UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending 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 0-25814
N S & L Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Missouri 43-1709446
- ------------------------------------- -------------------
(State or other jurisdiction of I.R.S. (I.R.S. Employer
Employer Incorporation or organization) Identification No.)
P.O. Box 369, Neosho, MO 64850
(Address of principal executive offices) (Zip Code)
(417) 451-0429
(Registrant's telephone number)
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 twelve 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 February 6, 1997, there were 736,082 shares of the Registrant's Common
Stock, $.01 par value per share, outstanding.
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N S & L BANCORP, INC. AND SUBSIDIARY
FORM 10-QSB
December 31, 1996
INDEX PAGE
----- ----
PART I-FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) 1
CONSOLIDATED STATEMENTS OF INCOME (unaudited) 2-3
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) 4-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 6-9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 14
ITEM 2. CHANGES IN SECURITIES 14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS 14
ITEM 5. OTHER INFORMATION 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14
SIGNATURES
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N S & L BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
- --------------------------------------------------------------------
(Unaudited)
December 31, September 30,
1996 1996
-------- --------
ASSETS (Dollars in thousands)
Cash and cash equivalents, including
interest-bearing accounts of $3,308 at
December 31 and $8,202 at September 30 $ 3,845 $ 8,853
Certificates of deposit 2,389 2,598
Investment securities available-for-sale, at fair value 255 925
Investment securities held-to-maturity
(estimated market value of $12,877 at December 31
and $11,480 at September 30) 13,370 11,554
Mortgage-backed securities held-to-maturity
(estimated market value of $5,578 at December 31
and $5,448 at September 30) 5,425 5,342
Loans receivable, net (reserves for loan losses of
$42 at December 31 and $41 at September 30) 31,602 31,051
Accrued interest receivable 430 391
Property and equipment, less accumulated depreciation 863 868
Other assets 215 225
-------- --------
Total assets $ 58,394 $ 61,807
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Customer deposits $ 42,392 $ 48,444
Advances from FHLB 3,000 --
Advances from borrowers for taxes and insurance 118 314
Income taxes payable - current 47 22
Deferred income taxes 324 291
Other liabilities 250 558
-------- --------
Total liabilities 46,131 49,629
-------- --------
Commitments and contingencies -- --
Preferred stock, $.01 par value; 2,000,000 shares
authorized, none issued -- --
Common stock, $.01 par value; 8,000,000 shares
authorized, 887,814 issued and 759,082 outstanding
at December 31 and September 30, 1996 9 9
Paid-in capital 8,422 8,416
Retained earnings - substantially restricted 6,392 6,363
Treasury Stock - at cost; 128,732 shares at
December 31 and September 30, 1996 (1,676) (1,676)
Unearned compensation (915) (953)
Unrealized gain on investment securities available-
for-sale, net of applicable deferred income taxes 31 19
-------- --------
Total stockholders' equity 12,263 12,178
-------- --------
Total liabilities and stockholders' equity $ 58,394 $ 61,807
======== ========
See accompanying notes to Consolidated Financial Statements.
1
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N S & L BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
-----------------------------------------------
(Unaudited)
Quarter Ended December 31,
1996 1995
(Dollars in thousands)
-------- --------
Interest Income:
Loans receivable $ 571 $ 499
Investment securities 217 229
Mortgage-backed and related securities 97 108
Other interest-earning assets 78 103
-------- --------
Total interest income 963 939
Interest Expense:
Customer deposits 489 457
Borrowed funds 25 --
-------- --------
Total interest expense 514 457
-------- --------
Net interest income 449 482
Provision for loan losses 1 --
-------- --------
Net interest income after provision for loan losses 448 482
-------- --------
Noninterest Income:
Gain on sale of investments 24 20
Banking service charges and fees 41 37
Loan late charges 2 2
Other 4 3
-------- --------
Total noninterest income 71 62
-------- --------
Noninterest Expense:
Compensation and employee benefits 177 154
Occupancy and equipment 35 35
Deposit insurance premium 23 24
Data processing 23 23
Printing, postage, stationery and supplies 16 15
Professional fees 16 23
Other 47 45
-------- --------
Total noninterest expense 337 319
-------- --------
Income before taxes 182 225
Income Taxes 58 74
-------- --------
See accompanying notes to Consolidated Financial Statements.
