UNITED STATES 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 0-24468
-------
Guthrie Savings, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Oklahoma 73-1452383
- ------------------------------- ---------------------
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification Number
120 NORTH DIVISION, GUTHRIE, OKLAHOMA 73044
-----------------------------------------------------
(Address and Zip Code of principal executive offices)
(405) 282-2201
-----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
-----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registration (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 [ ]
The number of shares outstanding of each of the issuer's classes of common
stock, as of November 9, 1996:
$.01 par value common stock 460,159 shares
--------------------------- --------------
(Class) (Outstanding)
<PAGE>
GUTHRIE SAVINGS, INC.
INDEX
Page Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition as of March 31, 1996 and
September 30, 1996 (unaudited) 1
Statements of Income for the Three and Six Months Ended
September 30, 1995 and 1996 (unaudited) 2
Statement of Cash Flows for the Six Months
Ended September 30, 1995 and 1996 (unaudited) 3-4
Notes to Financial Statements 5-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults in Senior Securities 14
Item 4. Submission of matters to a vote of security holders 14
Item 5. Other Information 14
Item 6(a). Exhibits 14
Item 6(b). Reports on Form 8-K 14
SIGNATURES 15
<PAGE>
GUTHRIE SAVINGS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
September 30,
March 31, 1996
ASSETS 1996 (unaudited)
--------------- ----------------
<S> <C> <C>
Cash and cash equivalents
Interest bearing $ 989,674 $ 322,106
Non-interest bearing 412,435 324,767
Held-to-maturity investment securities 9,750,531 9,200,067
Available-for-sale investment securities 2,133,093 2,147,710
Mortgage-backed securities held to maturity 9,428,366 13,376,941
Loans receivable, net 22,971,565 22,870,693
Accrued income receivable 363,528 363,449
Real estate owned and other
repossessed property, net 0 0
Office properties and equipment, net 627,836 616,808
Prepaid expenses and other assets 110,845 120,532
Prepaid income taxes 31,758 51,658
---------- ----------
$46,819,631 $49,394,731
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $36,310,860 $34,359,495
FHLB line of credit and advances 2,000,000 6,700,000
Advances from borrowers for taxes and insurance 40,298 86,881
Dividend payable 222,740 0
Deferred income 61,143 59,203
Accrued expenses and other liabilities 78,784 299,159
Income taxes
Deferred 57,151 55,423
---------- ----------
38,770,976 41,560,161
---------- ----------
Stockholders' Equity
Preferred stock, $.01 par value; 1,000,000
shares authorized, no shares outstanding 0 0
Common stock, $.01 par value; 3,000,000 shares
authorized; 515,125 shares issued and outstanding 5,151 5,151
Additional paid-in capital 4,765,516 4,765,516
Retained income (substantially restricted) 4,222,553 4,324,418
Treasury Stock, at cost (30,498 shares at March 31,1996
and 54,966 shares at September 30, 1996) (409,078) (741,896)
Unamortized stock acquired by Employee Stock Ownership Plan (350,285) (350,285)
Unamortized stock acquired by Management Stock Bonus Plan (175,286) (155,061)
Net unrealized gain (loss) on available-for-sale securities (9,916) (13,273)
---------- ----------
Total Stockholders' Equity 8,048,655 7,834,570
---------- ----------
$46,819,631 $49,394,731
========== ==========
</TABLE>
Page 1
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------------------- -----------------------
1995 1996 1995 1996
---------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest on loans ...................... $ 518,641 $ 527,392 $1,035,719 $1,047,389
Interest and dividends
on investment securities ............. 184,911 187,285 359,873 392,325
Interest on mortgage-
backed securities .................... 146,282 192,084 294,678 347,554
--------- --------- --------- ---------
Total interest income ........... 849,834 906,761 1,690,270 1,787,268
--------- --------- --------- ---------
INTEREST EXPENSE
