<PAGE>
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 March 31, 1997.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number 0-19985
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 May 5, 1997, the Registrant had 2,469,853 shares of Common stock
issued and outstanding.
<PAGE>
WESTCO BANCORP, INC.
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION Page
<S> <C>
Item 1. Financial Statements
Consolidated Statement of Financial Condition
March 31, 1997 (Unaudited) and December 31, 1996 1
Consolidated Statement of Income, Three Months
Ended March 31, 1997 and 1996 (Unaudited) 2
Consolidated Statement of Cash Flows, Three Months Ended
March 31, 1997 and 1996 (Unaudited) 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5 - 8
Part II. OTHER INFORMATION 9
</TABLE>
<PAGE>
WESTCO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------- -------------
(Unaudited)
Assets
- ------
<S> <C> <C>
Cash and amounts due from
depository institutions $ 3,389,416 3,511,480
Interest-bearing deposits 10,026,211 7,877,846
------------ -----------
Total cash and cash equivalents 13,415,627 11,389,326
Investment securities held for investment
(market value of $75,217,004 at
March 31, 1997 and $82,359,066 at
December 31, 1996) 62,402,839 68,737,012
Investment securities held for trade 964,113 826,875
Loans receivable, net 226,835,562 223,898,424
Real estate owned 113,636 -
Stock in Federal Home Loan Bank of Chicago 1,876,000 1,876,000
Office properties and equipment, net 1,901,649 1,909,043
Accrued interest receivable 1,489,151 1,504,690
Prepaid expenses and other assets 922,832 850,677
------------ -----------
Total assets 309,921,409 310,992,047
============ ===========
Liabilities and Stockholders' Equity
- ----------- --- ------------- ------
Deposits 254,295,399 255,153,961
Advance payments by borrowers for taxes
and insurance 2,768,692 3,077,294
Other liabilities 4,606,829 4,928,016
------------ -----------
Total liabilities 261,670,920 263,159,271
------------ -----------
Stockholders' Equity:
Common Stock 34,886 34,843
Additional paid-in capital 22,568,069 22,518,095
Retained earnings 39,116,515 38,420,579
Treasury stock (12,846,408) (12,393,283)
Common stock acquired by ESOP (559,928) (622,143)
Common stock awarded by Association
Retention Plan (62,645) (125,315)
------------ -----------
Total stockholders' equity 48,250,489 47,832,776
------------ -----------
Total liabilities and stockholders's
equity $309,921,409 $310,992,047
=========== ===========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE>
WESTCO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
---------- ---------
(Unaudited)
<S> <C> <C>
Interest Income:
Interest on loans $4,682,417 4,502,742
Interest on investment securities 950,837 1,045,212
Interest on interest-bearing deposits 110,065 144,072
Dividends on FHLB stock 31,133 30,102
---------- ---------
Total interest income 5,774,452 5,722,128
---------- ---------
Interest expense:
Interest on deposits 3,069,408 3,052,039
---------- ---------
Total interest expense 3,069,408 3,052,039
---------- ---------
Net interest income 2,705,044 2,670,089
---------- ---------
Non-interest income:
Loan fees and service charges 60,420 57,223
Commission income 69,369 60,321
Gain (loss) on sale of trading securities 22,280 (36,676)
Unrealized gain (loss) on trading securities 2,414 (2,300)
Other income 57,537 59,870
---------- ---------
Total non-interest income 212,020 138,438
---------- ---------
Non-interest expense:
Staffing costs 810,438 779,641
Advertising 32,475 34,863
Occupancy and equipment expenses 125,959 119,597
Data processing 58,156 53,735
Federal deposit insurance premiums 41,400 146,526
Other 159,898 170,281
---------- ---------
Total non-interest expense 1,228,326 1,304,643
---------- ---------
Income before income taxes 1,688,738 1,503,884
Provision for income taxes 610,100 534,650
---------- ---------
Net income $ 1,078,638 969,234
========== =========
Earnings per share - primary $ .39 .34
Earnings per share - fully diluted $ .39 .34
Dividends declared per common share $ .15 .12
</TABLE>
See notes to consolidated financial statements.
