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 December 31, 1999
----------------------------------------
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 000-25693
---------
FLORIDAFIRST BANCORP
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
United States 59-3545582
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
205 East Orange Street, Lakeland, Florida 33801-4611
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (863) 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 February 9, 2000.
Class Outstanding
- ------------------------------------ ----------------
$.10 par value common stock 5,400,875 shares
<PAGE>
FLORIDAFIRST BANCORP
FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 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......................... 6
Item 3. Quantitative and Qualitative Disclosure About Market Risk...... 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 14
Item 2. Changes in Securities.......................................... 14
Item 3. Defaults upon Senior Securities................................ 14
Item 4. Submission of Matters to a Vote of Security Holders............ 14
Item 5. Other Information.............................................. 14
Item 6. Exhibits and Reports on Form 8-K............................... 15
SIGNATURES.............................................................. 16
<PAGE>
FLORIDAFIRST BANCORP
Condensed Consolidated Statements of Financial Condition
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1999 1999
--------------- --------------
(In thousands)
<S> <C> <C>
Cash and cash equivalents $ 5,615 $ 2,598
Investment securities available for sale, at fair value 77,648 68,152
Investment securities held to maturity, market value
$12,495 and $12,479 12,686 12,724
Loans receivable, net of allowance for loan losses of
$2,987 and $2,941 408,873 397,910
Premises and equipment, net 7,000 6,818
Federal Home Loan Bank stock, at cost 6,043 4,475
Other assets 5,603 5,681
--------- ---------
Total assets $ 523,468 $ 498,358
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 337,063 $ 339,224
Federal Home Loan Bank advances 120,850 87,600
Other borrowings 2,867 4,872
Other liabilities 3,598 5,325
--------- ---------
Total liabilities 464,378 437,021
--------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock, $ .10 par value, 18,000,000 shares authorized,
5,752,875 outstanding 575 575
Additional paid-in capital 25,085 25,124
Retained income 39,889 39,037
Treasury stock, at cost, 314,000 and -0- shares (2,859) --
Unallocated shares held by the ESOP (1,838) (2,163)
Accumulated other comprehensive income (loss) (1,762) (1,236)
--------- ---------
Total stockholders' equity 59,090 61,337
--------- ---------
Total liabilities and stockholders' equity $ 523,468 $ 498,358
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements
1
<PAGE>
FLORIDAFIRST BANCORP
Condensed Consolidated Statements of Earnings
(Unaudited)
For the three months ended
December 31,
1999 1998
------ ------
(In thousands, except per share amount)
Interest income:
Loans $7,581 $6,875
Investments and other 1,560 960
------ ------
Total interest income 9,141 7,835
------ ------
Interest expense:
Deposits 3,607 3,904
Federal Home Loan Bank advances and other borrowings 1,417 379
------ ------
Total interest expense 5,024 4,283
------ ------
Net interest income 4,117 3,552
Provision for loan losses 120 150
------ ------
Net interest income after provision for loan losses 3,997 3,402
------ ------
Other income:
Fees and service charges 337 281
Gain (loss) on sale of assets 22 1
Other, net 87 39
------ ------
Total other income 446 321
------ ------
Other expenses:
Compensation and employee benefits 1,555 1,424
Occupancy and equipment costs 437 447
Marketing 187 134
Data processing costs 129 126
Federal insurance premiums 50 58
Other 681 511
------ ------
Total other expenses 3,039 2,700
------ ------
Income before income taxes 1,404 1,023
Income taxes 493 379
------ ------
NET INCOME $ 911 $ 644
====== ======
Basic earnings per share (1) $ 0.17 N/A
====== ======
Weighted average number of shares outstanding (1) 5,448 N/A
====== ======
(1) FloridaFirst converted to a stock company on April 6, 1999. Earnings per
share and weighted average shares outstanding are not shown for December
31, 1998 since no shares were outstanding in that period.
See accompanying notes to unaudited condensed consolidated financial statements.
