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 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 0-24468
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 February 6, 1997:
$.01 par value common stock 451,759 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
December 31, 1996 (unaudited) 1
Statements of Income for the Three and Nine Months Ended
December 31, 1995 and 1996 (unaudited) 2
Statement of Cash Flows for the Nine Months
Ended December 31, 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>
March 31, 1996
ASSETS 1996 (unaudited)
------------ -------------
Cash and cash equivalents
<S> <C> <C>
Interest bearing $ 989,674 $ 862,320
Non-interest bearing 412,435 296,191
Held-to-maturity investment securities 9,750,531 8,700,000
Available-for-sale investment securities 2,133,093 2,060,615
Mortgage-backed securities held to maturity 9,428,366 13,568,102
Loans receivable, net 22,971,565 22,945,104
Accrued income receivable 363,528 342,737
Real estate owned and other
repossessed property, net 0 17,500
Office properties and equipment, net 627,836 608,081
Prepaid expenses and other assets 110,845 96,960
Prepaid income taxes 31,758 18,583
------------ ------------
$ 46,819,631 $ 49,516,193
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $ 36,310,860 $ 33,781,175
FHLB line of credit and advances 2,000,000 7,700,000
Advances from borrowers for taxes and insurance 40,298 998
Dividend payable 222,740 0
Deferred income 61,143 58,609
Accrued expenses and other liabilities 78,784 97,716
Income taxes
Deferred 57,151 41,145
------------ ------------
38,770,976 41,679,643
------------ ------------
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 4,463,100
Treasury Stock, at cost (30,498 shares at March 31,1996
and 63,366 shares at December 31, 1996) (409,078) (860,996)
Unamortized stock acquired by Employee Stock Ownership Plan (350,285) (350,285)
Unamortized stock acquired by Management Stock Bonus Plan (175,286) (144,948)
Net unrealized gain (loss) on available-for-sale securities (9,916) (40,988)
------------ ------------
Total Stockholders' Equity 8,048,655 7,836,550
------------ ------------
$ 46,819,631 $ 49,516,193
============ ============
</TABLE>
Page 1
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------- --------------------------
1995 1996 1995 1996
------------ ------------ ------------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest on loans $ 524,740 $ 513,444 $1,560,458 $1,560,833
Interest and dividends
on investment securities 183,386 187,626 543,258 579,951
Interest on mortgage-
backed securities 150,377 203,372 445,055 550,926
---------- ---------- ---------- ----------
Total interest income 858,503 904,442 2,548,771 2,691,710
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits 442,266 380,973 1,317,658 1,156,295
Borrowed money 0 97,866 9,423 202,662
---------- ---------- ---------- ----------
Total interest expense 442,266 478,839 1,327,081 1,358,957
---------- ---------- ---------- ----------
Net interest income 416,237 425,603 1,221,690 1,332,753
PROVISION FOR LOSSES
ON LOANS 521 0 1,740 492
---------- ---------- ---------- ----------
Net interest income
after provision for loan losses 415,716 425,603 1.219,950 1,332,261
---------- ---------- ---------- ----------
NON-INTEREST INCOME
Service charges and late fees 40,616 39,157 122,614 123,628
Other income 5,721 6,739 17,906 22,681
Gain (loss) from sale of investments 0 46,376 0 46,376
Gain (loss) from real estate operations 16,335 (815) 132,033 1,059
---------- ---------- ---------- ----------
62,672 91,457 272,553 193,744
---------- ---------- ---------- ----------
NON-INTEREST EXPENSE
Compensation and related expenses 150,196 161,419 428,198 460,533
Occupancy expense 18,942 17,159 50,211 49,206
Professional fees 22,896 24,914 100,345 92,962
Federal insurance premium 20,939 20,942 61,480 61,855
SAIF special assessment 0 0 0 225,433
Data processing 25,784 19,841 71,429 62,995
Bank charges 12,238 14,401 39,467 43,816
Other expense 47,879 48,702 166,938 163,559
---------- ---------- ---------- ----------
298,874 307,378 918,068 1,160,359
---------- ---------- ---------- ----------
Income before income taxes 179,514 209,682 574,435 365,646
INCOME TAX EXPENSE 62,200 71,000 196,650 125,100
---------- ---------- ---------- ----------
Net income $ 117,314 $ 138,682 $ 377,785 $ 240,546
========== ========== ========== ==========
PRIMARY:
Earning per share $ .25 $ .33 $ .80 $ .56
========== ========== ========== ==========
Weighted average common shares
outstanding 476,292 426,520 475,175 431,874
========== ========== ========== ==========
FULLY DILUTED:
Earnings per share $ .25 $ .32 $ .79 $ .55
