SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
[ ] EXCHANGE ACT OF 1934
For the transition period from to
----------- -------------
Commission file 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 3,593,457 shares outstanding at
$.01 per share April 17, 2000
- ----------------------- -------------------------------
<PAGE>
FFLC BANCORP, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
at March 31, 2000 (unaudited) and at December 31, 1999..................2
Condensed Consolidated Statements of Income -
Three Months ended March 31, 2000 and 1999 (unaudited)..................3
Condensed Consolidated Statement of Changes in Stockholders' Equity -
Three Months ended March 31, 2000 (unaudited)...........................4
Condensed Consolidated Statements of Cash Flows -
Three Months ended March 31, 2000 and 1999 (unaudited)................5-6
Notes to Condensed Consolidated Financial Statements (unaudited)........7-8
Review by Independent Certified Public Accountants........................9
Report on Review by Independent Certified Public Accountants.............10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................11-16
Item 3. Quantitative and Qualitative Disclosures about Market Risk.........17
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................17
Item 2. Changes in Securities.............................................17
Item 3. Default upon Senior Securities....................................17
Item 5. Other Information.................................................17
Item 6. Exhibits and Reports on Form 8-K..................................17
SIGNATURES....................................................................18
<PAGE>
FFLC BANCORP, INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
($ in thousands, except share amounts)
<TABLE>
<CAPTION>
At At
March 31, December 31,
2000 1999
---- ----
Assets (unaudited)
<S> <C> <C>
Cash and due from banks $ 11,638 17,313
Interest-bearing deposits 6,218 17,026
-------- -------
Cash and cash equivalents 17,856 34,339
Securities available for sale 36,118 36,909
Loans receivable, net of allowance for loan losses of $2,980 in 2000
and $2,811 in 1999 533,976 501,131
Accrued interest receivable 3,041 2,815
Premises and equipment, net 10,256 9,386
Foreclosed real estate 462 400
Federal Home Loan Bank stock, at cost 4,675 4,950
Other assets 808 502
--------- --------
Total $ 607,192 590,432
======= =======
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits 14,451 11,100
NOW and money-market accounts 82,679 77,293
Savings accounts 21,359 21,110
Certificates 328,779 319,771
------- -------
Total deposits 447,268 429,274
Advances from Federal Home Loan Bank 93,500 99,000
Other borrowed funds 4,913 3,914
Accrued expenses and other liabilities 4,779 2,607
-------- --------
Total liabilities 550,460 534,795
------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
none outstanding - -
Common stock, $.01 par value, 9,000,000 shares authorized,
4,463,212 in 2000 and 4,447,461 in 1999 shares issued 45 44
Additional paid-in-capital 30,503 30,273
Retained income 44,425 43,539
Accumulated other comprehensive income (loss) (205) (182)
Treasury stock, at cost (869,313 shares in 2000 and
863,523 shares in 1999) (17,799) (17,721)
Stock held by Incentive Plan Trusts (237) (316)
--------- ---------
Total stockholders' equity 56,732 55,637
-------- -------
Total $ 607,192 590,432
======= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Income
($ in thousands, except share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Interest income:
Loans receivable $ 10,255 8,086
Securities available for sale 572 345
Securities held to maturity - 220
Other interest-earning assets 293 200
--------- ---------
Total interest income 11,120 8,851
-------- --------
Interest expense:
Deposits 4,965 3,940
Borrowed funds 1,430 808
----------- ---------
Total interest expense 6,395 4,748
----------- --------
Net interest income 4,725 4,103
Provision for loan losses 200 200
---------- ---------
Net interest income after provision for loan losses 4,525 3,903
--------- --------
Noninterest income:
Deposit account fees 171 146
Other service charges and fees 182 244
Gain on sale of real estate held for development - 886
Other 50 13
---------- ----------
Total noninterest income 403 1,289
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Noninterest expense:
Salaries and employee benefits 1,652 1,444
Occupancy expense 423 336
Deposit insurance premium 21 51
Data processing expense 224 140
Professional services 72 56
Advertising and promotion 76 78
Other 288 269
----------- -----------
Total noninterest expense 2,756 2,374
---------- ----------
Income before income taxes 2,172 2,818
Income taxes 855 1,084
----------- -----------
Net income $ 1,317 1,734
========== ===========
Basic income per share of common stock $ .37 .49
============ ============
Weighted-average number of shares outstanding for basic 3,539,918 3,571,598
========= =========
Diluted income per share of common stock $ .36 .47
============ ============
Weighted-average number of shares outstanding for diluted 3,627,734 3,720,042
========= =========
Dividends per share $ .12 .11
=========== =============
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
3
<PAGE>
FFLC BANCORP, INC.
