UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to _______________
Commission File Number: 33-84132
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COMMUNITY INVESTORS BANCORP, INC.
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(Exact name of small business issuer as specified in its charter)
Ohio 34-1779309
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
119 South Sandusky Avenue, Bucyrus, Ohio 44820
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(Address of principal executive offices)
(419) 562-7055
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(Issuer's telephone number)
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(Former name, former address and former fiscal year, if changed since last
report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: November 8, 2000 - 1,178,438 common
shares
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
Page 1 of 15 pages
<PAGE>
INDEX
Page
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II - OTHER INFORMATION 14
SIGNATURES 15
2
<PAGE>
Community Investors Bancorp, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
September 30, June 30,
ASSETS 2000 2000
<S> <C> <C>
Cash and due from banks $ 2,515 $ 1,701
Federal funds sold 265 310
Interest-bearing deposits in other financial institutions 255 302
------- -------
Cash and cash equivalents 3,035 2,313
Investment securities available for sale - at market 4,847 5,773
Investment securities held to maturity - at amortized cost, approximate market
value of $3,274 and $3,556 as of September 30, 2000 and June 30, 2000 3,322 3,616
Mortgage-backed securities available for sale - at market 8,710 9,103
Mortgage-backed securities held to maturity - at amortized cost, approximate market
value of $698 and $742 as of September 30, 2000 and June 30, 2000 715 766
Loans receivable - net 94,883 94,366
Property acquired in settlement of loans - 69
Office premises and equipment - at depreciated cost 680 692
Federal Home Loan Bank stock - at cost 1,535 1,507
Accrued interest receivable on loans 126 86
Accrued interest receivable on mortgage-backed securities 52 52
Accrued interest receivable on investments and interest-bearing deposits 173 118
Prepaid expenses and other assets 158 170
Prepaid federal income taxes 123 235
Deferred federal income taxes 73 168
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Total assets $118,432 $119,034
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 79,785 $ 79,138
Advances from the Federal Home Loan Bank 27,096 28,611
Advances by borrowers for taxes and insurance 100 5
Accrued interest payable 277 329
Other liabilities 175 188
------- -------
Total liabilities 107,433 108,271
Stockholders' equity
Preferred stock, 1,000,000 shares authorized, no par value; no shares issued - -
Common stock, 4,000,000 shares authorized, $.01 par value; 1,660,850 shares issued 17 17
Additional paid-in capital 7,195 7,191
Retained earnings, restricted 8,864 8,728
Shares acquired by stock benefit plans (440) (461)
Less 480,412 and 468,062 shares of treasury stock - at cost (4,510) (4,408)
Accumulated other comprehensive losses - unrealized losses on securities
designated as available for sale, net of related tax effects (127) (304)
------- -------
Total stockholders' equity 10,999 10,763
------- -------
Total liabilities and stockholders' equity $118,432 $119,034
======= =======
</TABLE>
3
<PAGE>
Community Investors Bancorp, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
For the three month periods ended September 30,
(In thousands, except share data)
2000 1999
<S> <C> <C>
Interest income
Loans $1,884 $1,748
Mortgage-backed securities 145 168
Investment securities 171 149
Interest-bearing deposits and other 17 9
----- -----
Total interest income 2,217 2,074
Interest expense
Deposits 890 877
Borrowings 455 344
----- -----
Total interest expense 1,345 1,221
----- -----
Net interest income 872 853
Provision for losses on loans 46 22
----- -----
Net interest income after provision
for losses on loans 826 831
Other income
Gain (loss) on sale of other repossessed assets (16) 2
Other operating 71 68
----- -----
Total other income 55 70
General, administrative and other expense
Employee compensation and benefits 300 269
Occupancy and equipment 33 34
Federal deposit insurance premiums 4 12
Franchise taxes 31 32
Expenses of property acquired in settlement of loans 1 8
Data processing 65 59
Other operating 117 109
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Total general, administrative and other expense 551 523
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Earnings before income taxes 330 378
Federal income taxes
Current 107 166
Deferred 4 (40)
----- -----
Total federal income taxes 111 126
