SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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 0-25516
CAMERON FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 43-1702410
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification Number)
123 East Third Street, Cameron, Missouri 64429
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (816) 632-2154
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) 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 at February 11, 1997
Common stock, .01 par value 2,687,696
CAMERON FINANCIAL CORPORATION
Contents
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements Page
Consolidated Balance Sheets at December 31, 1996,
unaudited, and September 30, 1996 3
Consolidated Statements of Earnings for the Three
Months ended December 31, 1996 and 1995, unaudited 4
Consolidated Statements of Equity for the
Three Months Ended December 31, 1996, unaudited 5
Consolidated Statements of Cash Flows for
the Three Months Ended December 31, 1996 and
1995, unaudited 6-7
Notes to Consolidated Financial Statements 8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-16
PART II - OTHER INFORMATION 17
Signatures 17
<TABLE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in Thousands)
<CAPTION>
December 31, September
1996 1996
Assets (unaudited)
<S> <C> <C>
Cash and cash equivalents $8,156 $6,283
Investment securities held-to-maturity (estimated fair
value of $16,607,000 at December 31 and $18,249,000 at
September 30) 16,531 18,297
Mortgage-backed securities held-to-maturity 12 13
Loans receivable, net 159,250 154,444
Accrued interest receivable:
Loans and mortgage-backed securities 1,119 1,090
Investment securities 274 206
Office property and equipment, net 3,662 2,874
Stock in Federal Home Loan Bank(FHLB) of Des Moines, at cost
1,259 1,259
Deferred income taxes 399 611
Other assets 1,217 1,269
Total assets $191,879 $186,346
Liabilities and Stockholders' Equity
Liabilities:
Savings deposits 124,084 123,108
Advances from FHLB 18,250 12,250
Advance payments for taxes and insurance 604 1,729
Accrued interest on savings deposits 120 141
Accrued expenses and other liabilities 969 1,989
Income taxes payable 407 314
Total liabilities 144,434 139,531
Stockholders' Equity:
Serial preferred stock, $.01 par, 2,000,000
authorized, none issued or outstanding --- --
Common stock, $.01 par value, authorized 10,000,000
shares, 3,026,928 shares issued 30 30
Additional paid in capital 29,660 29,622
Retained earnings, substantially restricted 23,214 22,756
Less:
Unearned employee benefits (2,941) (3,082)
Treasury stock, at cost- 177,648 shares at December 31
(2,518) (2,511)
Total stockholders' equity 47,445 46,815
Total liabilities and stockholders' equity $191,879 $186,346
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
<TABLE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Earnings
(unaudited)
<CAPTION>
Three Months Ended
December 31,
1996 1995
(Dollars in thousands)
Interest income:
<S> <C> <C>
Loans $3,438 $2,834
Investment securities 277 385
Certificates of deposit and othe 125 184
Total interest income 3,840 3,403
Interest expense:
Savings deposits 1,639 1,643
Borrowed money 231 3
Total interest expense 1,870 1,646
Net interest income 1,970 1,757
Provision for loan losses 189 42
Net interest income after
provision for loan losses 1,781 1,715
Noninterest income:
Loan fees and service charges 40 33
Other income 6 9
Total noninterest income 46 42
Noninterest expense:
Compensation, payroll taxes and
fringe benefits 461 376
Occupancy expense 59 45
Data processing 40 41
Federal insurance premiums 56 70
Advertising 26 21
Other operating expenses 148 104
Total noninterest expense 790 657
Earnings before income taxe 1,037 1,100
Income taxes 393 415
Net earnings $644 $685
Net earnings per share $0.24 $0.24
Average common shares outstanding 2,680,066 2,809,140
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
<TABLE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
For The Three Months Ended December 31, 1996
(Unaudited)
(Dollars in Thousands)
<CAPTION>
Additional Unearned Total
Common paid-in Retained employee Treasury stockholders'
stock capital earnings benefits stock equity
<S> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1996 $30 $ 29,622 $ 22,756 ($3,082) ($2,511) $46,815
Net earnings - - 644 - - 644
Amortization of RRP - - - 70 - 70
Purchase of treasury stock - - - - (7) (7)
Allocation of ESOP shares - 38 - 71 - 109
Dividends declared($.07 per share) - - (186) - - (186)
Balance, December 31, 1996 $30 $29,660 $23,214 ($2,941) ($2,518) $47,445
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
