SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
(Mark One)
<TABLE>
<CAPTION>
<S> <C>
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
- ---
For the quarterly period ended June 30, 1999
-------------------------------------------------
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
For the transition period from to
---------------- -----------------
Commission file number 0-25693
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FLORIDAFIRST BANCORP
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
United States 59-3545582
- ------------------------------ ----------
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification no.)
</TABLE>
205 East Orange Street, Lakeland, Florida 33801-4611
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (941) 688-6811
--------------------
N/A
- --------------------------------------------------------------------------------
Former name,former address and former fiscal year, if changed since last report.
Indicate by check X whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes 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 August 11, 1999.
Class Outstanding
- --------------------------- -----------------
$.10 par value common stock 5,752,875 shares
<PAGE>
FLORIDAFIRST BANCORP
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1999
INDEX
Page
Number
------
PART I - CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF
FLORIDAFIRST BANCORP
Item 1. Financial Statements and Notes Thereto............................ 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 7
Item 3. Quantitative and Qualitative Disclosure About Market Risk......... 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................. 17
Item 2. Changes in Securities............................................. 17
Item 3. Defaults upon Senior Securities................................... 17
Item 4. Submission of Matters to a Vote of Security Holders............... 17
Item 5. Other Information................................................. 17
Item 6. Exhibits and Reports on Form 8-K.................................. 18
SIGNATURES................................................................. 19
<PAGE>
FLORIDAFIRST BANCORP
Condensed Consolidated Statements of Financial Condition
(Unaudited)
<TABLE>
<CAPTION>
June 30, September 30,
ASSETS 1999 1998
--------------- --------------
(In thousands)
<S> <C> <C>
Cash and cash equivalents $ 2,687 $ 5,217
Investment securities available for sale, at fair value 54,748 42,225
Investment securities held to maturity, market value
$12,803 and $18,524 12,927 18,736
Loans receivable, net of allowance for loan losses of
$2,866 and $2,564 377,205 338,610
Premises and equipment, net 6,802 6,845
Accrued interest receivable 2,536 2,398
Other assets 6,276 5,010
--------------- --------------
Total assets $463,181 $419,041
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $337,544 $352,180
Federal Home Loan Bank advances 60,000 21,000
Other liabilities 4,702 9,754
--------------- --------------
Total liabilities 402,246 382,934
--------------- --------------
Commitments and contingencies -- --
Stockholders' equity:
Common stock, $ .10 par value, 18,000,000 shares authorized,
5,752,875 outstanding 575
Additional paid-in capital 25,124
Retained income 38,218 35,887
Unallocated shares held by the ESOP (2,163) -
Accumulated other comprehensive income (loss) (819) 220
--------------- --------------
Total stockholders' equity 60,935 36,107
--------------- --------------
Total liabilities and stockholders' equity $463,181 $419,041
=============== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
1
<PAGE>
FLORIDAFIRST BANCORP
Condensed Consolidated Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months ended For the Nine Months ended
June 30, June 30,
------------------------------ ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Interest income:
Loans $ 7,157 $ 6,527 $ 21,055 $ 20,872
Investments and other 1,056 1,161 2,947 3,950
-------------- -------------- -------------- --------------
Total interest income 8,213 7,688 24,002 24,822
-------------- -------------- -------------- --------------
Interest expense:
Deposits 3,578 4,485 11,167 14,719
Federal Home Loan Bank advances 521 7 1,431 7
-------------- -------------- -------------- --------------
Total interest expense 4,099 4,492 12,598 14,726
-------------- -------------- -------------- --------------
Net interest income before loan loss provision 4,114 3,196 11,404 10,096
Provision for loan losses 120 100 420 305
-------------- -------------- -------------- --------------
Net interest income 3,994 3,096 10,984 9,791
-------------- -------------- -------------- --------------
Other income:
Fees and service charges 308 222 849 788
Gain on sale of branches - - 164 3,016
Other, net 43 148 123 276
-------------- -------------- -------------- --------------
Total other income 351 370 1,136 4,080
-------------- -------------- -------------- --------------
Other expenses:
Compensation and employee benefits 1,470 1,262 4,322 4,245
Occupancy and equipment costs 470 404 1,419 1,267
Marketing 175 104 432 377
Data processing costs 132 126 391 391
Federal insurance premiums 53 94 165 280
Other 639 610 1,781 2,121
-------------- -------------- -------------- --------------
Total other expenses 2,939 2,600 8,510 8,681
-------------- -------------- -------------- --------------
Income before income taxes 1,406 866 3,610 5,190
Income tax expense 466 272 1,279 1,681
-------------- -------------- -------------- --------------
Net income $ 940 $ 594 $ 2,331 $ 3,509
============== ============== ============== ==============
Basic net income per share $ 0.17
==============
Weighted average number of shares outstanding 5,541,374
==============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
2
<PAGE>
FLORIDAFIRST BANCORP
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For The Nine Months
Ended June 30,
1999 1998
--------- ---------
(In thousands)
Operating activities:
Net income $ 2,331 $ 3,509
Adjustments to reconcile net income to net cash used
in operating activities:
Provision for loan losses 420 305
Depreciation 558 452
Gain on sale of branches and related deposits (164) (3,016)
Decrease (increase) in accrued interest receivable (138) 254
Decrease (increase) in other assets (768) 1,223
(Decrease) increase in other liabilities (5,256) (787)
-------- ---------
Net cash used in operating activities (3,017) 1,940
-------- ---------
Investing activities:
Proceeds from calls, maturities and repayment of
investment securities 23,191 40,437
Increase in loans, net (38,939) (20,726)
Purchase of investments available for sale (31,518) (24,863)
Purchases of premises and equipment (490) (264)
Proceeds on sale of premises and equipment 343
Cash transferred in connection with sale
of branches, net -- (7,170)
-------- ---------
Net cash used in investing activities (47,413) (12,586)
-------- ---------
Financing activities:
Net (decrease) increase in deposits (14,636) (6,559)
Net increase in FHLB advances 39,000 5,000
Net proceeds received from issuance of common stock 23,536 -
-------- ---------
Net cash provided by financing activities 47,900 (1,559)
-------- ---------
Net increase in cash (2,530) (12,205)
Cash and cash equivalents at beginning of period 5,217 21,842
-------- ---------
Cash and cash equivalents at end of period $ 2,687 $ 9,637
======== =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 12,404 $ 14,721
======== =========
Taxes $ 931 $ 1,056
======== =========
Supplemental disclosure of non-cash information:
Additions to investment in real estate acquired
through foreclosure $ 76 $ 1,468
======== =========
Change in unrealized gain (loss) on investments
available for sale, net of
deferred tax benefit of $(574) and $(9) $ (1,039) $ (17)
======== =========
Net assets transferred in connection with
branch sale:
Loans receivable $ 44,607
Premises and equipment 705
Deposits 55,498
=========
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE>
FLORIDAFIRST BANCORP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - BASIS OF PRESENTATION
The accompanying condensed financial statements were prepared in accordance with
instructions for Form 10-Q and, therefore, do not include all information
necessary for a complete presentation of financial condition, results of
operations, and cash flows in conformity with generally accepted accounting
principles. However, all adjustments, consisting of normal recurring accruals,
which, in the opinion of management, are necessary for a fair presentation of
the financial statements have been included. The results of operations for the
periods ended June 30, 1999 and 1998 are not necessarily indicative of the
results which may be expected for the entire fiscal year or any other period.
