UNITED STATES
SECURITY AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
or
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period
from_____________________to________________________
Commission File Number: 0-24896
Home Building Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Indiana
(State or other jurisdiction of incorporation or organization)
35-1935840
(I.R.S. Employer identification No.)
200 East VanTrees Street, Washington, Indiana 47501
(Address of principal executive offices) (Zip Code)
(812) 254-2641
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the 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 shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing for the past 90 days.
{X}Yes { } No
As of August 13, 1998 there were 331,660 shares of the Registrant's common
stock issued and outstanding.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Transitional Small Business Disclosure Format:
{ } Yes {X} No
<PAGE>
HOME BUILDING BANCORP, INC.
INDEX
Part I. Financial Information Page
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition at June 30, 1998 1
and September 30, 1997
Consolidated Statements of Income for the Three and Nine Months
Ended June 30, 1998 and 1997 2
Consolidated Statements of Cash Flows for the Nine Months Ended
June 30, 1998 and 1997 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Part II. Other Information 12
Signatures 13
Index of Exhibits 14
<PAGE>
<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Washington, Indiana
Consolidated Statements of Financial Condition
(Unaudited)
June 30, Sept. 30,
1998 1997
ASSETS
<S> <C> <C>
Cash and due from banks $ 1,243,321 $ 1,494,118
Interest-bearing deposits with banks 2,343,631 2,521,578
Securities available-for-sale 6,313,983 7,483,447
Securities held-to-maturity, fair market value of
$265,000 at June 30, and $349,000 at Sept. 30 261,994 344,257
Loans receivable, net of allowance for loan losses of
$84,000 at June 30, and $81,000 at Sept. 30 33,149,400 28,582,610
Insurance receivable 238,494 240,444
Accrued interest receivable 223,236 210,256
Premises and equipment 764,933 783,967
Other assets 123,221 89,075
Total assets $ 44,662,213 $ 41,749,752
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Savings and NOW deposits $ 11,123,902 $ 10,880,043
Other time deposits 20,519,642 20,637,490
Total deposits 31,643,544 31,517,533
Advances from Federal Home Loan Bank 6,500,341 4,000,341
Accrued expenses and other liabilities 373,593 338,947
Total liabilities 38,517,478 35,856,821
Shareholders' equity:
Common stock, $.01 par value, 1 million
shares authorized, 331,660 issued and
outstanding 3,317 3,317
Additional paid-in capital 3,079,655 3,046,415
Treasury stock, at cost (345,000) (345,000)
Retained earnings 3,609,887 3,449,876
Net unrealized gain on available-for-sale securities,
net of deferred tax of $17,005 at June 30, and
$8,451 at Sept. 30 25,509 12,606
Unearned ESOP & recognition and retention shares (228,633) (274,283)
Total shareholders' equity 6,144,735 5,892,931
Total liabilities and shareholders' equity $ 44,662,213 $ 41,749,752
<FN>
See notes to consolidated financial statements.
</TABLE>
- -1-
<PAGE>
<TABLE>
<CAPTION>
Home Building Bancorp., Inc.
