<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ----- to -----
Commission file number 0-19611
CITFED BANCORP, INC.
--------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 31-1332674
(State of other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
ONE CITIZENS FEDERAL CENTRE, DAYTON, OHIO 45402
(Address of principal executive offices) (Zip code)
</TABLE>
(937) 223-4234
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
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 report), and (2) has been subject to such
filing requirements for the past 90 days.
YES X No
------ ------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock October 31, 1997
--------------------- ----------------
$.01 par value 8,658,698
<PAGE> 2
CITFED BANCORP, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements:
Consolidated Statements of Financial
Condition as of September 30, 1997
and March 31, 1997 1
Consolidated Statements of Operations
for the Three and Six Months ended
September 30, 1997 and 1996 2
Consolidated Statement of Stockholders'
Equity for the Six Months ended
September 30, 1997 3
Consolidated Statements of Cash Flows
for the Six Months ended
September 30, 1997 and 1996 4
Notes to Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 19
Exhibit Index 20
Exhibit 11 21
Exhibit 27 22
</TABLE>
<PAGE> 3
CITFED BANCORP, INC. AND SUBSIDIARIES
FORM 10Q
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1997 AND MARCH 31, 1997
(Dollars in thousands)
Part 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1997
---------- -----------
(unaudited)
<S> <C> <C>
ASSETS
------
Cash and demand deposits $ 13,548 $ 31,453
Interest-bearing time deposits and cash equivalents 26,391 22,866
---------- -----------
TOTAL CASH AND EQUIVALENTS 39,939 54,319
Investment securities held to maturity 726,220 780,862
Mortgage-backed securities available for sale 241,659 235,197
Loans (less allowance for loan losses of $18,103 and $16,823
at September 30, 1997 and March 31, 1997, respectively) 2,006,931 1,638,514
Loans held for sale 70,474 35,443
Accrued interest receivable:
Investment securities 3,599 3,520
Loans 10,807 8,790
Mortgage-backed securities 3,961 4,301
Real estate held for sale, net 5,593 7,156
Federal Home Loan Bank stock, at cost 47,797 42,866
Office properties and equipment, net 19,623 18,322
Cost in excess of fair value of net assets acquired 18,869 20,319
Other assets 99,082 87,660
---------- -----------
TOTAL $3,294,554 $2,937,269
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Deposits $1,807,580 $1,683,998
Advances from Federal Home Loan Bank 936,628 720,482
Other borrowings 304,498 312,373
Other liabilities 39,135 34,429
---------- -----------
TOTAL LIABILITIES 3,087,841 2,751,282
STOCKHOLDERS' EQUITY:
Serial Preferred Stock,($.01 par value),
Authorized 5,000,000 shares; none outstanding
Common Stock($.01 par value),
Authorized 20,000,000 shares; 8,656,198 outstanding 87 86
Additional paid-in capital 56,843 56,492
Retained earnings-substantially restricted 148,837 136,634
Unearned compensation - restricted stock awards (4) (21)
Net unrealized gain(loss) on securities available for sale 950 (7,204)
--------- ----------
TOTAL STOCKHOLDERS' EQUITY 206,713 185,987
---------- -----------
TOTAL $3,294,554 $2,937,269
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 1
<PAGE> 4
CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 1997 and 1996
(DOLLARS IN THOUSANDS, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
INTEREST INCOME: (unaudited)
<S> <C> <C> <C> <C>
Loans $37,976 $30,632 $72,256 $60,167
Securities available for sale 12,489 12,510 25,536 23,176
Securities held to maturity 3,941 3,756 7,780 7,166
Other 896 661 1,742 1,269
------- ------- ------- -------
Total interest income 55,302 47,559 107,314 91,778
------- ------- ------- -------
INTEREST EXPENSE:
Deposits 20,643 17,738 39,634 35,775
Borrowings 17,298 12,958 32,528 23,320
------- ------- ------- -------
Total interest expense 37,941 30,696 72,162 59,095
------- ------- ------- -------
NET INTEREST INCOME 17,361 16,863 35,152 32,683
Provision for loan losses 450 1,050 2,050 1,500
------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 16,911 15,813 33,102 31,183
------- ------- ------- -------
NON-INTEREST INCOME:
Servicing fees and charges:
Consumer banking 4,249 3,300 8,170 6,136
Trust and investment services 862 865 1,631 1,766
Mortgage banking operations, net 2,854 2,664 5,783 5,076
Gain (loss) on sale:
Investments, mortgage-backed securities and loans 5 9
Land held for development (30) (110)
Office properties and equipment (4) 32
Provision for losses on real estate held for sale (15) (9) (145) (18)
Other 545 584 1,317 1,091
------- ------- ------- -------
Total non-interest income 8,500 7,370 16,765 13,973
------- ------- ------- -------
NON-INTEREST EXPENSES:
Salaries and benefits 6,745 6,800 13,107 13,251
Occupancy and equipment 3,532 3,278 6,950 6,487
Amortization of cost in excess of fair value of
net assets acquired 725 725 1,450 1,450
SAIF recapitalization charge 10,293 10,293
FDIC premiums and OTS assessments 373 1,025 737 2,030
Marketing and advertising 484 551 1,120 1,023
Franchise Tax 411 396 822 793
Other 3,003 2,662 5,907 5,130
------- ------- ------- -------
Total non-interest expenses 15,273 25,730 30,093 40,457
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES 10,138 (2,547) 19,774 4,699
Income tax provision (benefit) 3,135 (661) 6,104 1,549
