<PAGE> 1
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UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-Q
/X/ Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period ended September 30, 1996, or
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________ to _________
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Commission File Number 0-18082
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GREAT SOUTHERN BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
43-1524856
(IRS Employer Identification Number)
1451 E. BATTLEFIELD
SPRINGFIELD, MISSOURI
(Address of principal executive offices)
65804
(Zip Code)
(417) 887-4400
(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
The number of shares outstanding of each of the registrant's classes
of common stock: 8,357,492 shares of common stock, par value $.01,
outstanding at November 7, 1996
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<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
------------ ------------
<S> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,942,170 $ 6,661,290
Interest-bearing deposits in other financial institutions. . . . . . . . . 12,491,978 22,953,737
----------- -----------
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 18,434,148 29,615,027
Available for sale securities. . . . . . . . . . . . . . . . . . . . . . . 4,937,039 4,655,816
Held to maturity securities (fair value $49,293,000 - September 1996;
$49,291,000 - June 1996) . . . . . . . . . . . . . . . . . . . . . . . . 49,217,274 49,182,323
Loans receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . 552,765,015 546,759,467
Foreclosed assets held for sale, net . . . . . . . . . . . . . . . . . . . 5,293,595 9,861,556
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 6,592,776 6,686,954
Accrued interest receivable
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,944,685 4,289,192
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919,560 1,067,230
Investment in FHLBank Stock. . . . . . . . . . . . . . . . . . . . . . . . 10,022,800 10,022,800
Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . . . . 2,513,673 1,774,439
Excess of cost over fair value of net assets acquired. . . . . . . . . . . 5,000 1,101,961
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,013,567 3,088,540
------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $657,659,132 $668,105,305
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $382,458,878 $397,054,516
Federal Home Loan Bank advances. . . . . . . . . . . . . . . . . . . . . . 178,597,750 180,797,043
Short-term borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . 19,421,096 16,467,825
Advances from borrowers for taxes and insurance. . . . . . . . . . . . . . 3,398,512 2,659,427
Accounts payable and accrued expenses. . . . . . . . . . . . . . . . . . . 5,508,705 2,431,507
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,721,099 887,418
------------ ------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 591,106,040 600,297,736
------------ ------------
Capital stock
Serial preferred stock, $.01 par value; authorized 1,000,000 shares
Common stock, $.01 par value; authorized 10,000,000 shares,
issued 6,162,501 shares. . . . . . . . . . . . . . . . . . . . . . . . 61,625 61,625
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . 16,834,507 16,834,507
Retained earnings (substantially restricted) . . . . . . . . . . . . . . . 67,666,638 67,917,888
Unrealized appreciation on available-for-sale securities, net of
income taxes of $186,433 - September 1996 and $61,460 - June 1996. . . . 291,600 96,129
Treasury stock, at cost; 1,797,449 shares - September 1996;
1,756,453 shares - June 1996 . . . . . . . . . . . . . . . . . . . . . . (18,301,278) (17,102,580)
------------ ------------
Total Stockholders' Equity. . . . . . . . . . . . . . . . . . . . . . . 66,553,092 67,807,569
------------ ------------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . $657,659,132 $668,105,305
============ ============
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 3
GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1996 1995
----------- -----------
<S> <C> <C>
INTEREST INCOME
Loans $12,624,995 $12,240,639
Investment Securities 1,009,441 925,041
Other 70,955 52,966
---------- ----------
TOTAL INTEREST INCOME 13,705,391 13,218,646
---------- ----------
INTEREST EXPENSE
Deposits 4,203,351 4,278,824
FHLBank advances 2,662,821 2,519,093
Short-term borrowings 145,023 130,223
---------- ----------
TOTAL INTEREST EXPENSE 7,011,195 6,928,140
---------- ----------
NET INTEREST INCOME 6,694,196 6,290,506
PROVISION FOR LOAN LOSSES 410,593 324,080
---------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,283,603 5,966,426
---------- ----------
NONINTEREST INCOME
Commissions 1,183,208 1,080,646
Service charge fees 610,151 607,381
Net realized gains on sales of loans and
available-for-sale securities 265,113 733,377
Income (expense) on foreclosed assets 328,011 (22,999)
Other income 334,088 343,368
---------- ----------
TOTAL NONINTEREST INCOME 2,720,571 2,741,773
---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits 2,361,941 2,045,733
Net occupancy expense 561,863 550,491
Postage 145,572 148,289
Insurance 2,814,738 315,001
Amortization of goodwill 1,096,961 48,211
Advertising 112,794 82,450
Office supplies and printing 127,136 98,469
Other operating expenses 504,219 627,567
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TOTAL NONINTEREST EXPENSE 7,725,224 3,916,211
---------- ----------
INCOME BEFORE INCOME TAXES 1,278,950 4,791,988
PROVISION FOR INCOME TAXES 785,653 1,907,400
---------- ----------
NET INCOME $ 493,297 $ 2,884,588
========== ==========
EARNINGS PER COMMON SHARE $.11 $.62
=== ===
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 4
GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1996 1995
-------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 493,297 $ 2,884,588
Items not requiring (providing) cash:
Depreciation 214,847 241,580
Amortization 1,096,961 21,195
Provision for loan losses 410,593 324,080
Provision for losses on foreclosed assets 0 75,000
Net realized gains on sale of loans (121,145) (125,789)
Loss on sale of premises and equipment 0 (1,225)
Gain on sale of foreclosed assets (352,506) (21,537)
Amortization of deferred income,
premiums and discounts (227,854) (179,373)
Net realized gains on sale of available-for-sale securities (143,968) (607,188)
Deferred income taxes (50,000) 155,000
Changes in:
Accrued interest receivable 492,177 (104,527)
Prepaid expenses and other assets (739,234) 91,525
Accounts payable and accrued expenses 3,077,198 360,774
Income taxes payable 833,681 1,232,012
----------- -----------
Net cash provided by operating activities 4,984,047 4,346,115
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans (1,278,872) (6,225,133)
Purchase of premises and equipment (120,669) (453,764)
Proceeds from sale of premises and equipment 0 2,875
Proceeds from sale of foreclosed assets 215,044 18,200
Capitalized costs on foreclosed assets (13,462) (83,686)
Proceeds from sale of available-for-sale securities 1,002,406 2,217,545
