SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): August 25, 1995
HOMETOWN BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16272 06-1199559
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification Number)
20 West Avenue, Darien, Connecticut 06820
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (203) 656-2265
N/A
(Former name or former address, if changed since last report)
<PAGE>
2
ITEM 5. OTHER EVENTS.
On August 25, 1995, Hometown Bancorporation, Inc. (the "COMPANY")
issued a press release stating that the internal investigation of
accounting errors and irregularities at its wholly owned subsidiary, The
Bank of Darien (the "BANK OF DARIEN"), had been completed. The release
contained information relating to the restatements of net income for the
years ended December 31, 1992, 1993 and 1994 and for the quarter ended
March 31, 1995. The release also announced the results of operations of
the Company for the six months ended June 30, 1995.
In the release, the Company and the Bank also announced that Albert
T. Jaronczyk had been elected Senior Vice President, Treasurer and Chief
Financial Officer of the Company and the Bank.
In accordance with General Instruction F to Form 8-K, a copy of the
press release dated August 25, 1995 is attached hereto as Exhibit 20 and
is incorporated herein by reference.
The Company is in the process of preparing amendments to certain of
its periodic reports under the Securities Exchange Act of 1934 and will
file such amendments as promptly as practicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
20. Press Release, dated August 25, 1995, issued by the
Company.
<PAGE>
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
HOMETOWN BANCORPORATION, INC.
Date: August 28, 1995 By: /S/ KEVIN E. GAGE
Kevin E. Gage
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
20 Press Release of the Company Dated August 25, 1995
HOMETOWN BANCORPORATION, INC.
NEWS RELEASE
Contact: Kevin E. Gage, President & CEO
HOMETOWN BANCORPORATION, INC. /
THE BANK OF DARIEN
(203) 662-2544
FOR IMMEDIATE RELEASE
DARIEN, CONNECTICUT, AUGUST 25, 1995: Hometown Bancorporation, Inc., the
holding company for The Bank of Darien, reported today that, with the
assistance of its independent accountants, independent investigators and legal
counsel, it has concluded its investigation of previously announced accounting
errors and irregularities. In addition, the Company announced the results of
operations for the second quarter and six months ended June 30, 1995, which
had been previously delayed due to the investigation.
The Audit Committee of the Company has conducted a full and careful review of
the accounting errors and irregularities which has resulted in a restatement
of financial statements for prior periods. Based on the findings of the
investigation, the Board of Directors of the Company has concluded that the
errors and irregularities resulted from the actions of a former employee who
manipulated accounting records and circumvented controls. The Company has
determined that the impact of such errors and irregularities requires the
restatement of its results of operations for 1992, 1993, 1994 and the first
quarter of 1995 to reflect, among other things, a reduction in net income for
the periods.
Kevin E. Gage, President and Chief Executive Officer of Hometown and The Bank
of Darien stated "It is important to understand the errors and irregularities
have no effect on any customer deposit accounts or loan accounts or the
quality of the Bank's loan portfolio. The Bank continues to exceed all
minimum regulatory capital ratios."
The Company's Tier 1 Leverage capital ratio was 6.95% at June 30, 1995. This
compares to the current regulatory minimum of 4%. Book value at June 30, 1995
after considering the effect of the restatements was $9.01 per share.
Mr. Gage continued, "We thank the community for its continued loyalty and
support during this difficult period and look forward as always to meet our
customer's banking needs with the high level of service and responsiveness for
which they are accustomed".
Douglas D. Milne, III, the Chairman of the Board of Hometown and The Bank of
Darien, commented, "We are confident that this problem is behind us. The Board
continues its unanimous support of management of the Bank. The Bank of Darien
is a strong bank and continues its commitment to providing outstanding
personalized service to our customers."
1.
20 West Avenue, P.O. Box 1265, Darien, CT 06820-0513 Tel. (203) 656-2265
<PAGE>
HOMETOWN BANCORPORATION, INC.
August 25, 1995
Mr. Milne continued , "Our next step is to perform a comprehensive strategic
review of our business to incorporate changes that will continue our ongoing
commitment to serving our customers while seeking to maximize returns to
shareholders".
As the first part of this review, the Company announced that it is
implementing an action plan to strengthen its finance and accounting function
and to perform a comprehensive review of its internal control and reporting
systems. With this in mind, Albert T. Jaronczyk was named Senior Vice
President, Treasurer and Chief Financial Officer of the Company and The Bank
of Darien. Mr. Jaronczyk was formerly the Chief Financial Officer of the Bank
of Great Neck, a bank in Great Neck, New York which was recently acquired by
North Fork Bancorp. Mr. Jaronczyk, a certified public accountant, has spent 21
years in the field of accounting and finance beginning his career with the
Big Six accounting firm KPMG Peat Marwick.
