<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996.
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 0-19985
WESTCO BANCORP, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3823760
---------- ---------------
(State or other jurisdiction I.R.S. Employer
of incorporation or Identification
organization) Number
2121 South Mannheim Road, Westchester, Illinois 60154
- ----------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (708) 865-1100
---------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes (X) No ( )
As of August 9, 1996, the Registrant had 2,611,643 shares of Common stock
issued and outstanding.
<PAGE> 2
WESTCO BANCORP. INC.
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition
June 30, 1996 (Unaudited) and December 31, 1995 1
Consolidated Statements of Income, Three and Six Months
Ended June 30, 1996 and 1995 (Unaudited) 2
Consolidated Statements of Cash Flows, Six Months Ended
June 30, 1996 and 1995 (Unaudited) 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5 - 8
Part II. OTHER INFORMATION 9 - 10
<PAGE> 3
WESTCO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
June 30, December 31,
------------- ------------
1996 1995
---- ----
(unaudited)
Assets
- ------
<S> <C> <C>
Cash and amounts due from
depository institutions $ 4,292,518 4,418,600
Interest-bearing deposits 5,475,410 3,971,471
----------- -----------
Total cash and cash equivalents 9,767,928 8,390,071
Investment securities (market value of
$80,802,492 at June 30, 1996 and
$82,359,066 at December 31, 1995) 80,376,044 82,110,883
Investment securities held for trade 783,784 501,150
Loans receivable, net 214,972,005 209,069,248
Stock in Federal Home Loan Bank of Chicago 1,876,000 1,861,400
Office properties and equipment, net 1,803,385 1,868,567
Accrued interest receivable 1,682,683 1,563,668
Prepaid expenses and other assets 896,058 777,665
----------- -----------
Total assets 312,157,887 306,142,652
=========== ===========
Liabilities and Stockholders' Equity
- ------------------------------------
Deposits 256,344,312 250,643,639
Advance payments by borrowers for taxes
and insurance 3,017,978 2,873,411
Other liabilities 4,559,378 4,708,983
----------- -----------
Total liabilities 263,921,668 258,226,033
----------- -----------
Stockholders' Equity:
Common stock 34,813 34,768
Additional paid-in capital 22,488,841 22,298,822
Retained earnings 37,857,289 36,450,398
Treasury stock (11,147,498) (9,620,374)
Common stock acquired by ESOP (746,571) (871,000)
Common stock awarded by Association Retention Plan (250,655) (375,995)
----------- -----------
Total stockholders' equity 48,236,219 47,916,619
----------- -----------
Total liabilities and stockholders' equity $ 312,157,887 306,142,652
=========== ===========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 4
WESTCO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1996 1995 1996 1995
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Interest income:
Interest on loans $ 4,646,110 4,422,127 9,148,852 8,727,413
Interest on investment securities 1,067,915 1,073,223 2,113,127 2,046,108
Interest on interest-bearing deposits 114,141 101,410 256,759 176,014
Dividends on securities held for trade 2,410 2,525 3,864 2,525
Dividends on FHLB stock 31,591 27,927 61,693 55,821
--------- --------- ---------- ----------
Total interest income 5,862,167 5,627,212 11,584,295 11,007,881
--------- --------- ---------- ----------
Interest expense:
Interest on deposits 3,073,739 2,811,238 6,125,778 5,399,828
--------- --------- ---------- ----------
Total interest expense 3,073,739 2,811,238 6,125,778 5,399,828
--------- --------- ---------- ----------
Net interest income 2,788,428 2,815,974 5,458,517 5,608,053
--------- --------- ---------- ----------
Non-interest income:
Loan fees and service charges 63,601 40,065 120,824 81,285
Commission income 77,481 65,443 137,802 146,568
Unrealized gain (loss) on
trading account securities (30,392) 23,125 (32,692) 28,125
Gain (loss) on sale of
trading account securities 4,635 19,063 (32,041) 104,468
Other income 61,819 40,353 121,689 120,490
--------- --------- ---------- ----------
