U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-QSB
(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, 1996
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 : 0-25284
BIG SKY BANCORP, INC.
(Exact name of registrant as specified in its charter)
State of Delaware 81-0167980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
711 South First Street Hamilton, MT 59840
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (406) 363-4400
Not applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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___.
Indicate the number of shares outstanding of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding October 31, 1996
- ---------------------------- ----------------------------
Common Stock, par value $.01 308,721
per share
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FORM 10-QSB
FOR THE QUARTER ENDED September 30, 1996
INDEX
PAGE
NO.
PART I - Financial Information
Consolidated Statements of Financial Condition 1
Consolidated Statements of Income 2
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Consolidated Financial Statements 7
PART II - Other Information 13
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PART I - FINANCIAL INFORMATION
BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, MARCH 31,
1996 1996
ASSETS ( Unaudited )
-------- --------
Cash ( including interest-bearing accounts
of $ 994,000 and $ 2,228,000 ) $2,061,000 $3,058,000
Investment securities available for sale, at
fair value ( cost $ 130,000 and $ 182,000 ) 331,000 396,000
Mortgage-backed securities available for sale,
at fair value (cost $2,449,000 and $2,600,000) 2,498,000 2,649,000
Investment securities held to maturity, at
amortized cost (fair value $14,087,000
and $ 12,938,000 ) 14,423,000 13,233,000
Mortgage-backed securities held to maturity,
at amortized cost (fair value $ 639,000 and
$714,000 ) 621,000 685,000
Loans receivable,net 36,113,000 37,400,000
Accrued interest receivable 319,000 322,000
Real estate owned 0 0
Investment in Federal Home Loan Bank Stock 1,794,000 1,725,000
Premises and equipment 1,363,000 1,343,000
Prepaid expenses and other assets 218,000 111,000
-------- --------
TOTAL ASSETS $59,741,000 $60,922,000
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $51,217,000 $52,843,000
Advances from borrowers for taxes and insurance 679,000 550,000
Accrued expenses and other liabilities 475,000 155,000
Deferred taxes 473,000 578,000
-------- --------
TOTAL LIABILITIES $52,844,000 $54,126,000
STOCKHOLDERS' EQUITY
Common stock, ( $0.01 par value per share;
Authorized 1,500,000 shares; Issued and
outstanding, 309,000 and 307,000 ) 3,000 3,000
Capital surplus 610,000 605,000
Unrealized appreciation on securities
available for sale 153,000 161,000
Retained earnings, substantially restricted 6,131,000 6,027,000
-------- --------
TOTAL STOCKHOLDERS' EQUITY 6,897,000 6,796,000
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $59,741,000 $60,922,000
1
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
( Unaudited )
-------- --------
INTEREST INCOME:
Interest and fees on loans receivable $855,000 $889,000
Interest on investments 209,000 137,000
Interest on mortgage backed securities 58,000 63,000
Other interest and dividends 52,000 70,000
-------- --------
Total Interest Income $1,174,000 $1,159,000
INTEREST EXPENSE:
Deposits 616,000 637,000
-------- --------
Net Interest Income 558,000 522,000
Provision for loan losses (11,000) (11,000)
-------- --------
Net interest income after provision
for loan losses 547,000 511,000
-------- --------
OTHER INCOME:
Loan fees and service charges 19,000 23,000
Rental income 21,000 35,000
Gain on sale of investment 46,000 0
Other 1,000 1,000
-------- --------
Total other income 87,000 59,000
OTHER EXPENSES:
Salaries and employee benefits 189,000 158,000
Occupancy 43,000 54,000
FDIC/SAIF insurance 381,000 35,000
Outside services 28,000 25,000
Advertising 8,000 8,000
Other expense 59,000 70,000
-------- --------
Total other expense 708,000 350,000
-------- --------
Income before income taxes (74,000) 220,000
Benefits (provision) for income taxes 29,000 (86,000)
