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, 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 : 0-25284
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, 1997
----- ----------------------------
Common Stock, par value $.01 311,721
per share
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FORM 10-QSB
FOR THE QUARTER ENDED September 30, 1997
INDEX
PART I - Financial Information Page Number
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
ASSETS
- ------- SEPTEMBER 30, MARCH 31,
1997 1997
( Unaudited )
-------- --------
Cash ( including interest-bearing accounts
of $ 1,949,000 and $ 1,813,000 ) $3,218,000 $3,017,000
Investment securities available for sale, at
fair value ( cost $ 137,000 and $ 134,000 ) 435,000 359,000
Mortgage-backed securities available for sale,
at fair value ( cost $ 7,241,000 and
$ 7,402,000 ) 7,321,000 7,420,000
Investment securities held to maturity, at
amortized cost ( fair value $ 11,137,000
and $ 12,911,000 ) 11,316,000 13,273,000
Mortgage-backed securities held to maturity, at
amortized cost (fair value $ 556,000 and
$606,000 ) 524,000 575,000
Loans receivable,net 36,292,000 35,315,000
Accrued interest receivable 308,000 315,000
Real estate owned --- ---
Investment in Federal Home Loan Bank Stock 1,935,000 1,862,000
Premises and equipment 1,296,000 1,335,000
Prepaid expenses and other assets 113,000 101,000
----------- -----------
TOTAL ASSETS $62,758,000 $63,572,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
LIABILITIES
Deposits $48,666,000 $50,072,000
Advances from Federal Home Loan Bank of Seattle 5,000,000 5,000,000
Advances from borrowers for taxes and insurance 671,000 527,000
Accrued expenses and other liabilities 186,000 161,000
Deferred taxes 684,000 638,000
----------- -----------
TOTAL LIABILITIES 55,207,000 56,398,000
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, ( $0.01 par value per share;
Authorized 1,500,000 shares; Issued
and outstanding, 311,721 and 308,721 ) 3,000 3,000
Capital surplus 670,000 610,000
Unearned portion of restricted stock issued
for future service (58,000) ---
Unrealized appreciation on securities
available for sale, net of tax 232,000 149,000
Retained earnings, substantially restricted 6,704,000 6,412,000
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 7,551,000 7,174,000
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $62,758,000 $63,572,000
========== ==========
1
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
( Unaudited )
-------- --------
INTEREST INCOME:
Loans receivable $ 810,000 $ 855,000
Investments securities 196,000 209,000
Mortgage-backed securities 137,000 58,000
FHLB stock dividends and other 54,000 52,000
--------------- -----------------
Total interest income 1,197,000 1,174,000
INTEREST EXPENSE 656,000 616,000
--------------- -----------------
Net interest income 541,000 558,000
Provision for loan losses (7,000) (11,000)
--------------- -----------------
Net interest income after provision
for loan losses 534,000 547,000
--------------- -----------------
OTHER INCOME:
Rental income 22,000 21,000
Loan fees and service charges 20,000 19,000
Gain on sale of investments --- 46,000
Other --- 1,000
--------------- -----------------
Total other income 42,000 87,000
--------------- -----------------
OTHER EXPENSES:
Salaries and employee benefits 161,000 189,000
Occupancy 50,000 43,000
FDIC insurance 14,000 36,000
SAIF assessment --- 345,000
Outside services 26,000 28,000
Advertising 6,000 8,000
Other expense 69,000 59,000
--------------- -----------------
Total other expense 326,000 708,000
--------------- -----------------
Income before income taxes 250,000 (74,000)
Income tax (provision) benefit (105,000) 29,000
--------------- -----------------
NET INCOME ( LOSS ) $ 145,000 $ (45,000)
======== ==========
NET INCOME ( LOSS )PER SHARE $ .44 $ ( .14 )
======== ==========
2
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
( Unaudited )
-------- --------
INTEREST INCOME:
Loans receivable $ 1,615,000 $ 1,722,000
Investments securities 407,000 400,000
Mortgage-backed securities 276,000 118,000
FHLB stock dividends and other 111,000 118,000
--------------- ----------------
Total interest income 2,409,000 2,358,000
INTEREST EXPENSE 1,305,000 1,236,000
--------------- ----------------
Net interest income 1,104,000 1,122,000
Provision for loan losses (15,000) (21,000)
--------------- -----------------
Net interest income after provision
for loan losses 1,089,000 1,101,000
--------------- -----------------
OTHER INCOME:
Rental income 54,000 55,000
Loan fees and service charges 39,000 38,000
Gain on sale of investments --- 46,000
Other 1,000 2,000
--------------- -----------------
Total other income 94,000 141,000
--------------- -----------------
OTHER EXPENSES:
Salaries and employee benefits 355,000 363,000
Occupancy 100,000 87,000
FDIC insurance 27,000 72,000
SAIF assessment --- 345,000
Outside services 52,000 54,000
Advertising 16,000 18,000
Other expense 135,000 133,000
--------------- -----------------
Total other expense 685,000 1,072,000
--------------- -----------------
Income before income taxes 498,000 170,000
Income tax expense 206,000 66,000
--------------- -----------------
NET INCOME $ 292,000 $ 104,000
======== =========
NET INCOME PER SHARE $ .88 $ .32
======== =========
3
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
( Unaudited )
OPERATING ACTIVITIES: -------- --------
Net income $ 292,000 $ 104,000
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 41,000 34,000
Provision for loan losses 15,000 21,000
Gain on sale of investments (46,000)
Federal Home Loan Bank stock dividend (73,000) (69,000)
Cash provided (used) by changes in operating
assets and liabilities:
Accrued interest receivable 7,000 3,000
Prepaid expenses and other assets (12,000) (107,000)
Accrued expenses and other liabilities 25,000 320,000
Deferred taxes 46,000 (105,000)
Deferred loan fees, net 4,000 28,000
---------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 345,000 183,000
INVESTING ACTIVITIES:
Principal repayments on loans 3,088,000 4,996,000
Loan originations (4,132,000) (3,656,000)
Principal repayments on mortgage-backed
securities available for sale 164,000 155,000
Principal repayments on mortgage-backed
securities held to maturity 52,000 66,000
Proceeds from maturity of investment
securities held to maturity 4,050,000 500,000
Purchase of investment securities held
to maturity (2,100,000) (1,687,000)
Purchase of investment securities
available for sale (3,000) (3,000)
Purchase of premises and equipment (1,000) (54,000)
---------- -----------
Net cash provided by investing activities 1,118,000 317,000
---------- -----------
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, 1997 SEPTEMBER 30, 1996
---------- -----------
( Unaudited )
FINANCING ACTIVITIES:
Net increase (decrease) in deposit
accounts due on demand (61,000) 333,000
Net decrease in certificate accounts (1,345,000) (1,959,000)
Net increase in advances from borrowers 144,000 129,000
---------- -----------
Net cash used in financing activities (1,262,000) (1,497,000)
---------- -----------
NET INCREASE (DECREASE) IN CASH 201,000 (997,000)
CASH, BEGINNING OF PERIOD 3,017,000 3,058,000
----------- -----------
CASH, END OF PERIOD $ 3,218,000 $ 2,061,000
=========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Fair value adjustment to securities
available for sale $ 378,000 $ 250,000
Income tax effect related to fair value
adjustment (146,000) (97,000)
Cash paid for:
Interest 1,305,000 1,247,000
Income taxes 213,000 167,000
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, 1997 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
Total assets decreased by $ 814,000, or 1.28%, to $ 62,758,000 at
September 30, 1997, as compared to $ 63,572,000 at March 31, 1997.
Deposits decreased by $ 1,406,000, or 2.81%, to $ 48,666,000 at September
30, 1997, as compared to $ 50,072,000 at March 31, 1997.
