<PAGE> 1
As filed with the Securities and Exchange Commission on October 16, 1998
Registration No. 333-62067
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
COMMUNITY SAVINGS BANKSHARES, INC.
(Exact name of registrant as specified in its articles of incorporation)
----------------
DELAWARE 6711 (BEING APPLIED FOR)
------------------------- ------------------ --------------------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or organization) Code Number)
660 U.S. Highway One
North Palm Beach, Florida 33408
(561) 881-4800
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
James B. Pittard, Jr.
President and Chief Executive Officer
660 U.S. Highway One
North Palm Beach, Florida 33408
(Name, address, including zip code,
and telephone number, including area code, of agent for service)
Copy to:
Raymond A. Tiernan, Esq.
Philip R. Bevan, Esq.
Cristin M. Zeisler, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
12th Floor
Washington, D.C. 20005
-----------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ].
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
<TABLE>
<CAPTION>
====================================================================================================
AMOUNT
TITLE OF EACH CLASS OF TO BE PURCHASE PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
====================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value
per share....................... 17,192,500 shares $10.00 $171,925,000(1) $50,718(1)
====================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee which
has been previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
COMMUNITY SAVINGS BANKSHARES, INC.
(Proposed Holding Company for Community Savings, F. A.)
Minimum of 9,392,500 and Maximum of 12,707,500 Shares
of Common Stock, Consisting of a Minimum of 4,871,209 and
Maximum of 6,590,357 Shares of Conversion Stock
and a Minimum of 4,521,291 and Maximum of 6,117,143 Exchange Shares
Community Savings Bankshares, Inc. (the "Company"), a Delaware
corporation, is offering shares of its common stock, par value $1.00 per share
(the "Common Stock"), in connection with the conversion and reorganization of
Community Savings, F. A. (the "Association") from the two-tier mutual holding
company structure to the stock holding company structure. The Association is
currently a wholly owned subsidiary of Community Savings Bankshares, Inc., a
federal corporation (the "Mid-Tier Holding Company"), which is the wholly owned
subsidiary of ComFed, M. H. C. (the "MHC"), both of which will be merged out of
existence, and the Association will become a wholly owned subsidiary of the
Company.
THE OFFERINGS. Pursuant to a Plan of Conversion and Agreement and Plan
of Reorganization (the "Plan") adopted by the Association, the Mid-Tier Holding
Company and the MHC, the Association will become a subsidiary of the Company
upon consummation of the transactions described herein (collectively, with the
Offerings (as hereinafter defined), the "Conversion"). Pursuant to the Plan,
nontransferable subscription rights to subscribe for up to 6,590,357 shares
(which may be increased to 7,578,961 shares under certain circumstances
described below) of Common Stock (the "Conversion Stock") have been granted to
certain depositors and borrowers of the Association as of specified record
dates, the Employee Stock Ownership Plan ("ESOP"), and directors, officers and
employees of the Association, subject to the limitations described herein (the
"Subscription Offering"). Commencing concurrently with the Subscription
Offering, and subject to the prior rights of holders of subscription rights, the
right of the Company, the MHC, the Mid-Tier Holding Company and the Association
(the "Primary Parties") to reject such orders in whole or in part and the other
limitations described herein, the Company is offering the shares of Conversion
Stock not subscribed for in the Subscription Offering, if any, for sale to
shareholders of the Mid-Tier Holding Company as of _________ __, 1998 other than
the MHC (the "Eligible Public Shareholders") (the "Eligible Public Shareholders
Offering"). After satisfying those with subscription rights and the Eligible
Public Shareholders, the Company is offering shares of Conversion Stock in a
community offering (the "Community Offering") to certain members of the general
public to whom a copy of this Prospectus is delivered by or on behalf of the
Company, with preference given to natural persons residing in the counties in
which the Association has an office. The Subscription Offering, the Community
Offering and the Eligible Public Shareholders Offering are collectively referred
to as the "Offerings."
(CONTINUED ON THE FOLLOWING PAGE)
PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 25 FOR A DISCUSSION
OF VARIOUS FACTORS TO BE CONSIDERED BY INVESTORS.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.
FOR INFORMATION ON HOW TO SUBSCRIBE FOR SHARES OF CONVERSION STOCK,
PLEASE CALL THE STOCK CENTER AT 1-888-642-0084.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, OR ANY OTHER FEDERAL
AGENCY OR STATE SECURITIES COMMISSION, NOR HAS ANY SUCH COMMISSION,
OFFICE OR AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Estimated
Underwriting
Subscription Fees and Other Estimated Net
Price(1) Expenses(2) Proceeds(3)
------------ -------------- -------------
<S> <C> <C> <C>
Minimum Per Share $ 10.00 $ .29 $ 9.71
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Midpoint Per Share $ 10.00 $ .25 $ 9.75
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Maximum Per Share $ 10.00 $ .23 $ 9.77
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Maximum Per Share, as adjusted $ 10.00 $ .21 $ 4.79
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Total Minimum(1) $48,712,090 $1,396,493 $47,315,597
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Total Midpoint(1) $57,306,590 $1,455,795 $55,850,795
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Total Maximum(1) $65,903,570 $1,515,115 $64,388,455
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Total Maximum, as adjusted(1)(4) $75,789,610 $1,583,328 $74,206,282
================================================================================
</TABLE>
(1) Based upon the minimum, midpoint, maximum and 15% above the maximum,
respectively, of the portion of the independent appraisal attributable
to the Conversion Stock.
(2) Consists of the estimated costs to be incurred in connection with the
Conversion, including estimated fixed expenses of $1,062,000 and
marketing fees to be paid to Friedman, Billings Ramsey & Co., Inc.
("FBR") in connection with the Offerings, which fees are estimated to
be a minimum of $334,493 and a maximum of $453,115. See "The
Conversion - Marketing Arrangements." The actual fees and expenses may
vary from the estimates. Such fees paid to FBR may be deemed to be
underwriting fees. See "Pro Forma Data."
(3) Actual net proceeds may vary substantially from estimated amounts
depending on the number of shares sold in the Offerings and other
factors. Does not give effect to purchases of shares of Conversion
Stock by the Company's ESOP, which initially will be deducted from the
Company's shareholders' equity. For the effects of such purchases, see
"Capitalization" and "Pro Forma Data."
(4) As adjusted to give effect to the sale of up to an additional 15% of
the shares that may be offered without resolicitation of subscribers or
any right of cancellation.
---------------------------------
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
The date of this Prospectus is _______________, 1998.
<PAGE> 3
THE EXCHANGE. As a result of the Conversion, each share of common
stock, par value $1.00 per share, of the Mid-Tier Holding Company (the "Mid-Tier
Holding Company Common Stock") held by the MHC, which currently holds 2,620,144
shares or 51.34% of the outstanding Mid-Tier Holding Company Common Stock, will
be cancelled and each share of Mid-Tier Holding Company Common Stock as of the
date hereof, held by Shareholders other than the MHC (the "Public Mid-Tier
Holding Company Shares") will be converted into shares of Common Stock (the
"Exchange Shares") pursuant to a ratio (the "Exchange Ratio") that will result
in the holders of such shares (the "Public Shareholders") owning in the
aggregate approximately the same percentage of the Company as they owned of the
Mid-Tier Holding Company, before giving effect to (a) the payment of cash in
lieu of fractional Exchange Shares or (b) any shares of Common Stock purchased
by such shareholders in the Offerings described herein or the ESOP (the
"Exchange"). As discussed under "Independent Valuation" below and herein, the
final Exchange Ratio will be determined based on the Public Shareholders'
ownership interest and not on the market value of the Public Mid-Tier Holding
Company Shares.
The Primary Parties have engaged FBR to consult with and advise them in
the Conversion, and FBR has agreed to use its best efforts to solicit
subscriptions and purchase orders for shares of Conversion Stock in the
Offerings. FBR is not obligated to take or purchase any shares of Conversion
Stock in the Offerings. See "The Conversion - Marketing Arrangements."
THE SUBSCRIPTION OFFERING WILL TERMINATE AT NOON, EASTERN TIME, ON
_______, 1998 (THE "EXPIRATION DATE"), UNLESS EXTENDED WITH APPROVAL OF THE
OFFICE OF THRIFT SUPERVISION ("OTS"), IF NECESSARY. THE ELIGIBLE PUBLIC
SHAREHOLDERS OFFERING AND THE COMMUNITY OFFERING ARE EXPECTED TO TERMINATE AT
THE SAME TIME AS THE SUBSCRIPTION OFFERING. THE ELIGIBLE PUBLIC SHAREHOLDERS
OFFERING AND THE COMMUNITY OFFERING MUST BE COMPLETED WITHIN 45 DAYS AFTER THE
CLOSE OF THE SUBSCRIPTION OFFERING, OR ________, 1998, UNLESS EXTENDED FOR A
MAXIMUM OF 90 DAYS AT A TIME WITH THE APPROVAL OF THE OTS, IF NECESSARY, EXCEPT
THAT THE EXTENSIONS MAY NOT GO BEYOND ______, 2000. Orders submitted are
irrevocable until the completion of the Conversion; provided that, if the
Conversion is not completed within the 45-day period referred to above, unless
such period has been extended with the consent of the OTS, if necessary, all
subscribers will have their funds returned promptly with interest, and all
withdrawal authorizations will be canceled. If the Offerings are extended beyond
________, 1998, all subscribers will be given the opportunity to modify or
cancel their orders and subscribers who do not affirmatively elect to continue
with an order will have their funds returned promptly with interest (and any
withdrawal authorizations will be canceled). See "The Conversion - The Offerings
- - Subscription Offering."
INDEPENDENT VALUATION. FinPro, Inc. ("FinPro") has prepared an
independent appraisal, which states that the estimated pro forma market value of
the Common Stock was $110,500,000 as of October 5, 1998 (the "Appraisal"). The
Appraisal was multiplied by the MHC's adjusted percentage interest in the
Mid-Tier Holding Company to determine a midpoint ($57,306,590), and the minimum
and maximum range were set at 15% below and above the midpoint, respectively,
resulting in a range of $48,712,090 to $65,903,570 for the Conversion Stock (the
"Estimated Valuation Range").
Based upon the Estimated Valuation Range, the Exchange Ratio is
expected to range from 1.8203 Exchange Shares to 2.4628 Exchange Shares for each
share of the Mid-Tier Holding Company Common Stock outstanding (other than those
held by the MHC, which will be canceled). Accordingly, the value of the Exchange
Shares is expected to range from $45,212,910 to $61,171,430, or between
4,521,291 and 6,117,143 Exchange Shares. The Estimated Valuation Range may be
increased or decreased to reflect changes in market and economic conditions
prior to completion of the Conversion, and under certain circumstances specified
herein subscribers will be resolicited and given the right to modify or cancel
their orders. See "The Conversion - Stock Pricing, Exchange Ratio and Number of
Shares to be Issued."
PURCHASE LIMITATIONS. The Plan sets forth various purchase limitations
which are applicable in the Offerings. See "The Conversion - The Offerings -
Subscription Offering," "Eligible Public Shareholders Offering,"- Community
Offering," and "- Limitations on Conversion Stock Purchases."
2
<PAGE> 4
RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS AND SHARES. No person
may transfer or enter into any agreement or understanding to transfer the legal
or beneficial ownership of the subscription rights issued under the Plan or the
shares of Common Stock to be issued upon their exercise. Each person exercising
subscription rights will be required to certify that a purchase of Common Stock
is solely for such purchaser's own account and that there is no agreement or
understanding regarding the sale or transfer of such shares. See "The Conversion
- - Restrictions on Transfer of Subscription Rights and Shares." The Primary
Parties will pursue any and all legal and equitable remedies in the event they
become aware of the transfer of subscription rights and will not honor orders
known by them to involve the transfer of such rights.
MARKET FOR COMMON STOCK. The Mid-Tier Holding Company Common Stock is
currently quoted on The Nasdaq Stock Market under the symbol "CMSV." The Company
has applied to The Nasdaq Stock Market to have the Common Stock quoted on The
Nasdaq Stock Market under the same symbol upon completion of the Conversion. See
"Market for Common Stock."
REQUIRED APPROVALS. The consummation of the Conversion is subject to
the receipt of various regulatory approvals and the approval of the members of
the MHC and the shareholders of the Mid-Tier Holding Company in the manner set
forth herein.
3
<PAGE> 5
[MAP TO BE INSERTED WHICH SHOWS THE STATE OF FLORIDA,
WITH AN ENLARGEMENT OF INDIAN RIVER, ST. LUCIE, BREVARD, MARTIN
AND PALM BEACH COUNTIES SHOWING THE CITIES IN WHICH OFFICES ARE LOCATED.]
[GRAPHIC OMITTED IN EDGAR COPY.]
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
4
<PAGE> 6
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SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION REGARDING THE COMPANY, THE MID-TIER HOLDING COMPANY, THE ASSOCIATION
AND THE MHC AND THE CONSOLIDATED FINANCIAL STATEMENTS OF THE MID-TIER HOLDING
COMPANY APPEARING ELSEWHERE IN THIS PROSPECTUS. THIS PROSPECTUS CONTAINS CERTAIN
FORWARD LOOKING STATEMENTS CONSISTING OF ESTIMATES WITH RESPECT TO THE FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY, THE MID-TIER
HOLDING COMPANY AND THE ASSOCIATION. PROSPECTIVE INVESTORS ARE CAUTIONED THAT
SUCH FORWARD LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE
SUBJECT TO VARIOUS FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THESE ESTIMATES. THESE FACTORS INCLUDE CHANGES IN GENERAL ECONOMIC AND
MARKET CONDITIONS, AND THE DEVELOPMENT OF AN INTEREST RATE ENVIRONMENT THAT
ADVERSELY AFFECTS THE INTEREST RATE SPREAD OR OTHER INCOME ANTICIPATED FROM THE
COMPANY'S AND THE ASSOCIATION'S OPERATIONS AND INVESTMENTS. SEE "RISK FACTORS"
FOR A DISCUSSION OF OTHER FACTORS THAT MIGHT CAUSE ACTUAL RESULTS TO DIFFER FROM
SUCH ESTIMATES.
COMMUNITY SAVINGS BANKSHARES, INC.
Community Savings Bankshares, Inc., is a Delaware corporation organized
in August 1998 by the Association for the purpose of holding all of the capital
stock of the Association and in order to facilitate the Conversion. Upon
completion of the Conversion, the only significant assets of the Company will be
all of the outstanding Association common stock, $1.00 par value per share
("Association Common Stock"), the note evidencing the Company's loan to the ESOP
and the portion of the net proceeds from the Offerings retained by the Company.
The business of the Company will initially consist of the business of the
Association. See "Business" and "Regulation - The Company."
THE MID-TIER HOLDING COMPANY
The Mid-Tier Holding Company is a federally chartered mid-tier stock
holding company organized in August 1997 in order to effect the reorganization
of the Association and the MHC into a two-tier mutual holding company structure
("Mid-Tier Reorganization"). The only significant asset of the Mid-Tier Holding
Company is its investment in the Association. The Mid-Tier Holding Company is
majority owned by the MHC, a federally chartered mutual holding company.
Effective September 30,1997, the Mid-Tier Holding Company acquired all of the
issued and outstanding Association Common Stock in connection with the Mid-Tier
Reorganization. At that time, each share of Association Common Stock was
converted into one share of Mid-Tier Holding Company Common Stock. As of the
date hereof, the MHC owned 2,620,144 shares (or 51.34%) of Mid-Tier Holding
Company Common Stock with the remaining 2,483,816 shares (or 48.66%) being owned
by the Public Shareholders. The Mid-Tier Reorganization was accounted for at
historical cost in a manner similar to a pooling of interests. Therefore, all
financial information has been presented as if the Mid-Tier Holding Company had
been in existence for all periods included in this Prospectus. At June 30, 1998,
the Mid-Tier Holding Company had total assets of $765.5 million, total loans of
$527.4 million, total deposits of $574.4 million and total shareholders' equity
of $83.1 million.
Pursuant to the Conversion, the Mid-Tier Holding Company will convert
to a federal interim savings association and merge with and into the
Association, with the Association as the survivor. As a result, the Mid-Tier
Holding Company will cease to exist.
COMMUNITY SAVINGS, F. A.
The Association, founded in 1955, is a federally chartered savings and
loan association headquartered in North Palm Beach, Florida. The Association's
deposits are federally insured by the Federal Deposit Insurance Corporation
("FDIC") through the Savings Association Insurance Fund ("SAIF"). The
Association has been a member of the Federal Home Loan Bank of Atlanta ("FHLB")
since 1955. The Association is regulated by the OTS. On October 24, 1994, the
Association completed a reorganization into a federally chartered mutual holding
company (the "MHC Reorganization"). As part of the MHC Reorganization, the
Association organized a new federally chartered stock savings association and
transferred substantially all of its assets and liabilities to the stock savings
association in exchange for a majority of the common stock of the stock savings
association. In connection with the MHC
5
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<PAGE> 7
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Reorganization, the Association issued 2,379,856 shares of Association Common
Stock to the public resulting in net proceeds of $34.0 million. The remaining
2,620,144 shares of Association Common Stock were issued to the MHC.
The Association is a community-oriented financial institution engaged
primarily in the business of attracting deposits from the general public in the
Association's market area and using such funds, together with other borrowings,
to invest primarily in various residential real estate loans, commercial
business loans and mortgage-related securities as well as United States
Government and agency securities, mutual funds and corporate debt securities. At
June 30, 1998, the Association's total assets were $765.3 million, including
$527.4 million of loans and $154.6 million of securities (including securities
available-for-sale). The Association's current business strategy is to operate
as a well-capitalized, profitable and independent community-oriented savings
and loan association dedicated to providing quality retail financial products
and personalized customer service. The Association has implemented this strategy
by emphasizing retail deposits as its primary source of funds and investing a
substantial part of such funds in locally-originated residential first mortgage
loans, in mortgage-related securities and in other liquid investment securities.
Specifically, the Association's business strategy incorporates the following
elements: (i) operating as a community-oriented financial institution and
maintaining a strong core customer base; (ii) emphasizing traditional lending
and investment activities; (iii) maintaining asset quality; (iv) maintaining a
strong retail deposit base; (v) managing interest rate risk while achieving
desirable levels of profitability; and (vi) pursuing controlled growth.
Highlights of the Association's business strategy, include the following:
o COMMUNITY-ORIENTED INSTITUTION. The Association is committed to meeting
the financial needs of its customers in Palm Beach, Martin, St. Lucie,
Indian River and Brevard counties in Florida, the communities in which
it operates, through its branch network of 21 full-service branch
offices and two loan production offices. Management believes that the
Association can be more effective in servicing its customers than many
of its non-local competitors because of its ability to quickly and
effectively provide senior management responses to customer needs and
inquiries and its extensive knowledge of the local market.
o EMPHASIS ON TRADITIONAL LENDING AND INVESTMENT ACTIVITIES. Since its
inception in 1955, the Association has emphasized residential real
estate financing and anticipates a continued commitment to financing
the purchase or improvement of residential real estate in its market
area. As of June 30, 1998, 75.6% of the Association's total loan
portfolio consisted of one- to four-family residential mortgage loans.
To supplement local mortgage loan originations and purchases, the
Association invests in investment securities as well as (i) mutual
funds which invest primarily in mortgage-backed and related securities
and U.S. Government and agency securities and (ii) mortgage-backed and
related securities that are primarily issued or guaranteed by the U.S.
Government or agencies thereof. Mortgage-backed and related securities
and investment securities (including mutual funds) represented 10.9%
and 13.8% of total assets, respectively. Investing in single-family
residential loans and various types of mortgage-backed and related
securities and U.S. Government agency securities is generally
considered to involve less risk than other types of investments
including commercial and multi-family residential real estate loans.
o MAINTAIN ASSET QUALITY. Management believes that high asset quality is
a key to long-term financial success and, as a result, the investments
which are emphasized by the Association are intended to maintain a high
level of asset quality and moderate credit risk. At June 30, 1998, the
Association's non-performing assets (which include loans past due 90
days or more and real estate acquired or deemed acquired by
foreclosure) amounted to $2.1 million, or 0.27%, of total assets. At
June 30, 1998, the Association's allowance for loan losses amounted to
$2.8 million, or 202.6% of the Association's non-performing loans.
o EMPHASIS ON RETAIL DEPOSITS. The Association's liability strategy
emphasizes retail deposits drawn from the 21 full-service offices in
its market area rather than institutional or wholesale deposits. At
June 30, 1998, 38.5% of the Association's deposit base of $574.4
million consisted of core deposits, which included non-interest-bearing
demand accounts, NOW accounts, passbook and statement savings and money
market deposit accounts.
6
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<PAGE> 8
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o INTEREST RATE RISK MANAGEMENT. The Association has sought to manage
interest rate risk by investing a substantial portion of its assets in
adjustable-rate mortgage ("ARM") loans and other adjustable-rate loans,
in short- and medium-term United States Government and agency
securities and investment securities, in mutual funds that invest in
adjustable-rate securities, and in short- and medium-term fixed-rate
mortgage-backed securities. Of the Association's total investment in
loans, mortgage-backed and related securities and investment securities
at June 30, 1998, $ 331.4 million, or 46.2%, had adjustable interest
rates. Management seeks to manage the Association's interest rate risk
exposure by monitoring the levels of interest rate sensitive assets and
liabilities while maintaining an acceptable interest rate spread. At
June 30, 1998, total interest-earning assets repricing or maturing
within one year exceeded total interest-bearing liabilities maturing or
repricing in the same period by $3.4 million, representing a positive
0.44% cumulative one-year gap ratio.
o CONTROLLED GROWTH. The Association has sought to grow its asset base
carefully primarily through expansion of its banking franchise combined
with emphasizing increased locally generated loan originations. To that
end, the Association's total assets have grown $242.2 million or 46.3%
from $523.2 million at September 30, 1993 to $765.5 million at June 30,
1998.
The Association's executive office is located at 660 U.S. Highway One,
North Palm Beach, Florida, and its telephone number is (561) 881-4800.
COMFED, M. H. C.
ComFed, M. H. C. is a federally chartered mutual holding company
chartered on October 24, 1994 in connection with the MHC Reorganization. The
MHC's primary asset is 2,620,144 shares of Mid-Tier Holding Company Common
Stock, which represents 51.34% of the shares of Mid-Tier Holding Company Common
Stock outstanding as of the date of this Prospectus. The MHC's only other asset
consists of cash totalling approximately $206,000 at June 30, 1998 (which will
become an asset of the Association upon consummation of the Conversion). As part
of the Conversion, the MHC will convert from mutual form to a federal interim
stock savings institution and simultaneously merge with and into the
Association, with the Association being the surviving entity.
THE CONVERSION
On July 29, 1998, the Boards of Directors of the Association, the
Mid-Tier Holding Company and the MHC adopted the Plan, and on August 6, 1998 the
Association incorporated the Company under Delaware law as a first-tier wholly
owned subsidiary of the Association. Pursuant to the Plan, (i) the Mid-Tier
Holding Company will convert to an interim federal savings association and
simultaneously merge with and into the Association, (ii) the MHC will convert to
an interim federal stock savings institution and simultaneously merge with and
into the Association, pursuant to which the MHC will cease to exist and the
2,620,144 shares of Mid-Tier Holding Company Common Stock held by the MHC will
be canceled, and (iii) an interim savings institution ("Interim") to be formed
as a wholly owned subsidiary of the Company solely for such purpose will then
merge with and into the Association. As a result of the merger of Interim with
and into the Association, the Association will become a wholly owned subsidiary
of the Company and the 2,483,816 outstanding Public Mid-Tier Holding Company
Shares will be converted into Exchange Shares pursuant to the Exchange Ratio,
which will result in the holders of such shares owning in the aggregate
approximately the same percentage of the Common Stock to be outstanding upon
completion of the Conversion (i.e., the Conversion Stock and the Exchange
Shares) as the percentage of Mid-Tier Holding Company Common Stock owned by them
in the aggregate immediately prior to consummation of the Conversion (as
adjusted to reflect the excess dividends previously waived by the MHC), before
giving effect to (a) the payment of cash in lieu of issuing fractional Exchange
Shares and (b) any shares of Conversion Stock purchased by the Public
Shareholders in the Offerings. See "The Conversion - Stock Pricing, Exchange
Ratio and Number of Shares to be Issued."
Because the MHC has previously waived dividends declared by the
Mid-Tier Holding Company (and dividends declared by the Association prior to the
Mid-Tier Reorganization) and paid to the Public Shareholders, for purposes of
the Conversion the respective percentage ownership interests of the MHC and the
Public Shareholders were adjusted
7
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<PAGE> 9
to reflect the excess waived dividends. As a result, the MHC's percentage
interest increased from 51.34% to 51.86%, and the aggregate percentage interest
of the Public Shareholders decreased from 48.66% to 48.14%. These ownership
interests will be adjusted immediately prior to consummation of the Conversion
to reflect excess additional dividends waived by the MHC subsequent to the date
hereof in accordance with current regulatory policies.
In addition to the Exchange Shares to be issued to the Public
Shareholders pursuant to the Exchange, the Company is offering shares of
Conversion Stock in the Offerings as part of the Conversion. See "-The
Offerings" below and "The Conversion - The Offerings."
The following diagram outlines the current organizational structure of
the parties' ownership interests:
CURRENT ORGANIZATIONAL STRUCTURE
----------------------- ---------------------------------
| ComFed, M. H. C. | | Holders of Public Mid-Tier |
| | | Holding Company Shares |
----------------------- ---------------------------------
| |
51.34% | | 48.66%
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| Mid-Tier Holding Company |
---------------------------------------------------------
|
| 100%
---------------------------------------------------------
| Community Savings, F. A. |
---------------------------------------------------------
The following diagram reflects the resulting structure of the parties
upon consummation of the Conversion, including (i) the merger of the MHC and the
Mid-Tier Holding Company (following their conversion into interim federal stock
savings associations) with and into the Association, (ii) the merger of Interim
with and into the Association, pursuant to which the Public Mid-Tier Holding
Company Shares will be converted into Exchange Shares, and (iii) the offering of
Conversion Stock. The aggregate percentage interest of the holders of Public
Mid-Tier Holding Company Shares was decreased from 48.66% to 48.14% to reflect
the dividends that were paid previously to the Public Shareholders but waived by
the MHC. The diagram assumes that there are no fractional Exchange Shares and
does not give effect to (i) purchases of Conversion Stock by holders of Public
Mid-Tier Holding Company Shares or (ii) the exercise of outstanding stock
options under the Mid-Tier Holding Company's 1995 Stock Option Plan.
8
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<PAGE> 10
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STRUCTURE AFTER THE CONVERSION
------------------------------------ ------------------------------
| | | Holders of Public Mid-Tier |
| Purchasers of Conversion Stock | | Holding Company Shares |
------------------------------------ ------------------------------
51.86% | | 48.14%
| |
---------------------------------------------------------
| Community Savings Bankshares, Inc. |
---------------------------------------------------------
|
|
| 100%
---------------------------------------------------------
| Community Savings, F. A. |
---------------------------------------------------------
Pursuant to OTS regulations, consummation of the Conversion is
conditioned upon the approval of the Plan by the OTS, as well as (1) the
approval of the holders of at least a majority of the total number of votes
eligible to be cast by the members of the MHC (who are depositors and certain
borrowers of the Association) ("Members") as of the close of business on ____
__, 1998 (the "Voting Record Date") at a special meeting of Members called for
the purpose of submitting the Plan for approval (the "Members' Meeting"), and
(2) the approval of the holders of at least two-thirds of the outstanding shares
of Mid-Tier Holding Company Common Stock held by the MHC and the Public
Shareholders (collectively, the "Shareholders"), as of the Voting Record Date at
a special meeting of Shareholders called for the purpose of considering the Plan
(the "Shareholders' Meeting"). The MHC intends to vote its shares of Mid-Tier
Holding Company Common Stock, which amount to 51.34% of the outstanding shares,
in favor of the Plan at the Shareholders' Meeting. In addition, the Primary
Parties have conditioned the consummation of the Conversion on the approval of
the Plan by at least a majority of the votes cast, in person or by proxy, by the
Public Shareholders at the Shareholders' Meeting. The consummation of the
Conversion is also contingent on the receipt of various approvals of the OTS.
PURPOSES OF THE CONVERSION
One of the principal purposes of the Conversion is to structure the
Company in the stock form, a form used by most other holding companies of
savings institutions and commercial banks and most other business entities. The
increase in capital resulting from the Offerings will support the future
expansion of operations of the Association, as well as possible diversification
into other banking-related businesses and for other business or investment
purposes. Although there are no current arrangements, understandings or
agreements regarding 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 additional opportunities for such expansion
that may arise in the future.
If the Association had undertaken a standard conversion involving the
formation of a stock holding company in 1994, applicable OTS regulations would
have required almost twice the amount of common stock to be sold than the $34.0
million of net proceeds raised in the MHC Reorganization. Management of the
Association believed at such time that its ability to generate sufficient loan
volume, particularly in its market area, would have made it difficult to
prudently invest in a timely manner the significantly larger amount of capital
that would have been raised in a standard conversion, when compared to the net
proceeds raised in connection with the MHC Reorganization. A standard conversion
in 1994 also would have immediately eliminated all aspects of the mutual form of
organization. The
9
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<PAGE> 11
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Association conducted the Mid-Tier Reorganization primarily in order to be able
to conduct stock repurchases without incurring adverse tax effects. At all
times subsequent to the completion of the Mid-Tier Reorganization and the
Boards' determination to proceed with the Conversion, the level of the market
price of the Mid-Tier Holding Company Common Stock was in excess of the level
at which the Board believed stock repurchases would be deemed a prudent and
appropriate use of the Mid-Tier Holding Company's resources.
The Offerings will further increase the capital of the Company and the
Association and provide them with additional flexibility to grow and increase
net income. Furthermore, the Conversion will enhance the Company's and the
Association's ability to access the capital markets.
In light of the foregoing, the Boards of Directors of the Association,
the Mid-Tier Holding Company and the MHC believe that the Conversion is in the
best interests of such companies and their respective Shareholders and Members.
See "The Conversion."
THE OFFERINGS
Pursuant to the Plan and in connection with the Conversion, the Company
is offering up to 6,590,357 shares of Conversion Stock in the Offerings, which
may be increased to up to 7,578,961 shares of Conversion Stock if the Estimated
Valuation Range is increased by up to 15%. Conversion Stock is first being
offered in the Subscription Offering with nontransferable subscription rights
being granted, in the following order of priority, to (i) depositors of the
Association with account balances of $50.00 or more as of the close of business
on June 30, 1997 ("Eligible Account Holders"); (ii) the ESOP; (iii) depositors
of the Association with account balances of $50.00 or more as of the close of
business on September 30, 1998 (other than Eligible Account Holders)
("Supplemental Eligible Account Holders"); (iv) depositors and certain borrowers
of the Association as of the Voting Record Date, ____ __, 1998 (other than
Eligible Account Holders and Supplemental Eligible Account Holders) ("Other
Members"); and (v) directors, officers and employees of the Association.
Subscription rights will expire if not exercised by noon, Eastern Time, on
______ __, 1998, unless extended.
Subject to the prior rights of holders of subscription rights,
Conversion Stock not subscribed for in the Subscription Offering is being
offered first to Eligible Public Shareholders and then in the Community Offering
to certain members of the general public to whom a copy of this Prospectus and a
stock order form and certification ("Order Form") are delivered, with preference
given to natural persons residing in Palm Beach, Martin, St. Lucie, Indian River
and Brevard Counties, Florida. The Primary Parties reserve the absolute right to
reject or accept any orders submitted in the Eligible Public Shareholder
Offering and the Community Offering , in whole or in part, either at the time of
receipt of an order or as soon as practicable following the Expiration Date. The
closing of all shares of Common Stock sold in the Offerings will occur
simultaneously and all shares will be sold at a uniform price of $10.00 per
share ("Purchase Price").
The Primary Parties have retained FBR as a consultant and advisor in
connection with the Offerings and to assist in soliciting subscriptions in the
Offerings. See "The Conversion - The Offerings - Subscription Offering,"
"-Eligible Public Shareholders Offering," "-Community Offering," and "-Marketing
Arrangements."
PROSPECTUS DELIVERY AND PROCEDURE FOR PURCHASING SHARES
To ensure that each purchaser receives a Prospectus at least 48 hours
prior to the Expiration Date in accordance with Rule 15c2-8 of the Exchange Act,
no Prospectus will be mailed any later than five days prior to such date or hand
delivered any later than two days prior to such date. Execution of the Order
Form will confirm receipt or delivery of the Prospectus in accordance with Rule
15c2-8. Order Forms will only be distributed with a Prospectus. Material related
to the Conversion will only be available through the Stock Center.
To purchase shares in the Offerings, an executed original Order Form
and the required payment for each share subscribed for, or with appropriate
authorization for withdrawal from a deposit account at the Association (which
may be given by completing the appropriate blanks on the Order Form), must be
received by the Association at any of its offices by 12 noon, Eastern Time, on ,
1998. Order Forms which are not received by such time or are executed
defectively or are received without full payment (or appropriate withdrawal
instructions) are not required to be accepted. The Association is not required
to accept orders submitted on facsimilied Order Forms. The Primary Parties have
the right to waive or permit the correction of incomplete or improperly executed
forms, but do not
10
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represent that they will do so. The waiver of an irregularity on an Order Form,
the allowance by the Primary Parties of a correction of an incomplete or
improperly executed Order Form, or the acceptance of an order after 12 noon on
the Expiration Date in no way obligates the Primary Parties to waive an
irregularity, allow a correction, or accept an order with respect to any other
Order Form. The interpretation by the Primary Parties of the acceptability of an
Order Form will be final. Once received, an executed Order Form may not be
modified, amended or rescinded without the consent of the Primary Parties,
unless the Offerings have not been completed within 45 days after the end of the
Subscription, Eligible Public Shareholders and Community Offerings, unless such
period has been extended, with the approval of the OTS, if required.
In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priority, depositors as of the close of business on the Eligibility
Record Date (June 30, 1997), the Supplemental Eligibility Record Date (September
30, 1998) and the Voting Record Date ( , 1998) must list on the Order Form all
accounts in which they have an ownership interest at the applicable eligibility
date, giving all names in each account and the account numbers. Members
qualifying for a stock purchase priority who add individuals with a lower, or
no, stock purchase priority as subscribers on an Order Form will have their
stock purchase priority reduced or eliminated based on the lower priority.
Payment for subscriptions and orders may be made (i) in cash if
delivered in person at any office of the Association, (ii) by check or money
order, or (iii) by authorization of withdrawal from deposit accounts maintained
with the Association. The Primary Parties may in their sole discretion elect not
to accept payment for shares of Conversion Stock by wired funds and there shall
be no liability for failure to accept such payment. Funds will be deposited in a
segregated account at the Association and interest will be paid on funds made by
cash, check or money order at the Association's passbook rate of interest from
the date payment is received until completion or termination of the Conversion.
If payment is made by authorization of withdrawal from deposit accounts, the
funds authorized to be withdrawn from an Association deposit account may
continue to accrue interest at the contractual rates until completion or
termination of the Conversion, but a hold will be placed on such funds, thereby
making them unavailable to the depositor until completion or termination of the
Conversion.
If a subscriber authorizes the Association to withdraw the aggregate
amount of the purchase price from a deposit account, the Association will do so
as of the effective date of the Conversion. The Association may waive any
applicable penalties for early withdrawal from certificate accounts. If the
remaining balance in a certificate account is reduced below the applicable
minimum balance requirement at the time that the funds actually are transferred
under the authorization, the certificate will be canceled at the time of the
withdrawal, without penalty, and the remaining balance will earn interest at the
passbook rate.
The ESOP will not be required to pay for the shares subscribed for at
the time it subscribes, but rather may pay for such shares of Conversion Stock
subscribed for upon consummation of the Offerings, provided that there is in
force from the time of its subscription until such time, a loan commitment from
an unrelated financial institution or the Company to lend to the ESOP, at such
time, the aggregate Purchase Price of the shares for which it subscribed.
A depositor interested in using his or her individual retirement
account ("IRA ") funds to purchase Conversion Stock must do so through a
self-directed IRA. Depositors interested in using funds in an Association IRA to
purchase Conversion Stock should contact the Stock Center as soon as possible so
that the necessary forms may be forwarded for execution prior to the Expiration
Date.
The Primary Parties have retained FBR as consultant and advisor in
connection with the Offerings and to assist in soliciting subscriptions in the
Offerings on a best efforts basis. See "The Conversion - The Offerings" and
"-Marketing Arrangements."
11
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RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS
No person may transfer or enter into any agreement or understanding to
transfer the legal or beneficial ownership of the subscription rights issued
under the Plan or the shares of Common Stock to be issued upon their exercise.
Each person exercising subscription rights will be required to certify that the
purchase of Common Stock is solely for the purchaser's own account and that
there is no agreement or understanding regarding the sale or transfer of such
shares. See "The Conversion - Restrictions on Transfer of Subscription Rights
and Shares." SUBSCRIPTION RIGHTS ARE NONTRANSFERABLE AND PERSONS FOUND TO BE
ATTEMPTING TO TRANSFER SUBSCRIPTION RIGHTS WILL BE SUBJECT TO THE FORFEITURE OF
SUCH RIGHTS AND POSSIBLE FURTHER SANCTIONS AND PENALTIES IMPOSED BY THE OTS. The
Company and the Association intend to pursue any and all legal and equitable
remedies in the event they become aware of the transfer of subscription rights
and will not honor orders known by them to involve the transfer of such rights.
PURCHASE LIMITATIONS
With the exception of the ESOP, which intends to purchase up to an
aggregate of 8% of the number of shares of Conversion Stock to be issued in the
Offerings, no Eligible Account Holder, Supplemental Eligible Account Holder,
Other Member, or director, officer or employee may purchase in their capacity as
such in the Subscription Offering more than $1,000,000 of Conversion Stock
(1,000,000 shares of Conversion Stock); no person may purchase in each of the
Community Offering or the Eligible Public Shareholders Offering more than
$1,000,000 of Conversion Stock; and no person, together with associates of or
persons acting in concert with such person, may purchase in the Offerings more
than the number of shares of Conversion Stock that when combined with Exchange
Shares received by such person, together with associates of and persons acting
in concert with such person, aggregate more than 3% of the total number of
shares of Common Stock issued in the Conversion (281,775 shares and 381,225
shares at the minimum and maximum of the Estimated Valuation Range,
respectively). At any time during the Offerings, and without further approval by
the Members or the Shareholders, the Primary Parties may in their sole
discretion decrease or increase any of the purchase limitations up to 5% of the
Common Stock issued in the Conversion, subject to receipt of required regulatory
approvals, if any. Under certain circumstances, certain subscribers who
subscribed for the maximum amount of Conversion Stock may be resolicited in the
event of such an increase. The Plan sets forth various purchase limitations
applicable to the Offerings. The minimum purchase is 25 shares. See "The
Conversion - Limitations on Conversion Stock Purchases." In the event of an
oversubscription, shares will be allocated in accordance with the Plan, as
described under "The Conversion - The Offerings - Subscription Offering,"
"-Eligible Public Shareholders Offering" and "-Community Offering." BECAUSE THE
OVERALL PURCHASE LIMITATION CONTAINED IN THE PLAN OF CONVERSION INCLUDES
EXCHANGE SHARES TO BE ISSUED TO PUBLIC SHAREHOLDERS FOR THEIR PUBLIC MID-TIER
HOLDING COMPANY SHARES, CERTAIN HOLDERS OF PUBLIC MID-TIER HOLDING COMPANY
SHARES MAY BE LIMITED IN THEIR ABILITY TO PURCHASE CONVERSION STOCK IN THE
OFFERINGS. NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT AS OTHERWISE
REQUIRED BY THE OTS, PUBLIC SHAREHOLDERS WILL NOT HAVE TO SELL COMMON STOCK OR
BE LIMITED IN RECEIVING EXCHANGE SHARES EVEN IF THEIR OWNERSHIP OF COMMON STOCK
WHEN CONVERTED PURSUANT TO THE EXCHANGE RATIO WOULD EXCEED THE ABOVE LIMITATION.
The term "acting in concert" means (i) knowing participation in a joint
activity or interdependent conscious parallel action towards a common goal
whether or not pursuant to an express agreement; or (ii) a combination or
pooling of voting or other interests in the securities of an issuer for a common
purpose pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise. THE COMPANY AND THE ASSOCIATION
MAY PRESUME THAT CERTAIN PERSONS ARE ACTING IN CONCERT BASED UPON, AMONG OTHER
THINGS, JOINT ACCOUNT RELATIONSHIPS AND THE FACT THAT SUCH PERSONS HAVE FILED
JOINT SCHEDULE 13DS WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") WITH
RESPECT TO OTHER COMPANIES. The term "associate" of a person is defined in the
Plan to mean (i) any corporation or organization (other than the MHC, the
Mid-Tier Holding Company or the Association or a majority-owned subsidiary of
the Association or the Company) of which such person is a director, officer or
partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities; (ii) any trust or other estate in which such
person has a substantial beneficial interest or as to which such person serves
as trustee or in a similar fiduciary capacity (excluding tax-qualified employee
benefit plans of the Company, the Mid-Tier Holding Company or the Association);
and (iii) any relative or spouse of such person, or any relative of such spouse,
who either has the same home as such person or who is a director or officer of
the Company or the Association or any of their
12
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subsidiaries. In addition, joint account relationships and common addresses will
be taken into account in applying the maximum purchase limitations.
STOCK PRICING, EXCHANGE RATIO AND NUMBER OF SHARES TO BE ISSUED IN THE
CONVERSION
Federal regulations require the aggregate purchase price of the
Conversion Stock to be consistent with FinPro's pro forma appraisal of the
Common Stock, which was $110,500,000 as of August 13, 1998. The holders of the
Public Mid-Tier Holding Company Shares will continue to hold the same aggregate
percentage ownership interest in the Company as they held in the Mid-Tier
Holding Company as adjusted to reflect the excess dividends waived by the MHC
and before giving effect to any shares of Common Stock purchased by the Mid-Tier
Holding Company's Shareholders in the Offerings, the exercise of any existing
options issued under the 1995 Stock Option Plan and the payment of cash in lieu
of issuing fractional Exchange Shares. As a result, the Appraisal was multiplied
by the MHC's adjusted percentage interest in the Mid-Tier Holding Company, which
corresponds with the amount of Conversion Stock to be sold in the Offerings
(I.E., 51.86%), to determine the midpoint of the Estimated Valuation Range,
which was $57,306,590. In accordance with OTS regulations, the minimum and
maximum of the Estimated Valuation Range were set at 15% below and above the
midpoint, respectively, resulting in an offering range for the Conversion Stock
of $48,712,090 to $65,903,570. The full text of the appraisal report of FinPro
describes the procedures followed, the assumptions made, limitations on the
review undertaken and matters considered. The appraisal report has been filed as
an exhibit to the Registration Statement and Application for Conversion of which
this Prospectus is a part, and is available in the manner set forth under
"Additional Information." THIS APPRAISAL OF THE CONVERSION STOCK IS NOT INTENDED
AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION OF ANY KIND AS TO THE
ADVISABILITY OF PURCHASING SUCH STOCK.
All shares of Conversion Stock will be sold at the Purchase Price of
$10.00 per share, which was established by the Boards of Directors of the
Primary Parties. The actual number of shares to be issued in the Offerings will
be determined by the Primary Parties based upon the final updated valuation of
the estimated pro forma market value of the Conversion Stock at the completion
of the Offerings. The number of shares of Conversion Stock to be issued is
expected to range from a minimum of 4,871,209 shares to a maximum of 6,590,357
shares. Subject to approval of the OTS, the Estimated Valuation Range may be
increased or decreased to reflect market and economic conditions prior to the
completion of the Offerings, and under such circumstances the Primary Parties
may increase or decrease the number of shares of Conversion Stock. No
resolicitation of subscribers will be made and subscribers will not be permitted
to modify or cancel their subscriptions unless (i) the gross proceeds from the
sale of the Conversion Stock are less than the minimum or more than 15% above
the maximum of the current Estimated Valuation Range or (ii) the Offerings are
extended beyond _______ __, 1998. Any increase or decrease in the number of
shares of Conversion Stock will result in a corresponding change in the number
of Exchange Shares, so that upon consummation of the Conversion, the Conversion
Stock and the Exchange Shares will represent approximately 51.86% and 48.14%,
respectively, of the Company's total outstanding shares (excluding cash in lieu
of fractional Exchange Shares). See "Pro Forma Data," "Risk Factors - Possible
Dilutive Effect of Issuance of Additional Shares" and "The Conversion - Stock
Pricing, Exchange Ratio and Number of Shares to be Issued."
Based on the 2,483,816 Public Mid-Tier Holding Company Shares
outstanding as of the date of this Prospectus, and assuming a minimum of
4,871,209 and a maximum of 6,590,357 shares of Conversion Stock are issued in
the Offerings, the Exchange Ratio is expected to range from approximately 1.8203
Exchange Shares to 2.4628 Exchange Shares for each Public Mid-Tier Holding
Company Share outstanding immediately prior to the consummation of the
Conversion. The Exchange Ratio will be affected if any stock options to purchase
shares of Mid-Tier Holding Company Common Stock are exercised after the date
hereof and prior to consummation of the Conversion. If any of such stock options
are outstanding immediately prior to consummation of the Conversion, they will
be converted into options to purchase shares of Common Stock, with the number of
shares subject to the option and the exercise price per share to be adjusted
based upon the Exchange Ratio so that the aggregate exercise price remains
unchanged, and with the duration of the option remaining unchanged. As of the
date hereof, there were options to purchase 214,350 shares of Mid-Tier Holding
Company Common Stock outstanding which had exercise prices ranging from $11.125
to $19.016
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per share. The Mid-Tier Holding Company has no plans to grant additional stock
options prior to the consummation of the Conversion.
The following table sets forth, based upon the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range, the
following: (i) the total number of shares of Conversion Stock and Exchange
Shares to be issued in the Conversion, (ii) the percentage of the total Common
Stock represented by the Conversion Stock and the Exchange Shares, and (iii) the
Exchange Ratio. The table assumes that there are no fractional Exchange Shares.
<TABLE>
<CAPTION>
Conversion Stock to Be Total Shares of
Issued(1) Exchange Shares to be Issued(1) Common Stock to
--------------------------- ------------------------------ be Exchange
Amount Percent Amount Percent Outstanding(1) Ratio(1)
------------ ------------ ----------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Minimum .............. 4,871,209 51.86% 4,521,291 48.14% 9,392,500 1.8203
Midpoint ............. 5,730,659 51.86 5,319,341 48.14 11,050,000 2.1416
Maximum .............. 6,590,357 51.86 6,117,143 48.14 12,707,500 2.4628
15% above maximum .... 7,578,961 51.86 7,034,664 48.14 14,613,625 2.8322
</TABLE>
- ----------
(1) Assumes that outstanding options to purchase 214,350 shares of Mid-Tier
Holding Company Common Stock as of the date of this Prospectus are not
exercised prior to consummation of the Conversion. The Mid-Tier Holding
Company's and the Association's directors and executive officers
currently do not expect to exercise their stock options prior to
consummation of the Conversion.
The final Exchange Ratio will be determined based upon the number of
shares issued in the Offerings in order to maintain the Public Shareholders'
adjusted 48.14% ownership interest in the Mid-Tier Holding Company and will not
be based upon the market value of the Public Mid-Tier Holding Company Shares. As
an example of the Exchange Ratio, at the minimum, midpoint and maximum of the
Estimated Valuation Range, 1,000 Public Mid-Tier Holding Company Shares will be
exchanged for 1,820, 2,142 and 2,463 whole shares of Common Stock, respectively,
plus cash in lieu of any fractional share at the rate of $10.00 per whole share
(which shares and cash have a calculated equivalent estimated value of
$18,203.00, $21,416.00 and $24,628.00 based on the $10.00 Purchase Price of a
share of Common Stock in the Offerings and the aforementioned Exchange Ratios).
However, there can be no assurance as to the actual market value of a share of
Common Stock after the Conversion or that such shares could be sold at or above
the $10.00 Purchase Price.
DELIVERY AND EXCHANGE OF CERTIFICATES
Upon consummation of the Conversion, holders of Public Mid-Tier Holding
Company Shares in certificate form (other than the MHC) will receive a
transmittal letter with instruction on delivery of certificates for exchange.
See "The Conversion - Delivery and Exchange of Certificates." Upon surrender of
such certificates to an agent appointed by the Mid-Tier Holding Company (the
"Exchange Agent"), a Public Shareholder will be entitled to receive in exchange
therefore a certificate or certificates representing the number of full Exchange
Shares to which he or she is entitled based on the Exchange Ratio. The Exchange
Agent will provide each shareholder of record a letter of transmittal with
instructions for the exchange of shares. Shares of Mid-Tier Holding Company
Common Stock held in the Mid-Tier Holding Company's Dividend Reinvestment Plan
will also be exchanged for Common Stock pursuant to the Exchange Ratio. HOLDERS
OF MID-TIER HOLDING COMPANY COMMON STOCK SHOULD NOT FORWARD SHARES TO THE
ASSOCIATION OR EXCHANGE AGENT UNTIL THEY HAVE RECEIVED INSTRUCTIONS FROM THE
EXCHANGE AGENT.
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BENEFITS OF CONVERSION TO DIRECTORS AND OFFICERS
STOCK OPTION AND RECOGNITION PLANS. The Company intends to adopt
certain stock benefit plans for the benefit of directors, officers and employees
of the Company and the Association and to submit such plans to shareholders for
approval at an annual or special meeting of shareholders of the Company to be
held at least six months following the consummation of the Conversion. The
proposed benefit plans are as follows: (i) a 1999 Stock Option Plan, pursuant to
which a number of authorized but unissued shares of Common Stock equal to 10% of
the Conversion Stock sold in the Offerings (659,036 shares at the maximum of the
Estimated Valuation Range) will be reserved for issuance pursuant to stock
options and stock appreciation rights to directors, officers and employees; and
(ii) a 1999 Recognition and Retention Plan and Trust Agreement (the "1999
Recognition Plan"), which will, following the receipt of shareholder approval,
purchase a number of shares of Common Stock, with funds contributed by the
Company, either from the Company or in the open market equal to 4% of the
Conversion Stock sold in the Offerings (263,614 shares at the maximum of the
Estimated Valuation Range) for distribution to directors, officers and
employees. For stock option and restricted stock plans implemented within one
year following the Conversion, current OTS regulations provide that individual
members of management may receive a maximum of 25% of the shares granted
pursuant to any stock option or non-tax qualified stock benefit plan and
directors who are not employees may receive a maximum of 5% of such stock (or
stock options) individually and a maximum of 30% in the aggregate under any such
plan. In the event that the 1999 Recognition Plan purchases shares of Common
Stock in the open market with funds contributed by the Company, the cost of such
shares initially will be deducted from the Company's shareholders' equity, but
the number of outstanding shares of Common Stock will not increase and
shareholders accordingly will not experience dilution of their ownership
interest. In the event that the 1999 Recognition Plan purchases shares of Common
Stock from the Company with funds contributed by the Company, total
shareholders' equity would neither increase nor decrease, but under such
circumstances shareholders would experience dilution of their ownership
interests (by 2.0% at the maximum of the Estimated Valuation Range) and per
share shareholders' equity and per share net earnings (as awards vest) would
decrease as a result of an increase in the number of outstanding shares of
Common Stock. In either case, the Company will incur operating expense and
increases in shareholders' equity as the shares held by the 1999 Recognition
Plan are granted and issued in accordance with the terms thereof. For a
presentation of the effects of anticipated purchases of Common Stock by the 1999
Recognition Plan, see "Pro Forma Data."
Although no specific award determinations have been made, upon receipt
of shareholder approval of the 1999 Stock Option Plan, the Company anticipates
granting stock options for shares of Common Stock to directors, executive
officers and other key personnel. A total of 75% of the Common Stock to be
reserved for issuance pursuant to the 1999 Stock Option Plan will be available
for the grant of stock options to executive officers and key employees of the
Association. The 1999 Stock Option Plan will be administered by a committee of
two or more non-employee members of the Board of Directors of the Company within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
("Exchange Act"). Such persons shall also meet the definition of "outside
director" for purposes of Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"). In addition, pursuant to the 1999 Stock Option Plan,
25% of the shares of Common Stock to be reserved for issuance pursuant to the
1999 Stock Option Plan will be available for the grant of compensatory stock
options to outside directors of the Company. All of the stock options will be
granted at no cost to the recipients, although the recipients will be required
to pay the applicable exercise price at the time of exercise in order to receive
the underlying shares of Common Stock. Following receipt of shareholder approval
of the 1999 Recognition Plan, the Company intends to award shares of Common
Stock pursuant to such plan to certain directors, officers and employees at no
cost to the recipients. See "Management - New Stock Benefit Plans" and "Risk
Factors - Possible Dilutive Effect of Issuance of Additional Shares."
15
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The following table presents the dollar value at the minimum and the
maximum of the Estimated Valuation Range of the shares to be reserved or
purchased for distribution to the proposed stock benefit plans and the
percentage of the common Stock which will be represented by these shares.
<TABLE>
<CAPTION>
Percentage of
Value of Shares Granted(1) Common Stock(2)
------------------------------------------ ---------------
Minimum of the Maximum of the
Estimated Valuation Estimated Valuation
Stock Benefit Plans: Range Range
------------------- -------------------
(Dollars in thousands)
<S> <C> <C> <C>
1999 Stock Option Plan.............. NA(3) NA(3) 4.93%
1999 Recognition Plan............... $1,948 $2,636 1.97
ESOP................................ 3,897 5,272 3.94
------ ------ -----
$6,485 $7,908 10.84%
====== ====== =====
</TABLE>
- ----------------------
(1) Assumes shares are granted at $10 per shares.
(2) Reflects percentage of total number of shares to be issued and outstanding
assuming the issuance of the Exchange Shares; assumes shares for 1999
Recognition Plan are purchased in the open market.
(3) Recipients of stock options realize value only in the event of an increase
in the price of the Common Stock following the date of granted the stock
options.
The foregoing plans are in addition to a 1995 Stock Option Plan and a
1995 Recognition and Retention Plan for Employees and Outside Directors ("1995
Recognition Plan") which were adopted by the Association following the MHC
Reorganization and subsequently approved by the shareholders of the Association.
These plans will continue in existence after the Conversion as plans of the
Company, with appropriate changes to reflect the Exchange Ratio. See "Management
- - Existing Stock Options", "- Director Compensation", "The Conversion -
Effects of the Conversion Effect on Existing Compensation Plans." See Also
Note 4 to the Consolidated Financial Statements included elsewhere herein.
ESOP. The Company's ESOP intends to purchase 8% of the Conversion Stock
to be sold in the Offerings (527,228 shares or $5.3 million of Conversion Stock
at the maximum of the Estimated Valuation Range) with a loan funded by the
Company. See "Use of Proceeds." In the event that the total number of shares of
Conversion Stock sold in the Offerings is increased to an amount greater than
the number of shares representing the maximum of the Estimated Valuation Range,
the ESOP will have a priority right to purchase such increased number up to an
aggregate of 8% of the Conversion Stock. See "Management - Employee Stock
Ownership Plan" and "The Conversion - The Offerings Subscription Offering." See
also Note 14 to the Consolidated Financial Statement included elsewhere herein.
PRO FORMA EFFECTS. For presentations of the pro forma effects of the
1999 Recognition Plan and the ESOP on the net income of the Company (which was
estimated to aggregate $.02 and $.04 per share during the six months ended June
30, 1998 and the year ended December 31, 1997, respectively, at the midpoint of
the Estimated Valuation Range) and its shareholders' equity, see
"Capitalization" and "Pro Forma Data."
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS. Upon Consummation of the
Conversion, the Company and the Association intend to enter into a one-year
employment agreement with James B. Pittard, Jr., President and Chief
Executive Officer. In addition, the Company and the Association also intend to
enter into a three-year change-in-control agreement with Mr. Pittard. If the
employment of Mr. Pittard is terminated as a result of a change in control of
the Company, Mr. Pittard would be entitled to a cash severance amount equal to
three times his average annual compensation over his most recent five taxable
years (or $575,000 million) assuming such change of control had occurred on June
30, 1998). The Company and the Association also intend to enter into three year
change-in-control agreements with certain officers including Messrs. Larry J.
Baker, Senior Vice President, Chief Financial Officer and Treasurer, Cecil F.
Howard, Senior Vice President and Michael E. Reinhardt, Senior Vice President
and Ms. Mary Lou Kaminski, Senior Vice President. If the employment of the
officers is terminated as a result of a change in control of the Company, such
officers would be entitled to a cash severance amount equal to one time their
annual compensation. If such executive officers had been terminated as of June
30, 1998, the aggregate payment due them would have been $457,000. See
"Management -- Employment and Change of Control Agreements."
16
- --------------------------------------------------------------------------------
<PAGE> 18
- --------------------------------------------------------------------------------
assuming such change in control had occurred on June 30, 1998). The Company and
the Association also intend to enter into three year change-in-control severance
agreements with six officers including four executive officers: Larry J. Baker,
Senior Vice President, Chief Financial Officer and Treasurer, Cecil F. Howard,
Jr., Senior Vice President, Michael E. Reinhart, Senior Vice President and Mary
L. Kaminske, Senior Vice President. If the employment of the officers is
terminated as a result of a change in control of the Company, such officers
would be entitled to a cash severance amount equal to one time their annual
compensation. If such executive officers had been terminated as of June 30,
1998, the aggregate payment due them would have been $457,000. See
"Management--Employment and Change in Control Agreements."
USE OF PROCEEDS
Net proceeds from the sale of the Conversion Stock are estimated to be
between $47.3 million and $64.4 million ($74.2 million assuming an increase in
the Estimated Valuation Range by 15%). See "Pro Forma Data." The Company plans
to contribute to the Association 50% of the net proceeds from the Offerings
(after deduction for the loan to be made to the ESOP and funds to be contributed
to the 1999 Recognition Plan) and retain the remainder of the net proceeds. The
Company intends to use a portion of the net proceeds retained by it to make a
loan directly to the ESOP to enable the ESOP to purchase 8% of the Conversion
Stock. The amount of the loan is expected to be between $3.9 million and $5.2
million at the minimum and maximum of the Estimated Valuation Range,
respectively. It is anticipated that the loan to the ESOP will have a term of
not less than 15 years and a fixed interest rate at the prime rate as of the
date of the loan. See "Management - Employee Stock Ownership Plan." Funds
retained by the Company may be used to support the future expansion of
operations or diversification into other banking-related businesses and for
other business or investment purposes, including the opening or acquisition of
other branch offices. There are no current plans, arrangements, understandings
or agreements regarding such diversification or acquisitions. Subject to
applicable limitations and then-existing circumstances, such funds also may be
used in the future to repurchase shares of Common Stock. As of the date hereof,
the Company has not made any determination with regard to implementation of a
stock repurchase program subsequent to the Conversion. See "The Conversion
Certain Restrictions on Purchases or Transfer of Shares After the Conversion."
Funds contributed to the Association from the Company will be used for general
business purposes. The proceeds will be used to support the Association's
lending and investment activities and thereby enhance the Association's
capabilities to serve the borrowing and other financial needs of the communities
it serves. See "Use of Proceeds."
DIVIDEND POLICY
Since the completion of the first quarter after the MHC Reorganization
(I.E. December 31, 1994), until adoption of the Plan, the Mid-Tier Holding
Company or the Association has paid a regular quarterly dividend. For the
quarters ended March 31, 1998 and June 30, 1998, that dividend was $.225 per
share. Following consummation of the Conversion, the Board of Directors of the
Company intends to declare cash dividends on the Common Stock at an initial
quarterly rate equal to no less than $.225 ($.90 annualized) per share on the
total Public Mid-Tier Holding Company Shares outstanding immediately preceding
the consummation of the Conversion, commencing with the first quarter following
consummation of the Conversion. For example, based upon the Exchange Ratio of
2.1416 at the midpoint of the Estimated Valuation Range, the cash dividend after
the Conversion would be approximately $.1051 per share per quarter. Declarations
of dividends by the Company's Board of Directors will depend upon a number of
factors, including the amount of the net proceeds from the Offerings retained by
the Company, investment opportunities available to the Company or the
Association, capital requirements, regulatory limitations, the Company's and the
Association's financial condition and results of operations, tax considerations
and general economic conditions. Consequently, there can be no assurance that
dividends will in fact be paid on the Common Stock or that, if paid, such
dividends will not be reduced or eliminated in future periods. The Mid-Tier
Holding Company intends to continue to pay regular quarterly dividends through
either the date of consummation of the Conversion (on a pro rata basis) or the
end of the fiscal quarter during which the consummation of the Conversion
occurs. For a period of one year following completion of the Conversion, the
Company will neither pay any dividends that would be treated for tax purposes as
a return of capital nor take any actions towards or propose such dividends. See
"Dividend Policy."
17
- --------------------------------------------------------------------------------
<PAGE> 19
DISSENTERS' RIGHTS AND RIGHTS OF APPRAISAL
Pursuant to 12 C.F.R. Section 552.14, Public Shareholders will not have
dissenters' rights or rights of appraisal in connection with the Conversion.
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered by prospective investors. The following risk factors are discussed
therein: the potential low return on equity following the Conversion;
uncertainty as to future growth opportunities; the price of the Common Stock
following the Conversion may not exceed the Purchase Price; the possible
dilution to Public Shareholders as a result of purchase limitations; the
Company's intent to remain independent; the potential effects of change in
interest rates; the risks related to commercial real estate loans, multi-family
real estate loans, construction and land loans; strong competition within the
Association's market area; geographic concentration of loans, the existence of
certain anti-takeover provisions in the Company's Certificate of Incorporation;
the existence of significant regulatory oversight of the Company's and the
Association's operations; the potential increase of the number of shares issued
in the Conversion; the possible dilutive effect of the issuance of additional
shares; the potential for increased compensation expense after the Conversion;
possible adverse income tax consequences of the Conversion; and the
Association's Year 2000 compliance.
18
<PAGE> 20
SELECTED FINANCIAL DATA
(Dollars in Thousands, except Per Share Data)
Set forth below are selected consolidated financial and other data of
the Mid-Tier Holding Company and its wholly owned subsidiary, the Association.
This information is derived in part from and should be read in conjunction with
the Consolidated Financial Statements of the Mid-Tier Holding Company and the
notes thereto presented elsewhere in the Prospectus. The consolidated financial
statements, from which the Selected Consolidated Financial Condition and
Operating Data at or for the six month periods ended June 30, 1998 and 1997 is
derived, are unaudited. However, in the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
at such dates and for such periods have been made. The results of operations for
the six month periods ended June 30, 1998 and 1997 are not necessarily
indicative of results that may be expected for a full fiscal year. Effective
with the year and three months ended December 31, 1996, the fiscal year of all
related entities was changed from September 30 to December 31.
<TABLE>
<CAPTION>
AT AT
AT DECEMBER 31, SEPTEMBER 30,
JUNE 30, -------------------- ----------------------------------------------
1998 1997 1996 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED
FINANCIAL CONDITION DATA:
Total assets ................. $ 765,488 $ 720,133 $ 655,209 $ 650,332 $ 567,006 $ 560,268 $ 523,248
Cash and cash equivalents .... 47,425 25,954 42,442 44,780 42,497 89,843 35,188
Securities available for sale 91,316 142,269 123,152 124,287 27,028 26,729 69,459
Investments - held to maturity 21,443 21,388 22,139 22,293 59,679 52,204 43,789
Mortgage-backed securities -
held to maturity ............ 41,884 46,413 53,405 54,945 77,499 41,281 14,290
Loans receivable, net ........ 527,375 451,709 389,040 376,219 329,442 317,117 328,747
Real estate owned ............ 711 592 1,455 1,384 1,910 3,686 1,324
Deposits ..................... 574,383 550,708 513,709 498,929 437,376 459,979 450,356
Borrowed funds ............... 91,513 75,098 53,908 55,867 39,101 19,233 20,113
Total shareholders' equity ... 83,078 81,259 76,119 75,056 72,848 38,110 34,846
Shareholders' equity per share $ 16.66 $ 16.39 $ 15.50 $ 15.33 $ 15.04 -- --
Shares, allocated and out-
standing, end of period ..... 4,985,288 4,958,217 4,909,676 4,895,282 4,843,344 -- --
</TABLE>
<TABLE>
<CAPTION>
THREE
SIX MONTHS ENDED YEAR ENDED MONTHS ENDED
JUNE 30, DECEMBER 31, DECEMBER 31, YEAR ENDED SEPTEMBER 30,
----------------------- ----------- ------------ -------------------------------------------------
1998 1997 1997 1996 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED
OPERATING DATA:
Interest income .............. $ 26,827 $ 24,577 $ 50,316 $ 11,896 $ 43,889 $ 37,720 $ 34,130 $ 39,747
Interest expense ............. 14,655 13,260 27,390 6,378 22,859 18,634 15,525 17,639
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income ....... 12,172 11,317 22,926 5,518 21,030 19,086 18,605 22,108
Provision for loan losses .... 213 83 264 243 98 240 989 2,398
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 11,959 11,234 22,662 5,275 20,932 18,846 17,616 19,710
Other income ................. 1,756 1,862 4,185 1,225 3,544 3,394 3,317 5,093
Operating expense(1) ......... 9,846 8,805 18,561 4,644 19,800 14,903 14,939 15,614
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before provision
for income taxes ........... 3,869 4,291 8,286 1,856 4,676 7,337 5,994 9,189
Provision for income taxes ... 1,358 1,556 2,930 696 761 2,763 2,257 3,788
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income ................... $ 2,511 $ 2,735 $ 5,356 $ 1,160 $ 3,915 $ 4,574 $ 3,737 $ 5,401
========== ========== ========== ========== ========== ========== ========== ==========
Earnings per share - basic ... $ 0.51 $ 0.55 $ 1.09 $ 0.24 $ 0.80 $ 0.94 $ -- $ --
========== ========== ========== ========== ========== ========== ========== ==========
Earnings per share - diluted . $ 0.49 $ 0.54 $ 1.06 $ 0.23 $ 0.79 $ 0.94 $ -- $ --
========== ========== ========== ========== ========== ========== ========== ==========
Cash dividends per share(2) .. $ 0.45 $ 0.45 $ 0.90 $ 0.20 $ 0.75 $ 0.59 $ -- $ --
========== ========== ========== ========== ========== ========== ========== ==========
Basic weighted average
common shares outstanding . 4,970,782 4,919,960 4,929,989 4,902,479 4,869,238 4,845,384 -- --
========== ========== ========== ========== ========== ========== ========== ==========
Diluted weighted average
common shares outstanding .. 5,116,956 5,021,739 5,054,853 4,951,820 4,936,763 4,882,658 -- --
========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
19
<PAGE> 21
<TABLE>
<CAPTION>
Three months
Six months ended Year ended ended
June 30,(3) December 31, December 31,(3) Year ended September 30,
---------------- ------------ --------------- ------------------------------------
1998 1997 1997 1996 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
KEY FINANCIAL AND OTHER DATA(4):
PERFORMANCE RATIOS:
Return on average assets (1)...... 0.67% 0.80% 0.77% 0.71% 0.64% 0.84% 0.71% 1.01%
Return on average equity (1)...... 6.10 7.08 6.80 6.11 5.25 6.66 10.27 17.02
Net interest rate spread (5)...... 3.14 3.15 3.13 3.16 3.24 3.40 3.69 4.43
Net interest margin (5)........... 3.47 3.53 3.51 3.58 3.65 3.78 3.79 4.50
Other income to average assets .. 0.47 0.55 0.60 0.75 0.55 0.62 0.63 0.96
Operating expense to
average assets (1)............ 2.63 2.59 2.68 2.85 3.20 2.74 2.82 2.93
Net interest income to
operating expenses (1)........ 123.62 128.53 123.52 118.82 106.21 128.07 124.54 141.59
Average interest-earning
assets to average
interest-bearing liabilities . 108.06 109.05 109.06 110.15 110.47 110.09 103.08 101.86
Cash dividend payout ratio (6).... 41.86 37.66 38.69 39.57 42.89 28.22 -- --
ASSET QUALITY RATIOS:
Non-performing assets to
total assets at end
of period (7)................... 0.27 0.40 0.47 0.47 0.4 0.45 1.25 1.54
Allowance for loan losses to
non-performing loans at
end of period (8)............. 202.56 177.49 193.04 155.86 274.58 527.49 114.72 55.65
Allowance for loan losses to net
loans receivable at
end of period ................ 0.52 0.63 0.59 0.65 0.61 1.06 1.07 1.14
CAPITAL RATIOS:
Average equity to average assets . 11.00 11.37 11.37 11.65 12.20 12.72 6.89 5.96
Shareholders' equity to assets at
end of period ................ 10.85 11.24 11.28 11.62 11.54 12.85 6.80 6.65
OTHER DATA:
Number of full service offices ... 21 20 21 19 19 18 17 17
</TABLE>
- ----------------
(1) Includes for the year ending September 30, 1996, a one-time SAIF special
assessment expense of $2.8 million ($1.8 million, net of taxes). Without
this one-time assessment, return on average assets, return on average
equity, operating expenses to average assets and net interest income to
operating expense would have been 0.93%, 7.54%, 2.77% and 123.86%,
respectively.
(2) Cash dividends are declared on Public Mid-Tier Holding Company Shares only.
The MHC has waived receipt of all dividends since the MHC Reorganization. A
portion of such waived dividends were taken into account in establishing
the Exchange Ratio. In addition, the amount of waived dividends will become
part of the liquidation account established in the Conversion for the
benefit of Eligible Account Holder and Supplemental Eligible Account
Holders. See "The Conversion -- Stock Pricing, Exchange Ratio and Number of
Shares to be Issued" and "-- Liquidation Rights."
(3) Ratios for the periods ended June 30, 1998 and 1997 and the three months
ended December 31, 1996 have been presented on an annualized basis.
(4) Ratios are based on the average monthly balances except at end of period
ratios.
(5) Net interest rate spread represents the difference between the average
yield earned on interest-earning assets and the average rate paid on
interest-bearing liabilities. Net interest margin represents net interest
income as a percentage of average interest-earning assets.
(6) The ratio is based upon total dividends declared excluding dividends waived
by the MHC. The dividend payout the dividends waived by the MHC divided by
net income per share, would have been 88.81%, 80.77%, 82.71%, 84.74%,
93.08% and 61.88% for the six months ended June 30, 1998 and 1997, the year
ended December 31, 1997, the three months ended December 31, 1996, and the
years ended September 30, 1996 and 1995, respectively.
(7) Non-performing assets include non-performing loans and real estate owned.
In addition, the year ended September 30, 1996 includes a claim for a
deposit account which was recovered in its entirety in a later period.
(8) Non-performing loans are loans which are not performing in accordance with
the terms of the loan agreement and on which the Association has ceased
accruing interest.
20
<PAGE> 22
SUMMARY OF RECENT DEVELOPMENTS
(Dollars in Thousands, Except Per Share Data)
The selected financial and other data of the Mid-Tier Holding
Company set forth below does not purport to be complete and should be read in
conjunction with, and is qualified in its entirety by, the more detailed
information, including the Consolidated Financial Statements and the notes
thereto, appearing elsewhere herein. In the opinion of management, financial
information at September 30, 1998 and for the three months and nine months ended
September 30, 1998 and 1997 reflect all adjustments (consisting only of normal
recurring accruals) which are necessary to present fairly the results for such
periods. Results for the three and nine month periods ended September 30, 1998
and 1997 may not be indicative of operations of the Mid-Tier Holding Company on
an annualized basis.
<TABLE>
<CAPTION>
AT AT
SEPTEMBER 30, DECEMBER 31,
1998 1997
-------------- ---------------
<S> <C> <C>
SELECTED CONSOLIDATED FINANCIAL
CONDITION DATA:
Total assets $ 791,291 $ 720,133
Cash and cash equivalents 50,831 25,954
Securities available for sale 100,317 142,269
Investments - held to maturity 21,595 21,388
Mortgage-backed securities - held to
maturity 36,869 46,413
Loans receivable, net 540,602 451,709
Real estate owned 705 592
Deposits 580,757 550,708
Borrowed funds 109,700 75,098
Total shareholders' equity 84,556 81,259
Shareholders' equity per share $ 17.03 $ 16.39
Shares, allocated and out-
standing, end of period 4,999,943 4,958,217
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
SELECTED CONSOLIDATED
OPERATING DATA:
Interest income $13,763 $12,894 $40,591 $37,471
Interest expense 7,741 7,036 22,397 20,296
------- ------- ------- -------
Net interest income 6,022 5,858 18,194 17,175
Provision for loan losses 223 138 436 221
------- ------- ------- -------
Net interest income after
provision for loan losses 5,799 5,720 17,758 16,954
Other income 906 1,522 2,662 3,384
Operating expense 5,066 4,973 14,912 13,778
------- ------- ------- -------
Income before provision
for income taxes 1,639 2,269 5,508 6,560
Provision for income taxes 401 720 1,759 2,276
------- ------- ------- -------
Net income $ 1,238 $ 1,549 $ 3,749 $ 4,284
======= ======= ======= =======
Earnings per share - basic $ 0.25 $ 0.31 $ 0.75 $ 0.87
======= ======= ======= =======
Earnings per share - diluted $ 0.24 $ 0.31 $ 0.73 $ 0.85
======= ======= ======= =======
Cash dividends per share(1) $ 0.225 $ 0.225 $ 0.68 $ 0.68
======= ======= ======= =======
Basic weighted average
common shares outstanding 4,991,693 4,935,442 4,976,283 4,924,497
========= ========= ========= =========
Diluted weighted average
common shares outstanding 5,421,665 5,066,404 5,115,781 5,036,778
========= ========= ========= =========
</TABLE>
21
<PAGE> 23
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30,(2) September 30,(2)
---------------------- ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
KEY FINANCIAL AND OTHER DATA(3):
PERFORMANCE RATIOS:
Return on average assets 0.63% 0.88% 0.66% 0.83%
Return on average equity 5.91 7.78 6.04 7.31
Net interest rate spread (4) 2.99 3.15 3.08 3.15
Net interest margin (4) 3.30 3.53 3.41 3.53
Other income to average assets 0.46 0.87 0.47 0.66
Operating expense to average assets 2.60 2.83 2.62 2.67
Net interest income to
operating expenses 118.87 117.80 122.01 124.65
Average interest-earning assets to average
interest-bearing liabilities 107.38 109.18 107.82 109.13
Cash dividend payout ratio (5) 47.42 33.31 43.69 36.09
ASSET QUALITY RATIOS:
Non-performing assets to total assets at end
of period (6) 0.30 0.26 0.30 0.26
Allowance for loan losses to
non-performing loans at end of period (7) 180.23 208.39 180.23 208.39
Allowance for loan losses to net
loans receivable at end of period 0.59 0.63 0.59 0.63
CAPITAL RATIOS:
Average equity to average assets 10.74 11.32 10.91 11.36
Shareholders' equity to assets at
end of period 10.69 11.34 10.69 11.34
OTHER DATA:
Number of full service offices 21 20 21 20
</TABLE>
- ---------------------
(1) Cash dividends are declared on Public Mid-Tier Holding Company Shares
only. The MHC has waived receipt of all dividends since the MHC
Reorganization. A portion of such waived dividends were taken into
account in establishing the Exchange Ratio. In addition, the amount of
waived dividends will become part of the liquidation account
established in the Conversion for the benefit of Eligible Account
Holder and Supplemental Eligible Account Holders. See "The Conversion -
Stock Pricing, Exchange Ratio and Number of Shares to be Issued" and "-
Liquidation Rights."
(2) Ratios for the periods ended September 30, 1998 and 1997 have been
presented on an annualized basis.
(3) Ratios are based on the average monthly balances except at end of
period ratios.
(4) Net interest rate spread represents the difference between the average
yield earned on interest-earning assets and the average rate paid on
interest-bearing liabilities. Net interest margin represents net
interest income as a percentage of average interest-earning assets.
(5) The ratio is based upon total dividends declared excluding dividends
waved by the MHC divided by net income per share. The dividend payout
ratio, including the dividends waived by the MHC, would have been
95.03%, 90.87%, 90.87% and 77.37% for the three months ended
September 30, 1998 and 1997 and the nine months ended September
30, 1998 and 1997, respectively.
(6) Non-performing assets include non-performing loans and real estate
owned.
(7) Non-performing loans are loans which are not performing in accordance
with the terms of the loan agreement and on which the Association has
ceased accruing interest.
22
<PAGE> 24
Total assets increased $71.2 million to $791.3 million at September 30,
1998 from $720.1 million at December 31, 1997 primarily due to an $88.9 million
increase in the net loan portfolio as a result of the Association's continued
emphasis on expanding its lending activities. The securities portfolio (which
includes securities available for sale, investment securities and
mortgage-backed and related securities) decreased $51.3 million primarily due to
calls and normal amortization. The proceeds resulting from such calls and
amortization were used in part used to fund the loan originations and purchases
totalling $187.5 million during the nine month period, and resulted in the $24.9
million increase in cash and cash equivalents during the period. The increase in
total assets was also funded in part by a $30.0 million increase in deposits to
$580.7 million at September 30, 1998 from $550.7 million at December 31, 1997.
The increase in deposits primarily reflected increased retail deposits resulting
from special promotions of odd-term certificates and deposit growth experienced
at newer branch offices. The growth also reflected the Association's as well as
continued efforts to competitively price deposit accounts to enhance its market
share. In addition, a $36.7 million net increase in FHLB advances was used to
partially fund the increase in the loan portfolio as well as to purchase
mortgage-backed securities. Shareholders' equity increased to $84.6 million or
$17.03 per share at September 30, 1998 from $81.3 million or $16.39 per share at
December 31, 1997, reflecting net income for the nine months of $3.8 million,
offset primarily by dividends totalling $1.6 million declared during the nine
months on the Mid-Tier Holding Company Common Stock held by public shareholders.
Net income for the quarter ended September 30, 1998 was $1.2
million or $0.25 per share, a $311,000 decrease from $1.5 million or $0.31 per
share for the quarter ended September 30, 1997. Net interest income increased to
$6.0 million for the quarter ended September 30, 1998 from $5.9 million for the
same period in 1997 primarily as a result of a $66.2 million increase in average
interest-earning assets to $729.5 million for the quarter ended September 30,
1998 from $663.3 million for the same period in the prior year, partially offset
by a $71.9 million increase in average interest-bearing liabilities to $679.4
million for the quarter ended September 30, 1998 from $607.5 million for the
same period in 1997 primarily reflecting the growth of the Association's deposit
portfolio and additional FHLB advances. This increase related to volume was
offset in part by a decrease in the interest rate spread to 2.99% for the
quarter ended September 30, 1998 from 3.15% for the same period in 1997. The
provision for loan losses increased during the quarter ended September 30, 1998
to $223,000 as compared to $138,000 for the same period in 1997 due to continued
management's decision to increase reserves due to the growth in the loan
portfolio during fiscal 1998. Other income amounted to $906,000 for the quarter
ended September 30, 1998 as compared to $1.5 million for the same period in 1997
primarily due to a $617,000 gain on the sale of a security available for sale
during the 1997 period. Other operating expense increased $93,000 for the
quarter ended September 30, 1998 primarily due to increases of $235,000 and
$139,000 in employee compensation and benefits and occupancy and equipment
expense as a result of increased staffing due to branch office openings and the
expanded loan production program. This increase was offset in part by a $400,000
decrease in miscellaneous expense. Miscellaneous expense was higher during the
1997 period primarily as a result of the recognition of a $254,000 reserve for
loss on an insurance claim. The provision for income taxes decreased $319,000 as
a result of the decrease in net income.
Net income for the nine months ended September 30, 1998 was $3.7
million or $0.75 per share, a $535,000 decrease from $4.3 million or $0.87 per
share for the same period in 1997. Net interest income increased to $18.2
million for the nine months ended September 30, 1998 from $17.2 million for the
same period in 1997 primarily as a result of a $62.6 million increase in average
interest-earning assets to $711.2 million for the nine months ended September
30, 1998 from $648.6 million for the same period in the prior year, partially
offset by a $65.3 million increase in average interest-bearing liabilities to
$659.6 million for the nine months ended September 30, 1998 from $594.4 million
for the same period in 1997 primarily reflecting the growth of the Association's
deposit portfolio and additional FHLB advances. This increase related to volume
was offset in part by a decrease in the interest rate spread to 3.08% for the
nine months ended September 30, 1998 from 3.15% for the same period in 1997. The
provision for loan losses increased during the nine months ended September 30,
1998 to $436,000 as compared to $221,000 for the same period in 1997 due to
management's decision to increase reserves due to the continued growth in the
loan portfolio during fiscal 1998. Other income amounted to $2.7 million for the
nine months ended September 30, 1998 as compared to $3.4 million for the same
period in 1997 primarily due the $617,000 gain on the sale of a security
available for sale during the 1997 period. In addition, amortization of $211,000
of the $4.8 million affordable housing tax credit partnership was recognized in
the nine months ended September 30, 1998 as compared to $74,000 during the same
period in 1997. The partnership began its scheduled amortization in August 1997.
Other operating expense increased $1.1 million for the nine months ended
September 30, 1998, primarily due to increases of $976,000 and $246,000 in
employee compensation and benefits and occupancy and equipment expense as a
result of increased staffing due to branch office openings, the expanded loan
production program. The increase also reflected in part the increased cost of
stock benefit programs reflecting the increase in the market value of the
Mid-Tier Holding Company Common Stock for part of the nine month period in 1998.
These increases were offset in part by a $337,000 decrease in miscellaneous
expense primarily as a result of a $254,000 reserve for loss on an insurance
claim which was recognized in the 1997 period and not repeated in the 1998
period. The provision for income taxes decreased $517,000 as a result of the
decrease in income as well as the $260,000 tax benefit received from the
affordable housing tax credit partnership for the nine months ended September
30, 1998 as compared to $126,000 for the 1997 period.
23
<PAGE> 25
RISK FACTORS
THE FOLLOWING RISK FACTORS,WHICH MANAGEMENT BELIEVES ARE ALL THE KNOWN
MATERIAL RISKS EXISTING AS OF THE DATE HEREOF. IN ADDITION TO THOSE DISCUSSED
ELSEWHERE IN THIS PROSPECTUS, SHOULD BE CAREFULLY CONSIDERED BY INVESTORS IN
DECIDING WHETHER TO PURCHASE THE COMMON STOCK OFFERED HEREBY.
POTENTIAL LOW RETURN ON EQUITY FOLLOWING THE CONVERSION; UNCERTAINTY AS TO
FUTURE GROWTH OPPORTUNITIES
At June 30, 1998, the Mid-Tier Holding Company' ratio of equity to
assets was 10.9%. The Company's equity position will be significantly increased
as a result of the Conversion. On a pro forma basis as of June 30, 1998,
assuming the sale of Common Stock at the midpoint of the Estimated Valuation
Range, the Company's ratio of equity to assets would be 17.1%. The Company's
ability to leverage this capital will be significantly affected by industry
competition for loans and deposits. The Company currently anticipates that it
will take time to prudently deploy such capital. As a result, the Company's
return on equity initially is expected to be below the industry average after
the Conversion.
In an effort to fully deploy post-Conversion capital, in addition to
attempting to increase its loan and deposit growth, the Company may seek to
expand its banking franchise by opening new branches. The Company's ability to
expand by establishing new branch offices will depend on its ability to identify
advantageous branch office locations and generate new deposits and loans from
those locations that will create an acceptable level of return to the Company.
There can be no assurance the Company will be able to generate internal growth
or successfully integrate any new or acquired branches into the Company. The
Association has acquired to placed deposits on four parcels of land for possible
future branch sites, which sites may be developed over the next three years. See
"Business - Properties." Other than as described herein, neither the Company nor
the Association has any specific plans, arrangements or understandings regarding
any such expansions or acquisitions at this time.
PRICE OF COMMON STOCK FOLLOWING THE CONVERSION MAY NOT EXCEED PURCHASE PRICE
Since the MHC Reorganization and public stock issuance on October 24,
1994, the Mid-Tier Holding Company Common Stock and its predecessor, the
Association Common Stock, have increased in value. The Association's Common
Stock (which was exchanged for Mid-Tier Holding Company Common Stock on a
one-for-one basis) were initially sold to the public at $15.00 per share. On
October __, 1998, the date of this Prospectus, the closing price of the Public
Mid-Tier Holding Company Shares was $_____. There can be no assurance that the
Conversion Stock will appreciate in value as have the Public Mid-Tier Holding
Company Shares. Furthermore, the anticipated low return on equity and likely
increase in compensation expense may adversely affect the price of the Common
Stock subsequent to completion of the Conversion. Additionally, there can be no
assurance that the Common Stock will appreciate after the Conversion. The Boards
of Directors of the Primary Parties have set an offering price for the
Conversion Stock of $10.00 a share. However, the pricing of this stock should in
no way be seen as an indication or assurance that the Conversion Stock or the
Common Stock will appreciate after the Conversion in the same manner as the
Public Mid-Tier Holding Company Shares. In addition, the trading prices in the
open market of common securities issued in other recently completed second step
conversions of mutual holding companies have in most cases traded below the
initial offering price of such securities in the conversion of such
institutions.
POSSIBLE DILUTION TO PUBLIC SHAREHOLDERS AS A RESULT OF PURCHASE LIMITATIONS
The OTS has required that the aggregate purchase limitation contained
in the Plan of Conversion include Exchange Shares to be issued to Public
Shareholders for their Public Mid-Tier Holding Company Shares. As a result,
certain holders of Public Shares may be limited in their ability to purchase
Conversion Stock in the Offerings. For example, a Public Shareholder which
acquires 65,904 Exchange Shares will not be able to purchase any shares of
Conversion Stock in the Offerings, although such a shareholder will be able to
purchase shares of Mid-Tier Holding Company Common Stock in the market during
the Offerings and thereafter. As a result, the purchase limitation may prevent
such shareholders from maintaining their current ownership percentage of the
Mid-Tier Holding Company after the Conversion through purchases of Conversion
Stock in the Offerings. See "The Conversion - Limitations on Conversion Stock
Purchases."
24
<PAGE> 26
INTENT TO REMAIN INDEPENDENT; UNSUITABILITY AS A SHORT-TERM INVESTMENT
The Association and its predecessors have operated as independent
community-oriented savings associations since 1955. Following the Conversion,
the Company intends to continue to operate as an independent financial
institution. Accordingly, the Common Stock may not be a suitable investment for
individuals anticipating a rapid sale of the Company to a third party.
Also due to the Company's intention to remain independent, certain
provisions in the Company's Certificate of Incorporation and Bylaws may assist
the Company in maintaining its status as an independent publicly owned
corporation. These provisions, as well as the Delaware General Corporation Law
("DGCL") and certain federal regulations, may have certain anti-takeover
effects. Such provisions include, among others, restriction on the acquisition
of the Company's equity securities and limitations on voting rights, the
classification of the terms of the members of the Board of Directors, certain
provisions relating to special meetings of shareholders, noncumulative voting by
shareholders in the election of directors, the issuance of preferred stock and
additional shares of Common Stock without shareholder approval, and
supermajority provisions for the approval of certain business combinations. See
"Restrictions on Acquisition of the Company." As a result, shareholders who
might wish to participate in a change of control transaction may not have the
opportunity to do so.
POTENTIAL EFFECTS OF CHANGES IN INTEREST RATES AND THE CURRENT INTEREST RATE
ENVIRONMENT
The operations of the Association are substantially dependent on its
net interest income, which is the difference between the interest income earned
on its interest-earning assets and the interest expense paid on its
interest-bearing liabilities. Like most savings institutions, the Association's
earnings are affected by changes in market interest rates, and other economic
factors beyond its control. While the Association's average interest rate spread
increased slightly from 3.13% for fiscal 1997 to 3.14% for the six months ended
June 30, 1998, no assurance can be given that the Association's average interest
rate spread will not decrease in future periods. Any future decrease in the
Association's average interest rate spread could adversely affect the
Association's net interest income. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Market Risk Analysis."
If an institution's interest-earning assets have shorter effective
maturities than its interest-bearing liabilities, the yield on the institution's
interest-earning assets generally will adjust more rapidly than the cost of its
interest-bearing liabilities and, as a result, the institution's net interest
income generally would be adversely affected by material and prolonged increases
in interest rates and positively affected by comparable declines in interest
rates. The Association attempts to reduce the vulnerability of its operations to
changes in interest rates by maintaining significant amounts of assets with
relatively short terms and/or adjustable rates of interest. The difference in
the dollar amount of interest-earning assets and interest-bearing liabilities
expressed as a percentage of total assets is a measure of interest rate risk and
is referred to as an institution's interest sensitivity gap. Based upon certain
repricing assumptions, at June 30, 1998 the Association's interest-earning
assets repricing or maturing within one year exceeded its interest-bearing
liabilities with similar characteristics by $3.4 million or .44% of total
assets. Accordingly, an increase in interest rates generally would result in an
increase in the Association's average interest rate spread and net interest
income. Savings and NOW accounts which could reprice within one year are assumed
to reprice in varying rates over several years. If these deposits were all to
reprice within one year, it would result in a negative one-year gap position of
$70.0 million. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Market Risk Analysis."
In addition to affecting interest income and expense, changes in
interest rates also can affect the value of the Association's interest-earning
assets, which are comprised of fixed and adjustable-rate instruments, and the
ability to realize gains from the sale of such assets. Generally, the value of
fixed-rate instruments fluctuates inversely with changes in interest rates. At
June 30, 1998, the Association had $91.3 million of investment and
mortgage-backed securities available for sale ($48.0 million of which had
fixed-rates of interest). The Association had $433,000 of net unrealized losses
with respect to such securities, which were included as a separate component in
the Mid-Tier Holding Company shareholders' equity, net of tax benefit, as of
such date.
The OTS has delayed indefinitely implementing an interest rate risk
component into its risk-based capital rules, which is designed to calculate on a
quarterly basis the extent to which the value of an institution's assets and
liabilities
25
<PAGE> 27
would change if interest rates increase or decrease. If the net portfolio value
of an institution would decline by more than 2% of the estimated market value of
the institution's assets in the event of a 200 basis point increase or decrease
in interest rates, then the institution is deemed to be subject to a greater
than "normal" interest rate risk and must deduct from its capital 50% of the
amount by which the decline in net portfolio value exceeds 2% of the estimated
market value of the institution's assets, as of an effective date to be
determined. As of June 30, 1998, if interest rates increased by 200 basis
points, the Association's net portfolio value would decrease by $19.5 million,
or 19.0% of the estimated portfolio value of the Association's assets, using
assumptions provided by the OTS. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Market Risk Analysis."
Changes in interest rates also can affect the average life of loans and
mortgage-related securities. Decreases in interest rates in recent periods have
resulted in increased prepayments of loans and mortgage-related securities, as
borrowers refinanced to reduce borrowing costs. Under these circumstances, the
Association is subject to reinvestment risk to the extent that it is not able to
reinvest such prepayments at rates which are comparable to the rates on the
maturing loans or securities. See "Business - Lending Activities."
In addition, at June 30, 1998, the Association had $574.4 million of
deposits, of which $241.3 million or 42.0% consisted of certificates of deposit
maturing in one year or less. An increase in interest rates could result in a
decline in deposits, a higher average cost of deposits, or both.
RISKS RELATED TO COMMERCIAL REAL ESTATE LOANS, MULTI-FAMILY RESIDENTIAL REAL
ESTATE LOANS, CONSTRUCTION AND LAND LOANS
Commercial real estate, multi-family residential real estate,
construction and land lending generally is considered to involve a higher degree
of risk than single-family residential lending due to a variety of factors,
including generally larger loan balances, the dependency on successful operation
of the project for repayment, loan terms which often do not require full
amortization of the loan over its term, and the need to successfully develop
and/or sell the property. In addition, risk of loss on a construction loan
largely depends upon the accuracy of the initial estimate of the property's
value at completion of construction or development and the estimated cost
(including interest) of construction. During the construction phase, a number of
factors could result in delays and cost overruns. If the estimate of value
proves to be inaccurate, the Association may be confronted, at or prior to the
maturity of the loan, with a project, when completed, having a value which is
insufficient to assure full repayment. Commercial and multi-family residential
real estate loans may involve large loan balances to single borrowers or groups
of related borrowers, with the repayment of such loans typically dependent on
the successful operations and income stream of the borrower. Such risks can be
significantly affected by economic conditions. In addition, commercial and
multi-family residential real estate lending generally requires substantially
greater oversight efforts compared to single-family residential real estate
lending. See "Business -Lending Activities - Multi-Family Residential Real
Estate Loans" "-Commercial Real Estate Loans," "Construction and Land Loans" and
"Asset Quality - Non-Performing Assets."
The following table sets forth certain information regarding the
composition of the Association's loan portfolio with respect to commercial real
estate, multi-family residential, construction and land loans at June 30, 1998.
<TABLE>
<CAPTION>
At June 30, 1998
--------------------------
Percent of
Amount Total Loans
--------- -----------
(Dollars in Thousands)
<S> <C> <C>
Commercial ................ $ 46,147 8.32%
Multi-family .............. 8,739 1.58
Land ...................... 12,409 2.24
Construction .............. 47,024 8.49
--------- -----
$ 114,319 20.63%
========= =====
</TABLE>
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<PAGE> 28
STRONG COMPETITION WITHIN THE ASSOCIATION'S MARKET AREA
The Association faces significant competition in both making loans and
attracting deposits. As of March 31, 1998, the Association held 2.14%, 6.28%,
2.93% and 0.80% of all bank and savings association deposits in Palm Beach,
Martin, St. Lucie and Indian River Counties, respectively. In its market area,
the Association competes with commercial banks, savings institutions, mortgage
brokerage firms, credit unions, finance companies, mutual funds, insurance
companies, and brokerage and investment banking firms operating locally and
elsewhere. Many of these competitors have substantially greater resources and
lending limits than the Association and may offer certain services that the
Association does not or cannot provide. The profitability of the Association
depends upon its continued ability to successfully compete in its market area.
GEOGRAPHIC CONCENTRATION OF LOANS
The Association's market area consists primarily of Palm Beach, Martin,
St. Lucie, Indian River and Brevard Counties. In excess of 90% of the
Association's real estate loans are secured by properties located in its market
area. In addition, in excess of 90% of all of its loans are made to residents of
its market area. The economy of the Association's market area is service
oriented and is significantly dependent upon government, foreign trade, tourism
and its continued attraction as a retirement area. Accordingly, the asset
quality of the Association's loan portfolio is highly dependent upon the economy
and the unemployment rate in its market area. No assurance can be given that
downturns, if any, which may occur in the economy in the Association's market
area may not adversely affect the Association's operations in the future.
CERTAIN ANTI-TAKEOVER PROVISIONS
PROVISIONS IN THE COMPANY'S GOVERNING INSTRUMENTS AND DELAWARE LAW.
Certain provisions of the Company's Certificate of Incorporation and Bylaws, as
well as certain provisions in Delaware law, will assist the Company in
maintaining its status as an independent publicly owned corporation. Provisions
in the Company's Certificate of Incorporation and Bylaws provide, among other
things, (i) that the Board of Directors of the Company shall be divided into
three classes; (ii) that special meetings of shareholders may only be called by
the Board of Directors of the Company; (iii) that shareholders generally must
provide the Company advance notice of shareholder proposals and nominations for
director and provide certain specified related information; (iv) noncumulative
voting for the election of directors; (v) that no person may acquire more than
10% of the issued and outstanding shares of any class of equity security of the
Company; (vi) the authority to issue shares of authorized but unissued Common
Stock and preferred stock and to establish the terms of any one or more series
of Preferred Stock, including voting rights (which may be waived by the Board of
Directors under certain circumstances); and (vii) supermajority voting
requirements with respect to certain business transactions involving the
Company. Provisions under DGCL applicable to the Company provide, among other
things, that the Company may not engage in a business combination with an
"interested shareholder" (generally a holder of 15% of a corporation's voting
stock) during the three-year period after the interested shareholder became such
except under certain specified circumstances. In addition, OTS regulations
prohibit, for a period of one year following the date of Conversion, offers to
acquire or the acquisition of beneficial ownership of more than 10% of the
outstanding voting stock of the Company. The above provisions may discourage
potential proxy contests and other potential takeover attempts, particularly
those which have not been negotiated with the Board of Directors, and thus
generally may serve to perpetuate current management. See "Restrictions on
Acquisitions of the Company and the Association."
VOTING POWER OF OFFICERS AND DIRECTORS. Directors and executive
officers of the Company expect to purchase approximately 2.06% or 2.00% of the
shares of Common Stock outstanding based upon the issuance of (i) the Exchange
Shares and (ii) shares of Conversion Stock at the minimum and the maximum of the
Estimated Valuation Range, respectively. See "Proposed Management Purchases."
The Company intends to seek shareholder approval of the Company's
proposed 1999 Recognition Plan, which is a non-tax-qualified restricted stock
plan for the benefit of directors, officers and employees of the Company and the
Association. Assuming the receipt of shareholder approval, which shareholder
approval cannot be obtained earlier than six months following the Conversion
pursuant to OTS regulations, the Company expects to acquire Common Stock on
27
<PAGE> 29
behalf of the 1999 Recognition Plan in an amount equal to 4% of the Conversion
Stock sold in the Offerings, or 194,848 shares and 263,614 shares at the minimum
and maximum of the Estimated Valuation Range, respectively. These shares will be
acquired either through open market purchases, if permissible, or from
authorized but unissued Common Stock. Under the terms of the 1999 Recognition
Plan, recipients of awards will be entitled to instruct the trustees of the 1999
Recognition Plan as to how the underlying shares should be voted, and the
trustees will be entitled to vote all unallocated shares in their discretion. If
the shares are purchased in the open market, directors and executive officers
would have effective control over 4.02% of the Common Stock outstanding at such
time based upon the issuance of the (i) Exchange Shares and (ii) shares of
Conversion Stock at the midpoint of the Estimated Valuation Range, respectively,
before giving effect to the potential exercise of any stock options by directors
and officers of the Company and the Association, and shares held by the ESOP. If
approved by shareholders at a meeting held no earlier than six months following
the Conversion, the Company intends to reserve for future issuance pursuant to
the 1999 Stock Option Plan a number of authorized shares of Common Stock equal
to an aggregate of 10% of the Conversion Stock sold in the Offerings (659,036
shares, based on the issuance of the maximum 6,590,357 shares). See "Management
- - New Stock Benefit Plans." Management's potential voting control could,
together with additional shareholder support, preclude or make more difficult
takeover attempts that certain shareholders deem to be in their best interest
and may tend to perpetuate existing management.
PROVISIONS OF STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS. The ESOP
provides for accelerated vesting in the event of a change in control. In
addition, upon consummation of the Conversion, the Company and the Association
will enter into an employment agreement with the Association's and the Company's
President and Chief Executive Officer and change in control agreements with the
President and Chief Executive Officer and six other officers of the Association,
which agreements will provide for severance pay in the event of a change in
control. These provisions may have the effect of increasing the cost of
acquiring the Company, thereby discouraging future attempts to take over the
Company or the Association. In addition, it is possible that the 1999 Stock
Option Plan and the 1999 Recognition Plan may not be implemented until more
than one year following completion of the Conversion, and, in such event, such
plans could provide for accelerated vesting in the event of a change in control
of the Company. See "Restrictions on Acquisition of the Company and the
Association - Restrictions in the Company's Certificate of Incorporation and
Bylaws," "Management - New Stock Benefit Plans" and "Management - Employment
Agreements."
REGULATORY OVERSIGHT AND LEGISLATION
The Association is subject to extensive regulation, supervision and
examination by the OTS, as its chartering authority, and by the FDIC as insurer
of its deposits up to applicable limits. The Association is a member of the FHLB
System and is subject to certain limited regulations promulgated by the Board of
Governors of the Federal Reserve System ("Federal Reserve Board"). As the
holding company of the Association, the Company also will be subject to
regulation and oversight by the OTS. Such regulation and supervision govern the
activities in which an institution can engage and are intended primarily for the
protection of the insurance fund and depositors. Regulatory authorities have
been granted extensive discretion in connection with their supervisory and
enforcement activities which are intended to strengthen the financial condition
of the banking and thrift industries, including the imposition of restrictions
on the operation of an institution, the classification of assets by the
institution and the adequacy of an institution's allowance for loan losses. Any
change in such regulation and oversight, whether by the OTS, the FDIC or
Congress, could have a material impact on the Company, the Association and their
respective operations. See "Regulation."
On September 30, 1996, the Deposit Insurance Funds Act of 1996 ("DIF")
was enacted into law. The DIF Act contemplates the development of a common
charter for all federally chartered depository institutions and the abolition of
separate charters for national banks and federal savings institutions. It is not
known what form the common charter may take and what effect, if any, the
adoption of a new charter would have on the financial condition or results of
operations of the Association. See "Regulation - The Association."
Legislation is proposed periodically providing for a comprehensive
reform of the banking and thrift industries, and has included provisions that
would (i) require federal savings institutions to convert to a national bank or
a state-chartered bank or thrift, (ii) require all savings and loan holding
companies to become bank holding companies, and (iii) abolish the OTS. The
current form of legislation adopted by the U.S. House of Representatives does
not
28
<PAGE> 30
provide for the elimination of the federal thrift charter or OTS, but does
provide that unitary savings and loan holding companies that were established or
applied for after March 31, 1998 would not have the ability to engage in
unlimited activities but would be subject to the activities restrictions
applicable to multiple savings and loan holding companies. Unitary holding
companies that were established or applied for before such date would be
grandfathered and could continue to engage in unlimited activities and could
transfer the grandfather rights to acquirors of the holding company. The
Senate's version of this legislation is substantially similar but provides for a
grandfathering date of September 3, 1998. It is uncertain when or if this
legislation will be passed, and, if passed, what the final form of such
legislation will be. As a result, management cannot accurately predict the
possible impact of such legislation on the Association.
POSSIBLE INCREASE IN NUMBER OF SHARES ISSUED IN THE CONVERSION
The number of shares to be sold in the Conversion may be increased as a
result of an increase in the Estimated Valuation Range of up to 15% to reflect
changes in market and financial conditions prior to completion of the Conversion
or to fill the order of the ESOP. In the event that the Estimated Valuation
Range is so increased, it is expected that the Company will issue up to
7,578,961 shares of Conversion Stock at the Purchase Price for an aggregate
price of up to $75,789,610. An increase in the number of shares will decrease
net income per share and shareholders' equity per share on a pro forma basis and
will increase the Company's consolidated shareholders' equity and net income.
Such an increase will also increase the Purchase Price as a percentage of pro
forma shareholders' equity per share and net income per share.
The ESOP currently intends to purchase 8% of the Conversion Stock sold
in the Offerings. In the event that the number of shares to be sold in the
Conversion are increased as a result of an increase in the Estimated Valuation
Range, the ESOP shall have a first priority to purchase all shares of Conversion
Stock sold in the Offerings in excess of 6,590,357 shares, up to a maximum of 8%
of the total number of shares of Conversion Stock sold in the Offerings. See
"Pro Forma Data" and "The Conversion - Stock Pricing, Exchange Ratio and Number
of Shares to be Issued."
POSSIBLE DILUTIVE EFFECT OF ISSUANCE OF ADDITIONAL SHARES
If the 1999 Recognition Plan is approved by shareholders of the
Company, the 1999 Recognition Plan intends to acquire an amount of Conversion
Stock equal to 4% of the shares of Conversion Stock sold in the Offerings. If
such shares are acquired at a per share price equal to the Purchase Price, the
cost of such shares would be $2.6 million, assuming the Conversion Stock sold in
the Offerings is equal to the maximum of the Estimated Valuation Range. Such
shares of Common Stock may be acquired in the open market with funds provided by
the Company, if permissible, or from authorized but unissued shares of Common
Stock. In the event that the 1999 Recognition Plan acquires authorized but
unissued shares of Common Stock from the Company, the interests of existing
shareholders will be diluted. The issuance of authorized but unissued shares of
Common Stock to such plan in an amount equal to 4% of the Conversion Stock sold
in the Offerings would dilute the voting interests of existing shareholders by
approximately 2.0%and net income per share and shareholders' equity per share
would be decreased by a corresponding amount. See "Pro Forma Data" and
"Management - New Stock Benefit Plans - Recognition Plan."
If the 1999 Stock Option Plan is approved by shareholders of the
Company, the Company intends to reserve for future issuance pursuant to such
plan a number of shares of Common Stock equal to an aggregate of 10% of the
Conversion Stock sold in the Offerings (659,036 shares, based on the issuance of
the maximum 6,590,357 shares). Such shares may be authorized but previously
unissued shares, treasury shares or shares purchased by the Company in the open
market or from private sources. If only authorized but previously unissued
shares are used under such plan, the issuance of the total number of shares
available under such plan would dilute the voting interests of existing
shareholders by approximately 4.9%, and net income per share and shareholders'
equity per share would be decreased by a corresponding amount. See "Pro Forma
Data" and "Management - New Stock Benefit Plans - Stock Option Plan."
The Association also has adopted and maintains the 1995 Stock Option
Plan, which reserves for issuance 222,926 shares of Mid-Tier Holding Company
Common Stock. As of the date of this Prospectus, 15,060 shares had been issued
as a result of the exercise of options granted under such option plan. Upon
consummation of the Conversion, this plan will become the plan of the Company
and Common Stock will be issued in lieu of Mid-Tier Holding Company Common Stock
pursuant to the terms of such plan. See "Management-Existing Stock Options."
INCREASED COMPENSATION EXPENSE AFTER THE CONVERSION
The Association is required to record compensation expense in an amount
equal to the fair value of shares committed to be released to employees from an
employee stock ownership plan instead of an amount equal to the cost basis of
such shares. If the shares of Common Stock appreciate in value over time, this
requirement will result in increased compensation expense with respect to the
ESOP. It is impossible to determine at this time the extent of such impact on
future net income. See "Pro Forma Data." In addition, after consummation of the
Conversion, the Company intends to implement, subject to shareholder approval
(which approval cannot be obtained earlier than six months subsequent to the
Conversion), the 1999 Recognition Plan. Upon implementation, the release of
shares of Common Stock from the 1999 Recognition Plan will result in additional
compensation expense. See "Pro Forma Data" and "Management - New Stock Benefit
Plans - Recognition Plan."
29
<PAGE> 31
POSSIBLE ADVERSE INCOME TAX CONSEQUENCES
The Company and the Association have received a letter from FinPro
advising them of its belief that subscription rights granted to Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members have no value.
However, this letter is not binding on the Internal Revenue Service ("IRS"). If
the subscription rights granted to Eligible Account Holders, Supplemental
Eligible Account Holders and Other Members are deemed to have an ascertainable
value, receipt of such rights would be taxable probably only to those Eligible
Account Holders, Supplemental Eligible Account Holders and Other Members who
exercise the subscription rights (either as capital gain or ordinary income) in
an amount equal to such value. Based upon the letter from FinPro, the Company
does not believe that the receipt of subscription rights should be a taxable
event. However, whether subscription rights are considered to have ascertainable
value is an inherently factual determination. See "The Conversion - Effects of
Conversion" and "-Tax Aspects."
In addition, the Association has received an opinion of Elias, Matz,
Tiernan & Herrick L.L.P., subject to certain assumptions stated therein, that
the mergers constituting the Conversion will qualify under the Code as
reorganizations where no gain or loss will be recognized to the Primary Parties.
However, such opinion is not binding on the IRS. Accordingly, if the IRS were to
successfully assert that the mergers constituting the Conversion either were
part of a step transaction without independent economic significance and
business purpose or that the transactions circumvented the repeal of the
"General Utilities" doctrine, the mergers would not qualify as tax-free
reorganizations resulting in taxable gain to the parties to the transaction. See
"The Conversion - Effects of the Conversion" and "-Tax Aspects."
YEAR 2000 COMPLIANCE
As the year 2000 approaches, significant concerns have been expressed
with respect to the ability of existing computer software programs and operating
systems to function properly with respect to data containing dates in the year
2000 and thereafter. Many existing application software products were designed
to accommodate only a two digit year (E.G., 1998 is reflected as "98"). The
Association's operating, processing and accounting operations are computer
reliant and could be affected by the Year 2000 issues. The Association is
reliant on third-party vendors for their data processing needs as well as
certain other significant functions and services (E.G., securities safekeeping
services, securities pricing data, etc.). The Association currently is working
with its third-party vendors in order to assess their Year 2000 readiness. While
no assurance can be given that such third party vendors will be Year 2000
compliant, management believes that such vendors are taking appropriate steps to
address the issues on a timely basis. In addition, as of June 30, 1998, the
Association had contacted all of its commercial credit customers regarding the
customers' awareness of the Year 2000 issue. While no assurance can be given
that its customers will be Year 2000 compliant, management believes, based on
representation of such customers, that the customers are either addressing the
appropriate issues to ensure compliance or that they are not faced with material
Year 2000 issues. The Association has completed its own company-wide contingency
plan. Individual contingency plans concerning specific software and hardware
issues and operational plans for continuing operations were completed for all
mission critical hardware and software applications as of September 15, 1998.
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<PAGE> 32
Based on certain preliminary estimates, the Association believes that
its expenses related to upgrading its systems and software for Year 2000 issues
will not exceed $2.0 million. Of that amount, approximately $1.2 million and
$39,000 was expensed during the twelve months ended December 31, 1997 and 1996,
respectively. While the Association currently has no reason to believe that the
cost of addressing such issues will materially affect the Association's
products, services or ability to compete effectively, no assurance can be made
that the Association or the third party vendors on which it relies will become
Year 2000 compliant in a successful and timely fashion. Nevertheless, the
Company does not believe that the cost of addressing the Year 2000 issues will
be a material event or uncertainty that would cause reported financial
information not to be necessarily indicative of future operating results or
financial conditions, nor does it believe that the costs or the consequences of
incomplete or untimely resolution of its Year 2000 issues represent a known
material event or uncertainty that is reasonably likely to affect its future
financial results, or cause its reported financial information not to be
necessarily indicative of future operating results or future financial
condition.
IRREVOCABILITY OF ORDERS; POTENTIAL DELAY IN COMPLETION OF OFFERINGS
Orders submitted in the Subscription Offering, Eligible Public
Shareholders Offering or the Community Offering are irrevocable. Funds submitted
in connection with any purchase of Conversion Stock in the Offerings will be
held by the Company until the completion or termination of the Conversion,
including any extension of the Expiration Date. Because, among other factors,
completion of the Conversion will be subject to an update of the independent
appraisal prepared by FinPro, there may be one or more delays in the completion
of the Conversion. Subscribers will have no access to subscription funds and/or
shares of Conversion Stock until the Conversion is completed or terminated.
USE OF PROCEEDS
Although the actual net proceeds from the sale of the Common Stock
cannot be determined until the Conversion is completed, it is presently
anticipated that the net proceeds from the sale of the Conversion Stock will be
between $47.3 million and $64.4 million ($74.2 million assuming an increase in
the Estimated Valuation Range by 15%). See "Pro Forma Data" and "The Conversion
- - Stock Pricing, Exchange Ratio and Number of Shares to be Issued" as to the
assumptions used to arrive at such amounts.
The Company plans to contribute to the Association 50% of the net
Conversion proceeds (after deducting therefrom the amounts to be loaned to the
ESOP and contributed to the 1999 Recognition Plan) and retain the remaining 50%
of the net proceeds. The Company intends to use a portion of the net proceeds to
make a loan directly to the ESOP to enable the ESOP to purchase up to 8% of the
Conversion Stock sold in the Offerings. Based upon the issuance of 4,871,209
shares or 6,590,357 shares at the minimum and maximum of the Estimated Valuation
Range, respectively, the loan to the ESOP would be $3.9 million and $5.3
million, respectively. See "Management - Employee Stock Ownership Plan." The
remaining net proceeds retained by the Company initially may be used to invest
in investment securities, mortgage-backed and related securities, U.S.
Government and federal agency securities of various maturities, deposits in
either the Association or other financial institutions, or a combination
thereof. The portion of the net proceeds retained by the Company may ultimately
be used to support the Association's lending activities, to support the future
expansion of operations, and for other business and investment purposes,
including the payment of regular or special cash dividends, possible repurchases
of the Common Stock or returns of capital (the Company and the Association have
committed that no return of capital will be made on the Common Stock during the
one-year period subsequent to consummation of the Conversion) or the development
of new branch office locations. The Association has acquired or placed deposits
for four parcels of real estate which may be used for new branch offices over
the next three years. Other than as previously disclosed herein, neither the
Association nor the Company has any specific plans, arrangements, or
understandings regarding any branch acquisitions or diversification of
activities at this time.
Following the completion of the Conversion (to the extent permitted by
the OTS), and based upon then existing facts and circumstances, the Company's
Board of Directors may determine to repurchase some shares of Common Stock,
subject to any applicable statutory and regulatory requirements. Such facts and
circumstances may include but not be limited to: (i) market and economic factors
such as the price at which the stock is trading in the market, the volume of
trading, the attractiveness of other investment alternatives in terms of the
rate of return and risk involved in the investment, the ability to increase the
book value and/or earnings per share of the remaining outstanding shares, and an
31
<PAGE> 33
improvement in the Company's return on equity; (ii) the avoidance of dilution to
shareholders by not having to issue additional shares to cover the exercise of
stock options or to fund employee stock benefit plans; and (iii) any other
circumstances in which repurchases would be deemed in the best interests of the
Company and its shareholders. Any stock repurchases will be subject to the
determination of the Company's Board of Directors that the Association will be
capitalized in excess of all applicable regulatory requirements after any such
repurchases. As of the date hereof, the Company has not made my determination
with regard to implementation of a stock repurchase program subsequent to the
Conversion. The payment of dividends or repurchase of stock, however, would be
prohibited if the Association's net worth would be reduced below the amount
required for the liquidation account to be established for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders. As of the
date of this Prospectus, the initial balance of the liquidation account would be
approximately $50.8 million. See "Dividend Policy," "The Conversion Liquidation
Rights" and "The Conversion Certain Restrictions on Purchase or Transfer of
Shares After the Conversion."
The Company will be a unitary savings and loan holding company which,
under existing laws, would generally not be restricted as to the types of
business activities in which it may engage, provided that the Association
continues to be a qualified thrift lender ("QTL"). See "Regulation - The
Company" for a description of certain regulations applicable to the Company.
The portion of the net proceeds contributed by the Company to the
Association will be added to the Association's general funds to be used for
general corporate purposes, including increased lending activities and purchases
of securities. While the amount of net proceeds received by the Association will
further strengthen the Association's capital position, which already
substantially exceeds all regulatory requirements, it should be noted that the
Association is not converting primarily to raise capital. After the Conversion,
the Association's tangible capital ratio will be 12.5% (based upon the midpoint
of the Estimated Valuation Range). As a result, the Association will continue to
be a well-capitalized institution. After the Conversion, the Association intends
to emphasize capital strength and growth in assets and earnings.
THE NET PROCEEDS MAY VARY BECAUSE TOTAL EXPENSES OF THE CONVERSION MAY
BE MORE OR LESS THAN THOSE ESTIMATED. The net proceeds will also vary if the
number of shares to be issued in the Conversion is adjusted to reflect a change
in the estimated pro forma market value of the Common Stock. Payments for shares
made through withdrawals from existing deposit accounts at the Association will
not result in the receipt of new funds for investment by the Association but
will result in a reduction of the Association's interest expense and liabilities
as funds are transferred from interest-bearing certificates or other deposit
accounts.
DIVIDEND POLICY
Upon completion of the Conversion, the Board of Directors of the
Company will have the authority to declare dividends on the Common Stock,
subject to statutory and regulatory requirements. The Board of Directors intends
to pay quarterly cash dividends on the Common Stock at an initial rate equal to
the amount of the existing quarterly dividend paid on the Public Mid-Tier
Holding Company Shares ($.225 per share) divided by the Exchange Ratio
commencing the first quarter after the consummation of the Conversion. Based
upon the current Estimated Price Range, the Exchange Ratio is expected to be
1.8203, 2.1416, 2.4628 and 2.8322 at the minimum, midpoint, maximum and 15%
above the maximum of the Estimated Price Range, respectively, resulting in an
initial quarterly dividend rate of $.1236, $.1051, $.0914 and $.0794 per share,
respectively, following consummation of the Conversion. Declarations of
dividends by the Board of Directors will depend upon a number of factors,
including the amount of net proceeds retained by the Company in the Conversion,
investment opportunities available to the Company or the Association, capital
requirements, the Company's and the Association's financial condition and
results of operations, tax considerations, statutory and regulatory limitations,
and general economic conditions. No assurances can be given that any dividends
will be paid or that, if paid, will not be reduced or eliminated in future
periods. Special cash dividends, stock dividends or returns of capital may be
paid in addition to, or in lieu of, regular cash dividends (however, the Company
and the Association have committed to the OTS that they will take no action with
respect to any return of capital during the one-year period following
consummation of the Conversion).
Dividends from the Company may eventually depend, in part, upon receipt
of dividends from the Association, because the Company initially will have no
source of income other than dividends from the Association, earnings from
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<PAGE> 34
the investment of proceeds from the sale of Conversion Stock retained by the
Company and interest payments with respect to the Company's loan to the ESOP. A
regulation of the OTS imposes limitations on "capital distributions" by savings
institutions, including cash dividends, payments by a savings institution to
repurchase or otherwise acquire its stock, payments to shareholders of another
savings institution in a cash-out merger and other distributions charged against
capital. As of June 30, 1998, the Association was a Tier 1 savings institution
and is expected to continue to so qualify immediately following the consummation
of the Conversion. Based on the regulatory capital level of the Association at
June 30, 1998, the Association would have been permitted to make a capital
distribution to the Company of up to $23.2 million as of July 1, 1998. See
"Regulation - The Association - Capital Distribution Regulation." However,
because the accumulated earnings and profits tax attribute was retained by the
MHC in the MHC Reorganization, the Association's accumulated earnings and
profits at June 30, 1998 was approximately $12.5 million. Any dividends or other
distributions paid in excess of the Association's accumulated earnings and
profits would require a recapture of a portion of the Association's bad debt
reserves, resulting in a tax liability as discussed below. The Conversion will
re-unite the tax attribute retained by the MHC with the Association's retained
earnings and thus increase the Association's ability to pay dividends.
Any payment of dividends by the Association to the Company which would
be deemed to be drawn out of the Association's bad debt reserves would require a
payment of taxes at the then-current tax rate by the Association on the amount
of earnings deemed to be removed from the reserves for such distribution. The
Association does not intend to make any distribution to the Company that would
create such a federal tax liability. See "Taxation."
Unlike the Association, the Company is not subject to the
aforementioned regulatory restrictions on the payment of dividends to its
shareholders, although the source of such dividends may eventually be dependent,
in part, upon dividends from the Association in addition to the net proceeds
retained by the Company and earnings thereon. The Company is subject, however,
to the requirements of Delaware law which generally limits dividends to an
amount equal to the excess of the net assets of the Company (the amount by which
total assets exceed total liabilities) over its statutory capital, or if there
is no such excess, to its net profits for the current and/or immediately
preceding fiscal year.
MARKET FOR COMMON STOCK
There is an established market for Mid-Tier Holding Company Common
Stock which is currently listed on The Nasdaq Stock Market under the symbol,
"CMSV," and the Mid-Tier Holding Company had market makers as of _______, 1998.
As a newly formed company, the Company has never issued capital stock (other
than 100 shares issued to the Association, which will be canceled upon
consummation of the Conversion) and consequently there is no established market
for the Common Stock. It is expected that the Common Stock will be more liquid
than the Mid-Tier Holding Company Common Stock since there will be
significantly more outstanding shares owned by the public. Public Mid-Tier
Holding Company Shares (including shares held in the Dividend Reinvestment Plan)
will automatically, without further action by the holders thereof, be converted
into and become a right to receive a number of shares of Common Stock that is
determined pursuant to the Exchange Ratio. See "The Conversion Stock Pricing,
Exchange Ratio and Number of Shares to be Issued."
The Company has applied to have its Common Stock listed on The Nasdaq
Stock Market under the Mid-Tier Holding Company's previous symbol "CMSV." There
are various requirements for qualification and continued quotation of the Common
Stock on The Nasdaq Stock Market including a minimum number of market makers for
the Common Stock. The Company will seek to encourage and assist market makers to
make a market in its Common Stock, and, based upon the number of market makers
for the Mid-Tier Common Stock, believes that enough market makers will make a
market in the Common Stock in order to continue listing the Common Stock on The
Nasdaq Stock Market. Making a market involves maintaining bid and ask quotations
and being able, as principal, to effect transactions in reasonable quantities at
those quoted prices, subject to various securities laws and other regulatory
requirements. Although not legally or contractually required to do so, FBR has
advised the Company that upon completion of the Conversion, it intends to act as
a market maker in the Common Stock.
Additionally, the development of a public market having the desirable
characteristics of depth, liquidity and orderliness depends on the existence of
willing buyers and sellers, the presence of which is not within the control of
33
<PAGE> 35
the Company, the Association or any market maker. In the event that
institutional investors buy a relatively large proportion of the Offering, the
number of active buyers and sellers of the Common Stock at any particular time
may be limited. There can be no assurance that persons purchasing Conversion
Stock will be able to sell their shares at or above the Purchase Price.
Therefore, purchasers of Conversion Stock should have a long-term investment
intent and should recognize that a possibly limited trading market may make it
difficult to sell the Common Stock after the Conversion and may have an adverse
effect on the price of the Common Stock.
As of the date of this Prospectus, there were 5,103,920 shares of
Mid-Tier Holding Company Common Stock outstanding, including 2,483,816 publicly
held shares, which were held of record by approximately 931 registered
shareholders. The following table shows the high and low per share sales prices
of Mid-Tier Holding Company Common Stock as reported by The Nasdaq Stock Market
and the dividends declared per share during the periods indicated. Such
quotations reflect inter-dealer prices, without retail markup, markdown or
commission, and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
Dividends Declared
QUARTER ENDED High Low Per Share
- --------------------------- ------- ------- ------------------
<S> <C> <C> <C>
March 31, 1996 ............ $ 17.00 $ 15.50 $ .175
June 30, 1996 ............. 16.00 14.25 .200
September 30, 1996 ........ 17.00 15.75 .200
December 31, 1996 ......... 20.75 16.25 .200
March 31, 1997 ............ 20.625 18.50 .225
June 30, 1997 ............. 22.50 19.625 .225
September 30, 1997 ........ 37.25 21.75 .225
December 31, 1997 ......... 39.75 32.25 .225
March 31, 1998 ............ 41.00 33.625 .225
June 30, 1998 ............. 39.00 31.00 .225
September 30, 1998 ........ 37.25 21.00 .225
</TABLE>
REGULATORY CAPITAL
At June 30, 1998, the Association exceeded all of the regulatory
capital requirements applicable to it. The table on the following page sets
forth the Association's historical regulatory capital at June 30, 1998 and the
pro forma regulatory capital of the Association after giving effect to the
Conversion, based upon the sale of the number of shares shown in the table. The
pro forma regulatory capital amounts reflect the receipt by the Association of
50% of the net Conversion proceeds (less the amounts to be loaned to the ESOP
and contributed to the 1999 Recognition Plan). The pro forma risk-based capital
amounts assume the investment of the net proceeds received by the Association in
assets which have a risk-weight of 50% under applicable regulations, as if such
net proceeds had been received and so applied at June 30, 1998.
34
<PAGE> 36
<TABLE>
<CAPTION>
Pro Forma at June 30,1998 Based on
-------------------------------------------------------------------------------
4,871,209 5,730,659 6,590,357 7,578,961
Shares Sold Shares Sold Shares Sold Shares Sold
Historical at at $10.00 at $10.00 at $10.00 at $10.00
June 30, 1998 Per Share Per Share Per Share Per Share
------------------- ------------------- ------------------- ------------------- -------------------
Percent of Percent of Percent of Percent of Percent of
Amount Assets(1) Amount Assets(1) Amount Assets(1) Amount Assets(1) Amount Assets(1)
-------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP capital ......... $ 73,308 9.6% $100,891 12.9% $104,127 13.2% $107,364 13.6% $111,087 14.0%
Tangible capital:
Actual ............. 73,742 9.6% 91,555 11.7% $ 94,791 12.1% $ 98,028 12.4% 101,751 12.8%
Requirement ........ 11,486 1.5 11,753 1.5 11,802 1.5 11,851 1.5 11,906 1.5
-------- ---- -------- ----- -------- ----- -------- ----- -------- -----
Excess ............. $ 62,256 8.1% $ 79,802 10.2% $ 82,989 10.6% $ 86,177 10.9% $ 89,844 11.3%
======== ==== ======== -==== ======== ===== ======== ===== ======== =====
Core capital(2):
Actual ............. 73,742 9.6% 91,555 11.7% $ 94,791 12.1% $ 98,028 12.4% $101,751 12.8%
Requirement ........ 22,972 3.0 23,507 3.0 23,604 3.0 23,701 3.0 23,813 3.0
-------- ---- -------- ----- -------- ----- -------- ----- -------- -----
Excess ............. $ 50,770 6.6% $ 68,048 8.7% $ 71,187 9.1% $ 74,327 9.4% $ 77,938 9.8%
======== ==== ======== ===== ======== ===== ======== ===== ======== =====
Risk-based capital(2):
Actual ............. $ 76,509 17.3% $ 94,322 21.79% $ 97,558 22.46% $100,795 23.12% $104,518 23.87%
Requirement ........ 33,913 8.0 34,625 8.00 34,755 8.00 34,884 8.00 35,033 8.00
-------- ---- -------- ----- -------- ----- -------- ----- -------- -----
Excess ............. $ 42,596 9.3% $ 59,697 13.79% $ 62,803 14.45% $ 65,911 15.12% $ 69,485 15.87%
======== ==== ======== ===== ======== ===== ======== ===== ======== =====
</TABLE>
- --------------------------------
(1) Adjusted total or adjusted risk-weighted assets, as appropriate, except that
the ratios regarding GAAP capital are based on total assets.
(2) Does not reflect the interest rate risk component to be added to the
risk-based capital requirements or, in the case of the core capital
requirement, the 4.0% requirement to be met in order for an institution to
be "adequately capitalized" under applicable laws and regulations. See
"Regulation - The Association - Regulatory Capital Requirements."
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<PAGE> 37
CAPITALIZATION
The following table presents the historical capitalization of the
Mid-Tier Holding Company at June 30, 1998, and the pro forma consolidated
capitalization of the Company after giving effect to the Conversion, based upon
the sale of the number of shares shown below and the other assumptions set forth
under "Pro Forma Data."
<TABLE>
<CAPTION>
The Company - Pro Forma
Based Upon Sale at $10.00 Per Share
--------------------------------------------------------------
7,578,961
Shares(1)
The Mid-Tier Holding 4,871,209 Shares 5,730,659 Shares 6,590,357 Shares (15% above
Company Historical (Minimum of (Midpoint of (Maximum of Maximum of
Capitalization Range) Range) Range) Range)
-------------------- ---------------- ---------------- ----------------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Deposits(2) ................................... $ 574,383 $ 574,383 $ 574,383 $ 574,383 $ 574,383
Borrowings .................................... 91,513 91,513 91,513 91,513 91,513
--------- --------- --------- --------- ---------
Total deposits and borrowings ................. $ 665,896 $ 665,896 $ 665,896 $ 665,896 $ 665,896
========= ========= ========= ========= =========
Shareholders' equity:
Preferred Stock, par value $1.00, 10,000,000
shares authorized; none to be issued ..... $ -- $ -- $ -- $ -- $ --
Common Stock, par value $1.00,
60,000,000 shares authorized; shares to
be issued as reflected(3) ............... 5,100 9,393 11,050 12,708 14,614
Additional paid-in capital(4) .............. 30,621 73,844 80,722 87,601 95,514
Retained earnings(5) ....................... 49,347 49,347 49,347 49,347 49,347
Net unrealized loss on securities available
for sale ............................... (433) (433) (433) (433) (433)
Less:
Common Stock currently held by the ESOP .. (1,227) (1,227) (1,227) (1,227) (1,227)
Common Stock to be acquired by the
ESOP(6) ................................ -- (3,897) (4,585) (5,272) (6,063)
Common Stock acquired or to be acquired
by Recognition Plans(7) ................ (330) (2,278) (2,622) (2,966) (3,362)
--------- --------- --------- --------- ---------
Total shareholders' equity .................... $ 83,078 $ 124,749 $ 132,252 $ 139,758 $ 148,390
========= ========= ========= ========= =========
(FOOTNOTES ON FOLLOWING PAGE)
</TABLE>
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<PAGE> 38
(1) As adjusted to give effect to an increase in the number of shares which
could occur due to an increase in the Estimated Valuation Range of up
to 15% to reflect changes in market and financial conditions following
the commencement of the Offerings.
(2) Does not reflect withdrawals from deposit accounts for the purchase of
Conversion Stock in the Offerings. Such withdrawals would reduce pro
forma deposits by the amount of such withdrawals.
(3) Assumes that (i) the 2,483,816 Public Mid-Tier Holding Company Shares
currently outstanding are converted into 4,521,291, 5,319,341,
6,117,143, and 7,034,664 Exchange Shares at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range,
respectively, (ii) there are no fractional Exchange Shares, and (iii)
the number of shares of Conversion Stock shown are sold in the
Offerings. No effect has been given to the issuance of additional
shares of Common Stock pursuant to the proposed 1999 Stock Option Plan.
See "Pro Forma Data" and "Management - New Stock Benefit Plans - Stock
Option Plan."
(4) The pro forma additional paid-in capital includes the approximately
$206,000 to be acquired by the Association upon the merger of the MHC
into the Association.
(5) The retained earnings of the Association will be substantially
restricted after the Conversion by virtue of the liquidation account to
be established in connection with the Conversion. See "The Conversion -
Liquidation Rights." In addition, certain distributions from the
Association's retained earnings may be treated as being from its
accumulated bad debt reserve for tax purposes, which would cause the
Association to have additional taxable income. See "Taxation."
(6) Assumes that 8% of the Conversion Stock sold in the Offerings will be
purchased by the ESOP, which is reflected as a reduction of
shareholders' equity. The ESOP shares will be purchased with funds
loaned to the ESOP by the Company. See "Pro Forma Data" and "Management
- Employee Stock Ownership Plan."
(7) The Company intends to adopt the 1999 Recognition Plan and to submit
such plan to shareholders at an annual or special meeting of
shareholders held at least six months following the consummation of the
Conversion. If the plan is approved by shareholders, the Company
intends to contribute sufficient funds to the trust created under the
1999 Recognition Plan to enable the trust to purchase a number of
shares of Common Stock equal to 4% of the Conversion Stock sold in the
Offerings. Assumes that shareholder approval has been obtained and that
the shares have been purchased in the open market at the Purchase
Price. However, in the event the Company issues authorized but unissued
shares of Common Stock to the 1999 Recognition Plan in the amount of 4%
of the Conversion Stock sold in the Offerings, the voting interests of
shareholders would be diluted by approximately 2.0%. The shares are
reflected as a reduction of shareholders' equity. See "Pro Forma Data"
and "Management - New Stock Benefit Plans - Recognition Plan."
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<PAGE> 39
PRO FORMA DATA
The actual net proceeds from the sale of the Conversion Stock cannot be
determined until the Conversion is completed. However, net proceeds are
currently estimated to be between $47.3 million and $64.4 million (or $74.2
million in the event the Estimated Valuation Range is increased by 15%) based
upon the following assumptions: (i) all shares of Conversion Stock will be sold
in the Subscription Offering; (ii) no fees will be paid to FBR on shares
purchased by (x) the ESOP and any other employee benefit plan of the Company or
the Association or (y) officers, directors, employees and members of their
immediate families, which purchases are estimated to aggregate 21,600 shares of
Conversion Stock at the midpoint of the Estimated Valuation Range; (iii) FBR
will receive a fee equal to .75% of the aggregate Purchase Price for sales in
the Subscription Offering (excluding the sale of shares to the ESOP, employee
benefit plans, and officers, directors, employees and their immediate families),
with such fee estimated to be $344,000 and $454,000 at the minimum and maximum
of the Estimated Valuation Range (or $521,000 in the event the Estimated
Valuation Range is increased by 15%); and (iv) total other expenses, excluding
the marketing fees paid to FBR, will be $1.1 million. Actual expenses may vary
from those estimated.
Pro forma consolidated net income and shareholders' equity of the
Company have been calculated for the six months ended June 30, 1998 and for the
year ended December 31, 1997 as if the Conversion Stock to be issued in the
Offerings had been sold at the beginning of the respective periods and the net
proceeds had been invested at 5.41% which represents the yield on one-year U.S.
Government securities at June 30, 1998 (which, in light of changes in interest
rates in recent periods, are deemed by the Company and the Association to more
accurately reflect pro forma reinvestment rates than the arithmetic average
method). The effect of withdrawals from deposit accounts for the purchase of
Conversion Stock has not been reflected. A marginal tax rate of 37.65% has been
assumed for each of the periods resulting in an after-tax yield of 3.37%.
Historical and pro forma per share amounts have been calculated by dividing
historical and pro forma amounts by the indicated number of shares of Common
Stock. See Note 4 to the tables below. No effect has been given in the pro forma
shareholders' equity calculations for the assumed earnings on the net proceeds.
As discussed under "Use of Proceeds," the Company intends to make a loan to fund
the purchase of 8% of the Conversion Stock by the ESOP and retain 50% of the net
proceeds from the Offerings.
No effect has been given in the tables to the issuance of additional
shares of Common Stock equal to 10% of the Conversion Stock pursuant to the
proposed 1999 Stock Option Plan. See "Management - New Stock Benefit Plans Stock
Option Plan." The table below gives effect to the 1999 Recognition Plan, which
is expected to be adopted by the Company following the Conversion and presented
(together with the 1999 Stock Option Plan) to shareholders for approval at an
annual or special meeting of shareholders to be held at least six months
following the consummation of the Conversion. If the 1999 Recognition Plan is
approved by shareholders, the 1999 Recognition Plan intends to acquire an amount
of Common Stock equal to 4% of the shares of Conversion Stock sold in the
Offerings, either through open market purchases or from authorized but unissued
shares of Common Stock. The table below assumes that shareholder approval has
been obtained, as to which there can be no assurance, and that the shares
acquired by the 1999 Recognition Plan are purchased in the open market at the
Purchase Price. No effect has been given to (i) the Company's results of
operations after the Conversion, (ii) the market price of the Common Stock after
the Conversion, or (iii) a less than 4% purchase by the 1999 Recognition Plan.
The following pro forma information may not be representative of the
financial effects of the foregoing transactions at the dates on which such
transactions actually occur and should not be taken as indicative of future
results of operations. Pro forma shareholders' equity represents the difference
between the stated amount of assets and liabilities of the Company computed in
accordance with GAAP.
THE PRO FORMA SHAREHOLDERS' EQUITY IS NOT INTENDED TO REPRESENT THE
FAIR MARKET VALUE OF THE COMMON STOCK AND MAY BE DIFFERENT THAN AMOUNTS THAT
WOULD BE AVAILABLE FOR DISTRIBUTION TO SHAREHOLDERS IN THE EVENT OF LIQUIDATION.
38
<PAGE> 40
<TABLE>
<CAPTION>
At or For the Six Months Ended June 30, 1998
--------------------------------------------------------------
7,578,961
4,871,209 5,730,659 6,590,357 Shares Sold
Shares Sold Shares Sold Shares Sold at $10.00 Per
at $10.00 at $10.00 at $10.00 Share (15%
Per Share Per Share Per Share above
(Minimum of (Midpoint (Maximum of Maximum
Range) of Range) Range) of Range)(8)
------------ ------------ ------------ ------------
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds ................................ $ 48,712 $ 57,307 $ 65,904 $ 75,790
Less offering expenses and commissions ........ 1,396 1,456 1,516 1,583
------------ ------------ ------------ ------------
Estimated net proceeds ...................... 47,316 55,851 54,388 74,207
Less: Shares purchased by the ESOP ............ (3,897) (4,835) (5,272) (6,063)
Shares to be purchased by the
1999 Recognition Plan ................... (1,948) (2,292) (2,636) (3,032)
------------ ------------ ------------ ------------
Total estimated net proceeds, as adjusted(1) .. $ 41,471 $ 48,974 $ 56,480 $ 65,112
============ ============ ============ ============
Net income:
Historical .................................. $ 2,511 $ 2,511 $ 2,511 $ 2,511
Pro forma income on net proceeds,
as adjusted ............................... 699 825 952 1,097
Pro forma ESOP adjustment(2) ................ (81) (95) (110) (126)
Pro forma 1999 Recognition Plan
adjustment(3) ............................. (121) (143) (164) (189)
------------ ------------ ------------ ------------
Pro forma net income ........................ $ 3,008 $ 3,098 $ 3,189 $ 3,293
============ ============ ============ ============
Net income per share(4)(5):
Historical(6) ............................... $ 0.28 $ 0.24 $ 0.21 $ 0.18
Pro forma income on net proceeds, as adjusted 0.08 0.08 0.08 0.08
Pro forma ESOP adjustment(3) ................ (0.01) (0.01) (0.01) (0.01)
Pro forma 1999 Recognition Plan
adjustment(3) ............................. (0.01) (0.01) (0.01) (0.01)
------------ ------------ ------------ ------------
Pro forma net income per share(4)(5) ........ $ 0.34 $ 0.30 $ 0.27 $ 0.24
============ ============ ============ ============
Offering price to pro forma net
income per share (4) ........................ 14.7x 16.7x 18.5x 20.8x
============ ============ ============ ============
Shares utilized for earnings per share
calculation.................................. 8,886,097 10,454,240 12,022,371 13,825,724
============ ============ ============ ============
Shareholders' equity:
Historical(6) ............................... $ 83,278 $ 83,278 $ 83,278 $ 83,278
Estimated net proceeds ...................... 47,316 55,851 64,388 74,207
Less: Common Stock acquired
by the ESOP(2) ........................ (3,897) (4,585) (5,272) (6,063)
Common Stock to be acquired by
the 1999 Recognition Plan(3) .......... (1,948) (2,292) (2,636) (3,032)
------------ ------------ ------------ ------------
Pro forma shareholders' equity(5)(6)(7) ..... $ 124,749 $ 132,252 $ 139,758 $ 148,390
============ ============ ============ ============
Shareholders' equity per share(4):
Historical(6) ............................... $ 8.87 $ 7.54 $ 6.56 $ 5.69
Estimated net proceeds ...................... 5.04 5.05 5.07 5.08
Less: Common Stock acquired
by the ESOP(2) ........................ (0.41) (0.41) (0.41) (0.41)
Common Stock to be acquired by
the 1999 Recognition Plan(3) .......... (0.21) (0.21) (0.21) (0.21)
------------ ------------ ------------ ------------
Pro forma shareholders' equity
per share(5)(6)(7) ........................ $ 13.29 $ 11.97 $ 11.01 $ 10.15
============ ============ ============ ============
Shares outstanding(5) ......................... 9,392,500 11,050,000 12,707,500 14,613,625
============ ============ ============ ============
Offering price as a percentage of pro
forma shareholders' equity per share(4) ..... 75.2% 83.5% 90.8% 98.5%
============ ============ ============ ============
Exchange Ratio ................................ 1.8203 2.1416 2.4628 2.8322
============ ============ ============ ============
</TABLE>
39
<PAGE> 41
<TABLE>
<CAPTION>
At or For the Year Ended December 31, 1997
---------------------------------------------------------------
4,871,209 5,730,659 6,590,357 7,578,961
Shares Sold Shares Sold Shares Sold Shares Sold
at $10.00 at $10.00 at $10.00 at $10.00 Per
Per Share Per Share Per Share Share (15%
(Minimum of (Midpoint (Maximum of above Maximum
Range) of Range) Range) of Range)(8)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
(Dollars in Thousands, Except Per Share Amounts)
Gross proceeds ................................ $ 48,712 $ 57,307 $ 65,904 $ 75,790
Less offering expenses and commissions ........ 1,396 1,456 1,516 1,583
------------ ------------ ------------ ------------
Estimated net proceeds ...................... 47,316 55,851 64,388 74,207
Less: Shares purchased by the ESOP ............ (3,897) (4,585) (5,272) (6,063)
Shares to be purchased by the
1999 Recognition Plan ................... (1,948) (2,292) (2,636) (3,032)
------------ ------------ ------------ ------------
Total estimated net proceeds, as adjusted(1) .. $ 41,471 $ 48,974 $ 56,480 $ 65,112
============ ============ ============ ============
Net income:
Historical .................................. $ 5,356 $ 5,356 $ 5,356 $ 5,356
Pro forma income on net proceeds,
as adjusted ............................... 1,398 1,650 1,903 2,194
Pro forma ESOP adjustment(2) ................ (162) (191) (219) (252)
Pro forma 1999 Recognition Plan
adjustment(3) ............................. (243) (286) (329) (378)
------------ ------------ ------------ ------------
Pro forma net income ........................ $ 6,349 $ 6,529 $ 6,711 $ 6,920
============ ============ ============ ============
Net income per share(4)(5):
Historical .................................. $ 0.60 $ 0.51 $ 0.44 $ 0.39
Pro forma income on net proceeds, as adjusted 0.16 0.16 0.16 0.16
Pro forma ESOP adjustment(3) ................ (0.02) (0.02) (0.02) (0.02)
Pro forma 1999 Recognition Plan
adjustment(3) ............................. (0.03) (0.03) (0.03) (0.03)
------------ ------------ ------------ ------------
Pro forma net income per share(4)(5) ........ $ 0.71 $ 0.62 $ 0.55 $ 0.50
============ ============ ============ ============
Offering price to pro forma net
income per share (4) ........................ 14.1x 16.1x 18.2x 20.0x
============ ============ ============ ============
Shares utilized for earnings per share
calculation ................................. 8,899,087 10,469,522 12,039,946 13,845,935
============ ============ ============ ============
Shareholders' equity:
Historical(6) ............................... $ 81,459 $ 81,459 $ 81,459 $ 81,459
Estimated net proceeds ...................... 47,316 55,851 64,388 74,207
Less: Common Stock acquired
by the ESOP(2) ........................ (3,897) (4,585) (5,272) (6,063)
Common Stock to be acquired by
the 1999 Recognition Plan(3) .......... (1,948) (2,292) (2,636) (3,032)
------------ ------------ ------------ ------------
Pro forma shareholders' equity(5)(6)(7) ..... $ 122,930 $ 130,433 $ 137,939 $ 146,571
============ ============ ============ ============
Shareholders' equity per share(4):
Historical (6) .............................. 8.67 7.37 6.41 5.57
Estimated net proceeds ...................... 5.04 5.05 5.07 5.08
Less: Common Stock acquired
by the ESOP(2) ........................ (0.41) (0.41) (0.41) (0.41)
Common Stock to be acquired by
the 1999 Recognition Plan(3) .......... (0.21) (0.21) (0.21) (0.21)
------------ ------------ ------------ ------------
Pro forma shareholders' equity
per share(5)(6)(7) ........................ $ 13.09 $ 11.80 $ 10.86 $ 10.03
============ ============ ============ ============
Shares outstanding (5) ........................ 9,392,500 11,050,000 12,707,500 14,613,625
============ ============ ============ ============
Offering price as a percentage of pro
forma shareholders' equity per share(4) ..... 76.4% 84.8% 92.1% 99.7%
============ ============ ============ ============
Exchange Ratio ................................ 1.8203 2.1416 2.4628 2.8322
============ ============ ============ ============
</TABLE>
40
<PAGE> 42
- ----------
(1) Estimated net proceeds, as adjusted, consist of the estimated net
proceeds from the Offerings minus (i) the proceeds attributable to the
purchase by the ESOP and (ii) the value of the shares to be purchased
by the 1999 Recognition Plan, subject to shareholder approval, after
the Conversion at an assumed purchase price of $10.00 per share.
(2) It is assumed that 8% of the shares of Conversion Stock sold in the
Offerings will be purchased by the ESOP with funds loaned by the
Company. The Company and the Association intend to make annual
contributions to the ESOP in an amount at least equal to the principal
and interest requirement of the debt. The pro forma net income assumes
(i) that the loan to the ESOP is payable over 15 years, with the ESOP
shares having an average fair value of $10.00 per share in accordance
with SOP 93-6, entitled "Employers' Accounting for Employee Stock
Ownership Plans," of the AICPA and (ii) the effective tax rate was
37.7% for each of the periods. See "Management - Employee Stock
Ownership Plan."
(3) It is assumed that the 1999 Recognition Plan will purchase, following
shareholder approval of such plan, a number of shares of Common Stock
equal to 4% of the shares of Conversion Stock sold in the Offerings for
issuance to directors, officers and employees. Funds used by the 1999
Recognition Plan to purchase the shares initially will be contributed
to the 1999 Recognition Plan by the Company. It is further assumed that
the shares were acquired by the 1999 Recognition Plan at the beginning
of each of the periods presented in open market purchases at the
Purchase Price and that 10% and 20% of the amount contributed, net of
taxes, was an amortized expense during the six months ended June 30,
1998 and the year ended December 31, 1997, respectively. The issuance
of authorized but unissued shares of Common Stock pursuant to the 1999
Recognition Plan in the amount of 4% of the Conversion Stock sold in
the Offerings would dilute the voting interests of shareholders by
approximately 2.0% and under such circumstances pro forma net income
per share for the (i) six months ended June 30, 1998 would be $.33,
$.29, $.25 and $.24 at the minimum, midpoint, maximum and 15% above the
maximum of the Estimated Valuation Range, respectively, and pro forma
shareholders' equity per share at June 30, 1998 would be $13.01 $11.73,
$10.77 and $9.95 at the minimum, midpoint maximum and 15% above the
maximum of such range, respectively, and (ii) the year ended December
31, 1997 would be $.71, $.62, $.55 and $.50 at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range,
respectively, and pro forma shareholders' equity per share at December
31, 1997 would be $12.82, $11.56, $10.63 and $9.83 at the minimum,
midpoint, maximum and 15% above the maximum of such range,
respectively. There can be no assurance that the actual purchase price
of shares purchased by or issued to the 1999 Recognition Plan will be
equal to the Purchase Price. See "Management - New Stock Benefit Plans
- Recognition Plan."
(4) The net income per share calculations (i) for the six months ended June
30, 1998 are based upon 8,886,097, 10,545,240, 12,022,371 and
13,825,724 shares of Common Stock at the minimum, midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, respectively,
which amounts include 4,521,291, 5,319,341, 6,117,143, and 7,034,664
Exchange Shares, respectively, and exclude, in accordance with
Statement of Position 93-6 entitled "Employers Accounting for Employee
Stock Ownership Plans", 505,707, 596,171, 685,655 and 787,106 shares,
respectively, representing the ESOP shares which have not been
committed for release during the six months ended June 30, 1998 and
(ii) for the year ended December 31, 1997 are based upon 8,899,087,
10,469,522, 12,039,946 and 13,845,935 shares of Common Stock at the
minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range respectively, which amounts include 4,521,291,
5,319,341, 6,117,143 and 7,034,664 Exchange Shares, respectively, and
exclude 495,717, 580,889, 667,080 and 767,896 shares, respectively,
representing ESOP shares which have not been committed for release
during such period. Assuming the uncommitted ESOP shares were not
subtracted from the number of shares of Common Stock outstanding at
June 30, 1998, the offering price as a multiple of pro forma net income
per share would be 15.6x, 17.8x, 19.9x and 22.2x at the minimum,
midpoint, maximum and 15% above the maximum of the Estimated Valuation
Range, respectively, and at December 31, 1997, the offering price as a
multiple of pro forma net income per share would be 14.8x, 16.9x, 18.9x
and 21.2x at the minimum, midpoint, maximum and 15% above the maximum
of the estimated Valuation Range, respectively. The historical net
income per share and historical shareholders' equity per share figures
represent the Mid-Tier Holding Company's historical per share amounts
divided by the Exchange Ratio. For a description of the Exchange Ratio,
see "The Conversion - Stock Pricing, Exchange Ratio and Number of
Shares to be Issued in the Conversion." For purposes of calculating pro
forma shareholders' equity per share, it is assumed that the number of
shares of Common Stock outstanding total 9,392,500, 11,050,000,
12,707,500 and 14,613,625 shares at the minimum, midpoint, maximum and
15% above the maximum of the Estimated Valuation Range.
(5) No effect has been given to the issuance of additional shares of Common
Stock pursuant to the 1999 Stock Option Plan, which will be adopted by
the Company following the Conversion and presented for approval by
shareholders at an annual or special meeting of shareholders of the
Company held at least six months following the consummation of the
Conversion. If the 1999 Stock Option Plan is approved by shareholders,
an amount equal to 10% of the Conversion Stock sold in the Offerings,
or 487,121, 573,066, 659,036 and 757,896 shares at the minimum,
midpoint, maximum and 15% above the
41
<PAGE> 43
maximum of the Estimated Valuation Range, respectively, will be
reserved for future issuance upon the exercise of options to be granted
under the 1999 Stock Option Plan. The issuance of Common Stock pursuant
to the exercise of options under the 1999 Stock Option Plan will result
in the dilution of existing shareholders' interests by approximately
4.9%. Assuming shareholder approval of the 1999 Stock Option Plan, that
all these options were exercised at the beginning of the period at an
exercise price of $10.00 per share and that the shares to fund the 1999
Recognition Plan are acquired through open market purchases at the
Purchase Price, (i) pro forma net income per share for the six months
ended June 30, 1998 would be $.32, $.28, $.25 and $.23 at the minimum,
midpoint, maximum and 15% above the maximum of such range,
respectively, and pro forma shareholders' equity per share at June 30,
1998 would be $13.12, $ 11.87, $10.95 and $10.15 at the minimum,
midpoint, maximum and 15% above the maximum of such range, respectively
and (ii) pro forma net income per share for the year ended December 31,
1997 would be $.68, $.59, $.53 and $.47 at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range,
respectively, and pro forma shareholders' equity per share at December
31, 1997 would be $12.94, $11.71, $10.81 and $10.03 at the minimum,
midpoint, maximum and 15% above the maximum of such range,
respectively. See "Management - New Share Benefit Plans - Stock Option
Plan."
(6) Includes the $200,000 to be acquired by the Association upon the merger
of the MHC into the Association.
(7) The retained earnings of the Association will be substantially
restricted after the Conversion by virtue of the liquidation account to
be established in connection with the Conversion. See "Dividend Policy"
and "The Conversion - Liquidation Rights." In addition, certain
distributions from the Association's retained earnings may be treated
as being from its accumulated bad debt reserve for tax purposes, which
would cause the Association to have additional taxable income. See
"Taxation - Federal Taxation." Pro form a shareholders' equity and pro
forma shareholders' equity per share do not give effect to the
liquidation account or the bad debt reserves established by the
Association for federal income tax purposes in the event of a
liquidation of the Association.
(8) As adjusted to give effect to an increase in the number of shares which
could occur due to an increase in the Estimated Valuation Range of up
to 15% to reflect changes in market and financial conditions following
the commencement of the Offerings.
42
<PAGE> 44
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
The condensed consolidated statements of operations of the Mid-Tier
Holding Company and its wholly owned subsidiary for the years ended December 31,
1997, the three months ended December 31, 1996, and the years ended September
30, 1996 and 1995 have been derived from the consolidated financial statements
audited by Deloitte & Touche LLP, independent auditors whose report thereon
appears elsewhere herein. The Consolidated Statements of Operations for the six
month periods ended June 30, 1998 and 1997 are unaudited and, in the opinion of
management, reflect all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the results for the unaudited
periods. The results of operations for the six month period ended June 30, 1998
is not necessarily indicative of the results that may be expected for the entire
fiscal year ended December 31, 1998. The condensed consolidated statements of
operations should be read in conjunction with the Consolidated Financial
Statements and related notes thereto contained elsewhere herein.
<TABLE>
<CAPTION>
For the For the Three
For the Six Months Year Ended Months Ended For the Years Ended
Ended June 30, December 31, December 31, September 30,
--------------------------- ------------ ------------- ----------------------
1998 1997 1997 1996 1996 1995
------- ------- ------- ------- ------- -------
(In Thousands except Per Share Data)
<S> <C> <C> <C> <C> <C> <C>
Interest income ............... $26,827 $24,577 $50,316 $11,896 $43,889 $37,720
Interest expense .............. 14,655 13,260 27,390 6,378 22,859 18,634
------- ------- ------- ------- ------- -------
Net interest income ........... 12,172 11,317 22,926 5,518 21,030 19,086
Provision for loan losses ..... 213 83 264 243 98 240
------- ------- ------- ------- ------- -------
Net interest income after
provision for loan losses. 11,959 11,234 22,662 5,275 20,932 18,846
------- ------- ------- ------- ------- -------
Other income ................. 1,756 1,862 4,185 1,225 3,544 3,394
Operating expense ............ 9,846 8,805 18,561 4,644 19,800 14,903
------- ------- ------- ------- ------- -------
Income before
provision for income taxes 3,869 4,291 8,286 1,856 4,676 7,337
Provision for income taxes .... 1,358 1,556 2,930 696 761 2,763
------- ------- ------- ------- ------- -------
Net income .................... $ 2,511 $ 2,735 $ 5,356 $ 1,160 $ 3,915 $ 4,574
======= ======= ======= ======= ======= =======
Basic earnings per share ...... $ 0.51 $ 0.55 $ 1.09 $ 0.24 $ 0.80 $ 0.94
======= ======= ======= ======= ======= =======
Diluted earnings per share .... $ 0.49 $ 0.54 $ 1.06 $ 0.23 $ 0.79 $ 0.94
======= ======= ======= ======= ======= =======
</TABLE>
43
<PAGE> 45
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Management's discussion and analysis is intended to provide assistance
and understanding of the financial condition and results of operations. The
information in this section should be read with the financial statements and the
notes to the financial statements beginning at page F-1. As a financial
institution, the results of operations are primarily dependent on net interest
income. Net interest income is a function of the yield earned in any one period
on the balances of loans and investments in the portfolio, offset by the
interest paid on deposits and borrowed funds outstanding during that same
period. Non-interest income consists primarily of fees and service charges,
gains on sale of loans and investments, and, depending on the period, real
estate operations which have either generated income or losses. The results of
operations can also be significantly impacted by the amount of provisions for
loan losses which are dependent upon, among other things, the size and
composition of the loan portfolio, loan quality, and loan trends. Operating
expenses consist primarily of employee compensation and benefits, occupancy
expenses, professional fees and federal deposit insurance premiums. Results of
operations are influenced by general economic and competitive conditions,
including changes in prevailing interest rates and the policies of regulatory
agencies.
BUSINESS STRATEGY
The Association's current business strategy is to operate as a
well-capitalized, profitable and independent community-oriented savings and loan
association dedicated to providing quality retail financial products and
personalized customer service. The Association has implemented this strategy by
emphasizing retail deposits as its primary source of funds and investing a
substantial part of such funds in locally originated residential first mortgage
loans, in mortgage-backed and related securities and in other liquid investment
securities. Specifically, the Association's business strategy incorporates the
following elements: (i) operating as a community-oriented financial institution
and maintaining a strong core customer base by providing a high degree of
personalized banking services; (ii) emphasizing traditional lending and
investment activities; (iii) maintaining asset quality; (iv) maintaining a
strong retail deposit base; (v) managing interest rate risk while achieving
desirable levels of profitability; and (vi) pursuing controlled growth.
Highlights of the Association's business strategy are as follows:
COMMUNITY-ORIENTED INSTITUTION. The Association is committed to meeting
the financial needs of its customers in Palm Beach, Martin, St. Lucie, Indian
River and Brevard Counties in Florida, the communities in which it operates. In
that connection, the Association operates 21 conveniently located full service
branch offices as well as two loan production offices in these communities. The
Association has sufficient resources to provide a full range of personal and
business financial services, while being able to provide such services on a
personalized and efficient basis. The continued consolidation of the financial
services industry in Florida as a result of acquisitions by several regional and
super regional bank holding companies has resulted in a declining number of
locally based institutions that are fully knowledgeable about the communities in
which they operate. Management believes that these institutions are unable to
make decisions at the local level, thus reducing the responsiveness of such
institutions to the needs of the local community. Management believes that the
Association can be more effective in servicing its customers than many of its
non-local competitors because of its ability to quickly and effectively provide
senior management responses to customer needs and inquiries. The Association's
ability to provide these services is enhanced by the stability of the
Association's senior management, which has an average tenure with the
Association of 16 years.
EMPHASIS ON TRADITIONAL LENDING AND INVESTMENT ACTIVITIES. Since its
inception in 1955, the Association has emphasized residential real estate
financing and anticipates a continued commitment to financing the purchase or
improvement of residential real estate in its market area through either locally
originated or to a lesser extent, purchased loans or participation interests. As
of June 30, 1998, 75.63% of the Association's total loan portfolio consisted of
one-to four-family residential mortgage loans. To supplement local mortgage loan
originations and purchases, the Association invests in investment securities, as
well as mutual funds which invest primarily in mortgage-backed and
44
<PAGE> 46
related securities and government and agency securities, and mortgage-backed and
related securities that are primarily issued or guaranteed by the United States
Government or agencies thereof. By investing in insured or guaranteed assets,
the Association has reduced the credit risk of its asset base in exchange for
lower yields than would typically be available on commercial real estate and
multi-family real estate loans. Mortgage-backed securities and investment
securities and mutual funds represented 10.91% and 13.83% of total assets,
respectively, at June 30, 1998. Included in the Association's portfolio of
securities and investments are $59.5 million (7.77% of total assets) of
collateralized mortgage obligations ("CMOs") issued by private issuers. Such
securities are not insured or guaranteed by such issuers. See "Business of
Community Savings, F.A.-Securities Portfolio-Mortgage-Backed and Related
Securities."
MAINTAIN ASSET QUALITY. Management believes that high asset quality is
a key to long-term financial success and, as a result, the Association's
investments are characterized by a high level of asset quality and moderate
credit risk. At June 30, 1998, the Association's non-performing assets amounted
to $2.1 million, or 0.27%, of total assets. At June 30, 1998, the Association's
allowance for loan losses amounted to $2.8 million or 202.6% of the
Association's non-performing loans.
RETAIL DEPOSIT BASE. The Association has a strong retail deposit base
drawn from the 21 full-service offices located in its market area. At June 30,
1998, 38.5% of the Association's deposit base of $574.4 million consisted of
core deposits, which included non-interest-bearing demand accounts, NOW
accounts, passbook and statement savings accounts and money market deposit
accounts. Core deposits are considered to be a more stable and lower cost source
of funds than certificates of deposit or outside borrowings. The Association
will continue to emphasize retail deposits by maintaining its network of
full-service offices and providing depositors with a full range of accounts.
INTEREST RATE RISK MANAGEMENT. The Association has sought to manage
interest rate risk by investing a substantial portion of its assets in ARM loans
and other adjustable-rate loans, and in relatively short- and medium-term United
States Government and agency securities, investment securities, and in mutual
funds that invest in adjustable-rate securities, and in short- and medium-term
fixed-rate mortgage-backed and related securities. Borrowers in the currently
relatively stable interest rate environment tend to demand fixed-rate loans
instead of variable-rate loans. The Association offers loan products which offer
a fixed-rate for a short term, typically for five to seven years and then
convert to a one-year adjustable-rate loan. Of the Association's total
investment in loans, mortgage-backed and related securities and investment
securities at June 30, 1998, $331.4 million, or 46.23%, had adjustable interest
rates. The difference in the dollar amount of interest-earning assets and
interest-bearing liabilities expressed as a percentage of total assets, is a
measure of interest rate risk, and is referred to as an institution's interest
sensitivity rate gap. An interest sensitivity rate gap is considered positive if
interest-earning assets maturing or repricing in a particular time period exceed
interest-bearing liabilities maturing or repricing within the same time period.
An interest sensitivity rate gap is considered negative if interest-bearing
liabilities maturing or repricing in a particular time period exceed
interest-earning assets maturing or repricing within the same time period.
Management seeks to manage the Association's interest rate risk exposure by
monitoring the levels of interest rate sensitive assets and liabilities while
maintaining an acceptable interest rate spread. At June 30, 1998, total
interest-earning assets exceeded total interest-bearing liabilities maturing or
repricing in the same period by $3.4 million, representing a positive 0.44%
cumulative one-year gap ratio.
45
<PAGE> 47
AVERAGE BALANCE SHEET
The following tables set forth certain information relating to the
Mid-Tier Holding Company average balance sheet and reflects the average yield on
assets and average cost of liabilities for the periods indicated and the average
yields earned and rates paid. Such yields and costs are derived by dividing
income or expense by the average balance of assets or liabilities, respectively,
for the periods presented. The use of monthly average balances (except as noted
otherwise) instead of daily average balances has not caused any material
difference in the information presented.
<TABLE>
<CAPTION>
At June 30, For the Six Months Ended June 30,
------------------------ --------------------------------------
1998 1998
------------------------ --------------------------------------
Average Average
Balance Yield/Cost Balance Interest Yield/Cost
-------- ---------- -------- -------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Interest-earning assets (1):
Real estate loans .................. $506,704 7.76% $467,119 $18,377 7.87%
Consumer and other loans ........... 20,671 9.13 19,809 913 9.22
Mortgage-backed and
related securities ............... 83,495 7.16 88,532 3,174 7.17
Investment securities .............. 71,148 6.67 89,346 3,217 7.20
Other investments (1) .............. 34,730 6.25 36,788 1,146 6.23
-------- -------- -------
Total interest-earning assets .... 716,748 7.55 701,594 26,827 7.65
-------
Non-interest-earning assets .......... 48,740 46,527
-------- --------
Total assets ..................... $765,488 $748,121
======== ========
Interest-bearing liabilities:
Deposits ........................... $574,383 4.16 $571,282 11,976 4.19
Borrowed funds ..................... 91,513 6.62 77,967 2,679 6.87
-------- -------- -------
Total interest-bearing liabilities 665,896 4.50 649,249 14,655 4.51
-------
Non-interest-bearing liabilities ..... 16,514 16,606
--------
Total liabilities ................ 682,410 665,855
Shareholders' equity ................. 83,078 82,266
-------- --------
Total liabilities and shareholders'
equity ......................... $765,488 $748,121
======== ========
Net interest income .................. $12,172
=======
Net interest rate spread (3) ......... 3.05% 3.14%
====== ======
Net yield on interest-earning assets (4) 3.40% 3.47%
====== ======
Ratio of average interest-
earning assets to average
interest-bearing liabilities ....... 107.64% 108.06%
====== ======
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended June 30, For the Year Ended December 31,
------------------------------------- ------------------------------------
1997 1997
------------------------------------- ------------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- -------- ---------- ------- -------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Real estate loans .................. $381,169 $15,479 8.12% $392,782 $31,846 8.11%
Consumer and other loans ........... 18,408 817 8.88 18,316 1,644 8.98
Mortgage-backed securities ......... 103,089 3,768 7.31 99,884 7,330 7.34
Investment securities .............. 105,350 3,522 6.69 110,986 7,540 6.79
Other investments (1) .............. 33,643 991 5.89 31,851 1,956 6.14
-------- ------- -------- -------
Total interest-earning assets .... 641,659 24,577 7.66 653,819 50,316 7.70
------- -------
Non-interest-earning assets .......... 38,244 39,356
-------- --------
Total assets ..................... $679.903 $693,175
======== ========
Interest-bearing liabilities:
Deposits ........................... $531.512 11,031 4.15 $537,965 22,648 4.21
Borrowed funds ..................... 56,882 2,229 7.84 61,551 4,742 7.70
-------- ------- -------- -------
Total interest-bearing liabilities 588,394 13,260 4.51 599,516 27,390 4.57
------- -------
Non-interest-bearing liabilities ..... 14,229 14,837
-------- --------
Total liabilities ................ 602,623 614,353
Shareholders' equity ................. 77,280 78,822
-------- --------
Total liabilities and shareholders'
equity ......................... $679,903 $693,175
======== ========
Net interest income .................. $11,317 $22,926
======= =======
Net interest rate spread (2) ......... 3.15% 3.13%
====== ======
Net yield on interest-earning assets (3) 3.53% 3.51%
====== ======
Ratio of average interest-
earning assets to average
interest-bearing liabilities ....... 109.05% 109.06%
====== ======
</TABLE>
- --------------------------
(1) Includes interest-earning deposits and FHLB stock.
(2) Net interest-rate spread represents the difference between the average yield
earned on interest-earning assets and the average rate paid on
interest-bearing liabilities.
(3) Net yield on interest-earning assets represents net interest income as a
percentage of average interest-earning assets.
(Table continued on next page)
46
<PAGE> 48
<TABLE>
<CAPTION>
For the three months ended December 31, For the years ended September 30,
--------------------------------------- ------------------------------------
1996 1996
--------------------------------------- ------------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- -------- ---------- ------- -------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Real estate loans .................. $365,269 $ 7,427 8.13% $331,134 $26,765 8.09%
Consumer and other loans ........... 17,989 408 9.07 15,746 1,508 9.48
Mortgage-backed securities ......... 107,190 1,992 7.43 99,959 7,423 7.43
Investment securities .............. 93,399 1,578 6.76 87,280 5,700 6.53
Other investments (1) .............. 32,764 491 5.99 41,817 2,493 5.96
-------- ------- -------- -------
Total interest-earning assets .... 616,611 11,896 7.72 575,936 43,889 7.62
------- -------
Non-interest-earning assets .......... 35,425 36,068
-------- --------
Total assets ..................... $652,036 $612,004
======== ========
Interest-bearing liabilities:
Deposits ........................... $504,738 5,251 4.16 $478,955 19,247 4.02
Borrowed funds ..................... 55,063 1,127 8.19 42,416 3,612 8.52
-------- ------- -------- -------
Total interest-bearing liabilities 559,801 6,378 4.56 521,371 22,859 4.38
------- -------
Non-interest-bearing liabilities ..... 16,294 15,995
-------- --------
Total liabilities ................ 576,095 537,366
Shareholders' equity ................. 75,941 74,638
-------- --------
Total liabilities and shareholders'
equity ......................... $652,036 $612,004
======== ========
Net interest income .................. $ 5,518 $21,030
======= =======
Net interest rate spread (2) ......... 3.16% 3.24%
====== ======
Net yield on interest-earning assets (3) 3.58% 3.65%
====== ======
Ratio of average interest-
earning assets to average
interest-bearing liabilities ....... 110.15% 110.47%
====== ======
</TABLE>
<TABLE>
<CAPTION>
For the years ended September 30,
------------------------------------
1995
------------------------------------
Average Average
Balance Interest Yield/cost
------- -------- ----------
<S> <C> <C> <C>
Interest-earning assets:
Real estate loans .................. $308,793 $23,661 7.66%
Consumer and other loans ........... 13,056 1,197 9.17
Mortgage-backed securities ......... 53,349 4,198 7.87
Investment securities .............. 83,650 5,945 7.11
Other investments (1) .............. 46,444 2,719 5.85
-------- -------
Total interest-earning assets .... 505,292 37,720 7.46
-------
Non-interest-earning assets .......... 39,263
--------
Total assets ..................... $544,555
========
Interest-bearing liabilities:
Deposits ........................... $429,893 15,679 3.65
Borrowed funds ..................... 29,086 2,955 10.16
-------- -------
Total interest-bearing liabilities 458,979 18,634 4.06
-------
Non-interest-bearing liabilities ..... 16,313
--------
Total liabilities ................ 475,292
Shareholders' equity ................. 69,263
--------
Total liabilities and shareholders'
equity ......................... $544,555
========
Net interest income .................. $19,086
=======
Net interest rate spread (2) ......... 3.40%
======
Net yield on interest-earning assets (3) 3.78%
======
Ratio of average interest-
earning assets to average
interest-bearing liabilities ....... 110.09%
======
</TABLE>
- --------------------
(1) The average balances of loans include non-performing loans, interest on
which is recognized on a cash basis.
(2) Includes interest-earning deposits and FHLB stock.
(3) Net interest-rate spread represents the difference between the average
yield earned on interest-earning assets and the average rate paid on
interest-bearing liabilities.
(4) Net yield on interest-earning assets represents net interest income as
a percentage of average interest-earning assets.
47
<PAGE> 49
RATE VOLUME ANALYSIS
Net interest income can also be analyzed in terms of the impact of
changing interest rates on interest-earning assets and interest-bearing
liabilities and changing the volume or amount of these assets and liabilities.
The following table represents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the interest income and interest expense during the
periods indicated. Information is provided in each category with respect to (i)
changes attributable to changes in average volume (change in average volume
multiplied by prior rate); (ii) changes attributable to changes in rate (changes
in rate multiplied by prior average volume); (iii) changes in rate-volume
(changes in rate multiplied by changes in average volume); and (iv) the net
change.
<TABLE>
<CAPTION>
Six months ended Year ended
June 30, 1998 vs. 1997 December 31, 1997 vs. 1996
-------------------------------------------- ------------------------------------------
Increase/Decrease Due to Increase/Decrease Due to
-------------------------------- -----------------------------
Total Total
Rate/ Increase Rate/ Increase
Volume Rate Volume (Decrease) Volume Rate Volume (Decrease)
------- ------- ------- ---------- ------- ------- ------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income:
Real estate loans .................. $ 3,490 $ (478) $ (115) $ 2,898 $4,981 $ 99 $ 1 $ 5,081
Consumer and other loans ........... 62 32 3 96 246 (94) (16) 136
Mortgage-backed securities ......... (532) (72) 10 (594) (6) (90) 3 (93)
Investment securities .............. (536) 269 (38) (305) 1,548 227 65 1,840
Other investments (1) .............. 93 57 6 155 (594) 75 (18) (537)
------- ------- ------- ------- ------- ------- ------- -------
Total interest-earning assets .... 2,577 (192) (135) 2,250 6,175 217 35 6,427
------- ------- ------- ------- ------- ------- ------- -------
Interest expense
Deposits ........................... 825 107 14 945 2,372 910 119 3,401
Borrowed funds ..................... 827 (276) (101) 450 1,630 (348) (152) 1,130
------- ------- ------- ------- ------- ------- ------- -------
Total interest-bearing liabilities 1,652 (170) (87) 1,395 4,002 562 (33) 4,531
------- ------- ------- ------- ------- ------- ------- -------
Net change in net interest income .... $ 925 $ (22) $ (48) $ 855 $ 2,173 $ (345) $ 68 $ 1,896
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Three months ended Year ended
December 31, 1996 vs. 1995 September 30, 1996 vs. 1995
----------------------------------------- -----------------------------------------
Increase/Decrease Due to Increase/Decrease Due to
----------------------------- -----------------------------
Total Total
Rate/ Increase Rate/ Increase
Volume Rate Volume (Decrease) Volume Rate Volume (Decrease)
------- ------- ------- ---------- ------- ------- ------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income:
Real estate loans .................. $ 947 $ 175 $ 27 $ 1,149 $ 1,711 $ 1,297 $ 96 $ 3,104
Consumer and other loans ........... 74 (9) (2) 63 247 54 10 311
Mortgage-backed securities ......... 523 (72) (23) 428 3,668 (235) (208) 3,225
Investment securities .............. 171 42 4 217 258 (485) (18) (245)
Other investments (1) .............. (157) (12) 3 (166) (271) 51 (6) (226)
------- ------- ------- ------- ------- ------- ------- -------
Total interest-earning assets .... 1,558 124 9 1,691 5,613 682 (126) 6,169
------- ------- ------- ------- ------- ------- ------- -------
Interest expense
Deposits ........................... 588 145 19 752 1,791 1,591 186 3,568
Borrowed funds ..................... 363 (60) (26) 277 1,354 (477) (220) 657
------- ------- ------- ------- ------- ------- ------- -------
Total interest-bearing liabilities 951 85 (7) 1,029 3,145 1,114 (34) 4,225
------- ------- ------- ------- ------- ------- ------- -------
Net change in net interest income .... $ 607 $ 39 $ 16 $ 662 $ 2,468 $ (432) $ (92) $ 1,944
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
- ---------------------
(1) Includes interest-earning deposits and FHLB stock.
48
<PAGE> 50
RESULTS OF OPERATIONS
Since the MHC Reorganization in October 1994, the Association has
pursued strategies designed to grow the overall size of the organization
(particularly the loan portfolio), while operating in a declining interest rate
environment. As a result, total assets increased by $205.2 million, or 36.6%, to
$765.5 million at June 30, 1998 from $560.3 million at September 30, 1994. In
order to remain competitive in its market area, the Association has aggressively
priced its deposit products to fund the growth in total assets. Consequently,
rates earned on interest-earning assets have fallen more rapidly than rates paid
on the interest-bearing liabilities with the result that the Association's
interest rate spread has declined to 3.14% for the six months ended June 30,
1998 from 3.69% for the year ended September 30, 1994. Net interest margin,
which represents net interest income as a percentage of average interest-earning
assets, has also decreased to 3.47% for the six months ended June 30, 1998 from
3.79% for the year ended September 30, 1994. As new assets are added to increase
total assets as well as to replace the normal decline in assets due to
amortization and maturity, the new assets typically have had a lower yield than
the assets being replaced due to the declining interest rate environment. The
Association has experienced increased operating costs related to operating as a
public company and as well as a result of rapid growth. Since September 1994,
the Association has opened four new branch offices and two loan production
offices, converted its entire computer system to a new PC-based wide area
network system and instituted a new incentive-based loan origination program.
The resulting increased compensation, equipment, and building costs have caused
other performance ratios such as return on average assets, return on average
equity, operating expense to average assets, and net interest income to
operating expenses to fluctuate between periods. The Association intends to
continue to increase its asset base as long as market conditions permit such
growth.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
GENERAL. Net income for the six months ended June 30, 1998 was $2.5
million, or $0.51 per share, a $224,000 decrease from $2.7 million, or $0.55 per
share, for the six months ended June 30, 1997. The decrease in net income was
primarily the result of increases in operating expense of $1.0 million, the
provision for loan losses of $130,000 and a decrease in other income of
$106,000, offset partially by a $855,000 increase in net interest income and a
$198,000 decrease in the provision for income taxes.
NET INTEREST INCOME. Net interest income increased to $12.2 million for
the six months ended June 30, 1998 from $11.3 million for the same period in
1997 primarily as a result of a $59.9 million increase in average
interest-earning assets to $701.6 million for the six months ended June 30, 1998
from $641.7 million for the same period in the prior year. Such increase
reflected a $87.4 million increase in the net loan portfolio, offset in part by
a $30.6 million decrease in the Association's aggregate securities portfolio.
The loan portfolio increased as a result of the Association's continued emphasis
on expanding its lending activities. The aggregate securities portfolio
decreased primarily due to calls and the normal amortization of the securities.
The average yield on interest-earning assets decreased to 7.65% for the six
months ended June 30, 1998 from 7.66% for the 1997 period, primarily as a result
of decreased average yields on real estate loans and mortgage-backed and related
securities as well as the increase in the net loan portfolio, which was offset
in part by increased average yields earned on investment securities and consumer
and other loans. The increase in interest income was partially offset by a $60.8
million increase in average interest-bearing liabilities to $649.2 million for
the six months ended June 30, 1998 from $588.4 million for the same period in
1997, primarily reflecting the growth of the Association's deposit portfolio and
additional FHLB advances. FHLB advances increased by $18.3 million, which
additional funds were used to support the increase in the loan portfolio. The
average yield on interest-bearing liabilities was unchanged at 4.51% for the six
months ended June 30, 1998 from the 1997 period. The weighted average cost of
deposits increased to 4.19 % for the six months ended June 30, 1998 from 4.15%
for the same period in 1997. This increase in the cost of deposits was offset by
a decrease in the cost of borrowed funds to 6.87% for the six months ended June
30, 1998 from 7.84% for the same period in 1997.
PROVISION FOR LOAN LOSSES. The Association maintains an allowance for
loan losses based upon a periodic evaluation of, among other things, known and
inherent risks in the loan portfolio, past loan loss experience, adverse
situations that may affect borrowers' ability to repay loans, the estimated
value of underlying loan collateral, volume and
49
<PAGE> 51
type of lending conducted by the Association and current economic conditions in
its market area. Loan loss provisions are based upon management's estimate of
the fair value of the collateral and the actual loss experience, as well as
guidelines applied by the OTS and the FDIC. Management reviews the adequacy of
its allowance for loan losses monthly through its asset classification review.
The provision for loan losses was $213,000 for the six months ended June 30,
1998, as compared to $83,000 for the six months ended June 30, 1997. The
$130,000 increase was due primarily to the establishment of reserves totalling
$108,000 on five single-family residential loans and one land loan. In addition,
the provision reflected additional reserves established for possible loan losses
due to the continued growth of the loan portfolio which amounted to 16.75%
during the period. The allowance for loan losses as a percentage of net loans
receivable was 0.52% and 0.63% at June 30, 1998 and 1997, respectively. In
management's judgement it was prudent to increase the allowance for loan losses
based upon, among other factors, the overall growth in its loan portfolio as
well as the Association's increasing involvement in residential and
non-residential construction lending secured primarily by properties located in
the Association's primary market area.
OTHER INCOME. Other income consists of servicing income and fee income
and service charges. Other income decreased $106,000 to $1.8 million for the six
months ended June 30, 1998, from $1.9 million for the same period in 1997. This
decrease reflected the amortization of the affordable housing tax credit
partnership of $140,000 during the six months ended June 30, 1998. The
partnership began amortizing during the second half of 1997 based on an
amortization schedule.
OPERATING EXPENSE. Operating expense increased $1.0 million to $9.8
million for the six month period ended June 30, 1998 from $8.8 million for the
same period in 1997. Increased employee compensation and benefits and occupancy
and equipment costs accounted for the majority of such increase, increasing
$741,000 and $107,000, respectively, during the six months ended June 30, 1998
as compared to the 1997 period. Additional costs related to the incentive-based
loan originators were incurred during the 1998 period as a result of increased
loan originations. In addition, increases in staffing and occupancy costs
resulted from two additional branch offices operating in the six months ended
June 30, 1998 that were not open during the same period in 1997, the
requirements of the new company wide computer network, which involved new
hardware and software depreciation expense and the hiring of additional
personnel for implementation and training, as well as the increased cost of
stock benefit programs reflecting the increase in market value of the Mid-Tier
Holding Company's Common Stock.
PROVISION FOR INCOME TAXES. The provision for income taxes was $1.4
million for the six months ended June 30, 1998 as compared to $1.6 million for
the same period in 1997 reflecting the $174,000 tax benefit received from the
affordable housing tax credit partnership during the six months ended June 30,
1998 which did not occur during 1997, as well as the decrease in net income.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1997 AND SEPTEMBER 30,
1996
GENERAL. The comparison periods vary due to the change in the fiscal
year of the Mid-Tier Holding Company and the Association from September 30 to
December 31. Net income for the year ended December 31, 1997 increased 38.5% to
$5.4 million, or $1.09 per share, compared to $3.9 million, or $0.80 per share
for the year ended September 30, 1996. This increase in net income was primarily
due to the special one time SAIF special assessment of $2.8 million (pre-tax)
which was recorded during September 1996 and which did not reoccur during the
year ended December 31, 1997. Net interest income increased $1.9 million to
$22.9 million for the year ended December 31, 1997 from $21.0 million for the
year ended September 30, 1996. Other income and the provision for income taxes
increased $641,000 and $2.2 million, respectively, for the year ended December
31, 1997 while operating expense decreased $1.2 million during this period due
to the absence of any special assessment.
INTEREST INCOME. Interest income for the year ended December 31, 1997
totaled $50.3 million, an increase of $6.4 million, or 14.6%, from $43.9 million
for the year ended September 30, 1996 reflecting, in part, the implementation of
the Association's growth strategy to increase the net loan portfolio and
securities held for sale. The increase was due primarily to an increase in
average interest-earning assets of $77.9 million to $653.8 million for the year
ended December 31, 1997 from $575.9 million for the year ended September 30,
1996, enhanced by an increase in the average yield on average interest-earning
assets to 7.70% for the year ended December 31, 1997 from 7.62% for the year
ended September
50
<PAGE> 52
30, 1996. Interest income on loans increased $5.2 million, or 18.5%, to $33.5
million for the year ended December 31, 1997 compared to $28.3 million for the
year ended September 30, 1996. Interest income on real estate loans increased by
$5.0 million, or 19.0%, to $31.8 million for the year ended December 31, 1997
from $26.8 million for the year ended September 30, 1996 primarily because of an
increase in the average balance of real estate loans of $61.6 million, or 18.6%,
and an increase in the average yield on real estate loans to 8.11% from 8.09%.
Interest income from investment securities and securities available for sale
increased by $1.7 million, or 19.5%, to $10.4 million for the year ended
December 31, 1997 from $8.7 million for the year ended September 30, 1996. The
increase in income from investment securities and securities available for sale
was primarily caused by an increase in the average balance of $23.7 million to
$111.0 million for the year ended December 31, 1997 from $87.3 million for the
year ended September 30, 1996, as well as an increase in the average yield to
6.79% for the year ended December 31, 1997 from 6.53% for the year ended
September 30, 1996. Interest income from other investments, which includes
interest-earning deposits and FHLB stock, decreased $537,000, or 21.5%, to $2.0
million for the year ended December 31, 1997 from $2.5 million for the year
ended September 30, 1996. The decrease in interest from other investments is
primarily attributable to a $10.0 million, or 23.9%, decrease in the average
balance of other investments to $31.8 million during 1997 from $41.8 million
during 1996, partially offset by an increase in the average yield on other
investments to 6.14% for the year ended December 31, 1997 from 5.96% for the
year ended September 30, 1996.
INTEREST EXPENSE. Interest expense increased $4.5 million, or 19.8%, to
$27.4 million for the year ended December 31, 1997 from $22.9 million for the
year ended September 30, 1996. Interest on deposits increased $3.4 million, or
17.7%, to $22.6 million for the year ended December 31, 1997 from $19.2 million
for the year ended September 30, 1996. The increase was due primarily to the
increase in average cost of deposits to 4.21% from 4.02%, as well as an increase
in the average balance of deposits of $59.0 million, or 12.3%, to $538.0 million
during 1997 from $479.0 million during 1996. In order to increase its market
share of total deposits during 1997 as well as to maintain its existing deposit
customers, the Association placed an increased emphasis on competitively pricing
its deposit products, including odd-term certificate of deposit products, as
well as existing certificate of deposit products, as part of its asset liability
policy. Certificates of deposit typically have a higher interest rate cost to
the Association than transaction accounts. Certificates of deposits and
transaction accounts increased $19.4 million and $17.6 million, respectively, at
December 31, 1997 as compared to September 30, 1996. Interest expense
attributable to borrowed funds increased $1.1 million, or 31.2%, to $4.7 million
for the year ended December 31, 1997 from $3.6 million for the year ended
September 30, 1996. The increase in interest expense attributable to borrowed
funds is due to an increase in the average balance of borrowed funds to $61.6
million during 1997 from $42.4 million during the 1996 period, partially offset
by a decrease in the average cost of borrowed funds to 7.70% for the year ended
December 31, 1997 from 8.52% for the 1996 period. During 1997, additional
advances from the FHLB were used primarily to fund the purchase of securities
with higher interest yields than the interest cost of the FHLB advances.
PROVISION FOR LOAN LOSSES. The provision for loan losses was $264,000
for the year ended December 31, 1997 as compared to $98,000 for the year ended
September 30, 1996. The increase in the provision for loan losses for 1997
reflected management's assessment that the allowance for loan losses needed to
be increased to absorb the risk inherent in the loan portfolio due to not only
growth in the loan portfolio (which increased by $62.7 million) but also due to
increased investment in commercial and multi-family real estate lending which is
deemed to have greater risk than single-family residential lending. The
allowance for loan losses as a percentage of net loans receivable at December
31, 1997 and September 30, 1996 was 0.59% and 0.61%, respectively.
OTHER INCOME. Other income consists of servicing income and fee income,
service charges, gain or loss on the sale or early maturity of securities
available for sale, loans, and other assets as well as income or loss from a
real estate venture in which a subsidiary of the Association was involved. Other
income increased $641,000, or 18.1%, to $4.2 million for the year ended December
31, 1997 from $3.5 million for the year ended September 30, 1996. Net gain on
sale of other assets of $617,000 in the year ended December 31, 1997 represented
the sale of stock of the Association's data service bureau which did not occur
during 1996. In addition, the year ended December 31, 1997 reflected a $3,000
net gain on the sale of loans as compared to a $225,000 net loss for the 1996
period. Fee income (which includes servicing income and other loan fees, and NOW
account and other customer fees) increased $310,000 to $3.6 million for the 1997
year from $3.3 million for the 1996 period as a result of fee structure changes
put in place during 1997.
51
<PAGE> 53
These increases were partially offset by a decrease in miscellaneous income of
$252,000. This decrease reflected the amortization of the affordable housing tax
credit partnership of $147,000 during the year ended December 31, 1997.
OPERATING EXPENSE. Total operating expense decreased $1.2 million to
$18.6 million for the year ended December 31, 1997 from $19.8 million for the
year ended September 30, 1996. Operating expense was higher in the 1996 period
primarily due to the one-time $2.8 million special assessment for
recapitalization of the SAIF. This special assessment was levied against
institutions having SAIF-insured deposits as of March 31, 1995, as mandated by
the DIF. Due to new reduced deposit insurance premium levels during 1997, the
1997 regular premium was $270,000 as compared to $1.1 million for the 1996
period. Employee compensation and benefits increased by $1.2 million to $9.0
million during the year ended December 31, 1997 from $7.8 million during the
year ended September 30, 1996 and occupancy and equipment expense increased
$478,000 to $5.1 million for the year ended December 31, 1997 from $4.6 million
for the 1996 period. These increases are primarily the result of the opening of
three new branch offices, the implementation of a new company wide computer
network, and additional costs related to the incentive-based loan originators.
These events involved construction costs, increases in staffing and depreciation
increases related to new computer hardware and software for the network.
PROVISION FOR INCOME TAXES. Provision for income taxes increased $2.2
million to $2.9 million for the year ended December 31, 1997 from $761,000 for
the 1996 period. This increase was the result of higher taxable income during
the year ended December 31, 1997. In addition, the 1996 period included the
reversal of a $1.1 million prior accrued liability which, in management's
opinion, was no longer required and which was reversed with a credit to the 1996
income tax provision.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
GENERAL. Net income for the three months ended December 31, 1996
increased 10.5% to $1.2 million, or $0.24 per share, compared to $1.1 million,
or $0.22 per share, for the three months ended December 31, 1995. The increase
in net income was due to increases in net interest income of $662,000 and in
other income of $145,000 offset partially by increases of $213,000 in the
provision for loan losses, $455,000 in operating expense and $29,000 in the
provision for income taxes.
NET INTEREST INCOME. Net interest income increased to $5.5 million for
the quarter ended December 31, 1996 from $4.9 million for the three months ended
December 31, 1995 primarily as a result of a $78.0 million increase in average
interest-earning assets to $616.6 million for the three months ended December
31, 1996 from $538.6 million for the same period in 1995. This increase was
offset in large part by a $74.8 million increase in average interest-bearing
liabilities to $559.8 million for the three months ended December 31, 1996 from
$485.0 million for the same period in 1995.
PROVISION FOR LOAN LOSSES. The provision for loan losses was $243,000
for the three months ended December 31, 1996 as compared to $30,000 for the same
period in 1995. The increase in the provision of $213,000 included a $200,000
transfer to the general loan valuation allowance from a specific reserve which
had been maintained with respect to an interest-earning deposit which was
pledged as collateral for the loan made to the ESOP and which was recovered
during the three months ended December 31, 1996. The allowance for loan losses
as a percentage of net loans receivable was 0.65% and 1.04% at December 31, 1996
and 1995, respectively.
OTHER INCOME. Other income consists of servicing income and fee income,
service charges, gain or loss on the sale of securities available for sale and
income or loss from the Association's subsidiary's real estate venture. Other
income increased $145,000 to $1.2 million for the three months ended December
31, 1996 from $1.1 million for the same period in 1995, due to the reversal of a
specific reserve of $200,000 referenced above which had been maintained with
respect to an interest-earning deposit which was pledged as collateral for the
ESOP loan and which was recovered during the 1996 period.
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<PAGE> 54
OPERATING EXPENSE. Operating expense increased $455,000, or 10.9%, to
$4.6 million for the three month period ended December 31, 1996, from $4.2
million from the same period in 1995, primarily due to increases of $135,000 in
advertising and promotion due to increased advertising designed to increase the
Association's market share, and $122,000 in employee compensation and benefits
as a result of increased staffing due to both a branch office opening and the
expansion of the Association's loan portfolio.
PROVISION FOR INCOME TAXES. Provision for income taxes increased
$29,000 to $696,000 for the three months ended December 31, 1996 as compared to
$667,000 for the same period in 1995 due to the increase in net income.
RESULTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, 1996 AND 1995
GENERAL. Net income for the year ended September 30, 1996 decreased
15.2% to $3.9 million, or $0.80 per share, compared to $4.6 million, or $0.94
per share, for the same period in 1995 due primarily to the $2.8 million special
SAIF assessment as well as a $1.8 million increase in other operating expense.
Such increases in expenses were partially offset by an increase in net interest
income of $1.9 million, a decrease of $142,000 in the provision for loan losses,
and a decrease in the provision for income taxes of $2.0 million.
INTEREST INCOME. Interest income for the year ended September 30, 1996
totaled $43.9 million, an increase of $6.2 million, or 16.4%, from $37.7 million
for the year ended September 30, 1995. The increase was due primarily to an
increase in average interest-earning assets of $70.6 million to $575.9 million
for the year ended September 30, 1996 from $505.3 million for the same period in
1995, enhanced by an increase in the average yield on average interest-earning
assets to 7.62% for the year ended September 30, 1996 from 7.46% for the year
ended September 30, 1995.
Interest income on loans increased $3.4 million, or 13.7%, to $28.3 million for
the year ended September 30, 1996 compared to $24.9 million for the same period
in 1995. Interest income on real estate loans increased by $3.1 million, or
13.1%, to $26.8 million for the year ended September 30, 1996 from $23.7 million
for the same period in 1995, primarily because of an increase in the average
yield on real estate loans to 8.09% from 7.66%, and an increase in the average
balance of real estate loans of $22.4 million, or 7.3%. Interest income on
consumer and other loans increased by $288,000 in 1996 as compared to 1995,
principally because of an increase in the average balance of such loans of $2.6
million to $15.7 million for the year ended September 30, 1996 from $13.1
million for the year ended September 30, 1995. Interest income on
mortgage-backed and related securities increased by $205,000, or 4.9%, to $4.4
million. The increase in interest income from mortgage-backed and related
securities is primarily attributable to an increase in the average balance of
mortgage-backed and related securities to $100.0 million from $53.3 million,
partially offset by a decrease in the average yield to 7.43% from 7.87%.
Interest income from investment securities and securities available for sale
increased by $2.8 million, or 46.7%, to $8.7 million for the year ended
September 30, 1996 from $5.9 million for the year ended September 30, 1995. The
increase in income from investment securities and securities available for sale
was primarily caused by an increase in the average balance of $3.6 million to
$87.3 million for the year ended September 30, 1996 from $83.7 million, offset
by a decrease in the average yield to 6.53% for the year ended September 30,
1996 from 7.11% for the year ended September 30, 1995. Interest income from
other investments decreased $226,000, or 8.3%, to $2.5 million for the year
ended September 30, 1996 from $2.7 million for the year ended September 30,
1995. The decrease in interest from other investments was primarily attributable
to a $4.6 million, or 9.9%, decrease in the average balance of other investments
to $41.8 million during 1996 from $46.4 million during 1995, partially offset by
an increase in the average yield on other investments to 5.96% for the year
ended September 30, 1996 from 5.85% for the year ended September 30, 1995.
INTEREST EXPENSE. Interest expense increased $4.2 million, or 22.7%, to
$22.9 million for the year ended September 30, 1996 from $18.6 million for the
same period in 1995. Interest on deposits increased $3.6 million, or 22.8%, to
$19.2 million for the year ended September 30, 1996 from $15.7 million for the
year ended September 30, 1995. The increase was due primarily to the increase in
average cost of deposits to 4.02% from 3.65%, and to a lesser degree, an
increase in the average balance of deposits of $49.1 million, or 11.4%, to
$479.0 million during 1996 from $429.9 million during 1995. In order to
maintain, and if possible, to increase its market share of total deposits,
during fiscal 1996 the Association placed an increased emphasis on certificate
of deposit products, including a new odd-term certificate of deposit product, as
well as existing certificate of deposit products as part of its asset liability
policy. Interest
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<PAGE> 55
expense attributable to borrowed funds increased $657,000, or 22.2%, to $3.6
million for the year ended September 30, 1996 from $3.0 million for the year
ended September 30, 1995. The increase in interest expense attributable to
borrowed funds is due to an increase in the average balance of borrowed funds to
$42.4 million during fiscal 1996 from $29.1 million during fiscal 1995,
partially offset by a decrease in the average cost of borrowed funds to 8.52%
for the year ended September 30, 1996 from 10.16% for the same period in 1995.
During fiscal year 1996, the Association used additional advances from the FHLB
primarily to fund the purchase of securities bearing higher yields than the rate
paid on such advances.
PROVISION FOR LOAN LOSSES. The Association's provision for loan losses
was $98,000 for the year ended September 30, 1996 as compared to $240,000 for
the year ended September 30, 1995. The decrease in the provision for loan losses
for fiscal 1996 was attributable to management's assessment that the allowance
for loan losses was sufficient to absorb risk inherent in the Association's
portfolio. The Association's allowance for loan losses as a percentage of net
loans receivable at September 30, 1996 and 1995 was 0.61% and 1.06%,
respectively.
OTHER INCOME. Other income during the periods consisted of servicing
income and fee income, service charges, gain or loss on the sale or call of
mortgage-backed and related securities and investment securities and income or
loss from a real estate venture in which a subsidiary was involved (which
subsidiary is no longer active). Other income increased $150,000, or 4.4%, to
$3.5 million for the year ended September 30, 1996 from $3.4 million for the
year ended September 30, 1995. The increase in other income was primarily due to
increases of $383,000 in NOW accounts and other customer fees (consisting of
fees from money orders, transaction accounts, safe deposit boxes, and overdraft
fees) and a $254,000 gain on the early maturity of an investment. These
increases were partially offset by a decrease in miscellaneous income of
$226,000 primarily as a result of a $279,000 decrease in the Association's
income from its subsidiary's real estate venture which reflected the smaller
number of closings on sales of units during fiscal 1996 as the Association's
real estate venture sold the majority of the units. In addition, the Association
recorded a net loss on the sale of loans of $225,000 during fiscal 1996 which
did not occur in fiscal 1995.
OPERATING EXPENSE. Total operating expense increased $4.9 million to
$19.8 million for the year ended September 30, 1996 from $14.9 million for the
year ended September 30, 1995. The increase in operating expense was primarily
attributable to a one-time $2.8 million special assessment for recapitalization
of the SAIF as discussed previously. In addition, employee compensation and
benefits increased by $492,000 to $7.8 million during 1996 from $7.3 million
during 1995, miscellaneous expense increased by $836,000 to $3.2 million during
1996 from $2.3 million during 1995, and the net gain on real estate owned
decreased by $569,000 to $243,000 for 1996 from $812,000 for 1995. During fiscal
year 1996, the Association received an additional payment of $470,000
representing a final settlement of the Association's claim with the State of
Florida Department of Insurance, as Receiver for International Medical Centers,
Inc. of Miami ("IMC"). Of this amount, $260,000 was classified as net gain on
real estate owned while the remaining $210,000 was classified as interest
income. During fiscal 1995, the Association received an initial settlement of
this claim of $816,000 which was classified as net gain on real estate owned.
Occupancy and equipment expense increased $75,000 to $4.6 million for 1996 from
$4.5 million for 1995 primarily due to the opening of a new office, and
advertising and promotion increased $71,000 to $616,000 for 1996 from $545,000
for 1995 primarily due to increased advertising for the Association's lending
products.
PROVISION FOR INCOME TAXES. Provision for income taxes decreased $2.0
million to $761,000 for the year ended September 30, 1996 from $2.8 million for
the same period in 1995. The decrease in income tax expense reflected lower
pre-tax income during the comparative periods as well as the reversal of a $1.1
million prior accrued liability which in management's opinion was no longer
required and which was reversed with a credit to the 1996 income tax provision.
MARKET RISK ANALYSIS
As a holding company for a financial institution, the Mid-Tier Holding
Company's primary component of market risk is interest rate volatility.
Fluctuations in interest rates will ultimately impact both the level of income
and expense recorded on a large portion of the Association's assets and
liabilities, and the market value of all interest-earning assets and
interest-bearing liabilities, other than those which have a short term to
maturity. Since the Mid-Tier Holding
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<PAGE> 56
Company's interest-earning assets and interest-bearing liabilities are held by
the Association, all of the Mid-Tier Holding Company's interest rate risk
exposure lies at the Association level. As a result, all significant interest
rate risk management procedures are performed by management of the Association.
Based upon the nature of the Association's operations, the Association is not
subject to foreign currency exchange or commodity price risk. The Association's
loan portfolio is secured by assets located primarily in Palm Beach, Martin, St.
Lucie, Indian River and Brevard Counties in Florida and is, therefore, subject
to risks associated with the local economy. As of June 30, 1998, the Association
did not own any trading assets, and does not have any hedging transactions in
place such as interest rate swaps and caps.
The Association's interest rate risk management is the responsibility
of the Asset/Liability Committee ("ALCO"), which makes quarterly reports to the
Board of Directors. ALCO establishes policies to monitor and coordinate the
Association's sources, uses and pricing of funds.
The Association's interest rate management strategy is designed to
manage the volatility of its net interest income by managing the relationship of
interest-rate sensitive assets to interest-rate sensitive liabilities. The
Association monitors interest rate risk through the use of a simulation model
which measures the sensitivity of future net interest income and the net
portfolio value to changes in interest rates. In addition, the Association
monitors interest rate sensitivity through analysis by measuring the terms to
maturity or next repricing date of interest-earning assets and interest-bearing
liabilities The extent to which assets and liabilities are "interest rate
sensitive" is measured by an institution's interest rate sensitivity "gap." An
asset or liability is said to be interest rate sensitive within a specific time
period if it will mature or reprice within that time period. The interest rate
sensitivity gap is defined as the difference between the amount of
interest-earning assets maturing or repricing within a specific time period and
the amount of interest-bearing liabilities maturing or repricing within that
time period. A gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of interest rate sensitive liabilities. A
gap is considered negative when the amount of interest rate sensitive
liabilities exceeds the amount of interest rate sensitive assets. During a
period of rising interest rates, a negative gap would tend to result in a
decrease in net interest income while a positive gap would tend to result in an
increase in net interest income. Conversely, during a period of falling interest
rates, a negative gap would tend to positively affect net interest income while
a positive gap would tend to adversely affect net interest income. See "-GAP
Table". At June 30, 1998, total interest-earning assets maturing or repricing
within one year exceeded total interest-bearing liabilities maturing or
repricing in the same period by $3.4 million, representing a cumulative one-year
gap ratio of a positive 0.44%. See "-GAP Table."
In the declining interest rate environment that has existed over the
past several years, the Association invested a substantial portion of its assets
in short- and medium-term liquid assets. While such investments typically yield
less than could be obtained in investments in mortgage loans, the Association
believes such investments will allow it to reinvest at higher yields if interest
rates rise. In this regard, the Association has emphasized the origination of
ARM loans and other adjustable-rate or short-term loans, as well as purchased
short-term and medium-term investments. In addition, in recent years, the
Association has de-emphasized the origination of fixed-rate residential loans
and has used hybrid loan products which have a fixed-interest rate for a stated
period of either five or seven years. At the end of the fixed-interest rate
period, the loan converts to a one year ARM. However, in the low interest rate
environment which currently exists, borrowers often prefer traditional
fixed-rate loans. The Association retains ARM loans and fixed-rate loans with
maturities of 15 years or less in its portfolio. Based on management's
assessment of the current portfolio mix and Board of Director established
limits, fixed rate loans with maturities greater than 15 years are either held
in the portfolio or sold when originated in the secondary market, except those
originated for special financing on low income housing. The Association also
invests in United States Government and agency securities, investment
securities, including mutual funds that invest in adjustable-rate securities,
and short-term and medium-term fixed-rate mortgage-backed and related
securities. Of the Association's total investment in loans, mortgage-backed and
related securities and investment securities at June 30, 1998, $331.4 million,
or 46.2%, had adjustable interest rates. In addition, the Association does not
solicit high-rate certificates of deposit in excess of $100,000 or brokered
funds.
MARKET VALUE PORTFOLIO EQUITY. Although interest rate sensitivity gap
is a useful measurement and contributes toward effective asset and liability
management, it is difficult to predict the effect of changing interest rates
based solely on that measure. An alternative methodology is to estimate the
change in the market value of portfolio equity ("MVPE"). The assumptions used by
management to evaluate the vulnerability of the Mid-Tier Holding Company's
operations to
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<PAGE> 57
changes in interest rates in the table below are primarily based on assumptions
provided by the FHLB of Atlanta (see "-Gap Table"). Although management finds
these assumptions reasonable, the interest rate sensitivity of the assets and
liabilities and the estimated effects of changes in interest rates on the net
interest income and MVPE indicated in the following table could vary
substantially if different assumptions were used or actual experience differs
from such assumptions.
The following table presents the Mid-Tier Holding Company's internal
calculations of MVPE at June 30, 1998.
<TABLE>
<CAPTION>
Change in Interest Estimated Net Market Value
Rates in Basis Points of Portfolio Equity NPV as % of PV of Average Assets
- ------------------------------------- ---------------------------------------- --------------------------------
(Rate Shock) Amount $ Change % Change NPV Ratio Change
- ------------------------------------- --------- -------- -------- ------------- -------------
(Dollars in Thousands) (Basis Points)
<S> <C> <C> <C> <C> <C>
400 $ 66,779 $(35,874) (34.9)% 8.93% (479)
300 74,595 (28,059) (27.3) 9.97 (375)
200 83,118 (19,535) (19.0) 11.11 (261)
100 92,438 (10,215) (10.0) 12.36 (136)
Static 102,653 -- -- 13.72 --
(100) 113,880 11,226 10.9 15.22 150
(200) 126,250 23,596 23.0 16.88 316
(300) 139,916 37,263 36.3 18.70 498
(400) 155,056 52,403 51.0 20.73 701
</TABLE>
Certain shortcomings are inherent in the methodology used in the above
interest rate risk measurements. Modeling changes in NPV require the making of
certain assumptions which may or may not reflect the manner in which actual
yields an costs respond to changes in market interest rates. In this regard, the
MPV table presented assumes that the composition of the Mid-Tier Holding
Company's interest sensitive assets and liabilities existing at the beginning of
a period remains constant over the period being measured and also assumes that a
particular change in interest rates is reflected uniformly across the yield
curve regardless of the duration to maturity or repricing of specific assets and
liabilities. Accordingly, although the NPV table provides an indication of the
Mid-Tier Holding Company's interest rate risk exposure at a particular point in
time, such measurements are not intended to and do not provide a precise
forecast of the effect of changes in market interest rates on the Mid-Tier
Holding Company's net interest income and will differ from actual results.
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<PAGE> 58
GAP TABLE. The following table sets forth the amounts of
interest-earning assets and interest-bearing liabilities outstanding at June 30,
1998, which are expected to reprice or mature, based on certain assumptions, in
each of the future time periods shown. Except as stated below, the amounts of
assets and liabilities shown that reprice or mature during a particular period
were determined in accordance with the earlier term of repricing or the
contractual terms of the asset or liability.
<TABLE>
<CAPTION>
Amounts Maturing or Repricing
-----------------------------------------------------
6 Months
Less than 3 3 to 6 to 1 1 to
Months Months Year 3 Years
----------- --------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Real estate loans:
Residential one- to four-family:
Market index ARMs .................... $ 75,325 $ 21,920 $ 60,227 $ 19,133
Fixed-rate ........................... 8,969 10,047 17,601 58,744
Commercial and multi-family:
ARMs ................................. 28,007 4,027 15,l87 3,489
Fixed-rate ........................... 392 178 3,693 2,830
Valuation allowances ..................... -- -- -- --
Yield adjustments ........................ 25 25 51 204
Consumer loans ........................... 1,100 898 1,554 2,865
Equity line of credit loans .............. 8,273 -- -- --
Commercial business loans ................ 5,026 33 135 52
Collateralized mortgage obligations ...... 16,094 5,897 8,855 21,428
Other mortgage-backed securities ......... 1,492 1,195 2,154 5,727
Investment securities .................... 47,474 1,535 516 1,468
Deposits in other institutions and cash
equivalents ............................ 30,948 -- -- --
FHLB stock ............................... 3,782 -- -- --
--------- --------- --------- ---------
TOTAL INTEREST-EARNING ASSETS .......... 226,907 45,755 109,973 115,940
--------- --------- --------- ---------
Interest-bearing liabilities:
Passbook accounts ........................ 1,399 1,399 2,800 7,059
NOW accounts ............................. 6,878 6,878 13,756 15,866
Money market accounts .................... 16,659 16,659 33,317 1,948
Certificate accounts ..................... 68,140 67,030 106,033 81,365
FHLB advances ............................ 16,588 2,123 3,711 13,030
Other borrowed funds ..................... 15,883 -- -- --
--------- --------- --------- ---------
TOTAL INTEREST-BEARING LIABILITIES ..... 125,547 94,089 159,617 119,268
--------- --------- --------- ---------
Interest-earning assets less interest-
bearing liabilities ("interest rate
sensitivity gap") ....................... $ 101,360 $ (48,334) $ (49,644) $ (3,328)
========= ========= ========= =========
Cumulative excess (deficiency) of
interest-earning assets over
interest-bearing liabilities ............. $ 101,360 $ 53,026 $ 3,382 $ 54
========= ========= ========= =========
Interest sensitivity gap to total assets ... 13.24% (6.31)% (6.49)% (0.43)%
Cumulative interest sensitivity gap to totat
assets .................................. 13.24% 6.93% 0.44% 0.01%
Ratio of interest-earning assets to interest
bearing liabilities ...................... 180.73% 48.63% 68.90% 97.21%
Cumulative ratio of interest-earning assets
to interest-bearing liabilities .......... 180.73% 124.14% 100.89% 100.01%
Cumulative interest-earning assets ......... $ 226,907 $ 272,662 $ 382,635 $ 498,575
Cumulative interest-bearing liabilities .... $ 125,547 $ 219,636 $ 379,253 $ 498,521
</TABLE>
<TABLE>
<CAPTION>
Amounts Maturing or Repricing
-------------------------------------------------
3 to More than
5 Years 5-10 Years 10 Years Total
--------- ---------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Real estate loans:
Residential one- to four-family:
Market index ARMs .................... $ 12,739 $ -- $ -- $ 189,344
Fixed-rate ........................... 42,906 65,717 48,315 252,299
Commercial and multi-family:
ARMs ................................. -- -- -- 50,710
Fixed-rate ........................... 3,654 2,686 2,466 15,899
Valuation allowances ..................... -- -- (2,767) (2,767)
Yield adjustments ........................ 208 93 583 1,189
Consumer loans ........................... 457 45 -- 6,919
Equity line of credit loans .............. -- -- -- 8,273
Commercial business loans ................ 263 -- -- 5,509
Collateralized mortgage obligations ...... 11,154 5,814 3,267 72,509
Other mortgage-backed securities ......... 418 -- -- 10,986
Investment securities .................... 15,485 4,670 -- 71,148
Deposits in other institutions and cash
equivalents ............................ -- -- -- 30,948
FHLB stock ............................... -- -- -- 3,782
--------- --------- --------- ---------
TOTAL INTEREST-EARNING ASSETS .......... 87,284 79,025 51,864 716,748
--------- --------- --------- ---------
Interest-bearing liabilities:
Passbook accounts ........................ 3,413 6,805 10,061 32,936
NOW accounts ............................. 2,807 5,654 22,516 74,355
Money market accounts .................... 826 711 14,227 84,347
Certificate accounts ..................... 29,658 956 -- 353,182
FHLB advances ............................ 17,643 22,535 -- 75,630
Other borrowed funds ..................... -- -- -- 15,883
--------- --------- --------- ---------
TOTAL INTEREST-BEARING LIABILITIES ..... 54,347 36,661 46,804 636,333
--------- --------- --------- ---------
Interest-earning assets less interest-
bearing liabilities ("interest rate
sensitivity gap") ....................... $ 32,937 $ 42,364 $ 5,060 $ 80,415
========= ========= ========= =========
Cumulative excess (deficiency) of
interest-earning assets over
interest-bearing liabilities ............. $ 32,991 $ 75,355 $ 80,415
========= ========= =========
Interest sensitivity gap to total assets ... 4.30% 5.53% 0.66%
Cumulative interest sensitivity gap to totat
assets .................................. 4.31% 9.84% 10.51%
Ratio of interest-earning assets to interest
bearing liabilities ...................... 160.61% 215.56% 110.81%
Cumulative ratio of interest-earning assets
to interest-bearing liabilities .......... 105.97% 112.78% 112.64%
Cumulative interest-earning assets ......... $ 585,859 $ 664,884 $ 716,748
Cumulative interest-bearing liabilities .... $ 552,868 $ 589,529 $ 636,333
</TABLE>
In preparing the table above, it has been assumed, consistent with the
assumptions used by the FHLB of Atlanta, as of March 1998, in assessing the
interest rate sensitivity of savings associations, that: (i) adjustable-rate
first mortgage loans will prepay at a rate of 23% per year; (ii) fixed-rate
mortgage loans on one- to four-family residential properties with terms to
maturity of 15 years or less will prepay at a rate of 10% per year; (iii) second
mortgage loans on one- to four-family residential properties will prepay at a
rate of 16% per year; (iv) fixed maturity deposits will not be withdrawn prior
to maturity; (v) these withdrawal rates as well as loan prepayment assumptions
are based on certain assumptions
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<PAGE> 59
for loan prepayments and deposit withdrawals and (vi) fixed-rate first mortgage
loans on one- to four-family residential properties with remaining terms to
maturity of over 15 years will prepay annually as follows:
<TABLE>
<CAPTION>
Prepayment Interest Rate Assumption
------------------------ ----------
<S> <C>
Less than 7% 9%
7 to 7.99% 11%
8 to 8.99% 14%
9 to 9.99% 19%
10% and over 27%
</TABLE>
Management believes that these assumptions approximate actual experience
and considers them appropriate and reasonable. NOW, passbook and statement
savings accounts and money market accounts are assumed to decay at the following
rates:
<TABLE>
<CAPTION>
Over 1 Over 3 Over 5 Over 10
1 Year Through Through Through Through Over 20
or Less 3 Years 5 Years 10 Years 20 Years Years
------- ------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
NOW accounts ..................... 37% 34% 9% 20% 20% 20%
Passbook accounts ................ 17 26 17 40 40 40
Money market deposit accounts .... 79 11 5 5 5 5
</TABLE>
The above assumptions utilized by the FHLB of Atlanta are annual
percentages based on remaining balances and should not be regarded as indicative
of the actual prepayments and withdrawals that may be experienced by Bankshares.