Proceeds from maturing held-to-maturity securities 8,801,992 20,916
Purchase of held-to-maturity securities (8,906,328) (1,502,398)
Purchase of available-for-sale securities (819,217) (516,488)
----------- -----------
Net cash used in investing activities (1,119,106) (6,521,933)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in certificates of deposit (8,588,710) 3,212,370
Net decrease in checking and savings (6,006,929) (2,774,717)
Proceeds from FHLBank advances 71,195,556 104,766,081
Repayments of FHLBank advances (73,394,849) (92,366,620)
Net increase in short-term borrowings 2,953,272 4,586,027
Advances from borrowers for taxes and insurance 739,085 737,365
Purchase of treasury stock (1,215,973) (428,269)
Dividends paid (744,547) (787,861)
Stock options exercised 17,275 30,526
----------- -----------
Net cash provided by (used in ) financing activities (15,045,820) 16,974,902
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,180,879) 14,799,084
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 29,615,027 17,459,951
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 18,434,148 $ 32,259,035
=========== ===========
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 5
GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial
statements of Great Southern Bancorp, Inc. (the "Company") have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-Q and Rule 10-01 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 only of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended September
30, 1996 and 1995 are not necessarily indicative of the results that
may be expected for the full year. 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, 1996. When necessary, reclassifications have been made to prior
period balances to conform to current period presentation. These
reclassifications had no effect on net income.
Subsequent to September 30, 1996, the Company declared and
completed a 2-for-1 stock split effective October 21, 1996 for October
11, 1996 stockholders of record. All share information in this
document are the shares before this subsequent split.
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The discussion set forth below, as well as other portions of this
Form 10-Q, may contain forward-looking comments. Such comments are
based upon the information currently available to management of the
Company and management's perception thereof as of the date of this
Form 10-Q. Actual results of the Company's operations could
materially differ from those forward-looking comments. The
differences could be caused by a number of factors or combination of
factors including, but not limited to, changes in the availability
and/or cost of capital; changes in demand for banking services;
changes in the portfolio composition; change in the interest rate
yield on the Company's investments; changes in management strategy;
increased competition from both bank and non-bank companies; changes
in the economic, political or regulatory environments in the United
States; litigation involving the Company and/or its subsidiaries; and
changes in the availability of qualified labor. Readers should take
these factors into account in evaluating any such forward-looking
comments.
<PAGE> 6
General
Parts of management's discussion and analysis in the annual report
on Form 10-K are not included below. The following should be read in
conjunction with management's discussion and analysis in the Company's
June 30, 1996 Form 10-K.
The consolidated net income of the Company and more specifically,
the net income of its primary subsidiary, Great Southern Bank, FSB
(the "Bank"), is primarily dependent upon the difference or spread
between the average yield earned on loans and investments and the
average rate paid on deposits and borrowings, as well as the relative
amounts of such assets and liabilities. The interest rate spread is
affected by regulatory, economic and competitive factors that
influence interest rates, loan demand and deposit flows. The Bank,
like other financial institutions, is subject to interest rate risk to
the degree that its interest-bearing liabilities mature or reprice at
different times, or on a different basis than its interest-earning
assets. The Company's consolidated net income is also affected by,
among other things, gains on sales of loans and available-for-sale
investments, provisions for loan losses, service charge fees and
commissions, operating expenses and income taxes.
Management of the Company has developed and implemented an
asset/liability management strategy to match the repricing and/or
maturity of its interest-earning assets and its interest-bearing
liabilities and to achieve improved and sustained operating income
without adversely affecting asset quality. In implementing this
strategy, the Company has sought, subject to market conditions, to
increase its origination of adjustable-rate loans secured by one- to
four-family residential real estate in order to increase its
investment in loans that are interest rate sensitive. The Company has
also sold substantially all of the fixed-rate, one- to four-family
residential loans originated since fiscal 1986, with servicing
retained through fiscal 1995 and primarily servicing released
beginning in fiscal 1996. Beginning in fiscal 1992, the Company's
lending returned to origination of adjustable-rate commercial real
estate and commercial business loans. By doing so, the Company is
attempting to increase significantly its loan fees, increase its
investment in loans that are interest rate sensitive and improve the
yield on its loan portfolio. The Company intends to continue to
prudently evaluate the origination of commercial real estate loans
(both to purchase existing properties and construct new properties) in
its total loan portfolio subject to commercial real estate and other
market conditions and to applicable regulatory restrictions and may
increase the percent of the commercial real estate loans to the
overall portfolio.
<PAGE> 7
EFFECT OF FEDERAL LAWS AND REGULATIONS
Federal legislation and regulation significantly affect the banking
operations of the Company and the Bank, and have increased competition
among savings institutions, commercial banks, mortgage banking
enterprises and other financial institutions. In particular, the
capital requirements and operations of regulated depository
institutions such as the Company and the Bank have been and will be
subject to changes in applicable statutes and regulations from time to
time, which changes could, under certain circumstances, adversely
affect the Company or the Bank.
On September 30, 1996, the President of the United States signed
into law legislation that impacts two major areas of the Bank. The
first major area was a one-time assessment of SAIF-insured
institutions of 65.7 basis points of March 31, 1995 SAIF-assessable
deposits. The Bank has been assessed approximately $2.5 million ($1.6
million after income taxes) which is due to be paid at the end of
November 1996. The payment was expensed at September 30, 1996 and had
a significant impact on the Bank's earnings as of the time the payment
was accrued.
