UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the period ended March 31, 1998
--------------
OR
[ ] 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 0-14671
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REPUBLIC SECURITY FINANCIAL CORPORATION
Exact name of registrant as specified in its charter)
FLORIDA 59-2335075
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4400 Congress Avenue, West Palm Beach, FL 33407
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (561)
840-1200 Securities registered pursuant to Section
12(b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed 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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Class Outstanding as of May 5, 1998
- ----- -----------------------------
Common Stock
par value $.01 24,022,192
Outstanding
<PAGE>
REPUBLIC SECURITY FINANCIAL CORPORATION AND SUBSIDIARY
INDEX
Page
PART I: FINANCIAL INFORMATION
Item 1:
Condensed Consolidated Statements of Financial Condition
March 31, 1998 and December 31, 1997.......................................1
Condensed Consolidated Statements of Income for the
three months ended March 31, 1998 and 1997.................................2
Condensed Consolidated Statements of Comprehensive Income for the
three months ended March 31, 1998 and 1997.................................3
Condensed Consolidated Statements of Shareholders' Equity
for the three months ended March 31, 1998
and the year ended December 31, 1997.......................................4
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 1998 and 1997.................................5
Notes to Condensed Consolidated Financial Statements.......................6
Item 2
Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................................9
PART II: OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K...............................11
Signatures..................................................................12
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1:
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
======================================================================================================================
March 31, December 31,
1998 1997
(amounts in thousands except share and per share data) (unaudited)
- --------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Assets
Cash and amounts due from depository institutions $33,817 $59,723
Interest-bearing deposits in other financial institutions 109,185 66,886
Federal funds sold 850 7,665
- --------------------------------------------------------------------------------- ----------------- -----------------
Total cash and cash equivalents 143,852 134,274
Investments available-for-sale 133,283 116,762
Investments held to maturity (market value of $9,771 and $10,305 at
March 31, 1998 and December, 31, 1997, respectively) 9,735 10,277
Loans - net 660,828 617,392
Loans held for sale (Market value of $9,098 and $13,828 at March 31, 1998
and December 31, 1997, respectively) 9,000 13,565
Property and equipment - net 22,461 21,625
Other real estate owned - net 2,333 2,519
Goodwill - net 6,970 7,110
Loan servicing rights - net 1,390 1,519
Accrued interest receivable 5,324 4,782
Other assets 20,930 19,455
- --------------------------------------------------------------------------------- ----------------- -----------------
Total $1,016,106 $949,280
================================================================================= ================= =================
Liabilities and Shareholders' Equity
Deposits $752,751 $742,263
Federal Home Loan Bank advances 140,000 85,000
Securities sold under agreements to repurchase 9,771 14,443
Advances from borrowers for taxes and insurance 3,762 1,835
Bank drafts payable 8,948 5,769
Other liabilities 12,476 13,814
- --------------------------------------------------------------------------------- ----------------- -----------------
Total liabilities 927,708 863,124
- --------------------------------------------------------------------------------- ----------------- -----------------
Commitments and Contingencies
Preferred stock $10.00 stated value; 10,000,000 shares authorized: Series "C" -
867,347 and 948,996 shares issued and outstanding at March 31, 1998
and December 31, 1997, respectively 8,674 9,490
Common stock $.01 par value; 100,000,000 shares authorized; 22,908,001 and
22,685,403 shares issued and outstanding at March 31, 1998
and December 31, 1997, respetively 229 227
Additional paid-in capital 54,944 53,781
Retained earnings 23,943 22,090
Unrealized gain on investments available-for-sale, net of taxes 608 568
- --------------------------------------------------------------------------------- ----------------- -----------------
Total shareholders' equity 88,398 86,156
- --------------------------------------------------------------------------------- ----------------- -----------------
Total $1,016,106 $949,280
================================================================================= ================= =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
======================================================================================================================
Three months ended March 31,
(unaudited)
(amounts in thousands except per share data) 1998 1997
