SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-23370
PERMANENT BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 35-1908797
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or Origination) Identification No.)
101 Southeast Third Street, Evansville Indiana 47708
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (812) 428-6800
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 [ ]
As of August 1, 1997, there were 2,100,520 shares of the Registrant's Common
Stock outstanding.
<PAGE>
PERMANENT BANCORP, INC. AND SUBSIDIARY
FORM 10-Q
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Statements of Financial Condition
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Supplemental Data
Regulatory Developments
PART II. OTHER INFORMATION
Signatures
<PAGE>
<TABLE>
<CAPTION>
PERMANENT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
JUNE 30, 1997 MARCH 31, 1997
------------- -------------
<S> <C> <C>
ASSETS:
Cash .................................................................... $ 1,259,511 $ 3,211,091
Interest-bearing deposits ............................................... 1,431,337 3,153,385
------------ ------------
Total cash and cash equivalents ......................................... 2,690,848 6,364,476
Securities available for sale - at fair value (amortized cost $87,847,535
and $87,020,254) ..................................................... 86,934,874 85,180,313
Mortgage-backed securities available for sale at fair value (amortized
cost $81,993,498 and $74,846,178) .................................... 81,784,771 74,052,253
Securities held to maturity (fair value $25,000 and $25,000) ............ 25,000 25,000
Mortgage-backed securities held to maturity (fair value $26,210,508
and $27,197,070) ..................................................... 25,992,279 27,180,891
Other Investments ....................................................... 1,177,922 1,056,036
Loans (net of allowance for loan losses of $2,144,900 and $2,126,225) ... 214,399,547 210,189,422
Interest receivable, net ................................................ 3,188,188 3,539,085
Office properties and equipment, net .................................... 7,966,635 6,968,587
Real estate owned, net .................................................. 44,156 40,653
Deferred income tax ..................................................... 769,623 1,374,109
Federal Home Loan Bank stock ............................................ 5,414,000 5,192,600
Cash surrender value of life insurance .................................. 1,571,265 1,552,875
Goodwill (net of accumulated amortization of $1,782,328 and $1,741,967) . 579,588 326,198
Other ................................................................... 700,384 655,833
------------ ------------
TOTAL ASSETS ................................................................ $433,239,080 $423,698,331
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Deposits ................................................................ $283,736,880 $280,753,353
Federal Home Loan Bank advances ......................................... 103,570,650 98,483,986
Advance payments by borrowers for taxes and insurance ................... 510,038 1,014,598
Other borrowed funds .................................................... 2,153,621 1,793,967
Interest payable ........................................................ 2,378,684 2,049,727
Other ................................................................... 1,193,011 508,073
------------ ------------
TOTAL LIABILITIES ........................................................... $393,542,884 $384,603,704
------------ ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERMANENT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(continued)
JUNE 30, 1997 MARCH 31, 1997
------------- -------------
<S> <C> <C>
STOCKHOLDERS' EQUITY
Serial Preferred Stock ($.01 par value) Authorized and unissued -
1,000,000 shares
Common Stock ($.01 par value) Authorized - 9,000,000 shares; Issued -
2,458,982 shares; Outstanding - 2,010,506 and 2,052,075 shares ...... $ 24,590 $ 24,590
Additional paid-in capital ............................................. 24,122,863 24,045,413
Treasury Stock - 359,462 and 317,893 shares ............................ (6,479,106) (5,547,823)
Retained Earnings - substantially restricted ........................... 23,848,444 23,393,701
Unrealized loss on securities available for sale, net of deferred tax of
$(427,443) and $(1,043,275) ......................................... (664,704) (1,590,591)
ESOP Borrowing ......................................................... (892,688) (952,200)
Unearned compensation - restricted stock awards ........................ (263,203) (278,463)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY ................................................. $ 39,696,196 $ 39,094,627
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................. $ 433,239,080 $ 423,698,331
============= =============
