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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8 - K
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1998
Adirondack Financial Services Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-43697 14-1801465
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation or organization) Identification No.)
52 North Main Street, Gloversville, NY 12078
(Address of principal executive offices)
(518) 725-6331
(Registrants telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
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Item 1. Changes in Control of Registrant.
None
Item 2. Acquisition or Disposition of Assets.
None
Item 3. Bankruptcy or Receivership.
None
Item 4. Changes in registrant's Certifying Accountant.
None
Item 5. Other Events.
On July 27, 1998, the Registrant issued the attached press release.
Item 6. Resignations of Registrant's Directors.
None
Item 7. Financial Statements and Exhibits.
Exhibit 1 - Press Release
Item 8. Change in Fiscal Year.
None
Item 9. Sales of Equity Securities Pursuant to Regulation S.
None.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Adirondack Financial Services Bancorp, Inc.
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(Registrant)
Dated: July 27, 1998 \s\Lewis E. Kolar
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Lewis E. Kolar
President and CEO
Dated: July 27, 1998 \s\Menzo D. Case
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Menzo D. Case
Executive VP and CFO
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Adirondack Financial Services Bancorp, Inc.
Exhibit 1. Press Release
Adirondack Financial Services Bancorp, Inc.
52 North Main Street
Gloversville, NY 12078
NASDAQ Symbol: AFSB
Contact: Menzo D. Case
EVP & CFO
(518) 725-6331
For Immediate Release
Monday, July 27, 1998
Adirondack Financial Announces Quarterly Earnings
Gloversville, NY -- Adirondack Financial Services Bancorp, Inc. (Nasdaq OTC:
AFSB) reported that unaudited net income of its subsidiary, Gloversville Federal
Savings and Loan Association, for the quarter ended June 30, 1998 was $73,000,
or $.11 per common share, based on 661,250 shares outstanding, compared to a net
loss of $111,000 for quarter ended June 30, 1997. Earnings for the nine months
ended June 30, 1998 were $130,000, or $.20 per common share, as compared to a
net loss of $346,000 for the nine months ended June 30, 1997. Per share earnings
data for the three-month and nine-month periods in 1997 are not applicable as
the Company converted to stock form on April 6, 1998.
Total assets were $66.0 million at June 30, 1998 as compared to $61.0 million at
September 30, 1997. The increase was primarily attributable to net proceeds of
$5.5 million received from Adirondack Financial's subscription offering which
closed April 6, 1998 and by a $700,000 increase in borrowings partially offset
by a $1.4 million decline in deposits.
Gross loans increased $56,000 and were $51.3 million at September 30, 1997 and
at June 30, 1998. Multi-family and commercial real estate loans and commercial
business loans increased $1.8 million from $9.4 million at September 30, 1997 to
$11.2 million at June 30, 1998 while all other loan balances declined during the
same period.
Nonperforming loans decreased $2.3 million from $3.8 million at September 30,
1997 to $1.5 million at June 30, 1998. The ratio of nonperforming loans to gross
loans decreased to 2.93% at June 30, 1998 from 7.39% at September 30, 1997.
Deposits decreased $1.3 million from $56.1 million at September 30, 1997 to
$54.8 million at June 30, 1998. Demand and NOW account balances increased from
$5.1 million at September 30, 1997 to $5.9 million at June 30, 1998. Savings and
money market accounts were $23.0 million at June 30, 1998 and at September 30,
1997. Time deposits declined $2.1 million from $28.0 million at September 30,
1997 to $25.9 million at June 30, 1998. Borrowings increased from $1.3 million
at September 30, 1997 to $2.0 million at June 30, 1998. Demand and NOW account
balances at June 30, 1998 included $445,000 held in a commercial loan closing
account. The time deposit decline was due to the maturity of
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higher costing time deposits that were not maintained by the Association as
borrowings were a less expensive option available to meet short-term funding
needs.
Net interest income for the quarter ended June 30, 1998 was $666,000, an
increase of $46,000 from $620,000 for the quarter ended June 30, 1997. The
increase is primarily the additional interest income earned from investing the
net proceeds received from the subscription offering. Net interest income for
the nine months ended June 30, 1998 was $1.8 million, a decrease of $95,000 from
$1.9 million for the nine months ended June 30, 1997. The decrease reflects a
lower average interest-earning asset yield and higher cost of funds.
The provision for loan losses was $15,000 and $198,000 for the three month
periods ended June 30, 1998 and 1997, respectively. For the nine months ended
June 30, 1998 and 1997, the provision for loan losses was $45,000 and $594,000,
respectively. The allowance for loan losses was $1.5 million or 101.46% of
nonperforming loans at June 30, 1998, compared to 44.53% at September 30, 1997.
