<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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: #0-21466
JEFFERSON SAVINGS BANCORP, INC.
_________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Delaware 43-1625841
- ----------------------- -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
14915 Manchester Road, Ballwin, Missouri 63011
- ----------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 227-3000
--------------
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
----- ------
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1996
- -------------------------------------------------------------------
Common Stock, Par Value $.01 4,181,795 shares
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
INDEX to Form 10-Q
PAGE
____
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
- Consolidated Balance Sheets 3
- Consolidated Statements of Operations 4
- Consolidated Statement of Stockholders'
Equity 5
- Consolidated Statements of Cash Flows 6
- Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of
Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
2<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -----------
<S> <C> <C>
Cash $ 6,251,876 1,945,276
Interest-bearing demand deposits 8,868,151 18,745,488
Federal funds sold 25,000 -
Investment securities available for sale, at
fair value (amortized cost of $83,158,690
and $48,443,789 at September 30, 1996 and
December 31, 1995, respectively) 83,275,354 48,590,166
Mortgage-backed securities available for sale,
at fair value (amortized cost of $159,092,117
and $234,160,389 at September 30, 1996 and
December 31, 1995, respectively) 155,578,018 232,882,760
Loans receivable, net 820,129,982 788,085,287
Investment in real estate, net 5,214,671 4,681,972
Stock in Federal Home Loan Banks 15,071,100 16,520,100
Office properties and equipment, net 8,532,639 7,984,488
Deferred tax asset 1,008,000 -
Excess of cost over fair value of net assets acquired 14,370,314 14,495,743
Accrued income and other assets 10,014,147 8,997,504
-------------- -------------
$1,128,339,252 1,142,928,784
============== =============
Liabilities and Stockholders' Equity
------------------------------------
Savings deposits $ 876,636,129 870,178,701
Borrowed money 143,901,465 174,961,956
Deferred tax liability - 1,161,000
Advance payments by borrowers for taxes and insurance 10,659,267 2,875,576
Accrued expenses and other liabilities 15,461,828 13,500,813
-------------- -------------
Total liabilities 1,046,658,689 1,062,678,046
-------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock ($.01 par value): Authorized
5,000,000 shares; none issued -- --
Common stock ($.01 par value): Authorized
20,000,000 shares; issued 4,470,049 shares
at September 30, 1996 and December 31, 1995 44,700 44,700
Additional paid-in capital 44,021,934 43,197,276
Retained earnings, subject to certain restrictions 49,012,299 49,140,260
Unrealized loss on assets available for sale, net (863,930) (666,313)
Unamortized restricted stock awards (386,821) (616,055)
Unearned ESOP shares (5,545,779) (6,115,907)
Treasury stock, at cost: 288,254 shares and
296,486 shares at September 30, 1996 and
December 31, 1995, respectively (4,601,840) (4,733,223)
-------------- -------------
Total stockholders' equity 81,680,563 80,250,738
-------------- -------------
$1,128,339,252 1,142,928,784
=============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
3<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Income
Three and nine months ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ---------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Interest and dividend income:
Loans receivable $16,507,829 15,513,267 48,202,576 37,788,467
Mortgage-backed securities 2,381,310 4,144,243 9,184,274 11,203,231
Investment securities 1,500,083 1,024,301 2,776,946 2,120,810
Interest-bearing demand deposits and
federal funds sold 112,649 229,273 473,788 357,133
Stock in Federal Home Loan Banks 267,749 281,036 797,815 735,946
----------- ---------- ---------- ----------
Total interest and dividend
income 20,769,620 21,192,120 61,435,399 52,205,587
----------- ---------- ---------- ----------
Interest expense:
Savings deposits 11,049,966 11,244,691 33,243,220 25,632,826
Borrowed money 2,049,720 3,359,918 6,396,170 10,683,766
----------- ---------- ---------- ----------
Total interest expense 13,099,686 14,604,609 39,639,390 36,316,592
----------- ---------- ---------- ----------
Net interest income 7,669,934 6,587,511 21,796,009 15,888,995
Provision for losses on loans 165,000 83,367 495,000 267,127
----------- ---------- ---------- ----------
Net interest income after
provision for losses on loans 7,504,934 6,504,144 21,301,009 15,621,868
----------- ---------- ---------- ----------
Noninterest income:
Servicing and other loan fees 118,269 185,527 497,963 376,878
Fees for other services to customers 136,507 131,749 379,669 261,783
Loss on sale of mortgage-backed
securities, net (1,930,506) - (1,296,134) -
Gain on sale of loans receivable, net 78,753 70,341 300,081 131,714
Gain on real estate operations, net 3,404 353,089 419,706 530,857
Other 143,341 163,583 535,883 375,501
----------- ---------- ---------- ----------
Total noninterest income (1,450,232) 904,289 837,168 1,676,733
----------- ---------- ---------- ----------
Noninterest expense:
General and administrative:
Compensation and employee benefits 2,221,917 2,160,652 7,334,892 5,127,557
Occupancy 548,646 533,654 1,559,313 1,304,616
Advertising 88,976 83,222 359,529 238,744
Federal insurance premiums 571,939 491,334 1,579,078 1,118,247
SAIF special assessment 5,598,879 - 5,598,879 -
Legal, examination, and other
professional fees 283,298 229,893 961,071 534,152
Other 655,410 702,832 2,264,977 1,538,372
----------- ---------- ---------- ----------
Total general and administrative
expense 9,969,065 4,201,587 19,657,739 9,861,688
Amortization of excess cost over fair
value of net assets acquired 261,279 251,729 761,364 251,729
----------- ---------- ---------- ----------
Total noninterest expense 10,230,344 4,453,316 20,419,103 10,113,417
----------- ---------- ---------- ----------
Income (loss) before income taxes (4,175,642) 2,955,117 1,719,074 7,185,184
Income tax expense (benefit) (1,338,500) 1,120,763 949,000 2,643,000
----------- ---------- ---------- ----------
Net income (loss) $(2,837,142) 1,834,354 770,074 4,542,184
----------- ---------- ---------- ----------
Earnings (loss) per share $ (.72) .47 .19 1.14
====== === === ====
</TABLE>
See accompanying notes to consolidated financial statements.