Deposits ............................... 443,096 381,182 875,392 775,322
Borrowed money ......................... 0 66,373 9,423 104,796
--------- --------- --------- ---------
Total interest expense .......... 443,096 447,555 884,815 880,118
--------- --------- --------- ---------
Net interest income ............. 406,738 459,206 805,455 907,150
PROVISION FOR LOSSES
ON LOANS .................................. 625 7 1,219 492
--------- --------- --------- -------
Net interest income
after provision for loan losses 406,113 459,199 804,236 906,658
--------- --------- --------- -------
NON-INTEREST INCOME
Service charges and late fees .......... 40,610 40,058 81,998 84,471
Other income ........................... 6,233 8,948 12,185 15,942
Gain (Loss) from real estate operations (2,930) 574 115,698 1,874
--------- --------- --------- --------
43,913 49,580 209,881 102,287
--------- --------- --------- --------
NON-INTEREST EXPENSE
Compensation and related expenses ...... 142,108 150,851 278,003 299,114
Occupancy expense ...................... 17,274 20,681 31,269 32,047
Professional fees ...................... 54,489 39,667 77,450 68,047
Federal insurance premium .............. 19,730 20,688 40,542 41,570
SAIF special assessment ................ 0 224,776 0 224,776
Data processing ....................... 25,936 20,220 45,645 43,154
Bank charges ........................... 13,372 14,318 27,229 29,415
Other expense .......................... 66,387 65,826 119,058 114,858
--------- --------- --------- --------
339,296 557,027 619,196 852,981
--------- --------- --------- --------
Income before income taxes ...... 110,730 (48,248) 394,921 155,964
INCOME TAX EXPENSE(BENEFIT) ................ 47,450 (17,900) 134,450 54,100
--------- --------- --------- --------
Net income ...................... $ 63,280 $ (30,348) $ 260,471 $ 101,864
========= ========= ========= ========
EARNINGS PER SHARE ......................... $ .13 $ (.07) $ .54 $ .23
========= ========= ========= ========
DIVIDENDS PER SHARE ........................ -- -- -- --
</TABLE>
Page 2
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended September 30,
------------------------------
1995 1996
-------------- --------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income ............................................................. $ 260,471 $ 101,864
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ....................................................... 24,092 18,170
FHLB Stock dividend ................................................. 0 (19,700)
Decrease (increase) in accrued interest receivable ................. 5,773 79
Increase (decrease) in accrued and deferred
income taxes .................................................... 60,950 (19,901)
Increase (decrease) in accrued expenses ............................. 12,543 (4,401)
Accrued assessment of special SAIF insurance premium ................ 0 224,776
Amortization of premiums and discounts
on investments and loans ........................................ 33,529 4,903
Amortization of deferred gain on sale of real estate owned .......... (19,662) (1,940)
Provision for losses on loans and real estate owned ................ 1,219 492
Gain on sale of real estate owned ................................... (114,073) 0
Amortization related to ESOP and MSBP .............................. 0 20,225
(Increase) decrease in other assets ................................ 8,540 (9,687)
--------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES .................................. 273,382 314,880
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net loan (originations) and principal payments
on loans held for investment ......................................... 413,826 110,613
Principal repayments on mortgage-backed securities-
held to maturity ..................................................... 780,039 764,534
Acquisition of mortgage-backed investment securities-
held to maturity ..................................................... 0 (4,727,289)
Acquisition of held to maturity investment securities ................. 0 (500,000)
Maturity of held to maturity investment securities .................... 0 1,050,000
