FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20552
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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 No. 0-25300
HARVEST HOME FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-1402988
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3621 Harrison Avenue
Cheviot, Ohio 45211
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code: (513) 661-6612
Check whether the issuer (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 February 11, 1999, the latest practicable date, 875,289 shares of the
registrant's common stock, without par value, were issued and outstanding.
Page 1 of 16 pages
<PAGE>
Harvest Home Financial Corporation
INDEX
Page
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Other Comprehensive
Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II - OTHER INFORMATION 16
SIGNATURES 17
<PAGE>
<TABLE>
Harvest Home Financial Corporation
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
December 31, September 30,
ASSETS 1998 1998
<S> <C> <C>
Cash and due from banks $ 1,890 $ 1,505
Federal funds sold 3,100 200
Interest-bearing deposits in other financial institutions 3,432 1,182
------ ------
Cash and cash equivalents 8,422 2,887
Investment securities designated as available for sale - at market 4,023 4,032
Mortgage-backed securities designated as available for sale -
at market 31,123 37,864
Loans receivable - net 48,882 48,797
Office premises and equipment - at depreciated cost 1,130 1,117
Federal Home Loan Bank stock - at cost 1,635 1,606
Accrued interest receivable on loans 224 257
Accrued interest receivable on mortgage-backed securities 144 173
Accrued interest receivable on investments and
interest-bearing deposits 119 47
Prepaid expenses and other assets 50 114
------ ------
Total assets $95,752 $96,894
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $64,854 $60,225
Advances from the Federal Home Loan Bank 20,000 25,850
Advances by borrowers for taxes and insurance 157 119
Accrued interest payable 112 126
Other liabilities 62 230
Accrued federal income taxes 94 65
Deferred federal income taxes 155 302
------ ------
Total liabilities 85,434 86,917
Stockholders' equity
Common stock - 2,000,000 shares of no par value authorized;
991,875 shares issued - -
Additional paid-in capital 6,903 6,903
Retained earnings - restricted 5,271 5,191
Shares acquired by Employee Stock Ownership Plan (224) (301)
Shares acquired by Recognition and Retention Plan (194) (291)
Unrealized gains on securities designated as available for sale,
net of related tax effects 13 87
Less 116,586 and 129,518 shares of treasury stock - at cost (1,451) (1,612)
------ ------
Total stockholders' equity 10,318 9,977
------ ------
Total liabilities and stockholders' equity $95,752 $96,894
====== ======
</TABLE>
3
<PAGE>
<TABLE>
Harvest Home Financial Corporation
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months ended December 31,
(In thousands, except share data)
1998 1997
<S> <C> <C>
Interest income
Loans $ 953 $ 892
Mortgage-backed securities 532 527
Investment securities 62 129
Interest-bearing deposits and other 77 93
----- -----
Total interest income 1,624 1,641
Interest expense
Deposits 743 745
Borrowings 303 341
----- -----
Total interest expense 1,046 1,086
Net interest income 578 555
Provision for losses on loans 3 3
----- -----
Net interest income after provision for losses on loans 575 552
Other income
Gain on sale of investment and mortgage-backed securities
designated as available for sale - 6
Other operating 20 16
----- -----
Total other income 20 22
General, administrative and other expense
Employee compensation and benefits 224 217
Occupancy and equipment 70 71
Federal deposit insurance premiums 9 9
Franchise taxes 31 29
Other operating 54 60
----- -----
Total general, administrative and other expense 388 386
----- -----
Earnings before income taxes 207 188
Federal income taxes
Current 115 55
Deferred (45) 9
----- -----
Total federal income taxes 70 64
----- -----
NET EARNINGS $ 137 $ 124
===== =====
EARNINGS PER SHARE
Basic $.16 $.14
=== ===
Diluted $.15 $.14
=== ===
</TABLE>
4
<PAGE>
<TABLE>
Harvest Home Financial Corporation
<CAPTION>
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
For the three months ended December 31,
