3
THIS PAPER DOCUMENT IS BEING SUBMITTED PURSUANT TO
RULE 901(d) OF REGULATION S-T.
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1995
Commission File No. 0-14995
YORK FINANCIAL CORP.
(Exact name of Registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation or
organization)
23-2427539
(I.R.S. employer identification number)
101 South George Street, York, Pa. 17401
(Address of principal executive offices)
(Zip code)
(717) 846-8777
Registrant's telephone number, including area code
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, 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.
Common stock, par value $1.00 per share 6,016,772 shares
outstanding as of December 31, 1995.
YORK FINANCIAL CORP.
INDEX
Page
Part I. FINANCIAL INFORMATION
Number
Item 1. Financial Statements
Consolidated balance sheets
December 31, 1995 and June 30, 1995 (unaudited) 3
Consolidated statements of income,
three months and six months ended December 31,
1995 and 1994 (unaudited) 4
Consolidated statements of cash flows,
six months ended December 31, 1995
and 1994 (unaudited) 5
Notes to consolidated financial statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
Exhibit 27 Article 9 17
<TABLE>
YORK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31 June 30
1995 1995
ASSETS (In thousands, unaudited)
<S> <C> <C>
Cash and due from banks:
Noninterest-earning $ 20,181 $ 19,468
Interest-earning 11,154 19,861
31,335 39,329
Loans held for sale, net 13,529 6,450
Securities held for trading --- 4,451
Securities available for sale 55,381 31,569
Securities held to maturity (fair value
at Dec. 31, 1995-
$9,487 and June 30, 1995 - $28,902) 9,790 29,293
Loans receivable, net 890,610 845,205
Real estate, net 15,778 17,656
Premises and equipment 11,633 12,536
Federal Home Loan Bank stock, at cost 5,177 5,177
Accrued interest receivable 7,151 6,460
Other assets 10,329 8,091
Investments in joint ventures 4,151 3,701
Total Assets $1,054,864 $1,009,918
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Deposits $ 875,251 $ 832,056
Federal Home Loan Bank advances and 70,519 65,759
other borrowings
Advances from borrowers for taxes and 2,286 5,098
insurance
Other liabilities 16,621 21,675
Total Liabilities 964,677 924,588
Stockholders' Equity:
Preferred Stock: 10,000,000 shares --- ---
authorized and unissued
Common Stock, $1.00 par value:
Authorized 10,000,000 shares;
issued December 31, 1995 -
6,016,772; June 30, 1995 - 6,017 5,422
5,421,949
Additional capital 66,838 55,911
Retained earnings 18,121 24,946
Unrealized gains 404 244
Unearned ESOP shares (1,193) (1,193)
Total Stockholders' Equity 90,187 85,330
Total Liabilities and Stockholders' Equity $1,054,864 $1,009,918
See notes to consolidated financial statements
</TABLE>
<TABLE>
YORK FINANCIAL CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
Three Months Six Months
Ended December Ended December
31, 31,
1995 1994 1995 1994
(In thousands except per share data, unaudited)
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 18,842 $ 14,940 $ 37,221 $ 28,676
Interest on securities held 74 22 165 62
for trading
Interest on securities 770 866 1,347 1,739
available for sale
Interest and dividends on
securities held to 403 502 935 1,008
maturity
Other interest income 296 160 530 599
Total interest income 20,385 16,490 40,198 32,084
Interest expense:
Interest on deposits 10,566 8,107 20,834 15,900
Interest on borrowings 1,280 221 2,328 223
Total interest expense 11,846 8,328 23,162 16,123
Net interest income 8,539 8,162 17,036 15,961
Provision for loan losses 700 670 1,300 1,340
Net interest income after
provision for loan 7,839 7,492 15,736 14,621
losses
Other income:
Mortgage banking 831 407 1,520 986
Gain (Loss) on sales of real 1,203 (62) 938 (98)
estate
Fees and service charges 651 557 1,236 1,072
Other operating income 727 224 1,027 566
Total other income 3,412 1,126 4,721 2,526
Other expenses:
Salaries and employee 2,787 2,799 5,540 5,435
benefits
Occupancy 647 617 1,302 1,269
Federal deposit insurance 486 458 951 916
Real estate 187 68 366 91
Data processing 261 236 505 420
Other 1,240 1,294 2,523 2,517
Total other expenses 5,608 5,472 11,187 10,648
Income before income taxes 5,643 3,146 9,270 6,499
