UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 1998.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ..................
to ...............
Commission File Number: 1-13823
HERITAGE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 58-2356162
................................ ....................................
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
201 West Main Street, Laurens, South Carolina 29360
..............................................................................
(Address of principal executive offices)
(864) 984-4581
..............................................................................
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock Issued and Outstanding: 4,628,750 at July 24, 1998.
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Table of Contents
Page
Part I. Financial Information
- ------- ---------------------
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at June 30, 1998
and September 30, 1997 1
Consolidated Statements of Income for the Three and Nine
Month Periods Ended June 30, 1998 and 1997 2
Consolidated Statements of Cash Flows for the Three and Nine
Month Periods Ended June 30, 1998 and 1997 3-4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
Part II. Other Information 9-10
SIGNATURES 11
EXHIBITS 12-13
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ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
HERITAGE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars Except Share Data)
ASSETS June 30, September 30,
1998 1997
(Unaudited)
Cash $ 2,224 $ 2,012
Federal funds sold and overnight interest-
bearing deposits 62,411 12,647
--------- -----------
Total cash and cash equivalents 64,635 14,659
Investment securities:
Held-to-maturity - at amortized cost (market
value: June 30, 1998 - $21,580; September
30, 1997 - $15,954) 21,609 15,988
Available-for-sale - at fair value (amortized
cost: June 30, 1998 - $4,563; September 30,
1997 - $6,063) 7,741 8,390
Mortgage-backed securities - held to maturity -
at amortized cost (market value: June 30,
1998 - $2,778; September 30, 1997 - $6,635) 2,791 6,665
Loans receivable - net 195,542 192,663
Loans held-for-sale - at lower of cost or market
(market value: June 30, 1998 - $869; September
30, 1997 - $1,065) 852 1,045
Office properties and equipment - net 4,144 4,278
Federal Home Loan Bank Stock - at cost 2,042 2,042
Accrued interest receivable 1,387 1,242
Real estate acquired in settlement of loans - net 71 410
Other assets 54 117
--------- -----------
TOTAL $ 300,868 $ 247,499
========= ===========
LIABILITIES AND EQUITY
LIABILITIES:
Deposit accounts $ 203,099 $ 215,412
Accrued interest on deposit accounts 377 338
Other liabilities 2,703 2,514
--------- -----------
Total liabilities 206,179 218,264
--------- -----------
EQUITY:
Common Stock of $0.01 par value per share.
Authorized 10,000,000 shares, issued and
outstanding at June 30, 1998
4,628,750 shares 46
Additional Paid in Capital 68,050
Unallocated Shares (5,462)
Retained income - substantially restricted 30,053 27,769
Unrealized gain on available-for-sale
securities, net of taxes 2,002 1,466
--------- -----------
Total equity 94,689 29,235
--------- -----------
TOTAL $ 300,868 $ 247,499
========= ===========
See notes to consolidated financial statements.
1
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HERITAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1998 1997 1998 1997
INTEREST INCOME:
Interest on loans $ 3,977 $ 3,866 $ 11,788 $ 11,224
Investment securities and other 1,202 550 2,560 1,751
Mortgage-backed securities 44 106 181 355
------- ------- -------- --------
Total interest income 5,223 4,522 14,529 13,330
------- ------- -------- --------
INTEREST EXPENSE:
Deposits 2,826 2,978 9,122 8,942
Federal Home Loan Bank borrowings -- 64 -- 226
------- ------- -------- --------
Total interest expense 2,826 3,042 9,122 9,168
------- ------- -------- --------
NET INTEREST INCOME 2,397 1,480 5,407 4,162
PROVISION FOR LOAN LOSSES
(RECOVERY OF ALLOWANCE) -- 40 (115) 62
------- ------- -------- --------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 2,397 1,440 5,522 4,100
OTHER INCOME: ------- ------- -------- --------
Service charges and fees 69 47 175 148
Other income (expense), net 12 (12) 11 (8)
------- ------- -------- --------
Total other income 81 35 186 140
------- ------- -------- --------
OTHER OPERATING EXPENSES:
Employee compensation and benefits 448 345 1,183 1,056
Deposit insurance premiums 34 36 101 201
Occupancy and equipment expense 103 89 314 270
Data processing - service bureau
fees 48 32 112 100
Office supplies, postage, printing,
etc. 9 17 71 63
Professional fees 29 14 63 44
(Income) expense of real estate
operations 5 16 87 (161)
Other 38 49 148 142
------- ------- -------- --------
Total other operating expenses 714 598 2,079 1,715
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 1,764 877 3,629 2,525
PROVISION FOR INCOME TAXES 655 311 1,345 917
------- ------- -------- --------
NET INCOME $ 1,109 $ 566 $ 2,284 $ 1,608
======= ======= ======== ========
Earnings per Share of Common Stock $0.26 N/A N/A N/A
======= ======= ======== ========
See notes to consolidated financial statements.
