Holding Company Docket No. H-2444
OFFICE OF THRIFT SUPERVISION
REPORT H-(b)11
Quarterly Report
For the Quarter Ended September 30, 1996
Filed Pursuant to Section 10(b)(2) of the
Home Owners' Loan Act, as amended, and 12.
C.F.R. Section 584.1(a).
SOBIESKI BANCORP, INC.
Legal Name of Registrant
2930 West Cleveland Road, South Bend,
Indiana 46628
Address of Principal Executive Office
Robert L. Freedman, P.C.
Beth Freedman, Esq.
Silver, Freedman & Taff, L.L.P.
110 New York Avenue, N.W.
Washington, D.C. 20005
(202) 414-6100
Name, Telephone Number (including area
code) and Address of an
Individual to Whom Communications are to be Sent
Index of items of the Annual/Current
Report
Item No. Description Page
Item 17 , Filing of Statements
with the Securities and Exchange
Commission 1
Item 22 , Exhibits 1
INFORMATION TO BE INCLUDED IN REPORT
Except as may otherwise be noted in the
attached Form 10-QSB, there have been no
changes during the quarter ended September
30, 1996 in any of the information
previously reported by the Registrant in
any subsequent current or special reports.
ITEM 17. FILING OF STATEMENTS WITH THE
SECURITIES AND EXCHANGE COMMISSION
Unless previously filed with the OTS, a
copy of all materials filed with the
Securities and Exchange Commission,
including filings under both the
Securities Act of 1933 and the Securities
Exchange Act of 1934, should be submitted
under cover of this Report. Securities
filings of insured subsidiary institutions
filed with the OTS separately, need not be
included under cover of an H-(b)11.
RESPONSE: A copy of the Registrant's
quarterly report on Form 10-QSB for the
quarter ended September 30,1996 is
attached as Exhibit A.
ITEM 22. EXHIBITS
The following exhibits are to be filed as
a part of this Report.
1. The Registrant's annual report to
shareholders for the fiscal year under
report.
RESPONSE: Not applicable.
2. Copies not previously filed of:
(a) definitive Schedule 14A proxy
soliciting material for the period under
report; and (b) reports on Forms 8-K and
10-K,and any amendments, filed with
the Securities and Exchange Commission as
required by the Securities Exchange Act of
1934 for the period under report.
RESPONSE: A copy of the Registrant's
quarterly report on Form 10-QSB for the
quarter ended September 30, 1996 is
attached as Exhibit A.
3. Copies not previously filed of
any prospectus issued by the Registrant or
any of its subsidiaries in connection with
any registration statements filed during
the period under report with the
Securities and Exchange Commission
pursuant to the Securities Act of 1933 and
with any State authority in connection
with any intrastate offering.
RESPONSE: None.
4. Copies not previously filed of
the Registrant's charter and bylaws or
instruments corresponding thereto (e.g.,
partnership agreement, trust agreement).
RESPONSE: None.
CERTIFICATION
Pursuant to the requirements of Section
10(b)(2) of the HOLA, as amended, the
Registrant making this Report has caused
this filing to be signed on its behalf by
the undersigned, duly authorized.
SOBIESKI BANCORP, INC.
The undersigned principal executive or
principal financial officer of the
Registrant making this Report
acknowledges and certifies that the
information contained herein,including
forms or exhibits checked or listed below,
has been carefully reviewed, and that such
information is true, correct, and
complete.
Included:
___ Form 1:Subsidiaries of Registrant
___ Form 2:Investment in Savings
Associations or SLHCs
___ Form 3:Multiple SLHC Investments
___ Form 4(a):Directors, Officers,
Partners, Trustees, and Others
___ Form 4(b):Partnership/Contribution of
Capital
___ Form 4(c):Trust/Beneficial Interest
___ Form 5:Investment in Nonaffiliated
Thrifts or SLHCs
___ Form 6:Interlocking Directors and
Officers - Voting Rights of a Mutual
Association
___ Form 7:Interlocking Directors and
Officers - Control or Managerial Influence
___ Form 8:Classification of Registrant
___ Form 9:Dividend Summary
___ Form 10:Taxes
___ Form 11:Debt or Borrowings Secured by
Pledge of Nonwithdrawable Stock
___ Form 12:Increase in Amount of
Securities Outstanding
___ Form 13: Treasury Stock
X Other:Ex. A Quarterly Report on Form
10-QSB for the quarter ended September 30,1996
Attest
/S/Thomas F. Gruber /S/William E.Smith
Thomas F. Gruber William E. Smith
President and Chief
Executive Officer Chief Financial Officer
Date: November 4, 1996
Exhibit A
U.S. SECURITIES 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
September 30,1996
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 0-25518
SOBIESKI BANCORP, INC.