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERMANENT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
JUNE 30,
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
INTEREST INCOME:
Loans ............................................... $ 4,287,820 $ 4,117,639
Mortgage-backed securities .......................... 1,659,951 1,526,338
Investment securities ............................... 1,586,688 1,479,355
Deposits ............................................ 17,473 19,801
Dividends on Federal Home Loan Bank stock ........... 101,905 82,984
----------- -----------
7,653,837 7,226,117
----------- -----------
INTEREST EXPENSE:
Deposits ............................................ 3,404,019 3,337,990
Federal Home Loan Bank advances ..................... 1,417,928 1,228,240
Short-term borrowings ............................... 28,951 5,152
----------- -----------
4,850,898 4,571,382
----------- -----------
NET INTEREST INCOME ..................................... 2,802,939 2,654,735
PROVISION FOR LOAN LOSSES ............................... 77,386 60,000
----------- -----------
NET INTEREST INCOME AFTER LOAN LOSS
PROVISION ........................................... 2,725,553 2,594,735
----------- -----------
OTHER INCOME:
Service charges ..................................... 226,811 204,767
Gain on sale of loans ............................... 19,371 2,997
Net gain (loss) on real estate owned ................ 13,241 $ (2,829)
Commissions ......................................... 127,686 95,313
Gain (loss) on sale of investment and mortgage-backed
securities ......................................... 6,269 (5,835)
Other ............................................... 103,657 56,741
----------- -----------
497,035 351,154
----------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERMANENT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(continued)
THREE MONTHS ENDED
JUNE 30,
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
OTHER EXPENSE:
Salaries and employee benefits ...................... 1,122,767 1,025,563
Deposit insurance assessments ....................... 68,956 181,991
Occupancy ........................................... 198,577 193,247
Equipment ........................................... 163,472 159,511
Computer service .................................... 125,083 130,111
Advertising ......................................... 88,914 85,200
Postage and office supplies ......................... 78,247 52,877
Other ............................................... 277,422 206,186
----------- -----------
2,123,438 2,034,686
----------- -----------
INCOME BEFORE INCOME TAXES .............................. 1,099,150 911,203
INCOME TAX PROVISION .................................... 461,228 406,800
----------- -----------
NET INCOME .............................................. $ 637,922 $ 504,403
=========== ===========
EARNINGS PER SHARE OF COMMON STOCK
Primary ............................................. $ 0.30 $ 0.23
Fully Diluted ....................................... $ 0.30 $ 0.23
WEIGHTED AVERAGE SHARES OUTSTANDING
Primary ............................................. 2,129,810 2,205,513
Fully diluted ....................................... 2,133,141 2,208,612
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERMANENT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED JUNE 30,
------------------------------
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................. $ 637,922 $ 504,403
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation ................................... 133,007 121,965
Deposit premium purchased ...................... (293,751)
Amortization and accretion .................... 135,066 174,219
Vesting of restricted stock awards ............. 4,760
Provisions for loan and real estate owned losses 18,675 14,103
(Gain) on sale of securities ................... (7,770) (11,624)
Loss on sale of mortgage-backed securities ..... 2,412
(Gain) on sale of loans ........................ (19,371) (2,997)
ESOP shares earned ............................. 80,020 36,453
Changes in assets and liabilities:
Proceeds from the sales of loans ................... 619,431 222,982
Origination of loans for resale .................... (600,060) (219,985)
Other investments .................................. (121,885)
Interest receivable ................................ 350,897 (282,862)
Deferred income tax ................................ (3,532) (317,998)
Other assets ....................................... (44,552) (189,230)
Interest payable ................................... 328,957 49,107
Other liabilities .................................. 684,938 652,058
----------- -----------
Net cash provided by operating activities .............. 1,902,752 753,006
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated ....................................... (17,814,339) (17,776,343)
Loan principal repayments .............................. 15,732,151 19,443,018
Proceeds from:
Maturities of:
Securities available for sale .................. 1,000,000 5,000,000