------- ------- ------- -------
NET INCOME (LOSS) $ 7,003 $(1,886) $13,670 $ 3,150
======= ======= ======= =======
EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARES $ 0.78 $ (0.21) $ 1.53 $ 0.36
======= ======= ======= =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 2
<PAGE> 5
CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For The Six Months Ended September 30, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
ADDITIONAL NET UNREALIZED OTHER TOTAL
OUTSTANDING COMMON PAID-IN RETAINED GAIN(LOSS) ON SECURITIES EQUITY STOCKHOLDERS'
(unaudited) SHARES STOCK CAPITAL EARNINGS AVAILABLE FOR SALE ADJUSTMENTS EQUITY
----------- ------ ---------- -------- ------------------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1997 8,613,086 $ 86 $ 56,492 $ 136,634 ($7,204) ($21) $ 185,987
Net income 13,670 13,670
Dividends paid (1,467) (1,467)
Change in net unrealized
gain (loss) on securities
available for sale 8,154 8,154
Stock options exercised 43,112 1 351 352
Restricted stock awards-
compensation 17 17
---------- ---- ---------- -------- ------- ---- --------
BALANCE, SEPT. 30, 1997 8,656,198 $ 87 $ 56,843 $ 148,837 $ 950 ($4) $ 206,713
========== ==== ========= ======== ======= ==== ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 3
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended September 30, 1997 and 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
----------------
(Unaudited) 1997 1996
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,670 $ 3,150
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,786 1,439
Amortization of intangibles 3,036 1,320
Amortization of deferred loan fees (7) (352)
(Increase) decrease in loans held for sale (35,868) 42,880
FHLB stock dividends (1,584) (561)
Loss on sale of earning assets 828 1,742
Provision for loan and REO losses 2,195 1,518
ESOP and RRP & Other 17 62
Increase in accrued interest receivable (1,756) (1,920)
(Increase) decrease in other assets (2,680) 18,258
Increase in other liabilities, net 314 5,195
-------- -------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (20,049) 72,731
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Securities held to maturity:
Purchased (46,072) (55,730)
Matured/principal collected 39,569 21,247
Securities available for sale:
Purchased (139,018)
Principal collected 67,129 59,247
Loans held for investment:
Originated (542,562) (260,253)
Principal collected 171,247 156,605
Purchased and originated mortgage servicing rights (10,131) (3,060)
Purchases/Redemptions of FHLB stock (3,347) (4,892)
Proceeds from real estate sold 2,666 1,105
Real estate acquired for development and sale (384) (95)
Office properties and equipment, net (3,184) (605)
-------- -------
NET CASH USED IN INVESTING ACTIVITIES (325,069) (225,449)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 123,582 (87,423)
FHLB advances:
Borrowings 553,000 749,200
Payments (336,854) (627,598)
Reverse repurchase agreements:
Borrowings 1,195 112,726
Payments (8,257) (2,028)
Other borrwings:
Payments (813) (235)
Common stock issuances 352 454
Cash dividends paid (1,467) (853)
-------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 330,738 144,243
-------- -------
NET DECREASE IN CASH AND EQUIVALENTS (14,380) (8,475)
Cash and equivalents, beginning of year 54,319 52,724
-------- -------
CASH AND EQUIVALENTS, END OF YEAR $ 39,939 $ 44,249
======== =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 71,086 $ 58,059
======== =======
Income taxes paid, net $ 250 $ 3,950
======== =======
SUPPLEMENTAL OF NON-CASH INVESTING ACTIVITIES:
Transfer of loans to foreclosed real estate $ 864 $ 2,016
======== =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 4
<PAGE> 7
CITFED BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended September 30, 1997 and 1996
(Unaudited)
1. BASIS OF PRESENTATION
The foregoing consolidated financial statements as of September 30, 1997
and 1996, and for the three and six months ended September 30, 1997 and 1996
are unaudited. However, in the opinion of management, all adjustments (which
consist of normal recurring accruals) necessary for a fair presentation of the
consolidated financial statements have been included. Results for any interim
period are not necessarily indicative of results to be expected for the year.
The interim consolidated financial statements include the accounts of CitFed
Bancorp, Inc. (the "Corporation"), its subsidiary, Citizens Federal Bank,
F.S.B. (the "Bank" or "Citizens Federal") and the Bank's subsidiaries.
2. COMMITMENTS AND CONTINGENCIES
At September 30, 1997, the Bank had outstanding commitments to originate
and purchase loans aggregating approximately $84.0 million. The commitments
extend over varying periods of time with the majority being disbursed within
thirty days. Loan commitments with interest rates established with the
borrower amounted to $78.3 million; the remainder are at floating rates. The
Bank had outstanding mandatory and optional forward commitments to sell loans
and mortgage-backed securities of $122.0 million at September 30, 1997.
The Corporation and its subsidiaries are defendants in certain lawsuits
arising in the ordinary course of business. Management, after review with its
legal counsel, is of the opinion that the resolution of these legal matters
will not have a material adverse effect on the Corporation's financial position
or results of operations.
