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, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) FOR 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)
1304 North Walnut 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
common stock as of the latest practicable date.
Class Outstanding at February 12, 1998
Common stock, .01 par value 2,561,859
CAMERON FINANCIAL CORPORATION
Contents
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements Page
Consolidated Balance Sheets at December 31, 1997,
unaudited, and September 30, 1997 3
Consolidated Statements of Earnings for the Three
Months Ended December 31, 1997 and 1996, unaudited 4
Consolidated Statements of Equity for the
Three Months Ended December 31, 1997, unaudited 5
Consolidated Statements of Cash Flows for
the Three Months Ended December 31, 1997 and
1996, unaudited 6-7
Notes to Unaudited Consolidated Financial
Statements 8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-17
PART II - OTHER INFORMATION 18
Signatures 18
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
December 31, September 30,
1997 1997
Assets (unaudited)
<CAPTION>
<S> <C> <C>
Cash and cash equivalents $4,299 $10,509
Investment securities held-to-maturity (estimated fair
value of $15,943,000 at December 31 and $13,911,000 at
September 30) 15,872 13,872
Mortgage-backed securities held-to-maturity 9 10
Loans receivable, net 178,881 176,790
Accrued interest receivable:
Loans and mortgage-backed securities 1,266 1,268
Investment securities 244 150
Office property and equipment, net 6,913 6,406
Stock in Federal Home Loan Bank(FHLB) of Des Moines, at cost 1,762 1,762
Deferred income taxes 602 536
Other assets 1,405 1,201
Total assets $211,253 $212,504
Liabilities and Stockholders' Equity
Liabilities:
Savings deposits 131,065 128,771
Advances from FHLB 32,250 35,250
Advance payments for taxes and insurance 414 1,772
Accrued interest on savings deposits 90 137
Accrued expenses and other liabilities 1,394 1,506
Income taxes payable 749 401
Total liabilities 165,962 167,837
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 29,869 29,804
Retained earnings, substantially restricted 24,934 24,567
Less:
Unearned employee benefits (2,370) (2,524)
Treasury stock, at cost- 462,523 shares at December 31, 1997
and 464,850 at September 30, 1997 (7,172) (7,210)
Total stockholders' equity 45,291 44,667
Total liabilities and stockholders' equity $211,253 $212,504
</TABLE>
See accompanying Notes to Unaudited Consolidated FinancialStatements.
<TABLE>
<CAPTION>
<PAGE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Earnings
(unaudited)
Three Months Ended
December 31,
1997 1996
(Dollars in thousands, except share data)
Interest income:
<S> <C> <C>
Loans $3,823 $3,438
Investment securities 218 277
Mortgage-backed securities - -
Certificates of deposit and other 148 125
Total interest income 4,189 3,840
Interest expense:
Savings deposits 1,786 1,639
Borrowed money 512 231
Total interest expense 2,298 1,870
Net interest income 1,891 1,970
Provision for loan losses 83 189
Net interest income after
provision for loan losses 1,808 1,781
Noninterest income:
Loan fees and service charges 49 40
Other income 25 6
Total noninterest income 74 46
Noninterest expense:
Compensation, payroll taxes and
fringe benefits 606 461
Occupancy expense 158 59
Data processing 50 40
Federal insurance premiums 20 56
Advertising 35 26
Loss on real estate owned 7 -
Other operating expenses 155 148
Total noninterest expense 1,031 790
Earnings before income taxes 851 1,037
Income taxes 316 393
Net earnings $535 $644
Basic and diluted earnings per share $0.22 $0.24
Basic number of shares outstanding 2,407,721 2,663,371
Common stock equivalents-stock options 45,953 16,695
Diluted number of shares outstanding 2,453,674 2,680,066
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
<TABLE>
<CAPTION>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
For The Three Months Ended December 31, 1997
(Unaudited)
(Dollars in Thousands)
Additional Unearned Total
Common paid-in Retained employee Treasury stockholders'
Stock capital earnings benefits stock equity
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1997 $30 $29,804 $24,567 ($2,524) ($7,210) $44,667
Net earnings - - 535 - - $535