Condensed Consolidated Statement of Changes in Stockholders' Equity
Three Months Ended March 31, 2000 (Unaudited)
($ in thousands)
<TABLE>
<CAPTION>
Accumulated
Stock Other
Held by Compre-
Additional Incentive hensive Total
Common Paid-In Treasury Plan Retained Income Stockholders'
Stock Capital Stock Trusts Income (Loss) Equity
----- ------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $ 44 30,273 (17,721) (316) 43,539 (182) 55,637
------
Comprehensive income:
Net income (unaudited) - - - - 1,317 - 1,317
Net change in unrealized loss
on securities available for
sale, net of income taxes
of $14 (unaudited) - - - - - (23) (23)
-------
Comprehensive income (unaudited) 1,294
------
Net proceeds from the issuance
of 12,047 shares of common
stock, stock options exercised
(unaudited) 1 77 - - - - 78
Net proceeds from the issuance
of 3,704 shares of common
stock under the Dividend
Reinvestment Plan (unaudited) - 49 - - - - 49
Dividends paid (unaudited) - - - (431) - (431)
Purchase of treasury stock,
5,790 shares (unaudited) - - (78) - - - (78)
Shares committed to participants
in incentive plans (unaudited) - 104 - 79 - - 183
---- ------ -------- ---- --------- ----- ------
Balance at March 31, 2000
(unaudited) $ 45 30,503 (17,799) (237) 44,425 (205) 56,732
== ====== ====== ==== ====== ===== ======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,317 1,734
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses 200 200
Depreciation 176 114
(Credit) provision for deferred income taxes (144) 146
Gain on sale of foreclosed real estate (21) (4)
Gain on sale of real estate held for development - (886)
Shares committed and dividends to incentive plan participants 183 220
Net amortization of premiums or discounts on securities 8 25
Net deferral of loan fees and costs (35) 76
Increase in accrued interest receivable (226) (231)
Increase in other assets (306) (206)
Increase in accrued expenses and other liabilities 2,330 465
------ -------
Net cash provided by operating activities 3,482 1,653
------ ------
Cash flows from investing activities:
Proceeds from maturities and principal repayments on securities
held to maturity - 2,088
Proceeds from maturities and principal repayments on securities
available for sale 877 922
Purchase of securities available for sale (131) (2,122)
Loan disbursements (51,286) (47,369)
Principal repayments on loans 18,179 20,230
Purchase of premises and equipment, net (1,046) (1,542)
Redemption (purchase) of Federal Home Loan Bank stock 275 (359)
Proceeds from sales of foreclosed real estate 56 11
Proceeds from sale of real estate held for development - 1,008
--------- --------
Net cash used in investing activities (33,076) (27,133)
------ ------
</TABLE>
(continued)
5
<PAGE>
FFLC BANCORP, INC.
