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, 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 February 9, 1998:
$.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
December 31, 1997 (unaudited) 1
Statements of Income for the Three and Nine Months Ended
December 31, 1996 and 1997 (unaudited) 2
Statement of Cash Flows for the Nine Months
Ended December 31, 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>
December 31,
March 31, 1997
ASSETS 1997 (unaudited)
------------ ------------
<S> <C> <C>
Cash and cash equivalents
Interest bearing $ 311,624 $ 1,721,833
Non-interest bearing 211,205 360,392
Held-to-maturity investment securities 8,700,000 5,400,000
Available-for-sale investment securities 2,061,727 2,163,002
Mortgage-backed securities held to maturity 13,273,398 11,276,074
Loans receivable, net 23,461,257 25,028,556
Accrued income receivable 330,277 309,515
Real estate owned and other
repossessed property, net 0 10,500
Office properties and equipment, net 598,633 576,991
Prepaid expenses and other assets 99,135 108,892
------------ ------------
$ 49,047,256 $ 46,955,755
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $ 34,293,278 $ 34,969,259
FHLB line of credit and advances 6,700,000 4,196,000
Advances from borrowers for taxes and insurance 32,830 4,787
Deferred income 57,956 53,290
Accrued expenses and other liabilities 60,805 96,833
Income taxes
Deferred 79,531 101,625
Current 17,816 50,913
------------ ------------
41,242,216 39,472,707
------------ ------------
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 4,567,061
Treasury Stock, at cost (64,766 shares at March 31,1997
and 97,668 shares at December 31, 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) (114,128)
Net unrealized gain (loss) on available-for-sale securities (46,379) (3,199)
------------ ------------
Total Stockholders' Equity 7,805,040 7,483,048
------------ ------------
$ 49,047,256 $ 46,955,755
============ ============
</TABLE>
Page 1
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------------- -------------------------
1996 1997 1996 1997
----------- ------------ ----------- -----------
(Unaudited) ( Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest on loans $ 513,444 $ 556,162 $ 1,560,833 $ 1,643,652
Interest and dividends
on investment securities 187,626 145,840 579,951 503,317
Interest on mortgage-
backed securities 203,372 188,736 550,926 604,769
----------- ----------- ----------- -----------
Total interest income 904,442 890,738 2,691,710 2,751,738
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 380,973 390,200 1,156,295 1,155,973
Borrowed money 97,866 64,380 202,662 260,276
----------- ----------- ----------- -----------
Total interest expense 478,839 454,580 1,358,957 1,416,249
----------- ----------- ----------- -----------
Net interest income 425,603 436,158 1,332,753 1,335,489
PROVISION FOR LOSSES
ON LOANS 0 1,395 492 2,708
----------- ----------- ----------- -----------
Net interest income
after provision for loan losses 425,603 434,763 1,332,261 1,332,781
----------- ----------- ----------- -----------
NON-INTEREST INCOME
Service charges and late fees 39,157 48,520 123,628 139,078
Other income 6,739 5,441 22,681 21,715
Gain (Loss) from sale of investments 46,376 0 46,376 0
Gain (Loss) from real estate operations (815) (2,222) 1,059 1,744
----------- ----------- ----------- -----------
91,457 51,739 193,744 162,537
----------- ----------- ----------- -----------
NON-INTEREST EXPENSE
Compensation and related expenses 161,419 165,580 460,533 473,664
Occupancy expense 17,159 19,558 49,206 48,718
Professional fees 24,914 17,191 92,962 81,863
Federal insurance premium 20,942 5,401 61,855 16,189
SAIF special assessment 0 0 225,433 0
Data processing 19,841 19,686 62,995 63,753
Bank charges 14,401 12,967 43,816 39,231
Other expense 48,702 52,025 163,559 172,199
----------- ----------- ----------- -----------
307,378 292,408 1,160,359 895,617
----------- ----------- ----------- -----------
Income before income taxes 209,682 194,094 365,646 599,701
INCOME TAX EXPENSE(BENEFIT) 71,000 70,050 125,100 215,800
----------- ----------- ----------- -----------
Net income $ 138,682 $ 124,044 $ 240,546 $ 383,901
=========== =========== =========== ===========
BASIC:
Earnings per share $ .34 $ .33 $ .58 $ 1.01
=========== =========== =========== ===========
Weighted average common shares
outstanding 408,881 377,181 417,238 381,227
=========== =========== =========== ===========
DILUTED:
Earnings per share $ .33 $ .32 $ .57 $ .98
=========== =========== =========== ===========
Weighted average common shares
outstanding 414,172 389,850 420,734 392,941
