UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from__________________to__________________
Commission file number: 0-25191
Willow Grove Bancorp, Inc.
(Exact name of registrant as specified in its charter)
United States 23-2986192
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Welsh and Norristown Roads, Maple Glen, Pennsylvania 19002
(Address of principal executive offices)
(215) 646-5405
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES |X| NO |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
The Registrant had 5,143,487 shares of Common Stock issued and outstanding as of
May 11, 2000.
1
<PAGE>
WILLOW GROVE BANCORP, INC.
INDEX
Page No.
--------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)...................... 3
Consolidated Statements of Financial Condition at
March 31, 2000 and June 30, 1999...................... 3
Consolidated Statements of Operations - For the
Three and Nine months Ended March 31, 2000 and 1999... 4
Consolidated Statements of Cash Flows - For the Nine
Months Ended March 31, 2000 and 1999.................. 5
Notes to Consolidated Financial Statements............ 6
Item 2. Management's Discussion and Analysis.................. 10
Item 3. Quantitative and Qualitative Disclosures about
Market Risk ......................................... 17
PART II OTHER INFORMATION
Item 1. Legal Proceedings..................................... 18
Item 2. Changes in Securities and Use of Proceeds............. 18
Item 3. Defaults upon Senior Securities....................... 18
Item 4. Submission of Matters to a Vote of Security Holders... 18
Item 5. Other Information..................................... 18
Item 6 Exhibits and Reports on Form 8-K...................... 18
2
<PAGE>
Willow Grove Bancorp, Inc.
Consolidated Statements of Financial Condition
(Unaudited)
(Dollars in thousands, except share data)
<TABLE>
<CAPTION>
Assets March 31, 2000 June 30, 1999
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents:
Cash on hand and non-interest bearing deposits $ 3,248 $ 3,447
Interest-bearing deposits 18,511 1,442
---------------------------
Total cash and cash equivalents 21,759 4,889
Securities available for sale (amortized cost of $78,930 and $82,296, respectively) 74,957 80,055
Loans (net of allowance for loan losses of $3,905 and $3,138, respectively) 452,659 374,584
Accrued income receivable 2,876 2,519
Property and equipment, net 6,046 5,135
Intangible assets 1,642 1,950
Other assets 3,625 2,907
- ------------------------------------------------------------------------------------------------------------------
Total assets $ 563,564 $ 472,039
- ------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Deposits $ 444,584 $ 390,681
Federal Home Loan Bank (FHLB) advances 51,651 14,986
Advance payments from borrowers for taxes 3,880 4,403
Accrued interest payable 966 706
Other liabilities 2,882 2,821
---------------------------
Total liabilities 503,963 413,597
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value; (25,000,000
authorized; 5,143,487 issued and
outstanding as of March 31, 2000 and June 30, 1999) 51 51
Additional paid-in capital 22,278 22,295
Retained earnings 42,270 39,211
Unallocated common stock held by (1,643) (1,703)
employee stock ownership plan (ESOP)
Unamortized common stock held by recognition (852) --
and retention plan trust (RRP)
Accumulated other comprehensive income (loss) (2,503) (1,412)
---------------------------
Total stockholders' equity 59,601 58,442
- ------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 563,564 $ 472,039
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to the consolidated financial statements
3
<PAGE>
Willow Grove Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands, except per share data)
For the Three Months Ended For the Nine Months Ended
March 31 March 31
--------------------------- --------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------- --------------------------
Interest and dividend income:
Loans $ 8,783 $6,776 $24,613 $20,221
Securities, primarily taxable 1,275 1,294 3,678 3,208
- ------------------------------------------------------------------------------------------------------------
Total interest income $10,058 $8,070 $28,291 $23,429
- ------------------------------------------------------------------------------------------------------------
Interest expense:
Deposits $ 4,217 $3,777 $12,240 $11,472
Borrowings 861 177 1,698 572
Advance payment from borrowers for taxes 6 7 15 19
- ------------------------------------------------------------------------------------------------------------
Total interest expense $ 5,084 $3,961 $13,953 $12,063
- ------------------------------------------------------------------------------------------------------------
Net interest income 4,974 4,109 14,338 11,366
Provision for loan losses 195 121 686 351
- ------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses $ 4,779 $3,988 $13,652 $11,015
- ------------------------------------------------------------------------------------------------------------
Non-interest income:
Service charges and fees $ 269 $ 206 $ 783 $ 633
Gain on sale of loans available for sale -- -- -- 11
Loan servicing income, net 10 8 32 150
- ------------------------------------------------------------------------------------------------------------
Total non-interest income $ 279 $ 214 $ 815 $ 794
- ------------------------------------------------------------------------------------------------------------
Non-interest expense:
Compensation and employee benefits $ 1,822 $1,384 $ 5,091 $ 3,948
Occupancy 256 143 735 424
Furniture and equipment 133 84 273 226
Federal insurance premium 20 52 132 151
Amortization of intangible assets 103 103 308 308
Data processing 133 113 380 313
Advertising 124 109 292 299
Foundation expense -- -- -- 896
Community enrichment 38 38 113 138
Other expense 492 465 1,466 1,185
- ------------------------------------------------------------------------------------------------------------
Total non-interest expense $ 3,121 $2,491 $ 8,790 $ 7,888
- ------------------------------------------------------------------------------------------------------------
Income before income taxes $ 1,937 $1,711 $ 5,677 $ 3,921
Income taxes 755 578 2,072 1,416
- ------------------------------------------------------------------------------------------------------------
Net Income $ 1,182 $1,133 $ 3,605 $ 2,505
============================================================================================================
Earnings per share: (1)
Basic $ 0.24 $ 0.23 $ 0.73 $ 0.23
Diluted $ 0.24 $ 0.23 $ 0.72 $ 0.23
</TABLE>
(1): Earnings per share is presented from January 1, 1999 to March 31, 1999.
