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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 March 31, 1998
Adirondack Financial Services Bancorp, Inc.
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
Delaware 333-43697 14-1801465
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
incorporation or organization)
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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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TABLE OF CONTENTS
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.
Registrant has issued press release regarding results of first quarter.
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: May 1, 1998 \s\Lewis E. Kolar
-----------------
Lewis E. Kolar
President and CEO
Dated: May 1, 1998 \s\Menzo D. Case
----------------
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
Contact: Menzo D. Case
EVP & CFO
(518) 725-6331
For Immediate Release
Monday, May 11, 1998
Adirondack Financial Announces Quarterly Earnings
Gloversville, NY -- Adirondack Financial Services Bancorp, Inc. (Nasdaq OTC:
AFSB) reported that net income of its subsidiary, Gloversville Federal Savings
and Loan Association, for the quarter ended March 31, 1998 was $33,000 compared
to a net loss of $122,040 for quarter ended March 31, 1997. Since Adirondack
Financial Services Bancorp's initial stock offering was not completed until
April 6, 1998, all financial information refers to Gloversville Federal Savings
and Loan Association, which became Adirondack's subsidiary upon the completion
of such stock offering. Earnings for the six months ended March 31, 1998 were
$57,000 as compared to a net loss of $235,000 for the six months ended March 31,
1997.
Total assets were $80.4 million at March 31, 1998 as compared to $61.0 million
at September 30, 1997. The increase was primarily attributable to $19.3 million
of proceeds received from Adirondack Financial's subscription offering which
were held as deposits on March 31, 1998. The stock offering was closed April 6,
1998 with the acceptance of $6.6 million of stock orders in accordance with
Federal rules. As a result, $12.7 million of subscription funds were refunded to
subscribers.
Gross loans declined from $51.3 million at September 30, 1997 by $1.0 million to
$50.3 million at March 31, 1998. The majority of the loan decline was in the
one-to-four family loan category. The effects of the decline in one-to-four
family loans was partially offset by an increase in the commercial business
portfolio.
Nonperforming loans decreased $448,000 from $3.8 million at September 30, 1997
to $3.3 million at March 31, 1998. The ratio of nonperforming loans to total
loans decreased to 6.67% at March 31, 1998 from 7.39% at September 30, 1997.
Deposits increased $17.1 million from $56.1 million at September 30, 1997 to
$73.2 million at March 31, 1998. Demand and NOW account balances increased from
$5.1 million at September 30, 1997 to $21.6 million at March 31, 1998. Savings
and money market accounts were $25.8 million at March 31, 1998 as compared to
$23.0 million at September 30, 1997. Time deposits declined $2.2 million from
$28.0 million at September 30, 1997 to $25.8 million at March 31, 1998.
Borrowings increased from $1.3 million at September 30, 1997 to $3.5 million at
March 31, 1998. The increase in checking, money market and savings accounts was
primarily attributable to deposits made to fund payment of the subscription
orders for the Company's stock. The time deposit decline was due to the
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maturity of 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 March 31, 1998 was $572,000, a
decrease of $55,000 from $627,000 for the quarter ended March 31, 1997. Net
interest income for the six months ended March 31, 1998 was $1.1 million, a
decrease of $140,000 from $1.3 million for the six months ended March 31, 1997.
The decreases reflect a lower average interest-earning asset yield and higher
cost of funds. Included in net interest income for 1998 was interest earned on
subscription funds held in connection with the stock offering as well as
interest expense paid on related escrow deposits.
The provision for loan losses was $15,000 and $198,000 for the three month
periods ended March 31, 1998 and 1997, respectively. For the six months ended
March 31, 1998 and 1997, the provision for loan losses was $30,000 and $396,000,
respectively. The allowance for loan losses was $1.6 million or 46.94% of
nonperforming loans at March 31, 1998, compared to 44.32% at September 30, 1997.
Non-interest expense decreased $34,000 to $536,000 for the three months ended
March 31, 1998 as compared to $570,000 for the same period in the prior year.
For the six months ended March 31, 1998, non-interest expense decreased $65,000
to $1.1 million compared to $1.2 million for the same period in fiscal 1997. The
decreases are attributable 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.
Adirondack Financial, a newly formed bank holding company, began trading its
stock upon the completion of its initial subscription 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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Gloversville Federal Savings and Loan Association
Selected Consolidated Financial Information
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<CAPTION>
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At March 31, At September 30,
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1998 1997
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(In Thousands)
<S> <C> <C>
Total assets $80,414 $61,021
Cash and cash equivalents 22,552 1,922
Net loans receivable 48,591 49,526
Mortgage-backed securities available for sale 3,247 3,562
Other securities available for sale 3,453 3,455
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Total securities available for sale 6,700 7,017
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Deposits 73,181 56,117
Borrowings 3,500 1,300
Total equity 3,361 3,280
For three Months Ended
--------------------------------
March 31, March 31,
--------------- ----------------
1998 1997
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(In Thousands)
Interest income 1,223 1,226
Interest expense 652 600
Net interest income 571 626
Provision for loan losses 15 198
Net interest income after provision for loan losses 556 428
Total non-interest income 35 34
Non-interest expense 536 570
Income (loss) before income tax expense 55 (108)
Income tax expense 22 16
Net income (loss) 33 (124)
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Selected Financial Ratios (Annualized) and Other Data
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<CAPTION>
At or For the Six Months
Ended March 31,
------------------------
1998 1997
------------ -----------
<S> <C> <C>
Performance Ratios:
Return on average assets 0.18% (0.76%)
Return on average equity 3.42% (12.74%)
Average interest rate spread during period 3.74% 4.15%
Net interest margin 3.82% 4.28%
Ratio of operating expenses to average total assets (1) 3.48% 3.69%
Efficiency ratio (2) 88.41% 84.86%
Ratio of average interest-earning assets
to average interest-bearing liabilities 101.69% 103.29%
Quality ratios:
Non-performing assets to total assets at end of period 4.25% 5.21%
Allowance for loan loss to non-performing loans at end of
period 46.37% 41.30%
Allowance for loan losses to gross loans receivable at end
of period 3.12% 2.56%
Capital ratios:
Equity to total assets at end of period 4.18% 5.63%
Average equity to average assets 5.39% 6.09%
Other data:
Number of full service offices 2 2
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(1) Operating expenses exclude OREO expenses of $16,000 and $14,000 for periods
ended March 31, 1998 and 1997, respectively.
(2) The efficiency ratio represents operating expenses (as defined above)
divided by the sum of net interest income and other income.
