-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BrdKIwiDn4+2veJzfAHBl3Gd43U1YHBLCx+X5eUA9w1xp14iYEY4XIkDRUSvlmEX DRVn24uj0Z/IC0D3unK4Vw== /in/edgar/work/0000909654-00-000644/0000909654-00-000644.txt : 20001115 0000909654-00-000644.hdr.sgml : 20001115 ACCESSION NUMBER: 0000909654-00-000644 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LENOX BANCORP INC CENTRAL INDEX KEY: 0001000050 STANDARD INDUSTRIAL CLASSIFICATION: [6036 ] IRS NUMBER: 311445959 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28162 FILM NUMBER: 766189 BUSINESS ADDRESS: STREET 1: 5255 BEECH ST CITY: CINCINNATI STATE: OH ZIP: 45217 BUSINESS PHONE: 5132426900 MAIL ADDRESS: STREET 1: 5255 BEECH STREET CITY: CINCINNATI STATE: OH ZIP: 45217 10QSB 1 0001.txt 1 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 ended September 30, 2000 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 0-28162 LENOX BANCORP, INC. (Exact name of small business issuer as specified in its charter) Ohio 31-1445959 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4730 Montgomery Road, Norwood, Ohio 45212 (Address of principal executive offices) (Zip Code) (513) 531-8655 (Issuer's telephone number) Not Applicable (Former name, former address and former fiscal year, if changes since last report) APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 285,028 shares of common stock, par value $0.01 per share, were outstanding as of November 13, 2000. Transitional Small Business Disclosure Format (check one): Yes No X ---- ----- 2 LENOX BANCORP, INC. FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 2000 INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements-Unaudited Consolidated Balance Sheets at September 30, 2000 and December 31, 1999........................ 3 Consolidated Statements of Income - For the Three and Nine Months Ended September 30, 2000 and 1999........................ 4 Consolidated Statements of Cash Flows - For the Nine Months Ended September 30, 2000 and 1999................... 5 Notes to Unaudited Consolidated Financial Statements............ 6 Item 2. Management's Discussion and Analysis or Plan of Operation....... 7 PART II: OTHER INFORMATION Item 1. Legal Proceedings..............................................12 Item 2. Changes in Securities..........................................12 Item 3. Defaults Upon Senior Securities................................12 Item 4. Submission of Matters to a Vote of Security Holders............12 Item 5. Other Information..............................................12 Item 6. Exhibits and Reports on Form 8-K...............................13 SIGNATURES 2 3
PART I. FINANCIAL INFORMATION LENOX BANCORP, INC. Item 1. FINANCIAL STATEMENTS. LENOX BANCORP, INC. CONSOLIDATED BALANCE SHEETS AT AT SEPTEMBER 30, DECEMBER 31, 2000 1999 --------------- -------------- (UNAUDITED) (DOLLARS IN THOUSANDS) ASSETS Cash and due from banks......................................................... $ 1,115 $ 738 Certificates of deposit......................................................... 97 193 Investment securities - available for sale, at fair value (amortized cost of $2,700 and $2,702 at September 30, 2000 and December 31, 1999)............ 2,566 2,535 Mortgage-backed securities - available for sale, at fair value (amortized cost of $528 and $602 at September 30, 2000 and December 31, 1999)........... 518 588 Collateralized mortgage obligations - available for sale, at fair value (amortized cost of $4,158 and $4,114 at September 30, 2000 and December 31, 1999) 4,051 4,171 -------- --------- Total investment securities.................................................. 7,135 7,294 Loans receivable, net........................................................... 58,529 59,434 Loans held for sale - at lower of cost or market................................ -- 5,611 Accrued interest receivable: Loans.................................................................. 429 361 Mortgage-backed securities............................................. 4 4 Collateralized mortgage obligations.................................... 26 23 Investments and certificates of deposit................................ 36 50 Property and equipment, net..................................................... 1,305 399 Federal Home Loan Bank stock - at cost.......................................... 1,732 1,583 Prepaid expenses and other assets............................................... 517 217 Deferred Federal income tax benefit............................................. -- -- Prepaid federal income taxes.................................................... 20 77 -------- --------- Total assets.................................................. $ 70,945 $ 75,984 ======== ========= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: DEPOSITS: Savings, club and other accounts....................................... $ 7,710 $ 5,129 Money market and NOW accounts.......................................... 4,256 5,050 Certificate accounts................................................... 25,147 29,257 -------- --------- Total deposits................................................ 37,113 39,436 Advances from Federal Home Loan Bank......................................... 28,246 31,139 Advance payments by borrowers for taxes and insurance........................ 144 265 Accrued expenses............................................................. 