-----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, ChLPAuRm9yme4DTuNqLW1fcH4drkGi8uHCjDbcKy3yOrqxY9FIn8j/xGhyKBCOmn AEnbVpRoLPYr9+pLh14+vQ== 0001025537-00-000077.txt : 20000516 0001025537-00-000077.hdr.sgml : 20000516 ACCESSION NUMBER: 0001025537-00-000077 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOPFED BANCORP INC CENTRAL INDEX KEY: 0001041550 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 561995728 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23667 FILM NUMBER: 634257 BUSINESS ADDRESS: STREET 1: 2700 FORT CAMPBELL BLVD CITY: HOPKINSVILLE STATE: KY ZIP: 42440 BUSINESS PHONE: 5028851171 MAIL ADDRESS: STREET 1: 2700 FORT CAMPBELL BLVD CITY: HOPKINSVILLE STATE: KY ZIP: 42440 10-Q 1 FORM 10-Q FOR HOPFED BANCORP, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------- FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-23667 ----------------- HOPFED BANCORP, INC. ------------------------------------ (Exact name of registrant as specified in its charter) Delaware 61-1322555 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2700 Fort Campbell Boulevard, Hopkinsville, Kentucky 42240 - ---------------------------------------------------- -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (270) 885-1171 -------------- 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 ninety days. Yes x No As of March 31, 2000, 3,993,592 shares of Common Stock were issued and outstanding. CONTENTS PAGE ---- PART I. FINANCIAL INFORMATION --------------------- Item 1. Financial Statements Consolidated Statements of Financial Condition as of March 31, 2000 and December 31, 1999....................................... 2 Consolidated Statements of Income for the Three-Month Periods Ended March 31, 2000 and March 31, 1999............. 3 Consolidated Statements of Comprehensive Income for the Three-Month Periods Ended March 31, 2000 and 1999....... 4 Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2000 and March 31, 1999............. 5 Notes to Unaudited Condensed Financial Statements.................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................... 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................................10 SIGNATURES....................................................................11 1 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS HOPFED BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, December 31, ASSETS 2000 1999 ------------------- ------------------ (Unaudited) (In thousands) Cash and due from banks................................. $ 2,458 $ 4,537 Interest-bearing deposits in Federal Home Loan Bank ("FHLB")................................... 13 251 Federal funds sold...................................... 600 4,100 Investment securities available for sale................ 92,566 71,423 Investment securities held to maturity (Estimated market values of $9,597 and $10,078 at March 31, 2000 and December 31, 1999, respectively)................. 9,461 9,958 Loans receivable, net................................... 115,143 113,532 Accrued interest receivable............................. 1,865 1,095 Premises and equipment, net............................. 2,445 2,472 Deferred tax assets..................................... 1,418 515 Other assets............................................ 76 23 ----------- ---------- Total assets................................... $ 226,045 $ 207,906 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits............................................. $ 163,126 $ 160,905 Advances from FHLB................................... 15,525 -- Federal income taxes................................. 979 369 Advance payments from borrowers for tax and insurance...................................... 228 156 Other liabilities.................................... 1,306 2,130 ----------- ---------- Total liabilities.............................. 181,164 163,560 ----------- ---------- Stockholders' Equity: Common stock......................................... 40 39 Additional paid in capital........................... 25,020 24,214 Retained earnings, substantially restricted.......... 21,279 20,991 Accumulated other comprehensive loss (1,458) (898) ----------- ---------- Total stockholders' equity..................... 44,881 44,346 ----------- ---------- Total liabilities and stockholders' equity..... $ 226,045 $ 207,906 =========== ==========
See accompanying Notes to Unaudited Condensed Financial Statements. 2 HOPFED BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended March 31, ---------------------------------------------- 2000 1999 ---- ---- (Dollars in thousands, except per share data) Interest income: Interest on loans.................................... $ 2,180 $ 2,093 Interest and dividends on investments................ 1,707 1,199 Time deposit interest income......................... 14 208 ----------- ------------- Total interest income.............................. 3,901 3,500 Interest expense: Interest on deposits................................. 1,893 1,773 Interest on advances................................. 185 -- ----------- ------------- Total interest expense............................. 2,078 1,773 Net interest income..................................... 1,823 1,727 Provision for loan losses............................... 10 5 ----------- ------------- Net interest income after provision for loan losses..... 1,813 1,722 ----------- ------------- Noninterest income: Loan and other service fees.......................... 115 101 Other, net........................................... 12 11 ----------- ------------- Total noninterest income........................... 