UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
-------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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OTS DOCKET NUMBER 05016
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PULASKI BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FEDERALLY-CHARTERED 22-1402632
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
130 Mountain Avenue, Springfield, New Jersey 07081
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 973-564-9000
-----------------------------
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. (1) YES X NO (2) YES NO X
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of November 1, 1999, 2,108,088 common shares, $.01 par value, were
outstanding.
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
Number
-------------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Consolidated Financial Condition as of
September 30, 1999 and December 31, 1998 (Unaudited) 1
Statements of Consolidated Income for the Nine and Three
Months Ended September 30, 1999 and 1998 (Unaudited) 2
Statements of Consolidated Comprehensive Income for the
Nine and Three Months Ended September 30, 1999 and 1998 3
(Unaudited)
Statements of Consolidated Cash Flows for the Nine
Months Ended September 30, 1999 and 1998 (Unaudited) 4 - 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 14
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 15 - 16
PART II OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2. Changes in Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
</TABLE>
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1999 1998
- ------ ------------- -------------
<S> <C> <C>
Cash and amounts due from depository institutions $ 2,787,717 $ 2,336,949
Interest-bearing deposits 294,892 2,377,613
Federal funds sold 4,350,000 18,650,000
------------- -------------
Cash and cash equivalents 7,432,609 23,364,562
Term deposits 197,000 197,000
Trading account securities 2,813,500 --
Securities available for sale 5,829,794 5,642,498
Investment securities held to maturity 6,946,850 6,946,353
Mortgage-backed securities held to maturity 74,555,324 55,728,490
Loans receivable 127,245,673 100,894,180
Real estate owned 49,822 130,626
Premises and equipment 4,059,399 3,862,532
Federal Home Loan Bank of New York stock 1,900,000 1,446,200
Accrued interest receivable 1,228,745 971,566
Other assets 705,292 607,896
------------- -------------
Total assets $ 232,964,008 $ 199,791,903
============= =============
Liabilities and stockholders' equity
Liabilities
Deposits $ 169,714,773 $ 174,808,024
Advances from Federal Home Loan Bank of New York 38,000,000 --
Other borrowed money -- 454,805
Advance payments by borrowers for taxes 849,518 773,361
Other liabilities 683,072 950,124
------------- -------------
Total Liabilities 209,247,363 176,986,314
------------- -------------
Stockholders' Equity
Preferred stock; authorized 2,000,000 shares; issued
and outstanding-none -- --
Common stock; par value $.01; authorized 13,000,000
shares; 2,108,088 shares issued and outstanding 21,081 21,081
Paid-in-capital 9,843,274 9,854,730
Retained earnings - substantially restricted 14,701,179 14,029,016
Unearned Incentive Plan Award shares (466,790) (581,054)
Unearned Employee Stock Ownership Plan shares (333,459) (495,144)
Accumulated other comprehensive income - Unrealized (loss) on
Securities available for sale, net (48,640) (23,040)
------------- -------------
Total stockholders' equity 23,716,645 22,805,589
------------- -------------
Total liabilities and stockholders' equity $ 232,964,008 $ 199,791,903
============= =============
</TABLE>
See notes to financial statements.
1
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income:
Loans $ 6,592,823 $ 6,403,365 $ 2,345,111 $ 2,136,262
Mortgage-backed securities held to maturity 2,702,156 2,481,834 996,242 843,627
Investment securities held to maturity 296,085 378,889 108,540 82,522
Securities available for sale 227,296 232,265 78,064 78,311
Other interest-earning assets 540,624 610,880 157,352 241,255
------------ ------------ ------------ ------------
Total interest income 10,358,984 10,107,233 3,685,309 3,381,977
------------ ------------ ------------ ------------
Interest expense:
Deposits 5,656,842 5,642,200 1,848,717 1,910,668
Advances and other borrowed money 298,491 148,540 280,543 12,486
------------ ------------ ------------ ------------
Total interest expense 5,955,333 5,790,740 2,129,260 1,923,154
------------ ------------ ------------ ------------
Net interest income 4,403,651 4,316,493 1,556,049 1,458,823
Provision for loan losses 86,000 89,000 25,000 26,000
------------ ------------ ------------ ------------
Net interest income after provision for loan losses 4,317,651 4,227,493 1,531,049 1,432,823
------------ ------------ ------------ ------------
Non-interest income:
Fees and service charges 130,297 113,540 58,062 37,858
Trading account (loss) income (30,935) 68,753 (34,483) 13,125
Gain (loss) on real estate owned 599 -- (581) --
Gain on sale of branch 422,554 -- 422,554 --
Miscellaneous 14,224 13,560 4,886 4,221
------------ ------------ ------------ ------------
Total non-interest income 536,739 195,853 450,438 55,204
------------ ------------ ------------ ------------
</TABLE>
(continued)
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Non-interest expenses:
Salaries and employee benefits 1,957,066 1,875,490 680,338 631,573
Occupancy expense of premises 310,595 218,459 116,188 75,788
Equipment 279,570 458,003 93,002 121,012
Advertising 62,228 7,274 5,243 2,884
Loss on foreclosed real estate -- 5,890 -- 2,655
Federal insurance premium 75,810 71,708 25,101 24,480
Miscellaneous 696,833 605,075 228,005 195,087
------------ ------------ ------------ ------------
Total non-interest expenses 3,382,102 3,241,899 1,147,877 1,053,479
------------ ------------ ------------ ------------
Income before income taxes 1,472,288 1,181,447 833,610 434,548
Income taxes 573,371 453,340 306,078 159,000
------------ ------------ ------------ ------------
Net income $ 898,917 $ 728,107 $ 527,532 $ 275,548
============ ============ ============ ============
Net income per common share:
Basic/diluted $ 0.44 $ 0.36 $ 0.26 $ 0.14
============ ============ ============ ============
Weighted average number of
common shares
and common stock equivalents outstanding:
Basic/diluted 2,040,343 2,015,238 2,047,697 2,020,952
============ ============ ============ ============
</TABLE>
See notes to financial statements.
