US SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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10-Q/A
(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, 1999
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR TRANSITION PERIOD
FROM TO
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Commission file number 0-25286
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CASCADE FINANCIAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 91-1661954
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2828 Colby Avenue
Everett, Washington 98201
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(Address of principal executive offices) (Zip Code)
(425) 339-5500
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(Registrant's telephone number, including area code)
Indicate by a check mark whether the registrant (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 twelve months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days. Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of September 30, 1999
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Common Stock ($.01 par value) 5,469,671
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The Registrant hereby amends Part I, Item 1 of its Quarterly Report on Form
10-Q for the quarter ended September 30, 1999 as follows:
PART I FINANCIAL INFORMATION
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CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS September 30, June 30,
- ------ ------------- --------
1999 1999
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(unaudited)
Cash on hand and in banks $ 11,406 9,804
Interest-earning deposits in other institutions 114 350
Securities available for sale 72,522 72,719
Loans available for sale, net 9,091 22,428
Mortgage-backed securities held to maturity
(market value of $1,421 and $1,699) 1,446 1,738
Loans, net 491,255 433,308
Premises and equipment, at cost, net 9,469 9,433
Accrued interest receivable and other assets 6,430 7,306
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TOTAL ASSETS $ 601,733 557,086
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits $ 359,640 361,786
Federal Home Loan Bank advances 177,236 141,996
Securities sold under agreements to repurchase 21,696 5,951
Advance payments by borrowers for taxes
and insurance 2,391 1,947
Accrued expenses and other liabilities 5,170 10,743
Deferred income tax 397 424
TOTAL LIABILITIES 566,530 522,847
Preferred stock, $.01 par value, 500,000 shares
authorized; no shares issued or outstanding -- --
Common stock, $.01 par value, 5,000,000 shares
authorized; 5,469,671 and 5,454,302 shares
issued and outstanding 55 55
Additional paid-in capital 4,830 4,790
Retained earnings, substantially restricted 32,126 31,150
Cumulative comprehensive income, net (1,808) (1,756)
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TOTAL STOCKHOLDERS' EQUITY 35,203 34,239
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 601,733 557,086
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See notes to consolidated financial statements
1
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CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(unaudited)
Three months ended
September 30, September 30,
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1999 1998
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Interest income:
Loans $ 9,828 8,422
Mortgage-backed securities held-to-maturity 20 52
Securities available for sale 990 372
FHLB stock dividends 144 104
Interest-earning deposits 34 70
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Total interest income 11,016 9,020
Interest expense:
Deposits 4,210 4,023
Borrowings 2,129 1,222
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Total interest expense 6,339 5,245
Net interest income 4,677 3,775
Provision for loan losses 210 150
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Net interest income after provision for loan losses 4,467 3,625
Other income:
Gain on sale of loans 123 228
Service charges 315 255
Gain on sale of securities available-for-sale 0 4
Other 48 49
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Total other income 486 536
Other expenses:
Salaries and employee benefits 1,909 1,476
Occupancy 696 435
Federal deposit insurance premiums 52 46
Advertising 117 107
Data processing 89 143
Other 613 616
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Total other expenses 3,476 2,823
Income before income taxes 1,477 1,338
Federal income taxes 501 455
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Net income $ 976 883
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Earnings per share, basic $ 0.18 0.16
Earnings per share, diluted 0.16 0.15
Weighted average number of shares outstanding:
Basic 5,469,671 5,385,636
Diluted 5,959,798 5,933,545
See notes to consolidated financial statements
2
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CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
(unaudited)
Three months ended September 30,
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1999 1998
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Net Income $ 883 976
Increase (decrease) in unrealized
Gains (losses) on securities
available for sale, net of tax
of $65 and $(27). 134 (52)
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Comprehensive Income $1,017 897
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3
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CASCADE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands, unaudited)
Three months ended September 30,
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1999 1998
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Cash flows from operating activities:
Net income (loss) $ 976 883
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Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization of
premises and equipment 337 173
Amortization of retained servicing rights 61 107
Provision for losses on:
Loans 210 150
Mortgage servicing rights -- 94
Additions to mortgage servicing rights (56) (187)
Deferred loan fees, net of amortization 175 (170)
