<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 March 31, 2000
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 #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 ID Number)
of incorporation or organization)
15435 CLAYTON ROAD, BALLWIN, MISSOURI 63011
- ------------------------------------- --------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (636)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 April 30, 2000
- ---------------------------- -------------------------------
Common Stock, Par Value $.01 9,964,162 shares
1
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<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
INDEX to Form 10-Q
PAGE
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
- Consolidated Balance Sheets 3
- Consolidated Statements of Income 4
- Consolidated Statement of Stockholders'
Equity and Comprehensive Income 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
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 20
PART II OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 2. Changes in Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of
Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
2
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARY
Consolidated Balance Sheets
March 31, 2000 and December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
Assets 2000 1999
------ ---- ----
<S> <C> <C>
Cash $ 13,007,874 12,141,714
Interest-bearing deposits 4,742,928 9,457,864
-------------- -------------
Cash and cash equivalents 17,750,802 21,599,578
Investment securities available for sale,
at fair value (amortized cost of $106,723,135
and $106,752,636 at March 31, 2000 and
December 31, 1999, respectively) 102,490,378 103,342,199
Mortgage-backed securities available for sale,
at fair value (amortized cost of $121,262,416
and $123,405,642 at March 31, 2000 and
December 31, 1999, respectively) 115,742,442 118,447,068
Loans receivable, net 1,276,089,911 1,238,926,455
Investment in real estate, net 1,710,708 1,521,668
Stock in Federal Home Loan Bank 26,286,200 24,254,100
Bank owned life insurance 25,498,254 25,178,920
Office properties and equipment, net 14,496,480 14,212,864
Deferred tax asset 4,271,000 3,718,000
Excess cost over fair value of net assets acquired 19,640,640 20,088,429
Accrued income and other assets 14,688,284 11,645,132
-------------- -------------
$1,618,665,099 1,582,934,413
============== =============
Liabilities and Stockholders' Equity
------------------------------------
Savings deposits $ 943,433,556 974,965,236
Borrowed money 531,081,032 468,369,843
Advance payments by borrowers for taxes and
insurance 4,864,113 3,377,641
Accrued expenses and other liabilities 11,395,109 10,140,344
-------------- -------------
Total liabilities 1,490,773,810 1,456,853,064
-------------- -------------
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 10,100,112 shares
at March 31, 2000 and December 31, 1999 101,001 101,001
Additional paid-in capital 65,071,222 64,958,775
Retained earnings, subject to certain restrictions 73,676,163 71,469,492
Accumulated other comprehensive income (loss) (5,851,731) (5,021,011)
Unamortized restricted stock awards (63,408) (65,908)
Unearned ESOP shares (3,427,891) (3,678,225)
Treasury stock, at cost: 136,478 shares and
142,286 shares at March 31, 2000 and December
31, 1999, respectively (1,614,067) (1,682,775)
-------------- -------------
Total stockholders' equity 127,891,289 126,081,349
-------------- -------------
$1,618,665,099 1,582,934,413
============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Income
Three months ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Interest and dividend income:
Loans receivable $25,202,022 21,114,513
Mortgage-backed securities 1,886,386 837,566
Investment securities 1,642,710 2,269,544
Interest-bearing deposits and federal funds sold 56,671 340,569
Stock in Federal Home Loan Bank 408,878 199,548
----------- -----------
Total interest and dividend income 29,196,667 24,761,740
----------- -----------
Interest expense:
Savings deposits 11,318,904 12,293,186
Borrowed money 6,957,318 3,010,559
----------- -----------
Total interest expense 18,276,222 15,303,745
----------- -----------
Net interest income 10,920,445 9,457,995
Provision for losses on loans 300,000 -
----------- -----------
Net interest income after
provision for losses on loans 10,620,445 9,457,995
----------- -----------
Noninterest income:
Servicing and other loan fees 394,020 162,907
Fees for other services to customers 427,677 245,625
Gain on sales of mortgage-backed securities
available for sale, net - 36,990
Loss on sales of investment securities available
for sale, net (14,688) -
Gain on sales of loans receivable, net 250,275 247,363
Real estate operations, net (45,128) (97,940)
Other 464,466 171,765
----------- -----------
Total noninterest income 1,476,622 766,710
----------- -----------
Noninterest expense:
General and administrative:
Compensation and employee benefits 3,874,208 3,083,888
Occupancy 1,052,475 774,019
Advertising 268,550 129,142
Federal deposit insurance premiums 51,997 161,176
Legal, examination, and other professional fees 450,636 435,517
Other 1,325,791 1,083,005
----------- -----------
Total general and administrative 7,023,657 5,666,747
Amortization of excess cost over fair value
of net assets acquired 447,789 449,435
----------- -----------
Total noninterest expense 7,471,446 6,116,182
----------- -----------
Income before income taxes 4,625,621 4,108,523
Income tax expense 1,754,000 1,680,000
----------- -----------
Net income $ 2,871,621 2,428,523
=========== ===========
Earnings per share, basic $ .30 .26
===== ===
Earnings per share, diluted $ .30 .25
===== ===
Cash dividends per common share $ .07 .07
===== ===
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
and Comprehensive Income
Three months ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Accumulated Unamortized
Common stock Additional other restricted
-------------- paid-in Retained comprehensive stock
Shares Dollars capital earnings income (loss) awards
------ --------- -------- -------- ------------- -------
