SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
June 30, 1996
Commission File Number 34-0-18162
PEOPLE'S SAVINGS FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Connecticut 06-1259026
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
123 Broad Street, New Britain, CT 06053
(Address of principal executive offices) (ZIP Code)
(860) 224-7771
(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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
2,532,574 shares issued and
outstanding, (including
631,961 shares in treasury)
as of June 30, 1996
Common Stock, par value $1.00 per share
PEOPLE'S SAVINGS FINANCIAL CORP.
Table of Contents
PART I - FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements (Unaudited)
(a) Condensed Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995 3
(b) Condensed Consolidated Statements of Income -
Three months ended June 30, 1996 and 1995;
Six months ended June 30, 1996 and 1995; 4
(c) Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1996 and 1995; 5
(d) Notes to the Condensed Consolidated Financial
Statements - June 30, 1996 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security
Holders 18
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
PEOPLE'S SAVINGS FINANCIAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
June 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
Non-interest bearing deposits and cash $6,468 $6,816
Federal funds sold and FHLB overnight deposits 9,011 21,346
Cash and Cash Equivalents 15,479 28,162
Investment securities
Available for sale (at market) 127,287 91,128
Held to maturity (market value: $29,285 at
June 30, 1996 and $38,259 at
December 31, 1995) 30,277 38,461
Capital stock of the Federal Home Loan Bank 2,736 2,643
Loans held for sale 1,809 927
Loans, net (allowance for loan losses
1996-$1,516; 1995-$1,578) 246,972 236,792
Bank premises and equipment 2,284 2,370
Foreclosed real estate - 178
Accrued income receivable 4,054 3,748
Goodwill 3,183 3,330
Other assets 2,953 2,455
Total Assets $437,034 $410,164
Liabilities and Shareholders' Equity
Liabilities
Non-interest bearing demand deposits $7,562 $5,606
Interest bearing deposits 347,044 333,759
Total deposits 354,606 339,365
Mortgagors' escrow accounts 3,106 2,490
Advances from Federal Home Loan Bank of Boston 23,917 18,950
Securities sold under repurchase agreements 7,500 -
Accrued expenses 1,145 1,239
Other liabilities 2,528 3,407
Total Liabilities 392,802 365,451
Shareholders' Equity
Common stock, ($1.00 par value), 10,000,000
shares authorized; 2,532,574, and 2,511,824
shares issued and outstanding at June 30,
1996 and December 31, 1995, respectively
(including shares in treasury of 631,961 and
559,461 at June 30, 1996 and December 31,
1995, respectively) 2,533 2,512
Additional paid in capital 22,030 21,834
Retained earnings 28,657 27,421
Unrealized gains (losses) on securities available
for sale, net of taxes (259) 196
Cost of treasury stock (8,729) (7,250)
Total Shareholders' Equity 44,232 44,713
Total Liabilities and Shareholders' Equity $437,034 $410,164
</TABLE>
See notes to the condensed consolidated financial statements.
<TABLE>
<CAPTION>
PEOPLE'S SAVINGS FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except per share data)
unaudited
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income:
Loans, including fees $4,844 $4,477 $9,625 $8,828
Investment Securities 2,164 2,118 4,265 4,086
Trading Account - 1 - 46
Short-term Investments 187 177 364 318
Total Interest Income 7,195 6,773 14,254 13,278
Interest Expense:
Interest on deposits 3,545 3,317 7,102 6,197
Interest on borrowings 221 302 436 717
Total Interest Expense 3,766 3,619 7,538 6,914
Net Interest Income 3,429 3,154 6,716 6,364
Provision for Loan Losses 95 35 159 71
Net Interest Income after Provision
for Loan Losses 3,334 3,119 6,557 6,293
Other Income:
Service charges and fees 260 264 507 517
Trust fees 353 280 671 539
Net Investment Securities Losses - (73) (20) (69)
Trading Account Gains - - - 49
Unrealized Gains (Losses) on Loans
Held for Sale (52) 5 (121) 5
Other Operating Income 69 34 159 66
Total Other Income 630 510 1,196 1,107
Other Expenses:
Salaries and Benefits 1,224 1,109 2,473 2,147
Occupancy 267 228 535 476
Furniture and Equipment 252 223 473 447
FDIC Deposit Insurance 1 182 2 364
Other Real Estate Expenses 18 109 17 162
Other Operating Expenses 744 624 1,374 1,237
Total Other Expenses 2,506 2,475 4,874 4,833
Income Before Income Taxes 1,458 1,154 2,879 2,567
Income Taxes 249 447 782 1,024
Net Income $1,209 $707 $2,097 $1,543
Per Share Data:
Net Income $0.62 $0.36 $1.07 $0.78
Weighted Average Common Shares
Outstanding 1,946,375 1,979,704 1,961,711 1,983,972
Dividends Declared Per Share $0.23 $0.22 $0.45 $0.44
</TABLE>
See notes to condensed consolidated financial statements.