-2-
<PAGE>
WESTCO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,078,638 969,234
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation 49,069 51,712
Amortization of premiums and discounts
on investment securities - net (35,150) (41,504)
Amortization of cost of stock benefit plans 124,885 124,884
(Gain) loss on sale of trading securities (75,721) 36,676
Unrealized (gain) loss on trading securities (3,414) 2,300
Purchase of trading securities (920,827) (2,760,075)
Proceeds from sale and redemption of
trading securities 862,724 2,540,274
Decrease in deferred income (64,486) (84,298)
Increase in current & deferred federal income
tax 318,015 531,928
(Increase) decrease in interest receivable 15,539 (60,824)
Increase in interest payable (2,916) 12,137
Change in prepaid and accrued items, net (684,744) 403,227
------------ -----------
Net cash provided by operating activities 661,612 1,725,671
------------ -----------
Cash flows from investing activities:
Proceeds from maturities of investments 15,193,003 18,100,000
Purchase of investment securities (8,823,680) (10,889,507)
Purchase of Federal Home Loan Bank Stock - (14,600)
Disbursements for loans (13,314,170) (13,429,390)
Loan repayments 10,327,882 10,586,075
Proceeds from sale of real estate owned - -
Property and equipment expenditures (41,675) (11,880)
------------ -----------
Net cash provided by investing activities 3,341,360 4,340,698
------------ -----------
Cash flows from financing activities:
Proceeds from exercise of stock options 28,676 20,000
Deposit account receipts 59,713,801 60,526,151
Deposit account withdrawals (63,365,522) (61,435,603)
Interest credited to deposit accounts 2,793,159 2,750,028
Decrease in advance payments for borrowers
for taxes and insurance (308,602) (257,570)
Payment of dividends (385,058) (305,387)
Purchase of treasury stock (453,125) (363,375)
------------ -----------
Net cash provided by (for) financing activities (1,976,671) 934,244
------------ -----------
Net change in cash and cash equivalents 2,026,301 7,000,613
Cash and cash equivalents at beginning of period 11,389,326 8,390,071
------------ -----------
Cash and cash equivalents at end of period $ 13,415,627 15,390,684
============ ===========
Cash paid during the period for:
Interest $ 3,076,125 3,039,902
Income taxes - -
Non-cash transfer of loans to real estate owned $ 113,636 -
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE>
WESTCO BANCORP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with instructions to Form 10-Q and therefore, do not include
information or footnotes necessary for fair presentation of financial position,
results of operations and changes in financial condition in conformity with
generally accepted accounting principles. 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 ended March 31, 1997 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 the Holding 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 Conversion and Stock Split
On February 13, 1992 the Board of Directors of First Federal Savings and Loan
Association of Westchester approved a plan to convert from a federally chartered
mutual savings association to a federally chartered stock savings association.
The stock conversion plan included, as part of the conversion, the concurrent
formation of a Holding Company. The stock offering of the Association's parent,
Westco Bancorp, Inc. (the "Company") was closed on June 26, 1992 with the sale
of 2,300,000 shares at $10.00 per share. The Company purchased all the shares
of stock of the Association for $10,962,363 upon completion of its stock
offering. On May 17, 1996 a three for two stock split occurred with fractional
shares being paid in cash.
Note D - Stock Repurchase
Since the June, 1992 conversion, the Company's Board of Directors has approved
seven separate stock repurchase programs. As of May 5, 1997, 1,021,517 shares,
adjusted for the May, 1996 stock split, had been repurchased at an average price
of $14.43. The current stock repurchase program permits the repurchase of up to
200,000 shares; and, as of May 5, 1997, 95,740 shares remain to be repurchased
in the open market.
Note E - Earnings Per Share
Pro forma 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. 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.
-4-
<PAGE>
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 maturing 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 Office of Thrift Supervision ("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 March 31, 1997, the
Association's liquidity ratio was 29.0%.
The Company maintains 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
March 31, 1997, these investments totalled $72.4 million, or 23.4% of assets,
with a weighted average life of approximately 9 months. At December 31, 1996,
these investments totalled $76.6 million, or 24.6% of assets, with a weighted
average life of approximately 10 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 March 31, 1997, cash and cash
equivalents totalled $13.4 million.
The primary investing activity of the Company is the origination of
mortgage loans. During the three months ended March 31, 1997 and 1996, the
Company disbursed loans in the amounts of $13.3 million and $13.4 million,
respectively. Other investing activities include the purchase of investment
securities, which totalled $8.8 million for the three months ended March 31,
1997 and $10.9 million for the three months ended March 31, 1996. These
activities in 1997 were funded primarily by principal repayments on loans
totalling $10.3 million and maturities of investment securities totalling $15.2
million. The three month activity for 1996 was funded by principal repayments
on loans and maturities of investment securities in the amounts of $10.6 million
and $18.1 million respectively.
At March 31, 1997, the Company had outstanding loan commitments of $8.5
million and a commitment to purchase a $1.0 million agency security. There were
no commitments to purchase loans at that date. 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
March 31, 1997 totalled $81.5 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
-5-
<PAGE>
assets, and a tangible capital ratio expressed as a percent of total adjusted
assets. As of March 31, 1997, the Association exceeded all regulatory capital
standards.
