================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------------
Date of Report (Date of earliest event reported): April 30, 1998
MSB BANCORP, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-20187 06-1341670
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
35 MATTHEWS STREET, GOSHEN, NEW YORK 10924
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (914) 294-8100
NOT APPLICABLE
(Former name or former address, if changed since last report)
================================================================================
<PAGE>
ITEMS 1-4. NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
On April 30, 1998, MSB announced in a press release its results for the
first quarter of 1998. A copy of the press release is attached hereto as Exhibit
99.1.
ITEM 6. NOT APPLICABLE.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
a. Financial Statements of Businesses Acquired.
Not Applicable
b. Pro forma Financial Information.
Not Applicable
c. Exhibits: The following Exhibits are filed as part of this
report:
EXHIBIT NO. DESCRIPTION
----------- -----------
99.1 Press Release issued April 30, 1998.
ITEM 8. NOT APPLICABLE.
ITEM 9. NOT APPLICABLE.
<PAGE>
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 hereunto duly authorized.
MSB BANCORP, INC.
By: /s/ Anthony J. Fabiano
--------------------------------
Anthony J. Fabiano
Senior Vice President and
Chief Financial Officer
Date: May 1, 1998
<PAGE>
-3-
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
99.1 Press Release issued April 30, 1998.
[MSB BANCORP INC. LOGO]
35 Matthews Street, Goshen, New York 10924 (914) 294-8100
FOR IMMEDIATE RELEASE
Thursday, April 30, 1998
For further information contact:
Anthony J. Fabiano
Senior Vice President and
Chief Financial Officer
(914) 294-8100, Ext. 1404
FIRST QUARTER RESULTS ANNOUNCED
-------------------------------
Goshen, New York, Thursday, April 30, 1998--MSB Bancorp, Inc. (American Stock
Exchange: MBB) (the "Company"), the holding company for MSB Bank ("MSB" or the
"Bank"), announced net income of $670,000 or $ 0.13 per common share (diluted)
for the first quarter of 1998, as compared to net income of $957,000 or $0.24
per common share (diluted) for the first quarter of 1997. The results for the
first quarter of 1998 included expenses of $128,000 related to the previously
announced merger of the Company with and into HUBCO, Inc. ("HUBCO") (the
"Merger"). In connection with the Merger, MSB Bank (the "Bank") will be merged
with and into HUBCO's New York subsidiary bank, Bank of the Hudson. HUBCO is a
$3 billion bank holding company which currently owns commercial banks in New
Jersey and Connecticut. HUBCO also acquired Poughkeepsie Financial Corp. ("PFC")
in New York in April 1998 and is in the process of acquiring several other
financial institutions in New Jersey and Connecticut. The acquisition of the
Company is expected to close in the second quarter of 1998.
During the first quarter of 1998, net interest income amounted to $6.0 million
as compared to $6.1 million for the same quarter in 1997. The provision for loan
losses increased $1.0 million to
<PAGE>
$1.3 million in the first quarter of 1998 as compared to $300,000 for the first
quarter of 1997. Non-interest income increased $326,000 or 34.1% to $1.3 million
for those same periods, and non-interest expense decreased $306,000 or 5.9 % to
$4.9 million.
William C. Myers, Chairman and Chief Executive Officer commented, "MSB continues
to work hard at improving our financial results. Fee income has increased 27.7%
and operating expenses are down 5.9%. We look forward with great anticipation to
our Merger with HUBCO and the synergies that the Merger will create. I look
forward to seeing our stockholders at the May 12, 1998 Special Meeting of
Stockholders, at which we will be voting on the Merger."
The Company's earnings by principal items of income and expense are as follows:
INTEREST INCOME was $12.2 million for the first quarter of 1998 as compared to
$13.5 million for the same period in 1997. This decrease was due primarily to a
decrease of $57.0 million in average interest earnings assets to $688.4 million
for the first quarter of 1998 as compared to $745.4 million for the first
quarter of 1997. In addition, the yield earned on interest earning assets
decreased 15 basis points to 7.21% for those same periods. The decrease in the
balance of average interest-earning assets was due primarily to a decrease of
$67.2 million in the average balances of deposits for the first quarter of 1998
as compared to the same period in 1997. The decrease in the average balance of
deposits is due to Management's strategy to reduce the interest rate paid on
certain time deposits, many of which were earning a premium rate. The decrease
in the yields earned was a result of the temporary investment of the proceeds
from securities sales into Federal funds, which earn a lower rate than the
securities which were sold. The securities were sold to provide liquidity for
loan demand. For the first quarter of 1998, the average balance of mortgage
loans increased $46.2 million to $364.3 million as compared to the first quarter
of 1997.
