SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-QSB
(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, 1997
OR
[ ] TRANSITION report pursuant to section 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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SEC File Number 0-23194
First Savings Bancorp of Little Falls, Inc.
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(Exact name of registrant as specified in its charter)
New Jersey 22-3360945
- -------------------------------------- ------------------------------------
(State or other jurisdiction) (I.R.S. Employer Identification No.)
Registrant's telephone number, including area code (201) 256-2100
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Former name, former address and former fiscal year, if changed since last report
Indicate by check (X) 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
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APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the
number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 440,100.
<PAGE>
FIRST SAVINGS BANCORP OF LITTLE FALLS, INC.
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INDEX
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Page
----
Number
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PART I - CONSOLIDATED FINANCIAL INFORMATION
Consolidated Statements of Financial
Condition at March 31, 1997
and December 31, 1996 (unaudited) 1
Consolidated Statements of Income
for the Three Months Ended
March 31, 1997 and 1996
(unaudited) 2
Consolidated Statements of Cash Flows
of the Three Months Ended
March 31, 1997 and 1996 (unaudited) 3-4
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-8
PART II - OTHER INFORMATION 9
SIGNATURES 10
<PAGE>
FIRST SAVINGS BANCORP OF LITTLE FALLS, INC
------------------------------------------
AND SUBSIDIARY
--------------
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
Assets March 31, 1997 December 31, 1996
- ------ -------------- -----------------
<S> <C> <C>
Cash and amounts due from
depository institutions $ 1,192,163 $ 1,319,813
Interest-bearing demand
deposits in other banks 4,509,848 9,353,526
------------ ------------
Total cash and cash equivalents 5,702,011 10,673,339
Securities available for sale, net 38,781,426 37,506,700
Investment securities held to maturity, net:
estimated fair value of $10,998,000(1997) and $2,000,000(1996) 10,998,371 2,000,000
Mortgage-backed securities held to maturity, net:
estimated fair value of $11,503,000(1997) and $12,813,000(1996) 11,356,295 12,805,191
Loans receivable, net of allowance for loan
losses of $525,218(1997) $523,715 (1996) 93,744,518 94,732,642
Premises and equipment, net 2,941,518 2,956,315
Real estate owned, net 2,684,347 2,906,034
Federal Home Loan Bank of New York stock, at cost 1,106,600 925,600
Interest and dividends receivable, net 1,211,609 1,110,765
Other assets 1,244,888 1,117,511
------------ ------------
Total assets $169,771,583 $166,734,097
============ ============
Liabilities and stockholder's equity
- ------------------------------------
Liabilities
- -----------
Deposits $159,417,500 $156,596,114
Advance payments by borrowers for
taxes and insurance 659,488 633,815
Other liabilities 187,269 171,920
------------ ------------
Total liabilities 160,264,257 157,401,849
------------ ------------
Stockholders' Equity
- --------------------
Common Stock (par value $1.00 per share)
authorized 5,000,000 shares: issued and
outstanding 440,100 shares 440,100 440,100
Additional paid-in capital 3,670,377 3,670,377
Retained earnings-substantially restricted 5,211,121 5,062,392
Unrealized gain on securities available for sale 185,728 159,379
------------ ------------
Total stockholders' equity 9,507,326 9,332,248
------------ ------------
Total liabilities and stockholders' equity $169,771,583 $166,734,097
============ ============
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
PAGE 1
<PAGE>
FIRST SAVINGS BANCORP OF LITTLE FALLS, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
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MARCH 31
----------------------------
1 9 9 7 1 9 9 6
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<S> <C> <C>
Interest income
Loans $1,977,647 $1,864,489
Mortgage-backed securities 766,383 666,267
Investments and other 236,830 288,031
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Total interest income 2,980,860 2,818,787
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Interest Expense
Deposits 1,957,284 1,594,602
Borrowed Money ----- 181,326
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Total Interest expense 1,957,284 1,775,928
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Net interest income 1,023,576 1,042,859
Provision for loan losses 25,000 25,000
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Net interest income after
provision for loan losses 998,576 1,017,859
Non-interest income
Service charges 21,768 24,048
Miscellaneous 9,759 17,002
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Total non-interest income 31,527 41,050
---------- ----------
Non-interest expense
Salaries and employee benefits 364,016 352,389
Net occupancy expense 61,444 67,528
Equipment 88,380 85,547
Loss on foreclosed real estate 17,805 22,764
Federal insurance premium 22,389 74,471
Advertising and promotion 28,299 6,069
Legal fees 44,668 49,600
Miscellaneous 167,559 148,386
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Total non-interest expenses 794,560 806,754
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Income before income taxes 235,543 252,155
Income taxes 86,814 87,960
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Net income 148,729 164,195
Preferred stock dividends ------ 42,500
---------- ----------
Net income applicable to common shares $148,729 $121,695
========== ==========
Net income per common share and common
stock equivalents $0.34 $0.37 1)
Weighted average number of common
shares and common stock
equivalents outstanding 440,100 440,100
</TABLE>
See notes to unaudited consolidated financial statements
1) At March 31, 1996, previously reported as $0.28, due to an error in
computation.