- -------------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
Interest Income:
Interest and fees on loans $14,765 $12,800
Interest and dividends on investments 2,289 2,875
- -------------------------------------------------------------------------------- ------------------ -----------------
17,054 15,675
- -------------------------------------------------------------------------------- ------------------ -----------------
Interest Expense:
Interest on deposits 5,686 5,362
Interest on borrowings 898 496
- -------------------------------------------------------------------------------- ------------------ -----------------
6,584 5,858
- -------------------------------------------------------------------------------- ------------------ -----------------
Net interest income 10,470 9,817
Provision for loan losses 30 31
- -------------------------------------------------------------------------------- ------------------ -----------------
Net interest income after provision for loan losses 10,440 9,786
Non-interest Income:
Service charge on deposit accounts 1,637 1,550
Gain on sale of loans 245 71
Gain on sale of investments 168 167
Other income 725 680
- -------------------------------------------------------------------------------- ------------------ -----------------
2,775 2,468
Operating Expenses:
Employee compensation and benefits 4,183 4,004
Occupancy and equipment 1,684 1,591
Professional fees 231 368
Advertising and promotions 130 164
Communications 296 287
Data processing 409 250
Insurance 132 121
Other 1,161 1,270
- -------------------------------------------------------------------------------- ------------------ -----------------
8,226 8,055
Income before income taxes 4,989 4,199
Provision for income taxes 1,845 1,115
- -------------------------------------------------------------------------------- ------------------ -----------------
Net income $3,144 $3,084
================================================================================ ================== =================
PER SHARE DATA:
Basic earnings per common share $0.13 $0.13
Diluted earnings per common share $0.13 $0.13
Dividends per common share $0.05 $0.04
Average common shares and common stock equivalents outstanding 24,835 22,766
================================================================================ ================== =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
======================================================================================================================
Three months ended March 31,
(unaudited)
(amounts in thousands) 1998 1997
- -------------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
Net income $3,144 $3,084
Other comprehensive income, net of tax:
Unrealized gain (loss) on investments available-for-sale
arising during the period 40 (668)
- -------------------------------------------------------------------------------- ------------------ -----------------
Comprehensive income $3,184 $2,416
================================================================================ ================== =================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
==========================================================================================================================
Unrealized
Gain
(Loss) On
Investments
Additional Investments
Preferred Common Paid-in Retained Available-for-Sale,
(amounts in thousands except share data) Stock Stock Capital Earnings net of taxes
- -------------------------------------------- ------------- ------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $10,350 $216 $50,864 $25,927 ($54)
Exercise of options - 847,189 shares 9 2,032
Issuance of stock grants - 3,000 shares 27
Conversion of preferred stock series "C"
into common stock - 133,306 shares (860) 2 858
Cash dividends - common stock (2,175)
Cash dividends paid by pooled companies - common stock (2,760)
Cash dividends - preferred stock series " C" (708)
Net income 1,806
Change in unrealized gain (loss) on investments
available-for-sale, net of taxes 622
- -------------------------------------------- ------------- ------------- ------------- ------------- -------------------
Balance, December 31, 1997 9,490 227 53,781 22,090 568
Exercise of options - 91,568 shares 1 305
401(k) plan - 4,474 shares 43
Conversion of preferred stock series "C"
into common stock - 126,556 shares (816) 1 815
Cash dividends - common stock (1,139)
Cash dividends - preferred stock series "C" (152)
Net income 3,144
Change in unrealized gain (loss) on investments
available-for-sale, net of taxes 40
- -------------------------------------------- ------------- ------------- ------------- ------------- -------------------
Balance, March 31, 1998 (unaudited) $8,674 $229 $54,944 $23,943 $608
==========================================================================================================================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
===================================================================================================================
Three Months Ended March 31,
(unaudited)
(amounts in thousands) 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Activities:
Net income $3,144 $3,084
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 30 31
Depreciation and amortization 871 761
Gain on sale of investments available-for-sale (168) (167)
