.00 Per Share at $10.00 Per Share
------------------------------ ------------------------------
Percent Percent
of of
Adjusted Adjusted
Total Total
Amount Assets(1) Amount Assets(1)
--------- ----------- --------- ----------
<S> <C> <C> <C> <C>
GAAP Capital ................ $19,514 14.97% $20,262 15.44%
Leverage capital(2) ......... $19,605 17.71% $20,353 18.24%
Leverage capital requirement 6,642 6.00% 6,696 6.00%
Excess ...................... $12,963 11.71% $13,657 12.24%
Tier 1 risk-based capital(3) $19,606 34.18% $20,353 35.37%
Tier 1 capital requirement(2) 2,294 4.00% 2,302 4.00%
Excess ...................... $17,311 30.18% $18,051 31.37%
Total risk-based capital(4) . $19,812 34.54% $21,334 37.08%
Total risk-based capital
requirement ................ 4,589 8.00% 4,603 8.00%
Excess ...................... $15,223 26.54% $16,731 29.08%
</TABLE>
(1) Based upon historical total assets of the Savings Bank of $124.3 million at
June 30, 1997, and pro forma equity of $23.15 million, $24.66 million,
$26.16 million and $27.89 million at the minimum, midpoint, maximum, and
maximum, as adjusted, of the Estimated Valuation Range, respectively, for
purposes of the leverage capital requirement; and, for purposes of the
risk-based capital requirements, based upon historical risk-weighted
assets of $56.15 million at June 30, 1997 and $57.04 million, $57.20
million, $57.36 million and of $57.54 million at the minimum, midpoint,
maximum, and maximum, as adjusted, of the Estimated Valuation Range,
respectively.
(2) The current FDIC leverage capital requirement for savings banks is 6% of
total adjusted assets.
(3) Percentage represents tier 1 capital divided by total risk-weighted assets.
Assumes net proceeds are invested in assets that carry a 20%
risk-weighting.
(4) Percentage represents total capital divided by total risk-weighted assets.
Assumes net proceeds are invested in assets that carry a 20%
risk-weighting.
<PAGE>
Exhibit IV-7
IMPACT OF WAIVED DIVIDENDS
Pennsylvania Savings Bank
<TABLE>
<CAPTION>
<S> <C> <C>
Bank Stockholders' Equity @ 06/30/97 $14,526,000 (BOOK)
Aggregate Amt of Dividends Waived by MHC $0 (DIVIDENDS)
Minority Ownership Interest 48.50% (PCT)
Pro Forma Market Value of the Company $21,903,226 (VALUE)
Market Value of Assets of the Company (Other
than Stock in Bank) $244,000 (MHC ASSETS)
Two Step Calculation
- --------------------
(BOOK - DIVIDENDS) x PCT
------------------------
Step I -- to Account for Waiver of Dividends = (BOOK)
= 48.50%
(VALUE - MHC ASSETS) x Step I
---------------------------------
Step II -- to Account for MHC Assets = (VALUE)
= 47.96%
</TABLE>
<PAGE>
EXHIBIT IV-8
Peer Group Core Earnings Analysis
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Core Earnings Analysis
Comparable Institution Analysis
For the Twelve Months Ended June 30, 1997
<TABLE>
<CAPTION>
Estimated
Net Income Less: Net Tax Effect Less: Extd Core Income Estimated
to Common Gains(Loss) @ 34% Items to Common Shares Core EPS
---------- ----------- ---------- ----------- ------------ ------ --------
($000) ($000) ($000) ($000) ($000) ($000) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Comparable Group
- ----------------
GAF GA Financial Corp. of PA 6,373 2,681 -912 0 8,142 7,985 1.02
HRBF Harbor Federal Bancorp of MD 986 806 -274 0 1,518 1,693 0.90
LARL Laurel Capital Group of PA 2,320 934 -318 0 2,936 1,443 2.03
PEEK Peekskill Fin. Corp. of NY 1,812 884 -301 0 2,395 3,193 0.75
PWBK Pennwood SB of PA 328 312 -106 0 534 580 0.92
PHFC Pittsburgh Home Fin. of PA 1,355 587 -200 0 1,742 1,969 0.88
PRBC Prestige Bancorp of PA 431 502 -171 0 762 915 0.83
SFED SFS Bancorp of Schenectady NY 741 886 -301 0 1,326 1,236 1.07
THRD TF Financial Corp. of PA 3,412 1,817 -618 0 4,611 4,083 1.13
WHGB WHG Bancshares of MD 502 506 -172 0 836 1,462 0.57
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
Exhibit IV-9
PRO FORMA ANALYSIS SHEET
Pennsylvania Savings Bank
Prices as of September 19, 1997
<TABLE>
<CAPTION>
Pennsylvania
Peer Group Companies All SAIF Insured
------------------- ---------------- ----------------
Price Multiple Symbol Subject (1) Mean Median Mean Median Mean Median
- -------------- ------ ----------- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Price-earnings ratio = P/E 80.41x 24.46x 25.44x 22.25x 23.75x 21.97x 22.05x
Price-book ratio = P/B 90.05% 126.64% 124.34% 159.23% 150.03% 147.78% 140.90%
Price-assets ratio = P/A 16.34% 18.29% 17.03% 14.19% 14.46% 18.07% 16.61%
</TABLE>
<TABLE>
<CAPTION>
Valuation Parameters
<S> <C> <C> <C>
Pre-Conversion Earnings (Y) $22,000 ESOP Stock Purchases (E) 8.00%
Pre-Conversion Book Value (B) $14,770,000 Cost of ESOP Borrowings (S) 0.(4)
Pre-Conversion Assets (A) $124,542,000 ESOP Amortization (T) 10.00 years
Reinvestment Rate (2)(R) 3.88% 1997 MRP Amount (M) 4.00%
Est. Conversion Expenses (3)(X) 4.17% 1997 MRP Vesting (N) 5.00 years
Tax rate (TAX) 34.00% Percentage Sold (PCT) 52.04%
</TABLE>
<TABLE>
<CAPTION>
Calculation of Pro Forma Value After Conversion
<S> <C> <C> <C> <C>
1. V= P/E * Y V= $21,906,226
------------------------------------------------------------
1 - P/E * PCT * ((1-X-E-M)*R - (1-TAX)*E/T - (1-TAX)*M/N)
2. V= P/B * B V= $21,906,226
--------------------------------
1 - P/B * PCT * (1-X-E-M)
3. V= P/A * A V= $21,906,226
--------------------------------
1 - P/A * PCT * (1-X-E-M)
</TABLE>
<TABLE>
<CAPTION>
Full
Gross Exchange Conversion
Conclusion Proceeds Ratio Value
- ---------- -------- -------- ----------
<S> <C> <C> <C>
Minimum $9,690,000 1.5413 $18,620,292
Midpoint $11,400,000 1.8133 $21,906,226
Maximum $13,110,000 2.0853 $25,192,160
Supermaximum Value $15,076,500 2.3981 $28,970,984
</TABLE>
- --------------------------------------------
(1) Pricing ratios shown reflect the midpoint of the offering.
(2) Net return reflects a reinvestment rate of 5.88 percent, and a tax rate of
34.00 percent.
(3) Estimated offering expenses based on prospectus.
(4) No cost is applicable since holding company will fund the ESOP loan.
<PAGE>
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Minimum Value
<TABLE>
<S> <C> <C> <C>
1. Conversion Proceeds
Full Conversion Value $18,620,292
Exchange Ratio 1.5413
Offering Proceeds $9,690,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $9,215,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $9,215,000
Less: Non-Cash Stock Purchases (1) 1,162,800
-----------
Net Proceeds Reinvested $8,052,200
Estimated net incremental rate of return 3.88%
Earnings Increase $312,425
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 51,163
Less: 1997 MRP Vesting (4) 51,163
-----------
Net Earnings Increase $210,099
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- --------- ----------
12 Months ended June 30, 1997 (reported) $22,000 $210,099 $232,099
12 Months ended June 30, 1997 (core) $487,000 $210,099 $697,099
Before Net Cash After
4. Pro Forma Net Worth Conversion Proceeds Conversion
---------- --------- ----------
Reported as of June 30, 1997 $14,770,000 $8,052,200 $22,822,200
Tangible as of June 30, 1997 $14,770,000 $8,052,200 $22,822,200
Before Net Cash After
5. Pro Forma Assets Conversion Proceeds Conversion
---------- --------- ----------
Reported as of June 30, 1997 $124,542,000 $8,052,200 $132,594,200
</TABLE>
(1) Includes ESOP and 1997 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is
tax-effected at a 34.00 percent rate.
(4) 1997 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
<PAGE>
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Midpoint Value
<TABLE>
<S> <C> <C> <C>
1. Conversion Proceeds $21,906,226
Full Conversion Value 1.8133
Exchange Ratio
Offering Proceeds $11,400,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $10,925,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $10,925,000
Less: Non-Cash Stock Purchases (1) 1,368,000
-----------
Net Proceeds Reinvested $9,557,000
Estimated net incremental rate of return 3.88%
Earnings Increase $370,812
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 60,192
Less: 1997 MRP Vesting (4) 60,192
-----------
Net Earnings Increase $250,428
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
12 Months ended June 30, 1997 (reported) $22,000 $250,428 $272,428
12 Months ended June 30, 1997 (core) $487,000 $250,428 $737,428
Before Net Cash After
4. Pro Forma Net Worth Conversion Proceeds Conversion
---------- --------- ----------
Reported as of June 30, 1997 $14,770,000 $9,557,000 $24,327,000
Tangible as of June 30, 1997 $14,770,000 $9,557,000 $24,327,000
Before Net Cash After
5. Pro Forma Assets Conversion Proceeds Conversion
---------- --------- ----------
Reported as of June 30, 1997 $124,542,000 $9,557,000 $134,099,000
</TABLE>
(1) Includes ESOP and 1997 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is
tax-effected at a 34.00 percent rate.
(4) 1997 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
<PAGE>
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Maximum Value
<TABLE>
<S> <C> <C> <C>
1. Conversion Proceeds
Full Conversion Value $25,192,160
Exchange Ratio 2.0853
Offering Proceeds $13,110,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $12,635,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $12,635,000
Less: Non-Cash Stock Purchases (1) 1,573,200
-----------
Net Proceeds Reinvested $11,061,800
Estimated net incremental rate of return 3.88%
Earnings Increase $429,198
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 69,221
Less: 1997 MRP Vesting (4) 69,221
-----------
Net Earnings Increase $290,756
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
12 Months ended June 30, 1997 (reported) $22,000 $290,756 $312,756
12 Months ended June 30, 1997 (core) $487,000 $290,756 $777,756
Before Net Cash After
4. Pro Forma Net Worth Conversion Proceeds Conversion
---------- -------- ----------
Reported as of June 30, 1997 $14,770,000 $11,061,800 $25,831,800
Tangible as of June 30, 1997 $14,770,000 $11,061,800 $25,831,800
Before Net Cash After
5. Pro Forma Assets Conversion Proceeds Conversion
---------- --------- ----------
Reported as of June 30, 1997 $124,542,000 $11,061,800 $135,603,800
</TABLE>
(1) Includes ESOP and 1997 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is
tax-effected at a 34.00 percent rate.
(4) 1997 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
<PAGE>
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Supermaximum Value
<TABLE>
<S> <C> <C> <C>
1. Conversion Proceeds
Full Conversion Value $28,970,984
Exchange Ratio 2.3981
Offering Proceeds $15,076,500
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $14,601,500
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $14,601,500
Less: Non-Cash Stock Purchases (1) 1,809,180
-----------
Net Proceeds Reinvested $12,792,320
Estimated net incremental rate of return 3.88%
Earnings Increase $496,342
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 79,604
Less: 1997 MRP Vesting (4) 79,604
-----------
Net Earnings Increase $337,134
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
12 Months ended June 30, 1997 (reported) $22,000 $337,134 $359,134
12 Months ended June 30, 1997 (core) $487,000 $337,134 $824,134
Before Net Cash After
4. Pro Forma Net Worth Conversion Proceeds Conversion
---------- -------- ----------
Reported as of June 30, 1997 $14,770,000 $12,792,320 $27,562,320
Tangible as of June 30, 1997 $14,770,000 $12,792,320 $27,562,320
Before Net Cash After
5. Pro Forma Assets Conversion Proceeds Conversion
---------- -------- ----------
June 30, 1997 $124,542,000 $12,792,320 $137,334,320
</TABLE>
(1) Includes ESOP and 1997 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is
tax-effected at a 34.00 percent rate.
(4) 1997 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
<PAGE>
EXHIBIT V-1
RP Financial, LC.
Firm Qualifications Statement
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
FIRM QUALIFICATION STATEMENT
RP Financial provides financial and management consulting and valuation services
to the financial services industry nationwide, particularly federally-insured
financial institutions. RP Financial establishes long-term client relationships
through its wide array of services, emphasis on quality and timeliness, hands-on
involvement by our principals and senior consulting staff, and careful
structuring of strategic plans and transactions. RP Financial's staff draws from
backgrounds in consulting, regulatory agencies and investment banking, thereby
providing our clients with considerable resources.
STRATEGIC AND CAPITAL PLANNING
RP Financial's strategic and capital planning services are designed to provide
effective workable plans with quantifiable results. Through a program known as
SAFE (Strategic Alternatives Financial Evaluations), RP Financial analyzes
strategic options to enhance shareholder value or other established objectives.
Our planning services involve conducting situation analyses; establishing
mission statements, strategic goals and objectives; and identifying strategies
for enhancement of franchise value, capital management and planning, earnings
improvement and operational issues. Strategy development typically includes the
following areas: capital formation and management, asset/liability targets,
profitability, return on equity and market value of stock. Our proprietary
financial simulation model provides the basis for evaluating the financial
impact of alternative strategies and assessing the feasibility/compatibility of
such strategies with regulations and/or other guidelines.
MERGER AND ACQUISITION SERVICES
RP Financial's merger and acquisition (M&A) services include targeting
candidates and potential acquirors, assessing acquisition merit, conducting
detailed due diligence, negotiating and structuring transactions, preparing
merger business plans and financial simulations, rendering fairness opinions and
assisting in implementing post-acquisition strategies. Through our financial
simulations, comprehensive in-house data bases, valuation expertise and
regulatory knowledge, RP Financial's M&A consulting focuses on structuring
transactions to enhance shareholder returns.
VALUATION SERVICES
RP Financial's extensive valuation practice includes valuations for a variety of
purposes including mergers and acquisitions, mutual-to-stock conversions, ESOPs,
subsidiary companies, mark-to-market transactions, loan and servicing
portfolios, non-traded securities, core deposits, FAS 107 (fair market value
disclosure), FAS 122 (loan servicing rights) and FAS 123 (stock options). Our
principals and staff are highly experienced in performing valuation appraisals
which conform with regulatory guidelines and appraisal industry standards. RP
Financial is the nation's leading valuation firm for mutual-to-stock conversions
of thrift institutions.
OTHER CONSULTING SERVICES AND DATA BASES
RP Financial offers a variety of other services including branching strategies,
feasibility studies and special research studies, which are complemented by our
quantitative and computer skills. RP Financial's consulting services are aided
by its in-house data base resources for commercial banks and savings
institutions and proprietary valuation and financial simulation models.
YEAR 2000 SERVICES
RP Financial, through a relationship with a computer research and development
company with a proprietary methodology, offers Year 2000 advisory and conversion
services to financial institutions which are more cost effective and less
disruptive than most other providers of such service.
RP Financial's Key Personnel (Years of Relevant Experience)
Ronald S. Riggins, Managing Director (17)
William E. Pommerening, Managing Director (13)
Gregory E. Dunn, Senior Vice President (15)
James P. Hennessey, Senior Vice President (10)
James J. Oren, Vice President (10
- --------------------------------------------------------------------------------
Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210 Telephone: (703) 528-1700
Arlington, VA 22209 Fax No.: (703) 528-1788
<PAGE>
CONVERSION APPRAISAL UPDATE REPORT
PSB BANCORP, INC.
PROPOSED HOLDING COMPANY FOR
PENNSYLVANIA SAVINGS BANK
Philadelphia, Pennsylvania
Stock Prices As Of:
February 13, 1998
Prepared By:
RP Financial, LC.
1700 North Moore Street
Suite 2210
Arlington, Virginia 22209
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
February 13, 1998
Boards of Trustees
PSB Mutual Holding Company
Pennsylvania Savings Bank
1835 Market Street
Philadelphia, Pennsylvania 19103
To the Boards:
We have completed and hereby provide an updated appraisal of the
estimated pro forma market value of the common stock which is to be issued by
PSB Bancorp, Inc., Philadelphia, Pennsylvania (the "Holding Company"), in
connection with the mutual-to-stock conversion of PSB Mutual Holding Company
(the "MHC"). The MHC currently has a majority ownership interest in, and its
principal asset consists of, the common stock of Pennsylvania Savings Bank,
Philadelphia, Pennsylvania (the "Savings Bank"). It is our understanding that
the Holding Company will offer its stock in a Subscription and Community
offering to the Savings Bank's Eligible Account Holders, to the Savings Bank's
employee stock ownership plan ("ESOP"), to Supplemental Eligible Account Holders
of the Savings Bank, to Public Shareholders, and to the Local Community (the
"Conversion Offerings"). This appraisal update is being furnished to the
Pennsylvania Department of Banking ("PDOB") and the Federal Deposit Insurance
Corporation ("FDIC"). Our original appraisal report, dated September 19, 1997
(the "Original Appraisal"), is incorporated herein by reference. As in the
preparation of our Original Appraisal, we believe the data and information used
herein is reliable; however, we cannot guarantee the accuracy and completeness
of such information.
This updated appraisal reflects the following: (1) a review of recent
developments in the Savings Bank's financial condition, including updated
financial data through December 31, 1997; (2) an updated comparison of the
Savings Bank's financial condition and operating results versus the Peer Group
companies identified in the Original Appraisal; and (3) a review of stock market
conditions since the Original Appraisal date, along with updated stock prices as
of February 13, 1998.
Pro forma market value is defined as the price at which the Savings
Bank's stock, immediately upon completion of the conversion offering, would
change hands between a willing buyer and a willing seller, neither being under
any compulsion to buy or sell and both having reasonable knowledge of relevant
facts.
Our valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing shares of the
common stock. 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 buy or sell
such shares at prices related to the foregoing valuation of the pro forma market
value thereof. RP Financial is not a seller of securities within the meaning of
any federal and state securities laws and any report prepared by RP Financial
shall not be used as an offer or solicitation with respect to the purchase or
sale of any securities. RP Financial maintains a policy which prohibits the
company, its principals or employees from purchasing stock of its client
institutions.
- -------------------------------------------------------------------------------
Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210 Telephone: (703) 528-1700
Arlington, VA 22209 Fax No.: (703) 528-1788
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 2
Discussion of Relevant Considerations
1. Financial Results
Table 1 presents summary balance sheet and income statement details for
the twelve months ended June 30, 1997 and updated unaudited financial
information through December 31, 1997. The overall composition of the Savings
Bank's December 31, 1997 balance sheet was comparable to the June 30, 1997 data,
with the Savings Bank posting a moderate increase in total assets, driven
primarily by an increase in loans receivable and funded with increases in
deposits and stockholders' equity. Updated earnings for the Savings Bank also
reflect positive growth due primarily to elimination of the SAIF assessment
expense from the trailing twelve month earnings base and an increase in net
interest income.
The Savings Bank's total assets increased by $5.0 million, or 4.1
percent, from June 30, 1997 to December 31, 1997. Although the Savings Bank's
balance sheet reflected moderate growth, the composition of the Savings Bank's
interest-earning assets ("IEA") was generally consistent with the earlier
balance sheet composition, reflecting only moderate changes. The concentration
of loans equaled 53.0 percent of assets as of December 31, 1997 which reflects
an increase from the 50.0 percent ratio reported as of June 30, 1997. The loan
portfolio exhibited growth primarily in the areas of permanent residential
mortgage loans and commercial loans, which is consistent with the Savings Bank's
business plan of deploying its substantial balance of cash and investments into
whole loans receivable.
The balance of interest-earning assets consisted of cash and
investments and mortgage-backed securities ("MBS"). As a result of the Savings
Bank's business plan of recent years, which focused on restructuring internal
operations and putting in place infrastructure, the Savings Bank had not
aggressively pursued growth in loans -- preferring instead to maintain funds in
low risk cash and investments. The balance of cash and investments continued to
comprise a significant portion of the balance sheet, equal to 39.1 percent of
assets at December 31, 1997 versus 41.5 percent as of June 30, 1997. As
described in the Original Appraisal, the Savings Bank anticipates a short term
increase in cash and investments due to retaining the capital from the
conversion but, longer term, anticipates a gradual reduction in cash and
investments as such funds are deployed into loans receivable.
The remaining component of interest-earning assets was MBS. In the
past, the Savings Bank has utilized MBS as a means to increase the level of
interest-earning assets, as an avenue to deploy excess liquidity, and as an
investment vehicle to leverage the balance sheet. MBS equaled 3.9 percent of
assets as of December 31, 1997, which reflects a decrease from 4.6 percent as of
June 30, 1997. The decrease in the MBS percentage is due to normal principal
reductions and prepayments in the mortgage related securities. The Savings Bank
is not currently purchasing MBS and the reduction represents normal principal
reductions through amortization and prepayments.
Asset quality ratios improved moderately, but in general remained
consistent with those reported in the Original Appraisal, with the ratio of
non-performing assets ("NPAs") to total assets equaling 1.97 percent as of
December 31, 1997 as compared to 2.70 percent as of June 30, 1997. Similarly,
reserve coverage ratios and allowances for loan losses as a percent of total
loans did not change materially over the quarter. The overall assessment of the
Savings Bank's asset quality is unchanged from the Original Appraisal, as the
Savings Bank reported higher NPAs and lower reserve coverage ratios relative to
industry and peer group averages.
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 3
Table 1
Pennsylvania Savings Bank
Recent Financial Data
<TABLE>
<CAPTION>
At June 30, 1997 At December 31, 1997
---------------- --------------------
(% of (% of
Amount Assets) Amount Assets)
------ ------- ------ -------
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Balance Sheet Data
- ------------------
Total Assets $124,298 100.0% $129,338 100.0%
Loans Receivable, Net 62,140 50.0 68,490 53.0
Mortgage-Backed Securities 5,718 4.6 5,002 3.9
Cash & Investments 51,568 41.5 50,508 39.1
Deposits 104,437 84.0 108,734 84.1
Stockholders' Equity 14,526 11.7 14,998 11.6
12 Months Ended 12 Months Ended
June 30, 1997 December 31, 1997
---------------- -------------------
(% of (% of
Avg. Avg.
Amount Assets) Amount Assets)
------ ------- ------ -------
($000) (%) ($000) (%)
Summary Income Statement
- ------------------------
Interest Income $8,295 7.02% $8,740 7.05%
Interest Expense (4,240) (3.59) (4,534) (3.66)
------ ---- ------ ----
Net Interest Income $4,055 3.43% $4,206 3.39%
Provision for Loan Losses (133) (0.11) (60) (0.05)
------ ---- ------ ----
Net Interest Income After Provisions $3,922 3.32% $4,146 3.34%
Other Non-Interest Income 1,076 0.91 1,071 0.86
Operating Expense (4,136) (3.50) (4,156) (3.36)
------ ---- ------ ----
Net Operating Income $862 0.73% $1,061 0.85%
Gain (loss) on RE Opns (138) (0.12) (8) (0.01)
Special SAIF Assessment (567) (0.48) 0 0.00
------ ---- ------ ----
Gains and Net Non-Operating Income ($705) (0.60)% $(8) (0.01)%
Net Income Before Tax 157 0.13 1,053 0.84
Income Taxes (135) (0.11) (345) (0.28)
------ ---- ------ ----
Net Income (Loss) $22 0.02% $708 0.57%
</TABLE>
Source: The Savings Bank's prospectus and RP Financial calculations.
The Savings Bank's operations continued to be funded primarily with
retail deposits and, similar to asset trends, deposits increased moderately to
equal $108.7 million as of December 31, 1997. The increase in assets over the
most recent quarter was funded by an increase in deposits and borrowed funds,
primarily consisting of retail reverse repurchase agreements from customers.
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 4
Positive earnings during the quarter ended December 31, 1997 supported
the increase in the Savings Bank's capital to $15.0 million at December 31, 1997
versus a comparative balance of $14.5 million at June 30, 1997. Slightly faster
asset growth during the quarter resulted in the Savings Bank's capital ratio
decreasing from 11.7 percent to 11.6 percent as of December 31, 1997. The
Savings Bank remains in compliance with all applicable regulatory capital ratios
as of December 31, 1997.
The Savings Bank's operating results for the twelve months ended June
30, 1997 and December 31, 1997 are also set forth in Table 1. Updated earnings
for the Savings Bank were noticeably higher at December 31, 1997 equal to
$708,000 versus $22,000 for the twelve months ended June 30, 1997. The
improvement in trailing twelve month earnings was largely attributable to
elimination of the one-time SAIF assessment from the trailing twelve month
earnings base and a significant reduction in real estate losses on a trailing
twelve month basis. However, the Savings Bank also benefitted from an increase
in net interest income, a reduction in loan loss provisions, and lower operating
expenses as a percentage of average assets. RP Financial's estimate of core
earnings takes into consideration non-operating or one-time items, including the
SAIF assessment. For the twelve months ended June 30, 1997 and December 31,
1997, estimated core earnings for the Savings Bank totaled $487,000 and
$713,000, respectively, with the increase in estimated core earnings driven by
the above factors.
The Savings Bank's updated net interest income exhibited an increase of
approximately $150,000 to a level of $4.2 million on a trailing twelve months
basis. This increase is attributed primarily to the growth in the Savings Bank's
balance sheet and deployment of lower yielding cash and investments into higher
yielding loans receivable. The ratio of net interest income to average decreased
slightly to 3.39 percent from 3.43 percent.
The Savings Bank's higher level of business activity increased overall
operating costs on a dollar basis, however, after considering the balance sheet
growth the Savings Bank's operating expense ratio exhibited a slight
improvement. Specifically, for the twelve months ended December 31, 1997, the
Savings Bank's operating expenses equaled $4.2 million, equal to 3.36 percent of
average assets, as compared to $4.1 million, or 3.50 percent of average assets,
for the twelve months ended June 30, 1997. The Savings Bank's operating costs
remain above industry averages as its operations include the costs of the
Savings Bank's mortgage banking activity, increased overhead related to
relocating downtown and putting in place significant infrastructure, pursuing a
diversified operating strategy, and operating a large number of branches
relative to total assets. No material increases to the Savings Bank's expenses
are anticipated by management in the future although the Savings Bank may likely
experience upward pressures on expense levels due to inflation and the cost of
stock based benefit plans resulting from the second step conversion.
The Savings Bank's diversified lending operations coupled with its
various fee generating activities continue to provide it with a relatively high
level of non-interest income. For both periods shown in Table 1, non-interest
income equaled approximately $1.1 million equal to 0.86 percent of average
assets for the twelve months ended December 31, 1997 versus 0.91 percent for the
June 30, 1997 period.
Other components of the Savings Bank's income and expenses remained
relatively unchanged on a trailing twelve month basis incorporating updated
financial data. Provision for loans losses equaled $60,000 or 0.05 percent of
average assets for December 31, 1997 versus a comparable figure of $133,000 and
0.11 percent of average assets for the twelve months ended June 30, 1997. Losses
on real estate declined from $138,000 at June 30, 1997 to $8,000 as of December
31, 1997. The most significant difference in expenses related to the special
SAIF assessment of $567,000 which was no longer reflected in trailing twelve
month earnings at December 31, 1997.
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 5
2. Peer Group Financial Comparisons
Tables 2 and 3 present the financial characteristics and operating
results for the Savings Bank, the Peer Group and all publicly-traded
SAIF-insured thrifts. The Savings Bank's financial information is based on
results through December 31, 1997, while financial data for the Peer Group is as
of December 31 or September 30, 1997, based on the latest data available.
In general, the comparative balance sheet ratios for the Savings Bank
and the Peer Group did not vary significantly from the ratios exhibited in the
Original Appraisal. Relative to the Peer Group, the Savings Bank's
interest-earning asset composition continued to reflect a lower level of loans
and MBS and a significantly higher balance of cash and investments. A more
detailed analysis of the respective loan portfolios of the Savings Bank and the
Peer Group set forth in the Original Appraisal indicated that: (1) both the
Savings Bank and the Peer Group are primarily mortgage lenders; and (2) the
Savings Bank has a greater proportion of its portfolio invested in residential
permanent loans and multi-family/commercial real estate loans while, conversely,
the Peer Group has diversified its portfolio to include a higher proportion of
MBS, construction and commercial business loans. Overall, Bank's
interest-earning assets amounted to 96.0 percent of assets, which continued to
be lower than the comparable Peer Group ratio of 97.3 percent.
The mix of deposits and borrowings maintained by the Savings Bank and
the Peer Group also did not change significantly. The Savings Bank's funding
composition continued to reflect a higher concentration of deposits and a lower
level of borrowed funds. Updated interest-bearing liabilities to assets ratios
equaled 86.3 percent and 84.5 percent for the Savings Bank and the Peer Group,
respectively, with the Savings Bank's higher ratio continuing to be largely
attributable to the maintenance of a lower capital position. The Savings Bank
posted an updated equity-to-assets ratio of 11.6 percent versus a comparative
ratio of 14.2 percent for the Peer Group. Overall, the Savings Bank's updated
interest-earning assets to interest-bearing liabilities ("IEA/IBL") ratio
equaled 111.2 percent, which remained below the comparative Peer Group average
of 115.2 percent. As noted in the Original Appraisal, the additional capital
realized from the stock conversion should serve to largely address the lower
IEA/IBL ratio currently maintained by the Savings Bank.
Updated growth rates for the Peer Group reflect twelve months ended
December 31 or September 30, 1997. Growth rates for the Savings Bank reflect
growth for the twelve months ended December 31, 1997. Asset growth rates of
positive 9.2 percent and 9.8 percent were posted by the Savings Bank and the
Peer Group, respectively. The overall trends in growth for both the Savings Bank
and the Peer Group remain unchanged from the Original Appraisal with both
reflecting healthy growth in the major balance sheet categories of total assets,
loans receivable and deposits. Similar to the Original Appraisal, the Savings
Bank posted a stronger capital growth rate than the Peer Group (positive 5.9
percent versus negative 7.6 percent for the Peer Group). Higher dividend
payments and stock repurchases (the Peer Group is comprised of full stock
companies), as well as possible negative SFAS 115 adjustments, were likely
factors that accounted for the Peer Group's negative capital growth rate.
Following the increase in capital realized from conversion proceeds, the Savings
Bank's capital growth rate will be depressed by a higher pro forma capital
position and comparatively lower marginal returns, dividends which will be paid
on all outstanding shares and potentially stock repurchases.
Table 3 displays comparative operating results for the Savings Bank and
the Peer Group, based on their earnings for the twelve months ended December 31,
1997 or September 30, 1997, based on the latest data available. Updated earnings
for the Savings Bank continued to be lower than the Peer Group. Consistent with
the characteristics observed in the Original Appraisal, the Savings Bank's
operations compared relatively closely to the Peer Group with respect to net
interest income, compared favorably with regard to non-interest income, but
compared unfavorably with respect to operating expenses.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 2
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of December 31, 1997
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets
-----------------------------------------------------------------------------------------
Cash and Borrowed Subd. Net Goodwill Tng Net MEMO:
Investments Loans MBS Deposits Funds Debt Worth & Intang Worth Pref.Stock
----------- ----- --- -------- -------- ----- ----- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania SB of PA
- ---------------------
December 31, 1997 39.1 53.0 3.9 84.1 2.2 0.0 11.6 0.0 11.6 0.0
SAIF-Insured Thrifts 17.4 68.0 10.9 69.6 15.3 0.2 13.1 0.2 12.9 0.0
State of PA 23.3 60.6 13.2 69.5 18.8 0.1 9.9 0.3 9.6 0.0
Comparable Group Average 23.1 58.6 15.6 71.4 13.1 0.0 14.2 0.2 14.1 0.0
Mid-Atlantic Companies 23.1 58.6 15.6 71.4 13.1 0.0 14.2 0.2 14.1 0.0
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 31.7 39.1 26.7 59.0 25.3 0.0 14.8 0.1 14.7 0.0
HRBF Harbor Federal Bancorp of MD 24.9 63.4 9.5 75.6 10.7 0.0 12.5 0.0 12.5 0.0
LARL Laurel Capital Group of PA 23.3 69.1 6.0 81.5 6.1 0.0 10.6 0.0 10.6 0.0
PEEK Peekskill Fin. Corp. of NY(1) 18.9 25.7 54.2 72.8 0.0 0.0 26.1 0.0 26.1 0.0
PWBK Pennwood Bancorp, Inc. of PA(1) 32.2 60.2 3.9 76.7 3.1 0.0 18.3 0.0 18.3 0.0
PHFC Pittsburgh Home Fin Corp of PA 21.3 63.5 13.0 47.4 42.5 0.0 8.2 0.1 8.1 0.0
PRBC Prestige Bancorp of PA 22.5 67.1 7.4 63.6 24.2 0.0 10.9 0.0 10.9 0.0
SFED SFS Bancorp of Schenectady NY 11.2 76.7 9.7 86.3 0.0 0.0 12.3 0.0 12.3 0.0
THRD TF Financial Corp. of PA 31.9 42.0 22.6 75.4 14.8 0.0 8.4 1.4 7.0 0.0
WHGB WHG Bancshares of MD(1) 13.1 79.6 2.9 75.3 4.1 0.0 20.1 0.0 20.1 0.0
</TABLE>
<PAGE>
(RESTUBBED TABLE FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>
Balance Sheet Annual Growth Rates Regulatory Capital
------------------------------------------------------------ --------------------------
Cash and Loans Borrows. Net Tng Net
Assets Investments & MBS Deposits &Subdebt Worth Worth Tangible Core Reg.Cap.
------ ----------- ----- -------- -------- ----- ------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania SB of PA
- ---------------------
December 31, 1997 9.21 -0.17 16.42 8.11 84.94 5.86 5.86 13.36 13.36 25.06
SAIF-Insured Thrifts 11.39 4.56 13.16 8.27 12.49 3.53 2.90 11.37 11.53 23.44
State of PA 16.98 19.05 16.36 10.10 19.45 4.88 4.35 9.32 10.18 20.94
Comparable Group Average 9.81 11.32 12.16 3.46 32.63 -7.60 -7.99 11.40 12.86 23.78
Mid-Atlantic Companies 9.81 11.32 12.16 3.46 32.63 -7.60 -7.99 11.40 12.86 23.78
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 23.64 13.78 32.84 2.80 NM -5.13 -6.02 12.59 12.59 33.76
HRBF Harbor Federal Bancorp of MD 6.76 5.50 10.09 5.35 23.04 3.40 3.40 NM NM NM
LARL Laurel Capital Group of PA 5.39 32.69 0.26 2.45 85.01 3.99 3.99 NM 10.33 21.21
PEEK Peekskill Fin. Corp. of NY(1) -2.82 -8.21 -1.58 2.37 NM -13.93 -13.93 NM NM NM
PWBK Pennwood Bancorp, Inc. of PA(1) 3.07 -25.87 29.54 2.63 NM -5.60 -5.60 NM 18.05 34.17
PHFC Pittsburgh Home Fin Corp of PA 37.03 50.78 33.82 4.35 NM -13.24 -13.27 NM 17.52 7.83
PRBC Prestige Bancorp of PA 24.97 51.22 18.48 8.75 NM 1.30 1.30 8.83 8.83 18.78
SFED SFS Bancorp of Schenectady NY 5.79 -10.31 8.54 7.01 NM -1.11 -1.11 12.28 12.28 23.78
THRD TF Financial Corp. of PA -7.84 6.48 -13.62 -3.98 -10.17 -30.97 -33.98 7.20 7.20 17.48
WHGB WHG Bancshares of MD(1) 2.10 -2.89 3.22 2.89 NM -14.70 -14.70 16.10 16.10 33.19
</TABLE>
(1) Financial information is for the quarter ending September 30, 1997.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- ----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended December 31, 1997
<TABLE>
<CAPTION>
Net Interest Income Other Income
---------------------------- -------------------
Loss NII Total
Net Provis. After Loan R.E. Other Other
Income Income Expense NII on IEA Provis. Fees Oper. Income Income
------ ------ ------- --- ------ ------- ---- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania SB of PA
- ---------------------
December 31, 1997 0.57 7.05 3.66 3.39 0.05 3.34 0.00 0.00 0.86 0.86
SAIF-Insured Thrifts 0.95 7.41 4.13 3.28 0.12 3.16 0.11 0.01 0.33 0.46
State of PA 0.88 7.37 4.18 3.19 0.10 3.09 0.07 -0.01 0.23 0.30
Comparable Group Average 0.90 7.25 3.84 3.41 0.06 3.35 0.04 -0.01 0.18 0.20
Mid-Atlantic Companies 0.90 7.25 3.84 3.41 0.06 3.35 0.04 -0.01 0.18 0.20
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 1.14 7.24 3.74 3.49 0.04 3.45 0.00 0.00 0.27 0.27
HRBF Harbor Federal Bancorp of MD 0.74 7.29 4.38 2.90 0.04 2.87 0.07 0.00 0.07 0.13
LARL Laurel Capital Group of PA 1.40 7.44 3.82 3.62 0.01 3.61 0.03 0.00 0.29 0.33
PEEK Peekskill Fin. Corp. of NY(1) 1.14 6.71 3.02 3.69 0.03 3.66 0.04 0.00 0.09 0.13
PWBK Pennwood Bancorp, Inc. of PA(1) 0.99 7.90 3.64 4.26 0.08 4.18 0.00 -0.09 0.23 0.14
PHFC Pittsburgh Home Fin Corp of PA 0.82 7.53 4.67 2.86 0.16 2.71 0.00 0.00 0.20 0.20
PRBC Prestige Bancorp of PA 0.60 7.12 3.98 3.14 0.08 3.06 0.00 0.00 0.27 0.27
SFED SFS Bancorp of Schenectady NY 0.62 7.23 3.87 3.36 0.07 3.29 0.10 0.01 0.15 0.26
THRD TF Financial Corp. of PA 0.77 6.84 3.82 3.03 0.06 2.97 0.10 0.00 0.10 0.19
WHGB WHG Bancshares of MD(1) 0.77 7.20 3.46 3.74 0.06 3.68 0.03 0.00 0.10 0.13
</TABLE>
<PAGE>
(RESTUBBED FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
--------------- ------------- ----------------------------
MEMO: MEMO:
G&A Goodwill Net Extrao. Yield Cost Yld-Cost Assets/ Effective
Expense Amort. Gains Items On Assets Of Funds Spread FTE Emp. Tax Rate
------- ------- ----- ------- --------- -------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania SB of PA
- ---------------------
December 31, 1997 3.36 0.00 -0.01 0.00 7.49 4.57 2.92 2,874 32.76
SAIF-Insured Thrifts 2.19 0.02 0.07 0.00 7.63 4.82 2.81 4,371 37.12
State of PA 2.06 0.04 0.05 0.00 7.30 4.53 2.77 4,622 36.89
Comparable Group Average 2.13 0.02 0.04 0.00 7.47 4.61 2.85 4,308 37.30
Mid-Atlantic Companies 2.13 0.02 0.04 0.00 7.47 4.61 2.85 4,308 37.30
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
GAF GA Financial Corp. of PA 2.00 0.02 0.10 0.00 7.50 4.55 2.95 3,806 36.23
HRBF Harbor Federal Bancorp of MD 1.85 0.00 0.04 0.00 7.50 5.11 2.39 4,970 38.63
LARL Laurel Capital Group of PA 1.72 0.00 -0.01 0.00 7.58 4.36 3.21 4,268 36.73
PEEK Peekskill Fin. Corp. of NY(1) 1.80 0.00 0.00 0.00 6.78 4.23 2.55 7,250 42.65
PWBK Pennwood Bancorp, Inc. of PA(1) 2.74 0.00 -0.14 0.00 8.23 4.60 3.63 4,331 31.45
PHFC Pittsburgh Home Fin Corp of PA 1.80 0.01 0.17 0.00 7.70 5.34 2.37 4,682 34.81
PRBC Prestige Bancorp of PA 2.37 0.00 0.02 0.00 7.33 4.56 2.77 3,494 38.61
SFED SFS Bancorp of Schenectady NY 2.55 0.00 0.03 0.00 7.42 4.52 2.90 2,907 39.32
THRD TF Financial Corp. of PA 2.00 0.15 0.18 0.00 7.10 4.34 2.75 3,852 34.63
WHGB WHG Bancshares of MD(1) 2.51 0.00 -0.02 0.00 7.53 4.51 3.02 3,520 39.92
</TABLE>
(1) Financial information is for the quarter ending September 30, 1997.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
The Savings Bank's net interest margin equaled 3.39 percent based on
updated financial data, remaining somewhat lower than the Peer Group average
3.41 percent. Consistent with the financial data reported in the Original
Appraisal, the Savings Bank's operating expenses remain well above the Peer
Group average, equal to 3.36 percent and 2.15 percent, respectively. The higher
expenses are principally the result of the Savings Bank's involvement in
mortgage banking, operating a large number of branches, implementation of
infrastructure improvements and diversified operations. At the same time, the
activities continue to provide the Savings Bank with a higher level of
non-interest income, equal to 0.86 percent of assets versus an average of 0.20
percent for the Peer Group.
As a result of elimination of the SAIF assessment from the trailing
twelve month earnings base at December 31, 1997, both the Savings Bank's and the
Peer Group's level of non-operating losses in the Updated Appraisal was
considerably lower than the Original Appraisal. Non-operating losses totaled
0.01 percent of average assets for the Savings Bank versus a non-operating gain
of 0.04 percent for the Peer Group. Non-operating gains and losses are
eliminated from our calculation of core earnings for valuation purposes for both
the Savings Bank and the Peer Group. Both the Savings Bank and the Peer Group
companies are in a fully taxable position with effective tax rates in the range
of 32.76 and 37.3 percent, respectively.