2
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------- ----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income $ 898,917 $ 728,107 $ 527,532 $ 275,548
Other comprehensive income-unrealized
holding (loss) gain on securities available
for sale, net of income taxes (25,600) (10,160) (14,720) 3,200
--------- --------- --------- ---------
Comprehensive income $ 873,317 $ 717,947 $ 512,812 $ 278,748
--------- --------- --------- ---------
</TABLE>
See notes to financial statements.
3
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 898,917 $ 728,107
Adjustments to reconcile net income to
cash (used in) provided by operating activities:
Depreciation and amortization of premises and equipment 195,902 155,266
Accretion of discounts and amortization of premiums, net 26,378 30,805
Accretion of deferred fees and discounts (185,634) (353,873)
Provision for loan losses 86,000 89,000
Purchases of trading account securities (7,074,557) (14,824,783)
Proceeds from sales of trading account securities 4,289,672 14,893,536
Realized gains on sales of trading account securities (41,011) (68,753)
Unrealized loss of trading account securities 71,946 --
(Gain) loss on sale of real estate owned (3,226) 2,382
Gain on sale of branch (422,554) --
(Increase) decrease in accrued interest receivable (257,179) 8,126
(Increase) in other assets (82,996) (189,343)
(Decrease) increase in interest payable on deposits (143,160) 60,154
(Decrease) increase in other liabilities (267,052) 217,376
ESOP committed to be released 153,867 194,249
Amortization of cost of stock contributed to Incentive Plan 114,264 114,264
------------ ------------
Net cash (used in) provided by operating activities (2,640,423) 1,056,513
------------ ------------
Cash flows from investing activities:
Purchases of securities available for sale (227,296) (232,264)
Proceeds from maturities of investment securities held to maturity 1,000,000 7,000,000
Proceeds from call of investment securities held to maturity 2,000,000 --
Purchases of investment securities held to maturity (3,000,000) (2,000,000)
Purchases of mortgage-backed securities held to maturity (37,148,664) (21,590,834)
Principal repayments on mortgage backed securities held to maturity 18,235,405 17,355,810
Purchase of loans (7,725,227) (216,000)
Net change in loans receivable (18,566,451) 755,429
Capitalized cost on real estate owned (10,003) --
Proceeds from sale of real estate owned 133,852 66,551
Additions to premises and equipment (392,769) (351,846)
Purchase of Federal Home Loan Bank of New York stock (453,800) --
------------ ------------
Net cash (used in) provided by investing activities (46,154,953) 786,846
(Continued)
<PAGE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
------------ ------------
Cash flows from financing activities:
Net increase in deposits 718,330 13,720,658
Cash paid for sale of branch (5,245,867) --
Net increase (decrease) in advances from Federal Home Loan
Bank of New York 38,000,000 (5,000,000)
Net (decrease) in other borrowed money (454,805) (137,103)
Net increase (decrease) in payments by borrowers for taxes 76,157 (95,382)
Cash dividends paid (230,392) (208,504)
------------ ------------
Net cash provided by financing activities 32,863,423 8,279,669
------------ ------------
Net (decrease) increase in cash and cash equivalents (15,931,953) 10,123,028
Cash and cash equivalents - beginning 23,364,562 6,429,709
------------ ------------
Cash and cash equivalents - ending $ 7,432,609 $ 16,552,737
============ ============
</TABLE>
See notes to financial statements.
4
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------
1999 1998
---------- ----------
<S> <C> <C>
Supplemental information:
Transfer of loans receivable to real estate owned $ 39,819 $ --
========== ==========
Unrealized loss on securities available
For sale, net of income taxes $ 25,600 $ 10,160
========== ==========
Cash paid during the period for:
Income taxes $ 512,588 $ 561,740
========== ==========
Interest on deposits and borrowings $6,086,309 $5,779,197
========== ==========
</TABLE>
See notes to financial statements.
5
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. BASIS OF PRESENTATION
- ------------------------
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and Regulation S-X and do not include
information or footnotes necessary for a complete presentation of financial
condition, results of operations, and cash flows in conformity with generally
accepted accounting principles. However, in the opinion of management, all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the consolidated financial statements have been included.
The results of operations for the nine months ended September 30, 1999, are not
necessarily indicative of the results which may be expected for the entire
fiscal year.
2. NET INCOME PER COMMON SHARE
- ------------------------------
Basic net income per common share is based on the weighted average number of
common shares actually outstanding, adjusted for unearned shares of the ESOP and
the Incentive Plan. Diluted net income per share is calculated by adjusting the
weighted average number of shares of common stock outstanding to include the
effect of potential common shares. Potential common shares related to unearned
incentive plan awards, unearned ESOP shares and stock options were not dilutive
during the three months and nine months ended September 30, 1999 and 1998.