Earnings per share presentation for periods prior to January 1, 1999 are not
applicable.
See accompanying notes to the consolidated financial statements
4
<PAGE>
Willow Grove Bancorp, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands)
For the Nine Months Ended March 31,
----------------------------------------
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash flows from operating activities:
Net income $ 3,605 $ 2,505
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 402 294
Amortization of premium and accretion of discount, net 8 147
Amortization of intangible assets 308 308
Foundation expense -- 896
Provision for loan losses 686 351
Gain on sale of loans available for sale -- (11)
Increase(decrease) in deferred loan fees 102 (240)
Increase in accrued income receivable (357) (299)
(Increase)decrease in other assets (76) 120
Increase in accrued interest payable 260 131
Deferred income tax benefit -- (304)
Increase(decrease) in other liabilities 61 (147)
Expense related to ESOP & RRP shares 120 46
Originations and purchases of loans available for sale -- (2,865)
Proceeds from sale of loans available for sale -- 15,028
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 5,119 $ 15,960
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Net increase in loans (79,144) (29,475)
Purchase of securities available for sale (6,581) (76,618)
Proceeds from sales and calls of securities available for sale 6,506 --
Principal repayments of securities available for sale 3,433 31,100
Proceeds from sale of other real estate owned 281 10,143
Purchase of property and equipment, net (1,313) (526)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities $ (76,818) $ (65,376)
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase in deposits 53,903 34,655
Net increase (decrease) in FHLB advances with
original maturity less than 90 days 11,000 (5,000)
Increase in FHLB advances with original maturity greater than 90 days 44,000 --
Repayment of FHLB advances with original maturity greater than 90 days (18,335) (4,000)
Net decrease in advance payments from borrowers for taxes (523) (791)
Dividends paid (547) --
Purchase of RRP shares (929) --
Proceeds from stock issuance, net -- 19,656
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities $ 88,569 $ 44,520
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents $ 16,870 $ (4,896)
Cash and cash equivalents:
Beginning of period 4,889 18,291
- ------------------------------------------------------------------------------------------------------------------------------
End of period $ 21,759 $ 13,395
- ------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash and cash flow information:
Interest paid 13,693 11,932
Income taxes paid 2,465 1,755
Non-cash items:
Change in unrealized gain (loss) on securities available for sale (1,091) (411)
(net of taxes of $642 and $227 in 2000 and 1999, respectively)
Loans transferred to other real estate owned 281 --
</TABLE>
See accompanying notes to the consolidated financial statements
5
<PAGE>
WILLOW GROVE BANCORP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Financial Statement Presentation
The accompanying consolidated financial statements were prepared in
accordance with instructions to Form 10-Q, and therefore, do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. However, all normal, recurring adjustments
which, in the opinion of management, are necessary for a fair presentation of
these financial statements, have been included. These financial statements
should be read in conjunction with the audited financial statements and the
notes thereto for the period ended June 30, 1999. The results for the interim
periods presented are not necessarily indicative of the results that may be
expected for the year ended June 30, 2000.
2. Summary of Significant Accounting Policies
On December 23, 1998, Willow Grove Bancorp, Inc. (the "Company") completed
the reorganization of Willow Grove Bank, a federally chartered mutual savings
bank ("Willow Grove" or the "Bank"), into the federal mutual holding company
form of ownership, whereby the Bank converted into a federally chartered stock
savings bank as a wholly owned subsidiary of the Company, and the Company became
a majority-owned subsidiary of Willow Grove Mutual Holding Company, a federally
chartered mutual holding company (the "MHC") (collectively, the
"Reorganization"). In connection with the Reorganization, the Company sold
2,240,878 shares of Company common stock, par value $0.01 per share ("Company
Common Stock") at $10.00 per share, which net of issuance costs generated
proceeds of $21.4 million including shares issued to the employee stock
ownership plan ("ESOP"). The Company also issued 2,812,974 shares of Company
Common Stock to the MHC. As an integral part of the Reorganization and in
furtherance of Willow Grove's commitment to the communities that it serves,
Willow Grove and the Company established a charitable foundation known as the
Willow Grove Foundation (the "Foundation") and contributed 89,635 shares to the
Foundation during fiscal 1999. The Foundation provides funding to support
charitable causes and community development activities which complements Willow
Grove's existing community activities. In addition, the Company established an
ESOP for the employees of the Company and the Bank which became effective with
the completion of the Reorganization.
Additional information regarding the Reorganization is included in the
Company's Registration Statement on Form S-1 filed on September 18, 1998, as
amended.
3. Earnings Per Share
Earnings per share, basic and diluted, were $0.24 and $0.23 for the three
months ended March 31, 2000 and March 31, 1999, respectively. Earnings per
share, basic and diluted, were $0.73 and $0.72, respectively, for the nine
months ended March 31, 2000. Due to the Reorganization and formation of the
Company on December 23, 1998, earnings per share for periods prior to January 1,
1999 are not applicable.
The following is a reconciliation of the numerators and denominators of
the basic and diluted earnings per share calculations.
