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 March 31, 2000
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding
- ------------------------------------ ----------------------------
Common Stock 296,660 as of April 28, 2000
Transitional Small Business Disclosure Format (check one):
{ } Yes {X} No
<PAGE>
<TABLE>
<CAPTION>
HOME BUILDING BANCORP, INC.
INDEX
Part I. Financial Information Page
<S> <C>
Item 1. Financial Statements
Consolidated Statements of Financial Condition at March 31, 2000 1
and September 30, 1999
Consolidated Statements of Income for the three and six months
ended March 31, 2000 and 1999 2
Consolidated Statements of Comprehensive Income for the three
and six months ended March 31, 2000 and 1999 3
Consolidated Statements of Cash Flows for the six months ended
March 31, 2000 and 1999 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition 8
and Results of Operations
Part II. Other Information 13
Signatures 14
Index of Exhibits 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Washington, Indiana
Consolidated Statements of Financial Condition
March 31, Sept. 30,
ASSETS 2000 1999
------ ------------- ----------------
<S> <C> <C>
Cash and due from banks $ 1,525,869 $ 1,247,958
Interest-bearing deposits with banks 2,709,142 4,760,057
Securities available for sale 4,357,620 4,634,094
Securities held to maturity, fair market value of $93,050
at March 31, and $129,697 at Sept. 30 93,788 129,362
Loans receivable, net of allowance for loan losses of
$88,101 at March 31, and $86,288 at Sept. 30 35,970,457 36,842,618
Accrued interest receivable 223,539 251,030
Insurance receivable 352,044 -
Premises and equipment 734,253 744,516
Other assets 209,720 277,436
------------- --------------
Total assets $ 46,176,432 $ 48,887,071
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Savings and NOW deposits $ 10,932,772 $ 11,190,073
Other time deposits 22,998,439 24,398,525
------------- --------------
Total deposits 33,931,211 35,588,598
------------- --------------
Advances from Federal Home Loan Bank 5,677,863 6,677,863
Accrued expenses and other liabilities 318,430 459,888
------------- --------------
Total liabilities 39,927,504 42,726,349
------------- --------------
Shareholders' equity:
Common stock, $.01 par value, 1 million shares authorized,
331,660 issued 3,317 3,317
Additional paid-in capital 3,097,637 3,098,774
Treasury stock, 35,000 shares at cost (605,000) (605,000)
Retained earnings 3,940,587 3,855,608
Accumulated other comprehensive income (62,543) (37,946)
Unearned ESOP & recognition and retention shares (125,070) (154,031)
-------------- ---------------
Total shareholders' equity 6,248,928 6,160,722
------------- --------------
Total liabilities and shareholders' equity $ 46,176,432 $ 48,887,071
============= ==============
</TABLE>
See accompanying notes.