<C> <S> <S> <S> <S> <S> <S>
Balance at December 31, 1999 10,100,112 $ 101,001 $ 64,958,775 $ 71,469,492 $(5,021,011) $ (65,908)
Comprehensive income:
Net income - - - 2,871,621 - -
Other comprehensive income,
net of reclassification
adjustment - - - - (830,720) -
Total comprehensive income
Dividends paid ($.07 per share) - - - (664,950) - -
Release of ESOP shares in lieu
of cash dividend on allocated
ESOP shares - - 7,957 - - -
Stock issued in dividend
reinvestment and stock
purchase plan - - (2,088) - - -
Amortization of restricted
stock awards - - 4,250 - - 2,500
Amortization of ESOP shares - - 122,818 - - -
Stock options exercised - - (20,490) - - -
---------- --------- ------------ ------------ ---------- ---------
Balance at March 31, 2000 10,100,112 $ 101,001 $ 65,071,222 $ 73,676,163 $(5,851,731) $ (63,408)
========== ========= ============ ============ =========== =========
<CAPTION>
Unearned Treasury stock Total
ESOP ------------------ stockholders'
shares Shares Dollars equity
------ --------- -------- ------
<S> <S> <S> <S> <S>
Balance at December 31, 1999 $ (3,678,225) (142,286) $ (1,682,775) $ 126,081,349
Comprehensive income:
Net income - - - 2,871,621
Other comprehensive income,
net of reclassification
adjustment - - - (830,720)
-----------
Total comprehensive income 2,040,901
Dividends paid ($.07 per share) - - - (664,950)
Release of ESOP shares in lieu
of cash dividend on allocated
ESOP shares 34,821 - - 42,778
Stock issued in dividend
reinvestment and stock
purchase plan - 2,808 33,218 31,130
Amortization of restricted
stock awards - - - 6,750
Amortization of ESOP shares 215,513 - - 338,331
Stock options exercised - 3,000 35,490 15,000
------------ -------- ------------ ------------
Balance at March 31, 2000 $ (3,427,891) (136,478) $ (1,614,067) $127,891,289
============ ======== ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
Three months ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,871,621 2,428,523
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,193,391 1,331,376
Provision for losses on loans 300,000 -
Net gain on sales of assets (198,060) (252,304)
Loans originated for sale (18,190,662) (19,432,514)
Sale of loans originated for sale 18,974,218 19,467,627
Stock dividend from Federal Home Loan Bank - (40,000)
Other, net (2,065,113) 1,300,695
------------- ------------
Net cash provided by operating activities 2,885,395 4,803,403
------------- ------------
Cash flows from investing activities:
Principal repayments on:
Loans receivable 128,658,758 143,531,944
Mortgage-backed securities 2,101,036 1,681,809
Proceeds from maturity of investment securities - 39,075,000
Proceeds from sale of:
Mortgage-backed securities available for sale - 4,676,186
Investment securities available for sale 2,010,313 -
Cash invested in:
Loans receivable - originated (156,481,256) (106,029,735)
Loans receivable - purchased (11,120,244) (99,009,679)
Mortgage-backed securities - (78,324,238)
Investment securities (1,992,600) (4,421,713)
Stock in Federal Home Loan Bank (2,032,100) (6,109,500)
Proceeds from sale of real estate 897,647 429,647
Purchase of office properties and equipment (752,464) (525,839)
Other, net (38,145) 12,670
------------- ------------
Net cash used in investing activities (38,749,055) (105,013,448)
------------- ------------
Cash flows from financing activities:
Decrease in savings deposits, net (31,563,957) (11,981,378)
Increase in borrowed money, net 62,711,188 133,236,076
Increase in advance payments by borrowers for taxes
and insurance 1,486,472 2,493,431
Dividends paid (664,950) -
Other, net 46,131 (201,356)
------------- ------------
Net cash provided by financing activities 32,014,884 123,546,773
------------- ------------
Increase (decrease) in cash and cash equivalents (3,848,776) 23,336,728
Cash and cash equivalents at beginning of period 21,599,578 18,873,687
------------- ------------
Cash and cash equivalents at end of period $ 17,750,802 42,210,415
============= ============
Supplemental disclosures of cash flow information:
Interest paid $ 18,355,502 15,319,328
Income taxes paid 475,531 139,435
Noncash investing activities:
Additions to real estate acquired in settlement
of loans or through foreclosure 1,281,136 33,471
Loans originated to finance the sale of real estate - 77,000
Noncash financing activity - interest credited to
savings deposits 8,754,323 9,187,625
============= ============
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2000
(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 comprehensive income, 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 months ended March
31, 2000 and 1999, respectively.
Operating results for the three months ended March 31,
2000 are not necessarily indicative of the results that may
be expected for the year ending December 31, 2000.
(2) PRINCIPLES OF CONSOLIDATION
The accompanying unaudited consolidated financial
statements include the accounts of Jefferson Savings
Bancorp, Inc. ("the Company") and its wholly owned
subsidiary, Jefferson Heritage Bank ("Jefferson Heritage"
or "the Bank"). Jefferson Heritage's wholly owned
subsidiaries are Jefferson Heritage Mortgage Company,
Jefferson Financial, Inc., Jefferson Financial Corporation
and First Service Corporation, Inc. All significant
intercompany items have been eliminated.
(3) EARNINGS PER SHARE
The following table reconciles the numerators and
denominators for basic and diluted earnings per share for
the three-month periods ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------
2000 1999
--------- ---------
<S> <C> <C>
Numerator:
Net income (basic and diluted earnings per share) $ 2,871,621 2,425,523
=========== =========
Denominator:
Average shares outstanding (basic earnings per
share) 9,515,704 9,466,949
Effect of dilutive stock options 161,348 238,391
----------- ---------
Average shares outstanding after assumed
conversions (diluted earnings per share) 9,677,052 9,705,340
=========== =========
</TABLE>
Only employee stock ownership plan shares that have been
allocated or committed to be released are considered
outstanding for earnings per share calculations.
