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, 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 0-24468
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 7, 1997:
$.01 par value common stock 417,457 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, 1997 and
September 30, 1997 (unaudited) 1
Statements of Income for the Three and Six Months Ended
September 30, 1996 and 1997 (unaudited) 2
Statement of Cash Flows for the Six Months
Ended September 30, 1996 and 1997 (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, 1997
ASSETS 1997 (unaudited)
----------- -------------
<S> <C> <C>
Cash and cash equivalents
Interest bearing $ 311,624 $ 1,300,410
Non-interest bearing 211,205 423,533
Held-to-maturity investment securities 8,700,000 6,700,000
Available-for-sale investment securities 2,061,727 2,098,572
Mortgage-backed securities held to maturity 13,273,398 11,657,475
Loans receivable, net 23,461,257 24,903,972
Accrued income receivable 330,277 321,302
Real estate owned and other
repossessed property, net 0 0
Office properties and equipment, net 598,633 584,889
Prepaid expenses and other assets 99,135 110,289
----------- -----------
$49,047,256 $48,100,442
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $34,293,278 $34,520,251
FHLB line of credit and advances 6,700,000 5,696,000
Advances from borrowers for taxes and insurance 32,830 107,934
Dividend payable 0 210,791
Deferred income 57,956 53,984
Accrued expenses and other liabilities 60,805 78,719
Income taxes
Deferred 79,531 83,254
Current 17,816 35,863
---------- ----------
41,242,216 40,786,796
---------- ----------
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 4,779,668 4,782,759
Retained income (substantially restricted) 4,392,507 4,440,956
Treasury Stock, at cost (64,766 shares at March 31,1997
and 97,668 shares at September 30, 1997) (881,996) (1,445,521)
Unamortized stock acquired by Employee Stock Ownership Plan (309,075) (309,075)
Unamortized stock acquired by Management Stock Bonus Plan (134,836) (124,766)
Net unrealized gain (loss) on available-for-sale securities (46,379) (35,858)
----------- -----------
Total Stockholders' Equity 7,805,040 7,313,646
---------- ----------
$49,047,256 $48,100,442
========== ==========
</TABLE>
Page 1
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------------------------- -----------------------------
1996 1997 1996 1997
----------- ------------ ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest on loans $ 527,392 $ 553,859 $1,047,389 $1,087,490
Interest and dividends
on investment securities 187,285 174,642 392,325 357,478
Interest on mortgage-
backed securities 192,084 199,393 347,554 416,033
--------- ---------- --------- ---------
Total interest income 906,761 927,894 1,787,268 1,861,001
--------- ---------- --------- ---------
INTEREST EXPENSE
Deposits 381,182 387,391 775,322 765,773
Borrowed money 66,373 92,910 104,796 195,896
--------- ---------- --------- ---------
Total interest expense 447,555 480,301 880,118 961,669
--------- ---------- --------- ---------
Net interest income 459,206 447,593 907,150 899,332
PROVISION FOR LOSSES
ON LOANS 7 439 492 1,313
--------- --------- --------- ---------
Net interest income
after provision for loan losses 459,199 447,154 906,658 898,019
--------- --------- --------- ---------
NON-INTEREST INCOME
Service charges and late fees 40,058 46,090 84,471 90,558
Other income 8,948 9,433 15,942 16,274
Gain (Loss) from real estate operations 574 769 1,874 3,965
--------- --------- ---------- ---------
49,580 56,292 102,287 110,797
--------- --------- --------- ---------
NON-INTEREST EXPENSE
Compensation and related expenses 150,851 157,366 299,114 308,084
Occupancy expense 20,681 16,417 32,047 29,160
Professional fees 39,667 42,983 68,047 67,601
Federal insurance premium 20,688 5,351 41,570 10,788
SAIF special assessment 224,776 0 224,776 0
Data processing 20,220 20,530 43,154 44,067
Bank charges 14,318 12,671 29,415 26,263
Other expense 65,826 52,887 114,858 117,247
--------- --------- --------- --------
557,027 308,205 852,981 603,210
--------- --------- --------- --------
Income before income taxes (48,248) 195,241 155,964 405,606
INCOME TAX EXPENSE(BENEFIT) (17,900) 65,900 54,100 145,750
--------- --------- --------- --------
Net income $ (30,348) $ 129,341 $ 101,864 $259,856
========= ========= ========= =======
PRIMARY:
Earnings per share $ (.07) $ .33 $ .23 $ .65
========= ========= ========= =======