Sales of:
Securities available for sale .................. 10,961,520 5,528,233
Mortgage-backed securities available for sale .. 3,572,360
Purchases of:
Securities available for sale .................. (11,825,781) (29,988,750)
Mortgage-backed securities available for sale .. (9,634,234) (1,014,099)
Loans .......................................... (3,204,199) (3,695,083)
FHLB Stock ..................................... (221,400) (1,427,100)
Office properties, equipment and land .......... (1,131,056) (198,029)
Payments on mortgage-backed securities ................. 3,704,484 4,780,729
Increase in cash surrender value of life insurance ..... (18,390) (10,743)
Payments on real estate owned .......................... (3,503) 8,439
----------- -----------
Net cash used in investing activities .................. (12,454,747) (15,777,368)
----------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERMANENT BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(continued)
THREE MONTHS ENDED JUNE 30,
------------------------------
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid ...................................... $ (157,113) $ (111,852)
Net change in deposits .............................. 2,983,527 (6,155,983)
Receipts from FHLB advances ......................... 71,150,000 41,000,000
Payments on FHLB advances ........................... (66,063,336) (18,702,256)
Principal repayment of ESOP borrowing ............... 59,513 59,512
Advance payments by borrowers for taxes and insurance (504,560) (268,026)
Net change in other borrowed funds .................. 359,654 (1,767)
Purchase of treasury stock .......................... (993,628)
Sale of common stock ............................... 44,310 10,983
------------ ------------
Net cash provided by financing activities ........... 6,878,367 15,830,611
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS ............. (3,673,628) 806,249
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ........ 6,364,476 4,916,421
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .............. 2,690,848 5,722,670
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest ........................................ $ 3,094,621 $ 3,334,841
Income taxes .................................... 100,000 80,000
See notes to consolidated financial statements.
</TABLE>
<PAGE>
PERMANENT BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION - The consolidated financial statements include the
accounts of Permanent Bancorp, Inc. (the "Company"), its wholly owned
subsidiary, Permanent Federal Savings Bank, its wholly owned subsidiary,
Perma-Service Corp, and its wholly owned subsidiary, Permanent Insurance Agency,
Inc. (collectively the "Bank"). All significant intercompany accounts and
transactions have been eliminated. These consolidated interim financial
statements at June 30, 1997 and for the three month periods ended June 30, 1997,
and 1996, have not been examined by independent auditors, but reflect, in the
opinion of the Company's management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position and
results of operations for such periods.
These statements should be read in conjunction with the consolidated financial
statements and related notes which are incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended March 31, 1997.
2. CHANGES IN PRESENTATION - Certain amounts and items appearing in the
financial statements for the quarter ended June 30,1996 have been reclassified
to conform with the presentation presented for the period ended June 30, 1997.
3. FINANCIAL ACCOUNTING STANDARDS NO. 128 (FAS 128) "EARNINGS PER SHARE" - FAS
128 applies to financial statements for public companies for periods ending
after December 15, 1997. Accordingly, the Company will adopt FAS 128 in the
third quarter of fiscal 1998. This statement establishes new accounting
standards for the calculation of basic earnings per share as well as diluted
earnings per share.
The Company's basic and diluted earnings per share calculated in accordance with
FAS 128 for the periods ended June 30, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1997 1996
---- ----
<S> <C> <C>
Basic .32 .24
Diluted .30 .23
</TABLE>
The difference between basic and diluted earnings per share represents the
dilutive impact of the Company's outstanding stock options.
4. FINANCIAL ACCOUNTING STANDARDS NO. 130 (FAS 130) "ACCOUNTING FOR
COMPREHENSIVE INCOME" - FAS 130 requires that changes in the amounts of certain
items, including foreign currency translation adjustments and gains and losses
on certain securities be shown in the financial statements. FAS 130 does not
require a specific format for the financial statement in which comprehensive
income is reported, but does require that an amount representing total
comprehensive income be reported in that statement. FAS 130 is effective for
fiscal years beginning after December 15, 1997. FAS 130 will receive
reclassification of earlier financial statements for comparative purposes.
