SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
JULY 15, 1997
(Date of earliest event reported)
PennFirst Bancorp, Inc.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 0-19345 25-1659846
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
600 LAWRENCE AVENUE, ELLWOOD CITY, PENNSYLVANIA 16117
(Address of principal executive offices) (Zip Code)
(412) 758-5584
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
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ITEM 5. OTHER EVENTS
The information to be reported herein is incorporated by reference from
the press release, dated July 15, 1997, filed as Exhibit 1 to this Form
8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) NOT APPLICABLE.
(b) NOT APPLCIABLE.
(c) EXHIBITS.
1 Press relase dated July 15, 1997.
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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.
PENNFIRST BANCORP, INC.
(Registrant)
Date: July 16, 1997 By: /S/ CHARLOTTE A. ZUSCHLAG
-------------------------
Charlotte A. Zuschlag
President and Chief Executive Officer
(Principal Executive Officer)
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EXHIBIT 99
PRESS RELEASE
PENNFIRST BANCORP, INC.
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117
412/758-5584
P R E S S R E L E A S E
RELEASE DATE: CONTACT:
July 15, 1997 CHARLES P. EVANOSKI
SENIOR VICE PRESIDENT
CHIEF FINANCIAL OFFICER
(412) 758-5584
FOR IMMEDIATE RELEASE
PENNFIRST BANCORP, INC. ANNOUNCES RECORD QUARTERLYEARNINGS
FOR SECOND QUARTER 1997 AND 10% STOCK DIVIDEND
Ellwood City, PA, July 15, 1997 -- PennFirst Bancorp, Inc. (Nasdaq: PWBC)
today announced record consolidated net income for the quarter ended June
30, 1997, of $1.45 million or $0.30 per share, which represented 34.1% and
11.1% increases in net income and net income per share, respectively, as
compared to consolidated net income of $1.08 million or $0.27 per share for
the same period in the prior year. The Company's annualized return on
average assets and return on average equity were 0.71% and 8.98%,
respectively, for the current quarter ended June 30, compared to 0.63% and
8.44%, respectively, for the same quarter last year.
In connection with announcing record earnings, the Company reported that
the Board of Directors declared a special ten percent common stock dividend
today at their regular monthly meeting. The stock dividend is payable on
August 25, 1997 to stockholders of record on July 31, 1997.
Charlotte A. Zuschlag, President and Chief Executive Officer of the
Company, stated, "We are pleased with the Company's second quarter and
year-to-date earnings and the integration of Troy Hill Federal Savings
Bank's operations into the operations of the consolidated Company. Given
the favorable operating results, the appreciation in value of PennFirst's
common stock since the Company went public in June 1990 and in order to
reward our stockholders, the Board of Directors elected to declare the ten
percent stock dividend. This stock dividend will facilitate greater
trading activity or float in our stock". Ms. Zuschlag further stated that,
"the Company expects to maintain the current $0.09 per share regular
quarterly cash dividend after the stock dividend, thereby increasing the
cash payout to our stockholders by ten percent". The Company has paid
regular quarterly cash dividends since going public.
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Press Release
Page 2 of 4
July 15, 1997
As a result of the stock dividend, the number of outstanding shares of the
Company's common stock will increase to 5,310,401 shares from 4,827,637
shares.
For the six month period ended June 30, 1997, the Company recorded
consolidated net income of $2.60 million or $0.59 per share, representing
an annualized return on average assets and return on average equity of
0.68% and 8.95%, respectively. This compares to consolidated net income of
$2.10 million or $0.53 per share, representing an annualized return on
average assets and return on average equity of 0.62% and 7.89%,
respectively, for the same period in the prior year.
The increase in consolidated net income for the quarterly and six month
periods can be attributed primarily to an increase in operating results
associated with the acquisition of Troy Hill Federal Savings Bank on April
3, 1997, and inclusion of Troy Hill's net income of $352,000 for the three
months ended June 30, 1997. Aside from Troy Hill's operating results, the
overall increase in net income can also be attributed to a $70,000 or 1.0%
increase in net interest income, a $154,000 or 3.8% decrease in operating
expenses and a $450,000 or 46.6% decrease in provision for income taxes for
the six months ended June 30, 1997, compared to the same period in the
prior year. The $450,000 decrease in provision for income taxes can be
attributed to an improvement in the Company's effective income tax rate to
22.2% from 31.5% between periods primarily as a result of the Company's
strategy of improving effective rates of returns on securities by
purchasing tax exempt municipal obligations during 1996 and 1997.
Ms. Zuschlag noted, "We continue to improve operating results by increasing
our net interest margin and realizing efficiencies in operating expenses".
