<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-23975
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT
OF THE ISSUER NAMED BELOW:
Lockport Savings Bank 401(k) Plan
6950 South Transit Road
Lockport, New York 14095-0514
B. NAME OF THE ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
Niagara Bancorp, Inc.
6950 South Transit Road
Lockport, New York 14095-0514
REQUIRED INFORMATION
The Lockport Savings Bank 401(k) Plan (the "Plan") is subject to EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974 (ERISA) and therefore is filing the
financial statements and schedules prepared in accordance with the financial
reporting requirements of ERISA, as of and for the years ended December 31,
1998 and 1997, as an exhibit to this report. Such Plan financial statements
and schedules include an Independent Auditors' Report thereon.
EXHIBIT INDEX
23 Consent of KPMG LLP
99 Lockport Savings Bank 401(k) Plan Financial Statements and Schedules as
of and for the years ended December 31, 1998 and 1997, with Independent
Auditors' Report thereon.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Compensation Committee of the Board of Directors of Lockport Savings Bank
(as administrator of the Plan) has caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
Lockport Savings Bank 401(k)
Date: June 25, 1999 By: /s/ KATHLEEN P. MONTI
---------------------- ---------------------------------
Kathleen P. Monti
Executive Vice President
Human Resources & Administration
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<PAGE>
Independent Auditors' Consent
The Employee Benefits Committee of
Lockport Savings Bank:
We consent to the use of our independent auditors' report dated June 3, 1999, on
the statements of net assets available for plan benefits of Lockport Savings
Bank 401(k) Plan as of December 31, 1998 and 1997, and the related statements of
changes in net assets available for plan benefits for each of the years in the
two year period then ended included in the December 31, 1998 Annual Report Form
11-K of the Lockport Savings Bank 401K Plan.
/s/ KPMG LLP
June 25, 1999
Buffalo, New York
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Financial Statements and Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Index
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits
with Fund Information as of December 31, 1998 2
Statement of Net Assets Available for Plan Benefits
with Fund Information as of December 31, 1997 3
Statement of Changes in Net Assets Available for Plan
Benefits with Fund Information for the year ended
December 31, 1998 4
Statement of Changes in Net Assets Available for Plan
Benefits with Fund Information for the year ended
December 31, 1997 5
Notes to Financial Statements 6
Schedules
1 Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 10
2 Item 27d - Schedule of Reportable Transactions for the
year ended December 31, 1998 11
</TABLE>
<PAGE>
Independent Auditors' Report
The Employee Benefits Committee of
Lockport Savings Bank:
We have audited the financial statements of Lockport Savings Bank 401(k) Plan as
of December 31, 1998 and 1997, and for the years then ended, as listed in the
accompanying index. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
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 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 financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of Lockport
Savings Bank 401(k) Plan as of December 31, 1998 and 1997, and the changes in
net assets available for plan benefits for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. Supplemental schedules 1 and 2 are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
June 3, 1999
<PAGE>
LOCKPORT SAVINGS BANK
401(K) PLAN
Statement of Net Assets Available for Plan Benefits
with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Guaranteed U.S. Money Bond and Stock
Interest Stock Market Mortgage Index 500
Account Account Account Account Account
------------ ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Group annuity contract with insurance company $ 1,168,585 1,699,519 75,441 192,351 1,144,243
Common stock -- -- -- -- --
------------ ------------- ---------- ---------- -----------
Total investments 1,168,585 1,699,519 75,441 192,351 1,144,243
Dividends receivable -- -- -- -- --
------------ ------------- ---------- ---------- -----------
Net assets available for plan benefits $ 1,168,585 1,699,519 75,441 192,351 1,144,243
============ ============= ========== ========== ===========
<CAPTION>
Small Niagara
Company Bancorp, Inc.
