SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 for the Quarterly period ended
March 31, 2000.
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
_______to ______.
No. 001-15351
(Commission File Number)
JADE FINANCIAL CORP.
(Exact Name OF Registrant as Specified in its Charter)
Pennsylvania 23-3002586
State of Incorporation) (IRS Employer ID Number
213 W. Street Road
Feasterville, PA 19053
(Address of principal executive offices)
(215) 322-9000
(Registrant'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 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
Number of Shares Outstanding
as of March 31, 2000
1,872,923
Outstanding Shares
COMMON STOCK ($.01 PAR VALUE)
(Title of Class)
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Financial Statements (Unaudited)
Consolidated Statement of Financial Condition
as of March 31, 2000 and December 31, 1999
Consolidated Statement of Income for the Three
Months Ended March 31, 2000 and 1999.
Consolidated Statement of Cash Flows for the Three
Months Ended March 31, 2000 and 1999.
Notes to Consolidated Financial Statements
Management's discussion and Analysis of Financial
Condition and Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other information
PART III. SIGNATURES
PART 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JADE FINANCIAL CORP.
Consolidated Statement of Financial Condition
ASSETS March 31, December 31,
2000 1999
(In Thousands) (Unaudited) (Audited)
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 11,721 $ 6,630
Interest bearing deposits in other financial
institutions 155 47
Federal Funds 11,217 6,565
Restricted cash 0 0
Total cash and cash equivalents $ 23,093 $ 13,242
Investment securities, available-for-sale 40,963 40,858
Mortgage-backed securities available-for-sale 8,352 8,859
Investment securities held-to-maturity 0 0
Mortgage-backed securities held-to-maturity 3,919 4,314
(fair value of $3,820 and $4,209)
BankZip.Com (subordinate debenture) 2,500 2,500
Allowance for Investment Losses (75) (75)
Loans receivable, net 116,269 114,081
Property, equipment and leasehold
improvements, net of accumulated depreciation 1,921 1,890
Federal Home Loan Bank stock, at cost 834 834
Accrued interest receivable 1,098 802
Other Real Estate Owned (OREO) 17 0
Reorganization costs, net 152 162
Bank Owned Life Insurance - BOLI 10,152 10,021
Deferred tax asset, net 1,307 1,177
Prepaid expenses and other assets 1,190 911
TOTAL ASSETS $ 211,692 $ 199,576
=============== ===========
LIABILITIES AND EQUITY
LIABILITIES:
Deposits $ 168,148 $ 156,124
Advances from FHLBank 15,000 15,000
Advances from borrowers for taxes 678 618
Accounts payable and accrued expenses 535 594
Total liabilities $ 184,361 $ 172,336
EQUITY:
Common Stock, $.01 par value, 1872,923 shares 19 19
issued and outstanding at 3/31/00
Additional Paid-in Capital 14,142 14,130
Contra Equity - unearned common stock acquired (1,015) (1,044)
by the Employee Stock Ownership Plan
Commitments and contingencies (Note 16) 0 0
Retained Earnings, (See Notes 11 and 12) 15,993 15,853
Accumulated other comprehensive income (loss) (1,808) (1,718)
Total Equity $ 27,331 $ 27,240
TOTAL LIABILITIES AND EQUITY $ 211,692 $ 199,576
=============== ===========
</TABLE>
<TABLE>
<CAPTION>
JADE FINANCIAL CORP.