The accounting errors and irregularities resulting in the changes in net
income for the periods affected related principally to the accounting for
investment securities, including irregularities in the accounting for premiums
on securities and deferred loan fees. Restated net income for 1994 also
includes a charge of $256,000 relating to a write down of "Other real estate
owned".
As restated, net income for 1994 was $1.1 million or $.60 per share fully
diluted compared to previously reported net income of $1.9 million or $1.09
per share fully diluted. For the first quarter of 1995, restated net income
was $370,000 or $.21 per share fully diluted versus previously reported net
income of $518,000 or $.30 per share fully diluted.
As restated, net income, before the cumulative effect of a previously adopted
change in accounting principle for 1993 was $1.2 million or $.72 per share
fully diluted compared to previously reported net income of $1.3 million or
$.77 per share fully diluted. As announced at the time, during 1993, the
Company adopted Financial Accounting Standard 109, "Accounting for Income
Taxes".
As restated, net income, before recognizing extraordinary credits resulting
from the utilization of operating loss carry-forwards for 1992, was $605,000
or $.37 per share fully diluted compared to previously reported net income of
$852,000 or $.53 per share fully diluted..
The Company also reported results for the quarter and six months ended June
30, 1995. For the quarter ended June 30, 1995, net income was $476,000 or
$.27 per share fully diluted versus results for the quarter ended June 30,
1994, restated of $290,000 or $.17 per share fully diluted. For the six months
ended June 30, 1995, including the impact of the restatement of the first
quarter of 1995, the Company earned $846,000 or $.48 per share fully diluted
versus $677,000 or $.39 per share fully diluted as restated for the six months
ended June 30, 1994.
The Company stated it expects to take a material third quarter charge relating
to professional fees, costs and expenses resulting from the internal
investigation and associated costs relating to the filing of amendments of
financial reports to regulatory agencies to be completed during the third and
fourth quarter.
The stock of Hometown Bancorporation, Inc. is quoted on the NASDAQ National
Market under the symbol "HTWN".
##
(Attachments 1-6 included with release)
2.
<PAGE>
PRESS RELEASE 8/25/95
ATTACHMENT 1
HOMETOWN BANCORPORATION, INC.
CONSOLIDATED BALANCE SHEET
($000)
June 30,
1995
--------
ASSETS
Cash and due from banks $ 15,229
Investments available-for-sale, at market
value 75,021
Investments held-to-maturity
(market value: $43,567) 44,118
Loans, less allowance for loan losses of
$3,016 82,889
Equipment and leasehold improvements,
net of accumulated depreciation
of $1,734 1,586
Other real estate owned, net 998
Other assets 7,177
----------
Total assets $ 227,018
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Demand deposits $ 26,756
NOW and money market accounts 80,024
Savings deposits 13,420
Certificates of deposit of $100
and over 9,811
Other time deposits 54,645
----------
Total deposits 184,656
----------
FHLBB advances 25,947
Accrued interest and other liabilities 1,242
----------
Total liabilities 211,845
----------
STOCKHOLDERS' EQUITY:
Common Stock 1,833
Surplus 14,023
Retained earnings 1,372
Unrealized loss on Investments available
for sale (1,186)
Treasury stock, at cost (869)
----------
Total stockholders' equity 15,173
----------
Total liabilities and
stockholders' equity $ 227,018
==========
<PAGE>
PRESS RELEASE 8/25/95
ATTACHMENT 2
HOMETOWN BANCORPORATION, INC.