========== ========== ========== ==========
Weighted average common shares
outstanding 476,742 428,802 478,457 436,372
========== ========== ========== ==========
DIVIDENDS PER SHARE -- -- -- --
</TABLE>
Page 2
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended December 31,
----------------------------------------
1995 1996
-------------- ---------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 377,785 $ 240,546
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 36,138 27,580
FHLB Stock dividend (9,400) (29,600)
Decrease (increase) in accrued interest receivable 56,258 20,791
Increase (decrease) in accrued and deferred
income taxes 70,556 13,175
Increase (decrease) in accrued expenses 46,891 18,932
Amortization of premiums and discounts
on investments and loans 29,579 8,614
Amortization of deferred gain on sale of real estate owned (23,344) (2,534)
Provision for losses on loans and real estate owned 1,740 492
Gain on sale of real estate owned (122,070) 0
Amortization related to ESOP and MSBP 0 30,338
(Increase) decrease in other assets 41,034 13,885
------------ -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 505,167 342,219
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net loan (originations) and principal payments
on loans held for investment 288,015 31,290
Principal repayments on mortgage-backed securities-
held to maturity 1,101,851 1,067,839
Acquisition of mortgage-backed investment securities-
held to maturity (1,000,965) (5,227,289)
Acquisition of held to maturity investment securities (1,250,000) (500,000)
Maturity of held to maturity investment securities 1,600,000 1,550,000
Sale of available for sale securities 300,000 55,000
Proceed from sale of real estate acquired in settlement of loans 334,501 0
Acquisition of fixed assets 0 (7,825)
Other net (11,782) 0
------------ -------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES 1,361,620 (3,030,985)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 2,047,019 (2,530,177)
Net increase (decrease) in escrow accounts (5,026) (49,997)
Proceeds from FHLB advance 0 9,400,000
Repayments of FHLB advance (1,700,000) (3,700,000)
Cash dividend paid 0 (222,740)
Purchase of treasury stock (194,624) (451,918)
Purchase of management stock bonus plan shares (275,083) 0
------------ -------------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES $ (127,714) $ 2,445,168
------------ -------------
</TABLE>
Page 3
<PAGE>
Consolidated Statements of Cash Flow (Continued)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $1,739,073 $ (243,598)
BEGINNING CASH AND CASH EQUIVALENTS 1,090,473 1,402,109
---------- -----------
ENDING CASH AND CASH EQUIVALENTS $2,829,546 $1,158,511
========== ==========
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest on deposits and advances $ 1,331,485 $1,158,668
Income taxes 126,094 111,925
Loans to finance sale of real estate
acquired through foreclosure 29,500 0
Transfers from loans to real estate acquired
through foreclosure 164,432 17,500
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 nine month period ended December 31, 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
December 31, 1996 is as follows:
Carrying Value Market Value
---------------------------- -------------
March 31, December 31, December 31,
1996 1996 1996
----------- -------------- -------------
Held-to-maturity:
Bonds, notes and debentures:
United States Treasuries $ 1,550,531 $ 0 $ 0
Government Agency Securities 8,200,000 8,700,000 8,628,252
----------- ----------- -----------
Total held-to-maturity $ 9,750,531 $ 8,700,000 $ 8,628,252
=========== =========== ===========
Available-for-sale:
Debt securities:
Government Agency Securities $ 1,500,000 $ 1,500,000 $ 1,437,897
Net unrealized loss (55,065) (62,103) 0
----------- ----------- -----------
1,444,935 1,437,897 1,437,897
----------- ----------- -----------
Equity securities:
Stock in U.S. Savings League 55,000 0 0
Stock in Federal Home Loan Bank 592,300 621,900 621,900
Other, at fair value 818 818 818
Net unrealized gain (loss) 40,040 0 0
----------- ----------- -----------
688,158 622,718 622,718
----------- ----------- -----------
Total available-for-sale $ 2,133,093 $ 2,060,615 $ 2,060,615
=========== =========== ===========
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 December 31, 1996 is as follows:
<TABLE>
<CAPTION>
Carrying Value Market Value
------------------------------
March 31, December 31, December 31,
1996 1996 1996
------------- --------------- ---------------
Mortgage-Backed Securities (Held-to-Maturity):
<S> <C> <C> <C>
GNMA-ARM's $ 3,669,165 $ 3,217,322 $ 3,273,978
FNMA-ARM's 937,910 835,634 831,581