2
<PAGE>
FLORIDAFIRST BANCORP
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For The Three Months
Ended December 31,
1999 1998
---- ----
(In thousands)
<S> <C> <C>
Operating activities:
Net income $ 911 $ 644
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Provision for loan losses 120 150
Depreciation 175 177
Decrease in other assets 458 510
Decrease in other liabilities (1,402) (867)
-------- --------
Net cash provided by operating activities 262 614
-------- --------
Investing activities:
Proceeds from calls, maturities and repayment of investment securities 7,234 10,236
Increase in loans, net (11,152) (14,114)
Purchase of investments available for sale (17,529) (5,655)
Purchase of FHLB stock (1,568) --
Purchases of premises and equipment (382) (196)
Proceeds on sale of premises and equipment 25 --
-------- --------
Net cash used in investing activities (23,372) (9,729)
-------- --------
Financing activities:
Net decrease in deposits (2,161) (4,164)
Net increase in FHLB advances 33,250 20,000
Net decrease in other borrowings (2,005) --
Payments to acquire treasury stock (2,859) --
Dividends paid (98) --
-------- --------
Net cash provided by financing activities 26,127 15,836
-------- --------
Net increase in cash and cash equivalents 3,017 6,721
Cash and cash equivalents at beginning of period 2,598 647
-------- --------
Cash and cash equivalents at end of period $ 5,615 $ 7,368
======== ========
Supplemental disclosure of cash flow information -
Cash paid during the period for:
Interest $ 3,618 $ 3,012
======== ========
Taxes $ -- $ --
======== ========
Supplemental disclosure of non-cash information:
Additions to investment in real estate acquired through foreclosure $ 69 $ --
======== ========
Change in unrealized gain (loss) on investments available for sale, net of
deferred tax benefit of $311 and $108 $ (526) $ (186)
======== ========
Allocation of shares held by the ESOP $ 325 $ --
======== ========
</TABLE>
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 consolidated 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 December 31, 1999 and 1998 are not necessarily
indicative of the results that may be expected for the entire fiscal year or any
other period. The condensed consolidated financial statements as of and for the
three month periods ended December 31, 1999 and 1998 include the accounts of
FloridaFirst Bank (the "Bank") which 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 consolidated financial
statements and related notes, which are incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended September 30, 1999.
Note 2 - COMPREHENSIVE INCOME
Comprehensive income for the periods presented was as follows:
Three Months Ended Three Months Ended
December 31, 1999 December 31, 1998
----------------- -----------------
Net income $ 911 $ 644
Other comprehensive income (loss) (526) (186)
---- ----
Comprehensive income $ 385 $ 458
===== =====
Other comprehensive losses consisted entirely of unrealized losses, net of
taxes, on available for sale securities.
Note 3 - STOCK REPURCHASE PROGRAM
On October 19, 1999 the Company announced that it had received approval from the
Office of Thrift Supervision ("OTS") to proceed with its planned repurchase of
up to 15% of the common stock, or 405,578 shares, held by stockholders other
than FloridaFirst Bancorp MHC, the Company's mutual holding company. The Company
is authorized to make such repurchases from time to time in open market
transactions as, in the opinion of management, market conditions warrant. The
repurchased shares will be held in treasury stock and will be available for
general corporate purposes, including the exercise of stock options. As of
December 31, 1999 the Company had acquired 314,000 shares under the repurchase
program at an average price of $9.11. The weighted average number of shares
outstanding for the quarter ended December 31, 1999 was reduced by 125,076
shares based on the purchase date of the shares acquired during the quarter.
4
<PAGE>
Note 4 - EARNINGS PER SHARE
Basic earnings per share of common stock for the quarter ended December 31, 1999
has been computed by dividing net income for the period by the weighted average
number of shares outstanding, which includes 3,049,024 shares held by the
Company's mutual holding company, FloridaFirst Bancorp MHC. Shares of common
stock purchased by the Bank's Employee Stock Ownership Plan are only considered
outstanding when the shares are released or committed to be released for
allocation to participants. The Company has determined that 1,803 shares per
month will be added to the outstanding shares for the fiscal year ending
September 30, 2000. Since the Company currently does not have any convertible
debt or other equity instruments, there are no common stock equivalents that
could further dilute the Company's basic earnings per share.
5
<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 December 31, 1999 and September 30, 1999
Assets. Total assets increased $25.1 million, or 5.0%, to $523.5 million at
December 31, 1999 from $498.4 million at September 30, 1999. The increase in
total assets resulted primarily from an $11.0 million, or an 11.0% annualized
increase in the loan portfolio attributable to steady loan demand in our market
areas and funding of construction loans. In addition, investment securities
increased $9.5 million. Management plans to focus on loan growth to effectively
utilize the new capital raised in fiscal 1999. The capital leveraging strategy
will include the purchase of investment securities to complement its loan
origination efforts.