3. Stock Market Conditions
Since the date of the Original Appraisal, the performance of the
overall stock market has been mixed. Lower interest rates provided for a
positive stock market environment in October 1997. However, in the intervening
months, the market has been impacted by congressional testimony by the Federal
Reserve Chairman, in which he indicated that it would be difficult to maintain
the current balance between tight labor markets and low inflation, disappointing
third quarter earnings in the technology the sector, and global selling pressure
led by the decline southeast asian stock markets driven by currency devaluations
and IMF-imposed "rescue plans". As the economies and currencies in Asia
suffered, the U.S. dollar tended to become a safe haven for foreign capital,
resulting in significant strengthening in the U.S. dollar, substantial rallies
in bond prices, and a general (and somewhat surprising) stability in the U.S.
equity markets. In mid-February, the yield on the 30-year bellwether Treasury
issue remained under 6.0 percent. In recent weeks, the U.S. stock market has
rebounded from early-1998 lows to reach new all-time highs, as continued
strength in the U.S. economy, low inflation, and a lowered level of fears about
economic troubles overseas has resulted in renewed confidence in the U.S. stock
market. On February 13, 1998, the DJIA closed at 8370.1, an increase of 5.7
percent since the date of the Original Appraisal (of 7917.3).
Since the Original Appraisal, thrift issues in general have
outperformed the overall stock market. Declining interest rates, continued
strong profitability and credit quality, and continued industry consolidation
have all contributed to gains in the prices of bank and thrift stocks. On
February 13, 1998, the SNL Index for all publicly-traded thrifts closed at
799.8, an increase of 10.2 percent since the date of the Original Appraisal (of
725.8). Consistent with the SNL index, the pricing measures for all
publicly-traded SAIF-insured thrifts were generally higher since the date of the
Original Appraisal. Comparatively, the pricing measures for the Peer Group
exhibited less notable increases since the date of the Original Appraisal.
Consistent with the original appraisal, the Peer Group maintained a lower
price-to-book ratio and a slightly higher price-to-core earnings multiple
relative to the comparative averages for all publicly-traded SAIF-insured
thrifts. Since the date of the Original Appraisal, eight of the ten Peer Group
companies were trading at higher prices as of February 13, 1998.
<PAGE>
Shown in Table 4 is a summary of recently completed conversions which
closed in the last three months. Relative to the Original Appraisal date, which
reflected pricing ratios as of September 19, 1997, the newly converted companies
increased in value by 5.8 percent on a tangible price-to-book basis, from an
average 120.65 percent pro forma P/TB ratio at September 19, 1997, to 127.68
percent as of February 13, 1998. Comparatively, a 12.4 percent decrease was
recorded in the pro forma core P/E multiple for the recent conversions over the
corresponding time frame.
Average Pricing Characteristics
<TABLE>
<CAPTION>
At Sept 19, At Feb. 13, %
1997 1998 Change
----------- ----------- ------
<S> <C> <C> <C>
Peer Group
- ----------
Price/Earnings(x) 24.46x 21.09x (13.8%)
Price/Core Earnings (x) 20.67 21.85 5.7
Price/Book (%) 126.64% 138.96% 9.7
Price/Tangible Book(%) 128.64 142.47 10.8
Price/Assets (%) 18.29 19.00 3.9
Avg. Market Capitalization ($Mil) $48.03 $48.58 1.2
SAIF-Insured Thrifts
- --------------------
Price/Earnings(x) 21.97x 19.91x (9.4%)
Price/Core Earnings (x) 19.24 20.80 8.1
Price/Book (%) 147.78% 162.17% 9.7
Price/Tangible Book (%) 151.64 167.08 10.2
Price/Assets (%) 18.07 20.38 12.8
Avg. Market Capitalization ($Mil) $163.37 $174.29 6.7
Recent Conversions Last Three Months(1)
- ---------------------------------------
Price/Core Earnings (x) 29.17x 25.56x (12.4%)
Price/Tangible Book (%) 120.65% 127.68% 5.8
</TABLE>
(1) Ratios based on conversions completed for prior three months.
Table 5 reflects the pricing characteristics and after-market trends
for second step conversions of mutual holding companies. The Savings Bank's pro
forma P/B ratio is priced at a premium relative to these transactions reflecting
today's strong market for thrift issues generally as well as new issues.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4
Market Pricing Comparatives
Prices As of February 13, 1998
<TABLE>
<CAPTION>
Market Per Share Data Pricing Ratios(3)
Capitalization --------------- ---------------------------------------
--------------- Core Book
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 23.36 174.29 1.06 14.70 19.91 162.17 20.38 167.08 20.80
Special Selection Grouping(8) 15.45 135.47 0.56 12.26 25.74 127.29 32.20 127.68 25.56
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
EBI Equality Bancorp, Inc. of MO 15.00 37.29 0.53 9.95 28.30 150.75 14.95 150.75 28.30
PEDE Great Pee Dee Bancorp of SC 15.50 33.82 0.56 13.51 27.68 114.73 43.44 114.73 27.68
GFED Guaranty Fed Bancshares of MO 13.06 81.26 0.49 10.70 26.65 122.06 32.65 122.06 26.65
HFWA Heritage Financial Corp of WA 14.75 143.80 0.49 9.34 NM 157.92 46.17 157.92 NM
HCBC High Country Bancorp of CO 14.88 19.69 0.38 12.86 NM 115.71 22.52 115.71 NM
MYST Mystic Financial of MA 16.56 44.89 0.52 13.00 NM 127.38 24.81 127.38 NM
SIB Staten Island Bancorp of NY 19.94 857.04 0.65 14.19 26.95 140.52 34.75 144.81 NM
TSBK Timberland Bancorp of WA 16.00 105.81 0.75 12.38 21.33 129.24 39.36 129.24 21.33
UCBC Union Community Bancorp of IN 14.31 43.53 0.58 13.40 24.67 106.79 38.96 106.79 24.67
UTBI United Tenn. Bancshares of TN 14.00 20.37 0.66 12.95 21.21 108.11 26.47 108.11 21.21
WSBI Warwick Community Bncrp of NY 16.00 102.62 0.55 12.60 29.09 126.98 30.18 126.98 29.09
</TABLE>
<PAGE>
(RESTUBBED TABLE FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- ------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ ---------------- --------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
- --------------------- ------ ------ ------- ------ ------- ------- ------- ------- ------- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 0.37 1.57 30.27 1,143 13.57 0.74 0.96 8.29 0.91 7.79
Special Selection Grouping(8) 0.04 0.31 8.38 402 25.69 0.53 1.20 4.67 1.19 4.61
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
EBI Equality Bancorp, Inc. of MO 0.24 1.60 45.28 249 9.92 NA 0.53 5.33 0.53 5.33
PEDE Great Pee Dee Bancorp of SC 0.00 0.00 0.00 78 37.86 0.45 1.57 4.15 1.57 4.15
GFED Guaranty Fed Bancshares of MO 0.23 1.76 46.94 249 26.75 0.64 1.23 4.58 1.23 4.58
HFWA Heritage Financial Corp of WA 0.00 0.00 0.00 311 29.23 0.05 1.53 5.25 1.53 5.25
HCBC High Country Bancorp of CO 0.00 0.00 0.00 87 19.46 0.23 0.58 2.95 0.58 2.95
MYST Mystic Financial of MA 0.00 0.00 0.00 181 19.47 0.24 0.78 4.00 0.78 4.00
SIB Staten Island Bancorp of NY 0.00 0.00 0.00 2,466 24.73 1.15 1.29 5.21 1.13 4.58
TSBK Timberland Bancorp of WA 0.00 0.00 0.00 269 30.46 NA 1.85 6.06 1.85 6.06
UCBC Union Community Bancorp of IN 0.00 0.00 0.00 112 36.48 0.59 1.58 4.33 1.58 4.33
UTBI United Tenn. Bancshares of TN 0.00 0.00 0.00 77 24.48 0.75 1.25 5.10 1.25 5.10
WSBI Warwick Community Bncrp of NY 0.00 0.00 0.00 340 23.76 0.69 1.04 4.37 1.04 4.37
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month
data, adjusted to omit non-operating items (including the SAIF assessment)
on a tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets;
P/TB = Price to tangible book value; and P/CORE = Price to estimated core
earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month earnings and average equity and assets
balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
(8) Includes Converted Last 3 Mths (no MHC);
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP Financial, LC.
Table 5
Pricing Characteristics and After-Market Trends
Second Step Conversions
<TABLE>
<CAPTION>
Institutional Information Pre-Conversion Data Offering Information
----------------------------------
Financial Info. Asset Quality
- ---------------------------------------------------------------------------------------------------------------------------------
Conversion Equity/ NPAs/ Res. Gross % of Exp./
Institution State Date Ticker Assets Assets Assets Cov. Proc. Mid. Proc.
- ----------- ----- ---- ------ ------ ------ ------ --- ----- --- -----
($Mil) (%) (%)(2) (%) ($Mil.) (%) (%)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Heritage Financial Corp. WA* 01/09/98 HFWA $ 249 11.39% 0.20% 537% $ 66.1 132% 2.1%
Guaranty Fed. Bancshares MO* 12/31/97 GFED 212 13.82% 0.64% 244% 43.6 132% 2.1%
Community Natl. Corp.(8) TN 12/12/97 CNLK 27 14.83% 0.69% 103% 4.9 132% 7.2%
Equality Bancorp, Inc. MO* 12/02/97 EBI 239 5.82% 0.29% 41% 13.2 115% 3.9%
Riverview Bancorp, Inc. WA* 10/01/97 RVSB 230 11.24% 0.14% 245% 35.7 132% 2.8%
Bayonne Bancshares NJ 08/22/97 FSNJ 577 8.33% 0.81% 53% 48.7 132% 3.8%
Montgomery Fin. Corp. IN 07/01/97 MONT 94 9.83% 0.91% 20% 11.9 132% 4.5%
Cumberland Mtn. Bncshrs. KY* 04/01/97 P. Sheet 92 5.14% 1.31% 19% 4.4 132% 8.0%
Kenwood Bancorp OH* 07/01/96 P. Sheet 48 6.88% 0.00% NM 1.6 102% 22.2%
Commonwealth Bancorp PA* 06/17/96 CMSB 2,054 6.71% 0.51% 109% 98.7 110% 1.9%
Westwood Financial Corp. NJ 06/07/96 WWFC 85 7.05% 0.00% NM 3.9 99% 9.9%
Jacksonville Bancorp TX 04/01/96 JXVL 198 10.47% 1.41% 36% 16.2 106% 4.4%
North Central Bancshares IA 03/21/96 FFFD 180 16.47% 0.17% 562% 26.0 106% 3.5%
Fidelity Financial of Ohio OH* 02/04/96 FFOH 227 13.23% 0.50% 69% 22.8 132% 3.2%
First Colorado Bancorp CO* 01/02/96 FFBA 1,400 12.71% 0.31% 20% 134.1 105% 1.9%
Charter Financial IL* 12/29/95 CBSB 293 12.17% 0.27% 281% 29.2 116% 3.4%
American National Bancorp MD* 11/03/95 ANBK 426 6.80% 2.23% 67% 21.8 132% 3.3%
First Defiance Fin. Corp. OH* 10/02/95 FDEF 476 15.27% 0.24% 135% 64.8 132% 2.3%
Community Bank Shares IN* 04/10/95 CBIN 205 7.00% 0.33% 80% 10.1 132% 4.4%
Fed One Bancorp WV* 01/19/95 FOBC 305 9.25% 0.32% 142% 16.1 85% 7.7%
Home Financial Corp. FL* 10/25/94 HOFL 1,005 13.43% 0.91% 44% 175.6 112% 3.1%
Jefferson Bancorp LA* 08/18/94 JEBC 257 6.26% 0.91% 25% 16.1 107% 3.9%
Averages - 2nd Step Conversions: $ 404 10.19% 0.60% 142% $ 39.3 119% 5.0%
Medians - 2nd Step Conversions: $ 235 10.15% 0.42% 75% $ 22.3 124% 3.7%
</TABLE>
<PAGE>
(TABLE RESTUBBED FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>
Institutional Information Insider Purchases(3) Pro Forma Data
--------------------------------------------------
Pricing Ratios(4) Financial Charac.
- ------------------------------------------------------------------------------------------------------------------------------------
Benefit Plans
--------------
Conversion Recog. Mgmt.& Core
Institution State Date Ticker ESOP Plans Dirs. P/TB P/E(5) P/A ROA TE/A ROE
- ----------- ----- ---- ------ ---- ----- ----- ---- ------ --- --- ---- ---
(%) (%) (%)(3) (%) (x) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Heritage Financial Corp. WA* 01/09/98 HFWA 2.0% 1.0% 1.3% 107.1% 20.3x 31.3% 1.5% 29.2% 5.3%
Guaranty Fed. Bancshares MO* 12/31/97 GFED 8.0% 4.0% 5.1% 93.5% 20.2 25.0% 1.2% 26.7% 4.6%
Community Natl. Corp.(8) TN 12/12/97 CNLK 0.0% 4.0% 17.6% 85.9% 17.1 22.9% 1.3% 26.7% 5.0%
Equality Bancorp, Inc. MO* 12/02/97 EBI 9.1% 5.0% 10.6% 100.5% 18.8 10.0% 0.5% 9.9% 5.4%
Riverview Bancorp, Inc. WA* 10/01/97 RVSB 8.0% 4.0% 2.9% 109.0% 17.7 23.6% 1.3% 21.6% 6.2%
Bayonne Bancshares NJ 08/22/97 FSNJ 8.0% 4.0% 10.0% 100.9 N.M. 14.6% N.M. 14.4% N.M.
Montgomery Fin. Corp. IN 07/01/97 MONT 8.0% 4.0% 4.6% 89.1% 24.1 16.0% 0.7% 17.9% 3.7%
Cumberland Mtn. Bncshrs. KY* 04/01/97 P. Sheet 6.2% 4.0% 4.5% 81.2% 13.8 7.1% 0.5% 8.8% 5.9%
Kenwood Bancorp OH* 07/01/96 P. Sheet 8.0% 4.0% 6.4% 67.6 N.M. 6.0% 0.1% 8.8% 1.7%
Commonwealth Bancorp PA* 06/17/96 CMSB 8.0% 4.0% 0.1% 109.3% 12.5 8.4% 0.7% 6.7% 10.4%
Westwood Financial Corp. NJ 06/07/96 WWFC 0.0% 0.0% 2.5% 80.0% 10.1 7.3% 0.7% 9.2% 7.9%
Jacksonville Bancorp TX 04/01/96 JXVL 8.0% 4.0% 2.0% 77.7% 14.9 12.6% 0.8% 16.2% 5.2%
North Central Bancshares IA 03/21/96 FFFD 3.2% 0.0% 0.5% 74.2% 12.5 19.7% 1.6% 26.5% 6.1%
Fidelity Financial of Ohio OH* 02/04/96 FFOH 8.0% 4.0% 5.6% 82.6% 18.1 16.6% 0.9% 20.0% 4.6%
First Colorado Bancorp CO* 01/02/96 FFBA 10.0% 2.0% 2.0% 87.0% 13.4 13.2% 1.0% 15.2% 6.9%
Charter Financial IL* 12/29/95 CBSB 3.3% 0.0% 0.1% 81.4% 12.3 15.5% 1.3% 19.1% 6.6%
American National Bancorp MD* 11/03/95 ANBK 8.0% 4.0% 0.6% 83.9% 17.7 9.0% 0.5% 10.7% 4.7%
First Defiance Fin. Corp. OH* 10/02/95 FDEF 8.0% 4.0% 0.9% 85.6% 18.2 20.6% 1.1% 24.1% 4.7%
Community Bank Shares IN* 04/10/95 CBIN 8.0% 0.0% 17.9% 85.5% 9.0 9.3% 0.9% 10.9% 8.3%
Fed One Bancorp WV* 01/19/95 FOBC 7.0% 4.0% 0.9% 67.9% 9.0 8.8% 1.0% 13.0% 7.6%
Home Financial Corp. FL* 10/25/94 HOFL 8.0% 4.0% 0.6% 86.4% 12.4 21.3% 2.0% 24.6% 8.2%
Jefferson Bancorp LA* 08/18/94 JEBC 7.0% 3.0% 1.5% 71.7% 10.2 7.9% 0.8% 11.1% 7.0%
Averages - 2nd Step Conversions: 6.5% 3.0% 4.5% 86.7% 15.1x 14.9% 1.0% 16.9% 6.0%
Medians - 2nd Step Conversions: 8.0% 4.0% 2.3% 85.6% 14.4x 13.9% 0.9% 15.7% 5.9%
</TABLE>
<TABLE>
<CAPTION>
Institutional Information Post-IPO Pricing Trends
----------------------------------------------------------
Closing Price:
- --------------------------------------------------------------- ----------------------------------------------------------
First After After
Conversion IPO Trading % First % First %
Institution State Date Ticker Price Day Change Week(6) Change Month(7) Change
- ----------- ----- ---- ------ ----- --- ------ ------- ------ -------- ------
($) ($) (%) ($) (%) ($) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Heritage Financial Corp. WA* 01/09/98 HFWA $ 10.00 $ 13.25 32.5% $ 13.25 32.5% $ 13.25 32.5%
Guaranty Fed. Bancshares MO* 12/31/97 GFED 10.00 12.88 28.8% 12.50 25.0% 12.50 25.0%
Community Natl. Corp.(8) TN 12/12/97 CNLK 10.00 11.56 15.6% 11.50 15.0% 11.13 11.3%
Equality Bancorp, Inc. MO* 12/02/97 EBI 10.00 13.44 34.4% 14.94 49.4% 13.69 36.9%
Riverview Bancorp, Inc. WA* 10/01/97 RVSB 10.00 13.19 31.9% 13.63 36.3% 13.25 32.5%
Bayonne Bancshares NJ 08/22/97 FSNJ 10.00 11.75 17.5% 11.88 18.8% 12.69 26.9%
Montgomery Fin. Corp. IN 07/01/97 MONT 10.00 11.13 11.3% 11.25 12.5% 12.13 21.3%
Cumberland Mtn. Bncshrs. KY* 04/01/97 P. Sheet 10.00 11.88 18.8% 12.38 23.8% 12.63 26.3%
Kenwood Bancorp OH* 07/01/96 P. Sheet 10.00 NT NA NT NA NT NA
Commonwealth Bancorp PA* 06/17/96 CMSB 10.00 10.50 5.0% 10.75 7.5% 10.00 0.0%
Westwood Financial Corp. NJ 06/07/96 WWFC 10.00 10.75 7.5% 10.38 3.8% 10.62 6.2%
Jacksonville Bancorp TX 04/01/96 JXVL 10.00 9.75 -2.5% 9.63 -3.7% 9.88 -1.2%
North Central Bancshares IA 03/21/96 FFFD 10.00 10.88 8.8% 10.69 6.9% 10.44 4.4%
Fidelity Financial of Ohio OH* 02/04/96 FFOH 10.00 10.50 5.0% 10.00 0.0% 10.13 1.3%
First Colorado Bancorp CO* 01/02/96 FFBA 10.00 11.44 14.4% 11.63 16.3% 12.00 20.0%
Charter Financial IL* 12/29/95 CBSB 10.00 10.81 8.1% 10.88 8.8% 11.38 13.8%
American National Bancorp MD* 11/03/95 ANBK 10.00 9.38 -6.2% 9.75 -2.5% 9.88 -1.2%
First Defiance Fin. Corp. OH* 10/02/95 FDEF 10.00 10.38 3.8% 10.31 3.1% 10.13 1.3%
Community Bank Shares IN* 04/10/95 CBIN 10.00 12.00 20.0% 12.75 27.5% 12.25 22.5%
Fed One Bancorp WV* 01/19/95 FOBC 10.00 11.00 10.0% 11.00 10.0% 11.62 16.2%
Home Financial Corp. FL* 10/25/94 HOFL 10.00 9.59 -4.1% 10.00 0.0% 10.31 3.1%
Jefferson Bancorp LA* 08/18/94 JEBC 10.00 13.00 30.0% 14.25 42.5% 14.25 42.5%
Averages - 2nd Step Conversions: $ 10.00 $ 11.38 13.8% $ 11.59 15.9% $ 11.63 16.3%
Medians - 2nd Step Conversions: $ 10.00 $ 11.13 11.3% $ 11.25 12.5% $ 11.62 16.2%
Note: * - Appraisal performed by RP Financial; "NT" - Not Traded; "NA" - Not Applicable, Not Available.
(1) Non-OTS regulated thrift. (5) Excludes impact of special SAIF assessment on earnings.
(2) As reported in summary pages of prospectus. (6) Latest price if offering less than one week old.
(3) Reflects purchases in second step offering as reported in (7) Latest price if offering more than one week but less
prospectus. than one month old.
(4) Does not take into account the adoption of SOP 93-6. (8) Simultaneously converted to commercial bank charter.
January 23, 1998
</TABLE>
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 12
Summary of Adjustments
We have changed only one key valuation parameter since the Original
Appraisal, as shown below.
Previous Current
Key Valuation Parameters: Valuation Adjustment Valuation Adjustment
- ------------------------- -------------------- --------------------
Financial Condition Moderate Downward No Change
Profitability, Growth and
Viability of Earnings Slight Downward No Change
Asset Growth Slight Upward No Change
Primary Market Area Slight Upward No Change
Dividends Slight Downward No Change
Liquidity of the Shares Slight Downward No Change
Marketing of the Issue No Adjustment Moderate Upward
Management No Adjustment No Change
Effect of Government Regulations
& Regulatory Reform No Adjustment No Change
There were no material changes in the updated financial condition of
the Savings Bank and the Peer Group and in their updated operating results. The
Savings Bank's balance sheet remained substantially unchanged while,
notwithstanding the improvement in the Savings Bank's operating results, both
reported earnings and core earnings remained below the Peer Group averages.
The factors concerning the valuation parameters of asset growth,
primary market area, dividends, liquidity of the shares, management and effect
of government regulation and regulatory reform did not change since the Original
Appraisal date. Accordingly, those parameters were not discussed further in this
update. The new issue market for thrift stocks remains strong with all the
recent issues being oversubscribed and trading above their IPO price.
Additionally, we also considered the increase in the Peer Group prices in the
range of 10 to 11 percent on a P/B basis coupled with the continued retention of
earnings by the Savings Bank through the quarter ended December 31, 1997. We
have also considered the increase in the trading price of the Savings Bank's
stock from $23.25 as of September 19, 1997 to $25.875 as of February 13, 1998,
but have discounted this factor somewhat given the limited trading volume and
the different characteristics of the minority shares versus the shares following
the second step conversion. Overall, taking into account the foregoing factors,
we believe that an increase in the Savings Bank's pro forma value is
appropriate.
Valuation Approaches
In applying the accepted valuation methodology promulgated by the OTS,
i.e., the pro forma market value approach, we considered the three key pricing
ratios in valuing the Savings Bank's to-be-issued stock -- the price/earnings
("P/E"), price/book ("P/B"), and price/assets ("P/A") approaches -- all
performed on a pro forma basis including the effects of the conversion proceeds
from selling the MHC's interest to the public. In computing the pro forma impact
of the conversion and the related pricing ratios, the valuation parameters for
effective tax rate, reinvestment rate, offering expenses and stock benefit plan
assumptions have been derived from the assumptions set forth in the prospectus.
The pro assumptions are summarized in Exhibits 3 and 4.
The current ownership percentage represented by the Public Shareholders
is 48.50 percent. However, pursuant to federal policy, the minority ownership
interest is required to be adjusted pursuant to a two-step process to reflect
both waived dividends and assets held by the MHC solely for the benefit of
depositors. There have
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 13
been no dividends waived by the MHC. There are approximately $247,000 of assets
held at the MHC level. Based upon the assets at the MHC, and our estimated pro
forma fully converted value of approximately $27.0 million, the resulting pro
forma ownership interest of the minority stockholders would be approximately
48.06 percent, based on this formula (see Exhibit 5). Our calculations for the
exchange ratio and the size of the offering were based upon this figure.
Consistent with the Original Appraisal, this updated appraisal
continues to be based primarily on fundamental analysis techniques applied to
the Peer Group, including the P/E approach, the P/B approach and the P/A
approach. To capture the anticipated aftermarket trading of the Savings Bank's
stock, the updated appraisal also incorporates a technical analysis of recently
completed stock conversions, including principally the P/B approach which (as
discussed in the Original Appraisal) is the most meaningful pricing ratio as the
pro forma P/E ratios reflect an assumed reinvestment rate and do not yet reflect
the actual use of proceeds.
Based on the foregoing, we have concluded that the pro forma market
value range of the Savings Bank's stock is subject to an increase. Therefore, as
of February 13, 1998, the pro forma market value of the Savings Bank's
conversion stock has been increased from $21,906,226 to $26,954,178 (please note
that this figure reflects rounding of the stock offering amount). This updated
midpoint value reflects a 23.0 percent increase in value relative to the
Original Appraisal.
The Savings Bank has adopted Statement of Position ("SOP" 93-6) which
will cause earnings per share computations to be based on shares issued and
outstanding excluding shares owned by an ESOP where there is not a commitment to
release such shares. For the purpose of preparing the pro forma pricing tables
and exhibits, we have reflected all shares issued in the offering including
shares purchased by the ESOP as outstanding to capture the full dilutive impact
of such stock to the Savings Bank's shareholders. However, we have considered
the impact of the Savings Bank's adoption of SOP 93-6 in the determination of
the Savings Bank's pro forma value.
1. P/TB Approach. Based on the updated midpoint value of $27.0
million, the Savings Bank's pro forma P/TB ratio at the midpoint equaled 99.53
percent, which approximates the increase in the Peer Group's book value based
pricing ratios since the date of the Original Appraisal. The resulting discount
relative to the Peer Group's average P/TB ratio equaled 30.1 percent versus 30.0
percent in the Original Appraisal. Relative to the average of recent
conversions, the Savings Bank's pro forma P/TB ratio was at a discount of 22.1
percent.
2. P/E Approach. The application of the P/E valuation method
requires calculating the Savings Bank's pro forma market value by applying a
valuation P/E multiple times the pro forma earnings base. Ideally, the pro forma
earnings base is composed principally of the Savings Bank's recurring earnings
base, that is, earnings adjusted to exclude any one-time non-operating items,
plus the estimated after-tax earnings benefit of the reinvestment of net
conversion proceeds. As shown below, the Savings Bank recorded non-operating
items during the twelve month period which were deemed non-operating and not
included in the core earnings base. The Savings Bank's core earnings were
calculated to equal the following (Note: the adjustments applied to the Peer
Group's earnings in the calculation of core earnings are shown in Exhibit 2,
including the SAIF assessment):
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 14
Amount
------
($000)
Net Income $708
Plus: Losses on RE 8
Plus: SAIF Assessment 0
Tax-Effect Adjustments @ 34% (3)
----
Adjusted (Core) Income After Tax $713
Based on the Savings Bank's core earnings, and incorporating
the impact of the pro forma assumptions discussed previously, the Savings Bank's
core P/E multiple at the midpoint value of $27.0 million equaled 26.00 times
(versus the 29.72 times midpoint valuation in the Original Appraisal).
Comparatively, the Peer Group posted an average core P/E multiple of 21.85
times, which indicated a premium of 19.0 percent in the Savings Bank's core P/E
multiple (versus a premium of 43.8 percent as indicated in the Original
Appraisal). The implied conversion pricing ratios relative to the Peer Group's
pricing ratios are indicated in Table 6, and the updated pro forma calculations
are detailed in Exhibits 3 and 4.
3. P/A Approach. P/A ratios are generally not as a reliable
indicator of market value, as investors do not place significant weight on total
assets as a determinant of market value. Investors place significantly greater
weight on book value and earnings -- which have received greater weight in our
valuation analysis. At the $27.0 million proposed closing value, the Savings
Bank exhibited a pro forma P/A ratio of 19.07 percent. In comparison to the Peer
Group's average P/A ratio of 19.00 percent, the Savings Bank's P/A ratio
indicated a premium of 0.4 percent (versus a discount of 10.7 percent at the
midpoint valuation in the Original Appraisal).
Summary
We have concluded that the Savings Bank's estimated pro forma market
value should be increased since the date of the Original Appraisal based on the
positive trends exhibited in the market for thrift stocks and the growth of the
Savings Bank's capital and earnings based on updated financial data.
Accordingly, it is our opinion, as of February 13, 1998 the aggregate pro forma
market value of the Savings Bank, inclusive of the sale of the MHC's ownership
interest in the Subscription and Community Offering was $26,954,178 at the
midpoint. Based on this valuation and the approximate 51.94 percent ownership
interest being sold in the Subscription and Community Offerings, the midpoint
value of the Holding Company's stock offering was $14,000,000 (i.e., 0.5194 x
$26,954,178), equal to 1,400,000 shares at a per share value of $10.00. Pursuant
to Federal conversion guidelines, the 15 percent offering range includes a
minimum offering value of $11,900,000 and a maximum value of $16,100,000. Based
on the $10.00 per share offering price, this range equates to an offering of
1,190,000 shares at the minimum to 1,610,000 shares at the maximum. The Holding
Company's offering also includes a provision for a superrange, which if
exercised, would result in an offering size of $18,515,000, equal to 1,851,500
shares at the $10.00 per share offering price. The comparative pro forma
valuation ratios relative to the Peer Group are shown in Tabley6, and the key
valuation assumptions are detailed in Exhibity3. The pro forma calculations for
the range are detailed in Exhibit 4.
<PAGE>
RP Financial, LC.
Board of Directors
February 13, 1998
Page 15
Establishment of Exchange Ratio
Federal regulations provide that in a conversion of a mutual holding company,
the minority stockholders are entitled to exchange their shares of the Savings
Bank's common stock for common stock of the Holding Company. The Board of
Trustees of the Savings Bank and Mutual Holding Company has independently
established a formula to determine the exchange ratio. The formula has been
designed to preserve the current aggregate percentage ownership in the Savings
Bank represented by the Public Savings Bank Shares, as adjusted to reflect the
contribution of assets of the MHC owned solely by depositors, which is an
approximate 48.06 percent ownership interest. Pursuant to the formula, the
Exchange Ratio will be determined at the end of the Holding Company's stock
offering based on the total number of shares sold in the offerings. Based upon
this formula, and the valuation conclusion and offering range concluded above,
the Exchange Ratio would be 1.9005 shares, 2.2358 shares, 2.5712 shares and
2.9569 shares of PSB Bancorp, Inc. stock issued for each public savings bank
share, at the minimum, midpoint, maximum and supermaximum of the offering,
respectively. The Exchange Ratio formula and share exchange procedures were
determined independently by the Boards of Trustees. RP Financial expresses no
opinion on the proposed exchange of Holding Company shares for the public
savings bank shares or on the proposed Exchange Ratio.
Respectfully submitted,
RP FINANCIAL, LC.
William E. Pommerening
Chief Executive Officer
<PAGE>
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 6
Public Market Pricing
Pennsylvania SB of PA and the Comparables
As of February 13, 1998
<TABLE>
<CAPTION>
Market Per Share Data Pricing Ratios(3)
Capitalization --------------- -----------------------------------
-------------- Core Book
Price/ Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
-------- ----- ------ ----- --- --- --- ---- ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania SB of PA
Superrange 10.00 35.65 0.32 8.71 31.21 114.76 24.53 114.78 31.08
Range Maximum 10.00 31.00 0.35 9.34 28.62 107.12 21.64 107.14 28.49
Range Midpoint 10.00 26.95 0.38 10.05 26.13 99.50 19.07 99.53 26.00
Range Minimum 10.00 22.91 0.43 11.02 23.37 90.77 16.42 90.79 23.25
SAIF-Insured Thrifts(s)
Averages 23.36 174.29 1.06 14.70 19.91 162.17 20.38 167.08 20.80
Medians -- -- -- -- 19.57 152.82 18.80 155.33 20.32
All Non-MHC State of PA(7)
Averages 22.10 174.68 1.16 12.92 18.35 176.94 15.77 186.29 19.83
Medians -- -- -- -- 17.31 164.25 14.63 179.57 19.62
Comparable Group Averages
Averages 20.50 48.58 0.93 15.04 21.09 138.96 19.00 142.47 21.85
Medians -- -- -- -- 21.95 133.71 18.15 133.53 22.48
State of PA
CVAL Chester Valley Bancorp of PA 30.00 65.07 1.38 13.23 20.69 226.76 19.98 226.76 21.74
CMSB Commonwealth Bancorp Inc of PA 19.75 320.88 0.77 13.22 19.55 149.39 14.14 189.18 25.65
FSBI Fidelity Bancorp, Inc. of PA 29.25 45.69 1.73 17.21 16.53 169.96 11.62 169.96 16.91
FBBC First Bell Bancorp of PA 18.25 118.83 1.14 11.21 15.73 162.80 17.59 162.80 16.01
FKFS First Keystone Fin. Corp of PA 17.00 41.02 1.00 10.26 15.60 165.69 10.98 165.69 17.00
SHEN First Shenango Bancorp of PA(7) 42.88 88.72 2.25 22.55 18.97 190.16 22.10 190.16 19.06
GAF GA Financial Corp. of PA 19.38 149.57 1.02 15.05 17.94 128.77 19.08 130.07 19.00
HARL Harleysville SB of PA 30.00 49.98 2.07 14.23 14.56 210.82 14.37 210.82 14.49
LARL Laurel Capital Group of PA 21.88 47.59 1.35 10.37 16.33 210.99 22.30 210.99 16.21
MLBC ML Bancorp of Villanova PA(7) 30.63 363.46 0.86 13.51 25.53 226.72 15.69 242.90 NM
PVSA Parkvale Financial Corp of PA 32.25 164.73 2.07 15.79 15.58 204.24 16.16 205.41 15.58
PWBC PennFirst Bancorp of PA 19.13 101.58 0.95 12.96 20.14 147.61 12.35 165.92 20.14
PWBK Pennwood Bancorp, Inc. of PA 21.00 11.97 0.91 15.33 25.30 136.99 25.12 136.99 23.08
PHFC Pittsburgh Home Fin Corp of PA 17.50 34.46 0.92 12.52 16.36 139.78 11.50 141.47 19.02
PRBC Prestige Bancorp of PA 18.88 17.28 0.84 17.08 21.95 110.54 12.06 110.54 22.48
PFNC Progress Financial Corp. of PA 16.00 65.02 0.70 5.73 18.18 279.23 14.89 313.11 22.86
SHSB SHS Bancorp, Inc. of PA 17.25 14.15 0.72 14.39 23.96 119.87 15.99 119.87 23.96
SVRN Sovereign Bancorp, Inc. of PA 20.19 1886.63 0.83 7.30 NM 276.58 13.16 333.17 24.33
THRD TF Financial Corp. of PA 25.50 81.27 1.30 15.72 16.67 162.21 13.61 194.36 19.62
USAB USABancshares, Inc of PA 10.00 7.32 0.28 7.40 NM 135.14 11.39 137.17 NM
WVFC WVS Financial Corp. of PA 35.00 61.36 2.15 17.76 16.43 197.07 21.01 197.07 16.28
YFED York Financial Corp. of PA 23.75 209.14 1.06 11.62 18.85 204.39 18.10 204.39 22.41
GAF GA Financial Corp. of PA 19.38 149.57 1.02 15.05 17.94 128.77 19.08 130.07 19.00
HRBF Harbor Federal Bancorp of MD 23.75 40.21 0.92 17.23 24.74 137.84 17.22 137.84 25.82
LARL Laurel Capital Group of PA 21.88 47.59 1.35 10.37 16.33 210.99 22.30 210.99 16.21
PEEK Peekskill Fin. Corp. of NY 16.25 50.81 0.67 15.13 24.25 107.40 28.04 107.40 24.25
PWBK Pennwood Bancorp, Inc. of PA 21.00 11.97 0.91 15.33 25.30 136.99 25.12 136.99 23.08
PHFC Pittsburgh Home Fin Corp of PA 17.50 34.46 0.92 12.52 16.36 139.78 11.50 141.47 19.02
PRBC Prestige Bancorp of PA 18.88 17.28 0.84 17.08 21.95 110.54 12.06 110.54 22.48
SFED SFS Bancorp of Schenectady NY 23.14 27.95 0.85 17.74 26.30 130.44 16.03 130.44 27.22
THRD TF Financial Corp. of PA 25.50 81.27 1.30 15.72 16.67 162.21 13.61 194.36 19.62
WHGB WHG Bancshares of MD 17.75 24.71 0.55 14.24 NM 124.65 25.07 124.65 NM
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Dividends(4)
----------------------
Amount/ Payout
Share Yield Ratio(5)
----- ----- --------
($) (%) (%)
<S> <C> <C> <C>
Pennsylvania SB of PA
Superrange 0.00 0.00 0.00
Range Maximum 0.00 0.00 0.00
Range Midpoint 0.00 0.00 0.00
Range Minimum 0.00 0.00 0.00
SAIF-Insured Thrifts(s)
Averages 0.37 1.57 30.27
Medians -- -- --
All Non-MHC State of PA(7)
Averages 0.34 1.42 27.16
Medians -- -- --
Comparable Group Averages
Averages 0.35 1.72 39.49
Medians -- -- --
State of PA
CVAL Chester Valley Bancorp of PA 0.44 1.47 31.88
CMSB Commonwealth Bancorp Inc of PA 0.28 1.42 36.36
FSBI Fidelity Bancorp, Inc. of PA 0.36 1.23 20.81
FBBC First Bell Bancorp of PA 0.40 2.19 35.09
FKFS First Keystone Fin. Corp of PA 0.10 0.59 10.00
SHEN First Shenango Bancorp of PA(7) 0.60 1.40 26.67
GAF GA Financial Corp. of PA 0.48 2.48 47.06
HARL Harleysville SB of PA 0.44 1.47 21.26
LARL Laurel Capital Group of PA 0.35 1.60 25.93
MLBC ML Bancorp of Villanova PA(7) 0.40 1.31 46.51
PVSA Parkvale Financial Corp of PA 0.52 1.61 25.12
PWBC PennFirst Bancorp of PA 0.36 1.88 37.89
PWBK Pennwood Bancorp, Inc. of PA 0.36 1.71 39.56
PHFC Pittsburgh Home Fin Corp of PA 0.24 1.37 26.09
PRBC Prestige Bancorp of PA 0.20 1.06 23.81
PFNC Progress Financial Corp. of PA 0.12 0.75 17.14
SHSB SHS Bancorp, Inc. of PA 0.00 0.00 0.00
SVRN Sovereign Bancorp, Inc. of PA 0.08 0.40 9.64
THRD TF Financial Corp. of PA 0.40 1.57 30.77
USAB USABancshares, Inc of PA 0.00 0.00 0.00
WVFC WVS Financial Corp. of PA 1.20 3.43 55.81
YFED York Financial Corp. of PA 0.52 2.19 49.06
GAF GA Financial Corp. of PA 0.48 2.48 47.06
HRBF Harbor Federal Bancorp of MD 0.48 2.02 52.17
LARL Laurel Capital Group of PA 0.35 1.60 25.93
PEEK Peekskill Fin. Corp. of NY 0.36 2.22 53.73
PWBK Pennwood Bancorp, Inc. of PA 0.36 1.71 39.56
PHFC Pittsburgh Home Fin Corp of PA 0.24 1.37 26.09
PRBC Prestige Bancorp of PA 0.20 1.06 23.81
SFED SFS Bancorp of Schenectady NY 0.32 1.38 37.65
THRD TF Financial Corp. of PA 0.40 1.57 30.77
WHGB WHG Bancshares of MD 0.32 1.80 58.18
</TABLE>
<PAGE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Financial Characteristics(6)
-------------------------------------------------------
Reported Core MEMO:
Total Equity/ NPAs/ ---------------- ------------ Exchange MEMO:
Assets Assets Assets ROA ROE ROA ROE Ratio Offering
------ ------ ------ --- --- --- --- ------- --------
($Mil) (%) (%) (%) (%) (%) (%) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pennsylvania SB of PA
Superrange 145 21.37 1.76 0.79 3.68 0.79 3.69 2.9569 18.5
Range Maximum 143 20.20 1.78 0.76 3.74 0.76 3.76 2.5712 16.1
Range Midpoint 141 19.16 1.80 0.73 3.81 0.73 3.83 2.2358 14.0
Range Minimum 140 18.09 1.83 0.70 3.88 0.71 3.90 1.9005 11.9
SAIF-Insured Thrifts(s)
Averages 1,143 13.57 0.74 0.96 8.29 0.91 7.79
Medians -- -- -- -- -- -- --
All Non-MHC State of PA(7)
Averages 1,234 9.41 0.70 0.89 9.86 0.85 9.48
Medians -- -- -- -- -- -- --
Comparable Group Averages
Averages 277 14.22 0.79 0.90 6.41 0.87 6.17
Medians -- -- -- -- -- -- --
State of PA
CVAL Chester Valley Bancorp of PA 326 8.81 0.55 1.00 11.61 0.96 11.05
CMSB Commonwealth Bancorp Inc of PA 2,269 9.47 0.42 0.73 7.51 0.56 5.72
FSBI Fidelity Bancorp, Inc. of PA 393 6.84 0.15 0.77 11.22 0.76 10.96
FBBC First Bell Bancorp of PA 676 10.80 0.09 1.10 10.10 1.08 9.93
FKFS First Keystone Fin. Corp of PA 373 6.63 NA 0.81 11.26 0.75 10.33
SHEN First Shenango Bancorp of PA(7) 401 11.62 NA 1.17 10.45 1.16 10.40
GAF GA Financial Corp. of PA 784 14.82 0.22 1.14 7.12 1.08 6.72
HARL Harleysville SB of PA 348 6.81 NA 1.02 15.58 1.02 15.66
LARL Laurel Capital Group of PA 213 10.57 0.42 1.39 13.35 1.40 13.45
MLBC ML Bancorp of Villanova PA(7) 2,316 6.92 0.43 0.70 9.91 0.50 7.10
PVSA Parkvale Financial Corp of PA 1,019 7.91 0.36 1.07 14.01 1.07 14.01
PWBC PennFirst Bancorp of PA 822 8.37 0.68 0.67 8.85 0.67 8.85
PWBK Pennwood Bancorp, Inc. of PA 48 18.34 1.49 0.99 5.21 1.09 5.71
PHFC Pittsburgh Home Fin Corp of PA 300 8.23 1.68 0.82 7.69 0.70 6.61
PRBC Prestige Bancorp of PA 143 10.91 0.43 0.60 5.15 0.58 5.03
PFNC Progress Financial Corp. of PA 437 5.33 NA 0.89 17.05 0.71 13.57
SHSB SHS Bancorp, Inc. of PA 88 13.34 1.43 0.67 5.00 0.67 5.00
SVRN Sovereign Bancorp, Inc. of PA 14,336 4.76 0.67 0.48 11.13 0.65 15.15
THRD TF Financial Corp. of PA 597 8.39 0.29 0.77 7.24 0.66 6.16
USAB USABancshares, Inc of PA 64 8.43 0.57 0.49 5.72 0.43 5.01
WVFC WVS Financial Corp. of PA 292 10.66 0.20 1.31 11.07 1.32 11.17
YFED York Financial Corp. of PA 1,156 8.85 2.22 0.96 11.41 0.81 9.60
GAF GA Financial Corp. of PA 784 14.82 0.22 1.14 7.12 1.08 6.72
HRBF Harbor Federal Bancorp of MD 234 12.49 NA 0.74 5.73 0.70 5.49
LARL Laurel Capital Group of PA 213 10.57 0.42 1.39 13.35 1.40 13.45
PEEK Peekskill Fin. Corp. of NY 181 26.10 0.90 1.14 4.28 1.14 4.28
PWBK Pennwood Bancorp, Inc. of PA 48 18.34 1.49 0.99 5.21 1.09 5.71
PHFC Pittsburgh Home Fin Corp of PA 300 8.23 1.68 0.82 7.69 0.70 6.61
PRBC Prestige Bancorp of PA 143 10.91 0.43 0.60 5.15 0.58 5.03
SFED SFS Bancorp of Schenectady NY 174 12.29 0.84 0.62 4.91 0.60 4.74
THRD TF Financial Corp. of PA 597 8.39 0.29 0.77 7.24 0.66 6.16
WHGB WHG Bancshares of MD 99 20.11 0.85 0.77 3.48 0.78 3.55
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) EPS (core basis) is based on actual trailing twelve month data, adjusted
to omit the impact of non-operating items (including the SAIF
assessment) on a tax effected basis, and is shown on a pro forma basis
where appropriate.