-1-
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<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Washington, Indiana
Consolidated Statements of Income
Three months ended Six months ended
March 31, March 31,
----------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $ 692,326 $ 681,275 $ 1,420,792 $ 1,338,814
Investments 32,991 27,191 66,321 54,616
Mortgage-backed securities 43,095 54,595 87,112 113,378
Deposits with other banks 41,578 69,817 112,488 134,951
----------- ---------- ----------- -----------
Total interest income 809,990 832,878 1,686,713 1,641,759
----------- ---------- ----------- ----------
Interest expense:
Deposits 357,909 371,056 738,755 736,715
Other borrowed funds 78,927 85,473 165,860 172,718
----------- ---------- ----------- ----------
Total interest expense 436,836 456,529 904,615 909,433
----------- ---------- ----------- ----------
Net interest income 373,154 376,349 782,098 732,326
Provision for loan losses - 10,000 3,500 15,000
----------- ---------- ----------- ----------
Net interest income after provision for loan losses 373,154 366,349 778,598 717,326
----------- ---------- ----------- ----------
Noninterest income:
Gain on sale of assets 13 4,657 31 10,384
Customer service fees 27,683 41,142 53,785 89,383
----------- ----------- ----------- ----------
Total other income 27,696 45,799 53,816 99,767
----------- ----------- ----------- ----------
Noninterest expenses:
Salaries and employee benefits 158,693 154,491 327,525 310,436
Occupancy and equipment 34,628 36,539 73,205 72,434
Deposit insurance premium 1,913 5,056 7,220 9,779
Computer expense 16,225 19,827 32,842 34,376
Service fees 14,344 16,688 29,855 31,501
Advertising expense 12,236 14,656 25,939 27,984
Professional fees 38,709 14,874 55,481 33,508
Other expense 34,307 34,064 73,792 61,064
----------- ----------- ----------- ----------
Total other expenses 311,055 296,195 625,859 581,082
----------- ----------- ----------- ----------
Income before income taxes 89,795 115,953 206,555 236,011
Income tax expense 32,201 34,040 77,077 74,889
----------- ----------- ----------- ----------
Net income $ 57,594 $ 81,913 $ 129,478 $ 161,122
=========== =========== =========== ==========
Basic earnings per share of common stock $ 0.20 $ 0.29 $ 0.46 $ 0.57
=========== =========== =========== ==========
Weighted average shares outstanding 284,476 279,954 283,915 283,147
=========== =========== =========== ==========
Diluted earnings per share of common stock $ 0.20 $ 0.29 $ 0.46 $ 0.57
=========== ========== =========== ==========
Diluted weighted average shares outstanding 284,476 279,954 283,915 283,333
=========== ========== =========== ==========
</TABLE>
See accompanying notes.
-2-
<PAGE>
<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Washington, Indiana
Consolidated Statements of Comprehensive Income
Three months ended Six months ended
March 31, March 31,
---------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income $ 57,594 $ 81,913 $ 129,478 $ 161,122
Other comprehensive income, net of income tax:
Unrealized holding gains and (losses) (9,661) (8,089) (24,597) (11,472)
---------- --------- --------- ---------
Comprehensive income $ 47,933 $ 73,824 $ 84,881 $ 149,650
========== ========= ========= =========
</TABLE>
See accompanying notes.
3
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<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Washington, Indiana
Consolidated Statements of Cash Flows
Six months ended March 31,
------------------------------------------
2000 1999
------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 129,478 $ 161,122
Adjustments to reconcile net income to net cash
provided by (used by) operating activities:
Depreciation and amortization 17,472 19,377
Non cash compensation 27,824 38,994
Other gains and losses, net - (10,384)
Net realized gains on available-for-sale securities - -
Change in accrued interest receivable 27,491 6,172
Change in accrued expenses and other liabilities (141,458) (95,391)
Change in other assets 73,401 (65,544)
Provision for loan losses 3,500 15,000
------------ ------------
Net cash provided by operating activities 137,708 69,346
------------ ------------
Cash flows from investing activities:
Net change in interest-bearing deposits with banks 2,050,915 (310,550)
Purchases of available for sale securities (96,513) (1,000,127)
Proceeds from maturities of available for sale securities 330,790 1,722,689
Proceeds from sales of available for sale securities - -
Proceed from maturities of held to maturity securities 35,574 50,984
Net increase in loans 528,531 (2,026,290)
Net purchases of premises and equipment (7,208) (6,277)
------------ ------------
Net cash used in investing activities 2,842,089 (1,569,571)
------------ ------------
Cash flows from financing activities:
Net change in deposits (1,657,387) 1,532,397
Purchase of 15,000 shares of treasury stock - (260,000)
Proceeds from Federal Home Loan Bank advances (1,000,000) -
Dividends paid (44,499) (44,499)
------------ ------------
Net cash provided by financing activities (2,701,886) 1,227,898
------------ ------------
Net increase in cash and due from banks 277,911 (272,327)
Cash and due from banks at beginning of period 1,247,958 1,366,761
------------ ------------
Cash and due from banks at end of period $ 1,525,869 $ 1,094,434
============ ============
Supplemental cash flow information:
Interest paid $ 936,093 $ 908,220
============ ============
Income taxes paid $ 110,187 $ 169,954
============ ============
</TABLE>
See accompanying notes.