Gain on sale of loans (245) (71)
Loans originated for sale (5,235) (4,222)
Sale of loans and loan participation certificates 10,045 9,856
Other - net 3,272 (3,483)
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 11,714 5,789
- -------------------------------------------------------------------------------------------------------------------
Investing Activities:
Purchases of investments available-for-sale (48,845) (15,769)
Proceeds from sales and maturities of investments available-for-sale 28,551 18,985
Maturities and calls of investments held to maturity 540 2,578
Purchases of investments held to maturity (5,613)
Loans purchased for investment (31,024) (16,155)
Net increase in loans (12,447) (12,724)
Other - net 1,215 493
- -------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (62,010) (28,205)
- -------------------------------------------------------------------------------------------------------------------
Financing Activities:
Net increase (decrease) in demand deposits, NOW accounts,
Money Market accounts and savings accounts 9,284 (5,465)
Net increase (decrease) in certificates of deposits 1,204 (6,889)
Increase in FHLB advances 55,000 15,000
Other - net (5,614) (2,504)
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 59,874 142
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 9,578 (22,274)
Cash and cash equivalents at beginning of period 134,274 100,299
- -------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $143,852 $78,025
===================================================================================================================
<FN>
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, amounts due from banks and federal funds sold. Generally, federal funds
are purchased and sold for one-day periods. The Company made no income tax
payments during the quarter ended March 31, 1998 and paid $420,000 in income
taxes during the three months ended March 31, 1997. The Company paid $6,667 and
$6,426 in interest on deposits and other borrowings during the three months
ended March 31, 1998 and 1997, respectively. The Company had $246 and $777 of
transfers from loans to OREO during the three months ended March 31, 1998 and
1997, respectively.
See notes to condensed consolidated financial statements
</FN>
</TABLE>
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements include the accounts of Republic Security Financial
Corporation (the "Company" or "RSFC") and its wholly-owned subsidiary,
Republic Security Bank (the "Bank"). In the opinion of the Company's
management, the financial statements contain all adjustments
(consisting of normal recurring accruals) considered necessary to
present fairly the consolidated financial position of Republic Security
Financial Corporation and its subsidiary as of March 31, 1998 and
December 31, 1997, and the results of operations for the three months
ended March 31, 1998 and March 31, 1997, and the comprehensive results
of operations for the three months ended March 31, 1998 and March 31,
1997, and changes in cash flows for the three months then ended.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. Operating results for the three months ended
March 31, 1998 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1998. For further
information, refer to the consolidated financial statements and
footnotes thereto included in Republic Security Financial Corporation's
annual report on Form 10-K for the year ended December 31, 1997.
The balance sheet at December 31, 1997 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
2. Potential Merger
On March 26, 1998, the Company and the Bank entered into a
definitive agreement with Unifirst Federal Savings Bank ("Unifirst"), a
federally chartered, savings bank, whereby Unifirst will merge with
Republic Security Bank. At the effective time of the merger, each share
of Unifirst common stock will be converted into the number of shares of
RSFC common stock, equal to the "Conversion Rate" as defined by the
definitive agreement. The Conversion Rate is equal to the number
determined by dividing Unifirst's stock value by the RSFC average
closing price at the effective time of the merger. Unifirst is a
Federal Savings Bank, headquartered in Hollywood, Florida. As of March
31, 1998, Unifirst had assets of $140 million, deposits of $130 million
and shareholder's equity of $8 million.
3. Non-Performing Assets and Allowance for Loan Losses
At March 31, 1998, the Bank had $8.6 million in non-performing
assets (loans 90 days or more past due, other real estate owned and
repossessed assets). The provision for loan losses was $30,000 and
$31,000 for the three months ended March 31, 1998 and 1997,
respectively.
Although management uses its best judgement in underwriting
each loan, industry experience indicates that a portion of the Bank's
loans will become delinquent. Regardless of the underwriting criteria
utilized by financial institutions, losses may be experienced as a
result of many factors beyond their control including, among other
things, changes in market conditions affecting the value of security
and unrelated problems affecting the credit of the borrower. Due to the
concentration of loans in South Florida, adverse economic conditions in
this area could result in a decrease in the value of a significant
portion of the Bank's collateral.
