U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
X Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934 for
the Quarterly Period Ended June 30, 1998,
or
Transition Report Under Section 13 or
15(d) of the Exchange Act for the
Transition Period from _________________
to _________________.
Commission file number 0-14555
FIRST LEESPORT BANCORP, INC.
(Exact name of Small Business Issuer as specified in its charter)
PENNSYLVANIA
(State or other jurisdiction of
incorporation or organization)
23-2354007
(I.R.S. Employer
Identification No.)
133 North Centre Avenue
Leesport, Pennsylvania 19533
(Address of principal executive offices) (Zip Code)
(610) 926-2161
(Registrant's telephone number, including area code)
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.
Class Outstanding at August 1, 1998
Common Stock ($5.00 par value) 1,191,371 Shares
<PAGE>
<TABLE>
Part I - FINANCIAL INFORMATION
FIRST LEESPORT BANCORP, INC. AND SUBSIDIARY
UNAUDITED, CONSOLIDATED, CONDENSED BALANCE SHEETS
(Amounts in thousands)
<CAPTION>
June 30 Dec. 31
ASSETS 1998 1997
______ ______
<S> <C> <C>
Cash and Due from Banks $ 4,219 $ 5,456
Interest-bearing Deposits in Other Banks 132 100
______ ______
Total Cash and Balances Due from Banks 4,351 5,556
Federal Funds Sold 0 0
Securities Available for Sale 48,292 38,346
Loans, Net of Unearned Income 140,399 129,779
Less: Allowance for Loan Losses (1,602) (1,483)
_______ _______
Net Loans 138,797 128,296
Bank Premises and Equipment, Net 5,032 3,844
Accrued Interest Receivable and Other Assets 4,709 4,223
_______ _______
Total Assets 201,181 180,265
LIABILITIES
Deposits:
Non-interest Bearing $ 21,688 $ 18,466
Interest Bearing 142,408 130,033
_______ _______
Total Deposits 164,096 148,499
Federal Funds Purchased 2,588 3,814
Short-term Borrowings 5,000 8,000
Long-term Debt 10,000 0
Accrued Interest Payable and Other Liabilities 1,346 1,789
_______ _______
Total Liabilities 183,030 162,102
STOCKHOLDERS' EQUITY
Common Stock, $5.00 Par Value per Share;
Authorized 2,000,000 Shares, Issued 1,200,000
Shares. $ 6,000 $ 6,000
Surplus 3,003 3,000
Retained Earnings 8,947 8,850
Net Unrealized Appreciation on
Securities Available for Sale, Net of Taxes 319 434
Treasury Stock, 1998 - 8,629; 1997 - 8,829
Shares at Cost (118) (121)
_______ _______
Total Stockholders' Equity 18,151 18,163
_______ _______
Total Liabilities and Stockholders' Equity 201,181 180,265
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<PAGE>
<TABLE>
FIRST LEESPORT BANCORP, INC. AND SUBSIDIARY
UNAUDITED, CONSOLIDATED, CONDENSED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
1998 1997 1998 1997
_______ _______ _______ _______
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest & Fees on Loans $ 2,887 $ 2,479 $ 5,547 $ 4,923
Interest on Federal Funds Sold 15 7 37 14
Interest on Securities:
Taxable 586 525 998 999
Tax-exempt 139 147 276 295
_____ _____ _____ _____
TOTAL INTEREST INCOME 3,627 3,158 6,858 6,231
INTEREST EXPENSE
Interest on Deposits 1,674 1,386 3,213 2,716
Interest on Borrowed Funds 209 104 314 180
_____ _____ _____ _____
TOTAL INTEREST EXPENSE 1,883 1,490 3,527 2,896
_____ _____ _____ _____
NET INTEREST INCOME 1,744 1,668 3,331 3,335
Provision for Loan Losses 155 120 245 260
Net Interest Income after _____ _____ _____ _____
Provision for Loan Losses 1,589 1,548 3,086 3,075
OTHER INCOME
Customer Service Fees 44 74 118 144
Mortgage Banking Activities 118 22 186 115
Other Income 146 123 245 170
Realized Gain on Sale of Securities 0 5 32 5
_____ _____ _____ _____
TOTAL OTHER INCOME 308 224 581 434