Blend Common
Account Stock Total
--------- --------------- -----------
<S> <C> <C> <C>
Investments, at fair value:
Group annuity contract with insurance company $ 138,848 -- 4,418,987
Common stock -- 2,342,534 2,342,534
--------- --------------- -----------
Total investments 138,848 2,342,534 6,761,521
Dividends receivable -- 6,693 6,693
--------- --------------- -----------
Net assets available for plan benefits $ 138,848 2,349,227 6,768,214
========= =============== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Statement of Net Assets Available for Plan Benefits
with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Guaranteed U.S. Money Bond and
Interest Stock Market Mortgage
Account Account Account Account
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Investments under group annuity
contract with insurance company $ 1,505,960 2,437,839 133,477 236,187
----------------- ------------------ ----------------- -----------------
Net assets available for plan
benefits $ 1,505,960 2,437,839 133,477 236,187
================= ================== ================= =================
<CAPTION>
Stock
Index 500
Account Total
----------------- -----------------
<S> <C> <C>
Investments under group annuity
contract with insurance company $ 626,460 4,939,923
----------------- -----------------
Net assets available for plan
benefits $ 626,460 4,939,923
================= =================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Statement of Changes in Net Assets
Available for Plan Benefits with Fund Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
Small
Guaranteed U.S. Money Bond and Stock Company
Interest Stock Market Mortgage Index 500 Blend
Account Account Account Account Account Account
------------ --------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 42,017 89,712 4,228 11,363 59,002 14,332
Employee 117,758 366,648 66,103 37,163 208,991 53,748
------------ --------- --------- ---------- ----------- ---------
159,775 456,360 70,331 48,526 267,993 68,080
------------ --------- --------- ---------- ----------- ---------
Investment income:
Interest and dividends 74,408 -- -- -- -- --
Net appreciation (depreciation) in fair
value of investments, including
realized gains and losses on sales 505 299,679 6,633 12,940 222,653 (15,653)
------------ --------- --------- ---------- ----------- ---------
74,913 299,679 6,633 12,940 222,653 (15,653)
------------ --------- --------- ---------- ----------- ---------
Total contributions and
investment income 234,688 756,039 76,964 61,466 490,646 52,427
Benefits paid to participants (22,065) (43,156) (155,546) (13,730) (46,346) (3,729)
Administrative expenses (3,387) (5,540) (267) (526) (3,598) (649)
Transfers among funds (546,611) 1,445,663) 20,813 (91,046) 77,081 90,799
------------ --------- --------- ---------- ----------- ---------
Net increase (decrease) (337,375) (738,320) (58,036) (43,836) 517,783 138,848
Net assets available for plan benefits:
Beginning of year 1,505,960 2,437,839 133,477 236,187 626,460 --
------------ --------- --------- ---------- ----------- ---------
End of year $ 1,168,585 1,699,519 75,441 192,351 1,144,243 138,848
============ ========= ========= ========== =========== =========
<CAPTION>
Niagara
Bancorp, Inc.
Common
Stock Total
-------------- -----------
<S> <C> <C>
Contributions:
Employer $ 33,631 254,285
Employee 95,930 946,341
-------------- -----------
129,561 1,200,626
-------------- -----------
Investment income:
Interest and dividends 6,693 81,101
Net appreciation (depreciation) in fair
value of investments, including
realized gains and losses on sales 321,684 848,441
-------------- -----------
328,377 929,542
-------------- -----------
Total contributions and
investment income 457,938 2,130,168
Benefits paid to participants (3,338) (287,910)
Administrative expenses -- (13,967)
Transfers among funds 1,894,627 --
-------------- -----------
Net increase (decrease) 2,349,227 1,828,291
Net assets available for plan benefits:
Beginning of year -- 4,939,923
-------------- -----------
End of year $ 2,349,227 6,768,214
============== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Statement of Changes in Net Assets
Available for Plan Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
Guaranteed U.S. Money Bond and Stock
Interest Stock Market Mortgage Index 500
Account Account Account Account Account Total
------------ ----------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 56,721 85,364 5,648 13,981 34,632 196,346
Employee 155,798 256,844 18,218 46,447 95,516 572,823
------------ ----------- --------- ---------- ------------ ------------
212,519 342,208 23,866 60,428 130,148 769,169
------------ ----------- --------- ---------- ------------ ------------
Investment income:
Interest 86,414 -- -- -- -- 86,414
Net appreciation in fair value of
investments, including realized
gains and losses on sales 3,393 498,451 5,489 18,356 120,945 646,634
------------ ----------- --------- ---------- ------------ ------------
89,807 498,451 5,489 18,356 120,945 733,048
------------ ----------- --------- ---------- ------------ ------------
Total contributions and
investment income 302,326 840,659 29,355 78,784 251,093 1,502,217
Benefits paid to participants (32,285) (183,656) (13) (8,728) (25,472) (250,154)
Transfers among funds (188,258) 13,615 4,918 26,212 143,513 --
------------ ----------- --------- ---------- ------------ ------------
Net increase 81,783 670,618 34,260 96,268 369,134 1,252,063
Net assets available for plan benefits:
Beginning of year 1,424,177 1,767,221 99,217 139,919 257,326 3,687,860
------------ ----------- --------- ---------- ------------ ------------
End of year $ 1,505,960 2,437,839 133,477 236,187 626,460 4,939,923
============ =========== ========= ========== ============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) Description of Plan
The following description of Lockport Savings Bank 401(k) Plan (the Plan)
is provided for general information purposes only. Participants should
refer to the Plan document for more complete information.
