<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
-------------
COMMISSION FILE NUMBER 0-18620
------------------------------
JSB FINANCIAL, INC.
-------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED ON ITS CHARTER)
DELAWARE 11-3000874
------------------------------ ------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
303 MERRICK ROAD, LYNBROOK, NEW YORK 11563
------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(516) 887-7000
----------------------------------------------------
(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. [X] YES [ ] NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OF COMMON STOCK OUTSTANDING AT AUGUST 6, 1997
- --------------------- -----------------------------
$.01 PAR VALUE 9,873,938
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Page
Number
ITEM 1. Financial Statements - Unaudited
Consolidated Statements of Financial Condition
at June 30, 1997 and December 31, 1996 3
Consolidated Statements of Income for the Three
Months and Six Months Ended June 30, 1997
and June 30, 1996 4
Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 1997
and June 30, 1996 5 - 6
Notes to Consolidated Financial Statements 7 -10
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-20
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 21
ITEM 2. Changes in Securities 21
ITEM 3. Defaults Upon Senior Securities 21
ITEM 4. Submission of Matters to a Vote of Security Holders 21
ITEM 5. Other Information 22
ITEM 6. Exhibits and Reports on Form 8-K 22
Signatures 23
<PAGE>
<TABLE>
JSB FINANCIAL, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<CAPTION>
JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 13,989 $ 12,894
Federal funds sold 76,500 86,500
----------- ----------
Cash and cash equivalents 90,489 99,394
Securities available-for-sale, at estimated fair value 63,535 51,021
Securities held-to-maturity, net (estimated fair value of
$430,186 and $461,784, respectively) 429,053 460,509
Other investments 7,645 6,859
Mortgage loans, net 867,428 827,052
Other loans, net 28,116 27,722
Premises and equipment, net 17,089 16,829
Interest due and accrued 9,876 9,310
Real estate held for investment, net -- 6,082
Real estate held for sale and Other real estate ("ORE") 11,453 5,236
Other assets 6,431 6,002
----------- ----------
Total Assets $1,531,115 $1,516,016
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to depositors $1,132,634 $1,144,393
Advance payments for real estate taxes and insurance 7,087 8,265
Official bank checks outstanding 11,613 9,644
Accrued expenses and other liabilities 29,911 18,415
---------- ----------
Total Liabilities 1,181,245 1,180,717
---------- ----------
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value, 15,000,000 shares authorized;
none issued) -- --
Common stock ($.01 par value, 30,000,000 shares authorized;
16,000,000 issued; 9,844,660 and 9,783,031 outstanding,
respectively) 160 160
Additional paid-in capital 164,758 163,500
Retained income, substantially restricted 295,530 289,588
Net unrealized gain on securities available-for-sale, net of tax 28,730 21,795
Common stock held by Benefit Restoration Plan Trust, at cost
(188,323 and 166,848 shares, respectively) (4,192) (3,275)
Common stock held in treasury, at cost (6,155,340 and 6,216,969
shares, respectively) (135,116) (136,469)
---------- ----------
Total Stockholders' Equity 349,870 335,299
---------- ----------
Total Liabilities and Stockholders' Equity $1,531,115 $1,516,016
========== ==========
<FN>
See accompanying Notes to the unaudited consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
JSB FINANCIAL, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
-------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income
Mortgage loans $18,262 $17,131 $36,219 $33,882
Debt & equity securities 5,261 5,796 10,274 12,085
Collateralized mortgage obligations ("CMOs") 2,131 2,484 4,282 4,800
Other loans 515 552 1,011 1,094
Mortgage-backed securities ("MBS") 130 191 271 397
Federal funds sold 694 804 1,619 1,605
------- ------- ------- -------
Total Interest Income 26,993 26,958 53,676 53,863
------- ------- ------- -------
Interest Expense
Deposits 9,932 10,041 19,670 20,188
------- ------- ------- -------
Net Interest Income 17,061 16,917 34,006 33,675
Provision for Possible Loan Losses 161 160 321 321
------- ------- ------- -------
Net Interest Income After Provision for
Possible Loan Losses 16,900 16,757 33,685 33,354
------- ------- ------- -------
Non-Interest Income
Real estate operations, net 480 444 836 821
Loan fees and service charges 1,015 641 1,722 1,512
Miscellaneous income 41 50 92 17
------- ------- ------- -------
Total Non-Interest Income 1,536 1,135 2,650 2,350
------- ------- ------- -------
Non-Interest Expense
Compensation and benefits 3,970 4,151 7,913 8,230
Occupancy and equipment expenses, net 1,117 1,204 2,262 2,602
Federal deposit insurance premiums 37 -- 75 1
Advertising 268 294 569 579
ORE expense/(income), net 22 (790) 55 (818)
Other general and administrative 1,337 1,203 2,761 2,734
------- ------- ------- -------
Total Non-Interest Expense 6,751 6,062 13,635 13,328
------- ------- ------- -------
Income Before Provision for Income Taxes 11,685 11,830 22,700 22,376
Provision for Income Taxes 4,576 5,032 9,143 9,500
------- ------- ------- -------
Net Income $ 7,109 $ 6,798 $13,557 $12,876
======= ======= ======= =======
Earnings and Cash Dividends Per Share:
Earnings per common and common
equivalent share $ .69 $ .63 $1.32 $ 1.19
===== ===== ===== ======
Cash Dividends $ .35 $ .30 $ .70 $ .60
===== ===== ===== ======
Weighted Average Number of Shares and
Share Equivalents Outstanding 10,319 10,744 10,294 10,811
====== ====== ====== ======
<FN>
See accompanying Notes to the unaudited consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
JSB FINANCIAL, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1996
---------- --------
<S> <C> <C>
Cash flows from operating activities
- ------------------------------------
Net income $ 13,557 $ 12,876
