SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) October 28, 1998
FINANCIAL BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-18126 06-1391814
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
42-25 Queens Boulevard
Long Island City, New York 11104
(Address of principal executive offices) (Zip Code)
(718) 729-5002
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On October 28, 1998, Financial Bancorp, Inc. issued a press release
setting forth limited financial information for the year ended September
30, 1998. This press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 7. Financial Statement and Exhibits.
(c) Exhibits
99.1 Press Release issued by Financial Bancorp,
Inc. on October 28, 1998.
SIGNATURE
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 hereunder duly authorized.
Dated: October 28, 1998
FINANCIAL BANCORP, INC.
By: /s/ Frank S. Latawiec
________________________________
Name: Frank S. Latawiec
Title: President and CEO
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press Release issued by Financial Bancorp, Inc.
on October 28, 1998.
FINANCIAL BANCORP, INC.
THE HOLDING COMPANY OF FINANCIAL FEDERAL SAVINGS BANK
42-25 QUEENS BOULEVARD, LONG ISLAND CITY, NY 11104 (718)729-5002
PRESS RELEASE
RELEASE DATE: October 28, 1998 CONTACT: P. James O'Gorman
FINANCIAL BANCORP, INC. REPORTS RECORD YEAR END
AND FOURTH QUARTER RESULTS
LONG ISLAND CITY, N.Y. October 28 1998 - - Financial Bancorp, Inc.
(Nasdaq: FIBC), the holding company for Financial Federal Savings
Bank, today reported record net income of $3,000,944 for the fiscal
year ended September 30, 1998, as compared to net income of
$2,504,823 for the fiscal year ended September 30, 1997. On a per
share basis, the Company reported diluted earnings per share of
$1.77 for the fiscal year ended September 30, 1998, an 18% increase
from diluted earnings per share of $1.50 for the same period last
year. Net income for the quarter ended September 30, 1998, totaled
$784,548, or $0.46 per diluted share, as compared to net income of
$670,480, or $0.40 per diluted share for the three months ended
September 30, 1997. Commenting on the Company's fiscal year
results, President and Chief Executive Officer, Frank S. Latawiec
stated, "We are very pleased with this year's overall performance
and proud of our company-wide efforts to bolster earnings and
enhance value for our stockholders."
As of September 30, 1998, the Company's total assets were
$318.6 million and total stockholders' equity was $29.2 million. At
September 30, 1998, the Company's stated book value and tangible
book value per share of common stock were $17.08 and $17.01,
respectively, as compared to $15.71 and $15.63 per share,
respectively, as of September 30, 1997. The Company had, exclusive
of shares repurchased, 1,708,632 shares outstanding at September
30, 1998.
Status of Pending Merger with Dime Community Bancshares, Inc.
The Company announced on July 20, 1998 that it has entered
into a definitive agreement to merge with Dime Community
Bancshares, Inc. (Nasdaq:DCOM), the holding company for The Dime
Savings Bank of Williamsburgh. This transaction is expected to
close in early 1999 and is subject to approval of Financial
Bancorp, Inc.'s stockholders and certain regulatory authorities. As
previously announced, the Financial Bancorp, Inc. stockholders'
special meeting to vote on the merger agreement is scheduled for
December 18, 1998, and stockholders of record as of the close of
business on October 30, 1998 will be eligible to vote at the
meeting.
Quarterly Cash Dividend
The Board of Directors declared a regular quarterly cash
dividend of $0.125 per common share for the quarter ended September
30, 1998, to stockholders of record on November 6, 1998, payable on
November 20, 1998.
Fiscal Year End 1998 Results
Financial Bancorp, Inc. reported net income of $3.0 million,
or $1.77 diluted earnings per share for the fiscal year ended
September 30, 1998, which represents a return on average equity and
a return on average assets of 10.69% and 0.97%, respectively. For
the fiscal year ended September 30, 1998, net interest income
totaled $10.2 million, as compared to $10.0 million for the fiscal
year ended September 30, 1997. For the year ended September 30,
1998, average interest-earning assets were $295.1 million, as
compared to $259.8 million for the fiscal year ended September 30,
1997, which represents a 13.6%, or a $35.3 million increase.
