<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-25180
CKF BANCORP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 61-1267810
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
340 WEST MAIN STREET, DANVILLE, KENTUCKY 40422
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (606) 236-4181
--------------
Indicate by 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 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 ninety days.
Yes X No
--- ---
As of August 5, 1997, 950,000 shares of the registrant's common stock were
issued and outstanding.
Page 1 of 15 Pages Exhibit Index at Page N/A
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<TABLE>
<CAPTION>
CONTENTS
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1997
(unaudited) and December 31, 1996......................................................... 3
Consolidated Statements of Income for the Three-Month Periods Ended
June 30, 1997 and 1996 (unaudited) and the Six-Month Periods
Ended June 30, 1997 and 1996 (unaudited).............................................. 4
Consolidated Statements of Cash Flows for the Six-Month Periods Ended
June 30, 1997 and 1996 (unaudited).................................................... 5
Notes to Consolidated Financial Statements................................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................................. 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings......................................................................... 13
Item 2. Changes in Securities..................................................................... 13
Item 3. Defaults Upon Senior Securities........................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders....................................... 13
Item 5. Other Information......................................................................... 13
Item 6. Exhibits and Reports on Form 8-K.......................................................... 13
SIGNATURES
</TABLE>
<PAGE>
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
----------------
<TABLE>
<CAPTION>
AS OF AS OF
JUNE 30, DECEMBER 31,
ASSETS 1997 1996
------------- ------------
(unaudited)
<S> <C> <C>
Cash and due from banks $ 326,446 $ 564,003
Interest bearing deposits 1,503,251 1,655,589
Investment securities:
Securities available-for-sale 453,750 728,475
Securities held-to-maturity 2,195,340 2,714,723
Loans receivable, net 55,293,496 53,181,509
Real estate owned 227,340
Accrued interest receivable 424,827 378,405
Office property and equipment, net 565,256 540,638
Other assets 50,036 11,778
----------- -----------
Total assets $60,812,402 $60,002,460
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $42,213,487 $42,832,354
Advance from Federal Home Loan Bank 3,233,308 1,252,179
Federal income tax payable 510,745 641,014
Advance payment by borrowers for taxes and insurance 83,293 18,944
Other liabilities 199,813 159,040
----------- -----------
Total liabilities 46,240,646 44,903,531
----------- -----------
Stockholders' equity:
Common stock, $0.01 par value, 4,000,000 shares authorized;
1,000,000 shares issued 10,000 10,000
Additional paid-in capital 9,638,441 9,612,331
Retained earnings, substantially restricted 6,779,125 7,147,931
Net unrealized appreciation on securities available-for-sale 290,944 463,732
Treasury stock, 50,000 shares, at cost (986,388) (986,388)
Stock Option Trust, 24,725 shares, at cost (493,694) (455,344)
Unallocated employee stock ownership plan (ESOP) shares (666,672) (693,333)
----------- -----------
Total stockholders' equity 14,571,756 15,098,929
----------- -----------
Total liabilities and stockholders' equity $60,812,402 $60,002,460
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
----------------------
<TABLE>
<CAPTION>
FOR THE THREE-MONTH PERIODS FOR THE SIX-MONTH PERIODS
ENDED JUNE 30, ENDED JUNE 30,
--------------------------- -------------------------
1997 1996 1997 1996
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income:
Interest on loans................................ $1,103,365 $1,009,015 $2,154,929 $1,984,940
Interest and dividends on investments............ 37,488 48,321 81,870 75,876
Other interest income............................ 13,639 13,561 31,011 53,932
---------- ---------- ---------- ----------
Total interest income......................... 1,154,492 1,070,897 2,267,810 2,114,748
---------- ---------- ---------- ----------
Interest expense:..................................
