<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended March 31, 1996 Commission File No. 0-19525
-------------- -------
Liberty Bancorp, Inc.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3785878
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5700 North Lincoln Avenue, Chicago, IL 60659
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 334-1200
---------------
Indicate by check mark whether the registrant has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and has been subject to such filing requirements
for the past 90 days.
1. YES X NO
--- ---
The number of shares of Common Stock ($.01 par value) outstanding at the close
of business on May 1, 1996 was 2,487,022 shares.
----------- ---------
1
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LIBERTY BANCORP, INC.
AND SUBSIDIARY
FORM 10-Q
INDEX
- - --------------------------------------------------------------------------------
Page
----
PART I. FINANCIAL INFORMATION
------- ---------------------
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of
March 31, 1996 (Unaudited) and December 31, 1995 3
Consolidated Statements of Earnings (Unaudited) for the
Three Months ended March 31, 1996 and 1995 4
Statement of Changes in Stockholders' Equity for the
Three Months ended March 31, 1996 (Unaudited) 5
Consolidated Statements of Cash Flows (Unaudited) for the
Three Months ended March 31, 1996 and 1995 6-7
Notes to the Unaudited Consolidated Financial Statements 8-11
2. Item 2. Management Discussion and Analysis of Financial
Condition and Results of Operations 12-22
PART II. OTHER INFORMATION
-----------------
Items 1.-3. Non-Applicable 23
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23-26
Signature Page 27
2
<PAGE> 3
<TABLE>
<CAPTION>
LIBERTY BANCORP, INC.
CONSOLIDATED STATEMENTS of FINANCIAL CONDITION
(Dollars in thousands)
Mar. 31, Dec 31,
-------------- -------------
1996 1995
ASSETS -------------- -------------
(unaudited)
<S> <C> <C>
Cash and due from banks $ 7,853 $ 8,119
Interest-earning deposits 7,638 5,715
Federal funds sold 1,700 0
Commercial paper held-to-maturity 5,200 5,200
Investment securities available-for-sale, at fair value 55 56
Investment securities held-to-maturity
Market value (03/96 - $22,794; 12/95 - $25,492) 22,626 25,030
Federal Home Loan Bank of Chicago stock 5,410 5,011
Mortgage-backed securities available-for-sale, at fair value 100,356 98,138
Loans receivable, net 498,366 513,586
Accrued interest receivable 4,249 3,894
Real estate owned 0 0
Premises and equipment, net 3,482 3,277
Prepaid expenses and other assets 11,343 10,832
Deposit base intangible 169 174
Deferred federal and state income taxes 1,502 1,505
-------------- -------------
TOTAL ASSETS $ 669,949 $ 680,537
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 502,880 $ 487,388
Borrowed funds 93,500 117,500
Advance payments by borrowers for taxes and insurance 2,301 3,972
Accrued expenses and other liabilities 7,450 7,000
-------------- -------------
TOTAL LIABILITIES 606,131 615,860
-------------- -------------
Preferred stock, $.01 par value. Authorized 1,000,000 shares;
none outstanding 0 0
Common stock, $.01 par value. Authorized 5,000,000 shares;
issued 3,306,250; outstanding 2,487,022 shares at
03/31/96 and 2,552,022 shares at 12/31/95 33 33
Additional paid-in-capital 31,618 31,611
Retained earnings, substantially restricted 51,664 50,981
Treasury stock, at cost (819,228 shares at 03/31/96 and
754,228 shares at 12/31/95) (18,259) (16,618)
Common stock purchased by:
Employee Stock ownership plan (1,039) (1,134)
Bank recognition and retention plans (266) (355)
Unrealized gain(loss) on securities available-for-sale, net of taxes 67 159
-------------- -------------
TOTAL STOCKHOLDERS' EQUITY 63,818 64,677
-------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 669,949 $ 680,537
============== =============
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
3
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<TABLE>
<CAPTION>
LIBERTY BANCORP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands)
For three months ended
Mar. 31,
--------------- ---------------
1996 1995
--------------- ---------------
<S> <C> <C>
INTEREST INCOME:
Interest income on loans:
Mortgage loans $ 9,185 $ 8,303
Other loans 612 655
--------------- ---------------
TOTAL INTEREST ON LOANS 9,797 8,958
Interest-earning deposits 97 92
Federal funds sold 32 0
Commercial paper 73 80
Investment securities 421 312
Mortgage-backed securities 1,566 553
--------------- ---------------
TOTAL INTEREST INCOME 11,986 9,995
--------------- ---------------
INTEREST EXPENSE:
Deposits 6,098 4,867
Borrowed funds 1,444 935
--------------- --------------
TOTAL INTEREST EXPENSE 7,542 5,802
--------------- --------------
NET INT INC BEFORE PROV FOR LN LOSS 4,444 4,193
Provision for (recovery of)
loan losses 0 0
--------------- --------------
NET INT INC AFTER PROV FOR LN LOSS 4,444 4,193
--------------- --------------
NON-INTEREST INCOME:
Gain(Loss) on sale of:
Other Investments 0 0
Fees and service charges 33 34
Insurance commissions 52 132
Other 164 69
--------------- --------------
TOTAL NON-INTEREST INCOME 249 235
--------------- --------------
NON-INTEREST EXPENSE:
Compensation and benefits 1,458 1,444
Office occupancy and equipment 365 326
Federal deposit insurance premium 278 259
Data processing 173 134
Advertising and promotion 48 37
Other 659 429
--------------- --------------
TOTAL NON-INTEREST EXPENSE 2,981 2,629
--------------- --------------
INCOME BEFORE INCOME TAXES 1,712 1,799
Income taxes 652 685
--------------- --------------
NET INCOME $ 1,060 $ 1,114
=============== ==============
Primary earnings per share $ 0.39 $ 0.37
=============== ==============
Fully diluted earnings per share $ 0.39 $ 0.37
=============== ==============
Average shares common stock outstanding
fully dilluted 2,688,197 3,002,526
=============== ==============
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
4
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<TABLE>
<CAPTION>
LIBERTY BANCORP, INC.
