FORM 10-QSB
U.S. 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: December 31, 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 81-0494188
(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 January 31, 1997
Common Stock, par value $ .01 308,721
per share
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FORM 10-QSB
FOR THE QUARTER ENDED December 31, 1996
INDEX
PAGE NO.
PART I - Financial Information
Statements of Financial Condition 1
Statements of Income 2
Statements of Cash Flows 4
Note to Financial Statements 6
Management's Discussion and Analysis of
Financial Statements 7
PART II - Other Information 14
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PART I - FINANCIAL INFORMATION
BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS DECEMBER 31, 1996 MARCH 31, 1996
- ----------- ( Unaudited )
Cash ( including interest-bearing accounts
of $ 994,000 and $ 2,228,000 ) $2,218,000 $3,058,000
Investment securities available for sale, at
fair value ( cost $ 130,000 and $ 182,000 ) 361,000 396,000
Mortgage-backed securities available for sale,
at fair value ( cost $ 2,449,000 and
$ 2,600,000 ) 2,428,000 2,649,000
Investment securities held to maturity, at
amortized cost ( fair value $ 14,087,000
and $ 12,938,000 ) 12,923,000 13,233,000
Mortgage-backed securities held to maturity, at
amortized cost (fair value $ 639,000 and
$714,000 ) 598,000 685,000
Loans receivable,net 35,856,000 37,400,000
Accrued interest receivable 447,000 322,000
Real estate owned --- ---
Investment in Federal Home Loan Bank Stock 1,829,000 1,725,000
Premises and equipment 1,348,000 1,343,000
Prepaid expenses and other assets 78,000 111,000
---------------- ----------------
TOTAL ASSETS $ 58,086,000 $ 60,922,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------------
LIABILITIES
Deposits $ 50,101,000 $ 52,843,000
Advances from borrowers for taxes and insurance 246,000 550,000
Accrued expenses and other liabilities 131,000 155,000
Deferred taxes 560,000 578,000
---------------- ----------------
TOTAL LIABILITIES 51,038,000 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 181,000 161,000
Retained earnings, substantially restricted 6,254,000 6,027,000
---------------- ----------------
TOTAL STOCKHOLDERS' EQUITY 7,048,000 6,796,000
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 58,086,000 $ 60,922,000
========== ==========
1
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
( Unaudited )
INTEREST INCOME:
Interest and fees on loans receivable $809,000 $882,000
Interest on investments 207,000 147,000
Interest on mortgage backed securities 55,000 62,000
Other interest and dividends 57,000 106,000
------------- -------------
Total interest income $1,128,000 $1,197,000
INTEREST EXPENSE:
Deposits 599,000 662,000
------------- -------------
Net interest income 529,000 535,000
Provision for loan losses (10,000) (11,000)
------------- -------------
Net interest income after provision
for loan losses 519,000 524,000
------------- -------------
OTHER INCOME:
Loan fees and service charges 18,000 21,000
Rental income 20,000 19,000
Gain on sale of investment --- ---
Gain on sale of office building --- 616,000
Other 2,000 13,000
------------- -------------
Total other income 40,000 669,000
------------- -------------
OTHER EXPENSES:
Salaries and employee benefits 161,000 168,000
Occupancy 47,000 59,000
FDIC/SAIF insurance 36,000 36,000
Outside services 29,000 26,000
Advertising 17,000 19,000
Other expense 67,000 58,000
------------- -------------
Total other expense 357,000 366,000
------------- -------------
Income before income taxes 202,000 827,000
Income tax expense 79,000 321,000
------------- -------------
NET INCOME ( LOSS ) $123,000 $506,000
======== ========
NET INCOME PER SHARE $0.38 $1.56
===== =====
2
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
( Unaudited )
INTEREST INCOME:
Interest and fees on loans receivable $2,531,000 $2,657,000
Interest on investments 607,000 432,000
Interest on mortgage backed securities 173,000 188,000
Other interest and dividends 175,000 218,000
------------- -------------
Total interest income $3,486,000 $3,495,000
INTEREST EXPENSE:
Deposits $1,835,000 $1,898,000
------------- -------------
Net interest income $1,651,000 $1,597,000
Provision for loan losses ($31,000) ($32,000)
------------- -------------
Net interest income after provision
for loan losses $1,620,000 $1,565,000
------------- -------------
OTHER INCOME:
Loan fees and service charges 56,000 67,000
Rental income 75,000 88,000