-4-
<PAGE>
Home Building Bancorp, Inc.
Notes to Consolidated Financial Statements
March 31, 2000 and 1999
Note 1: Basis of Presentation
The consolidated financial statements include the accounts of Home Building
Bancorp, Inc. (the "Company"), Home Building Savings Bank, FSB (the "Bank"), and
the Bank's subsidiary. All significant inter-company balances and transactions
have been eliminated in consolidation. 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, 1999. 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: Earnings Per Common Share
Basic earnings of $0.20 per common share for the three month period and $0.46
for the six month period ended March 31, 2000, were computed by dividing net
income by the weighted average number of shares outstanding during the quarter,
less unearned Employee Stock Ownership Plan ("ESOP") and Recognition and
Retention Plan ("RRP") shares. Diluted earnings per share give effect to all
dilutive potential common shares that were outstanding during the period.
Earnings, assuming dilution, for the most recent three-month period were $0.20
per share and $0.46 for the six-month period ended March 31, 2000. A
reconciliation of both numerators and denominators of the per share calculations
follows:
<TABLE>
<CAPTION>
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
For the Three Months Ended March 31, 2000
Basic EPS,
Income available to common shareholders $ 57,594 284,476 $ 0.20
Effect of dilutive securities:
Incentive stock option plan shares -
Diluted EPS
Income available to common shareholders+
assumed conversions 57,594 284,476 0.20
For the Six Months Ended March 31, 2000
Basic EPS,
Income available to common shareholders 129,478 283,915 0.46
Effect of dilutive securities:
Incentive stock option plan shares -
Diluted EPS
Income available to common shareholders +
assumed conversions 129,478 283,915 0.46
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Notes to Consolidated Financial Statements
March 31, 2000 and 1999
Note 2: Earnings Per Common Share, continued
<S> <C> <C> <C>
For the Three Months Ended March 31, 1999
Basic EPS,
Income available to common shareholders 81,913 279,954 0.29
Effect of dilutive securities:
Incentive stock option plan shares -
Diluted EPS
Income available to common shareholders +
assumed conversions 81,913 279,954 0.29
For the Six Months Ended March 31, 1999
Basic EPS,
Income available to common shareholders 161,122 283,147 0.57
Effect of dilutive securities:
Incentive stock option plan shares 186
Diluted EPS
Income available to common shareholders +
assumed conversions 161,122 283,333 0.57
</TABLE>
Note 3: Allowance for Loan Losses and Loan Loss Provision
The allowance for loan losses increased $2,000 to $88,000 for the six-month
period ended March 31, 2000. Activity in the allowance for loan losses was as
follows:
For the six months ended March 31,
--------------------------------------
2000 1999
----------- -----------
Beginning $ 86,000 $ 92,000
Provision 3,500 15,000
Charge-offs (1,700) (18,900)
Recoveries 100 900
---------- ----------
Ending $ 88,000 $ 89,000
========== ==========
Note 4: Insurance Receivable
During December of 1999, management discovered an employee fraud involving
approximately $350,000 in fictitious loans on savings accounts. Of this amount,
$340,000, combined with various professional fees has been recorded as an
insurance receivable, because management believes the loss is covered by the
Company's fidelity bond. The difference of $10,000, representing the deductible
of the Bank's fidelity bond, was recorded as an other, noninterest expense.
Management, working with counsel, has submitted a claim to its bond carrier and
is awaiting their review.
-6-
<PAGE>
Home Building Bancorp, Inc.