In the normal course of business, the Bank has recognized and
will continue to recognize losses resulting from the inability of
certain borrowers to repay loans and the insufficient realizable value
of collateral securing such loans. Accordingly, management has
established an allowance for loan losses, which totaled $6.6 million at
March 31, 1998.
6
<PAGE>
The allowance for credit losses is maintained at a level
believed adequate by management to absorb estimated probable credit
losses. Management's periodic evaluation of the adequacy of the
allowance is based on the Company's past loan loss experience, known
and inherent risks in the portfolio, adverse situations that may affect
the borrower's ability to repay (including the timing of future
payments), the estimated value of any underlying collateral,
composition of the loan portfolio, current economic conditions, and
other relevant factors. This evaluation is inherently subjective as it
requires material estimates including the amounts and timing of future
cash flows expected to be received on impaired loans that may be
susceptible to significant change.
4. Commitments and Contingencies
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition established
in the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require the payment of a fee. The
total commitment amounts do not necessarily represent future cash
requirements as some commitments expire without being drawn upon. The
Bank evaluates each customer's credit worthiness on a case by case
basis. The amount of collateral obtained, if deemed necessary by the
Bank, upon extension of credit is based on management's credit
evaluation of the counter party.
At March 31, 1998, the Bank had adjustable rate commitments to
extend credit of approximately $103,000,000 excluding the undisbursed
portion of loans-in-process. These commitments are primarily for
commercial lines of credit secured by commercial real estate or other
business assets and for one-to-four family residential properties.
In addition to the above commitments and contingencies, there
are various matters of litigation pending against the Company that
management has reviewed with legal counsel. In the opinion of
management of the Company, amounts accrued for awards of assessments in
connection with these matters are adequate and ultimate resolution of
these matters will not have a material effect on the Company's
consolidated financial position, results of operations or cash flow.
5. Earnings per Common Share
The following table sets forth the computation of basic and
diluted earnings per share:
<TABLE>
<CAPTION>
=============================================================================================================
Three Months Ended
March 31,
( in thousands except per share data) 1998 1997
- ------------------------------------------------------------ --------------------------- --------------------
<S> <C> <C>
Numerator:
Net income $3,144 $3,084
Preferred stock dividends (152) (181)
- ------------------------------------------------------------ --------------------------- --------------------
Numerator for basic earnings per share - income available to common stockholders 2,992 2,903
Effect of dilutive securities:
Preferred stock dividends 152
- ------------------------------------------------------------ --------------------------- --------------------
Numerator for diluted earnings per share - income available to common
stockholders after assumed conversions $3,144 $2,903
============================================================ =========================== ====================
Denominator:
Denominator for basic earnings per share - weighted-average shares 22,908 21,611
Effective of dilutive securities:
Employee stock options 583 1,155
Convertible preferred stock 1,344
- ------------------------------------------------------------ --------------------------- --------------------
Dilutive potential common shares 1,927 1,155
- ------------------------------------------------------------ --------------------------- --------------------
Denominator for diluted earnings per share - adjusted weighted-average shares
and assumed conversions 24,835 22,766
============================================================ =========================== ====================
Basic earnings per share $0.13 $0.13
Diluted earnings per share $0.13 $0.13
=============================================================================================================
</TABLE>
At March 31, 1998, 133,000 stock options at an exercise price
of $10.38 were outstanding that could potentially dilute basic earnings
per share in the future but were not included in the computation of
diluted earnings per share for the quarter ended March 31, 1998. The
effect of these shares is antidilutive to diluted earnings per share
for the quarter ended March 31, 1998.
7
<PAGE>
6. Comprehensive Income
On January 1, 1998, the Company adopted Financial Accounting
Standards No. 130 ("FAS 130"), Reporting Comprehensive Income. FAS 130
establishes standards for reporting and displaying comprehensive income
and its components. The adoption of FAS 130 did not have a material
impact on the Company. All of the Company's other comprehensive income
relates to net unrealized gains (losses) on available-for-sale
investments.