Provision for income taxes 2,256 1,185 3,712 2,487
Net income $ 3,387 $ 1,961 $ 5,558 $ 4,012
Per share data:
Net income $ 0.54 $ 0.32 $ 0.89 $ 0.66
Cash dividends paid $ 0.136 $ 0.124 $ 0.273 $ 0.248
Weighted average shares 6,276,761 6,081,578 6,260,195 6,080,509
See notes to consolidated
financial statements
</TABLE>
<TABLE>
YORK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months
Ended December 31,
1995 1994
(In thousands, unaudited)
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 5,558 $ 4,012
Adjustments to reconcile net income to
net cash provided by operating
activities:
Amortization and accretion on (1,109) (684)
securities, net
Provision for loan losses 1,300 1,340
Provision for real estate losses 200 ---
Depreciation and amortization 748 744
Loans originated for sale (75,618) (19,696)
Proceeds from sales of trading 48,783 18,062
securities
Realized gains (losses) on trading (57) 110
securities
Realized (gains) losses on sales
of securities available for (68) ---
sale
Decrease (increase) in other assets (2,290) 979
Increase (decrease) in other (4,950) (2,158)
liabilities
Other (2,485) 8
Net cash (used in) provided by operating (29,988) 2,717
activities
INVESTING ACTIVITIES
Proceeds from sales of securities 12,102 ---
available for sale
Principal repayments on securities 7,322 4,121
Loans originated or acquired, net of
increase in deferred loan fees (131,017) (157,669)
Principal collected on loans 82,784 80,570
Proceeds from sales of loans 892 2,254
Purchases of real estate (99) (172)
Proceeds from sales of real estate 6,121 3,667
Purchases of premises and equipment, net (313) (1,226)
Other (2,892) (423)
Net cash used in investing activities (25,100) (68,878)
FINANCING ACTIVITIES
Net increase (decrease) in demand
deposits, NOW accounts,
savings accounts, and 31-day 21,846 (52,144)
certificates of deposit
Net increase (decrease) in certificates 21,349 37,290
of deposit
Net increase (decrease) in short-term 4,765 34,678
borrowings
Repayments of Federal Home Loan Bank
advances and other borrowings (6) (6)
Issuance of common stock 778 742
Cash dividends paid (1,630) (1,449)
Acquisition of Treasury Stock --- (320)
Exercise of stock options 12 320
Cash in lieu of fractional shares (20) (21)
Net cash provided by financing activities 47,094 19,090
Increase (decrease) in cash and cash (7,994) (47,071)
equivalents
Cash and cash equivalents at beginning of 39,329 71,669
year
Cash and cash equivalents at end of year $31,335 $24,598
</TABLE>
YORK FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995
Note A -- Basis Of Presentation
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. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the six month period ended
December 31, 1995 are not necessarily indicative of the
results that may be expected for the year ended June 30,
1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended June
30, 1995.
Cash Flow Information: For purposes of the statements of
cash flows, cash equivalents include cash and amounts due
from banks. During the six months ended December 31, 1995
and 1994, the Association exchanged loans for mortgage-backed
securities in the amounts of $67.5 million and $23.2 million
respectively. During the six months ended December 31, 1995
and 1994, the Association transferred unpaid loan balances
from loans to real estate due to foreclosures of $2.6 million
and $2.1 million respectively. Upon implementation of FASB
114, $200,000 of loans classified as in-substance
foreclosures were reclassified to loans during the period
ended December 31, 1995.
Reclassifications: Certain reclassifications have been made
to the fiscal 1995 consolidated financial statements to
conform with the fiscal 1996 presentation.
Note B -- Earnings Per Share Data
Net income per share is computed based on the weighted
average number of common shares outstanding and dilutive
common stock equivalents, adjusted for stock dividends. Cash
dividends paid per share are based on the number of common
shares outstanding at each declaration date, adjusted for
stock dividends. On October 20, 1995, the Corporation
declared a 10% stock dividend to shareholders of record on
November 3, 1995, payable November 15, 1995.