Interest on deposits............................. 541,838 524,634 1,079,667 1,037,802
Other interest expense........................... 38,552 4,682 64,158 9,515
---------- ---------- ---------- ----------
Total interest expense........................ 580,390 529,316 1,143,825 1,047,317
---------- ---------- ---------- ----------
Net interest income................................ 574,102 541,581 1,123,985 1,067,431
Provision for loan losses.......................... 6,000 6,000 6,000 12,000
---------- ---------- ---------- ----------
Net interest income after provision for loan
losses...................................... 568,102 535,581 1,117,985 1,055,431
---------- ---------- ---------- ----------
Non-interest income:
Loan and other service fees...................... 14,000 12,386 27,942 22,646
Gain on sale of investments...................... 420,575 420,575
Other, net....................................... 716 581 1,327 1,408
---------- ---------- ---------- ----------
Total non-interest income..................... 435,291 12,967 449,844 24,054
---------- ---------- ---------- ----------
Non-interest expense:
Compensation and benefits........................ 137,210 132,370 281,438 265,607
Federal insurance premium........................ 8,850 24,484 17,700 48,969
State franchise tax.............................. 12,273 12,273 24,547 24,547
Occupancy expenses, net.......................... 10,592 8,825 22,945 19,525
Data processing expenses......................... 13,051 9,600 23,999 20,171
Legal fees....................................... 9,167 5,651 13,219 17,004
Loss on real estate owned........................ 13 41,813
Other operating expenses......................... 61,212 55,616 115,074 129,747
---------- ---------- ---------- ----------
Total non-interest expense.................... 252,368 248,819 540,735 525,570
---------- ---------- ---------- ----------
Income before income tax expense................... 751,025 299,729 1,027,094 553,915
Provision for income taxes......................... 255,348 107,329 349,212 194,587
---------- ---------- ---------- ----------
Net income......................................... $ 495,677 $ 192,400 $ 677,882 $ 359,328
========== ========== ========== ==========
Earnings per share................................. $ .56 $ .21 $ .77 $ .39
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
---------------------
<TABLE>
<CAPTION>
FOR THE SIX-MONTH PERIODS
ENDED JUNE 30
-------------------------
1997 1996
------------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 677,882 $ 359,328
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses 6,000 12,000
Loss on real estate owned 41,813
Amortization of loan fees (4,655) (3,864)
Realized gain on sale of investment (420,575)
ESOP benefit expense 50,531 51,887
Provision for depreciation 13,125 11,918
FHLB stock dividend (17,100) (15,800)
Amortization of investment premium 1,546 7,211
Change in:
Interest receivable (46,422) 50,463
Other liabilities and federal income taxes payable (12,835) (3,900)
Prepaid expense (38,258) (2,498)
Interest payable 14,593 1,614
----------- -----------
Net cash provided by operating activities 265,645 468,359
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan originations and principal payment on loans, net (1,927,805) (3,944,944)
Purchase of office equipment (37,743) (6,929)
Purchase of loans (164,000)
Purchase of held-to-maturity securities (1,017,806)
Matured held-to-maturity securities 500,000 250,415
Proceeds from sale of securities available-for-sale 433,500
Proceeds from certificates of deposit 1,000,000
Principle repayment on mortgage-backed securities 34,936 21,009
----------- -----------
Net cash (used) by investing activities (997,112) (3,862,255)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW accounts
and savings accounts 87,952 971,391
Net increase (decrease) in certificates of deposit (706,819) 1,719,681
Net increase (decrease) in custodial accounts 64,349
Proceeds from FHLB advances 2,000,000
Payments on FHLB advances (18,871) (17,625)
Dividends paid (1,046,689) (184,967)
Purchase of common stock (38,350) (731,860)
----------- -----------
Net cash provided by financing activities 341,572 1,756,620
----------- -----------
Increase (decrease) in cash and cash equivalents (389,895) (1,637,276)
Cash and cash equivalents, beginning of period 2,219,592 2,103,757
----------- -----------
Cash and cash equivalents, end of period $ 1,829,697 $ 466,481
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid for income taxes $ 389,708 $ 161,353
=========== ===========
Cash paid for interest $ 1,129,232 $ 1,036,189
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
CKF Bancorp, Inc. (the "Company") was formed in August 1994 at the
direction of Central Kentucky Federal Savings Bank (the "Bank") to become
the holding company of the Bank upon the conversion of the Bank from mutual
to stock form (the "Conversion"). Since the Conversion, the Company's
primary assets have been the outstanding capital stock of the Bank, 50% of
the net proceeds of the Conversion, and a note receivable from the
Company's Employee Stock Ownership Plan ("ESOP"), and its sole business is
that of the Bank. Accordingly, the consolidated financial statements and
discussions herein include both the Company and the Bank. On December 29,
1994, the Bank converted from mutual to stock form as a wholly owned
subsidiary of the Company. In conjunction with the Conversion, the Company
issued 1,000,000 shares of its common stock to the public.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments
(consisting of only normal recurring accruals) necessary for fair
presentation have been included. The results of operations and other data
for the three and six month periods ended June 30, 1997 are not necessarily
indicative of results that may be expected for the entire fiscal year
ending December 31, 1997.