OTHER EXPENSES
Salaries and Benefits 710 656 1,480 1,238
Occupancy Expense 130 96 247 214
Furniture and Equipment Expense 104 72 199 148
Computer Services 63 72 178 144
Other Operating Expenses 633 453 1,074 874
_____ _____ _____ _____
TOTAL OTHER EXPENSES 1,640 1,349 3,178 2,618
_____ _____ _____ _____
Income Before Income Taxes 257 423 489 891
Federal Income Taxes 48 94 81 211
_____ _____ _____ _____
NET INCOME 209 329 408 680
EARNINGS PER SHARE DATA
Based on Average Shares Outstanding 1,191,204 1,191,188
1,191,171 1,191,171
Basic Earnings per Share 0.17 0.28 0.34 0.57
Dividends 0.13 0.13 0.26 0.26
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<PAGE>
<TABLE>
FIRST LEESPORT BANCORP, INC. AND SUBSIDIARY
UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
<CAPTION>
Six Months Ended
June 30,
1998 1997
_____ _____
<S> <C> <C>
Net Income $ 408 $ 680
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities
Arising during the period, net of tax
Expense (benefit) 1998 - ($59); 1997 - $0. (94) 0
Less: Reclassification adjustments for
Gains included in net income net of tax
Expense (benefit) 1998 - $11; 1997 - $2. 21 3
____ ____
Other comprehensive income (115) (3)
____ ____
Comprehensive income $ 293 $ 677
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<PAGE>
<TABLE>
FIRST LEESPORT BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except per share data)
<CAPTION>
Six Months Ended
June 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 408 $ 680
Provision for loan losses 245 260
Provision for depreciation and amortization 194 135
Net amortization (accretion) of securities
premiums and discounts (10) 4
Realized gain on sale of securities (32) (5)
Loans originated for sale (11,146) (1,001)
Proceeds from sales of loans 11,332 1,094
(Gain) on sales of loans (186) (93)
(Increase) Decrease in accrued interest receivable
and other assets (405) (103)
Increase (Decrease) in accrued interest payable
and other liabilities (443) (236)
_____ _____
NET CASH PROVIDED BY OPERATING ACTIVITIES (43) 735
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities:
Proceeds from principal repayments and maturities
of securities 3,601 3,945
Proceeds from sales of securities 1,008 0
Purchase of securities (14,710) (7,037)
Net decrease in federal funds sold 0 419
Loans made to customers, net of repayments (10,746) (9,037)
Purchases of bank premises and equipment (1,382) (59)
______ ______
NET CASH USED IN INVESTING ACTIVITIES (22,229) (11,769)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 15,597 5,810
Net decrease in federal funds purchased (1,226) 2,200
Net repayments of short-term borrowings (3,000) 3,000
Proceeds from long-term debt 10,000 0
Dividends paid (310) (310)
Issuance of Treasury Stock 6 0
_____ ______
NET CASH PROVIDED BY FINANCING ACTIVITIES 21,067 10,700
Decrease in cash and cash equivalents (1,205) (334)
Cash and cash equivalents: Beginning 5,556 5,199
_____ _____
Ending 4,351 4,865
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
Interest paid $ 3,531 $ 2,895
Income taxes paid 180 310
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. The financial information included herein is unaudited, however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary
for a fair statement of the results for the interim periods. All
significant intercompany accounts and transactions have been eliminated.
2. The results of operations for the six-month period ended June 30,
1998 are not necessarily indicative of the results to be expected for the
full year.