(Exact name of registrant as specified in
its charter)
Delaware
35-1942803_________
(State or other jurisdiction of (IRS
Employer Identification No.)
incorporation or organization)
2930 W. Cleveland Road, South Bend,
Indiana 46628
(Address of principal executive offices)
(Zip Code)
Issuer's telephone number, including area
code:(219) 271-8300
Check whether the issuer (1) filed all
reports required to be filed by Section 13
or 15(d) of the Exchange Act during the
past 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 90
days.
Yes[X] No [ ]
As of October 25, 1996, there were 884,060
shares of the registrant's common stock
issued and outstanding.
SOBIESKI BANCORP, INC.AND SUBSIDIARY
INDEX
Page
Number
PART I.FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements
of Financial Condition 1
Condensed Consolidated Statements
of Operations 2
Condensed Consolidated Statements
of Cash Flows 3
Notes to Condensed Consolidated
Financial Statements 4-5
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 6-8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior
Securities 9
Item 4. Submission of Matters
To a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on
Form 8-K 9
SIGNATURES 10
i
Sobieski Bancorp, Inc. And Subsidiary
Condensed Consolidated Statements Of Financial Condition
September 30, 1996 and June 30, 1996
<TABLE>
<CAPTION>
September 30, June 30,
ASSETS 1996 1996
(Unaudited)
Cash, including interest-bearing
deposits in other financial
institutions of $609,200 and
<C> <S> <C> <C> <C> <C>
$334,793, respectively $ 1,611,524 $ 1,258,520
Federal funds sold 1,040,000 127,000
Certificates of deposit 198,000 198,000
Investment securities,
available-for-sale (amortized
cost of $2,976,592 and
3,167,813, respectively) 3,012,532 3,193,784
Investment securities, held-to
-maturity (market value of
approximately $1,497,000) 1,500,000 1,500,000
Mortgage-backed securities,
available-for-sale (amortized
cost of $2,287,320 and
$2,383,429) 2,250,222 2,344,925
Mortgage-backed securities,
held-to-maturity (market
of approximately $12,893,000
and $13,424,600,
respectively) 13,274,367 13,806,725
Loans receivable, net 54,349,765 53,114,094
Federal Home Loan Bank stock,
at cost 636,000 636,000
Property and equipment, net 2,092,625 2,110,699
Other assets 671,900 557,044
Deferred income taxes 11,458 15,960
Total assets $ 80,648,393 $ 78,862,751
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 59,975,199 $ 61,226,683
Federal Home Loan Bank
advances 5,700,000 3,000,000
Advances from borrowers for
taxes and insurance 521,286 264,531
Accrued income taxes - 129,305
Accrued interest and other
expenses 645,336 188,042
Total liabilities 66,841,821 64,808,561
Stockholders' equity:
Preferred stock, $.01 par
value: 500,000 shares
authorized; none issued - -
Common stock, $.01 par value:
3,500,000 shares authorized;
966,000 shares issued 9,660 9,660
Additional paid-in capital 9,099,156 9,099,156
Retained earnings,
substantially restricted 6,407,561 6,538,602
Net unrealized depreciation of
securities available-
for-sale (700) (7,571)
15,515,677 15,639,847
Less: Treasury stock, at
cost, 81,940 and 71,940
shares,respectively 1,032,905 909,457
Unallocated Employee
Stock Ownership Plan shares;
67,620 shares 676,200 676,200
Total stockholders'
equity 13,806,572 14,054,190
Total liabilities and
stockholders'
equity $ 80,648,393 $78,862,751
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
1
Sobieski Bancorp, Inc. And Subsidiary
Condensed Consolidated Statements Of Operations
for the three months ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1996 1995
(Unaudited)
Interest Income:
<S> <C> <C> <C> <C>
Loans $ 1,058,500 $ 986,938
Mortgage-backed securities 255,624 236,403
Interest-bearing deposits 16,407 88,866
Investments and other 80,606 62,649
Total interest income 1,411,137 1,374,856
Interest expense:
Interest on deposits 720,376 763,787
Interest on borrowings 60,387 -
Total interest expense 780,763 763,787
Net interest income 630,374 611,069
Provision for loan losses - -
Net interest income after
provision for loan losses 630,374 611,069
Non-interest income:
Fees and service charges 40,175 32,385
Other income 5,255 9,398
Total non-interest income 45,430 41,783
Non-interest expenses:
Compensation and benefits 222,229 208,403
Occupancy and equipment 64,582 57,647
Federal deposit insurance
premiums 449,327 36,194
Advertising and promotion 5,105 6,697
Service bureau expense 27,189 27,594
Other operating expenses 124,413 126,056
Total non-interest expenses 892,845 462,591
Income (loss) before provision
(credit)for income taxes (217,041) 190,261
Provision (credit) for income
taxes (86,000) 73,300
Net income (loss) $(131,041) $ 116,961
Earnings (loss) per common
share $ (0.16) $ 0.13
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
2
<PAGE>
<TABLE>
Sobieski Bancorp, Inc. And Subsidiary
Condensed Consolidated Statements Of Cash Flows
for the three months ended September 30, 1996 and 1995
Three Months
Ended September 30,
1996 1995
(Unaudited)
Cash flows provided by (used in)
operating activities:
<S> <C> <C> <C>
Net income (loss) $ (131,041) $ 116,961
Adjustments to reconcile net
income loss to net cash
provided by operating
activities:
Depreciation of property
and equipment 28,032 26,550
Gain on disposal of
equipment (200) -
Loss on sale of real
estate owned, net - 3,301
Amortization of premiums
and accretion of
discounts, net 19,400 20,337
Amortization of deferred
loan fees (11,136) (16,428)
(Increase) decrease in
other assets (114,856) 45,619
Increase (decrease) in
accrued income taxes (129,305) 10,250
Increase (decrease) in
accrued interest and
other expenses 457,294 (13,609)
Net cash provided by
operating activities 118,188 192,981
Cash flows provided by (used in)
investing activities:
Purchase of investment
securities (12,415) (13,287)
Principal reductions of
mortgage-backed securities 612,701 483,846
Proceeds from maturities of
investment securities 200,000 -
Net (increase) decrease in
loans made to customers and
principal collections on
loans (1,224,535) 1,294,488
Proceeds from sale of real
estate owned - 700
Proceeds from sale of equipment 200 -
Purchase of property and
equipment (9,958) (2,959)
Net cash provided by (used in)
investing activities (434,007) 1,762,788
Cash flows provided by (used in) financing activities:
Federal Home Loan Bank
advances 3,100,000 -
Repayment of Federal Home
Loan Bank advances (400,000) -
Purchase of treasury stock (123,448) -
Net decrease in deposits (1,251,484) (775,104)
Increase in advances from
borrowers for taxes and
insurance 256,755 214,870
Net cash provided by (used
in) financing activities 1,581,823 (560,234)
Increase in cash and cash
equivalents 1,266,004 1,395,535
Cash and cash equivalents,
beginning of period 1,385,520 6,028,611
Cash and cash equivalents,
end of period $ 2,651,524 $ 7,424,146
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
3
<PAGE>
Sobieski Bancorp, Inc. And Subsidiary
Notes To Condensed Consolidated Financial
Statements
A. GENERAL.
The accompanying condensed consolidated
financial statements include the accounts
of Sobieski Bancorp, Inc. (the "Company")
and its wholly owned subsidiary, Sobieski
Federal Savings and Loan Association of
South Bend (the "Association").
