<PAGE>
U.S. 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 March 31, 1995
----------------------------------------
[ ] 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 0-14294
---------------------------------------------------------
GREAT FALLS BANCORP
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2545165
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
55 UNION BOULEVARD, TOTOWA, NEW JERSEY 07512
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(201) 942-1111
- --------------------------------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
---- ----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common stock $1.00 par value -
------------------------------
972,835 shares at May 10, 1995.
- -------------------------------
Transition Small Business Disclosure Format (check one);
Yes No X
----- -----
<PAGE>
GREAT FALLS BANCORP AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
Condensed Consolidated Statements of Condition
March 31, 1995 and December 31, 1994................. 3
Condensed Consolidated Statements of Income
Three months ended March 31, 1995 and 1994........... 4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1995 and 1994........... 5
Notes to Condensed Consolidated Financial Statements. 6
ITEM 2 - Management's Discussion and Analysis
or Plan of Operation.......................... 7
PART II - OTHER INFORMATION
Items 1 through 6...................................... 10
Signatures............................................. 12
2
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1- Financial Statements
--------------------
GREAT FALLS BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31,
1995 December 31,
ASSETS (Unaudited) 1994
----------- ------------
<S> <C> <C>
CASH AND DUE FROM BANKS - Non-interest-bearing........................... $ 3,165 $ 4,289
FEDERAL FUNDS SOLD....................................................... 3,290 -
-------- --------
Total cash and cash equivalents................................ 6,455 4,289
-------- --------
DUE FROM BANKS - Interest-bearing........................................ 426 424
SECURITIES: -------- --------
Available-for-sale, at fair value in 1994 and lower of cost or market..
Held-to-maturity, at amortized cost.................................... 25,064 25,403
20,406 20,297
-------- --------
45,470 45,700
LOANS HELD FOR SALE...................................................... 491 -
-------- 54,009
LOANS.................................................................... 56,195 1,233
Less - Allowance for possible loan losses.............................. 1,222 --------
-------- 52,776
Net loans...................................................... 54,973 --------
PREMISES AND EQUIPMENT, net.............................................. 629 664
-------- --------
OTHER REAL ESTATE........................................................ 559 561
-------- --------
ACCRUED INTEREST RECEIVABLE.............................................. 970 1,031
-------- --------
INTANGIBLE AND OTHER ASSETS.............................................. 1,096 1,237
-------- --------
Total assets................................................... $111,069 $106,682
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Demand
Non-interest-bearing................................................ $ 18,856 $ 21,082
Interest-bearing.................................................... 21,749 19,407
Savings............................................................... 17,438 18,649
Time.................................................................. 34,761 30,481
-------- --------
Total deposits................................................. 92,804 89,619
ACCRUED INTEREST AND OTHER LIABILITIES................................... 1,740 957
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE........................... 2,487 2,700
REDEEMABLE SUBORDINATED DEBENTURES....................................... 4,966 4,963
-------- --------
Total Liabilities.............................................. 101,997 98,239
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, without par value:
1,000,000 shares authorized, none outstanding........................ - -
Common Stock, par value $1 per share: 816 816
4,000,000 shares authorized, 816,190 shares outstanding.............. 7,314 7,314
Additional paid-in capital............................................. 1,064 847
Retained earnings...................................................... (122) (534)
Unrealized holding loss on securities available-for-sale............... -------- --------
Total shareholders' equity..................................... 9,072 8,443
-------- --------
Total liabilities and shareholders' equity..................... $111,069 $106,682
======== ========
</TABLE>
(See notes to Condensed Consolidated Financial Statements)
3
<PAGE>
GREAT FALLS BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1995 1994
-------- --------
<S> <C> <C>
INTEREST INCOME
Interest on loans, including fees................................... $1,349 $1,121
Interest on securities.............................................. 668 395
Interest on Federal Funds sold and deposits with banks.............. 18 48
------ ------
Total interest income............................... 2,035 1,564
------ ------
INTEREST EXPENSE
Interest on deposits............................................... 598 425
Interest on borrowings............................................. 156 115
------ ------
Total interest expense........................................ 754 540
------ ------
Net interest income........................................... 1,281 1,024
PROVISION FOR POSSIBLE LOAN LOSSES...................................... 60 30
------ ------
Net interest income after provision for possible loan losses.. 1,221 994
------ ------
OTHER INCOME............................................................ 116 137
------ ------
OTHER EXPENSES
Salaries and employee benefits....................................... 398 354
Occupancy and equipment.............................................. 129 129
Amortization of intangible assets and organizational costs........... 28 28
Other operating expenses............................................. 375 299
------ ------
Total other expenses........................................ 930 810
------ ------
Income before income taxes.................................. 407 321
PROVISION FOR INCOME TAXES.............................................. 150 126
------ ------
Net Income.................................................. $ 257 $ 195
====== ======
WEIGHTED AVERAGE SHARES OUTSTANDING..................................... 816 805
====== ======
NET INCOME PER SHARE.................................................... $ 0.32 $ 0.24
====== ======
</TABLE>
(See notes to Condensed Consolidated Financial Statements)
4
<PAGE>
GREAT FALLS BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1995 1994
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income......................................................... $ 257 $ 195
Adjustments to reconcile net income to net
cash provided by operating activities:............................