(In thousands)
1998 1997
<S> <C> <C>
Net earnings $137 $124
Other comprehensive income, net of tax:
Unrealized holding gain (loss) on securities during
the period (74) 142
Reclassification adjustment for gains included in net earnings - (4)
---- ---
Comprehensive income $ 63 $262
=== ===
</TABLE>
5
<PAGE>
<TABLE>
The Harvest Home Financial Corporation
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended December 31,
(In thousands)
1998 1997
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net earnings for the period $ 137 $ 124
Adjustments to reconcile net earnings to
net cash provided by (used in) operating
activities:
Amortization of deferred loan origination fees (17) (18)
Depreciation and amortization 15 13
Amortization of premiums and discounts on investment and
mortgage-backed securities - net 2 (2)
Provision for losses on loans 3 3
Gain on sale of investment and mortgage-backed securities - (6)
Amortization expense of stock benefit plans 174 186
Federal Home Loan Bank stock dividends (29) (22)
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans 33 33
Accrued interest receivable on mortgage-backed securities 29 25
Accrued interest receivable on investments and interest-
bearing deposits (72) (31)
Prepaid expenses and other assets 64 26
Accrued interest payable (14) 44
Other liabilities (168) (196)
Federal income taxes
Current 29 59
Deferred (45) 9
----- -----
Net cash provided by operating activities 141 247
Cash flows provided by (used in) investing activities:
Principal repayments on mortgage-backed securities 6,572 3,286
Purchase of mortgage-backed securities - (2,569)
Proceeds from maturity of investment securities - 2,000
Proceeds from sale of mortgage-backed securities - 343
Principal repayments on loans 3,066 3,133
Loan disbursements (3,099) (2,233)
Purchase of office equipment (28) (95)
----- -----
Net cash provided by investing activities 6,511 3,865
----- -----
Net cash provided by operating and investing
activities (balance carried forward) 6,652 4,112
----- -----
</TABLE>
6
<PAGE>
<TABLE>
The Harvest Home Financial Corporation
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended December 31,
(In thousands)
1998 1997
<S> <C> <C>
Net cash provided by operating and investing
activities (balance brought forward) $6,652 $4,112
Cash flows provided by (used in) financing activities:
Net increase in deposit accounts 4,629 1,492
Proceeds from Federal Home Loan Bank advances - 3,000
Repayment of Federal Home Loan Bank advances (5,850) (5,175)
Advances by borrowers for taxes and insurance 38 42
Dividends on common stock (95) (100)
Purchase of treasury stock - (336)
Stock options exercised 161 -
----- -----
Net cash used in financing activities (1,117) (1,077)
----- -----
Net increase in cash and cash equivalents 5,535 3,035
Cash and cash equivalents at beginning of period 2,887 5,264
----- -----
Cash and cash equivalents at end of period $8,422 $8,299
===== =====
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on deposits and borrowings $1,060 $1,042
===== =====
Supplemental disclosure of noncash investing activities:
Unrealized gains on securities designated as available
for sale, net of related tax effects $ 74 $ 138
===== =====
</TABLE>
7
<PAGE>
Harvest Home Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three month periods ended
December 31, 1998 and 1997
1. 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 consolidated
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. Accordingly, these financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto of Harvest Home Financial Corporation (the
"Corporation") included in the Annual Report on Form 10-KSB for the year ended
September 30, 1998. However, in the opinion of management, all adjustments
(consisting of only normal recurring accruals) which are necessary for a fair
presentation of the consolidated financial statements have been included. The
results of operations for the three month period ended December 31, 1998 are not
necessarily indicative of the results which may be expected for an entire fiscal
year.
2. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the
Corporation and Harvest Home Savings Bank (the "Savings Bank"). All significant
intercompany items have been eliminated.