INTEREST EXPENSE was $6.2 million for the first quarter of 1998 as compared to
$7.4 million for the same quarter in 1997. This decrease is primarily due to a
decrease of $67.2 million in the average balance of interest-bearing liabilities
to $615.7 million for the first quarter of 1998, as compared to the same period
in 1997 and a 31 basis point decrease in the average cost of interest bearing
liabilities to 4.10%.
NET INTEREST INCOME amounted to $6.0 million for the first quarter of 1998 as
compared to $6.1 million for the first quarter of 1997. The Company's interest
rate spread was 3.11% and 2.94% for the first quarters of 1998 and 1997,
respectively. The Company's net interest margin was 3.55% and 3.31%,
respectively, for those same periods.
THE PROVISION FOR LOAN LOSSES totaled $1.3 million for the first quarter of 1998
as compared to $300,000 for the same period in 1997. The increase in the
provision for loan losses is due primarily to the non-performance of loans with
one commercial customer. Loans outstanding to this customer and its affiliates
totaled $2.3 million at March 31, 1998. The increase in the loan loss provision
is also due to an increase in charge-offs to $672,000 as compared to $212,000
for the first quarter of 1997. Non-performing loans (loans that are 90 days or
more past due) amounted to $4.2 million or 1.04% of total loans at March 31,
1998 as compared to $3.5 million
<PAGE>
or 0.89% of total loans at December 31, 1997 and $4.0 million or 1.16% of total
loans at March 31, 1997. The increase in non-performing loans is due to the
commercial customer discussed above. Excluding non-performing loans to this
customer, non-performing loans totaled $2.3 million or 0.57% of total loans. The
allowance for loan losses totaled $3.5 million, $2.8 million and $2.1 million at
those same respective dates.
NON-INTEREST INCOME amounted to $1.3 million and $957,000 for the first quarters
of 1998 and 1997, respectively. This increase is due to a $248,000 or 27.7%
increase in service fees and an $85,000 increase in net realized gains on
securities and mortgage loan sales, offset by a $7,000 decrease in other
non-interest income. The increase in service fees is due primarily to a $100,000
increase in service fees earned by MSB Investment Group ("MSBIG") and changes in
MSB's fee structure on deposit products and services. The changes to MSB's fee
structure were made during the third quarter of 1997 as part of a previously
announced reengineering plan. MSBIG is a NASD member broker-dealer that provides
investment advisory, brokerage and insurance services.
NON-INTEREST EXPENSE amounted to $4.9 million for the first quarter of 1998 as
compared to $5.2 million for the first quarter of 1997. Salaries and employee
benefits decreased $213,000 during the first quarter of 1998 to $1.9 million as
compared to the same quarter in 1997. Occupancy and equipment decreased $47,000
to $771,000 for those same periods. Other non-interest expenses decreased
$33,000 during the first quarter of 1998 to $1.2 million as compared to the same
period in 1997 and included $128,000 of Merger related expenses.
The Company's total assets were $753.7 million at March 31, 1998, as compared to
$765.4 million at December 31, 1997. This decrease is due primarily to the
decrease in deposits. For those same dates, deposits decreased $12.4 million to
$661.0 million at March 31, 1998. Securities and mortgage-backed securities
available for sale decreased $49.3 million to $230.5 million at March 31, 1998,
as compared to $279.8 million at December 31, 1997. Loans, net increased $5.1
million to $396.5 million at March 31, 1998, as compared to $391.4 million at
December 31, 1997. Goodwill decreased $923,000 to $28.3 million at March 31,
1998, as compared to $29.2 million at December 31, 1997. Real estate owned
decreased $222,000 to $2.2 million at March 31, 1998 as compared to $2.4 million
at December 31, 1997.