Note C -- Accounting for Mortgage Servicing Rights
In May 1995 the Financial Accounting Standard Board (FASB)
issued Statement of Financial Accounting Standards No. 122
(SFAS 122). "Accounting for Mortgage Servicing Rights an
amendment of FASB Statement No. 65." This statement requires
the Corporation to capitalize retained mortgage servicing
rights on loans sold or securitized by allocating the total
cost of the mortgage loans between the mortgage servicing
rights and the loans (without the servicing rights) based on
their respective fair values. The new statement also
specifies new procedures for assessing impairment of
capitalized mortgage servicing rights, whenever capitalized,
and requires that impairment shall be recognized through a
valuation allowance for individual portfolio stratifications
based on the fair value of those rights.
The Corporation adopted SFAS 122 effective July 1, 1995 which
resulted in an increase in mortgage banking income of
$634,000 for the six months ended December 31, 1995. In
accordance with SFAS 122, prior period financial statements
have not been restated. The total book value of the
capitalized mortgage servicing rights at December 31, 1995
was $1.4 million and the aggregate fair market value totaled
$1.4 million. A valuation model that calculates the present
value of future cash flows was used to estimate fair value.
In using this valuation method, the Company incorporated
assumptions that market participants would use in estimating
future net servicing income, which included estimates of the
cost of servicing per loan, the discount rate, float value
and prepayment speeds.
For purposes of measuring impairment, the following risk
characteristics were used to stratify the post implementation
originated mortgage servicing rights: product type, term of
loan, and interest rates. Based on these measurement factors
a valuation allowance of $13,000 was required at December
31, 1995.
Note D -- Accounting by Creditors for Impairment of a Loan
In May 1993, the FASB issued Statement No. 114, "Accounting
by Creditors for Impairment of a Loan" as amended by
Statement No. 118, "Accounting by Creditors for Impairment of
a Loan - Income Recognition and Disclosures." As a result of
applying the new rules, certain loans which are deemed to be
impaired will be reported at the present value of expected
future cash flows using the loan's effective interest rate,
or as a practical expedient, at the loans observable market
price or the fair value of the collateral if the loan is
collateral dependent. The Corporation adopted these
statements July 1, 1995.
At December 31, 1995, the recorded investment in loans that
are considered to be impaired under Statement 114 was $1.6
million (which were on a nonaccrual basis). The related
allowance for credit losses was $521,000. The average
recorded investment in impaired loans for the period ended
December 31, 1995 was approximately $1.6 million. During
this period the Corporation did not recognize interest income
on loans considered impaired.
Note E -- Accounting for Certain Investments in Debt and
Equity Securities
In November 1995, the FASB issued a Guide to Implementation
of Statement 115, "Accounting for Certain Investments in
Debt and Equity Securities." The guide stated that no later
than December 31, 1995, an enterprise may reassess the
appropriateness of the classifications of all securities held
at that time and account for any resulting reclassifications
at fair value. Reclassifications from the held-to-maturity
category that result from this one-time reassessment will not
call into question the intent of an enterprise to hold other
debt securities to maturity in the future. During the
quarter ended December 31, 1995 the Corporation transferred
held-to-maturity securities with a fair value of $14.3
million to available-for-sale with the resulting net
unrealized gains of $29,000, net of taxes, reported as a
component of stockholders' equity.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
YORK FINANCIAL CORP.
General
York Financial Corp. ("York Financial" or "Corporation")
is a unitary savings and loan holding company with it's
principal offices located in York, Pennsylvania. York
Federal Savings and Loan Association ("York Federal" or
"Association"), a federally chartered savings and loan
association, is the primary operating unit of the
Corporation.
The Corporation's net income is highly dependent on the
interest rate spread between the average rate earned on loans
and securities and the average rate paid on deposits and
borrowings as well as the amount of the respective assets and
liabilities outstanding. Other operating income is a
supplement to interest income and is primarily the result
of mortgage banking activities. Other operating income also
includes fees and service charges assessed on loan and
deposit transactions.