8
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 1998 and 1997
Results of Operations
The Company had net income of $3.14 million or $.13 per common share for the
three months ended March 31, 1998, compared to net income of $3.08 million or
$.13 per common share for the three months ended March 31, 1997. Net interest
income increased $653,000 or 6% for the three months ended March 31, 1998
compared to the three months ended March 31, 1997. Non-interest income increased
$307,000 or 12% while operating expenses increased 171,000 or 2% for the three
months ended March 31, 1998 compared to the three months ended March 31, 1997.
Net Interest Income
The increase in net interest income for the quarter ended March 31,
1998 compared to the quarter ended March 31, 1997 is due to an increase of $1.38
million in interest income offset by an increase of $726,000 in interest
expense. Interest income increased primarily due to an increase of $57.10
million in interest-earning assets due to an increase in loans as a result of
loan originations and approximately $15.4 million in average loan outstandings
as a result of loan purchases. Interest expense increased primarily due to an
increase in interest-bearing liabilities. The net interest margin and net
interest spread of 5.22% and 4.36%, respectively, for the three months ended
March 31, 1998 remained relatively flat compared to the three months ended March
31, 1997.
Provision for Loan Losses
The provision for loan losses of $30,000 for the three months ended
March 31, 1998 is consistent with the provision of $31,000 for the three months
ended March 31, 1997.
Non-Interest Income
Non-interest income increased $307,000 for the three months ended March
31, 1998 compared to the three months ended March 31, 1997 due to an increase of
$174,000 in gain on sale of loans, an increase of $87,000 in service charges on
deposit accounts and an increase of $45,000 in other income. The increase in
service charges on deposit accounts is primarily due to the increase in deposit
accounts and the increase in other income is primarily a result of increases in
the volume of ATM fees and merchant services.
Operating Expenses
Operating expenses increased $171,000 for the quarter ended March 31,
1998 compared to the quarter ended March 31, 1997 primarily due to increases of
$179,000 in employee compensation and benefits, $159,000 in data processing fees
and $93,000 in occupancy and equipment expense offset by a decrease of $137,000
in professional fees and a decrease of $109,000 in other expenses. The increase
in employee compensation and benefits expenses is primarily due to the accrual
of $340,000 for Stock Appreciation Rights (SARs) for the quarter ended March 31,
1998 and additional personnel associated with two new branches opened late in
1997 as well as the new Trust and Investment division offset by cost savings
realized as a result of the mergers with Family Bank on June 30, 1997 and County
Financial Corporation on December 2, 1997. The increase in data processing fees
is due to an increase in volume as a result of growth and the conversion of
Family Bank from an in-house data processing system to the service bureau.
Occupancy and equipment expense increased due to an increase in depreciation
expense associated with additional equipment for new branches and departments as
well as upgraded equipment related to the Family Bank merger. Professional fees
were higher in 1997 due to the Premium litigation case which was settled by
County Financial Corporation in 1997. Other operating expenses decreased
primarily due to a decrease in other real estate owned expense offset by an
increase of approximately $100,000 of restructure expenses associated with the
integration of systems for County Financial Corporation in the three months
ended March 31, 1998.
9
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations (Continued)
- --------------------------------------------------------------------------------
Provision for Income Taxes
Income tax expenses increased $730,000 for the three months ended March
31, 1998 compared to the three months ended March 31, 1997 due to an increase in
the effective tax rate to 37% from 27% and an increase of $790,000 in income
before taxes. The lower rate in the quarter ended March 31, 1997 was due to a
reduction of the allowance for deferred tax assets.
Liquidity, Sources of Capital and Capital Requirements
As a member of the Federal Home Loan Bank System, the Bank is subject
to regulations which require it to maintain "long term" liquidity ratios. The
majority of the liquid assets of the Bank are investments available-for-sale,
deposits with the Federal Home Loan Bank of Atlanta and federal funds sold. The
Bank was in compliance with liquidity requirements during the three months ended
March 31, 1998.