4<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Unrealized
Common Stock Additional loss on
------------------- paid-in Retained assets available
Shares Dollars capital earnings for sale, net
------ ------- ---------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 4,173,563 $44,700 43,197,276 49,140,260 (666,313)
Net income - - - 770,074 -
Amortization of restricted
stock awards - - - - -
Amortization of ESOP awards - - 550,427 - -
Change in unrealized loss
on assets available for
sale, net - - - - (197,617)
Dividends paid - - (898,035) -
Release of ESOP shares in
lieu of cash dividends on
allocated ESOP shares - - 6,294 - -
Stock options exercised 8,232 - (49,063) - -
Tax benefit of restricted
stock awards - - 265,000 -
Tax benefit of non-incentive
stock options exercised - - 52,000 -
--------- ------- ---------- ---------- --------
Balance at September 30, 1996 4,181,795 $44,700 44,021,934 49,012,299 (863,930)
========= ======= ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
Unamortized Total
restricted Unearned Treasury Stockholders'
stock awards ESOP shares Stock equity
------------ ----------- ------ -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 (616,055) (6,115,907) (4,733,223) 80,250,738
Net income - - - 770,074
Amortization of restricted
stock awards 229,234 - - 229,234
Amortization of ESOP awards - 559,493 - 1,109,920
Change in unrealized loss
on assets available for
sale, net - - - (197,617)
Dividends paid - - - (898,035)
Release of ESOP shares in
lieu of cash dividends on
allocated ESOP shares - 10,635 - 16,929
Stock options exercised - - 131,383 82,320
Tax benefit of restricted
stock awards - - - 265,000
Tax benefit of non-incentive
stock options exercised - - - 52,000
--------- ---------- ---------- ----------
Balance at September 30, 1996 (386,821) (5,545,779) (4,601,840) 81,680,563
========= ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.<
5<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 770,074 4,542,184
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization:
Office properties and equipment 614,654 475,538
Discounts and premiums, net (575,986) 71,137
ESOP and restricted stock awards 1,339,154 902,344
Excess of cost over fair value of
net assets acquired 761,364 251,729
Decrease (increase) in accrued interest receivable (880,649) 209,146
Decrease in accrued interest payable (98,749) (619,350)
Provision for losses on loans 495,000 267,127
Net loss (gain) on sales of assets 404,608 (145,539)
Increase in income taxes payable 1,250,457 260,087
Increase (decrease) in deferred taxes (2,169,000) 2,178,430
Stock dividend from Federal Home Loan Banks (123,400) (40,400)
Decrease in payable for check fundings (3,857,404) (6,573,346)
Other, net 4,393,004 (2,555,304)
------------ ------------
Net cash provided by (used in) operating activities 2,323,127 (776,217)
------------ ------------
Cash flows from investing activities:
Principal repayments on:
Loans receivable 207,015,570 103,505,970
Mortgage-backed securities 18,657,986 13,558,776
Proceeds from maturity of investment securities 28,335,000 21,175,000
Proceeds from sale of:
Loans receivable 36,571,747 17,877,831
Mortgage-backed securities 86,352,031 48,024,640
Investment securities - 3,899,756
Federal Home Loan Bank stock 1,572,400 -
Cash invested in:
Loans receivable (276,798,256) (127,662,476)
Mortgage-backed securities (29,836,277) -
Investment securities (62,997,500) (5,994,413)
Federal Home Loan Bank stock - (245,400)
Proceeds from sale of real estate 2,314,023 549,857
Investment in real estate (198,456) -
Proceeds from sale of office properties and equipment 113,516 119,872
Purchase of office properties and equipment (1,238,731) (483,165)
Cash paid for acquisitions - (51,980,749)
Cash and cash equivalents from acquisitions - 24,138,494
------------ ------------
Net cash provided by investing activities 9,863,053 46,483,993
Cash flows from financing activities:
Increase in savings deposits, net 6,360,598 46,256,361
Decrease in borrowed money, net (31,060,491) (77,972,294)
Increase in advance payments by borrowers for
taxes and insurance 7,783,691 5,930,838
Purchase of ESOP shares - (3,779,081)
Proceeds from stock options exercised 82,320 80,000
Dividends paid (898,035) -
------------ ------------
Net cash used in financing activities (17,731,917) (29,484,176)
Increase (decrease) in cash and cash equivalents (5,545,737) 16,223,600
Cash and cash equivalents at beginning of period 20,690,764 8,090,611
------------ ------------
Cash and cash equivalents at end of period $ 15,145,027 24,314,211
============ ============
Supplemental disclosures of cash flow information:
Interest paid $ 39,738,139 36,935,942
Income taxes paid 2,492,384 2,614,695
Noncash investing activities:
Additions to real estate acquired in settlement
of loans or through foreclosure 2,280,625 364,587
Loans originated to finance the sale of real estate 60,026 -
Assets acquired, net of cash and cash equivalents - 370,904,993
Liabilities assumed - 343,445,940
------------ ------------
Noncash financing activity - interest credited 24,469,094 19,473,457
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
6<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(Unaudited)
(1) Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-Q and,
therefore, do not include all information and notes necessary for
a complete presentation of financial position, results of
operations, changes in stockholders' equity, and cash flows in
conformity with generally accepted accounting principles.
