SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period
ended June 30, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-27747
DOLLAR BANCORP, INC.
--------------------
(Exact name of registrant as specified in its charter)
Delaware 52-2197122
------------------------------ ----------------------
(State or other jurisdiction of (IRS Employer Identification number)
incorporation or organization)
893 Franklin Avenue, Newark, New Jersey 07107
(Address of principal executive offices)
Registrant's telephone number, including area code: (973) 483-0001
--------------
-----------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
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 such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of stock, as of the latest practicable date: 76,000 shares of common stock
Transitional Small Business Disclosure Format (check one):
Yes / / No /X/
<PAGE>
DOLLAR BANCORP, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of
June 30, 2000 and March 31, 2000 1
Statements of Operations for the
three months months ended
June 30, 2000 and 1999 2
Statements of Stockholders' Equity
for the three months ended
June 30, 2000 3
Statements of Cash Flows for the
three months ended June 30, 2000 and 1999 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 6
Item 3. Quantitative and Qualitative 6
Disclosures about market risk
PART II. OTHER INFORMATION 7
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Dollar Bancorp, Inc.
Balance Sheets as of
June 30, 2000 and March 31, 2000
<TABLE>
<CAPTION>
At At
June 30, 2000 March 31, 2000
----------- --------------
(unaudited) (audited)
Assets
<S> <C> <C>
Cash $249,585 $409,871
--------------------------------------------
Interest bearing deposits 2,575,475 3,165,806
-----------------------
Mortgage-backed securities 18,744 20,879
----------------------
Loans receivable, net 6,237,219 5,972,866
---------------------------
Premises & equipment 284,508 287,852
----------------------------
Real estate acquired in settlement of loans 275,175 275,175
-----
Stock in federal home loan bank 56,500 56,500
-----------------
Refundable income taxes 2,273 2,273
-------------------------
Prepaid income tax 9,442 9,442
-----------------------------
Other assets 30,275 22,612
------------------------------------ ------ ------
Total Assets $9,739,196 $10,223,676
========== ===========
Liabilities
Deposits $8,107,618 $8,610,553
----------------------------------------
Advances for taxes and insurance 49,512 60,261
----------------
Other liabilities 52,751 67,498
------------------------------- ------ ------
Total liabilities $8,209,881 $8,738,312
--------- ---------
Stockholders' Equity
Common Stock, $.01 per share;
76,000 shares issued $760 $760
--------------------------
Additional paid in capital 629,382 629,382
----------------------
Retained earnings 899,173 854,822
-------------------------------
Total Stockholders' Equity $1,529,315 $1,484,964
--------- ---------
Total liabilities and Stockholders' Equity $9,739,196 $10,223,276
========== ===========
</TABLE>
<PAGE>
Dollar Bancorp, Inc.
Statements of Operations
For the three months ended
June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
June 30,
---------------------
2000 1999
--------- --------
Interest Income:
<S> <C> <C>
Loans $169,695 $135,876
---------------------------------------
Mortgage-backed securities 421 604
------------------
Other 48,547 34,403
--------------------------------------- ------ ------
Total interest income 218,662 170,883
------- -------
Interest expense
Deposits:
Savings 24,322 23,322
----------------------------------
Time 38,077 29,153
------------------------------------- ------ ------
Total interest expense 62,399 52,475
------ ------
Net interest income 156,263 118,408
Provision for loan losses 0 0
----------------------
Net interest income after provision
for loan losses 156,263 118,408
------- -------
Non-interest income:
Loan fees and service charges 30,596 4,099
---------------
Other 4,503 3,766
--------------------------------------- ----- -----
Total non-interest income 35,099 7,865
------ -----
Non-interest expense:
Salaries and employee benefits 71,365 51,646
--------------
Net occupancy expense of premises 6,927 3,288
-----------
Equipment 5,098 1,896
-----------------------------------
Federal insurance premium 448 1,219
-------------------
Loss from real estate operations 3,836 0
------------
Other 59,337 60,833
--------------------------------------- ------ ------
Total non-interest expense 147,011 118,882
------- -------
Income (Loss) before income taxes 44,351 7,391
Income taxes 0 0
-----------------------------------
Net Income $44,351 $7,391
======= ======
</TABLE>
<PAGE>
Dollar Bancorp, Inc.
Statement of Stockholders' Equity
Three months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Common Additional Retained Total
stock paid-in earnings stockholders'
capital equity
<S> <C> <C> <C> <C>
Balance, March 31, 2000 $760 $ 629,382 $854,822 $1,484,964
--------------------
Net Income $44,351 $44,351
---------------------------------
Balance, June 30, 2000 $760 $629,382 $899,173 $1,529,315
</TABLE>
<PAGE>
Dollar Bancorp, Inc.
