<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to _________________
Commission File Number 0-24791
MASSACHUSETTS FINCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 04-3431804
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1442 DORCHESTER AVENUE, BOSTON, MASSACHUSETTS 02122
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(617) 825-5555
- --------------------------------------------------------------------------------
(Issuer's telephone number)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changes since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes N/A No
----- -----
Yes No X
----- -----
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: No shares were outstanding as
of November 23, 1998.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
--------------------
Massachusetts Fincorp, Inc. (the "Company") is a recently formed holding
company, formed for the purpose of acquiring all of the common stock of The
Massachusetts Co-operative Bank (the "Bank") concurrent with the Bank's
conversion from mutual to stock form of organization. At this time and until the
conversion is complete, Massachusetts Fincorp, Inc. is a noncapitalized shell
corporation with no business activities. The financial statements of
Massachusetts Fincorp, Inc., which are set forth after Item 3 below, reflect
such status. For a further discussion of Massachusetts Fincorp, Inc.'s formation
and intended operations see "Massachusetts Fincorp, Inc." in the Company's
424(b)(3) Prospectus (the "Prospectus") as filed on October 23, 1998. Such
description of Massachusetts Fincorp, Inc. is incorporated herein by reference
and attached hereto as Exhibit 99.1. Additionally, financial information
regarding the Bank for the nine months ended and at September 30, 1998, is
attached hereto as Exhibit 99.2. Upon completion of its conversion, the Bank
will become the wholly-owned subsidiary of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
---------------------
See Item 1.
2
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<TABLE>
<CAPTION>
MASSACHUSETTS FINCORP, INC.
STATEMENTS OF CONDITION
September 30, December 31,
1998 1997
---------------- ---------------
<S> <C> <C>
Assets............................... $ -- NA
Expenses............................. $ -- NA
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Nine Months
Ended September 30, 1998
-----------------------------
<S> <C>
Income............................... $ --
Expenses............................. $ --
Net income..................... $ --
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 1998
-------------------------------------------------------
Additional
Common Paid-in Retained
Stock Capital Earnings Total
---------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Balance December 31, 1997 $ -- $ -- $ -- $ --
Balance September 30, 1998 $ -- $ -- $ -- $ --
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGE IN CASH FLOW
For the Nine Months Ended September 30,
---------------------------------------
1998 1997
------------ -----------------
<S> <C> <C>
Funds provided............................ $ -- NA
Funds used................................ $ -- NA
See accompanying notes to financial statements.
</TABLE>
3
<PAGE> 4
MASSACHUSETTS FINCORP, INC.
NOTES TO FINANCIAL STATEMENTS
1. General
Massachusetts Fincorp, Inc. is a recently formed holding company formed
for the purpose of acquiring all of the common stock of The Massachusetts
Co-operative Bank concurrent with its conversion from the mutual to stock form
of organization. At September 30, 1998, Massachusetts Fincorp, Inc. was a shell
corporation with no business activities and no assets.
4
<PAGE> 5
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
None.
Item 2. Changes in Securities and Use of Proceeds.
-----------------------------------------
None.
Item 3. Defaults Upon Senior Securities.
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
None.
Item 5. Other Information.
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K (ss.249.308 of this Chapter).
-------------------------------------------------------------
Exhibit 27.0 Financial Data Schedule
Exhibit 99.1 Massachusetts Fincorp, Inc.
Exhibit 99.2 Financial Information for the Nine Months Ended
September 30, 1998
5
<PAGE> 6
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MASSACHUSETTS FINCORP, INC.