Moreover, certain shortcomings are inherent in the analysis presented by the
foregoing tables. For example, although certain assets and liabilities may have
similar maturities or periods to repricing, they may react in different degrees
to changes in market interest rates. Also, interest rates on certain types of
assets and liabilities may fluctuate in advance of or lag behind changes in
market interest rates. Additionally, certain assets, such as ARM loans, have
features that restrict changes in interest rates on a short-term basis and over
the life of the assets. Moreover, in the event of a change in interest rates,
prepayment and early withdrawal levels would likely deviate significantly from
those assumed in calculating the table. For information regarding the
contractual maturities of the loan, securities and deposit portfolios, see Notes
to Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
The Association adjusts its liquidity levels in order to meet funding
needs of deposit outflows, payment of real estate taxes on mortgage loans,
repayment of borrowings, and loan commitments. The Association also adjusts
liquidity as appropriate to meet its asset and liability management objectives.
A major portion of the Association's liquidity consists of cash and cash
equivalents, which are a product of its operating, investing, and financing
activities.
The Association is required to maintain minimum levels of liquid assets
as defined by OTS regulations. This requirement, which varies from time to time
depending upon economic conditions and deposit flows, is based upon a percentage
of deposits and short-term borrowings. Currently, the required ratio is 4.0%.
The Association's liquidity ratio averaged 12.2% during the six months ended
June 30, 1998 while liquidity ratios averaged 14.2% for the year ended December
31, 1997.
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<PAGE> 60
The Association's primary sources of funds are deposits, amortization
and prepayment of loans and mortgage-backed and related securities, maturities
of investment securities and other short-term investments, FHLB advances, and
earnings and funds provided from operations. While scheduled principal
repayments on loans and MBS, and maturities of securities are a relatively
predictable source of funds, deposit flows and loan prepayments are greatly
influenced by general interest rates, economic conditions, and competition. The
Association manages the pricing of its deposits to maintain a desired deposit
balance. In addition, the Association invests funds in excess of its immediate
needs in short-term interest-earning deposits and other assets, which provide
liquidity to meet lending requirements. Short-term interest-bearing deposits
with the FHLB of Atlanta amounted to $30.6 million at June 30, 1998. Other
assets qualifying for liquidity outstanding at June 30, 1998 amounted to $14.8
million. For additional information about cash flows from the operating,
financing, and investing activities, see the unaudited consolidated statements
of cash flows included in the financial statements.
Liquidity management is both a daily and long-term function of business
management. If funds are required beyond the ability to generate them
internally, borrowing agreements exist with the FHLB which provide an additional
source of funds. FHLB advances totaled $75.6 million at June 30, 1998.
At June 30, 1998, outstanding loan commitments totaled $22.1 million,
which amount does not include the unfunded portion of loans in process.
Certificates of deposit scheduled to mature in less than one year totaled $241.2
million at June 30, 1998. Based on prior experience, management believes that a
significant portion of such deposits will remain with the Association.
The Association is subject to various regulatory capital requirements
administered by the OTS. Failure to meet minimum capital requirements can
initiate certain mandatory, and possibly additional discretionary, actions by
regulators that, if undertaken, could have a direct material effect on
Bankshares' financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Association must meet
specific capital guidelines that involve quantitative measures of the
Association's assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The Association's capital
amounts and classifications are also subject to qualitative judgments by
regulators about components, risk-weighting, and other factors.
Quantitative measures established by regulation to ensure capital
adequacy require the Association to maintain minimum amounts and ratios of
tangible capital of not less than 1.5% of adjusted total assets, total capital
to risk-weighted assets of not less than 8.0%, Tier I capital of not less than
3.0% of adjusted total assets, and Tier I capital to risk-weighted assets of not
less than 4.0% (as defined in the regulations). Management believes, as of June
30, 1998, that the Association meets all capital adequacy requirements to which
it is subject.
As of June 30, 1998, the most recent notification from the OTS
categorized the Association as "Well Capitalized" under the framework for prompt
corrective action. To be considered well capitalized under such framework, the
Association must maintain total risk-based, Tier I risk-based, and Tier I
leverage ratios of 10.0%, 6.0% and 5.0%, respectively. There are no conditions
or events since that notification that management believes have changed the
Association's categorization. See Note 16 to Consolidated Financial Statements.
The following table presents the relationship of the Association's
capital as calculated under generally accepted accounting principles ("GAAP")
with its regulatory capital as calculated under applicable regulation of the
OTS:
<TABLE>
<CAPTION>
At At
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
GAAP capital $ 73,308 $ 70,527
Adjustments:
Unrealized losses on certain available for sale securities 434 154
-------- ------------
Tangible and core capital 73,742 70,681
-------- ------------
Adjustments:
Equity investments required to be deducted (3,043)
Allowances for loan and lease losses 2,767 2,410
-------- ------------
Risk-based capital $ 76,509 $ 70,048
======== ============
</TABLE>
IMPACT OF NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 131 "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS No. 131"), which establishes
annual and interim reporting standards for an enterprise's operating segments
and related disclosures about its products, services, geographic areas, and
major customers. Adoption of this statement will not affect the Mid-Tier Holding
Company's consolidated financial position, results of operations, or cash flows,
and any effect is limited to the form and content of its disclosures. The
statement is effective for the fiscal year ended December 31, 1998.
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<PAGE> 61
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133"), issued in June
1998, must be adopted as of January 1, 2000. This Statement establishes
accounting and reporting standards for derivative financial instruments and for
hedging activities. Upon adoption of the Statement, all derivatives must be
recognized at fair value as either assets or liabilities in the statement of
financial position. Changes in the fair value of derivatives not designated as
hedging instruments are to be recognized currently in earnings. Gains or losses
on derivatives designated as hedging instruments are either to be recognized
currently in earnings or are to be recognized as a component of other
comprehensive income, depending on the intended use of the derivatives and the
resulting designations. Upon adoption, retroactive application of this Statement
to financial statements of prior periods is not permitted. The Mid-Tier Holding
Company is currently in the process of evaluating the impact of SFAS No. 133 on
its consolidated financial position and results of operations and has neither
determined whether to adopt it earlier than required or whether any securities
will be reclassified from held to maturity to available for sale upon adoption
of SFAS No. 133.
YEAR 2000 CONSIDERATIONS
In order to be ready for the year 2000 (the "Year 2000 Issue"), the
Association has developed a Year 2000 Action Plan (the "Action Plan") which was
presented to the Audit Committee of the Board of Directors during July 1997. The
Action Plan was developed using the guidelines outlined in the Federal Financial
Institutions Examination's Council's "The Effect of 2000 on Computer Systems".
The Association's Strategic Planning Committee assigned responsibility for the
Action Plan to the Year 2000 Committee which reports to the Strategic Planning
Committee and the Board of Directors on a monthly basis. The Action Plan
recognizes that the Association's operating, processing and accounting
operations are computer reliant and could be affected by the Year 2000 Issue.
The Association is primarily reliant on third party vendors for its computer
output and processing, as well as other significant functions and services
(I.E., securities safekeeping services, securities pricing information, et
cetera). The Year 2000 Committee is currently working with these third party
vendors to assess their year 2000 readiness. Based upon the initial assessment,
management presently believes that with planned modifications to existing
software and hardware and planned conversions to new software and hardware, the
Association's third party vendors are taking the appropriate steps to ensure
critical systems will function properly. The Association currently expects such
modifications and conversions and related testing to be completed by December
31, 1998. However, if such modifications and conversions are not made, or are
not completed on a timely basis, the Year 2000 Issue could have a material
impact on the operations of the Association. There can be no assurance that
potential systems interruptions or unanticipated additional expense incurred to
obtain Year 2000 compliance would not have a material adverse effect on the
Association's business, financial condition, results of operations and business
prospects. Nevertheless, the Association does not believe that the cost of
addressing the Year 2000 issues will be a material event or uncertainty that
would cause reported financial information not to be necessarily indicative of
future operating results or financial conditions, nor does it believe that the
costs or the consequences of incomplete or untimely resolution of its Year 2000
issues represents a known material event or uncertainty that is reasonably
likely to affect its future financial results, or cause its reported financial
information not to be necessarily indicative of future operating results or
future financial condition.
The Year 2000 issues also affect certain of the Association's
customers, particularly in the areas of access to funds and additional
expenditures to achieve compliance. As of June 30, 1998, the Association had
contacted all of its commercial credit customers regarding the customers
awareness of the Year 2000 Issue. While no assurance can be given that the
customers will be Year 2000 compliant, management believes, based on such
customers representations, that the customers are either addressing the
appropriate issues to insure compliance or that they are not faced with material
Year 2000 issues.
The Association has completed its own company-wide Year 2000
contingency plan. Individual contingency plans concerning specific software and
hardware issues and operational plans for continuing operations were completed
for all mission critical hardware and software applications as of September 15,
1998. The Year 2000 committee is reviewing all mission critical test plans and
contingency plans to ensure the reasonableness of the plans. Testing will begin
on mission critical systems in October 1998 and planned completion of testing is
December 1998. The
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<PAGE> 62
Association is currently working on contingency plans which address operational
policies and procedures in the event of data processing, electric power supply
and/or telephone service failures associated with the Year 2000.
The costs of modifications to the existing software is being primarily
absorbed by the third party vendors, however the Association recognized that the
need exists to purchase new hardware and software. Based upon current estimates,
the Association has identified $1.8 million in total costs, including hardware,
software, and other issues, for completing the Year 2000 project. Of that
amount, approximately 1.2 million and $39,000 was purchased during the twelve
months ended December 31, 1997 and 1996, respectively, with the remaining
$535,000 budgeted for the year ended December 31, 1998.
BUSINESS OF THE MID-TIER HOLDING COMPANY
The Mid-Tier Holding Company is a federally chartered mid-tier stock
holding company organized in August 1997. The only significant asset of the
Mid-Tier Holding Company is its investment in the Association. The Mid-Tier
Holding Company is majority owned by the MHC, a federally chartered mutual
holding company. Effective September 30, 1997, the Mid-Tier Holding Company
acquired all of the issued and outstanding common stock of the Association in
connection with the Association's reorganization into the two-tier form of
mutual holding company ownership. At that time, each share of Association's
Common Stock was converted into one share of Mid-Tier Holding Company Common
Stock. As of the date hereof, the MHC owned 2,620,144 shares of Mid-Tier Holding
Company Common Stock with the remaining 2,479,976 shares being owned by the
Public Shareholders. The Mid-Tier Reorganization was accounted for at historical
cost in a manner similar to a pooling of interests. Therefore, all financial
information has been presented as if the Mid-Tier Holding Company had been in
existence for all periods included in this report. On a consolidated basis, at
June 30, 1998, the Mid-Tier Holding Company had total assets of $765.5 million,
total loans of $527.4 million, total deposits of $574.4 million, and total
shareholders' equity of $83.1 million.
The Mid-Tier Holding Company's executive office is located at 660 U.S.
Highway One, North Palm Beach, Florida and its telephone number at that address
is (561) 881-2212.
BUSINESS OF COMMUNITY SAVINGS, F. A.
GENERAL. The Association, founded in 1955, is a federally chartered
savings and loan association headquartered in North Palm Beach, Florida. The
Association's deposits are federally insured by the FDIC through the SAIF. The
Association has been a member of the FHLB of Atlanta since 1955. The Association
is regulated by the OTS. On October 24, 1994, the Association completed a
reorganization into a federally chartered mutual holding company, the MHC. As
part of the MHC Reorganization, the Association organized a new federally
chartered stock savings association and transferred substantially all of its
assets and liabilities to the stock savings association in exchange for a
majority of the common stock of the stock savings association. Subsequently, on
September 30, 1997, it completed the Mid-Tier Reorganization.
The Association is a community-oriented financial institution engaged
primarily in the business of attracting deposits from the general public in the
Association's market area (as described below) and using such funds, together
with other borrowings, to invest in various consumer-based real estate loans,
commercial business loans and mortgage-backed and related securities as well as
United States government and agency securities, mutual funds, corporate debt
securities, interest-earning deposits in the FHLB and FHLB stock. See "Lending
Activities," "Mortgage-Backed and Related Securities," and "Investment
Activities." The Associations principal source of funds are deposits, principal
and interest payments on loans and securities, and FHLB advances. The principal
source of income is interest received from loans and securities, while principal
expenses are interest paid on deposits and borrowings and employee compensation
and benefits. See "Sources of Funds." The Association's plan is to operate as a
well-capitalized, profitable and independent institution. The Association's
profitability is highly dependent on its net interest income. The components
that determine net interest income are the amount of interest-earning assets and
interest-bearing liabilities, together with the rates earned or paid on such
interest rate-sensitive instruments. The Association is sensitive to managing
interest rate
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<PAGE> 63
risk exposure through its efforts to better match asset and liability maturities
and rates. This is accomplished while considering the credit risk of certain
assets. The Association maintains asset quality by utilizing comprehensive loan
underwriting standards and collection efforts as well as by primarily
originating or purchasing secured or guaranteed assets.
The Association's executive office is located at 660 U.S. Highway One,
North Palm Beach, Florida, and its telephone number at that address is (561)
881-4800.
CHANGE OF FISCAL YEAR
In January 1997, the Board of Directors of the Association approved a
change of the Association's fiscal year from September 30 to December 31,
effective December 31, 1996. The Mid-Tier Holding Company and the MHC use a
fiscal year end of December 31 as well.
MARKET AREA AND COMPETITION
The Mid-Tier Holding Company and the Association are headquartered in
North Palm Beach, Florida. Because the Mid-Tier Holding Company's only
significant asset is its ownership of all the issued and outstanding capital
stock of the Association, the market area and competition are identical for both
entities. The Association operates 21 offices in its market area in southeastern
Florida. Five offices are located in Martin County, twelve offices are located
in Palm Beach County, three offices are located in St. Lucie County and one
office is located in Indian River County. The Association operates two loan
production offices, one located in Vero Beach in Indian River County and one in
Melbourne in Brevard County.
According to county projections prepared by the University of Florida,
population in Palm Beach, Martin, St. Lucie, and Indian River counties was
estimated at l.4 million for 1997. This study projects a 6.6% growth rate to 1.5
million by the year 2000 and a 38.6% growth rate from the year 2001 to the year
2020 to 2.l million. This population growth combined with a lower interest rate
environment during early 1998 suggests an increased demand for mortgage loans in
the four county market as well as the State of Florida. However, such estimates
may not prove representative of trends for the remainder of 1998.
Based on total assets as of March 31, 1998, the Association was the
third largest savings institution headquartered in Palm Beach County. The
Association held 2.14%, 6.28%, 2.93% and 0.80% of all bank and savings
association deposits in Palm Beach, Martin, St. Lucie, and Indian River
counties, respectively, at March 31, 1998.
The counties in the Association's market area, have experienced
significant growth since the 1960s. Several of the counties are currently
undertaking major redevelopment projects. In Palm Beach County, the City of West
Palm Beach is implementing a $375 million project called City Place designed to
continue the revitalization of the downtown area. Also in Palm Beach County,
construction has begun on a new subdivision development (called Abacoa) which
features a major league baseball stadium to be used for Spring training,
commercial office space and retail space, recreational facilities, a branch
campus of Florida Atlantic University as well as single-family and multi-family
residential properties which will accommodate approximately 10,000 residents.
TriRail, the commuter train service for southern Florida, will be extended
northward to service this community.
In Martin County, redevelopment of the City of Stuart's downtown area
has been supplemented by the completion of the new Roosevelt bridge facilitating
access to the city from the north.
In St. Lucie County, the Professional Golfers Association has planned
three new championship golf courses, a golf learning center and a housing
development.
The economy in this market area is service-oriented and is
significantly dependent upon government, foreign trade, tourism, and its
continued attraction as a retirement area. In Palm Beach and Martin counties,
cooperative efforts between the counties and local municipalities are producing
business growth and expansion in the county. A variety of
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<PAGE> 64
county-supported programs have been instituted to create new jobs and to
encourage relocation or expansion of companies with an emphasis placed on
high-technology and service industries. Consequently, commercial building
vacancies are at a low level. Major employers in Palm Beach County include Pratt
and Whitney (United Technologies), Motorola, Inc., St. Mary's and Good Samaritan
Hospitals, Florida Power and Light Co. and Flo Sun, Inc. Martin County major
employers include Martin Memorial Health System, Staff Leasing, and Publix. St.
Lucie County major employers include Indian River Community College, Columbia
Lawnwood Regional Medical, Publix, and Staff Leasing. Indian River County major
employers include Indian River Memorial Hospital, Publix and New Piper Aircraft
Corp.
The Association's market area in southeast Florida has a large
concentration of financial institutions, many of which are significantly larger
and have greater financial resources than the Association, and all of which are
competitors of the Association to varying degrees. As a result, the Association
encounters strong competition both in attracting deposits and in originating
real estate and other loans. Its most direct competition for deposits has come
historically from commercial banks, securities broker-dealers, other savings
associations, and credit unions in its market area. Continued strong competition
from such financial institutions is expected in the foreseeable future. The
market area includes branches of several commercial banks that are substantially
larger than the Association in terms of state-wide deposits. The Association
competes for savings by offering depositors a high level of personal service and
expertise together with a wide range of financial services as well as
competitive pricing. In recent years many financial institutions have been
aggressively expanding through the acquisition of branch locations or entire
financial institutions, thereby increasing competition.
The competition for real estate and other loans comes principally from
commercial banks, mortgage-banking companies, and other savings associations.
The competition for loans has increased substantially in recent years as a
result of the large number of institutions competing in the market area as well
as the increased efforts by commercial banks to expand mortgage loan
originations. The Association competes for loans primarily through the
competitive interest rates and loan fees it charges and the efficiency and
quality of services it provides borrowers, real estate brokers, and builders.
Factors that affect competition include general and local economic conditions,
current interest rate levels, and the volatility of the mortgage markets.
LENDING ACTIVITIES
GENERAL. Historically, the principal lending activity of the
Association has been the origination of fixed- and adjustable-rate mortgage
loans collateralized by one- to four-family residential properties located in
its primary market area. It is the Association's intention to offer varied
products in the residential mortgage loan area. The Association currently
emphasizes the origination of ARM loans and fixed-rate residential mortgage
loans with terms of 15 years or less, as well as a residential mortgage loan
which provides for a fixed-rate of interest during the first five or seven years
and which thereafter converts to an ARM loan, the interest rate of which adjusts
annually. At times, it has been the Association's policy to sell in the
secondary market all fixed-rate mortgage loan originations with terms greater
than 15 years on a servicing retained basis. However, based on management's
assessment of the market at a particular time and Board of Director limits, the
Association may periodically decide to retain such loans in the portfolio. There
were no loans held for sale at June 30, 1998. Loans serviced for other
institutions totaled $16.3 million.
While the Association's primary emphasis is on residential real estate
lending, the Association's policy is to meet demand for other types of loans by
offering a wide variety of loan programs designed to meet its customers' needs.
In response to customer demand, the Association began expanding its commercial
lending programs in fiscal year 1996. At June 30, 1998, the gross loan portfolio
totaled $554.1 million, of which $419.1 million, or 75.6%, consisted of one-to
four-family residential mortgage loans; $42.8 million, or 7.7%, consisted of
residential construction loans; $4.2 million, or 0.8%, consisted of
nonresidential construction loans; $12.4 million, or 2.2%, consisted of land
loans; $8.7 million, or 1.6%, consisted of multi-family residential real estate
loans; $46.1 million, or 8.3%, consisted of commercial real estate loans; $15.2
million, or 2.7%, consisted of consumer loans (primarily home equity lines of
credit, automobile loans, and loans secured by savings deposits); and $5.5
million, or 1.0%, consisted of commercial business loans. At June 30, 1998, the
weighted average remaining term to maturity of the loan portfolio was
approximately 17 years. At June 30, 1998, $253.2 million, or 48.0% of the total
net loan portfolio consisted of loans with adjustable interest rates.
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To supplement local loan originations, the Association also invests in
mortgage-backed and related securities that directly or indirectly provide funds
principally for residential home buyers in the United States. The Association
has also purchased either participations in or whole residential real estate
loans which are serviced by other institutions. Such loans totaled $53.2
million, net of premiums, at June 30, 1998. The Association also participates
with other financial institutions in programs which provide residential mortgage
loans to low and moderate income borrowers.
ANALYSIS OF LOAN PORTFOLIO. Set forth below is selected data relating
to the composition of the loan portfolio by type of loan.
<TABLE>
<CAPTION>
At June 30, At December 31,
--------------------- ------------------------------------------
1998 1997 1996
--------------------- --------------------- -------------------
Amount Percent Amount Percent Amount Percent
-------- ------- -------- ------- -------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real estate loans:
Residential 1-4 family (1) ...... $419,069 75.63% $339,117 70.90% $293,366 71.11%
Residential construction loans .. 42,807 7.73 32,828 6.86 33,158 8.04
Nonresidential construction loans 4,217 0.76 2,022 0.42 2,200 0.53
Land loans ...................... 12,409 2.24 17,117 3.58 19,426 4.71
Multi-family (2) ................ 8,739 1.58 8,800 1.84 8,096 1.96
Commercial (3) .................. 46,147 8.32 59,220 12.38 37,815 9.17
-------- ------ -------- ------ -------- ------
Total real estate loans ....... 533,388 96.26 459,104 95.98 394,061 95.52
-------- ------ -------- ------ -------- ------
Non-real estate loans:
Consumer loans (4) ............... 15,191 2.74 15,694 3.28 16,028 3.89
Commercial business .............. 5,508 1.00 3,530 0.74 2,458 0.60
-------- ------ -------- ------ -------- ------
Total non-real estate loans ... 20,699 3.74 19,224 4.02 18,486 4.48
-------- ------ -------- ------ -------- ------
Total loans receivable ........ 554,087 100.00% 478,328 100.00% 412,547 100.00%
====== ====== ======
Less:
Undisbursed loan proceeds ........ 25,134 24,163 20,765
Unearned discount (premium) and
net deferred loan fees (costs) (1,189) (206) 200
Allowance for loan losses ....... 2,767 2,662 2,542
-------- -------- --------
Total loans receivable, net ... $527,375 $451,709 $389,040
======== ======== ========
</TABLE>
- ----------------
(1) Includes participations or whole loans of $52.5 million, $19.5 million and
$1.7 million at June 30, 1998 and December 31, 1997 and 1996, respectively.
(2) Includes participations of $153,000 and $505,000 at June 30, 1998 and
December 31, 1996, respectively.
(3) Includes participations of $162,000 and $190,000 at December 31, 1997 and
1996, respectively.
(4) Includes primarily home equity lines of credit, automobile loans, and loans
secured by savings deposits. At June 30, 1998, the disbursed portion of home
equity lines of credit totaled $8.2 million.
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ANALYSIS OF LOAN PORTFOLIO, CONTINUED.
<TABLE>
<CAPTION>
At September 30,
-----------------------------------------------------------------------------------------
1996 1995 1994 1993
--------------------- --------------------- ------------------ ------------------
Amount Percent Amount Percent Amount Percent Amount Percent
-------- ------- -------- ------- -------- ------- -------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Real estate loans:
Residential 1-4 family (1) ... $284,474 70.92% $248,769 71.27% $247,867 74.82% $262,480 77.16%
Residential construction loans 35,720 8.91 27,314 7.83 12,265 3.70 7,965 2.34
Land loans ................... 16,846 4.20 15,601 4.47 20,476 6.18 17,072 5.02
Multi-family (2) ............. 8,153 2.03 7,351 2.11 6,772 2.04 5,952 1.75
Commercial (3) ............... 38,433 9.58 35,402 10.14 32,612 9.84 34,953 10.27
-------- ------ -------- ------ -------- ------ -------- ------
Total real estate loans .... 383,626 95.64 334,437 95.82 319,992 96.59 328,422 96.54
-------- ------ -------- ------ -------- ------ -------- ------
Non-real estate loans:
Consumer loans (4) .......... 15,606 3.89 12,638 3.62 10,237 3.09 10,844 3.19
Commercial business ......... 1,874 0.47 1,958 0.56 1,058 0.32 929 0.27
-------- ------ -------- ------ -------- ------ -------- ------
Total non-real estate loans 17,480 4.36 14,596 4.18 11,295 3.41 11,773 3.46
-------- ------ -------- ------ -------- ------ -------- ------
Total loans receivable .... 401,106 100.00% 349,033 100.00% 331,287 100.00% 340,195 100.00%
====== ====== ====== ======
Less:
Undisbursed loan proceeds . 22,318 15,253 9,872 6,466
Unearned discount (premium) and
net deferred fees (costs) 257 846 908 1,234
Allowance for loan losses . 2,312 3,492 3,390 3,748
-------- -------- -------- --------
Total loans receivable, net $376,219 $329,442 $317,117 $328,747
======== ======== ======== ========
</TABLE>
---------------------
(1) Includes participations or whole loans of $1.8 million, $2.2 million, $2.6
million and $0, at September 30, 1996, 1995, 1994, and 1993, respectively.
(2) Includes participations of $360,000 at September 30, 1996.
(3) Includes participations of $198,000, $4.9 million and $5.0 million at
September 30, 1996, 1995 and 1994 respectively.
(4) Includes primarily home equity lines of credit, automobile loans, and loans
secured by savings deposits.
LOAN AND MORTGAGE-BACKED AND RELATED SECURITIES MATURITY AND REPRICING
SCHEDULE. The following table sets forth certain information as of June 30,
1998, regarding the dollar amount of loans and mortgage-backed and related
securities maturing in the Association's portfolio based on their contractual
terms to maturity. Demand loans, loans having no stated schedule of repayments
and no stated maturity, and overdrafts are reported as due in one year or less.
Adjustable-and floating-rate loans are included in the period in which interest
rates are next scheduled to adjust rather the period than in which they
contractually mature, and fixed-rate loans are included in the period in which
the final contractual repayment is due. Fixed-rate mortgage-backed and related
securities are assumed to mature in the period in which the final contractual
payment is due on the underlying mortgage.
<TABLE>
<CAPTION>
Within 1-3 3-5 5-10 More Than
1 Year Years Years Years 10 Years Total
-------- -------- -------- -------- --------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real estate loans:
One- to four-family residential ... $214,322 $ 77,877 $ 55,645 $ 65,717 $ 48,315 $461,876
Commercial, multi-family and land . 56,387 6,319 3,654 2,686 2,466 71,512
Consumer loans (excluding lines of
credit) ........................... 3,552 2,864 457 45 -- 6,918
Equity lines of credit ............... 8,273 -- -- -- -- 8,273
Commercial business loans ............ 5,193 52 263 -- -- 5,508
-------- -------- -------- -------- -------- --------
Total loans receivable (gross) ... $287,728 $ 87,112 $ 60,019 $ 68,448 $ 50,781 $554,087
======== ======== ======== ======== ======== ========
Mortgage-backed and related securities $ 35,687 $ 27,155 $ 11,572 $ 5,814 $ 3,268 $ 83,496
======== ======== ======== ======== ======== ========
</TABLE>
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The following table sets forth at June 30, 1998, the dollar amount of
all fixed-rate and adjustable-rate loans and mortgage-backed and related
securities due after June 30, 1999 based on the contractual maturity as
described above.
<TABLE>
<CAPTION>
Fixed Adjustable Total
-------- ---------- --------
(Dollars In Thousands)
<S> <C> <C> <C>
Real estate loans:
One- to four-family residential ...... $215,682 $ 31,872 $247,554
Commercial, multi-family and land .... 11,636 3,489 15,125
Consumer and commercial business loans 3,682 -- 3,682
-------- -------- --------
Total .......................... $231,000 $ 35,361 $266,361
======== ======== ========
Percentage of total loans ............ 41.70% 6.38% 48.08%
======== ======== ========
Mortgage-backed and related securities .... $ 47,809 $ -- $ 47,809
======== ======== ========
</TABLE>
ONE- TO FOUR-FAMILY RESIDENTIAL REAL ESTATE LOANS. The Association's
primary lending activity consists of the origination of one- to four-family,
owner-occupied, residential mortgage loans secured by properties located in its
market area. Such loans are generally underwritten in conformity with the
criteria established by Fannie Mae ("FNMA"), with the exception of loans
exceeding applicable agency dollar limits and loans purchased through the
Association's affiliation with a consortium of financial institutions which
provides loans to low and moderate income borrowers (discussed below). The
Association generally does not originate one- to four-family residential loans
secured by properties outside of its market area (although in recent periods it
has purchased a modest amount of single-family loans secured by properties in
the southeast United States). At June 30, 1998, $419.1 million, or 75.63%, of
the gross loan portfolio consisted of one- to four-family residential mortgage
loans. The weighted average contractual maturity of one-to four-family
residential mortgage loans at the time they are originated is approximately 22
years. However, it has been the Association's experience that the average length
of time which such loans remain outstanding is approximately six years.
The Association currently offers one- to four-family residential
mortgage loans with terms typically ranging from 15 to 30 years, and with
adjustable or fixed interest rates. Originations of fixed-rate mortgage loans
and ARM loans are monitored on an ongoing basis and are affected significantly
by the level of market interest rates, customer preference, the Association's
interest rate sensitivity gap position, and loan products offered by its
competitors. In a relatively low interest rate environment, which existed
throughout fiscal 1997 and the six months ended June 30, 1998, borrowers
typically prefer fixed-rate loans to ARM loans. Nonetheless, the Association has
continued to emphasize its ARM loan products. ARM loan originations totaled
$29.7 million, or 29.9%, of all one- to four-family loan originations during the
six months ended June 30, 1998. In connection with the Association's effort to
increase mortgage lending, the Association offers residential mortgage loans
which provide for a fixed-rate of interest during the first five or seven years
of the term of the loans and which thereafter convert to ARM loans on which the
interest rate adjusts on an annual basis. This loan product allows the
Association to offer a loan with a relatively short period during which the
interest rate remains fixed but which typically provides for an initial interest
rate which is greater than could be obtained from ARM loans originated in the
local market. This loan product is generally offered with a term between 15 and
30 years.
The Association currently offers ARM loans with an adjustment of one
year based on changes in the weekly average yield on U.S. Treasury securities
adjusted to a constant maturity of one year plus a margin. Previously, the
Association ARM loans were indexed to the National Monthly Median Cost of Funds
plus a margin. Each ARM loan currently adjusts annually with an annual interest
rate adjustment limitation of 200 basis points and a maximum lifetime adjustment
of 600 basis points above the initial rate. ARM loans are originated with
initial rates which are below the fully indexed rate, the amount of such
discount varying depending upon market conditions, and which provide for an
annual adjustment. Management determines whether a borrower qualifies for an ARM
loan based on the fully indexed rate of the ARM loan at the time the loan is
originated. Negative amortization of the ARM loans is not allowed. One-to
four-family residential ARM loans totaled $181.8 million at June 30, 1998.
The primary purpose of offering ARM loans is to make the loan portfolio
more interest rate sensitive. However, as the interest income earned on ARM
loans varies with prevailing interest rates, such loans do not offer as
consistently predictable interest income as long-term, fixed-rate loans. ARM
loans carry increased credit risk associated with
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potentially higher monthly payments by borrowers as general market interest
rates increase. It is possible, therefore, that during periods of rising
interest rates, the risk of default on ARM loans may increase due to the upward
adjustment of interest costs to the borrower. To offset this risk, loans are
underwritten as if the highest market rate which the borrower would be capable
of paying under the terms of the loan was in effect.
Fixed-rate loans generally are originated and underwritten according to
standards that permit sale in the secondary mortgage market. Whether management
can or will sell fixed-rate loans in the secondary market, however, depends on a
number of factors including the yields and the terms of the loans, market
conditions, the Association's current interest rate sensitivity gap position and
Board of Director established limits. The Association has had varying policies
with respect to retention in portfolio of fixed-rate loans with contractual
terms in excess of 15 years. Its current policy is to limit fixed-rate loans,
including loans with a 30 year term, to a specified percentage of total assets.
The Association's fixed-rate mortgage loans are amortized on a monthly basis
with principal and interest due each month. One- to four-family residential real
estate loans often remain outstanding for significantly shorter periods than
their contractual terms because borrowers may refinance or prepay loans at their
option without prepayment penalties.
In prior years, the Association has participated with other financial
institutions in local consortiums which are committed to provide financing of
one- to four-family mortgage loans for low and moderate income borrowers. The
consortiums underwrite and package the loans which are either sold to the member
institutions on a whole loan basis or closed and funded directly by the member
institution. These loans are originated to borrowers within the Association's
market area and provide for either fixed or adjustable rates of interest. The
Association determines which loans it will purchase or fund directly after
conducting its own due diligence review of the loan package offered. The
Association closed approximately $302,000 and $687,000 in consortium loans for
the six months ended June 30, 1998 and the year ended December 31, 1997,
respectively. For the six months ended June 30, 1998 and the year ended December
31, 1997, the Association did not purchase any loans originated by the
consortiums. It is the Association's intent, subject to market conditions, to
continue its participation in consortiums of this nature in the future.
The Association also purchases single-family residential loans from
other sources, such as mortgage origination companies or brokers, under the same
guidelines as described above. In addition, such loan purchases include a
contract between the mortgage origination company and the Association, which
contains an indemnification clause protecting the Association from loss
resulting from misrepresentations in the loan applications or other information
provided to the Association. During the six months ended June 30, 1998 and the
year ended December 31, 1997, respectively, $2.9 million and $6.3 million of
such loans were purchased. It is management's intent, subject to market
conditions, to continue purchasing such loans.
The Association's one- to four-family residential first mortgage loans
customarily include due-on-sale clauses, which are provisions giving the
Association the right to declare a loan immediately due and payable in the
event, among other things, that the borrower sells or otherwise disposes of the
underlying real property serving as security for the loan. Due-on-sale clauses
are an important means of adjusting the rates on the fixed-rate mortgage loan
portfolio (and to a lesser extent ARM loans), and the Association has generally
exercised its rights under these clauses.
Regulations limit the amount that a savings association may lend
relative to the appraised value of the real estate securing the loan, as
determined by an appraisal at the time of loan origination. Appraisals are
generally performed by an independent outside appraiser. Such regulations permit
a maximum loan-to-value ratio of 95% for residential property and 80% for all
other real estate loans. The Association's lending policies generally limit the
maximum loan-to-value ratio on both fixed-rate and ARM loans without private
mortgage insurance to 80% of the lesser of the appraised value
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<PAGE> 69
or the purchase price of the property to serve as collateral for the loan. For
one- to four-family real estate loans with loan-to-value ratios of between 80%
and 95%, the borrower is generally required to obtain private mortgage
insurance. An origination fee of between 1% and 2% of the total loan amount on
all one- to four-family loans may be charged depending on the market conditions.
Fire and casualty insurance (and flood insurance if the property is within a
designated flood plain), as well as a title guaranty regarding good title, are
required on all properties securing real estate loans made by the Association.
The Association may purchase participation interests or whole loans
secured by one- to four-family residences when there are funds available for
lending in excess of the demand for loans in the local market or to facilitate
funding of large projects. At June 30, 1998, the loan portfolio included $52.5
million of loan participations and whole loans secured by one- to four-family
residences which were purchased. The Association purchased $38.3 million and
$24.5 million of such loans during the six months ended June 30, 1998 and the
year ended December 31, 1997, respectively.
CONSTRUCTION AND LAND LOANS. At June 30, 1998, $42.8 million, or 7.73%,
$4.2 million or 0.76% and $12.4 million, or 2.24%, of the gross loan portfolio
consisted of residential construction loans, nonresidential construction loans
and land loans, respectively. Fixed-rate and adjustable-rate residential
construction loans are currently offered primarily for the construction of
owner-occupied single-family residences in the Association market area to
builders who have a contract for sale of the property or to owners who have a
contract for construction. Advances are made as construction is completed. In
addition, construction loans are also made to builders for single-family homes
held for sale. Such loans totaled $10.5 million at June 30, 1998. Construction
loans for owner-occupied single-family residences are generally structured to
become permanent loans upon completion of construction, and are originated with
terms of up to 30 years with an allowance of up to six months for construction
during which period the borrower makes interest-only payments. Construction
loans to builders for homes held for sale are generally originated for a term of
up to one year and provide for interest-only payments. Disbursements are made as
evidence of progress is presented to and verified by the Association.
At June 30, 1998, the Association's largest real estate construction
loan was a loan to acquire and develop 78 residential lots and had an aggregate
principal outstanding balance of $3.2 million, with disbursed funds of $2.6
million. This loan is secured by the lots which are located in the Association's
market area. The loan is currently performing in accordance with its terms.
In addition, loans are originated within the market area which are
secured by individual unimproved or improved lots zoned primarily to become
single-family residences, as well as commercial and agricultural properties.
Land loans are currently offered as either one-year ARM loans or fixed-rate
loans with terms of up to 15 years. The maximum loan-to-value ratio for such
land loans is 75%.
Adjustable-rate single-family construction and land loans are currently
offered at the weekly average yield on United States Treasury securities
adjusted to a constant maturity of one year plus a margin. Adjustable-rate
construction loans and land loans have an annual interest rate cap of 200 basis
points and a lifetime interest rate cap of 600 basis points over the initial
interest rate. Initial interest rates may be below the fully indexed rate but
the loan is underwritten at the fully indexed rate.
Construction lending generally involves a greater degree of credit risk
than one- to four-family residential mortgage lending. Risk of loss on a
construction loan is dependent largely upon the accuracy of the initial estimate
of the property's value at completion of construction or development and the
estimated cost (including interest) of
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construction. During the construction phase, a number of factors could result in
delays and cost overruns. If the estimate of value proves to be inaccurate, the
Association may be confronted with a project, when completed, which has a value
insufficient to assure full repayment. Loans made on lots carry the risk of
adverse zoning changes, environmental, or other restrictions on future use.
MULTI-FAMILY RESIDENTIAL REAL ESTATE LOANS. Loans secured by
multi-family real estate constituted approximately $8.7 million, or 1.58%, of
the gross loan portfolio at June 30, 1998. At June 30, 1998, a total of 43 loans
were secured by multi-family properties. Multi-family real estate loans are
primarily secured by multi-family residences, such as rental properties with
between five and thirty-six units. At June 30, 1998, substantially all
multi-family loans were secured by properties located within the Association's
market area. At June 30, 1998, multi-family real estate loans had an average
principal balance of approximately $203,000. At such date, the largest
multi-family real estate loan had a principal balance of $1.4 million and was
performing in accordance with its terms. Multi-family real estate loans are
currently offered with adjustable interest rates. In the past, fixed-rate
multi-family real estate loans also were originated. Multi-family loans
typically have adjustable interest rates tied to a market index and amortize
over 20 to 25 years. An origination fee of between 1.5% to 2.0% is usually
charged on multi-family loans. Multi-family mortgage loans are generally made up
to 75% of the appraised value of the property securing the loan. The initial
interest rate on multi-family real estate loans is currently priced at the
weekly average yield on United States Treasury securities adjusted to a constant
maturity of one year plus a margin, depending on the nature and size of the
project. Originations of multi-family loans have been limited in recent years
due to the limited demand for such projects in the Association's market area. In
its underwriting, the Association reviews the expected net operating income
generated by the real estate to support the debt service, the age and condition
of the collateral, the financial resources and income level of the borrower, the
borrower's experience in owning or managing similar properties, and any
financial reserves the borrower may have.
Loans secured by multi-family real estate generally involve a greater
degree of credit risk than one- to four-family residential mortgage loans and
carry larger loan balances. This increased credit risk is a result of several
factors, including the concentration of principal in a limited number of loans
and borrowers, the effects of general economic conditions on income producing
properties, and the increased difficulty of evaluating and monitoring these
types of loans. Furthermore, the repayment of loans secured by multi-family
property is typically dependent upon the successful operation of the related
real estate property.
COMMERCIAL REAL ESTATE LOANS. Loans secured by commercial real estate
constituted approximately $46.1 million, or 8.32%, of the gross loan portfolio
at June 30, 1998. Commercial real estate loans are secured by improved property
such as offices, hotels, small business facilities, strip shopping centers,
warehouses, commercial land and other non-residential buildings. At June 30,
1998, substantially all of commercial real estate loans were secured by
properties located within the Association's market area. At June 30, 1998, a
total of 181 loans were secured by commercial real estate with an average
principal balance of approximately $255,000. Commercial real estate loans are
currently only offered with adjustable-rates, although in the past the
Association has originated fixed-rate commercial real estate loans. The terms of
each commercial real estate loan are negotiated on a case-by-case basis,
although such loans typically have adjustable interest rates tied to a market
index. An origination fee of up to 2% of the principal balance of the loan is
typically charged on commercial real estate loans. Commercial real estate loans
originated by the Association generally amortize over 15 to 20 years and have a
maximum loan-to-value ratio of 75%.
The Association expanded both its commercial real estate and business
lending activities in late fiscal 1996. An experienced commercial loan officer
and a credit analyst were added to the Lending Division staff. During the six
months ended June 30, 1998, $4.3 million of such loans were originated. The
Association intends to continue to emphasize the origination of such loans in
the future.
At June 30, 1998, the largest commercial real estate borrower had an
outstanding principal balance of $2.0 million. The loan is secured by a citrus
grove and is currently performing in accordance with its terms.
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In underwriting commercial real estate loans, the same underwriting
standards and procedures are employed as are employed in underwriting
multi-family real estate loans. Loans secured by commercial real estate
generally involve a higher degree of risk than one- to four-family residential
mortgage loans and carry larger loan balances. This increased credit risk is a
result of several factors, including the concentration of principal in a limited
number of loans and borrowers, the effects of general economic conditions on
income producing properties, and the difficulty of evaluating and monitoring
these types of loans. Furthermore, the repayment of loans secured by commercial
real estate is typically dependent upon the successful operation of the related
real estate project. If the cash flow from the project is reduced, the
borrower's ability to repay the loan may be impaired.
CONSUMER LOANS. As of June 30, 1998, consumer loans totaled $15.2
million, or 2.74%, of the gross loan portfolio. The principal types of consumer
loans offered are home equity lines of credit, fixed-rate second mortgage loans,
automobile loans, mobile home loans, boat loans, recreational vehicle loans,
unsecured personal loans, and loans secured by deposit accounts. Consumer loans
are offered primarily on a fixed-rate basis with maturities generally of five
years or less. Home equity lines of credit are secured by the borrower's
principal residence. Consumer loans are underwritten using the Association's
customary lending standards.
Consumer loans generally have shorter terms and higher interest rates
than traditional mortgage loans, but generally entail greater credit risk than
do residential mortgage loans, particularly in the case of consumer loans that
are unsecured or secured by assets that depreciate rapidly, such as automobiles,
mobile homes, boats, and recreational vehicles. In such cases, repossessed
collateral for a defaulted consumer loan may not provide an adequate source of
repayment for the outstanding loan and the remaining deficiency often does not
warrant further substantial collection efforts against the borrower. In
particular, amounts realizable on the sale of repossessed automobiles may be
significantly reduced based upon the condition of the automobiles and the
fluctuating demand for used automobiles.
COMMERCIAL BUSINESS LOANS. The Association currently offers commercial
business loans to finance small businesses in its market area. Commercial
business loans are primarily offered as a customer service to business account
holders. Such loans may include commercial lines of credit, loans on inventory,
equipment, receivables, or other collateral and unsecured loans. During the last
quarter of the fiscal year ended September 30, 1996, the Association began
expanding its activities in the commercial business lending market. The
Association anticipates that its involvement in such lending will continue. At
June 30, 1998, the 53 commercial business loans outstanding had an aggregate
balance of $5.5 million and an average loan balance of approximately $104,000.
Commercial business loans originated during the six months ended June 30, 1998
totaled $3.9 million. Commercial business loans are offered with both fixed- and
adjustable-interest rates. Adjustable-rates on commercial business loans are
priced against the Citibank, N.A. or WALL STREET JOURNAL prime rate, plus a
margin. The loans are offered with terms of up to five years. Such loans are
underwritten using the Association's customary underwriting standards.
At June 30, 1998, the largest commercial business loan was secured by
inventory and had an outstanding principal balance of $500,000. It is currently
performing in accordance with its terms.
Commercial business loans generally bear higher interest rates than
residential loans, but they also may involve a higher risk of default since
their repayment is generally dependent on the successful operation of the
borrower's business. Personal guarantees from the borrower or a third party are
generally obtained as a condition to originating its commercial business loans.
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LOAN ORIGINATIONS, SOLICITATION, PROCESSING, COMMITMENTS, AND
PURCHASES. Loan originations are derived from a number of sources including real
estate broker referrals, existing customers, developers and walk-in customers.
In the case of a real estate loan, an independent appraiser approved by the
Association appraises the real estate intended to secure the proposed loan.
Outside members of the Board of Directors, the Chairman of the Board of
Directors, the President and certain other officers have been granted the
authority to approve loans in various amounts depending on the type of loans
involved. The Association has also established a Loan Committee which consists
of at least one outside director and certain officers. Larger loans must be
approved by one or more of such authorized officers or directors or by the Loan
Committee depending on the size of the loan. Loans in excess of $2.0 million may
only be approved by the Loan Committee after the entire Board of Directors is
informed. At June 30, 1998, commitments to originate loans, excluding the
undisbursed portion of loans in process, totaled $7.6 million.
If the loan is approved, the commitment letter specifies the terms and
conditions of the proposed loan including the amount of the loan, interest rate,
amortization term, a brief description of the required collateral, and required
insurance coverage. Fire and casualty insurance is required at the time the loan
is made and throughout the term of the loan, and upon request of the
Association, flood insurance may be required. Title insurance is required on all
loans secured by real property.
In addition to originations, the Association also purchases loans
secured by one- to four-family residences from consortiums, mortgage origination
companies, or brokers. See "-One- to Four-Family Residential Real Estate Loans."
In addition, the Association may purchase participation loans when there are
more funds available for lending in excess of the demand for loans in the local
market or to facilitate funding of larger projects. Such loans, which totaled
$53.2 million at June 30, 1998, are secured by residential real estate loans.
Substantially all of such loans are whole loans; however, participation
interests account for approximately $2.0 million of the $53.2 million.
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ORIGINATION, PURCHASE AND SALE OF LOANS. The table below shows the loan
origination, purchase and sales activity for the periods indicated.
<TABLE>
<CAPTION>
For Year For Three
For Six Months Ended Ended Months Ended For Year Ended
June 30, December 31, December 31, September 30,
---------------------- ------------ ------------- ----------------------
1998 1997 1997 1996 1996 1995
--------- --------- --------- --------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Loans receivable, beginning of period ........ $ 451,709 $ 389,040 $ 389,040 $ 376,219 $ 329,442 $ 317,117
Originations:
Real estate:
One- to four-family residential (1) ..... 99,229 35,587 67,923 20,226 82,596 35,909
Land loans .............................. 527 4,491 14,360 5,498 6,848 18,163
Multi-family (1) ........................ 148 902 1,427 -- 1,263 --
Commercial (1) .......................... 4,279 19,508 28,667 1,806 16,102 8,197
--------- --------- --------- --------- --------- ---------
Total real estate loans .............. 104,183 60,488 112,377 27,530 106,809 62,269
Non-real estate loans:
Consumer ................................ 2,053 2,119 4,116 1,525 5,698 4,154
Commercial business ..................... 3,915 588 2,699 515 796 646
--------- --------- --------- --------- --------- ---------
Total originations ................... 110,151 63,195 119,192 29,570 113,303 67,069
Transfer of mortgage loans to
foreclosed real estate .................... (653) (91) (558) (78) (400) (1,394)
Loan and participations purchased ............ 38,307 2,590 24,455 1,998 16,775 2,728
Repayments ................................... (72,466) (39,423) (76,816) (20,042) (72,114) (50,452)
Loan sales ................................... -- (276) (631) (283) (5,429) (105)
Decrease (increase) in allowance for loan
losses .................................... (105) (60) (120) (230) 1,180 (102)
Decrease in amortization of unearned discount
and premiums and net deferred fees and cost 983 159 406 63 589 62
Increase (decrease) in loans in process ...... (970) (4,985) (3,398) 1,553 (7,065) (5,381)
Change in other .............................. 419 (254) 139 270 (62) (100)
--------- --------- --------- --------- --------- ---------
Net loan activity ............................ 75,666 20,855 62,669 12,821 46,777 12,325
--------- --------- --------- --------- --------- ---------
Total loans receivable at end of period ...... $ 527,375 $ 409,895 $ 451,709 $ 389,040 $ 376,219 $ 329,442
========= ========= ========= ========= ========= =========
</TABLE>
- -------------------------
(l) Includes loans to finance the construction of one- to four-family
residential properties, and loans originated for sale in the secondary
market.
LOAN ORIGINATION FEES AND OTHER INCOME. In addition to interest earned
on loans, the Association may receive loan origination fees. To the extent that
loans are originated or acquired for the portfolio, Statement of Financial
Accounting Standards No. 91, "Accounting for Nonrefundable Fees and Costs
Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases" ("SFAS No. 91") requires that loan origination fees and costs be
deferred and amortized as an adjustment of yield over the life of the loan by
use of the level yield method. ARM loans originated below the fully-indexed
interest rate will have a substantial portion of the deferred amount recognized
as income in the initial adjustment period. Fees and costs deferred under SFAS
No. 91 are recognized into income immediately upon prepayment or the sale of the
related loan. At June 30, 1998, unearned discounts and premiums and deferred
loan origination fees and costs totaled $1.2 million. Loan origination fees vary
with the volume and type of loans and commitments made and purchased, principal
repayments, and competitive conditions in the mortgage markets which, in turn,
respond to the demand and availability of funds.
In addition to loan origination fees, the Association also receives
servicing income and other fees that consist primarily of servicing fees, late
charges, and other miscellaneous fees. Such fees totaled $104,000, $269,000,
$33,000, $148,000, and $184,000 for the six months ended June 30, 1998, the year
ended December 31, 1997, the three months ended December 31, 1996 and the years
ended September 30, 1996, and 1995, respectively.
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LOAN SERVICING. While the Association primarily originates loans for
its own portfolio, it also has sold fixed-rate loans to both Freddie Mac
("FHLMC") and to FNMA. At June 30, 1998, the unpaid balances of loans sold
totaled approximately $16.3 million. The Association services such loans and a
fee is received of between one-fourth to three-eighths of a percent per loan.
The Association does not purchase loan servicing from other sources.
LOANS-TO-ONE BORROWER. Savings and loan associations are subject to the
same loans-to-one borrower limits as those applicable to national banks. Under
current regulations loans to one borrower are restricted to an amount equal to
15% of unimpaired capital and unimpaired surplus on an unsecured basis, and an
additional amount equal to 10% of unimpaired capital and unimpaired surplus if
the loan is secured by readily marketable collateral (generally, financial
instruments and bullion, but not real estate). The 15% limitation resulted in a
dollar limitation of approximately $12.5 million at June 30, 1998. All of the
Association's loans are in compliance with the loans-to-one borrower limits at
June 30, 1998.
The following table presents the five largest lending relationships at
June 30, 1998:
<TABLE>
<CAPTION>
At June 30, 1998
--------------------------------
Total of Loan Amount Disbursed
-------------- ----------------
(In Thousands)
<S> <C> <C>
Construction loans to build single-family homes $9,740 $5,364
Construction loans to build single-family homes 7,139 5,072
Loans secured by convenience stores and
gas stations 5,200 4,685
Construction loans to build single-family homes 4,576 4,311
Construction loans to build multi-family homes 4,443 2,616
</TABLE>
At June 30, 1998, all of the aforementioned loans were performing in
accordance with their terms.
ASSET QUALITY
DELINQUENCIES. The Association's collection procedures provide that
when a loan is 15 days past due, a computer-generated late charge notice is sent
to the borrower requesting payment. If the delinquency continues at 30 days, a
delinquent notice is sent and personal contact efforts are attempted, either in
person or by telephone. Also, plans to arrange a repayment plan are made at this
point. If a loan becomes 60 days past due and no progress has been made in
resolving the delinquency, a 10-day demand letter is sent and personal contact
is attempted. The loan also becomes subject to possible legal action if suitable
arrangements to repay have not been made. In addition, the borrower is advised
that he or she may obtain access to consumer counseling services, to the extent
required by regulations of the Department of Housing and Urban Development
("HUD"). When a loan continues in a delinquent status for 90 days or more, and a
repayment schedule has not been made or kept by the borrower, generally a notice
of intent to foreclose is sent to the borrower, giving the borrower 10 days to
repay all outstanding interest and principal. If the delinquency is not cured,
foreclosure proceedings are initiated.
DELINQUENT LOANS. Loans are reviewed on a regular basis and are placed
on a non-accrual status when, in the opinion of management, the collection of
additional interest is doubtful. In addition, loans are placed on non-accrual
status when either principal or interest is 90 days or more past due, or less
than 90 days, in the event the loan has been
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referred to the Association's legal counsel for foreclosure. Interest accrued
and unpaid at the time a loan is placed on a non-accrual status is charged
against interest income.
The following table sets forth information with respect to loans past
due 60 to 89 days in the loan portfolio at the dates indicated.
<TABLE>
<CAPTION>
At At At
June 30, December 31, September 30,
-------- ------------ -------------------------
1998 1997 1996 1996 1995 1994 1993
-------- ---- ---- ---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Loans past due 60-89 days:
One- to four-family residential ....... $440 $469 $446 $209 $493 $193 $202
Commercial and multi-family real estate 23 -- -- -- -- -- --
Consumer and commercial business ...... 7 54 72 3 24 -- --
Land .................................. -- -- -- -- -- 95 --
---- ---- ---- ---- ---- ---- ----
Total past due 60-89 days ......... $470 $523 $518 $212 $517 $288 $202
==== ==== ==== ==== ==== ==== ====
</TABLE>
NON-PERFORMING ASSETS. At June 30,1998, non-performing assets
(non-performing loans and real estate owned (" REO")) totaled $2.1 million, and
the ratio of non-performing assets to total assets was 0.27%. Real estate
acquired by the Association as a result of foreclosure or by deed in lieu of
foreclosure is classified as substandard until such time as it is sold. REO is
recorded at cost which is the estimated fair value of the property at the time
the loan is foreclosed. Subsequent to foreclosure, these properties are carried
at the lower of cost or fair value less estimated costs to sell.
The following table sets forth information regarding non-accrual loans
delinquent 90 days or more, and real estate acquired or deemed acquired by
foreclosure at the dates indicated. When a loan is delinquent 90 days or more,
all accrued interest thereon is fully reserved and the loan ceases to accrue
interest thereafter. For all the dates indicated, there were no material
restructured loans within the meaning of SFAS No. 15 (as amended by) SFAS No.
121.
<TABLE>
<CAPTION>
At At At
June 30, December 31, September 30,
-------- ---------------- ------------------------------------
1998 1997 1996 1996 1995 1994 1993
-------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
Non-performing loans:
One-to four family residential $1,201 $1,289 $1,524 $ 832 $ 605 $1,571 $2,374
Commercial and multi-family
real estate ................ 51 -- -- -- -- 1,282 4,316
Consumer and commercial
business loans ............. 50 55 107 10 39 20 36
Land ......................... 64 35 -- -- 18 82 9
------ ------ ------ ------ ------ ------ ------
Total non-performing loans ...... 1,366 1,379 1,631 842 662 2,955 6,735
REO ............................. 711 592 1,455 1,384 1,910 3,686 1,324
Other non-performing assets (1).. -- -- -- 400 -- -- --
------ ------ ------ ------ ------ ------ ------
Total non-performing assets (2).. $2,077 $1,971 $3,086 $2,626 $2,572 $6,641 $8,059
====== ====== ====== ====== ====== ====== ======
Total non-performing loans to net
loans receivable ............. 0.26% 0.31% 0.42% 0.22% 0.20% 0.93% 2.05%
Total non-performing loans to
total assets ................. 0.27 0.19 0.25 0.13 0.12 0.53 1.29
Total non-performing loans and
REO to total assets .......... 0.27 0.27 0.47 0.40 0.45 1.25 1.54
</TABLE>
- ---------------------
(1) The other non-performing asset at September 30, 1996 represented a deposit
account due to the Association whose recovery was in doubt. All funds were
recovered in the subsequent periods.
(2) Net of specific valuation allowances.
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The largest non-performing asset was REO with a recorded value of
$257,000 at June 30, 1998 and an appraised value of $340,000. The loan was
originated in fiscal 1989 and was collateralized by a citrus grove located in
St. Lucie County. There are currently no immediate prospects for the sale of the
property.
During the six months ended June 30, 1998, gross interest income of
$63,000 would have been recorded on non-performing loans accounted for on a
non-accrual basis if the loans had been current throughout the period. No
interest income on non-accrual loans was included in income during such period.
There are currently no immediate prospects for sale of the property.
The following table sets forth information regarding delinquent loans,
REO and loans to facilitate the sale of REO at June 30, 1998.
<TABLE>
<CAPTION>
At June 30, 1998
-------------------
Balance Number
------- ------
(In Thousands)
<S> <C> <C>
Residential real estate:
Loans 60 to 89 days delinquent .... $ 440 8
Loans more than 89 days delinquent 1,201 18
Commercial and multi-family real estate:
Loans 60 to 89 days delinquent .... 23 1
Loans more than 89 days delinquent 51 1
Consumer and commercial business:
Loans 60 to 89 days delinquent .... 7 3
Loans more than 89 days delinquent 50 3
Land
Loans 60 to 89 days delinquent .... -- 1
Loans more than 89 days delinquent 64 2
REO .................................... 711 7
Loans to facilitate sale of REO ........ 153 3
------ ----
Total ......................... $2,700 47
====== ====
</TABLE>
CLASSIFICATION OF ASSETS. Federal regulations provide for the
classification of loans and other assets such as debt and equity securities
considered by OTS to be of lesser quality as substandard, doubtful, or loss
assets. An asset is considered substandard if it is inadequately protected by
the current net worth and paying capacity of the obligor or of the collateral
pledged, if any. Substandard assets include those characterized by the distinct
possibility that the savings institution will sustain some loss if the
deficiencies are not corrected. Assets classified as doubtful have all of the
weaknesses inherent in those classified substandard, with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions, and values, highly
questionable and improbable. Assets classified as loss are those considered
uncollectible and of such little value that their continuance as assets without
the establishment of a specific loss reserve is not warranted. Assets that do
not expose the savings institution to risk sufficient to warrant classification
in one of the aforementioned categories, but which possess some weaknesses, are
required to be designated special mention by management.
When a savings institution classifies problem assets as either
substandard or doubtful, it is required to establish general allowances for loan
losses in an amount deemed prudent by management. General allowances represent
loss allowances that have been established to recognize the inherent risk
associated with lending activities, but which, unlike specific allowances, have
not been allocated to particular problem assets. When a savings institution
classifies problem
75
<PAGE> 77
assets as loss, it is required either to establish a specific allowance for
losses equal to 100% of the amount of the assets so classified, or to charge off
such amount. A savings institution's determination as to the classification of
its assets and the amount of its valuation allowances is subject to review by
the OTS, which can order the establishment of additional general or specific
loss allowances. Problem loans in the portfolio are regularly reviewed to
determine whether any loans require classification in accordance with applicable
regulations.
The following table sets forth the aggregate amount of the
Association's classified assets at the dates indicated.
<TABLE>
<CAPTION>
At At At
June 30, December 31, September 30,
-------- ----------------- -----------------
1998 1997 1996 1996 1995
-------- ------- ------- ------- -------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Substandard assets ......... $ 2,699 $ 3,056 $ 4,205 $ 3,745 $ 8,652
Doubtful assets ............ -- -- -- -- --
Loss assets ................ 295 547 344 544 1,565
-------- ------- ------- ------- -------
Total classified assets $ 2,994 $ 3,603 $ 4,549 $ 4,289 $10,217
======== ======= ======= ======= =======
</TABLE>
ALLOWANCE FOR LOAN LOSSES. Management's policy is to provide for
estimated losses on the loan portfolio based on management's evaluation of the
potential losses that may be incurred. Provisions for losses, which increase the
allowances for loan losses, are established by charges to income. Such
allowances represent the amounts which, in management's judgment, are adequate
to absorb charge-offs of existing loans which may become uncollectible. The
adequacy of the allowance is determined by management's monthly evaluation of
the loan portfolio and related collateral, in light of past loss experience, the
volume and type of lending engaged in by the Association, present economic
conditions and other factors considered relevant by management. Anticipated
changes in economic factors which may influence the level of the allowances are
considered in the evaluation by management if the changes can be readily
determined.
Management continues to review the entire loan portfolio to determine
the extent, if any, to which further additional loan loss provisions may be
deemed necessary. Management believes that the current allowance for loan losses
is adequate, however, there can be no assurance that the allowance for loan
losses will be adequate to cover losses that may in fact be realized in the
future or that additional provisions for loan losses will not be required.
76
<PAGE> 78
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES. The following table sets
forth the analysis of the allowance for loan losses for the periods indicated.
<TABLE>
<CAPTION>
At June 30, At December 31,
----------------------- -----------------------
1998 1997 1997 1996
--------- --------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Total loans outstanding ........................... $ 527,375 $ 409,895 $ 451,709 $ 389,040
========= ========= ========= =========
Average loans outstanding for the period .......... $ 486,928 $ 399,577 $ 411,098 $ 383,258
========= ========= ========= =========
Allowance balance (at beginning of period) ........ $ 2,662 $ 2,542 $ 2,542 $ 2,312
Provision for losses:
Real estate loans (1) ............................ 213 83 264 243
Consumer and commercial business loans ........... -- -- -- 14
Recoveries ........................................ -- -- -- --
Charge-offs:
Real estate loans (1) ........................... (108) (23) (143) (13)
Consumer and commercial business loans .......... -- -- (1) --
--------- --------- --------- ---------
Allowance balance (at end of period) .............. $ 2,767 $ 2,602 $ 2,662 $ 2,542
========= ========= ========= =========
Allowance for loan losses as a percent of net loans
receivable at end of period .................... 0.52% 0.63% 0.59% 0.65%
Net loans charged off as a percent of average
loans outstanding .............................. 0.02% --% 0.04% --%
Ratio of allowance for loan losses to total non-
performing loans at end of period (2) ........... 202.56% 177.49% 193.04% 155.86%
Ratio of allowance for loan losses to total non-
performing loans and REO at end of period (2) ... 133.22% 92.30% 135.06% 82.37%
</TABLE>
<TABLE>
<CAPTION>
At September 30,
---------------------------------------------------
1996 1995 1994 1993
--------- --------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Total loans outstanding ........................... $ 376,219 $ 329,442 $ 317,117 $ 328,747
========= ========= ========= =========
Average loans outstanding for the period .......... $ 346,880 $ 321,849 $ 321,721 $ 352,173
========= ========= ========= =========
Allowance balance (at beginning of period) ........ $ 3,492 $ 3,390 $ 3,748 $ 2,281
Provision for losses:
Real estate loans (1) ............................ 84 234 967 2,395
Consumer and commercial business loans ........... 6 22 3
Recoveries ........................................ -- -- -- --
Charge-offs:
Real estate loans (1) ........................... (1,264) (132) (1,325) (885)
Consumer and commercial business loans .......... (14) (6) (22) (46)
--------- --------- --------- ---------
Allowance balance (at end of period) .............. $ 2,312 $ 3,492 $ 3,390 $ 3,748
========= ========= ========= =========
Allowance for loan losses as a percent of net loans
receivable at end of period .................... 0.61% 1.06% 1.07% 1.14%
Net loans charged off as a percent of average
loans outstanding .............................. 0.37% 0.04% 0.41% 0.26%
Ratio of allowance for loan losses to total non-
performing loans at end of period (2) ........... 274.58% 527.49% 114.72% 55.65%
Ratio of allowance for loan losses to total non-
performing loans and REO at end of period (2) ... 103.86% 135.77% 51.05% 46.51%
</TABLE>
- ------------------
(1) The provisions in 1993 and 1994 primarily related to four non-performing
loans, including a commercial real estate loan with a principal balance in
excess of $1.2 million. The Association charged off substantially all of the
principal balance of such loans during fiscal 1993, 1994 and 1996 as a
result of the disposition of such loans.
(2) Net of specific reserves.
77
<PAGE> 79
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES. The following table sets forth
the allocation of allowance for loan losses by loan category for the periods
indicated. Management believes that the allowance can be allocated by category
only on an approximate basis. The allocation of the allowance by category is not
necessarily indicative of future losses and does not restrict the use of the
allowance to absorb losses in any category.
<TABLE>
<CAPTION>
At June 30, At December 31,
------------------------------------------- -------------------------------------------
1998 1997 1997 1996
---------------------- -------------------- --------------------- --------------------
% of Loans in % of Loans in % of Loans in % of Loans in
Each Each Each Each
Category to Category to Category to Category to
Total Total Total Total
Amount Loans (1) Amount Loans (1) Amount Loans (1) Amount Loans (1)
------ -------------- ------ ------------- ------ ------------- ------ ------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at end of period applicable to:
One- to four-family residential .... $1,097 83.36% $1,042 77.56% $1,042 78.18% $1,037 79.68%
Land ............................... 650 2.24 650 3.62 650 3.58 630 4.71
Multi-family residential ........... 300 1.58 300 2.07 300 1.84 300 1.96
Commercial real estate ............. 600 9.08 520 12.52 550 12.38 500 9.17
Consumer and commercial business ... 120 3.74 90 4.23 120 4.02 75 4.48
------ ------ ------ ------ ------ ------ ------ ------
Total allowance for loan losses ....... $2,767 100.00% $2,602 100.00% $2,662 100.00% $2,542 100.00%
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
- ------------------
(1) Percentages do not reflect adjustments for undisbursed loan proceeds,
unearned discounts and net deferred fees, and the allowance for loan losses.
<TABLE>
<CAPTION>
At September 30,
---------------------------------------------------------------------------------------
1996 1995 1994 1993
---------------------- -------------------- --------------------- --------------------
% of Loans in % of Loans in % of Loans in % of Loans in
Each Each Each Each
Category to Category to Category to Category to
Total Total Total Total
Amount Loans (1) Amount Loans (1) Amount Loans (1) Amount Loans (1)
------ ------------- ------ ------------- ------ ------------- ------ ------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at end of period applicable to:
One- to four-family residential $ 870 79.83% $ 790 79.10% $ 700 78.52% $ 700 79.50%
Land 630 420 630 4.47 630 6.18 600 5.02
Multi-family residential 300 2.03 300 2.11 300 2.05 453 1.75
Commercial real estate 452 9.58 1,712 10.14 1,700 9.84 1,935 10.27
Consumer and commercial business 60 4.36 60 4.18 60 3.41 60 3.46
------ ------ ------ ------ ------ ------ ------ ------
Total allowance for loan losses $2,312 100.00% $3,492 100.00% $3,390 100.00% $3,748 100.00%
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
- ------------------
(1) Percentages do not reflect adjustments for undisbursed loan proceeds,
unearned discounts and net deferred fees, and the allowance for loan losses.
78
<PAGE> 80
SECURITIES PORTFOLIO
The Association's primary focus is the origination of loans. However,
during past periods when mortgage loan demand was moderate and the Association
had de-emphasized the origination of fixed-rate loans, management invested
excess liquidity in investment securities, including mutual funds, and in
mortgage-backed and related securities rather than purchasing whole loans or
loan participations. At June 30, 1998, the Association's total securities and
investments amounted to $158.4 million. Such securities are subject to
classification based on the intentions of management. Securities purchased for
the portfolio are classified as either held to maturity or as available for
sale. The Association has no securities classified as trading. During December
1995, the provisions of SFAS No. 115 "Questions and Answers Guide" were adopted
which allowed between November 15, 1995 and December 31, 1995 a one-time
reclassification of securities from held to maturity to available for sale. The
Association reclassified $49.5 million of securities from investments-held to
maturity and mortgage-backed and related securities-held to maturity to
securities available for sale. Such reclassification resulted in a credit of
$247,000 to shareholders' equity. Subsequently, $749,000 of the securities were
sold at no gain or loss.
The Association maintains an Investment Committee which meets on a
monthly basis to review the securities portfolio and make recommendations to be
carried out by management. All investments must be rated BBB or higher by a
recognized rating service. The Investment Committee consists of the
Association's President and Chief Executive Officer, James B. Pittard, Jr.,
Senior Vice President, Chief Financial Officer and Treasurer, Larry J. Baker,
and Senior Vice President, Cecil F. Howard, Jr.
MORTGAGE-BACKED AND RELATED SECURITIES. At June 30, 1998, net
mortgage-backed and related securities totaled $83.5 million, or 10.91%, of
total assets. Of this amount, $41.9 million was classified as held to maturity
and $41.6 million was available for sale. At June 30, 1998, the market value of
the net mortgage-backed and related securities portfolio totaled approximately
$84.0 million. Management primarily invests in fixed-rate mortgage-backed and
related securities with weighted average lives of five to seven years.
Management believes that investing in short-term mortgage-backed and related
securities limits the exposure to higher interest rates. During the six months
ended June 30, 1998, no mortgage-backed and related securities were purchased.
Also included in the mortgage-backed securities portfolio at June 30, 1998, was
$72.5 million of collateralized mortgage obligations ("CMOs"), $6.3 million of
pass-through securities issued by FHLMC, $2.9 million of pass-through securities
issued by FNMA and $1.5 million of pass-through securities issued by the
Government National Mortgage Association ("GNMA"). The FHLMC and FNMA
pass-through securities are primarily comprised of five-year and seven-year
balloon mortgage loans. The GNMA pass-through securities were purchased in the
early 1980s and the loans underlying the GNMAs are well seasoned. A limited
amount of mortgage-backed securities issued by the Agency for International
Development ("AID") are also included in the portfolio.
CMOs are typically issued by a special-purpose entity (in the
Association's case, private issuers), which may be organized in a variety of
legal forms, such as a trust, a corporation, or a partnership. The entity
aggregate pools of pass-through securities, which are used to collateralize the
CMO. Once combined, the cash flows are divided into "tranches" or "classes" of
individual bonds, thereby creating more predictable average durations for each
bond than the underlying pass-through pools. Accordingly, under the CMO
structure, all principal paydowns from the various mortgage pools are allocated
to a CMO's first class until it has been paid off, then to a second class until
such class has been paid off, and then to the next classes in order of priority.
Substantially all of the CMOs held in the mortgage-backed and related securities
portfolio consist of senior sequential tranches, primarily investments in one of
the first three tranches of the CMO. By purchasing senior sequential tranches,
management
79
<PAGE> 81
is attempting to ensure the cash flow associated with such an investment.
Generally, such tranches have stated maturities ranging from 6.5 years to 30
years; however, because of prepayments, the expected weighted average life of
these securities is less than the stated maturities. While non-agency private
issues are somewhat less liquid than CMOs insured or guaranteed by the GNMA,
FNMA or FHLMC, they generally have a higher yield than agency insured or
guaranteed CMOs, such higher yield reflecting in part the lack of such guarantee
or protection. In the past, CMO residuals were purchased in which the repayment
of principal is only made after the senior tranches of the CMO are repaid in
full as to principal. Consequently, investments in CMO residuals are riskier
than investments in senior sequential tranches because of their relatively
junior position to more senior tranches and the interest rate risk associated
with such securities, in that they could result in a loss of a substantial
portion of the original investment. Cash flows from residual interests are very
sensitive to prepayments and, therefore, contain a high degree of interest rate
risk. Residual interests represent an ownership interest in the underlying
collateral, subject to the first lien of the CMO investors. At June 30, 1998,
the carrying value of the CMO residuals was $5,000. The Association no longer
invests in CMO residuals.
80
<PAGE> 82
The following tables set forth the carrying value of, and activity in,
the mortgage-backed and related securities portfolio at the dates indicated.
<TABLE>
<CAPTION>
At At At
June 30, December 31, September 30,
-------- ------------------- -------------------
1998 1997 1996 1996 1995
-------- -------- -------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Mortgage-backed and related securities:
Held to maturity:
CMOs ........................................... $ 30,892 $ 33,638 $ 37,359 $ 38,308 $ 57,586
CMO residuals .................................. 6 7 15 20 118
FHLMCs ......................................... 6,324 7,465 9,673 9,973 11,943
GNMAs .......................................... 1,525 1,751 2,108 2,233 2,774
FNMAs .......................................... 2,925 3,316 3,933 4,076 4,691
AID loans ...................................... 212 236 317 335 387
-------- -------- -------- -------- --------
Total mortgage-backed and related securities held
to maturity .................................. 41,884 46,413 53,405 54,945 77,499
Available for sale: (shown at market value)
CMOs ......................................... 41,612 46,350 51,974 53,318 --
-------- -------- -------- -------- --------
Total mortgage-backed and related securities ...... $ 83,496 $ 92,763 $105,379 $108,263 $ 77,499
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Three Months
Six Months Year Ended Ended Year Ended
Ended June 30, December 31, December 31, September 30,
---------------------- ------------ ------------ ----------------------
1998 1997 1997 1996 1996 1995
--------- --------- ----------- ------------ --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage-backed and related securities at:
Beginning of period ..................... $ 92,763 $ 105,379 $ 105,379 $ 108,263 $ 77,499 $ 41,281
Purchases ............................... -- 679 679 -- 43,703 41,549
Calls ................................... -- -- -- -- (311) --
Sales ................................... -- -- -- -- (749) --
Repayments .............................. (9,358) (6,388) (14,421) (2,840) (11,454) (5,286)
Discount (premium) amortization ......... 80 76 216 60 189 (45)
Gain on call ............................ -- -- -- -- 254 --
(Increase) decrease in market value
available for sale (net) ............ 11 520 910 (104) (868) --
--------- --------- --------- --------- --------- ---------
Mortgage-backed and related securities at
end of period ......................... $ 83,496 $ 100,266 $ 92,763 $ 105,379 $ 108,263 $ 77,499
========= ========= ========= ========= ========= =========
</TABLE>
81
<PAGE> 83
The following table sets forth the allocation of fixed- and
adjustable-rate mortgage-backed and related securities for the periods
indicated.
<TABLE>
<CAPTION>
At June 30, At December 31,
--------------------- --------------------------------------------
1998 1997 1996
--------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
Mortgage-backed and related securities, net:
Held to maturity:
Adjustable-rate CMOs ................................. $ 3,032 3.63% $ 3,028 3.26% $ 3,027 2.87%
Fixed-rate:
FHLMC .............................................. 6,324 7.57 7,465 8.05 9,673 9.18
FNMA ............................................... 2,925 3.50 3,316 3.57 3,933 3.73
GNMA ............................................... 1,525 1.83 1,751 1.89 2,108 2.00
CMO ................................................ 27,866 33.37 30,617 33.01 34,347 32.59
AID loans .......................................... 212 0.26 236 0.25 317 0.30
-------- ------ -------- ------ -------- ------
Total fixed-rate .................................. 38,852 46.53 43,385 46.77 50,378 47.81
-------- ------ -------- ------ -------- ------
Total mortgage-backed and related
securities-held to maturity, net .............. 41,884 50.16 46,413 50.03 53,405 50.68
-------- ------ -------- ------ -------- ------
Available for sale: (at market value)
Adjustable-rate CMOs ............................... 3,643 4.36 3,331 3.59 3,594 3.41
Fixed-rate CMOs .................................... 37,969 45.48 43,019 46.38 48,380 45.91
-------- ------ -------- ------ -------- ------
Total mortgage-backed and related
securities available for sale, net ................. 41,612 49.84 46,350 49.97 51,974 49.32
-------- ------ -------- ------ -------- ------
Total mortgage-backed and related securities, net ...... $ 83,496 100.00% $ 92,763 100.00% $105,379 100.00%
======== ====== ======== ====== ======== ======
</TABLE>
<TABLE>
<CAPTION>
At September 30,
-----------------------------------------
1996 1995
------------------- ------------------
<S> <C> <C> <C> <C>
(Dollars in Thousands)
Mortgage-backed and related securities, net:
Held to maturity:
Adjustable-rate CMOs ................................. $ 3,030 2.80% $ 3,980 5.14%
Fixed-rate:
FHLMC .............................................. 9,973 9.21 11,943 15.41
FNMA ............................................... 2,233 2.06 2,774 3.58
GNMA ............................................... 4,076 3.76 4,691 6.05
CMO ................................................ 35,298 32.60 53,724 69.32
AID loans .......................................... 335 0.32 387 0.50
-------- ------ -------- ------
Total fixed-rate .................................. 51,915 47.95 73,519 94.86
-------- ------ -------- ------
Total mortgage-backed and related
securities-held to maturity, net .............. 54,945 50.75 77,499 100.00
-------- ------ -------- ------
Available for sale: (at market value)
Adjustable-rate CMOs ............................... 3,670 3.39 -- --
Fixed-rate CMOs .................................... 49,648 5.86 -- --
-------- ------ -------- ------
Total mortgage-backed and related
securities available for sale, net ................. 53,318 49.25 -- --
-------- ------ -------- ------
Total mortgage-backed and related securities, net ...... $108,263 100.00% $ 77,499 100.00%
======== ====== ======== ======
</TABLE>
82
<PAGE> 84
INVESTMENTS. Investments purchased are comprised primarily of U.S.
Government and agency obligations, mutual funds that invest in mortgage-backed
securities and government and agency obligations, corporate debt securities and
FHLB stock. The carrying value of the interest-earning deposits, investments and
securities available for sale totaled $74.9 million or 9.79% of total assets at
June 30, 1998.
The Association is required under federal regulations to maintain a
minimum amount of liquid assets that may be invested in specified short-term
securities and certain other investments. The Association generally has
maintained a portfolio of liquid assets that exceeds regulatory requirements.
Liquidity levels may be increased or decreased depending upon the yields on
investment alternatives and upon management's judgment as to the attractiveness
of the yields then available in relation to other opportunities and its
expectation of the level of yield that will be available in the future, as well
as management's projections as to the short term demand for funds to be used in
loan origination and other activities. For further information regarding the
investments see Notes 1, 2 and 3 to the Notes to Consolidated Financial
Statements contained elsewhere herein.
INVESTMENT SECURITIES. At June 30, 1998, investment securities included
U.S. Government and agency obligations totaling $13.8 million and corporate debt
issues totaling $7.6 million. In addition, at June 30, 1998 the Association held
FHLB stock totaling $3.8 million.
Included in corporate debt issues are asset-backed securities which
include two debt securities secured by automobile loan receivables totaling
$977,000 at June 30, 1998 purchased during fiscal year 1994, the repayment of
which is secured by automobile receivables. These securities are rated BBB or
above by Standard & Poors and provide an effective yield of 6.33%. Debt
instruments which depend on the repayment of automobile loans involve a certain
degree of risk since in the event that borrowers of the automobile loan default,
the issuer of the security may have insufficient funds to repay the principal or
interest of the security in accordance with its terms.
The FHLB requires its members to own a required amount of FHLB stock
based upon the greater of a percentage of residential mortgage loans in the
portfolio or a percentage of total assets. At June 30, 1998, FHLB stock held by
the Association totaled $3.8 million.
SECURITIES AVAILABLE FOR SALE. Securities available for sale are
carried on the books at fair value as required by FASB No. 115 and totaled $91.3
million at June 30, 1998. Included in securities available for sale are equity
securities totaling $25,000, mutual funds totaling $40.6 million, and U.S.
Government and agency obligations totaling $9.1 million and mortgage-backed and
related securities totaling $41.6 million.
Mutual fund investments include mutual funds that invest primarily in
mortgage-backed securities and government and agency securities, and are
classified as available for sale for accounting purposes. The mutual funds which
invest in mortgage-backed securities have characteristics similar to the
mortgage-backed securities in which they invest. Mutual fund investments include
approximately $35.5 million in funds which invest in adjustable-rate
mortgage-backed securities issued by FNMA, FHLMC and GNMA, as well as CMOs and
real estate mortgage investment conduits and other securities collateralized by
or representing interests in real estate mortgages, and approximately $5.0
million in funds which invest in asset backed, corporate and CMO obligations.
INVESTMENT PORTFOLIO. The following table sets forth the carrying value
of the investment securities and securities available for sale at the dates
indicated. At June 30, 1998, the market value of the investments was
approximately $74.9 million. The market value of investments and securities
available for sale includes FHLB stock at book value which approximates market
value.
83
<PAGE> 85
<TABLE>
<CAPTION>
At At At
June 30, December 31, September 30,
-------- ------------------- -------------------
1998 1997 1996 1996 1995
-------- -------- -------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Investment securities:
United States Government and agency obligations $ 13,820 $ 13,039 $ 11,701 $ 11,691 $ 38,987
Corporate debt issues .......................... 7,623 8,349 10,138 10,602 13,692
Certificates of deposit ........................ -- -- -- -- 7,000
FHLB stock ..................................... 3,782 3,264 2,864 5,384 7,384
-------- -------- -------- -------- --------
Total investment securities ................ 25,225 24,652 24,703 27,677 67,063
-------- -------- -------- -------- --------
Securities available for sale: (shown at fair value)
Equity securities:
FNMA stock ............................... 25 23 14 14 10
Financial Institutions Insurance
Group, Limited stock .................. -- -- -- 101 86
-------- -------- -------- -------- --------
Total equity securities .................... 25 23 14 115 96
-------- -------- -------- -------- --------
Mutual funds ................................... 40,552 40,721 43,067 42,912 26,932
United States Government and agency obligations 9,127 55,175 28,097 27,942 --
-------- -------- -------- -------- --------
Total securities available for sale(1) ..... 49,704 95,919 71,178 70,969 27,028
-------- -------- -------- -------- --------
Total investment portfolio ................. $ 74,929 $120,571 $ 95,881 $ 98,646 $ 94,091
======== ======== ======== ======== ========
</TABLE>
- ----------------------------
(1) Does not include mortgage-backed and related securities classified available
for sale. See "-Mortgage-Backed and Related Securities." At June 30, 1998,
mortgage-backed and related securities available for sale amounted to $41.6
million.
84
<PAGE> 86
SECURITIES PORTFOLIO MATURITIES. The following table sets forth the
scheduled maturities, carrying values, market values and average yields for the
investment securities and securities available for sale at June 30, 1998.
<TABLE>
<CAPTION>
At June 30, 1998
------------------------------------------------------------------------------------
One Year of Less One to Five Years Five to Ten Years More than Ten Years
---------------------- ---------------------- ----------------- -------------------
Weighted Weighted Weighted Weighted
Carrying Average Carrying Average Carrying Average Carrying Average
Value Yield Value Yield Value Yield Value Yield
-------- ------- -------- -------- -------- -------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment securities:
United States Government
and agency obligations ............ $ 1,324 11.32% $ 9,743 11.18% $ 2,753 8.35% $ -- -%
Corporate debt issues ................ -- -- 977 6.33 -- -- 6,646 5.83
FHLB stock ........................... -- -- -- -- -- -- 3,782 7.25
------- ----- ------- ----- ------- ---- ------- ----
Total investment securities ...... 1,324 11.32 10,720 10.74 2,753 8.35 10,428 6.35
------- ----- ------- ----- ------- ---- ------- ----
Securities available for sale:
United States Government and
agency obligations ................ $ -- -- $ 7,210 6.27 $ 1,917 7.14 $ -- --
Equity securities .................... 25 1.35 -- -- -- -- -- --
Mutual funds ......................... 40,552 5.52 -- -- -- -- -- --
------- ------- ------- -------
Total securities available
for sale ................... 40,577 5.52 7,210 6.27 1,917 7.14 -- --
------- ----- ------- ----- ------- ---- ------- ----
Total investment securities and
securities available for sale(2) $41,901 5.70% $17,930 8.94% $ 4,670 7.85% $10,428 6.35%
======= ===== ======= ===== ======= ==== ======= ====
</TABLE>
<TABLE>
<CAPTION>
At June 30, 1998
----------------------------------------
Total
-------------------
Average Annualized
Life Weighted
Carrying Market in -1 Average
Value Value Years Yield
-------- ------- ------ ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Investment securities:
United States Government
and agency obligations ............ $13,820 $17,623 4.85% 10.63%
Corporate debt issues ................ 7,623 7,916 6.71 5.94
FHLB stock ........................... 3,782 3,782 -- 7.25
------- ------- ---- -----
Total investment securities ...... 25,225 29,321 5.51 8.71
------- ------- ---- -----
Securities available for sale:
United States Government and
agency obligations ................ $ 9,127 $ 9,127 3.50 6.45
Equity securities .................... 25 25 -- 1.35
Mutual funds ......................... 40,552 40,552 -- 5.52
------- ------- -----
Total securities available
for sale ................... 49,704 49,704 3.50 5.69
------- ------- ---- -----
Total investment securities and
securities available for sale(2) $74,929 $79,025 4.18% 6.70%
======= ======= ==== =====
</TABLE>
- --------------------
(1) Total weighted average life in years calculated only on United States
Government and agency obligations.
(2) Does not include mortgage-backed and related securities classified available
for sale. See "-Mortgage-Backed and Related Securities." At June 30, 1998,
mortgage-backed and related securities available for sale amounted to $41.6
million.
85
<PAGE> 87
SOURCES OF FUNDS
GENERAL. Deposits are the major source of funds for lending and other
investment purposes. In addition to deposits, funds are derived from the
amortization and prepayment of loans and mortgage-backed and related securities,
the maturity of investment securities, operations and, if needed, advances from
the FHLB. Scheduled loan principal repayments are a relatively stable source of
funds, while deposit inflows and outflows and loan prepayments are influenced
significantly by general interest rates and market conditions. Borrowings may be
used on a short-term basis to compensate for reductions in the availability of
funds from other sources or on a longer term basis for general business
purposes. Although the Association periodically reviews the features and terms
of its deposit products, the Association currently does not intend to materially
change any of the deposit products or services it currently offers.
DEPOSITS. Consumer and commercial deposits are attracted principally
from within the market area through the offering of a broad selection of deposit
instruments including non-interest-bearing demand accounts, NOW accounts,
passbook savings, money market deposit accounts, term certificate accounts and
individual retirement accounts. While deposits of $100,000 or more are accepted,
premium rates for such deposits are not currently offered. Deposit account terms
vary according to the minimum balance required, the period of time during which
the funds must remain on deposit, and the interest rate, among other factors. A
management committee meets weekly to evaluate the internal cost of funds, survey
rates offered by competing institutions, review the Association's cash flow
requirements for lending and liquidity and the amount of certificates of deposit
maturing in the upcoming weeks. This committee executes rate changes when deemed
appropriate. Funds are not obtained through brokers, nor are funds solicited
outside the Association's market area.
The following table sets forth information regarding interest rates,
terms, minimum amounts and balances of deposits as of June 30, 1998.
<TABLE>
<CAPTION>
Weighted Percentage
Average Minimum Minimum Of Total
Interest Rate Term Checking and Savings Deposits (1) Amount Balances Deposits
- ---------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
0.00% None Non-interest-bearing account None $ 29,563 5.15%
1.00 None NOW accounts $ 100 74,355 12.95
1.73 None Passbook accounts 100 32,936 5.73
3.23 None Money market deposit accounts 1,000 84,347 14.68
-------- -------
Total checking and savings deposits 221,201 38.51
-------- -------
Certificates of Deposit (1)
--------------------------------------
4.92 1 - 5 months Fixed term, fixed-rate 1,000 12,581 2.19
5.01 6-11 months Fixed term, fixed-rate 1,000 50,990 8.88
5.54 12-19 months Fixed term, fixed-rate 1,000 182,794 31.82
5.77 24-30 months Fixed term, fixed-rate 1,000 28,469 4.96
5.78 36-47 months Fixed term, fixed-rate 1,000 14,072 2.45
5.98 48-59 months Fixed term, fixed-rate 1,000 2,317 0.40
6.15 Over 60 months Fixed term, fixed-rate 1,000 58,507 10.19
1.73 Various Fixed term, fixed-rate 1,000 1,211 0.21
5.10 Various Negotiated Jumbo 100,000 2,241 0.39
-------- -------
Total certificates of deposit 353,182 61.49
-------- -------
Total deposits $574,383 100.00%
======== =======
- ---------------------------------------------------------------------------
(1) IRA and KEOGH accounts are generally offered throughout all terms stated
above with balances of $47.1 million and $1.2 million, respectively.
</TABLE>
86
<PAGE> 88
The following tables sets forth the change in dollar amount in the
various types of savings accounts offered between the dates indicated:
<TABLE>
<CAPTION>
Balance at % of Incr. Balance at % of Incr. Balance at % of Incr.
06/30/98 Deposits (Decr.) 12/31/97 Deposits (Decr.) 12/31/96 Deposits (Decr.)
---------- -------- -------- ---------- -------- -------- ---------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Non-interest-bearing demand
accounts ................ $ 29,563 5.15% $ 4,848 $ 24,715 4.49% $ 6,088 $ 18,627 3.63% $ (905)
NOW accounts .............. 74,355 12.95 4,493 69,862 12.69 2,786 67,076 13.06 3,978
Passbooks ................. 32,936 5.73 2,715 30,221 5.49 (600) 30,821 6.00 (54)
Money market deposit
accounts ................ 84,347 14.68 5,515 78,832 14.31 9,318 69,514 13.53 93
-------- ------ -------- -------- ------ -------- -------- ------ --------
Total core deposits ....... 221,201 38.51 17,571 203,630 36.98 17,592 186,038 22.69 3,112
-------- ------ -------- -------- ------ -------- -------- ------ --------
Time deposits which mature:
Within 12 months ..... 241,203 41.99 (19,569) 260,772 47.35 6,975 253,797 49.40 13,557
Within 12-36 months .. 81,365 14.17 22,571 58,794 10.67 17,590 41,204 8.02 (1,510)
Beyond 36 months ..... 30,614 5.33 3,102 27,512 5.00 (5,158) 32,670 6.36 (379)
-------- ------ -------- -------- ------ -------- -------- ------ --------
Total time deposits ....... 353,182 61.49 6,104 347,078 63.02 19,407 327,671 63.78 11,668
-------- ------ -------- -------- ------ -------- -------- ------ --------
Total deposits .. $574,383 100.00% $ 23,675 $550,708 100.00% $ 36,999 $513,709 100.00% $ 14,780
======== ====== ======== ======== ====== ======== ======== ====== ========
</TABLE>
<TABLE>
<CAPTION>
Balance at % of Incr. Balance at % of
09/30/96 Deposits (Decr.) 09/30/95 Deposits
---------- -------- -------- ---------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Non-interest-bearing demand
accounts ................ $ 19,532 3.9$ 4,688 $ 14,844 3.39%
NOW accounts .............. 63,098 12.6 (763) 63,861 14.60
Passbooks ................. 30,875 6.1 1,174 29,701 6.79
Money market deposit
accounts ................ 69,421 13.9 (6,299) 75,720 17.32
-------- ------ -------- -------- ------
Total core deposits ....... 182,926 36.6 (1,200) 184,126 42.10
-------- ------ -------- -------- ------
Time deposits which mature:
Within 12 months ..... 240,240 48.1 46,740 193,500 44.24
Within 12-36 months .. 42,714 8.5 10,290 32,424 7.41
Beyond 36 months ..... 33,049 6.6 5,723 27,326 6.25
-------- ------ -------- -------- ------
Total time deposits ....... 316,003 63,34 62,753 253,250 57.90
-------- ------ -------- -------- ------
Total deposits .. $498,929 100.00% $ 61,553 $437,376 100.00%
======== ====== ======== ======== ======
</TABLE>
87
<PAGE> 89
The following table sets forth the certificates of deposit classified
by rates as of the dates indicated.
<TABLE>
<CAPTION>
At At At
June 30, December 31, September 30,
--------- -------------------------- ------------------------
1998 1997 1996 1996 1995
--------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
RATE (In Thousands)
3.00% or less ........................ $ 1,211 $ 1,436 $ 1,035 $ 1,600 $ 930
3.01 - 3.99% ......................... 11 11 598 903 5,257
4.00 - 4.99% ......................... 37,827 35,699 51,484 80,831 55,583
5.00 - 5.99% ......................... 269,293 262,029 232,313 193,281 108,608
6.00 - 6.99% ......................... 36,033 39,186 33,568 29,571 70,456
7.00 - 7.99% ......................... 8,807 8,717 8,673 9,817 12,416
--------- ---------- ---------- --------- ---------
Total ............................... $ 353,182 $ 347,078 $ 327,671 $ 316,003 $ 253,250
========= ========== ========== ========= =========
</TABLE>
The following table sets forth the amount and maturities of
certificates of deposit at June 30, 1998.
<TABLE>
<CAPTION>
Amount Due
----------------------------------------------------------------------------------------------------
Less Than After 5
One Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Years Total
--------- --------- --------- --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(In Thousands)
3.00% or less ......... 119 $ 1 $ 1 $ -- $ 134 $ 956 $ 1,211
3.01 - 3.99% .......... -- 11 -- -- -- -- 11
4.00 - 4.99% .......... 37,827 -- -- -- -- -- 37,827
5.00 - 5.99% .......... 199,627 44,053 12,551 5,798 7,264 -- 269,293
6.00 - 6.99% .......... 3,534 14,178 1,859 10,889 5,573 -- 36,033
7.00 - 7.99% .......... 96 8,708 3 -- -- -- 8,807
--------- -------- -------- -------- -------- ----- ---------
Total $ 241,203 $ 66,951 $ 14,414 $ 16,687 $ 12,971 $ 956 $ 353,182
========= ======== ======== ======== ======== ===== =========
</TABLE>
The following table indicates the amount of negotiable certificates of
deposit of $100,000 or more by time remaining until maturity as of June 30,
1998.
<TABLE>
<CAPTION>
Certificates of
Deposit of
$100,000 or
More
----------------
REMAINING MATURITY (In Thousands)
<S> <C>
Three months or less ..................... $11,338
Three through six months ................. 7,418
Six through twelve months ................ 12,264
Over twelve months ....................... 19,079
-------
Total ................................. $50,099
=======
</TABLE>
88
<PAGE> 90
Deposits are used to fund loan originations, the purchase of securities
and for general business purposes. The deposit growth in the six months ended
June 30, 1998 of $23.7 million reflected the use of odd-term and promotional
certificate of deposit products, the opening of three new branch offices, as
well as increased retail deposits generated by aggressive, competitive pricing
of such products in the market area.
The following table sets forth the net changes in the deposit activities
for the periods indicated:
<TABLE>
<CAPTION>
Three
During Six Months Ended Year Ended Months Ended Years Ended
June 30, December 31, December 31, September 30,
------------------------- ----------- ----------- --------------------------
1998 1997 1997 1996 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Deposits ............................ $ 1,458,473 $ 1,328,224 $ 2,433,375 $ 554,294 $ 2,158,898 $ 1,952,009
Withdrawals ......................... 1,445,492 1,311,142 2,416,860 549,264 2,114,903 1,988,577
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) before
interest credited .................. 12,981 17,082 16,515 5,030 43,995 (36,568)
Interest credited ................... 10,694 9,742 20,484 9,750 17,558 13,965
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in deposits.. $ 23,675 $ 26,824 $ 36,999 $ 14,780 $ 61,553 $ (22,603)
=========== =========== =========== =========== =========== ===========
</TABLE>
BORROWINGS. Savings deposits are the primary source of funds for
lending and investment activities and for general business purposes. If the need
arises, advances from the FHLB may be used to supplement the supply of lendable
funds and to meet deposit withdrawal requirements. Advances from the FHLB
typically are collateralized by the Association's stock in the FHLB and a
blanket floating lien on the Association's one- to four-family first mortgage
loans. At June 30, 1998, $75.6 million of FHLB advances were outstanding with a
weighted average interest rate of 5.95%.
The FHLB functions as a central reserve bank providing credit for the
Association and other member savings institutions and financial institutions. As
a member, the Association is required to own capital stock in the FHLB and is
authorized to apply for advances on the security of such stock and certain of
its home mortgages and other assets (principally, securities that are
obligations of, or guaranteed by, the United States) provided certain standards
related to creditworthiness have been met. Advances are made pursuant to several
different programs. Each credit program has its own interest rate and range of
maturities. Depending on the program, limitations on the amount of advances are
based either on a fixed percentage of a member institution's net worth or on the
FHLB's assessment of the institution's creditworthiness. Although advances may
be used on a short-term basis for cash management needs, FHLB advances have not
been, nor are they expected to be, a significant long-term funding source for
the Association, although the Association periodically utilizes its ability to
access advances in order to take advantage of investment opportunities which may
arise.
On September 30, 1983, the Association sold two of its branches to
another financial institution. Under terms of the sale, the Association issued a
10.94%, 30-year term mortgage-backed bond (the "Bond") for approximately $41.6
million. A discount was recorded on the Bond which is being accreted on the
interest method of accounting over the life of the Bond. The Bond bears an
interest rate that is adjustable semi-annually on each April 1 and October 1 to
reflect changes in the average of the United States 10-year and 30-year
long-term bond rates. At June 30, 1998, the outstanding balance of the Bond was
$15.9 million with an effective rate of 9.79%.
On October 24, 1994, in connection with the Association's Plan of
Reorganization into a mutual holding company, the Association established the
ESOP for all eligible employees. The ESOP's purchase of 190,388 shares of
Association Common Stock in the open market was initially funded by a loan held
by an unaffiliated financial
89
<PAGE> 91
institution with an interest rate based on the monthly average of the Federal
Funds high and low rate plus 2.35%. During 1998, the Mid-Tier Holding Company
loaned sufficient funds to the ESOP to permit the ESOP to repay the loan to the
unaffiliated lender. The terms of the loan to the ESOP from the Mid-Tier Holding
Company are substantially identical to those of the loan from the unaffiliated
lender. However, the interest rate used will be the New York prime rate which
was 8.5% at June 30, 1998. The loan is being repaid from the Association's
contributions to the ESOP over a period of up to seven years and had an
outstanding balance of $1.2 million at June 30, 1998. For further information,
see Note 14 to the Notes to the Consolidated Financial Statements.
The following table sets forth the source, balance, and rate of FHLB
advances for the periods indicated.
<TABLE>
<CAPTION>
During the Six Months During the Year During the Three Months During the Years Ended
Ended June 30, Ended December 31, Ended December 31, September 30,
--------------------- ------------------ ----------------------- ----------------------
1998 1997 1997 1996 1996 1995
------- ------- ------------------ ----------------------- ---------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
FHLB advances:
Maximum month-end balance ......... $75,630 $46,052 $57,341 $36,350 $36,350 $18,679
Balance at end of period .......... 75,630 46,052 57,341 34,763 36,350 18,200
Average balance (1) ............... 61,133 38,526 42,952 35,657 22,110 3,846
Weighted average interest rate during
the period ....................... 5.99% 6.27% 6.38% 6.72% 6.36% 10.80%
Weighted average interest rate
at end of period .................. 5.95% 6.47% 6.25% 6.69% 6.70% 6.86%
</TABLE>
- ----------------------
(1) Computed on the basis of month-end balances.
SUBSIDIARY ACTIVITIES
The Association currently has one active subsidiary, ComFed, Inc.,
which was formed in February 1971 for the purpose of owning and operating an
insurance agency, Community Insurance Agency, which sells mortgage life
insurance. ComFed, Inc. also receives income and incurs related expenses from
the sale of third party mutual funds and annuities. Such third party mutual
funds and annuities include products widely marketed to the investing public and
have investment advisors that are not affiliated with ComFed, Inc. For the six
months ended June 30, 1998, ComFed, Inc. reported net income of $67,000. At June
30, 1998, the Association had an equity investment in ComFed, Inc. of $140,000.
LEGAL PROCEEDINGS
The Association is involved in routine legal proceedings occurring in
the ordinary course of business which in the opinion of management, in the
aggregate, will not have a material adverse effect on the consolidated financial
condition and results of operations of the Association.
The Association has completed its investigation of a defalcation by a
former employee which may have occurred over a period of several years. The
Association maintains insurance to cover such losses with a claim deductible of
$200,000. The amount of the deductible was charged-off during the year ended
September 30, 1996. The Association notified its insurance carrier of the
potential claim and the insurance company acknowledged coverage. The insurance
carrier paid a portion of the claim in fiscal 1997. The Association and its
insurance carrier are attempting to resolve the remainder of the Association's
claim. The terms of any resolution of such claim may not amount to the entire
amount of the unpaid portion of the Association's claim in excess of the
deductible. However, even is such event, management does not believe that the
claim will have a material adverse effect on the Association's
90
<PAGE> 92
financial position or results of operations. See Note 13 to the Notes to
Consolidated Financial Statements contained elsewhere herein.
PERSONNEL
As of June 30, 1998, the Mid-Tier Holding Company had no separately
compensated employees. Officers of the Mid-Tier Holding Company are employees of
the Association and receive all compensation from the Association. Because the
Mid-Tier Holding Company's only activity is holding the stock of the
Association, employees of the Association perform limited duties for the
Mid-Tier Holding Company.
As of June 30, 1998, the Association had 256 full-time and 61 part-time
employees. None of such employees is represented by a collective bargaining
group. The Association believes it has a good relationship with its employees.
PROPERTIES
The Mid-Tier Holding Company owns no property independently from the
Association. The Association conducts its business through its home office
located in North Palm Beach, Florida, and 21 full service branch offices and two
loan production offices located in Palm Beach, Martin, St. Lucie, Indian River
and Brevard counties. The following table sets forth certain information
concerning the home office and each branch office of the Association at June 30,
1998. The aggregate net book value of the Association's premises and equipment
was $22.2 million at June 30, 1998. For additional information regarding the
Association's properties, see Note 8 to the Notes to the Consolidated Financial
Statements contained elsewhere herein. In addition, the Association owns or has
placed earnest funds on four parcels of real estate for use as possible future
branch sites. The Association's total investment in such other properties
totalled $2.0 million at June 30, 1998 which is included in the aggregate net
book value of the Association's premises and equipment set forth above.
<TABLE>
<CAPTION>
Opening Owned/
Location Address Date Lease
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Home Office 660 U.S. Highway One, North Palm Beach, Florida 02/19/88 Owned
Branch Offices
- --------------
Riviera Beach 2600 Broadway, Riviera Beach, Florida 08/19/55 Owned
Tequesta 101 N. U.S. Highway One, Tequesta, Florida 07/19/59 Owned
Port Salerno 5545 SE Federal Highway, Port Salerno, Florida 11/05/74 Owned
Palm Beach Gardens 9600 N. Alternate AlA, Palm Beach Gardens, 12/19/74 Owned
Florida
Jensen Beach 1170 NE Jensen Beach Boulevard, 01/28/75 Owned
Jensen Beach, Florida
</TABLE>
91
<PAGE> 93
<TABLE>
<CAPTION>
OPENING OWNED/
LOCATION ADDRESS DATE LEASE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Singer Island 1100 East Blue Heron Boulevard, 04/01/75 Owned
Riviera Beach, Florida
Gallery Square 389 Tequesta Drive, Tequesta, Florida 01/30/76 Lease (1)
Ft. Pierce 1050 Virginia Avenue, Ft. Pierce, Florida 07/23/85 Owned
Port St. Lucie 1540 SE Floresta Drive, Port St. Lucie, Florida 07/30/84 Lease (2)
Martin Downs 3102 Martin Downs Boulevard, 07/24/85 Lease (3)
Palm City, Florida
Chasewood 6350 Indiantown Road., Suite 1, 02/26/86 Lease (4)
Jupiter, Florida
Bluffs 3950 U.S. Highway 1, Jupiter, Florida 09/18/86 Lease (5)
Village Commons 971 Village Boulevard, West Palm Beach, Florida 06/26/89 Lease (6)
Hobe Sound 11400 SE Federal Highway, Hobe Sound, Florida 02/05/90 Owned
Jupiter 520 Toney Penna Drive, Jupiter, Florida 07/10/95 Owned
PGA PGA Shoppes on the Green, 7102 Fairway Drive, 04/22/96 Owned
Palm Beach Gardens, Florida
Vero Beach 6030 20th Street, Vero Beach, Florida 07/21/97 Lease (7)
Hutchinson Island 4417 NE Ocean Boulevard, Jensen Beach, Florida 01/21/97 Lease (8)
Lake Worth 5702 Lake Worth Road, Suite # 3, Lake Worth, 10/20/97 Lease (9)
Florida
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
</TABLE>
92
<PAGE> 94
<TABLE>
<CAPTION>
OPENING OWNED/
LOCATION ADDRESS DATE LEASE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LOAN PRODUCTION OFFICES
Vero Beach 2903 Cardinal Drive 03/01/98 Lease (10)
Vero Beach, Florida
Melbourne 1901 S. Harbor City Blvd. 05/01/98 Lease (11)
Suite 801, Melbourne, Florida
OTHER FACILITIES
Training Center 101 N. U.S. Highway One
Tequesta, Florida 07/15/98 Owned
- -----------------
</TABLE>
(1) This lease expires on December 31, 2000 and provides for a renewal option
which runs through December 31, 2015.
(2) This lease expires on January 31, 2006. The Association is in the process
of constructing a new branch office in Port St. Lucie. Upon completion of
construction (currently expected to be the first quarter of 1999), the
Association will relocate its existing branch office to the new site.
(3) This lease expires on August 8, 1999 and provides for a series of renewal
options which run through August 8, 2004.
(4) This lease expires on January 31, 1999 and provides for a renewal option
which runs through January 31, 2004. The Association completed
construction of a new office in Jupiter. The Association relocated the
branch office into the new building located at 1570 Indiantown Road,
Jupiter, Florida 33458, on October 5, 1998.
(5) This lease expires on October 31, 2001 and provides for a renewal option
which runs through October 31, 2016.
(6) This lease expires on June 25, 2004 and provides for a renewal option
which runs through June 25, 2014.
(7) This lease expires on July 1, 2002 and provides for a renewal option
which runs through July 1, 2017. The Association has exercised an option
to purchase the property as of July 31, 1998.
(8) This lease expires on June 30, 1999 and provides for a renewal option
which runs through December 31, 2002.
(9) This lease expires on March 1, 2000 and provides for a renewal option
which runs through August 1, 2002.
(10) This lease expires on February 28, 1999 and provides for a renewal option
which runs through February 28, 2000.
(11) This lease expires on April 30, 2000.
93
<PAGE> 95
REGULATION
Set forth below is a brief description of certain laws and regulations
which are applicable to the Company and the Association. The description of
these laws and regulations, as well as descriptions of laws and regulations
contained elsewhere herein, does not purport to be complete and is qualified in
its entirety by reference to the applicable laws and regulations.
GENERAL
The Association, as a federally chartered savings institution, is
subject to federal regulation and oversight by the OTS extending to all aspects
of its operations. The Association also is subject to regulation and examination
by the FDIC, which insures the deposits of the Association to the maximum extent
permitted by law, and requirements established by the Federal Reserve Board.
Federally chartered savings institutions are required to file periodic reports
with the OTS and are subject to periodic examinations by the OTS and the FDIC.
The investment and lending authority of savings institutions are prescribed by
federal laws and regulations, and such institutions are prohibited from engaging
in any activities not permitted by such laws and regulations. Such regulation
and supervision primarily is intended for the protection of depositors and not
for the purpose of protecting shareholders.
The OTS' enforcement authority over all savings institutions and their
holding companies includes, among other things, the ability to assess civil
money penalties, to issue cease and desist or removal orders and to initiate
injunctive actions. In general, these enforcement actions may be initiated for
violations of laws and regulations and unsafe or unsound practices. Other
actions or inactions may provide the basis for enforcement action, including
misleading or untimely reports filed with the OTS.
THE COMPANY
HOLDING COMPANY ACQUISITIONS. Upon consummation of the Conversion, the
Company will become a savings and loan holding company within the meaning of the
Home Owners' Loan Act, as amended ("HOLA"), and will be required to register
with the OTS. The HOLA and OTS regulations generally prohibit a savings and loan
holding company, without prior OTS approval, from acquiring, directly or
indirectly, the ownership or control of any other savings institution or savings
and loan holding company, or all, or substantially all, of the assets or more
than 5% of the voting shares thereof. These provisions also prohibit, among
other things, any director or officer of a savings and loan holding company, or
any individual who owns or controls more than 25% of the voting shares of such
holding company, from acquiring control of any savings institution not a
subsidiary of such savings and loan holding company, unless the acquisition is
approved by the OTS.
HOLDING COMPANY ACTIVITIES. The Company will operate as a unitary
savings and loan holding company. Generally, there are limited restrictions on
the activities of a unitary savings and loan holding company and its non-savings
institution subsidiaries. However, if the Director of the OTS determines that
there is reasonable cause to believe that the continuation by a savings and loan
holding company of an activity constitutes a serious risk to the financial
safety, soundness or stability of its subsidiary savings institution, the
Director may impose such restrictions as deemed necessary to address such risk,
including limiting (i) payment of dividends by the savings institution; (ii)
transactions between the savings institution and its affiliates; and (iii) any
activities of the savings institution that might create a serious risk that the
liabilities of the holding company and its affiliates may be imposed on the
savings institution. Notwithstanding the above rules as to permissible business
activities of unitary savings and loan holding companies, if the savings
institution subsidiary of such a holding company fails to meet the QTL test, as
discussed under "-The Association - Qualified Thrift Lender Test," then such
unitary holding company also shall become subject to the activities restrictions
applicable to multiple savings and loan holding companies and, unless the
savings institution requalifies as a QTL within one year thereafter, shall
register as, and become subject to the restrictions applicable to, a bank
holding company. See "-The Association - Qualified Thrift Lender Test."
94
<PAGE> 96
The HOLA requires every savings institution subsidiary of a savings and
loan holding company to give the OTS at least 30 days' advance notice of any
proposed dividends to be made on its guarantee, permanent or other
non-withdrawable stock, or else such dividend will be invalid. See "-The
Association - Capital Distribution Regulation."
AFFILIATE RESTRICTIONS. Transactions between a savings institution and
its "affiliates" are subject to quantitative and qualitative restrictions under
Sections 23A and 23B of the Federal Reserve Act and OTS regulations. Affiliates
of a savings institution include, among other entities, the savings
institution's holding company and companies that are controlled by or under
common control with the savings institution.
In general, Sections 23A and 23B and OTS regulations issued in
connection therewith limit the extent to which a savings institution or its
subsidiaries may engage in certain "covered transactions" with affiliates to an
amount equal to 10% of the institution's capital and surplus, in the case of
covered transactions with any one affiliate, and to an amount equal to 20% of
such capital and surplus, in the case of covered transactions with all
affiliates. In addition, a savings institution and its subsidiaries may engage
in covered transactions and certain other transactions only on terms and under
circumstances that are substantially the same, or at least as favorable to the
savings institution or its subsidiary, as those prevailing at the time for
comparable transactions with nonaffiliated companies. A "covered transaction" is
defined to include a loan or extension of credit to an affiliate; a purchase of
investment securities issued by an affiliate; a purchase of assets from an
affiliate, with certain exceptions; the acceptance of securities issued by an
affiliate as collateral for a loan or extension of credit to any party; or the
issuance of a guarantee, acceptance or letter of credit on behalf of an
affiliate.
In addition, under the OTS regulations, a savings institution may not
make a loan or extension of credit to an affiliate unless the affiliate is
engaged only in activities permissible for bank holding companies; a savings
institution may not purchase or invest in securities of an affiliate other than
shares of a subsidiary; a savings institution and its subsidiaries may not
purchase a low-quality asset from an affiliate; and covered transactions and
certain other transactions between a savings institution or its subsidiaries and
an affiliate must be on terms and conditions that are consistent with safe and
sound banking practices. With certain exceptions, each loan or extension of
credit by a savings institution to an affiliate must be secured by collateral
with a market value ranging from 100% to 130% (depending on the type of
collateral) of the amount of the loan or extension of credit.
The OTS regulation generally excludes all non-bank and non-savings
institution subsidiaries of savings institutions from treatment as affiliates,
except to the extent that the OTS or the Federal Reserve Board decides to treat
such subsidiaries as affiliates. The regulation also requires savings
institutions to make and retain records that reflect affiliate transactions in
reasonable detail, and provides that certain classes of savings institutions may
be required to give the OTS prior notice of affiliate transactions.
THE ASSOCIATION
INSURANCE OF ACCOUNTS. The deposits of the Association are insured to
the maximum extent permitted by the SAIF, which is administered by the FDIC, and
are backed by the full faith and credit of the U.S. Government. As insurer, the
FDIC is authorized to conduct examinations of, and to require reporting by,
FDIC-insured institutions. It also may prohibit any FDIC-insured institution
from engaging in any activity the FDIC determines by regulation or order to pose
a serious threat to the FDIC. The FDIC also has the authority to initiate
enforcement actions against savings institutions, after giving the OTS an
opportunity to take such action.
Under current FDIC regulations, SAIF-insured institutions are assigned
to one of three capital groups which are based solely on the level of an
institution's capital--"well capitalized," "adequately capitalized," and
"undercapitalized"--which are defined in the same manner as the regulations
establishing the prompt corrective action system discussed below. These three
groups are then divided into three subgroups which reflect varying levels of
supervisory concern, from those which are considered to be healthy to those
which are considered to be of substantial supervisory concern. The matrix so
created results in nine assessment risk classifications, with rates ranging
prior to
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September 30, 1996 from 23 basis points for well capitalized, healthy
institutions to 31 basis points for undercapitalized institutions with
substantial supervisory concerns.
The deposits of the Association are currently insured by the SAIF. Both
the SAIF and the BIF are required by law to attain and thereafter maintain a
reserve ratio of 1.25% of insured deposits. The BIF achieved a fully funded
status first, and therefore as discussed below, effective January 1, 1996, the
FDIC substantially reduced the average deposit insurance premium paid by
BIF-insured banks. On November 14, 1995, the FDIC approved a final rule
regarding deposit insurance premiums. The final rule reduced deposit insurance
premiums for BIF member institutions to zero basis points (subject to a $2,000
minimum) for institutions in the lowest risk category, while holding deposit
insurance premiums for SAIF members at their then-current levels (23 basis
points for institutions in the lowest risk category). The reduction was
effective with respect to the semiannual premium assessment beginning January 1,
1996.
On September 30, 1996 Congress passed, and the President signed, the DIF
which mandated that all institutions which have deposits are insured by SAIF
were required to pay a one-time special assessment of 65.7 basis points on
SAIF-insured deposits (subject to adjustment for certain types of banks with
SAIF deposits) that were held at March 31,1995 payable by November 27, 1996 to
recapitalize the SAIF. The assessment increased the SAIF's reserve ratio to a
comparable level to that of the BIF at 1.25% of total insured deposits. The
Association's share of this special assessment totaled $2.8 million and is
reflected in the 1996 operating results. The FDIC, in connection with the
recapitalization, also lowered SAIF premiums from $0.23 per $100 to $0.065 per
$100 of insured deposits beginning in January 1997.
The FDIC may terminate the deposit insurance of any insured depository
institution, including the Association, if it determines after a hearing that
the institution has engaged or is engaging in unsafe or unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, order or any condition imposed by an agreement with
the FDIC. It also may suspend deposit insurance temporarily during the hearing
process for the permanent termination of insurance, if the institution has no
tangible capital. If insurance of accounts is terminated, the accounts at the
institution at the time of the termination, less subsequent withdrawals, shall
continue to be insured for a period of six months to two years, as determined by
the FDIC. Management is aware of no existing circumstances which would result in
termination of the Association's deposit insurance.
REGULATORY CAPITAL REQUIREMENTS. The OTS capital requirements consist of
a "tangible capital requirement," a "leverage capital requirement" and a
"risk-based capital requirement." The OTS is also authorized to impose capital
requirements in excess of those standards on individual institutions on a
case-by-case basis.
Under the tangible capital requirement, a savings association must
maintain tangible capital in an amount equal to at least 1.5% of adjusted total
assets. Tangible capital is defined as core capital less all intangible assets
(including supervisory goodwill), plus a specified amount of purchased mortgage
servicing rights.
Under the leverage capital requirement adopted by the OTS, savings
associations must maintain "core capital" in an amount equal to at least 3% of
adjusted total assets. Core capital is defined as common shareholders' equity
(including retained earnings), non-cumulative perpetual preferred stock, and
minority interests in the equity accounts of consolidated subsidiaries, plus
purchased mortgage servicing rights valued at the lower of 90% of fair market
value, 90% of original cost or the current amortized book value as determined
under GAAP, and "qualifying supervisory goodwill," less non-qualifying
intangible assets. At June 30, 1998, the Association's ratio of core capital to
total adjusted assets was 9.6%.
Under the risk-based capital requirement, a savings association must
maintain total capital (which is defined as core capital plus supplementary
capital) equal to at least 8.0% of risk-weighted assets. A savings association
must calculate its risk-weighted assets by multiplying each asset and
off-balance sheet item by various risk factors, which range from 0% for cash and
securities issued by the United States Government or its agencies to 100% for
repossessed assets or loans more than 90 days past due. Qualifying one- to
four-family residential real estate loans and qualifying multi-family
residential real estate loans (note more than 90 days
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delinquent and having an 80% or lower loan-to-value ratio), which at June 30,
1998, represented 72.4% of the total loans receivable, are weighted at a 50%
risk factor. Supplementary capital may include, among other items, cumulative
perpetual preferred stock, perpetual subordinated debt, mandatory convertible
subordinated debt, intermediate-term preferred stock, and general allowances for
loan losses. The allowance for loan losses includable in supplementary capital
is limited to 1.25% of risk-weighted assets. Supplementary capital is limited to
100% of core capital.
Certain exclusions from capital and assets are required to be made for
the purpose of calculating total capital, in addition to the adjustments
required for calculating core capital. Such exclusions consist of equity
investments (as defined by regulation) and that portion of land loans and
non-residential construction loans in excess of an 80% loan-to-value ratio and
reciprocal holdings of qualifying capital instruments. However, in calculating
regulatory capital, institutions can add back unrealized losses and deduct
unrealized gains net of taxes, on debt securities reported as a separate
component of GAAP capital.
The OTS regulations establish special capitalization requirements for
savings associations that own service corporations and other subsidiaries,
including subsidiary savings associations. According to these regulations,
certain subsidiaries are consolidated for capital purposes and others are
excluded from assets and capital. In determining compliance with the capital
requirements, all subsidiaries engaged solely in activities permissible for
national banks, engaged solely in mortgage-banking activities, or engaged in
certain other activities solely as agent for its customers are "includable"
subsidiaries that are consolidated for capital purposes in proportion to the
association's level of ownership, including the assets of includable
subsidiaries in which the association has a minority interest that is not
consolidated for GAAP purposes. For excludable subsidiaries, the debt and equity
investments in such subsidiaries are deducted from assets and capital. At June
30, 1998, the Association had no investments subject to a deduction from
tangible capital.
The OTS amended its risk-based capital requirements that would require
institutions with an "above normal" level of interest rate risk to maintain
additional capital. A savings association is considered to have a "normal" level
of interest rate risk if the decline in the market value of its portfolio equity
after an immediate 200 basis point increase or decrease in market interest rates
(whichever leads to the greater decline) is less than two percent of the current
estimated market value of its assets. The market value of portfolio equity is
defined as the net present value of expected cash inflows and outflows from an
association's assets, liabilities and off-balance sheet items. The amount of
additional capital that an institution with an above normal interest rate risk
is required to maintain (the "interest rate risk component") equals one-half of
the dollar amount by which its measured interest rate risk exceeds the normal
level of interest rate risk. The interest rate risk component is in addition to
the capital otherwise required to satisfy the risk-based capital requirement.
Implementation of this component has been postponed by the OTS. The final rule
was to be effective as of January 1, 1994, subject however to a three quarter
lag time in implementation. However, in October 1994, the Director of the OTS
indicated that it would waive the capital deductions for institutions with a
greater than "normal" risk until the OTS published an appeals process. On August
21, 1995, the OTS released Thrift Bulletin 67, which established (i) an appeals
process to handle "requests for adjustments" to the interest rate risk component
and (ii) a process by which "well-capitalized" institutions may obtain
authorization to use their own interest rate risk model to determine their
interest rate risk component. The Director of the OTS indicated, concurrent with
the release of Thrift Bulletin 67, that the OTS will continue to delay the
implementation of the capital deduction for interest rate risk pending the
testing of the appeals process set forth in Thrift Bulletin 67.
Effective November 28, 1994, the OTS revised its interim policy issued
in August 1993 under which savings institutions computed their regulatory
capital in accordance with SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." Under the revised OTS policy, savings institutions
must value securities available for sale at amortized cost for regulatory
capital purposes. This means that in computing regulatory capital, savings
institutions should add back any unrealized losses and deduct any unrealized
gains, net of income taxes, on debt securities reported as a separate component
of GAAP capital.
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At June 30, 1998, the Association exceeded all of its regulatory capital
requirements, with tangible, core and risk-based capital ratios of 9.6%, 9.6%
and 17.3%, respectively. See Note 16 to the Notes to Consolidated Financial
Statements included elsewhere herein.
The OTS and the FDIC generally are authorized to take enforcement action
against a savings association that fails to meet its capital requirements, which
action may include restrictions on operations and banking activities, the
imposition of a capital directive, a cease-and-desist order, civil money
penalties or harsher measures such as the appointment of a receiver or
conservator or a forced merger into another institution. In addition, under
current regulatory policy, an association that fails to meet its capital
requirements is prohibited from paying any dividends.
PROMPT CORRECTIVE ACTION. Under the prompt corrective action regulations
of the OTS, an institution is deemed to be (i) "well capitalized" if it has
total risk-based capital of 10.0% or more, has a Tier 1 risk-based capital ratio
of 6.0% or more, has a Tier 1 leverage capital ratio of 5.0% or more and is not
subject to any order or final capital directive to meet and maintain a specific
capital level for any capital measure, (ii) "adequately capitalized" if it has a
total risk-based capital ratio of 8.0% or more, a Tier 1 risk-based capital
ratio of 4.0% or more and a Tier 1 leverage capital ratio of 4.0% or more (3.0%
under certain circumstances) and does not meet the definition of "well
capitalized," (iii) "undercapitalized" if it has a total risk-based capital
ratio that is less than 8.0%, a Tier 1 risk-based capital ratio that is less
than 4.0% or a Tier 1 leverage capital ratio that is less than 4.0% (3.0% under
certain circumstances), (iv) "significantly undercapitalized" if it has a total
risk-based capital ratio that is less than 6.0%, a Tier 1 risk-based capital
ratio that is less than 3.0% or a Tier 1 leverage capital ratio that is less
than 3.0%, and (v) "critically undercapitalized" if it has a ratio of tangible
equity to total assets that is equal to or less than 2.0%. Under specified
circumstances, a federal banking agency may reclassify a well capitalized
institution as adequately capitalized and may require an adequately capitalized
institution or an undercapitalized institution to comply with supervisory
actions as if it were in the next lower category (except that the FDIC may not
reclassify a significantly undercapitalized institution as critically
undercapitalized).
An institution generally must file a written capital restoration plan
which meets specified requirements with its appropriate federal banking agency
within 45 days of the date that the institution receives notice or is deemed to
have notice that it is undercapitalized, significantly undercapitalized or
critically undercapitalized. A federal banking agency must provide the
institution with written notice of approval or disapproval within 60 days after
receiving a capital restoration plan, subject to extensions by the agency. An
institution which is required to submit a capital restoration plan must
concurrently submit a performance guaranty by each company that controls the
institution. In addition, undercapitalized institutions are subject to various
regulatory restrictions, and the appropriate federal banking agency also may
take any number of discretionary supervisory actions.
At June 30, 1998, the Association was in the "well capitalized" category
for purposes of the above regulations and as such is not subject to the above
mentioned restrictions.
SAFETY AND SOUNDNESS GUIDELINES. The OTS and the other federal bank
regulatory agencies have established guidelines for safety and soundness,
addressing operational and managerial standards, as well as compensation matters
for insured financial institutions. Institutions failing to meet these standards
are required to submit compliance plans to their appropriate federal regulators.
The OTS and the other agencies have also established guidelines regarding asset
quality and earnings standards for insured institutions. The Association
believes that it is in compliance with these guidelines and standards.
LIQUIDITY REQUIREMENTS. All savings institutions are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. The liquidity requirement may vary from
time to time (between 4% and 10%) depending upon economic conditions and savings
flows of all savings institutions. At the present time, the required minimum
liquid asset ratio is 4%. For the month ended June 30, 1998, the Association's
liquidity ratio was 8.5%.
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CAPITAL DISTRIBUTIONS. OTS regulations govern capital distributions by
savings institutions, which include cash dividends, stock redemptions or
repurchases, cash-out mergers, interest payments on certain convertible debt and
other transactions charged to the capital account of a savings institution to
make capital distributions. Generally, the regulations create a safe harbor for
specified levels of capital distributions from institutions meeting at least
their minimum capital requirements, so long as such institutions notify the OTS
and receive no objection to the distribution from the OTS. Savings institutions
and distributions that do not qualify for the safe harbor are required to obtain
prior OTS approval before making any capital distributions.
Generally, a savings institution that before and after the proposed
distribution meets or exceeds its fully phased-in capital requirements (Tier 1
institutions) may make capital distributions during any calendar year equal to
the higher of (i) 100% of net income for the calendar year-to-date plus 50% of
its "surplus capital ratio" at the beginning of the calendar year or (ii) 75% of
net income over the most recent four-quarter period. The "surplus capital ratio"
is defined to mean the percentage by which the institution's tangible, core or
risk-based capital ratio exceeds its tangible, core or risk-based capital
requirement. Failure to meet minimum capital requirements will result in further
restrictions on capital distributions, including possible prohibition without
explicit OTS approval. See "-Regulatory Capital Requirements."
In order to make distributions under these safe harbors, Tier 1 and Tier
2 institutions must submit 30 days written notice to the OTS prior to making the
distribution. The OTS may object to the distribution during that 30-day period
based on safety and soundness concerns. In addition, a Tier 1 institution deemed
to be in need of more than normal supervision by the OTS may be downgraded to a
Tier 2 or Tier 3 institution as a result of such a determination. At June 30,
1998, the Association was a Tier 1 institution for purposes of this regulation.
BRANCHING BY FEDERAL SAVINGS INSTITUTIONS. OTS policy permits interstate
branching to the full extent permitted by statute (which is essentially
unlimited). Generally, federal law prohibits federal savings institutions from
establishing, retaining or operating a branch outside the state in which the
federal institution has its home office unless the institution meets the IRS'
domestic building and loan test (generally, 60% of a thrift's assets must be
housing-related) ("IRS Test"). The IRS Test requirement does not apply if: (i)
the branch(es) result(s) from an emergency acquisition of a troubled savings
institution (however, if the troubled savings institution is acquired by a bank
holding company, does not have its home office in the state of the bank holding
company bank subsidiary and does not qualify under the IRS Test, its branching
is limited to the branching laws for state-chartered banks in the state where
the savings institution is located); (ii) the law of the state where the branch
would be located would permit the branch to be established if the federal
savings institution were chartered by the state in which its home office is
located; or (iii) the branch was operated lawfully as a branch under state law
prior to the savings institution's conversion to a federal charter.
Furthermore, the OTS will evaluate a branching applicant's record of
compliance with the Community Reinvestment Act of 1977 ("CRA"). An
unsatisfactory CRA record may be the basis for denial of a branching
application.
COMMUNITY REINVESTMENT ACT AND THE FAIR LENDING LAWS. Savings
institutions have a responsibility under the CRA and related regulations of the
OTS to help meet the credit needs of their communities, including low- and
moderate-income neighborhoods. In addition, the Equal Credit Opportunity Act and
the Fair Housing Act (together, the "Fair Lending Laws") prohibit lenders from
discriminating in their lending practices on the basis of characteristics
specified in those statutes. An institution's failure to comply with the
provisions of CRA could, at a minimum, result in regulatory restrictions on its
activities, and failure to comply with the Fair Lending Laws could result in
enforcement actions by the OTS, as well as other federal regulatory agencies and
the Department of Justice.
QUALIFIED THRIFT LENDER TEST. All savings institutions are required to
meet a QTL test to avoid certain restrictions on their operations. Under Section
2303 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996, a
savings institution can comply with the QTL test by either qualifying as a
domestic building and loan association as defined in Section 7701(a)(19) of the
Code or by meeting the second prong of the QTL test set forth in Section 10(m)
of the HOLA. A savings institution that does not meet the QTL test must either
convert to a bank
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charter or comply with the following restrictions on its operations: (i) the
institution may not engage in any new activity or make any new investment,
directly or indirectly, unless such activity or investment is permissible for a
national bank; (ii) the branching powers of the institution shall be restricted
to those of a national bank; (iii) the institution shall not be eligible to
obtain any new advances from its FHLB, other than special liquidity advances
with the approval of the OTS; and (iv) payment of dividends by the institution
shall be subject to the rules regarding payment of dividends by a national bank.
Upon the expiration of three years from the date the savings institution ceases
to be a QTL, it must cease any activity and not retain any investment not
permissible for a national bank and immediately repay any outstanding FHLB
advances (subject to safety and soundness considerations).
Currently, the portion of the QTL test that is based on Section 10(m) of
the HOLA rather than the Code requires that 65% of an institution's "portfolio
assets" (as defined) consist of certain housing and consumer-related assets on a
monthly average basis in nine out of every 12 months. Assets that qualify
without limit for inclusion as part of the 65% requirement are loans made to
purchase, refinance, construct, improve or repair domestic residential housing
and manufactured housing; home equity loans; mortgage-backed securities (where
the mortgages are secured by domestic residential housing or manufactured
housing); stock issued by the FHLB of Atlanta; and direct or indirect
obligations of the FDIC. In a recent amendment to the QTL, small business loans,
credit card loans, student loans and loans for personal, family and household
purposes were allowed to be included without limitation as qualified
investments. In addition, the following assets, among others, may be included in
meeting the test subject to an overall limit of 20% of the savings institution's
portfolio assets: 50% of residential mortgage loans originated and sold within
90 days of origination; 100% of consumer and educational loans (limited to 10%
of total portfolio assets); and stock issued by the FHLMC or the FNMA. Portfolio
assets consist of total assets minus the sum of (i) goodwill and other
intangible assets, (ii) property used by the savings institution to conduct its
business, and (iii) liquid assets up to 20% of the institution's total assets.
At June 30, 1998, the qualified thrift investments of the Association were
approximately 76.7% of its portfolio assets.
FEDERAL HOME LOAN BANK SYSTEM. The Association is a member of the FHLB
of Atlanta, which is one of 12 regional FHLBs that administers the home
financing credit function of savings institutions. Each FHLB serves as a reserve
or central bank for its members within its assigned region. It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB System. It makes loans to members (I.E., advances) in accordance with
policies and procedures established by the Board of Directors of the FHLB. At
June 30, 1998, the Association had $75.6 million of FHLB advances. See Note 11
to Notes to Consolidated Financial Statements.
As a member, the Association is required to purchase and maintain stock
in the FHLB of Atlanta in an amount equal to at least 1% of its aggregate unpaid
residential mortgage loans, home purchase contracts or similar obligations at
the beginning of each year. At June 30, 1998, the Association had $3.9 million
in FHLB stock, which was in compliance with this requirement.
The FHLBs are required to provide funds for the resolution of troubled
savings institutions and to contribute to affordable housing programs through
direct loans or interest subsidies on advances targeted for community investment
and low- and moderate-income housing projects. These contributions have
adversely affected the level of FHLB dividends paid and could continue to do so
in the future. These contributions also could have an adverse effect on the
value of FHLB stock in the future. The dividend yield on the Association's FHLB
stock was 7.25% for the fiscal years ended December 31, 1997 and 1996 and for
the six months ended June 30, 1998.
FEDERAL RESERVE SYSTEM. Federal Reserve Board regulations require all
depository institutions to maintain non-interest earning reserves against their
transaction accounts (primarily NOW and Super NOW checking accounts) and
non-personal time deposits. At June 30, 1998, the Association was in compliance
with these reserve requirements. The balances maintained to meet the reserve
requirements imposed by the Federal Reserve Board may be used to satisfy
liquidity requirements that may be imposed by the OTS.
Savings associations are authorized to borrow from a Federal Reserve
Bank "discount window," but Federal Reserve Board regulations require savings
associations to exhaust other reasonable alternative sources of funds, including
FHLB advances, before borrowing from a Federal Reserve Bank.
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THRIFT CHARTER. Congress has been considering legislation in various
forms that would require federal thrifts, such as the Association, to convert
their charters to national or state bank charters. Recent legislation required
the Treasury Department to prepare for Congress a comprehensive study on the
development of a common charter for federal savings institutions and commercial
banks; and, in the event that the thrift charter was eliminated by January 1,
1999, would require the merger of the BIF and the SAIF into a single Deposit
Insurance Fund on that date. The current form of legislation adopted by the U.S.
House of Representatives does not provide for the elimination of the federal
thrift charter or OTS, but does provide that unitary savings and loan holding
companies which were established or applied for after March 31, 1998 would not
have the ability to engage in unlimited activities but would be subject to the
activities restrictions applicable to multiple savings and loan holding
companies. Unitary holding companies which were established or applied for
before such date would be grandfathered and could continue to engage in
unlimited activities and could transfer the grandfather rights to acquirors of
the holding company. The Senate version of this legislation is substantially
similar but would provide a grandfathering date of September 3, 1998. The
Association cannot determine whether, such legislation may eventually be
enacted, and if enacted, the final form thereof. As a consequence, there can be
no assurance that any legislation that is enacted would not adversely affect the
Association and its parent holding company.
TAXATION
FEDERAL TAXATION
For federal income tax purposes, the Mid-Tier Holding Company files a
consolidated federal income tax return with the Association on a fiscal year
basis. Since the MHC owns less than 80% of the outstanding Common Stock of the
Mid-Tier Holding Company, the MHC is not permitted to file a consolidated
federal income tax return with the Mid-Tier Holding Company. Because the MHC has
nominal assets other than the stock of the Mid-Tier Holding Company, it has no
material federal income tax liability.
On May 13, 1997, permission was received from the IRS to change the
accounting period, for federal income tax purposes, from September 30 to
December 31, effective December 31, 1996.
The Mid-Tier Holding Company, the MHC and the Association are subject to
the rules of federal income taxation generally applicable to corporations under
the Code. Most corporations are not permitted to make deductible additions to
bad debt reserves under the Code. However, prior to the effective date of
legislation passed in 1996, savings and loan associations and savings
associations such as the Association, which met certain tests prescribed by the
Internal Revenue Service may have benefitted from favorable provisions provided
for in Section 593 of the Code regarding deductions for taxable income for
annual additions to the bad debt reserve.
During 1996, effective for years beginning after December 31, 1995,
legislation was passed that repealed Section 593 of the Code. Section 593
allowed thrift institutions, including the Association, to use the
percentage-of-taxable income bad debt accounting method, if more favorable than
the specific charge-off method, for federal income tax purposes. The excess
reserves (deduction based on the percentage-of-taxable income less the deduction
based on the specific charge-off method) accumulated post-1987 are required to
be recaptured ratably over a six year period beginning in 1996. The excess
reserve as of December 31, 1996 was approximately $685,000. The same legislation
forgave the tax liability on pre-1987 accumulated bad debt reserves which would
have penalized any thrift choosing to adopt a bank charter because the tax would
have become due and payable. The unrecorded potential liability that was
forgiven approximated $4.4 million. See Note 12 to the Notes to Consolidated
Financial Statements set forth elsewhere herein.
Deferred income taxes arise from the recognition of certain items of
income and expense for tax purposes in years different from those in which they
are recognized in the financial statements. In February 1992, the FASB issued
SFAS 109, "Accounting for Income Taxes " ("SFAS 109"). SFAS 109 was implemented
by the Company retroactively, effective October 1, 1993. The liability method
accounts for deferred income taxes by applying the
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enacted statutory rates in effect at the balance sheet date to differences
between the book cost and the tax cost of assets and liabilities. The resulting
deferred tax liabilities and assets are adjusted to reflect changes in tax laws.
The Mid-Tier Holding Company is subject to the corporate alternative
minimum tax which is imposed to the extent it exceeds the Mid-Tier Holding
Company's regular income tax for the year. The alternative minimum tax will be
imposed at the rate of 20% of a specially computed tax base. Included in this
base will be a number of preference items, including the interest on certain
tax-exempt bonds issued after August 7, 1986. In addition. for purposes of the
alternative minimum tax, the amount of alternative minimum taxable income that
may be offset by net operating losses is limited to 90% of alternative minimum
taxable income.
The Association was audited by IRS for the tax year 1990 during fiscal
year 1994. Based upon the audit, the Association received a "no-change" letter
from the IRS. The Mid-Tier Holding Company has not been audited by the IRS. See
Notes 1 and 12 to the Notes to Consolidated Financial Statements set forth
elsewhere herein.
STATE TAXATION
Under the laws of the State of Florida, the Mid-Tier Holding Company and
its subsidiary are generally subject to 5.5% tax on net income. The tax may be
reduced by a credit of up to 65% of the tax due as a result of certain
intangible taxes. The tax is deductible by the Mid-Tier Holding Company in
determining its federal income tax liability. The Mid-Tier Holding Company has
not been audited by the State of Florida.
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MANAGEMENT
MANAGEMENT OF THE COMPANY
The Board of Directors of the Company is divided into three classes,
each of which contains approximately one-third of the Board. The directors shall
be elected by the shareholders of the Company for staggered three year terms, or
until their successors are elected and qualified. The following table sets forth
certain information regarding the directors of the Company, all of whom are also
directors of the Association.
<TABLE>
<CAPTION>
Position with the Association and Principal Year
Occupation During the Director Term
Name Age (1) Past Five Years Since (2) Expires
- ---- ------- ------------------------- -------- -------
<S> <C> <C> <C> <C>
Forest C. Beaty, Jr. 69 Director; Retired; Consultant; majority 1977 2001
shareholder of FMS, Inc., a holding company
(based in Lake Park, Florida) which owns retail
clothing stores.
Frederick A. Teed 70 Chairman; Retired; previously President and 1964 2001
Chief Executive Officer of the
Association from 1983 to 1993.
James B. Pittard, Jr. 52 Director, President and Chief Executive Officer; 1993 1999
President and Chief Executive Officer of the
Association since 1993; from 1982 to 1993
served as Senior Vice President and Treasurer of
the Association.
Robert F. Cromwell 79 Director; Chairman Emeritus of the Association; 1955 1999
Retired; served as Chairman of the Board of the
Association from 1983 to 1993.
Karl D. Griffin 69 Director; Secretary Emeritus of the Association; 1955 2000
President of Kirklington Park, Inc.,
a commercial real estate leasing
company located in Riviera Beach,
Florida; President of Smith &
Yetter, Inc. from 1961 until 1994.
Harold I. Stevenson, CPA 62 Director; from 1987 through 1993, served as 1987 2000
President of Harold I. Stevenson,
CPA, PA; since 1994, self-employed,
Palm Beach Gardens, Florida and
Rising Fawn, Georgia.
</TABLE>
- ---------------------------
(1) Age as of June 30, 1998
(2) Includes period served as director of the Association.
Directors of the Company initially will not be compensated by the
Company but will continue to serve as directors of and be compensated by the
Association. It is not anticipated that separate compensation will be paid to
directors of the Company until such time as such persons devote significant time
to the separate management of the Company's affairs, which is not expected to
occur until the Company becomes actively engaged in additional businesses other
than holding the stock of the Association. The Company may determine that such
compensation is appropriate in the future.
103
<PAGE> 105
The executive officers of the Company are elected annually and hold
office until their respective successors have been elected and qualified or
until death, resignation or removal by the Board of Directors.
MANAGEMENT OF THE MID-TIER HOLDING COMPANY AND THE ASSOCIATION
The directors and executive officers of the Mid-Tier Holding Company and
the Association are the same as the directors and executive officers of the
Company. Information concerning the names, ages, principal occupations during
the past five years and term of office of the directors and executive officers
of the Mid-Tier Holding Company and the Association is set forth under
"Management of the Company " and "Executive Officers who are not Directors."
BENEFICIAL OWNERSHIP OF THE MID-TIER HOLDING COMPANY COMMON STOCK
The following tables sets forth information as to the Mid-Tier Holding
Company Common Stock beneficially owned as of September 30, 1998 by (i) the only
persons or entities known to the Association to be the beneficial owners of more
than 5% of the Mid-Tier Holding Company's Common Stock, (ii) each director of
the Mid-Tier Holding Company and the Association, and (iii) all directors and
executive officers of the Mid-Tier Holding Company and the Association as a
group.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Name of Beneficial Owner or Ownership as of Percent of
Number of Persons in Group September 30, 1998 (1)(2)(3)(4) Common Stock
-------------------------- ------------------------------- ------------
<S> <C> <C>
ComFed, M. H. C.
660 U.S. Highway One
North Palm Beach, Florida 33408 2,620,144 51.34%
Community Savings, F. A.
Employee Stock Ownership Plan
660 U.S. Highway One
North Palm Beach, Florida 33408 179,569(5) 3.52
Directors:
Frederick A. Teed 18,860 *
James B. Pittard, Jr. 17,335(6) *
Forest C. Beaty, Jr. 19,085(7) *
Robert F. Cromwell 20,860 *
Karl D. Griffin 18,760(8) *
Harold I. Stevenson, CPA 18,060(9) *
Executive officers:
Larry J. Baker, CPA 14,191(10) *
Cecil F. Howard, Jr. 5,996(11) *
Feriel G. Hughes -- *
Mary L. Kaminske 12,218(12) *
Michael E. Reinhardt 12,615(13) *
All directors and
executive officers as a
group (11 persons) 157,980(14) *
</TABLE>
- -----------------
* Represents less than 1% of the outstanding Common Stock.
- ------------------
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals and entities. Under regulations
promulgated pursuant to the Exchange Act, shares of Common Stock are deemed
to be beneficially owned by a person if he or she directly or indirectly
has or shares (i) voting power, which includes the power to vote or to
direct the voting of the shares, or (ii) investment power, which includes
the power to dispose or to direct the disposition of the shares. Unless
otherwise indicated, the named beneficial owner has sole voting and
dispositive power with respect to the shares.
104
<PAGE> 106
- --------------------
(2) Under applicable regulations, a person is deemed to have beneficial
ownership of any shares of Common Stock which may be acquired within 60
days of July 31, 1998 pursuant to the exercise of outstanding stock
options. Shares of Common Stock which are subject to stock options are
deemed to be outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by such person or group but not deemed
outstanding for the purpose of computing the percentage of Common Stock
owned by any other person or group.
(3) Includes amounts totaling 4,750, 4,440, 4,750, 4,750, 4,750, 4,750, 4,100,
1,000, 5,750 and 5,700 shares awarded pursuant to the 1995 Recognition Plan
granted to Messrs. Teed, Pittard, Beaty, Cromwell, Griffin, Stevenson,
Baker, Howard and Reinhardt and Ms. Kaminske, respectively. Such shares may
be voted by such persons although not all of such shares have vested and
been distributed. The awards vest at the rate of 20% per year from the date
of grant (January 1995 except with respect to Mr. Howard whose grant was
made in January 1997).
(4) Includes shares totaling 7,110, 11,360, 7,110, 7,110, 7,110, 7,110, 6,000,
1,500, 4,620 and 4,560 which may be acquired upon the exercise of options
exercisable within 60 days of July 31, 1998 granted to Messrs. Teed,
Pittard, Beaty, Cromwell, Griffin, Stevenson, Baker, Howard, Reinhardt and
Ms. Kaminske, respectively, pursuant to the 1995 Stock Option Plan.
(5) Does not include 8,259 shares allocated to or deemed beneficially owned by
the executive officers listed below, which shares are reflected in such
individuals' beneficial ownership.
(6) Includes 668 shares allocated to Mr. Pittard's wife, a former employee of
the Association, pursuant to the Association's ESOP, 56 shares owned by
Mr. Pittard's children and 792 shares allocated to Mr. Pittard pursuant to
the ESOP.
(7) Includes 4,560 shares owned jointly with Mr. Beaty's wife.
(8) Includes 3,500 shares owned jointly with Mr. Griffin's wife and 1,700
shares owned by Mr. Griffin's wife.
(9) Includes 2,500 shares owned by Mr. Stevenson's wife.
(10) Includes 1,678 shares allocated to Mr. Baker pursuant to the ESOP.
(11) Includes 2,354 shares allocated to Mr. Howard pursuant to the ESOP and 96
shares owned by Mr. Howard's wife through her IRA.
(12) Includes 3,810 shares owned jointly with Ms. Kaminske's husband (of which
3,140 of such shares are included in the shares granted to Ms. Kaminske
pursuant to the RRP as noted above) and 1,288 shares allocated to her
pursuant to the ESOP.
(13) Includes 4,216 shares owned jointly with Mr. Reinhardt's wife (of which
3,450 of such shares are included in the shares granted to Mr. Reinhardt
pursuant to the RRP as noted above) and 1,479 shares allocated to Mr.
Reinhardt pursuant to the ESOP.
(14) Includes 19,760 shares held by the 1995 Recognition Plan, which may be
voted by directors and executive officers pending vesting and
distribution, 8,259 shares allocated to executive officers pursuant to the
ESOP and 63,590 shares which may be acquired by directors and executive
officers upon the exercise of stock options exercisable within 60 days of
the Voting Record Date.
105
<PAGE> 107
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARDS OF THE MID-TIER HOLDING
COMPANY AND ASSOCIATION
The business of the Mid-Tier Holding Company's Board of Directors is
conducted through meetings and activities of the Board and its committees.
Regular meetings of the Board of Directors of the Mid-Tier Holding Company are
held on a monthly basis and special meetings of the Board of Directors of the
Mid-Tier Holding Company are held from time-to-time as needed. There were only
six meetings of the Board of Directors of the Mid-Tier Holding Company held
during fiscal 1997 since the Mid-Tier Holding Company was not organized until
August 1997. No director attended fewer than 75% of the total number of meetings
of the Board of Directors of the Mid-Tier Holding Company held during fiscal
1997 and the total number of meetings held by all committees of the Board on
which the director served during such year.
The Board of Directors of the Mid-Tier Holding Company has established
various committees, including Nominating, Stock Benefits and Audit Committees.
The Audit Committee reviews the records and affairs of the Mid-Tier
Holding Company to determine its financial condition, reviews with management
and the independent auditors the systems of internal control, and monitors the
Mid-Tier Holding Company's adherence in accounting and financial reporting to
generally accepted accounting principles. Currently, all directors except
President Pittard serve as members of this Committee. The Audit Committee met
one time during fiscal 1997.
The Stock Benefits Committee consists of the non-employee directors of
the Mid-Tier Holding Company and is chaired by Mr. Stevenson. The Stock Benefits
Committee has exclusive responsibility and authority to control and manage the
operation and administration of the Association's Employee Stock Ownership Plan
("ESOP"), including the interpretation and application of its provisions, except
to the extent such responsibility and authority are otherwise specifically
allocated. In addition, the Committee has exclusive responsibility regarding
decisions concerning the payment of benefits under the ESOP. The Stock Benefits
Committee also has exclusive responsibility for determining the award of options
to employees under the 1995 Option Plan and restricted stock awards to employees
under the 1995 Recognition Plan, and are responsible for administration of such
plans. The Stock Benefits Committee met 15 times during fiscal 1997.
In accordance with the Mid-Tier Holding Company's Bylaws, the Board of
Directors acts as the Nominating Committee. The Board did not meet in such
capacity in fiscal 1997 but met subsequent to December 31, 1997 to nominate the
persons elected as directors at the annual meeting of shareholders held in April
1998.
The Board of Directors of the Association met 15 times during fiscal
1997. In addition, the Board of Directors of the Association has established
various committees including a Compensation Committee. The Compensation
Committee of the Association meets monthly to review the performance of
employees (other than officers) and determines compensation programs and
adjustments. The entire Board of Directors ratifies the recommendations of the
Compensation Committee with respect to officers other than Mr. Pittard (who is a
member of the Committee) and whose compensation is established by the Board. The
Compensation Committee during fiscal 1997 was comprised of Larry J. Baker,
Elizabeth A. DeLosh, Cecil F. Howard, Jr., Feriel G. Hughes, Mary L. Kaminske,
James B. Pittard, Jr., Michael E. Reinhardt and Jane H. Ryder. The Compensation
Committee met 15 times during fiscal 1997.
106
<PAGE> 108
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth certain information with respect to the
executive officers of the Mid-Tier Holding Company and the Association who are
not directors.
<TABLE>
<CAPTION>
Name Age (1) Positions(s)
<S> <C> <C>
Larry J. Baker, CPA 58 Senior Vice President, Chief Financial Officer, Treasurer and Director of the
Association's Finance Division
Cecil F. Howard, Jr. 60 Senior Vice President and Director of the Association's Lending Division
Feriel G. Hughes 49 Senior Vice President and Director of the Association's Human Resources,
Marketing and Training Division
Mary L. Kaminske 60 Senior Vice President and Director of the Association's Operations Division
Michael E. Reinhardt 52 Senior Vice President and Director of the Association's Properties and Insurance
Division
</TABLE>
- --------------
(1) As of June 30, 1998.
Set forth below is a brief description of the background for at least
the last five years of each executive officer of the Mid-Tier Holding Company
and the Association who is not a director of the Mid-Tier Holding Company.
LARRY J. BAKER, CPA is Senior Vice President, Chief Financial Officer
and Treasurer of the Mid-Tier Holding Company and the Association and Director
of the Finance Division of the Association. Mr. Baker has been employed by the
Association since 1982 and has served as Senior Vice President since 1995, and
Treasurer of the Association since 1993. Mr. Baker has served in various other
positions with the Association including Controller from 1982 until 1996 and
Vice President from 1987 to 1994.
CECIL F. HOWARD, JR. is Senior Vice President of the Mid-Tier Holding
Company and the Association and has been Director of the Lending Division and
Chief Lending Officer of the Association since 1987 (except for the period from
October 1994 until January 1995 during which time he served as President of
First Federal Savings and Loan Association of Florida, Lakeland, Florida).
FERIEL G. HUGHES is Senior Vice President of the Mid-Tier Holding
Company and the Association and Director of the Human Resources, Marketing and
Training Division of the Association. Ms. Hughes joined the Association in March
1997. She previously served as a sales consultant with the national firm of
Schneider Sales Management, from February 1995 to March 1997, Human Resources
Director of Brooklyn Bow International, Riviera Beach, Florida, from October
1994 to September 1996 and as Director of Sales and Marketing of Flagler
National Bank, West Palm Beach, Florida from August 1986 until March 1994.
MARY L. KAMINSKE is Senior Vice President of the Mid-Tier Holding
Company and the Association and Director of the Operations Division of the
Association which includes oversight of the Association's branch office network.
Ms. Kaminske has been employed by the Association since 1969 in various
positions including serving as Vice President from 1987 until 1996.
MICHAEL E. REINHARDT is Senior Vice President of the Mid-Tier Holding
Company and the Association and Director of the Properties and Insurance
Division of the Association. Mr. Reinhardt was first employed by the Association
in 1973 serving in various positions, including as Vice President from 1987 to
1996 and as Senior Vice President since January 1997.
107
<PAGE> 109
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information
concerning the compensation awarded to or paid by the Association for services
rendered in all capacities during the past three years to the Chief Executive
Officer and the two other officers of the Association and its subsidiaries whose
compensation (salary and bonus) during the fiscal year ended December 31, 1997
exceeded $100,000. The Association changed its fiscal year from September 30 to
December 31 subsequent to September 30, 1996. Accordingly, amounts for fiscal
1996 and 1995 have been restated to be consistent with fiscal 1997. Said
officers, who also serve as executive officers of the Mid-Tier Holding Company,
do not receive separate compensation from the Company.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------------- --------------------------------------------
Other Awards
Name and Fiscal Annual ------------------------- All Other
Principal Position Year Salary Bonus Compensation(1) Stock Grants(2) Options Compensation(3)
------------------ ------ ------ ----- --------------- --------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
James B. Pittard, Jr. 1997 $205,754 $ -- $10,500 $ -- -- $28,020
President and Chief 1996 194,334 -- 10,500 -- -- 21,360
Executive Officer 1995 150,520 -- 9,450 82,325 35,600 15,793
Larry J. Baker 1997 $100,596 $ -- $ -- $ -- -- $17,149
Senior Vice President, 1996 94,860 -- -- -- -- 12,988
Chief Financial Officer and Treasurer 1995 87,731 -- -- 45,613 10,000 9,515
and Director of the Finance Division
Cecil F. Howard, Jr. 1997 $144,131 $ -- $ -- $19,016 7,500 $24,752
Senior Vice President and Chief 1996 133,579 -- -- -- -- 18,748
Lending Officer and 1995 125,291 -- -- -- 12,572
Director of the Lending
Division
</TABLE>
- ----------------
(1) Includes director fees paid for attendance at Board meetings of the
Mid-Tier Holding Company and its subsidiaries. Does not include amounts
attributable to miscellaneous benefits received by executive officers. In
the opinion of management of the Association, the costs to the Association
of providing such benefits to any individual executive officer during the
year ended December 31, 1997 did not exceed the lesser of $50,000 or 10% of
the total of annual salary and bonus reported for the individual.
(2) Represents the grant of 7,400, 4,100, and 1,000 shares of restricted Common
Stock to Messrs. Pittard, Baker and Howard, respectively, pursuant to the
RRP. The awards vest 20% a year from the date of grant.
(3) Includes amounts allocated during the years ended December 31, 1997, 1996
and 1995 on behalf of Messrs. Pittard, Baker and Howard pursuant to the
ESOP.
108
<PAGE> 110
DIRECTOR COMPENSATION
BOARD FEES. During the year ended December 31, 1997, each member of the
Board of Directors of the Company and its subsidiaries received a monthly
meeting fee of $1,750, except Mr. Pittard who received $875 per monthly meeting.
STOCK OPTIONS. Pursuant to the Option Plan each non-employee director of
the Association was granted in January 1995 compensatory stock options to
purchase 11,850 shares of Common Stock. Each new non-employee director will
receive an option to purchase 200 shares of Common Stock upon election to the
Board, to the extent shares are available in the Option Plan. Options granted to
non-employee directors vest at the rate of 20% per year from the date of grant.
RESTRICTED STOCK AWARDS. Pursuant to the RRP, each non-employee director
of the Association was granted 4,750 shares of restricted stock. Each new
non-employee director will receive an award of 100 shares of Common Stock upon
election to the Board, to the extent shares are available in the RRP. The
restricted stock granted pursuant to the RRP vests at the rate of 20% per year
from the date of grant.
EXISTING STOCK OPTIONS
In addition to options covering 59,250 shares granted to non-employee
directors as described above, stock options covering 178,200 shares of
Association Common Stock have been granted to officers and employees of the
Association at exercise prices ranging from $11.125 per share to $19.016 per
share pursuant to the 1995 Stock Option Plan. A total of 237,986 shares were
originally reserved for issuance pursuant to the 1995 Stock Option Plan.
The following table sets forth certain information concerning exercises
of stock options granted pursuant to the 1995 Stock Option Plan by the named
executive officers during the fiscal year ended December 31, 1997 and options
held at December 31, 1997.
<TABLE>
<CAPTION>
Number of Unexercised Options at Value of Unexercised In the Money
Year End Options at Fiscal Year End(1)
---------------------------------- ---------------------------------
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ----------- ---------- ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James B. Pittard, Jr. 4,800 $96,000 9,440 21,360 $228,920 $517,980
Cecil F. Howard, Jr. -- $ -- -- 7,500 $ -- $122,693
Larry J. Baker -- $ -- 4,000 6,000 $ 97,000 $145,500
</TABLE>
(1) Based on a per share market price of $35.375 at December 31, 1997.
The following table discloses the total options granted to the one
executive officer receiving options during the year ended December 31, 1997.
<TABLE>
<CAPTION>
Number of % of Total
Options Options Granted to Exercise Expiration Fair Value of
Name Granted Employees (1) Price (2) Date Option (s)
- ----------------------- -------------- -------------------- ------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Cecil F. Howard 7,500 100% $19.016 1/18/2007 $39,375
</TABLE>
- ---------------
(1) Percentage of options granted to all employees and directors during fiscal
1997.
(2) The exercise price was based on the closing market price of a share of the
Association's common stock on the date of grant, which grant occurred prior
to consummation of the Reorganization.
109
<PAGE> 111
- -----------------
(3) The fair value of the options granted was estimated using the Binary Option
Pricing Model. Under such analysis, the interest rate was assumed to be
6.37%, the expected life of the options to be five years, the expected
volatility to be 15.36% and the dividend yield to be $2.67 per share.
DEFINED BENEFIT PLAN
The Association maintains a noncontributory defined benefit plan
("Retirement Plan"). All employees age 21 or older who have worked at the
Association for a period of one year and been credited with 1,000 or more hours
of employment with the Association during the year are eligible to accrue
benefits under the Retirement Plan. The Association annually contributes an
amount to the Retirement Plan necessary to satisfy the actuarially determined
minimum funding requirements in accordance with the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
At the normal retirement age of 65 (or completion of 30 years of service
with the Association, if earlier), the plan is designed to provide a life
annuity. The retirement benefit provided is an amount equal to 1.75% of a
participant's average monthly compensation based on the average of the three
consecutive years during the last 10 calendar years of employment which provides
the highest monthly average compensation multiplied by the participant's years
of credited service (not to exceed 35 years) to the normal retirement date.
Retirement benefits are also payable upon retirement due to early and late
retirement. A reduced benefit is payable upon early retirement at or after age
55 and the completion of fifteen years of service with the Association. Benefits
are also paid from the Retirement Plan upon a Participant's disability or death.
Upon termination of employment other than as specified above, a participant who
was employed by the Association for a minimum of two years is eligible to
receive his or her accrued benefit reduced for early retirement or a deferred
retirement benefit commencing on such participant's normal retirement date.
Benefits are payable in various annuity forms as well as in the form of a single
lump sum payment.
The following table sets forth estimated annual benefits payable upon
retirement at age 65 to the named executive officers under the Association's
Retirement Plan based upon various levels of compensation and years of service.
<TABLE>
<CAPTION>
Final Average
Compensation Years of Benefit Service at Retirement
- ------------------------- ----------------------------------------------------------------------------------
15 20 25 30 35
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 6,563 $ 8,750 $10,938 $13,125 $15,313
50,000 13,125 17,500 21,875 26,250 30,625
75,000 19,688 26,250 32,813 39,375 45,938
100,000 26,250 35,000 43,750 52,500 61,250
125,000 32,813 43,750 54,688 65,625 76,563
150,000 39,375 52,500 65,625 78,750 91,875
and above
</TABLE>
The maximum annual compensation which may be taken into account under
the Internal Revenue Code (as adjusted from time to time by the IRS for
calculating contributions under qualified defined benefit plans after December
31, 1997 is $160,000 and the maximum annual benefit permitted under such plans
is $130,000.
At December 31, 1997, Messrs. Pittard, Howard and Baker had 16, 10 and
15 years of credited service, respectively, under the Retirement Plan.
110
<PAGE> 112
EMPLOYEE STOCK OWNERSHIP PLAN
The Association has established an ESOP for employees age 21 or older
who have at least one year of credited service with the Association. The ESOP is
funded by the Association's contributions made in cash. Benefits may be paid
either in shares of Common Stock or, to the extent permitted, in cash.
In October 1994, the ESOP borrowed $2.8 million from an unaffiliated
lender to purchase 190,388 shares of Association Common Stock in the open market
(which was deemed exchanged for Mid-Tier Holding Company Common Stock as a
result of the Mid-Tier Reorganization). The Association makes scheduled
discretionary cash contributions to the ESOP sufficient to amortize the
principal and interest on the loan, which has a maturity of seven years.
Subsequent to December 31, 1997, the Mid-Tier Holding Company loaned sufficient
funds to the ESOP to permit the ESOP to repay the loan to the unaffiliated
lender. The terms of the loan to ESOP from the Mid-Tier Holding Company are
substantially identical to those of the loan from the unaffiliated lender. The
Association may, in any plan year, make additional discretionary contributions
for the benefit of plan participants in either cash or shares of Mid-Tier
Holding Company Common Stock, which may be acquired through the purchase of
outstanding shares in the market or from individual shareholders, upon the
original issuance of additional shares by the Mid-Tier Holding Company or upon
the sale of treasury shares by the Mid-Tier Holding Company. Such purchases, if
made, would be funded through additional borrowings by the ESOP or additional
contributions from the Association. The timing, amount and manner of future
contributions to the ESOP will be affected by various factors, including
prevailing regulatory policies, the requirements of applicable laws and
regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan are held in a
loan suspense account and released on a pro rata basis as debt service payments
are made. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Association might otherwise have
contributed to the ESOP. Benefits generally vest at the rate of 20% per year
beginning in the second year of participation until the participant becomes 100%
vested after six years of credited service. Benefits may be payable upon
retirement, early retirement, disability or separation from service. The
Association's contributions to the ESOP are not fixed, so benefits payable under
the ESOP cannot be estimated.
The Stock Benefits Committee of the Board administers the ESOP and an
unaffiliated financial institution has been appointed to act as trustee of the
related trust. The Stock Benefits Committee may instruct the trustee regarding
investment of funds contributed to the ESOP. Under the ESOP, the trustee must
vote all allocated shares held in the ESOP in accordance with the instructions
of the participating employees, and allocated shares for which employees do not
give instructions will be voted in the same ratio on any matter as to those
shares for which instructions are given. Unallocated shares held in the ESOP
will be voted by the ESOP trustee after considering the recommendation of the
Stock Benefits Committee.
The ESOP is subject to the requirements of ERISA and the regulations of
the IRS and the Department of Labor thereunder.
As part of the Conversion, the ESOP plans to borrow funds from the
Company and use the funds to purchase up to 8% of the Conversion Stock sold in
the Offerings. Collateral from the loan will be the Common Stock purchased by
the ESOP with the loan proceeds. The loan will be repaid principally from the
Association's contributions to the ESOP over a period of at least 15 years. The
interest rate will be at the prime rate. Shares purchased by the ESOP will be
held in a loan expense account and released on a pro rata basis as debt service
payments are made.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Association maintains a non-qualified supplemental executive
retirement plan ("SERP") for certain executives of the Association (including
Messrs. Pittard, Baker and Howard) to compensate those executives participating
in the Association's Retirement Plan whose benefits are limited by Section 415
or Section 401(a)(17) of the Internal Revenue Code. As of December 31, 1997,
there were four executive officers participating in the SERP.
111
<PAGE> 113
The SERP provides the designated executives with retirement benefits generally
equal to the difference between (i) seventy-five percent (75%) of the
executive's compensation and (ii) the sum of the executive's retirement benefit
under the Association's Retirement Plan and the executive's social security
benefits. Benefits under the SERP vest on normal retirement age (age 65). If an
executive remains employed with the Association after normal retirement age, the
executive will receive retirement benefits, actuarially adjusted to reflect the
executive's later retirement. Retirement benefits will be payable to the
executive in the form of a quarterly benefit for fifteen consecutive years.
Death benefits are payable to an executive's beneficiary only if the executive
survives to retirement from the Association. Benefits will be paid to the
beneficiary until the executive and the beneficiary have received a total of
sixty quarterly payments.
The SERP is considered an unfunded plan for tax and ERISA purposes. All
obligations arising under the SERP are payable from the general assets of the
Association. However, the Association has chosen to purchase life insurance
contracts to ensure that sufficient assets will be available to pay the benefits
under the SERP.
The benefits paid under the SERP supplement the benefits paid by the
Retirement Plan. The following table indicates the expected aggregate annual
retirement benefit payable from the SERP to SERP participants, expressed in the
form of a single-life annuity for the final average salary and years of service
specified below.
<TABLE>
<CAPTION>
Final Average
Compensation Years of Service and Benefit Payable at Retirement
- ---------------------- --------------------------------------------------------------------------
15 20 25 30 35
--- --- --- --- ---
<S> <C> <C> <C> <C> <C>
$100,000 $ 32,838 $ 24,088 $ 15,338 $ 6,588 $ --
125,000 45,026 34,088 23,151 12,213 1,276
150,000 57,213 44,088 30,963 17,838 4,713
175,000 75,963 62,838 49,713 36,588 23,463
200,000 94,713 81,588 68,463 55,338 42,213
225,000 113,463 100,338 87,213 74,088 60,963
250,000 132,213 119,088 105,963 92,838 79,713
275,000 150,963 137,838 124,713 111,588 98,463
300,000 169,713 156,588 143,463 130,338 117,213
</TABLE>
Messrs. Pittard, Howard and Baker have 16, 10 and 15 years,
respectively, of credited service under the SERP. The Association's pension cost
attributable to the SERP was $54,000 for the year ended December 31, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Executive compensation philosophy, policies, levels and programs are the
responsibility of the full Board of Directors. Mr. Pittard, who serves as
President and Chief Executive Officer as well as a director of the Mid-Tier
Holding Company and the Association, does not participate in the Board's
determination of his compensation.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS
In connection with the Conversion, the Company and the Association
(the "Employers") intend to enter into a one-year employment agreement with
James B. Pittard, Jr., President and Chief Executive Officer of the Company and
the Association pursuant to which the Employers will agree to employ Mr. Pittard
for a term of one year in his current positions. The agreement with Mr. Pittard
initially will be at his current salary level. Mr. Pittard's compensation and
expenses shall be paid by the Company and the Association in the same proportion
as the time and services actually expended by him on behalf of each respective
Employer. The employment agreement will be reviewed annually by the Boards of
Directors of the Employers. The term of the employment agreement shall be
extended daily for a successive additional one- day period unless the Company
and the Association provide notice not less than 60 days prior to such date, not
to extend the employment term.
The employment agreement shall be terminable with or without cause by the
Employers. Mr. Pittard shall have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the Employers for cause, disability, retirement or death.
In the event that (i) Mr. Pittard terminates his employment because of the
Employers' failure to comply with any material provision of the employment
agreement or the Employers change Mr. Pittard's title or duties or (ii) the
employment
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agreement is terminated by the employers other than for cause, disability,
retirement or death, Mr. Pittard will be entitled to a cash severance amount
equal to one time his annual compensation, as defined in the agreement.
In addition to the employment agreement, the Employer will, upon
consummation of the Conversion, enter into Change in Control Agreements with
seven officers including five executive officers: Messrs. Pittard, Baker, Howard
and Reinhardt and Ms. Kaminske (the "Executives"). The Company and the
Association are considering entering into additional Change in Control
Agreements with a small number of officers. The Changes in Control Agreements
will have terms of three years, which term shall be extended each year for a
successive additional one-year period upon approval of the Boards of Directors
unless the Executive elects, not less than 60 days prior to the annual
anniversary date, not to extend the term.
The Change in Control Agreements provide that if certain adverse
actions are taken with respect to the Executive's employment following a change
in control, as defined, of the Company or the Association, the Executive will be
entitled to a cash severance amount equal to one time the Executive's annual
compensation (except Mr. Pittard's agreement which will provide for payment
equal to three times his annual compensation). In addition, the Executive will
be entitled to a continuation of benefits similar to those he is receiving at
the time of such termination for the remaining term of the agreement or until he
obtains full-time employment with another employer. The amount of severance
benefits payable under both the Change in Control Agreements and the employment
agreement will be limited to that amount which will not result in any portion of
such payment being deemed an excess parachute payment under Section 280G of the
Code.
A change in control is generally defined in the Change in Control
Agreements to include any change in control of the Company required to be
reported under the federal securities laws, as well as (i) the acquisition by
any person of 25% or more of the Company's outstanding voting securities and
(ii) a change in two-thirds of the directors of the Company during any two-year
period without the approval of at least MAJORITY of the persons who were
directors of the Company at the beginning of such period. If a change in control
in the Company had occurred as of June 30, 1998, Messrs. Pittard, Baker, Howard
and Reinhardt and Ms. Kaminske would be entitled to receive $575,000, $115,000,
$190,000, $98,000, and $104,000, respectively.
INDEBTEDNESS OF MANAGEMENT
In accordance and in compliance with applicable federal laws and
regulations, the Association offers mortgage loans to its directors, officers
and full-time employees for the financing of their primary residences and
certain other loans. Currently, all existing loans made by the Association to
its executive officers and directors and their associates were made on
substantially the same terms, including interest rate and collateral, as those
prevailing at the time for comparable transactions with non-affiliated persons.
It is the belief of management that these loans neither involve more than the
normal risk of collectibility nor present other unfavorable features.
All transactions between the Company and/or the Association and their
respective executive officers, directors, holders of 10% or more of the shares
of its Common Stock and affiliates thereof, are on terms no less favorable to
the Company or the Association, as the case may be, than could have been
obtained by it in arm's-length negotiations with unaffiliated persons. Such
transactions must be approved by a majority of independent outside directors of
the Company, or the Association, as the case may be, not having any interest in
the transaction.
NEW STOCK BENEFIT PLANS
STOCK OPTION PLAN. Following consummation of the Conversion, the Board
of Directors of the Company intends to adopt a 1999 Stock Option Plan, which
will be designed to attract and retain qualified personnel in key positions,
provide directors, officers and key employees with a proprietary interest in the
Company as an incentive to contribute to the success of the Company and reward
key employees for outstanding performance. The 1999 Option Plan will provide for
the grant of incentive stock options intended to comply with the requirements of
Section 422 of the Code ("incentive stock options"), non-incentive or
compensatory stock options, stock appreciation rights and limited rights which
will be exercisable only upon a change in control of the Company (collectively
"Awards"). Awards may be granted to directors and key employees of the Company
and any subsidiaries. The 1999 Stock Option Plan will be
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administered and interpreted by a Stock Benefits Committee of the Board of
Directors. Unless sooner terminated, the Stock Option Plan shall continue in
effect for a period of 10 years from the date the Stock Option Plan is adopted
by the Board of Directors.
Under the 1999 Stock Option Plan, the Stock Benefits Committee will
determine which directors, officers and key employees will be granted Awards,
whether options will be incentive or compensatory options, the number of shares
subject to each Award, the exercise price of each option, whether options may be
exercised by delivering other shares of Common Stock and when such options
become exercisable. The per share exercise price of an incentive stock option
must at least equal the fair market value of a share of Common Stock on the date
the option is granted (110% of fair market value in the case of incentive stock
options granted to employees who are 5% shareholders).
At a meeting of shareholders of the Company following the Conversion,
which under applicable OTS regulations may be held no earlier than six months
after the completion of the Conversion, the Board of Directors intends to
present the 1999 Stock Option Plan to shareholders for approval and to reserve
an amount equal to 10% of the shares of Conversion Stock sold in the Offerings
(or 659,036 shares based upon the issuance of 6,590,357 shares of Conversion
Stock at the maximum of the Estimated Valuation Range), for issuance under the
1999 Stock Option Plan. OTS regulations provide that, in the event such plan is
implemented within one year following the Conversion, no individual officer or
employee of the Association may receive more than 25% of the options granted
under the 1999 Stock Option Plan and non-employee directors may not receive more
than 5% individually, or 30% in the aggregate of the options granted under the
1999 Stock Option Plan. OTS regulations also provide that the exercise price of
any options granted under any such plan must be at least equal to the fair
market value of the Common Stock as of the date of grant. Each stock option or
portion thereof will be exercisable at any time on or after it vests and will be
exercisable until 10 years after its date of grant or for periods of up to one
year, subject to extension by the Committee, following the death, disability or
other termination of the optionee's employment or service as a director.
However, failure to exercise incentive stock options within three months after
the date on which the optionee's employment terminates may result in the loss of
incentive stock option treatment.
At the time an Award is granted pursuant to the 1999 Stock Option Plan,
the recipient will not be required to make any payment in consideration for such
grant. With respect to incentive or compensatory stock options, the optionee
will be required to pay the applicable exercise price at the time of exercise in
order to receive the underlying shares of Common Stock. The shares reserved for
issuance under the 1999 Stock Option Plan may be authorized but previously
unissued shares, treasury shares, or shares purchased by the Company on the open
market or from private sources. In the event of a stock split, reverse stock
split or stock dividend, the number of shares of Common Stock under the 1999
Stock Option Plan, the number of shares to which any Award relates and the
exercise price per share under any option or stock appreciation right shall be
adjusted to reflect such increase or decrease in the total number of shares of
Common Stock outstanding. In the event the Company declares a special cash
dividend or return of capital following the implementation of the 1999 Stock
Option Plan in an amount per share which exceeds 10% of the fair market value of
a share of Common Stock as of the date of declaration, the per share exercise
price of all previously granted options which remain unexercised as of the date
of such declaration shall, subject to certain limitations, be proportionately
adjusted to give effect to such special cash dividend or return of capital as of
the date of payment of such special cash dividend or return of capital.
Under current provisions of the Code, the federal income tax treatment
of incentive stock options and compensatory stock options is different. As
regards incentive stock options, an optionee who meets certain holding period
requirements will not recognize income at the time the option is granted or at
the time the option is exercised, and a federal income tax deduction generally
will not be available to the Company at any time as a result of such grant or
exercise. With respect to compensatory stock options, the difference between the
fair market value on the date of exercise and the option exercise price
generally will be treated as compensation income upon exercise, and the Company
will be entitled to a deduction in the amount of income so recognized by the
optionee. Upon the exercise of a stock appreciation right, the holder will
realize income for federal income tax purposes equal to the amount received by
him, whether in cash, shares of stock or both, and the Company will be entitled
to a deduction for federal income tax purposes in the same amount.
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It is currently expected that the 1999 Stock Option Plan will provide
that no individual officer will be able to receive stock options for more than
25% of the shares available under the 1999 Stock Option Plan, or 164,759 shares
if the amount of Conversion Stock sold in the Offerings is equal to the maximum
of the Estimated Valuation Range, vesting over a five-year period (or 32,952
shares per year based upon the maximum of the Estimated Valuation Range).
RECOGNITION PLAN. Following consummation of the Conversion, the Board of
Directors of the Company also intends to adopt a 1999 Recognition Plan for
directors, officers and employees. The objective of the 1999 Recognition Plan
will be to enable the Company to provide directors, officers and employees with
a proprietary interest in the Company as an incentive to contribute to its
success. The Company intends to present the 1999 Recognition Plan to
shareholders for their approval at a meeting of shareholders which, pursuant to
applicable OTS regulations, may be held no earlier than six months subsequent to
completion of the Conversion.
The 1999 Recognition Plan will be administered by the Stock Benefit
Committee of the Board of Directors, which will have the responsibility to
invest all funds contributed to the trust created for the 1999 Recognition Plan
(the "Trust"). The Company will contribute sufficient funds to the Trust so that
the Trust can purchase, following the receipt of shareholder approval, a number
of shares equal to an aggregate of 4% of the Conversion Stock sold in the
Offerings (263,614 shares, based on the sale of 6,590,357 shares at the maximum
of the Estimated Valuation Range). Shares of Common Stock granted pursuant to
the 1999 Recognition Plan generally will be in the form of restricted stock
vesting at the rate of 20% per year over the five years following the date of
grant. Certain of such awards may include performance criteria, the satisfaction
of which may be required in order for the awards to vest. For accounting
purposes, compensation expense in the amount of the fair market value of the
Common Stock at the date of the grant to the recipient will be recognized pro
rata over the period during which the shares are payable. A recipient will be
entitled to all voting and other shareholder rights, except that the shares,
while restricted, may not be sold, pledged or otherwise disposed of and are
required to be held in the Trust. Under the terms of the 1999 Recognition Plan,
recipients of awards will be entitled to instruct the trustees of the 1999
Recognition Plan as to how the underlying shares should be voted, and the
trustees will be entitled to vote all unallocated shares in their discretion. If
a recipient's employment is terminated as a result of death or disability, all
restrictions will expire and all allocated shares will become unrestricted. The
Board of Directors of the Company can terminate the 1999 Recognition Plan at any
time, and if it does so, any shares not allocated will revert to the Company.
Recipients of grants under the 1999 Recognition Plan will not be required to
make any payment at the time of grant or when the underlying shares of Common
Stock become vested, other than payment of withholding taxes.
It is currently expected that the 1999 Recognition Plan will provide
that no individual officer will be able to receive an award for more than 25% of
the shares available under the 1999 Recognition Plan, or 65,904 shares if the
amount of Conversion Stock sold in the Offerings is equal to the maximum of the
Estimated Valuation Range, vesting over a five-year period (or 13,181 shares per
year based upon the maximum of the Estimated Valuation Range).
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PROPOSED MANAGEMENT PURCHASES
The following table sets forth, for each of the Company's directors and
for all of the directors and executive officers as a group, (1) the number of
Exchange Shares to be held upon consummation of the Conversion, based upon their
beneficial ownership of Mid-Tier Holding Company Common Stock as of the date of
this Prospectus, (2) the proposed purchases of Conversion Stock, assuming
sufficient shares are available to satisfy their subscriptions, and (3) the
total amount of Common Stock to be held upon consummation of the Conversion, in
each case assuming that 5,730,659 shares of Conversion Stock are sold, which is
the midpoint of the Estimated Valuation Range.
<TABLE>
<CAPTION>
Proposed Purchase of Total Common Stock
Conversion Stock to be Held
--------------------------------- ----------------------------
Number of
Exchange Shares to Number Number Percentage
Name be Held(1)(2)(3) Amount of Shares of Shares of Total
- ---------------------------- --------------------- ----------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Frederick A. Teed 25,163 $ 10,000 1,000 26,163 .24%
James B. Pittard, Jr 12,796 50,000 5,000 17,796 .16
Forest C. Beaty, Jr 25,645 15,000 1,500 27,145 .25
Robert F. Cromwell 29,447 20,000 2,000 31,447 .28
Karl D. Griffin 24,949 20,000 2,000 26,949 .24
Harold I. Stevenson 23,450 -- -- 23,450 .21
Larry J. Baker 17,541 50,000 5,000 22,541 .20
Cecil F. Howard, Jr 9,628 30,000 3,000 12,628 .11
Feriel G. Hughes -- 1,000 100 100 --
Mary L. Kaminske 16,400 10,000 1,000 17,400 .16
Michael E. Reinhart 17,122 10,000 1,000 18,122 .16
All directors and 202,141 $216,000 21,600 223,741 2.02
executive officers
as a group (11 persons)
</TABLE>
- ----------------
(1) Excludes shares which may be received upon the exercise of outstanding and
exercisable stock options. Based upon the Exchange Ratio of 2.1416 Exchange
Shares for each Public Mid-Tier Holding Company Share at the midpoint of
the Estimated Valuation Range, the persons named in the table would have
options to purchase Common Stock as follows: 10,151 shares for each of
Messrs. Teed, Beaty, Cromwell, Griffin and Stevenson, 30,496, 8,566, 12,849
and 6,596 shares for Messrs. Pittard, Baker, Howard and Reinhardt,
respectively, 6,510 shares for Ms. Kaminske, and for all directors and
executive officers as a group, 115,769 shares.
(2) Includes unvested shares awarded under the 1995 Recognition Plan, based
upon the above Exchange Ratio, in the following amounts: 4,069 shares for
each of Messrs. Teed, Beaty, Crowell, Griffin, Stevenson; 6,339, 3,512,
1,711 and 4,925 shares for Messrs. Pittard, Baker, Howard and Reinhardt,
respectively, 5,482 shares for Ms. Kaminske, and for all directors and
executive officers as a group, 42,316 shares.
(3) Excludes stock options and awards to be granted under the Company's 1999
Stock Option Plan and 1999 Recognition Plan if such plans are approved by
shareholders at an annual or special meeting of shareholders at least six
months following the Conversion and Reorganization. See "Management - New
Stock Benefit Plans."
THE CONVERSION
THE BOARDS OF DIRECTORS OF THE MHC, THE MID-TIER HOLDING COMPANY, THE
ASSOCIATION AND THE COMPANY HAVE APPROVED THE PLAN OF CONVERSION, AS HAS THE
OTS, SUBJECT TO APPROVAL BY THE MEMBERS OF THE MHC AND THE SHAREHOLDERS OF THE
MID-TIER HOLDING COMPANY ENTITLED TO VOTE ON THE MATTER AND THE SATISFACTION OF
CERTAIN OTHER CONDITIONS. SUCH OTS APPROVAL, HOWEVER, DOES NOT CONSTITUTE A
RECOMMENDATION OR ENDORSEMENT OF THE PLAN BY SUCH AGENCY.
GENERAL
The Boards of Directors of the MHC, the Mid-Tier Holding Company and the
Association unanimously adopted the Plan on July 29, 1998. The Plan was
subsequently amended on August 13, 1998. Following the incorporation of the
Company, the Board of Directors of the Company unanimously adopted the amended
Plan on August 13, 1998. The Plan has been approved by the OTS, subject to,
among other things, approval of the Plan by the Members of the MHC and the
Shareholders of the Mid-Tier Holding Company. The Members' Meeting and the
Shareholders' Meeting have been called for this purpose on ____ __, 1998.
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The following is a summary of the material aspects of the Plan and the
Conversion. The summary is qualified in its entirety by reference to the
provisions of the Plan, which is available for inspection at each branch office
of the Association and at the offices of the OTS. The Plan also is filed as an
exhibit to the Registration Statement of which this Prospectus is a part, copies
of which may be obtained from the SEC. See "Additional Information."
PURPOSES OF THE CONVERSION
The MHC, as a federally chartered mutual holding company, does not have
shareholders and has no authority to issue capital stock. As a result of the
Conversion, the Company will be structured in the form used by holding companies
of commercial banks, most business entities and a growing number of savings
institutions. The Conversion will be important to the future growth and
performance of the holding company organization by providing a larger capital
base to support the operations of the Association and Company and by enhancing
their future access to capital markets, ability to diversify into other
financial services related activities, and ability to provide services to the
public. Although the Mid-Tier Holding Company currently has the ability to raise
additional capital through the sale of additional shares of Mid-Tier Holding
Company Common Stock, that ability is limited by the mutual holding company
structure which, among other things, requires that the Mutual Holding Company
hold a majority of the outstanding shares of Mid-Tier Holding Company Common
Stock.
The Conversion also will result in an increase in the number of
outstanding shares of Common Stock following the Conversion, as compared to the
number of outstanding shares of Public Mid-Tier Holding Company Shares prior to
the Conversion, which will increase the likelihood of the development of an
active and liquid trading market for the Common Stock. See "Market for Common
Stock."
If the Association had undertaken a standard conversion involving the
formation of a stock holding company in 1994, applicable OTS regulations would
have required a greater amount of common stock to be sold than the $34.0 million
of net proceeds raised in the MHC Reorganization. Management of the Association
believed that its ability to generate sufficient loan volume, particularly
within its market area, would have made it difficult to prudently invest in a
timely manner the significantly larger amount of capital that would have been
raised in a standard conversion when compared to the net proceeds raised in the
MHC Reorganization. A standard conversion in 1994 also would have immediately
eliminated all aspects of the mutual form of organization. The Association
conducted the Mid-Tier Reorganization primarily in order to be able to conduct
stock repurchases without incurring adverse tax effects. At all times
subsequent to the completion of the Mid-Tier Reorganization and the Board's
determination to proceed with the Conversion, the level of the market price of
the Mid-Tier Holding Company Common Stock was in excess of the level at which
the Board believed stock repurchases would be deemed a prudent and appropriate
use of the Mid-Tier Holding Company's resources.
The Offerings will further increase the capital of the Company and the
Association and provide them with additional flexibility to grow and increase
net income.
The MHC recently received an unsolicited proposal to merge from another
mutual holding company. The proposal contemplated a merger of the MHC with and
into the other mutual holding company as well as a merger of the Mid-Tier
Holding Company and the Association with and into the comparable subsidiaries of
the other mutual holding company. As a step incident to the merger of the
Mid-Tier Holding Company, each share of Mid-Tier Holding Company Common Stock
would be exchanged for shares of the acquiring mid-tier holding company based on
their respective market capitalization. The offeror requested that the
Conversion be terminated in order to permit consummation of the proposed
transaction which it characterized as a "merger of equals." After careful
consideration of the proposed transaction with the assistance of financial and
legal advisers, the Boards of Directors of the MHC, the Mid-Tier Holding Company
and the Association unanimously decided that the proposed transaction was not in
the best interest of the MHC, the Mid-Tier Holding Comnpany or Community Savings
or the best interests of the members of the MHC, the shareholders of the
Mid-Tier Holding Company or the depositors of the Association.
In light of the foregoing, the Boards of Directors of the Association,
the Mid-Tier Holding Company and the MHC believe that the Conversion is in the
best interests of such companies and their respective Shareholders and Members.
DESCRIPTION OF THE CONVERSION
On July 29, 1998, the Boards of Directors of the Association, the
Mid-Tier Holding Company and the MHC adopted the Plan. The Boards subsequently
amended the Plan on August 13, 1998 and October 14, 1998 . The Association
incorporated the Company under Delaware law as a first-tier wholly owned
subsidiary of the Association. Pursuant to the Plan, (i) the Mid-Tier Holding
Company will convert to a federal interim stock savings institution and
simultaneously merge with and into the Association with the Association being
the survivor thereof, (ii) the MHC will convert from mutual form to a federal
interim stock savings institution and simultaneously merge with and into the
Association, pursuant to which the MHC will cease to exist and the shares of
Mid-Tier Holding Company Common Stock held by the MHC will be
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cancelled, and (iii) an interim savings institution ("Interim") to be formed as
a wholly owned subsidiary of the Company will then merge with and into the
Association. As a result of the merger of Interim with and into the Association,
the Association will become a wholly-owned subsidiary of the Company and the
Public Mid-Tier Holding Company Shares will be converted into the Exchange
Shares pursuant to the Exchange Ratio, which will result in the holders of such
shares owning in the aggregate approximately the same percentage of the Common
Stock to be outstanding upon the completion of the Conversion (I.E., the
Conversion Stock and the Exchange Shares) as the percentage of Mid-Tier Holding
Company Common Stock owned by them in the aggregate immediately prior to
consummation of the Conversion (as adjusted from 48.66% to 48.14% to reflect the
amount of excess dividends previously waived by the MHC), before giving effect
to (a) the payment of cash in lieu of issuing fractional Exchange Shares, and
(b) any shares of Conversion Stock purchased by Public Shareholders in the
Offerings.
Pursuant to OTS regulations, consummation of the Conversion (including
the offering of Conversion Stock in the Offerings, as described below) is
conditioned upon the approval of the Plan by (1) the OTS, (2) at least a
majority of the total number of votes eligible to be cast by Members of the MHC
at the Members' Meeting, and (3) holders of at least two-thirds of the shares of
the outstanding Mid-Tier Holding Company Common Stock at the Shareholders'
Meeting. In addition, the Primary Parties have conditioned the consummation of
the Conversion on the approval of the Plan by at least a majority of the votes
cast, in person or by proxy, by the Public Shareholders at the Shareholders'
Meeting.
EFFECTS OF THE CONVERSION
GENERAL. Prior to the Conversion, each depositor in the Association has
both a deposit account in the institution and a pro rata ownership interest in
the net worth of the MHC based upon the balance in his account, which interest
may only be realized in the event of a liquidation of the MHC. However, this
ownership interest is tied to the depositor's account and has no tangible market
value separate from such deposit account. A depositor who reduces or closes his
account receives a portion or all of the balance in the account but nothing for
his ownership interest in the net worth of the MHC, which is lost to the extent
that the balance in the account is reduced.
Consequently, the depositors of the Association normally have no way to
realize the value of their ownership interest in the MHC, which has realizable
value only in the unlikely event that the MHC is liquidated. In such event, the
depositors of record at that time, as owners, would share pro rata in any
residual surplus and reserves of the MHC after other claims are paid.
Upon consummation of the Conversion, permanent nonwithdrawable capital
stock will be created to represent the ownership of the net worth of the
Company. The Common Stock of the Company is separate and apart from deposit
accounts and cannot be and is not insured by the FDIC or any other governmental
agency. Certificates are issued to evidence ownership of the permanent stock.
The stock certificates are transferable, and therefore the stock may be sold or
traded if a purchaser is available with no effect on any account the seller may
hold in the Association.
CONTINUITY. While the Conversion is being accomplished, the normal
business of the Association of accepting deposits and making loans will continue
without interruption. The Association will continue to be subject to regulation
by the OTS and the FDIC. After the Conversion, the Association will continue to
provide services for depositors and borrowers under current policies by its
present management and staff.
The directors and officers of the Association at the time of the
Conversion will continue to serve as directors and officers of the Association
after the Conversion. The directors and officers of the Company consist of
individuals currently serving as directors and officers of the MHC, the Mid-Tier
Holding Company and the Association, and they generally will retain their
positions in the Company after the Conversion.
EFFECT ON PUBLIC MID-TIER HOLDING COMPANY SHARES. Under the Plan, upon
consummation of the Conversion, the Public Mid-Tier Holding Company Shares shall
be converted into Common Stock based upon the Exchange Ratio without any further
action on the part of the holder thereof. Upon surrender of the Public Mid-Tier
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Holding Company Shares, Common Stock will be issued in exchange for such shares.
See "-Delivery and Exchange of Certificates."
Upon consummation of the Conversion, the Public Shareholders of Mid-Tier
Holding Company, a federally chartered stock corporation, will become
shareholders of the Company, a Delaware corporation. For a description of
certain changes in the rights of shareholders as a result of the Conversion, see
"The Conversion - Comparison of Shareholders' Rights" in the Mid-Tier Holding
Company's Proxy Statement for the Shareholders' Meeting.
EFFECT ON DEPOSIT ACCOUNTS. Under the Plan, each depositor in the
Association at the time of the Conversion will automatically continue as a
depositor after the Conversion, and each such deposit account will remain the
same with respect to deposit balance, interest rate and other terms, except to
the extent that funds in the account are withdrawn to purchase Conversion Stock
to be issued in the Offerings. Each such account will be insured by the FDIC to
the same extent as before the Conversion. Depositors will continue to hold their
existing certificates, passbooks and other evidences of their accounts.
EFFECT ON LOANS. No loan outstanding from the Association will be
affected by the Conversion, and the amount, interest rate, maturity and security
for each loan will remain as they were contractually fixed prior to the
Conversion.
EFFECT ON VOTING RIGHTS OF MEMBERS. At present, all depositors and
certain borrowers of the Association are members of, and have voting rights in,
the MHC as to all matters requiring membership action. Upon completion of the
Conversion, depositors and borrowers will cease to be members and will no longer
be entitled to vote at meetings of the MHC (which will cease to exist). Upon
completion of the Conversion, all voting rights in the Association will be
vested in the Company as the sole shareholder of the Association. Exclusive
voting rights with respect to the Company will be vested in the holders of
Common Stock. Depositors and borrowers of the Association will not have voting
rights in the Company after the Conversion, except to the extent that they
become shareholders of the Company.
TAX EFFECTS. Consummation of the Conversion is conditioned on prior
receipt by the Primary Parties of rulings or opinions with regard to federal and
Florida income taxation which indicate that the adoption and implementation of
the Plan of Conversion set forth herein will not be taxable for federal or
Florida income tax purposes to the Primary Parties or the Association's Eligible
Account Holders, Supplemental Eligible Account Holders or Other Members, except
as discussed below. See "-Tax Aspects" below and "Risk Factors.".
EFFECT ON LIQUIDATION RIGHTS. Were the MHC to liquidate, all claims of
the MHC's creditors would be paid first. Thereafter, if there were any assets
remaining, Members of the MHC would receive such remaining assets, pro rata,
based upon the deposit balances in their deposit accounts at the Association
immediately prior to liquidation. In the unlikely event that the Association
were to liquidate after the Conversion, all claims of creditors (including those
of depositors, to the extent of their deposit balances) also would be paid
first, followed by distribution of the "liquidation account" to certain
depositors (see "-Liquidation Rights" below), with any assets remaining
thereafter distributed to the Company as the holder of the Association's capital
stock. Pursuant to the rules and regulations of the OTS, a merger,
consolidation, sale of bulk assets or similar combination or transaction with
another insured institution would not be considered a liquidation for this
purpose and, in such a transaction, the liquidation account would be required to
be assumed by the surviving institution.
EFFECT ON EXISTING COMPENSATION PLANS. Under the Plan, the 1995 Stock
Option Plan and the 1995 Recognition Plan will become stock benefit plans of the
Company and shares of Common Stock will be issued (or reserved for issuance)
pursuant to such benefit plans and not shares of Mid-Tier Holding Company Common
Stock. Upon consummation of the Conversion, the Public Mid-Tier Holding Company
Shares held by such benefit plans shall be converted into Common Stock based
upon the Exchange Ratio. Also upon consummation of the Conversion, (i) all
rights to purchase, sell or receive Public Mid-Tier Holding Company Shares under
any agreement between the Association and any director, officer or employee of
the Association or under any plan or program of the Association or the Mid-Tier
Holding Company (including, without limitation, the 1995 Recognition Plan),
shall automatically, by operation of law, be converted into and shall become an
identical right to purchase, sell or receive Common Stock and
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an identical right to make payment in Common Stock under any such agreement
between the Association and any director, officer or employee of the Association
or under such plan or program of the Association, and (ii) rights outstanding
under the 1995 Stock Option Plan shall be assumed by the Company and thereafter
shall be rights only for shares of Common Stock, with each such right being for
a number of shares of Common Stock based upon the Exchange Ratio and the number
of shares of Public Mid-Tier Holding Company Shares that were available
thereunder immediately prior to consummation of the Conversion, with the price
adjusted to reflect the Exchange Ratio but with no change in any other term or
condition of such right. See "Management - Existing Stock Options."
THE OFFERINGS
SUBSCRIPTION OFFERING. In accordance with the Plan of Conversion, rights
to subscribe for the purchase of Conversion Stock have been granted under the
Plan of Conversion to the following persons in the following order of descending
priority: (1) Eligible Account Holders, (2) the ESOP, (3) Supplemental Eligible
Account Holders, (4) Other Members and (5) directors, officers and employees of
the Association. All subscriptions received will be subject to the availability
of Conversion Stock after satisfaction of all subscriptions of all persons
having prior rights in the Subscription Offering and to the maximum and minimum
purchase limitations set forth in the Plan of Conversion and as described below
under "-Limitations on Conversion Stock Purchases."
PRIORITY 1: ELIGIBLE ACCOUNT HOLDERS. Each Eligible Account Holder will
receive, without payment therefor, first priority, nontransferable subscription
rights to subscribe for in the Subscription Offering up to the greater of (i)
$1,000,000 of Conversion Stock, (ii) one-tenth of one percent (.1%) of the total
offering of shares of Conversion Stock in the Subscription Offering and (iii) 15
times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Conversion Stock offered in the
Subscription Offering by a fraction, of which the numerator is the amount of the
Eligible Account Holder's qualifying deposit and the denominator of which is the
total amount of qualifying deposits of all Eligible Account Holders, in each
case as of the close of business on June 30, 1997 (the "Eligibility Record
Date"), subject to the overall purchase limitations and excluding the issuance
of any Contingent Shares. See "-Limitations on Conversion Stock Purchases."
If there are not sufficient shares available to satisfy all
subscriptions, shares first will be allocated so as to permit each subscribing
Eligible Account Holder to purchase a number of shares sufficient to make his
total allocation equal to the lesser of the number of shares subscribed for or
100 shares. Thereafter, unallocated shares will be allocated to subscribing
Eligible Account Holders whose subscriptions remain unfilled in the proportion
that the amounts of their respective eligible deposits bear to the total amount
of eligible deposits of all subscribing Eligible Account Holders whose
subscriptions remain unfilled, provided that no fractional shares shall be
issued. The subscription rights of Eligible Account Holders who are also
directors or officers of the MHC, the Mid-Tier Holding Company or the
Association and their associates will be subordinated to the subscription rights
of other Eligible Account Holders to the extent attributable to increased
deposits in the year preceding June 30, 1997.
PRIORITY 2: ESOP. The ESOP will receive, without payment therefor,
second priority, nontransferable subscription rights to purchase, in the
aggregate, up to 8% of the Conversion Stock, including any increase in the
number of shares of Conversion Stock after the date hereof as a result of an
increase of up to 15% in the maximum of the Estimated Valuation. The ESOP
intends to purchase 8% of the shares of Conversion Stock, or 527,228 shares
based on the maximum of the Estimated Valuation Range. Subscriptions by the ESOP
will not be aggregated with shares of Conversion Stock purchased directly by or
which are otherwise attributable to any other participants in the Subscription
and Community Offerings, including subscriptions of any of the Association's
directors, officers, employees or associates thereof. See "Management - Employee
Stock Ownership Plan." In the event that the total number of shares of
Conversion Stock sold in the Offerings is increased to an amount greater than
the number of shares representing the maximum of the Estimated Valuation Range
("Maximum Shares"), the ESOP will have a priority right to purchase any such
shares exceeding the Maximum Shares up to an aggregate of 8% of the Conversion
Stock. See "-Limitations on Conversion Stock Purchases" and "Risk Factors
Possible Dilutive Effect of Issuance of Additional Shares."
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PRIORITY 3: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. Each Supplemental
Eligible Account Holder will receive, without payment therefor, third priority,
nontransferable subscription rights to subscribe for in the Subscription
Offering up to the greater of (i) $1,000,000 of Conversion Stock, (ii) one-tenth
of one percent (.1%) of the total offering of shares of Conversion Stock in the
Subscription Offering and (iii) 15 times the product (rounded down to the next
whole number) obtained by multiplying the total number of shares of Conversion
Stock offered in the Subscription Offering by a fraction, of which the numerator
is the amount of the Supplemental Eligible Account Holder's qualifying deposit
and the denominator of which is the total amount of qualifying deposits of all
Supplemental Eligible Account Holders, in each case as of the close of business
on September 30, 1998 (the "Supplemental Eligibility Record Date"), subject to
the overall purchase limitations and excluding the issuance of any Contingent
Shares. See "-Limitations on Conversion Stock Purchases."
If there are not sufficient shares available to satisfy all
subscriptions, shares first will be allocated so as to permit each subscribing
Supplemental Eligible Account Holder to purchase a number of shares sufficient
to make his total allocation equal to the lesser of the number of shares
subscribed for or 100 shares. Thereafter, unallocated shares will be allocated
to subscribing Supplemental Eligible Account Holders whose subscriptions remain
unfilled in the proportion that the amounts of their respective eligible
deposits bear to the total amount of eligible deposits of all such subscribing
Supplemental Eligible Account Holders whose subscriptions remain unfilled,
provided that no fractional shares shall be issued.
PRIORITY 4: OTHER MEMBERS. To the extent that there are shares remaining
after satisfaction of subscriptions by Eligible Account Holders, the ESOP and
Supplemental Eligible Account Holders, each Other Member will receive, without
payment therefor, fourth priority, nontransferable subscription rights to
subscribe for Conversion Stock in the Subscription Offering up to the greater of
(i) $1,000,000 of Conversion Stock and (ii) one-tenth of one percent (.1%) of
the total offering of shares of Conversion Stock in the Subscription Offering,
subject to the overall purchase limitations. See "-Limitations on Conversion
Stock Purchases."
In the event the Other Members subscribe for a number of shares which,
when added to the shares subscribed for by Eligible Account Holders, the ESOP
and Supplemental Eligible Account Holders, is in excess of the total number of
shares of Conversion Stock offered in the Subscription Offering, shares first
will be allocated so as to permit each subscribing Other Member to purchase a
number of shares sufficient to make his total allocation equal to the lesser of
the number of shares subscribed for or 100 shares. Thereafter, any remaining
shares will be allocated among subscribing Other Members on a pro rata basis in
the same proportion as each Other Member's subscription bears to the total
subscriptions of all subscribing Other Members, provided that no fractional
shares shall be issued.
PRIORITY 5: DIRECTORS, OFFICERS AND EMPLOYEES. To the extent that there
are shares remaining after satisfaction of all subscriptions by Eligible Account
Holders, the ESOP, Supplemental Eligible Account Holders and Other Members, then
directors, officers and employees of the Association will receive, without
payment therefor, fifth priority, nontransferable subscription rights to
subscribe for, in this category, up to an aggregate of 15.0% of the shares of
the shares of Conversion Stock offered in the Subscription Offering. The ability
of directors, officers and employees to purchase Conversion Stock under this
category is in addition to rights which are otherwise available to them under
the Plan, which generally allows such persons to purchase in the aggregate up to
25.0% of the total number of shares of Conversion Stock sold in the Offerings.
See "-Limitations on Conversion Stock Purchases."
In the event of an oversubscription in this category, subscription
rights will be allocated among the individual directors, officers and employees
on a point system basis, whereby such individuals will receive subscription
rights in the proportion that the number of points assigned to each of them
bears to the total points assigned to all directors, officers and employees,
provided that no fractional shares shall be issued. One point will be assigned
for each year of service with the Association, one point for each salary
increment of $5,000 per annum and five points for each office presently held in
the Mutual Holding Company and the Association, including directorships. For
information as to the number of shares proposed to be purchased by certain of
the directors and officers, see "Proposed Management Purchases."
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EXPIRATION DATE FOR THE SUBSCRIPTION OFFERING. The Subscription Offering
will expire at noon, Eastern Time, on _______, ____, unless extended for up to
45 days or such additional periods by the Primary Parties with the approval of
the OTS. Such extensions may not be extended beyond ____ __, 2000. Subscription
rights which have not been exercised prior to the Expiration Date will become
void.
The Primary Parties will not execute orders until at least the minimum
number of shares of Conversion Stock (5,730,659 shares) have been subscribed for
or otherwise sold. If all shares have not been subscribed for or sold within 45
days after the Expiration Date, unless such period is extended with the consent
of the OTS, all funds delivered to the Association pursuant to the Subscription
Offering will be returned promptly to the subscribers with interest and all
withdrawal authorizations will be cancelled. If an extension beyond the 45-day
period following the Expiration Date is granted, the Primary Parties will notify
subscribers of the extension of time and of any rights of subscribers to modify
or rescind their subscriptions.
ELIGIBLE PUBLIC SHAREHOLDERS OFFERING. To the extent that there are
shares remaining after satisfaction of subscriptions by Eligible Account
Holders, the ESOP, Supplemental Eligible Account Holders, Other Members and
directors, officers and employees, each Public Shareholder as of the Voting
Record Date (______ __, 1998) may purchase up to the greater of (i) $1,000,000
of Conversion Stock and (ii) one-tenth of one-percent (.1%) of the total
offering of shares of Conversion Stock in the Subscription Offering, subject to
the overall purchase limitations.
In the event the Eligible Public Shareholders as of the Voting Record
Date submit orders for a number of shares which, when added to the shares
subscribed for by Eligible Account Holders, the ESOP, Supplemental Eligible
Account Holders, Other Members and directors, officers and employees, is in
excess of the total number of shares of Conversion Stock offered in the
Offerings, available shares will be allocated among Eligible Public Shareholders
as of the Voting Record Date on a pro rata basis in the same proportion as each
Eligible Public Shareholder's order bears to the total orders of all Eligible
Public Shareholders, provided that no fractional shares shall be issued.
THE OPPORTUNITY TO SUBMIT ORDERS FOR SHARES OF CONVERSION STOCK IN THE
ELIGIBLE PUBLIC SHAREHOLDERS OFFERING CATEGORY IS SUBJECT TO THE RIGHT OF THE
PRIMARY PARTIES, IN THEIR SOLE DISCRETION, TO ACCEPT OR REJECT ANY SUCH ORDERS
IN WHOLE OR IN PART FOR ANY REASON EITHER AT THE TIME OF RECEIPT OF AN ORDER OR
AS SOON AS PRACTICABLE FOLLOWING THE EXPIRATION DATE. ELIGIBLE PUBLIC
SHAREHOLDERS DO NOT HAVE SUBSCRIPTION RIGHTS WITH RESPECT TO THE CONVERSION.
COMMUNITY OFFERING. To the extent that shares remain available for
purchase after satisfaction of all subscriptions of Eligible Account Holders,
the ESOP, Supplemental Eligible Account Holders, Other Members, directors,
officers and employees of the Association and orders of Eligible Public
Shareholders, the Primary Parties have determined to offer shares pursuant to
the Plan to certain members of the general public, with preference given to
natural persons residing in the Palm Beach, Martin, St. Lucie and Indian River
Counties (such natural persons referred to as "Preferred Subscribers"). Such
persons may purchase up to the greater of (i) $1,000,000 of Conversion Stock and
(ii) one-tenth of one percent (.1%) of the total offering of shares of
Conversion Stock in the Subscription Offering, subject to the maximum purchase
limitations. See "-Limitations on Conversion Stock Purchases." THIS AMOUNT MAY
BE INCREASED AT THE SOLE DISCRETION OF THE PRIMARY PARTIES. THE OPPORTUNITY TO
SUBSCRIBE FOR SHARES OF CONVERSION STOCK IN THE COMMUNITY OFFERING CATEGORY IS
SUBJECT TO THE RIGHT OF THE PRIMARY PARTIES, IN THEIR SOLE DISCRETION, TO ACCEPT
OR REJECT ANY SUCH ORDERS IN WHOLE OR IN PART EITHER AT THE TIME OF RECEIPT OF
AN ORDER OR AS SOON AS PRACTICABLE FOLLOWING THE EXPIRATION DATE.
If there are not sufficient shares available to fill the orders of
Preferred Subscribers after completion of the Subscription, Community and
Eligible Public Shareholder Offerings, such stock will be allocated first to
each Preferred Subscriber whose order is accepted by the Primary Parties, in an
amount equal to the lesser of 100 shares or the number of shares subscribed for
by each such Preferred Subscriber, if possible. Thereafter, unallocated shares
will be allocated among the Preferred Subscribers whose orders remain
unsatisfied in the same proportion that the unfilled subscription of each bears
to the total unfilled subscriptions of all Preferred Subscribers whose
subscription remains unsatisfied.
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If there are any shares remaining, shares will be allocated to other members of
the general public who subscribe in the Community Offering applying the same
allocation described above for Preferred Subscribers.
The Plan provides that, if feasible, all shares of Conversion Stock not
purchased in the Subscription, Community and Eligible Public Shareholder
Offerings may be offered for sale to the general public in a Syndicated
Community Offering through a syndicate of registered broker-dealers to be
formed. No person will be permitted to subscribe in the Syndicated Community
Offering for more than $1,000,000 of Conversion Stock subject to the maximum
purchase limitations. The Primary Parties have the right to reject orders in
whole or part in their sole discretion in the Syndicated Community Offering.
Neither FBR nor any registered broker-dealer shall have any obligation to take
or purchase any shares of Conversion Stock in the Syndicated Community Offering;
however, FBR has agreed to use its best efforts in the sale of shares in the
Syndicated Community Offering.
In addition to the foregoing, if a syndicate of broker-dealers
("selected dealers") is formed to assist in the Syndicated Community Offering, a
purchaser may pay for his shares with funds held by or deposited with a selected
dealer. If an order form is executed and forwarded to the selected dealer or if
the selected dealer is authorized to execute the order form on behalf of a
purchaser, the selected dealer is required to forward the order form and funds
to the Association for deposit in a segregated account on or before noon of the
business day following receipt of the order form or execution of the order form
by the selected dealer. Alternatively, selected dealers may solicit indications
of interest from their customers to place orders for shares. Such selected
dealers shall subsequently contact their customers who indicated an interest and
seek their confirmation as to their intent to purchase. The selected dealer will
acknowledge receipt of the order to its customer in writing on the following
business day and will debit such customer's account on the third business day
after the customer has confirmed his intent to purchase (the "debit date") and
on or before noon of the next business day following the debit date will send
funds to the Association for deposit in a segregated account. If such
alternative procedure is employed, purchasers' funds are not required to be in
their accounts with selected dealers until the debit date.
The Syndicated Community Offering will terminate no more than 45 days
following the Expiration Date, unless extended by the Primary Parties with the
approval of the OTS. See "-Stock Pricing, Exchange Ratio and Number of Shares
to be Issued" below for a discussion of rights of subscribers, if any, in the
event an extension is granted.
STOCK PRICING, EXCHANGE RATIO AND NUMBER OF SHARES TO BE ISSUED
The Plan of Conversion requires that the purchase price of the
Conversion Stock must be based on the appraised pro forma market value of the
Conversion Stock, as determined on the basis of an independent valuation. The
Primary Parties have retained FinPro to make such valuation. For its services in
making such appraisal and any expenses incurred in connection therewith, FinPro
will receive a fee of $28,500 (which fee includes the preparation of a business
plan), plus out-of-pocket expenses which are not expected to exceed $5,000. The
Primary Parties have agreed to indemnify FinPro and its employees and affiliates
against certain losses (including any losses in connection with claims under the
federal securities laws) arising out of its services as appraiser, except where
FinPro's liability results from its negligence or bad faith.