3. FORMATION OF STOCK HOLDING COMPANY
- -------------------------------------
On July 12, 1999, Pulaski Savings Bank (the "Bank") reorganized into a two-tier
mutual holding company structure pursuant to an Agreement and Plan of
Reorganization which was unanimously adopted by the Board of Directors of the
Bank on January 28, 1999 ("Plan of Reorganization") and approved by the
shareholders of the Bank on April 23, 1999. Under the Plan of Reorganization
(the "Reorganization"), the Bank became a wholly owned subsidiary of Pulaski
Bancorp, Inc. (the "Company"), a federally-chartered stock holding company, a
majority of the Common Stock of which is now owned by the Pulaski Bancorp,
M.H.C. (the "Mutual Holding Company"), the Bank's parent mutual holding company.
In the Reorganization, each outstanding share of Bank common stock was converted
into one share of Company common stock and the holders of Bank common stock
became the holders of all of the outstanding shares of Company common stock.
Accordingly, as a result of the Reorganization, the Bank's minority
stockholders, became minority stockholders of the Company and the Bank's
majority stockholder, the Mutual Holding Company, became the majority
stockholder of the Company.
After the Reorganization, the Bank has continued its business and operations as
a wholly owned subsidiary of the Company and the consolidated capitalization,
assets, liabilities, income and financial statements, and management of the
Company immediately following the Reorganization is substantially the same as
those of the Bank immediately prior to consummation of the Reorganization. The
Charter and Bylaws of the Bank continue in effect, and have not been affected in
any manner by the Reorganization. The name "Pulaski Savings Bank" continues to
be utilized by the Bank. The corporate existence of the Bank has continued
unaffected and unimpaired by the Reorganization except that all of its
outstanding stock is now owned by the Company.
6
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
DISCUSSION OF FORWARD-LOOKING STATEMENTS
When used or incorporated by reference in disclosure documents, the works
"anticipate", "estimate", "expect", "project", "target", "goal" and similar
expressions are intended to identify forward-looking statements. Such
forward-looking statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, expected or projected. These
forward-looking statements speak only as of the date of the document. The
Company expressly disclaims any obligation or undertaking to publicly release
any updates or revisions to any forward-looking statement contained herein to
reflect any change in the Company's expectation with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
COMPARISON OF CONSOLIDATED FINANCIAL CONDITION AT SEPTEMBER 30, 1999 AND
DECEMBER 31, 1998
The Company's assets at September 30, 1999 totalled $233.0 million, which
represents an increase of $33.2 million or 16.6% as compared with $199.8 million
at December 31, 1998.
Cash and cash equivalents decreased $16.0 million or 68.4% to $7.4 million at
September 30, 1999 from $23.4 million at December 31, 1998, primarily reflecting
a $14.3 million decrease in federal funds sold. The decrease was primarily used
to fund loan originations and purchases.
Term deposits at September 30, 1999 and December 31, 1998 were the same at
$197,000. Trading account securities at September 30, 1999 amounted to $2.8
million. The Bank did not have trading account securities at December 31, 1998.
Securities available for sale at September 30, 1999 increased $188,000 or 3.3%
to $5.8 million when compared with $5.6 million at December 31, 1998, which
resulted from purchases of $227,000 in securities available for sale sufficient
to offset a net unrealized loss on such portfolio of $40,000. Investment
securities held to maturity at September 30, 1999 and December 31, 1998 totalled
$6.9 million. During the nine months ended September 30, 1999, proceeds from
calls and maturities of investment securities held to maturity totalled $3.0
million, offset by purchases of $3.0 million.
Mortgage-backed securities held to maturity increased $18.9 million or 33.9% to
$74.6 million at September 30, 1999 when compared to $55.7 million at December
31, 1998. The increase during the nine months ended September 30, 1999 resulted
primarily from purchases of mortgage-backed securities of $37.1 million
sufficient to offset repayments on mortgage-backed securities of $18.2 million
Net loans increased $26.3 million or 26.1% to $127.2 million at September 30,
1999 as compared to $100.9 million at December 31, 1998. The increase during the
nine months ended September 30, 1999, resulted primarily from loan originations
and purchases exceeding loan principal repayments.
Deposits at September 30, 1999 decreased $5.1 million to $169.7 million when
compared with $174.8 million at December 31, 1998. During the third quarter of
1999, the Bank sold its deposits held at its Harrison, New Jersey branch office
in the amount of $5.7 million, resulting in a gain of $423,000.
7
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF CONSOLIDATED FINANCIAL CONDITION AT SEPTEMBER 30, 1999 AND
DECEMBER 31, 1998 (CONT'D.)
At September 30, 1999, advances from Federal Home Loan Bank of New York ("FHLB")
amounted to $38.0 million. Such advances were primarily used for the purchase of
mortgage-backed securities held to maturity and funding of loan originations and
purchases. The Bank did not have any outstanding advances from FHLB at December
31, 1998. At December 31, 1998, other borrowed money amounted to $455,000, which
was paid-off on September 30, 1999.