CONSOLIDATED STATEMENT OF INCOME
Three months ended
March 31,
2000 1999
(Unaudited)
(In thousands)
<S> <C> <C>
INTEREST INCOME:
Interest on loans $ 2,361 $ 2,154
Investment and mortgage -backed securities 875 645
Interest -earning deposits 7 15
Federal Funds 100 128
Total interest income $ 3,343 $ 2,942
INTEREST EXPENSE:
Interest on deposits $ 1,361 $ 1,325
Interest on borrowed funds 205 0
Total interest expense $ 1,566 $ 1,325
Net Interest Income $ 1,777 $ 1,617
PROVISION FOR POSSIBLE LOAN LOSSES 315 135
Net interest income after provision $ 1,462 $ 1,482
for possible loan losses
NON INTEREST INCOME:
Loan fees $ 12 $ 13
Service charges 134 112
Other Income 297 99
Security gains or losses 0 0
Total noninterest income $ 443 $ 224
NON INTEREST EXPENSES:
Compensation and employee benefits $ 917 $ 733
Office and occupancy costs 441 410
Printing and Postage 62 62
Loan servicing 31 44
Professional fees 78 43
Bank and MAC charges 165 176
Advertising, marketing and promotions 47 42
Insurance Expense 11 8
Total noninterest expenses $ 1,752 $ 1,518
INCOME BEFORE PROVISION FOR INCOME TAXES $ 153 $ 188
Provision for federal and state income taxes
Current 98 60
Deferred (85) (2)
Total income tax provision $ 13 $ 58
NET INCOME $ 140 $ 130
========= ========
</TABLE>
JADE FINANCIAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
--------- ----------
2000 1999
--------- ----------
Unaudited Unaudited
(Dollars in
thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 140 $ 130
------- -------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Amortization of premium/discount on invest-
ments and mortgage-backed securities 24 44
Depreciation and amortization 108 97
(Gain) loss on sale of investment securities - -
(Premium) discount on first mortgage sales - -
(Gain) loss on sale/disposal of asset - -
Provision for losses on loans 315 135
Change in assets and liabilities:
(Increase) decrease in deferred tax asset (130) (2)
(Increase) decrease in accrued interest
receivable (296) (318)
(Increase) decrease in BOLI asset (131) -
(Increase) decrease in prepaid expenses
and other assets (296) (165)
(Increase) decrease in accounts payable
and accrued expenses (59) (35)
------- -------
Net cash provided by operating activities (325) (114)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of FHLB Stock - -
Purchase of investment securities, available-
for-sale (1,000) (7,128)
Sales of investment securities, available-
for-sale - -
Mortgage-backed security purchases, available-
for-sale - (2,547)
Mortgage-backed security sales - -
Mortgage-backed security maturities and
principal repayments 1,197 1,065
Maturities and principal repayments of invest-
ment securities, available-for-sale 527 4,297
(Increase) decrease in total loans receivable,
net (2,503) (2,420)
Proceeds from sale of real estate owned net
of expenses - -
Proceeds from sale of loans - -
Proceeds from sale of equipment - -
Capital expenditures (129) (14)
Decrease in Share Insurance Fund 0 29
Net cash provided by (used in) investing
activities (1,908) (6,718)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in advances, net $12,024 $ 6,541
Net increase (decrease) in advances FHLB - -
Net increase (decrease) in advances for
borrowers 60 53
------- -------
Net cash provided by (used in) financing
activities 12,084 6,594
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS 9,851 (238)
Cash and cash equivalents, beginning of year 13,242 18,351
------- -------
CASH AND CASH EQUIVALENTS, END OF YEAR $23,093 $18,113
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest on deposits $ 1,361 $ 1,325
Income Taxes $ - $ 177
Noncash activities:
Increase in unrealized loss on investment
mortgage-backed securities available-for-
sale, net of taxes $ 90 $ 310
======= =======
</TABLE>
JADE FINANCIAL CORP.
Notes To Consolidated Financial Statements
(UNAUDITED)
1. BASIS OF PRESENTATION:
JADE Financial Corp. (the "Holding Company") was
incorporated under Pennsylvania law in July 1998 by IGA Federal
Savings in connection with the conversion of the Company from a
savings institution to a federally chartered capital stock
savings bank, the issuance of the Company's stock to the Holding
Company and the offer and sale of the Holding Company's common
stock by the Holding Company (the "Conversion"). Upon
consummation of the Conversion on October 4, 1999, the Holding
Company became the holding company for the Company. See Note 2
for a more detailed description of the mutual to stock
conversion. No pro forma effect has been given to the sale of
the Holding Company's common stock in the Conversion.
The accompanying consolidated financial statements of the
Holding Company have been prepared 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.
However, such information reflects all adjustments (consisting
solely of normally recurring adjustments) which are, in the
opinion of management, necessary for fair statement of results
for the interim periods.
The results of operations for the three months ended
March 31, 2000 are not necessarily indicative of the results to
be expected for the year ending December 31, 2000. The
consolidated financial statements and notes thereto should be
read in conjunction with the audited financial statements and
notes thereto for the year ended December 31, 1999, contained in
the Holding Company's Form 10-KSB filed with the Securities
Exchange Commission on March 31, 2000.