Weighted average common shares
outstanding 426,274 396,420 433,600 401,934
========= ========= ========= =======
FULLY DILUTED:
Earnings per share $ (.07) $ .33 $ .23 $ .64
========= ======== ========= =======
Weighted average common shares
outstanding 427,701 396,646 434,300 403,284
========= ======== ========= =======
DIVIDENDS PER SHARE $ -- $ .50 $ -- $ .50
========= ======== ========= =======
</TABLE>
Page 2
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended September 30,
1996 1997
------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 101,864 $ 259,856
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 18,170 15,796
FHLB Stock dividend (19,700) (22,600)
Decrease (increase) in accrued interest receivable 79 8,975
Increase (decrease) in accrued and deferred
income taxes (19,901) 18,046
Increase (decrease) in accrued expenses (4,401) 17,914
Accrued assessment of special SAIF insurance premium 224,776 0
Amortization of premiums and discounts
on investments and loans 4,903 644
Amortization of deferred gain on sale of real estate owned (1,940) (3,972)
Provision for losses on loans and real estate owned 492 1,313
Amortization related to ESOP and MSBP 20,225 12,545
(Increase) decrease in other assets (9,687) (11,154)
----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 314,880 297,363
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net loan (originations) and principal payments
on loans held for investment 110,613 (1,433,440)
Principal repayments on mortgage-backed securities-
held to maturity 764,534 1,606,004
Acquisition of mortgage-backed investment securities-
held to maturity (4,727,289) 0
Acquisition of held to maturity investment securities (500,000) 0
Maturity of held to maturity investment securities 1,050,000 2,000,000
Acquisition of fixed assets (7,142) (2,052)
---------- ----------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (3,309,284) 2,170,512
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits (1,951,857) 225,660
Net increase (decrease) in escrow accounts 46,583 75,104
Proceeds from FHLB advance 7,900,000 6,000,000
Repayments of FHLB advance (3,200,000) (7,004,000)
Cash dividend paid (222,740) 0
Purchase of treasury stock (332,818) (563,525)
---------- -----------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES $ 2,239,168 $(1,266,761)
---------- ----------
</TABLE>
Page 3
Consolidated Statements of Cash Flow (Continued)
<PAGE>
<TABLE>
<CAPTION>
NET INCREASE (DECREASE) IN CASH
<S> <C> <C>
AND CASH EQUIVALENTS $ (755,236) $1,201,114
BEGINNING CASH AND CASH EQUIVALENTS 1,402,109 522,829
---------- ---------
ENDING CASH AND CASH EQUIVALENTS $ 646,873 $1,723,943
========= =========
SUPPLEMENTAL DISCLOSURES Cash paid for:
Interest on deposits and advances $ 780,838 $ 962,772
Income taxes 74,000 127,703
</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,
1997 are not necessarily indicative of the results which may be
expected for the year ending March 31, 1998.
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, 1997 and
September 30, 1997 is as follows:
<TABLE>
<CAPTION>
Carrying Value Market Value
March 31, September 30, September 30,
1997 1997 1997
----------------- --------------- -------------
<S> <C> <C> <C>
Held-to-maturity:
Bonds, notes and debentures:
Government Agency Securities $ 8,700,000 $ 6,700,000 $ 6,657,212
---------- ---------- ----------
Total held-to-maturity $ 8,700,000 $ 6,700,000 $ 6,657,212
========== ========== ==========
Available-for-sale:
Debt securities:
Government Agency Securities $ 1,500,000 $ 1,500,000 $ 1,443,972
Net unrealized loss (70,273) (56,028) 0
---------- ---------- ----------
1,429,727 1,443,972 1,443,972
---------- ---------- ----------
Equity securities:
Stock in Federal Home Loan Bank 632,000 654,600 654,600
---------- ---------- ----------
632,000 654,600 654,600
---------- ---------- ----------
Total available-for-sale $ 2,061,727 $ 2,098,572 $ 2,098,572
========== ========== ==========
</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, 1997 and September 30, 1997 is as follows:
<TABLE>
<CAPTION>
Carrying Value
-------------- Market Value
March 31, September 30, September 30,
1997 1997 1997
---------- ----------- ------------
<S> <C> <C> <C>
Mortgage-Backed Securities (Held-to-Maturity):
GNMA-ARM's $ 3,114,748 $ 2,864,242 $ 2,927,465
FNMA-ARM's 825,458 691,704 687,753
FHLMC-ARM's 1,376,203 1,297,711 1,302,172
FHLMC-fixed rate 1,380,450 1,325,956 1,338,086