735 309 Accrued federal income taxes................................................. -- -- Deferred federal income taxes................................................ 3 55 -------- --------- Total liabilities............................................. $ 66,241 $ 71,204 ======== ========= STOCKHOLDERS' EQUITY: Common stock - no par value: 2,000,000 authorized, 425,677 issued and 285,028 outstanding at September 30, 2000 and at December 31, 1999.... $ -- $ -- Additional paid in capital................................................... 3,777 3,776 Retained earnings - substantially restricted................................. 4,073 4,108 Unearned ESOP shares......................................................... (208) (208) Shares acquired for Stock Incentive Plan..................................... (201) (217) Treasury stock 140,649 shares at September 30, 2000 and December 31, 1999.... (2,567) (2,567) Unrealized loss on available for sale securities, net of taxes............... (168) (112) -------- --------- Total stockholders' equity.................................... 4,705 4,780 -------- --------- Total liabilities and stockholders' equity................................... $ 70,945 $ 75,984 ======== =========
3 4
LENOX BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME THREE MONTHS ENDED NINE MONTHS ENDED JUNE 30, SEPTEMBER 30, ----------------------- ----------------------- 2000 1999 2000 1999 ---------- --------- --------- ---------- (UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) INTEREST INCOME AND DIVIDEND INCOME: Loans...................................................... $1,196 $1,030 $3,564 $2,655 Mortgage-backed securities................................. 10 12 28 34 Collateralized mortgage obligations........................ 77 83 219 249 Investments and interest bearing deposits.................. 46 47 140 161 FHLB stock dividends....................................... 32 24 90 54 --------- --------- --------- --------- Total.................................................. 1,361 1,196 4,041 3,153 INTEREST EXPENSE: Deposits................................................... 461 442 1,370 1,261 Borrowed money............................................. 529 368 1,496 805 -------- -------- ------- -------- Total.................................................. 990 810 2,866 2,066 Net interest income before provision for loan losses....... 371 386 1,175 1,087 Provision for loan losses....................................... 9 10 41 28 -------- --------- --------- --------- Net interest income after provision for loan losses........ 362 376 1,134 1,059 OTHER INCOME: Service fee income......................................... 38 42 116 102 Loss on sale of assets..................................... -- (18) -- -- Gain on sale of loans and investments.................... (12) 32 11 79 Mortgage corporation operations............................ 30 -- 155 5 -------- --------- -------- ---------- Total.................................................. 56 56 282 186 GENERAL AND ADMINISTRATIVE EXPENSES: Compensation and employee benefits......................... 216 170 651 497 Occupancy and equipment.................................... 59 187 169 295 Federal insurance premiums................................. 5 5 9 15 Franchise taxes............................................ 14 17 43 62 Other expenses............................................. 183 162 589 447 -------- -------- -------- -------- Total.................................................. 477 541 1,461 1,316 Loss before credit for income taxes........................ (59) (109) (45) (71) Credit for income taxes......................................... (17) (35) (10) (18) ---- ---- ---- ---- Net loss................................................... $(42) $(74) $(35) $(53) ==== ==== ==== ==== Basic loss per share............................................ $(0.15) $(0.30) $(0.10) $(0.17) ====== ====== ====== ====== Diluted loss per share.......................................... $(0.15) $(0.30) $(0.10) $(0.17) ====== ====== ====== ======
4 5
LENOX BANCORP, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ---------------------------------- 2000 1999 -------------- --------------- (UNAUDITED) (DOLLARS IN THOUSANDS) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss............................................................... $ (35) $ (53) Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization........................................ 55 222 Provision for losses on loans........................................ 41 28 Amortization of deferred loan (fees) costs........................... 47 (9) Deferred loan origination fees (costs)............................... (39) (79) FHLB stock dividends................................................. (90) (54) Loss on sale of investments.......................................... -- (5) Loss on sale of loans................................................ (111) (80) Amortization of stock incentive plan award........................... 15 19 ESOP expense, net of tax benefit..................................... -- 50 Effect of change in operating assets and liabilities: Accrued interest receivable........................................ (57) (110) Prepaid expenses................................................... (300) (165) Prepaid federal income tax......................................... 35 -- Advances by borrowers for taxes and insurance...................... (121) 12 Accrued expenses................................................... 