<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
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 registrant as specified in its charter)
Delaware 43-1625841
- ----------------------- ------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) 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, 1998
- ---------------------------- -------------------------------
Common Stock, Par Value $.01 10,065,264 shares
1<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 Income 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 10
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 19
PART II OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of
Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 21
SIGNATURES 22
2<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1998 and December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
--------------- ---------------
<S> <C> <C>
Cash $ 7,322,136 9,039,932
Interest-bearing deposits 22,644,290 12,673,066
Federal funds sold - 9,870,000
Investment securities available for sale, at
fair value (amortized cost of $181,057,537
and $129,574,313 at September 30, 1998 and
December 31, 1997, respectively) 181,913,699 129,996,500
Mortgage-backed securities available for sale,
at fair value (amortized cost of $24,103,945
and $85,270,031 at September 30, 1998 and
December 31, 1997, respectively) 24,247,396 85,480,293
Loans receivable, net 1,025,006,062 924,919,606
Investment in real estate, net 3,172,708 4,255,921
Stock in Federal Home Loan Banks 7,957,700 16,741,500
Office properties and equipment, net 11,082,114 11,532,147
Excess cost over fair value of net assets acquired 22,594,072 23,848,993
Accrued income and other assets 11,254,867 9,697,539
--------------- -------------
$ 1,317,195,044 1,238,055,497
=============== =============
Liabilities and Stockholders' Equity
------------------------------------
Savings deposits $ 1,052,840,693 1,044,881,130
Borrowed money 120,696,679 65,908,257
Deferred tax liability 803,800 471,000
Advance payments by borrowers for taxes and
insurance 11,037,658 3,550,798
Accrued expenses and other liabilities 8,163,383 6,984,474
--------------- -------------
Total liabilities 1,193,542,213 1,121,795,659
--------------- -------------
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 10,101,464 shares
and 10,035,998 shares at September 30, 1998
and December 31, 1997, respectively 101,015 100,360
Additional paid-in capital 65,737,809 62,797,493
Retained earnings, subject to certain restrictions 62,580,391 58,978,239
Accumulated other comprehensive income 599,613 379,251
Unamortized restricted stock awards (74,242) (120,151)
Unearned ESOP shares (4,983,611) (5,706,665)
Treasury stock, at cost: 17,300 shares and
21,106 shares at September 30, 1998 and
December 31, 1997, respectively (308,144) (168,689)
--------------- -------------
Total stockholders' equity 123,652,831 116,259,838
--------------- -------------
$ 1,317,195,044 1,238,055,497
=============== =============
</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, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
------------------------ ------------------------
<S> <C> <C> <C> <C>
Interest and dividend income:
Loans receivable $ 18,429,310 19,914,652 54,993,589 59,465,712
Mortgage-backed securities 377,567 1,370,744 2,617,009 4,436,310
Investment securities 3,289,652 2,385,983 8,383,006 6,553,659
Interest-bearing deposits and
federal funds sold 402,404 431,687 1,316,019 852,795
Stock in Federal Home Loan Banks 129,120 284,854 565,480 833,590
------------ ---------- ---------- ----------
Total interest and dividend
income 22,628,053 24,387,920 67,875,103 72,142,066
------------ ---------- ---------- ----------
Interest expense:
Savings deposits 13,373,110 13,842,149 39,707,073 39,823,827
Borrowed money 1,030,433 1,113,152 2,888,151 3,867,112
------------ ---------- ---------- ----------
Total interest expense 14,403,543 14,955,301 42,595,224 43,690,939
------------ ---------- ---------- ----------
Net interest income 8,224,510 9,432,619 25,279,879 28,451,127
Provision for losses on loans - 246,000 (1,200,000) 1,158,000
------------ ---------- ---------- ----------
Net interest income after
provision for losses on loans 8,224,510 9,186,619 26,479,879 27,293,127
Noninterest income:
Servicing and other loan fees 187,732 180,323 681,790 596,677
Fees for other services to customers 286,441 272,656 782,552 775,174
Gain on sales of investment
securities, net 2,130 940,625 2,130 940,625
Gain (loss) on sales of mortgage-backed
securities, net - (936,803) 48,166 (936,803)
Gain on sales of loans receivable, net 342,122 214,517 1,422,832 353,983
Results of real estate operations, net (5,966) (20,998) 158,226 112,408
Other 57,793 153,990 213,757 420,275
------------ ---------- ---------- ----------
Total noninterest income 870,252 804,310 3,309,453 2,262,339
------------ ---------- ---------- ----------
Noninterest expense:
General and administrative:
Compensation and employee benefits 3,189,579 3,171,728 10,370,112 8,893,833
Occupancy 830,764 720,929 2,390,908 2,041,277
Advertising 132,821 104,523 395,475 472,448
Federal insurance premiums 237,486 217,333 727,051 566,439
Legal, examination, and other
professional fees 392,446 502,974 1,217,809 1,027,388
Other 1,080,262 981,116 3,232,831 2,891,946
------------ ---------- ---------- ----------
Total general and administrative 5,863,358 5,698,603 18,334,186 15,893,331
Amortization of excess cost over
fair value of net assets acquired 452,727 452,794 1,356,371 1,256,945
------------ ---------- ---------- ----------
Total noninterest expense 6,316,085 6,151,397 19,690,557 17,150,276
------------ ---------- ---------- ----------
Income before income taxes 2,778,677 3,839,532 10,098,775 12,405,190