7
<PAGE>
<PAGE>
(4) COMPREHENSIVE INCOME
Comprehensive income for the three-month periods ended
March 31, 2000 and 1999 is summarized as follows:
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------
2000 1999
--------- ---------
<S> <C> <C>
Net income $ 2,871,621 2,428,523
Other comprehensive income (loss):
Realized and unrealized holding gain (loss)
arising during the period, net of tax (840,414) (505,522)
Less: reclassification adjustment for realized
gain (loss) included in net income, net of tax (9,694) 24,413
----------- ---------
Total other comprehensive income (loss) (830,720) (529,935)
----------- ---------
Total comprehensive income $ 2,040,901 1,898,588
=========== =========
</TABLE>
8
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
The following discussion reviews the financial condition and the
results of operations of the Company as of and for the three
months ended March 31, 2000.
FORWARD-LOOKING STATEMENTS
When used in this discussion and elsewhere in this
Quarterly Report on Form 10-Q, the words or phrases "will likely
result," "are expected to," "will continue," "is anticipated,"
"estimate," "project" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company
cautions readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date
made, and advises readers that various factors, including
regional and national economic conditions, substantial changes
in levels of market interest rates, credit and other risks of
lending and investment activities and competitive and regulatory
factors could affect the Company's financial performance and
could cause the Company's actual results for future periods
to differ materially from those anticipated or projected. The
Company does not undertake and specifically disclaims any
obligation to update any forward-looking statements to reflect
occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
FINANCIAL CONDITION
The Company's primary strategy is to continue building its
core retail banking business, which is the origination of loans
funded by savings deposits and borrowings from the Federal Home
Loan Bank ("FHLB"). Historically, the Company's primary loan
product has been adjustable-rate, single-family, residential
loans. The Company also originates and sells single-family,
fixed-rate, residential loans through the Bank's subsidiary,
Jefferson Heritage Mortgage Company. The Company continues to
emphasize construction lending and has recently placed more
emphasis on commercial real estate lending.
The Company's total assets increased $35.7 million, or
2.3%, to $1.62 billion at March 31, 2000 from $1.58 billion at
December 31, 1999. Loans receivable increased $37.2 million, or
3.0%, to $1.28 billion at March 31, 2000 from $1.24 billion at
December 31, 1999. Loan origination activity in the first
quarter of 2000 totaled $174.7 million compared to $125.5
million for the first quarter of 1999. Commercial real estate
and construction loan originations totaled $128 million, or
approximately 73% of total origination activity during the
quarter ended March 31, 2000 compared to $89 million, or
approximately 71% during the quarter ended March 31, 1999. Loan
purchases totaled $11.1 million for the first quarter of 2000
compared to $99.0 million for 1999. Principal repayments
totaled $128.7 million for the first quarter of 2000 compared to
$143.5 million for 1999.
The Company supplements asset growth in times of lower loan
demand with the purchase of investment and mortgage-backed
securities. It chooses between these two types of investments
depending on the instruments' interest rate risk characteristics
and the yields available in the market. Mortgage-backed
securities decreased $2.7 million, or 2.3%, to $115.7 million at
March 31, 2000 from $118.4 million at December 31, 1999.
Investment securities decreased $852,000, or 0.8%, to $102.5
million at March 31, 2000 from $103.3 million at December 31,
1999.
9
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
The Company has substantial borrowing capacity with the
FHLB and generally chooses between savings deposits and
borrowings, depending on their relative costs, when funding its
investing activities. Beginning in 1999 and continuing during
2000, the Company chose to fund a large portion of its investing
activities with borrowings from the FHLB since such borrowings
were generally less expensive than the cost of attracting
savings deposits with similar maturities. As a result of this
strategy, savings deposits decreased $31.5 million, or 3.2%,
from $975.0 million at December 31, 1999 to $943.4 million at
March 31, 2000. The decrease was primarily in certificates of
deposit. Borrowed money increased $62.7 million, or 13.4%, from
$468.4 million at December 31, 1999 to $531.1 million at March
31, 2000.
Stockholders' equity increased $1.8 million, or 1.4%, to
$127.9 million at March 31, 2000 from $126.1 million at December
31, 1999. Contributing to the growth in stockholders' equity
was net income of $2.9 million, partially offset by a $831,000
increase, net of tax, in unrealized losses on available-for-sale
investments and the payment of $665,000 in dividends on the
Company's common stock. Consistent with management's plan to
better leverage stockholders' equity, the ratio of stockholders'
equity to assets declined to 7.90% at March 31, 2000 compared to
7.97% at December 31, 1999 as the result of asset growth. The
Company's book value per share at March 31, 2000 was $13.41
compared to $13.28 at December 31, 1999. Unearned ESOP shares
of 425,358 and 458,575 were excluded in calculating book value
per share at March 31, 2000 and December 31, 1999, respectively.
There were 9,963,634 common shares outstanding at March 31,
2000.
AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND COSTS
The following table sets forth certain information relating
to the Company's average interest-earning assets and
interest-bearing liabilities including the average yield on such
assets and the average cost of such liabilities for the periods
indicated. Such yields and costs are derived by dividing
annualized income or expense by the three-month average balances
of assets or liabilities for the periods indicated. During the
periods indicated, nonaccrual loans are included in loans
receivable.