127 112 ----------- ------------- Noninterest expenses: Salaries and benefits................................ 566 624 Federal insurance premium............................ 10 23 Occupancy expense, net............................... 47 47 Data processing...................................... 42 37 Other operating expenses............................. 173 149 ----------- ------------- Total noninterest expenses......................... 838 880 ----------- ------------- Income before income taxes.............................. 1,102 954 Income tax expense...................................... 375 362 ----------- ------------- Net income.............................................. $ 727 $ 592 =========== ============= Basic net income per share.............................. $ .18 $ .16 Diluted net income per share............................ $ .18 $ .16 Dividends per share..................................... $ .11 $ .075 =========== ============= Weighted average: Common shares................................. 3,993,592 4,033,625 Less: Unallocated ESOP shares................ -- 293,267 ----------- ------------- 3,993,592 3,740,358 =========== =============
See accompanying Notes to Unaudited Condensed Financial Statements. 3 HOPFED BANCORP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended March 31 ------------------------------------------ 2000 1999 ---- ---- (In thousands) Net income $ 727 $ 592 Other comprehensive income Unrealized holding losses arising during period net of tax effect of $288 and $316 for the three months ended March 31, 2000 and 1999, respectively (559) (614) Less: reclassification adjustment for gains included in net income 0 0 ----------- ---------- Comprehensive income (loss) $ 168 $ (22) =========== ==========
See accompanying Notes to Unaudited Condensed Financial Statements. 4 HOPFED BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, ------------------------------------ 2000 1999 ---- ---- (In thousands) Cash flows from operating activities: Net income ............................................ $ 727 $ 592 Adjustments to reconcile net income to net cash Provided by operating activities: Deferred income taxes ............................... (14) 11 Provision for loan losses ........................... 10 5 Depreciation ........................................ 28 28 FHLB stock dividend ................................. (35) (32) Accretion of investment security discounts .......... (4) (12) Amortization of investment security premiums ........ 10 7 Earned ESOP shares .................................. -- 25 Decrease (increase) in: Accrued interest receivable ......................... (770) 108 Other assets ........................................ (53) 114 Increase (decrease) in: Current income taxes payable ........................ 8 196 Accrued expenses and other liabilities .............. (150) 69 -------- -------- Net cash provided (used) by operating activities .... (243) 1,111 -------- -------- Cash flows from investing activities: Net decrease in interest earning deposits in FHLB ..... 238 214 Net (increase) decrease in federal funds sold ......... 3,500 (14,450) Proceeds from maturities of held-to-maturity securities 499 15,201 Proceeds from sale of available-for-sale Securities .......................................... 2,086 3,292 Purchases of available for sale securities ............ (24,049) (5,266) Net increase in loans ................................. (1,620) (811) Purchases of premises/equipment ....................... (2) (4) -------- -------- Net cash used by investing activities ............... (19,348) (1,824) -------- -------- Cash flows from financing activities: Net increase in demand deposits ....................... 962 1,850 Net increase (decrease) in time deposits .............. 1,260 (1,153) Advances from FHLB .................................... 15,525 -- Increase in advance payments by borrowers for taxes and insurance ................... 72 65 Net dividends paid .................................... (307) (278) Payment on loan to ESOP ............................... -- 22 -------- -------- Net cash provided by financing activities ........... 17,512 506 -------- -------- Decrease in cash and cash equivalents .................... (2,079) (207) Cash and cash equivalents, beginning of period ........... 4,537 1,905 -------- -------- Cash and cash equivalents, end of period ................. 2,458 $ 1,698 ======== ======== Supplemental disclosure of cash flow information Cash paid for income taxes ............................ $ 381 $ -- -------- -------- Cash paid for interest ................................ $ 2,087 $ 1,770 ======== ========
See accompanying Notes to Unaudited Condensed Financial Statements. 5 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION HopFed Bancorp, Inc. (the "Company") was formed at the direction of Hopkinsville Federal Savings Bank (the "Bank") to become the holding company of the Bank upon the conversion of the Bank from a federally chartered mutual savings bank to a federally chartered stock savings bank. The conversion was consummated on February 6, 1998. The Company's primary assets are the outstanding capital stock of the converted Bank, and its sole business is that of the converted Bank. The accompanying unaudited 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. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary for fair representation have been included. The results of operations and other data for the three-month period ended March 31, 2000, are not necessarily indicative of results that may be expected for the entire fiscal year ending December 31, 2000. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2000 AND DECEMBER 31, 1999 Total assets increased by $18.1 million, from $207.9 million at December 31, 1999 to $226.0 million at March 31, 2000. Investment securities available for sale increased from $71.4 million at December 31, 1999 to $92.6 million at March 31, 2000. Federal funds sold decreased from $4.1 million at December 31, 1999, to $600,000 at March 31, 2000. At March 31, 2000, investments classified as "held to maturity" were carried at amortized cost of $9.5 million and had an estimated fair market value of $9.6 million, and securities classified as "available for sale" had an estimated fair market value of $92.6 million. The loan portfolio increased $1.6 million during the three months ended March 31, 2000. Net loans totaled $115.1 million and $113.5 million at March 31, 2000 and December 31, 1999, respectively. For the three months ended March 31, 2000, the average yield on loans was 7.67%, compared to 7.57% for the year ended December 31, 1999. The allowance for loan losses totaled $288,000 at March 31, 2000, an increase of $10,000 from the allowance of $278,000 December 31, 1999. The ratio of the allowance for loan losses to loans was .25% and .24% at March 31, 2000 and December 31, 1999, respectively. Also at March 31, 2000, non-performing loans were $52,000, or .05% of total loans, compared to $58,000, or .05% of total loans, at December 31, 1999, and the ratio of allowance for loan losses to non-performing loans at March 31, 2000 and December 31, 1999 was 553.8% and 479.3%, respectively. The determination of the allowance for loan losses is based on management's analysis, performed on a quarterly basis. Various factors are considered, including the market value of the underlying collateral, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans, historical loss experience, delinquency trends and prevailing economic conditions. Although management believes its allowance for loan losses is adequate, there can be no assurance that additional allowances will not be required or that losses on loans will not be incurred. Minimal losses on loans have been incurred in prior years. In 1999, the Company determined to retain its deposit base through an increase in overall deposit rates. At March 31, 2000, deposits increased to $163.1 million from $160.9 million at December 31, 1999, a net increase of $2.2 million. The average cost of deposits during the period ended March 31, 2000 and the year ended December 31, 1999 was 4.76% and 4.62%, respectively. Management continually evaluates the investment alternatives available to customers and adjusts the pricing on its deposit products to more actively manage its funding costs while remaining competitive in its market area. COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 NET INCOME. Net income for the three months ended March 31, 2000 was $727,000, compared to net income of $592,000 for the three months ended March 31, 1999. As discussed 7 below, the increase in net earnings for the three months primarily resulted from a $401,000 increase in total interest income. NET INTEREST INCOME. Net interest income for the three months ended March 31, 2000 was $1.8 million, compared to $1.7 million for the three months ended March 31, 1999. The increase in net interest income for the three months ended March 31, 2000 was primarily due to increases of $87,000 and $508,000 in interest on loans and interest and dividends on investments, respectively. For the three months ended March 31, 2000, the Bank's average yield on average interest-earning assets was 7.33%, compared to 6.52% for the three months ended March 31, 1999, and its average cost of interest-bearing liabilities was 4.84% for the three months ended March 31, 2000, compared to 4.65% for the three months ended March 31, 1999. As a result, the Bank's interest rate spread for the three months ended March 31, 2000 was 2.49%, compared to 1.87% for the three months ended March 31, 1999, and its net yield on interest-earning assets was 3.43% for the three months ended March 31, 2000, compared to 3.22% for the three months ended March 31, 1999. INTEREST INCOME. Interest income increased by $401,000, from $3.5 million to $3.9 million, or by 11.5%, during the three months ended March 31, 2000 compared to the same period in 1999. This increase primarily resulted from restructuring of the investment portfolio which produced an increase of $508,000 in interest and dividends on investments. The average balance of securities available for sale increased $19.6 million from $68.7 million at March 31, 1999 to $88.3 million at March 31, 2000 while the average balance of securities held to maturity decreased $10.1 million, from $19.8 million at March 31, 1999 to $9.7 million at March 31, 2000. In addition, average time deposits and other interest-earning cash deposits decreased $15.9 million, from $17.0 million at March 31, 1999 to $1.1 million at March 31, 2000. Overall, average total interest-earning assets decreased $1.9 million, or .87%, from March 31, 1999 to March 31, 2000. The ratio of average interest-earning assets to average interest-bearing liabilities decreased from 140.8% for the three months ended March 31, 1999 to 123.9% for the three months ended March 31, 2000. INTEREST EXPENSE. Interest expense increased $305,000, or 17.2%, to $2.1 million for the three months ended March 31, 2000, compared to $1.8 million for the same period in 1999. The increase was attributable to an increase of $120,000 in interest on deposits and interest on