Along with this one-time SAIF assessment, the semi-annual SAIF
assessment is projected to be reduced, beginning January 1, 1997, from
an annualized 23 basis points on SAIF-assessable deposits, to
approximately 6.4 basis points annualized on SAIF-assessable deposits.
The Bank estimates this will reduce the monthly expense of the Bank,
beginning January 1, 1997, by approximately $55,000 ($35,000 after
tax).
The second major area of change is the repeal of the bad debt
reserve method of accounting for bad debts by large thrifts for
taxable years beginning after 1995 (year ended June 30, 1997 for the
Bank). The legislation requires applicable excess reserves
accumulated after 1987 (year ended June 30, 1988 for the Bank) be
recaptured and restored to income over a six year period with the
first year beginning after 1995 (year ended June 30, 1997 for the
Bank), and no longer creates recapture of the applicable excess
reserves accumulated prior to 1988 for thrifts at the time they
convert to bank charters. The post 1987 recapture may be delayed for
a one- or two-year period if certain residential loan origination
requirements are met. The amount of post 1987 recapture for the Bank
is estimated at $5 million which would create income taxes of
approximately $2 million, or $333,000 per year for each of the six
years. The $2 million of tax has been accrued and expensed by the
Bank in previous periods and accordingly, will not be reflected in
earnings or capital when paid.
Beginning with the year ending June 30, 1997, the Bank will be
required to follow the specific charge-off method which only allows a
bad debt deduction equal to actual charge-offs, net of recoveries,
experienced during the fiscal year of the deduction. In a year where
recoveries exceed charge-offs, the Bank would be required to include
the net recoveries in taxable income.
<PAGE> 8
RECENT CHANGES IN ACCOUNTING PRINCIPLES
In March 1995, the FASB issued Statement of Financial Accounting
Standards No. 121. "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of" ("SFAS 121"). This
statement applies to assets to be held and used as well as assets to
be disposed of. SFAS 121 requires an entity to evaluate long-lived
assets, certain identifiable intangibles, and related goodwill for
impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The Company
adopted SFAS 121 during the current fiscal year ending June 30, 1997.
The adoption of SFAS 121 has not had a material effect on the
financial condition or net income of the Company.
In May 1995, the FASB issued Statement of Financial Accounting
Standards No. 122, "Accounting for Mortgage Servicing Rights" ("SFAS
122"). SFAS 122 requires that mortgage banking enterprises recognize
as separate assets, rights to service mortgage loans for others,
however those servicing rights are acquired. The Company adopted SFAS
122 during the current fiscal year ending June 30, 1997. The adoption
of SFAS 122 has not had a material effect on the financial condition
or net income of the Company.
In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123"). SFAS 123 establishes a fair value based method of accounting
for stock-based compensation plans. It encourages entities to adopt
that method in place of the provisions of APB Opinion No. 25,
"Accounting for Stock Issued to Employees", for all arrangements under
which employees receive shares of stock or other equity instruments of
the employer or the employer incurs liabilities to employees in
amounts based on the price of its stock. This statement applies to
financial statements for fiscal 1997. Management is continuing to
account for stock-based compensation in accordance with the provisions
of APB No. 25. Therefore, SFAS 123 has not had a significant impact
on the Company's consolidated financial statements.
In June 1996, the FASB issued Statement of Financial Accounting
Standards No. 125 "Accounting for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities" ("SFAS 125"). SFAS 125
extends the rules in SFAS 122 from servicing of mortgage loans to all
loan servicing. The Company adopted SFAS 125 during the current
fiscal year ending June 30, 1997. The adoption of SFAS 125 has not
had a material effect on the financial condition or net income of the
Company.
ASSET AND LIABILITY MANAGEMENT
During the three months ended September 30, 1996, the Company
experienced a slight decline in its total assets. Total assets
decreased $10.5 million, primarily due to a decrease in interest-
bearing deposits in other financial institutions of $11 million and a
decrease in foreclosed assets of $4.6 million, offset by net loan
originations of $6 million.
<PAGE> 9
The decrease in interest-bearing deposits in other financial
institutions primarily resulted from the reversal of the higher than
normal balances at correspondent banks due to the timing of
transferring funds with June 30, 1996 falling on the weekend. The
increase in net loan originations was primarily from a loan originated
for the sale of a large foreclosed asset.
Total liabilities decreased $9.2 million, primarily from a decrease
in deposits of $15 million and a decrease in FHLBank advances of $2
million, offset by an increase in short-term borrowings of $3 million
and an increase in accrued expenses of $3.1 million, the majority of
which is the one-time SAIF assessment to be paid in November 1996.
The above represents the Company's continued practice of using
primarily short-term FHLBank advances to fund net loan originations
and other funding needs.
Stockholders' equity decreased $1.3 million primarily as a result
of dividend declarations and payments of $745,000 and net treasury
stock repurchases of $1.2 million, offset by net income of $500,000
and unrealized appreciation on available-for-sale securities of
$200,000. The Company repurchased 43,366 shares of common stock at an
average price of $28.04 per share and reissued 2,370 shares of
treasury stock at an average price of $7.29 per share for stock
options exercised.
Management believes that a key component of successful
asset/liability management is the monitoring and management of
interest rate sensitivity, which encompasses the repricing and
maturity of interest-earning assets and interest-bearing liabilities.
