<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 December 31, 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)
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)
(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 January 31, 1998
--------------------- ----------------
$ .01 par value 13,067,183
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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 December 31, 1997
and March 31, 1997 1
Consolidated Statements of Operations
for the Three and Nine Months ended
December 31, 1997 and 1996 2
Consolidated Statement of Stockholders'
Equity for the Nine Months ended
December 31, 1997 3
Consolidated Statements of Cash Flows
for the Nine Months ended
December 31, 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
DECEMBER 31, 1997 AND MARCH 31, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
Part 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS DECEMBER 31, MARCH 31,
1997 1997
------------ ---------
(unaudited)
<S> <C> <C>
ASSETS
------
Cash and demand deposits $ 29,048 $ 31,453
Interest-bearing time deposits and cash equivalents 36,041 22,866
------------- -------------
TOTAL CASH AND EQUIVALENTS 65,089 54,319
Securities available for sale 1,140,299 780,862
Securities held to maturity 245,418 235,197
Loans (less allowance for loan losses of $18,182 and $16,823
at December 31, 1997 and March 31, 1997, respectively) 1,700,902 1,638,514
Loans held for sale 89,718 35,443
Accrued interest receivable:
Securities available for sale 6,350 4,301
Securities held to maturity 4,154 3,520
Loans 8,576 8,790
Real estate held for sale, net 3,512 7,156
Federal Home Loan Bank stock, at cost 52,390 42,866
Office properties and equipment, net 20,867 18,322
Cost in excess of fair value of net assets acquired 18,144 20,319
Other assets 104,878 87,660
------------- -------------
TOTAL $ 3,460,297 $ 2,937,269
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Deposits $ 1,852,344 $ 1,683,998
Advances from Federal Home Loan Bank 1,019,576 720,482
Other borrowings 336,633 312,373
Other liabilities 41,879 34,429
------------- -------------
TOTAL LIABILITIES 3,250,432 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; 13,002,811 outstanding 130 86
Additional paid-in capital 57,056 56,492
Retained earnings-substantially restricted 155,059 136,634
Unearned compensation - restricted stock awards (120) (21)
Net unrealized loss on securities available for sale (2,260) (7,204)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 209,865 185,987
------------- -------------
TOTAL $ 3,460,297 $ 2,937,269
============= =============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended December 31, 1997 and 1996
(DOLLARS IN THOUSANDS, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
1997 1996 1997 1996
-------- -------- --------- ---------
INTEREST INCOME: (unaudited)
<S> <C> <C> <C> <C>
Loans $38,611 $31,364 $110,867 $91,531
Securities available for sale 14,463 12,795 39,999 35,971
Securities held to maturity 4,078 3,745 11,858 10,911
Other 1,016 813 2,758 2,082
-------- -------- --------- ---------
Total interest income 58,168 48,717 165,482 140,495
-------- -------- --------- ---------
INTEREST EXPENSE:
Deposits 21,055 17,498 60,689 53,273
Borrowings 18,864 14,200 51,392 37,520
-------- -------- --------- ---------
Total interest expense 39,919 31,698 112,081 90,793
-------- -------- --------- ---------
NET INTEREST INCOME 18,249 17,019 53,401 49,702
Provision for loan losses 650 900 2,700 2,400
-------- -------- --------- ---------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 17,599 16,119 50,701 47,302
-------- -------- --------- ---------
NON-INTEREST INCOME:
Servicing fees and charges:
Consumer banking 4,379 3,494 12,549 9,630
Trust and investment services 854 805 2,485 2,571
Mortgage banking operations, net 3,064 2,706 8,846 7,782
Gain (loss) on sale:
Investments, mortgage-backed securities and loans 55 64
Land held for development (93) (203)
Office properties and equipment 41 41 32
Provision for losses on real estate held for sale (47) (169) (192) (187)
Other 579 743 1,862 1,834
-------- -------- --------- ---------
Total non-interest income 8,925 7,486 25,655 21,459
-------- -------- --------- ---------
NON-INTEREST EXPENSES:
Salaries and benefits 6,995 6,726 20,102 19,977