Gain on sale of investment 46,000 ---
Gain on sale of office building --- 616,000
Other 4,000 15,000
------------- -------------
Total other income 181,000 786,000
------------- -------------
OTHER EXPENSES:
Salaries and employee benefits 524,000 535,000
Occupancy 134,000 166,000
FDIC/SAIF insurance 453,000 107,000
Outside services 83,000 77,000
Advertising 35,000 37,000
Other expense 200,000 194,000
------------- -------------
Total other expense 1,429,000 1,116,000
------------- -------------
Income before income taxes 372,000 1,235,000
Income tax expense 145,000 480,000
------------- -------------
NET INCOME $227,000 $755,000
======== ========
NET INCOME PER SHARE $0.70 $2.34
======== ========
3
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
( Unaudited )
OPERATING ACTIVITIES:
Net income 227,000 755,000
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 54,000 46,000
Provision for loan losses 31,000 32,000
Gain on sale of investments (46,000) --
Gain on sale of office building -- (616,000)
Federal Home Loan Bank stock dividend (104,000) (83,000)
Cash provided (used) by changes in operating
assets and liabilities:
Accrued interest receivable (125,000) (114,000)
Prepaid expenses and other assets 33,000 105,000
Accrued expenses and other liabilities (24,000) (77,000)
Deferred taxes (18,000) 84,000
Deferred loan fees, net 27,000 (10,000)
---------------- -----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 55,000 122,000
INVESTING ACTIVITIES:
Principal repayments on loans 6,014,000 4,902,000
Loan originations (4,546,000) (3,688,000)
Principal repayments on mortgage-backed
securities available for sale 245,000 224,000
Principal repayments on mortgage-backed
securities held to maturity 90,000 76,000
Proceeds from maturity of investment
securities 2,000,000 1,350,000
Proceeds from sale of investment securities 101,000 --
Purchase of investment securities (1,695,000) (3,004,000)
Purchase of premises and equipment (58,000) (673,000)
Proceeds from sale of office building -- 1,438,000
---------------- -----------------
Net cash provided by investing activities 2,151,000 625,000
---------------- -----------------
4
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BIG SKY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS ( Continued )
NINE MONTHS NINE MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
( Unaudited )
-------- --------
FINANCING ACTIVITIES:
Net increase (decrease) in deposit accounts
due on demand (108,000) (906,000)
Net increase (decrease) in certificate accounts (2,634,000) 2,632,000
Net increase in advances from borrowers (304,000) (312,000)
Stockholder redemption -- (831,000)
------------ ------------
Net cash provided (used) in financing activities (3,046,000) 583,000
------------ ------------
NET INCREASE ( DECREASE ) IN CASH (840,000) 1,330,000
CASH, BEGINNING OF PERIOD 3,058,000 1,652,000
------------ ------------
CASH, END OF PERIOD $2,218,000 $2,982,000
========= =========
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Fair value adjustment to securities available
for sale 296,000 282,000
Income tax effect related to fair value
adjustment (115,000) (109,000)
Cash paid for:
Interest 1,856,000 1,884,000
Income taxes 177,000 515,000
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
nine month periods ended December 31, 1996 are not necessarily
indicative of the results which may be expected for the entire 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.
The Corporation has not engaged in any significant activity other than
holding the stock of the Association. Accordingly, the information
set forth in this report, including financial statements and related
data, relates primarily to the Association.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL STATEMENTS
General
Total assets decreased $ 2,836,000, or 4.66%, to $ 58,086,000 at December
31, 1996, as compared to $ 60,922,000 at March 31, 1996.
Deposits decreased $ 2,742,000, or 5.19%, to $ 50,101,000 at December 31,
1996, as compared to $ 52,843,000 at March 31, 1996.
Net loans decreased $ 1,544,000, or 4.13%, to $ 35,856,000 at December 31,
1996, from $ 37,400,000 at March 31, 1996.
Investments and mortgage-backed securities decreased by $ 653,000, or
3.85%, to $ 16,310,000 at December 31, 1996, as compared to $ 16,963,000 at
March 31, 1996.
Cash (including interest bearing accounts), decreased by $ 840,000, or
27.47%, to $ 2,218,000 at December 31, 1996, as compared to $ 3,058,000 at
March 31, 1996.