<TABLE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
Three Months Ended December 31,
(Unaudited)
(Dollars in Thousands)
<CAPTION>
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Net earnings $644 $685
Adjustments to reconcile net earnings to cash
provided by operating activities:
Depreciation and amortization 9 1
Amortization of RRP and allocation of ESOP shares 179 -
Provision for loan losses 189 42
Provision for losses on real estate owned 3 -
Deferred income taxes 212 (45)
Gain on sales of real estate owned (4) -
Stock dividend received from FHLB of Des Moines - (25)
Amortization of deferred loan fees (121) (87)
Proceeds from sales of loans held for sale 141 173
Origination of loans held for sale (140) (90)
Gain on sale of loans held for sale (1) (1)
Changes in assets and liabilities:
Accrued interest receivable (97) 32
Other assets 10 64
Accrued interest payable (21) (33)
Accrued expenses and other liabilities (1,020) 57
Current income taxes payable 93 353
Cash provided by operating activities $76 $1,126
Cash flows from investing activities:
Net increase in loans receivable (4,854) (4,311)
Purchase of loans receivable - (882)
Mortgage-backed securities principal payments 1 1
Maturity of investment securities
held to maturity 1,780 3,718
Purchase of investment securities
held to maturity - (1,041)
Net decrease (increase) in certificates of
deposit in other financial institutions - 991
Additions and improvements to real estate owned 27 -
Purchase of office properties and equipment (811) (587)
Cash used in investing activities ($3,861) ($2,111)
Cash flows from financing activities:
Net (decrease) in NOW, passbook and money market
deposit accounts (40) 324
Net increase in certificate accounts 1,016 (235)
Net decrease in advance payments by
borrowers for taxes and insurance (1,125) (1,138)
Proceeds from FHLB advances 8,000 1,250
Repayment of FHLB advances (2,000) -
Dividends paid (186) (197)
Purchase of Treasury stock (7) -
Net cash (used in) provided by
financing activities 5,658 4
Net increase (decrease)in cash 1,873 (981)
Cash and cash equivalents at beginning of period 6,283 10,934
Cash and cash equivalents at end of period $8,156 $9,953
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $89 $103
Cash paid during the period for interest $1,910 $1,680
Supplemental schedule of noncash investing and financing
activities:
Conversion of loans to real estate owned $23 $-
Conversion of real estate owned to loans $186 $197
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
(1) Cameron Financial Corporation
Cameron Financial Corporation (the "Company") was incorporated
under the laws of the State of Delaware for the purpose of
becoming the savings & loan holding company of The Cameron
Savings & Loan Association, FA (the "Association") in connection
with the Association's conversion from a federally chartered
mutual savings and loan to a federally chartered stock savings
and loan, pursuant to its Plan of Conversion. On February 27,
1995, the Company commenced a Subscription and Community
Offering of its shares in connection with the conversion of the
Association (the "Offering"). The Offering was consummated
and the Company acquired the Association on March 31, 1995.
(2) Basis of Preparation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted
accounting principles (GAAP) for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. To the extent that information and footnotes
required by generally accepted accounting principles for
complete financial statements are contained in or consistent with
the audited financial statements incorporated by reference
in the Company's Annual Report on Form 10-K for the year ended
September 30, 1996, such information and footnotes have not
been duplicated herein. In the opinion of management, all
adjustments, consisting of only normal recurring accruals,
necessary for a fair presentation have been included. The
results of operations and other data for the three month period
ended December 31, 1996 are not necessarily indicative of results
that may be expected for the entire fiscal year ending
September 30, 1997.
(3) Earnings Per Share
Earnings per share of common stock have been determined by
dividing net earnings for the period by the weighted average
number of shares of common stock and common stock equivalents
outstanding, less treasury shares and unallocated ESOP shares.
Stock options are regarded as common stock equivalents and are
therefore considered in both primary and fully diluted
earnings per share calculations. Common stock equivalents are
computed using the treasury stock method.