The Appraisal has been prepared by FinPro in reliance upon the
information contained in this Prospectus, including the Financial Statements.
FinPro also considered the following factors, among others: the present and
projected operating results and financial condition of the Primary Parties and
the economic and demographic conditions in the Association's existing market
area; certain historical, financial and other information relating to the
Association; a comparative evaluation of the operating and financial statistics
of Mid-Tier Holding Company with those of other similarly situated
publicly-traded companies located in Florida and other regions of the United
States; the aggregate size of the offering of the Conversion Stock; the impact
of the Conversion on the Association's net worth and earnings potential; the
proposed dividend policy of the Company and the Association; and the trading
market for Mid-Tier Holding Company Common Stock and securities of comparable
companies and general conditions in the market for such securities. The
projected operating results reviewed by FinPro covered periods through June 30,
1998. The financial projections assume (i) a flat interest rate environment
based on interest rates as of June 30, 1998 (ii) the Association's
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lending and investment activities continue to emphasize loan originations and
purchases of mortgage-related securities, (iii) gradual asset growth funded
primarily by interest-bearing deposits and borrowings, and (iv) the net
Conversion proceeds retained by the Company are initially primarily invested in
short-term investment securities.
On the basis of the foregoing, FinPro has advised the Primary Parties
that in its opinion the estimated pro forma market value of the Common Stock was
$110.5 million as of October 5, 1998. The holders of the Public Mid-Tier Holding
Company Shares will continue to hold the same aggregate percentage ownership
interest in the Company as they currently hold in the Association, as adjusted
from 48.66% to 48.14% to reflect the amount of excess dividends previously
waived by the MHC and before giving effect to the payment of cash in lieu of
issuing fractional Exchange Shares and any shares of Conversion Stock purchased
by the Mid-Tier Holding Company's shareholders in the Offerings. As a result,
the Appraisal was multiplied by the MHC's adjusted percentage interest in the
Mid-Tier Holding Company (I.E., 51.86%), to determine the midpoint of the
valuation ($57,306,590), and the minimum and maximum of the valuation were set
at 15% below and above the midpoint, respectively, resulting in a range of
$4,871,209 to $6,590,357. The Boards of Directors of the Primary Parties
determined that the Conversion Stock would be sold at $10.00 per share,
resulting in a range of 5,730,659 to 7,753,143 shares of Conversion Stock being
offered. Upon consummation of the Conversion, the Conversion Stock and the
Exchange Shares will represent approximately 51.86% and 48.14%, respectively, of
the Company's total outstanding shares, before giving effect to the items set
forth above.
The Boards of Directors of the Primary Parties reviewed FinPro's
appraisal report, including the methodology and the assumptions used by FinPro,
and determined that the Estimated Valuation Range was reasonable and adequate.
The Boards of Directors of the Primary Parties also established the formula for
determining the Exchange Ratio. Based upon such formula and the Estimated
Valuation Range, the Exchange Ratio ranged from a minimum of 1.8203 to a maximum
of 2.4628 Exchange Shares for each Public Mid-Tier Holding Company Share, with a
midpoint of 2.1416. Based upon these Exchange Ratios, the Company expects to
issue between 4,521,291 and 6,117,143 shares of Exchange Shares to the holders
of Public Mid-Tier Holding Company Shares outstanding immediately prior to the
consummation of the Conversion. The Estimated Valuation Range and the Exchange
Ratio may be amended with the approval of the OTS, if required, or if
necessitated by subsequent developments in the financial condition of any of the
Primary Parties or market conditions generally. In the event the Appraisal is
updated so that the Conversion Stock is below $48,712,090 or above $75,789,610
(the maximum of the Estimated Valuation Range, as adjusted by 15%), such
Appraisal will be filed with the SEC by post-effective amendment.
Based upon current market and financial conditions and recent practices
and policies of the OTS, in the event the Company receives orders for Conversion
Stock in excess of $65,903,570 (the maximum of the Estimated Valuation) and up
to $75,789,610 (the maximum of the Estimated Valuation, as adjusted by 15%), the
Company may be required by the OTS to accept all such orders. No assurances,
however, can be made that the Company will receive orders for Conversion Stock
in excess of the maximum of the Estimated Valuation Range or that, if such
orders are received, that all such orders will be accepted because the Company's
final valuation and number of shares to be issued are subject to the receipt of
an updated appraisal from FinPro which reflects such an increase in the
valuation and the approval of such increase by the OTS. There is no obligation
or understanding on the part of management to take and/or pay for any shares of
Conversion Stock in order to complete the Offerings.
Based on the Estimated Valuation, the 51.34% of the outstanding shares
of the Mid-Tier Holding Company Common Stock held by the MHC as of the date of
the Estimated Valuation, and the MHC's waiver of certain dividends as described
above which resulted in an adjustment of approximately .52%, the following table
sets forth, based upon the minimum, midpoint, maximum and 15% above the maximum
of the Estimated Valuation Range, the following: (i) the total number of shares
of Conversion Stock and Exchange Shares to be issued in the Conversion, (ii) the
percentage of the total Common Stock represented by the Conversion Stock and the
Exchange Shares, and (iii) the Exchange Ratio. The table assumes that there are
no fractional Exchange Shares.
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<TABLE>
<CAPTION>
Conversion Stock to be
Issued Exchange Shares to be Issued Total Shares of
--------------------------- ------------------------------- Common Stock to Exchange
Amount Percent Amount Percent be Outstanding Ratio
------------ ------------ -------------- ------------- ------------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Minimum 4,871,209 51.86% 4,521,271 48.14% 9,392,500 1.8203
Midpoint 5,730,659 51.86% 5,319,341 48.14% 11,050,000 2.1416
Maximum 6,590,357 51.86% 6,117,143 48.14% 12,707,500 2.4628
15% above maximum 7,578,961 51.86% 7,034,664 48.14% 14,613,625 2.8322
</TABLE>
Options to purchase Public Mid-Tier Holding Company Shares will also be
converted into and become options to purchase Common Stock. As of the date of
this Prospectus there were outstanding options to purchase 214,350 shares of
Mid-Tier Holding Company Common Stock with exercise prices ranging from $11.125
to $19.016 per share. The number of shares of Common Stock to be received upon
exercise of such options will be determined pursuant to the Exchange Ratio. The
aggregate exercise price, duration, and vesting schedule of such options will
not be affected. If such options are exercised prior to the consummation of the
Conversion there will be an increase in the number of Exchange Shares issued to
Public Shareholders and a decrease in the Exchange Ratio. The Mid-Tier Holding
Company has no plans to grant additional stock options prior to the completion
of the Conversion.
FINPRO'S VALUATION IS NOT INTENDED, AND MUST NOT BE CONSTRUED, AS A
RECOMMENDATION OF ANY KIND AS TO THE ADVISABILITY OF PURCHASING SUCH SHARES.
FINPRO DID NOT INDEPENDENTLY VERIFY THE FINANCIAL STATEMENTS AND OTHER
INFORMATION PROVIDED BY THE ASSOCIATION, THE MID-TIER HOLDING COMPANY AND THE
MHC, NOR DID FINPRO VALUE INDEPENDENTLY THE ASSETS OR LIABILITIES OF THE
ASSOCIATION OR THE MID-TIER HOLDING COMPANY. THE VALUATION CONSIDERS THE
ASSOCIATION, THE MID-TIER HOLDING COMPANY AND THE MHC AS GOING CONCERNS AND
SHOULD NOT BE CONSIDERED AS AN INDICATION OF THE LIQUIDATION VALUE OF THE
ASSOCIATION, THE MID-TIER HOLDING COMPANY AND THE MHC. MOREOVER, BECAUSE SUCH
VALUATION IS NECESSARILY BASED UPON ESTIMATES AND PROJECTIONS OF A NUMBER OF
MATTERS, ALL OF WHICH ARE SUBJECT TO CHANGE FROM TIME TO TIME, NO ASSURANCE CAN
BE GIVEN THAT PERSONS PURCHASING CONVERSION STOCK OR RECEIVING EXCHANGE SHARES
IN THE CONVERSION WILL THEREAFTER BE ABLE TO SELL SUCH SHARES AT PRICES AT OR
ABOVE THE PURCHASE PRICE OR IN THE RANGE OF THE FOREGOING VALUATION OF THE PRO
FORMA MARKET VALUE THEREOF.
No sale of shares of Conversion Stock or issuance of Exchange Shares may
be consummated unless prior to such consummation FinPro confirms that nothing of
a material nature has occurred which, taking into account all relevant factors,
would cause it to conclude that the Purchase Price is materially incompatible
with the estimate of the pro forma market value of a share of Common Stock upon
consummation of the Conversion. If such is not the case, a new Estimated
Valuation Range may be set, a new Exchange Ratio may be determined based upon
the new Estimated Valuation Range, a new Subscription and Community Offering
and/or Syndicated Community Offering may be held or such other action may be
taken as the Primary Parties shall determine and the OTS may permit or require.
Depending upon market or financial conditions following the commencement
of the Subscription Offering, the total number of shares of Conversion Stock to
be issued in the Offerings may be increased or decreased without a
resolicitation of subscribers, provided that the product of the total number of
shares times the Purchase Price is not below the minimum or more than 15% above
the maximum of the Estimated Valuation Range. In the event market or financial
conditions change so as to cause the aggregate Purchase Price of the shares to
be below the minimum of the Estimated Valuation Range or more than 15% above the
maximum of such range, purchasers will be resolicited (I.E., permitted to
continue their orders, in which case they will need to affirmatively reconfirm
their subscriptions prior to the expiration of the resolicitation offering or
their subscription funds will be promptly refunded with interest at The
Association's passbook rate of interest, or be permitted to modify or rescind
their subscriptions). Any increase or decrease in the number of shares of
Conversion Stock will result in a corresponding change in the number of Exchange
Shares, so that upon consummation of the Conversion the Conversion Stock and the
Exchange Shares will represent approximately 51.86% and 48.14%, respectively, of
the Company's total outstanding shares of Common Stock (exclusive of the effects
of the exercise of outstanding stock options).
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An increase in the number of shares of Conversion Stock as a result of
an increase in the Estimated Valuation Range would decrease both a subscriber's
ownership interest and the Company's pro forma net earnings and shareholders'
equity on a per share basis while increasing pro forma net earnings and
shareholders' equity on an aggregate basis. A decrease in the number of shares
of Conversion Stock would increase both a subscriber's ownership interest and
the Company's pro forma net earnings and shareholders' equity on a per share
basis while decreasing pro forma net earnings and shareholders' equity on an
aggregate basis. See "Risk Factors - Possible Dilutive Effect of Issuance of
Additional Shares" and "Pro Forma Data."
The appraisal report of FinPro has been filed as an exhibit to the
Company's Registration Statement and the MHC's Application for Conversion, of
which this Prospectus is a part, and is available for inspection in the manner
set forth under "Additional Information."
PERSONS IN NON-QUALIFIED STATES OR FOREIGN COUNTRIES
The Primary Parties will make reasonable efforts to comply with the
securities laws of all states in the United States in which persons entitled to
subscribe for stock pursuant to the Plan reside. However, the Primary Parties
are not required to offer stock in the Subscription Offering to any person who
resides in a foreign country or resides in a state of the United States with
respect to which all of the following apply: (a) the number of persons otherwise
eligible to subscribe for shares under the Plan who reside in such jurisdiction
is small; (b) the granting of subscription rights or the offer or sale of shares
of Conversion Stock to such persons would require any of the Primary Parties or
their officers, directors or employees, under the laws of such jurisdiction, to
register as a broker, dealer, salesman or selling agent or to register or
otherwise qualify its securities for sale in such jurisdiction or to qualify as
a foreign corporation or file a consent to service of process in such
jurisdiction; and (c) such registration, qualification or filing in the judgment
of the Primary Parties would be impracticable or unduly burdensome for reasons
of costs or otherwise. Where the number of persons eligible to subscribe for
shares in one state is small, the Primary Parties will base their decision as to
whether or not to offer the Conversion Stock in such state on a number of
factors, including but not limited to the size of accounts held by account
holders in the state, the cost of registering or qualifying the shares or the
need to register the Company, its officers, directors or employees as brokers,
dealers or salesmen. No payments in lieu of subscription rights will be granted
to any such persons.
LIMITATIONS ON CONVERSION STOCK PURCHASES
The Plan includes the following limitations on the number of shares of
Conversion Stock which may be purchased:
(1) No less than 25 shares of Conversion Stock may be purchased,
to the extent such shares are available;
(2) Each Eligible Account Holder may subscribe for and purchase
in the Subscription Offering up to the greater of (i) $1,000,000 of
Conversion Stock, (ii) one-tenth of one percent (.1%) of the total
offering of shares of Conversion Stock in the Subscription Offering and
(iii) 15 times the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of Conversion Stock
to be issued by a fraction, of which the numerator is the amount of the
qualifying deposit of the Eligible Account Holder and the denominator is
the total amount of qualifying deposits of all Eligible Account Holders,
in each case as of the close of business on the Eligibility Record Date,
subject to the overall limitation in clause (6) below;
(3) The ESOP may purchase in the aggregate up to 8% of the
shares of Conversion Stock to be issued in the Offerings, including any
additional shares issued in the event of an increase in the Estimated
Valuation Range;
(4) Each Supplemental Eligible Account Holder may subscribe for
and purchase in the Subscription Offering up to the greater of (i)
$1,000,000 of Conversion Stock, (ii) one-tenth of one percent (.1%)
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of the total offering of shares of Conversion Stock in the Subscription
Offering and (iii) 15 times the product (rounded down to the next whole
number) obtained by multiplying the total number of shares of
Conversion Stock to be issued by a fraction, of which the numerator is
the amount of the qualifying deposit of the Supplemental Eligible
Account Holder and the denominator is the total amount of qualifying
deposits of all Supplemental Eligible Account Holders, in each case as
of the close of business on the Supplemental Eligibility Record Date,
subject to the overall limitation in clause (6) below;
(5) Each Other Member, Eligible Public Shareholder or any other
person purchasing shares of Conversion Stock in the Subscription
Offering, the Community Offering, the Eligible Public Shareholder
Offering or in the Syndicated Community Offering, as applicable, may
subscribe for and purchase in the respective Offering up to the greater
of $1,000,000 of Conversion Stock and (ii) one-tenth of one percent
(.1%) of the total offering of shares of Conversion Stock in the
Subscription Offering, subject to the overall limitation in clause (6)
below;
(6) Except for the ESOP and certain Eligible Account Holders and
Supplemental Eligible Account Holders whose subscription rights are
based upon the amount of their deposits, the maximum number of shares of
Conversion Stock subscribed for or purchased in all categories by any
person, together with associates of and groups of persons acting in
concert with such persons, shall not exceed the number of shares of
Conversion Stock that, when combined with Exchange Shares received,
aggregate 3% of the number of shares of Common Stock issued in the
Conversion (281,775 shares and 381,225 shares at the minimum and maximum
of the Estimated Valuation Range, respectively); and
(7) No more than 15% of the total number of shares sold in the
Subscription Offering may be purchased by directors and officers of the
MHC and the Association in the fifth priority category in the
Subscription Offering. No more than 25% of the total number of shares
sold in the Offerings may be purchased by directors and officers of the
Association and their associates in the aggregate, excluding purchases
by the ESOP.
For purposes of the purchase limitations set forth in the Plan of
Conversion, Exchange Shares will be valued at the same price that shares of
Conversion Stock are issued in the Offerings.
Subject to any required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of the Members of
the MHC or the Shareholders of Mid-Tier Holding Company, both the individual
amount permitted to be subscribed for and the overall purchase limitation may be
decreased or increased up to a maximum of 5% of the total shares of Common Stock
to be issued in the Conversion at the sole discretion of the Primary Parties. If
such amount is increased, subscribers for the maximum amount will be, and
certain other large subscribers in the sole discretion of the Primary Parties
may be, given the opportunity to increase their subscriptions up to the then
applicable limit.
An individual Eligible Account Holder, Supplemental Eligible Account
Holder, Other Member or Public Shareholder may not purchase individually in the
Subscription Offering the overall maximum purchase limit of 1% of the number of
shares of Common Stock issued in the Conversion but may make such purchase,
together with associates of and persons acting in concert with such person, by
also purchasing in other available categories, subject to availability of shares
and the maximum overall purchase limit for purchases in the Offerings, including
Exchange Shares received by Public Shareholders for Public Mid-Tier Holding
Company Shares. However, except as may otherwise be required by the OTS, Public
Shareholders will not have to sell any Public Mid-Tier Holding Company Shares or
be limited in receiving Exchange Shares even if their current ownership of
Public Mid-Tier Holding Company Shares when converted into Exchange Shares
exceeds an applicable purchase limitation, including the maximum purchase
limitation of 3% of the number of shares of Common Stock issued in the
Conversion; provided, however, that a Public Shareholder who would exceed an
applicable purchase limitation may be precluded from purchasing Conversion Stock
in the Offerings.
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In the event of an increase in the total number of shares of Conversion
Stock offered in the Conversion due to an increase in the Estimated Valuation
Range of up to 15% (the "Adjusted Maximum"), the additional shares will be
allocated in the following order of priority in accordance with the Plan: (i) to
fill the ESOP's subscription of 8% of the Adjusted Maximum number of shares;
(ii) in the event that there is an oversubscription by Eligible Account Holders,
to fill unfulfilled subscriptions of Eligible Account Holders, inclusive of the
Adjusted Maximum; (iii) in the event that there is an oversubscription by
Supplemental Eligible Account Holders, to fill unfulfilled subscriptions of
Supplemental Eligible Account Holders, inclusive of the Adjusted Maximum; (iv)
in the event that there is an oversubscription by Other Members, to fill
unfulfilled subscriptions of Other Members, inclusive of the Adjusted Maximum;
(v) in the event there is an oversubscription by directors, officers and
employees of the Association, to fill unfulfilled subscriptions of directors,
officers and employees, inclusive of the Adjusted Maximum; (vi) in the event
that there is an oversubscription by Public Shareholders, to fill unfulfilled
subscriptions of Public Shareholders, inclusive of the Adjusted Maximum; and
(vii) to fill unfulfilled subscriptions in the Community Offering to the extent
possible, inclusive of the Adjusted Maximum.
The term "associate" of a person is defined to mean (i) any corporation
or other organization (other than the Primary Parties or a majority-owned
subsidiary of the Association or the Company) of which such person is a
director, officer or partner or is directly or indirectly the beneficial owner
of 10% or more of any class of equity securities; (ii) any trust or other estate
in which such person has a substantial beneficial interest or as to which such
person serves as trustee or in a similar fiduciary capacity, provided, however,
that such term shall not include any tax-qualified employee stock benefit plan
of the Primary Parties in which such person has a substantial beneficial
interest or serves as a trustee or in a similar fiduciary capacity; and (iii)
any relative or spouse of such person, or any relative of such spouse, who
either has the same home as such person or who is a director or officer of the
Primary Parties or any of their subsidiaries. In addition, joint account
relationships and common addresses will be taken into account in applying the
maximum purchase limitations.
MARKETING ARRANGEMENTS
The Company and the Association have engaged FBR as a financial advisor
and marketing agent in connection with the offering of the Common Stock, and FBR
has agreed to use its best efforts to solicit subscriptions and purchase orders
for shares of Conversion Stock in the Offerings. FBR is a member of the National
Association of Securities Dealers, Inc. ("NASD") and an SEC-registered
broker-dealer. FBR will provide various services including, but not limited to,
(1) training and educating the Association's directors, officers and employees
regarding the mechanics and regulatory requirements of the stock sales process;
(2) providing its employees to assist in staffing the Stock Center to assist the
Association's customers and internal stock purchasers and to assist in records
management for orders of shares of Common Stock; (3) targeting the Company's
sales efforts, including assisting in the preparation of marketing materials;
(4) soliciting orders for Conversion Stock; and (5) assisting in soliciting of
proxies of Members and Public Shareholders. Based upon negotiations between the
Company and the Association concerning fee structure, FBR will receive (i) a
management fee of $50,000 which will be subtracted from the total commission due
under (ii) and (ii) a total commission equal to 0.75% of the aggregate dollar
amount of Conversion Stock sold in the Offerings, excluding any shares of
Conversion Stock purchased in the Offerings by directors, officers, employees
(or members of their immediate families) and employee benefit plans of the
Company and the Association. The commission will be payable upon consummation of
the Conversion. In the event that a selected dealers agreement is entered into
in connection with a Syndicated Community Offering, the Association will pay to
such selected dealers a fee at the commission rate to be agreed upon by the
Company, the Association and FBR not to exceed .75% of the aggregate dollar
amount of the Conversion Stock for shares sold by an NASD member firm pursuant
to a selected dealers agreement. Fees to FBR and to any other broker-dealer may
be deemed to be underwriting fees, and FBR and including such broker-dealers may
be deemed to be underwriters. FBR will also be reimbursed for its out-of-pocket
expenses (including legal fees) in an amount not to exceed $70,000 of which
$_______ has been paid to date. The Company and the Association have agreed to
indemnify FBR and each person, if any, who controls FBR against all losses,
claims, damages or liabilities, joint or several, and all legal and other
expenses reasonably incurred by them in connection with certain claims that may
arise as a result of the Conversion, including liabilities under the Securities
Act, except those that are due to FBR's willful misconduct or gross negligence.
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Directors and executive officers of the Primary Parties may participate
in the solicitation of offers to purchase Conversion Stock. Other employees of
the Association may participate in the Offerings in ministerial capacities or
providing clerical work in effecting a sales transaction. Such other employees
have been instructed not to solicit offers to purchase Conversion Stock or
provide advice regarding the purchase of Conversion Stock. Questions of
prospective purchasers will be directed to executive officers or registered
representatives. The Company will rely on Rule 3a4-1 under the Exchange Act, and
sales of Conversion Stock will be conducted within the requirements of Rule
3a4-1, so as to permit officers, directors and employees to participate in the
sale of Conversion Stock. No officer, director or employee of the Primary
Parties will be compensated in connection with his solicitations or other
participation in the Offerings or the Exchange by the payment of commissions or
other remuneration based either directly or indirectly on transactions in the
Conversion Stock and Exchange Shares, respectively.
PROCEDURE FOR PURCHASING SHARES IN THE OFFERINGS
To ensure that each purchaser receives a Prospectus at least 48 hours
before the Expiration Date in accordance with Rule 15c2-8 of the Exchange Act,
no Prospectus will be mailed any later than five days prior to such date or hand
delivered any later than two days prior to such date. Execution of the order
form will confirm receipt or delivery of the Prospectus in accordance with Rule
15c2-8. Order Forms will only be distributed with a Prospectus.
To purchase shares in the Offerings, an executed original Order Form and
the required payment for each share subscribed for, or with appropriate
authorization for withdrawal from a deposit account at the Association (which
may be given by completing the appropriate blanks on the Order Form), must be
received by the Association at any of its offices by 12 noon, Eastern Time, on
____ __, 1998. Order Forms which are not received by such time or are executed
defectively or are received without full payment (or appropriate withdrawal
instructions) are not required to be accepted. The Association is not required
to accept orders submitted on facsimilied Order Forms. The Primary Parties have
the right to waive or permit the correction of incomplete or improperly executed
forms, but do not represent that they will do so. The waiver of an irregularity
on an Order Form, the allowance by the Primary Parties of a correction of an
incomplete or improperly executed Order Form, or the acceptance of an order
after 12 noon on the Expiration Date in no way obligates the Primary Parties to
waive an irregularity, allow a correction, or accept an order with respect to
any other Order Form. The interpretation by the Primary Parties of the
acceptability of an Order Form will be final. Once received, an executed Order
Form may not be modified, amended or rescinded without the consent of the
Primary Parties, unless the Offerings have not been completed within 45 days
after the end of the Subscription, Eligible Public Shareholders, and Community
Offerings, unless such period has been extended.
In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priority, depositors as of the close of business on the Eligibility
Record Date (June 30, 1997), the Supplemental Eligibility Record Date (September
30, 1998) and the Voting Record Date (____ __, 1998) must list on the Order Form
all accounts in which they have an ownership interest at the applicable
eligibility date, giving all names in each account and the account numbers.
Members qualifying for a stock purchase priority who add individuals with a
lower, or no, stock purchase priority as subscribers on an Order Form will have
their stock purchase priority reduced or eliminated based on the lower priority.
Payment for subscriptions and orders may be made (i) in cash if
delivered in person at any office of the Association, (ii) by check or money
order, or (iii) by authorization of withdrawal from deposit accounts maintained
with the Association. The Primary Parties may in their sole discretion elect not
to accept payment for shares of Conversion Stock by wired funds and there shall
be no liability for failure to accept such payment. Funds will be deposited in a
segregated account at the Association and interest will be paid on funds made by
cash, check or money order at the Association's passbook rate of interest from
the date payment is received until completion or termination of the Conversion.
If payment is made by authorization of withdrawal from deposit accounts at the
Association, the funds authorized to be withdrawn from a Association deposit
account may continue to accrue interest at the contractual rates until
completion or termination of the Conversion, but a hold will be placed on such
funds, thereby making them unavailable to the depositor until completion or
termination of the Conversion.
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If a subscriber authorizes the Association to withdraw the aggregate
amount of the purchase price from a deposit account, the Association will do so
as of the effective date of the Conversion. The Association may waive any
applicable penalties for early withdrawal from certificate accounts. If the
remaining balance in a certificate account is reduced below the applicable
minimum balance requirement at the time that the funds actually are transferred
under the authorization, the certificate will be canceled at the time of the
withdrawal, without penalty, and the remaining balance will earn interest at the
passbook rate.
The ESOP will not be required to pay for the shares subscribed for at
the time it subscribes, but rather may pay for such shares of Conversion Stock
subscribed for upon consummation of the Offerings, provided that there is in
force from the time of its subscription until such time, a loan commitment from
an unrelated financial institution or the Company to lend to the ESOP, at such
time, the aggregate purchase price of the shares for which it subscribed.
A depositor interested in using his or her IRA funds to purchase
Conversion Stock must do so through a self-directed IRA. Depositors interested
in using funds in a Association IRA to purchase Conversion Stock should contact
the Stock Center as soon as possible so that the necessary forms may be
forwarded for execution prior to the Expiration Date.
The Primary Parties have retained FBR as consultant and advisor in
connection with the Offerings and to assist in soliciting subscriptions in the
Offerings on a best efforts basis. See "The Conversion - The Offerings" and
"-Marketing Arrangements."
RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS AND SHARES
Pursuant to the rules and regulations of the OTS, no person with
subscription rights may transfer or enter into any agreement or understanding to
transfer the legal or beneficial ownership of the subscription rights issued
under the Plan or the shares of Conversion Stock to be issued upon their
exercise. Such rights may be exercised only by the person to whom they are
granted and only for such person's account. Each person exercising such
subscription rights will be required to certify that such person is purchasing
shares solely for such person's own account and that such person has no
agreement or understanding regarding the sale or transfer of such shares.
Federal regulations also prohibit any person from offering or making an
announcement of an offer or intent to make an offer to purchase such
subscription rights or shares of Conversion Stock prior to the completion of the
Conversion.
THE PRIMARY PARTIES WILL PURSUE ANY AND ALL LEGAL AND EQUITABLE REMEDIES
IN THE EVENT THEY BECOME AWARE OF THE TRANSFER OF SUBSCRIPTION RIGHTS AND WILL
NOT HONOR ORDERS KNOWN BY THEM TO INVOLVE THE TRANSFER OF SUCH RIGHTS.
LIQUIDATION RIGHTS
In the unlikely event of a complete liquidation of the MHC in its
present mutual form, each depositor of The Association would receive his pro
rata share of any assets of the MHC remaining after payment of claims of all
creditors. Each depositor's pro rata share of such remaining assets would be in
the same proportion as the value of his deposit account was to the total value
of all deposit accounts in the Association at the time of liquidation. After the
Conversion, each depositor, in the event of a complete liquidation of the
Association, would have a claim as a creditor of the same general priority as
the claims of all other general creditors of the Association. However, except as
described below, his claim would be solely in the amount of the balance in his
deposit account plus accrued interest. He would not have an interest in the
value or assets of the Association or the Company above that amount.
The Plan provides for the establishment, upon the completion of the
Conversion, of a special "liquidation account" for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders in an amount equal to
the amount of any dividends waived by the MHC ($8.2 million at June 30, 1998)
plus the greater of (1) the Association's retained earnings of $34.1 million at
March 31, 1994, the date of the latest statement of financial condition
contained in the final offering circular utilized in the MHC Reorganization, or
(2) 51.34% of the Mid-Tier Holding
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Company's total shareholders' equity as reflected in its latest statement of
financial condition contained in the final Prospectus utilized in the Offerings.
As of the date of this Prospectus, the initial balance of the liquidation
account would be approximately $50.8 million. Each Eligible Account Holder and
Supplemental Eligible Account Holder, if he were to continue to maintain his
deposit account at the Association, would be entitled, upon a complete
liquidation of the Association after the Conversion, to an interest in the
liquidation account prior to any payment to the Company as the sole shareholder
of the Association. Each Eligible Account Holder and Supplemental Eligible
Account Holder would have an initial interest in such liquidation account for
each deposit account, including passbook accounts, transaction accounts such as
checking accounts, money market deposit accounts and certificates of deposit,
held in the Association at the close of business on June 30, 1997 or September
30, 1998, as the case may be. Each Eligible Account Holder and Supplemental
Eligible Account Holder will have a pro rata interest in the total liquidation
account for each of his deposit accounts based on the proportion that the
balance of each such deposit account on the June 30, 1997 Eligibility Record
Date (or the September 30, 1998 Supplemental Eligibility Record Date, as the
case may be) bore to the balance of all deposit accounts in the Association on
such date.
If, however, on any December 31 annual closing date of the Association,
commencing December 31, 1998, the amount in any deposit account is less than the
amount in such deposit account on June 30, 1997 or September 30, 1998, as the
case may be, or any other annual closing date, then the interest in the
liquidation account relating to such deposit account would be reduced by the
proportion of any such reduction, and such interest will cease to exist if such
deposit account is closed. In addition, no interest in the liquidation account
would ever be increased despite any subsequent increase in the related deposit
account. Any assets remaining after the above liquidation rights of Eligible
Account Holders and Supplemental Eligible Account Holders are satisfied would be
distributed to the Company as the sole shareholder of the Association.
TAX ASPECTS
Consummation of the Conversion is expressly conditioned upon prior
receipt of either a ruling or an opinion of counsel with respect to federal tax
laws, and either a ruling or an opinion with respect to Florida tax laws, to the
effect that consummation of the transactions contemplated hereby will not result
in a taxable reorganization under the provisions of the applicable codes or
otherwise result in any adverse tax consequences to the MHC, the Mid-Tier
Holding Company, the Association, the Company or to account holders receiving
subscription rights, except to the extent, if any, that subscription rights are
deemed to have fair market value on the date such rights are issued. This
condition may not be waived by the Primary Parties. The Company believes that
the tax opinions summarized below address all material federal income tax
consequences that are generally applicable to the Primary Parties and the
persons receiving subscription rights.
Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C., has issued an
opinion to the Company and the Association to the effect that, for federal
income tax purposes: (1) the conversion of the MHC from mutual form to a federal
interim stock savings institution and its simultaneous merger with and into the
Association, with the Association being the surviving institution, will qualify
as a reorganization within the meaning of Section 368(a)(1)(A) of the Code, (2)
the conversion of the Mid-Tier Holding Company to a federal interim stock
savings association and its simultaneous merger with and into the Association
with the Association being the surviving institution, will qualify as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code, (3) no
gain or loss will be recognized by the Association upon the receipt of the
assets of the MHC and the Mid-Tier Holding Company in such mergers, (4) the
merger of Interim with and into the Association, with the Association being the
surviving institution, will qualify as a reorganization within the meaning of
Section 368(a)(1)(A) of the Code, (5) no gain or loss will be recognized by
Interim upon the transfer of its assets to the Association, (6) no gain or loss
will be recognized by the Association upon the receipt of the assets of Interim,
(7) no gain or loss will be recognized by the Company upon the receipt of the
Association Common Stock solely in exchange for Common Stock, (8) no gain or
loss will be recognized by the Public Shareholders upon the receipt of Common
Stock solely in exchange for their Public Mid-Tier Holding Company Shares, (9)
the basis of the Common Stock to be received by the Public Shareholders will be
the same as the basis of the Public Mid-Tier Holding Company Shares surrendered
in exchange therefor, before giving effect to any payment of cash in lieu of
fractional shares, (10) the holding period of the Common Stock to be received by
the Public Shareholders will include the holding period of
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the Public Mid-Tier Holding Company Shares, provided that the Public Mid-Tier
Holding Company Shares were held as a capital asset on the date of the exchange,
(11) no gain or loss will be recognized by the Company upon the sale of shares
of Conversion Stock in the Offerings, (12) the Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members will recognize gain, if
any, upon the issuance to them of withdrawable savings accounts in the
Association following the Conversion, interests in the liquidation account and
nontransferable subscription rights to purchase Conversion Stock, but only to
the extent of the value, if any, of the subscription rights, and (13) the tax
basis to the holders of Conversion Stock purchased in the Offerings will be the
amount paid therefor, and the holding period for the shares of Conversion Stock
will begin on the date of consummation of the Offerings if purchased through the
exercise of subscription rights and on the day after the date of purchase if
purchased in the Community Offering or Syndicated Community Offering.
Crowe, Chizek & Company LLP has issued an opinion to the Company and the
Association to the effect that the income tax consequences under Florida law of
the Conversion are not materially different than for federal tax purposes.
The opinion states that although case law and IRS pronouncements
indicate otherwise, it is possible that the IRS could assert that the overall
plan of the transactions contemplated by the Plan is the maintenance of the
Association's holding company structure and the merger of MHC into the
Association. If so, the IRS could argue that the "step transaction" doctrine
should be applied and the transitory elimination of the holding company
structure in the merger of the Mid-Tier Holding Company (after conversion to an
interim savings association) with and into the Association the survivor thereof
and the re-creation of the holding company structure in connection with the
merger of Interim into and with the Association with the Association the
survivor thereof should be ignored for tax purposes. If the IRS were successful
with such an assertion, the transaction would be treated as a direct merger of
MHC into the Association which may not qualify as a tax free reorganization,
resulting in taxable gain to the parties to the transaction.
However, the case law and the IRS' pronouncements indicate that if two
or more transactions carried out pursuant to an overall plan have economic
significance independent of each other, the transactions generally will not be
stepped together. The IRS's most significant pronouncement regarding independent
economic significance is Rev. Rul. 79-250. In that ruling, the IRS will respect
the transaction if each step demonstrates independent economic significance, is
not subject to attack as a sham, and was undertaken for valid business purposes
and not mere avoidance of taxes. The opinion of Elias, Matz, Tiernan & Herrick
L.L.P. indicates that the parties to the merger of the MHC (as converted to a
federal interim stock savings association) with and into the Association with
the Association the survivor thereof maintain a separate and distinct business
purpose for consummating such merger (e.g., allowing for the conversion of the
MHC from mutual to stock form). Immediately after the consummation of such
Merger, the Association will no longer be controlled by the MHC but will instead
be controlled by its Public Shareholders and that the Association's capital will
be substantially increased. The facts indicate that the merger of MHC with and
into the Association will result in a real and substantial change in the form of
ownership of the Association that is sufficient to conclude that such merger
comports with the underlying purposes and assumptions of a reorganization under
Section 368(a)(1)(A) of the Code.
In addition, Elias, Matz, Tiernan & Herrick L.L.P. believes that,
because the various steps contemplated by the Plan were necessitated by the
requirements of the OTS, each of the three mergers contemplated by the Plan has
a business purpose and independent significance and, as a result, the step
transaction should not be applied to this transaction.
The IRS is currently also reviewing the question of whether certain
downstream mergers of a parent corporation into its subsidiary, known as
inversion transactions, where a parent and its subsidiary reverse positions,
which otherwise qualify for tax-free treatment nevertheless should be treated as
taxable transactions. Elias, Matz, Tiernan & Herrick L.L.P. does not believe
that the transactions undertaken pursuant to the Plan should be so treated.
However, Elias, Matz,
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Tiernan & Herrick L.L.P.'s opinion is not binding on the IRS and there can be no
assurance that the IRS will not assert a contradictory position.
Based on a letter from FinPro, which letter is not binding on the IRS,
the Company believes that the subscription rights do not have any value, based
on the fact that such rights are acquired by the recipients without cost, are
nontransferable and of short duration, and afford the recipients the right only
to purchase the Conversion Stock at a price equal to its estimated fair market
value, which will be the same price as the Purchase Price for the unsubscribed
shares of Conversion Stock. If the subscription rights granted to eligible
subscribers are deemed to have an ascertainable value, receipt of such rights
likely would be taxable only to those eligible subscribers who exercise the
subscription rights (either as a capital gain or ordinary income) in an amount
equal to such value, and the Primary Parties could recognize gain on such
distribution. Eligible subscribers are encouraged to consult with their own tax
advisor as to the tax consequences in the event that such subscription rights
are deemed to have an ascertainable value.
Unlike private rulings, an opinion is not binding on the IRS and the IRS
could disagree with the conclusions reached therein. In the event of such
disagreement, there can be no assurance that the IRS would not prevail in a
judicial or administrative proceeding. If the IRS determines that the tax
effects of the transactions contemplated by the Plan are to be treated
differently from those presented in the opinion, the Primary Parties may be
subject to adverse tax consequences as a result of the Conversion.
DELIVERY AND EXCHANGE OF CERTIFICATES
CONVERSION STOCK. Certificates representing Conversion Stock issued in
connection with the Offerings will be mailed by the Company's transfer agent for
the Common Stock to the persons entitled thereto at the addresses of such
persons appearing on the stock order form for Conversion Stock as soon as
practicable following consummation of the Conversion. Any certificates returned
as undeliverable will be held by the Company until claimed by persons legally
entitled thereto or otherwise disposed of in accordance with applicable law.
Until certificates for Conversion Stock are available and delivered to
subscribers, subscribers may not be able to sell such shares, even though
trading of the Common Stock may have commenced.
EXCHANGE SHARES. After consummation of the Conversion, each holder of a
certificate or certificates theretofore evidencing issued and outstanding shares
of Mid-Tier Holding Company Common Stock (other than the MHC), upon surrender of
the same to an agent, duly appointed by the Company, which is anticipated to be
the transfer agent for the Common Stock (the "Exchange Agent"), shall be
entitled to receive in exchange therefor a certificate or certificates
representing the number of full shares of Common Stock for which the shares of
the Mid-Tier Holdings Company Common Stock theretofore represented by the
certificate or certificates so surrendered shall have been converted based on
the Exchange Ratio, including shares held in the Dividend Reinvestment Plan
(which the Company intends to maintain). The Exchange Agent shall promptly mail
to each such holder of record of an outstanding certificate which immediately
prior to the consummation of the Conversion evidenced shares of the Mid-Tier
Holding Company Common Stock, and which is to be exchanged for Common Stock
based on the Exchange Ratio as provided in the Plan, a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to such certificate shall pass, only upon delivery of such
certificate to the Exchange Agent) advising such holder of the terms of the
exchange effected by the Conversion and of the procedure for surrendering to the
Exchange Agent such certificate in exchange for a certificate or certificates
evidencing Common Stock. THE MID-TIER HOLDING COMPANY'S SHAREHOLDERS SHOULD NOT
FORWARD MID-TIER HOLDING COMPANY COMMON STOCK CERTIFICATES TO THE ASSOCIATION OR
THE EXCHANGE AGENT UNTIL THEY HAVE RECEIVED THE TRANSMITTAL LETTER.
No holder of a certificate theretofore representing shares of Mid-Tier
Holding Company Common Stock shall be entitled to receive any dividends in
respect of the Common Stock into which such shares shall have been converted by
virtue of the Conversion until the certificate representing such shares of
Mid-Tier Holding Company Common Stock is surrendered in exchange for
certificates representing shares of Common Stock. In the event that dividends
are declared and paid by the Company in respect of Common Stock after the
consummation of the Conversion but prior
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to surrender of certificates representing shares of Mid-Tier Holding Company
Common Stock, dividends payable in respect of shares of Common Stock not then
issued shall accrue (without interest). Any such dividends shall be paid
(without interest) upon surrender of the certificates representing such shares
of Mid-Tier Holding Company Common Stock. The Company shall be entitled, after
the consummation of the Conversion, to treat certificates representing shares of
Mid-Tier Holding Company Common Stock as evidencing ownership of the number of
full shares of Common Stock into which the shares of Mid-Tier Holding Company
Common Stock represented by such certificates shall have been converted,
notwithstanding the failure on the part of the holder thereof to surrender such
certificates.
The Company shall not be obligated to deliver a certificate or
certificates representing shares of Common Stock to which a holder of Mid-Tier
Holding Company Common Stock would otherwise be entitled as a result of the
Conversion until such holder surrenders the certificate or certificates
representing the shares of Mid-Tier Holding Company Common Stock for exchange as
provided above, or, in default thereof, an appropriate affidavit of loss and
indemnity agreement and/or a bond as may be required in each case by the
Company. If any certificate evidencing shares of Common Stock is to be issued in
a name other than that in which the certificate evidencing Mid-Tier Holding
Company Common Stock surrendered in exchange therefor is registered, it shall be
a condition of the issuance thereof that the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange pay to the Exchange Agent any transfer or other tax
required by reason of the issuance of a certificate for shares of Common Stock
in any name other than that of the registered holder of the certificate
surrendered or otherwise establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
REQUIRED APPROVALS
Various approvals of the OTS are required in order to consummate the
Conversion. The OTS has approved the Plan of Conversion, subject to approval by
the MHC's Members and the Mid-Tier Holding Company Shareholders. In addition,
consummation of the Conversion is subject to OTS approval of the Company's
application to acquire all of the to-be-outstanding Association Common Stock and
the applications with respect to the merger of the MHC (following its conversion
to a federal interim stock savings institution) and the Mid-Tier Holding Company
(following its conversion to a federal interim stock savings association) into
the Association and the merger of Interim into the Association, with the
Association being the surviving entity in all of the mergers. Applications for
these approvals have been filed and are currently pending. There can be no
assurances that the requisite OTS approvals will be received in a timely manner,
in which event the consummation of the Conversion may be delayed beyond the
expiration of the Offerings.
The Company is required to make certain filings with state securities
regulatory authorities in connection with the issuance of Conversion Stock and
Exchange Shares in the Conversion.
Pursuant to OTS regulations, the Plan of Conversion also must be
approved by (1) at least a majority of the total number of votes eligible to be
cast by Members of the MHC at the Members' Meeting, and (2) holders of at least
two-thirds of the outstanding Mid-Tier Holding Company Common Stock at the
Shareholders' Meeting. In addition, the Primary Parties have conditioned the
consummation of the Conversion on the approval of the Plan by at least a
majority of the votes cast, in person or by proxy, by the Public Shareholders at
the Shareholders' Meeting.
CERTAIN RESTRICTIONS ON PURCHASE OR TRANSFER OF SHARES AFTER THE CONVERSION
All shares of Conversion Stock purchased in connection with the
Conversion by a director or an executive officer of the Primary Parties will be
subject to a restriction that the shares not be sold for a period of one year
following the Conversion, except in the event of the death of such director or
executive officer or pursuant to a merger or similar transaction approved by the
OTS. Each certificate for restricted shares will bear a legend giving notice of
this restriction on transfer, and appropriate stop-transfer instructions will be
issued to the Company's transfer agent. Any shares of Common Stock issued within
this one-year period as a stock dividend, stock split or otherwise with respect
to such
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restricted stock will be subject to the same restrictions. The directors and
executive officers of the Company will also be subject to the insider trading
rules promulgated pursuant to the Exchange Act.
Purchases of Common Stock of the Company by directors, executive
officers and their associates during the three-year period following completion
of the Conversion may be made only through a broker or dealer registered with
the SEC, except with the prior written approval of the OTS. This restriction
does not apply, however, to negotiated transactions involving more than 1% of
the Company's outstanding Common Stock or to the purchase of stock pursuant to
any tax-qualified employee stock benefit plan, such as the ESOP, or by any
non-tax-qualified employee stock benefit plan, such as the 1999 Recognition
Plan.
Pursuant to OTS regulations, the Company will generally be prohibited
from repurchasing any shares of Common Stock within one year following
consummation of the Conversion. During the second and third years following
consummation of the Conversion, the Company may not repurchase any shares of its
Common Stock other than pursuant to (i) an offer to all shareholders on a pro
rata basis which is approved by the OTS; (ii) the repurchase of qualifying
shares of a director, if any; (iii) purchases in the open market by a
tax-qualified or non-tax-qualified employee stock benefit plan in an amount
reasonable and appropriate to fund the plan; or (iv) purchases that are part of
an open-market program not involving more than 5% of its outstanding capital
stock during a 12-month period, if the repurchases do not cause the Association
to become undercapitalized and the Association provides to the Regional Director
of the OTS no later than 10 days prior to the commencement of a repurchase
program written notice containing a full description of the program to be
undertaken and such program is not disapproved by the Regional Director.
However, the Regional Director has authority to permit repurchases during the
first year following consummation of the Conversion and to permit repurchases in
excess of 5% during the second and third years upon the establishment of
exceptional circumstances (I.E., where such repurchases would be in the best
interests of the institution and its shareholders).
RESTRICTIONS ON ACQUISITION OF THE COMPANY
AND THE ASSOCIATION
GENERAL
As described below, certain provisions in the Company's Certificate of
Incorporation and Bylaws and in the Company's and the Association's proposed
benefit plans, together with provisions of Delaware corporate law and OTS
regulations, may have anti-takeover effects. In addition, regulatory
restrictions may make it difficult for persons or companies to acquire control
of either the Company or the Association.
RESTRICTIONS IN THE COMPANY'S CERTIFICATE OF INCORPORATION AND BYLAWS
GENERAL. A number of provisions of the Company's Certificate of
Incorporation and Bylaws deal with matters of corporate governance and certain
rights of shareholders. The following discussion is a general summary of certain
provisions of the Company's Certificate of Incorporation and Bylaws which might
be deemed to have a potential "anti-takeover" effect. These provisions may have
the effect of discouraging a future takeover attempt which is not approved by
the Board of Directors but which individual Company shareholders may deem to be
in their best interests or in which shareholders may receive a substantial
premium for their shares over then current market prices. As a result,
shareholders who might desire to participate in such a transaction may not have
an opportunity to do so. Such provisions will also render the removal of the
current Board of Directors or management of the Company more difficult. The
following description of certain of the provisions of the Certificate of
Incorporation and Bylaws of the Company is necessarily general and reference
should be made in each case to such Certificate of Incorporation and Bylaws,
which are incorporated herein by reference. See "Additional Information" as to
how to obtain a copy of these documents.
LIMITATION ON VOTING RIGHTS. Article 12.B of the Company's Certificate
of Incorporation provides that following the date of the Conversion, no person
shall directly or indirectly offer to acquire or acquire the beneficial
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ownership of (i) more than 10% of the issued and outstanding shares of any class
of an equity security of the Company, or (ii) any securities convertible into,
or exercisable for, any equity securities of the Company if, assuming conversion
or exercise by such person of all securities of which such person is the
beneficial owner which are convertible into, or exercisable for, such equity
securities (but of no securities convertible into, or exercisable for, such
equity securities of which such person is not the beneficial owner), such person
would be the beneficial owner of more than 10% of any class of an equity
security of the Company. The term "person" is broadly defined to prevent
circumvention of this restriction.
The foregoing restrictions do not apply to (i) any offer with a view
toward public resale made exclusively to the Company by underwriters or a
selling group acting on its behalf, (ii) any tax-qualified employee benefit plan
or arrangement established by the Company or the Association and any trustee of
such a plan or arrangement, and (iii) any other offer or acquisition approved in
advance by the affirmative vote of two-thirds of the Company's entire Board of
Directors. In the event that shares are acquired in violation of Article 12.B,
all shares beneficially owned by any person in excess of 10% shall be considered
"Excess Shares" and shall not be counted as shares entitled to vote and shall
not be voted by any person or counted as voting shares in connection with any
matters submitted to shareholders for a vote, and the Board of Directors may
cause such Excess Shares to be transferred to an independent trustee for sale on
the open market or otherwise, with the expenses of such trustee to be paid out
of the proceeds of sale.
BOARD OF DIRECTORS. Article 7 of the Certificate of Incorporation of the
Company contains provisions relating to the Board of Directors and provides,
among other things, that the Board of Directors shall be divided into three
classes as nearly equal in number as possible, with the term of office of one
class expiring each year. See "Management Management of the Company." The
classified Board is intended to provide for continuity of the Board of Directors
and to make it more difficult and time consuming for a shareholder group to
fully use its voting power to gain control of the Board of Directors without the
consent of the incumbent Board of Directors of the Company. Cumulative voting in
the election of directors is not permitted.
Directors may be removed without cause at a duly constituted meeting of
shareholders called expressly for that purpose upon the vote of the holders of
at least 80% of the total votes eligible to be cast by shareholders, and with
cause by the affirmative vote of a majority of the total votes eligible to be
cast by shareholders. Cause for removal shall exist only if the director whose
removal is proposed has been either declared of unsound mind by an order of a
court of competent jurisdiction, convicted of a felony or of an offense
punishable by imprisonment for a term of more than one year by a court of
competent jurisdiction, or deemed liable by a court of competent jurisdiction
for gross negligence or misconduct in the performance of such director's duties
to the Company. Any vacancy occurring in the Board of Directors for any reason
(including an increase in the number of authorized directors) may be filled by
the affirmative vote of a majority of the remaining directors, whether or not a
quorum of the Board of Directors is present, and a director appointed to fill a
vacancy shall serve until the expiration of the term to which he was appointed.
Article 4.15 of the Bylaws governs nominations for election to the
Board, and requires all nominations for election to the Board of Directors other
than those made by the Board to be made by a shareholder eligible to vote at an
annual meeting of shareholders who has complied with the notice provisions in
that section. Written notice of a shareholder nomination must be delivered to,
or mailed to and received at, the principal executive offices of the Company not
later than 120 days prior to the anniversary date of the initial mailing of
proxy materials by the Company in connection with the immediately preceding
annual meeting of shareholders of the Company, provided that, with respect to
the first scheduled annual meeting following completion of the Conversion,
notice must be received December 15, 1998. Each such notice shall set forth (a)
the name, age, business address and residence address of the shareholder who
intends to make the nomination and of the person or persons to be nominated; (b)
the principal occupation or employment of the shareholder submitting the notice
and of each person being nominated; (c) the class and number of shares of the
Company's stock beneficially owned by the shareholder submitting the notice, by
any person who is acting in concert with or who is an affiliate or associate of
such shareholder (as such terms are defined in the Certificate of
Incorporation), by any person who is a member of any group with such shareholder
with respect to the Company's stock or who is known by such shareholder to be
supporting such nominee(s) on the date the notice is given to the Company, by
each person being nominated, and by each person who is in control of, is
controlled by or is under common control
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with any of the foregoing persons (if any of the foregoing persons is a
partnership, corporation, limited liability company, association or trust,
information must be provided regarding the name and address of, and the class of
number of shares of Company stock which are beneficially owned by, each partner
in such partnership, each director, executive officer and shareholder in such
corporation, each member in such limited liability company or association, and
each trustee and beneficiary of such trust, and in each case each person
controlling such entity and each partner, director, executive officer,
shareholder, member or trustee of any entity which is ultimately in control of
such partnership, corporation, limited liability company, association or trust);
(d) a representation that the shareholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the notice;
(e) a description of all arrangements or understandings between the shareholder
and each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (f) such other information regarding the shareholder submitting the
notice, each nominee proposed by such shareholder and any other person covered
by clause (c) of this paragraph as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC; and (g) the consent of
each nominee to serve as a director of the Company if so elected.
The Company's Certificate of Incorporation provides that the personal
liability of the directors and officers of the Company for monetary damages
shall be eliminated to the fullest extent permitted by the DGCL as it exists on
the effective date of the Certificate of Incorporation or as such law may be
thereafter in effect. Section 102(b)(7) of the DGCL currently provides that
directors (but not officers) of corporations that have adopted such a provision
will not be so liable, except for (i) any breach of the director's duty of
loyalty to the corporation or its shareholders, (ii) acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(iii) the payment of certain unlawful dividends and the making of certain stock
purchases or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit. This provision would absolve directors of
personal liability for negligence in the performance of their duties, including
gross negligence. It would not permit a director to be exculpated, however, for
liability for actions involving conflicts of interest or breaches of the
traditional "duty of loyalty" to the Company and its shareholders, and it would
not affect the availability of injunctive or other equitable relief as a remedy.
Article 10 of the Certificate of Incorporation provides that the Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
including actions by or in the right of the Company, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise. Such
indemnification is furnished to the full extent provided by law against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding. The indemnification provisions also permit the Company to pay
reasonable expenses in advance of the final disposition of any action, suit or
proceeding as authorized by the Company's Board of Directors, provided that the
indemnified person undertakes to repay the Company if it is ultimately
determined that such person was not entitled to indemnification.
The rights of indemnification provided in the Company's Certificate of
Incorporation are not exclusive of any other rights which may be available under
the Company's Bylaws, any insurance or other agreement, by vote of shareholders
or directors (regardless of whether directors authorizing such indemnification
are beneficiaries thereof) or otherwise. In addition, Section 6.4 of the Bylaws
authorizes the Company to maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Company, whether or not the
Company would have the power to provide indemnification to such person. By
action of the Board of Directors, the Company may create and fund a trust fund
or other fund or form of self-insurance arrangement of any nature, and may enter
into agreements with its officers, directors, employees and agents for the
purpose of securing or insuring in any manner its obligation to indemnify or
advance expenses provided for in the provisions in the Certificate of
Incorporation and Bylaws regarding indemnification. These provisions are
designed to reduce, in appropriate cases, the risks incident to serving as a
director, officer, employee or agent and to enable the Company to attract and
retain the best personnel available.
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The provisions regarding director elections and other provisions in the
Certificate of Incorporation and Bylaws are generally designed to protect the
ability of the Board of Directors to negotiate with the proponent of an
unfriendly or unsolicited proposal to take over or restructure the Company by
making it more difficult and time-consuming to change majority control of the
Board, whether by proxy contest or otherwise. The effect of these provisions
will be to generally require at least two (and possibly three) annual
shareholders' meetings, instead of one, to effect a change in control of the
Board of Directors of the Company even if holders of a majority of the Company's
capital stock believed that a change in the composition of the Board of
Directors was desirable. Because a majority of the directors at any given time
will have prior experience as directors, these requirements will help to ensure
continuity and stability of the Company's management and policies and facilitate
long-range planning for the Company's business. The provisions relating to
removal of directors and filling of vacancies are consistent with and supportive
of a classified board of directors.
The procedures regarding shareholder nominations will provide the Board
of Directors with sufficient time and information to evaluate a shareholder
nominee to the Board and other relevant information, such as existing
shareholder support for the nominee. The proposed procedures, however, will
provide incumbent directors advance notice of a dissident slate of nominees for
directors, and will make it easier for the Board to solicit proxies resisting
such nominees. This may make it easier for the incumbent directors to retain
their status as directors, even when certain shareholders view the shareholder
nominations as in the best interests of the Company or its shareholders.
AUTHORIZED SHARES. Article 4 of the Certificate of Incorporation
authorizes the issuance of 70,000,000 shares of which 10,000,000 shares shall be
shares of Preferred Stock, and 60,000,000 shares shall be Common Stock. The
shares of Common Stock and Preferred Stock were authorized in an amount greater
than that to be issued in the Conversion to provide the Company's Board of
Directors with as much flexibility as possible to effect, among other
transactions, financings, acquisitions, stock dividends, stock splits and
employee stock options. However, these additional authorized shares may also be
used by the Board of Directors consistent with its fiduciary duty to deter
future attempts to gain control of the Company. The Board of Directors also has
sole authority to determine the terms of any one or more series of Preferred
Stock, including voting rights, conversion rates, and liquidation preferences.
As a result of the ability to fix voting rights for a series of Preferred Stock,
the Board has the power, to the extent consistent with its fiduciary duty, to
issue a series of Preferred Stock to persons friendly to management in order to
attempt to block a post-tender offer merger or other transaction by which a
third party seeks control, and thereby assist management to retain its position.
The Company's Board currently has no plans for the issuance of additional
shares, other than the issuance of additional shares pursuant to stock benefit
plans.
SPECIAL MEETINGS OF SHAREHOLDERS AND SHAREHOLDER PROPOSALS. Article 8 of
the Certificate of Incorporation provides that, with limited exceptions, special
meetings of the Company's shareholders may only be called by not the Board of
Directors pursuant to a resolution approved by the affirmative vote of at least
three-fourths of the directors than in office. The Certificate of Incorporation
also provides that any action required or permitted to be approved or consented
to by the shareholders must be effected at a duly called meeting of the
shareholders and may not be effected by written consent in lieu of a meeting.
Article 2.14 of the Company's Bylaws provides that only such business as
shall have been properly brought before an annual meeting of shareholders shall
be conducted at the annual meeting. In order to be properly brought before an
annual meeting following completion of the Conversion, business must be (a)
brought before the meeting by or at the direction of the Board of Directors or
(b) otherwise properly brought before the meeting by a shareholder who has given
timely and complete notice thereof in writing to the Company. With respect to
shareholder proposals to be considered at the annual meeting of shareholders but
not included in the Company's proxy materials, the shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not later than 120 days prior to the anniversary date of the initial
mailing of proxy materials by the Company in connection with the immediately
preceding annual meeting; provided, however, that with respect to the first
scheduled annual meeting following completion of the Conversion, such written
notice must be received by the Company not later than the close of business on
December 15, 1998. A shareholder's notice shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a description of the
proposal desired to be brought before the annual meeting,
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(b) the name and address, as they appear on the Company's books, of the
shareholder proposing such business, and, to the extent known, any other
shareholders known by such shareholder to be supporting such proposal, (c) the
class and number of shares of the Company which are beneficially owned by the
shareholder submitting the notice, by any person who is acting in concert with
or who is an affiliate or associate of such shareholder (as such terms are
defined in the Certificate of Incorporation), by any person who is a member of
any group with such shareholder with respect to the Company's stock or who is
known by such shareholder to be supporting such proposal on the date the notice
is given to the Company, and by each person who is in control of, is controlled
by or is under common control with any of the foregoing persons (if any of the
foregoing persons is a partnership, corporation, limited liability company,
association or trust, information must be provided regarding the name and
address of, and the class and number of shares of Company stock which are
beneficially owned by, each partner in such partnership, each director,
executive officer and shareholder in such corporation, each member in such
limited liability company or association, and each trustee and beneficiary of
such trust, and in each case each person controlling such entity and each
partner, director, executive officer, shareholder, member or trustee of any
entity which is ultimately in control of such partnership, corporation, limited
liability company, association or trust), (d) the identification of any person
retained or to be compensated by the shareholder submitting the proposal, or any
person acting on his or her behalf, to make solicitations or recommendations to
shareholders for the purpose of assisting in the passage of such proposal and a
brief description of the terms of such employment, retainer or arrangement for
compensation, and (e) any material interest of the shareholder in such business.
The procedures regarding shareholder proposals are designed to provide
the Board with sufficient time and information to evaluate a shareholder
proposal and other relevant information, such as existing shareholder support
for the proposal. The proposed procedures, however, will give incumbent
directors advance notice of a shareholder proposal. This may make it easier for
the incumbent directors to defeat a shareholder proposal, even when certain
shareholders view such proposal as in the best interests of the Company or its
shareholders.
EVALUATION OF OFFERS. The Certificate of Incorporation of the Company
further provides that the Board of Directors of the Company, when evaluating any
offer to the Company from another party to (i) make a tender or exchange offer
for any equity security of the Company, (ii) merge or consolidate the Company
with another corporation or entity or (iii) purchase or otherwise acquire all or
substantially all of the properties and assets of the Company, may, consistent
with the exercise of its fiduciary duties and in connection with the exercise of
its judgment in determining what is in the best interest of the Company and the
shareholders of the Company, give due consideration to the extent permitted by
law not only to the price or other consideration being offered, but also to all
other relevant factors, including, without limitation, the financial and
managerial resources and future prospects of the other party, the possible
effects on the business of the Company and its subsidiaries and on the
employees, customers, suppliers and creditors of the Company and its
subsidiaries, and the effects on the communities in which the Company's and its
subsidiaries' facilities are located. By having these standards in the
Certificate of Incorporation of the Company, the Board of Directors may be in a
stronger position to oppose such a transaction if the Board concludes that the
transaction would not be in the best interest of the Company, even if the price
offered is significantly greater than the then market price of any equity
security of the Company.
SHAREHOLDER APPROVAL OF MERGERS AND CERTAIN OTHER EXTRAORDINARY
TRANSACTIONS. Article 11 of the Company's Certificate of Incorporation provides
that any action taken by shareholders under Subchapter IX of the DGCL (which
relates to merger or consolidation transactions) and Subchapter X (which relates
to sale of assets, dissolution and winding up transactions) shall with certain
exceptions, generally require the affirmative vote of at least 80% of the votes
eligible to be cast by shareholders. The supermajority 80% vote requirement of
Article 11 of the Certificate of Incorporation shall not be applicable to any
transaction approved in advance by at least two-thirds of the entire Board of
Directors of the Company, in which case the transaction will require only such
shareholder approval as specified under Delaware law. The DGCL requires that
approval of the Board of Directors and the holders of a majority of the
outstanding stock of the company entitled to vote thereon for mergers or
consolidations, and for sales, leases or exchanges of all or substantially all
of the Company's assets. The DGCL permits the Company to merge with another
corporation without obtaining the approval of the Company's shareholders if (i)
the Company is the surviving corporation of the merger, (ii) the merger
agreement does not amend the Company's Certificate of Incorporation; (iii) each
share of the Company's stock outstanding immediately prior to the effective date
of the merger is to be an identical
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outstanding or treasury share of the Company after the merger; and (iv) any
authorized but unissued shares or treasury shares of Common Stock to be issued
or delivered under the plan of merger plus those initially issuable upon
conversion of any other securities or obligations to be issued or delivered
under such plan do not exceed 20% of the shares of Common Stock outstanding
immediately prior to the effective date of the merger.
AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS. Article 13 of the
Company's Certificate of Incorporation generally provides that any amendment of
the Certificate of Incorporation must be first approved by a majority of the
Board of Directors and then by the holders of at least 80%of the shares of the
Company entitled to vote in an election of directors ("Voting Shares"), except
that if the amendment is approved by at least two-thirds of the Board of
Directors, the amendment shall only need shareholder approval if required by the
DGCL and then only by the affirmative vote of the holders of a majority of the
Voting Shares.
The Bylaws of the Company may be amended by a majority of the Board of
Directors or by the affirmative vote of a majority of the Voting Shares, except
that the affirmative vote of at least 80% of the Voting Shares shall be required
to amend, adopt, alter, change or repeal any provision inconsistent with certain
specified provisions of the Bylaws.
DELAWARE CORPORATE LAW
In addition to the provisions contained in the Company's Certificate of
Incorporation, the DGCL includes certain provisions applicable to Delaware
corporations, such as the Company, which may be deemed to have an anti-takeover
effect. Such provisions include requirements relating to certain business
combinations.
Section 203 of the DGCL ("Section 203") imposes certain restrictions on
business combinations between the Company and large shareholders. Specifically,
Section 203 prohibits a "business combination" (as defined in Section 203,
generally including mergers, sales and leases of assets, issuances of securities
and similar transactions) between the Company or a subsidiary and an "interested
shareholder" (as defined in Section 203, generally the beneficial owner of 15%
or more of the Company Common Stock) within three years after the person or
entity becomes an interested shareholder, unless (i) prior to the person or
entity becoming an interested shareholder, the business combination or the
transaction pursuant to which such person or entity became an interested
shareholder shall have been approved by the Company's Board of Directors, (ii)
upon consummation of the transaction in which the interested shareholder became
such, the interested shareholder holds at least 85% of the Company Common Stock
(excluding shares held by persons who are both officers and directors and shares
held by certain employee benefit plans), or (iii) the business combination is
approved by the Company's Board of Directors and by the holders of at least
two-thirds of the outstanding Company Common Stock, excluding shares owned by
the interested shareholders.
One of the effects of Section 203 may be to prevent highly leveraged
takeovers, which depend upon getting access to the acquired corporation's assets
to support or repay acquisition indebtedness and certain coercive acquisition
tactics. By requiring approval of the holders of two-thirds of the shares held
by disinterested shareholders for business combinations involving an interested
shareholder, Section 203 may prevent any interested shareholder from taking
advantage of its position as a substantial, if not controlling, shareholder and
engaging in transactions with the Company that may not be fair to the Company's
other shareholders or that may otherwise not be in the best interests of the
Company, its shareholders and other constituencies.
For similar reasons, however, these provisions may make more difficult
or discourage an acquisition of the Company, or the acquisition of control of
the Company by a principal shareholder, and thus the removal of incumbent
management. In addition, to the extent that Section 203 discourages takeovers
that would result in the change of the Company's management, such a change may
be less likely to occur.
ANTI-TAKEOVER EFFECTS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
The foregoing provisions of the Certificate of Incorporation and Bylaws
of the Company and Delaware law could have the effect of discouraging an
acquisition of the Company or stock purchases in furtherance of an acquisition,
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and could accordingly, under certain circumstances, discourage transactions
which might otherwise have a favorable effect on the price of the Company's
Common Stock. In addition, such provisions may result in the Company being
deemed to be less attractive to a potential acquiror and/or might result in
shareholders receiving a lesser amount of consideration for their shares of
Common Stock than otherwise could have been available.
The Board of Directors believes that the provisions described above are
prudent and will reduce vulnerability to takeover attempts and certain other
transactions that are not negotiated with and approved by the Board of Directors
of the Company. The Board of Directors believes that these provisions are in the
best interests of the Company and its future shareholders. In the Board of
Directors' judgment, the Board of Directors is in the best position to determine
the true value of the Company and to negotiate more effectively for what may be
in the best interests of its shareholders. Accordingly, the Board of Directors
believes that it is in the best interests of the Company and its future
shareholders to encourage potential acquirors to negotiate directly with the
Board of Directors and that these provisions will encourage such negotiations
and discourage hostile takeover attempts. It is also the Board of Directors'
view that these provisions should not discourage persons from proposing a merger
or other transaction at prices reflective of the true value of the Company and
where the transaction is in the best interests of all shareholders.
Despite the Board of Directors' belief as to the benefits to the
Company's shareholders of the foregoing provisions, these provisions also may
have the effect of discouraging a future takeover attempt in which shareholders
might receive a substantial premium for their shares over then current market
prices and may tend to perpetuate existing management. As a result, shareholders
who might desire to participate in such a transaction may not have an
opportunity to do so. The Board of Directors, however, has concluded that the
potential benefits of these provisions outweigh their possible disadvantages.
The Board of Directors of the Company and the Association are not aware
of any effort that might be made to acquire control of the Association or the
Company.
REGULATORY RESTRICTIONS
The Change in Bank Control Act provides that no person, acting directly
or indirectly or through or in concert with one or more other persons, may
acquire control of a savings and loan holding company unless the OTS has been
given 60 days' prior written notice. The HOLA provides that no company may
acquire "control" of a savings and loan holding company without the prior
approval of the OTS. Any company that acquires such control becomes a savings
and loan holding company subject to registration, examination and regulation by
the OTS. Pursuant to federal regulations, control of a savings and loan holding
company is conclusively deemed to have been acquired by, among other things, the
acquisition of more than 25% of any class of voting stock of the institution or
the ability to control the election of a majority of the directors of an
institution. Moreover, control is presumed to have been acquired, subject to
rebuttal, upon the acquisition of more than 10% of any class of voting stock, or
of more than 25% of any class of stock, of a savings and loan holding company
where certain enumerated "control factors" are also present in the acquisition.
The OTS may prohibit an acquisition if (i) it would result in a monopoly or
substantially lessen competition, (ii) the financial condition of the acquiring
person might jeopardize the financial stability of the institution, or (iii) the
competence, experience or integrity of the acquiring person indicates that it
would not be in the interest of the depositors or of the public to permit the
acquisition of control by such person. The foregoing restrictions do not apply
to the acquisition of a savings institution's capital stock by one or more
tax-qualified employee stock benefit plans, provided that the plan or plans do
not have beneficial ownership in the aggregate of more than 25% of any class of
equity security.
For three years following the Conversion, OTS regulations prohibit any
person from acquiring, either directly or indirectly, or making an offer to
acquire more than 10% of the stock of any converted savings institution or its
holding company, without the prior written approval of the OTS, except for (i)
any offer with a view toward public resale made exclusively to the institution
or its holding company or to underwriters or a selling group acting on its
behalf, (ii) offers that if consummated would not result in the acquisition by
such person during the preceding 12-month period of more than 1% of such stock,
(iii) offers in the aggregate for up to 24.9% by the ESOP or other tax-qualified
plans of the Company or the Association, and (iv) an offer to acquire or
acquisition of beneficial ownership of more than 10%
141
<PAGE> 143
of the common stock of the savings institution or its holding company by a
corporation whose ownership is or will be substantially the same as the
ownership of the savings institution, provided that the offer or acquisition is
made more than one year following the date of completion of the Conversion. Such
prohibition also is applicable to the acquisition of the Common Stock. In the
event that any person, directly or indirectly, violates this regulation, the
securities beneficially owned by such person in excess of 10% shall not be
counted as shares entitled to vote and shall not be voted by any person or
counted as voting shares in connection with any matters submitted to a vote of
shareholders. The definition of beneficial ownership for this regulation extends
to persons holding revocable or irrevocable proxies for the stock of an
institution or its holding company under circumstances that give rise to a
conclusive or rebuttable determination of control under OTS regulations.
In addition to the foregoing, the Plan prohibits any person, prior to
the completion of the Conversion, from offering, or making an announcement of an
intent to make an offer, to purchase subscription rights for Conversion Stock.
See "The Conversion - Restrictions on Transfer of Subscription Rights and
Shares."
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
GENERAL
The Company is authorized to issue 60,000,000 shares of Common Stock and
10,000,000 shares of Preferred Stock. The Company currently expects to issue up
to a maximum of 12,707,500 Shares of Common Stock, including 6,590,357 shares of
Conversion Stock and 6,117,143 Exchange Shares, and no shares of Preferred Stock
in the Conversion. Each share of Common Stock will have the same relative rights
as, and will be identical in all respects with, each other share of Common
Stock. Upon payment of the Purchase Price for the Conversion Stock and the
issuance of the Exchange Shares in accordance with the Plan of Conversion, all
such stock will be duly authorized, fully paid and nonassessable.
THE COMMON STOCK WILL REPRESENT NONWITHDRAWABLE CAPITAL, WILL NOT BE AN
ACCOUNT OF AN INSURABLE TYPE AND WILL NOT BE INSURED BY THE FDIC OR ANY OTHER
GOVERNMENTAL AUTHORITY.
COMMON STOCK
DIVIDENDS. The Company can pay dividends if, as and when declared by its
Board of Directors, subject to compliance with limitations which are imposed by
law. See "Dividend Policy." The holders of Common Stock will be entitled to
receive and share equally in such dividends as may be declared by the Board of
Directors of the Company out of funds legally available therefor. If the Company
issues Preferred Stock, the holders thereof may have a priority over the holders
of the Common Stock with respect to dividends.
VOTING RIGHTS. Upon completion of the Conversion, the holders of Common
Stock of the Company will possess exclusive voting rights in the Company. They
will elect the Company's Board of Directors and act on such other matters as are
required to be presented to them under Delaware law or the Company's Certificate
of Incorporation or as are otherwise presented to them by the Board of
Directors. Except as discussed in "Restrictions on Acquisition of the Company
and the Association - Restrictions in the Company's Certificate of Incorporation
and Bylaws - Limitation on Voting Rights," each holder of Common Stock will be
entitled to one vote per share and will not have any right to cumulate votes in
the election of directors. If the Company issues Preferred Stock, holders of the
Preferred Stock may also possess voting rights.
LIQUIDATION. In the event of any liquidation, dissolution or winding up
of the Company, the holders of the then-outstanding Common Stock would be
entitled to receive, after payment or provision for payment of all its debts and
liabilities, all of the assets of the Company available for distribution. If
Preferred Stock is issued, the holders thereof may have a priority over the
holders of the Common Stock in the event of liquidation or dissolution.
142
<PAGE> 144
PREEMPTIVE RIGHTS. Holders of the Common Stock will not be entitled to
preemptive rights with respect to any shares which may be issued in the future.
The Common Stock is not subject to redemption.
PREFERRED STOCK
None of the shares of the Company's authorized Preferred Stock will be
issued in the Conversion. Such stock may be issued with such preferences and
designations as the Board of Directors may from time to time determine. The
Board of Directors can, without shareholder approval, issue Preferred Stock with
voting, dividend, liquidation and conversion rights which could dilute the
voting strength of the holders of the Common Stock and may assist management in
impeding an unfriendly takeover or attempted change in control.
CHANGE IN AUDITORS
On November 6, 1997, the Board of Directors of the Mid-Tier Holding
Company terminated the services of Deloitte & Touche LLP as the Mid-Tier Holding
Company's and the Association's independent auditors subject to the completion
of Deloitte & Touche LLP's audit of the Mid-Tier Holding Company's financial
statements for the year ended December 31, 1997. Deloitte & Touche LLP issued
reports for the fiscal year ended September 30, 1996, the three months ended
December 31, 1996 and the fiscal year ended and December 31, 1997. Such
termination was recommended to the Board of Directors by the Audit Committee. In
connection with the termination of Deloitte & Touche LLP's services as
independent auditors, the Board of Directors of Mid-Tier Holding Company
appointed Crowe, Chizek and Company LLP, independent certified public accounts,
to perform the audit of the Mid-Tier Holding Company's financial statements for
the year ending December 31, 1998.
Deloitte & Touche LLP's report on the financial statements for the two
immediately preceding fiscal years did not contain an adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles. During the two most recent fiscal years and the
subsequent interim periods preceding Deloitte & Touche LLP's replacement, there
were no disagreements between the Mid-Tier Holding Company or the Association
and Deloitte & Touche LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
During the Mid-Tier Holding Company's two most recent fiscal years and
the subsequent interim periods preceding Deloitte & Touche LLP's replacement,
Deloitte & Touche LLP did not advise, and has not indicated to the Mid-Tier
Holding Company or the Association that it had any reason to advise, the
Mid-Tier Holding Company or the Association Registrant of any of the following:
(a) that the internal controls necessary for the Association to develop
reliable financial statements did not exist;
(b) that information had come to Deloitte & Touche LLP's attention that
had led it to no longer be able to rely on management's representations, or that
made it unwilling to be associated with the financial statements prepared by
management;
(c) (1) the need to expand significantly the scope of the Mid-Tier
Holding Company's or the Association's audit, or that information had come to
Deloitte & Touche LLP's attention during such time period that if further
investigated might (i) materially impact the fairness or reliability of either:
a previously issued audit report or the underlying financial statements, or the
financial statements issued or to be issued covering the fiscal periods
subsequent to the date of the most recent financial statements covered by an
audit report (including information that may prevent it from rending an
unqualified audit report on those financial statements), or (ii) cause it to be
unwilling to rely on management's representation or to be associated with the
Mid-Tier Holding Company's or the Association's financial statements, and (2)
that due to Deloitte & Touche LLP's replacement or for another reason, the issue
has not been resolved to Deloitte & Touche LLP's satisfaction prior to its
replacement.
143
<PAGE> 145
(d) (1) that information had come to Deloitte & Touche LLP's attention
that it had concluded materially impacted the fairness or reliability of either
(i) a previously issued audit report or the underlying financial statements, or
(ii) the financial statements issued or to be issued covering the fiscal periods
subsequent to the date of the most recent financial statements covered by an
audit report (including information that, unless resolved to Deloitte & Touche
LLP's satisfaction, would prevent it from rendering an unqualified audit report
on those financial statements, and (2) due to Deloitte & Touche LLP's
replacement, or for any other reason, the issue was not resolved to Deloitte &
Touche LLP's satisfaction prior to its replacement.
During the two most recent fiscal years and the subsequent interim
periods preceding the selection of Crowe, Chizek and Company, LLP, the Mid-Tier
Holding Company and the Association have not consulted Crowe, Chizek and Company
LLP regarding the application of accounting principles, either contemplated or
proposed, the type of audit opinion that might be rendered on the Association's
as the Mid-Tier Holding Company's financial statements or any other matters that
would be required to be reported therein.
EXPERTS
The consolidated financial statements of Community Savings Bankshares,
Inc. as of December 31, 1997 and 1996 and September 30, 1996 and for the year
ended December 31, 1997, the three months ended December 31, 1996, and each of
the two years in the period ended September 30, 1996 included in this Prospectus
have been audited by Deloitte & Touche, LLP, independent auditors, as stated in
their report appearing elsewhere herein in this registration statement, and have
been so included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
FinPro, Inc. has consented to the publication herein of the summary of
its report to the Company, the Mid-Tier Holding Company and the Association
setting forth its opinion as to the estimated pro forma market value of the
Common Stock to be outstanding upon completion of the Conversion and its opinion
with respect to subscription rights.
LEGAL MATTERS
The legality of the Common Stock and the federal income tax consequences
of the Conversion will be passed upon for the Company and the Association by
Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C., special counsel to the
Company and the Association. The Florida income tax consequences of the
Conversion will be passed upon for the Company and the Association by Crowe,
Chizek and Company LLP. Certain legal matters will be passed upon for FBR by
Peabody & Brown, Washington, D.C.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act with respect to the Conversion Stock and the Exchange Shares
offered hereby. As permitted by the rules and regulations of the SEC, this
Prospectus does not contain all the information set forth in the Registration
Statement. Such information can be examined without charge at the public
reference facilities of the SEC located at 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies of such material can be obtained from the SEC at
prescribed rates. In addition, the SEC maintains a web site that contains
registration statements and other reports regarding registrants that file
electronically with the SEC (such as the Company). The address of the SEC's web
site is http://www.sec.gov. The statements contained in this Prospectus as to
the contents of any contract or other document filed as an exhibit to the
Registration Statement summarize the provisions of such contracts or other
documents which are deemed material. However, such summaries are, of necessity,
brief descriptions thereof and are not necessarily complete; each such statement
is qualified by reference to such contract or document.
144
<PAGE> 146
The MHC has filed an Application for Conversion with the OTS with
respect to the Conversion. This Prospectus omits certain information contained
in that application. The application may be examined at the principal office of
the OTS, 1700 G Street, N.W., Washington, D.C. 20552, and at the Southeast
Regional Office of the OTS located at 1475 Peachtree Street, N.E. Atlanta,
Georgia 30309.
In connection with the Conversion, the Company will register its Common
Stock with the SEC under Section 12(g) of the Exchange Act, and, upon such
registration, the Company and the holders of its stock will become subject to
the proxy solicitation rules, reporting requirements and restrictions on stock
purchases and sales by directors, officers and greater than 10% shareholders,
the annual and periodic reporting requirements and certain other requirements of
the Exchange Act. Under the Plan, the Company has undertaken that it will not
terminate such registration for a period of at least three years following the
Conversion.
145
<PAGE> 147
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Independent Auditors' Report.................................................F-1
Consolidated Statements of Financial Condition as of June 30, 1998
(unaudited), December 31, 1997 and 1996 and September 30, 1996..........F-2
Consolidated Statements of Operations for the six months ended
June 30, 1998 and 1997 (unaudited), for the year ended
December 31, 1997, for the year ended December 31, 1996 and
for the years ended September 30, 1996 and 1995.........................F-3
Consolidated Statements of Comprehensive Income for the
six months ended June 30, 1998 and 1997 (unaudited), for the
three months ended December 31, 1997, for the three months
ended December 31, 1996 and for the years ended
September 30 1996 and 1995..............................................F-4
Consolidated Statements of Changes in Shareholders' Equity for the six months
ended June 30, 1998 (unaudited), for the year ended December 31, 1997, for
the three months ended December 31, 1996 and for the years ended
September 30, 1996 and 1995.............................................F-5
Consolidated Statements of Cash Flows for the six months ended June 30, 1998 and
1997 (unaudited), for the year ended December 31, 1997, for the three
months ended December 31, 1996 and for the years ended
September 30, 1996 and 1995............................................ F-6
Notes to Consolidated Financial Statements...................................F-8
All financial statement schedules are omitted because the required
information either is not applicable or is shown in the financial statements or
in the notes thereto.
ComFed, M. H. C. has limited assets other than its shares of Mid-Tier
Holding Company Common Stock (which will be cancelled in connection with the
Conversion) and has engaged in only minimal activities to date; accordingly, the
financial statements of the MHC have been omitted because of their
immateriality.
The Company was incorporated on August 6, 1998. Its current
capitalization is $1,000, and it has engaged in only minimal activities to date;
accordingly, the financial statements of the Company have been omitted because
of their immateriality.
146
<PAGE> 148
[DELOITTE & TOUCHE LLP LETTERHEAD LOGO]
INDEPENDENT AUDITORS' REPORT
Community Savings Bankshares, Inc.:
We have audited the accompanying consolidated statements of financial condition
of Community Savings Bankshares, Inc. ("Bankshares") and its subsidiary as of
December 31, 1997 and 1996 and September 30, 1996, and the related consolidated
statements of operations, comprehensive income, shareholders' equity, and cash
flows for the year ended December 31, 1997, the three months ended December 31,
1996 and for each of the two years in the period ended September 30, 1996. These
consolidated financial statements are the responsibility of Bankshares'
management. Our responsibility is to express an opinion on these consolidated
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, such consolidated financial statements present fairly, in all
material respects, the financial position of Bankshares and its subsidiary as of
December 31, 1997 and 1996 and September 30, 1996, and the results of its
operations and its cash flows for the year ended December 31, 1997, the three
months ended December 31, 1996, and for each of the two years in the period
ended September 30, 1996, in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Certified Public Accountants
West Palm Beach, Florida
February 20, 1998
<PAGE> 149
<TABLE>
<CAPTION>
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, December 31, September 30,
1998 1997 1996 1996
- ------------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(In Thousands)
<S> <C> <C> <C> <C>
ASSETS Cash and cash equivalents:
Cash and amounts due from depository institutions $ 16,477 $ 12,333 $ 13,547 $ 15,600
Interest-bearing deposits (Note 1) 30,948 13,621 28,895 29,180
--------- --------- --------- ---------
Total cash and cash equivalents 47,425 25,954 42,442 44,780
Securities available for sale (Approximate cost -1998, $91,750; 1997,
$142,357; 1996, $124,643;1996,$125,928)(Notes 1,2,6) 91,316 142,269 123,152 124,287
Investments - held to maturity (Approximate fair value - 1998, $25,539;
1997, $25,585; 1996, $26,266; 1996, $26,093) (Notes 1,3,6,15) 21,443 21,388 22,139 22,293
Mortgage-backed and related securities - held to maturity (Approximate fair
value - 1998, $42,360; 1997, $46,938; 1996,
$53,880; 1996, $54,988) (Notes 1,4,6) 41,884 46,413 53,405 54,945
Loans receivable, net of allowance for loan losses (1998, $2,767;
1997, $2,662; 1996, $2,542;1996, $2,312)(Notes 1,5,6) 527,375 451,709 389,040 376,219
Accrued interest receivable (Notes 1,7) 2,725 3,162 2,354 2,208
Office properties and equipment, net (Notes 1,8) 22,157 20,206 16,368 16,359
Real estate owned, net (Notes 1,9) 711 592 1,455 1,384
Federal Home Loan Bank stock - at cost (Notes 3,6) 3,782 3,264 2,864 5,384
Other assets (Note 1) 6,670 5,176 1,990 2,473
--------- --------- --------- ---------
Total assets $ 765,488 $ 720,133 $ 655,209 $ 650,332
========= ========= ========= =========
LIABILITIES
Deposits (Notes 6,10) $ 574,383 $ 550,708 $ 513,709 $ 498,929
Mortgage-backed bond, net (Notes 6,15) 15,883 16,333 17,230 17,453
Advances from Federal Home Loan Bank (Notes 6, 11) 75,630 57,341 34,763 36,350
Employee Stock Ownership Plan borrowings (Note 14) -- 1,424 1,915 2,064
Advances by borrowers for taxes and insurance 5,467 931 1,059 6,861
Other liabilities (Note 14 * 8,221 9,101 7,753 11,599
Deferred income taxes, net (Notes 1,12) 2,826 3,036 2,661 2,020
--------- --------- --------- ---------
Total liabilities 682,410 638,874 579,090 575,276
========= ========= ========= =========
Commitments and contingencies (Note 13)
SHAREHOLDERS' EQUITY
Preferred stock ($1 par value) 10,000,000 authorized shares,
no shares issued -- -- -- --
Common stock ($1 par value) 20,000,000 authorized shares, 1998, 5,100,120; 1997,
5,094,920; 1996, 5,090,120; 1996, 5,090,120 shares
issued and outstanding 5,100 5,095 5,090 5,090
Additional paid-in capital 30,621 30,278 29,920 29,881
Retained income - substantially restricted (Notes 13,16) 49,347 47,887 44,603 43,902
Common stock purchased by Employee Stock Ownership Plan (1,227) (1,424) (1,818) (1,965)
Common stock issued to Recognition and Retention Plan (330) (423) (608) (654)
Unrealized decrease in market value of securities available for sale,
net of income taxes (433) (154) (1,068) (1,198)
--------- --------- --------- ---------
Total shareholders' equity 83,078 81,259 76,119 75,056
--------- --------- --------- ---------
Total liabilities and shareholders' equity $ 765,488 $ 720,133 $ 655,209 $ 650,332
========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
F-2
<PAGE> 150
<TABLE>
<CAPTION>
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
For the For the For the Three
Six Months Year Months For the Years
Ended Ended Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest income:
Real estate loans (Note 1) $ 18,377 $ 15,479 $ 31,846 $ 7,427 $ 26,765 $ 23,661
Consumer and commercial business loans 913 817 1,644 408 1,508 1,197
Investment securities and securities available
for sale (Notes 2,3) 4,754 5,280 10,422 2,566 8,720 5,945
Mortgage-backed and related securities (Note 4) 1,637 2,010 4,448 1,004 4,403 4,198
Interest-earning deposits 1,146 991 1,956 491 2,493 2,719
---------- ---------- ---------- ---------- ---------- ----------
Total interest income 26,827 24,577 50,316 11,896 43,889 37,720
---------- ---------- ---------- ---------- ---------- ----------
Interest expense:
Deposits (Note 10) 11,976 11,031 22,648 5,251 19,247 15,679
Advances from Federal Home Loan Bank
and other borrowings (Notes 11, 15) 2,679 2,229 4,742 1,127 3,612 2,955
---------- ---------- ---------- ---------- ---------- ----------
Total interest expense 14,655 13,260 27,390 6,378 22,859 18,634
---------- ---------- ---------- ---------- ---------- ----------
Net interest income 12,172 11,317 22,926 5,518 21,030 19,086
Provision for loan losses (Notes 1,5) 213 83 264 243 98 240
---------- ---------- ---------- ---------- ---------- ----------
Net interest income after provision for loan losses 11,959 11,234 22,662 5,275 20,932 18,846
---------- ---------- ---------- ---------- ---------- ----------
Other income:
Servicing income and other fees 104 158 269 33 148 184
NOW account and other customer fees 1,677 1,608 3,339 820 3,150 2,767
Net gain (loss) on sale and early maturities
of securities available for sale -- -- (8) 51 -- --
Gain on early maturity of investment -- -- -- -- 254 --
Gain on sale of other assets -- -- 617 -- -- --
Net gain (loss) on sale of loans receivable -- -- 3 3 (225) --
Miscellaneous (25) 96 (35) 318 217 443
---------- ---------- ---------- ---------- ---------- ----------
Total other income 1,756 1,862 4,185 1,225 3,544 3,394
---------- ---------- ---------- ---------- ---------- ----------
Operating expense:
Employee compensation and benefits (Note 14) 4,994 4,253 8,989 2,125 7,785 7,293
Occupancy and equipment (Notes 8, 13) 2,527 2,420 5,059 1,201 4,581 4,506
Net (gain) loss on real estate owned 20 (3) (112) 37 (243) (812)
Advertising and promotion 467 432 734 240 616 545
Federal deposit insurance premium 171 99 270 288 3,883 1,029
Miscellaneous 1,667 1,604 3,621 753 3,178 2,342
---------- ---------- ---------- ---------- ---------- ----------
Total operating expense 9,846 8,805 18,561 4,644 19,800 14,903
---------- ---------- ---------- ---------- ---------- ----------
Income before provision for income taxes 3,869 4,291 8,286 1,856 4,676 7,337
---------- ---------- ---------- ---------- ---------- ----------
Provision (benefit) for income taxes: (Notes 1,12)
Current 1,502 1,612 3,042 65 1,817 3,126
Deferred (144) (56) (112) 631 (1,056) (363)
---------- ---------- ---------- ---------- ---------- ----------
Total provision for income taxes 1,358 1,556 2,930 696 761 2,763
---------- ---------- ---------- ---------- ---------- ----------
Net income $ 2,511 $ 2,735 $ 5,356 $ 1,160 $ 3,915 $ 4,574
========== ========== ========== ========== ========== ==========
Earnings per share - basic $ 0.51 $ 0.55 $ 1.09 $ 0.24 $ 0.80 $ 0.94
========== ========== ========== ========== ========== ==========
Earnings per share - diluted $ 0.49 $ 0.54 $ 1.06 $ 0.23 $ 0.79 $ 0.94
========== ========== ========== ========== ========== ==========
Weighted average common shares outstanding - basic 4,970,782 4,919,960 4,929,989 4,902,479 4,869,238 4,845,384
========== ========== ========== ========== ========== ==========
Weighted average common shares outstanding - diluted 5,116,956 5,021,739 5,054,853 4,951,820 4,936,763 4,882,658
========== ========== ========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE> 151
<TABLE>
<CAPTION>
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
For the For the For the Three
Six Months Year Months For the Years
Ended Ended Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net income $2,511 $2,735 $5,356 $1,160 $3,915 $4,574
Other comprehensive income, net of tax:
Change in unrealized increase (decrease) in
market value of securities available for sale (279) 483 914 130 (974) 2
------ ------ ------ ------ ------ ------
Comprehensive income, net of income taxes $2,232 $3,218 $6,270 $1,290 $2,941 $4,576
====== ====== ====== ====== ====== ======
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE> 152
<TABLE>
<CAPTION>
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED), THE YEAR ENDED DECEMBER 31,
1997, THE THREE MONTHS ENDED DECEMBER 31, 1996 AND THE YEARS ENDED SEPTEMBER 30,
1996, AND 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized
Increase
(Decrease) in
Retained Employee Recognition Market Value
Additional Income- Stock and of Securities
Common Paid-In Substantially Ownership Retention Available for
Stock Capital Restricted Plan Plan Sale Total
------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - September 30, 1994 $ -- $ -- $38,583 $ -- $ -- $ (473) $38,110
Issuance of Common Stock pursuant to
Reorganization, net of costs of issuance of $1,712 5,000 28,984 -- -- -- -- 33,984
Assets distributed to Mutual Holding Company
pursuant to Reorganization -- -- (200) -- -- -- (200)
Purchase of Common Stock by Employee Stock
Ownership Plan -- -- -- (2,753) -- -- (2,753)
Distribution of Common Stock to Recognition
and Retention Plan 89 1,278 -- -- (1,367) -- --
Net income for the year ended September 30, 1995 -- -- 4,574 -- -- -- 4,574
Unrealized increase in market value of assets
available for sale (net of income taxes) -- -- -- -- -- 2 2
Amortization of deferred compensation -Employee Stock
Ownership Plan and Recognition and Retention Plan -- (80) -- 297 205 -- 422
Dividends declared -- -- (1,291) -- -- -- (1,291)
------------------------------------------------------------------------------
Balance - September 30, 1995 5,089 30,182 41,666 (2,456) (1,162) (471) 72,848
Net income for the year ended September 30, 1996 -- -- 3,915 -- -- -- 3,915
Stock options exercised 1 12 -- -- -- -- 13
Transfer from securities held to maturity
to securities available for sale (net of
income taxes) -- -- -- -- -- 247 247
Unrealized decrease in market value of assets
available for sale (net of income taxes) (974) (974)
Adjustment to deferred compensation-
Recognition and Retention Plan -- (378) -- -- 378 -- --
Amortization of deferred compensation -Employee
Stock Ownership Plan and Recognition and -- 65 -- 491 130 -- 686
Retention Plan
Dividends declared -- -- (1,679) -- -- -- (1,679)
------------------------------------------------------------------------------
Balance - September 30, 1996 5,090 29,881 43,902 (1,965) (654) (1,198) 75,056
Net income for three months ended December 31,
1996 -- -- 1,160 -- -- -- 1,160
Stock options exercised -- 4 -- -- -- -- 4
Unrealized increase in market value of assets
available for sale (net of income taxes) -- -- -- -- -- 130 130
Amortization of deferred compensation -Employee
Stock Ownership Plan and Recognition and
Retention Plan -- 35 -- 147 46 -- 228
Dividends declared -- -- (459) -- -- -- (459)
------------------------------------------------------------------------------
Balance - December 31, 1996 5,090 29,920 44,603 (1,818) (608) (1,068) 76,119
Net income for the year ended December 31, 1997 -- -- 5,356 -- -- -- 5,356
Stock options exercised 5 45 -- -- -- -- 50
Unrealized increase in market value of assets
available for sale (net of income taxes) -- -- -- -- -- 914 914
Amortization of deferred compensation -Employee
Stock Ownership Plan and Recognition and
Retention Plan -- 313 -- 394 185 -- 892
Dividends declared -- -- (2,072) -- -- -- (2,072)
------------------------------------------------------------------------------
Balance - December 31, 1997 5,095 30,278 47,887 (1,424) (423) (154) 81,259
------------------------------------------------------------------------------
Net income for the six months ended June 30,
1998 (Unaudited) -- -- 2,511 -- -- -- 2,511
Stock options exercised (Unaudited) 5 45 -- -- -- -- 50
Unrealized decrease in market value of assets
available for sale (net of income taxes)
(Unaudited) -- -- -- -- -- (279) (279)
Amortization of deferred compensation -Employee
Stock Ownership Plan and Recognition and
Retention Plan (Unaudited) -- 298 -- 197 93 -- 588
Dividends declared (Unaudited) -- -- (1,051) -- -- -- (1,051)
------------------------------------------------------------------------------
Balance - June 30, 1998 (Unaudited) $5,100 $30,621 $49,347 $(1,227) $ (330) $ (433) $83,078
------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE> 153
<TABLE>
<CAPTION>
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------------------------
For the For the For the Three For the
Six Months Year Months Years
Ended Ended Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from (for) operating activities:
Net income $ 2,511 $ 2,735 $ 5,356 $ 1,160 $ 3,915 $ 4,574
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation 720 677 1,503 329 1,304 1,353
Employee Stock Ownership Plan and Recognition
and Retention Plan compensation expense 588 371 892 228 686 422
Deferred income tax provision (144) (56) (112) 631 (1,056) (363)
Accretion of discounts, amortization of premiums,
and other deferred yield items (1,531) (766) (1,915) (396) (1,494) (1,497)
Provision for losses on other assets -- -- -- -- 200 --
Provision for loan losses 213 83 264 243 98 240
Provision for losses and net (gains) losses
on sales of real estate owned (15) (2) (173) -- (67) (102)
Amortization of discount on mortgage-backed bond 243 246 490 123 496 498
Net (gain) loss on sale and early maturities of:
Securities available for sale -- -- 8 (51) -- --
Loans and other assets 1 (14) (16) (10) 208 4
Gain on early maturity of investment -- -- -- -- (254) --
Decrease (increase) in accrued interest receivable 437 (526) (808) (146) (65) (1,181)
(Increase) decrease in other assets (1,494) (1,967) (3,186) 327 (609) 473
Decrease (increase) in loans available for sale -- (10) 70 137 109 (316)
Increase (decrease) in other liabilities (1,024) 526 1,347 (3,851) 4,424 85
------- ------- ------- ------ ------- -------
Net cash provided by (used for) operating
activities 505 1,297 3,720 (1,276) 7,895 4,190
------- ------- ------- ------ ------- -------
Cash flows from (for) investing activities:
Loan originations and principal payments on
loans - net (37,633) (18,406) (38,694) (11,257) (34,182) (10,825)
Principal payments received on mortgage-backed
and related securities and securities
available for sale 17,004 6,389 14,422 2,840 11,454 5,286
Principal payments received on investments - held
to maturity 743 939 1,825 475 2,671 2,694
Purchases of:
Loans (38,307) (2,590) (24,455) (1,998) (16,775) (2,728)
Mortgage-backed and related securities -- -- -- -- (6,103) (41,549)
Investments - held to maturity -- -- -- -- -- (30,085)
Federal Home Loan Bank stock (518) (399) (400) -- -- --
Securities available for sale -- (41,309) (46,311) -- (67,641) --
Office property and equipment (2,674) (2,756) (5,300) (344) (1,481) (1,805)
Proceeds from sales of:
Securities available for sale -- -- 2,435 100 749 --
Federal Home Loan Bank stock -- -- -- 2,520 2,000 --
Office property and equipment 1 78 128 178 443 25
Real estate acquired in settlement of loans 522 189 1,551 -- 767 3,130
Loans purchased -- -- 3,452 --
Proceeds from calls or maturities of investments-held
to maturity and securities available for sale 38,381 12,300 19,300 -- 22,012 21,000
Investment in real estate venture -- (27) -- 156 1,305 1,588
Other investing 65 (103) (351) (184) (455) 148
------- ------- ------- ------ ------- -------
Net cash used for investing activities (22,416) (45,695) (75,850) (7,514) (81,694) (53,121)
------- ------- ------- ------ ------- -------
</TABLE>
Continued on next page
F-6
<PAGE> 154
<TABLE>
<CAPTION>
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
For the For the For the Three For the
Six Months Year Months Years
Ended Ended Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from (for) financing activities:
Net increase (decrease) in
NOW accounts, demand deposits, and savings accounts 17,571 3,445 17,591 3,112 (1,200) (34,139)
Certificates of deposit 6,104 23,379 19,408 11,668 62,753 41,868
Stock subscriptions applied or returned -- -- -- -- -- (55,716)
Advances from Federal Home Loan Bank 22,000 15,000 30,000 -- 22,500 19,000
Repayment of advances from Federal Home Loan Bank (3,711) (3,711) (7,425) (1,587) (4,350) (800)
Advances by borrowers for taxes and insurance 4,536 3,776 (128) (5,802) (136) 99
Employee Stock Ownership Plan loan (1,424) (196) (491) (149) (493) 2,557
Purchases of Employee Stock Ownership Plan shares -- -- -- -- -- (2,753)
Sale of common stock-net of issuance costs -- -- 13 33,758
Proceeds from exercise of stock options 50 -- 50 4 -- --
Payments made on mortgage-backed bond (693) (694) (1,387) (346) (1,387) (1,387)
Dividends paid (1,051) (973) (1,976) (448) (1,618) (902)
-------- -------- -------- -------- -------- --------
Net cash provided by financing activities 43,382 40,026 55,642 6,452 76,082 1,585
-------- -------- -------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents 21,471 (4,372) (16,488) (2,338) 2,283 (47,346)
Cash and cash equivalents, beginning of period 25,954 42,442 42,442 44,780 42,497 89,843
-------- -------- -------- -------- -------- --------
Cash and cash equivalents, end of period $ 47,425 $ 38,070 $ 25,954 $ 42,442 $ 44,780 $ 42,497
======== ======== ======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-7
<PAGE> 155
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997, THE YEAR ENDED DECEMBER 31,
1997, THE THREE MONTHS ENDED DECEMBER 31, 1996, AND THE YEARS ENDED SEPTEMBER
30, 1996 AND 1995
(Information at June 30, 1998 and 1997 and for the six months then ended is
unaudited.)
1. SIGNIFICANT ACCOUNTING POLICIES
On September 30, 1997, Community Savings, F. A. (the "Association")
completed its reorganization into the two-tier form of mutual holding
company ownership. Pursuant to the reorganization, the Association is now
the wholly owned subsidiary of the newly-formed, federally chartered
mid-tier stock holding company, Community Savings Bankshares, Inc.
("Bankshares"). Bankshares is the majority owned subsidiary of ComFed, M.
H. C. (the "MHC"). The MHC, Bankshares, and the Association are chartered
and regulated by the Office of Thrift Supervision ("OTS").
The reorganization was accounted for in a manner similar to a pooling of
interests and did not result in any significant accounting adjustments.
The Bankshares' only significant asset is the common stock of the
Association. Consequently, the majority of its net income is derived from
the Association.
The accounting and reporting policies of Bankshares, the Association, and
the Association's wholly-owned subsidiary conform to generally accepted
accounting principles and to general practices within the savings and loan
industry. The following summarizes the more significant of these policies
and practices:
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of Bankshares, the Association and the Association's
wholly-owned subsidiary, ComFed, Inc. ComFed, Inc. was formed for the
purpose of owning and operating an insurance agency, Community Insurance
Agency. Prior to December 31, 1996, the Association had three other
wholly-owned subsidiaries, ComFed Development Co., which was engaged in
real estate development activities under joint venture arrangements with
local developers, Select Florida Properties, Inc. and Select Florida
Properties II, Inc., which were formed to acquire and sell foreclosed
assets as well as hold delinquent loans. These subsidiaries were dissolved
into ComFed, Inc. All significant intercompany balances and transactions
have been eliminated.
CHANGE IN YEAR END - During January 1997, the Board of Directors voted to
change the fiscal year end for all related entities from September 30th to
December 31st, effective with the year and three months ending December
31, 1996.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and that affect the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from
those estimates.
CASH AND CASH EQUIVALENTS - For presentation purposes in the consolidated
financial statements, The Association considers all highly liquid debt
instruments purchased with an original maturity of three months or less to
be cash equivalents.
INVESTMENTS - HELD TO MATURITY - Investments - held to maturity are
carried at cost, adjusted for amortization of premiums and accretion of
discounts using the interest method. The Association has the intent and
ability to hold these securities to maturity.
SECURITIES AVAILABLE FOR SALE - Securities available for sale are carried
at fair value. In accordance with Statement of Financial Accounting
Standards No. 115 "Accounting for Certain Investments in Debt and Equity
Securities", ("SFAS No.115") unrealized gains or losses related to
securities available for sale are excluded from earnings and reported as
a net amount as a separate component of shareholders' equity. Gains and
losses on sales of securities available for sale are computed using the
specific identification method.
MORTGAGE-BACKED AND RELATED SECURITIES - HELD TO MATURITY -
Mortgage-backed and related securities - held to maturity are carried at
cost, adjusted for amortization of premiums and accretion of discounts
using the interest method. The Association has the intent and ability to
hold these securities to maturity.
F-8
<PAGE> 156
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTEREST RATE RISK - The Association is engaged principally in providing
first mortgage loans (adjustable-rate, fixed-rate and hybrid-rate) to
individuals and commercial enterprises. At June 30, 1998, December 31,
1997 and 1996 and September 30, 1996, the Association's assets consisted
primarily of assets that earned interest at adjustable interest rates.
Those assets were funded primarily with short-term liabilities that have
interest rates that vary with market rates over time.
PROVISIONS FOR LOSSES - Provisions for losses, which increase the
allowances for loan losses and real estate losses, are established by
charges to income. Such allowances represent the amounts which, in
management's judgment, are adequate to absorb charge-offs of both existing
loans which may become uncollectable and for declines in the fair value of
real estate owned. The adequacy of the allowances are determined by
management's monthly evaluation of the loan and real estate owned
portfolios in light of past loss experience, present economic conditions
and other factors considered relevant by management. Anticipated changes
in economic factors which may influence the level of the allowances are
considered in the evaluation by management when the likelihood of the
changes can be reasonably determined.
On October 1, 1995, Bankshares adopted SFAS No. 114 "Accounting by
Creditors for Impairment of a Loan", ("SFAS No. 114") and SFAS No. 118
"Accounting by Creditors for Impairment of a Loan - Recognition and
Disclosures", ("SFAS No. 118") an amendment of SFAS No. 114. These
standards address the accounting for impairment of certain loans when it
is probable that all amounts due pursuant to the contractual terms of the
loan will not be collected. Adoption of these standards included the
identification of commercial business and commercial real estate loans
which are considered impaired under the provisions of SFAS No. 114. Groups
of smaller-balance homogeneous loans (generally residential mortgage and
consumer installment and other loans) are collectively evaluated for
impairment. Adoption of these statements did not have a material impact on
Bankshares' financial position or results of operations.
Under the provisions of these standards, a loan is impaired when, based on
current information and events, it is probable that a creditor will be
unable to collect all amounts due according to the contractual terms of
the loan agreement. Individually identified impaired loans are measured
based on the present value of payments expected to be received, using the
historical effective loan rates as the discount rate. Alternatively,
measurement may also be based on observable market prices, or for loans
that are solely dependent on the collateral for repayment, measurement may
be based on the fair value of the collateral. Loans that are to be
foreclosed are measured based on the fair value of the collateral. If the
recorded investment in the impaired loan exceeds the measure of fair
value, a valuation allowance is required as a component of the allowance
for loan losses. Changes to the valuation allowance are recorded as a
component of the provision for loan losses.
UNCOLLECTED INTEREST - The Association reverses accrued interest on
mortgage loans which are more than ninety days past due or if management
determines at an earlier date that the loan is not performing and ceases
accruing interest on such loans thereafter. Any such interest ultimately
collected is credited to income in the period of recovery.
OFFICE PROPERTIES AND EQUIPMENT - Office properties and equipment are
carried at cost less accumulated depreciation. Depreciation is computed on
the straight-line method over the estimated useful lives of the assets
which range from 13 to 50 years for buildings, executed lease terms for
leasehold improvements, and from 3 to 10 years for furniture and
equipment.
LOANS HELD FOR SALE - Mortgage loans originated and intended for sale in
the secondary market are carried at the lower of cost or estimated fair
value determined on an aggregate loan basis. Net unrealized losses are
recognized in a valuation allowance by charges to income.
REAL ESTATE OWNED - Real estate owned is recorded at cost which is the
estimated fair value of the property at the time the loan is foreclosed.
Subsequent to foreclosure, these properties are carried at the lower of
cost or fair value minus estimated costs to sell. Provisions for losses on
real estate owned are summarized in Note 9.
The amounts the Association could ultimately recover from real estate
owned could differ materially from the amounts used in arriving at the net
carrying value of the assets because of future market factors beyond its
control or changes in its strategy for recovering its investment.
F-9
<PAGE> 157
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LIMITED PARTNERSHIP INVESTMENTS IN QUALIFIED AFFORDABLE HOUSING PROJECTS
The Association has an approximate 4% limited partner interest in three
separate real estate partnerships that operate qualified affordable
housing projects. The Association receives tax benefits from the
partnerships in the form of tax deductions from operating losses and tax
credits. The Association accounts for its investments in the partnerships
on the effective yield method and is amortizing the cost over the
estimated life of the partnerships (15 years). The amortized cost of the
investments at June 30, 1998 and December 31, 1997 is $4.5 million and
$3.0 million, respectively, and is included in other assets. Amortization
for the six months ended June 30, 1998 and the year ended December 31,
1997 was $140,000 and $147,000, respectively and is included in
miscellaneous income. In addition to the tax benefit related to the
amortization, tax credits of $174,000 and $197,000, respectively were
recognized during the six months ended June 30, 1998 and the year ended
December 31, 1997 as a reduction of the provision for income taxes.
LOAN FEES - Loan origination fees and certain direct incremental costs
related to such loans are deferred. Net deferred loan fees are amortized
to income using the interest method over the contractual life of the loan.
Unamortized net loan fees on loans sold prior to maturity are credited to
income as an adjustment to the gain or loss at the time of sale.
PREMIUMS AND DISCOUNTS ON LOANS - Unearned discounts on home improvement
loans and other installment loans are amortized to income over the terms
of the related loans using the interest method. Premiums and discounts on
loans purchased are amortized to income using the interest method.
INCOME TAXES - Bankshares, the Association and ComFed, Inc. file
consolidated federal and state income tax returns. Income taxes are
allocated proportionately to each entity as though separate tax returns
were being filed.
Deferred income taxes are provided on items recognized for financial
reporting purposes in periods different than such items are recognized for
income tax purposes in accordance with the provisions of SFAS No. 109,
"Accounting for Income Taxes" ("SFAS No.109").
EARNINGS PER SHARE - Earnings per share are determined in accordance with
the provisions of SFAS No. 128 "Earnings per Share" ("SFAS No. 128")
issued in February 1997. The weighted average number of shares of common
stock used in calculating basic earnings per share was determined by
reducing outstanding shares by unallocated Employee Stock Ownership
("ESOP") shares and unvested Recognition and Retention Plan ("RRP")
shares. Diluted earnings per share includes the maximum dilutive effect of
stock issuable upon exercise of common stock options. The effect of stock
options on weighted average shares outstanding are calculated using the
treasury stock method. All prior period earnings per share data has been
restated in accordance with SFAS No. 128.
IMPACT OF NEW ACCOUNTING ISSUES - In June 1997, the FASB issued SFAS No.
130 "Reporting Comprehensive Income" ("SFAS No. 130"), which requires that
an enterprise report, by major components and as a single total, the
change in its net assets during the period from non-owner sources; and
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"), which establishes annual and interim
reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas, and major
customers. Adoption of these statements will not impact Bankshares'
consolidated financial position, results of operations, or cash flows, and
any effect will be limited to the form and content of its disclosures.
SFAS No. 130 is effective for fiscal years beginning after December 15,
1997 and is applicable to interim periods. SFAS No. 130 has been adopted
in the accompanying financial statements for all periods presented. SFAS
No. 131 is also effective for fiscal years beginning after December 15,
1997, but need not be applied to interim financial statements in the
initial year of application.
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No. 133"), issued June 1998, must be adopted by the
Bankshares as of January 1, 2000. This Statement establishes accounting
and reporting standards for derivative financial instruments and for
hedging activities. Upon adoption of the Statement, all derivatives must
be recognized at fair value as either assets or liabilities in the
statement of financial position. Changes in the fair value of derivatives
not designated as hedging instruments are to be recognized currently in
earnings. Gains or losses on derivatives designated as hedging instruments
are either to be recognized currently in earnings or are to be recognized
as a component of other comprehensive income, depending on the intended
use of the derivatives and the resulting designations. Upon adoption,
retroactive application of this Statement to financial statements of prior
periods is not permitted. Bankshares is currently in the process of
evaluating the impact of SFAS No. 133 on its consolidated financial
position and results of operations.
RECLASSIFICATIONS - Certain amounts in the 1996 and 1995 consolidated
financial statements have been reclassified to conform to the presentation
for 1997.
F-10
<PAGE> 158
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SECURITIES AVAILABLE FOR SALE
During the quarter ended December 31, 1995, the Association adopted the
provisions of SFAS No. 115 Questions and Answers Guide ("SFAS No. 115
Q&A") which allowed a one time reclassification of securities from held to
maturity to available for sale between November 15, 1995 and December 31,
1995. Securities totaling $49.5 million were reclassified from held to
maturity to available for sale on December 7, 1995. Such reclassification
resulted in a credit of $247,000 to shareholders' equity. The Association
subsequently sold $749,000 of such securities at no gain or loss.
Securities available for sale at June 30, 1998, December 31, 1997 and 1996
and September 30, 1996 are summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C>
June 30, 1998:
Equity securities $ 7 $ 18 $ -- $ 25
United States Government and agency obligations 9,080 47 -- 9,127
Mutual funds 41,000 35 (483) 40,552
Collateralized mortgage obligations:
Government backed 3,165 2 -- 3,167
Private issue 38,498 234 (287) 38,445
-------- ---- ------- --------
Total collateralized mortgage obligations 41,663 236 (287) 41,612
-------- ---- ------- --------
Total securities available for sale $ 91,750 $336 $ (770) $ 91,316
======== ==== ======= ========
Weighted average interest rate 6.35%
========
December 31, 1997:
Equity securities $ 7 $ 16 $ -- $ 23
United States Government and agency obligations 54,937 258 (20) 55,175
Mutual funds 41,000 58 (337) 40,721
Collateralized mortgage obligations:
Government backed 3,300 30 -- 3,330
Private issue 43,113 245 (338) 43,020
-------- ---- ------- --------
Total collateralized mortgage obligations 46,413 275 (338) 46,350
-------- ---- ------- --------
Total securities available for sale $142,357 $607 $ (695) $142,269
======== ==== ======= ========
Weighted average interest rate 6.52%
========
December 31, 1996:
Equity securities $ 7 $ 7 $ -- $ 14
United States Government and agency obligations 28,247 55 (205) 28,097
Mutual funds 43,443 29 (405) 43,067
Collateralized mortgage obligations:
Government backed 3,601 -- (7) 3,594
Private issue 49,345 147 (1,112) 48,380
-------- ---- ------- --------
Total collateralized mortgage obligations 52,946 147 (1,119) 51,974
-------- ---- ------- --------
Total securities available for sale $124,643 $238 $(1,729) $123,152
======== ==== ======= ========
Weighted average interest rate 6.60%
========
September 30, 1996:
Equity securities $ 57 $ 58 $ -- $ 115
United States Government and agency obligations 28,238 31 (327) 27,942
Mutual funds 43,443 5 (536) 42,912
Collateralized mortgage obligations:
Government backed 3,677 -- (7) 3,670
Private issue 50,513 239 (1,104) 49,648
-------- ---- ------- --------
Total collateralized mortgage obligations 54,190 239 (1,111) 53,318
-------- ---- ------- --------
Total securities available for sale $125,928 $333 $(1,974) $124,287
======== ==== ======= ========
Weighted average interest rate 6.60%
========
</TABLE>
F-11
<PAGE> 159
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Proceeds from the sale of securities available for sale were $0, $0,
$2,435,000, $100,000, $749,000 and $0 during the six months ended June 30,
1998 and 1997, the year ended December 31, 1997, the three months ended
December 31, 1996, and the years ended September 30, 1996 and 1995,
respectively. For the year ended December 31, 1997, sales resulted in
gross losses of $ 8,000. For the three months ended December 31, 1996,
sales resulted in gross gains of $51,000. There were no gross realized
gains or losses during the six months ended June 30, 1998 and 1997, and
the years ended September 30, 1996 and 1995.
The fair value of securities available for sale is based on quoted market
prices.
3. INVESTMENTS - HELD TO MATURITY
Investments - held to maturity at June 30, 1998, December 31, 1997 and
1996 and September 30, 1996 are summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C>
June 30, 1998:
United States Government and agency obligations $13,820 $ 3,897 $ (94) $17,623
Corporate debt issues:
Chase Federal mortgage-backed bond 6,646 293 -- 6,939
Auto Bond Receivables Corp. 977 -- -- 977
------- ------- ------- -------
Total corporate debt issues 7,623 293 -- 7,916
------- ------- ------- -------
Total investment securities $21,443 $ 4,190 $ (94) $25,539
======= ======= ======= =======
Weighted average interest rate 8.94%
=======
December 31, 1997:
United States Government and agency obligations $13,039 $ 3,891 $ -- $16,930
Corporate debt issues:
Chase Federal mortgage-backed bond 6,856 311 -- 7,167
Auto Bond Receivables Corp. 1,493 -- (5) 1,488
------- ------- ------- -------
Total corporate debt issues 8,349 311 (5) 8,655
------- ------- ------- -------
Total investment securities $21,388 $ 4,202 $ (5) $25,585
======= ======= ======= =======
Weighted average interest rate 9.29%
=======
December 31, 1996:
United States Government and agency obligations $11,701 $ 3,807 $ -- $15,508
Municipal obligations 300 1 -- 301
Corporate debt issues:
Chase Federal mortgage-backed bond 7,236 347 -- 7,583
Auto Bond Receivables Corp. 2,902 8 (36) 2,874
------- ------- ------- -------
Total corporate debt issues 10,138 355 (36) 10,457
------- ------- ------- -------
Total investment securities $22,139 $ 4,163 $ (36) $26,266
======= ======= ======= =======
Weighted average interest rate 8.63%
=======
September 30, 1996:
United States Government and agency obligations $11,391 $ 3,431 $ -- $14,822
Municipal obligations 300 4 -- 304
Corporate debt issues:
Chase Federal mortgage-backed bond 7,320 359 -- 7,679
Auto Bond Receivables Corp. 3,282 8 (2) 3,288
------- ------- ------- -------
Total corporate debt issues 10,602 367 (2) 10,967
------- ------- ------- -------
Total investment securities $22,293 $ 3,802 $ (2) $26,093
======= ======= ======= =======
Weighted average interest rate 8.72%
=======
</TABLE>
F-12
<PAGE> 160
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The table below sets forth the contractual maturity distribution of the
investments - held to maturity at June 30, 1998, December 31, 1997 and
1996 and September 30, 1996.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
June 30, 1998 December 31, 1997 December 31, 1996 September 30, 1996
Carrying Fair Carrying Fair Carrying Fair Carrying Fair
Value Value Value Value Value Value Value Value
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Due in one year or less $ 1,324 $ 1,372 $ 1,251 $ 1,334 $ 300 $ 301 $ 300 $ 304
Due after one year through
five years 977 977 1,493 1,488 4,030 4,131 4,379 4,517
Due after five years through
ten years 12,496 16,251 11,283 14,945 10,111 13,675 9,843 13,049
Due after ten years 6,646 6,939 7,361 7,818 7,698 8,159 7,771 8,223
------- ------- ------- ------- ------- ------- ------- -------
Total $21,443 $25,539 $21,388 $25,585 $22,139 $26,266 $22,293 $26,093
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
There were no sales of investment securities - held to maturity during the
six months ended June 30, 1998 and 1997, the year ended December 31, 1997,
the three months ended December 31, 1996, or the years ended September 30,
1996 and 1995. The fair value of investment securities is based on quoted
market prices.
Federal Home Loan Bank Stock - At June 30, 1998, December 31, 1997 and
1996 and September 30, 1996, the Association held $3,782,000, $3,264,000,
$2,864,000 and $5,384,000, respectively, of FHLB Stock, which approximates
fair value. FHLB Stock is not readily marketable as it is not traded on a
registered security exchange.
F-13
<PAGE> 161
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. MORTGAGE-BACKED AND RELATED SECURITIES - HELD TO MATURITY
Mortgage-backed and related securities - held to maturity at June 30,
1998, December 31, 1997 and 1996 and September 30, 1996 are summarized as
follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
June 30, 1998:
FHLMC $ 6,324 $ 48 $ (50) $ 6,322
GNMA - pass throughs 1,525 54 (7) 1,572
FNMA - pass throughs 2,925 11 -- 2,936
Agency for International Development - pass throughs 212 -- -- 212
Collateralized mortgage obligations:
Government-backed 10,046 235 (15) 10,266
Private issue 20,846 223 (23) 21,046
------- ------- ------- -------
Total collateralized mortgage obligations 30,892 458 (38) 31,312
CMO residual interest bonds 6 -- -- 6
------- ------- ------- -------
Total mortgage-backed and related securities $41,884 $ 571 $ (95) $42,360
======= ======= ======= =======
December 31, 1997:
FHLMC $ 7,465 $ 62 $ (85) $ 7,442
GNMA - pass throughs 1,751 63 -- 1,814
FNMA - pass throughs 3,316 11 (10) 3,317
Agency for International Development - pass throughs 236 -- -- 236
Collateralized mortgage obligations:
Government-backed 10,872 344 -- 11,216
Private issue 22,766 273 (133) 22,906
------- ------- ------- -------
Total collateralized mortgage obligations 33,638 617 (133) 34,122
CMO residual interest bonds 7 -- -- 7
------- ------- ------- -------
Total mortgage-backed and related securities $46,413 $ 753 $ (228) $46,938
======= ======= ======= =======
December 31, 1996:
FHLMC $ 9,673 $ 79 $ (143) $ 9,609
GNMA - pass throughs 2,108 74 -- 2,182
FNMA - pass throughs 3,933 -- (13) 3,920
Agency for International Development - pass throughs 317 -- -- 317
Collateralized mortgage obligations:
Government-backed 12,229 526 (8) 12,747
Private issue 25,130 300 (340) 25,090
------- ------- ------- -------
Total collateralized mortgage obligations 37,359 826 (348) 37,837
CMO residual interest bonds 15 -- -- 15
------- ------- ------- -------
Total mortgage-backed and related securities $53,405 $ 979 $ (504) $53,880
======= ======= ======= =======
September 30, 1996:
FHLMC $ 9,973 $ 73 $ (269) $ 9,777
GNMA - pass throughs 2,233 79 (14) 2,298
FNMA - pass throughs 4,076 2 (140) 3,938
Agency for International Development - pass throughs 335 -- -- 335
Collateralized mortgage obligations:
Government-backed 12,763 510 (34) 13,239
Private issue 25,545 353 (517) 25,381
------- ------- ------- -------
Total collateralized mortgage obligations 38,308 863 (551) 38,620
CMO residual interest bonds 20 -- -- 20
------- ------- ------- -------
Total mortgage-backed and related securities $54,945 $ 1,017 $ (974) $54,988
======= ======= ======= =======
</TABLE>
F-14
<PAGE> 162
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
There were no sales of mortgage-backed and related securities - held to
maturity during the six months ended June 30, 1998, the year ended
December 31, 1997, the three months ended December 31, 1996, and the years
ended September 30, 1996 and 1995. The fair value of mortgage-backed and
related securities is based on quoted market prices.
Mortgage-backed securities represent participating interest in pools of
long-term first mortgage loans. Although mortgage-backed securities are
initially issued with a stated maturity date, the underlying mortgage
collateral may be prepaid by the mortgagee and, therefore, such
certificates may not reach their maturity date.
The Association also invests in mortgage-related securities such as
collateralized mortgage obligations ("CMOs"), CMO residual interest bonds,
and real estate investment conduits ("REMICs"). These securities are
generally divided into tranches whereby principal repayments from the
underlying mortgages are used sequentially to retire the securities
according to the priority of the tranches. The Association invests
primarily in senior sequential tranches of CMOs. Such tranches have stated
maturities ranging from 6.5 years to 30 years; however, because of
prepayments, the expected weighted average life of these securities is
less than the stated maturities. At June 30, 1998 and December 31, 1997,
the Association had $30,892,000 and $33,638,000, respectively, in such
mortgage-related securities, which were held for investment and had a
market value of $31,312,000 and $34,122,000, respectively. Fixed-rate CMOs
have coupon rates ranging from 6.0% to 12.0%. Variable-rate CMOs are
indexed to the London Interbank Offered Rate ("LIBOR") or the Ten-Year
Treasury Index, and the residual tranches do not have a stated coupon. The
weighted average yield of the CMO securities was 6.89% at June 30, 1998.
The residual interest is in a CMO in which at least one class of bonds has
a variable interest rate. In these investments, a rise in the
variable-rate index reduces the cash flows available to the residual
owner. Conversely, in a low interest rate environment, collateral
prepayments will usually accelerate. The Association's ability to recover
its investment in the CMO residuals is dependent on the future outcome of
the above factors. At June 30, 1998 and December 31, 1997, the
Association's interest in CMO residual bonds was $6,000 and $6,500,
respectively, with a market value of $6,000 and $6,500, respectively.
5. LOANS RECEIVABLE
Loans receivable consisted of the following:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Real estate loans:
Residential 1-4 family $419,069 $339,117 $293,296 $284,267
Residential 1-4 family held for sale
(at lower of cost or estimated fair value) - - 70 207
Residential construction loans 42,807 32,828 33,158 33,520
Nonresidential construction loans 4,217 2,022 2,200 2,200
Land loans 12,409 17,117 19,426 16,846
Multi-family loans 8,739 8,800 8,096 8,153
Commercial 46,147 59,220 37,815 38,433
-------- -------- -------- --------
Total real estate loans 533,388 459,104 394,061 383,626
-------- -------- -------- --------
Non-real estate loans:
Consumer loans 15,191 15,694 16,028 15,606
Commercial business 5,508 3,530 2,458 1,874
-------- -------- -------- --------
Total non-real estate loans 20,699 19,224 18,486 17,480
-------- -------- -------- --------
Total loans receivable 554,087 478,328 412,547 401,106
Less:
Undisbursed loan proceeds 25,134 24,163 20,765 22,318
Unearned discount (premium) and
net deferred loan fees (costs) (1,189) (206) 200 257
Allowance for loan losses 2,767 2,662 2,542 2,312
-------- -------- -------- --------
Total loans receivable, net $527,375 $451,709 $389,040 $376,219
======== ======== ======== ========
</TABLE>
The Association's lending market is concentrated in Palm Beach, Martin, St.
Lucie, and Indian River Counties in Florida.
F-15
<PAGE> 163
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Non accrual loans consisted of the following:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
At or for the
At or for the At or for the Three Months At or for the
Six Months Ended Year Ended Ended Years Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
-----------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Principal balance of loans not
accruing interest $1,366 $1,466 $1,379 $1,631 $842 $662
Interest not accrued related to
above loans 63 98 86 65 44 49
</TABLE>
An analysis of the changes in the allowance for loan losses for the year
ended December 31, 1997, the three months ended December 31, 1996 and the
years ended September 30, 1996, and 1995 is as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
For the Six Months Ended For the Year For the Three For the Years Ended
June 30, Ended Months Ended September 30,
1998 1997 December 31, 1997 December 31, 1996 1996 1995
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance, beginning of period $2,662 $2,542 $2,542 $2,312 $3,492 $3,390
Provision charged to income 213 83 264 243 98 240
Losses charged to allowance (108) (23) (144) (13) (1,278) (138)
Recoveries -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Balance, end of year $2,767 $2,602 $2,662 $2,542 $2,312 $3,492
====== ====== ====== ====== ====== ======
</TABLE>
During the year ended September 30, 1996, the Association sold its
interest in a note with a net carrying value of $3,453,000. Included in
the allowance for loan losses at September 30, 1995 was a $1,200,000
specific reserve related to such interest. In connection with the sale,
the Association recorded an additional loss of $217,000.
Loans Held for Sale - The Association originates both adjustable- and
fixed-rate loans. The adjustable- and fixed-rate loans with original
maturities of 15 years or less are held in the Association's portfolio.
Based on management's assessment of current portfolio mix and Board of
Director established limits, fixed-rate loans with maturities greater than
15 years are either held in the portfolio or sold when originated, except
those originated for special financing on low income housing. Included in
loans receivable at June 30, 1998, December 31, 1997 and 1996 and
September 30, 1996 are $0, $0, $70,000 and $207,000, respectively, of
loans held for sale.
Loans Serviced for Others - Mortgage loans serviced for others are not
included in the accompanying consolidated statements of financial
condition. The unpaid balances of these loans at June 30, 1998, December
31, 1997 and 1996 and September 30, 1996 and 1995 were $16,331,000,
$18,967,000, $21,761,000, $22,466,000 and $26,466,000, respectively.
Custodial escrow balances maintained in connection with the foregoing loan
servicing were $295,000, $47,000, $57,000 and $497,000 and $600,000,
respectively.
Rate Composition of Loans - The Association originates and purchases both
adjustable- and fixed-rate loans. At June 30, 1998 and December 31, 1997,
fixed-rate loans totaled $300,872,000 and $178,630,000, respectively, and
adjustable-rate loans totaled $253,215,000 and $273,079,000, respectively.
The adjustable-rate loans have interest rate adjustment limitations and
are indexed to the OTS National Monthly Median Cost of Funds, the U. S.
Treasury Weekly Average Yield index, or the prime rate. Future market
factors may affect the correlation of the interest rate adjustment with
the rates the Association pays on the short-term deposits that have been
primarily utilized to fund those loans.
F-16
<PAGE> 164
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commercial Real Estate Lending - The Association originates and purchases
commercial real estate and construction loans, which totaled $50,364,000,
$61,242,000, $40,015,000 and $40,633,000 at June 30, 1998, December 31,
1997 and 1996 and September 30, 1996, respectively. These loans are
considered by management to be of a somewhat greater risk of
collectibility due to the dependency on income production or future
development of the real estate. Accordingly, the Association's management
establishes a greater provision for probable, but not yet identified,
losses on these loans than on less risky residential mortgage loans. The
composition of commercial real estate loans and its primary collateral at
June 30, 1998, December 31, 1997 and 1996 and September 30, 1996 are
approximately as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
---------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Commercial land $ 3,834 $ 6,037 $ 451 $ 120
Office buildings 4,688 4,614 4,598 4,583
Hotel property 277 210 2,439 4,310
Shopping centers 3,005 3,124 3,262 3,293
Light industrial and warehouses 7,677 9,243 7,265 7,444
Churches 5,625 5,733 5,468 4,433
Other commercial 21,041 30,259 14,332 14,250
------- ------- ------- -------
Total commercial real estate 46,147 59,220 37,815 38,433
Commercial construction projects 4,217 2,022 2,200 2,200
------- ------- ------- -------
Total commercial real estate and construction loans $50,364 $61,242 $40,015 $40,633
======= ======= ======= =======
</TABLE>
Under the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 ("FIRREA"), a federally chartered savings and loan association's
aggregate commercial real estate loans may not exceed 400% of its capital
as determined under the capital standards provisions of FIRREA. The
Association is federally chartered and subject to this limitation. FIRREA
does not require divestiture of any loan that was lawful when it was
originated. At June 30, 1998 and December 31, 1997, management estimates
that, while remaining in compliance with this limitation, the Association
could have originated an additional $242,868,000 and $218,950,000,
respectively, of commercial real estate loans, but has no immediate plans
to do so.
Loans to One-Borrower Limitation - Under FIRREA, the Association may not
make real estate loans to one borrower in excess of 15% of its unimpaired
capital and surplus. This 15% limitation results in a dollar limitation of
approximately $10,996,000 and $10,507,000 at June 30, 1998 and December
31, 1997, respectively. At June 30, 1998 and December 31, 1997, the
Association met the loans to one borrower limitation under current
regulations.
Loans to Officers and Directors - The Association offers loans to its
employees, including directors and senior management, at prevailing market
interest rates. For adjustable-rate loans, employees are offered a 50
basis point reduction from the margin. The Association waives the points
charged for employee loans. However, directors and senior management pay
points based on current loan terms. These loans are made in the ordinary
course of business and on substantially the same terms and collateral
requirements as those of comparable transactions prevailing at the time.
The total loans to such persons did not exceed 5% of retained earnings at
June 30, 1998 and December 31, 1997. At June 30, 1998 and December 31,
1997, the total of loans to directors, executive officers, and associates
of such persons was $944,000 and $433,000, respectively.
Troubled Debt Restructuring - Included in loans receivable at June 30,
1998, December 31, 1997 and 1996 and September 30, 1996 are loans
considered to be troubled debt restructured with an aggregate recorded
investment of $0, $1,044,000, $1,071,000 and $1,081,000, respectively.
Included in interest income is interest on these loans which totaled $0,
$46,000, $91,000, $24,000, $94,000, and $69,000 for the six months ended
June 30, 1998 and 1997, the year ended December 31, 1997, the three months
ended December 31, 1996, and the years ended September 30, 1996 and 1995,
respectively.
F-17
<PAGE> 165
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Impaired Loans - Impaired loans owned by the Association have been
recognized in conformity with SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan" as amended by SFAS No. 118, "Accounting by Creditors
for Impairment of a Loan-Income Recognition and Disclosures" as of October
1, 1995. A loan is impaired when, based on current information and events,
it is probable that a creditor will be unable to collect all amounts due
according to the contractual terms of the loan agreement. A loan is not
necessarily impaired during an insignificant delay or insignificant
shortfall in the amount of payments.
An analysis of the recorded investment in impaired loans is as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
At or for the At or for the At or for the At or for the
Six Months Ended Year Ended Three Months Ended Years Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Impaired loan balance $ -- $1,056 $1,044 $1,071 $1,081 $6,244
Related allowance -- 252 252 252 252 1,452
Average impaired loan
balance 522 1,050 1,057 1,076 4,046 5,597
Interest income recognized -- 46 91 24 94 69
</TABLE>
The Association's policy on interest income on impaired loans is to
reverse all accrued interest against interest income if a loan becomes
more than 90 days delinquent or if management determines at an earlier
date that the loan is not performing and ceases accruing interest
thereafter. Such interest ultimately collected is credited to income in
the period of recovery. Cash receipts for impaired loans are used first to
satisfy any outstanding interest due, and any amounts remaining are
applied to the outstanding principal balance.
6. PLEDGED ASSETS
In the normal course of doing business the Association is required to
comply with certain collateral requirements.
The following tables set forth amounts of various asset components, as of
June 30, 1998, December 31, 1997 and 1996 and September 30, 1996 which
were pledged as collateral:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Real estate loans (unpaid principal balance) $75,630 $54,018 $31,847 $30,833
FHLB Stock and accrued interest 3,851 3,323 2,916 5,517
------- ------- ------- -------
Total pledged to the FHLB $79,481 $57,341 $34,763 $36,350
======= ======= ======= =======
Other pledged assets:
Deposits of public funds - State of Florida
Mortgage-backed and related securities $21,681 $31,681 $21,681 $21,681
Line of credit - Federal Reserve Bank of Atlanta
United States Government and agency obligations 1,800 1,800 1,800 1,800
Treasury tax and loan deposits
United States Government and agency obligations 300 200 200 200
Mortgage-backed bond
Unpaid principal balance of loans 35,949 31,738 37,395 38,863
------- ------- ------- -------
Total for other pledged assets $59,730 $65,419 $61,076 $62,544
======= ======= ======= =======
</TABLE>
FHLB Advances - The Association has a security agreement with the FHLB which
includes a blanket floating lien that requires the Association to maintain as
collateral for its advances, the Association's FHLB capital stock and first
mortgage loans equal to 100% of the unpaid amount of FHLB advances outstanding.
F-18
<PAGE> 166
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. ACCRUED INTEREST RECEIVABLE
Accrued interest receivable at June 30, 1998, December 31, 1997 and 1996
and September 30, 1996 consisted of the following:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Loans $1,800 $1,404 $ 711 $ 612
Investments 98 106 141 184
Securities available for sale 564 1,372 1,169 979
Mortgage-backed and related securities 263 280 333 433
------ ------ ------ ------
Total accrued interest receivable $2,725 $3,162 $2,354 $2,208
====== ====== ====== ======
</TABLE>
8. OFFICE PROPERTIES AND EQUIPMENT
Office properties and equipment at June 30, 1998, December 31, 1997 and
1996 and September 30, 1996 are summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Land $ 6,684 $ 5,571 $ 3,347 $ 3,317
Buildings and improvements 17,205 16,431 15,623 15,558
Furniture and equipment 16,052 15,268 13,052 12,974
-------- -------- -------- --------
Total 39,941 37,270 32,022 31,849
Less accumulated depreciation (17,784) (17,064) (15,654) (15,490)
-------- -------- -------- --------
Total office properties and equipment - net $ 22,157 $ 20,206 $ 16,368 $ 16,359
======== ======== ======== ========
</TABLE>
9. REAL ESTATE OWNED
Real estate owned at June 30, 1998, December 31, 1997 and 1996 and
September 30, 1996 consisted of the following:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Real estate owned $752 $633 $1,547 $1,476
Less allowance for loss 41 41 92 92
---- ---- ------ ------
Total real estate owned $711 $592 $1,455 $1,384
==== ==== ====== ======
</TABLE>
Changes in allowance for losses on real estate owned were as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
For the Six For the Year For the Three
Months Ended Ended Months Ended For the Years Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance, beginning of period $41 $92 $92 $92 $113 $ 80
Provision charged to income -- -- 4 -- 8 141
Losses charged to allowance -- (43) (55) -- (29) (108)
--- --- --- --- --- ----
Balance, end of period $41 $49 $41 $92 $92 $113
=== === === === === ====
</TABLE>
F-19
<PAGE> 167
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. DEPOSITS
The weighted-average interest rates on deposits at June 30, 1998, December
31, 1997 and 1996 and September 30, 1996 were 4.16%, 4.21%, 4.05% and
4.09%, respectively. Deposit accounts, by type and range of rates at June
30, 1998 and 1997, December 31, 1997 and 1996 and September 30, 1996
consisted of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
June 30, December 31, September 30,
1998 1997 1996 1996
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Account type and rate:
Non-interest-earning checking accounts $ 29,563 $ 24,715 $ 18,627 $ 19,532
NOW, Super NOW and funds transfer accounts 1998,
1997, 1996, and 1995, 1.00% through 1.98% 74,355 69,862 67,076 63,098
Passbook and statement accounts 1998, 1997,
1996, and 1995, 1.73%through 1.98% 32,936 30,221 30,821 30,875
Money market accounts 1998, 1997, 1996, and 1995,
2.27% through 3.40% 84,347 78,832 69,514 69,421
-------- -------- -------- --------
Total non-certificate accounts 221,201 203,630 186,038 182,926
-------- -------- -------- --------
Certificates:
3.00% or less 1,211 1,436 1,035 1,600
3.01% - 3.99% 11 11 598 903
4.00% - 4.99% 37,827 35,699 51,484 80,831
5.00% - 5.99% 269,293 262,029 232,313 193,281
6.00% - 6.99% 36,033 39,186 33,568 29,571
7.00% - 7.99% 8,807 8,717 8,673 9,817
-------- -------- -------- --------
Total certificates of deposit 353,182 347,078 327,671 316,003
-------- -------- -------- --------
Total deposits $574,383 $550,708 $513,709 $498,929
======== ======== ======== ========
</TABLE>
Individual deposits greater than $100,000 at June 30, 1998, December 31,
1997 and 1996 and September 30, 1998 aggregated approximately $79,893,000,
$87,257,000, $72,504,000 and $67,467,000, respectively. Deposits in excess
of $100,000 are not insured.
Scheduled maturities of certificate accounts at June 30, 1998, December
31, 1997 and 1996 and September 30, 1996 were as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
June 30, December 31, December 31, September 30,
1998 1997 1996 1996
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Maturity
Less than 1 year $241,203 $260,941 $253,587 $240,240
1 year - 2 years 66,951 30,794 29,270 32,254
2 years - 3 years 14,414 27,832 12,146 10,460
3 years - 4 years 16,687 11,220 20,167 20,953
4 years - 5 years 12,971 15,065 11,694 10,738
Thereafter 956 1,226 807 1,358
-------- -------- -------- --------
Total certificates of deposit $353,182 $347,078 $327,671 $316,003
======== ======== ======== ========
</TABLE>
F-20
<PAGE> 168
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Interest expense on deposits consisted of the following during the six
months ended June 30, 1998 and 1997, the year ended December 31, 1997, the
three months ended December 31, 1996 and the years ended September 30,
1996 and 1995:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
For the Six Months For the For the Three For the Years
Ended Year Ended Months Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Passbook accounts $ 273 $ 265 $ 522 $ 133 $ 560 $ 625
NOW accounts 360 368 701 201 930 1,002
Money market accounts 1,397 1,135 2,377 552 2,023 2,143
Certificate accounts 9,946 9,263 19,048 4,365 15,734 11,909
------- ------- ------- ------ ------- -------
Total interest expense $11,976 $11,031 $22,648 $5,251 $19,247 $15,679
======= ======= ======= ====== ======= =======
</TABLE>
11. ADVANCES FROM FEDERAL HOME LOAN BANK
At June 30, 1998, December 31, 1997 and 1996 and September 30, 1996,
outstanding advances from the FHLB totaled $75,630,000, $57,341,000,
$34,763,000 and $36,350,000, respectively.
Scheduled maturities of FHLB advances at December 31, 1997 were as
follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Years Ending Average Interest $
December 31, Rate Maturing
------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
1998 6.80% $ 7,421
1999 6.83 6,734
2000 6.35 8,471
2001 6.36 7,572
2002 5.93 26,071
2003 6.69 1,072
---- -------
Total FHLB advances 6.28% $57,341
==== =======
</TABLE>
12. INCOME TAXES
In accordance with SFAS No. 109, deferred income tax assets and
liabilities are computed annually for differences between financial
statement and tax basis of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and
rates applicable to periods in which the differences are expected to
affect taxable income. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable or refundable for the
period adjusted for the change during the period in deferred tax assets
and liabilities.
On May 13, 1997, the Association received permission from the Internal
Revenue Service ("IRS") to change its accounting period, for federal
income tax purposes, from September 30th to December 31st, effective
December 31, 1996. In order to comply with IRS requirements, the
Association filed a consolidated tax return for the short period October
1, 1996 through December 31, 1996.
F-21
<PAGE> 169
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income tax provision consists of the following components for the year
ended December 31, 1997, the three months ended December 31, 1996, and the
years ended September 30, 1996 and 1995:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
For the Six For the Year For the Three For the Years
Months Ended Ended Months Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
-------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Current - federal $1,379 $1,474 $2,745 $ 49 $ 1,592 $2,789
Current - state 123 138 297 16 225 337
------ ------ ------ ---- ------- ------
Total current 1,502 1,612 3,042 65 1,817 3,126
Deferred - federal and state (144) (56) (112) 631 (1,056) (363)
------ ------ ------ ---- ------- ------
Total provision for income taxes 1,358 1,556 $2,930 $696 $ 761 $2,763
====== ====== ====== ==== ======= ======
</TABLE>
Bankshares' provision for income taxes differs from the amounts determined
by applying the statutory federal income tax rate to income before income
taxes for the following reasons:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
For the Year For the Three For the Years
Ended Months Ended Ended
December 31, December 31, September 30,
1997 1996 1996 1995
Amount % Amount % Amount % Amount %
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tax at federal tax rate $2,900 35.0% $650 35.0% $1,637 35.0% $2,568 35.0%
State income taxes, net of
Federal income tax
benefits 281 3.3 70 3.8 139 3.0 186 2.5
Reversal of prior year
liability -- -- -- -- (1,140) (24.4) -- --
Other (168) (2.0) (6) (0.3) 172 3.7 82 1.1
Benefit of graduated tax
rate (83) (1.0) (18) (1.0) (47) (1.0) (73) (1.0)
------ ---- ---- ---- ------ ----- ------ ----
Total provision for income
taxes $2,930 35.3% $696 37.5% $ 761 16.3% $2,763 37.6%
====== ==== ==== ==== ====== ==== ====== ====
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
For the Six For the Six
Months Ended Months Ended
June 30, June 30,
1998 1997
Amount % Amount %
--------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Tax at federal tax rate $1,354 35.0% $1,501 35.0%
State 116 3.0 142 3.3
Reversal -- -- -- --
Other (73) (1.9) (44) (1.0)
Benefit (39) (1.0) (43) (1.0)
------ ---- ------ ----
Total $1,358 35.1% $1,556 36.3%
====== ==== ====== ====
</TABLE>
During the year ended September 30, 1996, management concluded that a
liability accrued in prior years was no longer required and reversed such
liability resulting in a $1,140,000 credit to the 1996 income tax
provision.
F-22
<PAGE> 170
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The tax effect of temporary differences that gave rise to deferred tax
assets and deferred tax liabilities are presented below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
For the Year For the Three For the Years
Ended Months Ended Ended
December 31, December 31, September 30,
1997 1996 1996 1995
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Deferred tax liabilities:
Depreciation $ 582 $ 627 $ 639 $ 551
Loan fee income 170 167 188 319
FHLB stock dividends 457 454 868 1,172
Deferred loan costs 467 412 392 208
Unamortized discount on mortgage-backed bond 2,112 2,302 2,350 2,526
Book over tax on investments in partnerships 1,003 1,003 937 882
Other -- -- -- 17
------ ------ ------ ------
Gross deferred tax liabilities 4,791 4,965 5,374 5,675
------ ------ ------ ------
Deferred tax assets:
Excess of book bad debt reserve over tax reserve 1,043 918 907 1,298
Retirement plans 586 802 686 586
Unrealized loss on decrease in fair value
of securities available for sale 33 561 615 182
Deferred loss on loans held for sale 43 46 48 60
Deferred compensation 130 115 109 105
SAIF recapitalization -- -- 1,088 --
Other 19 -- 83 117
------ ------ ------ ------
Gross deferred tax assets 1,854 2,442 3,536 2,348
------ ------ ------ ------
Valuation allowance on unrealized loss on decrease in
fair value of securities available for sale (99) (138) (182) (182)
------ ------ ------ ------
Gross deferred tax assets - net of valuation allowance 1,755 2,304 3,354 2,166
------ ------ ------ ------
Net deferred tax liability $3,036 $2,661 $2,020 $3,509
====== ====== ====== ======
</TABLE>
During 1996, legislation was passed that repealed Section 593 of the
Internal Revenue Code for taxable years beginning after December 31, 1995.
Section 593 allowed thrift institutions, including the Association, to use
the percentage-of-taxable income bad debt accounting method, if more
favorable than the specific charge-off method, for federal income tax
purposes. The excess reserves (deduction based on the
percentage-of-taxable income less the deduction based on the specific
charge-off method) accumulated post-1987 are required to be recaptured
ratably over a six year period beginning in 1996. The Association had no
excess reserves as of December 31, 1996 and the recapture has no effect on
Bankshares' statement of operations as taxes were provided for in prior
years in accordance with SFAS 109, "Accounting for Income Taxes." The same
legislation forgave the tax liability on pre-1987 accumulated bad debt
reserves which would have penalized any thrift choosing to adopt a bank
charter because the tax would have become due and payable. The unrecorded
potential liability that was forgiven approximated $4.3 million.
13. COMMITMENTS AND CONTINGENCIES
Loan Commitments - In the normal course of business, the Association makes
commitments to extend credit. Commitments to extend credit are agreements
to lend to a customer as long as there is no violation of any condition
established in the contract. The interest rates on both fixed- and
variable-rate loans are based on the market rates in effect on the date of
closing.
F-23
<PAGE> 171
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commitments generally have fixed expiration dates of 30 to 60 days and
other termination clauses. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. Each customer's
creditworthiness is evaluated on a case-by-case basis. The amount of
collateral obtained if deemed necessary by the Association upon extension
of credit is based on management's credit evaluation of the customer.
Collateral held varies, but may include single-family homes, marketable
securities and income-producing residential and commercial properties.
Credit losses may occur when one of the parties fails to perform in
accordance with the terms of the contract. The Association's exposure to
credit risk is represented by the contractual amount of the commitments to
extend credit. Commitments to extend credit for mortgage loans, excluding
undisbursed portions of loans in process, were approximately $7,598,000,
$4,733,000, $5,732,000 and $16,551,000 at June 30, 1998, December 31, 1997
and 1996 and September 30, 1996, respectively.
At June 30, 1998, the $7,598,000 of loan commitments were comprised of
approximately $5,895,000 of fixed-rate commitments and $1,703,000 of
variable rate commitments. At December 31, 1997, the $4,733,000 of loan
commitments were comprised of approximately $3,593,000 of fixed-rate
commitments and $1,140,000 of variable-rate commitments. These commitments
are at prevailing market rates and terms. Interest rates on fixed-rate
loan commitments were from 6.5% to 7.75%, 6.125% to 9.0%, 6.0% to 9.125%
and 6.75% to 9.125% at June 30, 1998, December 31, 1997 and 1996 and
September 30, 1996, respectively. No value is placed on the commitments as
the borrower is required to close at the market rates in effect on the
date of closing. No fees are received in connection with such commitments.
Unused consumer lines of credit were $6,385,000, $8,948,000, $8,219,000
and $5,657,000 at June 30, 1998, December 31, 1997 and 1996 and September
30, 1996, respectively.
Commercial lines and letters of credit and other loan commitments were
$4,022,000, $7,369,000, $3,172,000 and $4,345,000 at June 30, 1998,
December 31, 1997 and 1996 and September 30, 1996, respectively.
Commitments to sell loans to FNMA were $0, $0, $70,000 and $207,000 at
June 30, 1998, December 31, 1997 and 1996 and September 30, 1996,
respectively. Commitments to purchase loans were $0, $0, $171,000 and
$619,000 at June 30, 1998, December 31, 1997 and 1996 and September 30,
1996, respectively.
Lease Commitments - The Association leases various properties for original
periods ranging from 2 to 25 years. Rent expense for the six months ended
June 30, 1998 and 1997, the year ended December 31, 1997, the three months
ended December 31, 1996, and the years ended September 30, 1996 and 1995,
was approximately $338,000, $304,000, $626,000, $141,000, $545,000, and
$535,000, respectively. At December 31, 1997, future minimum lease
payments under these operating leases were as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
Years Ending
December 31, Amount
--------------------------------------------------------------------------
(In Thousands)
<S> <C>
1998 $ 576
1999 514
2000 475
2001 340
2002 208
Thereafter 1,163
------
Total $3,276
======
</TABLE>
Line of Credit - The Association has a $1,800,000 available line of credit
with the Federal Reserve Bank of Atlanta which is secured by United States
Government and agency obligations (see Note 6). At June 30, 1998, December
31, 1997 and 1996 and September 30, 1996, the Association had no
outstanding advances.
F-24
<PAGE> 172
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONTINGENCIES - The Association completed its investigation of a
defalcation by a former employee which may have occurred over a period of
several years. The Association maintains insurance to cover such losses
with a claim deductible of $200,000. An expense for the amount of the
deductible was recorded during the year ended September 30, 1996. The
Association notified its insurance company of the potential claim and the
insurance company acknowledged coverage. The insurance company has
completed its due diligence related to the claim. The Association and the
insurance company are currently negotiating the terms of a settlement of
the Association's claim. The terms of such settlement may not amount to
the entire amount of the Association's claim in excess of the deductible.
However, even in such event, management does not believe that the claim
will have any material adverse effect on the Association's financial
position or results of its operations.
14. BENEFIT PLANS
PENSION PLAN - The Association has a noncontributory, qualified pension
plan covering substantially all employees. The plan calls for benefits to
be paid to eligible employees at retirement based primarily upon years of
service with the Association and compensation rates during those years.
Currently, the Association's policy is to fund the qualified retirement
plan in an amount that is determined in accordance with the minimum
funding standards of the Employee Retirement Income Security Act, but
falls below the tax deductible contribution. Plan assets consist primarily
of corporate and government agency bonds, mutual funds, common stock, and
managed funds.
Pension expense for the plan amounted to $42,000, $126,000, $251,000,
$63,000, $403,000, and $578,000 for the six months ended June 30, 1998 and
1997, the year ended December 31, 1997, the three months ended December
31, 1996, and the years ended September 30, 1996 and 1995, respectively.
Pension expense for the year ended December 31, 1997, the three months
ended December 31, 1996, and the years ended September 30, 1996 and 1995
included the following components:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
For the Year For the Three For the Years Ended
Ended Months Ended September 30,
December 31, 1997 December 31, 1996 1996 1995
---------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Service cost $550 $ 137 $551 $603
Interest cost 447 112 453 460
Actual return on assets (626) (156) (533) (417)
Net amortization and deferral (120) (30) (68) (68)
---- ----- ---- ----
Net periodic pension cost $251 $ 63 $403 $578
==== ===== ==== ====
</TABLE>
For the year ended December 31, 1997, the three months ended December 31,
1996, and the years ended September 30, 1996 and 1995, pension expense
amounts were based upon actuarial computations.
The following sets forth the funded status of the qualified plan at
December 31, 1997 and 1996 and September 30, 1996:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
December 31, December 31, September 30,
1997 1996 1996
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits $3,903 $3,641 $3,515
Nonvested benefits 472 465 442
------ ------ ------
Accumulated benefit obligation 4,375 4,106 3,957
Effect of anticipated future compensation levels and other
events 2,702 2,755 2,683
------ ------ ------
Projected benefit obligation 7,077 6,861 6,640
------ ------ ------
Fair value of assets held in the plan (estimated) 9,644 7,350 7,381
------ ------ ------
Plan assets over projected benefit obligation $2,567 $ 489 $ 741
====== ====== ======
The excess plan assets consist of the following:
Unamortized net transition asset $ 339 $ 411 $ 428
Accrued pension cost (962) (1,335) (1,272)
Unrecognized net gain due to changes in assumptions 3,218 1,444 1,616
Prior service cost (28) (31) (31)
------ ------ ------
Total $2,567 $ 489 $ 741
====== ====== ======
</TABLE>
F-25
<PAGE> 173
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Supplemental Retirement Income Plan - During 1989, the Association's Board
of Directors established a nonqualified unfunded defined benefit plan for
certain officers. For the six months ended June 30, 1998 and 1997, the
year ended December 31, 1997, the three months ended December 31, 1996,
and the years ended September 30, 1996 and 1995, the net periodic expense
for the officers' plan totaled $38,000, $27,000, $54,000, $13,000,
$60,000, and $65,000, respectively. The projected benefit obligation as of
December 31, 1997 and 1996 and September 30, 1996 was estimated at
$480,000, $388,000 and $380,000, respectively.
The actuarial present value of benefit obligations at December 31, 1997
and 1996 and September 30, 1996 was as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
December 31, December 31, September 30,
1997 1996 1996
-------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Projected benefit obligation $480 $388 $380
Prior service cost 33 41 43
Unrecognized net gains 40 86 87
---- ---- ----
Accrued retirement plan cost 553 515 510
Prior years accrual (515) (506) (466)
Employer contributions 16 4 16
---- ---- ----
Net periodic retirement plan expense $ 54 $ 13 $ 60
==== ==== ====
</TABLE>
Actuarial Assumptions - Actuarial assumptions represent estimates of
future experience based on the characteristics of the particular plan and
its covered employees. The actuarial assumptions used in the pension plan
and retirement plan valuations were as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Year Ended Three Months Ended Years Ended
December 31, December 31, September 30,
1997 1996 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Discount rate 7.00% 6.75% 6.50% 6.50%
Asset rate 8.50% 8.50% 8.00% 8.00%
Salary scale 5.00% 5.00% 5.00% 6.00%
</TABLE>
Bankshares and the Association do not provide any material postretirement
or postemployment benefits.
Employee Stock Ownership Plan - As of December 31, 1997, the Employee
Stock Ownership Plan ("ESOP") had an outstanding loan balance of
$1,424,000 from an unaffliated lender related to the purchase of 190,388
shares of common stock in the open market. Collateral for the loan was the
common stock purchased by the ESOP. During the six months ended June 30,
1998, Bankshares loaned sufficient funds to the ESOP to pay off the
original loan. The terms of the loan from Bankshares to the ESOP are
substantially the same as the terms of the loan from the unaffiliated
lender. Payment of the loan is principally from the Association's
contributions to the ESOP over a period of up to seven years, and the
interest rate used is New York prime, which was 8.50% at June 30, 1998.
Such loan is eliminated in consolidation at June 30, 1998.
Statement of Position 93-6 "Employers' Accounting for Employee Stock
Ownership Plan" ("SOP 93-6") requires that the Association reflect shares
allocated to employees under the ESOP as compensation expense at their
fair value, rather than cost. The difference between the cost of such
shares and their fair value is treated, net of tax, as an adjustment of
additional paid-in capital. During the six months ended June 30, 1998 and
1997, the year ended December 31, 1997, the three months ended December
31, 1996, and the years ended September 30, 1996 and 1995, compensation
expense related to the ESOP was $487,000, $277,000, $707,000, $183,000,
$556,000, and $272,000, respectively.
F-26
<PAGE> 174
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Contributions to the ESOP will be in an amount proportional to the
repayment of the ESOP loan, and will be allocated among participants on
the basis of compensation in the year of allocation, up to an annual
adjusted maximum level of compensation. In accordance with generally
accepted accounting principles, the unallocated shares held by the ESOP
are shown as a deduction from shareholders' equity.
Recognition and Retention Plan - In January 1995, the shareholders of the
Association approved the Recognition and Retention Plan (the "Recognition
Plan") for certain officers and non-employee directors of the Association.
Concurrent with such approval, such officers and directors were awarded
88,900 shares of common stock, which vest in five equal annual
installments, starting January 1996. The fair value of the shares on the
date of award will be recognized as compensation expense over the vesting
period. To fund this plan, 88,900 shares were issued from authorized but
unissued shares of common stock in July 1995. During the year ended
September 30, 1996, unamortized deferred compensation and additional
paid-in capital were adjusted to correct amounts initially recorded in
connection with the Recognition Plan. Unamortized deferred compensation of
$330,000 and $423,000 at June 30, 1998 and December 31, 1997,
respectively, is reflected as a reduction of shareholders' equity.
Compensation expense related to the Recognition Plan was $93,000, $93,000,
$185,000, $46,000, $130,000 and $148,000 for the six months ended June 30,
1998 and 1997, the year ended December 31, 1997, the three months ended
December 31, 1996, and the years ended September 30, 1996 and 1995,
respectively.
Stock Option Plan - The Association has a stock option plan for the
benefit of its directors, officers, and other key employees. The number of
shares of Bankshares' common stock reserved for issuance under the stock
option plan was equal to 237,986 shares or 10% of the total number of
common shares issued to persons other than the MHC pursuant to the
Association's conversion to the stock form of ownership. The option
exercise price cannot be less than the fair value of the underlying common
stock as of the date of the option grant and the maximum option term
cannot exceed ten years. The stock options granted to the directors,
officers, and employees are exercisable in five equal annual installments.
The first installment became exercisable on January 18, 1996. At January
18, 1995, there were 237,450 options granted with 536 options reserved for
future use. Below is a summary of transactions:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Option Price
--------------------------------------
Number of Average
Options Price Per Aggregate
Outstanding Share Price
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Options Outstanding:
Balance - September 30, 1995 222,950 $11.125 $2,480,319
Granted -- -- --
Exercised (1,220) $11.125 (13,573)
Canceled (4,880) $11.125 (54,290)
------- ------- ----------
Balance - September 30, 1996 216,850 2,412,456
Granted -- -- --
Exercised -- -- --
Canceled -- -- --
------- ------- ----------
Balance - December 31, 1996 216,850 2,412,456
Granted 7,500 $19.016 142,617
Exercised (4,800) $11.125 (53,400)
Canceled -- -- --
------- ------- ----------
Balance - December 31, 1997 219,550 2,501,673
------- ------- ----------
Granted -- -- --
Exercised (5,200) $11.125 (57,850)
Canceled -- -- --
------- ------- ----------
Balance - June 30, 1998 214,350 $11.401 $2,443,823
======= ======= ==========
</TABLE>
Options exercisable at June 30, 1998, December 31, 1997 and 1996, and
September 30, 1996 and 1995 were 125,610, 84,820, 43,370, 43,370, and 0,
respectively. Bankshares adopted the disclosure-only option under SFAS No.
123, "Accounting for Stock-based Compensation" as of January 1, 1997.
F-27
<PAGE> 175
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value of options granted under the stock option plan during the
fiscal year ended December 31, 1997 was estimated using the Binary Option
Pricing Model with the following assumptions used:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Number of Exercise Fair Value Risk Free Expected Expected Dividend
Grant date Options Price of Options Interest Rate Life (Years) Volatility Yield
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
01/18/97 7,500 $19.016 $5.25 6.37% 5 15.36% $2.67
</TABLE>
Had compensation cost for the stock options been determined based on the
fair value at the grant date for awards under those plans consistent with
the method of SFAS No. 123, Bankshares' net income and earnings per share
for the year ended December 31, 1997 would have been reduced to the pro
forma amounts indicated below:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
For the Year Ended
December 31, 1997
--------------------------------------------------------------------------
<S> <C>
Net income
As reported $5,356,000
Pro forma $5,332,000
Basic earnings per share
As reported $ 1.09
Pro forma $ 1.08
</TABLE>
15. MORTGAGE-BACKED BOND
On September 30, 1983, the Association sold two of its branch offices to
another financial institution with the approval of the Federal Home Loan
Bank Board ("FHLBB"), predecessor to the OTS. Under terms of the sale, the
Association issued a 10.94%, 30-year term mortgage-backed bond (the
"Bond") for approximately $41,601,000. The Bond issue has a stated
interest rate which was less than the market rate (assumed to have been
17.53%) for similar debt at the effective date of the sale. Accordingly,
the Association recorded a discount on the Bond which is being accreted on
the interest method over the life of the Bond.
The Bond bears an interest rate that is adjustable semi-annually, on April
1 and October 1, to reflect changes in the average of the United States
10-year and 30-year long-term bond rates. The Bond's interest rate on June
30, 1998, December 31, 1997 and 1996 and September 30, 1996 was 5.07%,
5.62%, 6.20% and 5.70%, respectively. The unamortized discount at June 30,
1998, December 31, 1997 and 1996 and September 30, 1996 was $5,196,000,
$5,439,000, $5,929,000 and $6,052,000, respectively. Principal and
interest payments are due quarterly. During the six months ended June 30,
1998 and 1997, the year ended December 31, 1997, the three months ended
December 31, 1996, and the years ended September 30, 1996 and 1995,
approximately $243,000, $246,000, $490,000, $123,000, $496,000, and
$498,000, respectively, of the discount was accreted.
At June 30, 1998, December 31, 1997 and 1996 and September 30, 1996, the
Association held $13,820,000, $13,039,000, $11,701,000 and $11,391,000
(net of discounts of $9,380,000, $10,161,000, $11,499,000 and
$11,809,000), respectively, of Salomon Brothers Certificates of Accrual on
Treasury Securities ("CATS") which were purchased at the time of issuing
the Bond. The accrual of interest on the CATS offsets the discount
amortization of the Bond. The CATS are included in United States
Government and agency obligations described in Note 3 to the consolidated
financial statements.
F-28
<PAGE> 176
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Bond at December 31, 1997, was repayable as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Years Ending Amount
December 31, (In Thousands)
-----------------------------------------------------------------------
<S> <C>
1998 $ 1,387
1999 1,387
2000 1,387
2001 1,387
2002 1,387
2003 and after 14,837
-------
Total 21,772
Less unamortized discount 5,439
-------
Total mortgage-backed bond $16,333
=======
</TABLE>
16. REGULATORY RESTRICTIONS ON RETAINED INCOME AND REGULATORY CAPITAL
REQUIREMENT
The Association is subject to various regulatory capital requirements
administered by the OTS. Failure to meet minimum capital requirements
can initiate certain mandatory - and possibly additional
discretionary - actions by regulators that, if undertaken, could have
a direct material effect on Bankshares' financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Association must meet specific capital
guidelines that involve quantitative measures of the Association's
assets, liabilities, and certain off-balance-sheet items as calculated
under regulatory accounting practices. The Association's capital
amounts and classifications are also subject to qualitative judgments
by regulators about components, risk-weighting, and
other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Association to maintain minimum amounts and ratios of tangible
capital of not less that 1.5% of adjusted total assets, total risk-based
capital to risk-weighted assets of not less that 8.0%, Tier I capital
equal to adjusted total assets of 3.0%, and Tier I capital to
risk-weighted assets of 4.0% (as defined in the regulations). Management
believes, as of December 31, 1997, that the Association meets all capital
adequacy requirements to which it is subject.
As of June 30, 1998 and December 31, 1997, the most recent notification
from the OTS categorized the Association as "Well Capitalized" under the
framework for prompt corrective action. To be considered well capitalized
under Prompt Corrective Action Provisions, the Association must maintain
total risk-based, Tier I risk-based, and Tier I leverage ratios as set
forth in the following table. There are no conditions or events since that
notification that management believes have changed the Association's
categorization.
F-29
<PAGE> 177
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Association is required to report capital ratios unconsolidated with
Bankshares. The Association's actual capital amounts and ratios are
presented in the following tables:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
To be Considered
Well Capitalized
for Prompt
For Corrective
Capital Adequacy Action
Actual Purposes Provisions
---------------------------------------------------------------
Ratio Amount Ratio Amount Ratio Amount
-------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
As of June 30, 1998:
Total Risk-based Capital (to Risk-weighted Assets) 18.1% $76,509 8.0% $33,913 10.0% $42,391
Core (Tier 1) Capital (to Adjusted Tangible Assets) 9.6 73,742 3.0 22,972 5.0 32,287
Tangible Capital (to Tangible Assets) 9.6 73,742 1.5 11,486 N/A N/A
Core (Tier 1) Capital (to Risk-weighted Assets) 17.4 73,742 4.0 16,956 6.0 25,434
As of June 30, 1998, tangible assets, adjusted tangible assets, and
risk-weighted assets were $765,748,000, $765,748,000, and $423,908,000,
respectively.
As of December 31, 1997:
Total Risk-based Capital ( to Risk-weighted Assets) 18.4% 70,048 8.0% $30,416 10.0% $38,020
Core (Tier 1) Capital (to Adjusted Tangible Assets) 9.8 70,681 3.0 21,609 5.0 36,014
Tangible Capital (to Tangible Assets) 9.8 70,681 1.5 10,804 N/A N/A
Core (Tier 1) Capital (to Risk-weighted Assets) 18.6 70,681 4.0 15,208 6.0 22,812
As of December 31, 1997, tangible assets, adjusted tangible assets, and
risk-weighted assets were $720,284,000, $720,284,000, and $380,197,000,
respectively and $380,197,000, respectively.
As of December 31, 1996:
Total Risk-based Capital ( to Risk-weighted Assets) 24.7% $78,845 8.0% $25,492 10.0% $31,865
Core (Tier 1) Capital (to Adjusted Tangible Assets) 11.8 77,187 3.0 19,688 5.0 32,814
Tangible Capital (to Tangible Assets) 11.8 77,187 1.5 9,844 N/A N/A
Core (Tier 1) Capital (to Risk-weighted Assets) 24.2 77,187 4.0 12,746 6.0 19,119
As of December 31, 1996, tangible assets, adjusted tangible assets, and
risk-weighted assets were $656,277,000, $656,277,000 and $318,649,000,
respectively
As of September 30, 1996:
Total Risk-based Capital ( to Risk-weighted Assets) 23.9% $74,977 8.0% $25,115 10.0% $31,394
Core (Tier 1) Capital (to Adjusted Tangible Assets) 11.3 73,599 3.0 19,539 5.0 32,565
Tangible Capital (to Tangible Assets) 11.3 73,599 1.5 9,770 N/A N/A
Core (Tier 1) Capital (to Risk-weighted Assets) 23.4 73,599 4.0 12,558 6.0 18,837
As of September 30, 1996, tangible assets, adjusted tangible assets, and
risk-weighted assets were $651,306,000, $651,306,000 and $313,942,000,
respectively
</TABLE>
F-30
<PAGE> 178
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
For the Six For the Year For the Three For the Years
Months Ended Ended Months Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
-------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 2,315 $ 1,452 $ 2,836 $ 220 $ 1,877 $ 3,200
======= ======= ======= ====== ======= =======
Cash paid for interest on deposits and other
borrowings $14,321 $12,873 $27,959 $6,255 $22,146 $17,949
======= ======= ======= ====== ======= =======
Supplemental schedule of noncash investing:
and financing activities:
Real estate acquired in settlement of loans $ 653 $ 91 $ 558 $ 78 $ 400 $ 1,394
======= ======= ======= ====== ======= =======
Distribution of Common Stock to fund the
Recognition and Retention Plan $ -- $ -- $ -- $ -- $ -- $ 989
======= ======= ======= ====== ======= =======
</TABLE>
18. FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, as amended by SFAS No. 119, "Disclosures about Fair Value of
Financial Instruments" ("SFAS No. 107"), requires the estimation of fair
values of financial instruments, as defined in SFAS No. 107.
Estimates of fair value are made at a specific date, based upon, where
available, relevant market prices and information about the financial
instrument. For a substantial portion of the financial instruments, no
quoted market exists. Therefore, estimates of fair value are necessarily
based on a number of significant assumptions (many of which involve events
outside the control of management). Such assumptions include assessments
of current economic conditions, perceived risks associated with these
financial instruments and their counterparties, future expected loss
experience and other factors. Given the uncertainties surrounding these
assumptions, the reported fair values represent estimates only and,
therefore, cannot be compared to the historical accounting model. Use of
different assumptions or methodologies are likely to result in
significantly different fair value estimates.
Although management uses its best judgment in estimating the fair value of
the financial instruments, there are inherent limitations in any
estimation technique. Therefore, the fair value estimates presented herein
are not necessarily indicative of the amounts which could be realized in a
current transaction.
The estimated fair values presented neither include nor give effect to the
values associated with the Association's existing customer relationships,
extensive branch banking network or property, or certain tax implications
related to the realization of unrealized gains or losses. Also under SFAS
No. 107, the fair value of non-interest-bearing checking accounts,
interest-bearing NOW accounts, passbook and statement accounts, and money
market accounts is equal to the carrying amount because these deposits
have no stated maturity. The approach to estimating fair value excludes
the significant benefit that results from the low-cost funding provided by
such deposit liabilities, as compared to alternative sources of funding.
The following methods and assumptions were used to estimate the fair value
of each major classification of financial instruments at June 30, 1998,
December 31, 1997 and 1996 and September 30, 1996:
Cash and Cash Equivalents - The carrying amounts reported in the Statement
of Financial Condition for cash and cash equivalents approximates their
fair value.
Investments - Held to Maturity and Securities Available for Sale - Fair
value is determined by reference to quoted market prices or by use of
broker price estimates.
F-31
<PAGE> 179
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LOANS RECEIVABLE - The fair value of loans was estimated by using a method
which approximates the effect of discounting the estimated future cash
flows over the expected repayment periods using rates which consider
credit risk, servicing costs and other relevant factors.
MORTGAGE-BACKED AND RELATED SECURITIES - Fair value is determined by
reference to quoted market prices or by use of broker price estimates.
Deposits - Current carrying amounts approximate estimated fair value of
deposits with no stated maturity, including demand deposits, interest
bearing NOW accounts, passbooks and statement accounts, and money market
accounts. Fair value for fixed maturity certificate of deposit accounts
was estimated by discounting the contractual cash flow using a rate which
reflects the Association's cost of funds adjusted for the cost of
servicing deposit accounts.
MORTGAGE-BACKED BOND - The carrying amount of the mortgage-backed bond is
a reasonable estimate of fair market value.
ADVANCES FROM FEDERAL HOME LOAN BANK - Fair value is estimated using the
Association's cost of funds adjusted for the cost of operations.
ESOP LOAN - The carrying amount of the ESOP loan is a reasonable estimate
of fair market value.
COMMITMENTS TO EXTEND CREDIT - At June 30, 1998, December 31, 1997 and
1996 and September 30, 1996, the fair value of commitments to extend
credit was considered insignificant due to the short-term nature of the
commitments.
The estimated fair values of the financial instruments were as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
June 30, 1998 December 31, 1997 December 31, 1996 September 30, 1996
Carrying Fair Carrying Fair Carrying Fair Carrying Fair
Value Value Value Value Value Value Value Value
---------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Financial assets:
Cash and cash equivalents $ 47,425 $ 47,425 $ 25,954 $ 25,954 $ 42,442 $ 42,442 $ 44,780 $ 44,780
Investments - held to maturity 21,443 25,539 21,388 25,585 22,139 26,266 22,293 26,093
Securities available for sale 91,316 91,316 142,269 142,269 123,152 123,152 124,287 124,287
Mortgage-backed and
related securities 41,884 42,360 46,413 46,938 53,405 53,880 54,945 54,988
Loans receivable - net 527,375 539,967 451,709 461,650 389,040 397,627 376,219 385,491
Financial liabilities:
Deposits $574,383 $571,282 $550,708 $548,321 $513,709 $511,327 $498,929 $496,529
Mortgage-backed bond 15,883 15,883 16,333 16,333 17,230 17,230 17,453 17,453
Advances from FHLB 75,630 59,689 57,341 57,246 34,763 34,875 36,350 36,545
ESOP borrowings - - 1,424 1,424 1,915 1,915 2,064 2,064
</TABLE>
19. CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS
The following condensed statements of financial condition as of June 30,
1998, December 31, 1997 and 1996 and September 30, 1996, and the condensed
statements of operations and statements of cash flows for the six months
ended June 30, 1998 and 1997, the year ended December 31, 1997, the three
months ended December 31, 1996, and the years ended September 30, 1996 and
1995 should be read in conjunction with the consolidated financial
statements and the related notes. Since the organization of Bankshares was
accounted for in a manner similar to a pooling of interests, these
statements have been presented as if Bankshares was in existence for all
periods covered by the consolidated financial statements.
F-32
<PAGE> 180
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Financial Condition
-----------------------------------------------------------------------------------------------------------------------
At June 30, At December 31, At September 30,
1998 1997 1996 1996
-----------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 279 $11,243 $ -- $ --
Investment in and loans to the Association 83,151 70,527 76,578 75,504
Other assets 149 -- -- --
------- ------- ------- -------
Total assets $83,579 $81,770 $76,578 $75,504
======= ======= ======= =======
Liabilities $501 $ 511 $ 459 $ 448
Shareholders' equity 83,078 81,259 76,119 75,056
------- ------- ------- -------
Total liabilities and shareholders' equity $83,579 $81,770 $76,578 $75,504
======= ======= ======= =======
Statements of Operations
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
For the Six Months For the For the Three For the Years
Ended Year Ended Months Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
-----------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Income $ 192 $ -- $ -- $ -- $ -- $ --
Expenses 148 -- 41 -- -- --
------- ------ ------- ------ ------ ------
Income (loss) before income taxes and equity
in earnings of the Association 44 -- (41) -- -- --
Income tax benefit 45 -- 15 -- -- --
------- ------ ------- ------ ------ ------
Income (loss) before equity in earnings of
Association 89 -- (26) -- -- --
Equity in earnings of the Association 2,422 2,735 5,382 1,160 3,915 4,574
------- ------ ------- ------ ------ ------
Net income $ 2,511 $2,735 $ 5,356 $1,160 $3,915 $4,574
======= ====== ======= ====== ====== ======
<CAPTION>
Statements of Cash Flows
-----------------------------------------------------------------------------------------------------------------------
For the Six Months For the For the Three For the Years
Ended Year Ended Months Ended Ended
June 30, December 31, December 31, September 30,
1998 1997 1997 1996 1996 1995
-----------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 2,511 $2,735 $ 5,356 $1,160 $3,915 $4,574
Adjustments to reconcile net income
to net cash used for operating
activities:
Equity in earnings of the Association (2,422) (2,735) (5,382) (1,160) (3,915) (4,574)
Other (98) -- (15) -- -- --
------- ------ ------- ------ ------ ------
Net cash used for operating activities (9) -- (41) -- -- --
------- ------ ------- ------ ------ ------
Cash flows from investing activities:
Loan originations and principal
payments on loans (9,901) -- -- -- -- --
Dividends received from Association -- 973 13,260 448 1,618 902
------- ------ ------- ------ ------ ------
Net cash provided by investing activities (9,901) 973 13,260 448 1,618 902
------- ------ ------- ------ ------ ------
Cash flows from financing activities:
Dividends paid (1,053) (973) (1,976) (448) (1,618) (902)
------- ------ ------- ------ ------ ------
Net cash used for financing activities (1,053) (973) (1,976) (448) (1,618) (902)
------- ------ ------- ------ ------ ------
Net increase (decrease) in cash and
cash equivalents (10,963) -- 11,243 -- -- --
Cash and cash equivalents, beginning of
period 11,242 -- -- -- -- --
------- ------ ------- ------ ------ ------
Cash and cash equivalents, end of period $ 279 $ -- $11,243 $ -- $ -- $ --
======= ====== ======= ====== ====== ======
</TABLE>
Payment of dividends to Bankshares by the Association is subject to
various limitations by bank regulatory agencies. Undistributed earnings of
the Association available for distribution as dividends under these
limitations were $21,185,000, $30,773,000, $27,203,000 and $1,618,000 as
of June 30, 1998, December 31, 1997 and 1996 and September 30, 1996,
respectively.
F-33
<PAGE> 181
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
--------------------------------------------------------------------------------------------------------------------
March 31, June 30,
--------------------------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C>
Six months ended June 30, 1998:
Interest income $13,358 $13,469
Interest expense 7,299 7,356
------- -------
Net interest income 6,059 6,113
Provision for loan losses 117 96
Other income 934 821
Operating expense 4,963 4,882
Provision for income taxes 681 677
------- -------
Net income $ 1,212 $ 1,279
======= =======
Basic earnings per share $ 0.25 $ 0.26
======= =======
Diluted earnings per share $ 0.24 $ 0.25
======= =======
<CAPTION>
Quarter Ended
--------------------------------------------------------------------------------------------------------------------
March 31, June 30, September 30, December 31,
--------------------------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C>
Year ended December 31, 1997:
Interest income $12,020 $12,557 $12,894 $12,845
Interest expense 6,448 6,813 7,036 7,093
------- ------- ------- -------
Net interest income 5,572 5,744 5,858 5,752
Provision for loan losses 30 53 138 43
Other income 891 971 1,522 801
Operating expense 4,293 4,512 4,973 4,783
Provision for income taxes 789 767 720 654
------- ------- ------- -------
Net income $1,351 $ 1,383 $ 1,549 $ 1,073
======= ======= ======= =======
Basic earnings per share $ 0.27 $ 0.28 $ 0.31 $ 0.22
======= ======= ======= =======
Diluted earnings per share $ 0.27 $ 0.27 $ 0.31 $ 0.21
======= ======= ======= =======
<CAPTION>
Quarter Ended
--------------------------------------------------------------------------------------------------------------------
December 31, 1995 March 31, June 30, September 30, December 31,
--------------------------------------------------------------------------------------------------------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1996
and three months ended
December 31, 1995
Interest income $10,205 $10,748 $11,091 $11,845 $11,896
Interest expense 5,349 5,834 5,724 5,952 6,378
------- ------- ------- ------- -------
Net interest income 4,856 4,914 5,367 5,893 5,518
Provision for loan losses 40 2 38 28 243
Other income 1,080 967 370 927 1,225
Operating expense 4,189 3,992 4,277 7,142 4,644
Provision (benefit) for
income taxes 667 619 (361) (164) 696
------- ------- ------- ------- -------
Net income (loss) $ 1,050 $ 1,268 $ 1,283 $ (186) $ 1,160
======= ======= ======= ======= =======
Basic earnings (loss) per share $ 0.22 $ 0.26 $ 0.37 $ (0.04) $ 0.24
======= ======= ======= ======= =======
Diluted earnings (loss) per share $ 0.22 $ 0.26 $ 0.36 $ (0.04) $ 0.23
======= ======= ======= ======= =======
</TABLE>
The quarter ended June 30, 1996 results of operations include a $1,140,000
credit to the income tax provision related to the reversal of a liability
accrued in prior years which management concluded was no longer necessary.
The quarter ended September 30, 1996 results of operations include a
one-time special assessment of $2,800,000 for the recapitalization of the
SAIF administered by the FDIC.
F-34
<PAGE> 182
21. SUBSEQUENT EVENT-THE CONVERSION (UNAUDITED)
On July 29, 1998, as amended subsequently on August 13, 1998, the Boards
of Directors of Bankshares, the Association and MHC adopted a Plan of
Conversion and Agreement and Plan of Reorganization (the "Plan"). Pursuant
to the Plan, (1) Bankshares will convert from a federally chartered
corporation to a federally chartered interim saving association and
simultaneously merge with and into the Association with the Association
being the survivor thereof; (2) MHC, which owns a majority of the issued
and outstanding common stock of Bankshares, will convert from the mutual
to stock form and simultaneously merge into the Association, with the
Association being the surviving entity; (3) the Association will then
merge into an interim institution ("Interim") to be formed as a wholly
owned subsidiary of Community Savings Bankshares, Inc., a newly formed
Delaware corporation (the "Holding Company") formed in connection with the
reorganization, with the Association being the surviving entity; and (4)
the outstanding shares of Bankshares' common stock (other than those held
by MHC, which will be canceled) will be converted into shares of common
stock of the Holding Company. The Holding Company will then offer for sale
pursuant to the Plan additional shares equal to approximately 51.86% of
the common stock of the Holding Company. Consummation of the Plan is
subject to (1) the approval of the members of MHC, (ii) the shareholders
of Bankshares and (iii) various regulatory agencies.
Pursuant to the Plan, shares of the Holding Company's common stock will be
offered initially for subscription by eligible members of MHC and certain
other persons as of specified dates subject to various subscription
priorities as provided in the Plan. The common stock will be offered at a
price to be determined by the Boards of Directors based upon an appraisal
to be made by an independent appraisal firm. The exact number of shares to
be offered will be determined by the Boards of Directors in conjunction
with the determination of the price at which the shares will be sold. At
least the minimum number of shares offered in the conversion must be sold.
Any common stock not purchased in the subscription offering will be sold
in a community offering expected to be commenced simultaneously with the
subscription offering.
The Plan provides that when the conversion is completed, a "Liquidation
Account" will be established in an amount equal to the amount of dividends
waived by MHC plus the greater of (1) the retained earnings of the
Association as of March 31, 1994 or (2) 51.34% of the Bankshares' total
shareholders' equity as reflected in the latest statement of financial
condition contained in the final prospectus utilized in the conversion.
The Liquidation Account is established to provide a limited priority claim
to the assets of the Association to qualifying depositors as of specified
dates (Eligible Account Holders and Supplemental Eligible Account Holders)
who continue to maintain deposits in the Association after the conversion.
In the unlikely event of a complete liquidation of the Association, and
only in such an event. Eligible Account Holders and Supplemental Eligible
Account Holders would receive from the Liquidation Account a liquidation
distribution based on their proportionate share of the then total
remaining qualifying deposits.
Current regulations allow the Association to pay dividends on its stock
after the conversion if its regulatory capital would not thereby be
reduced below the amount then required for the aforementioned Liquidation
Account. Also, capital distribution regulations limit the Association's
F-35
<PAGE> 183
ability to make capital distributions which include dividends, stock
redemptions or repurchases, cash-out mergers, interest payments on certain
convertible debt, and other transactions charged to the capital account
based on its capital level and supervisory condition. Federal regulations
also preclude any repurchase of the stock of the Association or the
Holding Company for three years after the conversion, except for
repurchases of qualifying shares of a director and repurchases pursuant to
an offer made on a pro rata basis to all shareholders and with prior
approval of the Office of Thrift Supervision or pursuant to an open market
stock repurchase program that complies with certain regulatory criteria.
Bankshares, the Association and MHC have retained the services of both a
marketing firm and legal counsel for the specific purpose of implementing
the Plan. Costs relating to the conversion will be deferred and, upon
conversion, such costs and any additional costs will be charged against
the proceeds from the sale of stock. As of June 30, 1998 (unaudited),
there were no deferred costs related to the conversion. If the conversion
is not completed, deferred costs will be charged to operations.
F-36
<PAGE> 184
================================================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE MHC, THE MID-TIER HOLDING COMPANY, THE
ASSOCIATION OR FBR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION
IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY, THE MID-TIER HOLDING COMPANY OR
THE ASSOCIATION SINCE ANY OF THE DATES AS OF WHICH INFORMATION IS FURNISHED
HEREIN OR SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
---------------------
Page
----
Summary..................................................................
Selected Financial Data..................................................
Summary of Recent Developments...........................................
Risk Factors.............................................................
Use of Proceeds..........................................................
Dividend Policy..........................................................
Market for Common Stock..................................................
Regulatory Capital.......................................................
Capitalization...........................................................
Pro Forma Data...........................................................
Condensed Statements of Operations.......................................
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..........................................................
Management Purchases.....................................................
Business ................................................................
Regulation...............................................................
Taxation.................................................................
Management ..............................................................
Proposed Management Purchases............................................
The Conversion ..........................................................
Restrictions on Acquisition of the
Company and the Association............................................
Description of Capital Stock of the Company..............................
Change in Auditors.......................................................
Experts..................................................................
Legal Matters............................................................
Additional Information...................................................
Index to Financial Statements............................................
UNTIL ____ __, 1998 OR 25 DAYS AFTER COMMENCEMENT OF THE SYNDICATED COMMUNITY
OFFERING, IF ANY, WHICHEVER IS LATER, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
================================================================================
_________SHARES
COMMUNITY SAVINGS
BANKSHARES, INC.
(Proposed Holding Company for
Community Savings, F. A.)
COMMON STOCK
--------------------
PROSPECTUS
--------------------
--------------------
_____ __, 1998
================================================================================
<PAGE> 185
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (1).
<TABLE>
<CAPTION>
<S> <C>
SEC filing fees................................................ $ 50,718
OTS filing fees................................................ 8,400
Nasdaq filing fees............................................. 93,000
Printing, postage and mailing ................................. 375,000
Legal fees..................................................... 200,000
Blue Sky filing fees and expenses.............................. 10,000
Accounting fees................................................ 125,000
Appraiser's fees (including preparation of business plan)...... 33,500
Conversion agent fees and expenses............................. 40,000
Transfer and exchange agent fees and expenses.................. 15,000
Stock center telephone, temporary support staff and equipment;
special meetings expenses................................. 60,000
Miscellaneous.................................................. 52,002
----------
TOTAL..................................................... $1,062,620
==========
</TABLE>
In addition to the foregoing expenses, Friedman, Billings, Ramsey &
Co., Inc. will receive fees based on the number of shares of Conversion Stock
sold in the Conversion, plus expenses. Based upon the assumptions and the
information set forth under "Pro Forma Data" and "The Conversion - Marketing
Arrangements" in the Prospectus, it is estimated that such fees will amount to
$334,493, $393,795, $453,115 and $521,328 in the event that 4,871,209 shares,
5,730,659 shares, 6,590,357 shares and 7,578,961 shares of Conversion Stock are
sold by the Company in the Conversion, respectively.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law sets forth
circumstances under which directors, officers, employees and agents may be
insured or indemnified against liability which they may incur in their capacity
as such. The Certificate of Incorporation and the Bylaws of the Company provide
that the directors, officers, employees and agents of the Company shall be
indemnified to the full extent permitted by law. Such indemnity shall extend to
expenses, including attorney's fees, judgments, fines and amounts paid in the
settlement, prosecution or defense of the foregoing actions.
Article 10 of the Registrant's Certificate of Incorporation provides as
follows:
ARTICLE 10. INDEMNIFICATION. The Corporation shall indemnify its
directors, officers, employees, agents and former directors, officers, employees
and agents, and any other persons
II-1
<PAGE> 186
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, association, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees, judgments, fines
and amounts paid in settlement) incurred in connection with any pending or
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative, with respect to which such director, officer, employee, agent
or other person is a party, or is threatened to be made a party, to the full
extent permitted by the General Corporation Law of the State of Delaware,
provided, however, that the Corporation shall not be liable for any amounts
which may be due to any person in connection with a settlement of any action,
suit or proceeding effected without its prior written consent or any action,
suit or proceeding initiated by any person seeking indemnification hereunder
without its prior written consent. The indemnification provided herein (i) shall
not be deemed exclusive of any other right to which any person seeking
indemnification may be entitled under any bylaw, agreement or vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in any other capacity, and (ii) shall
inure to the benefit of the heirs, executors and administrators of any such
person. The Corporation shall have the power, but shall not be obligated, to
purchase and maintain insurance on behalf of any person or persons enumerated
above against any liability asserted against or incurred by them or any of them
arising out of their status as corporate directors, officers, employees, or
agents whether or not the Corporation would have the power to indemnify them
against such liability under the provisions of this Article 10.
Article VI of the Company's Bylaws provides as follows:
6.1 INDEMNIFICATION. The Corporation shall provide indemnification to
its directors, officers, employees, agents and former directors, officers,
employees and agents and to others in accordance with the Corporation's
Certificate of Incorporation.
6.2 ADVANCEMENT OF EXPENSES. Reasonable expenses (including attorneys'
fees) incurred by a director, officer or employee of the Corporation in
defending any civil, criminal, administrative or investigative action, suit or
proceeding described in Section 6.1 may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors only upon receipt of an undertaking by or on behalf of such
person to repay such amount if it shall ultimately be determined that the person
is not entitled to be indemnified by the Corporation.
6.3 OTHER RIGHTS AND REMEDIES. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article VI shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Corporation's Certificate of
Incorporation, any agreement, vote of stockholders or disinterested directors or
otherwise, both as to actions in their official capacity and as to actions in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer or employee and shall inure to the
benefit of the heirs, executors and administrators of such person.
II-2
<PAGE> 187
6.4 INSURANCE. Upon resolution passed by the Board of Directors, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer of employee of the Corporation, or is or was serving
at the request of the corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of its
Certificate of Incorporation or this Article VI.
6.5 MODIFICATION. The duties of the Corporation to indemnify and to
advance expenses to a director, officer or employee provided in this Article VI
shall be in the nature of a contract between the Corporation and each such
person, and no amendment or repeal of any provision of this Article VI shall
alter, to the detriment of such person, the right of such person to the advance
of expenses or indemnification related to a claim based on an act or failure to
act which took place prior to such amendment or repeal.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The only securities sold by the Registrant to date consist of 100
shares of common stock issued on August 13, 1998, to its sole incorporator,
Community Savings, F. A., for $10.00 per share, which shares will be cancelled
upon consummation of the Conversion. Because the shares were sold to only on
entity and were sold only to facilitate the incorporation of the Registrant, the
sale was exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) thereof.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) LIST OF EXHIBITS (filed herewith unless otherwise noted)
1.1 Engagement Letter with Friedman, Billings, Ramsey & Co., Inc.*
1.2 Form of Agency Agreement with Friedman, Billings, Ramsey & Co., Inc.
2.1 Plan of Conversion, as amended
3.1 Certificate of Incorporation of Community Savings Bankshares, Inc.*
3.2 Bylaws of Community Savings Bankshares, Inc.*
4.0 Form of Stock Certificate of Community Savings Bankshares, Inc.*
5.0 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. re: legality
8.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. re: Federal tax
matters
8.2 Opinion of Crowe, Chizek and Company LLP re: Florida tax matters
8.3 Letter of FinPro, Inc. re: Subscription Rights*
10.1 1995 Stock Option Plan*
10.2 1995 Recognition and Retention Plan for Employees and Outside
Directors*
10.3 Form of Employment Agreement between Community Savings Bankshares,
Inc., Community Savings, F.A. and James B. Pittard, Jr.
10.4 Form of Change in Control Agreement between Community Savings
Bankshares, Inc., Community Savings, F.A. and James B. Pittard, Jr.
10.5 Form of Change in Control Agreement with Certain Officers of Community
Savings Bankshares, Inc. and Community Savings, F.A.
16.0 Letter from Deloitte & Touche LLP
23.1 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in Exhibits
5.0 and 8.1, respectively)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Crowe, Chizek and Company LLP (included in Exhibit 8.2)*
II-3
<PAGE> 188
23.4 Consent of FinPro, Inc.*
24.0 Power of Attorney (previously included in Signature Page of this
Registration Statement)*
27.0 Financial Data Schedule*
99.1 Proxy Statement and form of proxy for solicitation of members of
ComFed, M.H.C.*
99.2 Proxy Statement and form of proxy for solicitation of shareholders of
Community Savings Bankshares, Inc. (a federal corporation)*
99.3 Subscription Order Form and Instructions
99.4 Additional Solicitation Material
99.5 Appraisal Report of FinPro, Inc.
- -------------
* Previously filed.
(b) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted as not applicable or not required under
the rules of Regulation S-X.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of the securities offered would not exceed that which was
registered) and any deviation from the low or high and the estimated
maximum offering range may be reflected in the form of Prospectus filed
with the Commission pursuant to Rule 424 (b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to
II-4
<PAGE> 189
the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the Offering.
The undersigned Registrant hereby undertakes to furnish stock
certificates to or in accordance with the instructions of the respective
purchasers of the Common Stock, so as to make delivery to each purchaser
promptly following the closing under the Plan of Conversion.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE> 190
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Form S-1 Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the State of
Florida on October 13, 1998.
COMMUNITY SAVINGS BANKSHARES, INC.
By: /s/ JAMES B. PITTARD, JR.
---------------------------------
James B. Pittard, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
- ----------------------------------- ---------------------------------- -----------------
<S> <C> <C>
/s/ FREDERICK A. TEED Chairman of the Board October 16, 1998
- ---------------------------------
Frederick A. Teed
/s/ JAMES B. PITTARD, JR. President and Chief Executive
- --------------------------------- Officer October 16, 1998
James B. Pittard, Jr.
/s/ FOREST C. BEATY, JR. Director October 16, 1998
- ---------------------------------
Forest C. Beaty, Jr.
/s/ ROBERT F. CROMWELL Director October 16, 1998
- ---------------------------------
Robert F. Cromwell
</TABLE>
<PAGE> 191
<TABLE>
<CAPTION>
Name Title Date
- ----------------------------------- ---------------------------------- -----------------
<S> <C> <C>
/s/ KARL D. GRIFFIN Director October 16, 1998
- ---------------------------------
Karl D. Griffin
/s/ HAROLD I. STEVENSON Director October 16, 1998
- ---------------------------------
Harold I. Stevenson
/s/ LARRY J. BAKER Senior Vice President, Chief October 16, 1998
- --------------------------------- Financial Officer and Treasurer
Larry J. Baker (principal financial and
accounting officer)
</TABLE>
<PAGE> 1
P&B DRAFT - 9/25/98
COMMUNITY SAVINGS BANKSHARES, INC.
Up to 7,753,143 Shares
(Anticipated Maximum)
COMMON STOCK
($1.00 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
October ___, 1998
Friedman, Billings, Ramsey & Co., Inc.
1001 Nineteenth Street North
Arlington, Virginia 22209
Ladies and Gentlemen:
The Primary Parties, e.g. Community Savings Bankshares, Inc. a Delaware
corporation (the "Company"), Community Savings Bankshares, Inc., a federal
corporation (the "Mid-Tier Holding Company"), ComFed, M.H.C. (the "MHC") and
Community Savings, F. A., North Palm Beach, Florida, a federally chartered
savings and loan association (the "Association"), with its deposit accounts
insured by the Savings Association Insurance Fund ("SAIF") administered by the
Federal Deposit Insurance Corporation ("FDIC"), hereby confirm their agreement
with Friedman, Billings, Ramsey & Co., Inc. (the "Agent") as follows (defined
terms used herein shall have the same definition given in the Prospectus dated
October ___, 1998 unless otherwise defined herein):
SECTION 1. THE OFFERING. The Mid-Tier Holding Company will adopt an
interim federal stock charter and thereafter merge into the Association with the
Association as the surviving entity. The MHC, in accordance with the Plan of
Conversion of Agreement and Plan of Reorganization (the "Plan") will then
convert into an interim federal stock savings bank and merge with and into the
Association, pursuant to which the MHC will cease to exist (the "Conversion").
In connection with the Conversion, each stockholder of the Mid-Tier
<PAGE> 2
Holding Company immediately prior to the Conversion, except the MHC, ("Public
Stockholders") will receive Exchange Shares of the Company's common stock
("Common Stock," or "Shares") pursuant to a ratio that will result in Public
Stockholders owning in the aggregate immediately after the Conversion the same
percentage of the outstanding shares of Common Stock, before giving effect to
(a) the payment of cash in lieu of fractional shares; (b) the purchase by such
stockholders of additional shares of Common Stock in the Offering; and (c)
subject to an adjustment by the OTS to reflect the MHC's waiver of certain
dividends declared by the Association or the Mid-Tier Holding Company in the
total amount of $__ million.
Pursuant to the Plan and in connection with the Conversion, the Company
is offering up to 7,753,143 shares of its common stock (the "Conversion Stock")
in a subscription and community offering (the "Offerings"). Conversion Stock is
first being offered in a subscription offering with nontransferable subscription
rights being granted, in the following order of priority, to (i) depositors of
the Association with account balances of $50.00 or more as of the close of
business on June 30, 1997 ("Eligible Account Holders"); (ii) the Employee Stock
Ownership Plan (the ESOP"); (iii) depositors of the Association with account
balances of $50.00 or more as of the close of business on __________, 1998
(other than Eligible Account Holders) ("Supplemental Eligible Account Holders");
(iv) depositors of the Association as of the close of business on _________,
1998 (other than Eligible Account Holders and Supplemental Eligible Account
Holders) and certain borrowers ("Other Members") and (v) directors, officers and
employees of the Association. Subscription rights will expire if not exercised
by Noon, Eastern Time, on _________, 1998, unless extended.
Subject to the prior rights of holders of subscription rights,
Conversion Stock not subscribed for in the Subscription Offering is being
offered first to Eligible Public Shareholders and then in the Community Offering
to certain members of the general public to whom a copy of the Prospectus, stock
order form and certification is delivered, with preference given to natural
persons residing in the Community. The Primary Parties reserve the absolute
right to reject or accept any orders in the Community Offering in whole or in
part, either at the time of receipt of an order or as soon as practicable
following the Expiration Date.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-_____) (the
"Registration Statement") containing a prospectus relating to the Offerings for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The prospectus, as
amended, on file with the Commission at the time the Registration Statement
initially became effective is hereinafter called the "Prospectus," except that
if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the
rules and regulations of the
2
<PAGE> 3
Commission under the 1933 Act (the "1933 Act Regulations") differing from the
prospectus on file at the time the Registration Statement initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission.
In accordance with the regulations of the Office of Thrift Supervision
("OTS") governing the conversions of savings associations (the "Conversion
Regulations"), the MHC has filed with the OTS an Application for Conversion on
Form AC (the "Conversion Application"), including the prospectus, and has filed
such amendments thereto, if any, as may have been required by the OTS. The
Conversion Application has been approved by the OTS and the related Prospectus
has been authorized for use by the OTS.
SECTION 2. RETENTION OF THE AGENT; COMPENSATION; SALE AND DELIVERY OF
THE SHARES. Subject to the terms and conditions herein set forth, the Company,
the Mid-Tier Holding Company, the MHC and the Association hereby appoint the
Agent as their financial advisor and marketing agent to utilize its best efforts
to solicit subscriptions for Shares of the Company's Common Stock and to advise
and assist the Company and the Association with respect to the Company's sale of
the Shares in the Offerings and in the areas of market making, research coverage
and syndicate formation (if necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company, the
Mid-Tier Holding Company, the MHC and the Association as to the matters set
forth in the letter agreement ("Letter Agreement"), dated August 19, 1998,
between the Association and the Agent (a copy of which is attached hereto as
Exhibit A). It is acknowledged by the Company, the MHC and the Association that
the Agent shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with all applicable laws,
regulations, decisions or orders. In the event of a Community Offering, the
Agent will assemble and manage a selling group of broker-dealers which are
members of the National Association of Securities Dealers, Inc. (the "NASD") to
participate in the solicitation of purchase orders for shares under a selected
dealers' agreement ("Selected Dealers' Agreement"), the form of which is set
forth as Exhibit B to this Agreement.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Company or
upon termination of the Offerings, but in no event later than 45 days after the
completion of the Subscription Offering (the "End Date"). All fees or expenses
due to the Agent but unpaid will be payable to the Agent in next day funds at
the earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offerings are extended beyond the End Date, the Company, the
3
<PAGE> 4
Mid-Tier Holding Company, the MHC, the Association and the Agent may agree to
renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 5,730,659
Shares within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offerings are terminated for any reason not
attributable to the action or inaction of the Agent, the Agent shall be paid the
fees due to the date of such termination pursuant to subparagraphs (a) and (b)
below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Company, the Mid-Tier Holding Company, the MHC, the
Association and the Agent (it being understood that such date shall not be more
than ten business days after termination of the Offering) or such other time or
place as shall be agreed upon by the Company, the Mid-Tier Holding Company, the
MHC, the Association and the Agent. Certificates for shares shall be delivered
directly to the purchasers in accordance with their directions. The date upon
which the Company shall release or deliver the Shares sold in the Offering, in
accordance with the terms herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) An advisory and management fee to the Agent in the amount of
$50,000, of which $25,000 has been paid and of which $25,000
will be paid upon OTS approval of the Plan application. Such
fees shall be deemed to be earned when due. Should the
Conversion be terminated for any reason not attributable to
the action or inaction of the Agent, the Agent shall have
earned and be entitled to be paid fees accruing through the
stage at which point the termination occurred, including any
accrued legal fees expanded by the Agent.
4
<PAGE> 5
(b) A marketing fee of 0.75% of the aggregate Purchase Price of
Common Stock sold in the Subscription Offering, Community
Offering, and to the Eligible Public Shareholders, excluding
those shares purchased by the Association's officers,
directors, or employees (or members of their immediate
families) or by any ESOP, charitable foundation, tax-qualified
or stock compensation plans (except IRA's) or similar plan
created by the Association for some or all of its directors or
employees. The management fee of $50,000 will be subtracted
from the marketing fee.
(c) The decision to utilize other selected Broker-Dealers will be
made jointly by the Agent and the Association. Selected
broker-dealers who assist in the subscription or purchase,
excluding those shares purchased by the Association's
officers, directors or employees or by any ESOP, charitable
foundation, tax-qualified or stock based compensation plans
(except IRA's) or similar plan created by the Association for
some or all of its directors or employees or by member
depositors in the original subscription phase of the offering,
will be paid a fee not to exceed 0.75% of the aggregate Actual
Purchase Price of the shares of common stock sold by them in
the Subscription and/or Community Offerings. The Agent's fee
for such shares shall equal 0.75% of the aggregate Actual
Purchase Price of the shares of common stock sold by selected
broker-dealers in the Subscription and/or Community Offering.
Fees with respect to subscriptions or purchases effected with
the assistance of Registered Representatives employed by a
Broker/Dealer other than the Agent shall be paid to the Agent
at Closing and then transmitted by the Agent to such
Broker/Dealer.
(d) The Association and the Company hereby agree to reimburse the
Agent, from time to time upon the Agent's request, for its
reasonable out-of-pocket expenses, including without
limitation, accounting, communication, travel expenses, and
legal fees and expenses, for amounts not to exceed $70,000.
The Association will bear the expenses of the Offerings
customarily borne by issuers including, without limitation,
OTS, SEC, "Blue Sky," and NASD filing and registration fees;
the fees of the Association's accountants, conversion agent,
data processor, attorneys, appraiser, transfer agent and
registrar, printing, mailing and marketing expenses associated
with the Conversion; and the fees set forth under this Section
2.
Full payment of the Agent's actual and accountable expenses, advisory
fees and compensation shall be made in next day funds on the earlier of the
Closing Date or a determination by the Association to terminate or abandon the
Plan.
5
<PAGE> 6
In the event of an oversubscription or other event, which causes the
Offerings to continue beyond the original expiration date or a resolicitation of
subscribers, the parties agree to renegotiate the expense cap on legal fees
applicable to the Agent.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be initially offered
in the Offerings at the Purchase Price as defined and set forth on the cover
page of the Prospectus.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Company, the Mid-Tier
Holding Company, the MHC and the Association jointly and severally represent and
warrant to the Agent on the date hereof as follows:
(a) The Registration Statement was declared effective by the
Commission on October ___, 1998. At the time the Registration
Statement, including the Prospectus contained therein (including any
amendment or supplement thereto), became effective, the Registration
Statement complied in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the Registration
Statement, including the Prospectus contained therein (including any
amendment or supplement thereto), and any information regarding the
Company or the Association contained in Sales Information (as such term
is defined in Section 8 hereof) authorized by the Company or the
Association for use in connection with the Offerings, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c) Prospectus was filed
with the Commission and at the Closing Date referred to in Section 2,
the Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), any information
regarding the Company or the Association contained in Sales Information
(as such term is defined in Section 8 hereof) authorized by the Company
or the Association for use in connection with the Offerings will not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
Section 4(a) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Company or the Association by the Agent expressly regarding the
Agent for use in the Prospectus under the caption "The
Conversion-Marketing Arrangements" or statements in or omissions from
any Sales Information or information filed pursuant to state securities
or blue sky laws or regulations regarding the Agent.
(b) The Conversion Application was approved by the OTS on
_______, 1998 and the related Prospectus has been authorized for use by
the OTS. At the time of the approval of the Conversion Application,
including the Prospectus (including any
6
<PAGE> 7
amendment or supplement thereto), by the OTS and at all times
subsequent thereto until the Closing Date, the Conversion Application,
including the Prospectus (including any amendment or supplement
thereto), will comply in all material respects with the Conversion
Regulations except to the extent waived by the OTS. The Conversion
Application, including the Prospectus (including any amendment or
supplement thereto), does not include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 4(b)
shall not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company, the
Mid-Tier Holding Company, the MHC or the Association by the Agent
expressly regarding the Agent for use in the Prospectus contained in
the Conversion Application under the caption "The Conversion-Marketing
Arrangements" or statements in or omissions from any sales information
or information filed pursuant to state securities or blue sky laws or
regulations regarding the Agent.
(c) No order has been issued by the SEC or the OTS preventing
or suspending the use of the Prospectus and no action by or before any
such government entity to revoke any approval, authorization or order
of effectiveness related to the Conversion is, to the best knowledge of
the Company, the Mid-Tier Holding Company, the MHC or the Association,
pending or threatened.
(d) At the Closing Date referred to in Section 2, the Plan
will have been adopted by the Boards of Directors of the Company, the
Mid-Tier Holding Company, the MHC and the Association and the offer and
sale of the Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations, and all other
applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company, the Mid-Tier Holding Company, the
MHC or the Association by the OTS, the Commission or any other
regulatory authority and in the manner described in the Prospectus. To
the best knowledge of the Company, no person has sought to obtain
review of the final action of the OTS in approving or taking no
objection to the Plan or in approving or taking no objection to the
Conversion or the Holding Company Application pursuant to the
Conversion Regulations or any other statute or regulation.
(e) The Association has been organized and is a validly
existing federally chartered savings and loan association in stock form
of organization and upon the Conversion will continue as such, is duly
authorized to conduct its business and own its property as described in
the Registration Statement and the Prospectus; the Association has
obtained all material licenses, permits and other governmental
authorizations
7
<PAGE> 8
currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the Association is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of its
business; the Association is existing under the laws of the United
States and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which its
ownership of property or leasing or property or the conduct of its
business requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations or income of the Association. The Association
does not own equity securities or any equity interest in any other
business enterprise except as described in the Prospectus or as would
not be material to the operations of the Association. Upon completion
of the sale by the Company of the Shares contemplated by the
Prospectus, (i) all of the authorized and outstanding capital stock of
the Association will be owned by the Company, and (ii) the Company will
have no direct subsidiaries other than the Association. The Conversion
will have been effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except
with respect to the filing of certain post-sale, post-Conversion
reports, and documents in compliance with the 1933 Act Regulations or
the OTS' letters of approval or no objection taken, all terms,
conditions, requirements and provisions with respect to the Conversion
(except those that are conditions subsequent) imposed by the Commission
or the OTS, if any, will have been complied with by the Company, the
Mid-Tier Holding Company, the MHC and the Association in all material
respects or appropriate waivers will have been obtained and all
material notice and waiting periods will have been satisfied, waived or
elapsed.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and the Company is qualified
to do business as a foreign corporation in each jurisdiction in which
the conduct of its business requires such qualification, except where
the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or the business, operations or
income of the Company. The Company has obtained all material licenses,
permits and other governmental authorizations currently required for
the conduct of its business; all such licenses, permits and
governmental authorizations are in full force and effect, and the
Company is in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its business.
8
<PAGE> 9
(g) The Mid-Tier Holding Company has been duly organized and
is a validly existing federally chartered corporation, with corporate
power and the authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus. The Mid-Tier Holding Company is qualified to do business as
a foreign corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to so
qualify will not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income of the
Mid-Tier Holding Company. The Mid-Tier Holding Company has obtained all
material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the Mid-Tier Holding Company is in all material respects complying
with all laws, rules, regulations and orders applicable to the
operation of its business.
(h) The MHC has been duly organized and is a validly existing
federally chartered mutual holding company, with corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus,
and the MHC is qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations or income of the MHC. The MHC has obtained all
material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses,
permits and governmental authorizations are in full force and effect,
and the MHC is in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its business.
(i) The Association is a member of the Federal Home Loan Bank
of Atlanta ("FHLB-Atlanta"). The deposit accounts of the Association
are insured by the FDIC up to the applicable limits; and no proceedings
for the termination or revocation of such insurance are pending or, to
the best knowledge of the Company, the Mid-Tier Holding Company, the
MHC or the Association, threatened. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders will be duly
established in accordance with the requirements of the Conversion
Regulations.
(j) The Company, the Mid-Tier Holding Company, the MHC and the
Association have good and marketable title to all real property and
other assets material to the business of the Company, the Mid-Tier
Holding Company, the MHC and the Association and to those properties
and assets described in the Registration Statement and Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
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<PAGE> 10
restrictions, except such as are described in the Registration
Statement and Prospectus or are not material to the business of the
Company, the Mid-Tier Holding Company, the MHC and the Association
taken as a whole; and all of the leases and subleases material to the
business of the Company, the Mid-Tier Holding Company, the MHC and the
Association under which the Company, the Mid-Tier Holding Company, the
MHC or the Association hold properties, including those described in
the Registration Statement and Prospectus, are in full force and
effect.
(k) The Company, the Mid-Tier Holding Company, the MHC and the
Association have received an opinion of their special counsel, Elias,
Matz, Tiernan & Herrick, LLP ("Elias Matz"), with respect to the
federal income tax consequences of the conversion of the MHC from
mutual to stock form, and the sale of the Shares as described in the
Registration Statement and the Prospectus, and an opinion from Crowe,
Chizek & Company, LLP ("Crowe Chizek") with respect to the Florida
state income tax consequences of the proposed transaction; all material
aspects of the opinions of Elias, Matz and Crowe Chizek are accurately
summarized in the Prospectus; and the facts and representations upon
which such opinions are based are truthful, accurate and complete.