FHLMC-ARM's 1,561,354 1,415,965 1,422,603
FHLMC-fixed rate 1,554,924 1,420,924 1,414,203
GNMA-fixed rate 454,441 406,071 417,978
FNMA-fixed rate 905,840 755,476 745,685
Collateralized mortgage obligation
-Govt. Agency 200,897 5,391,370 5,447,643
------------ ------------- -------------
9,284,531 13,442,762 13,553,671
Unamortized premiums 155,454 136,605
Unearned discounts (11,619) (11,265)
------------ ------------- -------------
Total Mortgage-Backed Securities
(Held-to-Maturity) $ 9,428,366 $ 13,568,102 $ 13,553,671
============ ============= =============
</TABLE>
Page 6
<PAGE>
5. Loan Receivable, Net
A summary of the Bank's loans receivable at March 31, 1996 and December
31, 1996 is as follows:
March 31, December 31,
1996 1996
------------ --------------
Mortgage loans:
Secured by one to four family residences $ 17,905,894 $ 16,945,883
Secured by other properties 1,495,642 1,860,906
Construction loans 1,490,250 1,132,145
Other 578,004 605,584
------------ ------------
21,469,790 20,544,518
Less:
Unearned discounts and loan fees (76,607) (73,460)
Undisbursed loan proceeds (506,148) (122,244)
Allowance for loan losses (286,567) (286,567)
------------ ------------
Total mortgage loans 20,600,468 20,062,247
------------ ------------
Consumer and other loans:
Loans on deposits 507,757 498,987
Home equity and second mortgage 895,782 1,185,379
Other 1,072,203 1,298,312
------------ ------------
2,475,742 2,982,678
Less:
Undisbursed loan proceeds (23) 0
Allowances for loan losses (104,622) (99,821)
------------ ------------
Total consumer and other loans 2,371,097 2,882,857
Net Loans Receivable $ 22,971,565 $ 22,945,104
============ ============
A summary of the Bank's allowance for loan losses for the periods
indicated is as follows:
Three Months Ended Nine Months Ended
December 31, December 31,
------------------------ -----------------------
1995 1996 1995 1996
----------- ------------ ---------- ----------
Balance, beginning $ 523,913 $ 389,791 $ 539,436 $ 391,189
Provision charged
to operations 521 0 1,740 492
Loans charged off,
net of recoveries 1,755 (3,403) (14,987) (5,293)
--------- --------- --------- ---------
$ 526,189 $ 386,388 $ 526,189 $ 386,388
========= ========= ========= =========
Page 7
<PAGE>
6. Real Estate Owned or in Judgement, Including In-Substance Foreclosures and
Other Repossessed Property:
March 31, December 31,
1996 1996
-------- ------------
Real estate acquired by foreclosure $ 0 $ 17,500
Other repossessed assets 0 0
Allowance for loss 0 0
------- ---------
Total $ 0 $ 17,500
======= =========
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 December 31, 1996, the Bank had no outstanding commitments to fund real
estate loans.
8. Earnings Per Share
Earnings per share for the three and nine months ended December 31, 1995
and December 31, 1996, 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.
9. Subsequent Events
On January 14, 1997 the Board of Directors declared a special cash dividend
of $0.50 per share to stockholders of record as of January 31, 1997, with a
February 10, 1997 payment date. The cash dividend is being paid as a result
of continued profitability of the Company and the Bank. The payment of
future dividends will be subject to the Board's periodic review of the
financial condition, earnings and capital requirements of the Company and
the Bank.
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 December 31, 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 December 31, 1995
and 1996 and the nine months ended December 31, 1995 and 1996.
Net income increased $21,368 or 18.21% from $117,314 for the three months
ended December 31, 1995 to $138,682 for the three months ended December 31,
1996. This increase was primarily the result of a gain on the sale of the U.S.
Savings League Stock.
Net income decreased $137,239 or 36.33% from $377,785 for the nine months
ended December 31, 1995 to $240,546 for the nine months ended December 31, 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 was $225,433, which was accrued as of September 30, 1996. The after tax
effect of the assessment was to reduce net income by approximately $147,000 for
the nine months ended December 31, 1996. Without the effect of the assessment
net income would have been approximately $388,000 for the nine months ended
December 31, 1996. Earnings per share without the effect of the assessment would
have been approximately $.91 for nine months ended December 31, 1996.
Beginning January 1, 1997, deposit insurance assessments for SAIF members
are expected to be reduced to approximately 6.4 basis points of deposits on an
annual basis through the end of 1999 from the previous level of 23 basis points.