Amortization of RRP - - - 87 (17) 70
Purchase of treasury stock - - - - - 0
Allocation of ESOP shares - 68 - 67 - 135
Exercise of stock options - (3) - - 55 52
Dividends declared($.07 per share) - - (168) - - (168)
Balance at December 31, 1997 $30 $29,869 $24,934 ($2,370) ($7,172) $45,291
See accompanying Notes to Unaudited Consolidated Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
Three Months Ended December 31,
(Unaudited)
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net earnings $535 $644
Adjustments to reconcile net earnings to cash
provided by operating activities:
Depreciation and amortization 78 9
Provision for loan losses 83 189
Provision for losses on real estate owned - 3
Amortization of RRP and allocation of ESOP shares 205 179
Deferred income taxes (66) 212
Gain on sales of real estate owned - (4)
Amortization of deferred loan fees (119) (121)
Proceeds from sales of loans held for sale 2,357 141
Origination of loans held for sale (1,957) (140)
Gain on sale of loans held for sale (19) (1)
Changes in assets and liabilities:
Accrued interest receivable (92) (97)
Other assets (8) 10
Accrued interest payable (47) (21)
Accrued expenses and other liabilities (112) (1,020)
Current income taxes payable 348 93
Cash provided by operating activities $1,186 $76
Cash flows from investing activities:
Net increase in loans receivable (2,624) (4,854)
Mortgage-backed securities principal payments 1 1
Maturity of investment securities
held to maturity 1,000 1,780
Purchase of investment securities
held to maturity (2,997) -
Net proceeds from sale of real estate owned - 27
Additions and improvements to real estate owned (8) (4)
Purchase of office properties and equipment (588) (811)
Cash used in investing activities ($5,216) ($3,861)
Cash flows from financing activities:
Proceeds from issuance of common stock 52 -
Net increase (decrease) in NOW passbook and
money market deposit accounts 1,085 (40)
Net increase in certificate accounts 1,209 1,016
Net decrease in advance payments by
borrowers for taxes and insurance (1,358) (1,125)
Proceeds from FHLB advances - 8,000
Repayment of FHLB advances (3,000) (2,000)
Dividends paid (168) (186)
Purchase of Treasury stock - (7)
Net cash (used in) provided by
financing activities (2,180) 5,658
Net (decrease) increase in cash (6,210) 1,873
Cash and cash equivalents at beginning of period 10,509 6,283
Cash and cash equivalents at end of period $4,299 $8,156
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $35 $89
Cash paid during the period for interest, net
of capitalized interest $2,345 $1,893
Supplemental schedule of noncash investing and financing
activities:
Conversion of loans to real estate owned $188 -
Conversion of real estate owned to loans - $23
Dividend declared and payable $168 $186
See accompanying Notes to Unaudited Consolidated Financial Statements.
</TABLE>
<PAGE>
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, 1997, 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, 1997 are not necessarily indicative
of results that may be expected for the entire fiscal year ending
September 30, 1998.
(3) Earnings Per Share
Effective for the quarter ended December 31, 1997, the Company
adopted the provisions of SFAS No. 128, "Earnings per Share," (EPS)
which replaces the previous primary EPS with basic EPS. That
presentation is also required for prior periods. Basic earnings
per share excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised
or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the Company.
<PAGE>
CAMERON FINANCIAL CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion compares the financial condition of Cameron
Financial Corporation, the "Company", and its wholly owned subsidiary, The
Cameron Savings & Loan Association, F.A., the "Association", at December
31, 1997 to its fiscal year ended September 30, 1997, and the results of
operations for the three months ended December 31, 1997 with the three
months ended December 31, 1996. This discussion should be read in
conjunction with the interim financial statements and notes which are
included herein.
GENERAL
The Company 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 Company consists
primarily of the business of the Association.