Statement of changes in Stockholders' Equity
For period ended
Mar. 31, 1996
(Unaudited)
(Dollars in thousands)
Common Common
Stock Stock Gain(Loss)
Common Additional Retained Treasury Purchased by Purchased by on Securities
Stock Paid-in-Capital Earnings Stock ESOP MRRP Avail-for-sale Total
-------- --------------- -------- --------- ------------- ------------ --------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $33 $31,611 $50,981 ($16,618) ($1,134) ($355) $159 $64,677
Net income for period ended
March 31, 1996 1,060 1,060
Dividends paid (377) 377
Purchase of treasury stock (1,641) (1,641)
Tax effect ESOP schedule m 7 0 7
ESOP adjustment 95 95
MRRP adjustment 89 89
Unrealized gain(loss) on securities
available-for-sale, net of tax (92) (92)
-------- --------------- -------- --------- ------------- ------------ --------------- --------
Balance at March 31, 1996 $33 $31,618 $51,664 ($18,259) ($1,039) ($266) $67 $63,818
======== =============== ======== ========= ============= ============ =============== ========
</TABLE>
5
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<TABLE>
<CAPTION>
LIBERTY BANCORP, INC.
CONSOLIDATED STATEMENTS of CASH FLOWS
(Unaudited)
(Dollars in thousands)
For three months ended
Mar. 31,
------------- -------------
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,060 $ 1,114
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 145 125
Amortization of cost of stock benefit plans 183 183
Tax benefits related to vested MRRP stock, ESOP
dividends and stock options 7 36
Deferred income tax expense 3 135
Amortization of premiums, discounts, and deferred
loan fees (291) (256)
Additions (deletions) to (from) deferred income and
unearned discounts (27) 149
(Increase) decrease in accrued interest receivable,
prepaid expenses, and other assets (860) (2,777)
Increase (decrease) in accrued expenses and other
liabilities 450 638
------------- -------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES $ 670 $ (653)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan originations $ (13,913)$ (6,559)
Principal repayments on:
Loans receivable 32,167 17,332
Mortgage-backed securities 6,001 848
Proceeds from maturities of investment securities 9,712 6,354
Purchase of:
Loans receivable (2,923) (6,605)
Mortgage-backed securities available-for-sale (8,103) 0
Investment securities held-to-maturity (7,308) (6,212)
Premises and equipment (350) (50)
Stock in the Federal Home Loan Bank of Chicago (399) (65)
------------- -------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES $ 14,884 $ 5,043
------------- -------------
</TABLE>
6
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<TABLE>
<CAPTION>
LIBERTY BANCORP, INC.
CONSOLIDATED STATEMENTS of CASH FLOWS
(Unaudited)
(Dollars in thousands)
For three months ended
Mar. 31,
------------- --------------
1996 1995
------------- --------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock $ (1,641)$ (4,066)
Dividends paid (376) (423)
Net increase (decrease) in deposits 15,492 6,580
Proceeds from borrowed funds 32,500 0
Repayment of borrowed funds (56,500) (4,000)
Net increase (decrease) in advance payments by
borrowers for taxes and insurance (1,672) (1,079)
------------ -------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (12,197) (2,988)
------------ -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,357 1,402
Cash and cash equivalents at beginning of year 19,034 17,100
------------ -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 22,391 $ 18,502
============ =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 7,713 $ 5,860
Income taxes 0 0
Loan origination - account loans 29 38
Purchase of loans receivable - commercial leases 2,791 3,827
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
7
<PAGE> 8
LIBERTY BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
AND DECEMBER 31, 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Liberty Bancorp, Inc. ("the Company")
and subsidiaries conform to generally accepted accounting principles and to
general practice within the savings and loan industry. The consolidated
statement of financial condition as of March 31, 1996 and the consolidated
statement of earnings for the three months ended March 31, 1996 and 1995 are
unaudited but in the opinion of management reflect all adjustments, consisting
only of normal recurring items, necessary for fair presentation. Results of
operations for the interim period are not necessarily indicative of the results
that may be expected for the entire fiscal year.
The following is a description of the more significant policies which the
Company follows in preparing and presenting its consolidated financial
statements.
(a) Principles of Consolidation
The consolidated financial statements include the accounts of Liberty Bancorp,
Inc., Liberty Lincoln Service Corporation II and Liberty Federal Savings Bank
("the Savings Bank") as wholly owned subsidiaries of Liberty Bancorp, Inc. and
Liberty Lincoln Service Corporation, a wholly owned subsidiary of the Savings
Bank. All significant intercompany balances and transactions have been
eliminated in consolidation.
(b) Earnings per share is computed by dividing net income by the weighted
average number of shares of common stock and common stock equivalents
outstanding. The weighted average number of common stock and common stock
equivalents outstanding for the calculation of primary earnings per share for
the three months ended March 31, 1996 was 2,688,197.
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<PAGE> 9
(2) CLASSIFICATION OF ASSETS
The following table sets forth information, at the dates indicated, concerning
assets classified as problem assets under the Company's asset classification
policy.
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
------------------ --------------------
(Unaudited)
(in thousands)
<S> <C> <C>
Substandard
- - -----------
Loans delinquent 90 days or more and
non-accruing $ 836 $ 561
Real estate owned 0 0
Substandard Credit Enhancement
- - ------------------------------
(Cash flow not sufficient to meet debt
service-owner supplements difference.
No delinquency in payments.) 2,000 2,000
Special Mention - Substandard * 458 502
- - -----------------------------
</TABLE>
*This loan is a 25.0% participating interest in a balloon loan on a commercial
office building totalling $458,000 which has been modified at maturity by
extending the term for two years and reducing the rate to current market. This
loan is current as to principal and interest payments and is carried as
substandard in that expected receipts from the operation of the property do not
cover debt service. The shortfall in debt service is made up personally by the
borrower.
