<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-QSB
----------------
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ending March 31, 2000
-----------------
or
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to ____________
Commission File Number 0-25355
------------------
PFSB BANCORP, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Missouri 31-1627743
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification NO.)
P.O. Box 72, Palmyra, MO 63461
- ------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
573-769-2134
- -------------------------------
(Issuer's telephone number)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 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__________
---------
As of May 10, 2000, there were 429,832 shares of the Registrant's Common Stock,
$.01 par value per share, outstanding.
Transitional Small Business Disclosure Format
Yes__________ No X
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<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
FORM 10-QBS
MARCH 31, 2000
<TABLE>
<CAPTION>
INDEX PAGE
- ----- ----
PART I - FINANCIAL INFORMATION
- ------------------------------
<S> <C>
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 1
CONSOLIDATED STATEMENTS OF INCOME 2
CONSOLIDATED STATEMENTS OF CASH FLOWS 3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4-6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 7-9
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 5. OTHER INFORMATION 11
SIGNATURES 12
</TABLE>
-2-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, September
30,
2000 1999
------- -------
ASSETS (Unaudited) (Unaudited)
<S> <C> <C>
Cash (includes interest-bearing deposits of $1,685 and $1,867, respectively) $ 2,041 $ 2,341
Investment securities:
Available-for-sale, at fair value 8,758 9,816
Held-to-maturity (fair value of $7,166 and $7,255, respectively) 7,446 7,484
Mortgage-backed securities held-to-maturity (fair value of $3,315 and $3,574 respectively) 3,398 3,650
Stock in Federal Home Loan Bank of Des Moines ("FHLB") 403 391
Loans receivable, net (allowance for loan losses of $280 at March 31, 2000 and
September 30,1999) 42,538 41,385
------- -------
Accrued interest receivable 601 617
Premises and equipment 843 521
Foreclosed real estate 37 100
Other assets 146 140
------- -------
TOTAL ASSETS $66,211 $66,445
======= =======
LIABILITIES AND EQUITY
LIABILITIES
Deposits 53,295 53,139
Advances from FHLB 3,000 2,500
Advances from borrowers for property taxes and insurance 36 52
Other Liabilities 150 109
------- -------
TOTAL LIABILITIES $56,481 $55,800
EQUITY
Common stock, $.01 par value per share; 5,000,000 authorized, 559,000 issued 6 6
Additional paid-in capital 4,976 4,975
Retained earnings-substantially restricted 6,361 6,317
Unrealized gain on securities, net of taxes (266) (228)
Unearned ESOP shares (402) (425)
Treasury Stock 83,850 shares at cost (945) --
------- -------
TOTAL EQUITY $ 9,730 $10,645
------- -------
TOTAL LIABILITIES AND EQUITY $66,211 $66,445
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
-1-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
2000 1999 2000 1999
(Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Mortgage loans $ 781 $ 773 $1,550 $1,538
Consumer and other loans 9 8 18 17
Interest-bearing deposits 12 34 26 64
Investment securities 268 192 538 380
Mortgage-backed securities 55 39 112 81
------ ------ ------ ------
TOTAL INTEREST INCOME $1,125 $1,046 $2,244 $2,080
INTEREST EXPENSE
Deposits 643 667 1,280 1,353
Advances from FHLB 60 -- 101 8
------ ------ ------ ------
TOTAL INTEREST EXPENSE $ 703 $ 667 $1,381 $1,361
------ ------ ------ ------
NET INTEREST INCOME 422 379 863 719
PROVISION FOR LOAN LOSSES -- -- -- --
------ ------ ------ ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 422 379 863 719
NON-INTEREST INCOME
Service charges and other fees 15 15 27 30
Income (loss) from foreclosed assets (10) 9 (11) 1
Gain on disposal of premises & equipment -- -- -- 52
Gain on sale of investment -- 7 -- 11
Other 5 4 8 6
------ ------ ------ ------
TOTAL NON-INTEREST INCOME 10 35 24 100
NON-INTEREST EXPENSE
Employee salaries and benefits 180 159 349 324
Occupancy costs 36 37 71 70
Advertising 11 10 22 18
Data processing 25 26 47 49
Federal insurance premiums 3 4 11 12
Other 106 77 210 138
------ ------ ------ ------
TOTAL NON-INTEREST EXPENSE 361 313 710 611
------ ------ ------ ------
INCOME BEFORE INCOME TAXES 71 101 177 208
INCOME TAXES 22 38 61 76
------ ------ ------ ------
NET INCOME $ 49 $ 63 $ 116 $ 132
====== ====== ====== ======
INCOME PER SHARE $ 0.11 $ 0.12 $ 0.25 $ 0.26
====== ====== ====== ======
</TABLE>
See accompanying notes to Consolidated Financial Statements
-2-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
<S> <C> <C>
2000 1999
---- ----
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 116 $ 132
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 31 33
Amortization of premiums and discounts (2) (2)
Gain on sale of premises and equipment -- (52)
Gain on sale of foreclosed real estate 10 (9)
Loan fee amortization and payoffs -- (2)
Gain on sale of investments -- (11)
ESOP shares released 23 --
Changes to assets and liabilities increasing (decreasing) cash flows
Accrued interest receivable 16 15
Other assets (6) 21