2
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HERITAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Nine Months Ended
June 30,
-----------------
1998 1997
OPERATING ACTIVITIES:
Net income $ 2,284 $ 1,608
Adjustments to reconcile net income
to net cash provided by operating
activities:
Deferred income tax benefit (20) (415)
Gain (loss) on sale of AFS -- 13
Accretion (amortization) of discount
(premium) on investment and mortgage-
backed securities (4) 29
Amortization of net deferred income (107) (126)
Provision for loan losses (recovery of
allowance) (115) 62
Purchase and origination of loans held-
for-sale (989) (814)
Gain on sale of loans (14) (4)
Proceeds from the sale of loans held-for-
sale 1,003 261
Principal repayments on loans held-for-
sale 192 --
Depreciation on office properties and
equipment 212 182
Allocation of ESOP shares 131 --
Provision for losses on real estate
acquired in settlement of loans 39 7
Loss (gain) on sales of real estate
acquired in settlement of loans 44 (169)
(Increase) decrease in accrued interest
receivable and other assets (82) 103
Increase (decrease) in accrued interest
payable and other liabilities (67) (608)
------- -------
Net cash provided by operating activities 2,507 129
------- -------
INVESTING ACTIVITIES:
Proceeds from maturities and calls of
available-for-sale investment securities 1,500 6,600
Proceeds from maturities and calls of held-
to-maturity investment securities 10,000 5,000
Proceeds from sale of available-for-sale
investments -- 1,737
Purchases of held-to-maturity investment
securities (15,614) (2,993)
Purchase of available-for-sale investment
securities -- (500)
Principal repayments on mortgage-backed
securities 3,870 2,217
Purchase of loans receivable (9,597) (946)
Net loan (originations) and principal
payments on loans 6,810 (9,684)
Proceeds from sales of real estate
acquired in settlement of loans 828 536
Capitalized costs of real estate acquired
in settlement of loans (443) --
Acquisition of office properties and
equipment (78) (31)
------- -------
Net cash provided by (used in) investing
activities (2,724) 1,936
------- -------
3
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HERITAGE BANCORP, INC.
STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Nine Months Ended
June 30,
-----------------
1998 1997
FINANCING ACTIVITIES:
Increase in deposits from stock
subscriptions 71,673 --
Decrease in deposits from refunds of stock
subscriptions (36,318) --
Net increase in deposits from other than
stock subscriptions 16,211 2,484
Principal repayments on Federal Home Loan
Bank borrowings -- (5,000)
Stock issuance costs (1,373) --
------- -------
Net cash provided by financing activities 50,193 (2,516)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 49,976 (451)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 14,659 5,875
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 64,635 5,424
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest $ 9,082 $ 9,158
======= =======
Income taxes $ 1,000 $ 235
======= =======
SUPPLEMENTAL DISCLOSURE OF NON-CASH
TRANSACTIONS:
Transfers from loans to real estate
acquired in settlement of loans $ 129 $ 411
======= =======
Increase in net unrealized gain on
available-for-sale investment securities $ 536 $ 561
======= =======
Sale of stock from subscription escrow
account $35,204 $ --
======= =======
Sale of stock from deposit accounts $28,672 $ --
======= =======
Sale of stock to ESOP $ 5,555 $ --
======= =======
See notes to consolidated financial statements.