However, all adjustments (consisting only of normal recurring
accruals) which, in the opinion of management, are necessary for
a fair presentation of the unaudited consolidated financial
statements have been included in the results of operations for
the three and nine months ended September 30, 1996 and 1995,
respectively.
Operating results for the three and nine months ended September
30, 1996 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1996.
(2) Principles of Consolidation
---------------------------
The accompanying unaudited consolidated financial statements
include the accounts of Jefferson Savings Bancorp, Inc. (the
Company) and its wholly owned subsidiaries, Jefferson Savings and
Loan Association, F.A. (the Association) and First Federal
Savings Bank of North Texas (First Federal or the Bank). The
Association's wholly owned subsidiaries are J.S. Services, Inc.,
J.S. Services of Florida, Inc., JS&L Realty, Inc., and Jefferson
Financial Corporation. The Bank's wholly owned subsidiaries are
First Service Corporation, Inc. and North Texas Financial
Services, Inc. All significant intercompany items have been
eliminated.
(3) Business Combinations
---------------------
On May 31, 1995, the Company completed its acquisitions of North
Texas Savings and Loan Association, Denton, Texas (North Texas)
and First Federal Savings Bank of Longview, Texas (Longview) in
exchange for cash of $28.3 million and $12.8 million,
respectively. North Texas' total assets were $190.7 million,
consisting primarily of loans receivable of $126.9 million and
mortgage-backed securities of $49.5 million; North Texas' total
deposits were $148.2 million. Longview's total assets were
$134.5 million, consisting primarily of loans receivable of $66.0
million and mortgage-backed securities of $34.0 million;
Longview's total deposits were $120.0 million. On July 13, 1995,
the Company completed its acquisition of Shelby-Panola Savings
Association, Carthage Texas (Shelby-Panola) in exchange for cash
of $10.9 million. Shelby-Panola's total assets were $55.6
million, consisting primarily of investment securities of
$22.9 million, loans receivable of $14.3 million, and mortgage-
backed securities of $12.2 million; Shelby-Panola's total
deposits were $44.8 million. As a result of the North Texas
acquisition, the Company added five branches in the suburban
Dallas counties of Denton, Collin, Tarrant, and Wise and, as a
result of the Longview acquisition, added five branches in the
Northwest Texas counties of Gregg and Harrison. The acquisition
of Shelby-Panola added one branch in Panola County, Texas. The
acquisitions, which were funded by available cash and borrowings,
were accounted for using the purchase method of accounting and,
accordingly, the results of operations have been included in the
Company's results of operations from the respective transaction
dates. The excess of cost over fair value of net assets acquired
was approximately $15 million and is being amortized over
15 years. Upon completion of the acquisitions, North Texas,
Longview, and Shelby-Panola were consolidated under a single
federal charter and operate under the common name of First
Federal Savings Bank of North Texas.
The following unaudited information presents pro forma results of
operations of the Company for the three and nine months ended
September 30, 1995, assuming the acquisitions had taken place on
January 1, 1995.
7<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
Three months Nine months
ended September 30, ended September 30,
1995 1995
------------------ ------------------
(In thousands, except per share data)
<S> <C> <C>
Net interest income $ 6,587 19,018
Net income 1,834 4,712
======= ======
Earnings per share $ .47 1.18
======= ======
</TABLE>
On May 31, 1996, the Company announced the signing of a
Definitive Agreement and Plan of Merger providing for the
acquisition by the Company of all of the outstanding common stock
of Texas Heritage Savings Association/Banc, Rowlett, Texas (Texas
Heritage) in exchange for a combination of cash and common stock
of the Company, the amount of which will be determined as of the
end of the month immediately preceding the month during which the
closing takes place. The transaction, which will be accounted
for as a purchase, is subject to the approval of regulators and
the shareholders of Texas Heritage. Texas Heritage, with assets
of approximately $69 million and deposits of approximately $61
million, operates from its main office in Rowlett, Texas and its
three branches located in Garland, Rockwall and Bedford, Texas.
In addition, on September 26, 1996, the Company announced the
signing of a Definitive Agreement and Plan of Merger providing
for the acquisition by the Company of all of the outstanding
common stock of L & B Financial, Inc., Sulphur Springs, Texas (L
& B Financial) in exchange for a combination of cash and common
stock of the Company, the amount of which will be determined as
of the end of the month immediately preceding the month during
which the closing takes place. The transaction, which will be
accounted for as a purchase, is subject to the approval of
regulators and the shareholders of L & B Financial. L & B
Financial is the holding company for Loan & Building State
Savings Bank, a Texas savings bank formerly known as Sulphur
Springs Loan and Building Association. Loan & Building State
Savings Bank, with assets of approximately $144 million and
deposits of approximately $105 million, operates from its main
office in Sulphur Springs, Texas and its five branches located in
Mt. Vernon, Mt. Pleasant, Daingerfield, Pittsburg and Texarkana,
Texas.