Net loans increased by $ 977,000, or 2.77%, to $ 36,292,000 at September
30, 1997, as compared to $ 35,315,000 at March 31, 1997.
Investments and mortgage-backed securities decreased by $ 2,031,000, or 9.39%,
to $ 19,596,000 at September 30, 1997, as compared to $ 21,627,000
at March 31, 1997.
Cash (including interest-bearing accounts), increased by $ 201,000, or
6.66%, to $ 3,218,000 at September 30, 1997, as compared to $ 3,017,000 at
March 31, 1997.
Capital Position
The Corporation's capital increased by $ 377,000, or 5.26%, to $ 7,551,000
at September 30, 1997, from $ 7,174,000 at March 31, 1997.
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, 1997, was as follows:
Amount Percentage of
Assets
Tangible capital..................... $ 7,050,000 11.3 %
Minimum tangible capital requirement. 936,000 1.5 %
--------- ------
Excess............................... $ 6,114,000 9.8 %
========= ======
Core capital......................... $ 7,050,000 11.3 %
Minimum core capital requirement..... 1,872,000 3.0 %
--------- ------
Excess............................... $ 5,178,000 8.3 %
========= ======
Risk-based capital................... $ 7,393,000 27.2 %
Minimum risk-based capital requirement. 2,178,000 8.0 %
--------- ------
Excess.................................$ 5,215,000 19.2 %
========= ======
Liquidity
The Company's liquidity ratio decreased to 16.91% at September 30, 1997,
from 19.56% at March 31, 1997. 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.
7
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Allowance for Loan Losses
The allowance for loan loss reserves increased by $ 16,000, or 3.15%, to
$ 524,000 at September 30, 1997, as compared to $ 508,000 at March 31, 1997.
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, 1997, as compared to March 31, 1997.
COMPARISON OF THE THREE MONTHS ENDED
SEPTEMBER 30, 1997 TO THE THREE MONTHS ENDED SEPTEMBER 30, 1996
General
Total assets increased by $ 3,017,000, or 5.05%, to $ 62,758,000 at September
30, 1997, from $ 59,741,000 at September 30, 1996.
Cash increased by $ 1,157,000, or 56.14%, to $ 3,218,000 at September 30, 1997,
as compared to $ 2,061,000 at September 30, 1996.
Investments and mortgage-backed securities increased by $ 1,723,000, or 9.64%,
to $ 19,596,000 at September 30, 1997, from $ 17,873,000 at September 30, 1996.
Net loans increased by $ 179,000, or .50%, to $ 36,292,000 at September 30,
1997, from $ 36,113,000 at September 30, 1996.
Total deposits decreased $ 2,551,000, or 4.98%, to $ 48,666,000 at September 30,
1997, from $ 51,217,000 at September 30, 1996.
The Corporation's capital increased by $ 654,000, or 9.48%, to $ 7,551,000 at
September 30, 1997, from $ 6,897,000 at September 30, 1996.
The Company did not have any real estate owned as a result of foreclosure at
September 30, 1997 or September 30, 1996.
Net Income
Net income for the three month period ended September 30, 1997 increased by $
190,000, or 422.22%, to $ 145,000, as compared to $ (45,000) for the three month
period ended September 30, 1996. During the three month period ended September
30, 1996, a one-time special assessment of $ 345,000 was paid to the FDIC to
recapitalize the SAIF insurance fund. No similar one time special assessments
were paid to the FDIC during the three month period ended September 30, 1997.
Excluding the one-time SAIF assessment, net income for the second quarter of
1997 decreased by $ 20,000, or 12.12%, to $ 145,000, as compared to
$ 165,000 for the same quarter last year.
8
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Earnings per share increased by $ .58, or 414.29%, to $ .44 per share for the
three months ended September 30, 1997, as compared to $ (.14) per share for the
comparable period in 1996, as a result of the one-time special assessment to
recapitalize the FDIC's SAIF insurance fund last year.
