<PAGE>
<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
MARK ONE
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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: 0-24194
-------
HARBOR FEDERAL BANCORP, INC.
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1860591
- ----------------------- -----------------
(State of incorporation) (I.R.S. Employer
Identification No.)
705 York Road, Baltimore, Maryland 21204-2562
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(410) 321-7041
--------------
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 ninety days. Yes X No
------ -------
As of September 30, 1997, 1,693,420 shares of the
registrant's Common Stock, par value $0.01 per share, were issued
and outstanding.
Transitional small business disclosure format (check one):
YES NO X
------- ------<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
Baltimore, Maryland
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
Consolidated Statements of Financial Condition
-- As of September 30, 1997 (Unaudited) and
March 31, 1997
Consolidated Statements of Income -- (Unaudited)
for the three months period ended June 30, 1997
and 1996
Consolidated Statements of Cash Flows --
(Unaudited) for the six and three months ended
September 30, 1997 and 1996
Notes to (Unaudited) Consolidated Financial
Statements
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. Defaults 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
--------------------------------
2<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
3<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
September 30, March 31,
1997 1997
------------ ------------
Assets (Unaudited)
- ------
<S> <C> <C>
Cash:
On hand and due from banks $ 1,953,543 1,482,872
Interest-bearing deposits 176,490 275,962
Federal funds sold 1,935,705 3,939,419
Investment securities, fair value of $44,004,036
and $46,968,577, respectively 44,115,853 47,543,418
Mortgage-backed securities, fair value of
$12,842,397 and $14,251,452, respectively 12,675,178 14,161,239
Loans receivable, net 149,487,372 144,701,746
Investment in Federal Home Loan Bank stock,
at cost 1,366,000 1,366,000
Investment in real estate, net 67,795 465,136
Investment in and advances to affiliated
corporation 2,925,000 2,775,000
Property and equipment , net 1,888,920 1,938,699
Prepaid expenses and other assets 610,538 812,693
------------ -----------
Total assets $217,202,394 219,462,184
============ ===========
Liabilities and Stockholders' Equity
- ------------------------------------
Liabilities:
Savings accounts $171,727,075 171,466,629
Borrowed funds 14,723,000 16,500,000
Advance payments by borrowers for taxes,
insurance and ground rents 580,169 1,902,414
Accrued expenses and other liabilities 1,777,776 1,296,861
Federal and state income taxes payable 37,658 71,501
------------ -----------
Total liabilities 188,845,678 191,237,405
============ ===========
Stockholders' Equity:
Preferred stock $0.01 par value;
authorized 5,000,000 shares;
none issued -- --
Common stock $0.01 par value; authorized
20,000,000 shares; 1,693,420 and
1,754,420 shares issued and outstanding 16,934 17,544
Additional paid-in capital 12,738,375 13,611,599
Unearned ESOP shares (1,136,840) (1,136,840)
Retained income, substantially restricted 16,509,052 16,068,969
Unrealized holding gain (loss) on securities
available for sale, net 229,195 (336,493)
------------ -----------
Total stockholders' equity 28,356,716 28,224,779
------------ -----------
Total liabilities and stockholders'
equity $217,202,394 219,462,184
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
September 30, September 30,
---------------- ------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $5,796,882 4,893,551 2,926,626 2,556,117
Mortgage-backed securities 485,798 640,834 237,744 317,701
Investment securities 1,597,358 1,712,417 771,080 858,343
Interest-earning deposits and other
short-term investments 155,768 153,826 80,071 76,751
---------- ---------- ---------- ----------
Total interest income 8,035,806 7,400,628 4,015,521 3,808,912
---------- ---------- ---------- ----------
Interest expense:
Savings accounts:
Certificates 3,318,440 3,108,888 1,660,743 1,556,220
NOW and money market deposit accounts 504,020 539,584 254,284 272,624
Passbook and statement savings 514,076 535,367 256,842 265,543
---------- ---------- ---------- ----------
4,336,536 4,183,839 2,171,869 2,094,387
Borrowed funds 449,176 327,292 216,256 246,304
---------- ---------- ---------- ----------
Total interest expense 4,785,712 4,511,131 2,388,125 2,340,691
---------- ---------- ---------- ----------
Net interest income 3,250,094 2,889,497 1,627,396 1,468,221
Provision for losses on loans 40,000 32,605 10,000 32,605
---------- ---------- ---------- ----------