(4) Earnings Per Share
------------------
Earnings per share are based upon the weighted average number of
common shares and common stock equivalents, if dilutive,
outstanding during the period. The only common stock equivalents
are stock options. The weighted average number of common stock
equivalents is calculated using the treasury stock method.
Common shares held by the Company's Employee Stock Ownership Plan
(ESOP) that have not been committed to be released are excluded
from the computation of weighted average common shares
outstanding during the period.
Earnings per share for the third quarter have been computed based
upon net income for the three months ended September 30, 1996 and
1995, using 3,969,055 and 3,899,228 weighted average common
shares and common stock equivalents outstanding, respectively.
Year-to-date earnings per share for 1996 and 1995 have been
computed based upon net income for the nine months ended
September 30, 1996 and 1995, using 3,970,548 and 3,996,812
weighted average common shares and common stock equivalents
outstanding, respectively.
8<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion reviews the results of operations and
the financial condition of the Company as of and for the three
and nine months ended September 30, 1996.
RESULTS of OPERATIONS
NET INCOME
As the result of certain non-recurring charges totaling $4.7
million net of tax or $1.20 per share, the Company incurred an
after-tax loss of $2.8 million or $0.72 per share for the quarter
ended September 30, 1996. Net income for the quarter prior to
these non-recurring charges was $1.9 million or $0.48 per share.
This compares to net income of $1.8 million or $0.47 per share in
the same period last year and represents a 4% increase in net
income before non-recurring charges. Weighted average shares
outstanding for the third quarter of 1996 were 3,969,055 compared
to 3,899,228 for the third quarter of 1995. Non-recurring
charges consisted of a one-time special assessment to
recapitalize the Savings Association Insurance Fund (SAIF), which
insures the deposits of the Company's thrift subsidiaries, and a
loss on the sale of mortgage-backed securities. Annualized
return on average equity and annualized return on average assets
for the quarter prior to the non-recurring charges were 9.24% and
0.68%, respectively compared to 9.40% and 0.60%, respectively
during the comparable 1995 quarter.
Actual net income for the nine months ended September 30, 1996
was $770,000 or $0.19 per share and earnings for the same period
prior to non-recurring charges were $5.5 million or $1.39 per
share. This compares to $4.5 million or $1.14 per share earned
in the first three quarters of 1995. Weighted average shares
outstanding for the nine months ended September 30, 1996 were
3,970,548 compared to 3,996,812 for the nine months ended
September 30, 1995. Annualized return on average equity and
annualized return on average assets for the nine-month period in
1996 prior to the non-recurring charges were 9.00% and 0.65%,
respectively, compared to 7.95% and 0.60%, respectively, during
the comparable period in 1995. The significant increases in net
income and return on average equity for the nine month period
were the result of the inclusion of the results of operations of
the three Texas savings associations which were acquired in May
and July 1995 in transactions accounted for as purchases. Under
the purchase method of accounting, the results of operations of
the acquired companies are only included from their dates of
acquisition.
The long awaited legislation to recapitalize the SAIF was signed
into law by President Clinton on September 30, 1996. It provided
for a one-time assessment to all financial institutions holding
SAIF assessable deposits. The Company's share of the assessment
was $5.6 million which represents an after-tax charge to earnings
of $3.5 million or $0.88 per share. In addition to the special
assessment, the legislation also provided that, beginning on
January 1, 1997, industry-wide SAIF premiums will be reduced
resulting in an estimated reduction in the Company's federal
deposit insurance premiums of approximately 60%.
The Company took certain steps during the third quarter of 1996
to restructure its balance sheet which will enable it to take
greater advantage of the strong Texas loan market. These steps
consisted of the decision to sell approximately $63 million in
low yielding mortgage-backed securities, which were classified as
available for sale, and to use the proceeds of the sale to repay
advances from the Federal Home Loan Bank. These transactions
will remove marginally profitable assets from the balance sheet
and free up capital which can be used to fund highly profitable
loans in the Company's Texas market. As a result of the decision
to sell the mortgage-backed securities, the Company recognized a
one-time, after-tax loss of $1.3 million, or $0.32 per share, in
the third quarter. This had no additional effect on
stockholders' equity or book value per share as these securities
had been marked to market in accordance with Statement of
Financial Accounting Standards No. 115 and accordingly, the loss
had already been reflected as a reduction in stockholders'
equity.