3. SUBSIDIARY OPERATIONS
CitFed Bancorp has four subsidiaries:
<TABLE>
<S> <C>
Citizens Federal Bank, F.S.B. CitFed Mortgage Corporation of America
(federal savings bank) (mortgage banking)
C. F. Property Management Company Dayton Financial Services Corporation
(which does business as CitFed Investment (residential land development)
Group) (mutual fund and insurance sales)
</TABLE>
<TABLE>
<CAPTION>
Earnings (losses): THREE MONTHS ENDED SIX MONTHS ENDED
(In thousands) SEPT. 30, SEPT. 30
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Citizens Federal Bank $ 6,414 ($2,221) $ 12,589 $ 2,485
CitFed Mortgage 927 752 1,766 1,488
CitFed Investment Group 97 78 145 175
Dayton Financial 0 (45) 0 (103)
CitFed Bancorp (including consolidating
entries) (435) (450) (830) (895)
------- ------- ------- -------
NET INCOME (LOSS) $ 7,003 ($1,886) $13,670 $ 3,150
======= ======= ======= =======
</TABLE>
Page 5
<PAGE> 8
4. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings per common and common equivalent share for the three and six
months ended September 30, 1997 and 1996 are divided by the weighted average
number of common shares and common share equivalents outstanding during the
period. Average common and common stock equivalents outstanding for the three
month period ended September 30, 1997 and 1996 were 8,946,472 and 8,858,876,
respectively. Average common and common stock equivalents outstanding for the
six month period ended September 30, 1997 and 1996 were 8,945,032 and
8,854,845, respectively. Stock options are considered common share
equivalents.
5. DIVIDEND
The Board of Directors declared on October 17, 1997, a 50% stock dividend,
which will have the effect of a 3-for-2 stock split payable November 28, 1997,
to stockholders of record on November 14, 1997. The Corporation also declared
on October 17, 1997, a post-split quarterly dividend of $0.09 per share payable
December 1, 1997 to stockholders of record on November 14, 1997. The total
amount of the dividend will be approximately $1,169,000.
6. CURRENT ACCOUNTING ISSUES
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share"
("SFAS 128"). SFAS 128 provides computation, presentation, and disclosure
requirements for earnings per share. The current presentation of primary and
fully diluted earnings per share will be replaced with basic and diluted
earnings per share. The Statement is effective for financial statements for
both interim and annual periods ending after December 15, 1997, and earlier
application is not permitted. Although basic earnings per share under SFAS 128
excludes dilutive securities, management expects that the new basic earnings
per share will not be significantly different from primary earnings per share,
which includes the effect of potentially dilutive securities. Diluted earnings
per share, as required by SFAS 128, is not expected to materially change from
the current fully diluted earnings per share presentation.
In connection with SFAS 128, and FASB also issued SFAS No. 129,
"Disclosure of Information about Capital Structure" ("SFAS 129"). While SFAS
128 applies only to public companies, SFAS 129 is applicable to both public and
nonpublic companies. This statement is not expected to have a material impact
on disclosures currently made by the Corporation.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which will require disclosure in the financial statements of all the
changes in equity during a period from transactions and other events and
circumstances from non-owner sources. Items included in comprehensive income
will include separate classification of items based upon their nature. The
Statement requires that comparative information for prior years to be restated.
SFAS No. 130 is effective for financial statements for fiscal years beginning
after December 15, 1997. The disclosure impact on the Corporation's financial
statements has not yet been determined.
Page 6
<PAGE> 9
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," which will require new segment
information in public companies' annual financial statements. Additionally,
selected information will be required in interim financial statements. The
Statement requires that comparative information for prior years be restated.
SFAS No. 131 is effective for financial statements for periods beginning after
December 15, 1997. The effect on the Corporation's financial statements has
not yet been determined.
7. RECLASSIFICATIONS
Certain amounts for prior periods have been reclassified for comparative
purposes to conform with the current year's presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Corporation is a Delaware corporation organized on January 25, 1991
for the purpose of acquiring all of the outstanding capital stock of Citizens
Federal which was issued on January 29, 1992. Citizens Federal is a
federally-chartered stock savings bank headquartered in Dayton, Ohio. The Bank
has 35 offices in a seven county area that comprises the greater Dayton area.
In addition, through the Bank's wholly owned subsidiary, CitFed Mortgage
Corporation of America (the "CitFed Mortgage"), it operates fifteen mortgage
loan origination offices in Dayton, Columbus and Cincinnati, Ohio; Indiana,
Kentucky, Virginia and North Carolina.
FORWARD-LOOKING STATEMENT
When used in this Quarterly Report on Form 10-Q, the words or phrases
"will likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks
and uncertainties - including, changes in economic conditions in the
Corporation's market area, changes in policies by regulatory agencies,
fluctuations in interest rates, demand for loans in the Corporation's market
area and competition, that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The
Corporation wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The
Corporation wishes to advise readers that the factors listed above could affect
the Corporation's financial performance and could cause the Corporation's
actual results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current statements.
The Corporation does not undertake -- and specifically disclaims any
obligation -- to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
Page 7
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RESULTS OF OPERATIONS
Citizens Federal's results of operations depend primarily upon the level
of net interest income, which is the difference between the interest income
earned on its interest-earning assets such as loans and investments, and the
costs of the Bank's interest-bearing liabilities, primarily deposits and
borrowings. Results of operations are also dependent upon the level of the
Bank's non-interest income, including fee income and service charges, and
affected by the level of its non-interest expenses, including its provision for
loan losses and general administrative expenses. Net interest income depends
upon the volume of interest-earning assets and interest-bearing liabilities and
the interest rate earned or paid on them, respectively.