Condensed Consolidated Statements of Cash Flows, Continued
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Cash flows from financing activities:
Net increase in deposits $ 17,994 20,775
Net (decrease) increase in advances from Federal Home Loan Bank (5,500) 7,000
Net increase in other borrowed funds 999 619
Issuance of common stock 127 191
Purchase of treasury stock (78) (272)
Dividends paid on common stock (431) (405)
-------- --------
Net cash provided by financing activities 13,111 27,908
-------- --------
Net (decrease) increase in cash and cash equivalents (16,483) 2,428
Cash and cash equivalents at beginning of period 34,339 22,928
-------- --------
Cash and cash equivalents at end of period $ 17,856 25,356
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 6,217 4,901
======== ========
Income taxes $ 25 105
======== ========
Noncash investing and financing activities:
Accumulated other comprehensive income (loss), net change in unrealized
loss on securities available for sale, net of tax $ (23) (15)
======== ========
Transfers from loans to foreclosed real estate $ 180 -
======== ========
Loans originated on sales of foreclosed real estate $ 83 153
======== ========
Loans funded by and sold to correspondent $ - 3,883
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
6
<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, 2000 and the results
of operations and cash flows for the three-month periods ended March 31,
2000 and 1999. The results of operations and other data for the
three-month period ended March 31, 2000, are not necessarily indicative
of results that may be expected for the year ending December 31, 2000.
The condensed consolidated financial statements include the accounts of
FFLC Bancorp, Inc. (the "Holding Company"), its wholly-owned subsidiary,
First Federal Savings Bank of Lake County (the "Bank") and the Bank's
wholly-owned subsidiary, Lake County Service Corporation (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 Nos. 114 and 118.
An analysis of the change in the allowance for loan losses was as
follows (in thousands):
Three Months Ended
March 31,
2000 1999
---- ----
Balance at January 1 $ 2,811 2,283
Provision for loan losses 200 200
Net loans charged-off (31) (84)
------- ------
Balance at March 31 $ 2,980 2,399
===== =====
The following summarizes the amount of impaired loans, all of which are
collateral dependent (in thousands):
<TABLE>
<CAPTION>
At
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Loans identified as impaired:
Gross loans with no related allowance for losses $ - -
Gross loans with related allowance for losses recorded 1,348 1,348
Less: Allowances on these loans (202) (202)
------ ------
Net investment in impaired loans $1,146 1,146
====== ======
</TABLE>
(continued)
7
<PAGE>
FFLC BANCORP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
2. Loan Impairment and Loan Losses, Continued. The average net investment
in impaired loans and interest income recognized and received on
impaired loans was as follows (in thousands):
Three
Months
Ended
March 31,
2000
Average net investment in impaired loans $ 1,146
=====
Interest income recognized on impaired loans $ 5
=======
Interest income received on impaired loans $ 5
=======
No impaired loans were identified by the Company during the three months
ended March 31, 1999.
3. Per Share Amounts. Basic 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. Dilutive income per
share is computed by dividing net income by the weighted-average number
of shares outstanding including the dilutive effect of stock options
computed using the treasury stock method. The following table presents
the calculation of basic and diluted income per share:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Weighted-average shares of common stock issued and
outstanding before adjustments for ESOP, RRP and
common stock options 3,590,530 3,674,817
Adjustment to reflect the effect of unallocated ESOP and
RRP shares (50,612) (103,219)
--------- ----------
Weighted-average shares for basic net income per share 3,539,918 3,571,598
========= =========
Basic income per share $ .37 .49
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Total weighted-average common shares and equivalents
outstanding for basic income per share computation 3,539,918 3,571,598
Additional dilutive shares using the average market value for
the period utilizing the treasury stock method regarding stock options 87,816 148,444
----------- ----------
Weighted-average common shares and equivalents outstanding for
diluted income per share 3,627,734 3,720,042
========= =========
Diluted income per share $ .36 .47
============= ============
</TABLE>
8
<PAGE>
FFLC BANCORP, INC.
Review by Independent Certified Public Accountants
Hacker, Johnson, Cohen & Grieb PA, the Company's independent certified public
accountants, have made a limited review of the financial data as of March 31,
2000, and for the three-month periods ended March 31, 2000 and 1999 presented in
this document, in accordance with standards established by the American
Institute of Certified Public Accountants.
Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.