9<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
NET INTEREST INCOME
Net interest income for the third quarter of 1996 increased $1.1
million, or 16.4%, to $7.7 million compared to $6.6 million for
the third quarter of 1995. The increase in net interest income
was the result of an improved interest rate spread which
increased from 1.94% for the quarter ended September 30, 1995 to
2.51% for the quarter ended September 30, 1996. The Company's
net interest margin increased from 2.26% to 2.83% during the same
periods. The improvement in the interest rate spread was
primarily the result of an increase in the yield on loans
receivable from 7.65% during the third quarter of 1995 to 8.11%
during the third quarter of 1996 and a decrease in the average
rate paid on savings deposits from 5.24% to 5.05% for the
corresponding periods. The increase in yield on loans was caused
by the upward adjustment of the rates on the Company's existing
adjustable-rate loan portfolio and increased origination of
higher yielding loans by First Federal. The decrease in the
average rate paid on savings deposits was primarily the result of
maturing long-term certificates of deposit repricing in a lower
interest rate environment. The average balance of interest-
earning assets decreased $79.9 million, or 6.8%, from $1.2
billion for the quarter ended September 30, 1995 to $1.1 billion
for the quarter ended September 30, 1996. The decrease in the
average balance of interest-earning assets was primarily the
result of the sale of $86.4 million in mortgage-backed securities
during the first nine months of 1996.
Net interest income for the nine months ended September 30, 1996
increased $5.9 million, or 37.2%, to $21.8 million compared to
$15.9 million for the nine months ended September 30, 1995. The
increase in net interest income was the result of significant
growth in interest-earning assets and an improved interest rate
spread. The average balance of interest-earning assets increased
$108.3 million, or 11.0%, from $982.1 million for the nine months
ended September 30, 1995 to $1.1 billion for the nine months
ended September 30, 1996. The Company's interest rate spread
increased from 1.78% for the nine months ended September 30, 1995
to 2.36% for the nine months ended September 30, 1996 and the its
net interest margin increased from 2.16% to 2.67% during the same
periods. The increase in the average balance of interest-earning
assets was primarily the result of a $117.3 million or 17.2%
increase in the average balance of loans receivable. Loans
originated and purchased totaled $276.8 million for the nine
months ended September 30, 1996 compared to $127.7 million for
the comparable period in 1995. The Company's Texas operation
contributed about 58% of the 1996 originations compared to about
33% last year. Principal repayments for the first three quarters
of 1996 were $207.0 million compared to $103.5 million during the
first three quarters of 1995. The improvement in the interest
rate spread was primarily the result of an increase in the yield
on loans receivable from 7.39% during the first nine months of
1995 to 8.04% during the corresponding period of 1996. This
increase in yield was caused by the upward adjustment of the
rates on the Company's existing adjustable-rate loan portfolio
and the addition of the loan portfolios of First Federal.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the third quarter of 1996
was $165,000 compared to $83,000 for the like period in 1995 and
$495,000 for the first nine months of 1996 compared to $267,000
for the like period in 1995. At September 30, 1996, the
allowance for losses on loans was $5.6 million, which represented
.68% of net loans receivable compared to $5.1 million, or .65%,
of net loans receivable at December 31, 1995. The ratio of
nonaccruing loans to net loans receivable was .33% at September
30, 1996 compared to .31% at December 31, 1995. Management
considers many factors in determining the necessary levels of
loan loss reserves, including a detailed analysis of specific
loans in the portfolio, known and inherent risk in the portfolio,
estimated value of the underlying collateral, assessment of
general trends in the rest of the real estate market, and current
and prospective economic conditions.
NONINTEREST INCOME
Primarily as a result of the Company's strategic decision to
reduce its portfolio of lower-yielding mortgage-backed securities
during the third quarter of 1996, total noninterest income
decreased $2.4 million, from $904,000 for the quarter ended
September
10<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
30, 1995 to a loss of $1.5 million for the quarter ended
September 30, 1996. During the third quarter of 1996 the Company
incurred a $1.9 million loss on sale of mortgage-backed
securities and a $350,000 decrease in gain on real estate
operations. The loss on sale of mortgage-backed securities
resulted from the decision to sell approximately $63 million in
mortgage-backed securities classified as available for sale
during the quarter ended September 30, 1996. No such losses
occurred during the like period in 1995. The decrease in the
gain on real estate operations was largely attributable to a
$323,000 settlement during the third quarter of 1995 on real
estate acquired through foreclosure.
The non-recurring loss recognized on the Company's third quarter
decision to sell mortgage-backed securities also reduced non-
interest income for the nine-months ended September 30, 1996.
Total noninterest income decreased $840,000, or 50.1%, from $1.7
million for the nine months ended September 30, 1995 to $837,000
for the nine months ended September 30, 1996. Due to gains on
sales of mortgage-backed securities in the first two quarters of
1996, the net loss on mortgage-backed securities for the nine
months ended September 30, 1996 was $1.3 million. This loss,
however, was sufficient to offset increases in almost every other
category of noninterest income including a $168,000 increase in
gain on sale of loans, a $160,000 increase in other noninterest
income, a $121,000 increase in servicing and other loan fees, and
a $118,000 increase in fees for services to customers. The
increase in gain on sale of loans receivable was the result of an
increase in loan sales from $17.9 million for the nine months
ended September 30, 1995 to $36.6 million for the nine months
ended September 30, 1996. The gain on sale of loans represents
origination and other fees retained by the Company in connection
with the sale of fixed-rate loans originated for sale to
institutional investors generally on an individual loan basis.
The increased sales volume reflects the borrowers' increased
demand for fixed-rate loans during 1996 combined with sales
activity from First Federal. The increase in other noninterest
income was due primarily to a $74,000 profit on the sale of
assets owned by the Company's subsidiary, J.S. Services of
Florida, Inc. The increase in servicing and other loan fees and
the increase in fees for services to customers were due primarily
to fees generated by First Federal during the nine months ended
September 30, 1996.