<TABLE>
<CAPTION>
PEOPLE'S SAVINGS FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(Unaudited) Six months ended
June 30,
1996 1995
<S> <C> <C>
Operating activities
Net Income $2,097 $1,543
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for depreciation 252 232
Accretion and amortization of bond premiums
and discounts, net 61 44
Provision for loan losses 159 71
Amortization of net deferred loan fees (64) (88)
Decrease in trading account securities - 5,461
Loans sold 390 949
Realized investment securities losses 20 69
Writedowns on foreclosed real estate 20 126
Goodwill amortization 117 165
Increase (decrease) in accrued expenses (94) 156
Other items, net (1,683) 2,555
Net cash provided by operating activities 1,275 11,283
Investing activities
Purchases of available-for-sale securities (62,238) (18,986)
Proceeds from sale of available-for-sale securities 14 4,326
Proceeds from maturities of available-for-sale
securities 25,463 2,016
Purchases of held-to-maturity securities - (1,265)
Proceeds from maturities of held-to-maturity securities 8,157 3,173
Net increase in loans (11,644) (5,708)
Purchases of premises and equipment, net (166) (244)
Foreclosed real estate sold 255 617
Net cash used by investing activities (40,159) (16,071)
Financing activities
Net increase (decrease) in demand deposits, NOW accounts,
savings accounts, and mortgagors' escrow accounts 5,803 (11,730)
Net increase in time deposits 10,054 27,732
Net increase (decrease) in borrowings from
the Federal Home Loan Bank of Boston 4,967 (14,320)
Net increase in repurchase agreements 7,500 -
Cash Dividends paid (861) (859)
Acquisition of treasury stock (1,479) (721)
Issuance of Common Stock 217 26
Net cash provided by financing activities 26,201 128
Decrease in cash and cash equivalents (12,683) (4,660)
Cash and cash equivalents at January 1 28,162 19,414
Cash and cash equivalents at June 30 15,479 14,754
Non-cash investing and financing activities
Increase (decrease) in net unrealized holding gains
(losses) on securities carried at market (774) 2,037
Transfer of loans to foreclosed real estate 97 685
See notes to condensed consolidated financial statements.
</TABLE>
PEOPLE'S SAVINGS FINANCIAL CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
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 three and six month periods ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ending December
31, 1996 For further information, refer to the consolidated financial
statements and footnotes thereto included in the Corporation's Annual Report
on Form 10-K for the year ended December 31, 1995.
Certain 1995 amounts have been reclassified to conform with the 1996
presentation. These reclassifications had no impact on net income.
Note B - CHANGES IN ACCOUNTING PRINCIPLES
On January 1, 1996, the Corporation adopted Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." The adoption of this accounting
standard had no impact on the Corporation's financial condition or results of
operations because, in the opinion of management, it did not hold any long-
lived assets that were impaired.
On January 1, 1996, the Corporation adopted Statement of Financial Accounting
Standards No. 122 "Accounting for Mortgage Servicing Rights - an amendment of
FASB Statement No. 65." The adoption of this accounting standard had an
immaterial impact on the Corporation's financial condition and results of
operations because it only originated for sale $1.30 million of loans during
the six month period ended June 30, 1996 resulting in capitalized originated
loan servicing rights of approximately $13,000.
Note C - SECURITIES
The amortized cost and estimated market values of investment securities for
June 30, 1996 and December 31, 1995 are as follows.