The condensed financial statements as of and for the three and nine month
periods ended June 30, 1999 and 1998 include the accounts of First Federal
Florida (the "Bank") which, as discussed in Note 2, became the wholly owned
subsidiary of FloridaFirst Bancorp (the "Company") on April 6, 1999. The
Company's business is conducted principally through the Bank.
These statements should be read in conjunction with the financial statements and
related notes, which are incorporated by reference in the Company's Prospectus
dated February 12, 1999.
Note 2 - MUTUAL HOLDING COMPANY REORGANIZATION AND STOCK ISSUANCE
On April 6, 1999, the Bank completed its mutual to stock conversion ("Mutual
Holding Company Reorganization and Stock Issuance"). In connection with the
Mutual Holding Company Reorganization and Stock Issuance, FloridaFirst Bancorp,
a federally chartered corporation, sold 2,703,851 shares (or 47%) of its common
stock in a subscription offering at $10.00 per share and issued the remaining
53% to FloridaFirst Bancorp MHC. A total of 5,752,875 shares of common stock of
FloridaFirst Bancorp were issued in connection with the Mutual Holding Company
Reorganization and Stock Issuance. Upon completion of these transactions, the
Bank became the wholly owned subsidiary of FloridaFirst Bancorp.
Gross proceeds from the stock issuance of $27.0 million were reduced by $1.2
million in subscription related expenses and $100,000 initial capital for
FloridaFirst Bancorp MHC ("MHC"), leaving net proceeds of the offering of $25.7
million. The Company recorded $575,288 as capital stock based on the 5,752,875
shares issued (3,049,024 were issued to the MHC) at a $.10 par value, with the
remaining $25.1 million recorded as additional paid-in capital. Of the net
proceeds, the Company contributed $12.9 million to the Bank in exchange for all
of its outstanding shares of stock.
The common stock of the Company began trading on the Nasdaq National Market
under the symbol "FFBK" on April 7, 1999.
Note 3 - RECENT ACCOUNTING PRONOUNCEMENTS
Comprehensive Income. Effective October 1, 1998, the Company adopted SFAS No.
130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components in a full set
of general purpose financial statements. Under SFAS No. 130, comprehensive
income is divided into net income and other comprehensive income. Other
comprehensive income includes items previously recorded directly in equity, such
as unrealized gains or losses on securities available for sale. SFAS No. 130
requires total comprehensive income and its components to be reported in a
financial statement with equal prominence as other financial statements.
4
<PAGE>
Comprehensive income for the periods presented was as follows:
<TABLE>
<CAPTION>
---------------- ----------------- ----------------- ----------------
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $940,000 $594,000 $2,331,000 $3,509,000
- ------------------------------------------ ---------------- ----------------- ----------------- ----------------
Other comprehensive income (loss) (776,100) (52,000) (1,039,000) (17,000)
- ------------------------------------------ ---------------- ----------------- ----------------- ----------------
Comprehensive income $163,900 $542,000 $1,292,000 $3,492,000
- ------------------------------------------ ---------------- ----------------- ----------------- ----------------
</TABLE>
Other comprehensive losses consisted entirely of unrealized losses, net of
taxes, on available for sale securities.
Segments of an Enterprise and Related Information. In June 1997, the FASB issued
SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information, which changes the way public companies report information about
segments of their business and requires them to report selected segment
information in their quarterly reports issued to stockholders. Among other
things, SFAS No. 131 requires public companies to report (a) certain financial
and descriptive information about its reportable operating segments (as
defined); and (b) certain enterprise-wide financial information about products
and services, geographic areas, and major customers. The required segment
financial disclosures include a measure of profit or loss, certain specific
revenue and expense items, and total assets. The Company adopted SFAS NO. 131 on
October 1, 1998. However, no specific segment disclosure is required since the
Company views its operations as a single segment.
Employers' Disclosure About Pensions and Other Postretirement Benefits. In
February 1998, the FASB issued SFAS No. 132, Employers' Disclosure About
Pensions and Other Postretirement Benefits. SFAS No. 132 revises employers'
disclosures about pension and other postretirement benefit plans. It does not
change the measurement or recognition of those plans. SFAS No. 132 became
effective for the Company on October 1, 1998. Adoption of this statement did not
have a material effect on the Company's financial condition or results of
operations.