Total non-interest income 177,144 188,049 315,582 480,936
--------- --------- ---------- ----------
Non-interest expense:
Staffing costs 796,787 798,270 1,576,428 1,576,811
Advertising 42,301 27,247 77,164 59,498
Occupancy and equipment expenses 119,472 120,340 239,069 243,884
Data processing 51,244 56,999 104,979 116,176
Federal deposit insurance premiums 147,018 143,379 293,544 286,759
Other 163,789 170,774 334,070 364,735
--------- --------- ---------- ----------
Total non-interest expense 1,320,611 1,317,009 2,625,254 2,647,863
--------- --------- ---------- ----------
Income before income taxes 1,644,961 1,687,014 3,148,845 3,441,126
Provision for income taxes 586,750 610,600 1,121,400 1,237,360
--------- --------- ---------- ----------
Net income $ 1,058,211 1,076,414 2,027,445 2,203,766
========= ========= ========== ==========
Earnings per share-primary $ .37 .37 .71 .74
Earnings per share-fully diluted $ .37 .37 .70 .74
Dividends declared per common share $ .12 .10 .24 .20
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 5
WESTCO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1996 1995
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,027,445 2,203,766
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation 102,435 100,534
Amortization of premiums and discounts on
investment securities - net (64,638) (394,404)
Amortization of cost of stock benefit plans 249,769 249,768
Unrealized (gain) loss on trading account securities 32,692 (28,125)
Net (gain) loss on sale of trading account securities 32,041 (104,468)
Federal Home Loan Bank stock dividend - (26,800)
Proceeds from sales of trading account securities 2,778,958 1,445,296
Purchase of trading account securities (3,126,325) (1,005,625)
Decrease in deferred income on loans (151,980) (188,403)
Increase in current and deferred federal income tax 526,890 150,412
(Increase) decrease in interest receivable (119,015) 174,053
Increase in interest payable 14,151 9,725
Change in prepaid and accrued items, net (660,625) (973,983)
----------- -----------
Net cash provided by operating activities 1,641,798 1,611,746
----------- -----------
Cash flows from investing activities:
Proceeds from maturities of investment securities 34,100,000 47,400,000
Purchase of investment securities (32,300,523) (48,167,596)
Purchase of Federal Home Loan Bank stock (14,600) (94,200)
Disbursements for loans (26,831,055) (19,852,776)
Loan repayments 21,080,278 22,150,479
Proceeds from sale of real estate owned - 447,180
Property and equipment expenditures (37,253) (55,592)
----------- -----------
Net cash provided by (for) investing activities (4,003,153) 1,827,495
----------- -----------
Cash flows from financing activities:
Proceeds from exercise of stock options 30,000 40,000
Deposit account receipts 124,097,608 140,645,013
Deposit account withdrawals (123,923,323) (142,718,848)
Interest credited to deposit accounts 5,526,388 4,972,287
Increase in advance payment by
borrowers for taxes and insurance 144,567 184,998
Payment of dividends (608,904) (565,388)
Purchase of treasury stock (1,527,124) (2,170,770)
----------- -----------
Net cash provided by financing activities 3,739,212 387,292
----------- -----------
Net change in cash and cash equivalents 1,377,857 3,826,533
Cash and cash equivalents at beginning of period 8,390,071 6,146,066
----------- -----------
Cash and cash equivalents at end of period $ 9,767,928 9,972,599
=========== ===========
Cash paid during the period for:
Interest $ 6,111,627 5,390,103
Income taxes 1,109,922 1,061,900
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
WESTCO BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and Footnotes
required by generally accepted accounting principles for complete financial
statements. However, in the opinion of management, all adjustments (which are
normal and recurring in nature) necessary for a fair presentation have been
included. The results of operations for the three months and six months ended
June 30, 1996 are not necessarily indicative of the results which may be
expected for the entire year.