Washington, Indiana
Consolidated Statements of Income
(Unaudited)
Three months ended Nine months ended
June 30, June 30,
1998 1997 1998 1997
Interest income:
<S> <C> <C> <C> <C>
Loans receivable $ 644,989 $ 599,583 $ 1,880,978 $ 1,795,274
Investments 40,605 44,751 144,483 119,176
Mortgage-backed securities 75,341 98,776 229,456 307,637
Deposits with other banks 53,940 103,092 183,082 274,071
Total interest income 814,875 846,202 2,437,999 2,496,158
Interest expense:
Deposits 378,178 412,239 1,131,503 1,225,601
Other borrowed funds 87,769 52,727 211,992 161,366
Total interest expense 465,917 464,966 1,343,495 1,386,967
Net interest income 348,958 381,236 1,094,504 1,109,191
Provision for loan losses 10,000 5,000 17,000 5,000
Net interest income after provision
for loan losses 338,958 376,236 1,077,504 1,104,191
Noninterest income:
Gain on sale of assets 126 9,231 17,238 12,684
Customer service fees 65,298 26,508 135,810 85,423
Total other income 65,424 35,739 153,048 98,107
Noninterest expenses:
Salaries and employee benefits 163,643 125,455 460,446 386,778
Occupancy and equipment 36,432 37,807 107,062 111,952
Deposit insurance premium 5,526 4,997 16,233 26,389
Computer expense 13,059 12,352 40,953 41,529
Service fees 12,870 12,617 40,578 37,154
Advertising expense 13,938 14,206 43,220 40,321
Professional fees 17,714 10,844 56,079 36,882
Other expense 36,966 50,697 118,862 117,620
Total other expenses 300,148 268,975 883,433 798,625
Income before income taxes 104,234 143,000 347,119 403,673
Income tax expense 27,254 55,963 116,984 153,446
Net income $ 76,980 $ 87,037 $ 230,135 $ 250,227
Basic earnings per share of
common stock $ 0.26 $ 0.30 $ 0.79 $ 0.88
Weighted average shares outstanding 291,367 285,973 290,173 284,406
Diluted earnings per share of
common stock $ 0.26 $ 0.30 $ 0.78 $ 0.86
Diluted weighted average shares
outstanding 296,381 291,041 295,187 289,474
<FN>
See notes to consolidated financial statements.
</TABLE>
- -2-
<PAGE>
<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Washington, Indiana
Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended June 30,
1998 1997
Cash flows from operating activities:
<S> <C> <C>
Net income $ 230,135 $ 250,227
Adjustments to reconcile net income to net cash
provided by (used by) operating activities:
Depreciation and amortization 29,594 30,474
Non cash compensation 78,890 -
Other gains and losses, net (9,929) -
Net realized gains on
available-for-sale securities (7,309) (10,989)
Decrease in insurance receivable 1,950 -
Increase in accrued interest receivable (12,980) (10,692)
Increase (decrease) in accrued expenses
and other liabilities 26,092 (5,444)
(Increase) decrease in other assets (24,217) 54,636
Provision for loan loss 17,000 5,000
Total adjustments 99,091 62,985
Net cash provided by operating activities 329,226 313,212
Cash flows from investing activities:
Net increase (decrease) in interest-bearing
deposits with banks 177,947 (2,912,409)
Purchases of available-for-sale securities (957,647) (2,283,616)
Proceeds from maturities of available-for-sale
securities 1,897,224 907,933
Proceeds from sales of available-for-sale
securities 258,653 1,784,918
Proceed from maturities of held-to-maturity
securities 82,263 95,280
Net increase in loans (4,583,790) (125,556)
Net purchases of premises and equipment (10,560) (26,723)
Net cash used in investing activities (3,135,910) (2,560,173)
Cash flows from financing activities:
Net increase in savings and NOW deposit accounts 243,859 2,555,993
Net increase (decrease) in time deposits (117,848) 28,261
Net decrease in securities sold under agreements
to repurchase - (273,951)
Proceeds from Federal Home Loan Bank advances 2,500,000 -
Dividends paid (70,124) (71,626)
Net cash provided by financing activities 2,555,887 2,238,677
Net decrease in cash and due from banks (250,797) (8,284)
Cash and due from banks at beginning of period 1,494,118 1,428,754
Cash and due from banks at end of period $ 1,243,321 $ 1,420,470
Cash paid for:
Interest $ 1,330,072 $ 1,387,411
Income taxes $ 180,831 $ -
<FN>
See notes to consolidated financial statements.
</TABLE>
- -3-
<PAGE>
Home Building Bancorp, Inc.