FHLB advances of $185,000. In January, 2000, the Bank borrowed approximately $16.0 million from the FHLB of Cincinnati in order to fund increases in loans and investments. The average cost of average interest-bearing deposits increased from 4.65% at March 31, 1999 to 4.84% at March 31, 2000. Over the same period, the average balance of deposits increased $6.8 million, from $152.4 million at March 31, 1999 to $159.2 million at March 31, 2000, or 4.43%. PROVISION FOR LOAN LOSSES. The allowance for loan losses is established through a provision for loan losses based on management's evaluation of the risk inherent in its loan portfolio and the general economy. Such evaluation considers numerous factors including, general economic conditions, loan portfolio composition, prior loss experience, the estimated fair value of the underlying collateral and other factors that warrant recognition in providing for an adequate loan loss allowance. The Bank determined that an additional $10,000 provision for loan loss was required for the three months ended March 31, 2000. 8 NONINTEREST INCOME. There was a $15,000 increase in noninterest income in the three months ended March 31, 2000 compared to the same period in 1999, primarily due to a $14,000 increase in loan and other service fees. NONINTEREST EXPENSES. There was a $42,000 decrease in total noninterest expenses in the three months ended March 31, 2000 compared to the same period in 1999, primarily due to a $58,000 decrease in salaries and benefits. INCOME TAXES. The effective tax rate for the three months ended March 31, 2000 was 34.0%, compared to 37.9% for the same period in 1999. The increase in income tax expense of $13,000 in the three-month period compared to the same period in 1999 was primarily due to an increase of $148,000 in income before income taxes. LIQUIDITY AND CAPITAL RESOURCES. The Company has no business other than that of the Bank. Management believes that dividends that may be paid by the Bank to the Company will provide sufficient funds for its current needs. However, no assurance can be given that the Company will not have a need for additional funds in the future. The Bank is subject to certain regulatory limitations with respect to the payment of dividends to the Company. The Bank's principal sources of funds for operations are deposits from its primary market areas, principal and interest payments on loans, proceeds from maturing investment securities and the net conversion proceeds received by it. The principal uses of funds by the Bank include the origination of mortgage and consumer loans and the purchase of investment securities. The Bank is required by current federal regulations to maintain specified liquid assets of at least 5% of its net withdrawable accounts plus short-term borrowings. Short-term liquid assets (those maturing in one year or less) may not be less than 1% of the Bank's liquidity base. At March 31, 2000, the Bank met all regulatory liquidity requirements, and management believes that the liquidity levels maintained are adequate to meet potential deposit outflows, loan demand and normal operations. The Bank must satisfy three capital standards: a ratio of core capital to adjusted total assets of 4.0%, a tangible capital standard expressed as 1.5% of total adjusted assets, and a combination of core and "supplementary" capital equal to 8.0% of risk-weighted assets. At March 31, 2000, the Bank exceeded all regulatory capital requirements. The table below presents certain information relating to the Bank's capital compliance at March 31, 2000. At March 31, 2000 ----------------- Amount Percent ------ ------- (Dollars in thousands) Tangible Capital . . . . . . . . . $45,729 20.11% Core Capital . . . . . . . . . . . $45,729 20.11% Risk-Based Capital . . . . . . . . $46,017 54.97% 9 At March 31, 2000, the Bank had outstanding commitments to originate loans totaling $1,004,000. Management believes that the Bank's sources of funds are sufficient to fund all of its outstanding commitments. Certificates of deposits which are scheduled to mature in one year or less from March 31, 2000 totaled $74.6 million. Management believes that a significant percentage of such deposits will remain with the Bank. FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise. The words "believe," "expect," "seek," and "intend" and similar expressions identify forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, projections of income or loss, expenditures, acquisitions, plans for future operations, financing needs or plans relating to services of the Company, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of revisions which may be made to forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company monitors whether material changes in market risk have occurred since year-end. The Company does not believe that material changes in market risk exposures occurred during the three months ended March 31, 2000. 10 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. HOPFED BANCORP, INC. Date: May 15, 2000 /s/ Boyd M. Clark ------------------ Boyd M. Clark Acting President Date: May 15, 2000 /s/ Peggy R. Noel ------------------ Peggy R. Noel Executive Vice President, Chief Financial Officer and Chief Operations Officer 11 EX-27 2 FDS -- HOPFED BANCORP, INC.
9 1,000 U.S. DOLLARS 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 1 2,458 13 600 0 92,566 9,461 9,597 115,143 288 226,045 163,126 15,525 2,513 0 0 0 40 44,841 226,045 2,180 1,707 14 3,901 1,893 185 1,823 10 0 838 1,102 727 0 0 727 .182 .182 3.43 52 0 0 0 278 0 0 288 288 0 0
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