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, 1997
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:
2,338,262 shares outstanding
Common stock, par value $.01 per share at April 23, 1997
- -------------------------------------- -----------------------------
<PAGE>
FFLC BANCORP, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
at March 31, 1997 (unaudited) and at December 31, 1996...................
Condensed Consolidated Statements of Income -
Three months ended March 31, 1997 and 1996 (unaudited)...................
Condensed Consolidated Statement of Stockholders' Equity -
Three months ended March 31, 1997 (unaudited)............................
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 1997 and 1996 (unaudited)...................
Notes to Condensed Consolidated Financial Statements (unaudited)...........
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................
Part II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................
Item 2. Changes in Securities...............................................
Item 3. Default upon Senior Securities......................................
Item 4. Submission of Matters to a Vote of Security Holders.................
Item 5. Other Information...................................................
Item 6. Exhibits and Reports on Form 8-K....................................
SIGNATURES......................................................................
<PAGE>
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
($ in thousands)
At At
March 31, December 31,
--------- ------------
1997 1996
--------- ---------
Assets (unaudited)
<S> <C> <C>
Cash and due from banks ...................................................... $ 5,813 6,080
Interest-bearing deposits .................................................... 4,210 4,077
--------- ---------
Cash and cash equivalents ........................................ 10,023 10,157
--------- ---------
Investment securities held to maturity, at cost
(market value of $3,198 in 1997 and $3,271 in 1996) ...................... 3,166 3,239
Investment securities available for sale, at market .......................... 31,342 29,593
Mortgage-backed and related securities held to maturity, at cost (market value
of $42,924 in 1997 and $47,396 in 1996) .................................. 42,509 46,892
Mortgage-backed and related securities available for sale, at market ......... 16,895 18,844
Loans receivable, net of allowance for loan losses of $1,123 in 1997
and $1,063 in 1996 ....................................................... 243,990 227,948
Accrued interest receivable:
Investment securities .................................................... 616 577
Mortgage-backed securities ............................................... 232 243
Loans receivable ......................................................... 1,309 1,199
Premises and equipment, net .................................................. 5,263 5,144
Foreclosed real estate ....................................................... 439 361
Real estate held for development ............................................. 122 122
Restricted securities - Federal Home Loan Bank stock, at cost ................ 2,304 1,939
Other assets ................................................................. 328 184
--------- ---------
Total ............................................................ $ 358,538 346,442
========= =========
Liabilities and Stockholders' Equity
Liabilities:
NOW and money market accounts ............................................ 47,062 43,306
Passbook and statement savings accounts .................................. 25,809 27,412
Certificates ............................................................. 218,546 211,946
--------- ---------
Total deposits ................................................... 291,417 282,664
<PAGE>
<CAPTION>
FFLC BANCORP, INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
($ in thousands)
(continued)
At At
March 31, December 31,
--------- ------------
1997 1996
--------- ---------
Assets (unaudited)
<S> <C> <C>
--------- ---------
Advances from Federal Home Loan Bank ......................................... -- 150
Securities sold under agreements to repurchase ............................... 11,952 8,048
Deferred income taxes ........................................................ 840 930
Accrued expenses and other liabilities ....................................... 2,437 1,024
--------- ---------
Total liabilities ................................................ 306,646 292,816
--------- ---------
Stockholders' equity:
Preferred stock .......................................................... -- --
Common stock ............................................................. 28 28
Additional paid-in-capital ............................................... 27,630 27,386
Retained income .......................................................... 34,660 33,962
Unrealized loss on securities available for sale, net of tax