Non-accruing loans receivable delinquent three months or more are as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------------------- ----------------------------
(Unaudited)
(in thousands)
Accr Int Accr Int
Number of Not Number of Not
Loans Amount Rec'd Loans Amount Rec'd
----------- ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Mortgage Loans 7 $ 492 $ 20 2 $ 184 $ 9
Leases 1 344 7 1 377 9
Auto Loans 0 0 0 0 0 0
---- ----- ----- ---- ----- ----
8 $ 836 $ 27 3 $ 561 $ 18
==== ===== ===== ==== ===== ======
Percentage of Gross
Loans Receivable 0.17% 0.11%
====== ======
</TABLE>
Non-performing loans - All loans that are three months or more delinquent are
considered non-performing.
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<PAGE> 10
<TABLE>
<CAPTION>
NON-PERFORMING ASSETS
---------------------
March 31, 1996 December 31, 1995
----------------- -------------------
(Unaudited)
(in thousands)
<S> <C> <C>
Loans $ 836 $ 561
Real Estate Owned 0 0
-------- --------
$ 836 $ 561
======== ========
</TABLE>
(3) BORROWED FUNDS
Borrowed funds consists of Federal Home Loan Bank of Chicago (FHLB) Advances
totalling $41.0 million at March 31, 1996 and $64.0 million at December 31, 1995
and securities sold under agreements to repurchase of $52.5 million at March 31,
1996 as compared to $53.5 at December 31, 1995.
Borrowed funds are summarized as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
----------------- -------------------
Weighted Weighted
Average Average
Rate Amount Rate Amount
------- ------ ------- ------
(in thousands)
<S> <C> <C> <C> <C>
Secured advances from the FHLB-Chicago:
Open Line - Variable Rate 5.69% $ 16,000 6.02% $ 39,000
Maturing June 22, 1996 5.47% 25,000 5.47% 25,000
Securities sold under agreements to repurchase:
Maturing January 19, 1996 --- --- 5.80% 11,000
Maturing February 20, 1996 --- --- 5.80% 4,500
Maturing March 19, 1996 --- --- 5.76% 8,000
Maturing April 19, 1996 5.88% 8,000 5.88% 8,000
Maturing April 19, 1996 5.40% 4,500 --- ---
Maturing May 17, 1996 5.71% 6,000 5.71% 6,000
Maturing May 20, 1996 5.32% 5,000 --- ---
Maturing June 17, 1996 5.40% 8,000 --- ---
Maturing November 19, 1996 5.67% 6,000 5.67% 6,000
Maturing February 20, 1997 4.96% 5,000 --- ---
Maturing June 23, 1997 5.67% 10,000 5.67% 10,000
------ ------
$93,500 $117,500
======= ========
Weighted average interest rate 5.55% 5.78%
======= ========
</TABLE>
10
<PAGE> 11
The Savings Bank has adopted a collateral pledge agreement whereby the Savings
Bank has agreed to at all times keep on hand, free of all other pledges, liens,
and encumbrances, first mortgages with unpaid principal balances aggregating no
less than 170.00% of the outstanding secured advances from the FHLB. All stock
in the FHLB is pledged as additional collateral for these advances.
The Savings Bank enters into sales of securities under an agreement to
repurchase (reverse repurchase agreements). Fixed-coupon reverse repurchase
agreements are treated as financings and the obligations to repurchase
securities sold are reflected as borrowed funds in the consolidated statements
of financial condition. The dollar amount of securities underlying the
agreements remains in the asset accounts. Securities sold under agreements to
repurchase consisted of mortgage-backed securities reported as
available-for-sale with an amortized cost of $57,415,714 and a fair value of
$57,291,368 at March 31, 1996. The securities underlying the agreements were
delivered to the dealers who arranged the transactions.
Information regarding borrowing under fixed-coupon reverse repurchase agreements
during the three months ended March 31, 1996 is summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance at March 31, 1996 $52,500,000
Weighted average interest rate at
March 31, 1996 5.54%
Maximum amount outstanding at any
month-end during the period $52,500,000
Average amount outstanding during
the period $52,697,802
Weighted average interest rate during
the period 5.67%
</TABLE>
11
<PAGE> 12
LIBERTY BANCORP, INC. AND SUBSIDIARY
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
- - -------
Liberty Bancorp, Inc. ("the Company") is the holding company of Liberty
Federal Savings Bank ("the Savings Bank"), a federally chartered savings bank
which converted from mutual to stock form on December 23, 1991 and Liberty
Lincoln Service Corporation II ("Liberty Lincoln II") which was incorporated in
the State of Illinois on December 1, 1994. Liberty Lincoln Service Corporation
is a wholly owned subsidiary of Liberty Federal Savings Bank. Liberty Lincoln
II's primary business is to invest in real estate limited partnerships and joint
ventures related to real estate. As of March 31, 1996, Liberty Lincoln II had
outstanding borrowings of $1.9 million from the Company which is invested in two
real estate development projects located in Illinois.
The Company's results of operations are primarily dependent on the Savings
Bank. The Savings Bank's primary source of earnings is its net interest income,
which is the difference between interest income on interest-earning assets and
interest expense on interest-bearing liabilities. The results of operations are
also affected, to a lesser extent, by non-interest income such as insurance
commissions, service charges and fees, and non-interest expenses such as
employee salaries and benefits, office occupancy and federal deposit insurance
premiums.
On January 12, 1996, the Company announced its sixth buy-back program of
5.0% , or 128,000 shares. As of March 31, 1996, 65,000 shares were purchased at
an average price of $25.25. Treasury stock amounted to 819,228 shares at an
average price of $22.29. The total number of shares outstanding as of close of
period were 2,487,022.