The Association 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, Dekalb County, three full service branch offices
located in Cameron, Clinton County, Maryville, Nodaway County, and Mound
City, Holt County, and a loan production office located in Liberty, Clay
County, Missouri. The branch office in Clinton County was closed effective
February 1, 1998. OTS approval has been received to open a full service
branch office in Liberty. The loan production office will be closed upon
the opening of the branch office. 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
and Federal Home Loan Bank advances. 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 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, the level
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 decreased 0.6%, or $1,251,000, to $211,253,000 at December 31,
1997 from $212,504,000 at September 30, 1997. Stockholders' equity
increased $624,000 or 1.4% to $45,291,000 at December 31, 1997 compared to
$44,667,000 at September 30, 1997. Cash, investment securities and
certificates of deposits in other financial institutions decreased 17.3%,
or $4,210,000 to $20,171,000 at December 31, 1997 from $24,381,000 at
September 30, 1997. Loans receivable, net, increased 1.2%, or $2,091,000,
to $178,881,000 at December 31, 1997 from $176,790,000 at September 30,
1997. Real estate loan growth in this time period was $2,659,000. Office
property and equipment increased $507,000 to $6,913,000 at December 31,
1997 from $6,406,000 at September 30, 1997, as a result of payment of final
bills for construction of the new home office building in Cameron and the
start of construction of the new branch office in Liberty, Missouri. The
new home office opened June 23, 1997. Construction costs for the Liberty
branch office are estimated at $1.0 million. Completion of the office
should occur in mid 1998 with funds expected to be provided by normal
operations.
<PAGE>
The following table sets forth certain information regarding the
composition of the Association's loan portfolio.
<TABLE>
<CAPTION>
December 31, September 30,
1997 1997
<S> <C> <C>
One- to four family $124,782,000 $123,856,000
Multifamily 4,231,000 4,226,000
Commercial real estate 3,330,000 3,403,000
Land 5,849,000 6,000,000
Development 5,117,000 2,257,000
Construction (1) 50,540,000 51,447,000
Consumer loans 8,702,000 8,709,000
Total Loans Receivable 202,551,000 199,898,000
Less:
Deferred loan fees, net 806,000 805,000
Loans in process 21,159,000 20,679,000
Allowance for loan losses 1,705,000 1,624,000
Net Loans Receivable $178,881,000 $176,790,000
(1) Speculative construction $37,674,000 $40,200,000
Contract and permanent
construction $12,866,000 $11,200,000
Total $50,540,000 $51,400,000
</TABLE>
During the three months ended December 31, 1997, development loans
increased by $2,803,000 to $5,117,000, and permanent 1-4 family loans
increased by $926,000 to $124,782,000. Construction loans decreased by
$907,000 to $50,540,000.
Strong deposit growth has continued for the Association. Deposits were
$131,065,000 at December 31, 1997, an increase of $2,294,000, or 1.8% from
$128,771,000 at September 30, 1997. That is the second largest quarterly
growth in deposits since the initial conversion to stock in March 1995.
The majority of the growth is attributed to the opening of the new home
office. Competition from other financial and non-financial entities will
continue to impact savings growth. The Association offers competitive
interest rates on its deposit products.
A $3,000,000 FHLB advance matured and was repaid in the quarter ended
December 31, 1997. In January 1998, the Association borrowed an additional
$8.0 million in FHLB advances. The advance has a fixed rate of 5.42% and
a ten year maturity with quarterly call provisions after one year.
At December 31, 1997 FHLB advances and certificates of deposit represented
19.8% and 66.0% of interest-bearing liabilities, respectively. At
September 30, 1997, they represented 21.5% and 64.9% of interest-bearing
liabilities respectively.
RESULTS OF OPERATIONS
Net Earnings: Earnings per share decreased $0.02 to $0.22 for the quarter
ended December 31, 1997, compared to the quarter ended December 31, 1996.
Net earnings decreased $109,000, or 16.9%, to $535,000 for the quarter
ended December 31, 1997, compared to $644,000 for the quarter ended
December 31, 1996. Increases in interest income and non-interest income
and a decrease in the provisions for loan losses and income taxes were
offset by increases in interest expense and non-interest expenses.