Capital requirements, ratios and balances are as follows:
<TABLE>
<CAPTION>
Actual Required Actual Excess
Capital Capital Capital Capital Capital
Required Ratio Amount Amount Amount
-------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
At December 31, 1996:
Tangible 1.5% 13.1% $4,565 $39,751 $35,186
Core 3.0 13.1 9,130 39,751 30,621
Risk Based:
Tier I (core) 4.0 30.0 5,304 39,751 34,447
Total 8.0 30.5 10,608 40,459 29,851
At March 31, 1997:
Tangible 1.5% 13.5% $4,544 $40,918 $36,374
Core 3.0 13.5 9,087 40,918 31,831
Risk Based:
Tier I (core) 4.0 29.9 5,467 40,918 35,451
Total 8.0 30.5 10,934 41,626 30,692
</TABLE>
CHANGE IN FINANCIAL CONDITION OVER THE THREE MONTHS ENDED MARCH 31, 1997:
- ------ -- --------- --------- ---- --- ----- ------ ----- ----- --- ----
Total assets decreased $1.1 million, or 0.3%, to $309.9 million at March
31, 1997 from $311.0 million at December 31, 1996. This decrease is primarily
attributable to a decrease in savings deposits of $859,000 and a decrease in
advance payments by borrowers for real estate taxes and homeowner's insurance in
the amount of $309,000.
Net loans receivable increased $2.9 million, or 1.3%, to $226.8 million
from $223.9 million at December 31, 1996 as loan principal disbursements
exceeded loan repayments. Loans disbursed totalled $13.3 million, for the three
months ended March 31, 1997, while loan repayments totalled $10.3 million.
Investment securities decreased $6.3 million, or 9.2%, to $62.4 million at
March 31, 1997. This decrease was primarily due to an increase in cash and cash
equivalents which reflected the Company's posturing for increased loan payouts
anticipated for the following quarter as well as the additional loan payouts
during the current quarter. Cash and cash equivalents totalled $13.4 million at
March 31, 1997 compared to $11.4 million at December 31, 1996.
Savings deposits decreased $859,000, or 0.3%, to $254.3 million at March
31, 1997 from $255.2 million at December 31, 1996. The Company experienced a
net deposit outflow of $3.7 million (before interest credited) for the three
month period ended March 31, 1997. Management believes this net outflow
occurred primarily as a result of withdrawals made by depositors for real estate
tax and income tax payment purposes and the movement of funds by some depositors
to perceived higher returns in the stock market.
The balance of non-performing loans, totalling $2.5 million at March 31,
1997, increased $936,000, or 59.7%, from $1.6 million at December 31, 1996 due
to the additional delinquency of four residential loans totalling approximately
$1 million. The ratio of non-performing loans to total loans was 1.10% at March
31, 1997 compared to 0.70% at December 31, 1996. Of the total non-performing
loans, approximately $1.1 million represent four loans to one borrower who has
filed for bankruptcy. The largest non-performing loan to this borrower totals
approximately $485,000. Although the total of non-performing loans has
-6-
<PAGE>
increased over the past several quarters, management believes that this increase
is attributable to certain loans which have been regularly delinquent for 60 to
90 days and which now have become non-performing. The Company is committed to
resolving these situations through collection or foreclosure. Net of a $175,000
specific valuation reserve carried against a $318,000 loan secured by a 36 unit
apartment building, management believes that these loans are adequately secured
by the underlying real estate.
Non-performing assets totalled $2.5 million at March 31, 1997 and $1.6
million at December 31, 1996. The current total includes the above mentioned
non-performing loans and one single family residential property acquired through
foreclosure. The ratio of non-performing assets to total assets was 0.82% and
0.50% respectively. Non-performing assets may increase as the Company resolves
the delinquency and collection problems associated with the non-performing
loans. The Company's allowance for loan losses totalled $882,800 at March 31,
1997, and there were no provisions or charge-offs during the quarter.
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 March 31,
1997 balance of $560,000 is eliminated in the consolidation of the Company's
financial statements. At December 31, 1996, the outstanding balance totalled
$622,000.
Retained earnings increased $696,000, or 1.8%, to $39.1 million as a result
of earnings for the three month period ended March 31, 1997 and the declaration
of a dividend payment to stockholders during the quarter ended March 31, 1997.
