UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1995
-------------------
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 0-13108
-------
Garden State BancShares, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2549534
------------------------------- ------------------
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification No.
2290 West County Line Road, Jackson, New Jersey 08527
----------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 905-2200
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class March 31, 1995
- -------------------------- ------------------
Common Stock, No Par Value 3,029,946
<PAGE>
GARDEN STATE BANCSHARES, INC.
INDEX
Part 1: Financial Information
Item 1. - Financial Statements
Consolidated Balance Sheets at March 31, 1995
and December 31, 1994
Consolidated Statements of Operations for the Three
Months Ended March 31, 1995 and 1994
Consolidated Statement of Changes in Stockholders'
Equity for the Three months ended March 31,
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1995 and 1994
Notes to Consolidated Financial Statements
Item 2. - Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part 2: Other Information
Item 4 - Submission of Matters to a Vote of Security Holders
Item 5 - Other Information
Item 6(a) - Exhibits
Item 6(b) - Reports on Form 8-K
Signatures
<PAGE>
Part 1 - Financial Information
GARDEN STATE BANCSHARES, INC.
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
<S> <C> <C>
Assets
Cash and due from banks ................................ $ 9,131 $ 12,002
Interest bearing deposits with banks with maturities
of three months or less ........................... 220 277
Federal funds sold ..................................... 7,600 400
-------- --------
Total Cash and Cash Equivalents ............... 16,951 12,679
Investments available for sale ......................... 17,407 17,133
Investments held to maturity: (Note 2)
U.S. Treasury Securities ...................... 28,190 28,197
Obligation of other Government agencies ....... 17,077 17,346
Obligations of state and political subdivisions 5,014 5,385
Other securities .............................. 699 630
-------- --------
Total investments held to maturity ... 50,980 51,558
Loans available for sale ............................... 7,090 5,461
Loans, net of unearned income .......................... 212,948 208,097
Less: Allowance for possible loan losses ...... 4,431 4,217
-------- --------
Loans, net ........................... 208,517 203,880
Bank premises and equipment, net (Note 3) .............. 7,865 7,757
Other Real Estate Owned, net ........................... 2,671 2,930
Accrued interest receivable and other assets ........... 4,772 5,000
-------- --------
Total Assets .................... $316,253 $306,398
======== ========
<PAGE>
GARDEN STATE BANCSHARES, INC.
Consolidated Balance Sheets (Continued)
(In Thousands)
(Unaudited)
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
<S> <C> <C>
Liabilities and Stockholders' Equity
Deposits:
Demand noninterest bearing .................... $ 38,748 $ 38,859
Demand interest bearing ....................... 61,466 58,530
Savings ....................................... 59,204 64,403
Time - under $100,000 ......................... 103,228 90,568
Time - $100,000 and over ...................... 25,153 17,815
-------- --------
Total Deposits ....................... 287,799 270,175
-------- --------
Other liabilities and borrowed funds ................... 1,870 10,536
-------- --------
Total liabilities .................... 289,669 280,711
Shareholders' Equity:
Common stock, no par value
Authorized 4,088,091 shares, issued and
outstanding , 3,029,946 shares
at March 31, 1995 and 3,028,352 shares
at December 31, 1994 ................. 12,302 12,302
Capital surplus ............................... 9,175 9,150
Undivided profits ............................. 5,242 4,591
Fair market value adjustment of investments
available for sale ................... (135) (356)
-------- --------
Total stockholders' equity ............................. 26,584 25,687
-------- --------
Total liabilities and stockholders' equity .... $316,253 $306,398
======== ========
</TABLE>
<PAGE>
GARDEN STATE BANCSHARES, INC.