Page 2
<PAGE>
FIRST SAVINGS BANCORP OF LITTLE FALLS INC.
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AND SUBSIDIARY
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $148,729 $164,195
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 69,249 70,221
Amortization of premiums, discounts and fees, net 65,563 58,465
Provision for loan losses 25,000 25,000
Net loss on sales of real estate owned 333 ---------
(Increase) decrease in interest and dividends receivable, net (100,844) 81,746
Increase in other assets (149,898) (132,308)
Decrease in accrued interest payable (45,112) (98,407)
Increase(decrease) in other liabilities 15,349 (12,198)
Amortization of branch premium 8,333 8,333
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Net cash provided by operating activities 36,702 165,047
---------- ----------
Cash flows from investing activities:
Purchase of securities available for sale (1,920,484) (2,251,937)
Proceeds from Investment securities held to maturity matured or called --------- 12,000,000
Mortgage-backed securities held to maturity purchased --------- (8,390,111)
Purchase of investment securities held to maturity (8,998,371) ---------
Securities available for sale repayments 601,517 800,248
Mortgage-backed securities held to maturity repayments 1,448,896 263,469
Net decrease in loans receivable 1,143,339 770,504
Additions to premises and equipment (54,452) (13,803)
Additions to real estate owned 0 (117,500)
Payments received on real estate owned 1,000 3,000
Proceeds from sales of real estate owned 59,354 ---------
Purchase of Federal Home Loan Bank of NY stock (181,000) (102,300)
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Net cash (used in)provided by investment activities (7,900,201) 2,961,570
---------- ----------
Cash flows from financing activities:
Net increase in deposits 2,866,498 1,518,282
Repayment of Federal Home Loan Bank Advances ------- (4,600,000)
Increase in advance payments by
borrowers for taxes and insurance 25,673 44,066
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Net cash provided by(used in) financing activities 2,892,171 (3,037,652)
---------- ----------
Net (decrease) increase in cash and cash equivalents (4,971,328) 88,965
Cash and cash equivalents -- beginning 10,673,339 1,127,575
---------- ----------
Cash and cash equivalents -- end $5,702,011 $1,216,540
========== ==========
</TABLE>
See notes to unaudited consolidated financial statements
Page 3
<PAGE>
FIRST SAVINGS BANCORP OF LITTLE FALLS INC.
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AND SUBSIDIARY
--------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Supplemental disclosures of cash flows information:
- ---------------------------------------------------
Cash paid during the period for:
---------------------------------
Interest $2,002,396 $1,874,335
========== ==========
Income taxes $0 $0
========== ==========
Supplemental disclosure of noncash activities:
Increase(decrease) in unrealized gain on securities,
net of deferred income taxes $26,349 ($3,366)
========== ==========
Loans transferred to real estate owned ------- $70,268
========== ==========
Loans originated to facilitate the sale of
real estate owned $161,000 $0
========== ==========
Preferred stock dividend declared but not yet paid ------- $42,500
========== ==========
</TABLE>
See notes to unaudited consolidated financial statements
Page 4
<PAGE>
First Savings Bancorp of Little Falls, Inc.
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Notes To Consolidated Financial Statements
------------------------------------------
The consolidated financial statements include the accounts of First
Savings Bancorp of Little Falls, Inc. (the "Company") and its wholly owned
subsidiary, First Savings Bank of Little Falls, FSB (the "Savings Bank") and the
Savings Bank's wholly owned subsidiaries, The First Service Corporation of
Little Falls and Redeem, Inc. All significant intercompany balances and
transactions have been eliminated in consolidation.