Net Interest Income: Net interest income decreased $79,000, or 4.0%, to
$1,891,000 for the quarter ended December 31, 1997, compared with
$1,970,000 for the quarter ended December 31, 1996. Most of the decrease
was due to the increase of interest bearing liabilities exceeding the
increase in interest earning assets. As a result, the net interest margin
decreased to 3.79% for the three months ended December 31, 1997 compared
to 4.26% at December 31, 1996. Interest earning assets averaged 123.28%
of interest bearing liabilities for the three months ended December 31,
1997 compared to 131.78% for the comparable period in 1996 ass a result of
increases in fixed assets. The average spread between interest earning
assets and interest bearing liabilities decreased to 2.65% for the three
months ended December 31, 1997, compared to 2.73% for the same period in
1996. Most of the decrease in interest rate spread was due to average
rates paid on interest bearing liabilities increasing more than average
rates on interest earning assets.
Interest Income: Interest income increased by $349,000, or 9.1%, for the
quarter ended December 31, 1997, to $4,189,000 from $3,840,000 for the
quarter ended December 31, 1996. The increase was primarily due to
increased interest earning assets and slightly higher average rates on
those assets.
Interest Expense: Interest expense increased $428,000, or 22.9%, to
$2,298,000 for the quarter ended December 31, 1997, compared to $1,870,000
for the comparable period in 1996. The increase is a result of increases
in savings deposits of $7.0 million or 5.6% from $124.1 million at December
31, 1996 to $131.1 million at December 31, 1997 and increases of FHLB
advances of $14.0 million from $18.3 million at December 31, 1996 to $32.3
million at December 31, 1997 and increased rates on interest-bearing
liabilities. The Association repaid $3.0 million from the Federal Home
Loan Bank of Des Moines during the quarter ended December 31, 1997.
Provision for Loan Losses: The provision for loan losses was $83,000 for
the quarter ended December 31, 1997, compared to $189,000 for the same
period in 1996. The decrease was primarily due to fewer loan originations
in the quarter ended December 31, 1997 compared to the quarter ended
December 31, 1996. The allowance for loan losses is reviewed and adjusted
monthly by management based on the size and composition or mix of the gross
loan portfolio. Various percentages are applied to the different types of
loans in the portfolio with the highest requirement assigned to the loans
with the greatest inherent risk. The provision will vary based on
increases or decreases in the total loan portfolio and changes in the
composition or mix of the portfolio. As of December 31, 1997, the
allowance for loan losses was $1,705,000, or .84% of total loans receivable
and 91.27% of total nonperforming loans. Charge-offs were $4,000 and
$2,000 for the quarters ended December 31, 1997 and 1996, respectively.
<PAGE>
A reconciliation of the Association's allowance for loan losses is
summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended Decemb
1997 1996
Balance at beginning
<S> <C> <C>
of period $1,624,000 $1,353,000
Provision 83,000 189,000
Charge-offs (2,000) (4,000)
Recoveries - -
Balance at end of period $1,705,000 $1,538,000
</TABLE>
<PAGE>
Noninterest Income: Noninterest income increased to $74,000 for the
quarter ended December 31, 1997 from $46,000 for the comparable period in
1996. Loan fees and deposit service charges increased $9,000 for the three
months ended December 31, 1997 compared to the same period in 1996, due
primarily to increased deposit accounts with monthly charges and income
from ATM and debit card transactions. Other income increased $19,000 in
the quarter ended December 31, 1997 compared to the same period in 1996 due
primarily to increased profit on the sale of loans. Profits on the sale
of loans totaled $1,000 in the quarter ended December 31, 1996 compared to
$19,000 in the quarter ended December 31, 1997.
Noninterest Expense: Noninterest expense increased $241,000 to $1,031,000
for the quarter ended December 31, 1997 from $790,000 for the same period
in 1996. Personnel expenses increased $145,000 in 1997 compared to 1996.
Cash compensation increased $73,000 for the current quarter. The
Association had 57 full-time equivalent employees at December 31, 1997
compared to 46 at December 31, 1996. Most of the staffing increase is due
to the opening of the new home office in Cameron with its extended hours.