(3) P/E = Price to Earnings; P/B = Price to Book; P/A = Price to Assets;
P/TB = Price to Tangible Book; and P/CORE = Price to Core Earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend
declared.
(5) Indicated twelve month dividend as a percent of trailing twelve month
estimated core earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and total assets balances.
(7) Excludes from averages and medians those companies the subject of actual
or rumored acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP Financial, LC.
LIST OF EXHIBITS
Exhibit
Number Description
- ------ -----------
1 Stock Prices: February 13, 1998
2 Peer Group Core Earnings Analysis
3 Pro Forma Analysis Sheet
4 Pro Forma Effect of Conversion Proceeds
5 Impact of Waived Dividends
6 Firm Qualifications Statement
<PAGE>
EXHIBIT 1
Stock Prices
As of February 13, 1998
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ----------------------- --------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHC)
- ---------------------------------------------
SAIF-Insured Thrifts(308) 23.32 5,816 180.3 25.21 15.66 23.16 0.75 46.24 -0.38
NYSE Traded Companies(10) 41.77 43,859 2,133.7 46.07 26.20 42.02 0.18 39.22 -2.78
AMEX Traded Companies(20) 19.03 2,923 54.3 21.31 13.64 18.94 0.39 34.10 -2.73
NASDAQ Listed OTC Companies(278) 23.13 4,974 135.3 24.93 15.52 22.96 0.79 47.36 -0.13
California Companies(21) 28.02 17,486 817.0 31.25 18.43 27.94 1.49 36.37 -0.94
Florida Companies(5) 22.59 21,867 493.7 25.90 14.26 22.74 -0.29 40.70 -7.31
Mid-Atlantic Companies(58) 24.01 6,526 176.9 25.76 15.56 23.78 0.86 48.49 -2.38
Mid-West Companies(147) 21.72 3,894 110.9 23.30 14.66 21.54 0.72 46.17 0.31
New England Companies(9) 29.83 4,841 189.8 31.62 17.38 29.43 0.47 61.23 0.12
North-West Companies(11) 21.84 10,620 263.8 23.28 16.35 21.73 1.61 43.84 12.84
South-East Companies(44) 25.85 3,787 107.8 28.62 18.07 25.98 -0.27 45.22 -2.49
South-West Companies(6) 21.17 2,028 49.0 23.36 14.21 20.75 1.98 53.67 -5.58
Western Companies (Excl CA)(7) 21.47 4,838 119.7 22.07 14.95 20.96 2.80 44.96 2.86
Thrift Strategy(254) 22.14 3,831 96.4 23.95 15.17 22.00 0.77 45.27 -0.26
Mortgage Banker Strategy(33) 30.15 16,217 665.6 32.56 18.77 30.04 0.13 53.16 -2.41
Real Estate Strategy(9) 24.50 6,484 144.5 25.71 15.05 24.37 0.70 51.80 3.83
Diversified Strategy(8) 35.15 29,502 1,081.8 38.40 21.39 34.63 2.01 46.29 0.81
Retail Banking Strategy(4) 19.17 4,568 102.3 21.54 11.98 18.67 2.14 40.17 -3.92
Companies Issuing Dividends(258) 24.10 5,812 191.6 26.05 16.17 23.94 0.69 44.80 -1.10
Companies Without Dividends(50) 19.19 5,838 120.0 20.79 12.96 19.06 1.09 53.98 3.44
Equity/Assets <6%(26) 26.36 18,204 615.3 28.63 16.03 26.12 1.07 60.12 -2.07
Equity/Assets 6-12%(143) 25.75 6,099 217.1 27.65 16.11 25.52 0.83 53.30 -0.66
Equity/Assets >12%(139) 20.66 3,636 79.6 22.50 15.19 20.60 0.63 37.79 0.14
Converted Last 3 Mths (no MHC)(9) 14.69 4,134 60.7 15.24 12.79 14.38 2.18 57.36 17.78
Actively Traded Companies(37) 33.65 19,455 827.9 36.04 20.53 33.70 -0.22 55.23 -0.23
Market Value Below $20 Million(48) 17.60 875 14.6 19.00 12.70 17.49 0.47 40.87 -0.13
Holding Company Structure(280) 23.51 5,732 183.0 25.46 15.86 23.38 0.73 44.96 -0.34
Assets Over $1 Billion(59) 32.68 20,389 760.0 35.48 20.84 32.51 0.69 42.92 -2.81
Assets $500 Million-$1 Billion(48) 25.11 5,487 122.0 26.87 15.52 24.69 1.61 55.45 0.92
Assets $250-$500 Million(67) 23.10 3,055 66.2 25.00 15.49 22.90 1.17 53.35 0.74
Assets less than $250 Million(134) 19.16 1,554 28.1 20.75 13.77 19.13 0.28 41.08 -0.39
Goodwill Companies(123) 27.04 10,267 333.0 29.16 17.25 26.85 0.79 50.21 -1.20
Non-Goodwill Companies(185) 20.97 3,014 84.2 22.73 14.66 20.84 0.72 43.75 0.14
Acquirors of FSLIC Cases(10) 39.30 38,054 2,003.5 43.21 25.41 40.19 -2.29 39.58 -4.04
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- ----------------------------------------
($) ($) ($) ($) ($)
Market Averages. SAIF-Insured Thrifts(no MHC)
- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(308) 1.14 1.08 14.92 14.49 137.62
NYSE Traded Companies(10) 2.67 2.33 19.78 19.07 316.98
AMEX Traded Companies(20) 0.86 0.85 14.14 13.97 111.49
NASDAQ Listed OTC Companies(278) 1.12 1.07 14.84 14.40 134.59
California Companies(21) 1.69 1.53 16.77 16.17 242.04
Florida Companies(5) 1.13 0.82 11.64 11.09 167.41
Mid-Atlantic Companies(58) 1.23 1.19 14.93 14.15 154.52
Mid-West Companies(147) 1.02 0.98 14.39 14.12 117.81
New England Companies(9) 1.35 1.51 17.48 16.65 244.55
North-West Companies(11) 1.04 0.97 13.15 12.71 111.21
South-East Companies(44) 1.14 1.09 16.45 16.22 118.87
South-West Companies(6) 1.36 1.28 15.37 14.71 200.63
Western Companies (Excl CA)(7) 0.97 0.97 14.31 13.73 93.35
Thrift Strategy(254) 1.06 1.02 14.94 14.57 123.39
Mortgage Banker Strategy(33) 1.67 1.54 15.59 14.70 222.78
Real Estate Strategy(9) 1.60 1.46 13.91 13.52 197.41
Diversified Strategy(8) 1.71 1.55 13.64 13.34 175.77
Retail Banking Strategy(4) -0.31 -0.58 12.80 12.24 189.58
Companies Issuing Dividends(258) 1.20 1.14 15.24 14.77 138.28
Companies Without Dividends(50) 0.81 0.78 13.24 13.03 134.12
Equity/Assets <6%(26) 1.51 1.42 12.38 11.45 254.69
Equity/Assets 6-12%(143) 1.33 1.25 14.79 14.12 172.25
Equity/Assets >12%(139) 0.91 0.88 15.43 15.30 88.36
Converted Last 3 Mths (no MHC)(9) 0.56 0.56 11.89 11.89 50.54
Actively Traded Companies(37) 1.85 1.86 16.44 15.80 214.90
Market Value Below $20 Million(48) 0.80 0.76 13.91 13.85 103.77
Holding Company Structure(280) 1.13 1.08 15.15 14.71 137.54
Assets Over $1 Billion(59) 1.72 1.66 16.54 15.15 234.45
Assets $500 Million-$1 Billion(48) 1.29 1.15 13.87 13.42 155.02
Assets $250-$500 Million(67) 1.16 1.10 15.11 14.73 136.37
Assets less than $250 Million(134) 0.85 0.83 14.56 14.49 94.60
Goodwill Companies(123) 1.39 1.31 15.30 14.19 180.19
Non-Goodwill Companies(185) 0.98 0.94 14.68 14.68 110.82
Acquirors of FSLIC Cases(10) 2.59 2.38 19.92 18.89 294.49
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1996 or 1997.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public
(non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
- --------------------------------------------
BIF-Insured Thrifts(60) 26.51 14,446 627.1 28.15 16.97 26.21 1.37 55.44 -0.88
NYSE Traded Companies(4) 43.18 52,889 1,979.3 43.72 30.77 42.57 1.51 50.61 -1.23
AMEX Traded Companies(7) 25.84 1,720 47.6 26.88 15.21 25.46 1.84 66.32 2.94
NASDAQ Listed OTC Companies(49) 25.04 12,350 568.7 26.85 15.89 24.77 1.31 54.62 -1.29
California Companies(1) 19.75 7,871 155.5 21.25 14.00 19.00 3.95 23.44 2.60
Mid-Atlantic Companies(20) 26.74 19,086 618.7 28.54 18.42 26.51 1.03 49.43 -4.73
New England Companies(33) 26.25 4,555 132.0 27.71 15.68 25.79 1.96 64.80 1.46
North-West Companies(3) 34.40 89,713 5,854.0 37.02 22.65 34.98 -2.07 35.66 1.09
South-East Companies(3) 19.75 1,551 30.0 20.88 14.82 19.69 0.10 24.02 -3.81
Thrift Strategy(44) 25.47 6,490 210.6 26.98 16.55 25.08 1.75 55.57 -0.45
Mortgage Banker Strategy(7) 25.12 29,028 813.1 26.95 14.39 25.47 -1.95 70.46 -3.74
Real Estate Strategy(4) 20.94 5,839 119.8 22.69 14.50 20.32 3.13 31.97 -0.59
Diversified Strategy(5) 38.60 62,448 3,855.7 40.93 24.28 38.24 1.72 45.74 -0.96
Companies Issuing Dividends(49) 28.65 15,829 736.4 30.38 17.95 28.39 1.02 55.19 -2.10
Companies Without Dividends(11) 17.53 8,636 168.1 18.78 12.83 17.04 2.87 56.46 4.21
Equity/Assets <6%(4) 31.13 68,924 4,428.2 33.78 18.63 31.25 0.28 68.41 -1.76
Equity/Assets 6-12%(41) 27.78 9,447 331.6 29.38 16.80 27.45 1.33 60.13 -1.51
Equity/Assets >12%(15) 21.69 11,141 253.2 23.09 16.90 21.31 1.83 38.81 1.09
Converted Last 3 Mths (no MHC)(3) 17.50 17,369 334.9 18.31 16.21 16.73 4.77 63.92 17.63
Actively Traded Companies(18) 34.16 30,643 1,596.3 35.52 21.36 33.81 1.22 52.78 0.50
Market Value Below $20 Million(2) 12.35 1,046 13.6 13.13 7.47 12.19 1.72 50.01 -0.64
Holding Company Structure(47) 25.40 13,746 628.8 27.13 16.54 25.03 1.76 54.46 -0.32
Assets Over $1 Billion(17) 36.47 39,385 1,884.0 38.33 24.08 36.02 1.55 46.50 -1.99
Assets $500 Million-$1 Billion(16) 27.17 5,404 118.1 28.59 16.43 26.89 0.80 57.35 -1.11
Assets $250-$500 Million(12) 19.88 3,632 68.4 21.65 12.40 19.46 2.29 59.90 -3.13
Assets less than $250 Million(15) 19.84 1,546 29.6 21.27 12.84 19.74 0.91 60.64 2.32
Goodwill Companies(33) 29.85 22,069 1,043.8 31.38 18.55 29.53 1.29 58.48 -0.89
Non-Goodwill Companies(27) 22.62 5,553 141.0 24.38 15.12 22.32 1.47 51.88 -0.88
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
- --------------------------------------------
BIF-Insured Thrifts(60) 1.52 1.48 14.44 13.73 150.12
NYSE Traded Companies(4) 2.05 1.92 22.85 18.76 177.31
AMEX Traded Companies(7) 1.55 1.37 15.72 15.17 149.86
NASDAQ Listed OTC Companies(49) 1.47 1.45 13.51 13.10 147.62
California Companies(1) 1.52 1.52 12.28 12.23 114.54
Mid-Atlantic Companies(20) 1.17 1.12 15.46 14.33 140.33
New England Companies(33) 1.81 1.73 13.93 13.42 158.01
North-West Companies(3) 1.14 1.50 12.99 12.53 185.90
South-East Companies(3) 1.13 1.12 15.63 15.33 91.91
Thrift Strategy(44) 1.53 1.45 14.91 14.24 142.12
Mortgage Banker Strategy(7) 1.30 1.30 12.06 11.49 149.96
Real Estate Strategy(4) 1.72 1.61 11.40 11.38 106.01
Diversified Strategy(5) 1.58 1.86 14.88 13.45 230.38
Companies Issuing Dividends(49) 1.54 1.50 15.10 14.24 164.36
Companies Without Dividends(11) 1.43 1.39 11.67 11.61 90.34
Equity/Assets <6%(4) 1.24 1.30 10.25 9.81 202.98
Equity/Assets 6-12%(41) 1.75 1.69 14.26 13.37 168.20
Equity/Assets >12%(15) 0.97 0.94 16.21 15.92 85.20
Converted Last 3 Mths (no MHC)(3) 0.60 0.57 13.26 13.12 59.05
Actively Traded Companies(18) 2.00 1.95 17.15 16.26 192.73
Market Value Below $20 Million(2) 2.42 2.31 9.03 8.98 98.56
Holding Company Structure(47) 1.48 1.45 14.27 13.84 140.41
Assets Over $1 Billion(17) 1.71 1.75 17.52 15.80 189.07
Assets $500 Million-$1 Billion(16) 1.81 1.69 15.12 14.79 169.34
Assets $250-$500 Million(12) 1.21 1.15 11.37 11.06 114.11
Assets less than $250 Million(15) 1.31 1.24 12.80 12.65 118.80
Goodwill Companies(33) 1.62 1.58 15.45 14.13 182.62
Non-Goodwill Companies(27) 1.39 1.35 13.27 13.27 112.21
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1996 or 1997.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 24.23 8,497 55.9 26.65 13.25 23.98 1.58 91.99 -1.13
BIF-Insured Thrifts(3) 28.66 32,019 456.2 29.67 12.75 28.67 -0.58 116.68 -0.02
NASDAQ Listed OTC Companies(22) 24.79 11,437 106.0 27.03 13.18 24.57 1.31 95.08 -0.99
Florida Companies(3) 33.25 5,939 94.3 36.38 18.50 33.00 0.76 73.23 -1.98
Mid-Atlantic Companies(11) 21.53 11,207 56.8 23.41 10.31 21.34 1.50 119.75 -0.73
Mid-West Companies(6) 24.94 2,274 25.3 27.75 15.54 24.75 1.07 61.69 -0.38
New England Companies(1) 36.56 61,162 894.0 38.00 19.00 36.00 1.56 50.27 -3.79
Thrift Strategy(20) 24.43 6,290 46.7 26.69 13.28 24.21 1.43 94.48 -0.19
Mortgage Banker Strategy(1) 18.00 33,779 147.0 20.88 6.04 18.13 -0.72 148.28 -9.46
Diversified Strategy(1) 36.56 61,162 894.0 38.00 19.00 36.00 1.56 50.27 -3.79
Companies Issuing Dividends(22) 24.79 11,437 106.0 27.03 13.18 24.57 1.31 95.08 -0.99
Equity/Assets 6-12%(16) 26.50 14,221 132.8 28.95 13.34 26.20 1.72 102.63 -1.04
Equity/Assets >12%(6) 19.66 3,086 25.3 21.28 12.71 19.69 0.05 72.44 -0.86
Holding Company Structure(3) 24.50 2,565 24.3 27.17 11.75 24.67 -0.91 122.63 0.58
Assets Over $1 Billion(6) 25.30 37,131 337.8 27.07 12.61 24.78 3.06 90.00 -3.06
Assets $500 Million-$1 Billion(2) 34.25 5,095 84.6 39.75 18.75 34.00 0.74 76.73 -3.19
Assets $250-$500 Million(6) 27.69 3,386 32.5 31.00 15.08 27.75 -0.48 90.08 -2.49
Assets less than $250 Million(8) 21.48 2,262 18.5 22.92 11.63 21.28 1.41 103.46 1.36
Goodwill Companies(9) 25.41 25,705 234.9 27.43 12.95 25.24 1.32 98.06 -2.07
Non-Goodwill Companies(13) 24.41 2,877 28.6 26.79 13.33 24.16 1.30 93.29 -0.35
MHC Institutions(22) 24.79 11,437 106.0 27.03 13.18 24.57 1.31 95.08 -0.99
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 0.66 0.64 10.25 10.18 92.29
BIF-Insured Thrifts(3) 1.07 0.78 9.69 9.04 96.77
NASDAQ Listed OTC Companies(22) 0.71 0.66 10.18 10.04 92.85
Florida Companies(3) 1.00 0.89 14.22 14.18 146.68
Mid-Atlantic Companies(11) 0.53 0.53 8.73 8.49 73.54
Mid-West Companies(6) 0.79 0.77 11.13 11.10 101.00
New England Companies(1) 1.44 0.93 11.40 11.39 126.41
Thrift Strategy(20) 0.68 0.65 10.46 10.33 92.62
Mortgage Banker Strategy(1) 0.52 0.46 5.12 4.53 62.47
Diversified Strategy(1) 1.44 0.93 11.40 11.39 126.41
Companies Issuing Dividends(22) 0.71 0.66 10.18 10.04 92.85
Equity/Assets 6-12%(16) 0.77 0.69 10.20 10.01 103.90
Equity/Assets >12%(6) 0.56 0.56 10.13 10.13 59.71
Holding Company Structure(3) 0.76 0.70 9.28 8.64 89.05
Assets Over $1 Billion(6) 0.83 0.65 8.38 8.14 96.98
Assets $500 Million-$1 Billion(2) 1.07 0.98 15.79 15.79 139.20
Assets $250-$500 Million(6) 0.82 0.79 10.75 10.72 101.89
Assets less than $250 Million(8) 0.54 0.54 10.09 9.90 78.70
Goodwill Companies(9) 0.87 0.73 9.30 8.91 102.83
Non-Goodwill Companies(13) 0.62 0.62 10.71 10.71 86.86
MHC Institutions(22) 0.71 0.66 10.18 10.04 92.85
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1996 or 1997.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 60.00 93,156 5,589.4 66.94 35.25 62.38 -3.82 49.51 -10.37
CSA Coast Savings Financial of CA(8) 61.50 19,421 1,194.4 68.56 38.50 65.00 -5.38 40.57 -10.30
CFB Commercial Federal Corp. of NE 33.94 32,599 1,106.4 36.50 21.42 34.25 -0.91 40.95 -4.56
DME Dime Bancorp, Inc. of NY* 30.13 116,358 3,505.9 30.50 14.88 30.38 -0.82 79.88 -0.40
DSL Downey Financial Corp. of CA 29.31 26,756 784.2 29.94 18.10 29.94 -2.10 43.12 3.06
FED FirstFed Fin. Corp. of CA 37.94 10,588 401.7 39.50 22.50 37.56 1.01 58.08 -2.09
GSB Golden State Bancorp of CA(8) 36.56 51,023 1,865.4 38.00 22.50 36.75 -0.52 44.05 -2.35
GDW Golden West Fin. Corp. of CA 87.75 57,069 5,007.8 97.81 59.88 87.88 -0.15 22.93 -10.29
GPT GreenPoint Fin. Corp. of NY* 72.19 42,320 3,055.1 72.75 51.50 70.94 1.76 20.56 -0.51
JSB JSB Financial, Inc. of NY* 50.44 9,898 499.3 50.63 37.88 49.69 1.51 35.85 0.76
NYB New York Bancorp, Inc. of NY(8) 39.06 21,359 834.3 39.72 20.81 38.63 1.11 83.55 -1.66
OCN Ocwen Financial Corp. of FL 26.38 60,566 1,597.7 28.28 13.00 26.00 1.46 61.05 3.69
SIB Staten Island Bancorp of NY* 19.94 42,981 857.0 21.00 18.81 19.25 3.58 66.17 -4.78
WES Westcorp Inc. of Orange CA 17.06 26,279 448.3 23.50 13.25 16.13 5.77 -1.10 1.07
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares, Inc of LA 22.00 2,697 59.3 24.75 17.00 22.00 0.00 33.33 -5.90
ANE Alliance Bancorp of NE, of CT* 20.25 1,636 33.1 20.38 10.22 18.88 7.26 103.72 22.73
BKC American Bank of Waterbury CT* 48.50 2,321 112.6 49.50 28.00 48.38 0.25 73.96 -0.51
BFD BostonFed Bancorp of MA 21.13 5,520 116.6 22.31 14.38 21.38 -1.17 39.66 -3.43
CFX CFX Corp of Keene NH(8)* 29.63 24,071 713.2 30.63 15.50 29.44 0.65 62.36 -3.26
CNY Carver Bancorp, Inc. of NY 15.13 2,314 35.0 17.13 9.13 14.63 3.42 51.30 -6.89
CBK Citizens First Fin.Corp. of IL 19.75 2,397 47.3 21.38 14.63 20.00 -1.25 35.00 -2.47
EBI Equality Bancorp, Inc. of MO 15.00 2,486 37.3 15.38 12.00 14.38 4.31 50.00 3.45
ESX Essex Bancorp of Norfolk VA(8) 6.00 1,058 6.3 7.94 1.00 4.88 22.95 300.00 52.28
FCB Falmouth Bancorp, Inc. of MA* 19.75 1,455 28.7 22.00 13.25 19.81 -0.30 30.54 -3.66
FAB FirstFed America Bancorp of MA 20.38 8,707 177.4 22.13 13.63 20.38 0.00 35.87 -6.86
GAF GA Financial Corp. of PA 19.38 7,718 149.6 19.81 14.88 18.50 4.76 12.35 2.65
HBS Haywood Bancshares, Inc. of NC* 22.00 1,250 27.5 23.00 15.63 21.50 2.33 23.04 -2.22
KNK Kankakee Bancorp, Inc. of IL 33.88 1,372 46.5 37.75 26.00 33.75 0.39 31.57 -10.25
KYF Kentucky First Bancorp of KY 13.75 1,298 17.8 15.00 10.56 13.75 0.00 17.02 -7.97
MBB MSB Bancorp of Middletown NY(8)* 34.63 2,844 98.5 37.63 16.38 35.00 -1.06 82.26 -7.97
NBN Northeast Bancorp of ME* 18.69 1,940 36.3 19.50 8.96 18.75 -0.32 100.32 -1.63
PDB Piedmont Bancorp, Inc. of NC 10.75 2,751 29.6 11.63 10.00 11.00 -2.27 3.56 -1.19
SSB Scotland Bancorp, Inc. of NC 10.13 1,914 19.4 19.25 9.88 10.38 -2.41 -31.92 1.91
SZB SouthFirst Bancshares of AL 20.50 813 16.7 22.75 13.13 20.50 0.00 54.72 -9.89
SRN Southern Banc Company of AL 16.94 1,230 20.8 19.13 13.50 16.75 1.13 25.48 -4.56
SSM Stone Street Bancorp of NC 20.75 1,898 39.4 27.25 19.25 21.06 -1.47 -10.75 -6.49
TSH Teche Holding Company of LA 20.00 3,438 68.8 23.50 15.00 20.13 -0.65 29.03 -12.09
FTF Texarkana Fst. Fin. Corp of AR 28.25 1,760 49.7 28.25 15.63 27.50 2.73 68.66 13.00
THR Three Rivers Fin. Corp. of MI 22.38 824 18.4 23.50 13.75 22.13 1.13 57.05 2.90
WSB Washington SB, FSB of MD 7.88 4,395 34.6 9.50 4.88 7.94 -0.76 50.10 -13.02
WFI Winton Financial Corp. of OH 23.50 2,006 47.1 24.50 12.00 23.63 -0.55 95.83 15.31
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 26.25 1,090 28.6 29.29 18.25 27.25 -3.67 42.59 -10.38
FBER 1st Bergen Bancorp of NJ 19.00 2,865 54.4 20.00 12.88 18.38 3.37 36.89 -0.68
AFED AFSALA Bancorp, Inc. of NY 18.50 1,440 26.6 19.50 12.56 19.00 -2.63 42.31 -3.90
ALBK ALBANK Fin. Corp. of Albany NY 47.44 12,907 612.3 51.44 33.75 46.75 1.48 32.22 -7.78
AMFC AMB Financial Corp. of IN 17.50 964 16.9 17.75 13.13 17.50 0.00 31.78 10.20
ASBP ASB Financial Corp. of OH 14.00 1,700 23.8 14.13 11.50 13.38 4.63 13.09 5.66
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 4.08 3.58 20.57 17.56 501.08
CSA Coast Savings Financial of CA(8) 2.82 3.02 24.20 23.92 465.50
CFB Commercial Federal Corp. of NE 2.09 2.05 14.06 12.68 220.54
DME Dime Bancorp, Inc. of NY* 1.05 1.05 11.30 9.27 187.77
DSL Downey Financial Corp. of CA 1.49 1.43 15.61 15.41 218.79
FED FirstFed Fin. Corp. of CA 2.18 2.14 21.04 20.87 392.91
GSB Golden State Bancorp of CA(8) 1.94 2.08 18.19 16.28 322.06
GDW Golden West Fin. Corp. of CA 6.21 6.11 47.28 47.28 693.73
GPT GreenPoint Fin. Corp. of NY* 3.42 3.34 29.98 16.07 309.40
JSB JSB Financial, Inc. of NY* 2.97 2.64 35.91 35.91 154.68
NYB New York Bancorp, Inc. of NY(8) 2.48 2.53 8.34 8.34 152.85
OCN Ocwen Financial Corp. of FL 1.34 0.75 6.90 6.72 48.81
SIB Staten Island Bancorp of NY* 0.74 0.65 14.19 13.77 57.38
WES Westcorp Inc. of Orange CA 1.31 0.28 12.99 12.96 142.98
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares, Inc of LA 0.97 0.94 17.22 17.22 101.60
ANE Alliance Bancorp of NE, of CT* 1.15 1.06 10.89 10.63 147.87
BKC American Bank of Waterbury CT* 3.42 2.96 24.82 24.01 275.32
BFD BostonFed Bancorp of MA 1.28 1.14 14.78 14.24 176.57
CFX CFX Corp of Keene NH(8)* 0.58 0.78 10.21 9.84 117.20
CNY Carver Bancorp, Inc. of NY -0.20 0.09 15.24 14.66 179.67
CBK Citizens First Fin.Corp. of IL 0.79 0.53 15.84 15.84 114.14
EBI Equality Bancorp, Inc. of MO 0.53 0.53 9.95 9.95 100.33
ESX Essex Bancorp of Norfolk VA(8) 0.20 0.18 0.03 -0.14 181.37
FCB Falmouth Bancorp, Inc. of MA* 0.63 0.53 16.05 16.05 67.05
FAB FirstFed America Bancorp of MA 0.20 0.63 14.87 14.87 133.17
GAF GA Financial Corp. of PA 1.08 1.02 15.05 14.90 101.57
HBS Haywood Bancshares, Inc. of NC* 1.56 1.56 17.34 16.74 122.24
KNK Kankakee Bancorp, Inc. of IL 2.20 2.15 27.57 25.99 250.30
KYF Kentucky First Bancorp of KY 0.77 0.76 11.32 11.32 66.49
MBB MSB Bancorp of Middletown NY(8)* 0.49 0.52 22.40 10.38 272.15
NBN Northeast Bancorp of ME* 0.97 0.76 9.52 8.41 136.83
PDB Piedmont Bancorp, Inc. of NC 0.54 0.54 7.66 7.66 47.32
SSB Scotland Bancorp, Inc. of NC 0.58 0.58 7.73 7.73 32.12
SZB SouthFirst Bancshares of AL 0.61 0.56 16.76 16.76 117.82
SRN Southern Banc Company of AL 0.12 0.43 14.58 14.43 85.72
SSM Stone Street Bancorp of NC 0.86 0.86 16.32 16.32 55.20
TSH Teche Holding Company of LA 1.12 1.07 15.81 15.81 117.54
FTF Texarkana Fst. Fin. Corp of AR 1.72 1.68 15.52 15.52 102.42
THR Three Rivers Fin. Corp. of MI 1.00 0.94 15.74 15.69 114.34
WSB Washington SB, FSB of MD 0.52 0.31 5.13 5.13 60.27
WFI Winton Financial Corp. of OH 1.61 1.32 11.60 11.37 161.76
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 1.81 1.18 21.08 20.71 234.80
FBER 1st Bergen Bancorp of NJ 0.71 0.71 13.57 13.57 99.39
AFED AFSALA Bancorp, Inc. of NY 0.85 0.85 14.32 14.32 111.39
ALBK ALBANK Fin. Corp. of Albany NY 3.36 3.34 27.86 21.64 316.35
AMFC AMB Financial Corp. of IN 1.06 0.67 15.32 15.32 103.74
ASBP ASB Financial Corp. of OH 0.64 0.60 10.30 10.30 66.15
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ABBK Abington Bancorp of MA* 21.00 3,637 76.4 22.00 10.19 21.63 -2.91 93.01 0.00
AABC Access Anytime Bancorp of NM 10.63 1,217 12.9 11.38 5.15 10.75 -1.12 106.41 -3.36
AFBC Advance Fin. Bancorp of WV 20.38 1,084 22.1 20.75 13.50 20.13 1.24 45.57 17.26
AADV Advantage Bancorp, Inc. of WI(8) 67.00 3,236 216.8 70.88 32.75 67.50 -0.74 103.77 -5.47
AFCB Affiliated Comm BC, Inc of MA(8) 35.63 6,504 231.7 37.75 19.00 35.63 0.00 79.95 -5.62
ALBC Albion Banc Corp. of Albion NY 12.00 750 9.0 14.17 5.50 12.69 -5.44 110.16 -9.98
ABCL Alliance Bancorp, Inc. of IL 25.25 8,022 202.6 28.38 18.50 26.00 -2.88 32.89 -4.72
ATSB AmTrust Capital Corp. of IN 14.75 510 7.5 14.75 11.50 14.25 3.51 28.26 6.27
AHCI Ambanc Holding Co., Inc. of NY* 17.00 4,306 73.2 19.50 12.69 17.13 -0.76 29.47 -9.33
ASBI Ameriana Bancorp of IN 20.25 3,231 65.4 22.00 15.25 20.50 -1.22 23.63 1.86
ABCW Anchor Bancorp Wisconsin of WI 37.00 9,054 335.0 37.50 20.50 36.00 2.78 78.31 1.70
ANDB Andover Bancorp, Inc. of MA* 40.00 5,168 206.7 42.00 26.25 39.50 1.27 40.35 -0.62
ASFC Astoria Financial Corp. of NY 55.13 26,198 1,444.3 58.13 34.75 54.38 1.38 37.83 -1.11
AVND Avondale Fin. Corp. of IL 15.63 3,324 52.0 18.88 12.75 15.63 0.00 -14.96 -3.82
BKCT Bancorp Connecticut of CT* 19.00 5,092 96.7 25.00 10.75 17.63 7.77 66.96 -9.52
BPLS Bank Plus Corp. of CA 12.94 19,367 250.6 13.75 9.63 13.25 -2.34 6.68 2.45
BNKU Bank United Corp. of TX 44.81 31,596 1,415.8 49.88 28.25 43.13 3.90 56.51 -8.44
BWFC Bank West Fin. Corp. of MI 12.75 2,623 33.4 17.50 7.50 13.13 -2.89 66.23 -20.95
BANC BankAtlantic Bancorp of FL 16.38 25,760 421.9 17.13 12.13 16.38 0.00 9.20 -2.21
BKUNA BankUnited Fin. Corp. of FL 13.06 14,209 185.6 15.63 8.50 13.06 0.00 35.62 -15.25
BVCC Bay View Capital Corp. of CA 32.63 12,070 393.8 37.25 22.63 32.38 0.77 17.84 -9.99
FSNJ Bayonne Banchsares of NJ 13.50 8,993 121.4 13.56 7.93 13.00 3.85 72.19 0.90
BFSB Bedford Bancshares, Inc. of VA 29.00 1,142 33.1 34.75 18.88 30.00 -3.33 50.65 -14.71
BFFC Big Foot Fin. Corp. of IL 23.06 2,513 57.9 23.25 13.75 22.50 2.49 64.71 9.81
BYFC Broadway Fin. Corp. of CA 12.75 831 10.6 13.75 10.25 12.75 0.00 24.39 -3.77
CBES CBES Bancorp, Inc. of MO 24.00 1,015 24.4 24.75 15.88 23.00 4.35 50.00 7.87
CCFH CCF Holding Company of GA 20.50 902 18.5 21.50 14.32 21.50 -4.65 40.89 1.84
CENF CENFED Financial Corp. of CA(8) 42.75 5,959 254.7 45.00 26.38 44.50 -3.93 45.80 -5.00
CFSB CFSB Bancorp of Lansing MI 29.13 7,607 221.6 29.38 12.20 28.88 0.87 138.77 10.97
CKFB CKF Bancorp of Danville KY 19.63 867 17.0 20.50 17.75 19.13 2.61 9.06 6.11
CNSB CNS Bancorp, Inc. of MO 17.50 1,653 28.9 21.50 15.00 18.00 -2.78 12.90 -14.63
CSBF CSB Financial Group Inc of IL 13.13 902 11.8 13.50 10.13 13.50 -2.74 25.05 -2.74
CBCI Calumet Bancorp of Chicago IL 37.00 3,141 116.2 37.75 22.83 37.75 -1.99 57.45 11.28
CAFI Camco Fin. Corp. of OH 25.38 3,217 81.6 27.00 14.88 25.25 0.51 69.20 -0.47
CMRN Cameron Fin. Corp. of MO 19.25 2,562 49.3 21.00 15.88 19.25 0.00 19.34 -6.10
CAPS Capital Savings Bancorp of MO(8) 23.25 1,891 44.0 25.25 12.75 22.88 1.62 66.07 -7.92
CFNC Carolina Fincorp of NC* 17.50 1,852 32.4 18.75 14.00 17.88 -2.13 25.00 -5.41
CASB Cascade Financial Corp. of WA 15.50 3,395 52.6 16.80 11.60 13.50 14.81 15.67 16.98
CATB Catskill Fin. Corp. of NY* 18.00 4,630 83.3 19.13 13.94 17.63 2.10 17.04 -4.66
CNIT Cenit Bancorp of Norfolk VA 73.00 1,654 120.7 80.00 40.00 74.50 -2.01 61.33 -8.18
CEBK Central Co-Op. Bank of MA* 29.50 1,965 58.0 30.25 15.88 29.50 0.00 69.74 3.51
CENB Century Bancorp, Inc. of NC 85.50 407 34.8 92.00 64.00 90.25 -5.26 33.59 0.88
CBSB Charter Financial Inc. of IL(8) 26.88 4,150 111.6 27.13 15.63 27.13 -0.92 68.00 6.96
COFI Charter One Financial of OH 59.88 63,849 3,823.3 64.00 40.24 59.88 0.00 31.00 -5.15
CVAL Chester Valley Bancorp of PA 30.00 2,169 65.1 31.00 14.29 29.75 0.84 96.85 2.56
CTZN CitFed Bancorp of Dayton OH(8) 51.63 13,003 671.3 51.88 22.00 51.56 0.14 112.21 32.38
CLAS Classic Bancshares, Inc. of KY 18.88 1,300 24.5 18.88 12.25 18.13 4.14 38.52 12.72
CBSA Coastal Bancorp of Houston TX 30.75 5,009 154.0 35.50 22.75 30.75 0.00 21.78 -11.84
CFCP Coastal Fin. Corp. of SC 22.75 4,674 106.3 27.75 16.13 21.75 4.60 37.88 -7.14
CMSB Commonwealth Bancorp Inc of PA 19.75 16,247 320.9 21.63 13.50 19.50 1.28 31.67 -0.65
CMSV Commty. Svgs, MHC of FL (48.5) 34.25 5,095 84.6 39.75 18.75 34.00 0.74 76.73 -3.19
CFTP Community Fed. Bancorp of MS 18.50 4,629 85.6 21.00 16.38 18.75 -1.33 -2.01 -8.64
CFFC Community Fin. Corp. of VA 26.75 1,275 34.1 27.63 21.50 26.38 1.40 18.89 -3.18
CFBC Community First Bnkg Co. of GA 42.75 2,414 103.2 44.50 31.88 42.75 0.00 113.75 -2.84
CIBI Community Inv. Bancorp of OH 16.00 902 14.4 17.50 11.33 16.75 -4.48 37.10 -0.99
</TABLE>
<PAGE>
[RSTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ABBK Abington Bancorp of MA* 1.20 1.06 9.99 9.09 146.27
AABC Access Anytime Bancorp of NM 1.26 1.17 7.51 7.51 86.80
AFBC Advance Fin. Bancorp of WV 0.84 0.81 15.17 15.17 99.66
AADV Advantage Bancorp, Inc. of WI(8) 3.57 3.13 31.79 29.74 317.22
AFCB Affiliated Comm BC, Inc of MA(8) 1.77 1.76 16.94 16.85 173.52
ALBC Albion Banc Corp. of Albion NY 0.44 0.43 8.09 8.09 94.41
ABCL Alliance Bancorp, Inc. of IL 1.28 1.42 16.32 16.13 170.01
ATSB AmTrust Capital Corp. of IN 0.56 0.32 14.93 14.78 136.64
AHCI Ambanc Holding Co., Inc. of NY* -0.61 -0.69 13.98 13.98 122.92
ASBI Ameriana Bancorp of IN 1.13 1.03 13.63 13.63 121.64
ABCW Anchor Bancorp Wisconsin of WI 2.09 1.95 13.82 13.58 215.90
ANDB Andover Bancorp, Inc. of MA* 2.56 2.50 20.72 20.72 255.95
ASFC Astoria Financial Corp. of NY 2.56 2.38 32.42 22.56 401.88
AVND Avondale Fin. Corp. of IL -3.54 -3.60 13.86 13.86 179.58
BKCT Bancorp Connecticut of CT* 1.16 1.03 9.22 9.22 87.00
BPLS Bank Plus Corp. of CA 0.65 0.73 9.36 8.53 215.20
BNKU Bank United Corp. of TX 2.52 2.21 19.39 18.89 396.36
BWFC Bank West Fin. Corp. of MI 0.43 0.32 8.83 8.83 64.65
BANC BankAtlantic Bancorp of FL 1.06 0.56 6.08 5.04 110.44
BKUNA BankUnited Fin. Corp. of FL 0.38 0.29 9.13 8.10 213.16
BVCC Bay View Capital Corp. of CA 1.16 1.58 14.39 11.94 268.97
FSNJ Bayonne Banchsares of NJ 0.25 0.35 10.58 10.58 67.73
BFSB Bedford Bancshares, Inc. of VA 1.42 1.41 17.41 17.41 119.88
BFFC Big Foot Fin. Corp. of IL 0.51 0.45 15.09 15.09 86.06
BYFC Broadway Fin. Corp. of CA 0.42 0.48 14.77 14.77 150.11
CBES CBES Bancorp, Inc. of MO 1.10 0.96 17.28 17.28 109.48
CCFH CCF Holding Company of GA 0.15 -0.16 12.92 12.92 121.22
CENF CENFED Financial Corp. of CA(8) 2.41 2.17 21.51 21.48 386.76
CFSB CFSB Bancorp of Lansing MI 1.40 1.31 8.88 8.88 112.12
CKFB CKF Bancorp of Danville KY 1.29 0.97 15.87 15.87 72.51
CNSB CNS Bancorp, Inc. of MO 0.47 0.47 14.34 14.34 58.93
CSBF CSB Financial Group Inc of IL 0.27 0.23 12.92 12.19 53.81
CBCI Calumet Bancorp of Chicago IL 2.54 2.56 25.98 25.98 154.93
CAFI Camco Fin. Corp. of OH 1.75 1.42 15.22 14.12 161.82
CMRN Cameron Fin. Corp. of MO 0.98 0.98 17.43 17.43 82.94
CAPS Capital Savings Bancorp of MO(8) 1.25 1.20 12.08 12.08 128.08
CFNC Carolina Fincorp of NC* 0.70 0.68 13.91 13.91 61.59
CASB Cascade Financial Corp. of WA 0.74 0.72 8.63 8.63 124.46
CATB Catskill Fin. Corp. of NY* 0.82 0.82 15.48 15.48 63.64
CNIT Cenit Bancorp of Norfolk VA 3.39 3.15 29.47 26.99 424.25
CEBK Central Co-Op. Bank of MA* 1.49 1.41 18.05 16.26 182.40
CENB Century Bancorp, Inc. of NC 4.19 4.20 75.12 75.12 248.00
CBSB Charter Financial Inc. of IL(8) 1.31 1.44 14.08 12.54 93.26
COFI Charter One Financial of OH 1.97 2.88 21.56 20.15 309.48
CVAL Chester Valley Bancorp of PA 1.45 1.38 13.23 13.23 150.14
CTZN CitFed Bancorp of Dayton OH(8) 2.10 2.10 16.14 14.74 266.12
CLAS Classic Bancshares, Inc. of KY 0.82 0.96 15.13 12.85 101.68
CBSA Coastal Bancorp of Houston TX 2.40 2.46 20.29 17.06 584.86