Sale of available for sale securities .................................. 300,000 0
Proceed from sale of real estate acquired in settlement of loans....... 225,182 0
Acquisition of fixed assets ........................................... 0 (7,142)
Other net ............................................................. (7,890) 0
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES .................................................. 1,711,157 (3,309,284)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits .................................... 1,825,443 (1,951,857)
Net increase (decrease) in escrow accounts ............................. 27,779 46,583
Proceeds from FHLB advance ............................................. 0 7,900,000
Repayments of FHLB advance ............................................ (1,700,000) (3,200,000)
Cash dividend paid ..................................................... 0 (222,740)
Purchase of treasury stock ............................................ 0 (332,818)
--------- ----------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES .................................................. $ 153,222 $ 2,239,168
--------- ----------
</TABLE>
Page 3
<PAGE>
Consolidated Statements of Cash Flow (Continued)
<TABLE>
<CAPTION>
NET INCREASE (DECREASE) IN CASH
<S> <C> <C>
AND CASH EQUIVALENTS $2,137,761 $ (755,236)
BEGINNING CASH AND CASH EQUIVALENTS 1,090,473 1,402,109
--------- ---------
ENDING CASH AND CASH EQUIVALENTS $3,228,234 $ 646,873
========= =========
SUPPLEMENTAL DISCLOSURES Cash paid for:
Interest on deposits and advances $ 886,694 $ 780,838
Income taxes 73,500 74,000
Loans to finance sale of real estate
acquired through foreclosure 22,500 0
Transfers from loans to real estate acquired
through foreclosure 164,432 0
</TABLE>
Page 4
<PAGE>
GUTHRIE SAVINGS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements were prepared in
accordance with the instructions for Form 10-QSB and, accordingly, do
not include all information and disclosures necessary to present
financial condition, results of operations and cash flows of Guthrie
Savings, Inc. (the "Company") and its wholly-owned subsidiary, Guthrie
Federal Savings Bank (the "Bank") in conformity with generally accepted
accounting principles. However, all normal recurring adjustments have
been made which, in the opinion of management, are necessary for the
fair presentation of the financial statements.
The results of operation for the six month period ended September 30,
1996 are not necessarily indicative of the results which may be expected
for the year ending March 31, 1997.
2. Mutual - To - Stock Conversion
On February 8, 1994, the Board of Directors of the Bank adopted a Plan
of Conversion to convert from a state chartered mutual savings and loan
association to a federally chartered stock savings bank with the
concurrent formation of Guthrie Savings, Inc. to act as a holding
company of the Bank (the "Conversion").
At the date of conversion, October 11, 1994, the Company completed the
sale of 515,125 shares of common stock, $.01 par value, through
concurrent subscription and community offerings at $10.00 per share.
Included in the total shares outstanding are 41,210 shares which were
purchased by the Bank's ESOP at $10.00 per share. Net proceeds from the
conversion, after recognizing conversion expenses and underwriting costs
of $382,975 were $4,768,275. From the net proceeds, the company used
$2,384,138 to purchase all of the capital stock of the Bank and $412,100
to fund the purchase of 41,210 shares of the company stock by the ESOP.
Subsequent to the conversion, neither the Bank nor the Company may
declare or pay cash dividends on any of their shares of common stock if
the effect would be to reduce stockholders' equity below applicable
regulatory capital requirements or if such declaration and payment would
otherwise violate regulatory requirements. Additionally, the Bank may
not declare or pay a cash dividend to the Company if the effect would
cause the net worth of the Bank to be reduced below the amount required
for the liquidation account (amounting to $3,410,000 as of date of
conversion).