Liabilities. Total liabilities increased $27.2 million, or 6.2%, to $464.2
million at December 31, 1999 from $437.0 million at September 30, 1999. The
increase in total liabilities resulted primarily from a $33.3 million net
increase in FHLB advances utilized to fund the asset growth, a net deposit
outflow of $2.2 million, a $2.0 million decrease in other borrowings and funding
of mortgage customers annual real estate tax payments. The decrease in deposits
has slowed in recent months although an outflow of certificates of deposit
continues due to relatively low returns provided by short-term fixed rate
deposits and a continued consumers' preference for alternative investment
opportunities. Checking and money market accounts continue to grow through
expansion of our customer base.
Management continues to evaluate the available funding sources. The attributes
of the alternative funding sources that management considers in its analysis
include the interest and other costs of such funding, the maturity
considerations and the nature and characteristics of assets being funded.
6
<PAGE>
Stockholders' Equity. The decrease in the Company's stockholders' equity
reflects:
>> net income for the three months ended December 31, 1999 of $911,000
>> repurchase of 314,000 shares of Company stock at a cost of $2.9 million
>> change in accumulated other comprehensive loss of $526,000 (attributable to
the net unrealized loss on investments available for sale)
>> Repayment of $325,000 on the ESOP loan.
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 December 31, 1999 the Company's stockholders' equity as a percentage of total
assets was 11.3%.
Comparison of Operating Results for the Three Months Ended December 31, 1999 and
December 31, 1998
Net Income. Net income for the three months ended December 31, 1999 increased
41.5% to $911,000, compared to $644,000 for the same period in 1998. Net income
for the three months ended December 31, 1999 benefited from the deployment 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 $565,000, or 15.9%, for the three months ended
December 31, 1999 compared to the same period in 1998. This increase resulted
primarily from an increase in interest income of $1.3 million, offset by an
increase in interest expense of $741,000. Other expenses increased to $3.0
million for the three months ended December 31, 1999 from $2.7 million for the
three months ended December 31, 1998, due to an accumulation of several expense
categories, including:
>> compensation and employee benefits,
>> certain Year 2000 costs,
>> costs related to stockholder meetings, communications, legal matters and
new financial reporting requirements as a public company, and
>> increased supplies and postage costs related to a name change campaign.
Interest Income. The following discussion highlights the major factors that
impacted the changes in interest income during the quarter when compared to the
prior year. Details are contained in the table at page 8.
>> Loan growth reflects the strong loan demand over the past year, the
Company's increased emphasis on loan origination and the favorable interest
rate environment for borrowers that prevailed from April 1998 through May
1999.
>> The yield on loans decreased primarily due to an approximate 1% reduction
in loan rates for new mortgage loan originations as compared to
approximately $45 million in mortgage loans that paid off during the year.
The impact of this caused overall mortgage portfolio yields to decline
approximately 24 basis points. In addition, the overall portfolio yield on
consumer loans decreased about 45 basis points and yields in the commercial
portfolio decreased about 27 basis points.
>> The average balances in the investment securities portfolio grew 47%
primarily due to the Company's strategy to leverage the higher capital
level that is present after the stock offering.
>> The higher yield in the investment portfolio resulted from the leveraging
strategy (outside the loan portfolio) in the latter part of fiscal 1999
when rates had risen significantly over the prior year. In addition, the
investment growth occurred in securities that had slightly longer average
lives with higher yields.
7
<PAGE>
Average Balance Sheet. The following table sets forth certain information
relating to the Company for the periods indicated. The average yields and costs
are derived by dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods presented. Average balances are
derived from average daily balances for 1999, but the 1998 averages are derived
from month-end balances. Management does not believe that the use of month-end
balances instead of average daily balances has caused any material differences
in the information presented.