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for possible loan losses 321 321
Net gain on sale/redemption of equity securities -- (4)
Decrease in deferred loan fees and discounts, net (218) (283)
Accretion of discount in excess of amortization
of premium on MBS and CMOs (214) (249)
Accretion of discount in excess of amortization of
premium on debt securities (171) (101)
Depreciation and amortization on premises and equipment 909 914
Mortgages loans originated for sale (359) (339)
Proceeds from sale of mortgage loans originated for sale 365 342
Gains on sale of mortgage and other loans (14) (9)
Tax benefit for stock plans credited to capital 342 430
(Increase) decrease in interest due and accrued (566) 516
Payments received against Nationar claim -- 4,082
Net gain on sale of other real estate (1) (705)
Increase (decrease) in official bank checks outstanding 1,969 (17,360)
Other, net 5,547 (164)
-------- --------
Net cash provided by operating activities 21,467 267
-------- --------
Net cash flow from investing activities Loans originated:
Mortgage loans (78,526) (79,363)
Other loans (10,090) (8,724)
Purchases of CMOs held-to-maturity (29,977) (93,500)
Purchases of debt securities held-to-maturity and securities
available-for-sale (244,920) (229,900)
Principal payments on:
Mortgage loans 37,637 21,118
Other loans 9,332 9,429
CMOs 55,971 53,184
MBS 767 1,147
Proceeds from maturities of U.S. Government and
federal agency securities 250,000 325,000
Proceeds from sale of other loans 365 239
Purchases of Federal Home Loan Bank stock (786) (558)
Proceeds from sale/redemption of equity securities -- 19
Purchases of premises and equipment, net of disposals (1,169) (2,349)
Net decrease in real estate held holdings (excluding ORE) 216 1,138
Proceeds from sale of ORE 7 2,225
-------- ---------
Net cash used by investing activities (11,173) (895)
-------- ---------
<FN>
(Continued)
</FN>
</TABLE>
<PAGE>
<TABLE>
JSB FINANCIAL, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(IN THOUSANDS)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1996
---------- ---------
<S> <C> <C>
Net cash flow from financing activities
Net (decrease) increase in due to depositors (11,759) 978
(Decrease) increase in advance payments for real estate
taxes and insurance (1,178) 3,231
Proceeds from common stock option exercises 616 780
Cash dividends paid to common stockholders (6,878) (6,228)
Payments to repurchase common stock -- (17,290)
-------- --------
Net cash used by financing activities (19,199) (18,529)
-------- --------
Decrease in cash and cash equivalents (8,905) (19,157)
Cash and cash equivalents at beginning of year 99,394 85,893
-------- --------
Cash and cash equivalents at end of quarter $ 90,489 $ 66,736
======== ========
<FN>
See accompanying Notes to the unaudited consolidated financial statements.
</FN>
</TABLE>
<PAGE>
JSB FINANCIAL, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
---------------------
The financial information for JSB Financial, Inc. (the "Company") as
consolidated with its wholly owned subsidiary Jamaica Savings Bank FSB (the
"Bank") is prepared in conformity with generally accepted accounting principles
for interim financial statements and with instructions to Form 10-Q and Article
10 of Regulation S-X. Such principles are applied on a basis materially
consistent with those reflected in the 1996 Annual Report filed with the
Securities and Exchange Commission. The financial information included herein,
other than the consolidated statement of financial condition as of December 31,
1996, has been prepared by management without audit by independent certified
public accountants who do not express an opinion thereon. The consolidated
statement of financial condition as of December 31, 1996, has been derived from,
but does not include all the disclosures contained in, the audited consolidated
financial statements for the year ended December 31, 1996. The information
furnished includes all adjustments and accruals consisting only of normal
recurring accrual adjustments which are in the opinion of management, necessary
for a fair presentation of results for the interim periods. The foregoing
interim results are not necessarily indicative of the results of operations for
the full year ending December 31, 1997.
These consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto, included
in the Annual Report to Stockholders for JSB Financial, Inc. for the year ended
December 31, 1996.
2. Common Stock Listing
--------------------
Effective August 7, 1997, the Company's common stock began trading on
the New York Stock Exchange (the "NYSE") under the symbol "JSB". Prior to
listing on the NYSE, the Company's stock was listed on the Nasdaq Stock Market
under the symbol "JSBF". Stock price quotations can be found in the Wall Street
Journal and New York Times under a contraction of the Company's name, such as
"JSB Fn". The Company's common stock initially began trading on June 27, 1990.
3. Impact of New Accounting Standards
----------------------------------
Earnings Per Share
During the first quarter of 1997, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share" ("Statement 128"). Statement 128 establishes standards
for computing and presenting earnings per share ("EPS") and applies to entities
with publicly held common stock or potential common stock. Statement 128
simplifies the standards for computing EPS previously found in Accounting
Principles Board Opinion No. 15, "Earnings Per Share" ("Opinion 15"), and makes
them comparable to international EPS standards. It replaces the presentation of
primary EPS with a presentation of basic EPS. Statement 128 requires dual
presentation of basic and diluted EPS on the face of the income statement for
all entities with complex capital structures and requires a reconciliation of
the numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income available
to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
<PAGE>
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS pursuant to Opinion 15.