(l) The Company, the Mid-Tier Holding Company, the MHC and the
Association have all such power, authority, authorizations, approvals
and orders as may be required to enter into this Agreement, to carry
out the provisions and conditions hereof and to issue and sell the
Shares to be sold by the Company as provided herein and as described in
the Prospectus.
(m) The Company, the Mid-Tier Holding Company, the MHC and the
Association are not in violation of any directive received from the
OTS, the FDIC, or any other agency to make any material change in the
method of conducting their businesses so as to comply in all material
respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of
the OTS and the FDIC) and, except as set forth in the Registration
Statement and the Prospectus, there is no suit or proceeding, charge or
action before or by any court, regulatory authority or governmental
agency or body, pending or, to the knowledge of the Company, the
Mid-Tier Holding Company, the MHC and the Association, threatened,
which might materially and adversely affect the Conversion, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement
and the Prospectus or which might result in any material adverse change
in the condition (financial or otherwise), earnings, capital or
properties of the Company, the Mid-Tier Holding Company, or the
Association, or which would materially affect their properties and
assets.
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<PAGE> 11
(n) The financial statements which are included in the
Prospectus fairly present the financial condition, results of
operations, retained earnings and cash flows of the Company, the
Mid-Tier Holding Company, and/or the Association (as applicable) at the
respective dates thereof and for the respective periods covered thereby
and comply as to form in all material respects with the applicable
accounting requirements of Titles 12 of the Code of Federal Regulations
and generally accepted accounting principles (including those requiring
the recording of certain assets at their current market value). Such
financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied through the periods
involved, present fairly in all material respects the information
required to be stated therein and are consistent with the most recent
financial statements and other reports filed by the Association with
the OTS and the FDIC, except that accounting principles employed in
such regulatory filings conform to the requirements of such authorities
and not necessarily to generally accepted accounting principles. The
other financial, statistical and pro forma information and related
notes included in the Prospectus present fairly the information shown
therein on a basis consistent with the audited and unaudited financial
statements of the Association included in the Prospectus, and as to the
pro forma adjustments, the adjustments made therein have been properly
applied on the basis described therein.
(o) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus; (i) there has
not been any material adverse change, financial or otherwise, in the
condition of the Company, the Mid-Tier Holding Company, the MHC, the
Association or in the earnings, capital or properties of the Company,
the Mid-Tier Holding Company, the MHC or the Association, whether or
not arising in the ordinary course of business; (ii) there has not been
any material increase in the long-term debt of the Association or in
loans past due 90 days or more or real estate acquired by foreclosure,
by deed-in-lieu of foreclosure or deemed in-substance foreclosure or
any material decrease in surplus and reserves or total assets of the
Association nor has the Company, the Mid-Tier Holding Company or the
Association issued any securities or incurred any liability or
obligation for borrowing other than in the ordinary course of business;
(iii) there have not been any material transactions entered into by the
Company, the Mid-Tier Holding Company, the MHC or the Association,
except with respect to those transactions entered into in the ordinary
course of business; (iv) the capitalization, liabilities, assets,
properties and business of the Company, the Mid-Tier Holding Company,
the MHC and the Association conform in all material respects to the
descriptions thereof contained in the Prospectus; and (v) neither the
Company, the Mid-Tier Holding Company, the MHC nor the Association has
any material contingent liabilities, except as set forth in the
Prospectus.
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<PAGE> 12
(p) As of the date hereof and as of the Closing Date, neither
the Company, the Mid-Tier Holding Company, the MHC nor the Association
is in violation of its certificate of incorporation or bylaws or
charter or bylaws, as applicable, or in default in the performance or
observance of any material obligation, agreement, covenant, or
condition contained in any material contract, lease, loan agreement,
indenture or other instrument to which it is a party or by which it or
any of its property may be bound; the consummation of the Conversion,
the execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have been duly and
validly authorized by all necessary corporate action on the part of the
Company and the Association and this Agreement has been validly
executed and delivered by the Company, the Mid-Tier Holding Company,
the MHC and the Association and is the valid, legal and binding
Agreement of the Company, the Mid-Tier Holding Company, the MHC and the
Association enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or other
similar laws now or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally or the rights of creditors
of Federal savings institutions and their holding companies, (ii)
general equitable principles, (iii) laws relating to the safety and
soundness of insured depository institutions, and (iv) applicable law
or public policy with respect to the indemnification and/or
contribution provisions contained herein, and except that no
representation or warranty need be made as to the effect or
availability of equitable remedies or injunctive relief (regardless of
whether such enforceability is considered in a proceeding in equity or
at law). The consummation of the transactions herein contemplated will
not: (i) conflict with or constitute a breach of, or default under, the
certificate of incorporation and bylaws of the Company or the charters
and bylaws of the Association, the Mid-Tier Holding Company or the MHC
(in either mutual or capital stock form), or any material contract,
lease or other instrument to which the Company, the Mid-Tier Holding
Company, the MHC or the Association has a beneficial interest, or any
applicable law, rule, regulation or order; (ii) violate any
authorization, approval, judgment, decree, order, statute, rule or
regulation applicable to the Company, the Mid-Tier Holding Company, the
MHC or the Association, except for such violations which would not have
a material adverse effect on the financial condition and results of
operations of the Company, the Mid-Tier Holding Company, the MHC and
the Association on a consolidated basis; or (iii) with the exception of
the liquidation account established in the Conversion, result in the
creation of any material lien, charge or encumbrance upon any property
of the Company, the Mid-Tier Holding Company, the MHC or the
Association.
(q) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default on the
part of the Company, the Mid-Tier Holding Company, the MHC or the
Association, in the due performance and
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<PAGE> 13
observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, note, bank loan or credit agreement or any
other instrument or agreement to which the Company, the Mid-Tier
Holding Company, the MHC or the Association is a party or by which any
of them or any of their property is bound or affected except such
defaults which would not have a material adverse effect on the
financial condition or results of operations of the Company, the
Mid-Tier Holding Company, the MHC and the Association on a consolidated
basis; such agreements are in full force and effect; and no other party
to any such agreements has instituted or, to the best knowledge of the
Company, the Mid-Tier Holding Company, the MHC or the Association,
threatened any action or proceeding wherein the Company, the Mid-Tier
Holding Company, the Association or the MHC would or might be alleged
to be in default thereunder under circumstances where such action or
proceeding, if determined adversely to the Company, the Mid-Tier
Holding Company, the MHC or the Association, would have a material
adverse effect on the Company, the Mid-Tier Holding Company, the MHC
and the Association, taken as a whole.
(r) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company will be within the
range set forth in the Prospectus under the caption "Capitalization";
the Shares will have been duly and validly authorized for issuance and,
when issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan and in
the Prospectus, will be duly and validly issued, fully paid and
non-assessable; no preemptive rights exist with respect to the Shares;
and the terms and provisions of the Shares will conform in all material
respects to the description thereof contained in the Registration
Statement and the Prospectus. To the best knowledge of the Company, the
Mid-Tier Holding Company, the MHC and the Association, upon the
issuance of the Shares, good title to the Shares will be transferred
from the Company to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers
thereof by third-party claimants.
(s) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except for
the approval or non-objection, as applicable, of the Commission, the
OTS, and any necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various states
in which the Shares are to be offered, and except as may be required
under the rules and regulations of the NASD and/or the Nasdaq National
Market.
(t) Deloitte & Touche ("D&T"), which has certified the
financial statements of the Mid-Tier Holding Company and the
Association included in the Prospectus as of December 31, 1997,
December 31, 1996 and September 30, 1996, and for the year
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<PAGE> 14
ended December 31, 1997, for the three months ended December 31, 1996,
and for each of the two years in the period ended September 30, 1996,
and has advised the Company, the Mid-Tier Holding Company, the MHC and
the Association in writing that they are, with respect to the Company,
the Mid-Tier Holding Company, the MHC and the Association, independent
public accountants within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and Title 121 of the Code of Federal Regulations and
Section 571.2(c)(3).
(u) FinPro, Inc. which has prepared the Association's
Conversion Valuation Appraisal Report as of August 13, 1998 (as amended
or supplemented, if so amended or supplemented) (the "Appraisal"), has
advised the Company in writing that it is independent of the Company,
the Mid-Tier Holding Company, the MHC and the Association within the
meaning of the Conversion Regulations.
(v) The Company, the Mid-Tier Holding Company, the MHC and the
Association have timely filed all required federal, state and local tax
returns; the Company, the Mid-Tier Holding Company, the MHC and the
Association have paid all taxes that have become due and payable in
respect of such returns, except where permitted to be extended, have
made adequate reserves for similar future tax liabilities and no
deficiency has been asserted with respect thereto by any taxing
authority.
(w) The Company, the Mid-Tier Holding Company, the MHC and the
Association are in compliance in all material respects with the
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended,
and the regulations and rules thereunder.
(x) To the knowledge of the Company, the Mid-Tier Holding
Company, the MHC and the Association, neither the Company, the Mid-Tier
Holding Company, the MHC, the Association nor employees of the Company,
the Mid-Tier Holding Company, the MHC or the Association have made any
payment of funds of the Company, the Mid-Tier Holding Company, the MHC
or the Association as a loan for the purchase of the Shares (other than
a loan by the Company to the ESOP) or made any other payment of funds
prohibited by law, and no funds have been set aside to be used for any
payment prohibited by law.
(y) Prior to the Conversion, the Association had _________
shares of authorized capital stock, of which __________ shares were
issued and outstanding, the Mid-Tier Holding Company had __________
shares of authorized capital stock, of which ___ shares were issued and
outstanding, the Company had ______ shares of authorized capital stock,
of which ______ shares were issued and outstanding, and the MHC was not
authorized to issue shares. Neither the Association, the Company, the
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<PAGE> 15
Mid-Tier Holding Company nor the MHC has: (i) other than as described
in the Prospectus issued any securities within the last 18 months
(except for notes to evidence other bank loans and reverse repurchase
agreements or other liabilities in the ordinary course of business or
as described in the Prospectus); (ii) had any material dealings within
the 12 months prior to the date hereof with any member of the NASD, or
any person related to or associated with such member, other than
discussions and meetings relating to the proposed offering and routine
purchases and sales of United States government and agency securities;
(iii) entered into a financial or management consulting agreement
except as contemplated hereunder and except for the Letter Agreement
set forth in Exhibit A; and (iv) engaged any intermediary between the
Agent and the Company, the MHC and the Association in connection with
the offering of the Shares, and no person is being compensated in any
manner for such service.
(z) The Company, the Mid-Tier Holding Company, the MHC and
the Association have not relied upon the Agent or the Agent's counsel
for any legal, tax or accounting advice in connection with the
Conversion.
(aa) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
Any certificates signed by an officer of the Company, the Mid-Tier
Holding Company, the MHC or the Association pursuant to the conditions of this
Agreement and delivered to the Agent or its counsel that refers to this
Agreement shall be deemed to be a representation and warranty by the Company,
the Mid-Tier Holding Company, the MHC or the Association to the Agent as to the
matters covered thereby with the same effect as if such representation and
warranty were set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AGENT. The Agent
represents and warrants to the Company, the Mid-Tier Holding Company, the MHC
and the Association that:
(a) The Agent is a corporation and is validly existing in
good standing under the laws of the State of Delaware with
full power and authority to provide the services to be
furnished to the Association, the MHC and the Company
hereunder.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action on the
part of the Agent, and this Agreement has been duly and
validly executed and delivered by the Agent and is the legal,
valid and binding agreement of the Agent, enforceable in
accordance with its terms.
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<PAGE> 16
(c) Each of the Agent and its employees, agents and
representatives who shall perform any of the services
hereunder shall be duly authorized and empowered, and shall
have all licenses, approvals and permits necessary to perform
such services, including appropriate licenses and the
Company's approvals in the various states in which securities
shall be offered.
(d) The execution and delivery of this Agreement by the Agent,
the consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not
conflict with, or result in a breach of, any of the terms,
provisions or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a
default) under, the articles of incorporation of the Agent or
any agreement, indenture or other instrument to which the
Agent is a party or by which it or its property is bound.
(e) No approval of any regulatory or supervisory or other
public authority is required in connection with the Agent's
execution and delivery of this Agreement, except as may have
been received.
(f) There is no suit or proceeding, charge or action before or
by any court, regulatory authority or government agency or
body or, to the knowledge of the Agent, pending or threatened,
which might materially adversely affect the Agent's
performance of this Agreement.
SECTION 5.1 COVENANTS OF THE COMPANY, THE MID-TIER HOLDING COMPANY,
THE MHC, AND THE ASSOCIATION. The Company, the Mid-Tier Holding Company, the MHC
and the Association hereby jointly and severally covenant with the Agent as
follows:
(a) The Company has filed the Registration Statement with the
Commission. The Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or
supplement to the Registration Statement without providing the Agent
and its counsel an opportunity to review such amendment or supplement
or file any amendment or supplement to which amendment or supplement
the Agent or its counsel shall reasonably object.
(b) The MHC has filed the Conversion Application with the OTS.
The Association will not, at any time after the Conversion Application
is approved by the OTS, file any amendment or supplement to such
Conversion Application without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any
amendment or supplement to which amendment or supplement the Agent or
its counsel shall reasonably object.
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<PAGE> 17
(c) The Company and the Association will use their best
efforts to cause any post-effective amendment to the Registration
Statement to be declared effective by the Commission and any
post-effective amendment to the Conversion Application to be approved
by the OTS and will immediately upon receipt of any information
concerning the events listed below notify the Agent: (i) when the
Registration Statement, as amended, has become effective; (ii) when the
Conversion Application, as amended, has been approved by the OTS; (iii)
of any comments from the Commission, the OTS or any other governmental
entity with respect to the Conversion or the transactions contemplated
by this Agreement; (iv) of the request by the Commission, the OTS or
any other governmental entity for any amendment or supplement to the
Registration Statement or the Conversion Application or for additional
information; (v) of the issuance by the Commission, the OTS or any
other governmental entity of any order or other action suspending the
Offering or the use of the Registration Statement or the Prospectus or
any other filing of the Company or the Association under the Conversion
Regulations, or other applicable law, or the threat of any such action;
(vi) the issuance by the Commission, the OTS or any state authority of
any stop order suspending the effectiveness of the Registration
Statement or the approval of the Conversion Application, or of the
initiation or threat of initiation or threat of any proceedings for any
such purpose; or (vii) of the occurrence of any event mentioned in
paragraph (h) below. The Company, the Mid-Tier Holding Company, the MHC
and the Association will make every reasonable effort (i) to prevent
the issuance by the Commission, the OTS or any state authority of any
such order and, if any such order shall at any time be issued, (ii) to
obtain the lifting thereof at the earliest possible time.
(d) The Company, the Mid-Tier Holding Company, the MHC and the
Association will deliver to the Agent and to its counsel two conformed
copies of the Registration Statement and the Conversion Application, as
originally filed and of each amendment or supplement thereto, including
all exhibits. Further, the Company, the Mid-Tier Holding Company, the
MHC and the Association will deliver such additional copies of the
foregoing documents to counsel to the Agent as may be required for any
NASD and blue sky filings.
(e) The Company, the Mid-Tier Holding Company, the MHC and the
Association will furnish to the Agent, from time to time during the
period when the Prospectus (or any later prospectus related to this
offering) is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies
of such Prospectus (as amended or supplemented) as the Agent may
reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or the rules and regulations
promulgated under the 1934 Act (the "1934 Act Regulations"). The
Company authorizes the Agent to use the
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<PAGE> 18
Prospectus (as amended or supplemented, if amended or supplemented) in
any lawful manner contemplated by the Plan in connection with the sale
of the Shares by the Agent.
(f) The Company, the Mid-Tier Holding Company, the MHC and the
Association will comply with any and all material terms, conditions,
requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the Commission, the OTS,
the Conversion Regulations or the OTS, and by the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and when the
Prospectus is required to be delivered, the Company, the Mid-Tier
Holding Company, the MHC and the Association will comply, at their own
expense, with all material requirements imposed upon them by the
Commission, the OTS, the Conversion Regulations or the OTS, and by the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, including, without limitation, Rule 10b-5 under the 1934
Act, in each case as from time to time in force, so far as necessary to
permit the continuance of sales or dealing in shares of Common Stock
during such period in accordance with the provisions hereof and the
Prospectus.
(g) If, at any time during the period when the Prospectus
relating to the Shares is required to be delivered, any event relating
to or affecting the Company, the Mid-Tier Holding Company, the MHC or
the Association shall occur, as a result of which it is necessary or
appropriate, in the opinion of counsel for the Company, the Mid-Tier
Holding Company, the MHC and the Association or in the reasonable
opinion of the Agent's counsel, to amend or supplement the Registration
Statement or Prospectus in order to make the Registration Statement or
Prospectus not misleading in light of the circumstances existing at the
time the Prospectus is delivered to a purchaser, the Company and the
Association will at their expense, prepare and file with the Commission
and the OTS and furnish to the Agent a reasonable number of copies of
an amendment or amendments of, or a supplement or supplements to, the
Registration Statement or Prospectus (in form and substance
satisfactory to the Agent and its counsel after a reasonable time for
review) which will amend or supplement the Registration Statement or
Prospectus so that as amended or supplemented it will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the
Company, the Mid-Tier Holding Company, the MHC and the Association each
will timely furnish to the Agent such information with respect to
itself as the Agent may from time to time reasonably request.
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<PAGE> 19
(h) The Company, the Mid-Tier Holding Company, the MHC and the
Association will take all necessary actions, in cooperating with the
Agent, and furnish to whomever the Agent may direct, such information
as may be required to qualify or register the Shares for offering and
sale by the Company or to exempt such Shares from registration, or to
exempt the Company as a broker-dealer and its officers, directors and
employees as broker-dealers or agents under the applicable securities
or blue sky laws of such jurisdictions in which the Shares are required
under the Conversion Regulations to be sold or as the Agent and the
Company, the Mid-Tier Holding Company, the MHC and the Association may
reasonably agree upon; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to
qualify to do business in any jurisdiction in which it is not so
qualified. In each jurisdiction where any of the Shares shall have been
qualified or registered as above provided, the Company will make and
file such statements and reports in each fiscal period as are or may be
required by the laws of such jurisdiction.
(i) The liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders will be duly
established and maintained by the Association in accordance with the
requirements of the OTS, and such Eligible Account Holders and
Supplemental Eligible Account Holders who continue to maintain their
savings accounts in the Association will have an inchoate interest in
their pro rata portion of the liquidation account which shall have a
priority superior to that of the holders of shares of Common Stock in
the event of a complete liquidation of the Association.
(j) The Company, the MHC, the Mid-Tier Holding Company and the
Association will not sell or issue, contract to sell or otherwise
dispose of, for a period of 90 days after the Closing Date, without the
Agent's prior written consent, any shares of Common Stock other than
the Shares or other than in connection with any plan or arrangement
described in the Prospectus.
(k) The Company shall maintain the effectiveness of the
registration of its Common Stock under Section 12 (g) of the 1934 Act
for not less than three (3) years or such shorter period as may be
required by the OTS.
(l) During the period during which the Company's Common Stock
is registered under the 1934 Act or for three years from the date
hereof, whichever period is greater, the Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year
an annual report of the Company (including a consolidated balance sheet
and statements of consolidated income, stockholders' equity and cash
flows of the Company and its subsidiaries as at the end of and for such
year, certified
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<PAGE> 20
by independent public accountants in accordance with Regulation S-X
under the 1933 Act and the 1934 Act).
(m) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as practicable after
such information is publicly available, a copy of each report of the
Company furnished to or filed with the Commission under the 1934 Act or
any national securities exchange or system on which any class of
securities of the Company is listed or quoted (including, but not
limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy
statements and annual reports to stockholders), (ii) a copy of each
other non-confidential report of the Company mailed to its stockholders
or filed with the Commission, the OTS or any other supervisory or
regulatory authority or any national securities exchange or system on
which any class of securities of the Company is listed or quoted, each
press release and material news items and additional documents and
information with respect to the Company or the Association as the Agent
may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Association
as the Agent may reasonably request.
(n) The Company and the Association will use the net proceeds
from the sale of the Shares in the manner set forth in the Prospectus
under the caption "Use of Proceeds."
(o) Other than as permitted by the Conversion Regulations, the
Home Owners Loan Act of 1933 (the "HOLA"), the 1933 Act, the 1933 Act
Regulations, and the laws of any state in which the Shares are
registered or qualified for sale or exempt from registration, neither
the Company, the MHC, the Mid-Tier Holding Company nor the Association
will distribute any prospectus, offering circular or other offering
material in connection with the offer and sale of the Shares.
(p) The Company will use its best efforts to (i) encourage and
assist two market makers to maintain a market for the Shares and (ii)
continue to list the Shares on the Nasdaq National Market.
(q) The Association will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offerings on an interest bearing basis
at the rate described in the Prospectus until the Closing Date and
satisfaction of all conditions precedent to the release of the
Association's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offerings in accordance with
the Plan and as described in the Prospectus or until refunds of such
funds have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as
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described in the Prospectus. The Association will maintain such records
of all funds received to permit the funds of each subscriber to be
separately insured by the FDIC (to the maximum extent allowable) and to
enable the Association to make the appropriate refunds of such funds in
the event that such refunds are required to be made in accordance with
the Plan and as described in the Prospectus.
(r) The Company and the Association will take such actions and
furnish such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with the NASD's
"Interpretation Relating to Free Riding and Withholding."
(s) Neither the Association nor the MHC will amend the Plan of
Conversion without notifying the Agent prior thereto.
(t) The Company shall assist the Agent, if necessary, in
connection with the allocation of the Shares in the event of an
oversubscription and shall provide the Agent with any information
necessary to assist the Company in allocating the Shares in such event
and such information shall be accurate and reliable.
(u) Prior to the Closing Date, the Company, the Mid-Tier
Holding Company, the MHC and the Association will inform the Agent of
any event or circumstances of which it is aware as a result of which
the Registration Statement, the Conversion Application and/or
Prospectus, as then amended or supplemented, would contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading.
SECTION 5.2 COVENANTS OF THE AGENT. The Agent hereby covenants
with the Company, the MHC, the Mid-Tier Holding Company and the
Association as follows:
(a) During the period when the Prospectus is used, the Agent
will comply, in all material respects and at its own expense, with all
requirements imposed upon it by the OTS and, to the extent applicable,
by the 1933 Act and the 1934 Act and the rules and regulations
promulgated thereunder.
(b) The Agent shall return unused prospectuses, if any, to the
Company promptly upon the completion of the Conversion.
(c) The Agent will distribute the Prospectuses or offering
materials in connection with the sales of the common stock only in
accordance with OTS regulations, the 1933 Act and the rules and
regulations promulgated thereunder.
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(d) The Agent shall assist the Association in maintaining
arrangements for the deposit of funds and the making of refunds, as
appropriate (as described in Section 5.1(r)), and shall perform the
allocation of shares in the event of an oversubscription, in
conformance with the Plan and applicable regulations and based upon
information furnished to the Agent by the Association (as described in
Section 5.1(v)).
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company,
the MHC, the Mid-Tier Holding Company and the Association jointly and severally
agree to pay or reimburse the Agent for: (a) all filing fees in connection with
all filings with the NASD; (b) any stock issue or transfer taxes which may be
payable with respect to the sale of the Shares; (c) all reasonable expenses of
the Conversion including but not limited to the Company, the Mid-Tier Holding
Company, the MHC and the Association's attorneys' fees, transfer agent,
registrar and other agent charges, fees relating to auditing and accounting or
other advisors and costs of printing all documents necessary in connection with
the Conversion; and (d) all reasonable out-of-pocket expenses incurred by the
Agent not to exceed $70,000 (including legal fees and expenses). Such
out-of-pocket expenses include, but are not limited to, travel, communications
and postage. However, such out-of-pocket expenses do not include expenses
incurred with respect to the matters set forth in (a) or (b) above. In the event
the Company is unable to sell a minimum of 5,730,659 Shares or the Conversion is
terminated or otherwise abandoned, the Company, the Mid-Tier Holding Company,
the MHC and the Association shall reimburse the Agent in accordance with Section
2 hereof but such reimbursement shall not exceed Agent's actual, accountable
out-of-pocket expenses.
SECTION 7. CONDITIONS TO THE AGENT'S OBLIGATIONS. The Agent's
obligations hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived by the Agent, to the condition that all
representations and warranties of the Company, the MHC, the Mid-Tier Holding
Company and the Association herein are, at and as of the commencement of the
Offerings and at and as of the Closing Date, true and correct in all material
respects, the condition that the Company, the MHC, the Mid-Tier Holding Company
and the Association shall have performed all of their obligations hereunder to
be performed on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Company, the MHC, the Mid-Tier
Holding Company and the Association shall have conducted the Conversion
in all material respects in accordance with the Plan, the Conversion
Regulations, and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon them by the OTS.
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(b) The Registration Statement shall have been declared
effective by the Commission, the Conversion Application approved by the
OTS, not later than 5:30 p.m. on the date of this Agreement, or with
the Agent's consent at a later time and date; and at the Closing Date,
no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings
therefore initiated or threatened by the Commission, or any state
authority and no order or other action suspending the authorization of
the Prospectus or the consummation of the Conversion shall have been
issued or proceedings therefore initiated or, to the Company's, the
MHC's or the Association's knowledge, threatened by the Commission, the
OTS or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing
Date and addressed to the Agent and for its benefit, of Elias
Matz, special counsel for the Company, the MHC, the Mid-Tier
Holding Company and the Association, in form and substance to
the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation under the laws of the
State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus. All of the outstanding capital stock of the
Company is duly authorized and validly issued, and upon
payment therefor, will be fully paid and non-assessable.
(ii) The Association has been organized and
is a validly existing federal savings association in capital
stock form of organization, authorized to conduct its business
and own its property as described in the Registration
Statement and Prospectus. All of the outstanding capital stock
of the Association will be authorized and upon payment
therefor, will be validly issued, fully paid and
non-assessable and will be owned by the Company, free and
clear of any liens, encumbrances, claims or other
restrictions.
(iii) The Mid-Tier Holding Company has been
organized as a, and is a validly existing, federal
corporation, authorized to conduct its business and own its
property as described in the Registration Statement and
Prospectus.
(iv) The MHC has been organized and is a
validly existing federal mutual holding company authorized to
conduct its business and own its property as described in the
Registration Statement and Prospectus.
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<PAGE> 24
(v) The Association is a member of the
FHLB-Atlanta. The deposit accounts of the Association are
insured by the FDIC up to the maximum amount allowed under law
and no proceedings for the termination or revocation of such
insurance are pending or, to such counsel's Actual Knowledge,
threatened; the description of the liquidation account as set
forth in the Prospectus under the caption "The
Conversion--Liquidation Rights" to the extent that such
information constitutes matters of law and legal conclusions
has been reviewed by such counsel and is accurate in all
material respects.
(vi) Upon consummation of the Conversion,
the authorized, issued and outstanding capital stock of the
Company will be within the range set forth in the Prospectus
under the caption "Capitalization," and except for shares
issued upon incorporation of the Company no shares of Common
Stock have been issued prior to the Closing Date; at the time
of the Conversion, the Shares subscribed for pursuant to the
Offerings will have been duly and validly authorized for
issuance, and when issued and delivered by the Company
pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and the Prospectus, will
be duly and validly issued and fully paid and non-assessable;
the issuance of the Shares is not subject to preemptive rights
and the terms and provisions of the Shares conform in all
material respects to the description thereof contained in the
Prospectus. To such counsel's Actual Knowledge, upon the
issuance of the Shares, good title to the Shares will be
transferred from the Company to the purchasers thereof against
payment therefor, subject to such claims as may be asserted
against the purchasers thereof by third-party claimants.
(vii) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been validly authorized by all
necessary action on the part of the Company, the Mid-Tier
Holding Company, the MHC, and the Association; and this
Agreement is a valid and binding obligation of the Company,
the Mid-Tier Holding Company, the MHC and the Association,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings institutions
and their holding companies, (ii) general equitable
principles, (iii) laws relating to the safety and soundness of
insured depository institutions, and (iv) applicable law or
public policy with respect to the indemnification and/or
contribution provisions contained herein, including, without
limitation, the provisions of
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<PAGE> 25
Section 23A and 23B of the Federal Reserve Act, and except
that no opinion need to be expressed as to the effect or
availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(viii) The Conversion Application has been
approved by the OTS and the Prospectus has been authorized for
use by the OTS and no action has been taken, and to such
counsel's Actual Knowledge, none is pending or threatened, to
revoke any such authorization or approval.
(ix) The Plan has been adopted by the
required vote of the directors of the Company, the Mid-Tier
Holding Company, the MHC and the Association and, based upon
the certificate of the inspector of election, by the members
of the MHC, the stockholders of the Mid-Tier Holding Company
and the stockholders of the Association.
(x) Subject to the satisfaction of the
conditions to the OTS' approval of the Conversion, no further
approval, registration, authorization, consent or other order
of or notice to any federal or Delaware regulatory agency is
required in connection with the execution and delivery of this
Agreement, the issuance of the Shares and the consummation of
the Conversion, except as may be required under the securities
or blue sky laws of various jurisdictions (as to which no
opinion need be rendered) and except as may be required under
the rules and regulations of the NASD and/or the Nasdaq
National Market (as to which no opinion need be rendered).
(xi) The Registration Statement is
effective under the 1933 Act and no stop order suspending the
effectiveness has been issued under the 1933 Act or
proceedings therefor initiated or, to such counsel's Actual
Knowledge, threatened by the Commission.
(xii) At the time the Conversion
Application, including the Prospectus contained therein, was
approved by the OTS, the Conversion Application, including the
Prospectus contained therein, complied as to form in all
material respects with the requirements of the Conversion
Regulations, the HOLA and all applicable rules and regulations
promulgated thereunder (other than the financial statements,
the notes thereto, and other tabular, financial, statistical
and appraisal data and accounting information included
therein, as to which no opinion need be rendered).
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<PAGE> 26
(xiii) At the time that the Registration
Statement became effective, (i) the Registration Statement (as
amended or supplemented, if so amended or supplemented) (other
than the financial statements, the notes thereto and other
tabular, financial, statistical and appraisal data included
therein, as to which no opinion need be rendered) complied as
to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations, and (ii) the Prospectus
(other than the financial statements, the notes thereto and
other tabular, financial, statistical and appraisal data
included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the
Conversion Regulations and federal law.
(xiv) The terms and provisions of the
Shares of the Company conform, in all material respects, to
the description thereof contained in the Registration
Statement and Prospectus, and the form of certificate used to
evidence the Shares is in proper form.
(xv) There are no legal or governmental
proceedings pending or to such counsel's Actual Knowledge,
threatened which are required to be disclosed in the
Registration Statement and Prospectus, other than those
disclosed therein, and to such counsel's Actual Knowledge, all
pending legal and governmental proceedings to which the
Company, the MHC, the Mid-Tier Holding Company or the
Association is a party or of which any of their property is
the subject, which are not described in the Registration
Statement and the Prospectus, including ordinary routine
litigation incidental to the Company's, the MHC's, the
Mid-Tier Holding Company's or the Association's business, are,
considered in the aggregate, not material.
(xvi) To such counsel's Actual Knowledge,
there are no material contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Conversion Application, the
Registration Statement or the Prospectus or required to be
filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto in the
Conversion Application, the Registration Statement or the
Prospectus. The description in the Conversion Application, the
Registration Statement and the Prospectus of such documents
and exhibits is accurate in all material respects and fairly
presents the information required to be shown.
(xvii) To such counsel's Actual Knowledge,
the Company, the Mid-Tier Holding Company, the MHC and the
Association have conducted the Conversion, in all material
respects, in accordance with all applicable
26
<PAGE> 27
requirements of the Plan and the HOLA and regulations
thereunder, and the Plan complies in all material respects
with all applicable Delaware and federal laws, rules and
regulations including, but not limited to, the Conversion
Regulations (except where a written waiver has been received);
no order has been issued by the OTS, the Commission or any
state authority to suspend the Offerings or the use of the
Prospectus, and no action for such purposes has been
instituted or, to such counsel's Actual Knowledge, threatened
by the OTS or the Commission or any state authority and, to
such counsel's Actual Knowledge, no person has sought to
obtain regulatory or judicial review of the final action of
the OTS approving the Plan, the Conversion Application or the
Prospectus.
(xviii) To such counsel's Actual Knowledge,
the Company, the MHC the Mid-Tier Holding Company and the
Association have obtained all material federal and Delaware
licenses, permits and other governmental authorizations
currently required for the conduct of their businesses and all
such licenses, permits and other governmental authorizations
are in full force and effect, and the Company, the MHC, the
Mid-Tier Holding Company and the Association are in all
material respects complying therewith, except where the
failure to have such licenses, permits and other governmental
authorizations or the failure to be in compliance therewith
would not have a material adverse affect on the business or
operations of the Association, the MHC, the Mid-Tier Holding
Company and the Company, taken as a whole.
(xix) To such counsel's Actual Knowledge,
neither the Company, the Mid-Tier Holding Company, the MHC nor
the Association is in violation of its certificate of
incorporation, bylaws, or charter, as applicable, or, to such
counsel's Actual Knowledge, in default or violation of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it or its
property may be bound except for such defaults or violations
which would not have a material adverse impact on the
financial condition or results of operations of the Company,
the Mid-Tier Holding Company, the MHC nor the Association on a
consolidated basis; to such counsel's Actual Knowledge, the
execution and delivery of this Agreement, the occurrence of
the obligations herein set forth and the consummation of the
transactions contemplated herein will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, the Mid-Tier Holding
Company, the MHC or the Association pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the MHC, the Mid-Tier
Holding Company or the
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<PAGE> 28
Association is a party or by which any of them may be bound, or
to which any of the property or assets of the Company, the
Mid-Tier Holding Company, the MHC or the Association is subject
(other than the establishment of a liquidation account), and
such action will not result in any violation of the provisions
of the certificate of incorporation, bylaws or charter, as
applicable, of the Company, the Mid-Tier Holding Company, the
MHC or the Association, or any applicable federal or Delaware
law, act, regulation (except that no opinion need be rendered
with respect to the securities or blue sky laws of various
jurisdictions or the rules and regulations of the NASD and/or
the Nasdaq National Market) or order or court order, writ,
injunction or decree.
(xx) The Company's certificate of
incorporation and bylaws comply in all material respects with
the General Corporation Law ("GCL") of the State of Delaware.
The Association's, the Mid-Tier Holding Company's and the
MHC's charter and bylaws comply in all material respects with
the HOLA and the rules and regulations of the OTS.
(xxi) To such counsel's Actual Knowledge,
neither the Company, the Mid-Tier Holding Company, the MHC nor
the Association is in violation of any directive from the OTS
or the FDIC to make any material change in the method of
conducting its respective business.
(xxii) The information in the Prospectus
under the captions "Regulation," "The Conversion,"
"Restrictions on Acquisition of the Company" to the extent
that such information constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions,
has been reviewed by such counsel and is correct in all
material respects. The description of the Conversion process
under the caption "The Conversion" in the Prospectus has been
reviewed by such counsel and is in all material respects
correct. The discussion of statutes or regulations described
or referred to in the Prospectus are accurate summaries and
fairly present the information required to be shown. The
information under the caption "The Conversion-Tax Aspects" has
been reviewed by such counsel and constitutes a correct
summary of the opinions rendered by Elias Matz and Crowe
Chizek to the Company, the Mid-Tier Holding Company, the MHC
and the Association with respect to such matters.
In giving such opinion, such counsel may rely as to
all matters of fact on certificates of officers or directors
of the Company, the Mid-Tier Holding Company, the MHC and the
Association and certificates of public officials. Such
counsel's opinion shall be limited to matters governed by
federal laws and
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<PAGE> 29
by the State of Delaware GCL. With respect to matters
involving the application of Delaware law, such counsel may
rely, to the extent it deems proper and as specified in its
opinion, upon the opinion of local counsel (providing that
such counsel states that it believes the Agent is justified in
relying upon such specified opinion or opinions). The opinion
of Elias Matz shall be governed by the Legal Opinion Accord
("Accord") of the American Bar Association Section of Business
Law (1991). The term "Actual Knowledge" as used herein shall
have the meaning set forth in the Accord. For purposes of such
opinion, no proceedings shall be deemed to be pending, no
order or stop order shall be deemed to be issued, and no
action shall be deemed to be instituted unless, in each case,
a director or executive officer of the Company, the Mid-Tier
Holding Company, the MHC or the Association shall have
received a copy of such proceedings, order, stop order or
action. In addition, such opinion may be limited to present
statutes, regulations and judicial interpretations and to
facts as they presently exist; in rendering such opinion, such
counsel need assume no obligation to revise or supplement it
should the present laws be changed by legislative or
regulatory action, judicial decision or otherwise; and such
counsel need express no view, opinion or belief with respect
to whether any proposed or pending legislation, if enacted, or
any proposed or pending regulations or policy statements
issued by any regulatory agency, whether or not promulgated
pursuant to any such legislation, would affect the validity of
the Conversion or any aspect thereof. Such counsel may assume
that any agreement is the valid and binding obligation of any
parties to such agreement other than the Company, the Mid-Tier
Holding Company, the MHC or the Association.
In addition, such counsel shall provide a letter
stating that during the preparation of the Conversion
Application, the Registration Statement and the Prospectus,
they participated in conferences with certain officers of, the
independent public and internal accountants for, and other
representatives of the Company, the Mid-Tier Holding Company,
the MHC and the Association, at which conferences the contents
of the Conversion Application, the Registration Statement and
the Prospectus and related matters were discussed and, while
such counsel has not confirmed the accuracy or completeness of
or otherwise verified the information contained in the
Conversion Application, the Registration Statement or the
Prospectus, and does not assume any responsibility for such
information, based upon such conferences and a review of
documents deemed relevant for the purpose of rendering their
opinion (relying as to materiality as to factual matters on
certificates of officers and other factual representations by
the Company, the Mid-Tier Holding Company, the MHC and the
Association), nothing has come to their attention that would
29
<PAGE> 30
lead them to believe that the Conversion Application, the
Registration Statement, the Prospectus, or any amendment or
supplement thereto (other than the financial statements, the
notes thereto, accounting information and other tabular,
financial, statistical and appraisal data included therein as
to which no opinion need be rendered) contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(2) The favorable opinion, dated as of the Closing
Date and addressed to the Agent and for its benefit, of the
Association's local counsel, in form and substance to the
effect that, to the best of such counsel's knowledge, (i) the
Company, the Mid-Tier Holding Company, the MHC and the
Association have good and marketable title to all properties
and assets which are material to the business of the Company,
the Mid-Tier Holding Company, the MHC and the Association and
to those properties and assets described in the Registration
Statement and Prospectus, as owned by them, free and clear of
all liens, charges, encumbrances or restrictions, except such
as are described in the Registration Statement and Prospectus,
or are not material in relation to the business of the
Company, the MHC, the Mid-Tier Holding Company and the
Association considered as one enterprise; (ii) all of the
leases and subleases material to the business of the Company,
the MHC, the Mid-Tier Holding Company and the Association
under which the Company, the MHC, the Mid-Tier Holding Company
and the Association hold properties, as described in the
Registration Statement and Prospectus, are in full force and
effect; (iii) to counsel's actual knowledge based on
certificates of officers, the Association is qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which its ownership of
property or leasing of property or the conduct of its business
requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have
a material adverse effect on the condition, financial or
otherwise, or the business, operations or income of the
Association; (iv) the MHC is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which its ownership of property or
leasing of property or the conduct of its business requires
such qualification, unless the failure to be so qualified in
one or more of such jurisdictions would not have a material
adverse effect on the condition, financial or otherwise, or
the business, operations or income of the MHC; and (v) the
Mid-Tier Holding Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which its ownership of property or
leasing of property or conduct of its business requires such
qualification unless the failure to be so qualified in one or
more of
30
<PAGE> 31
such jurisdictions would not have a material adverse effect on
the condition, financial or otherwise, or the business,
operations or income of the Mid-Tier Holding Company.
(3) The favorable opinion, dated as of the Closing
Date, of Peabody & Brown, the Agent's counsel, with respect to
such matters as the Agent may reasonably require. Such opinion
may rely upon the opinions of counsel of the Company, the
Mid-Tier Holding Company, the MHC and the Association, and as
to matters of fact, upon certificates of officers and
directors of the Company, the Mid-Tier Holding Company, the
MHC and the Association delivered pursuant hereto or as such
counsel shall reasonably request.
(d) At the Closing Date, the Agents shall receive a
certificate of the Chief Executive Officer and the Chief Financial
Officer of the Company and a certificate of the Chief Executive Officer
and the Chief Financial Officer of the Mid-Tier Holding Company, the
MHC and the Association, both dated as of such Closing Date, to the
effect that: (i) they have reviewed the Prospectus and, in their
opinion, at the time the Prospectus became authorized for final use,
the Prospectus did not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; (ii) since the date the Prospectus became
authorized for final use, no material adverse change in the condition,
financial or otherwise, or in the earnings, capital, properties or
business of the Company, the Mid-Tier Holding Company, the MHC and the
Association has occurred and, to their knowledge, no other event has
occurred, which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth, and the
conditions set forth in this Section 7 have been satisfied; (iii) since
the respective dates as of which information is given in the
Registration Statement and Prospectus, there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, capital or properties of the Company, the Mid-Tier Holding
Company, the MHC or the Association, independently, or of the Company,
the MHC and the Association considered as one enterprise, whether or
not arising in the ordinary course of business; (iv) the
representations and warranties in Section 4 are true and correct with
the same force and effect although expressly made at and as of the
Closing Date; (v) the Company, the Mid-Tier Holding Company, the MHC
and the Association have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed
or satisfied at or prior to the Closing Date; (vi) no stop order
suspending the effectiveness of the Registration Statement has been
initiated or, to the best knowledge of the Company, the Mid-Tier
Holding Company, the MHC or the Association, threatened by the
Commission or any state authority; (vii) no order suspending the
Offerings, the Conversion or the effectiveness of the Prospectus has
been issued and no
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proceedings for that purpose are pending or, to the best knowledge of
the Company, the Mid-Tier Holding Company, the MHC or the Association,
threatened by the OTS, the Commission or any state authority; and
(viii) to the best knowledge or the Company or the Association, no
person has sought to obtain review of the final action of the OTS
approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable
opinion of the Agent, there shall have been no material adverse change
in the condition, financial or otherwise (other than as a result of a
change in law or regulation and affecting the savings association
industry as a whole), or in the earnings or business of the Company,
the Mid-Tier Holding Company, the MHC or the Association independently,
or of the Company, the Mid-Tier Holding Company, the MHC and the
Association considered as one enterprise, from that as of the latest
dates as of which such condition is set forth in the Prospectus other
than transactions referred to or contemplated therein; (iii) the
Company, the Mid-Tier Holding Company, the MHC or the Association shall
not have received from the OTS or the FDIC any direction (oral or
written) to make any material change in the method of conducting their
business with which it has not complied (which direction, if any, shall
have been disclosed to the Agents) or which materially and adversely
would affect the business, operations or financial condition or income
of the Company, the Mid-Tier Holding Company, the MHC and the
Association considered as one enterprise; (iv) the Company, the
Mid-Tier Holding Company, the MHC and the Association shall not have
been in default (nor shall any event have occurred which, with notice
or lapse of time or both, would constitute a default) under any
provision of any agreement or instrument relating to any outstanding
indebtedness; (v) no action, suit or proceedings, at law or in equity
or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the
Company, the Mid-Tier Holding Company, the MHC or the Association,
threatened against the Company, the Mid-Tier Holding Company, the MHC
or the Association or affecting any of their properties wherein an
unfavorable decision, ruling or finding would materially and adversely
affect the business operations, financial condition or income of the
Company, the Mid-Tier Holding Company, the MHC and the Association
considered as one enterprise; and (vi) the Shares have been qualified
or registered for offering and sale or exempted therefrom under the
securities or blue sky laws of the jurisdictions as the Agent shall
have requested and as agreed to by the Company and the Association.
(f) Concurrently with the execution of this Agreement, the
Agent shall receive separate letters from each of Crowe Chizek and D&T
dated as of the date of the Prospectus and addressed to the Agent: (i)
confirming that Crowe Chizek and D&T are firms of independent public
accountants within the meaning of Rule 101 of the Code of Professional
Ethics of the American Institute of Certified Public Accountants and
32
<PAGE> 33
applicable regulations of the OTS and FDIC and stating in effect in the
letter of D&T that in D&T's opinion the financial statements of the
Company, the Mid-Tier Holding Company, and/or the Association (as
applicable) as of December 31, 1997 and December 31, 1996 and September
30, 1996 and for the year ended December 31, 1997 or the three months
ended December 31, 1996 and for each of the two years in the period
ended September 30, 1996 as are included in the Prospectus and covered
by their opinion included therein, comply as to form in all material
respects with the applicable accounting requirements and related
published rules and regulations of the OTS, the FDIC, the SEC and the
1933 Act; (ii) a statement from Crowe Chizek in effect that, on the
basis of certain agreed upon procedures (but not an audit in accordance
with generally accepted auditing standards) consisting of a reading of
the latest available unaudited interim consolidated financial
statements of the Company prepared by the Company, a reading of the
minutes of the meetings of the Board of Directors of the Company, the
Mid-Tier Holding Company, and the Association and consultations with
officers of the Company, the Mid-Tier Holding Company, and the
Association responsible for financial and accounting matters, nothing
came to their attention which caused them to believe that: (A) the
unaudited financial statements included in the Prospectus, are not in
conformity with the 1933 Act, applicable accounting requirements of the
OTS, the FDIC, and the SEC and generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or (B) during the
period from the date of the latest unaudited consolidated financial
statements included in the Prospectus to a specified date not more than
three business days prior to the date of the Prospectus, except as has
been described in the Prospectus, there was any material increase in
borrowings, other than normal deposit fluctuations, by the Company, the
Mid-Tier Holding Company, or the Association; or (C) there was any
decrease in consolidated net assets of the Company, the Mid-Tier
Holding Company, or the Association at the date of such letter as
compared with amounts shown in the latest unaudited consolidated
statement of condition included in the Prospectus; and (iii) a
statement from Crowe Chizek that in addition to the performance of the
procedures referred to in clause (ii) of this subsection (f), they have
compared with the general accounting records of the Company, the
Mid-Tier Holding Company and the Association, which are subject to the
internal controls of the Company, the Mid-Tier Holding Company and the
Association, the accounting system and other data prepared by the
Company, the Mid-Tier Holding Company and the Association, directly
from such accounting records, to the extent specified in such letter,
such amounts and/or percentages set forth in the Prospectus as the
Agent may reasonably request; and they have reported on the results of
such comparisons.
(g) At the Closing Date, the Agent shall receive letters from
D&T and Crowe Chizek dated the Closing Date, addressed to the Agent,
confirming the
33
<PAGE> 34
statements made by each of them in letters delivered by each of them
pursuant to subsection (f) of this Section 7, the "specified date"
referred to in clause (ii) of subsection (f) thereof to be a date
specified in such letter, which shall not be more than three business
days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from
FinPro, Inc., dated the date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent of the Company, the
Mid-Tier Holding Company, the MHC and the Association and is
experienced and expert in the area of corporate appraisals within the
meaning of Title 12 of the Code of Federal Regulations, Part 303, (ii)
stating in effect that the Appraisal prepared by such firm complies in
all material respects with the applicable requirements of Title 12 of
the Code of Federal Regulations, and (iii) further stating that their
opinion of the estimated aggregate pro forma market value of the
Company, the Mid-Tier Holding, the MHC and the Association expressed in
their Appraisal dated as of August 13, 1998, and most recently updated,
remains in effect.
(i) The Company, the Mid-Tier Holding Company, the MHC and the
Association shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any material
loss or interference with their businesses from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Registration
Statement and Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive:
(i) a copy of the letter from the OTS approving the Conversion
Application and authorizing the use of the Prospectus; (ii) a copy of
the order from the Commission declaring the Registration Statement
effective; (iii) certificates from the OTS evidencing the existence of
the Association, the Mid-Tier Holding Company and the MHC; (iv)
certificates of good standing from the State of Delaware evidencing the
good standing of the Company; (v) a certificate from the FDIC
evidencing the Association's insurance of accounts, and (vi) a
certificate of the FHLB-Atlanta evidencing the Association's membership
thereof.
(k) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or limitation in
trading in securities generally on the New York Stock Exchange or in
the over-the-counter market, or quotations halted generally on the
Nasdaq National Market, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order of the
Commission or any other governmental authority; (ii) a general
moratorium on the operations of commercial banks or federal savings
associations or a general moratorium on the withdrawal of deposits from
34
<PAGE> 35
commercial banks or federal savings associations declared by federal or
state authorities; (iii) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the
date hereof, of a national emergency or war; or (iv) a material decline
in the price of equity or debt securities if the effect of such a
declaration or decline, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offerings or the
delivery of the shares on the terms and in the manner contemplated in
the Registration Statement and Prospectus.
SECTION 8. INDEMNIFICATION.
(a) The Primary Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents,
servants and employees and each person, if any, who controls the Agent
within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act, against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses),
joint or several, that the Agent or any of them may suffer or to which
the Agent and any such persons may become subject under all applicable
federal or state laws or otherwise, and to promptly reimburse the Agent
and any such persons upon written demand for any expense (including
fees and disbursements of counsel) incurred by the Agent or any of them
in connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions: (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Conversion Application (or any
amendment or supplement thereto), or any blue sky application or other
instrument or document executed by the Company, the Mid-Tier Holding
Company, the MHC or the Association based upon written information
supplied by the Company, the Mid-Tier Holding Company, the MHC or the
Association filed in any state or jurisdiction to register or qualify
any or all of the Shares or to claim an exemption therefrom, or
provided to any state or jurisdiction to exempt the Company as a
broker-dealer or its officers, directors and employees as
broker-dealers or agents, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any application or other
document, advertisement, oral statement or communication ("Sales
Information") prepared, made or executed by or on behalf of the
Company, the Mid-Tier Holding Company, the MHC or the Association with
their consent or based upon written or oral information furnished by or
on behalf of the Company, the Mid-Tier Holding Company, the MHC or the
Association, whether or not filed in any jurisdiction, in order to
qualify or register the Shares or to claim an exemption therefrom under
the securities laws thereof; (ii) arise out of or based upon the
omission or alleged omission to state in any of the foregoing documents
or information, a material fact required to be
35
<PAGE> 36
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; or (iii)
arise from any theory of liability whatsoever relating to or arising
from or based upon the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment
or supplement thereto), the Conversion Application (or any amendment or
supplement thereto), any Blue Sky Application or Sales Information or
other documentation distributed in connection with the Conversion;
provided, however, that no indemnification is required under this
paragraph (a) to the extent such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue material statement
or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or
any amendment or supplement thereto), the Conversion Application, any
Blue Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Company or the
Association by the Agent regarding the Agent and provided further that
such indemnification shall be to the extent permitted by the OTS and
the FDIC.
(b) The Agent agrees to indemnify and hold harmless the
Company, the Mid-Tier Holding Company, the MHC and the Association,
their directors and officers and each person, if any, who controls the
Company, the Mid-Tier Holding Company, the MHC or the Association
within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses),
joint or several, which they, or any of them, may suffer or to which
they, or any of them may become subject under all applicable federal
and state laws or otherwise, and to promptly reimburse the Company, the
Mid-Tier Holding Company, the MHC, the Association, and any such
persons upon written demand for any expenses (including reasonable fees
and disbursements of counsel) incurred by them, or any of them, in
connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
or supplement thereto), the Conversion Application (or any amendment or
supplement thereto) or the preliminary or final Prospectus (or any
amendment or supplement thereto), or are based upon the omission or
alleged omission to state in any of the foregoing documents a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Agent's obligations under
this Section 8(b) shall exist only if and only to the extent (i) that
such untrue statement or alleged untrue statement was made in, or such
material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the
preliminary
36
<PAGE> 37
or final Prospectus (or any amendment or supplement thereto) or the
Conversion Application (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information in reliance upon and in
conformity with information furnished in writing to the Company or the
Association by the Agent regarding the Agent. In no case shall the
Agent be liable or responsible for any amount in excess of the fees
received by the Agent pursuant to Section 2 of this Agreement.
(c) Each indemnified party shall give prompt written notice to
each indemnifying party of any action, proceeding, claim (whether
commenced or threatened), or suit instituted against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability which it may
have on account of this Section 8 or otherwise. An indemnifying party
may participate at its own expense in the defense of such action. In
addition, if it so elects within a reasonable time after receipt of
such notice, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may assume defense of such action with
counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal
defenses available to them that are different from or in addition to
those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action, proceeding
or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of
more than one separate firm of attorneys (and any special counsel that
said firm may retain) for each indemnified party in connection with any
one action, proceeding or claim or separate but similar or related
actions, proceedings or claims in the same jurisdiction arising out of
the same general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section
9 hereof and the representations and warranties of the Company, the
Mid-Tier Holding Company, the MHC and the Association set forth in this
Agreement shall remain operative and in full force and effect
regardless of: (i) any investigation made by or on behalf of the Agent
or its officers, directors or controlling persons, agents or employees
or by or on behalf of the Company, the Mid-Tier Holding Company, the
MHC or the Association or any officers, directors or controlling
persons, agents or employees of the Company, the Mid-Tier Holding
Company, the MHC or the Association; (ii) deliver of and payment
hereunder for the Shares; or (iii) any termination of this Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the
37
<PAGE> 38
Association or the Agent, the Company, the Association and the Agent shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding of any claims
asserted, but after deducting any contribution received by the Company, the
Association or the Agent from persons other than the other party thereto, who
may also be liable for contribution) in such proportion so that the Agent shall
be responsible for that portion represented by the percentage that the fees paid
to the Agent pursuant to Section 2 of this Agreement (not including expenses)
bears to the gross proceeds received by the Company from the sale of the Shares
in the Offerings and the Company and the Association shall be responsible for
the balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the
Association on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereto), but also the
relative benefits received by the Company and the Association on the one hand
and the Agent on the other from the Offerings (before deducting expenses). The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and/or the Association on the one hand or the Agent on the other and the
parties' relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Association and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro-rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this Section 9. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount which in the aggregate exceeds the
amount paid (excluding reimbursable expenses) to the Agent under this Agreement.
It is understood that the above stated limitation on the Agent's liability is
essential to the Agent and that the Agent would not have entered into this
Agreement if such limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not found guilty of such fraudulent misrepresentation.
The obligations of the Company and the Association under this Section 9 and
under Section 8 shall be in addition to any liability which the Company and the
Association may otherwise have. For purposes of this Section 9, each of the
Agent's, the Company's or the Association's officers and directors
38
<PAGE> 39
and each person, if any, who controls the Agent or the Company or the
Association within the meaning of the 1933 Act and the 1934 Act shall have the
same rights to contribution as the Agent, the Company or the Association. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action, suit, claim or proceeding against such party in respect of which
a claim for contribution may be made against another party under this Section 9,
will notify such party from whom contribution may be sought, but the omission to
so notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 9.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES.
The respective indemnities of the Company, the Association and the Agent and the
representations and warranties and other statements of the Company and the
Association set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent, the Company,
the Association or any controlling person referred to in Section 8 hereof, and
shall survive the issuance of the Shares, and any legal representative,
successor or assign of the Agent, the Company, the Association, and any such
controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
SECTION 11. TERMINATION. The Agent may terminate its obligations under
this Agreement by giving the notice indicated below in this Section 11 at any
time after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell all of the Shares
by _______, 1998, and in accordance with the provisions of the Plan or
as required by the Conversion Regulations, and applicable law, this
Agreement shall terminate upon refund by the Association to each person
who has subscribed for or ordered any of the Shares the full amount
which it may have received from such person, together with interest as
provided in the Prospectus, and no party to this Agreement shall have
any obligation to the other hereunder, except for payment by the
Company and/or the Association as set forth in Sections 2(a) and (d),
6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not
have been fulfilled when and as required by this Agreement unless
waived in writing, or by the Closing Date, this Agreement and all of
the Agent's obligations hereunder may be canceled by the Agent by
notifying the Company, the Mid-Tier Holding Company, the MHC and the
Association of such cancellation in writing or by telegram at any time
at or prior to the Closing Date, and any such cancellation shall be
without liability of any party to any other party except as otherwise
provided in Sections 2, 6, 8 and 9 hereof.
39
<PAGE> 40
(c) If the Agent elects to terminate this Agreement as
provided in this Section, the Company, the Mid-Tier Holding Company,
the MHC and the Association shall be notified promptly by the Agent by
telephone or telegram, confirmed by letter.
The Company, the Mid-Tier Holding Company, the MHC and the Association
may terminate this Agreement in the event the Agent is in material breach of the
representations and warranties or covenants contained in Section 5 and such
breach has not been cured after the Company and the Association have provided
the Agent with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Friedman,
Billings, Ramsey & Co., Inc., 1001 19th Street North, Arlington, Virginia
22209-1710, Attention: Richard A. Buckner (with a copy to Peabody & Brown, 1255
23rd Street, N.W., Suite 800, Washington, D.C. 20037, Attention: Raymond J.
Gustini, Esq.) and, if sent to the Company, the Mid-Tier Holding Company, the
MHC and the Association, shall be mailed, delivered or telegraphed and confirmed
to the Company, the Mid-Tier Holding Company, the MHC and the Association at 660
U.S. Highway One, North Palm Beach, FL 33408, Attention: James B. Pittard, Jr.,
President (with a copy to Elias, Matz, Tiernan & Herrick, LLP, 734 15th Street,
N.W., 12th Floor, Washington, D.C. 20005, Attention: Raymond A. Tiernan, Esq.)
SECTION 13. PARTIES. The Company, the Mid-Tier Holding Company, the MHC
and the Association shall be entitled to act and rely on any request, notice,
consent, waiver or agreement purportedly given on behalf of the Agent, when the
same shall have been given by the undersigned. The Agent shall be entitled to
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of the Company, the Mid-Tier Holding Company, the MHC or the
Association, when the same shall have been given by the undersigned or any other
officer of the Company, the Mid-Tier Holding Company, the MHC or the
Association. This Agreement shall inure solely to the benefit of, and shall be
binding upon, the Agent, the Company, the Mid-Tier Holding Company, the MHC, the
Association, and their respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. It is understood and agreed that this Agreement
is the exclusive agreement among the parties hereto, and supersedes any prior
agreement among the parties and may not be varied except in writing signed by
all the parties.
40
<PAGE> 41
SECTION 14. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company, the MHC and the Association. At the closing, the Company, the
MHC and the Association shall deliver to the Agent in next day funds the
commissions, fees and expenses due and owing to the Agent as set forth in
Sections 2 and 6 hereof and the opinions and certificates required hereby and
other documents deemed reasonably necessary by the Agent shall be executed and
delivered to effect the sale of the Shares as contemplated hereby and pursuant
to the terms of the Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of Delaware.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
41
<PAGE> 42
If the foregoing correctly sets forth the arrangement among the
Company, the Mid-Tier Holding Company, the MHC, the Association, and the Agent,
please indicate acceptance thereof in the space provided below for that purpose,
whereupon this letter and the Agent's acceptance shall constitute a binding
agreement.
Very truly yours,
COMMUNITY SAVINGS, COMMUNITY SAVINGS
BANKSHARES, INC., A DELAWARE BANKSHARES, INC., A FEDERAL
CORPORATION CORPORATION
By: By:
----------------------------------- --------------------------------
James B. Pittard, Jr. James B. Pittard, Jr.
President and Chief Executive President and Chief Executive
Officer Officer
COMFED, M.H.C. COMMUNITY SAVINGS, F. A.
By: By:
----------------------------------- --------------------------------
James B. Pittard, Jr. James B. Pittard, Jr.
President and Chief Executive President and Chief Executive
Officer Officer
Accepted as of the date first above written
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By:
----------------------------------
James R. Kleeblatt
Managing Director
42
<PAGE> 1
PLAN OF CONVERSION
AS AMENDED
of
COMFED, M. H. C.
and
AGREEMENT AND PLAN OF REORGANIZATION
between
COMFED, M. H. C.,
COMMUNITY SAVINGS BANKSHARES, INC.
(A Federal Corporation)
COMMUNITY SAVINGS BANKSHARES, INC.
(A Delaware Corporation)
and
COMMUNITY SAVINGS, F. A.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION
NUMBER PAGE
<S> <C> <C>
1. Introduction....................................................... 1
2. Definitions........................................................ 3
3. General Procedure for Conversion and Reorganization................ 9
4. Total Number of Shares and Purchase Price of
Conversion Stock................................................. 12
5. Subscription Rights of Eligible Account Holders.................... 13
6. Subscription Rights of Tax-Qualified Employee
Stock Benefit Plans.............................................. 14
7. Subscription Rights of Supplemental Eligible Account Holders....... 14
8. Subscription Rights of Other Members............................... 15
9. Subscription Rights of Directors, Officers and Employees........... 16
10. Public Shareholders Offering....................................... 16
11. Community Offering, Syndicated Community Offering and
Other Offerings.................................................. 17
12. Limitations on Subscriptions and Purchases of Conversion Stock..... 19
13. Timing of Subscription Offering; Manner of Exercising
Subscription Rights and Order Forms.............................. 21
14. Payment for Conversion Stock....................................... 23
15. Account Holders in Nonqualified States or in Foreign Countries..... 24
16. Voting Rights of Shareholders...................................... 24
17. Liquidation Account................................................ 24
18. Transfer of Deposit Accounts....................................... 26
19. Requirements Following Conversion and Reorganization for
Registration, Market Making and Stock Exchange Listing........... 26
20. Directors and Officers of the Association.......................... 27
21. Requirements for Stock Purchases by Directors
and Officers Following the Conversion and Reorganization......... 27
22. Restrictions on Transfer of Stock.................................. 27
23. Restrictions on Acquisition of Stock of the Holding Company........ 28
24. Tax Rulings or Opinions............................................ 28
25. Stock Compensation Plans........................................... 29
26. Dividend and Repurchase Restrictions on Stock...................... 29
27. Payment of Fees to Brokers......................................... 30
28. Effective Date..................................................... 30
29. Amendment or Termination of the Plan............................... 30
30. Interpretation of the Plan......................................... 31
</TABLE>
Annex A - Plan of Merger between the Mid-Tier Holding Company and the
Association
Annex B - Plan of Merger between the Mutual Holding Company and the Association
Annex C - Plan of Merger between the Association, the Holding Company and
Interim
<PAGE> 3
1. INTRODUCTION.
For purposes of this section, all capitalized terms have the meanings
ascribed to them in Section 2.
On October 24, 1994, Community Savings, F. A., a federally chartered
mutual savings association ("Community Savings"), reorganized into the mutual
holding company form of organization. To accomplish this transaction, Community
Savings organized a federally chartered, stock savings association known as
Community Savings, F. A. (the "Association") as a wholly owned subsidiary.
Community Savings then transferred substantially all of its assets and
liabilities to the Association in exchange for 2,620,144 shares of Association
Common Stock, and reorganized itself into a federally chartered mutual holding
company known as ComFed, M. H. C. (the "Mutual Holding Company"). The
Association simultaneously sold 2,379,856 shares of Association Common Stock to
depositors of the Association, employee stock benefit plans of the Association,
directors, officers and employees of the Association and members of the general
public. On September 30, 1997, the Association completed a reorganization in
which the Association became a wholly owned subsidiary of a federally chartered
stock mid-tier holding company known as "Community Savings Bankshares, Inc."
(the "Mid-Tier Holding Company"). Shareholders of the Association became
shareholders of the Mid-Tier Holding Company, exchanging their shares of
Association Common Stock on a one-for-one basis for shares of Mid-Tier Holding
Company Common Stock. As of the date hereof, after taking into account the
issuance of 103,960 shares pursuant to stock benefit plans, the Mutual Holding
Company and the other Shareholders own an aggregate of 51.34% and 48.66% of the
outstanding Mid-Tier Holding Company Common Stock, respectively.
The Boards of Directors of the Mutual Holding Company, the Mid-Tier
Holding Company and the Association believe that a conversion of the Mutual
Holding Company to stock form and reorganization of the Association pursuant to
this Plan of Conversion is in the best interests of the Mutual Holding Company,
the Mid-Tier Holding Company and the Association, as well as the best interests
of their respective Members and Shareholders. The Boards of Directors determined
that this Plan of Conversion equitably provides for the interests of Members
through the granting of subscription rights and the establishment of a
liquidation account. The Conversion and Reorganization will result in the
raising of additional capital for the Association and the Holding Company and
should result in a more active and liquid market for the Holding Company Common
Stock than currently exists for the Mid-Tier Holding Company Common Stock,
although there can be no assurances that this will be the case. In addition, the
Conversion and Reorganization have been structured to re-unite the accumulated
earnings and profits tax attribute retained by the Mutual Holding Company with
the retained earnings of the Association through a tax-free reorganization.
Finally, the Conversion and Reorganization is designed to enable the Association
and the Holding Company to more effectively compete in the financial services
marketplace.
If the Association had undertaken a standard conversion involving the
formation of a stock holding company in 1994, applicable OTS regulations would
have required a greater amount of Association Common Stock to be sold than the
$34.0 million of net proceeds raised in connection with the formation of the
Mutual Holding Company. In addition, if a standard conversion had been
<PAGE> 4
conducted in 1994, management of the Association believed that its ability to
generate sufficient loan volume, particularly in its market area, would have
made it difficult to prudently invest in a timely manner the significantly
larger amount of capital that would have been raised, when compared to the net
proceeds raised in connection with the formation of the Mutual Holding Company.
A standard conversion in 1994 also would have immediately eliminated all aspects
of the mutual form of organization.
Subsequent to the formation of the Mutual Holding Company, there have
been certain changes in the policies of the OTS relating to mutual holding
companies. In addition, market conditions for the stocks of savings institutions
and their holding companies have improved. The Association and the Mid-Tier
Holding Company have also gained experience in being companies required to meet
the filing requirements of the Securities Exchange Act of 1934 and in conducting
shareholder meetings and other shareholder matters, such as communications,
press releases, NASD matters and dividend payments. In light of the foregoing,
the Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding
Company and the Association believe that it is in the best interests of such
companies and their respective Members and Shareholders to raise additional
capital at this time, and that the most feasible way to do so is through the
Conversion and Reorganization.
In connection with the Conversion and Reorganization, the Association
will form a new first-tier, wholly-owned subsidiary known as Community Savings
Bankshares, Inc., which will become the Holding Company upon consummation of the
Conversion and Reorganization. The Holding Company will in turn form a federally
chartered interim savings association ("Interim") as a wholly-owned subsidiary.
The Association formed the Mid-Tier Holding Company which became the holding
company for the Association pursuant to a reorganization completed on September
30, 1997. Initially the Mid-Tier Holding Company will convert to an interim
federal stock savings association and merge with and into the Association with
the Association as the surviving entity. Annex A hereto describes this
transaction. As described in more detail in Section 3, the Mutual Holding
Company will then convert from the mutual form to a federal interim stock
savings association and simultaneously merge with and into the Association
pursuant to the Plan of Merger included as Annex B hereto, pursuant to which the
Mutual Holding Company will cease to exist and a liquidation account will be
established by the Association for the benefit of depositor Members as of
specified dates, and Interim will then merge with and into the Association
pursuant to the Plan of Merger included as Annex C hereto, pursuant to which the
Association will become a wholly owned subsidiary of the Holding Company. In
connection therewith, each share of Mid-Tier Holding Company Common Stock
outstanding immediately prior to the effective time thereof shall be
automatically converted, without further action by the holder thereof, into and
become the right to receive shares of Holding Company Common Stock based on the
Exchange Ratio, plus cash in lieu of any fractional share interest.
In connection with the Conversion and Reorganization, the Holding
Company will offer shares of Conversion Stock in the Offerings as provided
herein. Shares of Conversion Stock will be offered in a Subscription Offering in
descending order of priority to Eligible Account Holders,
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Tax-Qualified Employee Stock Benefit Plans, Supplemental Eligible Account
Holders, Other Members and Directors, Officers and Employees. The Subscription
Rights granted in connection with the Subscription Offering are
non-transferrable. Any shares of Conversion Stock remaining unsold after the
Subscription Offering will be offered for sale initially to Public Shareholders
in the Public Shareholders Offering. Any shares of conversion stock remaining
unsold after the Subscription Offering and the Public Shareholders Offering will
be offered for sale to the public through a Community Offering and/or Syndicated
Community Offering, as determined by the Boards of Directors of the Holding
Company, the Mid-Tier Holding Company and the Association in their sole
discretion.
The Conversion and Reorganization is intended to provide a larger
capital base to support the Association's lending and investment activities and
thereby enhance the Association's capabilities to serve the borrowing and other
financial needs of the communities it serves. The use of the Holding Company
will provide greater organizational flexibility and possible diversification.
This Plan was adopted by the Boards of Directors of the Mutual Holding
Company, the Mid-Tier Holding Company and the Association on July 28, 1998 and
amended on August 13, 1998 and October 14, 1998.
This Plan is subject to the approval of the OTS and must be adopted by
(1) at least a majority of the total number of votes eligible to be cast by
Voting Members of the Mutual Holding Company at the Special Meeting and (2)
holders of at least two-thirds of the outstanding Mid-Tier Common Stock at the
Shareholders' Meeting. In addition, the Primary Parties have conditioned the
consummation of the Conversion and Reorganization on the approval of the Plan by
at least a majority of the votes cast, in person or by proxy, by the Public
Shareholders at the Shareholders' Meeting.
After the Conversion and Reorganization, the Association will continue
to be regulated by the OTS, as its chartering authority, and by the FDIC, which
insures the Association's deposits. In addition, the Association will continue
to be a member of the Federal Home Loan Bank System and all insured savings
deposits will continue to be insured by the FDIC up to the maximum provided by
law.
2. DEFINITIONS.
As used in this Plan, the terms set forth below have the following
meaning:
2.1 ACTUAL PURCHASE PRICE means the price per share at which the
Conversion Stock is ultimately sold by the Holding Company in the Offerings in
accordance with the terms hereof.
2.2 AFFILIATE means a Person who, directly or indirectly, through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified.
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2.3 ASSOCIATE, when used to indicate a relationship with any Person,
means (i) a corporation or organization (other than the Mutual Holding Company,
the Mid-Tier Holding Company, the Association, a majority-owned subsidiary of
the Association or the Holding Company) of which such Person is a director,
officer or partner or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities, (ii) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity, provided, however, that
such term shall not include any Tax-Qualified Employee Stock Benefit Plan of the
Holding Company or the Association in which such Person has a substantial
beneficial interest or serves as a trustee or in a similar fiduciary capacity,
and (iii) any relative or spouse of such Person, or any relative of such spouse,
who has the same home as such Person or who is a director or officer of the
Holding Company or the Association or any of the subsidiaries of the foregoing.
2.4 ASSOCIATION means Community Savings, F. A., a federally chartered
savings and loan association.
2.5 ASSOCIATION MERGER means the merger of Interim with and into the
Association pursuant to the Plan of Merger included as Annex C hereto.
2.6 ASSOCIATION COMMON STOCK means the common stock of the Association,
par value $1.00 per share, which stock is not and will not be insured by the
FDIC or any other governmental authority, all of which is currently held by the
Mid-Tier Holding Company and subsequent to the Conversion and Reorganization,
all of which will be held by the Holding Company.
2.7 CODE means the Internal Revenue Code of 1986, as amended.
2.8 COMMUNITY OFFERING means the offering for sale by the Holding
Company of any shares of Conversion Stock not subscribed for in the Subscription
Offering or the Public Shareholders Offering to such Persons within or without
the State of Florida as may be selected by the Holding Company, the Mid-Tier
Holding Company and the Association in their sole discretion and to whom a copy
of the Prospectus and an Order Form are delivered by or on behalf of the Holding
Company.
2.9 CONTROL (including the terms "controlling," "controlled by," and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
2.10 CONVERSION AND REORGANIZATION means (i) the conversion of the
Mid-Tier Holding Company from a federally chartered stock corporation to a
federal interim savings association and the subsequent Mid-Tier Holding Company
Merger pursuant to which the Mid-Tier Holding Company will cease to exist, (ii)
the conversion of the Mutual Holding Company from mutual form to a federal
interim stock savings association and the subsequent Mutual Holding Company
Merger,
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<PAGE> 7
pursuant to which the Mutual Holding Company will cease to exist, (iii) the
Association Merger, pursuant to which the Association will become a wholly owned
subsidiary of the Holding Company and, in connection therewith, each share of
Mid-Tier Holding Company Common Stock outstanding immediately prior to the
effective time thereof shall automatically be converted, without further action
by the holder thereof, into and become the right to receive shares of Holding
Company Common Stock based on the Exchange Ratio, plus cash in lieu of any
fractional share interest, and (iv) the issuance of Conversion Stock by the
Holding Company in the Offerings as provided herein, which will increase the
number of shares of Holding Company Common Stock outstanding and the
capitalization of the Holding Company and the Association. All such transactions
shall occur substantially simultaneously.
2.11 CONVERSION STOCK means the Holding Company Common Stock to be
issued and sold in the Offerings pursuant to the Plan of Conversion.
2.12 DEPOSIT ACCOUNT means withdrawable or repurchasable shares,
investment certificates or deposits or other savings accounts, including money
market deposit accounts, negotiable order of withdrawal accounts and demand
accounts, held by an account holder of the Association.
2.13 DIRECTOR, OFFICER AND EMPLOYEE means the terms as applied
respectively to any person who is a director, officer or employee of the Mutual
Holding Company, the Mid-Tier Holding Company, the Association or any subsidiary
thereof.
2.14 ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying
Deposit on the Eligibility Record Date for purposes of determining Subscription
Rights and establishing subaccount balances in the liquidation account to be
established pursuant to Section 17 hereof.
2.15 ELIGIBILITY RECORD DATE means the date for determining Qualifying
Deposits of Eligible Account Holders and is the close of business on June 30,
1997.
2.16 ESTIMATED PRICE RANGE means the range of the estimated aggregate
pro forma market value of the total number of shares of Conversion Stock to be
issued in the Offerings, as determined by the Independent Appraiser in
accordance with Section 4 hereof.
2.17 EXCHANGE RATIO means the rate at which shares of Holding Company
Common Stock will be exchanged for shares of Mid-Tier Holding Common Stock held
by the Public Shareholders in connection with the Association Merger. The exact
rate shall be determined by the Mutual Holding Company, the Mid-Tier Holding
Company and the Association in order to ensure that upon consummation of the
Conversion and Reorganization the Public Shareholders will own in the aggregate
approximately the same percentage of the Holding Company Common Stock to be
outstanding upon completion of the Conversion and Reorganization as the
percentage of Mid-Tier Holding Company Common Stock owned by them in the
aggregate immediately prior to consummation of the Conversion and
Reorganization, before giving effect to (a) cash paid in lieu of any fractional
interests of Holding Company Common Stock and (b) any shares of Conversion
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<PAGE> 8
Stock purchased by the Public Shareholders or Tax-Qualified Employee Stock
Benefit Plans in the Offerings.
2.18 EXCHANGE SHARES mean the shares of Holding Company Common Stock to
be issued to the Public Shareholders in connection with the Association Merger.
2.19 FDIC means the Federal Deposit Insurance Corporation or any
successor thereto.
2.20 HOLDING COMPANY means Community Savings Bankshares, Inc., a stock
corporation to be organized under the laws of the State of Delaware. Such
corporation will be initially formed as a first-tier, wholly owned subsidiary of
the Association. Upon completion of the Conversion and Reorganization, the
Holding Company shall hold all of the outstanding capital stock of the
Association.
2.21 HOLDING COMPANY COMMON STOCK means the common stock of the Holding
Company, par value $1.00 per share, which stock cannot and will not be insured
by the FDIC or any other governmental authority.
2.22 INDEPENDENT APPRAISER means the independent investment banking or
financial consulting firm retained by the Holding Company, the Mid-Tier Holding
Company and the Association to prepare an appraisal of the estimated pro forma
market value of the Conversion Stock.
2.23 INITIAL PURCHASE PRICE means the price per share to be paid
initially by Participants for shares of Conversion Stock subscribed for in the
Subscription Offering and by Persons for shares of Conversion Stock ordered in
the Community Offering and/or Syndicated Community Offering.
2.24 INTERIM means Community Interim Federal Savings Association, which
will be formed as a first-tier, wholly-owned subsidiary of the Holding Company
to facilitate the Association Merger.
2.25 MEMBER means any Person qualifying as a member of the Mutual
Holding Company in accordance with its mutual charter and bylaws and the laws of
the United States.
2.26 MID-TIER HOLDING COMPANY means Community Savings Bankshares, Inc.,
an existing federally chartered stock corporation.
2.27 MID-TIER HOLDING COMMON STOCK means the common stock of the
Mid-Tier Holding Company, par value $1.00 per share, which stock is not insured
by the FDIC or any other governmental entity.
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<PAGE> 9
2.28 MID-TIER HOLDING COMPANY MERGER means the Merger of the Mid-Tier
Mutual Holding Company (following its conversion to a federal interim stock
savings association) with and into the Association pursuant to the Plan of
Merger included as Annex A hereto
2.29 MUTUAL HOLDING COMPANY means ComFed, M. H. C.
2.30 MUTUAL HOLDING COMPANY MERGER means the merger of the Mutual
Holding Company (following its conversion into a federal interim stock savings
association) with and into the Association pursuant to the Plan of Merger
included as Annex B hereto.
2.31 OFFERINGS mean the Subscription Offering, the Public Shareholders
Offering, the Community Offering and the Syndicated Community Offering.
2.32 OFFICER means the chairman of the board of directors, president,
chief executive officer, vice-president, secretary, treasurer or principal
financial officer, comptroller or principal accounting officer and any other
person performing similar functions with respect to any organization whether
incorporated or unincorporated.
2.33 ORDER FORM means the form or forms to be provided by the Holding
Company, containing all such terms and provisions as set forth in Section 13
hereof, to a Participant or other Person by which Conversion Stock may be
ordered in the Offerings.
2.34 OTHER MEMBER means a Voting Member who is not an Eligible Account
Holder or a Supplemental Eligible Account Holder.
2.35 OTS means the Office of Thrift Supervision or any successor
thereto.
2.36 PARTICIPANT means any Eligible Account Holder, Tax-Qualified
Employee Stock Benefit Plan, Supplemental Eligible Account Holder, Other Member
and Director, Officer and Employee.
2.37 PERSON means an individual, a corporation, a limited liability
company, a partnership, a limited liability partnership, an association, a joint
stock company, a trust, an unincorporated organization or a government or any
political subdivision thereof.
2.38 PLAN and PLAN OF CONVERSION mean this Plan of Conversion and
Agreement and Plan of Reorganization as adopted by the Boards of Directors of
the Mutual Holding Company, the Mid-Tier Holding Company and the Association and
any amendment hereto approved as provided herein. The Board of Directors of the
Holding Company shall adopt this Plan as soon as practicable following its
organization, and the Board of Directors of Interim shall adopt the Plan of
Merger included as Annex C hereto as soon as practicable following its
organization.
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2.39 PRIMARY PARTIES mean the Mutual Holding Company, the Mid-Tier
Holding Company, the Association and the Holding Company.
2.40 PROSPECTUS means the one or more documents to be used in offering
the Conversion Stock in the Offerings.
2.41 PUBLIC OFFERING means an underwritten firm commitment offering to
the public through one or more underwriters.
2.42 PUBLIC SHAREHOLDERS mean those Persons who own shares of Mid-Tier
Holding Company Common Stock, excluding the Mutual Holding Company, as of the
Voting Record Date.
2.43 PUBLIC SHAREHOLDERS OFFERING means the offering for sale by the
Holding Company of any shares of Conversion Stock not subscribed for in the
Subscription Offering to Public Shareholders in the sole discretion of the
Holding Company, the Mid-Tier Holding Company and the Association.
2.44 QUALIFYING DEPOSIT means the aggregate balance of all Deposit
Accounts in the Association of (i) an Eligible Account Holder at the close of
business on the Eligibility Record Date, provided such aggregate balance is not
less than $50, and (ii) a Supplemental Eligible Account Holder at the close of
business on the Supplemental Eligibility Record Date, provided such aggregate
balance is not less than $50.
2.45 SEC means the Securities and Exchange Commission.
2.46 SPECIAL MEETING means the Special Meeting of Members of the Mutual
Holding Company called for the purpose of submitting this Plan to the Members
for their approval, including any adjournments of such meeting.
2.47 SHAREHOLDERS mean those Persons who own shares of Mid-Tier Holding
Company Common Stock.
2.48 SHAREHOLDERS' MEETING means the annual or special meeting of
Shareholders of the Mid-Tier Holding Company called for the purpose of
submitting this Plan to the Shareholders for their approval, including any
adjournments of such meeting.
2.49 SUBSCRIPTION OFFERING means the offering of the Conversion Stock
to Participants.
2.50 SUBSCRIPTION RIGHTS mean nontransferable rights to subscribe for
Conversion Stock granted to Participants pursuant to the terms of this Plan.
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2.51 SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER means any Person, except
Directors and Officers of the Association and their Associates, holding a
Qualifying Deposit at the close of business on the Supplemental Eligibility
Record Date.
2.52 SUPPLEMENTAL ELIGIBILITY RECORD DATE, if applicable, means the
date for determining Qualifying Deposits of Supplemental Eligible Account
Holders and shall be required if the Eligibility Record Date is more than 15
months prior to the date of the latest amendment to the Application for
Conversion filed by the Mutual Holding Company prior to approval of such
application by the OTS. If applicable, the Supplemental Eligibility Record Date
shall be the last day of the calendar quarter preceding OTS approval of the
Application for Conversion submitted by the Mutual Holding Company pursuant to
this Plan of Conversion.
2.53 SYNDICATED COMMUNITY OFFERING means the offering for sale by a
syndicate of broker-dealers to the general public of shares of Conversion Stock
not purchased in the Subscription Offering and the Community Offering.
2.54 TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means any defined
benefit plan or defined contribution plan, such as an employee stock ownership
plan, stock bonus plan, profit-sharing plan or other plan, which is established
for the benefit of the employees of the Holding Company and/or the Association
and which, with its related trust, meets the requirements to be "qualified"
under Section 401 of the Code as from time to time in effect. A
"Non-Tax-Qualified Employee Stock Benefit Plan" is any defined benefit plan or
defined contribution stock benefit plan which is not so qualified.
2.55 VOTING MEMBER means a Person who at the close of business on the
Voting Record Date is entitled to vote as a Member of the Mutual Holding Company
in accordance with its mutual charter and bylaws.
2.56 VOTING RECORD DATE means the date or dates for determining the
eligibility of Members to vote at the Special Meeting and of Shareholders to
vote at the Shareholders' Meeting, as applicable.
3. GENERAL PROCEDURE FOR CONVERSION AND REORGANIZATION.
(a) After the Association's organization of the Holding Company and the
receipt of all requisite regulatory approvals, the Holding Company will form
Interim as a first-tier, wholly owned subsidiary of the Holding Company, and the
Board of Directors of Interim shall adopt the Plan of Merger included as Annex C
hereto by at least a two-thirds vote. In addition, the Holding Company shall
approve such Plan of Merger in its capacity as the sole shareholder of Interim.
Furthermore, the Mid-Tier Holding Company shall approve the Plan and the Plan of
Merger in its capacity as the sole shareholder of the Association.
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(b) An application for the Conversion and Reorganization, including the
Plan and all other requisite material (the "Application for Conversion"), shall
be submitted to the OTS for approval. The Mutual Holding Company, the Mid-Tier
Holding Company and the Association also will cause notice of the adoption of
the Plan by the Boards of Directors of the Mutual Holding Company, the Mid-Tier
Holding Company and the Association to be given by publication in a newspaper
having general circulation in each community in which an office of the
Association is located and will cause copies of the Plan to be made available at
each office of the Mutual Holding Company, the Mid-Tier Holding Company and the
Association for inspection by Members and Shareholders. The Mutual Holding
Company, the Mid-Tier Holding Company and the Association will again cause to be
published, in accordance with the requirements of applicable regulations of the
OTS, a notice of the filing with the OTS of an application to convert the Mutual
Holding Company from mutual to stock form and will post the notice of the filing
for the Application for Conversion in each of their offices.
(c) Promptly following receipt of requisite approval of the OTS, this
Plan will be submitted to the Members for their consideration and approval at
the Special Meeting. The Mutual Holding Company may, at its option, mail to all
Members as of the Voting Record Date, at their last known address appearing on
the records of the Mutual Holding Company and the Association, a proxy statement
in either long or, to the extent permitted by applicable law and regulation,
summary form describing the Plan which will be submitted to a vote of the
Members at the Special Meeting. The Holding Company also shall mail to all such
Members (as well as other Participants) either a Prospectus and Order Form for
the purchase of Conversion Stock or, to the extent permitted by applicable law
and regulation, a letter informing them of their right to receive a Prospectus
and Order Form and a postage prepaid card to request such materials, subject to
the provisions of Section 15 hereof. In addition, all such Members will receive,
or be given the opportunity to request by returning a postage-prepaid card which
will be distributed with the proxy statement, letter or other written
communication, a copy of the certificate of incorporation and bylaws of the
Holding Company. The Plan must be approved by the affirmative vote of at least a
majority of the total number of votes eligible to be cast by Voting Members at
the Special Meeting.
(d) Subscription Rights to purchase shares of Conversion Stock will be
issued without payment therefor to Eligible Account Holders, Tax-Qualified
Employee Stock Benefit Plans, Supplemental Eligible Account Holders, if any,
Other Members and Directors, Officers and Employees as set forth in Sections 5,
6, 7, 8 and 9 hereof.
(e) The Mid-Tier Holding Company shall file preliminary proxy materials
with the OTS and the SEC in order to seek the approval of the Plan by its
Shareholders. Promptly following clearance of such proxy materials and the
receipt of any other requisite approval of the OTS, the Mid-Tier Holding Company
will mail definitive proxy materials to all Shareholders as of the Voting Record
Date, at their last known address appearing on the records of the Mid-Tier
Holding Company, for their consideration and approval of this Plan at the
Shareholders' Meeting. The Plan must be approved by the holders of at least
two-thirds of the outstanding Mid-Tier Holding Company Common Stock as of the
Voting Record Date. In addition, the Primary Parties have
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conditioned the consummation of the Conversion and Reorganization on the
approval of the Plan by at least a majority of the votes cast, in person or by
proxy, by the Public Shareholders at the Shareholders' Meeting.
(f) The Holding Company shall submit or cause to be submitted an
Application H-(e)1 or H-(e)1-S to the OTS for approval of the acquisition of the
Association. Such application also shall include an application to form Interim.
In addition, an application to merge the Mutual Holding Company (following its
conversion into a federal interim stock savings association) and the
Association, an application to merge the Mid-Tier Holding Company (following its
conversion into a federal interim stock savings association and the Association)
and an application to merge Interim and the Association shall be filed with the
OTS, either as exhibits to the Application H-(e)1 or H-(e)1-S or separately. All
notices required to be published in connection with such applications shall be
published at the times required.
(g) The Holding Company shall file a Registration Statement with the
SEC to register the Holding Company Common Stock to be issued in the Conversion
and Reorganization under the Securities Act of 1933, as amended, and shall
register such Holding Company Common Stock under any applicable state securities
laws. Upon registration and after the receipt of all required regulatory
approvals, the Conversion Stock shall be first offered for sale in a
Subscription Offering to Eligible Account Holders, Tax-Qualified Employee Stock
Benefit Plans, Supplemental Eligible Account Holders, if any, Other Members and
Directors, Officers and Employees. It is anticipated that any shares of
Conversion Stock remaining unsold after the Subscription Offering will be sold
(i) initially to Public Shareholders as of the Voting Record Date in the Public
Shareholders Offering and (ii) to the extent any shares of Conversion Stock
remain available after filling orders submitted in the Public Shareholders
Offering through a Community Offering and/or a Syndicated Community Offering.
The purchase price per share for the Conversion Stock shall be a uniform price
determined in accordance with Section 4 hereof. The Holding Company shall
contribute to the Association an amount of the net proceeds received by the
Holding Company from the sale of Conversion Stock as shall be determined by the
Boards of Directors of the Holding Company and the Association and as shall be
approved by the OTS.
(h) The effective date of the Conversion and Reorganization shall be
the date set forth in Section 28 hereof. Upon the effective date, the following
transactions shall occur:
(i) The Mutual Holding Company shall convert from a mutual holding
company to a federal interim stock savings association. The Mid-Tier
Holding Company shall convert into a federal interim stock savings
association and simultaneously merge with and into the Association in
the Mid-Tier Holding Company Merger, with the Association being the
surviving institution. Immediately thereafter, the Mutual Holding
Company, as converted, shall merge with and into the Association in the
Mutual Holding Company Merger, with the Association being the surviving
institution. As a result of the Mutual Holding Company Merger and the
Mid-Tier Holding Company Merger, (x) the shares of Mid-Tier Holding
Company
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Common Stock held by the Mutual Holding Company (following its
conversion to a federal interim stock savings association) shall be
extinguished and (y) Members of the Mutual Holding Company will be
granted interests in the liquidation account to be established by the
Association pursuant to Section 17 hereof.
(ii) Interim shall merge with and into the Association pursuant
to the Association Merger, with the Association being the surviving
institution. As a result of the Association Merger, (x) the shares of
Holding Company Common Stock held by the Association shall be
extinguished; (y) the shares of Mid-Tier Holding Company Common Stock
held by the Public Shareholders shall be converted into the right to
receive shares of Holding Company Common Stock based upon the Exchange
Ratio, plus cash in lieu of any fractional share interest based upon
the Actual Purchase Price; and (z) the shares of common stock of
Interim held by the Holding Company shall be converted into shares of
Association Common Stock on a one-for-one basis, with the result that
the Association shall become a wholly owned subsidiary of the Holding
Company. In addition, as a result of the Association Merger, options to
purchase shares of Mid-Tier Holding Company Common Stock which are
outstanding immediately prior to consummation of the Conversion and
Reorganization shall be converted into options to purchase shares of
Holding Company Common Stock, with the number of shares subject to the
option and the exercise price per share to be adjusted based upon the
Exchange Ratio so that the aggregate exercise price remains unchanged,
and with the duration of the option remaining unchanged.
(iii) The Holding Company shall sell the Conversion Stock in the
Offerings, as provided herein.
(i) The Primary Parties may retain and pay for the services of
financial and other advisors and investment bankers to assist in connection with
any or all aspects of the Conversion and Reorganization, including in connection
with the Offerings the payment of fees to brokers and investment bankers for
assisting Persons in completing and/or submitting Order Forms. All fees,
expenses, retainers and similar items shall be reasonable.
4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF CONVERSION
STOCK.
(a) The aggregate price at which shares of Conversion Stock shall be
sold in the Offerings shall be based on a pro forma valuation of the aggregate
market value of the Conversion Stock prepared by the Independent Appraiser. The
valuation shall be based on financial information relating to the Primary
Parties, market, financial and economic conditions, a comparison of the Primary
Parties with selected publicly-held financial institutions and holding companies
and with comparable financial institutions and holding companies and such other
factors as the Independent Appraiser may deem to be important. The valuation
shall be stated in terms of an Estimated Price
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Range, the maximum of which shall generally be no more than 15% above the
average of the minimum and maximum of such price range and the minimum of which
shall generally be no more than 15% below such average. The valuation shall be
updated during the Conversion and Reorganization as market and financial
conditions warrant and as may be required by the OTS.
(b) Based upon the independent valuation, the Boards of Directors of
the Primary Parties shall fix the Initial Purchase Price and the number (or
range) of shares of Conversion Stock to be offered in the Subscription Offering,
Public Shareholders Offering, Community Offering and/or Syndicated Community
Offering. The Actual Purchase Price and the total number of shares of Conversion
Stock to be issued in the Offerings shall be determined by the Boards of
Directors of the Primary Parties upon conclusion of the Offerings in
consultation with the Independent Appraiser and any financial advisor or
investment banker retained by the Primary Parties in connection therewith.
(c) Subject to the approval of the OTS, the Estimated Price Range may
be increased or decreased to reflect market, financial and economic conditions
prior to completion of the Conversion and Reorganization, and under such
circumstances the Primary Parties may increase or decrease the total number of
shares of Conversion Stock to be issued in the Conversion and Reorganization to
reflect any such change. Notwithstanding anything to the contrary contained in
this Plan, no resolicitation of subscribers shall be required and subscribers
shall not be permitted to modify or cancel their subscriptions unless the gross
proceeds from the sale of the Conversion Stock issued in the Conversion and
Reorganization are less than the minimum or more than 15% above the maximum of
the Estimated Price Range set forth in the Prospectus. In the event of an
increase in the total number of shares offered in the Conversion and
Reorganization due to an increase in the Estimated Price Range, the priority of
share allocation shall be as set forth in this Plan.
5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS.
(a) Each Eligible Account Holder shall receive, without payment,
Subscription Rights to purchase up to the greater of (i) $1,000,000 of
Conversion Stock (or such maximum purchase limitation as may be established for
the Community Offering and/or Syndicated Community Offering), (ii) one-tenth of
1% of the total offering of shares in the Subscription Offering and (iii) 15
times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Conversion Stock offered in the
Subscription Offering by a fraction, of which the numerator is the amount of the
Qualifying Deposits of the Eligible Account Holder and the denominator is the
total amount of all Qualifying Deposits of all Eligible Account Holders, in each
case subject to Sections 12 and 15 hereof.
(b) In the event of an oversubscription for shares of Conversion Stock
pursuant to Section 5(a), available shares shall be allocated among subscribing
Eligible Account Holders so as to permit each such Eligible Account Holder, to
the extent possible, to purchase a number of shares which will make his or her
total allocation equal to the lesser of the number of shares subscribed for or
100 shares. Any available shares remaining after each subscribing Eligible
Account Holder has
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been allocated the lesser of the number of shares subscribed for or 100 shares
shall be allocated among the subscribing Eligible Account Holders in the
proportion which the Qualifying Deposit of each such subscribing Eligible
Account Holder bears to the total Qualifying Deposits of all such subscribing
Eligible Account Holders whose orders are unfilled, provided that no fractional
shares shall be issued. Subscription Rights of Eligible Account Holders who are
also Directors or Officers and their Associates shall be subordinated to those
of other Eligible Account Holders to the extent that they are attributable to
increased deposits during the one-year period preceding the Eligibility Record
Date.
6. SUBSCRIPTION RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT
PLANS.
Tax-Qualified Employee Stock Benefit Plans shall receive, without
payment, Subscription Rights to purchase in the aggregate up to 10% of the
Conversion Stock, including any shares of Conversion Stock to be issued in the
Conversion and Reorganization as a result of an increase in the Estimated Price
Range after commencement of the Subscription Offering and prior to completion of
the Conversion and Reorganization. The subscription rights granted to
Tax-Qualified Employee Stock Benefit Plans shall be subject to the availability
of shares of Conversion Stock after taking into account the shares of Conversion
Stock purchased by Eligible Account Holders; provided, however, that in the
event that the total number of shares of Conversion is increased to any amount
greater than the number of shares representing the maximum of the Estimated
Price Range as set forth in the Prospectus ("Maximum Shares"), the ESOP shall
have a priority right to purchase any such shares exceeding the Maximum Shares
up to an aggregate of 8% of Conversion Stock. Shares of Conversion Stock
purchased by any individual participant ("Plan Participant") in a Tax-Qualified
Employee Stock Benefit Plan using funds therein pursuant to the exercise of
subscription rights granted to such Participant in his individual capacity as a
Participant and/or purchases by such Plan Participant in the Community Offering
shall not be deemed to be purchases by a Tax-Qualified Employee Stock Benefit
Plan for purposes of calculating the maximum amount of Conversion Stock that
Tax-Qualified Employee Stock Benefit Plans may purchase pursuant to the first
sentence of this Section 6 if the individual Plan Participant controls or
directs the investment authority with respect to such account or subaccount.
Consistent with applicable laws and regulations and policies and practices of
the OTS, the Tax-Qualified Employee Stock Benefit Plans may use funds
contributed by the Holding Company or the Association and/or borrowed from an
independent financial institution to exercise such Subscription Rights, and the
Holding Company and the Association may make scheduled discretionary
contributions thereto, provided that such contributions do not cause the Holding
Company or the Association to fail to meet any applicable regulatory capital
requirement.
7. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT
HOLDERS.
(a) In the event that the Eligibility Record Date is more than 15
months prior to the date of the latest amendment to the Application for
Conversion filed prior to OTS approval, then, and
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only in that event, a Supplemental Eligibility Record Date shall be set and each
Supplemental Eligible Account Holder shall receive, without payment,
Subscription Rights to purchase up to the greater of (i) $1,000,000 of
Conversion Stock in the Subscription Offering (or such maximum purchase
limitation as may be established for the Community Offering and/or Syndicated
Community Offering), (ii) one-tenth of 1% of the total offering of shares in the
Subscription Offering and (iii) 15 times the product (rounded down to the next
whole number) obtained by multiplying the total number of shares of Conversion
Stock offered in the Subscription Offering by a fraction, of which the numerator
is the amount of the Qualifying Deposits of the Supplemental Eligible Account
Holder and the denominator is the total amount of all Qualifying Deposits of all
Supplemental Eligible Account Holders, in each case subject to Sections 12 and
15 hereof and the availability of shares of Conversion Stock for purchase after
taking into account the shares of Conversion Stock purchased by Eligible Account
Holders and Tax-Qualified Employee Stock Benefit Plans through the exercise of
Subscription Rights under Sections 5 and 6 hereof.
(b) In the event of an oversubscription for shares of Conversion Stock
pursuant to Section 7(a), available shares shall be allocated among subscribing
Supplemental Eligible Account Holders so as to permit each such Supplemental
Eligible Account Holder, to the extent possible, to purchase a number of shares
sufficient to make his or her total allocation (including the number of shares,
if any, allocated in accordance with Section 5(a)) equal to the lesser of the
number of shares subscribed for or 100 shares. Any remaining available shares
shall be allocated among subscribing Supplemental Eligible Account Holders in
the proportion that the amount of their respective Qualifying Deposits bears to
the total amount of the Qualifying Deposits of all such subscribing Supplemental
Eligible Account Holders whose orders are unfilled, provided that no fractional
shares shall be issued.
8. SUBSCRIPTION RIGHTS OF OTHER MEMBERS.
(a) Each Other Member shall receive, without payment, Subscription
Rights to purchase up to the greater of (i) $1,000,000 of Conversion Stock in
the Subscription Offering (or such maximum purchase limitation as may be
established for the Community Offering and/or Syndicated Community Offering) and
(ii) one-tenth of 1% of the total offering of shares in the Subscription
Offering, subject to Sections 12 and 15 hereof and the availability of shares of
Conversion Stock for purchase after taking into account the shares of Conversion
Stock purchased by Eligible Account Holders, Tax-Qualified Employee Stock
Benefit Plans and Supplemental Eligible Account Holders, if any, through the
exercise of Subscription Rights under Sections 5, 6 and 7 hereof.
(b) If, pursuant to this Section 8, Other Members subscribe for a
number of shares of Conversion Stock in excess of the total number of shares of
Conversion Stock remaining, available shares shall be allocated among
subscribing Other Members so as to permit each such Other Member, to the extent
possible, to purchase a number of shares which will make his or her total
allocation equal to the lesser of the number of shares subscribed for or 100
shares. Any remaining shares shall be allocated among subscribing Other Members
on a pro rata basis in the same
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<PAGE> 18
proportion as each such Other Member's subscription bears to the total
subscriptions of all such subscribing Other Members, provided that no fractional
shares shall be issued.
9. SUBSCRIPTION RIGHTS OF DIRECTORS, OFFICERS AND EMPLOYEES.
(a) To the extent that there are sufficient shares remaining after
satisfaction of all subscriptions under the above categories, Directors,
Officers and Employees of the Association shall receive, without payment,
Subscription Rights to purchase in this category up to an aggregate of 15.0% of
the shares of Conversion Stock offered in the Subscription Offering.
(b) In the event of an oversubscription for shares of Conversion Stock
pursuant to Section 9(a), Subscription Rights for the purchase of such shares
shall be allocated among the individual Directors, Officers and Employees on a
point system basis, whereby a point will be assigned for each year of employment
and for each salary increment of $5,000 per annum and five points for each
office held in the Mutual Holding Company and the Association, including a
directorship. If any such Director, Officer or Employee does not subscribe for
his or her full allocation of shares, any shares not subscribed for may be
purchased by other Directors, Officers and Employees in proportion to their
respective subscriptions, provided that no fractional shares shall be issued.
10. PUBLIC SHAREHOLDERS OFFERING.
(a) If less than the total number of shares of Conversion Stock are
sold in the Subscription Offering, all remaining shares will be offered for sale
to Public Shareholders as of the Voting Record Date. The amount of Conversion
Stock that any Public Shareholder may purchase in the Public Shareholders
Offering shall not exceed the greater of (i) $1,000,000 of Conversion Stock in
the Subscription Offering (or such maximum purchase limitation as may be
established for the Community Offering and/or Syndicated Community Offering) and
(ii) one-tenth of 1% of the total offering of shares in the Subscription
Offering, subject to Sections 12 and 15 hereof and the availability of shares of
Conversion Stock for purchase after taking into account the shares of Conversion
Stock purchased by Eligible Account Holders, Tax-Qualified Employee Stock
Benefit Plans, Supplemental Eligible Account Holders, if any, Other Members and
Directors, Officers and Employees. Each order for Conversion Stock in the Public
Shareholders Offering shall be subject to the absolute right of the Primary
Parties to accept or reject any such order in whole or in part either at the
time of receipt of an order or as soon as practicable following completion of
the Public Shareholders Offering. The Primary Parties may commence the Public
Shareholders Offering concurrently with, at any time during, or as soon as
practicable after the end of the Subscription Offering and the Public
Shareholders Offering must be completed within 45 days of the completion of the
Subscription Offering, unless extended by the Primary Parties with any required
regulatory approval.
(b) If, pursuant to this Section 10, Public Shareholders submit orders
for a number of shares of Conversion Stock in excess of the total number of
shares of Conversion Stock remaining,
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<PAGE> 19
available shares shall be allocated among subscribing Public Shareholders as of
the Voting Record Date on a pro rata basis in the same proportion as each such
Public Shareholder's order bears to the total orders of all such subscribing
Public Shareholders, provided that no fractional shares shall be issued.
11. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING AND
OTHER OFFERINGS.
(a) If less than the total number of shares of Conversion Stock are
sold in the Subscription Offering, it is anticipated that all remaining shares
of Conversion Stock shall, if practicable, be sold in a Community Offering.
Subject to the requirements set forth herein, the manner in which the Conversion
Stock is sold in the Community Offering shall have as the objective the
achievement of the widest possible distribution of such stock.
(b) In the event of a Community Offering, all shares of Conversion
Stock which are not subscribed for in the Subscription Offering or ordered in
the Public Shareholders Offering shall be offered for sale by means of a direct
community marketing program, which may provide for the use of brokers, dealers
or investment banking firms experienced in the sale of financial institution
securities. Any available shares in excess of those not subscribed for in the
Subscription Offering will be available for purchase by members of the general
public to whom a Prospectus and an Order Form is delivered by the Holding
Company or on its behalf, with preference given to natural persons residing in
counties in Florida in which the Association has a branch office ("Preferred
Subscribers").
(c) A Prospectus and Order Form shall be furnished to such Persons as
the Primary Parties may select in connection with the Community Offering, and
each order for Conversion Stock in the Community Offering shall be subject to
the absolute right of the Primary Parties to accept or reject any such order in
whole or in part either at the time of receipt of an order or as soon as
practicable following completion of the Community Offering. Available shares
will be allocated first to each Preferred Subscriber whose order is accepted in
an amount equal to the lesser of 100 shares or the number of shares subscribed
for by each such Preferred Subscriber, if possible. Thereafter, unallocated
shares shall be allocated among the Preferred Subscribers whose accepted orders
remain unsatisfied in the same proportion that the unfilled order of each bears
to the total unfilled orders of all Preferred Subscribers whose accepted orders
remain unsatisfied, provided that no fractional shares shall be issued. If there
are any shares remaining after all accepted orders by Preferred Subscribers have
been satisfied, such remaining shares shall be allocated to other members of the
general public who purchase in the Community Offering, applying the same
allocation described above for Preferred Subscribers.
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<PAGE> 20
(d) The amount of Conversion Stock that any Person may purchase in the
Community Offering shall not exceed the greater of (i) $1,000,000 of Conversion
Stock in the Subscription Offering or (ii) one-tenth of 1% of the total offering
in the Subscription Offering, provided, however, that this amount may be
increased to up to 5% of the total offering of shares of Conversion Stock,
subject to any required regulatory approval but without the further approval of
Members of the Mutual Holding Company or the Shareholders of the Mid-Tier
Holding Company; and provided further that, to the extent applicable, and
subject to the preferences set forth in Section 11(b) and (c) of this Plan and
the limitations on purchases of Conversion Stock set forth in this Section 11(d)
and Section 12 of this Plan, orders for Conversion Stock in the Community
Offering shall first be filled to a maximum of 2% of the total number of shares
of Conversion Stock sold in the Offerings and thereafter any remaining shares
shall be allocated on an equal number of shares basis per order until all orders
have been filled. The Primary Parties may commence the Community Offering
concurrently with, at any time during, or as soon as practicable after the end
of, the Subscription Offering, and the Community Offering must be completed
within 45 days after the completion of the Subscription Offering, unless
extended by the Primary Parties with any required regulatory approval.
(e) Subject to such terms, conditions and procedures as may be
determined by the Primary Parties, all shares of Conversion Stock not subscribed
for in the Subscription Offering or ordered in the Public Shareholders Offering
or the Community Offering may be sold by a syndicate of broker-dealers to the
general public in a Syndicated Community Offering. Each order for Conversion
Stock in the Syndicated Community Offering shall be subject to the absolute
right of the Primary Parties to accept or reject any such order in whole or in
part either at the time of receipt of an order or as soon as practicable after
completion of the Syndicated Community Offering. The amount of Conversion Stock
that any Person may purchase in the Syndicated Community Offering shall not
exceed $1,000,000 of Conversion Stock in the Subscription Offering, provided,
however, that this amount may be increased to up to 5% of the total offering of
shares of Conversion Stock, subject to any required regulatory approval but
without the further approval of Members of the Mutual Holding Company or the
Shareholders of the Mid-Tier Holding Company; and provided further that, to the
extent applicable, and subject to the limitations on purchases of Conversion
Stock set forth in this Section 11(e) and Section 12 of this Plan, orders for
Conversion Stock in the Syndicated Community Offering shall first be filled to a
maximum of 2% of the total number of shares of Conversion Stock sold in the
Offerings and thereafter any remaining shares shall be allocated on an equal
number of shares basis per order until all orders have been filled. The Primary
Parties may commence the Syndicated Community Offering concurrently with, at any
time during, or as soon as practicable after the end of, the Subscription
Offering and/or Community Offering, and the Syndicated Community Offering must
be completed within 45 days after the completion of the Subscription Offering,
unless extended by the Primary Parties with any required regulatory approval.
(f) The Holding Company and the Association may sell any shares of
Conversion Stock remaining following the Subscription Offering, the Public
Shareholders Offering, Community Offering and/or the Syndicated Community
Offering in a Public Offering. The provisions of
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<PAGE> 21
Section 12 hereof shall not be applicable to the sales to underwriters for
purposes of the Public Offering but shall be applicable to sales by the
underwriters to the public. The price to be paid by the underwriters in such an
offering shall be equal to the Actual Purchase Price less an underwriting
discount to be negotiated among such underwriters and the Association and the
Holding Company, subject to any required regulatory approval or consent.
(g) If for any reason a Syndicated Community Offering or Public
Offering of shares of Conversion Stock not sold in the Subscription Offering and
the Community Offering cannot be effected, or in the event that any
insignificant residue of shares of Conversion Stock is not sold in the
Subscription Offering, Community Offering or Syndicated Community Offering, the
Primary Parties shall use their best efforts to obtain other purchasers for such
shares in such manner and upon such conditions as may be satisfactory to the
OTS.
12. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF CONVERSION
STOCK.
(a) The maximum number of shares of Conversion Stock which may be
purchased in the Conversion by the ESOP shall not exceed 8% and all
Tax-Qualified Employee Stock Benefit Plans shall not exceed 10% of the total
number of shares of Conversion Stock sold in the Offerings, in each instance,
including any shares which may be issued in the event of an increase in the
maximum of the Estimated Price Range to reflect changes in market, financial and
economic conditions after commencement of the Subscription Offering and prior to
completion of the Offerings; provided, however, that purchases of Conversion
Stock which are made by Plan Participants pursuant to the exercise of
subscription rights granted to such Plan Participant in his individual capacity
as a Participant or purchases by a Plan Participant in the Public Shareholders
Offering or the Community Offering using the funds thereof held in Tax-Qualified
Employee Stock Benefit Plans shall not be deemed to be purchases by a
Tax-Qualified Employee Stock Benefit Plan for purposes of this Section 12(a).
(b) Except in the case of Tax-Qualified Employee Stock Benefit Plans in
the aggregate, as set forth in Section 12(a) hereof, and certain Eligible
Account Holders and Supplemental Eligible Account Holders, as set forth in
Sections 5(a)(ii) and (iii) and 7(a)(ii) and (iii) hereof, and in addition to
the other restrictions and limitations set forth herein, the maximum amount of
Holding Company Common Stock which any Person together with any Associate or
group of Persons acting in concert may, directly or indirectly, subscribe for or
purchase in the Conversion and Reorganization shall not exceed the number of
shares of Conversion Stock that when combined with Exchange Shares received
aggregate 3% of the total number of shares of Holding Company Common Stock
issued in the Conversion and Reorganization.
(c) The number of shares of Conversion Stock which Directors and
Officers and their Associates may purchase in the aggregate in the Offerings
shall not exceed 25% of the total number of shares of Conversion Stock sold in
the Offerings, including any shares which may be issued in the event of an
increase in the maximum of the Estimated Price Range to reflect changes in
market,
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financial and economic conditions after commencement of the Subscription
Offering and prior to completion of the Offerings.
(d) No Person may purchase fewer than 25 shares of Conversion Stock in
the Offerings, to the extent such shares are available; provided, however, that
if the Actual Purchase Price is greater than $20.00 per share, such minimum
number of shares shall be adjusted so that the aggregate Actual Purchase Price
for such minimum shares will not exceed $500.00.
(e) For purposes of the foregoing limitations and the determination of
Subscription Rights, (i) Directors, Officers and Employees shall not be deemed
to be Associates or a group acting in concert solely as a result of their
capacities as such, (ii) shares purchased by Tax-Qualified Employee Stock
Benefit Plans shall not be attributable to the individual trustees or
beneficiaries of any such plan for purposes of determining compliance with the
limitations set forth in Section 12(b) or Section 12(c) hereof, (iii) Exchange
Shares shall be valued at the Actual Purchase Price, and (iv) shares purchased
by a Tax-Qualified Employee Stock Benefit Plan pursuant to instructions of an
individual in an account in such plan in which the individual has the right to
direct the investment, including any plan of the Association qualified under
Section 401(k) of the Code, shall be aggregated and included in that
individual's purchases and not attributed to the Tax-Qualified Employee Stock
Benefit Plan.
(f) Subject to any required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of the Members of
the Mutual Holding Company or the Shareholders of the Mid-Tier Holding Company,
the Primary Parties may increase or decrease any of the individual or aggregate
purchase limitations set forth herein to a percentage which does not exceed 5%
of the total offering of shares of Holding Company Common Stock in the
Conversion and Reorganization whether prior to, during or after the Subscription
Offering, Public Shareholders Offering, Community Offering and/or Syndicated
Community Offering. In the event that an individual purchase limitation is
increased after commencement of the Subscription Offering or any other offering,
the Primary Parties shall permit any Person who subscribed for the maximum
number of shares of Conversion Stock to purchase an additional number of shares,
so that such Person shall be permitted to subscribe for the then maximum number
of shares permitted to be subscribed for by such Person, subject to the rights
and preferences of any Person who has priority Subscription Rights. In the event
that any of the individual or aggregate purchase limitations are decreased after
commencement of the Subscription Offering or any other offering, the orders of
any Person who subscribed for more than the new purchase limitation shall be
decreased by the minimum amount necessary so that such Person shall be in
compliance with the then maximum number of shares permitted to be subscribed for
by such Person.
(g) The Primary Parties shall have the right to take all such action as
they may, in their sole discretion, deem necessary, appropriate or advisable in
order to monitor and enforce the terms, conditions, limitations and restrictions
contained in this Section 12 and elsewhere in this Plan and the terms,
conditions and representations contained in the Order Form, including, but not
limited to, the absolute right (subject only to any necessary regulatory
approvals or concurrences) to reject,
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<PAGE> 23
limit or revoke acceptance of any subscription or order and to delay, terminate
or refuse to consummate any sale of Conversion Stock which they believe might
violate, or is designed to, or is any part of a plan to, evade or circumvent
such terms, conditions, limitations, restrictions and representations. Any such
action shall be final, conclusive and binding on all persons, and the Primary
Parties and their respective Boards shall be free from any liability to any
Person on account of any such action.
(h) Notwithstanding anything to the contrary contained in this Plan and
except as may otherwise be required by the OTS, the Public Shareholders will not
have to sell any Mid-Tier Holding Company Common Stock or be limited in
receiving Exchange Shares even if their ownership of Mid-Tier Holding Company
Common Stock when converted into Exchange Shares would exceed an applicable
purchase limitation; provided, however, that a Public Shareholder who would
exceed an applicable purchase limitation may be precluded from purchasing
Conversion Stock in the Offerings.
13. TIMING OF SUBSCRIPTION OFFERING; MANNER OF EXERCISING
SUBSCRIPTION RIGHTS AND ORDER FORMS.
(a) The Subscription Offering may be commenced concurrently with or at
any time after the mailing to Voting Members of the Mutual Holding Company and
Shareholders of the Mid-Tier Holding Company of the proxy statement(s) to be
used in connection with the Special Meeting and the Shareholders' Meeting. The
Subscription Offering may be closed before the Special Meeting and the
Shareholders' Meeting, provided that the offer and sale of the Conversion Stock
shall be conditioned upon the approval of the Plan by the Voting Members of the
Mutual Holding Company and the Shareholders of the Mid-Tier Holding Company at
the Special Meeting and the Shareholders' Meeting, respectively.
(b) The exact timing of the commencement of the Subscription Offering
shall be determined by the Primary Parties in consultation with the Independent
Appraiser and any financial or advisory or investment banking firm retained by
them in connection with the Conversion. The Primary Parties may consider a
number of factors, including, but not limited to, their current and projected
future earnings, local and national economic conditions, and the prevailing
market for stocks in general and stocks of financial institutions in particular.
The Primary Parties shall have the right to withdraw, terminate, suspend, delay,
revoke or modify any such Subscription Offering, at any time and from time to
time, as they in their sole discretion may determine, without liability to any
Person, subject to compliance with applicable securities laws and any necessary
regulatory approval or concurrence.
(c) The Primary Parties shall, promptly after the SEC has declared the
Registration Statement, which includes the Prospectus, effective and all
required regulatory approvals have been obtained, distribute or make available
the Prospectus, together with Order Forms for the purchase of Conversion Stock,
to all Participants for the purpose of enabling them to exercise their
respective Subscription Rights, subject to Section 15 hereof. To the extent
permitted by applicable law and
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regulation, the Primary Parties may elect to mail a Prospectus and Order Form
only to those Participants who request such materials by returning a
postage-paid card to the Primary Parties by a date specified in the letter
informing them of their Subscription Rights. Under such circumstances, the
Subscription Offering shall not be closed prior to the expiration of 30 days
after the mailing by the Primary Parties of the postage-paid card to
Participants.
(d) A single Order Form for all Deposit Accounts maintained with the
Association by an Eligible Account Holder and any Supplemental Eligible Account
Holder may be furnished, irrespective of the number of Deposit Accounts
maintained with the Association on the Eligibility Record Date and Supplemental
Eligibility Record Date, respectively. No person holding a subscription right
may exceed any otherwise applicable purchase limitation by submitting multiple
orders for Conversion stock. Multiple orders are subject to adjustment, as
appropriate, on a pro rata basis and deposit balances will be divided equally
among such orders in allocating shares in the event of an oversubscription.
(e) The recipient of an Order Form shall have no less than 20 days and
no more than 45 days from the date of mailing of the Order Form (with the exact
termination date to be set forth on the Order Form) to properly complete and
execute the Order Form and deliver it to the Primary Parties. The Primary
Parties may extend such period by such amount of time as they determine is
appropriate. Failure of any Participant to deliver a properly executed Order
Form to the Primary Parties, along with payment (or authorization for payment by
withdrawal) for the shares of Conversion Stock subscribed for, within the time
limits prescribed, shall be deemed a waiver and release by such person of any
rights to subscribe for shares of Conversion Stock. Each Participant shall be
required to confirm to the Primary Parties by executing an Order Form that such
Person has fully complied with all of the terms, conditions, limitations and
restrictions in the Plan.
(f) The Primary Parties shall have the absolute right, in their sole
discretion and without liability to any Participant or other Person, to reject
any Order Form, including, but not limited to, any Order Form that is (i)
improperly completed or executed; (ii) not timely received; (iii) not
accompanied by the proper payment (or authorization of withdrawal for payment)
or, in the case of institutional investors in the Community Offering, not
accompanied by an irrevocable order together with a legally binding commitment
to pay the full amount of the purchase price prior to 48 hours before the
completion of the Offerings; or (iv) submitted by a Person whose representations
the Primary Parties believe to be false or who they otherwise believe, either
alone, or acting in concert with others, is violating, evading or circumventing,
or intends to violate, evade or circumvent, the terms and conditions of the
Plan. Furthermore, in the event Order Forms (i) are not delivered and are
returned to the Association, the Mid-Tier Holding Company or the Mutual Holding
Company by the Untied States Postal Service or the Association, the Mid-Tier
Holding Company or the Mutual Holding Company is unable to locate the addressee,
or (ii) are not mailed pursuant to a "no mail" order placed in effect by the
account holder, the subscription rights of the person to which such rights have
been granted will lapse as though such person failed to return the contemplated
Order Form within the time period specified thereon. The Primary Parties may,
but will not be required to, waive any irregularity on any Order Form or may
require the submission of corrected
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Order Forms or the remittance of full payment for shares of Conversion Stock by
such date as they may specify. The interpretation of the Primary Parties of the
terms and conditions of the Order Forms shall be final and conclusive.
14. PAYMENT FOR CONVERSION STOCK.
(a) Payment for shares of Conversion Stock subscribed for by
Participants in the Subscription Offering and payment for shares of Conversion
Stock ordered by Persons in the Public Shareholders Offering or the Community
Offering shall be equal to the Initial Purchase Price multiplied by the number
of shares which are being subscribed for or ordered, respectively. Such payment
may be made in cash, if delivered in person, or by check or money order at the
time the Order Form is delivered to the Primary Parties. The Primary Parties, in
their sole and absolute discretion, may also elect to receive payment for shares
of Conversion Stock by wire transfer. In addition, the Primary Parties may elect
to provide Participants and/or other Persons who have a Deposit Account with the
Association the opportunity to pay for shares of Conversion Stock by authorizing
the Association to withdraw from such Deposit Account an amount equal to the
aggregate Initial Purchase Price of such shares. If the Actual Purchase Price is
less than the Initial Purchase Price, the Primary Parties shall refund the
difference to all Participants and other Persons, unless the Primary Parties
choose to provide Participants and other Persons the opportunity on the Order
Form to elect to have such difference applied to the purchase of additional
whole shares of Conversion Stock. If the Actual Purchase Price is more than the
Initial Purchase Price, the Primary Parties shall reduce the number of shares of
Conversion Stock ordered by Participants and other Persons and refund any
remaining amount which is attributable to a fractional share interest, unless
the Primary Parties choose to provide Participants and other Persons the
opportunity to increase the Actual Purchase Price submitted by them.
(b) Consistent with applicable laws and regulations and policies and
practices of the OTS, payment for shares of Conversion Stock subscribed for by
Tax-Qualified Employee Stock Benefit Plans may be made with funds contributed by
the Holding Company and/or the Association and/or funds obtained pursuant to a
loan from an unrelated financial institution pursuant to a loan commitment which
is in force from the time that any such plan submits an Order Form until the
closing of the transactions contemplated hereby.
(c) If a Participant or other Person authorizes the Association to
withdraw the amount of the Initial Purchase Price from his or her Deposit
Account, the Association shall have the right to make such withdrawal or to
freeze funds equal to the aggregate Initial Purchase Price upon receipt of the
Order Form. Notwithstanding any regulatory provisions regarding penalties for
early withdrawals from certificate accounts, the Association may allow payment
by means of withdrawal from certificate accounts without the assessment of such
penalties. In the case of an early withdrawal of only a portion of such account,
the certificate evidencing such account shall be canceled if any applicable
minimum balance requirement ceases to be met. In such case, the remaining
balance will earn interest at the regular passbook rate. However, where any
applicable minimum balance is maintained in such certificate account, the rate
of return on the balance of the
23
<PAGE> 26
certificate account shall remain the same as prior to such early withdrawal.
This waiver of the early withdrawal penalty applies only to withdrawals made in
connection with the purchase of Conversion Stock and is entirely within the
discretion of the Primary Parties.
(d) The Association shall pay interest, at not less than the passbook
rate, for all amounts paid in cash, by check or money order to purchase shares
of Conversion Stock in the Subscription Offering and the Community Offering from
the date payment is received until the date the Conversion and Reorganization is
completed or terminated.
(e) The Association shall not knowingly loan funds or otherwise extend
credit to any Participant or other Person to purchase Conversion Stock.
(f) Each share of Conversion Stock shall be non-assessable upon payment
in full of the Actual Purchase Price.
15. ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES.
The Primary Parties shall make reasonable efforts to comply with the
securities laws of all jurisdictions in the United States in which Participants
reside. However, no Participant will be offered or receive any Conversion Stock
under the Plan if such Participant resides in a foreign country or resides in a
jurisdiction of the United States with respect to which all of the following
apply: (a) there are few Participants otherwise eligible to subscribe for shares
under this Plan who reside in such jurisdiction; (b) the granting of
Subscription Rights or the offer or sale of shares of Conversion Stock to such
Participants would require any of the Primary Parties or their respective
Directors and Officers, under the laws of such jurisdiction, to register as a
broker-dealer, salesman or selling agent or to register or otherwise qualify the
Conversion Stock for sale in such jurisdiction, or any of the Primary Parties
would be required to qualify as a foreign corporation or file a consent to
service of process in such jurisdiction; and (c) such registration,
qualification or filing in the judgment of the Primary Parties would be
impracticable or unduly burdensome for reasons of cost or otherwise.
16. VOTING RIGHTS OF SHAREHOLDERS.
Following consummation of the Conversion and Reorganization, voting
rights with respect to the Association shall be held and exercised exclusively
by the Holding Company as holder of all of the Association's outstanding voting
capital stock, and voting rights with respect to the Holding Company shall be
held and exercised exclusively by the holders of the Holding Company's voting
capital stock.
17. LIQUIDATION ACCOUNT.
(a) At the time of the Mutual Holding Company Merger, the Association
shall establish a liquidation account in an amount equal to the amount of
dividends with respect to the Association
24
<PAGE> 27
Common Stock of the Mid-Tier Holding Company Common Stock waived by the Mutual
Holding Company plus the greater of (i) $36,134,000, which is equal to 100% of
the retained earnings of the Association as of March 31, 1994, the date of the
latest statement of financial condition contained in the final offering circular
utilized in the formation of the Mutual Holding Company, or (ii) 51.34% of the
Mid-Tier Holding Company's total shareholders' equity as reflected in its latest
statement of financial condition contained in the final Prospectus utilized in
the Conversion and Reorganization. The function of the liquidation account will
be to preserve the rights of certain holders of Deposit Accounts in the
Association who maintain such accounts in the Association following the
Conversion and Reorganization to a priority to distributions in the unlikely
event of a liquidation of the Association subsequent to the Conversion and
Reorganization.
(b) The liquidation account shall be maintained for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders, if any, who
maintain their Deposit Accounts in the Association after the Conversion and
Reorganization. Each such account holder will, with respect to each Deposit
Account held, have a related inchoate interest in a portion of the liquidation
account balance, which interest will be referred to in this Section 17 as the
"subaccount balance." All Deposit Accounts having the same social security
number will be aggregated for purposes of determining the initial subaccount
balance with respect to such Deposit Accounts, except as provided in Section
17(d) hereof.
(c) In the event of a complete liquidation of the Association
subsequent to the Conversion and Reorganization (and only in such event), each
Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall
be entitled to receive a liquidation distribution from the liquidation account
in the amount of the then current subaccount balances for Deposit Accounts then
held (adjusted as described below) before any liquidation distribution may be
made with respect to the capital stock of the Association. No merger,
consolidation, sale of bulk assets or similar combination transaction with
another FDIC-insured institution in which the Association is not the surviving
entity shall be considered a complete liquidation for this purpose. In any such
transaction, the liquidation account shall be assumed by the surviving entity.
(d) The initial subaccount balance for a Deposit Account held by an
Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall
be determined by multiplying the opening balance in the liquidation account by a
fraction, of which the numerator is the amount of the Qualifying Deposits of
such account holder and the denominator is the total amount of Qualifying
Deposits of all Eligible Account Holders and Supplemental Eligible Account
Holders, if any. For Deposit Accounts in existence at both the Eligibility
Record Date and the Supplemental Eligibility Record Date, if any, separate
initial subaccount balances shall be determined on the basis of the Qualifying
Deposits in such Deposit Accounts on each such record date. Initial subaccount
balances shall not be increased, and shall be subject to downward adjustment as
provided below.
(e) If the aggregate deposit balance in the Deposit Account(s) of any
Eligible Account Holder or Supplemental Eligible Account Holder, if any, at the
close of business on any December 31 annual closing date, commencing December
31, 1998, is less than the lesser of (a) the aggregate
25
<PAGE> 28
deposit balance in such Deposit Account(s) at the close of business on any other
annual closing date subsequent to such record dates or (b) the aggregate deposit
balance in such Deposit Account(s) as of the Eligibility Record Date or the
Supplemental Eligibility Record Date, if any, the subaccount balance for such
Deposit Account(s) shall be adjusted by reducing such subaccount balance in an
amount proportionate to the reduction in such deposit balance. In the event of
such a downward adjustment, the subaccount balance shall not be subsequently
increased, notwithstanding any subsequent increase in the deposit balance of the
related Deposit Account(s). The subaccount balance of an Eligible Account Holder
or Supplemental Eligible Account Holder, if any, will be reduced to zero if the
Account Holder ceases to maintain a Deposit Account at the Association that has
the same social security number as appeared on his Deposit Account(s) at the
Eligibility Record Date or, if applicable, the Supplemental Eligibility Record
Date.
(f) Subsequent to the Conversion and Reorganization, the Association
may not pay cash dividends generally on deposit accounts and/or capital stock of
the Association, or repurchase any of the capital stock of the Association, if
such dividend or repurchase would reduce the Association's regulatory capital
below the aggregate amount of the then current subaccount balances for Deposit
Accounts then held; otherwise, the existence of the liquidation account shall
not operate to restrict the use or application of any of the net worth accounts
of the Association.
(g) For purposes of this Section 17, a Deposit Account includes a
predecessor or successor account which is held by an Account Holder with the
same social security number.
18. TRANSFER OF DEPOSIT ACCOUNTS.
Each Deposit Account in the Association at the time of the consummation
of the Conversion and Reorganization shall become, without further action by the
holder, a Deposit Account in the Association equivalent in withdrawable amount
to the withdrawal value (as adjusted to give effect to any withdrawal made for
the purchase of Conversion Stock), and subject to the same terms and conditions
(except as to voting and liquidation rights) as such Deposit Account in the
Association immediately preceding consummation of the Conversion and
Reorganization. Holders of Deposit Accounts in the Association shall not, as
such holders, have any voting rights.
19. REQUIREMENTS FOLLOWING CONVERSION FOR REGISTRATION,
MARKET MAKING AND STOCK EXCHANGE LISTING.
In connection with the Conversion and Reorganization, the Holding
Company shall register the Holding Company Common Stock pursuant to Section 12
of the Securities Exchange Act of 1934, as amended, and shall undertake not to
deregister such stock for a period of three years thereafter. The Holding
Company also shall use its best efforts to (i) encourage and assist a market
maker to establish and maintain a market for the Holding Company Common Stock
and (ii) list the Holding Company Common Stock on a national or regional
securities exchange or to have quotations for such stock disseminated on The
Nasdaq Stock Market.
26
<PAGE> 29
20. DIRECTORS AND OFFICERS OF THE ASSOCIATION.
Each person serving as a Director or Officer of the Association at the
time of the Conversion and Reorganization shall continue to serve as a Director
or Officer of the Association for the balance of the term for which the person
was elected prior to the Conversion and Reorganization, and until a successor is
elected and qualified. The number, names, business addresses and terms of the
Directors of the Association are set forth in the Plans of Merger included as
Annexes A, B and C hereto.
21. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS
FOLLOWING THE CONVERSION AND REORGANIZATION.
For a period of three years following the Conversion and
Reorganization, the Directors and Officers of the Holding Company and the
Association and their Associates may not purchase, without the prior written
approval of the OTS, Holding Company Common Stock except from a broker-dealer
registered with the SEC. This prohibition shall not apply, however, to (i) a
negotiated transaction arrived at by direct negotiation between buyer and seller
and involving more than 1% of the outstanding Holding Company Common Stock and
(ii) purchases of stock made by and held by any Tax-Qualified Employee Stock
Benefit Plan (and purchases of stock made by and held by any Non-Tax-Qualified
Employee Stock Benefit Plan following the receipt of shareholder approval of
such plan) which may be attributable to individual officers or directors.
The foregoing restriction on purchases of Holding Company Common Stock
shall be in addition to any restrictions that may be imposed by federal and
state securities laws.
22. RESTRICTIONS ON TRANSFER OF STOCK.
All shares of Conversion Stock which are purchased by Persons other
than Directors and Officers shall be transferable without restriction, except in
connection with a transaction proscribed by Section 23 of this Plan. Shares of
Conversion Stock purchased by Directors and Officers of the Holding Company and
the Association on original issue from the Holding Company (by subscription or
otherwise) shall be subject to the restriction that such shares shall not be
sold or otherwise disposed of for value for a period of one year following the
date of purchase, except for any disposition of such shares following the death
of the original purchaser or pursuant to any merger or similar transaction
approved by the OTS. The shares of Conversion Stock issued by the Holding
Company to Directors and Officers shall bear the following legend giving
appropriate notice of such one-year restriction:
"The shares of stock evidenced by this Certificate are
restricted as to transfer for a period of one year from the date of
this Certificate pursuant to Part 563b of the Rules and Regulations of
the Office of Thrift Supervision. These shares may not be transferred
during such one-year period without a legal opinion of counsel for the
Company that said transfer is permissible under the provisions of
applicable law and
27
<PAGE> 30
regulation. This restrictive legend shall be deemed null and
void after one year from the date of this Certificate."
In addition, the Holding Company shall give appropriate instructions to
the transfer agent for the Holding Company Common Stock with respect to the
applicable restrictions relating to the transfer of restricted stock. Any shares
issued at a later date as a stock dividend, stock split or otherwise with
respect to any such restricted stock shall be subject to the same holding period
restrictions as may then be applicable to such restricted stock.
The foregoing restriction on transfer shall be in addition to any
restrictions on transfer that may be imposed by federal and state securities
laws.
23. RESTRICTIONS ON ACQUISITION OF STOCK OF THE HOLDING COMPANY.
The certificate of incorporation of the Holding Company shall prohibit
any Person together with Associates or group of Persons acting in concert from
offering to acquire or acquiring, directly or indirectly, beneficial ownership
of more than 10% of any class of equity securities of the Holding Company, or of
securities convertible into more than 10% of any such class, for such period of
time following completion of the Conversion and Reorganization as may be
determined by the Board of Directors of the Holding Company. The certificate of
incorporation of the Holding Company also shall provide that all equity
securities beneficially owned by any Person in excess of 10% of any class of
equity securities shall be considered "excess shares", and that excess shares
shall not be counted as shares entitled to vote and shall not be voted by any
Person or counted as voting shares in connection with any matters submitted to
the shareholders for a vote. The foregoing restrictions shall not apply to (i)
any offer with a view toward public resale made exclusively to the Holding
Company by underwriters or a selling group acting on its behalf, (ii) the
purchase of shares by a Tax-Qualified Employee Stock Benefit Plan established
for the benefit of the employees of the Holding Company and its subsidiaries
which is exempt from approval requirements under 12 C.F.R. ss.574.3(c)(1)(vi) or
any successor thereto, and (iii) any offer or acquisition approved in advance by
the affirmative vote of two-thirds of the entire Board of Directors of the
Holding Company. Directors, Officers or Employees of the Holding Company or the
Association or any subsidiary thereof shall not be deemed to be Associates or a
group acting in concert with respect to their individual acquisitions of any
class of equity securities of the Holding Company solely as a result of their
capacities as such.
24. TAX RULINGS OR OPINIONS.
Consummation of the Conversion and Reorganization is conditioned upon
prior receipt by the Primary Parties of either a ruling or an opinion of counsel
with respect to federal tax laws, and either a ruling or an opinion with respect
to Florida tax laws, to the effect that consummation of the transactions
contemplated hereby will not result in a taxable reorganization under the
provisions of the applicable codes or otherwise result in any adverse tax
consequences to the Primary Parties or to account holders receiving Subscription
Rights before or after the Conversion and Reorganization,
28
<PAGE> 31
except in each case to the extent, if any, that Subscription Rights are deemed
to have fair market value on the date such rights are issued.
25. STOCK COMPENSATION PLANS.
(a) The Holding Company and the Association are authorized to adopt
Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion and
Reorganization, including without limitation an employee stock ownership plan.
(b) The Holding Company and the Association also are authorized to
adopt stock option plans, restricted stock grant plans and other
Non-Tax-Qualified Employee Stock Benefit Plans, provided that no stock options
shall be granted, and no shares of Conversion Stock shall be purchased, pursuant
to any of such plans prior to the earlier of (i) the one-year anniversary of the
consummation of the Conversion and Reorganization or (ii) the receipt of
shareholder approval of such plans at either an annual or special meeting of
shareholders of the Holding Company held no earlier than six months following
the Conversion and Reorganization.
(c) Existing as well as any newly-created Tax-Qualified Employee Stock
Benefit Plans may purchase shares of Conversion Stock in the Offerings, to the
extent permitted by the terms of such benefit plans and this Plan.
(d) The Holding Company and the Association are authorized to enter
into employment or severance agreements with their executive officers.
26. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK.
(a) The Holding Company generally may not repurchase any shares of its
capital stock during the first year following consummation of the Conversion and
Reorganization, except as may be otherwise approved by the OTS. During the
second and third years following consummation of the Conversion and
Reorganization, the Holding Company may not repurchase any of its capital stock
from any person, other than pursuant to (i) an offer to repurchase made by the
Holding Company on a pro rata basis to all of its shareholders and which is
approved by the OTS, (ii) the repurchase of qualifying shares of a director, if
any, (iii) purchases in the open market by a Tax-Qualified or Non-Tax-Qualified
Employee Stock Benefit Plan in an amount reasonable and appropriate to fund the
plan, or (iv) a repurchase program approved by the OTS.
(b) The Association may not declare or pay a cash dividend on, or
repurchase any of, its capital stock if the effect thereof would cause the
regulatory capital of the Association to be reduced below the amount required
for the liquidation account. Any dividend declared or paid on, or repurchase of,
the Association's capital stock also shall be in compliance with Section 563.134
of the Regulations Applicable to All Savings Associations, or any successor
thereto.
29
<PAGE> 32
(c) Notwithstanding anything to the contrary set forth herein, the
Holding Company may repurchase its capital stock to the extent and subject to
the requirements set forth in Section 563b.3(g)(3) of the Regulations Applicable
to All Savings Associations, or any successor thereto, or as otherwise may be
approved by the OTS.
27. PAYMENT OF FEES TO BROKERS.
The Primary Parties may elect to offer to pay fees on a per share basis
to securities brokers who assist purchasers of Conversion Stock in the
Offerings.
28. EFFECTIVE DATE.
The effective date of the Conversion and Reorganization shall be the
date upon which the last of the following actions occurs: (i) the filing of
Articles of Combination with the OTS with respect to the Mid-Tier Holding
Company Merger, (ii) the filing of Articles of Combination with the OTS with
respect to the Mutual Holding Company Merger, (iii) the filing of Articles of
Combination with the OTS with respect to the Association Merger and (iv) the
closing of the issuance of the shares of Conversion Stock in the Offerings. The
filing of Articles of Combination relating to the Mutual Holding Company Merger,
the Mid-Tier Holding Company Merger and the Association Merger and the closing
of the issuance of shares of Conversion Stock in the Offerings shall not occur
until all requisite regulatory, Member and Shareholder approvals have been
obtained, all applicable waiting periods have expired and sufficient
subscriptions and orders for the Conversion Stock have been received. It is
intended that the closing of the Mutual Holding Company Merger, the Mid-Tier
Holding Company Merger, the Association Merger and the sale of shares of
Conversion Stock in the Offerings shall occur consecutively and substantially
simultaneously.
29. AMENDMENT OR TERMINATION OF THE PLAN.
If deemed necessary or desirable by the Boards of Directors of the
Primary Parties, this Plan may be substantively amended, as a result of comments
from regulatory authorities or otherwise, at any time prior to the solicitation
of proxies from Members and Shareholders to vote on the Plan and at any time
thereafter with the concurrence of the OTS. Any amendment to this Plan made
after approval by the Members and Shareholders with the concurrence of the OTS
shall not necessitate further approval by the Members or Shareholders unless
otherwise required by the OTS. This Plan shall terminate if the sale of all
shares of Conversion Stock is not completed within 24 months from the date of
the Special Meeting. Prior to the earlier of the Special Meeting and the
Shareholders' Meeting, this Plan may be terminated by the Boards of Directors of
the Primary Parties without approval of the OTS; after the Special Meeting or
the Shareholders' Meeting, the Boards of Directors may terminate this Plan only
with the approval of the OTS.
30. INTERPRETATION OF THE PLAN.
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of each of the Boards of Directors of the
Primary Parties shall be final, subject to the authority of the OTS.
30
<PAGE> 33
IN WITNESS WHEREOF, the parties have caused this Plan, as amended to be
executed by their duly authorized officers as of this 13th day of August 1998.
COMFED, M. H. C.
Attest: /s/ DEBORAH M. ROUSSEAU By: /s/ JAMES B. PITTARD, JR.
------------------------ -----------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY SAVINGS, F. A.
Attest: /s/ DEBORAH M. ROUSSEAU By: /s/ JAMES B. PITTARD, JR.
------------------------ -----------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY SAVINGS BANKSHARES, INC.
(a federal corporation)
Attest: /s/ DEBORAH M. ROUSSEAU By: /s/ JAMES B. PITTARD, JR.
------------------------ -----------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY SAVINGS BANKSHARES, INC.
(a Delaware corporation)
Attest: /s/ DEBORAH M. ROUSSEAU By: /s/ JAMES B. PITTARD, JR.
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
31
<PAGE> 34
ANNEX A
PLAN OF MERGER
This Plan of Merger, dated as of August 13, 1998, is between Community
Savings Bankshares, Inc. (the "Mid-Tier Holding Company"), a federally chartered
stock corporation, and Community Savings, F. A. (the "Association" or the
"Surviving Association"), a federally chartered savings association.
WITNESSETH:
WHEREAS, the Mid-Tier Holding Company, ComFed, M. H. C. (the "Mutual
Holding Company") and the Association have adopted a Plan of Conversion of the
Mutual Holding Company and Agreement and Plan of Reorganization between
Community Savings Bankshares, Inc. (the "Holding Company"), the Mutual Holding
Company and the Association (the "Plan of Conversion"), pursuant to which (i)
the Mid-Tier Holding Company will convert to a federally chartered interim stock
savings association and simultaneously merge with and into the Association; (ii)
the Mutual Holding Company will convert to a federally chartered interim stock
savings association and simultaneously merge with and into the Association (the
"Mutual Holding Company Merger"), (iii) the Association and a newly-formed
interim savings association will merge, pursuant to which the Association will
become a wholly owned subsidiary of the Holding Company (the "Association
Merger"), and (iv) the Holding Company will offer shares of its common stock in
the manner set forth in the Plan of Conversion;
WHEREAS, the Mutual Holding Company, which owns 51.34% of the
outstanding common stock of the Mid-Tier Holding Company, par value $1.00 per
share ("Mid-Tier Holding Company Common Stock"), will convert to a federally
chartered interim stock savings association pursuant to the Plan of Conversion
and merge with and into the Association pursuant to a Plan of Merger (the
"Mutual Holding Company Merger"), pursuant to which, among other things, all
shares of Mid-Tier Holding Company Common Stock held by the Mutual Holding
Company and all interest of members in the Mutual Holding Company will be
canceled; and
WHEREAS, the Mid-Tier Holding Company owns 100% of the outstanding
common stock of the Association, par value $1.00 per share ("Association Common
Stock");
WHEREAS, the Mid-Tier Holding Company will convert to a federally
chartered interim stock savings association pursuant to the Plan of Conversion
and merge with and into the Association pursuant to this Plan of Merger (the
"Mid-Tier Holding Company Merger"), pursuant to which, among other things, all
shares of Association Common Stock held by the Mid-Tier Holding Company will be
cancelled; and
<PAGE> 35
WHEREAS, the Mid-Tier Holding Company and the Association (the
"Constituent Associations") desire to provide for the terms and conditions of
the Mid-Tier Holding Company Merger.
NOW, THEREFORE, the Mid-Tier Holding Company and the Association hereby
agree as follows:
1. EFFECTIVE DATE. The Mid-Tier Holding Company Merger shall become
effective on the date specified in the endorsement of the Articles of
Combination relating to the Mid-Tier Holding Company Merger by the Secretary of
the Office of Thrift Supervision ("OTS") pursuant to 12 C.F.R. ss.552.13(k), or
any successor thereto (the "Effective Date").
2. THE MID-TIER HOLDING COMPANY MERGER AND EFFECT THEREOF. Subject to
the terms and conditions set forth herein and the prior approval of the OTS of
the Conversion and Reorganization, as defined in the Plan of Conversion, and the
expiration of all applicable waiting periods, the Mid-Tier Holding Company shall
convert from federal stock corporation to a federal interim stock savings
association and simultaneously merge with and into the Association, which shall
be the Surviving Association. Upon consummation of the Mid-Tier Holding Company
Merger, the Surviving Association shall be considered the same business and
corporate entity as each of the Constituent Associations and thereupon and
thereafter all the property, rights, powers and franchises of each of the
Constituent Associations shall vest in the Surviving Association and the
Surviving Association shall be subject to and be deemed to have assumed all of
the debts, liabilities, obligations and duties of each of the Constituent
Associations and shall have succeeded to all of each of their relationships,
fiduciary or otherwise, as fully and to the same extent as if such property,
rights, privileges, powers, franchises, debts, obligations, duties and
relationships had been originally acquired, incurred or entered into by the
Surviving Association. In addition, any reference to either of the Constituent
Associations in any contract, will or document, whether executed or taking
effect before or after the Effective Date, shall be considered a reference to
the Surviving Association if not inconsistent with the other provisions of the
contract, will or document; and any pending action or other judicial proceeding
to which either of the Constituent Associations is a party shall not be deemed
to have abated or to have been discontinued by reason of the Mid-Tier Holding
Company Merger, but may be prosecuted to final judgment, order or decree in the
same manner as if the Mid-Tier Holding Company Merger had not occurred or the
Surviving Association may be substituted as a party to such action or
proceeding, and any judgment, order or decree may be rendered for or against it
that might have been rendered for or against either of the Constituent
Associations if the Mid-Tier Holding Company Merger had not occurred.
3. CANCELLATION OF ASSOCIATION COMMON STOCK HELD BY THE MID-TIER
HOLDING COMPANY AND MEMBER INTERESTS; LIQUIDATION ACCOUNT.
(a) On the Effective Date, (i) each share of Association Common Stock
issued and outstanding immediately prior to the Effective Date and held by the
Mid-Tier Holding Company shall, by virtue of the Mid-Tier Holding Company Merger
and without any action on the part of the
A-2
<PAGE> 36
holder thereof, be canceled, (ii) the interests in the Mutual Holding Company of
any person, firm or entity who or which qualified as a member of the Mutual
Holding Company in accordance with its mutual charter and bylaws and the laws of
the United States prior to the Mutual Holding Company's conversion from mutual
to stock form (the "Members") shall, by virtue of the Mutual Holding Company
Merger which shall occur substantially simultaneously with the Mid-Tier Mutual
Holding Company Merger and without any action on the part of the holder thereof,
be canceled, and (iii) the Association shall establish a liquidation account on
behalf of each depositor member of the Mutual Holding Company, as defined in the
Plan of Conversion, in accordance with Section 17 of the Plan of Conversion.
(b) At or after the Effective Date and prior to the Association Merger,
each certificate or certificates theretofore evidencing issued and outstanding
shares of Mid-Tier Holding Company Common Stock, other than any such certificate
or certificates held by the Mutual Holding Company, which shall be canceled,
shall be deemed to represent issued and outstanding shares of Association Common
Stock which shall be exchanged as provided by the Association Merger.
4. DISSENTING SHARES. No shareholder of the Mid-Tier Holding Company
shall have any dissenter or appraisal rights in connection with the Mid-Tier
Holding Company Merger.
5. NAME OF SURVIVING CORPORATION. The name of the Surviving Association
shall be "Community Savings, F. A."
6. DIRECTORS OF THE SURVIVING ASSOCIATION. Upon and after the Effective
Date, until changed in accordance with the Charter and Bylaws of the Surviving
Association and applicable law, the number of directors of the Surviving
Association shall be seven. The names of those persons who, upon and after the
Effective Date, shall be directors of the Surviving Association are set forth
below. Each such director shall serve for the term which expires at the annual
meeting of shareholders of the Surviving Association in the year set forth after
his respective name, and until a successor is elected and qualified.
<TABLE>
<CAPTION>
Name Term Expires
---- ------------
<S> <C>
James B. Pittard, Jr. 1999
Robert F. Cromwell 1999
Karl D. Griffin 2000
Harold I. Stevenson 2000
Forest C. Beaty, Jr. 2001
Frederick A. Teed 2001
</TABLE>
The address of each such director is c/o Community Savings, F. A., 660
U.S. Highway One, North Palm Beach, Florida 33408.
A-3
<PAGE> 37
7. OFFICERS OF THE SURVIVING ASSOCIATION. Upon and after the Effective
Date, until changed in accordance with the Charter and Bylaws of the Surviving
Association and applicable law, the officers of the Association immediately
prior to the Effective Date shall be the officers of the Surviving Association.
8. OFFICES. Upon the Effective Date, all offices of the Association
shall be offices of the Surviving Association. As of the Effective Date, the
home office of the Surviving Association shall remain at 660 U.S. Highway One,
North Palm Beach, Florida, 33408 and the locations of the other offices of the
Surviving Association shall be as set forth in Exhibit A hereto, except for the
addition of deposit-taking offices authorized or the deletion of deposit-taking
offices closed subsequent to the date hereof and the Effective Date.
9. CHARTER AND BYLAWS. On and after the Effective Date, the Charter
of the Association as in effect immediately prior to the Effective Date shall be
the Charter of the Surviving Association until amended in accordance with the
terms thereof and applicable law, except that the Charter shall be amended to
provide for the establishment of a liquidation account in accordance with
applicable law and regulation.
On and after the Effective Date, the Bylaws of the Association as in
effect immediately prior to the Effective Date shall be the Bylaws of the
Surviving Association until amended in accordance with the terms thereof and
applicable law.
10. SHAREHOLDER AND MEMBER APPROVALS. The affirmative votes of the
holders of Mid-Tier Holding Company Common Stock, set forth in Section 3(e) of
the Plan of Conversion and the Members set forth in Section 3(b) of the Plan of
Conversion shall be required to approve the Plan of Conversion, of which this
Plan of Merger is a part, on behalf of the Mid-Tier Holding Company and the
Mutual Holding Company, respectively. The approval of the Mid-Tier Holding
Company, as the sole holder of the Association Common Stock, shall be required
to approve the Plan of Conversion, of which this Plan of Merger, is a part, on
behalf of the Association.
11. ABANDONMENT OF AGREEMENT. This Plan of Merger may be abandoned by
either the Mid-Tier Holding Company or the Association at any time before the
Effective Date in the manner set forth in Section 29 of the Plan of Conversion.
12. AMENDMENTS. This Plan of Merger may be amended in the manner set
forth in Section 29 of the Plan of Conversion by a subsequent writing signed by
the parties hereto upon the approval of the Board of Directors of each of the
parties hereto.
13. SUCCESSORS. This Agreement shall be binding on the successors of
the Mid-Tier Holding Company and the Association.
A-4
<PAGE> 38
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the United States of America.
IN WITNESS WHEREOF, the Mid-Tier Holding Company and the Association
have caused this Plan of Merger to be executed by their duly authorized officers
as of the day and year first above written.
COMMUNITY SAVINGS BANKSHARES, INC.
(A FEDERAL CORPORATION)
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY SAVINGS, F. A.
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
A-5
<PAGE> 39
ANNEX B
PLAN OF MERGER
This Plan of Merger, dated as of August 13, 1998, is between ComFed, M.
H. C. (the "Mutual Holding Company"), a federally chartered mutual holding
company and Community Savings, F. A. (the "Association" or the "Surviving
Association"), a federally chartered savings association.
WITNESSETH:
WHEREAS, the Mutual Holding Company, Community Savings Bankshares,
Inc., a federal stock corporation (the "Mid-Tier Holding Company"), and the
Association have adopted a Plan of Conversion of the Mutual Holding Company and
Agreement and Plan of Reorganization between Community Savings Bankshares, Inc.
a newly formed Delaware corporation (the "Holding Company") and the Association
(the "Plan of Conversion"), pursuant to which (i) the Mid-Tier Holding Company
will convert to a federally chartered interim stock savings association and
simultaneously merge with and into the Association (the "Mid-Tier Holding
Company Merger"); (ii) the Mutual Holding Company will convert to a federally
chartered interim stock savings association and simultaneously merge with and
into the Association; (iii) the Association and a newly-formed interim savings
association will merge, pursuant to which the Association will become a wholly
owned subsidiary of the Holding Company (the "Association Merger"), and (iv) the
Holding Company will offer shares of its common stock in the manner set forth in
the Plan of Conversion;
WHEREAS, the Mutual Holding Company, which owns 51.34% of the
outstanding common stock of the Mid-Tier Holding Company, par value $1.00 per
share ("Mid-Tier Holding Company Common Stock"), will convert to a federally
chartered interim stock savings association pursuant to the Plan of Conversion
and substantially simultaneously with the completion of the Mid-Tier Holding
Company Merger merge with and into the Association pursuant to this Plan of
Merger (the "Mutual Holding Company Merger"), pursuant to which, among other
things, all interests of members in the Mutual Holding Company and all shares of
Mid-Tier Common Stock held by the Mutual Holding Company will be canceled; and
WHEREAS, the Mutual Holding Company and the Association (the
"Constituent Associations") desire to provide for the terms and conditions of
the Mutual Holding Company Merger.
NOW, THEREFORE, the Mutual Holding Company and the Association hereby
agree as follows:
1. EFFECTIVE DATE. The Mutual Holding Company Merger shall become
effective on the date specified in the endorsement of the Articles of
Combination relating to the Mid-Tier Holding
<PAGE> 40
Company Merger by the Secretary of the Office of Thrift Supervision ("OTS")
pursuant to 12 C.F.R. ss. 552.13(k), or any successor thereto (the "Effective
Date").
2. THE MUTUAL HOLDING COMPANY MERGER AND EFFECT THEREOF. Subject to the
terms and conditions set forth herein and the prior approval of the OTS of the
Conversion and Reorganization, as defined in the Plan of Conversion, and the
expiration of all applicable waiting periods, the Mutual Holding Company shall
convert from the mutual form to a federal interim stock savings association and
simultaneously merge with and into the Association, which shall be the Surviving
Association. Upon consummation of the Mutual Holding Company Merger, the
Surviving Association shall be considered the same business and corporate entity
as each of the Constituent Associations and thereupon and thereafter all the
property, rights, powers and franchises of each of the Constituent Associations
shall vest in the Surviving Association and the Surviving Association shall be
subject to and be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Constituent Associations and shall have
succeeded to all of each of their relationships, fiduciary or otherwise, as
fully and to the same extent as if such property, rights, privileges, powers,
franchises, debts, obligations, duties and relationships had been originally
acquired, incurred or entered into by the Surviving Association. In addition,
any reference to either of the Constituent Associations in any contract, will or
document, whether executed or taking effect before or after the Effective Date,
shall be considered a reference to the Surviving Association if not inconsistent
with the other provisions of the contract, will or document; and any pending
action or other judicial proceeding to which either of the Constituent
Associations is a party shall not be deemed to have abated or to have been
discontinued by reason of the Mutual Holding Company Merger, but may be
prosecuted to final judgment, order or decree in the same manner as if the
Mutual Holding Company Merger had not occurred or the Surviving Association may
be substituted as a party to such action or proceeding, and any judgment, order
or decree may be rendered for or against it that might have been rendered for or
against either of the Constituent Associations if the Mutual Holding Company
Merger had not occurred.
3. CANCELLATION OF MID-TIER HOLDING COMPANY COMMON STOCK HELD BY THE
MUTUAL HOLDING COMPANY AND MEMBER INTERESTS; LIQUIDATION ACCOUNT.
(a) On the Effective Date, (i) each share of Mid-Tier Holding Company
Common Stock issued and outstanding immediately prior to the Effective Date
(which shall be deemed to be Association Common Stock pursuant to the Mid-Tier
Holding Company Merger) and held by the Mutual Holding Company shall, by virtue
of the Mutual Holding Company Merger and without any action on the part of the
holder thereof, be canceled, (ii) the interests in the Mutual Holding Company of
any person, firm or entity who or which qualified as a member of the Mutual
Holding Company in accordance with its mutual charter and bylaws and the laws of
the United States prior to the Mutual Holding Company's conversion from mutual
to stock form (the "Members") shall, by virtue of the Mutual Holding Company
Merger which shall occur substantially simultaneously with the Mid-Tier Mutual
Holding Company Merger, and without any action on the part of the holder
thereof, be canceled, and (iii) the Association shall establish a liquidation
account on behalf of each depositor
B-2
<PAGE> 41
member of the Mutual Holding Company, as defined in the Plan of Conversion, in
accordance with Section 17 of the Plan of Conversion.
(b) At or after the Effective Date and prior to the Association Merger,
each certificate or certificates theretofore evidencing issued and outstanding
shares of Mid-Tier Common Stock, other than any such certificate or certificates
held by the Mutual Holding Company, which shall be canceled, shall be deemed to
represent issued and outstanding shares of Association Common Stock which shall
be exchanged as provided by the Association Merger.
4. DISSENTING SHARES. No member of the Mutual Holding Company shall
have any dissenter or appraisal rights in connection with the Mutual Holding
Company Merger. Holders of Mid-Tier Holding Company Common Stock shall not have
any dissenter or appraisal rights pursuant to 12 C.F.R.ss.552.14.
5. NAME OF SURVIVING CORPORATION. The name of the Surviving Association
shall be "Community Savings, F. A."
6. DIRECTORS OF THE SURVIVING ASSOCIATION. Upon and after the Effective
Date, until changed in accordance with the Charter and Bylaws of the Surviving
Association and applicable law, the number of directors of the Surviving
Association shall be seven. The names of those persons who, upon and after the
Effective Date, shall be directors of the Surviving Association are set forth
below. Each such director shall serve for the term which expires at the annual
meeting of shareholders of the Surviving Association in the year set forth after
his respective name, and until a successor is elected and qualified.
<TABLE>
<CAPTION>
Name Term Expires
---- ------------
<S> <C>
James B. Pittard, Jr. 1999
Robert F. Cromwell 1999
Karl D. Griffin 2000
Harold I. Stevenson 2000
Forest C. Beaty, Jr. 2001
Frederick A. Teed 2001
</TABLE>
The address of each such director is c/o Community Savings, F. A., 660
U.S. Highway One, North Palm Beach, Florida 33408.
7. OFFICERS OF THE SURVIVING ASSOCIATION. Upon and after the Effective
Date, until changed in accordance with the Charter and Bylaws of the Surviving
Association and applicable law, the officers of the Association immediately
prior to the Effective Date shall be the officers of the Surviving Association.
B-3
<PAGE> 42
8. OFFICES. Upon the Effective Date, all offices of the Association
shall be offices of the Surviving Association. As of the Effective Date, the
home office of the Surviving Association shall remain at 660 U.S. Highway One,
North Palm Beach, Florida, 33408 and the locations of the other offices of the
Surviving Association shall be as set forth in Exhibit A hereto, except for the
addition of deposit-taking offices authorized or the deletion of deposit-taking
offices closed subsequent to the date hereof and the Effective Date.
9. CHARTER AND BYLAWS. On and after the Effective Date, the Charter
of the Association as in effect immediately prior to the Effective Date shall be
the Charter of the Surviving Association until amended in accordance with the
terms thereof and applicable law, except that the Charter shall be amended to
provide for the establishment of a liquidation account in accordance with
applicable law and regulation.
On and after the Effective Date, the Bylaws of the Association as in
effect immediately prior to the Effective Date shall be the Bylaws of the
Surviving Association until amended in accordance with the terms thereof and
applicable law.
10. SHAREHOLDER AND MEMBER APPROVALS. The affirmative votes of the
holders of Mid-Tier Holding Company Common Stock, set forth in Section 3(e) of
the Plan of Conversion and the Members set forth in Section 3(b) of the Plan of
Conversion shall be required to approve the Plan of Conversion, of which this
Plan of Merger is a part, on behalf of the Mid-Tier Holding Company and the
Mutual Holding Company, respectively. The approval of the Mid-Tier Holding
Company, as the sole holder of the Association Common Stock, shall be required
to approve the Plan of Conversion, of which this Plan of Merger, is a part, on
behalf of the Association.
11. ABANDONMENT OF AGREEMENT. This Plan of Merger may be abandoned by
either the Mutual Holding Company or the Association at any time before the
Effective Date in the manner set forth in Section 29 of the Plan of Conversion.
12. AMENDMENTS. This Plan of Merger may be amended in the manner set
forth in Section 29 of the Plan of Conversion by a subsequent writing signed by
the parties hereto upon the approval of the Board of Directors of each of the
parties hereto.
13. SUCCESSORS. This Agreement shall be binding on the successors of
the Mutual Holding Company and the Association.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the United States of America.
B-4
<PAGE> 43
IN WITNESS WHEREOF, the Mutual Holding Company and the Association have
caused this Plan of Merger to be executed by their duly authorized officers as
of the day and year first above written.
COMFED, M. H. C.
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY SAVINGS, F. A.
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
B-5
<PAGE> 44
ANNEX C
PLAN OF MERGER
This Plan of Merger, dated as of August 13, 1998, is among Community
Savings, F. A. (the "Association" or the "Surviving Association"), a federally
chartered savings association, Community Savings Bankshares, Inc. (the "Holding
Company"), a Delaware corporation, and Community Interim Savings Association
("Interim"), a federally chartered interim savings association.
WITNESSETH:
WHEREAS, the Association has organized the Holding Company as a
first-tier, wholly-owned subsidiary for the purpose of becoming the stock
holding company of the Association upon completion of the Conversion and
Reorganization, as defined in the Plan of Conversion of ComFed, M. H. C. (the
"Mutual Holding Company") and Agreement and Plan of Reorganization between the
Holding Company, the Mutual Holding Company and the Association (the "Plan of
Conversion");
WHEREAS, the Mutual Holding Company, a federally chartered mutual
holding company which owns 51.34% of the common stock of Community Savings
Bankshares, Inc., a federal stock corporation (the "Mid-Tier Holding Company"),
par value $1.00 per share ("Mid-Tier Holding Company Common Stock"), will
convert to a federally chartered interim stock savings association and
simultaneously merge with and into the Association pursuant to the Plan of
Conversion and the Plan of Merger included as Annex B thereto (the "Mutual
Holding Company Merger"), pursuant to which all shares of Mid-Tier Common Stock
held by the Mutual Holding Company will be cancelled;
WHEREAS, substantially simultaneously with the Mutual Holding Company
Merger, the Mid-Tier Holding Company will convert into a federal interim stock
savings association and merge with and into the Association (the "Mid-Tier
Holding Company Merger") and the shares of Mid-Tier Holding Company Common Stock
held by other than the Mutual Holding Company will be deemed to represent shares
of Association common stock, $1.00 par value per share ("Association Common
Stock");
WHEREAS, the formation of a stock holding company by the Association
will be facilitated by causing the Holding Company to become the sole
shareholder of a newly-formed interim federally chartered stock savings
association and then merging the interim savings association with and into the
Association (the "Association Merger"), pursuant to which the Association will
become a wholly owned subsidiary of the Holding Company and, in connection
therewith, all outstanding shares of Mid-Tier Common Stock will be converted
automatically into and become shares of common stock of the Holding Company, par
value $1.00 per share ("Holding Company Common Stock");
WHEREAS, Interim is being organized by the officers of the Association
as an interim federally chartered stock savings association with the Holding
Company as its sole shareholder in order to effect the Association Merger; and
C-1
<PAGE> 45
WHEREAS, the Association and Interim (the "Constituent Associations")
desire to provide for the terms and conditions of the Association Merger.
NOW, THEREFORE, the Association, the Holding Company and Interim hereby
agree as follows:
1. EFFECTIVE DATE. The Association Merger shall become effective on the
date specified in the endorsement of the Articles of Combination relating to the
Association Merger by the Secretary of the Office of Thrift Supervision ("OTS")
pursuant to 12 C.F.R. ss.552.13(k), or any successor thereto (the "Effective
Date").
2. THE ASSOCIATION MERGER AND EFFECT THEREOF. Subject to the terms and
conditions set forth herein and the prior approval of the OTS of the Conversion
and the Reorganization, as defined in the Plan of Conversion, and the expiration
of all applicable waiting periods, Interim shall merge with and into the
Association, which shall be the Surviving Association. Upon consummation of the
Association Merger, the Surviving Association shall be considered the same
business and corporate entity as each of the Constituent Associations and
thereupon and thereafter all the property, rights, powers and franchises of each
of the Constituent Associations shall vest in the Surviving Association and the
Surviving Association shall be subject to and be deemed to have assumed all of
the debts, liabilities, obligations and duties of each of the Constituent
Associations and shall have succeeded to all of each of their relationships,
fiduciary or otherwise, as fully and to the same extent as if such property,
rights, privileges, powers, franchises, debts, obligations, duties and
relationships had been originally acquired, incurred or entered into by the
Surviving Association. In addition, any reference to either of the Constituent
Associations in any contract, will or document, whether executed or taking
effect before or after the Effective Date, shall be considered a reference to
the Surviving Association if not inconsistent with the other provisions of the
contract, will or document; and any pending action or other judicial proceeding
to which either of the Constituent Associations is a party shall not be deemed
to have abated or to have been discontinued by reason of the Association Merger,
but may be prosecuted to final judgment, order or decree in the same manner as
if the Association Merger had not occurred or the Surviving Association may be
substituted as a party to such action or proceeding, and any judgment, order or
decree may be rendered for or against it that might have been rendered for or
against either of the Constituent Associations if the Association Merger had not
occurred.
3. CONVERSION OF STOCK.
(a) On the Effective Date, (i) each share of Mid-Tier Common Stock
issued and outstanding immediately prior to the Effective Date shall, by virtue
of the Association Merger and without any action on the part of the holder
thereof, be converted into the right to receive Holding Company Common Stock
based on the Exchange Ratio, as defined in the Plan of Conversion, plus the
right to receive cash in lieu of any fractional share interest, as determined in
accordance with Section 3(c) hereof, (ii) each share of common stock, par value
$1.00 per share, of Interim ("Interim Common Stock") issued and outstanding
immediately prior to the Effective Date shall, by virtue of the Association
Merger and without any action on the part of the holder thereof, be converted
into one share of Association Common Stock, and (iii) each share of Holding
Company Common Stock
C-2
<PAGE> 46
issued and outstanding immediately prior to the Effective Date shall, by virtue
of the Association Merger and without any action on the part of the holder
thereof, be cancelled. By voting in favor of this Plan of Merger, the Holding
Company, as the sole shareholder of Interim, shall have agreed (i) to issue
shares of Holding Company Common Stock in accordance with the terms hereof and
(ii) to cancel all previously issued and outstanding shares of Holding Company
Common Stock upon the effectiveness of the Association Merger.
(b) On and after the Effective Date, there shall be no registrations of
transfers on the stock transfer books of Interim, the Mid-Tier Holding Company
or the Association of shares of Interim Common Stock, Mid-Tier Holding Company
Common Stock or Association Common Stock which were outstanding immediately
prior to the Effective Date.
(c) Notwithstanding any other provision hereof, no fractional shares of
Holding Company Common Stock shall be issued to holders of Mid-Tier Holding
Company Common Stock. In lieu thereof, each holder of shares of Mid-Tier Holding
Company Common Stock entitled to a fraction of a share of Holding Company Common
Stock shall, at the time of surrender of the certificate or certificates
representing such holder's shares, receive an amount of cash equal to the
product arrived at by multiplying such fraction of a share of Holding Company
Common Stock by the Actual Purchase Price, as defined in the Plan of Conversion.
No such holder shall be entitled to dividends, voting rights or any other rights
in respect of any fractional share.
4. EXCHANGE OF SHARES.
(a) At or after the Effective Date, each holder of a certificate or
certificates theretofore evidencing issued and outstanding shares of Mid-Tier
Common Stock, upon surrender of the same to an agent, duly appointed by the
Holding Company ("Exchange Agent"), shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of full shares of
Holding Company Common Stock for which the shares of Mid-Tier Holding Company
Common Stock theretofore represented by the certificate or certificates so
surrendered shall have been converted as provided in Section 3(a) hereof. The
Exchange Agent shall mail to each holder of record of an outstanding certificate
which immediately prior to the Effective Date evidenced shares of Mid-Tier
Holding Company Common Stock, and which is to be exchanged for Holding Company
Common Stock as provided in Section 3(a) hereof, a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to such certificate shall pass, only upon delivery of such certificate to the
Exchange Agent) advising such holder of the terms of the exchange effected by
the Association Merger and of the procedure for surrendering to the Exchange
Agent such certificate in exchange for a certificate or certificates evidencing
Holding Company Common Stock.
(b) No holder of a certificate theretofore representing shares of
Mid-Tier Holding Company Common Stock shall be entitled to receive any dividends
in respect of the Holding Company Common Stock into which such shares shall have
been converted by virtue of the Association Merger until the certificate
representing such shares of Mid-Tier Holding Company Common Stock is surrendered
in exchange for certificates representing shares of Holding Company Common
Stock. In the event that dividends are declared and paid by the Holding Company
in respect of Holding Company Common Stock after the Effective Date but prior to
surrender of
C-3
<PAGE> 47
certificates representing shares of Mid-Tier Holding Company Common Stock,
dividends payable in respect of shares of Holding Company Common Stock not then
issued shall accrue (without interest). Any such dividends shall be paid
(without interest) upon surrender of the certificates representing such shares
of Mid-Tier Holding Company Common Stock. The Holding Company shall be entitled,
after the Effective Date, to treat certificates representing shares of Mid-Tier
Holding Company Common Stock as evidencing ownership of the number of full
shares of Holding Company Common Stock into which the shares of Mid-Tier Holding
Company Common Stock represented by such certificates shall have been converted,
notwithstanding the failure on the part of the holder thereof to surrender such
certificates.
(c) The Holding Company shall not be obligated to deliver a certificate
or certificates representing shares of Holding Company Common Stock to which a
holder of Mid-Tier Holding Company Common Stock would otherwise be entitled as a
result of the Association Merger until such holder surrenders the certificate or
certificates representing the shares of Mid-Tier Holding Company Common Stock
for exchange as provided in this Section 4, or, in default thereof, an
appropriate Affidavit of Loss and Indemnity Agreement and/or a bond as may be
required in each case by the Holding Company. If any certificate evidencing
shares of Holding Company Common Stock is to be issued in a name other than that
in which the certificate evidencing Mid-Tier Holding Company Common Stock
surrendered in exchange therefor is registered, it shall be a condition of the
issuance thereof that the certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the person requesting such
exchange pay to the Exchange Agent any transfer or other tax required by reason
of the issuance of a certificate for shares of Holding Company Common Stock in
any name other than that of the registered holder of the certificate surrendered
or otherwise establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable.
(d) If, between the date hereof and the Effective Date, the shares of
Mid-Tier Holding Company Common Stock shall be changed into a different number
or class of shares by reason of any reclassification, recapitalization,
split-up, combination, exchange of shares or readjustment, or a stock dividend
thereon shall be declared with a record date within said period, the Exchange
Ratio specified in Section 3(a) hereof shall be adjusted accordingly.
5. DISSENTING SHARES. No holders of shares of Mid-Tier Holding Company
Common Stock shall have dissenter and appraisal rights in connection with the
Association Merger pursuant to 12 C.F.R. ss.552.14.
6. NAME OF SURVIVING ASSOCIATION. The name of the Surviving Mid-Tier
Holding Company shall be "Community Savings, F. A."
7. DIRECTORS OF THE SURVIVING ASSOCIATION. Upon and after the Effective
Date, until changed in accordance with the Charter and Bylaws of the Surviving
Association and applicable law, the number of directors of the Surviving
Association shall be seven. The names of those persons who, upon and after the
Effective Date, shall be directors of the Surviving Association are set forth
below. Each such director shall serve for the term which expires at the annual
meeting of
C-4
<PAGE> 48
shareholders of the Surviving Association in the year set forth after his
respective name, and until a successor is elected and qualified.
<TABLE>
<CAPTION>
Name Term Expires
---- ------------
<S> <C>
James B. Pittard, Jr. 1999
Robert F. Cromwell 1999
Karl D. Griffin 2000
Harold I. Stevenson 2000
Forest C. Beaty, Jr. 2001
Frederick A. Teed 2001
</TABLE>
The address of each such director is c/o Community Savings, F. A., 660
U.S. Highway One, North Palm Beach, Florida 33408.
8. OFFICERS OF THE SURVIVING ASSOCIATION. Upon and after the Effective
Date, until changed in accordance with the Charter and Bylaws of the Surviving
Association and applicable law, the officers of the Association immediately
prior to the Effective Date shall be the officers of the Surviving Association.
9. OFFICES. Upon the Effective Date, all offices of the Association
shall be offices of the Surviving Association. As of the Effective Date, the
home office of the Surviving Association shall remain at 660 U.S. Highway One,
North Palm Beach, Florida 33408 and the locations of the other offices of the
Surviving Association shall be as set forth in Exhibit A hereto, except for the
addition of deposit-taking offices authorized or the deletion of deposit-taking
offices closed subsequent to the date hereof and the Effective Date.
10. CHARTER AND BYLAWS. On and after the Effective Date, the Charter
and Bylaws of the Association as in effect immediately prior to the Effective
Date shall be the Charter and Bylaws of the Surviving Association until amended
in accordance with the terms thereof and applicable law.
11. SAVINGS ACCOUNTS. Upon the Effective Date, any savings accounts of
Interim, without reissue, shall be and become savings accounts of the Surviving
Association without change in their respective terms, including, without
limitation, maturity, minimum required balances or withdrawal value.
12. STOCK COMPENSATION PLANS. By voting in favor of this Agreement, the
Holding Company shall have approved adoption of the Mid-Tier Holding Company's
existing 1995 Recognition and Retention Plan for Employees and Outside Directors
and the 1995 Stock Option Plan (collectively the "Plans") as plans of the
Holding Company and shall have agreed to issue Holding Company Common Stock in
lieu of Mid-Tier Holding Company Common Stock pursuant to the terms of such
Plans. As of the Effective Date, rights outstanding under the Plans shall be
assumed by the Holding Company and thereafter shall be rights only for shares of
Holding Company Common Stock, with each such right being for a number of shares
of Holding Company Common Stock equal to the number of shares of Association
Common Stock that were available thereunder
C-5
<PAGE> 49
immediately prior to the Effective Date times the Exchange Ratio, as defined in
the Plan of Conversion, and the price of each such right shall be adjusted to
reflect the Exchange Ratio and so that the aggregate purchase price of the right
is unaffected, but with no change in any other term or condition of such right.
The Holding Company shall make appropriate amendments to the Plans to reflect
the adoption of the Plans by the Holding Company without adverse effect upon the
rights outstanding thereunder, including changing references to the Mid-Tier
Holding Company (or the Association) in the Plans to the Holding Company where
appropriate.
13. SHAREHOLDER APPROVAL. The affirmative votes of the holders of
Mid-Tier Holding Company Common Stock set forth in Section 3 of the Plan of
Conversion shall be required to approve the Plan of Conversion, of which this
Plan of Merger is a part, on behalf of the Mid-Tier Holding Company. The
approval of the Holding Company, as the sole holder of the Interim Common Stock,
shall be required to approve the Plan of Conversion, of which this Plan of
Merger is a part, on behalf of Interim. The approval of the Mid-Tier Holding
Company, as the sole holder of the Association Common Stock, shall be required
to approve the Plan of Conversion, of which this Plan of Merger is a part, on
behalf of the Association.
14. REGISTRATION; OTHER APPROVALS. In addition to the approvals set
forth in Sections 1 and 13 hereof and the Plan of Conversion, the parties'
obligations to consummate the Association Merger shall be subject to the Holding
Company Common Stock to be issued hereunder in exchange for Mid-Tier Holding
Company Common Stock being registered under the Securities Act of 1933, as
amended, and registered or qualified under applicable state securities laws, as
well as the receipt of all other approvals, consents or waivers as the parties
may deem necessary or advisable.
15. ABANDONMENT OF AGREEMENT. This Plan of Merger may be abandoned by
either the Association or Interim at any time before the Effective Date in the
manner set forth in Section 29 of the Plan of Conversion.
16. AMENDMENTS. This Plan of Merger may be amended in the manner set
forth in Section 29 of the Plan of Conversion by a subsequent writing signed by
the parties hereto upon the approval of the Board of Directors of each of the
parties hereto.
17. SUCCESSORS. This Agreement shall be binding on the successors of
the Association and Interim.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the United States of America.
C-6
<PAGE> 50
IN WITNESS WHEREOF, the Association, the Holding Company and Interim
have caused this Plan of Merger to be executed by their duly authorized officers
as of the day and year first above written.
COMMUNITY SAVINGS, F. A.
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY SAVINGS BANKSHARES, INC.
(a Delaware Corporation)
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
COMMUNITY INTERIM SAVINGS
ASSOCIATION (In Organization)
Attest:
By:
- ------------------- -------------------------------------
Deborah M. Rousseau James B. Pittard, Jr.
Secretary President and Chief Executive Officer
C-7
<PAGE> 1
EXHIBIT 5.0
LAW OFFICES
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
TIMOTHY B. MATZ 12TH FLOOR JEFFREY D. HAAS
STEPHEN M. EGE 734 15TH STREET, N.W. KEVIN M. HOULIHAN
RAYMOND A. TIERNAN WASHINGTON, D.C. 20005 KENNETH B. TABACH
W. MICHAEL HERRICK _______ PATRICIA J. WOHL
GERARD L. HAWKINS JEFFREY R. HOULE
NORMAN B. ANTIN TELEPHONE: (202) 347-0300 FIORELLO J. VICENCIO*
JOHN P. SOUKENIK* FACSIMILE: (202) 347-2172 CRISTIN ZEISLER
GERALD F. HEUPEL, JR. WWW.EMTH.COM ANDREW ROSENSTEIN
JEFFREY A. KOEPPEL _____________________
DANIEL P. WEITZEL ALLIN P. BAXTER
PHILIP ROSS BEVAN JACK I. ELIAS
HUGH T. WILKINSON SHERYL JONES ALU
*NOT ADMITTED IN D.C.
October 13, 1998
VIA EDGAR
Board of Directors
Community Savings Bankshares, Inc.
660 U.S. Highway One
North Palm Beach, Florida 33408
Gentlemen:
We have acted as special counsel to Community Savings Bankshares, Inc.,
a Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, of the Registration Statement on Form S-1 (the
"Registration Statement"), relating to the issuance of up to 12,707,500 shares
(which may be increased to up to 14,613,625 shares under certain circumstances
described below) of the Company's common stock, par value $1.00 per share (the
"Common Stock"), in connection with the consummation of the following
transactions: (1) Community Savings Bankshares, Inc. a federally chartered
corporation (the "Mid-Tier Holding Company"), which currently holds 100% of the
common stock of Community Savings, F. A. (the "Association"), will convert to a
federal interim stock savings association and simultaneously merge into the
Association, with the Association being the surviving entity; (2) ComFed, M. H.
C. (the "MHC"), which currently holds 51.34% of the outstanding shares of common
stock of the Mid-Tier Holding Company, will convert from mutual form to a
federal interim stock savings association and simultaneously merge into the
Association, with the Association being the surviving entity; (3) the
Association will then merge with an interim institution to be formed as a wholly
owned subsidiary of the Company, with the Association being the surviving
entity; (4) the outstanding shares of Mid-Tier Holding Company common stock
(other than those held by the MHC, which will be cancelled) will be converted
into shares of the Company's common stock, $1.00 par value per share ("Company
Common Stock") pursuant to a ratio that will result in the holders of such
shares owning in the aggregate approximately the same percentage of the Company
as they currently own of the Mid-Tier
<PAGE> 2
Holding Company (as adjusted for excess waived dividends), before giving effect
to such shareholders purchasing additional shares in a concurrent stock offering
conducted by the Company or receiving cash in lieu of fractional shares; and (5)
the offer and sale of shares of the Company's common stock (such steps
collectively referred to as the "Conversion"). In this regard, we have examined
the Certificate of Incorporation and Bylaws of the Company, resolutions of the
Boards of Directors of the Company, the MHC, the Mid-Tier Holding Company and
the Association, the Plan of Conversion and Agreement and Plan of
Reorganization, as amended (the "Agreement"), and such other documents and
matters of law as we deemed appropriate for the purposes of this opinion.
Based upon the foregoing, we are of the opinion as of the date hereof
that the Common Stock has been duly and validly authorized, and when issued in
accordance with the terms of the Agreement, and upon the receipt of the
consideration required thereby, will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Company's Registration Statement and to the references to this firm under the
headings "The Conversion - Tax Aspects" and "Legal Matters" in the Prospectus
contained in the Registration Statement.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Philip Ross Bevan
---------------------------------
Philip Ross Bevan, a Partner
<PAGE> 1
EXHIBIT 8.1
October 15, 1998
Board of Directors
ComFed, M. H. C.
Community Savings Bankshares, Inc. (Federal)
Community Savings Bankshares, Inc. (Delaware)
Community Savings, F. A.
660 U. S. Highway One
North Palm Beach, Florida 33408
Gentlemen:
You have asked that we provide you our opinion in regard to certain
federal income tax matters relating to the Plan of Conversion, as amended, of
ComFed, M. H .C. and the Agreement and Plan of Reorganization (the "Plan")
between ComFed, M. H. C., Community Savings Bankshares, Inc. (a federal
corporation), Community Savings Bankshares, Inc. (a Delaware corporation) and
Community Savings, F. A. dated as of July 28, 1998, as amended as of August 13,
1998 and October 14, 1998.
We have examined the Plan and certain other documents as we deemed
necessary in order to provide our opinions. Unless otherwise defined, all
terms used in this letter have the meanings given to them in the Plan.
In our examination, we assumed that original documents were authentic,
copies were accurate and signatures were genuine. We have further assumed the
absence of adverse facts not apparent from the face of the instruments and
documents we examined. In rendering our opinion, we have relied upon certain
written representations of Community Savings, F.A. (the "Association") and
ComFed, M. H. C. (the "Mutual Holding Company") (collectively referred to
herein as the "Representations") which are attached hereto.
We assumed that the Plan has been duly and validly authorized and approved
and adopted and that all parties will comply with the terms and conditions of
the Plan, and that the various representations and warranties which have been
provided to use are accurate, complete, true and
<PAGE> 2
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 2
correct. Accordingly, we express no opinion concerning the effect, if any, of
variations from the foregoing. We specifically express no opinion concerning
tax matters relating to the Plan under state and local tax laws.
In issuing the opinions set forth below, we have referred solely to
existing provisions of (1) the Internal Revenue Code of 1986, as amended
("Code"), and existing and proposed Treasury Regulations thereunder; and (2)
current administrative rulings, notices and procedures and court decisions.
Such laws, regulations, administrative rulings, notices and procedures and
court decisions are subject to change at any time. Any such change could
affect the continuing validity of the opinions set forth below. This opinion
is as of the date hereof, and we disclaim any obligation to advise you of any
change after the date hereof.
There can be no assurance that our opinions would be adopted by the
Internal Revenue Service (the "Service") or a court. The outcome of litigation
cannot be predicted. We have, however, attempted in good faith to opine as to
the merits of each tax issue with respect to which an opinion was requested.
STATEMENT OF FACTS
On October 24, 1994, Community Savings, F. A. a federally chartered mutual
savings association, was reorganized into the mutual holding company form of
organization and consummated a sale of stock to its members. To accomplish
this transaction, the Association organized a federally chartered, stock
savings association as a wholly owned subsidiary. The mutual Association then
transferred substantially all of its assets and liabilities to the stock
Association in exchange for 2,620,144 shares of Association common stock, $1.00
par value per share ("Association Common Stock"), and reorganized itself into a
federally chartered mutual holding company known as ComFed, M. H. C. and sold
2,379,856 shares of Association Common Stock to directors, employees and
members of the Association. On September 30, 1997, the Association completed a
reorganization in which the Association became a wholly owned subsidiary of a
federally chartered stock middle tier holding company known as "Community
Savings Bankshares, Inc." ("Mid-Tier Holding Company") pursuant to an Agreement
and Plan of Reorganization dated as of March 27, 1997. Shareholders of the
Association (including the Mutual Holding Company) became, as a result of the
reorganization, shareholders of the Mid-Tier Holding Company. As of August 13,
1998, the Mutual Holding Company and the Public Shareholders owned an aggregate
of 51.34% and 48.66% respectively, of the outstanding Mid-Tier Holding Company
common stock, $1.00 par value per share ("Mid-Tier Holding Company Common
Stock").
<PAGE> 3
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 3
The Boards of Directors of the Mutual Holding Company and the Mid-Tier
Holding Company believe that a conversion of the Mutual Holding Company to
stock form pursuant to the Plan is the best interest of the Mutual Holding
Company and the Association, as well as the best interests of the Mutual
Holding Company, the Mid-Tier Holding Company and the Association, as well as
their respective Members and Public Shareholders. The Boards of Directors
determined that this Plan equitably provides for the interests of Members of
the Mutual Holding Company through the granting of subscription rights and the
establishment of a liquidation account. The Conversion will result in the
raising of additional capital and is designed to enable the Association to
compete more effectively in a market which is undergoing consolidation. In
addition, the Boards of Directors believe that the Conversion is important to
the future growth and performance of the holding company structure by enhancing
their future access to capital markets, ability to diversify into other
financial services related activities and the ability to provide services to
the public.
For valid business reasons, the present corporate structure of the Mutual
Holding Company and the Association will be changed pursuant to the following
proposed transactions:
(i) Mid-Tier Holding Company will convert from a federally chartered stock
holding company into an interim federal stock savings association ("Interim
Holding") and the Mutual Holding Company will convert from a mutual form to a
federal interim stock savings association ("Interim MHC").
(ii) Interim Holding will merge into Association with the Association being
the surviving corporation ("Merger 1").
(iii) Immediately after Merger 1, Interim MHC will merge with and into the
Association, with the Association being the surviving corporation ("Merger 2").
The Association stock which was previously held by the Mutual Holding Company
will be extinguished. Eligible members of the Mutual Holding Company as of
certain specified dates set forth in the Plan will be granted interests in a
liquidation account to be established by the Association (referred to herein as
"Association Liquidation Account").
The initial balance of the Association Liquidation Account will be equal
to the amount of dividends from Association Common Stock waived by Mutual
Holding Company plus the greater of: (i) 100% of the retained earnings of the
Association as of March 31, 1994, or (ii) 51.34% of the Mid-Tier Holding
Company's total shareholders' equity as reflected in its latest statement of
financial condition contained in the final Prospectus to be utilized in the
Mutual Holding Company's mutual-to-stock Conversion.
<PAGE> 4
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 4
(iv) The Association will form a Delaware corporation as a new, wholly
owned, first tier subsidiary (the "Holding Company"), which will become a new
holding company.
(v) The Holding Company will form an interim corporation ("Interim") as a
new, wholly owned first tier subsidiary that is a federally chartered interim
stock savings association.
(vi) Immediately following Merger 2, Interim will merge with and into the
Association, with the Association being the surviving entity ("Merger 3").
Merger 1, Merger 2 and Merger 3 will be completed in accordance with applicable
federal laws. As a result of Merger 3, the Association Common Stock deemed held
by the Public Shareholders will be converted into the Holding Company Common
Stock, $1.00 par value per share ("Holding Company Common Stock") based upon an
exchange ratio which ensures that the Public Shareholders will own, in the
aggregate, approximately the same percentage of the Holding Company Common Stock
outstanding upon completion of the Conversion and Reorganization (as adjusted to
reflect excess dividends previously waived by the Mutual Holding Company) as the
percentage of Mid-Tier Holding Company Common Stock owned by them in the
aggregate immediately prior to the consummation of the Conversion and
Reorganization, before giving effect to: (a) cash paid in lieu of fractional
shares, and (b) any shares of the Holding Company Common Stock purchased by
Public Shareholders in the Conversion; in addition, the shares of Interim will
be converted into shares of Association stock.
(vii) Simultaneously with the consummation of Merger 3, the Holding Company
will sell additional shares of the Holding Company Common Stock, with priority
subscription rights granted to certain members of the Mutual Holding Company at
specified dates and to tax qualified employee benefit plans, directors and
employees of the Association.
ANALYSIS AND OPINION
Section 354 of the Code provides that no gain or loss shall be recognized
by shareholders who exchange common stock in a corporation, which is a party to
a reorganization, solely for common stock in another corporation which is a
party to the reorganization. Section 356 of the Code provides that shareholders
shall recognize gain to the extent they receive money as part of a
reorganization, such as money received in lieu of fractional shares. Section 358
of the Code provides that, with certain adjustments for money received in a
reorganization shall equal the basis of the common stock which he or she
surrendered in the transaction. Section 1223 (i) states that, where a
shareholder receives property in an exchange which as the same basis as the
property surrendered, he or she shall be deemed to have held the property
received for the same period as the property exchanged, provided that the
property exchanged had been held as a capital asset.
<PAGE> 5
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 5
Section 361 of the Code provides that no gain or loss shall be recognized
to a corporation which is a party to a reorganization on any transfer of
property pursuant to a plan of reorganization. Section 362 of the Code provides
that if property is acquired by a corporation in connection with a
reorganization, then the basis of such property shall be same as it would be in
the hands of the transferor immediately prior to the transfer. Section 1228(2)
of the Code states that where a corporation will have a carryover basis in
property received from another corporation which is a party to a reorganization,
the holding period of such assets in the hands of the acquiring corporation
shall include the period for which such assets were held by the transferor,
provided that the property transferred had been held as a capital asset. Section
1032 of the Code states that no gain or loss shall be recognized to a
corporation on the receipt of property in exchange for common stock.
Section 368(a)(1)(F) of the Code provides that a mere change in identity,
form, or place or organization, however effected, is a reorganization. When the
Mutual Holding Company converts itself from a federal mutual holding company to
a federal interim stock savings association, the changes at the corporate level
will be insubstantial. Similarly, when the Mid-Tier Holding Company adopts a
federal charter and converts itself to a federal stock savings association, the
changes at the corporate level will be insubstantial. In addition, Rev. Rul.
80-105 provides that the conversion of a federal mutual savings and loan
association to a state or federal stock savings and loan association, and the
conversion of a state-charted mutual savings and loan association to a stock
savings and loan association in the same state are reorganizations under Code
Section 368(a)(1)(F). Therefore, the change in the form of operation of the
Mutual Holding Company and the Mid-Tier Holding Company should constitute
reorganizations within the meaning of Section 368(a)(1)(F) of the Code.
Section 368(a)(1)(A) of the Code defines the term "reorganization" to
include a "statutory merger or consolidation" of corporations. Section
368(a)(2)(E) of the Code provides that a transaction otherwise qualifying as a
merger under Section 368(a)(1)(A), shall not be disqualified by reason of the
fact that common stock of a corporation which before the merger was in control
of the merged corporation, is used in the transaction if (i) after the
transaction, the corporation surviving the merger holds substantially all of its
properties and the properties of the merged corporation; and (ii) former
shareholders of the surviving corporation exchanged, for an amount of voting
common stock of the controlling corporation, an amount of common stock in the
surviving corporation which constitutes control of such corporation.
In order to qualify as a reorganization under Section 368(a)(1)(A), a
transaction must constitute a merger or consolidation effected pursuant to the
corporation laws of the United States or a state. Merger 1, Merger 2 and Merger
3 will be consummated in accordance with applicable federal laws.
<PAGE> 6
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 6
In addition, a transaction qualifying as a reorganization under Section
368(a)(1)(A) of the Code must satisfy the "continuity of interest doctrine"
which requires that the continuing common stock interest of the former owners of
an acquired corporation, considered in the aggregate, represents a "substantial
part" of the value of their former interest and provides them with a "definite
and substantial interest" in the affairs of the acquiring corporation or a
corporation in control of the acquiring corporation. Helvering v. Minnesota Tea
Co., 296 U.S., 378 (1935) Southwest Natural Gas Co. v. Comm'r., 189 F.2d 332
(5th Cir. 1951). cert. denied 342 U.S. 860 (1951).
As a result of Merger 1, the shareholders of the Mid-Tier Holding Company
receive an interest in the Association which will subsequently be converted into
an interest in the Holding Company. Consequently, the continuity of interest
doctrine should be satisfied with regard to Merger 1.
With regard to Merger 2, the Mutual Holding Company, as a federally
chartered mutual holding company, does not have shareholders and has no
authority to issue capital stock. Instead, the Mutual Holding Company has
Members who are accorded a variety of proprietary rights such as voting rights
and certain rights in the unlikely event of liquidation. Prior to Merger 2,
certain depositors in the Association have both a deposit account in the
institution and a pro rata inchoate proprietary interest in the net worth of the
Mutual Holding Company based upon the balance in his or her deposit account in
the Association, interest which may only be realized in the event of a
liquidation of the Mutual Holding Company. However, this inchoate proprietary
interest is tied to the depositor's account and has no tangible market value
separate from such deposit account. A depositor who reduces or closes his or her
deposit account receives a portion or all of the balance in the account but
nothing for his or her ownership interest in the net worth of the Mutual Holding
Company, which is lost to the extent that the balance in the account is reduced.
In accordance with the Plan, the Members will receive interests in the
Association Liquidation Account at the Association and continue their inchoate
proprietary interests in the Association following Merger 2. Although the
Association Liquidation Account at the Association would not allow the Members
the right to vote or the right to pro rata distributions of earnings, they would
be entitled to share in the distribution of assets upon the liquidation of the
Association following Merger 2. The Members' liquidation interests in the
Association are substantially similar to their current ownership interest in the
Mutual Holding Company (a liquidation interest) in the Mutual Holding Company.
Because the Members are not in effect "cashing out" their inchoate proprietary
interest in the Mutual Holding Company, they would continue to maintain an
inchoate proprietary interest in the Association upon the consummation of Merger
2. Such payments to be received as interest in the liquidation account at the
Association are not guaranteed and can only be received by Members who continue
to maintain deposit accounts in the Association following
<PAGE> 7
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 7
Merger 2. Therefore, it would seem that the exchange of the Members' equity
interests in the Mutual Holding Company for liquidation account interests should
not violate the continuity of interest requirement of Section 1.368-1(b) of the
Treasury Regulations. In addition, in PLR 9510044, the Service held on facts
which are identical to those of Merger 2, as described above, that the
continuity of interest doctrine was satisfied. Although a private letter ruling
cannot be cited as precedent, it is illustrative of the Service's position on an
issue.
As a result of Merger 3, the Shareholders of the Association will receive a
continuing interest in the Holding Company, the sole shareholder of the
Association. Consequently, the continuity of interest doctrine should be
satisfied with regard to Merger 3.
One of the requirements of Section 368(a)(2)(E) of the Code is that
subsequent to the transaction, the corporation surviving the merger must hold
substantially all of its properties and the properties of the merged
corporation. The Association has represented in the Representations that,
following Merger 3, it will hold at least 90% of the fair market value of its
net assets and at least 70% of the fair market value of its gross assets, and at
least 90% of the fair market value of Interim's gross assets held immediately
prior to Merger 3. Based upon the representations, the Association will clearly
satisfy this requirement of Code Section 368(a)(2)(E).
Pursuant to Code Section 368(a)(2)(E), the Holding Company must also
acquire control of the Association in Merger 3. Control is defined as at least
80% of the total combined voting power of all classes of stock entitled to vote,
and at least 80% if the total number of shares. Subsequent to Merger 3, the
Holding Company will hold all of the Association stock. However, there is an
issue as to whether the liquidation account at the Association must be taken
into account for the purposes of the "control" test. If the liquidation account
at the Association is to be included in determining whether the Holding Company
acquired control of the Association in Merger 3, it would be necessary to
recognize such interest as another class of Association stock. Although the
liquidation account may be compared to the equity interests held by members of
the Mutual Holding Company, which afforded members an equity/ownership interest
in the Mutual Holding Company, these interests in the Association are too remote
to qualify as a separate class of Association stock. Therefore, the liquidation
account should be disregarded in determining whether the Holding Company
acquires control of the Association in Merger 3. The Service's analysis in PLR
9510044 supports this conclusion. PLR 9510044 involved the conversion of a
mutual holding company from mutual stock form and a subsequent merger of the
mutual holding company into a stock savings bank with the savings bank
surviving. The stock of the savings bank held by the mutual holding company was
extinguished and members of the mutual holding company were granted interests in
a liquidation account established at the savings bank. Subsequent thereto, the
savings bank engaged in a typical reorganization under Section 368(a)(2)(E) of
the Code to create a holding company
<PAGE> 8
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 8
structure identical to the structure of the Association subsequent to Merger 3.
The Service held that the liquidation interests in the savings bank (as well as
stock previously held by the mutual holding company in the savings bank) were to
be disregarded in determining whether control of the savings bank was obtained
by the holding company in accordance with Section 358(c) of the Code.
In addition to the requirements discussed above, there is a judicially
created substance over form concept often referred to as the "step transaction
doctrine" which applies throughout tax law, including the corporate
reorganization area. The step transaction doctrine is an extremely amorphous
concept. Often, application of the doctrine hinges on whether a court finds that
a particular series of transactions runs counter to a significant tax policy.
Notwithstanding years of litigation and hundreds of cases, the exact contours of
the step transaction doctrine, and even its proper formulation, are still the
subject of intense debate. Consequently, it often will be difficult to determine
with a high degree of certainty whether a series of related transactions will be
stepped together in some fashion for tax purposes.
The courts over the years have developed three distinct verbal formulations
of the doctrine; (i) the binding commitment test, (ii) the end result test and
(iii) the interdependence test. While the courts nominally apply one or more of
these three tests, a careful reading of the relevant cases indicates that the
courts, as a preliminary matter, in deciding whether to apply the step
transaction doctrine, tend to focus primarily on two key facts: intent and
temporal proximity. However, case law and the Service's pronouncements indicate
that there are limitations on the ability to assert the step transaction
doctrine, regardless of (i) the taxpayer's intent at the time of the first
transaction to engage in the later transactions, and (ii) the short period of
time that elapses between the transactions.
Case law and the Service's pronouncements indicate that if two or more
transactions carried out pursuant to an overall plan have economic significance
independent of each other, the transactions generally will not be stepped
together. The Service's most significant pronouncement regarding independent
economic significance is Rev. Rul. 79-250. In the ruling, the Service asserted
that:
the substance of each of a series of steps will be recognized and
the step transaction doctrine will not apply, if each such step
demonstrates independent economic significance, is not subject to
attack as a sham, and was undertaken for valid business purposes
and not mere avoidance of taxes.
<PAGE> 9
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 9
The parties to Merger 2 maintain a separate and distinct business purpose
for consummating Merger 2 (e.g., allowing for the conversion of the Mutual
Holding Company from mutual to stock form). Immediately after the consummation
of Merger 2, the Association will no longer be controlled by the Mutual Holding
Company but will instead be controlled by its Public Shareholders. The facts
indicate that the merger of Mutual Holding Company with and into the Association
will result in a real and substantial change in the form ownership of the
Association that is sufficient to conclude that Merger 2 comports with the
underlying purposes and assumptions of a reorganization under Section
368(a)(1)(A) of the Code.
In addition, we believe that, because the various steps contemplated by the
Plan were necessitated by the requirements of the Office of Thrift Supervision,
each of Merger 1, Merger 2 and Merger 3 has a business purpose and independent
significance and, as a result, the step transaction should not be applied to
this transaction. However, our opinion is not binding upon the Service, and
there can be no assurance that the Service will not assert a contradictory
position. Revenue Ruling 72-405 involved Corporation X which formed a wholly
owned subsidiary, merged an unrelated Corporation Y into the subsidiary and then
liquidated the subsidiary. The Service held that the overall plan for the
transactions was the acquisition of Corporation Y assets by Corporation X and
that the transitory existence of the subsidiary did not have independent
economic significance. As a result, the step transaction doctrine was applied,
the transitory existence of the subsidiary was ignored and the transaction was
treated as a direct acquisition of Corporation Y assets by Corporation X.
It is possible that the Service could assert, based upon reasoning similar
to that which was applied in Revenue Rule 72-405, that the overall plan of the
transactions contemplated by the Plan is the maintenance of the Association's
holding company structure and the merger of the Mutual Holding Company into the
Association and that, as a result, the step transaction doctrine should be
applied and the transitory elimination of the holding company structure in
Merger 1 and re-creation of the holding company structure in Merger 3 should be
ignored for tax purposes. If the Service were successful with such an assertion,
the transaction would be treated as a direct merger of the Mutual Holding
Company into the Association which may not qualify as a tax-free reorganization
resulting in taxable gain to the parties to the transaction.
The Service is currently reviewing the question of whether certain
downstream mergers of a parent corporation into its subsidiary or inversion
transactions, where a parent and its subsidiary reverse positions, which
otherwise qualify for tax-free treatment nevertheless should be treated as
taxable transactions because they circumvent the repeal of the "General
Utilities doctrine." We do not believe that the transactions undertaken pursuant
to the Plan constitute the type of transactions which circumvent the "General
Utilities doctrine."
<PAGE> 10
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 10
Based upon the forgoing, and assuming Merger 1, Merger 2 and Merger 3 are
consummated as described herein and in the Plan, we are of the opinion that:
1. The change in the form of operation of the Mutual Holding Company to a
federal interim stock savings association and the change in the form of the
operation of the Mid-Tier Holding Company to a federal interim stock savings
association constitute reorganizations under Section 368(a)(1)(F) of the Code
and Merger 1 and Merger 2 each qualify as a reorganization within the meaning of
Section 368(a)(1)(A) of the Code. The Mutual Holding Company, the Mid-Tier
Holding Company and the Association will be a party to a "reorganization" as
defined in Section 368(B) of the Code.
2. Interim MHC and Interim Holding will recognize no gain or loss
pursuant to Merger 1 and Merger 2.
3. No gain or loss will be recognized by the Association upon the receipt
of the assets of Interim Holding and Interim MHC in Merger 1 and Merger 2,
respectively.
4. Merger 3 qualifies as a reorganization within the meaning of Section
368(a)(1)(A) of the Code. Therefore, the Association, the Holding Company and
Interim will each be a party to a reorganization as defined in Section 368(b) of
the Code.
5. No gain or loss will be recognized by Interim upon the transfer of its
assets to the Association pursuant to Merger 3.
6. No gain or loss will be recognized by the Association upon the receipt
of the assets of Interim.
7. No gain or loss will be recognized by the Holding Company upon the
receipt of the Association stock solely in exchange for the Holding Company
Common Stock.
8. No gain or loss will be recognized by the Mid-Tier Holding Company
Public Shareholders upon the receipt of the Holding Company Common Stock.
9. The basis of the Holding Company stock to be received by the Public
Shareholders will be the same as the basis of the Mid-Tier Holding Company
Common Stock surrendered before giving effect to any payment of cash in lieu of
fractional shares.
<PAGE> 11
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 11
10. The holding period of the Holding Company Common Stock to be received
by the Public Shareholders will include the holding period of the Mid-Tier
Holding Company Common Stock, provided that the Mid-Tier Holding Company Common
Stock was held as a capital asset on the date of the exchange.
11. No gain or loss will be recognized by the Holding Company upon the
sale of the Holding Company Common Stock to investors.
12. The Eligible Account Holders, Supplemental Eligible Account Holders
and Other Members will recognize gain, if any, upon the issuance to them of: (i)
withdrawable savings accounts in the Association following the Conversion and
Reorganization, (ii) the liquidation account interests at the Association, and
(iii) nontransferable subscription rights to purchase Conversion Stock, but only
to the extent of the value, if any, of the subscription rights.
13. The tax basis to the holders of Conversion Stock purchased in the
Offerings will be the amount paid therefor, and the holding period for such
shares will begin on the date of exercise of the subscription rights if
purchased through the exercise of subscription rights. If purchased in the
Community Offering or Eligible Public Shareholders Offering, the holding period
for such stock will begin on the day after the date of purchase.
The opinions set forth above represent our conclusions as to the
application of existing federal income tax law to the facts of the instant
transaction. We can give no assurance that changes in such law, or in the
interpretation thereof, will not affect the opinions expressed by us. Moreover,
there can be no assurance that contrary positions may not be taken by the
Service, or that a court considering the issues would not hold contrary to such
opinions. However, we believe that a court, if such issues were litigated, is
more likely than not to concur with our opinion.
All of the opinions set forth above are qualified to the extent that the
validity or enforceability of any provision of any agreement may be subject to
or affected by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally. We do not express any
opinion as to the availability of any equitable or specific remedy upon any
breach of any of the covenants, warranties or other provisions contained in any
agreement. We have not examined, and we express no opinion with respect to the
applicability of, or liability under, any Federal, state or local law, ordinance
or regulation governing or pertaining to environmental matters, hazardous
wastes, toxic substances, asbestos, or the like.
<PAGE> 12
Board of Directors
ComFed, M. H. C.
October 15, 1998
Page 12
Further, the opinions set forth above represent our conclusions based upon
the documents reviewed by us and the facts presented to us. Any material
amendments to such documents or changes in any significant fact would affect the
opinions expressed herein.
We have not been asked to, and we do not, render any opinion with respect
to any matters other than those expressly set forth above.
CONSENT
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-1 ("Form S-1") to be filed by the Holding
Company with the Securities and Exchange Commission, and as an exhibit to the
Mutual Holding Company's Application for Conversion on the Form AC as filed
with the OTS ("Form AC"), and to the references to our firm in the Prospectus
which is part of both the Form S-1 and the Form AC.
Very truly yours,
Philip R. Bevan, a Partner
<PAGE> 1
EXHIBIT 8.2
[LOGO]
CROWE CHIZEK
October 13, 1998
Board of Directors
ComFed, M.H.C.
Community Savings Bankshares, Inc. (Federal)
Community Savings Bankshares, Inc. (Delaware)
Community Savings, F.A.
660 U.S. Highway One
North Palm Beach, Florida 33408
Re: Florida Income and Franchise Tax Opinion relating to the Plan of
Conversion, as amended, of ComFed, M.H.C. and the Agreement and Plan of
Reorganization between ComFed, M.H.C., Community Savings Bankshares,
Inc. (a federally chartered corporation), Community Savings Bankshares,
Inc. (a Delaware corporation), and Community Savings, F.A. dated as of
July 28, 1998, as amended on August 31, 1998
Ladies and Gentlemen:
In accordance with your request, we render our opinion relating to the Florida
income and franchise tax ("Florida tax") consequences of the proposed conversion
and reorganization of ComFed, M.H.C., Community Savings Bankshares, Inc. (a
federally chartered corporation), Community Savings Bankshares, Inc. (a Delaware
corporation), and Community Savings, F.A.
Statement of Facts
The facts and circumstances surrounding the proposed conversion and
reorganization are quite detailed and are described at length in the Plan of
Conversion, the Plan of Reorganization, and the Federal Tax Opinion issued by
Elias, Matz, Tiernan & Herrick, L.L.P. However, a brief summary of the proposed
conversion and reorganization is as follows:
ComFed, M.H.C. ("Mutual Holding Company"), a federally chartered mutual holding
company, owns 51.34% of the outstanding common stock of Community Savings
Bankshares, Inc. ("Mid-Tier Holding Company"), a federally chartered stock
middle-tier holding company. The remaining 48.66% of the outstanding common
stock of Mid-Tier Holding Company is owned by Public Shareholders. Community
Savings, F.A. ("Association"), a federally chartered stock savings association,
is a wholly owned subsidiary of Mid-Tier Holding Company.
For what are stated to be valid business reasons, Mutual Holding Company,
Mid-Tier Holding Company, and Association will complete a series of three
mergers resulting in the Public Shareholders owning 100% of a newly-formed
Delaware stock holding company, Community Savings Bankshares, Inc. ("Holding
Company"), which will own 100% of the outstanding common stock of Association.
<PAGE> 2
October 13, 1998
Board of Directors
ComFed, M.H.C.
Page 2
Opinion
You have provided us with a copy of the federal income tax opinion of the
proposed transactions prepared by Elias, Matz, Tiernan & Herrick, L.L.P., dated
October 13, 1998 ("Federal Tax Opinion") in which they have opined that the
proposed conversion and reorganization will be transactions described in Section
368(a)(1)(F) and Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as
amended.
Our opinion regarding the Florida tax consequences is based on the facts and
incorporates the capitalized terms contained in the Federal Tax Opinion. Our
opinion on the Florida tax consequences assumes that the final federal income
tax consequences of the proposed transactions will be those outlined in the
Federal Tax Opinion.
Should it finally be determined that the facts and the federal income tax
consequences are not as outlined in the Federal Tax Opinion, the Florida tax
consequences and our Florida tax opinion will differ from what is contained
herein. Our opinion is based on the Florida Income Tax Code and the regulations
thereunder, which are subject to change.
Our opinion adopts and relies upon the facts, assumptions, and conclusions as
set forth in the Federal Tax Opinion. Based upon that information, we render the
following opinion with respect to the Florida tax consequences of the proposed
transaction.
(1) Interim M.H.C. and Interim Holding will recognize no gain or loss
pursuant to Merger 1 and Merger 2.
(2) No gain or loss will be recognized by Association upon the receipt of
the assets of Interim Holding and Interim M.H.C. in Merger 1 and Merger
2, respectively.
(3) No gain or loss will be recognized by Interim upon the transfer of its
assets to the Association pursuant to Merger 3.
(4) No gain or loss will be recognized by Association upon the receipt of
the assets of Interim.
(5) No gain or loss will be recognized by Holding Company upon the receipt
of the Association stock solely in exchange for the Holding Company
Common Stock.
(6) No gain or loss will be recognized by Mid-Tier Holding Company Public
Shareholders upon the receipt of the Holding Company Common Stock.
(7) The basis of the Holding Company stock received by the Public
Shareholders will be the same as the basis of the Mid-Tier Holding
Company Common Stock surrendered before giving effect to any payment of
cash in lieu of fractional shares.
(8) The holding period of the Holding Company Common Stock to be received
by the Public Shareholders will include the holding period of the
Mid-Tier Holding Company Common
<PAGE> 3
October 13, 1998
Board of Directors
ComFed, M.H.C.
Page 3
Stock, provided that the Mid-Tier Holding Company Common Stock was held
as a capital asset on the date of the exchange.
(9) No gain or loss will be recognized by the Holding Company upon the sale
of the Holding Company Common Stock to investors.
(10) The Eligible Account Holders, Supplemental Account Holders, and Other
Members will recognize gain, if any, upon the issuance to them of: (i)
withdrawable savings accounts in Association following the Conversion
and Reorganization; (ii) the liquidation account interests at the
Association; and (iii) nontransferable subscription rights to purchase
conversion stock, but only to the extent of the value, if any, of the
subscription rights.
(11) The tax basis to the holders of Conversion Stock purchased in the
Offerings will be the amount paid therefor, and the holding period for
such shares will begin on the date of exercise of the subscription
rights if purchased through the exercise of subscription rights. If
purchased in the Community Offering or Eligible Public Shareholders
Offering, the holding period for such stock will begin on the day after
the date of purchase.
Our opinion is based upon legal authorities currently in effect, which
authorities are subject to modification or challenge at any time and perhaps
with retroactive effect. Further, no opinion is expressed under the provisions
of any of the other sections of the Florida Income Tax Code and Regulations
which may also be applicable thereto or to the tax treatments of any conditions
existing at the time of, or effects resulting from, the transaction which are
not specifically covered by the opinions set forth above.