Notes to Consolidated Financial Statements
March 31, 2000 and 1999
Note 4: Insurance Receivable, continued
The defalcation took place over a period of six years, but was not prevented or
detected earlier because it did not result in any cash shortages, accounting
imbalances, or from the usurpation of duties from other personnel. The Bank now
uses the same procedures for origination and accounting of loans on savings
accounts as on any other type of secured installment loan.
-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. At March 31, 2000, the
Company 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
consumer loans, and to a lesser extent commercial, multifamily and construction
real estate loans. The Bank also invests in US 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. General economic
conditions, the monetary and fiscal policies of federal agencies, and the
policies of agencies that regulate financial institutions also affect the
operating results of the Bank. Interest rates on competing investments and
general market rates of interest influence the Bank's cost of funds. The demand
for real estate loans and other types of loans influence lending activities,
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
During the six months ended March 31, 2000, total assets decreased approximately
$2.7 million to $46.2 million from $48.9 million at September 30, 1999. Cash and
due from banks increased $278,000, while interest-bearing deposits decreased
$2.1 million. Net loans receivable decreased $0.8 million, to $36.0 million on
March 31, 2000 from $36.8 million on September 30, 1999. The Company had $4.4
million in securities available for sale and only $94,000 in held to maturity at
March 31, 2000.
Total liabilities decreased by approximately $2.8 million during the six-month
period, to $39.9 million at March 31, 2000 from $42.7 million at September 30,
1999. Of the decrease, $1.0 million related to the payoff of a Federal Home Loan
Bank advance, while $1.7 million was reduction in deposit accounts, primarily
time deposits.
-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 six months ended March 31, 2000 and 1999.
General. The Company recorded a net profit of $58,000 for the quarter and
$129,000 for the six months ended March 31, 2000, compared to net profits of
$82,000 and $161,000 for the same periods in 1999. Results of operations for the
second quarter were impacted by lower noninterest income and higher noninterest
expense. Year to date, these same trends were apparent but net interest income
is up $50,000, year to date, and stable for the quarter. Lower noninterest
income from the Bank's investment services subsidiary and higher professional
fees, related to the employee fraud discovered in December 1999, were primary
drivers of these changes.
Interest Income. Total interest income decreased $23,000, or 2.8%, to $810,000
for the three months ended March 31, 2000, compared to the same period last
year. Interest income on loans increased $11,000 for the three months ended
March 31, 2000 compared to a year ago due to higher loan volumes. Lower volumes
of mortgage-backed securities and deposits with other banks reduced interest
from these sources by a total of $40,000 for the most recent quarter compared to
the same quarter a year ago. The sources of interest income reflect the changes
in the asset mix, with a higher proportion of assets in loans and less in
securities. For the six-month period interest income increased $45,000, or 2.7%,
to $1,687,000 compared to $1,642,000 during the first six months of fiscal year
1999.
Interest Expense. Total interest expense decreased $20,000, or 4.4%, to $437,000
for the most recent quarter compared to the same quarter a year ago. Interest on
deposits decreased slightly and interest expense on FHLB advances declined due
to the $1.0 million payment on funds borrowed.
The weighted average cost of deposits at March 31, 2000 was 4.2% compared to
4.3% at December 31, 1999. The overall cost of funds, including all FHLB
advances, was 4.4% on March 31, 2000 compared to 4.5% on December 31, 1999.
These numbers reflect the Bank's ability to keep deposit rates stable despite
rising interest rates during the quarter. The Bank is able to compete
aggressively for savings funds when adequate spreads on loans or investments are
available. FHLB advances have been an effective liability management tool in the
past as well.
Net Interest Income. Net interest income, before provision for loan losses,
decreased $3,000, or 0.8%, to $373,000 for the quarter compared to the same
quarter a year ago. For the six month period ended March 31, 2000, average
interest-earning assets were 108.5% of average interest bearing liabilities.
Local demand for mortgage loans has declined during the six-month period as
rates have increased. Net loans receivable decreased $0.9 million to $36.0
million at March 31, 2000 compared to $36.8 million at September 30, 1999.