Other liabilities 64 (14)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 252 111
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities, held-to-maturity -- (4,119)
Proceeds from maturities and calls of investment securities, held-to-maturity 40 3,007
Purchase of investment securities, available-for-sale -- (1,997)
Proceeds from maturities and calls of investment securities, available-for-sale 1,000 4,745
Principal collected on mortgage-backed securities 251 273
(Purchase) Redemption of FHLB stock (12) (17)
Loans originated, net of repayments (808) 756
Purchase of mortgage loans (329) (1,108)
Proceeds from sale of education loans 35 21
Purchase of premises and equipment (353) (44)
Proceeds from sales of foreclosed real estate 3 95
Expenditures on foreclosed real estate (1) --
Proceeds from sale of premises and equipment -- 100
------- -------
NET CASH USED BY INVESTING ACTIVITIES $ (174) $ 1,712
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 156 1,110
Advances from FHLB
Borrowings 3,000 --
Repayments (2,500) (500)
Net increase (decrease) in advances for taxes and insurance (17) (18)
Proceeds from sale of common stock -- 5,060
Loan to ESOP -- (447)
Dividends Paid (72) --
Purchase of treasury stock (945) --
------- -------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES $ (378) $ 5,205
NET INCREASE (DECREASE) IN CASH (300) 7,028
CASH, BEGINNING OF PERIOD 2,341 2,268
------- -------
CASH, END OF PERIOD $ 2,041 $ 9,296
======= =======
</TABLE>
-3-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--Basis of Presentation
- -----------------------------
The accompanying unaudited, consolidated financial statements have been prepared
by the PFSB Bancorp, Inc. (the "Company") in accordance with instructions to
Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation are
reflected in the March 31, 2000, interim financial statements.
The results of operations for the period ended March 31, 2000, are not
necessarily indicative of the operating results for the full year. The
accompanying consolidated financial statements and related notes of PFSB
Bancorp, Inc. should be read in conjunction with the audited financial
statements and related notes included in the Company's Annual Report dated
September 30, 1999.
NOTE B--Formation of Holding Company and Conversion to Stock Form
- -----------------------------------------------------------------
On March 31, 1999, the Company became the holding company for Palmyra Savings
(the "Bank) upon the Bank's conversion from a federally chartered mutual savings
association to a federally chartered capital stock savings bank. The conversion
was accomplished through the sale and issuance by the Company of 559,000 shares
of common stock at $10 per share. Proceeds from the sale of common stock, net
of expenses incurred of $608,237, were $4,981,763, inclusive of $447,200 related
to shares held by Palmyra Savings' Employee Stock Ownership Plan ("ESOP"). The
financial statements included herein have not been restated as a result of the
consummation of the conversion.
NOTE C--Earnings Per Share
- --------------------------
Basic earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted earnings per common share reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. There were no potentially dilutive
securities outstanding as of March 31, 2000.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
2000 1999 2000 1999
---- ---- ---- ----
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Basic earnings per share:
Income available to common shareholders $ 49 $ 63 $ 116 $ 132
===== ===== ===== =====
Average common shares outstanding 434 514 460 514
===== ===== ===== =====
Basic earnings per share $0.11 $0.12 $0.25 $0.26
===== ===== ===== =====
</TABLE>
-4-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE D--Employee Stock Ownership Plan
- -------------------------------------
In connection with the conversion to stock form, Palmyra Savings established an
ESOP for the exclusive benefit of participating employees (all salaried
employees who have completed at least 1000 hours of service in a twelve-month
period and have attained the age of 21). The ESOP borrowed funds from the
Company in an amount sufficient to purchase 44,720 shares (8% of the Common
Stock issued in the stock offering). The loan is secured by the shares
purchased and will be repaid by the ESOP with funds from contributions made by
Palmyra Savings, dividends received by the ESOP and any other earnings on ESOP
assets. Contributions will be applied to repay interest on the loan first, and
then the remainder will be applied to principal. The loan is expected to be
repaid in approximately 10 years. Shares purchased with the loan proceeds are
held in a suspense account for allocation among participants as the loan is
repaid. Contributions to the ESOP and shares released from the suspense account
are allocated among participants in proportion to their compensation relative to
total compensation of all active participants. Participants will vest in their
accrued benefits under the employee stock ownership plan at the rate of 20% per
year, beginning upon the completion of two years of service. Vesting is
accelerated upon retirement, death or disability of the participant.