Total interest income increased by $ 23,000, or 1.96%, to $ 1,197,000 for the
three month period ending September 30, 1997, as compared to
$ 1,174,000 for the three month period ending September 30, 1996.
Interest and fees on loans decreased by $ 45,000, or 5.26%, for the quarter
ending September 30, 1997, to $ 810,000, as compared to $ 855,000, for the
quarter ending September 30, 1996.
Interest on investments decreased by $ 13,000, or 6.22%, to $ 196,000 for the
three month period ending September 30, 1997, as compared to $ 209,000 for the
corresponding quarter last year.
Interest on mortgage-backed securities increased by $ 79,000, or 136.21%, to $
137,000 for the quarter ending September 30, 1997, as compared to
$ 58,000 during the same period last year. The increase was primarily due to an
increase in the mortgage-backed securities portfolio of $ 4,668,000, or 149.76%,
to $ 7,785,000 for the three month period ending September 30, 1997, as compared
to $ 3,117,000 for the same period last year.
Other interest and dividends increased by $ 2,000, or 3.85%, to $ 54,000 for the
three month period ending September 30, 1997, as compared to
$ 52,000 for the three month period ending September 30, 1996.
Interest expense increased by $ 40,000, or 6.49%, to $ 656,000 for the three
month period ending September 30, 1997, as compared to $ 616,000 for the three
month period ending September 30, 1996.
Loan fees and service charges increased by $ 1,000, or 5.26%, to $ 20,000 for
the quarter ending September 30, 1997, from $ 19,000 for the quarter ending
September 30, 1996.
During the three month period ending September 30, 1996, a non-recurring gain on
the sale of securities held as available for sale was realized in the amount of
$ 46,000. No non-recurring gains on the sale of securities were realized during
the three month period ending September 30, 1997.
Rental income increased by $ 1,000, or 4.76%, to $ 22,000 for the three month
period ended September 30, 1997, as compared to $ 21,000 for the corresponding
period last year.
Salary and benefits expense decreased by $ 28,000, or 14.81%, to $ 161,000 for
the three month period ending September 30, 1997, as compared to
$ 189,000 for the three month period ending September 30, 1996. 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 three month period ending September 30, 1997.
Occupancy expense increased by $ 7,000, or 16.28%, to $ 50,000 for the three
month period ending September 30, 1997, as compared to $ 43,000 during the same
period in 1996.
9
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Expense for outside services decreased by $ 2,000, or 7.14%, for the three month
period ended September 30, 1997, as compared to the three month period ended
September 30, 1996, primarily as a result of decreased expense for data
processing services.
FDIC/SAIF insurance expense decreased by $ 367,000, to $ 14,000 for the three
month period ending September 30, 1997, as compared to $ 381,000 for the three
month period ending September 30, 1996. The decrease was due to the one-time
assessment levied by the FDIC to recapitalize the SAIF insurance fund during the
quarter ended September 30, 1996.
Income tax expense increased by $ 134,000, to $ 105,000 for three month period
ending September 30, 1997, as compared to an income tax benefit of $ 29,000 for
the same period last year, which resulted from the one-time assessment by the
FDIC to recapitalize the SAIF insurance fund during the quarter ending September
30, 1996.
Other expense increased by $ 10,000, or 16.95%, to $ 69,000 for the three month
period ending September 30, 1997, as compared to $ 59,000 for the three month
period ending September 30, 1996.
Net Interest Income
Net interest income decreased by $ 17,000, or 3.05%, to $ 541,000 for the three
month period ending September 30, 1997, as compared to $ 558,000 for the three
month period ending September 30, 1996.
Interest spread was reduced by 21 basis points, to 2.73% at September 30, 1997
as compared to 2.94% at September 30, 1996.
The cost of funds increased by 13 basis points, to 4.86% at September 30, 1997,
as compared to 4.73% at September 30, 1996.