Accounting for Derivative Instruments and Hedging Activities. In June 1998, the
FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded 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 position and measure those
instruments at fair value. FASB has delayed the effective date of SFAS No. 133
until fiscal quarters beginning after June 15, 2000 by issuing SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133.. Initial application of this Statement
should be as of the beginning of an entity's fiscal quarter. On that date,
hedging relationships must be designated anew and documented pursuant to the
provisions of SFAS No. 133. Earlier application of all of the provisions of SFAS
No. 133 is encouraged, but it is permitted only as of the beginning of any
fiscal quarter that begins after issuance of this Statement. This Statement
should not be applied retroactively to financial statements of prior periods.
SFAS No. 133 is not expected to have a material impact on the Company's
financial statement presentations.
Note 4 - SALE OF BRANCHES
On October 29, 1997, the Bank entered into an agreement (the "Branch Sale") to
sell substantially all of the loans, with a majority of the loans sold on a
servicing-released basis, and certain liabilities (primarily deposit
liabilities) of its branches located in north Florida. The sale included loans
at 80% of the deposit liability. The remaining 20% of the purchase was funded
with cash. The sale also included the branch buildings, except for two buildings
that were closed by the Bank because the Bank is precluded from conducting any
further business at those locations. The transaction was completed January 30,
1998. Assets of approximately $52.5
5
<PAGE>
million, including loans of $44.6 million, property and equipment of $705,000,
cash of $10.1 million, and liabilities consisting primarily of deposit accounts
of $55.5 million, were sold for a gain of approximately $3.0 million.
Of the remaining two branch buildings, the Bank realized a gain of $164,000 from
the sale of one branch in March 1999 and the other branch was sold in May 1999.
The gain of $204,000 ($133,000 net of taxes) for the May branch sale has been
deferred because the Bank has agreed to indemnify the purchaser for the costs of
obtaining closure with state environmental authorities regarding the necessity
of further remediation of certain environmental contamination on the site due to
outside sources. As soon as these costs are reasonably determinable, any
remaining gain will be recognized as income.
Note 5 - EMPLOYEE STOCK OWNERSHIP PLAN
An employee stock ownership plan (the ESOP") was established January 1, 1999 for
the exclusive benefit of participating employees of the Bank. Participating
employees are employees who have completed one year of service with the Bank and
have attained the age of 21. Upon completion of the Mutual Holding Company
Reorganization and Stock Issuance, the ESOP acquired 8% of the total shares
(216,308 shares) issued to public stockholders. The purchase was funded through
a loan obtained from the Company. The loan is expected to be repaid over a term
of ten years at an annual interest rate equal to the prevailing prime rate of
interest. The loan is secured by the shares purchased and earnings of the ESOP
assets.
When a principal payment is made on the loan, a pro-rata number of shares will
be allocated to the eligible employees in accordance with the provisions of the
ESOP . The outstanding principal balance of the ESOP loan will be treated as a
reduction in stockholders' equity. ESOP shares scheduled to be released at the
ESOP's year end will be included as shares outstanding for calculation of
earnings per share on a pro-rata basis throughout the year.
Note 6 - NET INCOME PER SHARE OF COMMON STOCK
Basic net income per share of common stock for the quarter ended June 30, 1999
has been computed by dividing net income for the period by the weighted average
number of shares outstanding. Shares of common stock purchased by the ESOP (see
Note 5) are only considered outstanding when the shares are released or
committed to be released for allocation to participants. The ESOP initially
purchased 216,308 shares, of which 21,631 are scheduled to be released at the
end of the plan year. The Company has determined that 2,403 shares per month
will be added to the outstanding shares on a monthly basis from April to
September 1999. Since the Company currently does not have any additional debt or
equity instruments, no presentation is required for potential dilution in per
share earnings.
Note 7 - PENSION PLAN TERMINATION
On September 28, 1998, the Board of Directors of the Bank froze benefit accruals
for the defined benefit pension plan (the "Plan") effective November 3, 1998.
The Bank terminated the Plan on April 14, 1999 by distributing the participants
their full present value of accrued benefits based on the Plan liquidation
guidelines, as prescribed by the Internal Revenue Code. The Bank funded $1.3
million to the Plan, which when combined with other Plan assets, provided
sufficient assets to distribute to or purchase annuities for Plan participants
to satisfy the present value of the calculated benefit obligations. The Bank had
adequately accrued for the benefits as of September 30, 1998.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward-Looking Statements
The Company may from time to time make written or oral forward-looking
statements, including statements contained in the Company's filings with the
Securities and Exchange Commission (the "Commission") and its reports to
stockholders. Statements made in such documents, other than those concerning
historical information, should be considered forward-looking and subject to
various risks and uncertainties. Such forward-looking statements are made based
upon management's belief as well as assumptions made by, and information
currently available to, management pursuant to "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. The Company's actual results
may differ materially from the results anticipated in forward-looking statements
due to a variety of factors, including governmental monetary and fiscal
policies, deposit levels, loan demand, loan collateral values, securities
portfolio values, and interest rate risk management; the effects of competition
in the banking business from other commercial banks, savings and loan
associations, mortgage banking firms, consumer finance companies, credit unions,
securities brokerage firms, insurance companies, money market mutual funds and
other financial institutions operating in the Company's market area and
elsewhere, including institutions operating through the Internet; changes in
governmental regulation relating to the banking industry, including regulations
relating to branching and acquisitions; failure of assumptions underlying the
establishment of reserves for losses, including the value of collateral
underlying delinquent loans, and other factors. The Company cautions that such
factors are not exclusive. The Company does not undertake to update any
forward-looking statements that may be made from time to time by, or on behalf
of, the Company.
