<PAGE> 1
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, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - ----
EXCHANGE ACT OF 1934
For the transition period from to
------------ -------------
COMMISSION FILE NUMBER 0-22608
FFLC BANCORP, INC.
------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 59-3204891
- - ---------------------------- --------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 North Boulevard West, Post Office Box 490420, Leesburg, Florida 34749-0420
- - ------------------------------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (352) 787-3311
--------------
- - --------------------------------------------------------------------------------
FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT.
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
--- ---
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:
Common stock, par value $.01 per share 2,638,356 shares outstanding at
- - -------------------------------------- -------------------------------
at April 23, 1996
-----------------
CONFORMED COPY
<PAGE> 2
FFLC BANCORP, INC.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
----
Condensed Consolidated Balance Sheets -
March 31, 1996 (unaudited) and December 31, 1995........................2
Condensed Consolidated Statements of Income -
Three months ended March 31, 1996 and 1995 (unaudited)..................3
Condensed Consolidated Statement of Stockholders' Equity -
For the Three-Month Period Ended March 31, 1996 (unaudited).............4
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 1996 and 1995 (unaudited)................5-6
Notes to Condensed Consolidated Financial Statements (unaudited)........7-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.............................................10-15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS................................................16
ITEM 2. CHANGES IN SECURITIES............................................16
ITEM 3. DEFAULT UPON SENIOR SECURITIES...................................16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............16
ITEM 5. OTHER INFORMATION................................................16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................16
SIGNATURES..................................................................17
1
<PAGE> 3
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
MARCH 31, DECEMBER 31,
--------- ------------
1996 1995
---- ----
ASSETS (UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 4,186 5,005
Interest-bearing deposits 12,051 8,924
------- -------
Cash and cash equivalents 16,237 13,929
------- -------
Investment securities held-to-maturity, at cost-
SBA-guaranteed securities (market value of $3,422
in 1996 and $3,472 in 1995) 3,385 3,441
------- -------
Investment securities available-for-sale, at market:
Investment in mutual funds 8,962 8,900
U.S. Government and agency securities 13,896 11,392
Other investment securities 1,846 1,532
------- -------
Investment securities available-for-sale 24,704 21,824
------- -------
Mortgage-backed and related securities:
Securities held-to-maturity, at cost (market value of $67,039
in 1996 and $75,257 in 1995) 66,826 74,925
Securities available-for-sale, at market 18,470 18,958
------- -------
Mortgage-backed and related securities 85,296 93,883
------- -------
Loans receivable, net 191,233 183,448
Accrued interest receivable:
Investment securities 493 643
Mortgage-backed securities 281 291
Loans receivable 1,104 1,012
Real estate acquired by foreclosure 150 165
Real estate held for development 122 122
Premises and equipment, net 5,137 4,817
Federal Home Loan Bank stock, at cost 1,939 1,928
Other assets 433 329
------- -------
Total $ 330,514 325,832
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts 271,028 267,703
Advances from Federal Home Loan Bank 150 150
Advance payments by borrowers for taxes and insurance 230 100
Deferred income taxes 1,077 1,105
Accrued expenses and other liabilities 1,933 1,414
------- -------
Total liabilities 274,418 270,472
------- -------
Stockholders' Equity:
Preferred stock - -
Common stock 28 28
Additional paid-in-capital 27,112 27,041
Retained income, substantially restricted 33,316 32,704
Unrealized loss on securities available-for-sale (212) (94)
Treasury stock, at cost (132,044 shares at March 31, 1996
and December 31, 1995) (2,373) (2,373)
Stock held by Incentive Plan Trusts (1,775) (1,946)
------- -------
Total stockholders' equity 56,096 55,360
------- -------
Total $ 330,514 325,832
======= =======
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Interest income:
Interest on loans receivable $ 3,941 3,181
Interest on mortgage-backed securities 1,418 1,673
Interest and dividends on investment securities and time
deposits 587 517
--------- ---------
Total interest income 5,946 5,371
--------- ---------
Interest expense:
Deposit accounts 3,213 2,676
Borrowed funds 2 32
--------- ---------
Total interest expense 3,215 2,708
--------- ---------
Net interest income 2,731 2,663
Provision for loan losses 14 30
--------- ---------
Net interest income after provision
for loan losses 2,717 2,633
--------- ---------
Noninterest income:
Deposit account fees 111 117