During any period in which a financial institution has a positive
interest rate sensitivity gap, the amount of its interest-earning
assets maturing or otherwise repricing within such period exceeds the
amount of the interest-bearing liabilities maturing or otherwise
repricing within the same period. Accordingly, in a rising interest
rate environment, financial institutions with positive interest rate
sensitivity gaps generally will experience greater increases in yield
on their assets than in the cost of their liabilities. Conversely, in
a falling interest rate environment, the cost of funds of financial
institutions with positive interest rate sensitivity gaps generally
will decrease less than the yield on their assets. Changes in
interest rates generally will have the opposite effect on financial
institutions with negative interest rate sensitivity gaps. In a
rising interest rate environment financial institutions with negative
gaps have more liabilities than assets mature or reprice during the
relevant period, causing the increase in the cost of liabilities to
exceed the increase in the yield on assets. Conversely, in a falling
interest rate environment, the cost of funds of financial institutions
with negative interest rate sensitivity gaps generally will decrease
more than the yield on their assets. The Company's experience with
interest rates is discussed in more detail under the headings "Results
of Operations and Comparisons of the Three Months Ended September 30,
1996 and 1995" and in management's discussion and analysis in the June
30, 1996 Form 10-K.
<PAGE> 10
The Company's one-year interest rate sensitivity gap, as a
percentage of total interest-earning assets was a positive $98
million, or 12.5%, at September 30, 1996, as compared to a positive
$89 million, or 13.6%, at June 30, 1996. The increase of $9 million
resulted primarily from: (i) a $5 million increase in business loans,
all in the one-year category; and (ii) a $6 million decrease in
interest-bearing demand deposits, $2 million decrease in savings
deposits, and $6 million decrease in time deposits from a decline in
deposit balances; offset by, (iii) an $8 million increase in FHLBank
advances mainly due to a shift from other periods; (iv) a $3 million
increase in short-term borrowings; and (v) other smaller changes.
As a part of its asset and liability management strategy, the
Company has increased its investment in loans which are interest rate
sensitive by emphasizing the origination of adjustable-rate, one- to
four-family residential loans and adjustable-rate or relatively short-
term commercial business and consumer loans, and originating fixed-
rate, one- to four-family residential loans primarily for immediate
resale in the secondary market. Approximately 30% of total assets are
currently invested in commercial real estate and commercial business
loans. This part of the strategy was designed to improve asset yield
and fee income, and to shorten the average maturity and increase the
interest rate sensitivity of the loan portfolio. While efforts to
date have contributed to the changes in the one-year interest rate
sensitivity gap and increasing net interest income, such lending,
commensurate with the increased risk levels, has also resulted in an
increase in the level of non-performing assets. Management
continually evaluates existing and potential commercial real estate
and commercial business loans, in order to try to reduce undesirable
risks including concentrations in a given geographic area or a
particular loan category.
While from a credit risk standpoint the Company would prefer higher
levels of one- to four-family and other residential loan originations
rather than commercial real estate and commercial business loan
originations, the Company has adapted to the changing lending
environment and originates commercial real estate and commercial
business loans to help maintain the desired size of the loan portfolio
and assets in total, as well as to maintain the desired yield on the
Company's investments.
Interest rate risk exposure estimates (the sensitivity gap) are not
exact measures of an institution's actual interest rate risk. They
are only indicators of interest rate risk exposure produced in a
simplified modeling environment designed to allow management to gauge
the Company's sensitivity to changes in interest rates. They do not
necessarily indicate the impact of general interest rate movements on
the Company's net interest income because the repricing of certain
categories of assets and liabilities is subject to competitive and
other factors beyond the Company's control. As a result, certain
assets and liabilities indicated as maturing or otherwise repricing
within a stated period may in fact mature or reprice at different
times and in different amounts and would therefore cause a change
(which potentially could be material) in the Company's interest rate
risk.
<PAGE> 11
The following table sets forth the Company's interest rate
sensitive assets and liabilities that mature or reprice within one
year as of the dates indicated and on the basis of the factors and
assumptions set forth at the end of the tables.
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
------------ --------
<S> <C> <C>
(000'S OMITTED)
Residential, commercial real estate and
construction loans $464,617 $463,559
Commercial business loans 17,079 12,349
Consumer loans 16,724 16,202
Investment securities and other 75,938 76,343
------- -------
Total interest rate sensitive assets
repricing within one year 574,358 568,453
------- -------
Interest-bearing demand deposits 106,345 112,289
Savings deposits 35,862 37,009
Time deposits 186,042 192,909
FHLBank advances 128,638 120,849
Other borrowings and liabilities 19,421 16,468
------- -------
Total interest rate sensitive liabilities
repricing within one year 476,308 479,524
------- -------
One year interest rate sensitivity gap (1) $98,050 $ 88,929
======= =======
Interest rate sensitive assets/interest rate
sensitive liabilities 120.6% 118.5%
===== =====
One year interest rate sensitivity gap as a
percent of interest-earning assets 12.5% 13.6%
==== ====
<FN>
___________________________________________
(1) Defined as the Company's interest-earning assets which mature or
reprice within one year minus its interest-bearing liabilities that
mature or reprice within one year.
</TABLE>
<PAGE> 12
The following table sets forth the interest rate sensitivity of the
Company's assets and liabilities at September 30, 1996, on the basis
of the factors and assumptions set forth below.