Statement 128 supersedes Opinion 15 and American Institute of Certified
Public Accountants Accounting Interpretations 1-102 of Opinion 15, as well as
other accounting pronouncements. The provisions in Statement 128 are
substantially the same as those in International Accounting Standard 33,
Earnings per Share, recently issued by the International Accounting Standards
Committee.
Statement 128 is effective for financial statements issued for periods
ending after December 15, 1997, including interim periods; earlier application
is not permitted. This Statement requires restatement of all prior-period EPS
data presented.
The basic EPS under Statement 128 will result in higher EPS than
previously disclosed under Opinion 15. Diluted EPS are expected to be similar to
fully diluted EPS.
Reporting Comprehensive Income
In June of 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" ("Statement 130"). Statement 130 establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. This
Statement requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. Statement 130 does not require a specific format for that
financial statement but requires that an enterprise display an amount
representing total comprehensive income for the period in that financial
statement.
Statement 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position.
Statement 130 is effective for fiscal years beginning after December 15,
1997. Reclassification of financial statements for earlier periods provided for
comparative purposes is required. Management has not yet determined the impact
that Statement 130 will have on the Company.
Disclosures about Segments of an Enterprise and Related Information
In June of 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("Statement 131"). Statement
131 establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. This statement supersedes FASB Statement No. 14, "Financial Reporting
for Segments of a Business Enterprise", but retains the requirement to report
information about major customers. It amends FASB Statement No. 94,
"Consolidation of All Majority-Owned Subsidiaries", to remove the special
disclosure requirements for previously unconsolidated subsidiaries. Statement
131 does not apply to nonpublic business enterprises or to not-for-profit
organizations.
<PAGE>
Statement 131 requires that a public business enterprise report
financial and descriptive information about its reportable operating segments.
Operating segments are components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments.
Statement 131 requires that a public business enterprise report a
measure of segment profit or loss, certain specific revenue and expense items,
and segment assets. This statement requires reconciliations of total segment
revenues, total segment profit or loss, total segment assets, and other amounts
disclosed for segments to corresponding amounts in the enterprise's
general-purpose financial statements. It requires that all public business
enterprises report information about the revenues derived from the enterprise's
products or services (or groups of similar products and services), about the
countries in which the enterprise earns revenues and holds assets, and about
major customers regardless of whether that information is used in making
operating decisions. However, this statement does not require an enterprise to
report information that is not prepared for internal use if reporting it would
be impracticable.
Statement 131 also requires that a public business enterprise report
descriptive information about the way that the operating segments were
determined, the products and services provided by the operating segments,
differences between the measurements used in reporting segment information and
those used in the enterprise's general-purpose financial statements, and changes
in the measurement of segment amounts from period to period.
Statement 131 is effective for financial statements for periods
beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. This statement need
not be applied to interim financial statements in the initial year of its
application, but comparative information for interim periods in the initial year
of application is to be reported in financial statements for interim periods in
the second year of application.
The Company does not expect the adoption of Statement 131 to have
a material affect on its financial condition or results of operations.
<PAGE>
4. Debt and Equity Securities
--------------------------
The following tables set forth information regarding the Company's debt
and equity securities as of:
<TABLE>
June 30, 1997 December 31, 1996
-------------------------- ---------------------
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
---- ---------- ---- ----------
Held-to-Maturity (In Thousands)
- ----------------
<CAPTION>
<S> <C> <C> <C> <C>
U.S. Government and Federal
Agency Securities $294,736 $295,287 $299,645 $300,262
CMOs, net 129,481 129,660 155,272 155,421
MBS, net 4,836 5,239 5,592 6,101
-------- -------- --------- --------
Total Securities held-to maturity $429,053 $430,186 $460,509 $461,784
======== ======== ======== ========
Estimated Estimated
Cost Fair Value Cost Fair Value
---- ---------- ---- ----------
Available-for-Sale (In Thousands)
- ------------------
Equity securities:
Common stock $ 11,107 $ 40,362 $ 11,108 $ 32,888
SLMA* stock 6 2,540 6 1,863
FHLMC* stock 576 20,580 576 16,225
FNMA* stock 2 53 2 45
--------- -------- -------- --------
Total equity securities $ 11,691 $ 63,535 $ 11,692 $ 51,021
======== ======== ======== ========
<FN>
* Student Loan Marketing Association ("SLMA"), Federal Home Loan Mortgage
Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA").
</FN>
</TABLE>
5. Subsequent Events
-----------------
On July 8, 1997, the Company's Board of Directors declared a $.35 per
share dividend on its common stock. The dividend is to be paid on August 20,
1997, to stockholders of record on August 6, 1997, and will total approximately
$3.4 million.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General/Financial Condition
- ---------------------------
JSB Financial, Inc. is a Delaware-chartered holding company. The
Company's assets, which totaled approximately $1.53 billion at June 30, 1997,
included assets totaling $1.45 billion owned by its wholly owned subsidiary,
Jamaica Savings Bank FSB. In addition to the Bank's assets, the Company's
earning assets were comprised of $27.9 million in money market investments on
deposit with the Bank, $60.0 million in short-term federal agency securities,
and $15.2 million in mortgage loans secured by multi-family rental properties.
During the second quarter of 1997, all real estate properties held for
investment were reclassified to real estate held for sale. These properties are
no longer considered as held for investment as management will consider offers
to sell these properties. The properties are carried at cost, net of accumulated
depreciation, which is estimated to be less than the properties' fair value less
estimated selling costs.
Subsidiary Activities
- ---------------------
During the first quarter of 1997, the Bank created a new operating
subsidiary, Tier Inc., which qualifies as a real estate investment trust, which
may, among other things, be utilized by the Bank to raise capital in the future.