Notes to Consolidated Financial Statements
June 30, 1998 and 1997
Note 1: Basis of Presentation
The unaudited information for the three and nine months ended June 30,
1998 and June 30, 1997, includes the results of operations of Home
Building Bancorp, Inc. (the "Company") and its wholly owned subsidiary,
Home Building Savings Bank, FSB (the "Bank"). In the opinion of
management of the Company, the financial statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the consolidated financial statements. These interim financial
statements should be read in conjunction with the Company's most recent
annual financial statements and footnotes included in the annual report of
Home Building Bancorp, Inc. dated September 30, 1997. The results of the
period presented are not necessarily representative of the results of
operations and cash flows which may be expected for the entire year.
Note 2: Principles of Consolidation
The consolidated financial statements include the accounts of Home
Building Bancorp, Inc., Home Building Savings Bank, FSB, and the Bank's
subsidiary. All significant inter-company balances and transactions have
been eliminated in consolidation.
Note 3: Stock Conversion
On February 7, 1995, Home Building Bancorp, Inc. began trading as a
public company on the Nasdaq SmallCap Market. The Company issued
322,000 shares, $.01 par value common stock, for proceeds of $2,858,862
net expenses of approximately $361,000. The Bank converted to a federal
stock savings bank following the formation of the holding company and
received proceeds of $1,432,853 in exchange for all its common stock. This
transaction was accounted for using historical cost in a manner similar to
that in a pooling of interests. In February 1998, the Corporation's stock
listing was moved from the NASDAQ SmallCap Market to the "pink
sheets" published by the National Quotations Bureau, Inc.
Note 4: Earnings Per Common Share
Basic earnings of $0.26 per common share for the three-month period and
$0.79 for the nine-month period ended June 30, 1998, were computed by
dividing net income by the weighted average number of shares outstanding
during the quarter, less Employee Stock Ownership Plan ("ESOP") shares
and Recognition and Retention Plan ("RRP") shares not committed to be
released. The weighted average number of shares outstanding for the
periods was 291,367 and 290,173, respectively. Diluted earnings per share
is consistent with that of basic earnings per share while giving effect to all
dilutive potential common shares that were outstanding during the period.
Earnings, assuming dilution, for the most recent three-month period were
$0.26 per share and $0.78 for the nine-month period ended June 30, 1998.
A reconciliation of both numerators and denominators of the per share
calculations follows:
- -4-
<PAGE>
Home Building Savings Bank, FSB
Notes to Consolidated Financial Statements
June, 1998 and 1997
Note 4: Earnings Per Common Share, continued
Income Shares Per-Share
(Numerator) (Denominator) Amount
For the Three Months Ended June 30, 1998
Basic EPS,
Income available to common shareholders $76,980 291,367 $0.26
Effect of dilutive securities:
Incentive stock option plan shares 5,014
Diluted EPS
Income available to common shareholders+
assumed conversions $76,980 296,381 $0.26
For the Nine Months Ended June 30, 1998
Basic EPS,
Income available to common shareholders $230,135 290,173 $0.79
Effect of dilutive securities:
Incentive stock option plan shares 5,014
Diluted EPS
Income available to common shareholders+
assumed conversions $230,135 295,187 $0.78
For the Three Months Ended June 30, 1997
Basic EPS,
Income available to common shareholders $87,037 285,973 $0.30
Effect of dilutive securities:
Incentive stock option plan shares 5,068
Diluted EPS
Income available to common shareholders+
assumed conversions $87,037 291,041 $0.30
For the Nine Months Ended June 30, 1997
Basic EPS,
Income available to common shareholders $250,227 284,406 $0.88
Effect of dilutive securities:
Incentive stock option plan shares 5,068
Diluted EPS
Income available to common shareholders+
assumed conversions $250,227 289,474 $0.86
- -5-
<PAGE>
Home Building Savings Bank, FSB
Notes to Consolidated Financial Statements
June 30, 1998 and 1997
(Continued)
Note 5: Allowance for Loan Losses and Loan Loss Provision
Activity in the allowance for loan losses was as follows:
For the nine months ended June 30,
1998 1997
Beginning $ 81,000 $ 77,039
Provision 17,000 -
Charge-offs (15,000) -
Recoveries 1,000 -
Ending $ 84,000 $ 77,039
Note 6: Comprehensive Income
In June of 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. This statement requires classification of items of
other compressive income by their nature in the financial statements and
display of the accumulated balance of other comprehensive income separately
from retained earnings and additional paid in capital in the equity section
of the statement of financial position. This statement is effective for
fiscal years beginning after December 15, 1997, and the Company will
implement this for its year ending September 30, 1999. However, the
following table reflects the impact of FASB No. 130 had the new pronouncement
been implemented at June 30, 1998.
