-----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, VDTRGUHj+N4ZLaOK0AGDgTFQX+ZXWqlwUbefD6cn5MLAn8Jls93KlXqft/43vmMS HaWoedoLl1h5s32mIyDrkQ== 0000915656-98-000056.txt : 19980518 0000915656-98-000056.hdr.sgml : 19980518 ACCESSION NUMBER: 0000915656-98-000056 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NSS BANCORP INC CENTRAL INDEX KEY: 0001042806 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 061485317 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22937 FILM NUMBER: 98623506 BUSINESS ADDRESS: STREET 1: 48 WALL ST CITY: NORWALK STATE: CT ZIP: 06852 BUSINESS PHONE: 2038384545 MAIL ADDRESS: STREET 1: NSS BANCORP INC STREET 2: P O BOX 28 CITY: NORWALK STATE: CT ZIP: 06852 10-Q 1 UNITED STATES 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, 1998 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 0-22937 NSS BANCORP, INC. (Exact name of registrant as specified in its charter) Connecticut 06-1485317 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 48 Wall Street, Norwalk, Connecticut (Address of principal executive offices) 06852 (203) 838-4545 (Zip Code) (Registrant's telephone #) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as the latest practicable date. Class: Common Stock, par value $.01 per share Outstanding at March 31, 1998: 2,373,429 shares TABLE OF CONTENTS Page PART I - CONSOLIDATED FINANCIAL INFORMATION A. Consolidated Statements of Financial Condition 1 B. Consolidated Statements of Operations 2 C. Consolidated Statements of Shareholders' Equity 3 D. Consolidated Statements of Cash Flows 4-5 E. Notes to Consolidated Financial Statements 6-7 F. Management's Discussion and Analysis 8-22 G. Quantitative and Qualitative Disclosures about Market Risk 22 H. Selected Consolidated Financial Highlights 23-24 PART II - OTHER INFORMATION 25 PART III - SIGNATURES 26 NSS BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION March 31, December 31, 1998 1997 ASSETS (in thousands) Cash and Due from Banks $ 18,622 $ 11,486 Interest Bearing Deposits in Other Banks 13,778 5,555 Federal Funds Sold 3,000 5,000 Securities: Trading, at Fair Value 2,018 1,830 Available-for-Sale, at Fair Value 185,499 178,667 Loans Receivable, Net of allowance for credit losses of $5,577 as of March 31, 1998 and $5,832 as of December 31, 1997, respectively 418,273 425,812 Loans Held-for-Sale, at Lower of Cost or Market 3,363 5,311 Accrued Interest Receivable 4,185 3,859 Investment in Federal Home Loan Bank Stock, At Cost 7,347 7,347 Other Real Estate Owned, Net 192 574 Bank Premises and Equipment, Net 3,781 3,738 Deferred Income Tax Asset, Net 217 361 Goodwill 1,442 1,524 Other Assets 6,954 3,158 Total Assets $668,671 $654,222 LIABILITIES Deposits Non-interest Bearing $ 28,054 $ 27,471 Savings, Money Market and NOW Accounts 191,469 174,873 Time Accounts 236,376 241,867 Total Deposits 455,899 444,211 Borrowed Funds 156,299 151,671 Accrued Expenses and Other Liabilities 2,205 2,202 Total Liabilities 614,403 598,084 SHAREHOLDERS' EQUITY Preferred Stock ($.01 par value, 500,000 shares authorized, none outstanding) - - Common Stock ($.01 par value, 7,000,000 shares authorized, issued 2,485,571 as of March 31 and 2,460,370 as of December 31; outstanding 2,373,429 as of March 31 and 2,434,096 as of December 31) 25 25 Additional Paid-In Capital 24,872 24,199 Retained Earnings 32,240 31,048 Net Unrealized Gain on Securities Available-for-Sale 1,139 1,129 Total 58,276 56,401 Less: Unearned ESOP Shares 216 263 Treasury Stock (90,500 shares as of March 31) at Cost 3,792 - Total Shareholders' Equity 54,268 56,138 Total Liabilities and Shareholders' Equity $668,671 $654,222
See accompanying notes to consolidated financial statements. NSS BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS ($ in thousands, except per share data) Three Months Ended March 31, 1998 1997 INTEREST AND DIVIDEND INCOME Loans, Including Fees $ 8,407 $ 7,963 Investment Securities and Other Taxable Interest 2,638 2,574 Dividends 635 308 Total 11,680 10,845 INTEREST EXPENSE Deposits 4,310 4,215 Borrowed Funds 2,265 1,970 Total 6,575 6,185 NET INTEREST INCOME 5,105 4,660 Provision for Credit Losses - - NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 5,105 4,660 NON-INTEREST INCOME Customer Service Fees 207 201 Loan Servicing Fees 103 116 Trust Department Fees 149 141 Net Gain on Sale of Loans and Securities 330 25 Credit Card Fees 337 294 Other 209 83 Total Non-Interest Income 1,335 860 NON-INTEREST EXPENSE Compensation and Benefits 2,018 1,872 Occupancy, Equipment and Data Processing 641 672 Regulatory Assessments 13 15 OREO Holding Costs and Expenses 30 84 Sale of OREO (Gains) Losses, Net (30) (180) Credit Card Expense 297 247 Goodwill Amortization 82 81 Other 1,131 994 Total Non-Interest Expense 4,182 3,785 EARNINGS BEFORE INCOME TAXES 2,258 1,735 Provision for Income Taxes 820 691 NET EARNINGS $1,438 $1,044 EARNINGS PER SHARE - BASIC $0.59 $0.43 EARNINGS PER SHARE - ASSUMING DILUTION $0.56 $0.42 Weighted average shares outstanding (excluding unearned ESOP) (in thousands) Basic 2,420 2,400 Assuming Dilution 2,573 2,490