<TABLE>
<CAPTION>
Three months Three months
December 31, 1999 December 31, 1998 Changes in
------------------------------- ----------------------------- ----------------------------------
Average Yield/ Average Yield/ Yield/
Balance Interest Cost Balance Interest Cost Balances % Interest Cost
------------------------------ ----------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earnings assets (IEA):
Loans receivable $ 406,034 $ 7,581 7.47% $ 348,898 6,875 7.88% $ 57,136 16% $ 706 -0.41%
Investments and other 91,587 1,583 6.91% 62,159 974 6.27% 29,428 47% 609 0.65%
------- ------ ------- ----- -------- ------
Total (1) 497,621 $ 9,164 7.37% 411,057 $ 7,849 7.64% $ 86,564 21% $1,315 -0.27%
======= ======= ======== ======
Other assets 13,565 12,117
------- -------
Total assets $ 511,186 $ 423,174
========== =========
Interest-bearing liabilities (IBL):
Interest checking $ 29,543 $ 135 1.83% $ 26,786 $ 120 1.79% $ 2,757 10% $ 15 0.04%
Savings 32,157 134 1.67% 37,445 163 1.74% (5,288) -14% (29) -0.07%
Money market accounts 24,611 238 3.87% 18,681 175 3.75% 5,930 32% 63 0.12%
Certificate accounts 238,507 3,100 5.20% 251,560 3,445 5.48% (13,053) -5% (345) -0.28%
-------- ------ -------- ------ -------- -----
Total deposits 324,818 3,607 4.44% 334,472 3,903 4.67% (9,654) (296) -0.23%
Advances and other borrowings 106,032 1,417 5.35% 31,500 380 4.83% 74,532 237% 1,037 0.52%
-------- ------ ------- ---- -------- ------
Total 430,850 $5,024 4.66% 365,972 $4,283 4.68% $ 64,878 18% $ 741 -0.02%
====== ====== ======== ======
Other liabilities 19,850 20,624
------- ------
Total liabilities 450,700 386,596
Stockholders' equity 60,486 36,578
------- ------
Total liabilities and equity $ 511,186 $ 423,174
========= =========
Net interest income (1) $4,140 $3,566
====== ======
Average IEA to IBL 115% 112%
Interest rate spread 2.71% 2.96%
Interest margin 3.33% 3.47%
</TABLE>
(1) Interest income and net interest income do not agree to the statement of
operations because the tax equivalent income on municipal bonds is included
in this schedule.
-8-
<PAGE>
Interest Expense. The following discussion highlights the major factors that
impacted the changes in Interest Expense during the quarter when compared to the
prior year. Detailed changes are contained in the table at page 8.
>> The decrease in deposits is attributable mainly to maintaining a
conservative deposit pricing strategy, utilizing more cost effective
funding alternatives that are available for the terms the Company has
considered appropriate to fit its interest rate management strategies. The
growth in checking account average balances has helped offset the decline
in certificate accounts.
>> FHLB advances grew because the Company considered the advances to be a more
cost effective funding alternative during the course of the year. Although
the cost of the advances slightly exceed the cost of certificate accounts,
funding asset growth through certificate accounts was deemed to be more
expensive than wholesale funding.
>> The higher cost of funds related to the FHLB advances is reflective of the
significant rise in interest rates over the past year.
Provision for Loan Losses. The provision for loan losses was $120,000 for the
three months ended December 31, 1999, reflecting the growth in the loan
portfolio, compared to $150,000 for the three months ended December 31, 1998.
The allowance for loan losses increased $46,000 to $3.0 million at December 31,
1999 from $2.9 million at December 31, 1998. The current allowance represents
.73% of total loans outstanding at December 31, 1999. The Company had net
charge-offs of $37,000 for the three months ended December 31, 1999 compared to
net charge-offs of only $2,000 for the three months ended December 31, 1998.
Other Expense. Other expense increased by $339,000 to $3.0 million for the three
months ended December 31, 1999 from $2.7 million for the three months ended
December 31, 1998. Compensation and employee benefits increased $131,000 due
primarily to having certain key positions filled this year compared to last
year, recognition of $45,000 related to the restricted stock plan and certain
costs related to increased incentive pay based on production and earnings
performance. Other expenses increased by $170,000 due to the areas noted above
and several other smaller increases in expense categories.