<TABLE>
<CAPTION>
Consolidated Statements of Comprehensive Income
(Unaudited)
Three months ended Nine months ended
June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $ 76,980 $ 87,037 $ 230,135 $ 250,227
Other comprehensive income,
net of income tax:
Unrealized holding gains and (losses) 3,903 15,833 12,903 19,694
Comprehensive income $ 80,883 $ 102,870 $ 243,038 $ 269,921
Comprehensive income per weighted
average share of common stock $ 0.28 $ 0.36 $ 0.84 $ 0.95
Weighted average shares outstanding 291,367 285,973 290,173 284,406
Comprehensive income per diluted
weighted average share of
common stock $ 0.27 $ 0.35 $ 0.82 $ 0.93
Diluted weighted average shares
outstanding 296,381 291,041 295,187 289,474
</TABLE>
- -6-
<PAGE>
Home Building Savings Bank, FSB
Notes to Consolidated Financial Statements
June 30, 1998 and 1997
(Concluded)
Note 7: Contingencies
Due to employee theft that was discovered during the year ended September
30, 1997, the Corporation has recorded an insurance receivable for
$238,494 at June 30, 1998. In the insurance company's initial review of the
claim, the total amount recoverable has not been determined. In the opinion
of management, after consultation with legal counsel, the ultimate
disposition of the claim is not expected to have a material adverse effect on
the consolidated financial position of the Corporation.
- -7-
<PAGE>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
Home Building Bancorp, Inc. (the "Company") was formed at the direction
of Home Building Savings Bank, FSB (the "Bank"), for the purpose of
owning all the stock outstanding in the Bank. The Company incorporated
under the laws of the State of Indiana and is generally authorized to engage
in any activity permitted under Indiana law. On February 7, 1995, the
Company acquired all the stock of the Bank in accordance with the
approved plan of conversion. The Company had not engaged in any
material operations at June 30, 1998, and had no significant assets other
than its equity investment in the Bank's stock, cash, investments, and a loan
to the Bank's Employee Stock Ownership Plan ("ESOP").
Established in 1908, Home Building Savings Bank, FSB is a community
oriented financial institution offering a variety of financial services to meet
the needs of the communities it serves. The Bank's primary market area
covers Daviess and Pike counties in southwestern Indiana. The Bank
attracts deposits from the general public and uses such deposits, together
with borrowings and other funds, to originate one-to-four family residential
mortgage loans, automobile and other consumer loans, and to a lesser extent
commercial, multifamily and construction real estate loans. The Bank also
invests in United States government and agency obligations and may invest
in other permissible investments.
The Bank's results of operations are primarily dependent upon its net
interest income, which is the difference between interest earned on loans
and investments and interest paid on deposits and borrowed funds. Net
interest income is directly affected by the relative amounts of interest-
earning assets and interest-bearing liabilities and the interest rates earned
or paid on such amounts. The Bank's results of operations are also affected by
the provision for loan losses and the level of noninterest income and
expenses. The operating results of the Bank are also affected by general
economic conditions, the monetary and fiscal policies of federal agencies,
and the policies of agencies that regulate financial institutions. The Bank's
cost of funds is influenced by interest rates on competing investments and
general market rates of interest. Lending activities are influenced by the
demand for real estate loans and other types of loans, which in turn is
affected by the rates of interest at which loans are offered, general economic
conditions affecting loan demand, and the availability of funds for lending
activities.