Decreased loan originations in the quarter ended December 31, 1997 compared
to the quarter ended December 31, 1996, resulted in $26,000 less costs
deferred in accordance with FAS 91 for the current quarter. Payroll taxes
and other benefits increased $14,000 due to the increased number of
employees. ESOP expenses were $28,000 higher in the quarter ended December
31, 1997 compared to the same period in 1996 due to higher average prices
of the Company's common stock in the current quarter.
Occupancy expense increased $99,000 to $158,000 for the quarter ended
December 31, 1997 compared to the quarter ended December 31, 1996 due to
increased real estate taxes and depreciation expenses for the new home
office building which was opened in June 1997 and increased expenses for
office equipment, computer upgrades and increased depreciation expense for
the new equipment.
Federal insurance premiums decreased $36,000 to $20,000 for the quarter
ended December 31, 1997 compared to the quarter ended December 31, 1996 due
to decreased SAIF premiums after the special one-time assessment in
September 1996. Advertising expenses increased $10,000 to $50,000 for the
quarter ended December 31, 1997 compared to the same period in 1996 due to
increased advertising for new deposit products. Other operating expenses
increased $7,000 to $155,000 for the quarter ended December 31, 1997
compared to the quarter ended December 31, 1996. Increases in office
supplies and telephone expense offset decreases in postage and other
expense.
Income Taxes: Income tax expense decreased $77,000 to $316,000 for the
quarter ended December 31, 1997, compared to $393,000 for the same period
in 1996, primarily due to a decrease of $186,000 in pre-tax income for the
comparable periods. The effective tax rate was 37.1% and 37.9% for the
quarters ended December 31, 1997 and 1996, respectively.
Asset and Liability Management - Interest Rate Sensitivity
There has not been a material change in the Association's interest rate
sensitivity position or market risk position in the quarter ended December
31, 1997 compared to the year ended September 30, 1997.
At December 31, 1997, the Company had a cumulative negative one-year gap
of $5.3 million, or 2.51%, compared with $4.0 million, or 1.9%, at
September 30, 1997.
The Year 2000 issue
The Company utilizes and is dependent upon data processing systems and
software to conduct its business. The data processing systems and software
include those developed and maintained by the Company's data processor and
purchased software run on in-house networks.
In 1997, the Company initiated a review and assessment of all hardware and
software to confirm it will function properly in the year 2000. The
majority of the vendors that have been contacted have indicated that their
hardware and\or software will be Year 2000 compliant by December 31, 1998.
This will allow time for the testing for compliance. While there may be
some expense incurred in the next two years, it is not expected to have a
material effect on the Company's consolidated financial statements.
<PAGE>
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>
<CAPTION>
December 31,September 30,
1997 1997
(Dollars in Thousands)
Non-Accruing Loans:
<S> <C> <C>
One- to four-family $610 $262
Multi-family -- --
Commercial -- --
Land -- --
Construction -- 110
Consumer -- --
Total non-accuring loans 610 372
Accruing loans delinquent 90 days or more(1)
One- to four-family 720 708
Multi-family -- --
Commercial -- --
Land -- --
Construction 402 --
Consumer 136 88
Total accruing loans delinquent
90 days or more 1,258 796
Total non-performing loans 1,868 1,168
Foreclosed Assets:
One- to four-family 84 --
Multi-family -- --
Commercial -- --
Land -- --
Construction 111 --
Consumer 29 12
Total foreclosed assets 224 12
Total non-performing assets $2,092 $1,180
Total classified assets $13,402 $10,754
Total non-performing loans as a
percentage of loans receivable 0.92% 0.58%
Total non-performing assets as a
percentage of total assets 0.99% 0.56%
</TABLE>
_________________
(1) These loans are delinquent 90 days or more as to principal but not as to
interest. This can occur when the Association receives a partial
payment from a borrower which is first applied to interest due.