The condensed consolidated financial
statements included herein have been
prepared by the registrant pursuant to the
rules and regulations of the Securities
and Exchange Commission. Certain
information and footnote disclosures
normally included in financial statements
prepared in accordance with generally
accepted accounting principles have been
condensed or omitted pursuant to such
rules and regulations, although the
registrant believes that the disclosures
are adequate to make the information
presented not misleading. In the opinion
of management, the accompanying unaudited
condensed consolidated financial
statements contain all adjustments,
consisting only of normal recurring
accruals, necessary for a fair
presentation of the Company's consolidated
financial position,results of operations
and cash flows for the interim periods
presented. The consolidated results of
operations for the interim periods
presented are not necessarily indicative
of the results that may be expected for
the full year. The accompanying unaudited
condensed consolidated financial
statements should be read in conjunction
with the Company's consolidated financial
statements included in the Company's
Annual Report on Form 10-KSB for the year
ended June 30, 1996.
B. CONVERSION AND ISSUANCE OF COMMON
STOCK.
On October 4, 1994, the Board of Directors
of the Association adopted a plan of
conversion to convert the Association from
a federally chartered mutual savings and
loan association to a federally chartered
stock savings and loan association (the
"Conversion"). The Association obtained
the required regulatory approval for the
Conversion in February 1995 and on March
22, 1995 the plan of conversion was
approved by a majority of the votes
eligible to be cast by the members of the
Association.
Sobieski Bancorp, Inc. (the "Company") was
organized as a Delaware corporation in
December 1994 for the purpose of
acquiring all of the issued and
outstanding capital stock of the
Association issued in the Conversion.
At the time of Conversion, the Association
established a liquidation account in an
amount equal to the Association's
retained earnings as of September 30,
1994. The liquidation account will be
maintained for the benefit of depositors,
as of the eligibility record date and
supplemental eligibility record date,
who continue to maintain their deposits
with the Association after the Conversion.
In the event of a complete liquidation
(and only in such event), each eligible
depositor will be entitled to receive a
liquidation distribution from the
liquidation account, in the proportionate
amount of the then current adjusted
balance for deposits then held, before any
liquidation distribution may be made with
respect to the stockholders.
Current regulations allow the Company to
pay dividends on its stock if its
regulatory capital would not thereby be
reduced below the amount then required for
the aforementioned liquidation account.
Also, capital distribution regulations
limit the Company's ability to make
capital distributions which include
dividends, stock redemptions, repurchases
and other transactions charged to the
capital account based on its capital
level and supervisory condition. Federal
regulations also preclude any repurchase
of the stock of the Company for three
years after conversion except for
purchases of qualifying shares of a
director and repurchases pursuant to an
offer made on a pro rata basis to all
stockholders and with prior approval of
the Office of Thrift Supervision or
pursuant to an open-market stock
repurchase program with certain regulatory
criteria.
4
<PAGE>
Sobieski Bancorp, Inc. And Subsidiary
Notes To Condensed Consolidated Financial
Statements, Concluded.
C. ACCOUNTING POLICIES.
Securities
Effective July 1, 1994, the Association
adopted Statement of Financial Accounting
Standards No. 115 ("SFAS 115"),
"Accounting for Certain Investments in
Debt and Equity Securities". This
statement modified the financial
accounting and reporting for investments
in equity securities that have readily
determinable fair values and for all
investments in debt securities.
Securities are to be classified as either
held-to-maturity and reported at amortized
cost, trading and reported at fair value
(with unrealized holding gains and losses
included in current earnings), or
available-for-sale and reported at fair
value (with unrealized holding gains and
losses excluded from current earnings and
reported as a separate component of
stockholders' equity). The Association
had no trading securities at September
30, 1996.
Allowance For Loan Losses
Effective July 1, 1995, the Association
adopted Statement of Financial Accounting
Standards ("SFAS") 114, as amended by
SFAS 118, "Accounting by Creditors for
Impairment of a Loan", which further
clarifies the accounting treatment,
classification and valuation of impaired
loans. The measurement of an impaired
loan is generally based on the present
value of expected future cash flows
discounted at the historical effective
interest rate,except that all collateral-
dependent loans are measured for
impairment based on the fair value of the
related collateral. SFAS 114 does not
apply to large groups of smaller-balance
homogeneous loans such as residential
mortgage and consumer installment loans.