Income tax expense 1,237,000 1,480,000 4,540,500 4,754,000
------------ ---------- ---------- ----------
Net income $ 1,541,677 2,359,532 5,558,275 7,651,190
============ ========== ========== ==========
Earnings per share, basic $ .16 .25 .59 .85
============ ========== ========== ==========
Earnings per share, diluted $ .16 .24 .56 .82
============ ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
Nine months ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional other
------------------- paid-in Retained comprehensive
Shares Dollars capital earnings income
------ ------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 10,035,998 $100,360 62,797,493 58,978,239 379,251
Net income -- -- -- 5,558,275 --
Dividends paid ($.21 per share) -- -- -- (1,956,123) --
Release of ESOP shares in lieu
of cash dividend on allocated
ESOP shares -- -- 57,397 -- --
Stock issued in dividend
reinvestment and stock
purchase plan 3,091 31 153,391 -- --
Amortization of restricted
stock awards -- -- -- -- --
Tax benefit of restricted
stock awards vested -- -- 431,000 -- --
Amortization of ESOP shares -- -- 1,690,485 -- --
Other comprehensive income -- -- -- -- 220,362
Purchase of Treasury stock -- -- -- -- --
Stock options exercised 62,375 624 270,043 -- --
Tax benefit of non-incentive
stock options exercised -- -- 338,000 -- --
---------- -------- ---------- ---------- ----------
Balance at September 30, 1998 10,101,464 $101,015 65,737,809 62,580,391 559,613
========== ======== ========== ========== ==========
<CAPTION>
<CAPTION>
Unamortized Treasury stock Total
restricted Unearned -------------- stockholders'
stock awards ESOP shares Stock Dollars equity
------------ ----------- ------ ------- ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 (120,151) (5,706,665) (21,106) (168,689) 116,259,838
Net income -- -- -- -- 5,558,275
Dividends paid ($.21 per share) -- -- -- -- (1,956,123)
Release of ESOP shares in lieu
of cash dividend on allocated
ESOP shares -- 38,601 -- -- 95,998
Stock issued in dividend
reinvestment and stock
purchase plan -- -- 5,256 41,996 195,418
Amortization of restricted
stock awards 45,909 -- -- -- 45,909
Tax benefit of restricted
stock awards vested -- -- -- -- 431,000
Amortization of ESOP shares -- 684,453 -- -- 2,374,938
Other comprehensive income -- -- -- -- 220,362
Purchase of Treasury stock -- -- (17,300) (308,144) (308,144)
Stock options exercised -- -- 15,850 126,693 397,360
Tax benefit of non-incentive
stock options exercised -- -- -- -- 338,000
---------- ---------- ---------- -------- -----------
Balance at September 30, 1998 (74,242) (4,983,611) (17,300) (308,144) 123,652,831
========== ========== ========== ======== ===========
</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, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
----------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,558,275 7,651,190
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,542,323 2,319,728
Provision for losses on loans (1,200,000) 1,158,000
Net gain on sales of assets (1,730,781) (709,064)
Loans originated for sale (66,352,616) (19,945,359)
Sale of loans originated for sale 65,079,811 21,079,638
Deferred income taxes 332,800 (926,193)
Stock dividend from Federal Home Loan Banks (140,600) (157,000)
Other, net 668,755 2,642,629
------------ ------------
Net cash provided by operating activities 6,757,967 13,113,569
------------ ------------
Cash flows from investing activities:
Principal repayments on:
Loans receivable 339,174,303 301,531,843
Mortgage-backed securities 20,856,704 14,569,676
Proceeds from maturity of investment securities 88,522,130 20,585,000
Proceeds from sale of:
Loans receivable 26,583,762 6,436,300
Mortgage-backed securities available for sale 45,347,468 66,640,888
Investment securities available for sale - 55,024,942
Proceeds from redemption of Federal Home
Loan Bank stock 8,924,400 -
Cash invested in:
Loans receivable - originated (193,410,202) (279,127,756)
Loans receivable - purchased (271,793,911) (20,446,112)
Mortgage-backed securities (5,110,476) (61,468,339)
Investment securities (139,970,313) (63,946,878)
Proceeds from sale of real estate 5,068,794 3,565,908
Cash paid for acquisitions - (15,266,182)
Cash and cash equivalents from acquisitions - 8,296,533
Other, net (1,033,725) (1,198,429)
------------ ------------
Net cash (used in) provided by investing
activities (76,841,066) 35,197,394
------------ ------------
Cash flows from financing activities:
Increase in savings deposits, net 7,862,735 17,610,111
Increase (decrease) in borrowed money, net 54,788,422 (56,381,089)
Increase in advance payments by borrowers for
taxes and insurance 7,486,860 8,660,632
Dividends paid (1,956,123) (1,371,139)
Other, net 284,633 522,757
------------ ------------
Net cash provided by (used in) financing
activities 68,466,527 (30,958,728)
------------ ------------
Increase (decrease) in cash and cash
equivalents (1,616,572) 17,352,235
Cash and cash equivalents at beginning of period 31,582,998 23,705,494
------------ ------------
Cash and cash equivalents at end of period $ 29,966,426 41,057,729
============ ============
Supplemental disclosures of cash flow information:
Interest paid $ 42,590,230 44,172,415
Income taxes paid 4,891,659 5,149,393
Noncash investing activities:
Common stock issued for acquisitions - 15,276,847
Additions to real estate acquired in settlement
of loans or through foreclosure 4,679,960 2,699,146
Loans originated to finance the sale of real
estate - 37,500
Noncash financing activity - interest credited
to savings deposits 29,375,896 29,431,742
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
6 <PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(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, 1998 and 1997,
respectively.