Depreciation and amortization.................................... 82 84
Accretion of discount on securities, net......................... ( 5) ( 15)
Realization of discount on securities sold....................... ( 36) 51
Provision for possible loan losses............................... 60 30
Increase (decrease) in accrued interest receivable............... 62 ( 11)
Increase (decrease) in other assets.............................. 115 ( 228)
Increase in accrued interest and other liabilities............... 785 141
------- -------
Net cash provided by operating activities................. 1,320 247
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities -
Purchases...................................................... (1,966) (5,661)
Sales.......................................................... 2,993 3,495
Held-to-maturity securities -
Purchases...................................................... (2,895) ( 750)
Maturities..................................................... 2,139 875
Net (increase) decrease in interest-bearing deposits with banks.. ( 2) ( 171)
Net (increase) decrease in loans................................. (2,748) (2,193)
Purchase of premises and equipment............................... ( 20) ( 116)
Proceeds of sale of other real estate............................ - 141
------- -------
Net cash used in investing activities..................... (2,499) (4,380)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts................................. 3,186 1,863
Increase in federal funds purchased.............................. - 800
Decrease in securities sold under
the agreement to repurchase................................... ( 213) -
Dividends declared............................................... ( 40) ( 29)
Unrealized gains (losses) on available-for-sale securities....... 412 ( 219)
------- -------
Net cash provided by financing activities................. 3,345 2,415
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS................ 2,166 (1,718)
------- -------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...................... 4,289 5,790
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD............................ $ 6,455 $ 4,072
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during period for:
Interest....................................................... $ 692 $ 451
Income taxes................................................... 233 213
Loans reclassified from other real estate back to loans.......... - 485
</TABLE>
(See notes to Condensed Consolidated Financial Statements)
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In the opinion of management, these unaudited condensed financial statements
contain all disclosures which are necessary to present fairly the Corporation's
consolidated financial position at March 31, 1995 and December 31, 1994 and the
consolidated results of operations and cash flows for the three-month periods
ended March 31, 1995 and 1994. The financial statements include all adjustments
which in the opinion of management are necessary in order to make a fair
presentation of the financial statements. Certain information and footnote
disclosures required under generally accepted accounting principles have been
condensed or omitted pursuant to the Securities and Exchange Commission rules
and regulations. These financial statements should be read in conjunction with
the annual financial statements and notes thereto included in Corporation's 1994
Annual Report to its stockholders as incorporated by reference in its Form 10-
KSB for the fiscal year ended December 31, 1994.
SUBSEQUENT EVENTS
- -----------------
The Corporation's acquisition of Family First Federal Savings Bank ("Family
First"), located in Clifton, New Jersey, was approved by Family First
shareholders on March 20, 1995 and the merger of Family First into the
Corporation's bank subsidiary, Great Falls Bank (the "Bank"), was completed as
of close of business April 7, 1995. As a result of the merger, two branch
locations were added to the Bank.