=========== =========== =========== ===========
DIVIDENDS PER SHARE $ -- $ -- $ -- $ .50
=========== =========== =========== ===========
</TABLE>
Page 2
<PAGE>
GUTHRIE SAVINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended December 31,
--------------------------------------
1996 1997
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 240,546 $ 383,901
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 27,580 23,694
FHLB Stock dividend (29,600) (36,000)
Decrease (increase) in accrued interest receivable 20,791 20,762
Increase (decrease) in accrued and deferred
income taxes 13,175 33,096
Increase (decrease) in accrued expenses 18,932 36,028
Amortization of premiums and discounts
on investments and loans 8,614 2,228
Amortization of deferred gain on sale of real estate owned (2,534) (4,666)
Provision for losses on loans and real estate owned 492 2,708
Amortization related to ESOP and MSBP 30,338 23,182
(Increase) decrease in other assets 13,885 (9,757)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 342,219 475,176
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net loan (originations) and principal payments
on loans held for investment 31,290 (1,573,540)
Principal repayments on mortgage-backed securities-
held to maturity 1,067,839 1,980,837
Acquisition of mortgage-backed investment securities-
held to maturity (5,227,289) 0
Acquisition of held to maturity investment securities (500,000) (500,000)
Maturity of held to maturity investment securities 1,550,000 3,800,000
Sale of available for sale securities 55,000 0
Acquisition of fixed assets (7,825) (2,052)
----------- -----------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (3,030,985) 3,715,245
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits (2,530,177) 673,273
Net increase (decrease) in escrow accounts (49,997) (28,043)
Proceeds from FHLB advance 9,400,000 8,300,000
Repayments of FHLB advance (3,700,000) (10,804,000)
Cash dividend paid (222,740) (208,730)
Purchase of treasury stock (451,918) (563,525)
----------- -----------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES $ 2,445,168 $(2,631,025)
----------- -----------
</TABLE>
Page 3
<PAGE>
Consolidated Statements of Cash Flow (Continued)
<TABLE>
<CAPTION>
<S> <C> <C>
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (243,598) $1,559,396
BEGINNING CASH AND CASH EQUIVALENTS 1,402,109 522,829
---------- ----------
ENDING CASH AND CASH EQUIVALENTS $1,158,511 $2,082,225
========== ==========
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest on deposits and advances $1,158,668 $1,417,814
Income taxes 111,925 182,703
Transfers from loans to real estate acquired
through foreclosure 17,500 10,500
</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 nine month period ended December 31, 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
December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Carrying Value
------------------------- Market Value
March 31, December 31, December 31,
1997 1997 1997
----------- ---------- -----------
<S> <C> <C> <C>
Held-to-maturity:
Bonds, notes and debentures:
Government Agency Securities $ 8,700,000 $ 5,400,000 $ 5,391,174
----------- ----------- -----------
Total held-to-maturity $ 8,700,000 $ 5,400,000 $ 5,391,174
=========== =========== ===========
Available-for-sale:
Debt securities:
Government Agency Securities $ 1,500,000 $ 1,500,000 $ 1,495,002
Net unrealized loss (70,273) (4,998) 0
----------- ----------- -----------
1,429,727 1,495,002 1,495,002
----------- ----------- -----------
Equity securities:
Stock in Federal Home Loan Bank 632,000 668,000 668,000
----------- ----------- -----------
632,000 668,000 668,000
----------- ----------- -----------
Total available-for-sale $ 2,061,727 $ 2,163,002 $ 2,163,002
=========== =========== ===========
</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 December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Carrying Value
----------------------------- Market Value
March 31, December 31, December 31,
1997 1997 1997
------------ ------------- ---------------
<S> <C> <C> <C>
Mortgage-Backed Securities (Held-to-Maturity):
GNMA-ARM's $ 3,114,748 $ 2,722,653 $ 2,782,157
FNMA-ARM's 825,458 648,134 647,323
FHLMC-ARM's 1,376,203 1,259,163 1,272,935
FHLMC-fixed rate 1,380,450 1,286,632 1,331,937
GNMA-fixed rate 388,642 329,134 343,957
FNMA-fixed rate 684,623 568,945 569,848
Collateralized mortgage obligation
-Govt. Agency 5,383,306 4,357,931 4,511,701
------------ ------------ -------------
13,153,430 11,172,592 11,459,858
Unamortized premiums 127,799 111,734
Unearned discounts (7,831) (8,252)