Note B - Principles of Consolidation
The accompanying unaudited consolidated financial statements include the
accounts of Westco Bancorp, Inc. (the "Company") and its wholly-owned
subsidiaries First Federal Savings and Loan Association of Westchester (the
"Association") and Westco, Inc. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Note C - Stock Repurchase
Since the initial public offering, the Office of Thrift Supervision has approved
six separate stock repurchase programs as authorized by the Company's Board of
Directors. As of August 9, 1996, 869,667 shares had been repurchased at an
average price of $13.06. The current stock repurchase program permits the
repurchase of up to 135,000 shares; and, as of August 9, 1996, 47,590 shares
remain to be repurchased in the open market.
Note D - Earnings Per Share
Earnings per share of common stock have been determined by dividing net income
for the period by the weighted average number of shares of common stock and
common stock equivalents outstanding, after consideration of the 3 for 2 stock
split completed on May 17, 1996. Stock options are regarded as common stock
equivalents and are therefore considered in both primary and fully diluted
earnings per share calculations. Common stock equivalents are computed using the
treasury stock method.
Note E - Stockholders' Equity
On April 16, 1996, the Board of Directors of Westco Bancorp, Inc. approved a 3
for 2 stock split, effected in the form of a stock dividend which was payable on
May 17, 1996 to stockholders of record on April 30, 1996. Accordingly, stock-
holders of record received 1 additional share for each 2 shares owned as of
April 30, 1996. All prior share related information has been restated to reflect
the stock split effect, including earnings per share data.
-4-
<PAGE> 7
Management's Discussions and Analysis
of Financial Condition and Results of Operations
Liquidity and Capital Resources:
- --------- --- ------- ---------
The Company's primary sources of funds are deposits, proceeds from
principal and interest payments on loans and proceeds from the maturity of
investment securities. While maturities and scheduled amortization of loans and
investment securities are a predictable source of funds, deposit flows and
mortgage prepayments are greatly influenced by general interest rates, economic
conditions, and competition from various financial markets. The primary business
activity of the Company, that of making conventional mortgage loans on
residential housing, is likewise affected by economic conditions.
The Association is required to maintain minimum levels of liquid assets as
defined by OTS regulations. This requirement, which may be varied at the
direction of the OTS depending upon economic conditions and deposit flows, is
based upon a percentage of deposits and short-term borrowings. The required
ratio is currently 5.0%. The Association has historically maintained a high
level of liquid assets. At June 30, 1996, the Association's liquidity ratio was
32.53%.
The Company employs an Interest Rate Risk Management strategy of offsetting
interest rate risk embedded in the mortgage portfolio by maintaining a large
part of the assets in overnight deposits and a laddered portfolio of U.S.
Treasury and Agency securities. This strategy results in a relatively short
weighted average maturity of these assets. At June 30, 1996, these investments
totalled $85.9 million, or 27.5% of assets, with a weighted average life of
approximately 12.1 months. At December 31, 1995, these investments totalled
$86.1 million, or 28.1% of assets, with a weighted average life of approximately
12 months.
The Company's most liquid assets are cash and cash equivalents. The levels
of these assets are dependent on the Company's operating, financing, lending and
investing activities during any given period. At June 30, 1996, cash and cash
equivalents totalled $9.8 million.
The primary investing activity of the Company is the origination of
mortgage loans. During the six months ended June 30, 1996 and 1995, the Company
disbursed loans in the amounts of $26.8 million and $19.9 million, respectively.
Other investing activities include the purchase of investment securities, which
totalled $32.3 million for the six months ended June 30, 1996 and $48.2 million
for the six months ended June 30, 1995. These activities in 1996 were funded
primarily by principal repayments on loans totalling $21.1 million and
maturities of investment securities totalling $34.1 million. The six month
activity for 1995 was funded by principal repayments on loans and maturities of
investment securities in the amounts of $22.2 million and $47.4 million
respectively.