Page 5
<PAGE>
3. Investment Securities
A summary of the Bank's investment securities as of March 31, 1996 and
September 30, 1996 is as follows:
<TABLE>
<CAPTION>
Carrying Value
--------------------------
Market Value
March 31, September 30, September 30,
1996 1996 1996
--------- ------------- -------------
Held-to-maturity:
Bonds, notes and debentures:
<S> <C> <C> <C>
United States Treasuries $ 1,550,531 $ 500,067 $ 501,094
Government Agency Securities 8,200,000 8,700,000 8,598,293
---------- ---------- ----------
Total held-to-maturity 9,750,531 9,200,067 9,099,387
---------- ---------- ----------
Available-for-sale:
Debt securities:
Government Agency Securities 1,500,000 1,500,000 1,433,516
Net unrealized loss (55,065) (66,484) 0
---------- ---------- ----------
1,444,935 1,433,516 1,433,516
---------- ---------- ----------
Equity securities:
Stock in U.S. Savings League 55,000 55,000 101,376
Stock in Federal Home Loan Bank 592,300 612,000 612,000
Other, at fair value 818 818 818
Net unrealized gain (loss) 40,040 46,376 0
---------- ---------- ----------
688,158 714,194 714,194
---------- ---------- ----------
Total available-for-sale 2,133,093 2,147,710 2,147,710
---------- ---------- ----------
Total Investment Securities $11,883,624 $11,347,777 $11,247,097
========== ========== ==========
</TABLE>
4. Mortgage-Backed Securities
All of the Bank's mortgage-backed securities are classified as
held-to-maturity. A summary of the Bank's mortgage-backed securities as
of March 31, 1996 and September 30, 1996 is as follows:
<TABLE>
<CAPTION>
Carrying Value
-------------------------------
Market Value
March 31, September 30, September 30,
1996 1996 1996
------------- ----------------- -------------
Mortgage-Backed Securities (Held-to-Maturity):
<S> <C> <C> <C>
GNMA-ARM's ................................. $ 3,669,165 $ 3,334,304 $ 3,376,556
FNMA-ARM's ................................. 937,910 880,904 873,327
FHLMC-ARM's ................................ 1,561,354 1,463,731 1,462,816
FHLMC-fixed rate ........................... 1,554,924 1,477,148 1,458,026
GNMA-fixed rate ............................ 454,441 419,181 428,639
FNMA-fixed rate ............................ 905,840 770,623 756,520
Collateralized mortgage obligation
-Govt. Agency .......................... 200,897 4,900,175 4,947,732
----------- ----------- -----------
9,284,531 13,246,066 13,303,616
Unamortized premiums ....................... 155,454 142,614
Unearned discounts ......................... (11,619) (11,739)
----------- ----------- -----------
Total Mortgage-Backed Securities
(Held-to-Maturity) ..................... $ 9,428,366 $ 13,376,941 $ 13,303,616
=========== =========== ===========
</TABLE>
Page 6
<PAGE>
5. Loan Receivable, Net
A summary of the Bank's loans receivable at March 31, 1996 and September
30, 1996 is as follows:
<TABLE>
<CAPTION>
March 31, September 30,
1996 1996
------------ -------------
Mortgage loans:
<S> <C> <C>
Secured by one to four family residences $17,905,894 $17,318,545
Secured by other properties 1,495,642 1,942,083
Construction loans 1,490,250 1,237,145
Other 578,004 563,466
---------- ----------
21,469,790 21,061,239
Less:
Unearned discounts and loan fees (76,607) (75,351)
Undisbursed loan proceeds (506,148) (506,814)
Allowance for loan losses (286,567) (286,567)
---------- ----------
Total mortgage loans 20,600,468 20,192,507
---------- ----------
Consumer and other loans:
Loans on deposits 507,757 382,341
Home equity and second mortgage 895,782 1,133,735
Other 1,072,203 1,265,358
---------- ----------
2,475,742 2,781,434
Less:
Undisbursed loan proceeds (23) (25)
Allowances for loan losses (104,622) (103,223)
---------- ----------
Total consumer and other loans 2,371,097 2,678,186
---------- ----------
Net Loans Receivable $22,971,565 $22,870,693
========== ==========
</TABLE>
A summary of the Bank's allowance for loan losses for the periods
indicated is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
----------------------------- ------------------------
1995 1996 1995 1996
--------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Balance, beginning $539,892 $385,602 $539,436 $391,189
Provision charged
to operations 625 7 1,219 492
Loans charged off,
net of recoveries (16,604) 4,182 (16,742) (1,890)
------- ------- ------- -------
$523,913 $389,791 $523,913 $389,791
======= ======= ======= =======
</TABLE>
Page 7
<PAGE>
6. Real Estate Owned or in Judgement, Including In-Substance Foreclosures and
Other Repossessed Property:
As of September 30, 1996 and March 31, 1996 the Company has no real estate
owned or other repossessed property.
6. Financial Instruments With Off Balance-Sheet Risk/Commitments
The bank is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financial needs of its customers
and to reduce its own exposure to fluctuations in interest rates. These
financial instruments include commitments to extend credit and commitments
to sell investments. These instruments involve, to varying degrees,
elements of credit and interest rate risk in excess of the amount
recognized in the Statement of Financial Condition. The contract or
notional amounts of those instruments reflect the extent of involvement the
Bank has in particular classes of financial instruments.