For the fiscal year ended September 30, 1998, the net
interest margin was 3.45%, which represents a 42 basis point
decline from 3.87% for the prior fiscal year end. The net interest
spread declined by 48 basis points to 2.95% for the year ended
September 30, 1998, from 3.43% for the prior fiscal year period.
The decrease in the net interest margin and spread reflects the
impact of an increase in the amount of borrowings and the resulting
asset growth in fiscal 1998. The average yield on interest-earning
assets was 7.44% and the average cost of interest-bearing
liabilities was 4.49%, for the year ended September 30, 1998.
Non-interest income increased by $273,900 to $957,400 for
the year ended September 30, 1998, from $683,500 for the
corresponding period in 1997. The increase is primarily
attributable to a $239,200 increase in fees and service charges to
$815,000 for the year ended September 30, 1998, from $575,800 for
the same period in 1997, due to increased fees collected on demand
deposit accounts and ATM service fees. In addition, non-interest
income was positively impacted by the net gain on the sale of
investment securities which totaled $131,200 for the fiscal year
ended September 30, 1998, as compared to $29,400 for the same
period last year.
Non-interest expense decreased by 4.3% to $5.6 million for the year
ended September 30, 1998, compared to $5.9 million for the year
ended September 30, 1997. The decrease in non-interest expense is
primarily attributable to a decrease in salaries and employee
benefits and lower Federal deposit insurance premium. Salaries and
employee benefits decreased by $242.0 thousand to $3.0 million for
the year ended September 30, 1998, as compared to $3.2 million for
the year ended September 30, 1997. This decrease is primarily
attributable to the payment of a one-time severance payment to a
former senior executive officer during fiscal 1997. The ratio of
operating expense to average assets was 1.81% for the fiscal year
ended September 30, 1998, as compared to 2.05% excluding this
one-time severance payment, for the year ended September 30, 1997.
Furthermore, the Company's efficiency ratio was 50.6% for the year
ended September 30, 1998, as compared to 52.3% excluding this
one-time severance payment for the corresponding period in 1997.
Quarterly Results
For the quarter ended September 30, 1998, net income totaled
$784,548, or diluted earnings per share of $0.46, which represents
an annualized return on average equity and a return on average
assets of 10.82% and 0.97%, respectively. For the quarter ended
September 30, 1998, net income increased by $114,068, or 17.0%, as
compared to the corresponding period last year. The increase in net
income for the quarter ended September 30, 1998 was primarily due
to a $94,001 increase in net interest income after provisions for
loan losses, a $59,075 increase in fees and service charges, and a
$35,483 decrease in total non-interest expenses, as compared to the
same quarter last year. These increases were partially offset by an
increase in losses on real estate operations of $113,744 during the
quarter ended September 30, 1998, as a result of the Company
increasing its valuation allowance for its real estate joint
venture pending its sale.
Non-interest expenses decreased by $35,483 to $1,340,372 for
the quarter ended September 30, 1998, as compared to $1,375,855 for
the quarter ended September 30, 1997. The Company has successfully
monitored and reduced its operating expenses throughout fiscal
1998.
Financial Condition
As of September 30, 1998, total assets were $318.6 million,
representing a $21.6 million, or a 7.3% increase from $297.0
million at September 30, 1997. Loans receivable increased by $42.7
million, or 27.9%, to $196.0 million at September 30, 1998 from
$153.3 million at September 30, 1997. Asset growth was funded by
deposits increasing by $14.7 million, to $228.1 million at
September 30, 1998, from $213.4 million at September 30, 1997.
Furthermore, Securities sold under agreements to repurchase
increased by $17.0 million, to $42.0 million at September 30, 1998,
from $25.0 million at September 30, 1997, offset by a $2.0 million
decrease in Advances from the Federal Home Loan Bank to $6.0
million at September 30, 1998, as compared to $8.0 million at
September 30, 1997. In addition, the Company's treasury tax and
loan account and other short-term borrowings decreased by $12.2
million, to $7.8 million at September 30, 1998, from $20.0 million
at September 30, 1997.
Total stockholders' equity was $29.2 million at September
30, 1998, reflecting a $2.3 million increase from the prior year.