MARKET AREA
- - -----------
The Savings Bank's deposit gathering base is concentrated in the
neighborhoods surrounding its offices in Chicago, Glenview, Norridge and Morton
Grove while its lending is throughout the Northwestern portion of Chicago to
suburban Cook, DuPage and Lake Counties. The Company's and Savings Bank's main
office is located at 5700 North Lincoln Avenue, Chicago, Illinois 60659; a
Walk-Up/Drive-Up facility is at 5650 North Lincoln Avenue, Chicago, Illinois
60659; its second Chicago office is located at 5240-C North Pulaski Road,
Chicago, Illinois 60630; its Glenview location is at 936 Harlem Avenue,
Glenview, Illinois 60025; its Norridge location is at 4147 North Harlem Avenue,
Norridge, Illinois 60634; and its Morton Grove branch is at 6014 Dempster
Street, Morton Grove, Illinois 60053. The fifth location in Norridge was opened
March 1996.
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<PAGE> 13
COMPETITION
- - -----------
The Savings Bank has substantial competition for both deposits and loans
from a high density of financial institutions in the Chicago metropolitan and
suburban areas and, to a lesser extent, from insurance companies and the
securities industry. This competition is monitored through a series of regular
surveys and reacted to through pricing policy, quality of service and a variety
of both deposit and lending products.
LENDING ACTIVITY
- - ----------------
During the quarter ended March 31, 1996, the Company originated or
purchased the following loans:
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 1996
----------------
Amount Yield
------ -----
(in thousands)
<S> <C> <C>
Fixed Rate -
- - ----------
Mortgage and Home Equity Loans
Originated $ 5,841 8.01%
Purchased 67 5.92
Construction 1,086 10.04
Auto Loans 75 8.66
Leases Purchased 2,791 7.29
Unsecured Term Loans 34 10.00
--------
Subtotal 9,894 8.03%
--------
Adjustable Rate -
- - ---------------
1-Year Originated 719 7.00%
2-5 Year Originated 611 7.44
Unsecured Line of Credit 9 12.25
Equity Line of Credit 1,592 8.67
Other Mortgage Related Products -
- - -------------------------------
3 to 10 Year Balloon Loans Originated 3,919 7.99
Land Development Participation 64 10.00
Mortgage-backed Securities Purchased 8,103 7.00
--------
Subtotal 15,017 7.47%
--------
TOTAL $24,911 7.69%
========
</TABLE>
13
<PAGE> 14
The new loan activity during the first three months ended March 31, 1996
was $24.9 million at a weighted average yield of 7.69%. Repayments during the
same period were $38.2 million.
In addition to its traditional mortgage loan products, the Savings Bank is
continuing to offer floating rate, secured equity line of credit; auto loans at
competitive market rates; floating rate, unsecured line of credit; and fixed
rate unsecured loans. The above secured loan products are written to a maximum
of $250,000 and five years in term and the unsecured loans to $15,000 and three
years in term.
At March 31, 1996, loans receivable, net, and mortgage-backed securities
totalled $598.7 million as compared to $611.7 million at December 31, 1995, a
decrease of $13.0 million, or 2.13%. The average yield increased 46 basis points
to 7.46% from 7.00% between the periods.
CAPITAL
- - -------
The Savings Bank exceeded all regulatory capital guidelines at March 31,
1996. Risk- based, tangible and leverage capital for Liberty Federal Savings
Bank was 15.73%, 7.70% and 7.70% of adjusted assets, respectively, compared to
regulatory requirements of 8.0%, 1.5% and 3.0% of adjusted assets, respectively.
The following table presents the Savings Bank's capital position at March
31, 1996 relative to fully phased in regulatory requirements.
<TABLE>
<CAPTION>
Bank Regulatory Capital
----------------------------------------------------
Required Actual Required Actual Excess
Percentage Percentage Balance Balance Balance
----------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C>
At March 31, 1996:
Regulatory Capital
Risk-based 8.00% 15.73% $27,747 $54,553 $26,806
Tangible 1.50 7.70 9,933 51,186 41,253
Leverage 3.00 7.70 19,865 51,186 31,321
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
The following table reconciles the Savings Bank's capital to its
regulatory capital at March 31, 1996.
March 31, 1996
-------------------
(in thousands)
<S> <C>
Liberty Federal Savings Bank Capital $53,851
Unrealized losses (gains) on certain
available-for-sale securities (62)
Less:
Investment in Non-Includable Securities 1,026
Deferred Federal Income Taxes 1,408
Deposit Base Intangibles 169
-------
TOTAL TANGIBLE AND LEVERAGE CAPITAL 51,186
Plus:
Allowance for Loan Losses 3,367
-------
TOTAL RISK-BASED CAPITAL $54,553
=======
</TABLE>
The Office of Thrift Supervision ("OTS") issued final regulations which
set forth the methodology for calculating an interest rate risk component that
is being incorporated into the OTS regulatory capital rules. Under the new
regulations, only savings institutions with "above normal" interest rate risk
exposure are required to maintain additional capital. This additional capital
would increase the amount a savings institution's otherwise required risk-based
capital requirement. The final rule became effective January 1, 1994 and
implementation will not begin until we are notified by the OTS. As of December
31, 1995, the OTS's calculation of the Savings Bank's additional risk-based
capital as a result of the interest-rate risk capital component would be
$179,000. The Savings Bank's interest-rate risk capital component is the lowest
OTS calculation of the previous three quarters.