The Board of Directors and management has developed expansion plans for the
Company that includes three de novo branches within our existing market areas
and deployment of a strategic technology plan. The strategic technology plan
includes:
>> installing a new customer delivery software to enhance the sales efforts,
>> enhancing both our data and voice communications systems,
>> upgrading our computer network for enhanced service and security features,
>> implementing internal and external networks to improve communications and
productivity within the Company, and >> investigation of alternative
delivery systems, including an Internet banking solution and enhanced call
center strategy.
9
<PAGE>
A summary of the estimated costs associated with the new projects follows:
Estimated Costs Estimated Costs
Category. Fiscal 2000 Fiscal 2001
-------- ----------- -----------
(In thousands)
North Lakeland branch (Polk County) $ 100 $ 305
East Winter Haven branch (Polk County) -- 285
Lakewood Ranch branch (Manatee County) -- 325
New computer hardware and software 70 240
Other costs related to strategic technology plan 115 240
------ ------
TOTAL $ 285 $1,395
====== ======
The Board of Directors and management analyzed the potential effect of each of
these expenditures prior to approval and believe that these expenditures will
have an overall positive effect on the Company's franchise and stockholder
value, but also realize that the expenditures will most likely depress
profitability ratios in the short-term. The Company also expects that both net
interest income and fee income will increase as a result of the new branches and
new technology enhancements. However, it is not possible to precisely estimate
such revenue increases, if any, at this time. The success of new projects is
dependent upon a number of factors, including, but not limited to, general
economic conditions, regulatory climate, interest rates and the success of the
Company's marketing efforts.
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 increased $3.0 million to $5.6 million for the three
months ended December 31, 1999. Significant cash flows or uses (amounts shown in
parentheses) were as follows:
(In millions)
-----------
Cash provided by operations $ .1
FHLB advances and other borrowings 31.3
Decrease in net deposits (2.2)
Maturities of and repayments on investment securities 7.2
Purchases of investment securities and FHLB stock (19.1)
Net increase in loans (11.2)
Payments to acquire treasury stock (2.7)
Other - net (.4)
---------
Net increase in cash and cash equivalents $ 3.0
=========
10
<PAGE>
See "Comparison of Financial Condition at December 31, 1999 and September 30,
1999" for discussion of significant cash flows.
On December 31, 1999, the Bank was in compliance with its three regulatory
capital requirements as follows:
Amount Percent
------ -------
(Dollars in thousands)
Tangible capital ........................... $50,883 9.7%
Tangible capital requirement ............... 7,838 1.5
Excess over requirement .................... 43,045 8.2
Core capital ............................... $50,883 9.7%
Core capital requirement ................... 20,901 4.0
Excess over requirement .................... 29,982 5.7
Risk based capital ......................... $53,871 16.7%
Risk based capital requirement ............. 25,831 8.0
Excess over requirement .................... 28,040 8.7
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
Like many financial institutions, the Company relies on computers to conduct its
business and information systems processing. Industry experts were concerned
that on January 1, 2000, some computers might not be able to interpret the new
year properly, causing computer malfunctions. Some banking industry experts
remain concerned that some computers may not be able to interpret additional
dates in the year 2000 properly. The Company has operated and evaluated its
computer operating systems following January 1, 2000 and has not identified any
errors or experienced any computer system malfunctions. The Company's management
will continue to monitor its information systems to assess whether the systems
are at risk of misinterpreting any future dates and will develop appropriate
contingency plans to prevent any potential system malfunction or correct any
system failures. The Company has not been informed of any such problem
experienced by its vendors or its customers, nor by any of the municipal
agencies that provide services to the Company.
Nevertheless, it is too soon to conclude that there will not be any problems
arising from the Year 2000 problem, particularly at some of the Company's
vendors. The Company will continue to monitor its significant vendors of goods
and services with respect to Year 2000 problems they may encounter as those
issues may effect the Company's ability to continue operations, or might
adversely affect the Company's financial position, results of operations and
cash flows. The Company does not believe at this time that these potential
problems will materially impact the ability of the Company to continue its
operations, however, no assurance can be given that this will be the case.
The expectations of the Company contained in this section on Year 2000 are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve substantial risks and uncertainties
that may cause actual results to differ materially from those indicated by the
forward looking statements. All forward looking statements in this section are
based on information available to the
11
<PAGE>
Company on the date of this document, and the Company assumes no obligation to
update such forward looking statements. 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.
12
<PAGE>
ITEM 3. Qualitative and Quantitative Disclosure 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 Company's Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended September 30, 1999.