The increase in stockholders' equity was primarily attributable to
earnings, partially offset by the payment of the regular quarterly
cash dividend.
The Bank's tangible and core capital ratios were 7.25% as of
September 30, 1998, well in excess of the regulatory requirements
of 1.5% and 4.0% respectively. The Bank's risk-based capital ratio
as of September 30, 1998 was 17.5%, also well in excess of the
required 8.0%.
Headquartered in Long Island City, New York, Financial
Bancorp, Inc. is the parent holding company of Financial Federal
Savings Bank, an FDIC-insured savings institution, which operates
five full service branch facilities, four in Queens and one in
Brooklyn.
FINANCIAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
(Unaudited)
Assets
<S> <C> <C>
Cash and amounts due from depository institutions $2,001,493 $2,738,392
Federal funds sold and securities purchased under
agreements to resell 5,375,000 10,650,000
---------- ----------
Total cash and cash equivalents 7,376,493 13,388,392
Investment securities available for sale 6,287,750 730,750
Investment securities held to maturity, net; estimated
fair value of $46,595,000 and $69,223,000 at
September 30, 1998 and 1997, respectively 46,200,449 69,410,103
Mortgage-backed securities available for sale 20,679,363 9,357,048
Mortgage-backed securities held to maturity, net;
estimated fair value of $28,582,000 and $39,129,000
at September 30, 1998 and 1997, respectively 28,242,002 38,521,050
Loans receivable, net 196,027,388 153,291,828
Real estate owned, net 739,403 471,417
Investments in real estate, net 3,496,029 3,543,453
Premises and equipment, net 2,446,120 2,431,570
Federal Home Loan Bank of New York stock, at cost 2,110,400 1,845,000
Accrued interest receivable, net 2,043,279 2,248,578
Other assets 2,962,720 1,716,727
------------ ------------
Total assets $318,611,396 $296,955,916
============ ============
Liabilities and Stockholders' Equity
Deposits $228,095,902 $213,394,282
Advance payments by borrowers for taxes and insurance 1,518,016 1,267,896
Advances from Federal Home Loan Bank of New York 6,000,000 8,000,000
Securities sold under agreements to repurchase 42,000,000 25,000,000
Treasury tax and loan account and other short term borrowings 7,770,251 20,000,000
Other liabilities 4,051,937 2,437,504
------------ ------------
Total liabilities 289,436,106 270,099,682
------------ ------------
Stockholders' equity
Preferred stock, $0.01 par value, 2,500,000 shares
authorized; none issued Common stock, $0.01 par value,
6,000,000 shares authorized; 2,185,000 shares issued,
1,708,632 and 1,709,700 outstanding at September 30,
1998 and 1997, respectively 21,850 21,850
Additional paid-in capital 20,505,364 20,239,758
Retained earnings - substantially restricted 16,347,697 14,111,882
Common stock acquried by Employee Stock Ownership Plan (ESOP) (849,710) (1,011,566)
Common stock acquired by Recognition & Retention Plan (RRP) (280,888) (317,955)
Unrealized gain on securities available for sale, net of income taxe (212,762) 91,604
Treasury stock, at cost; 476,368 shares and 475,300 shares
at September 30, 1998 and 1997, respectively (6,356,261) (6,279,339)
------------ ------------
Total stockholders' equity 29,175,290 26,856,234
------------ ------------
Total liabilities and stockholders' equity $318,611,396 $296,955,916
============ ============
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL BANCORP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------ --------------------------
September 30, September 30,
------------------------ --------------------------
1998 1997 1998 1997
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Interest income:
Loans $3,833,934 $3,217,202 $13,880,178 $12,170,938
Mortgage-backed securities 818,783 885,234 3,774,638 3,749,723
Investments and other interest-earning assets 877,748 1,156,953 3,414,495 4,074,392