GNMA-fixed rate 388,642 351,831 366,547
FNMA-fixed rate 684,623 649,135 637,441
Collateralized mortgage obligation
-Govt. Agency 5,383,306 4,366,846 4,402,637
---------- ----------- ------------
13,153,430 11,547,425 11,662,101
Unamortized premiums 127,799 118,780
Unearned discounts (7,831) (8,730)
---------- -----------
Total Mortgage-Backed Securities
(Held-to-Maturity) $13,273,398 $ 11,657,475 $ 11,662,101
========== =========== ============
</TABLE>
Page 6
<PAGE>
5. Loans Receivable, Net
A summary of the Bank's loans receivable at March 31, 1997 and
September 30, 1997 is as follows:
<TABLE>
<CAPTION>
March 31, September 30,
1997 1997
---------- ----------
<S> <C> <C>
Mortgage loans:
Secured by one to four family residences $17,273,266 $18,728,741
Secured by other properties 1,958,081 1,768,149
Construction loans 1,790,945 2,096,600
Other 579,276 551,740
---------- ----------
21,601,568 23,145,230
Less:
Unearned discounts and loan fees (72,996) (72,496)
Undisbursed loan proceeds (641,971) (1,222,428)
Allowance for loan losses (282,444) (282,444)
---------- ----------
Total mortgage loans 20,604,157 21,567,862
---------- ----------
Consumer and other loans:
Loans on deposits 403,099 479,535
Home equity and second mortgage 1,222,531 1,250,658
Other 1,325,718 1,691,190
---------- ----------
2,951,348 3,421,383
Less:
Allowances for loan losses (94,248) (85,273)
---------- ----------
Total consumer and other loans 2,857,100 3,336,110
---------- ----------
Net Loans Receivable $23,461,257 $24,903,972
========== ==========
</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,
---------------------------------- ----------------------------
1996 1997 1996 1997
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Balance, beginning $385,602 $375,099 $391,189 $376,692
Provision charged
to operations 7 439 492 1,313
Loans charged off,
net of recoveries 4,182 (7,821) (1,890) (10,288)
----------- --------- --------- ---------
$389,791 $367,717 $389,791 $367,717
======== ======== ======== ========
</TABLE>
Page 7
<PAGE>
6. Real Estate Owned or in Judgement, Including In-Substance Foreclosures
and Other Repossessed Property:
As of September 30, 1997 and March 31, 1997 the Company has no real
estate owned or other repossessed property.
7. 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, 1997, the Bank had outstanding commitments to fund
real estate loans of $264,000. This $264,000 in commitments is for two
loans, $214,600 to fund a fixed rate construction loan at 7.75% in
October 1997, the balance of $49,400 is for a fixed rate loan at 8.25%
for a 30 year term.
8. Earnings Per Share
Earnings per share for the three and six months ended September 30,
1996 and 1997, was computed by dividing net income by the weighted
average number of common shares outstanding, which is adjusted for
unallocated shares acquired by the Employee Stock Ownership Plan,
Treasury Stock repurchased, and other common stock equivalents.
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, 1997. 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, 1996
and 1997 and the six months ended September 30, 1996 and 1997.
Net income increased $159,689 or 526.19% from $(30,348) for the three
months ended September 30, 1996 to $129,341 for the three months ended September
30, 1997. This increase was primarily the result of the special assessment to
capitalize the SAIF insurance fund during the three months ended September 30,
1996.
Net income increased $157,992 or 155.10% from $101,864 for the six
months ended September 30, 1996 to $259,856 for the six months ended September
30, 1997. This increase is the result of the special assessment to capitalize
the SAIF fund during the six months ended September 30, 1996.
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 was $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 resulted in lowering future premiums for
insurance on deposits.
Net interest income before provision for losses on loans, for the three
months ended September 30, 1997 decreased $11,613 or 2.53% compared to the three
months ended September 30, 1996, from $459,206 to $447,593. This decrease was
mainly due to increased costs of deposits and borrowings offset by an increase
in interest on loans. Interest expense on deposits for the three months ended
September 30, 1996 compared to the three months ended September 30, 1997
increased by $6,209 or 1.62%, due to a slight increase in certificate deposits.