Operating results for the three and nine months ended
September 30, 1998 are not necessarily indicative of the
results that may be expected for the year ending
December 31, 1998.
(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 February 28, 1997, the Company completed its
acquisition of L&B Financial, Inc. in Sulphur Springs,
Texas (L&B Financial) in exchange for a combination of
$15.3 million in cash and 1,095,900 shares of the
Company's common stock. L&B Financial's total assets
were $140.8 million, consisting primarily of loans
receivable of $70.4 million and mortgage-backed and
investment securities of $57.3 million; L&B Financial's
total deposits were $104.9 million. As a result of the
L&B Financial acquisition, the Company added six
branches in the northeast Texas counties of Bowie, Camp,
Franklin, Hopkins, Morris and Titus. The acquisition
was accounted for using the purchase method. Under the
purchase method of accounting, the results of operations
of L&B Financial are included in the Company's results
of operations only since the date of its acquisition.
The excess of cost over fair value of net assets
acquired was $5.9 million. Upon completion of the
acquisition, L&B Financial was merged into First
Federal.
7<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(4) Earnings Per Share
------------------
The Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share," on December 31, 1997. SFAS No.
128 replaces the previously reported primary earnings
per share and fully-diluted earnings per share with
basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes
any dilutive effect of stock options. Diluted earnings
per share is similar to fully-diluted earnings per
share.
The Company declared a two-for-one stock split which was
effected through a 100% stock dividend payable on
December 17, 1997. All per share data for prior years
has been restated to conform with the requirements of
SFAS No. 128 and to give effect to the stock split.
The following tables reconcile the numerators and
denominators for basic and diluted earnings per share
for the three-month and nine-month periods ended
September 30, 1998 and 1997:
<TABLE>
<CAPTION>
Three months ended September 30,
1998 1997
----------- -----------
<S> <C> <C>
Numerator:
Net income (basic and diluted
earnings per share) $ 1,541,677 2,359,532
=========== ===========
Denominator:
Average shares outstanding
(basic earnings per share) 9,406,046 9,221,908
Effect of dilutive stock options 467,291 444,758
----------- -----------
Average shares outstanding
after assumed conversions
(diluted earnings per share) 9,873,337 9,666,666
=========== ===========
Nine months ended September 30,
1998 1997
----------- -----------
Numerator:
Net income (basic and diluted
earnings per share) $ 5,558,275 7,651,190
=========== ===========
Denominator:
Average shares outstanding
(basic earnings per share) 9,348,932 8,960,606
Effect of dilutive stock options 504,435 425,672
----------- -----------
Average shares outstanding
after assumed conversions
(diluted earnings per share) 9,853,367 9,386,278
=========== ===========
</TABLE>
Only employee stock ownership plan shares that have been
allocated or committed to be released are considered
outstanding for earnings per share calculations.
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(5) Comprehensive Income
--------------------
On January 1, 1998 the Company adopted the provisions of
SFAS No. 130, "Reporting Comprehensive Income," which
established standards for reporting and display of
comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-
purpose financial statements. For the three-month and
nine-month periods ended September 30, 1998 and 1997,
unrealized gains and losses on assets available for
sale were the Company's only other comprehensive income
component. Comprehensive income for the three-month
periods ended September 30, 1998 and 1997 is summarized
as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net income $ 1,541,677 2,359,532
Other comprehensive income (loss):
Realized and unrealized holding gain (loss)
arising during the period, net of tax
expense of $227,811 and $484,928 in
1998 and 1997, respectively 341,716 727,392
Less: reclassification adjustment for realized
gain (loss) included in net income, net of tax 1,278 2,293
----------- -----------
Total other comprehensive income (loss) 340,438 725,099
----------- -----------
Total comprehensive income $ 1,882,115 3,084,631
=========== ===========
</TABLE>
For the nine-month periods ended September 30, 1998 and
1997, unrealized gains and losses on assets available
for sale were the Company's only other comprehensive
income component. Comprehensive income for the nine-
month periods ended September 30, 1998 and 1997 is
summarized as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net income $ 5,558,275 7,651,190
Other comprehensive income (loss):
Realized and unrealized holding gain (loss)
arising during the period, net of tax
expense of $167,026 and $322,441
in 1998 and 1997, respectively 250,540 483,662
Less: reclassification adjustment for realized
gain (loss) included in net income, net of tax 30,178 2,293
----------- -----------
Total other comprehensive income (loss) 220,362 481,369
----------- -----------
Total comprehensive income $ 5,778,637 8,132,559
=========== ===========
9<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, 1998.