of $192 in 1997 and $116 in 1996 ..................................... (320) (193)
Treasury stock, at cost .................................................. (8,922) (6,295)
Stock held by Incentive Plan Trusts ...................................... (1,184) (1,262)
--------- ---------
Total stockholders' equity ....................................... 51,892 53,626
--------- ---------
Total ............................................................ $ 358,538 346,442
========= =========
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Income
($ in thousands, except per share amounts)
Three Months Ended
March 31,
--------------------------
1997 1996
---------- ----------
(unaudited)
<S> <C> <C>
Interest income:
Loans receivable ........................... $ 4,839 3,941
Mortgage-backed securities ................. 1,008 1,418
Investment securities and time deposits .... 636 587
---------- ----------
Total interest income .............. 6,483 5,946
---------- ----------
Interest expense:
Deposits ................................... 3,310 3,213
Borrowed funds ............................. 129 2
---------- ----------
Total interest expense ............. 3,439 3,215
---------- ----------
Net interest income ............................ 3,044 2,731
Provision for loan losses ...................... 68 14
---------- ----------
Net interest income after provision
for loan losses ................ 2,976 2,717
---------- ----------
Noninterest income:
Deposit account fees ....................... 119 111
Other service charges and fees ............. 71 63
Other ...................................... 8 8
---------- ----------
Total noninterest income ........... 198 182
---------- ----------
<PAGE>
<CAPTION>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Income
($ in thousands, except per share amounts)
(continued)
Three Months Ended
March 31,
--------------------------
1997 1996
---------- ----------
(unaudited)
<S> <C> <C>
Noninterest expense:
Salaries and employee benefits ............. 982 883
Occupancy expense .......................... 219 195
Deposit insurance premiums ................. 36 152
Advertising and promotion .................. 34 21
Data processing expense .................... 113 94
Professional services ...................... 60 59
Other ...................................... 187 159
---------- ----------
Total noninterest expense .......... 1,631 1,563
---------- ----------
Income before income taxes ..................... 1,543 1,336
Income taxes ................................... 570 525
---------- ----------
Net income ..................................... $ 973 811
========== ==========
Net income per share of common stock ........... $ .40 .31
========== ==========
Dividends per share of common stock ............ $ .12 .08
========== ==========
Weighted average number of shares outstanding .. 2,403,450 2,576,035
========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
Condensed Consolidated Statement of Stockholders' Equity
Three Months Ended March 31, 1997
($ in thousands, except per share amounts)
Unrealized Stock
Loss on Held by
Additional Securities Incentive Total
Common Paid-In Retained Available Treasury Plan Stockholders'
Stock Capital Income For Sale Stock Trusts Equity
----- ------- ------ -------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 ... $ 28 27,386 33,962 (193) (6,295) (1,262) 53,626
Net proceeds from the issuance
of 13,740 shares of common
stock (unaudited) ......... -- 137 -- -- -- -- 137
Net income (unaudited) ......... -- -- 973 -- -- -- 973
Dividends paid, net of $16 of
dividends on ESOP shares
recorded as compensation
expense (unaudited) ....... -- -- (275) -- -- -- (275)
Purchase of treasury stock,
109,615 shares (unaudited). -- -- -- -- (2,627) -- (2,627)
Shares committed to
participants in
incentive plans
(unaudited) ............... -- 107 -- -- -- 78 185
Change in unrealized
loss on securities
available for sale,
net of income
taxes of $76
(unaudited) ............... -- -- -- (127) -- -- (127)
------- ------- ------ ----- ------- ------ ------
Balance at March 31, 1997
(unaudited) .............. $ 28 27,630 34,660 (320) (8,922) (1,184) 51,892
======= ======= ======= ===== ======= ====== ======
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
Three Months Ended
March 31,
------------------
1997 1996
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income .......................................................... $ 973 811
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses ................................... 68 14
Depreciation ................................................ 93 81
(Credit) provision for deferred income taxes ................ (14) 43
Shares committed and dividends to incentive plan participants 201 245
Amortization of premiums or discounts
on investment and mortgage-backed securities ............ (15) (38)
Accretion of deferred loan fees and unearned income ......... 2 (6)
Deferral of net loan fees collected, net of costs deferred .. 48 35