On certain occasions, demand for loan funds may exceed cash available
from deposits. On such occasions, the Bank may borrow funds from the Federal
Home Loan Bank of Atlanta, draw on lines of credit with commercial banks and/or
enter into repurchase agreements on eligible investments.
Cash and cash equivalents increased by approximately $9.58 million
during the three months ended March 31, 1998. The increase in cash is due
primarily to an increase in FHLB advances of $55.00 million, $10.49 million
increase in deposits and $11.71 million in cash provided by operating activities
offset by $43.47 million of loan purchases and originations, an increase of
$16.60 million in net investments available-for-sale, $4.67 million decrease in
securities sold under agreements to repurchase, $1.84 million funding of life
insurance policies associated with the director retirement plan and $1.29
million in dividends paid. The majority of loan originations during the three
months ended March 31, 1998 related to commercial business and commercial real
estate loans.
The following table shows the capital amounts and ratios of the Bank at
March 31, 1998
=================================== ==================== =====================
(Dollars in thousands) Amount Ratio
- ----------------------------------- -------------------- ---------------------
Total risk based capital $77,902 11.20%
Tier 1 risk based capital $70,903 10.20%
Leverage capital $70,903 7.90%
=================================== ==================== =====================
The Bank was in compliance with its' capital requirements at March 31,
1998.
Financial Condition
As of March 31, 1998, total assets increased approximately $66.83
million or 7% from December 31, 1997. Loans-net increased approximately $43.44
million, investments increased approximately $15.98 million and cash and cash
equivalents increased $9.58 million. The increase in assets was funded primarily
by an increase of $55.00 million in FHLB advances and an increase in deposits of
approximately $10.49 million.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K
(a) No exhibits required.
(b) During the quarter ended March 31, 1998, the Company filed one Form
8-K. The Form 8-K filing, which was dated April 2, 1998, reported the definitive
agreement whereby Unifirst Federal Savings Bank will merge into the Company's
wholly owned subsidiary in a stock-for-stock transaction.
11
<PAGE>
REPUBLIC SECURITY FINANCIAL CORPORATION
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.
Republic Security Financial Corporation
(Registrant)
Date: 5/14/98 /S/ Carla H. Pollard
------- --------------------
Carla H. Pollard
Vice President/Controller
12
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 33,817
<INT-BEARING-DEPOSITS> 109,185
<FED-FUNDS-SOLD> 850
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 133,283
<INVESTMENTS-CARRYING> 9,735
<INVESTMENTS-MARKET> 9,771
<LOANS> 676,447
<ALLOWANCE> 6,619
<TOTAL-ASSETS> 1,016,106
<DEPOSITS> 752,751
<SHORT-TERM> 99,771
<LIABILITIES-OTHER> 25,186
<LONG-TERM> 50,000
0
8,674
<COMMON> 55,173
<OTHER-SE> 24,551
<TOTAL-LIABILITIES-AND-EQUITY> 1,016,106
<INTEREST-LOAN> 14,765
<INTEREST-INVEST> 2,289
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 17,054
<INTEREST-DEPOSIT> 5,686
<INTEREST-EXPENSE> 898
<INTEREST-INCOME-NET> 10,470
<LOAN-LOSSES> 30
<SECURITIES-GAINS> 168
<EXPENSE-OTHER> 8,226
<INCOME-PRETAX> 1,989
<INCOME-PRE-EXTRAORDINARY> 4,989
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,144
<EPS-PRIMARY> $.13
<EPS-DILUTED> $.13
<YIELD-ACTUAL> 5.22
<LOANS-NON> 6,158
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,663
<CHARGE-OFFS> 190
<RECOVERIES> 116
<ALLOWANCE-CLOSE> 6,619
<ALLOWANCE-DOMESTIC> 6,619
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,044
</TABLE>