Earnings per share is based upon the weighted average common and
common equivalents shares outstanding, less treasury shares
and unallocated ESOP shares. Stock options and the shares
awarded under the RRP (see note 4) are regarded as common stock
equivalents and are therefore considered in both primary and
fully diluted earnings per share calculations. Common stock
equivalents are computed using the treasury stock method.
CAMERON FINANCIAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion compares the financial condition of Cameron
Financial Corporation and its wholly owned subsidiary, The Cameron
Savings & Loan Association, F.A., at December 31, 1996 to its fiscal
year end September 30, 1996, and the results of operations forthe three
months ended December 31, 1996 and 1995. This discussion should be read
in conjunction with the interim financial statements and notes which are
included herein.
GENERAL
Cameron Financial Corporation was organized as a Delaware corporation in
December 1994, at the direction of the Association's Board of Directors,
to acquire all of the capital stock issued by the Association upon its
conversion from the mutual to stock form of ownership. The business of
the Holding Company consists primarily of the business of the Association.
The Cameron Savings & Loan Association, F.A., was originally founded in
April 1887 as a Missouri chartered savings and loan association located
in Cameron, Missouri. On November 28, 1994, the Association members
voted to convert the Association to a Federal charter. The Association
conducts its business through its main office in Cameron, Clinton County,
two full service branch offices located in Maryville, Nodaway
County, and Mound City, Holt County, and a loan production office
located in Liberty, Clay County, Missouri. Deposits are insured by the
Federal Deposit Insurance Corporation (FDIC) to the maximum allowable.
The Association's business strategy is to operate as a well-capitalized,
profitable and independent community savings institution dedicated to
home mortgage lending and, to a lesser extent, consumer finance, funded
primarily by retail deposits from the Association's main and branch offices.
The Association has sought to implement this strategy by emphasizing
residential mortgage lending, developing a construction lending business,
maintaining asset quality, managing interest rate risk exposure, maintaining an
investment portfolio of high grade securities and other investments, maintaining
acceptable levels of profitability and capital, and emphasizing customer
service.
The net income of the Association is dependent primarily on its net
interest income, which is the difference between interest earned on its
loans and investments and the interest paid on interest bearing liabilities.
Net income is also affected by the generation of non-interest income, which
primarily consists of fees and service charges. Net interest income is
determined by the difference between the yield earned on interest earning assets
and rates paid on interest bearing liabilities (interest rate spread), and the
relative amounts of interest earning assets and interest bearing liabilities
(net interest margin). The interest rate spread is affected by the loan demand
and deposit flows. In addition, net income is affected by the level of
operating expenses and the establishment of loan loss reserves.The operation of
a financial institution is significantly affected by prevailing economic
conditions, competition, and the monetary and fiscal policies of governmental
agencies. Lending activities are influenced by the demand for and supply of
housing, competition among lenders,thelevel of interest rates, and the
availability of funds. Deposit flows and cost of funds are influenced by
prevailing market rates of interest primarily on competing investments,
account maturities and the levels of personal income and savings in the
market area of the financial institution.
FINANCIAL CONDITION
Total assets increased 3.0% to $191,879,000 at December 31, 1996 from
$186,346,000 at September 30, 1996. Cash and cash equivalents and
investment securities increased 0.4%, or $107,000 to $24,687,000 at
December 31, 1996 from $24,580,000 at September 30, 1996. Net loans
increased 3.1%, or $4,806,000, from September 30, 1996 to December 31,
1996. Real estate loan and consumer loan growth in this time period was
$8,857,000 and $449,000 respectively. Office property and equipment
increased $788,000 to $3,662,000 at December 31, 1996 from $2,874,000 at
September 30, 1996, as a result of construction continuing on the new
home office building in Cameron. The total cost of the new office is
estimated at $4,250,000 and completion is expected in early 1997.
The following table sets forth certain information regarding the
composition of the Association's loan portfolio.