10
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
<TABLE>
<CAPTION>
Three month period ended March 31,
-------------------------------------------------------------------
2000 1999
------------------------- -------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- -----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable. . . . . . . . . . . $ 1,256,256 $25,202 8.02% $1,112,079 $ 21,114 7.59%
Mortgage-backed securities. . . . . . 122,525 1,886 6.16 55,712 838 6.02
Investment securities . . . . . . . . 106,740 1,643 6.16 143,176 2,270 6.34
Other interest-earning assets . . . . 28,825 466 6.47 44,339 540 4.87
----------- ------- ---------- --------
Total interest-earning assets . 1,514,346 29,197 7.71 1,355,306 24,762 7.31
------- --------
Noninterest-earning assets . . . . . . . 76,236 53,992
----------- ----------
Total assets. . . . . . . . . . $ 1,590,582 $1,409,298
=========== ==========
Interest-bearing liabilities:
Savings deposits:
Passbook and statement savings,
NOW and money market accounts . $ 218,335 $ 1,546 2.83 $ 240,544 $ 1,800 2.99
Certificates of deposit. . . . . . 735,714 9,773 5.31 785,667 10,493 5.34
----------- ------- ---------- -------
Total savings deposits. . . . . 954,049 11,319 4.75 1,026,211 12,293 4.79
Borrowed money. . . . . . . . . . . . 494,332 6,957 5.63 241,518 3,011 4.99
----------- ------ ---------- -------
Total interest-bearing. . . . .
liabilities. . . . . . . . . . 1,448,381 18,276 5.05 1,267,729 15,304 4.83
------ -------
Noninterest-bearing liabilities. . . . . 16,063 16,488
----------- ----------
Total liabilities. . . . . . . 1,464,444 1,284,217
Stockholders' equity . . . . . . . . . . 126,138 125,081
----------- ----------
Total liabilities and
stockholders' equity. . . . $ 1,590,582 $ 1,409,298
=========== ===========
Net interest income. . . . . . . . . . . $10,921 $ 9,458
======= =======
Interest rate spread . . . . . . . . . . 2.66% 2.48%
===== =====
Net interest margin. . . . . . . . . . . 2.88% 2.79%
===== =====
Ratio of average interest-earning
assets to average interest-bearing
liabilities . . . . . . . . . . . . . 104.55% 106.91%
======= =======
</TABLE>
11
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
The following table allocates the period-to-period changes in
the Company's various categories of interest income and expense
between changes due to changes in volume (calculated by
multiplying the change in average volumes of the related
interest-earning asset or interest-bearing liability category by
the prior year's rate) and changes due to changes in rate
(change in rate multiplied by the prior year's volume). Changes
due to changes in rate/volume (changes in rate multiplied by
changes in volume) have been allocated proportionately between
changes in volume and changes in rate.
<TABLE>
<CAPTION>
Three-month periods ended
March 31, 2000 vs. 1999
--------------------------
Increase (Decrease) Due to
--------------------------
Volume Rate Total
------ ---- -----
(In thousands)
<S> <C> <C> <C>
Interest and dividend income:
Loans receivable .. . . . . . . . $ 2,845 $ 1,272 $ 4,087
Mortgage-backed securities. . . . 1,030 18 1,048
Investment securities . . . . . . (565) (62) (627)
Other interest-earning assets . . (99) 25 (74)
------- ------- -------
Total interest and
dividend income . . . 3,211 1,223 4,434
------- ------- -------
Interest expense:
Savings deposits:
Passbook and statement
savings, NOW, and money
market accounts. . . . . . . (161) (93) (254)
Certificates of deposit . . . (660) (60) (720)
------- ------- -------
Total savings deposits . (821) (153) (974)
Borrowed money .. . . . . . . . . 3,515 431 3,946
------- ------- -------
Total interest expense . 2,694 278 2,972
------- ------- -------
Change in net interest
income . . . . . . . . $ 517 $ 945 $ 1,462
======= ======= =======
</TABLE>
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000
NET INCOME. Net income for the first quarter of 2000
increased $443,000, or 18.2%, to $2.9 million compared to $2.4
million for the first quarter of 1999. Basic and diluted
earnings per share each increased to $0.30 for the first quarter
of 2000 compared to $0.26 and $0.25, respectively for the
comparable period a year ago. Annualized return on average
equity and annualized return on average assets for the first
quarter of 2000 were 9.11% and 0.72%, respectively compared to
7.77% and 0.69%, respectively for the first quarter
of 1999.
NET INTEREST INCOME. Net interest income for the first
quarter of 2000 increased $1.5 million, or 15.5%, to $10.9
million compared to $9.5 million for the first quarter of 1999.
The increase was the result of an increase in the Company's
interest rate spread from 2.48% for the quarter ended March 31,
1999 to 2.66% for the quarter ended March 31, 2000, combined
with a 12% increase in the average balance of interest-earning
assets. The increase in interest rate spread was the result of
a 40 basis point increase in the average yield on
interest-earning assets, partially offset by a 22 basis point
increase in the average cost of interest-bearing liabilities.
The increase in the average balance of interest-earning assets
was primarily due to growth in loans receivable.
12
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
INTEREST AND DIVIDEND INCOME. Total interest and dividend
income increased $4.4 million, or 17.9%, from $24.8 million for
the first quarter of 1999 to $29.2 million for the first quarter
of 2000. The increase resulted from an increase in the average
balance of interest-earning assets from $1.36 billion for the
first quarter of 1999 to $1.51 billion for the first quarter of
2000 combined with an increase in the average yield
on interest-earning assets from 7.31% to 7.71% during the same
periods.