Occupancy and equipment 3,585 3,276 10,535 9,763
Amortization of cost in excess of fair value of
net assets acquired 725 725 2,175 2,175
FDIC premiums and OTS assessments 383 1,017 1,120 13,340
Marketing and advertising 812 224 1,932 1,247
Franchise Tax 411 396 1,233 1,189
Other 2,772 2,628 8,644 7,758
-------- -------- --------- ---------
Total non-interest expenses 15,683 14,992 45,741 55,449
-------- -------- --------- ---------
INCOME BEFORE INCOME TAXES 10,841 8,613 30,615 13,312
Income tax provision 3,406 2,830 9,510 4,379
-------- -------- --------- ---------
NET INCOME $ 7,435 $ 5,783 $ 21,105 $ 8,933
======== ======== ========= ========
EARNINGS PER COMMON SHARE $ 0.57 $ 0.45 $ 1.63 $ 0.70
======== ======== ========= ========
EARNINGS PER COMMON SHARE - ASSUMING DILUTION $ 0.55 $ 0.43 $ 1.57 $ 0.67
======== ======== ========= ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For The Nine Months Ended December 31, 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
Stock Dividend effective
November 28, 1997 4,306,543 43 (43)
Net income 21,105 21,105
Dividends paid (2,637) (2,637)
Change in net unrealized
loss on securities
available for sale 4,944 4,944
Stock options exercised 78,888 1 408 409
Restricted stock awards-
issuance 4,294 156 (156)
compensation 57 57
--------- --------- ------- --------- --------- -------- -------
BALANCE, DEC. 31, 1997 13,002,811 $130 $57,056 $155,059 ($2,260) ($120) $209,865
========== ========= ======== ========= ========= ========= ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended December 31, 1997 and 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 31,
(Unaudited) 1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 21,105 $ 8,933
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,660 2,003
Amortization of intangibles 5,153 2,266
Amortization of deferred loan fees (47) (393)
(Increase) decrease in loans held for sale (55,757) 37,304
FHLB stock dividends (2,481) (1,889)
Loss on sale of earning assets 1,418 2,110
Provision for loan and REO losses 2,892 2,587
ESOP and RRP & Other 17 94
Increase in accrued interest receivable (2,469) (1,760)
(Increase) decrease in other assets (8,080) 16,599
Increase in other liabilities, net 4,788 8,616
----------- ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (30,801) 76,470
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Securities held to maturity:
Purchased (62,215) (80,741)
Matured/principal collected 51,912 33,653
Securities available for sale:
Purchased (488,239) (244,708)
Sold 26,002
Principal collected 110,417 84,716
Loans held for investment:
Originated (861,968) (364,939)
Sold 509,492
Principal collected 285,845 225,009
Purchased and originated mortgage servicing rights (11,972) (17,223)
Purchases/Redemptions of FHLB stock (7,043) (7,011)
Proceeds from sale of real estate acquired 5,106 1,389
Office properties and equipment, net (5,394) (923)
----------- ----------
NET CASH USED IN INVESTING ACTIVITIES (448,057) (370,778)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 168,345 (42,596)
FHLB advances:
Borrowings 1,376,416 968,200
Payments (1,077,322) (782,335)
Reverse repurchase agreements:
Borrowings 152,545
Payments (123,027)
Other borrowings:
Borrowings (Payments) (5,258) 156,882
Termination of ESOP 1,623
Common stock issuances 565 478
Cash dividends paid (2,636) (1,555)
----------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 489,628 300,697
----------- ----------
NET INCREASE IN CASH AND EQUIVALENTS 10,770 6,389
Cash and equivalents, beginning of year 54,319 52,724
----------- ----------
CASH AND EQUIVALENTS, END OF YEAR $ 65,089 $ 59,113
=========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 108,564 $ 86,680
=========== ==========
Income taxes paid, net $ 2,050 $ 4,450
=========== ==========
SUPPLEMENTAL OF NON-CASH INVESTING ACTIVITIES:
Transfer of loans to foreclosed real estate $ 1,654 $ 4,998
=========== ==========
</TABLE>
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CITFED BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended December 31, 1997 and 1996
(Unaudited)
1. BASIS OF PRESENTATION
The foregoing consolidated financial statements as of December 31,
1997 and 1996, and for the three and nine months ended December 31, 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 December 31, 1997, the Bank had outstanding commitments to