Forfeitures will be reallocated to remaining plan participants. Benefits may be
payable upon retirement, death, disability or separation from service. Since
Palmyra Savings' annual contributions are discretionary, benefits payable under
the ESOP cannot be estimated.
The Company accounts for its ESOP in accordance with Statement of Position
("SOP") 93-6, Employers Accounting for Employee Stock Ownership Plans.
Accordingly, the debt of the ESOP is eliminated in consolidation and the shares
pledged as collateral are reported as unearned ESOP shares in the consolidated
statements of financial condition. Contributions to the ESOP shall be
sufficient to pay principal and interest currently due under the loan agreement.
As shares are committed to be released from collateral, the Company reports
compensation expense equal to the average market price of the shares for the
respective period, and the shares become outstanding for earnings per share
computations. Dividends on allocated ESOP shares are recorded as a reduction of
retained earnings; dividends on unallocated ESOP shares are recorded as a
reduction of debt and accrued interest.
A summary of ESOP shares at March 31, 2000 is as follows:
Shares committed for release 1,118
Shares released 3,354
Unreleased shares 40,248
---------
TOTAL 44,720
=========
Fair value of unreleased shares $412,542
=========
-5-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE E--Comprehensive Income
- ----------------------------
On October 1, 1998 the Company adopted the provisions of Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income, which established
standards for reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general-purpose
financial statements. For the three and six month periods ended March 31, 2000
and 1999, unrealized holding gains and losses on investments in debt and equity
securities available-for-sale were the Company's only other comprehensive income
component.
Comprehensive income for the three and six month periods ended March 31, 2000
and 1999 is summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
2000 1999 2000 1999
---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C>
Net Income
Other comprehensive income: $ 49 $ 63 $ 116 $ 132
Net unrealized holding gains (losses) on investments
in debt and equity securities available-for-sale 12 8 (38) 13
Adjustments for net securities (gains) losses realized
in net income, net of applicable income taxes -- -- -- --
----- ----- ----- -----
Total other comprehensive income $ 61 $ 71 $ 78 $ 145
===== ===== ===== =====
</TABLE>
-6-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
- --------------------------
This report contains forward-looking statements within the meaning of the
federal securities laws. These statements are not historical facts, rather they
are statements based on the PFSB Bancorp, Inc.'s (the "Company's") current
expectations regarding its business strategies and their intended results and
its future performance. Forward-looking statements are preceded by terms such
as "expects," "believes," "anticipates," "intends," and similar expressions.
Forward-looking statements are not guarantees of future performance. Numerous
risks and uncertainties could cause or contribute to the Company's actual
results; performance and achievements to be materially different from those
expressed or implied by the forward-looking statements. Factors that may cause
or contribute to these differences include, without limitation, general economic
conditions, including changes in market interest rates and changes in monetary
and fiscal policies of the federal government; legislative and regulatory
changes; and other factors disclosed periodically in the Company's filings with
the Securities and Exchange Commission. Because of the risks and uncertainties
inherent in forward-looking statements, readers are cautioned not to place undue
reliance on them, whether included in this report or made elsewhere from time to
time by the Company or on its behalf. The Company assumes no obligation to
update any forward-looking statements.
General
- -------
The Company is a Missouri corporation that was organized for the purpose of
becoming the holding company for Palmyra Savings ("Bank") upon the Bank's
conversion from a federal mutual savings association to a federal stock savings
bank. The Bank's conversion was completed on March 31, 1999. The Bank's
business consists principally of attracting retail deposits from the general
public and using these funds to originate and purchase residential mortgage
loans generally located in Missouri.