At June 30, 1996, the Company had outstanding loan commitments of $7.8
million. At that same date, there were no commitments to purchase loans or
investment securities. The Company anticipates that it will have sufficient
funds available to meet its current loan commitments. Certificates of deposit
which are scheduled to mature in one year or less from June 30, 1996 totalled
$75.5 million. Management believes that a significant portion of such deposits
will remain with the Company.
The regulatory standards of the Office of Thrift Supervision impose the
following capital requirements: a risk based capital standard expressed as a
percent of risk based assets, a leverage ratio of core capital to total adjusted
assets, and a tangible capital ratio expressed as a percent of total adjusted
assets. As of June 30, 1996, the Association exceeded all regulatory capital
standards.
-5-
<PAGE> 8
Capital requirements, ratios and balances are as follows:
<TABLE>
<CAPTION>
Actual Required Actual Excess
Capital Capital Capital Capital Capital
Required Ratio Amount Amount Amount
At December 31, 1995: -------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Tangible 1.5% 13.3% $4,520 $40,013 $35,493
Core 3.0 13.3 9,040 40,013 30,973
Risk Based:
Tier I (core) 4.0 32.4 4,937 40,013 35,076
Total 8.0 33.1 9,873 40,896 31,023
At June 30, 1996:
Tangible 1.5% 12.7% $4,537 $38,390 $33,853
Core 3.0 12.7 9,074 38,390 29,316
Risk Based:
Tier I (core) 4.0 30.3 5,068 38,390 33,322
Total 8.0 31.0 10,135 39,273 29,138
</TABLE>
CHANGE IN FINANCIAL CONDITION OVER THE SIX MONTHS ENDED JUNE 30, 1996:
- ------ -- --------- --------- ---- --- --- ------ ----- ---- -- ----
Total assets increased $6.0 million, or 2.0%, to $312.1 million at June 30,
1996 from $306.1 million at December 31, 1995. This increase is primarily
attributable to an increase in savings deposits of $5.7 million, which was used
to fund loan originations.
Loans receivable increased $5.9 million, or 2.8%, to $215.0 million from
$209.1 million at December 31, 1995. The increase is primarily a function of
loan originations of $26.8 million offset by amortization and prepayments of
$21.1 million. The growth in loans receivable is due to continued originations
of one-to-four family loans.
Investment securities decreased $l.7 million, or 2.1%, to $80.4 million at
June 30, 1996. Cash and cash equivalents totalled $9.8 million at June 30, 1996
compared to $8.4 million at December 31, 1995.
Savings deposits increased $5.7 million, or 2.3%, to $256.3 million at June
30, 1996 from $250.6 million at December 31, 1995. The Company experienced a net
deposit inflow of $175,000 (before interest credited) for the six month period
ended June 30, 1996.
The balance of non-performing loans, which represented all of the Company's
non-performing assets, totalling $900,000 at June 30, 1996, decreased $210,000,
or 18.4% from $1.1 million at December 31, 1995 due to payment in full of three
loans. The ratio of non-performing loans to total loans was .43% at June 30,
1996 compared to 0.55% at December 31, 1995 while the ratio of non-performing
assets to total assets was 0.30% and 0.37% at June 30, 1996 and December 31,
1995 respectively. The Company's allowance for loan losses totalled $882,800, or
94.9% of non-performing loans, at June 30, 1996.
During 1992, the Association's ESOP borrowed $1,840,000 from an unrelated
third party to fund the Association's ESOP plan which was established in
connection with the conversion. During 1993, Westco Bancorp, Inc. refinanced
this loan on essentially the same terms as the original lender. The June 30,
1996 balance of $746,600 is eliminated in the consolidation of the Company's
financial statements. At December 31, 1995, the outstanding balance totalled
$871,000.
Retained earnings increased $1.4 million, or 3.9%, to $37.9 million as a
result of earnings for the six month period ended June 30, 1996 offset by the
declaration of dividend payments to stockholders during the same period.