Consolidated Statement of Operations
(In Thousands Except for per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31, 1995 1994
---------- ----------
<S> <C> <C>
Interest Income:
Interest and fees on loans ........................ $ 4,990 $ 3,701
Interest on investments securities
Taxable .................................. 927 1,107
Exempt from federal income tax .......... 68 74
Interest on Federal funds sold ................... 128 11
Interest on cash due from banks ................... 6 32
---------- ----------
Total interest income ............................. 6,119 4,925
---------- ----------
Interest Expense:
Demand interest bearing and savings ............... 759 752
Time .............................................. 1,119 879
Time $100,000 and over ............................ 397 111
Borrowed funds .................................... 74 2
---------- ----------
Total interest expense ................... 2,349 1,744
---------- ----------
Net interest income ...................... 3,770 3,181
Provision for possible loan losses ......................... 87 323
---------- ----------
Net interest income after provision for loan losses 3,683 2,858
---------- ----------
Noninterest income:
Service charges - deposit accounts ................ 338 297
Other charges, commissions and fees ............... 303 260
Gain on sale of loans ............................. 95 163
Gain on sale of securities ........................ -- 121
Other noninterest income .......................... 11 10
---------- ----------
Total noninterest income ................. 747 851
---------- ----------
<PAGE>
GARDEN STATE BANCSHARES, INC.
Consolidated Statements of Operations (Continued)
(In Thousands Except for per Share Data)
(Unaudited)
<CAPTION>
For the three months ended March 31, 1995 1994
---------- ----------
<S> <C> <C>
Noninterest expense:
Salaries, wages ................................... 1,360 1,319
Employee benefits ................................. 389 310
Occupancy expense ................................. 292 323
Other real estate owned ........................... 197 277
FDIC premium ...................................... 173 207
Other ............................................. 1,027 869
---------- ----------
Total noninterest expense ................ 3,438 3,305
---------- ----------
Income before income taxes ............... 992 404
Income tax expense ......................................... 341 23
---------- ----------
Net income ........................................ $ 651 $ 381
========== ==========
Earnings per share of Common Stock ......................... $ 0.21 $ 0.22
========== ==========
Weighted average shares outstanding ........................ 3,028,936 1,723,977
========= =========
</TABLE>
<PAGE>
GARDEN STATE BANCSHARES, INC.
Consolidated Statement of Changes in Stockholders' Equity
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Common Capital Retained Investment
Stock Surplus Earnings Valuation Total
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1995 .......................... $12,302 $ 9,150 $ 4,591 $ (356) $25,687
Net income ........................................ -- -- 651 -- 651
Proceeds from issuance of Stock ................... -- 25 -- -- 25
Fair Market Value Adjustment of
Investments Available for Sale .................... -- -- -- 221 221
------- ------- ------- ------- -------
Balance, March 31, 1995 ........................... $12,302 $ 9,175 $ 5,242 $ (135) $26,584
======= ======= ======= ======= =======
</TABLE>
<PAGE>
GARDEN STATE BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31, 1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net Income ...................................................... $ 651 $ 381
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization ................................. 203 239
Provision for loan losses ..................................... 87 323
Provision for other real estate owned ......................... 32 52
Accretion of discount on investment securities ................ (5) (45)
Amortization of premium on investment securities .............. 47 40
Gain on sale of investments available for sale ................ -- (121)
Gain on sale of loans ......................................... (95) (163)
Gain on sale of other real estate owned ....................... -- 7
Sale of loans available for sale .............................. 2,100 4,116
Increase in income tax payable ................................ 429 --
Deferred tax benefit .......................................... (88) --
Decrease in deferred loan fees ................................ (8) (22)
Decrease in interest receivable ............................... 209 202
Increase (decrease) in interest payable ....................... 240 (52)
(Increase) decrease in purchase mortage servicing rights ...... 14 (470)
Increase in other assets ...................................... (54) (346)
Increase in other liabilities ................................. 313 470
-------- --------
Total adjustments ............................................. 3,424 4,230
-------- --------
Net cash provided by operating activities ......................... 4,075 4,611
-------- --------
Cash flows from investment activities:
Proceeds from sale of investments available for sale .............. -- 9,064
Proceeds from maturities of investments available for sale ........ 81 2,840
Proceeds from maturities of investments held to maturity .......... 762 1,277
Purchase of investment securities held to maturity ................ (212) (8,496)
Purchase of investment securities available for sale .............. -- (3,000)
Net increase in loans ............................................. (8,503) (4,889)
Recoveries of loans previously charged off ........................ 127 75
Proceeds from sale of other real estate owned ..................... 252 813
Property and equipment expenditures ............................... (311) (120)
-------- --------
Net cash applied to investing activities ........................ (7,804) (2,436)
======== ========
<PAGE>
GARDEN STATE BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In Thousands)
(Unaudited)
<CAPTION>
For the three months ended March 31, 1995 1994
-------- --------
<S> <C> <C>
Cash flows from financing activities:
Net decrease in demand deposits and savings accounts .............. (2,374) (1,164)
Net increase in time deposits ..................................... 19,998 776
Repayments of short-term borrowings ............................... (9,648) --
Proceeds from issuance of common stock ............................ 25 --
-------- --------
Net cash provided (applied to) financing activities ............. 8,001 (388)
======== ========
Net increase cash and cash equivalents ............................ 4,272 1,787
Cash and cash equivalents at beginning of year .................... 12,679 19,066
-------- --------
Cash and cash equivalents at end of year .......................... $ 16,951 $ 20,853
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest ........................................................ $ 2,109 $ 1,796
======== ========
Income taxes .................................................... -- --
======== ========
</TABLE>
Supplemental schedule of noncash investing financing activities:
During the three months ended March 31, 1995 and 1994, the Bank transferred
assets of approximately $25,000 and $1,500,000 respectively, to other real
estate owned from the loan portfolio.