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
<S> <C> <C>
One- to four family $112,888,000 $109,292,000
Multifamily 3,504,000 2,908,000
Commercial real estate 3,600,000 4,322,000
Land 5,404,000 5,404,000
Development 3,593,000 4,201,000
Construction (1) 47,641,000 41,646,000
Consumer loans 8,779,000 8,330,000
Total Loans Receivable 185,409,000 176,103,000
Less:
Deferred loan fees, net 832,000 804,000
Loans in process 23,789,000 19,502,000
Allowance for loan losses 1,538,000 1,353,000
Net Loans Receivable $159,250,000 $154,444,000
(1) Speculative construction $38,274,000 $26,685,000
Contract and permanent
construction $9,367,000 $14,961,000
Total $47,641,000 $41,646,000
</TABLE>
During the three months ended December 31, 1996, construction loans
increased by $5,995,000 to $47,641,000, and permanent 1-4 family loans
increased by $3,596,000 to $112,888,000.
Deposits were $124,084,000 at December 31, 1996, an increase of $976,000,
or 0.8% from $123,108,000 at September 30, 1996. Competition from other
financial and non-financial entities will continue to impact savings growth.
The Association offers competitive interest rates on its deposit products.
The FHLB advances outstanding were $18,250,000 at December 31, 1996
compared to $12,250,000 at September 30, 1996. The Association borrowed
$8.0 million in FHLB advances during the current quarter to fund continued
loan growth, repay maturing advances of $2.0 million and provide additional
liquidity. In January 1997, the Association borrowed an additional $7.0
million in FHLB advances.
In January 1997, the Company repurchased 159,000 shares of common stock
for the previously announced stock buy back program. Approximately
126,000 shares remain to be repurchased in the current buy back program.
RESULTS OF OPERATIONS
Net Earnings: Net earnings decreased $41,000, or 6.0%, to $644,000 for
the quarter ended December 31, 1996, compared with $685,000 for the
quarter ended December 31, 1995. The increases in interest income and
non-interest income and decrease in income taxes were offset by increases in
interest expense, provisions for loan losses, and non-interest expense.
Net Interest Income: Net interest income increased $213,000, or 12.1%,
to $1,970,000 for the quarter ended December 31, 1996, compared with
$1,757,000 for the quarter ended December 31, 1995. The net interest
margin for the quarter ended December 31, 1996 was 4.26% compared to
4.15% for the quarter ended December 31, 1995. The increase was primarily
the result of increased yields on loans and decreased costs on savings for
the December 1996 quarter compared to the December 1995 quarter. The average
spread between interest earning assets and interest bearing liabilities
increased to 2.73% for the three months ended December 31, 1996, compared with
2.52% for the same period in 1995. Increased rates on loans and increased
balances of loans offset increased rates on certificates.
Interest Income: Interest income increased by $437,000, or 12.8%, for
the quarter ended December 31, 1996, to $3,840,000 from $3,403,000 for the
quarter ended December 31, 1995.
Interest Expense: Interest expense increased $224,000, or 13.6%, to
$1,870,000 for the quarter ended December 31, 1996, compared to $1,646,000
for the same period in 1995. The increase is a result of increases in average
balances of interest-bearing liabilities for the quarter ended December 31, 1996
compared to 1995. Average savings deposits were $123.6 million for the quarter
ended December 31, 1996 compared to $121.2 million for the 1995 quarter.
Average FHLB advances were $15.8 million for the quarter ended December 31, 1996
compared to $313,000 for the 1995 quarter. Increases in interest bearing
liabilities were partially offset by lower average rates in the quarter ended
December 31, 1996 compared to the same quarter in 1995. The average costs of
savings for quarters ended December 31, 1996 and 1995 were 5.26% and 5.38%
respectively. Certificates of deposit were 80.7% of total savings and 70.4%
of total interest-bearing liabilities at December 31, 1996 compared to 80.5%
and 73.2% respectively at September 30, 1996. The Association borrowed
$8,000,000 from the FHLB in the quarter ended December 31, 1996 to fund
continued loan growth, repay maturing advances of $2,000,000 and provide
liquidity. Interest rates on new advances were from 5.78% to 6.57% with
maturities between one and six years.