See accompanying notes to consolidated financial statements. NSS BANCORP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Total Additional Gains Unearned Shareholders' Common Paid-In Retained (Losses)On ESO Treasury Shares Stock Capital Earnings Securities Shares Stock Equity ($ in thousands) Balance - December 31, 1994 2,329,670 $24 $22,838 $16,225 $(603) ($971) $ - $37,513 Net Earnings - - - 4,778 - - - 4,778 ESOP Shares Committed for Release 26,556 - 168 - - 266 - 434 Stock Options Exercised 8,494 - 127 - - - - 127 Adjustment of Unrealized Gains, Net - - - - 743 - - 743 Balance - December 31, 1995 2,364,720 24 23,133 21,003 140 (705) - 43,595 Net Earnings 5,702 5,702 Adjustment of Unrealized Gains (Losses), Net (246) (246) Stock Options Exercised 6,665 103 103 Shares Distributed to Advisory Board 230 5 5 Cash Dividends Paid on Common Stock (366) (366) ESOP Shares Committed to be Released 25,697 - 304 - - 256 - 560 Balance - December 31, 1996 2,397,312 24 23,545 26,339 (106) (449) - 49,353 Net Earnings - - - 5,565 - - - 5,565 Adjustment of Unrealized Gains (Losses), Net - - - - 1,235 - - 1,235 Stock Options Exercised 18,201 1 272 - - - - 273 Shares Distributed to Advisory Board 40 - 1 - - - - 1 Cash Dividends Paid on Common Stock - - - (856) - - - (856) ESOP Shares Committed to be Released 18,543 - 381 - - 186 - 567 Balance - December 31, 1997 2,434,096 25 24,199 31,048 1,129 (263) - 56,138 Net Earnings - - - 1,438 - - - 1,438 Adjustment of Unrealized Gains (Losses), Net - - - - 10 - - 10 Stock Options Exercised 21,516 - 386 - - - - 386 Cash Dividends Paid on Common Stock - - - (246) - - - (246) Long-Term Incentive Compensation Plan Shares 3,685 - 142 - - - - 142 ESOP Shares Committed to be Released 4,632 - 145 - - 47 - 192 Treasury Stock (90,500) - - - - - (3,792) (3,792) Balance - March 31, 1998 2,373,429 $25 $24,872 $32,240 $1,139 ($216)($3,792) $54,268
See accompanying notes to consolidated financial statements. NSS BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Increase (Decrease) In Cash & Cash Equivalents Three Months Ended March 31, 1998 1997 ($ in thousands) Cash Flows from Operating Activities Net Earnings $ 1,438 $ 1,044 Adjustments to Reconcile Net Earnings to Net Cash Provided (Used) by Operating Activities Provision for Credit Losses - - Provision for Estimated OREO Losses - - Deferred Income Tax 158 234 Provision for ESOP Benefit Cost 7 45 Depreciation and Amortization 150 149 Goodwill Amortization 82 81 Net Amortization of Discounts and Premiums on Securities 316 149 Net (Gains) Losses on Sales of Loans and Investments (121) 74 Net on Sales of OREO (30) (180) Net (Increase) Decrease in Trading Securities (188) 1,829 Increase in Accrued Interest Receivable (409) (346) (Increase ) Decrease in Other Assets (3,635) 37 Decrease in Accrued Expense and Other Liabilities (3) (897) Total Adjustments (3,673) 1,175 Net Cash Provided by (Applied to) Operating Activities (2,235) 2,219 Cash Flows from Investing Activities Proceeds from: Sales of Loans, Investments and Mortgage Backed Securities 18,746 20,485 Maturities of Investments and Mortgage Backed Securities 8,334 4,923 Sales of Other Real Estate Owned 481 356 Purchases of Investment and Mortgage Backed Securities (28,619) (44,693) Net Decrease (Increase) in Loans 3,863 (13,709) Additions to OREO - - Additions to Goodwill - (95) Additions to Bank Premises and Equipment (193) (417) Net Cash Provided by (Applied to) Investing Activities 2,612 (33,150) Cash Flows from Financing Activities Net Increase (Decrease) in Deposits 11,679 (1,933) Repayments of FHLBB Advances and Other Borrowings (25,058) (29,054) Net Increase (Decrease) in Repurchase Agreements 5,892 (3,100) Advances from FHLB of Boston 20,000 62,489 Proceeds from Exercised Stock Options 715 - Proceeds from Advances from Credit Line 3,792 - Purchase of Treasury Stock (3,792) - Cash Dividends (246) (122) Net Cash Provided by (Applied to) Financing Activities 12,982 28,280 Increase (Decrease) in Cash and Cash Equivalents 13,359 (2,651) Cash and Cash Equivalents - Beginning 22,041 18,851 Cash and Cash Equivalents - Ending $35,400 $16,200
See accompanying notes to consolidated financial statements. NSS BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Increase (Decrease) In Cash & Cash Equivalents Three Months Ended March 31, 1998 1997 ($ in thousands) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash Paid During the Period For: Interest $6,522 $6,161 Income Taxes $820 $691 Non-Cash Investing and Financing Activities: Loans Receivable Transferred to OREO $1,294 $248 Loans Originated in Connection with Sale of OREO $1,225 $298 Exchange of Loans for Mortgage-Backed Securities $1,176 $ - Transfer of Loans Receivable to Loans-Held-For-Sale$3,363 $ -
See accompanying notes to consolidated financial statements. NSS BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1998 (unaudited) and December 31, 1997 NOTE 1 - NATURE OF BUSINESS AND REGULATIONS NSS Bancorp. Inc. (Bancorp) is the holding company for NSS Bank (Bank) (formerly Norwalk Savings Society). NSS Bank is a Connecticut state-chartered savings bank which provides a full range of banking services to its local area customers in and around southern Fairfield County, Connecticut. The Bank is subject to competition from various other financial institutions, and is also subject to the regulations of certain Federal and State agencies and undergoes periodic examination by those regulatory authorities. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The condensed consolidated financial statements in this report have not been audited, with the exception of the information derived from the Consolidated Statement of Financial Condition as of December 31, 1997, which information should be read in conjunction with the Company's audited financial statements and footnotes thereto included in its Annual Report to Shareholders for the year ended December 31, 1997. The consolidated financial statements include the accounts of Bancorp, Bank, and the Bank's wholly owned subsidiary, NSS Realty Corporation (NSS Realty). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for a fair presentation of financial position and results of operations for the interim periods presented have been made, and all such adjustments are of a normal recurring nature. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statement of financial condition and income and expenses for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near-term related to the determination of the allowance for credit losses and valuation of other real estate owned ("OREO"). In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank's allowances for losses. Such agencies may require the Bank to recognize additions to the allowances based on their judgment of information available to them at the time of their examination. On April 22, 1998, Bancorp's Board of Directors declared a cash dividend of thirteen cents ($.13) per share to common shareholders of record May 10,1998 and payable on May 29, 1998. NOTE 3 - SUPPLEMENTAL DISCLOSURES Additional information and supporting disclosures as to effective income tax rates, investment securities, loans, other real estate owned and related allowances for losses are included in Management's Discussion and Analysis. NSS BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1998 (unaudited) and December 31, 1997 NOTE 4 - OTHER SIGNIFICANT MATTERS On February 23, 1994, the Board of Directors unanimously adopted and approved the Bank's plan of Conversion (Conversion) to convert from a Connecticut-chartered mutual to a Connecticut-chartered capital stock savings bank through amendment of its mutual charter and the sale of common stock to the Bank's depositors and others. The Bank commenced its subscription offering on May 4, 1994, and concluded the offering on June 9, 1994. A total of 2,426,740 shares were issued on June 15, 1994, the effective issuance date of the securities. As part of the Conversion, the Board of Directors adopted a tax-qualified employee stock ownership plan (ESOP). The ESOP Trustee borrowed the funds to purchase Conversion stock in an amount equal to 5% of the total number of shares issued in the Conversion. The Trustee for the ESOP acquired 121,337 shares in connection with the stock conversion through the subscription offering. The shares were purchased with a loan obtained from a third party, guaranteed by the Company, reflected as "Other Borrowings" on the Consolidated Statements of Financial Condition. At the 1997 Annual Meeting, shareholders approved the formation of a bank holding company, and NSS Bancorp, Inc. was organized effective October 1, 1997. Consolidated financial information for all periods prior to October 1, 1997 reflect the financial conditions and results of operations of only the Bank and NSS Realty. In February 1998 the Company obtained a $15 million line of credit from another bank in connection with its Treasury Stock Repurchase Program. The line of credit calls for interest at prime, with a one year interest-only payment requirement and a four year principal and interest repayment term. The balance outstanding was $3.8 million at March 31, 1998. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Overview NSS Bancorp, Inc. (the "Company" or "NSS Bancorp") is the holding company for NSS Bank ("NSS" or the "Bank"). The Company's principal asset consists of all of the outstanding shares of the Bank. NSS Bancorp was formed effective October 1, 1997, and is subject to regulation by the Board of Governors of the Federal Reserve System. NSS Bank was founded in 1849 and is a Connecticut-chartered capital stock savings bank, with deposits insured by the Federal Deposit Insurance Corporation ("FDIC"), headquartered in Norwalk, Connecticut. Its initial public offering of common stock was effective June 15, 1994. Formerly Norwalk Savings Society, in February 1998 the Bank changed its name to NSS Bank to better reflect the nature of its operations. As a result of the successful completion of its public offering, the Bank had sufficient capital to meet regulatory requirements, deal with its non-performing assets, restructure its balance sheet to improve its operating results, and position itself for long term growth. In 1996 and continuing into 1997, the Bank embarked on a program of expanding its business products and services as well as continuing to provide a full range of personal banking products and services. The Bank acquired certain assets and assumed essentially all of the liabilities of Fairfield First Bank & Trust Company ("FFB&T") in an FDIC-assisted transaction and opened a full service branch office in Darien. In October 1997 the Bank formed NSS Bancorp, a holding company, that will allow the Company to expand or enter into other financial service activities, capitalizing on its newly acquired business customer base and affording it the opportunity to expand its services to its existing consumer relationships. This reemphasis has not changed the Company's strong commitment to the communities where its business and consumer customers live and work. In order to respond to the community's significant demand for credit, and at the same time manage balance sheet growth, in 1997 and continuing in 1998, the Bank expanded its correspondent loan program, whereby it acts as an agent for third party lenders and receives a fee for its origination efforts. Early in 1997, the Bank adopted an income tax strategy to grow the investment securities portfolio with callable preferred securities which provide dividend income, a substantial portion of which is exempt from State and Federal income taxation. The result of this strategy is a lower than normal effective income tax rate for the Company. In December 1997, the Company adopted a stock repurchase program under which the Company agreed to repurchase up to 15% of its issued and outstanding common stock at market prices in negotiated and/or open market purchases. The original program was scheduled to expire on March 31, 1998 but was extended through the end of 1998. Under this program, in February and March 1998, the Company acquired 90,500 shares at a cost of $3.8 million. The Company reported net