Net interest income after provision
for losses on loans 3,210,094 2,856,892 1,617,396 1,435,616
---------- ---------- ---------- ----------
Noninterest income:
Loan fees and service charges 71,727 33,102 53,274 17,104
Other 85,988 113,368 42,477 54,589
---------- ---------- ---------- ----------
Total noninterest income 157,715 146,470 95,751 71,693
---------- ---------- ---------- ----------
Noninterest expense:
Compensation and benefits 1,337,160 1,153,756 690,818 573,326
Occupancy and equipment 224,912 217,740 115,944 113,437
SAIF deposit insurance premiums 45,208 951,276 22,497 879,002
Advertising 48,958 80,257 28,113 29,596
Other 383,123 314,561 185,779 146,131
---------- ---------- ---------- ----------
Total noninterest expense 2,039,361 2,717,590 1,043,151 1,741,492
---------- ---------- ---------- ----------
Income (loss) before income taxes 1,328,448 285,772 669,996 (234,183)
Income tax provision (benefit) 513,113 110,350 258,763 (90,450)
---------- ---------- ---------- ----------
Net income (loss) $ 815,335 175,422 411,233 (143,733)
========== ========== ========== ==========
Net income (loss) per share of common stock
Primary $ .50 .11 .25 (.09)
========== ========== ========== ==========
Fully-diluted $ .50 .11 .25 (.09)
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
5<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
---------------------
1997 1996
------- -------
<S> <C> <C>
Cash flows from operating activities
Net income $ 815,335 175,422
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 67,650 73,780
Provision for losses on loans 40,000 32,605
Amortization of premium on savings deposits 190,692 190,692
Non-cash compensation under stock-based benefit
plans (141,100) (17,664)
Loans originated for sale, net of repayments (3,215,734) --
Amortization of loan fees, premiums and
discounts, net (80,362) (24,475)
Increase in prepaid expenses and other assets (154,265) (354,167)
Increase in accrued expenses and other liabilities 722,882 1,704,919
Decrease in federal and state income taxes payable (33,843) (55,554)
Increase in accrued interest receivable 20,778 54,335
Decrease in accrued interest payable (37,967) (149,653)
---------- ----------
Net cash provided by (used in) operating activities (1,805,934) 1,630,240
---------- ----------
Cash flows from investing activities:
Maturities of investment securities available for
sale 1,000,000 --
Maturities of investment securities held to maturity 3,090,909 --
Purchase of investment securities available for sale -- (1,000,000)
Purchase of mortgage-backed securities available for
sale -- (4,996,875)
Sale of mortgage-backed securities available for sale -- 3,538,099
Mortgage-backed securities held to maturity principal
repayments 1,145,971 1,731,462
Mortgage-backed securities available for sale
principal repayments 493,684 723,974
Decrease (increase) in investment in real estate 397,341 (7,675)
Loan principal disbursements, net of repayments (438,226) (14,448,464)
Loan purchases (1,006,911) (6,071,021)
Purchases of property and equipment, net (17,871) (88,336)
Increase in investments in and advances to affiliated
corporation, net (150,000) --
---------- ----------
Net cash provided by (used in) investing
activities 4,514,897 (20,618,836)
---------- ----------
(Continued)
/TABLE
<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
---------------------
1997 1996
------- -------
<S> <C> <C>
Cash flows from financing activities:
Net increase in savings deposits 69,754 13,707
Repayment of borrowed funds (6,500,000) (5,500,000)
Increase in borrowed funds 4,723,000 22,415,000
Decrease in advance payments by borrowers
for taxes, insurance and ground rents (1,322,245) (1,105,468)
Purchases of stock for stock option trust -- (8,987)
Stock repurchases (965,687) --
Exercise of stock options by stock option trust 28,952 --
Dividends paid (375,252) (526,326)
---------- ----------
Net cash provided by (used in) financing
activities (4,341,478) 15,287,926
---------- ----------
Net decrease in cash and cash equivalents (1,632,515) (3,700,670)
Cash and cash equivalents at beginning of period 5,698,253 6,249,221
---------- ----------
Cash and cash equivalents at end of period $4,065,738 2,548,551
========== ==========
Supplemental information -- noncash investing activities:
Unrealized holding gain on securities available
for sale, net of income tax effect $ 565,688 149,535
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
7<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Six Months Ended September 30, 1997
(Unaudited)
Note 1 -- Business. The accompanying unaudited consolidated
financial statements include the accounts of Harbor Federal
Bancorp, Inc. (the "Company") and wholly-owned subsidiaries,
including Harbor Federal Savings Bank ("Harbor Federal").