Asset/Liability Management
In an effort to maintain control over net interest
income, management of York Federal focuses its attention on
managing the interest rate sensitivity of assets and
liabilities and controlling the volume of lending, investment
and borrowing activity. By managing the ratio of interest
sensitive assets to interest sensitive liabilities repricing
in the same periods, the Corporation seeks to minimize the
negative effect of interest rate fluctuations.
The asset sensitivity gap at the one year time period
decreased $36.7 million in the six months ended December 31,
1995 to $67.6 million. This decrease was primarily
attributable to retention of intermediate term fixed rate
loans and mortgage backed securities funded by a decrease in
liquid assets and a changing composition within the liability
portfolio including growth in short term borrowings and
variable rate deposit products.
<TABLE>
Interest Sensitivity Gap Analysis
Subject to Repricing
December 31 June 30
1995 1995
(Dollars in thousands)
<S> <C> <C>
Earning assets maturing or repricing
within one year $ 667,182 $ 682,228
Interest bearing liabilities maturing
or repricing within one year 599,608 578,004
Interest sensitivity gap within one year $ 67,574 $ 104,224
year
Cumulative interest sensitivity gap
within one year as a percent of total
assets 6.41% 10.32%
</TABLE>
The Corporation also monitors its interest rate risk in
accordance with regulatory direction. Fluctuations in net
interest income and the market value of portfolio equity are
determined in various interest rate scenarios and monitored
against acceptable limitations established by management and
approved by the Board of Directors. Interest rate risk as
indicated through balance sheet simulations at December
31, 1995 is considered to be within acceptable limits. The
management of York Federal is committed to managing the
asset portfolio in order to maximize the yield and maintain
an interest rate sensitivity of York Federal's earning assets
that insulates it from the potential negative effect of
interest rate fluctuations.
Asset Quality
Management is aware of the risks inherent in
lending and continually monitors risk characteristics of the
loan portfolio. The Association's policy is to maintain the
allowance for loan losses at a level believed adequate by
management to absorb potential loan losses within the
portfolio. Management's determination of the adequacy of the
allowance is performed by an internal loan review committee
and is based on risk characteristics of loans, past loss
experience, loan portfolio growth trends, economic conditions
and such other factors that deserve recognition. Additions
to the allowance are charged to operations.
An analysis of the allowance for loan losses, for the periods
indicated is as follows:
<TABLE>
Six Months Fiscal Year
Ended Ended
December 31 June 30
1995 1995
(Dollars in thousands)
<S> <C> <C>
Total allowance for loan losses at
beginning of period $ 5,840 $ 4,492
Loans charged-off:
Real Estate - mortgage:
Residential 613 1,138
Commercial 36 6
Consumer 9 127
Total loans charged-off 658 1,270
Recoveries:
Real Estate - mortgage:
Residential 120 185
Commercial 66 92
Consumer --- 1
Total recoveries 186 278
Net loans charged-off 472 992
Provision for loan losses 1,300 2,340
Total allowance for loan losses at end
of period $ 6,668 $ 5,840
Percentage of net charge-offs to
average loans outstanding during
the period 0.05% 0.13%
Percentage of allowance for
loan losses to adjusted total loans 0.74% 0.69%
</TABLE>
The allowance for loan losses totaled $6.7 million or
.74% of adjusted total loans of $897.2 million at December
31, 1995. Such amount is considered adequate relative to
management's assessment of risk characteristics inherent in
the loan portfolio. While management uses available
information to recognize losses on loans, future additions to
the allowance may be necessary based on specific
circumstances related to problem loans as well as changes in
economic conditions.