The Bank has transferred approximately $360.0 million of mortgage loans to Tier
Inc.
Asset Quality
- -------------
At June 30, 1997, the Bank's non-performing assets, which totaled $14.7
million, included: non-performing loans of $13.7 million and $997,000 ORE. The
$13.7 million of non-performing loans continues to include a $12.8 million
underlying cooperative mortgage loan that is under foreclosure and on
non-accrual status. The ratio of non-performing assets to total assets was .96%
and .98% at June 30, 1997 and December 31, 1996, respectively.
The Bank generally includes in non-performing loans, loans which are 90
days or more in arrears and loans which have been placed on non-accrual status.
In addition to non-performing loans, non-performing assets include ORE, as well
as any other investments, if any, on which the collection of contractual
principal and interest is uncertain. The ratio of non-performing loans to total
loans was 1.52% and 1.64% (See Non-performing/Non-accrual Table, herein) at June
30, 1997 and December 31, 1996, respectively.
<PAGE>
<TABLE>
Loan Delinquency Table
- ----------------------
At June 30, 1997 and December 31, 1996, delinquencies in the loan
portfolios were as follows:
61-90 Days 90 Days and Over
---------- ----------------
Number Principal Number Principal
of balance of balance
loans of loans loans of loans
----- -------- ----- -- -----
(Dollars in Thousands)
<CAPTION>
<S> <C> <C> <C> <C> <C><C>
At June 30, 1997:
Delinquent loans:
Guaranteed(1) 58 $ 235 121 $ 694
Non-guaranteed 4 12 10 12,978(2)
-- ------ --- -------
62 $ 247 131 $13,672
== ====== === =======
Ratio of delinquent loans
to total loans .03% 1.52%
At December 31, 1996:
Delinquent loans
Guaranteed(1) 78 $ 390 144 $ 692
Non-guaranteed 9 20 15 13,459(2)
-- ------ --- -------
87 $ 410 159 $14,151
== ====== === =======
Ratio of delinquent loans
to total loans .05% 1.64%
<FN>
(1) Loans which are Federal Housing Administration ("FHA"), Veterans Administration ("VA") or
SLMA guaranteed.
(2) Includes a $12.8 million underlying cooperative mortgage loan that is under foreclosure.
</FN>
</TABLE>
<PAGE>
Non-performing/Non-accrual Table
- --------------------------------
The following table sets forth information regarding non-accrual loans
and loans which were delinquent 90 days or more on which the Bank was accruing
interest at June 30, 1997 and December 31, 1996:
<TABLE>
June 30, December 31,
1997 1996
---- ----
<CAPTION>
<S> <C> <C>
Mortgage loans:
- ---------------
Non-accrual loans (1) $12,754 $12,754
------- -------
Accruing loans 90 or more days overdue:
Conventional mortgages 213 686
VA and FHA mortgages (2) 407 361
------- -------
Total 620 1,047
------- -------
Other loans:
- ------------
Non-accrual loans -- --
Accruing 90 or more days overdue:
Student loans 287 331
Consumer loans 11 19
------- -------
Total 298 350
------- -------
Total non-performing loans:
Non-accrual 12,754 12,754
Accruing 90 days or more overdue 918 1,397
------- -------
Total $13,672 $14,151
======= =======
Non-accrual loans to total loans 1.42% 1.48%
Accruing loans 90 or more days overdue
to total loans .10 .16
Non-performing loans to total loans 1.52 1.64
<FN>
(1) Represents a single underlying cooperative mortgage loan in arrears and
under foreclosure.
(2) The Bank's FHA and VA loans are guaranteed, seasoned loans. It is
management's belief that these loans, including the past due loans, do
not present any significant collection risk to the Bank, and therefore,
are presented separately from conventional mortgages.
</FN>
</TABLE>
<PAGE>
Loan Loss Activity Table
- ------------------------
Activity in the allowance for possible loan losses for the mortgage
loan portfolio and the other loan portfolio are summarized for the six months
ended June 30, 1997 and the year ended December 31, 1996, as follows,:
<TABLE>
June 30, December 31,
1997 1996
---- ----
(Dollars in Thousands)
<CAPTION>
<S> <C> <C>
Mortgage Portfolio Loan Loss Allowance:
- ---------------------------------------
Balance at beginning of period $5,176 $4,575
Provision for possible loan losses 300 600
Loans charged off -- --
Recoveries of loans previously charged off -- 1
------ ------
Balance at end of period $5,476 $5,176
====== ======
Ratios for Mortgage Portfolio:
- ------------------------------
Net charge-offs to average mortgages --% --%
Allowance for possible loan losses to
net mortgage loans .63 .63
Allowance for possible loan losses to
mortgage loans delinquent 90 days or more 40.95 37.50
Other Loan Portfolio Loss Allowance:
- ------------------------------------
Balance at beginning of period $ 151 $ 122
Provision for possible loan losses 21 40
Loans charged off (34) (33)
Recoveries of loans previously charged off 4 22
------ ------
Balance at end of period $ 142 $ 151
====== ======
Ratios for Other Loan Portfolio:
- --------------------------------
Net charge-offs to average other loans .11% .04%
Allowance for possible loan losses to
net other loans .51 .54
Allowance for possible loan losses to
other loans delinquent 90 days or more 47.65 43.14
</TABLE>
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company's funds are primarily obtained through dividends paid by
the Bank. The Bank's primary source of funds are deposits, proceeds from
maturities of debt securities, principal and interest payments on CMOs, mortgage
and other loans. During the six months ended June 30, 1997, purchases of U.S.