(a) General
The Plan is a defined contribution plan covering all employees of
Lockport Savings Bank (the Bank), a wholly-owned subsidiary of
Niagara Bancorp, Inc (NBCP). The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
(b) Eligibility
Employees are eligible to participate in the Plan when they reach
age 21 and have completed one year of service during which they
worked at least 1,000 hours.
(c) Contributions
Participants may make contributions to the Plan in the form of
salary reductions of up to 15% of their total compensation. The
Bank makes matching contributions of 50% of employee
contributions, up to a maximum of 6% of the employee's total
compensation. Participant contributions are limited by the maximum
allowable contribution under the Internal Revenue Code.
(d) Participants' Accounts
Each participant's account is credited with contributions and a
pro rata share of investment income.
(e) Vesting
Participant and employer matching contributions immediately vest
100% to the participant.
(f) Distributions
Participants or their beneficiaries are entitled to their entire
account balance upon death, disability or retirement, payable in a
single sum or in an annuity.
(Continued)
6
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(g) Administrative Expenses
Predominantly all costs of administering the Plan except
recordkeeping are paid by the Bank.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on the
accrual basis of accounting.
(b) Investments
The Guaranteed Interest Account is carried at fair value, which
approximates contract value (original investment plus accrued
interest). Investments in the pooled separate accounts of the
Principal Mutual Life Insurance Company (Principal) are carried at
fair value based on the fair values of the underlying assets.
Investments in common stock are valued based on quoted market
prices. Investment income includes unrealized appreciation or
depreciation in the value of the investments. Investment
transactions are recorded on the trade date.
(c) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions that affect the reported amounts of net
assets available for plan benefits and changes therein. Actual
results could differ from those estimates.
(3) Investments
Contributions to the Plan are invested under a group annuity contract
with Principal. In 1998, the investment options with Principal were
amended to include a Small Company Blend Account. Plan participants may
allocate their funds among one or more of the following investment
accounts under the contract:
. Guaranteed Interest - A general investment account comprised
of guaranteed interest contracts.
. U.S. Stock - A pooled separate account which is comprised of
equity securities.
. Money Market - A pooled separate account which is comprised of
commercial paper, U.S. government and agency securities and
other short-term, interest-bearing securities.
(Continued)
7
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
. Bond and Mortgage - A pooled separate account which is
comprised of intermediate-term, commercial mortgages and
mortgage-backed securities.
. Stock Index 500 - A pooled separate account which is comprised
of the stocks included in the Standard & Poor's 500 Stock
Index.
. Small Company Blend - A pooled separate account which is
comprised of equity securities of small to medium capitalized
domestic companies.