<TABLE>
<CAPTION>
Maturing or Repricing
---------------------------------------------------------------
Over 6
6 Months Months Over 1-3 Over 3-5 Over
or Less to 1 Year Years Years 5 Years Total
-------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Residential, commercial real
estate and construction loans $357,835 $106,781 $ 19,302 $11,383 $34,814 $530,115
Commercial business loans 16,920 159 250 0 0 17,329
Consumer loans 14,215 2,509 7,038 0 0 23,762
Investment securities and other 50,092 9,039 17,538 0 0 76,669
------- ------- ------- ------ ------ -------
Total interest-earning assets 439,062 118,488 44,128 11,383 34,814 647,875
------- ------- ------- ------ ------ -------
Interest-bearing demand deposits 106,345 0 0 0 0 106,345
Savings deposits 35,862 0 0 0 0 35,862
Time deposit 129,623 56,420 34,453 4,304 5,555 230,355
FHLBank advances 113,273 15,365 22,159 10,880 16,725 178,402
Other borrowings and liabilities 19,421 0 0 0 0 19,421
------- ------- ------- ------ ------ -------
Total interest-bearing liabilities 404,524 71,785 56,612 15,184 22,280 570,385
------- ------- ------- ------ ------ -------
Interest-earning assets less
interest-bearing liabilities $ 34,538 $ 46,703 $(12,484) $(3,801) $12,534 $ 77,490
======= ======= ======= ====== ====== =======
Cumulative interest rate sensitivity gap $ 34,538 $ 81,241 $68,757 $64,956 $77,490
======= ======= ====== ====== ======
Cumulative interest rate sensitivity gap
as a percent of interest-earning
assets at September 30, 1996 5.3% 12.5% 10.6% 10.0% 12.0%
=== ==== ==== ==== ====
Cumulative interest rate sensitivity gap
as a percent of interest-earning
assets at June 30, 1996 (0.4)% 13.6% 8.9% 8.3% 10.2%
=== ==== === === ====
<FN>
The assumptions used in the above two tables are:
-- Prepayment rates are derived from market prepayment rates
observed on or about June 30, 1996. They are supplied by the FHLBank
of Des Moines Risk Management Department.
-- Fixed-rate loans, net of loans in process, deferred fees and
discounts are shown on the basis of contractual amortization and the
prepayment assumptions noted above.
-- Adjustable-rate loans are assumed to reprice at the earlier of
maturity or the next contractual repricing date.
-- Zero growth and constant percentage composition of assets and
liabilities and funds from contractual amortization are not
reinvested.
-- September 30, 1996 computations have been approximated based on
the computations and assumptions of June 30, 1996.
</TABLE>
<PAGE> 13
RESULTS OF OPERATIONS AND COMPARISON OF THE THREE MONTHS ENDED
SEPTEMBER 30, 1996 and 1995
The decrease in earnings for the three months ended September 30,
1996 when compared to the same period in 1995 of $2.4 million, or
82.9%, was primarily due to an increase in non-interest expense of
$3.8 million and an increase in provision for loan losses of $85,000,
offset by an increase in net interest income of $404,000, and a
decrease in provision for income taxes of $1.1 million during the
period.
Interest Income
Total interest income increased $486,000, or 3.7%, during the three
months ended September 30, 1996, when compared to the three months
ended September 30, 1995. The increase was primarily due to a
$384,000, or 3.1%, increase in interest income on loans and a
$102,000, or 10.4%, increase in interest income on investment
securities and interest-bearing deposits.
Interest income on loans increased from higher average balances,
offset by a decrease from lower average yields. Interest income
increased $614,000 as the result of higher average loan balances of
$546 million during the three months ended September 30, 1996 compared
to $519 million during the three months ended September 30, 1995.
Interest income decreased $230,000 as the result of a decrease in
average yield from 9.43% in the three months ended September 30, 1995,
to 9.24% in the three months ended September 30, 1996, as a result of
lower market rates.
Of the increase in interest income on investment securities and
interest-bearing deposits, $49,000 was the result of higher average
balances from $75 million in the three months ended September 30,1995
to $78.6 million in the three months ended September 30, 1996,
primarily as a result of increases in investment securities. The
remaining increase of $53,000 was the result of an increase in average
yields from 5.22% during the three months ended September 30, 1995 to
5.49% during the three months ended September 30, 1996 as a result of
higher market rates on investment securities.
Interest Expense
Total interest expense increased $83,000, or 1.2%, during the three
months ended September 30, 1996 when compared with the same period in
1995. The increase was primarily due to a $159,000, or 6%, increase
in interest expense on FHLBank advances and other borrowings, offset
by a $76,000, or 1.8%, decrease in interest expense on deposits.
<PAGE> 14
Interest expense on FHLBank advances and other borrowings increased
$254,000 due to higher average balances from $173 million in the three
months ended September 30, 1995 to $190 million in the three months
ended September 30, 1996. The increase was offset by a $95,000
decrease due to lower average interest rates from 6.14% in the three
months ended September 30, 1995 to 5.90% in the three months ended
September 30, 1996. Average balances increased as a result of the
Company's use of short term FHLBank advances to partially fund loan
growth and manage overall funds costs. The changes in average rates
were a result of changes in market rates.
Interest expense on deposits during the three months ended
September 30, 1996, decreased primarily as a result of a decrease in
market rates offset by an increase in volume. Interest expense
decreased $160,000 primarily as a result of lower average rates on
time deposits from 5.84% during the three months ended September 30,
1995, to 5.57% during the three months ended September 30, 1996.
Lower average market rates was the primary factor causing the decrease
in average rates.
Interest expense on deposits increased $84,000 as a result of
increases in volume. The increase in volume was primarily in time
deposits and interest-bearing demand deposits, respectively, from
average balances of $233 million and $104 million during the three
months ended September 30, 1995 to average balances of $236 million
and $110 million during the three months ended September 30, 1996.
Net Interest Income
The Company's overall interest rate spread increased 4 basis
points, or 1%, from 3.84% during the three months ended September 30,
1995, to 3.88% during the three months ended September 30, 1996. The
increase is due to an overall decrease in the weighted average rates
paid on interest-bearing liabilities offset by a lesser overall
decrease in the weighted average yield received on interest-earning
assets.
Provision for Loan Losses
The provision for loan losses increased from $324,000 during the
three months ended September 30, 1995 to $411,000 during the three
months ended September 30, 1996. In any accounting period, the
provision for loan losses is affected by many factors including, but
not limited to, the change in the composition of the loan portfolio,
the increase or decrease in total loans, the level of delinquencies
and other non-performing loans and the historical loss experience of
the portfolio.