The Bank's exposure to credit loss in the event of non-performance by the
other party to the financial instrument for loan commitments is represented
by the contractual notional amount of those instruments. The Bank uses the
same credit policies in making commitments as it does for on-balance-sheet
instruments.
At September 30, 1996, the Bank had outstanding commitments to fund real
estate loans of $46,000. This $46,000 in commitments is for one fixed rate
loan at a rate of 8.00%.
8. Earnings Per Share
Earnings per share for the three and six months ended September 30, 1995
was computed by dividing net income by the weighted average number of
common shares outstanding of 475,975, which is adjusted for unallocated
shares acquired by the Employee Stock Ownership Plan.
Earnings per share for the three and six months ended September 30, 1996
was computed by dividing net income by the weighted average number of
common shares outstanding of 424,950 and 432,001, respectively, which is
adjusted for unallocated shares acquired by the Employee Stock Ownership
Plan and Treasury Stock repurchased.
Page 8
<PAGE>
Guthrie Savings, Inc.
Part I - Financial Information
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
General:
Guthrie Savings, Inc. (the "Company") was organized in May 1994 as the
holding company for Guthrie Federal Savings Bank (the "Bank"). The Company
issued its common stock in a Subscription and Community Offering in connection
with the conversion of Guthrie Federal Savings Bank from a federally chartered
mutual savings and loan association to a federally chartered stock savings bank
and the issuance of all of the Bank's outstanding capital stock to the Company.
The Offering closed on October 11, 1994 with the issuance of 515,125 shares of
common stock in Guthrie Savings, Inc.
Apart from the operations of the Bank, the Company did not engage in any
significant operations during the quarter ended September 30, 1996. The Bank is
primarily engaged in the business of accepting deposits from the general public
and using these funds to originate traditional real estate loans on one-to-four
family dwellings along with consumer loans. When deposit inflows exceeds loan
demand, the Bank will also purchase mortgage-backed securities and investment
securities.
Management Strategy:
Management's strategy has been to enhance earnings and profitability and
increase capital while maintaining asset quality. The Bank's lending strategy
has historically focused on the origination of traditional one-to-four family
mortgage loans with the primary emphasis on single family residences in the
Logan County area. Its secondary focus has been on consumer loans, second
mortgage loans and deposit loans and when available funds exceed loan demand,
the purchase of mortgage-backed securities and investment securities. This
focus, along with the adherence to underwriting standards, is designed to reduce
the risk of loss on the loan portfolio. The lack of diversification in its loan
portfolio structure does increase the Bank's portfolio concentration risk by
making the value of the portfolio more susceptible to declines in real estate
values in its market area. Management has made an effort to mitigate this risk
through the acquisition of mortgage-backed securities.
Page 9
<PAGE>
RESULTS OF OPERATIONS: COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1995
AND 1996 AND THE SIX MONTHS ENDED SEPTEMBER 30, 1995 AND 1996.
Net income decreased $93,628 or 147.96% from $63,280 for the three
months ended September 30, 1995 to ($30,348) for the three months ended
September 30, 1996. This decrease was primarily the result of the special
assessment to capitalize the SAIF insurance fund.
Net income decreased $158,607 or 60.89% from $260,471 for the six months
ended September 30, 1995 to $101,864 for the six months ended September 30,
1996. This decrease is the result of the special assessment to capitalize the
SAIF fund.
On September 30, 1996, President Clinton signed into law a bill that
provided for a special assessment of SAIF insured institutions amounting to 65.7
basis points applied to the institutions deposit base measured as of March 31,
1995. The total amount of the special assessment for Guthrie Federal Savings
Bank will be $224,776, which was accrued as of September 30, 1996 and included
in expense for the three and six months ended September 30, 1996. The after tax
effect of the assessment was to reduce net income by approximately $147,000 for
the three and six months ended September 30, 1996. Without the effect of the
assessment net income would have been approximately $116,000 and $249,000 for
the three and six months ended September 30, 1996, respectively. Earnings per
share without the effect of the assessment would have been approximately $.27
and $.58 for the three and six months ended September 30, 1996, respectively.