If any fact contained in this opinion letter or the Federal Tax Opinion changes
to alter the federal tax treatment, it is imperative we be notified to determine
the effect on the Florida tax consequences, if any.
Consent
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-1 ("Form S-1") to be filed by the Holding
Company with the Securities and Exchange Commission, and as an exhibit to the
Mutual Holding Company's Application for Conversion on the Form AC as filed with
the OTS ("Form AC"), and to the references to our firm in the Prospectus which
is part of both the Form S-1 and the Form AC.
Very truly yours,
/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP
<PAGE> 1
EXHIBIT 10.3
AGREEMENT
AGREEMENT, dated this ________ day of _________ 1998, between Community
Savings, F.A. (the "Association"), a federally chartered savings and loan
association, Community Savings Bankshares, Inc. (the "Corporation"), a Delaware
corporation, and James B. Pittard, Jr. (the "Executive"). The Corporation and
the Association are collectively referred to as the "Employers".
W I T N E S S E T H
WHEREAS, the Executive is presently an officer of the Employers;
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Employers in the event that his
employment with the Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) AVERAGE ANNUAL COMPENSATION. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination and which was either (i) included in the Executive's gross income
for tax purposes, including but not limited to Base Salary, bonuses and amounts
taxable to the Executive under any qualified or non-qualified employee benefit
plans of the Employers, or (ii) deferred at the election of the Executive.
(b) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(c) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
For purposes of this paragraph, no act
<PAGE> 2
or failure to act on the Executive's part shall be considered "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's action or omission was in the best
interests of the Employers.
(d) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean the occurrence of any of the following: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. ss.574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. ss.574.3(c)(vii), or any successor to such
sections; (ii) an event that would be required to be reported in response to
Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the Exchange Act; (iii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities; or (iv)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least two-thirds thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least majority of the directors then still in office who were
directors at the beginning of the period.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(g) DISABILITY. Termination by the Corporation of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason shall be
communicated by written "Notice of Termination" to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after such Notice of
<PAGE> 3
Termination is given, except in the case of the Employers' termination of the
Executive's employment for Cause, which shall be effective immediately, and (iv)
is given in the manner specified in Section 10 hereof.
(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to their salaried employees.
2. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as President and Chief
Executive Officer, and the Executive hereby accepts said employment and agrees
to render such services to the Corporation on the terms and conditions set forth
in this Agreement. The term of this Agreement shall be a period of one year
commencing as of the date hereof (the "Commencement Date"), subject to earlier
termination as provided herein. Beginning on the day following the Commencement
Date, and on each day thereafter, the term of this Agreement shall be extended
for a period of one day in addition to the then-remaining term, provided that
the Employers have not given notice to the Executive in writing at least 60 days
prior to such day that the term of this Agreement shall not be extended further.
Reference herein to the term of this Agreement shall refer to both such initial
term and such extended terms. The Boards of Directors of the Employers shall
review on a periodic basis (and no less frequently than annually) whether to
permit further extensions of the term of this Agreement. As part of such review,
the Boards of Directors shall consider all relevant factors, including the
Executive's performance hereunder, and shall either expressly approve further
extensions of the time of this Agreement or decide to provide notice to the
contrary.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers' Boards of Directors.
<PAGE> 4
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $______
per year ("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Boards of Directors of the Employers and may
not be decreased without the Executive's express written consent. In addition to
his Base Salary, the Executive shall be entitled to receive during the term of
this Agreement such bonus payments as may be determined by the Boards of
Directors of the Employers.
(b) During the term of this Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, restricted stock grant plan,
employee stock ownership, or other plans, benefits and privileges given to
employees and executives of the Employers, to the extent commensurate with his
then duties and responsibilities, as fixed by the Boards of Directors of the
Employers. The Employers shall not make any changes in such plans, benefits or
privileges which would adversely affect the Executive's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Employers and does not result in a proportionately
greater adverse change in the rights of or benefits to the Executive as compared
with any other executive officer of the Employers. Nothing paid to the Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to the Executive
pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Boards of Directors of the Employers.
(d) In the event the Executive's employment is terminated due to
Disability or Retirement, the Employers shall provide continued life, medical,
dental and disability coverage substantially identical to the coverage
maintained by the Employers for the Executive immediately prior to his
termination. Such coverage shall cease upon the expiration of the remaining term
of this Agreement.
(e) The Executive's compensation, benefits and expenses shall be paid
by the Corporation and the Association in the same proportion as the time and
services actually expended by the Executive on behalf of each respective
Employer.
4. EXPENSES. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Employers, including,
but not by way of limitation, automobile expenses and other traveling expenses,
and all reasonable entertainment expenses (whether incurred at the
<PAGE> 5
Executive's residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of the Employers. If such expenses are paid in the first instance by
the Executive, the Employers shall reimburse the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employers for Cause or (ii) the Executive terminates his employment
hereunder other than for Disability, Retirement or death, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.
(c) In the event that the Executive's employment is terminated as a
result of Disability or Retirement during the term of this Agreement, the
Executive shall have no right pursuant to this Agreement to compensation or
other benefits for any period after the applicable Date of Termination, except
as provided for in Section 3(d) hereof. In the event that the Executive is
terminated by the Employers in the event of a Change in Control of the
Corporation, the Executive shall be due such payments and benefits as provided
for in that certain Change in Control Severance Agreement between the Employers
and the Executive dated ____________________ ____, 1998 (the "Change in
Control Agreement").
(d) In the event that (i) the Executive's employment is terminated by
the Corporation for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive due to a material
breach of this Agreement by the Employers, which breach has not been cured
within fifteen (15) days after a written notice of non-compliance has been given
by the Executive to the Employers, then the Employers shall:
(A) pay to the Executive, in either twelve (12) equal monthly
installments beginning with the first business day of the month
following the Date of Termination or in a lump sum within five business
days of the Date of Termination (at the Employers' election), a cash
severance amount equal to one (1) times that the Executive's Average
Annual Compensation paid by the Employers, and
(B) maintain and provide for a period ending at the earlier of
(i) the expiration of the remaining term of employment pursuant hereto
prior to the Notice of Termination or (ii) the date of the Executive's
full-time employment by another employer (provided that the Executive
is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph (B)), at
no cost to the Executive (except to the extent the Executive already
bears or portion of the expense of such benefits prior to the Date of
<PAGE> 6
Termination), the Executive's continued participation in all group
insurance, life insurance, health and accident insurance, disability
insurance and other employee benefit plans, programs and arrangements
offered by the Employers in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (x)
stock option and restricted stock plans of the Employers, (y) bonuses
and other items of cash compensation included in Average Annual
Compensation, and (z) other benefits, or portions thereof, included in
Average Annual Compensation), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (B) is barred, or during such period any
such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Employers shall arrange to
provide the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans, programs
and arrangements immediately prior to the Date of Termination.
6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits payable by the Association pursuant to Section 5
hereof shall be reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no portion of the
payments and benefits payable by the Employers under Section 5 being
non-deductible to the Employers pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code. The determination of
any reduction in the payments and benefits to be made pursuant to Section 5
shall be based upon the opinion of independent counsel selected by the
Employers' independent public accountants and paid by the Employers. Such
counsel shall be reasonably acceptable to the Employers and the Executive; shall
promptly prepare the foregoing opinion, but in no event later than thirty (30)
days from the Date of Termination; and may use such actuaries as such counsel
deems necessary or advisable for the purpose. Nothing contained herein shall
result in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment under any circumstances other than as
specified in this Section 6, or a reduction in the payments and benefits
specified in Section 5 below zero.
<PAGE> 7
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ASSIGNABILITY. The Employers may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
their assets, if in any such case said corporation, bank or other entity shall
by operation of law or expressly in writing assume all obligations of the
Employers hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any rights
or obligations hereunder.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Corporation: Secretary
Community Savings Bankshares, Inc.
660 U.S. Highway One
North Palm Beach, Florida 33408
To the Association: Secretary
Community Savings, F. A.
660 U.S. Highway One
North Palm Beach, Florida 33408
<PAGE> 8
To the Executive: James B. Pittard, Jr.
[HOME ADDRESS]
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
its behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of Florida.
13. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Corporation to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
14. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. REGULATORY ACTIONS. The following provisions shall be applicable to
the parties to the extent that they are required to be included in employment
agreements between a savings association and its employees pursuant to Section
563.39(b) of the Regulations Applicable to All Savings Associations, 12 C.F.R.
ss.563.39(b), or any successor thereto, and shall be controlling in the event of
a conflict with any other provision of this Agreement, including without
limitation Section 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers' affairs pursuant
to notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. ss.ss.1818(e)(3) and 1818(g)(1)), the
Employers' obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the
<PAGE> 9
Employers may, in their discretion: (i) pay the Executive all or part of the
compensation withheld while its obligations under this Agreement were suspended,
and (ii) reinstate (in whole or in part) any of its obligations which were
suspended.
(b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employers' affairs by an
order issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
ss.ss.1818(e)(4) and (g)(1)), all obligations of the Employers under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the Executive and the Employers as of the date of termination shall
not be affected.
(c) If the Association is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. ss.1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Executive and the
Employers as of the date of termination shall not be affected.
(d) All obligations under this Agreement shall be terminated pursuant
to 12 C.F.R. ss.563.39(b)(5) (except to the extent that it is determined that
continuation of the Agreement for the continued operation of the Employers is
necessary): (i) by the Director of the Office of Thrift Supervision ("OTS"), or
his/her designee, at the time the Federal Deposit Insurance Corporation ("FDIC")
enters into an agreement to provide assistance to or on behalf of the
Association under the authority contained in Section 13(c) of the FDIA (12
U.S.C. ss.1823(c)); or (ii) by the Director of the OTS, or his/her designee, at
the time the Director or his/her designee approves a supervisory merger to
resolve problems related to operation of the Association or when the Association
is determined by the Director of the OTS to be in an unsafe or unsound
condition, but vested rights of the Executive and the Employers as of the date
of termination shall not be affected.
18. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. ss.1828(k)) and the regulations
promulgated thereunder, including 12 C.F.R. Part 359. In the event of the
Executive's termination of employment with the Association for Cause, all
employment relationships and managerial duties with the Association shall
immediately cease regardless of whether the Executive remains in the employ of
the Corporation following such termination. Furthermore, following such
termination for Cause, the Executive will not, directly or indirectly, influence
or participate in the affairs or the operations of the Association.
19. PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS. In
the event any dispute or controversy arising under or in connection with the
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of (a) all legal fees incurred by the Executive in resolving such
dispute or controversy, and (2) any back-pay, including Base Salary, bonuses and
any other cash compensation, fringe benefits and any compensation and benefits
due to the Executive under this Agreement.
<PAGE> 10
20. INDEMNIFICATION. The Corporation shall provide the Executive
(including his heirs, executors and administrators) with coverage under a
standard directors' and officers' liability insurance policy at its expense, or
in lieu thereof, shall indemnify the Executive (and his heirs, executors and
administrators) to the fullest extent permitted under Delaware law against all
expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been a director or officer of the Corporation (whether or
not he continues to be a director or officer at the time of incurring such
expenses or liabilities). Such expenses and liabilities shall include, but shall
not be limited to, judgments, court costs and attorneys' fees and the cost of
reasonable settlements.
21. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Corporation and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect. Notwithstanding the foregoing, nothing contained in this
Agreement shall affect the Change in Control Agreement of even date being
entered into between the Employers and the Executive.
<PAGE> 11
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: COMMUNITY SAVINGS BANKSHARES, INC.
By:
- -------------------- ----------------------------
Name:
Title:
Attest: COMMUNITY SAVINGS, F. A.
By:
- -------------------- ----------------------------
Name:
Title:
EXECUTIVE
By:
-----------------------------
<PAGE> 1
EXHIBIT 10.4
CHANGE IN CONTROL SEVERANCE AGREEMENT AMONG
COMMUNITY SAVINGS BANKSHARES, INC.,
COMMUNITY SAVINGS, F. A. AND JAMES B. PITTARD, JR.
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is dated this ____ day of
_____ 1998, among Community Savings Bankshares, Inc., a Delaware corporation
(the "Corporation"), Community Savings, F. A., a federally chartered savings
association (the "Association"), and James B. Pittard, Jr. (the "Executive").
The Corporation and the Association are collectively referred to as the
"Employers".
WITNESSETH
WHEREAS, the Executive is presently an officer of each of the
Employers;
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) ANNUAL COMPENSATION. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of
compensation paid to the Executive by the Employers or any subsidiary thereof
during the calendar year in which the Date of Termination occurs (determined on
an annualized basis) or either of the two calendar years immediately preceding
the calendar year in which the Date of Termination occurs and which was either
(i) included in the Executive's gross income for tax purposes, including but not
limited to Base Salary, bonuses and amounts taxable to the Executive under any
qualified or non-qualified employee benefit plans of the Employers, or (ii)
deferred at the election of the Executive.
(b) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary
<PAGE> 2
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order. For purposes of this
paragraph, no act or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's action or omission was in the
best interests of the Employers.
(c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean the occurrence of any of the following: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. ss.574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. ss.574.3(c)(vii), or any successor to such
sections; (ii) an event that would be required to be reported in response to
Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the Exchange Act; (iii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities; or (iv)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least two-thirds thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least majority of the directors then still in office who were
directors at the beginning of the period.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in the Notice of Termination.
(f) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
(i) Without the Executive's express written consent,
the assignment by the Employers to the Executive of any duties
which are
<PAGE> 3
materially inconsistent with the Executive's positions,
duties, responsibilities and status with the Employers
immediately prior to a Change in Control of the Corporation,
or a material change in the Executive's reporting
responsibilities, titles or offices as an employee and as in
effect immediately prior to such a Change in Control, or any
removal of the Executive from or any failure to re-elect the
Executive to any of such responsibilities, titles or offices,
except in connection with the termination of the Executive's
employment for Cause, Disability or Retirement or as a result
of the Executive's death or by the Executive other than for
Good Reason;
(ii) Without the Executive's express written consent,
a reduction by either of the Employers in the Executive's base
salary as in effect immediately prior to the date of the
Change in Control of the Corporation or as the same may be
increased from time to time thereafter or a reduction in the
package of fringe benefits provided to the Executive;
(iii) The principal executive office of either of the
Employers is relocated outside of the North Palm Beach,
Florida area or, without the Executive's express written
consent, either of the Employers require the Executive to be
based anywhere other than an area in which the Employers'
principal executive office is located, except for required
travel on business of the Employers to an extent substantially
consistent with the Executive's present business travel
obligations;
(iv) Any purported termination of the Executive's
employment for Disability or Retirement which is not effected
pursuant to a Notice of Termination satisfying the
requirements of paragraph (i) below; or
(v) The failure by the Employers to obtain the
assumption of and agreement to perform this Agreement by any
successor as contemplated in Section 6 hereof.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (90) days after such Notice of Termination is given, except
in the case of the
<PAGE> 4
Employers' termination of the Executive's employment for Cause, which shall be
effective immediately; and (iv) is given in the manner specified in Section 7
hereof.
(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to their salaried employees.
2. BENEFITS UPON TERMINATION. If the Executive's employment by the
Employers shall be terminated subsequent to a Change in Control of the
Corporation by (i) the Employers for other than Cause, Disability, Retirement or
the Executive's death or (ii) the Executive for Good Reason, then the Employers
shall
(a) pay to the Executive, in either thirty-six (36) equal monthly
installments beginning with the first business day of the month following the
Date of Termination or in a lump sum as of the Date of Termination (at the
Executive's election), a cash severance amount equal to three (3) times the
Executive's Annual Compensation, and
(b) maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of this Agreement as of the Date of Termination
or (ii) the date of the Executive's full-time employment by another employer
(provided that the Executive is entitled under the terms of such employment to
benefits substantially similar to those described in this subparagraph (B)), at
no cost to the Executive (except to the extent the Executive already bears or
portion of the expense of such benefits prior to the Date of Termination), the
Executive's continued participation in all group insurance, life insurance,
health and accident insurance, disability insurance and other employee benefit
plans, programs and arrangements offered by the Employers in which the Executive
was entitled to participate immediately prior to the Date of Termination
excluding (x) stock option and restricted stock plans of the Employers, (y)
bonuses and other items of cash compensation included in Annual Compensation,
and (z) other benefits, or portions thereof, included in Annual Compensation),
provided that in the event that the Executive's participation in any plan,
program or arrangement as provided in this subparagraph (B) is barred, or during
such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employers shall arrange to
provide the Executive with benefits substantially similar to those which the
Executive was entitled to receive under such plans, programs and arrangements
immediately prior to the Date of Termination.
3. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 2 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits payable by the Employers pursuant to Section 2
hereof shall be reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no portion of the
payments and benefits payable by the Employers under Section 2 being
non-deductible to the Employers pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code. The parties hereto
agree
<PAGE> 5
that the present value of the payments and benefits payable pursuant to this
Agreement to the Executive upon termination shall be limited to three times the
Executive's Annual Compensation, subject to reduction as provided hereby. The
determination of any reduction in the payments and benefits to be made pursuant
to Section 2 shall be based upon the opinion of independent counsel selected by
the Employers' independent public accountants and paid by the Employers. Such
counsel shall be reasonably acceptable to the Employers and the Executive; shall
promptly prepare the foregoing opinion, but in no event later than thirty (30)
days from the Date of Termination; and may use such actuaries as such counsel
deems necessary or advisable for the purpose. Nothing contained herein shall
result in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment under any circumstances other than as
specified in this Section 3, or a reduction in the payments and benefits
specified in Section 2 below zero.
4. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
5. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
6. ASSIGNABILITY. The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which either of the Employers may hereafter
merge or consolidate or to which either of the Employers may transfer all or
substantially all of its respective assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employers hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this Agreement
or their rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.
7. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Corporation: Secretary
<PAGE> 6
Community Savings Bankshares, Inc.
660 U.S. Highway One
North Palm Beach, Florida 33408
To the Association: Secretary
Community Savings, F. A.
660 U.S. Highway One
North Palm Beach, Florida 33408
To the Executive: [Name]
[Home address]
8. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
9. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of Florida.
<PAGE> 7
10. NATURE OF EMPLOYMENT AND OBLIGATIONS.
(a) Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Employers and the
Executive, and the Employers may terminate the Executive's employment at any
time, subject to providing any payments specified herein in accordance with the
terms hereof.
(b) Nothing contained herein shall create or require the Employers to
create a trust of any kind to fund any benefits which may be payable hereunder,
and to the extent that the Executive acquires a right to receive benefits from
the Employers hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
11. TERM OF AGREEMENT. The term of this Agreement shall be for three
years, commencing on the date of this Agreement and, upon approval of the Boards
of Directors of the Employers, shall extend for an additional year on each
annual anniversary of the date of this Agreement such that at any time the
remaining term of this Agreement shall be from two to three years. Prior to the
first annual anniversary of the date of this Agreement and each annual
anniversary thereafter, the Boards of Directors of the Employers shall consider
and review (after taking into account all relevant factors, including the
Executive's performance) an extension of the term of this Agreement, and the
term shall continue to extend each year if the Boards of Directors approve such
extension unless the Executive gives written notice to the Employers of the
Executive's election not to extend the term, with such written notice to be
given not less than sixty (60) days prior to any such anniversary date. If the
Boards of Directors of the Employers elect not to extend the term, they shall
give written notice of such decision to the Executive not less than sixty (60)
days prior to any such anniversary date. If any party gives timely notice that
the term will not be extended as of any annual anniversary date, then this
Agreement shall terminate at the conclusion of its remaining term. References
herein to the term of this Agreement shall refer both to the initial term and
successive terms.
12. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal
<PAGE> 8
Deposit Insurance Act (12 U.S.C. ss.1828(k)) and the regulations promulgated
thereunder, including 12 C.F.R. Part 359.
16. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Employers and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.
<PAGE> 9
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: COMMUNITY SAVINGS BANKSHARES, INC.
By:
- ------------------------- -------------------------------
Name:
Title:
Attest: COMMUNITY SAVINGS, F. A.
By:
- ------------------------- -------------------------------
Name:
Title:
EXECUTIVE
By:
-------------------------------
<PAGE> 1
EXHIBIT 10.5
CHANGE IN CONTROL SEVERANCE AGREEMENT AMONG
COMMUNITY SAVINGS BANKSHARES, INC.,
COMMUNITY SAVINGS, F. A. AND _______________
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is dated this ____ day of
_____ 1998, among Community Savings Bankshares, Inc., a Delaware corporation
(the "Corporation"), Community Savings, F. A., a federally chartered savings
association (the "Association"), and _________ (the "Executive"). The
Corporation and the Association are collectively referred to as the "Employers".
WITNESSETH
WHEREAS, the Executive is presently an officer of each of the
Employers;
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) ANNUAL COMPENSATION. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of
compensation paid to the Executive by the Employers or any subsidiary thereof
during the calendar year in which the Date of Termination occurs (determined on
an annualized basis) or either of the two calendar years immediately preceding
the calendar year in which the Date of Termination occurs and which was either
(i) included in the Executive's gross income for tax purposes, including but not
limited to Base Salary, bonuses and amounts taxable to the Executive under any
qualified or non-qualified employee benefit plans of the Employers, or (ii)
deferred at the election of the Executive.
(b) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary
<PAGE> 2
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order. For purposes of this
paragraph, no act or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's action or omission was in the
best interests of the Employers.
(c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean the occurrence of any of the following: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. ss.574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. ss.574.3(c)(vii), or any successor to such
sections; (ii) an event that would be required to be reported in response to
Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the Exchange Act; (iii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities; or (iv)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least two-thirds thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least majority of the directors then still in office who were
directors at the beginning of the period.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in the Notice of Termination.
(f) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
(i) Without the Executive's express written consent,
the assignment by the Employers to the Executive of any duties
which are
<PAGE> 3
materially inconsistent with the Executive's positions,
duties, responsibilities and status with the Employers
immediately prior to a Change in Control of the Corporation,
or a material change in the Executive's reporting
responsibilities, titles or offices as an employee and as in
effect immediately prior to such a Change in Control, or any
removal of the Executive from or any failure to re-elect the
Executive to any of such responsibilities, titles or offices,
except in connection with the termination of the Executive's
employment for Cause, Disability or Retirement or as a result
of the Executive's death or by the Executive other than for
Good Reason;
(ii) Without the Executive's express written consent,
a reduction by either of the Employers in the Executive's base
salary as in effect immediately prior to the date of the
Change in Control of the Corporation or as the same may be
increased from time to time thereafter or a reduction in the
package of fringe benefits provided to the Executive;
(iii) The principal executive office of either of the
Employers is relocated outside of the North Palm Beach,
Florida area or, without the Executive's express written
consent, either of the Employers require the Executive to be
based anywhere other than an area in which the Employers'
principal executive office is located, except for required
travel on business of the Employers to an extent substantially
consistent with the Executive's present business travel
obligations;
(iv) Any purported termination of the Executive's
employment for Disability or Retirement which is not effected
pursuant to a Notice of Termination satisfying the
requirements of paragraph (i) below; or
(v) The failure by the Employers to obtain the
assumption of and agreement to perform this Agreement by any
successor as contemplated in Section 6 hereof.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (90) days after such Notice of Termination is given, except
in the case of the
<PAGE> 4
Employers' termination of the Executive's employment for Cause, which shall be
effective immediately; and (iv) is given in the manner specified in Section 7
hereof.
(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to their salaried employees.
2. BENEFITS UPON TERMINATION. If the Executive's employment by the
Employers shall be terminated subsequent to a Change in Control of the
Corporation by (i) the Employers for other than Cause, Disability, Retirement or
the Executive's death or (ii) the Executive for Good Reason, then the Employers
shall
(a) pay to the Executive, in either twelve (12) equal monthly
installments beginning with the first business day of the month following the
Date of Termination or in a lump sum as of the Date of Termination (at the
Executive's election), a cash severance amount equal to one (1) times the
Executive's Annual Compensation, and
(b) maintain and provide for a period ending at the earlier of (i) one
year from the Date of Termination or (ii) the date of the Executive's full-time
employment by another employer (provided that the Executive is entitled under
the terms of such employment to benefits substantially similar to those
described in this subparagraph (B)), at no cost to the Executive (except to the
extent the Executive already bears or portion of the expense of such benefits
prior to the Date of Termination), the Executive's continued participation in
all group insurance, life insurance, health and accident insurance, disability
insurance and other employee benefit plans, programs and arrangements offered by
the Employers in which the Executive was entitled to participate immediately
prior to the Date of Termination excluding (x) stock option and restricted stock
plans of the Employers, (y) bonuses and other items of cash compensation
included in Annual Compensation, and (z) other benefits, or portions thereof,
included in Annual Compensation), provided that in the event that the
Executive's participation in any plan, program or arrangement as provided in
this subparagraph (B) is barred, or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Employers shall arrange to provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive under such plans,
programs and arrangements immediately prior to the Date of Termination.
3. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 2 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits payable by the Employers pursuant to Section 2
hereof shall be reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no portion of the
payments and benefits payable by the Employers under Section 2 being
non-deductible to the Employers pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code. The parties hereto
agree
<PAGE> 5
that the present value of the payments and benefits payable pursuant to this
Agreement to the Executive upon termination shall be limited to three times the
Executive's Annual Compensation, subject to reduction as provided hereby. The
determination of any reduction in the payments and benefits to be made pursuant
to Section 2 shall be based upon the opinion of independent counsel selected by
the Employers' independent public accountants and paid by the Employers. Such
counsel shall be reasonably acceptable to the Employers and the Executive; shall
promptly prepare the foregoing opinion, but in no event later than thirty (30)
days from the Date of Termination; and may use such actuaries as such counsel
deems necessary or advisable for the purpose. Nothing contained herein shall
result in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment under any circumstances other than as
specified in this Section 3, or a reduction in the payments and benefits
specified in Section 2 below zero.
4. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
5. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
6. ASSIGNABILITY. The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which either of the Employers may hereafter
merge or consolidate or to which either of the Employers may transfer all or
substantially all of its respective assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employers hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this Agreement
or their rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.
7. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Corporation: Secretary
<PAGE> 6
Community Savings Bankshares, Inc.
660 U.S. Highway One
North Palm Beach, Florida 33408
To the Association: Secretary
Community Savings, F. A.
660 U.S. Highway One
North Palm Beach, Florida 33408
To the Executive: [Name]
[Home address]
8. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
9. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of Florida.
<PAGE> 7
10. NATURE OF EMPLOYMENT AND OBLIGATIONS.
(a) Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Employers and the
Executive, and the Employers may terminate the Executive's employment at any
time, subject to providing any payments specified herein in accordance with the
terms hereof.
(b) Nothing contained herein shall create or require the Employers to
create a trust of any kind to fund any benefits which may be payable hereunder,
and to the extent that the Executive acquires a right to receive benefits from
the Employers hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
11. TERM OF AGREEMENT. The term of this Agreement shall be for three
years, commencing on the date of this Agreement and, upon approval of the Boards
of Directors of the Employers, shall extend for an additional year on each
annual anniversary of the date of this Agreement such that at any time the
remaining term of this Agreement shall be from two to three years. Prior to the
first annual anniversary of the date of this Agreement and each annual
anniversary thereafter, the Boards of Directors of the Employers shall consider
and review (after taking into account all relevant factors, including the
Executive's performance) an extension of the term of this Agreement, and the
term shall continue to extend each year if the Boards of Directors approve such
extension unless the Executive gives written notice to the Employers of the
Executive's election not to extend the term, with such written notice to be
given not less than thirty (30) days prior to any such anniversary date. If the
Boards of Directors of the Employers elect not to extend the term, they shall
give written notice of such decision to the Executive not less than thirty (30)
days prior to any such anniversary date. If any party gives timely notice that
the term will not be extended as of any annual anniversary date, then this
Agreement shall terminate at the conclusion of its remaining term. References
herein to the term of this Agreement shall refer both to the initial term and
successive terms.
12. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal
<PAGE> 8
Deposit Insurance Act (12 U.S.C. ss.1828(k)) and the regulations promulgated
thereunder, including 12 C.F.R. Part 359.
16. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Employers and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.
<PAGE> 9
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: COMMUNITY SAVINGS BANKSHARES, INC.
By:
- ----------------------- -----------------------------
Name:
Title:
Attest: COMMUNITY SAVINGS, F. A.
By:
- ----------------------- -----------------------------
Name:
Title:
EXECUTIVE
By:
-----------------------------
<PAGE> 1
Exhibit 16.0
Certified Public Accountants Suite 2500
100 Southeast Second Street
Miami, Florida 33131-2135
Telephone: (305) 358-4141
Facsimile: (305) 372-3150
October 13, 1998
Securities and Exchange Commission
Mail Stop 9-5
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read and agree with the comments in Item 4 of Form 8-K/A of
Community Savings Bankshares, Inc. dated October 13, 1998.
Yours truly,
/s/ Deloitte & Touche
DELOITTE & TOUCHE LLP
<PAGE> 1
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the use in this amended registration statement of
Community Savings Bankshares, Inc. on Form S-1 and the amended Application on
Form AC of ComFed, M. H. C. of our report dated February 20, 1998, appearing in
the Prospectus, which is part of this Registration Statement and the
Application.
We also consent to the reference to us under heading "Experts" in such
Prospectus.
Deloitte & Touche LLP
West Palm Beach, Florida
October 13, 1998
<PAGE> 1
<TABLE>
<S> <C> <C>
(COMMUNITY SAVINGS BANKSHARES, INC LOGO) STOCK CENTER
9600 N. Alt. A1A
(Proposed Holding Company for Palm Beach Gardens, FL 33410
Community Savings, F. A.) P.O. BOX 30729
Palm Beach Gardens, FL 33420
(561) 626-9778 (888) 642-0084
</TABLE>
ORDER FORM & CERTIFICATION FORM Note: Please read the Order Form Guide
and Instructions included in the packet of information before completion.
- --------------------------------------------------------------------------------
DEADLINE: The Subscription Offering expires at 12:00 Noon, Eastern time,
, 1998. Your Order Form and Certification Form, properly executed
and with the correct payment, must be received at the Stock Center by this
deadline, or it will be considered void. No photocopied or faxed Order Forms
will be accepted.
- --------------------------------------------------------------------------------
NUMBER OF SHARES/AMOUNT OF PAYMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(1) NUMBER OF SHARES OF COMMUNITY SAVINGS (2) Number of Shares to purchase Price Per Share (3) Total Amount Due
BANKSHARES, INC. CURRENTLY OWNED
<S> <C> <C> <C>
X $10.00 = $
(minimum 25)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The minimum number of shares for which you may subscribe is 25. For persons who
do not currently own shares of Community Savings Bankshares, Inc., the maximum
purchase limitations generally are as follows: (i) the maximum number of shares
that any Eligible Account Holder, Supplemental Eligible Account Holder, Other
Member, or director, officer, or employee may purchase in the Subscription
Offering is 100,000 shares ($1,000,000 worth), (ii) the maximum number of shares
that any person may purchase in the Community Offering or Eligible Public
Shareholders Offering is 100,000 shares ($1,000,000 worth), and (iii) the
maximum number of aggregate shares that any person together with associates of
and persons acting in concert with such person, when combined with Exchange
Shares to be received by such person, together with associates of and persons
acting in concert with such person, is 3% of the total shares issued in the
Conversion.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
METHOD OF PAYMENT PURCHASER INFORMATION
<S> <C> <C> <C>
(4)[ ] Enclosed is a check, bank draft, or money order made payable (6)[ ] Check here if you were a depositor with at least
to COMMUNITY SAVINGS BANKSHARES, INC. for $ -------------. $50.00 on deposit at the Eligibility Record Date
(June 30, 1997) and/or the Supplemental Eligibility
(5)[ ] I authorize Community Savings Bankshares, Inc. to make the Record Date (September 30, 1998) and/or a depositor
withdrawals from my Community Savings, F. A. account(s) shown or borrower on the Voting Record Date ( ,
below, and understand that the amounts will not otherwise be 1998). List all the names on the account(s) and all
available for withdrawal: the account number(s) of those accounts you had at
these dates to ensure proper identification of your
ACCOUNT NUMBER(S) AMOUNT(S) purchase rights. Confirm account(s) by initialing
- ------------------------------------------------------------------- here.-------------------------------------------------
$ ACCOUNT TITLE (NAMES ON ACCOUNTS) ACCOUNT NUMBER
- ------------------------------------------------------------------- ------------------------------------------------------------
- ------------------------------------------------------------------- ------------------------------------------------------------
- ------------------------------------------------------------------- ------------------------------------------------------------
- ------------------------------------------------------------------- ------------------------------------------------------------
Total Withdrawal $
- ------------------------------------------------------------------- ------------------------------------------------------------
THERE IS NO PENALTY FOR EARLY WITHDRAWALS USED FOR THIS PAYMENT. [ ] Check here if you are a DIRECTOR, OFFICER or EMPLOYEE
TO WITHDRAW FROM AN ACCOUNT WITH CHECKING PRIVILEGES, PLEASE WRITE of Community Savings, F. A. or a member of such
A CHECK. person's immediate family.
[ ] Check here if you are a shareholder of Community
Savings Bankshares, Inc. as of ---------------, 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(7) STOCK REGISTRATION Form of stock ownership ADDING THE NAME(S) OF OTHER PERSONS WHO ARE NOT OWNERS OF YOUR
QUALIFYING ACCOUNT(S) WILL RESULT IN YOUR ORDER BECOMING NULL AND VOID.
<S> <C> <C> <C>
[ ] Individual [ ] Uniform Transfer to Minors [ ] Partnership
[ ] Joint Tenants (WROS) [ ] Uniform Gift to Minors [ ] Individual Retirement Account
[ ] Tenants in Common [ ] Corporation [ ] Fiduciary/Trust (Under Agreement
Dated -------------)
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
(8) Name Social Security or Tax I.D.
- ------------------------------------------------------------------------------------------------------------------------------------
Name Daytime Telephone
- ------------------------------------------------------------------------------------------------------------------------------------
Street Address Evening Telephone
- ------------------------------------------------------------------------------------------------------------------------------------
City State Zip Code County of Residence
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
(9)[ ] NASD AFFILIATION (This section applies to those individuals who meet the delineated (10)[ ] ASSOCIATE--ACTING IN CONCERT
criteria) Check here if you are a member of the National Association of Securities Check here, and complete the
Dealers, Inc. ("NASD"),a person associated with an NASD member, a member of the reverse side of this form,
immediate family of any such person to whose support such person contributes, directly if you or any associates (as
or indirectly, or the holder of an account in which an NASD member or person associated defined on the reverse side
with an NASD member has a beneficial interest. To comply with conditions under which of this form) or persons
an exemption from the NASD's Interpretation With Respect to Free Riding and Withholding acting in concert with you
is available, you agree, if you have checked the NASD affiliation box, (i) not to sell, have submitted other orders
transfer or hypothecate the stock for a period of 90 days following the issuance, and for shares in the offerings.
(ii) to report this subscription in writing to the applicable NASD member within one
day of the payment therefor.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
ACKNOWLEDGEMENT By signing below, I acknowledge receipt of the Prospectus dated
, 1998 and the provisions therein and understand that I may not change
or revoke my order once it is received by Community Savings Bankshares, Inc. I
ALSO CERTIFY THAT THIS STOCK ORDER IS FOR MY ACCOUNT ONLY AND THERE IS NO
AGREEMENT OR UNDERSTANDING REGARDING ANY FURTHER SALE OR TRANSFER OF THESE
SHARES. FEDERAL REGULATIONS PROHIBIT ANY PERSONS FROM TRANSFERRING, OR ENTERING
INTO ANY AGREEMENT DIRECTLY OR INDIRECTLY TO TRANSFER, THE LEGAL OR BENEFICIAL
OWNERSHIP OF CONVERSION SUBSCRIPTION RIGHTS OR THE UNDERLYING SECURITIES TO THE
ACCOUNT OF ANOTHER PERSON. COMMUNITY SAVINGS F. A. WILL PURSUE ANY AND ALL LEGAL
AND EQUITABLE REMEDIES IN THE EVENT IT BECOMES AWARE OF THE TRANSFER OF
SUBSCRIPTION RIGHTS AND WILL NOT HONOR ORDERS KNOWN BY IT TO INVOLVE SUCH
TRANSFER.
Under penalties of perjury, I further certify that: (1) the social security
number or taxpayer identification number and the information provided on this
Order Form given above is true, correct and complete and that I am purchasing
for solely my own account and that there is no agreement or understanding
regarding the sale or transfer of shares ordered hereby or my rights to
subscribe for such shares; and (2) I am not subject to backup withholding. You
must cross out this item, (2) above, if you have been notified by the Internal
Revenue Service that you are subject to backup withholding because of
underreporting interest or dividends on your tax return.
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------
(11) SIGNATURE Sign and date the form. When purchasing as a SIGNATURE Title (if applicable) Date
custodian, corporate officer, etc., include your full title.
An additional signature is required only when payment is by
withdrawal from an account that requires more than one
signature to withdraw funds. ------------------------------------------------------------
SIGNATURE Title (if applicable) Date
(12) CERTIFICATION FORM ON REVERSE SIDE. All parties
registered in section (8) above must read, date, and sign
The Certification Form on the reverse side of this Order
Form.
YOUR ORDER WILL BE FILLED IN ACCORDANCE WITH THE PROVISIONS
OF THE PROSPECTUS AND IS SUBJECT TO THE PROVISIONS OF THE
PLAN OF CONVERSION. THIS ORDER IS NOT VALID IF NOT SIGNED.
If you need help completing this Form, you may call the
Stock Center at (561) 626-9778 or toll free (888) 642-0084. ------------------------------------------------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, SAVINGS ASSOCIATION INSURANCE FUND OR
ANY OTHER CORPORATION, FUND OR GOVERNMENT AGENCY.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
FOR OFFICE USE ONLY
Date Rec'd --/--/-- Order #------------- Batch------ Check #------------ Category------ Amount $--------- Initials----
- ----------------------------------------------------------------------------------------------------------------------------
BE SURE TO COMPLETE AND SIGN THE CERTIFICATION FORM ON THE REVERSE SIDE. ---------------
</TABLE>
<PAGE> 2
(Community Savings Bancshares, Inc. Logo)
ITEM (6) -- (PURCHASER INFORMATION CONTINUED)
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------- -------------------------------------------------------------
ACCOUNT TITLE (NAMES ON ACCOUNT) ACCOUNT NUMBER ACCOUNT TITLE (NAMES ON ACCOUNT) ACCOUNT NUMBER
- ------------------------------------------------------------- -------------------------------------------------------------
- ------------------------------------------------------------- -------------------------------------------------------------
- ------------------------------------------------------------- -------------------------------------------------------------
- ------------------------------------------------------------- -------------------------------------------------------------
- ------------------------------------------------------------- -------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
The term "associate," when used to indicate a relationship
with any person, is defined to mean (i) a corporation or
ITEM (10) -- (ASSOCIATES -- ACTING IN CONCERT CONTINUED) organization (other than Community Savings Bankshares, Inc.
List below all other orders submitted by you or your (the "Company"), Community Savings, F.A. (the "Association"),
Associates (as defined) or by persons acting in concert with Community Savings Bankshares, Inc. (the "Mid-Tier Holding
you. Company") and ComFed, M.H.C. (the "MHC") of which such person
- ------------------------------------------------------------- is a director, officer, or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class
of equity securities, (ii) any trust or other estate in which
Name(s) of Associate(s) Amount Ordered such person has a substantial beneficial interest or as to
- ------------------------------------------------------------- which such person serves as trustee or in a similar capacity,
- ------------------------------------------------------------- provided, however, that such term shall not include any tax
- ------------------------------------------------------------- qualified employee stock benefit plan of the Company or the
- ------------------------------------------------------------- Association in which such person has a substantial beneficial
interest or serves as a trustee or in a similar fiduciary
capacity, and (iii) any relative or spouse of such person, or
any relative of such spouse, who has the same home as such
person or who is a director or officer of the Association,
the Company, the MHC, or the Mid-Tier Holding Company or any
of the subsidiaries of the foregoing.
</TABLE>
CERTIFICATION FORM
(This form must be dated and signed along with your dated and signed
Order Form on the reverse side.)
I ACKNOWLEDGE THAT THE SHARES OF COMMON STOCK, $1.00 PAR VALUE PER SHARE (THE
"COMMON STOCK") OF COMMUNITY SAVINGS BANKSHARES, INC. (THE "COMPANY"), THE
PROPOSED HOLDING COMPANY FOR COMMUNITY SAVINGS, F. A. (THE "ASSOCIATION"), ARE
NOT FEDERALLY INSURED AND ARE NOT GUARANTEED BY THE COMPANY, THE ASSOCIATION, OR
THE FEDERAL GOVERNMENT.
If anyone asserts that the shares of Common Stock are federally insured or
guaranteed, or are as safe as an insured deposit, I should call the Office of
Thrift Supervision's Southeast Regional Director, John Ryan, at (404) 888-0771.
I further certify that, before purchasing shares of Common Stock of the Company,
I received a copy of the Prospectus dated , 1998 which discloses
-------------
the nature of the shares of Common Stock being offered thereby and describes the
following risks involved in an investment in the Common Stock under the heading
"Risk Factors" beginning on page 25 of the Prospectus:
<TABLE>
<S> <C>
1. Potential Low Return on Equity Following the
Conversion; Uncertainty as to Future Growth
Opportunities.......................................... (Page XX)
2. Price of Common Stock Following the Conversion......... (Page XX)
3. Possible Dilution to Public Shareholders as a Result of
Purchase Limitations................................... (Page XX)
4. Intent to Remain Independent; Unsuitability as a
Short-Term Investment.................................. (Page XX)
5. Potential Effects of Changes in Interest Rates and the
Current Interest Rate Environment...................... (Page XX)
6. Risks Related to Commercial Real Estate Loans,
Multi-Family Residential Real Estate Loans,
Construction and Land Loans............................ (Page XX)
7. Strong Competition within the Association's Market
Area................................................... (Page XX)
8. Geographic Concentration of Loans...................... (Page XX)
9. Certain Anti-Takeover Provisions....................... (Page XX)
10. Regulatory Oversight and Legislation................... (Page XX)
11. Possible Increase in Number of Shares Issued in the
Conversion............................................. (Page XX)
12. Possible Dilutive Effect of Issuance of Additional
Shares................................................. (Page XX)
13. Increased Compensation Expense after the Conversion.... (Page XX)
14. Possible Adverse Income Tax Consequences............... (Page XX)
15. Year 2000 Compliance................................... (Page XX)
16. Irrevocability of Orders; Potential Delay in Completion
of Offerings........................................... (Page XX)
</TABLE>
<TABLE>
<S> <C>
- ------------------------------------------------------------ ------------------------------------------------------------
Signature Date Signature Date
- ------------------------------------------------------------ ------------------------------------------------------------
- ------------------------------------------------------------ ------------------------------------------------------------
Name (please print) Name (please print)
- ------------------------------------------------------------ ------------------------------------------------------------
(NOTE: ALL PARTIES NAMED AS REGISTERED OWNERS IN ITEM 8 ON THE REVERSE SIDE MUST SIGN THE CERTIFICATION FORM)
</TABLE>
<PAGE> 3
COMMUNITY SAVINGS BANKSHARES, INC. LOGO
9600 N. Alternate A1A, Palm Beach Gardens, FL 33410
P.O. Box 30729, Plam Beach Gardens, FL 33420
(561) 626-9778, or toll-free (888) 642-0084
ORDER FORM INSTRUCTIONS AND GUIDE
- --------------------------------------------------------------------------------
ORDER FORM INSTRUCTIONS
- --------------------------------------------------------------------------------
ITEM 1 - Fill in the number of shares of Community Savings Bankshares, Inc.
currently owned.
ITEM 2 AND 3 - Fill in the number of shares that you wish to purchase and the
total payment due. The amount due is determined by multiplying the number of
shares by the subscription price of $10.00 per share. The minimum purchase is 25
shares. For persons who do not currently own shares of Community Savings
Bankshares, Inc., the maximum purchase limitations generally are as follows: (i)
the maximum number of shares that any person (or persons on a single account)
may purchase in the Subscription Offering is 100,000 shares; and (ii) the
maximum number of shares that any person may purchase in each of the Community
Offering or the Eligible Public Shareholders Offering is 100,000 shares; and
(iii) the maximum number of aggregate shares that may be purchased in the
Offerings by any person together with associates of and persons acting in
concert with such person, when combined with Exchange Shares to be received by
such person, together with associates of and persons acting in concert with such
person, is 3% of the total shares issued in the Conversion. For a more detailed
explanation of stock purchase limitations, please refer to "The Conversion -
Limitations on Conversion Purchases in the Prospectus."
Community Savings, F. A. has reserved the right to reject any order received in
the Public Offering, in whole or in part.
ITEM 4 - Payment for shares may be made in cash (only if delivered by you in
person) or by check, bank draft, or money order payable to Community Savings
Bankshares, Inc. DO NOT MAIL CASH. If you choose to make a cash payment, take
your Stock Order Form, signed Certification Form, and payment in person to an
office of Community Savings, F. A. Your funds will earn interest until the stock
is issued at Community Savings, F. A.'s passbook rate.
ITEM 5 - To pay by withdrawal from a savings account or certificate of Community
Savings, F. A., insert the account number(s) and the amount(s) you wish to
withdraw from each account. If more than one signature is required to withdraw,
each must sign in the Signature box on the front of this Form. To withdraw from
an account with checking privileges, please write a check. No early withdrawal
penalty will be charged on funds used to purchase our stock. A hold will be
placed on the account(s) for the amount(s) you show. Payments will remain in
certificate account(s) until the stock offering closes and will continue to earn
interest at the account rate until then. However, if a partial withdrawal
reduces the balance of a certificate account to less than the applicable
minimum, the remaining balance will thereafter earn interest at the passbook
rate.
ITEM 6 - Please check this box if you were a depositor with at least $50.00 on
deposit on the Eligibility Record Date (June 30, 1997) and/or the Supplemental
Eligibility Record Date (September 30, 1998) and/or a depositor or borrower on
the Voting Record Date (_________, 1998) and list all the names on the
account(s) and all account number(s) of those accounts you had at these dates to
ensure proper identification of your purchase rights.
ITEMS 7 AND 8 - The stock transfer industry has developed a uniform system of
shareholder registrations that we will use in the issuance of Community Savings
Bankshares, Inc. common stock. Print the name(s) in which you want the stock
registered and the mailing address of the registration. Include the first name,
middle initial, and last name of the shareholder. Avoid the use of two initials.
Please omit words that do not affect ownership rights, such as "Mrs.", "Mr.",
"Dr.", "special account", etc.
Subscription rights are not transferable. If you are a qualified member, to
protect your priority over other purchasers as described in the Prospectus, you
must take ownership as your account relationship is established. If you, as a
qualified member, include a non-qualified member or a member in a lower priority
category on your stock order, your priority will be lowered or eliminated.
Enter the Social Security or Tax I.D. number of one registered owner. This
registered owner must be listed on the first "Name" line. Be sure to include
your telephone number because we will need to contact you if we cannot execute
your order as given. Review the Ownership Guide on the back of this page and
refer to the instructions for Uniform Gift to Minors/Uniform Transfer to Minors
and Fiduciaries.
ITEMS 9 AND 10 - See instructions on the form.
ITEM 11 - Be sure all required persons sign the front of the Order Form.
ITEM 12 - Be sure all parties registered in Item 8 of the Order Form read, date,
and sign the Certification Form on the reverse side of the Order Form.
<PAGE> 4
- --------------------------------------------------------------------------------
OWNERSHIP GUIDE
- --------------------------------------------------------------------------------
INDIVIDUAL
The stock is to be registered in an individual's name only. You may not list
beneficiaries for this ownership.
JOINT TENANTS
Joint tenants with rights of survivorship identifies two or more owners. When
stock is held by joint tenants with rights of survivorship, ownership
automatically passes to the surviving joint tenant(s) upon the death of any
joint tenant. You may not list beneficiaries for this ownership.
TENANTS IN COMMON
Tenants in common may also identify two or more owners. When stock is held by
tenants in common, upon the death of one co-tenant, ownership of the stock will
be held by the surviving co-tenant(s) and by the heirs of the deceased
co-tenant. All parties must agree to the transfer or sale of shares held by
tenants in common. You may not list beneficiaries for this ownership.
INDIVIDUAL RETIREMENT ACCOUNT
Individual retirement account ("IRA") holders may make stock purchases from
their deposits through a pre-arranged "trustee-to-trustee" transfer. Stock may
only be held in a self-directed IRA. Community Savings, F. A. has arranged to
use their in house (MORE TO COME HERE). Please contact the Stock Center if you
have any questions about your IRA account. There will be no early withdrawal or
IRS penalties incurred by properly executed transactions.
UNIFORM GIFT TO MINORS/UNIFORM TRANSFER TO MINORS
For residents of many states, stock may be held in the name of a custodian for
the benefit of a minor under the Uniform Transfer to Minors Act. For residents
in other states, stock may be held in a similar type of ownership under the
Uniform Gift to Minors Act of the individual states. For either ownership, the
minor is the actual owner of the stock with the adult custodian being
responsible for the investment until the minor reaches legal age.
Instructions: See your legal advisor if you are unsure about the correct
registration of your stock.
On the first "Name" line, print the first name, middle initial, and last name of
the custodian, with the abbreviation "CUST" after the name. Print the first
name, middle initial, and last name of the minor on the second "Name" line. Only
one custodian and one minor may be designated.
CORPORATION/PARTNERSHIP
Corporations/Partnerships may purchase stock. Please provide the
Corporation/Partnership's legal name and Tax I.D number. To have depositor
rights, the Corporation/Partnership must have an account in the legal name.
Please contact the Stock Center to verify depositor rights and purchase
limitations.
FIDUCIARY/TRUST
Generally, fiduciary relationships (such as Trusts, Estates, Guardianships,
etc.) are established under a form of trust agreement or are pursuant to a court
order. Without a legal document establishing a fiduciary relationship, your
stock may not be registered in a fiduciary capacity.
Instructions: On the first "Name" line, print the first name, middle initial,
and last name of the fiduciary if the fiduciary is an individual. If the
fiduciary is a corporation, list the corporate title on the first "Name" line.
Following the name, print the fiduciary "title" such as trustee, executor,
personal representative, etc.
One the second "Name" line, print either the name of the maker, donor or
testator OR the name of the beneficiary. Following the name, indicate the type
of legal document establishing the fiduciary relationship (agreement, court
order, etc.). In the blank after "Under Agreement Dated", fill in the date of
the document governing the relationship. The date of the document need not be
provided for a trust created by a will.
An example of fiduciary ownership of stock in the case of a trust is: John D.
Smith, Trustee for Thomas A. Smith Under Agreement Dated 06/09/87.
<PAGE> 1
STOCK
OFFERINGS
QUESTIONS
AND
ANSWERS
COMMUNITY SAVINGS BANKSHARES, INC.
(LOGO)
<PAGE> 2
STOCK OFFERINGS
QUESTIONS & ANSWERS
FACTS ABOUT THE PLAN OF CONVERSION & REORGANIZATION
THE BOARDS OF DIRECTORS OF COMMUNITY SAVINGS BANKSHARES, INC. (THE "MID-TIER
HOLDING COMPANY"), ITS WHOLLY OWNED SUBSIDIARY COMMUNITY SAVINGS, F. A. (THE
"ASSOCIATION") AND COMFED, M. H. C. (THE "MHC") UNANIMOUSLY ADOPTED A PLAN OF
CONVERSION AND AGREEMENT AND PLAN OF REORGANIZATION (THE "PLAN") TO CONVERT FROM
THE TWO-TIER MUTUAL HOLDING COMPANY STRUCTURE TO A STOCK HOLDING COMPANY
STRUCTURE. THE NEWLY FORMED DELAWARE CHARTERED STOCK HOLDING COMPANY FOR THE
ASSOCIATION WILL ALSO BE CALLED COMMUNITY SAVINGS BANKSHARES, INC. (THE
"COMPANY"). WE REFER TO THIS AS THE "CONVERSION."
THIS BROCHURE ANSWERS SOME OF THE MOST FREQUENTLY ASKED QUESTIONS ABOUT THE
CONVERSION AND ABOUT YOUR OPPORTUNITY TO INVEST IN THE NEWLY FORMED COMPANY
THROUGH THE SUBSCRIPTION OFFERING, THE ELIGIBLE PUBLIC SHAREHOLDER OFFERING, AND
THE COMMUNITY OFFERING (COLLECTIVELY, THE "OFFERINGS").
INVESTMENT IN THE STOCK OF THE COMPANY INVOLVES CERTAIN RISKS. FOR A DISCUSSION
OF THESE RISKS AND OTHER FACTORS, INVESTORS ARE URGED TO READ THE ACCOMPANYING
PROSPECTUS, ESPECIALLY THE DISCUSSION UNDER THE HEADING "RISK FACTORS."
WHY ARE THE MID-TIER HOLDING COMPANY, THE ASSOCIATION AND THE MHC REORGANIZING
INTO THE STOCK HOLDING COMPANY STRUCTURE?
The stock holding company form of ownership is used by most business
corporations and an increasing number of banks and savings institutions. Through
the sale of its common stock, the Company will raise additional capital enabling
it to:
- - Purchase all the capital stock of the Association, contributing a
portion of the proceeds raised from the sale of the Company's common
stock in the Offerings. The Association, in turn, will utilize these
funds to support and broaden the range of its products and services
offered;
- - Consider future expansion of operations of the Association as well as
possible diversification into other banking related businesses; and
- - Allow customers of the Association to subscribe to purchase stock and
share in the Company's and the Association's future. Additionally,
current shareholders of the Mid-Tier Holding Company will receive
shares of the Company's common stock in exchange for their current
shares.
WILL THE CONVERSION AFFECT ANY OF MY DEPOSIT ACCOUNT(S) OR LOAN(S)?
No. The Conversion will have no effect on the balance or terms of any deposit
account or loan, and your deposits will continue to be federally insured by the
Federal Deposit Insurance Corporation ("FDIC") to the maximum legal limit. Your
deposit account will not be converted to stock. The common stock purchased from
the Company,
<PAGE> 3
however, cannot and will not be insured by the FDIC or any other governmental
agency.
WHO IS ELIGIBLE TO PURCHASE STOCK IN THE OFFERINGS?
Depositors and borrowers of Community Savings as of specified record dates, the
Association's Employee Stock Ownership Plan, and the directors, officers and
employees of the Association may purchase stock in the Subscription Offering.
The Mid-Tier Holding Company's public shareholders as of ____, 1998 may purchase
shares in the Eligible Public Shareholders Offering. The Company may offer and
sell any remaining shares to certain members of the general public in the
Community Offering.
HOW MANY SHARES OF STOCK ARE BEING OFFERED AND AT WHAT PRICE?
The Company is offering up to 6,590,357 shares (subject to adjustment up to
7,578,961 shares) of common stock at a price of $10.00 per share through the
Offerings. In addition, common stock of the Mid-Tier Holding Company held by
public shareholders will be exchanged for shares of the Company pursuant to an
Exchange Ratio as described below. Following the consummation of the Conversion,
both the shares purchased in the Offerings and the shares exchanged from the
Mid-Tier Holding Company will be treated as the same common stock ("Company
Common Stock").
I CURRENTLY OWN COMMON STOCK IN THE MID-TIER HOLDING COMPANY. HOW WILL MY SHARES
BE EXCHANGED?
Each share of the Mid-Tier Holding Company common stock will automatically be
converted into shares of Company Common Stock according to a ratio (the
"Exchange Ratio"). The Exchange Ratio insures that you will retain nearly the
same aggregate percentage ownership in the Company as you had in the Mid-Tier
Holding Company prior to the Conversion. This percentage will be adjusted
pursuant to the Office of Thrift Supervision's policy to reflect: (a) any change
in the assets of the MHC (other than the common stock of the Mid-Tier Holding
Company held thereby), (b) cash awarded in lieu of fractional shares, (c)
certain dividends waived by the MHC, and (d) any options to purchase Mid-Tier
Holding Company stock exercised prior to the completion of the Conversion.
Depending on the amount of the Company Common Stock sold in the Offerings, the
Exchange Ratio will range from approximately 1.8203 to 2.4628 (up to 2.8322 if
the maximum number, as adjusted, of shares is sold).
WHEN WILL I RECEIVE MY COMPANY COMMON STOCK IN EXCHANGE FOR THE SHARES I
CURRENTLY OWN?
Current holders of the common stock of the Mid-Tier Holding Company will be sent
transmittal forms immediately following the completion of the Conversion. When
you receive the transmittal form, you will need to send your shares of the
Mid-Tier Holding Company to the address indicated on the transmittal form.
DO NOT FORWARD SHARES TO THE ASSOCIATION. MID-TIER HOLDING COMPANY SHARES
SUBMITTED FOR EXCHANGE MUST BE SENT TO THE DESIGNATED EXCHANGE AGENT ACCOMPANIED
BY THE TRANSMITTAL FORM.
<PAGE> 4
HOW MUCH STOCK MAY I PURCHASE IN THE CONVERSION?
The minimum order is 25 shares. The maximum purchase limitation for any person
in the Subscription Offering is generally 100,000 shares. In addition, the
maximum purchase limitation for any person in the Community Offering or Eligible
Public Shareholders Offering is 100,000 shares. No person together with persons
acting in concert may purchase in the Offerings more than the number of shares
of Conversion Stock that, when combined with Exchange Shares received by such
person or group acting in concert, aggregate more than 3% of the total number of
shares of Company Common Stock issued in the Conversion (281,775 if the minimum
number of shares is sold and 381,225 shares if the maximum number of shares is
sold).
DO I HAVE TO BUY STOCK?
No, you do not have to buy stock. The Conversion, however, will allow the
Association's eligible depositors and borrowers, employees, officers and
directors, and Eligible Public Shareholders an opportunity to subscribe to buy
stock. These individuals have an opportunity to become shareholders of the
Company and to share in the Company's and the Association's future.
HOW DO I ORDER STOCK IN THE OFFERINGS?
You must complete the stock order form and certification (the "Order Form") by
following the instructions included in your packet of information. Your order
must be received at the Stock Center or one of the branches of the Association
by 12:00 noon, Eastern Time on ___________, 1998.
IF I PLACE AN ORDER FOR STOCK, AM I GUARANTEED TO RECEIVE THAT STOCK?
No. Placing an order for stock does not guarantee that you will receive any or
all of your order for shares. Orders are filled on a priority basis. For
detailed information on the preference categories, refer to the section "The
Conversion" in the Prospectus.
HOW MAY I PAY FOR MY SHARES OF STOCK?
You must include payment by check or money order with your Order Form. Cash will
be accepted only if delivered in person to a branch of the Association where it
will be converted into a check. The Association will pay interest on these funds
at the passbook rate.
You may also authorize us to withdraw funds from your deposit account or
certificate of deposit at the Association for the amount of funds you specify
for payment. The Association is waiving all of its early withdrawal penalties on
certificates of deposit where the funds are used to subscribe for stock.
NOTE: YOU WILL NOT HAVE ACCESS TO THESE FUNDS FROM THE DAY WE RECEIVE YOUR ORDER
UNTIL THE COMPLETION OR TERMINATION OF THE CONVERSION.
MAY I PURCHASE SHARES USING FUNDS IN MY IRA ACCOUNT AT THE ASSOCIATION?
Federal regulations do not permit the purchase of stock in your existing IRA
account at the Association. However, stock may be purchased in a SELF-DIRECTED
IRA. To accommodate our IRA depositors, we have made arrangements to have funds
transferred into self-directed IRA accounts
<PAGE> 5
to allow for such purchases. Please call our Stock Center as soon as possible at
(561) 626-9778 or toll-free at (888) 642-0084 for additional information.
WILL THE STOCK BE INSURED?
No. Like any other common stock, the Company Common Stock will not be insured by
the FDIC, the Bank Insurance Fund, the Savings Association Insurance Fund or any
other governmental agency.
WILL DIVIDENDS BE PAID ON THE STOCK?
The Board of Directors of the Company intends to declare cash dividends on the
Common Stock commencing with the first quarter following the consummation of the
Conversion. The Mid-Tier Holding Company and the Association have historically
paid a regularly quarterly dividend. For the quarters ended March 31, 1998 and
June 30, 1998, that dividend was $.225 per share. The Company intends to pay a
quarterly dividend on its stock at a rate equal to no less than $.225 per share
on the common stock of the Mid-Tier Holding Company. For example, based on an
Exchange Ratio of 2.1416, the cash dividend following the consummation of the
conversion would be approximately $.1051 per share per quarter.
DOES THE COMPANY HAVE A DIVIDEND REINVESTMENT PROGRAM ("DRIP")?
Yes. The Company offers a Dividend Reinvestment Plan which enables shareholders
to purchase additional shares of the Common Stock without having to pay
brokerage commissions or service charges. Shareholders who enroll in the DRIP
can purchase shares of the Common Stock with dividends that otherwise would have
been paid in cash, and with any additional cash investments. Information about
the DRIP will be distributed by the plan administrator, Mellon Securities Trust
Company, after the Conversion is completed.
HOW WILL THE STOCK BE TRADED?
Currently, shares of the Mid-Tier Holding Company are trading under the symbol
"CMSV." After the Reorganization, all shares purchased in the Offering as well
as the exchange shares received for Mid-Tier Holding Company Common Stock will
trade together under the same symbol, "CMSV." However, no assurances can be
given that an active and liquid market will develop.
DO I PAY A COMMISSION?
No. You will not be charged a commission or fee on the purchase of shares of
Company Common Stock in the Offerings.
SHOULD I VOTE IN FAVOR OF THE PLAN OF CONVERSION?
Yes. The Boards of Directors of the Association, the Company, and the MHC
recommend that you vote in favor of the Conversion. Your "FOR" vote is very
important!
WHY DID I GET SEVERAL PROXY CARDS?
If you have more than one account, you could receive more than one proxy card,
depending on the ownership structure of your accounts. In addition, if you
currently own stock in the Mid-Tier Holding Company, you would receive
additional proxy cards. PLEASE VOTE, SIGN AND RETURN ALL PROXY CARDS TODAY!
<PAGE> 6
HOW MANY VOTES DO I HAVE?
Every depositor entitled to vote may cast one vote for each $100, or fraction
thereof, on deposit as of the voting record date. In addition, borrowers of the
Association, as of October 21, 1994, may cast one vote to the extent they are
still borrowers of the Association. The maximum is 1,000 votes. We must receive
affirmative votes from a majority of members of the MHC in order to approve the
Plan.
In addition, the Plan must be approved by the current shareholders of the
Mid-Tier Holding Company. Every person who owns stock in the Mid-Tier Holding
Company may cast one vote for each share owned as of ____, 1998. We must receive
affirmative votes from two-thirds of the total outstanding shares (including
those held by the MHC) as well as a majority of the votes cast (not including
the MHC) in order to approve the Plan.
MAY I VOTE IN PERSON AT THE SPECIAL MEETINGS?
Yes, but we would still like you to sign and mail your proxy card today. If you
decide to revoke your proxy, you may do so by voting at the Special Meeting of
Members to be held at ____ p.m. on __________, 1998 or the Special Meeting of
Shareholders to be held at ____ p.m. on _____, 1998.
FOR ADDITIONAL INFORMATION YOU MAY CALL OUR STOCK CENTER AT (561) 626-9778 OR
TOLL-FREE AT (888) 642-0084, BETWEEN 9:00 A.M. AND 5:00 P.M., EASTERN TIME,
MONDAY THROUGH FRIDAY.
The shares of common stock offered in the Conversion are not savings accounts or
deposits and are not insured by the FDIC, the Bank Insurance Fund, the Savings
Association Insurance Fund or any other governmental agency.
This is not an offer to sell or a solicitation of an offer to buy stock. The
offer is made only by the Prospectus accompanied by the Order Form.
<PAGE> 7
PROXY GRAM
We recently forwarded to you information advising that Community Savings, F.
A., Community Savings Bankshares, Inc., and ComFed, M. H. C. had received
regulatory approval to reorganize into the stock holding company form of
ownership.
Your vote on our Plan of Conversion and Agreement and Plan of Reorganization
(the "Plan") has not yet been received. FAILURE TO VOTE HAS THE SAME EFFECT AS
VOTING AGAINST THE PLAN. ALL VOTES MUST BE RECEIVED BY _____________, 1998.
Your vote is important to us, and we, therefore, are requesting that you sign
the enclosed proxy card and return it promptly in the enclosed postage-paid
envelope.
Voting for the Plan does not obligate you to purchase stock. Additionally,
approval of the Plan will not affect the terms or insurance of your accounts or
loans at Community Savings, F. A.
The Boards of Directors unanimously recommend that you vote "FOR" the Plan.
COMMUNITY SAVINGS, F. A., COMMUNITY SAVINGS BANKSHARES, INC., AND COMFED, M. H.
C.
James B. Pittard, Jr.
President and Chief Executive Officer
If you have already returned your proxy cards, please accept our thanks and
disregard this request. For further information call our Stock Center at (xxx)
xxx-xxxx or toll-free at (888) xxx-xxxx.
THE COMMON STOCK IS NOT A DEPOSIT OR SAVINGS ACCOUNT AND IS NOT FEDERALLY
INSURED OR GUARANTEED. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF
AN OFFER TO BUY STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY
THE STOCK ORDER FORM AND CERTIFICATION.
<PAGE> 8
MEETING INVITATION
COMMUNITY SAVINGS SHARE IN
BANKSHARES, INC. OUR FUTURE
YOU ARE CORDIALLY INVITED TO A COMMUNITY INVESTOR MEETING & RECEPTION TO LEARN
ABOUT THE PLAN OF CONVERSION AND RELATED OFFERINGS OF COMMUNITY SAVINGS
BANKSHARES, INC. (THE NEWLY FORMED DELAWARE CORPORATION AND PROPOSED
HOLDING COMPANY OF COMMUNITY SAVINGS, F. A.) COMMON STOCK.
SEE THE REVERSE SIDE OF THIS CARD FOR THE DATES, TIMES AND
LOCATIONS OF THESE MEETINGS
SENIOR EXECUTIVES OF COMMUNITY SAVINGS WILL PRESENT INFORMATION AND ANSWER YOUR
QUESTIONS ABOUT COMMUNITY SAVINGS' PLAN OF CONVERSION AND AGREEMENT AND PLAN OF
REORGANIZATION AND RELATED STOCK OFFERINGS. YOU WILL ALSO BE PRESENTED WITH
INFORMATION REGARDING COMMUNITY SAVINGS' BUSINESS FOCUS AND
RESULTS OF OPERATIONS.
SEATING IS LIMITED
PLEASE CALL THE STOCK CENTER TO MAKE YOUR RESERVATION.
(XXX) XXX-XXXX
(888) XXX-XXXX
THIS INVITATION IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY THESE SECURITIES. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY
THE ORDER FORM. THE SHARES OF COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY.
<PAGE> 9
MEETING INVITATION
COMMUNITY SAVINGS SHARE IN
BANKSHARES, INC. OUR FUTURE
COMMUNITY INVESTOR MEETING SCHEDULE
PLEASE CALL THE STOCK CENTER TO MAKE YOUR RESERVATION: (XXX) XXX-XXXX
OR TOLL FREE (888) XXX-XXXX
MEETING LOCATIONS AND TIMES GO HERE.
THIS INVITATION IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY THESE SECURITIES. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY
THE ORDER FORM. THE SHARES OF COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY.
<PAGE> 10
ADS WILL RUN ??? TIMES IN EACH COUNTY. AD WILL BE 6 7/16 X 10(3X10)
- --------------------------------------------------------------------
COMMUNITY SAVINGS SHARE IN
BANKSHARES, INC. OUR FUTURE
Community Savings Bankshares, Inc., a newly formed Delaware corporation and the
proposed holding company for Community Savings, F. A. is offering up to
7,753,143 shares of common stock.
YOU ARE INVITED...
to a Community Investor Meeting and Reception
Senior executives of Community Savings, F. A. are hosting Community Investor
Meetings. In addition to learning details about the stock offering, you'll be
presented with information about Community Savings' business focus and results
of operations.
TBD DATE
TBD PLACE
TBD TIME
To receive a copy of the Prospectus or to make a reservation to attend one of
the meetings, please call the Stock Center at (xxx) xxx-xxx or toll-free (888)
xxx-xxxx from 9:00 a.m. to 5:00 p.m., Monday through Friday.
THIS INVITATION IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY THESE SECURITIES. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY
THE ORDER FORM. THE SHARES OF COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY.
<PAGE> 11
[Member Letter - Community Savings, F. A. letterhead]
_____________, 1998
Dear Member:
I am pleased to inform you that the Boards of Directors of Community
Savings, F. A. (the "Association"), Community Savings Bankshares, Inc. (the
"Mid-Tier Holding Company") and ComFed, M. H. C. (the "MHC") have adopted a Plan
of Conversion and Agreement and Plan of Reorganization (the "Plan"). Pursuant to
the Plan, the Association will become a subsidiary of a newly formed Delaware
stock corporation which will also be called Community Savings Bankshares, Inc.
(the "Company"), and the existing shareholders of the Mid-Tier Holding Company
(other than the MHC) will be issued shares of the common stock of the Company
(the "Company Common Stock") in exchange for their shares of common stock of the
Mid-Tier Holding Company (the "Exchange"). The Exchange will result in those
shareholders owning in the aggregate approximately the same percentage of the
Company as they had owned in the Mid-Tier Holding Company, subject to certain
adjustments. In addition to the shares of Company Common Stock to be issued in
the Exchange, the Company is also offering up to 6,590,357 shares of common
stock to the MHC's members, shareholders of the Mid-Tier Holding Company and
certain members of the public (collectively, the "Conversion"). Consummation of
the Conversion is subject to (i) the approval of the members of the MHC, (ii)
the approval of the shareholders of the Mid-Tier Holding Company and (iii)
various regulatory approvals.
Your deposits and loans with the Association will not change due to the
Conversion. There will be no change in the balance, interest rate or maturity of
deposits or loans because of the Conversion. Your deposits will continue to be
insured by the Federal Deposit Insurance Corporation to the maximum amount
permitted by law to the same extent as prior to the Conversion.
We are asking depositors of the Association as of _____, 1998, the
Voting Record Date, as well as borrowers of the Association as of October 21,
1994 who continue to be borrowers and/or depositors as of the Special Meeting of
Members, to vote "FOR" the Plan. If you and/or members of your family have
multiple accounts with the Association, you may receive more than one proxy
card. PLEASE VOTE ALL PROXY CARDS FOUND IN THE FRONT OF THE MAILING ENVELOPE and
return them today in the enclosed postage-paid envelope, even if you plan to
attend the Special Meeting of Members to be held on ________, 1998 at ____.m.
Your vote "FOR" the Conversion will not require you to buy any stock. A Proxy
Statement and Prospectus relating to the Conversion is enclosed.
As part of this process, the Company is offering shares of its common
stock in accordance with federal regulations. You may take advantage of your
nontransferable right to purchase shares directly from the Company, without
commission or fee. We have enclosed a package of information, including a stock
order form and certification (the "Order Form") and a Prospectus, which will
help you learn more about investing in Company Common Stock. Please read and
review the materials carefully before making an investment decision. A PROPERLY
EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE RECEIVED AT THE STOCK CENTER OR
AT ONE OF THE BRANCHES OF THE ASSOCIATION BY 12:00 NOON, EASTERN TIME, ON _____,
1998.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday
through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE ORDER FORM.
<PAGE> 12
[Member Letter - Community Savings, F. A. letterhead]
,1998
-------------
Dear Member:
I am pleased to inform you that the Boards of Directors of Community
Savings, F. A. (the "Association"), Community Savings Bankshares, Inc. (the
"Mid-Tier Holding Company") and ComFed, M. H. C. (the "MHC") have adopted a
Plan of Conversion and Agreement and Plan of Reorganization (the "Plan").
Pursuant to the Plan, the Association will become a subsidiary of a newly
formed Delaware stock corporation which will also be called Community Savings
Bankshares, Inc. (the "Company"), and the existing shareholders of the Mid-Tier
Holding Company (other than the MHC) will be issued shares of the common stock
of the Company (the "Company Common Stock") in exchange for their shares of
common stock of the Mid-Tier Holding Company (the "Exchange"). The Exchange
will result in those shareholders owning in the aggregate approximately the
same percentage of the Company as they had owned in the Mid-Tier Holding
Company, subject to certain adjustments. In addition to the shares of Company
Common Stock to be issued in the Exchange, the Company is also offering up to
6,590,357 shares of common stock to the MHC's members, shareholders of the
Mid-Tier Holding Company and certain members of the public (collectively, the
"Conversion"). Consummation of the Conversion is subject to (i) the approval of
the members of the MHC, (ii) the approval of the shareholders of the Mid-Tier
Holding Company and (iii) various regulatory approvals.
Your deposits and loans with the Association will not change due to the
Conversion. There will be no change in the balance, interest rate or maturity
of deposits or loans because of the Conversion. Your deposits will continue to
be insured by the Federal Deposit Insurance Corporation to the maximum amount
permitted by law to the same extent as prior to the Conversion.
We are asking depositors of the Association as of _____, 1998, the
Voting Record Date, as well as borrowers of the Association as of October 21,
1994 who continue to be borrowers and/or depositors as of the Special Meeting
of Members, to vote "FOR" the Plan. If you and/or members of your family have
multiple accounts with the Association, you may receive more than one proxy
card. PLEASE VOTE ALL PROXY CARDS FOUND IN THE FRONT OF THE MAILING ENVELOPE
and return them today in the enclosed postage-paid envelope, even if you plan
to attend the Special Meeting of Members to be held on ________, 1998 at
____.m. Your vote "FOR" the Conversion will not require you to buy any stock. A
Proxy Statement and Prospectus relating to the Conversion is enclosed.
As part of this process, the Company is offering shares of its common
stock in accordance with federal regulations. You may take advantage of your
nontransferable right to purchase shares directly from the Company, without
commission or fee. We have enclosed a package of information, including a stock
order form and certification (the "Order Form") and a Prospectus, which will
help you learn more about investing in Company Common Stock. Please read and
review the materials carefully before making an investment decision. A PROPERLY
EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE RECEIVED AT THE STOCK CENTER OR
AT ONE OF THE BRANCHES OF THE ASSOCIATION BY 12:00 NOON, EASTERN TIME, ON
_____, 1998.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time,
Monday through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER
GOVERNMENTAL AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE
ORDER FORM.
<PAGE> 13
[Closed Account Letter - Community Savings, F. A. Letterhead]
______________, 1998
Dear Friend:
I am pleased to inform you that the Boards of Directors of Community
Savings, F. A. (the "Association"), Community Savings Bankshares, Inc. (the
"Mid-Tier Holding Company") and ComFed, M. H. C. (the "MHC") have adopted a Plan
of Conversion and Agreement and Plan of Reorganization (the "Plan"). Pursuant to
the Plan, the Association will become a subsidiary of a newly formed Delaware
stock corporation which will also be called Community Savings Bankshares, Inc.
(the "Company"), and the existing shareholders of the Mid-Tier Holding Company
(other than the MHC) will be issued shares of the common stock of the Company
(the "Company Common Stock") in exchange for their shares of common stock of the
Mid-Tier Holding Company (the "Exchange"). The Exchange will result in those
shareholders owning in the aggregate approximately the same percentage of the
Company as they had owned in the Mid-Tier Holding Company, subject to certain
adjustments. In addition to the shares of Company Common Stock to be issued in
the Exchange, the Company is also offering up to 6,590,357 shares of common
stock to the MHC's members, shareholders of the Mid-Tier Holding Company and
certain members of the public (collectively, the "Conversion"). Consummation of
the Conversion is subject to (i) the approval of the members of the MHC, (ii)
the approval of the shareholders of the Mid-Tier Holding Company and (iii)
various regulatory approvals.
As part of the Conversion, the Company is offering shares of its common
stock in accordance with federal regulations. Because you had a deposit account
with the Association as of either June 30, 1997 or September 30, 1998, but
closed the account prior to __________, 1998, you are entitled to purchase the
common stock being offered but may not vote on the Plan. You may take advantage
of your nontransferable right to purchase shares directly from the Company,
without paying a commission or fee. We have enclosed a package of information,
including a stock order form and certification (the "Order Form") and a
Prospectus, which will help you learn more about investing in Company Common
Stock. Please read and review the materials carefully before making an
investment decision. A PROPERLY EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE
RECEIVED AT THE STOCK CENTER OR AT ONE OF THE BRANCHES OF THE ASSOCIATION BY
12:00 NOON, EASTERN TIME, ON _____, 1998.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday
through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE ORDER FORM.
<PAGE> 14
(Prospective Investor Letter - Community Savings, F. A. letterhead)
, 1998
---------
Dear Prospective Investor:
I am pleased to announce that Community Savings, F. A. (the
"Association"), its mutual holding company, ComFed, M. H. C. (the "MHC") and
Community Savings Bankshares, Inc. (the "Mid-Tier Holding Company") are
converting and reorganizing into the stock holding company structure (the
"Conversion"). In conjunction with this Conversion, Community Savings
Bankshares, Inc. (the "Company"), a newly formed Delaware stock corporation for
the Association, is offering shares of common stock to be purchased in certain
offerings.
We have enclosed the following materials that will help you learn more
about investing in the common stock of the Company. Please read and review the
materials carefully before making an investment decision.
PROSPECTUS: This document provides detailed information about the
proposed stock offering and about the Association's operations.
QUESTIONS AND ANSWERS: Key questions and answers about the stock
offering are found in this pamphlet.
INVITATION: We are hosting informational community meetings where you
can learn more about the Conversion and stock offerings. Please call
the Stock Center to reserve a seat.
STOCK ORDER FORM AND CERTIFICATION (the "Order Form"): This form is
used to purchase stock by properly executing and returning it with your
payment to the Stock Center in the enclosed business reply envelope. A
PROPERLY EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE RECEIVED AT
THE STOCK CENTER OR AT ONE OF THE BRANCHES OF THE ASSOCIATION BY 12:00
NOON, EASTERN TIME, ON _____, 1998.
We invite you to place an order for stock of the Company. Through this
offering, you have the opportunity to buy stock directly from the Company
without paying a commission or fee.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time,
Monday through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER
GOVERNMENTAL AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE
ORDER FORM.
<PAGE> 15
[Broker Dealer Letter - FBR Letterhead]
_____, 1998
To Members and Friends of Community Savings, F. A. and Shareholders of Community
Savings Bankshares, Inc.:
Friedman, Billings, Ramsey & Co., Inc., a member of the National
Association of Securities Dealers, is assisting Community Savings, F. A. (the
"Association"), ComFed, M. H. C., and The Association's mid-tier holding company
with their conversion and reorganization into the stock holding company
structure ("Conversion"). In connection with the Conversion, Community Savings
Bankshares, Inc. (the "Company"), a newly formed Delaware corporation, which is
the proposed holding company for the Association, is offering shares of common
stock to be sold in a stock offering.
At the request of the Company, we are enclosing materials explaining
this process and your opportunity to invest in shares of the Company's common
stock being offered to customers, shareholders and the community through
_________1998. Please read the enclosed offering materials carefully. The
Company has asked us to forward these documents to you in view of certain
requirements of the securities laws in your state.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
___________,______,FL zipcode between 9:00 a.m. and 5:00 p.m., Eastern Time,
Monday through Friday.
Very truly yours,
Friedman, Billings, Ramsey & Co., Inc.
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE ORDER FORM.
<PAGE> 16
(Shareholder Letter- STREET HOLDERS#1- Mid-Tier letterhead)
______________, 1998
Dear Shareholder:
I am pleased to inform you that the Boards of Directors of Community
Savings, F. A. (the "Association"), Community Savings Bankshares, Inc. (the
"Mid-Tier Holding Company") and ComFed, M. H. C. (the "MHC") have adopted a Plan
of Conversion and Agreement and Plan of Reorganization (the "Plan"). Pursuant to
the Plan, the Association will become a subsidiary of a newly formed Delaware
stock corporation which will also be called Community Savings Bankshares, Inc.
(the "Company"), and the existing shareholders of the Mid-Tier Holding Company
(other than the MHC) will be issued shares of the common stock of the Company
(the "Company Common Stock") in exchange for common stock of the Mid-Tier
Holding Company (the "Exchange"). The Exchange will result in those shareholders
owning in the aggregate approximately the same percentage of the Company as they
had owned in the Mid-Tier Holding Company, subject to certain adjustments. In
addition to the shares of Company Common Stock to be issued in the Exchange, the
Company is also offering up to 6,590,357 shares of common stock to the MHC's
members, shareholders of the Mid-Tier Holding Company and certain members of the
public (collectively, the "Conversion"). Consummation of the Conversion is
subject to (i) the approval of the members of the MHC, (ii) the approval of the
shareholders of the Mid-Tier Holding Company and (iii) various regulatory
approvals.
We are asking shareholders of the Mid-Tier Holding Company as of
__________,1998, the Voting Record Date, to vote "FOR" the Plan. If you and/or
members of your family hold stock in different names, you may receive more than
one proxy mailing. PLEASE VOTE ALL PROXY CARDS RECEIVED AND RETURN THEM TODAY IN
THE ENCLOSED POSTAGE-PAID envelope even if you plan on attending the Special
Meeting of Shareholders to be held on ________, 1998 at ______.m. Your vote
"FOR" the Conversion will not require you to buy any additional stock in the
Conversion. A Proxy Statement and Prospectus relating to the Conversion is
enclosed.
We have enclosed the following materials that will help you learn more
about the Conversion. Please read and review the materials carefully before
making an investment decision.
PROSPECTUS: This document provides detailed information about the
Association's operations and the proposed stock offering.
QUESTIONS AND ANSWERS BROCHURE: Key questions and answers about the
stock offering are found in this pamphlet.
INVITATION: We are hosting informational community meetings where you
can learn more about the Conversion and stock offerings. Please call
the Stock Center to reserve a seat in the meeting.
We are inviting our customers, existing shareholders and the general
public to place orders for stock of the Company. Through this offering you have
the opportunity to buy additional stock directly from the Company without paying
a commission or fee. YOU MAY OBTAIN A STOCK ORDER FORM AND CERTIFICATION (THE
"ORDER FORM") BY CONTACTING THE STOCK CENTER AT (XXX) XXX-XXXX OR TOLL-FREE
(888) XXX-XXXX. A PROPERLY EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE
RECEIVED AT THE STOCK CENTER OR AT ONE OF THE BRANCHES OF THE ASSOCIATION BY
12:00 NOON, EASTERN TIME, ON ____, 1998.
If you have any questions about the Conversion, please call one of the
above numbers or visit the Stock Center located at ______,_____,FL, _zipcode_
between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE ORDER FORM.
<PAGE> 17
(Shareholder Letter REGISTERED HOLDERS- Mid-tier letterhead)
, 1998
----------
Dear Shareholder:
I am pleased to inform you that the Boards of Directors of Community
Savings, F. A. (the "Association"), Community Savings Bankshares, Inc. (the
"Mid-Tier Holding Company") and ComFed, M. H. C. (the "MHC") have adopted a
Plan of Conversion and Agreement and Plan of Reorganization (the "Plan").
Pursuant to the Plan, the Association will become a subsidiary of a newly
formed Delaware stock corporation which will also be called Community Savings
Bankshares, Inc. (the "Company"), and the existing shareholders of the Mid-Tier
Holding Company (other than the MHC) will be issued shares of the common stock
of the Company (the "Company Common Stock") in exchange for common stock of the
Mid-Tier Holding Company (the "Exchange"). The Exchange will result in those
shareholders owning in the aggregate approximately the same percentage of the
Company as they had owned in the Mid-Tier Holding Company, subject to certain
adjustments. In addition to the shares of Company Common Stock to be issued in
the Exchange, the Company is also offering up to 6,590,357 shares of common
stock to the Association's members, shareholders of the Mid-Tier Holding
Company and certain members of the public (collectively, the "Conversion").
Consummation of the Conversion is subject to (i) the approval of the members of
the MHC, (ii) the approval of the shareholders of the Mid-Tier Holding Company
and (iii) various regulatory approvals.
We are asking shareholders of The Mid-Tier Holding Company as of
__________,1998, the Voting Record Date, to vote "FOR" the Plan. If you and/or
members of your family hold stock in different names, you may receive more than
one proxy mailing. PLEASE VOTE ALL PROXY CARDS RECEIVED AND RETURN THEM TODAY
IN THE ENCLOSED POSTAGE-PAID envelope even if you plan on attending the Special
Meeting of Shareholders to be held on ________-, 1998 at ________.m. Your vote
"FOR" the Conversion will not require you to buy any additional stock in the
Conversion. A Proxy Statement and Prospectus relating to the Conversion is
enclosed.
We have enclosed the following materials that will help you learn more
about investing in the common stock of the Company. Please read and review the
materials carefully before making an investment decision.
PROSPECTUS: This document provides detailed information about the
Association's operations and the proposed stock offering.
QUESTIONS AND ANSWERS BROCHURE: Key questions and answers about the
stock offering are found in this pamphlet.
INVITATION: We are hosting informational community meetings where you
can learn more about the Conversion and stock offerings. Please call
the Stock Center to reserve a seat.
STOCK ORDER FORM AND CERTIFICATION (the "Order Form"): This form is
used to purchase stock by properly executing and returning it with your
payment to the Stock Center in the enclosed postage-paid envelope. A
PROPERLY EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE RECEIVED AT
THE STOCK CENTER OR AT ONE OF THE BRANCHES OF THE ASSOCIATION BY 12:00
NOON, EASTERN TIME, ON _____, 1998.
We are inviting our customers, existing shareholders and the general
public to become shareholders of the Company. Through this offering you have
the opportunity to buy additional stock directly from the Company without
paying a commission or fee.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time,
Monday through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER
GOVERNMENTAL AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE
ORDER FORM.
<PAGE> 18
(Shareholder Letter- NoBo's - 2nd mailing-Mid-Tier Letterhead)
___________, 1998
Dear Shareholder:
Under separate cover on this date, we forwarded to you information
regarding Community Savings, F. A. (the "Association"), its mutual holding
company, ComFed, M. H. C. (the "MHC"), and Community Savings Bankshares, Inc.
(the "Mid-Tier Holding Company") and their conversion and reorganization into
the stock holding company structure (the "Conversion"). In conjunction with the
Conversion, Community Savings Bankshares, Inc. (the "Company"), a newly formed
Delaware corporation which is the proposed holding company for the Association,
is offering shares of common stock in certain offerings.
As a result of certain requirements, we could not forward a stock order
form and certification (the "Order Form") with the other packet of materials.
They are enclosed herein, along with a Prospectus and additional information.
A PROPERLY EXECUTED ORDER FORM AND PAYMENT IN FULL MUST BE RECEIVED AT
THE STOCK CENTER OR AT ONE OF THE BRANCHES OF THE ASSOCIATION BY 12:00 NOON,
EASTERN TIME, ON _____, 1998.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday
through Friday.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE ORDER FORM.
<PAGE> 19
(Dear Member "Dark Blue Sky" & Foreign Accounts - Mid-Tier letterhead)
___________,1998
Dear Member:
I am pleased to inform you that the Boards of Directors of Community
Savings, F. A. (the "Association"), Community Savings Bankshares, Inc. (the
"Mid-Tier Holding Company") and ComFed, M. H. C. (the "MHC") have adopted a Plan
of Conversion and Agreement and Plan of Reorganization (the "Plan"). Pursuant to
the Plan, the Association will become a subsidiary of a newly formed Delaware
stock corporation which will also be called Community Savings Bankshares, Inc.
(the "Company"), and the existing shareholders of the Mid-Tier Holding Company
(other than the MHC) will be issued shares of the common stock of the Company
(the "Company Common Stock") in exchange for common stock of the Mid-Tier
Holding Company (the "Exchange"). The Exchange will result in those shareholders
owning in the aggregate approximately the same percentage of the Company as they
had owned in the Mid-Tier Holding Company, subject to certain adjustments. In
addition to the shares of Company Common Stock to be issued in the Exchange, the
Company is also offering up to 7,753,143 shares of common stock to the
Association's members, shareholders of the Mid-Tier Holding Company and certain
members of the public (collectively, the "Conversion"). Consummation of the
Conversion is subject to (i) the approval of the members of the MHC, (ii) the
approval of the shareholders of the Mid-Tier Holding Company and (iii) various
regulatory approvals.
Unfortunately, the Company is unable either to offer or sell its common
stock to you because the small number of eligible subscribers in your
jurisdiction makes registration or qualification of the common stock under the
securities laws of your jurisdiction impractical, for reasons of cost or
otherwise. Accordingly, this letter should be considered neither an offer to
sell nor a solicitation of an offer to buy the common stock of the Company.
However, as a member of the Association, you have the right to vote on
the Plan at the Special Meeting of Members to be held on _______, 1998 at
______.m. Therefore, enclosed is a proxy card, a Proxy Statement (which includes
the Notice of the Special Meeting), a Prospectus (which contains information
incorporated into the Proxy Statement) and a return envelope for your proxy
card.
If you have any questions about the Conversion, please call (xxx)
xxx-xxxx or toll-free (888) xxx-xxxx or visit the Stock Center located at
______,_____,FL, _zipcode_ between 9:00 a.m. and 5:00 p.m., Eastern Time, Monday
through Friday.
Thank you for giving these matters your attention and timely consideration.
Sincerely,
James B. Pittard, Jr.
President and Chief Executive Officer
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS ACCOMPANIED BY THE ORDER FORM.
<PAGE> 1
================================================================================
COMMUNITY SAVINGS
BANKSHARES, INC.
CONVERSION
VALUATION
APPRAISAL
DATE ISSUED: AUGUST 21, 1998
DATE OF MARKET PRICES: AUGUST 13, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
COMMUNITY SAVINGS BANKSHARES, INC.
NORTH PALM BEACH, FLORIDA
<TABLE>
<S> <C>
INTRODUCTION 1
- --------------------------------------------------------------------------------
1. OVERVIEW AND FINANCIAL ANALYSIS 4
- --------------------------------------------------------------------------------
GENERAL OVERVIEW 4
HISTORY 6
STRATEGIC DIRECTION 7
BALANCE SHEET TRENDS 8
LOAN PORTFOLIO 10
SECURITIES 13
INVESTMENTS AND MORTGAGE-BACKED SECURITIES 14
ASSET QUALITY 15
FUNDING COMPOSITION 18
ASSET/LIABILITY MANAGEMENT 20
NET WORTH AND CAPITAL 22
INCOME AND EXPENSE TRENDS 23
SUBSIDIARIES 28
CONTINGENCIES 28
2. MARKET AREA ANALYSIS 29
- --------------------------------------------------------------------------------
MARKET AREA DEMOGRAPHICS 29
MARKET AREA DEPOSIT CHARACTERISTICS 32
3. COMPARISONS WITH PUBLICLY TRADED THRIFTS 41
- --------------------------------------------------------------------------------
INTRODUCTION 41
SELECTION SCREENS 41
SELECTION CRITERIA 43
COMPARABLE GROUP PROFILES 44
4. MARKET VALUE DETERMINATION 49
- --------------------------------------------------------------------------------
INTRODUCTION 49
BALANCE SHEET STRENGTH 50
ASSET QUALITY 54
EARNINGS QUALITY, PREDICTABILITY AND GROWTH 55
INCOME AND EXPENSE TRENDS 56
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 3
<TABLE>
<S> <C>
MARKET AREA 60
MANAGEMENT 61
DIVIDENDS 62
LIQUIDITY OF THE ISSUE 64
RECENT REGULATORY MATTERS 65
MARKET FOR SEASONED THRIFT STOCKS 66
ACQUISITION MARKET 70
ADJUSTMENTS TO VALUE 75
5. OTHER ADJUSTMENTS 76
- --------------------------------------------------------------------------------
SECOND STEP CONVERSIONS 76
SUBSCRIPTION INTEREST 77
6. VALUATION 78
- --------------------------------------------------------------------------------
VALUATION APPROACH 78
VALUATION CONCLUSION 81
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 4
LIST OF FIGURES
COMMUNITY SAVINGS BANKSHARES, INC.
NORTH PALM BEACH, FLORIDA
<TABLE>
<S> <C> <C>
FIGURE 1 - CURRENT BRANCH LIST 4
FIGURE 2 - ASSET AND RETAINED EARNINGS CHART 8
FIGURE 3 - KEY BALANCE SHEET DATA 9
FIGURE 4 - KEY RATIOS 9
FIGURE 5 - NET LOANS RECEIVABLE CHART 10
FIGURE 6 - LOAN MIX AS OF JUNE 30, 1998 CHART 11
FIGURE 7 - LOAN MIX 12
FIGURE 8 - SECURITIES CHART 13
FIGURE 9 - INVESTMENT MIX 14
FIGURE 10 - NON-PERFORMING ASSETS CHART 15
FIGURE 11 - NON-PERFORMING LOANS 16
FIGURE 12 - ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES CHART 17
FIGURE 13 - DEPOSIT AND BORROWING TREND CHART 18
FIGURE 14 - DEPOSIT MIX 19
FIGURE 15 - MARKET VALUE OF PORTFOLIO EQUITY 20
FIGURE 16 - CUMULATIVE INTEREST SENSITIVITY GAP 21
FIGURE 17 - CAPITAL ANALYSIS 22
FIGURE 18 - NET INCOME CHART 23
FIGURE 19 - AVERAGE YIELDS AND COSTS 24
FIGURE 20 - SPREAD AND MARGIN CHART 25
FIGURE 21 - INCOME STATEMENT TRENDS 26
FIGURE 22 - PROFITABILITY TREND CHART 27
FIGURE 23 - POPULATION DEMOGRAPHICS 29
FIGURE 24 - POPULATION DEMOGRAPHICS 30
FIGURE 25 - HOUSEHOLD CHARACTERISTICS 31
FIGURE 26 - HOUSEHOLD CHARACTERISTICS 31
FIGURE 27 - JUPITER (BLUFFS) MARKET AREA 32
FIGURE 28 - JUPITER (TONEY PENNA & CHASEWOOD) MARKET AREA 33
FIGURE 29 - NORTH PALM BEACH MARKET AREA 33
FIGURE 30 - PALM BEACH GARDENS MARKET AREA 34
FIGURE 31 - PALM BEACH GARDENS (PGA) MARKET AREA 34
FIGURE 32 - RIVIERA BEACH (RIVIERA BEACH & SINGER ISLAND) MARKET AREA 35
FIGURE 33 - TEQUESTA (TEQUESTA & GALLERY SQUARE) MARKET AREA 35
FIGURE 34 - WEST PALM BEACH (VILLAGE COMMONS) MARKET AREA 36
FIGURE 35 - LAKE WORTH MARKET AREA 37
FIGURE 36 - HOBE SOUND MARKET AREA 37
FIGURE 37 - JENSEN BEACH (JENSEN BEACH & HUTCHINSON ISLAND) MARKET AREA 38
FIGURE 38 - PALM CITY (MARTIN DOWNS) MARKET AREA 38
FIGURE 39 - PORT SALERNO (STUART) MARKET AREA 39
FIGURE 40 - FORT PIERCE MARKET AREA 39
FIGURE 41 - PORT ST. LUCIE MARKET AREA 39
FIGURE 42 - PORT ST. LUCIE (ST. LUCIE WEST) MARKET AREA 40
FIGURE 43 - VERO BEACH MARKET AREA 40
FIGURE 44 - SCREENING RESULTS 42
FIGURE 45 - COMPARABLE GROUP 42
FIGURE 46 - KEY FINANCIAL INDICATORS 47
FIGURE 47 - KEY BALANCE SHEET DATA 50
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 5
<TABLE>
<S> <C> <C>
FIGURE 48 - BALANCE SHEET GROWTH DATA 51
FIGURE 49 - CAPITAL DATA 52
FIGURE 50 - ASSET QUALITY TABLE 54
FIGURE 51 - NET INCOME CHART 56
FIGURE 52 - PROFITABILITY DATA 57
FIGURE 53 - INCOME STATEMENT DATA 58
FIGURE 54 - CORE EARNINGS DATA 58
FIGURE 55 - DIVIDENDS DATA 63
FIGURE 56 - MARKET CAPITALIZATION DATA 64
FIGURE 57 - SNL THRIFT INDEX CHART 66
FIGURE 58 - HISTORICAL SNL INDEX 67
FIGURE 59 - EQUITY INDICES 68
FIGURE 60 - HISTORICAL RATES 69
FIGURE 61 - DEALS FOR LAST FOURTEEN QUARTERS 70
FIGURE 62 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO BOOK 71
FIGURE 63 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO TANGIBLE BOOK 72
FIGURE 64 - THRIFT ACQUISITION MULTIPLES, PRICE TO EARNINGS 72
FIGURE 65 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO ASSETS 73
FIGURE 66 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO DEPOSITS 73
FIGURE 67 - DEAL MULTIPLES 74
FIGURE 68 - ACQUISITION TABLE 74
FIGURE 69 - PENDING SECOND STEP CONVERSIONS 76
FIGURE 70 - CONVERSION PRICE POPS 77
FIGURE 71 - VALUE RANGE OFFERING DATA 79
FIGURE 72 - VALUE RANGE OFFERING DATA 80
FIGURE 73 - COMPARABLE PRICING MULTIPLES TO THE BANK'S PROFORMA MIDPOINT 80
FIGURE 74 - RECENT SECOND STEP CONVERSION TRADING MULTIPLES TO THE BANK'S
PROFORMA MIDPOINT 80
FIGURE 75 - DETAILS ON THE ESTIMATED VALUATION RANGE 81
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 6
LIST OF EXHIBITS
COMMUNITY SAVINGS BANKSHARES, INC.
NORTH PALM BEACH, FLORIDA
<TABLE>
<CAPTION>
EXHIBIT
-------
<S> <C>
1 Profile of FinPro, Inc.
2 Consolidated Statements of Financial Condition
3 Consolidated Statements of Operations
4 Reconciliation of TFR Statement of Operations to Consolidated
Statements of Operations
5 Consolidated Statements of Changes in Shareholder's Net Worth
6 Consolidated Statements of Cash Flows
7 Selected Data on All Public Thrifts
8 Industry Multiples
9 Recent Standard Conversions 1997 to Date
10 Second Step Conversions 1997 to Date
11 Appraisal Pro Forma June 30, 1998 - 12 Months Data
12 Offering Circular Pro Forma June 30, 1998 - 6 Months Data Unadjusted
13 Offering Circular Pro Forma December 31, 1997 - 12 Months Data
Unadjusted
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 7
Conversion Valuation Appraisal Report Page: 1 - 1
================================================================================
INTRODUCTION
This report represents FinPro, Inc.'s ("FinPro") independent appraisal of the
estimated pro-forma market value of the common stock ( the "Common Stock") in
connection with the conversion and reorganization of Community Savings, F.A.
(the "Bank") from the two-tier mutual holding company structure to the stock
holding company structure (the "Conversion"). The Bank is currently a wholly
owned subsidiary of Community Savings Bankshares, Inc., a federal corporation
(the "Mid-Tier"), which is the wholly owned subsidiary of ComFed, M.H.C. (the
"MHC"), both of which will be merged out of existence, and the Bank will become
a wholly owned subsidiary of the Company.
The Bank is headquartered in North Palm Beach, Florida and at June 30, 1998 had
$765.5 million in assets, $574.4 million in deposits and $83.1 million in
stockholders' equity. The Bank is a Federally Chartered Mutual Holding Company
whose principal regulator is the Office of Thrift Supervision ("OTS"). All of
the Bank's deposit accounts, up to the regulatory limits, are insured by the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation ("FDIC"). As of June 30, 1998, the Bank maintained twenty-one
offices located in Palm Beach, Martin, St. Lucie, Indian River, and Brevard
Counties, all of which are located in Florida.
This appraisal has been prepared in accordance with Regulation 563b.7 and with
the "Guidelines for Appraisal Reports for the Valuation of Savings and Loan
Associations Converting from Mutual to Stock Form of Organization" of the OTS
which have been adopted in practice by the FDIC, including the most recent
revisions as of October 21, 1994, and applicable regulatory interpretations
thereof.
In the course of preparing our report, we reviewed the audited six month period
ended June 30, 1998, audited financial statements of the Bank's operations for
the twelve month period ended December 31, 1997 and the Bank's operations and
financial condition for the prior two year period. We have conducted due
diligence analysis of the Bank and the Company (hereinafter, collectively
referred to as "the Bank") and held due diligence related discussions with the
Bank's management and board, Crowe Chizek (the Bank's independent audit firm),
Elias, Matz, Tiernan, & Herrick L.L.P. (the Bank's special counsel), and
Friedman, Billings & Ramsey & Co., Inc. (the Bank's financial and marketing
advisor). The valuation parameters set forth in the appraisal were predicated on
these discussions but all conclusions related to the valuation were reached and
made independent of such discussions.
<PAGE> 8
Conversion Valuation Appraisal Report Page: 1 - 2
================================================================================
The Company is offering a minimum of 5,730,659 shares and a maximum of 7,753,143
shares of common stock (the "Conversion Stock") at $10.00 per share to persons
with priority subscription rights in a subscription offering and to other
members of the public in a community offering (the "Offerings"). These shares
represent the MHC's ownership interest in the Mid-Tier Holding Company based on
an independent appraisal, which may be increased by up to 15% without
resolicitation. The table below sets forth information regarding the sale of
Conversion Stock in the Offerings.
The Company will issue a minimum of 5,319,341 shares and a maximum of 7,196,857
shares of common stock (the "Exchange Shares") to the shareholders of the
Mid-Tier Holding Company (other than the MHC) in exchange for their Mid-Tier
Holding Company common stock (the "Exchange"). The company will not pay or
receive any cash in the Exchange, except that cash will be paid in lieu of
fractional shares. The number of Exchange Shares to be issued is dependent upon
the amount of Conversion Stock sold, with an exchange ratio designed to provide
the Mid-Tier Holding Company's shareholders (other than the MHC) with
approximately the same percentage ownership interest in the Company that they
have in the Mid-Tier holding Company.
The sum of the Conversion Stock and the Exchange Shares represents the total
amount of Common Stock to be issued in the Conversion, which sum is a minimum of
11,050,000 shares and a maximum of 14,950,000 shares. If the independent
appraisal is increased by 15%, the maximum amount of Conversion Stock, Exchange
Shares and total shares would be increased to 8,916,176 shares and 8,276,324
shares 17,192,500 shares, respectively.
The Mid-Tier Holding Company common stock is currently quoted on the Nasdaq
Stock Market under the symbol "CMSV." The Company has applied to the NASDAQ
Stock Market under the same symbol upon completion of the Conversion.
<PAGE> 9
Conversion Valuation Appraisal Report Page: 1 - 3
================================================================================
In preparing our valuation, we relied upon and assumed the accuracy and
completeness of financial and other information provided to us by the Bank and
its independent accountants. We did not independently verify the financial
statements and other information provided by the Bank and its independent
accountants, nor did we independently value any of the Bank's assets or
liabilities. This estimated valuation considers the Bank only as a going concern
and should not be considered as an indication of its liquidation value.
Where appropriate, we considered information based upon other publicly available
sources, which we believe to be reliable; however, we cannot guarantee the
accuracy or completeness of such information. We visited the Bank's primary
market area and reviewed the market area economic condition. We also reviewed
the competitive environment in which the Bank operates and its relative
strengths and weaknesses. We compared the Bank's performance with selected
publicly traded thrift institutions. We reviewed conditions in the securities
markets in general and in the market for savings institutions in particular. Our
analysis included a review of the estimated effects of the Reorganization on the
Bank, operation and expected financial performance as they related to the Bank's
estimated pro-forma value.
OUR VALUATION IS NOT INTENDED, AND MUST NOT BE CONSTRUED, TO BE A RECOMMENDATION
OF ANY KIND AS THE ADVISABILITY OF PURCHASING SHARES OF COMMON STOCK IN THE
CONVERSION AND REORGANIZATION. MOREOVER, BECAUSE SUCH VALUATION IS NECESSARILY
BASED UPON ESTIMATES AND PROJECTIONS OF A NUMBER OF MATTERS, ALL OF WHICH ARE
SUBJECT TO CHANGE FROM TIME TO TIME, NO ASSURANCE CAN BE GIVEN THAT PERSONS WHO
PURCHASE SHARES OF COMMON STOCK IN THE CONVERSION AND REORGANIZATION WILL
THEREAFTER BE ABLE TO SELL SUCH SHARES AT PRICES RELATED TO THE FOREGOING
VALUATION OF THE PRO-FORMA MARKET VALUE THEREOF. FINPRO IS NOT A SELLER OF
SECURITIES WITHIN THE MEANING OF ANY FEDERAL OR STATE SECURITIES LAWS AND ANY
REPORT PREPARED BY FINPRO SHALL NOT BE USED AS AN OFFER OR SOLICITATION WITH
RESPECT TO THE PURCHASE OR SALE OF ANY SECURITIES.
The estimated valuation herein will be updated as appropriate. These updates
will consider, among other factors, any developments or changes in the Bank's
financial condition, operating performance, management policies and procedures,
and current conditions in the securities market for thrift institution common
stock. Should any such developments or changes, in our opinion, be material to
the estimated pro-forma market value of the Bank, appropriate adjustments to the
estimated pro-forma market value will be made. The reasons for any such
adjustments will be explained at that time.
<PAGE> 10
Conversion Valuation Appraisal Report Page: 1 - 4
================================================================================
1. OVERVIEW AND FINANCIAL ANALYSIS
---------------------------------------------
GENERAL OVERVIEW
---------------------------------------------
The Company after the Second Step Conversion, will be a federally chartered
stock holding company. As of June 30, 1998, the Mid-Tier had $765.5 million in
total assets, $574.4 million in deposits, $527.4 million in net loans and $83.1
million in equity.
The following table shows the Association's branch network as of June 30, 1998.
FIGURE 1 - CURRENT BRANCH LIST
<TABLE>
<CAPTION>
BRANCH OFFICE BRANCH ADDRESS TOWN
- --------------------------------------------------------------------------------
<S> <C> <C>
North Palm Beach 660 US Highway 1 North Palm Beach
Riviera Beach 2600 Broadway Riviera Beach
Tequesta 101 N. US Highway 1 Tequesta
Port Salerno 5545 SE Federal Highway Stuart
Palm Beach Gardens 9600 N. Alternate A1A Palm Beach Gardens
Jensen Beach 1170 NE Jensen Beach Boulevard Jensen Beach
Singer Island 1100 East Blue Heron Boulevard Riviera Beach
Gallery Square 389 Tequesta Drive Tequesta
Fort Pierce 1050 Virginia Avenue Fort Pierce
Port St. Lucie 1540 SE Floresta Drive Port St. Lucie
Palm City 3102 Martin Downs Boulevard Palm City
Chasewood 6350 Indiantown Road Jupiter
Bluffs 3950 US Highway 1 Jupiter
Village Commons 971 Village Boulevard West Palm Beach
Hobe Sound 11400 SE Federal Highway Hobe Sound
Port St. Lucie 1549 St. Lucie West Boulevard Port St. Lucie
Toney Penna 520 Toney Penna Drive Jupiter
</TABLE>
<PAGE> 11
Conversion Valuation Appraisal Report Page: 1 - 5
================================================================================
<TABLE>
<CAPTION>
BRANCH OFFICE BRANCH ADDRESS TOWN
- --------------------------------------------------------------------------------
<S> <C> <C>
PGA 7102 Fairway Drive Palm Beach Gardens
Lake Worth 5702 Lake Worth Road Lake Worth
Hutchinson Island 4417 NE Ocean Boulevard Jensen Beach
Vero Beach 6030 20th Street Vero Beach
LOAN PRODUCTION OFFICES
2903 Cardinal Drive Vero Beach
1901 S. Harbor City Melbourne
</TABLE>
<PAGE> 12
Conversion Valuation Appraisal Report Page: 1 - 6
================================================================================
-------------------------
HISTORY
-------------------------
The Association, founded in 1955, is a federally chartered savings and loan
association headquartered in North Palm Beach, Florida. The Association's
deposits are federally insured by the Federal Deposit insurance Corporation
("FDIC") through the Savings Association Insurance Fund ("SAIF"). The
Association has been a member of the Federal Home Loan Bank of Atlanta ("FHLB")
since 1955. The Association is regulated by the OTS. On October 24, 1994, the
Association completed a reorganization into a federally chartered mutual holding
company (the "MHC Reorganization"). As part of the MHC Reorganization, the
Association organized a new federally chartered stock savings association and
transferred substantially all of its assets and liabilities to the stock savings
association in exchange for a majority of the common stock of the stock savings
association.
The Association is a community-oriented financial institution engaged primarily
in the business of attracting deposits from the general public in the
Association's market area and using such funds, together with other borrowings,
to invest in various consumer-based real estate loans, commercial business loans
and mortgage-related securities as well as United States government and agency
securities, mutual funds, and corporate debt securities. The Association's
principal source of funds are deposits, principal and interest payments on loans
and securities, and FHLB advances. The principal source of income is interest
received from loans and securities, while principal expenses are interest paid
on deposits and borrowings and employee compensation and benefits. The
Association's profitability is highly dependent on its net interest income. The
components that determine net interest income are the amount of interest-earning
assets and interest-bearing liabilities, together with the rates earned or paid
on such interest rate-sensitive instruments. The Association is sensitive to
managing interest rate risk exposure by better matching asset and liability
maturities and rates. This is accomplished while considering the credit risk of
certain assets. The Association maintains asset quality by utilizing
comprehensive loan underwriting standards and collection efforts as well as by
primarily originating or purchasing secured or guaranteed assets.
<PAGE> 13
Conversion Valuation Appraisal Report Page: 1 - 7
================================================================================
-------------------------
STRATEGIC DIRECTION
-------------------------
The Association's current business strategy is to operate as a well-capitalized,
profitable and independent community-oriented savings and loan association
dedicated to providing quality retail financial products and personalized
customer service. The Association has implemented this strategy by emphasizing
retail deposits as its primary source of funds and investing a substantial part
of such funds in locally-originated residential first mortgage loans, in
mortgage-related securities and in other liquid investment securities.
Specifically, the Association's business strategy incorporates the following
elements: (i) operating as a community-oriented financial institution and
maintaining a strong core customer base; (ii) maintaining asset quality while
emphasizing traditional lending and investment activities; (iii) maintaining a
strong retail deposit base; and (iv) managing interest rate risk while achieving
desirable levels of profitability.
<PAGE> 14
Conversion Valuation Appraisal Report Page: 1 - 8
================================================================================
-------------------------------------
BALANCE SHEET TRENDS
-------------------------------------
Since September 30, 1993, the Bank's balance sheet has increased from $523.3
million to $765.5 million, or $242.2 million. During this period of time, the
Bank undertook an MHC reorganization and minority stock offering, which
accounted for the equity growth for the year ended September 30, 1995.
Equity has also increased $48.2 million from $34.8 million at September 30, 1993
to $83.1 million at June 30, 1998. The equity to assets ratio is currently
10.85%.
FIGURE 2 - ASSET AND RETAINED EARNINGS CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 15
Conversion Valuation Appraisal Report Page: 1 - 9
================================================================================
The following tables set forth certain information concerning the financial
position of the Bank along with selected ratios at the dates indicated.
FIGURE 3 - KEY BALANCE SHEET DATA
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
AT JUNE 30, AT DECEMBER 31, AT SEPTEMBER 30,
-----------------------------------------------------------------------------------------
1998 1997 1996 1996 1995 1994 1993
-----------------------------------------------------------------------------------------
SELECTED CONSOLIDATED FINANCIAL DATA: (DOLLARS IN THOUSANDS)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL AMOUNT OF:
Total Assets $ 765,488 $ 720,133 $ 655,209 $ 650,332 $ 567,006 $ 560,268 $ 523,248
Cash and cash equivalents 47,425 25,954 42,442 44,780 42,497 89,843 35,188
Securities available for sale 91,316 142,269 123,152 124,287 27,028 26,729 69,459
Investments - held to maturity 21,443 21,388 22,139 22,293 59,679 52,204 43,789
Mortgage backed securities
- held to maturity 41,884 46,413 53,405 54,945 77,499 41,281 14,290
Loans receivable, net 527,375 451,709 389,040 376,219 329,442 317,117 328,747
Real estate owned 711 592 1,455 1,384 1,910 3,686 1,324
Deposits 574,383 550,708 513,709 498,929 437,376 459,979 450,356
Borrowed funds 91,513 75,098 53,908 55,867 39,101 19,233 20,113
Stockholders' equity 83,078 81,259 76,119 75,056 72,848 38,110 34,846
Book value $ 16.66 $ 16.39 $ 15.50 $ 15.33 $ 15.04 -- --
Shares, allocated and outstanding,
end of period 4,983,288 4,958,217 1,908,676 4,895,282 4,843,344 -- --
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
FIGURE 4 - KEY RATIOS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SIX MONTH ENDED YEAR ENDED THREE MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------------------
1998 1997 1997 1996 1996 1995 1994 1993
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
KEY FINANCIAL AND OTHER DATA:
PERFORMANCE RATIOS:
Return on average assets 0.67% 0.80% 0.77% 0.71% 0.64% 0.84% 0.71% 1.01%
Return on average equity 6.10% 7.08% 6.80% 6.11% 5.25% 6.60% 10.27% 17.02%
Equity to total assets 10.85% 11.24% 11.28% 11.62% 11.54% 12.85% 6.80% 6.65%
Net interest spread 3.14% 3.15% 3.13% 3.16% 3.24% 3.40% 3.69% 4.43%
Net interest margin 3.47% 3.53% 3.51% 3.58% 3.65% 3.78% 3.79% 4.50%
Other income to average assets 0.47% 0.55% 0.60% 0.75% 0.55% 0.62% 0.63% 0.96%
Operating expense to average assets 2.63% 2.59% 2.68% 2.85% 3.20% 2.74% 2.82% 2.93%
Net interest income to operating expenses 123.62% 128.53% 123.52% 118.82% 106.21% 128.07% 124.54% 141.59%
Efficiency ratio 70.69% 66.81% 68.46% 68.87% 80.57% 66.29% 68.15% 57.40%
Average interest-earning assets to average
interest-bearing liabilities 108.06% 109.05% 109.06% 110.15% 110.47% 110.00% 103.08% 101.86%
ASSET QUALITY RATIOS:
Non-performing assets to total assets 0.27% 0.40% 0.47% 0.47% 0.40% 0.45% 1.25% 1.54%
Allowance for loan losses to non-performing loans 202.56% 177.49% 193.04% 155.86% 274.58% 527.49% 114.72% 55.65%
Allowance for loan losses to net loans receivable 0.52% 0.63% 0.59% 0.65% 0.61% 1.06% 1.07% 1.14%
Average equity to average assets 11.00% 11.37% 11.37% 11.65% 12.20% 12.72% 6.89% 5.96%
CAPITAL RATIOS:
Shareholders' equity to assets at end of period
Number of full service offices 21 20 21 19 19 18 17 17
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 16
Conversion Valuation Appraisal Report Page: 1 - 10
================================================================================
------------------------------------
LOAN PORTFOLIO
------------------------------------
The Bank's loan portfolio has increased by $198.6 million from September 1993 to
June 1998. The Bank's loan to asset ratio was 68.89% at June 30, 1998.
FIGURE 5 - NET LOANS RECEIVABLE CHART
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
-------------------------------------------------------------------
1998 1997 1996
-------------------------------------------------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
-------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REAL ESTATE LOANS:
Residential 1-4 family $ 419,069 75.63% $ 339,117 70.90% $ 293,366 71.11%
Residential construction loans 42,807 7.73% 32,828 6.86% 33,158 8.04%
Nonresidential construction loans 4,217 0.76% 2,022 0.42% 2,200 0.53%
Land loans 12,409 2.24% 17,117 3.58% 19,426 4.71%
Multi-family loans 8,739 1.58% 8,800 1.84% 8,096 1.96%
Commercial loans 46,147 8.32% 59,220 12.38% 37,815 9.17%
--------- ----- --------- ----- --------- -----
Total real estate loans 533,388 96.26% 459,104 95.98% 394,061 95.52%
NON-REAL ESTATE LOANS:
Consumer loans 15,191 2.74% 15,694 3.28% 16,028 3.89%
Commercial business 5,508 1.00% 3,530 0.74% 2,458 0.60%
--------- ----- --------- ----- --------- -----
Total non-real estate loans 20,699 3.74% 19,224 4.02% 18,486 4.48%
Total loans receivable 554,087 100.00% 478,328 100.00% 412,547 100.00%
Less:
Undisbursed loan proceeds 25,134 24,163 20,765
Unearned discount (premium) and net
deferred loans fees (costs) (1,189) (206) 200
Allowance for loan losses 2,767 2,662 2,542
--------- --------- ---------
Total loans receivable, net $ 527,375 $ 451,709 $ 389,040
========= ========= =========
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 17
Conversion Valuation Appraisal Report Page: 1 - 11
================================================================================
The Bank is primarily a residential one-to-four family lender. However, the Bank
does offer an array of loan products.
FIGURE 6 - LOAN MIX AS OF JUNE 30, 1998 CHART
LOAN MIX
[CHART]
[DESCRIPTIONS TO COME]
<PAGE> 18
Conversion Valuation Appraisal Report Page: 1 - 12
================================================================================
Since December 31, 1996, the Bank's loan mix has shifted toward 1-4 family
residential mortgage loans. Residential 1-4 family loans have increased from
71.11% of the loan portfolio to 75.63%. As a percentage of total loans, consumer
loans have decreased from 3.89% to 2.74% and commercial real estate loans have
decreased from 9.17% to 8.32%.
FIGURE 7 - LOAN MIX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
----------------------------------------------------------------------------
1998 1997 1996
----------------------------------------------------------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REAL ESTATE LOANS:
Residential 1-4 family $419,069 75.63% $339,117 70.90% $293,366 71.11%
Residential construction loans 42,807 7.73% 32,828 6.86% 33,158 8.04%
Nonresidential construction loans 4,217 0.76% 2,022 0.42% 2,200 0.53%
Land loans 12,409 2.24% 17,117 3.58% 19,426 4.71%
Multi-family loans 8,739 1.58% 8,800 1.84% 8,096 1.96%
Commercial loans 46,147 8.32% 59,220 12.38% 37,815 9.17%
-------- ----- --------- ----- -------- - -----
Total real estate loans 533,388 96.26% 459,104 95.98% 394,061 95.52%
NON-REAL ESTATE LOANS:
Consumer loans 15,191 2.74% 15,694 3.28% 16,028 3.89%
Commercial business 5,508 1.00% 3,530 0.74% 2,458 0.60%
-------- ----- ------- ----- ------- -----
Total non-real estate loans 20,699 3.74% 19,224 4.02% 18,486 4.48%
Total loans receivable 554,087 100.00% 478,328 100.00% 412,547 100.00%
Less:
Undisbursed loan proceeds 25,134 24,163 20,765
Unearned discount (premium) and net
deferred loans fees (costs) (1,189) (206) 200
Allowance for loan losses 2,767 2,662 2,542
-------- -------- --------
Total loans receivable, net $527,375 $451,709 $389,040
======== ======== ========
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 19
Conversion Valuation Appraisal Report Page: 1 - 13
================================================================================
------------------------------------
SECURITIES
------------------------------------
The Bank's security portfolio has declined from $213.3 million at December 31,
1997, to $158.4 million at June 30, 1998.
FIGURE 8 - SECURITIES CHART
[CHART]
[DESCRIPTIONS TO COME]
<PAGE> 20
Conversion Valuation Appraisal Report Page: 1 - 14
================================================================================
-------------------------------------------------
INVESTMENTS AND MORTGAGE-BACKED SECURITIES
-------------------------------------------------
The Bank has a relatively diverse investment mix which includes municipal bonds,
CMOs, corporates and mutual funds.
FIGURE 9 - INVESTMENT MIX
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
AT JUNE 30, AT DECEMBER 31, AT SEPTEMBER 30,
-----------------------------------------------------------------
1998 1997 1996 1996 1995
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE (AT FAIR VALUE)
Equity securities:
FNMA stock 25 23 14 14 10
Financial Institutions Insurance Group, Limited Stock -- -- -- 101 86
Mutual funds 40,552 40,721 43,067 42,912 26,932
United States Government and
agency obligations 9,127 55,175 28,097 27,942 --
CMO's 41,612 46,350 51,974 53,318 --
-------- -------- -------- -------- --------
Total securities available for sale 91,316 142,269 123,152 124,287 27,028
- -----------------------------------------------------------------------------------------------------------------------------
SECURITIES HELD TO MATURITY (AT AMORTIZED COST)
United States Government and
agency obligations 13,820 13,039 11,701 11,691 38,987
Corporate debt issuances 7,623 8,349 10,138 10,602 13,692
Certificates of deposit -- -- -- -- 7,000
FHLB Stock 3,782 3,264 2,864 5,384 7,384
CMO's 30,892 33,638 37,359 38,308 57,586
CMO residuals 6 7 15 20 118
FHLMCs 6,324 7,465 9,673 9,973 11,943
GNMAs 1,525 1,751 2,108 2,233 2,774
FNMAs 2,925 3,316 3,933 4,076 4,691
AID loans 212 236 317 335 387
-------- -------- -------- -------- --------
Total investment securities 67,109 71,065 78,108 82,622 144,562
Total investments $158,425 $213,334 $201,260 $206,909 $171,590
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 21
Conversion Valuation Appraisal Report Page: 1 - 15
================================================================================
------------------------------------
ASSET QUALITY
------------------------------------
The Bank resolved most of its non-performing loans between September 30, 1993
and September 30, 1995. As a percentage of assets, non-performing assets
decreased from a high of 1.54% at September 30, 1993, to 0.27%, at June 30,
1998.
FIGURE 10 - NON-PERFORMING ASSETS CHART
[CHART]
[DESCRIPTIONS TO COME]
<PAGE> 22
Conversion Valuation Appraisal Report Page: 1 - 16
================================================================================
The Bank's non-performing loan to net loan ratio was 0.26% at June 30, 1998.
Additionally, non-performing assets as a percentage of total assets was 0.27% at
the same date.
FIGURE 11 - NON-PERFORMING LOANS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
AT JUNE 30, 1998
($ IN THOUSANDS)
- --------------------------------------------------------------------
<S> <C>
Non-performing loans $1,366
Real estate owned, net 711
- --------------------------------------------------------------------
Total non-performing assets $2,077
Non-performing loans as a percentage
of net loans 0.26%
Non-performing assets as a percentage
of total assets 0.27%
- --------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 23
Conversion Valuation Appraisal Report Page: 1 - 17
================================================================================
The Bank's allowance for loan and lease losses has declined from $3.7 million at
September 30, 1993, to $2.8 million at June 30, 1998. As shown in Figure 10, the
Bank has resolved most of its non-performing assets. The ALLL to non-performing
assets ratio was 133.22% as of June 30, 1998, while its ALLL to net loans
receivable ratio was 0.52%.
FIGURE 12 - ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 24
Conversion Valuation Appraisal Report Page: 1 - 18
================================================================================
------------------------------------
FUNDING COMPOSITION
------------------------------------
Overall, deposits have grown from $450.4 million at September 30, 1993 to $574.4
million at June 30, 1998, or 27.54%. The Bank has increased borrowings to $91.5
million, which equals 11.95% of total assets.
FIGURE 13 - DEPOSIT AND BORROWING TREND CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 25
Conversion Valuation Appraisal Report Page: 1 - 19
================================================================================
The Bank's deposit mix is presented below. Time deposits comprised 61.49% of the
deposit mix at June 30, 1998. The mix has shifted away from time deposits and
toward non-interest bearing accounts and money market accounts.
FIGURE 14 - DEPOSIT MIX
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
JUNE 30, YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
-------------------------------------------------------------------------------------------------
1998 DECEMBER 31, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
-------------------------------------------------------------------------------------------------
Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Non-Certificates of Deposits:
Non-interest-bearing demand
accounts 29,563 5.15% 24,715 4.49% 18,627 3.63% 19,532 3.80% 14,844 3.39%
NOW accounts 74,355 12.95% 69,862 12.69% 67,076 13.06% 63,098 12.28% 63,861 14.60%
Passbook accounts 32,936 5.73% 30,221 5.49% 30,821 6.00% 30,875 6.01% 29,701 6.79%
Money market accounts 84,347 14.68% 78,832 14.31% 69,514 13.53% 69,421 13.51% 75,720 17.31%
-------------------------------------------------------------------------------------------------
Total transaction accounts 221,201 38.51% 203,630 36.98% 186,038 36.21% 182,926 35.61% 184,126 42.10%
Certificates of deposit:
3.00% or less $ 1,211 0.21% $1,436 0.26% $ 1,035 0.20% $ 1,600 0.31% $ 930 0.21%
3.01% -3.99% 11 0.00% 11 0.00% 598 0.12% 903 0.18% 5,257 1.20%
4.00% - 4.99% 37,827 6.59% 35,699 6.48% 51,484 10.02% 80,831 15.73% 55,583 12.71%
5.00% - 5.99% 269,293 46.88% 262,029 47.58% 232,313 45.22% 193,281 37.62% 108,608 24.83%
6.00% - 6.99% 36,033 6.27% 39,186 7.12% 33,568 6.53% 29,571 5.76% 70,456 16.11%
7.00% - 7.99% 8,807 1.53% 8,717 1.58% 8,673 1.69% 9,817 1.91% 12,416 2.84%
-------------------------------------------------------------------------------------------------
Total certificates of
deposits 353,182 61.49% 347,078 63.02% 327,671 63.79% 316,003 61.51% 253,250 57.90%
Total deposits $574,383 100.00% $550,708 100.00% $513,709 100.00% $498,929 97.12% $437,376 100.00%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 26
Conversion Valuation Appraisal Report Page: 1 - 20
================================================================================
------------------------------------
ASSET/LIABILITY MANAGEMENT
------------------------------------
The following chart illustrates the Bank's market value of portfolio equity
("MVPE") at June 30, 1998, as calculated by the FHLB of Atlanta. The Bank
manages its interest rate risk through normal balance sheet activities and does
not utilize any hedging techniques. This chart indicates that the Mid Tier has a
modest level of interest rate risk, as its MVPE is above the tangible capital
level at rate shocks up to and including +300 basis points.
FIGURE 15 - MARKET VALUE OF PORTFOLIO EQUITY
[CHART]
[DESCRIPTION TO COME]
<PAGE> 27
Conversion Valuation Appraisal Report Page: 1 - 21
================================================================================
Another measure of interest rate exposure is the difference between the interest
earning assets and the interest costing liabilities, or the interest sensitivity
gap. The following chart was created using data from the Bank's internal
simulation model, which uses assumptions consistent with those utilized by the
FHLB of Atlanta. The Bank's one year cumulative interest sensitivity gap was
0.44% as of June 30, 1998.
FIGURE 16 - CUMULATIVE INTEREST SENSITIVITY GAP
[CHART]
[DESCRIPTION TO COME]
<PAGE> 28
Conversion Valuation Appraisal Report Page: 1 - 22
================================================================================
------------------------------------
NET WORTH AND CAPITAL
------------------------------------
At June 30, 1998, the Bank had capital well in excess of the minimum
requirements for all three regulatory capital requirements.
FIGURE 17 - CAPITAL ANALYSIS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
REGULATORY CAPITAL POSITION HISTORICAL
AT PERCENT OF
JUNE 30, 1998 ADJ. ASSETS
----------------------------------
$ IN THOUSANDS
<S> <C> <C>
GAAP CAPITAL $83,078 10.9%
==================================
TANGIBLE CAPITAL:
Capital Level $73,742 9.6%
Required $11,486 1.5%
------- ---
Excess: $62,256 8.1%
==================================
CORE CAPITAL:
Capital Level $73,742 9.6%
Required $22,972 3.0%
------- ---
Excess: $50,770 6.6%
==================================
TOTAL CAPITAL
Capital Level $73,708 17.3%
Required $33,913 8.0%
------- ---
Excess: $39,795 9.3%
==================================
- ----------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 29
Conversion Valuation Appraisal Report Page: 1 - 23
================================================================================
------------------------------------
INCOME AND EXPENSE TRENDS
------------------------------------
The Bank's annualized net income, for the six months ended June 30, 1998, of
$5.0 million was below the net income for the twelve month period ended December
31, 1997. The net income for the twelve month period ended December 31, 1996, is
low due to the one-time SAIF assessment. The Bank's one-time SAIF assessment was
$2.8 million on a pre-tax basis.
FIGURE 18 - NET INCOME CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 30
Conversion Valuation Appraisal Report Page: 1 - 24
================================================================================
Interest rate spread decreased by one basis point for the six month period ended
June 30, 1998 when compared to the same six month period in 1997. The decrease
is due to a one basis point lower asset yield, while the cost of funds remained
stable. The Bank's net interest margin decreased by six basis points when
comparing the two periods. The decrease is due to a 9.34% increase in interest
earning assets and only a 7.56% increase in net interest income.
FIGURE 19 - AVERAGE YIELDS AND COSTS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------------------------
1998 1997
-------------------------------------------------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
-------------------------------------------------------------------------
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Interest-earning assets:
Real estate loans $ 467,119 $ 18,377 7.87% $ 381,169 $ 15,479 8.12%
Consumer and other loans 19,809 913 9.22% 18,408 817 8.88%
Mortgage-backed securities 88,532 3,174 7.17% 103,089 3,768 7.31%
Investments 89,346 3,217 7.20% 105,350 3,522 6.69%
Other investments 36,788 1,146 6.23% 33,643 991 5.89%
--------- -------- ---- --------- -------- ----
Total Interest Earning Assets 701,594 26,827 7.65% 641,659 24,577 7.66%
Non-interest earning assets 46,527 38,244
--------- ---------
Total Assets 748,121 679,903
========= =========
Interest Bearing Liabilities
Deposits $ 571,282 11,976 4.19% $ 531,512 11,031 4.15%
Borrowed funds 77,967 2,679 6.87% 56,882 2,229 7.84%
--------- -------- ---- --------- -------- ----
Total Interest Bearing Liabilities 649,249 14,655 4.51% 588,394 13,260 4.51%
Non-interest-bearing liabilities 16,606 14,229
--------- ---------
Total Liabilities 665,855 602,623
--------- ---------
Shareholder's equity 82,266 77,280
--------- ---------
Total liabilities and retained earnings $ 748,121 $ 679,903
========= =========
Net interest income $ 12,172 $ 11,317
======== ========
Interest rate spread 3.14% 3.15%
==== ====
Net Yield on Interest-Earnings Assets 3.47% 3.53%
==== ====
Ratio of Average Interest-Earning assets to average
Interest-bearing liabilities 108.06% 109.05%
====== ======
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 31
Conversion Valuation Appraisal Report Page: 1 - 25
================================================================================
The following chart illustrates the Bank's spread and margin since December 31,
1993. Spread and margin have decreased since December 31, 1993. For the six
month period ended June 30, 1998, the Bank's spread and margin were 3.14% and
3.47%, respectively.
FIGURE 20 - SPREAD AND MARGIN CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 32
Conversion Valuation Appraisal Report Page: 1 - 26
================================================================================
The Bank's net income for the six month period ended June 30, 1998 was $2.5
million, which was a $224 thousand decrease from the $2.7 million net income
from June 30, 1997. The decrease in net income was primarily the result of
increases in operating expense of $1.0 million, the provision for loan losses of
$130 thousand and a decrease in other income of $106 thousand, offset in part by
the combination of an $855 thousand increase in net interest income and a $198
thousand decrease in the provision for income taxes. The noninterest expense
increased was due to compensation expense resulting from (i) hiring incentive
based loan originators; and (ii) the operating costs of two new branches.
FIGURE 21 - INCOME STATEMENT TRENDS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED THREE MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------------------------------------------------------
1998 1997 1997 1996 1996 1995 1994 1993
---------------------------------------------------------------------------------------------------
SELECTED OPERATING DATA: (DOLLARS IN THOUSANDS)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 26,827 $ 24,577 $ 50,316 $ 11,896 $ 43,889 $ 37,720 $ 34,130 $39,747
Interest expense 14,655 13,260 27,390 6,378 22,859 18,634 15,525 17,639
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Net interest income 12,172 11,317 22,926 5,518 21,030 19,086 18,605 22,108
Provision for loan losses 213 83 264 243 98 240 989 2,398
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Net interest income after
provision for loan losses 11,959 11,234 22,662 5,275 20,932 18,846 17,616 19,710
Non-interest income 1,756 1,862 4,185 1,225 3,544 3,394 3,317 5,093
Non-interest expense 9,846 8,805 18,561 4,644 19,800 14,903 14,939 15,614
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Income before income taxes
and extraordinary items 3,869 4,291 8,286 1,856 4,676 7,337 5,994 9,189
Income tax expense 1,358 1,556 2,930 696 761 2,763 2,257 3,788
Income before changes in
accounting method $ 2,511 $ 2,735 $ 5,356 $ 1,160 $ 3,915 $ 4,574 $ 3,737 $ 5,401
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Net income (loss) $ 0.51 $ 0.55 $ 1.09 $ 0.24 $ 0.80 $ 0.94 $ -- $ --
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Net income per share $ 0.49 $ 0.54 $ 1.06 $ 0.23 $ 0.79 $ 0.94 $ -- $ --
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Cash dividends per share $ 0.45 $ 0.45 $ 0.90 $ 0.20 $ 0.75 $ 0.59 $ -- $ --
---------- ---------- ---------- ---------- ---------- ---------- -------- -------
Basic weighted average
common shares outstanding 4,970,782 4,919,960 4,929,989 4,902,479 4,869,238 4,845,384 -- --
Diluted weighted average
common shares outstanding 5,116,956 5,021,739 5,054,853 4,951,820 4,936,763 4,882,658 -- --
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Offering Prospectus
<PAGE> 33
Conversion Valuation Appraisal Report Page: 1 - 27
================================================================================
The ROAA and ROAE have declined since September 30, 1993. The Bank's ROAA and
ROAE for the six month period ended June 30, 1998, were 0.67% and 6.10%,
respectively.
FIGURE 22 - PROFITABILITY TREND CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 34
Conversion Valuation Appraisal Report Page: 1 - 28
================================================================================
-------------------------------------
SUBSIDIARIES
-------------------------------------
The Bank currently has one active subsidiary, ComFed, Inc. which was formed in
February 1971 for the purpose of owning and operating an insurance agency,
Community Insurance Agency, which sells mortgage life insurance. ComFed, Inc.
also receives income and incurs related expenses from the sale of third party
mutual funds and annuities. Such third party mutual funds and annuities include
products widely marketed to the investing public and have investment advisors
that are not affiliated with ComFed, Inc. For the six months ended June 30,
1998, ComFed, Inc. reported net income of $67,000. At June 30, 1998, the Bank
had an equity investment in ComFed, Inc. of $140,000.
-------------------------------------
CONTINGENCIES
-------------------------------------
The Association is involved in routine legal proceedings occurring in the
ordinary course of business which in the opinion of management, in the
aggregate, will not have a material adverse effect on the consolidated financial
condition and results of operations of the Association.
The Association recently completed its investigation of a defalcation by a
former employee which may have occurred over a period of several years. The
Association maintains insurance to cover such losses with a claim deductible of
$200,000. A reserve for the amount of the deductible was established during the
year ended September 30, 1996. The Association notified its insurance company of
the potential claim and the insurance company acknowledged coverage. The
insurance company has completed its due diligence related to the claim. The
Association and insurance company are currently negotiating the terms of a
settlement of the Association's claim. The terms of such settlement may not
amount to the entire amount of the Association's claim in excess of the
deductible. However, even in such event, management does not believe that the
claim will have a material adverse effect on the financial position or results
of its operations.
<PAGE> 35
Conversion Valuation Appraisal Report Page: 1 - 29
================================================================================
2. MARKET AREA ANALYSIS
------------------------
MARKET AREA DEMOGRAPHICS
------------------------
The following tables summarize the demographics for the Bank's markets.
FIGURE 23 - POPULATION DEMOGRAPHICS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
TONEY PALM RIVIERA
PENNA NORTH PALM BEACH BEACH- W. PALM
JUPITER- & PALM BEACH GARDENS- SINGER TEQUESTA- BEACH-
FLORIDA BLUFFS CHASEWOOD BEACH GARDENS PGA ISLAND GALLERY VILLAGE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LAND AREA (miles) 53,936.98 5.85 17.12 9.39 14.09 47.83 8.29 10.35 6.87
POPULATION
1997 ESTIMATE 14,564,508 12,416 27,114 15,828 25,850 25,051 30,444 13,434 18,503
2002 PROJECTION 15,644,470 13,743 29,928 15,090 29,718 29,782 30,178 14,050 20,613
PROJECTED GROWTH 1997 TO 2002 7.42% 10.69% 10.38% 0.51% 14.96% 18.89% -0.87% 4.59% 11.40%
POPULATION DENSITY 1997
(persons/sq mile) 270.0 2,122.0 1,583.9 1,684.9 1,834.9 523.7 3,671.9 1,298.5 2,694.1
POPULATION BY SEX -- 1997 EST 14,564.508 12,416 27,114 15,828 25,850 25,051 30,444 13,434 18,503
MALE 48.41% 48.70% 49.46% 46.56% 48.55% 48,95% 47.03% 47.00% 49.45%
FEMALE 51.59% 51.30% 50.54% 53.44% 51.45% 51.05% 52.97% 53.00% 50.55%
MARITAL STATUS 11,796,397 11,050 21,021 14,357 21,043 20,472 23,252 11,789 15,319
SINGLE 42.97% 33.10% 38.12% 40.45% 42.25% 33.58% 54.38% 32.41% 51.37%
MARRIED 57.03% 66.90% 61.88% 59.55% 57.75% 66.42% 45.62% 67.59% 48.63%
POPULATION BY RACE -- 1997 EST 14,564,508 12,416 27,114 15,828 25,850 25,051 30,444 13,434 18,503
WHITE 68.64% 96.23% 89.46% 95.46% 91.64% 89.72% 28.80% 95.93% 73.02%
BLACK 15.05% 0.43% 5.16% 0.76% 1.49% 2.98% 66.39% 0.68% 14.09%
INDIAN 0.34% 0.15% 0.18% 0.16% 0.18% 0.28% 0.17% 0.03% 0.34%
ASIAN 1.70% 0.97% 1.29% 0.92% 2.06% 2.49% 0.87% 0.74% 1.61%
HISPANIC 14.27% 2.21% 3.91% 2.70% 4.62% 4.54% 3.76% 2.62% 10.94%
POPULATION BY AGE -- 1997 EST 14,564,508 12,416 27,114 15,828 25,850 25,051 30,444 13,434 18,503
UNDER 6 YEARS 7.71% 4.15% 9.48% 3.56% 7.06% 7.17% 10.13% 4.70% 7.44%
6 TO 17 YEARS 14.74% 8.88% 16.55% 7.29% 15.30% 14.42% 17.39% 9.87% 11.98%
15 TO 24 YEARS 7.62% 3.84% 6.89% 3.94% 6.84% 5.89% 7.58% 4.39% 6.46%
25 TO 34 YEARS 14.42% 11.39% 16.85% 10.73% 13.55% 12.45% 13.30% 9.81% 23.25%
35 TO 44 YEARS 15.08% 14.03% 19.39% 11.05% 17.24% 17.92% 13.40% 12.29% 17.00%
45 TO 54 YEARS 12.08% 15.75% 12.98% 12.08% 15.65% 15.52% 11.43% 12.83% 10.67%
55 TO 64 YEARS 9.39% 16.74% 6.85% 13.81% 9.30% 10.05% 9.58% 12.92% 7.95%
65 + YEARS 18.96% 25.22% 11.01% 37.54% 15.06% 16.57% 17.19% 33.19% 15.26%
MEDIAN AGE 38.6 49.9 35.1 56.1 39.2 40.8 36.2 51.9 35.5
POPULATION 25+ BY EDUCATION
LEVEL 10,185,507 10,321 18,189 13,487 18,302 18,165 19,758 10,887 13,715
ELEMENTARY 9.25% 1.12% 3.27% 2.21% 3.94% 1.72% 10.65% 2.36% 5.84%
SOME HIGH SCHOOL 15.83% 5.45% 11.43% 8.51% 10.40% 5.75% 21.55% 8.04% 13.96%
HIGH SCHOOL GRADUATE 30.12% 24.83% 29.78% 25.68% 28.49% 21.38% 30.92% 26.12% 28.13%
SOME COLLEGE 26.25% 29.49% 30.56% 30.36% 31.60% 30.98% 21.43% 30.13% 26.40%
COLLEGE DEGREE 18.56% 39.10% 24.97% 33.23% 25.56% 40.17% 15.46% 33.35% 25.67%
</TABLE>
- ----------------
Source: Claritas
<PAGE> 36
Conversion Valuation Appraisal Report Page: 1-30
================================================================================
FIGURE 24 - POPULATION DEMOGRAPHICS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
JENSEN BEACH
LAKE HOBE - HUTCHINSON PALM PORT FORT PORT SAINT ST. LUCIE VERO
WORTH SOUND ISLAND CITY SALERNO PIERCE LUCIE WEST BEACH
- ---------------------------------------------------------------------------------------------------------------------------------
POPULATION CHARACTERISTICS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LAND AREA (miles) 10.95 69.35 13.75 173.63 26.92 18.97 11.56 18.46 72.68
POPULATION
1997 ESTIMATE 31,968 14,085 14,934 15,444 23,235 21,486 25,743 3,586 9,958
2002 PROJECTION 35,419 15,144 16,154 18,006 24,658 22,588 28,441 4,438 10,043
PROJECTED GROWTH 1997 TO 2002 10.80% 7.52% 8.17% 16.59% 6.12% 5.13% 10.48% 23.76% 0.85%
POPULATION DENSITY 1997
(persons/sq mile) 2,920.0 203.1 1,085.9 88.9 863.2 1,132.6 2,227.1 194.2 137.0
POPULATION BY SEC - 1997 EST 31,968 14,085 14,934 15,444 23,235 21,486 25,743 3,586 9,958
MALE 48.38% 47.89% 48.67% 48.70% 48.37% 48.32% 48.74% 50.95% 47.70%
FEMALE 51.62% 52.11% 51.33% 51.30% 51.63% 51.68% 51.26% 49.05% 52.30%
MARITAL STATUS 25,089 12,016 13,385 13,151 19,469 17,859 20,282 2,708 8,790
SINGLE 39.80% 34.35% 34.34% 29.54% 34.34% 37.01% 29.92% 30.50% 30.58%
MARRIED 60.20% 65.65% 65.66% 70.46% 65.66% 62.99% 70.08% 69.50% 69.42%
POPULATION BY RACE - 1997 EST 31,968 14,085 14,934 15,444 23,235 21,486 25,743 3,586 9,958
WHITE 79.04% 92.25% 96.03% 96.16% 88.83% 90.30% 87.10% 83.21% 97.07%
BLACK 3.23% 4.44% 1.23% 0.39% 4.63% 5.00% 6.19% 9.70% 1.39%
INDIAN 0.23% 0.36% 0.08% 0.23% 0.25% 0.32% 0.30% 0.22% 0.05%
ASIAN 1.91% 0.85% 0.88% 1.05% 0.74% 0.91% 1.59% 1.20% 0.46%
HISPANIC 15.58% 2.09% 1.77% 2.17% 5.55% 3.47% 4.82% 5.66% 1.03%
POPULATION BY AGE - 1997 EST 31,968 14,085 14,934 15,444 23,235 21,486 25,743 3,586 9,958
UNDER 6 YEARS 9.21% 5.79% 3.87% 5.81% 6.58% 6.53% 7.99% 10.54% 4.72%
6 TO 17 YEARS 15.70% 11.40% 8.36% 11.77% 12.45% 13.70% 17.11% 17.74% 9.63%
15 TO 24 YEARS 6.65% 4.66% 3.64% 5.20% 5.30% 6.64% 6.13% 6.72% 4.28%
25 TO 34 YEARS 16.48% 12.23% 10.59% 11.57% 13.12% 12.00% 11.63% 17.35% 8.76%
35 TO 44 YEARS 16.42% 12.87% 12.18% 12.83% 13.65% 14.28% 16.02% 17.18% 8.98%
45 TO 54 YEARS 11.05% 10.20% 11.06% 12.86% 10.37% 11.80% 12.18% 11.15% 7.81%
55 TO 64 YEARS 7.29% 11.95% 15.90% 12.96% 11.70% 10.06% 9.44% 7.81% 11.25%
65+ YEARS 17.20% 30.89% 34.42% 27.00% 26.83% 24.98% 19.50% 11.52% 44.58%
MEDIAN AGE 36.1 47.7 55.2 47.0 44.2 42.8 39.4 33.6 61.9
POPULATION 25+ BY EDUCATION LEVEL 21,877 11,007 12,565 11,925 17,582 15,712 17,703 2,331 8,103
ELEMENTARY 5.66% 6.50% 4.04% 3.54% 6.14% 7.59% 5.74% 4.68% 4.22%
SOME HIGH SCHOOL 16.32% 14.54% 12.11% 11.33% 12.98% 17.79% 15.70% 17.67% 15.17%
HIGH SCHOOL GRADUATE 36.94% 35.94% 32.01% 26.78% 34.01% 32.78% 35.32% 39.60% 33.35%
SOME COLLEGE 27.92% 25.09% 28.64% 30.69% 26.36% 27.77% 31.08% 30.46% 26.24%
COLLEGE DEGREE 13.16% 17.92% 23.21% 27.66% 20.51% 14.06% 12.17% 7.59% 21.03%
</TABLE>
Source: Claritas
<PAGE> 37
Conversion Valuation Appraisal Report Page: 1-31
================================================================================
FIGURE 25 - HOUSEHOLD CHARACTERISTICS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TONEY PENNA PALM BEACH
JUPITER- & NORTH PALM PALM BEACH GARDENS-
FLORIDA BLUFFS CHASEWOOD BEACH GARDENS PGA
- --------------------------------------------------------------------------------------------------------------
HOUSEHOLD CHARACTERISTICS
<S> <C> <C> <C> <C> <C> <C>
HOUSEHOLDS
1997 ESTIMATE 5,704,295 5,742 10,022 7,974 10,569 9,448
HOUSEHOLDS
AVG PERSONS PER HH 1997 EST 2.55 2.16 2.71 1.98 2.45 2.65
POPULATION BY HOUSEHOLD TYPE 5,704,295 5,742 10,022 7,974 10,569 9,448
FAMILY HOUSEHOLDS 67.73% 68.44% 72.56% 56.73% 66.90% 73.63%
NON-FAMILY HOUSEHOLDS 26.95% 31.21% 25.73% 42.54% 31.75% 25.80%
GROUP QUARTERS 5.32% 0.35% 1.71% 0.73% 1.34% 0.56%
HOUSEHOLDS BY INCOME-1997 EST 5,704,295 5,742 10,022 7,974 10,569 9,448
UNDER $15,000 19.62% 6.51% 7.92% 13.72% 12.87% 5.87%
$15,000 TO $25,000 17.16% 7.31% 10.67% 13.79% 13.31% 7.28%
$25,000 TO $35,000 15.75% 7.14% 11.99% 12.90% 10.88% 6.73%
$35,000 TO $50,000 17.65% 15.97% 17.26% 15.99% 18.12% 10.48%
$50,000 TO $75,000 16.80% 19.80% 27.13% 18.72% 21.40% 23.37%
$75,000 TO $100,000 6.76% 15.26% 12.08% 10.13% 11.53% 15.90%
$75,000 TO $150,000 4.33% 14.77% 9.89% 7.83% 9.36% 15.57%
$150,000 TO $250,000 1.14% 7.78% 2.20% 3.14% 2.01% 9.28%
$250,000 TO $500,000 0.52% 2.93% 0.61% 1.71% 0.41% 4.18%
$500,000 OR MORE 0.27% 2.53% 0.25% 2.07% 0.11% 1.33%
MEDIAN HOUSEHOLD INCOME-1997 EST $33,067 $66,258 $51,556 $43,039 $45,499 $71,016
MEDIAN FAMILY INCOME-1997 EST $39,129 $77,289 $56,086 $56,929 $51,519 $78,003
HOUSEHOLDS BY NUMBER OF VEHICLES 5,704,295 5,742 10,022 7,974 10,569 9,448
NO VEHICLE 8.78% 1.62% 2.56% 6.53% 4.03% 1.83%
1 VEHICLE 40.61% 37.44% 33.30% 47.10% 35.82% 31.90%
2 VEHICLES 37.44% 47.20% 50.17% 34.68% 44.57% 49.02%
5+ VEHICLES 13.17% 13.74% 13.97% 11.69% 15.57% 17.25%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RIVIERA
BEACH- W. PALM
SINGER TEQUESTA- BEACH-
ISLAND GALLERY VILLAGE
- ------------------------------------------------------------------
HOUSEHOLD CHARACTERISTICS
<S> <C> <C> <C>
HOUSEHOLDS
1997 ESTIMATE 11,526 6,019 8,357
HOUSEHOLDS
AVG PERSONS PER HH 1997 EST 2.64 2.23 2.21
POPULATION BY HOUSEHOLD TYPE 11,526 6,019 8,357
FAMILY HOUSEHOLDS 65.57% 69.06% 52.32%
NON-FAMILY HOUSEHOLDS 32.77% 30.79% 45.33%
GROUP QUARTERS 1.66% 0.15% 2.36%
HOUSEHOLDS BY INCOME-1997 EST 11,526 6,019 8,357
UNDER $15,000 21.86% 11.61% 13.21%
$15,000 TO $25,000 18.76% 9.60% 12.49%
$25,000 TO $35,000 12.71% 10.18% 13.23%
$35,000 TO $50,000 15.81% 15.80% 21.53%
$50,000 TO $75,000 16.56% 18.77% 21.41%
$75,000 TO $100,000 5.93% 11.33% 9.85%
$75,000 TO $150,000 4.49% 12.91% 6.57%
$150,000 TO $250,000 1.82% 5.33% 1.02%
$250,000 TO $500,000 1.19% 2.74% 0.53%
$500,000 OR MORE 0.88% 1.71% 0.17%
MEDIAN HOUSEHOLD INCOME-1997 EST $31,547 $52,866 $42,211
MEDIAN FAMILY INCOME-1997 EST $36,241 $64,907 $44,470
HOUSEHOLDS BY NUMBER OF VEHICLES 11,526 6,019 8,357
NO VEHICLES 14.58% 2.59% 5.35%
1 VEHICLE 44.68% 38.06% 45.63%
2 VEHICLES 29.46% 44.82% 40.34%
5+ VEHICLES 11.28% 14.52% 8.69%
</TABLE>
Source: Claritas
FIGURE 26 - HOUSEHOLD CHARACTERISTICS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
JENSEN BEACH
LAKE HOBE -HUTCHINSON
WORTH SOUND ISLAND PALM CITY PORT SALERNO FORT PIERCE
- ----------------------------------------------------------------------------------------------------------------
HOUSEHOLD CHARACTERISTICS
<S> <C> <C> <C> <C> <C> <C>
HOUSEHOLDS
1997 ESTIMATE 12,178 5,999 7,269 6,539 9,890 8,842
HOUSEHOLDS
AVG PERSONS PER HH 1997 EST 2.63 2.35 2.05 2.36 2.35 2.43
POPULATION BY HOUSEHOLD TYPE 12,178 5,999 7,269 6,539 9,890 8,842
FAMILY HOUSEHOLDS 71.42% 69.46% 63.10% 74.46% 70.64% 68.94%
NON-FAMILY HOUSEHOLDS 25.96% 23.00% 36.41% 25.42% 27.80% 28.56%
GROUP QUARTERS 2.62% 7.53% 0.48% 0.12% 1.57% 2.50%
HOUSEHOLDS BY INCOME-1997 EST 12,178 5,999 7,269 6,539 9,890 8,842
UNDER $15,000 10.12% 17.12% 14.35% 9.44% 12.64% 20.26%
$15,000 TO $25,000 12.79% 18.30% 16.65% 9.89% 15.12% 19.03%
$25,000 TO $35,000 16.55% 17.04% 15.99% 11.41% 16.36% 17.11%
$35,000 TO $50,000 24.94% 17.00% 17.69% 17.82% 19.04% 18.05%
$50,000 TO $75,000 23.49% 16.07% 17.88% 24.24% 18.00% 15.69%
$75,000 TO $100,000 7.42% 7.02% 7.99% 10.54% 9.00% 6.08%
$75,000 TO $150,000 3.96% 4.75% 6.69% 10.12% 6.27% 2.53%
$150,000 TO $250,000 0.58% 1.08% 1.54% 3.69% 1.99% 0.64%
$250,000 TO $500,000 0.11% 0.68% 0.89% 1.73% 0.86% 0.48%
$500,000 OR MORE 0.03% 0.93% 0.33% 1.13% 0.73% 0.12%
MEDIAN HOUSEHOLD INCOME-1997 EST $40,983 $33,354 $36,925 $51,107 $39,233 $31,161
MEDIAN FAMILY INCOME-1997 EST $44,699 $39,341 $45,141 $57,549 $44,042 $36,595
HOUSEHOLDS BY NUMBER OF VEHICLES 12,178 5,999 7,269 6,539 9,890 8,842
NO VEHICLES 3.32% 4.88% 5.23% 2.62% 3.69% 4.96%
1 VEHICLE 41.32% 44.51% 47.75% 41.26% 41.28% 42.41%
2 VEHICLES 41.91% 40.32% 36.98% 44.06% 44.37% 38.11%
5+ VEHICLES 13.45% 10.29% 10.04% 12.07% 10.66% 14.51%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
PORT SAINT ST. LUCIE
LUCIE WEST VERO BEACH
- ------------------------------------------------------------------------
HOUSEHOLD CHARACTERISTICS
<S> <C> <C> <C>
HOUSEHOLDS
1997 ESTIMATE 9,403 1,200 4,641
HOUSEHOLDS
AVG PERSONS PER HH 1997 EST 2.74 2.99 2.15
POPULATION BY HOUSEHOLD TYPE 9,403 1,200 4,641
FAMILY HOUSEHOLDS 80.21% 81.50% 69.75%
NON-FAMILY HOUSEHOLDS 19.74% 6.50% 26.18%
GROUP QUARTERS 0.05% 12.00% 4.07%
HOUSEHOLDS BY INCOME-1997 EST 9,403 1,200 4,641
UNDER $15,000 14.35% 12.75% 13.75%
$15,000 TO $25,000 18.16% 19.42% 17.58%
$25,000 TO $35,000 21.31% 20.00% 15.97%
$35,000 TO $50,000 22.57% 26.67% 22.28%
$50,000 TO $75,000 15.59% 14.08% 16.42%
$75,000 TO $100,000 5.10% 4.00% 6.66%
$75,000 TO $150,000 2.46% 2.92% 4.35%
$150,000 TO $250,000 0.20% 0.08% 2.20%
$250,000 TO $500,000 0.17% 0.08% 0.69%
$500,000 OR MORE 0.09% 0.00% 0.28%
MEDIAN HOUSEHOLD INCOME-1997 EST $32,622 $33,898 $36,720
MEDIAN FAMILY INCOME-1997 EST $35,926 $35,967 $41,547
HOUSEHOLDS BY NUMBER OF VEHICLES 9,403 1,200 4,641
NO VEHICLES 1.20% 0.75% 5.21%
1 VEHICLE 35.46% 33.08% 55.87%
2 VEHICLES 48.94% 52.00% 28.40%
5+ VEHICLES 14.40% 14.17% 10.51%
</TABLE>
Source: Claritas
<PAGE> 38
Conversion Valuation Appraisal Report Page: 1 - 32
===============================================================================
MARKET AREA DEPOSIT CHARACTERISTICS
The following tables summarize the deposit characteristics of each of the Bank's
markets. The Bank's markets were defined as the zip code in which the Bank is
located.
FIGURE 27 - JUPITER (BLUFFS) MARKET AREA
JUPITER: Market Share by Institution Type
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL $269,973 100.00% $86,530 47.17% $33,747 8 100.0%
=====================================================================================================================
Commercial Banks $140,943 52.21% $60,194 74.54% $28,189 5 83.5% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $129,030 47.79% $26,336 25.65% $43,010 3 127.4% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
JUPITER: Market Share by Institution
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL $269,973 100.00% $86,530 47.17% $33,747 8 100.0%
=====================================================================================================================
ADMIRALTY BK $10,256 3.80% $ 6,384 164.88% $10,256 1 30.4% CB
BARNETT BK NA $46,745 17.31% $ 8,971 23.75% $46,745 1 135.8% CB
COMMUNITY SAVINGS, FA $35,877 13.29% $ 7,536 26.59% $35,877 1 106.3% TH
FIRST BANK OF FLORIDA $42,487 15.74% $22,280 110.26% $42,487 1 125.9% TH
FIRST UNION NB $21,030 7.79% $ 6,326 43.02% $21,030 1 62.3% CB
GREAT WESTERN BANK, A FSB $50,666 18.77% $(3,480) -6.43% $50,666 1 150.1% TH
PALM BEACH NB&TC $38,178 14.14% $38,178 0.00% $38,178 1 113.1% CB
SUNTRUST BK SOUTH FL NA $24,734 9.16% $ 335 1.37% $24,734 1 73.3% CB
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 39
Conversion Valuation Appraisal Report Page: 1 - 33
==============================================================================
FIGURE 28 - JUPITER (TONEY PENNA & CHASEWOOD) MARKET AREA
JUPITER: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $GROWTH %GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $430,581 100.00% $49,933 13.12% $33,122 13 100.0%
=====================================================================================================================
Commercial Banks $314,897 73.13% $21,581 7.36% $39,362 8 118.8% CB
Savings Banks $ 52,248 12.13% $ 6,462 14.11% $52,248 1 157.7% SB
Thrifts $ 63,436 14.73% $21,890 52.69% $15,859 4 47.9% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
JUPITER: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $GROWTH %GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $430,581 100.00% $ 49,933 13.12% $33,122 13 100.0%
=====================================================================================================================
BANKATLANTIC A FSB $ 10,010 2.32% $ 4,392 78.18% $10,010 1 30.2% CB
BARNETT BK NA $133,038 30.90% $(12,011) -8.28% $66,519 2 200.8% CB
COMMUNITY SAVINGS, FA $ 53,247 12.37% $ 17,319 48.20% $26,624 1 80.4% TH
FIDELITY FSB $ 179 0.04% $ 179 0.00% $ 179 1 0.5% TH
FIRST NB OF LAKE PARK $ 0 0.00% $ 0 0.00% $ 0 1 0.0% CB
FIRST UNION NB $111,291 25.85% $ 25,214 29.29% $37,097 1 112.0% TH
GREAT SOUTHERN BK $ 331 0.08% $ 331 0.00% $ 331 1 1.0% CB
HOME SVG OF AMERICA $ 52,248 12.13% $ 6,462 14.11% $52,248 1 157.7% SB
REPUBLIC SECURITY BK $ 37,496 8.71% $ 2,172 6.15% $37,496 1 113.2% CB
SUNTRUST BK SOUTH FL NA $ 32,741 7.60% $ 5,875 21.87% $32,741 1 98.9% CB
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 29 - NORTH PALM BEACH MARKET AREA
N PALM BCH GARDENS: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $GROWTH %GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $611.651 100.00% $188,872 44.67% $38,228 16 100.0%
=====================================================================================================================
Commercial Banks $448,007 73.25% $155,175 52.99% $37,334 12 97.7% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $163,644 26.75% $ 33,697 25.93% $40,911 4 107.0% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
N PALM BCH GARDENS: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $GROWTH %GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $611,651 100.00% $188,872 44.67% $38,228 16 100.0%
- ---------------------------------------------------------------------------------------------------------------------
ADMIRALTY BK $ 13,782 2.25% $ 5,057 57.96% $13,782 1 36.1% CB
BANKATLANTIC, A FSB $ 45,403 7.42% $ 19,970 78.52% $22,702 2 59.4% TH
BARNETT BK NA $ 73,505 12.02% $ 45,159 159.31% $36,753 2 96.1% CB
COMMUNITY SAVINGS, FA $ 64,206 10.50% $ 11,820 22.56% $64,206 1 168.0% TH
ENTERPRISE NB PALM BEACH $ 73,597 12.03% $ 54,200 279.42% $73,597 1 192.5% CB
FIDELITY FSB $ 54,035 8.83% $ 1,907 3.66% $54,035 1 141.3% TH
FIRST UNION NB $110,029 17.99% $ 5,655 5.42% $55,015 2 143.9% CB
NATIONSBANK NA $ 52,882 8.65% $ 19,061 56.36% $26,441 2 69.2% CB
NBD BK $ 11,460 1.87% $ 3,833 50.26% $11,460 1 30.0% CB
NORTHERN TRUST BK OF FL NA $ 38,897 6.36% $ 28,054 258.73% $38,897 1 101.7% CB
PALM BEACH NB&TC $ 42,178 6.90% $ (6,709) -13.72% $42,178 1 110.3% CB
SUNTRUST BK SOUTH FL NA $ 31,677 5.18% $ 865 2.81% $31,677 1 82.9% CB
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 40
Conversion Valuation Appraisal Report Page: 1 - 34
==============================================================================
FIGURE 30 - PALM BEACH GARDENS MARKET AREA
PALM BEACH GARDE: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $GROWTH %GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $450,326 100.00% $44,743 11.03% $26,490 17 100.0%
================================================================================================================
Commercial Banks $156,527 34.76% $34,026 27.78% $19,566 8 73.9% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $281,531 62.52% $ 8,084 2.96% $35,191 8 132.8% TH
Credit Unions $ 12,268 2.72% $ 2,633 27.33% $12,268 1 46.3% CU
</TABLE>
PALM BEACH GARDE: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $GROWTH %GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL $450,326 100.00% $ 44,743 11.03% $26,490 17 100.0%
================================================================================================================
1ST UNITED BK $ 8,787 1.95% $ 8,787 0.00% $ 8,787 1 33.2% CB
ADMIRALTY BK $ 15,601 3.46% $ 3,905 33.39% $15,601 1 58.9% CB
BARNETT BK NA $ 38,185 8.48% $ 3,754 10.90% $38,185 1 144.2% CB
CITIBANK, FSB $ 45,262 10.05% $(11,093) -19.68% $45,262 1 170.9% TH
COMERICA BANK & TRUST, FSB $ 14,072 3.12% $ 118 0.85% $14,072 1 53.1% TH
COMMUNITY SAVINGS, FA $ 51,094 11.35% $ 5,935 13.14% $51,094 1 192.9% TH
FIDELITY FSB $ 25,267 5.61% $ 19,409 331.32% $25,267 1 95.4% TH
FIRST BANK OF FLORIDA $ 27,301 6.06% $ 12,748 87.60% $27,301 1 103.1% TH
FIRST UNION NB $ 43,158 9.58% $ 17,988 71.47% $21,579 2 81.5% CB
GREAT WESTERN BANK, A FSB $ 93,533 20.77% $ (8,426) -8.26% $46,767 2 176.5% TH
PALM BEACH NB&TC $ 5,700 1.27% $ 5,700 0.00% $ 5,700 1 21.5% CB
PGA CU $ 12,268 2.72% $ 2,633 27.33% $12.268 1 46.3% CU
REPUBLIC SECURITY BK $ 28,110 6.24% $ (405) -1.42% $28,110 1 106.1% CB
SOUTHBANK, A FSB $ 25,002 5.55% $(10,607) -29.79% $25,002 1 94.4% TH
SUNTRUST BK SOUTH FL NA $ 16,986 3.77% $ (5,703) -25.14% $16,986 1 64.1% CB
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 31 - PALM BEACH GARDENS (PGA) MARKET AREA
PALM BCH GARDENS: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $226,599 100.00% $24,995 12.40% $ 56,650 4 100.0%
- ---------------------------------------------------------------------------------------------------------------------
Commercial Banks $ 2,770 1.22% $ 2,770 0.00% $ 2,770 1 4.9% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $ 43,099 19.02% $ 6,172 16.71% $ 21,550 2 38.0% TH
Credit Unions $180,730 79.76% $16,053 9.75% $180,730 1 319.0% CU
</TABLE>
PALM BCH GARDENS: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $226,599 100.00% $ 24,995 12.40% $ 56,650 4 100.0%
- ---------------------------------------------------------------------------------------------------------------------
COMMUNITY SAVINGS, FA $ 9,366 4.13% $ 9,366 0.00 $ 9,366 1 16.5% TH
FLORIDA AIRCRAFT FCU $180,730 79.76% $ 16,053 9.75% $180,730 1 319.0% CU
GREAT WESTERN BANK, A FSB $ 33,733 14.89% $ (3,194) -8.65% $ 33,733 1 59.5% TH
PALM BEACH NB&TC $ 2,770 1.22% $ 2,770 0.00% $ 2,770 1 4.9% CB
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 41
Conversion Valuation Appraisal Report Page: 1 - 35
================================================================================
FIGURE 32 - RIVIERA BEACH (RIVIERA BEACH & SINGER ISLAND) MARKET AREA
SINGER ISLAND: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total............................. $178,924 100.00% $(46,080) -20.48% $25,561 7 100.0%
==================================================================================================================
Commercial Banks.................. $ 98,137 54.85% $(24,204) -19.78% $24,534 4 96.0%CB
Savings Banks..................... $ 0 0.00% $ 0 0.00% $ 0 0 0.0%SB
Thrifts........................... $ 80,787 45.15% $(21,876) -21.31% $26,929 3 105.4%TH
Credit Unions..................... $ 0 0.00% $ 0 0.00% $ 0 0 0.0%CU
</TABLE>
SINGER ISLAND: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total............................. $178,924 100.00% $(46,080) -20.48% $25,561 7 100.0%
==================================================================================================================
1st UNITED BK..................... $ 11,924 6.66% $ 2,446 25.81% $11,924 1 46.6%CB
BARNETT BK NA..................... $ 76,127 42.55% $(28,069) -26.94% $38,064 2 148.9%CB
COMMUNITY SAVINGS, FA............. $ 50,796 28.39% $(24,457) -32.50% $25,398 2 99.4%TH
FIDELITY FSB...................... $ 29,991 16.76% $ 2,581 9.42% $29,991 1 117.3%TH
FIRST UNION NB.................... $ 10,086 5.64% $ 1,419 16.37% $10,086 1 39.5%CB
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 33 - TEQUESTA (TEQUESTA & GALLERY SQUARE) MARKET AREA
TEQUESTA: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total............................. $189,606 100.00% $ 39,583 26.38% $23,701 8 100.0%
==================================================================================================================
Commercial Banks.................. $ 68,085 35.91% $ 17,201 33.80% $22,695 3 95.8%CB
Savings Banks..................... $ 0 0.00% $ 0 0.00% $ 0 0 0.0%SB
Thrifts........................... $121,521 64.09% $ 22,382 22.58% $24,304 5 102.5%TH
Credit Unions..................... $ 0 0.00% $ 0 0.00% $ 0 0 0.0%CU
</TABLE>
TEQUESTA: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total............................. $189,606 100.00% $ 39,583 26.38% $23,701 8 100.0%
==================================================================================================================
1st UNITED BK..................... $ 40,814 21.53% $ (4,285) -9.50% $40,814 1 172.2%CB
BANKATLANTIC, A FSB............... $ 13,258 6.99% $ 6,407 93.52% $13,258 1 55.9%TH
COMMUNITY SAVINGS, FA............. $ 68,996 36.39% $ 7,096 11.46% $34,498 2 145.6%TH
FIDELITY FSB...................... $ 36,438 19.22% $ 6,050 19.91% $36,438 1 153.7%TH
NATIONSBANK NA.................... $ 12,739 6.72% $ 6,954 120.21% $12,739 1 53.7%CB
SUNTRUST BK SOUTH FL NA........... $ 14,532 7.66% $ 14,532 0.00% $14,532 1 61.3%CB
WILMINGTON TRUST FSB.............. $ 2,829 1.49% $ 2,829 0.00% $ 2,829 1 11.9%TH
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 42
Conversion Valuation Appraisal Report Page: 1 - 36
================================================================================
FIGURE 34 - WEST PALM BEACH (VILLAGE COMMONS) MARKET AREA
W PALM BEACH: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
Institution 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $507,831 100.00% $ 19,392 3.97% $31,739 16 100.0%
========================================================================================================
Commercial Banks $306,768 60.41% $(52,151) (14.53)% $34,085 9 107.4% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $197,940 38.98% $ 69,972 54.68% $32,990 6 103.9% TH
Credit Unions $ 3,123 0.61% $ 1,571 101.22% $ 3,123 1 9.8% CU
</TABLE>
W PALM BEACH: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
Institution 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $507,831 100.00% $ 19,392 3.97% $31,739 16 100.0%
========================================================================================================
1ST UNITED BK $ 16,070 3.16% $ 1,615 11.17% $16,070 1 50.6% CB
APP FCU $ 3,123 0.61% $ 1,571 101.22% $ 3,123 1 9.8% CU
BANKUNITED, FSB $ 40,450 7.97% $ 40,450 0.00% $40,450 1 127.4% TH
BARNETT BK NA $ 73,687 14.51% $(29,250) -28.42% $36,844 2 116.1% CB
CAPITAL BK $ 10,142 2.00% $(10,111) -49.92% $10,142 1 32.0% CB
CHARTER BANK $ 0 0.00% $(17,095) -100.00% $ 0 0 0.0% TH
CITIZENS FED BK A FSB $ 0 0.00% $ 0 0.00% $ 0 0 0.0% TH
COMMUNITY SAVINGS, FA $ 29,115 5.73% $ 15,979 121.64% $29,115 1 91.7% TH
FIDELITY FSB $ 19,996 3.94% $ 10,526 111.15% $19,996 1 63.0% TH
FIRST BANK OF FLORIDA $ 59,868 11.79% $ 4,079 7.31% $59,868 1 188.6% TH
FIRST UNION NB $ 71,740 14.13% $(24,556) -25.50% $71,740 1 226.0% CB
FIRST UNION NB OF FLORIDA $ 0 0.00% $(10,520) -100.00% $ 0 0 0.0% CB
GREAT WESTERN BANK, A FSB $ 25,286 4.98% $ 2,682 11.87% $25,286 1 79.7% TH
MACKINAC SAVINGS BANK FSB $ 23,225 4.57% $ 13,351 135.21% $23,225 1 73.2% TH
NATIONSBANK NA $ 37,722 7.43% $ 17,061 82.58% $37,722 1 118.8% CB
REPUBLIC SECURITY BK $ 20,360 4.01% $(17,307) -45.95% $20,360 1 64.1% CB
SOUTHTRUST BK NA $ 35,273 6.95% $ 35,273 0.00% $35,273 1 111.1% CB
SUNTRUST BK SOUTH FL NA $ 41,774 8.23% $(14,356) -25.58% $41,774 1 131.6% CB
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 43
Conversion Valuation Appraisal Report Page: 1-37
===============================================================================
FIGURE 35 -- LAKE WORTH MARKET AREA
LAKE WORTH: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $327,036 100.00% $68,502 26.50% $36,337 9 100.0%
- ---------------------------------------------------------------------------------------------------------------
Commercial Banks $153,791 47.03% $43,148 39.00% $30,758 5 84.6%CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0%SB
Thrifts $173,245 52.97% $25,354 17.14% $43,311 4 119.2%TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0%CU
</TABLE>
LAKE WORTH: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $327,036 100.00% $68,502 26.50% $36,337 9 100.0%
- ---------------------------------------------------------------------------------------------------------------
BARNETT BK NA $ 41,118 12.57% $(6,511) -13.67% $41,118 1 113.2%CB
CHASE FEDERAL BANK, A FSB $ 0 0.00% $ 0 0.00% $ 0 0 0.0%TH
CROWN BANK, A FSB $ 24,075 7.36% $14,902 162.46% $24,075 1 66.3%TH
FIRST BANK OF FLORIDA $ 17,914 5.48% $17,914 0.00% $17,914 1 49.3%TH
FIRST UNION NB $ 60,680 18.55% $43,760 258.63% $60,680 1 167.0%CB
GREAT WESTERN BANK, A FSB $131,256 40.14% $(7,462) -5.38% $65,628 2 180.6%TH
NATIONSBANK NA $ 443 0.14% $ 443 0.00% $ 443 1 1.2%CB
SUNTRUST BK SOUTH FL NA $ 34,723 10.62% $(3,561) -9.30% $34,723 1 95.6%CB
TRANSFLORIDA BK $ 16,827 5.15% $ 9,017 115.45% $16,827 1 46.3%CB
COMMUNITY SAVINGS, FA $ 0 0.00% $ 0 0.00% $ 0 0 0.0%TH
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 36 -- HOBE SOUND MARKET AREA
HOBE SOUND: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $130,380 100.00% $27,526 26.76% $26,076 5 100.0%
- ---------------------------------------------------------------------------------------------------------------
Commercial Banks $111,937 85.85% $21,771 24.15% $27,984 4 107.3%CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0%SB
Thrifts $ 18,443 14.15% $ 5,755 45.36% $18,443 1 70.7%TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0%CU
</TABLE>
HOBE SOUND: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993-1997 1993-1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $130,380 100.00% $27,526 26.76% $26,076 5 100.0%
- ---------------------------------------------------------------------------------------------------------------
1ST UNITED BK $ 5,498 4.22% $ 290 5.57% $ 5,498 1 21.1%CB
BARNETT BK NA $ 59,672 45.77% $(3,331) -5.29% $59,672 1 228.8%CB
COMMUNITY SAVINGS, FA $ 18,443 14.15% $ 5,755 45.36% $18,443 1 70.7%TH
FIRST NB&TC TREASURE COAST $ 26,644 20.44% $14,335 116.46% $26,644 1 102.2%CB
SUNTRUST BK SOUTH FL NA $ 20,123 15.43% $10,477 108.61% $20,123 1 77.2%CB
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 44
Conversion Valuation Appraisal Report Page: 1 - 38
===============================================================================
FIGURE 37 - JENSEN BEACH (JENSEN BEACH & HUTCHINSON ISLAND) MARKET AREA
JENSEN BEACH: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $155,956 100.00% $33,903 27.78% $22,279 7 100.0%
=====================================================================================================================
Commercial Banks $ 89,804 57.58% $12,603 16.32% $22,451 4 100.8% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $ 66,152 42.42% $21,300 47.49% $22,051 3 99.0% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
JENSEN BEACH: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $155,956 100.00% $ 33,903 27.8% $22,279 7 100.0%
=====================================================================================================================
BARNETT BK NA $ 15,463 9.91% $ 882 6.05% $15,463 1 69.4% CB
CHASE FEDERAL BANK, A FSB $ 0 0.00% $ 0 0.00% $ 0 0 0.0% TH
COMMUNITY SAVINGS, FA $ 39,845 25.55% $ 10,139 34.13% $19,923 2 89.4% TH
FIRST NB&TC TREASURE COAST $ 53,145 34.08% $ 2,140 4.20% $26,573 2 119.3% CB
GREAT WESTERN BANK, A FSB $ 26,307 16.87% $ 11,161 73.69% $26,307 1 118.1% TH
NATIONSBANK NA $ 21,196 13.59% $ 21,196 0.00% $21,196 1 95.1% CB
SUNTRUST BK TREASURE CST NA $ 0 0.00% $(11,615) -100.00% $ 0 0 0.0% CB
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 38 - PALM CITY (MARTIN DOWNS) MARKET AREA
PALM CITY: Market Share by Institution Type
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $139,388 100.00% $ 61,142 78.14% $23,231 6 100.0%
=====================================================================================================================
Commercial Banks $ 73,690 52.87% $ 39,580 116.04% $18,423 4 79.3% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $ 65,698 47.13% $ 21,562 48.85% $32,849 2 141.4% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
PALM CITY: Market Share by Institution
<TABLE>
<CAPTION>
Total Mkt Share $Growth %Growth Avg Branch Efficiency
Institution 1997 1997 1993-1997 1993-1997 1997 Count Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $139,388 100.00% $ 61,142 78.14% $23,231 6 100.0%
=====================================================================================================================
FIRST BK OF INDIANTOWN $ 5,860 4.20% $ (2,221) -27.48% $ 5,860 1 25.2% CB
FIRST NB&TC TREASURE COAST $ 3,393 2.43% $ 3,393 0.00% $ 3,393 1 14.6% CB
FIRST UNION NB $ 52,698 37.81% $ 52,698 0.00% $52,698 1 226.8% CB
FIRST UNION NB OF FLORIDA $ 0 0.00% $ (7,570) -100.00% $ 0 0 0.0% CB
HARBOR FEDERAL SAVINGS BANK $ 34,751 24.93 $ 18,261 101.74% $34,751 1 149.6% TH
RIVERSIDE NB OF FL $ 11,739 8.42% $ (6,720) -36.41% $11,739 1 50.5% CB
TREASURE COAST BANK, A FSB $ 0 0.00% $(10,929) -100.00% $ 0 0 0.0% TH
COMMUNITY SAVINGS, FA $ 30,947 22.20% $ 14,230 85.12% $30,947 1 133.2% TH
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 45
Conversion Valuation Appraisal Report Page: 1-39
===============================================================================
FIGURE 39 - PORT SALERNO (STUART) MARKET AREA
STUART: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $162,138 100.00% $43,011 36.11% $32,428 5 100.0%
============================================================================================================================
Commercial Banks $122,209 75.37% $34,846 39.89% $30,552 4 94.2% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $ 39,929 24.63% $ 8,165 25.71% $39,929 1 123.1% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
STUART: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $162,138 100.00% $43,011 36.11% $32,428 5 100.0%
=========================================================================================================================
COMMUNITY SAVINGS, FA $ 39,929 24.63% $ 8,165 25.71% $39,929 1 123.1% TH
FIRST NB&TC TREASURE COAST $ 93,900 57.91% $31,534 50.56% $31,300 3 96.5% CB
FIRST UNION NB $ 28,309 17.46% $ 3,312 13.25% $28,309 1 87.3% CB
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 40 - FORT PIERCE MARKET AREA
FORT PIERCE: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $88,861 100.00% $9,691 12.24% $29,620 3 100.0%
===========================================================================================================================
Commercial Banks $13,966 15.72% $3,886 38.55% $13,966 1 47.2% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $74,895 84.28% $5,805 8.40% $37,448 2 126.4% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
FORT PIERCE: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $88,861 100.00% $9,691 12.24% $29,620 3 100.0%
=========================================================================================================================
COMMUNITY SAVINGS, FA $17,004 19.14% $3,547 26.36% $17,004 1 57.4% TH
FIRST UNION NB $13,966 15.72% $3,886 38.55% $13,966 1 47.2% CB
HARBOR FEDERAL SAVINGS BANK $57,891 65.15% $2,258 4.06% $57,891 1 195.4% TH
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 41 - PORT ST. LUCIE MARKET AREA
PORT ST LUCIE: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $30,874 100.00% $14,377 87.15% $15,437 2 100.0%
============================================================================================================================
Commercial Banks $13,544 43.87% $13,544 0.00% $13,544 1 87.7% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $17,330 56.13% $ 833 5.05% $17,330 1 112.3% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
PORT ST LUCIE: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total $30,874 100.00% $14,377 87.15% $15,437 2 100.0%
============================================================================================================================
COMMUNITY SAVINGS, FA $17,330 56.13% $ 833 5.05% $17,330 1 112.3% TH
FIRST UNION NB $13,544 43.87% $13,544 0.00% $13,544 1 87.7% CB
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 46
Conversion Valuation Appraisal Report Page: 1 - 40
===============================================================================
FIGURE 42 - PORT ST. LUCIE (ST. LUCIE WEST) MARKET AREA
PORT ST. LUCIE: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Total $94,896 100.00% $93,429 6368.71% $23,724 4 100.0%
==================================================================================================================
Commercial Banks $58,556 61.71% $58,556 0.00% $29,278 2 123.4% CB
Savings Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $36,340 38.29% $34,873 2377.16% $18,170 2 76.6% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
PORT ST. LUCIE: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Total $94,896 100.00% $93,429 6368.71% $23,724 4 100.0%
=======================================================================================================================
COMMUNITY SAVINGS, FA $17,730 18.68% $17,730 0.00% $17,730 1 74.7% TH
FIRST NB&TC TREASURE COAST $37,073 39.07% $37,073 0.00% $37,073 1 156.3% CB
HARBOR FEDERAL SAVINGS BANK $18,610 19.61% $17,143 1168.58% $18,610 1 78.4% TH
SUNTRUST BK SOUTH FL NA $21,483 22.64% $21,483 0.00% $21,483 1 90.6% CB
</TABLE>
Source: FDIC Summary of Deposits
FIGURE 43 - VERO BEACH MARKET AREA
VERO BEACH: MARKET SHARE BY INSTITUTION TYPE
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Total $63,547 100.00% $45,745 256.97% $12,709 5 100.0%
========================================================================================================================
Commercial Banks $39,993 62.93% $33,834 549.34% $ 9,998 4 78.7% CB
Saving Banks $ 0 0.00% $ 0 0.00% $ 0 0 0.0% SB
Thrifts $23,554 37.07% $11,911 102.30% $23,554 1 185.3% TH
Credit Unions $ 0 0.00% $ 0 0.00% $ 0 0 0.0% CU
</TABLE>
VERO BEACH: MARKET SHARE BY INSTITUTION
<TABLE>
<CAPTION>
TOTAL MKT SHARE $ GROWTH % GROWTH AVG BRANCH EFFICIENCY
INSTITUTION 1997 1997 1993 - 1997 1993 - 1997 1997 COUNT RATIO
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Total $63,547 100.00% $45,745 256.97% $12,709 5 100.0%
============================================================================================================================
FIRST UNION NB $21,082 33.18% $21,082 0.00 % $10,541 2 82.9% CB
HARBOR FEDERAL SAVINGS BANK $23,554 37.07% $11,911 102.30 % $23,554 1 185.3% TH
INDIAN RIVER NB $18,552 29.19% $14,050 312.08 % $18,552 1 146.0% CB
NATIONSBANK NA $ 359 0.56% $ 359 0.00 % $ 359 1 2.8% CB
NORTHERN TR BK OF VERO BEACH $ 0 0.00% $(1,657) -100.00 % $ 0 0 0.0% CB
COMMUNITY SAVINGS, FA $ 0 0.00% $ 0 0.00 % $ 0 0 0.0% TH
</TABLE>
Source: FDIC Summary of Deposits
<PAGE> 47
Conversion Valuation Appraisal Report Page: 1 - 41
================================================================================
3. COMPARISONS WITH PUBLICLY TRADED THRIFTS
------------------------------------
INTRODUCTION
------------------------------------
This chapter presents an analysis of the Bank's operations against a Comparable
Group of publicly traded savings institutions. The Comparable Group ("Comparable
Group") was selected from a universe of 395 publicly thrifts as of August 13,
1998. The Comparable Group was selected based upon similarity of characteristics
to the Bank. The Comparable Group multiples provide the basis for the fair
market valuation of the Bank. Factors that influence the Bank's value such as
balance sheet structure and size, profitability, income and expense trends,
capital levels, credit risk, interest rate risk and recent operating results can
be measured against the Comparable Group. The Comparable Group current market
pricing, coupled with the appropriate adjustments for differences between the
Bank and the Comparable Group, will then be utilized as the basis for the
pro-forma valuation of the Bank to-be-issued common stock.
------------------------------------
SELECTION SCREENS
------------------------------------
THE SELECTION SCREENS UTILIZED TO IDENTIFY POSSIBLE COMPARABLES FROM THE LIST OF
395 PUBLICLY THRIFTS AT AUGUST 13, 1998 INCLUDED:
1. The IPO date had to be before June 30, 1997, eliminating any new
conversions.
2. The conversion type had to be a full standard conversion.
3. The total asset size had to be greater than or equal to $600 million,
but less than or equal to $1.5 billion.
4. The loan to asset ratio had to be greater than or equal to 50.00%
5. The institution's price to book trading multiple had to be less than or
equal to 200% as one screen to attempt to eliminate those institutions
with speculation included in their price.
6. The institution had to have at least 12 branches.
7. The institution could not be involved in a pending merger or
acquisition as a second screen to attempt to eliminate those
institutions with speculation included in their price.
<PAGE> 48
Conversion Valuation Appraisal Report Page: 1 - 42
===============================================================================
This resulted in eleven institutions.
FIGURE 44 - SCREENING RESULTS
<TABLE>
<CAPTION>
CORPORATE
------------------------------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY CONVERSION
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF) TYPE
- ------------------------------------ ------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. NASDAQ Andover MA 12 05/08/86 BIF Regular
EBSI Eagle Bancshares NASDAQ Tucker GA 15 04/01/86 SAIF Regular
FAB FIRSTFED AMERICA BANCORP INC. AMSE Swansea MA 13 01/15/97 SAIF Regular
FNGB First Northern Capital Corp. NASDAQ Green Bay WI 19 12/29/83 SAIF Regular
FWWB First Washington Bancorp Inc. NASDAQ Walla Walla WA 25 11/01/95 SAIF Regular
KFBI Klamath First Bancorp NASDAQ Klamath Falls OR 33 10/05/95 SAIF Regular
MDBK Medford Bancorp Inc. NASDAQ Medford MA 16 03/18/86 BIF Regular
MECH MECH Financial Inc. NASDAQ Hartford CT 16 06/26/96 BIF Regular
MSBK Mutual Savings Bank FSB NASDAQ Bay City MI 22 07/17/92 SAIF Regular
WSTR WesterFed Financial Corp. NASDAQ Missoula MT 34 01/10/94 SAIF Regular
YFED York Financial Corp. NASDAQ York PA 22 02/01/84 SAIF Regular
</TABLE>
However, one institution, Mutual Savings Bank, FSB, posted a substantial loss,
$8.2 million, for the most recent quarter due to a legal settlement. As such,
Mutual Savings Bank, FSB was removed from the Comparable Group. The remaining
ten Comparables are:
FIGURE 45 - COMPARABLE GROUP
<TABLE>
<CAPTION>
CORPORATE
------------------------------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY CONVERSION
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF) TYPE
- ------------------------------------ ------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. NASDAQ Andover MA 12 05/08/86 BIF Regular
EBSI Eagle Bancshares NASDAQ Tucker GA 15 04/01/86 SAIF Regular
FAB FIRSTFED AMERICA BANCORP INC. AMSE Swansea MA 13 01/15/97 SAIF Regular
FNGB First Northern Capital Corp. NASDAQ Green Bay WI 19 12/29/83 SAIF Regular
FWWB First Washington Bancorp Inc. NASDAQ Walla Walla WA 25 11/01/95 SAIF Regular
KFBI Klamath First Bancorp NASDAQ Klamath Falls OR 33 10/05/95 SAIF Regular
MDBK Medford Bancorp Inc. NASDAQ Medford MA 16 03/18/86 BIF Regular
MECH MECH Financial Inc. NASDAQ Hartford CT 16 06/26/96 BIF Regular
WSTR WesterFed Financial Corp. NASDAQ Missoula MT 34 01/10/94 SAIF Regular
YFED York Financial Corp. NASDAQ York PA 22 02/01/84 SAIF Regular
</TABLE>
The Bank currently has 21 branches located in the North Palm Beach, Florida. The
Bank plans to be listed on NASDAQ upon completion of the second step conversion.
<PAGE> 49
Conversion Valuation Appraisal Report Page: 1 - 43
================================================================================
------------------------------------
SELECTION CRITERIA
------------------------------------
Excluded from the Comparable Group were institutions that were pending mergers
or acquisitions along with companies whose prices appear to be distorted by
speculative factors or unusual operating conditions. Also, institutions that
completed their conversions within the last year were also excluded as the
earnings of newly converted institutions do not reflect a full years benefit
from the reinvestment of proceeds, and thus the price/earnings multiples and
return on equity measures for these institutions tend to be skewed upward and
downward respectively.
In an ideal world, all of the Comparable Group would contain the exact
characteristics of the Bank. The goal of the selection criteria process is to
find those institutions that most closely match those of the Bank. None of the
Comparables selected will be exact clones of the Bank.
The members of the Comparable Group were selected based upon the following
criteria:
1. Asset size
2. Profitability
3. Capital level
4. Asset mix
5. Operating strategy
6. Date of conversion
1. ASSET SIZE The Comparable Group should have a similar asset size to the Bank.
Large institutions are not appropriate for the peer group due to a more
extensive branch network, greater financial strength, more access to diverse
markets and more capacity in terms of infrastructure. The Comparable Group
ranged in size from $690.4 million to $1.4 billion in total assets with a median
of $1.1 billion. The Bank's asset size was $765.5 million as of June 30, 1998
and will be $823.5 million on a pro forma basis at the midpoint of the valuation
range.
2. PROFITABILITY The Comparable Group should have similar financial conditions
and recent earnings that are comparable to the Bank. They should show a
comparable return on equity and return on assets measures. As such, the
Comparable Group have ROAAs with a median of 0.95% and ROAEs with a median of
9.24% for the most recent quarter available. The Comparable Group profitability
measures had a dispersion about the mean for the ROAA measure ranging from a low
of 0.60% to a high of 1.21% while the ROAE measure ranged from a low of 5.47% to
a high of 15.04%. The Bank had a ROAA of 0.67% and ROAE of 6.10% for the six
month period ending June 30, 1998.
<PAGE> 50
Conversion Valuation Appraisal Report Page: 1 - 44
================================================================================
3. CAPITAL LEVEL The Comparable Group should have a capital level similar to the
Bank's. Capital is important in that it is a determinant of asset size and
regulatory rating. Institutions with capital in a similar range as the Bank were
selected. The median equity to assets ratio for the Comparable Group was 9.33%
with a high of 13.98% and a low of 6.50%. At June 30, 1998, the Bank had an
equity to assets ratio of 10.85%. On a pro forma basis, at the midpoint the Bank
would have an equity to assets ratio of 17.13%.
4. ASSET MIX The asset mix is important in the selection criteria for
Comparables. At June 30, 1998, the Bank had a total net loan to asset ratio of
68.89%, but this ratio will be substantially lower after the offering. The
median loan to asset ratio for the Comparables was 67.48%, ranging from a low of
50.96% to a high of 89.05%.
5. OPERATING STRATEGY An institution's operating characteristics are important
because they determine future performance. They also affect expected rates of
return and investor's general perception of the quality, risk and attractiveness
of a given company. Specific operating characteristics include profitability,
balance sheet growth, asset quality, capitalization, and non-financial factors
such as management strategies and lines of business.
6. DATE OF CONVERSION Recent conversions, those completed after June 30, 1997,
were excluded since the earnings of a newly converted institution do not reflect
a full year's benefits of reinvestment of conversion proceeds. Additionally, new
issues tend to trade at a discount to the market averages.
------------------------------------
COMPARABLE GROUP PROFILES
------------------------------------
- ANDOVER BANCORP, INC. ANDB is a BIF insured institution that
operates 12 branches and is based in Andover, Massachusetts.
Andover is the largest thrift in the Comparable Group with $1.4
billion in total assets. ANDB has the highest return on average
equity 15.04%. Andover was trading at the lowest price to LTM EPS,
14.68x but the highest price to book 195.91% as of August 13,
1998. ANDB was selected to the Group based on asset size, a high
loans to assets ratio and a similar asset quality.
<PAGE> 51
Conversion Valuation Appraisal Report Page: 1 - 45
================================================================================
- EAGLE BANCSHARES EBSI is a SAIF insured institution that operates
15 branches out of Tucker, Georgia and has $1.1 billion in assets.
Eagle had the lowest capital to risk based assets ratio, 8.31%,
the lowest equity to assets ratio, 6.50%, the highest NPLs to
loans ratio, 0.91%, and the lowest reserves to NPLs ratio, 81.84%.
EBSI had the highest margin, 4.03%, which is primarily due to a
8.30% yield on average assets. EBSI was selected to the Group
based on asset size, number of offices, similar loans to assets
ratio and geographic proximity.
- FIRSTFED AMERICA BANCORP INC. FAB is a SAIF insured institution
that has $1.3 billion in assets and operates 13 branches. First
Fed is headquartered in Swansea, Massachusetts. FAB is the only
comparable listed on the American Stock Exchange. FirstFed had the
highest loans to deposits ratio, 130.09%, partially due to a high
level of borrowings, 36.03% of assets. FAB was trading at the
highest price to LTM EPS multiple, 19.62x as of August 13, 1998.
FirstFed was selected to the Group based on asset size, loans to
assets level and level of nonperforming loans.
- FIRST NORTHERN CAPITAL CORP. FNGB is a SAIF insured thrift that
operates 19 offices and operates out of Green Bay, Wisconsin.
First Northern is the smallest Comparable with $690.4 million in
assets. FNGB has the highest loans to assets ratio, 89.05%, the
second lowest borrowings to assets ratio, 13.92%. It was selected
as a Comparable based on its asset size, moderate profitability
level of borrowings and number of offices.
- FIRST WASHINGTON BANCORP INC. FWWB is a SAIF insured institution
with 25 offices, is headquartered in Walla Walla, Washington, and
assets of $1.2 billion. FWWB had the lowest deposits to assets
ratio, 51.26%, the third highest level of intangible assets to
equity ratio, 7.33%, the highest ROAA, 1.21% and highest market
capitalization, $269.1 million. FWWB was selected as a Comparable
based on its number of offices, loans to assets ratio, capital
levels and net interest margin.
- KLAMATH FIRST BANCORP KFBI is a SAIF insured thrift with total
assets of $1.0 million. The institution operates 33 offices and is
based in Klamath Falls, Oregon. KFBI had the second highest
intangible assets to equity ratio, 8.40%, the lowest
non-performing assets to assets ratio, 0.05%, and the highest
deposit growth rate, 63.20%. KFBI was selected as a Comparable
based on its loans to assets ratio and profitability ratios.
<PAGE> 52
Conversion Valuation Appraisal Report Page: 1 - 46
================================================================================
- MEDFORD BANCORP, INC. MDBK is a BIF insured institution that
operates 16 branches and is based in Medford, Massachusetts.
Medford Bancorp has total assets of $1.1 billion. MDBK had the
lowest loans to assets ratio, 50.96%, the lowest noninterest
income to average assets ratio, 0.25%, the lowest noninterest
expense to average assets ratio, 1.68%, and the lowest efficiency
ratio, 46.95%. Medford was selected to the Group based on its
asset size, level of borrowings, number of branch offices and
level of nonperforming loans.
- MECH FINANCIAL INC. MECH is a BIF insured institution with 16
offices which operates out of Hartford, Connecticut. MECH has
$954.7 million in assets and has no intangible assets. MECH has
the highest reserves to loans ratio, 2.14%, and the lowest
interest expense as a percentage of average assets, 3.58%. MECH
was selected to the Group based on number of offices, equity to
asset ratio, loans to assets ratio, and interest income to average
assets ratio.
- WESTERFED FINANCIAL CORP. WSTR is a SAIF insured institution that
operates 34 branches and is based in Missoula, Montana. WSTR has
total assets of $1.0 billion and intangible assets equal to 18.49%
of equity. WesterFed had the third highest borrowings to assets
ratio, 24.97%, the second lowest reserves to NPLs ratio, 123.01%,
the second highest noninterest expense to average assets ratio,
2.63%, and the third lowest price to book multiple, 109.47%. WSTR
was selected to the Group based on its market capitalization, loan
to asset ratio, net interest margin, asset quality, and
profitability.
- YORK FINANCIAL CORP. YFED is a SAIF insured institution with 22
branches and is based in York, Pennsylvania. YFED has $1.2 billion
in total assets. York the highest deposits to assets ratio,
86.70%, and the lowest borrowings to assets ratio, 2.27%. YFED had
the second lowest NPLs to loans ratio, 0.10%, but the highest NPAs
to total assets ratio, 0.98%. YFED was selected to the Group based
on the its loans to deposits ratio and net interest margin.
<PAGE> 53
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================================================================================
All data presented in Figure 46 is from SNL Securities utilizing the most recent
quarter for balance sheet and income statement related items. All data for the
Bank is from the prospectus or the audited financials.
FIGURE 46 - KEY FINANCIAL INDICATORS
<TABLE>
<CAPTION>
COMPARABLE GROUP
QUARTER MEDIAN
THE BANK AT (MOST RECENT
JUNE 30, 1998 QUARTER)
------------- ----------------
<S> <C> <C>
BALANCE SHEET DATA
Gross Loans to Deposits 92.30% 105.26%
Total Net Loans to Assets 68.89% 67.48%
Deposits to Assets 75.03% 68.79%
Borrowed Funds to Assets 11.95% 19.20%
BALANCE SHEET GROWTH
Asset Growth Rate 12.60% 12.92%
Loan Growth Rate 33.50% 8.86%
Deposit Growth Rate 8.60% 5.95%
CAPITAL
Equity to Assets 10.85% 9.33%
Tangible Equity to Assets 9.63% 8.91%
Intangible Assets to Equity 0.00% 0.00%
Regulatory Core Capital to Assets 9.63% 8.41%
Equity + Reserves to Assets 11.21% 10.39%
Total Capital to Risk Adjusted Assets 17.29% 15.69%
</TABLE>
<PAGE> 54
Conversion Valuation Appraisal Report Page: 1 - 48
===============================================================================
<TABLE>
<CAPTION>
Comparable Group
Quarter Median
The Bank at (Most Recent
June 30, 1998 Quarter)
- ----------------------------------------------------------------------------------------
Asset Quality
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Non-Performing Loans to Loans 0.26% 0.36%
Reserves to Non-Performing Loans 202.56% 345.97%
Non-Performing Assets to Assets 0.27% 0.34%
Non-Performing Assets to Equity 2.50% 3.64%
Reserves to Loans 0.52% 0.95%
Reserves to Non-Performing Assets + 90 Days Del. 133.22% 294.82%
- ----------------------------------------------------------------------------------------
Profitability
- ----------------------------------------------------------------------------------------
Return on Average Assets 0.67% 0.95%
Return on Average Equity 6.10% 9.24%
- ----------------------------------------------------------------------------------------
Income Statement
- ----------------------------------------------------------------------------------------
Net Interest Margin 3.47% 3.32%
Interest Income to Average Assets 7.17% 7.24%
Interest Expense to Average Assets 3.92% 4.19%
Net Interest Income to Average Assets 3.25% 3.14%
Noninterest Income to Average Assets 0.94% 0.43%
Noninterest Expense to Average Assets 2.63% 2.06%
Efficiency Ratio 70.69% 58.86%
Overhead Ratio 52.04% 50.71%
</TABLE>
Source: The Bank Offering Prospectus, FinPro calculations and SNL Securities
Note: All of the Bank data is for the six months ended June 30, 1998,
annualized where appropriate.
Note: All of the Comparable data is as of the most recent quarter.
<PAGE> 55
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4. MARKET VALUE DETERMINATION
------------------------------------
INTRODUCTION
------------------------------------
The estimated pro-forma market value of the Bank, along with certain adjustments
to its value relative to market values for the Comparable Group are delineated
in this section. The adjustments delineated in this section are made from
potential investors' viewpoints. A potential investor includes depositors
holding subscription rights and unrelated parties who may purchase stock in the
community offering and who are assumed to be aware of all relevant and necessary
facts as they pertain to the value of the Bank relative to other publicly traded
thrift institutions and relative to alternative investment opportunities.
There are numerous criteria on which the market value adjustments are based, but
the major ones utilized for purposes of this report include:
- Balance Sheet Strength
- Asset Quality
- Earnings Quality, Predictability and Growth
- Market Area
- Management
- Dividends
- Liquidity of the Issue
- Recent Regulatory Matters
- Market for Seasoned Thrift Stocks
- Acquisition Market
After identifying the adjustments that should be made to market value, the
pro-forma market value for the Bank is computed and adjusted. The estimated
pro-forma market value for the Bank is then compared with the market valuation
ratios of the Comparable Group, recently converted public thrifts and the
aggregate ratios for all public thrifts.
<PAGE> 56
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- ------------------------------------------------------------------------------
BALANCE SHEET STRENGTH
The balance sheet strength of an institution is an important market value
determinant, as the investment community considers such factors as liquidity,
capitalization, asset composition, funding mix, intangible levels and interest
rate risk in assessing the attractiveness of investing in the common stock of a
thrift. The following tables summarize the key financial elements of the Bank
measured against the Comparable Group.
FIGURE 47 - KEY BALANCE SHEET DATA
<TABLE>
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
-------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER SHORT NAME ($000) (%) (%) (%) (%)
- ------------------------------------------------------ -------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 1,392,342 106.47 74.33 69.81 21.15
EBSI Eagle Bancshares 1,149,483 112.31 76.11 67.77 20.95
FAB FIRSTFED AMERICA BANCORP INC. 1,315,743 130.09 68.68 52.80 36.03
FNGB First Northern Capital Corp. 690,372 121.05 89.05 73.56 13.92
FWWB First Washington Bancorp Inc. 1,154,072 129.28 66.27 51.26 33.73
KFBI Klamath First Bancorp 1,008,688 94.57 63.69 67.34 17.25
MDBK Medford Bancorp Inc. 1,135,299 69.42 50.96 73.41 16.66
MECH MECH Financial Inc. 954,671 88.34 63.38 71.74 17.44
WSTR WesterFed Financial Corp. 1,022,136 104.05 64.79 62.27 24.97
YFED York Financial Corp. 1,229,268 91.76 79.56 86.70 2.27
- ------------------------------------------------------ -------------------------------------------------------
Average 1,105,207 104.73 69.68 67.67 20.44
Median 1,142,391 105.26 67.48 68.79 19.20
Maximum 1,392,342 130.09 89.05 86.70 36.03
Minimum 690,372 69.42 50.96 51.26 2.27
COMMUNITY SAVINGS BANKSHARES, INC. 765,488 92.30 68.89 75.03 11.95
VARIANCE TO THE COMPARABLE MEDIAN (376,903) (12.96) 1.42 6.24 (7.24)
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
Liquidity - The liquidity of the Bank and the Comparable Group appear
similar and were sufficient to meet all regulatory guidelines.
Asset Composition - The Bank's net loan to asset ratio of 68.89% is
above the median of 67.48%, for the Comparable Group. The Bank's loan
to asset ratio after the conversion is projected to be lower.
Funding Mix - The Comparable Group had 19.20% of its funding base from
borrowings while the Bank's ratio is 11.95%. The Bank's lower level of
borrowings leaves room for an additional funding source in the future
and will allow the Bank to leverage capital utilizing the wholesale
market until the Bank can leverage capital with core growth.
<PAGE> 57
Conversion Valuation Appraisal Report Page: 1 - 51
- -------------------------------------------------------------------------------
The following figure illustrates that the Bank's growth rates for loans
and deposits exceeds that of the Comparable Group while growth of
assets was similar to that of the Comparable Group.
FIGURE 48 - BALANCE SHEET GROWTH DATA
<TABLE>
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
----------------------------------
ASSET LOAN DEPOSIT
GROWTH GROWTH GROWTH
RATE RATE RATE
TICKER SHORT NAME (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 11.30 16.14 5.63
EBSI Eagle Bancshares 39.52 49.84 39.67
FAB FIRSTFED AMERICA BANCORP INC. 28.88 2.04 (4.34)
FNGB First Northern Capital Corp. 8.26 7.44 6.26
FWWB First Washington Bancorp Inc. 14.53 17.18 8.55
KFBI Klamath First Bancorp 38.57 20.59 63.20
MDBK Medford Bancorp Inc. 5.85 1.09 1.07
MECH MECH Financial Inc. 15.92 10.27 3.83
WSTR WesterFed Financial Corp. 6.96 4.30 0.88
YFED Work Financial Corp. 5.75 (3.09) 7.32
- ------------------------------------------------------------------------------------------------------------------------------------
Average 17.55 12.58 13.21
Median 12.92 8.86 5.95
Maximum 39.52 49.84 63.20
Minimum 5.75 (3.09) (4.34)
COMMUNITY SAVINGS BANKSHARES, INC. 12.60 33.50 8.60
VARIANCE TO THE COMPARABLE MEDIAN (0.32) 24.65 2.65
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
<PAGE> 58
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===============================================================================
FIGURE 49 - CAPITAL DATA
<TABLE>
<CAPTION>
Capital as of The Most Recent Quarter
-----------------------------------------------------------------------
Tangible Intangible Regulatory Equity + Total Capital/
Equity/ Equity/ Assets/ Core Cap/ Reserves Risk Adjusted
Assets Tang Assets Equity Assets Assets Assets
Ticker Short Name (%) (%) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C> <C> <C> <C> <C>
ANBD Andover Bancorp Inc. 8.20 8.20 0.00 8.21 8.94 15.13
EBSI Eagle Bancshares 6.50 6.50 0.00 4.59 7.06 8.31
FAB FIRSTFED AMERICA BANCORP INC. 8.86 8.86 0.00 7.46 9.71 16.22
FNGB First Northern Capital Corp. 10.89 10.89 0.00 9.64 11.38 15.75
FWWB First Washington Bancorp Inc. 13.01 12.18 7.33 12.17 13.69 22.64
KFBI Klamath First Bancorp 13.98 12.96 8.40 10.92 14.14 21.84
MDBK Medford Bancorp Inc. 8.94 8.52 5.11 8.54 9.55 15.62
MECH MECH Financial Inc. 9.71 9.71 0.00 9.61 11.07 16.65
WSTR WesterFed Financial Corp. 10.73 8.93 18.49 8.27 11.21 13.81
YFED York Financial Corp. 8.89 8.89 0.00 7.67 9.60 13.11
- ----------------------------------------------------------------------------------------------------------------------
Average 9.97 9.56 3.93 8.71 10.64 15.91
Median 9.33 8.91 0.00 8.41 10.39 15.69
Maximum 13.98 12.96 18.49 12.17 14.14 22.64
Minimum 6.50 6.50 0.00 4.59 7.06 8.31
COMMUNITY SAVINGS BANKSHARES, INC. 10.85 9.63 0.00 9.63 11.21 17.29
VARIANCE TO THE COMPARABLE MEDIAN 1.53 0.72 0.00 1.23 0.82 1.61
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
Capitalization - The Comparable Group's median equity to assets ratio
of 9.33% is lower than the Bank's ratio of 10.85%, and will be well
below the Bank's pro forma equity to assets ratio of 17.13% at the
midpoint of the valuation range.
Intangible Levels - One of the most important factors influencing
market values is the level of intangibles that an institution carries
on its books. The Comparable Group has a limited level of intangibles
with an average of 3.93% of equity. Four of the Comparables have
intangibles with a high of 18.49% of assets and a low of 5.11% of
assets. Thrifts trade more on tangible book value than on book value.
The Bank had no intangible assets.
Interest Rate Risk - The Bank has a minimal level of interest rate
risk, evidenced by a net portfolio value above tangible equity at rate
shocks up to and including +300 basis points and above the assumed
4.00% capital limit under all rate shocks. Additionally, the Bank's one
year gap was 0.44%.
<PAGE> 59
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================================================================================
The Bank is less reliant on the wholesale markets for both assets and a funding
source. It is expected that following the conversion, the Bank's loans to assets
ratio is projected to be lower than the Comparable Groups. However, the Bank's
ability to grow, lack of intangibles and lower levels of borrowings stack up
favorably. As such, there should be no adjustment to the Comparable Group for
this measure.
<PAGE> 60
Conversion Valuation Appraisal Report Page: 1 - 54
=============================================================================
-------------
ASSET QUALITY
-------------
The asset quality of an institution is an important determinant of market value.
The investment community considers levels of nonperforming loans, REO and levels
of ALLL in assessing the attractiveness of investing in the common stock of an
institution.
FIGURE 50 - ASSET QUALITY TABLE
<TABLE>
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
---------------------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS+90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ---------------------------------------------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 0.49 205.01 0.38 4.62 1.00 195.38
EBSI Eagle Bancshares 0.91 81.84 0.95 14.58 0.74 59.71
FAB FIRSTFED AMERICA BANCORP INC. 0.37 331.87 0.29 3.26 1.24 293.25
FNGB First Northern Capital Corp. 0.11 506.35 0.12 1.11 0.54 400.84
FWWB First Washington Bancorp Inc. 0.21 498.86 0.21 1.64 1.03 301.38
KFBI Klamath First Bancorp 0.07 356.52 0.05 0.33 0.26 356.52
MDBK Medford Bancorp Inc. 0.34 346.52 0.18 2.00 1.19 338.34
MECH MECH Financial Inc. 0.62 345.41 0.46 4.72 2.14 296.39
WSTR WesterFed Financial Corp. 0.60 123.01 0.43 4.02 0.74 97.44
YFED York Financial Corp. 0.10 874.88 0.98 10.99 0.90 31.83
- ---------------------------------------------------------------------------------------------------------------------------------
Average 0.38 367.03 0.41 4.73 0.98 237.11
Median 0.36 345.97 0.34 3.64 0.95 294.82
Maximum 0.91 874.88 0.98 14.58 2.14 400.84
Minimum 0.07 81.84 0.05 0.33 0.26 31.83
COMMUNITY SAVINGS BANKSHARES, INC. 0.26 202.56 0.27 2.50 0.52 133.22
VARIANCE TO THE COMPARABLE MEDIAN (0.10) (143.40) (0.06) (1.14) (0.43) (161.60)
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
The Bank has a lower non-performing loans ("NPL") to total loans ratio of 0.26%
when compared to the Comparable Group median of 0.36%, and a lower level of
nonperforming assets as a percentage of assets, 0.27%, when compared to the
Comparable Group median of 0.34%. The Bank's reserve levels are substantially
lower, 0.52% of loans as opposed to the Comparable median of 0.95%. Based on the
low reserve levels, even when considering nonperforming asset levels, a slight
downward adjustment is warranted for this element.