Comparison of Financial Condition at June 30, 1999 and September 30, 1998
Assets. Total assets increased $44.1 million, or 10.5%, to $463.1 million at
June 30, 1999 from $419.0 million at September 30, 1998. The increase in total
assets resulted primarily from a $38.6 million, or a 15.2% annualized increase,
in the loan portfolio attributable to strong loan demand in our market areas and
a $6.7 million increase in investment securities. The net growth in investment
securities occurred mainly in June 1999 as the Company began to leverage the
balance sheet to utilize the higher level of capital as noted below.
Management plans to focus on loan growth to effectively utilize the new capital.
However, the Company's plans include the purchase of investment securities or
loans to increase its asset size to leverage the higher level of capital.
Liabilities. Total liabilities increased $19.3 million, or 5.0%, to $402.2
million at June 30, 1999 from $382.9 million at September 30, 1998. The increase
in total liabilities resulted primarily from a $39.0 million net increase in
FHLB advances utilized to partially fund the loan growth and the net deposit
outflow of $14.6 million and a $4.6 million decrease in amounts due to banks.
The decrease in deposits resulted from an outflow of certificates of deposit due
to the current interest rate environment for short-term fixed rate deposits and
consumers' preferences for alternative investment opportunities.
Management continues to evaluate the available funding sources, including
interest and other costs of funding, maturity considerations and the types of
assets being funded.
Stockholders'Equity.The increase in the Company's stockholders' equity reflects:
0 net proceeds of the stock offering (see Note 2) of $25.7 million
7
<PAGE>
0 net income for the nine months ended June 30, 1999 of $2.3 million
0 change in accumulated other comprehensive income (loss) of $1.0 million
(attributable to the net unrealized loss on investments available for sale)
0 ESOP loan outstanding of $2.2 million.
The net unrealized loss on investments available for sale relates primarily to
the increasing level of interest rates over the past several months. Increasing
rates reduce the value of certain investments held for sale that have longer
average lives.
At June 30, 1999 the Company's stockholders' equity as a percentage of total
assets was 13.16%. As discussed in Note 2, the Company utilized part of the net
stock proceeds to contribute $12.9 million in capital to the Bank. See also
"Liquidity and Capital Resources" discussion.
Comparison of Operating Results for the Three Months Ended June 30, 1999 and
June 30, 1998
Net Income. Net income for the three months ended June 30, 1999 increased 58.2%
to $940,000, compared to $594,000 for the same period in 1998. Net income for
the three months ended June 30, 1999 included use of $23.5 million in new
capital (net proceeds of $25.7 million less the ESOP loan of $2.2 million) for
the entire period.
Net interest income increased $898,000, or 29.0%, for the three months ended
June 30, 1999 compared to the same period in 1998. This increase results
primarily from an increase in interest income of $525,000 and a decrease in
interest expense of $393,000. Other expenses increased to $2.9 million for the
three months ended June 30, 1999 from $2.6 million for the three months ended
June 30, 1998, due primarily to increased personnel costs and marketing
expenditures.
Interest Income. Total interest income increased to $8.2 million for the three
months ended June 30, 1999 from $7.7 million for the same period in 1998,
resulting from the $43.2 million, or 10.7%, increase in average interest-earning
assets, partially offset by a 26 basis point decrease in the overall portfolio
yield. Average interest-earning assets increased to $448.3 million for the three
months ended June 30, 1999 from $405.1 million for the three months ended June
30, 1998. Average loans outstanding accounted for the growth. The average rate
earned on interest-earning assets decreased to 7.33% for the three months ended
June 30, 1999 from 7.59% for the three months ended June 30, 1998.
Interest income on loans increased $630,000 to $7.1 million for the three months
ended June 30, 1999 from $6.5 million for the three months ended June 30, 1998.
This increase reflects the strong loan demand in our market areas and focused
efforts from our lending personnel. Average loans increased $46.7 million, or
14.2% during the comparable periods. The growth occurred in all areas as
annualized growth in average mortgage loans was 11.7%, consumer loans 15.6%, and
commercial loans 36.0%. The strong loan growth however was offset by a 32 basis
point decrease in the average yield on loans, reflecting the lower interest
rates during much of the comparable periods.
Interest income on investment securities and other investments decreased
$105,000 to $1.1 million for the three months ended June 30, 1999 from $1.2
million for the three months ended June 30, 1998. This decrease was primarily
the result of a $3.5 million decrease in average balances to $72.3 million in
1999 from $75.8 million in 1998. The decrease in the average balance of
investment securities was primarily due to maturities and calls on investment
securities. The cash from these activities was used to fund new loan growth.
Also the average yield on the portfolio decreased by 28 basis points since
yields on the reinvestment of available assets have decreased because the
portfolio strategy is to diversify the investment portfolio to provide stable
cash flows. Additionally, certain adjustable rate investments with lower coupons
were purchased to protect against rising rates, while other longer term
investments were made to protect against declining rates.
8
<PAGE>
Interest Expense. Total interest expense decreased by $393,000 for the three
months ended June 30, 1999 from $4.5 million for the three months ended June 30,
1998, resulting primarily from a 54 basis point decrease in the average cost of
funds that was offset by a 2.5% increase in average interest-bearing
liabilities. Average interest-bearing liabilities increased to $372.5 million
for the three months ended June 30, 1999 from $363.4 million for the three
months ended June 30, 1998. The increase is attributable primarily to increased
FHLB advances utilized to fund the outflow of certificate accounts and support
the loan growth. The average interest rate paid on interest-bearing liabilities
was 4.40% for the three months ended June 30, 1999 compared to 4.94% for the
three months ended June 30, 1998. The decrease in rates paid on interest-bearing
liabilities reflects market rates as well as management's decision to use FHLB
advances to control its cost of funds and to lengthen the maturity of its
liabilities.