Government and agency securities represented the most significant use of funds
from investing activities. Mortgage originations, substantially all of which are
at fixed rates, for the six months ended 1997 were $78.5 million, compared to
$79.4 million for the first half of 1996. For the six months ended June 30,
1997, maturities of U.S. Government and agency securities generated $250.0
million, the most significant cash inflow from investing activities, followed by
principal payments on CMOs of $56.0 million. Net deposit outflows of $11.8
million and dividend payments of $6.9 million represent the most significant
cash outflows from financing activities. The increase in dividend payments
reflects the increase in dividends paid per share to $.70 for the first half of
1997, compared to $.60 per share for the first half of 1996.
The net decrease in deposits of $11.8 million to $1.133 billion at June
30, 1997, from $1.144 billion at December 31, 1996, reflects decreases in
passbook accounts, money market accounts and negotiable order of withdrawal
("NOW") accounts of $19.4 million, $5.9 million and $473,000, respectively,
partially offset by a $12.4 million increase in certificate accounts, a $1.0
million increase in lease security accounts and a $628,000 increase in demand
deposit accounts. Interest rates offered on passbook accounts remained
relatively low compared to alternative short-term CD's offered by the Bank and
products of the investment community. This scenario has caused the trend of
deposit shifts from passbook accounts to short-term certificate accounts and the
slow decline in net deposits to continue. Management continues to monitor
deposit levels and interest rates in conjunction with asset structure and has
evaluated and implemented various strategies to provide for targeted objectives
in various interest rate scenarios. Net interest rate spread, net interest
margin, liquidity, and related asset quality are some of the key measures of
financial performance that management remains focused on. The Bank's assets are
intended to be structured such that a gradual decline in deposits, such as the
current scenario, will not adversely affect the Company. The Bank's liquidity
ratios continue to exceed all short and long term minimum regulatory
requirements. Management is focused on providing quality customer service as its
main strategy for maintaining its relationships with its customers. The Bank has
expanded its range of services to customers, including automated telephone
banking and credit cards to its depositors.
The Company did not repurchase shares of its common stock for the six
months ended June 30, 1997, pursuant to its tenth stock repurchase program (the
"current program"), which began on June 12, 1996. As of December 31, 1996,
415,000 of the 900,000 shares targeted for repurchase under the current program
were repurchased at an aggregate cost of $13.7 million, or at an average price
of $33.00 per share. Pursuant to the Company's 1990 stock option plans, 61,629
shares of treasury stock were reissued for option exercises during the six
months ended June 30, 1997.
On April 8, 1997, the Company's Board of Directors declared a cash
dividend of $.35 per share to stockholders of record on May 7, 1997. The
dividend payment, which totaled $3.4 million, was made on May 21, 1997.
<PAGE>
Regulations
- -----------
As a condition of deposit account insurance, Office of Thrift
Supervision ("OTS") regulations require that the Bank calculate three regulatory
net worth requirements on a quarterly basis, and satisfy each requirement at the
calculation date and throughout the ensuing quarter. The three requirements are:
tangible capital of 1.50%, leverage ratio (or "core capital") of 3.00%, and a
risk-based assets capital ratio of 8.00%. Although the minimum core capital
ratio is 3.00%, the OTS Prompt Corrective Action Regulation stipulates that an
institution with less than 4.00% core capital is deemed to be undercapitalized.
The Bank's capital ratios at June 30, 1997 were as follows:
<TABLE>
Percentage Dollars
---------- -------
(In Thousands)
<CAPTION>
<S> <C> <C>
TANGIBLE CAPITAL
Required 1.50 $ 21,347
Actual 14.08 200,364
----- --------
Excess 12.58% $179,017
===== ========
CORE CAPITAL
Required 3.00% $ 42,695
Actual 14.08 200,364
----- --------
Excess 11.08% $157,669
===== ========
RISK BASED CAPITAL
Required 8.00% $ 76,430
Actual 20.37 194,656
----- --------
Excess 12.37% $118,226
===== ========
</TABLE>
Comparison of Operating Results for the Three Months Ended
June 30, 1997 and 1996
- ----------------------------------------------------------
Net income for the three months ended June 30, 1997, was $7.1 million,
or $.69 per share, compared with $6.8 million, or $.63 per share for the
three months ended June 30, 1996.
Net interest income for the three months ended June 30, 1997, was $17.1
million, compared to $16.9 million for the three months ended June 30, 1996.
This net increase reflects a $109,000 decrease in interest expense and a $35,000
increase in interest income. The annualized yield on interest earning assets
increased to 7.52%, compared to 7.41%, for the quarters ended June 30, 1997 and
1996, respectively, while average interest earning assets decreased by $18.9
million. The annualized cost of interest bearing deposits increased to 3.60%
from 3.54% for the quarters ended June 30, 1997 and 1996, respectively and
average interest bearing deposits decreased by $32.5 million. For the quarter
ended June 30, 1997, the net interest rate spread and net interest margin
increased to 3.91% and 4.75%, respectively, compared to 3.87% and 4.65%,
respectively for the quarter ended June 30, 1996.
<PAGE>
Interest earned on mortgage loans increased by 6.6%, to $18.3 million
from $17.1 million, reflecting continued growth in the mortgage portfolio,
partially offset by a decrease in the yield to 8.51% for the quarter ended June
30, 1997, from 8.73% for the quarter ended June 30, 1996.