CFCP Coastal Fin. Corp. of SC 1.31 1.10 7.21 7.21 120.64
CMSB Commonwealth Bancorp Inc of PA 1.01 0.77 13.22 10.44 139.63
CMSV Commty. Svgs, MHC of FL (48.5) 1.07 0.98 15.79 15.79 139.20
CFTP Community Fed. Bancorp of MS 0.61 0.61 13.15 13.15 49.40
CFFC Community Fin. Corp. of VA 1.50 1.51 18.99 18.99 143.75
CFBC Community First Bnkg Co. of GA 0.96 0.96 29.10 28.71 163.45
CIBI Community Inv. Bancorp of OH 1.03 1.03 12.29 12.29 104.58
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
COOP Cooperative Bancshares of NC 20.25 2,984 60.4 25.00 10.00 20.75 -2.41 102.50 -17.35
CRZY Crazy Woman Creek Bncorp of WY 16.00 955 15.3 16.13 13.00 15.88 0.76 19.58 6.67
DNFC D&N Financial Corp. of MI 25.75 9,099 234.3 26.75 15.68 24.38 5.62 56.25 -2.83
DCBI Delphos Citizens Bancorp of OH 21.75 1,946 42.3 21.75 12.44 21.75 0.00 55.36 4.82
DIME Dime Community Bancorp of NY* 21.25 12,438 264.3 25.50 16.63 21.00 1.19 17.21 -10.53
DIBK Dime Financial Corp. of CT* 29.50 5,164 152.3 32.00 18.00 29.13 1.27 53.25 -3.28
EGLB Eagle BancGroup of IL 19.91 1,178 23.5 20.50 14.75 20.13 -1.09 24.44 5.46
EBSI Eagle Bancshares of Tucker GA 21.06 5,666 119.3 22.38 15.25 20.88 0.86 30.56 -4.27
EGFC Eagle Financial Corp. of CT(8) 52.75 6,514 343.6 55.00 26.75 52.50 0.48 83.48 -4.09
ETFS East Texas Fin. Serv. of TX 22.00 1,026 22.6 23.75 16.88 22.00 0.00 20.55 -7.37
ESBK Elmira Svgs Bank (The) of NY* 28.25 742 21.0 30.38 17.14 30.00 -5.83 62.54 -5.83
EMLD Emerald Financial Corp. of OH 22.38 5,073 113.5 24.75 11.38 21.63 3.47 98.93 1.13
EIRE Emerald Isle Bancorp of MA(8)* 32.81 2,314 75.9 32.81 17.00 32.69 0.37 93.00 1.93
EFBC Empire Federal Bancorp of MT 17.25 2,592 44.7 18.25 12.50 17.00 1.47 23.21 0.70
EFBI Enterprise Fed. Bancorp of OH 34.00 1,986 67.5 35.00 14.75 34.13 -0.38 115.87 7.94
EQSB Equitable FSB of Wheaton MD 28.00 1,205 33.7 28.00 15.75 27.38 2.26 75.00 5.66
FCBF FCB Fin. Corp. of Neenah WI 33.00 3,879 128.0 33.31 20.13 33.00 0.00 48.31 11.86
FFDF FFD Financial Corp. of OH 18.13 1,445 26.2 19.50 13.00 18.88 -3.97 29.50 0.72
FFLC FFLC Bancorp of Leesburg FL 19.63 3,744 73.5 23.50 13.80 19.63 0.00 42.25 -9.75
FFFC FFVA Financial Corp. of VA(8) 38.50 4,581 176.4 40.00 20.50 36.50 5.48 62.11 -1.61
FFWC FFW Corporation of Wabash IN 19.63 1,430 28.1 21.50 12.25 18.50 6.11 65.24 3.32
FFYF FFY Financial Corp. of OH 35.38 4,070 144.0 35.38 25.00 32.00 10.56 40.12 6.79
FMCO FMS Financial Corp. of NJ 34.75 2,388 83.0 35.50 18.75 33.50 3.73 71.60 -2.11
FFHH FSF Financial Corp. of MN 20.25 3,015 61.1 21.00 16.00 20.00 1.25 24.62 -3.30
FOBC Fed One Bancorp of Wheeling WV 32.38 2,375 76.9 34.00 17.00 29.13 11.16 86.31 17.75
FBCI Fidelity Bancorp of Chicago IL 24.50 2,814 68.9 26.00 18.00 24.03 1.96 36.11 -4.41
FSBI Fidelity Bancorp, Inc. of PA 29.25 1,562 45.7 29.25 18.41 27.25 7.34 49.62 0.86
FFFL Fidelity Bcsh MHC of FL (47.7) 32.25 6,783 104.0 33.00 18.25 32.00 0.78 69.74 -0.77
FFED Fidelity Fed. Bancorp of IN 9.00 3,128 28.2 10.50 7.50 9.25 -2.70 0.00 -12.71
FFOH Fidelity Financial of OH 17.25 5,593 96.5 18.25 12.25 17.25 0.00 39.34 11.29
FIBC Financial Bancorp, Inc. of NY 23.88 1,710 40.8 25.75 14.88 23.88 0.00 32.67 -1.04
FBSI First Bancshares, Inc. of MO 16.38 2,186 35.8 17.00 9.50 16.50 -0.73 61.70 4.80
FBBC First Bell Bancorp of PA 18.25 6,511 118.8 19.38 13.63 18.00 1.39 35.19 -3.95
SKBO First Carnegie MHC of PA(45.0) 18.88 2,300 19.5 19.88 11.63 18.63 1.34 88.80 0.69
FSTC First Citizens Corp of GA 31.00 2,742 85.0 35.50 14.17 32.00 -3.13 105.57 -8.82
FCME First Coastal Corp. of ME* 14.69 1,359 20.0 15.75 8.38 14.75 -0.41 63.22 -1.28
FFBA First Colorado Bancorp of CO 25.00 16,808 420.2 26.13 16.00 24.75 1.01 48.10 5.26
FDEF First Defiance Fin.Corp. of OH 15.31 8,528 130.6 16.25 12.13 15.25 0.39 22.48 -4.31
FESX First Essex Bancorp of MA* 22.50 7,536 169.6 23.25 14.50 21.50 4.65 53.79 -3.23
FFSX First FSB MHC Sxld of IA(46.1) 30.50 2,834 39.7 35.00 20.75 31.00 -1.61 45.24 -3.94
FFES First Fed of E. Hartford CT 38.50 2,706 104.2 39.00 23.00 37.00 4.05 52.48 3.36
BDJI First Fed. Bancorp. of MN 20.75 1,009 20.9 22.00 11.83 20.75 0.00 68.29 -5.68
FFBH First Fed. Bancshares of AR 27.00 4,896 132.2 27.00 17.50 24.13 11.89 42.11 13.68
FTFC First Fed. Capital Corp. of WI 30.38 9,191 279.2 34.00 16.83 30.50 -0.39 64.22 -10.33
FFKY First Fed. Fin. Corp. of KY 21.50 4,144 89.1 23.50 18.25 22.00 -2.27 11.69 -5.49
FFBZ First Federal Bancorp of OH 22.75 1,575 35.8 22.75 16.50 22.00 3.41 37.88 7.67
FFCH First Fin. Holdings Inc. of SC 50.25 6,761 339.7 53.50 23.75 48.88 2.80 99.01 -5.42
FFBI First Financial Bancorp of IL 21.75 415 9.0 23.25 15.50 21.75 0.00 40.32 3.57
FFHS First Franklin Corp. of OH 29.00 1,192 34.6 31.25 16.00 29.00 0.00 76.40 -7.20
FGHC First Georgia Hold. Corp of GA 9.50 3,052 29.0 10.19 6.50 10.19 -6.77 46.15 0.00
FSPG First Home Bancorp of NJ(8) 30.00 2,708 81.2 30.50 16.50 30.25 -0.83 80.83 -0.43
FFSL First Independence Corp. of KS 14.75 954 14.1 15.63 10.88 14.25 3.51 34.09 5.36
FISB First Indiana Corp. of IN 33.00 10,557 348.4 34.00 17.38 32.25 2.33 38.66 9.09
FKFS First Keystone Fin. Corp of PA 17.00 2,413 41.0 19.00 10.38 17.25 -1.45 65.85 -4.92
FLKY First Lancaster Bncshrs of KY 15.13 951 14.4 16.38 14.63 15.50 -2.39 -2.39 -5.08
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
COOP Cooperative Bancshares of NC 0.75 0.74 9.48 9.48 123.70
CRZY Crazy Woman Creek Bncorp of WY 0.75 0.76 15.04 15.04 63.64
DNFC D&N Financial Corp. of MI 1.52 1.40 10.30 10.19 192.78
DCBI Delphos Citizens Bancorp of OH 0.93 0.93 14.83 14.83 55.37
DIME Dime Community Bancorp of NY* 0.95 0.91 14.97 12.94 119.64
DIBK Dime Financial Corp. of CT* 3.04 3.04 14.53 14.11 178.45
EGLB Eagle BancGroup of IL 0.43 0.31 17.24 17.24 145.28
EBSI Eagle Bancshares of Tucker GA 0.88 0.89 12.59 12.59 154.03
EGFC Eagle Financial Corp. of CT(8) 0.87 1.26 22.21 17.67 321.95
ETFS East Texas Fin. Serv. of TX 0.71 0.66 20.45 20.45 117.05
ESBK Elmira Svgs Bank (The) of NY* 1.27 1.03 19.55 19.03 307.64
EMLD Emerald Financial Corp. of OH 1.20 1.11 9.28 9.14 118.96
EIRE Emerald Isle Bancorp of MA(8)* 1.56 1.66 13.39 13.39 191.66
EFBC Empire Federal Bancorp of MT 0.62 0.62 15.51 15.51 42.65
EFBI Enterprise Fed. Bancorp of OH 1.19 0.99 15.82 15.81 138.41
EQSB Equitable FSB of Wheaton MD 1.87 1.85 13.36 13.36 261.38
FCBF FCB Fin. Corp. of Neenah WI 0.99 0.68 18.72 18.72 134.83
FFDF FFD Financial Corp. of OH 1.16 0.57 14.86 14.86 61.05
FFLC FFLC Bancorp of Leesburg FL 1.00 0.95 13.74 13.74 106.90
FFFC FFVA Financial Corp. of VA(8) 1.40 1.66 17.33 17.00 126.54
FFWC FFW Corporation of Wabash IN 1.21 1.19 12.31 11.18 127.26
FFYF FFY Financial Corp. of OH 1.91 1.88 20.53 20.53 151.04
FMCO FMS Financial Corp. of NJ 2.34 2.32 15.80 15.57 243.58
FFHH FSF Financial Corp. of MN 1.04 1.03 14.58 14.58 133.62
FOBC Fed One Bancorp of Wheeling WV 1.37 1.35 17.09 16.37 154.43
FBCI Fidelity Bancorp of Chicago IL 0.38 1.09 18.22 18.19 174.01
FSBI Fidelity Bancorp, Inc. of PA 1.77 1.73 17.21 17.21 251.65
FFFL Fidelity Bcsh MHC of FL (47.7) 0.93 0.79 12.65 12.57 154.16
FFED Fidelity Fed. Bancorp of IN 0.56 0.52 5.02 5.02 69.00
FFOH Fidelity Financial of OH 0.87 0.84 11.49 10.13 95.67
FIBC Financial Bancorp, Inc. of NY 1.53 1.63 16.10 16.03 180.26
FBSI First Bancshares, Inc. of MO 0.86 0.82 10.64 10.64 73.89
FBBC First Bell Bancorp of PA 1.16 1.14 11.21 11.21 103.78
SKBO First Carnegie MHC of PA(45.0) 0.39 0.42 10.61 10.61 63.96
FSTC First Citizens Corp of GA 2.17 1.94 12.44 9.81 122.97
FCME First Coastal Corp. of ME* 4.52 4.34 10.66 10.66 109.32
FFBA First Colorado Bancorp of CO 1.18 1.13 12.45 12.20 92.53
FDEF First Defiance Fin.Corp. of OH 0.63 0.62 12.53 12.53 67.98
FESX First Essex Bancorp of MA* 1.29 1.15 12.08 10.62 158.90
FFSX First FSB MHC Sxld of IA(46.1) 1.19 1.15 14.34 14.23 161.94
FFES First Fed of E. Hartford CT 2.06 2.28 24.76 24.76 363.17
BDJI First Fed. Bancorp. of MN 0.70 0.68 11.83 11.83 110.50
FFBH First Fed. Bancshares of AR 1.13 1.08 16.64 16.64 111.75
FTFC First Fed. Capital Corp. of WI 1.79 1.48 11.43 10.77 169.70
FFKY First Fed. Fin. Corp. of KY 1.49 1.47 12.81 12.11 93.71
FFBZ First Federal Bancorp of OH 1.22 1.22 10.09 10.08 132.60
FFCH First Fin. Holdings Inc. of SC 2.16 2.11 17.08 17.08 265.25
FFBI First Financial Bancorp of IL -0.15 0.94 18.10 18.10 202.99
FFHS First Franklin Corp. of OH 1.05 1.24 17.49 17.39 193.95
FGHC First Georgia Hold. Corp of GA 0.58 0.48 4.53 4.20 54.52
FSPG First Home Bancorp of NJ(8) 1.74 1.70 13.31 13.11 193.90
FFSL First Independence Corp. of KS 0.76 0.76 11.91 11.91 119.15
FISB First Indiana Corp. of IN 1.68 1.36 14.50 14.33 152.83
FKFS First Keystone Fin. Corp of PA 1.09 1.00 10.26 10.26 154.76
FLKY First Lancaster Bncshrs of KY 0.53 0.53 14.62 14.62 49.62
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FLFC First Liberty Fin. Corp. of GA 30.50 7,730 235.8 34.25 19.25 31.38 -2.80 64.86 -4.69
CASH First Midwest Fin., Inc. of OH 22.63 2,692 60.9 23.00 15.00 23.00 -1.61 29.31 0.58
FMBD First Mutual Bancorp Inc of IL 20.00 3,507 70.1 25.00 13.75 20.88 -4.21 27.96 -20.00
FMSB First Mutual SB of Bellevue WA* 17.81 4,125 73.5 20.17 10.61 18.75 -5.01 50.68 -3.73
FNGB First Northern Cap. Corp of WI 13.00 8,846 115.0 14.00 8.38 13.13 -0.99 56.44 -7.14
FFPB First Palm Beach Bancorp of FL 37.50 5,055 189.6 44.94 23.88 38.63 -2.93 55.41 -13.05
FSLA First SB SLA MHC of NJ (47.5)(8) 42.38 8,007 144.3 54.50 18.41 41.50 2.12 98.41 -22.24
FWWB First Savings Bancorp of WA 25.00 10,247 256.2 28.56 18.75 24.81 0.77 23.46 -9.09
FSFF First SecurityFed Fin of IL 15.25 6,408 97.7 16.63 14.50 14.94 2.07 52.50 -3.17
SHEN First Shenango Bancorp of PA(8) 42.88 2,069 88.7 43.25 21.75 38.50 11.38 66.52 15.89
SOPN First Svgs Bancorp of NC 24.75 3,700 91.6 26.00 19.25 25.00 -1.00 28.57 -2.94
FBNW FirstBank Corp of Clarkston WA 19.38 1,984 38.4 20.25 15.50 19.75 -1.87 93.80 2.65
FFDB FirstFed Bancorp, Inc. of AL 23.00 1,151 26.5 23.50 13.63 23.00 0.00 68.75 6.33
FSPT FirstSpartan Fin. Corp. of SC 43.00 4,430 190.5 43.38 35.00 41.50 3.61 115.00 6.83
FLAG Flag Financial Corp of GA 21.00 2,037 42.8 21.50 11.75 20.00 5.00 66.27 -2.33
FLGS Flagstar Bancorp, Inc of MI 21.88 13,670 299.1 21.88 13.00 20.00 9.40 N.A. 10.51
FFIC Flushing Fin. Corp. of NY* 24.00 7,865 188.8 24.25 17.88 23.00 4.35 29.73 0.50
FBHC Fort Bend Holding Corp. of TX 21.50 1,668 35.9 24.00 11.50 20.75 3.61 95.45 -1.15
FTSB Fort Thomas Fin. Corp. of KY 14.88 1,474 21.9 15.50 9.25 14.25 4.42 15.53 -3.25
FKKY Frankfort First Bancorp of KY 16.13 1,619 26.1 24.50 15.75 16.63 -3.01 -20.35 -8.51
FTNB Fulton Bancorp, Inc. of MO 21.75 1,719 37.4 26.50 16.13 22.50 -3.33 33.85 -1.72
GFSB GFS Bancorp of Grinnell IA(8) 17.50 996 17.4 17.63 10.25 17.38 0.69 66.67 2.58
GUPB GFSB Bancorp, Inc of Gallup NM 20.88 801 16.7 22.25 15.75 20.25 3.11 32.57 -1.18
GSLA GS Financial Corp. of LA 19.75 3,439 67.9 21.00 13.38 20.00 -1.25 97.50 -5.95
GOSB GSB Financial Corp. of NY* 15.75 2,248 35.4 18.94 14.25 16.00 -1.56 57.50 -12.79
GBCI Glacier Bancorp of MT 27.75 6,816 189.1 27.75 15.33 26.25 5.71 69.93 11.00
GFCO Glenway Financial Corp. of OH 20.50 2,281 46.8 21.00 10.00 19.00 7.89 86.36 9.33
GTPS Great American Bancorp of IL 21.50 1,672 35.9 21.50 15.50 19.88 8.15 34.88 13.16
PEDE Great Pee Dee Bancorp of SC 15.50 2,182 33.8 16.13 14.75 15.13 2.45 55.00 -3.91
GSBC Great Southern Bancorp of MO 25.00 8,080 202.0 25.88 16.00 25.00 0.00 40.85 2.04
GDVS Greater DV SB,MHC of PA (19.9) 31.00 3,273 20.2 32.50 10.75 30.00 3.33 184.93 0.00
GSFC Green Street Fin. Corp. of NC 18.00 4,298 77.4 20.75 16.63 18.25 -1.37 5.88 -1.37
GFED Guaranty Fed Bancshares of MO 13.06 6,222 81.3 14.44 6.09 12.94 0.93 114.45 1.40
HCBB HCB Bancshares of Camden AR 14.69 2,645 38.9 15.25 12.63 14.75 -0.41 46.90 1.31
HEMT HF Bancorp of Hemet CA 16.75 6,293 105.4 18.25 12.25 17.00 -1.47 30.05 -4.29
HFFC HF Financial Corp. of SD 29.75 2,977 88.6 29.75 17.50 29.75 0.00 60.81 12.26
HFNC HFNC Financial Corp. of NC 14.00 17,193 240.7 22.06 13.25 13.25 5.66 -29.58 -3.45
HMNF HMN Financial, Inc. of MN 26.75 4,144 110.9 32.50 19.00 27.75 -3.60 25.88 -17.69
HALL Hallmark Capital Corp. of WI 15.25 2,886 44.0 18.00 8.75 15.63 -2.43 74.29 -10.29
HARB Harbor FL Bncp MHC of FL (46.1(8) 70.00 4,979 162.1 72.00 35.00 68.00 2.94 97.18 5.66
HRBF Harbor Federal Bancorp of MD 23.75 1,693 40.2 25.25 15.50 23.75 0.00 31.00 -5.94
HFSA Hardin Bancorp of Hardin MO 18.19 824 15.0 18.63 13.50 18.38 -1.03 32.29 -0.33
HARL Harleysville SB of PA 30.00 1,666 50.0 30.25 20.00 29.38 2.11 44.23 9.09
HFGI Harrington Fin. Group of IN 12.06 3,246 39.1 13.75 10.13 12.00 0.50 17.66 -7.23
HARS Harris Fin. MHC of PA (24.3) 18.00 33,779 147.0 20.88 6.04 18.13 -0.72 148.28 -9.46
HFFB Harrodsburg 1st Fin Bcrp of KY 16.50 1,986 32.8 18.00 14.75 16.88 -2.25 0.00 -1.49
HHFC Harvest Home Fin. Corp. of OH 14.50 915 13.3 15.75 9.75 14.88 -2.55 46.76 -7.94
HAVN Haven Bancorp of Woodhaven NY 21.25 8,785 186.7 22.94 15.22 20.63 3.01 35.96 -5.56
HTHR Hawthorne Fin. Corp. of CA 20.13 3,088 62.2 24.00 9.25 20.50 -1.80 96.39 0.00
HMLK Hemlock Fed. Fin. Corp. of IL 18.75 2,076 38.9 18.75 12.50 18.31 2.40 87.50 9.46
HFWA Heritage Financial Corp of WA 14.75 9,749 143.8 14.81 13.00 13.75 7.27 47.50 47.50
HCBC High Country Bancorp of CO 14.88 1,323 19.7 15.50 14.44 14.63 1.71 48.80 -4.00
HBNK Highland Bancorp of CA 35.50 2,318 82.3 36.25 20.50 36.25 -2.07 60.92 8.40
HIFS Hingham Inst. for Sav. of MA* 30.50 1,304 39.8 30.75 18.00 30.00 1.67 62.67 6.09
HBEI Home Bancorp of Elgin IL 18.88 6,856 129.4 19.31 14.13 18.75 0.69 25.87 5.59
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FLFC First Liberty Fin. Corp. of GA 1.15 1.24 12.15 10.97 164.18
CASH First Midwest Fin., Inc. of OH 1.37 1.28 16.39 14.62 151.41
FMBD First Mutual Bancorp Inc of IL 0.28 0.23 15.45 11.85 111.62
FMSB First Mutual SB of Bellevue WA* 1.06 1.04 7.43 7.43 109.36
FNGB First Northern Cap. Corp of WI 0.68 0.65 8.34 8.34 75.48
FFPB First Palm Beach Bancorp of FL 1.85 1.55 22.36 21.84 357.75
FSLA First SB SLA MHC of NJ (47.5)(8) 1.14 1.19 12.39 11.26 130.45
FWWB First Savings Bancorp of WA 1.24 1.16 14.67 13.55 107.21
FSFF First SecurityFed Fin of IL 0.61 0.61 12.80 12.80 47.35
SHEN First Shenango Bancorp of PA(8) 2.26 2.25 22.55 22.55 194.02
SOPN First Svgs Bancorp of NC 1.35 1.35 18.51 18.51 81.30
FBNW FirstBank Corp of Clarkston WA 0.33 0.15 14.73 14.73 89.65
FFDB FirstFed Bancorp, Inc. of AL 1.59 1.55 14.77 13.51 153.31
FSPT FirstSpartan Fin. Corp. of SC 1.33 1.33 29.52 29.52 111.81
FLAG Flag Financial Corp of GA 1.01 0.84 10.66 10.66 117.07
FLGS Flagstar Bancorp, Inc of MI 1.66 0.83 8.89 8.54 148.74
FFIC Flushing Fin. Corp. of NY* 1.08 1.09 17.35 16.67 138.39
FBHC Fort Bend Holding Corp. of TX 1.41 1.04 12.29 11.52 181.49
FTSB Fort Thomas Fin. Corp. of KY 0.80 0.80 10.72 10.72 67.76
FKKY Frankfort First Bancorp of KY 0.14 0.59 13.92 13.92 82.03
FTNB Fulton Bancorp, Inc. of MO 0.73 0.63 14.88 14.88 60.33
GFSB GFS Bancorp of Grinnell IA(8) 1.18 1.12 11.23 11.23 94.93
GUPB GFSB Bancorp, Inc of Gallup NM 0.97 0.97 17.60 17.60 137.28
GSLA GS Financial Corp. of LA 0.41 0.41 16.44 16.44 38.11
GOSB GSB Financial Corp. of NY* 0.27 0.28 14.52 14.52 52.07
GBCI Glacier Bancorp of MT 1.22 1.25 8.41 8.21 84.21
GFCO Glenway Financial Corp. of OH 1.05 1.05 12.41 12.28 133.55
GTPS Great American Bancorp of IL 0.52 0.52 16.92 16.92 84.91
PEDE Great Pee Dee Bancorp of SC 0.56 0.56 13.51 13.51 35.68
GSBC Great Southern Bancorp of MO 1.57 1.48 7.79 7.79 90.04
GDVS Greater DV SB,MHC of PA (19.9) 0.62 0.62 8.91 8.91 79.58
GSFC Green Street Fin. Corp. of NC 0.66 0.66 14.73 14.73 41.81
GFED Guaranty Fed Bancshares of MO 0.49 0.49 10.70 10.70 40.00
HCBB HCB Bancshares of Camden AR 0.18 0.18 14.43 13.91 75.59
HEMT HF Bancorp of Hemet CA 0.06 0.35 13.29 11.18 168.96
HFFC HF Financial Corp. of SD 2.05 1.90 18.68 18.68 195.05
HFNC HFNC Financial Corp. of NC 0.63 0.48 9.66 9.66 52.97
HMNF HMN Financial, Inc. of MN 1.35 1.07 20.38 18.92 166.80
HALL Hallmark Capital Corp. of WI 0.91 0.89 10.59 10.59 145.00
HARB Harbor FL Bncp MHC of FL (46.1(8) 2.88 2.77 20.24 19.64 226.74
HRBF Harbor Federal Bancorp of MD 0.96 0.92 17.23 17.23 137.96
HFSA Hardin Bancorp of Hardin MO 0.99 0.90 15.89 15.89 140.09
HARL Harleysville SB of PA 2.06 2.07 14.23 14.23 208.81
HFGI Harrington Fin. Group of IN 0.30 0.32 7.50 7.50 167.80
HARS Harris Fin. MHC of PA (24.3) 0.52 0.46 5.12 4.53 62.47
HFFB Harrodsburg 1st Fin Bcrp of KY 0.74 0.74 14.99 14.99 55.21
HHFC Harvest Home Fin. Corp. of OH 0.78 0.68 11.30 11.30 102.55
HAVN Haven Bancorp of Woodhaven NY 1.26 1.27 12.85 12.81 224.80
HTHR Hawthorne Fin. Corp. of CA 2.96 2.28 14.01 14.01 288.59
HMLK Hemlock Fed. Fin. Corp. of IL 0.45 0.77 14.66 14.66 85.11
HFWA Heritage Financial Corp of WA 0.49 0.49 9.34 9.34 31.95
HCBC High Country Bancorp of CO 0.38 0.38 12.86 12.86 66.07
HBNK Highland Bancorp of CA 2.64 2.03 17.91 17.91 237.12
HIFS Hingham Inst. for Sav. of MA* 2.04 2.04 16.39 16.39 170.69
HBEI Home Bancorp of Elgin IL 0.41 0.41 13.89 13.89 51.43
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HBFW Home Bancorp of Fort Wayne IN 30.75 2,385 73.3 31.50 19.25 30.00 2.50 59.74 4.24
HBBI Home Building Bancorp of IN 22.00 312 6.9 23.75 19.50 22.00 0.00 12.82 3.53
HCFC Home City Fin. Corp. of OH 18.63 905 16.9 19.25 12.75 18.63 0.00 38.62 0.70
HOMF Home Fed Bancorp of Seymour IN 30.25 5,112 154.6 31.25 16.67 30.75 -1.63 67.31 16.35
HWEN Home Financial Bancorp of IN 8.75 929 8.1 9.75 7.00 8.75 0.00 21.70 -5.41
HPBC Home Port Bancorp, Inc. of MA* 24.00 1,842 44.2 25.00 16.50 23.63 1.57 45.45 3.76
HMCI HomeCorp, Inc. of Rockford IL(8) 27.50 1,709 47.0 29.25 13.17 25.75 6.80 94.07 -5.98
HFBC HopFed Bancorp of KY(8) 16.00 4,034 64.5 16.81 16.00 16.81 -4.82 60.00 60.00
HZFS Horizon Fin'l. Services of IA 14.00 853 11.9 14.00 8.50 13.00 7.69 57.66 16.67
HRZB Horizon Financial Corp. of WA* 18.00 7,454 134.2 18.50 11.96 18.00 0.00 34.63 1.41
IBSF IBS Financial Corp. of NJ 17.06 10,944 186.7 18.75 14.24 16.00 6.62 18.89 -3.56
ITLA ITLA Capital Corp of CA* 19.75 7,871 155.5 21.25 14.00 19.00 3.95 23.44 2.60
IFSB Independence FSB of DC 16.13 1,281 20.7 19.00 7.50 16.00 0.81 79.22 -5.12
INCB Indiana Comm. Bank, SB of IN(8) 20.50 922 18.9 20.50 15.00 20.50 0.00 22.39 0.00
INBI Industrial Bancorp of OH 18.38 5,103 93.8 18.56 12.00 18.25 0.71 44.16 3.55
IWBK Interwest Bancorp of WA 39.72 8,037 319.2 43.25 27.63 40.00 -0.70 11.89 5.22
IPSW Ipswich SB of Ipswich MA* 14.50 2,385 34.6 16.50 6.88 14.25 1.75 101.67 -12.12
JXVL Jacksonville Bancorp of TX 21.25 2,444 51.9 23.25 13.25 20.00 6.25 45.25 -8.60
JXSB Jcksnville SB,MHC of IL (45.6) 21.00 1,908 12.2 21.00 10.67 20.00 5.00 93.91 5.00
JSBA Jefferson Svgs Bancorp of MO 24.75 10,013 247.8 24.75 13.75 23.50 5.32 65.00 20.73
JOAC Joachim Bancorp, Inc. of MO(8) 16.38 722 11.8 16.50 14.00 16.38 0.00 17.00 2.37
KSAV KS Bancorp of Kenly NC 24.00 885 21.2 25.50 14.81 24.00 0.00 62.05 -3.03
KSBK KSB Bancorp of Kingfield ME* 19.00 1,239 23.5 22.50 8.77 20.25 -6.17 116.65 -15.56
KFBI Klamath First Bancorp of OR 23.00 10,019 230.4 24.25 15.25 22.25 3.37 48.96 6.98
LSBI LSB Fin. Corp. of Lafayette IN 28.25 916 25.9 28.50 18.57 28.38 -0.46 50.19 -0.88
LVSB Lakeview Financial of NJ 25.50 4,164 106.2 26.00 13.63 25.00 2.00 75.86 0.00
LARK Landmark Bancshares, Inc of KS 22.00 1,689 37.2 27.25 18.50 23.25 -5.38 17.33 -11.58
LARL Laurel Capital Group of PA 21.88 2,175 47.6 23.50 12.83 21.75 0.60 72.69 0.97
LSBX Lawrence Savings Bank of MA* 16.38 4,288 70.2 16.63 9.13 15.94 2.76 69.92 0.00
LFED Leeds FSB, MHC of MD (36.3) 21.00 5,182 39.5 23.50 11.83 22.00 -4.55 68.00 -3.45
LXMO Lexington B&L Fin. Corp. of MO 16.81 1,059 17.8 17.88 13.63 16.50 1.88 23.33 -5.30
LIFB Life Bancorp of Norfolk VA(8) 35.88 9,848 353.3 36.63 16.75 35.00 2.51 85.14 -2.05
LFCO Life Financial Corp of CA 15.13 6,546 99.0 21.88 10.75 12.50 21.04 N.A. 19.79
LFBI Little Falls Bancorp of NJ 19.25 2,608 50.2 20.50 12.75 19.13 0.63 40.00 -6.10
LOGN Logansport Fin. Corp. of IN 16.00 1,261 20.2 18.00 12.31 16.00 0.00 29.98 -11.11
LONF London Financial Corp. of OH 15.50 510 7.9 21.00 14.00 15.50 0.00 3.33 -7.46
LISB Long Island Bancorp, Inc of NY 50.00 24,029 1,201.5 51.38 33.00 50.25 -0.50 29.03 0.75
MAFB MAF Bancorp, Inc. of IL 38.06 15,013 571.4 38.06 24.83 35.75 6.46 52.24 7.57
MBLF MBLA Financial Corp. of MO 28.50 1,270 36.2 30.63 20.00 28.25 0.88 39.02 -6.56
MECH MECH Financial Inc of CT* 26.25 5,293 138.9 28.00 16.75 25.25 3.96 54.41 0.73
MFBC MFB Corp. of Mishawaka IN 27.00 1,627 43.9 30.38 18.00 28.50 -5.26 52.11 -11.13
MLBC ML Bancorp of Villanova PA(8) 30.63 11,866 363.5 30.75 15.00 30.50 0.43 75.03 2.10
MSBF MSB Financial, Inc of MI 17.00 1,237 21.0 19.50 10.38 18.25 -6.85 63.78 -10.53
MARN Marion Capital Holdings of IN 26.06 1,782 46.4 28.13 20.50 26.00 0.23 21.21 -3.94
MRKF Market Fin. Corp. of OH 16.75 1,336 22.4 17.00 12.25 16.63 0.72 67.50 7.17
MFSL Maryland Fed. Bancorp of MD 30.25 6,476 195.9 35.00 17.19 30.00 0.83 58.71 -13.57
MASB MassBank Corp. of Reading MA* 47.25 3,571 168.7 48.25 29.91 46.38 1.88 54.61 -0.80
MFLR Mayflower Co-Op. Bank of MA* 24.94 890 22.2 26.75 15.75 24.75 0.77 54.62 -6.77
MDBK Medford Bancorp, Inc. of MA* 41.50 4,541 188.5 42.00 24.50 40.00 3.75 46.90 5.73
MERI Meritrust FSB of Thibodaux LA(8) 70.00 774 54.2 70.00 34.00 70.00 0.00 97.18 1.45
MWBX MetroWest Bank of MA* 8.00 14,108 112.9 9.50 4.63 8.00 0.00 63.93 -11.11
METF Metropolitan Fin. Corp. of OH 18.63 7,051 131.4 18.88 5.38 18.75 -0.64 246.28 20.19
MCBS Mid Continent Bancshares of KS(8) 43.38 1,998 86.7 47.75 25.00 44.00 -1.41 64.44 -9.15
MIFC Mid Iowa Financial Corp. of IA 12.38 1,710 21.2 12.38 7.31 11.75 5.36 62.25 7.65
MCBN Mid-Coast Bancorp of ME 35.00 237 8.3 37.00 18.50 32.25 8.53 84.21 16.67
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HBFW Home Bancorp of Fort Wayne IN 1.22 1.21 17.84 17.84 146.77
HBBI Home Building Bancorp of IN 1.05 1.01 19.13 19.13 135.99
HCFC Home City Fin. Corp. of OH 0.92 0.93 15.19 15.19 77.47
HOMF Home Fed Bancorp of Seymour IN 1.74 1.58 11.75 11.41 135.78
HWEN Home Financial Bancorp of IN 0.37 0.32 7.81 7.81 44.47
HPBC Home Port Bancorp, Inc. of MA* 1.75 1.74 11.65 11.65 109.13
HMCI HomeCorp, Inc. of Rockford IL(8) 0.91 0.71 13.20 13.20 194.19
HFBC HopFed Bancorp of KY(8) 0.58 0.58 13.26 13.26 58.70
HZFS Horizon Fin'l. Services of IA 0.83 0.66 10.58 10.58 104.07
HRZB Horizon Financial Corp. of WA* 1.09 1.08 11.38 11.38 71.47
IBSF IBS Financial Corp. of NJ 0.53 0.53 11.80 11.80 66.54
ITLA ITLA Capital Corp of CA* 1.52 1.52 12.28 12.23 114.54
IFSB Independence FSB of DC 1.09 0.45 14.23 12.67 196.38
INCB Indiana Comm. Bank, SB of IN(8) 0.53 0.53 12.38 12.38 104.22
INBI Industrial Bancorp of OH 1.00 1.00 11.93 11.93 71.34
IWBK Interwest Bancorp of WA 2.55 2.22 16.60 16.32 246.65
IPSW Ipswich SB of Ipswich MA* 0.93 0.76 4.96 4.96 95.28
JXVL Jacksonville Bancorp of TX 1.38 1.38 14.09 14.09 96.32
JXSB Jcksnville SB,MHC of IL (45.6) 0.53 0.53 9.08 9.08 86.08
JSBA Jefferson Svgs Bancorp of MO 0.97 0.94 11.34 8.89 125.61
JOAC Joachim Bancorp, Inc. of MO(8) 0.39 0.39 13.67 13.67 48.58
KSAV KS Bancorp of Kenly NC 1.38 1.38 16.50 16.50 128.79
KSBK KSB Bancorp of Kingfield ME* 1.22 1.22 8.89 8.45 120.79
KFBI Klamath First Bancorp of OR 0.85 0.85 14.42 13.11 97.82
LSBI LSB Fin. Corp. of Lafayette IN 1.61 1.42 18.88 18.88 218.63
LVSB Lakeview Financial of NJ 1.68 1.04 13.29 11.25 124.39
LARK Landmark Bancshares, Inc of KS 1.46 1.32 19.49 19.49 138.33
LARL Laurel Capital Group of PA 1.34 1.35 10.37 10.37 98.11
LSBX Lawrence Savings Bank of MA* 1.89 1.87 8.77 8.77 83.92
LFED Leeds FSB, MHC of MD (36.3) 0.64 0.64 9.16 9.16 55.08
LXMO Lexington B&L Fin. Corp. of MO 0.70 0.70 14.78 14.78 55.51
LIFB Life Bancorp of Norfolk VA(8) 1.35 1.25 16.17 15.73 150.93
LFCO Life Financial Corp of CA 1.38 1.38 7.56 7.56 44.93
LFBI Little Falls Bancorp of NJ 0.66 0.60 14.53 13.40 124.40
LOGN Logansport Fin. Corp. of IN 0.98 1.01 13.12 13.12 68.29
LONF London Financial Corp. of OH 0.81 0.75 10.23 10.23 74.35
LISB Long Island Bancorp, Inc of NY 2.11 1.74 23.19 22.98 252.72
MAFB MAF Bancorp, Inc. of IL 2.53 2.49 17.55 15.46 230.31
MBLF MBLA Financial Corp. of MO 1.41 1.43 22.32 22.32 176.03
MECH MECH Financial Inc of CT* 2.64 2.63 16.33 16.33 156.95
MFBC MFB Corp. of Mishawaka IN 1.25 1.24 20.61 20.61 162.32
MLBC ML Bancorp of Villanova PA(8) 1.20 0.86 13.51 12.61 195.16
MSBF MSB Financial, Inc of MI 0.91 0.84 10.56 10.56 62.61
MARN Marion Capital Holdings of IN 1.58 1.58 22.37 21.89 107.66
MRKF Market Fin. Corp. of OH 0.43 0.43 15.13 15.13 42.54
MFSL Maryland Fed. Bancorp of MD 1.14 1.61 15.39 15.22 181.44
MASB MassBank Corp. of Reading MA* 2.85 2.63 29.06 28.65 259.14
MFLR Mayflower Co-Op. Bank of MA* 1.46 1.38 13.98 13.75 144.98
MDBK Medford Bancorp, Inc. of MA* 2.51 2.42 22.35 21.04 250.07
MERI Meritrust FSB of Thibodaux LA(8) 3.51 3.51 25.66 25.66 302.07
MWBX MetroWest Bank of MA* 0.54 0.53 3.17 3.17 43.16
METF Metropolitan Fin. Corp. of OH 0.82 0.77 5.20 4.78 131.18
MCBS Mid Continent Bancshares of KS(8) 1.96 2.14 20.52 20.52 204.01
MIFC Mid Iowa Financial Corp. of IA 0.89 0.98 7.41 7.40 79.15
MCBN Mid-Coast Bancorp of ME 1.92 1.80 22.03 22.03 264.27
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MWBI Midwest Bancshares, Inc. of IA 16.88 1,021 17.2 19.50 8.92 17.63 -4.25 89.24 -7.51
MWFD Midwest Fed. Fin. Corp of WI(8) 28.50 1,628 46.4 29.13 16.75 28.50 0.00 58.33 1.32
MFFC Milton Fed. Fin. Corp. of OH 15.50 2,267 35.1 17.00 13.25 15.75 -1.59 10.71 0.78
MIVI Miss. View Hold. Co. of MN 18.75 740 13.9 19.75 14.00 18.50 1.35 27.12 1.35
MBSP Mitchell Bancorp, Inc. of NC 17.25 931 16.1 18.00 14.75 16.75 2.99 16.95 1.47
MBBC Monterey Bay Bancorp of CA 19.88 3,230 64.2 20.50 15.50 19.00 4.63 16.94 1.95
MONT Montgomery Fin. Corp. of IN 12.81 1,653 21.2 14.00 11.00 13.13 -2.44 28.10 -0.54
MSBK Mutual SB, FSB of Bay City MI 13.00 4,282 55.7 14.63 6.50 13.25 -1.89 88.95 0.00
MYST Mystic Financial of MA* 16.56 2,711 44.9 16.56 14.44 15.06 9.96 65.60 65.60
NHTB NH Thrift Bancshares of NH 19.50 2,075 40.5 22.75 11.75 20.25 -3.70 60.76 -4.88
NSLB NS&L Bancorp, Inc of Neosho MO 17.63 712 12.6 19.50 15.50 17.69 -0.34 10.19 -6.62
NSSY NSS Bancorp of CT* 41.00 2,427 99.5 41.50 23.00 40.00 2.50 67.35 8.61
NMSB Newmil Bancorp, Inc. of CT* 13.75 3,879 53.3 14.50 8.88 12.75 7.84 52.78 5.77
NASB North American SB, FSB of MO 60.75 2,236 135.8 60.75 36.50 54.00 12.50 55.77 14.34
NBSI North Bancshares of Chicago IL 17.88 1,430 25.6 18.83 11.58 17.88 0.00 53.21 0.00
FFFD North Central Bancshares of IA 19.38 3,266 63.3 20.13 14.63 19.38 0.00 29.20 -2.52
NEIB Northeast Indiana Bncrp of IN 21.38 1,763 37.7 22.75 13.25 22.75 -6.02 55.49 -3.39
NWEQ Northwest Equity Corp. of WI 21.00 839 17.6 21.63 13.50 21.63 -2.91 58.49 1.20
NWSB Northwest SB, MHC of PA (30.7) 14.38 46,798 206.4 16.38 7.13 13.00 10.62 91.73 1.77
NSSB Norwich Financial Corp. of CT(8)* 31.06 5,543 172.2 33.00 18.50 31.25 -0.61 65.65 -5.88
NTMG Nutmeg FS&LA of CT 10.50 986 10.4 11.25 5.25 11.00 -4.55 100.00 0.00
OHSL OHSL Financial Corp. of OH 30.50 1,241 37.9 30.50 21.75 29.00 5.17 40.23 12.96
OCFC Ocean Fin. Corp. of NJ 36.63 8,176 299.5 38.38 27.63 36.00 1.75 22.59 -1.66
OTFC Oregon Trail Fin. Corp. of OR 17.88 4,333 77.5 18.38 15.63 18.00 -0.67 78.80 2.88
OFCP Ottawa Financial Corp. of MI 29.88 5,313 158.8 34.00 16.71 31.00 -3.61 78.82 -12.12
PFFB PFF Bancorp of Pomona CA 19.50 17,956 350.1 21.50 13.63 19.25 1.30 31.05 -1.91
PSFI PS Financial of Chicago IL 14.25 2,167 30.9 22.38 12.88 14.06 1.35 5.56 -36.33
PVFC PVF Capital Corp. of OH 22.00 2,659 58.5 22.63 14.55 21.50 2.33 51.20 8.96
PALM Palfed, Inc. of Aiken SC(8) 26.75 5,299 141.7 30.38 14.25 28.25 -5.31 75.41 -10.48
PBCI Pamrapo Bancorp, Inc. of NJ 26.00 2,843 73.9 27.50 18.50 26.25 -0.95 35.06 -4.59
PFED Park Bancorp of Chicago IL 18.63 2,333 43.5 19.75 14.25 19.06 -2.26 26.82 0.00
PVSA Parkvale Financial Corp of PA 32.25 5,108 164.7 34.25 20.00 32.25 0.00 61.25 -5.84
PBHC Pathfinder BC MHC of NY (46.1)* 20.75 2,875 18.3 21.33 6.50 21.33 -2.72 183.08 3.75