As of close of business April 7, 1995, the Bank assumed the assets and
liabilities of Family First. The merger was accounted for as a purchase. The
Bank's assets increased by approximately $51 million as a result of the merger.
6
<PAGE>
GREAT FALLS BANCORP AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
---------------------------------------------------------
This section presents a review of the Corporations's consolidated financial
condition at March 31, 1995 and the results of operations for the three-month
periods ended March 31, 1995 and 1994. Data is presented for both the
Corporation and subsidiaries unless otherwise noted. The review should be read
in conjunction with the audited annual financial statements, including notes
thereto, included in the Corporation's 1994 Annual Report to its stockholders as
incorporated by reference in its Form 10-KSB for its most recently ended fiscal
year ended December 31, 1994. The consolidated statement of condition as of
March 31, 1995 and the statements of operations and cash flows for the three
months ended March 31, 1995 and 1994 are unaudited but include, in the opinion
of the management, all adjustments considered necessary for a fair presentation
of such data. The term "Corporation" as used herein refers to Great Falls
Bancorp and subsidiaries and the term "Bank" as used herein refers to Great
Falls Bank and subsidiaries. All dollar figures, except for per share data, are
set forth in thousands.
A. FINANCIAL CONDITION: MARCH 31, 1995 AND DECEMBER 31, 1994
----------------------------------------------------------
As of March 31, 1995, the Corporation's total assets were $111,069, an increase
of $4,387 or 4.1% compared to the amount reported at December 31, 1994. Federal
funds sold increased from $0 to $3,290, which was largely offset by an increase
in total deposits of $3,185 for the same period.
INVESTMENT SECURITIES
- ---------------------
Investment Securities totalled $45,470 at March 31, 1994, a slight decrease of
$230 or 0.5% compared to the amount reported at December 31, 1994. Of the total,
85.6% of the investments are in U.S. Government obligations, 4.8% in U.S.
Government agency obligations and the balance in municipal and other securities.
In 1994, the Corporation implemented the Statement of Accounting Standard No.
115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS
No. 115). Under the requirements of SFAS No. 115, the Corporation segregated
its investment portfolio into held to maturity and available for sale. At March
31, 1995, based on the fair market value of its available for sale portfolio,
the Corporation recorded the difference between the unamortized cost and the
fair market value as an unrealized loss in the amount of $122, net of taxes, in
its shareholders' equity, a decrease of $412 or 77% from the unrealized loss of
$534 recorded at December 31 1994.
LOAN PORTFOLIO
- --------------
The Corporation's loan portfolio net of allowance for possible loan losses
(excluding loans held-for-sale) at March 31, 1995 totalled $54,973, an increase
of $2,197 or 4.2%, compared to the amount reported at December 31, 1994, due
primarily to increased lending activity. Loans held-for-sale increased from $0
to $491, an during the same period.
7
<PAGE>
OTHER REAL ESTATE
- -----------------
As of March 31, 1995, other real estate decreased slightly to $559, from $561
reported at December 31, 1994.
DEPOSITS
- --------
Total deposits at March 31, 1995 were $92,804, an increase of $3,185 or 3.6%
relative to the amount reported at December 31, 1994. Of the total increase,
time deposits increased by $4,280 or 134.3%, primarily due to a CD promotion
that the Bank conducted during the period, while savings deposits decreased by
$1,211 or 38.0%. Total demand deposits increased slightly during the three-month
period.
LIQUIDITY
- ---------
The Corporation maintains a liquidity position which it considers adequate to
provide funds to meet loan demand or the possible outflow of deposits. It
actively manages its liquidity position under the direction of the Bank's Asset
and Liability Management Committee. At March 31, 1995, sources of liquidity
include $3,591 in cash and due from banks, $3,290 in federal funds sold, and
investment securities available for sale of $25,064, (at fair market value).