3. Earnings Per Share
Basic earnings per share is computed based upon the weighted-average shares
outstanding during the period, less shares in the ESOP that are unallocated and
not committed to be released. Weighted-average common shares outstanding, which
gives effect to 28,252 unallocated ESOP shares, totaled 860,313 for the three
month period ended December 31, 1998. Weighted average common shares
outstanding, which gives effect to 37,826 unallocated ESOP shares, totaled
864,541 for the three month period ended December 31, 1997.
Diluted earnings per share is computed taking into consideration common shares
outstanding and dilutive potential common shares to be issued under the
Corporation's stock option plan. Weighted-average common shares deemed
outstanding for purposes of computing diluted earnings per share totaled 890,234
for the three month period ended December 31, 1998, and 897,378 for the three
month period ended December 31, 1997.
4. Effects of Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. SFAS No. 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. It does not require a specific format for that financial statement
but requires that an enterprise display an amount representing total
comprehensive income for the period in that financial statement.
8
<PAGE>
Harvest Home Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the three month periods ended
December 31, 1998 and 1997
4. Effects of Recent Accounting Pronouncements (continued)
SFAS No. 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. Management adopted SFAS No. 130
effective October 1, 1998, as required, without material effect on the
Corporation's financial statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 131 significantly changes the way
that public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about reportable segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. SFAS No. 131 uses a
"management approach" to disclose financial and descriptive information about
the way that management organizes the segments within the enterprise for making
operating decisions and assessing performance. For many enterprises, the
management approach will likely result in more segments being reported. In
addition, SFAS No. 131 requires significantly more information to be disclosed
for each reportable segment than is presently being reported in annual financial
statements and also requires that selected information be reported in interim
financial statements. SFAS No. 131 is effective for fiscal years beginning after
December 15, 1997. SFAS No. 131 is not expected to have a material impact on the
Corporation's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires entities to recognize all
derivatives in their financial statements as either assets or liabilities
measured at fair value. SFAS No. 133 also specifies new methods of accounting
for hedging transactions, prescribes the items and transactions that may be
hedged, and specifies detailed criteria to be met to qualify for hedge
accounting.
The definition of a derivative financial instrument is complex, but in general,
it is an instrument with one or more underlyings, such as an interest rate or
foreign exchange rate, that is applied to a notional amount, such as an amount
of currency, to determine the settlement amount(s). It generally requires no
significant initial investment and can be settled net or by delivery of an asset
that is readily convertible to cash. SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.
SFAS No. 133 is effective for fiscal years beginning after June 15, 1999. On
adoption, entities are permitted to transfer held-to-maturity debt securities to
the available-for-sale or trading category without calling into question their
intent to hold other debt securities to maturity in the future. SFAS No. 133 is
not expected to have a material impact on the Corporation's financial
statements.
9
<PAGE>
Harvest Home Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
In addition to historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties.
Economic circumstances, the Corporation's operations and the Corporation's
actual results could differ significantly from those discussed in the
forward-looking statements. Some of the factors that could cause or contribute
to such differences are discussed herein but also include changes in the economy
and interest rates in the nation and the Corporation's market area generally.
Some of the forward-looking statements included herein are the statements
regarding management's determination of the amount and adequacy of the allowance
for losses on loans, the effect of the year 2000 on certain information
technology systems and the effect of certain recent accounting pronouncements on
results of operations and financial position.
Discussion of Financial Condition Changes from September 30, 1998 to December
31, 1998
At December 31, 1998, the Corporation had total assets of $95.8 million, a
decrease of $1.1 million, or 1.2%, from September 30, 1998. The decrease in
assets consisted primarily of a $6.7 million decrease in mortgage-backed
securities offset by a $5.5 million increase in cash and cash equivalents, and
resulted from a $5.9 million decrease in advances from the Federal Home Loan
Bank, which was partially offset by a $4.6 million increase in deposits.
