<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 March 31, 1999.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-26570
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 May 3, 1999, 886,175 shares of the registrant's common stock were issued
and outstanding.
Page 1 of 15 Pages Exhibit Index at Page N/A
---
<PAGE>
CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1999
(unaudited) and December 31, 1998............................... 3
Consolidated Statements of Income for the Three-Month Periods Ended
March 31, 1999 and 1998 (unaudited)............................. 4
Consolidated Statement of Changes in Stockholders'Equity for the
Three Month Period Ended March 31, 1999 (unaudited)............ 5
Consolidated Statements of Cash Flows for the Three-Month
Periods Ended March 31, 1999 (unaudited)....................... 6
Notes to Consolidated Financial Statements.......................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................... 14
Item 2. Changes in Securities............................................... 14
Item 3. Defaults Upon Senior Securities..................................... 14
Item 4. Submission of Matters to a Vote of Security Holders................. 14
Item 5. Other Information................................................... 14
Item 6. Exhibits and Reports on Form 8-K.................................... 14
SIGNATURES
<PAGE>
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
---------------
<TABLE>
<CAPTION>
AS OF AS OF
MARCH 31, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 182,881 $ 545,711
Interest bearing deposits 2,603,778 3,458,161
Investment securities:
Securities available-for-sale 573,125 634,585
Securities held-to-maturity 2,022,705 2,042,705
Loans receivable, net 58,333,437 57,911,846
Accrued interest receivable 402,081 431,153
Office property and equipment, net 538,340 546,203
Other assets 10,371 9,551
------------- ------------
Total assets $ 64,666,718 $ 65,579,915
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Advance from Federal Home Loan Bank $ 50,335,180 $ 48,938,374
Advance payment by borrowers for taxes 112,483 2,119,932
and insurance
Other liabilities 63,634 39,737
673,754 615,167
------------- ------------
Total liabilities
51,185,051 51,713,210
Stockholders' equity:
Common stock, $.01 par value, 4,000,000
shares authorized; 1,000,000 shares issued 10,000 10,000
Additional paid-in capital 9,563,796 9,555,017
Retained earnings, substantially restricted 7,324,278 7,366,006
Accumulated other comprehensive income 371,802 410,294
Treasury stock, 106,525 and 85,945 shares, respectively, at cost (2,052,191) (1,683,489
Incentive Plan Trust, 60,100 and 62,500 shares, respectively, at cost (1,179,853) (1,221,853)
Unearned Employee Stock Ownership Plan (ESOP) stock (556,165) (569,270)
------------- ------------
Total shareholder's equity 13,481,667 13,866,705
------------- ------------
Total liabilities and shareholders' equity $ 64,666,718 $ 65,579,915
============= ============
</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
ENDED MARCH 31
------------------------------
1999 1998
------------- -------------
<S> <C> <C>
INTEREST INCOME:
Interest on loans $ 1,057,822 $ 1,112,986
Interest and dividends on investments 32,137 34,227
Other interest income 29,144 22,373
------------- -------------
Total interest income 1,119,103 1,169,586
------------- -------------
INTEREST EXPENSE:
Interest on deposits 610,024 567,855
Other interest 3,544 48,486
------------- -------------
Total interest expense 613,568 616,341
------------- -------------
NET INTEREST INCOME 505,535 553,245
Provision for loan losses 9,000 6,000
------------- -------------
Net interest income after provision for loan losses 496,535 547,245
------------- -------------
NON-INTEREST INCOME:
Loan and other service fees 20,375 18,339
Other, net 979 540
------------- -------------
Total non-interest income 21,354 18,879
------------- -------------
NON-INTEREST EXPENSE:
Compensation and benefits 137,129 141,214
Federal insurance premium 6,988 6,717
Legal and professional fees 12,455 5,816
State franchise tax 13,149 13,231
Occupancy expense, net 11,959 9,408
Data processing 14,634 13,632
Other operating expenses 60,016 55,708
------------- -------------
Total non-interest expense 256,330 245,726
------------- -------------
Income before income tax expense 261,559 320,398
Provision for income taxes 88,937 108,627
------------- -------------
Net income $ 172,622 $ 211,771
============= =============
Earnings per common share .22 .27