<PAGE> 61
Conversion Valuation Appraisal Report Page: 1 - 55
================================================================================
------------------------------------
EARNINGS QUALITY,
PREDICTABILITY AND GROWTH
------------------------------------
The earnings quality, predictability and growth are critical components in the
establishment of market values for thrifts. Thrift earnings are primarily a
function of:
- net interest income
- loan loss provision
- non-interest income
- non-interest expense
The quality and predictability of earnings is dependent on both internal and
external factors. Some internal factors include the mix of the balance sheet,
the interest rate sensitivity of the balance sheet, the asset quality, and the
infrastructure in place to deliver the assets and liabilities to the public.
External factors include the competitive market for both assets and liabilities,
the global interest rate scenario, local economic factors and regulatory issues.
Each of these factors can influence the earnings of an institution, and each of
these factors is volatile. Investors prefer stability and consistency. As such,
solid, consistent earnings are preferred to high but risky earnings. Investors
also prefer earnings to be diversified and not entirely dependent on interest
income.
<PAGE> 62
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================================================================================
------------------------------------
INCOME AND EXPENSE TRENDS
------------------------------------
The Bank's annualized net income, of $5.0 million for the six month period ended
June 30, 1998, was below the net income for the twelve month period ended
December 31, 1997. During the six month period ended June 30, 1998, the Bank's
noninterest expense increased $1.0 over the same time period ended June 30,
1997, due to an increase in compensation expense resulting from hiring incentive
based loan originators and the new cost incurred by the operation of two new
branches.
The net income for the twelve month period ended December 31, 1996, is low due
to the one-time SAIF assessment. The Bank's portion of the SAIF assessment was
$2.8 million on a pre-tax basis.
FIGURE 51 - NET INCOME CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 63
Conversion Valuation Appraisal Report Page: 1 - 57
- -------------------------------------------------------------------------------
The Bank's ROAA and ROAE demonstrate weakness when compared to the Comparable
Group. The Bank's ROAA and ROAE were 0.67% and 6.10%, respectively. These ratios
are below the Comparable Group median for both measures.
FIGURE 52 - PROFITABILITY DATA
<TABLE>
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-----------------------------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C>
ANDB Andover Bancorp Inc. 1.19 15.04
EBSI Eagle Bancshares 0.83 10.00
FAB FIRSTFED AMERICA BANCORP INC. 0.60 5.47
FNGB First Northern Capital Corp. 0.98 8.87
FWWB First Washington Bancorp Inc. 1.21 8.70
KFBI Klamath First Bancorp 0.92 6.11
MDBK Medford Bancorp Inc. 1.07 11.84
MECH MECH Financial Inc. 0.97 9.71
WSTR WesterFed Financial Corp. 0.72 6.73
YFED York Financial Corp. 0.84 9.61
- ------------------------------------------------------------------------------------------------------------------------------
Average 0.93 9.21
Median 0.95 9.24
Maximum 1.21 15.04
Minimum 0.60 5.47
COMMUNITY SAVINGS BANKSHARES, INC. 0.67 6.10
VARIANCE TO THE COMPARABLE MEDIAN (0.28) (3.14)
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
<PAGE> 64
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- --------------------------------------------------------------------------------
FIGURE 53 - INCOME STATEMENT DATA
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
---------------------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/ EFFICIENCY OVERHEAD
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS RATIO RATIO
TICKER SHORT NAME (%) (%) (%) (%) (%) (%) (%) (%)
- ---------------------------------------------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 3.17 7.20 4.14 3.06 0.36 1.74 50.18 44.38
EBSI Eagle Bancshares 4.03 8.30 4.62 3.68 1.59 3.78 76.31 66.10
FAB FIRSTFED AMERICA BANCORP INC. 2.81 6.96 4.29 2.67 0.40 2.08 67.44 62.53
FNGB First Northern Capital Corp. 3.19 7.27 4.20 3.07 0.46 2.04 57.92 51.58
FWWB First Washington Bancorp Inc. 3.68 7.82 4.29 3.54 0.30 1.93 48.12 43.64
KFBI Klamath First Bancorp 3.36 7.01 3.80 3.20 0.27 1.94 51.29 47.23
MDBK Medford Bancorp Inc. 3.23 6.93 3.83 3.10 0.25 1.68 46.95 42.67
MECH MECH Financial Inc. 3.61 6.98 3.58 3.40 0.84 2.51 59.79 49.83
WSTR WesterFed Financial Corp. 3.44 7.35 4.17 3.18 0.72 2.63 63.90 55.70
YFED York Financial Corp. 3.28 7.46 4.37 3.09 0.45 2.17 61.68 56.14
- ---------------------------------------------------------------------------------------------------------------------------------
Average 3.38 7.33 4.13 3.20 0.56 2.25 58.36 51.98
Median 3.32 7.24 4.19 3.14 0.43 2.06 58.86 50.71
Maximum 4.03 8.30 4.62 3.68 1.59 3.78 76.31 66.10
Minimum 2.81 6.93 3.58 2.67 0.25 1.68 46.95 42.67
COMMUNITY SAVINGS
BANKSHARES, INC. 3.47 7.17 3.92 3.25 0.94 2.63 70.69 52.04
VARIANCE TO THE
COMPARABLE MEDIAN 0.15 (0.06) (0.27) 0.11 0.51 0.57 11.84 1.33
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
FIGURE 54 - CORE EARNINGS DATA
<TABLE>
<CAPTION>
INCOME
---------------------------------------------------------------------------------------------
NET CORE CORE NET CORE CORE
INCOME INCOME EPS EPS INCOME INCOME EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ---------------------------------------------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 15,768 15,382 2.29 2.35 5,250 5,125 0.78 0.76
EBSI Eagle Bancshares 7,210 7,253 1.24 1.23 2,163 2,186 0.37 0.37
FAB FIRSTFED AMERICA BANCORP INC. 6,867 5,569 0.70 0.86 1,694 1,400 0.22 0.18
FNGB First Northern Capital Corp. 6,551 6,060 0.67 0.72 1,730 1,562 0.19 0.17
FWWB First Washington Bancorp Inc. 13,122 12,227 1.16 1.25 3,375 3,074 0.33 0.30
KFBI Klamath First Bancorp 8,959 8,959 0.93 0.93 2,491 2,491 0.26 0.26
MDBK Medford Bancorp Inc. 11,953 11,358 2.39 2.51 3,238 2,885 0.68 0.61
MECH MECH Financial Inc. 8,603 8,533 1.61 1.62 2,526 2,513 0.47 0.47
WSTR WesterFed Financial Corp. 7,260 7,258 1.29 1.29 1,993 1,764 0.35 0.31
YFED York Financial Corp. 10,015 7,906 0.84 1.06 2,435 1,964 0.26 0.21
- ---------------------------------------------------------------------------------------------------------------------------------
Average 9,631 9,051 1.31 1.38 2,690 2,496 0.39 0.36
Median 8,781 8,220 1.20 1.24 2,463 2,339 0.34 0.31
Maximum 15,768 15,382 2.39 2.51 5,250 5,125 0.78 0.76
Minimum 6,551 5,569 0.67 0.72 1,694 1,400 0.19 0.17
COMMUNITY SAVINGS
BANKSHARES, INC. 5,132 5,132 NA NA NA NA NA NA
VARIANCE TO THE
COMPARABLE MEDIAN (3,649) (3,325) NA NA NA NA NA NA
</TABLE>
Sources: SNL and Audited Financial Data, FinPro Computations
The Bank yield on assets is slightly lower than the Comparable median, which is
entirely offset by a lower cost of funds when compared to the Comparable Group
median. The Bank's noninterest income is above the Comparables but is offset by
the Bank's higher noninterest expense. Despite the advantages of net interest
income and noninterest income, the Bank's efficiency ratio is 11.84 percent
higher than the Comparable median.
<PAGE> 65
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================================================================================
Currently, investors are focusing on earnings sustainability as the interest
rate volatility has caused wide variation in income levels. With the intense
competition for both assets and deposits, banks can not easily replace lost
spread and margin with balance sheet growth.
Based on the Bank's historical earnings performance, a slight downward
adjustment is warranted to the market value for earnings.
<PAGE> 66
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------------------------------------
MARKET AREA
------------------------------------
The market area that an institution serves has a significant impact on value, as
future success is interrelated with the economic, demographic and competitive
aspects of the market. Specifics on the Bank's market were delineated in Section
2 - Market Area Analysis. The following are discussions with respect to the
various data sets utilized for the market analysis.
Demographically, the population in the majority of the Bank's markets is
projected to grow at rates in excess of the state growth rate. Income levels and
housing values tend to be higher than the state average. Despite these positive
aspects, the Bank's markets tend to have seasonal occupants, as does the state
in general. The state housing occupancy status shows that in excess of 50% of
the housing units are unoccupied.
The majority of the Bank's deposit markets have grown in excess of 10% over the
past five years. However, the average branch size of these markets is
substantially lower than the national average branch size for all publicly
traded thrifts of $35.5 million and the national median of $51.4 million. In
fact, only three of the Bank's seventeen deposit markets have an average branch
size in excess of the national average and only one has an average branch size
in excess of the national median.
Based on these factors no adjustment is warranted for this factor due to the
excellent market area which is offset by the high level of competition.
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------------------------------------
MANAGEMENT
------------------------------------
The Bank has developed a good management team with considerable banking
experience and length of service with the Bank. The Bank's organizational chart
is reasonable for an institution of its size and complexity. The Board is active
and oversees and advises on all key strategic and policy decisions and holds the
management to high performance standards.
As such, no adjustment appears to be warranted for this factor.
<PAGE> 68
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------------------------------------
DIVIDENDS
------------------------------------
Historically, thrifts have not established dividend policies immediately at or
after conversion to stock ownership. Rather, newly converted institutions, in
general, have preferred to establish an earnings track record, fully invest the
conversion proceeds, and allow for seasoning of the stock before establishing a
dividend policy. In the late 1980's and early 1990's however, there has been a
tendency toward initiating dividend policies concurrent with the conversion as a
means of increasing the attractiveness of the issue and to utilize the proceeds.
The last few years have seen yet another shift away from dividend policies
concurrent with conversion. Recent issues have been fully or over subscribing
without the need for the additional enticement of dividends. After the
conversion is another issue, however. Recent pressures on ROE and on internal
rate of returns to investors has prompted the industry toward cash dividends.
This trend is exacerbated by the lack of growth potential. Typically, when
institutions are in a growth mode, they issue stock dividends or do not declare
a dividend. When growth is stunted, these institutions shift toward reducing
equity levels and thus utilize cash dividends as a tool in this regard.
<PAGE> 69
Conversion Valuation Appraisal Report Page: 1-63
========================================================================
FIGURE 55 - DIVIDENDS DATA
<TABLE>
<CAPTION>
Dividends
-----------------------
Current LTM Dividend
Dividend Payout
Yield Ratio
Ticker Short Name ($) (%)
- ------------------------------------------------------------------------
Comparable Thrift Data
<S> <C> <C> <C>
ANDB Andover Bancorp Inc. 2.087 26.38
EBSI Eagle Bancshares 2.844 48.78
FAB FIRSTFED AMERICA BANCORP INC. 1.185 5.81
FNGB First Northern Capital Corp. 2.824 47.22
FWWB First Washington Bancorp Inc. 1.423 21.82
KFBI Klamath First Bancorp 2.118 36.02
MDBK Medford Bancorp Inc. 2.000 37.45
MECH MECH Financial Inc. 2.143 9.26
WSTR WesterFed Financial Corp. 2.326 39.61
YFED York Financial Corp. 2.755 47.17
- ----------------------------------------------------------------------
Average 2.17 31.95
Median 2.13 36.74
Maximum 2.84 48.78
Minimum 1.19 5.81
Community Savins Bankshares, Inc. 2.57 87.38
Variance to the Comparable Median 0.44 50.65
</TABLE>
All of the Comparable institutions had declared dividends. The median dividend
payout ratio for the Comparable Group was 36.74%, ranging from a high of 48.78%
to a low of 5.81%. The Bank's dividend payout ratio of 87.38% is significantly
above Comparable group median. The Bank's dividend yield was 2.57%, while the
Comparable Group median was 2.13%.
The Bank will have the capital levels to afford to pay dividends and has a
history of paying adequate dividends, but will more than likely assume a payout
ratio equal to fully converted institutions. As such, no adjustment is
warranted.
<PAGE> 70
Conversion Valuation Appraisal Report Page: 1 - 64
================================================================================
----------------------
LIQUIDITY OF THE ISSUE
----------------------
The Comparable Group is by definition composed only of companies that trade in
the public markets with all of the Comparables trading on NASDAQ or AMEX.
Typically, the number of shares outstanding and the market capitalization
provides an indication of how much liquidity there will be in a given stock. The
actual liquidity can be measured by volume traded over a given period of time.
FIGURE 56 - MARKET CAPITALIZATION DATA
<TABLE>
<CAPTION>
MARKET CAPITALIZATION
-------------------------------------------------------------------
MRQ MRQ LTM LTM MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ------------------------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 223.59 34.250 37.750 23.700 17.61 17.61
EBSI Eagle Bancshares 130.21 25.375 25.500 15.250 13.03 13.03
FAB FIRSTFED AMERICA BANCORP INC. 139.59 19.375 23.250 17.625 15.76 15.76
FNGB First Northern Capital Corp. 112.95 13.375 14.000 11.000 8.49 8.49
FWWB First Washington Bancorp Inc. 269.08 23.921 25.966 17.045 14.78 13.70
KFBI Klamath First Bancorp 168.59 19.063 24.250 18.625 16.02 14.67
MDBK Medford Bancorp Inc. 178.19 41.000 44.250 29.250 22.78 21.62
MECH MECH Financial Inc. 148.27 29.000 31.500 18.875 17.51 17.51
WSTR WesterFed Financial Corp. 120.08 24.500 27.000 20.125 19.64 16.01
YFED York Financial Corp. 169.27 20.875 27.250 15.600 12.18 12.18
- ------------------------------------------------------------------------------------------------------------
Average 165.98 25.07 28.07 18.71 15.78 15.06
Median 158.43 24.21 26.48 18.13 15.89 15.22
Maximum 269.08 41.00 44.25 29.25 22.78 21.62
Minimum 112.95 13.38 14.00 11.00 8.49 8.49
COMMUNITY SAVINGS BANKSHARES, INC. 67.42 10.00 NA NA 10.86 10.86
VARIANCE TO THE COMPARABLE MEDIAN (91.01) (14.21) NA NA (5.03) (4.36)
</TABLE>
The market capitalization values of the Comparable Group range from a low of
$113.0 million to a high of $269.1 million with a median market capitalization
of $158.4 million. The Bank expects to have $67.4 million of market capital at
the midpoint on a pro forma basis.
Although the market capitalization is lower than the comparable Group, it is
still large enough on an absolute basis to provide issue liquidity.
Additionally, the Bank's market capitalization will increase as its share price
increases.
Based on the comparison with the Comparable Group and the above data, no
adjustment appears warranted.
<PAGE> 71
Conversion Valuation Appraisal Report Page: 1 - 65
================================================================================
------------------------------------
RECENT REGULATORY MATTERS
------------------------------------
As a result of large after-market price increases of conversions during 1993 and
early 1994, the regulatory agencies have issued guidelines on appraisals for
conversions. The regulators publicly indicated that only modest immediate
after-market price increases are appropriate for converting institutions. The
guidelines issued November 22, 1994, indicate that the reasonableness and
adequacy of an appraisal will be partially judged by the immediate price
movement of the conversion stock in the after-market, using a very short time
frame of the second day of trading following closing. The guidelines further
discuss that the average price appreciation for all IPO's has been between 10%
and 15%, which was deemed to be too high.
At around the same time period, IPO pricing was elevated on a book basis and
IPOs in late 1994 did not experience much appreciation. In fact, numerous IPOs
actually depreciated. 1995 brought back lower premiums to book but they have
been rising throughout 1996 to approximately the same levels as late 1994. The
trend has continued in 1997 and 1998 with IPO's popping over 40% on average, for
the first day of trading.
The recent interest in thrift IPO's has caused large oversubscriptions, which in
turn have caused large price appreciations in the aftermarket. Recently,
regulators have been indicating the need for increased pricing of new issues in
the attempt to lessen the aftermarket appreciation. Also, regulators have been
concerned with capital redistributions from thrifts which have converted within
the past three years. Regulatory agencies are publicly indicating that they will
enforce the limits of stock buy backs to: 0% in the first year, 5% in the second
year and 5% in the third year.
This threat to newly converted institutions, of not being able to use all of the
capital markets tools available, will hurt the stocks' attractiveness, as it
will put them at a significant competitive disadvantage to the rest of the
industry.
As such, a downward adjustment for this measure is warranted based on the
uncertainty surrounding the regulatory environment.
<PAGE> 72
Conversion Valuation Appraisal Report Page: 1 - 66
================================================================================
------------------------------------
MARKET FOR SEASONED THRIFT
STOCKS
------------------------------------
Data for all public thrifts as of August 13, 1998 is provided in Exhibit 7. A
common measure utilized as a proxy for the performance of the thrift industry is
the SNL thrift index graphically shown below and tabularly shown on the
following page:
FIGURE 57 - SNL THRIFT INDEX CHART
[CHART]
[DESCRIPTION TO COME]
<PAGE> 73
Conversion Valuation Appraisal Report Page: 1-67
===============================================================================
FIGURE 58 - HISTORICAL SNL INDEX
SNL THRIFT INDEX MONTHLY PERFORMANCE
January 2, 1992 to August 13, 1998
<TABLE>
<CAPTION>
SNL %Change %Change %Change %Change %Change %Change %Change
Thrift Since Since Since Since Since Since Since
Date Index 1/2/92 1/4/93 1/3/94 12/30/94 12/29/95 12/31/96 12/31/97
---- ------ ------ ------ ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-92 143.9 - - - - - - -
Jul-92 175.1 21.7% - - - - - -
Jan-93 201.1 39.7% - - - - - -
Jul-93 220.5 53.2% 9.6% - - - - -
Jan-94 252.5 75.5% 25.6% - - - - -
Jul-94 273.8 90.3% 36.2% 8.4% - - - -
Jan-95 256.1 78.0% 27.3% 1.4% - - - -
Jul-95 328.2 128.1% 63.2% 30.0% 28.2% - - -
Jan-96 370.7 157.6% 84.3% 46.8% 44.7% - - -
Jul-96 389.9 171.0% 93.9% 54.4% 52.2% 5.2% - -
Jan-97 520.1 261.4% 158.6% 106.0% 103.1% 40.3% - -
Jul-97 684.5 375.7% 240.4% 171.1% 167.3% 84.7% 31.6% -
Jan-98 768.3 433.9% 282.0% 204.3% 217.1% 104.1% 58.9% -5.6%
Jun-98 833.5 479.2% 314.5% 230.1% 244.0% 121.4% 72.4% 2.4%
August 13, 1998 724.6 403.5% 260.3% 187.0% 199.0% 92.4% 49.8% -11.0%
</TABLE>
Source: SNL Securities
<PAGE> 74
Conversion Valuation Appraisal Report Page: 1 - 68
================================================================================
FIGURE 59 - EQUITY INDICES
[CHART]
[DESCRIPTION TO COME]
As Figures 57 and 58 illustrate, the performance of the SNL index has been
robust through 1992, 1993, 1994 and 1995. The dip in the index, occurring in
late 1994, was the product of the interest rate rise during that period along
with the overall uneasiness in the stock market in general. The rate scenario
covering the same period as the SNL index can be seen in the following chart.
<PAGE> 75
Conversion Valuation Appraisal Report Page: 1 - 69
================================================================================
FIGURE 60 - HISTORICAL RATES
HISTORIC RATES
[CHART]
[DESCRIPTION TO COME]
As the graph demonstrates, the rate rise in late 1994 correlates closely to the
fall in thrift prices. The drop in rates in 1995 was one of the primary drivers
of the rapid rise in the SNL index. During 1996, rates increased slightly and
then remained stable, fueling the rise in the conversion prices. 1997 has seen a
continuation of this trend, with the average IPO pricing at 70.9%, 69.7%, 70.9%,
and 73.6% of book value for the first, second, third, and fourth quarters of
1997, respectively.
As Figures 59 and 60 show, in 1997, the flat interest rate environment has
contributed to the appreciation in the SNL index. In addition, the market
continues to demonstrate evidence of acquisition speculation. Since May 1998,
the thrift market appreciation has leveled off and has declined to the late 1997
levels.
The Bank will be raising a substantial amount of capital and will need time to
reinvest the proceeds. Additionally, the investment community will want to see a
few quarters of earnings past the second step prior to valuing the Bank on a
full basis. As such, a slight downward adjustment for this measure is warranted,
as the institution will trade at a discount to the market until the capital is
adequately invested.
<PAGE> 76
Conversion Valuation Appraisal Report Page: 1 - 70
================================================================================
------------------------------------
ACQUISITION MARKET
------------------------------------
The amount of deals have picked up since the second quarter of 1997.
FIGURE 61 - DEALS FOR LAST FOURTEEN QUARTERS
HISTORIC RATES
[CHART]
[DESCRIPTION TO COME]
<PAGE> 77
Conversion Valuation Appraisal Report Page: 1 - 71
================================================================================
From 1995 through August 13, 1998, thrift deal prices remained high. Nationally,
book multiples continue their increase. Regionally, earnings multiples are
substantially outpacing the industry, however, regional price to assets and
price to deposits have remained flat.
FIGURE 62 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO BOOK
HISTORICAL PRICE TO BOOK ANALYSIS
[CHART]
[DESCRIPTION TO COME]
<PAGE> 78
Conversion Valuation Appraisal Report Page: 1 - 72
================================================================================
FIGURE 63 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO TANGIBLE BOOK
HISTORICAL PRICE TO TANGIBLE BOOK ANALYSIS
[CHART]
[DESCRIPTION TO COME]
FIGURE 64 - THRIFT ACQUISITION MULTIPLES, PRICE TO EARNINGS
HISTORICAL MEDIAN PRICE TO EARNINGS
[CHART]
[DESCRIPTION TO COME]
<PAGE> 79
Conversion Valuation Appraisal Report Page: 1 - 73
================================================================================
FIGURE 65 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO ASSETS
HISTORICAL PRICE TO ASSETS
[CHART]
[DESCRIPTION TO COME]
FIGURE 66 - CURRENT THRIFT ACQUISITION MULTIPLES, PRICE TO DEPOSITS
HISTORICAL PRICE TO DEPOSITS
[CHART]
[DESCRIPTION TO COME]
<PAGE> 80
Conversion Valuation Appraisal Report Page: 1 - 74
- ------------------------------------------------------------------------------
FIGURE 67 - DEAL MULTIPLES
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
MEDIAN PRICE TO LTM EARNINGS 1995 1996 1997 1998 YTD
Thrifts - Nationwide 18.4 17.6 24.6 27.0
Thrifts - Southeast 17.2 15.2 31.4 49.4
Thrifts - Deal Value > $100 - $500 Million 17.4 15.2 24.4 25.6
AVERAGE PRICE TO BOOK
Thrifts - Nationwide 144.7 149.5 185.2 217.9
Thrifts - Southeast 152.8 160.0 183.2 232.5
Thrifts - Deal Value > $100 - $500 Million 149.4 148.6 195.7 230.1
AVERAGE PRICE TO TANGIBLE BOOK
Thrifts - Nationwide 150.0 153.6 191.9 223.6
Thrifts - Southeast 165.3 163.6 189.7 237.6
Thrifts - Deal Value > $100 - $500 Million 155.8 162.4 214.0 232.9
AVERAGE PRICE TO ASSETS
Thrifts - Nationwide 14.8 15.0 18.4 21.7
Thrifts - Southeast 14.1 13.4 18.5 18.9
Thrifts - Deal Value > $100 - $500 Million 15.5 14.1 19.8 24.6
AVERAGE PRICE TO DEPOSITS
Thrifts - Nationwide 19.2 19.9 24.9 28.8
Thrifts - Southeast 17.7 18.1 24.0 25.0
Thrifts - Deal Value > $100 - $500 Million 20.8 20.2 28.6 35.6
- -----------------------------------------------------------------------------------------
</TABLE>
Source: SNL Securities
There are two pending thrift acquisitions in the state of Florida. First Palm
Beach Bancorp is being acquired by Republic Security for 237.88% of book value
and 30.75x earnings. Republic Bancorp is purchasing Bankers Savings Bank for
300.86% of book value (an earnings multiple was not announced).
FIGURE 68 - ACQUISITION TABLE
<TABLE>
<CAPTION>
At Announcement Offer Divided By
--------------------------------
Book Value LTM EPS
---------- -------
<S> <C> <C>
Pending Merger Median 231% 25.6X
Completed Merger Median 191% 22.4X
</TABLE>
Source: SNL Securities
Although the acquisition multiples are high and continue to grow, no adjustment
is warranted for this factor, as the Bank will not be readily available for
acquisition immediately following the second step conversion, and since the
Comparable Group was screened in an attempt to eliminate any institutions with
acquisition speculations in their stocks.
<PAGE> 81
Conversion Valuation Appraisal Report Page: 1 - 75
================================================================================
------------------------------------
ADJUSTMENTS TO VALUE
------------------------------------
Overall, FinPro believes that the Bank pro-forma market value should be
discounted relative to the Comparable Group, reflecting the following
adjustments.
<TABLE>
<CAPTION>
Key Valuation Parameters Valuation Adjustment
- --------------------------------------------------------------------------------
<S> <C>
Balance Sheet Strength No Adjustment
Asset Quality Slight Downward
Earnings Quality, Predictability and Growth Slight Downward
Market Area No Adjustment
Management No Adjustment
Dividends No Adjustment
Liquidity of the Issue No Adjustment
Recent Regulatory Matters Downward
Market for Seasoned Thrift Stocks Slight Downward
Acquisition Market No Adjustment
</TABLE>
As a result of all the factors discussed, a premium of approximately 3.5% on an
earnings multiple basis and a 41.5% discount on a price to tangible book basis
appears to be reasonable.
<PAGE> 82
Conversion Valuation Appraisal Report Page: 1 - 76
================================================================================
5. OTHER ADJUSTMENTS
- -----------------------------------
SECOND STEP CONVERSIONS
- -----------------------------------
As the Bank is undergoing a second step conversion, it should be compared to
institutions that are undertaking second step conversions.
FIGURE 69 - PENDING SECOND STEP CONVERSIONS
EXHIBIT 10
SECOND STEP CONVERSIONS - 1997 TO DATE
SELECTED MARKET DATA
MARKET DATA AS OF 8/13/98
<TABLE>
<CAPTION>
---------------------------------------
Percent Change from IPO
---------------------------------------
After After After After Current % Change
IPO Price 1 Day 1 Week 1 Month 3 Months Stock Price from
Ticker Short Name IPO Date ($) (%) (%) (%) (%) 8/13/98 IPO to Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HSTD Homestead Bancorp Inc. 07/20/98 10.000 -6.87% -7.50% NA NA 8.250 -17.50%
PSBI PSB Bancorp Inc. 07/17/98 10.000 -8.12% -8.75% -20.62% NA 7.938 -20.62%
THTL Thistle Group Holdings Co. 07/14/98 10.000 -0.62% -1.87% -8.12% NA 9.188 -8.12%
SBAN SouthBanc Shares Inc. 04/15/98 20.000 13.75% 12.50% 4.38% -5.00% 18.250 -8.75%
FSLA First Source Bancorp Inc. 04/09/98 10.000 5.63% 5.00% 5.00% -5.00% 8.938 -10.62%
TSBS Peoples Bancorp Inc. 04/09/98 10.000 4.38% 5.63% 6.25% -0.94% 8.688 -13.12%
PFSL Pocahontas Bancorp Inc. 04/01/98 10.000 4.38% 2.50% -0.62% -3.75% 8.750 -12.50%
HARB Harbor Florida Bancshares Inc. 03/19/98 10.000 20.00% 16.88% 26.25% 19.38% 12.125 21.25%
HFWA Heritage Financial Corp. 01/09/98 10.000 32.50% 32.50% 42.50% 53.75% 12.750 27.50%
GFED Guaranty Federal Bcshs Inc. 12/31/97 10.000 28.75% 25.00% 23.75% 25.00% 12.625 26.25%
EBI Equality Bancorp Inc. 12/02/97 10.000 34.38% 49.38% 41.25% 57.50% 13.000 30.00%
FSNJ Bayonne Bancshares Inc. 08/22/97 10.000 17.50% 18.75% 26.88% 22.50% 14.938 49.38%
MONT Montgomery Financial Corp. 07/01/97 10.000 11.25% 12.50% 20.63% 22.50% 11.000 10.00%
-------------------------------------------------------------------------------------------------------------------------
1/1/97 to Average 12.07% 12.50% 13.96% 18.59% 11.265 5.63%
8/13/98 Median 11.25% 12.50% 13.44% 20.94% 11.000 -8.12%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: SNL Securities
As previously mentioned, investor interest in second-step conversions has been
weak with a few second step offerings being extended to the community utilizing
underwriter assistance. Even with the extended offerings and marketing
assistance recent second step conversions closed below the supermaximum of the
estimated value range.
Even though the offerings closed below the supermaximum, the last seven second
step conversions are trading below their IPO price, some by as much as 15%.
Based on performance of these second step conversions, the market value should
be adjusted downward, as second steps are not being warmly received by the
markets.
<PAGE> 83
Conversion Valuation Appraisal Report Page: 1 - 77
================================================================================
- ------------------------------------------
SUBSCRIPTION INTEREST
- ------------------------------------------
Based on the stock appreciation for both thrift stocks and for the U.S. equity
market in general, the market for public offerings has attracted a significant
level of attention. The market for public offerings is driven by the lack of
supply of stocks to meet the demand created primarily by the growth of mutual
funds. Thrift IPO's have received a greater amount of attention due to the price
"pops" of recent standard conversions. However, recently the market for stocks
and particularly, thrift stock has begun to demonstrate weakness.
The market has not shown the type of interest in second-step conversions as in
MHC and standard conversions, recently, with the last seven second-step
conversions trading down below the subscription price (as shown in Figure 70).
FIGURE 70 - CONVERSION PRICE POPS
<TABLE>
<CAPTION>
-------------------------------------------
PERCENT CHANGE FROM IPO
-------------------------------------------
AFTER AFTER AFTER AFTER CURRENT
IPO PRICE 1 DAY 1 WEEK 1 MONTH 3 MONTHS STOCK PRICE
TICKER SHORT NAME IPO DATE ($) (%) (%) (%) (%) 8/13/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CITZ CFS Bancorp Inc. 07/24/98 10.000 14.38% 9.38% NA NA 10.625
UCFC United Community Finl Corp. 07/09/98 10.000 50.00% 60.00% 57.50% NA 15.375
HRBT Hudson River Bancorp 07/01/98 10.000 25.63% 35.00% 33.75% NA 12.125
--------------------------------------------------------------------------------------------------------------------
Q3`98 AVERAGE 30.00% 34.79% 45.63% -- 12.708
MEDIAN 25.63% 35.00% 45.63% -- 12.125
--------------------------------------------------------------------------------------------------------------------
FKAN First Kansas Financial Corp. 06/29/98 10.000 23.13% 22.50% 15.00% NA 10.875
CFKY Columbia Financial of Kentucky 04/15/98 10.000 71.25% 59.38% 60.00% 40.00% 14.250
EFC EFC Bancorp Inc. 04/07/98 10.000 47.50% 49.38% 41.25% 36.25% 11.250
HBSC Heritage Bancorp Inc. 04/06/98 15.000 NA 46.25% 45.83% 32.50% 18.375
NEP Northeast PA Financial Corp. 04/01/98 10.000 55.00% 53.75% 54.38% 38.75% 12.750
--------------------------------------------------------------------------------------------------------------------
Q2`98 AVERAGE 49.22% 46.25% 43.29% 36.88% 13.500
MEDIAN 51.25% 49.38% 45.83% 37.50% 12.750
--------------------------------------------------------------------------------------------------------------------
BYS Bay State Bancorp 03/30/98 20.000 46.88% 48.13% 50.63% 35.00% 23.750
HLFC Home Loan Financial Corp. 03/26/98 10.000 52.50% 61.88% 67.50% 47.50% 14.500
CAVB Cavalry Bancorp Inc. 03/17/98 10.000 105.63% 143.75% 140.00% 122.50% 19.750
ICBC Independence Comm. Bank Corp. 03/17/98 10.000 72.50% 75.63% 81.25% 63.13% 13.750
RCBK Richmond County Financial Corp 02/18/98 10.000 63.13% 64.38% 78.75% 87.50% 15.063
HFBC HopFed Bancorp Inc. 02/09/98 10.000 68.13% 60.00% 67.50% 118.75% 17.250
TSBK Timberland Bancorp Inc. 01/13/98 10.000 45.00% 60.00% 60.00% 76.25% 14.875
MYST Mystic Financial Inc. 01/09/98 10.000 44.38% 56.25% 50.00% 73.75% 13.750
UTBI United Tennessee Bankshares 01/05/98 10.000 47.50% 37.50% 42.50% 50.00% 12.750
--------------------------------------------------------------------------------------------------------------------
Q1`98 AVERAGE 60.63% 67.50% 70.90% 74.93% 16.160
MEDIAN 52.50% 60.00% 67.50% 73.75% 14.875
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1998 YTD AVERAGE 52.03% 55.48% 59.11% 63.22% 14.768
MEDIAN 48.75% 56.25% 55.94% 50.00% 14.250
--------------------------------------------------------------------------------------------------------------------
</TABLE>
Due to significant weaknesses in subscription interest shown in recent second
steps, a downward adjustment for subscription interest is warranted.
<PAGE> 84
Conversion Valuation Appraisal Report Page: 1 - 78
================================================================================
6. VALUATION
- --------------------------------------
VALUATION APPROACH
- --------------------------------------
In applying the accepted valuation methodology promulgated by the regulators,
i.e., the pro-forma market value approach, four key pricing multiples were
considered. The four multiples include:
Price to earnings ("P/E")
Price to tangible book value ("P/TB")
Price to book value ("P/B")
Price to assets ("P/A")
All of the approaches were calculated on a pro-forma basis including the effects
of the conversion proceeds. All of the assumptions utilized are presented in
Exhibits 11, 12, and 13.
To ascertain the pro-forma estimated market value of the Bank, the market
multiples for the Comparable Group, all publicly traded thrifts and the recent
(1997 to date) second step conversion group were assessed.
Since thrift earnings in general have had a high degree of volatility over the
past decade, the P/B approach had gained in importance and is utilized
frequently as the benchmark for market value. It is interesting to note that the
P/B approach is more of a benchmark than a reliable valuation technique. A
better approach is the P/TB approach. In general, investors tend to price
financial institutions on a tangible book basis, because it incorporates the P/B
approach adjusted for intangibles. Most recently, the P/E approach has regained
favor among investors.
The evidence of the movement towards the P/E Multiple can be seen in the
acquisition, trading and IPO markets. The P/LTM EPS multiple for the mergers
completed in 1998 is 22.4x, for all public thrifts the trading P/LTM EPS is
21.2x and for recent standard conversions the pro forma earnings multiple is
17.0x.
As such, in estimating the market value for the Bank, the majority of the
emphasis was placed on the P/E approach. The P/B and P/TB were given much less
weight and the P/A multiple was not given much weight at all.
<PAGE> 85
Conversion Valuation Appraisal Report Page: 1 - 79
================================================================================
In terms of the market multiples, most weight was given to the Comparable Group.
The second highest weight was ascribed to the recent second step transactions.
Less weight was ascribed to all public thrifts and all Florida thrifts. The
multiples for the Comparable Group, all publicly traded thrifts, and Florida
publicly traded thrifts are shown in Exhibit 8.
Based upon the premiums and discounts defined in the section above, the Bank
pricing at the midpoint is estimated to be $130,000,000. Based upon a range
below and above the midpoint value, the relative values are $110,500,000 at the
minimum and $149,500,000 at the maximum respectively. At the supermaximum of the
range, the offering value would be $171,925,000.
This equates to exchange ratios of 2.1416, 2.5196, 2.8975, and 3.3321 at the
minimum, midpoint, maximum and supermaximum, respectively. As such, the Bank
would raise gross proceeds of $57,306,590, $67,417,770, $77,531,430 and
$89,161,760 at the minimum, midpoint, maximum and supermaximum of the EVR,
respectively.
At the various levels of the estimated value range, the offering would result in
the following offering data:
FIGURE 71 - VALUE RANGE OFFERING DATA
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Appraised Value
-------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum*
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Full Conversion Value $110,500,000 $130,000,000 $149,500,000 $171,925,000
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Exchange Percent 48.14% 48.14% 48.14% 48.14%
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Conversion Percent 51.86% 51.86% 51.86% 51.86%
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
Exchange Ratio 2.1416 2.5196 2.8975 3.3321
-------------------------------------------------------------------
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Source: FinPro Inc. Proforma Model
<PAGE> 86
Conversion Valuation Appraisal Report Page: 1 - 80
================================================================================
FIGURE 72 - VALUE RANGE OFFERING DATA
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Bank Comparables State National
-----------------------------------------------------------------------------------------
Mean Median Mean Median Mean Median
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Min 16.67
Price-Earnings Ratio P/E Mid 18.87 17.47 17.76 26.22 24.05 20.85 17.73
Max 21.28
Smax 23.81
Min 83.54%
Price-to-Book Ratio P/B Mid 92.08% 148.75% 155.30% 173.46% 165.33% 150.25% 133.33%
Max 99.70%
Smax 107.41%
Min 83.54%
Price-to-Tangible Book Ratio P/TB Mid 92.08% 154.38% 157.44% 183.92% 172.53% 156.31% 136.35%
Max 99.70%
Smax 107.41%
Min 13.56%
Price-to-Assets Ratio P/A Mid 15.79% 14.95% 15.62% 16.73% 12.08% 18.10% 16.71%
Max 17.96%
Smax 20.41
</TABLE>
Source: FinPro Inc. Pro forma Model and SNL Securities, Inc.
This equates to the following multiples:
FIGURE 73 - COMPARABLE PRICING MULTIPLES TO THE BANK'S PROFORMA MIDPOINT
<TABLE>
<CAPTION>
-----------------------------------------------------
Price Relative to
-----------------------------------------------------
Earnings Core Earnings Book Tangible Book Assets
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Bank (at midpoint) Full Conversion 18.87 18.87 92.08% 92.08% 15.79%
- ----------------------------------------------------------------------------------------------
Comparable Group Median 17.76 18.22 155.30% 157.44% 15.62%
- ----------------------------------------------------------------------------------------------
(Discount) Premium 6.25% 3.57% -40.71% -41.51% 1.09%
- ----------------------------------------------------------------------------------------------
</TABLE>
Source: FinPro Calculations
As Figure 73 demonstrates, the Bank is priced at a premium of 6.25% on an
earnings basis. On a core earnings basis the Bank is price at a 3.57% premium. A
discount of 41.51% is applied to the Bank relative to the Comparable Group on a
price to tangible book basis.
The Bank (at the supermaximum of the EVR) is priced at a 18.51% discount on a
tangible book basis when compared to recent second step conversions.
FIGURE 74 - RECENT SECOND STEP CONVERSION TRADING MULTIPLES TO THE BANK'S
PROFORMA MIDPOINT
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Price Relative to
------------------------------------------------------------------------
Earnings Core Earnings Book Tangible Book Assets
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Bank Full Conversion 18.87 18.87 92.08% 92.08% 15.79%
- -----------------------------------------------------------------------------------------------------------
Second Step Trading Multiples NA NA 109.40% 113.00% 23.23%
- -----------------------------------------------------------------------------------------------------------
(Discount) Premium NA NA -15.83% -18.51% -32.03%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Source: FinPro Calculations
<PAGE> 87
Conversion Valuation Appraisal Report Page: 1 - 81
- --------------------------------------------------------------------------------
- ------------------------------------
VALUATION CONCLUSION
- ------------------------------------
It is, therefore, our opinion that as of August 13, 1998, the estimated
pro-forma market value of the Bank in a full offering was $130,000,000 at the
midpoint of a range with a minimum of $110,500,000 to a maximum of $149,500,000
at 15% below and 15% above the midpoint of the range respectively. Assuming an
adjusted maximum value of 15% above the maximum value, the adjusted maximum
value or supermaximum value in a full offering is $171,925,000. The stock will
be issued at $10.00 per share. At the midpoint of the EVR, 1,143,630 shares will
be exchanged and 67,417,770, conversion shares will be issued based on an
exchange ratio of 2.5196.
FIGURE 75 - DETAILS ON THE ESTIMATED VALUATION RANGE
<TABLE>
<CAPTION>
------------------------------------------------------------------
Appraised Value
------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum*
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Full Conversion Value $110,500,000 $130,000,000 $149,500,000 $171,925,000
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Exchange Percent 48.14% 48.14% 48.14% 48.14%
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Conversion Percent 51.86% 51.86% 51.86% 51.86%
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
Exchange Ratio 2.1416 2.5196 2.8975 3.3321
------------------------------------------------------------------
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Pro-forma comparisons of the Bank's value range with the Comparable Group, all
public thrifts, Florida public thrifts and the recent second step conversion
group is shown in Exhibit 10.
<PAGE> 88
EXHIBIT 1
ABOUT THE FIRM
FinPro, Inc. was established in 1988 as a full service management consulting
firm specializing in providing advisory services to the Financial Institutions
Industry. FinPro provides management advisory services for Banks, Thrifts,
Finance Companies and NonBank Banks. Additionally, FinPro has performed work for
the Federal Bankruptcy Court, Federal Deposit Insurance Corporation, Office of
Thrift Supervision and the Resolution Trust Corporation. FinPro is recognized as
an expert in banking and in loan analysis by the Federal Bankruptcy Court.
FinPro is independently owned, not associated or affiliated with any transaction
oriented firm. This provides FinPro with an unbiased platform from which to make
analytical recommendations. FinPro believes that a client deserves to be told of
all the alternatives, along with their associated benefits and downsides and
that a decision should be made on its merits. This uniquely positions FinPro as
an objective third party willing to suggest the unpopular strategies, unlike its
competitors who rely on a transaction to get paid.
FinPro is headquartered in Liberty Corner, New Jersey and has a branch office in
Buffalo, New York.
FinPro principals are frequent speakers and presenters at financial institution
trade association functions. In addition, FinPro designed the Statistical Report
Analysis currently produced quarterly by the New Jersey Community and Savings
Bankers for its members. FinPro also regularly hosts President's Breakfast for
Presidents of New Jersey Community Banks.
FinPro maintains a library of databases encompassing bank and thrift capital
markets data, census data, branch deposit data, national peer data, market
research data along with many other related topics. As such, FinPro can provide
quick, current and precise analytical assessments based on timely data. In
addition, FinPro's geographic mapping capabilities give it a unique capability
to thematically illustrate multiple issues and to provide targeted marketing
opportunities to its clients.
FinPro has also designed and built PC-based software programs to utilize as
tools in its work. Examples include:
- A proprietary software program (LaRS (R)) to perform Planning loan review
analytics.
- A duration based asset/liability model.
- A five year strategic planning, three year business planning, and one year
budgetary model that completely simulates an entire institution.
- A branch and product profitability model.
- A market performance grid and branch improvement grid model.
- A criteria based market feasibility model.
Using systems such as these, FinPro provides state-of-the-art end products in
all of its product and service areas.
Listing of Services
FinPro offers a full array of products and services including:
Planning
Budgeting
Segment Planning
Strategic and Business Planning
Asset/Liability Management
Capital Markets
Corporate Finance
Deposit Studies and Valuations
Mergers and Acquisitions
Valuation
Bank Appraisals and Fairness Opinions
Bank Valuations and Franchise Value Enhancement
Market Research
Branch Acquisitions, Sales, Consolidations, Swaps and Applications
Branch and Product Profitability
Branch Network Evaluations
Competitive Analysis and Positioning
Customer Segmentation and Profiling
Market Feasibility Studies
Market Studies and Market Area Evaluations
Site Studies
Compliance
Compliance Reviews
Geocoding of Loans and Deposits
Portfolio Due Diligence
Loan Review
CRA Analysis and Improvement
Financial
Balance Sheet Restructuring
Earnings Improvement Studies
Operations
Financial Reporting
<PAGE> 89
EXHIBIT 1
ABOUT THE FIRM
Donald founded FinPro, Inc. in 1987 as a consulting and investment banking firm
located in New Jersey that specializes in providing advisory services to the
financial institutions industry.
Mr. Musso has a broad background in capital markets, bank valuations, enhancing
franchise value, corporate finance, mergers and acquisitions, asset/liability
management, strategic planning, market feasibility and differentiation, branch
acquisition, sales, consolidation and profitability, financial modeling and
analysis, balance sheet restructuring, product and segment profitability,
business development and project management. Besides his consulting experience,
he has solid industry experience, having worked for two $10 billion plus east
coast financial institutions.
Mr. Musso has provided expert testimony on financial institutions matters for
the Federal Bankruptcy Court, the Office of Thrift Supervision and the United
States Attorney's Office.
He is a frequent speaker on Financial Institution related topics and has
assisted trade groups in various activities. Mr. Musso is also on the faculty of
Stonier Graduate School of Banking, teaching Strategic Planning.
Prior to establishing FinPro, Donald had direct industry experience having
managed the Corporate Planning and Mergers and Acquisitions departments for
Meritor Financial Group, a $20 billion institution in Philadelphia. Before that,
he had responsibility for the banking, thrift and real estate consulting
practice in the State of New Jersey for Deloitte Haskins & Sells.
Donald has a B.S. in Finance from Villanova University and a M.B.A. in Finance
from Fairleigh Dickinson University.
[PICTURE]
Donald J. Musso
Managing Director and President
<PAGE> 90
EXHIBIT 1
ABOUT THE FIRM
Steve joined FinPro in 1989 and is one of the founding members of the firm.
Steve manages the FinPro office in Western New York and is responsible for
managing many strategic planning, loan review, market feasibility and CRA
engagements.
Steve has extensive experience in performing a wide array of consulting services
including strategic planning engagements, market feasibility studies, branch
profitability analysis, CRA analysis and loan review and work-out. In addition,
Steve has a broad background in market research and analysis.
Steve is responsible for the development of FinPro's market feasibility, CRA and
Loan Review products. Additionally he is responsible for the integration of
sophisticated analytical tools such as mapping software into the FinPro
processes.
Steve is a licensed real estate agent in New Jersey and prior to joining FinPro
he practiced real estate in Philadelphia, Pennsylvania.
Mr. Musso has a B.S. in Finance from Syracuse University.
[PICURE]
Steven P. Musso
Managing Director
<PAGE> 91
EXHIBIT 1
ABOUT THE FIRM
Ken joined the firm in 1996, bringing with him twelve years of banking and
securities experience.
Mr. Emerson has concentrated on bank valuations, strategic plans, market
feasibility studies, and branch profitability. His experience with respect to
accounting, reporting, and information systems serve him well in this capacity.
Ken's prior employers include Summit Bancorp, Valley Savings Bank, Howard
Savings Bank, Carteret Mortgage Company, CIT Data Corp., and Mahler & Emerson
Inc. Ken has managed financial reporting departments, complying with the
regulatory reporting requirements of the FRB, FDIC, OTS, State of New Jersey
Department of Banking, SEC, and NASD. Additional responsibilities have included
asset/liability, cash, back office, operations, objective and LAN management and
shareholder reporting, budgeting, acquisitions, sales, conversions, interfaces,
and FASB implementation.
Ken is a frequent speaker on Financial Institution related topics and is a
member of the AICPA and NJSCPA.
Mr. Emerson has a B.A. in Accounting from Franklin & Marshall College and is a
licensed CPA in the state of New Jersey.
[PICTURE]
Kenneth G. Emerson, CPA
Director
<PAGE> 92
EXHIBIT 1
ABOUT THE FIRM
Dennis joined the firm in June of 1996.
Dennis has refined FinPro's interest rate risk product and currently manages all
of the Firm's interest rate risk engagements. Additionally, he has concentrated
on merger and acquisition transactions, divestitures, shareholder value
enhancements and has designed and built FinPro's acquisition opportunity ranking
model. Conversion appraisals, market feasibility, competitive analysis, branch
profitability and branch sales/acquisitions are other areas of specialization.
Prior to joining the firm, Dennis received broad based experience in the
securities industry. He worked for Merrill Lynch & Company supporting their
Mortgage-Backed trading desk in New York, as an Allocations Specialist and for
Sandler O'Neill & Partners, where he provided sales and trade support.
He received a B.S. from Babson College with a triple-major in Finance,
Investments and Economics.
[PICTURE]
Dennis E. Gibney
Senior Financial Analyst
<PAGE> 93
EXHIBIT 1
ABOUT THE FIRM
Jeff joined the firm in March of 1998, although he has worked with the firm as
an intern since December of 1992.
Over the years, Mr. Hammill has concentrated on loan reviews, market feasibility
studies, site studies, market research, and market tours. He is currently
creating a continuing marketing program that assists institutions in identifying
local businesses and retail customer segments to target to gain new accounts.
Jeff also compiles background chapters for strategic and business plans.
Mr. Hammill has a B.S. in Agricultural Engineering from the University of
Illinois and is a licensed commercial pilot and flight instructor.
[PICTURE]
Jeffrey S. Hammill
Senior Analyst
<PAGE> 94
EXHIBIT 2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
$ IN 000'S
<TABLE>
<CAPTION>
ASSETS June 30, December 31, September
--------------------------------------------------
1998 1997 1996 1996
--------------------------------------------------
(In Thousands)
--------------------------------------------------
Assets:
<S> <C> <C> <C> <C>
Cash and amounts due from depository institutions $ 16,477 $ 12,333 $ 13,547 $ 15,600
Interest-bearing deposits 30,948 13,621 28,895 29,180
-------- -------- -------- --------
Total cash and cash equivalents 47,425 25,954 42,442 44,780
Securities available for sale 91,316 142,269 123,152 124,287
Investments - held to maturity 21,443 21,388 22,139 22,293
Mortgage-backed and related securities - held to maturity 41,884 46,413 53,405 54,945
Loans receivable, net 527,375 451,709 389,040 376,219
Accrued interest receivable 2,725 3,162 2,354 2,208
Office properties and equipment - net 22,157 20,206 16,368 16,359
Real estate owned, net 711 592 1,455 1,384
Federal Home Loan Bank stock - at cost 3,782 3,264 2,864 5,384
Other assets 6,670 5,176 1,990 5,642
-------- -------- -------- --------
Total Assets $765,488 $720,133 $655,209 $650,332
======== ======== ======== ========
LIABILITIES
Deposits $574,383 $550,708 $513,709 $498,929
Mortgage-backed bond, net 15,883 16,333 17,230 17,453
Advances from Federal Home Loan Bank 75,630 57,341 34,763 36,350
Employee Stock Ownership Plan borrowings -- 1,424 1,915 2,064
Advances by borrowers for taxes and insurance 5,467 931 1,059 6,861
Other liabilities 8,077 9,101 7,753 11,599
Deferred income taxes, net 2,970 3,036 2,661 2,020
-------- -------- -------- --------
Total liabilities 682,410 638,874 579,090 575,276
-------- -------- -------- --------
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred Stock -- -- -- --
Common stock 5,100 5,095 5,090 5,090
Additional paid-in Capital 30,621 30,278 29,920 29,881
Retained income - substantially restricted 49,347 47,887 44,603 43,902
Common stock purchased by Employee Stock Ownership Plan (1,227) (1,424) (1,818) (1,965)
Common stock issued to Recognition and Retention Plan (330) (423) (608) (654)
Unrealized decrease in market value of securities
available for sale, net (433) (154) (1,068) (1,198)
-------- -------- -------- --------
Total shareholders' equity 83,078 81,259 76,119 75,056
-------- -------- -------- --------
Total liabilities and shareholders' equity $765,488 $720,133 $655,209 $650,332
======== ======== ======== ========
</TABLE>
Source: Audited Financial Statements
<PAGE> 95
EXHIBIT 3
CONSOLIDATED STATEMENTS OF OPERATIONS
$ IN 000'S
<TABLE>
<CAPTION>
For the Year For the Three For the Years
For the Six Months Ended Ended Months Ended Ended
June 30, December December September 30,
--------------------------------------------------------------------------------
1998 1997 1997 1996 1996 1995
--------------------------------------------------------------------------------
Interest income:
<S> <C> <C> <C> <C> <C> <C>
Real Estate Loans $ 18,377 $ 15,479 $ 31,846 $ 7,427 $ 26,765 $ 23,661
Consumer and commercial business loans 913 817 1,644 408 1,508 1,197
Investment securities and securities available 4,754 5,280 10,422 2,566 8,720 5,945
Mortgage-backed and related securities 1,637 2,010 4,448 1,004 4,403 4,198
Interest-earning deposits 1,146 991 1,956 491 2,493 2,719
----------- ----------- ----------- ---------- ----------- ----------
Total interest deposits 26,827 24,577 50,316 11,896 43,889 37,720
----------- ----------- ----------- ---------- ----------- ----------
Interest Expense:
Deposits 11,976 11,031 22,648 5,251 19,247 15,679
Advances from Federal Home Loan Bank
and other borrowings 2,679 2,229 4,742 1,127 3,612 2,955
----------- ----------- ----------- ---------- ----------- ----------
Total interest expense 14,655 13,260 27,390 6,378 22,859 18,634
----------- ----------- ----------- ---------- ----------- ----------
Net interest income 12,172 11,317 22,926 5,518 21,030 19,086
Provision for loan losses 213 83 264 243 98 240
----------- ----------- ----------- ---------- ----------- ----------
Net interest income after provision
for loan losses 11,959 11,234 22,662 5,275 20,932 18,846
----------- ----------- ----------- ---------- ----------- ----------
Other income:
Servicing income and other fees 104 158 269 33 148 184
NOW account and other customer fees 1,677 1,608 3,339 820 3,150 2,767
Net gain (loss) on sale and early maturities -- -- (8) 51 --
Gain on early maturity of investment -- -- -- -- 254 --
Gain on sale of other assets -- -- 617 -- -- --
Net gain (loss) on sale of loans -- -- 3 3 (225) --
Miscellaneous (25) 96 (35) 318 217 443
----------- ----------- ----------- ---------- ----------- ----------
Total other income 1,756 1,862 4,185 1,225 3,544 3,394
----------- ----------- ----------- ---------- ----------- ----------
Operating expense:
Employee compensation 4,994 4,253 8,989 2,125 7,785 7,293
Occupancy and equipment 2,527 2,420 5,059 1,201 4,581 4,506
Net (gain) loss on real estate owned 20 (3) (112) 37 (243) (812)
Advertising and promotion 467 432 734 240 616 545
Federal deposit insurance premium 171 99 270 288 3,883 1,029
Miscellaneous 1,667 1,604 3,621 753 3,178 2,342
----------- ----------- ----------- ---------- ----------- ----------
Total operating expense 9,846 8,805 18,561 4,644 19,800 14,903
----------- ----------- ----------- ---------- ----------- ----------
Income before provision 3,869 4,291 8,286 1,856 4,676 7,337
----------- ----------- ----------- ---------- ----------- ----------
Provision (benefit) for income taxes
Current 3,042 65 1,817 3,126
Deferred (112) 631 (1,056) (363)
----------- ---------- ----------- ----------
Total provision 1,358 1,556 2,930 696 761 2,763
----------- ----------- ----------- ---------- ----------- ----------
Net Income $ 2,511 $ 2,735 $ 5,356 $ 1,160 $ 3,915 $ 4,574
=========== =========== =========== ========== =========== ==========
Earnings per share-basic $ 0.51 $ 0.55 $ 1.09 $ 0.24 $ 0.80 $ 0.94
=========== =========== =========== ========== =========== ==========
Earnings per share-diluted $ 0.49 $ 0.54 $ 1.06 $ 0.23 $ 0.79 $ 0.94
=========== =========== =========== ========== =========== ==========
Weighted avg. common shares outstanding-basic 4,970,782 4,919,960 4,929,989 4,902,479 4,869,238 4,845,384
=========== =========== =========== ========== =========== ==========
Weighted avg. common shares outstanding-diluted 5,116,956 5,021,739 5,054,853 4,951,820 4,936,763 4,882,658
=========== =========== =========== ========== =========== ==========
</TABLE>
Source: Audited Financial Statements
<PAGE> 96
EXHIBIT 4
RECONCILIATION OF TFR STATEMENT OF OPERATION TO CONSOLIDATED STATEMENTS OF
OPERATIONS
- -------------------------------------------------------------------------------
COMMUNITY SAVINGS, FA
OTS Docket # : 05939
TFR Schedule SO and Consolidated Statements of Operations
For the Twelve Months Ended June 30, 1998
(Dollars in thousands)
<TABLE>
FINANCIAL
STATEMENT
DESCRIPTION TFR DESCRIPTION INCOME
- ----------- --- ----------- ------
<S> <C> <C> <C>
9/30/97 SO Net Income $1,549 Twelve Months Ended 6/30/98 $5,132
9/30/97 mid-tier earnings --
12/31/97 SO Net Income 1,097 --
12/31/97 mid-tier earnings (24)
3/31/98 SO Net Income 1,233 --
3/31/98 mid-tier earnings (1)
6/30/98 SO Net Income 1,191
6/30/98 mid-tier earnings 88
------ ------
Twelve Months Ended 6/30/98 $5,133 Twelve Months Ended 6/30/98 $5,132
</TABLE>
Rounding difference (1)
Note: The Mid-Tier's source of earnings are the intercompany loans
including the ESOP loan
Note: Mid-Tier expenses are shareholder related
<PAGE> 97
EXHIBIT 5
CONSOLIDATED STATEMENTS OF CHANGES IN NET WORTH
$ IN 000'S
<TABLE>
<CAPTION>
Retained Employee
Income- Stock
Common Additional Substantially Ownership
Stock Paid-in Capital Restricted Plan
--------------------------------------------------
(Thousands)
<S> <C> <C> <C> <C>
Balance - September 30, 1994 $ -- $ -- $ 38,583 $ --
Issuance of Common Stock pursuant to Reorganization,
net of costs of issuance of $1,712 5,000 28,984 -- --
Assets distributed to Mutual Holding Company pursuant to
Reorganization -- -- (200) --
Purchase of Common Stock by Employee Stock Ownership Plan -- -- -- (2,753)
Distribution of Common Stock to Recognition and Retention Plan 89 1,278 -- --
Net income for the year ended September 30, 1995 -- -- 4,574 --
Unrealized increase in market value of assets available for sale
(net of income taxes) -- -- -- --
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan -- (80) -- 297
Dividends declared -- -- (1,291) --
------- -------- -------- --------
Balance - September 30, 1995 5,089 30,182 41,666 (2,456)
Net income for the year ended September 30, 1996 -- -- 3,915 --
Stock options exercised 1 12 -- --
Transfer from securities held to maturity to securities available
for sale (net of income taxes) -- -- -- --
Unrealized decrease in market value of assets available for
sale (net of income taxes) -- -- -- --
Adjustment to deferred compensation - Recognition
and Retention Plan -- (378) -- --
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan -- 65 -- 491
Dividends declared -- -- (1,679) --
------- -------- -------- --------
Balance - September 30, 1996 5,090 29,881 43,902 (1,965)
Net income for three months ended December 31, 1996 -- -- 1,160 --
Stock options exercised -- 4 -- --
Unrealized increase in market value of assets available for
sale (net of income taxes) -- -- -- --
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan -- 35 -- 147
Dividends declared -- -- (459) --
------- -------- -------- --------
Balance - December 31, 1996 5,090 29,920 44,603 (1,818)
Net income for the year ended December 31, 1997 -- -- 5,356 --
Stock options exercised 5 45 -- --
Unrealized increase in market value of assets available for
sale (net of income taxes) -- -- -- --
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan -- 313 -- 394
Dividends declared -- -- (2,072) --
------- -------- -------- --------
Balance - December 31, 1997 5,095 30,278 47,887 (1,424)
------- -------- -------- --------
Net income for the six months ended June 30, 1998 -- -- 2,511 --
Stock options exercised 5 45 -- --
Unrealized increase in market value of assets available for
sale (net of income taxes) -- -- -- --
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan -- 298 -- 197
Dividends declared -- -- (1,051) --
------- -------- -------- --------
Balance - June 30, 1998 $ 5,100 $ 30,621 $ 49,347 $ (1,227)
</TABLE>
<TABLE>
<CAPTION>
Unrealized
(Decrease) In
Recognition Market Value
and of Securities
Retention Available
Plan for Sale Total
---------------------------------
<S> <C> <C> <C>
Balance - September 30, 1994 $ -- $ (473) $ 38,110
Issuance of Common Stock pursuant to Reorganization,
net of costs of issuance of $1,712 -- -- 33,984
Assets distributed to Mutual Holding Company pursuant to
Reorganization -- -- (200)
Purchase of Common Stock by Employee Stock Ownership Plan -- -- (2,753)
Distribution of Common Stock to Recognition and Retention Plan (1,367) -- --
Net income for the year ended September 30, 1995 -- -- 4,574
Unrealized increase in market value of assets available for sale
(net of income taxes) -- 2 2
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan 205 -- 422
Dividends declared -- -- (1,291)
--------- -------- ---------
Balance - September 30, 1995 (1,162) (471) 72,848
Net income for the year ended September 30, 1996 -- -- 3,915
Stock options exercised -- -- 13
Transfer from securities held to maturity to securities available
for sale (net of income taxes) -- 247 247
Unrealized decrease in market value of assets available for
sale (net of income taxes) -- (974) (974)
Adjustment to deferred compensation - Recognition
and Retention Plan 378 -- --
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan 130 -- 686
Dividends declared -- -- (1,679)
--------- -------- --------
Balance - September 30, 1996 (654) (1,198) 75,056
Net income for three months ended December 31, 1996 -- -- 1,160
Stock options exercised -- -- 4
Unrealized increase in market value of assets available for
sale (net of income taxes) -- 130 130
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan 46 -- 228
Dividends declared -- -- (459)
--------- -------- --------
Balance - December 31, 1996 (608) (1,068) 76,119
Net income for the year ended December 31, 1997 -- -- 5,356
Stock options exercised -- -- 50
Unrealized increase in market value of assets available for
sale (net of income taxes) -- 914 914
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan 185 -- 892
Dividends declared -- -- (2,072)
--------- -------- --------
Balance - December 31, 1997 (423) (154) 81,259
--------- -------- --------
Net income for the six months ended June 30, 1998 -- -- 2,511
Stock options exercised -- -- 50
Unrealized increase in market value of assets available for
sale (net of income taxes) -- (279) (279)
Amortization of deferred compensation - Employee Stock
Ownership Plan and Recognition and Retention Plan 93 -- 588
Dividends declared -- -- (1,051)
--------- -------- --------
Balance - June 30, 1998 $ (330) $ (433) $ 83,078
--------- -------- --------
</TABLE>
Source: Audited Financial Statements
<PAGE> 98
EXHIBIT 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
$ IN 000's
<TABLE>
<CAPTION>
-------------------------
For the Six Months Ended
June 30,
-------------------------
1998 1997
-------------------------
Cash flows from (for) operating activities:
<S> <C> <C>
Net income $ 2,511 $ 2,735
Adjustments to reconcile net income to net cash provided by (for) operating activities:
Depreciation 720 677
Employee Stock Ownership Plan and Recognition and Retention Plan
compensation expense 588 371
Deferred income tax provision -- --
Accretion of discounts, amortization of premiums, and other deferred yield items (1,531) (766)
Provision for losses on other assets -- --
Provision for loan losses 213 83
Provision for losses and net (gains) losses on sales of real estate owned (15) (2)
Amortization of discount on mortgage-backed bond 243 246
Net (gain) loss on sale and early maturities of: Securities available for sale -- --
Loans and other assets 1 (14)
Gain on early maturity of investment -- --
Increase in accrued interest receivable 437 (526)
(Increase) decrease in other assets (1,494) (1,967)
Decrease (increase) in loans available for sale -- (10)
(Increase) decrease in other liabilities (1,024) 526
-------- --------
Net cash provided by (used for) operating activities 649 1,353
-------- --------
Cash flows from (for) investing activities:
Loan originations and principal payments on loans - net (37,633) (18,406)
Principal payments received on mortgage-backed and related securities and
securities available for sale 17,004 6,389
Principal payments received on investments - held to maturity 743 939
Purchases of: Loans (38,307) (2,590)
Mortgage-backed and related securities -- --
Investments - held to maturity -- --
Federal Home Loan Bank stock (518) (399)
Securities available for sale -- (41,309)
Office property and equipment (2,674) (2,756)
Proceeds from sales of: Securities available for sale -- --
Federal Home Loan Bank stock -- --
Office property and equipment 1 78
Real estate acquired in settlement of loans 522 189
Loans purchased -- --
Proceeds from calls or maturities of investments of investments-held to maturity
and securities available for sale 38,381 12,300
Investment in real estate venture -- (27)
Other investing (79) (159)
-------- --------
Net cash used for investing activities (22,560) (45,751)
</TABLE>
<TABLE>
<CAPTION>
--------------------------
For the Year For the Three
Ended Months Ended
December 31, December 31,
--------------------------
1997 1997
--------------------------
<S> <C> <C>
Cash flows from (for) operating activities:
Net income $ 5,356 $ 1,160
Adjustments to reconcile net income to net cash provided by (for) operating activities:
Depreciation 1,503 329
Employee Stock Ownership Plan and Recognition and Retention Plan
compensation expense 892 228
Deferred income tax provision (112) 631
Accretion of discounts, amortization of premiums, and other deferred yield items (1,915) (396)
Provision for losses on other assets -- --
Provision for loan losses 264 243
Provision for losses and net (gains) losses on sales of real estate owned (173) --
Amortization of discount on mortgage-backed bond 490 123
Net (gain) loss on sale and early maturities of: Securities available for sale 8 (51)
Loans and other assets (16) (10)
Gain on early maturity of investment -- --
Increase in accrued interest receivable (808) (146)
(Increase) decrease in other assets (3,186) 327
Decrease (increase) in loans available for sale 70 137
(Increase) decrease in other liabilities 1,347 (3,851)
-------- --------
Net cash provided by (used for) operating activities 3,720 (1,276)
-------- --------
Cash flows from (for) investing activities:
Loan originations and principal payments on loans - net (38,694) (11,257)
Principal payments received on mortgage-backed and related securities and
securities available for sale 14,422 2,840
Principal payments received on investments - held to maturity 1,825 475
Purchases of: Loans (24,455) (1,998)
Mortgage-backed and related securities -- --
Investments - held to maturity -- --
Federal Home Loan Bank stock (400) --
Securities available for sale (46,311) --
Office property and equipment (5,300) (344)
Proceeds from sales of: Securities available for sale 2,435 100
Federal Home Loan Bank stock -- 2,520
Office property and equipment 128 178
Real estate acquired in settlement of loans 1,551 --
Loans purchased -- --
Proceeds from calls or maturities of investments of investments-held to maturity
and securities available for sale 19,300 --
Investment in real estate venture -- 156
Other investing (351) (184)
-------- --------
Net cash used for investing activities (75,850) (7,514)
</TABLE>
<TABLE>
<CAPTION>
---------------------
For the Years Ended
September 30,
---------------------
1996 1995
---------------------
Cash flows from (for) operating activities:
<S> <C> <C>
Net income $ 3,915 $ 4,574
Adjustments to reconcile net income to net cash provided by (for) operating activities:
Depreciation 1,304 1,353
Employee Stock Ownership Plan and Recognition and Retention Plan
compensation expense 686 422
Deferred income tax provision (1,056) (363)
Accretion of discounts, amortization of premiums, and other deferred yield items (1,494) (1,497)
Provision for losses on other assets 200 --
Provision for loan losses 98 240
Provision for losses and net (gains) losses on sales of real estate owned (67) (102)
Amortization of discount on mortgage-backed bond 496 498
Net (gain) loss on sale and early maturities of: Securities available for sale -- --
Loans and other assets 208 4
Gain on early maturity of investment (254) --
Increase in accrued interest receivable (65) (1,181)
(Increase) decrease in other assets (609) 473
Decrease (increase) in loans available for sale 109 (316)
(Increase) decrease in other liabilities 4,424 85
-------- --------
Net cash provided by (used for) operating activities 7,895 4,190
-------- --------
Cash flows from (for) investing activities:
Loan originations and principal payments on loans - net (34,182) (10,825)
Principal payments received on mortgage-backed and related securities and
securities available for sale 11,454 5,286
Principal payments received on investments - held to maturity 2,671 2,694
Purchases of: Loans (16,775) (2,728)
Mortgage-backed and related securities (6,013) (41,549)
Investments - held to maturity -- (30,085)
Federal Home Loan Bank stock -- --
Securities available for sale (67,641) --
Office property and equipment (1,481) (1,805)
Proceeds from sales of: Securities available for sale 749 --
Federal Home Loan Bank stock 2,000 --
Office property and equipment 443 25
Real estate acquired in settlement of loans 767 3,130
Loans purchased 3,452 --
Proceeds from calls or maturities of investments of investments-held to maturity
and securities available for sale 22,012 21,000
Investment in real estate venture 1,305 1,588
Other investing (455) 148
-------- --------
Net cash used for investing activities (81,694) (53,121)
</TABLE>
Source: Audited Financial Statements
<PAGE> 99
Page 1 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CORPORATE
--------------------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- -------------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank Private San Francisco CA 225 NA SAIF
%CCMD Chevy Chase Bank, FSB Private Chevy Chase MD 128 NA SAIF
AABC Access Anytime Bancorp Inc. NASDAQ Clovis NM 3 08/08/86 SAIF
ABBK Abington Bancorp Inc. NASDAQ Abington MA 9 06/10/86 BIF
ABCL Alliance Bancorp NASDAQ Hinsdale IL 20 07/07/92 SAIF
ABCW Anchor BanCorp Wisconsin NASDAQ Madison WI 35 07/16/92 SAIF
AFBC Advance Financial Bancorp NASDAQ Wellsburg WV 2 01/02/97 SAIF
AFED AFSALA Bancorp Inc. NASDAQ Amsterdam NY 6 10/01/96 SAIF
AHCI Ambanc Holding Co. NASDAQ Amsterdam NY 12 12/27/95 BIF
AHM H.F. Ahmanson & Co. NYSE Irwindale CA 409 10/25/72 SAIF
ALBC Albion Banc Corp. NASDAQ Albion NY 2 07/26/93 SAIF
ALBK ALBANK Financial Corp. NASDAQ Albany NY 109 04/01/92 SAIF
ALLB Alliance Bank (MHC) NASDAQ Broomall PA 7 03/03/95 SAIF
AMFC AMB Financial Corp. NASDAQ Munster IN 4 04/01/96 SAIF
ANA Acadiana Bancshares Inc. AMSE Lafayette LA 5 07/16/96 SAIF
ANDB Andover Bancorp Inc. NASDAQ Andover MA 12 05/08/86 BIF
ANE Alliance Bncp of New England AMSE Vernon CT 7 12/19/86 BIF
ASBI Ameriana Bancorp NASDAQ New Castle IN 9 03/02/87 SAIF
ASBP ASB Financial Corp. NASDAQ Portsmouth OH 1 05/11/95 SAIF
ASFC Astoria Financial Corp. NASDAQ Lake Success NY 61 11/18/93 SAIF
ATSB AmTrust Capital Corp. NASDAQ Peru IN 2 03/28/95 SAIF
AVND Avondale Financial Corp. NASDAQ Chicago IL 5 04/07/95 SAIF
BANC BankAtlantic Bancorp Inc. NASDAQ Fort Lauderdale FL 65 11/29/83 SAIF
BCSB BCSB Bankcorp Inc. (MHC) NASDAQ Baltimore MD 6 07/08/98 SAIF
BDJI First Federal Bancorp. NASDAQ Bemidji MN 5 04/04/95 SAIF
BFD BostonFed Bancorp Inc. AMSE Burlington MA 10 10/24/95 SAIF
BFFC Big Foot Financial Corp. NASDAQ Long Grove IL 3 12/20/96 SAIF
BFSB Bedford Bancshares Inc. NASDAQ Bedford VA 3 08/22/94 SAIF
BKC American Bank of Connecticut AMSE Waterbury CT 14 12/01/81 BIF
BKCT Bancorp Connecticut Inc. NASDAQ Southington CT 3 07/03/86 BIF
BKUNA BankUnited Financial Corp. NASDAQ Coral Gables FL 19 12/11/85 SAIF
BNKU Bank United Corp. NASDAQ Houston TX 81 08/09/96 SAIF
BPLS Bank Plus Corp. NASDAQ Los Angeles CA 38 NA SAIF
BRBI Blue River Bancshares Inc. NASDAQ Shelbyville IN 4 NA SAIF
BRKL Brookline Bancorp (MHC) NASDAQ Brookline MA 5 03/25/98 BIF
BTHL Bethel Bancorp NASDAQ Portland ME 8 08/19/87 BIF
BVCC Bay View Capital Corp. NASDAQ San Mateo CA 56 05/09/86 SAIF
BWFC Bank West Financial Corp. NASDAQ Grand Rapids MI 3 03/30/95 SAIF
BYFC Broadway Financial Corp. NASDAQ Los Angeles CA 4 01/09/96 SAIF
BYS Bay State Bancorp AMSE Brookline MA 5 03/30/98 SAIF
CAFI Camco Financial Corp. NASDAQ Cambridge OH 14 NA SAIF
CASB Cascade Financial Corp. NASDAQ Everett WA 11 09/16/92 SAIF
CASH First Midwest Financial Inc. NASDAQ Storm Lake IA 14 09/20/93 SAIF
CATB Catskill Financial Corp. NASDAQ Catskill NY 5 04/18/96 BIF
CAVB Cavalry Bancorp Inc. NASDAQ Murfreesboro TN 9 03/17/98 SAIF
CBCI Calumet Bancorp Inc. NASDAQ Dolton IL 5 02/20/92 SAIF
CBES CBES Bancorp Inc. NASDAQ Excelsior Springs MO 3 09/30/96 SAIF
CBK Citizens First Financial Corp. AMSE Bloomington IL 6 05/01/96 SAIF
CBSA Coastal Bancorp Inc. NASDAQ Houston TX 37 NA SAIF
CCFH CCF Holding Co. NASDAQ Jonesboro GA 5 07/12/95 SAIF
CEBK Central Co-operative Bank NASDAQ Somerville MA 8 10/24/86 BIF
CENB Century Bancorp Inc. NASDAQ Thomasville NC 1 12/23/96 SAIF
CFB Commercial Federal Corp. NYSE Omaha NE 215 12/31/84 SAIF
CFCP Coastal Financial Corp. NASDAQ Myrtle Beach SC 11 09/26/90 SAIF
CFFC Community Financial Corp. NASDAQ Staunton VA 4 03/30/88 SAIF
CFKY Columbia Financial of Kentucky NASDAQ Fort Mitchell KY 5 04/15/98 SAIF
CFNC Carolina Fincorp Inc. NASDAQ Rockingham NC 4 11/25/96 SAIF
CFSB CFSB Bancorp Inc. NASDAQ Lansing MI 17 06/22/90 SAIF
CFTP Community Federal Bancorp NASDAQ Tupelo MS 2 03/26/96 SAIF
CIBI Community Investors Bancorp NASDAQ Bucyrus OH 3 02/07/95 SAIF
CITZ CFS Bancorp Inc. NASDAQ Munster IN 24 07/24/98 SAIF
CKFB CKF Bancorp Inc. NASDAQ Danville KY 1 01/04/95 SAIF
CLAS Classic Bancshares Inc. NASDAQ Ashland KY 5 12/29/95 SAIF
CMRN Cameron Financial Corp NASDAQ Cameron MO 4 04/03/95 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
------------ -------------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ------ ------------ -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
%CAL Not Avail. 33,994,377 NA NA 47.20 41.77
%CCMD Not Avail. 6,301,924 53.61 42.63 79.53 9.87
AABC Regular 116,921 76.51 66.07 86.35 4.92
ABBK Regular 546,208 99.79 63.18 63.32 27.23
ABCL Regular 2,068,197 100.56 64.08 63.73 25.37
ABCW Regular 2,057,635 117.84 81.97 69.56 22.58
AFBC Regular 110,668 115.29 86.06 74.65 10.59
AFED Regular 165,925 56.13 46.99 83.71 1.03
AHCI Regular 519,831 88.66 55.34 62.41 22.44
AHM Regular 52,826,336 94.63 67.01 70.81 19.51
ALBC Regular 74,118 102.18 77.17 75.52 13.74
ALBK Regular 4,130,868 81.76 69.37 84.86 2.13
ALLB Mutual HC 277,490 71.32 54.94 77.02 11.87
AMFC Regular 111,338 115.99 78.86 67.99 18.03
ANA Regular 298,148 NA NA 67.72 16.68
ANDB Regular 1,392,342 106.47 74.33 69.81 21.15
ANE Regular 252,287 73.12 65.44 89.50 2.25
ASBI Regular 388,491 87.64 72.49 82.72 3.87
ASBP Regular 114,907 86.34 68.39 79.21 3.71
ASFC Regular 11,575,551 80.28 42.25 52.63 37.93
ATSB Regular 69,106 104.82 70.11 66.89 21.51
AVND Regular 520,132 53.50 37.31 69.74 20.34
BANC Regular 3,756,571 151.40 73.06 48.25 38.77
BCSB Mutual HC 320,627 77.62 53.93 69.48 0.00
BDJI Regular 121,315 66.51 46.52 69.94 17.70
BFD Regular 1,058,207 136.79 84.32 61.64 29.68
BFFC Regular 209,474 88.45 51.82 58.58 20.53
BFSB Regular 156,509 120.39 80.66 67.00 19.17
BKC Regular 685,545 84.85 58.99 69.52 20.86
BKCT Regular 495,178 80.75 52.83 65.42 23.76
BKUNA Regular 3,326,968 138.03 76.08 55.12 32.45
BNKU Not Avail. 13,095,947 151.99 74.50 49.02 39.63
BPLS Not Avail. 4,286,237 NA NA 71.28 23.60
BRBI Not Avail. 350,208 NM 0.00 0.00 49.05
BRKL Mutual HC 835,329 113.24 63.37 55.96 9.39
BTHL Regular 218,187 114.79 77.14 67.20 22.23
BVCC Regular 5,720,109 135.25 78.35 57.93 34.73
BWFC Regular 180,354 105.51 68.77 65.18 21.19
BYFC Regular 128,444 94.46 83.51 88.41 0.00
BYS Regular 287,617 114.60 81.50 71.12 5.22
CAFI Not Avail. 575,563 112.85 84.23 74.64 13.81
CASB Regular 444,155 124.43 87.55 70.36 19.55
CASH Regular 421,258 NA NA 63.97 25.10
CATB Regular 309,566 64.11 43.38 67.66 8.36
CAVB Regular 339,846 99.95 69.00 69.03 0.00
CBCI Regular 491,961 108.90 77.28 70.96 9.16
CBES Regular 123,710 134.64 93.36 69.34 15.76
CBK Regular 279,849 114.35 82.26 71.94 12.74
CBSA Not Avail. 2,980,528 104.66 47.72 45.59 48.73
CCFH Regular 158,539 81.38 72.85 89.51 2.14
CEBK Regular 376,063 101.94 74.91 73.49 15.69
CENB Regular 104,379 94.66 65.55 69.25 0.00
CFB Regular 8,853,018 126.09 76.38 60.58 30.13
CFCP Regular 616,887 114.61 68.36 59.64 33.17
CFFC Regular 183,894 118.40 88.96 75.13 9.79
CFKY Regular 127,726 54.20 48.32 89.15 0.00
CFNC Regular 118,468 92.87 70.79 76.23 0.00
CFSB Regular 847,769 130.60 89.03 68.17 22.30
CFTP Regular 263,246 98.59 53.59 54.36 20.74
CIBI Regular 101,734 111.02 82.25 74.09 14.33
CITZ Regular 746,050 45.57 40.89 89.73 0.00
CKFB Regular 62,759 121.45 89.58 73.76 3.46
CLAS Regular 137,984 85.97 67.54 78.56 5.33
CMRN Regular 220,784 136.16 82.37 60.49 18.23
</TABLE>
<PAGE> 100
Page 2 of 40
SELECTED DATA ON ALL PUBLIC THRIFTS EXHIBIT 7
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. NASDAQ Norristown PA 58 06/17/96 SAIF
CMSV Community Savings Bnkshrs(MHC) NASDAQ North Palm Beach FL 21 10/24/94 SAIF
CNIT CENIT Bancorp Inc. NASDAQ Norfolk VA 20 08/06/92 SAIF
CNSB CNS Bancorp Inc. NASDAQ Jefferson City MO 5 06/12/96 SAIF
CNY Carver Bancorp Inc. AMSE New York NY 7 10/25/94 SAIF
COFI Charter One Financial NASDAQ Cleveland OH 223 01/22/88 SAIF
CONE Conestoga Bancorp, Inc. NASDAQ Roslyn NY 8 03/30/94 SAIF
COOP Cooperative Bankshares Inc. NASDAQ Wilmington NC 16 08/21/91 SAIF
CRSB Crusader Holding Corp. NASDAQ Philadelphia PA 2 NA SAIF
CRZY Crazy Woman Creek Bancorp NASDAQ Buffalo WY 1 03/29/96 SAIF
CSBF CSB Financial Group Inc. NASDAQ Centralia IL 2 10/09/95 SAIF
CVAL Chester Valley Bancorp Inc. NASDAQ Downingtown PA 7 03/27/87 SAIF
DCBI Delphos Citizens Bancorp Inc. NASDAQ Delphos OH 1 11/21/96 SAIF
DCOM Dime Community Bancshares Inc. NASDAQ Brooklyn NY 14 06/26/96 BIF
DIBK Dime Financial Corp. NASDAQ Wallingford CT 11 07/09/86 BIF
DME Dime Bancorp Inc. NYSE New York NY 91 08/19/86 BIF
DNFC D & N Financial Corp. NASDAQ Hancock MI 36 02/13/85 SAIF
DSL Downey Financial Corp. NYSE Newport Beach CA 90 01/01/71 SAIF
EBI Equality Bancorp Inc. AMSE St. Louis MO 3 12/02/97 SAIF
EBSI Eagle Bancshares NASDAQ Tucker GA 15 04/01/86 SAIF
EFBC Empire Federal Bancorp Inc. NASDAQ Livingston MT 3 01/27/97 SAIF
EFBI Enterprise Federal Bancorp NASDAQ West Chester OH 7 10/17/94 SAIF
EFC EFC Bancorp Inc. AMSE Elgin IL 6 04/07/98 SAIF
EGLB Eagle BancGroup Inc. NASDAQ Bloomington IL 3 07/01/96 SAIF
EMLD Emerald Financial Corp. NASDAQ Strongsville OH 14 10/05/93 SAIF
EQSB Equitable Federal Savings Bank NASDAQ Wheaton MD 4 09/10/93 SAIF
ESBF ESB Financial Corp. NASDAQ Ellwood City PA 11 06/13/90 SAIF
ESBK Elmira Savings Bank (The) NASDAQ Elmira NY 6 03/01/85 BIF
ESX Essex Bancorp Inc. AMSE Norfolk VA 4 NA SAIF
ETFS East Texas Financial Services NASDAQ Tyler TX 2 01/10/95 SAIF
FAB FIRSTFED AMERICA BANCORP INC. AMSE Swansea MA 13 01/15/97 SAIF
FBBC First Bell Bancorp Inc. NASDAQ Pittsburgh PA 7 06/29/95 SAIF
FBCI Fidelity Bancorp Inc. NASDAQ Chicago IL 5 12/15/93 SAIF
FBCV 1ST Bancorp NASDAQ Vincennes IN 2 04/07/87 SAIF
FBER 1st Bergen Bancorp NASDAQ Wood-Ridge NJ 4 04/01/96 SAIF
FBHC Fort Bend Holding Corp. NASDAQ Rosenberg TX 6 06/30/93 SAIF
FBNW FirstBank Corp. NASDAQ Lewiston ID 6 07/02/97 SAIF
FBSI First Bancshares Inc. NASDAQ Mountain Grove MO 8 12/22/93 SAIF
FCB Falmouth Bancorp Inc. AMSE Falmouth MA 3 03/28/96 BIF
FCBF FCB Financial Corp. NASDAQ Oshkosh WI 13 09/24/93 SAIF
FCBH Virginia Beach Fed. Financial NASDAQ Virginia Beach VA 14 11/01/80 SAIF
FCBK First Coastal Bankshares NASDAQ Virginia Beach VA 17 11/01/80 SAIF
FCME First Coastal Corp. NASDAQ Westbrook ME 8 NA BIF
FDEF First Defiance Financial NASDAQ Defiance OH 11 10/02/95 SAIF
FDTR Federal Trust Corp. NASDAQ Winter Park FL 1 NA SAIF
FED FirstFed Financial Corp. NYSE Santa Monica CA 24 12/16/83 SAIF
FESX First Essex Bancorp Inc. NASDAQ Andover MA 19 08/04/87 BIF
FFBA First Colorado Bancorp Inc. NASDAQ Lakewood CO 27 01/02/96 SAIF
FFBH First Federal Bancshares of AR NASDAQ Harrison AR 12 05/03/96 SAIF
FFBI First Financial Bancorp Inc. NASDAQ Belvidere IL 2 10/04/93 SAIF
FFBS FFBS BanCorp Inc. NASDAQ Columbus MS 3 07/01/93 SAIF
FFBZ First Federal Bancorp Inc. NASDAQ Zanesville OH 6 07/13/92 SAIF
FFCH First Financial Holdings Inc. NASDAQ Charleston SC 36 11/10/83 SAIF
FFDB FirstFed Bancorp Inc. NASDAQ Bessemer AL 8 11/19/91 SAIF
FFDF FFD Financial Corp. NASDAQ Dover OH 1 04/03/96 SAIF
FFED Fidelity Federal Bancorp NASDAQ Evansville IN 4 08/31/87 SAIF
FFES First Federal of East Hartford NASDAQ East Hartford CT 11 06/23/87 SAIF
FFFD North Central Bancshares Inc. NASDAQ Fort Dodge IA 7 03/21/96 SAIF
FFFL Fidelity Bankshares Inc.(MHC) NASDAQ West Palm Beach FL 22 01/07/94 SAIF
FFHH FSF Financial Corp. NASDAQ Hutchinson MN 11 10/07/94 SAIF
FFHS First Franklin Corp. NASDAQ Cincinnati OH 7 01/26/88 SAIF
FFIC Flushing Financial Corp. NASDAQ Flushing NY 8 11/21/95 BIF
FFKY First Federal Financial Corp. NASDAQ Elizabethtown KY 11 07/15/87 SAIF
FFLC FFLC Bancorp Inc. NASDAQ Leesburg FL 9 01/04/94 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
------------ -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ------- -------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CMSB Not Avail. 2,368,247 90.96 60.65 66.68 21.99
CMSV Mutual HC 760,610 84.04 64.80 77.11 10.17
CNIT Regular 651,857 104.64 80.13 76.58 14.91
CNSB Regular 97,988 89.11 65.97 74.03 0.60
CNY Regular 427,371 96.00 62.84 65.46 23.77
COFI Regular 19,813,254 122.96 67.69 55.05 35.71
CONE Regular 494,348 28.70 23.21 80.86 2.02
COOP Regular 381,054 102.12 80.05 78.39 13.15
CRSB Not Avail. 202,034 143.25 84.26 58.82 28.43
CRZY Regular 61,478 97.27 48.54 49.91 25.78
CSBF Regular 47,983 75.83 57.68 76.06 0.00
CVAL Regular 377,012 93.11 73.64 79.09 11.05
DCBI Regular 113,585 NA NA 69.86 5.28
DCOM Regular 1,623,926 91.50 58.51 63.94 22.18
DIBK Regular 1,018,779 43.27 36.32 83.93 7.17
DME Regular 20,913,891 113.54 76.18 67.10 23.43
DNFC Regular 1,898,004 119.15 67.81 56.91 34.62
DSL Not Avail. 5,832,102 102.83 91.18 88.67 2.67
EBI Not Avail. 273,361 86.17 37.41 43.41 46.29
EBSI Regular 1,149,483 112.31 76.11 67.77 20.95
EFBC Regular 110,590 69.39 42.17 60.77 0.62
EFBI Regular 365,625 123.89 67.39 54.39 34.39
EFC Regular 448,207 93.55 58.32 62.34 7.59
EGLB Regular 174,085 88.68 67.25 75.84 11.49
EMLD Regular 617,369 92.02 79.24 86.11 4.39
EQSB Supervisory 350,555 NA NA 74.93 19.11
ESBF Regular 956,146 88.15 37.66 42.73 46.51
ESBK Regular 231,725 85.87 78.64 91.57 1.41
ESX Not Avail. 214,391 112.47 86.99 77.34 14.59
ETFS Regular 122,594 70.67 50.54 71.52 10.05
FAB Regular 1,315,743 130.09 68.68 52.80 36.03
FBBC Regular 756,638 120.55 75.56 62.68 23.79
FBCI Regular 501,708 125.04 81.73 65.36 21.89
FBCV Regular 259,562 155.11 73.33 47.28 42.53
FBER Regular 300,755 59.39 44.27 74.54 13.13
FBHC Regular 318,348 67.44 56.69 84.06 4.68
FBNW Regular 194,432 131.63 81.21 61.70 21.71
FBSI Regular 177,946 102.88 81.36 79.09 6.86
FCB Regular 110,523 99.60 71.77 72.06 5.99
FCBF Regular 517,772 122.82 75.55 61.52 21.12
FCBH Not Avail. 625,254 108.17 74.01 68.42 23.41
FCBK Not Avail. 609,753 113.98 76.51 67.13 23.56
FCME Not Avail. 171,719 76.80 62.17 80.95 10.00
FDEF Not Avail. 582,124 115.80 80.47 69.49 11.36
FDTR Not Avail. 147,815 120.53 87.44 72.54 17.29
FED Regular 4,010,381 NA NA 53.34 39.50
FESX Regular 1,316,782 82.80 58.80 71.01 19.99
FFBA Not Avail. 1,546,630 97.10 75.03 77.27 7.21
FFBH Regular 578,142 NA NA 80.00 4.90
FFBI Regular 82,682 81.43 66.52 81.70 8.10
FFBS Regular 134,952 90.62 71.00 78.35 3.41
FFBZ Regular 207,381 127.10 85.71 67.44 24.11
FFCH Regular 1,858,165 131.21 81.02 61.75 29.94
FFDB Regular 181,468 73.33 65.81 89.75 0.00
FFDF Regular 100,104 111.56 67.56 60.56 16.40
FFED Regular 197,436 113.35 84.20 74.29 18.13
FFES Regular 980,415 35.40 21.24 60.01 32.19
FFFD Not Avail. 331,124 102.67 76.40 74.41 9.77
FFFL Mutual HC 1,468,351 90.54 62.46 68.98 21.16
FFHH Regular 414,072 128.35 68.53 53.39 35.56
FFHS Regular 237,679 74.66 64.56 86.46 3.87
FFIC Regular 1,091,908 99.72 61.06 61.23 24.86
FFKY Regular 409,651 116.45 87.19 74.87 10.56
FFLC Regular 412,443 105.71 83.54 79.03 7.27
</TABLE>
<PAGE> 101
Page 3 of 40
SELECTED DATA ON ALL PUBLIC THRIFTS EXHIBIT 7
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio NASDAQ Cincinnati OH 12 03/04/96 SAIF
FFPB First Palm Beach Bancorp Inc. NASDAQ West Palm Beach FL 51 09/29/93 SAIF
FFSL First Independence Corp. NASDAQ Independence KS 2 10/08/93 SAIF
FFSX First Fed SB of Siouxland(MHC) NASDAQ Sioux City IA 15 07/13/92 SAIF
FFWC FFW Corp. NASDAQ Wabash IN 4 04/05/93 SAIF
FFWD Wood Bancorp Inc. NASDAQ Bowling Green OH 7 08/31/93 SAIF
FFYF FFY Financial Corp. NASDAQ Youngstown OH 10 06/28/93 SAIF
FGHC First Georgia Holding Inc. NASDAQ Brunswick GA 7 02/11/87 SAIF
FIBC Financial Bancorp Inc. NASDAQ Long Island City NY 5 08/17/94 SAIF
FISB First Indiana Corp. NASDAQ Indianapolis IN 26 08/02/83 SAIF
FKAN First Kansas Financial Corp. NASDAQ Osawatomie KS 6 06/29/98 SAIF
FKFS First Keystone Financial NASDAQ Media PA 6 01/26/95 SAIF
FKKY Frankfort First Bancorp Inc. NASDAQ Frankfort KY 3 07/10/95 SAIF
FLAG FLAG Financial Corp. NASDAQ LaGrange GA 16 12/11/86 SAIF
FLFC First Liberty Financial Corp. NASDAQ Macon GA 36 12/06/83 SAIF
FLGS Flagstar Bancorp Inc. NASDAQ Bloomfield Hills MI 24 NA SAIF
FLKY First Lancaster Bancshares NASDAQ Lancaster KY 1 07/01/96 SAIF
FMBD First Mutual Bancorp Inc. NASDAQ Decatur IL 14 07/05/95 SAIF
FMCO FMS Financial Corp. NASDAQ Burlington NJ 21 12/14/88 SAIF
FMSB First Mutual Savings Bank NASDAQ Bellevue WA 9 12/17/85 BIF
FNGB First Northern Capital Corp. NASDAQ Green Bay WI 19 12/29/83 SAIF
FOBC Fed One Bancorp NASDAQ Wheeling WV 12 01/19/95 SAIF
FPRY First Financial Bancorp NASDAQ Tallahassee FL 6 03/29/88 SAIF
FSBI Fidelity Bancorp Inc. NASDAQ Pittsburgh PA 8 06/24/88 SAIF
FSFF First SecurityFed Financial NASDAQ Chicago IL 5 10/31/97 SAIF
FSLA First Source Bancorp Inc. NASDAQ Woodbridge NJ 16 04/09/98 SAIF
FSNJ Bayonne Bancshares Inc. NASDAQ Bayonne NJ 4 08/22/97 SAIF
FSPT FirstSpartan Financial Corp. NASDAQ Spartanburg SC 8 07/09/97 SAIF
FSSB First FS&LA of San Bernardino NASDAQ San Bernardino CA 4 02/02/93 SAIF
FSTC First Citizens Corp. NASDAQ Newnan GA 9 03/01/86 SAIF
FTF Texarkana First Financial Corp AMSE Texarkana AR 5 07/07/95 SAIF
FTFC First Federal Capital Corp. NASDAQ La Crosse WI 56 11/02/89 SAIF
FTNB Fulton Bancorp Inc. NASDAQ Fulton MO 2 10/18/96 SAIF
FTSB Fort Thomas Financial Corp. NASDAQ Fort Thomas KY 2 06/28/95 SAIF
FWWB First Washington Bancorp Inc. NASDAQ Walla Walla WA 25 11/01/95 SAIF
GAF GA Financial Inc. AMSE Pittsburgh PA 13 03/26/96 SAIF
GBNK Gaston Federal Bancorp (MHC) NASDAQ Gastonia NC 4 04/13/98 SAIF
GDW Golden West Financial NYSE Oakland CA 253 05/29/59 SAIF
GFCO Glenway Financial Corp. NASDAQ Cincinnati OH 5 11/30/90 SAIF
GFED Guaranty Federal Bcshs Inc. NASDAQ Springfield MO 5 12/31/97 SAIF
GLMR Gilmer Financial Svcs, Inc. NASDAQ Gilmer TX 1 02/09/95 SAIF
GOSB GSB Financial Corp. NASDAQ Goshen NY 2 07/09/97 BIF
GPT GreenPoint Financial Corp. NYSE New York NY 73 01/28/94 BIF
GSB Golden State Bancorp Inc. NYSE Glendale CA 214 10/01/83 SAIF
GSFC Green Street Financial Corp. NASDAQ Fayetteville NC 3 04/04/96 SAIF
GSLA GS Financial Corp. NASDAQ Metairie LA 3 04/01/97 SAIF
GTPS Great American Bancorp NASDAQ Champaign IL 3 06/30/95 SAIF
GUPB GFSB Bancorp Inc. NASDAQ Gallup NM 1 06/30/95 SAIF
HALL Hallmark Capital Corp. NASDAQ West Allis WI 3 01/03/94 SAIF
HARB Harbor Florida Bancshares Inc. NASDAQ Fort Pierce FL 25 03/19/98 SAIF
HARL Harleysville Savings Bank NASDAQ Harleysville PA 4 08/04/87 SAIF
HARS Harris Financial Inc. (MHC) NASDAQ Harrisburg PA 34 01/25/94 SAIF
HAVN Haven Bancorp Inc. NASDAQ Westbury NY 53 09/23/93 SAIF
HBBI Home Building Bancorp NASDAQ Washington IN 2 02/08/95 SAIF
HBEI Home Bancorp of Elgin Inc. NASDAQ Elgin IL 5 09/27/96 SAIF
HBFW Home Bancorp NASDAQ Fort Wayne IN 9 03/30/95 SAIF
HBNK Highland Bancorp Inc. NASDAQ Burbank CA 7 NA SAIF
HBS Haywood Bancshares Inc. AMSE Waynesville NC 4 12/18/87 SAIF
HBSC Heritage Bancorp Inc. NASDAQ Laurens SC 4 04/06/98 SAIF
HCBB HCB Bancshares Inc. NASDAQ Camden AR 6 05/07/97 SAIF
HCBC High Country Bancorp Inc. NASDAQ Salida CO 3 12/10/97 SAIF
HCFC Home City Financial Corp. NASDAQ Springfield OH 1 12/30/96 SAIF
HEMT HF Bancorp Inc. NASDAQ Hemet CA 19 06/30/95 SAIF
HFBC HopFed Bancorp Inc. NASDAQ Hopkinsville KY 5 02/09/98 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
------------ -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ------- ------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FFOH Not Avail. 531,926 NA NA 78.66 8.24
FFPB Regular 1,764,026 81.92 60.34 73.66 17.28
FFSL Regular 123,366 112.23 73.98 65.92 23.02
FFSX Mutual HC 551,593 103.82 73.86 71.14 19.56
FFWC Regular 203,311 NA NA 61.61 27.79
FFWD Regular 165,007 106.25 83.16 78.27 7.82
FFYF Regular 651,746 109.28 74.45 68.13 15.09
FGHC Regular 180,806 102.71 86.35 84.07 6.14
FIBC Regular 340,999 NA NA 67.16 22.87
FISB Regular 1,750,819 121.14 84.43 69.70 19.96
FKAN Regular 106,001 53.75 41.91 77.97 0.61
FKFS Regular 385,152 83.46 51.47 61.67 26.02
FKKY Regular 134,485 154.39 94.01 60.89 21.01
FLAG Regular 442,879 93.35 71.51 76.60 12.61
FLFC Regular 1,355,001 94.60 68.37 72.27 19.40
FLGS Not Avail. 2,573,280 163.93 87.59 53.43 27.26
FLKY Regular 53,002 194.98 89.82 46.07 25.88
FMBD Regular 379,534 96.85 80.16 82.76 1.32
FMCO Regular 673,699 58.65 45.21 77.07 15.99
FMSB Regular 470,866 99.97 84.78 84.80 6.30
FNGB Regular 690,372 121.05 89.05 73.56 13.92
FOBC Not Avail. 373,837 65.09 45.26 69.53 18.77
FPRY Regular 240,379 88.86 77.63 87.36 5.41
FSBI Regular 402,919 76.48 49.92 65.28 24.29
FSFF Regular 323,279 92.61 60.91 65.78 4.33
FSLA Not Avail. 1,221,038 80.63 53.33 66.14 11.43
FSNJ Not Avail. 700,293 76.13 45.84 60.22 24.93
FSPT Regular 517,433 115.18 82.32 71.47 3.29
FSSB Regular 103,674 75.29 71.56 95.05 0.00
FSTC Regular 379,694 84.59 73.24 86.58 2.44
FTF Regular 189,557 99.72 79.67 79.90 3.75
FTFC Regular 1,584,405 79.48 64.19 80.76 10.50
FTNB Regular 109,622 130.88 83.03 63.44 11.76
FTSB Regular 101,600 122.78 90.38 73.62 9.49
FWWB Regular 1,154,072 129.28 66.27 51.26 33.73
GAF Regular 838,272 68.33 38.71 56.64 27.48
GBNK Mutual HC 202,615 100.46 69.31 68.99 9.13
GDW Not Avail. 39,067,229 111.39 71.26 63.98 26.40
GFCO Regular 300,448 114.40 85.87 75.06 14.21
GFED Not Avail. 260,043 147.83 80.14 54.21 17.34
GLMR Regular 42,171 81.48 56.24 69.02 20.27
GOSB Regular 129,087 NA NA 66.08 7.75
GPT Regular 12,853,902 84.45 71.06 84.14 1.55
GSB Regular 18,116,737 130.22 76.90 59.05 32.31
GSFC Regular 173,265 119.17 75.79 63.60 0.00
GSLA Regular 129,398 95.47 43.02 45.06 11.34
GTPS Regular 148,342 105.30 83.27 79.08 1.35
GUPB Regular 118,175 103.85 59.03 56.84 29.58
HALL Regular 428,237 105.03 66.62 63.43 27.34
HARB Not Avail. 1,318,792 101.39 70.36 69.39 9.48
HARL Regular 395,383 88.86 64.85 72.98 19.32
HARS Mutual HC 2,325,602 83.38 40.91 49.07 41.33
HAVN Regular 2,265,248 87.62 60.45 69.00 22.09
HBBI Regular 42,430 90.16 68.17 75.61 9.43
HBEI Regular 367,656 120.11 87.32 72.70 0.00
HBFW Regular 360,286 104.30 88.7 85.05 1.94
HBNK Not Avail. 573,412 117.04 78.83 67.35 23.28
HBS Not Avail. 152,002 98.62 75.65 76.71 6.91
HBSC Regular 328,319 66.92 59.93 89.55 0.00
HCBB Regular 221,631 76.44 48.63 63.62 18.21
HCBC Regular 92,258 127.00 81.07 63.83 15.67
HCFC Regular 78,042 123.58 90.81 73.48 10.69
HEMT Regular 1,045,837 NA NA 82.87 8.13
HFBC Regular 217,837 67.14 48.25 71.86 0.00
</TABLE>
<PAGE> 102
Page 4 of 40
SELECTED DATA ON ALL PUBLIC THRIFTS EXHIBIT 7
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp NASDAQ Harrodsburg KY 2 10/04/95 SAIF
HFFC HF Financial Corp. NASDAQ Sioux Falls SD 19 04/08/92 SAIF
HFGI Harrington Financial Group NASDAQ Richmond IN 7 NA SAIF
HFNC HFNC Financial Corp. NASDAQ Charlotte NC 9 12/29/95 SAIF
HFSA Hardin Bancorp Inc. NASDAQ Hardin MO 3 09/29/95 SAIF
HFWA Heritage Financial Corp. NASDAQ Olympia WA 10 01/09/98 SAIF
HHFC Harvest Home Financial Corp. NASDAQ Cheviot OH 3 10/10/94 SAIF
HIFS Hingham Instit. for Savings NASDAQ Hingham MA 5 12/20/88 BIF
HLFC Home Loan Financial Corp. NASDAQ Coshocton OH 2 03/26/98 SAIF
HMLK Hemlock Federal Financial Corp NASDAQ Oak Forest IL 3 04/02/97 SAIF
HMNF HMN Financial Inc. NASDAQ Spring Valley MN 10 06/30/94 SAIF
HOMF Home Federal Bancorp NASDAQ Seymour IN 16 01/23/88 SAIF
HPBC Home Port Bancorp Inc. NASDAQ Nantucket MA 2 08/25/88 BIF
HRBF Harbor Federal Bancorp Inc. NASDAQ Baltimore MD 9 08/12/94 SAIF
HRBT Hudson River Bancorp NASDAQ Hudson NY 12 07/01/98 BIF
HRZB Horizon Financial Corp. NASDAQ Bellingham WA 12 08/01/86 BIF
HSTD Homestead Bancorp Inc. NASDAQ Ponchatoula LA 2 07/20/98 SAIF
HTHR Hawthorne Financial Corp. NASDAQ El Segundo CA 6 NA SAIF
HWEN Home Financial Bancorp NASDAQ Spencer IN 1 07/02/96 SAIF
HZFS Horizon Financial Svcs Corp. NASDAQ Oskaloosa IA 3 06/30/94 SAIF
IBSF IBS Financial Corp. NASDAQ Cherry Hill NJ 9 10/13/94 SAIF
ICBC Independence Comm. Bank Corp. NASDAQ Brooklyn NY 33 03/17/98 SAIF
IFSB Independence Federal Svgs Bank NASDAQ Washington DC 2 06/06/85 SAIF
INBI Industrial Bancorp Inc. NASDAQ Bellevue OH 10 08/01/95 SAIF
IPSW Ipswich Savings Bank NASDAQ Ipswich MA 7 05/26/93 BIF
ITLA ITLA Capital Corp. NASDAQ La Jolla CA 6 10/24/95 BIF
IWBK InterWest Bancorp Inc. NASDAQ Oak Harbor WA 51 NA SAIF
JSB JSB Financial Inc. NYSE Lynbrook NY 13 06/27/90 BIF
JSBA Jefferson Savings Bancorp NASDAQ Ballwin MO 31 04/08/93 SAIF
JXSB Jacksonville Savings Bk (MHC) NASDAQ Jacksonville IL 5 04/21/95 SAIF
JXVL Jacksonville Bancorp Inc. NASDAQ Jacksonville TX 7 04/01/96 SAIF
KFBI Klamath First Bancorp NASDAQ Klamath Falls OR 33 10/05/95 SAIF
KNK Kankakee Bancorp Inc. AMSE Kankakee IL 14 01/06/93 SAIF
KSAV KS Bancorp Inc. NASDAQ Kenly NC 5 12/30/93 SAIF
KSBK KSB Bancorp Inc. NASDAQ Kingfield ME 8 06/24/93 BIF
KYF Kentucky First Bancorp Inc. AMSE Cynthiana KY 2 08/29/95 SAIF
LARK Landmark Bancshares Inc. NASDAQ Dodge City KS 5 03/28/94 SAIF
LARL Laurel Capital Group Inc. NASDAQ Allison Park PA 6 02/20/87 SAIF
LFBI Little Falls Bancorp Inc. NASDAQ Little Falls NJ 6 01/05/96 SAIF
LFCO Life Financial Corp. NASDAQ Riverside CA 3 NA SAIF
LFED Leeds Federal Bankshares (MHC) NASDAQ Baltimore MD 1 05/02/94 SAIF
LIBB Liberty Bancorp Inc. (MHC) NASDAQ Avenel NJ 4 07/01/98 SAIF
LISB Long Island Bancorp Inc. NASDAQ Melville NY 35 04/18/94 SAIF
LO Local Financial Corp. AMSE Oklahoma City OK 44 NA SAIF
LOGN Logansport Financial Corp. NASDAQ Logansport IN 1 06/14/95 SAIF
LONF London Financial Corp. NASDAQ London OH 1 04/01/96 SAIF
LSBI LSB Financial Corp. NASDAQ Lafayette IN 4 02/03/95 BIF
LSBX Lawrence Savings Bank NASDAQ North Andover MA 5 05/02/86 BIF
LVSB Lakeview Financial Corp. NASDAQ Paterson NJ 10 12/22/93 SAIF
LXMO Lexington B&L Financial Corp. NASDAQ Lexington MO 4 06/06/96 SAIF
MAFB MAF Bancorp Inc. NASDAQ Clarendon Hills IL 23 01/12/90 SAIF
MARN Marion Capital Holdings NASDAQ Marion IN 4 03/18/93 SAIF
MASB MASSBANK Corp. NASDAQ Reading MA 15 05/28/86 BIF
MBBC Monterey Bay Bancorp Inc. NASDAQ Watsonville CA 8 02/15/95 SAIF
MBLF MBLA Financial Corp. NASDAQ Macon MO 2 06/24/93 SAIF
MBSP Mitchell Bancorp Inc. NASDAQ Spruce Pine NC 1 07/12/96 SAIF
MCBN Mid-Coast Bancorp Inc. NASDAQ Waldoboro ME 2 11/02/89 SAIF
MDBK Medford Bancorp Inc. NASDAQ Medford MA 16 03/18/86 BIF
MECH MECH Financial Inc. NASDAQ Hartford CT 16 06/26/96 BIF
METF Metropolitan Financial Corp. NASDAQ Mayfield Heights OH 16 NA SAIF
MFBC MFB Corp. NASDAQ Mishawaka IN 5 03/25/94 SAIF
MFFC Milton Federal Financial Corp. NASDAQ West Milton OH 3 10/07/94 SAIF
MFLR Mayflower Co-operative Bank NASDAQ Middleboro MA 4 12/23/87 BIF
MFSL Maryland Federal Bancorp NASDAQ Hyattsville MD 28 06/02/87 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
------------ -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ------- ------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HFFB Regular 109,033 106.51 76.71 72.01 0.00
HFFC Regular 570,060 99.31 77.77 78.31 8.88
HFGI Not Avail. 484,397 91.92 33.84 36.81 57.78
HFNC Regular 1,007,913 188.95 80.70 42.71 39.07
HFSA Regular 133,326 83.26 49.34 59.26 29.63
HFWA Not Avail. 322,806 98.12 68.58 69.89 0.00
HHFC Regular 90,881 75.45 49.77 65.96 21.98
HIFS Regular 239,148 107.52 76.60 71.25 18.47
HLFC Regular 81,915 NA NA 59.25 1.22
HMLK Regular 191,023 61.86 43.15 69.76 12.56
HMNF Regular 725,180 100.80 64.93 64.42 24.54
HOMF Regular 719,549 110.11 83.25 75.60 14.24
HPBC Regular 260,456 128.67 85.01 66.07 24.48
HRBF Regular 231,140 85.82 64.20 74.80 10.93
HRBT Regular 671,214 86.39 75.72 87.65 0.30
HRZB Regular 553,063 98.76 80.64 81.65 0.89
HSTD Not Avail. 61,487 77.54 52.19 67.30 22.61
HTHR Not Avail. 1,046,906 113.64 92.15 81.08 13.85
HWEN Regular 42,560 128.63 80.54 62.62 19.27
HZFS Regular 92,710 95.29 60.74 63.74 25.95
IBSF Regular 737,694 43.45 32.97 75.88 5.50
ICBC Regular 4,785,837 NA NA 68.54 8.35
IFSB Regular 274,539 77.40 57.81 74.68 16.17
INBI Regular 382,841 119.70 88.12 73.62 9.66
IPSW Regular 233,662 105.69 79.51 75.23 17.79
ITLA Not Avail. 1,021,343 102.94 85.16 82.72 5.92
IWBK Not Avail. 2,351,248 97.87 61.80 63.15 28.68
JSB Regular 1,563,460 97.05 69.63 71.74 0.00
JSBA Regular 1,241,864 86.34 72.58 84.06 5.07
JXSB Mutual HC 169,648 86.98 76.30 87.73 0.13
JXVL Not Avail. 242,673 NA NA 81.96 1.67
KFBI Regular 1,008,688 94.57 63.69 67.34 17.25
KNK Regular 401,934 74.12 62.25 83.99 5.70
KSAV Regular 113,978 105.55 83.64 79.24 7.02
KSBK Regular 157,745 104.16 80.90 77.66 12.79
KYF Regular 81,800 88.31 60.69 68.73 13.16
LARK Regular 229,337 116.11 74.99 64.59 20.58
LARL Regular 220,986 88.15 69.96 79.37 7.71
LFBI Regular 355,443 64.00 42.10 65.79 23.60
LFCO Not Avail. 472,437 138.82 77.31 55.69 24.67
LFED Mutual HC 298,997 77.54 62.97 81.21 0.19
LIBB Mutual HC 217,437 77.09 70.33 91.23 0.76
LISB Regular 6,483,887 102.50 58.14 56.73 31.50
LO Not Avail. 1,904,315 73.35 59.84 81.58 11.38
LOGN Regular 90,264 104.46 74.55 71.36 8.81
LONF Regular 37,916 94.91 76.78 80.90 4.48
LSBI Regular 218,633 NA NA 67.44 23.63
LSBX Regular 344,874 71.13 53.05 74.59 12.11
LVSB Regular 619,638 62.43 45.59 73.02 14.64
LXMO Regular 95,301 82.15 66.16 80.54 2.66
MAFB Regular 3,569,656 120.69 79.57 65.93 24.45
MARN Regular 193,963 123.92 85.87 69.30 7.05
MASB Regular 929,672 35.60 30.97 86.99 0.08
MBBC Regular 436,193 68.50 57.31 83.67 4.88
MBLF Regular 207,453 117.52 64.43 54.83 31.19
MBSP Regular 37,306 128.48 74.27 57.80 0.00
MCBN Regular 63,015 112.71 80.80 71.68 19.34
MDBK Regular 1,135,299 69.42 50.96 73.41 16.66
MECH Regular 954,671 88.34 63.38 71.74 17.44
METF Not Avail. 1,058,887 105.22 80.37 76.38 15.58
MFBC Regular 290,936 136.15 82.18 60.35 27.59
MFFC Regular 235,105 105.10 68.39 65.07 23.11
MFLR Regular 135,518 73.22 57.01 77.86 11.81
MFSL Regular 1,188,121 116.84 81.89 70.09 18.89
</TABLE>
<PAGE> 103
Page 5 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. NASDAQ Newton IA 7 10/14/92 SAIF
MIVI Mississippi View Holding Co. NASDAQ Little Falls MN 1 03/24/95 SAIF
MONT Montgomery Financial Corp. NASDAQ Crawfordsville IN 4 07/01/97 SAIF
MRKF Market Financial Corp. NASDAQ Mount Healthy OH 2 03/27/97 SAIF
MSBF MSB Financial Inc. NASDAQ Marshall MI 2 02/06/95 SAIF
MSBK Mutual Savings Bank FSB NASDAQ Bay City MI 22 07/17/92 SAIF
MWBI Midwest Bancshares Inc. NASDAQ Burlington IA 5 11/12/92 SAIF
MWBX MetroWest Bank NASDAQ Framingham MA 15 10/10/86 BIF
MYST Mystic Financial Inc. NASDAQ Medford MA 3 01/09/98 BIF
NASB NASB Financial Inc. NASDAQ Grandview MO 7 09/27/85 SAIF
NBCP Niagara Bancorp Inc. (MHC) NASDAQ Lockport NY 15 04/20/98 BIF
NBN Northeast Bancorp AMSE Auburn ME 12 08/19/87 BIF
NBSI North Bancshares Inc. NASDAQ Chicago IL 2 12/21/93 SAIF
NEIB Northeast Indiana Bancorp NASDAQ Huntington IN 3 06/28/95 SAIF
NEP Northeast PA Financial Corp. AMSE Hazleton PA 10 04/01/98 SAIF
NHTB New Hampshire Thrift Bncshrs NASDAQ Newport NH 12 05/22/86 SAIF
NMSB NewMil Bancorp Inc. NASDAQ New Milford CT 15 02/01/86 BIF
NSLB NS&L Bancorp Inc. NASDAQ Neosho MO 2 06/08/95 SAIF
NSSY NSS Bancorp Inc. NASDAQ Norwalk CT 8 06/16/94 BIF
NTBK Net.B@nk Inc. NASDAQ Alpharetta GA NA NA SAIF
NTMG Nutmeg Federal S&LA NASDAQ Danbury CT 3 NA SAIF
NWEQ Northwest Equity Corp. NASDAQ Amery WI 3 10/11/94 SAIF
NWSB Northwest Bancorp Inc. (MHC) NASDAQ Warren PA 71 11/07/94 SAIF
OCFC Ocean Financial Corp. NASDAQ Toms River NJ 11 07/03/96 SAIF
OCN Ocwen Financial Corp. NYSE West Palm Beach FL 1 NA SAIF
OFCP Ottawa Financial Corp. NASDAQ Holland MI 26 08/19/94 SAIF
OHSL OHSL Financial Corp. NASDAQ Cincinnati OH 5 02/10/93 SAIF
OSFS Ohio State Financial Services NASDAQ Bridgeport OH 2 09/29/97 SAIF
OTFC Oregon Trail Financial Corp. NASDAQ Baker City OR 7 10/06/97 SAIF
PBCI Pamrapo Bancorp Inc. NASDAQ Bayonne NJ 10 11/14/89 SAIF
PBCT People's Bank (MHC) NASDAQ Bridgeport CT 126 07/06/88 BIF
PBHC Pathfinder Bancorp Inc. (MHC) NASDAQ Oswego NY 5 11/16/95 BIF
PBKB People's Bancshares Inc. NASDAQ New Bedford MA 12 10/30/86 BIF
PBOC PBOC Holdings Inc. NASDAQ Los Angeles CA 19 NA SAIF
PCBC Perry County Financial Corp. NASDAQ Perryville MO 1 02/13/95 SAIF
PDB Piedmont Bancorp Inc. AMSE Hillsborough NC 1 12/08/95 SAIF
PEDE Great Pee Dee Bancorp NASDAQ Cheraw SC 1 12/31/97 SAIF
PEEK Peekskill Financial Corp. NASDAQ Peekskill NY 3 12/29/95 SAIF
PERM Permanent Bancorp Inc. NASDAQ Evansville IN 11 04/04/94 SAIF
PFDC Peoples Bancorp NASDAQ Auburn IN 7 07/07/87 SAIF
PFED Park Bancorp Inc. NASDAQ Chicago IL 3 08/12/96 SAIF
PFFB PFF Bancorp Inc. NASDAQ Pomona CA 24 03/29/96 SAIF
PFFC Peoples Financial Corp. NASDAQ Massillon OH 2 09/13/96 SAIF
PFNC Progress Financial Corp. NASDAQ Blue Bell PA 11 07/18/83 SAIF
PFSB PennFed Financial Services Inc NASDAQ West Orange NJ 18 07/15/94 SAIF
PFSL Pocahontas Bancorp Inc. NASDAQ Pocahontas AR 9 04/01/98 SAIF
PHBK Peoples Heritage Finl Group NASDAQ Portland ME 194 12/04/86 BIF
PHFC Pittsburgh Home Financial Corp NASDAQ Pittsburgh PA 8 04/01/96 SAIF
PHSB Peoples Home Savings Bk (MHC) NASDAQ Beaver Falls PA 9 07/10/97 SAIF
PLSK Pulaski Savings Bank (MHC) NASDAQ Springfield NJ 5 04/03/97 SAIF
PRBC Prestige Bancorp Inc. NASDAQ Pleasant Hills PA 5 06/27/96 SAIF
PROV Provident Financial Holdings NASDAQ Riverside CA 10 06/28/96 SAIF
PSBI PSB Bancorp Inc. NASDAQ Philadelphia PA 6 07/17/98 BIF
PSFC Peoples-Sidney Financial Corp. NASDAQ Sidney OH 1 04/28/97 SAIF
PSFI PS Financial Inc. NASDAQ Chicago IL 1 11/27/96 SAIF
PTRS Potters Financial Corp. NASDAQ East Liverpool OH 4 12/31/93 SAIF
PULB Pulaski Bank, FSB (MHC) NASDAQ St. Louis MO 5 05/11/94 SAIF
PULS Pulse Bancorp NASDAQ South River NJ 5 09/18/86 SAIF
PVFC PVF Capital Corp. NASDAQ Bedford Heights OH 9 12/30/92 SAIF
PVSA Parkvale Financial Corp. NASDAQ Monroeville PA 29 07/16/87 SAIF
PWBK Pennwood Bancorp Inc. NASDAQ Pittsburgh PA 3 07/15/96 SAIF
QCBC Quaker City Bancorp Inc. NASDAQ Whittier CA 10 12/30/93 SAIF
QCFB QCF Bancorp Inc. NASDAQ Virginia MN 2 04/03/95 SAIF
QCSB Queens County Bancorp Inc. NASDAQ Flushing NY 10 11/23/93 BIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
------------ -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ------- ------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MIFC Regular 135,040 NA NA 62.23 26.66
MIVI Regular 68,619 82.66 66.10 79.96 0.00
MONT Not Avail. 109,134 126.15 90.43 71.68 8.31
MRKF Regular 53,653 88.74 61.08 68.83 0.00
MSBF Regular 79,967 172.26 92.23 53.54 27.48
MSBK Regular 613,798 77.57 52.48 67.66 22.74
MWBI Regular 159,460 90.04 59.74 66.35 25.71
MWBX Regular 658,462 83.52 69.92 83.72 7.92
MYST Regular 199,049 95.21 69.24 72.73 8.29
NASB Not Avail. 734,091 121.46 86.66 71.34 19.35
NBCP Mutual HC 1,323,466 57.47 48.89 85.07 2.93
NBN Regular 310,623 155.62 87.16 56.01 35.61
NBSI Regular 123,311 104.11 61.50 59.07 27.65
NEIB Regular 203,263 146.84 88.16 60.04 26.62
NEP Regular 477,807 87.25 58.96 67.57 13.78
NHTB Regular 324,320 92.12 78.33 85.03 5.57
NMSB Regular 367,569 57.12 45.67 79.95 10.20
NSLB Regular 62,648 76.33 58.59 76.76 3.19
NSSY Regular 668,671 94.34 63.89 67.72 23.37
NTBK Not Avail. 163,463 81.80 64.40 78.72 0.00
NTMG Not Avail. 111,539 105.35 85.73 81.38 7.37
NWEQ Regular 96,452 127.99 82.11 64.15 22.93
NWSB Mutual HC 2,547,412 95.80 75.49 78.80 11.37
OCFC Regular 1,538,264 86.90 57.24 65.87 19.50
OCN Not Avail. 3,505,579 NA NA 61.17 19.42
OFCP Regular 915,465 117.20 85.00 72.52 17.42
OHSL Regular 247,853 90.87 68.38 75.26 13.21
OSFS Regular 38,559 89.49 63.95 71.46 0.00
OTFC Regular 256,460 88.06 63.24 71.82 0.00
PBCI Regular 394,271 70.09 57.25 81.69 3.51
PBCT Mutual HC 9,105,200 88.03 64.28 73.02 16.25
PBHC Mutual HC 198,091 83.11 66.04 79.46 7.57
PBKB Regular 858,377 128.31 58.79 45.82 48.07
PBOC Not Avail. 3,201,513 151.98 66.07 43.47 49.30
PCBC Regular 86,081 24.47 17.77 72.63 7.55
PDB Regular 130,541 119.60 82.31 68.82 13.79
PEDE Regular 69,262 149.23 80.89 54.21 0.36
PEEK Regular 200,341 34.54 24.12 69.81 6.49
PERM Regular 439,115 80.34 51.77 64.43 22.63
PFDC Regular 304,320 102.72 84.07 81.84 2.73
PFED Regular 196,812 54.08 38.04 70.33 8.15
PFFB Regular 3,007,845 107.39 62.43 58.13 32.88
PFFC Regular 84,906 NA NA 77.38 3.53
PFNC Regular 602,326 NA NA 60.21 28.27
PFSB Regular 1,551,938 106.86 70.79 66.25 24.10
PFSL Not Avail. 404,606 NA NA 42.36 42.23
PHBK Regular 9,768,079 102.51 71.90 70.14 20.17
PHFC Regular 372,533 140.09 55.83 39.85 48.39
PHSB Mutual HC 226,742 54.99 42.96 78.11 8.32
PLSK Mutual HC 187,776 61.43 53.56 87.18 0.29
PRBC Regular 164,656 112.13 66.47 59.28 29.75
PROV Regular 817,402 119.31 84.97 71.22 16.16
PSBI Not Avail. 148,841 58.87 50.73 86.16 1.83
PSFC Regular 105,522 119.05 88.69 74.50 0.00
PSFI Regular 83,823 101.80 49.93 49.05 21.47
PTRS Regular 128,149 92.33 73.14 79.22 11.36
PULB Mutual HC 186,917 NA NA 83.69 1.02
PULS Regular 544,102 34.20 27.32 79.88 10.97
PVFC Supervisory 418,928 112.23 88.89 79.20 11.44
PVSA Regular 1,095,373 89.10 77.23 86.68 4.12
PWBK Regular 46,080 NA NA 77.59 3.11
QCBC Regular 887,480 121.62 79.61 65.46 24.34
QCFB Regular 154,089 62.51 42.70 68.30 11.59
QCSB Regular 1,715,164 142.00 85.72 60.36 24.72
</TABLE>
<PAGE> 104
Page 6 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. NASDAQ Bridgewater NJ 7 03/01/87 BIF
RCBK Richmond County Financial Corp NASDAQ Staten Island NY 13 02/18/98 SAIF
RELI Reliance Bancshares Inc. NASDAQ Milwaukee WI 1 04/19/96 SAIF
RELY Reliance Bancorp Inc. NASDAQ Garden City NY 30 03/31/94 SAIF
RIVR River Valley Bancorp NASDAQ Madison IN 6 12/20/96 SAIF
ROSE TR Financial Corp. NASDAQ Garden City NY 15 06/29/93 BIF
RSLN Roslyn Bancorp Inc. NASDAQ Roslyn NY 8 01/13/97 BIF
RVSB Riverview Bancorp Inc. NASDAQ Camas WA 9 10/01/97 SAIF
SBAN SouthBanc Shares Inc. NASDAQ Anderson SC 7 04/15/98 SAIF
SBFL SB of the Finger Lakes (MHC) NASDAQ Geneva NY 6 11/11/94 SAIF
SBOS Boston Bancorp (The) NASDAQ South Boston MA 7 11/09/83 BIF
SCBS Southern Community Bancshares NASDAQ Cullman AL 1 12/23/96 SAIF
SCCB S. Carolina Community Bancshrs NASDAQ Winnsboro SC 3 07/07/94 SAIF
SFED SFS Bancorp Inc. NASDAQ Schenectady NY 4 06/30/95 SAIF
SFFC StateFed Financial Corp. NASDAQ Des Moines IA 2 01/05/94 SAIF
SFIN Statewide Financial Corp. NASDAQ Jersey City NJ 16 10/02/95 SAIF
SFSL Security First Corp. NASDAQ Mayfield Heights OH 14 01/22/88 SAIF
SGVB SGV Bancorp Inc. NASDAQ West Covina CA 8 06/29/95 SAIF
SHSB SHS Bancorp Inc. NASDAQ Pittsburgh PA 4 10/01/97 SAIF
SIB Staten Island Bancorp Inc. NYSE Staten Island NY 17 12/22/97 BIF
SISB SIS Bancorp Inc. NASDAQ Springfield MA 33 02/08/95 BIF
SKAN Skaneateles Bancorp Inc. NASDAQ Skaneateles NY 9 06/02/86 BIF
SKBO First Carnegie Deposit (MHC) NASDAQ Carnegie PA 3 04/04/97 SAIF
SMBC Southern Missouri Bancorp Inc. NASDAQ Poplar Bluff MO 8 04/13/94 SAIF
SOBI Sobieski Bancorp Inc. NASDAQ South Bend IN 3 03/31/95 SAIF
SOPN First Savings Bancorp Inc. NASDAQ Southern Pines NC 5 01/06/94 SAIF
SPBC St. Paul Bancorp Inc. NASDAQ Chicago IL 65 05/18/87 SAIF
SRN Southern Banc Co. AMSE Gadsden AL 4 10/05/95 SAIF
SSB Scotland Bancorp Inc. AMSE Laurinburg NC 2 04/01/96 SAIF
SSFC South Street Financial Corp. NASDAQ Albemarle NC 2 10/03/96 SAIF
SSM Stone Street Bancorp Inc. AMSE Mocksville NC 2 04/01/96 SAIF
STFR St. Francis Capital Corp. NASDAQ Brookfield WI 25 06/21/93 SAIF
STSA Sterling Financial Corp. NASDAQ Spokane WA 73 NA SAIF
SVRN Sovereign Bancorp Inc. NASDAQ Wyomissing PA 179 08/12/86 SAIF
SWCB Sandwich Bancorp Inc. NASDAQ Sandwich MA 11 07/25/86 BIF
SZB SouthFirst Bancshares Inc. AMSE Sylacauga AL 4 02/14/95 SAIF
TBFC Telebanc Financial Corp. NASDAQ Arlington VA 1 NA SAIF
THR Three Rivers Financial Corp. AMSE Three Rivers MI 5 08/24/95 SAIF
THRD TF Financial Corp. NASDAQ Newtown PA 14 07/13/94 SAIF
THTL Thistle Group Holdings Co. NASDAQ Philadelphia PA 6 07/14/98 SAIF
TPNZ Tappan Zee Financial Inc. NASDAQ Tarrytown NY 1 10/05/95 SAIF
TRIC Tri-County Bancorp Inc. NASDAQ Torrington WY 2 09/30/93 SAIF
TSBK Timberland Bancorp Inc. NASDAQ Hoquiam WA 8 01/13/98 SAIF
TSBS Peoples Bancorp Inc. NASDAQ Lawrenceville NJ 14 04/09/98 BIF
TSH Teche Holding Co. AMSE Franklin LA 9 04/19/95 SAIF
TWIN Twin City Bancorp NASDAQ Bristol TN 3 01/04/95 SAIF
UBMT United Financial Corp. NASDAQ Great Falls MT 5 NA SAIF
UCBC Union Community Bancorp NASDAQ Crawfordsville IN 1 12/29/97 SAIF
UCFC United Community Finl Corp. NASDAQ Youngstown OH 14 07/09/98 SAIF
UFBS Union Financial Bcshs Inc. NASDAQ Union SC 4 NA SAIF
UFRM United Federal Savings Bank NASDAQ Rocky Mount NC 13 07/01/80 SAIF
UPFC United PanAm Financial Corp. NASDAQ San Mateo CA 5 NA SAIF
USAB USABancshares Inc. NASDAQ Philadelphia PA 3 NA BIF
UTBI United Tennessee Bankshares NASDAQ Newport TN 2 01/05/98 SAIF
WAMU Washington Mutual Inc. NASDAQ Seattle WA 914 03/11/83 BIF
WAYN Wayne Savings Bancshares (MHC) NASDAQ Wooster OH 6 06/25/93 SAIF
WBST Webster Financial Corp. NASDAQ Waterbury CT 142 12/12/86 SAIF
WCBI Westco Bancorp Inc. NASDAQ Westchester IL 1 06/26/92 SAIF
WCFB Webster City Federal SB (MHC) NASDAQ Webster City IA 1 08/15/94 SAIF
WEFC Wells Financial Corp. NASDAQ Wells MN 8 04/11/95 SAIF
WEHO Westwood Homestead Fin. Corp. NASDAQ Cincinnati OH 2 09/30/96 SAIF
WES Westcorp NYSE Irvine CA 26 05/01/86 SAIF
WFI Winton Financial Corp. AMSE Cincinnati OH 5 08/04/88 SAIF
WFSL Washington Federal Inc. NASDAQ Seattle WA 105 11/17/82 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
------------ -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ------- ------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RARB Regular 434,606 86.40 69.77 80.75 10.38
RCBK Regular 1,595,844 68.55 40.84 59.58 19.17
RELI Regular 44,174 156.11 61.73 39.54 9.06
RELY Regular 2,485,729 60.11 39.37 65.51 23.34
RIVR Regular 133,848 96.60 82.00 84.89 0.00
ROSE Regular 4,115,800 106.50 54.81 51.47 39.97
RSLN Regular 3,853,282 60.36 31.87 52.80 29.38
RVSB Regular 268,608 89.96 61.55 68.42 7.28
SBAN Not Avail. 385,361 93.14 51.21 54.98 10.11
SBFL Mutual HC 258,394 71.64 51.99 72.57 17.91
SBOS Regular 1,715,070 24.42 19.25 78.85 7.61
SCBS Regular 72,447 81.68 65.12 79.73 0.00
SCCB Regular 46,305 98.55 77.59 78.73 0.00
SFED Regular 178,093 NA NA 85.84 0.00
SFFC Regular 89,802 NA NA 59.77 21.12
SFIN Regular 670,561 73.54 49.57 67.41 21.77
SFSL Regular 696,462 124.36 91.28 73.40 15.68
SGVB Regular 408,346 100.77 72.87 72.31 18.74
SHSB Regular 88,408 87.12 64.76 74.33 10.35
SIB Regular 3,018,685 76.09 41.71 54.82 20.21
SISB Regular 1,841,662 67.35 48.52 72.05 18.25
SKAN Regular 266,730 95.69 81.08 84.73 6.52
SKBO Mutual HC 148,132 88.61 46.20 52.13 29.42
SMBC Regular 155,924 110.14 77.2 70.1 13.51
SOBI Regular 89,848 118.96 79.74 67.03 17.75
SOPN Regular 304,088 98.47 68.63 69.69 6.58
SPBC Regular 4,564,869 99.82 71.88 72.01 16.85
SRN Regular 105,719 45.92 37.48 81.61 0.00
SSB Regular 61,082 99.10 72.66 73.32 0.00
SSFC Regular 203,673 72.61 52.85 72.79 8.84
SSM Regular 112,253 143.51 87.99 61.31 9.98
STFR Regular 1,754,803 74.08 47.68 64.36 27.19
STSA Not Avail. 2,076,759 84.37 61.72 73.15 18.15
SVRN Regular 18,847,318 111.10 55.07 49.57 42.59
SWCB Regular 531,013 81.08 67.91 83.76 6.33
SZB Regular 162,975 81.25 61.91 76.20 11.32
TBFC Not Avail. 1,209,466 NA NA 55.44 38.91
THR Regular 98,063 104.38 65.17 62.43 22.17
THRD Regular 689,284 53.38 34.74 65.09 25.88
THTL Not Avail. 276,650 42.60 35.50 83.34 2.85
TPNZ Regular 139,690 54.75 41.24 75.33 7.16
TRIC Regular 86,549 89.92 47.37 52.68 29.61
TSBK Regular 263,112 115.11 72.26 62.77 4.43
TSBS Not Avail. 873,466 88.55 50.18 56.66 3.43
TSH Regular 407,265 125.42 85.67 68.30 16.98
TWIN Regular 110,610 92.27 74.56 80.81 4.52
UBMT Not Avail. 197,271 75.23 56.38 74.95 8.28
UCBC Regular 108,088 142.51 81.58 57.25 1.66
UCFC Regular 1,044,993 72.08 61.17 84.86 0.00
UFBS Not Avail. 183,066 115.01 81.67 71.01 20.23
UFRM Regular 301,924 97.11 84.87 87.39 1.82
UPFC Not Avail. 411,798 NA NA 72.93 2.65
USAB Not Avail. 102,535 72.67 58.46 80.44 6.47
UTBI Regular 75,053 89.74 64.19 71.53 0.00
WAMU Regular 103,396,952 140.64 68.64 48.80 43.73
WAYN Mutual HC 259,752 95.85 80.31 83.78 6.16
WBST Regular 9,189,143 86.77 54.16 62.43 27.97
WCBI Regular 320,295 93.83 76.29 81.31 0.00
WCFB Mutual HC 97,096 77.90 57.79 74.19 1.44
WEFC Regular 188,677 NA NA 80.80 2.65
WEHO Regular 126,339 132.76 88.18 66.42 12.47
WES Not Avail. 3,663,771 80.66 43.92 54.44 17.24
WFI Regular 358,573 NA NA 70.81 20.89
WFSL Regular 5,558,970 138.90 75.05 54.03 29.83
</TABLE>
<PAGE> 105
Page 7 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. NASDAQ Lutherville MD 5 04/01/96 SAIF
WOFC Western Ohio Financial Corp. NASDAQ Springfield OH 10 07/29/94 SAIF
WRNB Warren Bancorp Inc. NASDAQ Peabody MA 6 07/09/86 BIF
WSB Washington Savings Bank, FSB AMSE Bowie MD 5 NA SAIF
WSBI Warwick Community Bancorp NASDAQ Warwick NY 4 12/23/97 BIF
WSFS WSFS Financial Corp. NASDAQ Wilmington DE 18 11/26/86 BIF
WSTR WesterFed Financial Corp. NASDAQ Missoula MT 34 01/10/94 SAIF
WVFC WVS Financial Corp. NASDAQ Pittsburgh PA 6 11/29/93 SAIF
WYNE Wayne Bancorp Inc. NASDAQ Wayne NJ 6 06/27/96 SAIF
YFCB Yonkers Financial Corp. NASDAQ Yonkers NY 5 04/18/96 SAIF
YFED York Financial Corp. NASDAQ York PA 22 02/01/84 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
- ---------------------- -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ---------------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WHGB Regular 131,967 85.56 58.25 68.08 15.16
WOFC Regular 357,295 98.32 70.40 71.61 13.47
WRNB Regular 378,137 74.97 65.48 87.35 1.43
WSB Not Avail. 273,549 48.64 43.25 88.93 1.96
WSBI Regular 370,842 87.81 49.27 56.11 16.92
WSFS Regular 1,551,631 96.30 48.80 50.67 41.70
WSTR Regular 1,022,136 104.05 64.79 62.27 24.97
WVFC Regular 297,054 95.19 53.73 56.44 30.21
WYNE Regular 275,335 93.36 70.47 75.48 10.90
YFCB Regular 401,565 89.27 51.64 57.84 31.60
YFED Regular 1,229,268 91.76 79.56 86.70 2.27
- ---------------------- -------------------------------------------------------------------
Average 1,635,507 97.27 66.50 69.70 15.33
</TABLE>
<PAGE> 106
Page 8 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CORPORATE
-----------------------------------------------------------------------
DEPOSIT
NUMBER INSURANCE
OF AGENCY
TICKER SHORT NAME EXCHANGE CITY STATE OFFICES IPO DATE (BIF/SAIF)
- ---------------------------------------- -----------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. NASDAQ Andover MA 12 05/08/86 BIF
EBSI Eagle Bancshares NASDAQ Tucker GA 15 04/01/86 SAIF
FAB FIRSTFED AMERICA BANCORP INC. AMSE Swansea MA 13 01/15/97 SAIF
FNGB First Northern Capital Corp. NASDAQ Green Bay WI 19 12/29/83 SAIF
FWWB First Washington Bancorp Inc. NASDAQ Walla Walla WA 25 11/01/95 SAIF
KFBI Klamath First Bancorp NASDAQ Klamath Falls OR 33 10/05/95 SAIF
MDBK Medford Bancorp Inc. NASDAQ Medford MA 16 03/18/86 BIF
MECH MECH Financial Inc. NASDAQ Hartford CT 16 06/26/96 BIF
WSTR WesterFed Financial Corp. NASDAQ Missoula MT 34 01/10/94 SAIF
YFED York Financial Corp. NASDAQ York PA 22 02/01/84 SAIF
<CAPTION>
KEY FINANCIAL DATA AS OF THE MOST RECENT QUARTER
- ---------------------- -------------------------------------------------------------------
TOTAL LOANS/ LOANS/ DEPOSITS/ BORROWINGS/
CONVERSION ASSETS DEPOSITS ASSETS ASSETS ASSETS
TICKER TYPE ($000) (%) (%) (%) (%)
- ---------------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ANDB Regular 1,392,342 106.47 74.33 69.81 21.15
EBSI Regular 1,149,483 112.31 76.11 67.77 20.95
FAB Regular 1,315,743 130.09 68.68 52.80 36.03
FNGB Regular 690,372 121.05 89.05 73.56 13.92
FWWB Regular 1,154,072 129.28 66.27 51.26 33.73
KFBI Regular 1,008,688 94.57 63.69 67.34 17.25
MDBK Regular 1,135,299 69.42 50.96 73.41 16.66
MECH Regular 954,671 88.34 63.38 71.74 17.44
WSTR Regular 1,022,136 104.05 64.79 62.27 24.97
YFED Regular 1,229,268 91.76 79.56 86.70 2.27
- ---------------------- -------------------------------------------------------------------
Average 1,105,207 104.73 69.68 67.67 20.44
Median 1,142,391 105.26 67.48 68.79 19.20
Maximum 1,392,342 130.09 89.05 86.70 36.03
Minimum 690,372 69.42 50.96 51.26 2.27
COMMUNITY SAVINGS BANKSHARES, INC 765,488 92.30 68.89 75.03 11.95
VARIANCE TO THE COMPARABLE MEDIAN (376,903) (12.96) 1.42 6.24 (7.24)
</TABLE>
<PAGE> 107
Page 9 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank 7.55 5.73 25.58 NA NA NA
%CCMD Chevy Chase Bank, FSB 5.94 4.96 17.27 6.52 7.59 12.18
AABC Access Anytime Bancorp Inc. 7.93 7.93 0.00 7.31 8.37 14.79
ABBK Abington Bancorp Inc. 6.37 5.84 8.84 7.44 6.85 16.05
ABCL Alliance Bancorp 8.73 8.67 0.81 7.21 9.04 14.49
ABCW Anchor BanCorp Wisconsin 6.36 6.27 1.51 5.59 7.41 10.06
AFBC Advance Financial Bancorp 14.09 14.09 0.00 14.20 14.40 21.90
AFED AFSALA Bancorp Inc. 12.13 12.13 0.00 12.14 12.82 30.66
AHCI Ambanc Holding Co. 11.69 11.69 0.00 8.80 12.45 22.06
AHM H.F. Ahmanson & Co. 6.56 5.18 22.16 NA 7.45 NA
ALBC Albion Banc Corp. 8.49 8.49 0.00 NA 8.84 NA
ALBK ALBANK Financial Corp. 9.19 7.41 20.83 NA 9.90 NA
ALLB Alliance Bank (MHC) 10.68 10.68 0.00 10.79 11.16 26.12
AMFC AMB Financial Corp. 12.68 12.68 0.00 9.21 13.09 16.29
ANA Acadiana Bancshares Inc. 14.72 14.72 0.00 NA NA NA
ANDB Andover Bancorp Inc. 8.20 8.20 0.00 8.21 8.94 15.13
ANE Alliance Bncp of New England 7.81 7.65 2.20 7.60 9.01 13.10
ASBI Ameriana Bancorp 11.64 11.45 1.85 9.96 11.94 18.39
ASBP ASB Financial Corp. 15.20 15.20 0.00 12.66 15.90 27.13
ASFC Astoria Financial Corp. 8.14 6.09 26.85 5.39 8.47 14.92
ATSB AmTrust Capital Corp. 10.83 10.73 0.99 10.00 11.55 17.00
AVND Avondale Financial Corp. 8.36 8.36 0.00 7.77 9.42 16.42
BANC BankAtlantic Bancorp Inc. 6.79 5.34 22.63 9.27 7.61 15.18
BCSB BCSB Bankcorp Inc. (MHC) 8.01 8.00 0.12 7.71 8.32 16.58
BDJI First Federal Bancorp. 10.45 10.45 0.00 9.02 10.81 18.17
BFD BostonFed Bancorp Inc. 7.80 7.55 3.49 NA 8.51 NA
BFFC Big Foot Financial Corp. 18.28 18.28 0.00 12.87 18.42 33.62
BFSB Bedford Bancshares Inc. 13.25 13.25 0.00 11.90 13.73 23.82
BKC American Bank of Connecticut 8.65 8.41 3.01 7.55 9.54 13.22
BKCT Bancorp Connecticut Inc. 9.89 9.89 0.00 9.94 11 17.32
BKUNA BankUnited Financial Corp. 4.64 4.08 12.55 9.02 4.78 18.94
BNKU Bank United Corp. 5.11 4.67 9.16 7.06 5.45 10.93
BPLS Bank Plus Corp. 4.32 3.98 8.22 5.34 NA 11.12
BRBI Blue River Bancshares Inc. (44.58) (44.58) NM NA (44.58) NA
BRKL Brookline Bancorp (MHC) 32.99 32.99 0.00 26.20 34.49 NA
BTHL Bethel Bancorp 8.48 7.36 14.28 7.38 9.63 13.39
BVCC Bay View Capital Corp. 6.89 4.58 35.16 NA 7.71 NA
BWFC Bank West Financial Corp. 12.99 12.99 0.00 11.69 13.15 21.10
BYFC Broadway Financial Corp. 10.56 10.56 0.00 8.52 11.40 14.65
BYS Bay State Bancorp 22.28 22.28 0.00 NA 23.15 NA
CAFI Camco Financial Corp. 9.9 9.34 6.17 8.80 10.19 16.25
CASB Cascade Financial Corp. 7.07 7.07 0.00 7.02 8.01 11.35
CASH First Midwest Financial Inc. 10.18 9.19 10.70 NA NA NA
CATB Catskill Financial Corp. 22.04 22.04 0.00 19.61 22.66 57.31
CAVB Cavalry Bancorp Inc. 29.65 29.65 0.00 22.89 30.52 26.06
CBCI Calumet Bancorp Inc. 17.74 17.74 0.00 11.52 18.94 17.81
CBES CBES Bancorp Inc. 13.63 13.63 0.00 NA 14.17 NA
CBK Citizens First Financial Corp. 13.84 13.84 0.00 11.20 14.17 18.10
CBSA Coastal Bancorp Inc. 3.85 3.37 12.88 5.78 4.15 11.89
CCFH CCF Holding Co. 7.28 7.28 0.00 6.52 7.78 10.68
CEBK Central Co-operative Bank 9.78 8.96 9.20 9.78 10.55 15.79
CENB Century Bancorp Inc. 17.75 17.75 0.00 17.75 18.29 44.73
CFB Commercial Federal Corp. 7.26 6.49 11.37 NA 7.94 NA
CFCP Coastal Financial Corp. 5.9 5.90 0.00 6.14 6.79 12.43
CFFC Community Financial Corp. 13.87 13.82 0.42 11.83 14.48 16.67
CFKY Columbia Financial of Kentucky 10.41 10.41 0.00 10.30 10.64 28.00
CFNC Carolina Fincorp Inc. 22.35 22.35 0.00 15.10 22.70 28.63
CFSB CFSB Bancorp Inc. 7.78 7.78 0.00 7.47 8.35 13.13
CFTP Community Federal Bancorp 22.27 22.27 0.00 19.28 22.49 47.25
CIBI Community Investors Bancorp 10.99 10.99 0.00 10.39 11.53 19.86
CITZ CFS Bancorp Inc. 8.80 8.80 0.00 8.46 9.22 23.76
CKFB CKF Bancorp Inc. 21.57 21.57 0.00 17.02 21.78 29.58
CLAS Classic Bancshares Inc. 14.87 13.06 14.00 11.70 15.49 22.30
CMRN Cameron Financial Corp 19.86 19.86 0.00 16.45 20.58 25.41
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB 1.03 377.34 1.76 29.57 3.87 76.88
AABC Access Anytime Bancorp Inc. 0.01 NM 0.08 1.04 0.67 535.05
ABBK Abington Bancorp Inc. 0.22 356.45 0.14 2.14 0.77 353.60
ABCL Alliance Bancorp 0.18 267.02 0.13 1.44 0.47 240.27
ABCW Anchor BanCorp Wisconsin 0.29 448.65 0.58 9.19 1.29 180.99
AFBC Advance Financial Bancorp 0.23 152.94 0.20 1.42 0.35 51.29
AFED AFSALA Bancorp Inc. 0.73 199.30 0.37 3.06 1.46 185.39
AHCI Ambanc Holding Co. 0.93 147.90 0.54 4.63 1.37 122.28
AHM H.F. Ahmanson & Co. 2.12 62.74 1.72 26.18 1.33 52.05
ALBC Albion Banc Corp. 0.61 72.86 0.47 5.56 0.45 72.86
ALBK ALBANK Financial Corp. 0.84 123.05 0.71 7.75 1.04 84.14
ALLB Alliance Bank (MHC) 0.31 278.91 0.99 9.28 0.88 45.21
AMFC AMB Financial Corp. 0.24 214.55 0.19 1.51 0.52 214.55
ANA Acadiana Bancshares Inc. NA NA NA NA NA NA
ANDB Andover Bancorp Inc. 0.49 205.01 0.38 4.62 1.00 195.38
ANE Alliance Bncp of New England 0.28 649.57 0.47 6.05 1.84 229.26
ASBI Ameriana Bancorp 0.54 76.20 0.44 3.80 0.41 64.16
ASBP ASB Financial Corp. 0.08 NM 0.05 0.36 1.03 513.38
ASFC Astoria Financial Corp. 0.65 119.05 0.38 4.62 0.77 72.22
ATSB AmTrust Capital Corp. 2.37 43.83 1.81 16.68 1.04 40.38
AVND Avondale Financial Corp. 2.83 100.05 1.25 14.94 2.83 84.71
BANC BankAtlantic Bancorp Inc. NA NA 0.72 10.54 1.12 100.62
BCSB BCSB Bankcorp Inc. (MHC) 0.53 106.92 NA NA 0.56 NA
BDJI First Federal Bancorp. 0.09 844.23 0.16 1.55 0.78 202.30
BFD BostonFed Bancorp Inc. NA NA NA NA 0.84 NA
BFFC Big Foot Financial Corp. 0.18 150.75 0.09 0.52 0.28 150.75
BFSB Bedford Bancshares Inc. 0.26 232.62 0.21 1.58 0.60 232.62
BKC American Bank of Connecticut 3.24 46.36 2.08 24.04 1.50 42.28
BKCT Bancorp Connecticut Inc. 0.92 227.78 0.61 6.17 2.10 181.32
BKUNA BankUnited Financial Corp. 0.49 39.09 0.44 9.53 0.19 32.93
BNKU Bank United Corp. NA NA NA NA 0.46 NA
BPLS Bank Plus Corp. NA NA 1.75 40.45 NA NA
BRBI Blue River Bancshares Inc. NM NM 0.00 NM 0.00 NM
BRKL Brookline Bancorp (MHC) 0.51 465.41 0.60 1.82 2.37 251.07
BTHL Bethel Bancorp NA NA NA NA 1.48 NA
BVCC Bay View Capital Corp. 0.38 277.50 0.38 5.49 1.05 NA
BWFC Bank West Financial Corp. 0.53 43.14 0.44 3.39 0.23 35.64
BYFC Broadway Financial Corp. 0.98 102.95 1.22 11.54 1.01 69.07
BYS Bay State Bancorp 0.87 122.32 0.71 3.17 1.06 122.32
CAFI Camco Financial Corp. 0.45 77.87 0.50 5.06 0.35 43.07
CASB Cascade Financial Corp. 0.49 215.62 0.54 7.69 1.07 171.37
CASH First Midwest Financial Inc. NA NA NA NA NA NA
CATB Catskill Financial Corp. 0.41 346.31 0.22 1.00 1.43 282.65
CAVB Cavalry Bancorp Inc. 0.07 NM 0.05 0.16 1.26 NM
CBCI Calumet Bancorp Inc. 0.97 159.68 1.21 6.80 1.56 99.71
CBES CBES Bancorp Inc. NA NA NA NA 0.58 NA
CBK Citizens First Financial Corp. 0.45 90.61 0.62 4.47 0.41 47.08
CBSA Coastal Bancorp Inc. 0.86 72.24 0.49 12.63 0.62 NA
CCFH CCF Holding Co. 0.50 137.94 0.36 4.96 0.68 137.94
CEBK Central Co-operative Bank 0.59 173.54 0.44 4.52 1.02 173.54
CENB Century Bancorp Inc. 0.50 164.62 0.37 2.10 0.82 144.73
CFB Commercial Federal Corp. 0.76 116.05 0.78 10.75 0.88 86.50
CFCP Coastal Financial Corp. 0.63 207.48 0.48 8.06 1.31 188.30
CFFC Community Financial Corp. 0.39 175.91 0.51 3.68 0.68 119.08
CFKY Columbia Financial of Kentucky -- NM 0.00 0.00 0.49 NM
CFNC Carolina Fincorp Inc. 0.22 226.37 0.15 0.69 0.49 226.37
CFSB CFSB Bancorp Inc. 0.19 327.74 0.21 2.66 0.64 272.22
CFTP Community Federal Bancorp 0.42 97.46 0.28 1.26 0.41 78.26
CIBI Community Investors Bancorp 0.04 NM 0.05 0.45 0.66 98.23
CITZ CFS Bancorp Inc. 2.00 50.82 0.97 11.03 1.01 42.69
CKFB CKF Bancorp Inc. 0.09 272.00 0.08 0.37 0.24 40.24
CLAS Classic Bancshares Inc. 0.12 764.29 0.28 1.87 0.92 216.16
CMRN Cameron Financial Corp 0.47 184.62 0.40 1.99 0.87 67.46
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
%CAL California Federal Bank 1.93 26.41
%CCMD Chevy Chase Bank, FSB 0.66 11.37
AABC Access Anytime Bancorp Inc. 1.37 16.61
ABBK Abington Bancorp Inc. 0.85 12.78
ABCL Alliance Bancorp 0.75 8.15
ABCW Anchor BanCorp Wisconsin 1.12 16.96
AFBC Advance Financial Bancorp 0.90 5.92
AFED AFSALA Bancorp Inc. 0.76 5.85
AHCI Ambanc Holding Co. 0.51 4.20
AHM H.F. Ahmanson & Co. 0.90 16.24
ALBC Albion Banc Corp. 0.53 6.18
ALBK ALBANK Financial Corp. 1.14 12.62
ALLB Alliance Bank (MHC) 0.76 6.88
AMFC AMB Financial Corp. 0.84 5.93
ANA Acadiana Bancshares Inc. 1.05 6.49
ANDB Andover Bancorp Inc. 1.19 15.04
ANE Alliance Bncp of New England 0.95 12.84
ASBI Ameriana Bancorp 0.96 8.58
ASBP ASB Financial Corp. 0.95 6.12
ASFC Astoria Financial Corp. 0.83 10.04
ATSB AmTrust Capital Corp. 0.41 3.87
AVND Avondale Financial Corp. (0.90) (10.69)
BANC BankAtlantic Bancorp Inc. 0.84 13.98
BCSB BCSB Bankcorp Inc. (MHC) NA NA
BDJI First Federal Bancorp. 0.71 6.67
BFD BostonFed Bancorp Inc. 0.72 8.45
BFFC Big Foot Financial Corp. 0.58 3.30
BFSB Bedford Bancshares Inc. 1.23 8.85
BKC American Bank of Connecticut 1.36 16.14
BKCT Bancorp Connecticut Inc. 1.44 14.00
BKUNA BankUnited Financial Corp. 0.37 6.96
BNKU Bank United Corp. 0.90 17.78
BPLS Bank Plus Corp. 0.18 4.18
BRBI Blue River Bancshares Inc. NA NA
BRKL Brookline Bancorp (MHC) 2.10 8.50
BTHL Bethel Bancorp 0.68 7.97
BVCC Bay View Capital Corp. 0.34 5.05
BWFC Bank West Financial Corp. 0.66 4.69
BYFC Broadway Financial Corp. 0.52 4.80
BYS Bay State Bancorp (0.62) (3.98)
CAFI Camco Financial Corp. 1.25 13.02
CASB Cascade Financial Corp. 0.83 11.99
CASH First Midwest Financial Inc. 0.71 6.60
CATB Catskill Financial Corp. 1.32 5.48
CAVB Cavalry Bancorp Inc. NA NA
CBCI Calumet Bancorp Inc. 1.95 11.77
CBES CBES Bancorp Inc. 0.94 6.09
CBK Citizens First Financial Corp. 0.72 5.15
CBSA Coastal Bancorp Inc. 0.52 14.63
CCFH CCF Holding Co. 0.14 1.73
CEBK Central Co-operative Bank 0.87 8.64
CENB Century Bancorp Inc. 1.32 4.63
CFB Commercial Federal Corp. 0.77 11.41
CFCP Coastal Financial Corp. 1.23 19.93
CFFC Community Financial Corp. 1.03 7.39
CFKY Columbia Financial of Kentucky NA NA
CFNC Carolina Fincorp Inc. 0.93 4.07
CFSB CFSB Bancorp Inc. 1.37 17.50
CFTP Community Federal Bancorp 1.23 4.91
CIBI Community Investors Bancorp 0.95 8.17
CITZ CFS Bancorp Inc. 0.24 2.66
CKFB CKF Bancorp Inc. 1.34 5.97
CLAS Classic Bancshares Inc. 0.74 4.90
CMRN Cameron Financial Corp 1.15 5.45
</TABLE>
<PAGE> 108
Page 10 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 8.43 6.77 21.23 6.02 8.84 12.10
CMSV Community Savings Bnkshrs(MHC) 10.80 10.80 0.00 9.50 11.16 18.26
CNIT CENIT Bancorp Inc. 7.91 7.37 7.42 NA 8.51 NA
CNSB CNS Bancorp Inc. 24.78 24.78 0.00 20.10 25.15 41.29
CNY Carver Bancorp Inc. 8.40 8.14 3.33 NA 9.20 NA
COFI Charter One Financial 7.47 7.06 5.87 6.27 8.03 10.94
CONE Conestoga Bancorp, Inc. 16.18 16.18 0.00 12.17 16.22 27.71
COOP Cooperative Bankshares Inc. 7.95 7.95 0.00 7.93 8.22 14.63
CRSB Crusader Holding Corp. 11.49 10.96 5.25 10.96 11.92 21.34
CRZY Crazy Woman Creek Bancorp 23.43 23.43 0.00 18.95 23.88 46.93
CSBF CSB Financial Group Inc. 23.14 22.12 5.67 22.35 23.52 47.75
CVAL Chester Valley Bancorp Inc. 8.45 8.45 0.00 7.64 9.35 14.18
DCBI Delphos Citizens Bancorp Inc. 24.15 24.15 0.00 NA NA NA
DCOM Dime Community Bancshares Inc. 11.48 10.15 12.89 8.32 12.22 16.58
DIBK Dime Financial Corp. 8.35 8.18 2.23 8.08 9.49 22.37
DME Dime Bancorp Inc. 6.36 5.29 17.72 6.24 6.89 11.33
DNFC D & N Financial Corp. 5.57 5.53 0.80 6.68 6.14 12.00
DSL Downey Financial Corp. 7.87 7.79 1.06 7.05 8.41 13.24
EBI Equality Bancorp Inc. 9.58 9.58 0.00 8.67 9.71 27.63
EBSI Eagle Bancshares 6.50 6.50 0.00 4.59 7.06 8.31
EFBC Empire Federal Bancorp Inc. 36.76 36.76 0.00 24.69 36.94 69.10
EFBI Enterprise Federal Bancorp 9.96 9.73 2.48 6.80 10.15 13.40
EFC EFC Bancorp Inc. 7.33 7.33 0.00 8.41 7.59 15.08
EGLB Eagle BancGroup Inc. 12.05 12.05 0.00 10.07 12.60 17.04
EMLD Emerald Financial Corp. 8.50 8.41 1.16 8.23 8.76 13.21
EQSB Equitable Federal Savings Bank 5.12 5.12 0.00 5.12 NA 11.88
ESBF ESB Financial Corp. 7.01 6.31 10.69 6.70 7.52 17.90
ESBK Elmira Savings Bank (The) 6.27 6.27 0.00 6.28 6.93 10.35
ESX Essex Bancorp Inc. 7.02 6.97 0.85 7.28 7.98 13.39
ETFS East Texas Financial Services 17.28 17.28 0.00 14.90 17.47 39.00
FAB FIRSTFED AMERICA BANCORP INC. 8.86 8.86 0.00 7.46 9.71 16.22
FBBC First Bell Bancorp Inc. 10.16 10.16 0.00 6.69 10.26 22.28
FBCI Fidelity Bancorp Inc. 10.60 10.59 0.14 9.11 10.71 19.37
FBCV 1ST Bancorp 9.02 8.89 1.66 8.50 9.48 15.21
FBER 1st Bergen Bancorp 11.60 11.60 0.00 NA 12.67 NA
FBHC Fort Bend Holding Corp. 7.15 6.79 5.42 7.60 7.66 14.60
FBNW FirstBank Corp. 15.63 15.63 0.00 10.73 16.27 15.81
FBSI First Bancshares Inc. 13.42 12.93 4.24 10.43 13.72 15.86
FCB Falmouth Bancorp Inc. 21.38 21.38 0.00 13.93 21.85 23.99
FCBF FCB Financial Corp. 14.47 14.47 0.00 11.60 15.16 18.88
FCBH Virginia Beach Fed. Financial 7.14 7.14 0.00 6.93 7.83 12.28
FCBK First Coastal Bankshares 7.42 7.42 0.00 NA 8.12 NA
FCME First Coastal Corp. 8.95 8.95 0.00 9.30 10.54 16.51
FDEF First Defiance Financial 17.74 17.74 0.00 14.52 18.24 21.54
FDTR Federal Trust Corp. 8.59 8.59 0.00 7.65 9.36 14.69
FED FirstFed Financial Corp. 5.99 5.96 0.64 6.89 NA 13.62
FESX First Essex Bancorp Inc. 7.12 5.25 27.71 5.03 7.99 10.01
FFBA First Colorado Bancorp Inc. 14.11 13.88 1.85 13.40 14.42 25.61
FFBH First Federal Bancshares of AR 14.71 14.71 0.00 NA NA NA
FFBI First Financial Bancorp Inc. 9.23 9.23 0.00 8.67 9.87 15.38
FFBS FFBS BanCorp Inc. 16.71 16.71 0.00 14.04 17.13 26.11
FFBZ First Federal Bancorp Inc. 7.95 7.95 0.08 7.12 8.97 11.88
FFCH First Financial Holdings Inc. 6.36 6.36 0.00 6.58 7.01 10.93
FFDB FirstFed Bancorp Inc. 9.72 9.02 7.88 9.00 10.33 17.40
FFDF FFD Financial Corp. 22.28 22.28 0.00 15.16 22.55 28.68
FFED Fidelity Federal Bancorp 6.78 6.78 0.00 8.67 9.11 13.26
FFES First Federal of East Hartford 7.20 7.20 0.00 7.25 7.47 24.50
FFFD North Central Bancshares Inc. 14.85 13.13 13.34 NA 15.64 NA
FFFL Fidelity Bankshares Inc. (MHC) 6.15 NA NA 7.60 6.37 15.20
FFHH FSF Financial Corp. 10.44 10.44 0.00 9.00 10.69 16.10
FFHS First Franklin Corp. 9.12 9.09 0.39 6.44 9.57 14.71
FFIC Flushing Financial Corp. 12.80 12.39 3.71 9.53 13.41 20.76
FFKY First Federal Financial Corp. 13.35 12.76 5.09 11.90 13.80 18.50
FFLC FFLC Bancorp Inc. 12.80 12.80 0.00 10.52 13.29 19.68
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 0.60 109.84 0.41 4.86 0.66 97.65
CMSV Community Savings Bnkshrs(MHC) 0.22 252.30 0.26 2.43 0.55 134.87
CNIT CENIT Bancorp Inc. 0.12 638.40 0.17 2.13 0.75 316.10
CNSB CNS Bancorp Inc. 0.03 NM 0.07 0.27 0.57 569.23
CNY Carver Bancorp Inc. NA NA NA NA 1.28 NA
COFI Charter One Financial 0.36 233.08 0.31 4.16 0.84 148.17
CONE Conestoga Bancorp, Inc. 0.23 80.00 0.16 0.99 0.18 26.87
COOP Cooperative Bankshares Inc. -- NM 0.00 0.00 0.34 330.28
CRSB Crusader Holding Corp. 0.75 66.64 0.64 5.52 0.50 44.19
CRZY Crazy Woman Creek Bancorp 0.26 355.84 0.13 0.53 0.92 355.84
CSBF CSB Financial Group Inc. 1.55 42.33 0.90 3.87 0.66 38.40
CVAL Chester Valley Bancorp Inc. 0.45 274.00 0.33 3.91 1.23 274.00
DCBI Delphos Citizens Bancorp Inc. NA NA NA NA NA NA
DCOM Dime Community Bancshares Inc. 0.58 217.37 0.39 3.42 1.27 189.26
DIBK Dime Financial Corp. 0.62 505.11 0.28 3.30 3.15 NA
DME Dime Bancorp Inc. 1.14 60.31 1.03 16.25 0.69 50.85
DNFC D & N Financial Corp. 0.64 131.32 0.50 8.95 0.83 113.36
DSL Downey Financial Corp. 0.76 78.53 0.84 10.62 0.60 65.10
EBI Equality Bancorp Inc. 0.96 38.28 0.36 3.76 0.37 37.97
EBSI Eagle Bancshares 0.91 81.84 0.95 14.58 0.74 59.71
EFBC Empire Federal Bancorp Inc. -- NM 0.00 0.00 0.43 NM
EFBI Enterprise Federal Bancorp 0.02 NM 0.01 0.10 0.29 NM
EFC EFC Bancorp Inc. 0.75 60.52 0.46 6.25 0.45 57.60
EGLB Eagle BancGroup Inc. 0.48 171.12 0.73 6.06 0.82 75.47
EMLD Emerald Financial Corp. 0.25 129.50 0.25 2.95 0.32 86.50
EQSB Equitable Federal Savings Bank NA NA NA NA NA NA
ESBF ESB Financial Corp. 1.53 87.54 0.60 8.61 1.34 83.44
ESBK Elmira Savings Bank (The) 0.79 106.93 0.82 13.09 0.85 81.26
ESX Essex Bancorp Inc. 0.80 137.51 1.26 17.89 1.11 76.64
ETFS East Texas Financial Services 0.48 78.79 0.41 2.37 0.38 46.61
FAB FIRSTFED AMERICA BANCORP INC. 0.37 331.87 0.29 3.26 1.24 293.25
FBBC First Bell Bancorp Inc. 0.06 229.23 0.05 0.51 0.13 191.03
FBCI Fidelity Bancorp Inc. 0.19 70.66 0.24 2.27 0.14 45.86
FBCV 1ST Bancorp 1.56 39.80 1.48 16.39 0.62 27.44
FBER 1st Bergen Bancorp 2.16 111.28 0.96 8.26 2.41 111.28
FBHC Fort Bend Holding Corp. 0.45 199.63 0.27 3.80 0.90 123.80
FBNW FirstBank Corp. 0.02 NM 0.39 2.48 0.78 160.81
FBSI First Bancshares Inc. 0.04 912.28 0.03 0.24 0.36 33.59
FCB Falmouth Bancorp Inc. -- NM 0.00 0.00 0.65 NM
FCBF FCB Financial Corp. 0.31 291.18 0.26 1.79 0.91 266.59
FCBH Virginia Beach Fed. Financial 0.02 NM 0.53 7.36 0.93 51.28
FCBK First Coastal Bankshares NA NA NA NA 0.92 NA
FCME First Coastal Corp. 0.23 NM 0.21 2.37 2.55 650.60
FDEF First Defiance Financial 0.26 236.54 0.29 1.63 0.62 171.18
FDTR Federal Trust Corp. 1.37 64.82 2.23 26.01 0.89 34.72
FED FirstFed Financial Corp. NA NA 0.84 14.02 NA NA
FESX First Essex Bancorp Inc. 0.64 230.83 0.45 6.37 1.48 191.23
FFBA First Colorado Bancorp Inc. 0.25 167.97 0.2 1.40 0.42 158.86
FFBH First Federal Bancshares of AR NA NA NA NA NA NA
FFBI First Financial Bancorp Inc. 1.50 64.36 1.00 10.81 0.97 64.36
FFBS FFBS BanCorp Inc. 0.04 NM 0.03 0.17 0.59 72.88
FFBZ First Federal Bancorp Inc. 0.62 190.00 0.54 6.73 1.19 190.00
FFCH First Financial Holdings Inc. 0.71 113.23 1.25 19.71 0.80 51.68
FFDB FirstFed Bancorp Inc. 1.01 91.63 1.03 10.62 0.93 46.08
FFDF FFD Financial Corp. 0.12 329.27 0.08 0.37 0.40 329.27
FFED Fidelity Federal Bancorp 0.39 713.78 0.33 4.83 2.77 613.16
FFES First Federal of East Hartford 1.36 95.61 0.30 4.18 1.30 84.42
FFFD North Central Bancshares Inc. NA NA NA NA 1.03 NA
FFFL Fidelity Bankshares Inc. (MHC) 0.34 99.40 0.27 4.43 0.34 78.51
FFHH FSF Financial Corp. 0.14 265.99 0.20 1.96 0.37 123.88
FFHS First Franklin Corp. 0.53 130.62 0.34 3.74 0.69 49.39
FFIC Flushing Financial Corp. 0.47 214.34 0.31 2.4 1 198.69
FFKY First Federal Financial Corp. -- NM 0.03 0.25 0.52 84.57
FFLC FFLC Bancorp Inc. 0.25 238.17 0.26 2.00 0.59 192.43
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 0.58 6.23
CMSV Community Savings Bnkshrs(MHC) 0.74 6.54
CNIT CENIT Bancorp Inc. 0.91 12.66
CNSB CNS Bancorp Inc. 0.89 3.62
CNY Carver Bancorp Inc. 0.25 2.99
COFI Charter One Financial 0.89 12.38
CONE Conestoga Bancorp, Inc. 0.66 4.10
COOP Cooperative Bankshares Inc. 0.65 8.36
CRSB Crusader Holding Corp. 2.34 28.61
CRZY Crazy Woman Creek Bancorp 1.22 5.13
CSBF CSB Financial Group Inc. 0.54 2.25
CVAL Chester Valley Bancorp Inc. 1.03 12.31
DCBI Delphos Citizens Bancorp Inc. 1.45 5.56
DCOM Dime Community Bancshares Inc. 0.90 7.06
DIBK Dime Financial Corp. 1.45 17.88
DME Dime Bancorp Inc. 0.83 14.29
DNFC D & N Financial Corp. 0.86 15.71
DSL Downey Financial Corp. 0.97 13.28
EBI Equality Bancorp Inc. 0.59 6.76
EBSI Eagle Bancshares 0.83 10.00
EFBC Empire Federal Bancorp Inc. 1.47 3.98
EFBI Enterprise Federal Bancorp 0.79 7.03
EFC EFC Bancorp Inc. 0.80 8.59
EGLB Eagle BancGroup Inc. 0.35 3.00
EMLD Emerald Financial Corp. 1.14 14.14
EQSB Equitable Federal Savings Bank 0.70 13.60
ESBF ESB Financial Corp. 0.67 8.73
ESBK Elmira Savings Bank (The) 0.47 7.43
ESX Essex Bancorp Inc. (0.24) (3.13)
ETFS East Texas Financial Services 0.53 3.02
FAB FIRSTFED AMERICA BANCORP INC. 0.60 5.47
FBBC First Bell Bancorp Inc. 1.09 10.25
FBCI Fidelity Bancorp Inc. NA NA
FBCV 1ST Bancorp 0.75 8.79
FBER 1st Bergen Bancorp 0.72 5.49
FBHC Fort Bend Holding Corp. 0.66 10.00
FBNW FirstBank Corp. 1.12 7.62
FBSI First Bancshares Inc. 1.12 8.11
FCB Falmouth Bancorp Inc. 1.11 4.72
FCBF FCB Financial Corp. 1.17 8.07
FCBH Virginia Beach Fed. Financial NA NA
FCBK First Coastal Bankshares 0.69 9.79
FCME First Coastal Corp. 0.80 8.23
FDEF First Defiance Financial 0.93 4.96
FDTR Federal Trust Corp. NA NA
FED FirstFed Financial Corp. 0.72 13.22
FESX First Essex Bancorp Inc. 0.85 11.55
FFBA First Colorado Bancorp Inc. 1.30 9.68
FFBH First Federal Bancshares of AR 1.00 6.71
FFBI First Financial Bancorp Inc. 0.14 1.65
FFBS FFBS BanCorp Inc. 1.41 7.42
FFBZ First Federal Bancorp Inc. 0.82 10.73
FFCH First Financial Holdings Inc. 0.89 14.17
FFDB FirstFed Bancorp Inc. 0.92 9.49
FFDF FFD Financial Corp. 1.75 7.27
FFED Fidelity Federal Bancorp (0.34) (5.30)
FFES First Federal of East Hartford 0.59 8.70
FFFD North Central Bancshares Inc. 1.56 8.58
FFFL Fidelity Bankshares Inc. (MHC) 0.65 8.94
FFHH FSF Financial Corp. 0.79 7.31
FFHS First Franklin Corp. 0.81 8.87
FFIC Flushing Financial Corp. 0.93 7.01
FFKY First Federal Financial Corp. 1.60 11.84
FFLC FFLC Bancorp Inc. 1.00 7.62
</TABLE>
<PAGE> 109
Page 11 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 12.41 11.19 11.04 NA NA NA
FFPB First Palm Beach Bancorp Inc. 6.85 6.72 2.06 7.81 7.15 16.38
FFSL First Independence Corp. 9.58 9.58 0.00 8.38 10.11 17.80
FFSX First Fed SB of Siouxland(MHC) 7.62 6.23 19.41 NA 8.09 NA
FFWC FFW Corp. 9.41 8.72 8.00 NA NA NA
FFWD Wood Bancorp Inc. 13.20 13.20 0.00 9.93 13.59 15.62
FFYF FFY Financial Corp. 12.92 12.92 0.00 NA 13.34 NA
FGHC First Georgia Holding Inc. 8.15 7.67 6.42 8.09 8.77 10.03
FIBC Financial Bancorp Inc. 8.43 8.39 0.40 NA NA NA
FISB First Indiana Corp. 9.15 9.06 1.08 7.75 10.55 11.35
FKAN First Kansas Financial Corp. 19.73 19.52 1.29 12.15 19.91 34.99
FKFS First Keystone Financial 6.67 6.67 0.00 8.50 7.13 20.75
FKKY Frankfort First Bancorp Inc. 16.88 16.88 0.00 NA 16.96 NA
FLAG FLAG Financial Corp. 8.71 8.71 0.00 8.03 9.58 12.72
FLFC First Liberty Financial Corp. 7.35 6.77 8.57 6.71 8.30 10.51
FLGS Flagstar Bancorp Inc. 5.55 5.41 2.71 5.81 6.01 11.54
FLKY First Lancaster Bancshares 26.65 26.65 0.00 26.26 26.97 36.82
FMBD First Mutual Bancorp Inc. 14.62 11.76 22.15 19.63 15.01 20.30
FMCO FMS Financial Corp. 6.08 6.04 0.77 6.89 6.56 16.74
FMSB First Mutual Savings Bank 7.23 7.23 0.00 7.30 8.30 NA
FNGB First Northern Capital Corp. 10.89 10.89 0.00 9.64 11.38 15.75
FOBC Fed One Bancorp 11.20 10.82 3.80 10.09 11.61 25.32
FPRY First Financial Bancorp 6.35 6.35 0.00 6.20 7.00 10.80
FSBI Fidelity Bancorp Inc. 6.84 6.84 0.00 9.02 7.36 18.46
FSFF First SecurityFed Financial 28.92 28.86 0.29 20.5 29.51 44.06
FSLA First Source Bancorp Inc. 21.24 20.69 3.23 14.05 21.79 35.17
FSNJ Bayonne Bancshares Inc. 13.70 13.70 0.00 11.42 14.12 25.96
FSPT FirstSpartan Financial Corp. 24.30 24.30 0.00 18.44 24.73 29.92
FSSB First FS&LA of San Bernardino 4.33 4.18 3.63 4.29 5.38 8.52
FSTC First Citizens Corp. 9.98 8.34 17.95 8.43 11.00 12.36
FTF Texarkana First Financial Corp 14.88 14.88 0.00 14.86 15.41 25.64
FTFC First Federal Capital Corp. 7.50 7.17 4.78 NA 7.98 NA
FTNB Fulton Bancorp Inc. 23.37 23.37 0.00 16.60 24.25 29.90
FTSB Fort Thomas Financial Corp. 15.77 15.77 0.00 15.06 16.21 24.13
FWWB First Washington Bancorp Inc. 13.01 12.18 7.33 12.17 13.69 22.64
GAF GA Financial Inc. 12.87 12.77 0.93 12.04 13.05 31.88
GBNK Gaston Federal Bancorp (MHC) 20.29 20.29 0.00 15.59 20.96 30.61
GDW Golden West Financial 7.48 7.48 0.00 NA 8.10 NA
GFCO Glenway Financial Corp. 9.57 9.49 0.91 8.70 9.92 13.40
GFED Guaranty Federal Bcshs Inc. 27.18 27.18 0.00 26.60 28.02 NA
GLMR Gilmer Financial Svcs, Inc. 9.02 9.02 0.00 8.80 9.75 19.20
GOSB GSB Financial Corp. 24.91 24.91 0.00 NA NA NA
GPT GreenPoint Financial Corp. 9.92 5.87 43.43 7.40 10.79 15.97
GSB Golden State Bancorp Inc. 6.84 5.90 14.57 6.02 7.70 11.54
GSFC Green Street Financial Corp. 34.90 34.90 0.00 34.90 35.04 73.71
GSLA GS Financial Corp. 41.62 41.62 0.00 34.17 41.95 79.59
GTPS Great American Bancorp 18.28 18.28 0.00 NA 18.66 NA
GUPB GFSB Bancorp Inc. 12.33 12.33 0.00 9.87 12.65 20.72
HALL Hallmark Capital Corp. 7.76 7.76 0.00 NA 8.30 NA
HARB Harbor Florida Bancshares Inc. 19.61 19.44 1.11 13.73 20.50 28.10
HARL Harleysville Savings Bank 6.41 6.41 0.00 6.41 6.92 14.55
HARS Harris Financial Inc. (MHC) 8.12 7.40 9.62 6.99 8.52 12.99
HAVN Haven Bancorp Inc. 5.21 4.99 4.42 5.66 5.80 12.24
HBBI Home Building Bancorp 14.06 14.06 0.00 10.77 14.26 21.56
HBEI Home Bancorp of Elgin Inc. 26.11 26.11 0.00 20.42 26.42 35.41
HBFW Home Bancorp 11.92 11.92 0.00 9.56 12.31 19.46
HBNK Highland Bancorp Inc. 7.87 7.87 0.00 7.08 9.49 10.91
HBS Haywood Bancshares Inc. 14.85 14.45 3.16 14.22 15.34 28.67
HBSC Heritage Bancorp Inc. 9.42 9.42 0.00 8.87 9.65 21.14
HCBB HCB Bancshares Inc. 17.24 17.08 1.18 13.44 17.91 30.43
HCBC High Country Bancorp Inc. 19.56 19.56 0.00 14.00 20.32 23.33
HCFC Home City Financial Corp. 13.87 13.87 0.00 NA 14.45 NA
HEMT HF Bancorp Inc. 8.01 6.93 14.46 6.29 NA 15.80
HFBC HopFed Bancorp Inc. 26.77 26.77 0.00 17.50 26.89 47.20
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio NA NA NA NA NA NA
FFPB First Palm Beach Bancorp Inc. 0.55 91.52 0.50 7.30 0.50 59.41
FFSL First Independence Corp. 0.62 115.70 0.49 5.10 0.72 95.21
FFSX First Fed SB of Siouxland(MHC) NA NA NA NA 0.64 138.30
FFWC FFW Corp. NA NA NA NA NA NA
FFWD Wood Bancorp Inc. -- NM 0.02 0.14 0.46 110.31
FFYF FFY Financial Corp. NA NA 0.51 3.95 0.56 82.43
FGHC First Georgia Holding Inc. 1.69 42.19 1.65 20.23 0.71 37.32
FIBC Financial Bancorp Inc. NA NA NA NA NA NA
FISB First Indiana Corp. NA NA 1.11 12.12 1.65 NA
FKAN First Kansas Financial Corp. 0.12 351.85 0.05 0.26 0.43 327.59
FKFS First Keystone Financial 1.54 57.73 1.34 20.06 0.89 34.27
FKKY Frankfort First Bancorp Inc. NA NA NA NA 0.08 NA
FLAG FLAG Financial Corp. 1.29 94.82 1.26 14.45 1.22 65.53
FLFC First Liberty Financial Corp. 0.79 175.37 0.82 11.18 1.38 114.75
FLGS Flagstar Bancorp Inc. 1.58 33.61 2.27 40.84 0.53 20.58
FLKY First Lancaster Bancshares 1.28 27.91 1.70 6.37 0.36 18.91
FMBD First Mutual Bancorp Inc. 0.17 281.57 0.15 1.05 0.48 115.88
FMCO FMS Financial Corp. 1.18 90.73 0.70 11.54 1.07 68.77
FMSB First Mutual Savings Bank -- NM 0.05 0.68 1.26 989.94
FNGB First Northern Capital Corp. 0.11 506.35 0.12 1.11 0.54 400.84
FOBC Fed One Bancorp 0.24 379.95 0.11 0.98 0.90 111.72
FPRY First Financial Bancorp NA NA NA NA 0.84 NA
FSBI Fidelity Bancorp Inc. 0.15 704.67 0.08 1.17 1.05 658.57
FSFF First SecurityFed Financial -- NM 0 0.01 0.96 158.47
FSLA First Source Bancorp Inc. 0.39 264.81 0.34 1.58 1.04 159.84
FSNJ Bayonne Bancshares Inc. 0.70 130.81 0.36 2.63 0.92 96.50
FSPT FirstSpartan Financial Corp. 0.42 123.25 0.35 1.43 0.51 111.34
FSSB First FS&LA of San Bernardino 1.43 102.26 2.31 53.29 1.47 45.41
FSTC First Citizens Corp. 1.48 93.86 1.08 10.83 1.39 86.37
FTF Texarkana First Financial Corp -- NM 0.00 0.00 0.67 445.58
FTFC First Federal Capital Corp. 0.18 410.78 0.23 3.02 0.75 212.49
FTNB Fulton Bancorp Inc. 0.62 169.72 0.70 2.99 1.06 126.01
FTSB Fort Thomas Financial Corp. 2.34 20.80 2.12 13.41 0.49 19.86
FWWB First Washington Bancorp Inc. 0.21 498.86 0.21 1.64 1.03 301.38
GAF GA Financial Inc. 0.44 105.26 0.24 1.83 0.46 75.96
GBNK Gaston Federal Bancorp (MHC) 0.55 174.10 0.50 2.49 0.96 132.06
GDW Golden West Financial 1.20 71.52 0.97 12.95 0.86 63.28
GFCO Glenway Financial Corp. 0.20 200.19 0.19 1.98 0.41 184.71
GFED Guaranty Federal Bcshs Inc. 0.30 354.13 0.35 1.28 1.05 241.97
GLMR Gilmer Financial Svcs, Inc. 2.51 51.93 1.65 18.25 1.3 44.52
GOSB GSB Financial Corp. NA NA 0.09 0.36 NA NA
GPT GreenPoint Financial Corp. 3.40 35.79 2.54 25.61 1.22 33.98
GSB Golden State Bancorp Inc. 0.84 133.22 0.86 12.57 1.12 100.48
GSFC Green Street Financial Corp. 0.06 307.23 0.07 0.20 0.19 216.10
GSLA GS Financial Corp. 0.29 264.81 0.13 0.30 0.77 264.81
GTPS Great American Bancorp NA NA NA NA 0.47 484.87
GUPB GFSB Bancorp Inc. 0.61 88.29 0.37 2.98 0.54 86.67
HALL Hallmark Capital Corp. NA NA NA NA 0.82 163.10
HARB Harbor Florida Bancshares Inc. 0.36 356.20 0.43 2.19 1.27 208.24
HARL Harleysville Savings Bank -- NM 0.00 0.02 0.79 NM
HARS Harris Financial Inc. (MHC) 0.83 117.59 0.66 8.10 0.97 60.54
HAVN Haven Bancorp Inc. 0.71 137.04 0.45 8.54 0.97 132.08
HBBI Home Building Bancorp 0.99 29.02 0.67 4.79 0.29 29.02
HBEI Home Bancorp of Elgin Inc. 0.25 137.38 0.28 1.09 0.35 107.27
HBFW Home Bancorp -- NM 0 0 0.43 402.9
HBNK Highland Bancorp Inc. 1.98 103.82 1.84 23.36 2.06 88.38
HBS Haywood Bancshares Inc. 0.49 133.33 0.37 2.50 0.65 131.68
HBSC Heritage Bancorp Inc. 0.66 57.56 0.49 5.16 0.38 46.93
HCBB HCB Bancshares Inc. NA NA NA NA 1.38 NA
HCBC High Country Bancorp Inc. 0.56 167.06 0.45 2.32 0.94 167.06
HCFC Home City Financial Corp. NA NA NA NA 0.63 NA
HEMT HF Bancorp Inc. NA NA NA NA NA NA
HFBC HopFed Bancorp Inc. -- NM 0 0 0.23 107.86
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
FFOH Fidelity Financial of Ohio 0.90 7.20
FFPB First Palm Beach Bancorp Inc. 0.45 6.94
FFSL First Independence Corp. 0.72 7.31
FFSX First Fed SB of Siouxland(MHC) 0.67 8.45
FFWC FFW Corp. 0.99 10.33
FFWD Wood Bancorp Inc. 1.43 11.30
FFYF FFY Financial Corp. 1.24 9.29
FGHC First Georgia Holding Inc. 1.16 14.15
FIBC Financial Bancorp Inc. 0.95 10.50
FISB First Indiana Corp. 1.17 12.23
FKAN First Kansas Financial Corp. NA NA
FKFS First Keystone Financial 0.78 11.30
FKKY Frankfort First Bancorp Inc. 1.19 7.01
FLAG FLAG Financial Corp. 0.91 10.36
FLFC First Liberty Financial Corp. 0.78 10.36
FLGS Flagstar Bancorp Inc. 1.37 23.46
FLKY First Lancaster Bancshares 1.04 3.46
FMBD First Mutual Bancorp Inc. 0.35 2.51
FMCO FMS Financial Corp. 0.85 13.58
FMSB First Mutual Savings Bank 1.07 15.48
FNGB First Northern Capital Corp. 0.98 8.87
FOBC Fed One Bancorp 0.82 7.44
FPRY First Financial Bancorp 0.57 8.95
FSBI Fidelity Bancorp Inc. 0.74 10.89
FSFF First SecurityFed Financial NA NA
FSLA First Source Bancorp Inc. 1.06 8.42
FSNJ Bayonne Bancshares Inc. 0.74 5.12
FSPT FirstSpartan Financial Corp. 1.51 5.92
FSSB First FS&LA of San Bernardino (1.18) (24.70)
FSTC First Citizens Corp. NA NA
FTF Texarkana First Financial Corp 1.74 11.41
FTFC First Federal Capital Corp. 1.21 17.39
FTNB Fulton Bancorp Inc. 1.23 5.03
FTSB Fort Thomas Financial Corp. 1.23 7.72
FWWB First Washington Bancorp Inc. 1.21 8.70
GAF GA Financial Inc. 1.04 7.21
GBNK Gaston Federal Bancorp (MHC) NA NA
GDW Golden West Financial 1.02 14.92
GFCO Glenway Financial Corp. 0.86 9.12
GFED Guaranty Federal Bcshs Inc. 1.25 5.09
GLMR Gilmer Financial Svcs, Inc. 0.06 0.59
GOSB GSB Financial Corp. 0.75 3.05
GPT GreenPoint Financial Corp. 1.11 11.57
GSB Golden State Bancorp Inc. 0.78 11.42
GSFC Green Street Financial Corp. 1.58 4.46
GSLA GS Financial Corp. 1.47 3.37
GTPS Great American Bancorp 0.70 3.60
GUPB GFSB Bancorp Inc. 0.90 6.67
HALL Hallmark Capital Corp. 0.67 8.90
HARB Harbor Florida Bancshares Inc. 1.38 11.30
HARL Harleysville Savings Bank 0.97 14.71
HARS Harris Financial Inc. (MHC) 0.83 10.28
HAVN Haven Bancorp Inc. 0.45 7.84
HBBI Home Building Bancorp 0.75 5.70
HBEI Home Bancorp of Elgin Inc. 0.68 2.57
HBFW Home Bancorp 0.85 6.84
HBNK Highland Bancorp Inc. 1.36 17.66
HBS Haywood Bancshares Inc. 1.45 10.19
HBSC Heritage Bancorp Inc. NA NA
HCBB HCB Bancshares Inc. 0.33 1.86
HCBC High Country Bancorp Inc. 0.38 3.22
HCFC Home City Financial Corp. 1.29 6.94
HEMT HF Bancorp Inc. 0.01 0.13
HFBC HopFed Bancorp Inc. 1.11 7.58
</TABLE>
<PAGE> 110
Page 12 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 26.54 26.54 0.00 22.30 26.90 43.70
HFFC HF Financial Corp. 9.93 9.93 0.00 7.76 11.19 12.78
HFGI Harrington Financial Group 4.68 4.68 0.00 6.88 4.75 21.92
HFNC HFNC Financial Corp. 16.96 16.96 0.00 NA 17.65 NA
HFSA Hardin Bancorp Inc. 10.11 10.11 0.00 8.82 10.30 21.68
HFWA Heritage Financial Corp. 28.80 28.80 0.00 27.74 29.68 46.91
HHFC Harvest Home Financial Corp. 11.34 11.34 0.00 9.90 11.48 24.37
HIFS Hingham Instit. for Savings 9.43 9.43 0.00 9.64 10.12 15.59
HLFC Home Loan Financial Corp. 38.53 38.53 0.00 NA NA NA
HMLK Hemlock Federal Financial Corp 16.19 16.19 0.00 11.57 16.60 33.20
HMNF HMN Financial Inc. 9.76 9.03 8.24 NA 10.16 NA
HOMF Home Federal Bancorp 9.30 9.09 2.53 8.20 9.89 11.81
HPBC Home Port Bancorp Inc. 8.71 8.71 0.00 8.70 9.88 15.74
HRBF Harbor Federal Bancorp Inc. 12.69 12.69 0.00 9.69 12.90 22.07
HRBT Hudson River Bancorp 10.18 10.14 0.43 10.20 11.40 15.70
HRZB Horizon Financial Corp. 15.44 15.44 0.00 15.44 16.15 29.00
HSTD Homestead Bancorp Inc. 9.57 9.57 0.00 9.53 10.00 22.97
HTHR Hawthorne Financial Corp. 4.25 4.25 0.00 7.45 5.60 11.45
HWEN Home Financial Bancorp 17.64 17.64 0.00 15.10 18.39 26.20
HZFS Horizon Financial Svcs Corp. 9.11 9.11 0.00 7.13 9.53 13.25
IBSF IBS Financial Corp. 17.83 17.83 0.00 17.70 17.98 59.30
ICBC Independence Comm. Bank Corp. 20.07 19.16 5.59 NA NA NA
IFSB Independence Federal Svgs Bank 7.21 6.57 9.54 6.30 7.45 16.50
INBI Industrial Bancorp Inc. 15.97 15.97 0.00 10.28 16.45 19.63
IPSW Ipswich Savings Bank 5.58 5.58 0.00 5.50 6.33 11.15
ITLA ITLA Capital Corp. 10.43 NA NA NA 11.93 NA
IWBK InterWest Bancorp Inc. 7.15 6.94 3.07 NA 7.69 NA
JSB JSB Financial Inc. 24.31 24.31 0.00 17.34 24.68 21.56
JSBA Jefferson Savings Bancorp 9.56 7.82 19.79 7.91 10.21 14.95
JXSB Jacksonville Savings Bk (MHC) 10.38 10.38 0.00 10.60 10.84 15.40
JXVL Jacksonville Bancorp Inc. 14.46 14.46 0.00 13.89 NA 26.26
KFBI Klamath First Bancorp 13.98 12.96 8.40 10.92 14.14 21.84
KNK Kankakee Bancorp Inc. 9.76 8.46 14.56 6.99 10.36 13.47
KSAV KS Bancorp Inc. 12.81 12.81 0.02 NA 13.10 12.03
KSBK KSB Bancorp Inc. 7.96 7.06 12.10 NA 8.88 NA
KYF Kentucky First Bancorp Inc. 17.03 17.03 0.00 14.40 17.50 26.10
LARK Landmark Bancshares Inc. 13.07 13.07 0.00 10.12 13.56 20.12
LARL Laurel Capital Group Inc. 10.64 10.64 0.00 NA 11.47 NA
LFBI Little Falls Bancorp Inc. 10.20 9.50 7.63 7.67 10.54 NA
LFCO Life Financial Corp. 12.64 12.64 0.00 6.66 13.00 9.55
LFED Leeds Federal Bankshares (MHC) 16.49 16.49 0.00 16.00 16.67 32.54
LIBB Liberty Bancorp Inc. (MHC) 7.61 7.61 0.00 7.43 7.94 17.69
LISB Long Island Bancorp Inc. 8.91 8.84 0.83 7.40 9.44 15.12
LO Local Financial Corp. 5.40 5.02 7.53 8.13 6.69 15.24
LOGN Logansport Financial Corp. 18.82 18.82 0.00 18.74 19.09 34.80
LONF London Financial Corp. 13.76 13.76 0.00 16.00 14.24 31.48
LSBI LSB Financial Corp. 8.40 8.40 0.00 NA NA NA
LSBX Lawrence Savings Bank 12.07 12.07 0.00 10.50 12.99 18.09
LVSB Lakeview Financial Corp. 9.73 6.85 31.78 4.40 10.4 8.90
LXMO Lexington B&L Financial Corp. 16.06 15.14 6.73 21.90 16.69 42.30
MAFB MAF Bancorp Inc. 7.84 7.06 10.75 6.88 8.28 13.95
MARN Marion Capital Holdings 19.41 19.08 2.13 17.58 20.49 27.13
MASB MASSBANK Corp. 11.76 11.63 1.31 10.63 12.02 34.75
MBBC Monterey Bay Bancorp Inc. 10.76 9.94 8.47 7.94 11.38 15.25
MBLF MBLA Financial Corp. 13.50 13.50 0.00 12.71 13.82 32.18
MBSP Mitchell Bancorp Inc. 39.22 39.22 0.00 NA 39.76 NA
MCBN Mid-Coast Bancorp Inc. 8.48 8.48 0.00 8.15 9.03 14.83
MDBK Medford Bancorp Inc. 8.94 8.52 5.11 8.54 9.55 15.62
MECH MECH Financial Inc. 9.71 9.71 0.00 9.61 11.07 16.65
METF Metropolitan Financial Corp. 3.73 3.47 7.22 6.02 4.35 8.32
MFBC MFB Corp. 11.38 11.38 0.00 10.49 11.52 19.25
MFFC Milton Federal Financial Corp. 11.07 11.07 0.00 9.74 11.35 20.32
MFLR Mayflower Co-operative Bank 9.56 9.44 1.47 9.56 10.42 15.06
MFSL Maryland Federal Bancorp 9.04 8.97 0.86 8.49 9.44 17.04
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp -- NM 0.00 0.00 0.48 66.83
HFFC HF Financial Corp. 0.51 319.81 0.44 4.38 1.62 239.17
HFGI Harrington Financial Group 0.17 126.32 0.18 3.93 0.22 40.45
HFNC HFNC Financial Corp. 0.43 202.45 0.53 3.12 0.86 131.75
HFSA Hardin Bancorp Inc. 0.28 145.30 0.14 1.34 0.40 145.30
HFWA Heritage Financial Corp. 0.13 966.67 0.12 0.40 1.28 761.93
HHFC Harvest Home Financial Corp. 0.47 56.81 0.23 2.07 0.27 56.81
HIFS Hingham Instit. for Savings 0.23 396.87 0.17 1.84 0.90 396.87
HLFC Home Loan Financial Corp. NA NA NA NA NA NA
HMLK Hemlock Federal Financial Corp 0.38 248.40 0.16 1.01 0.94 248.40
HMNF HMN Financial Inc. NA NA NA NA 0.61 449.77
HOMF Home Federal Bancorp 0.67 106.26 0.59 6.32 0.71 100.21
HPBC Home Port Bancorp Inc. -- NM 0.00 0.00 1.38 453.64
HRBF Harbor Federal Bancorp Inc. 0.66 50.26 0.42 3.33 0.33 50.26
HRBT Hudson River Bancorp 3.09 52.38 2.57 25.24 1.62 47.68
HRZB Horizon Financial Corp. 0.03 NM 0.02 0.14 0.88 NM
HSTD Homestead Bancorp Inc. 0.52 158.33 0.27 2.86 0.83 158.33