Interest income on loans receivable increased $4.1 million,
or 19.4%, as the result of a $144.2 million increase in the
average balance of loans receivable between the comparable
periods and an increase in the average yield from 7.59% for the
first quarter of 1999 to 8.02% for the first quarter of 2000.
Loan originations grew 39.2%, to approximately $175 million for
the first quarter of 2000 compared to approximately $125 million
for the comparable period in 1999. Commercial real estate and
construction lending represented approximately 73% of total
origination activity during the first quarter of 2000 compared
to approximately 71% during the 1999 quarter. Loan repayments
totaled approximately $129 million for the first quarter of 2000
compared to approximately $144 million for the first quarter of
1999. Loan purchases decreased to $11 million for the first
quarter of 2000 compared to $99 million for the first quarter
of 1999.
Combined interest income on all other interest-earning
assets increased $347,000, or 9.5%, as the result of a $14.9
million increase in the combined average balance and an increase
in the average yield from 6.00% for the first quarter of 1999 to
6.19% % for the first quarter of 2000.
INTEREST EXPENSE. Interest expense increased $3.0 million,
or 19.4%, from $15.3 million for the first quarter of 1999 to
$18.3 million for the first quarter of 2000 due to an increase
in interest expense on borrowed money partially offset by a
decline in interest expense on savings deposits. Interest
expense on borrowed money increased $3.9 million as a result of
a $252.8 million increase in the average balance and an increase
in the average cost from 4.99% for the first quarter on 1999 to
5.63% for the first quarter of 2000. The Company used borrowed
money to fund asset growth and offset the decline in savings
deposits. Interest expense on savings deposits decreased
$974,000, or 7.9%, as a result of a $72.2 million decrease in
the average balance combined with a decrease in the average cost
from 4.79% for the first quarter on 1999 to 4.75% for the first
quarter of 2000.
PROVISION FOR LOSSES ON LOANS. The Bank recorded a
$300,000 provision for losses on loans during the three months
ended March 31, 2000 compared to no provision during the three
months ended March 31, 1999. The allowance for losses on loans
is maintained at a level considered adequate to absorb probable
loan losses determined on the basis of management's continuing
review and evaluation of the loan portfolio and its judgement as
to the impact of economic conditions on the portfolio. The
evaluation by management includes consideration of past loan
loss experiences and trends, changes in the composition of the
loan portfolio, the current volume and condition of loans
outstanding and the probability of collecting all amounts
due. At March 31, 2000, the allowance for losses on loans was
$7.0 million, which represented .55% of net loans receivable
compared to $6.9 million, or .56% of net loans receivable at
December 31, 1999. Net loan charge-offs increased to $229,000
for the first quarter of 2000 compared to $4,000 for the first
quarter of 1999. The increase in net loan charge-offs was due
primarily to a $199,000 charge-off on eight single-family
residential properties acquired through foreclosure during the
first quarter of 2000.
At March 31, 2000, the ratio of nonaccruing loans to net
loans receivable was .62% compared to .60% at December 31, 1999.
The increase in the ratio was due to a $408,000 increase in
nonaccruing loans partially offset by a $35.7 million, or 2.3%,
increase in net loans receivable. The increase in
13
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
nonaccruing loans was primarily the result of a $960,000
increase in nonaccruing residential real estate loans partially
offset by a $709,000 decrease in nonaccruing construction loans.
NONINTEREST INCOME. Total noninterest income increased
$710,000, or 92.6%, from $767,000 for the quarter ended March
31, 1999 to $1.5 million for the quarter ended March 31, 2000.
The increase was primarily the result of increases in income
from bank owned life insurance ("BOLI"), servicing and other
loan fees, and fees for other services to customers. Income
from bank owned life insurance, which is included in other
noninterest income, increased $315,000 due to the $25 million
BOLI purchase during November 1999. Servicing and other loan
fees increased $231,000, or 141.9%, due primarily to the
increase in loan activities and increased construction lending
in particular. Fees for other services to customers increased
$182,000 due to increases in ATM fees, NOW account service
charges and fees from the sale of brokerage products through one
of the Bank's subsidiaries.
NONINTEREST EXPENSE. Noninterest expense increased $1.4
million, or 22.2%, from $6.1 million for the quarter ended March
31, 1999 to $7.5 million for the quarter ended March 31, 2000.
The increase was primarily the result of increases in
compensation and employee benefits, occupancy expense, other
noninterest expense and advertising, partially offset by a
decrease in federal insurance premiums.
Compensation and employee benefits increased $790,000 to $3.9
million for the first quarter of 2000. The increase in
compensation and employee benefits was the result of additional
personnel hired to implement the Bank's expanded retail banking
products and services, expansion into new market areas by the
Bank's subsidiary mortgage company, and normal salary increases.
These increases were partially offset by an increase in the
amount of compensation expense subject to deferral under
Statement of Financial Accounting Standards No. 91 and a
reduction in ESOP expense. ESOP expense is based on the average
market value of the Company's stock, which decreased
approximately 18.3% between the respective periods.
Occupancy expense increased $278,000, to $1.1 million, due
primarily to increases in depreciation expense as a result of
additional equipment and software purchases and an increase in
leasehold expense associated with the mortgage company's
expansion into new market areas. Other noninterest expense
increased $243,000, to $1.3 million, due primarily due to
increases in expenses associated with ATM's, which the
Bank expanded significantly during the second half of 1999, and
utility and office supply expenses associated with the new
mortgage company offices. Advertising expense increased
$139,000, to $269,000, due to an increased level of advertising
for the Bank's new products and services. Federal insurance
premiums decreased $109,000, to $52,000, due to a decrease in
the balance of savings deposits and a reduction in the FICO rate
from 0.0580% to 0.0212%. These industry-wide assessments are
used to help pay interest on certain obligations issued by the
Financing Corporation ("FICO"), a federal agency formed
to finance takeovers of insolvent thrifts. In 1996, Congress
passed legislation assessing SAIF insured deposits for FICO
payments at a higher rate than deposits insured by the BIF.
