<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 June 30, 1998
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 or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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 June 30, 1998, 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 June 30, 1998 (Unaudited) and March 31, 1998
Consolidated Statements of Income -- (Unaudited)
for the three months ended June 30, 1998 and 1997
Consolidated Statements of Cash Flows -- (Unaudited)
for the three months ended June 30, 1998 and 1997
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 and Use of Proceeds
-----------------------------------------
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>
June 30, March 31,
Assets 1998 1997
------ -------- --------
(Unaudited)
<S> <C> <C>
Cash:
On hand and due from banks $ 1,925,033 2,752,630
Interest-bearing deposits 40,563 173,728
Federal funds sold 8,069,266 313,047
Investment securities, fair value of $48,677,524
and $51,779,610, respectively 48,686,233 51,826,542
Mortgage-backed securities, fair value of
$19,468,746 and $21,324,796, respectively 19,317,824 21,159,954
Loans receivable, net 150,794,392 147,901,019
Investment in Federal Home Loan Bank stock, at cost 1,433,500 1,433,500
Investment in and advances to affiliated Corporation 2,825,000 2,850,000
Property and equipment, net 1,812,706 1,820,909
Prepaid expenses and other assets 828,820 908,861
------------ ------------
Total assets $235,733,337 231,140,190
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Savings accounts $178,032,425 172,902,844
Borrowed funds 23,310,000 25,266,250
Advance payments by borrowers for taxes,
insurance and ground rents 2,712,874 1,935,804
Accrued expenses and other liabilities 1,634,124 1,560,098
Federal and state income taxes payable 345,103 152,384
------------ ------------
Total liabilities 206,034,526 201,817,380
------------ ------------
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 shares issued and outstanding 16,934 16,934
Additional paid-in capital 13,044,881 13,069,233
Unearned ESOP shares (912,830) (912,830)
Retained income, substantially restricted 17,213,930 16,939,169
Accumulated comprehensive income 335,896 210,304
------------ ------------
Total stockholders' equity 29,698,811 29,322,810
------------ ------------
Total liabilities and stockholders' equity $235,733,337 231,140,190
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------
1998 1997
-------- --------
<S> <C> <C>
Interest income:
Loans receivable $2,969,164 2,870,256
Mortgage-backed securities 356,964 248,054
Investment securities 911,969 826,278
Interest-earning deposits and other short-term
investments 81,252 75,697
---------- ----------
Total interest income 4,319,349 4,020,285
---------- ----------
Interest expense:
Savings accounts:
Certificates 1,784,829 1,657,697
NOW and money market deposit accounts 231,031 249,736
Passbook and statement savings 243,559 257,234
---------- ----------
2,259,419 2,164,667
Borrowed funds:
Federal Home Loan Bank Advances 127,653 --
Securities sold under agreements to repurchase 200,810 223,920
---------- ----------
328,463 223,920
Total interest expense 2,587,882 2,397,587
---------- ----------
Net interest income 1,731,467 1,622,698
Provisions for losses on loans 10,000 30,000
---------- ----------
Net interest income after provision for losses
on loans 1,721,467 1,592,698
---------- ----------
Noninterest income:
Loan fees and service charges 90,768 18,453
Other 34,390 43,511
---------- ----------
Total noninterest income 125,158 61,964
---------- ----------
Noninterest expense:
Compensation and benefits 660,030 646,342
Occupancy and equipment 106,072 108,968
SAIF deposit insurance premiums 23,104 22,711
Advertising 35,633 20,845
Other 197,130 197,344
---------- ----------
Total noninterest expense 1,021,969 996,210
---------- ----------
Income before income taxes 824,656 658,452
Income taxes 329,750 254,350
---------- ----------
Net income 494,906 404,102
Other comprehensive income, net of tax:
Unrealized holding gain on securities available
for sale arising during the period 125,592 376,543
---------- ----------
Comprehensive income $ 620,498 780,645
========== ==========
<PAGE>
Net income per share of common stock (Note 5):
Basic (1) $ .28 .24
---------- ----------
Diluted (1) $ .27 .23
---------- ----------
</TABLE>
(1) Amounts have been stated for the effect of a 10% stock
dividend declared on July 15, 1998
See accompanying notes to consolidated financial statements.