NONINTEREST EXPENSE
Noninterest expense increased $5.8 million, or 129.7%, from $4.5
million for the quarter ended September 30, 1995 to $10.2 million
for the quarter ended September 30, 1996. The increase was
attributable to the $5.6 million one-time assessment which the
Company was required to pay to help recapitalize the SAIF.
Noninterest expense for the nine month period increased $10.3
million, or 101.9%, from $10.1 million for the nine months ended
September 30, 1995 to $20.4 million for the nine months ended
September 30, 1996. The increase was attributable to the $5.6
million one-time assessment to recapitalize the SAIF and
increases of $2.2 million in compensation and employee benefit
expense, $727,000 in other noninterest expense, $510,000 in
amortization of excess cost over fair value of net assets
acquired and $461,000 in federal insurance premiums expense which
were generally attributable to the inclusion of the results of
operations of First Federal. The excess of cost over fair value
of assets acquired in the 1995 Texas acquisitions was
approximately $15 million and is being amortized over 15 years.
In addition, legal, examination and other professional fees
increased $427,000 as the result of fees paid in connection with
income tax planning and legal expenses associated with the
Company's acquisition activities.
The Company continued to focus on expense control during the
period. The ratios of noninterest expense to average assets
prior to the one-time SAIF assessment were 1.65% and 1.75% for
the three and nine month periods ended September 30, 1996,
respectively. While this represented an increase over the
comparable 1995 ratios of 1.47% and 1.33% for the three and nine
month periods, respectively, the 1996 ratios were still
significantly below historical industry averages. The increases
during 1996 were generally caused by the addition of First
Federal during 1995.
11<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
INCOME TAX EXPENSE
The Company provides for state and federal income tax expense
based upon earnings before income taxes. The effective tax rate
prior to the non deductible amortization of cost in excess of
fair value of net assets acquired for the nine months ended
September 30, 1996 was 38.3% compared to 35.5% for the like
period in 1995. The Company accounts for income taxes under the
provisions of Statement of Financial Accounting Standards (SFAS)
No. 109 which requires the asset and liability method. The
objective of the asset and liability method is to establish
deferred tax assets and liabilities for the temporary differences
between the financial reporting basis and the tax basis of the
Company's assets and liabilities at enacted tax rates expected to
be in effect when such amounts are realized or settled.
FINANCIAL CONDITION
The Company's total assets were $1,128.3 million at September 30,
1996 compared to $1,142.9 million at December 31, 1995. During
this period, the Company continued to restructure its balance
sheet to adjust its exposure to interest rate risk and to enable
it to take greater advantage of the strong Texas loan market.
Mortgage-backed securities decreased $77.3 million, or 33.2%
mainly as the result of the sale of $86.3 million in lower
yielding mortgage-backed securities during the nine months ended
September 30, 1996. The proceeds from these sales were used
primarily to fund loan originations, increase investment
securities and decrease borrowed money. Loans receivable
increased $32.0 million, or 4.1%, investment securities increased
$34.7 million, or 71.4% and borrowed money decreased $31.1
million, or 17.8%.
Total stockholders' equity increased by $1.4 million, or 1.8%, to
$81.7 million at September 30, 1996 from $80.3 million at
December 31, 1995. The Company's ratio of stockholders' equity
to assets increased to 7.24% at September 30, 1996 from 7.02% at
December 31, 1995. The increase in stockholders' equity reflects
the Company's nine month earnings of $770,000 and the
amortization of certain stock awards during the period, partially
offset by a $198,000 increase in unrealized losses on assets
available for sale and the payment of $898,000 in dividends to
stockholders. The Company's book value per share at September
30, 1996 was $21.59 compared to $21.49 at December 31, 1995.
Unallocated ESOP shares of 397,848 and 439,830 were excluded in
calculating book value per share at September 30, 1996 and
December 31, 1995, respectively.
NONPERFORMING ASSETS
Summarized below are restructured loans and nonperforming assets
at September 30, 1996 and December 31, 1995. Nonperforming
assets do not include a restructured loan with an outstanding
balance of $3.1 million at September 30, 1996 and December 31,
1995 on which the borrower has been current in meeting the
restructured terms since the date of restructuring. The
restructured loan provides for principal amortization, and the
loan has an interest rate and other terms that are at least equal
to market terms. Other restructured loans are included in
nonperforming assets.
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -----------
<S> <C> <C>
Restructured loans $ 3,595 3,659
------- -----
Nonaccruing loans:
Residential real estate $ 1,305 1,684
Commercial real estate - 26
Construction 1,288 707
Commercial 75 15
Consumer 63 42
------- -----
Total nonaccruing loans 2,731 2,474
------- -----
Foreclosed real estate, net 5,215 3,670
------- -----
Restructured and nonaccruing loans
and foreclosed assets, net $11,541 9,803
======= =====
Nonperforming assets, net $ 8,451 6,690
======= =====
Nonperforming assets, net as a
percentage of total assets 0.75% 0.59%
</TABLE>
12<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Total nonperforming assets increased $1.8 million from $6.7
million at December 31, 1995 to $8.5 million at September 30,
1996 primarily as the result of a $581,000 increase in
nonaccruing construction loans and a $1.5 million increase in
real estate acquired through foreclosure. The increase in
nonaccruing construction loans was due primarily to the addition
of a $567,000 construction loan secured by a single family
residence. The increase in real estate acquired through
foreclosure was primarily the result of foreclosures on five
construction loans secured by single family residences.