2. EARNINGS PER SHARE
Earnings per share for the three and six month periods ended June 30, 1997
amounted to $0.56 and $0.77 per share, respectively, based on weighted
average common stock shares outstanding. Earnings per share for the three
and six month periods ended June 30, 1996 amounted to $0.21 and $0.39 per
share, respectively, based on weighted average common stock shares
outstanding. The weighted average number of common shares issued and
outstanding for the three and six month periods ended June 30, 1997 was
885,004 and 884,306 shares, respectively. The weighted average number of
common shares issued and outstanding for the three and six month periods
ended June 30, 1996 was 916,952 and 923,444 shares, respectively.
6
<PAGE>
3. REGULATORY CAPITAL
At June 30, 1997, the Bank's regulatory capital levels exceeded each of the
three regulatory capital requirements. The following table reconciles the
Bank's stockholder equity at June 30, 1997 to its regulatory capital
requirements.
<TABLE>
<CAPTION>
REGULATORY CAPITAL
--------------------------------
TANGIBLE CORE RISK-BASED
CAPITAL CAPITAL CAPITAL
-------- ------- ----------
(In thousands)
<S> <C> <C> <C>
Stockholder equity $13,040 $13,040 $13,040
Net unrealized appreciation on investment
securities available-for-sale (291) (291) (291)
General allowance for loan losses - - 113
------- ------- -------
Regulatory capital 12,749 12,749 12,862
Minimum capital requirement 908 1,816 2,807
------- ------- -------
Excess regulatory capital $11,841 $10,933 $10,055
======= ======= =======
Minimum capital requirement as a
percentage of assets 1.5% 3.0% 8.0%
Regulatory capital in excess of minimum
capital requirements as a percentage
of assets 19.47% 17.98% 28.66%/1/
</TABLE>
- -----------------
/1/Based on risk weighted assets.
4. DIVIDENDS
A cash dividend of $0.22 per share was paid on February 10, 1997 to
stockholders of record as of January 28, 1997. A special dividend of $1.00
per share was paid on February 11, 1997 to stockholders of record as of
January 29, 1997. The total dividends paid by the Company for the six
months ended June 30, 1997 amounted to $1,046,689.
7
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Total assets increased approximately $810,000, or 1.4%, from $60.0 million at
December 31, 1996 to $60.8 million at June 30, 1997. The net increase in assets
includes a $2.1 million, or 4.0%, increase in net loans receivable and an
increase of $109,000, or 11.7%, in other assets offset in part by a decrease of
$794,000, or 23.1%, in investment securities, a decrease of $389,000, or 17.6%,
in cash and interest bearing deposits and a decrease of $227,000 in real estate
owned.
The Company's aggregate investment securities portfolio decreased $794,000, or
23.1% to $2.6 million at June 30, 1997 compared to $3.4 million at December 31,
1996. Securities classified as available-for-sale and recorded at market value
per SFAS No. 115 decreased $275,000 which consisted of a $360,000 decrease due
to the sale of 13,200 shares of Federal Home Loan Mortgage Corporation stock
offset by an increase of $85,000 in the market value of the remaining
securities. Securities classified as held-to-maturity decreased $519,000 due
primarily to the maturity of a FHLB Bond in the amount of $500,000.
Under SFAS No. 115, unrealized gains or losses on securities available-for-sale
are recorded net of deferred income tax as a separate component of stockholders'
equity. At June 30, 1997, the Company included net unrealized gains of
approximately $291,000 in stockholders' equity. At December 31, 1996, the
Company included net unrealized gains of approximately $464,000 in stockholders'
equity. Per SFAS No. 115, such gains or losses will not be reflected as a
charge or credit to earnings until the underlying securities are sold, and then
only to the extent of the amount of gain or loss, if any, actually realized at
the time of sale.