3. The Financial Accounting Standards Board issued Statement No. 130,
"Reporting Comprehensive Income", in June 1997. The Company adopted the
provisions of the new standard in the first quarter of 1998. In
accordance with the Statement, prior year financial statements have been
reclassified in order to be consistent with the current year
presentation. The only comprehensive income item that the company
presently has is unrealized gains (losses) on securities available for
sale.
4. There were no loans held for sale at June 30, 1998.
5. The Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities", in June
1998. The effect of adopting the provisions of this Statement is not
expected to have a material impact on the Company's financial position or
results of operations.
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Financial Condition
The Company's resources increased by 11.6% between December 31, 1997 and
June 30, 1998, growing by $20,916,000 between the two dates. At June 30,
1998, total assets amounted to $201,181,000 compared with $180,265,000 at
December 31, 1997. Within this growth, Securities Available for Sale
increased by $9,946,000 and Net Loans increased by $10,501,000.
The securities available for sale portfolio grew in order to take
advantage of an arbitrage opportunity during April of 1998. The Company
borrowed $10,000,000 from the Federal Home Loan Bank of Pittsburgh and
invested it in U.S. Government Agency obligations while locking in a 110
basis point spread for two years. In addition, corporate securities of
$976,000 were sold resulting in a gain of $32,000. Many of the securities
that matured or were called during the period were replaced with similar
amounts of agency securities or adjustable mortgage-backed securities.
Many of the agency securities that were added to the portfolio include
call features. In all likelihood, these call features probably will be
exercised and the Bank may have to replace, and thereby reprice, these
securities prior to their stated maturity dates. For purposes of asset-
liability management, however, these callable securities are categorized
by their final maturity dates.
Net Loans increased by 8.2% from $128,296,000 at December 31, 1997 to
$138,797,000 at June 30, 1998 primarily due to growth in the mortgage
portfolio and the commercial loan portfolio. These two categories
accounted for over 90% of the increase. The mortgage portfolio increased
by $ 5,045,000 between the two dates and the commercial loan portfolio
increased by $ 4,554,000 between December 31, 1997 and June 30, 1998 as
well. During this period, sales of mortgages into the secondary market
increased by $8,980,000 over and above the net growth of $5,045,000 noted
above.
The Allowance for Possible Loan Losses increased by $119,000 between
December 31, 1997 and June 30, 1998. The Allowance is reviewed
continually by management to ensure that an adequate reserve has been
established to meet any potential losses resulting from loan problems or
identified potential problems. With the Allowance representing 1.14% of
Total Loans at June 30, 1998, management feels that an adequate reserve
has been established.
Between December 31, 1997 and June 30, 1998, Cash and Cash Equivalents
decreased by $1,205,000 or 21.7% from $5,556,000 to $4,351,000. Much of
this decrease, 98.6%, was offset by increases in Bank Premises and
Equipment during the first six months of 1998. The Bank opened a full
service office in the Borough of Hamburg, Pennsylvania, early in 1998 and
installed a wide area network throughout the Bank during the first
quarter of the year.
Presently, the Bank is constructing another new office at the
intersections of Routes 73 and 662 in Ruscombmanor Township in Berks
County, Pennsylvania. This office is expected to open early in September
and will include an automated teller machine as well as safe deposit
facilities. It will not include a drive-up facility however. In addition,
some hardware and software that had to be replaced in order to be
compliant with the Year 2000 requirements were installed during the
period.
Deposits increased by $15,597,000 or 10.5% between December 31, 1997 and
June 30, 1998 growing from $148,499,000 to $164,096,000. In addition to
the Hamburg Office noted above, the Bank has targeted deposits for growth
during 1998. To this end, the Bank has established a money market account
tied directly to the 91-day U.S. Treasury Bill rate and has created
additional tiered-rate products to provide a more flexible array of
deposit products for customers. The Bank now offers additional IRA
products and terms, and has established Roth IRA products as well.