The Company's operating results depend primarily on its net interest income,
which is the difference between the income it receives from its loans and
investments, and the interest paid on deposits and borrowings. Non-interest
income and expenses also affect the Company's operating results. Non-interest
income would include such items as loan service fees, service charges, and other
fees. Non-interest expense would include such items as salaries and benefits,
occupancy costs, data processing expenses, and other expenses.
The discussion and analysis included herein covers material changes in results
of operations during the three month and six month periods ended March 31, 2000
and 1999 as well as those material changes in liquidity and capital resources
that have occurred since September 30, 1999.
Financial Condition at March 31, 2000 and September 30, 1999
- ------------------------------------------------------------
Total assets decreased $234,000 to $66.2 million at March 31, 2000. There was a
$300,000 decrease in cash, a $1,058,000 decrease in investment securities, a
$252,000 decrease in mortgage-backed securities, a $1,153,000 increase in loans
receivable, a $63,000 decrease in foreclosed real estate, and a $322,000
increase in premises and equipment. The decrease in investment securities was
mainly due to the maturity of a $1.0 million federal agency security which,
along with a $500,000 increase in FHLB advances, was used to fund the increase
in loans receivable. The increase in premises and equipment was mainly due to
the continued construction of our new branch facility located in Kahoka,
Missouri. The grand opening for the new facility will be June 3, 2000.
Total liabilities increased $681,000 to $56.5 million at March 31, 2000 as
compared to September 30, 1999. The increase was due to a $500,000 increase in
FHLB advances and a $156,000 increase in deposits.
Stockholders equity at March 31, 2000 decreased $915,000 to $9,730,000 or 14.7%
of total assets, as compared to $10,645,000 at September 30, 1999. There was a
$945,000 decrease due to a 15% stock buy-back completed in December 1999, and a
$116,000 increase from six months net income. The remainder of the $86,000
decrease was primarily due to mark to market adjustments to available-for-sale
securities.
Non-performing assets include non-accrual loans, loans 90 or more delinquent and
still accruing interest, foreclosed real estate and other repossessed assets.
The following table presents non-performing assets for the periods indicated.
-7-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
<S> <C> <C>
Non-accrual loans ...................................................... $ 206 $ 138
Loans past due 90 days or more and still accruing interest ............. 0 0
Foreclosed real estate and other repossessed assets .................... 37 100
------ -------
Total non-performing assets ....................................... $ 243 $ 238
</TABLE>
Non-accrual loans at March 31, 2000 and September 30, 1999 consisted primarily
of residential real estate loans.
Results of Operations for the Three Months Ended March 31, 2000 and 1999
- ------------------------------------------------------------------------
Net income for the three months ended March 31, 2000 decreased $14,000 compared
to the three months ended March 31, 1999. Net interest income increased $43,000
or, while non-interest income decreased $25,000. Non-interest expense increased
$48,000, and income taxes decreased $16,000 for the three months ended March 31,
2000 compared to the same period ended December 31, 1999.
Interest income increased $79,000 for the three month period ended March 31,
2000 as compared to the three month period ended March 31, 1999, while interest
expense increased $36,000, providing an increase in net interest income of
$43,000. The increase in interest income was due to an increase in investment
securities of $5.2 million, which was partially offset by a decrease in cash and
interest bearing deposits of $7.3 million, an increase in mortgage-backed
investments of $1.1 million, and an increase in loans receivable of $1.9
million. Investment yield increased from 5.91% to 6.00% and the cost of
deposits increased from 4.74% to 4.91% for the period ended March 31, 2000
compared to the period ended March 31, 1999. The increase in investment yield
resulted from the general increase in market rates between the two periods.
Total non-interest income decreased $25,000 for the three month period ended
March 31, 2000 as compared to the same period ended March 31, 1999. Loss on
foreclosed real estate in the amount of $10,000 for the period ended March 31,
2000, a gain on foreclosed real estate in the amount of $9,000 for the period
ended March 31, 1999 along with a gain on the sale of investments in the amount
of $7,000 for the period ended March 31, 1999 accounted for the difference
between periods.
Total non-interest expense increased $48,000 for the period. Of the increase
$21,000 was due to increased employee salaries and benefits (mainly due to the
ESOP plan implemented as a part of the stock conversion) and most of the
remainder was due to increased audit and professional expenses due to the
increased reporting requirements associated with being a public company.