6
<PAGE>
<TABLE>
<CAPTION>
Three Months Three Months
Ended March 31, Ended March 31,
2000 1999
---------------- -------------- ----------------------------------
(Dollars in thousands, except share data)
---------------- -------------- --------------- ----------------
Basic Diluted Basic Diluted
---------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net Income $ 1,182 $ 1,182 $ 1,133 $ 1,133
Dividends on unvested common stock awards (8) (8) -- --
--------------- ------------- -------------- ---------------
Adjusted net income used in EPS calculations $ 1,174 $ 1,174 $ 1,133 $ 1,133
Weighted average shares outstanding 4,888,028 4,888,028 4,966,458 4,966,458
Effect of dilutive securities:
Options -- -- -- --
Unvested common stock awards -- 89,635 -- --
--------------- ------------- -------------- ---------------
Adjusted weighted average shares used in
EPS computation 4,888,028 4,977,663 4,966,458 4,966,458
=============== ============= ============== ===============
Earnings per share $0.24 $0.24 $0.23 $0.23
</TABLE>
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended March 31, Ended March 31,
2000 1999
----------------------------------- ----------------------------------
(Dollars in thousands, except share data)
---------------- -------------- --------------- ----------------
Basic Diluted Basic Diluted
---------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net Income $ 3,605 $ 1,182 $ 1,133 $ 1,133
Dividends on unvested common stock awards (16) (8) -- --
--------------- ------------- -------------- ---------------
Adjusted net income used in EPS calculations $ 3,589 $ 1,174 $ 1,133 $ 1,133
Weighted average shares outstanding 4,905,939 4,905,939 4,966,458 4,966,458
Effect of dilutive securities:
Options 1,024 -- -- --
Unvested common stock awards 51,825 89,635 -- --
--------------- ------------- -------------- ---------------
Adjusted weighted average shares used in
EPS computation 4,958,788 4,995,574 4,966,458 4,966,458
=============== ============= ============== ===============
Earnings per share $0.73 $0.72 $0.23 $0.23
</TABLE>
For the quarter ended March 31, 2000 there were 167,100 options not considered
in the computation of earnings per share as such options were anti-dilutive
during such period. These options may be dilutive in the future.
7
<PAGE>
4. Loan Portfolio
The Bank's loan portfolio consisted of the following at the dates
indicated:
<TABLE>
<CAPTION>
March 31, 2000 June 30, 1999
---------------------------------- -----------------------------------
(Dollars in thousands) Percentage of Percentage of
Amount Total Amount Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortgage loans:
Single-family residential $ 247,384 54.1% $ 231,498 61.2%
Multi-family residential 17,166 3.8% 12,938 3.4%
Commercial real estate 82,903 18.1% 52,769 13.9%
Construction 10,100 2.2% 7,773 2.1%
Home Equity 69,804 15.2% 54,090 14.3%
- -------------------------------------------------------------------------------------------------------------------
Total mortgage loans $ 427,357 93.4% $ 359,068 94.9%
- -------------------------------------------------------------------------------------------------------------------
Non-mortgage consumer loans 8,091 1.8% 6,431 1.7%
Commercial business loans 22,018 4.8% 13,023 3.4%
- -------------------------------------------------------------------------------------------------------------------
Total loans receivable $ 457,466 100.0% $ 378,522 100.0%
Less:
Allowance for loan losses (3,905) (3,138)
Deferred loan origination fees (902) (800)
- -------------------------------------------------------------------------------------------------------------------
Loans receivable, net $ 452,659 $ 374,584
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
5. Securities
The amortized cost of available-for-sale securities and their estimated
fair values at March 31, 2000 and June 30, 1999 are as follows:
<TABLE>
<CAPTION>
March 31, 2000
-----------------------------------------------------------------------
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Equity Securities $ 11,236 $ -- $ (107) $ 11,129
US Government and Government Agency Securities 33,600 -- (2,034) 31,566
Mortgage Backed Securities 32,093 -- (1,707) 30,386
Municipal Securities 2,001 -- (125) 1,876
- -----------------------------------------------------------------------------------------------------------------------------------
Total $ 78,930 $ -- $ (3,973) $ 74,957
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
June 30, 1999
-----------------------------------------------------------------------
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
-----------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Equity Securities $ 11,068 $ 47 $ (63) $ 11,052
US Government and Government Agency Securities 35,000 -- (1,123) 33,877
Mortgage Backed Securities 34,229 56 (1,049) 33,236
Municipal Securities 1,999 -- (109) 1,890
- -----------------------------------------------------------------------------------------------------------------------------------
Total $ 82,296 $ 103 $ (2,344) $ 80,055
===================================================================================================================================
</TABLE>
8
<PAGE>
6. Recent Accounting Pronouncements
Accounting for Derivative Instruments and Hedging Activities
In June 1999, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for
Derivative Instruments and Hedging Activities." This statement, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments imbedded in other contracts,
(collectively referred to as derivatives) and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial condition and measure those
instruments at fair value. The accounting for changes in the fair value of a
derivative depends on the intended use of the derivative and the resulting
designation. If certain conditions are met, a derivative may be specifically
designated as (a) a hedge of certain exposure to changes in the fair value of a
recognized asset or an unrecognized firm commitment, (b) a hedge of an exposure
to variable cash flows of a forecasted transaction, or (c) a hedge of a foreign
currency exposure. This statement, as amended, is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. Earlier adoption is
permitted. The Company has not yet determined the impact, if any, of this
statement, including its provisions for the potential reclassification of
investment securities, on operations, financial condition, and equity. However,
the Company currently has no derivatives covered by this statement and currently
conducts no hedging activities.
7. Comprehensive Income
The following table displays net income and the components of other
comprehensive income to arrive at total comprehensive income. For the Company,
the only component of other comprehensive income is the change in the estimated
fair value of investment securities available-for-sale.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
(Dollars in thousands) March 31, March 31,
- -----------------------------------------------------------------------------------------------------------------
2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Comprehensive income:
Net income $ 1,182 $ 1,133 $ 3,605 $ 2,505
Other comprehensive income (loss) net of tax
Net change in unrealized gain (loss) (74) (457) (1,091) (396)
- -----------------------------------------------------------------------------------------------------------------
Total comprehensive income: $ 1,108 $ 676 $ 2,514 $ 2,109
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
8. Benefit Plans
The Company approved its 1999 Stock Option Plan (the "Option Plan") and
the 1999 Recognition and Retention Plan and Trust Agreement (the "RRP") on July
27, 1999 at a special shareholders meeting.