<TABLE>
<CAPTION>
Net
Estimated Gross Gross Unrealized
(in thousands) Amortized Market Unrealized Unrealized Gains/
June 30, 1996 Cost Value Gains Losses (Losses)
<S> <C> <C> <C> <C> <C>
Available for sale
United States Government
and agency obligations $51,519 $50,738 $31 $812 ($781)
Corporate securities 5,637 5,635 15 17 (2)
Mortgage-backed securities 55,422 55,300 235 357 (122)
Total debt securities 112,578 111,673 281 1,186 (905)
Marketable equity
securities 6,908 7,108 289 89 200
Mutual funds 8,241 8,506 344 79 265
$127,727 $127,287 $914 $1,354 ($440)
Held to maturity
United States Government
and agency obligations $3,997 $3,959 $6 $44 ($38)
Mortgage-backed securities 26,280 25,326 - 954 (954)
$30,277 $29,285 $6 $998 ($992)
Net
Estimated Gross Gross Unrealized
(in thousands), Amortized Market Unrealized Unrealized Gains/
December 31, 1995 Cost Value Gains Losses (Losses)
Available for sale
United States Government
and agency obligations $44,506 $44,553 $159 $112 $47
State of Connecticut
taxable obligations 1,250 1,251 1 - 1
Corporate securities 8,133 8,227 95 1 94
Mortgage-backed securities 21,480 21,523 163 120 43
Total debt securities 75,369 75,554 418 233 185
Marketable equity
securities 9,915 10,002 112 25 87
Mutual funds 5,615 5,572 - 43 (43)
$90,899 $91,128 $530 $301 $229
Held to maturity
United States Government
and agency obligations $9,994 $10,026 $55 $23 $32
Mortgage-backed securities 28,467 28,233 35 269 (234)
$38,461 $38,259 $90 $292 ($202)
</TABLE>
Note D - LOANS
The following table shows the Corporation's loan distribution at the end of
the six month period ended June 30, 1996 compared to December 31, 1995.
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
($ in thousands) Balance % of Total Balance % of Total
<S> <C> <C> <C> <C>
Real Estate Loans:
1 to 4 family residential 200,682 80% 193,087 80%
Multifamily (5 or more units) 3,874 2% 3,856 2%
Home equity credit lines 4,344 2% 4,873 2%
Construction and land
development 4,573 2% 3,933 2%
Second mortgages 23,198 9% 21,795 9%
Commercial mortgages 7,429 3% 5,937 2%
Total real estate loans 244,100 98% 233,481 97%
Consumer installment 4,898 2% 4,718 2%
Credit cards 1,162 0% 1,346 1%
Commercial 532 0% 239 0%
Total loans 250,692 100% 239,784 100%
Less: Loans held for sale 1,809 927
Allowance for loan losses 1,516 1,578
Deferred fees 395 487
Net loans 246,972 236,792
</TABLE>
Note E - NON-PERFORMING ASSETS
The following table illustrates the composition of the non-performing assets
as of June 30, 1996 and December 31, 1995.
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
($ dollars in thousands) # of loans Amount # of loans Amount
<S> <C> <C> <C> <C>
Loans past due 90 days or more:
Residential 22 $1,528 10 $711
Installment 1 11 3 10
Total non-performing loans 23 1,539 13 721
Foreclosed real estate:
Residential - - 4 98
Commercial real estate - - 2 80
Total foreclosures - - 6 178
Repossessed assets - - - -
Total non-performing assets $1,539 $899
Non-performing assets to total
loans and OREO 0.62% 0.38%
Allowance for loans losses to
non-performing loans 98.51% 218.86%
As a percent of total loans:
Loans past due 90 days or more 0.62% 0.30%
Allowance for loan losses 0.61% 0.66%
</TABLE>
Note F - LOAN LOSS RESERVE
The following table summarizes the Corporation's loan loss reserve as of the
six months ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
(in thousands) Six months ended June 30, 1996 1995
<S> <C> <C>
Beginning balance 1,578 1,791
Provision charged to expense 159 65
Net charge-offs 221 188
Ending balance $1,516 $1,668
</TABLE>
The allowance for loan losses is maintained at a level believed adequate by
management to absorb potential losses in the loan portfolio. The adequacy
of the allowance is determined by management's evaluation of known and
inherent risks in the loan portfolio and prevailing economic conditions and
the Bank's loss experience. The allowance is increased by provisions for
loan losses charged against income.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
General
This section presents management's discussion and analysis of the
consolidated results of operations for People's Savings Financial Corp.
(the "Corporation") and The People's Savings Bank of New Britain (the
"Bank") for the three and six month periods ended June 30, 1996 and 1995,
and its financial condition as of June 30, 1996. In order to understand
this section in context, it should be read in conjunction with the
consolidated financial statements and notes thereto.