Loans are placed on nonaccrual status when either principal or
interest is more than 90 days past due or at such time when
contractual amounts due are deemed uncollectible, whichever is
sooner. Any subsequent interest payments received are recorded
as interest income in the period received.
At September 30, 1996, the Company had $3.9 million of impaired
loans, which are represented by loans on nonaccrual status and
loans internally classified. At September 30, 1996 $1,000 of
impaired loans had specific reserves of $1,000 and the remaining
impaired loans of $3.9 million had no specific reserves.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no business other than that of the
Association and the Bank. The Company is dependent on future
earnings, dividends from the Association and the Bank, or
borrowings for sources of funds. The Association and the Bank
are subject to certain regulatory limitations with respect to the
payment of dividends to the Company.
The Association and the Bank meet all existing regulatory capital
requirements. Capital ratios at September 30, 1996, as computed
under OTS capital standards, are as follows:
<TABLE>
<CAPTION>
Regulatory Capital
--------------------------------------------------
Tangible Core Risk-based
-------------- ------------- ---------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Association's regulatory
capital $ 42,907 5.68% $ 42,907 5.68% $46,998 10.96%
Capital requirement 11,335 1.50 22,670 3.00 34,305 8.00
-------- ---- -------- ---- ------- -----
Excess $ 31,572 4.18% $ 20,237 2.68% $12,693 2.96%
======== ==== ======== ==== ======= =====
</TABLE>
<TABLE>
<CAPTION>
Regulatory Capital
--------------------------------------------------
Tangible Core Risk-based
-------------- ------------- ---------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Bank's regulatory capital $ 22,100 6.12% $22,100 6.12% $23,578 10.82%
Capital requirement 5,420 1.50 10,840 3.00 17,438 8.00
-------- ---- ------- ---- ------- -----
Excess $ 16,680 4.62% $11,260 3.12% $ 6,140 2.82%
======== ==== ======== ==== ======= =====
</TABLE>
13<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Association and the Bank are required by federal regulations
to maintain specified levels of liquid assets, consisting of cash
and eligible investments. The current level of liquidity
required by the OTS is 5% of the sum of net withdrawable deposits
and borrowings due within one year. The Association and the Bank
have consistently maintained liquidity in excess of required
amounts. The Association's liquidity ratios were 5.41% and 5.78%
at September 30, 1996 and December 31, 1995, respectively. The
Bank's liquidity ratios were 6.00% and 16.61% at September 30,
1996 and December 31, 1995, respectively.
The Company's primary sources of funds are deposits, principal
and interest payments on loans and mortgage-backed securities,
proceeds from maturing investment securities and cash flows from
operations. In addition, the Association and the Bank have
substantial borrowing authority with the Federal Home Loan Banks
and the ability to borrow against their investment portfolio.
The principal uses of funds by the Company include the
origination of loans secured by real estate and the purchase of
investment securities and mortgage-backed securities.
The Company's primary source of cash for investing and operating
activities has been principal repayments on loans and mortgage-
backed securities, proceeds from the sale of loans and mortgage-
backed securities, and proceeds from maturing investment
securities. Cash flows from investing activities provided $9.9
million in funds during the first nine months of 1996. Cash
flows from investing activities which consisted primarily of
$225.7 million in principal repayments on loans and mortgage-
backed securities, $122.9 million in sales of loan and mortgage-
backed securities and $28.3 million in proceeds from maturing
investment securities, were used primarily to fund the Company's
investing activities of originating loans and purchasing
mortgage-backed and investment securities during the nine months
ended September 30, 1996. In addition, cash flows from investing
activities and increases in savings deposits during the nine
months ended September 30, 1996 were used to reduce borrowed
money by $31.1 million.
The Company anticipates that it will have sufficient funds
available to meet its current commitments. At September 30,
1996, the Company had commitments to originate loans of
$14.7 million, to purchase residential adjustable-rate mortgages
of $2.1 million, and to sell loans of $3.2 million. Certificates
of deposit which are scheduled to mature in one year or less at
September 30, 1996 totaled $434.4 million. Management believes
that a significant portion of such deposits will remain with the
Company. In addition, at September 30, 1996, the Association has
an available line of credit with the FHLB of Des Moines totaling
$43.0 million and the Bank has an available line of credit with
the FHLB of Dallas totaling $6.5 million.
IMPACT OF INFLATION AND CHANGING PRICES
The unaudited consolidated financial statements and related data
presented herein have been prepared in accordance with generally
accepted accounting principles, which require the measurement of
financial position and results of operations in the measurements
of historical dollars without considering changes in the relative
purchasing power of money over time because of inflation. Unlike
most industrial companies, virtually all of the assets and
liabilities of the Company are monetary in nature. As a result,
interest rates have a more significant impact on the Company's
performance than the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or
in the same magnitude as the prices of goods and services. In
the present interest rate environment, the liquidity, maturity
structure, and quality of the Company's assets and liabilities
are important factors in the maintenance of acceptable
performance levels.