2
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N S & L BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (Continued)
-------------------------------------------------------------
(Unaudited)
Quarter Ended December 31,
1996 1995
(Dollars in thousands)
-------- --------
Net income $ 124 $ 151
======== ========
Earnings per share $ .16 $ .19
======== ========
Dividends per share $ .125 $ .10
======== ========
See accompanying notes to Consolidated Financial Statements.
3
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N S & L BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------
Three Months Ended December 31, 1996 and 1995
(Unaudited)
1996 1995
(Dollars in thousands)
-------- --------
Cash flows from operating activities:
Net income $ 124 $ 151
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 21 20
Premiums and discounts on mortgage-backed
securities and investment securities (26) (27)
Loss on loans, net of recoveries 1 --
Income reinvested FHLB stock -- (8)
Release of ESOP shares 24 15
Vesting of MRDP shares 20 --
Gain on sale of investments (24) (20)
Net change in operating accounts:
Accrued interest receivable (39) 17
Other assets 10 30
Other liabilities (308) (25)
Income taxes payable - deferred 25 (13)
Income taxes payable - current 25 96
-------- --------
Net cash from (used in) operating activities (147) 236
-------- --------
Cash flows from investing activities:
Purchase of investment securities held-to-maturity (1,994) (4,288)
Purchase of investment securities available-for-sale -- (370)
Proceeds from maturity of investment securities
held-to-maturity 200 2,358
Proceeds from maturity of investment securities
available-for-sale 500 --
Proceeds from sale of investment securities
available-for-sale 214 105
Net change in certificates of deposit 209 840
Net change in loans receivable (552) (1,948)
Proceeds from principal payments and maturities
of mortgage-backed securities held-to-maturity 236 204
Purchase of mortgage-backed securities held-to-maturity (315) (76)
Purchases of property and equipment (16) (2)
-------- --------
Net cash (used in) investing activities $ (1,518) $ (3,177)
-------- --------
See accompanying notes to Consolidated Financial Statements.
4
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N S & L BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
----------------------------------------------------------------------
Three Months Ended December 31, 1996 and 1995
(Unaudited)
1996 1995
(Dollars in thousands)
-------- --------
Cash flows from financing activities:
Net change in demand deposits, savings
accounts, and certificates of deposit $ (6,052) $ (2,148)
Net decrease in mortgage escrow funds (196) (191)
Cash advances from FHLB 3,000 --
Cash dividends paid (95) (86)
-------- --------
Net cash used in financing activities (3,343) (2,425)
-------- --------
Net decrease in cash and cash equivalents (5,008) (5,366)
Cash and cash equivalents - beginning of period 8,853 10,240
-------- --------
Cash and cash equivalents - end of period $ 3,845 $ 4,874
======== ========
See accompanying notes to Consolidated Financial Statements.
5
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N S & L BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE A - Basis of Presentation
The consolidated interim financial statements as of December 31, 1996
included in this report have been prepared by the Registrant without audit.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation are reflected in the
December 31, 1996 interim financial statements. The results of operations for
the periods ended December 31, 1996 and 1995 are not necessarily indicative of
the operating results for the full year. The September 30, 1996 Consolidated
Statement of Financial Condition presented with the interim financial
statements was audited and received an unqualified opinion.
NOTE B - Earnings per Share
Earnings per share are presented based on the average shares issued and
outstanding during the periods. Common stock equivalents, composed of stock
options outstanding, are not included in the calculations since the effect is
immaterial to the periods presented.
NOTE C - Employee Stock Ownership Plan
In connection with the conversion from a federally chartered mutual savings
and loan to a federally charted capital stock savings and loan association,
the Association established an ESOP for the exclusive benefit of participating
employees (all salaried employees who have completed at least 1000 hours of
service in a twelve-month period and have attained the age of 21). The ESOP
borrowed funds from the Company in an amount sufficient to purchase 68,516
shares (8% of the Common Stock issued in the Conversion). The loan is secured
by the shares purchased and will be repaid by the ESOP with funds from
contributions made by the Association, dividends received by the ESOP and any
other earnings on ESOP assets. The Association presently expects to
contribute approximately $106,762 including interest annually to the ESOP.