Loss on sale of foreclosed real estate ...................... -- 2
(Increase) decrease in accrued interest receivable .......... (138) 68
Increase in other assets .................................... (144) (104)
Increase in accrued expenses and other liabilities .......... 1,413 649
-------- --------
Net cash provided by operating activities ........... 2,487 1,800
-------- --------
Cash flows from investing activities:
Proceeds from maturities of investment securities held to maturity .. 72 56
Proceeds from maturities of investment securities available for sale 3,304 2,853
Purchase of investment securities available for sale ................ (5,136) (5,789)
Principal repayments on mortgage-backed securities
held to maturity ................................................ 4,392 8,129
Purchase of mortgage-backed securities available for sale ........... -- (731)
Principal repayments on mortgage-backed securities
available for sale .............................................. 1,836 1,092
Loan disbursements .................................................. (26,306) (18,861)
Principal repayments on loans ....................................... 10,066 11,035
Purchase of premises and equipment, net ............................. (212) (401)
Purchase of Federal Home Loan Bank stock ............................ (365) (11)
Proceeds from sales of foreclosed real estate ....................... 2 13
-------- --------
Net cash used in investing activities ............... (12,347) (2,615)
-------- --------
<PAGE>
<CAPTION>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Cash Flows, Continued
($ in thousands)
Three Months Ended
March 31,
-----------------------
1997 1996
-------- --------
(unaudited)
<S> <C> <C>
Cash flows from financing activities:
Net increase in noninterest-bearing demand, savings, NOW
and money market accounts ................................ 2,153 1,083
Net increase in certificate accounts ......................... 6,600 2,242
Repayment of advances from Federal Home Loan Bank ............ (150) --
Net increase in securities sold under agreements to repurchase 3,904 --
Stock options exercised ...................................... 137 10
Purchase of treasury stock ................................... (2,627) --
Cash dividends paid .......................................... (291) (212)
-------- --------
Net cash provided by financing activities ........ 9,726 3,123
-------- --------
Net (decrease) increase in cash and cash equivalents ............. (134) 2,308
Cash and cash equivalents at beginning of period ................. 10,157 13,929
-------- --------
Cash and cash equivalents at end of period ....................... $ 10,023 16,237
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ................................................. $ 3,370 3,145
======== ========
Income taxes ............................................. $ -- 125
======== ========
Noncash investing and financing activities:
Increase in equity valuation allowance for
market value of investment and mortgage-backed
securities available for sale ........................ $ 127 118
======== ========
Transfer from loans to foreclosed real estate ............ $ 80 --
======== ========
Loans funded by and sold to correspondent ................ $ 187 1,218
======== ========
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
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, 1997 and the results of operations and cash
flows for the three-month periods ended March 31, 1997 and 1996. The
results of operations and other data for the three-month period ended March
31, 1997, are not necessarily indicative of results that may be expected
for the year ending December 31, 1997.
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.
The Company prepares a 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 of Financial Accounting Standards No. 114
and 118. No impaired loans were identified by the Company during the three
months ended March 31, 1997 or 1996.
An analysis of the change in the allowance for loan losses was as follows
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1997 1996
------- -------
<S> <C> <C>
Balance at January 1 ................... $ 1,063 977
Provision for loan losses .............. 68 14
Loans charged-off ...................... (8) (3)
------- -------
Balance at March 31 .................... $ 1,123 988
======= =======
</TABLE>
3. Impact of New Accounting Issues.
In June, 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS
No. 125"). That Statement provides accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of
liabilities. That Statement also provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers
that are secured borrowings. SFAS No. 125 is effective for transfers and
servicing of financial assets as well as extinguishments of liabilities
occurring in 1997. The adoption of SFAS No. 125 had no significant effect
on the Company's financial position at March 31, 1997 or result of
operations for the three months then ended.