5<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net income $ 494,906 404,102
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 23,259 33,637
Provision for losses on loans 10,000 30,000
Amortization of premium on savings deposits 95,346 95,346
Non cash compensation under stock-based
benefit plans 137,523 133,450
Loans originated for sale, net of repayments (42,569) (1,733,066)
Amortization of loan fees, premiums and
discounts, net (179,592) (26,043)
Increase in prepaid expenses and other assets (629) (134,615)
Increase (decrease) in accrued expenses and
other liabilities (45,973) 81,184
Increase in federal and state income taxes payable 192,719 197,394
Increase in accrued interest receivable (31,286) (329,310)
---------- ----------
Net cash provided by (used in)
operating activities 653,704 (1,247,921)
---------- ----------
Cash flows from investing activities:
Maturities of investment securities held to maturity 5,500,000 2,090,909
Purchase of investment securities available for sale (1,997,500) --
Principal repayments of mortgage-backed securities
held to maturity 770,239 783,856
Principal repayments of mortgage-backed securities
available for sale 1,046,215 218,021
Proceeds from sale of investment in real estate -- 465,136
Loan principal disbursements, net of repayments (2,780,180) (486,661)
Loan purchases -- (571,990)
Purchases of property and equipment (15,056) (12,763)
Decrease (increase) in investments in and advances
to affiliated corporation, net 25,000 (100,000)
---------- ----------
Net cash provided by investing activities $2,548,718 2,386,508
---------- ----------
</TABLE>
(Continued)
6<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in savings accounts $ 5,034,235 (982,383)
Net decrease in borrowed funds (1,956,250) (3,000,000)
Increase in advance payments by borrowers
for taxes, insurance and ground rents 777,070 739,939
Purchase of common stock for Stock Option Trust (65,250) --
Purchase of common stock -- (965,687)
Exercise of stock options by Stock Option Trust 23,375 --
Dividends paid (220,145) (172,042)
----------- -----------
Net cash provided by (used in) financing activities 3,593,035 (4,380,173)
----------- -----------
Net increase (decrease) in cash and cash equivalents 6,795,457 (3,241,586)
Cash and cash equivalents at beginning of period 3,239,405 5,698,253
----------- -----------
Cash and cash equivalents at end of period $10,034,862 2,456,667
=========== ===========
Supplemental information -- noncash investing activities:
Unrealized holding gain on securities available for
sale, net of income tax effect $ 125,592 376,543
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
6<PAGE>
<PAGE>
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Three Months Ended June 30, 1998
(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, which in the opinion of management,
are necessary for a fair presentation of the consolidated
financial statements at and for the three months ended June 30,
1998 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 three months ended June 30,
1998 are not necessarily indicative of the results that may be
expected for the entire year ending March 31, 1999. Actual
results could differ significantly from those estimates.
Note 3 -- Principles of Consolidation. The accompanying
unaudited consolidated financial statements include the accounts
of Harbor Federal Savings Bank, and its wholly owned
subsidiaries, Harbor Service Corporation and Bank Street
Mortgage Company. All significant intercompany items have been
eliminated.
Note 4 -- Retained Income. Harbor Federal is required to
maintain certain levels of regulatory capital. At June 30,
1998, 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.
<PAGE>
<PAGE>
Note 5 -- Earnings per Common Share. On July 15, 1998 the
Company declared a 10% stock dividend to shareholders of record
on July 31, 1998 payable on August 10, 1998. Information
related to the calculation of net income per share of common
stock is summarized as follows for the three months ended June
30, 1998 and June 30, 1997, adjusted for the effect of the 10%
stock dividend:
<TABLE>
<CAPTION>
June 30, 1998 June 30, 1997
-------------------- ---------------------
Basic Diluted Basic Diluted
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Income 494,906 494,906 404,102 404,102
Dividend on unvested common
stock award (4,289) (2,717) (4,988) (3,634)
--------- --------- --------- ---------
Adjusted net income used in
EPS calculations 490,617 492,189 399,114 400,468
========= ========= ========= =========
Weighted average shares outstanding 1,729,355 1,729,355 1,687,833 1,687,833
Diluted securities:
Options -- 67,734 -- 38,764
Unvested common stock awards -- 12,098 -- 13,531
--------- --------- --------- ---------
Adjusted weighted-average shares
used in EPS
Computation 1,729,355 1,809,187 1,687,833 1,740,128
========= ========= ========= =========
</TABLE>
Note 6 -- Investment Securities. Investment securities
available for sale included in total investment securities have
a book and fair market value of $38,407,567 at June 30, 1998 and
$36,204,093 at March 31, 1998 and related accrued interest of
$565,021 at June 30, 1998 and $432,389 at March 31, 1998.
Note 7 -- Mortgage-Backed Securities. Mortgage-backed
securities available for sale included in mortgage-backed
securities have a book and fair market value of $15,870,700 at
June 30, 1998 and $16,930,783 at March 31, 1998 and related
accrued interest of $113,333 at June 30, 1998 and $121,011 at
March 31, 1998.