-6-
<PAGE> 9
Stockholders' equity totalled $48.2 million or 15.5% of total assets at June 30,
1996, and the book value per common share outstanding was $18.40.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1996
- ---------- -- --------- ------- --- --- ----- ------ ----- ---- -- ----
AND JUNE 30, 1995:
- --- ---- -- ----
Net income for the quarter ended June 30, 1996 decreased $18,000 to $1.06
million from $l.08 million for the quarter ended June 30, 1995. In the quarter
ended June 30, 1996 net interest income decreased $28,000, or 1.0%, due to
reductions in both the interest rate spread and net interest margin. The
Company's interest rate spread averaged 2.92% during the 1996 second quarter,
compared to 3.23% during the 1995 second quarter. The Company's net interest
margin averaged 3.69% for the quarter ended June 30, 1996 compared to 3.92% for
the quarter ended June 30, 1995. During the first quarter of 1996, the Company's
net interest rate spread averaged 2.81% and its net interest margin averaged
3.58%.
During the three months ended June 30, 1996 and June 30, 1995 no additional
provision for loan losses was made based upon (1) the absence of any specific
asset quality problems, (2) the current level of general loan loss reserves, and
(3) management's assessment of the inherent risk in the Company's mortgage
portfolio and possible prospective economic and regulatory conditions.
Non-interest income for the second quarter of 1996 decreased $11,000 over
the same quarter in 1995 due primarily to lower realized and unrealized gains on
investments held for trading offset by an increase in other income.
Non-interest expense remained relatively stable, increasing by $4,000 for
the three months ended June 30, 1996 from the level for the three months ended
June 30, 1995.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1996
- ---------- -- --------- ------- --- --- --- ------ ----- ---- -- ----
AND JUNE 30, 1995:
- --- ---- -- ----
Net income for the six months ended June 30, 1996 decreased $177,000 to
$2.03 million from $2.20 million for the six months ended June 30, 1996. In the
six months ended June 30, 1996 interest income increased $576,000 from the year
earlier, and interest expense increased $726,000 resulting in a reduction of the
Company's net interest margin. The Company's net interest margin averaged 3.64%
for the six months ended June 30, 1996, compared to 3.90% for the same period in
1995. The Company's interest rate spread averaged 2.87% during the six months
ended June 30, 1996, compared to 3.21% during the same period in 1995.
During the six months ended June 30, 1996 and 1995 no additional provision
for loan losses was made based upon the absence of any specific asset quality
problems, the current level of general loan loss reserves and management's
assessment of the inherent risk in the Company's mortgage portfolio and possible
prospective economic and regulatory conditions.
Non-interest income for the six months of 1996 decreased $165,000 over the
same period in 1995, due to a decrease of $197,000 in the net of realized and
unrealized gains and losses on investments held for trading, and a decrease in
commissions on sales of insurance and investment products of $9,000. which were
partially offset by a net increase in loan fees and service charges of $40,000,
due in part to increased lending volumes.
-7-
<PAGE> 10
Non-interest expense decreased $23,000 for the six months ended June 30,
1996 from the level for the six months ended June 30, 1995 primarily as a result
of slight decreases in several components of general operating costs.
The provision for income taxes decreased as a result of the decreased
earnings before income taxes. The effective tax rate for the six months ended
June 30, 1996 and 1995 was 35.6% and 36.0% respectively.
IMPACT OF NEW ACCOUNTING STANDARDS
- ------ -- --- ---------- ---------
Statement of Financial Accounting Standards No. 121 ("SFAS 121"),
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of," is effective for fiscal years beginning after December 15, 1995.
The statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. An impairment loss is recognized if the sum of the
expected future cash flows is less than the carrying amount of the asset. The
Company adopted SFAS 121 effective January 1, 1996, resulting in no material
impact on the Company's consolidated financial position or results of
operations.