Statements of Cash Flows
Three months ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 44,351 $ 7,391
---------------------------------------------------
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Amortization of deferred loan fees (2,721) (780)
-----------------------
Depreciation of premises and equipment 3,344 3,164
-------------------
Provision for losses on loans and real estate 0 0
------------
Loss on sale of loans 0 0
------------------------------------
Loss on sale of real estate acquired in settlement of
loans 0 0
----------------------------------------------------
Decrease in refundable income taxes 0 0
----------------------
(Increase) in other assets (7,663) (5,947)
-------------------------------
(Decrease) increase in other liabilities (14,747) 15,967
-----------------
(Decrease) in accrued interest payable on
deposits (517) (10,130)
----------------------------------------------- ----- --------
Net cash provided by(used in) operating activities 22,047 9,665
------ -----
Cash flows from investing activities:
Proceeds from redemption of Federal Home Loan
Bank stock 0 0
-----------------------------------------------
Principal repayment on mortgage-backed securities 2,135 1,740
------------
Proceeds from sales of loans 0 0
---------------------------------
Proceeds from sales of real estate acquired in settlement
of loans 0 0
------------------------------------------------
Net (increase) decrease in loans receivable (261,632) 318,403
------------------
Purchase of equipment 0 0
---------------------------------------- --------- -------
Net cash (used in) provided by investing activities (259,497) 320,143
--------- -------
Cash flows from financing activities:
Net (decrease) increase in deposits (502,418) 490,537
--------------------------
(Decrease) in advance payments by borrowers
for taxes and insurance (10,749) (31,165)
--------------------------------- -------- --------
Net cash (used in) provided by financing activities (513,167) 459,372
--------- -------
Net (decrease) increase in cash and cash equivalents (750,617) 789,180
Cash and cash equivalents, beginning 3,575,677 2,818,435
--------- ---------
Cash and cash equivalents, ending $ 2,825,060 $ 3,607,615
============ =============
</TABLE>
<PAGE>
(1) Basis of Presentation
---------------------
The accompanying unaudited financial statements were prepared in accordance
with instructions for Form 10-QSB and therefore, do not include information for
footnotes necessary for a complete presentation of financial position, results
of operations, and cash flows in conformity with generally accepted accounting
principles. The following material under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations" is written with
the presumption that the users of the interim financial statements have read, or
have access to the latest audited financial statements and notes thereto of
Dollar Bancorp, Inc. (the "Company").
All adjustments (consisting only of normal recurring accruals) which, in
the opinion of management, are necessary for a fair presentation of the
financial statements have been included in the results of operations for the
three month period ending June 30, 2000.
Operating results for the three month period ended June 30, 2000 are not
necessarily indicative of the results that may be expected for the fiscal year
ending March 31, 2001.
(2) Holding Company Reorganization
------------------------------
At a Special Meeting of Stockholders held September 20, 1999, stockholders
of Dollar Savings Bank (the "Bank") approved the reorganization of the Bank into
the holding company structure, whereby the Bank became the wholly-owned
subsidiary of the Company, a Delaware corporation. Each outstanding share of the
Bank's common stock, par value $1.00 per share, was automatically converted into
one share of the Company's common stock, par value $.01 per share. The Bank
completed the reorganization on October 20, 1999.
(3) Earnings per share
------------------
Earnings per share are based upon the outstanding common shares or
76,000 shares. The earnings per share for the three months ended June 30, 2000
was $.58.
(4) Book value per share
--------------------
The book value per share is based upon the outstanding common shares or
76,000 shares. The book value per share at June 30, 2000 was $20.25.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward Looking Statements
In addition to historical information, this Quarterly Report contains
forward-looking statements. The forward-looking statements contained in this
document are subject to certain risks and uncertainties that could cause actual
results to differ materially from those projected in the forward-looking
statements. Important factors that might cause such a difference include, but
are not limited to, those discussed in this section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Readers shouldn't place undue reliance on these forward-looking statements,
as they reflect management's analysis as of the date of this report. The Company
has no obligation to update or revise these forward-looking statements to
reflect events or circumstances that occur after the date of this report.
Readers should carefully review the risk factor described in other documents the
Company files from time to time with the Securities and Exchange Commissison,
including reports filed on Form 8-K.
Comparison of Financial Condition at June 30, 2000 and March 31, 2000
Assets
Total assets decreased $484,480, or 4.7%, to $9,739,196 at June 30, 2000,
from $10,223,676 at March 31, 2000. The decrease in total assets was primarily
attributable to a $590,331 decrease in interest bearing deposits and a $160,286
decrease in cash, which were partially offset by a $264,353 increase in loans
receivable, net, and a $7,663 increase in other assets.