4
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HERITAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Heritage Bancorp, Inc. (the "Corporation") was incorporated under Delaware law
in November 1997 by Heritage Federal Savings & Loan Association (the
"Association") (now known as Heritage Federal Bank, the "Bank") in connection
with the conversion of the Bank from a federally chartered mutual savings and
loan association to a federally chartered stock savings bank, the issuance of
the Bank's stock to the Corporation and the offer and sale of the
Corporation's common stock by the Corporation (the "Conversion"). Upon
consummation of the Conversion on April 6, 1998, the Corporation became the
unitary holding company for the Bank. See Note 2 for a more detailed
description of the mutual to stock conversion.
The accompanying consolidated financial statements of the Corporation have
been prepared in accordance with instructions to Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However,
such information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary for
a fair statement of results for the interim periods.
The results of operations for the nine months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the year ending
September 30, 1998. The consolidated financial statements and notes thereto
should be read in conjunction with the audited financial statements and notes
thereto for the year ended September 30, 1997, contained in the Corporation's
prospectus dated February 3, 1998.
2. CONVERSION TO CAPITAL STOCK FORM OF OWNERSHIP
On September 10, 1997, the Board of Directors of the Bank adopted a Plan of
Conversion to convert from a federally chartered mutual savings and loan
association to a federally chartered capital stock savings bank. The
conversion was accomplished through the formation of the Corporation in
November 1997, the adoption of a federal stock charter, the sale of all of the
Bank's stock to the Corporation on April 6, 1998 and the sale of the
Corporation's stock to the public on April 6, 1998.
A subscription offering ("offering") of the shares of common stock of the
Corporation was conducted whereby the shares were offered initially to
eligible account holders of the Association, the Corporation's Employee Stock
Ownership Plan ("ESOP"), supplemental eligible account holders and other
members of the Bank (collectively "subscribers"). During the offering,
subscribers submitted orders for common stock along with full payment for the
order in either cash, by an authorization to withdraw funds for payment from
an existing deposit account at the Association upon issuance of stock by the
Corporation, or a combination of cash and account withdrawal. Subscription
funds received in connection with the offering were placed in special escrow
accounts in the Association. For those orders that were to be funded through
account withdrawals, the Association placed "holds" on those accounts,
restricting withdrawal of any amount which would reduce the account balance
below the amount of the order.
5
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On April 6, 1998, the Corporation issued 4,628,750 shares of common stock for
proceeds of $69.4 million. The aggregate purchase price was determined by an
independent appraisal. As the Corporation received subscriptions in excess of
shares available, shares were allocated in accordance with the Plan of
Conversion. Sources of proceeds were as follows (in thousands of dollars):
Subscription escrow accounts $ 35,204
Deposit account withdrawals 28,672
Note receivable from ESOP 5,555
---------
Gross Proceeds $ 69,431
=========
All excess subscriptions funds were refunded and holds on deposit accounts
were released after the stock was issued.
Conversion expenses totaled approximately $1.4 million and were deducted from
gross proceeds to result in net proceeds of approximately $68.0 million.
The Bank issued all its outstanding capital stock to the Corporation in
exchange for one-half of the net proceeds. The Corporation accounted for the
purchase in a manner similar to a pooling of interests whereby assets and
liabilities of the Bank maintain their historical cost basis in the
consolidated company.
At the time of the Conversion, the Bank established a liquidation account
totaling approximately $29.8 million for the benefit of eligible account
holders as of June 30, 1996 and December 31, 1997 who continue to maintain
their accounts at the Bank after the Conversion. The liquidation account will
be reduced annually to the extent that eligible account holders have reduced
their qualifying deposits. Subsequent increases will not restore an eligible
account holder's interest in the liquidation account. In the event of a
distribution from the liquidation of the Bank, each eligible account holder
will be entitled to receive a distribution from the liquidation account in an
amount proportionate to the current adjusted qualifying balances for accounts
then held before any distribution may be made to the Corporation with respect
to the Bank's capital stock.