CAPITAL
- -------
The following table summarizes the regulatory capital ratios at March 31, 1995:
<TABLE>
<CAPTION>
GREAT FALLS BANCORP GREAT FALLS BANK
------------------- ----------------
<S> <C> <C>
Equity to asset ratio........................ 8.28% 8.18%
Tier I leverage ratio........................ 8.54% 8.29%
Tier I risk based capital ratio.............. 14.69% 14.27%
Tier I and Tier II risk based capital ratio.. 22.44% 15.78%
</TABLE>
B. RESULTS OF OPERATIONS: THREE MONTHS ENDED MARCH 31, 1995 AND 1994
------------------------------------------------------------------
The Corporation earned net income of $257, or $0.32 per share, for the three-
month period ended March 31, 1995, compared to $195, or $0.24 per share, for the
same period in 1994.
Interest income increased by $471 during the first quarter of 1995 over the
first quarter of 1994. Interest income on loans and investments increased by
$228 and $273, respectively, compared to the same period in 1994. The increase
in interest income on loans is primarily due to increased volume coupled with
increases in interest rates during the first quarter of 1995 relative to the
prior year. The increase in interest income on investments is due to the
increase in average yield on the portfolio during the 1995 quarter compared to
the 1994 quarter.
Total interest expense increased by $214 for the three-month period ended March
31, 1995 over the corresponding period in the prior year. Interest expense on
interest bearing deposits increased by $173 primarily due to increases in both
volume and interest rates. Interest expense on borrowings increased by $41
relative to the same period in the prior year.
8
<PAGE>
PROVISION FOR POSSIBLE LOAN LOSSES
- ----------------------------------
The provision for possible loan losses and net charge-offs were $60 and $71,
respectively, for the three-month period ended March 31, 1995 compared to $30
and $141 for the same period in the prior year. Management reviews the adequacy
of the allowance for possible loan losses based on the results of its internal
loan review, the Bank's loan loss experience, management's estimate of the
potential loan loss exposure on each significant credit considering the
underlying collateral and the borrower's ability to pay, and present and
prospective economic conditions within the Bank's market area. Based on this
evaluation and on the trends in internally classified loans, non-performing
loans and charge-offs, management believes that the allowance for possible loan
losses is adequate at this time.
Statement of Financial Accounting Standards No. 114, "Accounting by Creditors
for Impairment of a Loan." (as amended by SFAS No. 118) was adopted effective
January 1, 1995. This statement requires that impaired loans within the scope
of the statement be measured based on the present value of expected future cash
flows discounted at the loan's effective interest rate or market price or the
fair market value of the collateral if the loan is collateral dependent.
Adoption did not have a material effect on the Corporation's consolidated
financial statements.
The following table summarizes the composition of the Corporation's non-
performing assets as of the dates indicated:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
<S> <C> <C>
Loans past due 90 days and accruing.................................. $ - $ -
Non-accruing loans................................................... 1,598 1,499
Renegotiated loans................................................... 240 241
------ ------
Total non-performing loans...................................... $1,838 $1,740
------ ------
Other real estate.................................................... 559 561
------ ------
Total non-performing assets..................................... $2,397 $2,301
====== ======
Ratio of non-performing loans to total gross loans................... 3.27% 3.21%
Ratio of non-performing assets to total gross loans.................. 4.27% 4.24%
Ratio of non-performing assets to total assets....................... 2.16% 2.16%
Ratio of allowance for possible loan losses to non-performing loans.. 66.49% 70.86%
Ratio of allowance for possible loan losses to gross loans........... 2.17% 2.28%
</TABLE>
OTHER EXPENSES
- --------------
Total other expenses increased $120 or 15% for the three-month period ended
March 31, 1995 compared to the same period in the prior year. Of the total
increase, $44 or 37% is attributable to an increase in salaries and employee
benefits and the balance consists of increases in operating expenses due to the
continued growth of Bank operations.
9
<PAGE>
GREAT FALLS BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1 - LEGAL PROCEEDINGS
- ---------------------------
None.
ITEM 2 - CHANGES IN SECURITIES
- -------------------------------
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
- -----------------------------------------
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The Corporation's annual meeting of stockholders (the "1995 Annual Meeting") was
held on April 18, 1995. The following actions were taken at the 1995 Annual
Meeting:
1. Election of Directors. In accordance with the nominations described
---------------------
in the Corporation's definitive Proxy Statement dated March 31, 1995 (the
"1995 Proxy Statement"), previously filed with the Commission, the two
nominees, Messrs. George E. Irwin and Alfred R. Urbano, were elected at the
1995 Annual Meeting as Directors for three-year terms expiring in 1998 and
until the election and qualification of their successors.