earnings of $1.4 million, or basic and diluted earnings per common share of $0.59 and $0.56, respectively, for the three months ended March 31, 1998. During the three months ended March 31, 1998, the Company declared a $0.10 dividend on common stock to its shareholders. The Company's stock price rose from $37.75 per share on January 1, 1998 to $47.25 per share on March 31, 1998. The Company's tier one leverage capital ratio was 7.8% as of March 31,1998, qualifying it as "well capitalized" according to standards established by bank regulatory authorities. RESULTS OF OPERATIONS Comparison of Operating Results for the Three Months Ended March 31, 1998 and 1997 General Net earnings for the three months ended March 31, 1998 were $1.4 million, or $0.59 and $0.56 per common share, on a basic and diluted basis, respectively. The Bank's net earnings were $1.0 million, or $0.43 and $0.42 per common share on a basic and diluted basis, respectively, for the comparable period of 1997. The continued improvement in asset quality in 1997 and 1998 resulted in no need for a provision for credit losses in either three month period. There was a significant increase in correspondent loan program fees for the three months ended March 31, 1998 compared to 1997. There was a significant increase in gains from the sales of securities and loans for the three months ended March 31, 1998 compared to the same period in 1997. Net Interest Income Net interest income, which is the primary source of income for the Bank, is the difference between the interest, fees and dividends earned on loans and investments, and the interest paid on deposits and borrowings. Net interest income was $5.1 million for the three months ended March 31, 1998, an increase of 9.5% over the $4.7 million for the three months ended March 31, 1997. The $445 thousand increase resulted from an increase in interest income of $835 thousand partially offset by a $390 thousand increase in interest expense. The $835 thousand increase in interest income was attributable to a $748 thousand increase in volume and an $87 thousand increase in rate, while the $390 thousand increase in interest expense resulted from a $429 thousand increase due to volume and a $39 thousand decrease related to rate. The 7.7% increase in interest income, from $10.8 million in 1997 to $11.7 million in 1997, was primarily attributable to the growth in the securities portfolio, and the increase in the interest income from the loan portfolio was attributable approximately two-thirds to rate and one-third to volume. The 6.3% increase in interest expense, from $6.2 million in 1997 to $6.6 million in 1998, resulted primarily from the increase in interest expense attributable to the increased level of money market deposits, partially offset by a favorable rate variance on time deposit accounts, and a significant increase in reverse repurchase agreement borrowings. On an overall basis, the Bank was able to increase its net interest income through a combination of favorable rate spreads on its increased volume while continuing to control the rate component of the cost of funds. The following table summarizes the Bank's net interest income and net yield on average interest-earning assets. Non-accruing loans are included in average loans outstanding during the periods, and daily average amounts were used to compute average balances. Table 1 Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997 ($ thousands) 1998 1997 Average Average Average Average Balance Interest Rate Balance Interest Rate Interest-Earning Assets Loans Receivable $429,892 $ 8,407 7.82% $421,715 $ 7,963 7.55% Investment Securities 48,891 855 7.00 39,865 729 7.31 Mortgage-Backed Securities 99,036 1,651 6.67 95,875 1,736 7.24 Short-Term Investments 20,729 285 5.50 11,975 196 6.55 Marketable Equities 38,898 482 4.96 18,407 221 4.80 Total Interest- Earning Assets 637,446 11,680 7.33% 587,837 10,845 7.38% Non-Interest- Earning Assets Cash and Cash Equivalents 11,176 9,288 Accrued Income Receivable 3,856 3,874 Premises and Equipment 3,631 3,208 Other 12,309 9,017 Less: Allowance for Credit Losses (5,463) (7,371) Total Non-Interest-Earning Assets 25,509 18,016 Total Asset $662,955 $605,853 Interest-Bearing Liabilities Deposits Regular Savings and NOW $ 65,371 $ 246 1.51% $ 57,487 $ 221 1.54% Super Savings and Money Market 108,831 843 3.10 93,808 729 3.11 Time 239,980 3,199 5.33 240,587 3,242 5.39 Total Deposits 414,182 4,288 4.14 391,882 4,192 4.28 Borrowings 156,047 2,265 5.81 135,918 1,970 5.80 Mortgage Escrow Deposits 3,271 22 2.69 3,282 23 2.80 Total Interest-Bearing Liabilities 573,500 6,575 4.59% 531,082 6,185 4.66% Non-Interest-Bearing Liabilities Non-Interest- Bearing Deposits 30,416 21,562 Other Liabilities 2,114 2,329 Total Non-Interest- Bearing Liabilities 32,530 23,891 Shareholders' Equity 56,925 50,880 Total Liabilities and Shareholders' Equity $662,955 $605,853 Net Interest-Earning Assets and Interest Rate Spread $63,946 2.74% $56,755 2.72% Net Interest Income and Net Yield on Average Interest-Earning Assets $5,105 3.20% $4,660 3.17%
Rate/Volume Analysis The following table presents the changes in interest and dividend income and the changes in interest expense attributable to changes in interest rates or changes in volume of interest-earning assets and interest-bearing liabilities during the three months ended March 31, 1998 and 1997. Changes which are attributable to both rate and volume have been allocated proportionately. Table 2 THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997 NET RATE VOLUME CHANGE (in thousands) INTEREST INCOME Loans Receivable $288 $156 $444 Mortgage-Backed Securities (141) 56 (85) Short-Term Investments (35) 124 89 Investment Securities (25) 412 387 Total 87 748 835 INTEREST EXPENSE Deposits Savings and Other 4 (29) (25) Super Savings and Money Market 2 (116) (114) Time 35 8 43 Total Deposits 41 (137) (96) Borrowings (3) (292) (295) Mortgage Escrow Deposits 1 - 1 Total 39 (429) (390) CHANGE IN NET INTEREST INCOME $126 $319 $445