<PAGE>
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying consolidated condensed financial statements as presented
for the three months ended March 31, 1995 and 1994 are unaudited and in the
opinion of Garden State BancShares, Inc. (the "Company") reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results for the unaudited periods. The financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and are not necessarily indicative
of results for the year. "The Bank", as referred to hereinafter, refers to
Garden State Bank, the Company's sole subsidiary.
2. Securities Available for Sale
The amortized cost and approximate market value (carrying value) of
securities available for sale are summarized as follows:
<TABLE>
<CAPTION>
March 31,1995
Amortized Market
Cost Value
------- -------
<S> <C> <C>
U.S. Treasury ...................................... $ 3,000 $ 2,960
Obligations of other Government agencies ........... 14,536 14,349
Other Securities ................................... 96 98
------- -------
$17,632 $17,407
======= =======
<CAPTION>
December 31,1994
Amortized Market
Cost Value
------- -------
<S> <C> <C>
U.S. Treasury ...................................... $ 3,000 $ 2,913
Obligations of other Government agencies ........... 14,617 14,106
Other Securities ................................... 109 114
------- -------
$17,726 $17,133
======= =======
</TABLE>
<PAGE>
3. Investment Securities
<TABLE>
<CAPTION>
March 31,1995
Amortized Market
Cost Value
------- -------
<S> <C> <C>
U.S. Treasury ........................................ $28,190 $27,184
Obligations of other Government agencies ............. 17,168 16,590
Obligations of State & Political Subdivisions ........ 5,014 5,103
Other Securities ..................................... 608 599
------- -------
$50,980 $49,476
======= =======
<CAPTION>
December 31,1994
Amortized Market
Cost Value
------- -------
<S> <C> <C>
U.S. Treasury ........................................ $28,197 $26,366
Obligations of other Government agencies ............. 17,346 16,314
Obligations of State & Political Subdivisions ........ 5,385 5,425
Other Securities ..................................... 630 627
------- -------
$51,558 $48,732
======= =======
</TABLE>
4. Premises and Equipment
The Bank operates from its Corporate Headquarters located in Jackson, New
Jersey. It also maintains eight branches, one is in Jackson, adjacent to the
corporate headquarters, two are in Lakewood Township, two in Dover Township, and
one each in Brick Township, Whiting and Wall Township. The Bank owns its
headquarters facility and its Brick Township and Route 70 Lakewood branch
offices. The remaining branches are leased. The Bank also owns a parcel of
undeveloped land in Jackson Township, which it periodically evaluates as a site
for a potential future branch office.
5. Regulatory Matters
Effective as of June 30, 1994 the Bank entered into a Memorandum of
Understanding (the "Bank MOU") with the Federal Deposit Insurance Corporation
(the "FDIC") and the New Jersey Department of Banking (the "Department") whereby
it agreed to undertake certain actions and refrain from certain actions in order
to correct certain deficiencies observed by the FDIC and the Department in their
examinations of the Bank. In April 1995, the FDIC and Department concluded
regulatory examinations as of December 31, 1994, and the regulators have advised
the Board of Directors that the Bank MOU will be rescinded by formal notice
shortly.