Federal funds sold and securities purchased
under agreements to resell 153,613 21,427 895,486 76,822
---------- ---------- ----------- -----------
Total interest income 5,684,078 5,280,816 21,964,797 20,071,875
---------- ---------- ----------- -----------
Interest expense:
Deposits 2,225,897 2,123,102 8,933,074 8,102,809
Borrowings 830,000 591,031 2,856,929 1,926,224
---------- ---------- ----------- -----------
Total interest expense 3,055,897 2,714,133 11,790,003 10,029,033
Net interest income 2,628,181 2,566,683 10,174,794 10,042,842
Provision for loan losses 87,497 120,000 400,679 426,600
---------- ---------- ----------- -----------
Net interest income after provision for loan losses 2,540,684 2,446,683 9,774,115 9,616,242
---------- ---------- ----------- -----------
Non-interest income (loss):
Fees and service charges 222,149 163,074 815,015 575,821
Gain on sale of securities available for sale 0 0 131,212 29,387
Gain on sale of loans 6,757 - 9,517 -
(Loss) Gain from real estate operations (99,513) 14,231 (58,237) 27,650
Miscellaneous 5,424 19,319 59,914 50,607
---------- ---------- ----------- -----------
Total non-interest income 134,817 196,624 957,421 683,465
---------- ---------- ----------- -----------
Non-interest expenses:
Salaries and employee benefits 770,437 726,700 2,964,817 3,206,774
Net occupancy expense of premises 131,275 129,409 503,695 526,583
Equipment 168,975 157,837 691,121 628,182
Advertising 7,604 38,431 84,336 62,435
Loss from real estate owned 659 7,589 22,518 15,823
Federal insurance premium 32,368 29,925 125,382 172,577
Miscellaneous 229,054 285,964 1,222,578 1,253,033
---------- ---------- ----------- -----------
Total non-interest expenses 1,340,372 1,375,855 5,614,447 5,865,407
---------- ---------- ----------- -----------
Income before income taxes 1,335,129 1,267,452 5,117,089 4,434,300
Income taxes 550,581 596,972 2,116,145 1,929,477
---------- ---------- ----------- -----------
Net income $ 784,548 $ 670,480 $ 3,000,944 $ 2,504,823
========== ========= =========== ===========
Basic earnings per share $0.48 $0.42 $1.86 $1.54
========== ========== =========== ===========
Diluted earnings per share $0.46 $0.40 $1.77 $1.50
========== ========== =========== ===========
See accompanying notes to consolidated financial statements.
Weighted average number of common shares
common stock equivalents
basic 1,620,337 1,611,747 1,614,612 1,630,259
========== ========== =========== ===========
Diluted shares o/s 1,719,296 1,668,359 1,695,659 1,670,293
See accompanying notes to consolidated financial statements
</TABLE>
FINANCIAL BANCORP, INC.
FINANCIAL HIGHLIGHTS
(Unaudited)
<TABLE>
<CAPTION>
At or for the At or for the
Three Months Ended Twelve Months Ended
------------------ -------------------
September 30, September 30,
------------------ -------------------
1998 1997 1998 1997
---- ---- ---- ----
Selected Financial & Market Data
<S> <C> <C> <C> <C>
Return on Average Stockholders' Equity 10.82% 10.07% 10.69% 9.57%
Return on Average Assets 0.97% 0.94% 0.97% 0.92%
Net Interest Spread 2.93% 3.38% 2.95% 3.43%
Net Interest Margin 3.40% 3.80% 3.45% 3.87%
Efficiency Ratio 46.91% 49.77% 50.61% 52.31%
Operating Expenses to Average Assets 1.66% 1.91% 1.81% 2.05%
Cash Dividends Paid Per Common Share $0.125 $0.100 $0.475 $0.375
Book Value Per Common Share $17.08 $15.71
Tangible Book Value Per Common Share $17.01 $15.63
Market Price Per Common Share $33.13 $22.50
Current Price To Tangible Book Value 194.74% 143.95%
Selected Data:
Basic Earnings Per Share $0.48 $0.42 $1.86 $1.54
Diluted Earnings Per Share $0.46 $0.40 $1.77 $1.50
Shares used for Book Value Computation 1,708,632 1,709,700
Shares used for Basic EPS Computation 1,620,337 1,611,747 1,614,612 1,630,259
Shares used for Diluted EPS Computation 1,719,296 1,668,359 1,695,659 1,670,293
Total Shares Issued and Outstanding 1,708,632 1,709,700
</TABLE>