RESULTS OF OPERATIONS
NET INCOME
Net income for the third quarter of 1998 was $1.5 million
compared to $2.4 million for the third quarter of 1997. Basic
and diluted earnings per share were $0.16 and $0.16,
respectively for the third quarter of 1998 compared to $0.25
and $0.24, respectively for the comparable period a year ago.
Annualized return on average equity and annualized return on
average assets for the third quarter of 1998 were 5.04% and
0.48%, respectively compared to 8.45% and 0.74%, respectively
for the third quarter of 1997.
Net income for the first nine months of 1998 was $5.6 million
compared to $7.7 million for the first nine months of 1997.
Basic and diluted earnings per share were $0.59 and $0.56,
respectively for the first nine months of 1998 compared to
$0.85 and $0.82, respectively for the comparable period a year
ago. Annualized return on average equity and annualized
return on average assets for the first nine months of 1998
were 6.18% and 0.59%, respectively compared to 9.66% and
0.81%, respectively for the first nine months of 1997.
The lower interest rate environment during 1998 continued to
fuel a refinancing demand for lower rate, fixed-rate loans
resulting in a compression of interest rate spreads throughout
the banking industry. The decline in the Company's net income
reflects a narrowing interest rate spread attributable to loan
refinancing activity, which removed many higher-yielding loans
from the portfolio.
NET INTEREST INCOME
Net interest income for the third quarter of 1998 decreased
$1.2 million, or 12.8%, to $8.2 million compared to $9.4
million for the third quarter of 1997. The decrease in net
interest income was largely attributable to a decline in the
Company's interest rate spread from 2.78% for the quarter
ended September 30, 1997 to 2.34% for the quarter ended
September 30, 1998. The Company's net interest margin also
decreased from 3.10% to 2.70% during the same periods. The
decline in the interest rate spread was primarily due to a
decrease in the average yield on interest-earning assets from
8.00% for the third quarter of 1997 to 7.44% for the third
quarter of 1998. This decrease was only partially offset by
a decrease in the average cost of interest-bearing liabilities
from 5.22% for the third quarter of 1997 to 5.10% for the
third quarter of 1998.
Loans originated and purchased reached record levels for the
third straight quarter, totaling $237.7 million for the third
quarter of 1998 compared to $99.9 million for the comparable
period in 1997. However, refinancings continued to erode the
Company's higher yielding loans resulting in a shift in the
Company's loan portfolio into lower margin loans. Principal
repayments totaled $112.5 million for the third quarter of
1998 compared to approximately $111.4 million for the third
quarter of 1997. Proceeds from sales of fixed-rate loans and
gains on sales of loans for the third quarter of 1998 were
$22.2 million and $342,000, respectively, compared to $15.3
million and $215,000, respectively, for the third quarter of
1997. The Company invests in adjustable-rate loans to limit
its exposure to interest rate
10<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
risk and its ongoing strategy continues to focus on rebuilding
the adjustable-rate loan portfolio and on enhancing the interest
rate margin through other areas of lending. In order to be
competitive with fixed-rate loans in a low interest rate
environment, however, adjustable rate loan products must be
priced at a narrower spread over the Company's cost of funds
during the first year after origination resulting in additional
pressure on the Company's net interest margin.
Net interest income for the nine months ended September 30,
1998 decreased $3.2 million, or 11.1%, to $25.3 million
compared to $28.5 million for the nine months ended September
30, 1997. The decrease in net interest income was largely
attributable to a decline in the Company's interest rate
spread from 2.87% for the nine months ended September 30, 1997
to 2.48% for the nine months ended September 30, 1998. The
Company's net interest margin also decreased from 3.15% to
2.82% during the same periods. The decline in the interest
rate spread was primarily due to a decrease in the average
yield on interest-earning assets from 8.00% for the first nine
months of 1997 to 7.57% for the first nine months of 1998.
This decrease was only partially offset by a decrease in the
average cost of interest-bearing liabilities from 5.13% for
the first nine months of 1997 to 5.09% for the first nine
months of 1998.
Principal repayments on loans experienced a 12.5% increase,
totaling $339.2 million for the nine months ended September 30,
1998 compared to $301.5 million for the nine months ended
September 30, 1997. Loans originated and purchased totaled
$531.6 million for the first nine months of 1998 compared to
$319.5 million for the comparable period in 1997. Proceeds from
sales of fixed-rate loans and gains on sales of loans for the
first nine months of 1998 were $91.7 million and $1.4 million,
respectively, compared to $27.5 million and $354,000,
respectively, for the first nine months of 1997.