Provision for Credit Losses The improvement in asset quality resulted in no need for a provision for credit losses in either three-month period. (See Financial Condition - Non-Performing Assets/Asset Quality). Non-Interest Income Non-interest income consists of deposit service charges and fees, fees derived from both servicing and originating loans for others, net realized and unrealized gains on securities, net gain on sale of loans, fees derived from the Bank's Trust Department and the credit card program. Non-interest income for the three months ended March 31, 1997 was $860 thousand compared to $1.3 million for the comparable period in 1998 resulting in an increase of 55.2%. The table below identifies the primary components of Non-interest income, which are Fees and Gains on sales of Assets. Table 3 - Non-Interest Income Three Months Ended March 31, ($thousands) 1998 1997 Non-Interest Income Fee Income: Loan Servicing Fees $ 103 $116 Other Loan Fees 14 9 Deposit Service Charges 207 201 Credit Card Fees 337 294 Trust Department Fees 149 141 Correspondent Loan Program Fees 154 15 Other 41 59 Total Fees 1,005 835 Net Gains on Securities 211 25 Net Gain on Sale of Loans 119 - Total Gains on Sales of Assets 330 25 Total Non-Interest Income $1,335 $860
Non-interest income increased from $860 thousand for the three months ended March 31, 1997 to $1.3 million, resulting in an increase of 55.2% for the comparable period in 1998. Total fees for the three months ended March 31, 1997 were $835 thousand compared to $1.0 million for the three months ended March 31, 1998; the increase of $170 thousand, or 20.4%, was due primarily to increases in correspondent loan program fees and credit card fees. The other component of Non-interest income is Gains on Sales of Assets. The Bank continues to derive a significant portion of its non-interest income from its Trading portfolio investment strategy whereby covered call options are sold against high quality equities, primarily for yield enhancement. During the quarter ended March 31, 1998, the Bank sold certain residential loans which it had previously identified as Held-for-Sale as of December 31, 1997 and recognized gains of approximately $119 thousand. Non-Interest Expense Non-interest expense is comprised of general and administrative expenses incurred in managing the business of the Bank and costs associated with managing and selling OREO properties. Non-interest expense was $3.8 million for the three months ended March 31, 1997, compared to $4.2 million for the same period in 1998, resulting in an increase of 10.5%. The table that follows indicates the elements of Non-interest expense, including OREO related expense, which is directly related to the level of non-performing assets. Table 4 - Non-Interest Expense Three Months Ended March 31, ($ thousands) 1998 1997 General and Administrative Expense Compensation $1,403 $1,351 Employee Benefits 615 521 Occupancy and Equipment 441 459 Credit Card Processing 297 247 Data Processing 200 213 Regulatory Assessments 13 15 Marketing 167 106 Legal and Professional 341 253 Printing, Postage and Office Supplies 203 188 Insurance 30 30 Amortization of Goodwill 82 81 Other 390 417 Total 4,182 3,881 OREO Related Expense Net Holding Costs and Expenses 30 84 Net Gain on Sales of OREO (30) (180) Provision for Estimated Losses - - Total - (96) Total Non-Interest Expense $4,182 $3,785
Overall, Non-interest expense did not increase significantly; however, the general and administrative expense component increase was comprised of three major categories: Compensation and benefits, Marketing, and Legal and professional. General and Administrative Expense Of the total increase of $300 thousand in general and administrative expense, a significant part of the increase was attributable to compensation and benefits with the cost of the Employee stock ownership program (ESOP) accounting for a significant portion of the benefits expenses. OREO Related Expenses OREO related expenses continued to decline to nominal levels; however, in the three months ended March 31, 1997, the Bank recorded net gains of $180,000 compared to $30,000 for the comparable period in 1998. Provision for Income Taxes The Company's income is subject to Federal and State taxation at a combined rate approximating 40%. The Bank's effective tax rate for the three months ended March 31, 1997 was 39.8%, compared to the Company's effective tax rate of 36.3% for the comparable period in 1998. The decrease was substantially due to the tax savings from the dividend earnings on the Bank's equity securities portfolio, a substantial portion of which is exempt from both State and Federal taxation. Three Months Ended March 31, 1998 1997 ($ thousands) Amount % Amount % Tax at Statutory Federal Rate $768 34.0% $590 34.0% State Tax, Net of Federal Benefit 124 5.5% 114 6.6% Non-Deductible ESOP Expense Provision 49 2.2% 36 2.0% Dividends Received Deductio n (123) (5.5%) (50) (2.9%) Other, Net 2 0.1% 1 0.1% Total $820 36.3% $691 39.8%