Capital Position
The Corporation's capital increased by $ 252,000, or 3.71%, to
$ 7,048,000 at December 31, 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 December 31, 1996, was as follows:
Amount Percentage of
Assets
Tangible capital..................... $ 6,577,000 11.4 %
Minimum tangible capital requirement. 867,000 1.5 %
Excess............................... $ 5,710,000 9.9 %
========= ======
Core capital......................... $ 6,577,000 11.4 %
Minimum core capital requirement..... 1,734,000 3.0 %
Excess............................... $ 4,843,000 8.4 %
========= ======
Risk-based capital................... $ 6,909,000 26.2 %
Minimum risk-based capital requirement. 2,113,000 8.0 %
Excess.................................$ 4,796,000 18.2 %
========= ======
Liquidity
The Company's liquidity ratio increased to 18.76% at December 31, 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.
7
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Allowance for Loan Losses
The allowance for loan loss reserves increased by $ 31,000, or 6.64%, to
$ 498,000 at December 31, 1996, as compared to $ 467,000 at March 31, 1996.
The allowance is based upon managment'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 December 31, 1996, as compared to March 31, 1996.
COMPARISON OF THE THREE MONTHS ENDED
DECEMBER 31, 1996 TO THE THREE MONTHS ENDED DECEMBER 31, 1995
General
Total assets decreased by $ 3,521,000, or 5.72%, to $ 58,086,000 at
December 31, 1996, from $ 61,607,000 at December 31, 1995.
Total deposits decreased $ 3,949,000, or 7.31%, to $ 50,101,000 at December
31, 1996, from $ 54,050,000 at December 31, 1995.
Net loans decreased by $ 2,666,000, or 6.92%, to $ 35,856,000 at December
31, 1996, from $ 38,522,000 at December 31, 1995.
Investments and mortgage-backed securities decreased by $ 16,000, or .10%,
to $ 16,310,000 at December 31, 1996, from $ 16,326,000 at December 31,
1995.
The Corporation's capital increased by $ 420,000, or 6.34%, to
$ 7,048,000 at December 31, 1996, from $ 6,628,000 at December 31, 1995.
Net Income
Net income for the three month period ending December 31, 1996 decreased
by $ 383,000, or 75.69%, to $ 123,000, or $ .38 per share, as compared to
$ 506,000 or $ 1.56 per share, for the three month period ending December
31, 1995. The net income for the three month period ending December 31,
1995 included a pre-tax gain on sale of the Southside Missoula office
property of $ 616,000, however no gains on sale of property were recorded
during the three month period ending December 31, 1996.
Total interest income for the three month period ending December 31, 1996
decreased by $ 69,000, or 5.76%, to $ 1,128,000, as compared to $ 1,197,000
for the three month period ending December 31, 1995.
Interest on investments and mortgage-backed securities increased by
$ 53,000, or 25.36%, to $ 262,000 for the three month period ending
December 31, 1996, as compared to $ 209,000 for the three month period
ending December 31, 1995.
8
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The increase in interest and mortgage-backed securities was offset,
however, by a decrease in other interest and dividends of
$ 49,000, or 46.26%, to $ 57,000 for the three month period ending December
31, 1996, as compared to $ 106,000 for the comparable period in 1995.
Interest expense on deposits decreased by $ 63,000, or 9.52%, to $ 599,000
for the three month period ending December 31, 1996, as compared to
$ 662,000 for the three month period ending December 31, 1995. The
decrease in interest expense was primarily due to a combination of a
decrease in the level of deposits and lower interest rates paid on deposits
during the quarter ended December 31, 1996, as compared to 1995.
Loan fees and service charges decreased by $ 3,000, or 14.3%, to $ 18,000
for the three month period ending December 31, 1996, from $ 21,000 for the
three month period ending December 31, 1995.
Rental income increased by $ 1,000, or 5.3%, to $ 20,000 for the three
month period ending December 31, 1996, as compared to $ 19,000 for the
three month period ending December 31, 1995.
A $ 616,000 pre-tax non-recurring gain on sale of the Company's Southside
Missoula office was recognized during the three month period ending
December 31, 1995, however no non-recurring gains on sale of property were
recognized during the three month period ending December 31, 1996.
Other income decreased by $ 11,000, to $ 2,000 for the three month period
ending December 31, 1996, as compared to $ 13,000 for the three month
period ending December 31, 1995. The decrease was primarily due to the
reversal of an $ 8,000 accrual for potential contingent expenses which had
been established as a result of the dissenters' rights issue connected with
the corporate reorganization into the holding company form of ownership
during the three month period ending December 31, 1995, however no similar
accrual adjustments were made during the three month period ending December
31, 1996.