On February 4, 1993, the Company entered into a memorandum of understanding
(the "Company MOU") with the Federal Reserve Bank of Philadelphia (the "FRB") in
an effort to improve its overall financial condition. On March 21, 1995, the
Company was notified by the FRB that it had lifted the Company MOU.
6. Change in Accounting Principles
Effective January 1, 1995 the Company adopted Statement of Financial
Account Standards ("SFAS") 114, "Accounting by Creditors for Impairment of a
Loan" and SFAS 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures". SFAS 114 and SFAS 118 address the accounting
treatment of certain impaired loans. A loan is considered impaired when, based
upon current information and events, it is probable that a creditor will be
unable to collect amounts due. SFAS 114 and SFAS 118 do not apply to large
groups of smaller-balance homogeneous loans that are collectively evaluated for
impairment, loans that are measured at fair value or at the lower of cost or
fair value, leases or debt securities. Prior to January 1, 1995, the Company's
"impaired" loans were described as, and included in, "nonaccruing" loans.
In response to the above, the Company has amended its accounting policy
regarding the recognition of interest income to read as follows:
"The accrual of income on loans is generally discontinued and all interest
income previously accrued and unpaid is deducted from income when a loan becomes
more than ninety days delinquent, or when certain factors indicate reasonable
doubt as to the timely collectibility of all amounts due. Generally, loans on
which the accrual of income has been discontinued are designated as nonaccruing
loans, and includes all loans classified as "impaired" loans.
Generally, nonaccruing loans are returned to an accrual status only when
none of the principal or interest is due and unpaid and the full collectibility
of the outstanding loan balance is reasonably assured. Cash receipts on
nonaccruing loans are generally applied to the principal balance until the
remaining balance is considered fully collectible.
All financial information and schedules have been reclassified to conform
with SFAS No. 114 guidelines. Accordingly, insubstance foreclosure loans and the
associated allowance have been reclassified from Other Real Estate Owned to the
loan portfolio. Likewise, the provision for possible Other Real Estate Owned
losses associated with insubstance foreclosure loans has been reclassified from
Other Real Estate Owned expense to the provision for loan losses. Based upon
these new accounting standards as of March 31, 1995 the Company had impaired
loans of $5,573,000.
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The Company reported net income of $651,000 for the three months ended
March 31,1995, an increase of $270,000, or 70.87%, as compared to net income of
$381,000 for the same period in 1994. The primary factors contributing to the
improved performance in 1995 were an increase in net interest income of $589,000
as well as a $236,000 decrease in the provision for possible loan losses. These
factors were partially offset by a decrease in noninterest income of $104,000,
an increase in noninterest expense of $133,000 and an increase in income tax
expense of $318,000.
Net income per share for the three months ended March 31, 1995 was $0.21
compared to $0.22 for the same period last year. Per share earnings were
impacted by additional shares issued in the 1994 stock offering. Total average
shares outstanding for the first quarter of 1995 were 3,028,936 compared to
1,723,977 for the first quarter of 1994.
Interest income increased $1,194,000 or 24.24% for the first three months
of 1995 compared to the same period in 1994. The improvement was due primarily
to an increase of $1,289,000 or 34.83% in interest and fees on loans, due in
part to an increase of $32,189,000 or 17.90% in average performing loans from
$179,829,000 at March 31,1994 to $212,018,000 at March 31,1995. Additionally,
loan fees increased $44,701 or 27.00% from $165,563 for the first three months
of 1994 to $210,264 for the same period in 1995. The yield on earning assets
increased to 8.43% at March 31, 1995 compared to 7.38% at March 31, 1994.