Total stockholders' equity decreased $461,000 to $74.3 million at March 31,
1998, as compared to $74.8 million at December 31, 1997. This decrease is due
primarily to a $417,000 increase in the net unrealized loss on securities
available for sale. The Bank's Tier 1 leverage capital ratio was 6.3% at March
31, 1998.
MSB is a federally-chartered stock savings bank offering traditional financial
services and products through its sixteen branches in the Mid-Hudson Valley
area.
Copies of the Company's Form 10-K and Form 10-Q's are available from Karen
DeLuca, Corporate Secretary, MSB Bancorp, Inc., 35 Matthews Street, Goshen, New
York 10924.
<PAGE>
Consolidated balance sheets, statements of income and quarterly financial
highlights are attached.
<PAGE>
<TABLE>
<CAPTION>
MSB BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands except shares and per share amounts)
MARCH 31, DECEMBER 31,
1998 1997
---- ----
<S> <C> <C>
ASSETS
Cash and due from banks.......................................... $ 14,549 $ 16,834
Federal funds sold............................................... 56,655 21,065
Securities available for sale.................................... 132,581 54,082
Mortgage-backed securities available for sale.................... 97,909 225,680
Loans, net....................................................... 396,532 391,429
Premises and equipment, net...................................... 13,772 14,062
Accrued interest receivable...................................... 4,234 5,049
Real estate owned................................................ 2,221 2,443
Goodwill......................................................... 28,250 29,173
Other assets..................................................... 6,964 5,550
----------- -----------
Total assets............................................... $ 753,667 $ 765,367
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits...................................................... 661,046 673,432
Mortgagors' escrow deposits................................... 1,975 2,247
Accrued expenses and other liabilities........................ 16,149 14,730
ESOP obligations.............................................. 182 182
------------ ------------
Total liabilities............................................. 679,352 690,591
------------ ------------
Stockholders' Equity
Preferred stock ($.01 par value; 1,000,000 shares authorized;
600,000 shares issued at March 31, 1998 and December 31,
1997)....................................................... 6 6
Common stock ($.01 par value; 5,000,000
shares authorized; 3,045,000 shares issued
at March 31, 1998 and December 31, 1997)..................... 30 30
Additional paid-in capital.................................... 48,069 48,069
Retained earnings............................................. 31,414 31,458
Treasury stock, at cost (200,847 shares at March 31, 1998
and December 31, 1997....................................... (3,941) (3,941)
Unallocated ESOP stock........................................ (182) (182)
Unallocated BRP stock......................................... (42) (42)
Accumulated other comprehensive income:
Net unrealized loss on securities available for sale........ (1,039) (622)
----------- ------------
Total stockholders' equity.............................. 74,315 74,776
------------ -------------
Total liabilities and stockholders' equity.............. $ 753,667 $ 765,367
============ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MSB BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In thousands except shares and per share amounts)
FOR THE QUARTER ENDED MARCH 31,
1998 1997
---- ----
<S> <C> <C>
INTEREST INCOME
Mortgage loans............................................................ $ 7,335 $ 6,506
Other loans............................................................... 733 563
Mortgage-backed securities................................................ 1,889 5,269
Securities................................................................ 1,185 838
Federal funds sold........................................................ 1,096 350
------------- -------------
Total interest income............................................... 12,238 13,526
INTEREST EXPENSE
Interest on deposits...................................................... 6,210 7,437
Interest on borrowings.................................................... 6 9
------------- -------------
Total interest expense.............................................. 6,216 7,446
------------- -------------
NET INTEREST INCOME......................................................... 6,022 6,080
Provision for loan losses................................................. 1,324 300
------------- -------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,698 5,780
NON-INTEREST INCOME
Service fees.............................................................. 1,143 895
Net realized gains (losses) on securities................................. 63 15