============= =============
Earnings per common share - assuming dilution .22 .26
============= =============
Weighted average common shares outstanding
during the quarter 785,465 792,309
============= =============
Weighted average common shares after dilutive effect outstanding
during the quarter 799,918 818,652
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1999
(UNAUDITED)
-------------------
<TABLE>
<CAPTION>
Accumlated
Additional Other Incentive
Common Paid-in Retained Comprehensive Treasury Plan
Stock Capital Earnings Income Stock Trust
----- ---------- --------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $10,000 $9,555,017 $7,366,006 $ 410,294 $ (1,683,489) $ (1,221,853)
Comprehensive income:
Net income 172,622
Other comprehensive loss, net of tax
unrealized loss on securities (38,492)
Total comprehensive income
Dividend declared (214,350)
ESOP shares earned 19,279
Purchase of common stock, 20,580 shares (368,702)
Shares issued upon exercise of options (10,500) 42,000
------- ---------- ---------- ---------- -------------- -------------
Balance, March 31, 1999 $10,000 $9,563,796 $7,324,278 $ 371,802 $ (2,052,191) $ (1,179,853)
======= ========== ========== ========== ============== ==============
<CAPTION>
Unearned Total
ESOP Stockholders'
Shares Equity
------------ --------------
<S> <C> <C>
Balance, December 31, 1998 $ (569,270) $ 13,866,705
---------------
Comprehensive income:
Net income 172,622
Other comprehensive loss, net of tax
unrealized loss on securities (38,492)
---------------
Total comprehensive income 134,130
Dividend declared (214,350)
ESOP shares earned 13,105 32,384
Purchase of common stock, 20,580 shares (368,702)
Shares issued upon exercise of options 31,500
------------ ---------------
Balance, March 31, 1999 $ (556,165) $ 13,481,667
============ ===============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
---------------------
<TABLE>
<CAPTION>
FOR THE THREE-MONTH PERIODS
ENDED MARCH 31
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 172,622 $ 211,771
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Provision for loan losses 9,000 6,000
Amortization of loan fees (1,964) (5,371)
ESOP benefit expense 23,493 25,895
Provision for depreciation 7,863 6,870
FHLB stock dividend (9,500) (9,200)
Amortization of investment premium 1,275 859
Change in:
Interest receivable 29,072 (4,494)
Other liabilities and federal income taxes payable 79,257 135,247
Prepaid expense (820) 5,842
Interest payable 2,296 (2,999)
------------- ----------
Net cash provided by operating activities 312,594 370,420
------------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan originations and principal payment on loans, net (428,627) (752,536)
Purchase of office equipment (10,950)
Principle repayment on mortgage back securities 28,226 38,812
------------- ----------
Net cash (used) by investing activities (400,401) (724,674)
------------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW accounts
and savings accounts 676,206 722,992
Net increase (decrease) in certificates of deposit 720,600 1,240,672
Net increase (decrease) in custodial accounts 23,897 27,949
Payments on FHLB advances (2,007,449) (2,033,082)
Dividends paid (214,350) (201,024)
Purchase of common stock (368,702) (633,876)
Additional principal payment on ESOP loan 8,892 19,211
Proceeds from exercise of stock option 31,500 115,500
------------- ----------
Net cash provided (used) by financing activities (1,129,406) (741,658)
------------- ----------
Increase (decrease) in cash and cash equivalents (1,217,213) (1,095,912)
Cash and cash equivalents, beginning of period 4,003,872 3,273,557
------------- ----------
Cash and cash equivalents, end of period $ 2,786,659 $2,177,645
============= ==========
Supplemental disclosures of cash flow information:
Cash paid for income taxes $ $ 13,219
============= ==========
Cash paid for interest $ 611,272 $ 613,342
============= ==========
</TABLE>
See accompanying notes ot consolidated financial statements.
6
<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, cash on
deposit with the Bank, 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 month period ended March 31, 1999 are not necessarily
indicative of results that may be expected for the entire fiscal year
ending December 31, 1999.
2. REGULATORY CAPITAL
At March 31, 1999, the Bank's regulatory capital levels exceeded each of
the three regulatory capital requirements. The following table reconciles
the Bank's stockholder equity at March 31, 1999 to its regulatory capital
requirements.