The yield on earning assets decreased by 8 basis points, to 7.59% at September
30, 1997, as compared to 7.67% at September 30, 1996.
Average net interest margin decreased by 14 basis points, to 3.33% as of
September 30, 1997, from 3.47% as of September 30, 1996.
Liquidity
The Company's liquidity ratio decreased to 16.91% at September 30, 1997, from
17.09% at September 30, 1996.
Provision for Loan Losses
The provision for loan loss reserves decreased by $ 4,000, or 36.36%, to
$ 7,000 for the three month period ending September 30, 1997, as compared to $
11,000 for the three month period ending September 30, 1996. 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 $ 36,000, or 7.38%, to $
524,000 at September 30, 1997, from $ 488,000 at September 30, 1996. The
increase in the allowance for potential loan losses was implemented by
10
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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, 1997, as compared to the corresponding period
in 1996.
COMPARISON OF THE SIX MONTHS ENDED
SEPTEMBER 30, 1997 TO THE SIX MONTHS ENDED SEPTEMBER 30, 1996
Net Income
Net income for the six months ended September 30, 1997 increased by
$ 188,000, or 180.77%, to $ 292,000, or $ .88 per share, from $ 104,000, or $
.32 per share, for the six months ended September 30, 1996. The increase was
primarily 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, 1997 decreased by $ 22,000, or 7.01%, to $ 292,000, as compared to
$ 314,000 for the corresponding period last year.
A $ 46,000 non-recurring gain on sale of securities held as available for sale
was realized during the six month period ending September 30, 1996. No
non-recurring gains on sales of securities were realized during the six month
period ending September 30, 1997.
Loan fees and service charges increased by $ 1,000, or 2.63%%, to $ 39,000 for
the six month period ending September 30, 1997, as compared to $ 38,000 for the
six month period ending September 30, 1996.
Rental income decreased by $ 1,000, or 1.82%, to $ 54,000 for the six months
ending September 30, 1997, as compared to $ 55,000 for the same period last
year.
Total other expense decreased by $ 387,000, or 36.10%, to $ 685,000 for the six
month period ending September 30, 1997, from $ 1,072,000 for the six month
period ending September 30, 1996. The decrease in other expense was primarily
the result of the one-time assessment by the FDIC to recapitalize the SAIF
insurance fund last year.
Salaries and benefits decreased by $ 8,000, or 2.20%, to $ 355,000 for the six
month period ending September 30, 1997, from $ 363,000 for the comparable period
in 1996.
Occupancy expense increased by $ 13,000, or 14.94%, to $ 100,000 for the six
month period ending September 30, 1997, as compared to $ 87,000 for the six
month period ending September 30, 1996.
Income tax expense was increased by $ 140,000, or 212.12%, to $ 206,000 for the
six month period ending September 30, 1997, as compared to $ 66,000 for the same
period last year. The primary reason for the increase in income tax expense
during the six month period ending September 30, 1997, as compared to the six
month period ending September 30, 1996, was the income tax benefit received in
1996 resulting from the one-time assessment by the FDIC to recapitalize the SAIF
insurance fund.
11
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Other expense increased $ 2,000, or 1.50%, to $ 135,000 for the six month period
ending September 30, 1997, from $ 133,000 for the same period in 1996.
Net Interest Income
Net interest income decreased by $ 18,000, or 1.60%, to $ 1,104,000 for the six
months ended September 30, 1997, as compared to $ 1,122,000 for the six months
ended September 30, 1996.
The cost of funds increased by 8 basis points, to 4.82% for the six month period
ended September 30, 1997, from 4.74% for the comparable period in 1996.
The yield on earning assets decreased by 7 basis points, to 7.64% for the six
month period ending September 30, 1997, as compared to 7.71% for the six month
period ending September 30, 1996.