RRP
Pursuant to the RRP, the Company acquired 89,635 shares at a cost of
$929,000. On October 26, 1999, 89,635 shares were awarded to directors and
management from the RRP Trust. Compensation expense on RRP shares granted is
recognized ratably over the vesting period in an amount which totals the market
price of the Company's stock at the date of grant. As of March 31, 2000, no
granted shares were vested pursuant to the terms of the Plan. For the
three-month and nine-month periods ended March 31, 2000, the Company recognized
$41,000 and $68,000, respectively, in compensation expense related to the RRP.
Stock Option Plan
On October 26, 1999, 167,100 stock options were awarded to directors,
management and key employees of the Company at the then current market price.
The Company accounts for its Option Plan in accordance with the
9
<PAGE>
provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations, as permitted by
SFAS No. 123, "Accounting for Stock-based Compensation." As such, compensation
expense is recognized at the date of an option grant only if the current market
price of the underlying stock exceeds the exercise price of the option.
Item 2. Management's Discussion and Analysis
This Form 10-Q contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, and may be
identified by the use of such words as "believe," "expect," "anticipate,"
"should," "planned," "estimated" and "potential." Examples of forward-looking
statements include, but are not limited to, estimates with respect to the
financial condition, results of operations and business of the Company that are
subject to various factors which could cause actual results to differ materially
from these estimates. These factors include, but are not limited to, general
economic conditions, changes in interest rates, deposit flows, loan demand, real
estate values, and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting the
Company's operations, pricing, products and services.
Changes in Financial Condition
General. Total assets of the Company increased by $91.6 million or 19.4%
to $563.6 million at March 31, 2000 compared to $472.0 million at June 30, 1999.
This increase is reflected primarily in an increase of $78.1 million in loans
and a $17.1 million increase in interest-bearing deposits, partially offset by a
decrease of $5.1 million in securities available for sale at March 31, 2000
compared to June 30, 1999. The increases in loans were funded by increases of
$53.9 million in deposits and $36.7 million in Federal Home Loan Bank ("FHLB")
borrowings.
Cash and cash equivalents. Cash and cash equivalents amounted to $21.8
million and $4.9 million at March 31, 2000 and June 30, 1999, respectively. Cash
increases at March 31, 2000 were primarily due to increases in deposits during
the quarter.
Securities Available for Sale. At March 31, 2000, the Company's securities
available for sale consisted of $75.0 million in securities compared to $80.1
million in securities at June 30, 1999. This decrease in securities was due
primarily to normal amortization payments on mortgage-backed securities and the
sale of $5.5 million of government agency, mortgage-backed and equity securities
during the year. The sale of the securities was executed to take advantage of
the demand for higher yielding loans.
At March 31, 2000 the Company had unrealized losses on securities
available for sale of $4.0 million compared to unrealized losses on securities
available for sale of $2.2 million at June 30, 1999. The increase in unrealized
losses is a result of the increases in the general level of interest rates.
Loans. The net loan portfolio of the Company increased from $374.6 million
at June 30, 1999 to $452.7 million at March 31, 2000. The increase in the
Company's net loan portfolio was due, in large part, to the Company's continuing
efforts to expand its lending activities with a concentrated effort to expand
multi-family, commercial real estate, consumer and business loans.
During the nine months ended March 31, 2000, the Company's commercial real
estate mortgage loans increased by $30.1 million or 57.1%, single-family
residential mortgage loans increased by $15.9 million or 6.9% and home equity
loans increased $15.7 million or 29.1%. During the same period, the Company's
commercial business loans increased $9.0 million or 69.1%, multi-family loans
increased $4.2 million or 32.7%, construction loans increased $2.3 million or
29.9% Additionally, the Company's non-mortgage consumer loans increased $1.7
million or 25.8%. Such changes in the Bank's loan portfolio reflect the
Company's continuing efforts to diversify its loan portfolio and increase its
holdings in loans that generally have higher yields and shorter terms to
maturity and/or repricing than single-family residential mortgage loans.
However, commercial real estate loans, multi-family residential mortgage loans,
construction loans, home equity loans and consumer loans all generally are
deemed to have increased credit risk characteristics in comparison to
single-family residential mortgage loans.
10
<PAGE>
The following table sets forth information with respect to non-performing
assets identified by the Company, including non-accrual loans and other real
estate owned.
March 31 June 30
2000 1999
--------------------
(Dollars in Thousands)
Accruing loans past due 90 days or more
Mortgage loans $ 96 $ 4
------ ------
Total $ 96 $ 4
------ ------
Non-accrual loans:
Mortgage loans
Single-family residential $1,053 $1,006
Home Equity 10 37
Non-mortgage consumer loans 19 8
Commercial business loans 2 13
------ ------
Total $1,084 $1,064
------ ------
Total non-performing loans $1,180 $1,068
------ ------
Total non-performing assets $1,180 $1,068
------ ------
Non-performing loans to total loans, net of deferred fees 0.26% 0.29%
Non-performing assets to total assets 0.21% 0.23%
Intangible Assets. The Company's intangible assets amounted to $1.6
million and $2.0 million at March 31, 2000 and June 30, 1999, respectively. Such
assets are comprised of goodwill and a core deposit intangible resulting from
the Bank's purchase of three branch offices from another institution in March
1994. The goodwill is being amortized on a straight-line basis over 15 years
while the core deposit intangible is being amortized over 10 years.
Other Assets. The Company's other assets increased $718,000 or 24.7% to
$3.6 million at March 31, 2000 compared to $2.9 million at June 30, 1999. The
primary reason for this increase was due to an increase in the Company's
deferred tax asset which increased as a result of the unrealized loss on
securities available-for-sale.