Management has not yet determined the effect, if any, of FAS 130 on the
consolidated financial statements.
<PAGE>
5. FINANCIAL ACCOUNTING STANDARDS NO. 131 (FAS 131) "DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION" - FAS 131 changes the way public
companies report information about segments of their business in their annual
financial statements and requires them to report selected segment information in
their quarterly reports issued to shareholders. It also requires entity-wide
disclosures about the products and services an entity provides, the material
countries in which it holds assets and reports revenues, and its major
customers. FAS 131 is effective for fiscal years beginning after December 15,
1997. Management has not yet determined the effect, if any, of FAS 131 on the
consolidated financial statements.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Permanent Bancorp, Inc. (the "Company") is a bank holding company which owns
100% of the capital stock of Permanent Federal Savings Bank (the "Bank") and has
no other subsidiaries. Material changes in the consolidated statements of
Financial Condition and Results of Operations of the Company, except where
noted, are attributed to the operations of the Bank; therefore the following
analysis is centered on the activities of the Bank.
QUARTER ENDED JUNE 30, 1997 COMPARED TO JUNE 30, 1996
NET INTEREST INCOME - Net interest income before provision for loan losses
increased by $148,000 or 5.6% for the quarter ended June 30, 1997 compared to
the quarter ended June 30, 1996. This increase was primarily attributable to an
increase in the average balances of interest earning assets.
Net interest income after provision for loan losses increased by $131,000, or
5.0% for the quarter ended June 30, 1997 compared to the quarter ended June 30,
1996. The increase was smaller than the increase in net interest income before
provision for loan losses because of an increase in the loss provision
reflecting actual and anticipated loan growth.
INTEREST INCOME - Total interest income for the three months ended June 30, 1997
increased $428,000, or 5.9%, from the three month period ended June 30, 1996.
This increase was attributable to an increase of $22.1 million in average
balances for the comparable periods.
INTEREST EXPENSE - Total interest expense increased by $280,000, or 6.1%, during
the three months ended June 30, 1997 compared to the three months ended June 30,
1996. Average interest bearing liabilities increased by $27.9 million, but the
cost of such liabilities decreased by 8 basis points, compared to the quarter
ended June 30, 1996.
OTHER INCOME - Total other income increased by $146,000 during the quarter ended
June 30, 1997 compared to the quarter ended June 30, 1996. Service charges were
$22,000 more and commissions were $32,000 more during the quarter ended June 30,
1997 than during the comparable quarter in 1996. During the quarter ended June
30, 1997 the Company earned profits on sales of loans of $19,000 compared to
$3,000 during the quarter ended June 30, 1996 and recognized profits of $6,000
on sales of investment and mortgage-backed securities compared to losses of
$6,000 during the quarter ended June 30, 1996. The Company recognized net gains
on real estate owned of $13,000 during the current year quarter compared to net
losses of $3,000 during the previous years quarter. The remaining other income
accounts increased $47,000 during the current year quarter.
OTHER EXPENSE - Other expense increased a total of $89,000 during the quarter
ended June 30, 1997 compared to the quarter ended June 30, 1996. Salaries and
employee benefits increased by $97,000 during the quarter ended June 30, 1997
compared to the same period in 1996, with $44,000 of the increase being higher
expense recognition on the Company's employee stock ownership plan due to
increased market value of Company stock. Occupancy expenses increased by $5,000
and equipment and computer expenses decreased by $1,000 during the comparable
periods. Deposit insurance assessments were $113,000 lower during the quarter
ended June 30, 1997, due to the recapitalization of the Federal Deposit
Insurance Corporation Savings Association Insurance Fund while advertising
<PAGE>
expenditures were $4,000 higher than during the quarter ended June 30, 1996.
Postage and office supplies were $25,000 higher during the quarter ended June
30, 1997. The remaining other expense categories were $71,000 higher during the
quarter ended June 30, 1997 than during the quarter ended June 30, 1996, with
the most significant change being an increase of $16,000 in legal expense.