2. CONVERSION TO CAPITAL STOCK FORM OF OWNERSHIP:
On May 26, 1999, the Board of Directors of the Company
adopted a Plan of Conversion to convert from a federal mutual
savings bank to a federal capital stock savings bank. The
conversion was accomplished through the formation of the Holding
Company in July, 1998, the adoption of a federal stock charter,
and the sale of all of the Company's stock to the Holding Company
on October 4, 1999.
A subscription offering ("offering") of the shares of common
stock of the Holding Company was conducted whereby the shares
were offered initially to eligible account holders, the Company's
Employee Stock Ownership Plan ("ESOP"), supplemental eligible
account holders and other members of the Company (collectively
"subscribers"). During the offering, subscribers submitted
orders for common stock along with full payment for the order in
either cash, by an authorization to withdraw funds for payment
from an existing deposit account at the Company upon issuance of
stock, or a combination of cash and account withdrawal.
Subscription funds received in connection with the offering were
placed in segregated savings accounts in the Company. For these
orders that were to be funded through account withdrawals, the
Company placed "holds" on those accounts, restricting withdrawal
of any amount which would reduce the account balance below the
amount of the order. At September 30, 1999, the Company held
$12.0 million in subscription segregated savings accounts and had
restricted withdrawals from deposit accounts in the amount of
$2.0 million.
The Holding Company issued 1,872,923 shares in connection
with the Conversion. Gross proceeds from the offering were
$14,500,024, which includes the $8.00 value of the 145,000 shares
issued to the IGA Employee Stock Ownership Plan and 60,420 shares
sold to the Company for transfer to the IGA Charitable
Foundation.
The Company issued all its outstanding capital stock to the
Holding Company in exchange for approximately one-half of the net
proceeds. The Holding Company accounted for the purchase in a
manner similar to a pooling of interests whereby assets and
liabilities of the Company maintain their historical cost basis
in the consolidated company.
3. EARNINGS PER COMMON SHARE:
Earnings per common share for the quarter ended March 31,
1999 is not applicable, as IGA Federal Savings' (the Bank's)
conversion from mutual-to-stock form was not completed until
October 4, 1999. Presented below is information with respect to
the calculation of basic and diluted earnings per share for the
three months ended March 31, 2000.
Three Months Ended
March 31, 2000
Net Income $140,000
Weighted average number of common
shares outstanding 1,872,923
Average ESOP shares not committed
to be released (130,500)
Weighted average number of
common shares outstanding for basic
earnings per share computation purposes 1,742,423
Dilutive effects of employee stock options 0
Weighted average shares and common share
equivalents 1,742,423
=========
Basic earnings per share $ 0.08
Diluted earnings per share $ 0.08
4. COMPREHENSIVE INCOME:
Statement of Financial Accounting Standards (SFAS) No. 130,
Reporting Comprehensive Income, will be effective for the Bank
for the year beginning July 1, 1998, and establishes reporting
and display of comprehensive income in the financial statements.
Comprehensive income represents net earnings and certain amounts
reported directly in stockholders' equity, such as the net
unrealized gain or loss on available-for-sale securities. The
Bank adopted SFAS No. 130 effective June 30, 1998.
The Company's comprehensive income for the three months
ended March 31, 2000 and March 31, 1999 are as follows:
Three Months Ended
March 31,
2000 1999
(Dollars in Thousands)
Net income $140 $ 130
Unrealized holding gains (losses)
arising during the period net
of tax effect ( 90) ( 310)
COMPREHENSIVE INCOME $ 50 $(180)
5. NEW ACCOUNTING STANDARDS:
Statement of Financial Accounting Standards (SFAS) No. 130,
Reporting Comprehensive Income, is effective for the Bank for the
period beginning July 1, 1998, and establishes reporting and
display of comprehensive income in the financial statements.
Comprehensive income represents net earnings and certain amounts
reported directly in stockholders' equity, such as the net
unrealized gain or loss on available-for-sale securities. The
Bank adopted SFAS No. 130 effective June 30, 1998.
SFAS No. 133, Accounting for Derivation Instruments and
Hedging Activities, will be effective for the Bank for years
beginning July 1, 1999. The Bank currently has no activity
subject to SFAS 133.
In October 1998, the FASB issued SFAS No. 134, Accounting
for Mortgage-Backed Securities Retained after the Securitization
of Mortgage Loans Held-for-Sale by a Mortgage Banking Enterprise.