Liabilities
Total liabilities decreased by $528,431, or 6.05%, to $8,209,881 at June
30, 2000 from $8,738,312 at March 31, 2000. Deposits decreased to $8,107,618
from $8,610,553, advances for taxes decreased to $49,512 from $60,261 and other
liabilities including accrued expenses and uncashed bank checks decreased to
$52,751 from $67,498.
Stockholders' Equity
Stockholders' equity increased by $44,351, or 3.0%, to $1,529,315 at June
30, 2000 from $1,484,964 at March 31, 2000. The increase in stockholders' equity
is attributable to the Company's net income of $44,351 for the three month
period.
Comparison of Operating Results for the Three Months Ended June 30, 2000 and
June 30, 1999
Net Income
Net income increased $36,960 to $44,351 for the three months ended June 30,
2000 from $7,391 for the three months ended June 30, 1999. The increase in net
income resulted primarily from a $47,779 increase in interest income and a
$27,234 increase in non-interest income which was partially offset by an
increase in interest expense of $9,924 and an increase in non-interest expense
of $28,129.
<PAGE>
Interest Income
Interest income increased $47,779, or 28.0%, to $218,662 for the three
months ended June 30, 2000 from $170,883 for the three months ended June
30,1999. The increase in interest income was attributed to a $33,819 increase in
interest income attributable to loans, a $14,144 increase in other interest
income which was partially offset by a slight decrease in interest income
attributable to mortgage-backed securities of $183.
Interest Expense
Interest expense increased $9,924, or 18.9%, to $62,399 for the three
months ended June 30, 2000 from $52,475 for the three months ended June 30,
1999. This increase was due to a $1,000 increase in the cost of savings deposits
and a $8,924 increase in the cost of time deposits.
Provision for Loan Losses
The Company did not establish a provision for loan losses during the three
month period ended June 30, 2000 and the three month period ended June 30, 1999.
The Company maintains its allowance for loan losses based upon management's
periodic evaluation of known or inherent risks in the loan portfolio, the
Company's past loss experience, level of delinquencies, adverse situations that
may affect a borrower's ability to repay a loan, the estimated value of the
underlying collateral, and market conditions. The Company did not experience any
loss from real estate operations during the three months ended June 30, 2000 or
June 30, 1999.
Non-Interest Income
Non-interest income increased $27,234, or 346.3%, to $35,099 for the three
months ended June 30, 2000 from $7,865 for the three months ended June 30, 1999.
The increase was due to a $26,497 increase in loan fees and service charges and
a slight increase in other non-interest income consisting primarily of fees
generated by executing money orders.
Non-Interest Expense
Non-interest expense increased $28,129 or 23.7%, to $147,011 for the three
months ended June 30, 2000 from $118,882 for the three months ended June 30,
1999. The increase was primarily due to a $19,719 increase in salaries and
employees benefits, a $3,639 increase in net occupancy expense of premises, a
$3,202 increase in equipment expense, a $3,836 increase in loss from real estate
operations, which were partially offset by a decrease in federal insurance
premiums of $771 and a $1,496 decrease in other non-interest expenses.
Income Tax Expense
The Company did not incur any income tax expense during the three months
ended June 30, 2000 and June 30, 1999. This is due to a net operating loss
carryover from previous years.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's most significant form of market risk is interest rate risk,
as the majority of the Company's assets and liabilities are sensitive to changes
in interest rates. The Company's assets consist primarily of fixed rate mortgage
loans (the majority of which have five year balloon terms), which have longer
maturities than the Company's liabilities which consist primarily of deposits.
The Company's mortgage loan portfolio, consisting primarily of loans secured by
residential real property located in Essex County, is also subject to risks
associated with the local economy. The Company does not own any trading assets.
At June 30, 2000, the Company did not have any hedging transactions in place,
such as interest rate swaps and caps. The Company's interest rate risk
management focuses primarily on evaluating and managing the composition of the
Company's
<PAGE>
assets and liabilities in the context of various interest rate scenarios.
Factors beyond management's control, such as market interest rates and
competition, also have an impact on interest income and interest expense.
During the quarter ended June 30, 2000, there were no significant changes
in the Company's assessment of market risk.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are various claims and lawsuits in which the Bank is periodically
involved incidental to the Company's business. In the opinion of management, no
material loss is expected from any of such pending claims or lawsuits.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Changes in Securities.
Not applicable.
(b) Use of proceeds.
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K.
Exhibit 27 Edgar Financial Data Schedule.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
DOLLAR BANCORP, INC.
Date: August 10, 2000 By: \s\ Robert DeMane
-----------------
Robert DeMane
President and Chief Executive Officer
Date: August 10, 2000 By: \s\ Susan L. Velardi
--------------------
Susan L. Velardi
Vice President and Treasurer
<PAGE>