Harbor Federal provides a full range of banking services to
individual and corporate customers through its subsidiaries and
branch banks in Maryland. Harbor Federal is subject to
competition from other financial institutions. Harbor Federal
is subject to the regulations of certain federal agencies and
undergoes periodic examinations by those regulatory authorities.
Note 2 -- Basis of Presentation. The accompanying unaudited
consolidated financial statements were prepared in accordance
with instructions for Form 10-QSB and, therefore, do not include
information or footnotes necessary for a complete presentation
of financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles.
However, all adjustments, consisting of normal recurring
adjustments, which in the opinion of management, are necessary
for a fair presentation of the consolidated financial statements
at and for the six and three months ended September 30, 1997
have been recorded.
In preparing the financial statements, management is required to
make estimates and assumptions that affect the reported amounts
of assets and liabilities as of the date of the statement of
financial condition and revenues and expenses for the period.
The results of operations for the six and three months ended
September 30, 1997 are not necessarily indicative of the results
that may be expected for the entire year ending March 31, 1998.
Actual results could differ significantly from those estimates.
Note 3 -- Principles of Consolidation. The accompanying
unaudited consolidated financial statements include the
accounts of the Company and Harbor Federal, and its wholly owned
subsidiaries, Harbor Service Corporation and Bank Street
Mortgage, Inc.. All significant intercompany items have been
eliminated.
Note 4 -- Retained Income. Harbor Federal is required to
maintain certain levels of regulatory capital. At September
30, 1997, Harbor Federal was in compliance with all regulatory
capital requirements. In addition to these requirements,
since the conversion Harbor Federal must maintain sufficient
capital for the "liquidation account" for the benefit of
eligible account holders. In the event of a complete
liquidation of Harbor Federal, eligible depositors would have an
interest in the account.
Note 5 -- Earnings per Common Share. Primary and fully-diluted
net income per share for the six and three months ended
September 30, 1997 have been computed based on the weighted
average number of shares of common stock and common stock
equivalents outstanding of 1,620,556 shares and 1,629,358 shares
for six months and 1,619,410 shares and 1,625,025 shares for the
three months, respectively.
Note 6 -- Investment Securities. Investment securities
available for sale included in investment securities have a book
and fair market value of $22,256,560 at September 30, 1997 and
$22,519,150 at March 31, 1997 and related accrued interest of
$153,722 at September 30, 1997 and $171,221 at March 31, 1997.
Note 7 -- Mortgage-Backed Securities. Mortgage-backed
securities available for sale included in mortgage-backed
securities have a book and fair market value of $7,759,633 at
September 30, 1997 and $8,088,949 at March 31, 1997 and related
accrued interest of $67,131 at September 30, 1997 and $49,821 at
March 31, 1997.
8<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion analyzes the financial condition
of the Company at September 30, 1997 and the results of
operations of the Company for the six and three months ended
September 30, 1997 and 1996.