Results of Operations for the Six Months Ended March 31, 2000 and 1999
- ----------------------------------------------------------------------
Net income for the six months ended March 31, 2000 decreased $16,000 compared to
the six months ended March 31, 1999. Net interest income increased $144,000,
while non-interest income decreased $76,000. Non-interest expense increased
$99,000, and income taxes decreased $15,000 for the six months ended March 31,
2000 compared to the same period ended March 31, 1999.
Interest income increased $164,000 for the six month period ended March 31, 2000
as compared to the six month period ended March 31, 1999, while interest expense
increased $20,000, providing an increase in net interest income of $144,000. The
increase in interest income was due to an increase in investment securities of
$5.2 million, which was partially offset by a decrease in cash and interest
bearing deposits of $7.3 million, an increase in mortgage-backed investments of
$1.1 million, and an increase in loans receivable of $1.9 million. Investment
yield increased from 5.91% to 6.00% and the cost of deposits increased from
4.74% to 4.91% for the period ended March 31, 2000 compared to the period ended
March 31, 1999. The increase in investment yield resulted from the general
increase in market rates between the two periods.
Total non-interest income decreased $76,000 for the six month period ended March
31, 2000 as compared to the same period ended March 31, 1999. Loss on
foreclosed real estate in the amount of $11,000 for the period ended March 31,
2000, along with a gain on the sale of investment securities in the amount of
$11,000 and a one-time profit of $52,000 on the sale of an office building for
the
-8-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
period ended March 31, 1999 accounted for the majority of the decrease between
periods.
Total non-interest expense increased $99,000 for the period. Of the increase
$25,000 was due to increased employee salaries and benefits (mainly due to the
ESOP plan implemented as a part of the stock conversion) and most of the
remainder was due to increased audit and professional expenses due to the
increased reporting requirements associated with being a public company.
Liquidity and Capital Resources
- -------------------------------
Palmyra Savings' primary sources of funds are maturities and prepayments of
investment securities, customer deposits, proceeds from principal and interest
payments on loans and Federal Home Loan Bank of Des Moines advances. While
investment securities maturities and scheduled amortization of loans are a
predictable source of funds, deposit flows, investment securities prepayments
and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition.
Office of Thrift Supervision regulations require savings institutions to
maintain an average daily balance of liquid assets equal to at least 4.0% of the
average daily balance of its net withdrawable deposits and short-term
borrowings. The Bank's actual liquidity ratio at March 31, 2000 was 18.4%.
Palmyra Savings must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to fund loan originations and deposit
withdrawals, to satisfy other financial commitments and to take advantage of
investment opportunities. Palmyra Savings generally maintains sufficient cash
and short-term investments to meet short-term liquidity needs. At March 31,
2000, cash and interest-bearing deposits totaled $2.0 million, or 3.1% of total
assets, and investment securities classified as available-for-sale totaled $8.8
million. At March 31, 2000, the Bank had outstanding advances in the amount of
$3.0 million.
The Bank's primary investing activity is the origination and purchase of one- to
four-family mortgage loans. At March 31, 2000, the Bank had outstanding loan
commitments totaling $560,000 and had undisbursed loans in process totaling
$432,000. Certificates of deposit that are scheduled to mature in less than one
year from March 31, 2000 totaled $26.2 million. Historically, the Bank has been
able to retain a significant amount of its deposits as they mature. Management
believes it has adequate resources to fund all loan commitments from savings
deposits, loan payments, maturities of investment securities and the ability to
obtain advances from the Federal Home Loan Bank.
Office of Thrift Supervision regulations require Palmyra Savings to maintain
specific amounts of regulatory capital. As of March 31, 2000, Palmyra Savings
complied with all regulatory capital requirements with tangible, core and risk-
based capital ratios of 12.82%, 12.82% and 27.04%, respectively. The following
table summarizes Palmyra Savings' capital ratios and the ratios required by
regulation at March 31, 2000.
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual dequacy Purposes Action Provisions
-------------- ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------ ------ ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
As of March 31, 2000
Total Risk-Based Capital greater than greater than
(to Risk Weighted Assets) $8,800 27.93% or equal to $2,521 8.0% or equal to $3,151 10.0%
Tier 1 Capital greater than greater than
(to Risk Weighted Assets) $8,520 27.04% or equal to $1,260 4.0% or equal to $1,891 6.0%
Tier 1 Capital greater than greater than
(to Adjusted Assets) $8,520 12.82% or equal to $1,994 3.0% or equal to $3,324 5.0%
Tangible Capital greater than greater than
(to Adjusted Assets) $8,520 12.82% or equal to $ 997 1.5% or equal to N/A N/A
</TABLE>
-9-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor Palmyra Savings is a party to any material legal
proceedings at this time. From time to time Palmyra Savings is involved in
various claims and legal actions arising in the ordinary course of business.