The Bank also established an ESOP for the benefit of its employees. The
Corporation issued 370,300 shares of common stock to the ESOP in exchange for
a note in the amount of approximately $5.5 million. The Bank will make
contributions in the amount necessary, when combined with any dividends earned
by the ESOP on unallocated shares, to make quarterly payments of principal and
interest on the note. As payments are made, the corporation will release
shares from collateral. Released shares will be allocated to participants
over the term of the note.
3. EARNINGS PER SHARE
Earnings per share has been computed for the quarter ended June 30, 1998 based
upon weighted average common shares outstanding of 4,261,536. For the
purposes of computing weighted average shares outstanding, shares issued in
the conversion on April 6, 1998 were assumed to have been outstanding since
April 1, 1998. Earnings per share for all prior periods are not presented as
there was no common stock issued or outstanding.
6
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Comparison of Financial Condition at June 30, 1998 and September 30, 1997
Total assets increased $53.4 million, or 21.6% during the first nine months of
fiscal 1998 to $300.9 million. The increase resulted primarily from increases
in federal funds sold and overnight interest-bearing deposits of $49.8
million, investment securities of $5.0 million, and loans receivable of $2.9
million offset by a decrease in mortgage-backed securities of $3.9 million.
Cash and cash equivalents increased to $64.6 million from $14.7 million as the
Bank received the proceeds from the initial public offering. The total cash
received from the sale of stock was $63.9 million. Investment securities
increased to $29.4 million from $24.4 million, or 20.4%. Loans receivable
increased $2.9 million, or 1.5%, as loan demand remained constant during the
first nine months of fiscal year 1998. Mortgage-backed securities decreased
to $2.8 million at June 30, 1998 from $6.7 million at September 30, 1997 as a
result of continued repayments.
Deposit accounts decreased $12.3 million, or 5.7% during the first nine months
of fiscal 1998 to $203.1 million at June 30, 1998, due largely to depositors
using approximately $28.7 million of funds on deposit at the Bank to purchase
stock of the Company during the initial public offering. This $28.7 million
decrease was offset by an increase in customer deposits of $16.4 million
during the same period.
Total equity increased $65.5 million, or 223.9% to $94.7 million at June 30,
1998 from $29.2 million at September 30, 1997. The increase was due to $2.3
million in net income for the nine months ended June 30, 1998, an increase of
$536,000 in the unrealized gain on available-for-sale securities and $62.6
million of net proceeds from the Company's initial stock offering when
compared to September 30, 1997.
Non-accrual loans decreased $93,000 to $841,000 at June 30, 1998 from $934,000
at September 30, 1997. At June 30, 1998, total non-accrual loans accounted
for 0.4% of net loans receivable down from 0.5% as of September 30, 1997.
Real estate owned decreased $339,100 to $70,900 at June 30, 1998 from $410,000
at September 30, 1997 as a result of sales of properties during the first nine
months of fiscal year 1998. Total non-performing assets were 0.3% of total
assets at June 30, 1998, compared to 0.5% at September 30, 1997.
Comparison of Operating Results for the Three Months Ended June 30, 1998 and
1997
General. Net income increased $543,000 or 95.9%, to $1.1 million for the
three months ended June 30, 1998 from $566,000 for the three months ended June
30, 1997. The increase in net income was primarily the result of an increase
in investment income, the elimination of interest expense on borrowed funds as
a result of no outstanding borrowings for the three month period ended June
30, 1998 and a decrease in interest expense on deposit accounts. These
increases were partially offset by an increase to other operating expense and
income taxes.
Net Interest Income. Net interest income increased $917,000 or 62.0%, from
the third quarter of fiscal 1997 to the third quarter of fiscal 1998.
Interest income increased $701,000, or 15.5%, between the periods. Interest
income on loans increased $111,000 as a result of an increase in the average
balance of loans receivable to $196.9 million from $191.6 million in the third
quarter of fiscal year 1997. The average balance of interest-earning assets
increased to $292.8 million for the three month period ended June 30, 1998
from $236.9 million for the three month period ended June 30, 1997 and the
average yield on total interest-earning assets was 7.1% for the third quarter
of fiscal 1998 compared to 7.6% for the third quarter of fiscal 1997. The
increase in the average balance of interest-earning assets was due in measure
to the $62.6 million of net cash proceeds received from the initial stock
offering.