-------- --------
NET INCOME (LOSS) ($45,000) $134,000
NET INCOME PER SHARE ($0.14) $0.42
2
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
( Unaudited )
-------- --------
INTEREST INCOME:
Interest and fees on loans receivable $1,722,000 $1,775,000
Interest on investments 400,000 285,000
Interest on mortgage backed securities 118,000 126,000
Other interest and dividends 118,000 112,000
-------- --------
Total Interest Income $2,358,000 $2,298,000
INTEREST EXPENSE:
Deposits $1,236,000 $1,236,000
-------- --------
Net Interest Income $1,122,000 $1,062,000
Provision for loan losses (21,000) (21,000)
-------- --------
Net interest income after provision
for loan losses $1,101,000 $1,041,000
-------- --------
OTHER INCOME:
Loan fees and service charges 38,000 46,000
Rental income 55,000 69,000
Gain on sale of investment 46,000 0
Other 2,000 2,000
-------- --------
Total other income 141,000 117,000
OTHER EXPENSES:
Salaries and employee benefits 363,000 367,000
Occupancy 87,000 107,000
FDIC/SAIF insurance 417,000 71,000
Outside services 54,000 51,000
Advertising 18,000 18,000
Other expense 133,000 136,000
-------- --------
Total other expense 1,072,000 750,000
-------- --------
Income before income taxes 170,000 408,000
Benefits (provision) for income taxes (66,000) (159,000)
-------- --------
NET INCOME (LOSS) $104,000 $249,000
NET INCOME PER SHARE $0.32 $0.78
3
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
-------- --------
( Unaudited )
OPERATING ACTIVITIES:
Net income 104,000 249,000
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 34,000 33,000
Provision for loan losses 21,000 21,000
Gain on sale of investments (46,000) 0
Federal Home Loan Bank stock dividend (69,000) (53,000)
Cash provided (used) by changes in operating
assets and liabilities:
Accrued interest receivable 3,000 (5,000)
Prepaid expenses and other assets (107,000) 101,000
Accrued expenses and other liabilities 320,000 110,000
Deferred taxes (105,000) 85,000
Deferred loan fees, net 28,000 1,000
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 183,000 542,000
INVESTING ACTIVITIES:
Principal repayments on loans 4,996,000 3,118,000
Loan originations (3,656,000) (2,980,000)
Principal repayments on mortgage-backed
securities available for sale 155,000 132,000
Principal repayments on mortgage-backed
securities held to maturity 66,000 49,000
Proceeds from maturity of investment
securities 500,000 1,350,000
Purchase of investment securities (1,690,000) (503,000)
Purchase of premises and equipment (54,000) (317,000)
-------- --------
Net cash provided by investing activities 317,000 849,000
4
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS ( Continued )
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
-------- --------
( Unaudited )
FINANCING ACTIVITIES:
Net increase (decrease) in deposit
accounts due on demand 333,000 (192,000)
Net increase (decrease) in certificate
accounts (1,959,000) 2,132,000
Net increase in advances from borrowers 129,000 159,000
-------- --------
Net cash provided (used) in financing
activities (1,497,000) 2,099,000
-------- --------
NET INCREASE ( DECREASE ) IN CASH (997,000) 3,490,000
CASH, BEGINNING OF PERIOD 3,058,000 1,652,000
-------- --------
CASH, END OF PERIOD $2,061,000 $5,142,000
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Fair value adjustment to securities available
for sale $250,000 $214,000
Income tax effect related to fair value
adjustment (97,000) (83,000)
Cash paid for:
Interest 1,247,000 1,223,000
Income taxes 167,000 126,000
Stockholder redemption accrual 0 865,000
5
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BIG SKY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The information contained in the financial statements is unaudited.
In the opinion of management, the financial statements contain all
adjustments (none of which were other than recurring entries)
necessary for a fair statement of the results of operations for the
interim period. The results of operations for the three month and six
month periods ended September 30, 1995 are not necessarily indicative
of the results which may be expected for the entire fiscal year.