This legislation expired on December 31, 1999 resulting in a
reduction of SAIF assessments.
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
for the three months ended March 31, 2000 was 37.9% compared to
40.1% for the like period in 1999. The effective tax rates for
2000 and 1999 differ from the statutory tax rate of 35.0%
primarily due to the nondeductibility of the amortization of
excess cost over fair values of net assets acquired and the
excess
14
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
of market value over cost of ESOP shares amortized.
NONPERFORMING ASSETS
Summarized below are nonperforming assets at March 31, 2000
and December 31, 1999:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
(dollars in thousands)
<S> <C> <C>
Restructured loans $ 1,138 1,022
------- -----
Nonaccruing loans:
Residential real estate $ 4,268 3,308
Commercial real estate 2,633 2,506
Construction 631 1,340
Commercial 254 216
Consumer 67 75
------- -----
Total nonaccruing loans 7,853 7,445
Applicable allowance for loan losses (890) (903)
------- -----
Nonaccruing loans, net 6,963 6,542
------- -----
Foreclosed real estate, net 1,711 1,522
------- -----
Nonperforming assets, net $ 9,812 9,086
======= =====
Nonperforming assets, net as a
percentage of total assets 0.61% 0.57%
==== ====
</TABLE>
Total nonperforming assets increased $726,000 from $9.1
million at December 31, 1999 to $9.8 million at March 31, 2000
primarily as the result of a $960,000 increase in nonaccruing
residential real estate loans and a $970,000 increase in
foreclosed construction loans. This was partially offset by a
$709,000 decrease in nonaccruing construction loans and a
$749,000 decrease in foreclosed residential real estate loans.
The increase in nonaccruing residential loans was due to the net
addition of eleven single-family permanent loans classified as
nonaccrual during the first three months of 2000. The decrease
in nonaccruing construction loans was due primarily to the
payoff of four construction loans and the foreclosure of nine
construction loans classified as nonaccrual during the first
three months of 2000. The increase in foreclosed real estate
was primarily due to fourteen foreclosures for $1.3 million
during the three-month period ended March 31, 2000 partially
offset by the sale of approximately $884,000 in foreclosed real
estate during the same period.
At March 31, 2000, the Company had eight loans totaling
$654,000 that were more than 90 days past the maturity date
stated in the note with regard to principal repayment but were
current as to interest payments. Since the Company has
continued collecting interest payments on these loans, they are
still accruing interest. Loans are generally placed on
nonaccrual status when either principal or interest is more than
90 days past due or 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.
<PAGE>
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
15
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
contractual terms of the loans, were $7.9 million and $7.4
million at March 31, 2000 and December 31, 1999, respectively.
At March 31, 2000, $2.4 million of impaired loans had specific
reserves of $890,000 and the remaining impaired loans of
$5.4 million had no specific reserves. At December 31, 1999,
$3.8 million of impaired loans had specific reserves of $1.0
million and the remaining impaired loans of $4.5 million had no
specific reserves. The increase in impaired loans was primarily
due to a $408,000 increase in nonaccrual loans during the first
three months of 2000.
Activity in the allowance for loan losses is summarized as
follows:
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
---- ----
<S> <C> <C>
Balance at beginning of period $ 6,937,900 6,659,294
Provision charged to expense 300,000 -
Recoveries - 244
Charge-offs (228,527) (4,332)
----------- ---------
Balance at end of period $ 7,009,373 6,655,206
=========== =========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no business other than that of
the Jefferson Heritage. The Company is dependent on future
earnings, dividends from Jefferson Heritage, or borrowings for
sources of funds. Jefferson Heritage is 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 March 31, 2000,
Jefferson Heritage met all OTS capital requirements.
Jefferson Heritage is 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 March
31, 2000, Jefferson Heritage was considered well capitalized.
16
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
Following are the actual and required capital amounts and
ratios of Jefferson Heritage as of March 31, 2000:
<TABLE>
<CAPTION>
Prompt Corrective
action requirements -
Actual Requirements well capitalized
----------------- ------------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Tangible capital: (1) $ 113,368,450 7.05% $ 24,127,986 1.50% NA
Core capital: (1) 113,368,450 7.05% 48,255,973 3.00% $ 80,426,621 5.00%
Risk-based capital: (2) 119,362,283 11.17% 85,512,617 8.00% 106,890,771 10.00%
Tier I capital: (2) 113,368,450 10.61% NA 64,134,463 6.00%
<FN>
(1) To adjusted total assets
(2) To risk-weighted assets
</FN>
</TABLE>
Jefferson Heritage is 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. Jefferson Heritage
has consistently maintained liquidity in excess of required
amounts. Jefferson Heritage's liquidity ratios were 18.51% and
19.42% at March 31, 2000 and December 31, 1999, 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, Jefferson Heritage has
substantial borrowing capacity with the Federal Home Loan Bank
and the ability to borrow against its investment portfolio.
The principal uses of funds by the Company include the
origination and purchase of loans secured by real estate and the
purchase of investment securities and mortgage-backed ecurities.