For the three months ended June 30, 1997, income from debt and equity
securities, decreased by $535,000, or 9.2%, to $5.3 million from $5.8 million
for the three months ended June 30, 1996. This decrease is the result of a
decrease in the average investment in U.S. Government and federal agency
securities and other investments of $41.6 million, or 10.6%, to $350.2 million,
compared to $391.8 million for the three months ended June 30, 1996. The
annualized yield on the debt and equity security portfolio increased to 6.01%
for the three months ended June 30, 1997 from 5.92% for the three months ended
June 30, 1996. The debt and equity securities portfolio activity for the current
period included purchases of $110.0 million and maturities of $155.0 million,
compared with purchases of $179.9 million and maturities of $215.0 million for
the quarter ended June 30, 1996.
For the quarter ended June 30, 1997, income on CMOs decreased by 14.2%,
to $2.1 million, with an annualized yield of 5.93%, from income of $2.5 million
with an annualized yield of 5.46% for the quarter ended June 30, 1996. During
the second quarter of 1997, the Bank received principal payments of $27.3
million on CMOs, compared with principal payments of $30.3 million for the
quarter ended June 30, 1996. There were no purchases of CMOs during the quarter
ended June 30, 1997, compared to purchases of $26.9 million for the quarter
ended June 30, 1996. The Bank did not sell any CMOs during either period.
Income on federal funds sold decreased by $110,000, or 13.7% to $694,000
for the quarter ended June 30, 1997 from $804,000 for the quarter ended June 30,
1996 This decrease resulted from a decrease in the average investment in federal
funds of $9.8 million to $51.0 million for the current period, compared with
$60.8 million for the quarter ended June 30, 1996. The annualized yield on
federal funds sold increased to 5.44% for the current quarter, compared to 5.29%
for the quarter ended June 30, 1996.
Interest expense on deposits was $9.9 million for the quarter ended June
30, 1997, compared to $10.0 million for the quarter ended June 30, 1996. This
slight decrease reflects the net decrease in average interest bearing deposits
of $32.5 million, to $1.102 billion for the three months ended June 30, 1997,
compared to $1.135 billion for the three months ended June 30, 1996. The average
rate paid on interest bearing deposits increased to 3.60% from 3.54% from the
comparative quarter.
The provision for possible loan losses remained relatively unchanged at
$161,000 compared to $160,000 for the same period in 1996. Management regularly
evaluates the quality and performance of the Company's asset portfolios, and
thereby assesses the adequacy of loss allowances.
Total non-interest income for the three months ended June 30, 1997,
increased to $1.5 million from $1.1 million, a net increase of $401,000, or
35.3%. The net change in non-interest income primarily reflects a $374,000
increase in loan fees and service charges reflecting an increase in mortgage
prepayment penalties.
Non-interest expense increased by $689,000, or 11.4%, to $6.8 million
during the quarter ended June 30, 1997, from $6.1 million for the quarter ended
June 30, 1996. ORE expense was $22,000 for the three months ended June 30, 1997,
compared to income of $790,000 for the three months ended June 30, 1996,
reflecting a pretax gain of $705,000 recognized on the sale of a property
acquired through foreclosure during the first quarter of 1996. Compensation and
benefit expense decreased by $181,000, primarily reflecting a decrease in
pension fund expense. The increase in other general and administrative expense
<PAGE>
primarily reflects an increase in consultation fees in connection with the
formation of the new subsidiary, Tier Inc. Office occupancy and equipment
expense decreased by $87,000 as the expenses related to the renovations to the
Company's headquarters were completed during 1996. Federal Deposit Insurance
Corporation ("FDIC") premiums increased by $37,000 in connection with federal
legislation that assessed Bank Insurance Fund members a 1.3% basis point charge
per $100 of insurable deposits to meet the Financing Corporation ("FICO") bond
obligations.
The provision for income taxes decreased by $456,000, or 9.1%, to $4.6
million for the three months ended June 30, 1997, from $5.0 million for the
three months ended June 30, 1996. The reduction in the Company's effective tax
rate from 42.5% for the quarter ended June 30, 1996 to 39.2% accounted for
approximately $394,000 of the decrease, with the remainder reflecting the
$145,000 decrease in pre-tax income. The reduction in the effective tax rate is
primarily attributed to certain tax benefits associated with the Bank's new
subsidiary, Tier Inc.
Comparison of Operating Results for the Six Months Ended June 30, 1997 and 1996
- -------------------------------------------------------------------------------
Net income for the six months ended June 30, 1997, was $13.6 million,
or $1.32 per share, compared with $12.9 million, or $1.19 per share for the
six months ended June 30, 1996.
Net interest income for the six months ended June 30, 1997, was $34.0
million, compared to $33.7 million for the six months ended June 30, 1996. This
net increase reflects a $518,000 decrease in interest expense, partially offset
by a $187,000 decrease in interest income. The annualized yield on interest
earning assets increased to 7.49%, compared to 7.43%, for the six months ended
June 30, 1997 and 1996, respectively; while average interest earning assets
decreased by $17.2 million. The average annualized cost of interest bearing
deposits remained unchanged at 3.56% for the six months ended June 30, 1997 and
1996, and average interest bearing deposits decreased by $29.5 million. For the
year to date period ended June 30, 1997, the net interest rate spread and net
interest margin increased to 3.93% and 4.75%, respectively, compared to 3.87%
and 4.65%, respectively for the year to date period ended June 30, 1996.
Income earned on mortgage loans increased by $2.3 million, or 6.9%, to
$36.2 million for the six months ended June 30, 1997 compared to $33.9 million
for the comparative 1996 period, reflecting continued growth in the mortgage
portfolio. This increase was partially offset by a decrease in the mortgage
portfolio yield to 8.54% for the six months ended June 30, 1997, from 8.78% for
the six months ended June 30, 1996.