<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 June 30, 1998 and March 31, 1998 and the
results of operations of the Company for the three months ended
June 30, 1998 and 1997.
Financial Condition
- -------------------
Harbor Federal's total assets increased by $4.6 million or
2.0% to $235.7 million at June 30, 1998 from $231.1 million at
March 31, 1998. The increase in total assets resulted from
increase in federal funds sold of $7.8 million to $8.1 million
at June 30, 1998 from $300,000 at March 31, 1998, partially
offset by a reduction in mortgage-backed securities of $1.8
million or 8.7% to $19.3 million at June 30, 1998 from $21.1
million at March 31, 1998 and a reduction in cash of $960,000.
Loans receivable, net increased by $2.9 million or 2.0% to
$150.8 million at June 30, 1998 from $147.9 million at March 31,
1998. This increase was due in part to a greater demand for
loans during this quarter. The increase was funded by a
reduction in investment securities of $3.1 million or 6.1% to
$48.7 million at June 30, 1998 from $51.8 million at March
31,1998.
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 of savings
accounts and borrowed funds. Net income for the three months
ended June 30, 1998 increased $91,000 or 22.5% to $495,000 from
$404,000 for the three months ended June 30, 1997.
Interest Income. Total interest income increased by
$299,000 or 7.5% to $4.32 million for the three months ended
June 30, 1998 from $4.02 million for the three months ended June
30, 1997. The increase in interest income was primarily
attributable to an increase in average loan receivables to
$149.5 million for the quarter ended June 30, 1998 from $146.1
million for the quarter ended June 30, 1997 and an increase in
the average yield on Harbor Federal's average interest-earning
assets to 7.95% for the three months ended June 30, 1998 from
7.86% for the three months ended June 30, 1997. The increase in
average loans receivable was primarily due to increased loan
production over normal repayments.
Interest income on mortgage-backed securities increased by
$109,000 was attributable to an increase in average
mortgage-backed securities to $20.3 million for the quarter
ended June 30, 1998 from $13.8 million for the quarter ended
June 30, 1997 offset by a reduction in the average yield on
those securities to 7.03% for the three months ended June 30,
1998 from 7.22% for the three months ended June 30, 1997. The
increase in average mortgage-backed securities was due to the
purchase of a $9.9 million package of mortgage-backed securities
in December 1997.
<PAGE>
Interest Expense. Total interest expense increased by
$190,000 or 7.9% to $2.59 million for the three months ended
June 30, 1998 from $2.40 million for the three months ended June
30, 1997. The increase was attributable to an increase in
average deposits and borrowings by $12.8 million or 6.9% to
$199.1 million for the three months ended June 30, 1998 from
$186.3 million for the three months ended June 30, 1997 and by
an increase in average cost of deposits and borrowings to 5.20%
for the three months ended June 30, 1998 from 5.15% for the
three months ended June 30, 1997.
Net Interest Income. Net interest income increased by
$109,000 or 6.7% to $1.73 million for the three months ended
June 30, 1998 from $1.62 million for the three months ended June
30, 1997 due to the above mentioned changes.
10<PAGE>
<PAGE>
Provision for 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 was a $10,000 provision
for loan losses during the three months ended June 30, 1998 and
a $30,000 provision for loan losses for the same period in 1997.
Based on the results of management's review and analyses, it was
concluded that the level of the allowance for losses on loans
was adequate at June 30, 1998.
Noninterest Income. Noninterest income increased by
$63,200 or 102.0% to $125,000 for the three months ended June
30, 1998 from $62,000 for the three months ended June 30, 1997.
This was primarily due to an increase in fee income of $70,000
from Bank Street Mortgage Company, which was formed in June of
1997. This was offset by a reduction of $7,000 in ATM fees due
to the closing of its ATM machine in Ocean City, Maryland in
November of 1997.
Noninterest Expense. Noninterest expense increased by
$25,800 or 2.6% to $1.02 million for the three months ended June
30, 1998, from $996,000 for the three months ended June 30,
1997. The increase in noninterest expense resulted primarily
from increases in compensation and benefit expense of $13,800
and an increase in advertising of $14,800.
The increase in compensation and benefit expense were
partly attributable to a normal 5% pay increase for most
employees and the addition of several employees in the mortgage
banking subsidiary. This subsidiary is focusing on VA, FHA and
long term fixed rate mortgages suitable for sale on the
secondary market.
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 4.0%. Harbor Federal's liquidity ratio averaged
28.3% for the three months ended June 30, 1998. 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 three months ended June 30, 1998, Harbor
Federal's cash and cash equivalents (cash and short-term
investments with maturities less than 90 days) increased by $6.8
million.