Cash flows used by investing activities totaled $38.7
million during the first three months of 2000. Cash flows from
these investing activities, which consisted primarily of $130.8
million in principal repayments on loans and mortgage-backed
securities, and $2.0 million in proceeds from the sale of
investment securities, and were used primarily to fund the
Company's investing activities of originating and purchasing
loans, purchasing investment securities and stock in the Federal
Home Loan Bank of Des Moines during the three months ended March
31, 2000.
The Company anticipates that it will have sufficient funds
available to meet its current commitments. At March 31, 2000,
the Company had commitments to originate loans totaling $35.7
million, to purchase residential mortgages of $1.5 million and
to sell loans of $17.6 million. Certificates of deposit which
are scheduled to mature in one year or less at March 31, 2000
totaled $577.1 million. Management believes that a significant
portion of such deposits will remain with the Company and that
it has sufficient borrowing capacity to offset any outflow.
17
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
IMPACT OF INFLATION AND CHANGING PRICES
The consolidated financial statements and notes thereto
presented herein have been prepared in accordance with generally
accepted accounting principles, which generally require the
measurement of financial position and operating results in terms
of historical dollars without considering the changes in the
relative purchasing power of money over time due to inflation.
The impact of inflation is reflected in the increased cost of
the Company's operations.
Unlike most industrial companies, nearly all of the
Company's assets and liabilities are monetary in nature. As a
result, interest rates have a greater impact on the Company's
performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction nor
to the same extent as the prices of goods and services.
IMPACT OF NEW ACCOUNTING STANDARDS
Accounting for Derivative Instruments and Hedging
Activities. In June 1998, 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 recognize all derivatives as either assets or
liabilities in the statement of financial position and measure
those instruments at fair value. In June 1999, the FASB issued
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities Deferral of the Effective Date of FASB Statement
No. 33, an Amendment of FASB Statement No. 133", which defers
the effective date of SFAS 133 from fiscal years beginning after
June 15, 1999 to fiscal years beginning after June 15, 2000.
Earlier application of SFAS No. 133, as amended, 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, as amended.
FINANCIAL MODERNIZATION LEGISLATION
On November 12, 1999, President Clinton signed legislation
which could have a far-reaching impact on the financial services
industry. The Gramm-Leach-Bliley ("G-L-B") Act authorizes
affiliations between banking, securities and insurance firms and
authorizes bank holding companies and national banks to engage
in a variety of new financial activities. Among the new
activities that will be permitted to bank holding companies and
national bank subsidiaries are securities and insurance
brokerage, securities underwriting, insurance underwriting and
merchant banking. The Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), in consultation with the
Secretary of the Treasury, may approve additional financial
activities. National bank subsidiaries will be permitted to
engage in similar financial activities but only on an agency
basis unless they are one of the 50 largest banks in the
country. National bank subsidiaries will be prohibited from
insurance underwriting, real estate development and, for at
least five years, merchant banking. The G-L-B Act, however,
prohibits future acquisitions of existing unitary savings
and loan holding companies, like the Company, by firms which are
engaged in commercial activities and limits the permissible
activities of unitary holding companies formed after May 4,
1999.
The G-L-B Act imposes new requirements on financial
institutions with respect to customer privacy. The G-L-B Act
generally prohibits disclosure of customer information to
non-affiliated third parties unless the customer has been given
the opportunity to object and has not objected to such
disclosure. Financial institutions are further required to
disclose their privacy policies to customers
18
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Management's Discussions and Analysis of Financial
Condition and Results of Operations
annually. Financial institutions, however, will be required to
comply with state law if it is more protective of customer
privacy than the G-L-B Act. The G-L-B Act directs the federal
banking agencies, the National Credit Union Administration, the
Secretary of the Treasury, the Securities and Exchange
Commission and the Federal Trade Commission, after consultation
with the National Association of Insurance Commissioners, to
promulgate implementing regulations within six month of
enactment. The privacy provisions will become effective six
months thereafter.
The G-L-B Act contains significant revisions to the
Federal Home Loan Bank System. The G-L-B Act imposes new
capital requirements on the Federal Home Loan Banks and
authorizes them to issue two classes of stock with differing
dividend rates and redemption requirements. The G-L-B Act
deletes the current requirement that the Federal Home Loan Banks
annually contribute $300 million to pay interest on certain
government obligations in favor of a 20% of net earnings
formula. The G-L-B Act expands the permissible uses of Federal
Home Loan Bank advances by community financial institutions
(under $500 million in assets) to include funding loans to small
businesses, small farms and small agri-businesses. The G-L-B
Act makes membership in the Federal Home Loan Bank voluntary for
federal savings associations.
The G-L-B Act contains a variety of other provisions
including a prohibition against ATM surcharges unless the
customer has first been provided notice of the imposition and
amount of the fee. The G-L-B Act reduces the frequency of
Community Reinvestment Act examinations for smaller institutions
and imposes certain reporting requirements on depository
institutions that make payments to non-governmental entities in
connection with the Community Reinvestment Act. The G-L-B Act
eliminates the SAIF special reserve and authorizes a federal
savings association that converts to a national or state bank
charter to continue to use the term "federal" in its name and to
retain any interstate branches.
The Company is unable to predict the impact of the G-L-B
Act on its operations at this time. Although the G-L-B Act
reduces the range of companies with which the Company may
affiliate, it may facilitate affiliations with companies in the
financial services industry.