INCOME TAXES - Provisions for income taxes amounted to $461,000, or 41.9% of
income before taxes during the quarter ended June 30, 1997, compared to
$407,000, or 44.6% of income before taxes during the quarter ended June 30,
1996.
FINANCIAL CONDITION JUNE 30, 1997 COMPARED TO MARCH 31, 1997
The Company's total assets at June 30, 1997 were $433.2 million representing an
increase of $9.5 million, or 2.3%, from March 31, 1997. Investment and
mortgage-backed securities, including those classified as available for sale,
increased by $8.3 million to $194.7 million at June 30, 1997 from $186.4 million
at March 31, 1997. Net loans increased by $4.2 million to $214.4 million at June
30, 1997 compared to $210.2 million at March 31, 1996.
During May, 1997 the Bank assumed the $5.7 million deposit liabilities and
purchased the building and certain other assets of a branch of First Chicago/NBD
Corp. located in Bell Oaks Shopping Center in Newburgh, Indiana. This Branch is
located in what is widely considered the prime banking and commercial area of
Newburgh, an upscale and rapidly growing community immediately east of
Evansville. On September 19, 1997, the Bank's existing Newburgh Branch at
Stonegate Square, will be closed and the accounts transferred to the new
location.
The loan growth occurred in single family mortgage loans, commercial loans and
through the purchase of commercial paper. Consumer loans decreased by $2.1
million during the quarter. By policy, the Bank retains all adjustable rate
loans and all fixed rate loans with terms of 20 year or less in its portfolio,
and sells all fixed rate loans of terms exceeding 20 years.
Non-performing assets were at $4.7 million at June 30, 1997, and at March 31,
1997, compared to $6.9 million at June 30, 1996. As of June 30, 1997, the Bank's
loan loss allowance was $2,107,538. Although no assurance can be provided,
management believes this amount to be sufficient based upon historical averages
and current trends. Based on management's analysis of classified assets, loss
histories and future projections, the allowance for loan losses (presented below
in tabular form) was deemed by management to be adequate at June 30, 1997.
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Balance, April 1 ..................... $ 2,126,225 $ 2,237,804
Provision for loan losses ............ 77,386 60,000
Net charge offs ...................... (58,711) (45,897)
----------- -----------
Balance, June 30 ..................... $ 2,144,900 $ 2,251,907
</TABLE>
<PAGE>
The loan growth and the increase in investment and mortgage-backed securities
was funded through Federal Home Loan Bank advances which increased by $5.1
million to $103.6 million at June 30, 1997 compared to $98.5 million at March
31, 1997, and deposits which increased by $2.9 million to $283.7 million at June
30, 1997 compared to $280.8 million at March 31, 1997.
Total stockholders' equity increased by $600,000 to $39.7 million at June 30,
1997 from $39.1 million at March 31, 1997. The increase was attributable to a
decrease of $926,000 in unrealized losses on securities available for sale,
retention of earnings, reduction of Employee Stock Ownership Plan liability,
vesting of restricted stock awards and through the exercise of stock options.
Decreases in stockholders' equity resulted from the repurchase of stock and the
payment of dividends.
LIQUIDITY AND CAPITAL RESOURCES - The standard measure of liquidity for the
thrift industry is the ratio of cash and eligible investments to a certain
percentage of borrowings due within one year and net withdrawable deposit
accounts. The minimum required level is currently set by OTS regulation at 5%.