As the Association's loan portfolio is
comprised substantially of residential
mortgage and consumer installment loans,
the adoption of SFAS 114 has had no impact
on the Association's determination of its
allowance for loan losses. The
Association's nonaccrual loans at
September 30, 1996 aggregated $90,358.
Earnings Per Common Share
Earnings (loss) per common share is
calculated by dividing net income (loss)
for the period by the weighted average
number of common shares outstanding. The
Company accounts for the shares of common
stock acquired by the ESOP and the
restricted shares awarded under the RRP in
accordance with Statement of Position 93-6
which prescribes that shares held by
the ESOP and the restricted shares awarded
under the RRP are not considered in the
weighted average number of shares
outstanding until such shares are
committed for allocation to an ESOP
participant's individual account or
vested, in the case of the RRP. As of
September 30, 1996, 11,270 shares were
released or committed to be released to
ESOP participants and 3,812 shares are
assumed to be vested under the RRP.
Accordingly, the weighted average number
of common shares outstanding for the three
month period ended September 30,1996 were
822,683. The weighted average number of
common shares outstanding for the same
period in 1995 were 891,958.
5
<PAGE>
Item 2. Management's Discussion And
Analysis of Financial Condition And
Results of Operations
Financial Condition
The Company's total assets increased $1.8
million during the three months ended
September 30, 1996. This increase was due
to increases in cash of $353,000, federal
funds sold of $913,000 and loans
receivable of $1.2 million. These
increases were offset in part by a
decrease in mortgage-backed securities of
$627,000. The increase in loans
receivable was a result of purchasing
$777,000 of participation interests
in commercial loans and increased demand
for adjustable rate mortgages.
The Company's total liabilities increased
$2.0 million from $64.8 million at
June 30, 1996 to $66.8 million at
September 30, 1996. The increase was
primarily attributable to an increase in
Federal Home Loan Bank advances of $2.7
million. These advances are being used to
fund purchases of participation interests
in commercial loans. Deposits decreased
$1.2 million from $61.2 million at June
30, 1996 to $60 million at September 30,
1996. The decrease was a result of
customers seeking higher yielding
investment alternatives.
Stockholders' equity decreased by $248,000
to $13.8 million at September 30, 1996
compared to $14.1 million at June 30, 1996
principally as a result of common stock
repurchases and a one-time charge to
earnings for the SAIF assessment in the
amount of $250,100, net of the tax
benefit.
Results of Operations
General. The Company experienced a net
loss for the three months ended September
30, 1996 of $131,000 which was $248,000
less than net income of $117,000 for the
same period in 1995. A one-time
assessment to recapitalize SAIF was the
primary reason for the loss during the
1996 period.
Net Interest Income. The Company's net
income is primarily dependent upon net
interest income. Net interest income was
$630,000 for the three month period ended
September 30, 1996. The increase of
$19,300 in net interest income when
compared to net interest income for the
comparable period last year was primarily
a result of increased income earned as a
result of an increased volume of
commercial loans and a decrease in
interest rates paid on deposits.
The weighted average yield earned on the
Company's loan portfolio for the three-
month period ended September 30, 1996 was
7.89% compared to 8.00% for the comparable
period in 1995.
Interest expense for the three month
period ended September 30, 1996 was
$780,800 as compared to $763,800 in the
prior year. The increases in interest
expense for the three months ended
September 30, 1996 was attributable to
interest paid on Federal Home Loan Bank
advances, offset by a decrease in rates
paid on deposits.
Provisions for Loan Losses. During the
three months ended September 30, 1996, the
Company had no provision for loan losses.
At September 30, 1996, the Company's
allowance for loan losses totaled
$200,000 or .37% of net loans receivable
and 221% of total non-performing loans.
The allowance for loan losses is
established through a provision for loan
losses based on management's evaluation of
the risks inherent in its loan portfolio
and changes in the nature and volume of
its loan activity, including those loans
which are being specifically monitored by
management. Such evaluation, which
includes a review of loans for which full
collectibility may not be reasonably
assured, considers among other matters,
loan classification, the estimated fair
value of the underlying collateral,
economic conditions, historical loan loss
experience, the amount of loans
outstanding and other factors that
warrant recognition in providing for an
adequate allowance for loan losses. A
significant factor considered in the
Company's allowance is its historically
low level of loans other than one-to-four
family real estate loans.