RECAPITALIZATION OF SAIF AND ITS IMPACT ON SAIF PREMIUMS
- - --------------------------------------------------------
The legislation proposed in Congress to mitigate the effect of the
BIF/SAIF premium disparity was vetoed when the President vetoed the Budget
Reconciliation Bill to which it was attached. Attempts by members of Congress to
attach the legislation for a special assessment to recapitalize the SAIF fund to
a continuing resolution failed and it is uncertain when additional legislation
would be proposed. If a special assessment were imposed on the amount of
deposits held by SAIF-member institutions, including the Savings Bank, as of
March 31, 1995 it is currently generally estimated that it would be between 75
to 80 basis points. It is anticipated that legislation would also be proposed to
require that the BIF and the SAIF be merged, provided that
15
<PAGE> 16
subsequent legislation is enacted requiring savings associations to become
banks, and the FICO payments be spread across all BIF and SAIF members. The
payment of a special assessment would have the effect of immediately reducing
the capital of SAIF-member institutions, net of any tax effect; however, it
would not affect the Savings Bank's compliance with its regulatory capital
requirements. Management cannot predict whether legislation imposing such a fee
will be enacted, or, if enacted, the amount of any special assessment or when
and whether ongoing SAIF premiums will be reduced to a level equal to that of
BIF premiums. Management can also not predict whether or when the BIF and SAIF
would merge.
The Savings Bank's assessment rate for fiscal 1996 is 23 basis points and
the premium paid for the period ending March 31, 1996 was $278,000. A
significant increase in SAIF insurance premiums or a significant special
assessment to recapitalize the SAIF initially would likely have an adverse
effect on the operating expenses and results of operations of the Savings Bank,
but in the future, any reduction in premium would have a beneficial effect.
The pending legislation to eliminate the bad debt reserve deduction for
financial institutions and to recapture the reserve increases since 1987 is
attached to health bills passed by the House and the Senate and will be
considered in conference.
CHANGES IN FINANCIAL CONDITION
- - ------------------------------
Assets totalled $669.9 million at March 31, 1996 as compared to $680.5
million at December 31, 1995, a decrease of $10.6 million, or 1.56%. The primary
decrease in assets was loans receivable, net, of $15.2 million and investment
securities held-to-maturity of $2.4 million, partially offset by increases in
interest-bearing deposits and federal funds of $3.6 million and mortgage-backed
securities available-for-sale of $2.2 million. The cash flow generated by the
decrease in assets was used to repay borrowed funds.
Interest-bearing deposits increased $1.9 million, or 33.65%, to $7.6
million at March 31, 1996 from $5.7 million at December 31, 1995 and federal
funds increased $1.7 million during the same period. There were no federal funds
at December 31, 1995. These increases were the result of partial reinvestment of
loan repayments.
Investment securities held-to-maturity amounted to $22.6 million and $25.0
million at March 31, 1996 and December 31, 1995, respectively, a decrease of
$2.4 million, or 9.60%. During the quarter, the Company reinvested maturities in
other investment grade assets which produce a higher rate.
Mortgage-backed securities available-for-sale, at fair value, amounted to
$100.4 million at March 31, 1996 as compared to $98.1 million at December 31,
1995, an increase of $2.2 million, or 2.26%. During the period, the Company
maintained reverse repurchase agreements amounting to $53.5 million which are
categorized as borrowings. These reverse repurchase agreements were used to
partially fund the purchase of mortgage-backed securities available-for-sale.
Mortgage- backed securities purchased during the period amounted to $8.1 million
which was partially offset
16
<PAGE> 17
by repayments of $6.0 million. The use of reverse repurchase agreements
generated income of $160,000 for the quarter at a spread of 1.02% between the
cost of reverse repurchase agreements and the yield on the underlying
securities.
Loans receivable, net, amounted to $498.4 million and $513.6 million at
March 31, 1996 and December 31, 1995, respectively, a decrease of $15.2 million,
or 2.96%. Loan repayments during the period amounted to $32.2 million which were
partially offset by loans originated and purchased of $16.8 million. The net
cash generated through the repayment of loans was used to partially repay
borrowed funds. The allowances for loan losses at March 31, 1996 and December
31, 1995 were $3.5 million, respectively. At March 31, 1996, the loan loss
allowance amounted to 0.71% of total loans receivable as compared to 0.69% at
December 31, 1995. The Company's policy is to maintain a loan loss allowance
between 0.75% and 1.00% of risk-based assets. (Risk- based assets are defined as
the value of assets after they have been weighted according to regulatory
standards and a value is then placed on each category and the total of all
categories is the basis for calculating risk-based capital requirements.) At
March 31, 1996 and December 31, 1995 the percentage of loan loss allowance to
risk-based assets was 1.02% and 0.96%, respectively. Total non-performing loans
amounted to $836,000 and $561,000 at March 31, 1996 and December 31, 1995,
respectively. There were no impaired loans at the end of either period.
Savings deposits amounted to $502.9 million at March 31, 1996 as compared
to $487.4 million at December 31,1995, an increase of $15.5 million or 3.18%.
The increase of savings deposits resulted from credits for accrued interest
payable of $6.2 million plus net increase of savings deposits of $9.4 million.
Borrowed funds amounted to $93.5 million and $117.5 million at March 31,
1996 and December 31, 1995, respectively, a decrease of $24.0 million or 20.43%.
Repayments of borrowed funds totalled $56.5 million which was partially offset
by proceeds from borrowings of $32.5 million. At the end of the period in 1996
and 1995, respectively, reverse repurchase agreements, which are classified as
borrowed funds, amounted to $53.5 million.
Stockholders' equity totalled $63.8 million, or 9.53%, of assets at March
31, 1996, a decrease of $859,000, or 1.33%, from December 31, 1995. The decrease
resulted from the payment of dividends totalling $377,000, purchase of treasury
stock of $1.6 million and adjustment for unrealized gains on securities
available-for-sale of $91,000 partially offset by net income of $1.1 million and
credits from employee stock plans of $190,000. On January 12, 1996 the Company
announced its sixth buy-back program of 5.0%, or 128,000 shares. As of March 31,
1996, 65,000 shares were purchased at an average price of $25.25. Treasury stock
amounted to 819,228 shares at an average price of $22.29 at March 31, 1996. The
total number of shares outstanding at March 31, 1996 were 2,487,022.
17
<PAGE> 18
RESULTS OF OPERATIONS -
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 AND 1995
- - --------------------------------------------------------
The net income for the three months ended March 31, 1996 was $1.06 million
as compared to $1.11 million for the three months ended March 31, 1995, a
decrease of $55,000, or 4.91%.