Contributions will be applied to repay interest on the loan first, then the
remainder will be applied to principal. The loan is expected to be repaid
in approximately nine years.
Shares purchased with the loan proceeds are held in a suspense account for
allocation among participants as the loan is repaid. Contributions to the
ESOP and shares released from the suspense account are allocated among
participants in proportion to their compensation relative to total
compensation of all active participants. Benefits generally become 25% vested
after each year of credited service beyond one year. Vesting is accelerated
upon retirement, death or disability of the participant. Forfeitures are
returned to the Association or reallocated to other participants to reduce
future funding costs. Benefits may be payable upon retirement, death,
disability or separation from service. Since the Association's annual
contributions are discretionary, benefits payable under the ESOP cannot be
estimated.
The Company accounts for its ESOP in accordance with Statement of Position
93-6, Employers Accounting for Employee Stock Ownership Plans. Accordingly,
the debt of the ESOP is eliminated in consolidation and the shares pledged as
collateral are reported as unearned ESOP shares in the consolidated balance
sheets. Contributions to the ESOP shall be sufficient to pay principal and
interest currently due under the loan agreement. As shares are committed to
be released from collateral, the Company reports compensation expense equal to
the average market price of the shares for the respective period, and the
shares become outstanding for earnings per share computations.
6
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N S & L BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)
NOTE C - Employee Stock Ownership Plan (continued)
Dividends on allocated ESOP shares are recorded as a reduction of retained
earnings: dividends on unallocated ESOP shares are recorded as a reduction of
debt and accrued interest. ESOP compensation expense was $23,724 and $15,383
for the three months ended December 31, 1996 and 1995 respectively.
A summary of ESOP shares at December 31, 1996 is as follows:
Shares allocated 9,004
Shares committed for release 1,713
Unreleased shares 57,799
------
Total 68,516
======
Fair value of unreleased shares $787,511
NOTE D - Accounting Changes
On October 1, 1994, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which established three
classifications of investment securities: held-to-maturity, trading and
available-for-sale. Trading securities are acquired principally for the
purpose of near term sales. Such securities are reported at fair value and
unrealized gains and losses are included in income. Securities which are
designated as held-to-maturity are designated as such because the investor has
the ability and the intent to hold these securities to maturity. Such
securities are reported at amortized cost. All other securities are designated
as available-for-sale, a designation which provides the investor with certain
flexibility in managing its investment portfolio. Such securities are
reported at fair value: net unrealized gains and losses are excluded from
income and reported net of applicable income taxes as a separate component of
stockholders' equity.
In adopting SFAS No. 115, the Company modified its accounting policies and
designated its securities in accordance with the three classifications. The
Company's adoption of SFAS No. 115 resulted in the classification of all
securities to the held-to-maturity portfolio. Purchases since the adoption of
SFAS No. 115 have resulted in the designation of some securities as available-
for-sale. At December 31, 1996, the Company had investment securities
designated as available-for-sale with a face value of $205,000.
Effective June 7, 1995, the Company adopted Statement of Position ("SOP")
93-6, "Employers' Accounting for Employee Stock Ownership Plans". SOP 93-6
applies to shares acquired by employee stock ownership plans after December
31, 1992 but not yet committed to be released as of the beginning of the year
SOP 93-6 is adopted. SOP 93-6 changes the measure of compensation expense
recorded by employers for leveraged employee stock ownership plans from the
cost of the ESOP shares to the fair value of the ESOP shares.
7
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N S & L BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)
NOTE D - Accounting Changes (continued)
Under SOP 93-6, the Company recognizes the compensation cost equal to the
fair value of the ESOP shares during the periods in which they become
committed to be released. To the extent that fair value of the Association's
employee stock ownership plan share differ from the cost of such shares, this
differential will be charged or credited to equity. Employers with internally
leveraged employee stock ownership plans such as the Company will not report
the loans receivable from the ESOP as an asset and will not report the ESOP
debt from the employer as a liability.