2. Net Income Per Share
Net income per share is based on net income and the weighted average
number of shares outstanding during the period. The dilutive effect
of outstanding stock options is included in earnings per share.
3. Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Corporation and its wholly-owned subsidiary, First
Federal Savings and Loan Association of Montana ("Association").
Significant intercompany balances and transactions have been
eliminated in the consolidation.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CONSOLIDATED FINANCIAL STATEMENTS
General
For the six months ended September 30, 1996, the Company's return on average
assets was .34%, return on beginning equity was 3.07%, and return on average
equity was 3.00%. Second quarter earnings were adversly impacted by a
one-time special assessment to capitalize the FDIC's Savings Association
Insurance Fund (SAIF). Excluding the SAIF assessment, return on average
assets was 1.04%, return on beginning equity was 9.24%, and return on average
equity was 8.93%.
Total assets decreased by $1,181,000, or 1.94%, to $59,741,000 at September
30, 1996, as compared to $60,922,000 at March 31, 1996.
Deposits decreased by $1,626,000, or 3.08%, to $51,217,000 at September 30,
1996, as compared to $52,843,000 at March 31, 1996.
Net loans decreased by $1,287,000, or 3.44%, to $36,113,000 at September 30,
1996, as compared to $37,400,000 at March 31, 1996.
Investments and mortgage-backed securities increased by $910,000, or 5.36%, to
$17,873,000 at September 30, 1996, as compared to $16,963,000 at March 31,
1996.
Cash (including interest-bearing accounts), decreased by $997,000, or 32.60%,
to $2,061,000 at September 30, 1996, as compared to $3,058,000 at March 31,
1996.
Capital Position
The Corporation's capital increased by $101,000, or 1.49%, to $6,897,000 at
September 30, 1996, from $6,796,000 at March 31, 1996.
The Association's capital position relative to its minimum capital
requirements under the Financial Institution's Reform, Recovery and
Enforcement Act of 1989 at September 30, 1996, was as follows:
Amount Percentage of
Assets
------ ------
Tangible capital..................... $ 6,453,000 10.8 %
Minimum tangible capital requirement. 893,000 1.5 %
Excess............................... $ 5,560,000 9.3 %
========= ======
Core capital......................... $ 6,453,000 10.8 %
Minimum core capital requirement..... 1,786,000 3.0 %
Excess............................... $ 4,667,000 7.8 %
========= ======
Risk-based capital................... $ 6,792,000 25.2 %
Minimum risk-based capital requirement. 2,159,000 8.0 %
Excess.................................$ 4,633,000 17.2 %
========= ======
7
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Liquidity
The Company's liquidity ratio decreased to 17.09% at September 30, 1996, from
17.50% at March 31, 1996. The Company is required to maintain cash and
certain investment securities in an amount equal to 5% of its deposit accounts
and short-term borrowings.
Allowance for Loan Losses
The allowance for loan loss reserves increased by $21,000, or 4.50%, to
$488,000 at September 30, 1996, as compared to $467,000 at March 31, 1996.
The allowance is based upon management's consideration of current and
anticipated economic conditions which may affect the ability of borrowers in
the loan portfolio to repay loans. Management also reviews individual loans
for which full collectibility may not be reasonably assured and considers,
among other matters, the estimated net realizable value of the underlying
collateral. The increase in the allowance for potential loan losses was
implemented by management as a prudent risk-management strategy. Management
does not believe that any significant changes in portfolio risk have occurred
during the period ended September 30, 1996, as compared to March 31, 1996.
COMPARISON OF THE THREE MONTHS ENDED
SEPTEMBER 30, 1996 TO THE THREE MONTHS ENDED SEPTEMBER 30, 1995
General
Total assets decreased by $3,011,000, or 4.80%, to $59,741,000 at September
30, 1996, from $62,752,000 at September 30, 1995.