PROVISION FOR LOSSES ON LOANS
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 real estate market, and
current and prospective economic conditions. Reflecting the
shift in a portion of the loan portfolio from higher risk
construction loans to permanent residential mortgage loans, the
Company recorded no provision for losses on loans for the third
quarter of 1998 compared to $246,000 for the third quarter of
1997. For the nine-month period, the Company recorded a
$1.2 million reversal to the provision for losses on loans. The
Office of Thrift Supervision (OTS), after a 1997 examination,
had required the Company's Texas subsidiary, First Federal, to
base its loan loss reserves on certain thrift industry average
loss experiences that were significantly higher than the actual
loss experience of First Federal. As a result of the 1998 OTS
examination, the OTS removed these requirements, and First
Federal, like other financial institutions, can now maintain its
allowance for loan losses at an amount considered adequate to
provide for potential losses in its loan portfolio. At
September 30, 1998, the allowance for losses on loans was $6.7
million, which represented .65% of net loans receivable compared
to $8.2 million, or .88% of net loans receivable at December 31,
1997. Loan charge-offs declined to $282,000 for the first
nine months of 1998 compared to $372,000 for the first nine
months of 1997. The ratio of nonaccruing loans to net loans
receivable improved to .40% at September 30, 1998 compared
to .58% at December 31, 1997.
11<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
NONINTEREST INCOME
Total noninterest income increased $66,000, or 8.2%, from
$804,000 for the quarter ended September 30, 1997 to $870,000
for the quarter ended September 30, 1998. For the nine-
month period, total noninterest income increased $1.0 million,
or 46.3%, from $2.3 million for the nine months ended September
30, 1997 to $3.3 million for the nine months ended September 30,
1998. The increases in noninterest income were primarily the
result of increases in gain on sale of loans resulting from
the increase in loan sales activity which reflects a greater
demand for fixed-rate loan products in a low interest-rate
environment. During the third quarter of 1997, management
decided to sell $23 million in mortgage-backed securities and
$43 million in investment securities, all of which were
classified as available for sale, resulting in a net pretax
gain of $4,000.
NONINTEREST EXPENSE
Noninterest expense increased $165,000, or 2.7%, from $6.2
million for the quarter ended September 30, 1997 to $6.3 million
for the quarter ended September 30, 1998. Occupancy expense
increased $110,000 primarily as the result of additional
depreciation expense associated with improvements to the
Company's data processing equipment and loan origination
facilities. Other noninterest expense increased $99,000
primarily as the result of expenses incurred in connection with
the expansion of the loan quality control function and
management's decision to provide full-time security guards in
certain offices. These increases were partially offset
by a $111,000 decrease in legal, examination and other
professional fees which was due primarily to expenses incurred
during the third quarter of 1997 related to integrating the
Texas acquisitions. No such expenses were incurred in the
current quarter.
Noninterest expense increased $2.5 million, or 14.8%, from $17.2
million for the nine months ended September 30, 1997 to $19.7
million for the nine months ended September 30, 1998.
Compensation and employee benefits increased $1.5 million due
primarily to increased expenses associated with the Company's
employee stock ownership plan (ESOP) which increased $1.4
million, or 112.8%, from $1.2 million for the nine months ended
September 30, 1997 to $2.6 million for the nine months
ended September 30, 1998. Employee benefit expense associated
with the Company's ESOP is based on the average market value of
the Company's common stock, which increased approximately 73%
during the nine months ended September 30, 1998 compared to the
nine months ended September 30, 1997. In addition, the
Company recorded a $251,000 charge to earnings during the second
quarter of 1998 to provide for a liability to former employees
related to a change in benefits allocated under the ESOP.
Since the inception of the ESOP in 1993, terminated employees
who were participants were allocated ESOP shares for the year of
termination only if they were employed by the Company on the
last day of the year. Such participants should have been
allocated shares for the year of termination if they met certain
hours-of-service requirements during that year. Occupancy
expense increased $350,000 primarily as the result of additional
depreciation expense associated with improvements to the
Company's data processing equipment and loan origination
facilities. Other noninterest expense increased $341,000
primarily as the result of the inclusion of nine full months of
operating expense in 1998 associated with the
acquisition of L&B Financial, which the Company purchased on
February 28, 1997, expenses incurred in connection with the
expansion of the loan quality control function, and
management's decision to provide full-time security guards in
certain offices. Legal, examination and
12<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
other professional fees increased $190,000 primarily as the
result of expenses related to integrating the Texas acquisitions
incurred during the first half of 1998. Federal insurance
premiums increased $161,000 due to the inclusion of nine full
months of expense in 1998 associated with the acquisition of L&B
Financial. Advertising expense decreased $77,000 as the result
of a lower level of advertising activity at First Federal.
INCOME TAX EXPENSE
The Company provides for state and federal income tax expense
based upon earnings before income taxes. Under
the asset and liability method of accounting for income taxes,
the Company establishes 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. The effective tax rate prior to the non
deductible amortization of excess cost over fair value of net
assets acquired for the nine months ended September 30, 1998 was
39.6% compared to 34.8% for the like period in 1997.
FINANCIAL CONDITION
The Company's total assets increased $79.1 million, or 6.4%, to
$1.317 billion at September 30, 1998 from $1.238 billion at
December 31, 1997. Loans receivable increased $100.1 million, or
9.8%, to $1.025 billion at September 30, 1998 from $924.9
million at December 31, 1997. Investment securities increased
$51.9 million, or 40.0%, to $181.9 million at September 30, 1998
from $130.0 million at December 31, 1997. Mortgage-backed
securities decreased $61.2 million, or 71.6%, to $24.2 million
at September 30, 1998 from $85.5 million at December 31, 1997.
The Company continued to shift its asset mix to emphasize
lending and to take advantage of the most cost effective
investments in the current interest rate environment.