In May, 1995, the FASB issued Statement of Financial Accounting Standards
No. 122 ("SFAS 122"), "Accounting for Mortgage Servicing Rights." This statement
amends Statement of Financial Accounting Standards No. 65, "Accounting for
Certain Mortgage Banking Activities," to require that a mortgage banking
enterprise recognize as separate assets rights to service mortgage loans for
others however those servicing rights are acquired. SFAS 122 requires that a
mortgage banking enterprise assess its capitalized mortgage servicing rights for
impairment based on the fair value of those rights. SFAS 122 is effective for
fiscal years beginning after December 15, 1995. SFAS 122 will not have a
material effect on the Company's financial position or results of operations
since the Association does not service loans for others.
In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation." This
statement estblishes a fair value-based method of accounting for stock options
which encourages employers to account for stock compensation awards based on
their fair value at the date the awards are granted. The resulting compensation
award would be shown as an expense on the income statement.
SFAS 123 also permits entities to continue to use the intrinsic value
method, allowing them to continue to apply current accounting requirements,
which generally result in no compensation cost for most fixed stock option
plans. If the intrinsic value method is retained, SFAS 123 requires
significantly expanded disclosure, including disclosure of the pro-forma amount
of net income and earnings per share as if the fair value-based method were used
to account for stock-based compensation. SFAS 123 is effective for fiscal years
beginning after December 15, 1995, however, employers will be required to
include in that year's financial statements, information about options granted
in 1995. The Company has determined that it will continue to apply the APB
Opinion #25 method in preparing its consolidated financial statements.
-8-
<PAGE> 11
RECENT DEVELOPMENTS
- ------ ------------
Legislative issues regarding the recapitalization of the Savings
Association Insurance Fund (SAIF) of the FDIC, the disparity in bank and thrift
deposit insurance premiums, FICO bond interest payments, the merger of SAIF and
BIF and other pending regulatory issues remain unresolved. Management cannot
predict the impact future legislation or regulatory changes may have on the
operations of the Company. However, without legislation addressing the FDIC
insurance premium disparity, the Company, like other thrift holding companies of
well capitalized thrifts posing no-foreseeable risk to the FDIC, will continue
to pay deposit insurance premiums significantly higher than comparable banks. In
addition, management cannot predict the ultimate effect the continued nationwide
migration of SAIF insured deposits to BIF insurance coverage may have on the
Company's operation.
Legislation regarding bad debt recapture has been passed by Congress and
sent to the President for signature. The legislation requires recapture of
reserves accumulated after 1987. The recapture tax on post 1987 reserves must be
paid over a six year period starting in 1996. The payment of the tax can be
deferred in each of 1996 and 1997 if an institution originates at least the same
average annual principal amount of mortgage loans that it originated in the six
years prior to 1996. Management does not believe that this legislation will have
a material impact on the operations of the Company.
-9-
<PAGE> 12
PART II - OTHER INFORMATION
WESTCO BANCORP, INC.
Item 1. LEGAL PROCEEDINGS
----- -----------
From time to time, the Association is a party to legal proceedings in the
ordinary course of business, wherein it enforces its security interest. The
Company and the Association are not engaged in any legal proceedings of a
material nature at the present time.
Item 2. CHANGES IN SECURITIES - Not applicable
---------------------
Item 3. DEFAULTS UPON SENIOR SECURITIES - Not applicable
-------- ---- ------ ----------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - Not applicable
---------- -- ------- -- - ---- -- -------- -------
Item 5. OTHER INFORMATION
----- -----------
STOCK OPTIONS
On June 17, 1996, in accordance with the provisions of the Westco Bancorp,
Inc. 1992 Incentive Stock Option Plan, which was approved by a vote of the
shareholders on September 29, 1992, Executive Vice President, Gregg P. Goossens
exercised options on 1,500 shares of Common Stock granted to him.
STOCK REPURCHASE PROGRAM
The Company began its sixth common stock repurchase plan in September,
1995. Under the terms of the repurchase plan, as approved by the Board of
Directors, up to 135,000 shares may be repurchased. As of August 9, 1996, 87,410
shares had been repurchased.