Other service charges and fees 63 26
Other 8 14
--------- ---------
Total noninterest income 182 157
--------- ---------
Noninterest expense:
Compensation and benefits 883 761
Occupancy and equipment 195 133
Federal deposit insurance premiums 152 143
Advertising and promotion 21 31
Data processing expense 94 76
Professional services 59 61
Other 159 159
--------- ---------
Total noninterest expense 1,563 1,364
--------- ---------
Income before provision for income taxes 1,336 1,426
Provision for income taxes 525 534
--------- ---------
Net income $ 811 892
========= =========
Earnings per share $ .31 .33
========= =========
Dividends per share $ .08 .06
========= =========
Weighted average number of shares outstanding 2,595,488 2,671,553
========= =========
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 1996
($ IN THOUSANDS)
UNREALIZED STOCK
RETAINED LOSS ON HELD BY
ADDITIONAL INCOME, SECURITIES INCENTIVE TOTAL
COMMON PAID-IN SUBSTANTIALLY AVAILABLE- TREASURY PLAN STOCKHOLDERS'
STOCK CAPITAL RESTRICTED FOR-SALE STOCK TRUSTS EQUITY
------- --------- ------------- ---------- --------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1995 $ 28 27,041 32,704 (94) (2,373) (1,946) 55,360
Proceeds from 1,000 shares
of common stock issued
under the employee stock
option plans (unaudited) - 10 - - - - 10
Net income (unaudited) - - 811 - - - 811
Dividends (unaudited) - - (199) - - - (199)
Shares committed to
participants in
incentive plans
(unaudited) - 61 - - - 171 232
Change in unrealized
losses on securities
available-for-sale,
net of income
taxes of $71
(unaudited) - - - (118) - - (118)
--- ------ ------- --- ----- ----- ------
Balance at March 31, 1996
(unaudited) $ 28 27,112 33,316 (212) (2,373) (1,775) 56,096
=== ====== ====== === ===== ===== ======
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ IN THOUSANDS)
FOR THE THREE MONTHS
ENDED MARCH 31,
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 811 892
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses 14 30
Depreciation 81 19
Stock committed to incentive plan participants 232 219
Amortization of premiums or discounts
on investment and mortgage-backed securities (38) (3)
Accretion of deferred loan fees and unearned income (6) (42)
Deferral of net loan fees collected 35 7
Loss on sale of real estate owned 2 1
Dividends on FHLB stock (11) -
Decrease in accrued interest receivable 68 70
Increase in other assets (104) (135)
Provision (credit) for deferred income taxes 43 (53)
Increase (decrease) in accrued expenses and other liabilities 519 (52)
------ -----
Net cash provided by operating activities 1,646 953
------ -----
Cash flows from investing activities:
Purchase of mortgage-backed securities available-for-sale (731) -
Principal repayments on mortgage-backed securities
held-to-maturity 8,129 4,996
Principal repayments on mortgage-backed securities
available-for-sale 1,092 525
Purchase of investment securities available-for-sale (5,789) (132)
Proceeds from maturities of investment securities held-to-maturity 56 40
Proceeds from maturities of investment securities available-for-sale
Loan disbursements (18,861) (11,567)
Principal repayments on loans 11,035 4,044
Purchase of premises and equipment, net (401) (480)
Proceeds from sales of real estate owned 13 53
------ ------
Net cash used in investing activities (2,604) (1,631)
------ ------
(continued)
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
($ IN THOUSANDS)
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from financing activities:
Stock options exercised 10 -
Cash dividends paid (199) (152)
Purchase of treasury stock - (177)
Net increase in deposit accounts 3,325 1,480
Repayment of securities sold under agreements to repurchase - (3,000)
Increase in advance payments by borrowers for taxes and insurance 130 138
------ ------
Net cash provided by (used in)
financing activities 3,266 (1,711)
------ ------
Net increase (decrease) in cash and cash equivalents 2,308 (2,389)
Cash and cash equivalents, beginning of period 13,929 10,255
------ ------
Cash and cash equivalents, end of period $ 16,237 7,866
====== ======
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 3,145 2,652
====== ======
Income taxes $ 125 33
====== ======
Noncash investing and financing activities:
Transfer from loans to real estate owned $ - 262
====== ======
Loans originated on sales of real estate owned $ - 89
====== ======
Loans funded by and sold to correspondent $ 1,218 284
====== ======
(Increase) decrease in equity valuation allowance for
market value of investment and mortgage-backed
securities available-for-sale $ (118) 350
====== ======
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
6
<PAGE> 8
FFLC BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION. In the opinion of the management of FFLC Bancorp,
Inc., the accompanying condensed consolidated financial statements
contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position at March 31, 1996 and
the results of operations and cash flows for the three-month periods
ended March 31, 1996 and 1995. The results of operations and other data
for the three-month period ended March 31, 1996, are not necessarily
indicative of results that may be expected for the entire year ending
December 31, 1996.