Financial Condition
At June 30, 1996 total assets were $437.03 million, an increase of $26.87
million (or 6.6%) from total assets of $410.16 million at December 31,
1995. Changes in assets consisted of an increase in investment securities
available for sale and an increase in loans, partially offset by a decrease
in cash and cash equivalents and investment securities held to maturity.
The increase in total assets was funded by an increase in total deposits,
borrowings from the Federal Home Loan Bank, and repurchase agreements. The
increase in total deposits was primarily due to growth in the Bank's newer
branches. During the six month period ended June 30, 1996 72,500 shares of
treasury stock were purchased at a cost of $1.48 million. The Corporation
had unrealized losses on securities available for sale, net of taxes, of
$.26 million at June 30, 1996, a decrease of $.45 million from a gain of
$.19 million at December 31, 1995, primarily due to the rise in interest
rates at the end of the first quarter.
CAPITAL
The Corporation's and the Bank's Tier 1 leverage capital ratios at June 30,
1996 were 10.19% and 9.74% respectively. The Corporation's and the Bank's
total risk-based capital ratios at June 30, 1996 were 20.12% and 19.28%
respectively. The Corporation's and the Bank's Tier 1 risk-based capital
ratios at June 30, 1996 were 19.41% and 18.57%, respectively. All of the
Corporation's and the Bank's ratios as of June 30, 1996 were well above
applicable minimums. As of June 30, 1996, the Corporation and the Bank
fall within the highest capital category of "well capitalized" under the
rules of the Federal Reserve Board and the Federal Deposit Insurance
Corporation.
RESULTS OF OPERATIONS
Net income for the three month period ended June 30, 1996 was $1,209,000,
an increase of $502,000 as compared to $707,000 for the comparable period
in 1995. The increase in income for the three month period was primarily
due to the Bank's settlement of a tax claim against the State of
Connecticut which added approximately $304,000 or $.16 per share to net
income. Net interest income for the three month period ended June 30, 1996
increased by $275,000 primarily due to increased income on loans and
investments and reduced interest expense on borrowings offset by an
increase in interest expense on deposits. The increase in net income for
the three month period ended June 30, 1996 was also due to increased trust
fees, decreases in FDIC deposit insurance and other real estate expense,
offset by losses on loans held for sale and increases in salaries and
employee benefits, and other operating expenses. These increases in
salaries and benefit expenses relate to our recent expansion efforts.
Net income for the six month period ended June 30, 1996 was $2,097,000, an
increase of $554,000 or 35.9%, from net income of $1,543,000 for the six
month period ended June 30, 1995. The increase in net income for the six
month period ended June 30, 1996 was due primarily to the tax settlement
mentioned above, increased net interest income, trust fees, and lower
expenses related to FDIC deposit insurance and other real estate expenses.
These increases were partially offset by unrealized losses on loans held
for sale and increases in salaries and benefits, and other operating
expenses relating to our expansion efforts.
AVERAGE BALANCES, INTEREST, YIELDS AND RATES
The following table presents condensed daily average statements of
condition, which include non-accrual loans, the components of net interest
income and selected statistical data.