Interest expense on deposits decreased $907,000 to $3.6 million for the three
months ended June 30, 1999 from $4.5 million for the same period in 1998. This
decrease was a result of a decrease of $32.6 million in the average balance of
interest-bearing deposits to $330.2 million in 1999 from $362.8 million in 1998
and a decrease of 61 basis points in the average rate to 4.33% in 1999 from
4.94% in 1998. The decrease in the average balance of interest-bearing deposits
resulted primarily from the decision to use FHLB advances as a funding source.
The average balance of FHLB advances in the three months ended June 30, 1999
were $42.3 million at an average cost of 4.93%. The first FHLB advance was taken
in late June 1998 which had little impact on the June 1998 financial
information.
Provision for Loan Losses. The provision for loan losses was $120,000 for the
three months ended June 30, 1999, reflecting the growth in the loan portfolio,
compared to $100,000 for the three months ended June 30, 1998. The allowance for
loan losses increased $302,000 to $2.9 million at June 30, 1999 from $2.6
million at September 30, 1998. The current allowance represents .76% of total
loans outstanding at June 30, 1999. The Bank had net charge-offs of $56,000 for
the three months ended June 30, 1999 compared to net charge-offs of $153,000 for
the three months ended June 30, 1998.
Other Expense. Other expense increased by $339,000 to $2.9 million for the three
months ended June 30, 1999 from $2.6 million for the three months ended June 30,
1998. Compensation and employee benefits increased $208,000 due to certain costs
related to new hires and increased incentive pay based on production and
earnings performance. In addition, benefit programs, including the
implementation of an employee stock ownership plan, were changed to be more
competitive in the banking environment. Marketing related expenses increased by
$71,000 due to the Bank's marketing programs increasing efforts to differentiate
the Bank from its large institutional competitors.
Management expects increased expenses in the future as a result of the
establishment of the employee stock ownership plan, potential stock benefit
plans, and the adoption of the directors and executive retirement plans, as well
as increased costs associated with being a public company (e.g., periodic
reporting, annual meeting materials, transfer agent, professional and stock
listing fees).
Comparison of Operating Results for the Nine Months Ended June 30, 1999 and June
30, 1998
Net Income. Net income for the nine months ended June 30, 1999 decreased 34.3%
to $2.3 million, compared to $3.5 million for the same period in 1998. Net
income for the nine months ended June 30, 1998 included an after tax gain of
$1,950,000 from the sale of certain branches and related deposits to another
financial institution.
Net interest income increased $1.2 million, or 12.2%, for the nine months ended
June 30, 1999 compared to
9
<PAGE>
the same period in 1998. This increase resulted from a reduction in interest
expense of $2.1 million, which was partially offset by a $820,000 decrease in
interest income and a $115,000 increase in the provision for loan losses. Other
income decreased to $2.9 million for the nine months ended June 30, 1999 from
$4.1 million for the nine months ended June 30, 1998, resulting primarily from
the $3.0 million gain on the Branch Sale. Other expenses decreased slightly to
$8.5 million for the nine months ended June 30, 1999 from $8.7 million for the
nine months ended June 30, 1998, due primarily to cost savings related to the
Branch Sale.
Interest Income. Total interest income decreased to $24.0 million for the nine
months ended June 30, 1999 from $24.8 million for the nine months ended June 30,
1998, as a result of a 27 basis point decrease in the overall portfolio yield.
Average interest-earning assets were virtually unchanged, increasing to $429.4
million for the nine months ended June 30, 1999 from $428.4 million for the nine
months ended June 30, 1998. The transfer of $44.6 million in loans in the Branch
Sale was offset by new loan growth. The average rate earned on interest-earning
assets decreased to 7.45% for the nine months ended June 30, 1999 from 7.72% for
the nine months ended June 30, 1998, a decrease of 27 basis points.
Interest income on loans increased $183,000 to $21.1 million for the nine months
ended June 30, 1999 from $20.9 million for the nine months ended June 30, 1998.
This increase is attributable primarily to overall loan growth, offset somewhat
by a 39 basis points decrease in the yield on loans during the comparable nine
month periods from 8.13% to 7.74%, reflecting the overall trend in interest
rates during much of the comparable periods, substantial refinance and
modification activities on mortgage loans and increasing competitiveness for new
loan business in all areas. Average loans outstanding increased by $20.3 million
to $362.8 for the nine months ended June 30, 1999. This increase in balances,
despite the transfer of loans noted above, reflects the strong loan demand in
our market areas.
Interest income on investment securities and other investments decreased $1.0
million to $2.9 million for the nine months ended June 30, 1999 from $3.9
million for the nine months ended June 30, 1998. This decrease was primarily the
result of a $19.3 million decrease in the average balance to $66.6 million in
1999 from $85.9 million in 1998. The decrease in the average balance of
investment securities was primarily due to maturities and calls on investment
securities. The cash from these activities were used to fund new loan growth.
Also the average yield on the portfolio decreased by 23 basis points. See
discussion of the lower yields in the three month comparison narrative.
Interest Expense. Total interest expense decreased by $2.1 million to $12.6
million for the nine months ended June 30, 1999 from $14.7 million for the nine
months ended June 30, 1998, as a result of a 5.3% decrease in average
interest-bearing liabilities and a 49 basis point decrease in the average cost
of funds. Average interest-bearing liabilities decreased to $370.7 million for
the nine months ended June 30, 1999 from $391.3 million for the nine months
ended June 30, 1998. The decrease is attributable to the sale of deposits in the
Branch Sale, offset by increased funding required to support the asset growth.