Effective October 1, 1995, the Association implemented SFAS No. 114,
"Accounting by creditors for impairment of a Loan". This statement requires a
lender to consider a loan to be impaired if the lender believes it is probable
it will be unable to collect all principal and interest due according to the
contractual terms of the loan. If a loan is impaired, the lender will be
required to record a loan valuation allowance equal to the present value of
the estimated future cash flows discounted at the loan's effective rate. Also
implemented was SFAS No. 118, "accounting for Creditors for Impairment of a
Loan - Income Recognition and Disclosures," which amends SFAS No. 114 to allow
a creditor to use existing methods for recognizing interest income on impaired
loans and eliminates the income recognition provisions in SFAS No. 114.
NOTE E - Management Recognition and Development Plan and Stock Option Plan
The 1995 Management Recognition and Development Plan ("MRDP") was adopted on
January 17, 1996. The MRDP is administered by the Board of Directors of the
Bank. Collectively, the Board issued 34,258 shares of the Bank's common
stock, of which 31,365 shares have been awarded and will vest over a five-year
period beginning on January 17, 1996. MRDP compensation expense was $20,387
for the three months ended December 31, 1996.
Also adopted on January 17, 1996 was a Stock Option plan whereby 85,645
shares of the Bank's common stock have been reserved to be awarded to certain
officers, employees and directors. The Stock Option Plan is administered by a
committee of the Board of Directors All options expire no later than ten
years from the date of grant.
NOTE G - Stock Repurchase Program
The Company received approval for another stock repurchase program on
January 17, 1997 to repurchase 10% of the Corporation's outstanding common
stock, or approximately 75,908 shares. As of February 6, 1997, 22,000 shares
have been repurchased at a cost of $336,380.
8
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N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion and analysis included herein covers those material changes in
liquidity and capital resources that have occurred since September 30, 1996,
as well as certain changes in results of operations during the three month
periods ended December 31, 1996 and 1995.
The following should be read in conjunction with the Company's Form 10-KSB
for the year ended September 30, 1996, which contains the audited financial
statements and notes thereto, together with Management's Discussion and
Analysis of Financial Condition and Results of Operations as of September 30,
1996, and for the year then ended. Therefore, only material changes in
financial condition and results of operations are discussed herein.
Changes in Financial Condition
Cash and cash equivalents decreased $5 million during the quarter ended
December 31, 1996. The decrease was primarily from the maturity of $6 million
in short-term customer deposits in October of 1996 and was offset by the
maturity of $200,000 of certificates of deposit and the maturity and sale
of $914,000 of investment securities. Net loans increased during the quarter
by $500,000 to $31.6 million as of December 31, 1996. Investment securities
increased $1.2 million to $13.7 million and certificate of deposits decreased
$200,000 to $2.4 million. Cash advances of $3 million from Federal Home Loan
Bank of Des Moines funded the majority of the loan and investment security
growth.
Nonperforming assets were $56,000 or .1% of total assets at December 31,
1996, compared to $22,000, or .04% of total assets at September 30, 1996.
Nonaccrual loans were $3,000 at September 30 and $1,000 at December 31, 1996.
Comparison of the Three Months ended December 31, 1996 to the Three Months
Ended December 31, 1995
Net Income. Net income was $124,000 for the quarter ended December 31, 1996
compared to $151,000 for the quarter ended December 31, 1995. Net interest
income after provision for loan losses decreased $34,000, noninterest income
increased $9,000 and noninterest expense increased $18,000. Income tax
expense decreased $16,000 due to the decrease in income before income tax.
Net Interest Income. Net interest income of $449,000 for the quarter ended
December 31, 1996 decreased by $34,000, or 7% from $482,000 for the quarter
ended December 31, 1995. Interest income increased $24,000 while interest
expense increased $57,000.