These consolidated financial statements were prepared in accordance
with instructions for Form 10-QSB and therefore, do not include all disclosures
necessary for a complete presentation of the statements of financial condition,
statements of income, and statements of cash flows in conformity with generally
accepted accounting principles. However, all adjustments which are, in the
opinion of management, necessary for the fair presentation of the interim
financial statements have been included and all such adjustments are of a normal
recurring nature. The results of operations for the three months ended March 31,
1997 are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1997 or any other interim period.
These statements should be read in conjunction with the consolidated
statements and related notes which are incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Page 5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
FINANCIAL CONDITION AT MARCH 31, 1997
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Total assets of the Company increased $3.1 million or 2% from $166.7
million at December 31, 1996 to $169.8 million at March 31, 1997 primarily due
to a $9.0 million increase in net investment securities held to maturity and a
$1.3 million increase in net securities available for sale, offset by a $5.2
million decrease in interest bearing demand deposits in other banks, $1.4
million decrease in net mortgage-backed securities held to maturity and a $1.0
million net decrease in loans receivable. In view of the Company's decreased
loan demand for the quarter, the Company increased its investment securities
held to maturity and investment securities available for sale portfolios in
order to increase its overall net interest margin and mitigate any interest rate
risk for the quarter. The increases in these portfolios were primarily funded by
reductions interest bearing demand deposits in other banks, repayments of
mortgage-backed securities held to maturity, and a $2.8 million increase in
deposits.
Deposits increased $2.8 million or 2% from $156.6 million at December 31,
1996 to $159.4 million at March 31, 1997. The increase resulted primarily from
the growth of regular savings, Now accounts and the Company's response to the
general increase in rates offered by other bank's in the market area. The
Company did not offer promotional rates on deposits during this quarter.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997
- ---------------------------------------------------------------
Net income for the three months ended March 31, 1997 decreased $15,000 or
9% from $164,000 for the three month period ended March 31, 1996 to $149,000 for
three month period ended March 31, 1997. This decrease was primarily due to a
$19,000 decrease in net interest income, $9,000 decrease in non-interest income,
offset by a $12,000 decrease in non-interest expense.
For the three months ended March 31, 1997, net interest income decreased
$19,000 from $1.04 million for the same period in 1996 to $1.02 million in 1997.
During the three months ended March 31, 1997, the Company's interest rate spread
and net interest margin declined to 2.60% and 2.59%, respectively, compared to
2.89% and 2.87%, respectively for the same period of 1996. The lower spread and
margin are primarily due to a lower yield on earning assets and higher cost of
funds in the first quarter of 1997. The decreased interest rate spread and net
interest margin were largely mitigated by an increase in net interest-earning
assets.
Page 6
<PAGE>
Non-interest income decreased $9,000 or 23% from $41,000 for the three
month period ended March 31, 1996 to $32,000 for the three month period ended
March 31, 1997. The reduction was primarily the result of decreases in the
collection of mortgage late charges and DDA fees.
Non-interest expense decreased $12,000 or 1.5% from $807,000 for the three
month period ended March 31,1996 to $795,000 for the three month period ended
March 31, 1997. This decrease was primarily due to a $52,000 decrease in federal
deposit insurance premiums which was offset by an increase of $22,000 in
advertising and promotion. Federal deposit insurance decreased due to the
recapitalization of the Savings Association Insurance Fund of the FDIC. The
Company's insurance premium rate was lowered to 6.7 cents per $100 of deposits
from 23 cents per $100 of deposits. Advertising and promotion expense primarily
increased due to the Company's "Grand Reopening" promotion of the Little Ferry
branch which took place during the fourth quarter of 1996. Non-interest expenses
other than federal deposit insurance and advertising in aggregate, increased
$18,000 or 2.5%.
Income taxes were $87,000 and $88,000 for the three months ended March 31, 1997
and 1996, respectively. The decrease resulted from decreased pre-tax earnings.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Savings Bank is required to maintain minimum levels of liquid assets,
as defined by the Office Of Thrift Supervision regulations. This requirement,
which may be varied from time to time depending upon economic conditions and
deposit flows, is based upon a percentage of deposits and short-term borrowings.