Realized gains on mortgage loans
held for sale........................................................... 69 32
Other non-interest income................................................. 8 15
------------- -------------
1,283 957
NON-INTEREST EXPENSE
Salaries and employee benefits............................................ 1,927 2,140
Occupancy and equipment................................................... 771 818
Federal deposit insurance premiums........................................ 68 82
Goodwill amortization..................................................... 922 921
Other non-interest expense................................................ 1,184 1,217
------------- -------------
4,872 5,178
------------- -------------
Income before income taxes................................................ 1,109 1,559
Income tax expense........................................................ 439 602
------------- -------------
Net income................................................................ $ 670 $ 957
============ ============
Basic earnings per share ................................................. $ 0.14 $ 0.24
=========== ============
Diluted earnings per share................................................ $ 0.13 $ 0.24
=========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MSB BANCORP, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(UNAUDITED)
(dollars in thousands, except share data)
AT OR FOR THE QUARTER ENDED
---------------------------------------------------------------------------------------------
MARCH 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997 JUNE 30, 1997 MARCH 31, 1997
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net interest income................... $ 6,022 $ 6,065 $ 6,111 $ 6,228 $ 6,080
Provision for loan losses............. 1,324 715 275 275 300
Non-interest income:
Service fees.......................... 1,143 1,199 1,180 1,004 895
Other non-interest income............. 140 214 105 79 62
------------ ------------ ------------ ----------- -----------
Total non-interest
income.............. 1,283 1,413 1,285 1,083 957
Non-interest expense:
Salaries and employee benefits........ 1,927 1,924 2,104 2,251 2,140
Occupancy and equipment............... 771 781 817 772 818
Goodwill amortization................. 922 911 909 918 921
Other non-interest expense............ 1,124 1,629 1,251 1,279 1,299
Non-recurring expenses................ 128 3,130 -- -- --
------------ ------------ ------------ ----------- -----------
Total non-interest expense........... 4,872 8,375 5,081 5,220 5,178
------------ ------------ ------------ ----------- -----------
Income (loss) before taxes............ 1,109 (1,612) 2,040 1,816 1,559
Income tax expense (benefit).......... 439 (621) 810 731 602
------------ ----------- ------------ ----------- -----------
Net income (loss)..................... $ 670 $ (991) $ 1,230 $ 1,085 $ 957
=========== =========== ============ =========== ===========
Total assets.......................... $ 753,667 $ 765,367 $ 773,991 $ 813,902 $ 810,679
Loans, net............................ 396,532 391,429 372,282 355,683 343,076
Mortgage-backed securities............ 97,909 225,680 254,601 294,179 301,031
Securities available for sale......... 132,581 54,082 58,315 54,547 53,511
Deposits.............................. 661,046 673,432 684,018 720,741 729,546
Stockholders' equity.................. 74,315 74,776 76,137 72,601 68,400
- ------------------------------------------------------------------------------------------------------------------------------------
Performance Ratios:
Return on average assets (1).......... 0.36% NM 0.62% 0.54% 0.48%
Return on average equity (1).......... 3.56% NM 6.42% 6.09% 5.43%
Stockholders' equity to total assets.. 9.86% 9.77% 9.84% 8.92% 8.44%
Average interest rate spread.......... 3.11% 3.02% 2.95% 2.96% 2.94%
Net interest margin................... 3.55% 3.45% 3.36% 3.34% 3.31%
Efficiency Ratio (3).................. 53.3% 59.6% 57.2% 57.7% 58.9%
Dividend payout ratio................. 115.4% NM 45.5% 53.6% 65.2%
Total tangible book value per share
at end of period (2)............... $ 13.68 $ 13.42 $ 13.72 $ 13.29 $ 12.78
Diluted earnings per share............ $ 0.13 $ (0.45) $ 0.33 $ 0.28 $ 0.24
- ------------------------------------------------------------------------------------------------------------------------------------
Bank Regulatory Capital Ratios:
Tier 1 leverage capital............... 6.3% 6.2% 6.2% 5.8% 5.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Asset Quality Data:
Total non-performing loans............ $ 4,153 $ 3,488 $ 3,167 $ 3,471 $ 3,994
<PAGE>
Total non-performing assets........... $ 6,374 $ 5,931 $ 5,415 $ 5,181 $ 5,050
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Ratios are annualized.
(2) Excludes available for sale market value adjustments.
(3) Excludes non-recurring expenses, goodwill amortization and SAIF
assessment.
NM - Not Meaningful