Interest expense increased $605,000 or 34.69% from $1,744,000 for the first
three months of 1994 to $2,349,000 for the same period in 1995. Average balances
for CD's $100,000 and over increased $13,883,000 or 97.17% from $14,288,000 at
March 31,1994 to $28,171,000 for the same period in 1995. These increases were
partially offset by a $13,083,000 or 7.59% decrease in average balances for
savings accounts and CD's under $100,000. In addition, interest rates increased
significantly for CD's $100,000 and over from 1994 to 1995. Average balances for
other borrowed funds decreased $4,387,000 or 93.4% from the first quarter 1994
to the same period in 1995. Total average balances for interest bearing
liabilities increased from $239,875,000 for the first three months of 1994 to
$251,078,000 for the same period of 1995. The yield on interest bearing
liabilities increased 84 basis points from 2.95% at March 1994 to 3.79% at March
1995.The Company's interest spread increased from 4.43% for the first three
months of 1994 to 4.64% for the same period in 1995 and net interest margin
increased from 4.82% to 5.23%
The provision for possible loan losses represents charges to current
operations. The charges to current operations allow management to maintain an
allowance for possible loan losses it considers adequate to cover the risk of
losses associated with its loan portfolio. Management reviews the allowance on a
monthly basis, and monitors deteriorating loans on a continual basis. In the
first three months of 1995 management authorized charges to the provision for
loan losses of $87,000, compared to $323,000 during the first three months of
1994.
The provision for possible loan losses for the three months ended March
31,1995 of $87,000, and net recoveries of $127,000, resulted in an allowance for
possible loan losses of $4,431,000 at March 31,1995 as compared to $4,217,000 at
December 31,1994. The allowance for possible loan losses at March 31,1995
represented 78.30% of nonperforming loans at such date. The allowance for
possible loan losses plus the allowance for OREO losses represented 54.65% of
total nonperforming assets at March 31,1995. The allowance for possible loan
losses of $4,217,000 represented 82.98% of nonperforming loans at December
31,1994, while the allowance for possible loan losses and allowance for OREO
losses represented 54.41% of total nonperforming assets at such date.
Noninterest income decreased $104,000 or 12.22%, during the first three
months of 1995 compared to the first three months of 1994. The decrease was
attributable to a decline of $121,000 in gain on sale of securities and $68,000
for gain on sale of loans. These reductions in noninterest income were partially
offset by an increase of $41,000 for service charges on deposit accounts and
$43,000 for other charges, commissions, and fees. During the first three months
of 1995, the principal balance of loans sold was $2,005,000 as compared to
$3,953,000 for the same period in 1994. There were no sales of investment
securities during the first three months of 1995, whereas $8,943,000 of
securities were sold during the same period in 1994.
Noninterest expense increased $133,000 or 4.02% in the first quarter of
1995 as compared to the same period in 1994. Salaries and employee benefits
increased $120,000 or 7.37% and other expense increased $158,000 or 18.18%.
These factors were partially offset by a decrease in occupancy expense of
$31,000 or 9.6%, other real estate owned expense of $66,000 or 28.88% and FDIC
premium of $34,000 or 16.43%. The increase in salaries and benefits expense was
primarily due to a $38,000 increase in management incentives, a $25,000 increase
in medical and dental expenses and a $21,000 increase in accruals for ESOP and
401K expenses. The increase of $158,000 in other expense was due primarily to an
accrual of $110,000 as part of an estimated payment to be made in connection
with a proposed employee separation settlement, as well as a $55,000 increase in
professional and other fees and a $34,000 increase in stationary and supplies
expense. These increases were partially offset by a decrease of $72,000 for
legal fees and a $43,000 decrease in furniture and equipment expense.
Income tax expense increased $318,000 for the three months ended March
31,1995 as compared to the same period in 1994. There was no federal income tax
expense in the first quarter of 1994 due to the realization of the net operating
loss carryforward from 1993.
Financial Condition
During the first three months of 1995, total assets increased $9,855,000 or
3.22% from $306,398,000 at December 31,1994 to $316,253,000 at March 31,1995.
Total cash and cash equivalents increased by $4,272,000 or 33.69%. The held to
maturity securities portfolio remained relatively stable. The increase in the
available for sale securities portfolio of $274,000 or 1.60% was due to a
$368,000 SFAS No. 115 mark to market adjustment offset by paydowns of mortgage
backed securities. Loans, net increased $4,637,000 or 2.27%. Decreases of
$259,000 or 8.84% for other real estate owned, net and $228,000 or 4.56% for
accrued interest receivable and other assets partially offset the aforementioned
increases.