Capitalizing the insurance fund will result in lower future premiums for
insurance on deposits.
Net interest income before provision for losses on loans, for the three
months ended September 30, 1996 increased $52,468 or 12.90% compared to the
three months ended September 30, 1995, from $406,738 to $459,206. This increase
was mainly due to decreased costs of deposits and matching spreads on new
investments with additional borrowings. These spreads were matched with similar
base rates and maturity dates to insure that the spread on the earnings and cost
were in place for the term of the securities. During the three months ended
September 30, 1996 new investments of $2,750,000 in adjustable rate
Collateralized Mortgage Obligations were purchased funded by additional new
adjustable rate borrowings. These investments and borrowings are priced by the
same base rate for an average spread of +120 basis points. Interest expense on
deposits for the three months ended September 30, 1995 compared to the three
months ended September 30, 1996 decreased by $61,914 or 13.97%, due to the
combination of the maturity of a promotional account started in April 1995, and
the lowering of passbook and Demand Deposit Account rates. This decrease in
interest on deposits was offset by an increase in interest expense on borrowed
money of $66,373. Components of total interest income changed due to related
changes in the balance sheet structure. Interest income increased $56,927 due to
new purchases of investment and mortgage backed securities.
Net interest income for the six months ended September 30, 1996
increased $101,695 or 12.63% from $805,455 for the six months ended September
30, 1995 to $907,150 for the six months ended September 30, 1996, for the same
reasons as noted above. Interest expense on deposits for the six months period
decreased $100,070 or 11.43% from $875,392 for the six months ended September
30, 1995 to $775,322 for the six months ended September 30, 1996. This decrease
in interest on deposits was offset by an increase in interest expense on
borrowed money of $95,373 from $9,423 for the six months ended September 30,
1995 to $104,796 for the six months ended September 30, 1996. Interest income
increased $96,998 due to new purchases of investments and mortgage backed
securities.
Page 10
<PAGE>
Provision for loan losses decreased from $625 for the three months ended
September 30, 1995 to $7 for the three months ended September 30, 1996. This
decrease was based on management's evaluation of the adequacy of the allowance
for loan losses. During the quarter ended September 30, 1996 management did not
increase the allowance for losses on loans through the provision account as the
allowance was considered adequate based on the evaluation of the portfolio and
the level of delinquencies.
The provision for losses on loans decreased for the six months ended
September 30, 1996 $727 or 59.64% from $1,219 for the six months ended September
30, 1995 to $492 for the six months ended September 30, 1996. This decrease was
based on management's evaluation of the adequacy of the allowance for loan
losses.
Non-interest income increased $5,667 or 12.91% from $43,913 for the
three months ended September 30, 1995 to $49,580 for the three months ended
September 30, 1996. This increase was due to an increase in gain from real
estate operations and slight increase in other income due to loan fees from loan
originations for a mortgage company..
Non-interest income for the six months ended September 30, 1996 was down
$107,594 or 51.26%. This decrease was primarily due to a gain on sale of real
estate owned property of $114,073 during the six months ended September 30,
1995. There was an increase in fee income received, during the six months ended
September 30, 1996, due to loan fees from loan originations for a mortgage
company.
Non-interest expense increased $217,731 or 64.17% from $339,296 for the
three months ended September 30, 1995 to $557,027 for the three months ended
September 30, 1996. The primary source for the increase in non-interest expense
was due to the increase in compensation expenses and special assessment to
capitalize the SAIF insurance fund. Compensation expense increased primarily due
to the accrual of MSBP expense. The special SAIF assessment to capitalize the
SAIF insurance fund was $224,776.
Non-interest expense for the six months ended September 30, 1996 was up
$233,785 or 37.76% from that for the six months ended September 30, 1995.