originate and purchase loans aggregating approximately $64.8 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 $58.3 million; the remainder are at floating
rates. The Bank had outstanding mandatory and optional forward commitments to
sell loans and mortgage-backed securities of $118.6 million at December 31,
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:
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 (residential land development)
Investment Group)
(mutual fund and insurance sales)
<TABLE>
Earnings (losses): THREE MONTHS ENDED NINE MONTHS ENDED
(In thousands) DEC. 31, DEC. 31
--------- ----------------------------
1997 1996 1997 1996
----- ------ ----- -----
<S> <C> <C> <C> <C>
Citizens Federal Bank $6,783 $5,514 $19,372 $7,999
CitFed Mortgage 983 725 2,749 2,213
CitFed Investment Group 66 52 211 227
Dayton Financial 0 (57) 0 (160)
CitFed Bancorp (including consolidating entries) (397) (451) (1,227) (1,346)
------ ------ ------- ------
NET INCOME $7,435 $5,783 $21,105 $8,933
====== ====== ======= ======
</TABLE>
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4. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings per common share for the three and nine months ended December
31, 1997 and 1996 are divided by the weighted average number of common shares
outstanding during the period. Diluted earnings per common share for the three
and nine months ended December 31, 1997 and 1996 are divided by the weighted
average number of common shares and common share equivalents outstanding during
the period. Average common shares outstanding for the three month period ended
December 31, 1997 and 1996 were 12,994,041 and 12,875,932, respectively.
Average common and common stock equivalents outstanding for the three month
period ended December 31, 1997 and 1996 were 13,439,711 and 13,349,104,
respectively. Average common shares outstanding for the nine month period
ended December 31, 1997 and 1996 were 12,969,298 and 12,836,902, respectively.
Average common and common stock equivalents outstanding for the nine month
period ended December 31, 1997 and 1996 were 13,432,690 and 13,338,083,
respectively. Stock options are considered common share equivalents.
5. DIVIDEND
On October 17, 1997, the Board of Directors approved a three-for two
stock split in the form of a stock dividend, which was distributed on November
28, 1997, to shareholders of record on November 14, 1997. Par value will
remain at $0.01 per share. All references to the number of shares and per
share amounts have been restated to reflect the effect of the stock dividend.
The Board of Directors also declared on January 23, 1998, a quarterly dividend
of $0.09 per share payable February 27, 1998 to stockholders of record on
February 13, 1998. The total amount of the dividend will be approximately
$1,170,000.
6. CURRENT ACCOUNTING ISSUES
In December 1997, the Corporation adopted SFAS No. 128, "Earnings Per
Share" ("SFAS 128"). SFAS 128 provides computation, presentation, and
disclosure requirements for earnings per share. The previous presentation of
primary and fully diluted earnings per share has been 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 was not permitted. Although basic earnings per share
under SFAS 128 excludes dilutive securities, management believes that the new
basic earnings per share is not significantly different from primary earnings
per share, which includes the effect of potentially dilutive securities.
Diluted earnings per share, as required by SFAS 128, has not materially changed
from the previous 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
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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.
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 disclosure impact on the
Corporation's financial statements has not yet been determined.
7. PENDING MERGER
On January 14, 1998, CitFed Bancorp announced that it had entered into
a merger agreement with Fifth Third Bancorp. The transaction will be a
tax-free stock-for-stock exchange of .67 shares of Fifth Third common stock for
each outstanding share of CitFed Bancorp. Pending regulatory and stockholder
approval, the acquisition is expected to be completed in the second calendar
quarter of 1998.