------------ ------------ -------------
Total Mortgage-Backed Securities
(Held-to-Maturity) $ 13,273,398 $ 11,276,074 $ 11,459,858
============ ============ =============
</TABLE>
Page 6
<PAGE>
5. Loans Receivable, Net
A summary of the Bank's loans receivable at March 31, 1997 and December
31, 1997 is as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1997
----------- -------------
<S> <C> <C>
Mortgage loans:
Secured by one to four family residences $17,273,266 $18,414,047
Secured by other properties 1,958,081 1,728,274
Construction loans 1,790,945 2,111,200
Other 579,276 597,202
----------- -----------
21,601,568 22,850,723
Less:
Unearned discounts and loan fees (72,996) (73,528)
Undisbursed loan proceeds (641,971) (1,088,604)
Allowance for loan losses (282,444) (273,255)
----------- -----------
Total mortgage loans 20,604,157 21,415,336
----------- -----------
Consumer and other loans:
Loans on deposits 403,099 510,107
Home equity and second mortgage 1,222,531 1,183,878
Other 1,325,718 2,004,507
----------- -----------
2,951,348 3,698,492
Less:
Allowances for loan losses (94,248) (85,272)
----------- -----------
Total consumer and other loans 2,857,100 3,613,220
Net Loans Receivable $23,461,257 $25,028,556
=========== ===========
</TABLE>
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,
----------------------- ----------------------
1996 1997 1996 1997
----------- --------- --------- ---------
Balance, beginning $ 389,791 $ 367,717 $ 391,189 $ 376,692
Provision charged
to operations 0 1,395 492 2,708
Loans charged off,
net of recoveries (3,403) (10,585) (5,293) (20,873)
--------- --------- --------- ---------
$ 386,388 $ 358,527 $ 386,388 $ 358,527
========= ========= ========= =========
Page 7
<PAGE>
6. Real Estate Owned or in Judgement, and Other Repossessed Property:
March 31, December 31,
1997 1997
---------- -------------
Real estate acquired by foreclosure $ 0 $10,500
Other repossed assets 0 0
Allowance for loss 0 0
------- -------
Total $ 0 $10,500
======= =======
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, 1997, the Bank had no outstanding commitments to fund real
estate loans.
8. Earnings Per Share
Basic earnings per share is computed by dividing income available to
common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to
issue common stock (potential common stock) were exercised or converted to
common stock. For the periods presented potential common stock includes
outstanding stock options and nonvested stock awarded under the Management
Stock Bonus Plan.
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, 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 December 31, 1996
and 1997 and the nine months ended December 31, 1996 and 1997.
Net income decreased $14,638 or 10.56% from $138,682 for the three months
ended December 31, 1996 to $124,044 for the three months ended December 31,
1997. This decrease was primarily the result of the gain on the sale of the U.S.
Savings League Stock during the quarter ended December 31, 1996.
Net income increased $143,355 or 59.60% from $240,546 for the nine months
ended December 31, 1996 to $383,901 for the nine months ended December 31, 1997.
This increase is the result of the special assessment to capitalize the SAIF
fund during the nine months ended December 31, 1996, offset by the gain on the
sale of the U.S. Savings League Stock for the same period.
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 nine months ended December 31, 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 $387,000 for the nine months ended December 31,
1996. Earnings per share without the effect of the assessment would have been
approximately $.89 for the nine months ended December 31, 1996. 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 December 31, 1997 increased $10,555 or 2.48% compared to the three
months ended December 31, 1996, from $425,603 to $436,158. This increase was
mainly due to an increase in interest on loans offset by increased cost of
deposits. Interest income on loans increased $42,718 or 8.32% for the quarter
ended December 31, 1997 due to an increase in loan originations. Interest
expense on deposits for the three months ended December 31, 1996 compared to the
three months ended December 31, 1997 increased by $9,227 or 2.43% due to slight
increase in certificate deposits. Interest income on investments and mortgage
backed securities decreased $56,422 or 14.43% due to securities maturing or
being called. This decrease in investment interest income was offset by a
decrease in interest expense on borrowed money of $33,486. Borrowings were paid
down as securities matured or were called.