<PAGE>
FFLC BANCORP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
4. Per Share Amounts.
Income 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 income per share
calculations. Common stock equivalents are computed using the treasury
stock method. The following table presents the calculation of income per
share:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1997 1996
---------- ----------
<S> <C> <C>
Weighted average shares of common stock issued and
outstanding before adjustments for ESOP, RRP and
common stock options ................................................ 2,413,260 2,639,284
Adjustment to reflect the effect of unallocated ESOP and
RRP shares .......................................................... (125,614) (160,909)
---------- ----------
Weighted average shares outstanding before adjustments
for common stock options ............................................ 2,287,646 2,478,375
Shares assumed outstanding to reflect the dilutive effect
of common stock options ............................................. 115,804 97,660
---------- ----------
Weighted average shares, including common stock equivalent
for primary income per share ........................................ 2,403,450 2,576,035
========== ==========
Primary income per share ............................................... $ .40 .31
========== ==========
Total weighted average common shares and equivalents
outstanding for primary income per share computation ................ 2,403,450 2,576,035
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 ................................ 5,039 --
---------- ----------
Weighted average common shares and equivalents outstanding for
fully diluted income per share ...................................... 2,408,489 2,576,035
========== ==========
Fully diluted income per share ......................................... $ .40 .31
========== ==========
</TABLE>
<PAGE>
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") (together
the "Company") 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 the first quarter of 1997, the Bank established a
commercial lending department staffed with three lenders experienced with
commercial lending in the Bank's local community. The focus of the
commercial lending department will be to originate commercial real estate
loans and commercial business loans, to include equipment, accounts
receivable and inventory 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 Federal Home Loan
Bank ("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 9 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 foreclosed real estate. The Savings Bank's operating expenses consist
primarily of employee compensation, occupancy expenses, deposit 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.
<PAGE>
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, 1997, cash, amounts due
from depository institutions and interest-bearing deposits, totaled $10.0
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
deposits and borrowed funds 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, 1997 were
13.2% and 3.4%, 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 primary sources of funds include proceeds from payments
and prepayments on loans and mortgage-backed securities, proceeds from
maturities of investment securities, and increases in deposits. While
maturities and scheduled amortization of loans, mortgage-backed and
investment securities are predictable sources of funds, deposit inflows and
mortgage and mortgage-backed securities prepayments are greatly influenced
by local conditions, general interest rates, and regulatory changes.
At March 31, 1997, the Savings Bank had outstanding commitments to originate
$7.4 million of loans and to fund the undisbursed portion of loans in
process of approximately $9.0 million. The Savings Bank believes that it
will have sufficient funds available to meet its commitments. At March 31,
1997, certificates of deposit which were scheduled to mature in one year or
less totaled $138.3 million. Management believes, based on past experience,
that a significant portion of those funds will remain with the Savings Bank.
The Savings Bank is subject to various regulatory capital requirement
administered by the federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory- and possibly additional
discretionary-actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Savings Bank must meet specific capital guidelines that involve
quantitative measures of the Savings Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Savings Bank's capital amounts and classification are also subject to
qualitative judgements by the regulators about components, risk weightings,
and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Savings Bank to maintain minimum amounts (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to
<PAGE>
FFLC BANCORP, INC.
risk-weighted assets (as defined). Management believes, as of March 31,
1997, that the Savings Bank meets all capital adequacy requirements to which
it is subject.
As of March 31, 1997, the most recent notification from the OTS categorized
the Savings Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Savings
Bank must maintain minimum tangible, Tier I (core), Tier I (risk-based) and
total risk-based capital ratios as set forth in the table. There are no
conditions or events since that notification that management believes have
changed the institution's category.
<PAGE>
FFLC BANCORP, INC.
The Savings Bank's actual capital amounts and ratios at March 31, 1997 are
also presented in the table.
<TABLE>
<CAPTION>
To Be Well
Minimum Capitalized
For Capital For Prompt
Adequacy Corrective Action
Actual Purposes Provisions
Ratio Amount Ratio Amount Ratio Amount
----- ------ ----- ------ ----- ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Stockholders' equity,
and ratio to total
assets 11.4% $ 40,894
Less: investment in
nonincludable
subsidiary (202)
Add back: unrealized loss on
available-for-sale
securities 232
Tangible capital,
and ratio to adjusted
total assets 11.4% $ 40,924 1.5% $ 5,380
======= ======
Tier 1 (core) capital, and
ratio to adjusted total
assets 11.4% $ 40,924 3.0% $ 10,760 5.0% $ 17,933
======= ====== ======
Tier 1 capital, and ratio
to risk-weighted assets 24.6% 40,924 4.0% $ 6,662 6.0% $ 9,994
====== ======
Tier 2 capital (allowance for
loan losses) 1,123
-------
Total risk-based capital,
and ratio to risk-
weighted assets 25.2% $ 42,047 8.0% $ 13,325 10.0% $ 16,656
======= ====== ======
Total assets $ 358,627
=======
Adjusted total assets $ 358,657
=======
Risk-weighted assets $ 166,559
=======
</TABLE>
<PAGE>
FFLC BANCORP, INC.