----- -----
NET EARNINGS $ 219 $ 252
===== =====
EARNINGS PER SHARE
Basic $.20 $.22
=== ===
Diluted $.19 $.22
=== ===
</TABLE>
4
<PAGE>
Community Investors Bancorp, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three months ended September 30,
(In thousands)
2000 1999
<S> <C> <C>
Net earnings $ 219 $ 252
Other comprehensive income, net of tax:
Unrealized holding gains on securities during the period,
net of tax of $91 and $55 during the respective periods 177 106
---- ----
Comprehensive income $ 396 $ 358
==== ====
Accumulated comprehensive losses $(127) $(149)
==== ====
</TABLE>
5
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Community Investors Bancorp, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 30,
(In thousands)
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net earnings for the period $ 219 $ 252
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of discounts and premiums on loans,
investments and mortgage-backed securities - net 8 12
Amortization of deferred loan origination fees (12) (20)
Depreciation and amortization 15 14
Provision for losses on loans 46 22
Amortization expense of stock benefit plans 25 32
Gain (loss) on sale of property acquired in settlement of loans 16 (2)
Federal Home Loan Bank stock dividends (28) (25)
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans (40) (52)
Accrued interest receivable on mortgage-backed securities - 7
Accrued interest receivable on investments and
interest-bearing deposits (55) (100)
Prepaid expenses and other assets 12 (4)
Accrued interest payable (52) (10)
Other liabilities (13) 46
Federal income taxes
Current 112 37
Deferred 4 (40)
----- -----
Net cash provided by operating activities 257 169
Cash flows provided by (used in) investing activities:
Proceeds from maturity of investment securities 1,301 1
Purchase of investment securities designated as available for sale - (1,000)
Principal repayments on mortgage-backed securities 623 1,129
Loan principal repayments 3,419 5,631
Loan disbursements (3,969) (8,786)
Purchase of office premises and equipment (3) (11)
Proceeds from sale of other repossessed assets 52 69
----- -----
Net cash provided by (used in) investing activities 1,423 (2,967)
----- -----
Net cash provided by (used in) operating and investing
activities (subtotal carried forward) 1,680 (2,798)
----- -----
</TABLE>
6
<PAGE>
Community Investors Bancorp, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the three months ended September 30,
(In thousands)
2000 1999
<S> <C> <C>
Net cash provided by (used in) operating and investing activities
(subtotal brought forward) $1,680 $(2,798)
Cash flows provided by (used in) financing activities:
Net increase in deposit accounts 647 177
Proceeds from Federal Home Loan Bank advances 3,550 13,000
Repayment of Federal Home Loan Bank advances (5,065) (11,018)
Advances by borrowers for taxes and insurance 95 2
Purchase of treasury stock (102) -
Dividends on common stock (83) (79)
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Net cash provided by (used in) financing activities (958) 2,082
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Net increase (decrease) in cash and cash equivalents 722 (716)
Cash and cash equivalents at beginning of period 2,313 3,497
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Cash and cash equivalents at end of period $3,035 $ 2,781
===== ======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ - $ 142
===== ======
Interest on deposits and borrowings $1,397 $ 1,131
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Supplemental disclosure of noncash investing activities:
Transfers of loans to other repossessed assets $ - $ 125
===== ======
Unrealized gains on securities designated as available for
sale, net of related tax effects $ 177 $ 106
===== ======
</TABLE>
7
<PAGE>
Community Investors Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2000 and 1999
1. Basis of Presentation
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-QSB and, therefore, do not
include information or footnotes necessary for a complete presentation of
consolidated financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. Accordingly, these
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto of Community Investors Bancorp, Inc.
(the "Corporation") included in the Annual Report on Form 10-KSB for the
year ended June 30, 2000. However, in the opinion of management, all
adjustments (consisting of only normal recurring accruals) which are
necessary for a fair presentation of the financial statements have been
included. The results of operations for the three month period ended
September 30, 2000 are not necessarily indicative of the results which may
be expected for an entire fiscal year.
2. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Corporation and its wholly owned subsidiary, First Federal Savings and
Loan Association of Bucyrus (the "Association"). All significant
intercompany items have been eliminated.
3. Earnings Per Share
Basic earnings per share is computed based upon the weighted-average common
shares outstanding during the period less shares in the ESOP that are
unallocated and not committed to be released. Weighted-average common shares
deemed outstanding, which gives effect to 65,836 unallocated ESOP shares,
totaled 1,121,494 for the three month period ended September 30, 2000.
Weighted-average common shares deemed outstanding, which gives effect to
79,272 unallocated ESOP shares, totaled 1,139,412 for the three month period
ended September 30, 1999.
Diluted earnings per share is computed taking into consideration common
shares outstanding and dilutive potential common shares to be issued under
the Corporation's stock option plan. Weighted-average common shares deemed
outstanding for purposes of computing diluted earnings per share totaled
1,135,818 and 1,162,133 for the three month periods ended September 30, 2000
and 1999, respectively. Incremental shares related to the assumed exercise
of stock options included in the calculation of diluted earnings per share
totaled 14,324 and 22,721 for the three month periods ended September 30,
2000 and 1999, respectively.
Options to purchase 19,521 shares of common stock with a weighted-average
exercise price of $10.72 were outstanding at September 30, 2000, but were
excluded from the computation of diluted earnings per share because their
exercise prices were greater than the average market price of the common
shares.
8
<PAGE>
Community Investors Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the three months ended September 30, 2000 and 1999
4. Effects of Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which requires entities
to recognize all derivatives in their financial statements as either assets
or liabilities measured at fair value. SFAS No. 133 also specifies new
methods of accounting for hedging transactions, prescribes the items and
transactions that may be hedged, and specifies detailed criteria to be met
to qualify for hedge accounting.
The definition of a derivative financial instrument is complex, but in
general, it is an instrument with one or more underlyings, such as an
interest rate or foreign exchange rate, that is applied to a notional
amount, such as an amount of currency, to determine the settlement
amount(s). It generally requires no significant initial investment and can
be settled net or by delivery of an asset that is readily convertible to
cash. SFAS No. 133 applies to derivatives embedded in other contracts,
unless the underlying of the embedded derivative is clearly and closely
related to the host contract.
SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years
beginning after June 15, 2000. On adoption, entities are permitted to
transfer held-to-maturity debt securities to the available-for-sale or
trading category without calling into question their intent to hold other
debt securities to maturity in the future. Management adopted SFAS No. 133
effective July 1, 2000, as required, without material impact on the
Corporation's financial statements.
In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities", which
revises the standards for accounting for securitizations and other transfers
of financial assets and collateral and requires certain disclosures, but
carries over most of the provisions of SFAS No. 125 without reconsideration.
SFAS No. 140 is effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after March 31, 2001. The
Statement is effective for recognition and reclassification of collateral
and for disclosures relating to securitization transactions and collateral
for fiscal years ending after December 15, 2000. SFAS No. 140 is not
expected to have a material effect on the Corporation's financial position
or results of operations.
9
<PAGE>
Community Investors Bancorp, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward-Looking Statements
In addition to historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties.
Economic circumstances, the Corporation's operations and the Corporation's
actual results could differ significantly from those discussed in the
forward-looking statements. Some of the factors that could cause or contribute
to such differences are discussed herein but also include changes in the economy
and interest rates in the nation and the Corporation's market area generally.
Some of the forward-looking statements included herein are the statements
regarding management's determination of the amount and adequacy of the allowance
for loan losses and the effect of recent accounting pronouncements.
Discussion of Financial Condition Changes from June 30, 2000 to September 30,
2000
At September 30, 2000, the Corporation's assets totaled $118.4 million, a
decrease of $602,000, or 0.5%, from the level reported at June 30, 2000. The
decrease in assets was primarily attributable to a $1.7 million decrease in
investment and mortgage-backed securities, which was partially offset by
$517,000 increase in loans receivable.