Financial Condition
For the nine months ended June 30, 1998, total assets increased
approximately $3.0 million to $44.7 million from $41.7 million at
September 30, 1997. This increase in total assets was the result of a $4.6
million increase in net loans receivable to $33.1 million at June 30, 1998
from $28.5 million at September 30, 1997. Net loans receivable increased
as a result of the Bank's purchase of $2.5 million in adjustable-rate,
residential first mortgage loans. The purchase was funded by a $2.5 million
advance from the Federal Home Loan Bank. The remaining increase in net
loans receivable was funded primarily by a $1.3 million decrease in the
Bank's investment and mortgage-backed securities portfolios, as such
securities matured, were prepaid, or called, and a $429,000 decrease in cash
and interest-bearing deposits.
Liabilities increased by approximately $2.6 million, to $38.5 million at June
30, 1998 from $35.9 million at September 30, 1997, primarily as a result of
the $2.5 million FHLB advance discussed above. Savings and NOW
deposits increased by approximately $244,000, and time deposits decreased
by approximately $118,000 in the nine-month period. The Bank has
maintained steady deposit rates that are competitive for its marketplace and
has been successful in retaining and slightly increasing deposits since
September 30, 1997. However, competition for deposits in the Bank's
market area is strong and therefore no assurances can be made that the
Bank will be successful in increasing or retaining its deposits in the future.
- -8-
<PAGE>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Results of Operations:
Comparison of the three and nine months ended June 30, 1998 and 1997.
General. The Company experienced a net profit of $77,000 for the three
months and $230,000 for the nine months ended June 30, 1998,
respectively, compared to net profits of $87,000 and $250,000 for the same
periods in 1997.
Interest Income. Total interest income decreased $31,000, or 3.7%, to
$815,000 for the three months ended June 30, 1998, compared to the same
period last year. Interest income earned by the Company's loan portfolio
increased $45,000 for the three months ended June 30, 1998 compared to a
year ago due to higher loan volume, which was primarily the result of loans
purchased by the Company. Lower balances of mortgage-backed securities
and deposits with other banks reduced interest from these sources by a total
of $73,000 for the most recent quarter compared to the same quarter a year
ago. During this quarter last year the Company benefited from large short-
term deposits which were in turn deposited by the Bank at positive spreads.
These deposits were withdrawn later in fiscal year 1997. For the nine-
month period interest income decreased $58,000, or 2.3%, to $2,438,000
compared to $2,496,000 during the first nine months of fiscal year 1997.
Interest Expense. Total interest expense decreased $1,000, or .21%, during
the most recent quarter compared to the same quarter a year ago. Interest on
deposits decreased because the volume of savings was less compared to a
year ago. Interest paid on borrowed funds increased as additional funds
were borrowed from FHLB. The weighted average cost of savings at June
30, 1998 was 4.57%, unchanged from December 31, 1997. The overall cost
of funds, including all FHLB advances, was 4.75% at June 30, 1998
compared to 4.69% at December 31, 1997. The small increase reflects the
rates paid on the additional advances taken during the previous quarter. The
Company is able to compete aggressively for savings funds when adequate
spreads on loans or investments are available. FHLB advances have been an
effective asset-liability management tool.
Net Interest Income. Net interest income, before provision for loan losses,
decreased $32,000, or 8.4%, to $349,000 for the quarter compared to the
same quarter a year ago. As of June 30, 1998, interest-earning assets were
110.6% of interest bearing liabilities.
Demand for mortgage loans was very strong during the nine-month period.
Net loans receivable increased $4.6 million to $33.1 million at June 30,
1998 compared to $28.5 million at September 30, 1997. Two packages of
single family, adjustable rate mortgages loans were purchased during the
previous quarter, totaling $2.5 million. Local loan volume grew a net $2.1
million for the nine-month period as well. Securities held for sale decreased
$1.2 million in the nine-month period to $6.3 million at June 30, 1998 from
$7.5 million at September 30, 1997.