An analysis of nonperforming assets is summarized as
follows:
<TABLE>
December June 30
31
1995 1995
(Dollars in thousands)
<S> <C> <C>
Loans accounted for on a nonaccrual
basis:
Real estate-mortgage:
Commercial $ 2,344 $ 3,498
Accruing loans which are
contractually
past due 90 days or more:
Real estate-mortgage:
Residential 10,086 9,133
Consumer 645 433
Total of 90 days past due 10,731 9,566
loans
Total of nonaccrual and 90 days
past due loans $ 13,075 $ 13,064
As a percent of total loans 1.45% 1.53%
Real estate owned:
Real estate acquired through
foreclosure
or repossession by loan type:
Residential $ 5,903 $ 5,981
Commercial 2,231 2,278
Land 4,528 5,107
Loans classified as in-substance --- 200
foreclosures
Allowance for real estate losses (675) (630)
Total real estate owned $ 11,987 $ 12,936
As a percent of total assets 1.14% 1.28%
Total nonperforming assets $ 25,062 $26,000
As a percent of total assets 2.38% 2.57%
</TABLE>
Management recognizes the risk of potential diminution
of value of real estate owned during the holding period and
provides for such risk by maintaining a general allowance for
real estate losses (such reserve is separate from and in
addition to the allowance for loan losses). Management
continually monitors the risk profile of real estate owned
and maintains an allowance for real estate losses at a level
believed adequate to absorb potential losses within the
real estate portfolio. For the first six months of fiscal
1996, additions to the allowance in the amount of $200,000
which was offset by charge offs net of recoveries to the
allowance of $155,000 resulted in an increase in the
allowance for Real Estate Owned losses of $45,000 to $675,000
at December 31, 1995.
Results of Operations
Three months Ended December 31, 1995 Compared to December 31,
1994
Net Interest Income
York Financial's earnings are significantly affected by
the level of York Federal's net interest income, the
difference between the income it receives on its loan
portfolio and other investments and its cost of money,
consisting primarily of interest paid on deposits and
borrowings. Net interest income is affected by the average
yield on interest-earning asset, the average rate on interest-
bearing liabilities, and the ratio of interest-earning assets
to interest-bearing liabilities.
Net interest income for the six months ended
December 31, 1995 was $17.0 million compared to $16.0 million
for the same period last year. The increase in net interest
income was attributable to an increase in average earning
assets primarily due to the retention of intermediate term
assets. The margin on interest-earning assets decreased
to 3.52% from 3.93% for the six months ended December
31, 1995 and 1994, respectively. The impact of
rising loan and investment rates resulted in a 40 basis point
increase to the average yield on interest earning assets to
8.23% for the six months ended December 31, 1995 as compared
to 7.83% in the same period in the prior year. The
increasing cost of deposits and other borrowings during the
first six months of fiscal 1996 was caused by a shift in
composition within interest bearing liabilities from lower cost
transaction deposit accounts and variable rate certificates of
deposits to higher cost money fund accounts and increased short-
term borrowings resulting in an increase to the average rate on
interest bearing liabilities to 4.98% as compared to 4.07% in the same
period last year. The net effect caused the interest rate spread
for the current period to decrease to 3.24% from 3.76% in the
same period last year.
Provision for Loan Losses
Management is aware of the risks inherent in lending and
continually monitors risk characteristics of the loan
portfolio. See "Asset Quality".
Other Income
Other income was $4.7 million for the six months ended
December 31, 1995, an increase of 86.9% from the six months
ended December 31, 1994. On July 1, 1995, the Corporation
implemented SFAS 122 (see note C), resulting in a favorable
impact to earnings. Mortgage banking income for the six
months ended December 31, 1995 increased $534,000 to $1.5
million or 54.2% as compared to the same period in 1994 and
includes the adoption of SFAS 122, gains on sales of loans
and trading securities and income from servicing fees. The
portfolio of loans serviced for others totaled $601.1 million
at December 31, 1995 as compared to $557.4 million at
December 31, 1994. The servicing rate earned on the
portfolio of loans serviced for others for the six months
ended December 31, 1995 decreased to .249% from .283% in the
same period in 1994. During the quarter ended December 31,
1995 the Corporation recognized a gain of $1.3 million
resulting from the sale of real estate held for investment.
Fees and service charges for the six months ended December
31, 1995 increased by 15.3% to 1.2 million compared to 1.0
million in the same period in 1994. Other operating income
was $1.0 million in the first six months of fiscal 1996 as
compared to $566,000 in the first six months of fiscal 1995.
This amount represents income from operations of
subsidiaries, including commissions earned from discount
brokerage activities, appraisal and construction inspection
services provided to independent third parties and equity in
earnings of joint ventures.