During the three months ended March 31, 1997, the Savings Bank declared and
paid a cash dividend of $1.8 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,
1997 1996 1996
---- ---- ----
<S> <C> <C> <C>
Average equity as a percentage
of average assets ........................ 15.02% 16.62% 17.03%
Total equity to total assets at end of period 14.47% 15.48% 16.97%
Return on average assets .................... 1.10% .65% .99%
Return on average equity .................... 7.35% 3.94% 5.82%
Noninterest expense to average assets ....... 1.85% 2.49% 1.91%
Nonperforming assets to total assets
at end of period ......................... .27% .30% .08%
Operating efficiency ratio .................. 50.31% 68.77% 53.66%
At At At
March 31, December 31, March 31,
1997 1996 1996
---- ---- ----
<S> <C> <C> <C>
Weighted average interest rates:
Interest-earning assets:
Loans receivable ......................... 8.19% 8.20% 8.24%
Mortgage-backed securities ............... 6.48% 6.45% 6.30%
Investment securities and other interest-
earning assets ......................... 6.15% 6.19% 5.84%
Total interest-earning assets ....... 7.65% 7.62% 7.40%
Interest-bearing liabilities:
Deposits ................................. 4.74% 4.72% 4.76%
Borrowed funds ........................... 5.66% 7.17% 7.17%
Total interest-bearing liabilities .. 4.77% 4.74% 4.76%
Interest-rate spread ........................ 2.88% 2.87% 2.64%
</TABLE>
Change in Financial Condition
Total assets increased $12.1 million or 3.5%, from $346.4 million at December
31, 1996 to $358.5 million at March 31, 1997, primarily as a result of an
increase in loans receivable of $16.0 million, partially offset by decrease
in mortgage-backed securities of $6.3 million. Customer deposits increased
$8.7 million from $282.7 million at December 31, 1996 to $291.4 million at
March 31, 1997. The $1.7 million net decrease in stockholders' equity during
the three months ended March 31, 1997 resulted from the repurchases of shares
<PAGE>
FFLC BANCORP, INC.
of the Company's stock of $2.6 million, dividends paid of $275,000, and a
$127,000 increase in unrealized loss on securities available for sale, net of
tax effect, all of which was partially offset by net income of $973,000,
credits to equity totaling $185,000 related to the stock incentive plans and
proceeds of $137,000 from stock options exercised.
<PAGE>
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 the
Company 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 income; (iv) interest-rate
spread; and (v) net interest margin.
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------------------------------
1997 1996
----------------------------- ------------------------------
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) $ 233,581 4,839 8.29% $ 186,327 3,941 8.46%
Mortgage-backed securities 63,178 1,008 6.38 90,518 1,418 6.27
Investment securities and other
interest-earning assets (2) 41,688 636 6.10 39,420 587 5.96
------- ----- ------- -----
Total interest-earning assets 338,447 6,483 7.66 316,265 5,946 7.52
----- -----
Noninterest-earning assets 14,259 11,250
------- -------
Total assets $ 352,706 $ 327,515
======= =======
Interest-bearing liabilities:
Deposits 285,352 3,310 4.64 268,346 3,213 4.79
Borrowed funds 9,272 129 5.56 150 2 5.33
-------- ------ -------- ------
Total interest-bearing liabilities 294,624 3,439 4.67 268,496 3,215 4.79
------ ------
Noninterest-bearing liabilities 5,118 3,236
Stockholders' equity 52,964 55,783
------- --------
Total liabilities and
stockholders' equity $ 352,706 $ 327,515
======= =======
Net interest income $ 3,044 $ 2,731
===== =====
Interest rate spread (3) 2.99% 2.73%
==== ====
Net average interest-earning assets,
net margin (4) $ 43,823 3.60% $ 47,769 3.45%
======= ==== ========= ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.15 1.18
==== ====
<PAGE>
(1) Includes nonaccrual loans.