Stockholders' equity totalled $48.3 million or 15.6% of total assets at March
31, 1997, and the book value per common share outstanding was $18.89. On April
22, 1997, with the approval of its Board of Directors and the Office of Thrift
Supervision, 1st Federal Savings and Loan Association of Westchester paid a
dividend in the amount of $3.1 million to the parent company.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1997
- ---------- -- --------- ------- --- --- ----- ------ ----- ----- --- ----
AND MARCH 31, 1996:
- --- ----- --- ----
Net income for the quarter ended March 31, 1997 increased $109,000, or
11.3%, to $1.1 million from $969,000 for the quarter ended March 31, 1996. In
the quarter ended March 31, 1997 net interest income increased $35,000, or 1.3%,
due to a fractional increase in the interest rate margin. The Company's net
interest margin and net interest spread were virtually equal for the quarters
ended March 31, 1997 and March 31, 1996 at 3.58% and 2.81% respectively.
Management cannot predict the affects changes in the Federal Reserve's monetary
policy may have on the Company's interest margin and spread, because those
changes, if any, are not yet known.
During the three months ended March 31, 1997 and March 31, 1996 no
additional provision for loan losses was made based upon (1) the absence of any
extraordinary 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 first quarter of 1997 increased $74,000 over
the same quarter in 1996 primarily as a result of both realized and unrealized
gains in 1997 of $25,000 rather than losses of $39,000 which occurred in 1996.
These gains, along with a $12,000 increase in commissions on insurance and
investment products, were partially offset by a slight decrease in other
miscellaneous income.
-7-
<PAGE>
Non-interest expense decreased $76,000, or 5.8%, for the three months ended
March 31, 1997 to $1.23 million from the $1.30 million for the three months
ended March 31, 1996. This decrease resulted primarily from a $105,000 decrease
in FDIC premiums and a $9,000 decrease in legal expense, both of which were
partially offset by a $30,000 increase in salary and benefit plan costs and
$5,000 increases in both occupancy and data processing costs.
IMPACT OF NEW ACCOUNTING STANDARDS
- ------ -- --- ---------- ---------
In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 125 ("SFAS 125"), "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." This statement, among other things, applies a "financial-
components approach" that focuses on control, whereby an entity recognizes the
financial and servicing assets it controls and the liabilities it has incurred,
derecognizes assets when control has been surrendered, and derecognizes
liabilities when extinguished. SFAS 125 provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings. SFAS 125 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after December 31,
1996. The Company has adopted SFAS 125, as modified by SFAS 127 described
below, effective January 1, 1997, resulting in no material impact on its
consolidated financial condition or results of operations.
In December 1996, the FASB issued Statement of Financial Accounting
Standards No. 127 ("SFAS 127"), "Deferral of the Effective Date of Certain
Provisions of FASB Statement No. 125." The statement delays for one year the
implementation of SFAS 125, as it relates to (1) secured borrowings and
collateral, and (2) for the transfers of financial assets that are part of
repurchase agreements, dollar-rolls, securities lending and similar
transactions. The Company has adopted portions of SFAS 125 (those not deferred
by SFAS 127) effective January 1, 1997, and adoption of these portions did not
have a significant effect on the Company's financial condition or the results of
operations. Based on its review of SFAS 125, management does not believe that
the eventual adoption of the portions of SFAS 125 which have been deferred by
SFAS 127 will have a material affect on the Company.
In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128 ("SFAS 128"), "Earnings Per Share." This statement is
intended to simplify the computation of earnings per share ("EPS") by replacing
the presentation of primary EPS with a presentation of basic EPS. Basic EPS
does not include potential dilution and is computed by dividing income available
to common stockholders by an average number of common shares outstanding.
Diluted EPS reflects the potential dilution of securities that could share
in the earnings of a company, similar to the fully diluted EPS currently used.
The statement requires dual presentation of basic and diluted EPS by companies
with complex capital structures. SFAS 128 is effective for financial statements
issued for periods ending after December 15, 1997. The Company does not
anticipate that this statement will have an impact on its consolidated financial
condition or results of operations.
The foregoing does not constitute a comprehensive summary of all material
changes or developments affecting the manner in which the Company keeps its
books and records and performs its financial accounting responsibilities. It is
intended only as a summary of some of the recent pronouncements made by the FASB
which are of particular interest to financial institutions.
-8-
<PAGE>
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. 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
---------- -- ------- -- - ---- -- -------- -------
The following items were presented to shareholders at the Company's Annual
Meeting on April 15, 1997:
1. The election of David C. Burba and Thomas J. Nowicki to serve as
directors for terms of three years or until successors have been
elected and qualified.
2. The ratification of the appointment of Cobitz, VandenBerg & Fennessy as
auditors for the Company for the fiscal year ending December 31, 1997.