FINANCIAL CONDITION General Total assets were $668.7 million as of March 31, 1998 representing a $14.5 million increase from the $654.2 million at December 31, 1997. Total loans, net of allowance for credit losses, were $418.3 million, a decrease of $7.5 million from the $425.8 million as of December 31, 1997. Total investment securities were $187.5 million as of March 31, 1998, an increase of $7.0 million from $180.5 million as of December 31, 1997. Total deposits were $455.9 million, an increase of $11.7 million from the December 31, 1997 level of $444.2 million. Total other borrowed money was $156.3 million as of March 31, 1998, an increase of $4.6 million from the December 31, 1997 level of $151.7 million. Shareholders' equity was $54.3 million as of March 31, 1998 a decrease of $1.8 million from the December 31, 1997 level of $56.1 million. The Company's tier one leverage capital ratio was 7.8% as of March 31, 1998, compared to 8.2% as of December 31, 1997. Investment Securities Total securities amounted to $187.5 million as of March 31, 1998 compared to $180.5 million at December 31, 1997, representing a $7.0 million increase or 3.9%. The activity in the investment securities portfolio resulted from a number of Government Agency Bonds being called during the first quarter and the Bank reinvested the proceeds into fixed-rate mortgage-backed securities. The Bank's covered call option program is designed for yield enhancement and to lessen the Bank's exposure to a potentially volatile stock market. In this program, the Bank purchases shares of qualified common stock and sells a call option against the investment. As required by SFAS 115, the Bank marks the common stock and related covered call option to market through current period earnings. Inasmuch as the Bank's equity investment privileges have been grandfathered by the FDIC, it intends to continue to maintain an equity stock portfolio. To provide direction, the Bank's Board of Directors has established upward limits and an investment policy which includes guidelines that the Bank's equity investments have a minimum quality rating of "A" by a widely recognized rating service; the policy also requires adequate diversification to avoid concentrations in lines of business and geographic regions. The following table presents a summary of the investments and other securities portfolios as of March 31, 1998 and December 31, 1997, fair values and unrealized gains and losses as of those dates. Table 5 - Investment & Other Securities ($ thousands) March 31, 1998 Amortized Unrealized Holding Fair Cost Gains Losses Value Available-for-Sale U.S. Government and Federal Agency Obligations $ 40,754 $ 154 $ 15 $ 40,893 Mortgage-Backed Securities 103,836 305 233 103,908 Equity Securities and Other 39,002 1,696 - 40,698 Total Available-for-Sale $183,592 $2,155 $248 $185,499 Trading Equity Securities $2,055 $44 $81 $2,018 December 31, 1997 Amortized Unrealized Holding Fair Cost Gains Losses Value Available-for-Sale U.S. Government and Federal Agency Obligations $ 55,122 $ 190 $ 55 $ 55,257 Mortgage-Backed Securities 85,543 461 56 85,948 Equity Securities and Other 36,091 1,429 58 37,462 Total Available-for-Sale $176,756 $2,080 $169 $178,667 Trading Equity Securities $1,976 $4 $150 $1,830
Loans Total loans, before reductions for deferred credits, fees and the allowance for credit losses, amounted to $427.8 million as of March 31, 1998, representing a $9.8 million or 2.2% decrease from the December 31, 1997 level of $437.6 million. The overall decrease in the loan portfolio was not significant. What was significant was the change in mix which was part of a strategy to increase yield while managing growth. Table 6 - Loan Portfolio ($ thousands) March 31, 1998 December 31, 1997 Real Estate Loans One-to-Four Family Adjustable Rate $269,036 62.89% $278,231 63.59% One-to-Four Fixed Rate 66,343 15.51% 64,510 14.74% One-to-Four Held-For-Sale 3,363 0.79% 5,311 1.21% Multi-Family 2,971 0.69% 5,398 1.24% Commercial Real Estate 56,457 13.20% 55,124 12.60% Home Equity Lines-of-Credit 7,707 1.80% 7,632 1.74% Home Improvement and Second Mortgage 2,995 0.70% 2,852 0.65% Land 564 0.13% 640 0.15% Construction 3,231 0.76% 2,942 0.67% Total 412,667 96.47% 422,640 96.59% Commercial Loans 7,854 1.84% 7,587 1.73% Consumer Loans Passbook 1,147 0.27% 1,508 0.34% Automobile Loans 2,213 0.52% 2,332 0.53% Credit Cards 1,479 0.35% 1,409 0.32% Other Consumer 2,406 0.55% 2,104 0.49% Total 7,245 1.69% 7,353 1.68% Total Loans, Gross 427,766 100.00% 437,580 100.00% Deferred Fees and Credits (553) (625) 427,213 436,955 Allowance for Credit Losses (5,576) (5,832) Total Loans, Net 421,637 431,123 One-to-four Family Held-For-Sale (3,363) (5,311) Loans, Net $418,274 $425,812
During the first quarter of 1998, the Bank's response to the increased level of demand for the 30-year residential fixed-rate mortgage was to utilize the correspondent loan program. Additionally, in conjunction with the management of the portfolio, the Bank sold or securitized $5.6 million, of which $5.3 million was identified as loans held-for-sale as of December 31, 1997. At March 31, 1998, the Bank has identified $3.4 million of residential loans held-for-sale. Non-Performing Assets/Asset Quality The Bank's level of non-performing assets continued to steadily decline during the years 1996, 1997 and continued into the first quarter of 1998. Total non- performing assets as of March 31, 1998 were $5.2 million or 0.78% of total assets. As of December 31, 1997 non-performing assets were $5.4 million, representing 0.83% of total assets. The Bank's Watch List is comprised of loans which have been identified by the Bank's credit analysis system as exhibiting more than usual risk of non-performance or loss. The Bank's Watch List was $7.9 million at March 31, 1998, compared to $11.7 million at December 31, 1997. Of the total non-performing assets, non-performing loans were $5.0 million as of March 31, 1998 compared to $4.8 million as of December 31, 1997. There were no troubled debt restructurings included in non-performing loans as of December 31, 1997 and March 31, 1998. The allowance for credit losses amounted to $5.6 million as of March 31, 1998 representing coverage of 111.3% compared to $5.8 million as of