SFAS No. 134 changes the way mortgage banking firms account for
certain securities and other interests they retain after
securitizing mortgage loans that were held-for-sale. Under
current practice, a bank that securitizes credit card receivables
has a choice in how it classifies any retained securities based
on its intent and ability to hold or sell those investments.
SFAS No. 134 gives the mortgage banking firms the opportunity to
apply the same intent-based accounting that is applied by other
companies. SFAS No. 134 will be effective for the fiscal quarter
beginning after December 15, 1998. Management of the Bank
anticipates that the implementation of SFAS No. 134 will not have
a material impact on the Bank's financial condition or results of
operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth certain selected financial
ratios for the Company at or for the period ended, March 31,
2000:
<TABLE>
<CAPTION>
SELECTED FINANCIAL RATIOS
At or For the
Three months ended
March 31,
Selected Financial Condition Data: 2000 1999
<S> <C> <C>
Performance Ratios: (1)
Return on assets (ratio of net income to average total assets) 0.28% 0.30%
Return on equity (ratio of net income to average equity) 2.09% 3.41%
Earnings per common share $ 0.08 -
Interest rate spread (2) 3.77% 3.85%
Net interest margin (3) 3.96% 3.97%
Operating expenses to average total assets 3.52% 3.50%
Average interest-earning assets to average
interest-bearing liabilities 105.45% 103.77%
Asset Quality Ratios:
Non-performing assets to total assets at end of period 0.05% 0.11%
Allowance for loan losses to non-performing assets 1385.71% 549.75%
Allowance for loan losses to gross loans receivable 1.32% 1.05%
Capital Ratios:
Equity to total assets at end of period 12.91% 8.51%
Average equity to average assets 13.47% 8.79%
Book value per share $ 14.59 -
Other Data:
Number of full service offices 5 5
<FN>
(1) Ratios for the three month periods are
annualized where appropriate
(2) Difference between weighted average yield on interest-
earning assets and weighted average cost of interest-bearing liabilities
(3) Net interest as a percentage of average interest-earning assets
</TABLE>
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2000 AND
DECEMBER 31, 1999
Our total assets increased $12.1 million from $199.6 million
to $211.7 million or 6.06% from December 31, 1999 to March 31,
2000. Our total liabilities increased $12.1 million from $172.3
million to $184.4 million or 7.02% from December 31, 1999 to
March 31, 2000. We had $15.0 million borrowed from the Federal
Home Loan Bank as of March 31, 2000. The increase in assets and
liabilities at March 31, 2000 compared to December 31, 1999 is
primarily attributable to a temporary increase in deposit
balances. In mid March, Peco Energy paid performance bonuses to
their employees who in turn deposited approximately $8.0 million
in savings, checking and money market accounts at IGA Federal
Savings. Due to the increase in deposit balances, Cash and Cash
equivalents increase $9.9 million from $13.2 million at
December 31, 1999 to $23.1 million at March 31, 2000.
Total loans increase $2.5 million from $115.3 million to
$117.8 million or 2.17 % from December 31, 1999 to March 31,
2000. The increase was primarily the result of increased loan
orginations as illustrated by the following loan composition
table:
<TABLE>
<CAPTION>
At March 31, At December 31,
2000 1999
Amount Percent Amount Percent Variance %Change
<S> <C> <C> <C> <C> <C> <C>
Real Estate Loans:
One- to four-family $44,373 37.65% $43,434 37.66% $ 939 2.16%
Commercial 3,422 2.90% 2,996 2.60% $ 426 14.22%
Total real estate loans 47,795 40.56% 46,430 40.25% $1,365 2.94%
Consumer Loans:
Home equity 24,948 21.17% 24,172 20.96% $ 776 3.21%
Automobile 25,315 21.49% 24,406 21.16% $ 931 3.81%
Credit cards 9,655 8.19% 10,955 9.50% $(1,300) -11.87%
Signature loans 5,923 5.03% 5,414 4.69% $ 509 9.40%
Other 2,404 2.04% 2,498 2.17% $ (73) -2.92%
Commercial 1,764 1.50% 1,469 1.27% $ 295 20.08%
Total consumer loans 70,009 59.44% 68,914 59.75% $1,138 1.65%
Total loans 117,804 100.00% 115,344 100.00% $2,503 2.17%
======= ====== ======= ====== ====== =====
Less:
Deferred fees and discounts 17 21
Allowance for losses (1,552) (1,284)
Total loans receivable, net $116,269 $114,081
======== ========
</TABLE>
Our total equity increased from $27.2 million to $27.3
million or .37% from December 31, 1999 to March 31, 2000 due to
an increase in retained earnings. Accumulated and other
comprehensive income increased slightly from ($1.7) million at
December 31, 19999 to ($1.8) million at March 31, 2000.