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
The 2000 Annual Meeting of Stockholders was held on January 27, 2000. The
following matters were submitted to the stockholders:
1. Election of two directors to serve for a term of one year, two directors to
serve for a term of two years and three directors to serve for a term of
three years.
Directors elected at the meeting:
One-Year Term (to expire in 2001):
-------------
Number of Shares
--------------------------
For Withheld
--------- ------------
L. Edward Schaeffer ............... 392,145 11,025
Robert M. Dearing ................ 393,170 10,000
Two-Year Term (to expire in 2002):
-------------
Number of Shares
--------------------------
For Withheld
--------- ------------
Glenn J. Maddox ................... 393,170 10,000
Albert E. Davis ................... 393,170 10,000
Three Year Term (to expire in 2003):
---------------
Number of Shares
--------------------------
For Withheld
--------- ------------
James D. Lovegreen ................ 392,970 10,200
Eldon R. Mette .................... 393,170 10,000
Donald L. Slavin .................. 393,170 10,000
<TABLE>
<CAPTION>
Number of Shares
---------------------------------------------
For Against Abstained Non-Vote
-------- ------- --------- ----------
<S> <C> <C> <C> <C>
2. The approval of the PFSB Bancorp, Inc.
2000 Stock-Based Incentive Plan ........................ 310,144 24,360 1,500 73,366
3. The ratification of Moore, Horton & Carlson,
P.C. as independent auditors of the Company
For the fiscal year ending September 30, 2000........... 390,420 4,000 8,750 0
</TABLE>
-10-
<PAGE>
PFSB BANCORP, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
(Continued)
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
3.1 Articles of Incorporation of PFSB Bancorp, Inc.*
3.2 Bylaws of PFSB Bancorp, Inc.*
10.1 Employment Agreement with Eldon R. Mette * *
10.2 Employment Agreement with Ronald L. Nelson * *
10.3 PFSB Bancorp, Inc. 2000 Stock-Based Incentive Plan * * *
27.0 Financial Data Schedule
b. Reports on Form 8-K
None
* Incorporated by reference from the Form SB-2 (Registration No. 333-69191),
as amended, as filed on December 18, 1998.
* * Incorporated by reference from the Form 10-QSB for the quarter ended March
31, 1999, as filed on May 17, 1999.
* * * Incorporated by reference from the Definitive Proxy Statement for the
2000 Annual Meeting of Stockholders, as filed on December 15, 1999.
-11-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PFSB Bancorp, Inc.
Date: May 15, 2000 By:/s/ Eldon R. Mette
----------------------------------------
Eldon R. Mette
President and Chief Executive Officer
Date: May 15, 2000 By:/s/ Ronald L. Nelson
----------------------------------------
Ronald L. Nelson
Vice President, Treasurer
and Secretary
-12-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS FOR PFSB BANCORP, INC. FOR THE SIX MONTHS
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
UNAUDITED FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 356
<INT-BEARING-DEPOSITS> 1,685
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,758
<INVESTMENTS-CARRYING> 7,446
<INVESTMENTS-MARKET> 0
<LOANS> 42,538
<ALLOWANCE> 280
<TOTAL-ASSETS> 66,211
<DEPOSITS> 53,295
<SHORT-TERM> 3,000
<LIABILITIES-OTHER> 186
<LONG-TERM> 0
0
0
<COMMON> 6
<OTHER-SE> 9,724
<TOTAL-LIABILITIES-AND-EQUITY> 66,211
<INTEREST-LOAN> 1,568
<INTEREST-INVEST> 676
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,244
<INTEREST-DEPOSIT> 1,280
<INTEREST-EXPENSE> 1,381
<INTEREST-INCOME-NET> 863
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 710
<INCOME-PRETAX> 177
<INCOME-PRE-EXTRAORDINARY> 116
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 116
<EPS-BASIC> 0.25
<EPS-DILUTED> 0.25
<YIELD-ACTUAL> 1.32
<LOANS-NON> 206
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 280
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 280
<ALLOWANCE-DOMESTIC> 233
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 47
</TABLE>