Stockholders' equity totalled $23.7 million and $22.8 million at September 30,
1999 and December 31, 1998, respectively.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
AND 1998
Net income increased $252,000 or 91.3% to $528,000 for the three months ended
September 30, 1999 compared with $276,000 for the same 1998 period. The increase
in net income during the 1999 period resulted from increases in total interest
income and non-interest income which were partially offset by increases in total
interest expense, non-interest expenses and income taxes.
Interest income on loans increased by $209,000 or 9.8% to $2.3 million during
the three months ended September 30, 1999 when compared with $2.1 million during
the same 1998 period. The increase during the 1999 period resulted from an
increase of $20.8 million in the average balance of loans outstanding sufficient
to offset a decrease of 77 basis points in the yield earned on the loan
portfolio. Interest on mortgage-backed securities increased $152,000 or 18.0% to
$996,000 during the three months ended September 30, 1999 when compared with
$844,000 for the same 1998 period. The increase during the 1999 period resulted
from an increase in the average balance of mortgage-backed securities
outstanding of $15.6 million, which was sufficient to offset a decrease of 50
basis points in the yield earned thereon. Interest earned on investment
securities, including available for sale and held to maturity issues, increased
$26,000 or 16.1% to $187,000 during the three months ended September 30, 1999
when compared with $161,000 for the same 1998 period. The increase during the
1999 period resulted from a increase of $1.2 million in the average balance of
investment securities outstanding along with an increase of 29 basis points in
the yield earned on such securities. Interest earned on other interest-earning
assets, which includes trading account securities, decreased by $84,000 or 34.9%
to $157,000 during the three months ended September 30, 1999 when compared with
$241,000 for the same 1998 period. The decrease during the 1999 period resulted
from a decrease of $8.0 million or 48.3% in the average balance of other
interest-earning assets outstanding partially offset by an increase of 151 basis
points in the yield earned thereon.
Interest expense on deposits decreased $63,000 or 3.3% to $1.8 million during
the three months ended September 30, 1999 when compared to $1.9 million during
the same 1998 period. Such decrease during the 1999 period was attributable to a
decrease of 35 basis points in the cost of interest-bearing deposits which more
than offset an increase of $7.2 million in the average balance of
interest-bearing deposits outstanding. Interest on advances and borrowed money
amounted to $281,000 and $12,000 during the three months ended September 30,
1999 and 1998, respectively. The increase during the 1999 period resulted
primarily from an increase of $20.2 million in the average balance of borrowed
money.
8
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
AND 1998 (CONT'D.)
Net interest income increased $97,000 or 6.6% to $1.56 million during the three
months ended September 30, 1999 when compared with $1.46 million during the same
1998 period. Such increase was due to an increase in total interest income of
$303,000, which was sufficient to offset an increase in total interest expense
of $206,000. The Bank's net interest rate spread decreased to 2.45% in 1999 from
2.66% in 1998. The decrease in the interest rate spread in 1999 resulted from a
decrease of 45 basis points in the yield earned on interest-earning assets,
which was more than sufficient to offset a 24 basis point decrease in the cost
of interest-bearing liabilities.
During the three months ended September 30, 1999 and 1998, the Bank provided
$25,000 and $26,000, respectively, for loan losses. The allowance for loan
losses is based on management's evaluation of the risks inherent in the loan
portfolio and gives due consideration to changes in general market conditions
and in the nature and volume of the Bank's loan activity. The Bank intends to
continue to provide for loan losses based on its periodic review of the loan
portfolio and general market conditions.
Management believes that, based on information currently available, the
allowance for loan losses is sufficient to cover losses inherent in its loan
portfolio at this time. However, no assurance can be given that the level of the
allowance for loan losses will be sufficient to cover future possible loan
losses incurred by the Bank or that future adjustments to the allowance for loan
losses will not be necessary if economic and other conditions differ
substantially from the economic and other conditions used by management to
determine the current level of the allowance for loan losses. Management may in
the future increase the level of the allowance for loan losses as a percentage
of total loans and non-performing loans in the event it increases the level of
commercial real estate, multifamily, or consumer lending as a percentage of its
total loan portfolio. In addition, various regulatory agencies, as an integral
part of their examination process, periodically review the allowance for loan
losses. Such agencies may require the Bank to provide additions to the allowance
based upon judgments different from management. At September 30, 1999 and 1998,
the Bank's non-performing loans, which were delinquent ninety days or more,
totalled $632,000 or .27% of total assets and $1.2 million or .62% of total
assets, respectively. At September 30, 1999 and 1998, all non-performing loans
were on non-accrual status.
Non-interest income increased by $395,000 to $450,000 during the three months
ended September 30, 1999 when compared to $55,000 during the same 1998 period.
The increase during the 1999 period resulted from increases in fees and service
charges of $20,000 and the gain on sale of a branch of $423,000, partially
offset by a $48,000 decline in trading account income. During the three months
ended September 30, 1999, the Bank purchased trading account securities of
$551,000 and did not sell any securities. Unrealized losses on trading account
securities totalled, however, $34,000. During the three months ended September
30, 1999, the Bank sold its deposits of $5.7 million held at its Harrison, New
Jersey branch office at a gain of $423,000.