PEEK Peekskill Fin. Corp. of NY 16.25 3,127 50.8 18.25 13.38 16.75 -2.99 10.17 -2.99
PFSB PennFed Fin. Services of NJ 17.50 9,646 168.8 17.75 11.13 17.19 1.80 38.56 2.16
PWBC PennFirst Bancorp of PA 19.13 5,310 101.6 20.00 12.27 19.13 0.00 47.61 -0.62
PWBK Pennwood Bancorp, Inc. of PA 21.00 570 12.0 21.00 13.75 20.25 3.70 46.04 6.33
PBKB People's Bancshares of MA* 22.63 3,289 74.4 24.50 11.63 22.94 -1.35 82.79 -0.53
PFDC Peoples Bancorp of Auburn IN 23.50 3,391 79.7 25.00 13.25 23.25 1.08 71.91 6.82
PBCT Peoples Bank, MHC of CT (40.1)* 36.56 61,162 894.0 38.00 19.00 36.00 1.56 50.27 -3.79
TSBS Peoples Bcrp, MHC of NJ (35.9)(8)* 43.25 9,046 140.4 45.25 15.75 42.88 0.86 166.15 -4.42
PFFC Peoples Fin. Corp. of OH 16.75 1,417 23.7 19.00 12.75 17.06 -1.82 9.84 10.71
PHBK Peoples Heritage Fin Grp of ME* 44.63 27,737 1,237.9 47.00 27.50 44.38 0.56 45.14 -2.98
PSFC Peoples Sidney Fin. Corp of OH 18.38 1,785 32.8 18.63 12.56 18.25 0.71 83.80 2.80
PERM Permanent Bancorp, Inc. of IN 28.50 2,103 59.9 32.63 20.75 29.00 -1.72 34.12 -8.45
PMFI Perpetual Midwest Fin. of IA(8) 28.50 1,891 53.9 30.50 18.75 28.00 1.79 42.50 -2.56
PERT Perpetual of SC, MHC (46.8)(8) 65.00 1,509 45.8 65.75 24.13 65.75 -1.14 162.63 7.21
PCBC Perry Co. Fin. Corp. of MO 23.38 828 19.4 25.00 17.25 23.88 -2.09 29.89 -3.11
PHFC Pittsburgh Home Fin Corp of PA 17.50 1,969 34.5 20.81 14.00 17.75 -1.41 19.62 -2.78
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 40.63 1,632 31.2 45.00 17.75 40.63 0.00 105.72 -8.70
PTRS Potters Financial Corp of OH 19.13 965 18.5 22.25 9.50 18.75 2.03 90.16 -4.35
PKPS Poughkeepsie Fin. Corp. of NY(8) 10.81 12,610 136.3 11.63 5.44 10.63 1.69 94.42 -7.05
PHSB Ppls Home SB, MHC of PA (45.0) 18.75 2,760 23.3 19.75 13.63 18.13 3.42 87.50 -0.69
PRBC Prestige Bancorp of PA 18.88 915 17.3 20.00 14.50 19.50 -3.18 30.21 -5.60
PFNC Progress Financial Corp. of PA 16.00 4,064 65.0 16.88 7.68 15.25 4.92 100.50 -3.03
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MWBI Midwest Bancshares, Inc. of IA 1.24 1.10 10.46 10.46 144.69
MWFD Midwest Fed. Fin. Corp of WI(8) 1.39 1.37 11.21 10.81 127.18
MFFC Milton Fed. Fin. Corp. of OH 0.56 0.54 11.43 11.43 96.53
MIVI Miss. View Hold. Co. of MN 1.00 0.98 16.31 16.31 92.63
MBSP Mitchell Bancorp, Inc. of NC 0.56 0.56 15.56 15.56 38.78
MBBC Monterey Bay Bancorp of CA 0.58 0.53 14.59 13.53 126.83
MONT Montgomery Fin. Corp. of IN 0.44 0.44 11.89 11.89 63.93
MSBK Mutual SB, FSB of Bay City MI 0.12 0.01 9.91 9.91 150.57
MYST Mystic Financial of MA* 0.52 0.52 13.00 13.00 66.76
NHTB NH Thrift Bancshares of NH 0.99 0.78 12.04 10.34 153.90
NSLB NS&L Bancorp, Inc of Neosho MO 0.64 0.61 16.61 16.49 84.01
NSSY NSS Bancorp of CT* 2.76 3.13 21.83 21.17 276.37
NMSB Newmil Bancorp, Inc. of CT* 0.71 0.72 8.54 8.54 91.65
NASB North American SB, FSB of MO 4.95 4.09 26.47 25.71 328.03
NBSI North Bancshares of Chicago IL 0.44 0.42 11.60 11.60 86.00
FFFD North Central Bancshares of IA 1.16 1.16 15.10 15.10 65.87
NEIB Northeast Indiana Bncrp of IN 1.18 1.18 15.51 15.51 107.95
NWEQ Northwest Equity Corp. of WI 1.22 1.17 13.77 13.77 118.66
NWSB Northwest SB, MHC of PA (30.7) 0.41 0.41 4.33 4.08 44.89
NSSB Norwich Financial Corp. of CT(8)* 1.43 1.15 15.16 13.92 126.02
NTMG Nutmeg FS&LA of CT 0.67 0.43 5.88 5.88 106.64
OHSL OHSL Financial Corp. of OH 1.62 1.55 20.98 20.98 192.51
OCFC Ocean Fin. Corp. of NJ 1.68 1.66 27.63 27.63 182.15
OTFC Oregon Trail Fin. Corp. of OR 0.63 0.64 10.64 10.64 85.17
OFCP Ottawa Financial Corp. of MI 1.42 1.35 14.37 11.69 166.73
PFFB PFF Bancorp of Pomona CA 0.79 0.75 14.95 14.80 154.04
PSFI PS Financial of Chicago IL 0.72 0.73 14.76 14.76 39.55
PVFC PVF Capital Corp. of OH 1.90 1.79 10.85 10.85 149.01
PALM Palfed, Inc. of Aiken SC(8) 0.49 0.84 10.74 10.74 126.16
PBCI Pamrapo Bancorp, Inc. of NJ 1.78 1.70 17.07 16.96 132.51
PFED Park Bancorp of Chicago IL 0.84 0.86 17.31 17.31 74.80
PVSA Parkvale Financial Corp of PA 2.07 2.07 15.79 15.70 199.52
PBHC Pathfinder BC MHC of NY (46.1)* 0.70 0.63 7.97 6.69 67.13
PEEK Peekskill Fin. Corp. of NY 0.67 0.67 15.13 15.13 57.96
PFSB PennFed Fin. Services of NJ 1.11 1.10 10.64 9.12 152.97
PWBC PennFirst Bancorp of PA 0.95 0.95 12.96 11.53 154.87
PWBK Pennwood Bancorp, Inc. of PA 0.83 0.91 15.33 15.33 83.59
PBKB People's Bancshares of MA* 1.44 0.74 8.94 8.58 218.14
PFDC Peoples Bancorp of Auburn IN 1.26 1.26 13.25 13.25 86.79
PBCT Peoples Bank, MHC of CT (40.1)* 1.44 0.93 11.40 11.39 126.41
TSBS Peoples Bcrp, MHC of NJ (35.9)(8)* 0.87 0.61 11.97 10.77 70.63
PFFC Peoples Fin. Corp. of OH 0.56 0.55 10.97 10.97 58.20
PHBK Peoples Heritage Fin Grp of ME* 2.65 2.62 17.13 12.87 244.99
PSFC Peoples Sidney Fin. Corp of OH 0.64 0.64 14.72 14.72 59.52
PERM Permanent Bancorp, Inc. of IN 1.25 1.24 19.96 19.72 199.63
PMFI Perpetual Midwest Fin. of IA(8) 1.02 0.91 18.49 18.49 207.35
PERT Perpetual of SC, MHC (46.8)(8) 1.27 1.40 20.28 20.28 170.31
PCBC Perry Co. Fin. Corp. of MO 1.07 1.07 19.75 19.75 102.69
PHFC Pittsburgh Home Fin Corp of PA 1.07 0.92 12.52 12.37 152.19
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 1.46 1.44 14.86 14.86 234.94
PTRS Potters Financial Corp of OH 1.20 1.18 11.20 11.20 127.17
PKPS Poughkeepsie Fin. Corp. of NY(8) 0.19 0.24 5.76 5.76 69.43
PHSB Ppls Home SB, MHC of PA (45.0) 0.56 0.54 10.22 10.22 74.79
PRBC Prestige Bancorp of PA 0.86 0.84 17.08 17.08 156.57
PFNC Progress Financial Corp. of PA 0.88 0.70 5.73 5.11 107.47
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PSBK Progressive Bank, Inc. of NY(8)* 36.25 3,832 138.9 39.25 23.00 36.50 -0.68 49.48 -5.23
PROV Provident Fin. Holdings of CA 22.31 4,693 104.7 22.50 14.13 22.13 0.81 43.94 1.97
PULB Pulaski SB, MHC of MO (29.8)(8) 43.00 2,095 26.8 43.00 16.75 42.50 1.18 156.72 37.03
PLSK Pulaski SB, MHC of NJ (46.0) 20.00 2,108 19.0 24.50 11.50 18.88 5.93 100.00 3.90
PULS Pulse Bancorp of S. River NJ 26.00 3,088 80.3 29.75 17.25 26.75 -2.80 50.72 -0.50
QCFB QCF Bancorp of Virginia MN 27.25 1,382 37.7 29.75 18.50 27.25 0.00 41.56 -8.40
QCBC Quaker City Bancorp of CA 20.50 4,673 95.8 24.56 14.40 19.75 3.80 44.37 -3.53
QCSB Queens County Bancorp of NY* 38.00 15,108 574.1 40.50 23.22 38.50 -1.30 61.29 -6.17
RARB Raritan Bancorp of Raritan NJ* 28.00 2,372 66.4 29.25 15.67 26.50 5.66 75.88 0.00
REDF RedFed Bancorp of Redlands CA(8) 19.81 7,233 143.3 21.13 12.38 19.75 0.30 42.72 -0.35
RELY Reliance Bancorp, Inc. of NY 34.00 9,634 327.6 36.88 21.38 33.56 1.31 59.03 -7.18
RELI Reliance Bancshares Inc of WI 10.13 2,562 26.0 10.13 6.75 9.25 9.51 47.24 6.63
RIVR River Valley Bancorp of IN 19.00 1,190 22.6 19.75 13.63 19.00 0.00 31.03 1.33
RVSB Riverview Bancorp of WA 17.00 6,133 104.3 18.00 6.18 16.38 3.79 156.41 -4.23
RSLN Roslyn Bancorp, Inc. of NY* 22.75 43,642 992.9 24.50 15.63 22.31 1.97 42.19 -2.15
SCCB S. Carolina Comm. Bnshrs of SC 22.00 699 15.4 25.25 17.50 22.50 -2.22 22.22 -2.22
SBFL SB Fngr Lakes MHC of NY (33.1) 31.00 1,785 18.3 32.00 13.75 32.00 -3.13 125.45 -3.13
SFED SFS Bancorp of Schenectady NY 23.14 1,208 28.0 27.25 16.00 24.00 -3.58 36.12 -13.91
SGVB SGV Bancorp of W. Covina CA 16.25 2,345 38.1 19.38 11.38 16.25 0.00 36.78 -8.45
SHSB SHS Bancorp, Inc. of PA 17.25 820 14.1 18.00 14.75 16.62 3.79 72.50 2.99
SISB SIS Bancorp, Inc. of MA* 38.50 6,948 267.5 40.25 23.38 37.50 2.67 40.61 -4.21
SWCB Sandwich Bancorp of MA(8)* 49.94 1,942 97.0 50.50 27.25 50.00 -0.12 54.85 13.50
SFSL Security First Corp. of OH 21.00 7,571 159.0 21.50 11.83 20.00 5.00 68.00 0.57
SKAN Skaneateles Bancorp Inc of NY* 19.38 1,437 27.8 22.25 12.25 19.13 1.31 55.04 -12.43
SOBI Sobieski Bancorp of S. Bend IN 22.25 761 16.9 24.25 13.75 20.50 8.54 60.30 9.18
SOSA Somerset Savings Bank of MA(8)* 4.63 16,659 77.1 5.94 2.25 4.69 -1.28 76.05 -7.40
SSFC South Street Fin. Corp. of NC(8)* 12.88 4,676 60.2 20.00 11.75 12.75 1.02 -12.68 -32.21
SCBS Southern Commun. Bncshrs of AL 18.00 1,137 20.5 19.00 13.00 18.50 -2.70 38.46 -1.37
SMBC Southern Missouri Bncrp of MO 21.25 1,612 34.3 21.25 15.50 19.75 7.59 30.77 3.66
SWBI Southwest Bancshares of IL(8) 28.88 2,715 78.4 30.13 18.75 28.91 -0.10 48.10 -2.92
SVRN Sovereign Bancorp, Inc. of PA 20.19 93,444 1,886.6 21.63 11.38 20.63 -2.13 64.28 -2.70
STFR St. Francis Cap. Corp. of WI 43.38 5,251 227.8 50.75 26.75 42.50 2.07 63.70 -14.10
SPBC St. Paul Bancorp, Inc. of IL 25.00 34,205 855.1 28.50 16.50 25.25 -0.99 52.25 -4.76
SFFC StateFed Financial Corp. of IA 13.50 1,557 21.0 14.75 8.88 13.00 3.85 50.00 -8.47
SFIN Statewide Fin. Corp. of NJ 22.75 4,591 104.4 24.13 14.75 23.63 -3.72 32.81 -5.21
STSA Sterling Financial Corp. of WA 24.00 7,570 181.7 25.00 15.00 23.63 1.57 61.29 10.34
SFSB SuburbFed Fin. Corp. of IL(8) 48.63 1,266 61.6 50.00 21.75 47.50 2.38 123.59 -2.74
ROSE T R Financial Corp. of NY* 30.31 17,598 533.4 35.00 16.69 30.63 -1.04 75.10 -8.84
THRD TF Financial Corp. of PA 25.50 3,187 81.3 30.00 16.63 26.00 -1.92 41.67 -15.00
TPNZ Tappan Zee Fin., Inc. of NY 18.88 1,478 27.9 22.63 14.00 19.00 -0.63 25.87 0.69
TSBK Timberland Bancorp of WA 16.00 6,613 105.8 16.19 14.50 15.94 0.38 60.00 60.00
TRIC Tri-County Bancorp of WY 14.50 1,167 16.9 15.00 9.25 13.19 9.93 54.58 -3.33
TWIN Twin City Bancorp, Inc. of TN 15.00 1,272 19.1 15.50 12.00 15.25 -1.64 21.65 -3.23
USAB USABancshares, Inc of PA* 10.00 732 7.3 10.50 6.56 9.63 3.84 36.80 0.00
UCBC Union Community Bancorp of IN 14.31 3,042 43.5 14.69 13.94 14.38 -0.49 43.10 -2.19
UFRM United FSB of Rocky Mount NC(8) 18.13 3,169 57.5 21.00 8.13 19.25 -5.82 123.00 -7.64
UBMT United Fin. Corp. of MT 26.25 1,223 32.1 27.00 19.00 26.25 0.00 32.91 2.94
UTBI United Tenn. Bancshares of TN 14.00 1,455 20.4 14.75 13.63 13.88 0.86 40.00 40.00
VABF Va. Beach Fed. Fin. Corp of VA 17.75 4,979 88.4 18.75 9.75 17.69 0.34 77.50 -3.43
WHGB WHG Bancshares of MD 17.75 1,392 24.7 19.00 13.63 18.13 -2.10 26.79 -5.33
WSFS WSFS Financial Corp. of DE* 20.00 12,460 249.2 21.75 10.63 19.63 1.88 67.50 0.00
WVFC WVS Financial Corp. of PA 35.00 1,753 61.4 35.75 23.50 33.75 3.70 34.93 -0.71
WRNB Warren Bancorp of Peabody MA* 22.13 3,806 84.2 24.13 15.00 21.63 2.31 40.51 -3.78
WSBI Warwick Community Bncrp of NY* 16.00 6,414 102.6 17.38 15.38 15.88 0.76 60.00 -7.94
WFSL Washington Federal, Inc. of WA 27.75 52,286 1,450.9 30.29 20.46 30.38 -8.66 17.68 -2.90
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PSBK Progressive Bank, Inc. of NY(8)* 2.25 2.20 20.48 18.57 230.56
PROV Provident Fin. Holdings of CA 1.04 0.55 17.85 17.85 154.21
PULB Pulaski SB, MHC of MO (29.8)(8) 1.03 0.90 11.39 11.39 85.64
PLSK Pulaski SB, MHC of NJ (46.0) 0.53 0.53 10.29 10.29 86.21
PULS Pulse Bancorp of S. River NJ 1.85 1.87 14.31 14.31 174.65
QCFB QCF Bancorp of Virginia MN 1.81 1.81 18.83 18.83 114.47
QCBC Quaker City Bancorp of CA 1.27 1.22 15.73 15.73 182.36
QCSB Queens County Bancorp of NY* 1.44 1.45 11.44 11.44 102.00
RARB Raritan Bancorp of Raritan NJ* 1.63 1.61 12.65 12.45 171.70
REDF RedFed Bancorp of Redlands CA(8) 1.27 1.27 11.13 11.09 133.74
RELY Reliance Bancorp, Inc. of NY 1.88 1.97 19.92 13.56 232.83
RELI Reliance Bancshares Inc of WI 0.19 0.20 8.71 8.71 17.39
RIVR River Valley Bancorp of IN 0.91 0.76 14.80 14.59 116.35
RVSB Riverview Bancorp of WA 0.54 0.53 9.75 9.41 42.89
RSLN Roslyn Bancorp, Inc. of NY* 0.73 0.93 14.04 13.97 79.61
SCCB S. Carolina Comm. Bnshrs of SC 0.75 0.75 17.35 17.35 65.26
SBFL SB Fngr Lakes MHC of NY (33.1) 0.44 0.51 11.92 11.92 127.71
SFED SFS Bancorp of Schenectady NY 0.88 0.85 17.74 17.74 144.39
SGVB SGV Bancorp of W. Covina CA 0.57 0.66 13.13 12.94 173.91
SHSB SHS Bancorp, Inc. of PA 0.72 0.72 14.39 14.39 107.88
SISB SIS Bancorp, Inc. of MA* 1.37 1.87 18.06 18.06 249.51
SWCB Sandwich Bancorp of MA(8)* 2.50 2.44 21.63 20.88 267.09
SFSL Security First Corp. of OH 1.19 1.19 8.38 8.26 89.54
SKAN Skaneateles Bancorp Inc of NY* 1.16 1.12 12.30 11.97 178.22
SOBI Sobieski Bancorp of S. Bend IN 0.66 0.60 16.36 16.36 110.75
SOSA Somerset Savings Bank of MA(8)* 0.36 0.35 2.15 2.15 32.40
SSFC South Street Fin. Corp. of NC(8)* 0.43 0.44 7.28 7.28 48.86
SCBS Southern Commun. Bncshrs of AL 0.70 0.70 12.73 12.73 62.34
SMBC Southern Missouri Bncrp of MO 0.94 0.90 16.36 16.36 101.30
SWBI Southwest Bancshares of IL(8) 1.51 1.52 16.22 16.22 135.65
SVRN Sovereign Bancorp, Inc. of PA 0.61 0.83 7.30 6.06 153.42
STFR St. Francis Cap. Corp. of WI 2.23 2.21 24.48 21.65 316.25
SPBC St. Paul Bancorp, Inc. of IL 1.39 1.39 11.96 11.93 132.98
SFFC StateFed Financial Corp. of IA 0.69 0.69 9.86 9.86 56.22
SFIN Statewide Fin. Corp. of NJ 1.19 1.19 14.34 14.31 153.15
STSA Sterling Financial Corp. of WA 1.15 1.04 13.59 12.56 247.85
SFSB SuburbFed Fin. Corp. of IL(8) 2.20 1.78 23.31 23.24 346.34
ROSE T R Financial Corp. of NY* 1.97 1.76 13.69 13.69 218.38
THRD TF Financial Corp. of PA 1.53 1.30 15.72 13.12 187.34
TPNZ Tappan Zee Fin., Inc. of NY 0.70 0.69 14.46 14.46 84.29
TSBK Timberland Bancorp of WA 0.75 0.75 12.38 12.38 40.65
TRIC Tri-County Bancorp of WY 0.77 0.79 11.85 11.85 77.12
TWIN Twin City Bancorp, Inc. of TN 0.71 0.60 10.88 10.88 84.07
USAB USABancshares, Inc of PA* 0.32 0.28 7.40 7.29 87.80
UCBC Union Community Bancorp of IN 0.58 0.58 13.40 13.40 36.73
UFRM United FSB of Rocky Mount NC(8) 0.57 0.37 6.94 6.94 95.98
UBMT United Fin. Corp. of MT 1.22 1.21 20.24 20.24 84.29
UTBI United Tenn. Bancshares of TN 0.66 0.66 12.95 12.95 52.89
VABF Va. Beach Fed. Fin. Corp of VA 0.75 0.61 8.70 8.70 121.61
WHGB WHG Bancshares of MD 0.54 0.55 14.24 14.24 70.80
WSFS WSFS Financial Corp. of DE* 1.32 1.30 6.96 6.92 121.61
WVFC WVS Financial Corp. of PA 2.13 2.15 17.76 17.76 166.58
WRNB Warren Bancorp of Peabody MA* 1.91 1.70 10.52 10.52 97.48
WSBI Warwick Community Bncrp of NY* 0.55 0.55 12.60 12.60 53.02
WFSL Washington Federal, Inc. of WA 2.07 2.04 14.09 13.00 109.27
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1A (continued)
Weekly Thrift Market Line - Part One
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
Price/ Out- Capital- Last Last 52 Wks Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week Ago(2) 1997(2)
- --------------------- ---------------------------- ------------------------------------------------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
WAMU Washington Mutual, Inc. of WA* 67.38 257,560 17,354.4 72.38 45.38 68.19 -1.19 21.67 5.59
WYNE Wayne Bancorp, Inc. of NJ 23.50 2,014 47.3 27.50 16.00 24.50 -4.08 36.23 -12.15
WAYN Wayne Svgs Bks MHC of OH (47.8 28.25 2,255 30.4 33.00 17.00 28.00 0.89 62.17 -2.59
WCFB Wbstr Cty FSB MHC of IA (45.2) 20.00 2,100 19.0 22.00 13.75 20.00 0.00 45.45 0.00
WBST Webster Financial Corp. of CT 63.81 13,653 871.2 66.88 35.13 63.75 0.09 55.63 -4.05
WEFC Wells Fin. Corp. of Wells MN 18.50 1,959 36.2 19.00 14.00 18.25 1.37 30.93 3.47
WCBI WestCo Bancorp, Inc. of IL 29.00 2,464 71.5 29.25 20.25 28.75 0.87 41.46 6.42
WSTR WesterFed Fin. Corp. of MT 25.88 5,577 144.3 27.00 17.63 25.75 0.50 40.81 1.49
WOFC Western Ohio Fin. Corp. of OH 26.50 2,356 62.4 29.25 21.00 27.00 -1.85 19.10 -1.41
WWFC Westwood Fin. Corp. of NJ 28.50 645 18.4 28.75 17.00 28.00 1.79 65.22 0.88
WEHO Westwood Hmstd Fin Corp of OH 14.94 2,843 42.5 18.13 12.50 15.00 -0.40 13.79 -12.12
FFWD Wood Bancorp of OH 24.00 2,651 63.6 27.00 8.40 24.00 0.00 174.91 27.66
YFCB Yonkers Fin. Corp. of NY 18.44 3,021 55.7 22.00 13.25 18.44 0.00 33.53 -4.21
YFED York Financial Corp. of PA 23.75 8,806 209.1 27.25 14.20 24.00 -1.04 57.28 -7.77
</TABLE>
[RSTUBBED FROMT ABLE ABOVE]
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
WAMU Washington Mutual, Inc. of WA* 1.28 2.38 20.15 18.77 376.88
WYNE Wayne Bancorp, Inc. of NJ 1.07 1.07 16.49 16.49 132.71
WAYN Wayne Svgs Bks MHC of OH (47.8 0.81 0.76 10.58 10.58 110.97
WCFB Wbstr Cty FSB MHC of IA (45.2) 0.64 0.64 10.52 10.52 44.99
WBST Webster Financial Corp. of CT 2.31 3.52 27.99 24.41 514.14
WEFC Wells Fin. Corp. of Wells MN 1.13 1.10 15.13 15.13 102.83
WCBI WestCo Bancorp, Inc. of IL 1.91 1.78 19.72 19.72 128.22
WSTR WesterFed Fin. Corp. of MT 1.30 1.26 19.31 15.69 185.60
WOFC Western Ohio Fin. Corp. of OH 0.61 0.71 23.39 21.83 168.69
WWFC Westwood Fin. Corp. of NJ 1.16 1.25 16.20 14.56 173.18
WEHO Westwood Hmstd Fin Corp of OH 0.31 0.49 10.60 10.60 47.22
FFWD Wood Bancorp of OH 0.89 0.80 8.04 8.04 62.82
YFCB Yonkers Fin. Corp. of NY 1.02 1.01 14.87 14.87 109.83
YFED York Financial Corp. of PA 1.26 1.06 11.62 11.62 131.24
</TABLE>
<PAGE>
Exhibit 1b
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
--------------------------------------------------------- ----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- --------------- NPAs Resvs/ Resvs
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loan
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHCs)
- ----------------------------------------------
SAIF-Insured Thrifts(308) 13.65 13.41 0.96 8.35 4.71 0.92 7.83 0.75 125.22 0.79
NYSE Traded Companies(10) 7.57 7.32 1.15 16.24 6.23 0.82 12.52 1.10 90.92 1.31
AMEX Traded Companies(20) 14.25 14.16 0.89 6.23 4.40 0.87 6.01 0.59 169.77 0.74
NASDAQ Listed OTC Companies(278) 13.77 13.53 0.96 8.29 4.69 0.92 7.84 0.75 122.96 0.78
California Companies(21) 8.12 7.87 0.88 11.28 5.72 0.80 10.25 1.75 76.73 1.26
Florida Companies(5) 8.61 8.22 1.20 14.62 4.90 0.79 9.39 0.55 100.20 0.62
Mid-Atlantic Companies(58) 10.69 10.32 0.85 8.69 5.00 0.82 8.37 0.79 98.84 0.90
Mid-West Companies(147) 14.60 14.41 0.97 7.66 4.51 0.92 7.24 0.62 137.42 0.68
New England Companies(9) 7.64 7.34 0.59 8.50 4.71 0.62 8.78 0.57 165.37 1.00
North-West Companies(11) 16.86 16.50 1.15 8.55 4.45 1.11 8.01 0.33 212.41 0.77
South-East Companies(44) 17.70 17.56 1.10 7.77 4.36 1.06 7.32 0.95 111.19 0.80
South-West Companies(6) 10.64 10.47 0.94 10.98 6.76 0.88 10.19 0.67 82.44 0.73
Western Companies (Excl CA)(7) 16.62 16.27 1.13 7.61 4.48 1.13 7.60 0.27 196.77 0.72
Thrift Strategy(254) 14.83 14.62 0.99 7.73 4.69 0.95 7.39 0.71 124.98 0.73
Mortgage Banker Strategy(33) 7.57 7.13 0.79 11.14 5.12 0.70 10.05 1.00 125.10 1.03
Real Estate Strategy(9) 7.56 7.33 0.95 12.53 6.45 0.87 11.57 1.05 105.92 1.28
Diversified Strategy(8) 8.91 8.73 1.35 16.12 5.25 1.08 13.40 0.58 159.49 1.02
Retail Banking Strategy(4) 6.77 6.49 -0.17 0.79 -3.33 -0.31 -1.32 0.82 142.67 1.24
Companies Issuing Dividends(258) 13.56 13.31 0.98 8.39 4.86 0.93 7.89 0.68 126.59 0.75
Companies Without Dividends(50) 14.12 13.97 0.89 8.12 3.93 0.84 7.51 1.10 117.68 0.97
Equity/Assets <6%(26) 5.01 4.67 0.69 13.98 5.75 0.60 12.30 1.28 90.95 0.98
Equity/Assets 6-12%(143) 8.89 8.55 0.82 9.60 4.97 0.77 9.01 0.80 129.47 0.88
Equity/Assets >12%(139) 19.26 19.13 1.13 6.36 4.32 1.09 6.09 0.62 126.66 0.68
Converted Last 3 Mths (no MHC)(9) 26.83 26.83 1.26 4.72 3.78 1.26 4.72 0.45 152.29 0.93
Actively Traded Companies(37) 8.96 8.70 1.00 12.18 5.47 0.99 12.11 1.03 129.82 0.96
Market Value Below $20 Million(48) 15.42 15.36 0.88 6.15 4.65 0.83 5.78 0.73 120.61 0.69
Holding Company Structure(280) 13.87 13.64 0.96 8.11 4.63 0.92 7.67 0.75 122.16 0.78
Assets Over $1 Billion(59) 7.83 7.23 0.87 11.78 5.15 0.80 10.90 0.79 111.12 0.95
Assets $500 Million-$1 Billion(48) 9.91 9.63 0.91 9.89 4.68 0.82 8.89 0.85 153.53 0.92
Assets $250-$500 Million(67) 12.52 12.26 1.00 8.91 5.00 0.96 8.40 0.67 132.38 0.77
Assets less than $250 Million(134) 17.72 17.65 1.00 6.23 4.42 0.97 6.01 0.73 117.30 0.69
Goodwill Companies(123) 9.69 9.07 0.88 10.16 5.02 0.82 9.38 0.81 112.88 0.82
Non-Goodwill Companies(185) 16.14 16.14 1.02 7.21 4.52 0.98 6.86 0.71 133.30 0.76
Acquirors of FSLIC Cases(10) 7.97 7.52 0.96 13.09 6.42 0.88 11.80 0.94 61.00 0.67
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
---------------------------------------- ------------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- -------- ------- ------- --------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHCs)
______________________________________________
SAIF-Insured Thrifts(308) 19.88 158.57 19.97 164.30 20.77 0.36 1.55 29.93
NYSE Traded Companies(10) 16.41 203.02 18.43 216.43 17.18 0.33 0.87 13.17
AMEX Traded Companies(20) 19.44 136.82 19.14 138.08 20.51 0.34 1.84 35.76
NASDAQ Listed OTC Companies(278) 20.03 159.16 20.08 165.05 20.88 0.36 1.55 30.04
California Companies(21) 17.78 161.29 12.66 170.21 18.38 0.17 0.53 11.05
Florida Companies(5) 18.76 180.76 20.77 200.20 24.70 0.24 0.90 17.22
Mid-Atlantic Companies(58) 19.73 162.97 16.48 172.73 20.64 0.38 1.58 30.68
Mid-West Companies(147) 19.97 153.86 20.72 157.33 20.69 0.34 1.62 30.36
New England Companies(9) 19.40 166.13 12.29 175.48 20.40 0.44 1.54 29.58
North-West Companies(11) 21.73 165.49 25.37 171.41 22.42 0.27 1.07 21.06
South-East Companies(44) 21.15 163.92 25.31 168.04 22.28 0.49 1.90 40.78
South-West Companies(6) 14.68 140.84 14.24 147.58 15.84 0.33 1.43 25.67
Western Companies (Excl CA)(7) 20.92 162.71 24.50 168.86 20.99 0.47 2.10 37.60
Thrift Strategy(254) 20.35 150.77 20.84 155.15 20.90 0.36 1.63 31.95
Mortgage Banker Strategy(33) 18.13 197.58 14.46 214.67 21.19 0.33 1.08 20.22
Real Estate Strategy(9) 15.91 180.14 13.70 185.06 16.90 0.16 0.72 11.62
Diversified Strategy(8) 18.71 246.92 24.59 252.33 20.54 0.55 1.55 30.93
Retail Banking Strategy(4) 15.87 158.71 10.09 164.26 18.39 0.39 2.30 11.84
Companies Issuing Dividends(258) 19.92 161.40 20.00 167.69 20.92 0.43 1.85 35.78
Companies Without Dividends(50) 19.64 142.88 19.82 145.52 19.75 0.00 0.00 0.00
Equity/Assets less than 6%(26) 17.63 213.11 11.08 231.69 19.90 0.23 0.79 15.36
Equity/Assets 6-12%(143) 18.82 175.99 15.35 184.44 19.87 0.38 1.47 26.70
Equity/Assets greater than 12%(139) 21.37 134.71 25.49 136.06 21.88 0.36 1.75 35.67
Converted Last 3 Mths (no MHC)(9) 24.98 125.66 33.07 125.66 24.98 0.06 0.42 11.53
Actively Traded Companies(37) 18.64 211.81 17.84 222.78 19.00 0.49 1.50 27.36
Market Value Below $20 Million(48) 20.38 128.13 19.05 128.76 21.71 0.31 1.77 34.09
Holding Company Structure(280) 20.15 157.41 20.18 162.98 20.90 0.37 1.57 30.69
Assets Over $1 Billion(59) 19.02 199.21 15.68 218.51 20.29 0.41 1.20 23.05
Assets $500 Million-$1 Billion(48) 18.55 183.98 17.68 190.05 20.16 0.36 1.42 28.20
Assets $250-$500 Million(67) 19.07 157.74 19.03 162.58 19.75 0.37 1.53 26.51
Assets less than $250 Million(134) 21.15 135.02 22.86 135.88 21.69 0.34 1.75 35.24
Goodwill Companies(123) 19.15 178.52 16.58 193.52 20.22 0.40 1.46 25.82
Non-Goodwill Companies(185) 20.39 146.26 22.10 146.26 21.14 0.34 1.61 32.57
Acquirors of FSLIC Cases(10) 15.84 195.04 14.81 210.64 16.91 0.63 2.32 26.71
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances; ROI (return on investment) is current EPS divided by
current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations.
The information provided in this report has been obtained from sources
we believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
--------------------------------------------------------- ------------------------
Tang.
Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------ ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts (no MHCs)
- ----------------------------------------------
BIF-Insured Thrifts(60) 11.28 10.94 1.14 12.06 5.94 1.11 11.64 0.78 163.17 1.38
NYSE Traded Companies(4) 15.91 14.34 1.23 8.83 4.46 1.13 8.37 1.55 42.00 0.98
AMEX Traded Companies(7) 12.29 11.94 1.04 10.71 5.64 0.93 9.52 1.27 68.94 1.23
NASDAQ Listed OTC Companies(49) 10.73 10.51 1.15 12.52 6.12 1.12 12.19 0.65 184.48 1.43
California Companies(1) 10.72 10.68 1.46 13.06 7.70 1.46 13.06 0.00 0.00 1.50
Mid-Atlantic Companies(20) 13.66 13.15 0.90 7.99 4.03 0.87 7.69 0.88 116.25 1.19
New England Companies(33) 9.46 9.19 1.29 14.90 7.28 1.23 14.05 0.76 157.33 1.58
North-West Companies(3) 9.35 9.23 1.03 11.63 4.64 1.16 14.24 0.15 720.77 1.05
South-East Companies(3) 18.39 18.14 1.26 8.96 5.55 1.24 8.87 0.37 350.21 0.57
Thrift Strategy(44) 12.29 11.97 1.18 11.69 6.10 1.12 10.96 0.82 142.26 1.31
Mortgage Banker Strategy(7) 8.79 8.43 0.93 12.01 5.20 0.95 11.90 0.44 302.59 1.26
Real Estate Strategy(4) 10.76 10.73 1.73 16.25 8.16 1.62 15.19 0.83 132.18 1.59
Diversified Strategy(5) 6.58 5.97 0.87 13.30 4.75 0.98 15.25 0.82 169.06 1.94
Companies Issuing Dividends(49) 10.36 9.96 1.06 11.44 5.41 1.03 11.01 0.76 168.21 1.34
Companies Without Dividends(11) 15.13 15.04 1.49 14.67 8.19 1.45 14.28 0.85 141.08 1.54
Equity/Assets <6%(4) 5.09 4.95 0.90 16.51 5.32 0.85 15.67 0.97 97.92 1.54
Equity/Assets 6-12%(41) 8.66 8.28 1.18 13.75 6.65 1.14 13.27 0.84 155.90 1.50
Equity/Assets >12%(15) 20.21 19.94 1.13 6.12 4.23 1.10 6.03 0.52 204.55 1.00
Converted Last 3 Mths (no MHC)(3) 22.66 22.41 1.04 4.53 3.43 0.98 4.32 0.69 131.16 1.01
Actively Traded Companies(18) 9.76 9.34 1.27 13.84 6.40 1.22 13.43 0.65 138.70 1.29
Market Value Below $20 Million(2) 9.09 9.03 2.33 27.01 16.98 2.22 25.69 1.11 89.24 1.62
Holding Company Structure(47) 12.22 11.96 1.18 11.87 6.03 1.14 11.47 0.70 162.22 1.38
Assets Over $1 Billion(17) 10.86 10.10 1.04 10.70 4.78 1.06 11.12 0.83 151.42 1.39
Assets $500 Million-$1 Billion(16) 9.36 9.20 1.16 13.28 6.29 1.09 12.27 0.84 135.98 1.53
Assets $250-$500 Million(12) 11.56 11.37 1.21 12.15 6.13 1.15 11.48 0.74 189.46 1.57
Assets less than $250 Million(15) 13.03 12.93 1.20 12.59 6.85 1.14 11.88 0.68 174.77 1.07
Goodwill Companies(33) 9.29 8.66 0.99 11.50 5.54 0.96 11.13 0.86 135.86 1.37
Non-Goodwill Companies(27) 13.59 13.59 1.33 12.71 6.42 1.28 12.24 0.69 194.57 1.38
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
---------------------------------------- ------------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Earning Book Assets Book Earnings Share Yield Ratio(7)
Financial Institution ------- ------- ------- ------- -------- ------- ------ -----
- --------------------- (X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts (no MHCs)
- ----------------------------------------------
BIF-Insured Thrifts(60) 17.52 188.23 19.17 191.26 18.39 0.43 1.44 25.82
NYSE Traded Companies(4) 23.43 197.10 26.68 203.43 23.14 0.76 1.37 26.63
AMEX Traded Companies(7) 16.29 165.52 18.48 173.84 18.55 0.53 1.76 30.27
NASDAQ Listed OTC Companies(49) 17.02 190.05 18.55 192.47 17.99 0.39 1.41 25.20
California Companies(1) 12.99 160.83 17.24 161.49 12.99 0.00 0.00 0.00
Mid-Atlantic Companies(20) 21.60 177.97 21.57 180.57 22.23 0.41 1.24 25.82
New England Companies(33) 15.41 194.24 17.34 202.75 16.05 0.44 1.55 25.72
North-West Companies(3) 16.66 244.09 19.78 198.94 20.70 0.60 1.76 29.62
South-East Companies(3) 19.55 126.34 23.21 128.62 19.92 0.42 2.05 36.37
Thrift Strategy(44) 17.42 175.64 19.70 177.74 18.09 0.43 1.50 26.67
Mortgage Banker Strategy(7) 18.84 214.23 17.77 229.42 20.28 0.28 1.04 21.17
Real Estate Strategy(4) 12.29 185.60 19.97 185.92 13.01 0.26 1.17 13.61
Diversified Strategy(5) 19.38 256.34 16.43 265.21 20.18 0.65 1.57 30.83
Companies Issuing Dividends(49) 17.96 195.62 18.62 199.56 19.17 0.53 1.79 32.28
Companies Without Dividends(11) 15.15 157.20 21.47 158.07 13.27 0.00 0.00 0.00
Equity/Assets <6%(4) 15.49 291.80 14.98 281.70 20.92 0.45 1.24 16.85
Equity/Assets 6-12%(41) 16.57 196.70 16.89 204.24 17.21 0.47 1.54 26.72
Equity/Assets >12%(15) 21.69 133.56 26.59 136.45 21.83 0.33 1.25 25.54
Converted Last 3 Mths (no MHC)(3) 28.02 131.63 29.91 133.06 29.09 0.00 0.00 0.00
Actively Traded Companies(18) 16.12 206.04 18.51 212.50 17.70 0.64 1.79 28.64
Market Value Below $20 Million(2) 3.25 136.47 12.41 137.49 3.38 0.00 0.00 0.00
Holding Company Structure(47) 17.03 181.36 19.92 184.10 18.01 0.40 1.41 24.83
Assets Over $1 Billion(17) 20.70 215.30 20.99 220.43 21.11 0.63 1.57 31.51
Assets $500 Million-$1 Billion(16) 14.28 187.81 16.68 192.62 14.63 0.43 1.44 22.01
Assets $250-$500 Million(12) 17.89 180.53 19.17 185.24 18.88 0.30 1.46 25.37
Assets less than $250 Million(15) 15.91 163.68 19.05 165.77 17.12 0.30 1.29 22.81
Goodwill Companies(33) 17.94 194.31 16.88 200.61 19.28 0.48 1.43 25.21
Non-Goodwill Companies(27) 17.01 181.14 21.85 181.14 17.26 0.37 1.45 26.54
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances; ROI (return on investment) is current EPS divided by
current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations.