Liabilities. The Company's total liabilities increased by $90.4 million,
or 21.8%, to $504.0 million at March 31, 2000 compared to $413.6 million at June
30, 1999. The primary reason for such increase was a $53.9 million increase in
deposits and increases of $36.7 million in FHLB advances. The Company's increase
in deposits resulted from marketing efforts promoting the opening of two new
banking offices generating time deposit and core deposits. The increases in
deposits and borrowings were used to fund loans as part of the overall loan
diversification plan.
Stockholders' Equity. Total stockholders' equity of the Company amounted
to $59.6 million or 10.6% of assets at March 31, 2000 compared to $58.4 million
or 12.4% of total assets at June 30, 1999. The increase was attributed to
increases in net income partially offset by several factors. Total stockholders'
equity of the Company included net unrealized losses, net of taxes, of $2.5
million and $1.4 million on securities available for sale at March 31, 2000 and
June 30, 1999, respectively. The Company paid cash dividends of, $0.09, $0.09
and $0.08 per share during the quarters ended March 31, 2000, December 31, 1999
and September 30, 1999, respectively. These regular dividends totaled $547,000.
The Company executed the repurchase of 89,635 of Company Common Stock shares for
the RRP authorized at the special shareholders meeting on July 27, 1999. The
shares were purchased in the open market at an aggregate price of $929,000. The
unamortized cost of these shares is reflected as a contra equity component of
stockholders' equity and these shares are being amortized over the five-year
vesting period.
11
<PAGE>
Results of Operations
General - Net income for the three-month and nine-month periods ended
March 31, 2000 was $1.2 million and $3.6 million, respectively. This compares to
net income of $1.1 million and $2.5 million for the respective prior year
periods. Net interest income grew as a result of a continuing larger
interest-earning asset base in part resulting from the Company's initial public
offering in December 1998. For the three-month and nine-month periods ended
March 31, 2000, net income also improved as a result of slight increases in
non-interest income compared to the same prior year periods. For the three-month
and nine-month periods ended March 31, 2000 the increase in net interest income
were partially offset by increases in the provision for loan losses and in
non-interest expense compared to the same prior year periods. Return on average
assets was 0.88% and 0.94% for the three-month and nine-month periods ended
March 31, 2000. This compares to 1.02% and 0.79% for the comparable periods one
year ago. Return on average equity was 7.92% and 8.08% for the three-month and
nine-month periods ended March 31, 2000. This compares to 7.79% and 7.55% for
the comparable periods one year ago.
Net Interest Income - Net interest income is determined by our interest
rate spread (i.e., the difference between the yields on interest-earning assets
and the rates paid on interest-bearing liabilities) and also the amount of
interest-earning assets relative to interest-bearing and non-interest-bearing
deposit liabilities.
For the three-month and nine-month periods ended March 31, 2000, net
interest income increased $865,000 and $3.0 million or 21.1% and 26.1%,
respectively, compared to the three-month and nine-month periods ended March 31,
1999. During the three-month period ended March 31, 2000, the increase was a
result of an increased interest rate spread, was partially offset by a decline
in the ratio of interest-earning assets to interest-bearing liabilities. During
the nine-month period ended March 31, 2000, net interest income increased as a
result of increases in both interest rate spread and the ratio of
interest-earning assets to interest-bearing liabilities. The increase in the
ratio of interest-earning assets to interest-bearing liabilities is primarily
due to the effects of conversion proceeds that were available for the full
nine-month period ended March 31, 2000 compared to the availability for only
three months during the nine-month period ended March 31, 1999. Specifically,
the interest rate spread increased three basis points from 3.03% to 3.06% and
twelve basis points from 2.96% to 3.08% for the three-month and nine-month
periods ended March 31, 2000, respectively, compared to the comparable periods
in the prior year.
Average interest-earning assets increased $91.0 million and $84.1 million
or 21.0% and 20.5% for the three-month and nine-month periods ended March 31,
2000, respectively, compared to the respective periods in the prior year. The
increase in interest-earning assets more than offset the increase in
interest-bearing liabilities which, for the three-month and nine-month periods
ended March 31, 2000, increased on average $83.4 million and $63.3 million,
respectively, over the same period one year ago. The ratio of average
interest-earning assets to average interest-bearing liabilities declined to
119.69% for the three-month period ended March 31, 2000 compared to 122.17% at
March 31, 1999. The ratio of average interest-earning assets to average
interest-bearing liabilities increased to 120.81% for the nine-month period
ended March 31, 2000 compared to 118.60% at March 31, 1999. For the three-month
period ended March 31, 2000, the increase in interest rate spread did not fully
offset the effect of the decline in interest-earning assets to interest-bearing
liabilities. Net interest margin declined three basis points from 3.85% at March
31, 1999 to 3.82% for the three-month period ended March 31, 2000. For the
nine-month period ended March 31, 2000, the combination of increases in interest
rate spread and ratio of interest-earning assets to interest-bearing liabilities
resulted in an increase in our net interest margin. Net interest margin
increased seventeen basis points to 3.86% from 3.69% for the nine-month
comparative periods ended March 31, 2000 and March 31, 1999, respectively.