6
<PAGE>
Item 2. Management's Discussion And
Analysis of Financial Condition And
Results of Operations, Continued.
Although management believes that it uses
the best information available to
determine the allowance, unforeseen market
conditions could result in adjustments and
net income could be significantly affected
if
circumstances differ substantially from
the assumptions used in making the final
determination. Future additions to the
Company's allowance for loan losses will
be the result of periodic loan, property
and collateral reviews and thus cannot be
predicted in advance. In addition
federal regulatory agencies, as an
integral part of their oversight
process, periodically review the Company's
allowance for loan losses. Such
agencies may require the Company to
recognize additions to the allowance based
upon their judgment of the information
available to them at the time of their
examination.
Non-Interest Income. Non-interest income
consists primarily of fees and service
charges on deposit accounts. Non-interest
income increased $3,600 from $41,800 for
the three months ended September 30, 1995
to $45,400 for the three months ended
September 30 1996.
Non-Interest Expenses. Non-interest
expenses were $892,700 for the three
months ended September 30, 1996, compared
to $462,600 for the same period last year,
reflecting an increases of $430,100. This
increase was primarily attributable to the
one-time special assessment of $414,000
to recapitalize the SAIF fund.
Income Taxes. Income taxes decreased
$159,300 for the three months ended
September 30, 1996, primarily as a result
of tax benefits resulting from the SAIF
assessment. The Company's effective tax
rate for the three month period ended
September 30, 1996 was 39.6%, compared to
38.5% for the comparable period in 1995.
Liquidity and Capital Resources
The Company's principal sources of funds
are deposits and principal and interest
payments on loans and investments. While
scheduled loan repayments and maturing
investments are relatively predictable,
deposit flows and early loan prepayments
are more influenced by interest rates,
general economic conditions and
competition. Additionally, the Company
may infrequently borrow funds from the
Federal Home Loan Bank of Indianapolis
("FHLB") or utilize other borrowings of
funds based on need, comparative costs and
availability at the time.
Federal regulations have required the
Company to maintain minimum levels of
liquid assets. The required percentage
has varied from time to time based upon
the economic conditions and savings flows
and is currently 5% of net withdrawable
savings deposits and borrowings payable on
demand or in one year or less during the
preceding calendar month. Liquid assets
for purposes of this ratio include cash,
certain time deposits, U.S. Government
obligations, government agency and other
securities and obligations generally
having remaining maturities of less
than five years. The Company has
maintained its liquidity ratio at levels
in excess of those required. At the
September 30, 1996, the Company's
liquidity ratio was 13.74%.
At September 30, 1996, the Company had
$5,700,000 in outstanding advances from
the FHLB. The Company uses its liquidity
resources principally to meet ongoing
commitments, to fund maturing certificates
of deposit and deposit withdrawals and to
meet operating expenses. The Company
anticipates that it will have sufficient
funds available to meet current loan
commitments. At September 30, 1996, the
Company had outstanding commitments to
extend credit which amounted to $1,166,000
(including $633,000 in available home
equity lines of credit). Management
believes that loan repayments and other
sources of funds will be adequate to meet
the Company's foreseeable liquidity needs.
At September 30, 1996, the Association had
tangible capital of $9.2 million or 11.4%
of adjusted total assets which was $8.0
million above the minimum capital
requirement of $1.2 million or 1.5% of
adjusted total assets.
At September 30, 1996, the Association had
core capital of $9.2 million or 11.4% of
adjusted total assets which was $6.8
million above the minimum capital
requirement of $2.4 million or 3.0% of
adjusted total assets.
7
<PAGE>
Item 2. Management's Discussion And
Analysis of Financial Condition And
Results of Operations, Concluded.
At September 30, 1996, the Association had
total risk-based capital of $9.4 million
and risk-weighted assets of $32.8 million
or total risk-based capital of 28.6% of
risk-weighted assets. This amount was
$6.8 million above the minimum regulatory
risk-based capital requirement of $2.6
million, or 8.0% of risk-weighted assets.