Cash, interest-bearing deposits, investment securities and mortgage-backed
securities totaled $20.6 million at September 30, 2000, a decrease of $176,000,
or .8%, from June 30, 2000. The decrease was due primarily to maturities and
repayments of investment and mortgage-backed securities of $1.3 million and
$623,000, respectively. Regulatory liquidity amounted to 10.85% at September 30,
2000.
Loans receivable totaled $94.9 million at September 30, 2000, an increase of
$517,000, or .5%, over June 30, 2000 levels. Loan disbursements amounted to $4.0
million which were partially offset by principal repayments of $3.4 million. The
volume of loan disbursements during the three months ended September 30, 2000
decreased by $4.8 million, or 54.8%, from the same period in 1999 due to rising
interest rates and less refinancing activity. The allowance for loan losses
totaled $511,000 at September 30, 2000, as compared to $484,000 at June 30,
2000. Nonperforming loans totaled $540,000 at September 30, 2000, as compared to
$449,000 at June 30, 2000. The allowance for loan losses represented 94.6% of
nonperforming loans as of September 30, 2000 and 107.8% at June 30, 2000.
Although management believes that its allowance for loan losses at September 30,
2000, is adequate based upon the available facts and circumstances, there can be
no assurance that additions to such allowance will not be necessary in future
periods, which could adversely affect the Corporation's results of operations.
10
<PAGE>
Community Investors Bancorp, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Discussion of Financial Condition Changes from June 30, 2000 to September 30,
2000 (continued)
Deposits totaled $79.8 million at September 30, 2000, an increase of $647,000,
or 0.8%, over June 30, 2000 levels. Management continued its efforts to achieve
a moderate rate of growth through marketing and pricing strategies.
Advances from the Federal Home Loan Bank totaled $27.1 million at September 30,
2000, a decrease of $1.5 million, or 5.3%, from June 30, 2000 levels. Advances
were repaid primarily with funds from increased deposit balances and maturities
of investment and mortgage-backed securities, as previously discussed.
Stockholder's equity totaled $11.0 million at September 30, 2000, an increase of
$236,000, or 2.2% over June 30, 2000 levels. The increase resulted primarily
from net earnings of $219,000 coupled with amortization of stock benefit plans,
which were partially offset by repurchases of 12,350 shares of treasury stock at
an aggregate price of $102,000 and dividend payments on common stock totaling
$83,000.
The Association is required to meet minimum capital standards promulgated by the
Office of Thrift Supervision (OTS). At September 30, 2000, the Association's
capital was well in excess of such minimum capital requirements.
Comparison of Operating Results for the Three Month Periods Ended September 30,
2000 and 1999
General
The Corporation's net earnings totaled $219,000 for the three months ended
September 30, 2000, a decrease of $33,000, or 13.1%, from the $252,000 of net
earnings reported for the same period in 1999. The decrease in earnings resulted
primarily from a $24,000 increase in the provision for losses on loans, a
$15,000 decrease in other income and a $28,000 increase in general,
administrative and other expense, which were partially offset by a $19,000
increase in net interest income and a $15,000 decrease in the provision for
federal income taxes.
Net Interest Income
Net interest income increased by $19,000, or 2.2%, for the three months ended
September 30, 2000, compared to the 1999 period. Interest income on loans
increased by $136,000, or 7.8%, due primarily to a $1.5 million increase in the
average net portfolio balance of loans outstanding year-to-year, coupled with a
45 basis point increase in the average yield. Interest income on investment and
mortgage-backed securities and interest-bearing deposits increased by $7,000, or
2.1%, as a $1.6 million decrease in the average portfolio balance outstanding
was offset by a increase in the average yield.
11
<PAGE>
Community Investors Bancorp, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three Month Periods Ended September 30,
2000 and 1999
Net Interest Income (continued)
Interest expense on deposits increased by $13,000, or 1.5%, due primarily to an
increase in the cost of deposits year-to-year, which was partially offset by a
$593,000 decrease in the average balance of deposits outstanding. Interest
expense on borrowings increased by $111,000, or 32.3%, due primarily to a $2.9
million increase in the weighted-average balance of advances from the Federal
Home Loan Bank outstanding.