Date: November 23, 1998 By: /s/ Paul C. Green
-----------------------------
Paul C. Green
President and Chief Executive
Officer
Date: November 23, 1998 By: /s/ Ruth J. Rogers
-----------------------------
Ruth J. Rogers
Chief Financial Officer,
Treasurer and Secretary
6
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary information extracted from the Form 10-QSB
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001066170
<NAME> Massachusetts Fincorp, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 0<F1>
<INT-BEARING-DEPOSITS> 0<F1>
<FED-FUNDS-SOLD> 0<F1>
<TRADING-ASSETS> 0<F1>
<INVESTMENTS-HELD-FOR-SALE> 0<F1>
<INVESTMENTS-CARRYING> 0<F1>
<INVESTMENTS-MARKET> 0<F1>
<LOANS> 0<F1>
<ALLOWANCE> 0<F1>
<TOTAL-ASSETS> 0<F1>
<DEPOSITS> 0<F1>
<SHORT-TERM> 0<F1>
<LIABILITIES-OTHER> 0<F1>
<LONG-TERM> 0<F1>
0<F1>
0<F1>
<COMMON> 0<F1>
<OTHER-SE> 0<F1>
<TOTAL-LIABILITIES-AND-EQUITY> 0<F1>
<INTEREST-LOAN> 0<F1>
<INTEREST-INVEST> 0<F1>
<INTEREST-OTHER> 0<F1>
<INTEREST-TOTAL> 0<F1>
<INTEREST-DEPOSIT> 0<F1>
<INTEREST-EXPENSE> 0<F1>
<INTEREST-INCOME-NET> 0<F1>
<LOAN-LOSSES> 0<F1>
<SECURITIES-GAINS> 0<F1>
<EXPENSE-OTHER> 0<F1>
<INCOME-PRETAX> 0<F1>
<INCOME-PRE-EXTRAORDINARY> 0<F1>
<EXTRAORDINARY> 0<F1>
<CHANGES> 0<F1>
<NET-INCOME> 0<F1>
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<YIELD-ACTUAL> 0<F1>
<LOANS-NON> 0<F1>
<LOANS-PAST> 0<F1>
<LOANS-TROUBLED> 0<F1>
<LOANS-PROBLEM> 0<F1>
<ALLOWANCE-OPEN> 0<F1>
<CHARGE-OFFS> 0<F1>
<RECOVERIES> 0<F1>
<ALLOWANCE-CLOSE> 0<F1>
<ALLOWANCE-DOMESTIC> 0<F1>
<ALLOWANCE-FOREIGN> 0<F1>
<ALLOWANCE-UNALLOCATED> 0<F1>
<FN>
<F1>Massachusetts Fincorp, Inc. is a newly formed savings and loan holding
company formed for the purpose of acquiring all of the common stock of The
Massachusetts Co-operative Bank, Boston, Massachusetts, concurrent with the
Bank's conversion from the mutual to stock form of organization. At September
30, 1998, Massachusetts Fincorp, Inc. was a shell corporation with no business
activities or operations and no assets.
</FN>
</TABLE>
<PAGE> 1
EXHIBIT 99.1
<PAGE> 2
MASSACHUSETTS FINCORP, INC.
Massachusetts Fincorp, Inc. is a Delaware corporation recently organized
by the Bank for the purpose of acquiring all of the capital stock of the Bank to
be issued in the Conversion. The Company expects to receive approval from the
Office of Thrift Supervision ("OTS") to become a savings and loan holding
company and, upon completion of the Conversion, will be subject to regulation by
the OTS. See "The Conversion--General" and "Regulation and Supervision--Holding
Company Regulation." Upon consummation of the Conversion, the Company will have
no significant assets other than all of the shares of the Bank's capital stock
acquired in the Conversion and an amount equal to 50% of the net proceeds of the
Conversion, including the loan to the ESOP Loan Subsidiary, and will have no
significant liabilities. The Company intends to use a portion of the net
proceeds it retains to form and capitalize the ESOP Loan Subsidiary which will
loan funds to the ESOP to purchase 8% of the stock issued in connection with the
Conversion, including shares issued to the Foundation. Based on certain
regulatory and market conditions, the Company and the Bank may, however,
alternatively choose to fund the ESOP's stock purchases through a loan by a
third party financial institution. The remaining net proceeds will be used for
general business activities, including the funding of the Stock-Based Incentive
Plan. Initially, net proceeds are expected to be invested by the Company in a
deposit account in the Bank. See "Use of Proceeds." The management of the
Company is set forth under "Management of the Company." Initially, the Company
will neither own nor lease any property, but will instead use the premises,
equipment and furniture of the Bank. At the present time, the Company does not
intend to employ any persons other than certain officers who are currently
officers of the Bank but will utilize the support staff of the Bank from time to
time. Additional employees will be hired as appropriate to the extent the
Company expands its business in the future.
Management believes that the holding company structure will provide
flexibility to diversify its business activities through existing or newly
formed subsidiaries (which subsidiaries could be financial institutions), or
through acquisitions of or mergers with other financial institutions and
financial services related companies. Although there are no current
arrangements, understandings or agreements regarding any such opportunities, the
Company will be in a position after the Conversion, subject to regulatory
limitations and the Company's financial position, to take advantage of any such
acquisition and expansion opportunities that may arise. The initial activities
of the Company are anticipated to be funded by the proceeds to be retained by
the Company, income thereon and through dividends from the Bank.
The Company's executive office is located at the administrative offices of
the Bank, 1442 Dorchester Avenue, Boston, Massachusetts 02122. Its telephone
number is (617) 825-5555.