In addition, as a result of the initial public stock offering by NBCP,
Plan participants are also able to allocate their funds to the purchase
of NBCP common stock
Individual investments that comprise 5% or more of the Plan's net assets
available for plan benefits at December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
----------------- -----------------
<S> <C> <C>
Principal Mutual Life Insurance Company:
Guaranteed Interest Contracts:
5.47%, maturing December 31, 1997 $ -- 223,176
6.90%, maturing December 31, 1998 131,992 221,652
5.74%, maturing December 31, 1999 187,321 341,929
6.99%, maturing December 31, 1999 236,611 357,475
5.66%, maturing December 31, 2000 226,575 361,728
3.05%, maturing December 31, 2000 386,086 --
U.S. Stock Account 1,699,519 2,437,839
Stock Index 500 Account 1,144,243 626,460
Niagara Bancorp, Inc. common stock 2,342,534 --
============== ==============
</TABLE>
(4) Federal Income Taxes
The Internal Revenue Service has issued a favorable determination letter
applicable to the tax-exempt status of the Plan. The Plan sponsor has
represented that the Plan has been operated in conformity with its
provisions and applicable laws and regulations. Accordingly, there is no
provision for income taxes reflected in these financial statements due to
the applicable exemptions under Sections 401 and 501 of the Internal
Revenue Code.
(Continued)
8
<PAGE>
LOCKPORT SAVINGS BANK
401(k) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(5) Plan Termination
Although it has not expressed any intent to do so, the Bank has the right
to discontinue its matching contribution at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of a termination of
the Plan, participants will be entitled to the entire amount credited to
their accounts.
9
<PAGE>
Schedule 1
LOCKPORT SAVINGS BANK
401(k) PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Current
Identity of issue Description Cost Value
- ----------------------------------------------- ------------------------------- ----------------- ------------------
<S> <C> <C> <C>
Group annuity contract with Principal
Mutual Life Insurance Company:*
Guaranteed Interest Account Guaranteed interest
contracts maturing at
various dates through
December 31, 2000 $ 1,168,585 1,168,585
U.S. Stock Account Pooled separate account
investing in equity
securities 1,214,593 1,699,519
Money Market Account Pooled separate account
investing in money
market instruments 73,129 75,441
Bond and Mortgage Account Pooled separate account
investing in fixed
income securities 172,240 192,351
Stock Index 500 Account Pooled separate account
investing in corporate
stocks 873,278 1,144,243
Small Company Blend Account Pooled separate account
investing in corporate
stocks of small to
medium capitalized
companies 153,299 138,848
Niagara Bancorp, Inc. Employer securities
common stock* 2,275,707 2,342,534
----------------- ------------------
$ 5,930,831 6,761,521
================= ==================
</TABLE>
*Person named is a party-in-interest.
10
<PAGE>
Schedule 2
LOCKPORT SAVINGS BANK
401(k) PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
Number Number
Identity of Description of units Purchase of units Selling Lease
party involved of asset purchased price sold price rental
- ------------------------- ---------------------- --------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Principal Mutual
Life Insurance
Company*:
Guaranteed
Interest General investment
Account** account -- $ 522,812 -- $ 927,115 --
U.S. Stock Pooled separate
Account** account 2,371 978,443 4,863 2,014,628 --
Stock Index 500 Pooled separate
Account** account 22,396 834,857 14,415 537,906 --
Money Market Pooled separate
Account** account 8,074 290,252 6,586 354,921 --
Bond and
Mortgage Pooled separate
Account** account 372 116,601 244 173,377 --
Niagara Bancorp,
Inc.* Common stock** 286,737 2,918,583 63,639 897,733 --
=============== ============== ============== ============== ============
<CAPTION>
Fair
Expense value of
incurred asset on
Identity of with Cost of transaction Net
party involved transaction asset date gain
- ------------------------- --------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Principal Mutual
Life Insurance
Company*:
Guaranteed
Interest
Account** -- 927,115 927,115 --
U.S. Stock
Account** -- 1,241,506 2,014,628 773,122
Stock Index 500
Account** -- 415,262 537,906 122,644
Money Market
Account** -- 343,728 354,921 11,193
Bond and
Mortgage
Account** -- 151,752 173,377 21,625
Niagara Bancorp,
Inc.* -- 642,876 897,733 254,857
=============== ============= ============== ==============
</TABLE>
* Person named is a party-in-interest.
** Represents a series of transactions.
11