Loans receivable increased by $2.1 million, or 4.0%, from $53.2 million at
December 31, 1996 to $55.3 million at June 30, 1997. The increase in loans
during this six-month period reflects management's success in loan solicitation,
which included the introduction of consumer auto loans in the first quarter of
1997.
Deposits decreased by $619,000, or 1.4%, from $42.8 million at December 31, 1996
to $42.2 million at June 30, 1997. This decrease is reflective of the strong
competition within the local market area.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
NET INCOME
Net income for the three months ended June 30, 1997 was $496,000 compared to
$192,000 for the corresponding period in 1996, an increase of $304,000, or
157.6%. The increase resulted primarily from a gain on the sale of securities of
$420,000 and an increase in net interest income of $32,000 offset by an increase
in income tax expense of $148,000.
INTEREST INCOME
Interest income totaled $1.2 million and $1.1 million for the three months ended
June 30, 1997 and 1996, respectively. The increase in interest income of
$84,000, or 7.8%, for the three months ended June 30, 1997 as compared to the
same period for 1996 was due to an increase in the average rate earned on assets
from 7.4% to 7.8% and an increase of $1.9 million in the balance of average
earning assets.
8
<PAGE>
INTEREST EXPENSE
Interest expense totaled $580,000 and $529,000 for the three months ended June
30, 1997 and 1996, respectively. The increase in interest expense of $51,000 or
9.8%, for the three months ended June 30, 1997 as compared to the same period
for 1996 was due to an increase in average interest rates paid on interest-
bearing liabilities, from 4.8% to 5.1%, plus an increase of $2.3 million in the
balance of average Federal Home Loan Bank borrowings offset by the decrease of
$1.0 million in the average balance of deposits, during the three months ended
June 30, 1997 compared to the same period in 1996.
PROVISION FOR LOAN LOSSES
The Bank established a provision for loan losses of $6,000 for the three month
period ended June 30, 1997 and 1996. Management considers many factors in
determining the necessary level of the allowance for loan losses, including an
analysis of specific loans in the portfolio, estimated value of the underlying
collateral, assessment of general trends in the real estate market, delinquency
trends, prospective economic and regulatory conditions, inherent loss in the
loan portfolio, and the relationship of the allowance for loan losses to
outstanding loans. At June 30, 1997 the allowance for loan losses represented
.20% of total loans compared to .21% at June 30, 1996.
There can be no assurance that management will not decide to increase the
allowance for loan losses or that regulators, when reviewing the Bank's loan
portfolios in the future, will not request the Bank to increase such allowance,
either of which could adversely affect bank earnings. Further, there can be no
assurance that the Bank's actual loan losses will not exceed its allowance for
loan losses.
NON-INTEREST INCOME
Non-interest income amounted to $435,000 and $13,000 for the three months ended
June 30, 1997 and 1996, respectively. The increase was due primarily to a
$420,000 gain resulting from the sale of investments classified as available-
for-sale.
NON-INTEREST EXPENSE
Non-interest expense totaled $252,000 and $249,000 for the three months ended
June 30, 1997 and 1996, respectively, an increase of $3,000, or 1.4%, and such
expense amounted to 1.7% of average assets for both periods. The increase was
due to a $5,000 increase in compensation and benefits plus immaterial increases
totaling $14,000 in various other non-interest expense categories, offset by a
$16,000 decrease in federal insurance premiums. The increase of $5,000 in
salaries and benefits relates mainly to normal salary increases. The decrease of
$16,000 in federal insurance premiums was the result of the reduction of the
insurance assessment rate on the Bank's deposits after the special assessment on
September 30, 1996 to recapitalize the Savings Association Insurance Fund.
INCOME TAXES
The provision for income taxes for the three months ended June 30, 1997 and 1996
was $255,000 and $107,000, respectively, which, as a percentage of income before
income taxes was 34% and 35% for the 1997 and 1996 periods, respectively.