14<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
IMPACT OF NEW ACCOUNTING STANDARDS
Accounting for Impairment of Long-Lived Assets
On January 1, 1996 the Company adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
(SFAS 121). SFAS 121 requires, among other things, that long-
lived assets and certain identifiable intangibles 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. The adoption of the provisions of
SFAS 121 on January 1, 1996 did not have a material impact on the
Company's financial statements.
ACCOUNTING FOR MORTGAGE SERVICING RIGHTS
On January 1, 1996 the Company adopted Statement of Financial
Accounting Standards No. 122, "Accounting for Mortgage Servicing
Rights" (SFAS 122) an amendment of FASB Statement No. 65. SFAS
122 amends SFAS 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. A
mortgage banking enterprise that acquires mortgage servicing
rights through either the purchase or origination of mortgage
loans and sells or securitizes those loans with servicing rights
retained should allocate the total cost of the mortgage loans to
the mortgage servicing rights and the loans (without the mortgage
servicing rights) based on their relative fair values, if it is
practicable to estimate those fair values. If it is not
practicable to estimate the fair values of the mortgage servicing
rights and the mortgage loans (without the mortgage servicing
rights), the entire cost of purchasing or originating the loans
should be allocated to the mortgage loans and no cost should be
allocated to mortgage servicing rights. SFAS 122 also requires
that a mortgage enterprise assess its capitalized mortgage
servicing rights for impairment based on the fair value of those
rights. The adoption of SFAS 122 did not have a material effect
on the Company's financial statements.
ACCOUNTING FOR STOCK-BASED COMPENSATION
During October 1995, the FASB issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123). SFAS 123 establishes financial
accounting and reporting standards for stock-based employee
compensation plans and also applies to transactions in which an
entity issues its equity instruments to acquire goods or services
from nonemployees. SFAS 123 defines a fair value based method of
accounting for an employee stock option or similar equity
instruments and encourages all entities to adopt that method of
accounting. However, it also allows an entity to continue to
measure compensation cost for those plans using the intrinsic
value-based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25). Pro forma disclosures required for entities
that elect to continue to measure compensation cost using APB 25
must include the effect of all awards granted in fiscal years
that begin after December 15, 1994. The Company has elected to
continue to measure compensation cost using APB 25, therefore the
adoption of SFAS No. 123 did not have any impact on the Company's
financial statements.
ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND
EXTINQUISHMENTS OF LIABILITIES
During June 1996, the FASB issued SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinquishment of
Liabilities", which provides consistent standards for
distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. The statement also
requires that a liability can be derecognized if and only if
either (a) the debtor pays the creditor and is relieved of its
obligation for the liability or (b) the debtor is legally
released from the liability either judicially or by the creditor.
The Statement provides implementation guidance for assessing
isolation of transferred assets and for accounting for transfers
of partial interests, servicing of financial assets,
securitizations, transfers of sales-type and direct financing
lease receivables, securities lending transactions, repurchase
transactions including "dollar rolls", "wash sales", loan
syndications and participations, risk participation in banker's
acceptances, factoring arrangements, transfers of receivables
with recourse, and extinguishments of liabilities.
15<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
This statement is effective for transactions occurring after
December 31, 1996, and is to be applied prospectively. Earlier
or retroactive application is not permitted. The Company has not
determined the impact of the statement on its financial
statements as the Statement was only recently issued.
16<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Not applicable.
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
---------------------------------------------------
None.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Exhibits:
Exhibit 27 Financial Data Schedule.
17<PAGE>
<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 thereunto duly authorized.
JEFFERSON SAVINGS BANCORP, INC.
Registrant
Date: November 14, 1996 By: /s/ Paul J. Milano
-----------------------------------
Paul J. Milano
(Senior Vice President and Chief
Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted
from consolidated financial statements and notes thereto of
Jefferson Savings Bancorp, Inc. at and for the nine months ended
September 30, 1996 and is qualified in its entirety by reference
to such financial statements. Dollar amounts (other than per
share data) is in thousands.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 6,252
<INT-BEARING-DEPOSITS> 8,868
<FED-FUNDS-SOLD> 25
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 238,853
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 825,703
<ALLOWANCE> 5,573
<TOTAL-ASSETS> 1,128,339
<DEPOSITS> 876,636
<SHORT-TERM> 143,901
<LIABILITIES-OTHER> 26,121
<LONG-TERM> 0
<COMMON> 45
0
0
<OTHER-SE> 81,636
<TOTAL-LIABILITIES-AND-EQUITY> 1,128,339
<INTEREST-LOAN> 48,203
<INTEREST-INVEST> 11,961
<INTEREST-OTHER> 1,272
<INTEREST-TOTAL> 61,436
<INTEREST-DEPOSIT> 33,243
<INTEREST-EXPENSE> 39,640
<INTEREST-INCOME-NET> 21,796
<LOAN-LOSSES> 495
<SECURITIES-GAINS> (1,296)
<EXPENSE-OTHER> 20,419
<INCOME-PRETAX> 1,719
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 770
<EPS-PRIMARY> .19
<EPS-DILUTED> .20
<YIELD-ACTUAL> 2.67
<LOANS-NON> 2,731
<LOANS-PAST> 0
<LOANS-TROUBLED> 3,595
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,096
<CHARGE-OFFS> 17
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 5,573
<ALLOWANCE-DOMESTIC> 1,942
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,631
</TABLE>