Total deposits decreased $3,047,000, or 5.62%, to $51,217,000 at September 30,
1996, from $54,264,000 at September 30, 1995.
Net loans decreased by $3,333,000, or 8.45%, to $36,113,000 at September 30,
1996, from $36,113,000 at September 30, 1995.
Investments and mortgage-backed securities increased by $4,000,000, or 28.83%,
to $17,873,000 at September 30, 1996, from $13,873,000 at September 30, 1995.
The Corporation's capital increased by $862,000, or 14.28%, to $6,897,000 at
September 30, 1996, from $6,035,000 at September 30, 1995.
Cash decreased by $3,081,000, or 59.92%, to $2,061,000 at September 30, 1996,
as compared to $5,142,000 at September 30, 1995.
Net Income
Net income for the three month period ended September 30, 1996 was $(45,000),
resulting from a one-time special assessment of $344,000 by the FDIC to
recapitalize the SAIF insurance fund. Net income for the second quarter,
exclusive of the one-time SAIF assessment, increased by $31,000, or 23.13%, to
$165,000, as compared to $ 134,000 for the same quarter last year.
8
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Earnings per share decreased by $ .56, or 133.58%, to $ (.14) for the three
months ended September 30, 1996, as compared to $ .42 per share for the
comparable period in 1995, as a result of the one-time special assessment to
recapitalize the FDIC's SAIF insurance fund.
Total interest income increased by $15,000, or 1.29%, to $1,174,000 for the
three month period ending September 30, 1996, as compared to $1,159,000 for
the three month period ending September 30, 1995.
Interest and fees on loans receivable decreased by $34,000, or 3.82%, for the
quarter ending September 30, 1996, to $855,000, as compared to $889,000, for
the quarter ending September 30, 1995.
Interest on investments increased by $72,000, or 52.55%, to $209,000 for the
three month period ending September 30, 1996, as compared to $137,000 for the
corresponding quarter last year.
Interest on mortgage-backed securities decreased by $5,000, or 7.94%, to
$58,000 for the quarter ending September 30, 1996, as compared to $63,000
during the same period last year.
Other interest and dividends decreased by $18,000, or 25.71%, to $52,000 for
the three month period ending September 30, 1996, as compared to $70,000 for
the three month period ending September 30, 1995.
Interest on deposits decreased by $21,000, or 3.30%, to $616,000 for the
three month period ending September 30, 1996, as compared to $637,000 for
the three month period ending September 30, 1995.
Loan fees and service charges decreased by $4,000, or 17.39%, to $19,000 for
the quarter ending September 30, 1996, from $23,000 for the quarter ending
September 30, 1995, primarily as a result of loan payoffs and a lower volume
of loans for the purchase of new or existing homes in 1996 as compared to the
same period last year.
During the three month period ending September 30, 1996, a non-recurring gain
on the sale of securities was realized in the amount of $46,000. No
non-recurring gains on the sale of securities were realized in the three month
period ending September 30, 1995.
Rental income decreased by $14,000, or 40.00%, to $21,000 for the three month
period ended September 30, 1996, as compared to $35,000 for the corresponding
period last year. The primary reason for the reduction in rental income for
the quarter ending September 30, 1996, as compared to the corresponding
quarter last year, was the sale of the Company's former Southside office
property at 3600 Brooks Street in Missoula, Montana, on November 1, 1995, and
the termination of rental income from American Express Financial Services
Inc., a tenant, after that date.
Salary and benefits expense increased by $31,000, or 19.62%, to $189,000 for
the three month period ending September 30, 1996, as compared to $158,000 for
the three month period ending September 30, 1995. During the three month
period ending September 30, 1996, additional compensation in the amount of
$30,000 was paid to officers, based primarily on the operating results for the
fiscal year ended March 31, 1996. No additional compensation was paid during
the corresponding period last year.