The average interest rate paid on interest-bearing liabilities was 4.53% for the
nine months ended June 30, 1999 compared to 5.02% for the nine months ended June
30, 1998, a decrease of 49 basis points. The decrease in rates paid on
interest-bearing liabilities reflects market rates of interest in the comparable
periods as well as management's decision to use FHLB advances to control its
cost of funds and to lengthen the maturity of its liabilities.
Interest expense on deposits decreased $3.5 million to $11.2 million for the
nine months ended June 30, 1999 from $14.7 million for the nine months ended
June 30, 1998. This decrease was a result of a decrease of $59.8 million in the
average balance of interest-bearing deposits to $331.3 million in 1999 from
$391.1 million in 1998 and a decrease of 53 basis points in the average rate to
4.49% in 1999 from 5.02% in 1998. The decrease in the average balance of
interest-bearing deposits resulted from the $55.5 million in deposits sold in
the Branch Sale and a decision to use FHLB advances as a funding source.
The average balance of FHLB advances in the nine months ended June 30, 1999 were
$39.4 million at an average cost of 4.85%. The first FHLB advance was taken in
late June 1998, which had little impact on the June 1998 financial information.
10
<PAGE>
Provision for Loan Losses. The provision for loan losses was $420,000 for the
nine months ended June 30, 1999, reflecting the growth in the loan portfolio,
compared to $305,000 for the nine months ended June 30, 1998. The allowance for
loan losses increased $302,000 to $2.9 million at September 30, 1999 from $2.6
million at June 30, 1998. The current allowance represents .76% of total loans
outstanding at June 30, 1999. The Bank had net charge-offs of $119,000 for the
nine months ended June 30, 1999 compared to net charge-offs of $278,000 for the
nine months ended June 30, 1998.
Other Income. The decrease in Other income is attributable primarily to the $3.0
gain realized through the Branch Sale in 1998.
Other Expense. Other expense decreased by $171,000 to $8.5 million for the nine
months ended June 30, 1999 from $8.7 million for the nine months ended June 30,
1998. Compensation and employee benefits increased $77,000 due to the addition
of new staff personnel to enhance the transition into a full service community
bank. In addition, benefit programs were changed to be more competitive in the
banking environment. These increases were partially offset by cost savings
realized through the Branch Sale. Occupancy and equipment costs increased 12%
due to the installation and maintenance of ATM's at five branches, a general
increase in the upkeep of existing facilities and certain costs related to the
relocation of a leased branch site. Other expenses decreased $340,000 due to
general banking and loan related expenses that were saved in connection with the
Branch Sale.
Liquidity and Capital Resources
The liquidity of a savings institution reflects its ability to provide funds to
meet loan requests, to accommodate possible outflows in deposits, and to take
advantage of interest rate market opportunities. Funding of loan requests,
providing for liability outflows, and management of interest rate fluctuations
require continuous analysis in order to match the maturities of specific
categories of short-term loans and investments with specific types of deposits
and borrowing. Savings institution liquidity is normally considered in terms of
the nature and mix of the savings institution's sources and uses of funds.
Asset liquidity is provided through loan repayments and the management of
maturity distributions for loans and securities. An important aspect of
liquidity lies in maintaining sufficient levels of loans and mortgage-backed
securities that generate monthly cash flows.
Cash and cash equivalents decreased $2.5 million to $2.7 million for the nine
months ended June 30, 1999. Significant cash flows or uses (amounts shown in
parentheses) were as follows:
(In millions)
-----------
Cash used in operations $ (3.0)
FHLB advances 39.0
Decrease in net deposits (14.6)
Maturities of and repayments on investment securities 23.2
Purchases of investment securities (31.5)
Net increase in loans (38.9)
11
<PAGE>
Net funds received from stock subscriptions 23.5
Other - net (.2)
--------
Net decrease in cash and cash equivalents $ (2.5)
--------
See Notes 2 and 5 to the unaudited condensed consolidated financial statements
and also "Comparison of Financial Condition at June 30, 1999 and September 30,
1998" for discussion of significant cash flows.
On June 30, 1999, the Bank was in compliance with its three regulatory capital
requirements as follows:
Amount Percent
(Dollars in thousands)
Tangible capital................... $48,932 10.5%
Tangible capital requirement....... 6,967 1.5
Excess over requirement............ 41,965 9.0
Core capital....................... $48,932 10.5%
Core capital requirement........... 8,578 4.0
Excess over requirement............ 30,354 6.5
Risk based capital................. $51,798 18.1%
Risk based capital requirement..... 2,946 8.0
Excess over requirement............ 8,852 10.1
Management believes that under current regulations, the Bank will continue to
meet its minimum capital requirements in the foreseeable future. Events beyond
the control of the Bank, such as increased interest rates or a downturn in the
economy in areas in which the Bank operates could adversely affect future
earnings and as a result, the ability of the Bank to meet its future minimum
capital requirements.
Year 2000
Rapid and accurate data processing is essential to the Bank's operations. Many
computer programs that can only distinguish the final two digits of the year
entered (a common programming practice in prior years) are expected to read
entries for the year 2000 as the year 1900 or as zero and incorrectly attempt to
compute payment, interest, delinquency and other data.
The following discussion of the implications of the year 2000 problem for the
Bank contains numerous forward looking statements based on inherently uncertain
information. The cost of the project and the date on which the Bank plans to
complete the internal year 2000 modifications are based on management's best
estimates, which are derived utilizing a number of assumptions of future events
including the continued availability of internal and external resources, third
party modifications and other factors. However, there can be no guarantee that
these statements will be achieved and actual results could differ. Moreover,
although management believes it will be able to make the necessary modifications
in advance, there can be no guarantee that failure to modify the systems would
not have a material adverse effect on The Bank or the Company.