Provision for Loan Losses: The provision for loan losses was $189,000
for the quarter ended December 31, 1996, compared to $42,000 for the
same period in 1995. The allowance for loan losses is reviewed and
adjusted monthly by management based on the size and composition of the
gross loan portfolio. Various percentages are applied to the different
types of loans in the loan portfolio with the highest requirement assigned to
the loans with the greatest inherent risk. The provision for loan loss will
vary based on increases or decreases in the loan portfolio and changes in the
composition of the portfolio. During the quarter ended December 31, 1996, the
gross loan portfolio increased $9.3 million. Although the construction loan
portfolio increased $6.0 million during the quarter, the amount of contract and
permanent construction loans decreased by $5.6 million while speculative
construction loans increased by $11.6 million. Speculative construction
loans carry the highest risk weight. The increase in the loan portfolio
and higher percentage of speculative construction loans resulted in the
increase in provision for loan loss for the quarter ended December 31,
1996. During the quarter ended December 31, 1996, nonperforming loans
decreased by $141,000. Using OTS guidelines, the internal auditor
reviews the adequacy of the allowance for loan losses on a quarterly
basis and reports to the Board of Directors. The Association has never
been notified by a regulatory agency that the allowance for loan losses
is not satisfactory. As of December 31, 1996, the allowance for loan
losses was $1,538,000, or 0.83% of total loans receivable and 115.03% of
total non-performing loans.
A reconciliation of the Association's allowance for loan losses is
summarized as follows:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1995
Balance at beginning
<S> <C> <C>
of period $1,353,000 $994,000
Provision 189,000 42,000
Charge-offs (4,000) (1,000)
Recoveries - -
Balance at end of period $1,538,000 $1,035,000
</TABLE>
Noninterest Income: Noninterest income increased to $46,000 for the
quarter ended December 31, 1996 from $42,000 for the same period in
1995. Loan fees and deposit service charges increased $7,000 for the
quarter ended December 31, 1996 compared to the same period in 1995, due
primarily to a increase in the amount of late charge income and checking
account fees. Other income decreased $3,000 in the quarter ended
December 31, 1996 compared to the same period in 1995.
Noninterest Expense: Noninterest expense increased $133,000 to $790,000
for the quarter ended December 31, 1996 from $657,000 for the same
period in 1995. Personnel expenses increased $85,000 in 1996 compared
to 1995. Cash compensation increased $59,000 for the current quarter
due primarily to more employees and increases in salary for existing
employees. Quarterly expenses of $70,000 associated with the Recognition and
Retention Plan (RRP) adopted January 29, 1996 had no comparable expense in the
prior period. Increased loan originations in the quarter ended December 31,
1996 compared to the quarter ended December 31, 1995, resulted in $29,000 more
costs being deferred in accordance with FAS 91 for the current quarter.
Expenses for other employee benefit plans decreased $16,000 primarily due to the
cancellation of life insurance policies for deferred director's fees.
Federal insurance premiums decreased $14,000 during the quarter ended
December 31, 1996 due to a credit allowed for the payment made to recapitalize
SAIF. Other operating expense increased $44,000 to $148,000. Approximately
$15,000 was due to under accruals for the quarter ended December 31, 1995. NOW
account expense increased $8,000 due primarily to increased supplies
associated with new checking account products introduced in the current quarter.
Postage, which is resupplied at various times, increased $8,000 during the
current quarter. This was due to postage being ordered one time more in
the current quarter than in the prior quarter. A special seminar was
sponsored in the current quarter which cost approximately $5,000 which
had no comparable expense in the prior quarter. Loan related expenses
were up due to increased volume in the current quarter compare to the
prior year.
Income Taxes: Income tax expense decreased $22,000 to $393,000 for the
quarter ended December 31, 1996, compared to $415,000 for the same
period in 1995, due to a decrease of $63,000 in pre-tax income for the
comparable periods. The effective tax rate was 37.9% and 37.7% for the quarters
ended December 31, 1996 and 1995, respectively.
NON-PERFORMING ASSETS
The following table sets forth the amounts and categories of the Association's
non-performing assets. Loans are placed on non-accrual status when the
collection of principal and/or interest is not probable; however, in no event is
interest accrued on loans for which interest is more than 90 days delinquent.