8. 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 36 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 ("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 -
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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.
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 December 31, 1997, the
Corporation had net income of $7.4 million compared to $5.8 million for the
three months ended December 31, 1996, an increase of 28.6%
Net income for the nine months ended December 31, 1997 was $21.1
million compared to $16.1 million, before the SAIF assessment, an increase of
30.8%. After giving effect to the special SAIF assessment, the Corporation
reported net income of $8.9 million for the nine months ended December 31,
1996.
Interest Income: Total interest income increased $9.5 million, or
19.4% from $48.7 million for the third quarter of fiscal 1997 to $58.2 million
for the third quarter of fiscal 1998. Of this increase, $9.9 million resulted
from an increase of $533.5 million in the average balance of interest-earning
assets, primarily loans receivable. The offsetting $464,000 decrease resulted
from a 5 basis point decrease in the weighted average yield on interest-earning
assets.
Total interest income increased $25.0 million, or 17.8% from $140.5
million for the nine months ended December 31, 1996, to $165.5 million for the
nine months ended December 31, 1997. The increase in total interest income was
primarily due to a $457.8 million increase in the average balance of
interest-earning assets.
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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 $373.7 million from December 1996 to December 1997. In
addition, the Bank securitized $461.5 million one- to four-family loans at the
end of December 1997 for additional borrowing capacity. This transaction
combined with purchases during this same period have resulted in an increase in
the average balance of mortgage-backed securities and investment securities of
$51.5 million and $21.5 million, respectively.
Interest Expense: Total interest expense increased $8.2 million, or
25.9% from $31.7 million for the third quarter of fiscal 1997 to $39.9 million
for the third quarter of fiscal 1998. Of this increase, $6.8 million was the
result of an increase of $520.0 million in the average balance of
interest-bearing liabilities. The remaining $1.4 million increase related to a
23 basis point increase in the cost of funds.
Total interest expense increased $21.3 million, or 23.4% from $90.8
million for the nine months ended December 31, 1996, to $112.1 million for the
nine months ended December 31, 1997. Of this increase $18.3 million was the
result of a $437.7 million increase in the average balance of interest-bearing
liabilities. The remaining $3.0 million increase related to a 24 basis point
increase in the cost of funds.
The Bank's average deposits increased $178.7 million for the nine
months ended December 31, 1997, as compared to the same period a year ago,
primarily due to a $180.7 million increase in retail certificates of deposit
and demand deposits partially offset by an $11.3 million decline in savings and
money market deposits. In addition, FHLB advances and securities sold under
agreements to repurchase increased $155.5 million and $104.7 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.
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<TABLE>
<CAPTION>
RATE/VOLUME ANALYSIS
(In Thousands) 3 Months Ended Dec. 31, 9 Months Ended Dec. 31,
|-------------- 1997 vs 1996 ---------------| |---------------- 1997 vs 1996------------|
Total Total
Increase (Decrease) Due to Increase Increase (Decrease) Due to Increase
Volume Rate (Decrease) Volume Rate (Decrease)
------ ---- --------- ------ ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Loans receivable $ 8,900 $(1,653) $ 7,247 $ 19,371 $ (35) $ 19,336
Mortgage-backed securities 441 1,227 1,668 2,638 1,390 4,028
Investment securities 385 (52) 333 947 0 947
Other 189 14 203 420 256 676
---------- -------- ---------- -------- --------- --------
Total interest-earning assets $ 9,915 $ (464) $ 9,451 $ 23,376 $ 1,611 $ 24,987
========== ======== ---------- ======== ========= --------
Interest-Bearing Liabilities:
Deposits:
NOW Accounts 70 246 316 147 165 312
Savings Deposits (6) (13) (19) (36) (32) (68)
Money Market Deposits (81) 25 (56) (178) 10 (168)
Certificates of Deposit 3,197 119 3,316 7,123 217 7,340
FHLB advances 2,816 728 3,544 6,688 1,951 8,639
Securities sold under agreement
to repurchase 883 267 1,150 4,564 725 5,289
Other Borrowings (61) 31 (30) (58) 2 (56)
---------- -------- ---------- -------- --------- --------
Total interest-bearing
liabilities $ 6,818 $ 1,403 8,221 $ 18,250 $ 3,038 21,288
Net interest income ========== ========= ---------- ======== ========= --------
$ 1,230 $ 3,699
========== ========
</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 nine months ended
December 31, 1997, as compared to 102.4% for the same period last year. The
weighted average interest rate decreased for interest-earning assets and
increased for interest-bearing liabilities, resulting in a decreased interest
spread.