FINANCIAL CONDITION
- -------------------
Harbor Federal's total assets decreased by $2.3 million or
1.0% to $217.2 million at September 30, 1997 from $219.5 million
at March 31, 1997. The decrease in total assets resulted from
reduction in federal funds sold of $2.0 million or 50.9% to $1.9
million at September 30, 1997 from $3.9 million at March 31,
1997. These funds were used to reduce borrowed funds by $1.8
million or 10.8% to $14.7 million at September 30, 1997 from
$16.5 million at March 31, 1997.
Loans receivable, net increased by $4.8 million or 3.3% to
$149.5 million at September 30, 1997 from $144.7 million at
March 31, 1997. This increase was due in part to a greater
demand for loans during this period. The increase was funded in
part by a reduction in investment securities of $3.4 million or
7.2% to $44.1 million at September 30, 1997 from $47.5 million
at March 31,1997 and a reduction in mortgage-backed securities
of $1.5 million or 10.5% to $12.7 million at September 30, 1997
from $14.2 million at March 31, 1997.
RESULTS OF OPERATIONS
- ---------------------
The earnings of Harbor Federal depend primarily on its level
of net interest income, which is the difference between interest
earned on Harbor Federal's interest-earning assets, consisting
primarily of mortgage loans, mortgage-backed securities,
interest-bearing deposits at other institutions, investment
securities and other investments, and the interest paid on
interest-bearing liabilities consisting primarily of savings
accounts. Net income for the six and three months ended
September 30, 1997 increased $640,000 and $555,000
respectively.
The increase was primarily due to the reduction in the SAIF
deposit insurance premium. A one time assessment for
recapitalization of the SAIF was recorded during the six and
three months ended September 30, 1996. This one time assessment
amounted to $806,000 and reduced after tax earnings by $495,000
for both the six and three months ended September 30, 1996.
Interest Income. Total interest income for the six months
ended September 30, 1997 increased by $635,000 or 8.6% to $8.0
million from $7.4 million for the same period in 1996. Total
interest income for the three months ended September 30, 1997
increased by $207,000 or 5.4% to $4.0 million from $3.8 million
for the same period in 1996. The increases in interest income
resulted from a $12.5 million or 6.1% and $9.4 million or 4.6%
increase in average interest-earning assets for the six and
three months ended September 30, 1997 as compared to the same
periods in 1996 and by an increase in the average yield on
Harbor Federal's average interest-earning assets to 7.55% and
7.58% for the six and three months ended September 30, 1997
from 7.39% and 7.52% for the six and three months ended
September 30, 1996.
<PAGE>
Interest on loans for the six months ended September 30,
1997 increased $903,000 or 18.5% as compared to the same period
in 1996. Interest on loans for the three months ended September
30, 1997 increased $371,000 or 14.5% as compared to the same
period in 1996. The increases were due primarily to increases
in average loans receivable of $19.3 million or 15.1% and $17.0
million or 12.9% for the six and three months ended September
30, 1997, respectively, as compared to the same periods in 1996.
The increase in average loans receivables was primarily due to
increased loan production over normal repayments.
9<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Interest on mortgage-backed securities for the six and
three months ended September 30,1 997 decreased by $155,000 or
24.2% and $80,000 or 25.2% respectively, as compared to the same
periods in 1996. The decreases were the result of decreases in
the average mortgage-backed securities of $4.4 million or 24.8%
and $4.4 million or 25.3% for the six and three months ended
September 30, 1997, respectively, as compared to the same
periods in 1996. The decreases in average mortgage-backed
securities were due to normal repayments.
Interest on investment securities for the six and three
months ended September 30, 1997 decreased by $115,000
or 6.7% and $87,000 or 10.2%, respectively, as compared to the
same periods in 1996. The decreases were due primarily to
decreases in the average investment securities of $3.9 million
or 7.8% and $4.9 million or 9.8% for the six and three months
ended September 30, 1997, respectively, as compared to the same
periods in 1996. The decreases in average investment securities
were due to maturities of several investment securities.