9
<PAGE>
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
NET INCOME
Net income for the six months ended June 30, 1997 was $678,000, as compared to
$360,000 for the corresponding period in 1996, an increase of $318,000, or
88.7%. The increase resulted primarily from an increase of $426,000 in non-
interest income and an increase of $62,000 in net interest income offset by an
increase of $155,000 in income tax expense and a $15,000 increase in non-
interest expense.
INTEREST INCOME
Interest income totaled $2.3 million and $2.1 million for the six months ended
June 30, 1997 and 1996, respectively. The increase in interest income of
$153,000, or 7.2%, for the six months ended June 30, 1997 as compared to the
same period for 1996 was due to an increase in the average rate earned on
interest earning assets from 7.4% to 7.7% and an increase of $2.1 million in the
average balance of interest earning assets.
INTEREST EXPENSE
Interest expense totaled $1.1 million and $1.0 million for the six months ended
June 30, 1997 and 1996, respectively. The increase in interest expense of
$97,000, or 9.2%, for the six months ended June 30, 1997 as compared to the same
period in 1996 was due to an increase of .23% in the average interest rate paid
on interest bearing liabilities, plus an increase of $1.6 million in the balance
of average Federal Home Loan Bank borrowings offset by the decrease of $74,000
in the average balance of deposits during the six months ended June 30, 1997
compared to the same period in 1996.
PROVISION FOR LOAN LOSSES
The Bank established a provision for loan losses of $6,000 and $12,000 for the
six month period ended June 30, 1997 and 1996, respectively. Management
considers many factors in determining the necessary level of the allowance for
loan losses, including an analysis of specific loans in the portfolio, estimated
value of the underlying collateral, assessment of general trends in the real
estate market, delinquency trends, prospective economic and regulatory
conditions, inherent loss in the loan portfolio, and the relationship of the
allowance for loan losses to outstanding loans.
NON-INTEREST INCOME
Non-interest income amounted to $450,000 and $24,000 for the six months ended
June 30, 1997 and 1996, respectively. The increase was due primarily to a
$420,000 gain resulting from the sale of investments classified as available-
for-sale.
NON-INTEREST EXPENSE
Non-interest expense totaled $541,000 and $526,000 for the six months ended June
30, 1997 and 1996, respectively, an increase of $15,000, or 2.9%, and such
expense amounted to 1.8% of average assets for both periods. The increase was
primarily due to an increase of $15,000 in compensation and benefits and an
increase of $42,000 in loss on real estate owned offset by a $31,000 decrease in
federal insurance premiums and a $11,000 decrease in all other non-interest
expenses. The increase of $15,000 in salaries and benefits relates mainly to
normal salary increases. The Company sold property held as real estate owned
during the six months ended June 30, 1997, which resulted in a $42,000 loss. The
decrease of $31,000 in federal insurance premiums was due to the reduction of
the insurance assessment rate on the Bank's deposits resulting from the
10
<PAGE>
recapitalization of the Savings Association Insurance Fund in 1996. The $11,000
decrease in other noninterest expenses is primarily due to decreases in
advertising and franchise taxes.
INCOME TAXES
The provision for income taxes for the six months ended June 30, 1997 and 1996
was $349,000 and $194,000, respectively, and, as a percentage of income before
income taxes was 34% and 35% for the 1997 and 1996 periods, respectively.
NON-PERFORMING ASSETS
The following table sets forth information with respect to the Bank's non-
performing assets at the dates indicated. No loans were recorded as
restructured loans within the meaning of SFAS No. 15 at the dates indicated.
<TABLE>
<CAPTION>
JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
(amounts in thousands)
<S> <C> <C>
Loans accounted for on a non-accrual basis:(1)
Real Estate:
Residential.................................... $ 89 $ 87
Commercial.....................................
Consumer......................................... 24
---- ----
Total......................................... $113 $ 87
==== ====
Accruing loans which are contractually past due
90 days or more:
Real Estate:
Residential.................................... 379 359
Commercial.....................................
Consumer.........................................
