<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------
Date of Report (Date of Earliest Event Reported): December 31, 1996
-----------------
PIEDMONT BANCORP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
United States 001-14070 56-1936232
- --------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or Identification No.)
organization)
260 South Churton Street, P.O. Box 1000, Hillsborough, North Carolina 27278
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (919) 732-2143
--------------
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
PAGE 1 OF 6
<PAGE>
Item 5. Other Events.
- ------ ------------
During the fiscal quarter ended December 31, 1996, Piedmont Bancorp,
Inc. (the "Company") recorded compensation expense of $1,496,000 on a
consolidated basis. The compensation expense was associated with the release and
allocation to participants under the Hillsborough Savings Bank, Inc., SSB
Employee Stock Ownership Plan (the "ESOP") of approximately 126,000 shares of
common stock of the Company. This release and allocation of shares under the
ESOP was made possible by the $7.00 special dividend paid on the Company's
common stock on December 6, 1996 and management's decision to use the special
dividends paid on the unallocated shares of the Company's common stock held by
the ESOP to pre-pay the ESOP loan from the Company to the ESOP.
In addition, during the quarter ended December 31, 1996, the Company, on
a consolidated basis, recorded a provision for loan losses of $597,000. This
provision primarily resulted from the charge off of approximately $510,000 in
unsecured loans to a single borrower. No further charge offs related to this
borrower are anticipated at this time.
These expenses, in conjunction with the $487,000 Savings Association
Insurance Fund recapitalization assessment reported in the Company's Form 10-Q
for the quarter ended September 30, 1996, are expected to have a significant
negative impact on the Company's net income for the year ending June 30, 1997.
The Company's press release issued on January 21, 1997 further
describing these non-recurring items is attached as Exhibit (99) hereto and
incorporated herein by reference.
SIGNATURE
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 hereunto duly authorized.
PIEDMONT BANCORP, INC.
Date: January 30, 1997 By: /s/ D. Tyson Clayton
------------------- ----------------------------------------
D. Tyson Clayton
President and Chief Executive Officer
PAGE 2 OF 6
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Sequential Page No.
- ----------- ----------- -------------------
(99) Piedmont Bancorp, Inc. Press 4
Release dated January 21, 1997
PAGE 3 OF 6
<PAGE>
News Release
January 21, 1997
Contact: Gina B. Riggins, Treasurer
(919) 732-2143
PIEDMONT BANCORP, INC.
Reports Second Quarter Results
HILLSBOROUGH, N.C. - Piedmont Bancorp, Inc., the parent holding company for
Hillsborough Savings Bank, Inc., SSB, announced a consolidated net loss of
$1,431,000, or $0.54 per share for the quarter ended December 31, 1996. The
decline in earnings is largely due to non-recurring items.
The Company recorded $1,496,000 of compensation expense associated with the
release and allocation of approximately 126,000 shares of common stock of the
Company to participants of the Hillsborough Savings Bank, Inc., SSB Employee
Stock Ownership Plan (the "ESOP"). This release and allocation of shares under
the ESOP was mainly attributable to the $7.00 special dividend paid on the
Company's stock on December 6, 1996 and management's decision to use the
special dividends paid on the unallocated shares of the Company's common stock
held by the ESOP to pre-pay the ESOP loan from the Company to the ESOP. In
addition, during the quarter ended December 31, 1996, the Company recorded a
provision for loan losses of $597,000 which resulted primarily from the charge
off of approximately $510,000 in unsecured loans to a single borrower. No
further charge offs related to this borrower are anticipated at this time.
Finally, during the quarter, the Company recorded losses of $106,000 on the sale
of investments which were sold to fund the special dividend. Without the effect
of these non-recurring items, net income for the quarter would have been
approximately $319,000 or $0.12 per share. Earnings for the quarter ended
December 31, 1995 were $404,000.
Consolidated net losses totalled $1,248,000, or $0.48 per share, for the six
months ended December 31, 1996. In addition to the non-recurring items discussed
above, earnings for the first six months of fiscal 1997 were affected by the
$487,000 SAIF-recapitalization assessment the Company recorded during its first
quarter. Without these non-recurring items, net income for the six months period
would have been approximately $815,000 or $0.32 per share. Earnings for the six
months ended December 31, 1995 were $711,000.
PAGE 4 OF 6
<PAGE>
Piedmont Bancorp Inc. Reports Second Quarter Results
Page 2
January 21, 1997
The Company's balance sheet was significantly affected by the payment of the
special dividend. Total assets decreased to $125.1 million at December 31, 1996
from $128.7 million at June 30, 1996. Investment securities decreased by $14.6
million as securities were sold to fund the special dividend. Loans increased by
$4.7 million to $95.9 million.
Deposits increased by $7.6 million since June 30, 1996 to $81.0 million at
December 31, 1996. The $7.0 million in other borrowings represents a short-term
loan the holding company obtained in order to assist in funding the special
dividend. This borrowing was repaid on January 2, 1997 by way of a dividend from
the bank to the holding company.
Stockholders' equity totalled $19.6 million at December 31, 1996, down from
$37.1 at June 30, 1996 reflecting the special dividend paid on December 6, 1996.
Piedmont Bancorp Inc.'s shares are traded on the American Stock Exchange under
the symbol "PDB". Hillsborough is located in the Raleigh-Durham area of North
Carolina.
- --------------------------------------------------------------------------------
Piedmont Bancorp, Inc.
Unaudited Financial Highlights
<TABLE>
<CAPTION>
Three Months Ended December 31,
-------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Net earnings (loss) $ (1,431,000) $ 404,000
Earnings (loss) per share $ (0.54) $ 0.05 (1)
Weighted average shares outstanding 2,653,254 2,484,308 (1)
Excluding non-recurring items
- -----------------------------
Net earnings $ 319,000 (2)
Earnings per share $ 0.12
Weighted average shares outstanding 2,562,272
<CAPTION>
Six Months Ended December 31,
-----------------------------
1996 1995
----------- ---------
<S> <C> <C>
Net earnings (loss) $ (1,248,000) $ 711,000
Earnings (loss) per share $ (0.48) $ 0.05 (1)
Weighted average shares outstanding 2,605,496 2,484,308 (1)
Excluding non-recurring items
- -----------------------------
Net earnings excluding
non-recurring items $ 815,000 (2)
Earnings per share excluding
non-recurring items $ 0.32
Weighted average shares outstanding 2,560,001
</TABLE>
Page 5 of 6
<PAGE>
Piedmont Bancorp Inc. Reports Second Quarter Results
Page 3
January 21, 1997
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ ------------
<S> <C> <C>
Total assets $ 125,086,000 $ 128,711,000
Loans receivable 95,877,000 91,187,000
Deposits 80,952,000 73,361,000
FHLB Advances 16,500,000 17,250,000
Other borrowings 7,000,000 -
Total stockholders' equity 19,631,000 37,050,000
Book value per share $ 7.14 $ 14.01
Stockholder's equity to assets ratio 15.69% 28.78%
Nonperforming assets to total assets 0.62% 0.59%
</TABLE>
- --------------------------------------------------------------------------------
(1) Earnings per share and weighted average shares outstanding for the three and
six months periods ended December 31, 1995 includes only net income and shares
outstanding subsequent to the conversion on December 7, 1995.
(2) Information not presented due to incomparability of financial information
associated with the mutual to stock conversion which occurred December 7, 1995.
Page 6 of 6