December 31, 1997, representing coverage of 120.3% of non-performing loans. The credit risk allowance for the FFB&T acquired loans was $577,000 as of March 31, 1998. Net charge-offs in the first three months of 1998 were $255,000 or 8 basis points of the average loan portfolio compared to $10,000 of recoveries for the three months ended March 31, 1997. The continued improvement in asset quality resulted in no need for a provision for credit losses during either period. Details of the Bank's asset quality are shown in the analysis provided by the following table. Asset Quality At March 31, At December 31, ($ thousands) 1998 1997 1997 1996 1995 Non-Performing Assets Non-Accrual Loans $5,011 $11,910 $4,847 $10,441 $12,598 Restructured Loans - - - - 472 Total Non-Performing Loans 5,011 11,910 4,847 10,441 13,070 Foreclosed Assets 192 631 574 858 4,267 Allowance for Estimated OREO Losses - - - - - Total OREO 192 631 574 858 4,267 Total Non-Performing Assets $5,203 $12,541 $5,421 $11,299 $17,337 Allowance for Credit Losses Balance at Beginning of Period $5,832 $7,334 $7,334 $4,170 $4,827 Provision for Credit Losses - - - 4,415 1,005 Allocated to FFB&T Acquired Loans - - - 1,000 - Charge-Offs (710) (346) (2,155) (2,488) (1,799) Recoveries 455 356 653 237 137 Net Charge-Offs (255) 10 (1,502) (2,251) (1,662) Balance at End of Period $5,577 $7,344 $5,832 $7,334 $4,170 Allowance for Estimated OREO Losses Balance at Beginning of Period $ - $ - $ - $ - $802 Provision for Estimated OREO Losses - - - 459 460 Charge-Offs - - - (459)(1,262) Balance at End of Period $ - $ - $ - $ - $ - Loans Receivable, gross End of Period 424,403 432,298 432,269 418,818 360,475 Average 429,892 421,715 435,610 403,207 323,072 Assets, end of Period 668,671 617,387 854,222 589,589 515,267 Ratios Allowance for Credit Losses to Total Loans 1.30% 1.70% 1.35% 1.75% 1.16% Net Charge-Offs to Average Loans 0.08% 0.00% 0.34% 0.56% 0.53% Non-Performing Loans to Total Loans 1.17% 2.76% 1.12% 2.49% 3.63% Non-Performing Assets to Total Assets 0.78% 2.03% 0.83% 1.92% 3.36% Allowance for Credit Losses to Non-Performing Loans 111.30% 61.66% 120.32% 70.24% 31.91%
Deposits Total deposits at March 31, 1998 were $455.9 million compared to $444.2 million at December 31, 1997 an increase of $11.7 million or 2.6%. The Bank continues to seek deposits with marketing and sales efforts concentrated on its new and diversified products. The Bank does not solicit, nor does it accept, brokered deposits. The following table presents a summary of deposits as of March 31, 1998 and December 31, 1997. Table 8 - Deposits March 31, 1998 December 31, 1997 ($ in thousands) Demand Deposits $28,054 6.2% $27,471 6.2% Savings Regular Savings 34,058 7.5% 29,455 6.6% Super Saviangs 45,696 10.0% 47,863 10.8% NOW 41,045 9.0% 37,287 8.4% Money Market 67,619 14.8% 55,541 12.5% Escrow Deposits 3,051 0.7% 4,727 1.1% Certificates Certificate Accounts 190,761 41.8% 204,129 45.9% Money Market Certificates 45,615 10.0% 37,738 8.5% Total Deposits $455,899 100.0% $444,211 100.0%
Federal Home Loan Bank of Boston Advances and Other Borrowings The Bank continues to utilize the FHLB as a source of funds alternative to the traditional deposit account relationship. As of March 31, 1998 borrowings totaled $105.9 million compared to $110.9 million as of December 31, 1997. In addition, the Bank increased the use of the reverse repurchase agreement as a means to borrow funds. These agreements are essentially collateralized borrowings, similar to FHLB borrowings, and to the extent that the rates and terms are more favorable, the Bank utilizes the reverse repurchase agreement in lieu of an FHLB borrowing. As of March 31, 1998, borrowings outstanding under reverse repurchase agreements were $45.6 million compared to $40.4 million as of December 31, 1997. The Company has reflected the guaranty of the ESOP loan as an obligation in accordance with applicable accounting requirements. This loan was a five-year adjustable rate loan (convertible to a fixed rate at the Bank's option) with interest and principal payable monthly. In 1997 the Company refinanced the loan into a two-year fixed rate loan. The outstanding balance was $243,500 as of March 31, 1998. Borrowings from the FHLB, reverse repurchase agreements and the ESOP loan amounted to $151.8 million as of March 31, 1998 at a weighted average rate of 5.8% and a weighted average maturity of 2.2 years, compared to $151.3 million at a weighted average rate of 5.8% and a weighted average maturity of 1.4 years. As a percentage of total assets, these borrowings amounted to 22.7% as of March 31, 1998 compared to 23.1% as of December 31, 1997. As a means of financing the repurchases of its stock, the Company arranged for a line of credit from another bank in the amount of $15.0 million. As of March 31, 1998 there was $3.8 million in the outstanding balance. Shareholders' Equity Shareholders' equity at March 31, 1998 decreased to $54.3 million from $56.1 million at December 31, 1997, reflecting tier 1 regulatory leverage capital ratios of 7.8% and 8.2%, respectively. As of March 31, 1998, in conjunction with the Company's stock repurchase program, the Company had acquired 90,500 shares at a cost of $3.8 million. The following table indicates required and actual levels of capital for the Bank and the Company as of March 31, 1998 and December 31, 1997. Regulatory Capital Actual Required March 31, 1998 December 31, 1997 Company Tier 1 Risk-Based Capital 4.0% 14.7% 15.4% Total Risk-Based Capital 8.0% 15.9% 16.6% Tier 1 Leverage Capital 4.0% - 5.0% 7.8% 8.2% Bank Tier 1 Risk-Based Capital 4.0% 14.6% 14.3% Total Risk-Based Capital 8.0% 15.8% 15.5% Tier 1 Leverage Capital 4.0% - 5.0% 7.7% 7.6%