Net Income: For the three months ended September 30, 1997, the
Corporation had net income of $7.0 million compared to a net loss of $1.9
million for the three months ended September 30, 1996. The loss in the prior
year was attributable to a one-time charge of $7.2 million (net of tax) for the
recapitalization of the Savings Association Insurance Fund ("SAIF") resulting
from legislation enacted on September 30, 1996. Net income without the SAIF
recapitalization for the three month period ended September 30, 1996 would have
been $5.3 million as compared to $7.0 million for the three month period ended
September 30, 1997, resulting in an increase of $1.7 million, or 31.7% during
the September 30, 1997 period.
Net income for the six months ended September 30, 1997 was $13.7 million
compared to $3.2 million for the same period a year ago. Without the SAIF
recapitalization charge, net income for the six months ended September 30, 1996
would have been $10.4 million, resulting in an increase of $3.3 million, or
32.0% during the September 30, 1997 period.
Interest Income: Total interest income increased $7.7 million, or 16.3%
from $47.6 million for the second quarter of fiscal 1997 to $55.3 million for
the second quarter of fiscal 1998. Of this increase, $8.5 million resulted
from an increase of $444.1 million in the average balance of interest-earning
assets, primarily loans receivable. The offsetting $747,000 decrease resulted
from a 7 basis point decrease in the weighted average yield on interest-earning
assets.
Total interest income increased $15.5 million, or 16.9% from $91.8 million
for the six months ended September 30, 1996, to $107.3 million for the six
months ended September 30, 1997. The increase in total interest income is
primarily due to a $419.8 million increase in the average balance of
interest-earning assets.
Page 8
<PAGE> 11
Management decided, throughout fiscal 1997 and 1998, to grow the Bank's
assets by increasing its permanent portfolio of consumer and one- to
four-family loans held for investment. As a result, the average balance of
loans increased $325.4 million from September 1996 to September 1997. In
addition, purchases during this same period have resulted in an increase in the
average balance of mortgage-backed securities and investment securities of
$64.4 million and $20.4 million, respectively.
Interest Expense: Total interest expense increased $7.2 million, or
23.6% from $30.7 million for the second quarter of fiscal 1997 to $37.9 million
for the second quarter of fiscal 1998. Of this increase, $5.9 million was the
result of an increase of $422.1 million in the average balance of
interest-bearing liabilities. The remaining $1.3 million increase related to a
29 basis point increase in the cost of funds.
Total interest expense increased $13.1 million, or 22.1% from $59.1
million for the six months ended September 30, 1996, to $72.2 million for the
six months ended September 30, 1997. Of this increase $11.5 million was the
result of a $396.3 million increase in the average balance of interest-bearing
liabilities. The remaining $1.6 million increase related to a 24 basis point
increase in the cost of funds.
The Bank's average deposits increased $196.8 million for the second
quarter of fiscal 1998 as compared to the second quarter of fiscal 1997
primarily due to a $202.4 million increase in retail certificates of deposit
and demand deposits partially offset by a $14.6 million decrease in savings
deposits and money market deposits. In addition, FHLB advances and securities
sold under agreements to repurchase increased $138.0 million and $87.7 million,
respectively. These increases were necessary to fund the asset growth planned
by management and rates on these liabilities exceeded the average rate paid on
interest-bearing liabilities.
Rate/Volume Analysis. The following table presents the dollar amount of
changes in interest income and interest expense for major components of
interest-earning assets and interest-bearing liabilities. 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 the change due to rate and the change due to volume.
Page 9
<PAGE> 12
<TABLE>
<CAPTION>
RATE/VOLUME ANALYSIS
(In Thousands) 3 Months Ended Sept. 30,
|---------------- 1997 vs 1996 ---------------------|
Total
Increase(Decrease) Due to Increase
Volume Rate (Decrease)
------ ---- ---------
<S> <C> <C> <C>
Interest-Earning Assets:
Loans receivable $ 8,014 $ (670) $ 7,344
Mortgage-backed securities 131 (152) (21)
Investment securities 231 (46) 185
Other 114 121 235
------- ------ -------
Total interest-earning assets $ 8,490 $ (747) $ 7,743
======= ====== -------
Interest-Bearing Liabilities:
Deposits:
NOW Accounts 44 89 133
Savings Deposits (22) (10) (32)
Money Market Deposits (95) 26 (69)
Certificates of Deposit 2,679 194 2,873
FHLB advances 2,001 790 2,791
Securities sold under agreement
to repurchase 1,283 272 1,555
Other Borrowings (8) 2 (6)
------- ------ -------
Total interest-bearing liabilities $ 5,882 $1,363 7,245
======= ====== -------
Net interest income $ 498
=======
</TABLE>
<TABLE>
RATE/VOLUME ANALYSIS
(In Thousands) 6 Months Ended Sept. 30,
|---------------- 1997 vs 1996 ---------------------|
Total
Increase(Decrease) Due to Increase
Volume Rate (Decrease)
------ ----- ----------
Interest-Earning Assets:
<S> <C> <C> <C>
Loans receivable $12,779 $ (690) $12,089
Mortgage-backed securities 2,148 212 2,360
Investment securities 658 (44) 614
Other 229 244 473
------- ------ -------
Total interest-earning assets $15,814 $ (278) $15,536
======= ====== -------
Interest-Bearing Liabilities:
Deposits:
NOW Accounts 61 (65) (4)
Savings Deposits (27) (21) (48)
Money Market Deposits (163) 51 (112)
Certificates of Deposit 4,023 0 4,023
FHLB advances 3,885 1,211 5,096
Securities sold under agreement
to repurchase 3,684 455 4,139
Other Borrowings (13) (14) (27)
------- ------- -------
Total interest-bearing liabilities $11,450 $ 1,617 13,067
======= ======= -------
Net interest income $ 2,469
=======
</TABLE>
Net Interest Margin. The following table presents, 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, and the resultant rates and
the net interest margin. No tax equivalent adjustments have been made. All
average balances are daily average balances.