Provision for Loan Losses
Provision for loan losses decreased by $ 6,000, or 28.57%, to $ 15,000 for the
six month period ending September 30, 1997, as compared to $ 21,000 for the six
month period ending September 30, 1996. 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, 1997, as
compared to the six months ended September 30, 1996.
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 - On October 14, 1997, Michael E. McKee, President
and Chief Executive Officer and a Director of Big Sky Bancorp, Inc., and its
subsidiary, First Federal Savings and Loan Association of Montana, representing
the "McKee Family"; and Collette E. Maxwell, Executive Vice President and a
Director of Big Sky Bancorp, Inc., and its subsidiary, First Federal Savings and
Loan Association of Montana, representing the "Maxwell Family"; filed an
Interagency Notice of Change in Control application under Section 574 of the
Regulations of the Office of Thrift Supervision to acquire up to 35% of the
outstanding shares of stock of the institution. The application is pending.
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 17, 1997 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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Exhibit 27
Financial Data Schedule ( in thousands )
This schedule contains financial information extracted from the consolidated
financial statements of BIG SKY BANCORP, INC. for the quarter ended September
30, 1997 and is qualified in its entirety by reference to such financial
statements.
Financial Data
as of or for the
Item quarter ended
Number September 30, 199 Item Description
- ------------------------------------------------------------------------------
9-03 (1) 3,218 Cash and due from banks
9-03 (2) 1,949 Interest - bearing deposits
9-03 (3) 0 Federal funds sold - purchased securities for
resale
9-03 (4) 0 Trading account assets
9-03 (6) 7,756 Investment and mortgage backed securities held
for sale
9-03 (6) 11,840 Investment and mortgage backed securities held
to maturity - carrying value
9-03 (6) 11,693 Investment and mortgage backed securities held
to maturity - market value
9-03 (7) 36,292 Loans
9-03 (7) 524 Allowance for loan losses
9-03 (11) 62,758 Total assets
9-03 (12) 48,666 Deposits
9-03 (13) 0 Short - term borrowings
9-03 (15) 1,541 Other liabilities
9-03 (16) 5,000 Long - term debt
9-03 (19) 0 Preferred stock - mandatory redemption
9-03 (20) 0 Preferred stock - no mandatory redemption
9-03 (21) 3 Common stocks
9-03 (22) 7,548 Other stockholders' equity
9-03 (23) 62,758 Total liabilities and stockholders' equity
9-04 (1) 1,615 Interest and fees on loans
9-04 (2) 683 Interest and dividends on investments
9-04 (4) 111 Other interest income
9-04 (5) 2,409 Total interest income
9-04 (6) 1,171 Interest on deposits
9-04 (9) 1,305 Total interest expense
9-04 (10) 1,104 Net interest income
9-04 (11) 15 Provision for loan losses
9-04 (13) 0 Investment securities gain/ (losses)
9-04 (14) 685 Other expenses
9-04 (15) 498 Income/loss before income tax
9-04 (17) 498 Income/loss before extraordinary items
9-04 (18) 0 Extraordinary items, less tax
9-04 (19) 0 Cumulative change in accounting principles
9-04 (20) 292 Net income or loss
9-04 (21) 0.88 Earnings per share - primary
9-04 (21) 0.88 Earnings per share - fully diluted
I.B. 5 7.64% Net yield - interest earnings - actual
III.C.1. (a 0 Loans on non-accrual
III.C.1. (b 0 Accruing loans past due 90 days or more
III.C.2. (c 0 Troubled debt restructuring
III.C.2. 0 Potential problem loans
IV.A.1 508 Allowance for loan loss - beginning of period
IV.A.2 0 Total chargeoffs
IV.A.3 1 Total recoveries
IV.A.4 524 Allowance for loan loss - end of period
IV.B.1 524 Loan loss allowance allocated to domestic loans
IV.B.2 0 Loan loss allowance allocated to foreign loans
IV.B.3 0 Loan loss allowance - unallocated
<PAGE>
<PAGE>
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<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1997
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0
0
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