The Bank places a high degree of reliance on computer systems of third parties,
such as customers, public utilities, suppliers, and other financial and
governmental institutions. Although the Bank has assessed the readiness of these
third parties and is preparing contingency plans, there can be no guarantee that
the failure of these third parties to modify or maintain their systems in
advance of December 31, 1999 would not have a material adverse affect on the
Bank.
12
<PAGE>
The Bank's Year 2000 Plan (the "Plan") was presented to the Board of Directors
in September 1997. The Plan was developed using the guidelines outlined in the
Federal Financial Institutions Examination Council's "The Effect of Year 2000 on
Computer Systems." The Year 2000 Committee is responsible for the Plan with the
Board of Directors receiving Year 2000 progress reports on a quarterly basis.
Our primary operating systems, as provided by a third party service bureau
("External Provider"), have been tested satisfactorily. In addition, the
External Provider has given us written confirmation that their software system
is Year 2000 compliant. The main hardware and software used to serve our
customer base and maintain the customer transaction histories and company
accounting records are currently operating on Year 2000 compliant systems.
The latest OTS on-site examination was conducted in early July 1999, and based
on the examination results, the Bank was progressing satisfactorily towards
completing the Plan requirements. The business resumption plan, including plans
for cash and liquidity needs, was approved by the Board on June 29, 1999. Actual
testing of those plans is scheduled for September and October 1999.
The Bank has contacted all other material vendors and suppliers regarding their
Year 2000 readiness. Each of these third parties has delivered written assurance
to the Bank that they are or expect to be Year 2000 compliant prior to the Year
2000. The Bank is maintaining contact with all significant customers and
non-information technology suppliers (i.e. utility systems, telephone systems,
etc.), regarding their year 2000 state of readiness. All non-information
technology providers have assured us that the Year 2000 will not be an issue or
that the issue will be satisfactorily resolved prior to the end of 1999. No
contracts, written assurances, or oral assurances with the Bank's material
vendors, systems providers, and suppliers include any type of remedy or penalty
for breach of contract in the event that any of these parties are not Year 2000
compliant.
The Bank has identified 15 vendors and systems as mission critical and, based
upon testing or assurances from such vendors, 100% of the Bank's mission
critical vendors and systems are Year 2000 compliant. Testing has been completed
on all significant vendor applications. Vendors and systems deemed important or
minor (not "mission critical") are services that are performed by outside
vendors. We have received communication from these vendors indicating they are
or will be in compliance for Year 2000 without any disruption in service.
Appropriate testing, if possible, and any related contingency plans would be
completed in the third quarter of 1999.
We are unable to test the Year 2000 readiness of our significant suppliers of
utilities. We are relying on the utility companies' internal testing and
representations to provide the required services that drive our data systems.
Our business resumption plans address the issues that arise should the utility
providers experience temporary problems.
Software provided by our External Provider is supported by a contractual
agreement that states the software will be Year 2000 compliant prior to January
1, 2000. This software has been thoroughly tested and has been declared by our
External Provider, as compliant. The contracts for our other systems and
services do not contain similar statements since they have longer terms and were
not subject to specific contract negotiation in the past few years.
Major commercial loan customers (loan balances in excess of $500,000) have been
contacted in writing. In addition, the commercial loan relationship managers
conducted a telephone and personal contact program with all these customers to
determine any potential exposure that might be present due to the customer's
failure to prepare adequately for the Year 2000. This contact program was
completed as of June 30, 1999. No unusual or significant risk exposure was
identified. Any new commercial loan applicant is required to answer a brief
series of questions concerning Year 2000 preparedness in the loan approval and
closing process.
As a practical matter, individual mortgage loan, consumer loan and smaller
commercial loan customers were not contacted regarding their Year 2000
readiness. It was deemed to be beyond the scope of our testing parameters to
contact these borrowers. Further, most of these are individuals with adequate
collateral for their
13
<PAGE>
loans.
If the Plan fails to significantly address the Year 2000 issues of the Bank, the
following, among other things, could negatively affect the Bank:
(a) utility service companies may be unable to provide the necessary
service to drive our data systems or provide sufficient sanitary
conditions for our offices;
(b) our primary software provider could have a major malfunction in its
system or their service could be disrupted due to its utility
providers, or some combination of the two; or
(c) the Bank may have to transact its business manually.
The Bank will attempt to monitor these uncertainties by continuing to request an
update on all critical and important vendors throughout the remainder of 1999.
If the Bank identifies any concern related to any critical or important vendor,
the contingency plans will be implemented immediately to assure continued
service to the Bank's customers.
Costs have and will be incurred to replace certain non-compliant software and
hardware. The Bank does not anticipate that direct costs for renovating or
replacing non-compliant hardware and software will exceed $300,000, of which
approximately $235,000 had been expended as of June 30, 1999. No assurance can
be given that the Year 2000 Plan will be completed successfully by the Year
2000, in which event the Bank could incur significant costs. If the External
Provider fails to maintain its system in compliant state or incurs other
obstacles prior to Year 2000, the Bank would likely experience significant data
processing delays, mistakes or failures. These delays, mistakes or failures
could have a significant negative affect on our earnings.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future events,
which are inherently uncertain, including continued compliance of the External
Provider, testing plans, and all vendors, suppliers and customer readiness.
Despite the best efforts of management to address this issue, the vast number of
external entities that have direct and indirect business relationships with the
Bank, such as customers, public utilities, vendors, payment system providers and
other financial institutions, makes it impossible to assure that a failure to
achieve compliance by one or more of these entities would not have material
adverse impact on the financial condition or operations of the Bank.