The condensed consolidated financial statements include the accounts of
FFLC Bancorp, Inc. (the "Holding Company") and its wholly-owned
subsidiary, First Federal Savings Bank of Lake County (the "Savings
Bank") (together, the "Company"). All significant intercompany accounts
and transactions have been eliminated in consolidation.
2. LOAN IMPAIRMENT AND LOAN LOSSES. On January 1, 1995, the Company
adopted Statements of Financial Accounting Standards No. 114 and 118.
These Statements address the accounting by creditors for impairment of
certain loans. The Statements generally require the Company to identify
loans for which the Company probably will not receive full repayment of
principal and interest, as impaired loans. The Statements require that
impaired loans be valued at the present value of expected future cash
flows, discounted at the loan's effective interest rate, or at the
observable market price of the loan, or the fair value of the underlying
collateral if the loan is collateral dependent. The Company has
implemented the Statements by modifying its quarterly review of the
adequacy of the allowance for loan losses to also identify and value
impaired loans in accordance with guidance in the Statements. As a result
of the Company's review as of March 31, 1996, no loans have been
identified as impaired. The adoption of the Statements did not have any
effect on the results of operations for the three months ended March 31,
1995.
The activity in the allowance for loan losses is as follows (in
thousands):
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
MARCH 31,
-------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Balance, beginning of period $ 977 869
Provision charged to earnings 14 30
Charge-offs (3) -
---- ---
Balance, end of period $ 988 899
=== ===
</TABLE>
7
<PAGE> 9
FFLC BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
3. IMPACT OF NEW ACCOUNTING ISSUES. On January 1, 1996, the Company adopted
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"), which establishes financial
accounting and reporting standards for stock-based employee compensation
plans. The Statement requires certain disclosures about stock-based
compensation arrangements, regardless of the method used to account for
them, and defines a fair value based method of accounting for an employee
stock option or similar equity instrument and encourages all entities to
adopt that method of accounting for all of their employee stock compensation
plans. However, SFAS No. 123 also allows an entity to continue to measure
compensation cost for stock-based compensation plans using the intrinsic
value method of accounting prescribed by APB Opinion No. 25, "Accounting
for Stock Issued to Employees." Entities electing to continue using the
accounting method in APB Opinion No. 25 must make pro forma disclosures of
net income and earnings per share as if the fair value method of accounting
defined in SFAS No. 123 had been applied. Under the fair value method,
compensation cost is measured at the grant date based on the value of the
award and is recognized over the service period, which is usually the
vesting period. Under the intrinsic value method, compensation cost is the
excess, if any, of the quoted market price of the stock at grant date or
other measurement date over the amount an employee must pay to acquire the
stock. The Company elected to continue to utilize the intrinsic value
method of accounting defined in APB Opinion No. 25, and accordingly, the
adoption of SFAS No. 123 had no effect on the Company's financial position
at March 31, 1996 or results of operations for the three months then ended.
The pro forma disclosures required under SFAS No. 123, for stock options
granted during 1995 and thereafter, are not required for interim condensed
financial statements.