While this deposit growth is encouraging, the Bank has increased its
total resources through other sources. Outstanding borrowings from
correspondent banking affiliates, primarily the Federal Home Loan Bank of
Pittsburgh, have increased by $5,774,000 or 48.9% between December 31,
1997 when they totaled $11,814,000 to June 30, 1998 when they amounted to
$17,588,000. Management reviews its relationship with the Federal Home
Loan Bank regularly and feels comfortable with the level of funds
borrowed at this time. Available credit lines are adequate to continue to
support this strategy.
Stockholders' Equity decreased between the two dates, declining by
$12,000 from $18,163,000 at December 31, 1997 to $18,151,000 at June 30,
1998 as dividends paid and changes in unrealized security gains and
losses more than offset the amount of earnings retained.
Expressed in per share data, Stockholders' Equity amounted to $15.24 at
June 30, 1998 compared to $15.25 at December 31, 1997. At June 30, 1998,
the Company's total risk-weighted capital ratio was 15.13% compared with
15.94% at December 31, 1997. The regulatory required minimum ratio is
8.00%. In addition, the Company's leverage ratio is at 9.15% as of June
30, 1998 down from 9.72% as of December 31, 1997. The regulatory required
minimum ratio is 3.00%.
Results of Operations
Three Month Periods Ended June 30, 1998 and 1997
Total interest income for the three months ended June 30, 1998 was
$3,627,000 compared with $3,158,000 for the same period in 1997, an
increase of $469,000 or 14.9%. Within this component, interest and fees
on loans increased by $408,000 or 16.5% between the two periods.
Growth in interest on securities and federal funds sold of $61,000 or
9.0% between the second quarter of 1997 and the second quarter of 1998
helped increase this total as the effort to grow the Bank's resources
helped generate additional interest income.
Interest expense on deposits increased by $288,000 or 20.8% between the
three month period ended June 30, 1997 and the three month period ended
June 30, 1998 growing from $1,386,000 to $1,674,000 respectively.
Meanwhile, with the additional borrowings from the Federal Home Loan Bank
helping to fund the Bank's growth, interest on borrowed funds increased
dramatically, 101.0% or $105,000 between the two periods. For the second
quarter of 1997 this expense amounted to $104,000 while the second
quarter of 1998 reflected a total of $209,000.
Both of these factors combined to increase total interest expense by
$393,000 or 26.4% between the three months ended June 30, 1997 and 1998.
As a result of these shifts, net interest income increased by $76,000 or
4.6% from $1,668,000 for the second quarter of 1997 to $1,744,000 for the
second quarter of 1998.
The provision for loan losses taken from the second quarter's earnings
for 1998 amounted to $155,000 compared with $120,000 for the same period
in 1997. A monthly review of the level of potential problem loans
combined with loans that were charged-off during the period required this
additional provision during May of 1998.
The level of net interest income after the provision for loan losses for
the three months ended June 30, 1998 was $1,589,000 which was $41,000 or
2.6% higher than the amount recorded during the same period in 1997.
Total other income increased by $84,000 or 37.5% between the second
quarter of 1997 and the second quarter of 1998 growing from $224,000 to
$308,000 respectively. Mortgage banking activities provided $96,000
toward this net figure as the level of loans sold during the period
increased dramatically. A reduction in customer service fees from $74,000
to $44,000 between the two periods is attributed to a more customer
friendly service charge routine and the introduction of free checking
products to help the Bank more effectively compete in its market area.
Other income, including ATM surcharge fees which were introduced during
the third quarter of 1997 increased from $123,000 for the second quarter
of 1997 to $146,000 for the second quarter of 1998.
Management recognizes the need to continue to find ways to increase non-
interest related income and is working to strengthen this piece of the
income stream.
Total other expenses increased by $291,000 or 21.6% from $1,349,000 for
the second quarter of 1997 to $1,640,000 for the second quarter of 1998.
Included within this increase, salaries and benefits increased by $54,000
or 8.2% due to additional staff needed to support the expanded retail
delivery system.
