<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 December 31, 1997
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 1-13793
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-1504091
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
12 E. BROAD STREET, HAZLETON, PENNSYLVANIA 18201
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(717) 459-3700
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changes since last report)
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.
Yes N/A No
--- ---
Yes No X
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: No shares were
outstanding as of March 25, 1998.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Northeast Pennsylvania Financial Corp. (the "Company") is a recently
formed holding company, formed for the purpose of acquiring all of the common
stock of First Federal Savings and Loan Association of Hazleton (the "Bank")
concurrent with the Bank's conversion from mutual to stock form of
organization. At this time and until the conversion is complete, Northeast
Pennsylvania Financial Corp. is a noncapitalized shell corporation with no
business activities. The financial statements of Northeast Pennsylvania
Financial Corp., which are set forth after Item 3 below, reflect such status.
For a further discussion of Northeast Pennsylvania Financial Corp.'s formation
and intended operations see "Northeast Pennsylvania Financial Corp." in the
Company's Prospectus (the "Prospectus") dated February 12, 1998, which is a
part of its Registration Statement under the Securities Act of 1933 on Form
S-1, initially filed on December 24, 1997 and declared effective on February
11, 1998. Such description of Northeast Pennsylvania Financial Corp. is
incorporated herein by reference and attached hereto as Exhibit 99(a).
Additionally, "Recent Developments" on pages 9 through 13 of the Prospectus is
incorporated herein by reference and attached hereto as Exhibit 99(b). Such
Recent Developments presents financial information regarding the Bank for the
three months ended and at December 31, 1997, including a "Management's
Discussion and Analysis of Recent Developments." Upon completion of its
conversion, the Bank will become the wholly-owned subsidiary of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
See Item 1.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
See Item 1.
2
<PAGE> 3
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
December 31, September 30,
1997 1997
------------ -------------
<S> <C> <C>
Assets . . . . . . . . . . . . . . . . . . . . . $ -- NA
Expenses . . . . . . . . . . . . . . . . . . . . $ -- NA
</TABLE>
See accompanying notes to financial statements
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months
Ended December 31, 1997
-----------------------
<S> <C>
Income . . . . . . . . . . . . . . . . . . . . . $ --
Expenses . . . . . . . . . . . . . . . . . . . . $ --
Net income . . . . . . . . . . . . . . . $ --
</TABLE>
See accompanying notes to financial statements
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
For the Three Months Ended December 31, 1997
--------------------------------------------------------------
Additional
Common Paid-in Retained
Stock Capital Earnings Total
------- ---------- -------- -------
<S> <C> <C> <C> <C>
Balance September 30, 1997 . . $ -- $ -- $ -- $ --
Balance December 31, 1997 . . . $ -- $ -- $ -- $ --
</TABLE>
See accompanying notes to financial statements.
STATEMENTS OF CHANGE IN CASH FLOW
<TABLE>
<CAPTION>
For the Three Months Ended December 31,
---------------------------------------
1997 1996
--------- ----------
<S> <C> <C>
Funds provided . . . . . . . . . . . . . . . . . . . . $ -- NA
Funds used . . . . . . . . . . . . . . . . . . . . . . $ -- NA
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
NOTES TO FINANCIAL STATEMENTS
1. General
Northeast Pennsylvania Financial Corp. is a recently formed holding
company formed for the purpose of acquiring all of the common stock of First
Federal Savings and Loan Association of Hazleton concurrent with its conversion
from mutual to stock form of organization. At December 31, 1997, Northeast
Pennsylvania Financial Corp. was a shell corporation with no business
activities and no assets.
4
<PAGE> 5
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K (Section 249.308 of this Chapter).
Exhibit 99(a) Northeast Pennsylvania Financial Corp.
Exhibit 99(b) Recent Developments
5
<PAGE> 6
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.
NORTHEAST PENNSYLVANIA
FINANCIAL CORP.
Date: March 25, 1998 By: /s/ E. Lee Beard
--------------------- -----------------------------
E. Lee Beard
President and Chief Executive
Officer
Date: March 25, 1998 By: /s/ Patrick J. Owens, Jr.
--------------------- -----------------------------
Patrick J. Owens, Jr.