Asset Quality
The following table sets forth non-performing assets as of
March 31, 2000 and December 31, 1999 (Dollars in thousands):
<TABLE>
<CAPTION>
NonPerforming Assets
At March 31, At December 31,
2000 1999
<S> <C> <C>
Non-accruing loans:
One-to four-family 86 73
Home equity 0 55
Automobile 1 21
Credit cards 8 11
Signature loans 0 2
Commercial 0 32
Other 0 0
Total 95 194
Accruing loans delinquent more
than 90 days:
One-to four-family 0 0
Home equity 0 0
Automobile 0 0
Credit cards 0 0
Signature loans 0 0
Other 0 0
Total 0 0
Foreclosed assets 17 17
Renegotiated loans 0 0
Total non-performing assets $112 $211
Non-performing assets as a percent of 0.10% 0.18%
total loans
Non-performing assets as a percent of 0.05% 0.11%
total assets
</TABLE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND MARCH 31, 1999.
The following table presents the total dollar amounts of
interest income and interest expense on the indicated amounts of
average interest-earning assets or interest-bearing liabilities
together with the weighted average interest rates for the three
month periods ended March 31, 2000 and 1999. Average balance
calculations were based on daily balances.
<TABLE>
<CAPTION>
3 months ended March 31, 3 months ended March 31,
2000 1999
Average Interest (Annualized) Average Interest (Annualized)
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
(Dollars in Thousands) (Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable $116,095 $2,361 8.13% $105,990 $2,154 8.13%
Investments 63,428 982 6.19% 57,002 788 5.53%
Total earning assets 179,523 3,343 7.45% 162,992 2,942 7.22%
Non-interest earning assets 19,776 10,366
Total assets $199,299 $173,358
========== =========
Interest-bearing liabilities:
Savings deposits $69,007 350 2.03% $70,861 377 2.13%
NOW accounts 10,183 0 0.00% 10,167 0 0.00%
Money market accounts 9,106 101 4.44% 10,144 77 3.04%
Certificates of deposit 68,269 910 5.33% 65,899 871 5.29%
Other notes payable - FHLB 13,681 205 5.99% _________ _______
Total interest-bearing liabilities 170,246 1,566 3.68% 157,071 1,325 3.37%
Non-interest bearing liabilities 2,205 1,043
Total liabilities 172,451 158,114
Equity 26,848 15,244
Total liabilities and equity $199,299 $173,358
========== =========
Net interest-earning assets $9,277 $5,921
========== =========
Net interest spread $1,777 3.77% $1,617 3.85%
======= ======= ======= =======
Net interest margin 3.96% 3.97%
======= =======
Ratio of average interest-earning assets
to average interest-bearing liabilities 105.45% 103.77%
========= ========
</TABLE>
Rate and Volume Analysis
<TABLE>
<CAPTION>
For the three months ended March 31,
2000 vs. 1999 1999 vs. 1998
Increase (decrease due to Total Increase (decrease) due to Total
Rate/ Increase Rate/ Increase
Rate Volume Volume (Decrease) Rate Volume Volume Decrease)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loan receivable $6 $821 ($620) $207 ($487) $763 ($218) $58
Investments 378 355 (539) 194 220 168 (288) 100
Total earning assets 384 1,176 (1,159) 401 (267) 931 (506) 158
Interest-bearing liabilities:
Savings deposits (70) (39) 82 (27) (313) 115 143 (55)
Checking accounts 0 0 0 0 0 0 0
Money market accounts 142 (32) (86) 24 (63 63 (3) (3)
Certificates of deposit 30 125 (116) 39 (194 519 (252) 73
Other notes payable-FHLB 0 0 205 205 0 0 0 0
Total interest-bearing 102 54 85 241 (570) 697 (112) 15
liabilities
Change in net interest $282 $1,122 ($1,244) $160 $303 $234 ($394) $143
income
</TABLE>
Net Income:
Net income for the three months ended March 31, 2000 was
$140,000. Net income for the comparable period in 1999 was
$130,000. The increase in the current period when compared to
the prior period was due to a significant increase in lending
from the prior period as average loans increased by $10.1 million
or 9.52% from $106.0 million for the three months ended March 31,
1999 to $116.1 million for the three months ended March 31, 2000.