CONSOLIDATED STATEMENT OF INCOME
($000 EXCEPT PER SHARE AMOUNTS)
For the Six Months
Ended
June 30,
RESTATED
1995 1994
--------- ----------
Interest and Dividend Revenue:
Interest and fees on loans $ 3,617 $ 3,278
Interest on investment securities 3,854 2,514
Interest on federal funds sold $ - 46
Dividends 69 52
-------- --------
Total interest and dividend
revenue 7,540 5,890
-------- --------
Interest Expense:
Deposits 3,027 1,978
Other 812 538
-------- --------
Total interest expense 3,839 2,516
-------- --------
Net Interest Income 3,701 3,374
-------- --------
Provision for loan losses 25 25
Provision for OREO losses 20 34
-------- --------
Net interest income after
provision for loan and OREO
losses 3,656 3,315
-------- --------
Other Operating Income:
Deposit and other service charges 363 327
Loan placement fees 195 335
Securities gains 26 45
Other 46 96
-------- --------
Net interest and operating income 4,286 4,118
-------- --------
Other Operating Expenses:
Salaries and benefis 1,524 1,445
Occupancy expense 287 285
FDIC and state insurance 203 199
Depreciation and
amortization 183 198
Advertising and marketing 123 125
Foreclosure expense and
cost of OREO 60 60
Other operating expenses-other 713 747
-------- --------
3,093 3,059
-------- --------
Income before federal and
state income taxes 1,193 1,059
Provision for federal and state
income taxes 347 382
-------- --------
Net income $ 846 $ 677
======== ========
Earnings per share:
Net primary earnings per share $ 0.48 $ 0.39
======== ========
Total common stock and common stock
equivalents 1,763,665 1,747,437
========= =========
Fully diluted earnings per share $ 0.48 $ 0.39
========= =========
Total common stock and common stock
equivalents 1,770,302 1,748,996
========= =========
<PAGE>
PRESS RELEASE 8/25/95
ATTACHMENT 3
HOMETOWN BANCORPORATION, INC.
CONSOLIDATED STATEMENT OF INCOME
($000 EXCEPT PER SHARE AMOUNTS)
For the Three Months
Ended
June 30,
RESTATED
1995 1994
-------- --------
Interest and Dividend Revenue:
Interest and fees on loans $ 1,848 $ 1,657
Interest on investment
securities 1,946 1,352
Interest on federal
funds sold - 17
Dividends 36 22
-------- --------
Total interest and dividend
revenue 3,830 3,048
-------- --------
Interest Expense:
Deposits 1,473 1,069
Other 500 275
-------- --------
Total interest expense 1,973 1,344
-------- --------
Net Interest Income 1,857 1,704
-------- --------
Provision for loan losses -
Provision for OREO losses 20 25
-------- --------
Net interest income after
provision for loan and OREO
losses 1,837 1,679
-------- --------
Other Operating Income:
Deposit and other service
charges 190 159
Loan placement fees 139 169
Securities gains 26
Other 13 30
-------- --------
Net interest and operating income 2,205 2,037
-------- --------
Other Operating Expenses:
Salaries and benefits 770 740
Occupancy expense 142 142
FDIC and state insurance 101 100
Depreciation and amortization 92 99
Advertising and marketing 68 63
Foreclosure expense and cost
of OREO 30 30
Other operating expenses-
other 381 410
-------- --------
1,584 1,584
-------- --------
Income before federal and state
income taxes 621 453
Provision for federal and state
income taxes 145 163
-------- --------
Net Income $ 476 $ 290
======== ========
Earnings per share:
Net primary earnings per share $ 0.27 $ 0.17
======== ========
Total common stock and
common stock equivalents 1,764,957 1,755,347
========= =========
Net fully diluted earnings
per share $ 0.27 $ 0.17
======== ========
Total common stock and
common stock equivalents 1,771,249 1,756,415
========= =========
<PAGE>
Press Release 8/25/95
Attachment 4
HOMETOWN BANCORPORATION, INC.
CONSOLIDATED STATEMENT OF INCOME
($000 EXCEPT PER SHARE AMOUNTS)
For the Three Months Ended
March 31,
RESTATED RESTATED
1995 1994
--------- ---------
Interest and Dividend Revenue:
Interest and fees on loans $ 1,769 $ 1,621
Interest on investment
securities 1,908 1,162
Interest on federal funds
sold - 29
Dividends 33 30
--------- ---------
Total interest and dividend
revenue 3,710 2,842
--------- ---------
Interest Expense:
Deposits 1,554 909
Other 312 263
--------- ---------
Total interest expense 1,866 1,172
--------- ---------
Net Interest Income 1,844 1,670
--------- ---------
Provision for loan losses 25 25
Provision for OREO losses - 9
--------- ---------
Net interest income after provision
for loan and OREO losses 1,819 1,636
--------- ---------
Other Operating Income:
Deposit and other service
charges 173 168
Loan placement fees 56 166
Securities gains - 45
Other 33 66
--------- ---------
Net interest and operating
income 2,081 2,081
--------- ---------
Other Operating Expenses:
Salaries and benefits 754 705
Occupancy expense 145 143
FDIC and state insurance 102 99
Depreciation and amortization 91 99
Advertising and marketing 55 62
Foreclosure expense and cost of
OREO 30 30
Other operating expenses-other 332 337
--------- ---------
1,509 1,475
--------- ---------
Income before federal and state
income taxes 572 606
Provision for federal and state
income taxes 202 219
--------- ---------
Net income $ 370 $ 387
========= =========
Earnings per share:
Net primary earnings per share $ 0.21 $ 0.22
========= =========
Total common stock and common
stock equivalents 1,762,349 1,743,556
========= =========
Net fully diluted earnings per
share $ 0.21 $ 0.22
========= =========
Total common stock and common
stock equivalents 1,762,349 1,743,556
========= =========
<PAGE>
Press Release 8/25/95
Attachment 5
HOMETOWN BANCORPORATION, INC.