Quantitative Analysis. There have been no material changes from the Quantitative
Analysis information regarding market risk disclosed under the heading
"Management of Interest Rate Risk and Market Risk" in the Company's Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended September 30, 1999. 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 are not
yet available for December 31, 1999, but no significant changes are anticipated
in the NPV as a Percentage of Present Value of Assets.
13
<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 December 31, 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 December
31, 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
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 19, 1999 a special meeting of stockholders of the Company
was held to consider and act upon the approval of the FloridaFirst
Bancorp 1999 Stock Option Plan and the approval of the FloridaFirst
Bank Restricted Stock Plan. With respect to these matters the results
were as follows:
Approval of the Florida First Bancorp 1999 Stock Option Plan
1,402,887 (For) 432,988 (Against) 20,909 (Abstain)
Approval of the FloridaFirst Bank Restricted Stock Plan
1,354,798 (For) 468,667 (Against) 33,208 (Abstain)
ITEM 5. OTHER INFORMATION
On October 12, 1999, the Bank began operating under the name
FloridaFirst Bank (from First Federal Florida) based on the Board of
Directors approval of the name usage at its August 24, 1999 meeting.
On November 19, 1999 the Board of Directors of the Company declared a
dividend distribution of $0.04 per share for the quarter ended
December 31, 1999, based upon the number of shares outstanding as of
December 15, 1999 on the Company's outstanding common stock, payable
on January 3, 2000, to stockholders of record as of December 15, 1999.
On January 28, 2000, the stockholders of the Company reelected Nis H.
Nissen, III to the Board of Directors for a three-year term. In
addition, the Board of Directors elected Mr. Nissen to serve as its
new chairman, succeeding Mr. Charles W. Bovay upon his retirement from
the Board.
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Number
--------------
3(i) Charter for FloridaFirst Bancorp*
3(ii) Bylaws of FloridaFirst Bancorp*
4 Specimen Stock Certificate of FloridaFirst Bancorp*
10.1 Employment Agreement with Gregory C. Wilkes*
10.2 Form of Employment Agreement with Four Employees of the Bank*
10.3 1999 Stock Option Plan**
10.4 Restricted Stock Plan**
13 Annual Report to Security Holders**
21 Subsidiaries of Registrant**
27 Financial Data Schedule (in electronic filing only)
(b) Reports on Form 8-K
On October 25, 1999 the Company filed a current report on Form 8-K
with the Securities and Exchange Commission announcing that it had
adopted a Stock Repurchase Plan with approval by the Office of Thrift
Supervision.
- -------------------
* 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).
** Incorporated by reference to the Registrant's Annual Report of Form
10-K filed with the Commission on December 28, 1999 (File No.
000-25693).
<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: February 11, 2000 By: /s/Gregory C. Wilkes
---------------------------------------------
Gregory C. Wilkes
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 11, 2000 By: /s/Kerry P. Charlet
---------------------------------------------
Kerry P. Charlet
Chief Financial Officer
(Principal Accounting Officer)
16
<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> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 5,612
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 77,648
<INVESTMENTS-CARRYING> 12,686
<INVESTMENTS-MARKET> 12,495
<LOANS> 411,860
<ALLOWANCE> 2,987
<TOTAL-ASSETS> 523,468
<DEPOSITS> 337,063
<SHORT-TERM> 93,717
<LIABILITIES-OTHER> 3,598
<LONG-TERM> 30,000
0
0
<COMMON> 20,963
<OTHER-SE> 38,127
<TOTAL-LIABILITIES-AND-EQUITY> 523,468
<INTEREST-LOAN> 7,581
<INTEREST-INVEST> 1,560
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 9,141
<INTEREST-DEPOSIT> 3,607
<INTEREST-EXPENSE> 5,024
<INTEREST-INCOME-NET> 4,117
<LOAN-LOSSES> 120
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,039
<INCOME-PRETAX> 1,404
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 911
<EPS-BASIC> .17
<EPS-DILUTED> .17
<YIELD-ACTUAL> 3.33
<LOANS-NON> 591
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,941
<CHARGE-OFFS> 100
<RECOVERIES> 26
<ALLOWANCE-CLOSE> 2,987
<ALLOWANCE-DOMESTIC> 2,987
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