<PAGE> 15
Non-performing assets decreased $3.7 million, or 22%, during the
three months ended September 30, 1996 from $16.9 million at June 30,
1996 to $13.1 million at September 30, 1996. Non-performing loans
increased $900,000, or 15.3%, from $5.9 million at June 30, 1996 to
$6.8 million at September 30, 1996, and foreclosed assets declined
$4.5 million from $10.9 million at June 30, 1996 to $6.4 million at
September 30, 1996. Non-performing loans at September 30, 1996 and
June 30, 1996, included $451,000 and $452,000, respectively, of loans
in connection with the sale of foreclosed assets, which are loans that
have higher than usual loan-to-value ratios and are originated in
connection with the sale of foreclosed assets. Substantially all of
these loans were performing at September 30, 1996.
The $900,000 increase in non-performing loans was primarily the
result of (i) the addition of a net loan for $4.3 million as a result
of 100% financing of the sale of the foreclosed asset described in the
Company's Annual Report on Form 10-K for the year ended June 30, 1996
on page 31 under the heading "Branson, Missouri"; partially offset by
(ii) the payoff of the $934,000 loan described in the Company's Annual
Report on Form 10-K for the year ended June 30, 1996 on page 31 under
the heading "Lake Ozark, Missouri"; (iii) the receipt of all scheduled
payments currently due on the loans totaling $984,000 described in the
Company's Annual Report on Form 10-K for the year ended June 30, 1996
on page 30 under the heading "Branson, Missouri - Restaurant"; (iv)
the receipt of all scheduled payments currently due on the $600,000
Tax Increment Financing (TIF) loan of the project described in the
Company's Annual Report on Form 10-K for the year ended June 30, 1996
on page 31 under the heading "Lake Ozark, Missouri" ; and (v) the
foreclosure of a $250,000 restaurant loan, five single family homes
totaling $440,000 and charge-offs on these foreclosures of
approximately $100,000.
The net loan of $4.3 million on the sale of the foreclosed assets
has a deferred gain of $427,000 currently netted against it. If the
buyer is able to liquidate the project as planned, this gain will be
recognized at a future time when the loan has paid down to an adequate
level.
The $4.5 million decline in foreclosed assets during the three
months ended September 30, 1996 was primarily due to: (i) the sale of
the $4.3 million property noted in the non-performing loan section
above; (ii) the sale of the $550,000 property described in the
Company's Annual Report on Form 10-K for the year ended June 30, 1996
on page 33 under the heading "Springfield, Missouri - Ellis Trucking
Terminal" with 28% cash down and normal long-term financing for the
balance; (iii) the sale of condominium units carried at an aggregate
of $312,000 and 1 single-family home carried at $54,000; offset by
(iv) the foreclosure of the properties noted in item (v) in the non-
performing loan section above; and (vi) various other activity of
smaller properties in the account.
<PAGE> 16
Potential problem loans increased $1.8 million during the three
months ended September 30, 1996 from $4.7 million at June 30, 1996 to
$6.5 million at September 30, 1996. These are loans which management
has identified through routine internal review procedures as having
possible credit problems which may cause the borrowers difficulty in
complying with current loan repayment terms. These loans are not
reflected in the non-performing loans. The main reason for the
increase in potential problem loans is: (i) an increase of $984,000
from the improved credit quality and upgrade from non-performing
status of the project disclosed in the non-performing loan section
above; (ii) the increase of $300,000 in a condominium project in
Branson, Missouri due to additional advances from increased collateral
positions; and (iii) the deterioration of the credit quality of
various projects, partially offset by the improvement from non-
performing of other projects, netting approximately $500,000.
The allowance for loan losses at September 30, 1996 and June 30,
1996, respectively, totaled $14.7 million and $14.4 million,
representing 2.7% and 2.6% of total loans, 216% and 243% of non-
performing loans, and 110% and 136% of non-performing loans and
potential problem loans in total. The allowance for foreclosed asset
losses totaled $1.1 million at both September 30, 1996 and June 30,
1996, respectively, representing 17% and 9.9% of total foreclosed
assets. Although the Company maintains the allowance for loan losses
and the allowance for foreclosed asset losses at levels which it
considers to be adequate to provide for potential losses and selling
expenses, there can be no assurance that such losses will not exceed
the estimated amounts, thereby adversely affecting future results of
operations.
Non-interest Income
Non-interest income decreased $21,000, or .8%, in the three months
ended September 30, 1996 when compared to the same period in 1995.
The decrease was primarily due to: (i) a decrease in income of
$464,000 from the sale of available-for-sale securities; offset by
(ii) an increase in income on foreclosed assets of $351,000 from the
sale in the September 30, 1996 quarter of the foreclosed properties
discussed above; (iii) an increase in commission income of $102,000
from the travel, insurance and investment subsidiaries; and (iv)
modest increases and decreases in other non-interest income items.
Non-interest Expense
Non-interest expense increased $3.8 million, or 97.3%, in the three
months ended September 30, 1996 when compared to the same period in
1995. The increase was primarily due to: (i) an increase in insurance
of $2.5 million due to the accrual of the one-time SAIF assessment
discussed previously; (ii) an increase in goodwill amortization of $1
million due to the write-off of goodwill remaining from a 1982 failed
thrift purchase; (iii) an increase of $316,000 in salaries and other
employee benefits with approximately one-half of this increase in the
Bank due to growth and the remainder primarily in the travel,
insurance and investment subsidiaries; (iv) an increase in advertising
of $31,000, or 38%, and (v) an increase in office supplies and
printing of $29,000, or 30%.
<PAGE> 17
Provision for Income Taxes
Provision for income taxes as a percentage of pre-tax income
increased from 40% in the three months ended September 30, 1995 to 61%
in the three months ended September 30, 1996. The increase was
primarily due to the write-off of the goodwill amortization discussed
above, which is a non-deductible item.
Average Balances, Interest Rates and Yields
The following tables present for the periods indicated the total
dollar amount of interest income from average interest-earning assets
and the resultant yields, as well as the interest expense on average
interest-bearing liabilities, expressed both in dollars and rates, and
the net interest margin. The tables do not include non-interest-
bearing demand deposits and do not reflect any effect of income taxes.