Savings and NOW deposits increased during the nine-month period by
$244,000, to $11.1 million from $10.9 million. The Bank increased its
advances from the FHLB by $2.5 million during the most recent quarter, to
$6.5 million at June 30, 1998, to fund the purchase of the mortgage loan
packages. Management feels these advances were a cost effective
alternative to raising funds from local depositors, and allowed funding to be
more efficiently matched with the interest rate characteristics of the loans.
Significant increases in short term interest rates would adversely affect the
Company's interest rate spread and thus interest income. In the case of
some short-term funds, such as short-term public funds, the Company could
decline to bid and allow them to be withdrawn if acceptable spreads are not
available. The Company's liabilities are generally shorter in term and
subject to repricing more frequently than assets.
- -9-
<PAGE>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Net Interest Income, (continued). The Company continues to stress
consumer and installment lending, shorter-term (15 years and under) fixed
rate mortgage loans, and adjustable rate mortgages. Investments involve
shorter-term and adjustable securities to respond to changing rates. The
Company, as a thrift institution, continues to have a below average exposure
to interest rate risk compared to its peers.
Nonperforming Assets and Provision for Loan Losses. The provision for
loan losses is a result of management's periodic analysis of the adequacy of
the Company's allowance for loan losses. During the three-month period
ended June 30, 1998 an additional provision of $10,000 was taken against
earnings. The Company adjusts its allowance in accordance with its
Classified Assets Policy. The Company believes it has taken an appropriate
approach toward reserve levels, consistent with the Company's loan
portfolio, its current level of reserves, the economy, real estate values and
interest rates. The Company has had an extremely low level of loan losses
during its history and therefore also considers the loss experience of similar
portfolios in comparable lending markets. Federal regulators may require
additional reserves as a result of their examinations of the Company, but
have not done so. Accordingly, the calculation of the adequacy of the
allowance is not solely based directly on the level of nonperforming assets
at any one time. No assurance can be made that future losses will not
exceed the estimated amounts, thereby adversely affecting future results of
operations. As of June 30, 1998 the Company's allowance for loan losses
was $84,000 compared to $81,000 on September 30, 1997. Over the nine-
month period $14,000 in net losses were recognized and $17,000 in
additions were made to the loan loss reserve.
As of June 30,1998, the Company's nonperforming assets totaled $134,000,
or .30% of total assets. At the same date, the Company's ratio of allowance
for loan losses to nonperforming assets was 62.6%.
Noninterest Income. Noninterest income increased $29,000, or 80.6%, to
$65,000 for the most recent quarter compared to the same quarter a year
ago. For the nine-month period noninterest income increased $55,000, or
56.1%, to $153,000 for the period. During the nine month period $17,000
in gains on the sale of assets were realized, compared to $13,000 during the
same nine month period a year ago. The Company does not depend on the
regular or periodic sale of assets for income, but some investment securities
were called at profit to the Bank. Customer service fees increased $51,000,
or 60.0%, to $136,000 for the nine month period ended June 30, 1998
compared to $85,000 for the same period a year ago. The increase was
attributable to improved service corporation results and increased customer
transaction fees.
Noninterest Expense. Total noninterest expense increased $31,000, or
11.5%, to $300,000 for the latest quarter compared to $269,000 for the
same quarter a year ago. The increases were due to salary and benefit
expense and professional fees. For the nine months noninterest expense
increased $84,000, to $883,000 compared to $799,000 for the same period
a year ago. The increase was due to salaries and employee benefits,
professional fees, and other expense. Compared to the same period a year
ago the Bank has added the equivalent of 1 1/2 full time employees.
Income Tax Expense. Income tax expense was $27,000 for the most recent
quarter compared to $56,000 for the same quarter a year ago. For the nine
months ended June 30, 1998, tax expense was $117,000 compared to
$153,000. Tax expense reflects the level of profitability for the respective
periods.