-9-
<PAGE>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Net Interest Income, continued
Total deposits decreased during the six-month period by approximately $1.7
million to $33.9 million from $35.6 million. The Bank's advances from the FHLB
declined by $1.0 million due a scheduled maturity. Additionally, the Company
regularly bids on short-term funds, such as short-term public funds. At any time
the Company could decline to bid on such funds, 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.
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 exposure
to interest rate risk comparable to its peers. Based on the latest available OTS
Interest Rate Risk Exposure Report, the net present value of the Bank, as a
percent of assets in the +200bp scenario, would be 8.34%.
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 March
31, 2000 no additional provision was recorded and net charge-offs were only
$2,000 year to date. 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 March 31, 2000
the Company's allowance for loan losses was $88,000 compared to $86,000 on
September 30, 1999. Over the six-month period $1,700 in losses, net of
recoveries, were recognized and $3,500 in additions were made to the loan loss
reserve.
As of March 31,2000, the Company's nonperforming assets totaled $179,000, or
0.39% of total assets. At the same date, the Company's ratio of allowance for
loan losses to nonperforming assets was 49.2%.
Noninterest Income. Noninterest income decreased $18,000, or 39.5%, to $28,000
for the most recent quarter compared to the same quarter a year ago. For the
six-month period noninterest income decreased $46,000, or 46.1%, to $54,000 for
the period. During both the most recent quarter and year to date the gains from
sale of assets and customer service fees decreased compared to a year ago. The
Company does not depend on the regular or periodic sale of assets for income,
but during the quarter and the six-month period in the 1999 fiscal year, some
investment securities were called at profit to the Bank. Customer services fees
decreased $36,000, or 39.8%, to $54,000 for the six month period ended March 31,
2000 compared to $89,000 for the same period a year ago. Of this decline,
$31,000, 86.1%, resulted from lower fees from investment sales generated by the
Bank's investment advisory subsidiary.
-10-
<PAGE>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Noninterest Expense. Total noninterest expense increased $15,000, or 5.0%, to
$311,000 for the latest quarter compared to $296,000 for the same quarter a year
ago. The increases were due to salaries and benefits, professional fees, and
other expense. For the six months noninterest expense increased $45,000, to
$626,000 compared to $581,000 for the same period a year ago. The increase was
due to higher salaries and benefits, professional expenses and other expenses.
Compared to the same period a year ago the Bank has added a full time commercial
loan officer. In addition, during December 1999, management discovered an
employee fraud and the Company has incurred higher professional fees related to
this matter.
During April 2000, the Company entered into a separation and severance agreement
with its Chief Executive Officer. Pursuant to the terms of the agreement, he
will continue to receive salary and benefits for a period of time. In April
2000, the Company accrued and expensed approximately $104,000 related to this
agreement.
Income Tax Expense. Income tax expense was $32,201 for the most recent quarter
compared to $34,040 for the same quarter a year ago. For the six months ended
March 31, 2000, tax expense was $77,077 compared to $74,889 for the period a
year ago. 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 March 31, 2000,
the Bank had cash and due from banks, deposits, and securities available for
sale equal to 25.3% of total deposits and FHLB advances.
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 March 31, 2000, the Bank had outstanding
commitments to extend credit totaling $264,900. 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 March 31, 2000, relative to the regulatory capital
requirements.
-11-
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<TABLE>
<CAPTION>
Home Building Bancorp, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operation
(concluded)
Liquidity and Capital Requirements, continued
Amount
(in thousands) Percent of Assets
-------------- -----------------
<S> <C> <C>
Tier 1 Core Capital $ 4,909 10.72%
Core Capital Requirement $ 1,832 4.00%
Excess $ 3,077 6.72%
Total Capital $ 4,997 19.39%
Risk-Based Capital Requirement $ 2,062 8.00%
Excess $ 2,935 11.39%
</TABLE>
Year 2000
Home Building Savings Bank has not experienced any data processing or other
operational problems connected with the Year 2000 event. Moreover, management is
not aware of any significant operational problems among the Bank's correspondent
institutions, data processing providers, or others vendors, which would have an
effect on the Bank's operations. The Bank did not experience any noticeable
deposit withdrawals or other activity by Bank's customers that had any impact on
operations.