Combined occupancy Expenses and Furniture and Equipment Expense
increased by $66,000 or 39.3% between the three month periods ended June
30, 1997 and 1998 growing from $168,000 to $234,000 respectively. These
expenses reflect the additional costs associated with the implementation
of a bank-wide computer network and the costs of opening the Hamburg
Office and its associated furniture and equipment.
Other operating expenses which includes supplies, forms, and related
costs, increased by $180,000 or 39.7% between the two quarters. Also
included within this category is marketing and advertising costs needed
to promote the opening of the Hamburg office.
Income before income tax expense declined by $166,000 or 39.2% between
the two periods because of the above. With the resulting decline in
income tax expenses between the two periods, net income decreased by
$120,000 or 36.5% between the second quarter of 1997 and the second
quarter of 1998. Earnings per share decreased from $0.28 per share form
the second quarter of 1997 to $0.17 per share for the second quarter of
1998. The dividend rate remained the same at $0.13 per share.
Six-Month Periods Ended June 30, 1998 and 1997
Total interest income increased by $627,000 or 10.1% between the first
six months of 1997 and 1998 growing from $6,231,000 to $6,858,000
respectively. All of this increase came from interest and fees on loans
that increased by $624,000 between the two periods. This increase is a
direct result of the increased level of lending activity during the
period.
Interest on deposits increased $497,000 or 18.3% in 1998 as a result of a
renewed effort by management to focus on deposit growth. Additional
interest expense was paid on borrowed funds, the majority of which was
paid to the Federal Home Loan Bank of Pittsburgh. This category increased
by $134,000 representing 74.4% growing from $180,000 to $314,000 between
the two periods.
Total interest expense increased by $631,000 or 21.8% to support the
growth in resources noted above. The resulting net interest income
amount, however, remained stable.
The provision for loan losses decreased slightly, $15,000 or 5.8% between
the first half of 1997 and the first half of 1998 and amounted to
$245,000 at June 30, 1998 compared with $260,000 at June 30, 1997.
Net interest income after the provision for loan losses increased by
$11,000 or 0.4% between the two periods, growing from $3,075,000 for the
six months ended June 30, 1997 to $3,086,000 for the six months ended
June 30, 1998.
Total other income increased by $147,000 or 33.9% between the first half
of 1997 and the first half of 1998 with half of this increase $71,000,
coming from an increase in income from mortgage banking activities.
Income generated by mortgage banking activities grew to $186,000 for the
first six months of 1998 up from $115,000 for the same period in 1997, an
increase of 61.7%. In addition, while income from customer service fees
declined by $26,000 due to changes in the deposit service fee schedule
and product designs, other income increased by $75,000 or 44.1% between
the two periods. An additional $27,000 in gains on the sale of securities
was recognized in 1998 compared with 1997.
Total other expenses increased by $560,000 or 21.4% from the six months
ended June 30, 1997 when it totaled $2,618,000 to the $3,178,000 for the
first six months of 1998. Almost half of this increase $242,000
representing 19.5% growth since last year, came in the salaries and
benefits area as the costs of staffing a new office along with extending
the number of hours helped increase these expenses from $1,238,000 to
$1,480,000 between the two periods.
Costs associated with buildings and equipment increased by $84,000 or
23.2% between the first half of 1997 and the first half of 1998
reflecting the expansion of the retail network in the Hamburg Area. Other
operating expenses increased by $200,000 or 22.9% between the two periods
growing from $874,000 for the first six months of 1997 to $1,074,000 for
the first six months of 1998. Contributing to this increase were
marketing related promotions of the new deposit products in addition to
the Hamburg Office, and professional and consulting expenses associated
with the design and installation of the local area network.
Income before income tax expense decreased by $402,000 or 45.1% between
the two periods resulting in a decrease in income tax expense as well.