The information provided in this report has been obtained from sources
we believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
_________________________________________
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
--------------------------------------------------------- ------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/--------------------- --------------- NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------ ------ ------ ------ ------ ------- ------ ------ ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 12.08 11.96 0.80 7.17 2.74 0.78 6.95 0.53 141.61 0.73
BIF-Insured Thrifts(3) 10.45 9.49 1.11 11.46 3.66 0.85 8.57 0.68 153.86 1.13
NASDAQ Listed OTC Companies(22) 11.87 11.65 0.84 7.71 2.86 0.79 7.16 0.54 142.49 0.79
Florida Companies(3) 9.77 9.75 0.74 7.34 3.00 0.65 6.47 0.41 71.26 0.45
Mid-Atlantic Companies(11) 12.12 11.74 0.81 7.37 2.59 0.79 7.20 0.63 117.28 0.89
Mid-West Companies(6) 13.08 13.06 0.88 7.17 3.12 0.87 6.97 0.41 219.37 0.56
New England Companies(1) 9.02 9.01 1.16 13.70 3.94 0.75 8.85 0.68 153.86 1.57
Thrift Strategy(20) 12.34 12.15 0.81 7.04 2.78 0.79 6.84 0.52 148.13 0.71
Mortgage Banker Strategy(1) 8.20 7.25 0.92 11.11 2.89 0.81 9.83 0.65 63.38 0.96
Diversified Strategy(1) 9.02 9.01 1.16 13.70 3.94 0.75 8.85 0.68 153.86 1.57
Companies Issuing Dividends(22) 11.87 11.65 0.84 7.71 2.86 0.79 7.16 0.54 142.49 0.79
Equity/Assets 6-12%(16) 9.97 9.68 0.79 8.20 2.87 0.72 7.45 0.64 90.57 0.78
Equity/Assets >12%(6) 17.57 17.57 0.99 6.25 2.82 0.99 6.28 0.28 272.29 0.81
Holding Company Structure(3) 10.70 9.75 0.89 8.55 3.12 0.82 7.85 0.58 65.29 0.57
Assets Over $1 Billion(6) 8.77 8.38 0.93 10.58 3.14 0.77 8.75 0.61 88.87 0.92
Assets $500 Million-$1 Billion(2) 11.34 11.34 0.80 7.04 3.12 0.73 6.45 0.41 90.57 0.62
Assets $250-$500 Million(6) 11.55 11.54 0.87 7.74 2.95 0.85 7.55 0.59 153.82 0.56
Assets less than $250 Million(8) 13.90 13.63 0.78 6.15 2.60 0.78 6.12 0.47 186.71 0.88
Goodwill Companies(9) 9.30 8.71 0.92 10.03 3.31 0.79 8.62 0.53 110.26 0.80
Non-Goodwill Companies(13) 13.42 13.42 0.80 6.31 2.59 0.79 6.28 0.55 160.39 0.77
MHC Institutions(22) 11.87 11.65 0.84 7.71 2.86 0.79 7.16 0.54 142.49 0.79
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- -------- ------ ------- ------ -------- ------ ------ --------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 25.63 238.31 28.48 230.77 26.52 0.47 1.89 47.97
BIF-Insured Thrifts(3) 27.52 290.53 29.92 315.57 0.00 0.48 1.50 39.96
NASDAQ Listed OTC Companies(22) 26.89 245.27 28.66 242.88 26.52 0.47 1.84 46.19
Florida Companies(3) 0.00 235.93 22.76 236.74 0.00 0.90 2.71 0.00
Mid-Atlantic Companies(11) 29.64 248.18 30.10 243.31 0.00 0.30 1.42 44.33
Mid-West Companies(6) 25.63 225.27 28.29 225.69 26.52 0.55 2.30 48.47
New England Companies(1) 25.39 320.70 28.92 320.98 0.00 0.76 2.08 52.78
Thrift Strategy(20) 27.64 239.89 28.63 236.88 26.52 0.47 1.87 45.80
Mortgage Banker Strategy(1) 0.00 0.00 28.81 0.00 0.00 0.22 1.22 42.31
Diversified Strategy(1) 25.39 320.70 28.92 320.98 0.00 0.76 2.08 52.78
Companies Issuing Dividends(22) 26.89 245.27 28.66 242.88 26.52 0.47 1.84 46.19
Equity/Assets 6-12%(16) 26.89 263.49 26.78 261.96 26.52 0.47 1.66 46.61
Equity/Assets >12%(6) 0.00 195.20 34.29 195.20 0.00 0.48 2.38 42.86
Holding Company Structure(3) 29.64 263.68 28.18 288.59 0.00 0.41 1.56 27.14
Assets Over $1 Billion(6) 25.39 302.58 27.67 288.77 0.00 0.51 1.80 44.70
Assets $500 Million-$1 Billion(2) 0.00 216.91 24.60 216.91 0.00 0.90 2.63 0.00
Assets $250-$500 Million(6) 25.63 264.22 30.34 264.63 26.52 0.51 1.90 49.20
Assets less than $250 Million(8) 29.64 213.94 28.83 221.06 0.00 0.36 1.71 45.80
Goodwill Companies(9) 26.89 276.16 26.74 275.51 26.52 0.45 1.62 40.32
Non-Goodwill Companies(13) 0.00 229.83 29.81 229.83 0.00 0.48 1.97 53.53
MHC Institutions(22) 26.89 245.27 28.66 242.88 26.52 0.47 1.84 46.19
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances; ROI (return on investment) is current EPS divided by
current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for stock
splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations.
The information provided in this report has been obtained from sources
we believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ----------------------- ---------------- NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------ ------ -------- ------ ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 4.11 3.50 0.79 19.65 6.80 0.70 17.24 1.73 46.72 1.22
CSA Coast Savings Financial of CA(8) 5.20 5.14 0.62 12.49 4.59 0.66 13.38 1.12 84.63 1.39
CFB Commercial Federal Corp. of NE 6.38 5.75 0.97 15.98 6.16 0.95 15.67 0.84 80.01 0.90
DME Dime Bancorp, Inc. of NY* 6.02 4.94 0.62 11.10 3.48 0.62 11.10 1.06 45.34 0.71
DSL Downey Financial Corp. of CA 7.13 7.04 0.73 9.96 5.08 0.70 9.56 0.89 61.86 0.60
FED FirstFed Fin. Corp. of CA 5.35 5.31 0.56 11.24 5.75 0.55 11.03 0.96 210.84 2.62
GSB Golden State Bancorp of CA(8) 5.65 5.05 0.63 11.41 5.31 0.68 12.24 1.08 90.12 1.31
GDW Golden West Fin. Corp. of CA 6.82 6.82 0.91 14.14 7.08 0.90 13.91 1.07 55.16 0.70
GPT GreenPoint Fin. Corp. of NY* 9.69 5.19 1.09 10.41 4.74 1.06 10.17 2.90 28.75 1.22
JSB JSB Financial, Inc. of NY* 23.22 23.22 1.93 8.61 5.89 1.71 7.65 1.07 35.16 0.61
NYB New York Bancorp, Inc. of NY(8) 5.46 5.46 1.65 31.75 6.35 1.68 32.39 0.86 66.31 0.91
OCN Ocwen Financial Corp. of FL 14.14 13.77 3.10 32.13 5.08 1.74 17.99 NA NA NA
SIB Staten Island Bancorp of NY* 24.73 24.00 1.29 5.21 3.71 1.13 4.58 1.15 58.76 1.38
WES Westcorp Inc. of Orange CA 9.09 9.06 0.99 10.58 7.68 0.21 2.26 NA NA 1.81
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares, Inc of LA 16.95 16.95 0.98 5.64 4.41 0.95 5.46 0.50 201.03 1.32
ANE Alliance Bancorp of NE, of CT* 7.36 7.19 0.80 11.71 5.68 0.74 10.79 NA NA 1.91
BKC American Bank of Waterbury CT* 9.01 8.72 1.32 15.52 7.05 1.14 13.44 2.11 41.86 1.54
BFD BostonFed Bancorp of MA 8.37 8.06 0.76 8.43 6.06 0.67 7.50 0.18 371.41 0.82
CFX CFX Corp of Keene NH(8)* 8.71 8.40 0.74 8.95 1.96 0.99 12.04 0.59 128.94 1.06
CNY Carver Bancorp, Inc. of NY 8.48 8.16 -0.11 -1.33 -1.32 0.05 0.60 1.67 41.11 1.15
CBK Citizens First Fin.Corp. of IL 13.88 13.88 0.70 4.87 4.00 0.47 3.27 0.69 44.35 0.36
EBI Equality Bancorp, Inc. of MO 9.92 9.92 0.53 5.33 3.53 0.53 5.33 NA NA NA
ESX Essex Bancorp of Norfolk VA(8) 0.02 -0.08 0.12 NM 3.33 0.10 NM 2.11 51.58 1.27
FCB Falmouth Bancorp, Inc. of MA* 23.94 23.94 0.98 4.06 3.19 0.83 3.42 NA NA 0.83
FAB FirstFed America Bancorp of MA 11.17 11.17 0.17 1.58 0.98 0.53 4.99 0.35 263.67 1.19
GAF GA Financial Corp. of PA 14.82 14.67 1.14 7.12 5.57 1.08 6.72 0.22 76.28 0.43
HBS Haywood Bancshares, Inc. of NC* 14.19 13.69 1.34 11.63 7.09 1.34 11.63 0.67 71.19 0.64
KNK Kankakee Bancorp, Inc. of IL 11.01 10.38 0.88 8.04 6.49 0.86 7.86 1.27 49.02 0.88
KYF Kentucky First Bancorp of KY 17.03 17.03 1.14 6.80 5.60 1.12 6.71 0.13 348.65 0.77
MBB MSB Bancorp of Middletown NY(8)* 8.23 3.81 0.17 2.28 1.41 0.18 2.42 NA NA 0.63
NBN Northeast Bancorp of ME* 6.96 6.15 0.76 10.64 5.19 0.59 8.33 1.03 93.77 1.22
PDB Piedmont Bancorp, Inc. of NC 16.19 16.19 1.19 7.28 5.02 1.19 7.28 1.29 52.20 0.81
SSB Scotland Bancorp, Inc. of NC 24.07 24.07 1.67 5.26 5.73 1.67 5.26 NA NA 0.57
SZB SouthFirst Bancshares of AL 14.23 14.23 0.53 3.75 2.98 0.48 3.44 0.74 40.17 0.39
SRN Southern Banc Company of AL 17.01 16.83 0.14 0.79 0.71 0.50 2.84 NA NA 0.20
SSM Stone Street Bancorp of NC 29.57 29.57 1.54 4.69 4.14 1.54 4.69 0.23 229.34 0.62
TSH Teche Holding Company of LA 13.45 13.45 0.98 7.29 5.60 0.93 6.97 0.28 291.99 0.96
FTF Texarkana Fst. Fin. Corp of AR 15.15 15.15 1.76 11.23 6.09 1.72 10.97 0.17 377.18 0.76
THR Three Rivers Fin. Corp. of MI 13.77 13.72 0.90 6.46 4.47 0.85 6.07 0.87 59.98 0.77
WSB Washington SB, FSB of MD 8.51 8.51 0.88 10.51 6.60 0.52 6.26 NA NA 0.96
WFI Winton Financial Corp. of OH 7.17 7.03 1.05 14.68 6.85 0.86 12.03 0.25 100.24 0.29
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 8.98 8.82 0.75 8.89 6.90 0.49 5.79 1.48 31.23 0.63
FBER 1st Bergen Bancorp of NJ 13.65 13.65 0.77 4.97 3.74 0.77 4.97 0.84 127.66 2.47
AFED AFSALA Bancorp, Inc. of NY 12.86 12.86 0.79 5.85 4.59 0.79 5.85 0.31 221.60 1.44
ALBK ALBANK Fin. Corp. of Albany NY 8.81 6.84 1.18 12.94 7.08 1.17 12.87 0.88 81.33 1.02
AMFC AMB Financial Corp. of IN 14.77 14.77 1.07 6.93 6.06 0.68 4.38 NA NA 0.53
ASBP ASB Financial Corp. of OH 15.57 15.57 0.97 5.70 4.57 0.91 5.35 0.96 75.72 1.07
ABBK Abington Bancorp of MA* 6.83 6.21 0.87 12.53 5.71 0.77 11.06 0.18 233.13 0.68
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
---------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------ ------ ------ -------- ------ ------ --------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 14.71 291.69 11.97 341.69 16.76 0.88 1.47 21.57
CSA Coast Savings Financial of CA(8) 21.81 254.13 13.21 257.11 20.36 0.00 0.00 0.00
CFB Commercial Federal Corp. of NE 16.24 241.39 15.39 267.67 16.56 0.22 0.65 10.53
DME Dime Bancorp, Inc. of NY* 28.70 266.64 16.05 325.03 28.70 0.16 0.53 15.24
DSL Downey Financial Corp. of CA 19.67 187.76 13.40 190.20 20.50 0.32 1.09 21.48
FED FirstFed Fin. Corp. of CA 17.40 180.32 9.66 181.79 17.73 0.00 0.00 0.00
GSB Golden State Bancorp of CA(8) 18.85 200.99 11.35 224.57 17.58 0.00 0.00 0.00
GDW Golden West Fin. Corp. of CA 14.13 185.60 12.65 185.60 14.36 0.50 0.57 8.05
GPT GreenPoint Fin. Corp. of NY* 21.11 240.79 23.33 NM 21.61 1.28 1.77 37.43
JSB JSB Financial, Inc. of NY* 16.98 140.46 32.61 140.46 19.11 1.60 3.17 53.87
NYB New York Bancorp, Inc. of NY(8) 15.75 NM 25.55 NM 15.44 0.60 1.54 24.19
OCN Ocwen Financial Corp. of FL 19.69 NM 54.05 NM NM 0.00 0.00 0.00
SIB Staten Island Bancorp of NY* 26.95 140.52 34.75 144.81 NM 0.00 0.00 0.00
WES Westcorp Inc. of Orange CA 13.02 131.33 11.93 131.64 NM 0.40 2.34 30.53
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares, Inc of LA 22.68 127.76 21.65 127.76 23.40 0.44 2.00 45.36
ANE Alliance Bancorp of NE, of CT* 17.61 185.95 13.69 190.50 19.10 0.20 0.99 17.39
BKC American Bank of Waterbury CT* 14.18 195.41 17.62 202.00 16.39 1.44 2.97 42.11
BFD BostonFed Bancorp of MA 16.51 142.96 11.97 148.38 18.54 0.28 1.33 21.88
CFX CFX Corp of Keene NH(8)* NM 290.21 25.28 301.12 NM 0.88 2.97 NM
CNY Carver Bancorp, Inc. of NY NM 99.28 8.42 103.21 NM 0.00 0.00 NM
CBK Citizens First Fin.Corp. of IL 25.00 124.68 17.30 124.68 NM 0.00 0.00 0.00
EBI Equality Bancorp, Inc. of MO 28.30 150.75 14.95 150.75 28.30 0.24 1.60 45.28
ESX Essex Bancorp of Norfolk VA(8) 30.00 NM 3.31 NM NM 0.00 0.00 0.00
FCB Falmouth Bancorp, Inc. of MA* NM 123.05 29.46 123.05 NM 0.20 1.01 31.75
FAB FirstFed America Bancorp of MA NM 137.05 15.30 137.05 NM 0.00 0.00 0.00
GAF GA Financial Corp. of PA 17.94 128.77 19.08 130.07 19.00 0.48 2.48 44.44
HBS Haywood Bancshares, Inc. of NC* 14.10 126.87 18.00 131.42 14.10 0.60 2.73 38.46
KNK Kankakee Bancorp, Inc. of IL 15.40 122.89 13.54 130.36 15.76 0.48 1.42 21.82
KYF Kentucky First Bancorp of KY 17.86 121.47 20.68 121.47 18.09 0.50 3.64 64.94
MBB MSB Bancorp of Middletown NY(8)* NM 154.60 12.72 333.62 NM 0.60 1.73 NM
NBN Northeast Bancorp of ME* 19.27 196.32 13.66 222.24 24.59 0.21 1.12 21.65
PDB Piedmont Bancorp, Inc. of NC 19.91 140.34 22.72 140.34 19.91 0.40 3.72 74.07
SSB Scotland Bancorp, Inc. of NC 17.47 131.05 31.54 131.05 17.47 0.20 1.97 34.48
SZB SouthFirst Bancshares of AL NM 122.32 17.40 122.32 NM 0.60 2.93 NM
SRN Southern Banc Company of AL NM 116.19 19.76 117.39 NM 0.35 2.07 NM
SSM Stone Street Bancorp of NC 24.13 127.14 37.59 127.14 24.13 0.45 2.17 52.33
TSH Teche Holding Company of LA 17.86 126.50 17.02 126.50 18.69 0.50 2.50 44.64
FTF Texarkana Fst. Fin. Corp of AR 16.42 182.02 27.58 182.02 16.82 0.56 1.98 32.56
THR Three Rivers Fin. Corp. of MI 22.38 142.19 19.57 142.64 23.81 0.40 1.79 40.00
WSB Washington SB, FSB of MD 15.15 153.61 13.07 153.61 25.42 0.10 1.27 19.23
WFI Winton Financial Corp. of OH 14.60 202.59 14.53 206.68 17.80 0.50 2.13 31.06
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 14.50 124.53 11.18 126.75 22.25 0.27 1.03 14.92
FBER 1st Bergen Bancorp of NJ 26.76 140.01 19.12 140.01 26.76 0.20 1.05 28.17
AFED AFSALA Bancorp, Inc. of NY 21.76 129.19 16.61 129.19 21.76 0.28 1.51 32.94
ALBK ALBANK Fin. Corp. of Albany NY 14.12 170.28 15.00 219.22 14.20 0.72 1.52 21.43
AMFC AMB Financial Corp. of IN 16.51 114.23 16.87 114.23 26.12 0.28 1.60 26.42
ASBP ASB Financial Corp. of OH 21.88 135.92 21.16 135.92 23.33 0.40 2.86 62.50
ABBK Abington Bancorp of MA* 17.50 210.21 14.36 231.02 19.81 0.20 0.95 16.67
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------ ------ ------ ------- ------ ------ ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
AABC Access Anytime Bancorp of NM 8.65 8.65 1.44 22.38 11.85 1.34 20.78 1.58 31.35 0.95
AFBC Advance Fin. Bancorp of WV 15.22 15.22 0.87 5.65 4.12 0.84 5.45 1.10 27.69 0.35
AADV Advantage Bancorp, Inc. of WI(8) 10.02 9.38 1.12 12.13 5.33 0.99 10.64 0.47 121.57 1.05
AFCB Affiliated Comm BC, Inc of MA(8) 9.76 9.71 1.08 11.08 4.97 1.08 11.02 0.39 192.06 1.21
ALBC Albion Banc Corp. of Albion NY 8.57 8.57 0.50 5.58 3.67 0.49 5.45 0.12 321.43 0.53
ABCL Alliance Bancorp, Inc. of IL 9.60 9.49 0.84 9.10 5.07 0.93 10.10 0.27 147.57 0.56
ATSB AmTrust Capital Corp. of IN 10.93 10.82 0.40 3.88 3.80 0.23 2.22 1.81 40.38 1.04
AHCI Ambanc Holding Co., Inc. of NY* 11.37 11.37 -0.53 -4.16 -3.59 -0.60 -4.71 0.73 107.99 1.48
ASBI Ameriana Bancorp of IN 11.21 11.21 0.92 8.35 5.58 0.84 7.61 0.52 53.03 0.37
ABCW Anchor Bancorp Wisconsin of WI 6.40 6.29 0.99 16.08 5.65 0.93 15.00 NA NA 1.42
ANDB Andover Bancorp, Inc. of MA* 8.10 8.10 1.06 13.09 6.40 1.03 12.78 0.62 151.68 1.27
ASFC Astoria Financial Corp. of NY 8.07 5.61 0.82 10.37 4.64 0.76 9.64 0.56 67.77 0.92
AVND Avondale Fin. Corp. of IL 7.72 7.72 -1.93 -21.52 -22.65 -1.96 -21.88 1.35 86.34 2.56
BKCT Bancorp Connecticut of CT* 10.60 10.60 1.39 13.29 6.11 1.23 11.80 0.91 131.37 2.04
BPLS Bank Plus Corp. of CA 4.35 3.96 0.34 7.31 5.02 0.39 8.21 1.66 72.86 1.76
BNKU Bank United Corp. of TX 4.89 4.77 0.69 13.68 5.62 0.60 12.00 0.68 41.06 0.36
BWFC Bank West Fin. Corp. of MI 13.66 13.66 0.72 4.94 3.37 0.54 3.67 0.48 32.03 0.22
BANC BankAtlantic Bancorp of FL 5.51 4.56 1.04 18.21 6.47 0.55 9.62 1.10 84.73 1.35
BKUNA BankUnited Fin. Corp. of FL 4.28 3.80 0.28 6.95 2.91 0.21 5.30 0.37 37.97 0.16
BVCC Bay View Capital Corp. of CA 5.35 4.44 0.44 7.40 3.56 0.60 10.08 0.51 230.25 1.59
FSNJ Bayonne Banchsares of NJ 15.62 15.62 0.37 3.86 1.85 0.52 5.41 1.12 47.67 1.38
BFSB Bedford Bancshares, Inc. of VA 14.52 14.52 1.21 8.45 4.90 1.20 8.39 0.53 97.12 0.60
BFFC Big Foot Fin. Corp. of IL 17.53 17.53 0.60 3.46 2.21 0.53 3.05 0.09 150.75 0.30
BYFC Broadway Fin. Corp. of CA 9.84 9.84 0.29 2.75 3.29 0.33 3.14 1.62 52.84 1.02
CBES CBES Bancorp, Inc. of MO 15.78 15.78 1.10 6.33 4.58 0.96 5.53 0.54 90.67 0.54
CCFH CCF Holding Company of GA 10.66 10.66 0.15 1.07 0.73 -0.15 -1.14 0.20 288.02 0.70
CENF CENFED Financial Corp. of CA(8) 5.56 5.55 0.64 12.26 5.64 0.58 11.04 0.97 76.38 1.07
CFSB CFSB Bancorp of Lansing MI 7.92 7.92 1.26 16.41 4.81 1.18 15.36 0.11 526.14 0.62
CKFB CKF Bancorp of Danville KY 21.89 21.89 1.84 7.78 6.57 1.38 5.85 0.47 42.66 0.22
CNSB CNS Bancorp, Inc. of MO 24.33 24.33 0.79 3.21 2.69 0.79 3.21 0.50 80.20 0.58
CSBF CSB Financial Group Inc of IL 24.01 22.65 0.50 2.01 2.06 0.43 1.71 0.85 39.95 0.60
CBCI Calumet Bancorp of Chicago IL 16.77 16.77 1.61 10.01 6.86 1.62 10.09 1.64 76.23 1.58
CAFI Camco Fin. Corp. of OH 9.41 8.73 1.15 11.99 6.90 0.93 9.73 0.48 53.21 0.30
CMRN Cameron Fin. Corp. of MO 21.02 21.02 1.26 5.47 5.09 1.26 5.47 0.55 139.04 0.91
CAPS Capital Savings Bancorp of MO(8) 9.43 9.43 0.98 11.06 5.38 0.95 10.62 0.41 78.85 0.40
CFNC Carolina Fincorp of NC* 22.58 22.58 1.17 6.29 4.00 1.14 6.12 0.06 629.23 0.50
CASB Cascade Financial Corp. of WA 6.93 6.93 0.66 10.21 4.77 0.64 9.93 NA NA 1.13
CATB Catskill Fin. Corp. of NY* 24.32 24.32 1.34 5.20 4.56 1.34 5.20 0.35 184.75 1.49
CNIT Cenit Bancorp of Norfolk VA 6.95 6.36 0.80 11.30 4.64 0.74 10.50 0.52 103.38 0.77
CEBK Central Co-Op. Bank of MA* 9.90 8.91 0.87 8.69 5.05 0.83 8.22 0.53 151.19 1.15
CENB Century Bancorp, Inc. of NC 30.29 30.29 1.69 5.60 4.90 1.70 5.62 0.58 93.95 0.84
CBSB Charter Financial Inc. of IL(8) 15.10 13.45 1.40 9.53 4.87 1.54 10.47 0.56 104.20 0.78
COFI Charter One Financial of OH 6.97 6.51 0.81 11.85 3.29 1.19 17.33 0.38 150.61 0.89
CVAL Chester Valley Bancorp of PA 8.81 8.81 1.00 11.61 4.83 0.96 11.05 0.55 170.54 1.15
CTZN CitFed Bancorp of Dayton OH(8) 6.06 5.54 0.87 13.86 4.07 0.87 13.86 0.37 143.60 1.01
CLAS Classic Bancshares, Inc. of KY 14.88 12.64 0.81 5.53 4.34 0.95 6.47 0.67 93.71 0.94
CBSA Coastal Bancorp of Houston TX 3.47 2.92 0.42 12.45 7.80 0.43 12.77 NA NA 0.58
CFCP Coastal Fin. Corp. of SC 5.98 5.98 1.22 19.67 5.76 1.03 16.52 0.59 151.67 1.20
CMSB Commonwealth Bancorp Inc of PA 9.47 7.48 0.73 7.51 5.11 0.56 5.72 0.42 94.35 0.69
CMSV Commty. Svgs, MHC of FL (48.5) 11.34 11.34 0.80 7.04 3.12 0.73 6.45 0.41 90.57 0.62
CFTP Community Fed. Bancorp of MS 26.62 26.62 1.32 4.49 3.30 1.32 4.49 0.49 53.05 0.45
CFFC Community Fin. Corp. of VA 13.21 13.21 1.12 8.18 5.61 1.13 8.23 0.56 105.58 0.67
CFBC Community First Bnkg Co. of GA 17.80 17.57 0.59 6.09 2.25 0.59 6.09 2.19 25.76 0.75
CIBI Community Inv. Bancorp of OH 11.75 11.75 0.98 8.35 6.44 0.98 8.35 0.65 82.39 0.62
COOP Cooperative Bancshares of NC 7.66 7.66 0.63 8.32 3.70 0.62 8.21 0.17 142.58 0.30
CRZY Crazy Woman Creek Bncorp of WY 23.63 23.63 1.28 4.92 4.69 1.30 4.99 0.18 237.50 0.92
</TABLE>
<PAGE>
{RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
---------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------ ------ ------ -------- ------ ------ --------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
AABC Access Anytime Bancorp of NM 8.44 141.54 12.25 141.54 9.09 0.00 0.00 0.00
AFBC Advance Fin. Bancorp of WV 24.26 134.34 20.45 134.34 25.16 0.32 1.57 38.10
AADV Advantage Bancorp, Inc. of WI(8) 18.77 210.76 21.12 225.29 21.41 0.40 0.60 11.20
AFCB Affiliated Comm BC, Inc of MA(8) 20.13 210.33 20.53 211.45 20.24 0.60 1.68 33.90
ALBC Albion Banc Corp. of Albion NY 27.27 148.33 12.71 148.33 27.91 0.11 0.92 25.00
ABCL Alliance Bancorp, Inc. of IL 19.73 154.72 14.85 156.54 17.78 0.44 1.74 34.38
ATSB AmTrust Capital Corp. of IN 26.34 98.79 10.79 99.80 NM 0.20 1.36 35.71
AHCI Ambanc Holding Co., Inc. of NY* NM 121.60 13.83 121.60 NM 0.20 1.18 NM
ASBI Ameriana Bancorp of IN 17.92 148.57 16.65 148.57 19.66 0.64 3.16 56.64
ABCW Anchor Bancorp Wisconsin of WI 17.70 267.73 17.14 272.46 18.97 0.32 0.86 15.31
ANDB Andover Bancorp, Inc. of MA* 15.63 193.05 15.63 193.05 16.00 0.76 1.90 29.69
ASFC Astoria Financial Corp. of NY 21.54 170.05 13.72 244.37 23.16 0.80 1.45 31.25
AVND Avondale Fin. Corp. of IL NM 112.77 8.70 112.77 NM 0.00 0.00 NM
BKCT Bancorp Connecticut of CT* 16.38 206.07 21.84 206.07 18.45 0.52 2.74 44.83
BPLS Bank Plus Corp. of CA 19.91 138.25 6.01 151.70 17.73 0.00 0.00 0.00
BNKU Bank United Corp. of TX 17.78 231.10 11.31 237.22 20.28 0.64 1.43 25.40
BWFC Bank West Fin. Corp. of MI 29.65 144.39 19.72 144.39 NM 0.24 1.88 55.81
BANC BankAtlantic Bancorp of FL 15.45 269.41 14.83 325.00 29.25 0.13 0.79 12.26
BKUNA BankUnited Fin. Corp. of FL NM 143.04 6.13 161.23 NM 0.00 0.00 0.00
BVCC Bay View Capital Corp. of CA 28.13 226.75 12.13 273.28 20.65 0.40 1.23 34.48
FSNJ Bayonne Banchsares of NJ NM 127.60 19.93 127.60 NM 0.17 1.26 68.00
BFSB Bedford Bancshares, Inc. of VA 20.42 166.57 24.19 166.57 20.57 0.56 1.93 39.44
BFFC Big Foot Fin. Corp. of IL NM 152.82 26.80 152.82 NM 0.00 0.00 0.00
BYFC Broadway Fin. Corp. of CA NM 86.32 8.49 86.32 26.56 0.20 1.57 47.62
CBES CBES Bancorp, Inc. of MO 21.82 138.89 21.92 138.89 25.00 0.40 1.67 36.36
CCFH CCF Holding Company of GA NM 158.67 16.91 158.67 NM 0.55 2.68 NM
CENF CENFED Financial Corp. of CA(8) 17.74 198.74 11.05 199.02 19.70 0.36 0.84 14.94
CFSB CFSB Bancorp of Lansing MI 20.81 328.04 25.98 328.04 22.24 0.48 1.65 34.29
CKFB CKF Bancorp of Danville KY 15.22 123.69 27.07 123.69 20.24 0.50 2.55 38.76
CNSB CNS Bancorp, Inc. of MO NM 122.04 29.70 122.04 NM 0.24 1.37 51.06
CSBF CSB Financial Group Inc of IL NM 101.63 24.40 107.71 NM 0.00 0.00 0.00
CBCI Calumet Bancorp of Chicago IL 14.57 142.42 23.88 142.42 14.45 0.00 0.00 0.00
CAFI Camco Fin. Corp. of OH 14.50 166.75 15.68 179.75 17.87 0.54 2.13 30.86
CMRN Cameron Fin. Corp. of MO 19.64 110.44 23.21 110.44 19.64 0.28 1.45 28.57
CAPS Capital Savings Bancorp of MO(8) 18.60 192.47 18.15 192.47 19.38 0.24 1.03 19.20
CFNC Carolina Fincorp of NC* 25.00 125.81 28.41 125.81 25.74 0.24 1.37 34.29
CASB Cascade Financial Corp. of WA 20.95 179.61 12.45 179.61 21.53 0.00 0.00 0.00
CATB Catskill Fin. Corp. of NY* 21.95 116.28 28.28 116.28 21.95 0.32 1.78 39.02
CNIT Cenit Bancorp of Norfolk VA 21.53 247.71 17.21 270.47 23.17 1.20 1.64 35.40
CEBK Central Co-Op. Bank of MA* 19.80 163.43 16.17 181.43 20.92 0.32 1.08 21.48
CENB Century Bancorp, Inc. of NC 20.41 113.82 34.48 113.82 20.36 2.00 2.34 47.73
CBSB Charter Financial Inc. of IL(8) 20.52 190.91 28.82 214.35 18.67 0.32 1.19 24.43
COFI Charter One Financial of OH NM 277.74 19.35 297.17 20.79 1.00 1.67 50.76
CVAL Chester Valley Bancorp of PA 20.69 226.76 19.98 226.76 21.74 0.44 1.47 30.34
CTZN CitFed Bancorp of Dayton OH(8) 24.59 319.89 19.40 NM 24.59 0.36 0.70 17.14
CLAS Classic Bancshares, Inc. of KY 23.02 124.79 18.57 146.93 19.67 0.28 1.48 34.15
CBSA Coastal Bancorp of Houston TX 12.81 151.55 5.26 180.25 12.50 0.48 1.56 20.00
CFCP Coastal Fin. Corp. of SC 17.37 315.53 18.86 315.53 20.68 0.36 1.58 27.48
CMSB Commonwealth Bancorp Inc of PA 19.55 149.39 14.14 189.18 25.65 0.28 1.42 27.72
CMSV Commty. Svgs, MHC of FL (48.5) NM 216.91 24.60 216.91 NM 0.90 2.63 NM
CFTP Community Fed. Bancorp of MS NM 140.68 37.45 140.68 NM 0.32 1.73 52.46
CFFC Community Fin. Corp. of VA 17.83 140.86 18.61 140.86 17.72 0.56 2.09 37.33
CFBC Community First Bnkg Co. of GA NM 146.91 26.15 148.90 NM 0.60 1.40 62.50
CIBI Community Inv. Bancorp of OH 15.53 130.19 15.30 130.19 15.53 0.32 2.00 31.07
COOP Cooperative Bancshares of NC 27.00 213.61 16.37 213.61 27.36 0.00 0.00 0.00
CRZY Crazy Woman Creek Bncorp of WY 21.33 106.38 25.14 106.38 21.05 0.40 2.50 53.33
</TABLE>
<PAGE>
RP FINANCIAL, LC.