Net change in loans available for sale 13,337 (6,032)
Federal Home Loan Bank stock dividend
received (144) (104)
Net change in accrued interest receivable
and other assets over principal and
interest payable on loans serviced for
others and accrued expenses and other
liabilities (4,703) (2,688)
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Total adjustments 9,217 (8,661)
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Net cash provided by (used in)
operating activities (10,193) (7,778)
Cash flows from investing activities:
Loans originated, net of principal repayments (58,331) (2,170)
Principal repayments on securities held-to
maturity 292 1,051
Principal repayments on securities available-
for-sale (1,905) 2,204
Purchases of securities available for sale 1,642 (14,933)
Proceeds from sales of securities available
for sale 0 3,003
Purchases of premises and equipment (373) (394)
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Net cash used in investing activities (58,149) (11,235)
Subtotal, carried forward (47,956) (19,013)
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See notes to consolidated financial statements
4
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CASCADE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands, unaudited)
Three months ended September 30,
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1999 1998
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Subtotal, brought forward $ (48,871) (19,013)
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Cash flows from financing activities:
Proceeds from issuance of common stock 40 181
Net increase (decrease) in deposits (2,146) 6,136
Net increase in Federal Home Loan Bank
advances 35,240 21,990
Net increase (decrease) in securities sold
under agreements to repurchase 15,745 (12,646)
Net decrease in advance payments by
borrowers for taxes and insurance 444 1,127
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Net cash provided by financing
activities 49,323 16,788
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Net increase (decrease) in cash and cash
equivalents 1,367 (2,225)
Cash and cash equivalents at beginning of
period 10,153 11,967
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Cash and cash equivalents at end of period $ 11,520 9,742
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Supplemental disclosures of cash flow infor-
mation cash paid during the period for:
Interest $ 6,156 5,237
Federal income taxes 500 200
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Supplemental schedule of noncash investing
activities:
Mortgage loans securitized into mortgage
backed securities and held-for-trading
and sold 1,407 5,035
Net mortgage loans transferred to real
estate owned -- 363
See notes to consolidated financial statements.
5
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CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
(unaudited)
1. Presentation of Financial Information
The accompanying financial information is unaudited and has been prepared
from the books and records of Cascade Financial Corporation, ("Cascade" or the
"Corporation"). The Corporation's sole subsidiary is Cascade Bank, (the
"Bank"). In the opinion of management, the financial information reflects all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the financial condition, results of operations, and cash flows
of the Corporation pursuant to the requirements of the SEC for interim
reporting.
Certain information and footnote disclosures included in the
Corporation's financial statements for the year ended June 30, 1999, have been
condensed or omitted from this report. Accordingly, these statements should
be read with the financial statements and notes thereto included in the
Corporation's 1999 Annual Report on Form 10-K.
2. Commitments and Contingencies
In the normal course of business there are various commitments to fund
mortgage loans. Management does not anticipate any material loss as a result
of these commitments.
Periodically there have been various claims and lawsuits against the
Corporation or the Bank, such as claims to enforce liens, condemnation
proceedings on properties in which the Bank holds security interests, claims
involving the making and servicing of real property loans and other issues
incidental to the Corporation's and the Bank's business. In the opinion of
management no significant loss is expected from any of such pending lawsuits.
3. Financial Statement Reclassification
Certain amounts in the financial statements for fiscal 1999 have been
reclassified to conform with the financial statement classification for fiscal
2000.
4. New Accounting Pronouncements
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", was issued in June 1998 and establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities. SFAS No. 133 is effective for all quarters of fiscal
years beginning after June 15, 2000. Management is reviewing this statement
and does not expect that application of this statement will have a material
effect on the results of operations or the financial position of the
Corporation.
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained after
the Securitization of mortgage Loans Held for Sale by a Mortgage Banking
Enterprise", was issued in October 1998. SFAS No. 134 requires that the
security be classified either trading,
6
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available for sale or held to maturity according to the Corporation's intent,
unless the Corporation has already committed to sell the security before or
during the securitization process. The Corporation has adopted this statement
and has not had a material effect on the results of operations or financial
condition.
7
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Signatures
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by
the undersigned thereunto duly authorized.
CASCADE FINANCIAL CORPORATION
November 29, 1999 /s/ Russell E. Rosendal
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By: Russell E. Rosendal
Executive Vice President
(Chief Financial Officer)
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