9
<PAGE>
Report on Review by Independent Certified Public Accountants
The Board of Directors
FFLC Bancorp, Inc.
Leesburg, Florida:
We have reviewed the accompanying condensed consolidated balance sheet of
FFLC Bancorp, Inc. and Subsidiary (the "Company") as of March 31, 2000, and the
related condensed consolidated statements of income and cash flows for the
three-month periods ended March 31, 2000 and 1999, and the condensed
consolidated statement of changes in stockholders' equity for the three-month
period ended March 31, 2000. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1999, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the year then ended (not presented herein); and in our report
dated January 14, 2000 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
April 6, 2000
10
<PAGE>
FFLC BANCORP, INC.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
FFLC Bancorp, Inc. (the "Holding Company") is the holding company for
First Federal Savings Bank of Lake County (the "Bank") and its
wholly-owned subsidiary, Lake County Service Corporation (together, the
"Company"). The Company's consolidated results of operations are primarily
those of the Bank.
The 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, commercial loans, securities and, to a lesser
extent, construction loans, consumer and other loans, and multi-family
residential mortgage loans. In addition, the Bank holds investments
permitted by federal laws and regulations including securities issued by
the U.S. Government and agencies thereof. The Company's revenues are
derived principally from interest on its loan and mortgage-backed
securities portfolios and interest and dividends on its investment
securities. The 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 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 Bank has 12 full-service locations in Lake, Sumter and Citrus
Counties, Florida.
The Company's results of operations are dependent primarily on net
interest income, which is the difference between the interest income
earned primarily on its loan and securities portfolios, and its cost of
funds, consisting of the interest paid on its deposits and borrowings. The
Company's operating results are also affected, to a lesser extent, by fee
income. The Company's operating expenses consist primarily of salaries and
employee benefits, occupancy expenses, deposit insurance premiums and
other general and administrative expenses. The Company'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.
11
<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, 2000, cash, amounts due
from depository institutions and interest-bearing deposits, totaled $17.9
million.
The 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 4% 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. Monetary penalties may be imposed for failure to meet this
liquidity requirement. The Bank's liquidity ratio at March 31, 2000
exceeded the requirement.
The Bank's primary sources of funds include proceeds from payments and
prepayments on mortgage loans and mortgage-backed securities, proceeds
from maturities of investment securities, and increases in deposits. While
maturities and scheduled amortization of loans 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, 2000, the Bank had outstanding commitments to originate $11.4
million of loans and to fund the undisbursed portion of loans in process
of approximately $17.5 million and undisbursed lines of credit of
approximately $37.6 million. The Bank believes that it will have
sufficient funds available to meet its commitments. At March 31, 2000,
certificates of deposit which were scheduled to mature in one year or less
totaled $219.8 million. Management believes, based on past experience,
that a significant portion of those funds will remain with the Bank.
The 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 Bank must meet specific capital guidelines that
involve quantitative measures of the Bank's assets, liabilities, and
certain off-balance-sheet items as calculated under regulatory accounting
practices. The 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 Bank to maintain minimum amounts (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined). Management believes, as of March 31,
2000, that the Bank meets all capital adequacy requirements to which it is
subject.
12
<PAGE>
FFLC BANCORP, INC.
As of March 31, 2000, the most recent notification from the OTS
categorized the Bank as well capitalized under the regulatory framework
for prompt corrective action. To be categorized as well capitalized, the
Bank must maintain minimum tangible, Tier I (core), Tier I (risk-based)
and total risk-based capital percentages as set forth in the table. There
are no conditions or events since that notification that management
believes have changed the institution's category.
The Bank's actual capital amounts and percentages at March 31, 2000 are
also presented in the table.