_________________________________________
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
__________________________________________________________ _______________________
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______ _______ _______
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
DNFC D&N Financial Corp. of MI 5.34 5.29 0.89 15.85 5.90 0.82 14.60 0.29 199.00 0.80
DCBI Delphos Citizens Bancorp of OH 26.78 26.78 1.69 6.10 4.28 1.69 6.10 NA NA 0.13
DIME Dime Community Bancorp of NY* 12.51 10.82 0.89 6.05 4.47 0.85 5.80 0.53 145.69 1.36
DIBK Dime Financial Corp. of CT* 8.14 7.91 1.94 23.75 10.31 1.94 23.75 NA NA 3.30
EGLB Eagle BancGroup of IL 11.87 11.87 0.29 2.43 2.16 0.21 1.75 1.36 40.27 0.76
EBSI Eagle Bancshares of Tucker GA 8.17 8.17 0.65 7.67 4.18 0.65 7.75 1.26 54.76 0.94
EGFC Eagle Financial Corp. of CT(8) 6.90 5.49 0.33 4.77 1.65 0.48 6.91 0.52 87.45 0.86
ETFS East Texas Fin. Serv. of TX 17.47 17.47 0.63 3.48 3.23 0.59 3.24 0.33 68.42 0.45
ESBK Elmira Svgs Bank (The) of NY* 6.35 6.19 0.42 6.63 4.50 0.34 5.38 0.64 103.23 0.86
EMLD Emerald Financial Corp. of OH 7.80 7.68 1.05 13.71 5.36 0.97 12.69 NA NA 0.35
EIRE Emerald Isle Bancorp of MA(8)* 6.99 6.99 0.87 12.49 4.75 0.92 13.29 NA NA 0.93
EFBC Empire Federal Bancorp of MT 36.37 36.37 1.47 3.98 3.59 1.47 3.98 0.05 357.14 0.45
EFBI Enterprise Fed. Bancorp of OH 11.43 11.42 0.92 7.43 3.50 0.77 6.18 0.07 297.93 0.30
EQSB Equitable FSB of Wheaton MD 5.11 5.11 0.76 15.07 6.68 0.75 14.91 0.52 34.66 0.26
FCBF FCB Fin. Corp. of Neenah WI 13.88 13.88 1.04 6.62 3.00 0.71 4.55 0.24 277.72 0.85
FFDF FFD Financial Corp. of OH 24.34 24.34 1.94 7.84 6.40 0.95 3.85 0.15 209.30 0.46
FFLC FFLC Bancorp of Leesburg FL 12.85 12.85 1.00 7.15 5.09 0.95 6.80 0.19 224.83 0.53
FFFC FFVA Financial Corp. of VA(8) 13.70 13.43 1.15 8.57 3.64 1.36 10.16 0.11 530.28 1.02
FFWC FFW Corporation of Wabash IN 9.67 8.79 1.04 10.52 6.16 1.02 10.35 0.18 217.37 0.60
FFYF FFY Financial Corp. of OH 13.59 13.59 1.29 9.32 5.40 1.27 9.17 0.62 74.80 0.61
FMCO FMS Financial Corp. of NJ 6.49 6.39 1.02 15.82 6.73 1.01 15.69 1.15 43.53 0.94
FFHH FSF Financial Corp. of MN 10.91 10.91 0.83 7.18 5.14 0.82 7.11 0.22 102.41 0.32
FOBC Fed One Bancorp of Wheeling WV 11.07 10.60 0.92 8.13 4.23 0.91 8.01 0.36 111.94 0.88
FBCI Fidelity Bancorp of Chicago IL 10.47 10.45 0.22 2.11 1.55 0.63 6.06 NA NA 0.13
FSBI Fidelity Bancorp, Inc. of PA 6.84 6.84 0.77 11.22 6.05 0.76 10.96 0.15 340.07 1.04
FFFL Fidelity Bcsh MHC of FL (47.7) 8.21 8.15 0.67 7.64 2.88 0.57 6.49 0.40 51.95 0.28
FFED Fidelity Fed. Bancorp of IN 7.28 7.28 0.73 12.79 6.22 0.68 11.87 0.35 240.48 1.01
FFOH Fidelity Financial of OH 12.01 10.59 0.94 7.26 5.04 0.90 7.01 0.18 167.81 0.38
FIBC Financial Bancorp, Inc. of NY 8.93 8.89 0.92 9.85 6.41 0.98 10.50 1.94 25.52 0.95
FBSI First Bancshares, Inc. of MO 14.40 14.40 1.17 8.23 5.25 1.11 7.85 0.42 76.11 0.37
FBBC First Bell Bancorp of PA 10.80 10.80 1.10 10.10 6.36 1.08 9.93 0.09 112.78 0.12
SKBO First Carnegie MHC of PA(45.0) 16.59 16.59 0.61 4.82 2.07 0.66 5.19 0.54 65.78 0.83
FSTC First Citizens Corp of GA 10.12 7.98 1.96 20.65 7.00 1.75 18.46 1.09 102.28 1.43
FCME First Coastal Corp. of ME* 9.75 9.75 4.17 48.29 30.77 4.01 46.37 1.65 108.25 2.49
FFBA First Colorado Bancorp of CO 13.46 13.18 1.30 9.81 4.72 1.25 9.39 0.15 201.71 0.40
FDEF First Defiance Fin.Corp. of OH 18.43 18.43 0.96 4.71 4.11 0.95 4.63 0.33 140.92 0.60
FESX First Essex Bancorp of MA* 7.60 6.68 0.83 11.19 5.73 0.74 9.97 0.54 164.26 1.47
FFSX First FSB MHC Sxld of IA(46.1) 8.86 8.79 0.73 8.67 3.90 0.71 8.38 0.19 195.85 0.49
FFES First Fed of E. Hartford CT 6.82 6.82 0.57 8.80 5.35 0.63 9.74 0.30 88.43 1.33
BDJI First Fed. Bancorp. of MN 10.71 10.71 0.65 5.81 3.37 0.63 5.64 0.32 120.28 0.79
FFBH First Fed. Bancshares of AR 14.89 14.89 1.06 6.78 4.19 1.01 6.48 0.96 23.38 0.29
FTFC First Fed. Capital Corp. of WI 6.74 6.35 1.08 16.71 5.89 0.89 13.82 NA NA NA
FFKY First Fed. Fin. Corp. of KY 13.67 12.92 1.64 11.98 6.93 1.61 11.82 0.47 98.79 0.52
FFBZ First Federal Bancorp of OH 7.61 7.60 0.97 12.68 5.36 0.97 12.68 0.64 149.74 1.10
FFCH First Fin. Holdings Inc. of SC 6.44 6.44 0.87 14.13 4.30 0.85 13.80 1.35 48.83 0.82
FFBI First Financial Bancorp of IL 8.92 8.92 -0.07 -0.84 -0.69 0.43 5.28 0.33 178.83 0.87
FFHS First Franklin Corp. of OH 9.02 8.97 0.56 6.21 3.62 0.66 7.33 0.47 90.77 0.64
FGHC First Georgia Hold. Corp of GA 8.31 7.70 1.13 13.71 6.11 0.94 11.35 4.97 12.42 0.71
FSPG First Home Bancorp of NJ(8) 6.86 6.76 0.93 13.99 5.80 0.91 13.67 0.77 95.63 1.36
FFSL First Independence Corp. of KS 10.00 10.00 0.65 6.26 5.15 0.65 6.26 1.44 40.91 0.81
FISB First Indiana Corp. of IN 9.49 9.38 1.16 12.17 5.09 0.94 9.86 1.38 100.34 1.63
FKFS First Keystone Fin. Corp of PA 6.63 6.63 0.81 11.26 6.41 0.75 10.33 NA NA 0.86
FLKY First Lancaster Bncshrs of KY 29.46 29.46 1.23 3.65 3.50 1.23 3.65 2.28 13.93 0.35
FLFC First Liberty Fin. Corp. of GA 7.40 6.68 0.73 9.96 3.77 0.79 10.74 0.72 129.39 1.31
CASH First Midwest Fin., Inc. of OH 10.82 9.66 0.96 8.50 6.05 0.89 7.95 0.74 67.97 0.80
FMBD First Mutual Bancorp Inc of IL 13.84 10.62 0.25 1.75 1.40 0.20 1.44 0.40 92.09 0.46
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
_________________________________________ _______________________
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
DNFC D&N Financial Corp. of MI 16.94 250.00 13.36 252.70 18.39 0.18 0.70 11.84
DCBI Delphos Citizens Bancorp of OH 23.39 146.66 39.28 146.66 23.39 0.24 1.10 25.81
DIME Dime Community Bancorp of NY* 22.37 141.95 17.76 164.22 23.35 0.32 1.51 33.68
DIBK Dime Financial Corp. of CT* 9.70 203.03 16.53 209.07 9.70 0.48 1.63 15.79
EGLB Eagle BancGroup of IL NM 115.49 13.70 115.49 NM 0.00 0.00 0.00
EBSI Eagle Bancshares of Tucker GA 23.93 167.28 13.67 167.28 23.66 0.60 2.85 68.18
EGFC Eagle Financial Corp. of CT(8) NM 237.51 16.38 298.53 NM 1.00 1.90 NM
ETFS East Texas Fin. Serv. of TX NM 107.58 18.80 107.58 NM 0.20 0.91 28.17
ESBK Elmira Svgs Bank (The) of NY* 22.24 144.50 9.18 148.45 27.43 0.61 2.16 48.03
EMLD Emerald Financial Corp. of OH 18.65 241.16 18.81 244.86 20.16 0.28 1.25 23.33
EIRE Emerald Isle Bancorp of MA(8)* 21.03 245.03 17.12 245.03 19.77 0.28 0.85 17.95
EFBC Empire Federal Bancorp of MT 27.82 111.22 40.45 111.22 27.82 0.30 1.74 48.39
EFBI Enterprise Fed. Bancorp of OH 28.57 214.92 24.56 215.05 NM 1.00 2.94 NM
EQSB Equitable FSB of Wheaton MD 14.97 209.58 10.71 209.58 15.14 0.00 0.00 0.00
FCBF FCB Fin. Corp. of Neenah WI NM 176.28 24.48 176.28 NM 0.80 2.42 NM
FFDF FFD Financial Corp. of OH 15.63 122.01 29.70 122.01 NM 0.30 1.65 25.86
FFLC FFLC Bancorp of Leesburg FL 19.63 142.87 18.36 142.87 20.66 0.36 1.83 36.00
FFFC FFVA Financial Corp. of VA(8) 27.50 222.16 30.43 226.47 23.19 0.60 1.56 42.86
FFWC FFW Corporation of Wabash IN 16.22 159.46 15.43 175.58 16.50 0.36 1.83 29.75
FFYF FFY Financial Corp. of OH 18.52 172.33 23.42 172.33 18.82 0.80 2.26 41.88
FMCO FMS Financial Corp. of NJ 14.85 219.94 14.27 223.19 14.98 0.28 0.81 11.97
FFHH FSF Financial Corp. of MN 19.47 138.89 15.15 138.89 19.66 0.50 2.47 48.08
FOBC Fed One Bancorp of Wheeling WV 23.64 189.47 20.97 197.80 23.99 0.62 1.91 45.26
FBCI Fidelity Bancorp of Chicago IL NM 134.47 14.08 134.69 22.48 0.40 1.63 NM
FSBI Fidelity Bancorp, Inc. of PA 16.53 169.96 11.62 169.96 16.91 0.36 1.23 20.34
FFFL Fidelity Bcsh MHC of FL (47.7) NM 254.94 20.92 256.56 NM 0.90 2.79 NM
FFED Fidelity Fed. Bancorp of IN 16.07 179.28 13.04 179.28 17.31 0.40 4.44 71.43
FFOH Fidelity Financial of OH 19.83 150.13 18.03 170.29 20.54 0.28 1.62 32.18
FIBC Financial Bancorp, Inc. of NY 15.61 148.32 13.25 148.97 14.65 0.50 2.09 32.68
FBSI First Bancshares, Inc. of MO 19.05 153.95 22.17 153.95 19.98 0.10 0.61 11.63
FBBC First Bell Bancorp of PA 15.73 162.80 17.59 162.80 16.01 0.40 2.19 34.48
SKBO First Carnegie MHC of PA(45.0) NM 177.95 29.52 177.95 NM 0.30 1.59 NM
FSTC First Citizens Corp of GA 14.29 249.20 25.21 316.00 15.98 0.32 1.03 14.75
FCME First Coastal Corp. of ME* 3.25 137.80 13.44 137.80 3.38 0.00 0.00 0.00
FFBA First Colorado Bancorp of CO 21.19 200.80 27.02 204.92 22.12 0.52 2.08 44.07
FDEF First Defiance Fin.Corp. of OH 24.30 122.19 22.52 122.19 24.69 0.36 2.35 57.14
FESX First Essex Bancorp of MA* 17.44 186.26 14.16 211.86 19.57 0.56 2.49 43.41
FFSX First FSB MHC Sxld of IA(46.1) 25.63 212.69 18.83 214.34 26.52 0.48 1.57 40.34
FFES First Fed of E. Hartford CT 18.69 155.49 10.60 155.49 16.89 0.68 1.77 33.01
BDJI First Fed. Bancorp. of MN 29.64 175.40 18.78 175.40 NM 0.00 0.00 0.00
FFBH First Fed. Bancshares of AR 23.89 162.26 24.16 162.26 25.00 0.24 0.89 21.24
FTFC First Fed. Capital Corp. of WI 16.97 265.79 17.90 282.08 20.53 0.48 1.58 26.82
FFKY First Fed. Fin. Corp. of KY 14.43 167.84 22.94 177.54 14.63 0.56 2.60 37.58
FFBZ First Federal Bancorp of OH 18.65 225.47 17.16 225.69 18.65 0.28 1.23 22.95
FFCH First Fin. Holdings Inc. of SC 23.26 294.20 18.94 294.20 23.82 0.84 1.67 38.89
FFBI First Financial Bancorp of IL NM 120.17 10.71 120.17 23.14 0.00 0.00 NM
FFHS First Franklin Corp. of OH 27.62 165.81 14.95 166.76 23.39 0.40 1.38 38.10
FGHC First Georgia Hold. Corp of GA 16.38 209.71 17.42 226.19 19.79 0.00 0.00 0.00
FSPG First Home Bancorp of NJ(8) 17.24 225.39 15.47 228.83 17.65 0.40 1.33 22.99
FFSL First Independence Corp. of KS 19.41 123.85 12.38 123.85 19.41 0.30 2.03 39.47
FISB First Indiana Corp. of IN 19.64 227.59 21.59 230.29 24.26 0.48 1.45 28.57
FKFS First Keystone Fin. Corp of PA 15.60 165.69 10.98 165.69 17.00 0.10 0.59 9.17
FLKY First Lancaster Bncshrs of KY 28.55 103.49 30.49 103.49 28.55 0.50 3.30 NM
FLFC First Liberty Fin. Corp. of GA 26.52 251.03 18.58 278.03 24.60 0.44 1.44 38.26
CASH First Midwest Fin., Inc. of OH 16.52 138.07 14.95 154.79 17.68 0.48 2.12 35.04
FMBD First Mutual Bancorp Inc of IL NM 129.45 17.92 168.78 NM 0.32 1.60 NM
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
__________________________________________________________ _______________________
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- ---------------------- _______ _______ _______ _______ _______ _______ _______ _______ _______ _______
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FMSB First Mutual SB of Bellevue WA* 6.79 6.79 1.03 15.34 5.95 1.01 15.05 0.15 720.77 1.33
FNGB First Northern Cap. Corp of WI 11.05 11.05 0.94 8.35 5.23 0.90 7.99 0.09 535.75 0.53
FFPB First Palm Beach Bancorp of FL 6.25 6.10 0.58 8.67 4.93 0.49 7.26 0.54 53.27 0.45
FSLA First SB SLA MHC of NJ (47.5)(8) 9.50 8.63 0.90 9.64 2.69 0.94 10.06 0.57 99.98 1.04
FWWB First Savings Bancorp of WA 13.68 12.64 1.24 8.48 4.96 1.16 7.93 0.27 241.66 0.97
FSFF First SecurityFed Fin of IL 27.03 27.03 1.29 4.77 4.00 1.29 4.77 0.78 85.16 0.98
SHEN First Shenango Bancorp of PA(8) 11.62 11.62 1.17 10.45 5.27 1.16 10.40 NA NA NA
SOPN First Svgs Bancorp of NC 22.77 22.77 1.75 7.41 5.45 1.75 7.41 0.20 101.34 0.30
FBNW FirstBank Corp of Clarkston WA 16.43 16.43 0.39 3.23 1.70 0.18 1.47 NA NA 0.74
FFDB FirstFed Bancorp, Inc. of AL 9.63 8.81 1.03 10.63 6.91 1.01 10.36 1.31 33.87 0.63
FSPT FirstSpartan Fin. Corp. of SC 26.40 26.40 1.16 6.68 3.09 1.16 6.68 0.47 82.73 0.48
FLAG Flag Financial Corp of GA 9.11 9.11 0.91 9.84 4.81 0.75 8.19 3.92 49.66 2.82
FLGS Flagstar Bancorp, Inc of MI 5.98 5.74 1.41 28.47 7.59 0.70 14.24 3.04 8.02 0.27
FFIC Flushing Fin. Corp. of NY* 12.54 12.05 0.94 6.35 4.50 0.95 6.40 0.27 223.94 1.07
FBHC Fort Bend Holding Corp. of TX 6.77 6.35 0.78 12.28 6.56 0.57 9.06 0.47 114.18 1.02
FTSB Fort Thomas Fin. Corp. of KY 15.82 15.82 1.23 7.55 5.38 1.23 7.55 2.04 23.24 0.52
FKKY Frankfort First Bancorp of KY 16.97 16.97 0.17 0.84 0.87 0.73 3.55 0.10 71.94 0.08
FTNB Fulton Bancorp, Inc. of MO 24.66 24.66 1.25 5.02 3.36 1.08 4.34 1.62 57.19 1.06
GFSB GFS Bancorp of Grinnell IA(8) 11.83 11.83 1.29 11.12 6.74 1.22 10.56 NA NA NA
GUPB GFSB Bancorp, Inc of Gallup NM 12.82 12.82 0.86 5.43 4.65 0.86 5.43 0.29 115.79 0.63
GSLA GS Financial Corp. of LA 43.14 43.14 1.25 3.81 2.08 1.25 3.81 0.14 211.96 0.81
GOSB GSB Financial Corp. of NY* 27.89 27.89 0.45 2.69 1.71 0.46 2.79 NA NA 0.21
GBCI Glacier Bancorp of MT 9.99 9.75 1.50 15.56 4.40 1.53 15.94 0.25 244.11 0.84
GFCO Glenway Financial Corp. of OH 9.29 9.20 0.83 8.74 5.12 0.83 8.74 0.06 542.78 0.38
GTPS Great American Bancorp of IL 19.93 19.93 0.63 2.98 2.42 0.63 2.98 0.28 126.79 0.44
PEDE Great Pee Dee Bancorp of SC 37.86 37.86 1.57 4.15 3.61 1.57 4.15 0.45 97.55 0.57
GSBC Great Southern Bancorp of MO 8.65 8.65 1.84 20.39 6.28 1.74 19.22 1.91 115.21 2.58
GDVS Greater DV SB,MHC of PA (19.9) 11.20 11.20 0.83 7.17 2.00 0.83 7.17 1.52 38.83 1.00
GSFC Green Street Fin. Corp. of NC 35.23 35.23 1.61 4.50 3.67 1.61 4.50 0.07 197.67 0.20
GFED Guaranty Fed Bancshares of MO 26.75 26.75 1.23 4.58 3.75 1.23 4.58 0.64 162.46 1.29
HCBB HCB Bancshares of Camden AR 19.09 18.40 0.25 2.30 1.23 0.25 2.30 NA NA 1.44
HEMT HF Bancorp of Hemet CA 7.87 6.62 0.04 0.46 0.36 0.22 2.69 1.38 27.21 0.67
HFFC HF Financial Corp. of SD 9.58 9.58 1.08 11.49 6.89 1.00 10.65 0.36 241.11 1.14
HFNC HFNC Financial Corp. of NC 18.24 18.24 1.23 6.02 4.50 0.93 4.58 0.79 100.96 0.98
HMNF HMN Financial, Inc. of MN 12.22 11.34 0.95 6.79 5.05 0.76 5.39 0.12 340.52 0.61
HALL Hallmark Capital Corp. of WI 7.30 7.30 0.65 9.11 5.97 0.64 8.91 0.13 355.91 0.67
HARB Harbor FL Bncp MHC of FL (46.1(8) 8.93 8.66 1.29 15.26 4.11 1.24 14.68 0.51 197.92 1.31
HRBF Harbor Federal Bancorp of MD 12.49 12.49 0.74 5.73 4.04 0.70 5.49 NA NA 0.31
HFSA Hardin Bancorp of Hardin MO 11.34 11.34 0.75 6.03 5.44 0.69 5.48 0.19 106.88 0.39
HARL Harleysville SB of PA 6.81 6.81 1.02 15.58 6.87 1.02 15.66 NA NA 0.78
HFGI Harrington Fin. Group of IN 4.47 4.47 0.19 3.96 2.49 0.20 4.22 0.18 21.99 0.19
HARS Harris Fin. MHC of PA (24.3) 8.20 7.25 0.92 11.11 2.89 0.81 9.83 0.65 63.38 0.96
HFFB Harrodsburg 1st Fin Bcrp of KY 27.15 27.15 1.35 5.02 4.48 1.35 5.02 0.45 70.72 0.41
HHFC Harvest Home Fin. Corp. of OH 11.02 11.02 0.84 6.97 5.38 0.73 6.08 0.10 121.05 0.25
HAVN Haven Bancorp of Woodhaven NY 5.72 5.70 0.62 10.47 5.93 0.63 10.56 0.66 96.47 1.09
HTHR Hawthorne Fin. Corp. of CA 4.85 4.85 1.07 23.89 14.70 0.82 18.40 8.06 18.44 1.70
HMLK Hemlock Fed. Fin. Corp. of IL 17.22 17.22 0.57 3.47 2.40 0.98 5.93 0.15 301.56 1.01
HFWA Heritage Financial Corp of WA 29.23 29.23 1.53 5.25 3.32 1.53 5.25 0.05 NA 1.32
HCBC High Country Bancorp of CO 19.46 19.46 0.58 2.95 2.55 0.58 2.95 0.23 345.14 0.95
HBNK Highland Bancorp of CA 7.55 7.55 1.20 16.15 7.44 0.93 12.42 1.94 82.92 2.03
HIFS Hingham Inst. for Sav. of MA* 9.60 9.60 1.25 13.09 6.69 1.25 13.09 0.77 91.33 0.89
HBEI Home Bancorp of Elgin IL 27.01 27.01 0.80 2.90 2.17 0.80 2.90 0.35 NA NA
HBFW Home Bancorp of Fort Wayne IN 12.16 12.16 0.86 6.55 3.97 0.86 6.49 0.09 464.55 0.47
HBBI Home Building Bancorp of IN 14.07 14.07 0.74 5.68 4.77 0.71 5.46 0.67 29.02 0.29
HCFC Home City Fin. Corp. of OH 19.61 19.61 1.24 6.77 4.94 1.26 6.84 0.82 77.27 0.73
HOMF Home Fed Bancorp of Seymour IN 8.65 8.40 1.34 15.90 5.75 1.21 14.44 NA NA 0.67
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
_________________________________________ ______________________
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FMSB First Mutual SB of Bellevue WA* 16.80 239.70 16.29 239.70 17.13 0.20 1.12 18.87
FNGB First Northern Cap. Corp of WI 19.12 155.88 17.22 155.88 20.00 0.36 2.77 52.94
FFPB First Palm Beach Bancorp of FL 20.27 167.71 10.48 171.70 24.19 0.70 1.87 37.84
FSLA First SB SLA MHC of NJ (47.5)(8) NM 342.05 32.49 NM NM 0.48 1.13 42.11
FWWB First Savings Bancorp of WA 20.16 170.42 23.32 184.50 21.55 0.28 1.12 22.58
FSFF First SecurityFed Fin of IL 25.00 119.14 32.21 119.14 25.00 0.00 0.00 0.00
SHEN First Shenango Bancorp of PA(8) 18.97 190.16 22.10 190.16 19.06 0.60 1.40 26.55
SOPN First Svgs Bancorp of NC 18.33 133.71 30.44 133.71 18.33 0.88 3.56 65.19
FBNW FirstBank Corp of Clarkston WA NM 131.57 21.62 131.57 NM 0.28 1.44 NM
FFDB FirstFed Bancorp, Inc. of AL 14.47 155.72 15.00 170.24 14.84 0.50 2.17 31.45
FSPT FirstSpartan Fin. Corp. of SC NM 145.66 38.46 145.66 NM 0.60 1.40 45.11
FLAG Flag Financial Corp of GA 20.79 197.00 17.94 197.00 25.00 0.34 1.62 33.66
FLGS Flagstar Bancorp, Inc of MI 13.18 246.12 14.71 256.21 26.36 0.24 1.10 14.46
FFIC Flushing Fin. Corp. of NY* 22.22 138.33 17.34 143.97 22.02 0.24 1.00 22.22
FBHC Fort Bend Holding Corp. of TX 15.25 174.94 11.85 186.63 20.67 0.40 1.86 28.37
FTSB Fort Thomas Fin. Corp. of KY 18.60 138.81 21.96 138.81 18.60 0.25 1.68 31.25
FKKY Frankfort First Bancorp of KY NM 115.88 19.66 115.88 27.34 0.80 4.96 NM
FTNB Fulton Bancorp, Inc. of MO 29.79 146.17 36.05 146.17 NM 0.20 0.92 27.40
GFSB GFS Bancorp of Grinnell IA(8) 14.83 155.83 18.43 155.83 15.63 0.26 1.49 22.03
GUPB GFSB Bancorp, Inc of Gallup NM 21.53 118.64 15.21 118.64 21.53 0.40 1.92 41.24
GSLA GS Financial Corp. of LA NM 120.13 51.82 120.13 NM 0.28 1.42 68.29
GOSB GSB Financial Corp. of NY* NM 108.47 30.25 108.47 NM 0.00 0.00 0.00
GBCI Glacier Bancorp of MT 22.75 329.96 32.95 338.00 22.20 0.48 1.73 39.34
GFCO Glenway Financial Corp. of OH 19.52 165.19 15.35 166.94 19.52 0.40 1.95 38.10
GTPS Great American Bancorp of IL NM 127.07 25.32 127.07 NM 0.40 1.86 NM
PEDE Great Pee Dee Bancorp of SC 27.68 114.73 43.44 114.73 27.68 0.00 0.00 0.00
GSBC Great Southern Bancorp of MO 15.92 320.92 27.77 320.92 16.89 0.44 1.76 28.03
GDVS Greater DV SB,MHC of PA (19.9) NM 347.92 38.95 347.92 NM 0.36 1.16 58.06
GSFC Green Street Fin. Corp. of NC 27.27 122.20 43.05 122.20 27.27 0.44 2.44 66.67
GFED Guaranty Fed Bancshares of MO 26.65 122.06 32.65 122.06 26.65 0.23 1.76 46.94
HCBB HCB Bancshares of Camden AR NM 101.80 19.43 105.61 NM 0.20 1.36 NM
HEMT HF Bancorp of Hemet CA NM 126.03 9.91 149.82 NM 0.00 0.00 0.00
HFFC HF Financial Corp. of SD 14.51 159.26 15.25 159.26 15.66 0.42 1.41 20.49
HFNC HFNC Financial Corp. of NC 22.22 144.93 26.43 144.93 29.17 0.28 2.00 44.44
HMNF HMN Financial, Inc. of MN 19.81 131.26 16.04 141.38 25.00 0.00 0.00 0.00
HALL Hallmark Capital Corp. of WI 16.76 144.00 10.52 144.00 17.13 0.00 0.00 0.00
HARB Harbor FL Bncp MHC of FL (46.1(8) 24.31 345.85 30.87 NM 25.27 1.40 2.00 48.61
HRBF Harbor Federal Bancorp of MD 24.74 137.84 17.22 137.84 25.82 0.48 2.02 50.00
HFSA Hardin Bancorp of Hardin MO 18.37 114.47 12.98 114.47 20.21 0.48 2.64 48.48
HARL Harleysville SB of PA 14.56 210.82 14.37 210.82 14.49 0.44 1.47 21.36
HFGI Harrington Fin. Group of IN NM 160.80 7.19 160.80 NM 0.12 1.00 40.00
HARS Harris Fin. MHC of PA (24.3) NM NM 28.81 NM NM 0.22 1.22 42.31
HFFB Harrodsburg 1st Fin Bcrp of KY 22.30 110.07 29.89 110.07 22.30 0.40 2.42 54.05
HHFC Harvest Home Fin. Corp. of OH 18.59 128.32 14.14 128.32 21.32 0.44 3.03 56.41
HAVN Haven Bancorp of Woodhaven NY 16.87 165.37 9.45 165.89 16.73 0.30 1.41 23.81
HTHR Hawthorne Fin. Corp. of CA 6.80 143.68 6.98 143.68 8.83 0.00 0.00 0.00
HMLK Hemlock Fed. Fin. Corp. of IL NM 127.90 22.03 127.90 24.35 0.28 1.49 62.22
HFWA Heritage Financial Corp of WA NM 157.92 46.17 157.92 NM 0.00 0.00 0.00
HCBC High Country Bancorp of CO NM 115.71 22.52 115.71 NM 0.00 0.00 0.00
HBNK Highland Bancorp of CA 13.45 198.21 14.97 198.21 17.49 0.00 0.00 0.00
HIFS Hingham Inst. for Sav. of MA* 14.95 186.09 17.87 186.09 14.95 0.48 1.57 23.53
HBEI Home Bancorp of Elgin IL NM 135.93 36.71 135.93 NM 0.40 2.12 NM
HBFW Home Bancorp of Fort Wayne IN 25.20 172.37 20.95 172.37 25.41 0.20 0.65 16.39
HBBI Home Building Bancorp of IN 20.95 115.00 16.18 115.00 21.78 0.30 1.36 28.57
HCFC Home City Fin. Corp. of OH 20.25 122.65 24.05 122.65 20.03 0.36 1.93 39.13
HOMF Home Fed Bancorp of Seymour IN 17.39 257.45 22.28 265.12 19.15 0.35 1.16 20.11
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
__________________________________________________________ _______________________
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- ---------------------- _______ _______ _______ _______ _______ _______ _______ _______ _______ _______
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HWEN Home Financial Bancorp of IN 17.56 17.56 0.86 4.60 4.23 0.74 3.98 1.70 36.51 0.73
HPBC Home Port Bancorp, Inc. of MA* 10.68 10.68 1.67 15.71 7.29 1.66 15.62 NA NA 1.47
HMCI HomeCorp, Inc. of Rockford IL(8) 6.80 6.80 0.47 7.16 3.31 0.36 5.59 2.11 26.35 0.71
HFBC HopFed Bancorp of KY(8) 22.59 22.59 0.99 4.37 3.63 0.99 4.37 0.12 93.93 0.23
HZFS Horizon Fin'l. Services of IA 10.17 10.17 0.85 8.33 5.93 0.68 6.63 0.96 43.73 0.66
HRZB Horizon Financial Corp. of WA* 15.92 15.92 1.56 10.02 6.06 1.55 9.93 NA NA 0.84
IBSF IBS Financial Corp. of NJ 17.73 17.73 0.79 4.51 3.11 0.79 4.51 0.11 130.18 0.49
ITLA ITLA Capital Corp of CA* 10.72 10.68 1.46 13.06 7.70 1.46 13.06 NA NA 1.50
IFSB Independence FSB of DC 7.25 6.45 0.54 8.04 6.76 0.22 3.32 NA NA 0.36
INCB Indiana Comm. Bank, SB of IN(8) 11.88 11.88 0.53 4.32 2.59 0.53 4.32 NA NA 0.93
INBI Industrial Bancorp of OH 16.72 16.72 1.48 8.31 5.44 1.48 8.31 0.31 155.81 0.54
IWBK Interwest Bancorp of WA 6.73 6.62 1.10 16.46 6.42 0.96 14.33 0.69 62.65 0.74
IPSW Ipswich SB of Ipswich MA* 5.21 5.21 1.18 20.53 6.41 0.96 16.78 0.95 77.31 0.96
JXVL Jacksonville Bancorp of TX 14.63 14.63 1.49 9.87 6.49 1.49 9.87 NA NA NA
JXSB Jcksnville SB,MHC of IL (45.6) 10.55 10.55 0.65 5.98 2.52 0.65 5.98 0.79 56.34 0.56
JSBA Jefferson Svgs Bancorp of MO 9.03 7.08 0.79 9.68 3.92 0.77 9.38 0.67 101.16 0.89
JOAC Joachim Bancorp, Inc. of MO(8) 28.14 28.14 0.80 2.74 2.38 0.80 2.74 NA NA 0.30
KSAV KS Bancorp of Kenly NC 12.81 12.81 1.15 8.58 5.75 1.15 8.58 0.44 64.74 0.34
KSBK KSB Bancorp of Kingfield ME* 7.36 7.00 1.07 14.93 6.42 1.07 14.93 NA NA 1.12
KFBI Klamath First Bancorp of OR 14.74 13.40 1.14 5.81 3.70 1.14 5.81 0.03 510.24 0.23
LSBI LSB Fin. Corp. of Lafayette IN 8.64 8.64 0.78 8.67 5.70 0.69 7.65 NA NA 0.82
LVSB Lakeview Financial of NJ 10.68 9.04 1.43 13.49 6.59 0.88 8.35 1.14 59.91 1.49
LARK Landmark Bancshares, Inc of KS 14.09 14.09 1.09 7.61 6.64 0.98 6.88 0.30 151.09 0.62
LARL Laurel Capital Group of PA 10.57 10.57 1.39 13.35 6.12 1.40 13.45 0.42 203.92 1.22
LSBX Lawrence Savings Bank of MA* 10.45 10.45 2.30 25.00 11.54 2.28 24.74 0.52 168.85 1.91
LFED Leeds FSB, MHC of MD (36.3) 16.63 16.63 1.18 7.24 3.05 1.18 7.24 0.06 315.29 0.30
LXMO Lexington B&L Fin. Corp. of MO 26.63 26.63 1.23 4.27 4.16 1.23 4.27 0.67 56.09 0.48
LIFB Life Bancorp of Norfolk VA(8) 10.71 10.42 0.92 8.70 3.76 0.85 8.05 0.41 141.46 1.32
LFCO Life Financial Corp of CA 16.83 16.83 4.81 40.35 9.12 4.81 40.35 NA NA 0.80
LFBI Little Falls Bancorp of NJ 11.68 10.77 0.57 4.32 3.43 0.52 3.93 0.90 38.49 0.77
LOGN Logansport Fin. Corp. of IN 19.21 19.21 1.50 7.75 6.13 1.55 7.99 0.62 45.62 0.38
LONF London Financial Corp. of OH 13.76 13.76 1.09 5.76 5.23 1.01 5.33 0.20 238.16 0.62
LISB Long Island Bancorp, Inc of NY 9.18 9.09 0.86 9.44 4.22 0.71 7.79 0.89 62.67 0.91
MAFB MAF Bancorp, Inc. of IL 7.62 6.71 1.14 14.72 6.65 1.12 14.49 0.32 138.86 0.57
MBLF MBLA Financial Corp. of MO 12.68 12.68 0.81 6.31 4.95 0.82 6.40 0.48 62.09 0.51
MECH MECH Financial Inc of CT* 10.40 10.40 1.79 17.75 10.06 1.78 17.69 0.58 270.14 2.39
MFBC MFB Corp. of Mishawaka IN 12.70 12.70 0.83 6.00 4.63 0.82 5.96 0.09 162.45 0.18
MLBC ML Bancorp of Villanova PA(8) 6.92 6.46 0.70 9.91 3.92 0.50 7.10 0.43 178.98 1.71
MSBF MSB Financial, Inc of MI 16.87 16.87 1.52 8.83 5.35 1.40 8.15 0.84 51.31 0.46
MARN Marion Capital Holdings of IN 20.78 20.33 1.57 7.09 6.06 1.57 7.09 1.43 74.17 1.30
MRKF Market Fin. Corp. of OH 35.57 35.57 1.06 3.30 2.57 1.06 3.30 0.34 26.94 0.18
MFSL Maryland Fed. Bancorp of MD 8.48 8.39 0.65 7.77 3.77 0.91 10.97 0.60 65.66 0.47
MASB MassBank Corp. of Reading MA* 11.21 11.06 1.12 10.54 6.03 1.03 9.73 0.19 131.79 0.86
MFLR Mayflower Co-Op. Bank of MA* 9.64 9.48 1.05 10.93 5.85 1.00 10.33 0.57 154.47 1.56
MDBK Medford Bancorp, Inc. of MA* 8.94 8.41 1.05 11.80 6.05 1.02 11.38 0.16 379.54 1.17
MERI Meritrust FSB of Thibodaux LA(8) 8.49 8.49 1.18 14.53 5.01 1.18 14.53 0.35 62.38 0.41
MWBX MetroWest Bank of MA* 7.34 7.34 1.34 18.12 6.75 1.32 17.79 1.03 130.81 1.78
METF Metropolitan Fin. Corp. of OH 3.96 3.64 0.69 17.52 4.40 0.65 16.45 0.56 108.45 0.79
MCBS Mid Continent Bancshares of KS(8) 10.06 10.06 1.01 10.07 4.52 1.10 10.99 0.27 71.69 0.29
MIFC Mid Iowa Financial Corp. of IA 9.36 9.35 1.21 12.97 7.19 1.33 14.29 0.21 105.32 0.41
MCBN Mid-Coast Bancorp of ME 8.34 8.34 0.76 8.86 5.49 0.71 8.30 1.09 48.53 0.66
MWBI Midwest Bancshares, Inc. of IA 7.23 7.23 0.88 12.56 7.35 0.78 11.14 0.73 52.45 0.62
MWFD Midwest Fed. Fin. Corp of WI(8) 8.81 8.50 1.15 13.20 4.88 1.13 13.01 NA NA 1.02
MFFC Milton Fed. Fin. Corp. of OH 11.84 11.84 0.65 4.81 3.61 0.62 4.64 0.26 83.77 0.35
MIVI Miss. View Hold. Co. of MN 17.61 17.61 1.06 5.78 5.33 1.04 5.67 0.56 225.65 1.90
MBSP Mitchell Bancorp, Inc. of NC 40.12 40.12 1.52 3.59 3.25 1.52 3.59 1.77 29.42 0.64
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
_________________________________________ _____________________
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- ---------------------- _______ _______ _______ _______ _______ _______ _______ _______
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HWEN Home Financial Bancorp of IN 23.65 112.04 19.68 112.04 27.34 0.10 1.14 27.03
HPBC Home Port Bancorp, Inc. of MA* 13.71 206.01 21.99 206.01 13.79 0.80 3.33 45.71
HMCI HomeCorp, Inc. of Rockford IL(8) NM 208.33 14.16 208.33 NM 0.00 0.00 0.00
HFBC HopFed Bancorp of KY(8) 27.59 120.66 27.26 120.66 27.59 0.00 0.00 0.00
HZFS Horizon Fin'l. Services of IA 16.87 132.33 13.45 132.33 21.21 0.18 1.29 21.69
HRZB Horizon Financial Corp. of WA* 16.51 158.17 25.19 158.17 16.67 0.44 2.44 40.37
IBSF IBS Financial Corp. of NJ NM 144.58 25.64 144.58 NM 0.40 2.34 NM
ITLA ITLA Capital Corp of CA* 12.99 160.83 17.24 161.49 12.99 0.00 0.00 0.00
IFSB Independence FSB of DC 14.80 113.35 8.21 127.31 NM 1.00 6.20 NM
INCB Indiana Comm. Bank, SB of IN(8) NM 165.59 19.67 165.59 NM 0.36 1.76 67.92
INBI Industrial Bancorp of OH 18.38 154.07 25.76 154.07 18.38 0.56 3.05 56.00
IWBK Interwest Bancorp of WA 15.58 239.28 16.10 243.38 17.89 0.72 1.81 28.24
IPSW Ipswich SB of Ipswich MA* 15.59 292.34 15.22 292.34 19.08 0.16 1.10 17.20
JXVL Jacksonville Bancorp of TX 15.40 150.82 22.06 150.82 15.40 0.50 2.35 36.23
JXSB Jcksnville SB,MHC of IL (45.6) NM 231.28 24.40 231.28 NM 0.30 1.43 56.60
JSBA Jefferson Svgs Bancorp of MO 25.52 218.25 19.70 278.40 26.33 0.28 1.13 28.87
JOAC Joachim Bancorp, Inc. of MO(8) NM 119.82 33.72 119.82 NM 0.50 3.05 NM
KSAV KS Bancorp of Kenly NC 17.39 145.45 18.63 145.45 17.39 0.80 3.33 57.97
KSBK KSB Bancorp of Kingfield ME* 15.57 213.72 15.73 224.85 15.57 0.10 0.53 8.20
KFBI Klamath First Bancorp of OR 27.06 159.50 23.51 175.44 27.06 0.32 1.39 37.65
LSBI LSB Fin. Corp. of Lafayette IN 17.55 149.63 12.92 149.63 19.89 0.40 1.42 24.84
LVSB Lakeview Financial of NJ 15.18 191.87 20.50 226.67 24.52 0.13 0.51 7.74
LARK Landmark Bancshares, Inc of KS 15.07 112.88 15.90 112.88 16.67 0.40 1.82 27.40
LARL Laurel Capital Group of PA 16.33 210.99 22.30 210.99 16.21 0.35 1.60 26.12
LSBX Lawrence Savings Bank of MA* 8.67 186.77 19.52 186.77 8.76 0.00 0.00 0.00
LFED Leeds FSB, MHC of MD (36.3) NM 229.26 38.13 229.26 NM 0.56 2.67 NM
LXMO Lexington B&L Fin. Corp. of MO 24.01 113.73 30.28 113.73 24.01 0.30 1.78 42.86
LIFB Life Bancorp of Norfolk VA(8) 26.58 221.89 23.77 228.10 28.70 0.48 1.34 35.56
LFCO Life Financial Corp of CA 10.96 200.13 33.67 200.13 10.96 0.00 0.00 0.00
LFBI Little Falls Bancorp of NJ 29.17 132.48 15.47 143.66 NM 0.20 1.04 30.30
LOGN Logansport Fin. Corp. of IN 16.33 121.95 23.43 121.95 15.84 0.40 2.50 40.82
LONF London Financial Corp. of OH 19.14 151.52 20.85 151.52 20.67 0.24 1.55 29.63
LISB Long Island Bancorp, Inc of NY 23.70 215.61 19.78 217.58 28.74 0.60 1.20 28.44
MAFB MAF Bancorp, Inc. of IL 15.04 216.87 16.53 246.18 15.29 0.28 0.74 11.07
MBLF MBLA Financial Corp. of MO 20.21 127.69 16.19 127.69 19.93 0.40 1.40 28.37
MECH MECH Financial Inc of CT* 9.94 160.75 16.73 160.75 9.98 0.00 0.00 0.00
MFBC MFB Corp. of Mishawaka IN 21.60 131.00 16.63 131.00 21.77 0.34 1.26 27.20
MLBC ML Bancorp of Villanova PA(8) 25.53 226.72 15.69 242.90 NM 0.40 1.31 33.33
MSBF MSB Financial, Inc of MI 18.68 160.98 27.15 160.98 20.24 0.30 1.76 32.97
MARN Marion Capital Holdings of IN 16.49 116.50 24.21 119.05 16.49 0.88 3.38 55.70
MRKF Market Fin. Corp. of OH NM 110.71 39.37 110.71 NM 0.28 1.67 65.12
MFSL Maryland Fed. Bancorp of MD 26.54 196.56 16.67 198.75 18.79 0.45 1.49 39.47
MASB MassBank Corp. of Reading MA* 16.58 162.59 18.23 164.92 17.97 1.00 2.12 35.09
MFLR Mayflower Co-Op. Bank of MA* 17.08 178.40 17.20 181.38 18.07 0.80 3.21 54.79
MDBK Medford Bancorp, Inc. of MA* 16.53 185.68 16.60 197.24 17.15 0.72 1.73 28.69
MERI Meritrust FSB of Thibodaux LA(8) 19.94 272.80 23.17 272.80 19.94 0.70 1.00 19.94
MWBX MetroWest Bank of MA* 14.81 252.37 18.54 252.37 15.09 0.12 1.50 22.22
METF Metropolitan Fin. Corp. of OH 22.72 NM 14.20 NM 24.19 0.00 0.00 0.00
MCBS Mid Continent Bancshares of KS(8) 22.13 211.40 21.26 211.40 20.27 0.40 0.92 20.41
MIFC Mid Iowa Financial Corp. of IA 13.91 167.07 15.64 167.30 12.63 0.08 0.65 8.99
MCBN Mid-Coast Bancorp of ME 18.23 158.87 13.24 158.87 19.44 0.52 1.49 27.08
MWBI Midwest Bancshares, Inc. of IA 13.61 161.38 11.67 161.38 15.35 0.24 1.42 19.35
MWFD Midwest Fed. Fin. Corp of WI(8) 20.50 254.24 22.41 263.64 20.80 0.34 1.19 24.46
MFFC Milton Fed. Fin. Corp. of OH 27.68 135.61 16.06 135.61 28.70 0.60 3.87 NM
MIVI Miss. View Hold. Co. of MN 18.75 114.96 20.24 114.96 19.13 0.32 1.71 32.00
MBSP Mitchell Bancorp, Inc. of NC NM 110.86 44.48 110.86 NM 0.40 2.32 71.43
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
__________________________________________________________ _______________________
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______ _______ _______
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MBBC Monterey Bay Bancorp of CA 11.50 10.67 0.47 4.06 2.92 0.43 3.71 0.76 51.39 0.60
MONT Montgomery Fin. Corp. of IN 18.60 18.60 0.72 4.29 3.43 0.72 4.29 NA NA 0.19
MSBK Mutual SB, FSB of Bay City MI 6.58 6.58 0.08 1.25 0.92 0.01 0.10 0.07 434.66 0.62
MYST Mystic Financial of MA* 19.47 19.47 0.78 4.00 3.14 0.78 4.00 0.24 267.67 0.84
NHTB NH Thrift Bancshares of NH 7.82 6.72 0.70 9.26 5.08 0.55 7.30 0.87 105.97 1.14
NSLB NS&L Bancorp, Inc of Neosho MO 19.77 19.63 0.77 3.83 3.63 0.73 3.65 0.14 51.16 0.13
NSSY NSS Bancorp of CT* 7.90 7.66 1.05 13.49 6.73 1.19 15.30 1.31 73.30 1.46
NMSB Newmil Bancorp, Inc. of CT* 9.32 9.32 0.85 8.52 5.16 0.86 8.64 0.90 172.67 3.24
NASB North American SB, FSB of MO 8.07 7.84 1.53 20.15 8.15 1.27 16.65 3.07 27.82 0.98
NBSI North Bancshares of Chicago IL 13.49 13.49 0.52 3.69 2.46 0.50 3.52 NA NA 0.26
FFFD North Central Bancshares of IA 22.92 22.92 1.83 7.49 5.99 1.83 7.49 NA NA 1.11
NEIB Northeast Indiana Bncrp of IN 14.37 14.37 1.20 7.72 5.52 1.20 7.72 0.17 350.00 0.67
NWEQ Northwest Equity Corp. of WI 11.60 11.60 1.06 9.03 5.81 1.01 8.66 NA NA 0.58
NWSB Northwest SB, MHC of PA (30.7) 9.65 9.09 0.96 9.86 2.85 0.96 9.86 0.72 86.28 0.85
NSSB Norwich Financial Corp. of CT(8)* 12.03 11.05 1.13 9.94 4.60 0.91 7.99 1.02 175.07 2.60
NTMG Nutmeg FS&LA of CT 5.51 5.51 0.68 12.20 6.38 0.43 7.83 NA NA 0.55
OHSL OHSL Financial Corp. of OH 10.90 10.90 0.87 7.88 5.31 0.84 7.54 0.30 73.10 0.31
OCFC Ocean Fin. Corp. of NJ 15.17 15.17 1.01 5.69 4.59 1.00 5.62 0.52 83.85 0.86
OTFC Oregon Trail Fin. Corp. of OR 12.49 12.49 0.93 8.04 3.52 0.94 8.16 0.18 180.70 0.55
OFCP Ottawa Financial Corp. of MI 8.62 7.01 0.87 9.92 4.75 0.83 9.43 0.34 109.69 0.44
PFFB PFF Bancorp of Pomona CA 9.71 9.61 0.54 5.26 4.05 0.52 4.99 1.40 67.00 1.38
PSFI PS Financial of Chicago IL 37.32 37.32 1.96 6.07 5.05 1.99 6.15 0.68 31.79 0.52
PVFC PVF Capital Corp. of OH 7.28 7.28 1.36 19.21 8.64 1.28 18.10 1.06 65.77 0.75
PALM Palfed, Inc. of Aiken SC(8) 8.51 8.51 0.39 4.82 1.83 0.67 8.26 2.04 53.36 1.30
PBCI Pamrapo Bancorp, Inc. of NJ 12.88 12.80 1.37 10.35 6.85 1.31 9.89 2.20 29.81 1.16
PFED Park Bancorp of Chicago IL 23.14 23.14 1.11 4.84 4.51 1.14 4.95 0.23 125.00 0.73
PVSA Parkvale Financial Corp of PA 7.91 7.87 1.07 14.01 6.42 1.07 14.01 0.36 397.79 1.88
PBHC Pathfinder BC MHC of NY (46.1)* 11.87 9.97 1.06 9.22 3.37 0.95 8.30 NA NA 0.68
PEEK Peekskill Fin. Corp. of NY 26.10 26.10 1.14 4.28 4.12 1.14 4.28 0.90 39.49 1.34
PFSB PennFed Fin. Services of NJ 6.96 5.96 0.81 11.02 6.34 0.80 10.92 0.58 33.00 0.28
PWBC PennFirst Bancorp of PA 8.37 7.44 0.67 8.85 4.97 0.67 8.85 0.68 87.79 1.45
PWBK Pennwood Bancorp, Inc. of PA 18.34 18.34 0.99 5.21 3.95 1.09 5.71 1.49 42.39 1.04
PBKB People's Bancshares of MA* 4.10 3.93 0.83 15.42 6.36 0.43 7.92 0.57 98.78 1.04
PFDC Peoples Bancorp of Auburn IN 15.27 15.27 1.49 9.76 5.36 1.49 9.76 0.30 102.04 0.37
PBCT Peoples Bank, MHC of CT (40.1)* 9.02 9.01 1.16 13.70 3.94 0.75 8.85 0.68 153.86 1.57
TSBS Peoples Bcrp, MHC of NJ (35.9)(8)* 16.95 15.25 1.30 7.51 2.01 0.91 5.27 NA NA NA
PFFC Peoples Fin. Corp. of OH 18.85 18.85 0.96 5.10 3.34 0.95 5.01 0.04 480.65 0.25