Interest Expense. Total interest expense for the six and
three months ended September 30, 1997 increased by $274,000 or
6.1% and $47,000 or 2.0% to $4.8 million and $2.4 million from
$4.5 million and $2.3 million for the same periods in 1996. The
increases were primarily attributable to increases in the
weighted average balance of deposits and borrowings for the six
and three months ended September 30 1997 of $13.7 million or
7.9% and $8.5 million or 4.8%, respectively, over the same
periods in 1996, partially offset by a reduction in the weighted
average cost of Harbor Federal's deposits and borrowings of
5.14% and 5.15%, respectively, for the six and three months
ended September 30,1997 from 5.23% and 5.29%, respectively, for
the same periods in 1996.
Net Interest Income. Net interest income for the six and
three months ended September 30, 1997 increased by $361,000 or
12.5% and $159,000 or 10.8% to $3.3 million and $1.6 million
from $2.9 million and $1.5 million for the same periods in 1996.
The principal reason for the increases in net interest income
was an increase in Harbor Federal's net interest margin to 3.05%
and 3.07% for the six and three months ended September 30. 1997,
respectively, from 2.89% and 2.90% for the six and three months
ended September 30, 1996, respectively.
Provision for Loan Losses. The Company maintains an
allowance for loan losses based on management's review and
classification of the loan portfolio and analyses of borrowers'
ability to pay, past collection experience, risk characteristics
of individual loans or groups of similar loans and underlying
collateral, current and prospective economic conditions, status
of non-performing loans and regulatory reviews conducted in the
regulatory examination process. There were provisions of
$40,000 and $10,000 for loan losses during the six and three
months ended September 30, 1997 as compared to $32,600 and
$32,600 during the same periods in 1996. Based on the results
of managements' review and analyses, it was concluded that the
level of the allowance for losses on loans was adequate at
September 30, 1997.
Noninterest Income. Noninterest income for the six and
three months ended September 30, 1997 increased by $11,000 or
7.7% and $24,000 or 33.6% to $158,000 and $96,000 from $146,000
and $72,000 for the same periods in 1996. The increase for the
six and three months ended September 30, 1997 was due primarily
to an increase in loan fees and service charges.
<PAGE>
Noninterest Expense. Noninterest expense for the six and
three months ended September 30, 1997 decreased by $678,000 or
25.0% and $698,000 or 40.1% to $2.0 million and $1.0 million
from $2.7 million and $1.7 million for the same periods in 1996.
As mentioned earlier in the results of operations the reduction
was due primarily to the one time SAIF assessment in the prior
year. This reduction was partially offset by an increase in
compensation and benefits which was due primarily to the cost
relating to our mortgage subsidiary, Bank Street Mortgage, Inc.,
which began operations in June 1997.
10<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Harbor Federal is required to maintain minimum levels of
liquid assets as defined by OTS regulations. This
requirement, which varies from time to time depending upon
economic conditions and deposit flows, is based upon a
percentage of deposits and short-term borrowings. The required
ratio currently is 5.0%. Harbor Federal's liquidity ratio
averaged 6.92% and 6.24% for the six and three months ended
September 30, 1997. Harbor Federal adjusts its liquidity
levels in order to meet funding needs of deposit outflows,
payment of real estate taxes on mortgage loans, repayment
of borrowings and loan commitments. Harbor Federal also adjusts
liquidity as appropriate to meet its asset and liability
management objectives.
The Company's primary sources of funds are deposits,
amortization and prepayment of loans and mortgage-backed
securities, maturities of investment securities and other
investments and earnings and funds provided from operations and
borrowings. While scheduled principal repayments on loans and
mortgage-backed securities are a relatively predictable source
of funds, deposit flows and loan prepayments are greatly
influenced by general interest rates, economic conditions, and
competition. The Company manages the pricing of its deposits to
maintain a desired deposit balance. In addition, the Company
invests in short-term interest-earning assets, which provide
liquidity to meet lending requirements.
During the six months ended September 30, 1997, Harbor
Federal's cash and cash equivalents (cash and short-term
investments with maturities less than 90 days) decreased by $1.6
million.
The Company had $1.2 million in outstanding loan
commitments at September 30, 1997. Harbor Federal expects to
fund its loan origination's through principal and interest
payments on loans and mortgage-backed securities, proceeds from
investment and other securities as maturities occur, and to the
extent necessary, borrowed funds. Management expects that funds
provided from these sources will be adequate to meet the
Company's needs.