9
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Occupancy expense was decreased by $11,000, or 20.37%, to $43,000 for the
three month period ending September 30, 1996, as compared to $54,000 during
the same period in 1995. A primary reason for the reduction in occupancy
expense for the quarter ended September 30, 1996, as compared to the same
quarter last year, was the sale of the former Southside Missoula office
property at 3600 Brooks Street in Missoula, Montana on November 1, 1995, and
the occupancy of a new, smaller facility at 2237 34th Street in Missoula after
that date.
Outside services expense increased by $3,000, or 12.00%, for the three month
period ended September 30, 1996, as compared to the three month period ended
September 30, 1995, as a result of increased expense for data processing
services.
FDIC/SAIF insurance expense increased by $346,000, to $381,000 for the three
month period ending September 30, 1996, as compared to $35,000 for the three
month period ending September 30, 1995. The increase was due to the one-time
assessment levied by the FDIC to recapitalize the SAIF insurance fund.
The Company recieved an income tax benefit of $29,000 for the three month
period ending September 30, 1996, as compared to a provision of $86,000 for
the same period last year, primarily as a result of the one-time assessment by
the FDIC to recapitalize the SAIF insurance fund.
Other expense decreased by $11,000, or 15.71%, to $59,000 for the three month
period ending September 30, 1996, as compared to $70,000 for the three month
period ending September 30, 1995. The decrease was primarily due to a
decrease in REO and securities counsel expense in 1996, as compared to the
corresponding period last year.
Net Interest Income
Net interest income increased by $36,000, or 6.90%, to $558,000 for the three
month period ending September 30, 1996, as compared to $522,000 for the three
month period ending September 30, 1995.
Interest spread was reduced by .04%, to 2.94% at September 30, 1996 as
compared to 2.98% at September 30, 1995.
The cost of funds increased by .03%, to 4.73% at September 30, 1996, as
compared to 4.70% at September 30, 1995.
The yield on earning assets decreased by .01%, to 7.67% at September 30, 1996,
as compared to 7.68% at September 30, 1995.
Average net interest margin increased by .11%, to 3.47% as of September 30,
1996, from 3.36% as of September 30, 1995.
Liquidity
The Company's liquidity ratio increased to 17.09% at September 30, 1996, from
15.97% at September 30, 1995.
10
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Provision for Loan Losses
The provision for loan loss reserves was $11,000 for each of the three month
periods ending September 30, 1996 and September 30, 1995. The provision for
loan losses reflects management's continuing evaluation of the possible loss
exposure in the loan portfolio.
Allowance for Loan Losses
The allowance for loan loss reserves increased by $43,000, or 9.66%, to
$488,000 at September 30, 1996, from $ 445,000 at September 30, 1995. The
increase in the allowance for potential loan losses was implemented by
management as a prudent risk-management strategy. Management does not believe
that any significant changes in portfolio risk have occurred during the three
month period ended September 30, 1996, as compared to the corresponding period
in 1995.
COMPARISON OF THE SIX MONTHS ENDED
SEPTEMBER 30, 1996 TO THE SIX MONTHS ENDED SEPTEMBER 30, 1995
Net Income
Net income for the six months ended September 30, 1996 decreased by $145,000,
or 58.23%, to $104,000, or $.32 per share, from $249,000, or $.78 per share,
for the six months ended September 30, 1995, as a result of a one-time
assessment by the FDIC to recapitalize the SAIF insurance fund during the six
month period ending September 30, 1996. Excluding the one-time assessment,
income for the six month period ending September 30, 1996 increased by
$65,000, or 26.10%, to $314,000, as compared to $249,000 for the corresponding
period last year.
There was a non-recurring gain on sale of securities of $46,000 during the six
month period ending September 30, 1996, as compared to no non-recurring gains
on sales of securities during the comparable period in 1995.
Loan fees and service charges decreased by $8,000, or 17.39%, to $38,000 for
the six month period ending September 30, 1996, as compared to $46,000 for the
six month period ending September 30, 1995.