As a result of these changes, beginning January 1, 1997, the rate of deposit
insurance assessed the Association will decline by approximately 70%. Through
1999, BIF members are expected to be assessed at approximately 1.3 basis points
on deposits. Thereafter, assessments for BIF and SAIF members should be the same
and SAIF and BIF may be merged. It is expected that these continuing assessments
for both SAIF and BIF members will be used to repay outstanding Financing
Corporation bond obligations.
Net interest income before provision for losses on loans, for the three
months ended December 31, 1996 increased $9,366 or 2.25% compared to the three
months ended December 31, 1995, from $416,237 to $425,603. 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
December 31, 1996 new investments of $500,000 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 +125 basis points. Interest expense on deposits for the
three months ended December 31, 1995 compared to the three months ended December
31, 1996 decreased by $61,293 or 13.85%, 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 $97,866. Components of
total interest income changed due to related changes in the balance sheet
structure. Interest income increased $45,939 due to new purchases of investment
and mortgage backed securities.
Net interest income for the nine months ended December 31, 1996 increased
$111,063 or 9.09% from $1,221,690 for the nine months ended December 31, 1995 to
$1,332,753 for the nine months ended December 31, 1996, for the same reasons as
noted above. Interest expense on deposits for the nine month period decreased
$161,363 or 12.25% from $1,317,658 for the nine months ended December 31, 1995
to $1,156,295 for the nine months ended December 31, 1996.
Page 10
<PAGE>
This decrease in interest on deposits was offset by an increase in interest
expense on borrowed money of $193,239 from $9,423 for the nine months ended
December 31, 1995 to $202,662 for the nine months ended December 31, 1996.
Interest income increased $142,939 due to new purchases of investments and
mortgage backed securities.
Provision for loan losses decreased from $521 for the three months ended
December 31, 1995 to $0 for the three months ended December 31, 1996. This
decrease was based on management's evaluation of the adequacy of the allowance
for loan losses. During the quarter ended December 31, 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 nine months ended
December 31, 1996 $1,248 or 71.72% from $1,740 for the nine months ended
December 31, 1995 to $492 for the nine months ended December 31, 1996. This
decrease was based on management's evaluation of the adequacy of the allowance
for loan losses.
Non-interest income increased $28,785 or 45.93% from $62,672 for the three
months ended December 31, 1995 to $91,457 for the three months ended December
31, 1996. This increase was due to a gain on the sale of U.S. Savings League
stock of $46,376 offset by a decrease in the gain from real estate operations.
Non-interest income for the nine months ended December 31, 1996 was down
$78,809 or 28.92%. This decrease was primarily due to a gain on sale of real
estate owned property of $114,073 during the nine months ended December 31,
1995. There was an increase in fee income received, during the nine months ended
December 31, 1996, due to loan fees from loan originations for a mortgage
company. Also as stated in the above paragraph, there was a gain from the sale
of U.S. Savings League stock for the nine months ended December 31, 1996.
Non-interest expense increased $8,504 or 2.85% from $298,874 for the three
months ended December 31, 1995 to $307,378 for the three months ended December
31, 1996. The primary source for the increase in non-interest expense was due to
the increase in compensation expenses. Compensation expense increased primarily
due to payment of bonuses.
Non-interest expense for the nine months ended December 31, 1996 was up
$242,291 or 26.39% from that for the nine months ended December 31, 1995.
Non-interest expense increased from $918,068 for the nine month period ended
December 31, 1995 to $1,160,359 for the nine month period ended December 31,
1996. Compensation and related expenses were up 7.55% or $32,335. Federal
insurance premiums were up $225,808 from $61,480 for the nine months ended
December 31, 1995 to $287,288 for the nine months ended December 31, 1996 as
discussed earlier.
Income tax expense for the nine months ended December 31, 1996 was
$125,100 compared to $196,650 for the same period in 1995. The decrease in
income tax expense for the nine month period 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 20.81% at December 31, 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 December
31, 1996 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 $2,500,000 with an
adjustable interest rate. The Bank draws against the line to meet current
liquidity needs. Besides the line of credit the Bank has a fixed rate advance of
$2,000,000 and $5,700,000 in adjustable rate advances at the Federal Home Loan
Bank of Topeka outstanding at December 31, 1996.
These term borrowings from the Federal Home Loan Bank of Topeka are part
of a strategy to increase current income and match the balance sheet position.
Funds from the borrowings have been used to purchase Collateralized Mortgage
Obligations with similar base rates and reprice dates to insure that the spread
on the earnings and cost are in place for the term of the securities.