HTHR Hawthorne Financial Corp. 5.88 24.85 6.04 142.04 1.46 22.28
HWEN Home Financial Bancorp 0.72 129.55 1.10 6.22 0.93 68.52
HZFS Horizon Financial Svcs Corp. 1.49 46.06 0.92 10.11 0.69 45.20
IBSF IBS Financial Corp. 0.32 139.90 0.11 0.59 0.45 139.90
ICBC Independence Comm. Bank Corp. NA NA NA NA NA NA
IFSB Independence Federal Svgs Bank 1.77 22.72 1.4 19.41 0.40 16.50
INBI Industrial Bancorp Inc. 0.26 205.50 0.23 1.47 0.54 159.91
IPSW Ipswich Savings Bank 0.55 171.50 0.80 14.40 0.94 92.60
ITLA ITLA Capital Corp. NA NA NA NA 1.75 NA
IWBK InterWest Bancorp Inc. 0.55 159.53 0.67 9.38 0.88 80.89
JSB JSB Financial Inc. 0.17 324.92 0.14 0.58 0.54 238.05
JSBA Jefferson Savings Bancorp 0.22 408.14 0.66 6.94 0.88 96.80
JXSB Jacksonville Savings Bk (MHC) 0.86 70.52 0.84 8.14 0.61 54.02
JXVL Jacksonville Bancorp Inc. NA NA NA NA NA NA
KFBI Klamath First Bancorp 0.07 356.52 0.05 0.33 0.26 356.52
KNK Kankakee Bancorp Inc. 0.60 161.56 0.71 7.32 0.97 53.91
KSAV KS Bancorp Inc. 0.53 64.74 0.44 3.44 0.34 64.74
KSBK KSB Bancorp Inc. NA NA NA NA 1.14 NA
KYF Kentucky First Bancorp Inc. 0.06 NM 0.04 0.23 0.76 263.19
LARK Landmark Bancshares Inc. 0.03 NM 0.06 0.47 0.66 196.35
LARL Laurel Capital Group Inc. 0.36 330.12 0.32 2.99 1.20 263.07
LFBI Little Falls Bancorp Inc. 0.64 126.6 0.43 4.25 0.81 78.51
LFCO Life Financial Corp. 2.05 22.97 2.02 15.99 0.47 18.00
LFED Leeds Federal Bankshares (MHC) 0.05 560.82 0.03 0.20 0.29 560.82
LIBB Liberty Bancorp Inc. (MHC) 0.59 79.54 0.47 6.15 0.47 69.39
LISB Long Island Bancorp Inc. NA NA NA NA 0.91 NA
LO Local Financial Corp. 0.11 NM 0.10 1.85 2.15 NM
LOGN Logansport Financial Corp. 0.34 103.45 0.26 1.37 0.36 103.45
LONF London Financial Corp. 0.26 238.16 0.20 1.46 0.62 238.16
LSBI LSB Financial Corp. NA NA NA NA NA NA
LSBX Lawrence Savings Bank 0.14 NM 0.24 1.96 1.74 389.46
LVSB Lakeview Financial Corp. 1.51 97.54 0.96 9.82 1.47 70.27
LXMO Lexington B&L Financial Corp. 0.71 133.71 0.47 2.95 0.95 130.50
MAFB MAF Bancorp Inc. 0.39 139.86 0.5 6.43 0.55 81.33
MARN Marion Capital Holdings 1.16 107.69 1.02 5.23 1.25 105.99
MASB MASSBANK Corp. 0.61 137.27 0.20 1.67 0.84 131.93
MBBC Monterey Bay Bancorp Inc. 0.88 121.86 0.55 5.12 1.08 112.07
MBLF MBLA Financial Corp. 0.85 59.37 0.55 4.06 0.50 59.37
MBSP Mitchell Bancorp Inc. 0.83 86.58 1.54 3.94 0.72 34.72
MCBN Mid-Coast Bancorp Inc. 0.44 154.22 0.47 5.52 0.68 95.07
MDBK Medford Bancorp Inc. 0.34 346.52 0.18 2.00 1.19 338.34
MECH MECH Financial Inc. 0.62 345.41 0.46 4.72 2.14 296.39
METF Metropolitan Financial Corp. 1.44 53.11 1.30 34.90 0.77 42.45
MFBC MFB Corp. 0.08 232.04 0.06 0.55 0.18 131.25
MFFC Milton Federal Financial Corp. 0.23 175.00 0.16 1.43 0.40 67.74
MFLR Mayflower Co-operative Bank 1.04 144.38 0.59 6.17 1.49 144.01
MFSL Maryland Federal Bancorp 0.56 86.94 0.58 6.41 0.49 61.91
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 1.36 5.07
HFFC HF Financial Corp. 1.13 11.73
HFGI Harrington Financial Group (0.34) (7.56)
HFNC HFNC Financial Corp. 1.45 8.11
HFSA Hardin Bancorp Inc. 0.70 6.18
HFWA Heritage Financial Corp. NA NA
HHFC Harvest Home Financial Corp. 0.62 5.39
HIFS Hingham Instit. for Savings 1.26 13.06
HLFC Home Loan Financial Corp. 1.29 4.38
HMLK Hemlock Federal Financial Corp 1.00 5.55
HMNF HMN Financial Inc. 0.80 6.34
HOMF Home Federal Bancorp 1.47 16.66
HPBC Home Port Bancorp Inc. 1.45 14.53
HRBF Harbor Federal Bancorp Inc. 0.75 5.86
HRBT Hudson River Bancorp 0.43 4.24
HRZB Horizon Financial Corp. 1.57 10.00
HSTD Homestead Bancorp Inc. 0.57 5.94
HTHR Hawthorne Financial Corp. 1.11 21.01
HWEN Home Financial Bancorp 0.93 5.34
HZFS Horizon Financial Svcs Corp. 0.91 9.15
IBSF IBS Financial Corp. 0.81 4.60
ICBC Independence Comm. Bank Corp. NA NA
IFSB Independence Federal Svgs Bank 0.78 11.10
INBI Industrial Bancorp Inc. 1.47 8.81
IPSW Ipswich Savings Bank 1.19 21.98
ITLA ITLA Capital Corp. 1.44 13.80
IWBK InterWest Bancorp Inc. 0.89 12.98
JSB JSB Financial Inc. 3.00 12.76
JSBA Jefferson Savings Bancorp 0.78 8.67
JXSB Jacksonville Savings Bk (MHC) 0.58 5.61
JXVL Jacksonville Bancorp Inc. 1.33 9.13
KFBI Klamath First Bancorp 0.92 6.11
KNK Kankakee Bancorp Inc. 0.78 7.51
KSAV KS Bancorp Inc. 1.09 8.37
KSBK KSB Bancorp Inc. 1.13 14.97
KYF Kentucky First Bancorp Inc. 1.13 6.74
LARK Landmark Bancshares Inc. 1.06 7.64
LARL Laurel Capital Group Inc. 1.41 13.63
LFBI Little Falls Bancorp Inc. 0.58 4.85
LFCO Life Financial Corp. 3.66 25.64
LFED Leeds Federal Bankshares (MHC) 1.19 7.22
LIBB Liberty Bancorp Inc. (MHC) 0.73 9.95
LISB Long Island Bancorp Inc. 0.91 10.06
LO Local Financial Corp. NA NA
LOGN Logansport Financial Corp. 1.48 7.79
LONF London Financial Corp. 1.08 5.62
LSBI LSB Financial Corp. 0.84 9.91
LSBX Lawrence Savings Bank 2.59 25.22
LVSB Lakeview Financial Corp. 1.71 16.24
LXMO Lexington B&L Financial Corp. 0.78 3.83
MAFB MAF Bancorp Inc. 1.08 14.00
MARN Marion Capital Holdings 1.25 5.94
MASB MASSBANK Corp. 1.16 10.40
MBBC Monterey Bay Bancorp Inc. 0.31 2.80
MBLF MBLA Financial Corp. 0.87 6.79
MBSP Mitchell Bancorp Inc. 1.23 2.99
MCBN Mid-Coast Bancorp Inc. 0.78 9.04
MDBK Medford Bancorp Inc. 1.07 11.84
MECH MECH Financial Inc. 0.97 9.71
METF Metropolitan Financial Corp. 0.71 18.08
MFBC MFB Corp. 0.80 6.44
MFFC Milton Federal Financial Corp. 0.69 5.80
MFLR Mayflower Co-operative Bank 1.15 12.01
MFSL Maryland Federal Bancorp 0.75 8.62
</TABLE>
<PAGE> 111
Page 13 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 9.93 9.92 0.08 NA NA NA
MIVI Mississippi View Holding Co. 18.18 18.18 0.00 16.36 19.44 33.09
MONT Montgomery Financial Corp. 18.26 18.26 0.00 14.10 18.42 21.20
MRKF Market Financial Corp. 29.33 29.33 0.00 25.77 29.43 60.16
MSBF MSB Financial Inc. 16.65 16.65 0.00 12.33 17.14 20.73
MSBK Mutual Savings Bank FSB 5.55 5.55 0.00 5.60 5.84 12.81
MWBI Midwest Bancshares Inc. 7.15 7.15 0.00 6.40 7.44 14.75
MWBX MetroWest Bank 7.34 7.34 0.00 7.59 8.85 11.48
MYST Mystic Financial Inc. 18.15 18.15 0.00 17.93 18.77 37.98
NASB NASB Financial Inc. 8.49 8.26 2.92 8.40 9.35 14.00
NBCP Niagara Bancorp Inc. (MHC) 10.14 10.14 0.00 10.90 10.68 21.06
NBN Northeast Bancorp 7.64 7.05 8.41 7.06 8.62 11.35
NBSI North Bancshares Inc. 10.82 10.82 0.00 9.72 10.99 27.12
NEIB Northeast Indiana Bancorp 13.04 13.04 0.00 NA 13.69 NA
NEP Northeast PA Financial Corp. 17.78 17.78 0.00 12.10 18.20 24.20
NHTB New Hampshire Thrift Bncshrs 8.14 7.19 12.64 6.73 9.09 12.55
NMSB NewMil Bancorp Inc. 9.09 9.09 0.00 9.28 10.45 21.26
NSLB NS&L Bancorp Inc. 18.48 18.37 0.70 14.98 18.56 34.78
NSSY NSS Bancorp Inc. 8.12 7.92 2.66 7.75 8.95 15.80
NTBK Net.B@nk Inc. 20.86 20.86 0.00 14.87 21.14 22.05
NTMG Nutmeg Federal S&LA 8.07 8.07 0.00 8.07 8.54 13.34
NWEQ Northwest Equity Corp. 12.19 12.19 0 9.52 12.68 15.55
NWSB Northwest Bancorp Inc. (MHC) 8.55 7.75 10.13 NA 9.17 NA
OCFC Ocean Financial Corp. 13.71 13.65 0.49 11.66 14.16 26.60
OCN Ocwen Financial Corp. 12.19 11.27 8.51 NA NA NA
OFCP Ottawa Financial Corp. 8.45 7.03 18.03 6.68 8.83 10.79
OHSL OHSL Financial Corp. 10.83 10.83 0.00 8.94 11.05 18.03
OSFS Ohio State Financial Services 27.08 27.08 0.00 27.08 27.45 46.45
OTFC Oregon Trail Financial Corp. 26.50 26.50 0.00 18.69 26.86 36.31
PBCI Pamrapo Bancorp Inc. 12.47 12.42 0.49 11.74 13.06 25.20
PBCT People's Bank (MHC) 9.42 8.22 13.83 8.20 10.52 13.00
PBHC Pathfinder Bancorp Inc. (MHC) 11.89 10.33 14.64 NA 12.30 NA
PBKB People's Bancshares Inc. 3.78 3.63 4.21 NA 4.30 NA
PBOC PBOC Holdings Inc. 5.76 5.76 0.00 6.31 6.33 12.31
PCBC Perry County Financial Corp. 18.94 18.94 0.00 15.60 18.97 67.10
PDB Piedmont Bancorp Inc. 16.55 16.55 0.00 NA 17.28 NA
PEDE Great Pee Dee Bancorp 45.12 45.12 0.00 NA 45.60 NA
PEEK Peekskill Financial Corp. 21.57 21.57 0.00 21.80 21.91 88.60
PERM Permanent Bancorp Inc. 9.72 9.63 1.06 8.76 10.17 21.05
PFDC Peoples Bancorp 14.97 14.97 0.00 12.50 15.27 24.70
PFED Park Bancorp Inc. 20.34 20.34 0.00 12.80 20.59 35.60
PFFB PFF Bancorp Inc. 8.04 7.97 1.04 6.35 8.89 12.82
PFFC Peoples Financial Corp. 17.34 17.34 0.00 NA NA NA
PFNC Progress Financial Corp. 6.92 NA NA NA NA NA
PFSB PennFed Financial Services Inc 6.68 5.86 13.00 7.11 6.86 15.16
PFSL Pocahontas Bancorp Inc. 14.45 14.05 3.19 NA NA NA
PHBK Peoples Heritage Finl Group 7.41 6.24 16.89 7.24 8.31 NA
PHFC Pittsburgh Home Financial Corp 6.93 6.87 1.08 NA 7.36 NA
PHSB Peoples Home Savings Bk (MHC) 12.67 12.67 0.00 12.25 13.23 29.66
PLSK Pulaski Savings Bank (MHC) 11.83 11.83 0.00 11.83 12.35 28.08
PRBC Prestige Bancorp Inc. 9.67 9.67 0.00 7.93 9.95 16.76
PROV Provident Financial Holdings 10.60 10.60 0.00 8.01 11.36 14.06
PSBI PSB Bancorp Inc. 10.36 10.35 0.05 NA 10.59 NA
PSFC Peoples-Sidney Financial Corp. 25.16 25.16 0.00 17.10 25.55 27.40
PSFI PS Financial Inc. 27.82 27.82 0.00 24.80 28.03 61.41
PTRS Potters Financial Corp. 8.53 8.53 0.00 7.82 10.25 16.20
PULB Pulaski Bank, FSB (MHC) 13.37 13.37 0.00 NA NA NA
PULS Pulse Bancorp 8.44 8.44 0.00 7.69 8.80 26.01
PVFC PVF Capital Corp. 7.20 7.20 0.00 7.21 7.86 10.68
PVSA Parkvale Financial Corp. 7.67 7.64 0.46 7.11 8.88 14.27
PWBK Pennwood Bancorp Inc. 17.28 17.28 0.00 17.75 NA 31.90
QCBC Quaker City Bancorp Inc. 8.71 8.71 0.00 7.44 9.60 12.97
QCFB QCF Bancorp Inc. 17.70 17.70 0.00 13.00 18.52 29.46
QCSB Queens County Bancorp Inc. 9.89 9.89 0.00 9.44 10.44 15.30
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. NA NA NA NA NA NA
MIVI Mississippi View Holding Co. 0.65 290.24 0.43 2.38 1.90 225.65
MONT Montgomery Financial Corp. 0.89 20.94 1.02 5.59 0.19 15.75
MRKF Market Financial Corp. -- NM 0.00 0.00 0.16 24.64
MSBF MSB Financial Inc. 0.45 118.48 0.41 2.48 0.53 62.16
MSBK Mutual Savings Bank FSB 0.09 578.88 0.09 1.65 0.54 312.66
MWBI Midwest Bancshares Inc. 0.39 123.45 0.66 9.18 0.48 43.79
MWBX MetroWest Bank 0.36 602.54 0.45 6.12 2.16 236.24
MYST Mystic Financial Inc. 0.11 824.00 0.08 0.42 0.90 824.00
NASB NASB Financial Inc. 2.93 33.69 3.07 36.15 0.99 27.86
NBCP Niagara Bancorp Inc. (MHC) 0.46 239.06 0.25 2.43 1.10 217.16
NBN Northeast Bancorp 1.08 103.83 1.08 14.17 1.12 90.28
NBSI North Bancshares Inc. -- NM 0.00 0.00 0.27 NM
NEIB Northeast Indiana Bancorp NA NA NA NA 0.73 NA
NEP Northeast PA Financial Corp. 0.34 211.95 0.23 1.31 0.72 182.16
NHTB New Hampshire Thrift Bncshrs 1.04 117.19 1.00 12.23 1.21 95.48
NMSB NewMil Bancorp Inc. 0.45 657.56 0.29 3.16 2.98 297.15
NSLB NS&L Bancorp Inc. 0.02 714.29 0.01 0.06 0.14 41.67
NSSY NSS Bancorp Inc. 1.17 111.30 0.78 9.59 1.31 100.49
NTBK Net.B@nk Inc. -- NM 0.00 0.00 0.43 NM
NTMG Nutmeg Federal S&LA 0.21 261.50 0.85 10.50 0.55 34.45
NWEQ Northwest Equity Corp. 1.69 35.2 1.71 14.06 0.6 28.33
NWSB Northwest Bancorp Inc. (MHC) 0.48 169.80 0.5 5.87 0.82 123.26
OCFC Ocean Financial Corp. 0.65 122.84 0.4 2.92 0.80 114.22
OCN Ocwen Financial Corp. NA NA NA NA NA NA
OFCP Ottawa Financial Corp. 0.32 138.14 0.37 4.42 0.44 96.04
OHSL OHSL Financial Corp. 0.01 NM 0.04 0.41 0.32 134.65
OSFS Ohio State Financial Services 0.68 83.93 0.44 1.61 0.57 83.93
OTFC Oregon Trail Financial Corp. 0.20 284.66 0.18 0.66 0.57 206.22
PBCI Pamrapo Bancorp Inc. 1.97 52.22 1.48 11.88 1.03 35.55
PBCT People's Bank (MHC) 1.00 172.09 0.70 7.48 1.72 156.79
PBHC Pathfinder Bancorp Inc. (MHC) 1.09 57.58 1.3 10.92 0.63 32.06
PBKB People's Bancshares Inc. 0.58 151.26 0.35 9.18 0.88 149.48
PBOC PBOC Holdings Inc. 0.93 93.27 0.89 15.53 0.87 64.27
PCBC Perry County Financial Corp. -- NM 0.00 0.00 0.16 NM
PDB Piedmont Bancorp Inc. 0.86 102.48 0.71 4.30 0.89 102.48
PEDE Great Pee Dee Bancorp 0.78 75.69 0.73 1.61 0.59 65.48
PEEK Peekskill Financial Corp. 2.32 60.84 0.61 2.81 1.41 43.03
PERM Permanent Bancorp Inc. 0.40 216.58 0.25 2.56 0.87 180.51
PFDC Peoples Bancorp 0.19 191.29 0.16 1.06 0.36 172.98
PFED Park Bancorp Inc. 0.17 390.63 0.07 0.32 0.67 390.63
PFFB PFF Bancorp Inc. 1.31 103.87 1.06 13.22 1.36 79.87
PFFC Peoples Financial Corp. NA NA NA NA NA NA
PFNC Progress Financial Corp. NA NA NA NA NA NA
PFSB PennFed Financial Services Inc 0.47 53.83 0.44 6.56 0.25 40.82
PFSL Pocahontas Bancorp Inc. NA NA NA NA NA NA
PHBK Peoples Heritage Finl Group NA NA 0.68 9.22 1.25 NA
PHFC Pittsburgh Home Financial Corp 1.71 44.19 1.24 17.89 0.75 33.90
PHSB Peoples Home Savings Bk (MHC) 0.66 199.84 0.28 2.23 1.31 173.78
PLSK Pulaski Savings Bank (MHC) 1.11 87.69 0.63 5.32 0.97 82.57
PRBC Prestige Bancorp Inc. 0.29 140.81 0.35 3.59 0.41 79.16
PROV Provident Financial Holdings NA NA NA NA 0.89 NA
PSBI PSB Bancorp Inc. NA NA NA NA 0.46 NA
PSFC Peoples-Sidney Financial Corp. 0.81 54.15 0.72 2.86 0.44 35.55
PSFI PS Financial Inc. 3.61 11.52 1.80 6.47 0.42 8.79
PTRS Potters Financial Corp. 0.43 541.52 0.32 3.72 2.35 541.52
PULB Pulaski Bank, FSB (MHC) NA NA NA NA NA NA
PULS Pulse Bancorp 0.05 NM 0.26 3.07 1.33 81.09
PVFC PVF Capital Corp. 0.53 140.72 0.68 9.42 0.74 95.38
PVSA Parkvale Financial Corp. 0.28 558.88 0.43 5.62 1.56 279.67
PWBK Pennwood Bancorp Inc. NA NA NA NA NA NA
QCBC Quaker City Bancorp Inc. 1.02 110.93 1.11 12.75 1.13 80.77
QCFB QCF Bancorp Inc. 0.57 336.44 0.35 1.95 1.92 67.47
QCSB Queens County Bancorp Inc. 0.38 168.74 0.39 3.89 0.64 110.42
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 1.02 10.95
MIVI Mississippi View Holding Co. 1.08 6.37
MONT Montgomery Financial Corp. 0.81 4.55
MRKF Market Financial Corp. 1.09 3.15
MSBF MSB Financial Inc. 1.57 9.39
MSBK Mutual Savings Bank FSB (1.26) (22.54)
MWBI Midwest Bancshares Inc. 0.95 13.56
MWBX MetroWest Bank 1.27 17.13
MYST Mystic Financial Inc. 0.90 6.70
NASB NASB Financial Inc. 1.67 21.15
NBCP Niagara Bancorp Inc. (MHC) 0.97 8.92
NBN Northeast Bancorp 0.73 9.36
NBSI North Bancshares Inc. 0.37 2.94
NEIB Northeast Indiana Bancorp 1.18 8.55
NEP Northeast PA Financial Corp. NA NA
NHTB New Hampshire Thrift Bncshrs 0.92 11.74
NMSB NewMil Bancorp Inc. 0.88 9.04
NSLB NS&L Bancorp Inc. 0.69 3.58
NSSY NSS Bancorp Inc. 0.91 11.01
NTBK Net.B@nk Inc. (6.10) (18.83)
NTMG Nutmeg Federal S&LA 0.89 11.08
NWEQ Northwest Equity Corp. 1.22 10.48
NWSB Northwest Bancorp Inc. (MHC) 0.94 10.29
OCFC Ocean Financial Corp. 0.92 6.38
OCN Ocwen Financial Corp. 0.84 6.98
OFCP Ottawa Financial Corp. 0.87 10.09
OHSL OHSL Financial Corp. 0.86 7.94
OSFS Ohio State Financial Services 0.98 6.13
OTFC Oregon Trail Financial Corp. 1.09 4.76
PBCI Pamrapo Bancorp Inc. 1.25 9.69
PBCT People's Bank (MHC) 1.24 13.73
PBHC Pathfinder Bancorp Inc. (MHC) 0.75 6.35
PBKB People's Bancshares Inc. 0.74 17.97
PBOC PBOC Holdings Inc. NA NA
PCBC Perry County Financial Corp. 1.03 5.40
PDB Piedmont Bancorp Inc. 1.27 7.75
PEDE Great Pee Dee Bancorp NA NA
PEEK Peekskill Financial Corp. 0.98 4.02
PERM Permanent Bancorp Inc. 0.62 6.45
PFDC Peoples Bancorp 1.45 9.56
PFED Park Bancorp Inc. 0.92 4.28
PFFB PFF Bancorp Inc. 0.61 6.43
PFFC Peoples Financial Corp. 1.06 5.35
PFNC Progress Financial Corp. 0.84 14.86
PFSB PennFed Financial Services Inc 0.78 10.96
PFSL Pocahontas Bancorp Inc. 0.69 7.30
PHBK Peoples Heritage Finl Group 0.93 12.72
PHFC Pittsburgh Home Financial Corp 0.69 8.03
PHSB Peoples Home Savings Bk (MHC) 0.81 6.20
PLSK Pulaski Savings Bank (MHC) 0.54 4.60
PRBC Prestige Bancorp Inc. 0.47 4.44
PROV Provident Financial Holdings 0.70 5.83
PSBI PSB Bancorp Inc. 0.55 4.82
PSFC Peoples-Sidney Financial Corp. 1.23 5.26
PSFI PS Financial Inc. 1.07 3.15
PTRS Potters Financial Corp. 0.77 8.58
PULB Pulaski Bank, FSB (MHC) 1.08 8.12
PULS Pulse Bancorp 1.04 12.67
PVFC PVF Capital Corp. 1.34 18.69
PVSA Parkvale Financial Corp. 1.08 14.59
PWBK Pennwood Bancorp Inc. 0.59 3.24
QCBC Quaker City Bancorp Inc. 0.78 8.96
QCFB QCF Bancorp Inc. 1.68 9.66
QCSB Queens County Bancorp Inc. 1.51 14.38
</TABLE>
<PAGE> 112
Page 14 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 7.33 7.25 1.17 7.28 8.12 13.40
RCBK Richmond County Financial Corp 20.59 20.53 0.36 NA 21.05 NA
RELI Reliance Bancshares Inc. 49.96 49.96 0.00 46.71 50.33 70.77
RELY Reliance Bancorp Inc. 7.84 5.60 30.24 NA 8.20 NA
RIVR River Valley Bancorp 13.64 13.49 1.31 13.27 14.47 21.21
ROSE TR Financial Corp. 6.23 6.23 0.00 6.14 6.60 17.96
RSLN Roslyn Bancorp Inc. 15.43 15.37 0.45 11.00 16.06 22.84
RVSB Riverview Bancorp Inc. 23.07 22.51 3.1 17.8 23.46 34.13
SBAN SouthBanc Shares Inc. 7.97 7.97 0.00 7.24 8.50 13.03
SBFL SB of the Finger Lakes (MHC) 8.46 8.46 0.00 8.41 8.92 19.12
SBOS Boston Bancorp (The) 12.34 12.34 0.00 10.06 12.45 26.75
SCBS Southern Community Bancshares 15.85 15.85 0.00 NA 16.96 NA
SCCB S. Carolina Community Bancshrs 20.38 20.38 0.00 18.30 21.02 39.80
SFED SFS Bancorp Inc. 12.31 12.31 0.00 NA NA NA
SFFC StateFed Financial Corp. 17.91 17.91 0.00 NA NA NA
SFIN Statewide Financial Corp. 9.83 9.82 0.15 9.24 10.26 23.04
SFSL Security First Corp. 9.90 9.78 1.30 7.64 10.66 10.69
SGVB SGV Bancorp Inc. 7.89 7.81 1.20 6.86 8.24 15.08
SHSB SHS Bancorp Inc. 13.85 13.85 0.00 11.06 14.35 24.53
SIB Staten Island Bancorp Inc. 23.54 23.09 2.49 NA 24.07 NA
SISB SIS Bancorp Inc. 7.14 7.14 0.00 7.23 8.42 12.37
SKAN Skaneateles Bancorp Inc. 6.88 6.73 2.36 6.71 7.87 11.23
SKBO First Carnegie Deposit (MHC) 16.86 16.86 0.00 16.90 17.23 53.90
SMBC Southern Missouri Bancorp Inc. 15.46 15.46 0.00 13.69 16.29 25.6
SOBI Sobieski Bancorp Inc. 14.10 14.10 0.00 10.40 14.32 22.50
SOPN First Savings Bancorp Inc. 22.86 22.86 0.00 22.85 23.06 48.67
SPBC St. Paul Bancorp Inc. 9.60 9.56 0.40 NA 10.34 NA
SRN Southern Banc Co. 17.40 17.29 0.76 14.68 17.47 58.17
SSB Scotland Bancorp Inc. 24.93 24.93 0 NA 25.34 NA
SSFC South Street Financial Corp. 16.93 16.93 0.00 15.82 17.14 43.11
SSM Stone Street Bancorp Inc. 27.33 27.33 0.00 24.03 27.89 40.69
STFR St. Francis Capital Corp. 7.46 6.73 10.53 6.84 7.88 12.21
STSA Sterling Financial Corp. 5.09 2.07 60.62 6.49 5.76 11.17
SVRN Sovereign Bancorp Inc. 5.51 4.88 11.88 NA 6.10 NA
SWCB Sandwich Bancorp Inc. 8.39 8.18 2.78 8.29 9.18 16.46
SZB SouthFirst Bancshares Inc. 9.94 9.72 2.48 9.00 10.40 19.68
TBFC Telebanc Financial Corp. 3.76 3.73 0.68 NA NA NA
THR Three Rivers Financial Corp. 13.52 13.49 0.32 11.63 14.01 22.23
THRD TF Financial Corp. 7.49 6.43 15.15 6.32 7.79 17.00
THTL Thistle Group Holdings Co. 10.29 10.29 0.00 9.50 10.57 28.60
TPNZ Tappan Zee Financial Inc. 15.85 15.85 0.00 NA 16.35 NA
TRIC Tri-County Bancorp Inc. 16.44 16.44 0.00 14.50 16.92 39.20
TSBK Timberland Bancorp Inc. 32.36 32.36 0.00 NA 33.02 NA
TSBS Peoples Bancorp Inc. 39.08 38.36 2.99 NA 39.53 NA
TSH Teche Holding Co. 13.83 13.83 0.00 12.57 14.67 24.06
TWIN Twin City Bancorp 12.67 12.67 0.00 NA 12.77 NA
UBMT United Financial Corp. 15.27 14.84 3.27 NA 15.87 NA
UCBC Union Community Bancorp 40.28 40.28 0.00 NA 40.60 NA
UCFC United Community Finl Corp. 13.53 13.53 0.00 13.47 14.10 28.85
UFBS Union Financial Bcshs Inc. 8.06 NA NA 6.81 8.59 13.11
UFRM United Federal Savings Bank 7.75 7.75 0.00 7.76 8.73 10.85
UPFC United PanAm Financial Corp. 19.93 19.85 0.48 NA NA NA
USAB USABancshares Inc. 12.49 12.43 0.62 12.40 13.07 17.20
UTBI United Tennessee Bankshares 26.98 26.98 0.00 19.74 27.82 44.67
WAMU Washington Mutual Inc. 5.45 5.15 5.85 NA 6.11 NA
WAYN Wayne Savings Bancshares (MHC) 9.40 9.40 0.00 9.13 9.68 17.38
WBST Webster Financial Corp. 5.97 5.11 15.23 6.33 6.58 14.65
WCBI Westco Bancorp Inc. 15.66 15.66 0.00 12.60 15.95 27.2
WCFB Webster City Federal SB (MHC) 23.41 23.41 0.00 23.41 23.81 52.50
WEFC Wells Financial Corp. 15.37 15.37 0.00 NA NA NA
WEHO Westwood Homestead Fin. Corp. 20.59 20.59 0.00 19.72 20.81 36.19
WES Westcorp 9.07 9.05 0.24 NA 10.05 NA
WFI Winton Financial Corp. 7.26 7.15 1.60 NA NA NA
WFSL Washington Federal Inc. 13.90 13.04 7.14 12.18 14.32 22.46
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 0.61 186.77 0.43 5.82 1.14 186.77
RCBK Richmond County Financial Corp 0.85 131.48 0.37 1.78 1.12 124.25
RELI Reliance Bancshares Inc. -- NM 0.00 0.00 0.60 NM
RELY Reliance Bancorp Inc. NA NA NA NA 0.91 NA
RIVR River Valley Bancorp 0.68 147.86 0.62 4.53 1.00 133.21
ROSE TR Financial Corp. 0.81 84.38 0.49 7.89 0.68 70.19
RSLN Roslyn Bancorp Inc. 0.69 291.12 0.23 1.47 2.01 281.89
RVSB Riverview Bancorp Inc. 0.46 138.33 0.28 1.22 0.63 137.6
SBAN SouthBanc Shares Inc. 0.07 NM 0.06 0.77 1.02 853.16
SBFL SB of the Finger Lakes (MHC) 0.52 171.61 0.32 3.84 0.89 141.95
SBOS Boston Bancorp (The) 1.41 42.86 0.65 5.23 0.61 18.09
SCBS Southern Community Bancshares 0.36 469.01 0.24 1.49 1.70 308.46
SCCB S. Carolina Community Bancshrs 1.42 57.34 1.26 6.17 0.82 50.34
SFED SFS Bancorp Inc. NA NA NA NA NA NA
SFFC StateFed Financial Corp. NA NA NA NA NA NA
SFIN Statewide Financial Corp. 0.77 112.89 0.46 4.64 0.87 84.18
SFSL Security First Corp. 0.68 122.38 0.62 6.27 0.83 122.36
SGVB SGV Bancorp Inc. NA NA NA NA 0.48 NA
SHSB SHS Bancorp Inc. 2.12 36.92 1.40 10.11 0.78 36.27
SIB Staten Island Bancorp Inc. NA NA NA NA 1.27 87.17
SISB SIS Bancorp Inc. 0.45 582.54 0.26 3.70 2.63 471.43
SKAN Skaneateles Bancorp Inc. 1.73 70.91 1.74 25.35 1.23 57.15
SKBO First Carnegie Deposit (MHC) 1.00 80.15 0.47 2.79 0.80 47.99
SMBC Southern Missouri Bancorp Inc. 1.11 97 0.97 6.3 1.08 55.77
SOBI Sobieski Bancorp Inc. 0.15 192.31 0.29 2.03 0.28 77.82
SOPN First Savings Bancorp Inc. 0.26 109.36 0.18 0.78 0.29 109.36
SPBC St. Paul Bancorp Inc. NA NA NA NA 1.03 239.56
SRN Southern Banc Co. -- NM 0.00 0.00 0.19 NM
SSB Scotland Bancorp Inc. -- NM 0 0.00 0.57 NM
SSFC South Street Financial Corp. 0.40 100.70 0.23 1.36 0.40 91.68
SSM Stone Street Bancorp Inc. -- NM 0 0.00 0.64 NA
STFR St. Francis Capital Corp. 0.36 243.10 0.18 2.42 0.88 219.19
STSA Sterling Financial Corp. 0.34 319.96 0.52 10.24 1.09 128.59
SVRN Sovereign Bancorp Inc. NA NA NA NA 1.07 NA
SWCB Sandwich Bancorp Inc. 0.44 264.74 0.35 4.14 1.16 220.94
SZB SouthFirst Bancshares Inc. -- NM 0.05 0.52 0.74 29.54
TBFC Telebanc Financial Corp. NA NA NA NA NA NA
THR Three Rivers Financial Corp. 1.41 52.43 0.98 7.28 0.74 48.12
THRD TF Financial Corp. 0.75 115.51 0.31 4.08 0.86 97.87
THTL Thistle Group Holdings Co. 0.73 109.36 0.3 2.92 0.80 94.11
TPNZ Tappan Zee Financial Inc. NA NA NA NA 1.23 NA
TRIC Tri-County Bancorp Inc. -- NM 0.00 0.00 1.01 NM
TSBK Timberland Bancorp Inc. NA NA NA NA 0.91 NA
TSBS Peoples Bancorp Inc. NA NA NA NA 0.9 NA
TSH Teche Holding Co. 0.22 441.09 0.20 1.46 0.98 413.82
TWIN Twin City Bancorp 0.21 63.64 0.37 2.95 0.14 27.12
UBMT United Financial Corp. -- NM 0.45 2.97 1.07 101.19
UCBC Union Community Bancorp NA NA NA NA 0.40 NA
UCFC United Community Finl Corp. 1.59 59.02 0.98 7.21 0.94 58.70
UFBS Union Financial Bcshs Inc. NA NA NA NA 0.66 NA
UFRM United Federal Savings Bank 0.96 120.02 1.01 13.07 1.15 83.92
UPFC United PanAm Financial Corp. NA NA 2.78 13.95 NA NA
USAB USABancshares Inc. 0.34 294.55 0.20 1.58 0.99 265.63
UTBI United Tennessee Bankshares -- NM 0.00 0.00 1.31 142.44
WAMU Washington Mutual Inc. 0.83 116.30 0.74 13.64 0.96 89.05
WAYN Wayne Savings Bancshares (MHC) 0.14 240.33 0.48 5.10 0.35 57.50
WBST Webster Financial Corp. 0.60 190.72 0.41 6.90 1.14 149.68
WCBI Westco Bancorp Inc. 0.58 63.73 0.44 2.82 0.37 63.73
WCFB Webster City Federal SB (MHC) -- NM 0.05 0.22 0.69 534.72
WEFC Wells Financial Corp. NA NA NA NA NA NA
WEHO Westwood Homestead Fin. Corp. 0.09 280.00 0.08 0.38 0.25 119.15
WES Westcorp NA NA NA NA 2.22 168.62
WFI Winton Financial Corp. NA NA NA NA NA NA
WFSL Washington Federal Inc. 0.56 101.13 0.70 5.05 0.57 60.38
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
RARB Raritan Bancorp Inc. 0.98 12.86
RCBK Richmond County Financial Corp 0.36 2.41
RELI Reliance Bancshares Inc. 1.02 2.06
RELY Reliance Bancorp Inc. 0.86 10.48
RIVR River Valley Bancorp 0.93 7.28
ROSE TR Financial Corp. 1.01 16.43
RSLN Roslyn Bancorp Inc. 1.30 7.51
RVSB Riverview Bancorp Inc. 1.71 8.52
SBAN SouthBanc Shares Inc. 0.77 6.99
SBFL SB of the Finger Lakes (MHC) 0.41 4.62
SBOS Boston Bancorp (The) 1.89 21.12
SCBS Southern Community Bancshares 1.13 5.60
SCCB S. Carolina Community Bancshrs 1.01 4.19
SFED SFS Bancorp Inc. 0.66 5.37
SFFC StateFed Financial Corp. 1.16 6.49
SFIN Statewide Financial Corp. 0.81 8.56
SFSL Security First Corp. 1.43 15.25
SGVB SGV Bancorp Inc. 0.36 4.79
SHSB SHS Bancorp Inc. 0.77 7.21
SIB Staten Island Bancorp Inc. 1.00 5.61
SISB SIS Bancorp Inc. 0.72 10.12
SKAN Skaneateles Bancorp Inc. 0.62 8.95
SKBO First Carnegie Deposit (MHC) 0.66 3.95
SMBC Southern Missouri Bancorp Inc. 0.67 4.06
SOBI Sobieski Bancorp Inc. 0.58 3.93
SOPN First Savings Bancorp Inc. 1.76 7.64
SPBC St. Paul Bancorp Inc. 1.08 11.81
SRN Southern Banc Co. 0.49 2.84
SSB Scotland Bancorp Inc. 1.33 5.18
SSFC South Street Financial Corp. 0.55 2.71
SSM Stone Street Bancorp Inc. 1.40 4.84
STFR St. Francis Capital Corp. 0.84 10.66
STSA Sterling Financial Corp. 0.37 6.74
SVRN Sovereign Bancorp Inc. 0.56 10.10
SWCB Sandwich Bancorp Inc. 0.97 12.32
SZB SouthFirst Bancshares Inc. 0.46 4.19
TBFC Telebanc Financial Corp. 0.28 6.21
THR Three Rivers Financial Corp. 0.88 6.45
THRD TF Financial Corp. 0.70 7.90
THTL Thistle Group Holdings Co. 1.18 12.41
TPNZ Tappan Zee Financial Inc. 0.89 5.26
TRIC Tri-County Bancorp Inc. 1.01 6.46
TSBK Timberland Bancorp Inc. 1.83 8.40
TSBS Peoples Bancorp Inc. 1.20 6.08
TSH Teche Holding Co. 0.94 6.91
TWIN Twin City Bancorp 1.02 7.91
UBMT United Financial Corp. 1.16 7.47
UCBC Union Community Bancorp NA NA
UCFC United Community Finl Corp. 1.23 9.68
UFBS Union Financial Bcshs Inc. 0.88 11.07
UFRM United Federal Savings Bank 0.62 8.46
UPFC United PanAm Financial Corp. NA NA
USAB USABancshares Inc. 0.20 2.17
UTBI United Tennessee Bankshares NA NA
WAMU Washington Mutual Inc. 0.64 11.68
WAYN Wayne Savings Bancshares (MHC) 0.73 7.72
WBST Webster Financial Corp. 0.65 12.08
WCBI Westco Bancorp Inc. 1.49 9.64
WCFB Webster City Federal SB (MHC) 1.40 5.96
WEFC Wells Financial Corp. 1.19 8.19
WEHO Westwood Homestead Fin. Corp. 0.68 2.72
WES Westcorp 0.20 2.19
WFI Winton Financial Corp. 1.17 16.06
WFSL Washington Federal Inc. 1.97 15.09
</TABLE>
<PAGE> 113
Page 15 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 15.29 15.29 0.00 12.21 15.55 28.75
WOFC Western Ohio Financial Corp. 14.52 13.71 6.48 12.24 15.48 23.26
WRNB Warren Bancorp Inc. 10.49 10.49 0.00 9.63 11.55 12.62
WSB Washington Savings Bank, FSB 8.42 8.42 0.00 7.99 8.86 24.39
WSBI Warwick Community Bancorp 23.05 23.05 0.00 16.07 23.44 30.56
WSFS WSFS Financial Corp. 6.15 6.12 0.48 7.37 7.74 12.28
WSTR WesterFed Financial Corp. 10.73 8.93 18.49 8.27 11.21 13.81
WVFC WVS Financial Corp. 11.10 11.10 0.00 10.98 11.73 22.09
WYNE Wayne Bancorp Inc. 12.77 12.77 0.00 10.74 13.61 22.53
YFCB Yonkers Financial Corp. 10.30 10.30 0.00 8.94 10.61 25.07
YFED York Financial Corp. 8.89 8.89 0.00 7.67 9.60 13.11
- --------------------------------------------------------------------------------------------------------------------------
Average 12.84 12.64 3.12 11.14 13.37 22.55
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 1.01 45.62 0.59 3.85 0.46 41.31
WOFC Western Ohio Financial Corp. 1.71 79.48 1.29 8.89 1.36 74.24
WRNB Warren Bancorp Inc. 1.06 153.20 1.15 10.99 1.62 83.50
WSB Washington Savings Bank, FSB NA NA NA NA 1.02 NA
WSBI Warwick Community Bancorp 0.78 100.84 0.50 2.19 0.79 75.47
WSFS WSFS Financial Corp. 1.84 176.80 1.12 18.28 3.26 122.16
WSTR WesterFed Financial Corp. 0.60 123.01 0.43 4.02 0.74 97.44
WVFC WVS Financial Corp. 0.38 308.46 0.2 1.83 1.17 308.46
WYNE Wayne Bancorp Inc. 0.97 122.36 0.80 6.27 1.18 103.99
YFCB Yonkers Financial Corp. 0.14 422.07 0.15 1.46 0.61 208.94
YFED York Financial Corp. 0.10 874.88 0.98 10.99 0.90 31.83
- ---------------------------------------------------------------------------------------------------------------------
Average 0.65 195.91 0.56 6.29 0.89 152.03
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
WHGB WHG Bancshares Corp. 0.58 3.16
WOFC Western Ohio Financial Corp. 0.07 0.49
WRNB Warren Bancorp Inc. 1.72 15.99
WSB Washington Savings Bank, FSB 0.74 8.67
WSBI Warwick Community Bancorp NA NA
WSFS WSFS Financial Corp. 1.13 19.29
WSTR WesterFed Financial Corp. 0.72 6.73
WVFC WVS Financial Corp. 1.20 10.45
WYNE Wayne Bancorp Inc. 0.70 5.44
YFCB Yonkers Financial Corp. 0.89 6.79
YFED York Financial Corp. 0.84 9.61
- -------------------------------------------------------------------------------------------
Average 0.91 8.35
</TABLE>
<PAGE> 114
Page 16 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
CAPITAL AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
TANGIBLE INTANGIBLE REGULATORY EQUITY + TOTAL CAPITAL/
EQUITY/ EQUITY/ ASSETS/ CORE CAP/ RESERVES/ RISK ADJUSTED
ASSETS TANG ASSETS EQUITY ASSETS ASSETS ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPARABLE THRIFT DATA
ANDB Andover Bancorp Inc. 8.20 8.20 0.00 8.21 8.94 15.13
EBSI Eagle Bancshares 6.50 6.50 0.00 4.59 7.06 8.31
FAB FIRSTFED AMERICA BANCORP INC. 8.86 8.86 0.00 7.46 9.71 16.22
FNGB First Northern Capital Corp. 10.89 10.89 0.00 9.64 11.38 15.75
FWWB First Washington Bancorp Inc. 13.01 12.18 7.33 12.17 13.69 22.64
KFBI Klamath First Bancorp 13.98 12.96 8.40 10.92 14.14 21.84
MDBK Medford Bancorp Inc. 8.94 8.52 5.11 8.54 9.55 15.62
MECH MECH Financial Inc. 9.71 9.71 0.00 9.61 11.07 16.65
WSTR WesterFed Financial Corp. 10.73 8.93 18.49 8.27 11.21 13.81
YFED York Financial Corp. 8.89 8.89 0.00 7.67 9.60 13.11
- --------------------------------------------------------------------------------------------------------------------------
Average 9.97 9.56 3.93 8.71 10.64 15.91
Median 9.33 8.91 0.00 8.41 10.39 15.69
Maximum 13.98 12.96 18.49 12.17 14.14 22.64
Minimum 6.50 6.50 0.00 4.59 7.06 8.31
COMMUNITY SAVINGS BANKSHARES, INC 10.85 9.63 0.00 9.63 11.21 17.29
VARIANCE TO THE COMPARABLE MEDIAN 1.53 0.72 0.00 1.23 0.82 1.61
<CAPTION>
ASSET QUALITY AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------
NPLS/ RESERVES/ NPAS/ NPAS/ RESERVES/ RESERVES/
LOANS NPLS ASSETS EQUITY LOANS NPAS + 90
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPARABLE THRIFT DATA
ANDB Andover Bancorp Inc. 0.49 205.01 0.38 4.62 1.00 195.38
EBSI Eagle Bancshares 0.91 81.84 0.95 14.58 0.74 59.71
FAB FIRSTFED AMERICA BANCORP INC. 0.37 331.87 0.29 3.26 1.24 293.25
FNGB First Northern Capital Corp. 0.11 506.35 0.12 1.11 0.54 400.84
FWWB First Washington Bancorp Inc. 0.21 498.86 0.21 1.64 1.03 301.38
KFBI Klamath First Bancorp 0.07 356.52 0.05 0.33 0.26 356.52
MDBK Medford Bancorp Inc. 0.34 346.52 0.18 2.00 1.19 338.34
MECH MECH Financial Inc. 0.62 345.41 0.46 4.72 2.14 296.39
WSTR WesterFed Financial Corp. 0.60 123.01 0.43 4.02 0.74 97.44
YFED York Financial Corp. 0.10 874.88 0.98 10.99 0.90 31.83
- --------------------------------------------------------------------------------------------------------------------
Average 0.38 367.03 0.41 4.73 0.98 237.11
Median 0.36 345.97 0.34 3.64 0.95 294.82
Maximum 0.91 874.88 0.98 14.58 2.14 400.84
Minimum 0.07 81.84 0.05 0.33 0.26 31.83
COMMUNITY SAVINGS BANKSHARES, INC 0.26 202.56 0.27 2.50 0.52 133.22
VARIANCE TO THE COMPARABLE MEDIAN (0.10) (143.40) (0.06) (1.14) (0.43) (161.60)
<CAPTION>
PROFITABILITY AS OF THE MOST RECENT QUARTER
-------------------------------------------
RETURN ON RETURN ON
AVG ASSETS AVG EQUITY
TICKER SHORT NAME (%) (%)
- ------------------------------------------------ -------------------------------------------
<S> <C> <C> <C>
COMPARABLE THRIFT DATA
ANDB Andover Bancorp Inc. 1.19 15.04
EBSI Eagle Bancshares 0.83 10.00
FAB FIRSTFED AMERICA BANCORP INC. 0.60 5.47
FNGB First Northern Capital Corp. 0.98 8.87
FWWB First Washington Bancorp Inc. 1.21 8.70
KFBI Klamath First Bancorp 0.92 6.11
MDBK Medford Bancorp Inc. 1.07 11.84
MECH MECH Financial Inc. 0.97 9.71
WSTR WesterFed Financial Corp. 0.72 6.73
YFED York Financial Corp. 0.84 9.61
- -------------------------------------------------------------------------------------------
Average 0.93 9.21
Median 0.95 9.24
Maximum 1.21 15.04
Minimum 0.60 5.47
COMMUNITY SAVINGS BANKSHARES, INC 0.67 6.10
VARIANCE TO THE COMPARABLE MEDIAN (0.28) (3.14)
</TABLE>
<PAGE> 115
Page 17 OF 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
----------------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ---------------------------------------- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank 2.61 6.75 4.39 2.37 0.94 2.05
%CCMD Chevy Chase Bank, FSB 3.76 6.91 3.82 3.09 5.75 7.92
AABC Access Anytime Bancorp Inc. 3.13 6.88 3.87 3.01 0.61 3.41
ABBK Abington Bancorp Inc. 3.23 7.05 3.99 3.06 0.83 2.73
ABCL Alliance Bancorp 2.88 7.11 4.34 2.77 1.14 2.43
ABCW Anchor BanCorp Wisconsin 3.21 7.68 4.59 3.09 0.47 1.97
AFBC Advance Financial Bancorp 3.94 7.77 3.94 3.84 0.35 2.77
AFED AFSALA Bancorp Inc. 3.51 6.98 3.64 3.34 0.23 2.29
AHCI Ambanc Holding Co. 3.26 7.19 4.04 3.16 0.23 2.51
AHM H.F. Ahmanson & Co. 2.76 7.14 4.50 2.64 0.54 1.70
ALBC Albion Banc Corp. 3.39 7.46 4.20 3.27 0.49 2.90
ALBK ALBANK Financial Corp. 3.89 7.24 3.58 3.66 0.45 2.38
ALLB Alliance Bank (MHC) 3.49 7.21 3.84 3.37 0.23 2.38
AMFC AMB Financial Corp. 3.35 7.34 4.06 3.27 0.55 2.79
ANA Acadiana Bancshares Inc. 3.50 7.51 4.09 3.41 0.37 2.18
ANDB Andover Bancorp Inc. 3.17 7.20 4.14 3.06 0.36 1.74
ANE Alliance Bncp of New England 3.56 7.14 3.74 3.40 0.48 2.86
ASBI Ameriana Bancorp 3.19 7.38 4.33 3.05 0.59 2.29
ASBP ASB Financial Corp. 3.24 7.56 4.36 3.20 0.24 2.04
ASFC Astoria Financial Corp. 2.69 6.89 4.33 2.56 0.19 1.39
ATSB AmTrust Capital Corp. 2.82 7.04 4.35 2.69 0.55 2.87
AVND Avondale Financial Corp. 3.71 8.00 4.59 3.40 0.95 3.71
BANC BankAtlantic Bancorp Inc. 3.43 7.41 4.26 3.16 0.73 2.80
BCSB BCSB Bankcorp Inc. (MHC) NA NA NA NA NA NA
BDJI First Federal Bancorp. 3.30 7.27 4.15 3.13 0.57 2.46
BFD BostonFed Bancorp Inc. 3.36 7.20 3.98 3.22 0.35 2.38
BFFC Big Foot Financial Corp. 3.12 6.62 3.60 3.02 0.12 2.39
BFSB Bedford Bancshares Inc. 3.92 7.69 3.91 3.78 0.51 2.22
BKC American Bank of Connecticut 3.25 7.20 4.07 3.13 0.54 1.73
BKCT Bancorp Connecticut Inc. 3.71 7.43 3.81 3.62 0.38 2.08
BKUNA BankUnited Financial Corp. 1.75 7.03 5.33 1.69 0.12 1.21
BNKU Bank United Corp. 2.43 7.14 4.87 2.27 0.49 1.59
BPLS Bank Plus Corp. 2.02 6.93 4.97 1.96 0.52 1.98
BRBI Blue River Bancshares Inc. NA NA NA NA NA NA
BRKL Brookline Bancorp (MHC) 4.15 7.66 3.52 4.14 0.15 1.16
BTHL Bethel Bancorp 4.47 8.57 4.34 4.24 0.80 3.89
BVCC Bay View Capital Corp. 2.96 7.56 4.77 2.80 0.36 2.10
BWFC Bank West Financial Corp. 3.06 7.33 4.44 2.89 0.55 2.60
BYFC Broadway Financial Corp. 4.35 7.45 3.30 4.14 0.53 3.97
BYS Bay State Bancorp 3.71 7.44 3.79 3.65 0.10 2.89
CAFI Camco Financial Corp. 3.61 7.67 4.25 3.42 0.55 2.47
CASB Cascade Financial Corp. 3.39 7.99 4.74 3.25 0.40 2.48
CASH First Midwest Financial Inc. 3.23 7.73 4.60 3.12 0.38 1.98
CATB Catskill Financial Corp. 3.97 7.18 3.31 3.88 0.15 1.91
CAVB Cavalry Bancorp Inc. NA NA NA NA NA NA
CBCI Calumet Bancorp Inc. 3.96 7.83 4.17 3.66 0.25 0.79
CBES CBES Bancorp Inc. 4.37 8.24 4.02 4.22 0.36 3.33
CBK Citizens First Financial Corp. 3.34 7.52 4.32 3.21 0.34 2.59
CBSA Coastal Bancorp Inc. 2.07 6.96 4.95 2.01 0.22 1.47
CCFH CCF Holding Co. 3.80 7.73 4.22 3.51 0.55 3.93
CEBK Central Co-operative Bank 3.45 7.20 3.86 3.34 0.22 2.42
CENB Century Bancorp Inc. 3.67 7.07 3.45 3.61 0.03 1.59
CFB Commercial Federal Corp. 2.78 7.41 4.77 2.64 0.94 1.89
CFCP Coastal Financial Corp. 3.69 7.78 4.23 3.55 0.71 2.51
CFFC Community Financial Corp. 3.91 7.93 4.16 3.77 0.44 2.28
CFKY Columbia Financial of Kentucky NA NA NA NA NA NA
CFNC Carolina Fincorp Inc. 4.08 7.42 3.51 3.91 0.46 2.67
CFSB CFSB Bancorp Inc. 3.09 7.41 4.38 3.03 0.69 1.86
CFTP Community Federal Bancorp 3.06 6.70 3.73 2.97 0.15 1.45
CIBI Community Investors Bancorp 3.55 7.74 4.29 3.46 0.18 2.05
CITZ CFS Bancorp Inc. 2.96 7.26 4.42 2.84 0.29 2.53
CKFB CKF Bancorp Inc. 3.62 7.51 3.95 3.57 0.12 1.62
CLAS Classic Bancshares Inc. 3.78 7.20 3.66 3.54 0.38 3.08
CMRN Cameron Financial Corp 3.78 7.94 4.32 3.61 0.12 1.96
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
------------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ---------------------------------------- ---------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank 58.16 41.54 10.10 NA (3.68)
%CCMD Chevy Chase Bank, FSB 85.61 58.84 2.20 (26.24) 14.39
AABC Access Anytime Bancorp Inc. 93.97 92.75 11.72 44.46 5.42
ABBK Abington Bancorp Inc. 68.55 60.05 8.97 14.10 11.34
ABCL Alliance Bancorp 62.77 47.49 47.28 29.55 29.10
ABCW Anchor BanCorp Wisconsin 55.05 48.24 6.84 11.04 7.91
AFBC Advance Financial Bancorp 66.65 63.59 6.85 11.63 4.16
AFED AFSALA Bancorp Inc. 64.12 61.61 8.98 6.17 8.21
AHCI Ambanc Holding Co. 72.73 70.77 8.72 14.25 4.17
AHM H.F. Ahmanson & Co. 48.52 37.98 11.14 13.76 14.25
ALBC Albion Banc Corp. 77.07 73.61 8.00 16.57 6.99
ALBK ALBANK Financial Corp. 53.65 47.98 14.68 9.68 17.37
ALLB Alliance Bank (MHC) 66.52 64.27 13.55 0.37 13.64
AMFC AMB Financial Corp. 73.03 68.49 18.22 23.20 15.6
ANA Acadiana Bancshares Inc. 61.51 57.35 11.67 NA 6.55
ANDB Andover Bancorp Inc. 50.18 44.38 11.30 16.14 5.63
ANE Alliance Bncp of New England 68.40 63.94 5.90 12.22 5.72
ASBI Ameriana Bancorp 62.86 55.70 (3.40) (2.00) (0.24)
ASBP ASB Financial Corp. 59.30 56.21 5.02 8.77 4.23
ASFC Astoria Financial Corp. 44.14 39.89 51.03 58.52 34.05
ATSB AmTrust Capital Corp. 88.31 85.91 (4.31) (5.50) (7.14)
AVND Avondale Financial Corp. 86.47 82.70 (14.35) (44.22) (5.07)
BANC BankAtlantic Bancorp Inc. 72.36 65.98 37.58 39.94 2.52
BCSB BCSB Bankcorp Inc. (MHC) NA NA NA NA NA
BDJI First Federal Bancorp. 65.75 59.52 9.70 5.92 3.04
BFD BostonFed Bancorp Inc. 66.31 62.64 8.43 14.48 12.13
BFFC Big Foot Financial Corp. 75.41 74.39 NA NA NA
BFSB Bedford Bancshares Inc. 51.75 45.22 15.54 8.64 4.81
BKC American Bank of Connecticut 45.57 36.19 13.15 11.32 6.48
BKCT Bancorp Connecticut Inc. 51.87 46.78 15.60 0.70 3.89
BKUNA BankUnited Financial Corp. 64.81 62.28 128.95 109.42 81.31
BNKU Bank United Corp. 56.23 46.72 14.48 17.40 22.27
BPLS Bank Plus Corp. 74.64 67.88 21.29 NA 13.08
BRBI Blue River Bancshares Inc. NA NA NA NA NA
BRKL Brookline Bancorp (MHC) 27.30 24.60 22.38 7.27 (4.06)
BTHL Bethel Bancorp 74.42 69.60 4.55 0.81 (1.91)
BVCC Bay View Capital Corp. 61.90 57.02 84.75 92.41 109.97
BWFC Bank West Financial Corp. 75.58 70.93 22.67 17.92 17.02
BYFC Broadway Financial Corp. 82.73 80.51 8.15 7.26 9.48
BYS Bay State Bancorp 77.11 76.48 19.01 7.83 2.05
CAFI Camco Financial Corp. 61.67 55.50 21.83 22.50 18.17
CASB Cascade Financial Corp. 67.69 63.68 2.30 12.69 2.73
CASH First Midwest Financial Inc. 52.63 46.84 12.39 NA 12.26
CATB Catskill Financial Corp. 47.94 45.94 8.91 7.07 5.11
CAVB Cavalry Bancorp Inc. NA NA NA NA NA
CBCI Calumet Bancorp Inc. 50.03 46.57 (0.93) 0.52 (1.42)
CBES CBES Bancorp Inc. 71.47 69.03 22.39 26.28 21.34
CBK Citizens First Financial Corp. 72.49 69.57 3.03 3.47 0.77
CBSA Coastal Bancorp Inc. 61.86 57.65 0.55 5.83 (0.43)
CCFH CCF Holding Co. 96.82 96.32 57.28 40.14 81.84
CEBK Central Co-operative Bank 65.65 63.41 17.17 19.92 6.67
CENB Century Bancorp Inc. 44.09 43.69 4.43 14.75 4.01
CFB Commercial Federal Corp. 50.54 32.85 3.83 6.40 (1.66)
CFCP Coastal Financial Corp. 59.51 51.38 22.70 5.59 10.82
CFFC Community Financial Corp. 54.10 48.76 9.65 9.10 18.50
CFKY Columbia Financial of Kentucky NA NA NA NA NA
CFNC Carolina Fincorp Inc. 60.99 56.37 9.01 11.96 11.00
CFSB CFSB Bancorp Inc. 49.85 38.40 0.28 0.69 3.13
CFTP Community Federal Bancorp 46.14 43.47 25.93 11.80 7.65
CIBI Community Investors Bancorp 55.11 52.70 4.40 12.17 4.66
CITZ CFS Bancorp Inc. 75.73 73.26 15.31 21.71 16.68
CKFB CKF Bancorp Inc. 43.72 41.81 3.20 1.47 9.66
CLAS Classic Bancshares Inc. 75.45 72.79 5.71 7.19 9.38
CMRN Cameron Financial Corp 52.41 50.89 6.09 3.07 7.00
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
--------------------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ----------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB NA NA NA NA NA NA
AABC Access Anytime Bancorp Inc. 12.48 12.00 13.000 5.822 7.610 7.61
ABBK Abington Bancorp Inc. 61.72 18.75 22.250 12.750 9.850 8.98
ABCL Alliance Bancorp 251.56 23.88 29.250 20.000 15.800 15.67
ABCW Anchor BanCorp Wisconsin 380.04 39.06 46.500 24.125 14.690 14.47
AFBC Advance Financial Bancorp 17.58 19.38 20.875 13.500 14.520 14.52
AFED AFSALA Bancorp Inc. 24.81 20.44 20.438 12.563 16.450 16.45
AHCI Ambanc Holding Co. 68.67 19.00 19.500 12.688 14.270 14.27
AHM H.F. Ahmanson & Co. 6,912.90 71.00 82.813 44.938 28.650 21.84
ALBC Albion Banc Corp. 6.54 8.50 14.167 7.333 8.370 8.37
ALBK ALBANK Financial Corp. 803.24 70.56 70.563 37.125 28.700 22.72
ALLB Alliance Bank (MHC) 72.01 28.88 39.000 15.125 9.060 9.06
AMFC AMB Financial Corp. 14.42 17.50 19.375 14.000 15.420 15.42
ANA Acadiana Bancshares Inc. 55.12 22.50 25.625 19.750 17.520 17.52
ANDB Andover Bancorp Inc. 223.59 34.25 37.750 23.700 17.610 17.61
ANE Alliance Bncp of New England 29.22 15.75 16.083 8.781 7.900 7.73
ASBI Ameriana Bancorp 60.17 20.75 22.000 15.250 13.900 13.64
ASBP ASB Financial Corp. 20.44 14.25 14.625 11.500 10.680 10.68
ASFC Astoria Financial Corp. 1,226.62 53.50 62.500 45.375 33.640 24.10
ATSB AmTrust Capital Corp. 7.91 13.88 14.500 10.000 14.660 14.51
AVND Avondale Financial Corp. 41.95 17.38 18.875 13.625 14.210 14.21
BANC BankAtlantic Bancorp Inc. 383.02 12.88 17.000 12.250 6.960 5.38
BCSB BCSB Bankcorp Inc. (MHC) 71.49 NA NA NA NA NA
BDJI First Federal Bancorp. 16.47 18.50 22.000 13.167 12.700 12.70
BFD BostonFed Bancorp Inc. 104.49 23.38 24.875 18.000 16.180 15.62
BFFC Big Foot Financial Corp. 38.95 21.00 23.938 13.250 15.240 15.24
BFSB Bedford Bancshares Inc. 32.17 15.50 17.375 11.500 9.020 9.02
BKC American Bank of Connecticut 111.31 27.25 32.563 17.875 12.650 12.27
BKCT Bancorp Connecticut Inc. 87.27 19.25 25.000 12.250 9.580 9.58
BKUNA BankUnited Financial Corp. 182.73 14.00 15.625 8.500 9.430 8.18
BNKU Bank United Corp. 1,295.42 47.88 56.000 35.875 21.190 19.25
BPLS Bank Plus Corp. 196.29 12.25 16.125 10.750 9.550 8.76
BRBI Blue River Bancshares Inc. 15.00 NA NA NA NA NA
BRKL Brookline Bancorp (MHC) 378.24 14.88 17.984 14.875 9.470 9.47
BTHL Bethel Bancorp 15.15 13.25 13.250 10.750 13.710 11.51
BVCC Bay View Capital Corp. 452.43 31.75 38.000 24.875 19.430 12.60
BWFC Bank West Financial Corp. 29.84 14.13 17.500 7.500 8.930 8.93
BYFC Broadway Financial Corp. 9.07 11.57 12.731 9.722 13.950 13.95
BYS Bay State Bancorp 60.21 27.00 32.625 26.625 27.240 27.24
CAFI Camco Financial Corp. 95.01 18.42 18.417 11.111 10.410 9.77
CASB Cascade Financial Corp. 57.59 14.50 16.000 9.600 7.370 7.37
CASH First Midwest Financial Inc. 51.31 23.50 24.875 16.250 16.400 14.65
CATB Catskill Financial Corp. 70.98 16.88 19.125 15.250 15.720 15.72
CAVB Cavalry Bancorp Inc. 148.88 21.75 NA NA 13.370 13.37
CBCI Calumet Bancorp Inc. 95.93 33.25 39.000 24.833 27.740 27.74
CBES CBES Bancorp Inc. 19.50 20.50 26.000 17.125 17.940 17.94
CBK Citizens First Financial Corp. 43.74 21.50 22.375 14.625 15.270 15.27
CBSA Coastal Bancorp Inc. 157.87 24.50 26.667 18.750 15.000 13.07
CCFH CCF Holding Co. 18.34 21.88 24.000 15.000 12.900 12.90
CEBK Central Co-operative Bank 44.21 31.13 33.500 15.875 18.720 17.00
CENB Century Bancorp Inc. 17.63 37.67 39.000 22.667 14.580 14.58
CFB Commercial Federal Corp. 1,109.23 31.63 38.188 25.083 15.290 13.55
CFCP Coastal Financial Corp. 118.86 19.38 20.813 14.719 5.820 5.82
CFFC Community Financial Corp. 36.28 15.88 15.875 10.750 9.970 9.93
CFKY Columbia Financial of Kentucky 38.07 NA NA NA NA NA
CFNC Carolina Fincorp Inc. 19.41 17.63 18.750 14.125 13.900 13.90
CFSB CFSB Bancorp Inc. 198.05 28.75 28.750 14.091 8.080 8.08
CFTP Community Federal Bancorp 70.37 17.25 21.000 16.375 14.850 14.85
CIBI Community Investors Bancorp 16.46 13.50 13.500 7.667 8.370 8.37
CITZ CFS Bancorp Inc. 189.70 NA NA NA NA NA
CKFB CKF Bancorp Inc. 13.92 19.06 21.250 17.750 17.290 17.29
CLAS Classic Bancshares Inc. 20.31 16.00 21.500 13.875 15.790 13.58
CMRN Cameron Financial Corp 40.61 19.81 22.188 17.125 18.020 18.02
</TABLE>
<PAGE> 116
Page 18 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 3.24 6.85 3.83 3.02 0.71 3.03
CMSV Community Savings Bnkshrs(MHC) 3.49 7.26 3.97 3.29 0.52 2.71
CNIT CENIT Bancorp Inc. 3.27 7.22 4.14 3.07 0.87 2.55
CNSB CNS Bancorp Inc. 3.61 7.18 3.73 3.44 0.19 2.46
CNY Carver Bancorp Inc. 3.40 6.80 3.58 3.21 0.58 2.94
COFI Charter One Financial 2.94 7.36 4.53 2.83 0.75 1.64
CONE Conestoga Bancorp, Inc. 3.13 6.65 3.75 2.89 0.17 1.93
COOP Cooperative Bankshares Inc. 3.02 7.43 4.51 2.92 0.18 2.07
CRSB Crusader Holding Corp. 3.86 9.10 5.32 3.78 2.82 3.02
CRZY Crazy Woman Creek Bancorp 3.36 7.28 3.98 3.30 0.15 1.61
CSBF CSB Financial Group Inc. 3.56 6.87 3.43 3.45 0.23 2.73
CVAL Chester Valley Bancorp Inc. 3.66 7.35 3.83 3.52 1.18 3.26
DCBI Delphos Citizens Bancorp Inc. 3.91 7.44 3.60 3.84 0.37 1.80
DCOM Dime Community Bancshares Inc. 3.56 7.30 3.90 3.40 0.27 1.90
DIBK Dime Financial Corp. 3.12 7.17 4.11 3.06 0.22 1.41
DME Dime Bancorp Inc. 2.57 6.80 4.39 2.41 0.72 2.22
DNFC D & N Financial Corp. 3.01 7.65 4.71 2.94 0.38 2.15
DSL Downey Financial Corp. 2.92 7.46 4.66 2.79 0.34 1.56
EBI Equality Bancorp Inc. 2.35 6.59 4.34 2.25 0.63 2.74
EBSI Eagle Bancshares 4.03 8.30 4.62 3.68 1.59 3.78
EFBC Empire Federal Bancorp Inc. 4.39 7.09 2.80 4.29 0.78 2.63
EFBI Enterprise Federal Bancorp 2.66 7.55 4.94 2.61 0.05 1.55
EFC EFC Bancorp Inc. 3.47 7.38 3.97 3.41 0.23 2.32
EGLB Eagle BancGroup Inc. 2.47 7.07 4.69 2.38 0.19 2.24
EMLD Emerald Financial Corp. 2.87 7.47 4.69 2.78 0.41 1.57
EQSB Equitable Federal Savings Bank 2.38 7.21 4.89 2.32 0.45 1.66
ESBF ESB Financial Corp. 1.99 6.85 4.90 1.94 0.15 1.18
ESBK Elmira Savings Bank (The) 3.76 7.55 4.00 3.55 0.49 3.10
ESX Essex Bancorp Inc. 3.02 7.69 4.85 2.84 1.20 4.27
ETFS East Texas Financial Services 2.88 6.88 4.07 2.81 0.18 2.28
FAB FIRSTFED AMERICA BANCORP INC. 2.81 6.96 4.29 2.67 0.40 2.08
FBBC First Bell Bancorp Inc. 2.52 7.06 4.58 2.48 0.08 0.78
FBCI Fidelity Bancorp Inc. NA NA NA NA NA NA
FBCV 1ST Bancorp 2.60 7.50 5.02 2.49 0.46 2.18
FBER 1st Bergen Bancorp 3.20 7.08 3.99 3.09 0.12 2.04
FBHC Fort Bend Holding Corp. 3.32 6.99 3.92 3.07 1.99 4.35
FBNW FirstBank Corp. 4.47 8.10 3.93 4.17 0.82 3.80
FBSI First Bancshares Inc. 3.60 7.69 4.26 3.44 0.32 2.03
FCB Falmouth Bancorp Inc. 4.20 7.09 3.05 4.04 0.18 2.88
FCBF FCB Financial Corp. 3.41 7.59 4.26 3.33 0.39 1.80
FCBH Virginia Beach Fed. Financial NA NA NA NA NA NA
FCBK First Coastal Bankshares 3.23 7.89 4.78 3.12 0.47 2.79
FCME First Coastal Corp. 4.47 8.01 3.85 4.16 0.42 3.46
FDEF First Defiance Financial 4.16 7.84 3.88 3.96 0.27 2.55
FDTR Federal Trust Corp. NA NA NA NA NA NA
FED FirstFed Financial Corp. 2.53 7.34 4.90 2.45 0.21 1.13
FESX First Essex Bancorp Inc. 3.23 7.54 4.45 3.09 0.26 1.96
FFBA First Colorado Bancorp Inc. 3.38 7.14 3.90 3.23 0.41 1.65
FFBH First Federal Bancshares of AR 3.17 7.59 4.48 3.11 0.25 1.82
FFBI First Financial Bancorp Inc. 3.08 7.18 4.25 2.93 0.55 2.97
FFBS FFBS BanCorp Inc. 3.70 7.48 3.84 3.64 0.50 1.92
FFBZ First Federal Bancorp Inc. 3.65 7.66 4.36 3.31 0.46 2.42
FFCH First Financial Holdings Inc. 3.10 7.53 4.54 2.99 0.72 2.20
FFDB FirstFed Bancorp Inc. 3.80 7.53 4.06 3.47 0.49 2.23
FFDF FFD Financial Corp. 3.34 7.01 3.71 3.30 0.07 2.07
FFED Fidelity Federal Bancorp 2.80 7.99 5.38 2.61 1.18 3.05
FFES First Federal of East Hartford 2.33 6.72 4.46 2.26 0.17 1.36
FFFD North Central Bancshares Inc. 3.64 7.24 3.76 3.48 1.07 2.14
FFFL Fidelity Bankshares Inc. (MHC) 2.88 7.14 4.42 2.72 0.41 2.21
FFHH FSF Financial Corp. 2.92 7.38 4.54 2.85 0.43 1.95
FFHS First Franklin Corp. 2.71 7.25 4.61 2.63 0.21 1.78
FFIC Flushing Financial Corp. 3.55 7.57 4.16 3.41 0.29 2.07
FFKY First Federal Financial Corp. 4.02 7.85 4.05 3.81 0.63 2.04
FFLC FFLC Bancorp Inc. 3.61 7.65 4.17 3.48 0.26 2.02
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
----------------------------- ----------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------------ ----------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 74.35 68.35 3.46 16.20 3.96
CMSV Community Savings Bnkshrs(MHC) 71.32 66.80 11.48 23.51 9.01
CNIT CENIT Bancorp Inc. 62.84 52.38 (8.13) 7.14 (2.23)
CNSB CNS Bancorp Inc. 68.06 66.27 (0.37) (1.02) (1.00)
CNY Carver Bancorp Inc. 76.13 71.86 3.29 13.24 3.79
COFI Charter One Financial 44.85 30.16 6.26 18.21 7.98
CONE Conestoga Bancorp, Inc. 63.13 60.99 11.04 (0.08) 13.23
COOP Cooperative Bankshares Inc. 65.82 63.74 8.12 8.14 5.54
CRSB Crusader Holding Corp. 45.26 4.47 72.54 83.62 23.90
CRZY Crazy Woman Creek Bancorp 46.79 44.36 13.27 6.82 7.06
CSBF CSB Financial Group Inc. 70.81 68.89 (0.03) 0.45 2.14
CVAL Chester Valley Bancorp Inc. 69.40 59.18 16.48 6.79 14.36
DCBI Delphos Citizens Bancorp Inc. 42.75 37.27 5.99 NA 4.51
DCOM Dime Community Bancshares Inc. 47.07 42.87 23.49 26.58 7.78
DIBK Dime Financial Corp. 41.60 37.40 16.58 (5.00) 13.13
DME Dime Bancorp Inc. 69.31 60.13 4.12 34.76 5.23
DNFC D & N Financial Corp. 64.75 60.19 17.97 8.67 5.86
DSL Downey Financial Corp. 55.87 50.51 (0.91) (1.82) 11.67
EBI Equality Bancorp Inc. 96.50 95.52 35.44 (4.20) (2.75)
EBSI Eagle Bancshares 76.31 66.10 39.52 49.84 39.67
EFBC Empire Federal Bancorp Inc. 51.85 43.14 2.46 8.44 0.25
EFBI Enterprise Federal Bancorp 57.66 56.83 42.43 44.57 39.05
EFC EFC Bancorp Inc. 63.62 61.14 40.21 8.76 7.29
EGLB Eagle BancGroup Inc. 87.37 86.35 (0.13) (3.35) 0.48
EMLD Emerald Financial Corp. 48.73 41.09 2.37 7.49 1.82
EQSB Equitable Federal Savings Bank 59.75 51.93 13.74 NA 7.03
ESBF ESB Financial Corp. 53.26 49.67 17.04 9.09 4.47
ESBK Elmira Savings Bank (The) 74.77 71.28 1.71 5.75 2.32
ESX Essex Bancorp Inc. 96.18 94.57 12.79 17.45 13.57
ETFS East Texas Financial Services 76.15 74.59 8.78 12.95 (1.82)
FAB FIRSTFED AMERICA BANCORP INC. 67.44 62.53 28.88 2.04 (4.34)
FBBC First Bell Bancorp Inc. 30.47 28.35 5.92 0.45 (7.05)
FBCI Fidelity Bancorp Inc. NA NA NA NA NA
FBCV 1ST Bancorp 70.92 65.58 (4.95) 4.85 (16.32)
FBER 1st Bergen Bancorp 62.65 61.19 5.62 8.05 4.61
FBHC Fort Bend Holding Corp. 85.58 76.22 (0.10) 11.36 (0.36)
FBNW FirstBank Corp. 75.61 70.84 26.14 24.90 6.94
FBSI First Bancshares Inc. 55.07 50.86 11.18 11.36 23.19
FCB Falmouth Bancorp Inc. 68.19 66.80 17.68 55.34 13.56
FCBF FCB Financial Corp. 48.45 42.38 90.93 72.96 107.95
FCBH Virginia Beach Fed. Financial NA NA NA NA NA
FCBK First Coastal Bankshares 76.54 72.97 (1.31) (2.06) 5.84
FCME First Coastal Corp. 75.39 72.89 12.69 2.49 18.36
FDEF First Defiance Financial 59.12 56.38 5.41 8.41 5.50
FDTR Federal Trust Corp. NA NA NA NA NA
FED FirstFed Financial Corp. 41.50 36.50 (4.36) NA 9.11
FESX First Essex Bancorp Inc. 55.78 52.14 5.73 7.59 28.27
FFBA First Colorado Bancorp Inc. 47.08 40.33 2.44 4.72 4.32
FFBH First Federal Bancshares of AR 54.51 50.82 8.02 NA 4.14
FFBI First Financial Bancorp Inc. 85.19 82.41 (12.52) (25.95) 2.60
FFBS FFBS BanCorp Inc. 46.26 38.94 7.34 11.76 6.52
FFBZ First Federal Bancorp Inc. 60.55 55.10 3.04 2.76 8.35
FFCH First Financial Holdings Inc. 59.37 49.66 15.99 10.79 7.93
FFDB FirstFed Bancorp Inc. 61.65 56.21 1.88 (6.64) 3.09
FFDF FFD Financial Corp. 61.53 60.67 17.37 27.22 10.89
FFED Fidelity Federal Bancorp 80.57 71.76 (21.12) (20.97) (21.06)
FFES First Federal of East Hartford 56.18 52.90 (0.32) 14.96 1.56
FFFD North Central Bancshares Inc. 45.66 29.01 55.55 44.96 80.83
FFFL Fidelity Bankshares Inc. (MHC) 70.37 65.93 46.94 24.30 29.94
FFHH FSF Financial Corp. 59.56 53.52 9.48 14.80 6.80
FFHS First Franklin Corp. 62.10 59.09 4.73 (1.07) 3.03
FFIC Flushing Financial Corp. 54.87 51.02 26.96 40.16 13.23
FFKY First Federal Financial Corp. 44.55 35.44 8.55 8.39 9.01
FFLC FFLC Bancorp Inc. 53.84 50.35 6.55 25.93 7.99
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
---------------------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- -------------------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 277.57 22.94 24.250 15.750 12.910 10.17
CMSV Community Savings Bnkshrs(MHC) 160.65 38.63 40.750 19.625 16.520 16.52
CNIT CENIT Bancorp Inc. 105.38 23.00 28.583 16.167 10.840 10.04
CNSB CNS Bancorp Inc. 24.26 17.50 21.500 16.000 14.760 14.76
CNY Carver Bancorp Inc. 27.92 13.25 17.125 11.625 15.510 14.99
COFI Charter One Financial 3,661.58 33.69 36.375 24.762 11.590 10.91
CONE Conestoga Bancorp, Inc. NA 20.63 20.780 14.375 17.580 17.58
COOP Cooperative Bankshares Inc. 46.93 17.50 25.000 10.625 10.000 10.00
CRSB Crusader Holding Corp. 57.49 15.83 17.857 14.048 6.060 5.74
CRZY Crazy Woman Creek Bancorp 14.90 16.88 20.000 13.250 15.350 15.35
CSBF CSB Financial Group Inc. 8.82 13.75 13.750 11.000 13.230 12.48
CVAL Chester Valley Bancorp Inc. 73.32 31.75 37.000 19.286 13.680 13.68
DCBI Delphos Citizens Bancorp Inc. 29.57 19.44 24.250 14.750 14.840 14.84
DCOM Dime Community Bancshares Inc. 289.19 27.75 29.313 18.563 15.300 13.33
DIBK Dime Financial Corp. 168.08 35.625 37.000 25.375 16.070 15.71
DME Dime Bancorp Inc. 3,093.78 29.94 32.063 17.000 11.720 9.64
DNFC D & N Financial Corp. 215.19 26.81 29.750 16.932 11.550 11.46
DSL Downey Financial Corp. 865.99 32.69 34.500 20.476 16.330 16.16
EBI Equality Bancorp Inc. 32.76 14.25 16.000 12.500 10.400 10.40
EBSI Eagle Bancshares 130.21 25.38 25.500 15.250 13.030 13.03
EFBC Empire Federal Bancorp Inc. 34.73 17.38 18.250 12.500 15.680 15.68
EFBI Enterprise Federal Bancorp 60.53 32.50 35.000 15.250 16.470 16.06
EFC EFC Bancorp Inc. 84.28 NA NA NA NA NA
EGLB Eagle BancGroup Inc. 21.77 19.13 21.125 15.500 17.820 17.82
EMLD Emerald Financial Corp. 131.00 12.88 16.000 6.688 5.110 5.05
EQSB Equitable Federal Savings Bank 35.17 30.50 34.000 18.625 14.670 14.67
ESBF ESB Financial Corp. 96.23 18.31 20.000 13.016 11.840 10.57
ESBK Elmira Savings Bank (The) 18.89 29.63 32.250 18.571 20.350 20.35
ESX Essex Bancorp Inc. 3.05 3.13 7.938 1.000 (4.040) 6.96
ETFS East Texas Financial Services 20.69 15.00 16.250 12.000 13.760 13.76
FAB FIRSTFED AMERICA BANCORP INC. 139.59 19.38 23.250 17.625 15.760 15.76
FBBC First Bell Bancorp Inc. 112.55 19.13 21.625 15.625 11.780 11.78
FBCI Fidelity Bancorp Inc. 66.59 22.63 NA NA 18.770 18.74
FBCV 1ST Bancorp 48.23 26.50 29.286 18.412 21.490 21.13
FBER 1st Bergen Bancorp 45.24 18.50 20.750 15.250 13.490 13.49
FBHC Fort Bend Holding Corp. 36.34 23.00 28.000 14.625 12.520 11.84
FBNW FirstBank Corp. 37.44 22.25 23.500 15.500 16.530 16.53
FBSI First Bancshares Inc. 29.04 15.50 17.500 9.500 10.810 10.35
FCB Falmouth Bancorp Inc. 26.91 19.75 23.875 16.375 16.240 16.24
FCBF FCB Financial Corp. 114.08 32.00 33.313 20.125 19.370 19.37
FCBH Virginia Beach Fed. Financial 89.37 20.25 NA NA NA NA
FCBK First Coastal Bankshares NA 18.75 20.875 13.250 9.080 9.08
FCME First Coastal Corp. 16.33 12.75 15.750 9.250 11.300 11.30
FDEF First Defiance Financial 106.05 14.13 16.250 13.500 12.660 12.66
FDTR Federal Trust Corp. 17.91 4.31 NA NA 2.570 2.57
FED FirstFed Financial Corp. 424.30 26.00 26.407 15.375 11.33 11.26
FESX First Essex Bancorp Inc. 160.70 22.38 26.125 16.500 12.410 8.97
FFBA First Colorado Bancorp Inc. 435.04 27.75 30.125 17.375 12.910 12.67
FFBH First Federal Bancshares of AR 113.25 26.38 30.250 20.375 17.460 17.46
FFBI First Financial Bancorp Inc. 10.49 21.00 21.000 15.500 18.370 18.37
FFBS FFBS BanCorp Inc. 34.98 21.25 26.000 21.000 15.070 15.07
FFBZ First Federal Bancorp Inc. 37.81 13.63 13.625 8.500 5.230 5.23
FFCH First Financial Holdings Inc. 298.19 26.13 27.000 11.875 8.700 8.70
FFDB FirstFed Bancorp Inc. 34.93 12.38 12.750 7.188 7.340 6.76
FFDF FFD Financial Corp. 26.02 22.75 22.750 13.000 15.430 15.43
FFED Fidelity Federal Bancorp 18.76 9.81 10.500 7.500 4.280 4.28
FFES First Federal of East Hartford 90.51 35.00 42.250 29.000 25.730 25.73
FFFD North Central Bancshares Inc. 56.63 21.19 24.875 15.750 15.730 13.63
FFFL Fidelity Bankshares Inc. (MHC) 176.86 28.63 35.375 19.750 13.280 NA
FFHH FSF Financial Corp. 50.87 18.00 21.250 17.375 16.370 16.37
FFHS First Franklin Corp. 28.31 15.63 20.833 13.167 12.160 12.11
FFIC Flushing Financial Corp. 180.13 28.50 28.500 20.000 17.900 17.24
FFKY First Federal Financial Corp. 105.82 28.50 28.750 20.500 13.240 12.57
FFLC FFLC Bancorp Inc. 68.30 19.38 23.500 16.350 14.110 14.11
</TABLE>
<PAGE> 117
Page 19 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
----------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ----------------------------------------------- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 2.98 7.22 4.36 2.86 0.21 1.72
FFPB First Palm Beach Bancorp Inc. 2.49 7.18 4.78 2.40 0.43 2.12
FFSL First Independence Corp. 2.97 7.49 4.61 2.88 0.15 1.79
FFSX First Fed SB of Siouxland (MHC) 3.07 6.93 4.19 2.74 0.55 2.22
FFWC FFW Corp. 3.20 7.60 4.47 3.12 0.47 1.98
FFWD Wood Bancorp Inc. 4.36 8.16 3.96 4.20 0.26 2.42
FFYF FFY Financial Corp. 3.65 7.67 4.09 3.59 0.24 1.88
FGHC First Georgia Holding Inc. 4.28 8.52 4.48 4.03 1.00 3.24
FIBC Financial Bancorp Inc. 3.49 7.09 3.76 3.33 0.27 1.84
FISB First Indiana Corp. 4.10 8.23 4.30 3.92 0.73 2.60
FKAN First Kansas Financial Corp. NA NA NA NA NA NA
FKFS First Keystone Financial 3.32 7.34 4.12 3.22 0.29 2.30
FKKY Frankfort First Bancorp Inc. 3.12 7.32 4.27 3.05 0.05 1.30
FLAG FLAG Financial Corp. 4.59 8.63 4.36 4.27 1.36 4.45
FLFC First Liberty Financial Corp. 3.94 7.86 4.30 3.56 0.89 2.71
FLGS Flagstar Bancorp Inc. 2.23 6.97 4.91 2.06 3.93 3.10
FLKY First Lancaster Bancshares 4.48 8.25 3.84 4.41 0.00 2.56
FMBD First Mutual Bancorp Inc. 3.20 7.10 4.15 2.95 0.42 2.80
FMCO FMS Financial Corp. 3.54 7.14 3.76 3.38 0.39 2.37
FMSB First Mutual Savings Bank 3.74 8.38 4.73 3.66 0.34 2.45
FNGB First Northern Capital Corp. 3.19 7.27 4.20 3.07 0.46 2.04
FOBC Fed One Bancorp 3.21 7.20 4.10 3.10 0.19 2.01
FPRY First Financial Bancorp 3.13 7.64 4.68 2.95 0.50 2.71
FSBI Fidelity Bancorp Inc. 2.83 7.06 4.30 2.76 0.25 1.82
FSFF First SecurityFed Financial NA NA NA NA NA NA
FSLA First Source Bancorp Inc. 3.29 6.99 3.81 3.17 0.23 1.64
FSNJ Bayonne Bancshares Inc. 2.71 6.63 3.98 2.65 0.21 1.64
FSPT FirstSpartan Financial Corp. 4.21 7.50 3.44 4.06 0.41 1.97
FSSB First FS&LA of San Bernardino 3.56 7.66 4.34 3.32 0.91 4.38
FSTC First Citizens Corp. NA NA NA NA NA NA
FTF Texarkana First Financial Corp 3.78 7.92 4.23 3.68 0.45 1.57
FTFC First Federal Capital Corp. 3.11 7.44 4.50 2.94 1.02 2.74
FTNB Fulton Bancorp Inc. 3.81 7.60 3.86 3.74 0.45 2.56
FTSB Fort Thomas Financial Corp. 4.11 8.49 4.49 4.01 0.32 2.35
FWWB First Washington Bancorp Inc. 3.68 7.82 4.29 3.54 0.30 1.93
GAF GA Financial Inc. 3.30 7.07 3.88 3.18 0.32 1.98
GBNK Gaston Federal Bancorp (MHC) NA NA NA NA NA NA
GDW Golden West Financial 2.45 7.51 5.14 2.38 0.22 0.86
GFCO Glenway Financial Corp. 3.22 7.54 4.43 3.12 0.3 1.97
GFED Guaranty Federal Bcshs Inc. 3.90 7.55 3.84 3.71 0.38 2.11
GLMR Gilmer Financial Svcs, Inc. 2.78 7.50 4.74 2.76 0.51 2.41
GOSB GSB Financial Corp. 4.07 6.59 2.67 3.92 0.19 2.88
GPT GreenPoint Financial Corp. 3.87 7.50 3.89 3.60 0.37 2.01
GSB Golden State Bancorp Inc. 2.82 6.98 4.33 2.65 0.60 1.80
GSFC Green Street Financial Corp. 4.33 7.45 3.16 4.29 0.07 1.80
GSLA GS Financial Corp. 4.78 7.11 2.50 4.61 0.02 2.47
GTPS Great American Bancorp 4.33 7.44 3.38 4.06 0.73 3.43
GUPB GFSB Bancorp Inc. 2.96 7.39 4.46 2.93 0.07 1.61
HALL Hallmark Capital Corp. 2.57 7.69 5.15 2.54 0.22 1.63
HARB Harbor Florida Bancshares Inc. 3.98 7.76 3.91 3.86 0.36 1.97
HARL Harleysville Savings Bank 2.64 7.35 4.76 2.58 0.12 1.24
HARS Harris Financial Inc. (MHC) 2.45 7.05 4.68 2.37 0.28 1.83
HAVN Haven Bancorp Inc. 2.88 6.97 4.25 2.72 0.93 2.81
HBBI Home Building Bancorp 3.54 7.56 4.14 3.43 0.25 2.50
HBEI Home Bancorp of Elgin Inc. 4.23 7.10 3.05 4.06 0.28 3.20
HBFW Home Bancorp 2.81 7.37 4.61 2.76 0.08 1.39
HBNK Highland Bancorp Inc. 4.37 8.87 4.81 4.06 0.35 1.74
HBS Haywood Bancshares Inc. 3.35 7.40 4.19 3.21 0.28 1.12
HBSC Heritage Bancorp Inc. NA NA NA NA NA NA
HCBB HCB Bancshares Inc. 3.23 7.28 4.18 3.11 0.29 2.85
HCBC High Country Bancorp Inc. 4.41 8.07 3.86 4.21 0.20 3.31
HCFC Home City Financial Corp. 4.40 8.63 4.33 4.30 0.10 2.47
HEMT HF Bancorp Inc. 2.54 7.32 4.85 2.46 0.29 2.29
HFBC HopFed Bancorp Inc. 2.46 5.94 3.52 2.43 0.21 0.93
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
------------------------- ----------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ----------------------------------------------- ------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 52.63 49.12 1.37 NA (2.81)
FFPB First Palm Beach Bancorp Inc. 75.17 70.76 5.86 (5.50) 5.87
FFSL First Independence Corp. 60.02 57.97 11.26 24.72 9.49
FFSX First Fed SB of Siouxland(MHC) 66.68 59.96 17.72 18.76 20.11
FFWC FFW Corp. 52.48 45.40 12.92 NA 7.87
FFWD Wood Bancorp Inc. 54.32 51.53 0.92 3.99 9.53
FFYF FFY Financial Corp. 48.96 45.52 8.76 4.64 (1.38)
FGHC First Georgia Holding Inc. 63.82 54.89 15.62 17.42 20.43
FIBC Financial Bancorp Inc. 51.29 47.30 20.71 NA 9.38
FISB First Indiana Corp. 56.22 48.13 15.13 15.44 11.56
FKAN First Kansas Financial Corp. NA NA NA NA NA
FKFS First Keystone Financial 65.56 62.49 22.41 8.74 6.32
FKKY Frankfort First Bancorp Inc. 41.98 41.12 1.85 4.50 (4.73)
FLAG FLAG Financial Corp. 78.56 71.73 99.56 104.03 88.06
FLFC First Liberty Financial Corp. 58.13 47.63 8.57 6.15 11.25
FLGS Flagstar Bancorp Inc. 47.53 (52.72) 61.20 58.37 52.03
FLKY First Lancaster Bancshares 58.07 58.07 31.04 36.26 11.17
FMBD First Mutual Bancorp Inc. 77.39 74.16 (9.14) (1.01) (4.69)
FMCO FMS Financial Corp. 59.94 55.29 21.40 (2.01) 9.29
FMSB First Mutual Savings Bank 61.31 57.68 8.99 14.12 15.85
FNGB First Northern Capital Corp. 57.92 51.58 8.26 7.44 6.26
FOBC Fed One Bancorp 59.19 56.70 4.80 7.20 1.52
FPRY First Financial Bancorp 77.74 74.01 10.78 25.03 10.52
FSBI Fidelity Bancorp Inc. 60.34 56.80 22.88 27.40 12.08
FSFF First SecurityFed Financial NA NA NA NA NA
FSLA First Source Bancorp Inc. 45.71 41.73 18.22 17.98 (0.93)
FSNJ Bayonne Bancshares Inc. 57.29 53.97 16.29 35.97 (4.76)
FSPT FirstSpartan Financial Corp. 44.07 38.48 (22.24) 16.33 4.71
FSSB First FS&LA of San Bernardino 98.33 97.87 0.37 11.00 1.86
FSTC First Citizens Corp. NA NA NA NA NA
FTF Texarkana First Financial Corp 38.03 30.38 10.62 4.02 8.08
FTFC First Federal Capital Corp. 67.70 56.55 0.79 (15.84) 18.49
FTNB Fulton Bancorp Inc. 60.27 55.51 10.21 6.69 3.65
FTSB Fort Thomas Financial Corp. 54.42 50.80 7.31 8.40 9.16
FWWB First Washington Bancorp Inc. 48.12 43.64 14.53 17.18 8.55
GAF GA Financial Inc. 56.05 51.68 11.81 15.59 3.50
GBNK Gaston Federal Bancorp (MHC) NA NA NA NA NA
GDW Golden West Financial 33.19 27.08 (0.07) (13.11) 3.98
GFCO Glenway Financial Corp. 56.07 51.78 6.99 10.62 (0.87)
GFED Guaranty Federal Bcshs Inc. 51.73 46.75 30.37 30.00 (6.79)
GLMR Gilmer Financial Svcs, Inc. 73.93 69.11 7.89 14.84 14.24
GOSB GSB Financial Corp. 70.07 68.63 (16.53) NA (11.62)
GPT GreenPoint Financial Corp. 42.57 36.72 (3.35) 10.69 (3.23)
GSB Golden State Bancorp Inc. 54.40 44.06 11.71 15.43 14.34
GSFC Green Street Financial Corp. 41.30 40.35 (0.77) 3.20 1.63
GSLA GS Financial Corp. 53.24 53.02 (4.39) 23.40 (46.68)
GTPS Great American Bancorp 71.90 66.87 8.30 22.58 10.29
GUPB GFSB Bancorp Inc. 53.64 52.50 35.97 53.87 21.50
HALL Hallmark Capital Corp. 59.23 55.71 4.49 3.62 (3.51)
HARB Harbor Florida Bancshares Inc. 46.32 41.26 18.10 11.75 1.13
HARL Harleysville Savings Bank 45.75 43.13 17.44 4.64 5.75
HARS Harris Financial Inc. (MHC) 66.12 62.14 13.76 7.09 (1.85)
HAVN Haven Bancorp Inc. 76.52 68.49 27.15 39.25 26.42
HBBI Home Building Bancorp 68.18 65.89 (4.79) 1.69 (7.69)
HBEI Home Bancorp of Elgin Inc. 74.15 72.35 4.28 14.30 7.31
HBFW Home Bancorp 49.00 47.46 7.59 16.70 6.51
HBNK Highland Bancorp Inc. 38.06 32.78 13.69 12.49 5.07
HBS Haywood Bancshares Inc. 55.75 51.86 3.88 3.51 2.97
HBSC Heritage Bancorp Inc. NA NA NA NA NA
HCBB HCB Bancshares Inc. 82.08 80.37 22.84 10.24 (8.91)
HCBC High Country Bancorp Inc. 75.02 73.84 NA NA NA
HCFC Home City Financial Corp. 56.23 55.24 11.55 25.47 14.18
HEMT HF Bancorp Inc. 71.36 67.99 6.20 NA 3.22
HFBC HopFed Bancorp Inc. 35.44 29.97 7.58 6.53 (13.72)
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
-----------------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ------------------------------------------ --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 86.42 16.00 19.875 14.500 11.790 10.49
FFPB First Palm Beach Bancorp Inc. 204.55 43.50 44.938 30.250 23.520 23.04
FFSL First Independence Corp. 11.25 13.63 15.625 11.500 12.340 12.34
FFSX First Fed SB of Siouxland(MHC) 85.20 36.00 39.000 22.000 14.800 11.93
FFWC FFW Corp. 26.97 17.38 21.500 13.063 13.120 12.07
FFWD Wood Bancorp Inc. 43.28 20.00 27.000 8.466 8.180 8.18
FFYF FFY Financial Corp. 144.65 32.50 35.375 25.500 21.000 21.00
FGHC First Georgia Holding Inc. 57.59 10.50 10.500 4.667 3.070 2.87
FIBC Financial Bancorp Inc. 62.29 32.25 32.250 18.125 16.830 16.76
FISB First Indiana Corp. 292.76 26.13 30.000 17.083 12.540 12.41
FKAN First Kansas Financial Corp. 16.90 12.25 NA NA 13.460 13.29
FKFS First Keystone Financial 34.69 18.25 19.000 10.625 10.650 10.65
FKKY Frankfort First Bancorp Inc. 23.58 15.50 22.938 14.875 14.020 14.02
FLAG FLAG Financial Corp. 84.75 16.63 18.500 9.333 7.460 7.46
FLFC First Liberty Financial Corp. 274.90 22.33 22.917 14.000 8.570 7.84
FLGS Flagstar Bancorp Inc. 369.09 24.38 28.375 16.000 10.440 10.16
FLKY First Lancaster Bancshares 13.66 15.25 16.375 14.625 14.920 14.92
FMBD First Mutual Bancorp Inc. 60.68 17.75 25.000 15.000 15.720 12.24
FMCO FMS Financial Corp. 90.25 14.17 16.667 7.833 5.690 5.65
FMSB First Mutual Savings Bank 61.54 17.63 20.167 11.500 8.020 8.02
FNGB First Northern Capital Corp. 112.95 13.38 14.000 11.000 8.490 8.49
FOBC Fed One Bancorp 93.66 45.50 45.500 20.000 17.980 17.30
FPRY First Financial Bancorp NA 20.75 21.125 17.250 17.070 17.07
FSBI Fidelity Bancorp Inc. 39.36 25.30 25.600 14.727 14.020 14.02
FSFF First SecurityFed Financial 97.72 15.50 NA NA 14.59 14.55
FSLA First Source Bancorp Inc. 283.69 9.69 13.927 6.330 8.170 7.91
FSNJ Bayonne Bancshares Inc. 135.85 15.75 17.375 9.206 10.550 10.55
FSPT FirstSpartan Financial Corp. 159.49 41.50 47.250 35.000 29.570 29.57
FSSB First FS&LA of San Bernardino 3.16 9.75 11.500 9.000 13.680 13.18
FSTC First Citizens Corp. 83.22 31.88 NA NA 13.560 11.13
FTF Texarkana First Financial Corp 46.05 28.38 30.625 19.625 16.230 16.23
FTFC First Federal Capital Corp. 294.21 17.938 18.250 11.500 6.420 6.11
FTNB Fulton Bancorp Inc. 30.59 22.00 26.500 17.500 15.060 15.06
FTSB Fort Thomas Financial Corp. 20.27 15.06 15.625 9.250 10.870 10.87
FWWB First Washington Bancorp Inc. 269.08 23.92 25.966 17.045 14.780 13.70
GAF GA Financial Inc. 111.01 18.38 22.250 16.500 14.940 14.80
GBNK Gaston Federal Bancorp (MHC) 59.30 15.25 NA NA 9.140 9.14
GDW Golden West Financial 4,736.86 106.31 114.250 71.813 50.760 50.76
GFCO Glenway Financial Corp. 51.66 20.00 21.25 10.25 12.6 12.49
GFED Guaranty Federal Bcshs Inc. 78.63 12.94 14.436 8.674 12.010 12.01
GLMR Gilmer Financial Svcs, Inc. 2.70 11.00 12.000 10.000 19.880 19.88
GOSB GSB Financial Corp. 30.63 17.00 18.938 14.250 14.300 14.30
GPT GreenPoint Financial Corp. 3,418.95 37.63 42.063 29.344 17.650 9.98
GSB Golden State Bancorp Inc. 1,303.90 29.75 41.813 26.750 20.240 16.99
GSFC Green Street Financial Corp. 57.17 14.75 20.750 14.500 14.810 14.81
GSLA GS Financial Corp. 44.10 20.63 21.000 13.375 16.080 16.08
GTPS Great American Bancorp 33.95 21.75 23.000 16.500 17.070 17.07
GUPB GFSB Bancorp Inc. 17.11 15.00 15.000 11.417 12.140 12.14
HALL Hallmark Capital Corp. 41.44 14.00 18.000 10.500 12.040 12.04
HARB Harbor Florida Bancshares Inc. 372.72 11.94 12.813 7.197 8.410 8.32
HARL Harleysville Savings Bank 50.26 32.25 35.000 21.750 15.140 15.14
HARS Harris Financial Inc. (MHC) 613.51 22.00 27.875 7.083 5.560 5.03
HAVN Haven Bancorp Inc. 181.41 25.63 28.750 17.813 13.330 12.74
HBBI Home Building Bancorp 7.48 21.25 23.750 18.500 20.610 20.61
HBEI Home Bancorp of Elgin Inc. 101.12 15.50 19.313 15.063 14.000 14.00
HBFW Home Bancorp 66.71 29.38 37.625 20.5 18.27 18.27
HBNK Highland Bancorp Inc. 96.67 41.00 43.500 25.000 19.360 19.36
HBS Haywood Bancshares Inc. 25.63 22.50 23.000 15.625 18.050 17.48
HBSC Heritage Bancorp Inc. 85.05 NA NA NA NA NA
HCBB HCB Bancshares Inc. 34.72 14.75 15.250 12.625 14.450 14.28
HCBC High Country Bancorp Inc. 17.85 15.25 15.5 14.438 13.65 13.65
HCFC Home City Financial Corp. 13.34 15.00 22.750 13.750 11.970 11.97
HEMT HF Bancorp Inc. 106.68 17.69 18.250 13.875 13.150 11.25
HFBC HopFed Bancorp Inc. 69.58 18.88 21.875 16.000 14.460 14.46
</TABLE>
<PAGE> 118
Page 20 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
-------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------ -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 3.64 7.16 3.58 3.58 0.10 1.54
HFFC HF Financial Corp. 3.80 8.03 4.42 3.61 2.14 3.47
HFGI Harrington Financial Group 0.94 6.30 5.39 0.91 0.05 1.18
HFNC HFNC Financial Corp. 3.29 7.62 4.42 3.20 0.11 1.65
HFSA Hardin Bancorp Inc. 2.65 7.17 4.56 2.60 0.29 1.88
HFWA Heritage Financial Corp. NA NA NA NA NA NA
HHFC Harvest Home Financial Corp. 2.56 7.04 4.52 2.52 0.06 1.67
HIFS Hingham Instit. for Savings 3.98 7.77 3.91 3.85 0.29 2.04
HLFC Home Loan Financial Corp. 4.78 7.55 2.96 4.59 0.25 2.71
HMLK Hemlock Federal Financial Corp 3.55 6.95 3.45 3.50 0.35 2.20
HMNF HMN Financial Inc. 2.59 7.02 4.51 2.51 0.19 1.74
HOMF Home Federal Bancorp 3.62 7.82 4.38 3.44 0.85 2.19
HPBC Home Port Bancorp Inc. 4.47 7.88 3.57 4.31 0.44 2.18
HRBF Harbor Federal Bancorp Inc. 3.02 7.40 4.44 2.96 0.18 1.86
HRBT Hudson River Bancorp 4.66 8.38 3.93 4.45 0.41 2.88
HRZB Horizon Financial Corp. 3.62 7.79 4.24 3.56 0.33 1.45
HSTD Homestead Bancorp Inc. 3.11 7.26 4.21 3.05 0.37 2.82
HTHR Hawthorne Financial Corp. 3.87 8.89 5.14 3.75 0.41 2.43
HWEN Home Financial Bancorp 4.65 8.73 4.29 4.44 0.32 3.44
HZFS Horizon Financial Svcs Corp. 3.20 7.58 4.50 3.08 0.51 2.28
IBSF IBS Financial Corp. 3.06 6.97 3.97 2.99 0.14 1.89
ICBC Independence Comm. Bank Corp. NA NA NA NA NA NA
IFSB Independence Federal Svgs Bank 2.50 7.16 4.78 2.39 1.10 3.05
INBI Industrial Bancorp Inc. 3.96 8.06 4.17 3.89 0.16 1.75
IPSW Ipswich Savings Bank 3.41 7.07 3.81 3.26 0.99 2.33
ITLA ITLA Capital Corp. 4.89 10.01 5.15 4.86 0.26 2.12
IWBK InterWest Bancorp Inc. 3.37 7.57 4.40 3.17 0.60 2.41
JSB JSB Financial Inc. 4.84 7.09 2.56 4.53 0.36 1.15
JSBA Jefferson Savings Bancorp 3.02 7.54 4.62 2.93 0.19 1.90
JXSB Jacksonville Savings Bk (MHC) 3.56 7.62 4.31 3.31 0.43 2.88
JXVL Jacksonville Bancorp Inc. 3.73 7.63 3.99 3.64 0.57 2.31
KFBI Klamath First Bancorp 3.36 7.01 3.80 3.20 0.27 1.94
KNK Kankakee Bancorp Inc. 3.18 7.10 4.09 3.00 0.53 2.47
KSAV KS Bancorp Inc. 3.86 7.80 4.12 3.68 0.11 2.01
KSBK KSB Bancorp Inc. 4.58 8.35 3.92 4.43 0.81 3.19
KYF Kentucky First Bancorp Inc. 3.48 7.27 3.87 3.40 0.19 1.92
LARK Landmark Bancshares Inc. 3.14 7.51 4.44 3.07 0.27 1.75
LARL Laurel Capital Group Inc. 3.58 7.28 3.73 3.55 0.35 1.73
LFBI Little Falls Bancorp Inc. 2.67 6.78 4.20 2.58 0.08 1.71
LFCO Life Financial Corp. 4.22 9.22 5.50 3.72 9.39 5.80
LFED Leeds Federal Bankshares (MHC) 2.93 7.02 4.16 2.86 0.11 1.08
LIBB Liberty Bancorp Inc. (MHC) 2.92 7.13 4.25 2.87 0.19 1.88
LISB Long Island Bancorp Inc. 2.69 6.84 4.27 2.58 0.44 1.69
LO Local Financial Corp. NA NA NA NA NA NA
LOGN Logansport Financial Corp. 3.79 7.44 3.81 3.63 0.24 1.43
LONF London Financial Corp. 3.73 7.66 3.97 3.69 0.18 2.34
LSBI LSB Financial Corp. 3.51 7.77 4.45 3.32 0.40 2.45
LSBX Lawrence Savings Bank 3.28 7.21 4.03 3.18 0.36 2.34
LVSB Lakeview Financial Corp. 3.44 6.98 3.68 3.30 0.66 2.31
LXMO Lexington B&L Financial Corp. 3.90 7.91 4.17 3.74 0.37 2.91
MAFB MAF Bancorp Inc. 2.89 7.11 4.35 2.76 0.47 1.49
MARN Marion Capital Holdings 4.28 7.69 3.81 3.89 0.32 2.47
MASB MASSBANK Corp. 2.88 6.59 3.76 2.83 0.20 1.37
MBBC Monterey Bay Bancorp Inc. 2.89 7.14 4.37 2.76 0.40 2.41
MBLF MBLA Financial Corp. 2.15 7.04 4.92 2.13 0.00 0.71
MBSP Mitchell Bancorp Inc. 4.92 7.88 3.02 4.86 0.01 2.69
MCBN Mid-Coast Bancorp Inc. 3.99 8.07 4.31 3.77 0.41 2.97
MDBK Medford Bancorp Inc. 3.23 6.93 3.83 3.10 0.25 1.68
MECH MECH Financial Inc. 3.61 6.98 3.58 3.40 0.84 2.51
METF Metropolitan Financial Corp. 3.42 8.23 5.01 3.22 0.42 2.39
MFBC MFB Corp. 3.23 7.53 4.38 3.16 0.20 2.03
MFFC Milton Federal Financial Corp. 2.76 7.26 4.58 2.69 0.14 1.88
MFLR Mayflower Co-operative Bank 3.97 7.43 3.71 3.72 0.38 2.42
MFSL Maryland Federal Bancorp 2.69 7.21 4.58 2.63 0.26 1.62
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
----------------------------- ------------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------- ----------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 41.89 40.30 0.08 3.86 0.15
HFFC HF Financial Corp. 59.50 35.45 1.41 (1.05) 6.75
HFGI Harrington Financial Group 121.92 123.23 8.42 74.05 30.94
HFNC HFNC Financial Corp. 50.79 49.03 12.88 22.15 (3.01)
HFSA Hardin Bancorp Inc. 65.15 61.27 23.43 17.66 6.53
HFWA Heritage Financial Corp. NA NA NA NA NA
HHFC Harvest Home Financial Corp. 64.66 63.76 9.36 2.75 4.14
HIFS Hingham Instit. for Savings 49.16 45.35 9.91 10.77 7.76
HLFC Home Loan Financial Corp. 56.09 53.71 35.62 NA (1.42)
HMLK Hemlock Federal Financial Corp 57.27 52.96 16.13 51.73 1.97
HMNF HMN Financial Inc. 63.85 61.04 27.93 34.84 27.85
HOMF Home Federal Bancorp 51.70 39.77 5.38 2.58 3.07
HPBC Home Port Bancorp Inc. 45.87 40.31 31.05 34.86 31.22
HRBF Harbor Federal Bancorp Inc. 59.41 56.98 5.32 2.28 0.84
HRBT Hudson River Bancorp 57.28 53.31 3.10 3.07 4.20
HRZB Horizon Financial Corp. 37.31 31.55 6.63 9.21 5.39
HSTD Homestead Bancorp Inc. 81.21 78.93 2.90 14.28 (7.40)
HTHR Hawthorne Financial Corp. 60.60 56.31 24.93 35.51 19.88
HWEN Home Financial Bancorp 71.66 69.60 0.12 (0.20) 1.88
HZFS Horizon Financial Svcs Corp. 63.19 57.12 18.30 7.84 4.70
IBSF IBS Financial Corp. 60.47 58.66 0.59 19.34 (0.92)
ICBC Independence Comm. Bank Corp. NA NA NA NA NA
IFSB Independence Federal Svgs Bank 83.52 75.91 4.49 2.07 2.52
INBI Industrial Bancorp Inc. 43.18 40.80 10.46 11.47 6.44
IPSW Ipswich Savings Bank 55.23 41.58 23.38 33.20 15.04
ITLA ITLA Capital Corp. 40.11 36.96 20.13 23.38 22.62
IWBK InterWest Bancorp Inc. 62.07 54.86 28.30 30.83 26.47
JSB JSB Financial Inc. 36.38 31.30 2.11 20.80 (0.97)
JSBA Jefferson Savings Bancorp 56.45 53.65 (4.25) (7.85) (3.16)
JXSB Jacksonville Savings Bk (MHC) 77.07 74.11 3.55 1.07 3.46
JXVL Jacksonville Bancorp Inc. 56.35 49.46 7.29 NA 7.17
KFBI Klamath First Bancorp 51.29 47.23 38.57 20.59 63.20
KNK Kankakee Bancorp Inc. 67.68 61.95 17.64 6.67 21.46
KSAV KS Bancorp Inc. 52.79 51.36 13.03 16.52 9.68
KSBK KSB Bancorp Inc. 59.51 52.13 8.13 16.67 16.98
KYF Kentucky First Bancorp Inc. 53.56 50.93 (8.01) 0.87 3.03
LARK Landmark Bancshares Inc. 52.22 48.06 0.54 11.66 3.29
LARL Laurel Capital Group Inc. 44.38 38.89 4.25 4.16 0.21
LFBI Little Falls Bancorp Inc. 59.95 58.75 17.16 21.51 2.77
LFCO Life Financial Corp. 43.74 (98.24) 141.92 171.30 92.72
LFED Leeds Federal Bankshares (MHC) 36.28 33.84 6.07 8.29 5.53
LIBB Liberty Bancorp Inc. (MHC) 61.41 58.87 7.87 16.54 7.39
LISB Long Island Bancorp Inc. 55.62 47.99 9.73 3.44 (0.76)
LO Local Financial Corp. NA NA NA NA NA
LOGN Logansport Financial Corp. 37.17 32.94 8.55 12.68 6.65
LONF London Financial Corp. 60.61 58.70 1.62 3.80 6.52
LSBI LSB Financial Corp. 65.74 61.57 12.63 NA 12.74
LSBX Lawrence Savings Bank 65.60 61.70 (5.85) 14.62 3.08
LVSB Lakeview Financial Corp. 50.07 40.07 28.65 34.21 21.14
LXMO Lexington B&L Financial Corp. 69.06 65.97 60.88 38.81 82.38
MAFB MAF Bancorp Inc. 49.50 40.92 7.47 10.90 2.25
MARN Marion Capital Holdings 52.89 48.96 11.92 10.99 10.38
MASB MASSBANK Corp. 44.20 40.32 2.68 12.55 1.28
MBBC Monterey Bay Bancorp Inc. 70.16 65.85 5.66 (2.02) 14.58
MBLF MBLA Financial Corp. 33.24 33.11 (1.11) 14.58 15.53
MBSP Mitchell Bancorp Inc. 55.28 55.18 12.85 (2.37) 22.02
MCBN Mid-Coast Bancorp Inc. 70.73 67.57 6.94 3.19 7.09
MDBK Medford Bancorp Inc. 46.95 42.67 5.85 1.09 1.07
MECH MECH Financial Inc. 59.79 49.83 15.92 10.27 3.83
METF Metropolitan Financial Corp. 64.63 59.97 28.93 22.55 21.69
MFBC MFB Corp. 60.52 57.98 17.20 27.85 4.82
MFFC Milton Federal Financial Corp. 67.01 65.30 17.41 32.97 10.31
MFLR Mayflower Co-operative Bank 58.22 53.96 8.69 4.33 4.56
MFSL Maryland Federal Bancorp 55.30 50.90 2.65 (3.84) 3.14
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
------------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 29.62 16.00 18.000 14.750 16.180 16.18
HFFC HF Financial Corp. 93.40 22.88 24.167 14.167 12.880 12.88
HFGI Harrington Financial Group 34.40 11.25 13.750 10.750 6.920 6.92
HFNC HFNC Financial Corp. 202.01 11.25 17.125 11.250 9.940 9.94
HFSA Hardin Bancorp Inc. 13.88 19.25 20.000 15.000 16.510 16.51
HFWA Heritage Financial Corp. 124.48 15.25 NA NA 9.530 9.53
HHFC Harvest Home Financial Corp. 11.81 15.00 15.750 10.250 11.570 11.57
HIFS Hingham Instit. for Savings 34.22 30.25 37.000 21.000 17.290 17.29
HLFC Home Loan Financial Corp. 32.60 14.75 16.750 14.000 14.040 14.04
HMLK Hemlock Federal Financial Corp 31.65 19.00 19.000 12.500 15.460 15.46
HMNF HMN Financial Inc. 78.06 15.88 21.667 14.917 13.040 11.97
HOMF Home Federal Bancorp 134.90 30.25 33.75 18.833 13.03 12.7
HPBC Home Port Bancorp Inc. 44.67 25.00 27.625 19.250 12.320 12.32
HRBF Harbor Federal Bancorp Inc. 34.00 22.73 22.955 14.091 15.750 15.75
HRBT Hudson River Bancorp 216.48 NA NA NA NA NA
HRZB Horizon Financial Corp. 112.32 16.00 19.250 14.875 11.400 11.40
HSTD Homestead Bancorp Inc. 12.14 4.05 6.388 3.833 NA NA
HTHR Hawthorne Financial Corp. 90.13 19.75 24.000 9.250 14.070 14.07
HWEN Home Financial Bancorp 7.32 9.00 9.750 7.438 8.080 8.08
HZFS Horizon Financial Svcs Corp. 13.09 15.75 16.750 8.500 9.600 9.60
IBSF IBS Financial Corp. 177.62 19.00 21.188 15.375 12.000 12.00
ICBC Independence Comm. Bank Corp. 1,045.60 17.00 NA NA 12.630 11.92
IFSB Independence Federal Svgs Bank 20.50 19.63 19.625 7.5 15.46 13.99
INBI Industrial Bancorp Inc. 96.54 19.00 25.000 13.625 12.190 12.19
IPSW Ipswich Savings Bank 35.85 17.38 20.750 7.875 5.460 5.46
ITLA ITLA Capital Corp. 153.94 20.75 24.000 15.750 13.850 NA
IWBK InterWest Bancorp Inc. 420.42 43.38 47.000 37.000 16.080 15.59
JSB JSB Financial Inc. 507.46 58.56 58.563 41.000 38.650 38.65
JSBA Jefferson Savings Bancorp 234.26 30.25 30.250 13.875 12.740 10.22
JXSB Jacksonville Savings Bk (MHC) 31.01 23.25 24.750 10.667 9.230 9.23
JXVL Jacksonville Bancorp Inc. 43.14 18.50 23.250 14.750 14.480 14.48
KFBI Klamath First Bancorp 168.59 19.06 24.250 18.625 16.020 14.67
KNK Kankakee Bancorp Inc. 42.61 33.00 37.750 29.000 28.430 24.29
KSAV KS Bancorp Inc. NA 24.75 25.500 14.813 16.500 16.50
KSBK KSB Bancorp Inc. 20.77 17.50 22.500 12.500 9.970 8.76
KYF Kentucky First Bancorp Inc. 17.69 14.00 15.000 10.563 11.240 11.24
LARK Landmark Bancshares Inc. 34.18 26.75 29.250 20.000 19.340 19.34
LARL Laurel Capital Group Inc. 41.64 19.75 23.500 14.000 10.730 10.73
LFBI Little Falls Bancorp Inc. 39.64 20.00 20.500 12.750 14.630 13.51
LFCO Life Financial Corp. 75.39 18.25 25.375 10.750 9.110 9.11
LFED Leeds Federal Bankshares (MHC) 88.10 22.25 23.500 11.833 9.520 9.52
LIBB Liberty Bancorp Inc. (MHC) 38.53 NA NA NA NA NA
LISB Long Island Bancorp Inc. 1,257.51 60.75 67.625 35.188 23.880 23.68
LO Local Financial Corp. 229.77 13.00 NA NA 5.010 4.63
LOGN Logansport Financial Corp. 18.92 16.50 19.625 13.250 13.460 13.46
LONF London Financial Corp. 7.78 16.75 21.000 14.000 10.230 10.23
LSBI LSB Financial Corp. 30.04 30.75 31.429 19.286 20.460 20.46
LSBX Lawrence Savings Bank 61.93 15.56 19.313 10.938 9.620 9.62
LVSB Lakeview Financial Corp. 109.51 23.25 26.563 13.625 12.110 8.26
LXMO Lexington B&L Financial Corp. 15.13 16.13 17.875 15.750 15.170 14.15
MAFB MAF Bancorp Inc. 502.33 24.25 28.833 18.278 12.400 11.07
MARN Marion Capital Holdings 38.77 28.50 29.500 22.000 22.090 21.62
MASB MASSBANK Corp. 170.65 49.00 54.250 35.625 30.440 30.04
MBBC Monterey Bay Bancorp Inc. 64.73 14.80 21.400 12.800 12.790 11.71
MBLF MBLA Financial Corp. 25.10 27.38 30.625 20.25 22.38 22.38
MBSP Mitchell Bancorp Inc. 16.06 16.50 18.000 16.375 15.720 15.72
MCBN Mid-Coast Bancorp Inc. 7.12 13.83 13.833 6.167 7.500 7.50
MDBK Medford Bancorp Inc. 178.19 41.00 44.250 29.250 22.780 21.62
MECH MECH Financial Inc. 148.27 29.00 31.500 18.875 17.510 17.51
METF Metropolitan Financial Corp. 89.90 14.88 18.875 7.750 5.610 5.20
MFBC MFB Corp. 37.77 24.00 30.375 19.000 20.810 20.81
MFFC Milton Federal Financial Corp. 29.08 15.00 17.000 13.625 12.580 12.58
MFLR Mayflower Co-operative Bank 20.69 26.50 27.500 15.750 14.410 14.20
MFSL Maryland Federal Bancorp 263.16 39.00 40.000 19.250 16.340 16.20
</TABLE>
<PAGE> 119
Page 21 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
--------------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ----------------------------------------- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 2.89 7.16 4.40 2.76 0.96 2.20
MIVI Mississippi View Holding Co. 3.91 7.48 3.62 3.85 0.25 2.35
MONT Montgomery Financial Corp. 3.58 7.80 4.36 3.44 0.03 2.03
MRKF Market Financial Corp. 3.95 6.90 3.00 3.91 0.01 2.27
MSBF MSB Financial Inc. 4.78 8.37 3.78 4.59 0.51 2.87
MSBK Mutual Savings Bank FSB 1.84 6.49 4.71 1.78 0.47 2.20
MWBI Midwest Bancshares Inc. 2.80 7.32 4.62 2.70 0.23 1.78
MWBX MetroWest Bank 4.09 7.75 3.84 3.92 0.35 2.64
MYST Mystic Financial Inc. 4.04 7.13 3.30 3.83 0.45 2.79
NASB NASB Financial Inc. 3.62 8.41 4.88 3.53 0.82 2.04
NBCP Niagara Bancorp Inc. (MHC) 3.37 7.16 3.92 3.24 0.54 2.23
NBN Northeast Bancorp 4.03 8.28 4.38 3.89 0.63 3.15
NBSI North Bancshares Inc. 3.03 7.16 4.18 2.98 0.21 2.60
NEIB Northeast Indiana Bancorp 3.57 7.99 4.47 3.51 0.33 1.73
NEP Northeast PA Financial Corp. NA NA NA NA NA NA
NHTB New Hampshire Thrift Bncshrs 3.78 7.49 3.98 3.51 0.71 2.78
NMSB NewMil Bancorp Inc. 3.78 7.23 3.58 3.65 0.45 2.80
NSLB NS&L Bancorp Inc. 3.29 6.73 3.53 3.20 0.61 2.68
NSSY NSS Bancorp Inc. 3.12 7.11 4.09 3.02 0.60 2.45
NTBK Net.B@nk Inc. 3.09 6.88 3.82 3.05 0.29 8.70
NTMG Nutmeg Federal S&LA 4.18 7.20 3.25 3.95 1.29 4.02
NWEQ Northwest Equity Corp. 3.88 8.00 4.34 3.66 0.63 2.46
NWSB Northwest Bancorp Inc. (MHC) 3.67 7.72 4.20 3.52 0.32 2.19
OCFC Ocean Financial Corp. 3.03 6.99 4.06 2.93 0.18 1.62
OCN Ocwen Financial Corp. 4.43 9.05 5.32 3.73 1.69 4.54
OFCP Ottawa Financial Corp. 3.32 7.46 4.37 3.08 0.47 2.20
OHSL OHSL Financial Corp. 3.07 7.59 4.59 3.00 0.18 1.94
OSFS Ohio State Financial Services 3.85 7.10 3.35 3.76 0.12 2.39
OTFC Oregon Trail Financial Corp. 4.05 6.61 2.65 3.95 0.35 2.40
PBCI Pamrapo Bancorp Inc. 4.64 7.62 3.23 4.38 0.37 2.79
PBCT People's Bank (MHC) 3.47 6.59 3.41 3.18 2.64 4.25
PBHC Pathfinder Bancorp Inc. (MHC) 4.05 7.36 3.64 3.72 0.45 3.23
PBKB People's Bancshares Inc. 2.70 7.12 4.52 2.60 0.24 2.31
PBOC PBOC Holdings Inc. NA NA NA NA NA NA
PCBC Perry County Financial Corp. 2.78 6.88 4.13 2.74 0.04 1.09
PDB Piedmont Bancorp Inc. 4.00 7.93 4.03 3.90 0.32 2.21
PEDE Great Pee Dee Bancorp NA NA NA NA NA NA
PEEK Peekskill Financial Corp. 3.55 6.71 3.20 3.51 0.12 1.81
PERM Permanent Bancorp Inc. 2.74 7.15 4.53 2.62 0.45 2.01
PFDC Peoples Bancorp 3.70 7.70 4.05 3.65 0.24 1.53
PFED Park Bancorp Inc. 3.55 7.11 3.69 3.41 0.12 2.07
PFFB PFF Bancorp Inc. 2.73 7.08 4.45 2.64 0.47 1.91
PFFC Peoples Financial Corp. 3.60 7.37 3.85 3.51 0.03 2.56
PFNC Progress Financial Corp. 4.55 8.22 3.95 4.27 1.41 4.25
PFSB PennFed Financial Services Inc 2.38 7.04 4.75 2.29 0.16 1.23
PFSL Pocahontas Bancorp Inc. 2.29 7.04 4.81 2.23 0.33 1.49
PHBK Peoples Heritage Finl Group 4.36 7.52 3.54 3.98 1.05 3.07
PHFC Pittsburgh Home Financial Corp 2.61 7.34 4.82 2.52 0.20 1.62
PHSB Peoples Home Savings Bk (MHC) 3.55 7.15 3.71 3.44 0.36 2.77
PLSK Pulaski Savings Bank (MHC) 3.14 7.23 4.18 3.05 0.11 2.15
PRBC Prestige Bancorp Inc. 3.10 7.02 4.01 3.01 0.27 2.44
PROV Provident Financial Holdings 2.98 6.99 4.11 2.89 0.65 2.78
PSBI PSB Bancorp Inc. 3.53 7.09 3.67 3.41 0.56 3.27
PSFC Peoples-Sidney Financial Corp. 3.96 7.74 3.85 3.89 0.06 2.00
PSFI PS Financial Inc. 4.81 7.46 2.75 4.71 0.09 1.46
PTRS Potters Financial Corp. 3.35 7.22 3.99 3.23 0.30 2.48
PULB Pulaski Bank, FSB (MHC) 3.73 7.55 3.90 3.64 0.36 2.49
PULS Pulse Bancorp 2.65 6.95 4.36 2.59 0.08 1.05
PVFC PVF Capital Corp. 3.89 8.70 4.84 3.86 0.30 2.17
PVSA Parkvale Financial Corp. 2.97 7.17 4.28 2.89 0.25 1.42
PWBK Pennwood Bancorp Inc. 4.42 7.92 3.75 4.17 0.34 2.99
QCBC Quaker City Bancorp Inc. 3.10 7.62 4.60 3.03 0.37 1.85
QCFB QCF Bancorp Inc. 4.20 7.22 3.11 4.12 0.38 1.82
QCSB Queens County Bancorp Inc. 4.36 8.16 3.97 4.20 0.15 1.74
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
------------------------- ------------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ----------------------------------------- ------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 59.00 44.79 7.57 NA 3.02
MIVI Mississippi View Holding Co. 57.68 54.88 (2.43) 1.39 (2.62)
MONT Montgomery Financial Corp. 59.51 59.11 16.56 17.61 7.65
MRKF Market Financial Corp. 57.81 57.66 (5.17) 26.47 2.81
MSBF MSB Financial Inc. 56.59 51.77 7.05 6.59 2.66
MSBK Mutual Savings Bank FSB 97.80 97.22 (8.85) 10.90 2.61
MWBI Midwest Bancshares Inc. 60.00 56.52 8.82 8.34 (0.92)
MWBX MetroWest Bank 61.18 57.69 16.23 4.89 17.44
MYST Mystic Financial Inc. 65.09 60.97 33.01 19.07 11.96
NASB NASB Financial Inc. 47.31 35.08 (0.62) (2.16) 6.96
NBCP Niagara Bancorp Inc. (MHC) 59.16 52.39 17.88 5.95 16.02
NBN Northeast Bancorp 67.26 61.94 25.49 36.72 12.48
NBSI North Bancshares Inc. 81.51 80.20 3.11 (2.34) 1.69
NEIB Northeast Indiana Bancorp 45.16 40.07 15.29 14.26 39.12
NEP Northeast PA Financial Corp. NA NA NA NA NA
NHTB New Hampshire Thrift Bncshrs 63.93 56.66 2.87 (2.64) 4.52
NMSB NewMil Bancorp Inc. 70.18 66.55 13.78 (2.18) 6.71
NSLB NS&L Bancorp Inc. 70.28 64.65 4.92 10.29 9.24
NSSY NSS Bancorp Inc. 66.46 59.76 8.31 (1.01) 8.18
NTBK Net.B@nk Inc. 260.63 275.76 NM 0.00 NM
NTMG Nutmeg Federal S&LA 74.95 66.79 19.11 11.14 18.22
NWEQ Northwest Equity Corp. 56.16 48.57 (0.45) 0.85 (2.12)
NWSB Northwest Bancorp Inc. (MHC) 54.84 50.77 21.81 24.06 22.34
OCFC Ocean Financial Corp. 52.84 50.00 6.22 20.25 5.45
OCN Ocwen Financial Corp. 94.66 92.23 25.79 NA (2.47)
OFCP Ottawa Financial Corp. 58.21 51.85 6.58 7.22 4.39
OHSL OHSL Financial Corp. 61.08 58.80 7.75 1.44 6.91
OSFS Ohio State Financial Services 61.92 60.72 12.17 (2.73) (5.90)
OTFC Oregon Trail Financial Corp. 55.79 51.90 NA NA NA
PBCI Pamrapo Bancorp Inc. 57.07 53.45 6.28 9.02 6.53
PBCT People's Bank (MHC) 71.41 47.69 15.70 9.19 18.91
PBHC Pathfinder Bancorp Inc. (MHC) 73.51 70.33 3.77 16.35 (0.64)
PBKB People's Bancshares Inc. 79.44 77.51 46.56 82.11 17.20
PBOC PBOC Holdings Inc. NA NA NA NA NA
PCBC Perry County Financial Corp. 39.18 38.28 7.99 23.17 0.51
PDB Piedmont Bancorp Inc. 54.50 50.78 6.34 6.42 5.87
PEDE Great Pee Dee Bancorp NA NA NA NA NA
PEEK Peekskill Financial Corp. 49.90 48.19 9.74 4.73 5.62
PERM Permanent Bancorp Inc. 64.69 58.68 3.64 7.07 0.78
PFDC Peoples Bancorp 38.88 34.85 5.83 11.32 3.87
PFED Park Bancorp Inc. 67.69 66.55 12.10 9.33 8.81
PFFB PFF Bancorp Inc. 61.05 54.07 14.31 (0.85) 1.43
PFFC Peoples Financial Corp. 72.24 71.97 (1.83) NA 6.36
PFNC Progress Financial Corp. 73.61 64.91 38.75 NA 20.13
PFSB PennFed Financial Services Inc 42.65 38.63 17.42 17.62 11.97
PFSL Pocahontas Bancorp Inc. 58.05 51.77 6.84 NA 21.50
PHBK Peoples Heritage Finl Group 57.96 46.87 17.46 23.12 12.36
PHFC Pittsburgh Home Financial Corp 59.25 55.99 45.37 20.19 6.98
PHSB Peoples Home Savings Bk (MHC) 72.95 70.16 5.58 (3.15) (2.06)
PLSK Pulaski Savings Bank (MHC) 67.80 66.63 5.88 (0.54) 9.55
PRBC Prestige Bancorp Inc. 74.36 72.02 21.32 20.02 9.80
PROV Provident Financial Holdings 79.32 74.67 32.80 28.00 14.42
PSBI PSB Bancorp Inc. 82.17 79.25 19.75 21.09 22.79
PSFC Peoples-Sidney Financial Corp. 50.72 49.95 12.58 8.06 (3.40)
PSFI PS Financial Inc. 30.46 29.20 11.59 16.94 (1.79)
PTRS Potters Financial Corp. 70.26 67.53 5.74 23.23 2.11
PULB Pulaski Bank, FSB (MHC) 62.28 58.57 3.71 NA 4.23
PULS Pulse Bancorp 38.94 37.13 4.59 21.79 5.24
PVFC PVF Capital Corp. 52.14 48.38 17.59 11.89 21.29
PVSA Parkvale Financial Corp. 44.63 39.88 10.51 16.67 7.74
PWBK Pennwood Bancorp Inc. 66.10 63.37 (7.80) NA (0.18)
QCBC Quaker City Bancorp Inc. 52.23 46.38 10.74 8.13 5.01
QCFB QCF Bancorp Inc. 40.34 34.77 2.98 10.01 0.28
QCSB Queens County Bancorp Inc. 39.94 37.78 16.92 14.78 0.41
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
--------------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ----------------------------------------- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 21.90 11.00 12.750 8.500 7.730 7.72
MIVI Mississippi View Holding Co. 14.80 18.50 19.750 12.000 16.850 16.85
MONT Montgomery Financial Corp. 18.18 12.88 14.000 11.000 12.050 12.05
MRKF Market Financial Corp. 18.37 13.25 20.250 13.125 11.780 11.78
MSBF MSB Financial Inc. 18.73 14.55 17.727 10.795 9.950 9.95
MSBK Mutual Savings Bank FSB 42.90 11.38 14.625 9.750 7.950 7.95
MWBI Midwest Bancshares Inc. 14.18 15.00 19.500 10.417 10.850 10.85
MWBX MetroWest Bank 105.11 7.81 9.500 5.625 3.390 3.39
MYST Mystic Financial Inc. 37.28 14.63 18.563 14.125 13.330 13.33
NASB NASB Financial Inc. 146.70 53.13 56.000 33.875 27.830 27.02
NBCP Niagara Bancorp Inc. (MHC) 347.79 NA NA NA NA NA
NBN Northeast Bancorp 34.45 18.13 19.500 9.167 9.720 8.83
NBSI North Bancshares Inc. 16.28 15.38 18.833 12.833 10.550 10.55
NEIB Northeast Indiana Bancorp 35.67 21.13 22.750 14.750 16.070 16.07
NEP Northeast PA Financial Corp. 81.95 14.13 NA NA 14.370 14.37
NHTB New Hampshire Thrift Bncshrs 33.77 18.50 22.750 15.500 12.600 11.01
NMSB NewMil Bancorp Inc. 46.01 12.75 14.625 10.875 8.710 8.71
NSLB NS&L Bancorp Inc. 11.36 17.50 19.500 16.625 16.880 16.76
NSSY NSS Bancorp Inc. 116.76 47.25 47.500 23.000 22.860 22.25
NTBK Net.B@nk Inc. 145.97 24.75 24.750 8.750 5.550 5.55
NTMG Nutmeg Federal S&LA 12.13 11.00 11.250 5.250 6.580 6.58
NWEQ Northwest Equity Corp. 14.55 20.25 22.250 14.625 14.240 14.24
NWSB Northwest Bancorp Inc. (MHC) 594.32 15.81 18.000 7.813 4.650 4.18
OCFC Ocean Financial Corp. 266.35 19.13 20.000 16.532 13.570 13.50
OCN Ocwen Financial Corp. 1,139.47 26.88 30.375 16.063 7.030 6.43
OFCP Ottawa Financial Corp. 138.56 26.36 30.909 16.942 13.230 10.84
OHSL OHSL Financial Corp. 39.63 16.50 18.375 11.625 11.020 11.02
OSFS Ohio State Financial Services 10.15 15.50 15.500 15.500 16.470 16.47
OTFC Oregon Trail Financial Corp. 73.36 15.75 18.500 15.625 15.890 15.89
PBCI Pamrapo Bancorp Inc. 73.92 27.25 29.000 19.750 17.300 17.21
PBCT People's Bank (MHC) 1,731.52 34.59 41.125 25.750 13.370 11.52
PBHC Pathfinder Bancorp Inc. (MHC) 43.53 22.00 26.125 8.583 8.470 7.23
PBKB People's Bancshares Inc. 65.91 23.19 27.750 15.250 9.790 9.38
PBOC PBOC Holdings Inc. 251.58 13.81 NA NA 8.430 8.43
PCBC Perry County Financial Corp. 16.56 23.38 25.000 18.750 19.690 19.69
PDB Piedmont Bancorp Inc. 27.51 9.94 11.625 9.5 7.85 7.85
PEDE Great Pee Dee Bancorp 25.87 15.75 NA NA 14.190 14.19
PEEK Peekskill Financial Corp. 48.50 17.88 18.250 15.250 14.920 14.92
PERM Permanent Bancorp Inc. 56.28 17.44 18.250 10.375 10.750 10.64
PFDC Peoples Bancorp 72.57 22.75 25.000 14.833 13.570 13.57
PFED Park Bancorp Inc. 42.31 18.00 19.750 15.875 16.550 16.55
PFFB PFF Bancorp Inc. 279.70 18.63 21.500 17.750 14.920 14.76
PFFC Peoples Financial Corp. 14.87 13.38 19.000 12.750 10.890 10.89
PFNC Progress Financial Corp. 92.46 18.21 21.667 9.297 7.950 NA
PFSB PennFed Financial Services Inc 144.31 16.56 19.000 13.563 11.870 10.33
PFSL Pocahontas Bancorp Inc. 58.50 9.75 11.430 5.156 8.740 8.46
PHBK Peoples Heritage Finl Group 1,734.93 23.63 26.500 18.125 8.270 6.87
PHFC Pittsburgh Home Financial Corp 28.56 16.75 20.813 15.000 13.120 12.98
PHSB Peoples Home Savings Bk (MHC) 46.92 18.38 22.125 13.625 10.400 10.40
PLSK Pulaski Savings Bank (MHC) 31.36 15.88 24.500 13.250 10.530 10.53
PRBC Prestige Bancorp Inc. 16.31 18.25 22.065 13.587 15.140 15.14
PROV Provident Financial Holdings 98.30 20.75 24.250 16.750 17.850 17.85
PSBI PSB Bancorp Inc. 24.62 10.11 11.274 5.637 NA NA
PSFC Peoples-Sidney Financial Corp. 35.26 18.00 18.625 12.563 15.980 15.98
PSFI PS Financial Inc. 22.81 14.06 22.375 12.875 11.250 11.25
PTRS Potters Financial Corp. 13.79 17.25 22.250 10.500 11.490 11.49
PULB Pulaski Bank, FSB (MHC) 67.39 37.19 51.000 17.750 11.870 11.87
PULS Pulse Bancorp 90.49 27.75 29.750 20.000 14.710 14.71
PVFC PVF Capital Corp. 67.83 24.00 24.000 15.455 11.340 11.34
PVSA Parkvale Financial Corp. 167.46 32.25 34.250 21.400 16.250 16.17
PWBK Pennwood Bancorp Inc. 8.19 13.50 17.438 11.063 12.340 12.34
QCBC Quaker City Bancorp Inc. 97.60 18.40 20.000 14.050 13.260 13.26
QCFB QCF Bancorp Inc. 41.63 28.25 29.750 19.000 19.980 19.98
QCSB Queens County Bancorp Inc. 601.78 43.63 47.125 29.792 13.070 13.07
</TABLE>
<PAGE> 120
Page 22 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
-------------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ----------------------------------------- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 3.39 7.11 3.89 3.23 0.29 1.96
RCBK Richmond County Financial Corp 4.10 6.94 3.00 3.94 0.28 1.95
RELI Reliance Bancshares Inc. 5.04 7.46 2.62 4.84 0.05 3.28
RELY Reliance Bancorp Inc. 3.28 7.06 3.99 3.08 0.29 1.82
RIVR River Valley Bancorp 3.94 7.41 3.62 3.79 0.58 2.83
ROSE TR Financial Corp. 2.59 7.13 4.59 2.54 0.17 1.22
RSLN Roslyn Bancorp Inc. 2.88 7.04 4.21 2.83 0.26 1.24
RVSB Riverview Bancorp Inc. 4.82 8.21 3.65 4.56 0.91 2.88
SBAN SouthBanc Shares Inc. 3.59 7.40 4.00 3.41 0.87 2.75
SBFL SB of the Finger Lakes (MHC) 3.04 7.17 4.24 2.93 0.26 2.59
SBOS Boston Bancorp (The) 2.72 6.92 4.27 2.65 0.16 1.51
SCBS Southern Community Bancshares 4.08 7.44 3.40 4.05 0.26 2.49
SCCB S. Carolina Community Bancshrs 4.17 7.74 3.65 4.09 0.26 2.72
SFED SFS Bancorp Inc. 3.41 7.31 3.96 3.34 0.28 2.49
SFFC StateFed Financial Corp. 3.41 7.80 4.61 3.20 0.10 1.52
SFIN Statewide Financial Corp. 3.73 7.30 3.68 3.62 0.27 2.53
SFSL Security First Corp. 4.08 8.30 4.38 3.92 0.27 1.96
SGVB SGV Bancorp Inc. 2.76 7.24 4.56 2.68 0.32 2.21
SHSB SHS Bancorp Inc. 3.15 7.69 4.60 3.08 0.15 2.01
SIB Staten Island Bancorp Inc. 4.34 6.90 2.74 4.16 0.31 1.82
SISB SIS Bancorp Inc. 3.68 6.99 3.52 3.47 0.92 2.88
SKAN Skaneateles Bancorp Inc. 4.18 7.71 3.75 3.96 0.76 3.57
SKBO First Carnegie Deposit (MHC) 2.79 6.88 4.19 2.69 0.06 1.71
SMBC Southern Missouri Bancorp Inc. 3.38 7.15 3.88 3.27 0.48 2.22
SOBI Sobieski Bancorp Inc. 3.36 7.30 4.08 3.22 0.14 2.34
SOPN First Savings Bancorp Inc. 3.91 7.55 3.71 3.84 0.20 1.26
SPBC St. Paul Bancorp Inc. 2.95 6.88 4.05 2.83 0.86 2.18
SRN Southern Banc Co. 2.77 7.05 4.33 2.72 0.11 2.07
SSB Scotland Bancorp Inc. 4.29 7.60 3.38 4.22 0.12 2.54
SSFC South Street Financial Corp. 3.07 7.09 4.09 3.00 0.07 2.21
SSM Stone Street Bancorp Inc. 4.63 8.01 3.48 4.53 0.14 2.35
STFR St. Francis Capital Corp. 2.69 6.98 4.51 2.47 0.43 2.06
STSA Sterling Financial Corp. 2.75 7.78 5.13 2.65 0.46 2.15
SVRN Sovereign Bancorp Inc. 2.71 7.17 4.59 2.57 0.29 1.47
SWCB Sandwich Bancorp Inc. 3.60 7.13 3.70 3.43 0.46 2.41
SZB SouthFirst Bancshares Inc. 3.45 7.28 4.19 3.09 1.09 3.49
TBFC Telebanc Financial Corp. 1.41 6.89 5.49 1.40 0.19 1.46
THR Three Rivers Financial Corp. 3.68 7.53 3.97 3.56 0.52 2.84
THRD TF Financial Corp. 2.94 6.67 3.82 2.85 0.19 2.16
THTL Thistle Group Holdings Co. 3.50 7.25 3.87 3.37 0.20 2.40
TPNZ Tappan Zee Financial Inc. 3.74 7.50 3.80 3.70 0.13 2.36
TRIC Tri-County Bancorp Inc. 3.20 7.37 4.25 3.12 0.16 1.89
TSBK Timberland Bancorp Inc. 4.94 8.17 3.44 4.74 0.48 2.47
TSBS Peoples Bancorp Inc. 3.80 6.80 3.17 3.64 0.44 2.12
TSH Teche Holding Co. 3.41 7.56 4.24 3.32 0.77 2.62
TWIN Twin City Bancorp 4.03 7.79 3.97 3.81 0.34 2.59
UBMT United Financial Corp. 3.73 7.37 3.77 3.60 1.05 2.41
UCBC Union Community Bancorp NA NA NA NA NA NA
UCFC United Community Finl Corp. 4.09 7.82 3.83 3.99 0.14 2.39
UFBS Union Financial Bcshs Inc. 3.37 7.41 4.22 3.19 0.53 2.51
UFRM United Federal Savings Bank 4.01 8.37 4.61 3.75 0.87 3.38
UPFC United PanAm Financial Corp. NA NA NA NA NA NA
USAB USABancshares Inc. 4.53 9.15 4.78 4.38 0.53 3.48
UTBI United Tennessee Bankshares NA NA NA NA NA NA
WAMU Washington Mutual Inc. 2.96 7.41 4.57 2.84 0.81 1.87
WAYN Wayne Savings Bancshares (MHC) 3.30 7.56 4.36 3.21 0.24 2.42
WBST Webster Financial Corp. 2.86 6.85 4.12 2.72 0.53 1.93
WCBI Westco Bancorp Inc. 3.60 7.56 4.06 3.49 0.25 1.54
WCFB Webster City Federal SB (MHC) 3.57 7.08 3.57 3.50 0.24 1.50
WEFC Wells Financial Corp. 3.41 7.66 4.29 3.37 0.72 2.16
WEHO Westwood Homestead Fin. Corp. 3.65 7.92 4.33 3.59 0.11 2.29
WES Westcorp 3.35 7.19 4.37 2.81 2.68 6.39
WFI Winton Financial Corp. 3.10 7.94 4.89 3.05 0.16 1.84
WFSL Washington Federal Inc. 3.77 8.23 4.55 3.68 0.09 0.78
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
-------------------------- ------------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ----------------------------------------- -------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 55.13 51.16 14.54 19.44 5.12
RCBK Richmond County Financial Corp 45.89 42.11 60.65 29.90 7.49
RELI Reliance Bancshares Inc. 67.11 66.79 (5.68) (0.26) (3.20)
RELY Reliance Bancorp Inc. 48.01 43.06 25.75 7.02 13.39
RIVR River Valley Bancorp 64.39 58.92 (3.24) (0.04) (4.25)
ROSE TR Financial Corp. 44.85 41.23 15.88 20.38 -11.63
RSLN Roslyn Bancorp Inc. 40.18 34.66 21.97 78.62 14.86
RVSB Riverview Bancorp Inc. 50.35 40.44 16.96 6.54 8.99
SBAN SouthBanc Shares Inc. 64.93 56.00 56.86 19.39 14.46
SBFL SB of the Finger Lakes (MHC) 78.85 76.97 18.72 34.77 7.51
SBOS Boston Bancorp (The) 56.25 53.67 (15.43) (13.03) 0.65
SCBS Southern Community Bancshares 57.90 55.18 3.34 18.56 6.19
SCCB S. Carolina Community Bancshrs 62.58 60.19 (0.23) (0.31) 7.10
SFED SFS Bancorp Inc. 69.03 66.48 3.03 NA 3.30
SFFC StateFed Financial Corp. 54.14 52.67 4.81 NA 6.61
SFIN Statewide Financial Corp. 64.58 61.96 (1.01) 0.65 (1.45)
SFSL Security First Corp. 46.26 42.55 6.62 7.97 9.94
SGVB SGV Bancorp Inc. 71.97 68.59 (0.24) 4.00 2.41
SHSB SHS Bancorp Inc. 61.25 59.36 6.76 2.81 1.45
SIB Staten Island Bancorp Inc. 38.85 34.29 57.08 23.59 0.75
SISB SIS Bancorp Inc. 66.23 57.29 8.64 9.16 7.76
SKAN Skaneateles Bancorp Inc. 73.49 68.39 7.68 2.38 8.46
SKBO First Carnegie Deposit (MHC) 62.12 61.30 (8.86) 10.31 (12.05)
SMBC Southern Missouri Bancorp Inc. 59.90 54.05 (2.79) 10.96 -7.93
SOBI Sobieski Bancorp Inc. 69.76 68.46 13.62 23.75 2.09
SOPN First Savings Bancorp Inc. 31.14 27.49 3.36 8.22 3.72
SPBC St. Paul Bancorp Inc. 62.06 50.52 (1.01) 4.01 (0.24)
SRN Southern Banc Co. 71.60 70.43 0.71 11.55 (0.34)
SSB Scotland Bancorp Inc. 58.43 57.26 (12.09) (7.86) 5.50
SSFC South Street Financial Corp. 71.86 71.20 (15.75) (2.95) 4.22
SSM Stone Street Bancorp Inc. 50.26 48.77 5.78 14.13 3.07
STFR St. Francis Capital Corp. 68.12 62.59 6.68 16.19 7.10
STSA Sterling Financial Corp. 64.88 58.73 23.15 28.56 57.62
SVRN Sovereign Bancorp Inc. 48.63 42.79 39.97 23.81 24.33
SWCB Sandwich Bancorp Inc. 59.63 54.18 5.80 2.61 10.69
SZB SouthFirst Bancshares Inc. 83.34 77.43 67.53 40.54 98.58
TBFC Telebanc Financial Corp. 89.47 88.02 50.30 NA 53.16
THR Three Rivers Financial Corp. 69.94 65.53 7.57 5.44 2.05
THRD TF Financial Corp. 66.37 64.12 7.58 (24.66) (2.65)
THTL Thistle Group Holdings Co. 66.45 64.48 (6.01) (3.09) (10.13)
TPNZ Tappan Zee Financial Inc. 61.75 60.44 12.52 1.44 4.32
TRIC Tri-County Bancorp Inc. 57.48 55.35 (3.25) 9.91 (2.66)
TSBK Timberland Bancorp Inc. 47.25 41.88 27.61 0.62 (1.19)
TSBS Peoples Bancorp Inc. 48.94 42.72 38.43 13.35 1.45
TSH Teche Holding Co. 64.71 56.57 3.48 3.71 2.05
TWIN Twin City Bancorp 62.55 59.16 3.04 7.28 (1.11)
UBMT United Financial Corp. 51.34 37.17 186.21 143.08 149.13
UCBC Union Community Bancorp NA NA NA NA NA
UCFC United Community Finl Corp. 57.85 56.33 (2.77) 2.77 (4.86)
UFBS Union Financial Bcshs Inc. 64.16 58.23 6.90 11.11 11.53
UFRM United Federal Savings Bank 71.94 65.45 9.58 16.14 7.8
UPFC United PanAm Financial Corp. NA NA NA NA NA
USAB USABancshares Inc. 69.53 65.85 160.90 230.30 166.43
UTBI United Tennessee Bankshares NA NA NA NA NA
WAMU Washington Mutual Inc. 49.27 34.74 11.74 8.40 (2.52)
WAYN Wayne Savings Bancshares (MHC) 70.07 67.80 3.00 (0.82) 2.92
WBST Webster Financial Corp. 55.88 47.34 11.12 (0.42) (0.40)
WCBI Westco Bancorp Inc. 41.34 37.17 2.79 4.44 1.68
WCFB Webster City Federal SB (MHC) 39.99 35.96 2.53 2.43 0.89
WEFC Wells Financial Corp. 52.80 42.76 (6.61) NA 6.09
WEHO Westwood Homestead Fin. Corp. 62.06 60.94 (6.18) 8.26 1.68
WES Westcorp 116.83 132.86 (0.39) (14.28) (0.12)
WFI Winton Financial Corp. 56.86 54.58 12.97 NA 8.44
WFSL Washington Federal Inc. 18.33 16.23 (3.50) (0.53) 4.66
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
-----------------------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ----------------------------------------- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 65.26 30.25 30.250 19.500 13.420 13.26
RCBK Richmond County Financial Corp 398.02 18.69 19.750 15.688 12.440 12.40
RELI Reliance Bancshares Inc. 22.38 8.88 10.125 7.125 9.310 9.31
RELY Reliance Bancorp Inc. 303.69 38.31 42.250 27.688 20.370 14.21
RIVR River Valley Bancorp 20.23 19.75 19.750 13.625 15.340 15.14
ROSE TR Financial Corp. 631.04 41.88 44.75 23 15.42 15.42
RSLN Roslyn Bancorp Inc. 784.03 22.31 30.500 20.156 14.360 14.30
RVSB Riverview Bancorp Inc. 93.56 16.63 19.125 8.281 10.61 10.28
SBAN SouthBanc Shares Inc. 78.53 22.44 23.408 8.460 NA NA
SBFL SB of the Finger Lakes (MHC) 58.91 18.63 24.750 8.625 6.120 6.12
SBOS Boston Bancorp (The) NA 41.75 44.000 28.750 40.290 40.29
SCBS Southern Community Bancshares 18.20 17.50 20.750 13.500 10.100 10.10
SCCB S. Carolina Community Bancshrs 12.75 21.63 25.250 17.500 16.280 16.28
SFED SFS Bancorp Inc. 32.63 23.00 27.25 16.875 18.13 18.13
SFFC StateFed Financial Corp. 19.97 14.00 15.000 9.500 10.270 10.27
SFIN Statewide Financial Corp. 91.42 23.00 24.125 14.750 14.590 14.57
SFSL Security First Corp. 161.69 25.75 27.875 14.667 8.770 8.66
SGVB SGV Bancorp Inc. 38.16 17.75 19.375 13.750 13.730 13.57
SHSB SHS Bancorp Inc. 14.55 17.00 18.000 14.750 14.930 14.93
SIB Staten Island Bancorp Inc. 880.04 22.75 23.625 18.813 15.750 15.36
SISB SIS Bancorp Inc. 297.61 38.75 44.500 27.625 18.570 18.57
SKAN Skaneateles Bancorp Inc. 23.48 18.50 22.250 13.833 12.700 12.40
SKBO First Carnegie Deposit (MHC) 32.78 19.50 20.000 11.625 10.860 10.86
SMBC Southern Missouri Bancorp Inc. 26.72 22.00 23.250 17.000 16.240 16.24
SOBI Sobieski Bancorp Inc. 13.49 20.25 24.250 14.500 17.840 17.84
SOPN First Savings Bancorp Inc. 81.64 24.50 26.000 20.000 18.730 18.73
SPBC St. Paul Bancorp Inc. 944.21 22.59 28.500 22.000 12.750 12.70
SRN Southern Banc Co. 17.99 16.75 19.125 14.250 14.950 14.84
SSB Scotland Bancorp Inc. 17.46 8.25 19.250 8.125 7.960 7.96
SSFC South Street Financial Corp. 42.09 9.94 20.000 8.625 8.500 8.50
SSM Stone Street Bancorp Inc. 31.34 19.38 22.500 19.250 16.640 16.64
STFR St. Francis Capital Corp. 204.43 38.75 50.750 33.875 25.780 23.06
STSA Sterling Financial Corp. 155.92 22.75 27.625 17.625 13.900 5.47
SVRN Sovereign Bancorp Inc. 2,479.66 16.34 22.188 12.240 7.020 6.19
SWCB Sandwich Bancorp Inc. 126.18 63.50 64.500 30.250 21.810 21.20
SZB SouthFirst Bancshares Inc. 17.17 19.00 22.750 15.875 16.750 16.33
TBFC Telebanc Financial Corp. 103.67 14 14.000 7.875 6.710 6.64
THR Three Rivers Financial Corp. 12.99 20.88 23.500 13.750 16.080 16.03
THRD TF Financial Corp. 75.00 25.63 30.000 19.125 17.840 15.14
THTL Thistle Group Holdings Co. 82.69 NA NA NA NA NA
TPNZ Tappan Zee Financial Inc. 28.64 20.00 22.625 16.500 14.980 14.98
TRIC Tri-County Bancorp Inc. 14.01 12.50 16.500 10.625 12.190 12.19
TSBK Timberland Bancorp Inc. 98.36 16.50 18.500 14.500 12.880 12.88
TSBS Peoples Bancorp Inc. 315.59 10.00 11.832 5.066 9.400 9.12
TSH Teche Holding Co. 59.75 22.38 23.500 15.500 16.380 16.38
TWIN Twin City Bancorp 16.21 13.38 15.500 12.833 11.290 11.29
UBMT United Financial Corp. 45.43 27.00 28.250 25.625 17.730 17.15
UCBC Union Community Bancorp 41.44 14.50 NA NA 14.310 14.31
UCFC United Community Finl Corp. 514.53 NA NA NA NA NA
UFBS Union Financial Bcshs Inc. 22.32 17.25 18.000 10.333 11.560 NA
UFRM United Federal Savings Bank 57.46 18.00 21 10.5 7.13 7.13
UPFC United PanAm Financial Corp. 164.11 10.25 NA NA 4.750 4.73
USAB USABancshares Inc. 24.78 14.00 14.000 6.563 8.090 8.04
UTBI United Tennessee Bankshares 18.55 14.75 NA NA 13.920 13.92
WAMU Washington Mutual Inc. 14,299.62 43.44 50.917 36.750 14.890 14.01
WAYN Wayne Savings Bancshares (MHC) 57.18 26.14 30.000 15.455 9.840 9.84
WBST Webster Financial Corp. 1,092.32 33.25 36.250 22.000 14.310 12.13
WCBI Westco Bancorp Inc. 68.37 28.50 30.500 25.500 20.180 20.18
WCFB Webster City Federal SB (MHC) 35.94 19.25 22.000 15.625 10.750 10.75
WEFC Wells Financial Corp. 33.35 21.13 22.000 15.000 15.430 15.43
WEHO Westwood Homestead Fin. Corp. 31.99 12.63 18.125 11.875 10.160 10.16
WES Westcorp 260.44 13.75 23.500 11.500 12.600 12.57
WFI Winton Financial Corp. 59.97 16.25 20.625 6.250 6.490 6.39
WFSL Washington Federal Inc. 1,317.74 27.63 30.285 23.239 14.730 13.68
</TABLE>
<PAGE> 121
Page 23 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
--------------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ----------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 3.56 7.23 3.82 3.41 0.12 2.37
WOFC Western Ohio Financial Corp. 2.95 7.34 4.51 2.82 0.20 2.41
WRNB Warren Bancorp Inc. 4.95 7.93 3.18 4.74 0.24 2.62
WSB Washington Savings Bank, FSB 2.40 7.91 5.62 2.30 0.36 1.83
WSBI Warwick Community Bancorp NA NA NA NA NA NA
WSFS WSFS Financial Corp. 2.89 7.26 4.68 2.58 1.45 2.44
WSTR WesterFed Financial Corp. 3.44 7.35 4.17 3.18 0.72 2.63
WVFC WVS Financial Corp. 3.60 7.61 4.05 3.56 0.14 1.67
WYNE Wayne Bancorp Inc. 3.47 7.30 3.93 3.37 0.26 2.38
YFCB Yonkers Financial Corp. 3.52 7.31 3.85 3.46 0.29 2.23
YFED York Financial Corp. 3.28 7.46 4.37 3.09 0.45 2.17
- --------------------------------------------------------------------------------------------------------------------
Average 3.44 7.43 4.13 3.30 0.47 2.32
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
--------------------------- --------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ----------------------------------- --------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 67.03 65.87 31.66 (3.53) 22.35
WOFC Western Ohio Financial Corp. 75.99 74.28 (9.89) (18.10) 6.57
WRNB Warren Bancorp Inc. 52.20 49.79 5.62 8.96 5.09
WSB Washington Savings Bank, FSB 70.05 65.29 5.89 (9.53) 8.02
WSBI Warwick Community Bancorp NA NA NA NA NA
WSFS WSFS Financial Corp. 58.35 34.94 2.86 (19.07) 4.07
WSTR WesterFed Financial Corp. 63.90 55.70 6.96 4.30 0.88
WVFC WVS Financial Corp. 45.21 43.07 0.80 (0.34) (1.88)
WYNE Wayne Bancorp Inc. 65.76 63.15 5.48 12.64 12.36
YFCB Yonkers Financial Corp. 59.03 55.63 39.39 97.68 13.77
YFED York Financial Corp. 61.68 56.14 5.75 (3.09) 7.32
- --------------------------------------------------------------------------------------------------------
Average 61.03 55.75 13.59 14.66 9.92
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
--------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ----------------------------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 15.28 15.75 19.000 15.000 14.520 14.52
WOFC Western Ohio Financial Corp. 52.84 24.75 29.250 21.250 22.580 21.12
WRNB Warren Bancorp Inc. 87.01 13.25 14.375 8.625 5.020 5.02
WSB Washington Savings Bank, FSB 25.97 7.94 9.500 4.875 5.210 5.21
WSBI Warwick Community Bancorp 97.45 16.00 NA NA 12.940 12.94
WSFS WSFS Financial Corp. 227.01 20.50 23.875 13.500 7.620 7.58
WSTR WesterFed Financial Corp. 120.08 24.50 27.000 20.125 19.640 16.01
WVFC WVS Financial Corp. 56.07 16.00 20.125 12.875 9.120 9.12
WYNE Wayne Bancorp Inc. 62.66 30.38 32.000 19.000 17.470 17.47
YFCB Yonkers Financial Corp. 43.62 19.25 22.000 15.250 14.910 14.91
YFED York Financial Corp. 169.27 20.88 27.250 15.600 12.180 12.18
- ----------------------------------------------------------------------------------------------------------------
Average 234.60 21.83 25.05 15.72 13.80 13.38
</TABLE>
<PAGE> 122
Page 24 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME STATEMENT AS OF THE MOST RECENT QUARTER
---------------------------------------------------------------------------
NET INTEREST INTEREST NET INTEREST NONINTEREST NONINTEREST
INTEREST INCOME/ EXPENSE/ INCOME/ INCOME/ EXPENSE/
MARGIN AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS AVG ASSETS
TICKER SHORT NAME (%) (%) (%) (%) (%) (%)
- ------------------------------------------- ---------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 3.17 7.20 4.14 3.06 0.36 1.74
EBSI Eagle Bancshares 4.03 8.30 4.62 3.68 1.59 3.78
FAB FIRSTFED AMERICA BANCORP INC. 2.81 6.96 4.29 2.67 0.40 2.08
FNGB First Northern Capital Corp. 3.19 7.27 4.20 3.07 0.46 2.04
FWWB First Washington Bancorp Inc. 3.68 7.82 4.29 3.54 0.30 1.93
KFBI Klamath First Bancorp 3.36 7.01 3.80 3.20 0.27 1.94
MDBK Medford Bancorp Inc. 3.23 6.93 3.83 3.10 0.25 1.68
MECH MECH Financial Inc. 3.61 6.98 3.58 3.40 0.84 2.51
WSTR WesterFed Financial Corp. 3.44 7.35 4.17 3.18 0.72 2.63
YFED York Financial Corp. 3.28 7.46 4.37 3.09 0.45 2.17
- ------------------------------------------- ---------------------------------------------------------------------------
Average 3.38 7.33 4.13 3.20 0.56 2.25
Median 3.32 7.24 4.19 3.14 0.43 2.06
Maximum 4.03 8.30 4.62 3.68 1.59 3.78
Minimum 2.81 6.93 3.58 2.67 0.25 1.68
COMMUNITY SAVINGS BANKSHARES, INC. 3.47 7.17 3.92 3.25 0.94 2.63
VARIANCE TO THE COMPARABLE MEDIAN 0.15 (0.06) (0.27) 0.11 0.51 0.57
<CAPTION>
BALANCE SHEET GROWTH AS OF THE MRQ
------------------------- --------------------------------------
ASSET LOAN DEPOSIT
EFFICIENCY OVERHEAD GROWTH GROWTH GROWTH
RATIO RATIO RATE RATE RATE
TICKER SHORT NAME (%) (%) (%) (%) (%)
- ------------------------------------------- ------------------------ ---------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 50.18 44.38 11.30 16.14 5.63
EBSI Eagle Bancshares 76.31 66.10 39.52 49.84 39.67
FAB FIRSTFED AMERICA BANCORP INC. 67.44 62.53 28.88 2.04 (4.34)
FNGB First Northern Capital Corp. 57.92 51.58 8.26 7.44 6.26
FWWB First Washington Bancorp Inc. 48.12 43.64 14.53 17.18 8.55
KFBI Klamath First Bancorp 51.29 47.23 38.57 20.59 63.20
MDBK Medford Bancorp Inc. 46.95 42.67 5.85 1.09 1.07
MECH MECH Financial Inc. 59.79 49.83 15.92 10.27 3.83
WSTR WesterFed Financial Corp. 63.90 55.70 6.96 4.30 0.88
YFED York Financial Corp. 61.68 56.14 5.75 (3.09) 7.32
- ------------------------------------------- --------------------------------------------------------------------
Average 58.36 51.98 17.55 12.58 13.21
Median 58.86 50.71 12.92 8.86 5.95
Maximum 76.31 66.10 39.52 49.84 63.20
Minimum 46.95 42.67 5.75 (3.09) (4.34)
COMMUNITY SAVINGS BANKSHARES, INC. 70.69 52.04 12.60 33.50 8.60
VARIANCE TO THE COMPARABLE MEDIAN 11.84 1.33 (0.32) 24.65 2.65
<CAPTION>
MARKET DATA AS OF THE MOST RECENT QUARTER
-------------------------------------------------------------------
MRQ MRQ MRQ MRQ MRQ PUBLICLY MRQ TANGIBLE
MARKET PRICE PRICE PRICE REPORTED PUBLICLY REP
VALUE PER SHARE HIGH LOW BOOK VALUE BOOK VALUE
TICKER SHORT NAME ($) ($) ($) ($) ($) ($)
- ------------------------------------------ -------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 223.59 34.250 37.750 23.700 17.61 17.61
EBSI Eagle Bancshares 130.21 25.375 25.500 15.250 13.03 13.03
FAB FIRSTFED AMERICA BANCORP INC. 139.59 19.375 23.250 17.625 15.76 15.76
FNGB First Northern Capital Corp. 112.95 13.375 14.000 11.000 8.49 8.49
FWWB First Washington Bancorp Inc. 269.08 23.921 25.966 17.045 14.78 13.70
KFBI Klamath First Bancorp 168.59 19.063 24.250 18.625 16.02 14.67
MDBK Medford Bancorp Inc. 178.19 41.000 44.250 29.250 22.78 21.62
MECH MECH Financial Inc. 148.27 29.000 31.500 18.875 17.51 17.51
WSTR WesterFed Financial Corp. 120.08 24.500 27.000 20.125 19.64 16.01
YFED York Financial Corp. 169.27 20.875 27.250 15.600 12.18 12.18
- ------------------------------------------ -------------------------------------------------------------------
Average 165.98 25.07 28.07 18.71 15.78 15.06
Median 158.43 24.21 26.48 18.13 15.89 15.22
Maximum 269.08 41.00 44.25 29.25 22.78 21.62
Minimum 112.95 13.38 14.00 11.00 8.49 8.49
COMMUNITY SAVINGS BANKSHARES, INC. 67.42 10.00 NA NA 10.86 10.86
VARIANCE TO THE COMPARABLE MEDIAN (91.01) (14.21) NA NA (5.03) (4.36)
</TABLE>
<PAGE> 123
Page 25 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB NA NA NA NA NA NA
AABC Access Anytime Bancorp Inc. -- 0.00 9.32 10.67 42.71 8.33
ABBK Abington Bancorp Inc. 1.14 25.64 20.03 11.40 14.69 15.06
ABCL Alliance Bancorp 2.00 34.38 14.97 12.16 39.29 17.19
ABCW Anchor BanCorp Wisconsin 0.94 14.47 21.59 18.53 16.44 18.75
AFBC Advance Financial Bancorp 1.95 42.11 18.40 15.89 14.62 17.24
AFED AFSALA Bancorp Inc. 1.56 22.83 19.35 14.95 22.50 19.57
AHCI Ambanc Holding Co. 1.49 25.00 31.01 13.21 36.65 25.2
AHM H.F. Ahmanson & Co. 1.44 23.04 16.18 13.09 13.69 16.05
ALBC Albion Banc Corp. 1.38 32.67 18.10 8.82 18.10 17.04
ALBK ALBANK Financial Corp. 1.38 23.15 18.81 19.44 20.52 18.75
ALLB Alliance Bank (MHC) 1.64 58.06 35.48 25.95 34.38 35.48
AMFC AMB Financial Corp. 1.78 28.42 25.82 12.95 35.80 16.58
ANA Acadiana Bancshares Inc. 2.00 34.43 19.30 18.49 20.37 18.03
ANDB Andover Bancorp Inc. 2.09 26.38 15.07 16.06 11.06 14.68
ANE Alliance Bncp of New England 1.57 14.80 28.98 12.60 13.28 14.17
ASBI Ameriana Bancorp 3.46 54.78 18.32 15.49 14.92 16.09
ASBP ASB Financial Corp. 3.20 58.82 18.38 17.79 17.36 18.38
ASFC Astoria Financial Corp. 1.73 21.34 15.74 10.57 13.57 14.06
ATSB AmTrust Capital Corp. 1.29 35.09 62.00 11.45 29.81 27.19
AVND Avondale Financial Corp. -- 0.00 NM 8.38 6.48 NM
BANC BankAtlantic Bancorp Inc. 0.85 NM 37.50 10.98 18.75 16.79
BCSB BCSB Bankcorp Inc. (MHC) -- NA NA NA NA NA
BDJI First Federal Bancorp. -- 0.00 16.84 13.58 14.73 17.01
BFD BostonFed Bancorp Inc. 2.07 24.03 18.63 9.87 14.68 15.02
BFFC Big Foot Financial Corp. -- 0.00 33.70 18.59 55.36 29.25
BFSB Bedford Bancshares Inc. 2.29 38.16 18.42 20.55 15.91 18.42
BKC American Bank of Connecticut 3.20 45.25 15.73 16.24 12.63 13.27
BKCT Bancorp Connecticut Inc. 3.17 44.78 17.24 17.62 13.76 14.84
BKUNA BankUnited Financial Corp. -- 0.00 27.29 5.2 21.52 21.11
BNKU Bank United Corp. 1.56 18.13 12.73 9.89 13.85 11.99
BPLS Bank Plus Corp. -- 0.00 18.41 4.58 NM 27.36
BRBI Blue River Bancshares Inc. -- NA NA NA NM NA
BRKL Brookline Bancorp (MHC) 1.54 NA NA 45.28 18.06 NA
BTHL Bethel Bancorp 2.56 20.83 16.89 6.89 16.45 13.02
BVCC Bay View Capital Corp. 1.79 34.57 15.5 7.91 22.31 27.55
BWFC Bank West Financial Corp. 2.11 49.21 34.47 16.55 35.55 27.08
BYFC Broadway Financial Corp. 1.91 27.64 34.72 7.06 16.20 14.51
BYS Bay State Bancorp -- NA NA 20.93 26.99 NA
CAFI Camco Financial Corp. 2.23 28.20 18.29 16.51 12.41 13.90
CASB Cascade Financial Corp. -- 0.00 20.15 12.97 16.07 18.00
CASH First Midwest Financial Inc. 2.45 43.27 21.10 12.18 14.87 18.87
CATB Catskill Financial Corp. 2.00 34.07 17.78 23.19 16.67 17.58
CAVB Cavalry Bancorp Inc. 1.01 NA NA 43.81 22.44 NA
CBCI Calumet Bancorp Inc. -- 0.00 10.85 19.50 18.60 10.93
CBES CBES Bancorp Inc. 2.31 37.84 25.94 15.76 15.72 18.69
CBK Citizens First Financial Corp. -- 0.00 37.50 15.63 21.56 22.70
CBSA Coastal Bancorp Inc. -- 12.12 10.28 5.30 10.23 10.54
CCFH CCF Holding Co. 3.12 282.24 NM 11.57 128.13 97.62
CEBK Central Co-operative Bank 1.42 20.51 18.6 11.76 10.61 14.42
CENB Century Bancorp Inc. 4.90 896.37 11.66 16.89 24.78 11.66
CFB Commercial Federal Corp. 0.83 13.07 13.19 12.53 15.33 16.28
CFCP Coastal Financial Corp. 1.47 26.46 22.89 19.27 17.59 18.45
CFFC Community Financial Corp. 1.98 40.00 20.18 19.66 22.07 20.18
CFKY Columbia Financial of Kentucky 1.97 NA NA NA NA NA
CFNC Carolina Fincorp Inc. 2.36 38.98 15.67 16.39 NM 17.27
CFSB CFSB Bancorp Inc. 2.14 34.35 20.04 23.36 16.39 18.10
CFTP Community Federal Bancorp 2.00 47.01 27.59 26.73 19.05 23.88
CIBI Community Investors Bancorp 1.85 29.20 18.57 17.06 19.12 18.57
CITZ CFS Bancorp Inc. -- NA NA NA NA NA
CKFB CKF Bancorp Inc. 3.27 50.00 16.50 22.17 18.75 16.50
CLAS Classic Bancshares Inc. 2.05 35.44 25.61 14.72 24.41 19.78
CMRN Cameron Financial Corp. 1.68 27.72 16.69 18.4 14.90 16.52
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
%CAL California Federal Bank NA NA NA
%CCMD Chevy Chase Bank, FSB NA NA 4489
AABC Access Anytime Bancorp Inc. 134.69 134.69 NA
ABBK Abington Bancorp Inc. 178.93 196.27 185
ABCL Alliance Bancorp 139.24 140.40 580
ABCW Anchor BanCorp Wisconsin 291.01 295.44 526
AFBC Advance Financial Bancorp 112.78 112.78 42
AFED AFSALA Bancorp Inc. 109.42 109.42 51
AHCI Ambanc Holding Co. 113 113.00 177
AHM H.F. Ahmanson & Co. 214.01 280.74 NA
ALBC Albion Banc Corp. 103.8 103.80 NA
ALBK ALBANK Financial Corp. 211.67 267.39 1470
ALLB Alliance Bank (MHC) 242.83 242.83 75
AMFC AMB Financial Corp. 102.14 102.14 NA
ANA Acadiana Bancshares Inc. 125.57 125.57 NA
ANDB Andover Bancorp Inc. 195.91 195.91 282
ANE Alliance Bncp of New England 161.39 164.94 88
ASBI Ameriana Bancorp 133.09 135.63 153
ASBP ASB Financial Corp. 117.04 117.04 20
ASFC Astoria Financial Corp. 137.11 191.39 1467
ATSB AmTrust Capital Corp. 105.73 106.82 NA
AVND Avondale Financial Corp. 100.28 100.28 NA
BANC BankAtlantic Bancorp Inc. 161.64 209.11 1153
BCSB BCSB Bankcorp Inc. (MHC) NA NA NA
BDJI First Federal Bancorp. 129.92 129.92 40
BFD BostonFed Bancorp Inc. 119.75 124.04 NA
BFFC Big Foot Financial Corp. 101.71 101.71 66
BFSB Bedford Bancshares Inc. 155.21 155.21 40
BKC American Bank of Connecticut 187.75 193.56 131
BKCT Bancorp Connecticut Inc. 178.11 178.11 119
BKUNA BankUnited Financial Corp. 118.64 136.77 303
BNKU Bank United Corp. 193.49 212.99 NA
BPLS Bank Plus Corp. 106.02 115.58 NA
BRBI Blue River Bancshares Inc. NA NA NA
BRKL Brookline Bancorp (MHC) 137.28 137.28 NA
BTHL Bethel Bancorp 91.17 108.60 NA
BVCC Bay View Capital Corp. 114.84 177.09 962
BWFC Bank West Financial Corp. 127.38 127.38 67
BYFC Broadway Financial Corp. 69.69 69.69 52
BYS Bay State Bancorp 87.19 87.19 NA
CAFI Camco Financial Corp. 166.91 177.84 212
CASB Cascade Financial Corp. 183.18 183.18 144
CASH First Midwest Financial Inc. 119.66 133.96 NA
CATB Catskill Financial Corp. 101.78 101.78 74
CAVB Cavalry Bancorp Inc. 147.72 147.72 163
CBCI Calumet Bancorp Inc. 109.95 109.95 135
CBES CBES Bancorp Inc. 115.66 115.66 NA
CBK Citizens First Financial Corp. 112.97 112.97 103
CBSA Coastal Bancorp Inc. 139.17 159.72 NA
CCFH CCF Holding Co. 158.91 158.91 73
CEBK Central Co-operative Bank 120.19 132.35 94
CENB Century Bancorp Inc. 95.16 95.16 11
CFB Commercial Federal Corp. 172.50 194.65 NA
CFCP Coastal Financial Corp. 326.46 326.46 NA
CFFC Community Financial Corp. 141.68 142.25 53
CFKY Columbia Financial of Kentucky NA NA 38
CFNC Carolina Fincorp Inc. 73.29 73.29 44
CFSB CFSB Bancorp Inc. 300.12 300.12 240
CFTP Community Federal Bancorp 107.74 107.74 35
CIBI Community Investors Bancorp 155.32 155.32 26
CITZ CFS Bancorp Inc. NA NA 282
CKFB CKF Bancorp Inc. 95.43 95.43 9
CLAS Classic Bancshares Inc. 98.96 115.06 NA
CMRN Cameron Financial Corp. 92.61 92.61 NA
</TABLE>
<PAGE> 124
Page 26 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 1.78 34.88 29.90 11.72 44.84 20.86
CMSV Community Savings Bnkshrs(MHC) 2.86 87.38 33.16 21.12 32.81 30.58
CNIT CENIT Bancorp Inc. 1.91 35.89 17.50 16.10 16.94 16.15
CNSB CNS Bancorp Inc. 1.63 45.28 32.78 24.76 30.73 27.83
CNY Carver Bancorp Inc. -- 0.00 28.72 6.53 21.54 25.13
COFI Charter One Financial 1.95 38.57 16.12 18.48 13.79 21.73
CONE Conestoga Bancorp, Inc. NA 28.17 NA NA NA NA
COOP Cooperative Bankshares Inc. -- 0.00 22.79 12.31 18.45 20.95
CRSB Crusader Holding Corp. -- 0.00 12.93 28.45 11.03 11.81
CRZY Crazy Woman Creek Bancorp 2.52 48.19 19.13 24.24 20.89 19.13
CSBF CSB Financial Group Inc. -- 0.00 36.21 18.37 26.25 33.87
CVAL Chester Valley Bancorp Inc. 1.40 31.28 21.43 19.45 28.13 20.32
DCBI Delphos Citizens Bancorp Inc. 1.50 13.33 17.78 26.04 17.39 17.78
DCOM Dime Community Bancshares Inc. 1.68 21.10 22.84 17.81 17.46 21.79
DIBK Dime Financial Corp. 1.51 17.31 12.21 16.5 17.26 12.21
DME Dime Bancorp Inc. 0.73 10.97 28.39 14.79 13.63 17.58
DNFC D & N Financial Corp. 0.85 11.72 17.54 11.34 13.99 14.42
DSL Downey Financial Corp. 1.04 15.28 18.13 14.85 14.53 15.25
EBI Equality Bancorp Inc. 1.85 NA NA 11.97 21.67 NA
EBSI Eagle Bancshares 2.84 48.78 18.15 11.23 15.20 18.29
EFBC Empire Federal Bancorp Inc. 2.29 44.78 20.9 32.82 20.59 20.90
EFBI Enterprise Federal Bancorp 3.65 88.50 28.52 16.55 21.39 24.23
EFC EFC Bancorp Inc. -- NA NA NA NA NA
EGLB Eagle BancGroup Inc. -- 0.00 97.37 12.51 25.69 33.64
EMLD Emerald Financial Corp. 1.10 20.31 21.61 21.22 18.75 19.92
EQSB Equitable Federal Savings Bank -- 0.00 17.32 10.03 17.53 16.52
ESBF ESB Financial Corp. 2.12 32.25 16.50 10.07 15.74 16.35
ESBK Elmira Savings Bank (The) 2.46 41.65 21.14 8.15 15.12 17.33
ESX Essex Bancorp Inc. -- 0.00 NM 1.42 NM NM
ETFS East Texas Financial Services 1.49 34.86 36.32 16.88 41.99 31.25
FAB FIRSTFED AMERICA BANCORP INC. 1.19 5.81 24.11 10.61 19.18 19.62
FBBC First Bell Bancorp Inc. 2.32 31.25 13.58 14.87 13.07 13.48
FBCI Fidelity Bancorp Inc. 1.70 NA NA 13.27 18.36 NA
FBCV 1ST Bancorp 0.60 14.39 35.98 18.58 21.69 24.45
FBER 1st Bergen Bancorp 1.14 23.81 20.83 15.04 19.02 20.83
FBHC Fort Bend Holding Corp. 2.00 37.23 31.75 11.41 20.83 21.28
FBNW FirstBank Corp. 1.70 NA NA 19.26 18.88 NA
FBSI First Bancshares Inc. 0.91 12.35 15.81 16.3 18.23 15.44
FCB Falmouth Bancorp Inc. 1.30 27.16 30.83 24.35 23.13 22.84
FCBF FCB Financial Corp. 2.98 50.32 19.54 22.03 16.03 19.03
FCBH Virginia Beach Fed. Financial 1.34 25.00 27.60 14.29 22.42 21.35
FCBK First Coastal Bankshares NA NA NA NA NA NA
FCME First Coastal Corp. -- 0.00 15.00 9.51 14.29 13.64
FDEF First Defiance Financial 2.77 53.03 20.63 18.22 16.25 19.70
FDTR Federal Trust Corp. -- NA NA 12.12 45.31 NA
FED FirstFed Financial Corp. -- 0.00 15.50 10.58 12.5 14.6
FESX First Essex Bancorp Inc. 2.64 40.60 18.48 12.20 15.18 15.98
FFBA First Colorado Bancorp Inc. 2.02 41.46 20.44 28.13 25.75 20.93
FFBH First Federal Bancshares of AR 1.20 21.67 19.70 19.59 18.75 19.38
FFBI First Financial Bancorp Inc. -- 0.00 41.39 12.69 52.60 84.17
FFBS FFBS BanCorp Inc. 2.25 208.33 18.54 25.92 18.54 18.54
FFBZ First Federal Bancorp Inc. 1.17 27.00 25.53 18.23 21.43 24.00
FFCH First Financial Holdings Inc. 1.92 34.21 19.89 16.00 18.86 19.19
FFDB FirstFed Bancorp Inc. 1.93 44.12 21.32 19.19 22.66 21.32
FFDF FFD Financial Corp. 1.67 25.64 34.62 25.99 37.50 15.38
FFED Fidelity Federal Bancorp 3.33 NM NM 9.5 NM NM
FFES First Federal of East Hartford 2.06 30.62 14.6 9.23 14.73 15.79
FFFD North Central Bancshares Inc. 1.75 21.43 14.37 17.23 13.04 13.72
FFFL Fidelity Bankshares Inc. (MHC) 3.46 78.26 27.96 12.04 22.41 22.61
FFHH FSF Financial Corp. 2.88 45.45 16.55 12.31 16.09 15.80
FFHS First Franklin Corp. 1.89 26.45 17.64 11.91 15.88 15.26
FFIC Flushing Financial Corp. 1.39 21.37 17.21 16.5 15.17 17.61
FFKY First Federal Financial Corp. 2.19 36.60 17.43 25.83 16.43 16.75
FFLC FFLC Bancorp Inc. 1.97 31.15 18.43 16.56 15.73 17.55
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 138.95 176.38 776
CMSV Community Savings Bnkshrs(MHC) 190.68 190.68 283
CNIT CENIT Bancorp Inc. 193.73 209.16 NA
CNSB CNS Bancorp Inc. 99.93 99.93 29
CNY Carver Bancorp Inc. 77.78 80.47 NA
COFI Charter One Financial 247.52 262.95 4272
CONE Conestoga Bancorp, Inc. NA NA 105
COOP Cooperative Bankshares Inc. 155 155.00 117
CRSB Crusader Holding Corp. 247.52 261.32 70
CRZY Crazy Woman Creek Bancorp 103.42 103.42 10
CSBF CSB Financial Group Inc. 79.37 84.13 18
CVAL Chester Valley Bancorp Inc. 230.26 230.26 116
DCBI Delphos Citizens Bancorp Inc. 107.82 107.82 NA
DCOM Dime Community Bancshares Inc. 155.23 178.17 252
DIBK Dime Financial Corp. 197.57 202.1 NA
DME Dime Bancorp Inc. 232.51 282.68 6718
DNFC D & N Financial Corp. 203.46 205.06 NA
DSL Downey Financial Corp. 188.69 190.67 1243
EBI Equality Bancorp Inc. 125.00 125.00 NA
EBSI Eagle Bancshares 172.68 172.68 574
EFBC Empire Federal Bancorp Inc. 89.29 89.29 36
EFBI Enterprise Federal Bancorp 166.21 170.45 42
EFC EFC Bancorp Inc. NA NA 107
EGLB Eagle BancGroup Inc. 103.82 103.82 51
EMLD Emerald Financial Corp. 249.51 252.48 119
EQSB Equitable Federal Savings Bank 195.98 195.98 NA
ESBF ESB Financial Corp. 143.58 160.83 NA
ESBK Elmira Savings Bank (The) 127.76 127.76 114
ESX Essex Bancorp Inc. NM 41.31 106
ETFS East Texas Financial Services 97.66 97.66 28
FAB FIRSTFED AMERICA BANCORP INC. 107.07 107.07 NA
FBBC First Bell Bancorp Inc. 146.43 146.43 57
FBCI Fidelity Bancorp Inc. 125.2 125.40 NA
FBCV 1ST Bancorp 205.91 209.42 101
FBER 1st Bergen Bancorp 129.73 129.73 58
FBHC Fort Bend Holding Corp. 159.74 168.92 148
FBNW FirstBank Corp. 114.19 114.19 98
FBSI First Bancshares Inc. 121.42 126.81 73
FCB Falmouth Bancorp Inc. 113.92 113.92 29
FCBF FCB Financial Corp. 152.3 152.30 145
FCBH Virginia Beach Fed. Financial 200.20 200.20 216
FCBK First Coastal Bankshares NA NA NA
FCME First Coastal Corp. 106.19 106.19 NA
FDEF First Defiance Financial 102.69 102.69 162
FDTR Federal Trust Corp. 141.05 141.05 28
FED FirstFed Financial Corp. 176.52 177.62 456
FESX First Essex Bancorp Inc. 171.23 236.90 269
FFBA First Colorado Bancorp Inc. 199.46 203.24 NA
FFBH First Federal Bancshares of AR 133.16 133.16 NA
FFBI First Financial Bancorp Inc. 137.45 137.45 36
FFBS FFBS BanCorp Inc. 147.64 147.64 32
FFBZ First Federal Bancorp Inc. 229.45 229.45 74
FFCH First Financial Holdings Inc. 251.44 251.44 585
FFDB FirstFed Bancorp Inc. 197.55 214.50 75
FFDF FFD Financial Corp. 116.66 116.66 26
FFED Fidelity Federal Bancorp 140.19 140.19 110
FFES First Federal of East Hartford 128.25 128.25 188
FFFD North Central Bancshares Inc. 116.02 133.90 NA
FFFL Fidelity Bankshares Inc. (MHC) 195.78 NA NA
FFHH FSF Financial Corp. 106.14 106.14 94
FFHS First Franklin Corp. 130.55 131.09 52
FFIC Flushing Financial Corp. 128.84 133.78 205
FFKY First Federal Financial Corp. 193.54 203.86 110
FFLC FFLC Bancorp Inc. 129.34 129.34 134
</TABLE>
<PAGE> 125
Page 27 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 2.07 147.73 18.16 16.25 18.38 17.54
FFPB First Palm Beach Bancorp Inc. 1.76 43.27 47.89 11.57 43.21 25.48
FFSL First Independence Corp. 2.55 32.35 13.82 9.12 10.88 13.82
FFSX First Fed SB of Siouxland(MHC) 1.60 40.34 25.86 15.45 22.06 25.21
FFWC FFW Corp. 2.27 28.41 16.09 13.27 14.45 14.02
FFWD Wood Bancorp Inc. 2.22 34.70 21.96 26.23 19.35 18.90
FFYF FFY Financial Corp. 2.22 39.14 18.59 22.19 18.03 18.21
FGHC First Georgia Holding Inc. -- 17.55 31.58 31.85 30.00 31.58
FIBC Financial Bancorp Inc. 1.37 26.16 21.99 18.27 19.84 21.22
FISB First Indiana Corp. 2.10 30.99 22.91 16.72 16.36 16.13
FKAN First Kansas Financial Corp. -- NA NA 15.94 NA NA
FKFS First Keystone Financial 1.39 10.42 13.69 9.01 11.98 11.98
FKKY Frankfort First Bancorp Inc. 5.49 81.25 15.17 17.53 15.17 15.17
FLAG FLAG Financial Corp. 1.47 33.84 32.75 19.13 22.74 24.08
FLFC First Liberty Financial Corp. 1.46 33.33 23.64 17.64 16.06 24.48
FLGS Flagstar Bancorp Inc. 1.04 8.84 12.56 14.34 9.25 12.56
FLKY First Lancaster Bancshares 4.21 94.34 26.89 25.45 25.45 26.89
FMBD First Mutual Bancorp Inc. 1.86 76.19 52.08 15.99 26.86 40.92
FMCO FMS Financial Corp. 0.96 14.07 17.61 13.36 17.36 17.61
FMSB First Mutual Savings Bank 1.38 47.19 14.65 13.07 12.50 12.83
FNGB First Northern Capital Corp. 2.82 47.22 19.03 16.36 16.78 17.71
FOBC Fed One Bancorp 1.59 49.21 31.71 25.05 32.50 30.95
FPRY First Financial Bancorp NA 39.66 NA NA NA NA
FSBI Fidelity Bancorp Inc. 1.80 20.72 14.60 9.76 15.15 14.39
FSFF First SecurityFed Financial -- NA NA 30.23 15.89 NA
FSLA First Source Bancorp Inc. 2.01 NA NA 23.23 NA NA
FSNJ Bayonne Bancshares Inc. 1.67 NA NA 19.40 31.12 NA
FSPT FirstSpartan Financial Corp. 1.60 NA NA 30.82 19.95 NA
FSSB First FS&LA of San Bernardino -- 0.00 NM 3.05 NM NM
FSTC First Citizens Corp. 1.08 NA NA 21.90 16.90 NA
FTF Texarkana First Financial Corp 2.11 30.43 15.14 24.29 13.52 14.40
FTFC First Federal Capital Corp. 1.76 26.04 27.85 18.55 16.54 16.54
FTNB Fulton Bancorp Inc. 1.33 26.92 30 27.92 32.14 23.08
FTSB Fort Thomas Financial Corp. 1.82 35.71 16.37 19.95 20.22 16.37
FWWB First Washington Bancorp Inc. 1.42 21.82 19.83 21.82 17.42 18.40
GAF GA Financial Inc. 3.64 43.48 14.37 13.24 14.78 13.37
GBNK Gaston Federal Bancorp (MHC) 1.52 NA NA 29.27 NA NA
GDW Golden West Financial 0.61 6.98 12.10 12.12 10.23 11.83
GFCO Glenway Financial Corp. 1.95 35.65 20.76 17.19 19.5 20.95
GFED Guaranty Federal Bcshs Inc. -- NA NA 30.24 21.04 NA
GLMR Gilmer Financial Svcs, Inc. -- 0.00 20.77 6.41 NM 117.71
GOSB GSB Financial Corp. 0.88 NA NA 23.73 42.58 NA
GPT GreenPoint Financial Corp. 1.84 29.08 17.38 22.54 16.09 17.73
GSB Golden State Bancorp Inc. -- 330.06 11.87 7.2 11.52 13.20
GSFC Green Street Financial Corp. 3.43 88.24 20.59 33.00 20.59 20.59
GSLA GS Financial Corp. 2.07 NA NA 34.95 21.09 NA
GTPS Great American Bancorp 2.06 67.21 35.04 22.89 29.69 35.04
GUPB GFSB Bancorp Inc. 2.11 33.77 18.04 14.48 16.96 18.04
HALL Hallmark Capital Corp. -- 0.00 15.69 9.68 13.58 14.56
HARB Harbor Florida Bancshares Inc. 2.14 NA NA 28.26 16.84 NA
HARL Harleysville Savings Bank 1.47 21.29 14.85 12.71 14.42 14.85
HARS Harris Financial Inc. (MHC) 1.22 39.50 51.61 26.38 34.74 33.45
HAVN Haven Bancorp Inc. 1.46 30.61 19.9 8.01 39.42 20.92
HBBI Home Building Bancorp 1.25 26.32 22.02 17.63 25.00 21.05
HBEI Home Bancorp of Elgin Inc. 2.71 102.56 37.82 27.50 33.52 37.82
HBFW Home Bancorp 1.13 21.88 22.7 18.52 21.5 22.17
HBNK Highland Bancorp Inc. 1.21 8.25 15.54 16.86 13.13 13.70
HBS Haywood Bancshares Inc. 2.93 32.77 11.58 16.86 10.05 11.58
HBSC Heritage Bancorp Inc. -- NA NA NA NA NA
HCBB HCB Bancshares Inc. 1.52 NA NA 15.66 41.02 NA
HCBC High Country Bancorp Inc. 2.22 NA NA 19.35 21.09 NA
HCFC Home City Financial Corp. 2.44 377.45 14.46 17.10 14.18 14.46
HEMT HF Bancorp Inc. -- 0.00 152.27 10.20 NM NM
HFBC HopFed Bancorp Inc. -- NA NA 31.94 20.54 NA
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 130.94 147.17 NA
FFPB First Palm Beach Bancorp Inc. 169.01 172.53 468
FFSL First Independence Corp. 95.22 95.22 27
FFSX First Fed SB of Siouxland(MHC) 202.70 251.47 NA
FFWC FFW Corp. 141.01 153.27 NA
FFWD Wood Bancorp Inc. 198.66 198.66 48
FFYF FFY Financial Corp. 171.73 171.73 NA
FGHC First Georgia Holding Inc. 390.88 418.12 92
FIBC Financial Bancorp Inc. 216.87 217.78 NA
FISB First Indiana Corp. 182.66 184.58 700
FKAN First Kansas Financial Corp. 80.79 81.83 NA
FKFS First Keystone Financial 134.98 134.98 76
FKKY Frankfort First Bancorp Inc. 103.87 103.87 NA
FLAG FLAG Financial Corp. 219.50 219.50 NA
FLFC First Liberty Financial Corp. 239.94 262.28 549
FLGS Flagstar Bancorp Inc. 258.62 265.75 1461
FLKY First Lancaster Bancshares 95.51 95.51 11
FMBD First Mutual Bancorp Inc. 109.34 140.42 163
FMCO FMS Financial Corp. 219.68 221.24 333
FMSB First Mutual Savings Bank 180.80 180.80 NA
FNGB First Northern Capital Corp. 150.18 150.18 220
FOBC Fed One Bancorp 216.91 225.43 134
FPRY First Financial Bancorp NA NA NA
FSBI Fidelity Bancorp Inc. 142.65 142.65 109
FSFF First SecurityFed Financial 104.52 104.81 70
FSLA First Source Bancorp Inc. 109.4 113.00 221
FSNJ Bayonne Bancshares Inc. 141.59 141.59 96
FSPT FirstSpartan Financial Corp. 126.82 126.82 142
FSSB First FS&LA of San Bernardino 70.36 73.03 51
FSTC First Citizens Corp. 219.40 267.30 NA
FTF Texarkana First Financial Corp 163.28 163.28 38
FTFC First Federal Capital Corp. 247.27 259.82 750
FTNB Fulton Bancorp Inc. 119.52 119.52 NA
FTSB Fort Thomas Financial Corp. 126.49 126.49 20
FWWB First Washington Bancorp Inc. 155.62 167.88 304
GAF GA Financial Inc. 102.91 103.89 200
GBNK Gaston Federal Bancorp (MHC) 144.29 144.29 57
GDW Golden West Financial 162.04 162.04 4593
GFCO Glenway Financial Corp. 179.56 181.14 69
GFED Guaranty Federal Bcshs Inc. 105.12 105.12 82
GLMR Gilmer Financial Svcs, Inc. 71.05 71.05 12
GOSB GSB Financial Corp. 95.28 95.28 NA
GPT GreenPoint Financial Corp. 196.88 348.20 1837
GSB Golden State Bancorp Inc. 116.11 138.32 2961
GSFC Green Street Financial Corp. 94.53 94.53 32
GSLA GS Financial Corp. 83.96 83.96 33
GTPS Great American Bancorp 125.22 125.22 NA
GUPB GFSB Bancorp Inc. 117.38 117.38 23
HALL Hallmark Capital Corp. 117.32 117.32 NA
HARB Harbor Florida Bancshares Inc. 144.17 145.73 358
HARL Harleysville Savings Bank 198.15 198.15 55
HARS Harris Financial Inc. (MHC) 324.87 359.11 558
HAVN Haven Bancorp Inc. 153.79 160.91 995
HBBI Home Building Bancorp 116.45 116.45 13
HBEI Home Bancorp of Elgin Inc. 105.36 105.36 123
HBFW Home Bancorp 155.31 155.31 84
HBNK Highland Bancorp Inc. 214.36 214.36 103
HBS Haywood Bancshares Inc. 113.57 117.28 35
HBSC Heritage Bancorp Inc. NA NA 38
HCBB HCB Bancshares Inc. 90.83 91.91 71
HCBC High Country Bancorp Inc. 98.9 98.9 40
</TABLE>
<PAGE> 126
Page 28 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 2.60 74.07 18.98 27.22 18.30 18.98
HFFC HF Financial Corp. 1.32 19.72 17.28 16.38 13.98 14.96
HFGI Harrington Financial Group 1.14 NM NM 7.10 NM NM
HFNC HFNC Financial Corp. 2.72 36.59 20.98 20.04 13.99 14.33
HFSA Hardin Bancorp Inc. 3.29 49.51 18.68 10.41 18.48 16.50
HFWA Heritage Financial Corp. 1.26 NA NA 38.53 NA NA
HHFC Harvest Home Financial Corp. 3.32 67.74 21.37 13.00 23.66 21.37
HIFS Hingham Instit. for Savings 2.13 30.48 12.62 14.31 11.93 12.50
HLFC Home Loan Financial Corp. -- NA NA 39.79 24.17 NA
HMLK Hemlock Federal Financial Corp. 1.91 NA NA 17.54 19.94 NA
HMNF HMN Financial Inc. 1.11 4.55 22.82 10.76 25.67 16.34
HOMF Home Federal Bancorp 1.52 19.52 17.62 18.75 14.58 13.82
HPBC Home Port Bancorp Inc. 3.30 46.78 13.04 17.15 11.44 14.18
HRBF Harbor Federal Bancorp Inc. 2.59 45.95 20.28 14.71 18.25 19.62
HRBT Hudson River Bancorp -- NA NA NA NA NA
HRZB Horizon Financial Corp. 2.93 75.00 13.76 20.31 13.39 13.39
HSTD Homestead Bancorp Inc. 9.70 NA NA NA NA NA
HTHR Hawthorne Financial Corp. -- 0.00 9.60 5.25 13.57 11.28
HWEN Home Financial Bancorp 1.27 21.28 21.88 17.19 16.41 16.76
HZFS Horizon Financial Svcs Corp. 1.21 18.28 20.66 14.12 13.77 15.99
IBSF IBS Financial Corp. 2.47 72.73 29.43 24.06 28.91 29.43
ICBC Independence Comm. Bank Corp. -- NA NA 21.85 22.92 NA
IFSB Independence Federal Svgs Bank 1.56 29.19 61.54 7.47 6.45 9.94
INBI Industrial Bancorp Inc. 3.12 50.00 17.5 25.22 16.59 17.50
IPSW Ipswich Savings Bank 1.07 14.42 14.42 15.34 15.63 14.42
ITLA ITLA Capital Corp. -- 0.00 11.63 15.07 10.87 11.63
IWBK InterWest Bancorp Inc. 1.99 34.93 21.99 17.88 33.54 19.26
JSB JSB Financial Inc. 3.11 33.04 13.48 32.39 8.64 11.34
JSBA Jefferson Savings Bancorp 1.20 24.00 26.26 18.86 26.56 23.38
JXSB Jacksonville Savings Bk (MHC) 1.85 55.57 49.24 18.28 31.25 31.86
JXVL Jacksonville Bancorp Inc. 2.81 39.68 14.14 17.78 14.37 14.14
KFBI Klamath First Bancorp 2.12 36.02 18.28 16.71 16.35 18.28
KNK Kankakee Bancorp Inc. 1.56 24.74 16.60 10.60 18.83 15.91
KSAV KS Bancorp Inc. NA 63.46 NA NA NA NA
KSBK KSB Bancorp Inc. 0.61 3.55 11.96 13.17 12.13 11.70
KYF Kentucky First Bancorp Inc. 3.51 64.10 18.51 21.59 17.81 18.27
LARK Landmark Bancshares Inc. 2.72 39.01 18.54 14.91 15.76 15.65
LARL Laurel Capital Group Inc. 3.16 32.83 14.62 18.84 14.39 14.39
LFBI Little Falls Bancorp Inc. 1.50 19.48 21.62 11.15 21.05 20.78
LFCO Life Financial Corp. -- 0.00 5.50 15.96 16.91 5.72
LFED Leeds Federal Bankshares (MHC) 3.29 80.82 25.76 29.46 25.00 25.76
LIBB Liberty Bancorp Inc. (MHC) -- NA NA NA NA NA
LISB Long Island Bancorp Inc. 1.54 27.08 26.53 19.39 19.12 21.67
LO Local Financial Corp. -- NA NA 12.07 12.71 NA
LOGN Logansport Financial Corp. 2.93 41.00 14.71 20.96 15.00 15.00
LONF London Financial Corp. 1.57 609.30 19.06 20.52 15.25 17.73
LSBI LSB Financial Corp. 1.27 18.65 19.33 13.74 15.75 16.67
LSBX Lawrence Savings Bank -- 0.00 7.16 17.96 8.73 7.05
LVSB Lakeview Financial Corp. 1.14 7.70 21.78 17.67 7.33 10.84
LXMO Lexington B&L Financial Corp. 2.00 48.39 24.19 15.88 25.00 24.19
MAFB MAF Bancorp Inc. 1.26 13.21 14.64 14.07 13.24 13.99
MARN Marion Capital Holdings 3.87 69.29 17.91 19.99 15.80 17.91
MASB MASSBANK Corp. 2.11 33.56 18.85 18.36 16.27 16.27
MBBC Monterey Bay Bancorp Inc. 0.73 32.50 51.56 14.84 NM 51.56
MBLF MBLA Financial Corp. 2.98 27.59 13.98 12.14 12.90 13.88
MBSP Mitchell Bancorp Inc. 2.32 80.00 34.50 43.04 61.61 34.50
MCBN Mid-Coast Bancorp Inc. 2.00 25.88 16.13 11.30 16.67 14.93
MDBK Medford Bancorp Inc. 2.00 37.45 16.74 15.70 14.71 15.94
MECH MECH Financial Inc. 2.14 9.26 17.39 15.53 14.89 17.28
METF Metropolitan Financial Corp. -- 0.00 15.94 8.49 17.71 13.71
MFBC MFB Corp. 1.43 32.17 18.85 12.98 19.79 18.41
MFFC Milton Federal Financial Corp. 4.62 84.51 22.81 12.37 15.48 18.31
MFLR Mayflower Co-operative Bank 3.48 42.33 16.55 15.27 12.23 14.11
MFSL Maryland Federal Bancorp 1.13 33.52 31.25 22.13 27.78 30.30
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
HCFC Home City Financial Corp. 123.22 123.22 NA
HEMT HF Bancorp Inc. 127.38 148.89 NA
HFBC HopFed Bancorp Inc. 119.29 119.29 NA
HFFB Harrodsburg First Fin Bancorp 95.02 95.02 NA
HFFC HF Financial Corp. 164.98 164.98 268
HFGI Harrington Financial Group 151.73 151.73 84
HFNC HFNC Financial Corp. 118.21 118.21 125
HFSA Hardin Bancorp Inc. 102.97 102.97 28
HFWA Heritage Financial Corp. 133.79 133.79 NA
HHFC Harvest Home Financial Corp. 114.52 114.52 18
HIFS Hingham Instit. for Savings 151.82 151.82 65
HLFC Home Loan Financial Corp. 103.28 103.28 NA
HMLK Hemlock Federal Financial Corp 108.34 108.34 46
HMNF HMN Financial Inc. 110.24 120.09 156
HOMF Home Federal Bancorp 201.46 206.69 261
HPBC Home Port Bancorp Inc. 196.83 196.83 44
HRBF Harbor Federal Bancorp Inc. 115.87 115.87 48
HRBT Hudson River Bancorp NA NA NA
HRZB Horizon Financial Corp. 131.58 131.58 132
HSTD Homestead Bancorp Inc. NA NA 21
HTHR Hawthorne Financial Corp. 123.49 123.49 212
HWEN Home Financial Bancorp 97.46 97.46 20
HZFS Horizon Financial Svcs Corp. 154.95 154.95 26
IBSF IBS Financial Corp. 134.90 134.90 NA
ICBC Independence Comm. Bank Corp. 108.87 115.35 NA
IFSB Independence Federal Svgs Bank 103.49 114.37 NA
INBI Industrial Bancorp Inc. 157.92 157.92 84
IPSW Ipswich Savings Bank 274.73 274.73 69
ITLA ITLA Capital Corp. 144.40 NA NA
IWBK InterWest Bancorp Inc. 250.31 258.18 819
JSB JSB Financial Inc. 133.25 133.25 350
JSBA Jefferson Savings Bancorp 183.48 228.72 NA
JXSB Jacksonville Savings Bk (MHC) 176.06 176.06 83
JXVL Jacksonville Bancorp Inc. 123.02 123.02 NA
KFBI Klamath First Bancorp 106.12 115.88 NA
KNK Kankakee Bancorp Inc. 108.60 127.11 145
KSAV KS Bancorp Inc. NA NA 33
KSBK KSB Bancorp Inc. 165.50 188.36 NA
KYF Kentucky First Bancorp Inc. 126.78 126.78 20
LARK Landmark Bancshares Inc. 114.08 114.08 49
LARL Laurel Capital Group Inc. 177.07 177.07 NA
LFBI Little Falls Bancorp Inc. 109.36 118.43 40
LFCO Life Financial Corp. 126.23 126.23 280
LFED Leeds Federal Bankshares (MHC) 178.57 178.57 27
LIBB Liberty Bancorp Inc. (MHC) NA NA 44
LISB Long Island Bancorp Inc. 217.76 219.59 NA
LO Local Financial Corp. 223.31 241.64 527
LOGN Logansport Financial Corp. 111.44 111.44 14
LONF London Financial Corp. 149.07 149.07 10
LSBI LSB Financial Corp. 153.96 153.96 NA
LSBX Lawrence Savings Bank 148.78 148.78 NA
LVSB Lakeview Financial Corp. 181.67 266.34 NA
LXMO Lexington B&L Financial Corp. 98.88 106.01 NA
MAFB MAF Bancorp Inc. 179.44 200.99 902
MARN Marion Capital Holdings 102.99 105.23 49
MASB MASSBANK Corp. 156.04 158.12 182
MBBC Monterey Bay Bancorp Inc. 129.01 140.91 NA
MBLF MBLA Financial Corp. 89.92 89.92 12
MBSP Mitchell Bancorp Inc. 109.73 109.73 NA
MCBN Mid--Coast Bancorp Inc. 133.33 133.33 25
MDBK Medford Bancorp Inc. 175.59 185.01 253
MECH MECH Financial Inc. 159.91 159.91 NA
METF Metropolitan Financial Corp. 227.27 245.19 313
MFBC MFB Corp. 114.13 114.13 71
MFFC Milton Federal Financial Corp. 103.34 103.34 52
MFLR Mayflower Co--operative Bank 159.61 161.97 51
MFSL Maryland Federal Bancorp 244.8 246.91 NA
</TABLE>
<PAGE> 127
Page 29 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 0.63 10.39 16.61 16.22 16.61 16.40
MIVI Mississippi View Holding Co. 1.60 16.84 21.28 21.57 20.83 21.05
MONT Montgomery Financial Corp. 2.00 NA NA 16.66 16.18 NA
MRKF Market Financial Corp. 2.04 756.00 27.50 34.23 31.25 27.50
MSBF MSB Financial Inc. 1.95 28.04 17.28 23.43 13.46 14.89
MSBK Mutual Savings Bank FSB -- 0.00 NM 6.99 17.86 NM
MWBI Midwest Bancshares Inc. 2.37 18.32 12.86 8.9 9.12 10.31
MWBX MetroWest Bank 1.63 31.48 13.66 15.96 13.17 13.66
MYST Mystic Financial Inc. 1.46 NA NA 18.73 19.10 NA
NASB NASB Financial Inc. 1.53 14.87 14.92 19.98 11.70 12.17
NBCP Niagara Bancorp Inc. (MHC) -- NA NA NA NA NA
NBN Northeast Bancorp 1.51 27.29 18.67 10.08 12.96 17.95
NBSI North Bancshares Inc. 3.11 109.09 42.92 13.21 64.38 39.02
NEIB Northeast Indiana Bancorp 1.57 23.59 15.23 17.55 14.23 15.23
NEP Northeast PA Financial Corp. -- NA NA 17.15 NA NA
NHTB New Hampshire Thrift Bncshrs 3.72 40.44 12.7 10.41 11.52 11.86
NMSB NewMil Bancorp Inc. 2.67 40.54 20.69 12.52 14.29 16.22
NSLB NS&L Bancorp Inc. 2.86 74.63 26.92 19.16 19.02 26.12
NSSY NSS Bancorp Inc. 1.07 17.09 25.66 17.46 21.76 20.83
NTBK Net.B@nk Inc. -- 0.00 NM 89.29 NM NM
NTMG Nutmeg Federal S&LA 1.65 38.04 60.63 10.75 23.32 26.36
NWEQ Northwest Equity Corp. -- 39.19 12.77 15.08 11.30 11.91
NWSB Northwest Bancorp Inc. (MHC) 1.26 35.56 29.51 23.33 26.43 28.2
OCFC Ocean Financial Corp. 2.77 43.75 18.03 17.48 18.82 18.03
OCN Ocwen Financial Corp. -- 0.00 144.23 32.51 NM 40.76
OFCP Ottawa Financial Corp. 1.49 27.98 21.01 15.57 21.01 19.66
OHSL OHSL Financial Corp. 3.15 53.53 20.09 15.99 18.04 18.68
OSFS Ohio State Financial Services -- NA NA 26.32 NA NA
OTFC Oregon Trail Financial Corp. 1.28 NA NA 28.60 21.70 NA
PBCI Pamrapo Bancorp Inc. 4.31 63.86 16.25 18.75 17.57 15.66
PBCT People's Bank (MHC) 3.11 46.06 30.68 19.02 15.00 16.36
PBHC Pathfinder Bancorp Inc. (MHC) 1.30 37.92 38.44 21.98 32.03 30.15
PBKB People's Bancshares Inc. 2.82 28.66 30.11 7.68 11.04 12.12
PBOC PBOC Holdings Inc. -- NA NA 7.86 NM NA
PCBC Perry County Financial Corp. 2.50 45.05 18.02 19.23 19.23 18.02
PDB Piedmont Bancorp Inc. 4.80 68.85 16.95 21.07 16.67 16.39
PEDE Great Pee Dee Bancorp 3.06 NA NA 37.36 17.28 NA
PEEK Peekskill Financial Corp. 2.15 54.55 25.00 24.21 24.63 25.38
PERM Permanent Bancorp Inc. 1.76 31.13 22.71 12.73 22.71 21.98
PFDC Peoples Bancorp 2.05 34.66 17.06 23.71 17.92 17.06
PFED Park Bancorp Inc. -- 0.00 22.44 21.50 18.23 23.03
PFFB PFF Bancorp Inc. -- 0.00 18.55 9.30 15.40 17.08
PFFC Peoples Financial Corp. 5.46 863.28 29.73 17.51 19.64 17.19
PFNC Progress Financial Corp. 0.87 13.61 24.14 15.35 20.98 21.23
PFSB PennFed Financial Services Inc 0.91 12.07 13.73 9.3 13.73 13.25
PFSL Pocahontas Bancorp Inc. 2.74 NA NA 14.46 NA NA
PHBK Peoples Heritage Finl Group 2.22 36.84 14.46 17.76 55.04 17.38
PHFC Pittsburgh Home Financial Corp. 1.66 236.21 13.94 7.67 13.43 12.50
PHSB Peoples Home Savings Bk (MHC) 1.65 NA NA 20.69 30.36 NA
PLSK Pulaski Savings Bank (MHC) 2.02 61.22 28.61 16.70 46.48 30.36
PRBC Prestige Bancorp Inc. 1.12 19.07 22.14 9.90 19.38 21.23
PROV Provident Financial Holdings -- 0.00 44.02 12.03 18.75 18.24
PSBI PSB Bancorp Inc. -- NA NA NA NA NA
PSFC Peoples-Sidney Financial Corp. 1.42 NA NA 33.42 24.69 NA
PSFI PS Financial Inc. 4.22 916.67 15.58 28.14 13.54 23.70
PTRS Potters Financial Corp. 1.66 21.13 16.48 10.76 13.43 14.95
PULB Pulaski Bank, FSB (MHC) 3.44 119.57 42.67 36.05 34.78 34.78
PULS Pulse Bancorp 2.76 45.06 16.86 16.63 16.86 16.86
PVFC PVF Capital Corp. -- 0.00 14.33 16.19 13.28 13.56
PVSA Parkvale Financial Corp. 1.85 26.67 15.42 15.29 14.99 15.42
PWBK Pennwood Bancorp Inc. 2.38 64.63 31.76 17.78 146.88 28.66
QCBC Quaker City Bancorp Inc. -- 0.00 14.96 11 13.51 14.69
QCFB QCF Bancorp Inc. -- 0.00 14.12 27.02 12.71 13.93
QCSB Queens County Bancorp Inc. 2.45 47.48 24.11 35.5 21.22 23.69
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 163.32 163.54 NA
MIVI Mississippi View Holding Co. 118.69 118.69 21
MONT Montgomery Financial Corp. 91.29 91.29 31
MRKF Market Financial Corp. 116.72 116.72 8
MSBF MSB Financial Inc. 140.70 140.70 19
MSBK Mutual Savings Bank FSB 125.79 125.79 NA
MWBI Midwest Bancshares Inc. 124.42 124.42 42
MWBX MetroWest Bank 217.55 217.55 182
MYST Mystic Financial Inc. 103.15 103.15 58
NASB NASB Financial Inc. 235.36 242.41 247
NBCP Niagara Bancorp Inc. (MHC) NA NA 379
NBN Northeast Bancorp 144.03 158.55 138
NBSI North Bancshares Inc. 122.04 122.04 NA
NEIB Northeast Indiana Bancorp 134.57 134.57 NA
NEP Northeast PA Financial Corp. 88.73 88.73 144
NHTB New Hampshire Thrift Bncshrs 127.98 146.46 NA
NMSB NewMil Bancorp Inc. 137.77 137.77 140
NSLB NS&L Bancorp Inc. 103.67 104.42 NA
NSSY NSS Bancorp Inc. 213.25 219.10 149
NTBK Net.B@nk Inc. 427.93 427.93 22
NTMG Nutmeg Federal S&LA 184.27 184.27 NA
NWEQ Northwest Equity Corp. 123.77 123.77 36
NWSB Northwest Bancorp Inc. (MHC) 272.86 303.54 860
OCFC Ocean Financial Corp. 127.58 128.24 247
OCN Ocwen Financial Corp. 266.71 291.60 NA
OFCP Ottawa Financial Corp. 184.24 224.86 256
OHSL OHSL Financial Corp. 144.06 144.06 60
OSFS Ohio State Financial Services 97.15 97.15 14
OTFC Oregon Trail Financial Corp. 98.33 98.33 NA
PBCI Pamrapo Bancorp Inc. 150.29 151.07 84
PBCT People's Bank (MHC) 201.94 234.38 3436
PBHC Pathfinder Bancorp Inc. (MHC) 181.52 212.66 NA
PBKB People's Bancshares Inc. 203.01 211.89 253
PBOC PBOC Holdings Inc. 136.42 136.42 268
PCBC Perry County Financial Corp. 101.57 101.57 NA
PDB Piedmont Bancorp Inc. 127.39 127.39 NA
PEDE Great Pee Dee Bancorp 82.80 82.80 9
PEEK Peekskill Financial Corp. 112.27 112.27 25
PERM Permanent Bancorp Inc. 126.74 128.05 130
PFDC Peoples Bancorp 158.44 158.44 82
PFED Park Bancorp Inc. 105.74 105.74 NA
PFFB PFF Bancorp Inc. 115.62 116.87 536
PFFC Peoples Financial Corp. 101.01 101.01 NA
PFNC Progress Financial Corp. 221.7 NA NA
PFSB PennFed Financial Services Inc 129.53 148.84 223
PFSL Pocahontas Bancorp Inc. 100.11 103.43 NA
PHBK Peoples Heritage Finl Group 239.58 288.40 NA
PHFC Pittsburgh Home Financial Corp. 110.52 111.71 NA
PHSB Peoples Home Savings Bk (MHC) 163.46 163.46 76
PLSK Pulaski Savings Bank (MHC) 141.26 141.26 47
PRBC Prestige Bancorp Inc. 102.38 102.38 47
PROV Provident Financial Holdings 113.45 113.45 NA
PSBI PSB Bancorp Inc. NA NA NA
PSFC Peoples-Sidney Financial Corp. 123.59 123.59 20
PSFI PS Financial Inc. 101.11 101.11 15
PTRS Potters Financial Corp. 126.2 126.20 43
PULB Pulaski Bank, FSB (MHC) 269.59 269.59 NA
PULS Pulse Bancorp 197.14 197.14 NA
PVFC PVF Capital Corp. 224.87 224.87 121
PVSA Parkvale Financial Corp. 199.23 200.22 259
PWBK Pennwood Bancorp Inc. 95.22 95.22 NA
QCBC Quaker City Bancorp Inc. 126.32 126.32 155
QCFB QCF Bancorp Inc. 152.65 152.65 30
QCSB Queens County Bancorp Inc. 311.78 311.78 285
</TABLE>
<PAGE> 128
Page 30 of 40
EXHIBIT 7
Selected Data on all Public Thrifts
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 2.18 34.39 17.52 15.02 17.19 17.52
RCBK Richmond County Financial Corp 1.59 NA NA 24.94 17.12 NA
RELI Reliance Bancshares Inc. -- 0.00 47.19 50.66 33.71 44.94
RELY Reliance Bancorp Inc. 2.27 34.17 16.80 12.22 17.26 15.95
RIVR River Valley Bancorp 1.29 15.38 16.19 15.12 15.18 14.53
ROSE TR Financial Corp. 2.22 29.73 19.05 15.33 14.52 16.22
RSLN Roslyn Bancorp Inc. 1.80 25.00 16.91 20.35 14.80 16.05
RVSB Riverview Bancorp Inc. 1.59 NA NA 34.83 18.01 NA
SBAN SouthBanc Shares Inc. 2.63 NA NA NA NA NA
SBFL SB of the Finger Lakes (MHC) 1.46 75.00 75 22.80 51.56 58.93
SBOS Boston Bancorp (The) NA 10.89 NA NA NA NA
SCBS Southern Community Bancshares 1.88 332.32 19.28 25.12 25.00 19.51
SCCB S. Carolina Community Bancshrs 2.91 83.78 29.73 27.54 25.00 29.73
SFED SFS Bancorp Inc. 1.19 30.00 27.84 18.32 25.96 27
SFFC StateFed Financial Corp. 1.57 30.30 19.32 22.23 19.92 19.32
SFIN Statewide Financial Corp. 2.17 33.33 15.82 13.65 16.33 15.70
SFSL Security First Corp. 1.76 28.70 17.83 23.15 16.53 17.83
SGVB SGV Bancorp Inc. -- 0.00 27.54 9.34 23.90 27.08
SHSB SHS Bancorp Inc. -- NA NA 16.46 16.44 NA
SIB Staten Island Bancorp Inc. 1.64 NA NA 29.15 18.06 NA
SISB SIS Bancorp Inc. 1.50 32.61 18.67 16.16 17.81 23.23
SKAN Skaneateles Bancorp Inc. 1.72 25.79 15.63 8.8 14.51 15.33
SKBO First Carnegie Deposit (MHC) 2.11 NA NA 22.12 27.40 NA
SMBC Southern Missouri Bancorp Inc. 2.78 74.63 25.71 17.13 28.13 26.87
SOBI Sobieski Bancorp Inc. 1.86 47.69 26.95 14.67 25.37 26.54
SOPN First Savings Bancorp Inc. 4.55 72.31 16.92 26.85 16.67 16.92
SPBC St. Paul Bancorp Inc. 2.57 28.17 16.89 17.55 16.19 16.42
SRN Southern Banc Co. 2.39 81.40 34.01 17.02 28.13 34.01
SSB Scotland Bancorp Inc. 2.19 NM 18.25 28.59 28.52 18.25
SSFC South Street Financial Corp. 4.44 NM NA 20.67 37.50 30.00
SSM Stone Street Bancorp Inc. 2.71 56.88 21.25 27.92 26.56 21.25
STFR St. Francis Capital Corp. 1.40 20.15 18.52 11.65 14.49 14.93
STSA Sterling Financial Corp. -- 0.00 19.34 7.51 NM 23.3
SVRN Sovereign Bancorp Inc. 0.51 12.23 18.83 12.63 14.47 26.04
SWCB Sandwich Bancorp Inc. 2.27 54.66 26.62 23.76 27.57 25.00
SZB SouthFirst Bancshares Inc. 3.38 75.34 26.89 10.54 44.38 24.32
TBFC Telebanc Financial Corp. -- 0.00 NA 8.57 NM 57.66
THR Three Rivers Financial Corp. 2.79 37.04 15.75 13.24 16.41 14.58
THRD TF Financial Corp. 2.04 35.20 22.82 10.88 19.58 18.80
THTL Thistle Group Holdings Co. -- NA NA NA NA NA
TPNZ Tappan Zee Financial Inc. 1.45 35.44 25.49 20.50 23.07 24.53
TRIC Tri--County Bancorp Inc. 3.67 53.47 16.22 16.19 16.67 16.67
TSBK Timberland Bancorp Inc. 1.61 NA NA 37.38 15.49 NA
TSBS Peoples Bancorp Inc. 1.15 NA NA 36.12 NA NA
TSH Teche Holding Co. 2.88 43.48 15.24 14.67 14.48 15.11
TWIN Twin City Bancorp 3.06 45.70 18.14 14.66 15.55 14.68
UBMT United Financial Corp. 3.74 NA NA 23.03 NM NA
UCBC Union Community Bancorp 2.50 NA NA 38.35 21.29 NA
UCFC United Community Finl Corp. -- NA NA NA NA NA
UFBS Union Financial Bcshs Inc. 2.13 23.36 18.82 12.19 14.58 14.96
UFRM United Federal Savings Bank 1.37 42.11 36.46 19.03 27.34 30.7
UPFC United PanAm Financial Corp. -- NA NA 39.85 9.13 NA
USAB USABancshares Inc. -- 0.00 150 24.17 12.89 NM
UTBI United Tennessee Bankshares -- NA NA 24.71 NA NA
WAMU Washington Mutual Inc. 2.24 46.34 15.52 13.83 13.38 22.52
WAYN Wayne Savings Bancshares (MHC) 2.70 75.15 33.33 21.99 38.33 30.67
WBST Webster Financial Corp. 1.54 24.55 15.49 11.89 29.69 17.07
WCBI Westco Bancorp Inc. 2.47 37.50 16.57 21.35 17.19 15.63
WCFB Webster City Federal SB (MHC) 4.71 125.00 26.56 37.01 26.56 26.56
WEFC Wells Financial Corp. 3.38 40.80 15.43 17.68 13.87 14.20
WEHO Westwood Homestead Fin. Corp. 3.20 NM NA 25.32 17.36 32.89
WES Westcorp 2.03 125.00 NM 7.11 123.44 35.27
WFI Winton Financial Corp. 1.67 26.06 20.75 16.72 14.94 15.89
WFSL Washington Federal Inc. 3.66 41.78 12.32 23.71 11.63 11.96
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C>
RARB Raritan Bancorp Inc. 204.92 207.39 97
RCBK Richmond County Financial Corp 121.09 121.48 NA
RELI Reliance Bancshares Inc. 101.37 101.37 NA
RELY Reliance Bancorp Inc. 155.87 223.43 NA
RIVR River Valley Bancorp 110.82 112.29 64
ROSE TR Financial Corp. 233.46 233.46 430
RSLN Roslyn Bancorp Inc. 131.88 132.43 479
RVSB Riverview Bancorp Inc. 142.55 147.13 95
SBAN SouthBanc Shares Inc. NA NA 122
SBFL SB of the Finger Lakes (MHC) 269.61 269.61 88
SBOS Boston Bancorp (The) NA NA NA
SCBS Southern Community Bancshares 158.42 158.42 17
SCCB S. Carolina Community Bancshrs 135.14 135.14 13
SFED SFS Bancorp Inc. 148.92 148.92 NA
SFFC StateFed Financial Corp. 124.15 124.15 NA
SFIN Statewide Financial Corp. 138.79 138.98 207
SFSL Security First Corp. 233.75 236.72 145
SGVB SGV Bancorp Inc. 118.35 119.75 99
SHSB SHS Bancorp Inc. 118.89 118.89 27
SIB Staten Island Bancorp Inc. 123.81 126.95 NA
SISB SIS Bancorp Inc. 230.21 230.21 612
SKAN Skaneateles Bancorp Inc. 127.95 131.05 104
SKBO First Carnegie Deposit (MHC) 131.22 131.22 19
SMBC Southern Missouri Bancorp Inc. 110.84 110.84 60
SOBI Sobieski Bancorp Inc. 96.69 96.69 24
SOPN First Savings Bancorp Inc. 117.46 117.46 42
SPBC St. Paul Bancorp Inc. 182.85 183.57 1157
SRN Southern Banc Co. 97.83 98.55 27
SSB Scotland Bancorp Inc. 114.64 114.64 NA
SSFC South Street Financial Corp. 105.88 105.88 38
SSM Stone Street Bancorp Inc. 102.16 102.16 22
STFR St. Francis Capital Corp. 155.16 173.46 427
STSA Sterling Financial Corp. 147.48 374.77 673
SVRN Sovereign Bancorp Inc. 222.58 252.42 2363
SWCB Sandwich Bancorp Inc. 283.13 291.27 148
SZB SouthFirst Bancshares Inc. 105.97 108.70 67
TBFC Telebanc Financial Corp. 343.71 347.33 NA
THR Three Rivers Financial Corp. 97.95 98.25 NA
THRD TF Financial Corp. 131.73 155.22 152
THTL Thistle Group Holdings Co. NA NA 70
TPNZ Tappan Zee Financial Inc. 129.34 129.34 NA
TRIC Tri--County Bancorp Inc. 98.44 98.44 19
TSBK Timberland Bancorp Inc. 115.49 115.49 97
TSBS Peoples Bancorp Inc. 92.43 95.26 NA
TSH Teche Holding Co. 106.07 106.07 166
TWIN Twin City Bancorp 115.70 115.70 NA
UBMT United Financial Corp. 150.87 155.98 NA
UCBC Union Community Bancorp 95.21 95.21 NA
UCFC United Community Finl Corp. NA NA 437
UFBS Union Financial Bcshs Inc. 151.38 NA NA
UFRM United Federal Savings Bank 245.44 245.44 127
UPFC United PanAm Financial Corp. 200.00 200.85 NA
USAB USABancshares Inc. 203.96 205.22 NA
UTBI United Tennessee Bankshares 91.59 91.59 19
WAMU Washington Mutual Inc. 248.07 263.65 19694
WAYN Wayne Savings Bancshares (MHC) 233.74 233.74 100
WBST Webster Financial Corp. 199.16 234.95 1633
WCBI Westco Bancorp Inc. 136.27 136.27 55
WCFB Webster City Federal SB (MHC) 158.14 158.14 21
WEFC Wells Financial Corp. 115.04 115.04 NA
WEHO Westwood Homestead Fin. Corp. 123.03 123.03 25
WES Westcorp 78.37 78.56 NA
WFI Winton Financial Corp. 230.17 233.77 NA
WFSL Washington Federal Inc. 170.57 183.66 662
</TABLE>
<PAGE> 129
Page 31 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 2.91 60.42 22.45 11.58 18.33 22.92
WOFC Western Ohio Financial Corp. 4.35 769.23 176.92 14.79 27.38 176.92
WRNB Warren Bancorp Inc. 3.27 84.81 15.49 22.99 13.75 13.92
WSB Washington Savings Bank, FSB 1.70 23.26 19.58 9.49 16.32 13.66
WSBI Warwick Community Bancorp -- NA NA 26.28 NA NA
WSFS WSFS Financial Corp. 0.66 2.22 13.84 14.63 12.95 13.43
WSTR WesterFed Financial Corp. 2.33 39.61 16.67 11.75 15.36 16.67
WVFC WVS Financial Corp. 3.87 153.06 14.62 18.87 20.39 15.82
WYNE Wayne Bancorp Inc. 0.64 20.00 32.09 22.76 25.94 31.13
YFCB Yonkers Financial Corp. 1.75 24.07 16.49 11.05 14.81 14.81
YFED York Financial Corp. 2.76 47.17 22.47 13.77 18.15 17.81
- -------------------------------------------------------------------------------------------------------
Average 1.73 52.60 23.72 18.10 21.09 20.85
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
<S> <C> <C> <C>
WHGB WHG Bancshares Corp. 75.76 75.76 NA
WOFC Western Ohio Financial Corp. 101.86 108.90 111
WRNB Warren Bancorp Inc. 219.12 219.12 138
WSB Washington Savings Bank, FSB 112.76 112.76 NA
WSBI Warwick Community Bancorp 113.99 113.99 NA
WSFS WSFS Financial Corp. 237.86 239.12 303
WSTR WesterFed Financial Corp. 109.47 134.29 371
WVFC WVS Financial Corp. 169.96 169.96 62
WYNE Wayne Bancorp Inc. 178.16 178.16 61
YFCB Yonkers Financial Corp. 107.31 107.31 71
YFED York Financial Corp. 154.97 154.97 419
- ---------------------------------------------------------------------------------------------
Average 150.25 156.31 369
</TABLE>
<PAGE> 130
Page 32 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
DIVIDENDS
---------------------- -----------------------------------
CURRENT LTM DIVIDEND PRICE/
DIVIDEND PAYOUT LTM PRICE/ PRICE/ PRICE/
YIELD RATIO CORE EPS ASSETS EARNINGS LTM EPS
TICKER SHORT NAME ($) (%) (X) (%) (X) (X)
- ------------------------------------------------------------------ -----------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 2.087 26.38 15.07 16.06 11.06 14.68
EBSI Eagle Bancshares 2.844 48.78 18.15 11.23 15.20 18.29
FAB FIRSTFED AMERICA BANCORP INC. 1.185 5.81 24.11 10.61 19.18 19.62
FNGB First Northern Capital Corp. 2.824 47.22 19.03 16.36 16.78 17.71
FWWB First Washington Bancorp Inc. 1.423 21.82 19.83 21.82 17.42 18.40
KFBI Klamath First Bancorp 2.118 36.02 18.28 16.71 16.35 18.28
MDBK Medford Bancorp Inc. 2.000 37.45 16.74 15.70 14.71 15.94
MECH MECH Financial Inc. 2.143 9.26 17.39 15.53 14.89 17.28
WSTR WesterFed Financial Corp. 2.326 39.61 16.67 11.75 15.36 16.67
YFED York Financial Corp. 2.755 47.17 22.47 13.77 18.15 17.81
- -------------------------------------------------------------------------------------------------------
Average 2.17 31.95 18.77 14.95 15.91 17.47
Median 2.13 36.74 18.22 15.62 15.86 17.76
Maximum 2.84 48.78 24.11 21.82 19.18 19.62
Minimum 1.19 5.81 15.07 10.61 11.06 14.68
COMMUNITY SAVINGS BANKSHARES, INC. 2.57 87.38 NA NA NA NA
VARIANCE TO THE COMPARABLE MEDIAN 0.44 50.65 NA NA NA NA