The asset growth was funded primarily by increases in borrowed
money and savings deposits of $54.8 million and $8.0 million,
respectively.
Stockholders' equity increased by $7.4 million, or 6.4%, to
$123.7 million at September 30, 1998 from $116.3 million at
December 31, 1997. The Company's ratio of stockholders'
equity to assets was 9.39% at September 30, 1998 and December
31, 1997. The Company's book value per share at September 30,
1998 was $13.09 compared to $12.52 at December 31, 1997.
Unearned ESOP shares of 634,544 and 730,508 were excluded in
calculating book value per share at September 30, 1998 and
December 31, 1997, respectively.
13<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
NONPERFORMING ASSETS
Summarized below are nonperforming assets at September 30, 1998
and December 31, 1997
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
(dollars in thousands)
<S> <C> <C>
Restructured loans $ 1,539 210
------- -----
Nonaccruing loans:
Residential real estate $ 1,902 1,826
Commercial real estate 121 1,214
Construction 1,945 2,294
Consumer 91 72
------- -----
Total nonaccruing loans 4,059 5,406
Applicable allowance for losses (25) (152)
------- -----
Nonaccruing loans, net 4,034 5,254
------- -----
Foreclosed real estate, net 3,172 4,256
------- -----
Nonperforming assets, net $ 8,746 9,720
======= =====
Nonperforming assets, net as a
percentage of total assets 0.66% 0.79%
======= =====
</TABLE>
Not included in restructured loans is a loan secured by
commercial real estate. Management determined that this loan
should not be considered a nonperforming asset since the
borrower has been current in meeting restructured terms since
the date of restructuring, the restructured loan provides for
principal amortization, and the loan has an interest rate and
other features that are at least equivalent to market terms.
The unpaid balance of this loan was approximately $3,041,000 and
$3,059,000 at September 30, 1998 and December 31, 1997,
respectively. At September 30, 1998, the Company had five
single-family construction, single-family permanent and consumer
loans totaling $124,000 that were more than 90 days past
maturity date with regard to principal repayment. Interest
payments on the loans were less than 90 days past due and the
loans were still accruing interest. Since the interest due on
these loans was less than 90 days past due, the loans are not
considered a nonperforming asset.
Total nonperforming assets decreased $1.0 million from $9.7
million at December 31, 1997 to $8.7 million at September 30,
1998 primarily as the result of a $1.1 million decrease in
nonaccruing commercial real estate loans and a $1.1 million
decrease in foreclosed construction loans. This activity was
partially offset by a $1.3 million increase in restructured
loans. The decrease in nonaccruing commercial real estate loans
was primarily due to the foreclosure of a $751,000 loan and the
payoff of a loan totaling $464,000 during the first nine months
of 1998. The decrease in foreclosed real estate was primarily
due to the sale of approximately $6.0 million in foreclosed real
estate during the nine-month period ending September 30, 1998
partially offset by foreclosures totaling $4.7 million during
the same period.
Loans are placed on nonaccrual status when either principal or
interest is more than 90 days past due or
14<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
at such time when management concludes that payment in full is
not likely, whichever is sooner. Any subsequent interest
payments received are recorded as interest income in the period
received.
Impaired loans, which are represented by loans on nonaccrual
status and loans where management believes it is probable that
they will be unable to collect principal and interest under the
contractual terms of the loans, were $6.2 million and $8.7
million at September 30, 1998 and December 31, 1997,
respectively. At September 30, 1998 $56,000 of impaired loans
had specific reserves of $25,000 and the remaining impaired
loans of $6.1 million had no specific reserves. At December 31,
1997 $2.9 million of impaired loans had specific reserves of
$696,000 and the remaining impaired loans of $5.8 million had no
specific reserves. The decrease in impaired loans was primarily
due to a $1.3 million decrease in nonaccrual loans during the
first nine months of 1998.
Activity in the allowance for loan losses is summarized as
follows:
<TABLE>
<CAPTION>
Nine months ended September 30,
1998 1997
---- ----
<S> <C> <C>
Balance at beginning of year $ 8,182,268 6,528,601
Allowance from purchase acquisitions - 1,155,764
Provision charged to expense (1,200,000) 1,158,000
Recoveries 7,602 250
Charge-offs (282,198) (372,123)
----------- -----------
Balance at end of period $ 6,707,672 8,470,492
=========== ===========
</TABLE>
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 capital regulations of the OTS require thrift institutions
to maintain tangible capital equal to 1.5% of total adjusted
assets, a minimum 3% leverage (core capital) ratio, and an 8%
risk-based capital ratio. The risk-based capital requirement is
calculated based on the credit risk presented by both
on-balance-sheet assets and off-balance-sheet commitments and
obligations. Assets are assigned a credit-risk weighting based
upon their relative risk ranging from 0% for assets backed by
the full faith and credit of the United States or that pose no
credit risk to the institution to 100% for assets such as
delinquent or repossessed assets. As of September 30, 1998,
both Jefferson Savings and First Federal met all OTS capital
requirements.
Jefferson Savings and First Federal are also subject to the
capital based framework for prompt corrective action. To be
categorized as well capitalized, an institution must maintain
minimum total risk-based, Tier I risk-based, and Tier I leverage
ratios as set forth in the table below. For purposes of this
regulation, Tier I capital has the same definition as core
capital. As of September 30, 1998, both Jefferson Savings and
First Federal were considered well capitalized.