<TABLE>
<CAPTION>
To Be Well
Minimum Capitalized
For Capital For Prompt
Adequacy Corrective Action
Actual Purposes Provisions
------------- ------------- --------------
% Amount % Amount % Amount
--- ------ --- ------ --- ------
($ in thousands)
<S> <C> <C> <C> <C> <C> <C>
Stockholders' equity,
and ratio to total
assets 8.87% $ 53,834
Less: investment in
nonincludable
subsidiary (1,219)
Add back: unrealized loss on
securities available for sale 52
---------
Tangible capital,
and ratio to adjusted
total assets 8.69% $ 52,667 1.5% $ 9,092
======= ======
Tier 1 (core) capital, and
ratio to adjusted total
assets 8.69% $ 52,667 3.0% $ 18,185 5.0% $ 30,307
======= ====== ======
Tier 1 capital, and ratio
to risk-weighted assets 13.69% 52,667 4.0% $ 15,391 6.0% $ 23,087
====== ======
Less: Nonincludable investment
in 80% land loans (95)
Tier 2 capital (allowance for
loan losses) 2,979
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Total risk-based capital,
and ratio to risk-
weighted assets 14.44% $ 55,551 8.0% $ 30,782 10.0% $ 38,478
======= ====== ======
Total assets $ 607,317
=======
Adjusted total assets $ 606,150
=======
Risk-weighted assets $ 384,777
=======
</TABLE>
13
<PAGE>
FFLC BANCORP, INC.
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,
2000 1999 1999
---------------- ---------------- ---------
<S> <C> <C> <C>
Average equity as a percentage
of average assets 9.42% 10.45% 11.43%
Total equity to total assets at end of period 9.34% 9.42% 11.06%
Return on average assets (1) (2) .88% .93% .99%
Return on average equity (1) (2) 9.38% 8.88% 8.67%
Noninterest expense to average assets (1) 1.85% 1.97% 1.99%
Nonperforming assets to total assets
at end of period .45% .47% .15%
Operating efficiency ratio (1) (2) 53.74% 54.73% 52.69%
</TABLE>
(1) Annualized for the three months ended March 31, 2000 and 1999.
(2) Excludes gain on sale of real estate held for development.
<TABLE>
<CAPTION>
At At At
March 31, December 31, March 31,
2000 1999 1999
---------------- ---------------- ---------
<S> <C> <C> <C>
Weighted-average interest rates:
Interest-earning assets:
Loans receivable 7.94% 7.88% 7.89%
Securities 6.36% 6.22% 6.14%
Other interest-earning assets 6.71% 5.03% 5.53%
Total interest-earning assets 7.82% 7.66% 7.66%
Interest-bearing liabilities:
Interest-bearing deposits 4.64% 4.53% 4.49%
Borrowed funds 5.99% 5.62% 5.16%
Total interest-bearing liabilities 4.88% 4.84% 4.59%
Interest-rate spread 2.94% 2.82% 3.07%
</TABLE>
Change in Financial Condition
Total assets increased $16.8 million or 2.8%, from $590.4 million at December
31, 1999 to $607.2 million at March 31, 2000, primarily as a result of an
increase in loans receivable of $32.8 million, partially offset by a decrease in
cash and cash equivalents of $16.5 million. Deposits increased $18.0 million
<PAGE>
from $429.3 million at December 31, 1999 to $447.3 million at March 31, 2000.
The $1.1 million net increase in stockholders equity during the three months
ended March 31, 2000 resulted from net income of $1.3 million, credits to equity
totaling $183,000 related to the stock incentive plans and proceeds of $127,000
from stock options exercised and shares issued under the Company's Dividend
Reinvestment Plan, partially offset by repurchases of the Company"s stock of
$78,000, dividends paid of $431,000 and a $23,000 decrease in accumulated other
comprehensive income (loss).
14
<PAGE>
FFLC BANCORP, INC.
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest income; (iv) interest-rate spread; and (v) net
interest margin. Yields and costs were derived by dividing income or expense by
the average balance of assets or liabilities, respectively, for the periods
shown. The average balance of loans receivable includes loans on which the
Company has discontinued accruing interest. The yields and costs include fees
which are considered to constitute adjustments to yields.