Foreclosed assets include assets acquired in settlement of loans.
<TABLE>
December 31 September 30,
1996 1996
(Dollars in Thousands)
<CAPTION>
Non-Accruing Loans:
<S> <C> <C>
One- to four-family $227 $638
Multi-family -- --
Commercial -- --
Land -- --
Construction -- 131
Consumer -- --
Total non-accuring loans 227 769
Accruing loans delinquent 90 days or more
One- to four-family 924 653
Multi-family -- --
Commercial -- --
Land -- --
Construction 95 --
Consumer 91 56
Total accruing loans delinquent
90 days or more 1,110 709
Total non-performing loans 1,337 1,478
Foreclosed Assets:
One- to four-family 28 70
Multi-family -- --
Commercial -- --
Land -- --
Construction -- --
Consumer -- --
Total foreclosed assets 28 70
Total non-performing assets $1,365 $1,548
Total classified assets $7,857 $7,729
Total non-performing loans as a
percentage of loans receivable 0.72% 0.84%
Total non-performing assets as a
percentage of total assets 0.71% 0.83%
</TABLE>
Classified assets increased 1.66%, or $128,000, to $7,857,000 at December 31,
1996 from $7,729,000 at September 30, 1996.
CAPITAL RESOURCES
The Association is subject to three capital to asset requirements in
accordance with Office of Thrift Supervision regulations. The following
table is a summary of the Association's regulatory capital requirements
and actual capital as of December 31, 1996:
<TABLE>
<CAPTION>
Actual Required Excess
Amount/Percent Amount/Percent Amount/Percent
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Tangible $33,577 18.68% $2,697 1.50% $30,880 17.18%
Core Leverage
Capital 33,577 18.68% 5,393 3.00% 28,184 15.68%
Risk-Based
Capital 34,357 28.36% 9,693 8.00% 24,664 20.36%
</TABLE>
LIQUIDITY
The Association's principal sources of funds are deposits, advances from
the Federal Home Loan Bank of Des Moines, principal and interest payments on
loans, and investment securities classified as held to maturity. 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.
The Association is required to maintain minimum levels of liquid assets
as defined by regulations. The required percentage is currently 5% of
net withdrawable savings deposits and borrowings payable on demand or in
one year or less. The Association has maintained its liquidity ratios
at levels exceeding the minimum requirement. The eligible liquidity
ratios at December 31, 1996 and September 30, 1995 were 5.72% and 6.43%
respectively.
In light of the competition for deposits and demand for loans, the
Association has utilized the funding sources of the Federal Home Loan
Bank to meet demand in accordance with the Association's growth plan.
The wholesale funding sources may allow the Association to obtain a
lower cost of funding and create a more efficient liability match to the
respective assets being funded. Certificates of deposit were 80.7% of
total savings and 70.4% of total interest-costing liabilities at December 31,
1996 compared to 80.5% and 73.2% respectively at September 30, 1996.
The Association borrowed $8.0 from the Federal Home Loan Bank
in the quarter ended December 31, 1996. Advances of $2.0 million matured and
were repaid during the quarter. Outstanding advances total $18,250,000 at
December 31, 1996.
The Association has started construction of its new home office building
in Cameron. Office property and equipment has increased $788,000 in the
three months ended December 31, 1996. Cost of the new building is expected to
be $4,250,000 with completion expected in March 1997 with funds provided by
normal operations.
On November 15, 1996, the Company signed a contract to purchase approximately
four acres of land in Liberty, Missouri for use as a future branch office. It
is the Association's intent to convert the current loan production office to a
full service branch office. Application for the change has not been submitted
to OTS for approval. The cost of the land is $850,000. Although no formal
estimates have been prepared at this time, construction costs are estimated at
$1.0 million. Completion of the office could occur in late 1997 or early
1998 with funds provided by normal operations. The Company intends to
use approximately one acre for the branch facility and the remainder as
investment property.