<TABLE>
<CAPTION>
REGULATORY CAPITAL
------------------------------
CORE RISK-BASED
CAPITAL CAPITAL
-------------- -------------
(In thousands)
<S> <C> <C>
Stockholder equity $ 11,738 $ 11,738
Net unrealized appreciation on investment
securities available-for-sale (372) (372)
General allowance for loan losses - 135
--------- ---------
Regulatory capital 11,366 11,501
Minimum capital requirement 2,564 3,049
--------- ---------
Excess regulatory capital $ 8,802 $ 8,452
========= =========
Minimum capital requirement as a percentage of assets 4.0% 8.0%
Regulatory capital in excess of minimum capital
requirements as a percentage of assets 13.7% 22.2%/1/
</TABLE>
____________________
/1/ Based on risk weighted assets.
7
<PAGE>
3. DIVIDENDS
A cash dividend of $0.27 per share was paid on February 10, 1999 to
stockholders of record as of January 28, 1999. The total dividends paid by
the Company for the quarter ended March 31, 1999 amounted to $214,350.
4. COMMON STOCK
During March 1999, options to acquire 2,400 shares at $13.125 per share
were exercised with the Company receiving total proceeds of $31,500. In
addition, the Company purchased 21,580 shares of treasury stock at a cost
of $368,702 during the three months ended March 31, 1999.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FINANCIAL CONDITION
Total assets decreased approximately $913,000, or 1.4%, from $65.6 million at
December 31, 1998 to $64.7 million at March 31, 1999. The net decrease in assets
includes a $1.2 million or 30.4% decrease in cash and interest bearing deposits
and a $81,000 or 3.0% decrease in investment securities offset by a $422,000 or
.7% increase in net loans receivable.
The Company's aggregate investment securities portfolio decreased $81,000, or
3.0%, to $2.6 million at March 31, 1999. Securities classified as available-for-
sale and recorded at market value per SFAS No. 115 decreased $61,000 due solely
to the decrease in the market value of such securities. Securities held-to-
maturity decreased $20,000 due to principle repayments offset by stock dividends
and premium amortization.
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 March 31, 1999, the Company included net unrealized gains of
approximately $372,000 in stockholders' equity. At December 31, 1998, the
Company included net unrealized gains of approximately $410,000 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 $422,000, or .7%, from $57.9 million at December
31, 1998 to $58.3 million at March 31, 1999 as management continued its efforts
to be competitive in meeting the loan demand in the Bank's market area.
Deposits increased by $1.4 million, or 2.9%, to $50.3 million at March 31, 1999.
This increase reflects the Company's competitively priced product line within
the local market area.
8
<PAGE>
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
NET INCOME
Net income for the three months ended March 31, 1999 was $173,000 compared to
$212,000 for the corresponding period in 1998, a decrease of $39,000, or 18.4%.
The decrease resulted primarily from decreases in net interest income of $48,000
and increases in non-interest expense of $11,000, offset by a decrease in income
tax expense of $20,000.
INTEREST INCOME
Interest income totaled 7.1% of average assets for the quarter ended March 31,
1999 compared to 7.7% for the quarter ended March 31, 1998. Interest income
decreased $50,000, or 4.3%, to $1.1 million for the quarter ended March 31, 1999
from $1.2 million for the quarter ended March 31, 1998. The decrease was due to
a decrease of 60 basis points in the effective rate earned on interest-bearing
assets for the quarter ended March 31, 1999 as compared to the quarter ended
March 31, 1998, offset by an increase in the average earning assets of $2.3
million for the quarter ended March 31, 1999 compared to the same period in
1998.
INTEREST EXPENSE
Interest expense totaled $614,000 and $616,000 for the three months ended March
31, 1999 and 1998, respectively. The decrease in interest expense of $2,000 or
.4%, for the three months ended March 31, 1999 as compared to the same period
for 1998 was due to a decrease in average interest rates paid on deposits from
5.1% to 4.9%, offset by an increase of $2.1 million in average interest bearing
liabilities for the quarter ended March 31, 1999 compared to the same period in
1998.
PROVISION FOR LOAN LOSSES
The Bank established a provision for loan losses of $9,000 and $6,000 for the
three month period ended March 31, 1999 and 1998, respectively. Management
established the Bank's existing level of its allowance for loan losses based
upon its analysis of various factors, including the market value of the
underlying collateral, composition of the loan portfolio, the Bank's historical
loss experience, delinquency trends and prevailing and projected economic
conditions in the Bank's market area.