Net interest income before provision for losses on loans, for the nine
months ended December 31, 1997 increased $2,736 or .21% from $1,332,753 for the
nine months ended December 30, 1996 to $1,335,489 for the nine months ended
December 30, 1997. Interest expense on deposits for the nine months period
decreased $322 from $1,156,295 for the nine months ended December 31, 1996 to
$1,155,973 for the nine months ended December 31, 1997. This decrease in
interest on deposits was offset by an increase in interest expense on borrowed
money of $57,614 from $202,662 for the nine months ended December 31, 1996 to
$260,276 for the nine months ended December 31, 1997. This increase in interest
expense on borrowed money was the result of the matching of spreads on new
investments with additional borrowings. Interest income increased $60,028 due to
new purchases of mortgage backed securities and origination of new loans.
Page 10
<PAGE>
Provision for loan losses increased from $0 for the three months ended
December 31, 1996 to $1,395 for the three months ended December 31, 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 nine months ended
December 31, 1997 $2,216 or 450.41% from $492 for the nine months ended December
31, 1996 to $2,708 for the nine months ended December 31, 1997. This increase
was based on management's evaluation of the adequacy of the allowance for loan
losses.
Non-interest income decreased $39,718 or 43.43% from $91,457 for the three
months ended December 31, 1996 to $51,739 for the three months ended December
31, 1997. This decrease was primarily due to a gain on sale of U.S. Savings
League Stock of $46,376 in the quarter ended December 31, 1996. There was an
increase in service charges and late fees of $9,363, during the three months
ended December 31, 1997 compared to the three months ended December 31, 1996,
due to loan fees from increased loan originations.
Non-interest income for the nine months ended December 31, 1997 was down
$31,207 or 16.11% from $193,744 for the nine months ended December 31, 1996 to
$162,537 for the nine months ended December 31, 1997, for the same reasons as
noted above.
Non-interest expense decreased $14,970 or 4.87% from $307,378 for the
three months ended December 31, 1996 to $292,408 for the three months ended
December 31, 1997. The primary source for the decrease in non-interest expense
was the reduction in the SAIF insurance assessment. 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
the decrease in assessment the premium for the three months ended December 31,
1996 compared to December 31, 1997 decreased $15,541 or 74.20% from $20,942 to
$5,401.
Non-interest expense for the nine months ended December 31, 1997 was down
$264,742 or 22.82% from that for the nine months ended December 31, 1996.
Non-interest expense decreased from $1,160,359 for the nine month period ended
December 31, 1996 to $895,617 for the nine month period ended December 31, 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 nine months
ended December 31, 1996. The SAIF insurance assessment was reduced January 1,
1997 as stated above. Due to this decrease in assessment the premium for the
nine months ended December 31, 1996 compared to December 31, 1997 decreased
$45,666 or 73.83% from $61,855 to $16,189.
Income tax expense decreased $950 or 1.34% from $71,000 for the three
months ended December 31, 1996 to $70,050 for the three months ended December
31, 1997. Income tax expense for the nine months ended December 31, 1996 was
$125,100 compared to $215,800 for the same period in 1997. The increase in
income tax expense for the nine month period ended December 31, 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 nine months ended December 31,
1996.
Page 11
<PAGE>
Earnings Per Share:
Effective with the quarter ended December 31, 1997, the Company adopted
the provisions of Statement of Financial Accounting Standards No. 128, Earnings
per Share. The Statement is to be applied to financial statements issued for
periods ending after December 15, 1997, including interim periods; earlier
application is not permitted. The Statement requires restatement of all prior-
period earnings per share (EPS) data presented.
FAS No. 128 simplifies the standards for computing EPS and makes them
comparable to international EPS standards. It replaces the presentation of
primary EPS with a presentation of basic EPS. It also requires presentation of
basic and diluted EPS on the face of the income statement for all entities with
complex capital structures. Basic EPS excluded dilution and is computed by
dividing income available to common stockholders by the weighted-average number
of common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the company. Diluted EPS is
computed similarly to the previously presented fully diluted earnings per share.