<TABLE>
<CAPTION>
Three months ended
June 30,
(dollars in
thousands)
Annualized Variance
Average Balance Average rate Interest Inc. due to
1996 1995 1996 1995 1996 1995 (dec) Vol. Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans $248,096 $231,061 7.81% 7.75% $4,844 $4,477 $367 $332 $35
Investment
secur-
ities(a) 150,000 157,438 6.40% 5.91% 2,351 2,296 55 (95) 150
Total(a) 398,096 388,499 7.28% 7.01% 7,195 6,773 422 237 185
Other assets 15,085 14,560
Total
assets $413,181 $403,059
Deposits $343,574 $330,284 4.13% 4.02% 3,545 3,317 228 136 92
Borrowings 15,298 21,313 5.78% 5.67% 221 302 (81) (87) 6
Total 358,872 351,597 4.20% 4.12% 3,766 3,619 147 49 98
Demand
deposits 6,559 5,473
Other
liabilities 3,754 3,309
Stockholders'
equity 43,996 42,680
Total
liabilities
and
stock-
holders'
equity $413,181 $403,059
Net interest income $3,429 $3,154 $275 $188 $87
Net interest rate spread(a) 3.08% 2.89%
Net interest rate margin(a) 3.50% 3.28%
(a) tax adjusted yield
Six months ended
June 30,
(dollars in
thousands)
Annualized Variance
Average Balance Average rate Interest Inc. due to
1996 1995 1996 1995 1996 1995 (dec) Vol. Rate
Loans $244,392 $230,557 7.88% 7.66% $9,625 $8,828 $797 $540 $257
Investment
secur-
ities(a) 149,043 155,170 6.34% 5.79% 4,629 4,450 179 (162) 341
Total(a) 393,435 385,727 7.29% 6.91% 14,254 13,278 976 378 598
Other assets 15,289 14,939
Total
assets $408,724 $400,666
Deposits $339,533 $325,119 4.18% 3.81% 7,102 6,197 905 283 622
Borrowings 14,985 25,227 5.82% 5.68% 436 717 (281) (298) 17
Total 354,518 350,346 4.25% 3.95% 7,538 6,914 624 (15) 639
Demand
deposits 5,867 4,985
Other
liabilities 3,915 3,245
Stockholders'
equity 44,424 42,090
Total
liabilities
and
stock-
holders'
equity $408,724 $400,666
Net interest income $6,716 $6,364 $352 $393 ($41)
Net interest rate spread(a) 3.04% 2.96%
Net interest rate margin(a) 3.46% 3.32%
(a) tax adjusted yield
</TABLE>
The average balances, interest, yields and rates table shows that for the
three month period ended June 30, 1996 compared to the same period in 1995
there was an increase in interest income caused primarily by increased
volume of loans and yield on loans, and yield on investments offset by
lower investment balances. Interest income for the six month period ended
June 30, 1996 increased when compared to the same period last year
primarily due to increased volume and rate on loans, and increased yield on
investments offset by lower average balance on investments. The comparison
of interest expense for the three month period ended June 30, 1996 compared
to the same period in 1995 shows that interest expense increased primarily
due to increased volume of deposits, and to a lesser extent increased rates
on deposits, partially offset by a decrease in the volume of borrowings.
Interest expense for the six month period ended June 30, 1996 increased
when compared to the same period last year primarily due to increased rate
on deposits and to a lesser extent volume of deposits partially offset by
decreased borrowings. This activity is consistent with the changes in the
Corporation's balance sheet and continued increases in short-term interest
rates. During the period the Bank took advantage of an arbitrage
opportunity by borrowing approximately $20 million, currently at a rate of
6.31% and purchasing approximately $20 million in mortgage-backed
securities with coupon rates of 8%.
Net interest rate spreads increased during the three and six month periods
ended June 30, 1996 when compared to the same periods last year, because
the Bank's yield on earning assets increased greater than the rate the Bank
paid on its interest bearing liabilities. The increase in the yield on
earning assets was due primarily to increased yield on investments and to a
lesser extent increased yield on loans. The rate the Bank pays on its
interest bearing liabilities increased primarily due to higher interest
rates on the Bank's deposits, which includes a shift in deposits to higher
interest rate certificate of deposits from lower interest rate deposit
accounts and also to a lesser extent higher rates on borrowings. The net
interest rate margin increased for the three and six month periods ended
June 30, 1996 when compared to the same periods of 1995, primarily due to
reasons mentioned above. Net interest income for the three and six month
periods ended June 30, 1996 increased primarily due to the increase in the
net interest rate margin.
OTHER INCOME, OTHER EXPENSE, AND TAXES
The following table details the significant increases and decreases in
other income for the three and six month periods ended June 30.
<TABLE>
<CAPTION>
Three Months ended
Other income June 30,
(dollars in thousands) 1996 1995 Inc(dec) %
<S> <C> <C> <C> <C>
Service charges and fees $260 $264 $ (4) (1.5)%
Trust fees 353 280 73 26.1
Net investment securities gains (losses) - (73) 73 (100.0)
Unrealized losses on loan held for sale (52) 5 (57) N/M
Other operating income 69 34 35 102.9
Total other income $630 $ 510 $ 120 23.5%
Six Months ended
Other income June 30,
(dollars in thousands) 1996 1995 Inc(dec) %
Service charges and fees $507 $517 $(10) (1.9)%
Trust fees 671 539 132 24.5
Net investment securities gains (losses) (20) (69) 49 (71.0)
Trading account gains (losses) - 49 (49) (100.0)
Unrealized losses on loan held for sale (121) 5 (126) N/M
Other operating income 159 66 93 140.9
Total other income $1,196 $1,107 $ 89 8.0%
</TABLE>
Other income for the three month period ended June 30, 1996 increased by
$120,000 as compared to the same period in 1995. The increase was
primarily due to a decrease in investment securities losses and increased
trust income partially offset by unrealized losses on loans held for sale.