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. Management decided at the one year maturity of a promotional
account started in April 1995 not to extend this promotion. This decision
prompted some loss in certificate of deposit accounts, though not a significant
number. A review of pricing of accounts lead to the decision to lower Now
account rates and Savings statement rates which lead to an increase in net
interest income with little potential loss of deposit accounts.
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 December 31, 1996 cash and cash equivalents were
$1,158,511 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 December 31, 1996 the Bank's capital
requirements and actual capital under the OTS regulations are as follows:
Amount Percent
(thousands) of Assets
----------- ---------
Tangible capital:
Actual $ 6,366 12.92%
Required 739 1.50%
------- -----
Excess $ 5,627 11.42%
======= =====
Core capital:
Actual $ 6,366 12.92%
Required 1,478 3.00%
------- -----
Excess $ 4,888 9.92%
======= =====
Risk-based capital:
Actual $ 6,618 32.83%
Required 1,613 8.00%
------- -----
Excess $ 5,005 24.83%
======= =====
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
Not applicable
Item 5. Other Information
Not applicable
Item 6.(b)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
A Form 8-K dated January 14, 1997 was filed January 16, 1997. The report
stated that the Registrant announced that its Board of Directors has
declared a special cash dividend of $.50 per share to stockholders of
record as of January 31, 1997. A press release dated January 14, 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 February 07, 1997 By /s/ William L. Cunningham
----------------- -------------------------
William L. Cunningham
President and Chief Executive Officer
(Duly Authorized Representative)
Date February 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 Nine Months Ended
December 31, December 31,
----------------------- -----------------------
1995 1996 1995 1996
---------- ---------- ---------- ----------
Primary:
Weighted average common
<S> <C> <C> <C> <C>
shares outstanding 515,125 515,125 515,125 515,125
Dilutive effect of stock options 2,889 5,874 57 3,658
Average unallocated ESOP shares (39,150) (35,029) (39,150) (35,029)
Weighted average treasury
shares purchased (2,572) (59,450) (857) (51,880)
--------- --------- --------- ---------
Weighted average shares outstanding 476,292 426,520 475,175 431,874
========= ========= ========= =========
Fully diluted:
Weighted average common
shares outstanding 515,125 515,125 515,125 515,125
Dilutive effect of stock options 3,339 8,156 3,339 8,156
Average unallocated ESOP shares (39,150) (35,029) (39,150) (35,029)
Weighted average treasury
shares purchased (2,572) (59,450) (857) (51,880)
--------- --------- --------- ---------
Weighted average shares outstanding 476,742 428,802 478,457 436,372
========= ========= ========= =========
Net earnings $ 117,314 $ 138,682 $ 377,785 $ 240,546
========= ========= ========= =========
Earning per share:
Primary $ .25 $ .33 $ .80 $ .56
========= ========= ========= =========
Fully diluted $ .25 $ .32 $ .79 $ .55
========= ========= ========= =========
</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> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 296
<INT-BEARING-DEPOSITS> 862
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,061
<INVESTMENTS-CARRYING> 22,268
<INVESTMENTS-MARKET> 22,182
<LOANS> 23,527
<ALLOWANCE> 386
<TOTAL-ASSETS> 49,505
<DEPOSITS> 33,781
<SHORT-TERM> 5,700
<LIABILITIES-OTHER> 187
<LONG-TERM> 2,000
0
0
<COMMON> 5
<OTHER-SE> 7,832
<TOTAL-LIABILITIES-AND-EQUITY> 49,505
<INTEREST-LOAN> 1,561
<INTEREST-INVEST> 1,131
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,692
<INTEREST-DEPOSIT> 1,156
<INTEREST-EXPENSE> 1,359
<INTEREST-INCOME-NET> 1,333
<LOAN-LOSSES> 1
<SECURITIES-GAINS> 46
<EXPENSE-OTHER> 1,160
<INCOME-PRETAX> 366
<INCOME-PRE-EXTRAORDINARY> 241
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 241
<EPS-PRIMARY> .56
<EPS-DILUTED> .55
<YIELD-ACTUAL> 3.04
<LOANS-NON> 637
<LOANS-PAST> 0
<LOANS-TROUBLED> 898
<LOANS-PROBLEM> 864
<ALLOWANCE-OPEN> 390
<CHARGE-OFFS> 8
<RECOVERIES> 5
<ALLOWANCE-CLOSE> 387
<ALLOWANCE-DOMESTIC> 387
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 277
</TABLE>