Cash and due from banks, federal funds sold, interest-bearing deposits in other
financial institutions and investment securities increased by $5.5 million, to a
total of $12.4 million at December 31, 1998. The increase in liquid assets was
primarily the result of a $4.6 million increase in deposits.
Mortgage-backed securities decreased by $6.7 million, or 17.8%, to a total of
$31.1 million at December 31, 1998, as compared to $37.8 million at September
30, 1998. Proceeds from repayments of mortgage-backed securities were utilized
to repay advances from the Federal Home Loan Bank, as such securities were
matched with these advances in leveraged purchase transactions during fiscal
1998 and 1997.
Loans receivable remained relatively constant, with loan disbursements of $3.1
million and principal repayments of $3.0 million. Loan origination volume during
the 1998 period exceeded that of the 1997 period by $866,000, or 38.8%. Growth
in loan originations year to year consisted primarily of loans secured by one-
to four-family residential real estate.
10
<PAGE>
Harvest Home Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Discussion of Financial Condition Changes from September 30, 1998 to December
31, 1998 (continued)
The Savings Bank's allowance for loan losses totaled $130,000 at December 31,
1998, and $127,000 at September 30, 1998. The allowance for loan losses is
evaluated by management based upon an assessment of current and anticipated
economic conditions applied to the loan portfolio, as well as, evaluating the
quality of the portfolio. At December 31, 1998, the Corporation had $7,000 in
nonperforming loans, as compared to $49,000 in nonperforming loans at September
30, 1998. Although management believes that its allowance for loan losses at
December 31, 1998, was adequate based on the available facts and circumstances,
there can be no assurance that additions to such allowance will not be necessary
in future periods, which could adversely affect Harvest Home's results of
operations.
Deposits totaled $64.9 million at December 31, 1998, an increase of $4.6
million, or 7.7%, over the $60.2 million of deposits outstanding at September
30, 1998. The increase primarily reflects growth in the six-month and one-year
term certificates of deposit, as management maintained interest rates on these
products slightly higher than those available in the overall market. Proceeds
from such deposit growth were redeployed, subsequent to December 31, 1998, to
fund purchases of short term investment securities and growth in the loan
portfolio.
Advances from the Federal Home Loan Bank decreased by $5.9 million, or 22.6%,
during the current period due to repayments resulting primarily from prepayments
received on mortgage-backed securities which had been matched with such advances
at inception.
The Savings Bank is subject to risk-based capital ratio guidelines implemented
by the Federal Deposit Insurance Corporation ("FDIC"). The guidelines establish
a systematic analytical framework that makes regulatory capital requirements
more sensitive to differences in risk profiles among banking organizations.
Risk-based capital ratios are determined by allocating assets and specified
off-balance sheet commitments to four risk-weighted categories, with higher
levels of capital being required for the categories perceived as representing
greater risk.
These guidelines divide the Savings Bank's capital into two tiers. The first
tier ("Tier 1") includes common equity, certain non-cumulative perpetual
preferred stock (excluding auction rate issues) and minority interests in equity
accounts of consolidated subsidiaries, less goodwill and certain other
intangible assets (except mortgage servicing rights and purchased credit card
relationships, subject to certain limitations). Supplementary ("Tier II")
capital includes, among other items, cumulative perpetual and long-term
limited-life preferred stock, mandatory convertible securities, certain hybrid
capital instruments, term subordinated debt and the allowance for loan losses,
subject to certain limitations, less required deductions. Savings banks are
required to maintain a total risk-based capital ratio of 8%, of which 4% must be
Tier 1 capital. The FDIC may, however, set higher capital requirements when
particular circumstances warrant. Savings banks experiencing or anticipating
significant growth are expected to maintain capital ratios, including tangible
capital positions, well above the minimum levels.