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<TABLE>
<CAPTION>
Three months ended December 31,
1997 1996
--------------------------------- ---------------------------------
Average Interest Yield/ Average Interest Yield/
Outstanding Earned/ Weighted Outstanding Earned/ Weighted
Balance Paid Rate Balance Paid Rate
------- ---- ---- ------- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Loans receivable (1) $2,054,061 $38,611 7.52% $ 1,584,143 $31,364 7.92%
Securities available for sale 788,334 14,463 7.34 762,625 12,795 6.71
Securities held to maturity 250,879 4,078 6.50 227,192 3,745 6.59
Other 76,274 1,016 5.33 62,102 813 5.24
---------- ------- ---- ----------- ------- ----
Total interest-earning assets $3,169,548 $58,168 7.34% $ 2,636,062 $48,717 7.39%
========== ------- ---- =========== ------- ----
Interest-Bearing Liabilities:
Deposits:
NOW account $ 191,950 $ 1,175 2.45% $ 178,167 $ 859 1.93%
Demand deposits 144,856 0 0.00 91,270 0 0.00
Savings deposits 207,207 1,271 2.45 208,410 1,290 2.48
Money Market deposits 119,509 1,036 3.47 128,999 1,092 3.39
Certificates of deposit 1,156,268 17,573 6.08 945,784 14,257 6.03
FHLB advances 940,923 13,766 5.85 746,134 10,222 5.48
Securities sold under agreements
to repurchase 289,152 4,263 5.90 228,225 3,113 5.46
Other borrowings 38,296 835 8.72 41,148 865 8.41
---------- ------- ---- ----------- ------- ----
Total interest-bearing liabilities $3,088,161 39,919 5.17% $ 2,568,137 31,698 4.94%
========== ------- ---- =========== ------- ----
Net interest income; interest
rate spread $18,249 2.17% $17,019 2.45%
======= ==== ======= ====
Net interest margin (2) 2.30% 2.58%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 102.64% 102.64%
====== ======
<CAPTION>
Nine months ended December 31,
1997 1996
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Loans receivable (1) $1,916,327 $110,867 7.71% $ 1,542,589 $ 91,531 7.91%
Securities available for sale 772,475 39,999 6.90 721,022 35,971 6.65
Securities held to maturity 242,590 11,858 6.52 221,096 10,911 6.58
Other 70,371 2,758 5.23 59,209 2,082 4.69
---------- -------- ---- ---------- -------- ----
Total interest-earning assets $3,001,763 $165,482 7.35% $2,543,916 $140,495 7.36%
========== -------- ---- ========== -------- ----
Interest-Bearing Liabilities:
Deposits:
NOW account $ 187,376 $ 3,025 2.15% $ 178,039 $ 2,713 2.03%
Demand deposits 134,850 0 0.00 110,476 0 0.00
Savings deposits 209,082 3,844 2.45 210,983 3,912 2.47
Money Market deposits 121,351 3,126 3.43 130,772 3,294 3.36
Certificates of deposit 1,114,105 50,694 6.04 957,779 43,354 6.04
FHLB advances 843,141 36,807 5.82 687,687 28,168 5.46
Securities sold under agreements
to repurchase 272,906 12,054 5.89 168,193 6,765 5.36
Other borrowings 40,007 2,531 8.44 41,175 2,587 8.38
---------- -------- ---- ---------- -------- ----
Total interest-bearing liabilities $2,922,818 112,081 5.11% $2,485,104 90,793 4.87%
========== -------- ---- ========== -------- ----
Net interest income; interest
rate spread $53,401 2.24% $49,702 2.49%
======= ==== ======= ====
Net interest margin (2) 2.37% 2.61%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 102.70% 102.37%
====== ======
</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 of 11
<PAGE> 14
Provision for Loan Losses. The Bank's provision for loan losses was
$2.7 million for the nine months ended December 31, 1997, compared to a
provision of $2.4 million for the nine months ended December 31, 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>
Nine Months Ended