The following tables set forth, for the periods indicated, information
regarding (i) the total dollar amount of interest income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average rate; (iii) net interest income; (iv) interest rate spread; and (v) net
interest margin. Information is based on average daily balances during the
indicated periods. Given that the Company had only nominal amounts of tax-exempt
investments, the data below is not presented on a tax equivalent basis:
12
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------------------------------------------------------------
2000 1999
----------------------------------------- --------------------------------------
(Dollars in Thousands)
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Loans Receivable:
Mortgage loans $ 413,266 $ 8,120 7.86% $ 325,682 $ 6,444 7.91%
Non-Mortgage Consumer loans 8,167 164 8.08% 5,984 104 7.05%
Commercial loans 20,219 499 9.93% 8,853 228 10.44%
----------------------------- ---------------------------
Total Loans $ 441,652 $ 8,783 8.00% $ 340,519 $ 6,776 8.07%
Securities $ 74,230 $ 1,226 6.64% $ 68,181 $ 1,044 6.21%
Other interest-earning assets 7,612 49 2.59% 23,805 250 4.26%
----------------------------- ---------------------------
Total interest-earning
assets $ 523,494 $ 10,058 7.73% $ 432,505 $ 8,070 7.57%
------------ ------------
Noninterest-earning assets 15,585 11,241
-------------- ------------
Total assets $ 539,079 $ 443,746
============== ============
Interest-bearing liabilities:
Deposits:
NOW and money market accounts $ 59,295 $ 329 2.23% $ 51,077 $ 270 2.14%
Savings accounts 50,682 260 2.06% 42,936 217 2.05%
Certificates of deposit 267,553 3,628 5.45% 243,058 3,290 5.49%
----------------------------- ---------------------------
Total deposits $ 377,530 $ 4,217 4.49% $ 337,071 $ 3,777 4.54%
Total borrowings 55,979 861 6.19% 13,239 177 5.42%
Total Escrows 3,877 6 0.62% 3,712 7 0.76%
----------------------------- ---------------------------
Total interest-bearing
liabilities $ 437,386 $ 5,084 4.67% $ 354,022 $ 3,961 4.54%
------------ ------------
Noninterest bearing liabilities 41,975 31,548
-------------- ------------
Total liabilities $ 479,361 $ 385,570
Total equity 59,718 58,176
-------------- ------------
Total liabilities and equity $ 539,079 $ 443,746
============== ============
Net interest-earning assets $ 86,108 $ 78,483
Net interest income/interest
rate spread $ 4,974 3.06% $ 4,109 3.03%
======================== =======================
Net interest margin 3.82% 3.85%
========= ========
Ratio of average interest-earning assets
to average interest-bearing liabilities 119.69% 122.17%
========= ========
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended March 31,
----------------------------------------------------------------------------------------
2000 1999
---------------------------------------- -------------------------------------------
(Dollars in Thousands)
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Loans Receivable:
Mortgage loans $ 390,507 $ 22,998 7.85% $ 320,097 $ 19,247 8.02%
Non-Mortgage Consumer loans 7,272 399 7.30% 5,674 281 6.60%
Commercial loans 16,527 1,216 9.79% 7,717 693 11.96%
---------------------------- -----------------------------
Total Loans $ 414,306 $ 24,613 7.91% $ 333,488 $ 20,221 8.08%
Securities 74,022 3,564 6.41% 50,317 2,267 6.00%
Other interest-earning assets 6,443 114 2.35% 26,906 941 4.66%
---------------------------- -----------------------------
Total interest-earning assets $ 494,771 $ 28,291 7.61% $ 410,711 $ 23,429 7.60%
------------- -------------
Noninterest-earning assets 14,152 11,002
--------------- ----------------
Total assets $ 508,923 $ 421,713
=============== ================
Interest-bearing liabilities:
Deposits:
NOW and money market accounts $ 58,180 $ 990 2.26% $ 47,750 $ 797 2.22%
Savings accounts 50,679 783 2.06% 41,793 657 2.09%
Certificates of deposit 259,129 10,467 5.38% 239,612 10,018 5.57%
---------------------------- -----------------------------
Total deposits $ 367,988 $ 12,240 4.43% $ 329,155 $ 11,472 4.64%
Total borrowings 38,307 1,698 5.90% 13,874 572 5.49%
Total Escrows 3,266 15 0.61% 3,266 19 0.77%
---------------------------- -----------------------------
Total interest-bearing
liabilities $ 409,561 $ 13,953 4.53% $ 346,295 $ 12,063 4.64%
------------- -------------
Noninterest bearing liabilities 39,838 30,198
--------------- ----------------
Total liabilities $ 449,399 $ 376,493
Total equity 59,524 45,220
--------------- ----------------
Total liabilities and equity $ 508,923 $ 421,713
=============== ================
Net interest-earning assets $ 85,210 $ 64,416
Net interest income/interest rate spread $ 14,338 3.08% $ 11,366 2.96%
========================= ===========================
Net interest margin 3.86% 3.69%
============ ==============
Ratio of average interest-earning assets
to average interest-bearing liabilities 120.81% 118.60%
============ ==============
</TABLE>
14
<PAGE>
Interest Income - Interest income on loans increased $2.0 million and $4.4
million or 29.6% and 21.7% for the three- and nine-month periods ended March 31,
2000, respectively, compared to the prior year periods. The increase in average
loan balances more than offset the decline in average loan rates. Interest
income on securities and other interest-earning assets declined $19,000, or
1.5%, for the three-month period ended March 31, 2000 compared to the respective
prior year period. However, for the nine-month period ended March 31, 2000
interest income on securities increased $470,000, or 14.7% compared to the
similar period one year before. The increase in average securities balances and
increase in average securities rates accounted for the increase during the
nine-month period ended March 31, 2000 compared to the nine-month period ended
March 31, 1999. The increases in average balances were partially a result of the
deployment of proceeds from the Company's December 1998 stock offering.
Interest Expense - Interest expense on deposit accounts increased $440,000
and $768,000 or 11.6% and 6.7% for the three-month and nine-month periods ended
March 31, 2000, respectively, compared to the prior year periods. The increase
in average balances on deposits was partially offset by a decrease in average
deposit rates. Interest expense on borrowings increased $684,000 and $1.1
million or 386.4% and 196.9%, respectively, for the three-month and nine-month
periods ended March 31, 2000 compared to the respective prior year period. The
increase in borrowings was in part to provide an additional source of funds to
the Company for the purpose of originating additional loans in our market area
as part of our plan to diversify the loan portfolio. Management has continued to
be competitive with interest rates paid on deposits. Savings balances increased
during the nine months ended March 31, 2000 due to the Company's continued
promotional efforts to attract new customers during the period.