NEW ACCOUNTING STANDARDS
- ------------------------
Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities. In June 1996 the FASB
issued SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities". SFAS No.
125 is effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after December 31,
1996 and is to be applied prospectively. This Statement will
require, among other things, that the Company record at fair
value, assets and liabilities resulting from a transfer of
financial assets. In December 1996, SFAS No. 127 was issued
which deferred the effective date of certain provisions of SFAS
No. 125 related to repurchase agreements, securities lending and
similar transactions until January 1, 1998. The Company adopted
the provisions of SFAS No. 125 as of January 1, 1997, and the
adoption did not have a material effect on the Company's
reported financial condition or results of operations.
<PAGE>
Earnings per Share. In February 1997, the FASB issued SFAS
No. 128, "Earnings per Share", which is effective for the
financial statements issued for periods ending after December
15, 1997. SFAS No. 128 establishes standards for computing and
presenting earnings per share ("EPS") and replaces the
presentation of primary EPS with a presentation of basic EPS.
It requires dual presentation of basic and diluted EPS on the
face of the consolidated statement of income and the
reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. Earlier application is not permitted but
disclosure of pro forma EPS amounts computed using the standards
established by SFAS No. 128 is permitted in the notes to
financial statements for periods ending prior to the effective
date.
11<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time Harbor Federal is a party to various
legal proceedings incident to its business. At
September 30, 1997, there were no legal proceedings to
which the Company, Harbor Federal or its subsidiary
was a party, or to which any of their property was
subject, which were expected by management to result
in a material loss.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On July 16, 1997, the registrant held its annual
meeting of stockholders. At the meeting, the
following directors were elected by the stockholders
to serve for three year terms:
<TABLE>
<CAPTION>
Vote
----------------------- Broker
For Withheld Abstentions Non-Votes
--- -------- ----------- ---------
<S> <C> <C> <C> <C>
Joseph J. Lacy 1,420,933 1.600 -- --
John H. Riehl, III 1,421,133 1.400 -- --
Lawrence W. Williams 1,421,133 1.400 -- --
</TABLE>
Item 5. Other Information
-----------------
None
12<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
PART II. OTHER INFORMATION - continued
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) List of Exhibits
* 3.1 Articles of Incorporation of Harbor Federal
Bancorp, Inc.
* 3.2 Bylaws of Harbor Federal Bancorp, Inc.
* 4 Form of Common Stock Certificate of Harbor
Federal Bancorp, Inc.
** 10.1 Employment Agreements between Harbor Federal
Bancorp, Inc. and Harbor Federal Savings
Bank and Robert A. Williams, as amended
** 10.2 Severance Agreements between Harbor Federal
Bancorp, Inc. and Harbor Federal Savings
Bank and Norbert J. Luken and Lawrence W.
Williams
** 10.3 Harbor Federal Savings Bank Non-Employee
Director Retirement Plan
* 10.4 Harbor Federal Savings Bank Deferred
Compensation Plan
* 10.5 Harbor Federal Savings Bank Supplemental
Executive Retirement Agreement
* 10.6 Harbor Federal Bancorp, Inc. Employee Stock
Ownership Plan, as amended
* 10.7 Harbor Federal Bancorp, Inc. Incentive
Compensation Plan, as amended
27 Financial Data Schedule
* Incorporated by reference to Registration Statement on
Form S-1, No. 33-75624.
** Incorporated by reference to Quarterly Report on Form
10-QSB for Quarter Period ended June 30, 1994.
(b) Form 8-K
None
13<PAGE>
<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.
Date: November 7, 1997 By /s/ Robert A. Williams
-----------------------------
Robert A. Williams
President
(Duly Authorized Representative)
Date: November 7, 1997 By /s/ Norbert J. Luken
-----------------------------
Norbert J. Luken
Treasurer
(Principal Financial Officer)
14
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<PERIOD-END> SEP-30-1997
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