<PAGE>
Non-interest expenses increased by $95,000, or 9.0%, to $1.15 million during the
three months ended September 30, 1999 when compared with $1.05 million during
the same 1998 period. During the 1999 period, increases in salaries and employee
benefits, occupancy, advertising, federal insurance premium and miscellaneous
expenses of $49,000, $40,000, $2,000, $1,000, and $33,000, respectively, were
9
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
AND 1998 (CONT'D.)
partially offset by decreases in equipment and loss on real estate owned of
$28,000 and $3,000, respectively, when compared with the same 1998 period. The
increase in occupancy expense is largely the result of a new branch located at
Bayville, New Jersey, which was opened during the first quarter of 1999.
Equipment expenses during the 1998 period included the cost incurred in
connection with the change in the Bank's outside computer service center.
Income taxes totalled $306,000 and $159,000 during the three months ended
September 30, 1999 and 1998, respectively. The increase during the 1999 period
resulted from an increase in pre-tax income.
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
1998
Net income increased $171,000 or 23.5% to $899,000 for the nine months ended
September 30, 1999 compared with $728,000 for the same 1998 period. The increase
in net income during the 1999 period resulted from increases in total interest
income and non-interest income combined with a decrease in provision for loan
losses, which were partially offset by increases in total interest expense,
non-interest expenses and income taxes.
Interest income on loans increased by $190,000 or 3.0% to $6.6 million during
the nine months ended September 30, 1999 when compared with $6.4 million during
the same 1998 period. The increase during the 1999 period resulted from an
increase of $11.3 million in the average balance of loans outstanding sufficient
to offset a decrease of 63 basis points in the yield earned on the loan
portfolio. Interest on mortgage-backed securities increased $220,000 or 8.9% to
$2.7 million during the nine months ended September 30, 1999 when compared with
$2.5 million for the same 1998 period. The increase during the 1999 period
resulted from an increase in the average balance of mortgage-backed securities
outstanding of $10.1 million, which was sufficient to offset a decrease of 52
basis points in the yield earned thereon. Interest earned on investment
securities, including available for sale and held to maturity issues, decreased
$88,000 or 14.4% to $523,000 during the nine months ended September 30, 1999
when compared with $611,000 for the same 1998 period. The decrease during the
1999 period resulted from a 10 basis point decrease in the yield earned on such
securities, accompanied by a decrease of $1.8 million in the average balance of
investment securities outstanding. Interest earned on other interest-earning
assets, which includes trading account securities, decreased by $70,000 or 11.5%
to $541,000 during the nine months ended September 30, 1999 when compared with
$611,000 for the same 1998 period. The decrease during the 1999 period resulted
from a decrease of $1.2 million in the average balance of other interest-earning
assets outstanding, along with a decrease of 19 basis points in the yield earned
thereon.
<PAGE>
Interest expense on deposits increased $15,000 or .3% to $5.66 million during
the nine months ended September 30, 1999 when compared to $5.64 million during
the same 1998 period. Such increase during the 1999 period was attributable to
an increase of $11.4 million in the average balance of interest-bearing deposits
outstanding, which was sufficient to offset a decrease of 30 basis points in the
cost of interest-bearing deposits. Interest on advances and borrowed money
amounted to $298,000 and $149,000 during the nine months ended September 30,
1999 and 1998, respectively. The increase during the 1999 period resulted
primarily from an increase of $4.1 million or 134.1%, in the average balance of
advances and borrowed money.
10
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
1998 (CONT'.D)
Net interest income increased $88,000 or 2.0% to $4.4 million during the nine
months ended September 30, 1999 when compared with $4.3 million during the same
1998 period. Such increase was due to an increase in total interest income of
$252,000, which was sufficient to offset an increase in total interest expense
of $164,000. The Bank's net interest rate spread decreased to 2.44% in 1999 from
2.65% in 1998. The decrease in the interest rate spread in 1999 resulted from a
decrease of 51 basis points in the yield earned on interest-earning assets,
which was more than sufficient to offset a 30 basis point decrease in the cost
of interest-bearing liabilities.
During the nine months ended September 30, 1999 and 1998, the Bank provided
$86,000 and $89,000, respectively, for loan losses.
Non-interest income increased by $341,000 to $537,000 during the nine months
ended September 30, 1999 when compared to $196,000 during the same 1998 period.
The increase during the 1999 period resulted from increases in fees and service
charges of $17,000 and a gain on sale of branch of $423,000 partially offset by
a $100,000 decrease in trading account income. During the nine months ended
September 30, 1999, the Bank purchased $7.1 million and sold $4.2 million in
trading securities, resulting in a realized gains of $41,000, and recorded
unrealized losses on trading account securities of $72,000. During the nine
months ended September 30, 1998, the Bank purchased and sold securities of $14.8
million resulting in income of $69,000 from such trading.
Non-interest expenses increased by $140,000, or 4.3%, to $3.4 million during the
nine months ended September 30, 1999 when compared with $3.2 million during the
same 1998 period. During the 1999 period, increases in salaries and employee
benefits, occupancy, advertising, federal insurance premium and miscellaneous
expenses of $82,000, $92,000, $55,000, $4,000, and $92,000, respectively, were
partially offset by decreases in equipment and loss on real estate owned of
$178,000 and $6,000, respectively, when compared with the same 1998 period. The
increase in occupancy expense is largely the result of a new branch located at
Bayville, New Jersey, which was opened during the first quarter of 1999.
Equipment expenses during the 1998 period included the cost incurred in
connection with the change of the Bank's outside computer service center.