Financial Accounting Developments
In October 1995, Statement of Financial
Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS
123"), was issued. This Statement requires
the fair value of stock options and other
stock-based compensation issued to
employees to either be included as
compensation expense in the income
statement, or the proforma effect on net
income and earnings per share of such
compensation expense to be disclosed in
the footnotes to the Company's financial
statements commencing with the Company's
1997 fiscal year. The Company expects to
adopt SFAS 123 on a disclosure basis only.
As such, implementation of SFAS 123 is not
expected to impact the Company's
consolidated financial statements.
Regulatory Developments
The deposits of savings associations, such
as the Association, are presently insured
by the SAIF, which together with the BIF,
are the two insurance funds administered
by the FDIC. Financial institutions which
are members of the BIF are experiencing
substantially lower deposit insurance
premiums because the BIF has achieved its
required level of reserves while the SAIF
has not yet achieved its required
reserves. In order to help eliminate this
disparity and any competitive disadvantage
due to disparate deposit insurance premium
schedules, legislation to recapitalize the
SAIF was enacted in September 1996.
The legislation requires a special one-
time assessment of approximately 65.7
cents per $100 of SAIF insured deposits
held by the Association at March 31, 1995.
The one-time special assessment resulted
in a tax affected charge to earnings of
approximately $250,000 during the quarter
ended September 30, 1996. The legislation
is intended to fully recapitalize the SAIF
fund so that commercial bank and thrift
deposits will be charged the same FDIC
premiums beginning October 1, 1996. As of
such date deposit insurance premiums for
highly rated institutions, such as the
Association, have been eliminated.
The Association, however, will continue to
be subject to an assessment to fund
repayment of the FICO obligations. It is
anticipated that the FICO assessment for
SAIF insured institutions will be 6.5
cents per $100 of deposits while BIF
insured institutions will pay 1.3 cents
per $100 of deposits until the year 2000
when the assessment will be imposed at the
same rate on all FDIC insured
institutions. Accordingly, as a result of
the reduction of the SAIF assessment and
the resulting FICO assessment, the annual
after tax decrease in assessment costs is
expected to be approximately $271,200
based upon a September 30, 1996 assessment
base.
8
<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
(a) On October 23, 1996, the
Company held its Annual Meeting of
Stockholders.
(b) At that meeting, Thomas F.
Gruber and Joseph F.Nagy were elected
Directors for terms to expire in 1999.
(c) Stockholders also voted on
the following matters:
(i) The election of the
following Directors of the Company,
<TABLE>
<CAPTION>
Broker
Votes: For Against Abstain Non-Votes
<S> <C> <C> <C> <C> <C>
Thomas F. Gruber 782,056 14,189 0 0
Joseph F. Nagy 776,189 20,056 0 0
(ii) The ratification of the appointment of Coopers &
Lybrand L.L. P. as independent auditors of the Company
for the fiscal year ending September 30, 1997.
Broker
Votes: For Against Abstain Non-Votes
796,932 788 525 0
</TABLE>
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Sobieski Bancorp, Inc.
(Registrant)
Date: November 4, 1996
By:
/s/s Thomas F.Gruber
Thomas F.Gruber
President and Chief Executive Officer
Date: November 4, 1996
By:
/s/s William E.Smith
William E. Smith
Chief Financial Officer
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000934860
<NAME> SOBIESKI BANCORP INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,611,524
<SECURITIES> 21,911,121
<RECEIVABLES> 54,349,765
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 683,358
<PP&E> 2,092,625
<DEPRECIATION> 0
<TOTAL-ASSETS> 80,648,393
<CURRENT-LIABILITIES> 66,841,821
<BONDS> 0
0
0
<COMMON> 9,660
<OTHER-SE> 13,796,912
<TOTAL-LIABILITY-AND-EQUITY> 80,648,393
<SALES> 0
<TOTAL-REVENUES> 1,456,567
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 892,845
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 780,763
<INCOME-PRETAX> (217,041)
<INCOME-TAX> (86,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (131,041)
<EPS-PRIMARY> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