Interest expense on deposits decreased $152,000 or 5.1% as a result of a
decrease in the average cost of deposits from 5.7% in the third quarter of
1997 compared to 5.5% in the third quarter of 1998 and a decrease in the
average balance of deposits as a result of deposits used to purchase the
Company's stock during the initial public offering. As no borrowings were
outstanding during the third
7
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quarter of fiscal 1998, there was no interest expense on FHLB borrowings in
the third quarter of 1998 compared with $64,000 in interest expense in the
third quarter of fiscal 1997. The average rate paid on interest bearing
liabilities was 5.5% for the third quarter of fiscal 1998, compared to 5.7%
for the same period of the prior year.
Provision for Loan Losses. No provision for loan losses was necessary in the
third quarter of fiscal 1998 in contrast to a provision for loan loss of
$40,000 during the third quarter of fiscal 1997. At June 30,1998, the Bank's
allowance for loan losses totaled $750,000, which equaled 0.38% of total net
loans outstanding compared to an allowance for loan losses of $874,000 at
September 30, 1997 of 0.5% of total net loans outstanding.
Other Operating Expenses. Other operating expenses increased $116,000 or
19.4%, from the third quarter of fiscal 1997 to the third quarter of fiscal
1998. Employee benefit and compensation expense increased $103,000 during the
third quarter of fiscal 1998 due primarily to expenses related to the ESOP.
The increases in other categories of other operating expenses generally are
attributable to the growth of the Corporation and to inflation.
Income Taxes. The provision for income taxes was $655,000 in the third
quarter of fiscal 1998 compared to $311,000 in the third quarter of fiscal
1997. The income tax provision was higher in fiscal 1998 because of higher
taxable income.
Comparison of Operating Results for the Nine Months Ended June 30, 1998 and
1997.
General. Net income increased $677,000, or 42.1% to $2.3 million for the nine
months ended June 30, 1998 from $1.6 million for the nine months ended June
30, 1997. The increase in net income was primarily the result of an increase
in interest income, recovery of loan losses and a decline in deposit insurance
premiums. This increase was partially offset by an increase in other
operating expenses and income taxes.
Net Interest Income. Net interest income increased $1.2 million or 29.9%,
from the nine months of fiscal 1997 compared to the nine months of fiscal
1998. Interest income increased $1.2 million, or 9.0% between the periods.
Interest income on loans increased $564,000 as a result of an increase in the
average balance of loans receivable to $194.7 million for the nine months
ended June 30, 1998 from $188.4 million for the nine months ended June 30,
1997 and an increase in the average yield to 8.07% from 8.0% for the same
respective nine month periods. The average balance of interest earning assets
increased to $264.1 million from $237.7 million for comparative nine month
periods ended June 30, 1998 and 1997. The increase in the average balance of
interest-earning assets for the nine months ended September 30, 1998 was due
in part to funds received from the proceeds of the initial public offering and
an increase in the average balance of loans receivable.
Interest expense decreased $47,000, or 0.5%, between the nine month periods
ended June 30, 1998 and June 30, 1997. Interest expense on deposits increased
$179,000, or 2.0% as a result of an increase in the average balance of
deposits to $217.4 million from $214.6 million. This increase was partially
offset by a decrease in the average cost of deposits to 5.6% from 5.7%. As no
borrowings were outstanding during the first three quarters of fiscal 1998,
there was no interest expense on FHLB borrowings in the first nine months of
fiscal 1998 compared with $226,000 for the respective nine-month period in
1997. The average rate paid on interest-bearing liabilities was 5.6% versus
5.7% for the respective nine-month periods in fiscal 1998 and 1997,
respectively.
Provision for Loan Losses. There was a net recovery for loan losses of
$115,000 in the first nine months of fiscal 1998 compared to a provision for
loan loss of $62,000 during the first nine months of fiscal 1997.