In addition to the increase in deposit interest expense there was an increase in
interest expense on borrowed money of $26,537. This increase in interest expense
on borrowed money was the result of the matching of spreads on new investments
with additional borrowings. These spreads were matched with similar base rates
and maturity dates to insure that the spread on earnings and cost were in place
for the term of the securities. Components of total interest income changed due
to related changes in the balance sheet structure. Interest income increased
$21,133 due to an increase in loan origination activity.
Net interest income for the six months ended September 30, 1997
decreased $7,818 or .86% from $907,150 for the six months ended September 30,
1996 to $899,332 for the six months ended September 30, 1997. Interest expense
on deposits for the six months period decreased $9,549 or 1.23% from $775,322
for the six months ended September 30, 1996 to $765,773 for the six months ended
September 30, 1997. This decrease in interest on deposits was offset by an
increase in interest expense on borrowed money of $91,100 from $104,796 for the
six months ended September 30, 1996 to $195,896 for the six months ended
September 30, 1997. This increase in interest expense on borrowed money was for
the same reason as stated above. Interest income increased $73,733 due to new
purchases of mortgage backed securities and origination of new loans.
Page 10
<PAGE>
Provision for loan losses increased from $7 for the three months ended
September 30, 1996 to $439 for the three months ended September 30, 1997. This
increase was based on management's evaluation of the adequacy of the allowance
for loan losses.
The provision for losses on loans increased for the six months ended
September 30, 1997 $821 or 166.87% from $492 for the six months ended September
30, 1996 to $1,313 for the six months ended September 30, 1997. This increase
was based on management's evaluation of the adequacy of the allowance for loan
losses.
Non-interest income increased $6,712 or 13.54% from $49,580 for the
three months ended September 30, 1996 to $56,292 for the three months ended
September 30, 1997. This increase was due to an increase in gain from real
estate operations, a slight increase in other income due to loan fees from loan
originations for a mortgage company, and an increase in service charges and late
fee due to increased loan originations.
Non-interest income for the six months ended September 30, 1997 was up
$8,510 or 8.32%. This increase was due to amortization of the deferred gain on
sales of real estate owned property, due to a loan pay off in the six months
ended September 30, 1997. Also there was an increase in service charges and late
fees during the six months ended September 30, 1997, due to loan fees from
increased loan originations.
Non-interest expense decreased $248,822 or 44.67% from $557,027 for the
three months ended September 30, 1996 to $308,205 for the three months ended
September 30, 1997. The primary source for the decrease in non-interest expense
was due to the special assessment to capitalize the SAIF insurance fund during
the three months ended September 30, 1996. The special SAIF assessment to
capitalize the SAIF insurance fund was $224,776. The SAIF insurance assessment
was reduced January 1, 1997 to approximately 6.4 basis points of deposits on an
annual basis from the previous level of 23 basis points. Due to this decrease in
assessment the premium for the three months ended September 30, 1996 compared to
September 30, 1997 decreased 15,337 or 74.13% from $20,688 to $5,351.
Non-interest expense for the six months ended September 30, 1997 was
down $249,771 or 29.28% from that for the six months ended September 30, 1996.
Non-interest expense decreased from $852,981 for the six month period ended
September 30, 1996 to $603,210 for the six month period ended September 30,
1997. Compensation and related expenses were up 3.00% or $8,970. Federal
insurance premiums were down $255,558 from $266,346 for the six months ended
September 30, 1996 to $10,788 for the six months ended September 30, 1997 as
discussed in the preceding paragraph.
Income tax expense was a net benefit of $17,900 for the three months
ended September 30, 1996 compared to expense of $65,900 for the same period in
1997. Income tax expense for the six months ended September 30, 1996 was $54,100
compared to $145,750 for the same period in 1997. The increase in income tax
expense for both the three and six month periods ended September 30, 1997
resulted from an increase in pretax income largely attributable to the accrual
of the special SAIF assessment during the prior year. Tax benefit attributable
to the SAIF assessment was approximately $78,000 for the three and six months
ended September 30, 1996.
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 18.18% at September 30, 1997. 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, 1997 the Bank had $0 borrowed on its line of credit from the Federal Home
Loan Bank. The available line of credit currently is set at $3,000,000 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
$3,500,000 and $2,196,000 in adjustable rate advances at the Federal Home Loan
Bank of Topeka outstanding at September 30, 1997.