<PAGE> 1
EXHIBIT 99.2
<PAGE> 2
<TABLE>
<CAPTION>
THE MASSACHUSETTS CO-OPERATIVE BANK
STATEMENT OF CONDITION
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------------------------------
1998 1997
------------------------------------ --------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST YIELD/COST BALANCE INTEREST YIELD/COST
----------- ---------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Interest-earning assets:
Federal funds sold and short term
investments...................... $ 1,543,463 $ 67,809 5.86% $ 2,030,084 $ 105,179 6.91%
Securities......................... 7,205,638 321,833 5.96 5,014,679 208,290 5.54
Mortgage loans, net................ 54,612,940 2,974,122 7.26 40,300,365 2,507,119 8.29
Other.............................. 1,005,650 48,480 6.43 1,005,650 48,257 6.40
----------- ---------- ----------- ----------
Total interest-earning assets... 64,367,692 3,412,244 7.07 48,350,779 2,868,845 7.91
Non-interest-earning assets.......... 2,786,738 3,096,170 --
----------- ---------- ----------- ----------
Equity securities.................. 622,058 11,171 2.39 409,260 7,375 2.40
----------- ---------- ----------- ----------
Total assets........ $67,776,488 3,423,414 $51,856,209 2,876,220
=========== ========== =========== ==========
LIABILITIES AND SURPLUS:
Interest-bearing liabilities:
Deposits:
Savings accounts................ $ 9,761,525 $ 143,688 1.96 $10,533,387 $ 187,676 2.38%
Money market accounts........... 726,173 16,721 3.07 1,079,150 21,378 2.64
NOW accounts.................... 13,949,363 366,014 3.50 6,057,212 114,405 2.52
Certificates of deposit......... 28,220,100 1,084,841 5.13 21,024,630 837,625 5.31
----------- ---------- ----------- ----------
Total deposits.................. 52,657,160 1,611,263 4.08 38,694,378 1,161,084 4.00
FHLB advances...................... 5,093,622 181,189 4.74 5,100,382 296,815 7.76
----------- ---------- ----------- ----------
Total interest-bearing
liabilities................... 57,750,782 1,792,452 4.14 43,794,760 1,457,899 4.44
Non-interest-bearing demand checking
account............................ 4,056,220 2,534,371
Non-interest-bearing liabilities..... 795,545 628,756
----------- -----------
Total liabilities............... 62,602,548 46,957,887
Total surplus........................ 5,173,940 4,898,321
----------- -----------
Total liabilities and surplus...... $67,776,488 $51,856,209
=========== ===========
Net interest income.................. $ 1,630,962 $1,418,321
=========== ==========
Net interest income/interest
rate spread........................ 2.93% 3.47%
==== ====
Net interest margin as a percent of
interest-earning assets............ 3.38% 3.91
==== ====
Ratio of interest earning assets to
interest-bearing liabilities....... 111.46% 110.40%
====== ======
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
THE MASSACHUSETTS CO-OPERATIVE BANK
STATEMENT OF INCOME
FOR NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans.................... $2,973,981 $2,506,067
Interest and dividends on investments......... 381,625 264,974
Interest on short-term investments............ 20,367 68,950
Interest on Federal funds sold................ 47,442 36,229
------------ ------------
Total interest and dividend income.......... 3,423,414 2,876,220
INTEREST EXPENSE:
Interest on deposits.......................... 1,611,263 1,161,084
Interest on borrowed funds.................... 181,189 296,815
----------- -----------
Total interest expense...................... 1,792,452 1,457,899
---------- ----------
Net interest income............................. 1,630,962 1,418,321
Provision (credit) for possible loan losses..... 87,413 (30,000)
------------ -------------
Net interest income, after provision (credit)
for possible loan losses...................... 1,543,549 1,448,321
------------ -------------
OTHER INCOME:
Customer service fees......................... 118,215 136,742
Loan fees and gain on sale of loans and loan
servicing rights............................ 302,024 145,018
Net gain (loss) on sales of securities
available for sale.......................... 35,446 (4,240)
Co-operative Central Bank Share Insurance
Fund special dividend....................... -- --
Miscellaneous................................. 42,881 27,877
------------- -------------
Total other income.......................... 498,566 305,397
------------- -------------
OPERATING EXPENSES:
Salaries and employee benefits................ 965,132 786,807
Occupancy and equipment....................... 240,492 215,571
Data processing............................... 110,566 100,488
Foreclosed real estate, net................... -- (26,253)
Other general and administrative.............. 426,319 318,705
------------- -------------
Total operating expenses.................... 1,742,508 1,395,318
------------- -------------
Income before income tax provision.............. 299,607 358,400
Income tax provision............................ 88,684 106,087
------------- -------------
Net income...................................... 210,923 252,313
------------- -------------
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized gains (losses) on securities:
Unrealized holding gains (loss) arising
during the period......................... (5,430) (51,350)
Less: reclassification adjustment for (gains)
losses included in net income............. (21,268) 2,544
------------- -------------
Other comprehensive income (loss), net of tax... (26,698) 53,894
------------- -------------
Comprehensive income............................ $ 184,225 $ 306,207
============= =============
</TABLE>