However, we did experience a decrease of approximately 8 basis
points in our net interest spread because the cost of our
deposits increased more rapidly than the rates we earned on our
loans and investments.
Core earnings, defined as pretax earnings adjusted for
securities sales transactions and unusual or non-recurring
expense or income items, were $153,000 for the three months ended
March 31, 2000 compared to $188,000 in the prior year period.
The following table summarizes the components of adjusted
pretax core earnings:
Three Months Ended
March 31,
2000 1999
(Dollars in Thousands)
Net interest income $1,777 $1,617
Provision for loan losses 315 135
Noninterest income excluding
gains and losses 443 224
Noninterest expense 1,752 1,518
ADJUSTED PRETAX CORE EARNINGS $ 153 $ 188
INTEREST INCOME. Total interest income increased $401,000
or 13.63% from $2.9 million for the first quarter of 1999
compared to $3.3 million for the first quarter of 2000. This
increase resulted from an increase in average earning assets for
the comparable periods.
NET INTEREST INCOME. Net interest income increased $160,000
or 9.89% from $1.6 million for the first quarter of 1999 compared
to $1.8 million for the first quarter of 2000. This increase is
attributable to a higher volume of loan originations and an
increase in the average investment balances.
INTEREST EXPENSE. Total interest expense increased $241,000
for the first quarter of 2000 compared to the first quarter of
1999. This increase was mainly attributable to a general
interest rate environment thereby increasing our cost on borrowed
funds.
PROVISION FOR LOAN LOSSES. The provision for loan losses
increased by $180,000 or 133.33% for the first quarter of 2000
compared to the first quarter of 1999. This increase reflects
anticipated changes in the company's loan portfolio from that of
a traditional consumer focused credit union to a more diversified
banking company. We do not foresee the need to increase the
provision significantly in the future. During the three months
ended March 31, 2000, the Company had charge-offs of $92,284 and
recoveries of $45,104. At March 31, 2000, the Company's
allowance for loan losses totaled $1.6 million which was 1.32% of
total loans.
NONINTEREST INCOME. Noninterest income increased $219,000
or 97.77% to $443,000 for the three months ended March 31, 2000
from $224,000 for the three months ended March 31, 1999. The
increase was due primarily to income from the Bank Owned Life
Insurance (BOLI), title insurance income, and increased fees from
debit card transactions.
NONINTEREST EXPENSE. Total noninterest expense increased
$234,000 or 15.42% to $1.8 million for the three months ended
March 31, 2000 from $1.5 million for the three months ended
March 31, 1999. This increase resulted primarily from an
increase in compensation and employee benefits due to normal
salary increases and the expense of the Employee Stock Ownership
Plan ("ESOP") as well as an increase in professional fees.
FEDERAL INCOME TAXES. The provision for federal income
taxes decreased relative to the amount of taxable income for the
period.
Part II. OTHER INFORMATION
Item 1. Legal proceedings - None
Item 2. Change in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See attached Exhibit Index
(b) Reports on Form 8-K - None
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.
JADE FINANCIAL CORP.
(Registrant)
By:/s/Dorothy M. Bourlier
June 6, 2000 Dorothy M. Bourlier
Chief Financial Officer
EXHIBIT INDEX
3.1 Articles of JADE FINANCIAL CORP (incorporated by
reference to registration statement 333-80183 on
Form SB-2)
3.2 Bylaws of JADE FINANCIAL CORP (incorporated by
reference to registration statement 333-80183 on
Form SB-2)
10.1 JADE FINANCIAL CORP Management Recognition Plan
(incorporated by reference to registration statement
333-80183 on Form SB-2)
10.2 JADE FINANCIAL CORP Stock Compensation Plan (incorporated
by reference to registration statement 333-80183 on
Form SB-2)
10.3 JADE FINANCIAL CORP - Employee Stock Ownership Plan
(incorporated by reference to registration statement
333-80183 on Form SB-2)
27 Financial Data Schedule*
* Filed herewith