Chief Financial Officer,
Treasurer and Secretary
6
<PAGE> 1
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
The Company was organized in Delaware at the direction of the Board of
Directors of the Bank for the purpose of acquiring all of the capital stock to
be issued by the Bank in the Conversion. The Company has applied to the OTS
for approval to become a savings and loan holding company. The Company will
acquire the common stock of the Bank and sell its Common Stock in the
Conversion only is such approval is received. As a savings and loan holding
company, the Company will be subject to regulation by the OTS. See "The
Conversion--General." Upon consummation of the Conversion, the Company will
conduct business initially as a unitary savings and loan holding company. See
"Regulation-Holding Company Regulation." After completion of the Conversion,
the Company's assets will consist of all of the outstanding shares of the
Bank's capital stock issued to the Company in the Conversion and that portion
of the net proceeds of the Offerings retained by the Company. The Company
intends to use part of the net proceeds it retains to loan funds to the ESOP to
enable the ESOP to purchase 8% of the Common Stock issued in the Conversion,
including shares issued to the Foundation. The Company and Bank may, however,
alternatively choose to fund the ESOP through a loan to the ESOP trust by a
third-party financial institution. The Company intends initially to utilize
the remaining proceeds for investments in mortgage-related securities and
federal agency obligations. See "Use of Proceeds." Immediately after the
Conversion, the Company will have no significant liabilities. The management
of the Company is set forth under "Management of the Company." Initially, the
Company will neither own nor lease any property, but will instead use the
premises, equipment and furniture of the Bank. At the present time, the
Company does not intend to employ any persons other than officers of the
Company who are also officers of the Bank, but will utilize the support staff
of the Bank from time to time. Additional employees will be hired as
appropriate to the extent the Company expands its business in the future.
Management believes that the holding company structure will provide
the Company with additional flexibility to diversify, should it decide to do
so, its business activities through existing or newly-formed subsidiaries, or
through acquisitions of other financial institutions and financial services
related companies. In addition, management believes that the Company will be
in a position after the Conversion, subject to regulatory limitations and the
Company's financial position, to take advantage of any acquisition and
expansion opportunities that may arise. There are no current arrangements,
understandings or agreements, written or oral, regarding any such opportunities
or transactions. The initial activities of the Company are anticipated to be
funded by the net proceeds retained by the Company and earnings thereon or,
alternatively, through dividends from the Bank.
The Company's executive offices are located at 12 E. Broad Street,
Hazleton, Pennsylvania 18201 and its telephone number is (717) 459-3700.
7
<PAGE> 1
RECENT DEVELOPMENTS
The selected financial and other data presented below at December 31,
1997 and for the three month periods ended December 31, 1997 and 1996 are
derived from unaudited financial data, but, in the opinion of management,
reflect all adjustments (consisting only of normal recurring adjustments) which
are necessary to present fairly the results for such interim periods. The
results of operations for the three months ended December 31, 1997 are not
necessarily indicative of the results of operations that may be expected for
the fiscal year ending September 30, 1998.
<TABLE>
<CAPTION>
AT AT
DECEMBER 31, SEPTEMBER 30,
1997 1997
------------ -------------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
SELECTED CONSOLIDATED FINANCIAL DATA:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . $386,532 $369,242
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . 4,537 13,214
Loans, net (1) . . . . . . . . . . . . . . . . . . . . . . . . 264,509 261,469
Securities held-to-maturity:
Mortgage-related securities, net . . . . . . . . . . . . . . 10,495 9,965
Investment securities, net . . . . . . . . . . . . . . . . . 38,045 28,960
Securities available-for-sale:
Mortgage-related securities, net . . . . . . . . . . . . . . 34,867 29,982
Investment securities, net . . . . . . . . . . . . . . . . . 22,687 14,791
Real estate-owned . . . . . . . . . . . . . . . . . . . . . . . 301 319
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 304,119 314,123
FHLB advances . . . . . . . . . . . . . . . . . . . . . . . . . 49,512 23,516
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . 29,494 28,538
Nonperforming assets and troubled debt restructuring . . . . . 1,110 1,208