426 33 Accrued federal income taxes....................................... -- (68) Deferred federal income taxes...................................... -- (41) ------- ------- Net cash provided (used) by operating activities................. (134) (300) CASH FLOWS FROM INVESTING ACTIVITIES: Property and equipment additions....................................... (955) (66) Repayments of mortgage-backed securities............................... 67 160 Purchase of certificates of deposits................................... (4) (8) Maturity of certificate of deposits.................................... 100 -- Net change in loans.................................................... 6,578 (27,463) Proceeds from sale of investments..................................... -- 2,348 Proceeds from sale of mortgage loans................................... -- 5,997 Purchase of FHLB stock................................................. (59) (567) Maturity of investments - held-to-maturity............................. -- 1,337 Maturity of investments - available-for-sale........................... -- 867 ------- ------- Net cash provided (used) by investing activities..................... 5,727 (17,395) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in deposits.................................... (2,323) 6,200 Borrowings from FHLB................................................... 14,950 21,000 Repayments of FHLB advances............................................ (17,843) (8,387) Purchase of Treasury Stock............................................. -- (2,223) Reissue Treasury Stock................................................. -- 4 Dividends paid......................................................... -- (49) ------- ------- Net cash provided (used) by financing activities..................... (5,216) 16,545 ------- ------- Increase (decrease) in cash and cash equivalents.......................... 377 (1,150) ------- ------- Cash and cash equivalents at beginning of period.......................... 738 2,350 ------- ------- Cash and cash equivalents at end of period................................ $ 1,115 $ 1,200 ======= ======= SUPPLEMENTAL DISCLOSURE: Cash paid for: Interest expense..................................................... $2,868 $2,026 Income taxes......................................................... -- 51
5 6 LENOX BANCORP, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 1. Principles of Consolidation --------------------------- The consolidated unaudited financial statements include the accounts of Lenox Bancorp, Inc. ("Lenox" or the "Company") and its wholly-owned subsidiary Lenox Savings Bank (the "Bank"), which includes Lenox Mortgage Corporation. All significant intercompany transactions have been eliminated in consolidation. The investment in the Bank on Lenox's financial statements is carried at the parent company's equity in the underlying net assets. The consolidated balance sheet as of September 30, 2000 and the related consolidated statement of income, cash flows and changes in stockholders' equity for the three and nine months ending September 30, 2000 and 1999 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicated of results for a full year. The financial statements and notes are presented as permitted by Form 10-QSB. The interim statements are unaudited and should be read in conjunction with the financial statements and notes thereto contained in the Bank's annual report for the year ended December 31, 1999. 2. Conversion to Capital Stock Form of Ownership --------------------------------------------- The Board of Directors of Lenox Savings Bank adopted a plan of conversion, pursuant to which the Bank converted from an Ohio-chartered mutual savings bank to an Ohio-chartered capital stock savings bank, with the concurrent formation of the holding company, Lenox Bancorp, Inc. On July 17, 1996, the conversion from the mutual to stock form was finalized. Lenox was capitalized through the initial sale of 425,677 shares of common stock to eligible account holders, an employee benefit plan of the Bank, supplemental eligible account holders, other members of the Bank and the general public. Lenox then used a portion of the proceeds from the sale to purchase all of the outstanding shares of the Bank. This transaction was accounted for in a manner similar to the pooling of interest method. The Bank may not declare or pay cash dividends on or repurchase any of its shares of common stock if the effect thereof would cause equity to be reduced below applicable regulatory capital maintenance requirements or if such declaration and payment would otherwise violate regulatory requirements. 3. Earnings Per Share ------------------ The Company reported a net loss for the three months ended September 30, 2000 of $0.15 per share, or $42,000, on an average of 285,028 shares, compared to a loss for the quarter ending September 30, 1999 of $35,000, or $0.30, per share on an average of 285,028 shares. The 6 7 Company reported a loss for the nine months ending September 30, 2000 of $35,000, or $0.10 per share, on an average of 285,028 shares compared to $53,000, or $0.17 per share, on an average of 285,028 shares for the nine months ended September 30, 1999. At present, there is no difference between the average shares outstanding for the computation of basic and dilutive earnings per share as options have a dilutive effect only when the average market price of the common stock exceeds the exercise price of the options. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The following analysis discusses changes in the financial condition and results of operations at and for the nine months ended September 30, 2000, and should be read in conjunction with the Bank's Consolidated Financial Statements and the notes thereto, appearing in Part I, Item 1 of this document. FORWARD-LOOKING STATEMENTS This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995, and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and the subsidiaries include, but are not limited to, changes in: interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission. The Company does not undertake -- and specifically disclaims any obligation -- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 7 8 COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 ASSETS. Total assets decreased by $5.0 million or 6.6% to $70.9 million at September 30, 2000, from $76.0 million at December 31, 1999. This decrease was due to a $6.5 million, or 10.02% decrease in loans receivable from $65.0 million at December 31, 1999, to $58.5 million at September 30, 2000. This decrease in loans was due predominately to a sale of loans approximating $5.0 million on August 31, 2000 and the remainder of the decrease has been determined to a general reduction in loan demand driven by higher market interest rates. The decrease in loans just mentioned was partially offset by an increase in property and equipment of $906,000 or 227.1% due to new corporate facilities. Prepaid expenses and other assets also increased $300,000 or 138.2% from $217,000 at December 31, 1999, to $517,000 at September 30, 2000, resulting from an increase in prepaid and other assets which include mortgage loan servicing rights. Cash and due from banks increased $377,000 to $1.1 million at September 30, 2000 from $738,000 at December 31, 1999 as funds from the sale of loans were held in interest bearing accounts. LIABILITIES. Total liabilities decreased by $5.0 million or 6.97% from $71.2 million at December 31, 1999, to $66.2 million at September 30, 2000, primarily due to an decrease in Federal Home Loan Bank ("FHLB") overnight variable rate advances of $2.9 million or 9.29% from $31.1 million at December 31, 1999, to $28.2 million at September 30, 2000 and a decrease in deposits by $2.3 million or 5.89% from $39.4 million at December 31, 1999, to $37.1 million at September 30, 2000. The decrease in the FHLB advances was due to using the proceeds from the sale of loans to pay down the level of advances. The decrease in deposits was primarily due to a $4.9 million decrease in certificates of deposits, money market and NOW accounts to $29.4 million at September 30, 2000, from $34.7 million at December 31, 1999. This decrease was due to customers utilizing other investment vehicles with other institutions with higher rates as the bank has been focusing on other lower cost funding sources. Savings, club and other accounts increased $2.6 million or 50.3% to $7.7 million at September 30, 2000, from $5.1 million at December 31, 1999, due primarily to a savings plan the bank offers with very competitive interest rates. STOCKHOLDERS' EQUITY. Stockholders' equity decreased by $75,000 or 1.6% from $4.8 million at December 31, 1999, to $4.7 million at September 30, 2000. Retained earnings decreased $35,000 due to the net loss incurred during the period while the unrealized loss on available for sale securities increased by $56,000. LIQUIDITY AND CAPITAL RESOURCES. The Company's primary sources of funds are deposits, FHLB advances, principal and interest payments on loans and loan sales in the secondary market. While maturities and scheduled amortization of loans are predictable sources of funds, deposit flow and mortgage prepayments are strongly influenced by changes in general interest rates, economic conditions and competition. 8 9 The primary investment activity of the Company for the nine months ended September 30, 2000 was the origination of mortgage and consumer loans. The most significant sources of funds for the nine months ended September 30, 2000 was the repayment and sales of mortgage loans, deposit inflows and advances from the Federal Home Loan Bank. The Bank is required to maintain a minimum level of liquidity (net cash, short term and marketable assets divided by total withdrawable deposits and short term liabilities), as defined by the Federal Deposit Insurance Corporation (the "FDIC"). The Bank's liquidity at September 30, 2000 was 1.95%. The Bank's most liquid assets are cash, federal funds sold, and marketable securities. The levels of the Bank's liquid assets are dependent on the Bank's operation, financing, lending and investing activities during any given period. At September 30, 2000 assets qualifying for short term liquidity, including cash and short term investment, totaled $4.0 million and during the same period of time the amounts of certificates of deposit scheduled to mature in one year or less totals $16.1 million. Based upon the Bank's historical experience with deposit retention, management believes that, although it is not possible to predict future terms and conditions upon renewal, the bank will be able to retain most of these deposits as they mature in the next year. At September 30, 2000, the Bank's capital exceeded all