15<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Following are the actual and required capital amounts and ratios
as of September 30, 1998:
<TABLE>
<CAPTION>
Prompt Corrective
action provisions -
Actual Requirements Well capitalized
----------------- ------------------- -----------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Tangible capital:(1)
Jefferson Savings $55,386,637 7.81% $10,636,431 1.50% NA
First Federal 42,330,832 7.24% 8,772,675 1.50% NA
Core capital:(1)
Jefferson Savings 55,386,637 7.81% 21,272,861 3.00% $35,454,768 5.00%
First Federal 42,330,832 7.24% 17,545,351 3.00% 29,242,251 5.00%
Risk-based capital:(2)
Jefferson Savings 57,957,072 14.53% 31,918,113 8.00% 39,897,641 10.00%
First Federal 46,109,820 12.55% 29,383,671 8.00% 36,729,589 10.00%
Tier I capital:(2)
Jefferson Savings 55,386,637 13.88% NA 23,938,585 6.00%
First Federal 42,330,832 11.02% NA 22,037,754 6.00%
(1) To adjusted total assets
(2) To risk-weighted assets
</TABLE>
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 4% 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 19.62%
and 19.54% at September 30, 1998 and December 31, 1997,
respectively. The Bank's liquidity ratios were 24.27% and
23.42% at September 30, 1998 and December 31, 1997,
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.
Cash flows used by investing activities totaled $76.8 million
during the first nine months of 1998. Cash
16<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
flows from these investing activities, which consisted
primarily of $360.0 million in principal repayments on loans and
mortgage-backed securities, $88.5 million in proceeds from
maturity of investment securities and $71.9 million in sales of
loans and mortgage-backed securities, and were used primarily to
fund the Company's investing activities of originating loans and
purchasing investment securities during the nine months ended
September 30, 1998 and to increase liquidity.
The Company anticipates that it will have sufficient funds
available to meet its current commitments. At September 30,
1998, the Company had commitments to originate loans of $40.1
million, to purchase residential adjustable-rate mortgages of
$6.0 million, and to sell fixed-rate loans of $17.7 million.
Certificates of deposit, which are scheduled to mature in one
year or less at September 30, 1998, totaled $534.4 million.
Management believes that a significant portion of such deposits
will remain with the Company. In addition, at September 30,
1998, the Association has an available line of credit with the
FHLB of Des Moines totaling $25.0 million and the Bank has an
available line of credit with the FHLB of Dallas totaling $16.0
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.
IMPACT OF NEW ACCOUNTING STANDARDS
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION.
In June 1997, the Financial Accounting Standards Board (FASB)
issued SFAS No. 131, "Disclosure about Segments of an Enterprise
and Related Information," which establishes standards for the
way that public enterprises report information about operating
segments in annual financial statements and requires that those
enterprises report selected information about operating segments
in interim reports issued to stockholders. SFAS No. 131 is
effective for financial statements for periods beginning after
December 15, 1997. Since SFAS No. 131 is a disclosure
requirement only there is no effect on the Company's financial
position or results of operations.
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.
In June 1995, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which
establishes standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and
for hedging activities. SFAS No. 133 requires an entity to
17
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at
fair value. SFAS No. 133 is effective for fiscal years
beginning after June 15, 1999. Earlier application of SFAS No.
133 is encouraged but should not be applied retroactively to
financial statements of prior periods. The Company is currently
evaluating the requirements and impact of SFAS No. 133.
YEAR 2000 COMPLIANCE
As the year 2000 approaches, an important business issue has
emerged regarding how existing application software programs and
operating systems can accommodate this date value. For many
years, software applications routinely conserved magnetic
storage space by using only two digits to record calendar years;
for example, the year 1999 is stored as "99". On January 1,
2000, the calendars in many software applications will change
from '99" to "00". Many of these software applications, in
their current form, will produce erroneous results or will fail
to run at all since their logic cannot deal with this
transition.
The Company's mainframe computer hardware and systems software
are Year 2000 compliant. The Company primarily utilizes
third-party vendor application software for all computer
applications. The third-party vendors for the Company's banking
applications have or are in the process of modifying, upgrading
or replacing their computer applications to insure Year 2000
compliance. The Company has completed a large portion of its
testing of these mission-critical applications using existing
employees and has encountered no significant problems thus far.
The Company has also instituted a Year 2000 compliance program
whereby the Company is reviewing the Year 2000 compliance issues
that may be faced by its other third-party vendors, significant
customers, and other operating equipment containing embedded
computer chips. The Company believes that it will substantially
complete such compliance program by the first quarter of 1999
without material disruption of its operations. In addition, the
Company has begun developing contingency plans to complement
these Year 2000 readiness efforts, including backup and offsite
processing of certain information and functions. Excluding the
costs of existing staff, the Company has incurred no material
expense in connection with these Year 2000 compliance efforts
and does not currently expect that the remaining cost of its
Year 2000 compliance program will be material to its financial
condition.