Provision for Loan Losses - The Company's provision for loan losses was
$195,000 and $686,000, respectively, for the three-month and nine-month periods
ended March 31, 2000. This compares to the provision for loan losses of $121,000
and $351,000 for the comparable periods in the prior year. The increase is a
result of continued loan growth and the Company's desire to make appropriate
provisions given the increasing inherent risk of a diversifying loan portfolio.
<TABLE>
<CAPTION>
For the Nine Months Ended
March 31,
-----------------------------------------
2000 1999
- -------------------------------------------------------------------------------------------------
( Dollars in Thousands)
<S> <C> <C>
Allowance at beginning of period $ 3,138 $ 2,665
-------------- ---------------
Provisions 686 351
Charge-offs:
Mortgage loans 51 --
Non-mortgage loans 13 23
Commercial business loans 1 3
-------------- ---------------
Total charge-offs 65 26
Recoveries 146 --
-------------- ---------------
Allowance for loan losses at end of period $ 3,905 $ 2,990
-------------- ---------------
Allowance for loan losses to total non-performing
loans at end of period 325.69% 221.79%
-------------- ---------------
Allowance for loan losses to loans net of deferred
fees at end of period 0.86% 0.86%
-------------- ---------------
Ratio of charge-offs to average loans 0.02% 0.01%
-------------- ---------------
</TABLE>
Non-interest Income - Non-interest income increased $65,000 and $21,000,
or 30.4% and 2.6%, for the three-month and nine-month periods ended March 31,
2000, respectively, as compared to the comparable periods in the prior year.
Increases in service fees and charges more than offset declines in net loan
servicing income for the nine-month comparative period ended March 31, 2000 and
March 31, 1999. Net loan servicing income declined due to a reduction in
mortgage servicing rights recognized as a result of reduced mortgage loan sale
activity.
15
<PAGE>
Non-interest Expense - Non-interest expense, net of the $896,000 one time
Foundation expense incurred on December 23, 1998, increased $630,000 and $1.8
million for the three-month and nine-month periods ended March 31, 2000 compared
to the similar periods in the prior year. Compensation and employee benefits
expense increased due to general increases in salary levels, compensation
charges related to the ESOP, RRP and the increase in Company employees as a
result of opening three additional banking offices and the expansion of our
lending function to support the Company's loan diversification plan. Furniture
and fixture expense increases were the result of management's continuing efforts
to update equipment and facilities and the opening of its ninth, tenth and
eleventh full-service banking offices as well as the opening of an operations
center to better service the Company's needs. Data processing costs increased
due to a general increase in the number of accounts and testing, preparation and
equipment replacement for Year 2000 contingencies. Other operating expenses
increased primarily as a result of the operational expenses of servicing
increasing loan and deposit portfolios as well as professional costs associated
with the operation of a public company.
Income Tax - The provisions for income taxes for the three-month and
nine-month periods ended March 31, 2000 were $755,000 and $2.1 million,
respectively. This compares to $578,000 and $1.4 million for the three-month and
nine-month periods, respectively, ended March 31, 1999. The increase in
provisions for taxes primarily relates to increases in pre-tax income for the
corresponding three-month and nine-month periods ended March 31, 2000 compared
to the respective prior year periods.
Liquidity and Commitments
The Company's liquidity, represented by cash and cash equivalents, is a
product of its operating, investing, and financing activities. The Company's
primary sources of funds are deposits, amortizations, prepayments and maturities
of outstanding loans and mortgage-backed securities, maturities of investment
securities and other short-term investments and funds provided from operations.
The Company also utilizes borrowings, generally in the form of FHLB advances, as
a source of funds. While scheduled payments from the amortization of loans and
mortgage related securities and maturing investment securities and short-term
investments are relatively predictable sources of funds, deposit flows and loan
prepayments are greatly influenced by general interest rates, economic
conditions and competition. In addition, the Company invests excess funds in
short-term interest earning assets which provide liquidity to meet lending
requirements.
Liquidity management is both a daily and long term function of business
management. Excess liquidity is generally invested in short-term investments
such as U.S. Treasury securities. The Company uses its sources of funds
primarily to meet its ongoing commitments, to pay maturing certificates of
deposit and savings withdrawals, fund loan commitments and maintain a portfolio
of mortgage backed and mortgage related securities and investment securities. At
March 31, 2000, the total approved investment and loan origination commitments
outstanding amounted to $21.5 million. Certificates of deposit scheduled to
mature in one year or less at March 31, 2000 totaled $179.7 million. Based on
historical experience, management believes that a significant portion of
maturing deposits will remain with the Company. The Company has the ability to
utilize borrowings, typically in the form of FHLB Advances as an additional
source of funds. The maximum borrowing capacity available to the Company from
the Federal Home Loan Bank was $239.2 million, based on qualifying collateral.
The Company is required to maintain a minimum of 4% of its assets in regulatory
eligible liquid investments. As of March 31, 2000, the Company had 20.9% in
eligible liquid investments. The Company anticipates that it will continue to
have sufficient funds, together with borrowings, to meet its current
commitments.
Capital
At March 31, 2000 and June 30, 1999, the Bank had regulatory capital which
was well in excess of regulatory limits set by the Office of Thrift Supervision.