Income taxes totalled $573,000 and $453,000 during the nine months ended
September 30, 1999 and 1998, respectively. The increase during the 1999 period
resulted from an increase of pre-tax income.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Bank is required to maintain minimum levels of liquid assets as defined by
the Office of Thrift Supervision (the "OTS") regulations. The requirement, which
the OTS may vary from time to time, depending upon economic conditions and
deposit flows, is based upon a percentage of deposits and short-term borrowings.
The required ratio currently is 4.0%. The Bank's liquidity averaged 30.0% during
the month of September 1999. The Bank adjusts its liquidity levels in order to
meet funding needs for deposit outflows, payment of real estate taxes from
escrow accounts on mortgage loans, repayment of borrowings, when applicable, and
loan funding commitments. The Bank also adjusts its liquidity level as
appropriate to meet its asset/liability objectives.
11
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (CONT'D.)
The Bank's primary sources of funds are deposits, amortization and prepayments
of loans and mortgage-backed securities principal, maturities of investment
securities and funds provided by operations. While scheduled loan and
mortgage-backed securities amortization and maturing term deposits and
investment securities are relatively predictable sources of funds, deposit flows
and loan and mortgage-backed securities prepayments are greatly influenced by
market interest rates, economic conditions and competition. The levels of these
assets are dependent on the Bank's operating, financing, lending and investing
activities during any given period. At September 30, 1999, interest-bearing
deposits, term deposits, federal funds sold and securities available for sale
totalled $10.7 million. The Bank has other sources of liquidity if a need for
additional funds arises, including advances from the FHLB. At September 30,
1999, advances from FHLB amounted to $38.0 million.
During the nine months ended September 30, 1999 and 1998, cash dividends paid on
common stock amounted to $230,000 and $209,000, respectively. The mutual holding
company waived its right to receive dividends. If the mutual holding company had
not waived its right to receive dividends, the amount of such dividends, during
the three and nine months ended September 30, 1999, would have been increased by
$89,000 and $267,000, respectively.
The Bank anticipates that it will have sufficient funds available to meet its
current loan commitments. At September 30, 1999, the Bank had outstanding
commitments to fund, originate and purchase loans of $29.8 million. Certificates
of deposit scheduled to mature in one year or less at September 30, 1999,
totalled $97.5 million. Management believes that, based upon its experience and
the Bank's deposit flow history, a significant portion of such deposits will
remain with the Bank.
<PAGE>
Under OTS regulations, three separate measurements of capital adequacy (the
"Capital Rule") are required. The Capital Rule requires each savings institution
to maintain tangible capital equal to at least 1.5% and core capital equal to at
least 4.0% of its total adjusted assets. The Capital Rule further requires each
savings institution to maintain total capital equal to at least 8.0% of its
risk-weighted assets. The following table sets forth the Bank's capital position
at September 30, 1999 as compared to the minimum regulatory capital
requirements:
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
Minimum Capital Prompt Corrective
Actual Requirements Actions Provisions
---------------------------- ----------------------------- -----------------------------
Amount Ratio Amount Ratio Amount Ratio
------------- ----------- -------------- ------------ -------------- ------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Total Capital
(to risk-weighted assets) $ 23,546 21.99% $ 8,566 8.00% $ 10,707 10.00%
Tier 1 Capital
(to risk-weighted assets) 22,503 21.02% - - 6,424 6.00%
Core (Tier 1) Capital
(to adjusted total assets) 22,503 9.66% 9,318 4.00% 11,648 5.00%
Tangible Capital
(to adjusted total assets) 22,503 9.66% 3,494 1.50% - -
</TABLE>
12
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Bank's
computer programs that would have date sensitive software may recognize a date
during "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations, including
among other things a temporary inability to process transactions, or engage in
similar normal business activities.
The Bank has determined that it will be required to modify or replace portions
of its software so that its computer systems will properly utilize dates beyond
December 31, 1999. Mission critical hardware and software has been deemed Year
2000 compliant. Modifications to update or replace non-critical non-compliant
software is scheduled to begin on November 16, 1999 and is estimated to be
completed by November 30, 1999. The Bank presently believes that with
modifications to existing software and conversion to new software, the year 2000
Issue can be mitigated. However, if such modifications and conversions are not
made, or are not completed on a timely basis, the Year 2000 Issue may have a
material impact on the operations of the Bank.
The Bank has included and continues to include, Year 2000 verbiage requirements
in its loan documentation for large borrowers since the third quarter of 1998.
Given the composition of the Bank's loan portfolio which consists primarily of
loans on residential properties but also includes some commercial and mixed use
properties, the Bank does not believe that it has a material amount of loans to
individuals or entities that are susceptible to Year 2000 issues such that their
noncompliance with year 2000 issues will materially affect their ability to
repay such loans.
The Bank has also initiated formal communications with all of its significant
suppliers and vendors to determine the extent to which the Bank is vulnerable to
those third parties' failure to remediate their own Year 2000 issues. All third
parties have indicated their compliance or intended compliance. The Bank is in
the process of reviewing the Year 2000 compliance of its third party data
processing vendor. The vendor has completed both proxy and end to end testing
with the Bank and also with other third party providers of services to the Bank
with minor exceptions. The Bank completed testing with this vendor on October 3,
1999.