8
<PAGE> 10
FFLC BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
4. PER SHARE AMOUNTS. Earnings per share of common stock has been determined by
dividing net income for the period by the weighted average number of shares
outstanding. Shares of common stock purchased by the ESOP and RRP incentive
plans are only considered outstanding when the shares are released for
allocation to participants. Stock options are regarded as common stock
equivalents and are therefore considered in both primary and fully diluted
earnings per share calculations. Common stock equivalents are computed using
the treasury stock method. The following table presents the calculation of
earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1995
---- ----
<S> <C> <C>
Net income $ 810,644 892,415
========= =========
Weighted average common shares outstanding 2,639,284 2,755,593
Less: ESOP and RRP Plan shares not committed to be released (160,909) (188,653)
--------- ---------
Weighted average common shares outstanding for
calculation of earnings per share 2,478,375 2,566,940
Common stock equivalents due to dilutive effect of stock options 117,113 104,613
--------- ---------
Total weighted average common shares and equivalents
outstanding for primary earnings per share computation 2,595,488 2,671,553
Primary earnings per share $ .31 .33
========= =========
Total weighted average common shares and equivalents
outstanding for primary earnings per share computation 2,595,488 2,671,553
Additional dilutive shares using the higher of the end of period market
value versus average market value for the period utilizing the treasury
stock method regarding stock options - -
--------- ---------
Total weighted average common shares and equivalents
outstanding for fully diluted earnings per share computation 2,595,488 2,671,553
Fully diluted earnings per share $ .31 .33
========= =========
</TABLE>
9
<PAGE> 11
FFLC BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
FFLC Bancorp, Inc. (the "Holding Company") was formed as the holding company
for First Federal Savings Bank of Lake County (the "Savings Bank") in
connection with the Savings Bank's conversion from a federally chartered
mutual savings and loan association to a federally chartered stock savings
bank on January 4, 1994. The Company's consolidated results of operations are
primarily those of the Savings Bank.
The Savings Bank's principal business continues to be attracting retail
deposits from the general public and investing those deposits, together with
principal repayments on loans and investments and funds generated from
operations, primarily in mortgage loans secured by one-to-four-family
owner-occupied homes, mortgage-backed securities and, to a lesser extent,
construction loans, consumer and other loans, and multi-family residential
mortgage loans. In addition, the Savings Bank holds investments permitted by
federal laws and regulations including securities issued by the U.S.
Government and agencies thereof. The Savings Bank's revenues are derived
principally from interest on its mortgage loan and mortgage-backed securities
portfolios and interest and dividends on its investment securities. The
Savings Bank is a member of the FHLB system and its deposits are insured to
the applicable limits by the Savings Association Insurance Fund ("SAIF") of
the Federal Deposit Insurance Corporation (the "FDIC"). The Savings Bank is
subject to regulation by the Office of Thrift Supervision (the "OTS") as its
chartering agency, and the FDIC as its deposit insurer.
The Savings Bank has 8 full-service locations in Lake and Sumter Counties,
Florida.
The Savings Bank's results of operations are dependent primarily on net
interest income, which is the difference between the interest income earned
primarily on its loans and investment and mortgage-backed securities
portfolios, and its cost of funds, consisting of the interest paid on its
deposits and borrowings. The Savings Bank's operating results are also
affected, to a lesser extent, by fee income and by gains or losses on the
sale of loans, investment and mortgage-backed securities available-for-sale
and real estate owned. The Savings Bank's operating expenses consist
primarily of employee compensation, occupancy expenses, FDIC insurance
premiums and other general and administrative expenses. The Savings Bank's
results of operations are also significantly affected by general economic and
competitive conditions, particularly changes in market interest rates,
government policies, and actions of regulatory authorities.
10
<PAGE> 12
FFLC BANCORP, INC.
LIQUIDITY AND CAPITAL RESOURCES
The Company's most liquid assets are cash, amounts due from depository
institutions and interest-bearing deposits. The levels of these assets are
dependent on the Company's lending, investing, operating, and deposit
activities during any given period. At March 31, 1996, cash, amounts due
from depository institutions and interest-earning deposits, totaled $16.2
million.