the capital requirements of the FDIC. The Bank's Tier 1 leverage and total capital to risk-weighted capital ratios were 12.29% and 12.60%, respectively. Comprehensive loss for the nine months ended September 30, 2000 was $91,000 and $130,000, respectively. The difference between net income and comprehensive income consists solely of the effect of unrealized gain and losses, net of taxes, on available for sale securities. COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 GENERAL. The Company reported a net loss of $35,000 for the nine months ending September 30, 2000, which represents a $18,000 increase from the $53,000 of net loss reported for the nine months ended September 30, 1999. The reduction in net loss for this period compared to the previous period was due to increased interest earned from the loan portfolio and higher income from the mortgage corporation operations, offset by higher interest and non-interest expenses, primarily due to higher market interest rates and more reliance on FHLB advances. INTEREST AND DIVIDEND INCOME. Interest and dividend income for the nine months ended September 30, 2000, was $4.0 million compared to $3.2 million for the nine months ended September 30, 1999, an increase of $888,000 or 28.2%. The primary reason for the increase was a $909,000 or 34.2 % increase in interest earned on loans receivable to $3.6 million for the nine months ended September 30, 2000, from $2.7 million for the nine months ended September 30, 1999, due to a $13.4 million increase in the average mortgage loans receivable outstanding 9 10 period to period and an increase in the yield from 7.24% for the period ending September 30, 1999, to 7.63% for the period ending September 30, 2000. This increase was due to a combination of the sale of lower yielding mortgage loans and increasing market interest rates. Other interest and dividend income did not change materially from the prior nine month period. INTEREST EXPENSE. Interest expense for the nine months ended September 30, 2000, was $2.9 million compared to $2.1 million for the nine months ended September 30, 1999, an increase of $800,000 or 38.7% primarily due to a $12.8 million increase in the average balances of interest-bearing liabilities outstanding period to period. The Bank utilized FHLB advances to fund the asset growth as the average balance on FHLB advances increased to $31.2 million for the period ended September 30, 2000 from $19.3 million for the period ended September 30, 1999, due to higher market interest rates. The Bank also experienced an increase in the yield on the FHLB advance of 58 basis points due the increases in market interest rates and the banks' use of short term Federal Home Loan Bank advance programs. The average balance on deposits decreased by $964,000, which was offset by an increase in the yield on deposits from 4.59% for the period ending September 30, 1999 to 4.86% for the period ending September 30, 2000. NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES. Net interest income after provision for loan losses increased $75,000 or 7.08% for the nine months ended September 30, 2000, to $1.13 million from $1.06 million for the nine months ended September 30, 1999. Such increase was offset by an increase of $13,000 in the provision for loan losses for the nine months ending September 30, 2000 as compared to the prior period, due to an increase in the loan portfolio and the inherent risk in lending. The Banks' total loan loss allowance was $118,000 at September 30, 2000, which represented 0.20% of total loans outstanding and 32.78% of nonperforming loans compared to an allowance of $84,000 at September 30, 1999, which represented 0.14% of total loans and 155.56% of nonperforming loans. OTHER INCOME. Other income increased $96,000 or 51.6% for the nine months ending September 30, 2000, to $282,000 from $186,000 for September 30, 1999. This increase was due to the loan sales and fees received by the Mortgage Corporation, which was fully operational during the three quarters of 2000. The Mortgage Corporation originates loans to be sold to third parties and to the Bank. GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for the nine months ended September 30, 2000, were $1.5 million compared to $1.3 million for the nine months ended September 30, 1999, an increase of $145,000 or 11.0%. The increase in general and administrative expenses was comprised of an increase of $154,000 in compensation and benefits and an increase of $142,000 in other expenses, offset by a decrease in occupancy and equipment of $126,000. The increase in compensation and benefits was due predominately to the additional expenses relating to the Mortgage Corporation. The increase in other expenses relate to additional expenses relating to the Mortgage Corporation and higher professional fees to respond to regulatory and shareholder issues. The decrease in Occupancy and equipment reflects 10 11 the additional charges incurred in 1999 to write off leasehold improvements associated with the former main office of the company. INCOME TAXES. Income tax credits for the nine months ended September 30, 2000, decreased $8,000 to $10,000 from $18,000 for the three months ending September 30, 1999, because of the decrease in pretax loss. Net loss before tax credits was $59,000 for the three months ended September 30, 2000, compared to $109,000 for the same period ending September 30, 1999. RECENT ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," which established for derivative instruments, including derivative instruments imbedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS No. 133, as amended by SFAS No. 137, is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. Management does not believe the adoption of this standard will have an impact on the Company's financial statement as the Company does not hold any instruments covered by this standard. SUPERVISORY AGREEMENT On August 2, 2000, the Company entered into a Supervisory Agreement with the Office of Thrift Supervision (the "OTS") that requires, among other things, the Company to obtain the OTS' prior approval before entering into contracts for goods and services in excess of $5,000 or making any payments for goods and services in excess of $2,000 per month. The Company is also restricted in its ability to borrow money and may not make any changes to its directorate or executive officer staff unless prior notice has been given to the OTS. The Bank entered into a Memorandum of Understanding between it, the FDIC and the Superintendent of Financial Institutions, State of Ohio on February 9, 2000, which is described in more detail in the Company's Form 10-KSB, Commission File No. 0-28162, filed with the Securities and Exchange Commission on March 29, 2000. 11 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings. ----------------- On June 9, 2000, four stockholders of the Company, including two members of the Board of Directors and two additional individuals, filed a complaint for declaratory judgment and preliminary and permanent injunctive relief against the Company and each of the other three directors individually in the Court of Common Pleas in Hamilton, Ohio. The plaintiffs allege that four of the plaintiffs were duly elected to the Board of Directors at the 2000 Annual Meeting of Stockholders. The plaintiffs seek a declaratory judgment that such individuals were properly elected and are members of the Board of Directors and are further attempting to enjoin the Lenox Board of Directors from taking or approving any action without the participation of such individuals. The Company in its answer to the complaint has denied the allegations that any board members were up for election and does not recognize the validity or legal effect of the nominations of the plaintiffs for director or their election. Item 2. Changes in Securities and Use of Proceeds. ----------------------------------------- None. Item 3. Defaults Upon Senior Securities. ------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders. ---------------------------------------------------- None. Item 5. Other Information. ----------------- None. 12 13 Item 6. Exhibits and Reports on Form 8-K (ss.249.308 of this Chapter). ------------------------------------------------------------- (a) Exhibits 3.1 Amended Articles of Incorporation of Lenox Bancorp, Inc.* 3.2 Amended and Restated Code of Regulations of Lenox Bancorp, Inc.* 11.0 Statement re: Computation of Per Share Earnings 27.0 Financial Data Schedule (b) Reports on Form 8-K None. - ---------------------- * Incorporated herein by reference to the Company's Form 10-KSB, filed on March 25, 1998. 13 14 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LENOX BANCORP, INC. Dated: November 13, 2000 By: /s/ Virginia M. Heitzman -------------------------------------------- Virginia M. Heitzman President and Chief Executive Officer (principal executive officer) Dated: November 13, 2000 By: /s/ David K. Brown -------------------------------------------- David K. Brown Chief Financial Officer and Treasurer (principal financial and accounting officer) 14 EX-11 2 0002.txt
EXHIBIT 11.0 COMPUTATION OF PER SHARE EARNINGS THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, --------------- ----------------- 2000 1999 2000 1999 ------- ------ -------- -------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net (loss).............................................. $ (42) $ (74) $ (35) $ (53) ------ ------ ------ ------ Average shares outstanding.............................. 285 285 285 285 ------ ------ ------ ------ Per share amount........................................ $(0.15) $(0.30) $(0.10) $(0.17) ====== ====== ====== ====== Net (loss).............................................. $ (42) $ (74) $ (35) $ (53) ------ ----- ----- ----- Average shares outstanding.............................. 285 285 285 285 Net effect of dilutive stock options based on the treasury stock method using the average market price or quarter end price, whichever is greater....................... -- -- -- -- ------ ------ ------ ------ Total shares outstanding................................ 285 285 285 285 Per share amount........................................ $(0.15) $(0.30) $(0.10) $(0.17) ====== ====== ====== ======
EX-27 3 0003.txt
9 This schedule contains summary financial information extracted from the Form 10-QSB for Lenox Bancorp, Inc. for the three and nine months ended September 30, 2000 and is qualified in its entirety by reference to such financial statements. 0001000050 Lenox Bancorp, Inc. 1,000 U.S. Dollars 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 1 247 868 0 0 7,038 97 97 58,647 118 70,945 37,113 7,450 882 20,746 0 0 0 4,705 70,945 3,564 477 0 4,041 1,370 2,866 1,175 41 0 1,461 (45) (45) 0 0 (35) (.10) (.10) 7.53 0 362 0 0 90 16 4 118 118 0 0
-----END PRIVACY-ENHANCED MESSAGE-----