At June 30, 1997, the Bank's liquidity ratio was 11.44%. Historically, the Bank
has maintained its liquid assets which qualify for purposes of the OTS liquidity
regulations above the minimum requirements imposed by such regulations and at a
level believed adequate to meet requirements of normal daily activities,
repayment of maturing debt, and potential deposit outflows. Cash flow
projections are regularly reviewed and updated to assure that adequate liquidity
is maintained. Cash for these purposes is generated through the maturity of
investment securities and loan sales and repayments, and may be generated
through increases in deposits. Loan payments are a relatively stable source of
funds while deposit flows are influenced significantly by the level of interest
rates and general money market conditions. Borrowings may be used to compensate
for reductions in other sources of funds such as deposits. As a member of the
FHLB system, the Bank may borrow from the FHLB of Indianapolis. At June 30,
1997, the Bank had $103.6 million in such borrowings. As of that date, the Bank
had commitments to fund loan origination's and purchase investment securities of
approximately $7.4 million. In the opinion of management, the Bank has
sufficient cash flow and borrowing capacity to meet current and anticipated
funding commitments.
<PAGE>
The following table sets forth the Bank's compliance with its capital
requirements at June 30, 1997.
<TABLE>
<CAPTION>
Amount Percent (*)
----------- -----
<S> <C> <C>
Tangible Capital:
Capital level .................... $35,258,815 8.20%
Requirement ...................... 6,450,915 1.50%
----------- -----
Excess ........................... $28,807,900 6.70%
----------- -----
Core Capital:
Capital level .................... $35,550,118 8.26%
Requirement ...................... 12,910,570 3.00%
----------- -----
Excess ........................... $22,639,548 5.26%
----------- -----
Risk-Based Capital:
Capital level .................... $37,334,872 20.57%
Requirement ...................... 14,518,452 8.00%
----------- -----
Excess ........................... $22,816,420 12.57%
----------- -----
</TABLE>
(*) Tangible capital is computed as a percentage at adjusted total assets of
$430,061,027. Core capital is computed as a percentage of adjusted total assets
of $430,352,330. Risk-based capital is computed as a percentage of risk-weighted
assets of $181,480,649.
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL DATA
Three Months Ended
June 30,
------------------
1997 1996
---- ----
<S> <C> <C>
Weighted average interest rate earned on
total interest-earning assets ........................ 7.46% 7.52%
Weighted average cost of total
interest-bearing liabilities ......................... 5.04% 5.12%
Interest rate spread during period ..................... 2.42% 2.40%
Net yield on interest-earning assets
(net interest income divided by average
interest-earning assets on annualized basis) ......... 2.73% 2.76%
Total interest income divided by average
total assets (on annualized basis) ................... 7.15% 7.16%
Total interest expense divided by
average total assets (on annualized basis) ........... 4.53% 4.53%
Net interest income divided by average
total assets (on annualized basis) ................... 2.62% 2.63%
Return on assets (net income divided by
average total assets on annualized basis) ............ 0.60% 0.50%
Return on equity (net income divided by
average total equity on annualized basis) ............ 6.48% 4.94%
Interest rate spread at end of period .................. 2.38% 2.44%
<CAPTION>
Data as of
June 30, March 31,
1997 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
NONPERFORMING ASSETS:
Loans: Non-accrual .............................. $2,483 $2,463
Restructured ............................ 2,118 2,128
------ ------
Total nonperforming loans ........................ $4,601 $4,591
Real estate owned, net ........................... 44 41
Other repossessed assets, net .................... 77 58
------ ------
Total Nonperforming Assets ......................... $4,722 $4,690
Nonperforming assets divided by total assets ....... 1.09% 1.11%
Nonperforming loans divided by total loans ......... 2.14% 2.18%
Balance in Allowance for Loan Losses ............... $2,145 $2,126
</TABLE>
<PAGE>
REGULATORY DEVELOPMENTS
Legislation Regarding Bad Debt Reserves - Under Section 593 of the Internal
Revenue Code of 1986, as amended (the "Code"), thrift institutions such as the
Bank, which meet certain definitional tests primarily relating to their assets
and the nature of their business, were permitted to establish a tax reserve for
bad debts and to make annual additions thereto, which additions could, within
specified limitations, be deducted in arriving at their taxable income. The
Company's deduction with respect to "qualifying loans", which are generally
loans secured by certain interests in real property, could previously be
computed using an amount based on the Company's loss experience (the "experience
method"), or a percentage equal to 8.0% of the Company's taxable income (the
"percentage of taxable income method"), computed without regard to this
deduction and with additional modifications and reduced by the amount of any
permitted addition to the non-qualifying reserve.