<CAPTION>
CURRENT PRICING DATA AS OF 08/13/98 PRODUCTIVITY
----------------------------------- ---------------
PRICE/ PRICE/ TANG FULL TIME
PUBLICLY REP PUBLICLY REP EQUIVALENT
BOOK VALUE BOOK VALUE EMPLOYEES
TICKER SHORT NAME (%) (%) MOST RECENT QTR
- ---------------------------------------------------------------------------- ---------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 195.91 195.91 282
EBSI Eagle Bancshares 172.68 172.68 574
FAB FIRSTFED AMERICA BANCORP INC. 107.07 107.07 NA
FNGB First Northern Capital Corp. 150.18 150.18 220
FWWB First Washington Bancorp Inc. 155.62 167.88 304
KFBI Klamath First Bancorp 106.12 115.88 NA
MDBK Medford Bancorp Inc. 175.59 185.01 253
MECH MECH Financial Inc. 159.91 159.91 NA
WSTR WesterFed Financial Corp. 109.47 134.29 371
YFED York Financial Corp. 154.97 154.97 419
- ---------------------------------------------------------------------------------------------
Average 148.75 154.38 346
Median 155.30 157.44 304
Maximum 195.91 195.91 574
Minimum 106.12 107.07 220
COMMUNITY SAVINGS BANKSHARES, INC. NA NA NA
VARIANCE TO THE COMPARABLE MEDIAN NA NA NA
</TABLE>
<PAGE> 131
Page 33 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
Income
------------------------------------------------------------------------------------------
Net Income Core Income Core EPS EPS Net Income Core Income Core EPS EPS
Ticker Short Name LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank 612,697 554,090 NA NA 339,946 325,765 NA NA
%CCMD Chevy Chase Bank, FSB 40,690 -41,098 NA NA 5,298 (18,081) NA NA
AABC Access Anytime Bancorp Inc. 1,496 1,361 1.10 1.23 73 29 0.06 0.02
ABBK Abington Bancorp Inc. 4,520 3,433 0.88 1.17 1,154 632 0.30 0.16
ABCL Alliance Bancorp 11,577 13,864 1.47 1.28 1,741 3,975 0.14 0.32
ABCW Anchor BanCorp Wisconsin 22,001 19,105 1.98 2.28 6,119 5,052 0.65 0.54
AFBC Advance Financial Bancorp 957 897 0.89 0.95 272 247 0.28 0.25
AFED AFSALA Bancorp Inc. 1,204 1,223 0.93 0.92 256 275 0.20 0.21
AHCI Ambanc Holding Co. 2,554 2,045 0.52 0.64 446 441 0.11 0.11
AHM H.F. Ahmanson & Co. 446,666 442,741 3.79 3.82 137,330 128,784 1.12 1.05
ALBC Albion Banc Corp. 380 358 0.48 0.51 90 87 0.12 0.12
ALBK ALBANK Financial Corp. 44,748 44,502 3.23 3.24 10,275 10,263 0.74 0.74
ALLB Alliance Bank (MHC) 2,000 2,000 0.62 0.62 519 519 0.16 0.16
AMFC AMB Financial Corp. 863 549 0.61 0.95 95 134 0.11 0.16
ANA Acadiana Bancshares Inc. 2,944 2,757 1.14 1.22 628 604 0.27 0.26
ANDB Andover Bancorp Inc. 15,768 15,382 2.29 2.35 5,250 5,125 0.78 0.76
ANE Alliance Bncp of New England 2,314 1,117 0.44 0.90 626 332 0.24 0.13
ASBI Ameriana Bancorp 3,784 3,298 1.01 1.15 1,029 855 0.31 0.26
ASBP ASB Financial Corp. 1,071 1,067 0.68 0.68 276 276 0.18 0.18
ASFC Astoria Financial Corp. 83,755 76,634 2.93 3.28 23,663 21,502 0.85 0.77
ATSB AmTrust Capital Corp. 288 125 0.25 0.57 64 (4) 0.13 (0.01)
AVND Avondale Financial Corp. (5,216) (3,843) (1.13) (1.44) 1,766 (662) 0.55 (0.21)
BANC BankAtlantic Bancorp Inc. 26,254 12,081 0.30 0.67 6,391 4,785 0.15 0.11
BCSB BCSB Bankcorp Inc. (MHC) NA NA NA NA 565 565 NA NA
BDJI First Federal Bancorp. 809 815 0.98 0.97 233 233 0.28 0.28
BFD BostonFed Bancorp Inc. 7,128 5,737 1.04 1.29 1,803 1,302 0.33 0.24
BFFC Big Foot Financial Corp. 1,234 1,085 0.46 0.53 178 178 0.07 0.07
BFSB Bedford Bancshares Inc. 1,769 1,757 0.76 0.76 512 510 0.22 0.22
BKC American Bank of Connecticut 8,543 7,211 1.51 1.79 2,258 2,028 0.47 0.42
BKCT Bancorp Connecticut Inc. 6,484 5,509 0.99 1.15 1,751 1,507 0.31 0.27
BKUNA BankUnited Financial Corp. 8,424 6,893 0.41 0.53 2,292 2,016 0.13 0.11
BNKU Bank United Corp. 110,570 103,862 3.22 3.42 23,913 21,674 0.74 0.67
BPLS Bank Plus Corp. 7,553 11,434 0.55 0.37 (1,176) 54 (0.06) --
BRBI Blue River Bancshares Inc. NA NA NA NA (57,343) (57,343) -- NA
BRKL Brookline Bancorp (MHC) 15,539 14,729 NA NA 5,143 4,338 0.18 0.15
BTHL Bethel Bancorp 1,435 1,141 0.74 0.96 302 263 0.19 0.16
BVCC Bay View Capital Corp. 14,549 24,703 1.44 0.81 5,234 7,793 0.25 0.37
BWFC Bank West Financial Corp. 1,076 864 0.33 0.42 208 203 0.08 0.08
BYFC Broadway Financial Corp. 641 295 0.28 0.67 145 129 0.15 0.13
BYS Bay State Bancorp (1,671) 755 NA NA 514 506 0.22 0.22
CAFI Camco Financial Corp. 6,454 4,904 0.95 1.25 2,009 1,398 0.35 0.24
CASB Cascade Financial Corp. 3,525 3,168 0.67 0.75 1,000 791 0.21 0.17
CASH First Midwest Financial Inc. 2,855 2,573 0.93 1.04 893 837 0.33 0.31
CATB Catskill Financial Corp. 3,853 3,793 0.90 0.91 974 950 0.24 0.23
CAVB Cavalry Bancorp Inc. NA NA NA NA 1,510 1,204 0.22 0.18
CBCI Calumet Bancorp Inc. 9,550 9,627 2.81 2.79 1,405 1,370 0.41 0.40
CBES CBES Bancorp Inc. 1,054 755 0.80 1.11 300 163 0.33 0.18
CBK Citizens First Financial Corp. 1,978 1,235 0.46 0.76 510 350 0.20 0.14
CBSA Coastal Bancorp Inc. 15,426 15,816 2.03 1.98 3,979 3,979 0.51 0.51
CCFH CCF Holding Co. 185 (15) (0.03) 0.21 39 20 0.04 0.02
CEBK Central Co-operative Bank 3,047 2,364 1.21 1.56 1,033 575 0.53 0.30
CENB Century Bancorp Inc. 1,343 1,343 1.19 1.19 154 154 0.14 0.14
CFB Commercial Federal Corp. 67,333 83,240 2.00 1.62 18,175 20,143 0.43 0.48
CFCP Coastal Financial Corp. 6,689 5,390 0.83 1.03 1,762 1,423 0.27 0.22
CFFC Community Financial Corp. 1,805 1,809 0.70 0.70 443 443 0.16 0.16
CFKY Columbia Financial of Kentucky NA NA NA NA 153 153 NA NA
CFNC Carolina Fincorp Inc. 1,051 1,203 0.65 0.59 25 199 0.01 0.08
CFSB CFSB Bancorp Inc. 11,609 10,474 1.21 1.34 3,209 2,794 0.37 0.32
CFTP Community Federal Bancorp 2,895 2,527 0.58 0.67 886 652 0.21 0.15
CIBI Community Investors Bancorp 905 905 0.70 0.70 227 227 0.17 0.17
CITZ CFS Bancorp Inc. 1,776 1,595 NA NA NA NA NA NA
CKFB CKF Bancorp Inc. 826 826 1.00 1.00 175 175 0.22 0.22
CLAS Classic Bancshares Inc. 980 744 0.61 0.79 197 196 0.16 0.16
CMRN Cameron Financial Corp 2,460 2,417 1.00 1.01 672 661 0.28 0.28
</TABLE>
<PAGE> 132
Page 34 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CMSB Commonwealth Bancorp Inc. 13,340 9,460 0.60 0.86 1,469 1,513 0.10 0.10
CMSV Community Savings Bnkshrs(MHC) 5,237 4,839 0.95 1.03 1,232 1,232 0.24 0.24
CNIT CENIT Bancorp Inc. 6,362 5,854 1.20 1.30 1,504 1,317 0.31 0.27
CNSB CNS Bancorp Inc. 870 742 0.45 0.53 203 141 0.12 0.08
CNY Carver Bancorp Inc. 1,054 932 0.42 0.48 318 318 0.14 0.14
COFI Charter One Financial 173,432 226,022 1.78 1.32 68,361 65,586 0.52 0.50
CONE Conestoga Bancorp, Inc. 3,210 2,607 0.58 0.71 742 334 0.16 0.07
COOP Cooperative Bankshares Inc. 2,391 2,196 0.68 0.74 669 668 0.21 0.21
CRSB Crusader Holding Corp. 3,736 3,401 1.16 1.27 1,260 1,124 0.34 0.30
CRZY Crazy Woman Creek Bancorp 738 741 0.83 0.83 172 172 0.19 0.19
CSBF CSB Financial Group Inc. 261 248 0.29 0.31 84 86 0.10 0.10
CVAL Chester Valley Bancorp Inc. 3,626 3,442 1.47 1.55 655 735 0.28 0.31
DCBI Delphos Citizens Bancorp Inc. 1,593 1,593 0.90 0.90 400 400 0.23 0.23
DCOM Dime Community Bancshares Inc. 13,098 12,523 1.04 1.09 4,035 3,709 0.34 0.31
DIBK Dime Financial Corp. 13,916 13,939 2.60 2.60 2,482 2,600 0.46 0.48
DME Dime Bancorp Inc. 176,541 108,962 0.96 1.55 58,266 16,833 0.50 0.14
DNFC D & N Financial Corp. 15,331 12,550 1.34 1.63 3,982 3,237 0.42 0.34
DSL Downey Financial Corp. 57,147 48,265 1.70 2.02 14,988 11,339 0.53 0.40
EBI Equality Bancorp Inc. 1,402 48 NA NA 351 (12) 0.15 (0.01)
EBSI Eagle Bancshares 7,210 7,253 1.24 1.23 2,163 2,186 0.37 0.37
EFBC Empire Federal Bancorp Inc. 1,609 1,609 0.67 0.67 403 403 0.17 0.17
EFBI Enterprise Federal Bancorp 2,275 1,952 0.96 1.13 677 474 0.32 0.22
EFC EFC Bancorp Inc. 2,714 2,714 NA NA 800 800 NA NA
EGLB Eagle BancGroup Inc. 616 219 0.19 0.55 202 41 0.18 0.04
EMLD Emerald Financial Corp. 6,902 6,326 0.59 0.64 1,877 1,754 0.17 0.16
EQSB Equitable Federal Savings Bank 2,276 2,160 1.66 1.74 544 500 0.41 0.38
ESBF ESB Financial Corp. 5,945 5,863 1.03 1.04 1,548 1,497 0.27 0.26
ESBK Elmira Savings Bank (The) 1,073 883 1.23 1.50 308 306 0.43 0.43
ESX Essex Bancorp Inc. (470) (469) (2.06) (2.06) 137 137 (0.29) (0.29)
ETFS East Texas Financial Services 632 548 0.37 0.43 123 99 0.08 0.06
FAB FIRSTFED AMERICA BANCORP INC. 6,867 5,569 0.70 0.86 1,694 1,400 0.22 0.18
FBBC First Bell Bancorp Inc. 7,549 7,491 1.27 1.28 1,958 1,958 0.33 0.33
FBCI Fidelity Bancorp Inc. NA NA NA NA 934 934 0.32 0.32
FBCV 1ST Bancorp 1,987 1,358 1.23 1.81 559 365 0.51 0.33
FBER 1st Bergen Bancorp 2,112 2,112 0.84 0.84 550 550 0.23 0.23
FBHC Fort Bend Holding Corp. 2,071 1,377 0.63 0.94 572 379 0.24 0.16
FBNW FirstBank Corp. 1,931 1,097 NA NA 451 162 0.25 0.09
FBSI First Bancshares Inc. 1,826 1,789 0.83 0.85 404 440 0.18 0.20
FCB Falmouth Bancorp Inc. 1,094 832 0.60 0.81 281 203 0.20 0.14
FCBF FCB Financial Corp. 5,844 5,700 1.51 1.55 1,745 1,467 0.46 0.39
FCBH Virginia Beach Fed. Financial NA NA NA NA 1,011 711 NA NA
FCBK First Coastal Bankshares 4,260 2,999 0.59 0.84 1,028 560 0.20 0.11
FCME First Coastal Corp. 1,221 1,102 0.80 0.88 292 262 0.21 0.19
FDEF First Defiance Financial 5,381 5,117 0.63 0.66 1,545 1,451 0.20 0.19
FDTR Federal Trust Corp. NA NA NA NA 92 86 0.02 0.02
FED FirstFed Financial Corp. 29,364 27,749 1.29 1.37 8,637 7,854 0.40 0.36
FESX First Essex Bancorp Inc. 10,487 9,045 1.15 1.33 2,749 1,872 0.35 0.24
FFBA First Colorado Bancorp Inc. 20,080 20,401 1.26 1.23 4,200 5,471 0.25 0.33
FFBH First Federal Bancshares of AR 5,553 5,486 1.18 1.20 1,462 1,422 0.31 0.30
FFBI First Financial Bancorp Inc. 124 251 0.61 0.30 49 (2) 0.12 --
FFBS FFBS BanCorp Inc. 1,824 1,824 1.20 1.20 451 451 0.30 0.30
FFBZ First Federal Bancorp Inc. 1,701 1,598 0.47 0.50 478 435 0.14 0.13
FFCH First Financial Holdings Inc. 15,415 14,903 1.10 1.14 4,101 3,872 0.29 0.27
FFDB FirstFed Bancorp Inc. 1,653 1,653 0.68 0.68 386 386 0.16 0.16
FFDF FFD Financial Corp. 1,580 717 0.52 1.17 165 165 0.12 0.12
FFED Fidelity Federal Bancorp (779) (599) (0.14) (0.20) (2,010) (1,734) (0.64) (0.55)
FFES First Federal of East Hartford 5,835 6,300 2.26 2.09 1,577 1,577 0.56 0.56
FFFD North Central Bancshares Inc. 4,290 4,090 1.27 1.33 1,116 1,116 0.35 0.35
FFFL Fidelity Bankshares Inc. (MHC) 7,805 6,304 0.93 1.15 1,993 1,504 0.29 0.22
FFHH FSF Financial Corp. 3,177 3,003 1.05 1.10 767 683 0.27 0.24
FFHS First Franklin Corp. 1,878 1,620 0.90 1.04 443 399 0.25 0.23
FFIC Flushing Financial Corp. 9,486 9,748 1.34 1.31 2,743 2,695 0.38 0.37
FFKY First Federal Financial Corp. 6,334 6,090 1.47 1.53 1,629 1,543 0.39 0.37
FFLC FFLC Bancorp Inc. 3,966 3,763 0.99 1.04 1,096 1,096 0.29 0.29
</TABLE>
<PAGE> 133
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EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFOH Fidelity Financial of Ohio 4,784 4,588 0.85 0.88 1,134 1,115 0.21 0.21
FFPB First Palm Beach Bancorp Inc. 8,018 4,308 0.83 1.56 1,163 526 0.23 0.10
FFSL First Independence Corp. 846 846 0.85 0.85 268 268 0.27 0.27
FFSX First Fed SB of Siouxland(MHC) 3,418 3,325 1.16 1.19 987 848 0.34 0.29
FFWC FFW Corp. 1,900 1,659 1.15 1.32 453 259 0.32 0.18
FFWD Wood Bancorp Inc. 2,358 2,037 0.74 0.86 577 464 0.21 0.17
FFYF FFY Financial Corp. 7,729 7,567 1.94 1.98 1,918 1,858 0.50 0.48
FGHC First Georgia Holding Inc. 1,970 1,970 0.38 0.38 530 530 0.10 0.10
FIBC Financial Bancorp Inc. 2,887 2,799 1.66 1.72 779 753 0.46 0.44
FISB First Indiana Corp. 18,727 13,317 1.00 1.42 4,617 2,949 0.35 0.22
FKAN First Kansas Financial Corp. NA NA NA NA 180 176 NA NA
FKFS First Keystone Financial 2,725 2,413 1.05 1.20 684 569 0.30 0.25
FKKY Frankfort First Bancorp Inc. 1,580 1,580 0.96 0.96 421 421 0.24 0.24
FLAG FLAG Financial Corp. 2,777 2,062 0.50 0.68 962 612 0.18 0.11
FLFC First Liberty Financial Corp. 9,910 10,323 0.87 0.84 3,756 3,167 0.32 0.27
FLGS Flagstar Bancorp Inc. 30,046 30,046 2.15 2.15 10,183 10,183 0.73 0.73
FLKY First Lancaster Bancshares 487 487 0.53 0.53 122 122 0.14 0.14
FMBD First Mutual Bancorp Inc. 1,369 1,050 0.33 0.42 516 420 0.16 0.13
FMCO FMS Financial Corp. 5,263 5,255 0.71 0.71 1,336 1,335 0.18 0.18
FMSB First Mutual Savings Bank 4,852 4,249 0.99 1.13 1,277 1,077 0.29 0.24
FNGB First Northern Capital Corp. 6,551 6,060 0.67 0.72 1,730 1,562 0.19 0.17
FOBC Fed One Bancorp 3,003 2,915 1.23 1.26 725 665 0.30 0.28
FPRY First Financial Bancorp 1,313 985 1.09 1.45 257 141 0.28 0.15
FSBI Fidelity Bancorp Inc. 2,791 2,744 1.37 1.39 665 661 0.33 0.33
FSFF First SecurityFed Financial NA NA NA NA 1,453 1,453 0.24 0.24
FSLA First Source Bancorp Inc. 11,558 11,246 NA NA 3,879 3,852 NA NA
FSNJ Bayonne Bancshares Inc. 4,655 4,672 NA NA 1,114 1,128 0.12 0.12
FSPT FirstSpartan Financial Corp. 7,540 7,318 NA NA 1,869 1,713 0.47 0.43
FSSB First FS&LA of San Bernardino (1,202) (1,205) (3.67) (3.67) (32) (32) (0.10) (0.10)
FSTC First Citizens Corp. NA NA NA NA 1,339 1,036 0.44 0.34
FTF Texarkana First Financial Corp 3,162 3,015 1.75 1.84 842 811 0.49 0.47
FTFC First Federal Capital Corp. 18,921 11,163 0.57 0.96 4,698 2,000 0.24 0.10
FTNB Fulton Bancorp Inc. 1,283 990 0.60 0.78 223 180 0.14 0.11
FTSB Fort Thomas Financial Corp. 1,211 1,211 0.84 0.84 250 250 0.17 0.17
FWWB First Washington Bancorp Inc. 13,122 12,227 1.16 1.25 3,375 3,074 0.33 0.30
GAF GA Financial Inc. 8,174 7,558 1.07 1.15 1,802 1,683 0.26 0.24
GBNK Gaston Federal Bancorp (MHC) NA NA NA NA 610 610 NA NA
GDW Golden West Financial 402,808 393,944 6.80 6.95 116,950 104,550 2.01 1.80
GFCO Glenway Financial Corp. 2,534 2,557 1.09 1.08 684 707 0.29 0.30
GFED Guaranty Federal Bcshs Inc. 2,841 2,797 NA NA 887 888 0.15 0.15
GLMR Gilmer Financial Svcs, Inc. 23 130 0.68 0.12 (54) (57) (0.30) (0.32)
GOSB GSB Financial Corp. 923 866 NA NA 175 175 0.08 0.08
GPT GreenPoint Financial Corp. 145,849 149,207 2.00 1.96 39,415 39,204 0.54 0.54
GSB Golden State Bancorp Inc. 128,749 142,280 1.98 1.78 39,300 41,171 0.51 0.54
GSFC Green Street Financial Corp. 2,805 2,805 0.68 0.68 701 701 0.17 0.17
GSLA GS Financial Corp. 1,861 1,661 NA NA 499 331 0.16 0.11
GTPS Great American Bancorp 1,008 1,008 0.61 0.61 275 275 0.18 0.18
GUPB GFSB Bancorp Inc. 946 946 0.79 0.79 251 253 0.21 0.21
HALL Hallmark Capital Corp. 2,799 2,611 0.90 0.97 761 657 0.26 0.22
HARB Harbor Florida Bancshares Inc. 16,329 15,398 NA NA 5,335 4,922 0.18 0.17
HARL Harleysville Savings Bank 3,477 3,477 2.02 2.02 902 902 0.52 0.52
HARS Harris Financial Inc. (MHC) 18,221 11,919 0.35 0.54 4,475 3,447 0.13 0.10
HAVN Haven Bancorp Inc. 8,858 9,399 1.03 0.98 1,231 1,911 0.13 0.20
HBBI Home Building Bancorp 329 316 1.09 1.14 69 64 0.24 0.22
HBEI Home Bancorp of Elgin Inc. 2,437 2,437 0.39 0.39 692 692 0.11 0.11
HBFW Home Bancorp 2,957 2,886 1.25 1.28 749 746 0.33 0.33
HBNK Highland Bancorp Inc. 7,331 6,473 2.67 3.03 1,928 1,928 0.79 0.79
HBS Haywood Bancshares Inc. 2,201 2,197 1.77 1.77 635 631 0.51 0.51
HBSC Heritage Bancorp Inc. NA NA NA NA 651 652 NA NA
HCBB HCB Bancshares Inc. 673 649 NA NA 215 209 0.08 0.08
HCBC High Country Bancorp Inc. 314 350 NA NA 195 195 0.16 0.16
HCFC Home City Financial Corp. 946 945 1.02 1.02 240 240 0.26 0.26
HEMT HF Bancorp Inc. 111 623 0.11 0.02 (654) (11) (0.10) --
HFBC HopFed Bancorp Inc. 2,915 2,915 NA NA 794 794 0.21 0.21
</TABLE>
<PAGE> 134
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EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HFFB Harrodsburg First Fin Bancorp 1,480 1,477 0.81 0.81 377 377 0.21 0.21
HFFC HF Financial Corp. 6,473 5,621 1.23 1.42 1,751 1,217 0.38 0.26
HFGI Harrington Financial Group -1,859 -688 -0.21 -0.57 (1,326) (566) (0.40) (0.17)
HFNC HFNC Financial Corp. 13,469 9,167 0.56 0.82 3,444 2,873 0.21 0.18
HFSA Hardin Bancorp Inc. 825 721 0.91 1.03 186 168 0.23 0.21
HFWA Heritage Financial Corp. NA NA NA NA 1,159 672 NA NA
HHFC Harvest Home Financial Corp. 558 553 0.62 0.62 127 127 0.14 0.14
HIFS Hingham Instit. for Savings 2,819 2,791 2.08 2.10 743 715 0.55 0.53
HLFC Home Loan Financial Corp. 919 919 NA NA 315 315 0.15 0.15
HMLK Hemlock Federal Financial Corp 1,707 1,709 NA NA 404 404 0.21 0.21
HMNF HMN Financial Inc. 5,219 3,706 0.63 0.88 784 817 0.14 0.15
HOMF Home Federal Bancorp 10,390 8,168 1.49 1.90 2,490 1,954 0.45 0.35
HPBC Home Port Bancorp Inc. 3,160 3,428 1.86 1.71 979 908 0.53 0.49
HRBF Harbor Federal Bancorp Inc. 1,669 1,607 0.90 0.93 439 439 0.25 0.25
HRBT Hudson River Bancorp 2,831 2,759 NA NA 945 906 NA NA
HRZB Horizon Financial Corp. 8,374 8,158 1.09 1.12 2,143 2,021 0.28 0.26
HSTD Homestead Bancorp Inc. 341 222 NA NA 128 88 NA NA
HTHR Hawthorne Financial Corp. 10,096 11,639 1.81 1.54 1,833 1,830 0.32 0.32
HWEN Home Financial Bancorp 393 301 0.36 0.47 100 66 0.12 0.08
HZFS Horizon Financial Svcs Corp. 789 613 0.72 0.93 230 190 0.27 0.22
IBSF IBS Financial Corp. 5,955 5,955 0.55 0.55 1,564 1,564 0.14 0.14
ICBC Independence Comm. Bank Corp. NA NA NA NA 10,909 10,897 0.15 0.15
IFSB Independence Federal Svgs Bank 2,048 322 0.26 1.61 788 134 0.62 0.11
INBI Industrial Bancorp Inc. 5,362 5,359 1.10 1.10 1,394 1,391 0.29 0.29
IPSW Ipswich Savings Bank 2,605 2,598 1.04 1.04 612 612 0.24 0.24
ITLA ITLA Capital Corp. 13,774 13,774 1.72 1.72 3,708 3,708 0.46 0.46
IWBK InterWest Bancorp Inc. 19,228 17,266 1.83 2.09 3,273 4,604 0.30 0.42
JSB JSB Financial Inc. 46,383 38,962 3.82 4.54 15,186 12,976 1.49 1.27
JSBA Jefferson Savings Bancorp 9,806 8,696 0.89 1.00 2,196 1,787 0.22 0.18
JXSB Jacksonville Savings Bk (MHC) 969 629 0.33 0.51 251 100 0.13 0.05
JXVL Jacksonville Bancorp Inc. 3,138 3,138 1.26 1.26 756 756 0.31 0.31
KFBI Klamath First Bancorp 8,959 8,959 0.93 0.93 2,491 2,491 0.26 0.26
KNK Kankakee Bancorp Inc. 2,878 2,763 1.86 1.94 602 563 0.41 0.38
KSAV KS Bancorp Inc. 1,221 1,221 1.30 1.30 252 252 0.27 0.27
KSBK KSB Bancorp Inc. 1,726 1,689 1.38 1.41 435 435 0.34 0.34
KYF Kentucky First Bancorp Inc. 981 971 0.77 0.78 246 246 0.20 0.20
LARK Landmark Bancshares Inc. 2,446 2,066 1.19 1.41 584 436 0.35 0.26
LARL Laurel Capital Group Inc. 3,051 3,004 1.30 1.32 768 759 0.33 0.33
LFBI Little Falls Bancorp Inc. 1,870 1,789 0.74 0.77 459 459 0.19 0.19
LFCO Life Financial Corp. 13,804 14,367 2.09 2.01 1,151 1,151 0.17 0.17
LFED Leeds Federal Bankshares (MHC) 3,432 3,431 0.66 0.66 864 863 0.17 0.17
LIBB Liberty Bancorp Inc. (MHC) 1,553 1,467 NA NA 275 207 NA NA
LISB Long Island Bancorp Inc. 55,918 45,636 1.96 2.40 15,856 13,332 0.68 0.57
LO Local Financial Corp. NA NA NA NA 4,525 4,308 0.22 0.21
LOGN Logansport Financial Corp. 1,286 1,303 1.02 1.00 325 323 0.25 0.25
LONF London Financial Corp. 411 381 0.80 0.86 121 117 0.25 0.24
LSBI LSB Financial Corp. 1,763 1,517 1.63 1.89 470 370 0.50 0.39
LSBX Lawrence Savings Bank 9,188 9,053 2.00 2.03 1,883 1,841 0.41 0.40
LVSB Lakeview Financial Corp. 8,762 4,425 1.01 2.03 3,041 1,332 0.75 0.33
LXMO Lexington B&L Financial Corp. 628 624 0.62 0.62 157 157 0.15 0.15
MAFB MAF Bancorp Inc. 37,399 35,828 1.52 1.59 9,780 9,130 0.42 0.39
MARN Marion Capital Holdings 2,324 2,324 1.27 1.27 641 641 0.36 0.36
MASB MASSBANK Corp. 10,785 9,307 2.52 2.92 2,706 2,306 0.73 0.62
MBBC Monterey Bay Bancorp Inc. 1,294 1,301 0.32 0.32 (65) 72 (0.02) 0.02
MBLF MBLA Financial Corp. 1,926 1,912 1.44 1.45 505 500 0.39 0.39
MBSP Mitchell Bancorp Inc. 433 433 0.50 0.50 63 63 0.07 0.07
MCBN Mid-Coast Bancorp Inc. 475 439 0.62 0.67 107 95 0.15 0.13
MDBK Medford Bancorp Inc. 11,953 11,358 2.39 2.51 3,238 2,885 0.68 0.61
MECH MECH Financial Inc. 8,603 8,533 1.61 1.62 2,526 2,513 0.47 0.47
METF Metropolitan Financial Corp. 6,592 5,641 0.80 0.93 1,306 1,071 0.18 0.15
MFBC MFB Corp. 2,152 2,098 1.26 1.29 488 469 0.30 0.29
MFFC Milton Federal Financial Corp. 1,499 1,215 0.57 0.71 449 303 0.21 0.14
MFLR Mayflower Co-operative Bank 1,494 1,271 1.39 1.63 431 337 0.47 0.37
MFSL Maryland Federal Bancorp 8,861 8,587 1.28 1.32 2,434 2,206 0.36 0.33
</TABLE>
<PAGE> 135
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EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid-Iowa Financial Corp. 1,377 1,361 0.76 0.77 350 350 0.19 0.19
MIVI Mississippi View Holding Co. 744 732 0.94 0.95 177 175 0.24 0.24
MONT Montgomery Financial Corp. 831 831 NA NA 257 257 0.17 0.17
MRKF Market Financial Corp. 616 616 0.50 0.50 143 143 0.11 0.11
MSBF MSB Financial Inc. 1,223 1,055 0.81 0.94 312 263 0.26 0.22
MSBK Mutual Savings Bank FSB (,179) (2,867) (0.67) (1.94) 591 282 0.14 0.07
MWBI Midwest Bancshares Inc. 1,448 1,164 1.05 1.31 409 291 0.37 0.26
MWBX MetroWest Bank 7,750 7,637 0.54 0.54 2,017 1,953 0.14 0.14
MYST Mystic Financial Inc. 1,547 1,377 NA NA 489 460 0.18 0.17
NASB NASB Financial Inc. 12,085 9,866 4.39 5.38 3,133 2,776 1.40 1.24
NBCP Niagara Bancorp Inc. (MHC) 11,310 10,720 NA NA 2,946 2,946 NA NA
NBN Northeast Bancorp 1,985 1,952 0.75 0.78 732 708 0.27 0.26
NBSI North Bancshares Inc. 453 410 0.30 0.33 66 53 0.05 0.04
NEIB Northeast Indiana Bancorp 2,308 2,308 1.42 1.42 587 587 0.38 0.38
NEP Northeast PA Financial Corp. NA NA NA NA 991 982 NA NA
NHTB New Hampshire Thrift Bncshrs 2,890 2,694 1.27 1.36 749 684 0.35 0.32
NMSB NewMil Bancorp Inc. 2,989 2,347 0.58 0.74 833 169 0.21 0.04
NSLB NS&L Bancorp Inc. 415 403 0.65 0.67 147 135 0.23 0.21
NSSY NSS Bancorp Inc. 5,959 4,812 1.90 2.34 1,438 1,224 0.56 0.48
NTBK Net.B@nk Inc. (3,928) (3,928) (1.59) (1.59) (151) (151) (0.02) (0.02)
NTMG Nutmeg Federal S&LA 929 581 0.20 0.46 242 119 0.13 0.03
NWEQ Northwest Equity Corp. 1,190 1,106 1.38 1.48 322 297 0.39 0.36
NWSB Northwest Bancorp Inc. (MHC) 21,322 20,587 0.43 0.45 5,825 5,149 0.12 0.11
OCFC Ocean Financial Corp. 13,731 13,709 0.96 0.96 3,202 3,097 0.23 0.22
OCN Ocwen Financial Corp. 27,546 6,918 0.13 0.46 (37,899) (9,418) (0.62) (0.15)
OFCP Ottawa Financial Corp. 7,642 7,082 1.16 1.24 1,831 1,563 0.29 0.25
OHSL OHSL Financial Corp. 2,075 1,912 0.79 0.85 546 499 0.22 0.20
OSFS Ohio State Financial Services 340 340 NA NA 80 80 NA NA
OTFC Oregon Trail Financial Corp. 3,157 3,157 NA NA 776 776 0.18 0.18
PBCI Pamrapo Bancorp Inc. 4,693 4,532 1.60 1.66 1,040 1,040 0.37 0.37
PBCT People's Bank (MHC) 102,600 54,565 0.88 1.65 28,700 14,855 0.45 0.23
PBHC Pathfinder Bancorp Inc. (MHC) 1,459 1,133 0.40 0.51 351 324 0.12 0.11
PBKB People's Bancshares Inc. 5,515 2,203 0.66 1.64 1,528 498 0.45 0.15
PBOC PBOC Holdings Inc. NA NA NA NA (6,446) (6,446) (0.57) (0.57)
PCBC Perry County Financial Corp. 857 857 1.11 1.11 207 207 0.26 0.26
PDB Piedmont Bancorp Inc. 1,643 1,590 0.59 0.61 419 377 0.15 0.13
PEDE Great Pee Dee Bancorp NA NA NA NA 341 341 0.17 0.17
PEEK Peekskill Financial Corp. 1,854 1,896 0.67 0.66 461 461 0.17 0.17
PERM Permanent Bancorp Inc. 2,645 2,548 0.60 0.62 657 632 0.15 0.14
PFDC Peoples Bancorp 4,282 4,282 1.26 1.26 1,006 1,006 0.30 0.30
PFED Park Bancorp Inc. 1,692 1,722 0.78 0.76 531 530 0.24 0.24
PFFB PFF Bancorp Inc. 16,624 15,346 0.93 1.01 4,327 4,053 0.28 0.26
PFFC Peoples Financial Corp. 886 496 0.37 0.64 188 129 0.14 0.10
PFNC Progress Financial Corp. 3,998 3,506 0.73 0.83 1,121 1,009 0.21 0.19
PFSB PennFed Financial Services Inc 11,198 10,855 1.12 1.16 2,722 2,721 0.28 0.28
PFSL Pocahontas Bancorp Inc. 2,706 2,688 NA NA 931 951 NA NA
PHBK Peoples Heritage Finl Group 66,944 88,804 1.37 1.14 8,310 30,718 0.09 0.33
PHFC Pittsburgh Home Financial Corp 2,146 1,922 1.04 1.16 495 494 0.27 0.27
PHSB Peoples Home Savings Bk (MHC) 1,749 1,612 NA NA 374 356 0.14 0.13
PLSK Pulaski Savings Bank (MHC) 999 1,062 0.52 0.49 162 243 0.08 0.12
PRBC Prestige Bancorp Inc. 704 680 0.70 0.73 195 185 0.20 0.19
PROV Provident Financial Holdings 5,020 2,101 0.46 1.11 1,199 279 0.27 0.06
PSBI PSB Bancorp Inc. 724 475 NA NA 170 13 NA NA
PSFC Peoples-Sidney Financial Corp. 1,268 1,268 NA NA 332 332 0.20 0.20
PSFI PS Financial Inc. 905 1,558 0.73 0.48 414 399 0.21 0.20
PTRS Potters Financial Corp. 946 847 0.88 0.97 266 214 0.27 0.22
PULB Pulaski Bank, FSB (MHC) 1,969 1,586 0.75 0.92 499 367 0.23 0.17
PULS Pulse Bancorp 5,562 5,562 1.72 1.72 1,403 1,403 0.43 0.43
PVFC PVF Capital Corp. 5,151 4,883 1.78 1.88 1,334 1,205 0.48 0.43
PVSA Parkvale Financial Corp. 11,118 11,119 2.10 2.10 2,879 2,881 0.54 0.54
PWBK Pennwood Bancorp Inc. 279 250 0.37 0.41 10 10 0.02 0.02
QCBC Quaker City Bancorp Inc. 6,610 6,496 1.12 1.14 1,803 1,781 0.31 0.31
QCFB QCF Bancorp Inc. 2,595 2,564 2.16 2.19 682 651 0.60 0.57
QCSB Queens County Bancorp Inc. 23,668 23,314 1.69 1.72 6,623 6,627 0.48 0.48
</TABLE>
<PAGE> 136
Page 38 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RARB Raritan Bancorp Inc. 3,985 3,972 1.57 1.57 1,026 1,021 0.40 0.40
RCBK Richmond County Financial Corp 4,526 17,228 NA NA 5,473 5,467 0.22 0.22
RELI Reliance Bancshares Inc. 471 457 0.20 0.21 148 148 0.07 0.07
RELY Reliance Bancorp Inc. 18,729 17,768 1.89 1.99 4,443 4,443 0.46 0.46
RIVR River Valley Bancorp 1,287 1,145 1.05 1.17 321 259 0.28 0.23
ROSE TR Financial Corp. 39,047 33,319 1.89 2.22 10,764 8,575 0.62 0.49
RSLN Roslyn Bancorp Inc. 46,089 43,785 1.12 1.18 12,303 11,635 0.32 0.30
RVSB Riverview Bancorp Inc. 4,436 4,219 NA NA 1,257 1,200 0.21 0.20
SBAN SouthBanc Shares Inc. 2,132 2,284 NA NA 757 710 NA NA
SBFL SB of the Finger Lakes (MHC) 995 767 0.22 0.28 276 197 0.08 0.06
SBOS Boston Bancorp (The) 37,152 18,104 3.40 6.98 14,315 5,073 2.69 0.95
SCBS Southern Community Bancshares 798 803 0.83 0.82 154 154 0.16 0.16
SCCB S. Carolina Community Bancshrs 463 463 0.74 0.74 122 122 0.22 0.22
SFED SFS Bancorp Inc. 1,143 1,107 0.97 1.00 298 298 0.26 0.26
SFFC StateFed Financial Corp. 1,017 1,017 0.66 0.66 252 252 0.16 0.16
SFIN Statewide Financial Corp. 5,507 5,462 1.28 1.29 1,304 1,304 0.31 0.31
SFSL Security First Corp. 9,773 9,751 1.15 1.15 2,652 2,624 0.31 0.31
SGVB SGV Bancorp Inc. 1,487 1,458 0.59 0.60 431 432 0.17 0.17
SHSB SHS Bancorp Inc. 662 618 NA NA 203 163 0.27 0.22
SIB Staten Island Bancorp Inc. 25,128 41,017 NA NA 10,943 10,883 0.27 0.27
SISB SIS Bancorp Inc. 12,063 14,964 2.29 1.84 4,225 3,984 0.60 0.57
SKAN Skaneateles Bancorp Inc. 1,578 1,539 1.04 1.06 418 403 0.28 0.27
SKBO First Carnegie Deposit (MHC) 969 811 NA NA 283 233 0.13 0.11
SMBC Southern Missouri Bancorp Inc. 1,064 1,110 0.70 0.67 251 349 0.16 0.22
SOBI Sobieski Bancorp Inc. 490 485 0.64 0.65 125 120 0.17 0.16
SOPN First Savings Bancorp Inc. 5,258 5,258 1.30 1.30 1,330 1,330 0.33 0.33
SPBC St. Paul Bancorp Inc. 49,481 47,665 1.38 1.42 12,516 11,661 0.36 0.34
SRN Southern Banc Co. 514 514 0.43 0.43 149 149 0.13 0.13
SSB Scotland Bancorp Inc. 842 840 0.50 0.50 139 139 0.08 0.08
SSFC South Street Financial Corp. 1,257 1,230 NA 0.30 234 234 0.06 0.06
SSM Stone Street Bancorp Inc. 1,512 1,512 0.80 0.80 301 301 0.16 0.16
STFR St. Francis Capital Corp. 14,044 11,277 2.16 2.68 3,554 2,983 0.69 0.58
STSA Sterling Financial Corp. 6,794 8,099 1.06 0.88 (959) 1,214 (0.13) 0.16
SVRN Sovereign Bancorp Inc. 90,829 115,113 0.83 0.60 40,946 34,640 0.27 0.23
SWCB Sandwich Bancorp Inc. 5,008 4,704 2.32 2.47 1,162 1,067 0.56 0.51
SZB SouthFirst Bancshares Inc. 642 569 0.66 0.73 92 60 0.10 0.07
TBFC Telebanc Financial Corp. 2,760 554 NA 0.40 179 (351) -- NA
THR Three Rivers Financial Corp. 835 773 1.00 1.08 188 163 0.24 0.21
THRD TF Financial Corp. 4,427 3,589 1.03 1.25 989 782 0.30 0.24
THTL Thistle Group Holdings Co. 3,354 1,895 NA NA NA NA NA NA
TPNZ Tappan Zee Financial Inc. 1,134 1,070 0.76 0.79 302 302 0.21 0.21
TRIC Tri-County Bancorp Inc. 888 907 0.74 0.72 227 215 0.18 0.17
TSBK Timberland Bancorp Inc. 4,448 4,169 NA NA 1,451 1,395 0.24 0.23
TSBS Peoples Bancorp Inc. 8,434 7,313 NA NA 3,499 3,467 NA NA
TSH Teche Holding Co. 3,750 3,713 1.14 1.15 996 967 0.30 0.29
TWIN Twin City Bancorp 1,108 900 0.72 0.89 258 223 0.21 0.18
UBMT United Financial Corp. 1,276 1,335 NA NA 495 554 -- NA
UCBC Union Community Bancorp NA NA NA NA 471 471 0.16 0.16
UCFC United Community Finl Corp. 13,047 13,017 NA NA NA NA NA NA
UFBS Union Financial Bcshs Inc. 1,547 1,237 0.93 1.17 406 316 0.30 0.23
UFRM United Federal Savings Bank 1,854 1,554 0.48 0.57 533 503 0.16 0.15
UPFC United PanAm Financial Corp. NA NA NA NA 4,213 (7,028) 0.26 (0.43)
USAB USABancshares Inc. 135 237 0.11 -0.03 413 388 0.32 0.30
UTBI United Tennessee Bankshares NA NA NA NA 318 318 NA NA
WAMU Washington Mutual Inc. 628,688 903,632 2.38 1.64 261,271 250,402 0.69 0.66
WAYN Wayne Savings Bancshares (MHC) 1,849 1,695 0.69 0.75 388 357 0.15 0.14
WBST Webster Financial Corp. 49,428 55,414 1.84 1.67 9,400 14,647 0.24 0.37
WCBI Westco Bancorp Inc. 4,711 4,424 1.66 1.76 1,058 1,122 0.40 0.42
WCFB Webster City Federal SB (MHC) 1,332 1,332 0.64 0.64 328 328 0.16 0.16
WEFC Wells Financial Corp. 2,401 2,236 1.15 1.25 622 553 0.32 0.28
WEHO Westwood Homestead Fin. Corp. 919 1,200 NA 0.38 416 228 0.18 0.10
WES Westcorp 7,422 -32,682 -1.19 0.28 618 (9,270) 0.02 (0.30)
WFI Winton Financial Corp. 3,901 2,997 0.72 0.94 1,060 807 0.25 0.19
WFSL Washington Federal Inc. 111,026 108,058 2.04 2.10 28,452 27,391 0.54 0.52
</TABLE>
<PAGE> 137
PAGE 39 of 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WHGB WHG Bancshares Corp. 634 644 0.49 0.48 197 197 0.15 0.15
WOFC Western Ohio Financial Corp. 265 233 0.13 0.13 470 317 0.21 0.14
WRNB Warren Bancorp Inc. 6,294 5,633 0.71 0.79 1,619 1,451 0.20 0.18
WSB Washington Savings Bank, FSB 1,957 1,335 0.30 0.43 410 343 0.09 0.08
WSBI Warwick Community Bancorp NA NA NA NA (600) 510 NA NA
WSFS WSFS Financial Corp. 17,039 16,406 1.31 1.35 4,456 4,282 0.35 0.34
WSTR WesterFed Financial Corp. 7,260 7,258 1.29 1.29 1,993 1,764 0.35 0.31
WVFC WVS Financial Corp. 3,492 3,765 1.06 0.98 687 960 0.19 0.27
WYNE Wayne Bancorp Inc. 1,873 1,812 0.97 1.00 553 491 0.30 0.27
YFCB Yonkers Financial Corp. 2,967 2,693 0.97 1.08 727 549 0.27 0.20
YFED York Financial Corp. 10,015 7,906 0.84 1.06 2,435 1,964 0.26 0.21
- -----------------------------------------------------------------------------------------------------------------------------------
Average 14,563 14,351 1.03 1.12 4,326 3,931 0.28 0.24
</TABLE>
<PAGE> 138
PAGE 40 OF 40
EXHIBIT 7
SELECTED DATA ON ALL PUBLIC THRIFTS
<TABLE>
<CAPTION>
INCOME
--------------------------------------------------------------------------------------
NET INCOME CORE INCOME CORE EPS EPS NET INCOME CORE INCOME CORE EPS EPS
TICKER SHORT NAME LTM LTM LTM LTM MRQ MRQ MRQ MRQ
- -----------------------------------------------------------------------------------------------------------------------------------
COMPARABLE THRIFT DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANDB Andover Bancorp Inc. 15,768 15,382 2.29 2.35 5,250 5,125 0.78 0.76
EBSI Eagle Bancshares 7,210 7,253 1.24 1.23 2,163 2,186 0.37 0.37
FAB FIRSTFED AMERICA BANCORP INC. 6,867 5,569 0.70 0.86 1,694 1,400 0.22 0.18
FNGB First Northern Capital Corp. 6,551 6,060 0.67 0.72 1,730 1,562 0.19 0.17
FWWB First Washington Bancorp Inc. 13,122 12,227 1.16 1.25 3,375 3,074 0.33 0.30
KFBI Klamath First Bancorp 8,959 8,959 0.93 0.93 2,491 2,491 0.26 0.26
MDBK Medford Bancorp Inc. 11,953 11,358 2.39 2.51 3,238 2,885 0.68 0.61
MECH MECH Financial Inc. 8,603 8,533 1.61 1.62 2,526 2,513 0.47 0.47
WSTR WesterFed Financial Corp. 7,260 7,258 1.29 1.29 1,993 1,764 0.35 0.31
YFED York Financial Corp. 10,015 7,906 0.84 1.06 2,435 1,964 0.26 0.21
- ---------------------------------------------------------------------------------------------------------------------------------
Average 9,631 9,051 1.31 1.38 2,690 2,496 0.39 0.36
Median 8,781 8,220 1.20 1.24 2,463 2,339 0.34 0.31
Maximum 15,768 15,382 2.39 2.51 5,250 5,125 0.78 0.76
Minimum 6,551 5,569 0.67 0.72 1,694 1,400 0.19 0.17
COMMUNITY SAVINGS BANKSHARES, INC. 5,132 5,132 NA NA NA NA NA NA
VARIANCE TO THE COMPARABLE MEDIAN (3,649) (3,325) NA NA NA NA NA NA
</TABLE>
<PAGE> 139
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------------
Current Price in Relation to
Current Current ---------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%CAL California Federal Bank NA NA NA NA NA NA NA NA
%CCMD Chevy Chase Bank, FSB NA NA NA NA NA NA NA NA
AABC Access Anytime Bancorp Inc. 10.38 12.63 43.23 8.43 9.43 136.33 136.33 10.80
ABBK Abington Bancorp Inc. 18.63 65.78 15.52 16.20 19.01 192.01 211.41 12.07
ABCL Alliance Bancorp 22.00 251.56 39.29 17.19 14.97 139.24 NA 12.16
ABCW Anchor BanCorp Wisconsin 44.88 400.29 17.26 19.68 22.66 305.48 310.12 19.45
AFBC Advance Financial Bancorp 16.38 17.58 14.62 17.24 18.40 112.78 112.78 15.89
AFCB Affifiated Community Bancorp 31.50 209.95 16.76 17.21 18.42 174.42 173.19 18.70
AFED AFSALA Bancorp Inc. 16.50 22.74 20.63 17.93 17.74 100.30 100.30 13.71
AHCI Ambanc Holding Co. 15.25 64.94 34.66 23.83 29.33 106.87 106.87 12.49
AHM H.F. Ahmanson & Co. 61.94 6,983.36 13.83 16.21 16.34 216.19 283.60 13.22
ALBC Albion Banc Corp. 8.75 6.58 18.23 17.16 18.21 104.54 104.54 8.88
ALBK ALBANK Financial Corp. 65.38 864.40 22.09 20.18 20.24 227.79 287.74 20.93
ALLB Alliance Bank (MHC) 21.50 70.37 33.59 34.68 34.68 237.31 237.31 25.36
AMFC AMB Financial Corp. 16.63 15.22 37.78 17.50 27.25 107.81 107.81 13.67
ANA Acadiana Bancshares Inc. 22.00 55.12 20.37 18.03 19.30 125.57 125.57 18.49
ANDB Andover Bancorp Inc. 34.38 222.78 11.02 14.63 15.01 195.20 195.20 16.00
ANE Alliance Bncp of New England 12.50 28.65 13.02 13.89 28.41 158.23 161.71 12.35
ASBI Ameriana Bancorp 19.63 63.83 15.83 17.07 19.43 141.19 143.88 16.43
ASBP ASB Financial Corp. 12.31 20.14 17.10 18.11 18.11 115.29 115.29 17.52
ASFC Astoria Financial Corp. 48.00 1,273.47 14.12 14.63 16.38 142.69 199.17 11.00
ATSB AmTrust Capital Corp. 15.50 7.91 29.81 27.19 62.00 105.73 106.82 11.45
AVND Avondale Financial Corp. 15.13 44.52 6.87 NM NM 106.44 106.44 8.90
BANC BankAtlantic Bancorp Inc. 10.69 375.56 17.81 15.93 35.63 153.56 198.66 10.43
BCSB BCSB Bankcorp Inc. (MHC) 11.38 69.55 NA NA NA NA NA NA
BDJI First Federal Bancorp. 19.00 18.97 23.75 20.88 20.65 153.85 153.85 16.76
BFD BostonFed Bancorp Inc. 21.38 115.28 16.19 16.57 20.55 132.11 136.84 10.89
BFFC Big Foot Financial Corp. 16.25 40.83 58.04 30.66 35.33 106.63 106.63 19.49
BFSB Bedford Bancshares Inc. 14.38 33.03 16.34 18.91 18.91 159.37 159.37 21.11
BKC American Bank of Connecticut 25.50 119.51 13.56 14.25 16.89 201.58 207.82 17.43
BKCT Bancorp Connecticut Inc. 17.25 88.20 13.91 15.00 17.42 180.06 180.06 17.81
BKUNA BankUnited Financial Corp. 11.63 189.86 22.36 21.93 28.35 123.28 142.11 5.40
BNKU Bank United Corp. 44.53 1,406.98 15.04 13.02 13.83 210.15 231.33 10.74
BPLS Bank Plus Corp. 10.00 193.87 NM 27.03 18.18 104.71 114.16 4.52
BRBI Blue River Bancshares Inc. 10.13 15.19 NM NA NA NA NA NA
BRKL Brookline Bancorp (MHC) 13.38 389.15 18.58 NA NA 141.24 141.24 46.59
BTHL Bethel Bancorp 12.50 15.15 16.43 13.02 16.89 91.17 108.60 6.89
BVCC Bay View Capital Corp. 25.56 518.32 25.56 31.56 17.75 131.56 202.88 9.06
BWFC Bank West Financial Corp. 11.94 31.32 37.31 28.42 36.18 133.68 133.68 17.37
BYFC Broadway Financial Corp. 9.72 9.07 16.20 14.51 34.72 69.69 69.69 7.06
BYS Bay State Bancorp 25.38 64.33 28.84 NA NA 93.15 93.15 23.37
CAFI Camco Financial Corp. 17.25 94.33 12.32 13.80 18.16 165.71 176.56 16.39
CASB Cascade Financial Corp. 15.00 63.74 16.30 21.43 22.73 210.08 210.08 14.66
CASH First Midwest Financial Inc. 21.38 55.58 16.19 20.55 22.98 130.34 145.90 13.27
CATB Catskill Financial Corp. 16.75 75.14 17.45 18.41 18.61 106.55 106.55 24.27
CAVB Cavalry Bancorp Inc. 19.88 149.82 22.59 NA NA 148.65 148.65 44.09
CBCI Calumet Bancorp Inc. 30.50 95.92 18.60 10.93 10.85 109.95 109.95 19.50
CBES CBES Bancorp Inc. 19.48 18.31 19.48 16.80 20.09 110.52 110.52 15.72
CBK Citizens First Financial Corp. 17.50 44.38 21.88 23.03 38.04 114.60 114.60 15.86
CBSA Coastal Bancorp Inc. 23.56 178.20 11.55 11.90 11.61 137.09 180.28 5.98
CCFH CCF Holding Co. 20.00 17.94 83.33 105.26 NM 155.04 155.04 12.54
CEBK Central Co-operative Bank 23.50 46.18 11.08 13.06 19.42 125.53 138.24 12.28
CENB Century Bancorp Inc. 14.50 18.43 25.89 12.18 12.18 99.45 99.45 17.65
CFB Commercial Federal Corp. 27.00 1,135.20 33.75 15.70 13.30 184.55 211.10 12.76
CFCP Coastal Financial Corp. 19.00 118.71 18.27 19.19 23.17 337.48 337.48 20.35
CFFC Community Financial Corp. 13.75 35.32 21.48 19.64 19.64 137.91 138.47 19.14
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- ------------------------------------------------------------
<S> <C> <C> <C>
%CAL California Federal Bank NA NA
%CCMD Chevy Chase Bank, FSB NA NA
AABC Access Anytime Bancorp Inc. 0.00 0.00
ABBK Abington Bancorp Inc. 1.07 26.09
ABCL Alliance Bancorp 2.00 34.38
ABCW Anchor BanCorp Wisconsin 0.89 14.47
AFBC Advance Financial Bancorp 1.95 42.11
AFCB Affiliated Community Bancorp 1.91 39.34
AFED AFSALA Bancorp Inc. 1.70 22.83
AHCI Ambanc Holding Co. 1.57 25.00
AHM H.F. Ahmanson & Co. 1.42 23.04
ALBC Albion Banc Corp. 1.37 32.67
ALBK ALBANK Financial Corp. 1.29 23.15
ALLB Alliance Bank (MHC) 1.67 58.06
AMFC AMB Financial Corp. 1.68 28.42
ANA Acadiana Bancshares Inc. 2.00 34.43
ANDB Andover Bancorp Inc. 2.10 26.38
ANE Alliance Bncp of New England 1.60 14.80
ASBI Ameriana Bancorp 3.26 54.78
ASBP ASB Financial Corp. 3.25 58.82
ASFC Astoria Financial Corp. 1.67 21.34
ATSB AmTrust Capital Corp. 1.29 35.09
AVND Avondale Financial Corp. 0.00 0.00
BANC BankAtlantic Bancorp Inc. 0.90 NM
BCSB BCSB Bankcorp Inc. (MHC) 0.00 NA
BDJI First Federal Bancorp. 0.00 0.00
BFD BostonFed Bancorp Inc. 1.87 24.03
BFFC Big Foot Financial Corp. 0.00 0.00
BFSB Bedford Bancshares Inc. 2.23 38.16
BKC American Bank of Connecticut 2.98 45.25
BKCT Bancorp Connecticut Inc. 3.13 44.78
BKUNA BankUnited Financial Corp. 0.00 0.00
BNKU Bank United Corp. 1.44 18.13
BPLS Bank Plus Corp. 0.00 0.00
BRBI Blue River Bancshares Inc. 0.00 NA
BRKL Brookline Bancorp (MHC) 1.50 NA
BTHL Bethel Bancorp 2.56 20.83
BVCC Bay View Capital Corp. 1.57 34.57
BWFC Bank West Financial Corp. 2.01 49.21
BYFC Broadway Financial Corp. 1.91 27.64
BYS Bay State Bancorp 0.00 NA
CAFI Camco Financial Corp. 2.24 28.20
CASB Cascade Financial Corp. 0.00 0.00
CASH First Midwest Financial Inc. 2.25 43.27
CATB Catskill Financial Corp. 1.91 34.07
CAVB Cavalry Bancorp Inc. 1.01 NA
CBCI Calumet Bancorp Inc. 0.00 0.00
CBES CBES Bancorp Inc. 2.46 34.48
CBK Citizens First Financial Cor. 0.00 0.00
CBSA Coastal Bancorp Inc. 0.00 12.12
CCFH CCF Holding Co. 3.20 359.32
CEBK Central Co-operative Bank 1.36 20.51
CENB Century Bancorp Inc. 4.69 896.37
CFB Commercial Federal Corp. 0.82 31.83
CFCP Coastal Financial Corp. 1.47 27.27
CFFC Community Financial Corp. 2.04 40.00
</TABLE>
<PAGE> 140
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Current Price in Relation to
Current Current ----------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFKY Columbia Financial of Kentucky 14.13 37.73 NA NA NA NA NA NA
CFNC Carolina Fincorp Inc. 10.50 20.01 NM 17.80 16.15 75.54 73.34 16.89
CFSB CFSB Bancorp Inc. 24.00 196.01 16.22 17.91 19.83 297.03 297.00 23.12
CFTP Community Federal Bancorp 16.50 72.57 19.64 24.63 28.45 111.11 111.11 27.57
CIBI Community Investors Bancorp 14.88 18.83 21.88 21.25 21.25 177.72 177.72 19.52
CITZ CFS Bancorp Inc. 10.63 189.70 NA NA NA NA NA NA
CKFB CKF Bancorp Inc. 18.38 15.50 20.88 18.38 18.38 106.28 106.28 24.69
CLAS Classic Bancshares Inc. 16.75 21.77 23.26 20.18 26.17 106.69 124.35 16.61
CMRN Cameron Financial Corp 16.75 42.90 16.75 17.09 17.27 93.52 93.52 19.43
CMSB Commonwealth Bancorp Inc. 18.25 282.39 45.63 21.22 30.42 141.36 179.45 11.92
CMSV Community Savings Bnkshrs(MHC) 35.00 178.50 36.46 33.98 36.84 211.86 211.86 23.47
CNIT CENIT Bancorp Inc. 21.00 104.93 17.50 16.15 17.36 196.81 213.41 14.23
CNSB CNS Bancorp Inc. 15.75 24.73 24.61 29.17 31.50 107.58 107.58 26.56
CNY Carver Bancorp Inc. 12.13 28.06 60.63 25.26 28.87 78.99 81.87 6.41
COFI Charter One Financial 30.88 3,940.72 14.84 23.39 17.35 266.39 283.00 19.89
CONE Conestoga Bancorp, Inc. NA NA NA NA NA NA NA NA
COOP Cooperative Bankshares Inc. 15.38 46.55 18.30 20.78 22.61 153.75 153.75 12.21
CRSB Crusader Holding Corp. 16.38 59.77 11.37 12.31 13.53 257.47 271.56 29.58
CRZY Crazy Woman Creek Bancorp 16.38 15.37 21.55 19.73 19.73 106.68 106.68 25.01
CSBF CSB Financial Group Inc. 10.63 8.92 26.56 34.27 36.64 80.31 85.14 18.59
CVAL Chester Valley Bancorp Inc. 31.25 68.40 19.05 20.56 22.64 229.11 229.11 19.86
DCBI Delphos Citizens Bancorp Inc. 16.13 29.81 17.53 17.92 17.92 108.66 108.66 26.24
DCOM Dime Community Bancshares Inc. 23.19 282.35 17.05 21.27 22.20 151.56 173.95 17.39
DIBK Dime Financial Corp. 29.75 157.50 16.17 11.44 11.44 185.13 189.37 15.46
DME Dime Bancorp Inc. 27.81 3,157.70 13.91 17.94 28.97 237.31 288.52 15.10
DNFC D & N Financial Corp. 24.38 223.21 14.31 14.93 18.19 211.04 212.70 11.76
DSL Downey Financial Corp. 31.13 874.76 14.68 15.41 18.31 190.60 192.61 15.00
EBI Equality Bancorp Inc. 12.75 31.70 22.77 NA NA 122.71 122.71 12.40
EBSI Eagle Bancshares 24.13 139.62 16.30 19.61 19.46 185.15 185.15 12.04
EFBC Empire Federal Bancorp Inc. 14.38 37.26 21.14 21.46 21.46 91.68 91.68 33.70
EFBI Enterprise Federal Bancorp 28.50 63.01 22.27 25.22 29.69 173.04 177.46 17.20
EFC EFC Bancorp Inc. 11.94 89.43 NA NA NA NA NA NA
EGLB Eagle BancGroup Inc. 18.75 22.07 26.04 34.09 98.63 105.22 105.22 12.68
EMLD Emerald Financial Corp. 12.00 123.29 17.65 18.75 20.34 234.83 237.62 19.97
EQSB Equitable Federal Savings Bank 28.75 35.17 17.53 16.52 17.32 195.98 195.98 10.00
ESBF ESB Financial Corp. 18.38 105.15 17.01 18.01 18.01 155.33 174.01 11.18
ESBK Elmira Savings Bank (The) 27.00 19.62 15.70 19.15 23.89 135.00 135.00 8.54
ESX Essex Bancorp Inc. 2.88 3.05 NM NM NM NM 41.31 1.42
ETFS East Texas Financial Services 14.06 21.65 43.95 32.70 38.01 102.20 102.20 17.66
FAB FIRSTFED AMERICA BANCORP INC. 17.88 147.86 20.31 20.78 25.54 113.42 113.42 11.24
FBBC First Bell Bancorp Inc. 17.50 114.18 13.26 13.67 13.78 148.56 148.56 15.09
FBCI Fidelity Bancorp Inc. 23.00 65.17 17.97 NA NA 122.54 122.73 12.99
FBCV 1ST Bancorp 43.50 47.41 21.32 24.03 35.37 200.42 205.87 18.26
FBER 1st Bergen Bancorp 18.30 50.49 22.02 23.13 21.17 136.63 136.63 15.98
FBHC Fort Bend Holding Corp. 20.00 36.34 20.83 21.28 31.75 159.74 168.92 11.41
FBNW FirstBank Corp. 18.22 37.44 18.88 NA NA 114.19 114.19 19.26
FBSI First Bancshares Inc. 13.25 29.32 38.40 15.59 15.96 122.57 128.02 16.46
FCB Falmouth Bancorp Inc. 18.63 27.09 25.87 25.51 32.68 115.04 115.04 25.77
FCBF FCB Financial Corp. 29.88 115.53 16.24 19.27 19.78 154.23 154.23 22.31
FCBH Virginia Beach Fed. Financial 17.94 89.37 22.42 21.33 27.60 200.20 200.20 14.29
FCBK First Coastal Bankshares NA NA NA NA NA NA NA NA
FCME First Coastal Corp. 12.13 16.50 14.43 13.78 15.16 107.30 107.30 9.61
FDEF First Defiance Financial 13.50 109.66 17.76 21.43 22.13 107.66 107.66 18.99
FDTR Federal Trust Corp. 3.94 19.46 49.23 NA NA 153.23 153.23 13.17
FED FirstFed Financial Corp. 20.00 424.30 12.50 14.60 15.50 176.52 177.62 10.58
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- ----------------------------------------------------------------
<S> <C> <C> <C>
CFKY Columbia Financial of Kentucky 1.98 NA
CFNC Carolina Fincorp Inc. 2.29 38.98
CFSB CFSB Bancorp Inc. 2.17 34.35
CFTP Community Federal Bancorp 1.94 47.01
CIBI Community Investors Bancorp 1.61 29.20
CITZ CFS Bancorp Inc. 0.00 NA
CKFB CKF Bancorp Inc. 2.94 50.00
CLAS Classic Bancshares Inc. 1.91 33.73
CMRN Cameron Financial Corp 1.67 28.57
CMSB Commonwealth Bancorp Inc. 1.75 34.88
CMSV Community Savings Bnkshrs(MHC) 2.57 87.38
CNIT CENIT Bancorp Inc. 1.91 26.92
CNSB CNS Bancorp Inc. 1.52 45.59
CNY Carver Bancorp Inc. 0.00 10.42
COFI Charter One Financial 1.81 38.57
CONE Conestoga Bancorp, Inc. NA 28.17
COOP Cooperative Bankshares Inc. 0.00 0.00
CRSB Crusader Holding Corp. 0.00 0.00
CRZY Crazy Woman Creek Bancorp 2.44 48.19
CSBF CSB Financial Group Inc. 0.00 0.00
CVAL Chester Valley Bancorp Inc. 1.41 31.55
DCBI Delphos Citizens Bancorp Inc. 1.49 13.33
DCOM Dime Community Bancshares Inc. 1.73 21.10
DIBK Dime Financial Corp. 1.61 17.31
DME Dime Bancorp Inc. 0.72 10.97
DNFC D & N Financial Corp. 0.82 11.72
DSL Downey Financial Corp. 1.03 15.28
EBI Equality Bancorp Inc. 1.88 NA
EBSI Eagle Bancshares 2.65 48.78
EFBC Empire Federal Bancorp Inc. 2.23 44.78
EFBI Enterprise Federal Bancorp 3.51 88.50
EFC EFC Bancorp Inc. 0.00 NA
EGLB Eagle BancGroup Inc. 0.00 0.00
EMLD Emerald Financial Corp. 1.17 20.31
EQSB Equitable Federal Savings Bank 0.00 0.00
ESBF ESB Financial Corp. 1.96 31.35
ESBK Elmira Savings Bank (The) 2.37 43.77
ESX Essex Bancorp Inc. 0.00 0.00
ETFS East Texas Financial Services 1.42 34.86
FAB FIRSTFED AMERICA BANCORP INC. 1.12 5.81
FBBC First Bell Bancorp Inc. 2.29 31.25
FBCI Fidelity Bancorp Inc. 1.74 NA
FBCV 1ST Bancorp 0.61 14.39
FBER 1st Bergen Bancorp 1.08 22.50
FBHC Fort Bend Holding Corp. 2.00 37.23
FBNW FirstBank Corp. 1.70 NA
FBSI First Bancshares Inc. 0.91 12.35
FCB Falmouth Bancorp Inc. 1.29 28.77
FCBF FCB Financial Corp. 2.95 50.32
FCBH Virginia Beach Fed. Financial 1.34 25.00
FCBK First Coastal Bankshares NA NA
FCME First Coastal Corp. 0.00 0.00
FDEF First Defiance Financial 2.67 53.97
FDTR Federal Trust Corp. 0.00 NA
FED FirstFed Financial Corp. 0.00 0.00
</TABLE>
<PAGE> 141
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 13, 1998
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Current Price in Relation to
Current Current ------------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FESX First Essex Bancorp Inc. 21.88 165.43 15.63 16.43 19.02 176.27 243.87 12.56
FFBA First Colorado Bancorp Inc. 23.30 430.81 25.50 20.73 20.24 197.52 201.26 27.85
FFBH First Federal Bancshares of AR 22.50 109.60 18.15 18.75 19.07 128.87 128.87 18.96
FFBI First Financial Bancorp Inc. 25.25 10.49 52.60 84.17 41.39 137.45 137.45 12.69
FFBS FFBS BanCorp Inc. 22.25 34.98 18.54 18.54 18.54 147.64 147.64 25.92
FFBZ First Federal Bancorp Inc. 12.00 37.81 21.43 24.00 25.53 229.45 229.45 18.23
FFCH First Financial Holdings Inc. 20.50 278.96 17.67 17.98 18.64 235.63 235.63 14.99
FFDB FirstFed Bancorp Inc. 23.13 30.27 19.63 18.61 18.61 171.15 185.84 16.63
FFDF FFD Financial Corp. 18.75 27.10 19.06 16.02 36.06 121.52 121.52 27.07
FFED Fidelity Federal Bancorp 6.00 18.76 NM NM NM 140.19 140.19 9.50
FFES First Federal of East Hartford 32.25 88.45 14.40 15.43 14.27 125.34 125.34 9.02
FFFD North Central Bancshares Inc. 19.00 59.40 13.57 14.29 14.95 120.79 139.40 17.94
FFFL Fidelity Bankshares Inc. (MHC) 28.00 190.46 22.58 25.93 30.14 215.22 221.87 14.42
FFHH FSF Financial Corp. 17.00 49.78 15.74 15.45 16.19 103.85 103.85 12.04
FFHS First Franklin Corp. 14.00 24.96 14.00 13.46 15.56 115.13 115.61 10.50
FFIC Flushing Financial Corp. 23.50 183.54 15.46 17.94 17.54 131.28 136.31 16.81
FFKY First Federal Financial Corp. 27.63 114.08 17.71 18.05 18.79 208.65 219.77 27.85
FFLC FFLC Bancorp Inc. 18.75 70.16 16.16 18.03 18.94 132.88 132.88 17.01
FFOH Fidelity Financial of Ohio 13.13 73.48 15.63 14.91 13.44 171.32 125.12 13.81
FFPB First Palm Beach Bancorp Inc. 37.75 193.90 41.03 24.20 47.19 160.50 163.85 10.99
FFSL First Independence Corp. 12.25 11.73 11.34 14.41 14.41 99.27 99.27 9.51
FFSX First Fed SB of Siouxland(MHC) 31.50 89.39 29.17 27.39 27.16 217.09 274.15 15.65
FFWC FFW Corp. 18.00 26.24 14.06 13.64 15.65 137.20 149.13 12.91
FFWD Wood Bancorp Inc. 16.00 42.62 19.05 18.60 21.62 195.60 195.60 26.83
FFYF FFY Financial Corp. 34.00 137.86 16.67 17.09 17.35 163.23 163.23 21.38
FGHC First Georgia Holding Inc. 10.75 51.59 26.88 28.29 28.29 350.16 374.56 28.53
FIBC Financial Bancorp Inc. 36.63 62.51 19.90 21.29 22.06 217.62 218.53 18.33
FISB First Indiana Corp. 22.88 292.37 16.34 16.11 22.88 182.42 184.33 16.70
FKAN First Kansas Financial Corp. 11.06 17.19 NA NA NA NA NA NA
FKFS First Keystone Financial 16.00 38.61 13.33 13.33 15.24 150.23 150.23 10.02
FKKY Frankfort First Bancorp Inc. 14.00 22.67 14.58 14.58 14.58 99.86 99.86 16.86
FLAG FLAG Financial Corp. 17.00 87.95 21.25 25.37 32.69 228.19 228.19 19.66
FLFC First Liberty Financial Corp. 21.00 280.70 16.41 25.00 24.14 245.04 267.86 18.01
FLGS Flagstar Bancorp Inc. 25.63 350.29 11.86 14.08 14.08 262.28 270.88 13.66
FLKY First Lancaster Bancshares 13.50 12.94 24.11 25.47 25.47 90.48 90.48 24.11
FMBD First Mutual Bancorp Inc. 18.00 63.55 28.13 42.86 54.55 114.50 147.06 16.74
FMCO FMS Financial Corp. 13.63 98.14 18.92 19.19 19.19 239.46 241.15 14.57
FMSB First Mutual Savings Bank 14.00 59.42 12.07 12.39 14.14 174.56 174.56 12.62
FNGB First Northern Capital Corp. 12.75 112.95 16.78 17.71 19.03 150.18 150.18 16.36
FOBC Fed One Bancorp 39.75 95.46 33.13 31.55 32.32 221.08 229.77 25.53
FPRY First Financial Bancorp NA NA NA NA NA NA NA NA
FSBI Fidelity Bancorp Inc. 20.75 40.84 15.72 14.93 15.15 148.00 148.00 10.12
FSFF First SecurityFed Financial 15.25 92.72 15.89 NA NA 104.52 104.81 30.23
FSLA First Source Bancorp Inc. 9.00 285.66 NA NA NA NA NA NA
FSNJ Bayonne Bancshares Inc. 15.00 136.42 31.25 NA NA 142.18 142.18 19.48
FSPT FirstSpartan Financial Corp. 39.38 167.47 20.94 NA NA 133.16 133.16 32.36
FSSB First FS&LA of San Bernardino 9.63 3.16 NM NM NM 70.36 73.03 3.05
FSTC First Citizens Corp. 28.00 78.26 NA 11.57 12.73 212.93 263.16 21.28
FTF Texarkana First Financial Corp 27.50 47.79 14.03 14.95 15.71 169.44 169.44 25.21
FTFC First Federal Capital Corp. 16.25 301.16 16.95 16.93 28.51 253.12 265.96 18.99
FTNB Fulton Bancorp Inc. 17.63 29.95 31.47 22.60 29.38 117.03 117.03 27.34
FTSB Fort Thomas Financial Corp. 14.00 20.64 20.59 16.67 16.67 128.79 128.79 20.32
FWWB First Washington Bancorp Inc. 24.00 255.25 16.67 17.52 16.75 147.60 159.26 20.70
GAF GA Financial Inc. 15.19 109.66 14.60 13.21 14.19 101.66 102.62 13.03
GBNK Gaston Federal Bancorp (MHC) 13.25 59.58 NA NA NA 144.97 144.97 29.41
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
FESX First Essex Bancorp Inc. 2.56 40.60
FFBA First Colorado Bancorp Inc. 2.04 41.46
FFBH First Federal Bancshares of AR 1.24 21.67
FFBI First Financial Bancorp Inc. 0.00 0.00
FFBS FFBS BanCorp Inc. 2.25 208.33
FFBZ First Federal Bancorp Inc. 1.17 27.00
FFCH First Financial Holdings Inc. 2.05 34.21
FFDB FirstFed Bancorp Inc. 2.23 44.41
FFDF FFD Financial Corp. 1.60 25.64
FFED Fidelity Federal Bancorp 3.33 NM
FFES First Federal of East Hartford 2.11 30.62
FFFD North Central Bancshares Inc. 1.68 21.43
FFFL Fidelity Bankshares Inc. (MHC) 3.21 81.02
FFHH FSF Financial Corp. 2.94 45.45
FFHS First Franklin Corp. 2.14 26.45
FFIC Flushing Financial Corp. 1.36 21.37
FFKY First Federal Financial Corp. 2.03 36.60
FFLC FFLC Bancorp Inc. 1.92 31.15
FFOH Fidelity Financial of Ohio 2.44 147.73
FFPB First Palm Beach Bancorp Inc. 1.85 43.27
FFSL First Independence Corp. 2.45 32.35
FFSX First Fed SB of Siouxland(MHC) 1.52 41.74
FFWC FFW Corp. 2.33 28.41
FFWD Wood Bancorp Inc. 2.25 34.70
FFYF FFY Financial Corp. 2.35 37.69
FGHC First Georgia Holding Inc. 0.00 17.55
FIBC Financial Bancorp Inc. 1.37 26.16
FISB First Indiana Corp. 2.10 30.99
FKAN First Kansas Financial Corp. 0.00 NA
FKFS First Keystone Financial 1.25 10.42
FKKY Frankfort First Bancorp Inc. 5.71 81.25
FLAG FLAG Financial Corp. 1.41 33.85
FLFC First Liberty Financial Corp. 1.43 33.33
FLGS Flagstar Bancorp Inc. 1.09 6.59
FLKY First Lancaster Bancshares 4.41 94.34
FMBD First Mutual Bancorp Inc. 1.78 76.19
FMCO FMS Financial Corp. 0.88 14.07
FMSB First Mutual Savings Bank 1.43 47.19
FNGB First Northern Capital Corp. 2.82 47.22
FOBC Fed One Bancorp 1.56 49.21
FPRY First Financial Bancorp NA 39.66
FSBI Fidelity Bancorp Inc. 1.74 20.72
FSFF First SecurityFed Financial 0.00 NA
FSLA First Source Bancorp Inc. 2.00 NA
FSNJ Bayonne Bancshares Inc. 1.67 NA
FSPT FirstSpartan Financial Corp. 1.52 NA
FSSB First FS&LA of San Bernardino 0.00 0.00
FSTC First Citizens Corp. 1.14 12.67
FTF Texarkana First Financial Corp 2.04 30.43
FTFC First Federal Capital Corp. 1.72 26.04
FTNB Fulton Bancorp Inc. 1.36 26.92
FTSB Fort Thomas Financial Corp. 1.79 35.71
FWWB First Washington Bancorp Inc. 1.50 21.90
GAF GA Financial Inc. 3.69 43.48
GBNK Gaston Federal Bancorp (MHC) 1.51 NA
</TABLE>
<PAGE> 142
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
------------------------------------------------------------------
Current Price in Relation to
Current Current ------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GDW Golden West Financial 86.38 4,974.42 10.74 12.43 12.70 170.26 170.26 12.73
GFCO Glenway Financial Corp. 22.00 50.24 18.97 20.37 20.18 174.60 176.14 16.71
GFED Guaranty Federal Bcshs Inc. 12.94 80.55 23.10 NA NA 115.41 115.41 32.70
GLMR Gilmer Financial Svcs, Inc. 14.13 2.70 NM 117.71 20.77 71.05 71.05 6.41
GOSB GSB Financial Corp. 13.88 31.19 43.36 NA NA 97.00 97.03 24.16
GPT GreenPoint Financial Corp. 37.69 3,708.01 17.45 19.23 18.84 213.53 377.64 24.45
GSB Golden State Bancorp Inc. 24.31 1,349.01 11.92 13.66 12.28 120.12 143.10 7.45
GSFC Green Street Financial Corp. 14.25 61.25 20.96 20.96 20.96 96.22 96.22 34.43
GSLA GS Financial Corp. 13.38 44.80 20.90 NA NA 83.18 83.18 34.62
GTPS Great American Bancorp 22.00 34.94 30.56 36.07 36.07 128.88 128.88 23.56
GUPB GFSB Bancorp Inc. 15.00 18.02 17.86 18.99 18.99 123.56 123.56 15.25
HALL Hallmark Capital Corp. 14.38 42.13 13.82 14.82 15.97 119.39 119.39 9.85
HARB Harbor Florida Bancshares Inc. 11.88 365.01 16.49 NA NA 141.20 142.73 27.68
HARL Harleysville Savings Bank 31.00 51.91 14.90 15.35 15.35 204.76 204.76 13.13
HARS Harris Financial Inc. (MHC) 17.03 578.46 32.75 31.54 48.66 306.31 338.59 24.87
HAVN Haven Bancorp Inc. 19.44 172.01 37.38 19.83 18.87 145.83 152.57 7.59
HBBI Home Building Bancorp 24.00 7.48 25.00 21.05 22.02 116.45 116.45 17.63
HBEI Home Bancorp of Elgin Inc. 14.88 101.98 33.81 38.14 38.14 106.23 106.25 27.74
HBFW Home Bancorp 28.25 66.42 21.40 22.07 22.60 154.63 154.63 18.43
HBNK Highland Bancorp Inc. 42.00 97.84 13.20 13.86 15.73 216.94 216.94 17.06
HBS Haywood Bancshares Inc. 20.50 25.63 10.06 11.58 11.58 113.57 117.28 16.86
HBSC Heritage Bancorp Inc. 18.75 86.79 NA NA NA NA NA NA
HCBB HCB Bancshares Inc. 12.88 34.05 40.23 NA NA 89.10 90.16 15.37
HCBC High Country Bancorp Inc. 13.50 17.85 21.09 NA NA 98.90 98.90 19.35
HCFC Home City Financial Corp. 15.13 13.68 14.54 14.83 14.83 126.36 126.36 17.53
HEMT HF Bancorp Inc. 16.63 105.89 NM NM 151.14 126.43 147.78 10.12
HFBC HopFed Bancorp Inc. 16.75 67.56 NA NA NA 117.46 117.46 30.52
HFFB Harrodsburg First Fin Bancorp 15.25 29.69 19.06 19.30 19.30 95.43 95.43 27.29
HFFC HF Financial Corp. 22.00 96.95 17.74 16.30 17.46 174.60 174.60 16.98
HFGI Harrington Financial Group 10.50 34.40 NM NM NM 151.73 151.73 7.10
HFNC HFNC Financial Corp. 12.00 206.31 14.29 14.63 21.43 120.72 120.72 20.47
HFSA Hardin Bancorp Inc. 17.63 14.39 19.16 17.11 19.37 106.75 106.75 10.79
HFWA Heritage Financial Corp. 12.63 123.26 NA NA NA 132.48 132.48 38.15
HHFC Harvest Home Financial Corp. 14.50 12.92 25.89 23.39 23.39 125.32 125.32 14.22
HIFS Hingham Instit. for Savings 27.00 35.19 12.27 12.86 12.98 156.16 156.16 14.72
HLFC Home Loan Financial Corp. 14.75 33.16 24.58 NA NA 103.06 105.06 40.48
HMLK Hemlock Federal Financial Corp 16.75 31.65 19.94 NA NA 108.34 108.34 17.54
HMNF HMN Financial Inc. 15.43 82.13 27.01 17.19 24.01 115.99 126.36 11.33
HOMF Home Federal Bancorp 27.50 141.33 13.75 14.95 18.33 217.39 223.40 19.99
HPBC Home Port Bancorp Inc. 24.50 45.13 11.56 14.33 13.17 198.86 198.86 17.11
HRBF Harbor Federal Bancorp Inc. 18.00 33.53 18.00 19.35 20.00 114.29 114.29 14.51
HRBT Hudson River Bancorp 13.44 239.92 NA NA NA NA NA NA
HRZB Horizon Financial Corp. 15.00 112.32 13.39 13.39 13.76 131.58 131.58 20.71
HSTD Homestead Bancorp Inc. 8.50 12.51 NA NA NA NA NA NA
HTHR Hawthorne Financial Corp. 17.00 88.11 13.28 11.04 9.39 120.82 120.82 5.14
HWEN Home Financial Bancorp 8.63 8.01 13.48 19.17 23.31 107.41 107.41 19.33
HZFS Horizon Financial Svcs Corp. 15.38 13.53 14.24 16.53 21.35 160.16 160.16 14.59
IBSF IBS Financial Corp. 15.44 169.23 27.57 28.07 28.07 128.65 128.65 22.94
ICBC Independence Comm. Bank Corp. 14.63 1,112.14 24.38 NA NA 115.80 122.69 23.24
IFSB Independence Federal Svgs Bank 16.75 21.46 6.75 10.40 64.42 108.34 119.73 7.82
INBI Industrial Bancorp Inc. 19.00 95.28 16.38 17.27 17.27 155.87 155.87 24.89
IPSW Ipswich Savings Bank 15.25 36.44 15.89 14.66 14.66 279.30 279.30 15.60
ITLA ITLA Capital Corp. 19.25 148.17 10.46 11.19 11.19 138.99 NA 14.31
IWBK InterWest Bancorp Inc. 42.75 446.54 35.63 20.45 23.36 265.86 274.21 18.99
JSB JSB Financial Inc. 50.00 491.63 8.89 11.01 13.09 129.37 129.37 31.44
<CAPTION>
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 13, 1998
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker (%) (%)
- ------------------------------------------------------------------------
<S> <C> <C>
GDW Golden West Financial 0.58 6.98
GFCO Glenway Financial Corp. 2.00 35.65
GFED Guaranty Federal Bcshs Inc. 0.00 NA
GLMR Gilmer Financial Svcs, Inc. 0.00 0.00
GOSB GSB Financial Corp. 0.87 NA
GPT GreenPoint Financial Corp. 1.70 29.08
GSB Golden State Bancorp Inc. 0.00 330.06
GSFC Green Street Financial Corp. 3.37 86.76
GSLA GS Financial Corp. 2.09 NA
GTPS Great American Bancorp 2.00 67.21
GUPB GFSB Bancorp Inc. 2.00 33.77
HALL Hallmark Capital Corp. 0.00 0.00
HARB Harbor Florida Bancshares Inc. 2.19 NA
HARL Harleysville Savings Bank 1.42 21.29
HARS Harris Financial Inc. (MHC) 1.29 39.50
HAVN Haven Bancorp Inc. 1.54 30.61
HBBI Home Building Bancorp 1.25 26.32
HBEI Home Bancorp of Elgin Inc. 2.69 102.56
HBFW Home Bancorp 1.13 21.88
HBNK Highland Bancorp Inc. 1.19 8.25
HBS Haywood Bancshares Inc. 2.93 32.77
HBSC Heritage Bancorp Inc. 0.00 NA
HCBB HCB Bancshares Inc. 1.55 NA
HCBC High Country Bancorp Inc. 2.22 NA
HCFC Home City Financial Corp. 2.38 377.45
HEMT HF Bancorp Inc. 0.00 0.00
HFBC HopFed Bancorp Inc. 0.00 NA
HFFB Harrodsburg First Fin Bancorp 2.62 75.95
HFFC HF Financial Corp. 1.27 20.00
HFGI Harrington Financial Group 1.14 NM
HFNC HFNC Financial Corp. 2.67 36.59
HFSA Hardin Bancorp Inc. 3.18 49.51
HFWA Heritage Financial Corp. 1.27 NA
HHFC Harvest Home Financial Corp. 3.03 67.74
HIFS Hingham Instit. for Savings 2.07 30.48
HLFC Home Loan Financial Corp. 0.00 NA
HMLK Hemlock Federal Financial Corp 1.91 NA
HMNF HMN Financial Inc. 1.06 4.55
HOMF Home Federal Bancorp 1.46 19.24
HPBC Home Port Bancorp Inc. 3.27 46.78
HRBF Harbor Federal Bancorp Inc. 2.63 45.95
HRBT Hudson River Bancorp 0.00 NA
HRZB Horizon Financial Corp. 2.93 75.00
HSTD Homestead Bancorp Inc. 9.41 NA
NAHTHR Hawthorne Financial Corp. 0.00 0.00
HWEN Home Financial Bancorp 1.16 22.22
HZFS Horizon Financial Svcs Corp. 1.17 18.28
IBSF IBS Financial Corp. 2.59 72.73
ICBC Independence Comm. Bank Corp. 0.00 NA
IFSB Independence Federal Svgs Bank 1.49 29.19
INBI Industrial Bancorp Inc. 3.16 50.00
IPSW Ipswich Savings Bank 1.05 14.42
ITLA ITLA Capital Corp. 0.00 0.00
IWBK InterWest Bancorp Inc. 1.87 34.93
JSB JSB Financial Inc. 3.20 33.04
</TABLE>
<PAGE> 143
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 15, 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Current Price in Relation to
Current Current -------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JSBA Jefferson Savings Bancorp 24.00 240.53 27.27 24.00 26.97 188.38 234.83 19.36
JXSB Jacksonville Savings Bk (MHC) 16.25 31.01 31.25 31.86 49.24 176.06 176.06 18.28
JXVL Jacksonville Bancorp Inc. 18.19 44.47 16.24 13.37 13.37 127.28 127.28 18.75
KFBI Klamath First Bancorp 17.63 174.78 16.95 18.95 18.95 110.02 120.14 17.33
KNK Kankakee Bancorp Inc. 31.38 43.30 19.13 16.17 16.87 110.36 129.17 10.77
KSAV KS Bancorp Inc. NA NA NA NA NA NA NA NA
KSBK KSB Bancorp Inc. 16.50 20.77 12.13 11.70 11.96 165.50 188.36 13.17
KYF Kentucky First Bancorp Inc. 13.88 17.22 17.34 17.79 18.02 123.44 123.44 21.03
LARK Landmark Bancshares Inc. 22.50 34.86 16.07 15.96 18.91 116.34 116.34 15.20
LARL Laurel Capital Group Inc. 20.00 43.76 13.89 15.15 15.50 189.75 189.75 20.18
LFBI Little Falls Bancorp Inc. 19.50 48.31 25.66 25.32 26.35 133.29 144.34 13.59
LFCO Life Financial Corp. 12.38 81.13 18.20 6.16 5.92 135.84 135.84 17.17
LFED Leeds Federal Bankshares (MHC) 17.75 91.98 26.10 26.89 26.89 186.45 126.45 30.76
LIBB Liberty Bancorp Inc. (MHC) 10.75 41.94 NA NA NA NA NA NA
LISB Long Island Bancorp Inc. 54.13 1,508,90 19.90 22.55 27.61 226.65 228.57 20.19
LO Local Financial Corp. 12.06 247.74 14.36 NA NA 255.03 277.95 12.51
LOGN Logansport Financial Corp. 13.63 17.19 13.63 13.63 13.36 101.23 101.23 19.04
LONF London Financial Corp. 15.25 7.78 15.25 17.73 19.06 149.07 149.07 20.52
LSBI LSB Financial Corp. 32.00 30.51 16.00 16.93 19.63 156.40 156.40 13.96
LSBX Lawrence Savings Bank 14.13 61.12 8.61 6.96 7.06 146.83 146.83 17.72
LVSB Lakeview Financial Corp. 22.75 113.24 7.58 11.21 22.52 187.86 275.42 18.28
LXMO Lexington B&L Financial Corp. 15.16 15.29 31.58 21.97 21.97 99.78 105.36 17.07
MAFB MAF Bancorp Inc. 22.38 505.15 13.32 14.07 14.72 180.44 202.12 14.15
MARN Marion Capital Holdings 23.83 40.69 16.58 18.80 18.80 108.05 110.43 20.98
MASB MASSBANK Corp. 47.50 170.65 16.27 16.27 18.85 156.04 138.12 18.36
MBBC Monterey Bay Bancorp Inc. 16.44 64.49 37.36 37.36 41.09 129.74 138.72 16.14
MBLF MBLA Financial Corp. 21.00 26.19 13.46 14.48 14.58 93.83 93.83 12.66
MBSP Mitchell Bancorp Inc. 17.25 16.06 61.61 34.50 34.50 109.73 109.73 43.04
MCBN Mid-Coast Bancorp Inc. 10.50 7.48 17.50 15.67 16.94 140.00 140.00 11.86
MDBK Medford Bancorp Inc. 41.50 184.87 15.26 16.53 17.36 182.18 191.95 16.28
MECH MECH Financial Inc. 29.00 153.56 15.43 17.90 18.01 165.62 165.62 16.09
METF Metropolitan Financial Corp. 13.50 95.19 12.05 14.52 16.46 249.08 269.46 9.62
MFBC MFB Corp. 24.00 38.17 20.00 18.60 19.05 115.32 115.33 13.12
MFFC Milton Federal Financial Corp. 14.00 31.32 16.67 19.72 24.56 111.29 111.29 13.32
MFLR Mayflower Co-operative Bank 22.75 20.47 12.10 13.96 16.37 157.88 160.21 15.10
MFSL Maryland Federal Bancorp 41.31 271.80 24.69 31.30 32.28 252.83 255.02 22.85
MIFC Mid-Iowa Financial Corp. 10.25 17.78 13.49 13.31 13.49 132.60 132.77 13.17
MIVI Mississippi View Holding Co. 20.00 14.80 20.81 21.05 21.28 118.69 118.69 21.57
MONT Montgomery Financial Corp. 11.63 19.22 17.10 NA NA 95.47 96.47 17.61
MRKF Market Financial Corp. 13.00 17.16 29.35 26.00 26.00 110.36 110.36 32.36
MSBF MSB Financial Inc. 16.88 20.53 14.55 16.38 18.96 154.25 154.25 25.67
MSBK Mutual Savings Bank FSB 10.63 45.58 18.97 NM NM 133.65 133.65 7.43
MWBI Midwest Bancshares Inc. 14.75 15.50 9.97 11.26 14.05 135.94 135.94 9.72
MWBX MetroWest Bank 7.00 99.76 12.50 12.96 12.96 206.49 206.49 15.15
MYST Mystic Financial Inc. 14.38 38.97 19.97 NA NA 107.84 107.84 19.58
NASB NASB Financial Inc. 65.50 146.70 11.70 12.17 14.92 215.36 242.41 19.98
NBCP Niagara Bancorp Inc. (MHC) 12.56 373.83 NA NA NA NA NA NA
NBN Northeast Bancorp 14.00 34.45 12.96 17.95 18.67 144.03 158.55 10.08
NBSI North Bancshares Inc. 13.50 17.07 67.50 40.91 45.00 127.96 127.96 13.85
NEIB Northeast Indiana Bancorp 21.75 35.88 14.31 13.32 15.32 135.35 135.35 17.65
NEP Northeast PA Financial Corp. 13.25 85.17 NA NA NA NA NA NA
NHTB New Hampshire Thrift Bncshrs 16.50 34.56 12.50 12.22 13.20 132.96 153.06 10.76
NMSB NewMil Bancorp Inc. 12.19 46.73 14.51 16.47 21.01 139.96 139.93 12.71
NSLB NS&L Bancorp Inc. 18.00 12.35 28.13 28.57 28.57 107.46 108.24 20.19
NSSY NSS Bancorp Inc. 50.00 119.75 22.32 21.37 26.32 218.72 224.72 17.91
</TABLE>
<TABLE>
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- ----------------------------------------------------------------------
<S> <C> <C> <C>
JSBA Jefferson Savings Bancorp 1.17 24.00
JXSB Jacksonville Savings Bk (MHC) 1.85 55.57
JXVL Jacksonville Bancorp Inc. 2.75 36.76
KFBI Klamath First Bancorp 2.04 36.02
KNK Kankakee Bancorp Inc. 1.53 24.74
KSAV KS Bancorp Inc. NA 63.46
KSBK KSB Bancorp Inc. 0.61 3.55
KYF Kentucky First Bancorp Inc. 3.60 64.10
LARK Landmark Bancshares Inc. 2.67 39.01
LARL Laurel Capital Group Inc. 3.00 28.54
LFBI Little Falls Bancorp Inc. 1.23 19.48
LFCO Life Financial Corp. 0.00 0.00
LFED Leeds Federal Bankshares (MHC) 3.16 80.82
LIBB Liberty Bancorp Inc. (MHC) 0.00 NA
LISB Long Island Bancorp Inc. 1.48 27.08
LO Local Financial Corp. 0.00 NA
LOGN Logansport Financial Corp. 3.23 41.00
LONF London Financial Corp. 1.57 609.30
LSBI LSB Financial Corp. 1.25 18.65
LSBX Lawrence Savings Bank 0.00 0.00
LVSB Lakeview Financial Corp. 1.10 7.70
LXMO Lexington B&L Financial Corp. 1.98 43.48
MAFB MAF Bancorp Inc. 1.25 13.21
MARN Marion Capital Holdings 3.69 69.29
MASB MASSBANK Corp. 2.11 33.56
MBBC Monterey Bay Bancorp Inc. 0.73 23.64
MBLF MBLA Financial Corp. 2.86 27.59
MBSP Mitchell Bancorp Inc. 2.32 80.00
MCBN Mid-Coast Bancorp Inc. 1.91 25.88
MDBK Medford Bancorp Inc. 1.93 37.45
MECH MECH Financial Inc. 2.07 9.26
METF Metropolitan Financial Corp. 0.00 0.00
MFBC MFB Corp. 1.42 32.17
MFFC Milton Federal Financial Corp. 4.29 84.51
MFLR Mayflower Co-operative Bank 3.52 42.33
MFSL Maryland Federal Bancorp 1.09 33.52
MIFC Mid-Iowa Financial Corp. 0.78 10.39
MIVI Mississippi View Holding Co. 1.60 16.84
MONT Montgomery Financial Corp. 1.89 NA
MRKF Market Financial Corp. 2.15 256.00
MSBF MSB Financial Inc. 1.78 28.16
MSBK Mutual Savings Bank FSB 0.00 0.00
MWBI Midwest Bancshares Inc. 2.17 18.32
MWBX MetroWest Bank 1.71 31.48
MYST Mystic Financial Inc. 1.79 NA
NASB NASB Financial Inc. 1.53 14.87
NBCP Niagara Bancorp Inc. (MHC) 0.00 NA
NBN Northeast Bancorp 1.51 27.29
NBSI North Bancshares Inc. 2.96 109.09
NEIB Northeast Indiana Bancorp 1.56 23.39
NEP Northeast PA Financial Corp. 0.00 NA
NHTB New Hampshire Thrift Bncshrs 3.64 38.89
NMSB NewMil Bancorp Inc. 2.63 40.54
NSLB NS&L Bancorp Inc. 2.78 79.37
NSSY NSS Bancorp Inc. 1.04 17.09
</TABLE>
<PAGE> 144
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Current Price in Relation to
Current Current -------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NTBK Net.B@nk Inc. 28.50 175.16 NM NM NM 513.51 513.51 107.14
NTMG Nutmeg Federal S&LA 12.00 12.01 23.08 26.09 60.00 182.37 182.37 10.64
NWEQ Northwest Equity Corp. 18.13 14.96 12.59 13.23 14.05 120.51 120.51 15.14
NWSB Northwest Bancorp Inc. (MHC) 12.56 588.46 26.17 27.92 29.22 270.17 300.55 23.10
OCFC Ocean Financial Corp. 18.06 280.59 19.63 18.82 18.82 133.11 133.11 18.24
OCN Ocwen Financial Corp. 18.00 1,093.89 NM 39.13 138.46 256.05 279.95 31.21
OFCP Ottawa Financial Corp. 27.38 142.28 21.39 20.13 21.73 183.14 229.46 15.90
OHSL OHSL Financial Corp. 15.75 39.23 17.12 18.75 19.94 144.23 144.23 15.62
OSFS Ohio State Financial Services 16.00 10.15 NA NA NA 97.15 97.15 26.32
OTFC Oregon Trail Financial Corp. 14.50 68.08 20.14 NA NA 91.25 91.25 26.54
PBCI Pamrapo Bancorp Inc. 27.88 79.25 18.83 16.79 17.42 161.13 161.97 20.10
PBCT People's Bank (MHC) 29.75 1,907.87 16.53 18.03 33.81 222.51 258.25 20.95
PBHC Pathfinder Bancorp Inc. (MHC) 17.38 49.20 36.20 34.07 43.44 205.14 240.32 24.84
PBKB People's Bancshares Inc. 19.75 65.49 10.97 12.04 29.92 201.74 210.55 7.63
PBOC PBOC Holdings Inc. 12.00 262.51 NM NA NA 142.35 142.35 8.20
PCBC Perry County Financial Corp. 22.00 18.21 21.15 19.82 19.82 111.73 111.73 21.16
PDB Piedmont Bancorp Inc. 9.89 27.16 16.46 16.19 16.74 125.80 125.80 20.81
PEDE Great Pee Dee Bancorp 13.25 29.18 19.49 NA NA 93.38 93.38 42.13
PEEK Peekskill Financial Corp. 16.75 48.50 24.63 25.38 25.00 112.27 112.27 24.21
PERM Permanent Bancorp Inc. 13.50 55.61 22.50 21.77 22.50 125.58 126.88 12.61
PFDC Peoples Bancorp 21.50 72.57 17.92 17.06 17.06 158.44 158.44 23.71
PFED Park Bancorp Inc. 17.94 41.84 17.23 24.91 25.26 106.46 106.46 21.20
PFFB PFF Bancorp Inc. 17.25 287.80 15.85 17.57 19.09 118.97 120.26 9.57
PFFC Peoples Financial Corp. 11.38 16.18 9.81 17.77 27.74 102.39 102.39 19.60
PFNC Progress Financial Corp. 18.50 92.43 21.02 21.26 24.34 221.56 NA 15.35
PFSB PennFed Financial Services Inc 14.81 139.03 13.23 12.77 13.23 124.79 143.40 8.96
PFSL Pocahontas Bancorp Inc. 8.75 58.50 NA NA NA 100.11 103.43 14.46
PHBK Peoples Heritage Finl Group 21.00 1,838.87 58.33 18.42 15.33 253.93 303.68 18.83
PHFC Pittsburgh Home Financial Corp 15.88 31.26 14.70 13.69 15.26 121.00 122.30 8.39
PHSB Peoples Home Savings Bk (MHC) 16.50 45.54 29.46 NA NA 158.65 158.65 20.09
PLSK Pulaski Savings Bank (MHC) 15.00 31.62 46.88 30.61 28.85 142.45 142.45 16.84
PRBC Prestige Bancorp Inc. 17.00 17.88 21.25 23.29 24.29 112.29 112.29 10.86
PROV Provident Financial Holdings 20.28 98.90 18.87 18.36 44.29 114.15 114.15 12.10
PSBI PSB Bancorp Inc. 8.50 26.36 NA NA NA NA NA NA
PSFC Peoples-Sidney Financial Corp. 20.50 36.60 25.63 NA NA 128.29 128.29 34.69
PSFI PS Financial Inc. 11.25 22.56 13.39 23.44 15.41 100.00 100.00 27.83
PTRS Potters Financial Corp. 16.00 15.47 17.39 15.84 16.33 140.35 140.35 12.22
PULB Pulaski Bank, FSB (MHC) 31.75 66.86 34.51 34.51 42.33 267.48 267.48 35.77
PULS Pulse Bancorp 29.75 92.83 17.30 17.30 17.30 202.24 202.24 17.05
PVFC PVF Capital Corp. 24.63 65.50 12.83 13.10 13.83 217.15 217.15 15.63
PVSA Parkvale Financial Corp. 33.50 173.28 15.51 15.95 15.95 206.15 207.17 15.82
PWBK Pennwood Bancorp Inc. 11.50 8.44 57.50 22.12 21.30 91.34 91.34 18.20
QCBC Quaker City Bancorp Inc. 18.25 106.34 14.72 16.01 16.29 137.63 137.63 11.98
QCFB QCF Bancorp Inc. 30.63 41.80 12.76 13.93 14.18 153.28 153.28 27.13
QCSB Queens County Bancorp Inc. 41.50 620.06 22.55 23.62 26.10 316.55 316.55 38.17
RARB Raritan Bancorp Inc. 29.13 69.11 18.20 18.55 18.55 217.00 219.65 15.90
RCBK Richmond County Financial Corp 14.88 393.05 16.90 NA NA 119.57 119.96 24.63
RELI Reliance Bancshares Inc. 9.38 22.23 33.48 44.64 46.88 100.70 100.70 50.32
RELY Reliance Bancorp Inc. 31.30 301.30 17.12 13.83 16.67 154.64 221.67 12.12
RIVR River Valley Bancorp 18.25 21.72 16.29 15.60 17.38 118.97 120.54 16.23
ROSE TR Financial Corp. 36.81 645.29 14.24 16.58 19.48 238.74 238.74 15.63
RSLN Roslyn Bancorp Inc. 18.94 784.03 14.80 16.05 16.91 131.88 132.43 20.35
RVSB Riverview Bancorp Inc. 15.50 95.88 18.45 NA NA 146.09 150.78 35.70
SBAN SouthBanc Shares Inc. 18.50 79.60 NA NA NA NA NA NA
SBFL SB of the Finger Lakes (MHC) 17.00 60.69 53.13 60.71 77.27 277.78 277.78 23.49
</TABLE>
<TABLE>
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- ----------------------------------------------------------------------
<S> <C> <C> <C>
NTBK Net.B@nk Inc. 0.00 0.00
NTMG Nutmeg Federal S&LA 1.67 38.04
NWEQ Northwest Equity Corp. 3.53 39.42
NWSB Northwest Bancorp Inc. (MHC) 1.27 35.56
OCFC Ocean Financial Corp. 2.66 43.75
OCN Ocwen Financial Corp. 0.00 0.00
OFCP Ottawa Financial Corp. 1.46 28.07
OHSL OHSL Financial Corp. 3.18 52.38
OSFS Ohio State Financial Services 0.00 NA
OTFC Oregon Trail Financial Corp. 1.38 NA
PBCI Pamrapo Bancorp Inc. 4.02 63.86
PBCT People's Bank (MHC) 2.82 46.05
PBHC Pathfinder Bancorp Inc. (MHC) 1.15 37.92
PBKB People's Bancshares Inc. 2.63 28.66
PBOC PBOC Holdings Inc. 0.00 NA
PCBC Perry County Financial Corp. 2.27 45.05
PDB Piedmont Bancorp Inc. 4.86 68.85
PEDE Great Pee Dee Bancorp 2.72 NA
PEEK Peekskill Financial Corp. 2.15 54.55
PERM Permanent Bancorp Inc. 1.78 31.13
PFDC Peoples Bancorp 2.05 34.66
PFED Park Bancorp Inc. 0.00 0.00
PFFB PFF Bancorp Inc. 0.00 0.00
PFFC Peoples Financial Corp. 5.28 839.38
PFNC Progress Financial Corp. 0.87 13.63
PFSB PennFed Financial Services Inc 0.95 12.07
PFSL Pocahontas Bancorp Inc. 2.74 NA
PHBK Peoples Heritage Finl Group 2.10 36.84
PHFC Pittsburgh Home Financial Corp 1.51 236.21
PHSB Peoples Home Savings Bk (MHC) 1.70 NA
PLSK Pulaski Savings Bank (MHC) 2.00 61.22
PRBC Prestige Bancorp Inc. 1.02 19.07
PROV Provident Financial Holdings 0.00 0.00
PSBI PSB Bancorp Inc. 0.00 NA
PSFC Peoples-Sidney Financial Corp. 1.37 NA
PSFI PS Financial Inc. 4.27 916.67
PTRS Potters Financial Corp. 1.50 18.81
PULB Pulaski Bank, FSB (MHC) 3.47 119.57
PULS Pulse Bancorp 2.69 45.06
PVFC PVF Capital Corp. 0.00 0.00
PVSA Parkvale Financial Corp. 1.79 26.67
PWBK Pennwood Bancorp Inc. 2.44 49.04
QCBC Quaker City Bancorp Inc. 0.00 0.00
QCFB QCF Bancorp Inc. 0.00 0.00
QCSB Queens County Bancorp Inc. 2.41 43.21
RARB Raritan Bancorp Inc. 2.06 34.39
RCBK Richmond County Financial Corp 1.61 NA
RELI Reliance Bancshares Inc. 0.00 0.00
RELY Reliance Bancorp Inc. 2.29 34.17
RIVR River Valley Bancorp 1.21 15.38
ROSE TR Financial Corp. 2.17 29.73
RSLN Roslyn Bancorp Inc. 1.80 25.00
RVSB Riverview Bancorp Inc. 1.55 NA
SBAN SouthBanc Shares Inc. 2.60 NA
SBFL SB of the Finger Lakes (MHC) 1.41 75.00
</TABLE>
<PAGE> 145
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 13, 1998
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Current Price in Relation to
Current Current -------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SBOS Boston Bancorp (The) NA NA NA NA NA NA NA NA
SCBS Southern Community Bancshares 15.50 17.63 24.22 18.90 18.67 153.47 153.47 24.33
SCCB S. Carolina Community Bancshrs 21.50 12.46 24.43 29.05 29.05 132.06 132.06 26.92
SFED SFS Bancorp Inc. 27.50 33.23 26.44 27.50 28.35 151.68 151.68 18.66
SFFC StateFed Financial Corp. 13.00 20.32 19.12 18.31 18.31 127.95 127.95 22.68
SFIN Statewide Financial Corp. 21.19 95.65 17.09 16.42 16.55 145.22 145.42 14.28
SFSL Security First Corp. 24.25 183.21 20.91 21.85 21.85 283.29 287.32 26.73
SGVB SGV Bancorp Inc. 16.00 37.57 23.53 26.67 27.12 116.53 117.91 9.20
SHSB SHS Bancorp Inc. 17.75 14.55 16.44 NA NA 118.89 116.89 16.46
SIB Staten Island Bancorp Inc. 18.88 851.83 17.48 NA NA 119.84 122.88 28.22
SISB SIS Bancorp Inc. 45.75 318.50 19.06 24.86 19.98 246.37 246.37 17.29
SKAN Skaneateles Bancorp Inc. 16.19 23.39 14.45 15.27 15.57 127.46 130.55 8.77
SKBO First Carnegie Deposit (MHC) 16.25 37.38 31.25 NA NA 149.63 149.63 25.23
SMBC Southern Missouri Bancorp Inc. 21.00 31.17 52.50 30.00 31.34 127.66 127.66 21.41
SOBI Sobieski Bancorp Inc. 17.00 13.30 23.00 26.15 26.56 95.29 95.29 14.46
SOPN First Savings Bancorp Inc. 23.50 87.18 17.28 18.08 18.08 126.28 126.28 29.08
SPBC St. Paul Bancorp Inc. 21.38 865.72 14.84 15.05 15.49 167.65 168.31 16.09
SRN Southern Banc Co. 15.50 19.07 29.81 36.05 36.05 103.68 104.45 18.04
SSB Scotland Bancorp Inc. 9.50 18.18 29.69 19.00 19.00 119.35 119.35 29.76
SSFC South Street Financial Corp. 9.56 44.72 39.85 31.88 NA 112.51 112.51 21.96
SSM Stone Street Bancorp Inc. 17.88 32.95 27.93 22.34 22.34 107.42 107.42 29.36
STFR St. Francis Capital Corp. 39.63 202.51 14.36 14.79 18.34 153.70 171.83 11.54
STSA Sterling Financial Corp. 20.00 152.11 NM 22.73 18.87 143.88 365.63 7.32
SVRN Sovereign Bancorp Inc. 15.63 2,479.66 14.47 26.04 18.83 222.58 252.42 12.63
SWCB Sandwich Bancorp Inc. 62.00 126.67 27.68 25.10 26.72 284.27 292.45 23.85
SZB SouthFirst Bancshares Inc. 17.63 17.05 44.06 24.14 26.70 105.22 107.93 10.46
TBFC Telebanc Financial Corp. 21.75 97.55 108.75 36.25 197.73 312.05 315.22 9.31
THR Three Rivers Financial Corp. 16.50 13.60 17.19 15.28 16.50 102.61 102.93 13.87
THRD TF Financial Corp. 23.88 76.13 19.25 18.80 22.11 135.42 160.77 11.91
THTL Thistle Group Holdings Co. 9.56 86.07 NA NA NA NA NA NA
TPNZ Tappan Zee Financial Inc. 18.75 27.71 23.32 21.73 24.67 125.17 125.17 19.84
TRIC Tri-County Bancorp Inc. 13.00 15.18 18.06 17.57 16.88 108.06 108.06 17.00
TSBK Timberland Bancorp Inc. 14.31 94.64 14.91 NA NA 111.13 111.13 35.97
TSBS Peoples Bancorp Inc. 8.97 325.80 NA NA NA 95.41 98.34 37.29
TSH Teche Holding Co. 17.38 59.75 14.48 15.11 15.24 106.07 106.07 14.67
TWIN Twin City Bancorp 13.38 16.71 14.54 15.03 18.32 119.74 119.74 15.27
UBMT United Financial Corp. 27.25 46.28 NM NA NA 153.69 158.89 23.46
UCBC Union Community Bancorp 14.00 42.58 18.42 NA NA 98.45 98.45 39.40
UCFC United Community Finl Corp. 15.88 531.27 NA NA NA NA NA NA
UFBS Union Financial Bcshs Inc. 16.13 20.41 13.00 13.90 15.97 142.83 163.72 10.97
UFRM United Federal Savings Bank 17.00 59.82 26.56 29.82 35.42 238.43 238.43 18.49
UPFC United PanAm Financial Corp. 9.63 166.27 9.25 NA NA 202.63 203.49 40.37
USAB USABancshares Inc. 16.50 24.78 12.89 NM 150.00 203.96 205.22 24.17
UTBI United Tennessee Bankshares 12.25 17.82 NA NA NA 88.00 88.00 23.74
WAMU Washington Mutual Inc. 37.50 14,517.18 13.59 22.87 15.76 251.85 267.67 14.04
WAYN Wayne Savings Bancshares (MHC) 23.00 57.18 38.33 30.67 33.33 233.74 233.74 21.99
WBST Webster Financial Corp. 26.88 1,030,04 27.99 16.09 14.61 187.81 221.56 11.21
WCBI Westco Bancorp Inc. 27.50 68.37 17.19 15.63 16.57 136.27 136.27 21.35
WCFB Webster City Federal SB (MHC) 17.75 37.52 27.73 27.73 27.73 166.20 166.20 39.91
WEFC Wells Financial Corp. 19.25 36.17 15.04 15.40 16.74 124.76 124.76 19.17
WEHO Westwood Homestead Fin. Corp. 12.50 31.99 17.36 32.89 NA 123.03 123.03 25.32
WES Westcorp 10.94 288.48 136.73 39.06 NM 86.81 87.02 7.87
WFI Winton Financial Corp. 14.75 59.21 14.75 15.69 20.49 227.27 230.83 16.51
WFSL Washington Federal Inc. 24.00 1,258,73 11.11 11.43 11.76 162.93 175.44 22.64
WHGB WHG Bancshares Corp. 14.75 20.49 40.97 29.50 28.92 102.64 102.64 17.29
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name ($) ($M)
- ------------------------------------------------------------------------
<S> <C> <C> <C>
SBOS Boston Bancorp (The) NA 10.89
SCBS Southern Community Bancshares 1.94 332.32
SCCB S. Carolina Community Bancshrs 2.98 83.78
SFED SFS Bancorp Inc. 1.16 30.00
SFFC StateFed Financial Corp. 1.54 28.17
SFIN Statewide Financial Corp. 2.08 33.33
SFSL Security First Corp. 1.49 28.83
SGVB SGV Bancorp Inc. 0.00 0.00
SHSB SHS Bancorp Inc. 0.00 NA
SIB Staten Island Bancorp Inc. 1.70 NA
SISB SIS Bancorp Inc. 1.40 32.61
SKAN Skaneateles Bancorp Inc. 1.73 25.79
SKBO First Carnegie Deposit (MHC) 1.85 NA
SMBC Southern Missouri Bancorp Inc. 2.38 71.43
SOBI Sobieski Bancorp Inc. 1.88 47.69
SOPN First Savings Bancorp Inc. 4.26 68.46
SPBC St. Paul Bancorp Inc. 2.81 28.17
SRN Southern Banc Co. 2.26 81.40
SSB Scotland Bancorp Inc. 2.11 NM
SSFC South Street Financial Corp. 4.18 NM
SSM Stone Street Bancorp Inc. 2.57 56.88
STFR St. Francis Capital. 1.41 20.15
STSA Sterling Financial Corp. 0.00 0.00
SVRN Sovereign Bancorp Inc. 0.51 12.23
SWCB Sandwich Bancorp Inc. 2.26 54.66
SZB SouthFirst Bancshares Inc. 3.40 75.34
TBFC Telebanc Financial Corp. 0.00 0.00
THR Three Rivers Financial Corp. 2.67 37.04
THRD TF Financial Corp. 2.01 33.07
THTL Thistle Group Holdings Co. 0.00 NA
TPNZ Tappan Zee Financial Inc. 1.49 35.44
TRIC Tri-County Bancorp Inc. 3.39 47.30
TSBK Timberland Bancorp Inc. 1.68 NA
TSBS Peoples Bancorp Inc. 1.12 NA
TSH Teche Holding Co. 2.88 43.48
TWIN Twin City Bancorp 2.99 46.45
UBMT United Financial Corp. 3.67 NA
UCBC Union Community Bancorp 2.43 NA
UCFC United Community Finl Corp. 0.00 NA
UFBS Union Financial Bcshs Inc. 2.31 31.32
UFRM United Federal Savings Bank 1.41 42.11
UPFC United PanAm Financial Corp. 0.00 NA
USAB USABancshares Inc. 0.00 0.00
UTBI United Tennessee Bankshares 0.00 NA
WAMU Washington Mutual Inc. 2.21 46.34
WAYN Wayne Savings Bancshares (MHC) 2.70 75.15
WBST Webster Financial Corp. 1.64 24.55
WCBI Westco Bancorp Inc. 2.47 37.50
WCFB Webster City Federal SB (MHC) 4.51 125.00
WEFC Wells Financial Corp. 3.12 40.80
WEHO Westwood Homestead Fin. Corp. 3.20 NM
WES Westcorp 1.83 125.00
WFI Winton Financial Corp. 1.70 26.06
WFSL Washington Federal Inc. 3.83 41.78
WHGB WHG Bancshares Corp. 2.17 52.00
</TABLE>
<PAGE> 146
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
--------------------------------------------------------------------
Current Price in Relation to
Current Current --------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WOFC Western Ohio Financial Corp. 23.00 52.84 30.26 191.67 121.05 100.97 107.93 14.81
WRNB Warren Bancorp Inc. 11.88 93.87 14.84 15.03 16.73 236.55 236.55 24.82
WSB Washington Savings Bank, FSB 5.88 25.97 16.32 13.66 19.58 112.76 112.76 9.49
WSBI Warwick Community Bancorp 14.75 97.45 NA NA NA 113.99 113.99 26.28
WSFS WSFS Financial Corp. 17.81 223.46 12.72 13.19 13.60 233.77 235.00 14.40
WSTR WesterFed Financial Corp. 22.25 124.27 15.89 17.25 17.25 113.29 138.98 12.16
WVFC WVS Financial Corp. 13.23 55.16 20.07 15.56 14.39 167.21 167.21 18.57
WYNE Wayne Bancorp Inc. 34.00 68.45 28.33 34.00 35.05 194.62 194.62 24.86
YFCB Yonkers Financial Corp. 16.31 44.47 15.10 15.10 16.82 109.41 109.41 11.26
YFED York Financial Corp. 16.81 150.04 17.51 15.15 18.48 140.46 140.46 12.32
All Public Average 240.03 21.69 21.15 24.32 153.64 160.18 18.49
All Public Median 59.42 17.79 18.03 19.05 137.20 141.24 17.12
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
(%) (%)
-------- ------------
<S> <C> <C>
WOFC Western Ohio Financial Corp. 4.35 833.33
WRNB Warren Bancorp Inc. 3.03 84.81
WSB Washington Savings Bank, FSB 1.70 23.26
WSBI Warwick Community Bancorp 0.00 NA
WSFS WSFS Financial Corp. 0.67 2.22
WSTR WesterFed Financial Corp. 2.25 39.61
WVFC WVS Financial Corp. 3.93 153.06
WYNE Wayne Bancorp Inc. 0.59 20.00
YFCB Yonkers Financial Corp. 1.72 24.07
YFED York Financial Corp. 3.09 41.14
All Public Average 1.70 52.67
All Public Median 1.70 31.42
</TABLE>
<PAGE> 147
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Current Price in Relation to
Current Current ------------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FLORIDA
BANC BankAtlantic Bancorp Inc. 10.69 375.56 17.81 15.95 35.63 153.56 198.66 10.43
BKUNA BankUnited Financial Corp. 11.63 189.86 22.36 21.93 28.35 127.28 142.11 5.40
CMSV Community Savings Bnkshrs(MHC) 31.00 178.50 34.46 33.98 36.84 211.86 211.86 23.47
FDTR Federal Trust Corp. 3.94 19.46 49.23 NA NA 153.23 153.23 13.17
FFFL Fidelity Bankshares Inc. (MHC) 28.00 190.46 22.58 25.93 30.11 215.22 221.87 14.42
FFPB First Palm Beach Bancorp Inc. 37.75 193.90 41.03 25.20 47.19 160.50 167.85 10.99
HARB Harbor Florida Bancshares Inc. 11.88 365.00 16.49 NA NA 141.20 142.73 27.68
OCN Ocwen Financial Corp. 18.00 1,093.89 NM 39.13 138.46 256.05 279.94 31.21
Florida Average 168.26 29.42 26.85 52.76 176.86 189.28 17.10
Florida Median 68.45 22.58 23.07 36.54 157.03 181.26 13.80
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- -----------------------------------------------------------------
<S> <C> <C> <C>
FLORIDA
BANC BankAtlantic Bancorp Inc. 0.90 NM
BKUNA BankUnited Financial Corp. 0.00 0.00
CMSV Community Savings Bnkshrs(MHC) 2.57 87.38
FDTR Federal Trust Corp. 0.00 NA
FFFL Fidelity Bankshares Inc. (MHC) 3.21 81.02
FFPB First Palm Beach Bancorp Inc. 1.85 41.27
HARB Harbor Florida Bancshares Inc. 2.19 NA
OCN Ocwen Financial Corp. 0.00 0.00
Florida Average 1.34 42.33
Florida Median 1.38 43.27
</TABLE>
<PAGE> 148
EXHIBIT 8
INDUSTRY MULTIPLES
PRICING DATA AS OF AUGUST 5, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------------------
Current Price in Relation to
Current Current ---------------------------------------------------------------------
Stock Market Price/ Tangible
Price Value Earnings LTM EPS LTM Core EPS Book Value Book Value Assets
Ticker Short Name ($) ($M) (x) (x) (x) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COMPARABLES
ANDB Andover Bancorp Inc. 34.38 222.78 11.02 14.63 15.01 195.20 195.20 16.00
EBSI Eagle Bancshares 24.13 139.62 16.30 19.61 19.46 185.15 185.15 12.04
FAB FIRSTFED AMERICA BANCORP INC. 17.88 147.86 20.31 20.78 25.54 113.42 113.42 11.24
FNGB First Northern Capital Corp. 12.75 112.95 16.78 17.71 19.03 150.18 150.18 16.36
FWWB First Washington Bancorp Inc. 24.00 255.25 16.67 17.52 18.75 147.60 159.26 20.70
KFBI Klamath First Bancorp 17.63 174.78 16.95 18.95 18.95 110.02 120.14 17.33
MDBK Medford Bancorp Inc. 41.50 184.87 15.26 16.53 17.36 182.18 191.95 16.28
MECH MECH Financial Inc. 29.00 153.56 15.43 17.90 18.01 165.62 165.02 16.09
WSTR WesterFed Financial Corp. 22.25 124.27 15.89 17.25 17.25 113.29 138.98 12.16
YFED York Financial Corp. 16.81 150.04 17.51 15.15 18.48 140.46 140.46 12.32
Comparable Average 166.60 15.91 17.60 18.78 150.31 156.04 15.05
Comparable Median 151.80 16.49 17.62 18.62 148.89 154.72 16.05
All Public Average 240.03 21.69 21.15 24.32 153.64 160.18 18.49
All Public Median 39.42 17.79 18.03 19.05 137.20 141.24 17.12
Florida Average 325.83 29.42 26.85 52.76 176.86 189.28 17.10
Florida Median 192.18 22.58 25.07 36.24 157.03 181.26 13.80
<CAPTION>
Current LTM
Dividend Dividend
Yield Payout Ratio
Ticker Short Name (%) (%)
- ------------------------------------------------------------------------
<S> <C> <C> <C>
COMPARABLES
ANDB Andover Bancorp Inc. 2.10 26.38
EBSI Eagle Bancshares 2.65 48.78
FAB FIRSTFED AMERICA BANCORP INC. 1.12 5.81
FNGB First Northern Capital Corp. 2.82 47.22
FWWB First Washington Bancorp Inc. 1.50 21.90
KFBI Klamath First Bancorp 2.04 36.02
MDBK Medford Bancorp Inc. 1.93 37.45
MECH MECH Financial Inc. 2.07 9.26
WSTR WesterFed Financial Corp. 2.25 39.61
YFED York Financial Corp. 3.09 44.14
Comparable Average 2.16 31.66
Comparable Median 2.08 36.74
All Public Average 1.70 52.67
All Public Median 1.70 31.42
Florida Average 1.34 42.33
Florida Median 1.38 43.27
</TABLE>
<PAGE> 149
EXHIBIT 9
STANDARD CONVERSIONS - 1997 TO DATE
SELECTED MARKET DATA
MARKET DATA AS OF 8/13/98
<TABLE>
<CAPTION>
GROSS
IPO PRICE PROCEEDS
TICKER SHORT NAME IPO DATE ($) ($000)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CITZ CFS Bancorp Inc. 07/24/98 10.000 178,538
UCFC United Community Finl Corp. 07/09/98 10.000 334,656
HRBT Hudson River Bancorp 07/01/98 10.000 173,337
----------------------------------------------------------------------------------------
Q3`98 AVERAGE
MEDIAN
----------------------------------------------------------------------------------------
FKAN First Kansas Financial Corp. 06/29/98 10.000 15,539
CFKY Columbia Financial of Kentucky 04/15/98 10.000 26,715
EFC EFC Bancorp Inc. 04/07/98 10.000 69,365
HBSC Heritage Bancorp Inc. 04/06/98 15.000 69,431
NEP Northeast PA Financial Corp. 04/01/98 10.000 59,515
---------------------------------------------------------------------------------------
Q2`98 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
BYS Bay State Bancorp 03/30/98 20.000 46,949
HLFC Home Loan Financial Corp. 03/26/98 10.000 22,483
CAVB Cavalry Bancorp Inc. 03/17/98 10.000 75,383
ICBC Independence Comm. Bank Corp. 03/17/98 10.000 704,109
RCBK Richmond County Financial Corp 02/18/98 10.000 244,663
HFBC HopFed Bancorp Inc. 02/09/98 10.000 40,336
TSBK Timberland Bancorp Inc. 01/13/98 10.000 66,125
MYST Mystic Financial Inc. 01/09/98 10.000 27,111
UTBI United Tennessee Bankshares 01/05/98 10.000 14,548
---------------------------------------------------------------------------------------
Q1`98 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
1998 YTD AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
PEDE Great Pee Dee Bancorp 12/31/97 10.000 21,821
UCBC Union Community Bancorp 12/29/97 10.000 30,418
WSBI Warwick Community Bancorp 12/23/97 10.000 64,141
SIB Staten Island Bancorp Inc. 12/22/97 12.000 515,775
HCBC High Country Bancorp Inc. 12/10/97 10.000 13,225
FSFF First SecurityFed Financial 10/31/97 10.000 64,080
OTFC Oregon Trail Financial Corp. 10/06/97 10.000 46,949
RVSB Riverview Bancorp Inc. 10/01/97 10.000 NA
SHSB SHS Bancorp Inc. 10/01/97 10.000 8,200
---------------------------------------------------------------------------------------
Q4`97 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
OSFS Ohio State Financial Services 09/29/97 10.000 6,332
FSPT FirstSpartan Financial Corp. 07/09/97 20.000 88,608
GOSB GSB Financial Corp. 07/09/97 10.000 22,483
FBNW FirstBank Corp. 07/02/97 10.000 19,838
---------------------------------------------------------------------------------------
Q3`97 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 05/07/97 10.000 26,450
PSFC Peoples-Sidney Financial Corp. 04/28/97 10.000 17,854
HMLK Hemlock Federal Financial Corp 04/02/97 10.000 20,763
GSLA GS Financial Corp. 04/01/97 10.000 34,385
---------------------------------------------------------------------------------------
Q2'97 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
MRKF Market Financial Corp. 03/27/97 10.000 13,357
EFBC Empire Federal Bancorp Inc. 01/27/97 10.000 25,921
FAB FIRSTFED AMERICA BANCORP INC. 01/15/97 10.000 87,126
RSLN Roslyn Bancorp Inc. 01/13/97 10.000 423,714
AFBC Advance Financial Bancorp 01/02/97 10.000 10,845
---------------------------------------------------------------------------------------
Q1'97 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
1997 AVERAGE
MEDIAN
---------------------------------------------------------------------------------------
1/1/97 TO AVERAGE
8/13/98 MEDIAN
---------------------------------------------------------------------------------------
<CAPTION>
PRICE TO PRO-FORMA
------------------------------------------------
CONVERSION PRO-FORMA PRO-FORMA PRO-FORMA
ASSETS TOTAL EQUITY BOOK VALUE TANG. BOOK PRO-FORMA ADJUSTED
TICKER SHORT NAME ($000) $000 (%) (%) EARNINGS ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CITZ CFS Bancorp Inc. 746,050 249,133 71.7 71.7 18.2 19.3
UCFC United Community Finl Corp. 1,044,993 430,111 77.8 77.8 14.1 24.3
HRBT Hudson River Bancorp 664,996 216,300 80.1 80.1 22.3 20.7
------------------------------------------------------------------------------------------------------------
Q3`98 AVERAGE 76.5 76.5 18.2 21.4
MEDIAN 77.8 77.8 18.2 20.7
------------------------------------------------------------------------------------------------------------
FKAN First Kansas Financial Corp. 95,655 19,784 78.5 78.5 14.0 14.0
CFKY Columbia Financial of Kentucky 104,006 35,863 74.5 74.5 19.6 20.4
EFC EFC Bancorp Inc. 315,910 90,516 76.6 76.6 13.5 18.0
HBSC Heritage Bancorp Inc. 247,499 89,014 78.0 78.0 16.1 21.9
NEP Northeast PA Financial Corp. 369,242 78,908 75.4 75.4 18.7 13.9
------------------------------------------------------------------------------------------------------------
Q2`98 AVERAGE 76.6 76.6 16.4 17.6
MEDIAN 76.6 76.6 16.1 18.0
------------------------------------------------------------------------------------------------------------
BYS Bay State Bancorp 233,074 59,695 78.6 78.6 20.9 16.8
HLFC Home Loan Financial Corp. 60,401 29,603 75.9 75.9 17.0 27.1
CAVB Cavalry Bancorp Inc. 275,925 94,465 79.8 79.8 14.3 21.5
ICBC Independence Comm. Bank Corp. 3,733,316 912,373 77.2 82.7 17.9 15.9
RCBK Richmond County Financial Corp 993,370 307,206 79.6 79.6 14.0 19.8
HFBC HopFed Bancorp Inc. 202,496 53,478 75.4 75.4 12.4 16.6
TSBK Timberland Bancorp Inc. 206,188 81,091 81.5 81.5 10.5 24.3
MYST Mystic Financial Inc. 149,653 34,869 77.8 77.8 17.5 15.3
UTBI United Tennessee Bankshares 64,189 18,556 78.4 78.4 16.1 18.5
-----------------------------------------------------------------------------------------------------------
Q1`98 AVERAGE 78.2 78.9 15.6 19.5
MEDIAN 78.4 78.6 16.1 18.5
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
1998 YTD AVERAGE 77.5 77.8 16.3 19.3
MEDIAN 77.8 78.0 16.1 19.3
----------------------------------------------------------------------------------------------------------
PEDE Great Pee Dee Bancorp 60,538 29,534 73.9 73.9 15.9 26.5
UCBC Union Community Bancorp 84,291 41,044 74.1 74.1 13.5 26.5
WSBI Warwick Community Bancorp 286,545 82,152 78.1 78.1 13.5 18.3
SIB Staten Island Bancorp Inc. 2,144,500 640,283 80.6 83.0 14.1 19.4
HCBC High Country Bancorp Inc. 76,324 17,010 77.7 77.7 30.5 14.8
FSFF First SecurityFed Financial 258,115 84,543 75.8 75.8 25.9 19.9
OTFC Oregon Trail Financial Corp. 204,213 61,266 76.6 76.6 18.5 18.7
RVSB Riverview Bancorp Inc. NA NA 100.0 100.0 NA NA
SHSB SHS Bancorp Inc. 81,688 11,593 70.7 70.7 12.5 9.1
-----------------------------------------------------------------------------------------------------------
Q4`97 AVERAGE 78.6 78.9 18.1 19.2
MEDIAN 76.6 76.6 15.0 19.1
-----------------------------------------------------------------------------------------------------------
OSFS Ohio State Financial Services 33,929 9,998 63.3 63.3 17.0 15.7
FSPT FirstSpartan Financial Corp. 375,526 121,408 73.0 73.0 19.5 19.1
GOSB GSB Financial Corp. 96,323 30,613 73.4 73.4 19.0 18.9
FBNW FirstBank Corp. 133,194 27,578 71.9 71.9 18.0 13.0
-----------------------------------------------------------------------------------------------------------
Q3`97 AVERAGE 70.4 70.4 18.4 16.7
MEDIAN 72.5 72.5 18.5 17.3
-----------------------------------------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 171,241 36,760 72.0 72.0 26.2 13.4
PSFC Peoples-Sidney Financial Corp. 86,882 25,061 71.2 71.2 11.5 17.0
HMLK Hemlock Federal Financial Corp 146,595 28,989 71.6 71.6 37.5 12.4
GSLA GS Financial Corp. 86,521 53,934 63.8 63.8 38.7 28.4
-----------------------------------------------------------------------------------------------------------
Q2'97 AVERAGE 69.7 69.6 28.5 17.8
MEDIAN 71.4 71.4 31.9 15.2
-----------------------------------------------------------------------------------------------------------
MRKF Market Financial Corp. 45,547 18,795 71.1 71.1 26.2 22.7
EFBC Empire Federal Bancorp Inc. 86,810 38,067 68.1 68.1 21.5 23.0
FAB FIRSTFED AMERICA BANCORP INC. 723,778 120,969 72.0 72.0 13.6 10.7
RSLN Roslyn Bancorp Inc. 1,596,744 588,624 72.0 72.0 9.3 21.0
AFBC Advance Financial Bancorp 91,852 15,256 71.1 71.1 16.8 10.6
-----------------------------------------------------------------------------------------------------------
Q1'97 AVERAGE 70.9 70.9 17.5 17.6
MEDIAN 71.1 71.1 16.8 21.0
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
1997 AVERAGE 73.7 73.8 20.0 18.1
MEDIAN 72.0 72.0 18.0 18.7
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
1/1/97 TO AVERAGE 75.4 75.6 18.3 18.6
8/13/98 MEDIAN 75.4 75.4 17.0 18.8
-----------------------------------------------------------------------------------------------------------
<CAPTION>
PERCENT CHANGE FROM IPO
------------------------------------------------------
AFTER AFTER AFTER AFTER
1 DAY 1 WEEK 1 MONTH 3 MONTHS
TICKER SHORT NAME (%) (%) (%) (%)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CITZ CFS Bancorp Inc. 14.38% 9.38% NA NA
UCFC United Community Finl Corp. 50.00% 60.00% 57.50% NA
HRBT Hudson River Bancorp 25.63% 35.00% 33.75% NA
----------------------------------------------------------------------------------------
Q3`98 AVERAGE 30.00% 34.79% 45.63% -
MEDIAN 25.63% 35.00% 45.63% -
----------------------------------------------------------------------------------------
FKAN First Kansas Financial Corp. 23.13% 22.50% 15.00% NA
CFKY Columbia Financial of Kentucky 71.25% 59.38% 60.00% 40.00%
EFC EFC Bancorp Inc. 47.50% 49.38% 41.25% 36.25%
HBSC Heritage Bancorp Inc. NA 46.25% 45.83% 32.50%
NEP Northeast PA Financial Corp. 55.00% 53.75% 54.38% 38.75%
----------------------------------------------------------------------------------------
Q2`98 AVERAGE 49.22% 46.25% 43.29% 36.88%
MEDIAN 51.25% 49.38% 45.83% 37.50%
----------------------------------------------------------------------------------------
BYS Bay State Bancorp 46.88% 48.13% 50.63% 35.00%
HLFC Home Loan Financial Corp. 52.50% 61.88% 67.50% 47.50%
CAVB Cavalry Bancorp Inc. 105.63% 143.75% 140.00% 122.50%
ICBC Independence Comm. Bank Corp. 72.50% 75.63% 81.25% 63.13%
RCBK Richmond County Financial Corp 63.13% 64.38% 78.75% 87.50%
HFBC HopFed Bancorp Inc. 68.13% 60.00% 67.50% 118.75%
TSBK Timberland Bancorp Inc. 45.00% 60.00% 60.00% 76.25%
MYST Mystic Financial Inc. 44.38% 56.25% 50.00% 73.75%
UTBI United Tennessee Bankshares 47.50% 37.50% 42.50% 50.00%
----------------------------------------------------------------------------------------
Q1`98 AVERAGE 60.63% 67.50% 70.90% 74.93%
MEDIAN 52.50% 60.00% 67.50% 73.75%
----------------------------------------------------------------------------------------
1998 YTD AVERAGE 52.03% 55.48% 59.11% 63.22%
MEDIAN 48.75% 56.25% 55.94% 50.00%
----------------------------------------------------------------------------------------
PEDE Great Pee Dee Bancorp 61.25% 55.00% 48.75% 57.50%
UCBC Union Community Bancorp 46.88% 42.50% 42.50% 58.13%
WSBI Warwick Community Bancorp 56.25% 70.00% 56.25% 75.63%
SIB Staten Island Bancorp Inc. 58.86% 61.98% 59.90% 74.48%
HCBC High Country Bancorp Inc. 44.38% 50.63% 45.00% 50.00%
FSFF First SecurityFed Financial 50.63% 51.25% 60.63% 46.88%
OTFC Oregon Trail Financial Corp. 67.50% 63.75% 61.25% 67.50%
RVSB Riverview Bancorp Inc. 31.88% 36.25% 32.50% 77.50%
SHSB SHS Bancorp Inc. 47.50% 62.50% 60.00% 67.50%
----------------------------------------------------------------------------------------
Q4`97 AVERAGE 51.68% 54.87% 51.86% 63.90%
MEDIAN 50.63% 55.00% 56.25% 67.50%
----------------------------------------------------------------------------------------
OSFS Ohio State Financial Services 55.00% 53.70% 49.60% 52.50%
FSPT FirstSpartan Financial Corp. 83.44% 85.00% 78.13% 91.88%
GOSB GSB Financial Corp. 46.25% 48.75% 43.75% 55.00%
FBNW FirstBank Corp. 58.13% 55.63% 77.50% 72.50%
----------------------------------------------------------------------------------------
Q3`97 AVERAGE 60.71% 60.77% 62.24% 67.97%
MEDIAN 56.57% 54.67% 63.55% 63.75%
----------------------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 26.25% 27.50% 28.75% 38.75%
PSFC Peoples-Sidney Financial Corp. 25.63% 28.75% 32.50% 55.00%
HMLK Hemlock Federal Financial Corp 28.75% 28.75% 30.00% 40.00%
GSLA GS Financial Corp. 33.75% 37.50% 40.00% 51.25%
----------------------------------------------------------------------------------------
Q2'97 AVERAGE 28.60% 30.63% 32.81% 46.25%
MEDIAN 27.50% 28.75% 31.25% 45.63%
----------------------------------------------------------------------------------------
MRKF Market Financial Corp. 29.38% 22.50% 26.25% 37.50%
EFBC Empire Federal Bancorp Inc. 32.50% 35.00% 37.50% 31.25%
FAB FIRSTFED AMERICA BANCORP INC. 36.25% 41.25% 48.75% 38.75%
RSLN Roslyn Bancorp Inc. 50.00% 59.38% 60.00% 58.75%
AFBC Advance Financial Bancorp 28.75% 29.38% 40.00% 40.00%
----------------------------------------------------------------------------------------
Q1'97 AVERAGE 35.38% 37.50% 42.50% 41.25%
MEDIAN 32.50% 35.00% 40.00% 38.75%
----------------------------------------------------------------------------------------
1997 AVERAGE 45.42% 47.59% 48.16% 56.28%
MEDIAN 46.57% 49.69% 46.88% 55.00%
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
1/1/97 TO AVERAGE 48.20% 51.03% 52.77% 58.86%
8/13/98 MEDIAN 47.50% 51.25% 49.80% 55.00%
----------------------------------------------------------------------------------------
<CAPTION>
CURRENT PRICE TO
CURENT --------------------------------------------------------
STOCK PRICE BOOK VALUE TANG. BOOK LTM EARNINGS
TICKER SHORT NAME 8/13/98 (%) (%) (X)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CITZ CFS Bancorp Inc. 10.625 NA NA NA
UCFC United Community Finl Corp. 15.375 NA NA NA
HRBT Hudson River Bancorp 12.125 NA NA NA
-------------------------------------------------------------------------------------------------------
Q3`98 AVERAGE 12.708 - - -
MEDIAN 12.125 - - -
-------------------------------------------------------------------------------------------------------
FKAN First Kansas Financial Corp. 10.875 80.790 81.830 NA
CFKY Columbia Financial of Kentucky 14.250 NA NA NA
EFC EFC Bancorp Inc. 11.250 NA NA NA
HBSC Heritage Bancorp Inc. 18.375 NA NA NA
NEP Northeast PA Financial Corp. 12.750 88.730 88.730 NA
-------------------------------------------------------------------------------------------------------
Q2`98 AVERAGE 13.500 84.760 85.280
MEDIAN 12.750 84.760 85.280
-------------------------------------------------------------------------------------------------------
BYS Bay State Bancorp 23.750 87.19 87.19 NA
HLFC Home Loan Financial Corp. 14.500 103.28 103.28 NA
CAVB Cavalry Bancorp Inc. 19.750 147.72 147.72 NA
ICBC Independence Comm. Bank Corp. 13.750 108.87 115.35 NA
RCBK Richmond County Financial Corp 15.063 121.09 121.48 NA
HFBC HopFed Bancorp Inc. 17.250 119.29 119.29 NA
TSBK Timberland Bancorp Inc. 14.875 115.49 115.49 NA
MYST Mystic Financial Inc. 13.750 103.15 103.15 NA
UTBI United Tennessee Bankshares 12.750 91.59 91.59 NA
-------------------------------------------------------------------------------------------------------
Q1`98 AVERAGE 16.160 110.85 111.62
MEDIAN 14.875 108.87 115.35
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
1998 YTD AVERAGE 14.768 106.11 106.83
MEDIAN 14.250 103.28 103.28
-------------------------------------------------------------------------------------------------------
PEDE Great Pee Dee Bancorp 11.750 82.80 82.80 NA
UCBC Union Community Bancorp 13.625 95.21 95.21 NA
WSBI Warwick Community Bancorp 14.750 113.99 113.99 NA
SIB Staten Island Bancorp Inc. 19.500 123.81 126.95 NA
HCBC High Country Bancorp Inc. 13.500 98.90 98.90 NA
FSFF First SecurityFed Financial 15.250 104.52 104.81 NA
OTFC Oregon Trail Financial Corp. 15.625 98.33 98.33 NA
RVSB Riverview Bancorp Inc. 15.125 142.55 147.13 NA
SHSB SHS Bancorp Inc. 17.750 118.89 118.89 NA
-------------------------------------------------------------------------------------------------------
Q4`97 AVERAGE 15.208 108.78 109.67 -
MEDIAN 15.125 104.52 104.81 -
-------------------------------------------------------------------------------------------------------
OSFS Ohio State Financial Services 16.000 97.150 97.150 NA
FSPT FirstSpartan Financial Corp. 37.500 126.820 126.820 NA
GOSB GSB Financial Corp. 13.625 95.280 95.280 NA
FBNW FirstBank Corp. 18.875 114.190 114.190 NA
-------------------------------------------------------------------------------------------------------
Q3`97 AVERAGE 21.500 108.36 108.36 -
MEDIAN 17.438 105.67 105.67 -
-------------------------------------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 13.125 90.8 91.9 NA
PSFC Peoples-Sidney Financial Corp. 19.750 123.6 123.6 NA
HMLK Hemlock Federal Financial Corp 16.750 108.3 108.3 NA
GSLA GS Financial Corp. 13.500 84.0 84.0 NA
-------------------------------------------------------------------------------------------------------
Q2'97 AVERAGE 15.781 101.68 101.95 -
MEDIAN 15.125 99.59 100.13 -
-------------------------------------------------------------------------------------------------------
MRKF Market Financial Corp. 13.750 116.7 116.7 27.5
EFBC Empire Federal Bancorp Inc. 14.000 89.3 89.3 20.9
FAB FIRSTFED AMERICA BANCORP INC. 16.875 107.1 107.1 19.6
RSLN Roslyn Bancorp Inc. 18.938 131.9 132.4 16.1
AFBC Advance Financial Bancorp 16.375 112.8 112.8 17.2
--------------------------------------------------------------------------------------------------------
Q1'97 AVERAGE 15.988 111.55 111.66 20.26
MEDIAN 16.375 112.78 112.78 19.62
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
1997 AVERAGE 16.634 108.04 108.48 20.26
MEDIAN 15.438 107.71 107.71 19.62
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
1/1/97 TO AVERAGE 15.821 107.40 107.93 20.26
8/13/98 MEDIAN 14.875 107.07 107.07 19.62
--------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT PRICE TO
----------------------------------------------
EARNINGS CORE EPS LTM EPS ASSETS
TICKER SHORT NAME (X) (X) (X) (%)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CITZ CFS Bancorp Inc. NA NA NA NA
UCFC United Community Finl Corp. NA NA NA NA
HRBT Hudson River Bancorp NA NA NA NA
------------------------------------------------------------------------------
Q3`98 AVERAGE - - - -
MEDIAN - - - -
------------------------------------------------------------------------------
FKAN First Kansas Financial Corp. NA NA NA 15.940
CFKY Columbia Financial of Kentucky NA NA NA NA
EFC EFC Bancorp Inc. NA NA NA NA
HBSC Heritage Bancorp Inc. NA NA NA NA
NEP Northeast PA Financial Corp. NA NA NA 17.150
------------------------------------------------------------------------------
Q2`98 AVERAGE 16.545
MEDIAN 16.545
------------------------------------------------------------------------------
BYS Bay State Bancorp 26.99 26.99 NA 20.93
HLFC Home Loan Financial Corp. 24.17 24.17 NA 39.79
CAVB Cavalry Bancorp Inc. 22.44 27.43 NA 43.81
ICBC Independence Comm. Bank Corp. 22.92 22.92 NA 21.85
RCBK Richmond County Financial Corp 17.12 17.12 NA 24.94
HFBC HopFed Bancorp Inc. 20.54 20.54 NA 31.94
TSBK Timberland Bancorp Inc. 15.49 16.17 NA 37.38
MYST Mystic Financial Inc. 19.10 20.22 NA 18.73
UTBI United Tennessee Bankshares NA NA NA 24.71
------------------------------------------------------------------------------
Q1`98 AVERAGE 21.10 21.95 29.34
MEDIAN 21.49 21.73 24.94
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1998 YTD AVERAGE 21.10 21.95 27.02
MEDIAN 21.49 21.73 24.71
------------------------------------------------------------------------------
PEDE Great Pee Dee Bancorp 17.28 17.28 NA 37.36
UCBC Union Community Bancorp 21.29 21.29 NA 38.35
WSBI Warwick Community Bancorp NA NA NA 26.28
SIB Staten Island Bancorp Inc. 18.06 18.06 NA 29.15
HCBC High Country Bancorp Inc. 21.09 21.09 NA 19.35
FSFF First SecurityFed Financial 15.89 15.89 NA 30.23
OTFC Oregon Trail Financial Corp. 21.70 21.70 NA 28.60
RVSB Riverview Bancorp Inc. 18.01 18.91 NA 34.83
SHSB SHS Bancorp Inc. 16.44 20.17 NA 16.46
-----------------------------------------------------------------------------
Q4`97 AVERAGE 18.72 19.30 - 28.96
MEDIAN 18.04 19.54 - 29.15
-----------------------------------------------------------------------------
OSFS Ohio State Financial Services NA NA NA 26.320
FSPT FirstSpartan Financial Corp. 19.950 21.800 NA 30.820
GOSB GSB Financial Corp. 42.580 42.580 NA 23.730
FBNW FirstBank Corp. 18.880 52.430 NA 19.260
-----------------------------------------------------------------------------
Q3`97 AVERAGE 27.14 38.94 - 25.03
MEDIAN 19.95 42.58 - 25.03
-----------------------------------------------------------------------------
HCBB HCB Bancshares Inc. 41.0 41.0 NA 15.7
PSFC Peoples-Sidney Financial Corp. 24.7 24.7 NA 33.4
HMLK Hemlock Federal Financial Corp 19.9 19.9 NA 17.5
GSLA GS Financial Corp. 21.1 30.7 NA 35.0
-----------------------------------------------------------------------------
Q2'97 AVERAGE 26.69 29.08 - 25.39
MEDIAN 22.89 27.69 - 25.48
-----------------------------------------------------------------------------
MRKF Market Financial Corp. 31.3 31.3 27.5 34.2
EFBC Empire Federal Bancorp Inc. 20.6 20.6 20.9 32.8
FAB FIRSTFED AMERICA BANCORP INC. 19.2 23.4 24.1 10.6
RSLN Roslyn Bancorp Inc. 14.8 15.8 16.9 20.4
AFBC Advance Financial Bancorp 14.6 16.4 18.4 15.9
-----------------------------------------------------------------------------
Q1'97 AVERAGE 20.09 21.49 21.56 22.78
MEDIAN 19.18 20.59 20.90 20.35
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
1997 AVERAGE 21.92 24.75 21.56 26.19
MEDIAN 19.95 21.19 20.90 27.46
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
1/1/97 TO AVERAGE 21.68 23.95 21.56 26.47
8/13/98 MEDIAN 20.25 21.19 20.90 26.28
-----------------------------------------------------------------------------
</TABLE>
<PAGE> 150
================================================================================
EXHIBIT 10
SECOND STEP CONVERSIONS - 1997 TO DATE
SELECTED MARKET DATA
MARKET DATA AS OF 8/13/98
<TABLE>
<CAPTION>
IPO PRICE
TICKER SHORT NAME IPO DATE ($)
- ---------------------------------------------------------------------
<S> <C> <C> <C>
HSTD Homestead Bancorp Inc. 07/20/98 10.000
PSBI PSB Bancorp Inc. 07/17/98 10.000
THTL Thistle Group Holdings Co. 07/14/98 10.000
SBAN SouthBanc Shares Inc. 04/15/98 20.000
FSLA First Source Bancorp Inc. 04/09/98 10.000
TSBS Peoples Bancorp Inc. 04/09/98 10.000
PFSL Pocahontas Bancorp Inc. 04/01/98 10.000
HARB Harbor Florida Bancshares Inc. 03/19/98 10.000
HFWA Heritage Financial Corp. 01/09/98 10.000
GFED Guaranty Federal Bcshs Inc. 12/31/97 10.000
EBI Equality Bancorp Inc. 12/02/97 10.000
FSNJ Bayonne Bancshares Inc. 08/22/97 10.000
MONT Montgomery Financial Corp. 07/01/97 10.000
- ---------------------------------------------------------------------
1/1/97 TO AVERAGE
8/13/98 MEDIAN
- ---------------------------------------------------------------------
<CAPTION>
------------------------------------------------
PERCENT CHANGE FROM IPO
------------------------------------------------
AFTER AFTER AFTER AFTER CURRENT
1 DAY 1 WEEK 1 MONTH 3 MONTHS STOCK PRICE
TICKER SHORT NAME (%) (%) (%) (%) 8/13/98
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HSTD Homestead Bancorp Inc. -6.87% -7.50% NA NA 8.250
PSBI PSB Bancorp Inc. -8.12% -8.75% -20.62% NA 7.938
THTL Thistle Group Holdings Co. -0.62% -1.87% -8.12% NA 9.188
SBAN SouthBanc Shares Inc. 13.75% 12.50% 4.38% -5.00% 18.250
FSLA First Source Bancorp Inc. 5.63% 5.00% 5.00% -5.00% 8.938
TSBS Peoples Bancorp Inc. 4.38% 5.63% 6.25% -0.94% 8.688
PFSL Pocahontas Bancorp Inc. 4.38% 2.50% -0.62% -3.75% 8.750
HARB Harbor Florida Bancshares Inc. 20.00% 16.88% 26.25% 19.38% 12.125
HFWA Heritage Financial Corp. 32.50% 32.50% 42.50% 53.75% 12.750
GFED Guaranty Federal Bcshs Inc. 28.75% 25.00% 23.75% 25.00% 12.625
EBI Equality Bancorp Inc. 34.38% 49.38% 41.25% 57.50% 13.000
FSNJ Bayonne Bancshares Inc. 17.50% 18.75% 26.88% 22.50% 14.938
MONT Montgomery Financial Corp. 11.25% 12.50% 20.63% 22.50% 11.000
-----------------------------------------------------------------------------------------
1/1/97 TO AVERAGE 12.07% 12.50% 13.96% 18.59% 11.265
8/13/98 MEDIAN 11.25% 12.50% 13.44% 20.94% 11.000
-----------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------
CURRENT PRICE TO
--------------------------------------------------------------------------------
% CHANGE
FROM BOOK VALUE TANG. BOOK LTM EARNINGS EARNINGS CORE EPS LTM EPS ASSETS
TICKER SHORT NAME IPO TO DATE (%) (%) (X) (X) (X) (X) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HSTD Homestead Bancorp Inc. -17.50% NA NA NA NA NA NA NA
PSBI PSB Bancorp Inc. -20.62% NA NA NA NA NA NA NA
THTL Thistle Group Holdings Co. -8.12% NA NA NA NA NA NA NA
SBAN SouthBanc Shares Inc. -8.75% NA NA NA NA NA NA NA
FSLA First Source Bancorp Inc. -10.62% 109.400 113.000 NA NA NA NA 23.230
TSBS Peoples Bancorp Inc. -13.12% 92.430 95.260 NA NA NA NA 36.120
PFSL Pocahontas Bancorp Inc. -12.50% 100.110 103.430 NA NA NA NA 14.460
HARB Harbor Florida Bancshares Inc. 21.25% 144.170 145.730 NA 16.840 17.830 NA 28.260
HFWA Heritage Financial Corp. 27.50% 133.790 133.790 NA NA NA NA 38.530
GFED Guaranty Federal Bcshs Inc. 26.25% 105.120 105.120 NA 21.040 21.040 NA 30.240
EBI Equality Bancorp Inc. 30.00% 125.000 125.000 NA 21.670 NM NA 11.970
FSNJ Bayonne Bancshares Inc. 49.38% 141.590 141.590 NA 31.120 31.120 NA 19.400
MONT Montgomery Financial Corp. 10.00% 91.290 91.290 NA 16.180 16.180 NA 16.660
------------------------------------------------------------------------------------------------
1/1/97 TO AVERAGE 5.63% 115.878 117.134 - 21.370 21.543 - 24.319
8/13/98 MEDIAN -8.12% 109.400 113.000 - 21.040 19.435 - 23.230
------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 151
EXHIBIT 11
FULL CONVERSION - NO FOUNDATION
COMMUNITY SAVINGS BANKSHARES, INC.
PRO-FORMA ANALYSIS SHEET - TWELVE MONTHS ENDED
JUNE 30, 1998
INCLUDES SOP 93-6
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Bank Comparables State National
------------------------------------------------------------------------------------------
Mean Median Mean Median Mean Median
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Min 16.67
Price-Earnings Ratio P/E Mid 18.87 17.47 17.76 26.22 24.05 20.85 17.73
- ------------------------
Max 21.28
Smax 23.81
Min 83.54%
Price-to-Book Ratio P/B Mid 92.08% 148.75% 155.30% 173.46% 165.33% 150.25% 133.33%
- -----------------------
Max 99.70%
Smax 107.41%
Min 83.54%
Price-to-Tangible Book Ratio P/TB Mid 92.08% 154.38% 157.44% 183.92% 172.53% 156.31% 136.35%
- ---------------------------------
Max 99.70%
Smax 107.41%
Min 13.56%
Price-to-Assets Ratio P/A Mid 15.79% 14.95% 15.62% 16.73% 12.08% 18.10% 16.71%
- -------------------------
Max 17.96%
Smax 20.41%
</TABLE>
PAGE 1
<PAGE> 152
<TABLE>
<CAPTION>
EXHIBIT 11
FULL CONVERSION - NO FOUNDATION
Valuation Parameters
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Prior Twelve Mos. Earning Base Y
Period Ended June 30, 1998 $ 5,132 (1)
- ------------------------------------------------------------------------------------------
Pre-Conversion Book Value B
As of June 30, 1998 $ 83,078
- ------------------------------------------------------------------------------------------
Pre-Conversion Assets A
As of June 30, 1998 $ 765,488
- ------------------------------------------------------------------------------------------
Return on Money R 3.37%(2)
- ------------------------------------------------------------------------------------------
Conversion Expenses $ 1,526
X 1.17%(3)
- ------------------------------------------------------------------------------------------
Proceeds Not Invested $ 8,090 (4)
- ------------------------------------------------------------------------------------------
Estimated ESOP Borrowings $ 5,393
ESOP Purchases E 8.00%(5)
Cost of ESOP Borrowings $ 360 (5)
Cost of ESOP Borrowings S 0.00 (5)
Amort of ESOP Borrowings T 15 Years
- ------------------------------------------------------------------------------------------
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 2,697 (6)
MRP Purchases M 4.00%
MRP Expense $ 539
- ------------------------------------------------------------------------------------------
Foundation Amount $ -- (7)
Foundation Amount F 0.00% 0.00%
Foundation Opportunity Cost $ --
Tax Benefit Z $ -- (8)
- ------------------------------------------------------------------------------------------
Tax Rate TAX 37.65%
- ------------------------------------------------------------------------------------------
Percentage Sold PCT 51.86%
- ------------------------------------------------------------------------------------------
Amount to be issued to Public $ 67,418 (9)
- ------------------------------------------------------------------------------------------
Earnings Multiple (1 if stub period, 0 if full twelve months) 12 0
- ------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) Net income for the twelve months ended June 30, 1998.
(2) Net Return assumes a reinvestment rate of 5.41 percent (the 1 year Treasury
at June 30, 1998), and a tax rate of 38%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP.
(5) Assumes ESOP is amortized straight line over 15 years. (6) Assumes MRP is
amortized straight line over 5 years.
(7) Not applicable.
(8) Not Applicable.
(9) The amount to be offered to public.
PAGE 2
<PAGE> 153
EXHIBIT 11
Full Conversion - No Foundation
PRO FORMA CALCULATION
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $130,000,000
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $130,000,000
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $130,000,000
1-P/A*PCT*(1-X-E-M-F)
The appraisal was performed on a market basis and not on the above formulas.
<TABLE>
<CAPTION>
Total Shares Price Total
Conclusion Shares Per Share Value
- ---------- ------ --------- -----
<S> <C> <C> <C>
Appraised Value - Midpoint 13,000,000 $ 10 $130,000,000
Range:
- Minimum 11,050,000 $ 10 110,500,000
- Maximum 14,950,000 10 149,500,000
- Super Maximum 17,192,500 10 171,925,000
</TABLE>
<TABLE>
<CAPTION>
PRE FOUNDATION
---------------------------------------------------------------------
Appraised Value
---------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum*
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Full Conversion Value $110,500,000 $130,000,000 $149,500,000 $171,925,000
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Exchange Percent 48.14% 48.14% 48.14% 48.14%
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Conversion Percent 51.86% 51.86% 51.86% 51.86%
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
Exchange Ratio 2.1416 2.5196 2.8975 3.3321
---------------------------------------------------------------------
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Page 3
<PAGE> 154
EXHIBIT 11
Full Conversion - No Foundation
<TABLE>
<CAPTION>
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -------------------------------
Conversion Proceeds
- -------------------------------
Total Shares Offered 11,050,000 13,000,000 14,950,000 17,192,500
Conversion Shares Offered 5,730,659 6,741,777 7,753,143 8,916,176
Price Per Share $ 10 $ 10 $ 10 $ 10
---------------------------------------------------------------------
Gross Proceeds $ 57,307 $ 67,418 $ 77,531 $ 89,162
Plus: Value issued to Foundation (9) -- -- -- --
---------------------------------------------------------------------
Pro Forma Market Capitalization 57,307 67,418 77,531 89,162
=====================================================================
Gross Proceeds 57,307 67,418 77,531 89,162
Less: Est. Conversion Expenses 1,456 1,526 1,596 1,676
Less: Cash issued to Foundation -- -- -- --
---------------------------------------------------------------------
Net Proceeds $ 55,851 $ 65,892 $ 75,935 $ 87,486
=====================================================================
- -------------------------------
Estimated Income from Proceeds
- -------------------------------
Net Conversion Proceeds $ 55,851 $ 65,892 $ 75,935 $ 87,486
Less: ESOP Adjustment (3) 4,585 5,393 6,202 7,133
Less: MRP Adjustment (3) 2,292 2,697 3,101 3,566
---------------------------------------------------------------------
Net Proceeds Reinvested $ 48,974 $ 57,802 $ 66,632 $ 76,787
Estimated Incremental Rate of Return 3.37% 3.37% 3.37% 3.37%
---------------------------------------------------------------------
Estimated Incremental Return $ 1,650 $ 1,948 $ 2,245 $ 2,588
Less: Cost of ESOP (4) -- -- -- --
Less: Amortization of ESOP (7) 191 224 258 296
Less: MRP Adjustment (7) 286 336 387 445
---------------------------------------------------------------------
Pro-forma Net Income 1,173 1,388 1,600 1,847
Earnings Before Conversion 5,132 5,132 5,132 5,132
---------------------------------------------------------------------
Earnings Excluding Adjustment 6,305 6,520 6,732 6,979
Earnings Adjustment (6) -- -- -- --
---------------------------------------------------------------------
Earnings After Conversion $ 6,305 $ 6,520 $ 6,732 $ 6,979
---------------------------------------------------------------------
</TABLE>
Page 4
<PAGE> 155
EXHIBIT 11
Full Conversion - No Foundation
<TABLE>
<CAPTION>
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------
Pro-forma Net Worth
- -----------------------------
Net Worth at June 30, 1998 $ 83,078 $ 83,078 $ 83,078 $ 83,078
Net Conversion Proceeds 55,851 65,892 75,935 87,486
Plus: MHC Adjustment (7) 200 200 200 200
Plus: After tax Foundation Contribution -- -- -- --
Less: ESOP Adjustment (1) (4,585) (5,393) (6,202) (7,133)
Less: MRP Adjustment (2) (2,292) (2,697) (3,101) (3,566)
---------------------------------------------------------------------
Pro-forma Net Worth $ 132,252 $ 141,080 $ 149,910 $ 160,065
- -----------------------------
Pro-forma Tangible Net Worth
- -----------------------------
Pro-forma Net Worth $ 132,252 $ 141,080 $ 149,910 $ 160,065
Less: Intangible (5) -- -- -- --
---------------------------------------------------------------------
Pro-forma Tangible Net Worth $ 132,252 $ 141,080 $ 149,910 $ 160,065
- -----------------------------
Pro-forma Assets
- -----------------------------
Total Assets at June 30, 1998 $ 765,488 $ 765,488 $ 765,488 $ 765,488
Net Conversion Proceeds 55,851 65,892 75,935 87,486
Plus: MHC Adjustment (7) 200 200 200 200
Plus: Tax Benefit of Foundation -- -- -- --
Less: ESOP Adjustment (1) (4,585) (5,393) (6,202) (7,133)
Less: MRP Adjustment (2) (2,292) (2,697) (3,101) (3,566)
---------------------------------------------------------------------
Pro-forma Assets Excluding Adjustment 814,662 823,490 832,320 842,475
Plus: Adjustment (6) -- -- -- --
---------------------------------------------------------------------
Pro-forma Total Assets $ 814,662 $ 823,490 $ 832,320 $ 842,475
---------------------------------------------------------------------
- ------------------------------
Stockholder's Equity Per Share
- ------------------------------
Net Worth at June 30, 1998 $ 7.52 $ 6.39 $ 5.56 $ 4.83
Estimated Net Proceeds 5.05 5.07 5.08 5.09
Plus: MHC Adjustment 0.02 0.02 0.01 0.01
Plus: Foundation Contribution -- -- -- --
Less: ESOP Stock (0.41) (0.41) (0.41) (0.41)
Less: MRP Stock (0.21) (0.21) (0.21) (0.21)
---------------------------------------------------------------------
Pro-forma Net Worth Per Share 11.97 10.86 10.03 9.31
Less: Intangible -- -- -- --
---------------------------------------------------------------------
Pro-forma Tangible Net Worth Per Share $ 11.97 $ 10.86 $ 10.03 $ 9.31
---------------------------------------------------------------------
</TABLE>
Page 5
<PAGE> 156
EXHIBIT 11
Full Conversion - No Foundation
<TABLE>
<CAPTION>
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------
Net Earnings Per Share
- ---------------------------
Historical Earnings Per Share (8) $ 0.49 $ 0.42 $ 0.36 $ 0.31
Incremental return Per Share (8) 0.16 0.16 0.16 0.16
ESOP Adjustment Per Share (8) (0.02) (0.02) (0.02) (0.02)
MRP Adjustment Per Share (8) (0.03) (0.03) (0.03) (0.03)
Normalizing Adjustment Per Share -- -- -- --
---------------------------------------------------------------------
Proforma Earnings Per Share (8) $ 0.60 $ 0.53 $ 0.47 $ 0.42
=====================================================================
- ---------------------------
Shares Utilized
- ---------------------------
Shares Utilized 10,498 12,352 14,204 16,336
---------------------------------------------------------------------
- ---------------------------
Pro-forma Ratios
- ---------------------------
Price/EPS without Adjustment 16.67 18.87 21.28 23.81
Price/EPS with Adjustment 16.67 18.87 21.28 23.81
Price/Book Value per Share 83.54% 92.08% 99.70% 107.41%
Price/Tangible Book Value 83.54% 92.08% 99.70% 107.41%
Market Value/Assets 13.56% 15.79% 17.96% 20.41%
---------------------------------------------------------------------
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized
over 15 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized
over 5 years.
(3) Consists of ESOP and MRP amortization.
(4) The ESOP loan is from the Holding Company and therefore, there are no
costs.
(5) Not applicable.
(6) Not applicable.
(7) ESOP and MRP are amortized over 15 and 5 years respectively, and tax
impacted at 37.65%.
(8) All EPS computations are done in accordance with SOP 93-6.
(9) Not applicable.
Page 6
<PAGE> 157
EXHIBIT 11
FULL CONVERSION - NO FOUNDATION
<TABLE>
<CAPTION>
- -------------------------------
Expense Calculations
- -------------------------------
<S> <C> <C> <C> <C>
Total Shares Offered 5,731 6,742 7,753 8,916
Price Per Share $ 10 $ 10 $ 10 $ 10
-----------------------------------------------
Gross Proceeds $ 57,307 $ 67,418 $ 77,531 $ 89,162
Estimated Insider Purchases (216) (216) (216) (216)
ESOP Purchases (4,585) (5,393) (6,202) (7,133)
-----------------------------------------------
Proceeds to Base Fee On $ 52,506 $ 61,809 $ 71,113 $ 81,813
Underwriters Percentage 0.75% 0.75% 0.75% 0.75%
-----------------------------------------------
Underwriters Fee $ 394 $ 464 $ 534 $ 614
Advisory Fee -- -- -- --
-----------------------------------------------
Total Underwriters Fee 394 464 534 614
All Other Expenses 1,062 1,062 1,062 1,062
-----------------------------------------------
Total Expense $ 1,456 $ 1,526 $ 1,596 $ 1,676
<CAPTION>
- -------------------------------
Shares Calculations Mipoint Calculation
- ------------------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Outstanding 11,050 13,000 14,950 17,193 BV/Share ESOP 12/97 98,450
Less: New ESOP Adjustment 459 539 620 713 - 2 Qtrs Amort 13,600
Less: Old ESOP Adjustment (1) 182 214 246 283 x Exch Ratio 2.5196
=======
Plus: New SOP 93-6 ESOP Shares (2) 31 36 41 48 = 213,788
=======
Plus: Old SOP 93-6 ESOP Shares (2) 58 69 79 91 Beg ESOP 190,388
=========================================== EPS Amort Yrs 7
Shares for all EPS Calculations 10,498 12,352 14,204 16,336 Yearly Amort 27,198
=========================================== x Exch Ratio 2.5196
=======
= 68,529
=======
<CAPTION>
POST FOUNDATION
--------------------------------------------------------
Appraised Value
--------------------------------------------------------
--------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum
--------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Issued and Exchanged $ 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 1 $ 10 $ 10
Shares Issued to Foundation -- -- -- --
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Implied Exhange Ratio 2.1416 2.5196 2.8975 3.3321
Gross Proceeds $ 57,306,590 $ 67,417,770 $77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $71,968,570 $ 82,763,240
--------------------------------------------------------
</TABLE>
PAGE 7
<PAGE> 158
EXHIBIT 11
FULL CONVERSION - NO FOUNDATION
<TABLE>
<CAPTION>
- -------------------------------
MRP Dilution
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares Outstanding 11,050,000 13,000,000 14,950,000 17,192,500
Less: New ESOP Adjustment 458,453 539,342 620,251 713,294
Less: Old ESOP Adjustment 182,000 214,000 246,000 283,000
Plus: New MRP issued (1) 442,000 520,000 598,000 687,700
Plus: New SOP 93-6 ESOP Shares (2) 30,564 35,956 41,350 47,553
Plus: Old SOP 93-6 ESOP Shares 58,000 69,000 79,000 91,000
(2)
Shares for all EPS Calculations 10,940,111 12,871,614 14,802,099 17,022,459
EPS $ 0.58 $ 0.51 $ 0.46 $ 0.42
BV/Share $ 11.51 $ 10.43 $ 9.64 $ 8.95
Voting Dilution 4.21% 4.21% 4.21% 4.21%
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------
Option Dilution
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares Outstanding 11,050,000 13,000,000 14,950,000 17,192,500
Less: New ESOP Adjustment 458,453 539,342 620,251 713,294
Less: Old ESOP Adjustment 182,000 214,000 246,000 283,000
Plus: Options (1) 573,066 674,178 775,314 891,618
Plus: New SOP 93-6 ESOP Shares (2) 30,564 35,956 41,350 47,553
Plus: Old SOP 93-6 ESOP Shares 58,000 69,000 79,000 91,000
(2)
Shares for all EPS Calculations 11,071,177 13,025,792 14,979,413 17,226,377
EPS $ 0.57 $ 0.50 $ 0.45 $ 0.41
BV/Share $ 11.87 $ 10.81 $ 10.03 $ 9.34
Voting Dilution 5.46% 5.45% 5.46% 5.45%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 8
<PAGE> 159
EXHIBIT 12
Stub Period - No Foundation
COMMUNITY SAVINGS BANKSHARES, INC.
PRO-FORMA ANALYSIS SHEET - SIX MONTHS ENDED
JUNE 30, 1998
INCLUDES SOP 93-6
<TABLE>
<CAPTION>
Bank Comparables State National
-----------------------------------------------------------------------------
Mean Median Mean Median Mean Median
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Min 16.67
Price-Earnings Ratio P/E Mid 19.23 17.47 17.76 26.22 24.05 20.85 17.73
Max 20.83
Smax 23.81
Min 83.54%
Price-to-Book Ratio P/B Mid 92.08% 148.75% 155.30% 173.46% 165.33% 150.25% 133.33%
Max 99.70%
Smax 107.41%
Min 83.54%
Price-to-Tangible Book Ratio P/TB Mid 92.08% 154.38% 157.44% 183.92% 172.53% 156.31% 136.35%
Max 99.70%
Smax 107.41%
Min 13.56%
Price-to-Assets Ratio P/A Mid 15.79% 14.95% 15.62% 16.73% 12.08% 18.10% 16.71%
Max 17.96%
Smax 20.41%
</TABLE>
Page 1
<PAGE> 160
EXHIBIT 12
Stub Period - No Foundation
<TABLE>
<CAPTION>
Valuation Parameters
- ------------------------------------------------------------------------------------
<S> <C> <C>
Six Months Ended Y
Period Ended June 30, 1998 $ 2,511 (1)
- ------------------------------------------------------------------------------------
Pre-Conversion Book Value B
As of June 30, 1998 $ 83,078
- ------------------------------------------------------------------------------------
Pre-Conversion Assets A
As of June 30, 1998 $ 765,488
- ------------------------------------------------------------------------------------
Return on Money R 3.37% (2)
- ------------------------------------------------------------------------------------
Conversion Expenses $ 1,526
X 1.17% (3)
- ------------------------------------------------------------------------------------
Proceeds Not Invested $ 8,090 (4)
- ------------------------------------------------------------------------------------
Estimated ESOP Borrowings $ 5,393
ESOP Purchases E 8.00% (5)
Cost of ESOP Borrowings $ 360 (5)
Cost of ESOP Borrowings S 0.00% (5)
Amort of ESOP Borrowings T 15 Years
- ------------------------------------------------------------------------------------
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 2,697 (6)
MRP Purchases M 4.00%
MRP Expense $ 539
- ------------------------------------------------------------------------------------
Foundation Amount $ -- (7)
Foundation Amount F 0.00% 0.00%
Foundation Opportunity Cost $ --
Tax Benefit Z $ -- (8)
- ------------------------------------------------------------------------------------
Tax Rate TAX 37.65%
- ------------------------------------------------------------------------------------
Percentage Sold PCT 51.86%
- ------------------------------------------------------------------------------------
Amount to be issued to Public $ 67,418 (9)
- ------------------------------------------------------------------------------------
Earnings Multiple (1 if stub period, 0 if full twelve months) 6 1
- ------------------------------------------------------------------------------------
</TABLE>
(1) Net income for the 6 months ended June 30, 1998.
(2) Net Return assumes a reinvestment rate of 5.41 percent (the 1 year
Treasury at June 30, 1998), and a tax rate of 38%.
(3) Conversion expenses reflect estimated expenses as presented in the
offering document.
(4) Includes Stock from ESOP and MRP.
(5) Assumes ESOP is amortized straight line over 15 years.
(6) Assumes MRP is amortized straight line over 5 years.
(7) Not applicable.
(8) Not Applicable.
(9) The amount to be offered to public.
Page 2
<PAGE> 161
EXHIBIT 12
Stub Period - No Foundation
PRO FORMA CALCULATION
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $130,000,000
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $130,000,000
---------
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $130,000,000
-----
1-P/A*PCT*(1-X-E-M-F)
The appraisal was performed on a market basis and not on the above formulas.
<TABLE>
<CAPTION>
Total Shares Price Total
Conclusion Shares Per Share Value
------ --------- -----
<S> <C> <C> <C>
Appraised Value - Midpoint 13,000,000 $ 10 $130,000,000
Range:
- Minimum 11,050,000 $ 10 110,500,000
- Maximum 14,950,000 10 149,500,000
- Super Maximum 17,192,500 10 171,925,000
</TABLE>
<TABLE>
<CAPTION>
PRE FOUNDATION
---------------------------------------------------------------------
Appraised Value
---------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum*
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Full Conversion Value $110,500,000 $130,000,000 $149,500,000 $171,925,000
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Exchange Percent 48.14% 48.14% 48.14% 48.14%
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Conversion Percent 51.86% 51.86% 51.86% 51.86%
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
Exchange Ratio 2.1416 2.5196 2.8975 3.3321
---------------------------------------------------------------------
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Page 3
<PAGE> 162
EXHIBIT 12
Stub Period - No Foundation
<TABLE>
<CAPTION>
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------
Conversion Proceeds
- --------------------------------
Total Shares Offered 11,050,000 13,000,000 14,950,000 17,192,500
Conversion Shares Offered 5,730,659 6,741,777 7,753,143 8,916,176
Price Per Share $ 10 $ 10 $ 10 $ 10
---------------------------------------------------------------------
Gross Proceeds $ 57,307 $ 67,418 $ 77,531 $ 89,162
Plus: Value issued to Foundation (9) -- -- -- --
---------------------------------------------------------------------
Pro Forma Market Capitalization 57,307 67,418 77,531 89,162
=====================================================================
Gross Proceeds 57,307 67,418 77,531 89,162
Less: Est. Conversion Expenses 1,456 1,526 1,596 1,676
Less: Cash issued to Foundation -- -- -- --
---------------------------------------------------------------------
Net Proceeds $ 55,851 $ 65,892 $ 75,935 $ 87,486
=====================================================================
- -------------------------------
Estimated Income from Proceeds
- -------------------------------
Net Conversion Proceeds $ 55,851 $ 65,892 $ 75,935 $ 87,486
Less: ESOP Adjustment (3) 4,585 5,393 6,202 7,133
Less: MRP Adjustment (3) 2,292 2,697 3,101 3,566
---------------------------------------------------------------------
Net Proceeds Reinvested $ 48,974 $ 57,802 $ 66,632 $ 76,787
Estimated Incremental Rate of Return 3.37% 3.37% 3.37% 3.37%
---------------------------------------------------------------------
Estimated Incremental Return $ 825 $ 974 $ 1,123 $ 1,294
Less: Cost of ESOP (4) -- -- -- --
Less: Amortization of ESOP (7) 95 112 129 148
Less: MRP Adjustment (7) 143 168 193 222
---------------------------------------------------------------------
Pro-forma Net Income 587 694 801 924
Earnings Before Conversion 2,511 2,511 2,511 2,511
---------------------------------------------------------------------
Earnings Excluding Adjustment 3,098 3,205 3,312 3,435
Earnings Adjustment (6) -- -- -- --
---------------------------------------------------------------------
Earnings After Conversion $ 3,098 $ 3,205 $ 3,312 $ 3,435
---------------------------------------------------------------------
</TABLE>
Page 4
<PAGE> 163
EXHIBIT 12
Stub Period - No Foundation
<TABLE>
<CAPTION>
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -------------------------------
Pro-forma Net Worth
- -------------------------------
Net Worth at June 30, 1998 $ 83,078 $ 83,078 $ 83,078 $ 83,078
Net Conversion Proceeds 55,851 65,892 75,935 87,486
Plus: MHC Adjustment (7) 200 200 200 200
Plus: After tax Foundation Contribution -- -- -- --
Less: ESOP Adjustment (1) (4,585) (5,393) (6,202) (7,133)
Less: MRP Adjustment (2) (2,292) (2,697) (3,101) (3,566)
---------------------------------------------------------------------
Pro-forma Net Worth $ 132,252 $ 141,080 $ 149,910 $ 160,065
- -------------------------------
Pro-forma Tangible Net Worth
- -------------------------------
Pro-forma Net Worth $ 132,252 $ 141,080 $ 149,910 $ 160,065
Less: Intangible (5) -- -- -- --
---------------------------------------------------------------------
Pro-forma Tangible Net Worth $ 132,252 $ 141,080 $ 149,910 $ 160,065
- -------------------------------
Pro-forma Assets
- -------------------------------
Total Assets at June 30, 1998 $ 765,488 $ 765,488 $ 765,488 $ 765,488
Net Conversion Proceeds 55,851 65,892 75,935 87,486
Plus: MHC Adjustment (7) 200 200 200 200
Plus: Tax Benefit of Foundation -- -- -- --
Less: ESOP Adjustment (1) (4,585) (5,393) (6,202) (7,133)
Less: MRP Adjustment (2) (2,292) (2,697) (3,101) (3,566)
---------------------------------------------------------------------
Pro-forma Assets Excluding Adjustment 814,662 823,490 832,320 842,475
Plus: Adjustment (6) -- -- -- --
---------------------------------------------------------------------
Pro-forma Total Assets $ 814,662 $ 823,490 $ 832,320 $ 842,475
---------------------------------------------------------------------
- -------------------------------
Stockholder's Equity Per Share
- -------------------------------
Net Worth at June 30, 1998 $ 7.52 $ 6.39 $ 5.56 $ 4.83
Estimated Net Proceeds 5.05 5.07 5.08 5.09
Plus: MHC Adjustment 0.02 0.02 0.01 0.01
Plus: Foundation Contribution -- -- -- --
Less: ESOP Stock (0.41) (0.41) (0.41) (0.41)
Less: MRP Stock (0.21) (0.21) (0.21) (0.21)
---------------------------------------------------------------------
Pro-forma Net Worth Per Share 11.97 10.86 10.03 9.31
Less: Intangible -- -- -- --
---------------------------------------------------------------------
Pro-forma Tangible Net Worth Per Share $ 11.97 $ 10.86 $ 10.03 $ 9.31
---------------------------------------------------------------------
</TABLE>
Page 5
<PAGE> 164
EXHIBIT 12
Stub Period - No Foundation
<TABLE>
<CAPTION>
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------
Net Earnings Per Share
- --------------------------------
Historical Earnings Per Share (8) $ 0.24 $ 0.20 $ 0.18 $ 0.15
Incremental return Per Share (8) 0.08 0.08 0.08 0.08
ESOP Adjustment Per Share (8) (0.01) (0.01) (0.01) (0.01)
MRP Adjustment Per Share (8) (0.01) (0.01) (0.01) (0.01)
Normalizing Adjustment Per Share -- -- -- --
---------------------------------------------------------------------
Proforma Earnings Per Share (8) $ 0.30 $ 0.26 $ 0.24 $ 0.21
- --------------------------------
Shares Utilized
- --------------------------------
Shares Utilized 10,453 12,299 14,144 16,266
- --------------------------------
Pro-forma Ratios
- --------------------------------
Price/EPS without Adjustment 16.67 19.23 20.83 23.81
Price/EPS with Adjustment 16.67 19.23 20.83 23.81
Price/Book Value per Share 83.54% 92.08% 99.70% 107.41%
Price/Tangible Book Value 83.54% 92.08% 99.70% 107.41%
Market Value/Assets 13.56% 15.79% 17.96% 20.41%
---------------------------------------------------------------------
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized
over 15 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized
over 5 years.
(3) Consists of ESOP and MRP amortization.
(4) The ESOP loan is from the Holding Company and therefore, there are no
costs.
(5) Not applicable.
(6) Not applicable.
(7) ESOP and MRP are amortized over 15 and 5 years respectively, and tax
impacted at 38%.
(8) All EPS computations are done in accordance with SOP 93-6.
(9) Not applicable.
Page 6
<PAGE> 165
EXHIBIT 12
Stub Period - No Foundation
<TABLE>
<S> <C> <C> <C> <C>
- --------------------
Expense Calculations
- --------------------
Total Shares Offered 5,731 6,742 7,753 8,916
Price Per Share $ 10 $ 10 $ 10 $ 10
------------------------------------------------------------------------
Gross Proceeds $ 57,307 $ 67,418 $ 77,531 $ 89,162
Estimated Insider Purchases (216) (216) (216) (216)
ESOP Purchases (4,585) (5,393) (6,202) (7,133)
------------------------------------------------------------------------
Proceeds to Base Fee On $ 52,506 $ 61,809 $ 71,113 $ 81,813
Underwriters Percentage 0.75% 0.75% 0.75% 0.75%
------------------------------------------------------------------------
Underwriters Fee $ 394 $ 464 $ 534 $ 614
Advisory Fee -- -- -- --
------------------------------------------------------------------------
Total Underwriters Fee 394 464 534 614
All Other Expenses 1,062 1,062 1,062 1,062
------------------------------------------------------------------------
Total Expense $ 1,456 $ 1,526 $ 1,596 $ 1,676
- -------------------
Shares Calculations
- -------------------
Shares Outstanding 11,050 13,000 14,950 17,193
Less: New ESOP Adjustment 459 539 620 713
Less: Old ESOP Adjustment (1) 182 214 246 283
Plus: New SOP 93-6 ESOP Shares (2) 15 18 21 24
Plus: Old SOP 93-6 ESOP Shares (2) 29 34 39 45
------------------------------------------------------------------------
Shares for all EPS Calculations 10,453 12,299 14,144 16,266
========================================================================
10,454,240 12,299,114 14,143,977 16,265,570
<CAPTION>
POST FOUNDATION
------------------------------------------------------------------------
Appraised Value
------------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Issued and Exchanged 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Shares Issued to Foundation -- -- -- --
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Implied Exhange Ratio 2.1416 2.5196 2.8975 3.3321
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
------------------------------------------------------------------------
</TABLE>
Page 7
<PAGE> 166
EXHIBIT 12
Stub Period - No Foundation
<TABLE>
<CAPTION>
- ------------
MRP Dilution
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Outstanding 11,050,000 13,000,000 14,950,000 17,192,500
Less: New ESOP Adjustment 458,453 539,342 620,251 713,294
Less: Old ESOP Adjustment 182,000 214,000 246,000 283,000
Plus: New MRP issued (1) 442,000 520,000 598,000 687,700
Plus: New SOP 93-6 ESOP Shares (2) 15,282 17,978 20,675 23,776
Plus: Old SOP 93-6 ESOP Shares 29,000 34,000 39,000 45,000
(2)
Shares for all EPS Calculations 10,895,829 12,818,636 14,741,424 16,952,682
EPS $ 0.29 $ 0.25 $ 0.23 $ 0.21
BV/Share $ 11.51 $ 10.43 $ 9.64 $ 8.95
Voting Dilution 4.24% 4.23% 4.22% 4.22%
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------
Option Dilution
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Outstanding 11,050,000 13,000,000 14,950,000 17,192,500
Less: New ESOP Adjustment 458,453 539,342 620,251 713,294
Less: Old ESOP Adjustment 182,000 214,000 246,000 283,000
Plus: Options(1) 573,066 674,178 775,314 891,618
Plus: New SOP 93-6 ESOP Shares(2) 15,282 17,978 20,675 23,776
Plus: Old SOP 93-6 ESOP Shares 29,000 34,000 39,000 45,000
(2)
Shares for all EPS Calculations 11,026,895 12,972,814 14,918,738 17,156,600
EPS $ 0.28 $ 0.25 $ 0.22 $ 0.20
BV/Share $ 11.87 $ 10.81 $ 10.03 $ 9.34
Voting Dilution 5.49% 5.48% 5.48% 5.48%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 8
<PAGE> 167
EXHIBIT 13
Offering Circular - No Foundation
COMMUNITY SAVINGS BANKSHARES, INC.
PRO-FORMA ANALYSIS SHEET - TWELVE MONTHS ENDED
DECEMBER 31, 1997
INCLUDES SOP 93-6
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Bank Comparables State National
------------------------------------------------------------------------------------------
Mean Median Mean Median Mean Median
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Min 16.13
Price-Earnings Ratio P/E Mid 18.52 17.47 17.76 26.22 24.05 20.85 17.73
Max 20.41
Smax 22.73
Min 84.75%
Price-to-Book Ratio P/B Mid 93.28% 148.75% 155.30% 173.46% 165.33% 150.25% 133.33%
Max 100.91%
Smax 108.58%
Min 84.75%
Price-to-Tangible Book Ratio P/TB Mid 93.28% 154.38% 157.44% 183.92% 172.53% 156.31% 136.35%
Max 100.91%
Smax 108.58%
Min 14.36%
Price-to-Assets Ratio P/A Mid 16.71% 14.95% 15.62% 16.73% 12.08% 18.10% 16.71%
Max 19.00%
Smax 21.57%
</TABLE>
Page 1
<PAGE> 168
EXHIBIT 13
Offering Circular - No Foundation
<TABLE>
<CAPTION>
Valuation Parameters
<S> <C> <C>
- --------------------------------------------------------------------------------------
Prior Twelve Mos. Earning Base Y
Period Ended December 31, 1997 $ 5,356 (1)
- --------------------------------------------------------------------------------------
Pre-Conversion Book Value B
As of December 31, 1997 $ 81,259
- --------------------------------------------------------------------------------------
Pre-Conversion Assets A
As of December 31, 1997 $720,133
- --------------------------------------------------------------------------------------
Return on Money R 3.37%(2)
- --------------------------------------------------------------------------------------
Conversion Expenses $ 1,526
X 1.17%(3)
- --------------------------------------------------------------------------------------
Proceeds Not Invested $ 8,090 (4)
- --------------------------------------------------------------------------------------
Estimated ESOP Borrowings $ 5,393
ESOP Purchases E 8.00%(5)
Cost of ESOP Borrowings $ 360 (5)
Cost of ESOP Borrowings S 0.00%(5)
Amort of ESOP Borrowings T 15 Years
- --------------------------------------------------------------------------------------
Amort of MRP Amount N 5 Years
Estimated MRP Amount $ 2,697 (6)
MRP Purchases M 4.00%
MRP Expense $ 539
- ---------------------------------------------------------------------------------------
Foundation Amount $ -- (7)
Foundation Amount F 0.00% 0.00%
Foundation Opportunity Cost $ --
Tax Benefit Z $ -- (8)
- ---------------------------------------------------------------------------------------
Tax Rate TAX 37.65%
- ---------------------------------------------------------------------------------------
Percentage Sold PCT 51.86%
- ---------------------------------------------------------------------------------------
Amount to be issued to Public $ 67,418 (9)
- ---------------------------------------------------------------------------------------
Earnings Multiple (1 if stub period, 0 if full twelve months) 12 0
- ---------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) Net income for the twelve months ended December 31, 1997.
(2) Net Return assumes a reinvestment rate of 5.41 percent (the 1 year Treasury
at June 30, 1998), and a tax rate of 38%.
(3) Conversion expenses reflect estimated expenses as presented in the offering
document.
(4) Includes Stock from ESOP and MRP.
(5) Assumes ESOP is amortized straight line over 15 years.
(6) Assumes MRP is amortized straight line over 5 years.
(7) Not applicable.
(8) Not Applicable.
(9) The amount to be offered to public.
Page 2
<PAGE> 169
EXHIBIT 13
Offering Circular - No Foundation
PRO FORMA CALCULATION
<TABLE>
<S> <C>
Calculation of Estimated Value (V) at Midpoint Value
3. V= P/E*Y = $130,000,000
-----
1-P/E*PCT*((1-X-E-M-F)*R-(1-TAX)*E/T-(1-TAX)*M/N)
2. V= P/B*(B+Z) = $130,000,000
---------
1-P/B*PCT*(1-X-E-M-F)
1. V= P/A*A = $130,000,000
-----
1-P/A*PCT*(1-X-E-M-F)
</TABLE>
The appraisal was performed on a market basis and not on the above formulas.
<TABLE>
<CAPTION>
Total Shares Price Total
Conclusion Shares Per Share Value
- ---------- ------ --------- -----
<S> <C> <C> <C>
Appraised Value - Midpoint 13,000,000 $ 10 $ 130,000,000
Range:
- Minimum 11,050,000 $ 10 110,500,000
- Maximum 14,950,000 10 149,500,000
- Super Maximum 17,192,500 10 171,925,000
</TABLE>
<TABLE>
<CAPTION>
PRE FOUNDATION
------------------------------------------------------------------
Appraised Value
------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum*
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Full Conversion Value $ 110,500,000 $ 130,000,000 $149,500,000 $171,925,000
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Exchange Percent 48.14% 48.14% 48.14% 48.14%
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Conversion Percent 51.86% 51.86% 51.86% 51.86%
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
Exchange Ratio 2.1416 2.5196 2.8975 3.3321
-------------------------------------------------------------------
</TABLE>
* SuperMaximum is an overallotment option that is 15% above the maximum amount.
Page 3
<PAGE> 170
EXHIBIT 13
Offering Circular - No Foundation
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ----------------------------------- ----------------------------------------------------------------------------
Conversion Proceeds Minimum Midpoint Maximum SuperMax
- ----------------------------------- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Shares Offered 11,050,000 3,000,000 14,950,000 17,192,500
Conversion Shares Offered 5,730,659 6,741,777 7,753,143 8,916,176
Price Per Share $ 10 $ 10 $ 10 $ 10
----------------------------------------------------------------------------
Gross Proceeds $ 57,307 $ 67,418 $ 77,531 $ 89,162
Plus: Value issued to Foundation (9) -- -- -- --
----------------------------------------------------------------------------
Pro Forma Market Capitalization 57,307 67,418 77,531 89,162
============================================================================
Gross Proceeds 57,307 67,418 77,531 89,162
Less: Est. Conversion Expenses 1,456 1,526 1,596 1,676
Less: Cash issued to Foundation -- -- -- --
----------------------------------------------------------------------------
Net Proceeds $ 55,851 $ 65,892 $ 75,935 $ 87,486
============================================================================
- -----------------------------------
Estimated Income from Proceeds
- -----------------------------------
Net Conversion Proceeds $ 55,851 $ 65,892 $ 75,935 $ 87,486
Less: ESOP Adjustment (3) 4,585 5,393 6,202 7,133
Less: MRP Adjustment (3) 2,292 2,697 3,101 3,566
----------------------------------------------------------------------------
Net Proceeds Reinvested $ 48,974 $ 57,802 $ 66,632 $ 76,787
Estimated Incremental Rate of Return 3.37% 3.37% 3.37% 3.37%
----------------------------------------------------------------------------
Estimated Incremental Return $ 1,650 $ 1,948 $ 2,245 $ 2,588
Less: Cost of ESOP (4) -- -- -- --
Less: Amortization of ESOP (7) 191 224 258 296
Less: MRP Adjustment (7) 286 336 387 445
----------------------------------------------------------------------------
Pro-forma Net Income 1,173 1,388 1,600 1,847
Earnings Before Conversion 5,356 5,356 5,356 5,356
----------------------------------------------------------------------------
Earnings Excluding Adjustment 6,529 6,744 6,956 7,203
Earnings Adjustment (6) -- -- -- --
----------------------------------------------------------------------------
Earnings After Conversion $ 6,529 $ 6,744 $ 6,956 $ 7,203
----------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE> 171
EXHIBIT 13
Offering Circular - No Foundation
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
- ----------------------------------- ---------------------------------------------------------------------
Pro-forma Net Worth Minimum Midpoint Maximum SuperMax
- ----------------------------------- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Worth at December 31, 1997 $ 81,259 $ 81,259 $ 81,259 $ 81,259
Net Conversion Proceeds 55,851 65,892 75,935 87,486
Plus: MHC Adjustment (7) 200 200 200 200
Plus: After tax Foundation Contribution -- - -- --
Less: ESOP Adjustment (1) (4,585) (5,393) (6,202) (7,133)
Less: MRP Adjustment (2) (2,292) (2,697) (3,101) (3,566)
---------------------------------------------------------------------
Pro-forma Net Worth $ 130,433 $ 139,261 $ 148,091 $ 158,246
- -----------------------------------
Pro-forma Tangible Net Worth
- -----------------------------------
Pro-forma Net Worth $ 130,433 $ 139,261 $ 148,091 $ 158,246
Less: Intangible (5) -- -- -- --
---------------------------------------------------------------------
Pro-forma Tangible Net Worth $ 130,433 $ 139,261 $ 148,091 $ 158,246
- -----------------------------------
Pro-forma Assets
- -----------------------------------
Total Assets at December 31, 1997 $ 720,133 $ 720,133 $ 720,133 $ 720,133
Net Conversion Proceeds 55,851 65,892 75,935 87,486
Plus: MHC Adjustment (7) 200 200 200 200
Plus: Tax Benefit of Foundation -- -- -- --
Less: ESOP Adjustment (1) (4,585) (5,393) (6,202) (7,133)
Less: MRP Adjustment (2) (2,292) (2,697) (3,101) (3,566)
---------------------------------------------------------------------
Pro-forma Assets Excluding Adjustment 769,307 778,135 786,965 797,120
Plus: Adjustment (6) -- -- -- --
---------------------------------------------------------------------
Pro-forma Total Assets $ 769,307 $ 778,135 $ 786,965 $ 797,120
---------------------------------------------------------------------
- -----------------------------------
Stockholder's Equity Per Share
- -----------------------------------
Net Worth at December 31, 1997 $ 7.35 $ 6.25 $ 5.44 $ 4.73
Estimated Net Proceeds 5.05 5.07 5.08 5.09
Plus: MHC Adjustment 0.02 0.02 0.01 0.01
Plus: Foundation Contribution -- -- -- --
Less: ESOP Stock (0.41) (0.41) (0.41) (0.41)
Less: MRP Stock (0.21) (0.21) (0.21) (0.21)
---------------------------------------------------------------------
Pro-forma Net Worth Per Share 11.80 10.72 9.91 9.21
Less: Intangible -- -- -- --
---------------------------------------------------------------------
Pro-forma Tangible Net Worth Per Share $ 11.80 $ 10.72 $ 9.91 $ 9.21
---------------------------------------------------------------------
</TABLE>
<PAGE> 172
EXHIBIT 13
Offering Circular - No Foundation
PROFORMA EFFECT OF CONVERSION PROCEEDS
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Minimum Midpoint Maximum SuperMax
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------
Net Earnings Per Share
- ------------------------------
Historical Earnings Per Share (8) $ 0.51 $ 0.43 $ 0.38 $ 0.33
Incremental return Per Share (8) 0.16 0.16 0.16 0.16
ESOP Adjustment Per Share (8) (0.02) (0.02) (0.02) (0.02)
MRP Adjustment Per Share (8) (0.03) (0.03) (0.03) (0.03)
Normalizing Adjustment Per Share -- -- -- --
------------------------------------------------------------------------
Proforma Earnings Per Share (8) $ 0.62 $ 0.54 $ 0.49 $ 0.44
- -----------------------------
Shares Utilized
- -----------------------------
Shares Utilized 10,469 12,318 14,165 16,291
- -----------------------------
Pro-forma Ratios
- -----------------------------
Price/EPS without Adjustment 16.13 18.52 20.41 22.73
Price/EPS with Adjustment 16.13 18.52 20.41 22.73
Price/Book Value per Share 84.75% 93.28% 100.91% 108.58%
Price/Tangible Book Value 84.75% 93.28% 100.91% 108.58%
Market Value/Assets 14.36% 16.71% 19.00% 21.57%
------------------------------------------------------------------------
</TABLE>
(1) ESOP Borrowings are deducted from net worth and assets, and amortized
over 15 years.
(2) MRP Borrowings are omitted from net worth and assets, and amortized
over 5 years.
(3) Consists of ESOP and MRP amortization.
(4) The ESOP loan is from the Holding Company and therefore, there are no
costs.
(5) Not applicable.
(6) Not applicable.
(7) ESOP and MRP are amortized over 15 and 5 years respectively, and tax
impacted at 38%.
(8) All EPS computations are done in accordance with SOP 93-6.
(9) Not applicable.
Page 6
<PAGE> 173
EXHIBIT 13
Offering Circular - No Foundation
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------
Expense Calculations
- -----------------------------
Total Shares Offered 5,731 6,742 7,753 8,916
Price Per Share $ 10 $ 10 $ 10 $ 10
------------------------------------------------------------------------
Gross Proceeds $ 57,307 $ 67,418 $ 77,531 $ 89,162
Estimated Insider Purchases (216) (216) (216) (216)
ESOP Purchases (4,585) (5,393) (6,202) (7,133)
------------------------------------------------------------------------
Proceeds to Base Fee On $ 52,506 $ 61,809 $ 71,113 $ 81,813
Underwriters Percentage 0.75% 0.75% 0.75% 0.75%
------------------------------------------------------------------------
Underwriters Fee $ 394 $ 464 $ 534 $ 614
Advisory Fee -- -- -- --
------------------------------------------------------------------------
Total Underwriters Fee 394 464 534 614
All Other Expenses 1,062 1,062 1,062 1,062
------------------------------------------------------------------------
Total Expense $ 1,456 $ 1,526 $ 1,596 $ 1,676
- -----------------------------
Shares Calculations
- -----------------------------
Shares Outstanding 11,050 13,000 14,950 17,193
Less: New ESOP Adjustment 459 539 620 713
Less: Old ESOP Adjustment (1) 211 248 285 328
Plus: New SOP 93-6 ESOP Shares (2) 31 36 41 48
Plus: Old SOP 93-6 ESOP Shares (2) 58 69 79 91
------------------------------------------------------------------------
Shares for all EPS Calculations 10,469 12,318 14,165 16,291
========================================================================
10,469,522 12,317,092 14,164,652 16,289,347
<CAPTION>
POST FOUNDATION
------------------------------------------------------------------------
Appraised Value
------------------------------------------------------------------------
Conclusion Minimum Midpoint Maximum SuperMaximum
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Issued and Exchanged 11,050,000 13,000,000 14,950,000 17,192,500
Price per Share $ 10 $ 10 $ 10 $ 10
Shares Issued to Foundation -- -- -- --
Total Shares 11,050,000 13,000,000 14,950,000 17,192,500
Exchange Shares 5,319,341 6,258,223 7,196,857 8,276,324
Conversion Shares 5,730,659 6,741,777 7,753,143 8,916,176
Implied Exhange Ratio 2.1416 2.5196 2.8975 3.3321
Gross Proceeds $ 57,306,590 $ 67,417,770 $ 77,531,430 $ 89,161,760
Exchange Value $ 53,193,410 $ 62,582,230 $ 71,968,570 $ 82,763,240
-------------------------------------------------------------------------
</TABLE>
Page 7
<PAGE> 174
EXHIBIT 13
Offering Circular - No Foundation
<TABLE>
<CAPTION>
MRP Dilution
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Outstanding 11,050,000 13,000,000 14,950,000 17,192,500
Less: New ESOP Adjustment 458,453 539,342 620,251 713,294
Less: Old ESOP Adjustment 211,000 248,000 285,000 328,000
Plus: New MRP issued (1) 442,000 520,000 598,000 687,700
Plus: New SOP 93-6 ESOP Shares (2) 30,564 35,956 41,350 47,553
Plus: Old SOP 93-6 ESOP Shares 58,000 69,000 79,000 91,000
(2)
Shares for all EPS Calculations 10,911,111 12,837,614 14,763,099 16,977,459
EPS $ 0.61 $ 0.53 $ 0.48 $ 0.43
BV/Share $ 11.35 $ 10.30 $ 9.52 $ 8.85
Voting Dilution 4.22% 4.22% 4.22% 4.22%
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
Option Dilution
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Outstanding 11,050,000 13,000,000 14,950,000 17,192,500
Less: New ESOP Adjustment 458,453 539,342 620,251 713,294
Less: Old ESOP Adjustment 211,000 248,000 285,000 328,000
Plus: Options (1) 573,066 674,178 775,314 891,618
Plus: New SOP 93-6 ESOP Shares (2) 30,564 35,956 41,350 47,553
Plus: Old SOP 93-6 ESOP Shares 58,000 69,000 79,000 91,000
(2)
Shares for all EPS Calculations 11,042,177 12,991,792 14,940,413 17,181,377
EPS $ 0.59 $ 0.52 $ 0.47 $ 0.42
BV/Share $ 11.71 $ 10.68 $ 9.91 $ 9.24
Voting Dilution 5.47% 5.47% 5.47% 5.47%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 8