---- ----
Total......................................... 379 359
==== ====
Total of loans accounted for as non-accrual or as
accruing past due 90 days or more................ $492 $446
==== ====
Percentage of total loans........................... .89% .82%
==== ====
Other non-performing assets (2)..................... $ $227
==== ====
Restructured loans................................. $272 $271
==== ====
</TABLE>
(1) Non-accrual status denotes any mortgage loan past due 90 days and whose loan
balance, plus accrued interest exceeds 90% of the estimated loan collateral
value, and any consumer or commercial loan more than 90 days past due.
Payments received on a non-accrual loan are either applied to the
outstanding principal balance or recorded as interest income, or both,
depending on assessment of the collectibility of the loan.
(2) Other non-performing assets represent property acquired by the Bank through
foreclosure or repossession. Such property is carried at the lower of its
fair market value or the principal balance of the related loan.
11
<PAGE>
During the six months ended June 30, 1997, additional interest income of $5,837
would have been recorded on loans accounted for on a non-accrual basis if the
loans had been current throughout the year. Interest on such loans actually
included in income during the six months ended June 30, 1997 totaled $2,497.
At June 30, 1997, there were no loans identified by management, which were not
reflected in the preceding table, but as to which known information about
possible credit problems of borrowers caused management to have serious doubts
as to the ability of the borrowers to comply with present loan repayment terms.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's principal sources of funds for operations are deposits from its
primary market area, principal and interest payments on loans, and proceeds from
maturing investment securities. The principal uses of funds by the Bank include
the origination of mortgage and consumer loans and the purchase of investment
securities.
The Bank is required by current OTS regulations to maintain specified liquid
assets of at least 5% of its net withdrawable accounts plus short-term
borrowings. Short-term liquid assets (those maturing in one year or less) may
not be less than 1% of the Bank's liquidity base. During the first six months
of fiscal year 1997, the Bank satisfied all regulatory liquidity requirements,
and management believes that the liquidity levels maintained are adequate to
meet potential deposit outflows, loan demand, and normal operations.
The Bank must satisfy three capital standards, as set by the OTS. These
standards include a ratio of core capital to adjusted total assets of 3.0%, a
tangible capital standard expressed as 1.5% of total adjusted assets, and a
combination of core and "supplementary" capital equal to 8.0% of risk-weighted
assets. At June 30, 1997, the Bank's capital was in excess of these
requirements (see Note 3).
At June 30, 1997, the Bank had outstanding commitments to originate loans
totaling $2,183,000, excluding $703,000 in approved but unused home equity lines
of credit. Management believes that the Bank's sources of funds are sufficient
to fund all of its outstanding commitments. Certificates of deposits which are
scheduled to mature in one year or less from June 30, 1997 totaled $22.3
million. Management believes that a significant percentage of such deposits
will remain with the Bank.
12
<PAGE>
<TABLE>
<CAPTION>
PART II. OTHER INFORMATION
<S> <C> <C>
Item 1. LEGAL PROCEEDINGS None
Item 2. CHANGES IN SECURITIES None
Item 3. DEFAULTS UPON SENIOR SECURITIES None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
</TABLE>
The Company's Annual Meeting of Stockholders was held on April 15, 1997. 835,477
shares of CKF Bancorp, Inc. common stock were represented at the Annual Meeting
in person or by proxy.
Stockholders voted in favor of the election of two nominees for director. The
voting results for each nominee were as follows:
<TABLE>
<CAPTION>
VOTES IN VOTES
NOMINEE FAVOR OF ELECTION WITHHELD
- ------- ----------------- --------
<S> <C> <C>
W. Banks Hudson, III 834,447 1,000
Thomas R. Poland 835,447
</TABLE>
<TABLE>
<S> <C> <C>
Item 5. OTHER INFORMATION None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following Exhibit is filed herewith:
Exhibit 27 Financial Data Schedule
(b) No reports on Form 8-K were filed during
the quarter ended June 30, 1997.
</TABLE>
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CKF BANCORP, INC.
Date: August 5, 1997 /s/ John H. Stigall
--------------------------------------------
John H. Stigall, President and
Chief Executive Officer
(Duly Authorized Officer)
Date: August 5, 1997 /s/ Ann L. Hooks
--------------------------------------------
Ann L. Hooks, Vice President and Treasurer
(Principal Financial and Accounting Officer)
14
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<PAGE>
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