The required minimum ratio is 5%. The Savings Bank's liquidity ratio averaged
16.26% during March 1997.
The Savings Bank anticipates that it will have sufficient funds available
to meet its current loan commitments and normal savings withdrawals. At March
31, 1997, the Savings Bank had outstanding loan commitments of $3.9 million. In
addition, it had $89.2 million in certificates of deposits scheduled to mature
within one year of March 31, 1997. Based upon historical experience, management
believes that a substantial portion of such deposits will remain with the
Savings Bank.
Page 7
<PAGE>
As of March 31, 1997, the Company had regulatory capital that was in excess
of applicable limits. The Company is required under certain federal regulations
to maintain tangible capital equal to at least 1.5% of its tangible assets, core
capital equal to at least 3.00% of adjusted tangible assets and risk-based
capital equal to at least 8.00% of risk-weighted assets. At March 31, 1997, the
Savings Bank had tangible capital equal to 5.27% of adjusted total assets, core
capital equal to 5.27% of adjusted total assets and total capital equal to
13.64% of risk-weighted assets.
Page 8
<PAGE>
FIRST SAVINGS BANCORP OF LITTLE FALLS, INC.
-------------------------------------------
PART II
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Item 1. Legal Proceedings
The Company and the Savings Bank are not engaged in any legal
proceedings of a material nature at the present time. From time to
time, the Savings Bank is a party to legal proceedings wherein it
enforces its security interest in loans.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Company was held on April 16,
1997, and the following items were acted upon:
Election of Director Haralambos S. Kostakopoulos for a
term of three years ending in 2000.
Dr. Kostakopoulos was elected to the term as indicated by
the following vote:
For Withheld
----------------- --------------------
Number Percentage Number Percentage
of of of of
Votes Shares Votes Shares
----- ------ ----- ------
Haralambos S. Kostakopoulos 413,525 93.96% -0- -0-
Ratification of the appointment of Radics & Co., LLC as independent
auditors for the fiscal year ending December 31, 1997. Radics & Co., LLC
was ratified as the Company's auditors. Radics & Co., LLP was ratified
as the Company's auditors by the following vote:
For Withheld
----------------- --------------------
Number Percentage Number Percentage
of of of of
Votes Shares Votes Shares
----- ------ ----- ------
413,525 93.96% -0- -0-
Item 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a)Exhibits
Exhibit 27 Financial Data Schedule(electronic filing
only)
b)Reports on Form 8-K
Not Applicable
Page 9
<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.
FIRST SAVINGS BANCORP OF LITTLE FALLS INC.
------------------------------------------
(Registrant)
Date: May 13, 1996 /s/Haralambos S. Kostakopoulos
---------------------------------------------
Haralambos S. Kostakopoulos
President
Chief Executive Officer
Date: May 13, 1996 /s/Brian McCourt
---------------------------------------------
Brian McCourt
Vice President
Treasurer
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Page 10
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,192
<INT-BEARING-DEPOSITS> 4,510
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 38,781
<INVESTMENTS-CARRYING> 22,355
<INVESTMENTS-MARKET> 22,501
<LOANS> 93,745
<ALLOWANCE> 525
<TOTAL-ASSETS> 169,772
<DEPOSITS> 159,418
<SHORT-TERM> 0
<LIABILITIES-OTHER> 847
<LONG-TERM> 0
0
0
<COMMON> 440
<OTHER-SE> 3,670
<TOTAL-LIABILITIES-AND-EQUITY> 169,772
<INTEREST-LOAN> 1,978
<INTEREST-INVEST> 766
<INTEREST-OTHER> 237
<INTEREST-TOTAL> 2,981
<INTEREST-DEPOSIT> 1,957
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,024
<LOAN-LOSSES> 25
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 795
<INCOME-PRETAX> 236
<INCOME-PRE-EXTRAORDINARY> 236
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 149
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
<YIELD-ACTUAL> 2.60
<LOANS-NON> 1,529
<LOANS-PAST> 438
<LOANS-TROUBLED> 1,313
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 524
<CHARGE-OFFS> 23
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 525
<ALLOWANCE-DOMESTIC> 525
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 525
</TABLE>