PHBK Peoples Heritage Fin Grp of ME* 6.99 5.25 1.25 16.39 5.94 1.24 16.20 0.88 114.30 1.40
PSFC Peoples Sidney Fin. Corp of OH 24.73 24.73 1.15 5.90 3.48 1.15 5.90 1.13 34.69 0.45
PERM Permanent Bancorp, Inc. of IN 10.00 9.88 0.62 6.51 4.39 0.61 6.46 0.70 70.95 0.97
PMFI Perpetual Midwest Fin. of IA(8) 8.92 8.92 0.49 5.66 3.58 0.44 5.05 0.39 193.33 0.86
PERT Perpetual of SC, MHC (46.8)(8) 11.91 11.91 0.80 6.41 1.95 0.89 7.07 NA NA 1.04
PCBC Perry Co. Fin. Corp. of MO 19.23 19.23 1.08 5.70 4.58 1.08 5.70 0.01 277.78 0.17
PHFC Pittsburgh Home Fin Corp of PA 8.23 8.13 0.82 7.69 6.11 0.70 6.61 1.68 28.88 0.76
PFSL Pocahnts Fed, MHC of AR (47.0)(8) 6.33 6.33 0.63 10.08 3.59 0.62 9.94 NA NA 1.02
PTRS Potters Financial Corp of OH 8.81 8.81 0.96 10.97 6.27 0.95 10.79 0.44 389.09 2.65
PKPS Poughkeepsie Fin. Corp. of NY(8) 8.30 8.30 0.27 3.28 1.76 0.35 4.15 4.03 26.72 1.40
PHSB Ppls Home SB, MHC of PA (45.0) 13.66 13.66 0.73 6.80 2.99 0.71 6.55 0.45 148.08 1.37
PRBC Prestige Bancorp of PA 10.91 10.91 0.60 5.15 4.56 0.58 5.03 0.43 65.96 0.42
PFNC Progress Financial Corp. of PA 5.33 4.75 0.89 17.05 5.50 0.71 13.57 NA NA NA
PSBK Progressive Bank, Inc. of NY(8)* 8.88 8.05 0.98 11.44 6.21 0.96 11.19 0.74 150.14 1.71
PROV Provident Fin. Holdings of CA 11.58 11.58 0.77 5.71 4.66 0.41 3.02 NA NA NA
PULB Pulaski SB, MHC of MO (29.8)(8) 13.30 13.30 1.21 9.31 2.40 1.06 8.14 0.70 49.04 0.42
PLSK Pulaski SB, MHC of NJ (46.0) 11.94 11.94 0.63 6.25 2.65 0.63 6.25 NA NA NA
PULS Pulse Bancorp of S. River NJ 8.19 8.19 1.09 13.66 7.12 1.11 13.81 0.98 43.79 1.67
QCFB QCF Bancorp of Virginia MN 16.45 16.45 1.65 9.37 6.64 1.65 9.37 0.31 263.89 2.00
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
_________________________________________ _______________________
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MBBC Monterey Bay Bancorp of CA NM 136.26 15.67 146.93 NM 0.14 0.70 24.14
MONT Montgomery Fin. Corp. of IN 29.11 107.74 20.04 107.74 29.11 0.22 1.72 50.00
MSBK Mutual SB, FSB of Bay City MI NM 131.18 8.63 131.18 NM 0.00 0.00 0.00
MYST Mystic Financial of MA* NM 127.38 24.81 127.38 NM 0.00 0.00 0.00
NHTB NH Thrift Bancshares of NH 19.70 161.96 12.67 188.59 25.00 0.60 3.08 60.61
NSLB NS&L Bancorp, Inc of Neosho MO 27.55 106.14 20.99 106.91 28.90 0.50 2.84 NM
NSSY NSS Bancorp of CT* 14.86 187.81 14.84 193.67 13.10 0.40 0.98 14.49
NMSB Newmil Bancorp, Inc. of CT* 19.37 161.01 15.00 161.01 19.10 0.32 2.33 45.07
NASB North American SB, FSB of MO 12.27 229.51 18.52 236.29 14.85 1.00 1.65 20.20
NBSI North Bancshares of Chicago IL NM 154.14 20.79 154.14 NM 0.40 2.24 NM
FFFD North Central Bancshares of IA 16.71 128.34 29.42 128.34 16.71 0.25 1.29 21.55
NEIB Northeast Indiana Bncrp of IN 18.12 137.85 19.81 137.85 18.12 0.34 1.59 28.81
NWEQ Northwest Equity Corp. of WI 17.21 152.51 17.70 152.51 17.95 0.60 2.86 49.18
NWSB Northwest SB, MHC of PA (30.7) NM 332.10 32.03 NM NM 0.16 1.11 39.02
NSSB Norwich Financial Corp. of CT(8) 21.72 204.88 24.65 223.13 27.01 0.56 1.80 39.16
NTMG Nutmeg FS&LA of CT 15.67 178.57 9.85 178.57 24.42 0.20 1.90 29.85
OHSL OHSL Financial Corp. of OH 18.83 145.38 15.84 145.38 19.68 0.88 2.89 54.32
OCFC Ocean Fin. Corp. of NJ 21.80 132.57 20.11 132.57 22.07 0.80 2.18 47.62
OTFC Oregon Trail Fin. Corp. of OR 28.38 168.05 20.99 168.05 27.94 0.20 1.12 31.75
OFCP Ottawa Financial Corp. of MI 21.04 207.93 17.92 255.60 22.13 0.40 1.34 28.17
PFFB PFF Bancorp of Pomona CA 24.68 130.43 12.66 131.76 26.00 0.00 0.00 0.00
PSFI PS Financial of Chicago IL 19.79 96.54 36.03 96.54 19.52 0.48 3.37 66.67
PVFC PVF Capital Corp. of OH 11.58 202.76 14.76 202.76 12.29 0.00 0.00 0.00
PALM Palfed, Inc. of Aiken SC(8) NM 249.07 21.20 249.07 NM 0.12 0.45 24.49
PBCI Pamrapo Bancorp, Inc. of NJ 14.61 152.31 19.62 153.30 15.29 1.00 3.85 56.18
PFED Park Bancorp of Chicago IL 22.18 107.63 24.91 107.63 21.66 0.00 0.00 0.00
PVSA Parkvale Financial Corp of PA 15.58 204.24 16.16 205.41 15.58 0.52 1.61 25.12
PBHC Pathfinder BC MHC of NY (46.1)* 29.64 260.35 30.91 310.16 NM 0.19 0.92 27.14
PEEK Peekskill Fin. Corp. of NY 24.25 107.40 28.04 107.40 24.25 0.36 2.22 53.73
PFSB PennFed Fin. Services of NJ 15.77 164.47 11.44 191.89 15.91 0.14 0.80 12.61
PWBC PennFirst Bancorp of PA 20.14 147.61 12.35 165.92 20.14 0.36 1.88 37.89
PWBK Pennwood Bancorp, Inc. of PA 25.30 136.99 25.12 136.99 23.08 0.36 1.71 43.37
PBKB People's Bancshares of MA* 15.72 253.13 10.37 263.75 NM 0.48 2.12 33.33
PFDC Peoples Bancorp of Auburn IN 18.65 177.36 27.08 177.36 18.65 0.44 1.87 34.92
PBCT Peoples Bank, MHC of CT (40.1)* 25.39 320.70 28.92 320.98 NM 0.76 2.08 52.78
TSBS Peoples Bcrp, MHC of NJ (35.9)(8 NM NM 61.23 NM NM 0.35 0.81 40.23
PFFC Peoples Fin. Corp. of OH 29.91 152.69 28.78 152.69 NM 0.50 2.99 NM
PHBK Peoples Heritage Fin Grp of ME* 16.84 260.54 18.22 346.78 17.03 0.88 1.97 33.21
PSFC Peoples Sidney Fin. Corp of OH 28.72 124.86 30.88 124.86 28.72 0.28 1.52 43.75
PERM Permanent Bancorp, Inc. of IN 22.80 142.79 14.28 144.52 22.98 0.44 1.54 35.20
PMFI Perpetual Midwest Fin. of IA(8) 27.94 154.14 13.74 154.14 NM 0.30 1.05 29.41
PERT Perpetual of SC, MHC (46.8)(8) NM 320.51 38.17 320.51 NM 1.40 2.15 NM
PCBC Perry Co. Fin. Corp. of MO 21.85 118.38 22.77 118.38 21.85 0.40 1.71 37.38
PHFC Pittsburgh Home Fin Corp of PA 16.36 139.78 11.50 141.47 19.02 0.24 1.37 22.43
PFSL Pocahnts Fed, MHC of AR (47.0)(8 27.83 273.42 17.29 273.42 28.22 0.90 2.22 61.64
PTRS Potters Financial Corp of OH 15.94 170.80 15.04 170.80 16.21 0.20 1.05 16.67
PKPS Poughkeepsie Fin. Corp. of NY(8) NM 187.67 15.57 187.67 NM 0.24 2.22 NM
PHSB Ppls Home SB, MHC of PA (45.0) NM 183.46 25.07 183.46 NM 0.24 1.28 42.86
PRBC Prestige Bancorp of PA 21.95 110.54 12.06 110.54 22.48 0.20 1.06 23.26
PFNC Progress Financial Corp. of PA 18.18 279.23 14.89 313.11 22.86 0.12 0.75 13.64
PSBK Progressive Bank, Inc. of NY(8)* 16.11 177.00 15.72 195.21 16.48 0.80 2.21 35.56
PROV Provident Fin. Holdings of CA 21.45 124.99 14.47 124.99 NM 0.00 0.00 0.00
PULB Pulaski SB, MHC of MO (29.8)(8) NM NM 50.21 NM NM 1.10 2.56 NM
PLSK Pulaski SB, MHC of NJ (46.0) NM 194.36 23.20 194.36 NM 0.30 1.50 56.60
PULS Pulse Bancorp of S. River NJ 14.05 181.69 14.89 181.69 13.90 0.80 3.08 43.24
QCFB QCF Bancorp of Virginia MN 15.06 144.72 23.81 144.72 15.06 0.00 0.00 0.00
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
__________________________________________________________ _______________________
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______ _______ _______
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
QCBC Quaker City Bancorp of CA 8.63 8.63 0.73 8.41 6.20 0.70 8.08 1.33 70.08 1.18
QCSB Queens County Bancorp of NY* 11.22 11.22 1.54 11.21 3.79 1.55 11.28 0.69 89.32 0.69
RARB Raritan Bancorp of Raritan NJ* 7.37 7.25 1.02 13.34 5.82 1.01 13.18 0.39 208.57 1.26
REDF RedFed Bancorp of Redlands CA(8) 8.32 8.29 1.01 12.28 6.41 1.01 12.28 NA NA 0.86
RELY Reliance Bancorp, Inc. of NY 8.56 5.82 0.90 10.87 5.53 0.94 11.39 0.56 69.33 0.88
RELI Reliance Bancshares Inc of WI 50.09 50.09 1.06 2.16 1.88 1.11 2.27 NA NA 0.57
RIVR River Valley Bancorp of IN 12.72 12.54 0.84 7.18 4.79 0.70 5.99 0.71 122.47 1.05
RVSB Riverview Bancorp of WA 22.73 21.94 1.35 8.56 3.18 1.33 8.40 0.17 218.00 0.58
RSLN Roslyn Bancorp, Inc. of NY* 17.64 17.55 0.96 5.10 3.21 1.22 6.50 0.18 362.05 2.42
SCCB S. Carolina Comm. Bnshrs of SC 26.59 26.59 1.15 4.34 3.41 1.15 4.34 0.87 73.62 0.81
SBFL SB Fngr Lakes MHC of NY (33.1) 9.33 9.33 0.37 3.83 1.42 0.43 4.44 0.50 103.35 1.10
SFED SFS Bancorp of Schenectady NY 12.29 12.29 0.62 4.91 3.80 0.60 4.74 0.84 53.36 0.58
SGVB SGV Bancorp of W. Covina CA 7.55 7.44 0.33 4.42 3.51 0.39 5.12 1.23 26.58 0.42
SHSB SHS Bancorp, Inc. of PA 13.34 13.34 0.67 5.00 4.17 0.67 5.00 1.43 33.94 0.74
SISB SIS Bancorp, Inc. of MA* 7.24 7.24 0.65 8.83 3.56 0.88 12.06 0.47 279.99 2.67
SWCB Sandwich Bancorp of MA(8)* 8.10 7.82 0.98 12.12 5.01 0.96 11.83 0.56 140.03 1.11
SFSL Security First Corp. of OH 9.36 9.22 1.38 14.76 5.67 1.38 14.76 0.43 176.70 0.84
SKAN Skaneateles Bancorp Inc of NY* 6.90 6.72 0.67 9.83 5.99 0.65 9.49 1.89 52.90 1.19
SOBI Sobieski Bancorp of S. Bend IN 14.77 14.77 0.62 3.88 2.97 0.56 3.53 0.13 188.68 0.31
SOSA Somerset Savings Bank of MA(8)* 6.64 6.64 1.15 18.37 7.78 1.12 17.86 4.86 29.23 1.83
SSFC South Street Fin. Corp. of NC(8)* 14.90 14.90 0.85 3.61 3.34 0.87 3.69 0.16 118.51 0.38
SCBS Southern Commun. Bncshrs of AL 20.42 20.42 1.15 5.98 3.89 1.15 5.98 2.47 46.11 1.84
SMBC Southern Missouri Bncrp of MO 16.15 16.15 0.94 5.84 4.42 0.90 5.59 0.88 51.46 0.66
SWBI Southwest Bancshares of IL(8) 11.96 11.96 1.09 9.85 5.23 1.10 9.92 0.18 115.50 0.29
SVRN Sovereign Bancorp, Inc. of PA 4.76 3.95 0.48 11.13 3.02 0.65 15.15 0.67 94.38 0.91
STFR St. Francis Cap. Corp. of WI 7.74 6.85 0.76 9.19 5.14 0.75 9.11 0.21 176.54 0.81
SPBC St. Paul Bancorp, Inc. of IL 8.99 8.97 1.07 12.14 5.56 1.07 12.14 0.24 291.27 1.00
SFFC StateFed Financial Corp. of IA 17.54 17.54 1.27 7.17 5.11 1.27 7.17 2.55 10.16 0.33
SFIN Statewide Fin. Corp. of NJ 9.36 9.34 0.81 8.36 5.23 0.81 8.36 0.38 104.03 0.84
STSA Sterling Financial Corp. of WA 5.48 5.07 0.51 10.96 4.79 0.46 9.91 0.73 65.29 0.83
SFSB SuburbFed Fin. Corp. of IL(8) 6.73 6.71 0.66 10.03 4.52 0.53 8.11 0.47 42.37 0.30
ROSE T R Financial Corp. of NY* 6.27 6.27 0.98 15.68 6.50 0.87 14.01 0.52 74.90 0.72
THRD TF Financial Corp. of PA 8.39 7.00 0.77 7.24 6.00 0.66 6.16 0.29 117.08 0.80
TPNZ Tappan Zee Fin., Inc. of NY 17.16 17.16 0.85 4.86 3.71 0.84 4.79 1.39 39.32 1.18
TSBK Timberland Bancorp of WA 30.46 30.46 1.85 6.06 4.69 1.85 6.06 NA NA 0.91
TRIC Tri-County Bancorp of WY 15.37 15.37 1.02 6.67 5.31 1.05 6.85 NA NA 1.01
TWIN Twin City Bancorp, Inc. of TN 12.94 12.94 0.85 6.65 4.73 0.72 5.62 0.16 88.17 0.20
USAB USABancshares, Inc of PA* 8.43 8.30 0.49 5.72 3.20 0.43 5.01 0.57 70.22 0.75
UCBC Union Community Bancorp of IN 36.48 36.48 1.58 4.33 4.05 1.58 4.33 0.59 32.52 0.22
UFRM United FSB of Rocky Mount NC(8) 7.23 7.23 0.65 8.66 3.14 0.42 5.62 1.06 88.10 1.10
UBMT United Fin. Corp. of MT 24.01 24.01 1.41 6.09 4.65 1.40 6.04 0.48 15.21 0.22
UTBI United Tenn. Bancshares of TN 24.48 24.48 1.25 5.10 4.71 1.25 5.10 0.75 123.77 1.27
VABF Va. Beach Fed. Fin. Corp of VA 7.15 7.15 0.61 8.99 4.23 0.50 7.31 1.24 59.40 0.95
WHGB WHG Bancshares of MD 20.11 20.11 0.77 3.48 3.04 0.78 3.55 0.85 29.87 0.32
WSFS WSFS Financial Corp. of DE* 5.72 5.69 1.12 20.56 6.60 1.10 20.25 1.39 117.68 3.15
WVFC WVS Financial Corp. of PA 10.66 10.66 1.31 11.07 6.09 1.32 11.17 0.20 312.48 1.14
WRNB Warren Bancorp of Peabody MA* 10.79 10.79 2.00 19.45 8.63 1.78 17.31 0.83 132.18 1.68
WSBI Warwick Community Bncrp of NY* 23.76 23.76 1.04 4.37 3.44 1.04 4.37 0.69 67.04 0.80
WFSL Washington Federal, Inc. of WA 12.89 11.90 1.88 15.54 7.46 1.85 15.32 0.60 69.21 0.56
WAMU Washington Mutual, Inc. of WA* 5.35 4.98 0.50 9.55 1.90 0.92 17.75 NA NA 0.99
WYNE Wayne Bancorp, Inc. of NJ 12.43 12.43 0.86 6.10 4.55 0.86 6.10 0.89 88.41 1.18
WAYN Wayne Svgs Bks MHC of OH (47.8 9.53 9.53 0.73 7.89 2.87 0.68 7.40 0.58 65.29 0.46
WCFB Wbstr Cty FSB MHC of IA (45.2) 23.38 23.38 1.43 6.14 3.20 1.43 6.14 0.07 560.00 0.72
WBST Webster Financial Corp. of CT 5.44 4.75 0.54 10.34 3.62 0.82 15.76 0.65 114.22 1.34
WEFC Wells Fin. Corp. of Wells MN 14.71 14.71 1.09 7.67 6.11 1.07 7.46 NA NA NA
WCBI WestCo Bancorp, Inc. of IL 15.38 15.38 1.51 9.79 6.59 1.41 9.13 0.19 147.79 0.37
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
_________________________________________ _______________________
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- _______ _______ _______ _______ _______ _______ _______ _______
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- --------------------------------------
QCBC Quaker City Bancorp of CA 16.14 130.32 11.24 130.32 16.80 0.00 0.00 0.00
QCSB Queens County Bancorp of NY* 26.39 332.17 37.25 332.17 26.21 0.80 2.11 55.56
RARB Raritan Bancorp of Raritan NJ* 17.18 221.34 16.31 224.90 17.39 0.60 2.14 36.81
REDF RedFed Bancorp of Redlands CA(8) 15.60 177.99 14.81 178.63 15.60 0.00 0.00 0.00
RELY Reliance Bancorp, Inc. of NY 18.09 170.68 14.60 250.74 17.26 0.64 1.88 34.04
RELI Reliance Bancshares Inc of WI NM 116.30 58.25 116.30 NM 0.00 0.00 0.00
RIVR River Valley Bancorp of IN 20.88 128.38 16.33 130.23 25.00 0.20 1.05 21.98
RVSB Riverview Bancorp of WA NM 174.36 39.64 180.66 NM 0.12 0.71 22.22
RSLN Roslyn Bancorp, Inc. of NY* NM 162.04 28.58 162.85 24.46 0.28 1.23 38.36
SCCB S. Carolina Comm. Bnshrs of SC 29.33 126.80 33.71 126.80 29.33 0.64 2.91 NM
SBFL SB Fngr Lakes MHC of NY (33.1) NM 260.07 24.27 260.07 NM 0.40 1.29 NM
SFED SFS Bancorp of Schenectady NY 26.30 130.44 16.03 130.44 27.22 0.32 1.38 36.36
SGVB SGV Bancorp of W. Covina CA 28.51 123.76 9.34 125.58 24.62 0.00 0.00 0.00
SHSB SHS Bancorp, Inc. of PA 23.96 119.87 15.99 119.87 23.96 0.00 0.00 0.00
SISB SIS Bancorp, Inc. of MA* 28.10 213.18 15.43 213.18 20.59 0.64 1.66 46.72
SWCB Sandwich Bancorp of MA(8)* 19.98 230.88 18.70 239.18 20.47 1.40 2.80 56.00
SFSL Security First Corp. of OH 17.65 250.60 23.45 254.24 17.65 0.32 1.52 26.89
SKAN Skaneateles Bancorp Inc of NY* 16.71 157.56 10.87 161.90 17.30 0.28 1.44 24.14
SOBI Sobieski Bancorp of S. Bend IN NM 136.00 20.09 136.00 NM 0.32 1.44 48.48
SOSA Somerset Savings Bank of MA(8)* 12.86 215.35 14.29 215.35 13.23 0.00 0.00 0.00
SSFC South Street Fin. Corp. of NC(8) 29.95 176.92 26.36 176.92 29.27 0.40 3.11 NM
SCBS Southern Commun. Bncshrs of AL 25.71 141.40 28.87 141.40 25.71 0.30 1.67 42.86
SMBC Southern Missouri Bncrp of MO 22.61 129.89 20.98 129.89 23.61 0.50 2.35 53.19
SWBI Southwest Bancshares of IL(8) 19.13 178.05 21.29 178.05 19.00 0.80 2.77 52.98
SVRN Sovereign Bancorp, Inc. of PA NM 276.58 13.16 333.17 24.33 0.08 0.40 13.11
STFR St. Francis Cap. Corp. of WI 19.45 177.21 13.72 200.37 19.63 0.56 1.29 25.11
SPBC St. Paul Bancorp, Inc. of IL 17.99 209.03 18.80 209.56 17.99 0.40 1.60 28.78
SFFC StateFed Financial Corp. of IA 19.57 136.92 24.01 136.92 19.57 0.20 1.48 28.99
SFIN Statewide Fin. Corp. of NJ 19.12 158.65 14.85 158.98 19.12 0.44 1.93 36.97
STSA Sterling Financial Corp. of WA 20.87 176.60 9.68 191.08 23.08 0.00 0.00 0.00
SFSB SuburbFed Fin. Corp. of IL(8) 22.10 208.62 14.04 209.25 27.32 0.32 0.66 14.55
ROSE T R Financial Corp. of NY* 15.39 221.40 13.88 221.40 17.22 0.68 2.24 34.52
THRD TF Financial Corp. of PA 16.67 162.21 13.61 194.36 19.62 0.40 1.57 26.14
TPNZ Tappan Zee Fin., Inc. of NY 26.97 130.57 22.40 130.57 27.36 0.28 1.48 40.00
TSBK Timberland Bancorp of WA 21.33 129.24 39.36 129.24 21.33 0.00 0.00 0.00
TRIC Tri-County Bancorp of WY 18.83 122.36 18.80 122.36 18.35 0.40 2.76 51.95
TWIN Twin City Bancorp, Inc. of TN 21.13 137.87 17.84 137.87 25.00 0.40 2.67 56.34
USAB USABancshares, Inc of PA* NM 135.14 11.39 137.17 NM 0.00 0.00 0.00
UCBC Union Community Bancorp of IN 24.67 106.79 38.96 106.79 24.67 0.00 0.00 0.00
UFRM United FSB of Rocky Mount NC(8) NM 261.24 18.89 261.24 NM 0.24 1.32 42.11
UBMT United Fin. Corp. of MT 21.52 129.69 31.14 129.69 21.69 1.00 3.81 NM
UTBI United Tenn. Bancshares of TN 21.21 108.11 26.47 108.11 21.21 0.00 0.00 0.00
VABF Va. Beach Fed. Fin. Corp of VA 23.67 204.02 14.60 204.02 29.10 0.24 1.35 32.00
WHGB WHG Bancshares of MD NM 124.65 25.07 124.65 NM 0.32 1.80 59.26
WSFS WSFS Financial Corp. of DE* 15.15 287.36 16.45 289.02 15.38 0.00 0.00 0.00
WVFC WVS Financial Corp. of PA 16.43 197.07 21.01 197.07 16.28 1.20 3.43 56.34
WRNB Warren Bancorp of Peabody MA* 11.59 210.36 22.70 210.36 13.02 0.52 2.35 27.23
WSBI Warwick Community Bncrp of NY* 29.09 126.98 30.18 126.98 29.09 0.00 0.00 0.00
WFSL Washington Federal, Inc. of WA 13.41 196.95 25.40 213.46 13.60 0.87 3.14 42.03
WAMU Washington Mutual, Inc. of WA* NM 334.39 17.88 NM 28.31 1.16 1.72 NM
WYNE Wayne Bancorp, Inc. of NJ 21.96 142.51 17.71 142.51 21.96 0.20 0.85 18.69
WAYN Wayne Svgs Bks MHC of OH (47.8 NM 267.01 25.46 267.01 NM 0.62 2.19 NM
WCFB Wbstr Cty FSB MHC of IA (45.2) NM 190.11 44.45 190.11 NM 0.80 4.00 NM
WBST Webster Financial Corp. of CT 27.62 227.97 12.41 261.41 18.13 0.80 1.25 34.63
WEFC Wells Fin. Corp. of Wells MN 16.37 122.27 17.99 122.27 16.82 0.48 2.59 42.48
WCBI WestCo Bancorp, Inc. of IL 15.18 147.06 22.62 147.06 16.29 0.68 2.34 35.60
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit 1B (continued)
Weekly Thrift Market Line - Part Two
Prices As Of February 13, 1998
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
__________________________________________________________ _______________________
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ___ _______ _______ _______ _______ _______ _______ _______ _______ _______
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
WSTR WesterFed Fin. Corp. of MT 10.40 8.45 0.81 7.25 5.02 0.78 7.03 0.35 136.97 0.73
WOFC Western Ohio Fin. Corp. of OH 13.87 12.94 0.37 2.65 2.30 0.43 3.09 0.44 115.19 0.66
WWFC Westwood Fin. Corp. of NJ 9.35 8.41 0.68 7.39 4.07 0.74 7.97 0.15 148.48 0.60
WEHO Westwood Hmstd Fin Corp of OH 22.45 22.45 0.67 2.33 2.07 1.05 3.68 0.12 171.61 0.23
FFWD Wood Bancorp of OH 12.80 12.80 1.44 11.41 3.71 1.29 10.26 0.39 93.94 0.44
YFCB Yonkers Fin. Corp. of NY 13.54 13.54 1.04 7.04 5.53 1.03 6.97 0.49 71.78 0.82
YFED York Financial Corp. of PA 8.85 8.85 0.96 11.41 5.31 0.81 9.60 2.22 26.96 0.69
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
_________________________________________ _______________________
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Earning Book Assets Book Earnings Share Yield Ratio(7)
Financial Institution _______ _______ _______ _______ _______ _______ _______ _______
- ---------------------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
WSTR WesterFed Fin. Corp. of MT 19.91 134.02 13.94 164.95 20.54 0.48 1.85 36.92
WOFC Western Ohio Fin. Corp. of OH NM 113.30 15.71 121.39 NM 1.00 3.77 NM
WWFC Westwood Fin. Corp. of NJ 24.57 175.93 16.46 195.74 22.80 0.20 0.70 17.24
WEHO Westwood Hmstd Fin Corp of OH NM 140.94 31.64 140.94 NM 0.28 1.87 NM
FFWD Wood Bancorp of OH 26.97 298.51 38.20 298.51 30.00 0.34 1.42 38.20
YFCB Yonkers Fin. Corp. of NY 18.08 124.01 16.79 124.01 18.26 0.28 1.52 27.45
YFED York Financial Corp. of PA 18.85 204.39 18.10 204.39 22.41 0.52 2.19 41.27
</TABLE>
<PAGE>
EXHIBIT 2
Peer Group Core Earnings Analysis
RP FINANCIALS, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Core Earnings Analysis
Comparable Institution Analysis
For the Twelve Months Ended December 31, 1997
<TABLE>
<CAPTION>
Estimated
Net Income Less: Net Tax Effect Less: Extd Core Income Estimated
to Common Gains(Loss) @ 34% Items to Common Shares Core EPS
--------- ----------- ----- ----- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Comparagle Group
- ----------------
GAF GA Financial Corp. of PA 8,371 -705 240 0 7,852 7,718 1.02
HRBF Harbor Federal Bancorp of MD 1,627 -96 33 0 1,564 1,693 0.92
LARL Laurel Capital Group of PA 2,925 13 -4 0 2,934 2,175 1.35
PEEK Peekskill Fin. Corp. of NY(1) 2,098 0 0 0 2,098 3,127 0.67
PWBK Pennwood Bancorp, Inc. of PA(1) 473 65 -22 0 516 570 0.91
PHFC Pittsburgh Home Fin. Corp. of PA 2,111 -441 150 0 1,820 1,969 0.92
PRBC Prestige Bancorp of PA 784 -21 7 0 770 915 0.84
SFED SFS Bancorp of Schenectady NY 1,068 -56 19 0 1,031 1,208 0.85
THRD TF Financial Corp. of PA 4,874 -1,124 382 0 4,123 3,187 1.30
WHGB WHG Bancshares of MD(1) 754 15 -5 0 764 1,392 0.55
</TABLE>
(1) Financial information is for the quarter ending September 30, 1997.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE>
Exhibit 3
PRO FORMA ANALYSIS SHEET
Pennsylvania Savings Bank
Prices as of February 13, 1998
<TABLE>
<CAPTION>
Peer Group Pennsylvania Companies All SAIF Insured
------------------ --------------------- ------------------
Price Multiple Symbol Subject (1) Mean Median Mean Median Mean Median
- -------------- ------ ----------- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Price-earnings ratio = P/E 26.13x 21.09x 21.95x 18.35x 17.31x 19.91x 19.57x
Price-book ratio = P/B 99.50% 138.96% 133.71% 176.94% 164.25% 162.17% 152.82%
Price-assets ratio = P/A 19.07% 19.00% 18.15% 15.77% 14.63% 20.38% 18.80%
Valuation Parameters
Pre-Conversion Earnings (Y) $708,000 ESOP Stock Purchases (E) 8.00%
Pre-Conversion Book Value (B) $15,245,000 Cost of ESOP Borrowings (S) 0.00%(4)
Pre-Conversion Assets (A) $129,530,000 ESOP Amortization (T) 10.00 years
Reinvestment Rate (2)(R) 3.98% 1998 MRP Amount (M) 4.00%
Est. Conversion Expenses (3)(X) 3.39% 1998 MRP Vesting (N) 5.00 years
Tax rate (TAX) 34.00% Percentage Sold (PCT) 51.94%
Calculation of Pro Forma Value After Conversion
1. V= P/E * Y V= $26,954,178
---------------------------------------------------------
1 - P/E * PCT * ((1-X-E-M)*R - (1-TAX)*E/T - (1-TAX)*M/N)
2. V= P/B * B V= $26,954,178
---------------------------------------------------------
1 - P/B * PCT * (1-X-E-M)
3. V= P/A * A V= $26,954,178
---------------------------------------------------------
1 - P/A * PCT * (1-X-E-M)
Full
Gross Exchange Conversion
Conclusion Proceeds Ratio Value
Minimum $11,900,000 1.9005 $22,911,051
Midpoint $14,000,000 2.2358 $26,954,178
Maximum $16,100,000 2.5712 $30,997,305
Supermaximum Value $18,515,000 2.9569 $35,646,900
- -----------------------
(1) Pricing ratios shown reflect the midpoint of the offering.
(2) Net return reflects a reinvestment rate of 6.03 percent, and a tax rate of 34.00 percent.
(3) Estimated offering expenses based on prospectus.
(4) No cost is applicable since holding company will fund the ESOP loan.
</TABLE>
<PAGE>
EXHIBIT 4
Pro Forma Effect of Conversion Proceeds
<PAGE>
Exhibit 4
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Minimum Value
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Conversion Proceeds
Full Conversion Value $22,911,051
Exchange Ratio 1.9005
Offering Proceeds $11,900,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $11,425,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $11,425,000
Less: Non-Cash Stock Purchases (1) 1,428,000
-----------
Net Proceeds Reinvested $9,997,000
Estimated net incremental rate of return 3.98%
Earnings Increase $397,881
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 62,832
Less: 1998 MRP Vesting (4) 62,832
-----------
Net Earnings Increase $272,217
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
12 Months ended December 31, 1997 (reported) $708,000 $272,217 $980,217
12 Months ended December 31, 1997 (core) $713,000 $272,217 $985,217
Before Net Cash After
4. Pro Forma Net Worth Conversion (5) Proceeds Conversion
-------------- -------- ----------
Reported as of December 31, 1997 $15,245,000 $9,997,000 $25,242,000
Tangible as of December 31, 1997 $15,237,750 $9,997,000 $25,234,750
Before Net Cash After
5. Pro Forma Assets Conversion (5) Proceeds Conversion
-------------- -------- ----------
Reported as of December 31, 1997 $129,530,000 $9,997,000 $139,527,000
</TABLE>
(1) Includes ESOP and 1998 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is tax-
effected at a 34.00 percent rate.
(4) 1998 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
(5) Includes $247,000 of MHC assets consolidated during the conversion.
<PAGE>
Exhibit 4
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Midpoint Value
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Conversion Proceeds $26,954,178
Full Conversion Value 2.2358
Exchange Ratio
Offering Proceeds $14,000,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $13,525,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $13,525,000
Less: Non-Cash Stock Purchases (1) 1,680,OOO
-----------
Net Proceeds Reinvested $11,845,000
Estimated net incremental rate of return 3.98%
Earnings Increase $471,431
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 73,920
Less: 1998 MRP Vesting (4) 73,920
-----------
Net Earnings Increase $323,591
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
-------------- -------- -----------
12 Months ended December 31, 1997 (reported) $708,000 $323,591 $1,031,591
12 Months ended December 31, 1997 (core) $713,000 $323,591 $1,036,591
Before Net Cash After
4. Pro Forma Net Worth Conversion (5) Proceeds Conversion
-------------- -------- ----------
Reported as of December 31, 1997 $15,245,000 $11,845,000 $27,090,000
Tangible as of December 31, 1997 $15,237,750 $11,845,000 $27,082,750
Before Net Cash After
5. Pro Forma Assets Conversion (5) Proceeds Conversion
-------------- --------- ----------
Reported as of December 31, 1997 $129,530,000 $11,845,000 $141,375,000
</TABLE>
(1) Includes ESOP and 1998 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is tax-
effected at a 34.00 percent rate.
(4) 1998 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
(5) Includes $247,000 of MHC assets consolidated during the conversion.
<PAGE>
Exhibit 4
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Maximum Value
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Conversion Proceeds
Full Conversion Value $30,997,305
Exchange Ratio 2.5712
Offering Proceeds $16,100,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $15,625,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $15,625,000
Less: Non-Cash Stock Purchases (1) 1,932,OOO
-----------
Net Proceeds Reinvested $13,693,000
Estimated net incremental rate of return 3.98%
Earnings Increase $544,981
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 85,008
Less: 1998 MRP Vesting (4) 85,008
-----------
Net Earnings Increase $374,965
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
12 Months ended December 31, 1997 (reported) $708,000 $374,965 $1,082,965
12 Months ended December 31, 1997 (core) $713,000 $374,965 $1,087,965
Before Net Cash After
4. Pro Forma Net Worth Conversion (5) Proceeds Conversion
-------------- -------- ----------
Reported as of December 31, 1997 $15,245,000 $13,693,000 $28,938,000
Tangible as of December 31, 1997 $15,237,750 $13,693,000 $28,930,750
Before Net Cash After
5. Pro Forma Assets Conversion (5) Proceeds Conversion
-------------- -------- ----------
Reported as of December 31, 1997 $129,530,000 $13,693,000 $143,223,000
</TABLE>
(1) Includes ESOP and 1998 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 years, amortization expense is tax-
effected at a 34.00 percent rate.
(4) 1998 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
(5) Includes $247,000 of MHC assets consolidated during the conversion.
<PAGE>
Exhibit 4
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Pennsylvania Savings Bank
At the Supermaximum Value
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Conversion Proceeds
Full Conversion Value $35,646,900
Exchange Ratio 2.9569
Offering Proceeds $18,515,000
Less: Estimated Offering Expenses 475,000
-----------
Net Conversion Proceeds $18,040,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $18,040,000
Less: Non-Cash Stock Purchases (1) 2,221,800
-----------
Net Proceeds Reinvested $15,818,200
Estimated net incremental rate of return 3.98%
Earnings Increase $629,564
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 97,759
Less: 1998 MRP Vesting (4) 97,759
-----------
Net Earnings Increase $434,046
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
12 Months ended December 31, 1997 (reported) $708,000 $434,046 $1,142,046
12 Months ended December 31, 1997 (core) $713,000 $434,046 $1,147,046
Before Net Cash After
4. Pro Forma Net Worth Conversion (5) Proceeds Conversion
-------------- -------- ----------
Reported as of December 31, 1997 $15,245,000 $15,818,200 $31,063,200
Tangible as of December 31, 1997 $15,237,750 $15,818,200 $31,055,950
Before Net Cash After
5. Pro Forma Assets Conversion (5) Proceeds Conversion
-------------- -------- ----------
December 31, 1997 $129,530,000 $15,818,200 $145,348,200
</TABLE>
(1) Includes ESOP and 1998 MRP stock purchases equal to 8.0 percent and 4.0
percent of the offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 10 vears, amortization expense is
tax-effected at a 34.00 percent rate.
(4) 1998 MRP is vested over five years, amortization expense is tax-effected at
a 34.00 percent rate.
(5) Includes $247,000 of MHC assets consolidated during the conversion.
<PAGE>
Exhibit 5
IMPACT OF WAIVED DIVIDENDS
Pennsylvania Savings Bank
<TABLE>
<S> <C> <C>
Bank Stockholders' Equity @ 12/31/97 $14,998,000 (BOOK)
Aggregate Amt of Dividends Waived by MHC $0 (DIVIDENDS)
Minority Ownership Interest 48.50% (PCT)
Pro Forma Market Value (Rounded) $27,000,000 (VALUE)
Market Value of Assets of the Company (Other
than Stock in Bank) $247,000 (MHC ASSETS)
Two Step Calculation
- --------------------
(BOOK - DIVIDENDS) x PCT
------------------------
Step I -- to Account for Waiver of Dividends = (BOOK)
= 48.50%
(VALUE - MHC ASSETS) x Step I
-----------------------------
Step II -- to Account for MHC Assets = (VALUE)
= 48.06%
------
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants FIRM QUALIFICATION STATEMENT
RP Financial provides financial and management consulting and valuation services
to the financial services industry nationwide, particularly federally-insured
financial institutions. RP Financial establishes long-term client relationships
through its wide array of services, emphasis on quality and timeliness, hands-on
involvement by our principals and senior consulting staff, and careful
structuring of strategic plans and transactions. RP Financial's staff draws from
backgrounds in consulting, regulatory agencies and investment banking, thereby
providing our clients with considerable resources.
STRATEGIC AND CAPITAL PLANNING
RP Financial's strategic and capital planning services are designed to provide
effective workable plans with quantifiable results. Through a program known as
SAFE (Strategic Alternatives Financial Evaluations), RP Financial analyzes
strategic options to enhance shareholder value or other established objectives.
Our planning services involve conducting situation analyses; establishing
mission statements, strategic goals and objectives; and identifying strategies
for enhancement of franchise value, capital management and planning, earnings
improvement and operational issues. Strategy development typically includes the
following areas: capital formation and management, asset/liability targets,
profitability, return on equity and market value of stock. Our proprietary
financial simulation model provides the basis for evaluating the financial
impact of alternative strategies and assessing the feasibility/compatibility of
such strategies with regulations and/or other guidelines.
MERGER AND ACQUISITION SERVICES
RP Financial's merger and acquisition (M&A) services include targeting
candidates and potential acquirors, assessing acquisition merit, conducting
detailed due diligence, negotiating and structuring transactions, preparing
merger business plans and financial simulations, rendering fairness opinions and
assisting in implementing post-acquisition strategies. Through our financial
simulations, comprehensive in-house data bases, valuation expertise and
regulatory knowledge, RP Financial's M&A consulting focuses on structuring
transactions to enhance shareholder returns.
VALUATION SERVICES
RP Financial's extensive valuation practice includes valuations for a variety of
purposes including mergers and acquisitions, mutual-to-stock conversions, ESOPs,
subsidiary companies, mark-to-market transactions, loan and servicing
portfolios, non-traded securities, core deposits, FAS 107 (fair market value
disclosure), FAS 122 (loan servicing rights) and FAS 123 (stock options). Our
principals and staff are highly experienced in performing valuation appraisals
which conform with regulatory guidelines and appraisal industry standards. RP
Financial is the nation's leading valuation firm for mutual-to-stock conversions
of thrift institutions.
OTHER CONSULTING SERVICES AND DATA BASES
RP Financial offers a variety of other services including branching strategies,
feasibility studies and special research studies, which are complemented by our
quantitative and computer skills. RP Financial's consulting services are aided
by its in-house data base resources for commercial banks and savings
institutions and proprietary valuation and financial simulation models.
YEAR 2000 SERVICES
RP Financial, through a relationship with a computer research and development
company with a proprietary methodology, offers Year 2000 advisory and conversion
services to financial institutions which are more cost effective and less
disruptive than most other providers of such service.
RP Financial's Key Personnel (Years of Relevant Experience)
Ronald S. Riggins, Managing Director (18)
William E. Pommerening, Managing Director (14)
Gregory E. Dunn, Senior Vice President (16)
James P. Hennessey, Senior Vice President (13)
James J. Oren, Senior Vice President (11)
- -------------------------------------------------------------------------------
Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210 Telephone: (703) 528-1700
Arlington, VA 22209 Fax No.: (703) 528-1788