<TABLE>
<CAPTION>
Three Months Ended September 30,
---------------------------------------------------------
1996 1995
--------------------------- --------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
-------- -------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Interest-earning assets:
Loans receivable $546,358 $12,625 9.24% $519,450 $12,241 9.43%
Investment securities and other
interest-earning assets 78,642 1,080 5.49 74,968 978 5.22
------- ------ ---- ------- ------- ----
Total interest-earning assets $625,000 13,705 8.77 $594,418 13,219 8.90
======= ------ ---- ======= ------ ----
Interest-bearing liabilities:
Demand deposits $110,263 688 2.50 $104,120 643 2.47
Savings deposits 36,620 225 2.46 37,578 235 2.50
Time deposits 236,292 3,290 5.57 232,787 3,401 5.84
------- ----- ---- ------- ----- ----
Total deposits 383,175 4,203 4.39 374,485 4,279 4.57
FHLBank advances and other borrowings 190,345 2,808 5.90 172,699 2,649 6.14
------- ----- ---- ------- ----- ----
Total interest-bearing liabilities $573,520 7,011 4.89 $547,184 6,928 5.06
======= ----- ---- ======= ----- ----
Net interest income:
Interest rate spread $6,694 3.88% $6,291 3.84%
===== ==== ===== ====
Net interest margin(1) 4.28% 4.23%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 109.0% 108.6%
===== =====
<FN>
(1) Defined as the Company's net interest income divided by total
interest-earning assets.
</TABLE>
<PAGE> 18
Rate/Volume Analysis
The following schedule presents the dollar amount of changes in
interest income and interest expense for major components of interest-
earning assets and interest-bearing liabilities for the periods shown.
For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (i)
changes in rate (i.e., changes in rate multiplied by old volume) and
(ii) changes in volume (i.e., changes in volume multiplied by old
rate). For purposes of this table, changes attributable to both rate
and volume which cannot be segregated have been allocated
proportionately to volume and to rate.
<TABLE>
<CAPTION>
Three Months Ended September 30,
1996 vs. 1995
--------------------------------
Increase
(Decrease)
Due to Total
------------- Increase
Rate Volume (Decrease)
---- ------ ----------
<S> <C> <C> <C>
(Dollars in thousands)
Interest-earning assets:
Loans receivable $(230) $ 614 $ 384
Investment securities and
other interest-earning assets 53 49 102
--- --- ---
Total interest-earning assets (177) 663 486
--- --- ---
Interest-bearing liabilities:
Demand deposits 7 38 45
Savings deposits (4) (6) (10)
Time deposits (163) 52 (111)
--- --- ---
Total deposits (160) 84 (76)
FHLBank advances and other borrowings (95) 254 159
--- --- ---
Total interest-bearing liabilities (255) 338 83
--- --- ---
Net interest income $ 78 $325 $ 403
=== === ===
</TABLE>
<PAGE> 19
LIQUIDITY AND CAPITAL RESOURCES
General
The Company's capital position remained strong, with stockholders'
equity at $66.6 million, or 10.1% of total assets of $658 million at
September 30, 1996 compared to equity at $67.8 million, or 10.1%, of
total assets of $668 million at June 30, 1996. In addition, the Bank
exceeds each of the regulatory capital requirements. At September 30,
1996, the Bank had ratios of tangible and core capital to assets of
8.1% and risk-based capital of 12.3%. Federal regulations at that
date required tangible, core and risk-based capital ratios of 1.5%, 3%
and 8%, respectively.
The Bank is required by regulation to maintain liquidity ratios at
certain levels. Currently, a minimum of 5% of the combined total of
deposits and short-term borrowings must be maintained in the form of
cash and eligible investments. The Bank has historically maintained
its liquidity ratio at a level in excess of that required. As of
September 30, 1996, the Bank's liquidity ratio was 5.9%, compared to
7.3% at June 30, 1996. Management believes that the Company has
sufficient cash flows and borrowing capacity available to meet its
commitments and other foreseeable cash needs for operations. At
September 30, 1996, the Company had commitments of approximately $70
million to fund loan originations, issued lines of credit, outstanding
letters of credit and unadvanced loans.
At September 30, 1996, the investment securities held to maturity
included $115,000 of gross unrealized gains and $39,000 of gross
unrealized losses related to securities intended to be held until
maturity. The unrealized gains and losses are not expected to have a
material effect on future earnings beyond the usual amortization of
acquisition premium or accretion of discount because no sale of the
investment portfolio is foreseen.
The Company's primary sources of funds are savings deposits,
FHLBank advances, other borrowings, loan repayments, proceeds from
sales of loans and available-for-sale securities and funds provided
from operations. The Company utilizes particular sources of funds
based on the comparative costs and availability at the time. The
Company has from time to time chosen not to pay rates on deposits as
high as the rates paid by certain of its competitors and, when
necessary, supplement deposits with less expensive alternative sources
of funds.
<PAGE> 20
STATEMENT OF CASH FLOWS
During the three months ended September 30, 1996 and 1995, the
Company had positive cash flows from operating activities, and during
the three months ended September 30, 1995, the Company had positive
cash flows from financing activities. The Company experienced
negative cash flows from investing activities during the three months
ended September 30, 1996 and 1995, and had negative cash flows from
financing activities during the three months ended September 30, 1996.
Cash flows from operating activities for the periods covered by the
Statements of Cash Flows have been primarily related to adjustments in
deferred assets, credits and other liabilities, the provision for loan
losses and losses on foreclosed assets, depreciation, sale of
foreclosed assets and the amortization of deferred loan origination
fees and discounts (premiums) on loans and investments, all of which
are non-cash or non-operating adjustments to operating cash flows. As
a result, net income, adjusted for non-cash and non-operating items,
was the primary source of cash flows from operating activities.