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
- - ----------------------------------------------------
Net interest income before provision for loan losses was $4.4 million and
$4.2 million for the three month period ended March 31,1996 and 1995,
respectively, an increase of $251,000, or 6.00%. Total interest income increased
$2.0 million or 19.92% to $12.0 million from $10.0 million for the three months
ended March 31, 1996 and 1995, respectively. The average yield on
interest-earning assets was 7.36% in the 1996 quarter as compared to 6.96% in
the same quarter in 1995, an increase of 40 basis points. Between periods,
average interest-earning assets increased $77.1 million, or 13.42% to $651.8
million in 1996 as compared to $574.7 million in 1995. The major increases in
interest income were interest on mortgage loans of $882,000, or 10.63% and
interest on mortgage-backed securities of $1.0 million, or 183.11%. Interest on
mortgage-backed securities amounted to $1.6 million for the quarter ended March
31, 1996 as compared to $553,000 for the same period in 1995. A reverse
repurchase program using mortgage-backed securities was established in the
fourth quarter of 1995 which increased the average balance in mortgage-backed
securities for the first quarter in 1996 to $98.1 million as compared to $37.0
million in the same period in 1995.
Total interest expense amounted to $7.5 million as compared to $5.8
million for the period ended March 31, 1996 and 1995, respectively, an increase
of $1.7 million, or 29.98%. The cost of interest-bearing liabilities increased
to 5.08% for the 1996 quarter as compared to 4.52% in 1995, an increase of 56
basis points. During the same period, interest-bearing liabilities increased
$81.2 million, or 15.82%, to $594.3 million from $513.1 million. The major
increases in interest expense was interest on deposits which increased $1.2
million, or 25.29%, to $6.1 million from $4.9 million for the three month period
ended March 31, 1996 and 1995, respectively. During the period in 1996, the
average cost of deposits was 4.95% as compared to 4.31% in 1995. Average
interest-bearing deposits increased $40.7 million between the periods. Interest
on borrowings increased $508,000, or 54.35% to $1.4 million from $935,000 for
the three month period ended March 31, 1996 and 1995, respectively. The average
cost of borrowed funds decreased 43 basis points to 5.69% in 1996 as compared to
6.12% in 1995. With the initiation of the reverse repurchase program average
borrowed funds increased $40.4 million between periods. (See Note 3 - Borrowed
Funds - for summary of outstanding borrowings at March 31,1996.)
The interest rate spread for the first quarter of 1996 was 2.28% as
compared to 2.44% in 1995. Net interest margin was 2.73% as compared to 2.92%.
The ratio of interest-bearing assets to interest-bearing liabilities was 1.10%
for the March 1996 quarter as compared to 1.12% for the 1995 quarter.
18
<PAGE> 19
PROVISION FOR LOAN LOSSES
- - -------------------------
No additional provision was made for loan losses in the first quarter of
1996. The Savings Bank's policy is to maintain a minimum allowance for loan
losses equal to approximately 0.75% to 1.00% of risk-based assets. The current
percentage is 1.02%. Allowance for loan losses as a percentage of non-performing
assets was 426.67% and 443.77% at March 31, 1996 and 1995, respectively. At
March 31, 1996 non-performing assets amounted to $836,000 as compared to $1.6
million at March 31, 1995.
NON-INTEREST INCOME
- - -------------------
Non-interest income amounted to $249,000 as compared to $235,000 for the
three month period ended March 31, 1996 and 1995, respectively, an increase of
$13,000, or 5.45%. The major components were an increase in fees and service
charges on deposit related activities which are included in other non-interest
income of $94,000, partially offset by a decrease in insurance commissions of
$80,000.
NON-INTEREST EXPENSE
- - --------------------
Non-interest expense amounted to $3.0 million for the three month period
ended March 31, 1996 as compared to $2.6 million for the same period in 1995, an
increase of $352,000, or 13.41%. The major components of the increase, which are
included in other non-interest expense, were promotional costs for the HIGH
PERFORMANCE CHECKING program of $102,000, stationery, printing and supplies of
$53,000 and general operating expenses of $76,000.
INCOME TAXES
- - ------------
Federal and state income taxes amounted to $652,000 as compared to
$685,000 for the quarter ended March 31, 1996 and 1995, respectively, a decrease
of $33,000, or 4.88%. The decrease in income tax is the direct result of
decrease in taxable income of $88,000. The effective tax rates for the period
were 38.09% and 38.08%, respectively. The normal combined federal and state
income tax rate approximates 38.0%.
19
<PAGE> 20
ASSET/LIABILITY MANAGEMENT and
INTEREST SENSITIVITY ANALYSIS
- - -----------------------------
One of the ways the Company seeks to manage its assets and liabilities is
by examining the extent to which they are "interest rate sensitive" and by
monitoring its interest rate sensitivity "gap". If an asset or liability can be
repriced or will mature within a specific time period, it is said to be interest
rate sensitive within that time period. The interest rate sensitivity gap is the
difference between the anticipated amount of interest-earning assets, based upon
certain assumptions, which reprice or mature within a given time period, and the
anticipated amount of interest-bearing liabilities, based upon certain
assumptions, which reprice or mature within that same time period. An interest
rate sensitivity gap is considered positive when the amount of interest rate
sensitive assets exceeds the interest rate sensitive liabilities. It is
considered negative when the amount of interest rate sensitive liabilities
exceed the amount of interest rate sensitive assets. During periods of falling
interest rates, a negative gap would tend to increase interest income while a
positive gap would tend to decrease interest income. However, during periods of
rising interests, a negative gap would tend to adversely affect interest income
while a positive gap would tend to increase interest income. Management attempts
to absorb the impact of market interest rate fluctuations by shortening, where
possible, the asset maturities and repricing dates.