CONSOLIDATED STATEMENT OF INCOME
($000 except per share amounts)
For the Years Ended
December 31,
RESTATED RESTATED RESTATED
1994 1993 1992
--------- --------- ----------
Interest and Dividend
Revenue:
Interest and fees on
loans $ 6,912 $ 6,596 $ 6,834
Interest on investment
securities 5,630 4,501 4,049
Interest on federal funds
sold 51 110 151
Dividends 109 97 63
--------- --------- ---------
Total interest and
dividend revenue 12,702 11,304 11,097
--------- --------- ---------
Interest Expense:
Deposits 4,459 3,823 4,667
Other 1,354 1,172 569
--------- --------- ---------
Total interest expense 5,813 4,995 5,236
--------- --------- ---------
Net Interest Income 6,889 6,309 5,861
--------- --------- ---------
Provision for loan losses 75 360 1,258
Provision for OREO losses 290 60 212
--------- --------- ---------
Net interest income
after provision for
loan and OREO losses 6,524 5,889 4,391
--------- --------- ---------
Other Operating Income:
Deposit and other service
charges 709 701 552
Loan placement fees 507 893 383
Securities gains 46 27 367
Other 135 199 232
--------- -------- ---------
Net interest and operating
income 7,921 7,709 5,925
--------- -------- ---------
Other Operating Expenses:
Salaries and benefits 2,973 2,611 2,186
Occupancy expense 569 564 554
FDIC and state insurance 386 403 266
Depreciation and
amortization 396 345 291
Advertising and marketing 250 200 200
Foreclosure expense and
cost of OREO 120 183 221
Other operating expenses-
other 1,585 1,364 1,328
--------- --------- ---------
6,279 5,670 5,046
--------- --------- ---------
Income before federal and
state income taxes 1,642 2,039 879
Provision for federal and
state income taxes 593 800 274
--------- --------- --------
Income before extraordinary
credit and cumulative
effect of an accounting
change 1,049 1,239 605
Cumulative effect of an
accounting change -
FAS 109 - 1,125 -
Extraordinary credit-
utilization of operating
loss carryforwards - - 256
--------- --------- ---------
Net income $ 1,049 $ 2,364 $ 861
========= ========= =========
Earnings per share:
Primary:
Earnings per share before
cumulative effect of an
accounting change and
extraordinary credit $ 0.60 $ 0.72 $ 0.37
Cumulative effect of an
accounting change -
FAS 109 - 0.66 -
Extraordinary credit-
utilization of operating
loss carryforwards - - 0.16
--------- --------- ---------
Net primary earnings
per share $ 0.60 $ 1.38 $ 0.53
========= ========= =========
Total common stock and
common stock
equivalents 1,750,988 1,708,207 1,629,710
========= ========= =========
Net fully diluted
earnings per share $ 0.60 $ 1.38 $ 0.53
========= ========= =========
Total common stock and
common stock
equivalents 1,750,988 1,719,066 1,629,710
========= ========= =========
<PAGE>
Press Release 8/25/95
Attachment 6
HOMETOWN BANCORPORATION, INC.
OTHER FINANCIAL INFORMATION
JUNE 30,
1995
ASSET QUALITY RATIOS
Non accruing loans $2,175
Other real estate owned, net 998
Total non-performing assets $3,173
Nonaccruing loans to gross loans 2.53%
Nonperforming assets to total assets 1.40%
Allowance for loan losses $3,016
COVERAGE RATIOS:
Allowance for loan losses to
gross loans 3.51%
Allowance for loan losses to
NPA 95.05%
CAPTIAL RATIOS REGULATORY
MINIMUM
Tier I Leverage 6.95% 4.00%
Total Risk Weighted Capital 14.65% 8.00%
Net Book Value $9.01 /SHARE