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED DECEMBER 31,
---------------------------
1997 1996
------ ------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
SELECTED CONSOLIDATED OPERATING DATA:
Total interest income . . . . . . . . . . . . . . . . . . . . . $6,914 $6,566
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . 3,709 3,513
------ ------
Net interest income . . . . . . . . . . . . . . . . . . . . . 3,205 3,053
Provision for loan losses . . . . . . . . . . . . . . . . . . . 246 32
------ ------
Net interest income after provision for loan losses . . . . . 2,959 3,021
Noninterest income . . . . . . . . . . . . . . . . . . . . . . . 160 148
Noninterest expense . . . . . . . . . . . . . . . . . . . . . . 2,286 2,240
------ ------
Income before income taxes . . . . . . . . . . . . . . . . . 833 929
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 276 285
------ ------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 557 $ 644
====== ======
</TABLE>
8
<PAGE> 2
<TABLE>
<CAPTION>
AT OR FOR THE THREE MONTHS
ENDED DECEMBER 31,
-----------------------------
1997 1996
--------- ---------
(UNAUDITED)
<S> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA (2):
PERFORMANCE RATIOS:
Average interest rate spread (3) . . . . . . . . . . . . . . . 3.22% 3.39%
Net interest margin (4) . . . . . . . . . . . . . . . . . . . . 3.60 3.55
Ratio of average interest-earning assets to average
interest-bearing liabilities . . . . . . . . . . . . . . . . 105.33 104.98
Total noninterest expense as a percent of average assets . . . 2.40 2.49
Return on average assets . . . . . . . . . . . . . . . . . . . 0.59 0.72
Return on average equity . . . . . . . . . . . . . . . . . . . 7.98 9.76
Ratio of average retained equity to average assets . . . . . . 7.31 7.28
Retained earnings to total assets at end of period . . . . . . 7.20 7.42
REGULATORY CAPITAL RATIOS (5):
Tangible capital ratio . . . . . . . . . . . . . . . . . . . . 7.20 7.42
Core capital ratio . . . . . . . . . . . . . . . . . . . . . . 7.20 7.42
Risk-based capital ratio . . . . . . . . . . . . . . . . . . . 14.80 14.61
ASSET QUALITY RATIOS:
Nonperforming loans and troubled debt restructurings
as a percent of total loans (6) . . . . . . . . . . . . . 0.28 0.30
Nonperforming assets and troubled debt restructurings
as a percent of total assets (7) . . . . . . . . . . . . . 0.29 0.37
Allowance for loan losses as a percent of total loans . . . . . 0.56 0.30
Allowance for loan losses as a percent of non-
performing loans and troubled debt restructurings . . . . . . 200.40 56.94
FULL-SERVICE BANKING FACILITIES (8) . . . . . . . . . . . . . . . . 9 9
</TABLE>
- -------------------------
(1) Loans, net, represent gross loans receivable net of the Bank's allowance
for loan losses, loans in process and deferred loan origination fees. The
allowance for loan losses at December 31, 1997 and 1996 was $1.5 million
and $742,000, respectively.
(2) Asset Quality Ratios and Regulatory Capital Ratios are end of period
ratios. With the exception of end of period ratios, all ratios are based
on average monthly balances during the indicated periods and are annualized
where appropriate.
(3) The average interest rate spread represents the difference between the
weighted average yield on average interest-earning assets and the weighted
average cost of average interest-bearing liabilities. See "Business of the
Bank--Sources of Funds."
(4) The net interest margin represents net interest income as a percent of
average interest-earning assets. See "Business of the Bank--Sources of
Funds."
(5) For definitions and further information relating to the Bank's regulatory
capital, see "Regulation and Supervision--FDIC Regulations - Capital
Requirements." See "Regulatory Capital Compliance" for the Bank's pro
forma capital levels as a result of the Offerings.
(6) Nonperforming loans consist of all non-accrual loans and all other loans 90
days or more past due. It is the policy of the Bank to cease accruing
interest on loans 90 days or more past due (unless the loan principal and
interest are determined by management to be fully secured and in the
process of collection) and to charge off all accrued interest. See
"Business of the Bank--Delinquent Loans, Classified Assets and Real Estate
Owned ."
(7) Nonperforming assets consist of nonperforming loans, real estate-owned, net
("REO"), and other repossessed assets.
(8) In January 1998, the Bank opened an additional branch office and combined
one of its previous two separate loan production offices with that branch
office.
9
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RECENT DEVELOPMENTS
COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 1997 AND SEPTEMBER 30, 1997
Total assets increased by $17.3 million, or 4.7%, from $369.2 million at
September 30, 1997 to $386.5 million at December 31, 1997. The growth in
assets was due to increases in investments, which were funded primarily through
FHLB advances and a reduction in cash and cash equivalents.