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------------------------------
2000 1999
---------------------------------------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
($ in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable $ 514,045 10,255 7.98% $ 401,630 8,086 8.05%
Securities 36,760 572 6.22 39,584 565 5.71
Other interest-earning assets (1) 19,072 293 6.15 15,192 200 5.27
-------- ------- -------- ------
Total interest-earning assets 569,877 11,120 7.81 456,406 8,851 7.76
------ -----
Noninterest-earning assets 26,719 19,980
------- -------
Total assets $ 596,596 $ 476,386
======= =======
Interest-bearing liabilities:
NOW and money-market accounts 78,572 524 2.67 57,761 331 2.29
Savings accounts 21,173 106 2.00 22,694 116 2.04
Certificates 323,591 4,335 5.36 264,163 3,493 5.29
Advances from Federal Home Loan Bank 93,236 1,385 5.94 61,444 798 5.19
Other borrowed funds 3,703 45 4.86 872 10 4.59
-------- ------- --------- ------
Total interest-bearing liabilities 520,275 6,395 4.92 406,934 4,748 4.67
Noninterest-bearing deposits 12,736 9,084
Noninterest-bearing liabilities 7,408 5,902
Stockholders' equity 56,177 54,466
------- -------
Total liabilities and stockholders' equity $ 596,596 $ 476,386
======= ------ ======= ------
Net interest income $ 4,725 $ 4,103
====== =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Interest-rate spread (2) 2.89% 3.09%
==== ====
Net average interest-earning assets, net margin (3) $ 49,602 3.32% $ 49,472 3.60%
======= ==== ======= ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.10 1.12
======== ========
</TABLE>
(1) Includes interest-bearing deposits, federal funds sold and Federal Home
Loan Bank 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 annualized net interest income divided by average
interest-earning assets.
15
<PAGE>
FFLC BANCORP, INC.
Comparison of the Three Months Ended March 31, 2000 and 1999
Results of Operations
General Operating Results. Net income for the three-month period ended March 31,
2000 was $1.3 million compared to $1.7 million for the comparable 1999
period. Net income for the 1999 period included a gain on sale of real estate
held for development of $886,000 ($553,000, net of tax). Without this gain,
net income for 2000 increased $136,000 or 11.5% when compared to 1999. An
increase in net interest income of $622,000, partially offset by a $382,000
increase in noninterest expense contributed to the increase in net income
excluding the gain.
Interest Income. Interest income increased $2.3 million, or 25.6%, from $8.9
million for the three-month period ended March 31, 1999 to $11.1 million for
the three-month period ended March 31, 2000. The increase was due to a $113.5
million increase in the average balance of interest-earning assets
outstanding during the three-month period ended March 31, 2000, compared to
the 1999 period and an increase in the average yield on interest-earning
assets from 7.76% for the three-month period ended March 31, 1999, to 7.81%
for the three-month period ended March 31, 2000.
Interest Expense. Interest expense increased $1.6 million or 34.7%, from $4.7
million for the three-month period ended March 31, 1999 to $6.4 million for
the three-month period ended March 31, 2000. The increase was due to
increases of $78.7 million and $34.6 million in average deposits and borrowed
funds outstanding, respectively. Average deposits increased from $344.6
million outstanding during the three months ended March 31, 1999 to $423.3
million outstanding during the comparable period for 2000. Average borrowed
funds increased from $62.3 million outstanding during the three months ended
March 31, 1999 to $96.9 million outstanding during the three months ended
March 31, 2000.
Noninterest Income. Noninterest income for the three-month period ended March
31, 1999 exceeded noninterest income for the three-month period ended March
31, 2000 mainly due to the gain on sale of real estate held for development
recognized during 1999.
Noninterest Expense. Noninterest expense increased by $382,000, or 16.1% from
the three-month period ended March 31, 1999 to the three-month period ended
March 31, 2000. The increase was primarily due to increases in salaries and
employee benefits of $208,000, occupancy expense of $87,000 and data
processing expense of $84,000 related to the overall growth of the Company.