Non-interest expense increased from $619,196 for the six month period ended
September 30, 1995 to $852,981 for the six month period ended September 30,
1996. Compensation and related expenses were up 7.59% or $21,111. Federal
insurance premiums were up $225,804 from $40,542 for the six months ended
September 30, 1995 to $266,346 for the six months ended September 30, 1996 as
discussed in the preceding paragraph.
Income tax expense was a net benefit of $17,800 for the three months
ended September 30, 1996 compared to expense of $47,450 for the same period in
1995. Income tax expense for the six months ended September 30, 1996 was $54,100
compared to $134,450 for the same period in 1995. The decrease in income tax
expense for both the three and six month periods resulted from a decrease in
pretax income largely attributable to the accrual of the special SAIF
assessment. Tax benefit attributable to the SAIF assessment was approximately
$78,000.
Page 11
<PAGE>
Liquidity and Capital Resources:
The Bank is required under applicable federal regulations to maintain
specified levels of "liquid" investments in qualifying types of U. S.
Government, federal agency and other investments having maturities of five years
or less. Current Office of Thrift Supervision ("OTS") regulations require that
the bank maintain liquid assets of not less than 5% of its average daily balance
of net withdrawable deposit accounts and borrowings payable in one year or less.
Guthrie's liquidity ratio was 19.96% at September 30, 1996. Management manages
its liquidity ratio to meet its funding needs for deposit outflows, loan
principal disbursements, operating expenses, and disbursements of payments
collected from borrowers for taxes and insurance. The Bank also manages its
liquidity ratio to meet its asset/liability management objectives.
The Bank's primary sources of funds are deposits, amortization and
prepayment of loans and mortgage-backed securities, maturities of investment
securities and funds provided by operations. In addition the Bank may borrow
funds from time to time from the Federal Home Loan Bank of Topeka. At September
30, 1996 the Bank had $500,000 borrowed on its line of credit from the Federal
Home Loan Bank. The available line of credit currently is set at $2,500,000 with
an adjustable interest rate. The Bank draws against the line to met current
liquidity needs. Besides the line of credit the Bank has a fixed rate advance of
$2,000,000 and $4,200,000 in adjustable rate advances at the Federal Home Loan
Bank of Topeka outstanding at September 30, 1996.
Scheduled loan repayments and maturing investment securities are a
relatively predictable source of funds. However, savings deposit flows and
prepayments of loans and mortgage-backed securities are influenced significantly
by changes in market interest rates, economic conditions and competition.
Management strives to manage the pricing of its deposits to maintain the
required projected cash needs. In some instances though, advances and lines of
credit provide lower incremental costs of funds than pricing deposits to attract
the new funds.
The Bank invests its excess funds in overnight deposits with the Federal
Home Loan Bank of Topeka, which generally provides liquidity to meet lending
requirements and savings withdrawal funding requirements. When warranted, cash
in excess of immediate funding needs is invested into longer-term investments
and mortgage-backed securities which typically earn a higher yield than
overnight deposits, some of which may also qualify as liquid investments under
current OTS regulations. At September 30, 1996 cash and cash equivalents were
$646,873 down from $1,402,109 at March 31, 1996. The primary reason for this
decrease is due an increase in the funding of loan originations and investment
securities purchases.
Page 12
<PAGE>
The Bank is required to maintain specified amounts of capital pursuant
to the Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") and regulations promulgated by OTS thereunder. The capital standards
generally require the maintenance of regulatory capital sufficient to meet a
tangible capital requirement, a core capital requirement, and a risk-based
capital requirement. These standards require financial institutions to have
minimum regulatory capital equal to 1.5% of tangible assets; minimum core
capital equal to 3.0% of adjusted tangible assets; and risk-based capital equal
to 8.0% of risk-based assets. At September 30, 1996 the Bank's capital
requirements and actual capital under the OTS regulations are as follows:
Amount Percent
(thousands) of Assets
----------- ---------
Tangible capital:
Actual $ 6,468 13.10%
Required 741 1.50%
------ ------
Excess $ 5,727 11.60%
====== ======
Core capital:
Actual $ 6,468 13.10%
Required 1,482 3.00%
------ ------
Excess $ 4,986 10.10%
====== ======
Risk-based capital:
Actual $ 6,723 32.93%
Required 1,634 8.00%
------ ------
Excess $ 5,089 24.93%
====== ======
Page 13
<PAGE>
GUTHRIE SAVINGS, INC.