December 31,
1997 1996
---- ----
(Dollars in thousands)
<S> <C> <C>
Balance at beginning of period $16,823 $16,330
------- -------
Charge-offs:
One-to four-family real estate (179) (371)
Other real estate (140) (2,599)
Consumer (1,858) (411)
Commercial business (34) (23)
------- -------
Total charge-offs (2,211) (3,404)
------- -------
Recoveries:
One-to four-family real estate 23 70
Other real estate 18 264
Consumer 815 87
Commercial business 14 32
------- -------
Total recoveries 870 453
------- -------
Net charge-offs (1,341) (2,951)
Provisions 2,700 2,400
------- -------
Balance at end of period $18,182 $15,779
======= =======
Ratio of net charge-offs during the period
to average loans outstanding during the period (0.07%) (0.19%)
======= =======
Ratio of allowance to non-performing loans
at end of period 184.6% 204.3%
======= =======
</TABLE>
The ratio of the allowance to non-performing loans decreased to 184.6%
at December 31, 1997, compared to 204.3% for the same period one year ago
primarily because of the increase in non-performing loans from $7.7 million to
$9.8 million. This increase has been directly attributable to the increased
loan volume during this current fiscal year. In addition, net consumer
charge-offs
Page 12
<PAGE> 15
for the nine months ended December 31, 1997 were $1.0 million, compared to
$324,000 for the same period one year ago. This increase is a result of the
increased growth in the auto lease portfolio which totaled $76.0 million at
December 31, 1997 compared to $34.1 million at December 31, 1996. 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
December 31, 1997, totaled $8.9 million as compared to $7.5 million for the
same period a year ago, an increase of $1.4 million, or 19.2%. Non-interest
income for the nine months ended December 31, 1997, totaled $25.7 million as
compared to $21.5 million for the same period a year ago, an increase of $4.2
million, or 19.6%.
Consumer banking fees and charges increased 25.3% to $4.4 million for
the three months ended December 31, 1997, up from $3.5 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 as
well as increased fees associated with consumer and commercial loan activities.
Consumer banking fees and charges increased 30.3% to $12.5 million for the nine
months ended December 31, 1997, up from $9.6 million for the same period last
year.
Trust and investment services fee income for the third quarter of
fiscal 1998 increased to $854,000 compared to $805,000 for the third quarter of
fiscal 1997, an increase of 6.1%. Administered trust assets increased to
$448.8 million at December 31, 1997, compared with $429.7 million at December
31, 1996. Trust and investment service fee income for the nine months ended
December 31, 1997, declined 3.3% to $2.5 million from $2.6 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 13.2% in the third quarter to
$3.1 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 $6.3 billion at December 31, 1997, with $4.7 billion of
mortgage loans being serviced for other investors, compared to $4.5 billion at
December 31, 1996, with $3.0 billion of mortgage loans being serviced for other
investors. The growth in the mortgage servicing portfolio was a result of an
$840.0 million bulk purchase of mortgage servicing rights in June 1997 combined
with increased loan activity during the previous 12 months. Mortgage loan
closings totaled $448.9 million for the quarter ended December 31, 1997,
compared to $149.6 million for the quarter ended December 30, 1996, an increase
of 200%.