<PAGE>
At this time, the Bank is not aware of any problems that will lead to a material
loss of revenue related to Year 2000 issue. The Bank is in the process of
determining the costs and time associated with the Year 2000 project. The Bank
does not expect the total cost of the Year 2000 project to have a material
adverse impact on the financial condition or operations of the Bank. To date,
the Bank has incurred approximately $8,700 related to the assessment of, and
preliminary efforts in connection with its Year 2000 project and the development
of a remediation plan. It is anticipated that additional costs related to Y2K
compliance will not exceed $15,000. These amounts do not include internal
Y2K-related costs which are primarily payroll costs which are not separately
tracked. Because the Bank depends substantially on its computer systems and
those of third parties, the failure of these systems to be Year 2000 compliant
could cause substantial disruption of the Bank's business and could have a
material adverse financial impact on the Bank. Failure to resolve Year 2000
issues presents the following risks to the Bank, which it believes reflects its
most reasonably likely worst-case scenario: the Bank could lose customers to
other financial institutions, resulting in a loss of revenue, if the Bank's
third-party service
13
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
IMPACT OF THE YEAR 2000 ISSUE (CONT'D.)
bureau is unable to properly process customer transactions; governmental
agencies, such as the Federal Reserve Bank, and correspondent institutions could
fail to provide funds to the Bank, which could materially impair the Bank's
liquidity and affect the Bank's ability to fund loans and deposit withdrawals;
concern on the part of depositors that Year 2000 issues could impair access to
their deposit account balances could result in the Bank experiencing deposit
outflows before December 31, 1999; and the Bank could incur increased personnel
costs if additional staff is required to perform functions that inoperative
systems would have otherwise performed. There can be no assurances that the
Bank's Year 2000 plan will effectively address the Year 2000 issue, that the
bank's estimates of the timing and costs of completing the plan will ultimately
be accurate or that the impact of any failure of the Bank or its third-party
vendors and service providers to be Year 2000 compliant will not have a material
adverse effect on the Bank's business, financial condition or results of
operations.
The Bank has prepared a contingency plan in the event that there are any system
interruptions. The contingency plan was tested during the third quarter of 1999
and the results of such testing were satisfactory. As part of the contingency
plan, the Bank intends to engage alternative suppliers or other vendors if its
current significant suppliers or other vendors fail to meet Year 2000 operating
requirements. There can be no assurances, however, that such plan or the
performances by any of the Bank' suppliers and vendors will be effective to
remedy all potential problems.
PENDING LEGISLATION
Pending legislation designed to modernize the regulation of the financial
services industry expands the ability of bank holding companies to affiliate
with other types of financial services companies such as insurance companies and
investment banking companies. However, the legislation provides that companies
that acquire control of a single savings association after May 4, 1999 (or that
filed an application for that purpose after that date) are not entitled to the
unrestricted activities formerly allowed for a unitary savings and loan holding
company. Rather, these companies will have authority to engage in the activities
permitted "a financial holding company" under the new legislation, including
insurance and securities-related activities, and the activities currently
permitted for multiple savings and loan holding companies, but generally not in
commercial activities. The authority for unrestricted activities is
grandfathered for unitary savings and loan holding companies, such as the
Company, that existed prior to May 4, 1999. However, the authority for
unrestricted activities would not apply to any company that acquired the
Company.
14
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
-----------------------------
MANAGEMENT OF INTEREST RATE RISK
The ability to maximize net interest income is largely dependent upon the
achievement of a positive interest rate spread that can be sustained during
fluctuations in prevailing interest rates. Interest rate sensitivity is a
measure of the difference between amounts of interest-earning assets and
interest-bearing liabilities which either reprice or mature within a given
period of time. The difference, or the interest rate repricing "gap", provides
an indication of the extent to which an institution's interest rate spread will
be affected by changes in interest rates. A gap is considered positive when the
amount of interest-rate sensitive assets exceeds the amount of interest-rate
sensitive liabilities, and is considered negative when the amount of
interest-rate sensitive liabilities exceeds the amount of interest-rate
sensitive assets. Generally, during a period of rising interest rates, a
negative gap within shorter maturities would adversely affect net interest
income, while a positive gap within shorter maturities would result in an
increase in net interest income, and during a period of falling interest rates,
a negative gap within shorter maturities would result in an increase in net
interest income while a positive gap within shorter maturities would result in a
decrease in net interest income.
Because the Bank's interest-bearing liabilities which mature or reprice within
short periods exceed its interest-earning assets with similar characteristics,
material and prolonged increases in interest rates generally would adversely
affect net interest income, while material and prolonged decreases in interest
rates generally would have a positive effect on net interest income.
The Bank's current investment strategy is to maintain an overall securities
portfolio that provides a source of liquidity and that contributes to the Bank's
overall profitability and asset mix within given quality and maturity
considerations. The securities portfolio is concentrated in U.S. Treasury and
federal government agency securities providing high asset quality to the overall
balance sheet mix. Securities classified as available for sale provide
management with the flexibility to make adjustments to the portfolio given
changes in the economic or interest rate environment, to fulfill unanticipated
liquidity needs, or to take advantage of alternative investment opportunities.
NET PORTFOLIO VALUE
The Bank's interest rate sensitivity is monitored by management through the use
of the OTS model which estimates the change in the Bank's net portfolio value
("NPV") over a range of interest rate scenarios. NPV is the present value of
expected cash flows from assets, liabilities, and off-balance sheet contracts.