Interest Income. Interest income increased by $24,000 or 2.6%, to $963,000
for the quarter ended December 31, 1996 from $939,000 for the quarter ended
December 31, 1995. Interest income from loans receivable increased $72,000 to
$571,000 for the quarter ended December 31, 1996 from $499,000 for the quarter
ended December 31, 1995. The increase was largely attributable to the
increase in average loans outstanding and partly to interest rate increases on
existing adjustable rate loans. Interest income from investment securities
decreased
9
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N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
by $12,000 to $217,000 for the quarter ended December 31, 1996 from $229,000
for the quarter ended December 31, 1995. This decrease was due to a decrease
in the average balances in investment securities. Interest income from
mortgage-backed securities decreased 11,000 to $97,000 for the quarter ended
December 31, 1996 from $108,000 for the quarter ended December 31, 1995. The
decrease was due to a decrease in the average balances in mortgage-backed
securities. Interest income from other interest-earning assets decreased by
$25,000 to $78,000 for the quarter ended December 31, 1996 from $103,000 for
the quarter ended December 31, 1995. This decrease was primarily due
to a decrease in cash on hand as more funds have been used to finance loan
activity since the period ended December 31, 1995.
Interest Expense. Interest expense of $514,000 for the quarter ended
December 31, 1996 increased $57,000, or 12.5%, from $457,000 for the quarter
ended December 31, 1995. The increase is attributable to an increase in
interest paid on deposits due to a higher average balance in customer deposits
and interest being paid on FHLB advances for the quarter ended December 31,
1996.
Provision for Loan Losses. Loan loss provisions were $1,000 for the quarter
ended December 31, 1996 compared to zero for the quarter ended December 31,
1995. Actual loan losses net of recoveries, were zero for both quarters.
Noninterest Income. Noninterest income of $71,000 for the quarter ended
December 31, 1996 increased $9,000 from $62,000 for the quarter ended December
31, 1995. This increase was primarily due to an increase of $4,000 on the
gain on the sale of investments to $24,000 for the quarter ended December 31,
1996 from $20,000 for the quarter ended December 31, 1995 and an increase of
$4,000 in service charges and other fee income to $41,000 for the quarter
ended December 31, 1996 from $37,000 for the quarter ended December 31, 1995.
Noninterest Expense. Noninterest expense increased $18,000, or 5.6%, to
$337,000 for the quarter ended December 31, 1996 from $319,000 for the quarter
ended December 31, 1995. This increase was largely due to a $23,000 increase
in compensation and employee benefits which is due to the implementation of
the MRDP plan and annual salary increases effective September 30, 1996 and
was offset by a decrease in professional fees of $7,000 to $16,000 for the
period ended December 31, 1996 from $23,000 for the quarter ended December 31,
1995.
Net Interest Margin. Net interest margin decreased to 3.17% for the three
months ended December 31, 1996 form 3.55% for the three months ended December
31, 1995. Income from earning assets increased by $98,000, or 2.6%, between
the two quarters while interest expense increased by $229,000, or 12.5%. The
average earning asset base increased by $2.5 million, or 4.5%. The average
interest-bearing liability base increased by $5.9 million, or 15.1%.
10
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N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Liquidity and Capital Resources
Neosho Savings and Loan's primary sources of funds are deposits, proceeds
from principal and interest payments on loans, mortgage-backed securities,
investment securities and net operating income. While maturities and
scheduled amortization of loans and mortgage-backed securities are a somewhat
predictable source of funds, deposit flows and mortgage prepayments are
greatly influenced by general interest rates, economic conditions and
competition.
Neosho Savings and Loan must maintain an adequate level of liquidity to
ensure availability of sufficient funds to support loan growth and deposit
withdrawals, satisfy financial commitments and to take advantage of investment
opportunities. During fiscal years 1996 and 1995, Neosho Savings and Loan
used its sources of funds primarily to fund loan commitments, pay maturing
savings certificates and deposit withdrawals. At December 31, 1996, Neosho
Savings and Loan had FHLB advances of $3 million that were used to finance
investments in FHLB bonds and to purchase mortgage loans and had approved loan
commitments totaling $157,000 and undisbursed loans in process of $217,000.