(2) Includes interest-bearing deposits, and FHLB stock.
(3) Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(4) Net interest margin is net interest income divided by average
interest-earning assets.
</TABLE>
<PAGE>
FFLC BANCORP, INC.
Comparison of the Three-Month Periods Ended March 31, 1997 and 1996
Results of Operations
General Operating Results. Net income for the three-month period ended March 31,
1997 was $973,000, or $.40 per share, compared to $811,000, or $.31 per
share, for the 1996 period. The increase in net income resulted from an
increase in net interest income of $313,000, partially offset by an increase
in noninterest expense of $68,000 and an increase of $54,000 in the
provision for loan losses.
Interest Income. Interest income increased $537,000, or 9.0% from $5.9 million
for the three-month period ended March 31, 1996 to $6.5 million for the
three-month period ended March 31, 1997. The increase was due to a $22.2
million increase in average interest-earning assets outstanding during the
three-month period ended March 31, 1997, compared to the 1996 period, and a
14 basis point increase in the average yield on interest-earning assets from
7.52% for the three-month period ended March 31, 1996, to 7.66% for the
three-month period ended March 31, 1997.
Interest Expense. Interest expense increased $224,000 or 7.0%, from $3.2 million
for the three-month period ended March 31, 1996 to $3.4 million for the
three-month period ended March 31, 1997. The increase was due to a $26.1
million increase in average interest-bearing liabilities of $26.1 million
partially offset by a 13 basis point decrease in the weighted average rate
paid on interest-bearing liabilities from 4.79% during the 1996 period to
4.67% during the 1997 period.
Noninterest Expense. Noninterest expense increased by $68,000, or 4.4% from the
three-month period ended March 31, 1996 to the three-month period ended
March 31, 1997. The increase was primarily due to increases in salaries and
employee benefits of $99,000, other noninterest expenses of $28,000 and
occupancy expense of $24,000 related to the overall growth of the Company.
Those increases were partially offset by a $116,000 decrease in deposit
insurance premiums of $116,000 due to a decrease in the assessment rate on
deposits from 23.0 cents per $100 in 1996 to 6.48 cents per $100 in 1997.
Income Tax Provision. The income tax provision increased from $525,000 for the
three-month period ended March 31, 1996 (an effective tax rate of 39.3%) to
$570,000 (an effective tax rate of 36.9%) for the corresponding period in
1997.
<PAGE>
FFLC BANCORP, INC.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceeding 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. Exhibit 27 Financial Data Schedule (for SEC use only)
b. There were no reports on Form 8-K filed for the three months ended March
31, 1997.
<PAGE>
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: May 1, 1997 By: /s/ Stephen T. Kurtz
--------------------
Stephen T. Kurtz
President and Chief Executive
Officer
Date: May 1, 1997 By: /s/ Paul K. Mueller
-------------------
Paul K. Mueller
Executive Vice President, Chief
Operating Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,813
<INT-BEARING-DEPOSITS> 4,210
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 48,237
<INVESTMENTS-CARRYING> 45,675
<INVESTMENTS-MARKET> 46,122
<LOANS> 243,990
<ALLOWANCE> 1,123
<TOTAL-ASSETS> 358,538
<DEPOSITS> 291,417
<SHORT-TERM> 11,952
<LIABILITIES-OTHER> 3,277
<LONG-TERM> 0
0
0
<COMMON> 28
<OTHER-SE> 51,864
<TOTAL-LIABILITIES-AND-EQUITY> 358,538
<INTEREST-LOAN> 4,839
<INTEREST-INVEST> 1,644
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 6,483
<INTEREST-DEPOSIT> 3,310
<INTEREST-EXPENSE> 3,439
<INTEREST-INCOME-NET> 3,044
<LOAN-LOSSES> 68
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,631
<INCOME-PRETAX> 1,543
<INCOME-PRE-EXTRAORDINARY> 973
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 973
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
<YIELD-ACTUAL> 7.66
<LOANS-NON> 363
<LOANS-PAST> 164
<LOANS-TROUBLED> 439
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,063
<CHARGE-OFFS> (8)
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,123
<ALLOWANCE-DOMESTIC> 1,123
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