The Savings Bank is required to maintain an average daily balance of
specified liquid assets equal to a monthly average of not less than a
specified percentage of its net withdrawable deposit accounts plus
short-term borrowings. This liquidity requirement is currently 5% but may be
changed from time to time by the OTS to any amount within the range of 4% to
10% depending upon economic conditions and the savings flows of member
institutions. OTS regulations also require each member savings institution
to maintain an average daily balance of short-term liquid assets at a
specified percentage (currently 1%) of the total of its net withdrawable
deposit accounts and borrowings payable in one year or less. Monetary
penalties may be imposed for failure to meet these liquidity requirements.
The Savings Bank's liquidity and short-term liquidity ratios for March 31,
1996 were 14.5% and 8.1%, respectively, which exceeded the requirements. The
Savings Bank has never been subject to monetary penalties for failure to
meet its liquidity requirements.
The Savings Bank's sources of funds include payments and prepayments on
mortgage loans and mortgage-backed securities, proceeds from maturities of
investment securities, and increases in deposit accounts. While maturities
and scheduled amortization of loans, mortgage-backed and investment
securities are predictable sources of funds, deposit inflows and mortgage
prepayments are greatly influenced by local conditions, general interest
rates, and regulatory changes.
At March 31, 1996, the Savings Bank had outstanding commitments to originate
$4.0 million of loans and to fund the undisbursed portion of loans in
process of approximately $6.8 million. The Savings Bank believes that it
will have sufficient funds available to meet its commitments. At March 31,
1996, certificates of deposit which were scheduled to mature in one year or
less totaled $150.2 million. Management believes, based on past experience,
that a significant portion of these funds will remain with the Savings Bank.
As a federally chartered financial institution, the Savings Bank is required
to maintain certain minimum amounts of regulatory capital. The following
table is a summary of the regulatory capital requirements, the Savings
Bank's regulatory capital and the amounts in excess of such required capital
as of March 31, 1996:
<TABLE>
<CAPTION>
TANGIBLE CORE RISK-BASED
------------------- ------------------- ------------------
($ IN THOUSANDS)
% OF
% OF % OF RISK-
QUALIFYING UALIFYING WEIGHTED
AMOUNT ASSETS AMOUNT ASSETS AMOUNT ASSETS
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Regulatory capital $ 39,790 12.0% $ 39,790 12.0% $ 40,767 28.6%
Requirement 4,957 1.5 9,915 3.0 11,401 8.0
------ ---- ------ ---- ------ ----
Excess $ 34,833 10.5% $ 29,875 9.0% $ 29,366 20.6%
====== ==== ====== ==== ====== ====
</TABLE>
11
<PAGE> 13
FFLC BANCORP, INC.
During 1995, the FDIC established a new assessment rate schedule of 4 to 31
basis points for Bank Insurance Fund ("BIF") members. Approximately 91% of
BIF members pay the lowest assessment rate of 4 basis points. The FDIC
retained the existing assessment rate schedule of 23 to 31 basis points
applicable to SAIF member institutions. In announcing the rule, the FDIC
noted that the premium differential may have adverse consequences for SAIF
members, including reduced earnings and an impaired ability to raise funds
in the capital markets. In addition, SAIF members, such as the Savings Bank,
could be placed at a disadvantage to BIF members with respect to pricing of
loans and deposits and the ability to achieve lower operating costs.
Legislation pending in Congress would impose a one-time assessment of
between 85 and 90 basis points on the amount of deposits held by SAIF-member
institutions, including the Savings Bank, to recapitalize the SAIF fund. If
the assessment is made at the proposed rate, the effect on the Bank would be
a pretax charge of approximately $2,157,000 (0.85% on deposits of $253.8
million at March 31, 1995), or $1,348,000 after tax (37.5% assumed tax
rate). Should this occur, the Holding Company does not expect to have to
contribute capital to the Savings Bank for it to remain a well-capitalized
institution.
During the three months ended March 31, 1996, the Savings Bank declared and
paid a cash dividend of $2.7 million to the Holding Company.