The ratio of average interest-earning assets to average interest-bearing
liabilities increased to 102.7% for the six months ended September 30, 1997, as
compared to 102.2% for the same period last year. Although the weighted
average interest rate increased for both interest-earning assets and
interest-bearing liabilities, the increase was greater for interest-bearing
liabilities resulting in a decreased interest spread.
Page 10
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<TABLE>
<CAPTION>
Three months ended September 30,
1997 1996
--------------------------------------------------------------------------
Average Interest Yield/ Average Interest Yield/
Outstanding Earned/ Weighted Outstanding Earned/ Weighted
Balance Paid Rate Balance Paid Rate
----------- ---- -------- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Interest-Earning Assets:
Loans receivable (1) $ 1,953,572 $ 37,976 7.78% $ 1,540,967 $ 30,632 7.95%
Mortgage-backed securities 749,205 12,489 6.67 741,206 12,510 6.75
Investment securities 241,293 3,941 6.53 227,262 3,756 6.61
Other 68,908 896 5.20 59,412 661 4.45
----------- -------- ------- ----------- -------- ------
Total interest-earning assets $ 3,012,978 $ 55,302 7.34% $ 2,568,847 $ 47,559 7.41%
=========== -------- ------- =========== -------- ------
Interest-Bearing Liabilities:
Deposits:
NOW account $ 184,613 $ 991 2.15% $ 175,660 $ 858 1.95%
Demand deposits 140,425 0 0.00 112,529 0 0.00
Savings deposits 207,747 1,276 2.46 211,369 1,308 2.48
Money Market deposits 120,571 1,042 3.46 131,543 1,111 3.38
Certificates of deposit 1,129,676 17,334 6.14 955,160 14,461 6.06
FHLB advances 849,303 12,529 5.90 711,268 9,738 5.48
Securities sold under agreements
to repurchase 263,291 3,918 5.95 175,613 2,363 5.38
Other borrowings 40,773 851 8.35 41,167 857 8.33
----------- --------- ------- ----------- -------- ------
Total interest-bearing liabilities $ 2,936,399 37,941 5.17% $ 2,514,309 30,696 4.88%
=========== --------- ------- =========== -------- ------
Net interest income; interest
rate spread $ 17,361 2.17% $ 16,863 2.53%
======== ====== ======== ======
Net interest margin (2) 2.30% 2.63%
====== ======
Average interest-earning assets to
average interest-bearing liabilities 102.61% 102.17%
======== =======
Six months ended September 30,
1997 1996
---------------------------- -------------------------------
Interest-Earning Assets:
Loans receivable (1) $ 1,847,082 $ 72,256 7.82% $ 1,521,698 $60,167 7.91%
Mortgage-backed securities 764,501 25,536 6.68 700,107 23,176 6.62
Investment securities 238,423 7,780 6.53 218,032 7,166 6.57
Other 67,404 1,742 5.17 57,754 1,269 4.39
----------- -------- ---- ---------- ------- ----
Total interest-earning assets $ 2,917,410 $107,314 7.36% $ 2,497,591 $91,778 7.35%
=========== -------- ---- ========== ------- ----
Interest-Bearing Liabilities:
Deposits:
NOW account $ 183,522 $ 1,850 2.02% $ 177,341 $ 1,854 2.09%
Demand deposits 128,598 0 0.00 121,577 0 0.00
Savings deposits 209,857 2,573 2.45 212,095 2,621 2.47
Money Market deposits 122,143 2,090 3.42 131,671 2,202 3.34
Certificates of deposit 1,095,986 33,121 6.04 963,171 29,098 6.04
FHLB advances 793,983 23,041 5.80 658,304 17,945 5.45
Securities sold under agreements
to repurchase 264,738 7,791 5.89 138,013 3,652 5.29
Other borrowings 40,867 1,696 8.30 41,188 1,723 8.37
----------- -------- ---- ---------- ------- ----
Total interest-bearing liabilities $ 2,839,694 72,162 5.08% $ 2,443,360 59,095 4.84%
----------- -------- ---- ---------- ------- ----
Net interest income; interest
rate spread $ 35,152 2.28% 32,683 2.51%
======= ---- ------- ----
Net interest margin (2) 2.41% 2.62%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 102.74% 102.22%
====== ======
</TABLE>
(1) Average balances for loans receivable include average balances for
non-accrual loans.
(2) Net interest margin is net interest income divided by average
interest-earning assets.
Page 11
<PAGE> 14
Provision for Loan Losses. The Bank's provision for loan losses was $2.1
million for the six months ended September 30, 1997, compared to a provision of
$1.5 million for the six months ended September 30, 1996. Both provisions
reflect the Bank's continuing evaluation of its loan portfolio, the growth of
the portfolio, and the effect thereon from general economic conditions.
Management's estimate of the adequacy of its general allowances for loan losses
is based upon an analysis of the Bank's loan portfolio including such factors
as prior loan loss experiences, economic conditions affecting the real estate
market, regulatory considerations and other matters.
The following table sets forth an analysis of the Bank's allowance for
loan losses at the dates indicated.