Part II - Other Information
Item 1. Legal Proceedings
Not applicable
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
The annual meeting was held July 18, 1996. The items submitted to a
vote of the stockholder's and the results of this vote were presented
in the June 30, 1996 10-QSB.
Item 5. Other Information
Not applicable
Item 6. (a) Exhibit 11-Statement regarding computation of Earnings Per Share
Included in exhibit 11 is detail on computation of earnings per share.
Item 6. (b) Reports on Form 8 - K
Form 8-K was filed October 4, 1996. The report stated that the
Registrant announced that its Board of Directors had adopted a stock
repurchase program that authorizes the repurchase of up to 15% of the
outstanding shares of common stock. A press release dated October 4,
1996 was included as Exhibit 99.
Page 14
<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.
GUTHRIE SAVINGS, INC.
Date: November 7, 1996 By: /s/ William L. Cunningham
----------------------- -------------------------
William L. Cunningham
President and Chief Executive Officer
(Duly Authorized Representative)
Date: November 7, 1996 By: /s/ Kimberly D. Walker
----------------------- -------------------------
Kimberly D. Walker
Treasurer
(Principal Financial and Accounting
Officer)
EXHIBIT 11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
Three Months Ended Six Months Ended
September 30, September 30,
---------------------- ---------------------
1995 1996 1995 1996
-------- --------- --------- ----------
Weighted average common
<S> <C> <C> <C> <C>
shares outstanding 515,125 515,125 515,125 515,125
Average unallocated ESOP
shares (39,150) (35,029) (39,150) (35,029)
Weighted average treasury
shares purchased (54,966) (48,095)
Common stock equivalents 475,975 424,950 475,975 432,001
======== ======== ======== ========
Net earnings $ 63,280 $ (30,348) $ 260,471 $ 101,864
======== ======== ======== ========
Per share amount $ .13 $ (.07) $ .54 $ .23
======== ======== ======== ========
</TABLE>
Earnings per share have been computed on the treasury stock method.
Beginning with the completed stock offering date of October 11, 1994, the
Company accounts for the 41,210 shares acquired by the Employee Stock Ownership
Plan ("ESOP") in accordance with Statement of Position 93-6. In accordance with
this statement, shares controlled by the ESOP are not considered in the weighted
average shares outstanding until the shares are committed for allocation.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 324,767
<INT-BEARING-DEPOSITS> 322,106
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,577,008
<INVESTMENTS-CARRYING> 22,577,008
<INVESTMENTS-MARKET> 22,403,003
<LOANS> 23,842,673
<ALLOWANCE> 389,790
<TOTAL-ASSETS> 49,394,731
<DEPOSITS> 34,359,495
<SHORT-TERM> 4,700,000
<LIABILITIES-OTHER> 500,666
<LONG-TERM> 2,000,000
0
0
<COMMON> 5,151
<OTHER-SE> 7,829,419
<TOTAL-LIABILITIES-AND-EQUITY> 49,394,731
<INTEREST-LOAN> 1,047,389
<INTEREST-INVEST> 739,879
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,787,268
<INTEREST-DEPOSIT> 775,322
<INTEREST-EXPENSE> 880,118
<INTEREST-INCOME-NET> 907,150
<LOAN-LOSSES> 472
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 852,981
<INCOME-PRETAX> 155,964
<INCOME-PRE-EXTRAORDINARY> 101,864
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101,864
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
<YIELD-ACTUAL> 3.90
<LOANS-NON> 626,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 918,000
<LOANS-PROBLEM> 779,000
<ALLOWANCE-OPEN> 385,602
<CHARGE-OFFS> 0
<RECOVERIES> 4,188
<ALLOWANCE-CLOSE> 389,790
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 275,672
</TABLE>