Liquidity and Capital Requirements. Home Building's main sources of
funds are deposits, loan and investment repayments, fees and service
charges, and Federal Home Loan Bank (FHLB) advances. Federal
regulations require the Bank to maintain cash and eligible investments at
levels that assure its ability to meet demands for withdrawals and
repayments of short-term borrowings. As of June 30, 1998, the Bank had
cash and due from banks, deposits, and securities available for sale with an
estimated approximate market value of $9.9 million, or 22.2% of total
assets.
- -10-
<PAGE>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of operations
(concluded)
Liquidity and Capital Requirements (continued). The Bank uses its capital
resources to meet ongoing commitments, to fund maturing certificates of
deposit and deposit withdrawals, to invest, to fund existing and future loan
commitments, to maintain liquidity, and to meet operating expenses. The
Bank anticipates it will have sufficient funds to meet current loan
commitments. At June 30, 1998, the Bank had outstanding commitments to
extend credit totaling $ 1.2 million. Management believes loan repayments,
deposits, and other sources of funds will be adequate to meet the Bank's
foreseeable liquidity needs. FHLB advances may be used to take advantage
of investment opportunities, or as an alternative source of liquid funds, but
are not relied upon in the regular course of business.
Home Building Savings Bank is required to maintain specific amounts of
regulatory capital pursuant to federal regulations. The table below presents
the capital position at June 30, 1998, relative to the regulatory capital
requirements.
Amount
(in thousands) Percent of Assets
Tangible Capital $ 4,643 10.45%
Tangible Capital Requirement 667 1.50%
Excess 3,976 8.95%
Core Capital $ 4,643 10.45%
Core Capital Requirement 1,333 3.00%
Excess 3,310 7.45%
Total Capital (Core & Supple.) $ 4,727 20.20%
Risk-Based Capital Requirement 1,872 8.00%
Excess 2,855 12.20%
- -11-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule (electronic filing only)
(b) There were no reports on Form 8-K filed during the quarter.
- -12-
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
HOME BUILDING BANCORP, INC.
Registrant
Date: 8/13/98 /s/ Bruce A. Beesley
Bruce A. Beesley, President and
Chief Executive Officer (Duly
Authorized Officer)
Date: 8/13/98 /s/ Debra K. Shields
Debra K. Shields, Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
- -13-
<PAGE>
INDEX OF EXHIBITS
Exhibit Description
27 Financial Data Schedule (electronic filing only)
- -14-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS DATED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 1243321
<INT-BEARING-DEPOSITS> 2343631
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6313983
<INVESTMENTS-CARRYING> 261994
<INVESTMENTS-MARKET> 265000
<LOANS> 33149400
<ALLOWANCE> 84000
<TOTAL-ASSETS> 44662213
<DEPOSITS> 31643544
<SHORT-TERM> 0
<LIABILITIES-OTHER> 373593
<LONG-TERM> 6500341
0
0
<COMMON> 3317
<OTHER-SE> 6141418
<TOTAL-LIABILITIES-AND-EQUITY> 44662213
<INTEREST-LOAN> 1880978
<INTEREST-INVEST> 373939
<INTEREST-OTHER> 183082
<INTEREST-TOTAL> 2437999
<INTEREST-DEPOSIT> 1131503
<INTEREST-EXPENSE> 211992
<INTEREST-INCOME-NET> 1094504
<LOAN-LOSSES> 17000
<SECURITIES-GAINS> 7309
<EXPENSE-OTHER> 883433
<INCOME-PRETAX> 347119
<INCOME-PRE-EXTRAORDINARY> 347119
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 230135
<EPS-PRIMARY> .79
<EPS-DILUTED> .78
<YIELD-ACTUAL> .06
<LOANS-NON> 135000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 81000
<CHARGE-OFFS> 15000
<RECOVERIES> 1000
<ALLOWANCE-CLOSE> 84000
<ALLOWANCE-DOMESTIC> 25500
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 58500
</TABLE>