In September 1996, Congress enacted legislation to recapitalize the SAIF
by a one-time assessment on all SAIF-insured deposits held as of March
31, 1995. The assessment was 65.7 basis points per $100 in deposits,
payable on November 27, 1996. For the Association, the assessment
amounted to $800,000 (or $509,000 when adjusted for taxes), based on the
Association's deposits on March 31, 1995. In addition, beginning January 1,
1997, pursuant to the legislation, interest payments on FICO
bonds issued in the late 1980's by the Financing Corporation to recapitalize
the now defunct Federal Savings and Loan Insurance Corporation will be paid
jointly by BIF- and SAIF-insured institutions. The FICO assessment will be
1.29 basis points per $100 in BIF insured deposits and 6.44 basis points in SAIF
deposits. Beginning January 1, 2000, the FICO interest payments will be pro
rata by banks and thrifts based on deposits (approximately 2.4 basis points per
$100 in deposits). The BIF and SAIF will be merged on January 1, 1999, provided
the bank and savings association charters are merged by that date. In that
event, pro rata FICO sharing will begin on January 1, 1999.
While the legislation has reduced the disparity between premiums paid on
BIF and SAIF deposits, and has relieved the thrift industry of a portion
of the contingent liability represented by the FICO bonds, the premium
disparity between SAIF-insured institutions, such as the Association,
and BIF-insured institutions will continue until at least January 1,
1999. Under the legislation, the Association anticipates that its
ongoing annual SAIF premiums will be approximately $80,000. Legislation recently
enacted by Congress contains a provision that repeals the tax bad-debt reserve
currently available to thrifts (including the percentage-of-taxable-income
method) for tax years beginning after December 31, 1995. The Association will
have to change to the experience method of computing its bad debt deduction.
The legislation requires a thrift to recapture the portion of its bad debt
reserve that exceeds the base year reserve (defined as the tax reserve
as of the last taxable year beginning before 1988). The amount of the
recapture would generally be taken into taxable income ratably over a
six year period. Postponement of the recapture is possible if an
association meets a minimum level for mortgage lending for 1996 and
1997. As of September 30, 1996, the Association's bad debt reserve
subject to recapture over a six year period totaled approximately
$288,000. The Association has established a deferred tax liability of
approximately $96,000 for this recapture.
CAMERON FINANCIAL CORPORATION
FORM 10-Q
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
The Holding Company and the Association are not involved in
any legal proceedings incident to the business of the
Holding Company and the Association, which involve amounts
in the aggregate which management believes are material to
the financial condition and results of operation.
ITEM 2. Changes in Securities
Not Applicable
ITEM 3. Defaults upon Senior Securities
Not Applicable
ITEM 4. Submissions of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports of Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CAMERON
FINANCIAL CORPORATION
Registrant
Date: February 12, 1997 /s/ David G. Just
David G. Just, President and Chief
Executive Officer (Duly Authorized Officer)
Date: February 12, 1997 /s/ Ronald W. Hill
Ronald W. Hill, Vice-President &
Treasurer (Principal Financial &
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
and is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 254000
<INT-BEARING-DEPOSITS> 7902000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 16543000
<INVESTMENTS-MARKET> 16619000
<LOANS> 160788000
<ALLOWANCE> 1538000
<TOTAL-ASSETS> 191879000
<DEPOSITS> 124084000
<SHORT-TERM> 18250000
<LIABILITIES-OTHER> 2100000
<LONG-TERM> 0
0
0
<COMMON> 30000
<OTHER-SE> 47415000
<TOTAL-LIABILITIES-AND-EQUITY> 191879000
<INTEREST-LOAN> 3438000
<INTEREST-INVEST> 277000
<INTEREST-OTHER> 125000
<INTEREST-TOTAL> 3840000
<INTEREST-DEPOSIT> 1639000
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<INTEREST-INCOME-NET> 1970000
<LOAN-LOSSES> 189000
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<EXPENSE-OTHER> 790000
<INCOME-PRETAX> 1037000
<INCOME-PRE-EXTRAORDINARY> 1037000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 644000
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
<YIELD-ACTUAL> 8.30
<LOANS-NON> 277000
<LOANS-PAST> 1110000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 6520000
<ALLOWANCE-OPEN> 1353000
<CHARGE-OFFS> 4000
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1538000
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