COMMON STOCK SHARES OUTSTANDING
As a result of the exercise of options and shares repurchased in accordance
with the repurchase plan previously described, the number of common shares out-
standing on August 9, 1996 totalled 2,611,643 shares.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
-------- --- ------- -- ---- ---
(a) The following exhibits are filed as part of this report:
3.1 Certificate of Incorporation of Westco Bancorp, Inc.*
3.2 Bylaws of Westco Bancorp, Inc.*
4.0 Stock Certificate of Westco Bancorp, Inc.*
11.0 Computation of earnings per share (filed herewith)
27.0 Financial Data Schedule (filed herewith)
* Incorporated herein by reference in this document from the
Exhibits to Form S-l, Registration Statement, filed on March 23,
1992 and any amendments thereto, Registration No. 33-46441.
(b) No reports on Form 8-K were filed this quarter.
-10-
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WESTCO BANCORP, INC.
--------------------
Registrant
DATE: August 9, 1996 BY: (s) /s/ David C. Burba
-----------------------------
David C. Burba
President and
Chief Executive Officer
DATE: August 9, 1996 BY: (s) /s/ Richard A. Brechlin
-----------------------------
Richard A. Brechlin
Executive Vice President and
Chief Financial Officer
DATE: August 9, 1996 BY: (s) /s/ Kenneth J. Kaczmarek
-----------------------------
Kenneth J. Kaczamarek
Vice President and
Chief Accounting Officer
-11-
EXHIBIT 11.0 - Computation of Earnings Per Share
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
6/30/96 6/30/96
------------ ----------
<S> <C> <C>
Net Income $1,058,210 $2,027,445
========== ==========
Weighted average shares outstanding 2,650,737 2,671,458
Common stock equivalents due to
dilutive effect of stock options 207,647 202,921
---------- ----------
Total weighted average common shares
and equivalents outstanding 2,858,384 2,874,379
========== ==========
Primary earnings per share $ 0.37 $ 0.71
========== ==========
Total weighted average common shares
and equivalents outstanding for
primary computation 2,858,384 2,874,379
Additional dilutive shares using the
end of period market value versus
the average market value when
applying the treasury stock method 6,075 * 10,801 *
---------- ----------
Total weighted average comon shares
and equivalents outstanding for
fully diluted computation 2,864,459 2,885,180
========== ==========
Fully diluted earnings per share $ 0.37 $ 0.70
========== ==========
</TABLE>
*If average share price is greater than ending price, the average price for
both primary and fully diluted is used for the calculation.
<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> 0000885413
<NAME> WESTCO BANCORP, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 4,292,518
<INT-BEARING-DEPOSITS> 5,475,410
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 783,784
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 80,376,044
<INVESTMENTS-MARKET> 80,802,492
<LOANS> 215,854,805
<ALLOWANCE> 882,800
<TOTAL-ASSETS> 312,157,887
<DEPOSITS> 256,344,312
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,577,356
<LONG-TERM> 0
0
0
<COMMON> 34,813
<OTHER-SE> 48,201,406
<TOTAL-LIABILITIES-AND-EQUITY> 312,157,887
<INTEREST-LOAN> 9,148,852
<INTEREST-INVEST> 2,435,443
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 11,584,295
<INTEREST-DEPOSIT> 6,125,778
<INTEREST-EXPENSE> 6,125,778
<INTEREST-INCOME-NET> 5,458,517
<LOAN-LOSSES> 0
<SECURITIES-GAINS> (64,733)
<EXPENSE-OTHER> 2,625,254
<INCOME-PRETAX> 3,148,845
<INCOME-PRE-EXTRAORDINARY> 3,148,845
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,027,445
<EPS-PRIMARY> .71
<EPS-DILUTED> .70
<YIELD-ACTUAL> 3.64
<LOANS-NON> 931,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 882,800
<CHARGE-OFFS> 0
<RECOVERIES> 0<F1>
<ALLOWANCE-CLOSE> 882,800
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 882,800
<FN>
<F1> Not contained in Form 10-Q.
</FN>
</TABLE>