For the six months ended June 30, 1997, income on debt and equity
securities decreased by $1.8 million, or 15.0%, to $10.3 million from $12.1
million for the six months ended June 30, 1996. This decrease is the result of a
decrease in the average investment in U.S. Government and federal agency
securities and other investments of $60.8 million, or 15.0%, to $345.3 million,
compared to $406.1 million for the six months ended June 30, 1996. The
annualized yield on the debt and equity security portfolio remained unchanged at
5.95% for the comparative six month periods. The debt and equity securities
portfolio activity for the current period included purchases of $244.9 million
and maturities of $250.0 million, compared with purchases of $229.9 million and
maturities of $325.0 million for the six months ended June 30, 1996.
For the six months ended June 30, 1997, income on CMOs decreased by
10.8%, to $4.3 million, with an annualized yield of 5.89%, from $4.8 million
with an annualized yield of 5.47% for the six months ended June 30, 1996. This
decrease is reflective of the decrease in the average investment in the CMO
<PAGE>
portfolio of $30.0 million, or 17.1% for the comparative six month period.
During the six months ended June 30, 1997, the Bank received principal payments
of $56.0 million on CMOs, compared with $53.2 million for the six months ended
June 30, 1996. CMO purchases during the first six months of 1997 totaled $30.0
million, compared to $93.5 million for the first half of 1996. The Bank did not
sell any CMOs during either period.
Income on federal funds sold changed slightly, increasing by $14,000, to
$1.6 million, for the six months ended June 30, 1997, compared to the six months
ended June 30, 1996. This increase resulted from an increase in the average
investment in federal funds of $424,000, to $60.7 million for the current
period, compared with $60.2 million for the six months ended June 30, 1996. This
annualized yield on federal funds sold increased slightly to 5.34% for the
current six month period, compared to 5.33% for the six month period ended June
30, 1996.
Interest expense on deposits decreased by 2.6%, to $19.7 million for the
six months ended June 30, 1997, compared to $20.2 million for the six months
ended June 30, 1996. This net decrease reflects the decrease in average interest
bearing deposits of $29.5 million, or 2.6%, to $1.104 million for the six months
ended June 30, 1997, compared to $1.134 million for the six months ended June
30, 1996. The cost of interest bearing deposits remained unchanged at 3.56% for
the comparative six month periods.
The provision for possible loan losses remained unchanged at $321,000
for the six months ended June 30, 1997 and 1996, respectively. Management
regularly evaluates the quality and performance of the Company's asset
portfolios, and thereby assesses the adequacy of loss allowances.
Total non-interest income for the six months ended June 30, 1997,
increased to $2.7 million from $2.4 million, a net increase of $300,000, or
12.8%. The net change in non-interest income primarily reflects a $210,000
increase in loan fees and service charges. This increase is the result of
increases of $311,000 in prepayment penalties on mortgages and $22,000 from New
York Cash Exchange fees, partially offset by decreases of $44,000 in mortgage
loan late charges. In addition, miscellaneous income increased by $75,000, as
the 1996 period reflects an $83,000 loss due to the burglary of one of the
Bank's branch offices.
Non-interest expense increased by $307,000, or 2.3%, to $13.6 million
for the first six months of 1997, from $13.3 million for the first six months of
1996. ORE expense was $55,000 for the six months ended June 30, 1997, compared
to income of $818,000 for the six months ended June 30, 1996, reflecting a
pretax gain of $705,000 recognized on the sale of a property acquired through
foreclosure during the first quarter of 1996. Occupancy and equipment expense
decreased by $340,000, primarily the result of the completion of the renovations
to the Company's headquarters during 1996. Compensation and benefits expense
decreased by $317,000, resulting from an insurance premium holiday, whereby a
$214,000 medical and dental premium was waived due to insurance reserve targets
being met and a $256,000 decrease in pension fund expense. FDIC premiums
increased by $74,000 in connection with federal legislation assessing Bank
Insurance Fund members a 1.3% basis point charge per $100 of insurable deposits
to meet the FICO bond obligations.
The provision for income taxes decreased by $357,000, or 3.8%, to $9.1
million for the six months ended June 30, 1997, from $9.5 million for the six
months ended June 30, 1996. The reduction in the Company's effective tax rate
from 42.5% for the six months ended June 30, 1996 to 40.3% for the first six
months of 1997 is primarily attributed to certain tax benefits associated with
the Bank's new subsidiary, Tier Inc.
<PAGE>
Private Securities Litigation Reform Act Safe Harbor Statement
- --------------------------------------------------------------
In addition to historical information, this Form 10-Q may include
certain forward looking statements based on current management expectations. The
Company's actual results could differ materially from those management
expectations. Factors that could cause future results to vary from current
management expectations include, but are not limited to, general economic
conditions, legislative and regulatory changes, monetary and fiscal policies of
the federal government, changes in tax policies, rates and regulations of
federal, state and local tax authorities, changes in interest rates, deposit
flows, the cost of funds, demand for loan products, demand for financial
services, competition, changes in the quality or composition of the Bank's loan
and investment portfolios, changes in accounting principles, policies or
guidelines, and other economic, competitive, governmental and technological
factors affecting the Company's operations, markets, products, services and
prices. Further description of the risks and uncertainties to the business are
included in detail in Item 1, BUSINESS of the Company's 1996 Form 10-K.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal proceedings
The Bank is a defendant in several lawsuits arising out of the
normal conduct of business. In the opinion of management, after
consultation with legal counsel, the ultimate outcome of these matters
is not expected to have a material adverse effect on the Company's
results of operations, business operations or the consolidated
financial condition of the Company.