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 4% of its average daily balance
of net withdrawable deposit accounts and borrowings payable in one year or less.
Guthrie's liquidity ratio was 17.37% at December 31, 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 December
31, 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
$2,000,000 and $2,196,000 in adjustable rate advances at the Federal Home Loan
Bank of Topeka outstanding at December 31, 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
Page 12
<PAGE>
overnight deposits, some of which may also qualify as liquid investments under
current OTS regulations. At December 31, 1997 cash and cash equivalents were
$2,082,225 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.
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, 1997 the Bank's capital
requirements and actual capital under the OTS regulations are as follows:
Amount Percent
(thousands) of Assets
Tangible capital:
Actual $6,596 14.11%
Required 701 1.50%
------ -----
Excess $5,895 12.61%
====== =====
Core capital:
Actual $6,596 14.11%
Required 1,402 3.00%
------ -----
Excess $5,194 11.11%
====== =====
Risk-based capital:
Actual $6,847 33.28%
Required 1,646 8.00%
------ -----
Excess $5,201 25.28%
====== =====
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.(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
Not applicable
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 09, 1998 By /s/William L. Cunningham
----------------- ------------------------------
William L. Cunningham
President and Chief Executive Officer
(Duly Authorized Representative)
Date February 09, 1998 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,
---------------------- ---------------------
1996 1997 1996 1997
------- -------- -------- --------
Computation Basic Earnings Per Share:
<S> <C> <C> <C> <C>
Weighted average common shares outstanding:
Average shares issued 515,125 515,125 515,125 515,125
Less: average unallocated ESOP shares (35,029) (30,908) (35,029) (30,908)
Less: Unearned MSBP shares (11,765) (9,368) (12,558) (9,777)
Less: Average Treasury shares (59,450) (97,668) (50,300) (93,213)
--------- --------- --------- ---------
Weighted average shares outstanding 408,881 377,181 417,238 381,227
========= ========= ========= =========
Computation Diluted Earnings Per Share:
Weighted average shares
outstanding (per above basic EPS) 408,881 377,181 417,238 381,227
Plus: Dilutive effect of MSBP shares 768 1,577 507 1,509
Plus: Dilutive effect of Stock options 4,523 11,092 2,988 10,205
--------- --------- --------- ---------
Diluted weighted average shares outstanding 414,172 389,850 420,733 392,941
========= ========= ========= =========
Net earnings $ 138,682 $ 124,044 $ 240,546 $ 383,901
========= ========= ========= =========
Earnings per share:
Basic $ .34 $ .33 $ .58 $ 1.01
========= ========= ========= =========
Diluted $ .33 $ .32 $ .57 $ .98
========= ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE QUARTERLY
REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 360
<INT-BEARING-DEPOSITS> 1,722
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,163
<INVESTMENTS-CARRYING> 16,676
<INVESTMENTS-MARKET> 16,851
<LOANS> 25,386
<ALLOWANCE> (359)
<TOTAL-ASSETS> 46,956
<DEPOSITS> 34,969
<SHORT-TERM> 4,196
<LIABILITIES-OTHER> 308
<LONG-TERM> 0
0
0
<COMMON> 5
<OTHER-SE> 7,478
<TOTAL-LIABILITIES-AND-EQUITY> 46,956
<INTEREST-LOAN> 1,644
<INTEREST-INVEST> 1,108
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,752
<INTEREST-DEPOSIT> 1,156
<INTEREST-EXPENSE> 1,416
<INTEREST-INCOME-NET> 1,336
<LOAN-LOSSES> 3
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 896
<INCOME-PRETAX> 600
<INCOME-PRE-EXTRAORDINARY> 384
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 384
<EPS-PRIMARY> 1.01<F1>
<EPS-DILUTED> .98
<YIELD-ACTUAL> 2.36
<LOANS-NON> 479
<LOANS-PAST> 479
<LOANS-TROUBLED> 778
<LOANS-PROBLEM> 859
<ALLOWANCE-OPEN> 367
<CHARGE-OFFS> 9
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 359
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 251
<FN>
<F1> BASIC EPS
</FN>
</TABLE>