11
<PAGE>
Harvest Home Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Discussion of Financial Condition Changes from September 30, 1998 to December
31, 1998 (continued)
In addition, the FDIC established guidelines prescribing a minimum Tier 1
leverage ratio (Tier 1 capital to adjusted total assets as specified in the
guidelines). These guidelines provide for a minimum Tier 1 leverage ratio of 3%
for savings banks that meet certain specified criteria, including that they have
the highest regulatory rating and are not experiencing or anticipating
significant growth. All other savings banks are required to maintain a Tier 1
leverage ratio of 3% plus an additional cushion of at least 100 to 200 basis
points.
As of December 31, 1998, the Savings Bank's regulatory capital substantially
exceeded all minimum capital requirements.
Comparison of Operating Results for the Three Month Periods Ended December 31,
1998 and 1997
General
Net earnings for the three months ended December 31, 1998, totaled $137,000, an
increase of $13,000, or 10.5%, from the comparable quarter in fiscal 1997. The
increase in net earnings resulted primarily from a $23,000 increase in net
interest income offset by a $2,000 increase in general, administrative and other
expense, a $2,000 decrease in other income and a $6,000 increase in the federal
income tax provision.
Net Interest Income
Interest income on loans totaled $953,000 for the three months ended December
31, 1998, an increase of $61,000, or 6.8%, due primarily to a $3.7 million
increase in the average portfolio balance outstanding, partially offset by a
decrease in the yield of approximately 10 basis points, to 7.81% for the quarter
ended December 31, 1998. Interest income on mortgage-backed securities increased
by $5,000, or .9%, due to an increase in the average portfolio balance
outstanding year to year. Interest income on investment securities and other
interest-earning assets decreased by $83,000, or 37.4%. This decrease was
primarily the result of a decrease in yields available on short term deposits
year to year, coupled with a decrease in the average portfolio balance
outstanding year to year.
Interest expense on deposits decreased by $2,000, or .3%, during the three
months ended December 31, 1998. The decrease was primarily the result of a
decrease in cost of deposits of approximately 25 basis points to 4.75% in the
quarter ended December 31, 1998, offset by a $3.0 million increase in the
average balance of deposits outstanding.
Interest expense on borrowings decreased by $38,000, or 11.1%, as a result of a
$2.0 million decrease in the average balance outstanding, coupled with a 17
basis point decrease in the average cost of the advance.
12
<PAGE>
Harvest Home Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three Month Periods Ended December 31,
1998 and 1997 (continued)
Net Interest Income (continued)
As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $23,000, or 4.1%, during the three months ended
December 31, 1998, as compared to the three months ended December 31, 1997.
Other Income
Other income totaled $20,000 for the three months ended December 31, 1998, a
decrease of $2,000 from the comparable 1997 quarter. This decrease was due to
the absence of the gain on the sale of a mortgage-backed security, offset by a
$4,000 increase in NOW account fees.
General, Administrative and Other Expense
General, administrative and other expense increased by approximately $2,000, or
.5%, during the three months ended December 31, 1998, as compared to 1997. This
increase was primarily the result of a $7,000, or 3.2%, increase in employee
compensation and benefits, a $2,000, or 6.9%, increase in franchise taxes,
offset by a $6,000, or 10.0%, decrease in other operating expense. The increase
in employee compensation and benefits resulted primarily from increased costs
associated with stock benefit plans year to year.
Federal Income Taxes
The provision for federal income taxes increased by $6,000, or 9.4%, during the
three months ended December 31, 1998, due primarily to an increase in earnings
before income taxes of $19,000, or 10.1%. The Corporation's effective tax rates
amounted to 33.8% and 34.0% during the three months ended December 31, 1998 and
1997, respectively.
Year 2000 Compliance Matters
As with all providers of financial services, the Corporation's operations are
heavily dependent on information technology systems. The Corporation is
addressing the potential problems associated with the possibility that the
computers that control or operate the Corporation's information technology
system and infrastructure may not be programmed to read four-digit date codes
and, upon arrival of the year 2000, may recognize the two-digit code "00" as the
year 1900, causing systems to fail to function or to generate erroneous data.