ITEM 2. Changes in securities (Not Applicable)
ITEM 3. Defaults upon Senior Securities (Not Applicable)
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held on May 13, 1997,
present in person or by proxy were 8,969,264 of 9,824,884 shares of
Common Stock of JSB Financial, Inc. entitled to vote at such meeting.
Resolution I. All nominees to serve as a Director on the
Company's Board were elected as follows*:
For Withheld
--- --------
Howard J. Dirkes, Jr. 8,671,947 297,317
Cynthia Gibbons 8,624,337 344,927
Alfred F. Kelly 8,670,947 298,317
*There were no broker non-votes.
The continuing directors were Park T. Adikes, Joseph C. Cantwell,
James E. Gibbons, Jr., Edward P. Henson, Alfred F. Kelly, Richard W.
Meyer and Arnold B. Pritcher.
Resolution II. Ratification of the appointment of KPMG Peat
Marwick LLP, as independent auditors for the year ending December 31,
1997, as follows*:
For: 8,808,443
Against 89,795
Abstain: 71,026
*There were no broker non-votes.
Resolution III. Stockholder proposal, as set forth in the
proxy statement, as follows:
For: 1,134,822
Against: 6,049,898
Abstain: 159,731
Broker non-votes totaled 1,624,813.
<PAGE>
ITEM 5. Other information t Applicable)
ITEM 6. Exhibits and Reports on Form 8-K
Page
Number
------
(a) Exhibits
3.01 Articles of Incorporation (1)
3.02 By-laws (2)
11.00 Computation of Earnings Per Share 25
27.00 Financial Data Schedule 26-27
(b) Reports on Form 8-K (Not Applicable)
(1) Incorporated herein by reference to Exhibits filed with the
Registration Statement on Form S-1, Registration No. 33-33821.
(2) Incorporated herein by reference to Exhibits filed with the
Form 10-Q for the Quarter Ended March 31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Quarterly Report on the Form
10-Q for the quarter ended June 30, 1997, to be signed on its behalf by the
undersigned, thereunto duly authorized.
JSB Financial, Inc.
(By)
/s/ Park T. Adikes
--------------
Park T. Adikes
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
DATE: August 11, 1997 /s/ Park T. Adikes
--------------- --------------
Park T. Adikes
Chief Executive Officer
DATE: August 11, 1997 /s/ Thomas R. Lehmann
--------------- -----------------
Thomas R. Lehmann
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Identification of Exhibit
11.00 Statement Re: Computation of Per Share Earnings
27.00 Financial Data Schedule
<TABLE>
PART 1: EXHIBIT 11.00
JSB FINANCIAL, INC. AND SUBSIDIARY
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(Unaudited, In Thousands, except per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1997 1996 1997 1996
------------------ -------------------
<S> <C> <C> <C> <C>
Primary earnings per share:
- ---------------------------
Shares used in computing earnings per share:
Weighted average number of shares outstanding 9,839 10,273 9,824 10,334
Assuming exercise of options reduced by the
number of shares which could have been purchased
at average stock price with proceeds from exercise
of such options 480 471 470 477
------ ------ ------ ------
Common stock and common stock equivalents 10,319 10,744 10,294 10,811
Earnings:
- ---------
Net income $ 7,109 $ 6,798 $13,557 $12,876
Earnings per common and common equivalent share $ .69 $ .63 $1.32 $1.19
Earnings per share -- assuming full dilution:
- ---------------------------------------------
Shares used in computing earnings per share:
Weighted average number of shares outstanding 9,839 10,273 9,824 10,334
Assuming exercise of options reduced by the
number of shares which could have been purchased
at period end stock price with proceeds from exercise
of such options 482 466 494 480
------ ------ ------ ------
Common stock and common stock equivalents 10,321 10,739 10,318 10,814
Earnings:
- ---------
Net income $ 7,109 $ 6,798 $13,557 $12,876
Earnings per common share assuming full dilution $ .69 N/A* $1.31 $1.19
*Not applicable - result is anti-dilutive
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
Unaudited Statement of Financial Condition as of June 30, 1997 and the Unaudited
Consolidated Statement of Income for the six months ended June 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000861499
<NAME> JSB Financial, Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 13,989
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 76,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 63,535
<INVESTMENTS-CARRYING> 429,053
<INVESTMENTS-MARKET> 430,186
<LOANS> 901,162
<ALLOWANCE> 5,618
<TOTAL-ASSETS> 1,531,115
<DEPOSITS> 1,132,634
<SHORT-TERM> 0
<LIABILITIES-OTHER> 48,611
<LONG-TERM> 0
0
0
<COMMON> 160
<OTHER-SE> 349,710
<TOTAL-LIABILITIES-AND-EQUITY> 1,531,115
<INTEREST-LOAN> 37,230
<INTEREST-INVEST> 14,827
<INTEREST-OTHER> 1,619
<INTEREST-TOTAL> 53,676
<INTEREST-DEPOSIT> 19,670
<INTEREST-EXPENSE> 19,670
<INTEREST-INCOME-NET> 33,685
<LOAN-LOSSES> 321
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 13,635
<INCOME-PRETAX> 22,700
<INCOME-PRE-EXTRAORDINARY> 13,557
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,557
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 1.32
<YIELD-ACTUAL> 4.75
<LOANS-NON> 12,754
<LOANS-PAST> 921
<LOANS-TROUBLED> 1,865
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,327
<CHARGE-OFFS> 34
<RECOVERIES> 4
<ALLOWANCE-CLOSE> 5,618
<ALLOWANCE-DOMESTIC> 5,618
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