Income Tax Provision. The income tax provision decreased from $1.1 million (an
effective tax rate of 38.5%) for the three-month period ended March 31, 1999
to $855,000 (an effective tax rate of 39.4%) for the corresponding period in
2000.
Year 2000 Issues
The Company's operating and financial systems have been found to be compliant;
the "Y2K Problem" has not adversely affected the Company's operations nor does
management expect that it will.
16
<PAGE>
FFLC BANCORP, INC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss from adverse changes in market prices and rates.
The Company"s market risk arises primarily from interest rate risk inherent in
its lending and deposit taking activities. The Company has little or no risk
related to trading accounts, commodities or foreign exchange.
Management actively monitors and manages its interest rate risk exposure. The
primary objective in managing interest-rate risk is to limit, within established
guidelines, the adverse impact of changes in interest rates on the Company"s net
interest income and capital, while adjusting the Company"s asset-liability
structure to obtain the maximum yield-cost spread on that structure. Management
relies primarily on its asset-liability structure to control interest rate risk.
However, a sudden and substantial increase in interest rates could adversely
impact the Company"s earnings, to the extent that the interest rates borne by
assets and liabilities do not change at the same speed, to the same extent, or
on the same basis. There has been no significant change in the Company"s market
risk exposure since December 31, 1999.
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 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report.
3.1 Certificate of Incorporation of FFLC Bancorp, Inc.*
3.2 Bylaws of FFLC Bancorp, Inc. ***
4.0 Stock Certificate of FFLC Bancorp, Inc.*
10.1 First Federal Savings Bank of Lake County Recognition
and Retention Plan**
10.2 First Federal Savings Bank of Lake County Recognition
and Retention Plan for Outside Directors**
10.3 FFLC Bancorp, Inc. Incentive Stock Option Plans for
Officers and Employees**
10.4 FFLC Bancorp, Inc. Stock Option Plan for Outside
Directors**
27 Financial Data Schedule (for SEC use only)
<PAGE>
* Incorporated herein by reference into this document from the Exhibits
to Form S-1, Registration Statement, initially filed on September 27,
1993, Registration No. 33-69466.
** Incorporated herein by reference into this document from the Proxy
Statement for the Annual Meeting of Stockholders held on May 12, 1994.
*** Incorporated herein by reference into this document from the 1999 FFLC
Bancorp, Inc. Form 10-K filed March 22, 2000.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the three months
ended March 31, 2000.
17
<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: April 19, 2000 By:
---------------- ---------------------------------------------------
Stephen T. Kurtz, President and Chief Executive
Officer
Date: April 19, 2000 By:
---------------- ---------------------------------------------------
Paul K. Mueller, Executive Vice President and
Treasurer
18
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> MAR-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 11,638
<INT-BEARING-DEPOSITS> 6,218
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 36,118
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 536,956
<ALLOWANCE> 2,980
<TOTAL-ASSETS> 607,192
<DEPOSITS> 447,268
<SHORT-TERM> 4,913
<LIABILITIES-OTHER> 4,779
<LONG-TERM> 93,500
0
0
<COMMON> 45
<OTHER-SE> 56,687
<TOTAL-LIABILITIES-AND-EQUITY> 607,192
<INTEREST-LOAN> 10,255
<INTEREST-INVEST> 572
<INTEREST-OTHER> 293
<INTEREST-TOTAL> 11,120
<INTEREST-DEPOSIT> 4,965
<INTEREST-EXPENSE> 6,395
<INTEREST-INCOME-NET> 4,725
<LOAN-LOSSES> 200
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,756
<INCOME-PRETAX> 2,172
<INCOME-PRE-EXTRAORDINARY> 1,317
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,317
<EPS-BASIC> .37
<EPS-DILUTED> .36
<YIELD-ACTUAL> 3.32
<LOANS-NON> 2,250
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,811
<CHARGE-OFFS> 31
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 2,980
<ALLOWANCE-DOMESTIC> 2,980
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