The voting was as follows:
<TABLE>
<CAPTION>
NAME OF NOMINEE VOTES FOR VOTES WITHHELD
--------------- --------- --------------
<S> <C> <C>
George E. Irwin 506,605 336
Alfred R. Urbano 506,605 336
</TABLE>
The names of the other Directors of the Corporation whose terms of office as
Director continued after the 1995 Annual Meeting (and the year in which their
respective terms will expire) are as follows: Joseph A. Lobosco (1996), John
L. Soldoveri (1996), Marino A. Bramante (1997), Robert J. Conklin (1997), and
William T. Ferguson (1997).
10
<PAGE>
2. Adoption of the 1995 Stock Option Plan. The proposal to adopt the Great
--------------------------------------
Falls Bancorp 1995 Stock Option Plan (the "1995 Plan") was approved by a
majority of the votes cast at the 1995 Annual Meeting. Copies of the 1995
Plan were previously filed with the Commission, as (i) Exhibit 10.1 to the
Corporation's Form 8-K filed for December 20, 1994 (date of earliest event
reported), and (ii) Appendix A on pages A-1 through A-4, inclusive, of the
1995 Proxy Statement.
The voting on the 1995 Plan was as follows:
<TABLE>
<S> <C>
For............... 493,637
Against........... 13,304
Abstain........... 0
Broker-Non-Votes.. 0
</TABLE>
ITEM 5 - OTHER INFORMATION
- --------------------------
The Corporation's acquisition of Family First Federal Savings Bank ("Family
First") was completed as of the close of business on April 7, 1995. At that
time, the merger of Family First into Great Falls Bank was consummated. This
merger was reported on Form 8-K filed by the Corporation on April 21, 1995.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits. None.
--------
(b) Reports on Form 8-K. Two reports on Form 8-K were filed during the
-------------------
quarter ended March 31, 1995, as follows:
1. On January 18, 1995, the Corporation filed Form 8-K reporting the adoption by
the Corporation's Board of Directors, on December 20, 1994, of the Great
Falls Bancorp 1995 Stock Option Plan, subject to approval of such plan by the
Corporation's shareholders at the 1995 Annual Meeting.
2. On March 31, 1995, the Corporation filed Form 8-K reporting Family First's
shareholders' approval of the merger with Great Falls Bank at a special
meeting of Family First's shareholders held on March 20, 1995.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GREAT FALLS BANCORP
(Registrant)
Date: May 12, 1995 By: /s/ Naqi A. Naqvi
------------ ------------------------------------------
Naqi A. Naqvi, Treasurer
(Duly Authorized Officer and Principal
Financial Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 3165
<INT-BEARING-DEPOSITS> 426
<FED-FUNDS-SOLD> 3290
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25064
<INVESTMENTS-CARRYING> 20406
<INVESTMENTS-MARKET> 20123
<LOANS> 56195
<ALLOWANCE> (1222)
<TOTAL-ASSETS> 111069
<DEPOSITS> 92804
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4227
<LONG-TERM> 4966
<COMMON> 816
0
0
<OTHER-SE> 8256
<TOTAL-LIABILITIES-AND-EQUITY> 111069
<INTEREST-LOAN> 1349
<INTEREST-INVEST> 668
<INTEREST-OTHER> 18
<INTEREST-TOTAL> 2035
<INTEREST-DEPOSIT> 598
<INTEREST-EXPENSE> 754
<INTEREST-INCOME-NET> 1281
<LOAN-LOSSES> 60
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 930
<INCOME-PRETAX> 407
<INCOME-PRE-EXTRAORDINARY> 150
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.0
<YIELD-ACTUAL> 0.0
<LOANS-NON> 1598
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1233
<CHARGE-OFFS> 84
<RECOVERIES> 13
<ALLOWANCE-CLOSE> 1222
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