Other Expenses
Other expenses of $11.2 million increased $540,000 or
5.1% for the six months ended December 31, 1995 as compared
to the same period in 1994. Salaries and employee benefits
increased $105,000 or 1.9% over the same period in 1994. Real
estate expenses increased $275,000 over December 31, 1994 and
is primarily attributable to an increase in the provision for
possible real estate losses (see asset quality), increased
carrying costs of $75,000 related to maintaining the
portfolio of properties and settlement and legal fees related
to disposition of properties. Data processing costs
increased $85,000 or 20.2% and are primarily attributed to
the installation of a teller automation system and increased
cost of services.
Provision for Income Taxes
The provision for income taxes of $3.7 million for the
six months ended December 31, 1995 represents an effective
tax rate of 40.0% as compared to 38.3% for the same period
last year.
Liquidity and Capital Resources
Under current regulations, York Federal is required to
maintain liquid assets at 5.0% or more of its net
withdrawable deposits plus short-term borrowings. Throughout
the six months ended December 31, 1995 and fiscal year ended
June 30, 1995, York Federal maintained an average liquidity
level which was in compliance with the regulatory
requirements. At December 31, 1995, the Association's
liquidity level was 5.11%.
Thrifts must comply with three separate capital
standards. The following table sets forth the capital
position of the Association as of December 31, 1995:
<TABLE>
Requirement Actual
Dollars Percent Dollars Percent Excess
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Tangible Capital $ 15,694 1.5% $ 78,928 7.5% $ 63,234
Core Capital $ 31,388 3.0% $ 78,928 7.5% $ 47,540
Risk-Based
Capital $ 56,096 8.0% $ 84,927 12.1% $ 28,831
</TABLE>
At December 31, 1995, York Federal is considered a well
capitalized association for capital distribution purposes and
therefore, its capital distributions may be made up to 100%
of its net income to date during the calendar year plus an
amount that would reduce its surplus capital ratio at the
beginning of the calendar year by one-half. At December 31,
1995, the total allowable capital distribution was $22.5
million. Transactions with affiliates are limited to 10% of
capital and surplus per affiliate with an aggregate limit on
all such transactions with affiliates to 20% of capital and
surplus. At December 31, 1995, such transactions are within
these regulatory limits.
York Federal is insured by the FDIC through the Savings
Association Insurance Fund ("SAIF) and pays annual insurance
fees of 23 basis points on insured deposits, the lowest rate
currently permitted. The FDIC insures commercial banks and
certain savings banks through the Bank Insurance Fund
("BIF"), which lowered their insurance rates in September
1995. Since the commercial banks have reached the required
capitalization level of $1.25 for each $100.00 in deposits
Under the new assessment schedule approximately 92% of
BIF members pay only the statutory minimum annual
assessment of $2,000. This BIF and SAIF insurance premium
disparity places SAIF insured institutions at a significant
competitive disadvantage since the average SAIF premium currently
remains at 24 basis points.
Proposed legislation to accelerate the recapitalization
of the SAIF by assessing a one time charge of approximately
85 basis points on the amount of deposits held by a SAIF
member institution at March 31, 1995 is under consideration.
If enacted, this one time assessment could result in a pre-
tax charge to the Association's earnings of approximately
$6.9 million. Such charge will not impact York Federal's
status as a well-capitalized institution qualifying for the
lowest SAIF insurance premium. Management expects that the
existing annual SAIF premium paid by the Association will be
lowered from 23 basis points to as low as 4 basis points as a
result of the proposed one time assessment resulting in a
favorable impact to earnings in future years. It cannot be
determined at this time what the outcome of these events and
proposals will be.
York Federal's primary sources of funds to support
lending and other general business activities are operations,
loan repayments including monthly amortization and
prepayments, the sale of loans and mortgage-backed
securities, deposits, short and long-term advances from FHLB
of Pittsburgh and Federal Reserve Bank of Philadelphia and
other short-term borrowings. Deposits increased $43.2
million or 5.2% over prior year end levels. In addition,
at December 31, 1995, York Federal has FHLB advances outstanding
in the amount of $69.3 million at a weighted average interest
rate of 5.71%. In accordance with the stated credit policy
of the FHLB of Pittsburgh, additional borrowings of
approximately $34.2 million are available to York Federal at
December 31, 1995. However, York Federal may increase its
borrowings over amounts currently available by purchasing
additional FHLB stock.