Liquid funds necessary for normal daily operations of Neosho Savings and
Loan are maintained in a working checking account and a daily time account
with the Federal Home Loan Bank of Des Moines. It is the Association's
current policy to maintain adequate collected balances in those deposit
accounts to meet daily operating expense, customer withdrawals, and fund loan
demand. Funds received from daily operating activities are deposited, on a
daily basis, in the checking account and transferred, when appropriate, to the
daily time account to enhance income.
Normal daily operating expenses are not expected to significantly change.
Noninterest expense as a percentage of average assets at 2.3% is expected to
remain basically constant. Interest expense on deposits is expected to
gradually decrease as the rates on maturing certificates of deposit are
reinvested at currently slightly lower rates of interest. Overall interest
expense will increase because interest is now being paid on cash advances.
However, those cash advance expenses are being offset as the funds have
been invested at rates higher than the expense incurred by them. Loan
interest income is expected to continue to increase as rates on adjustable-
rate loans continue to gradually rise as those loans reprice at the annual
adjustment dates. Customer deposits are expected to remain stable.
At December 31, 1996, certificates of deposit amounted to $28.1 million, or
67% of Neosho Savings and Loan's total deposits, including $20.4 million of
fixed rate certificates scheduled to mature within twelve months.
Historically, Neosho Savings and Loan has been able to retain a significant
amount of its deposits as they mature. Management believes it has adequate
resources to fund all loan commitments from savings deposits, loan payments
and maturities of investment securities.
11
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N S & L BANCORP, INC. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Office of Thrift Supervision requires a thrift institution to maintain
an average daily balance of liquid assets (cash and eligible investments)
equal to at least 5% of the average daily balance of its net withdrawable
deposits and short-term borrowings. In addition, short-term liquid assets
currently must constitute 1% of the sum of net withdrawable deposit accounts
plus short-term borrowings. Neosho Savings and Loan liquidity ratio was
37.61% at December 31, 1996 and its short-term liquidity ratio at December 31,
1996 was 11.55%. Neosho Savings and Loan consistently maintains liquidity
levels in excess of regulatory requirements, and believes this is an
appropriate strategy for proper asset and liability management.
The Office of Thrift Supervision requires institutions such as the
Association to meet certain tangible, core, and risk-based capital
requirements. Tangible capital generally consists of stockholders'
equity minus certain intangible assets. Core capital general consists of
stockholders' equity. The risk-based capital requirements presently address
risk related to both recorded assets and off-balance sheet commitments and
obligations. The following table summarizes the Association's capital ratios
and the ratios required by federal regulations at December 31, 1996.
Percent of Adjusted
Amount Total Assets
-------- ------------
(Unaudited)
(Dollars in thousands)
Tangible capital $ 8,339 14.7%
Tangible capital requirement 850 1.5
-------- ------
Excess $ 7,489 13.2%
======== ======
Core capital $ 8,339 14.7%
Core capital requirement 1,699 3.0
-------- ------
Excess $ 6,640 11.7%
======== ======
Risk-based capital $ 8,381 38.5%
Risk-based capital requirement 1,742 8.0
-------- ------
Excess $ 6,639 30.5%
======== ======
12
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N S & L BANCORP, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
ITEM 1, LEGAL PROCEEDINGS
Neither the Registrant nor the Association is a party to any material legal
proceedings at this time. From time to time the Association is involved in
various claims and legal actions arising in the ordinary course of business.
ITEM 2, CHANGES IN SECURITIES
Not applicable.
ITEM 3, DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4, SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5, OTHER INFORMATION
None.
ITEM 6, EXHIBITS AND REPORT ON FORM 8-K
None.
13
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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.
N S & L Bancorp, Inc.
Date: February 7, 1997 By:/s/C.R. BUTLER
---------------
C.R. 'Rick' Butler
President
CEO
By:/s/CAROL GUEST
---------------
Carol Guest
Treasurer
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-30-1996
<CASH> 3845000
<INT-BEARING-DEPOSITS> 2389000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 255000
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0
0
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</TABLE>