At March 31, 1996, the Company had a positive cumulative one year gap of
$57.6 million, or 8.60% of total assets. At December 31, 1995, the positive
cumulative one year gap was $78.9 million, or 11.60% of total assets. The
Company manages its one year gap by emphasizing the matching of loan and
investment repayments and maturities with origination and purchase of loans and
securities with similar maturities. Fifty six percent (56.00%) of all loans and
mortgage-backed securities at March 31, 1996 are either one to three year
adjustable rate or fixed rate with a remaining term of three years or less.
Furthermore, management has engaged in new loan products which have short terms
and higher yields to improve its interest rate risk. Nonetheless, the Company
closely monitors its interest rate risk position with regard to overall interest
rates and credit policies.
The following table shows the amounts of interest-earning assets and
interest-bearing liabilities at March 31, 1996 and their maturity or repricing
periods as anticipated by the Company. These repricing periods are based on
contractual terms of the asset or liability, or, if a maturity or repricing date
is not in the contract, on certain assumptions of prepayment and decay rates.
The prepayment assumptions used were published by the Office of Thrift
Supervision ("OTS") as of December 31, 1995. The decay rate assumptions used are
based on the Company's assumptions and historical performance. Management
believes that these assumptions approximate actual experience and consider them
reasonable. These assumptions may or may not be indicative of actual prepayment
and withdrawals experiences by the Company.
20
<PAGE> 21
<TABLE>
<CAPTION>
At Mar. 31, 1996
------------------------------------------------------------------------------------
More Than More Than More Than More Than More Than
Three Three Mths One Year Three Five Ten Years
Months Months to to Three Years to Years to to 20 More Than
or Less One Year Years Five Years Ten Years Years 20 Years Total
------- ---------- --------- ---------- --------- --------- --------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Mortgage loans (1) $70,210 $184,382 $88,441 $74,731 $36,376 $17,220 $1,124 $472,484
Other loans (1) 5,454 9,505 14,341 1,380 68 52 3 30,803
Mortgage-backed securities 15,783 57,233 12,035 4,469 5,913 2,787 297 98,517
Interest-earning deposits 7,638 7,638
Federal funds sold 1,700 1,700
Commercial paper 1,700 3,500 5,200
Investment securities 9,360 9,485 2,996 6,000 250 0 28,091
-------- ------- ------- ------- ------- ------- ------- ---------
Total interest-earning assets 111,845 264,105 117,813 86,580 42,607 20,059 1,424 644,433
-------- ------- ------- ------- ------- ------- ------- ---------
Less unearned discount and
deferred fees (53) 138 (205) (274) (67) (32) 0 (493)
Less allowance for loan losses (533) (1,351) (747) (522) (248) (118) (8) (3,527)
Total net interest-earning assets 111,259 262,892 116,861 85,784 42,292 19,909 1,416 640,413
-------- ------- -------- ------- ------- ------- ------- --------
Interest-bearing liabilities:
Passbook and certificate accounts 54,063 169,248 152,318 27,459 26,419 5,506 741 435,754
NOW, money market and commercial
checking accounts 1,272 3,720 14,252 8,152 20,855 15,329 3,546 67,126
Borrowed funds 77,182 11,061 5,257 0 0 93,500
--------- ------- --------- ------- -------- -------- -------- --------
Total interest-bearing liabilities 132,517 184,029 171,827 35,611 47,274 20,835 4,287 596,380
--------- ------- --------- ------- -------- -------- -------- --------
Interest sensitivity gap per period ($21,258) $78,863 ($54,966) $50,173 ($4,982) ($926) ($2,871) $44.033
========= ======= ========= ======= ======== ======== ======== ========
Cumulative interest sensitivity gap ($21,258) $57,605 $2,639 $52,812 $47,830 $46,904 $44,033
========= ======= ========= ======= ======== ======== ========
Cumulative interest sensitivity gap as a
percentage of total assets (3.17%) 8.60% 0.39% 7.88% 7.14% 7.00% 6.57%
Cumulative net interest-earning assets as a
percentage of net interest-bearing liabilities 83.96% 118.20% 100.54% 110.08% 108.37 107.92% 107.38%
(1) For purposes of the gap analysis, mortgage and other loans are reduced for
non-performing lonas equal $492,000 for mortgage loans and $344,000 for
other loans, for a total of $836,000
</TABLE>
LIQUIDITY
- - ---------
The Savings Bank's average liquidity ratio during the first quarter of
1996 ranged from 6.54% to 6.91% and was at 6.91% on March 31, 1996. Regulations
of the Office of Thrift Supervision ("OTS") require the Savings Bank to maintain
a minimum average balance of liquid assets equal to 5.00% of the Savings Bank's
withdrawable deposits plus short-term borrowings calculated on a monthly basis.
The Company's total funds provided during the quarter ended March 31, 1996
were $97.7 million and were made up of loans and mortgage-backed securities
repayment of $38.2 million, borrowed funds $32.5 million (all of which were
reverse repurchase agreements), net savings deposits $15.5 million, maturities
of investments $9.7 million, and miscellaneous cash receipts $1.8 million.
During the same period in 1995 total funds provided were $33.5 million made up
of loan and mortgage-backed securities principal repayments of $18.2 million,
net savings deposits $6.6 million, maturities of investments $6.4 million and
miscellaneous cash receipts of $3.2 million.
Funds used during the quarter ended March 31, 1996 were $94.4 million
consisting of repayment of borrowings $56.5 million (of which $33.5 million were
reverse repurchase
21
<PAGE> 22
agreements), loan originations and purchases $16.8 million, purchase of
mortgage-backed securities $8.1 million, purchase of investment securities $7.3
million and general operating requirements $5.7 million. During the same period
in 1995, funds used were $32.1 million, consisting of loan originations and
purchases $13.2 million, investment security purchases $6.2 million, purchases
of treasury stock $4.1 million, repayment of borrowings $4.0 million and general
operating requirements $4.6 million.