<TABLE>
<CAPTION>
Six Months Ended
September 30,
1997 1996
----- ----
<S> <C> <C>
(Dollars in thousands)
Balance at beginning of period $ 16,823 $ 16,330
--------- ---------
Charge-offs:
One-to four-family real estate (142) (125)
Other real estate 0 (6)
Consumer (1,164) (167)
Commercial business (32) (20)
--------- ---------
Total charge-offs (1,338) (318)
--------- ---------
Recoveries:
One-to four-family real estate 21 38
Other real estate 18 201
Consumer 516 40
Commercial business 13 20
--------- ---------
Total recoveries 568 299
--------- ---------
Net charge-offs (770) (19)
Provisions 2,050 1,500
--------- ---------
Balance at end of period $ 18,103 $ 17,811
========= =========
Ratio of net charge-offs during the period
to average loans outstanding during the period (0.04%) (0.00%)
========= =========
Ratio of allowance to non-performing loans
at end of period 210.75% 90.09%
========= =========
</TABLE>
Page 12
<PAGE> 15
The ratio of the allowance to non-performing loans increased to 210.75% at
September 30, 1997, compared to 90.09% for the same period one year ago
primarily because of the decrease in non-performing loans from $19.8 million to
$8.6 million. This decrease was primarily due to one loan for $9.3 million,
secured by two commercial office buildings, being repaid during fiscal 1997 and
the Bank charging approximately $1.8 million against its loan loss reserves in
the third quarter of fiscal 1997. Management believes that the relationship of
the allowance to total loans and to non-performing loans is adequate based on
all information currently available. See "Asset Quality."
Non-Interest Income: Non-interest income for the three months ended
September 30, 1997, totaled $8.5 million as compared to $7.4 million for the
same period a year ago, an increase of $1.1 million, or 15.3%. Non-interest
income for the six months ended September 30, 1997, totaled $16.8 million as
compared to $14.0 million for the same period a year ago, an increase of $2.8
million, or 20.0%.
Consumer banking fees and charges increased 28.8% to $4.2 million for the
three months ended September 30, 1997, up from $3.3 million for the same period
last year. This increase continued to reflect the benefits of increases in the
number of checking accounts and fees associated with these accounts and
increased fees associated with consumer and commercial loan activities.
Consumer banking fees and charges increased 33.2% to $8.2 million for the six
months ended September 30, 1997, up from $6.1 million for the same period last
year.
Although, trust and investment services fee income for the second quarter
of fiscal 1998 declined slightly to $862,000 compared to $865,000 for the
second quarter of fiscal 1997, administered trust assets increased to $442.7
million at September 30, 1997, compared with $412.2 million at September 30,
1996. Trust and investment service fee income for the six months ended
September 30, 1997, declined 7.6% to $1.6 million from $1.8 million for the
same period a year ago. The decline in fee income primarily resulted from
fewer sales of mutual funds and insurance products sold through the Bank's
retail branches by CitFed Investment Group.
Mortgage banking fee income increased by 7.1% in the second quarter to
$2.9 million, compared to $2.7 million for the same period a year ago. This
increase was due to increases in the Mortgage Company's mortgage loan servicing
portfolio which was $6.2 billion at September 30, 1997, with $4.3 billion of
mortgage loans being serviced for other investors, compared to $4.5 billion at
September 30, 1996, with $3.0 billion of mortgage loans being serviced for
other investors. The growth in the mortgage servicing portfolio was mainly a
result of bulk purchases of mortgage servicing rights during the previous 12
months. Mortgage loan closings totaled $381.1 million for the quarter ended
September 30, 1997, compared to $164.3 million for the quarter ended September
30, 1996, an increase of 132%.
Page 13
<PAGE> 16
Non-Interest Expenses: Non-interest expenses for the three months ended
September 30, 1997, were $15.3 million, as compared to $15.4 million for the
three months ended September 30, 1996, without the one-time SAIF
recapitalization charge of $10.3 million. See "Regulatory Development"
herein.
Non-interest expenses for the six months ended September 30, 1997 were
$30.1 million compared to $30.2 million without the SAIF recapitalization
charge, for the six months ended September 30, 1996.
Income Tax Provision. The Bank's income tax provision for the six months
ended September 30, 1997, was 30.9%, compared to 33.0% for the six months ended
September 30, 1996.
ASSET QUALITY
Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Bank's loan portfolio as of the
dates indicated below.
<TABLE>
<CAPTION>
September 30, March 31,
1997 1997
------------ ----------
<S> <C> <C>
(Dollars in thousands)
Non-Performing Assets
Non-accruing loans:
One- to four-family $ 6,860 $ 6,140
Multi-family and commercial real estate 1,393 550
Consumer 198 207
Commercial business 139 0
------- -------
Total 8,590 6,897
------- -------
Foreclosed assets:
One- to four-family 2,672 3,452
Multi-family and commercial real estate 2,024 2,786
------- -------
Total 4,696 6,238
------- -------
Total non-performing assets $13,286 $13,135
======= =======
Non-performing loans to total loans 0.43% 0.42%
==== ====
Non-performing assets to total assets 0.40% 0.45%
==== ====
</TABLE>
The $151,000 increase in non-performing assets from March 31, 1997 to
September 30, 1997, was the result of several factors. Non-accruing one-to
four-family mortgage loans increased $720,000 during the period. Fifty-six
loans totaling $3.7 million were placed on non-accrual status, 9 loans totaling
$898,000 were transferred to foreclosed assets, 15 loans totaling $884,000 were
returned to accruing status and 14 loans totaling $1.2 million were paid off.
Page 14
<PAGE> 17
Non-accruing multi-family and commercial real estate loans increased
$843,000 for the period. Eight loans for $1.6 million were added to
non-accrual status, two loans totaling $205,000 were paid in full and one loan
for $530,000 was returned to accruing status.