Under recently passed legislation, Section 593 of the Internal Revenue Code of
1986 has been repealed and the Bank will be permitted to use only the experience
method of computing additions to its bad debt reserve. In addition, the Bank
will be unable to make additions to its tax bad debt reserve, and will be
permitted to deduct bad debts only as they occur. The legislation will affect
the Company's tax calculation during the current fiscal year. Management can not
now predict the impact of the legislation on the results of operations in the
current or future fiscal years.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
A Form 8-K was filed on April 15, 1997, with the Securities
and Exchange Commission, regarding a press release dated April
15, 1997, announcing the date of the registrant's annual
meeting and the record date for voting purposes.
A Form 8-K was filed on April 30, 1997, with the Securities
and Exchange Commission, regarding changes to the registrant's
bylaws and a press release dated April 28, 1997 announcing the
adoption of a bylaw amendment concerning director
qualifications and an extension of time period for
shareholders to submit nominations for directors for the July
22, 1997 Annual Meeting of Shareholders to June 17, 1997 and a
press release dated April 28, 1997 announcing a bylaw
amendment increasing the number of directors from nine to ten
and the appointment of Murray J. Brown as director to fill the
newly created directorship.
A Form 8-K was filed on May 27, 1997, with the Securities and
Exchange Commission, regarding a press release dated May 19,
1997, announcing the completion of its assumption of deposit
liabilities and its acquisition of certain assets associated
with the branch of NBD Bank, N.A. in Newburgh, Indiana.
A Form 8-K was filed on May 29, 1997, with the Securities and
Exchange Commission, regarding a press release dated May 22,
1997, announcing an increase in dividends to $.10 per share
for the quarter ending June 30, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PERMANENT BANCORP, INC.
DATE: AUGUST 13, 1997 By /s/ Donald P. Weinzapfel,
-------------------------
Donald P. Weinzapfel,
Chairman of the Board
President and Chief Executive Officer
(Principal Executive Officer)
DATE: AUGUST 13, 1997 By /s/ Joseph M. Schnapf
Joseph M. Schnapf
Chief Financial Officer
(Principal Financial Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY
REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED JUNE 30, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 1,259,511
<INT-BEARING-DEPOSITS> 1,431,337
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 168,719,645
<INVESTMENTS-CARRYING> 26,017,279
<INVESTMENTS-MARKET> 26,235,508
<LOANS> 216,544,447
<ALLOWANCE> 2,144,900
<TOTAL-ASSETS> 433,239,080
<DEPOSITS> 283,736,880
<SHORT-TERM> 80,353,621
<LIABILITIES-OTHER> 4,081,733
<LONG-TERM> 25,378,320
24,590
0
<COMMON> 0
<OTHER-SE> 39,671,606
<TOTAL-LIABILITIES-AND-EQUITY> 433,239,080
<INTEREST-LOAN> 4,287,820
<INTEREST-INVEST> 3,246,639
<INTEREST-OTHER> 119,378
<INTEREST-TOTAL> 7,653,837
<INTEREST-DEPOSIT> 3,404,019
<INTEREST-EXPENSE> 4,850,898
<INTEREST-INCOME-NET> 2,802,939
<LOAN-LOSSES> 77,386
<SECURITIES-GAINS> 6,269
<EXPENSE-OTHER> 2,123,438
<INCOME-PRETAX> 1,099,150
<INCOME-PRE-EXTRAORDINARY> 637,922
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 637,922
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 7.46
<LOANS-NON> 2,483,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 2,118,000
<LOANS-PROBLEM> 235,560
<ALLOWANCE-OPEN> 2,126,225
<CHARGE-OFFS> 77,386
<RECOVERIES> 58,711
<ALLOWANCE-CLOSE> 2,144,900
<ALLOWANCE-DOMESTIC> 355,146
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,789,754
</TABLE>