At the end of its fiscal year ended September 30, 1997, the Bank
restructured its available-for-sale securities portfolio in order to increase
its yield on such portfolio. This restructuring involved the sale of its
lower-yielding shorter-term available-for-sale securities in order to reinvest
the proceeds in higher-yielding mortgage-related securities and federal agency
and municipal obligations with stated or estimated lives of three to five
years. Pending reinvestment, some of such proceeds were used to repay FHLB
advances and held as cash and cash equivalents. The Bank completed the
reinvestment of such proceeds during October and November 1997. As a result,
cash and cash equivalents decreased $8.7 million from $13.2 million at
September 30, 1997 to $4.5 million at December 31, 1997. The Bank's portfolio
of securities available for sale increased by $12.8 million, or 28.6%, from
$44.8 million at September 30, 1997 to $57.6 million at December 31, 1997, and
its portfolio of securities held to maturity increased by $9.6 million, or
24.7% from $38.9 million to $48.5 million. Such increases in the securities
portfolios were funded by FHLB advances in addition to the reinvestment of
amounts held as cash and cash equivalents.
Loans receivable, net, remained relatively constant for the period, growing
$3.0 million from $261.5 million to $264.5 million, an increase of 1.2%.
Nonperforming loans remained relatively stable, decreasing $132,000 from
$774,000 at September 30, 1997 to $642,000 at December 31, 1997, representing
0.30% and 0.24%, respectively, of total loans at such dates. Nonperforming
assets and troubled debt restructurings also remained stable, decreasing from
$1.2 million at September 30, 1997 to $1.1 million at December 31, 1997,
representing 0.32% and 0.29%, respectively, of total assets at such dates.
Total deposits decreased by $10.0 million, or 3.2%, from $314.1 million at
September 30, 1997 to $304.1 million at December 31, 1997. The decrease was
primarily due to a $10.4 million, or 5.4%, decrease in certificates of deposit
from $192.7 million at September 30, 1997 to $182.3 million at December 31,
1997, primarily as a result of maturities of $9.7 million in jumbo certificates
of deposit which were not renewed. Management determined there were
opportunities to obtain FHLB advances at a lower effective rate than required
to retain the jumbo certificates of deposit. There was also a $1.6 million, or
2.2%, decrease in savings deposits, from $71.8 million at September 30, 1997 to
$70.2 million at December 31, 1997. The decrease in deposits was slightly
offset by an increase of $2.1 million, or 4.0%, in checking account deposits
from $49.6 million at September 30, 1997 to $51.7 million at December 31, 1997.
10
<PAGE> 4
FHLB advances and other borrowings increased by $26.1 million, from $23.6
million at September 30, 1997 to $49.7 million at December 31, 1997. The
increase in FHLB advances and other borrowings was primarily due to the
utilization of advances to fund purchases of investment securities, as part of
the Bank's restructuring of the available-for-sale securities portfolio that
the Bank commenced in September 1997, as well as to offset the withdrawals of
the jumbo certificates of deposits.
Total equity increased by $956,000, or 3.4%, from $28.5 million at
September 30, 1997 to $29.5 million at December 31, 1997. The increase in
equity was a result of retained earnings of $557,000 and a $399,000 increase in
net unrealized gain on available-for-sale securities, net of taxes.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1997
AND DECEMBER 31, 1996
GENERAL. Net income for the three months ended December 31, 1997 was $557,000,
a decrease of $87,000, or 13.5%, from $644,000 for the three months ended
December 31, 1996. The $87,000 decrease was primarily attributable to an
increase of $214,000 in the provision for loan losses. This increase in
provision for loan losses was offset by an increase in net interest income of
$152,000 from $3.05 million for the three months ended December 31, 1996 to
$3.21 million for the three months ended December 31, 1997 and an increase in
noninterest income of $12,000, from $148,000 for the three months ended
December 31, 1996 to $160,000 for the three months ended December 31, 1997, an
increase of 8.1%. Also, contributing to the decrease in net income for the
December 31, 1997 period was an increase of $50,000 in noninterest expenses,
from $2.24 million for the three months ended December 31, 1996 to $2.29
million for the three months ended December 31, 1997, a 2.2% increase.
INTEREST INCOME. Interest income for the three months ended December 31, 1997
was $6.9 million, compared to $6.6 million for the three months ended December
31, 1996, an increase of $348,000, or 5.3%. The increase in interest income
was primarily the result of a $18.2 million increase in the average balance of
loans from $247.8 million at December 31, 1996 to $266.0 million average
balance at December 31, 1997.