Income tax expense decreased by $130,000 or 61.6% declining from $211,000
for the first half of 1997 compared with $81,000 for the first half of
1998. The resulting net income of $408,000 for the first six months of
1998 represents a decrease of $272,000 or 40.0% from the $680,000 earned
during the first half of 1997.
Earnings per share for the first six months of 1998 were $0.34 per share
compared with $0.57 per share in 1997. During the period, dividends paid
per share remained constant at $0.26 per share.
Year 2000
The Bank has established a Year 2000 committee to address the issues
associated with how computers store and process date information and how
that will be affected by the turn of the Century. The Committee consists
of individuals throughout the Bank and has been charged with assessing
the impact, identifying affected equipment, resolving problems, and
testing the solutions. A regulatory deadline of the end of 1998 has been
established for this process.
The Bank will also be working very closely with its data processing
provider, Bisys, of Cherry Hill, New Jersey, to integrate and test all
critical computer-based applications. While the estimated expense to the
Bank during 1998 is not expected to exceed $50,000, the Bank's investment
in hardware and software to address the problem may be substantially
higher.
One of the key processing components has already been scheduled for
replacement during October 1998 and will cost approximately $30,000 for
both hardware and software. Testing of all of the critical applications
will take place throughout the fourth quarter of 1998, and the Bank has
established a contingency plan in conjunction with Bisys in the event
that key components may not test accurately.
Minor, sub-applications have already been reviewed along with all of the
network hardware installed early in 1998. One software package was
replaced as part of that review at a cost of $20,000. Communications with
many loan customers have been established to ascertain what exposure the
Bank may realize in the event these customers are not ready for the year
2000.
Liquidity and Interest Rate Sensitivity
The banking industry has been required to adapt to an environment in
which interest rates have been volatile and deposit deregulation has
provided customers with the opportunity to invest in liquid, interest
rate-sensitive deposits. The banking industry has adapted to this
environment by using a process known as asset/liability management.
Adequate liquidity means the ability to obtain sufficient cash to meet
all current and projected needs promptly and at a reasonable cost. These
needs include deposit withdrawal, liability runoff and increased loan
demand. The principal sources of liquidity are cash and due from banks,
money market investments, and all unpledged investment securities
maturing within one year. Maturing loans and loan payments are another
source of liquidity. The Bank can also package and sell residential
mortgage loans in the secondary market. Other sources of liquidity are
the federal funds market, term borrowings from the Federal Home Loan
Banking System, and the discount window of the Federal Reserve Banking
System. In view of all factors involved, the
Bank's management believes that liquidity is being maintained at an
adequate level.
Asset/liability management is intended to provide for adequate liquidity
and interest rate sensitivity by matching interest rate-sensitive assets
and liabilities and coordinating maturities on assets and liabilities.
Approximately 32% of the loan portfolio is sensitive to interest rate
changes and may reprice within the next year. Other loans are written for
relatively short terms and, except for the majority of residential
mortgage loans, provide for a readjustment of the interest rate at
specified times during the term of the loan. In addition, interest rates
offered for all types of deposit instruments are reviewed weekly and are
established on a basis consistent with funding needs and maintaining a
desirable spread between cost and return. The Bank does not use
repurchase agreements, reverse repurchase agreements, interest rate
swaps, or other derivative products in its asset/liability management
practices at this time.
The Bank's one-year interest sensitivity gap is negative $56,979,000
Representing a larger pool of repricing deposits than earning assets. In
a rising rate environment, the cost to maintain this pool of funds will
rise resulting in a smaller net interest margin.