Amortization and prepayments of loans and proceeds from
loan sales within the Association's mortgage banking activity
represent a substantial source of funds to York Federal.
These sources amounted to $151.8 million for the six months
ended December 31, 1995.
The principal use of York Federal funds is the
origination of mortgage and other loans. Loan demand
resulted in total originations of $225.5 million for the
period ended December 31, 1995 compared to $182.3 million for
the same period in 1994. The $43.2 million increase in loan
originations over the prior fiscal year is due to an increase
in expanded mortgage broker relationships with related volume
favorably impacted by a relatively low rate environment in the
first six months of fiscal 1996.
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
Annual meeting of Stockholders of York
Financial Corp. was held October 25, 1995. Business
transacted at the meeting was as outlined in the Notice of
Annual Meeting and Proxy Statement dated September 30, 1995,
including ratification of the 1995 Nonqualified Stock Option
Plan for Directors, with votes cast as follows:
For 3,700,126 Shares
Against 270,891 Shares
Abstain 116,855 Shares
Proposal was ratified.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibit is included
herein:
(11) Statement re: computation
of earnings per share
The company did not file any reports on Form 8-K during the
six months ended December 31, 1995.
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.
York Financial Corp.
(Registrant)
Date February 12, 1996
/s/ Robert W. Pullo
Robert W. Pullo, President - Chief
Executive Officer
Date February 12, 1996
/s/ James H. Moss
James H. Moss, Senior Vice President -
Chief Financial Officer/Treasurer
(11) --
Statement re: Computation of Earnings Per Share
<TABLE>
Six Months Ended
December 31,
1995 1994
(Dollars in thousands, except per share data)
<S> <C> <C>
Primary:
Average shares outstanding 5,913,464 5,253,131
Net effect of dilutive stock
options -- based on the treasury
method using average market price 346,731 274,605
Totals 6,260,195 5,527,736
Net income $ 5,558 $ 4,012
Per share amount $ 0.89 $ 0.73
Fully diluted:
Average shares outstandind 5,913,464 5,253,131
Net effect of dilutive stock
options -- based on the treasury
stock method using quater end market
price or average market price whichever
is greater 347,109 274,605
Totals 6,260,573 5,527,736
Net income $ 5,558 $ 4,012
Per share amount $ 0.89 $ 0.73
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-30-1996
<CASH> 31335
<INT-BEARING-DEPOSITS> 11153
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55381
<INVESTMENTS-CARRYING> 9790
<INVESTMENTS-MARKET> 9487
<LOANS> 897278
<ALLOWANCE> 6668
<TOTAL-ASSETS> 1054864
<DEPOSITS> 875251
<SHORT-TERM> 69000
<LIABILITIES-OTHER> 16621
<LONG-TERM> 1519
0
0
<COMMON> 6017
<OTHER-SE> 84170
<TOTAL-LIABILITIES-AND-EQUITY> 1054864
<INTEREST-LOAN> 37221
<INTEREST-INVEST> 2447
<INTEREST-OTHER> 530
<INTEREST-TOTAL> 40198
<INTEREST-DEPOSIT> 20834
<INTEREST-EXPENSE> 23162
<INTEREST-INCOME-NET> 17036
<LOAN-LOSSES> 1300
<SECURITIES-GAINS> 118
<EXPENSE-OTHER> 11187
<INCOME-PRETAX> 9270
<INCOME-PRE-EXTRAORDINARY> 9270
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5558
<EPS-PRIMARY> .89
<EPS-DILUTED> .89
<YIELD-ACTUAL> 3.52
<LOANS-NON> 2344
<LOANS-PAST> 10731
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5840
<CHARGE-OFFS> 658
<RECOVERIES> 186
<ALLOWANCE-CLOSE> 6668
<ALLOWANCE-DOMESTIC> 4107
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2561
</TABLE>