Offsetting these increases in consolidated income was an increase in the
provision for loan losses of $516,000 between periods, due to a $600,000
increase in loan loss reserves during the quarter ended June 30, 1997,
associated with the previously disclosed thirteen nonperforming lease
agreements between the Company and Bennett Funding Group and affiliates of
Syracuse, NY. The lease agreements were purchased by the Company and are
secured by commercial equipment leases located in various parts of the
country. On March 29, 1996, it was reported that Bennett Funding Group was
the target of a civil complaint filed by the Securities and Exchange
Commission and further reported on April 1, 1996 that Bennett Funding Group
filed a Chapter 11 bankruptcy petition and was halting payments on the
lease agreements.
As a result of the foregoing, during the quarter ended March 31, 1996, the
Company placed all $3.6 million of the lease agreements on nonaccrual
status and, in connection therewith, established a reserve of approximately
$900,000 for potential losses related to such lease agreements. Moreover,
during the quarter ended June 30, 1997,
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Press Release
Page 3 of 4
July 15, 1997
as a result of questions concerning the ultimate collectibility of certain
of the lease agreements and concerns with respect to the Company's security
interest in the collateral securing certain of the lease agreements, the
Company determined to provide an additional $600,000 in loan loss reserves.
The Company is insured with a private carrier with respect to $800,000 of
credit losses relating to the Bennett Funding Group lease agreements.
Consequently, as of June 30, 1997, the Company had approximately $2.8
million of uninsured lease agreements and had total loan loss reserves
relating to such lease agreements of approximately $1.7 million as of such
date.
Ms. Zuschlag noted that, "the Company will continue to monitor and
vigorously pursue all legal remedies available to recover its investment in
the Bennett leases to the fullest extent possible". Nevertheless, no
assurance can be made as to the amounts, if any, the Company may recover in
the future or whether any additional reserves may be necessary in future
periods.
As a result of the Troy Hill Bancorp, Inc. acquisition and loan portfolio
growth, the Corporation's consolidated total assets reached $817.0 million
at June 30, 1997, compared to $698.7 million at December 31, 1996. Total
deposits were $391.1 million at June 30, 1997, compared to $332.9 million
at December 31, 1996. Total stockholders' equity increased to $66.0
million or 8.1% of total assets at June 30, 1997, from $51.5 million at
December 31, 1996.
PennFirst Bancorp, Inc. is the parent holding company of ESB Bank F.S.B.
and Troy Hill Federal Savings Bank and offers a wide variety of financial
products and services through eleven offices in the contiguous counties of
Allegheny, Lawrence, Beaver and Butler in Pennsylvania. The common stock
of PennFirst is traded on The Nasdaq Stock Market under the symbol "PWBC".
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Press Release
Page 4 of 4
July 15, 1997
Operations Data:
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
------ ------ ------ ------
(Unaudited) (Unaudited)
Interest income $ 14,229 $ 11,684 $ 26,180 $ 22,955
Interest expense 9,775 8,044 18,110 15,877
------ ------ ------ ------
Net interest income 4,454 3,640 8,070 7,078
Provision for loan
losses 600 - 801 285
------ ------ ------ ------
Net interest income
after provision
for loan losses 3,854 3,640 7,269 6,793
Noninterest income 245 151 418 339
Noninterest expense 2,312 2,178 4,344 4,066
----- ----- ----- -----
Income before income
taxes 1,787 1,613 3,343 3,066
Income tax expense 333 529 744 967
----- ----- ----- -----
Net income $ 1,454 $ 1,084 $ 2,599 $ 2,099
===== ===== ===== =====
Earnings per share $ 0.30 $ 0.27 $ 0.59 $ 0.53
===== ===== ===== =====
Weighted average
shares and
equivalents
outstanding 4,831,746 3,978,657 4,372,055 3,985,981
Annualized return
on average
assets 0.71% 0.63% 0.68% 0.62%
Annualized return
on average
stockholders'
equity 8.98% 8.44% 8.95% 7.89%
Noninterest expense
to average assets 1.13% 1.27% 0.14% 1.20%
Balance Sheet Data:
June 30, December 31,
1997 1996
-------- ------------
(Unaudited)
Total assets $ 816,954 $ 698,735
Cash and equivalents 9,254 7,284
Securities held to maturity 91,101 96,200
Securities available for sale 353,386 348,129
Loans receivable, net 325,180 216,865
Savings deposits 391,066 332,889
Borrowed funds 350,472 309,195
Stockholders' equity 66,006 51,543
Book value per share $ 13.69 $ 13.21
Average stockholders'
equity to average assets 7.64% 7.50%
Allowance for loan losses
to total loans receivable 1.45% 1.46%
Nonperforming assets to
total assets 0.65% 0.59%
Full service offices at
the end of the period 11 9