Impact of Inflation
The condensed consolidated financial statements of the Company and notes
thereto, presented elsewhere herein, have been prepared in accordance with GAAP,
which require the measurement of financial position and operating results in
terms of historical dollars without considering the change in the relative
purchasing power of money over time due to inflation. The impact of inflation is
reflected in the increased cost of the Company's operations. Unlike most
industrial companies, nearly all the assets and liabilities of the Company are
financial. As a result, interest rates have a greater impact on the Company's
performance than do the effects of general levels of inflation. Interest rates
do not necessarily move in the same direction or to the same extent as the
prices of goods and services.
14
<PAGE>
ITEM 3. Qualitative and Quantitative About Market Risk
Qualitative Analysis. There have been no material changes from the Qualitative
Analysis information regarding market risk disclosed under the heading
"Management of Interest Rate Risk and Market Risk" in the Bank's Management's
Discussion and Analysis of Financial Condition and results of operations for the
year ended September 30, 1998.
Quantitative Analysis. The only significant change in the quantitative analysis
from the September 30, 1998 discussion relates to the additional capital
contributed to the Bank. Of the $25.7 million in net proceeds the Company
received in the stock offering, $12.9 million was contributed to the Bank. Since
the OTS Net Portfolio Value ("NPV") Model measures exposure to interest rate
risk of the Bank to assure capital adequacy for the protection of the
depositors, only the Bank's financial information is used for the model.
However, the Bank is the only subsidiary and significant asset of the Company,
therefore the OTS NPV model provides a reliable basis upon which to perform the
quantitative analysis. The results of the NPV model is not yet available for
June 30, 1999, but should reflect a higher NPV due to the additional capital
contributed to the Bank.
15
<PAGE>
FLORIDAFIRST BANCORP
PART II
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor the Bank was engaged in any legal proceeding
of a material nature at June 30, 1999. From time to time, the Company
is a party to routine legal proceedings in the ordinary course of
business, such as claims to enforce liens, condemnation proceedings on
properties in which the Company holds security interests, claims
involving the making and servicing of real property loans, and other
issues incident to the business of the Company. There were no lawsuits
pending or known to be contemplated against the Company at June 30,
1999 that would have a material effect on the operations or income of
the Company or the Bank, taken as a whole.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Registration Statement on Form SB-2 (No. 333-69239) for which the
use of proceeds information is being disclosed was declared effective
by the Securities and Exchange Commission on February 12, 1999. The
offering commenced on February 12, 1999 and terminated on March 18,
1999 after 2,703,851 shares were sold. The Registration Statement
covered the issuance of 2,703,851 shares. The managing underwriter for
the offering was Sandler O'Neill & Partners, L. P. The title of the
securities registered was Common Stock, par value $0.10 per share. The
aggregate price of the offering amount registered was $27,038,510, and
the aggregate offering price of the amount sold was $27,038,510. The
expenses incurred by the Company and the Bank in connection with the
issuance and distribution of the securities were approximately $1.3
million, including $173,000 in underwriting fees. Such payments were
not direct or indirect payments to directors, officers, general
partners of the issuer or their associates, persons owning 10 percent
or more of any class of equity security of the Company or affiliates
of the Company. The net offering proceeds to the Company were
approximately $25.7 million. Of this amount, approximately $12.9
million was contributed to the working capital of the Bank and $12.8
million was contributed to the working capital of the Company.
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
See Note 2 to the Unaudited Condensed Consolidated Financial
Statements regarding the Mutual Holding Company Reorganization and
Stock Issuance.
16
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 2 Plan of Mutual Holding Company Reorganization and Stock Issuance*
Exhibit 3(i) Charter for FloridaFirst Bancorp*
Exhibit 3(ii) Bylaws of FloridaFirst Bancorp*
Exhibit 4 Specimen Stock Certificate of FloridaFirst Bancorp*
Exhibit 10.1 Employment Agreement with Gregory C. Wilkes*
Exhibit 10.2 Form of Employment Agreement with Four Employees of the Bank *
Exhibit 27 Financial Data Schedule (in electronic filing only)
(b) Reports on Form 8-K - None
- -------------------
* Incorporated by reference to the Registrant's Registration Statement on
Form S-1 initially filed with the Commission on December 18, 1998 (File No.
333-69239).
<PAGE>
FLORIDAFIRST BANCORP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLORIDAFIRST BANCORP
Date: August 13, 1999 By: /s/ Gregory C. Wilkes
-------------------------------------------
Gregory C. Wilkes
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 13, 1999 By: /s/ Kerry P. Charlet
-------------------------------------------
Kerry P. Charlet
Chief Financial Officer
(Principal Accounting Officer)
</TABLE>
18
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,253
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 434
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 54,748
<INVESTMENTS-CARRYING> 12,927
<INVESTMENTS-MARKET> 12,803
<LOANS> 380,071
<ALLOWANCE> 2,866
<TOTAL-ASSETS> 463,181
<DEPOSITS> 337,544
<SHORT-TERM> 20,000
<LIABILITIES-OTHER> 4,702
<LONG-TERM> 40,000
0
0
<COMMON> 23,536
<OTHER-SE> 37,399
<TOTAL-LIABILITIES-AND-EQUITY> 463,181
<INTEREST-LOAN> 7,157
<INTEREST-INVEST> 1,056
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 8,213
<INTEREST-DEPOSIT> 3,578
<INTEREST-EXPENSE> 4,099
<INTEREST-INCOME-NET> 3,994
<LOAN-LOSSES> 120
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,939
<INCOME-PRETAX> 1,406
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 940
<EPS-BASIC> .17
<EPS-DILUTED> .17
<YIELD-ACTUAL> 3.67
<LOANS-NON> 419
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
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<ALLOWANCE-OPEN> 2,800
<CHARGE-OFFS> 64
<RECOVERIES> 10
<ALLOWANCE-CLOSE> 2,866
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</TABLE>