Non-Interest Expenses: Non-interest expenses for the three months
ended December 31, 1997, were $15.7 million, as compared to $15.0 million for
the three months ended December 31, 1996, an increase of 4.61%. Non-interest
expenses for the nine months ended December 31, 1997 were $45.7 million
compared to $45.2 million without the one-time SAIF recapitalization charge of
$10.3 million for the nine months ended December 31, 1996. These increases
were primarily a result of the Bank opening two new retail branches and the
Mortgage Company opening one new lending branch during this fiscal year.
Income Tax Provision. The Bank's income tax provision for the nine
months ended December 31, 1997, was 31.1%, compared to 32.9% for the nine
months ended December 31, 1996.
Page 13
<PAGE> 16
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>
December 31, March 31,
1997 1997
----------- ----------
(Dollars in thousands)
<S> <C> <C>
Non-Performing Assets
Non-accruing loans:
One- to four-family $ 7,699 $ 6,140
Multi-family and commercial real estate 1,772 550
Consumer 238 207
Commercial business 139 0
------- -------
Total 9,848 6,897
------- -------
Foreclosed assets:
One- to four-family 3,098 3,452
Multi-family and commercial real estate 414 2,786
------- -------
Total 3,512 6,238
------- -------
Total non-performing assets $13,360 $13,135
======= =======
Non-performing loans to total loans 0.58% 0.42%
======= =======
Non-performing assets to total assets 0.39% 0.45%
======= =======
</TABLE>
The $225,000 increase in non-performing assets from March 31, 1997 to
December 31, 1997, was the result of several factors. Non-accruing one-to
four-family mortgage loans increased $1.6 million during the period.
Eighty-nine loans totaling $6.3 million were placed on non-accrual status, 12
loans totaling $1.5 million were transferred to foreclosed assets, 30 loans
totaling $1.6 million were returned to accruing status and 20 loans totaling
$1.6 million were paid off.
Non-accruing multi-family and commercial real estate loans increased
$1.2 million for the period. Nine loans for $2.3 million were added to
non-accrual status, two loans totaling $205,000 were paid in full and six loans
for $868,000 were returned to accruing status.
Foreclosed assets decreased $2.7 million for the period. Fourteen
residential properties totaling $1.7 million (net of $34,000 in loss reserves)
were added, and eighteen properties totaling $2.2 million were sold.
Residential construction costs of $656,000 were incurred during the nine
months. Seven commercial properties totaling $3.0 million were sold. The
reserve for foreclosed assets decreased by $173,000 from a provision of
$192,000, offset by net charge-offs of $365,000.
Page 14
<PAGE> 17
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 January
23, 1998, a cash dividend on its common stock of nine cents ($0.09) per share.
The cash dividend will be paid on February 27, 1998 to stockholders of record
on February 13, 1998.
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. Although this strategy can result in
narrower net interest margins, it also results in a more stabilized net
interest margin in periods of either rising or falling interest rates. At
December 31, 1997, the Corporation's one-year gap was a positive 1.85%.
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 positive
one-year gap would mean that 1.85% of the Corporation's assets will reprice
within one year without a corresponding repricing of the liabilities funding
them.
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 4.0%. 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 13.09% at December 31, 1997.
Page 15
<PAGE> 18
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 December 31, 1997, the Bank had commitments
to purchase from CitFed Mortgage loans totaling $36.5 million. CitFed Mortgage
had commitments to fund loans of $64.8 million and to sell loans of $118.6
million.
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
December 31, 1997:
<TABLE>
<CAPTION>
----------------------
(Dollars in thousands) Amount %(1)
------ -------
<S> <C> <C>
Tangible Capital:
Bank's $195,571 5.70%
Requirement 51,486 1.50
-------- -----
Excess $144,085 4.20%
======== =====
Core Capital
Bank's $195,571 5.70%
Requirement 102,972 3.00
-------- -----
Excess $ 92,599 2.70%
======== =====
Risk-Based Capital:
Bank's $213,753 13.36%
Requirement 127,959 8.00
-------- -----
Excess $ 85,794 5.36%
======== =====
</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.