The unrealized losses on loans held for sale was due to the rise in
interest rates which decreased the market value of these loans. Trust
assets under management at June 30, 1996 totaled $364,000,000.00 compared
to $241,000,000.00 at June 30, 1995. Other operating income increased by
$35,000 for the quarter as compared to the same quarter last year.
Other income for the six month period ended June 30, 1996 increased by
$89,000 as compared to the same period in 1995. The increase was primarily
due to increased trust fees, increased other operating income, and a
decrease in losses on investment securities. The increases were partially
offset by a decrease in trading account gains and unrealized losses on
loans held for sale caused by the increase in interest rates mentioned
above. The trading account was liquidated during the first quarter of
1995.
The following table details the significant increases and decreases in
other expenses for the three and six month periods ended June 30.
<TABLE>
<CAPTION>
Three Months ended
Other expenses June 30,
(dollars in thousands) 1996 1995 Inc(dec) %
<S> <C> <C> <C> <C>
Salaries and benefits $1,224 $1,109 $115 10.4%
Occupancy 267 228 39 17.1
Furniture and equipment 252 223 29 13.0
FDIC deposit insurance 1 182 (181) (99.5)
Other real estate expenses 18 109 (91) (83.5)
Other operating expenses 744 624 120 19.2
Total other expenses $2,506 $2,475 $ 31 1.3%
Six Months ended
Other expenses June 30,
(dollars in thousands) 1996 1995 Inc(dec) %
Salaries and benefits $2,473 $2,147 $326 15.2%
Occupancy 535 476 59 12.4
Furniture and equipment 473 447 26 5.8
FDIC deposit insurance 2 364 (362) (99.5)
Other real estate expenses 17 162 (145) (89.5)
Other operating expenses 1,374 1,237 137 11.1
Total other expenses $4,874 $4,833 $ 41 0.9%
</TABLE>
Non-interest expense increased slightly for the three month period ended
June 30, 1996, from the comparable period of 1995. The increase was
primarily due to increased salaries and benefit expenses and increased
other operating expenses, caused primarily by the continued growth of our
trust department, our new commercial loan department, and . This increase
was partially offset by a reduction in FDIC deposit insurance premiums.
The Bank paid a rate of $.23 per year for every $100 during the second
quarter ended June 30, 1995, compared to a rate of $.00 per year for every
$100 in deposits during the second quarter of 1996. The Bank will continue
to pay a rate of $.00 plus a flat $500.00 fee per quarter until such time
that the FDIC changes the rate. Other real estate expenses decreased when
compared to 1995 due to gains on sales of foreclosed real estate record
during the second quarter of 1996 and a reduced number of foreclosed
properties.
Non-interest expense increase slightly for the six months ended June 30,
1996 as compared to the same period last year. The increase was primarily
due to increased salaries and benefits, and increased other operating
expenses, partially offset by a decrease in FDIC deposit insurance
premiums and other real estate expenses. The reasons for the changes in
the six month period are consistent with the changes in the three month
period explained above.
The effective tax rate for the three month period ended June 30, 1996
decreased to 17.1% from 38.7% for the same period in 1995. The effective
tax rate for the six month period ended June 30, 1996 decreased to 27.2%
from 39.9% for the same period in 1995. The decrease was primarily due to
the Bank's settlement of a tax claim against the State of Connecticut
mentioned previously, an increase in dividend income which qualifies for
the Federal dividend received deduction and a decrease in the State of
Connecticut tax rate to 10.75% from 11.25%
PEOPLE'S SAVINGS FINANCIAL CORP.
Part II Other Information
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the Corporation or
its subsidiary is a party, or of which any of their property is the
subject, other than ordinary routine litigation in the normal course of
business.
Item 2. Changes in Securities
During the second quarter of 1996, there were no changes which would
materially modify the rights of the holders of the Corporation's registered
securities.
Item 3. Defaults Upon Senior Securities
The Corporation and its subsidiary are not in default with respect to the
payment of principal or interest related to any outstanding borrowing.