The NPV ratio, under any interest rate scenario, is defined as the NPV in that
scenario divided by the market value of assets in the same scenario. The OTS
produces its analysis based upon data submitted on the Bank's quarterly Thrift
Financial Reports. The following table sets forth the Bank's NPV as of June 30,
1999, the most recent date the Bank's NPV was calculated by the OTS.
15
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
-----------------------------
<TABLE>
<CAPTION>
NVP as
Percent of Portfolio
Changes in Net Portfolio Value Value of Assets
Interest Rates -------------------------------- -------------------------
in Basis Points Dollar Percent NVP Change
(Rate Shock) Amount Change Change Ratio Basis Points
------------ -------- -------- ---------- ------- ------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
300 $ 13,982 $10,923 (44) 7.31 % (491)
200 17,906 6,999 (28) 9.14 (307)
100 21,656 (3,250) (13) 10.82 (139)
Static 24,905 - - 12.22 -
-100 27,384 2,479 10 13.23 102
-200 29,441 4,536 18 14.04 183
-300 31,727 6,821 27 14.91 270
</TABLE>
Certain shortcomings are inherent in the methodology used in the above interest
rate risk measurements. Modeling changes in NPV require the making of certain
assumptions which may or may not reflect the manner in which actual yields and
costs respond to changes in market interest rates. In this regard, the NPV model
presented assumes that the composition of the Bank's interest sensitive assets
and liabilities existing at the beginning of a period remains constant over the
period being measured and also assumes that a particular change in interest
rates is reflected uniformly across the yield curve regardless of the duration
to maturity or repricing of specific assets and liabilities. Accordingly,
although the NPV measurements and net interest income models provide an
indication of the Bank's interest rate risk exposure at a particular point in
time, such measurements are not intended to and do not provide a precise
forecast of the effect of changes in market interest rates on the Bank's net
interest income and will differ from actual results.
16
<PAGE>
PULASKI BANCORP, INC. AND SUBSIDIARY
PART II . OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
-----------------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
-----------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits:
3.1 Stock Charter of Pulaski Bancorp, Inc. *
3.2 Bylaws of Pulaski Bancorp, Inc. *
4.0 Form of Common Stock Certificate *
11.0 Computation of earnings per share
27.0 Financial Data Schedule
* Incorporated herein by reference into this document from the Exhibits to
the Current Report on Form 8-K, filed July 12, 1999.
(b) Reports on form 8-K:
On July 12, 1999, the Company filed a Form 8-K, reporting the
completion of the Pulaski Savings Bank's reorganization into the
two-tier mutual holding company structure and the conversion of all of
the outstanding shares of Pulaski Savings Bank's common stock into
shares of Pulaski Bancorp, Inc. common stock.
17
<PAGE>
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.
PULASKI BANCORP, INC.
Date: November 12, 1999 By /s/ Thomas Bentkowski
------------------------------- --------------------------------------
Thomas Bentkowski
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 12, 1999 By: /s/ Lee Wagstaff
------------------------------- --------------------------------------
Lee Wagstaff
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
18
Exhibit 11.0
PULASKI BANCORP, INC. AND SUBSIDIARY
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
--------------------------- --------------------------
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, 1999 September 30, 1999
------------------ ------------------
<S> <C> <C>
Net income $ 898,917 $ 527,532
Weighted average shares outstanding - basic and diluted 2,040,343 2,047,697
Basic and diluted earnings per share $ 0.44 $ 0.26
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO THE UNAUDITED FINANCIAL STATEMENTS CONTAINED THEREIN.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,787,717
<INT-BEARING-DEPOSITS> 491,892
<FED-FUNDS-SOLD> 4,350,000
<TRADING-ASSETS> 2,813,500
<INVESTMENTS-HELD-FOR-SALE> 5,829,794
<INVESTMENTS-CARRYING> 81,502,174
<INVESTMENTS-MARKET> 80,663,566
<LOANS> 128,353,673
<ALLOWANCE> 1,108,000
<TOTAL-ASSETS> 232,964,008
<DEPOSITS> 169,714,773
<SHORT-TERM> 38,000,000
<LIABILITIES-OTHER> 1,532,590
<LONG-TERM> 0
0
0
<COMMON> 21,081
<OTHER-SE> 23,695,564
<TOTAL-LIABILITIES-AND-EQUITY> 232,964,008
<INTEREST-LOAN> 6,592,823
<INTEREST-INVEST> 3,225,537
<INTEREST-OTHER> 540,624
<INTEREST-TOTAL> 10,358,984
<INTEREST-DEPOSIT> 5,656,842
<INTEREST-EXPENSE> 5,955,333
<INTEREST-INCOME-NET> 4,403,651
<LOAN-LOSSES> 86,000
<SECURITIES-GAINS> (30,935)
<EXPENSE-OTHER> 3,382,102
<INCOME-PRETAX> 1,472,288
<INCOME-PRE-EXTRAORDINARY> 1,472,288
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 898,917
<EPS-BASIC> 0.44
<EPS-DILUTED> 0.44
<YIELD-ACTUAL> 2.93
<LOANS-NON> 632,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,022,000
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,108,000
<ALLOWANCE-DOMESTIC> 1,108,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