The following table shows selected ratios for the periods ended or at the
dates indicated:
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED YEAR ENDED ENDED
MARCH 31, DECEMBER 31, MARCH 31,
1996 1995 1995
------------ ------------ -----------
<S> <C> <C> <C>
Average equity as a percentage
of average assets 17.03% 17.46% 17.58%
Total equity to total assets at end of period 16.97% 16.99% 17.68%
Return on average assets .99% .98% 1.15%
Return on average equity 5.82% 5.59% 6.56%
Noninterest expense to average assets 1.91% 1.85% 1.76%
Nonperforming loans and real estate owned to
total assets at end of period .08% .10% .09%
</TABLE>
12
<PAGE> 14
FFLC BANCORP, INC.
<TABLE>
<CAPTION>
AT AT AT
MARCH 31, DECEMBER 31, MARCH 31,
1996 1995 1995
--------- ----------- ---------
<S> <C> <C> <C>
Weighted average interest rates:
Interest-earning assets:
Loans 8.24% 8.30% 8.22%
Mortgage-backed securities 6.30% 6.29% 5.91%
Investment securities and other interest-
earning assets 5.84% 5.94% 6.11%
Total interest-earning assets 7.40% 7.42% 7.13%
Interest-bearing liabilities:
Deposit accounts 4.76% 4.87% 4.62%
Borrowed funds 7.17% 7.17% 7.17%
Total interest-bearing liabilities 4.76% 4.87% 4.64%
Interest-rate spread 2.64% 2.55% 2.49%
</TABLE>
CHANGE IN FINANCIAL CONDITION
Total assets increased $4.7 million or 1.4%, from $325.8 million at December
31, 1995 to $330.5 million at March 31, 1996, primarily as a result of
increases in cash and cash equivalents of $2.3 million, investment securities
of $2.9 million and loans receivable of $7.8 million, partially offset by a
decrease in mortgage-backed securities of $8.6 million. Customer deposits
increased $3.3 million from $267.7 million at December 31, 1995 to $271.0
million at March 31, 1996. The net increase in stockholders' equity during
the three month period ended March 31, 1996 resulted from net income of
$811,000, credits to equity of $232,000 related to the stock incentive plans,
and proceeds from stock options exercised of $10,000, all of which was
partially offset by a $118,000 increase in the unrealized loss on securities
available-for-sale, net of tax effect and $199,000 in dividends paid during
the quarter.
13
<PAGE> 15
FFLC BANCORP, INC.
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of FFLC Bancorp from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest/dividend income; (iv) interest rate spread; and
(v) net interest margin.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------------------------------------------
1996 1995
------------------------------------ -------------------------------
AVERAGE AND YIELD/ AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE BALANCE DIVIDENDS RATE
------- --------- ------ ------- --------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $ 186,327 3,941 8.46% $ 151,506 3,181 8.40%
Mortgage-backed securities 90,518 1,418 6.27 114,770 1,673 5.83
Investment securities and other
interest-earning assets (1) 39,420 587 5.96 34,209 517 6.05
------- ----- ------- -----
Total interest-earning assets 316,265 5,946 7.52 300,485 5,371 7.15
-----
Noninterest-earning assets 11,250 8,876
------- -------
Total assets $ 327,515 $ 309,361
======= =======
Interest-bearing liabilities:
Deposit accounts 268,346 3,213 4.79 249,548 2,676 4.29
Borrowed funds 150 2 5.33 2,055 32 6.23
------- ------ ------- -----
Total interest-bearing liabilities 268,496 3,215 4.79 251,603 2,708 4.31
------ -----
Noninterest-bearing liabilities 3,236 3,381
Stockholders' equity 55,783 54,377
-------- -------
Total liabilities and
stockholders' equity $ 327,515 $ 309,361
======= =======
Net interest/dividend income $ 2,731 $ 2,663
===== =====
Interest rate spread (2) 2.73% 2.84%
==== ====
Net average interest-earning assets,
net interest margin (3) $ 47,769 3.45% $ 48,882 3.54%
======= ==== ======= ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.18 1.19
==== ====
</TABLE>
- - -----------------------------------
(1) Includes interest-bearing deposits, federal funds sold and FHLB stock.
(2) Interest rate spread represents the difference between the average yield
on interest-earning assets and the average cost of interest-bearing
liabilities.
(3) Net interest margin is net interest income divided by average interest-
earning assets.