Item 4. Submission of Matters to a Vote of Securities Holders
The annual meeting of stockholders was held on April 23, 1996. The
following proposals were presented and voted on:
Proposal 1: Election of Directors:
<TABLE>
<CAPTION>
AGAINST OR BROKER
FOR WITHHELD ABSTAIN NON-VOTE
<S> <C> <C> <C> <C>
Henry Poplaski 1,169,241 123,843 0 0
A. Richard Puskarz 1,164,763 128,320 0 0
</TABLE>
The following individuals continued to serve as directors of the
Corporation after the annual meeting:
Walter D. Blogoslawski
Stanley P. Filewicz, M.D.
Roland L. LeClerc
Chester S. Sledzik, Esquire
Robert A. Gryboski, M. D.
Walter J. Liss
Richard S. Mansfield
Robert A. Story
Joseph A. Welna, M.D.
Proposal 2: Ratification of the appointment of Coopers & Lybrand LLP as
independent auditors for the fiscal year ending December 31,
1996.
AGAINST OR BROKER
FOR WITHHELD ABSTAIN NON-VOTE
Coopers & Lybrand LLP 1,275,699 5,689 11,696 0
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
11.1 Computation of net income per common share.
27 Financial data schedule.
(B) Reports on Form 8-K:
None.
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.
PEOPLE'S SAVINGS FINANCIAL CORP.
Date: August 6, 1996 By: /s/ Richard S. Mansfield
Richard S. Mansfield
President and Chief Executive
Officer
Date: August 6, 1996 By: /s/ John G. Medvec
John G. Medvec
Executive Vice President and
Treasurer
Exhibit 11.1
<TABLE>
<CAPTION>
PEOPLE'S SAVINGS FINANCIAL CORP.
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands except per share amounts)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net income -
primary and fully diluted $1,209 $707 $2,097 $1,543
Weighted Average Common Stock
and Common Equivalent Stock
Weighted average common stock
outstanding 1,901 1,951 1,917 1,957
Assumed conversion (as of the
beginning of each period or
upon issuance during a period)
of stock options outstanding at
the end of each period 34 28 31 27
Weighted average common stock
outstanding - primary 1,935 1,979 1,948 1,984
Weighted average common stock
outstanding 1,901 1,951 1,917 1,957
Assumed conversion (as of the
beginning of each period or
upon issuance during a period)
of stock options outstanding
at the end of each period 45 28 45 27
Weighted average common stock
outstanding - fully diluted 1,946 1,979 1,962 1,984
Earnings Per Common and Common
Equivalent Share
Primary $0.62 $0.36 $1.08 $.78
Fully diluted $0.62 $0.36 $1.07 $.78
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's June 30, 1996 unaudited balance sheet, income statement and cash
flow statement, and notes thereto, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,468,000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 9,011,00
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 127,287,000
<INVESTMENTS-CARRYING> 30,277,000
<INVESTMENTS-MARKET> 29,285,000
<LOANS> 246,972,000
<ALLOWANCE> 1,516,000
<TOTAL-ASSETS> 437,034,000
<DEPOSITS> 354,606,000
<SHORT-TERM> 31,417,000
<LIABILITIES-OTHER> 6,779,000
<LONG-TERM> 0
0
0
<COMMON> 2,533,000
<OTHER-SE> 41,699,000
<TOTAL-LIABILITIES-AND-EQUITY> 437,034,000
<INTEREST-LOAN> 9,625,000
<INTEREST-INVEST> 4,265,000
<INTEREST-OTHER> 364,000
<INTEREST-TOTAL> 14,254,000
<INTEREST-DEPOSIT> 7,102,000
<INTEREST-EXPENSE> 7,538,000
<INTEREST-INCOME-NET> 6,716,000
<LOAN-LOSSES> 159,000
<SECURITIES-GAINS> (20,000)
<EXPENSE-OTHER> 4,874,000
<INCOME-PRETAX> 2,879,000
<INCOME-PRE-EXTRAORDINARY> 2,879,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,097,000
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.07
<YIELD-ACTUAL> 3.46
<LOANS-NON> 1,539,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,578,000
<CHARGE-OFFS> 246,000
<RECOVERIES> 25,000
<ALLOWANCE-CLOSE> 1,516,000
<ALLOWANCE-DOMESTIC> 1,266,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 250,000
</TABLE>