Non-performing loans increased $700,000, or 59.9% to $1,868,000 at December
31, 1997 from $1,168,000 at September 30, 1996. Classified assets
increased 24.62% to $13,402,000 at December 31, 1997 from $10,754,000 at
September 30, 1997, primarily because of the increase in speculative
construction loans that were not paid off in their initial one year term,
increased repossessed assets and an increase in nonaccruing loans. At
December 31, 1997, there was a total of $6.8 million in speculative
construction loans not paid off in their initial term compared to $5.9
million at September 30, 1997. Twenty-six speculative construction loans
were delinquent more than thirty days as to interest at December 31, 1997.
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, 1997:
<TABLE>
<CAPTION>
Actual Required Excess
Amount/Percent Amount/Percent Amount/Percent
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Tangible $34,272 16.89% $3,043 1.50% $31,229 15.39%
Core Leverage
Capital 34,272 16.89% 6,086 3.00% 28,186 13.89%
Risk-Based
Capital 35,953 25.56% 11,255 8.00% 24,698 17.56%
</TABLE>
<PAGE>
<PAGE>
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 4% of net
withdrawable savings deposits, less withdrawable deposits maturing in more
than one year, 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, 1997
and September 30, 1997 were 5.89% and 8.97% 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. Due to increased savings deposits and decreased loan
demand during the quarter ended December 31, 1997, the Association repaid
a $3.0 million FHLB advance. The Association borrowed an $8.0 million
FHLB advance in January 1998. The advance has a fixed interest rate of
5.42% and is due in 10 years, subject to call provisions after one year.
Certificates of deposits were 82.2% of total savings and 66.0% of total
interest-bearing liabilities at December 31, 1997 compared to 82.7% and
64.9% respectively at September 30, 1997.
Several bills have been introduced in the current Congress that would
eliminate the federal thrift charter and the OTS. The bills would require
that all federal savings associations convert to national banks or state
depository institutions by specified dates and would treat all state
savings associations as state banks for purposes of federal banking laws.
Subject to a narrow grandfathering provision, all savings and loan holding
companies would become subject to the same regulation and activities
restrictions as bank holding companies under the pending legislative
proposals. The legislative proposals would also abolish the OTS and
transfer its functions to the federal bank regulators with respect to the
institutions and to the Board of Governors of the Federal Reserve System
with respect to the regulation of holding companies. The Association is
unable to predict whether the legislation will be enacted or, given such
uncertainty, determine the extent to which the legislation, if enacted,
would affect its business. The Association is also unable to predict
whether the SAIF and BIF will eventually be merged. <PAGE>
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
Financial Data Schedule; EX-27
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 13, 1998 /s/ David G. Just
David G. Just, President and Chief
Executive Officer (Duly Authorized
Officer)
Date: February 13, 1998 /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-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 525,000
<INT-BEARING-DEPOSITS> 3,773,000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 15,872,000
<INVESTMENTS-MARKET> 15,943,000
<LOANS> 180,586,000
<ALLOWANCE> 1,705,000
<TOTAL-ASSETS> 211,253,000
<DEPOSITS> 131,065,000
<SHORT-TERM> 32,250,000
<LIABILITIES-OTHER> 2,647,000
<LONG-TERM> 0
0
0
<COMMON> 30,000
<OTHER-SE> 45,261,000
<TOTAL-LIABILITIES-AND-EQUITY> 211,253,000
<INTEREST-LOAN> 3,823,000
<INTEREST-INVEST> 218,000
<INTEREST-OTHER> 148,000
<INTEREST-TOTAL> 4,189,000
<INTEREST-DEPOSIT> 1,786,000
<INTEREST-EXPENSE> 2,298,000
<INTEREST-INCOME-NET> 1,891,000
<LOAN-LOSSES> 83,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,031,000
<INCOME-PRETAX> 851,000
<INCOME-PRE-EXTRAORDINARY> 851,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 535,000
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
<YIELD-ACTUAL> 8.26
<LOANS-NON> 610,000
<LOANS-PAST> 1,258,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 11,310,000
<ALLOWANCE-OPEN> 1,624,000
<CHARGE-OFFS> 2,000
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,705,000
<ALLOWANCE-DOMESTIC> 1,705,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