NON-INTEREST INCOME
Non-interest income amounted to $21,000 and $19,000 for the three months ended
March 31, 1999 and 1998, respectively. Non-interest income included primarily
fees charged in connection with loans and service charges on deposit accounts of
$20,000 and $18,000 for the three months ended March 31, 1999 and 1998,
respectively.
NON-INTEREST EXPENSE
Non-interest expense totaled $256,000 and $245,000 for the three months ended
March 31, 1999 and 1998, respectively, an increase of $11,000, or 4.3%, and such
expense amounted to 1.6% of average assets for both periods. The increase of
$11,000 was due to a $7,000 increase in legal and professional fees expense and
a $4,000 increase in other operating expenses. The increase in legal and
professional fees expense was due to services performed regarding an additional
branch the Company is planning to build in the Ridgefield
9
<PAGE>
Shopping Center in Danville, Kentucky. The additional branch is expected to
begin operations during the first quarter of year 2000.
INCOME TAXES
The provision for income taxes for the three months ended March 31, 1999 and
1998 was $89,000 and $109,000, respectively, which, as a percentage of income
before income taxes was 34% for both periods.
YEAR 2000 READINESS DISCLOSURE
The Company's operations, like those of most financial institutions, are
substantially dependent upon computer systems for lending and deposit
activities. The Company is addressing the potential problems associated with the
possibility that the computers which control its data processing activities,
facilities, and networks may not be programmed to read four-digit dates, and
upon the arrival of the year 2000, may recognize the two-digit code "00" as the
year 1900 rather than 2000. If uncorrected, this could cause systems to fail to
function or generate erroneous information.
The following information is provided in accordance with the Year 2000
Information and Readiness Disclosure Act of 1998, a special law, which
encourages companies, like Central Kentucky Federal, to communicate information
about their Year 2000 readiness plan.
Central Kentucky Federal Savings Bank (CKF) began preparation for achieving Year
2000 compliance in May of 1997. All electronic data exchange systems, including
both in-house applications and service bureau providers, were inventoried and
assessed for Year 2000 compliance. Systems classified as mission critical have
either been verified as Y2K compliant, replaced with compliant updates or
scheduled for replacement and testing.
CKF is heavily dependent upon one major data processing service provider.
Intrieve, Inc. provides customer account records, check clearing, general
ledger, and ATM services to CKF. The majority of systems provided by Intrieve,
Inc. were certified Y2K ready by the end of 1998. Intrieve, Inc. has completed
migration of all core systems to a new Y2K ready mainframe computer. Proxy
testing was completed in October 1998 and end-to-end testing was completed in
November 1998. However, CKF will be replacing its on-line teller system with a
Y2K compliant network in April of 1999. This equipment will be tested and
certified in May of 1999. Similarly, the ATM network was upgraded in September
of 1998 and could not be tested in conjunction with other systems at that time.
Intrieve decided to conduct end-to-end testing for ATM systems on a proxy basis,
due to complexity of coordinating with the various regional and national
networks. One machine of each manufacturer and type was selected for testing.
The testing was completed in February 1999, and the test results were verified
as compliant.
CKF has spent approximately $8,000 for Y2K compliance efforts through March 31,
1999. It expects to spend an additional $75,000 through the end of 1999. These
future costs are estimated at $40,000 for hardware changes, $30,000 for software
upgrades, and an additional $5,000 for labor. All of these funds will come from
budgeted operational and capital expenditure accounts.
The most critical element of CKF's Year 2000 preparation is the performance of
Intrieve, Inc. Should Intrieve not meet deadlines or fail to successfully modify
its systems, CKF would face the prospect of having to revert to manual posting
and processing of customer accounts. Based on the number of accounts and
activity volume, it is possible to continue operations for a reasonable period
of time.