The Corporation is working with the companies that supply or service its
information technology systems to identify and remedy any year 2000 related
problems.
13
<PAGE>
Harvest Home Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Year 2000 Compliance Matters (continued)
Harvest Home's primary data processing applications are handled by a third-party
service bureau, NCR. NCR has advised Harvest Home that it has migrated to a
fully Year 2000 compliant processing system that would be fully tested by
January 1, 1999. Management has also reviewed Harvest Home's ancillary equipment
and is in the process of providing the appropriate remedial measures, including
requesting service providers to assure the Savings Bank that their systems and
products are fully year 2000 compliant. Harvest Home is in the process of
upgrading its existing teller operating system with a capital expense budget of
$175,000.
No assurance can be given, however, that significant expense will not be
incurred in future periods. In the unlikely event that the Savings Bank is
ultimately required to purchase replacement computer systems, programs and
equipment, or incur substantial expense to make the Savings Bank's current
systems, programs and equipment year 2000 compliant, the Savings Bank's net
earnings and financial condition could be adversely affected.
Management has developed a contingency plan which includes access to an
alternative processing site provided by NCR. Additionally, the Savings Bank can
process transactions manually for a period of several weeks, if necessary, upon
arrival of the year 2000.
In addition to possible expense related to its own systems, Harvest Home could
incur losses if loan payments are delayed due to year 2000 problems affecting
any major borrowers in Harvest Home's primary market area. Because Harvest
Home's loan portfolio is highly diversified with regard to individual borrowers
and types of businesses and Harvest Home's primary market area is not
significantly dependent upon one employer or industry, Harvest Home does not
expect any significant or prolonged difficulties that will affect net earnings
or cash flow.
14
<PAGE>
Harvest Home Financial Corporation
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities and Use of Proceeds
Not applicable
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
On December 22, 1998, the Annual Meeting of the Corporation's
Stockholders was held. Two directors (Marvin L. Ruehlman and Walter F.
Schuch) were each elected to terms expiring in 2001 by the following
votes:
For: 695,885 Withheld: 17,781
One other matter was submitted to the stockholders, for which the
following vote was cast:
Ratification of the appointment of Grant Thornton LLP as independent
auditors of the Corporation for the fiscal year ended September 30,
1999.
For: 704,712 Against: 3,954
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: None.
Exhibit 27: Financial Data Schedule for the three
month period ended December 31, 1998.
15
<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: February 12, 1999 By: /s/John E. Rathkamp
------------------------ ------------------------------------
John E. Rathkamp
President, Chief Executive Officer
and Secretary
Date: February 12, 1999 By: /s/Dennis J. Slattery
------------------------ ------------------------------------
Dennis J. Slattery
Executive Vice President,
Treasurer
16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,890
<INT-BEARING-DEPOSITS> 3,432
<FED-FUNDS-SOLD> 3,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 35,146
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 48,882
<ALLOWANCE> 130
<TOTAL-ASSETS> 95,752
<DEPOSITS> 64,854
<SHORT-TERM> 0
<LIABILITIES-OTHER> 580
<LONG-TERM> 20,000
0
0
<COMMON> 0
<OTHER-SE> 10,318
<TOTAL-LIABILITIES-AND-EQUITY> 95,752
<INTEREST-LOAN> 953
<INTEREST-INVEST> 594
<INTEREST-OTHER> 77
<INTEREST-TOTAL> 1,624
<INTEREST-DEPOSIT> 743
<INTEREST-EXPENSE> 1,046
<INTEREST-INCOME-NET> 578
<LOAN-LOSSES> 3
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 388
<INCOME-PRETAX> 207
<INCOME-PRE-EXTRAORDINARY> 137
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137
<EPS-PRIMARY> .16
<EPS-DILUTED> .15
<YIELD-ACTUAL> 2.49
<LOANS-NON> 7
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 127
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 130
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 130
</TABLE>
