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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) April 19, 1999
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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)
(570) 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 April 19, 1999, Northeast Pennsylvania Financial Corp. (the "Company"),
issued a press release which reported approval of common stock repurchase
program and earnings for the fiscal quarter ended March 31, 1999.
A press release announcing the approval of the repurchase program and the
Company's second 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 April 19, 1999.
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: April 19, 1999 By: /s/ E. Lee Beard
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E. Lee Beard
President and Chief Executive Officer
Dated: April 19, 1999 By: /s/ Patrick J. Owens, Jr.
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Patrick J. Owens, Jr.
Senior Vice President and
Chief Financial Officer
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EXHIBIT 99.1 PRESS RELEASE
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NORTHEAST PENNSYLVANIA FINANCIAL CORP.
12 EAST BROAD STREET HAZLETON, PENNSYLVANIA 18201-6591 PHONE (717) 459-3700
NEWS RELEASE
============
FOR IMMEDIATE RELEASE
DATE: April 19, 1999
CONTACT: Patrick J. Owens, Jr.
Treasurer
PHONE: (570) 459-3722 office
FAX: (570) 450-6110
NORTHEAST PENNSYLVANIA FINANCIAL CORP. REPORTS APPROVAL OF COMMON STOCK
REPURCHASE PROGRAM AND SECOND QUARTER 1999 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, announced that the Company received
authorization on April 19, 1999, from the Office of Thrift Supervision, to
repurchase 305,299 shares of its common stock. The stock repurchase program was
previously approved by the Company's Board of Directors and represents 5% of the
Company's 6,105,982 outstanding shares.
The Company reported a net profit for the quarter ended March 31, 1999 of $1.1
million, or $.19 basic and diluted earnings per share, as compared to a $2.5
million net loss for the respective prior year period. For the six months ended
March 31, 1999, the Company had net income of $2.3 million, or $.38 diluted
earnings per share compared to a $1.9 million net loss for the six months ended
March 31, 1998. Prior year losses are a result of a one-time $4.8 million
non-recurring pre-tax expense (or $3.1 million after-tax) related to the
charitable contribution made to First Federal Charitable Foundation (the
"Foundation") in connection with the Bank's mutual to stock conversion.
Northeast Pennsylvania Financial Corp.'s core
(continued)
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net earnings at March 31, 1998 (earnings excluding the after-tax impact of the
non-recurring contribution) were $651,000 for the quarter and $1.2 million for
the year to date.
Net interest income for the current quarter rose $930,000, or 25.0%, over the
prior year quarter and $2.1 million, or 31.1%, for the six months ended March
31, 1999 over the prior year to date. These increases were primarily
attributable to higher outstanding investment and loan balances, offset by
higher outstanding deposit balances and higher Federal Home Loan Bank (FHLB)
advances. The provision for loan losses decreased $84,000, or 38.3%, for the
current quarter over the prior year quarter and $304,000, or 62.4%, for the
current year to date over the prior year period. This decrease is due to a
change in the company's loan loss reserve methodology in the fourth quarter of
fiscal 1998. Non-performing assets have remained stable with balances of
$965,000 and $978,000 at March 31, 1999 and March 31, 1998, respectively.
Non-interest income for the current quarter increased $194,000 over the prior
year's quarter and $420,000 for the current year to date over the prior year due
to increases in service charges and premium income. Non-interest expense
increased $764,000, or 30.9%, for the current quarter over the prior year's
quarter and $1.6 million, or 33.9%, 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 salary and employee
benefit increases (including an ESOP and stock award accrual), increased
promotion of loan and deposit products, and increased professional fees
associated with being a public company.
Total assets grew $34.9 million, or 6.7% during the current quarter from $523.0
million to $557.9 million. Investment securities increased $17.7 million, or
13.3%, offset by a decrease in cash of $6.9 million and mortgage backed
securities of $5.9 million. Loans receivable increased $28.3 million for the
period, primarily due to increases of $12.8 million in consumer loans, $10.0
million of which were home equity loans purchased from another financial
institution in March 1999 and commercial loans which increased $15.0 million
during
(continued)
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the quarter. The majority of the loan origination and loan purchases occurred
during the last month of the quarter. These increases in assets were funded by
an increase of $23.3 million in deposit accounts, $21.8 million of which were
certificates of deposit, and an increase of $16.0 million in advances from the
Federal Home Loan Bank. Total capital decreased $4.0 million, primarily as a
result of the repurchase of $4.1 million of the Company's common stock during
the quarter.
Mrs. Beard indicated the purchase of the $10.0 million in home equity loans is
part of a restructuring strategy which involves the sale of approximately $21.0
million of fixed rate long term mortgages and the subsequent purchase of home
equity loans and ARM mortgage loans. This transaction is expected to improve
earnings and increase the Company's net interest margin.
During the quarter, Northeast Pennsylvania Financial Corp. entered into an
agreement to acquire a branch, located in Danville, Pennsylvania, from Omega
Bank. Northeast Pennsylvania Financial Corp. is the holding company of
Abstractors, Inc., a wholly-owned title insurance agency, and First Federal
Bank, which serves the greater Hazleton area, Mountaintop, Bloomsburg,
Lehighton, and all of Schuylkill County, through ten office locations.
Statements contained in this news release, which are not historical facts, are
forward looking statements, as the term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risk and uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to, factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time.
(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 SIX MONTHS ENDED
MARCH 31, MARCH 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
OPERATING DATA:
Total interest income................. $8,975 $7,114 $17,943 $14,028
Total interest expense................ 4,644 3,713 9,280 7,421
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Net interest income................... 4,331 3,401 8,663 6,607
Provision for loan losses............. 135 219 183 487
Net interest income after
provision for loan losses........... 4,196 3,182 8,480 6,120
Non-interest income................... 368 174 753 333
Non-interest expense.................. 3,236 7,233 6,340 9,497
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Income (loss) before income taxes..... 1,328 (3,877) 2,893 (3,044)
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Net income (loss)..................... $1,073 $(2,491) $ 2,251 $ (1,934)
====== ======== ======== =========
Earnings (loss) per share - basic..... .19 .39
Earnings (loss) per share - diluted... .19 .38
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET DATA: 3/31/99 12/31/99 9/30/98
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<S> <C> <C> <C>
Total assets................... $557,933 $523,056 $522,268
Total securities............... 226,757 214,107 220,864
Loans, net..................... 312,425 284,264 282,706
Deposits....................... 344,514 321,178 324,005
FHLB advances.................. 127,989 111,994 106,498
Total equity................... 81,208 85,199 87,434
Book value per share........... $ 14.40* $ 14.61* $ 14.80*
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
SELECTED RATIOS:
Return on average assets(1).............. .80% (2.49%) .85% (.99%)
Return on average equity(1).............. 5.46% (32.28%) 5.63% (12.93%)
Net interest margin(1)................... 3.64% 3.61% 3.68% 3.60%
Allowance for loan losses to loans, net.. .79% .64% .77% .48%
</TABLE>
(1)Annualized.
* Book value calculation adjusted for ESOP shares committed to be released and
stock awards granted.