19
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Quantitative and Qualitative Disclosures
About Market Risk
The Company's principal market risk continues to consist of
its exposure to changes in interest rates. The primary
component of the Company's net income is derived from the spread
between interest-earning asset yields and the cost of
interest-bearing liabilities. In a changing interest rate
environment this spread can widen or narrow depending
on the relative repricing and maturities of interest-earning
assets and interest-bearing liabilities. A principal strategy
of the Company has been to achieve acceptable net interest
margins while managing the sensitivity of its earnings to
interest rate fluctuations by matching more closely the cash
flows and effective maturities or repricings of its
interest-sensitive assets and liabilities.
The Company's interest rate sensitivity is monitored by
management through the use of a model, which internally
generates estimates of the change in the Company's net portfolio
value ("NPV") over a range of interest rate scenarios.
NPV is the present value of expected cash flows from assets,
liabilities and off balance sheet contracts. The NPV ratio,
under any interest rate scenario, is defined as the NPV in that
scenario divided by the market value of assets in the same
scenario. The OTS also produces a similar analysis using its
own model based upon data submitted on the quarterly
Thrift Financial Reports filed by the Bank. The results of the
OTS model may vary from the Company's internal model
due to differences in assumptions utilized, including loan
prepayment rates, reinvestment rates and deposits decay rates.
The following table sets forth the Company's NPV under the
internal model as of March 31, 2000:
<TABLE>
<CAPTION>
NPV as % of
Net portfolio value portfolio value of assets
------------------------- -------------------------
Change in interest rates Dollar Percent NPV Change (in
in basis points (rate shock) Amount change change ratio basis points)
- ---------------------------- ------ ------ ------- ----- -------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
+ 300 . . . . . $ 62,779 $(50,890) (44.8%) 4.12% (300)
+ 200 . . . . . 82,403 (31,266) (27.5%) 5.31% (181)
+ 100 . . . . . 98,820 (14,849) (13.1%) 6.27% (84)
Static . . . . . 113,669 -- -- 7.12% --
- 100 . . . . . 123,117 9,448 8.3% 7.63% 51
- 200 . . . . . 120,630 6,961 6.1% 7.43% 31
- 300 . . . . . 109,248 (4,421) (3.9%) 6.71% (41)
</TABLE>
Certain shortcomings are inherent in the methodology used
in the above interest rate risk measurements. Modeling changes
in NPV require the making of certain assumptions, which may or
may not reflect the manner in which actual yields and costs
respond to changes in market interest rates. In this regard,
the NPV model presented assumes that the composition of the
Company's interest sensitive assets and liabilities existing at
the beginning of a period remains constant over the period being
measured and also assumes that a particular change in interest
rates is reflected uniformly across the yield curve regardless
of the duration to maturity or repricing of specific assets and
liabilities. Accordingly, although the NPV measurements provide
an indication of the Company's interest rate risk exposure at a
particular point in time, such measurements are not intended to
and do not provide a precise forecast of the effect of changes
in market interest rates on the Company's NPV and will differ
from actual results.
20
<PAGE>
<PAGE>
JEFFERSON SAVINGS BANCORP, INC.
AND SUBSIDIARIES
Quantitative and Qualitative Disclosures
About Market Risk
Income simulation analysis captures the potential and
probability of the maturity and repricing of assets and
liabilities. Moreover, income simulation analysis measures the
relative sensitivities of these balance sheet items and
projects their behavior over an extended period of time. Also,
income simulation analysis permits management to assess
the probable effects on balance sheet items of interest rate
changes and management strategies that address such changes.
For these reasons, the Company relies primarily upon income
simulation analysis in measuring and managing exposure
to interest rate risk.
21
<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
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits. The following exhibits are being filed
with this Quarterly Report on Form 10-Q:
No. Description
--- -----------
27 Financial Data Schedule (EDGAR only)
(b) Reports on Form 8-K. The Registrant did not file
any current reports on Form 8-K during the quarter
ended March 31, 2000.
22
<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: May 12, 2000 /s/ Paul J. Milano
----------------------------
Paul J. Milano
Senior Vice President and Chief
Financial Officer
(Duly Authorized Representative
and Principal Financial Officer)
23
<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 three months ended
March 31, 2000 and is qualified in its entirety by reference to
such financial statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 13,007,874
<INT-BEARING-DEPOSITS> 4,742,928
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 218,232,820
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,276,089,911
<ALLOWANCE> 7,009,373
<TOTAL-ASSETS> 1,618,665,099
<DEPOSITS> 943,433,556
<SHORT-TERM> 531,081,032
<LIABILITIES-OTHER> 16,259,222
<LONG-TERM> 0
0
0
<COMMON> 101,001
<OTHER-SE> 127,790,288
<TOTAL-LIABILITIES-AND-EQUITY> 1,618,665,099
<INTEREST-LOAN> 25,202,022
<INTEREST-INVEST> 3,529,096
<INTEREST-OTHER> 465,549
<INTEREST-TOTAL> 29,196,667
<INTEREST-DEPOSIT> 11,318,904
<INTEREST-EXPENSE> 18,276,222
<INTEREST-INCOME-NET> 10,920,445
<LOAN-LOSSES> 300,000
<SECURITIES-GAINS> (14,688)
<EXPENSE-OTHER> 7,471,446
<INCOME-PRETAX> 4,625,621
<INCOME-PRE-EXTRAORDINARY> 2,871,621
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,871,621
<EPS-BASIC> 0.30
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 2.88
<LOANS-NON> 7,853,000
<LOANS-PAST> 654,000
<LOANS-TROUBLED> 1,138,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,937,900
<CHARGE-OFFS> 228,527
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 7,009,373
<ALLOWANCE-DOMESTIC> 4,645,424
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,363,949
</TABLE>