Forward-Looking Statements
When used in this Quarterly Report on Form 10-QSB or future filings by the
Company with the Securities and Exchange Commission, in the Company's press
releases or other public or shareholder communications, or in oral statements
made with the approval of an authorized executive officer, the words or phrases
"will likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project", "believe" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company wishes to caution readers not to
place undue reliance on any such forward-looking statements, which speak only as
of the date made, and to advise readers that various factors including regional
and national economic conditions, changes in levels of market interest rates,
credit risks of lending activities, and competitive and regulatory factors could
affect the Company's financial performance and could cause the Company's actua
results for future periods to differ materially from those anticipated or
projected.
The Company does not undertake and specifically disclaims any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) Annual meeting held January 18, 2000
(b) Continuing Directors
Bruce A. Beesley
C. Darrell Deem, DDS
Blake L. Chambers
Larry G. Wilson
Gregory L. Haag (elected at meeting)
Director Beesley subsequently resigned on April 7, 2000
(c) Results of annual meeting proposal
(1) Election of Directors
Name of Nominee For Withheld
Gregory L. Haag (3-year term) 206,432 5,228
James E. Scheid (3-year term) 206,432 5,228
(2) Proposal to ratify Kemper CPA Group, L.L.C. was not passed
at annual meeting due to failure to second the proposal.
(d) Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedules (electronic filing only)
(b) Report on Form 8-K was filed on January 21, 2000 describing a change
in the registrants' certifying accountant. A report amending the
previously described report on Form 8-K was filed on February 15,
2000. Another report on Form 8-K was filed on February 21, 2000
indicting that the registrant engaged Crowe Chizek and Company
L.L.P. as its independent accountant.
-13-
<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: 5/14/00 /s/ Debra K. Shields
------------------------------------
Debra K. Shields, Vice President
Date: 5/14/00 /s/ Tom Miles
------------------------------------
Tom Miles, Vice President
-14-
<PAGE>
INDEX OF EXHIBITS
Exhibit Description
27 Financial Data Schedules (electronic filing only) For
six month period ended March 31, 2000
-15-
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 1525869
<INT-BEARING-DEPOSITS> 2709142
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4357620
<INVESTMENTS-CARRYING> 93788
<INVESTMENTS-MARKET> 93050
<LOANS> 35970457
<ALLOWANCE> 88101
<TOTAL-ASSETS> 46176432
<DEPOSITS> 33931211
<SHORT-TERM> 0
<LIABILITIES-OTHER> 318430
<LONG-TERM> 5677863
0
0
<COMMON> 3317
<OTHER-SE> 6245611
<TOTAL-LIABILITIES-AND-EQUITY> 46176432
<INTEREST-LOAN> 1420792
<INTEREST-INVEST> 66321
<INTEREST-OTHER> 199600
<INTEREST-TOTAL> 1686713
<INTEREST-DEPOSIT> 738755
<INTEREST-EXPENSE> 904615
<INTEREST-INCOME-NET> 782098
<LOAN-LOSSES> 3500
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 625859
<INCOME-PRETAX> 206555
<INCOME-PRE-EXTRAORDINARY> 129478
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 129478
<EPS-BASIC> 0.46
<EPS-DILUTED> 0.46
<YIELD-ACTUAL> 0.07
<LOANS-NON> 179000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 86288
<CHARGE-OFFS> 1744
<RECOVERIES> 57
<ALLOWANCE-CLOSE> 88101
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 88101
</TABLE>