Non-interest expense increased $16,000 to $569,000 for the three months ended
June 30, 1998 as compared to $553,000 for the same period in the prior year,
reflecting additional costs incurred as a public company as well as the
establishment of an employee stock ownership plan. For the nine months ended
June 30, 1998, non-interest expense decreased $49,000 and was $1.7 million for
the nine months ended June 30, 1998 and for the nine months ended June 30, 1997.
The decrease was attributable to cost saving measures taken in general
operations, reduced premiums being assessed for deposit insurance due to the
recapitalization of the Savings Association Insurance Fund and a reduction in
other expenses offset partially by higher employee benefit costs.
Adirondack Financial Services Bancorp, Inc., a newly formed bank holding
company, began trading its stock upon the completion of its initial subscription
offering on April 6, 1998. Simultaneously, Adirondack Financial became the owner
of all of the outstanding shares of Gloversville Federal Savings and Loan
Association. The Company has two retail offices located in Gloversville, NY and
Saratoga Springs, NY.
END
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Adirondack Financial Services Bancorp, Inc.
Selected Consolidated Financial Information
<TABLE>
<CAPTION>
At June 30, 1998 At September 30, 1997
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(In Thousands)
<S> <C> <C>
Total assets $66,028 $61,021
Cash and cash equivalents 6,409 1,922
Net loans receivable 49,698 49,526
Mortgage-backed securities available for sale 4,827 3,589
Other securities available for sale 2,961 3,428
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Total securities available for sale 7,788 7,017
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Deposits 54,756 56,117
Borrowings 2,000 1,300
Total equity 8,924 3,280
For the Three Months Ended June 30,
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1998 1997
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(In Thousands)
Interest income $ 1,291 $ 1,232
Interest expense 625 612
Net interest income 666 620
Provision for loan losses 15 198
Net interest income after provision for loan losses 651 422
Total non-interest income 41 33
Non-interest expense 569 553
Income (loss) before income tax expense 123 (98)
Income tax expense 50 13
Net income (loss) 73 (111)
For the Nine Months Ended June 30,
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1998 1997
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(In Thousands)
Interest income $ 3,699 $ 3,714
Interest expense 1,905 1,826
Net interest income 1,794 1,888
Provision for loan losses 45 594
Net interest income after provision for loan losses 1,749 1,294
Total non-interest income 129 111
Non-interest expense 1,660 1,709
Income (loss) before income tax expense 218 (304)
Income tax expense 88 42
Net income (loss) 130 (346)
</TABLE>
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Selected Financial Ratios (Annualized) and Other Data
<TABLE>
<CAPTION>
At or For the Three Months Ended
6/30/98 6/30/97
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<S> <C> <C>
Performance Ratios:
Return on average assets 0.43% (0.72%)
Return on average equity 3.40% (12.68%)
Average interest rate spread during period 4.12% 4.15%
Net interest margin 3.69% 3.99%
Ratio of operating expenses to average total assets (1) 3.33% 3.53%
Efficiency ratio (2) 79.35% 83.15%
Ratio of average interest-earning assets
to average interest-bearing liabilities 111.08% 103.75%
Quality ratios:
Non-performing assets to total assets at end of period 2.50% 4.81%
Allowance for loan loss to non-performing loans at end of period 101.46% 56.39%
Allowance for loan losses to gross loans receivable at end of period 2.97% 2.93%
Capital ratios:
Equity to total assets at end of period 13.52% 5.78%
Average equity to average assets 12.72% 5.70%
Other data:
Number of full service offices 2 2
</TABLE>
(1) Operating expenses exclude OREO expenses of $8,000 and $10,000 for periods
ended June 30, 1998 and 1997, respectively.
(2) The efficiency ratio represents opeating expenses (as defined above)
divided by the sum of net interest income and other income.
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<TABLE>
<CAPTION>
At or For the Nine Months Ended
6/30/98 6/30/97
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<S> <C> <C>
Performance Ratios:
Return on average assets 0.27% (0.75%)
Return on average equity 3.53% (12.72%)
Average interest rate spread during period 3.92% 4.24%
Net interest margin 3.72% 4.09%
Ratio of operating expenses to average total assets (1) 3.41% 3.65%
Efficiency ratio (2) 85.13% 84.30%
Ratio of average interest-earning assets
to average interest-bearing liabilities 104.79% 103.49%
Average equity to average assets 7.67% 5.89%
</TABLE>
(1) Operating expenses exclude OREO expenses of $24,000 for periods ended
June 30, 1998 and 1997.
(2) The efficiency ratio represents opeating expenses (as defined above)
divided by the sum of net interest income and other income.