Other Operating Expenses. Other operating expenses increased $364,000, or
21.2% from the first nine months of fiscal 1997 compared to the first nine
months of fiscal 1998. Employee benefit and compensation expense increased
$127,000 in the first nine months of fiscal 1998 compared to the same period
in the prior year primarily due to compensation expenses related to the ESOP.
Expenses for real estate owned were $87,000 in the first nine months of fiscal
1998 compared to income of $161,000 in the first nine months of fiscal 1997.
In the first nine months ended June 30, 1998 the Bank sold four real estate
owned properties for
8
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a net loss of $74,000 compared to a net gain of $161,000 for the first nine
months ending June 30, 1997. The increase in other operating expenses was
partially offset by a $100,000 decrease in deposit insurance premiums
resulting from a rate decrease in premiums. The increase in other categories
of other operating expenses generally are attributable to the growth of the
company and to inflation.
Income Taxes. The provision for income taxes was $1.3 million in the first
nine months of fiscal 1998 compared to $917,000 in the same nine month period
of fiscal 1997. The income tax provision was higher in fiscal 1998 because of
higher taxable income.
Liquidity and Capital Resources
The Bank's primary source of funds are customer deposits, proceeds from
principal and interest payments on and the sale of loans, maturing or sale of
securities and advances from the FHLB of Atlanta. While maturities and
scheduled amortization of loans are a predictable source of funds, deposit
flows, securities and loan sales and mortgage prepayments are greatly
influenced by general interest rates, economic conditions and competition.
The Bank must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to fund loan originations and deposit
withdrawals, to satisfy other financial commitments and to take advantage of
investment opportunities. The Bank generally maintains sufficient cash and
short-term investments to meet short-term liquidity needs. At June 30, 1998,
cash and cash equivalents totaled $64.6 million, or 21.5% of total assets, and
investment securities classified as available-for-sale totaled $7.7 million.
At June 30, 1998 the Bank also maintained, but did not draw upon, an
uncommitted credit facility with the FHLB of Atlanta.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in the quantitative and qualitative
disclosures about market risks as of June 30, 1998 than presented in the
Company's prospectus dated February 3, 1998.
Part II. Other Information
Item 1. Legal Proceedings
-----------------
Not applicable
Item 2. Changes in Securities and Use of Proceeds
------------------------------------------
Use of Proceeds - As discussed in Note 1 to Notes to Consolidated
Financial Statements under Item 1 of this Quarterly Report, the
Conversion was completed on April 6, 1998. In connection therewith:
1. The effective date of the Registration Statement on Form S-1, as
amended (File No. 333-41857) ("Registration Statement"), was
February 3, 1998.
2. The offering closed on April 6, 1998 with the sale of all
securities registered pursuant to the Registration Statement.
Trident Securities, Inc. acted as the marketing agent for the
Offering.
3. The class of securities registered pursuant to the Registration
Statement was common stock, par value $0.01 per share. The
aggregate amount of such securities registered and sold was
4,628,750 shares for an aggregate dollar amount of $69,431,250.
4. The total conversion offering expense incurred by the Company were
$1,373,484
5. The net proceeds of the conversion offering were $68,057,766 which
were used as follows: $5,554,500 to fund a loan to the Banks
employee stock ownership plan ("ESOP"), $34,028,883
9
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to acquire all of the issued and outstanding common stock of the
Bank; and the remaining is expected to be invested primarily in
U.S. Government and agency obligations.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K: None.
10
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HERITAGE BANCORP, INC.
Date: Aug 12, 1998 By: /s/ J. Edward Wells
-------------------------------------
J. Edward Wells
President and Chief Executive Officer
Date: Aug 12, 1998 By: /s/ Edwin I. Shealy
-------------------------------------
Edwin I. Shealy
Treasurer and Chief Financial Officer
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1998
<CASH> 2224
<INT-BEARING-DEPOSITS> 56636
<FED-FUNDS-SOLD> 5775
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7741
<INVESTMENTS-CARRYING> 24400
<INVESTMENTS-MARKET> 24358
<LOANS> 196394
<ALLOWANCE> 750
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0
0
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</TABLE>