An alternative source of funds for the Savings Bank is the Federal Home
Loan Bank of Chicago's open line of credit. These advances are collateralized by
the capital stock of the Federal Home Loan Bank of Chicago held by the Savings
Bank and by certain of the Savings Bank's mortgage loans and mortgage-backed
securities. This typically less costly source of funds is used to increase
liquidity when needed. During the quarter ended March 31, 1996 no such need
arose and, in fact, excess funds were used to pay down these borrowings in the
amount of $23.0 million.
22
<PAGE> 23
LIBERTY BANCORP, INC.
AND SUBSIDIARY
PART II. OTHER INFORMATION
- - -------- -----------------
Item 1. Legal proceedings.
NONE
Item 2. Changes in securities.
NONE
Item 3. Defaults upon senior securities.
NONE
Item 4. Submission of matters to a vote of security holders.
NONE
Item 5. Other information.
On January 12, 1996, the Company announced a stock repurchase
program of 5.00% or 128,000 shares of its outstanding common
stock. As of March 31, 1996, 65,000 shares had been purchased
at a cost of $1,641,250 or an average price of $25.25 per
share. The Company has repurchased a total of 871,384 shares
at an average price of $22.29 since inception. To date,
options covering 41,756 shares have been exercised with shares
being issued from treasury stock. Also, 10,400 treasury shares
were issued to the MRRP.
On January 10, 1996, the Company declared a quarterly cash
dividend of $0.15 per share which was paid on March 1, 1996 to
stockholders of record on February 16, 1996.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
(2) Plan of Acquisition, reorganization, arrangement, liquidation or
succession: N/A
(3) (i) Articles of Incorporation: Restated Certificate of
Incorporation of Liberty Bancorp, Inc. is incorporated by
reference into this document from the Exhibits to Form S-1,
Registration Statement, filed on September 30, 1991,
Registration No. 33-42656.
(ii) By -Laws: Bylaws of Liberty Bancorp, Inc. are incorporated by
reference
23
<PAGE> 24
into this document from the Exhibits to Form S-1, Registration
Statement, filed on September 30, 1992, Registration No.
33-42656.
(4) Instruments defining the rights of security holders, including
indentures: Stock Certificate of Liberty Bancorp, Inc. is
incorporated by reference into this document from the Exhibits to
Form S-1, Registration Statement, filed on September 30, 1991,
Registration No. 33-42656.
(10) Material Contracts: N/A
24
<PAGE> 25
(11) Statement regarding computation of per share earnings:
See Exhibit 11 following the Signature Page
(15) Letter regarding unaudited interim financial information: N/A
25
<PAGE> 26
(18) Letter regarding change in accounting principles: N/A
(19) Report furnished to security holders: N/A
(22) Published report regarding matters submitted to vote of security
holders: N/A
(23) Consents of experts and counsel: N/A
(24) Power of attorney: N/A
(27) Financial Data Schedule:
See Exhibit 27 following the Signature Page
B. Reports on Form 8-K
NONE
26
<PAGE> 27
LIBERTY BANCORP, INC.
AND
SUBSIDIARY
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.
LIBERTY BANCORP, INC.
Date: May 8, 1996 By: /s/ Fredric G. Novy
--------------------- ------------------------------
Fredric G. Novy
Chief Executive Officer,
President
By: /s/ Joseph W. Stachnik
Date: May 8, 1996 ------------------------------
--------------------- Joseph W. Stachnik
Chief Financial Officer,
Vice President
27
<PAGE> 1
Exhibit 11
Statement regarding computation of per share earnings:
<TABLE>
<CAPTION>
Three Months
Ended Mar. 31,
1996 1995
---- ----
(in thousands
except per share data)
<S> <C> <C>
Net Income $1,060 $1,114
====== ======
Weighted average common
shares outstanding 2,519 2,827
Common stock equivalents
due to dilutive effect
of stock options 169 174
------ ------
Total weighted average
common shares and
equivalents outstanding 2,688 3,001
====== ======
Primary earnings per
share $ .39 $ .37
====== ======
Total weighted average
common shares and equiva-
lent outstanding 2,688 3,001
Additional dilutive shares
using end of period
market value versus average
market value for the
period when utilizing the
treasury stock method
regarding stock options 0 2
------ ------
Total outstanding shares
for fully diluted earnings
per share computation 2,688 3,003
====== ======
Fully diluted earnings
per share $ .39 $ .37
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This legend contains summary information extracted from the Form 10-Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000879041
<NAME> LIBERTY BANCORP, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 7,853
<INT-BEARING-DEPOSITS> 7,638
<FED-FUNDS-SOLD> 1,700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 100,411
<INVESTMENTS-CARRYING> 33,236
<INVESTMENTS-MARKET> 33,404
<LOANS> 498,366
<ALLOWANCE> 3,527
<TOTAL-ASSETS> 669,949
<DEPOSITS> 502,880
<SHORT-TERM> 83,500
<LIABILITIES-OTHER> 9,751
<LONG-TERM> 10,000
0
0
<COMMON> 13,392
<OTHER-SE> 50,426
<TOTAL-LIABILITIES-AND-EQUITY> 669,949
<INTEREST-LOAN> 9,797
<INTEREST-INVEST> 2,189
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 11,986
<INTEREST-DEPOSIT> 6,098
<INTEREST-EXPENSE> 7,542
<INTEREST-INCOME-NET> 4,444
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,981
<INCOME-PRETAX> 1,712
<INCOME-PRE-EXTRAORDINARY> 1,712
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,060
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.39
<YIELD-ACTUAL> 7.36
<LOANS-NON> 836
<LOANS-PAST> 0
<LOANS-TROUBLED> 458
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,538
<CHARGE-OFFS> 0<F1>
<RECOVERIES> 0<F1>
<ALLOWANCE-CLOSE> 3,527
<ALLOWANCE-DOMESTIC> 3,527
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1> This information is not contained in Form 10-Q.
</FN>
</TABLE>