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, 1997 cash and cash
equivalents were $1,723,943 up from $522,829 at March 31, 1997. The primary
reason for this increase is due to investment securities and mortgage backed
securities being called in. These excess funds are being used to fund new loan
originations and pay off maturing advances.
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, 1997 the Bank's capital
requirements and actual capital under the OTS regulations are as follows:
Amount Percent
(thousands) of Assets
Tangible capital:
Actual $ 6,457 13.54%
Required 715 1.50%
--------- -------
Excess $ 5,742 12.04%
========= ========
Core capital:
Actual $ 6,457 13.54%
Required 1,431 3.00%
--------- --------
Excess $ 5,026 10.54%
======== ========
Risk-based capital:
Actual $ 6,713 32.73%
Required 1,641 8.00%
---------- --------
Excess $ 5,072 24.73%
========= =======
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 22, 1997. The items submitted to a
vote of the stockholder's and the results of this vote were
presented in the June 30, 1997 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 (Item 7) was filed September 16, 1997. The report stated
that the Registrant announced that its Board of Directors had declared
a special cash dividend of $.50 per share to stockholders of record as
of October 1, 1997. A press release dated September 17, 1997 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 07, 1997 By /s/William L. Cunningham
----------------- ------------------------
William L. Cunningham
President and Chief Executive Officer
(Duly Authorized Representative)
Date November 07, 1997 By /s/Kimberly D. Walker
----------------- ----------------------
Kimberly D. Walker
Treasurer
(Principal Financial and Accounting Officer)
EXHIBIT 11
<PAGE>
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------------------ --------------------------
1996 1997 1996 1997
------- -------- -------- --------
<S> <C> <C> <C> <C>
Primary:
Weighted average common
shares outstanding 515,125 515,125 515,125 515,125
Dilutive effect of stock options 1,144 10,207 1,871 9,083
Average unallocated ESOP shares (35,029) (30,908) (35,029) (30,908)
Weighted average treasury
shares purchased (54,966) (98,004) (48,367) (91,366)
--------- --------- --------- ---------
Common stock equivalents 426,274 396,420 433,600 401,934
========= ========= ========= =========
Fully diluted:
Weighted average common
shares outstanding 515,125 515,125 515,125 515,125
Dilutive effect of stock options 2,571 10,433 2,571 10,433
Average unallocated ESOP shares (35,029) (30,908) (35,029) (30,908)
Weighted average treasury
shares purchased (54,966) (98,004) (48,367) (91,366)
--------- --------- --------- --------
Weighted average shares outstanding 427,701 396,646 434,300 403,284
========== ========== ========= ========
Net earnings $ (30,348) $ 129,341 $ 101,864 $ 259,856
========== ========= ======== ========
Earnings per share:
Primary $ (.07) $ .33 $ .23 $ .65
========== ========== ======== ========
Fully diluted $ (.07) $ .33 $ .23 $ .64
========== ========== ======== ========
</TABLE>
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> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> SEP-30-1997
<CASH> 424
<INT-BEARING-DEPOSITS> 1,300
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,099
<INVESTMENTS-CARRYING> 18,357
<INVESTMENTS-MARKET> 18,319
<LOANS> 25,272
<ALLOWANCE> (368)
<TOTAL-ASSETS> 48,100
<DEPOSITS> 34,520
<SHORT-TERM> 5,696
<LIABILITIES-OTHER> 570
<LONG-TERM> 0
0
0
<COMMON> 5
<OTHER-SE> 7,309
<TOTAL-LIABILITIES-AND-EQUITY> 48,100
<INTEREST-LOAN> 1,087
<INTEREST-INVEST> 774
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,861
<INTEREST-DEPOSIT> 766
<INTEREST-EXPENSE> 962
<INTEREST-INCOME-NET> 899
<LOAN-LOSSES> 1
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 603
<INCOME-PRETAX> 406
<INCOME-PRE-EXTRAORDINARY> 260
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 260
<EPS-PRIMARY> .65
<EPS-DILUTED> .64
<YIELD-ACTUAL> 3.20
<LOANS-NON> 374
<LOANS-PAST> 0
<LOANS-TROUBLED> 719
<LOANS-PROBLEM> 799
<ALLOWANCE-OPEN> 377
<CHARGE-OFFS> 11
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 367
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 259
</TABLE>