Total deposits increased $17,624,000 or 6.52% from $270,175,000 at December
31,1994 to $287,799,000 at March 31,1995. While interest bearing demand
increased $2,936,000 or 5.02%, Time under $100,000 increased $12,660,000, or
13.98% and Time $100,000 and over increased $7,338,000, or 41.19% and savings
decreased $5,199,000, or 8.07% .
Other liabilities decreased $8,666,000 or 82.25% from December 31, 1994 to
March 31, 1995. The decrease was due to a $9,648,000 decrease in securities sold
under agreement to repurchase which was partially offset by increases of
$429,000 for current taxes payable, $240,000 for accrued interest payable and
$249,000 for accrued expenses.
<PAGE>
Asset Quality
Nonperforming loans increased $577,000, or 11.35% from $5,082,000 at
December 31,1994 to $5,659,000 at March 31, 1995, while nonperforming assets
increased $275,000 or 3.30% from $8,324,000 at December 31,1994 to $8,599,000 at
March 31,1995. The table below presents on a quarterly basis loans accounted for
on a nonaccrual basis, loans which are contractually past due 90 days or more
and nonperforming assets.
<TABLE>
<CAPTION>
(In thousands) Three month period ending:
03/95 12/94 09/94 06/94
------- ------- ------- -------
<S> <C> <C> <C> <C>
Nonaccruing loans .................. $ 5,573 $ 4,869 $ 6,742 $ 8,132
Accruing loans 90 days past ........ 86 213 216 212
------- ------- ------- -------
Total Nonperforming loans .......... 5,659 5,082 6,958 8,344
Other Real Estate Owned ............ 2,940 3,242 6,756 6,625
------- ------- ------- -------
Total Nonperforming Assets ......... 8,599 8,324 13,714 14,969
Accruing TDR ....................... 1,503 1,126 1,547 1,448
------- ------- ------- -------
Total Risk Elements ................ $10,102 $ 9,450 $15,261 $16,417
======= ======= ======= =======
<CAPTION>
Three month period ending:
03/95 12/94 09/94 06/94
----- ----- ----- -----
<S> <C> <C> <C> <C>
Percentage of nonperforming loans to total loans ............ 2.57% 2.38% 3.48% 4.36%
Percentage of nonperforming assets to total loans
and other real estate owned ............................. 3.86% 3.84% 6.64% 7.56%
Percentage of nonperforming assets to total assets .......... 2.72% 2.72% 4.56% 5.07%
Percentage of allowance for possible loan losses to:
Total Loans ........................................ 2.01% 1.97% 2.03% 2.40%
Nonperforming Loans ................................ 78.30% 82.98% 58.16% 55.02%
Percentage of allowance for possible loan and OREO losses to:
Nonperforming Assets ............................... 54.65% 54.41% 34.83% 35.77%
</TABLE>
Liquidity
The Company actively manages its liquidity position under policies and
procedures intended to insure that the Company will maintain adequate levels of
available funds. Liquidity is measured by the Company's ability to raise cash at
a reasonable cost or with a minimum of loss. Liquidity planning is necessary so
that the Company will be capable of funding all obligations to its customers at
all times, from meeting their immediate cash withdrawal requirements to
fulfilling their short-term credit needs. The Company's asset liquidity consists
of cash and due from banks, money market investments, investment securities that
mature within one year and loans that mature or reprice in one year or less.
Cash and due from banks decreased $2,871,000, or 23.92% and money market
investments decreased $57,000, or 20.58% from December 31, 1994 to March 31,
1995. As of March 31, 1995 investment securities in the amount of $7,213,000
mature within one year and loans in the amount of $146,309,000 either mature or
reprice within one year.
Deposits are the most important source of funds for the Bank. Deposits
increased $17,624,000, or 6.52% from December 31, 1994 to March 31, 1995. The
deposit base encountered substantial increases in both certificates of deposit
$100,000 and over and those under $100,000, and the combined increase was
$19,998,000, or 18.45%. This increase was partially offset by a $5,199,000, or
8.07% decrease in savings deposits.
The Company had no material commitments for capital expenditures as of
March 31, 1995.