Both of the above items were approved by shareholders at the meeting. The
election of David C. Burba was approved by a vote of 2,412,524 in favor and
1,200 withheld. The election of Thomas J. Nowicki was approved by a vote of
2,320,625 in favor and 93,098 withheld. The appointment of Cobitz, VandenBerg &
Fennessy was ratified by a vote of 2,408,984 in favor, 2,563 against, and 2,177
abstaining. In the ratification of the auditor appointment, there were no
broker non-votes. The continuing directors are James E. Dick, Rosalyn M. Lesak,
Edward A. Matuga, Edward C. Moticka and Robert E. Vorel, Jr.
Item 5. OTHER INFORMATION
----- -----------
STOCK OPTIONS EXERCISED BY DIRECTORS
On January 29, 1997, in accordance with the provisions of the 1st Federal
Savings and Loan Association of Westchester 1992 Stock Option Plan for Outside
Directors, which was approved by a vote of the shareholders on September 29,
1992, Director Thomas J. Nowicki exercised 1,000 of the 6,540 remaining Common
Stock options granted to him since June 26, 1992.
On January 30, 1997, in accordance with the provisions of the 1st Federal
Savings and Loan Association of Westchester 1992 Stock Option Plan for Outside
Directors, which was approved by a vote of the shareholders on September 29,
1992, Director Edward C. Moticka exercised 1,500 of the 7,595 remaining Common
Stock options granted to him on June 26, 1992.
STOCK OPTIONS EXERCISED BY OTHERS
During the first quarter of 1997, 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, two non-executive officers
exercised 3,060 Common Stock options of the 5,520 granted to them on June 26,
1992.
-9-
<PAGE>
PART II - OTHER INFORMATION
(Continued)
WESTCO BANCORP, INC.
STOCK REPURCHASE PROGRAM
The Company began its seventh common stock repurchase plan in February,
1997. Under the terms of the repurchase plan, as approved by the Board of
Directors, up to 200,000 shares may be repurchased. As of April 30, 1997,
99,260 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
outstanding on May 5, 1997 totalled 2,469,853 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-1, 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>
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: May 9, 1997 BY: /s/ David C. Burba
-------------------------
President,
Chief Executive Officer
DATE: May 9, 1997 BY: /s/ Richard A. Brechlin
-------------------------
Executive Vice President and Treasurer,
Chief Financial Officer
DATE: May 9, 1997 BY: /s/ Kenneth J. Kaczmarek
-------------------------
Vice President,
Chief Accounting Officer
-11-
<PAGE>
EXHIBIT 11.0 - Computation of Earnings Per Share
<TABLE>
<CAPTION>
Three Months
Ended
3/31/97
-----------
<S> <C>
Net Income $ 1,078,638
==========
Weighted average shares
outstanding 2,566,420
Common stock equivalents due
to dilutive effect of
stock options 207,025
----------
Total Weighted average common
shares and equivalents
outstanding 2,773,445
==========
Primary earnings per share $ .39
====
Total weighted average common
shares and equivalents
outstanding for primary
computation 2,773,638
Additional dilutive shares using
the end of period market value
versus the average market value
when applying the treasury
stock method 2,590 *
----------
Total weighted average common
shares and equivalents
outstanding for fully
diluted computation 2,776,035
==========
Fully diluted earnings per share $ .39
====
</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>
<PAGE>
<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>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,389,416
<INT-BEARING-DEPOSITS> 10,026,211
<FED-FUNDS-SOLD> 7,300,000
<TRADING-ASSETS> 964,113
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 62,402,839
<INVESTMENTS-MARKET> 62,292,211
<LOANS> 227,718,362
<ALLOWANCE> 882,800
<TOTAL-ASSETS> 309,921,409
<DEPOSITS> 254,295,399
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,375,521
<LONG-TERM> 0
0
0
<COMMON> 34,886
<OTHER-SE> 48,215,603
<TOTAL-LIABILITIES-AND-EQUITY> 309,921,409
<INTEREST-LOAN> 4,682,417
<INTEREST-INVEST> 1,058,172
<INTEREST-OTHER> 33,863
<INTEREST-TOTAL> 5,774,452
<INTEREST-DEPOSIT> 3,069,408
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 2,705,044
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 24,694
<EXPENSE-OTHER> 1,228,326
<INCOME-PRETAX> 1,688,738
<INCOME-PRE-EXTRAORDINARY> 1,688,738
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,078,638
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.39
<YIELD-ACTUAL> 3.58
<LOANS-NON> 2,434,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 882,800
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 882,800
<ALLOWANCE-DOMESTIC> 175,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 707,800
</TABLE>
