CARNEGIE FINANCIAL CORP /PA/
8-K, 2000-06-08
PERSONAL CREDIT INSTITUTIONS
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934



                Date of Report (Date of earliest event reported)
                                  May 25, 2000


                         Carnegie Financial Corporation
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)




       Pennsylvania                     0-24579                25-1806857
------------------------------     -----------------         -------------
(State or other jurisdiction        (SEC File No.)           (IRS Employer
of incorporation)                                         Identification Number)




17 West Mall Plaza, Carnegie, Pennsylvania                      15106-2404
-----------------------------------------------------          ------------
(Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code:           (412) 276-1266
                                                              --------------

                                 Not Applicable
                     --------------------------------------
          (Former name or former address, if changed since last Report)

<PAGE>


                      INFORMATION TO BE INCLUDED IN REPORT
                      ------------------------------------

Item 5.  Other Events
---------------------

         As  disclosed  in  the  Company's  March  31,  2000  Form  10-QSB,  the
Supervisory  Agreement (the "Agreement")  entered into with the Office of Thrift
Supervision  (the "OTS")  identifies  the  Company's  wholly  owned  subsidiary,
Carnegie  Savings Bank (the "Bank"),  interest rate levels as unacceptably  high
and required the Bank to develop and pursue  strategies to reduce  interest-rate
risk ("IRR").  The Bank is currently  working to take decisive action on its IRR
position. In accordance, with its asset and liability management plan, the board
of  directors  decided  to lessen its IRR  position  by selling a portion of its
available for sale securities portfolio while simultaneously extending the terms
of the Company's  borrowings.  In implementing  these  strategies,  the board of
directors  attempted  to balance  the need to  improve  its  interest  rate risk
against  the  impact  such  restructurings  will have on  immediate  and  future
profitability.  Accordingly,  on May 25, 2000,  the Company sold $2.7 million of
its available for sale  securities and incurred a pre-tax loss of  approximately
$295,000.  With the proceeds of such sales and the extension of borrowings,  the
Company  paid down $4.3  million of its short  term  borrowings.  Although  this
strategy is  expected  to reduce the Bank's IRR in the short  term,  there is no
assurance that any additional  restructurings  in compliance  with the Agreement
will not further  adversely affect the Company's  current income.  The Agreement
will remain in place until terminated by the OTS.

         The  Company's  common stock is traded on the  over-the-counter  market
with quotations  available  through the OTC Electronic  Bulletin Board under the
symbol "CAFN".


                                        2

<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.


                                       CARNEGIE FINANCIAL CORPORATION


Date: June 8, 2000                     By: /s/Shirley C. Chiesa
                                           -------------------------------------
                                           Shirley C. Chiesa
                                           President and Chief Executive Officer





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