INTEREST EXPENSE. Interest expense increased $196,000, or 5.6%, in the three
months ended December 31, 1996 compared to the three months ended December 31,
1997, as a result of an increase of $200,000 in interest expense on FHLB
advances, from $277,000 to $477,000 for the same respective periods. This
increase was a result of an increase of $13.2 million in the average balance in
FHLB advances, from $20.5 million at December 31, 1996 to $33.7 million at
December 31, 1997. In addition, the cost of FHLB advances increased by 24
basis points, from 5.34% for the three months ended December 31, 1996 to 5.58%
for the three months ended December 31, 1997. The average balance in deposits
increased $2.2 million from $311.3 million for the three months ended December
31, 1996 to $313.5 million for the three months ended December 31, 1997.
Offsetting the increase in the average deposits was a reduction during the
11
<PAGE> 5
period in the cost of funds for savings and checking of 24 basis points and 21
basis points, respectively. This was partially offset by a 10 basis point
increase in the cost of funds for certificates of deposit.
PROVISION/ALLOWANCE FOR LOAN LOSSES. The Bank's provision for loan losses
totalled $246,000 for the three months ended December 31, 1997, compared to
$32,000 for the three months ended December 31, 1996, an increase of $214,000.
The allowance for loan losses increased from $742,000 at December 31, 1996 to
$1.5 million at December 31, 1997. The increase in the provision for loan
losses and corresponding increase in the allowance for loan losses reflected
the changing loan portfolio composition caused by a change in management's
strategic lending direction, as well as a decision to give a greater
consideration to the allowance for loan loss ratio levels of peer group
institutions. The Bank continues to anticipate, that as a result of its
increasing emphasis on consumer, commercial, multi-family, and commercial real
estate and construction lending, in the future, it may need to maintain an
allowance for loan losses at a higher level than it has maintained in previous
periods to offset any greater risk resulting from the shifting composition of
its loan portfolio. See "Business of the Bank--Delinquent Loans, Classified
Assets, and Real Estate Owned" and "Allowance for Loan Losses."
NONINTEREST INCOME. Noninterest income increased $12,000 to $160,000 for the
three months ended December 31, 1997, from $148,000 for the three months ended
December 31, 1996. Noninterest income improved primarily due to additional
loan fee and other service charge income, particularly the implementation in
fiscal 1997 of ATM fees for non-bank customers.
NONINTEREST EXPENSE. Noninterest expense increased by $46,000, or 2.1% from
$2.24 million for the three months ended December 31, 1996, to $2.29 million
for the three months ended December 31, 1997, primarily due to a contribution
of $110,000 to a low and moderate income housing project. The Company expects
that such contribution will result in $55,000 of Commonwealth of Pennsylvania
tax credits under Pennsylvania's Neighborhood Assistance Program. This
increase in noninterest expense was partially offset by a $32,000 reduction in
compensation from $1.16 million for the three months ended December 31, 1996 to
$1.13 million for the three months ended December 31, 1997, a reduction of
2.76%. As a result of becoming a publicly held company and implementing
various stock-based incentive plans, the Company expects its future noninterest
expense will be higher than in prior periods primarily due to higher
compensation costs, and professional fees and costs related to satisfying
regulatory reporting requirements. In addition, establishment of the
Foundation will have an adverse effect on the Company's and the Bank's earnings
in the year in which the contribution is made. The contribution expense will,
however, be partially offset by the tax deductibility of the expense. See
"Risk Factors--Establishment of the Charitable Foundation--Negative Impact on
Earnings" and "-- Stock-Based Benefits to Management and Directors, Employment
Contracts and Change in Control Payments."
12
<PAGE> 6
INCOME TAXES. Income tax expense was $276,000 for the three months ended
December 31, 1997, compared to $285,000 for the three months ended December 31,
1996. The decline in income tax expense for 1997 is attributable to lower
pretax earnings, offset by a reduction of 1996 state income tax credits not
available for 1997. The effective tax rate for the three months ended
December 31, 1997 was 33.1%, as compared to 30.7% for the same period in 1996,
as result of the state income tax credits utilized in 1996.
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE UNAUDITED FINANCIAL
STATEMENTS CONTAINED THEREIN
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 0
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 0
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 0
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 0
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>Northeast Pennsylvania Financial Corp. is a recently formed savings and loan
holding company formed for the purpose of acquiring all of the common stock of
First Federal Savings and Loan Association of Hazleton concurrent with its
conversion from mutual to stock form of organization. At December 31, 1997,
Northeast Pennsylvania Financial Corp. was a shell corporation with no business
activities and no assets.
</FN>
</TABLE>