Page 16
<PAGE> 19
A reconciliation of the Corporation's GAAP Capital is as follows:
<TABLE>
<CAPTION>
(Dollars in thousands) Dec. 31, 1997
-------------
<S> <C>
Bank's stockholder's equity $211,294
Less additional capital contributed to
Bank by the Corporation (22,000)
Plus Corporation's stockholders'
equity not available for regulatory capital 20,571
----------
Stockholders' equity of the Corporation $209,865
==========
</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 December 31,
1997 were 5.70%, 12.23% and 13.36%, respectively. As a result, the Bank meets
the capital requirements of a well capitalized institution.
PENDING MERGER
On January 14, 1998, CitFed Bancorp announced that it had entered into
a merger agreement with Fifth Third Bancorp. The transaction will be a
tax-free stock-for-stock exchange of .67 shares of Fifth Third common stock for
each outstanding share of CitFed Bancorp. Pending regulatory and stockholder
approval, the acquisition is expected to be completed in the second calendar
quarter of 1998.
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 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 December 31,
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 February 13, 1998 By /s/ Jerry L. Kirby
-------------------- ---------------------------
Jerry L. Kirby
Chairman of the Board, President and
Chief Executive Officer
(Duly Authorized Representative)
Date February 13, 1998 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
11 Statement regarding computation
of per share earnings
27 Financial Data Schedule
<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 Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Computation of Basic Earnings Per Share:
Weighted average number of common
shares outstanding 12,994,041 12,875,932 12,969,298 12,836,902
========== ========== ========== ==========
Net income $7,435 $5,783 $21,105 $8,933
====== ====== ======= ======
Earnings per common share $0.57 $0.45 $1.63 $0.70
===== ===== ===== =====
Computation of Diluted Earnings Per Share:
Weighted average number of common
shares outstanding 12,994,041 12,875,932 12,969,298 12,836,902
Add common stock equivalents for shares
issuable under the Stock Option Plan (1) 445,670 473,172 463,392 501,181
---------- ---------- ---------- ----------
Weighted average number of shares
outstanding adjusted for common
stock equivalents 13,439,711 13,349,104 13,432,690 13,338,083
========== ========== ========== ==========
Net income $7,435 $5,783 $21,105 $8,933
====== ====== ======= ======
Earnings per common share - assuming dilution $0.55 $0.43 $1.57 $0.67
===== ===== ===== =====
</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.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 29,048
<INT-BEARING-DEPOSITS> 36,041
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,140,299
<INVESTMENTS-CARRYING> 245,418
<INVESTMENTS-MARKET> 246,840
<LOANS> 1,790,620
<ALLOWANCE> 18,182
<TOTAL-ASSETS> 3,460,297
<DEPOSITS> 1,852,344
<SHORT-TERM> 0
<LIABILITIES-OTHER> 41,879
<LONG-TERM> 1,356,209
0
0
<COMMON> 130
<OTHER-SE> 209,735
<TOTAL-LIABILITIES-AND-EQUITY> 3,460,297
<INTEREST-LOAN> 38,611
<INTEREST-INVEST> 18,541
<INTEREST-OTHER> 1,016
<INTEREST-TOTAL> 58,168
<INTEREST-DEPOSIT> 21,055
<INTEREST-EXPENSE> 18,864
<INTEREST-INCOME-NET> 18,249
<LOAN-LOSSES> 650
<SECURITIES-GAINS> 55
<EXPENSE-OTHER> 15,683
<INCOME-PRETAX> 10,841
<INCOME-PRE-EXTRAORDINARY> 7,435
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,435
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.55
<YIELD-ACTUAL> 7.24
<LOANS-NON> 9,150
<LOANS-PAST> 0
<LOANS-TROUBLED> 9,664
<LOANS-PROBLEM> 19,701
<ALLOWANCE-OPEN> 18,103
<CHARGE-OFFS> 875
<RECOVERIES> 304
<ALLOWANCE-CLOSE> 18,182
<ALLOWANCE-DOMESTIC> 18,182
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