Capital
The table below presents selected ratios for the quarter ended March 31,
1995:
<TABLE>
<CAPTION>
Bank Company Regulatory
Minimum
Risk Based Capital 03/31/95 03/31/95 03/31/95
- ------------------ -------- -------- --------
<S> <C> <C> <C>
Tier I .................... 13.63% 13.66% 4.00%
Total ..................... 14.88% 14.91% 8.00%
Leverage .................. 8.44% 8.46% 6.00%
</TABLE>
Part II - Other Information
Item 4 - Submission of Matters to a Vote of Security Holders
On or about March 27, 1995, Registrant mailed to its shareholders a proxy
statement (Proxy Statement) for the purpose of soliciting proxies for use at its
Annual Meeting of Shareholders. The proxies were solicited pursuant to
Regulation 14A of the Securities Exchange Act of 1934 and there was no
solicitation in opposition thereto.
At the Annual Meeting, held April 18, 1995, the shareholders approved the
following proposals as set forth in the Proxy Statement:
1. The election of four directors.
2. Approval of the 1995 Officers and Employees Incentive Stock Option Plan which
provides for up to 55,000 shares of stock to be issued to officers and
employees of the Corporation and its subsidiaries.
3. Such other business as may properly come before the Meeting.
Item 5 - Other Information
The Company is listed on the NASDAQ Small-Cap Market under the symbol GRDN and
is also listed on the Boston Stock Exchange under the symbol GSB. Ryan Beck &
Co., Janney Montgomery Scott, Inc., Sandler, O'Neill & Partners, and Herzog,
Heine, Geguld, Inc. serve as market makers for the stock.
Item 6(a) - Exhibits
(a)(3) Exhibits
Lists of Exhibits
(3)(a) Certificate of Incorporation of the Company (Incorporated by
reference to GSB's Registration Statement on Form S-14, filed September
5, 1984 (Exhibit II).
(b) Amendment to Certificate of Incorporation of the Company
(Incorporated by reference to GSB's Form 10-K for the year ended
December 31, 1990 (Exhibit 3.b)).
(c) By-laws of the Company (Incorporated by reference to GSB's
Registration Statement on Form S-14, filed September 5, 1984 (Exhibit 3
Part II).
Item 6(b) - Reports on Form 8-K
The Company filed a current report on Form 8-K on April 26, 1995 under Item
5 of Form 8-K regarding the Company's first quarter 1995 results and, in the
exhibits to Form 8-K listed certain amended and restated change of control
agreements, and is incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
Garden State BancShares, Inc.
Date: May 12, 1995 THEODORE D. BESSLER
-----------------------------------
Theodore D. Bessler
President and Chief Executive
Officer
Date: May 12, 1995 ROBERT T. ENGLISH
-----------------------------------
Robert T. English
Sr. Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 9,131
<INT-BEARING-DEPOSITS> 220
<FED-FUNDS-SOLD> 7,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 17,407
<INVESTMENTS-CARRYING> 50,980
<INVESTMENTS-MARKET> 49,476
<LOANS> 220,038
<ALLOWANCE> 4,431
<TOTAL-ASSETS> 316,253
<DEPOSITS> 287,799
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,870
<LONG-TERM> 0
<COMMON> 12,302
0
0
<OTHER-SE> 14,282
<TOTAL-LIABILITIES-AND-EQUITY> 316,253
<INTEREST-LOAN> 4,990
<INTEREST-INVEST> 995
<INTEREST-OTHER> 134
<INTEREST-TOTAL> 6,119
<INTEREST-DEPOSIT> 2,275
<INTEREST-EXPENSE> 2,349
<INTEREST-INCOME-NET> 3,770
<LOAN-LOSSES> 87
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,438
<INCOME-PRETAX> 992
<INCOME-PRE-EXTRAORDINARY> 992
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 651
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
<YIELD-ACTUAL> 8.43
<LOANS-NON> 5,573
<LOANS-PAST> 86
<LOANS-TROUBLED> 1,503
<LOANS-PROBLEM> 2,752
<ALLOWANCE-OPEN> 4,217
<CHARGE-OFFS> 39
<RECOVERIES> 166
<ALLOWANCE-CLOSE> 4,431
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 4,431
</TABLE>