<PAGE>
<TABLE>
The following table shows the repricing periods of interest earning
assets and interest bearing liabilities as of March 31, 1998:
INTEREST RATE SENSITIVITY
(Amounts in thousands)
<CAPTION>
Repricing Period
Within One Year to Over
One Year Five Years Five Years Total
<S> <C> <C> <C> <C>
Interest Earning Assets:
Interest-bearing Balances $ 132 $ 0 $ 0 $ 132
Federal Funds Sold 0 0 0 0
Securities 8,555 10,326 29,411 48,292
Net Loans 44,762 29,148 64,887 138,797
_______ _______ _______ ________
Total Interest Earning
Assets $53,449 $39,474 $94,298 $187,221
Interest Earning Liabilities:
Total Interest-Bearing
Deposits $102,840 $39,568 $ 0 $142,408
Other Borrowed Funds 7,588 10,000 0 17,588
________ _______ _______ ________
Total Interest Earning
Liabilities $110,428 $49,568 $ 0 $159,996
________ _______ _______ ________
Rate Sensitivity Gap $(56,979) $(10,094) $94,298 $ 27,225
________ _______ _______ ________
<FN>
</TABLE>
Capital Adequacy
The following table provides information about the capital of the Bank as
it relates to regulatory minimums as of selected Balance Sheet dates:
<TABLE>
<CAPTION>
Actual Actual
Regulatory June 30, Dec. 31,
Minimum 1998 1997
<S> <C> <C> <C>
Tier I Capital to Risk-Adjusted Assets 4.00% 13.89% 14.69%
Total Capital to Risk-Adjusted Assets 8.00% 15.13% 15.94%
Leverage Ratio 3.00% 9.15% 9.72%
</TABLE>
<PAGE>
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 Vote of Security Holders
The Annual Meeting of the Stockholders of the Company was
held on April 14, 1998. The following individuals continued
as directors after the meeting:
John T. Connelly Michael D. Mathias
Joseph M. Fabrizio Harry J. O'Neill, III
Richard L. Henr Karen A. Rightmire
William J. Keller Alfred J. Weber
Louis D. Bruno Daniel W. Weist
A second item approved by the stockholders was the
appointment of Beard & Company, Inc. of Reading, Pennsylvania
as the Company's external auditors for the year ending 1998.
This appointment is for a one year term.
770,636 shares were voted for ratification of the
appointment of Beard & Company, Inc.
1,836 shares were voted against, and
22,980 shares were not voted.
Item 5. Other Information
The Board of Directors of First Leesport Bancorp, Inc. at its
June 16, 1998 meeting, declared a $.13 per share cash
dividend to be paid July 15, 1998 to holders of record on
July 1, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
<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.
FIRST LEESPORT BANCORP, INC.
(Registrant)
Dated: August 14, 1998 By Raymond H. Melcher, Jr.
Raymond H. Melcher, Jr.
President and
Chief Executive Officer
Dated: August 14, 1998 By Frederick P. Henrich
Frederick P. Henrich
Treasurer and
Chief Accounting Officer
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> QTR-2
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 4219
<INT-BEARING-DEPOSITS> 132
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 48292
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 140399
<ALLOWANCE> 1602
<TOTAL-ASSETS> 201181
<DEPOSITS> 164096
<SHORT-TERM> 7588
<LIABILITIES-OTHER> 1346
<LONG-TERM> 10000
<COMMON> 6000
0
0
<OTHER-SE> 12151
<TOTAL-LIABILITIES-AND-EQUITY> 201181
<INTEREST-LOAN> 5547
<INTEREST-INVEST> 1274
<INTEREST-OTHER> 37
<INTEREST-TOTAL> 6858
<INTEREST-DEPOSIT> 3213
<INTEREST-EXPENSE> 3527
<INTEREST-INCOME-NET> 3331
<LOAN-LOSSES> 245
<SECURITIES-GAINS> 32
<EXPENSE-OTHER> 3178
<INCOME-PRETAX> 489
<INCOME-PRE-EXTRAORDINARY> 489
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 408
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
<YIELD-ACTUAL> 3.76
<LOANS-NON> 1124
<LOANS-PAST> 955
<LOANS-TROUBLED> 2356
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1483
<CHARGE-OFFS> 177
<RECOVERIES> 51
<ALLOWANCE-CLOSE> 1602
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1602
</TABLE>