Rental income decreased by $14,000, or 20.29%, to $55,000 for the six months
ending September 30, 1996, as compared to $69,000 for the same period last
year. The primary reason for the reduction in rental income for the six month
period ending September 30, 1996, as compared to the corresponding period last
year, was the sale of the Company's former Southside office property at 3600
Brooks Street in Missoula, Montana, on November 1, 1995, and the termination
of rental income from American Express Financial Services Inc., a tenant,
after that date.
Total other expense increased by $322,000, or 42.93%, to $1,072,000 for the
six month period ending September 30, 1996, from $750,000 for the six month
period ending September 30, 1995. The increase in other expense was primarily
the result of the one-time assessment by the FDIC to recapitalize the SAIF
insurance fund.
11
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Salaries and benefits decreased by $4,000, or 1.09%, to $363,000 for the six
month period ending September 30, 1996, from $367,000 for the comparable
period in 1995.
Occupancy expense decreased by $20,000, or 18.69%, to $87,000 for the six
month period ending September 30, 1996, as compared to $107,000 for the six
month period ending September 30, 1995. A primary reason for the reduction in
occupancy expense for the six month period ended September 30, 1996, as
compared to the same period last year, was the sale of the former Southside
Missoula office property at 3600 Brooks Street in Missoula, Montana on
November 1, 1995, and the occupancy of a new, smaller facility at 2237 34th
Street in Missoula after that date.
Income tax expense was reduced by $93,000, or 58.49%, to $66,000 for the six
month period ending September 30, 1996, as compared to $159,000 for the same
period last year. The primary reason for the reduction in income tax expense
during the six month period ending September 30, 1996, as compared to the six
month period ending September 30, 1995, was the reduction in income in 1996
resulting from the one-time assessment by the FDIC to recapitalize the SAIF
insurance fund.
Other expense decreased $3,000, or 2.21%, to $133,000 for the six month period
ending September 30, 1996, from $136,000 for the same period in 1995.
Net Interest Income
Net interest income increased by $60,000, or 5.65%, to $1,122,000 for the six
months ended September 30, 1996, as compared to $1,062,000 for the six months
ended September 30, 1995.
The cost of funds increased by 9 basis points, to 4.74% for the six month
period ended September 30, 1996, from 4.65% for the comparable period in 1995.
The yield on earning assets for the six month period ending September 30,
1996, was 7.71%, unchanged from the same period last year.
Provision for Loan Losses
Provision for loan losses was $21,000 for each of the six month periods ending
September 30, 1996, and September 30, 1995. The provision for loan losses
reflects management's continuing evaluation of the possible loan loss exposure
in the loan portfolio. Management does not believe that any significant
changes in portfolio risk have occurred during the six months ended September
30, 1996, as compared to the six months ended September 30, 1995.
12
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings - Periodically, there have been various claims and
lawsuits involving the Association, such as claims to enforce liens,
condemnation proceedings on properties in which the Association holds security
interests, claims involving the making and servicing of real property loans
and other issues incident to the Association's business. In the opinion of
management and the Company's legal counsel, no significant loss is expected
from any of such pending claims or lawsuits. Aside from such pending claims
and lawsuits which are incident to the conduct of the Company's ordinary
business, the Company is not a party to any material pending legal
proceedings.
Item 2. Changes in Securities - Not applicable.
Item 3. Defaults Upon Senior Securities - Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders - Not
applicable.
Item 5. Other Information - Not applicable.
Item 6. Exhibits and Reports on Form 8-K - None.
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.
BIG SKY BANCORP, INC.
DATE: November 8, 1996 BY:/s/Michael E. McKee
---------------- --------------------
Michael E. McKee
President
BY:/s/Ernest M. Kwiatkowski
----------------------------
Ernest M. Kwiatkowski
Vice President - Treasurer
13
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<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 2061000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
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0
0
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</TABLE>