As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $19,000, or 2.2%, to a total of $872,000 for
the three months ended September 30, 2000. The interest rate spread amounted to
approximately 2.70% in the 2000 three month period, as compared to 2.57% during
the 1999 period, while the net interest margin totaled approximately 3.02% in
2000, as compared to 2.96% in 1999.
Provision for Losses on Loans
A provision for losses on loans is charged to earnings to bring the total
allowance for loan losses to a level considered appropriate by management based
on historical experience, the volume and type of lending conducted by the
Association, the status of past due principal and interest payments, general
economic conditions, particularly as such conditions relate to the Association's
market area, and other factors related to the collectibility of the
Association's loan portfolio. As a result of such analysis, management recorded
a $46,000 provision for losses on loans during the three month period ended
September 30, 2000, an increase of $24,000 from the comparable 1999 period. The
current period provision reflects the growth in the loan portfolio integrated
with an overall increase in nonperforming loans, which consists substantially of
one- to four-family residential mortgage loans that management deems to have
adequate levels of collateralization. There can be no assurance that the loan
loss allowance of the Association will be adequate to cover losses on
nonperforming assets in the future.
Other Income
Other income decreased by $15,000 for the three months ended September 30, 2000,
compared to the same period in 1999, due primarily to a $16,000 loss on the sale
of repossessed assets. Exclusive of this loss, the Corporation's other income
would have increased by $3,000, primarily due to increased service fees on
deposit accounts and transactions.
12
<PAGE>
Community Investors Bancorp, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three Month Periods Ended September 30,
2000 and 1999 (continued)
General, Administrative and Other Expense
General, administrative and other expense increased by $28,000, or 5.4%, during
the three months ended September 30, 2000, compared to the same period in 1999.
This increase resulted primarily from a $31,000, or 11.5%, increase in employee
compensation and benefits and a $6,000, or 10.2%, increase in data processing
expense, which was partially offset by an $8,000, or 66.7%, decrease in federal
deposit insurance premiums. The increase in employee compensation and benefits
was due to normal merit increases and a reduction in deferred loan origination
costs attendant to the decline in lending volume year to year. The increase in
data processing expense resulted primarily from an increase in item processing
transaction levels, coupled with increased costs attendant computer system
upgrades. The decrease in federal deposit insurance premiums reflects the lower
premium rates in fiscal 2000.
Federal Income Taxes
The provision for federal income taxes decreased by $15,000, or 11.9%, during
the three months ended September 30, 2000, as compared to the same period in
1999. Net earnings before income taxes decreased by $48,000, or 12.7%, compared
to the three months ended September 30, 1999. The effective tax rates were 33.6%
and 33.3% for the three months ended September 30, 2000 and 1999, respectively.
13
<PAGE>
Community Investors Bancorp, Inc.
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities and Use of Proceeds
Not applicable
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
On October 23, 2000, the Annual Meeting of the Corporation's
Shareholders was held. Each of the four directors nominated were
elected, for a two-year term and until their successors are elected
and qualified, by the following votes:
John W. Kennedy For: 860,365 Withheld: 135,875
David M. Auck For: 860,365 Withheld: 135,875
Philip E. Harris For: 858,240 Withheld: 138,000
John D. Mizick For: 856,090 Withheld: 140,150
One other matter was submitted to the shareholders, for which the
following votes were cast:
Ratification of the appointment of Grant Thornton LLP as independent
auditors of the Corporation for the fiscal year ended June 30, 2001.
For: 975,198 Against: 13,900 Abstain: 7,142
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: None.
Exhibits
15: Independent Accountants' Report
27: Financial Data Schedule for the three
months ended September 30, 2000.
14
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Community Investors Bancorp, Inc.
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.
Date: November 14, 2000 By: /s/John W. Kennedy
-------------------------- ---------------------------
John W. Kennedy
President and Chief
Executive Officer
Date: November 14, 2000 By: /s/Robert W. Siegel
-------------------------- ---------------------------
Robert W. Siegel
Assistant Vice President
Controller and Treasurer
15