14
<PAGE> 16
FFLC BANCORP, INC.
COMPARISON OF THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
RESULTS OF OPERATIONS
GENERAL OPERATING RESULTS. Net income for the three-month period ended March 31,
1996 was $811,000, or $.31 per share, compared to $892,000, or $.33 per
share, for the comparable period in 1995. The decrease in net income resulted
from an increase in noninterest expense of $199,000, partially offset by an
increase in net interest income of $68,000.
INTEREST INCOME. Interest income increased $575,000, or 10.7% from $5.4 million
for the three-month period ended March 31, 1995 to $5.9 million for the
three-month period ended March 31, 1996. The increase was due to a 5.3%
increase in average interest-earning assets outstanding for the three months
ended March 31, 1996, compared to the 1995 period, and an increase in the
average yield on interest-earning assets from 7.15% for the three months
ended March 31, 1995, to 7.52% for the three months ended March 31, 1996.
INTEREST EXPENSE. Interest expense increased $507,000, from $2.7 million for the
three-month period ended March 31, 1995 to $3.2 million for the three-month
period ended March 31, 1996. The 18.7% increase was due to an increase in
average interest-bearing liabilities of $16.9 million and an increase in the
weighted average rate paid on interest-bearing liabilities from 4.31% during
the 1995 period to 4.79% during the 1996 period.
NONINTEREST EXPENSE. Noninterest expense consisted primarily of employee
compensation and benefits, occupancy and equipment expense and FDIC insurance
premiums. Noninterest expenses increased by $199,000, or 14.6% from $1.4
million for the three-month period ended March 31, 1995 to $1.6 million for
the three-month period ended March 31, 1996. The increase was primarily due
to an increase in compensation and benefits of $122,000 and a $62,000
increase in office occupancy and equipment. Those increased expenses were due
to the opening of two new branches in the fourth quarter of 1995.
INCOME TAX PROVISION. The income tax provision decreased from $534,000 for the
three-month period ended March 31, 1995 (an effective tax rate of 37.4%) to
$525,000 (an effective tax rate of 39.3%) for the corresponding period for
1996.
15
<PAGE> 17
FFLC BANCORP, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which FFLC Bancorp, Inc.
or any of its subsidiaries is a party or to which any of their property is
subject.
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULT 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 - not applicable
b. There were no reports on Form 8-K filed for the three months ended
March 31, 1996.
16
<PAGE> 18
FFLC BANCORP, INC.
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.
FFLC BANCORP, INC.
(Registrant)
Date: April 25, 1996 By: /s/ Stephen T. Kurtz
------------------------ --------------------------------
Stephen T. Kurtz, President and
Chief Executive Officer
Date: April 25, 1996 By: /s/ Paul K. Mueller
---------------------- --------------------
Paul K. Mueller, Senior Vice
President and Chief Accounting
Officer
17
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000912738
<NAME> FFLC Bancorp, Inc.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 4,186
<INT-BEARING-DEPOSITS> 12,051
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 43,174
<INVESTMENTS-CARRYING> 70,211
<INVESTMENTS-MARKET> 70,461
<LOANS> 192,221
<ALLOWANCE> (988)
<TOTAL-ASSETS> 330,514
<DEPOSITS> 271,028
<SHORT-TERM> 150
<LIABILITIES-OTHER> 3,240
<LONG-TERM> 0
0
0
<COMMON> 28
<OTHER-SE> 56,068
<TOTAL-LIABILITIES-AND-EQUITY> 330,514
<INTEREST-LOAN> 3,941
<INTEREST-INVEST> 2,005
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 5,946
<INTEREST-DEPOSIT> 3,213
<INTEREST-EXPENSE> 3,215
<INTEREST-INCOME-NET> 2,731
<LOAN-LOSSES> 14
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,563
<INCOME-PRETAX> 1,336
<INCOME-PRE-EXTRAORDINARY> 1,336
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 811
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
<YIELD-ACTUAL> 7.52
<LOANS-NON> 100
<LOANS-PAST> 20
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 977
<CHARGE-OFFS> (3)
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 988
<ALLOWANCE-DOMESTIC> 14
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