The current requirements and the Bank's actual capital levels are detailed
below:
16
<PAGE>
<TABLE>
<CAPTION>
To be Well
For Capital Capitalized Under
Adequacy Prompt Corrective
Actual Capital Purposes Action Provisions
---------------------------- -------------------------- -----------------------------
Amount Ratio Amount Ratio Amount Ratio
---------------------------- -------------------------- -----------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
As of March 31, 2000
Tangible capital $ 49,207 8.7% $ 8,453 1.5% $ 11,270 2.0%
(to tangible assets)
Core capital 49,207 8.7% 22,575 4.0% 28,219 5.0%
(to adjusted tangible assets)
Tier I capital 49,207 14.3% N/A N/A 20,597 6.0%
(to risk-weighted assets)
Risk-based capital 53,112 15.5% 27,462 8.0% 34,328 10.0%
(to risk-weighted assets)
As of June 30, 1999
Tangible capital $ 46,180 9.8% $ 7,079 1.5% $ 9,438 2.0%
(to tangible assets)
Core capital 46,180 9.8% 18,855 4.0% 23,568 5.0%
(to adjusted tangible assets)
Tier I capital 46,180 16.9% N/A N/A 16,352 6.0%
(to risk-weighted assets)
Risk-based capital 49,318 18.1% 21,803 8.0% 27,253 10.0%
(to risk-weighted assets)
</TABLE>
Year 2000 Considerations
As of the date of this filing, the Company has not experienced any
significant year 2000 problems relating to its internal or third party computer
systems. Nor has the Company experienced any issues regarding the ability of
commercial customers to meet debt service as a result of year 2000 issues. The
Company will continue to monitor systems for problems in the future, however,
the costs related to that process are not expected to be significant.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
For a discussion of the Company's asset and liability management policies
as well as the potential impact of interest rate changes upon the market value
of the Company's portfolio equity, see "Management's Discussion and Analysis of
Financial Condition and Results of Operation" in the Company's June 30, 1999
Form 10-K. Management, as part of its regular practices, performs periodic
reviews of the impact of interest rate changes upon net interest income and the
market value of the Company's portfolio equity. Projected changes in net
interest income over a four quarter period, as measured by internal reporting
systems utilizing a plus and minus 200 basis point rate shock, reflect no
substantial difference compared to June 30, 1999. Management believes that
increased asset growth combined with increases in the general level of interest
rates has caused the net portfolio value of the Company's equity, as measured by
the OTS Net Portfolio Value Model, to decline as of March 31, 2000 compared to
June 30, 1999. Management closely monitors interest rate risk and takes
appropriate short-term actions to maintain this risk at acceptable levels while
focusing on a longer-term loan diversification plan, which concentrates on the
acquisition of shorter maturity or repricing assets. Based on, among other
factors, such reviews, management believes that there are no material changes in
the market risk of the Company's asset and liability position since its annual
report of June 30, 1999.
17
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in routine legal proceedings in the normal course
of business which, in the aggregate, are believed by management to be immaterial
to the financial condition of the Company.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits (filed herewith unless otherwise noted)
2.1 Plan of Reorganization*
2.2 Plan of Stock Issuance*
3.1 Federal Stock Charter of Willow Grove Bancorp, Inc.*
3.2 Bylaws of Willow Grove Bancorp, Inc.*
4.0 Form of Stock Certificate of Willow Grove Bancorp, Inc.*
10.1 Form of Employment Agreement entered into between Willow Grove Bank
and Frederick A. Marcell, Jr.*
10.2 Form of Employment Agreement entered into between Willow Grove Bank
and each of Thomas M. Fewer, John J. Foff, Jr. and John T. Powers*
10.3 Supplemental Executive Retirement Agreement*
10.4 Non-Employee Director's Retirement Plan*
10.5 1999 Stock Option Plan**
10.6 1999 Recognition and Retention Plan and Trust Agreement**
27.0 Financial Data Schedule
- ---------
* Incorporated by reference from the Company's Registration Statement on
Form S-1 as filed on September 18, 1999, as amended, and declared
effective on November 12, 1999 (File No. 333-63737)
** Incorporated by reference from the Company's Proxy Statement on Schedule
14A as filed on June 23, 1999 (File No. 000-25191).
(b) Not applicable
18
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WILLOW GROVE BANCORP, INC.
Date: May 11, 2000 By: /s/ Frederick A. Marcell, Jr.
-------------------------------------
Frederick A. Marcell, Jr.
President and Chief Executive
Officer
Date: May 11, 2000 By: /s/ John J. Foff, Jr.
-------------------------------------
John J. Foff, Jr., Senior Vice
President, Chief Financial
Officer and Treasurer
19
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
<PERIOD-END> MAR-31-2000
<CASH> 3248
<INT-BEARING-DEPOSITS> 18511
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 74957
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 452659
<ALLOWANCE> 3905
<TOTAL-ASSETS> 563564
<DEPOSITS> 444584
<SHORT-TERM> 35000
<LIABILITIES-OTHER> 2882
<LONG-TERM> 16651
0
0
<COMMON> 51
<OTHER-SE> 59550
<TOTAL-LIABILITIES-AND-EQUITY> 563564
<INTEREST-LOAN> 24613
<INTEREST-INVEST> 3678
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 28291
<INTEREST-DEPOSIT> 12240
<INTEREST-EXPENSE> 13953
<INTEREST-INCOME-NET> 14338
<LOAN-LOSSES> 783
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 8790
<INCOME-PRETAX> 5677
<INCOME-PRE-EXTRAORDINARY> 5677
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3605
<EPS-BASIC> .73
<EPS-DILUTED> .72
<YIELD-ACTUAL> 7.61
<LOANS-NON> 1096
<LOANS-PAST> 84
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1180
<ALLOWANCE-OPEN> 3138
<CHARGE-OFFS> 65
<RECOVERIES> 146
<ALLOWANCE-CLOSE> 3711
<ALLOWANCE-DOMESTIC> 3711
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 995
</TABLE>