Salaries and benefits decreased by $ 7,000, or 4.17%, to $ 161,000 for the
quarter ending December 31, 1996, as compared to $ 168,000 for the
corresponding quarter in 1995.
Occupancy, advertising, outside services and other expense decreased by
$ 2,000, or 1.2%, to $ 160,000 for the three month period ending December
31, 1996, as compared to $ 162,000 for the same period in 1995.
Premiums on FDIC/SAIF insurance of $ 36,000 were paid during the three
month period ending December 31, 1996, unchanged from the same period last
year.
Total other expenses decreased by $ 9,000, or 2.5%, to $ 357,000 for the
quarter ending December 31, 1996, from $ 366,000 for the comparable period
in 1995.
Income tax expense decreased by $ 242,000, or 75.39%, to $ 79,000 for the
three month period ending December 31, 1996, as compared to $ 321,000 for
the three month period ending December 31, 1995. The decrease was
primarily due to the tax liability connected with the gain on sale of the
Southside Missoula office property during the three month period ending
December 31, 1995.
9
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Net Interest Income
Net interest income decreased by $ 6,000, or 1.12%, to $ 529,000 for the
three month period ending December 31, 1996, from $ 535,000 for the
corresponding period in 1995.
Interest spread increased by .10%, to 2.94% at December 31, 1996, from
2.84% at December 31, 1995.
The cost of funds decreased by .12%, to 4.69% at December 31, 1996, as
compared to 4.81% at December 31, 1995.
The decrease in the cost of funds was partially offset by a decrease in the
yield on earning assets of .02%, to 7.63% at December 31, 1996, as compared
to 7.65% at December 31, 1995.
Average net interest margin increased by 15 basis points, to 3.49% at
December 31, 1996, from 3.34% at December 31, 1995.
Liquidity
The Association's liquidity ratio decreased to 18.76% at December 31, 1996,
from 19.38% at December 31, 1995.
Provision for Loan Losses
The provision for loan loss reserves decreased by $ 1,000, or 9.1%, to
$ 10,000 for the three month period ending December 31, 1996, as compared
to $ 11,000 for the three month period ending December 31, 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 to $ 498,000 at December 31,
1996, from $ 456,000 at December 31, 1995.
Continuation of the increase in the allowance for potential loan losses has
been implemented by management as a prudent risk-management strategy.
Management does not believe, however, that any significant changes in
portfolio risk have occurred during the three month period ended December
31, 1996, as compared to the corresponding period in 1995.
COMPARISON OF THE NINE MONTHS ENDED
DECEMBER 31, 1996 TO THE NINE MONTHS ENDED DECEMBER 31, 1995
Net Income
Net income for the nine months ended December 31, 1996 decreased by
$ 528,000, or 69.93%, to $ 227,000, or $ .70 per share, from $ 755,000, or
$ 2.34 per share, for the nine months ended December 31, 1995.
Net income for the nine month period ending December 31, 1995 included a
pre-tax gain on sale of the Southside Missoula office property of
$ 616,000, however no gains on sale of property were recorded during the
nine month period ending December 31, 1996. In addition, a one-time
10
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special assessment of $ 344,000 was levied by the FDIC during the nine
month period ending December 31, 1996 to recapitalize the SAIF insurance
fund, however no one-time special assessments for FDIC insurance were
assessed during the corresponding nine month period last year.
Total interest income decreased by $ 9,000, or .26%, to $ 3,486,000 for the
nine month period ending December 31, 1996, from $ 3,495,000 for the
corresponding period in 1995.
Interest and fees on loans receivable decreased by $ 126,000, or 4.74%, to
$ 2,531,000 for the nine month period ending December 31, 1996, as compared
to $ 2,657,000 for the nine month period ending December 31, 1995.
Interest on investments and mortgage-backed securities increased by
$ 160,000, or 25.81%, to $ 780,000 for the nine month period ending
December 31, 1996, as compared to $ 620,000 for the corresponding period in
1995.
Other interest and dividends decreased by $ 43,000, or 19.72%, to
$ 175,000 for the nine month period ending December 31, 1996, from
$ 218,000 for the same period in 1995, primarily as a result of a decrease
in liquidity and a lower volume of interest bearing overnight funds and
short term investments.