Foreclosed assets decreased $1.5 million for the period. Nine residential
properties totaling $864,000 (net of $34,000 in loss reserves) were added, and
sixteen properties totaling $2.0 million were sold. Residential construction
costs of $384,000 were incurred during the six months. Four commercial
properties totaling $773,000 were sold. The reserve for foreclosed assets
decreased by $11,000 from a provision of $145,000, offset by net charge-offs of
$156,000.
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY--The Corporation conducts its business through its subsidiary,
Citizens Federal and Citizens Federal's subsidiaries. The main source of funds
for the Corporation are dividends from the Bank. The Bank meets the OTS
regulatory capital requirements that would allow the Bank to declare and pay
capital distributions to the Corporation. The Corporation is not subject to
any OTS regulatory restrictions on the payment of dividends to its
stockholders. The Board of Directors of the Corporation declared on October
17, 1997, a three-for-two stock split in the form of a stock dividend and a
cash dividend on its common stock of nine cents ($0.09) per share. The stock
dividend will be paid on November 28, 1997 to stockholders of record on
November 14, 1997. The cash dividend will be based upon the post-split shares
and will be paid on December 1, 1997 to stockholders of record on November 14,
1997.
The Bank's principal sources of funds include deposits, advances from the
FHLB, reverse repurchase agreements, repayments on loans and mortgage-backed
securities, maturities of investment securities, proceeds from the sale of
loans, mortgage-backed and investment securities available for sale, funds
provided by operations and capital invested by the Corporation. Investment
maturities and scheduled amortization of loans and mortgage-backed securities
are generally a predictable source of funds. Deposit flows and mortgage
prepayments are influenced by the general level of interest rates, economic
conditions, competition and the restructuring of the thrift industry.
Management also considers the Corporation's interest sensitivity "gap" when
considering alternative sources of funds. The one year interest rate
sensitivity "gap" is the difference between interest-earning assets and
interest-bearing liabilities maturing or repricing within one year. The
Corporation mitigates its exposure to interest rate risk by striving to
maintain a neutral "gap" between the maturities of its interest-earning assets
and interest-bearing liabilities. This strategy results in a more stabilized
net interest margin in periods of either rising or falling interest rates. At
September 30, 1997, the Corporation's one-year gap was a negative 13.04%.
The cumulative interest rate sensitivity gap reflects the Corporation's
sensitivity to interest rate changes over time. It is a static indicator, and
does not attempt to predict the net interest income of a dynamic business in a
rapidly changing environment. Significant adjustments are made when the
interest rate outlook changes. Generally, the Corporation's negative one-year
gap would mean that 13.04% of the Corporation's liabilities will reprice within
one year without a corresponding repricing of the assets funded by them.
Page 15
<PAGE> 18
The Bank is required to maintain minimum levels of liquid assets as
defined by OTS regulations. This requirement, which may vary at the discretion
of the OTS depending upon economic conditions and deposit flows, is based upon
a percentage of deposits and short-term borrowings. The required ratio is
currently 5.0%. While the Bank's liquidity ratio varies from time to time, it
has generally maintained liquid assets substantially in excess of the minimum
requirement. The Bank's liquid asset ratio was 13.11% at September 30, 1997.
Liquidity management is both a daily and long-term responsibility of
management. The Bank adjusts its investments in liquid assets based upon
management's assessment of (i) expected loan demand, (ii) the projected amount
of loans to be originated by the mortgage banking subsidiary and held for
re-sale, (iii) expected deposit flows, (iv) yields available on
interest-earning deposits, and (v) the objective of its asset/liability
management program. Excess liquidity is invested generally in interest-earning
overnight deposits and other short-term government and agency obligations. If
Citizens Federal requires funds beyond its ability to generate them internally,
the Bank has additional borrowing capacity with the FHLB and collateral
eligible for reverse repurchase agreements.
The Bank anticipates that it will have sufficient funds available to meet
current loan commitments. At September 30, 1997, the Bank had commitments to
purchase from CitFed Mortgage loans totaling $60.3 million. CitFed Mortgage
had commitments to fund loans of $84.0 million and to sell loans of $122.0
million.
Page 16
<PAGE> 19
CAPITAL--Savings institutions insured by the Federal Deposit Insurance
Corporation are required to meet three regulatory capital requirements. If a
requirement is not met, regulatory authorities may take legal or administrative
actions, including restrictions on growth or operations or, in extreme cases,
seizure. Institutions not in compliance may apply for an exemption from the
requirements and submit a recapitalization plan. The following table
demonstrates the Bank's compliance with each of these requirements as of
September 30, 1997:
<TABLE>
<CAPTION>
---------------
(Dollars in thousands) Amount %(1)
---------------
<S> <C> <C>
Tangible Capital:
Bank's $188,251 5.78%
Requirement 48,860 1.50
-------- ----
Excess $139,391 4.28%
======== ====
Core Capital
Bank's $188,251 5.78%
Requirement 97,720 3.00
-------- ----
Excess $ 90,531 2.78%
======== ====
Risk-Based Capital:
Bank's $205,457 12.77%
Requirement 128,762 8.00
-------- -----
Excess $ 76,695 4.77%
======== =====
</TABLE>
(1) Tangible and core capital levels are shown as a percentage of total
adjusted assets, risk-based capital levels are a percentage of
risk-weighted assets.