10
<PAGE>
On August 1, 1998, the bank issued a Year 2000 contingency plan. Each core
business was evaluated and prioritized for Year 2000 impact. Those systems
identified as mission critical have a business recovery/contingency plan. The
majority of these systems can be dealt with in a manner that will result in
minimal impact to the customers or financial condition of the bank. However, if
Intrieve, Inc. should fail to function properly after the century change date, a
significant impact on customers, and operations would occur. Therefore, an
extensive set of plans have been prepared to continue operations as close to
normal as possible. Some of the key contingency items are: maintaining machine-
readable copies of master files, printed and microfiche copies of records/trial
balances, off-site storage of back-up records and computer hardware redundancy.
If mainframe processing is unavailable to the bank, a plan for manual posting
and processing is in place. With electronic records as of December 29, 1999,
downloaded via diskettes to a stand alone PC at the bank, processing will
continue through a spreadsheet (Excel) application. It is expected that this
manual process will be adequate to maintain operations during the most likely
worst case scenario.
The foregoing discussion, regarding the timing , effectiveness, implementation,
and cost of CKF's Year 2000 efforts, contains forward-looking statements, which
are based on management's best estimates derived using assumptions. These
forward-looking statements involve inherent risks and uncertainties, and actual
results could differ materially from those contemplated. Also, please note that
the CKF will periodically update and revise this Year 2000 Readiness Disclosure
as conditions warrant.
11
<PAGE>
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>
MARCH 31, DECEMBER 31,
1999 1998
---------- -------------
(amounts in thousands)
<S> <C> <C>
Loans accounted for on a non-accrual basis:/1/
Real Estate:
Residential $ 223 $ 27
Commercial
Consumer 13 38
-------- --------
Total $ 236 $ 65
======== ========
Accruing loans which are contractually past due 90 days or more:
Real Estate:
Residential 351 356
Commercial
Consumer 15
-------- --------
Total 366 356
======== ========
Total of loans accounted for as non-accrual or as accruing past
due 90 days or more $ 602 $ 421
======== ========
Percentage of total loans 1.03% .73%
======== ========
Other non-performing assets/2/ $ - $ -
======== ========
Restructured loans $ - $ -
======== ========
</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.
During the three months ended March 31, 1999, additional interest income of
$9,277 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 three months ended March 31, 1999 totaled $658.
At March 31, 1999, 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
12
<PAGE>
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 4% 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 quarter of
fiscal year 1999, 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 two capital standards, as set by the OTS. These standards
include a ratio of core capital to adjusted total assets of 4.0%, and a
combination of core and "supplementary" capital equal to 8.0% of risk-weighted
assets.
At March 31, 1999, the Bank had outstanding commitments to originate loans
totaling $318,000, excluding $932,000 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 March 31, 1999 totaled $24.7
million. Management believes that a significant percentage of such deposits will
remain with the Bank.
13
<PAGE>
PART II. OTHER INFORMATION
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 None
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
March 31, 1999.
14
<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: May 3, 1999 /s/ John H. Stigall
------------------------------------------------------
John H. Stigall, President and Chief Executive Officer
(Duly Authorized Officer)
Date: May 3, 1999 /s/ Ann L. Hooks
------------------------------------------------------
Ann L. Hooks, Vice President, Treasurer, and Secretary
(Principal Financial and Accounting Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 183
<INT-BEARING-DEPOSITS> 2,604
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 573
<INVESTMENTS-CARRYING> 2,023
<INVESTMENTS-MARKET> 2,021
<LOANS> 58,468
<ALLOWANCE> 135
<TOTAL-ASSETS> 64,666
<DEPOSITS> 50,335
<SHORT-TERM> 0
<LIABILITIES-OTHER> 737
<LONG-TERM> 112
0
0
<COMMON> 10
<OTHER-SE> 13,472
<TOTAL-LIABILITIES-AND-EQUITY> 64,666
<INTEREST-LOAN> 1,058
<INTEREST-INVEST> 32
<INTEREST-OTHER> 29
<INTEREST-TOTAL> 1,119
<INTEREST-DEPOSIT> 610
<INTEREST-EXPENSE> 614
<INTEREST-INCOME-NET> 505
<LOAN-LOSSES> 9
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 256
<INCOME-PRETAX> 262
<INCOME-PRE-EXTRAORDINARY> 262
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 173
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.22
<YIELD-ACTUAL> 3.2
<LOANS-NON> 236
<LOANS-PAST> 366
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 148
<CHARGE-OFFS> 22
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 135
<ALLOWANCE-DOMESTIC> 135
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