Total interest expense decreased by $ 63,000, or 3.3%, to $ 1,835,000 for
the nine month period ending December 31, 1996, from $ 1,898,000 for the
nine month period ending December 31, 1995. The decrease in interest
expense was primarily the result of a lower volume of deposits during the
nine month period ending December 31, 1996, as compared to the same period
last year.
Loan fees and service charges decreased by $ 11,000, or 16.4%, to $ 56,000
for the nine month period ending December 31, 1996, from $ 67,000 for the
corresponding period in 1995.
Rental income decreased by $ 13,000, or 14.8%, to $ 75,000 for the nine
month period ending December 31, 1996, from $ 88,000 for the same period in
1995. The decrease in rental income was primarily the result of the sale
of the Southside Missoula office property in 1995, and the loss of rental
income from that facility.
Income from non-recurring gains on sale of investments of $ 46,000 was
received during the nine month period ending December 31, 1996, however no
income from non-recurring gains on sales of investments was received during
the same period last year.
A $ 616,000 pre-tax non-recurring gain on sale of the Company's Southside
Missoula office was recognized during the nine month period ending December
31, 1995, however no non-recurring gains on sale of property were
recognized during the nine month period ending December 31, 1996.
Salaries and employee benefits decreased by $ 11,000, or 2.06%, to
$ 524,000 for the nine month period ending December 31, 1996, from
$ 535,000 for the corresponding period in 1995.
Occupancy expense decreased by $ 32,000, or 19.28%, to $ 134,000 for the
nine month period ending December 31, 1996, from $ 166,000 for the nine
month period ending December 31, 1995.
11
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FDIC/SAIF insurance increased by $ 346,000, or 323.36%, to $ 453,000 for
the nine month period ending December 31, 1996, from $ 107,000 for the same
period in 1995. A one-time special assessment of $ 344,000 was levied by
the FDIC to recapitalize the SAIF insurance fund during the nine month
period ending December 31, 1996.
Expense for outside services and advertising increased by $ 4,000, or 3.5%,
to $ 118,000 for the nine month period ending December 31, 1996, as
compared to $ 114,000 for the nine month period ending December 31, 1995.
Other expense increased by $ 6,000, or 3.09%, to $ 200,000 for the nine
month period ending December 31, 1996, as compared to $ 194,000 for the
corresponding period in 1995.
Income tax expense decreased by $ 335,000, or 69.8%, to $ 145,000, for the
nine month period ending December 31, 1996, as compared to $ 480,000 for
the nine month period ending December 31, 1995. The decrease was primarily
due to the tax liability connected with the gain on sale of the Southside
Missoula office property last year.
Total other expense increased by $ 313,000, or 28.05%, to $ 1,429,000 for
the nine month period ending December 31, 1996, as compared to $ 1,116,000
for the nine month period ending December 31, 1995. The increase was due
to a one-time special assessment of $ 344,000 levied by the FDIC during the
nine month period ending December 31, 1996.
Net Interest Income
Net interest income increased by $ 54,000, or 3.38%, to $ 1,651,000 for the
nine month period ending December 31, 1996, from $ 1,597,000 for the
comparable period in 1995.
Interest spread decreased by 3 basis points, to 2.96% for the nine month
period ending December 31, 1996, as compared to 2.99% for the corresponding
period in 1995.
Average net interest margin increased by 7 basis points, to 3.51% for the
nine month period in 1996, as compared to 3.44% for the same period in
1995.
The cost of funds increased by 2 basis points, to 4.72% for the nine month
period ending December 31, 1996, as compared to 4.70% for the nine month
period ending December 31, 1995.
The yield on earning assets decreased by 1 basis point, to 7.68% for the
nine month period ending December 31, 1996, from 7.69% for the nine month
period ending December 31, 1995.
Provision for Loan Losses
Provision for loan losses decreased by $ 1,000, or 3.13%, to $ 31,000 for
the nine month period ended December 31, 1996, as compared to $ 32,000 for
the nine month period ended December 31, 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
12
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during the nine months ended December 31, 1996, as compared to the nine
months ended December 31, 1995.
13
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings - Periodically, there have been various claims
and lawsuits involving the Company, 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.
--------------------------------
(Registrant)
DATE: February 10, 1997 BY:/s/MICHAEL E. MCKEE
--------------------------------
Michael E. McKee
President
(Duly Authorized Officer)
BY:/s/ERNEST M. KWIATKOWSKI
--------------------------------
Ernest M. Kwiatkowski
Vice President - Treasurer
(Principal Financial Officer)
14
<PAGE>
<PAGE>
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