A reconciliation of the Corporation's GAAP Capital is as follows:
<TABLE>
<CAPTION>
(Dollars in thousands) Sept. 30, 1997
--------------
<S> <C>
Bank's stockholder's equity $ 207,912
Less additional capital contributed to
Bank by the Corporation (22,000)
Plus Corporation's stockholders'
equity not available for regulatory capital 20,801
----------
Stockholders' equity of the Corporation $ 206,713
==========
</TABLE>
Minimum capital requirements, as required by the Federal Deposit Insurance
Corporation Improvement Act of 1991, to determine whether an institution is
well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, or critically undercapitalized became effective December 19,
1992. Well capitalized institutions are defined as having core capital of at
least 5.0%, core capital to risk-weighted assets of at least 6% and risk-based
capital of at least 10.0%. The Bank's ratios at September 30, 1997 were 5.78%,
11.70% and 12.77%, respectively. As a result, the Bank meets the capital
requirements of a well capitalized institution.
Page 17
<PAGE> 20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In August 1995, the Corporation filed suit against the United
States Government for reneging on contracts with the Bank
regarding the treatment of supervisory goodwill as capital.
Although, the U. S. Supreme Court recently decided for the
plaintiff in three pending supervisory goodwill cases involving
other entities it is uncertain as to how this will affect the
Corporation's claim.
Item 4. Submission of Matters to a Vote of Security Holders
a) The Annual Meeting of stockholders was held on July 25, 1997.
b) The matters approved by stockholders at the annual meeting and the
number of votes cast for, against or withheld (as well as the
number of abstentions and broker non-votes) as to each matter are
set forth below:
Election of the following Directors
for a three-year term: For Withheld
--------- ---------
Larry R. Ritter 7,447,923 67,715
James E. Walsh 7,449,695 65,943
Leon A. Whitney 7,449,858 65,780
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit - Index
Exhibit Number Description Page No.
11 Statement regarding computation 21
of per share earnings
27 Financial Data Schedule 22
b) Report on Form 8-K - There were no reports on Form 8-K
filed during the three months ended September 30, 1997.
Page 18
<PAGE> 21
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.
CITFED BANCORP, INC.
(Registrant)
Date 11/12/97 By /s/ Jerry L. Kirby
------------------------ --------------------------
Jerry L. Kirby
Chairman of the Board,
President and Chief
Executive Officer
(Duly Authorized Representative)
Date 11/12/97 By /s/ William M. Vichich
------------------------ --------------------------
William M. Vichich
Executive Vice President,
Chief Operating Officer and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
Page 19
<PAGE> 22
EXHIBIT INDEX
Exhibit Number Description Page No.
11 Statement regarding computation 21
of per share earnings
27 Financial Data Schedule 22
Page 20
<PAGE> 1
EXHIBIT 11
CITFED BANCORP, INC.
Computation of Per Share Earnings
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
For the Three For the Three For the Six For the Six
Months Ended Months Ended Months Ended Months Ended
Sept. 30, 1997 Sept. 30, 1996 Sept. 30, 1997 Sept. 30, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Computation of Primary Earnings Per Share:
Weighted average number of common
shares outstanding 8,637,463 8,556,924 8,637,906 8,544,855
Add common stock equivalents for shares
issuable under the Stock Option Plan (1) 309,009 301,952 307,126 309,990
---------- --------- --------- ----------
Weighted average number of shares
outstanding adjusted for common
stock equivalents 8,946,472 8,858,876 8,945,032 8,854,845
========= ========= ========= ==========
Net income (loss) $ 7,003 $ (1,886) $ 13,670 $ 3,150
========= ========= ========= ==========
Earnings (loss) per common and common
equivalent share $ 0.78 $ (0.21) $ 1.53 $ 0.36
========= ========= ========= ==========
</TABLE>
(1) Additional shares issuable were derived under the "treasury stock method"
using average market price during the period or the end of period close
price, whichever is higher.
Page 21
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1997
<CASH> 13,548
<INT-BEARING-DEPOSITS> 26,391
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 729,220
<INVESTMENTS-CARRYING> 241,659
<INVESTMENTS-MARKET> 243,036
<LOANS> 2,077,405
<ALLOWANCE> 18,103
<TOTAL-ASSETS> 3,294,554
<DEPOSITS> 1,807,580
<SHORT-TERM> 0
<LIABILITIES-OTHER> 39,135
<LONG-TERM> 1,241,126
0
0
<COMMON> 87
<OTHER-SE> 206,626
<TOTAL-LIABILITIES-AND-EQUITY> 3,294,554
<INTEREST-LOAN> 37,976
<INTEREST-INVEST> 16,430
<INTEREST-OTHER> 896
<INTEREST-TOTAL> 55,302
<INTEREST-DEPOSIT> 20,643
<INTEREST-EXPENSE> 17,298
<INTEREST-INCOME-NET> 17,361
<LOAN-LOSSES> 450
<SECURITIES-GAINS> 5
<EXPENSE-OTHER> 15,273
<INCOME-PRETAX> 10,138
<INCOME-PRE-EXTRAORDINARY> 7,003
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,003
<EPS-PRIMARY> 0.78
<EPS-DILUTED> 0.78
<YIELD-ACTUAL> 7.20
<LOANS-NON> 8,590
<LOANS-PAST> 0
<LOANS-TROUBLED> 11,108
<LOANS-PROBLEM> 21,164
<ALLOWANCE-OPEN> 16,823
<CHARGE-OFFS> 555
<RECOVERIES> 146
<ALLOWANCE-CLOSE> 18,103
<ALLOWANCE-DOMESTIC> 18,103
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
