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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 21, 1998
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 1-13793 06-1504091
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(State or other Jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
12 E. Broad Street, Hazleton, Pennsylvania 18201
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(Address of principal executive offices)
(717) 459-3700
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
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On July 21, 1998, Northeast Pennsylvania Financial Corp. (the "Company"),
issued a press release which reported earnings for the quarter ended June 30,
1998.
A press release announcing the Company's third quarter earnings is attached
as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS.
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Exhibit 99.1 Press Release dated July 21, 1998.
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 hereunto duly authorized.
Dated: July 24, 1998 By: /s/ E. Lee Beard
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E. Lee Beard
President and Chief Executive Officer
Dated: July 24, 1998 By: /s/ Patrick J. Owens, Jr.
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Patrick J. Owens, Jr.
Senior Vice President and
Chief Financial Officer
2
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EXHIBIT 99.1 PRESS RELEASE
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NEWS RELEASE
FOR IMMEDIATE RELEASE
DATE: July 21, 1998
CONTACT: Patrick J. Owens, Jr.
Senior Vice President/CFO
PHONE: (717) 459-3722 office
FAX: (717) 450-6110
NORTHEAST PENNSYLVANIA FINANCIAL CORP. REPORTS THIRD
QUARTER 1998 EARNINGS.
Hazleton, Pa........ E. Lee Beard, President and Chief Executive Officer for
Northeast Pennsylvania Financial Corp. (the Company) (Amex; NEP), the holding
company for First Federal Bank (formerly First Federal Savings and Loan
Association of Hazleton), reported a net profit for the quarter ended June 30,
1998 of $991,000, or $.17 per share, as compared to $604,000 for the respective
prior year period. Due to the Bank's recent conversion and formation of the
Company, earnings per share figures for prior year periods are not applicable.
For the nine months ended June 30, 1998, the Company had a loss of $942,000, or
($.16) per share, as a result of a one-time $4.8 million non-recurring pre-tax
(or $3.1 million after-tax) expense related to the funding of First Federal
Charitable Foundation (the Foundation) in connection with the conversion. If the
after-tax effect of the contribution were eliminated, the Company would have had
net income of $2.2 million, or $.37 per share, for the nine months period ended
June 30, 1998, compared to $1.9 million for the comparable prior year period.
(continued)
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NORTHEAST PENNSYLVANIA FINANCIAL CORP. THIRD QUARTER EARNINGS JULY 1998
Net interest income for the current quarter rose $1 million or 31.8% over the
prior year quarter and $1.5 million or 16.2% for the nine months ended June 30,
1998 over the prior year to date. These increases were primarily attributable to
higher outstanding loan and investment balances offset by higher outstanding
Federal Home Loan Bank (FHLB) advances. The provision for loan losses increased
$117,000 for the current quarter over the prior year quarter and $436,000 for
the current year to date over the prior year period. This additional provision
was due to a changing loan portfolio composition as well as efforts to give a
greater consideration to allowance for loan loss ratio levels of peer group
institutions. Non-performing assets have remained stable with balances of $1.1
million and $901,000 at June 30, 1998 and June 30, 1997, respectively.
Non-interest income for the current quarter increased $66,000 or 42.0% over the
prior year's quarter and $102,000 or 22.5% for the current year to date over the
prior year due to increases in service charges and other fee income.
Non-interest expense increased $485,000 or 21.4% for the current quarter over
the prior year's quarter and $837,000 or 12.5% for the current year to date over
the prior year to date, after eliminating the impact of the charitable
contribution to the Foundation. These increases were primarily a result of
additions to staff relating to the opening of the Mountaintop branch, salary and
employee benefit increases (including ESOP accrual) and increased promotion of
loan and deposit products.
The company had total assets of $477.8 million as of June 30, 1998, representing
an increase of $108.6 million or 29.4% over the balance of $369.2 million as of
September 30, 1997. Total assets grew $34.4 million or 7.8% during the current
quarter from $443.4 million. The increases were in securities purchased and loan
originations, which were funded with the proceeds of the stock offering,
additional FHLB advances, and an increase in deposits.
(continued)
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NORTHEAST PENNSYLVANIA FINANCIAL CORP. THIRD QUARTER EARNINGS JULY 1998
Mrs. Beard indicated that, in addition to the security purchases and loan
originations, the Bank also completed the purchase of $6.2 million dollars in
new and used automobile loans from another local financial institution. Also
during the quarter, Northeast Pennsylvania Financial Corp. entered into an
agreement and completed the purchase of Abstractors, Inc., a local title
insurance agency, and the Bank entered into an agreement with T.H.E. Financial
Group LTD to provide customers with alternative investment opportunities.
Northeast Pennsylvania Financial Corp. is the holding company of First Federal
Bank, which serves the greater Hazleton area, Mountaintop, Bloomsburg,
Lehighton, and all of Schuylkill County, through ten office locations.
(continued)
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<TABLE>
<CAPTION>
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
SELECTED FINANCIAL INFORMATION
(Dollars in Thousands, Except Per Share data and ratios)
THREE MONTHS ENDED NINE MONTHS ENDED
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JUNE 30, JUNE 30,
Operating Data: 1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Total interest income $ 7,935 $ 6,771 $21,964 $19,775
Total interest expense 3,768 3,609 11,190 10,502
Provision for loan losses 292 55 779 137
Non-interest income 223 157 556 454
Non-interest expense 2,733 2,369 12,229 6,838
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Income (loss) before income taxes 1,365 895 (1,678) 2,752
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Net income (loss) $ 991 $ 604 $ (942) $ 1,891
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Earnings (loss) per share - basic .17 N/A (.16) N/A
Earnings (loss) per share - diluted .17 N/A (.16) N/A
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET DATA: 6/30/98 3/31/98 9/30/97 6/30/97
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<S> <C> <C> <C> <C>
Total assets $477,807 $443,402 $369,242 $377,518
Total securities 173,452 128,162 83,698 106,147
Loans, net 279,696 267,540 261,469 256,128
Deposits 322,872 311,660 314,123 310,428
Total equity 84,958 83,974 28,538 28,617
Book value per share $14.37 $ 14.20 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
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JUNE 30, June 30,
SELECTED RATIOS: 1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Return on average assets(1) .88% .65% (.31%) .69%
Return on average equity(1) 4.67% 8.21% (2.68%) 9.10%
Net interest margin(1) 3.75% 3.39% 3.72% 3.41%
Allowances for loan losses to .72% .36% .72% .36%
loans, net
(1) Annualized
</TABLE>
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