Operating activities provided cash flows of $5 million and $4.3
million in cash during the three months ended September 30, 1996 and
1995, respectively.
During the three months ended September 30, 1996 and 1995,
investing activities used cash of $1.1 million and $6.5 million,
respectively, primarily due to the net increase of loans in both
periods.
Changes in cash flows from financing activities of the periods
covered by the Statements of Cash Flows are due to changes in deposits
after interest credited, changes in FHLBank advances and changes in
short-term borrowings as well as purchases of treasury stock and
dividend payments to stockholders. Financing activities used $15
million in cash during the three months ended September 30, 1996 and
provided $17 million in cash during the three months ended September
30, 1995. Financing activities in the future are expected to
primarily include changes in deposits, changes in FHLBank advances,
and changes in short-term borrowings.
DIVIDENDS
During the three months ended September 30, 1996 and September 30,
1995, the Company declared and paid dividends in each period of $0.175
per share. The Board of Directors meets regularly to consider the
level and the timing of dividend payments.
<PAGE> 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Registrant and its subsidiaries are involved as plaintiff or
defendant in various legal actions arising in the normal course of
their business. While the ultimate outcome of the various legal
proceedings involving the Registrant and its subsidiaries cannot be
predicted with certainty, it is the opinion of management, after
consultation with legal counsel, that these legal actions currently
are not material to the Registrant.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to Vote of Common Stockholders
At the Company's annual meeting of stockholders held on October 16,
1996, the results of the matters voted upon were as follows:
(a) Each of the following nominees for election as director was
elected.
Affirmative Votes
Director Votes Withheld
------------------ ----------- ---------
William E. Barclay 3,898,186 3,776
Larry D. Frazier 3,899,525 2,437
(b) An affirmative vote in excess of the majority of the shares
available to vote was obtained to approve the amendment to the
Certificate of Incorporation to increase authorized common stock.
Affirmative Negative Abstentions
----------- -------- -----------
3,893,135 713 8,114
(c) An affirmative vote in excess of the majority of the shares
available to vote was obtained to approve the appointment of Baird,
Kurtz & Dobson as auditors for the current fiscal year.
Affirmative Negative Abstentions
----------- -------- -----------
3,868,661 20,153 13,148
Item 5. Other Information
None.
<PAGE> 22
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
See the attached exhibit 11, Statement re computation of earnings
per share.
See the attached exhibit 27, Financial Data Schedule.
b) Reports on Form 8-K
On August 23, 1996, the Registrant filed a Form 8-K announcing a
2-for-1 stock split contingent on stockholder approval of an increase
in authorized common shares.
On October 8, 1996, the Registrant filed a Form 8-K disclosing
two items which materially impacted the September 30, 1996 quarterly
earnings. The status of a stock buy-back program and the announcement
of a new stock buy-back program were also disclosed.
<PAGE> 23
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.
Great Southern Bancorp, Inc.
Registrant
Date: November 14, 1996 /s/ William V. Turner
--------------------------
William V. Turner
Chairman of the Board,
President and Chief
Executive Officer
Date: November 14, 1996 /s/ Don M. Gibson
--------------------------
Don M. Gibson,
Executive Vice President and
Chief Financial Officer
<PAGE> 24
Exhibit Index
-------------
Exhibit
No. Description
- ------- -----------
11 Statement Re Computation of Earnings Per Share
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit 11- Statement Re Computation of Earnings Per Share
Three Months Ended
September 30,
1996 1995
---------- ----------
<S> <C> <C>
Primary:
Average shares outstanding 4,385,267 4,497,324
Net effect of dilutive stock options -
based on the treasury stock method
using average market price 139,290 156,122
--------- ---------
Primary shares 4,524,557 4,653,446
========= =========
Net income $493,297 $2,884,588
======= =========
Per share amount $0.11 $0.62
==== ====
Fully diluted:
Average shares outstanding 4,385,267 4,497,324
Net effect of dilutive stock options -
based on the treasury stock method
using average market price 144,744 157,850
--------- ---------
Primary shares 4,530,011 4,655,174
========= =========
Net income $493,297 $2,884,588
======= =========
Per share amount $0.11 $0.62
==== ====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from
the Consolidated Balance Sheet and the Consolidated Statement of
Income filed as part of the quarterly report on Form 10-Q and is
qualified in its entirety by reference to such quarterly report on
Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 5,942
<INT-BEARING-DEPOSITS> 12,492
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,937
<INVESTMENTS-CARRYING> 49,217
<INVESTMENTS-MARKET> 49,293
<LOANS> 552,765
<ALLOWANCE> 14,674
<TOTAL-ASSETS> 657,659
<DEPOSITS> 382,459
<SHORT-TERM> 157,288
<LIABILITIES-OTHER> 10,628
<LONG-TERM> 40,731
0
0
<COMMON> 62
<OTHER-SE> 66,491
<TOTAL-LIABILITIES-AND-EQUITY> 657,659
<INTEREST-LOAN> 12,625
<INTEREST-INVEST> 1,009
<INTEREST-OTHER> 71
<INTEREST-TOTAL> 13,705
<INTEREST-DEPOSIT> 4,203
<INTEREST-EXPENSE> 7,011
<INTEREST-INCOME-NET> 6,694
<LOAN-LOSSES> 411
<SECURITIES-GAINS> 144
<EXPENSE-OTHER> 7,725
<INCOME-PRETAX> 1,279
<INCOME-PRE-EXTRAORDINARY> 1,279
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 493
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
<YIELD-ACTUAL> 4.35
<LOANS-NON> 6,751
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 6,531
<ALLOWANCE-OPEN> 14,356
<CHARGE-OFFS> 123
<RECOVERIES> 30
<ALLOWANCE-CLOSE> 14,674
<ALLOWANCE-DOMESTIC> 14,674
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