18<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Quantitative and Qualitative Disclosures
About Market Risk
The Registrant does not believe that its exposure to market risk
materially changed from the levels reported in its Annual
Report on Form 10-K. The Registrant's principal market risk
continues to consist of its exposure to changes in interest
rates. Since the end of the last fiscal year, declining
long-term interest rates have resulted in the prepayment or
conversion to fixed rates of certain adjustable-rate residential
mortgages. In order to maintain its rate sensitivity position,
the Registrant has sold the resulting fixed-rate loans on the
secondary market and invested the proceeds from these sales
and from prepayments in additional adjustable-rate mortgages or
in other rate-sensitive investment and mortgage backed
securities. The decline in interest rates has benefitted the
net portfolio value of its assets, which are measured, by the
present value of the expected cash flows from its assets,
liabilities and off balance sheet contracts. The Registrant
continues to monitor changes in the interest rate environment
and adjust its asset/liability mix as necessary.
19<PAGE>
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Not applicable.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
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
--------------------------------
(a) Exhibits:
Exhibit 27.1 Financial Data Schedule.
Exhibit 27.2 Restated Financial Data Schedule.
(b) Reports on Form 8-K:
None.
20<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 13, 1998 By: /s/ Paul J. Milano
-----------------------------
Paul J. Milano
Senior Vice President and
Chief Financial Officer
(Duly Authorized
Representative and
Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted
from consolidated financial statements and notes thereto to
Jefferson Savings Bancorp, Inc. at and for the nine months ended
September 30, 1998 and is qualified in its entirety by reference
to such financial statements.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,322,136
<INT-BEARING-DEPOSITS> 22,644,290
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 206,161,095
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,031,713,734
<ALLOWANCE> 6,707,672
<TOTAL-ASSETS> 1,317,195,044
<DEPOSITS> 1,052,840,693
<SHORT-TERM> 120,696,679
<LIABILITIES-OTHER> 20,004,841
<LONG-TERM> 0
0
0
<COMMON> 101,015
<OTHER-SE> 123,551,816
<TOTAL-LIABILITIES-AND-EQUITY> 1,317,195,044
<INTEREST-LOAN> 54,993,589
<INTEREST-INVEST> 11,000,015
<INTEREST-OTHER> 1,881,499
<INTEREST-TOTAL> 67,875,103
<INTEREST-DEPOSIT> 39,707,073
<INTEREST-EXPENSE> 42,595,224
<INTEREST-INCOME-NET> 25,279,879
<LOAN-LOSSES> (1,200,000)
<SECURITIES-GAINS> 50,296
<EXPENSE-OTHER> 19,690,557
<INCOME-PRETAX> 10,098,775
<INCOME-PRE-EXTRAORDINARY> 10,098,775
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,558,275
<EPS-PRIMARY> .59
<EPS-DILUTED> .56
<YIELD-ACTUAL> 2.82
<LOANS-NON> 4,059
<LOANS-PAST> 0
<LOANS-TROUBLED> 1,539
<LOANS-PROBLEM> 2,121,351
<ALLOWANCE-OPEN> 8,182,268
<CHARGE-OFFS> 282,198
<RECOVERIES> 7,602
<ALLOWANCE-CLOSE> 6,707,672
<ALLOWANCE-DOMESTIC> 3,418,878
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,249,959
</TABLE>
<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, 1997 and is qualified in its entirety by
reference to such financial statements. Dollar amounts (other
than per share data) are in thousands.
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 10,571,081
<INT-BEARING-DEPOSITS> 22,161,648
<FED-FUNDS-SOLD> 8,325,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 207,499,166
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 952,385,358
<ALLOWANCE> 8,470,492
<TOTAL-ASSETS> 1,257,752,654
<DEPOSITS> 1,069,651,787
<SHORT-TERM> 51,301,038
<LIABILITIES-OTHER> 23,283,843
<LONG-TERM> 0
0
0
<COMMON> 100,360 <F1>
<OTHER-SE> 113,415,626 <F1>
<TOTAL-LIABILITIES-AND-EQUITY> 1,257,752,654
<INTEREST-LOAN> 59,465,712
<INTEREST-INVEST> 10,989,969
<INTEREST-OTHER> 1,686,385
<INTEREST-TOTAL> 72,142,066
<INTEREST-DEPOSIT> 39,823,827
<INTEREST-EXPENSE> 43,690,939
<INTEREST-INCOME-NET> 28,451,127
<LOAN-LOSSES> 1,158,000
<SECURITIES-GAINS> 3,822
<EXPENSE-OTHER> 17,150,276
<INCOME-PRETAX> 12,405,190
<INCOME-PRE-EXTRAORDINARY> 7,651,190
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,651,190
<EPS-PRIMARY> .85 <F1>
<EPS-DILUTED> .82 <F1>
<YIELD-ACTUAL> 3.15
<LOANS-NON> 4,448,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 174,000
<LOANS-PROBLEM> 5,725,000
<ALLOWANCE-OPEN> 6,528,601
<CHARGE-OFFS> 372,123
<RECOVERIES> 250
<ALLOWANCE-CLOSE> 8,470,492
<ALLOWANCE-DOMESTIC> 6,994,457
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,476,035
<FN>
<F1> Restated for adoption of SFAS No. 128 and two-for-one
stock split.
</FN>
</TABLE>