The Company had $3.2 million in outstanding loan
commitments at June 30, 1998. Harbor Federal expects to fund
its loan originations 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.
11<PAGE>
<PAGE>
YEAR 2000 ACTION PLAN
In 1997, the Company adopted a Year 2000 Action Plan (the
"Plan"). The Plan identifies the process by which the Company
will address Year 2000 related issues. It also establishes a
committee, lead by senior management, assigned the
responsibility to complete Year 2000 preparations, with a
targeted completion date of December 31, 1998. The Plan
includes several phases as follows: awareness, assessment;
renovation; validation; and implementation.
The Company relies upon its third party service bureau to
provide its data processing services. The Company has reviewed
the Year 2000 plan established by its data processing service
bureau and regularly evaluates the progress being made. In
addition, the Company is working with other vendors in pursuit
of timely completion of the Year 2000 project.
Cost associated with the Year 2000 project will primarily
include costs incurred to upgrade existing software and hardware
not currently Year 2000 compliant. The Company estimates that
these costs will be incurred in the normal course of business as
software and hardware is ordinarily upgraded to keep pace with
technological advances. Management currently expects that these
costs could range to $35,000 over a period of eighteen months.
STOCK DIVIDEND
The Company declared a 10% stock dividend at its Annual
Stockholders Meeting on July 15, 1998 to be paid on August 10,
1998 to shareholders of record on July 31, 1998.
Fractional shares will be rounded up or down to the nearest
whole share.
NEW ACCOUNTING STANDARDS
In June 1997, The Financial Accounting Standards Board
("FASB:) issued SFAS No. 130, "Reporting Comprehensive Income
("SFAS No. 130"). SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. It
requires all items that are required to be recognized under
accounting standards as components of comprehensive income to be
reported in a financial statement that is displayed in equal
prominence with other financial statements. It requires that an
enterprise display an amount representing total comprehensive
income for each period. It does not require per share amounts
of comprehensive income to be disclosed. SFAS No. 130 is
effective for both interim and annual periods beginning after
December 15, 1997.
In June 1998, the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts. (collectively referred to as derivatives)
and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at
fair value. It is effective for all fiscal quarters, quarters
or fiscal years beginning after June 15, 1999. Initial
application of this Statement should be as of the beginning of
an entity's fiscal quarter, on that date, hedging relationships
must be designated anew and documented pursuant to the
provisions of SFAS No. 133. Earlier application is encouraged,
but is permitted only as of the beginning of any fiscal quarter
that begins after issuance of SFAS No. 133. It should not be
applied retroactively to financial statements of prior periods.
12<PAGE>
<PAGE>
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 June 30, 1998, 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 and Use of Proceeds
-----------------------------------------
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) List of Exhibits
27.1 Financial Data Schedule
27.2 Restated Financial Data Schedule
for first quarter 1997 10-QSB
(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.
HARBOR FEDERAL BANCORP, INC.
Date: August 14, 1998 /s/ Robert A. Williams
------------------------------
Robert A. Williams
President
(Duly Authorized Representative)
Date: August 14, 1998 /s/ Norbert J. Luken
------------------------------
Norbert J. Luken
Treasurer
(Principal Financial Officer)
14<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 1,925,033
<INT-BEARING-DEPOSITS> 40,563
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 54,956,621
<INVESTMENTS-CARRYING> 13,047,437
<INVESTMENTS-MARKET> 13,187,298
<LOANS> 150,794,392
<ALLOWANCE> 500,000
<TOTAL-ASSETS> 235,733,337
<DEPOSITS> 178,032,425
<SHORT-TERM> 23,310,000
<LIABILITIES-OTHER> 4,692,101
<LONG-TERM> 0
<COMMON> 16,934
0
0
<OTHER-SE> 29,681,877
<TOTAL-LIABILITIES-AND-EQUITY> 235,733,337
<INTEREST-LOAN> 2,969,164
<INTEREST-INVEST> 1,268,933
<INTEREST-OTHER> 81,252
<INTEREST-TOTAL> 4,319,349
<INTEREST-DEPOSIT> 2,259,419
<INTEREST-EXPENSE> 2,587,882
<INTEREST-INCOME-NET> 1,731,467
<LOAN-LOSSES> 10,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,021,969
<INCOME-PRETAX> 824,656
<INCOME-PRE-EXTRAORDINARY> 494,906
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 494,906
<EPS-PRIMARY> .28
<EPS-DILUTED> .27
<YIELD-ACTUAL> 7.57
<LOANS-NON> 0
<LOANS-PAST> 763,400
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 490,000
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 500,000
<ALLOWANCE-DOMESTIC> 0
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