Liquidity and Interest Rate Management Liquidity is the ability of the Bank to meet its cash flow requirements arising from fluctuations in loans, securities, deposits, and other borrowings. At March 31, 1998 the Bank's primary liquidity, consisting of cash, cash equivalents, marketable securities with maturities of one year or less and loans held for sale was $81.5 million or 12.2% of total assets. In addition, liquidity is the ability of the Company to meet its cash flow requirements to pay operating expenses, dividends, and other payments as may be necessary. The Company's liquidity is provided by dividends from its wholly owned subsidiary, the Bank. The Bank's ability to pay dividends is restricted by Connecticut law to the Bank's net profits in the current year, plus retained net profits from the two most recent fiscal years. The Company may effect borrowings from time to time to meet specific liquidity needs. The Bank's primary sources of funds are deposits and other borrowings, primarily from the FHLB. The Bank monitors its liquidity in accordance with policy guidelines established by the Asset and Liability Management Policy and regulatory standards, administered by the Asset and Liability Management Committee of the Bank. As of March 31, 1998, the Bank had approved loan commitments outstanding for one-to four-family loans of $8.2 million. In addition, there was $8.3 million of unused credit under the home equity line-of-credit facility, $1.0 million under the overdraft protection credit line facility, and $2.4 million in unused credit card lines. The unadvanced portion of residential construction loans amounted to $1.9 million. There were $3.1 million in approved loan commitments and $2.2 million in approved line-of-credit commitments in the Commercial Lending Department, $6.1 million in unused commercial lines of credit and $0.2 million in commercial letters of credit outstanding. Management believes that the Company's liquidity is currently in a position to meet normal operating needs. To meet unexpected demands, the Bank maintains a line of credit with the FHLB. At March 31, 1998, this line of credit was $11.8 million, of which no amount was outstanding. Management also believes that the capital position of the Company and the Bank is currently adequate to meet present needs and anticipated growth, and does not currently plan to raise capital from external sources in the near future. (See Shareholders' Equity). Market Price of Common Stock NSS Bancorp (Norwalk Savings Society prior to October 1, 1997) trades on the NASDAQ National Market under the symbol "NSSY". The following table sets forth the high/low price range as reported by NASDAQ and dividends paid for the periods indicated: 1998 1997 1996 High Low Div. High Low Div. High Low Div. First Quarter $48.50 $36.63 $0.10 $26.25 $22.94 $0.05 $22.00 $18.75 $ - Second Quarter $ - $ - $ - $31.00 $23.00 $0.10 $22.25 $17.94 $0.05(a) Third Quarter $ - $ - $ - $37.50 $28.25 $0.10 $23.13 $20.88 $0.05 Fourth Quarter $ - $ - $ - $40.25 $31.75 $0.10 $24.88 $22.75 $0.05
(a) The Bank began paying dividends in the second quarter of 1996. At March 31, 1998 NSS Bancorp had approximately 700 shareholders of record. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS There has been no material change from December 31, 1997 to March 31, 1998, in either the qualitative or quantitative market risks, from the disclosures provided in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. NSS BANCORP, INC. SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS FINANCIAL CONDITION DATA March 31, December 31, ($ thousands) 1998 1997 1997 1996 1995 Total assets $668,671 $617,367 $654,222 $589,589 $515,267 Investment securities 189,535 156,161 180,497 140,101 123,865 Loans receivable 423,850 431,590 432,269 418,818 360,475 Allowance for credit losses (5,577) (7,334) (5,832) (7,334) (4,170) Deposits 455,899 421,700 444,211 423,290 402,797 Borrowed funds 156,299 144,377 151,671 114,043 67,123 Shareholders' equity 54,268 49,732 56,138 49,353 43,595 OREO, net 192 631 574 858 4,267 Non-accrual/non-performing loans 5,011 11,910 4,847 10,441 13,070 Total non-performing assets 5,203 12,541 5,421 11,299 17,337
EARNINGS DATA Three Months March31, Years ended December 31, 1998 1997 1997 1996 1995 Net interest income $5,105 $4,660 $19,373 $17,615 $14,617 Provision for credit losses 0 0 0 4,415 2,105 Net gains on sales of assets and liabilities 330 25 1,459 4,156 798 Other non-interest income 1,005 835 3,787 2,687 1,897 OREO related costs (gain), net 0 (96) (103) 1,362 1,415 Other non-interest expense 4,182 3,881 15,827 14,104 11,304 Income before income tax provisions 2,258 1,735 8,895 4,577 2,488 Current tax provision 678 457 1,973 175 10 Deferred tax provision (benefit) 142 234 1,357 (1,300) (1,200) Income before ADP program 1,438 1,044 5,565 5,702 3,678 Effect of ADP program - - - - 1,100 Net income (loss) $1,438 $1,044 $5,565 $5,702 $4,778 Income per share: Basic $0.59 $0.43 $2.31 $2.39 $2.04 Income per share: Assuming Dilution $0.56 $0.42 $2.20 $2.34 $2.03
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS (CONT.) PERFORMANCE, CAPITAL AND Three months March 31,Year Ended December 31, ASSET QUALITY RATIO 1998 1997 1997 1996 1995 PERFORMANCE: Tangible book value per share $22.26 $20.69 $22.44 $19.90 $18.44 at period end Return on average assets: Before ADP program 0.87% 0.69% 0.87% 0.97% 0.76% After ADP program n/a n/a n/a n/a 0.99% Return on average equity Before ADP program 10.11% 8.21% 10.54% 12.52% 8.97% After ADP program n/a n/a n/a n/a 11.65% Net interest margin 3.20% 3.17% 3.11% 3.12% 3.17% CAPITAL: Tier 1 leverage 7.75% 8.03% 8.18% 7.90% 8.43% Total risk-based 15.90% 15.94% 16.61% 17.00% 17.90% ASSET QUALITY: Non-performing assets to total assets 0.78% 2.03% 0.83% 1.92% 3.36% Non-performing loans to total loans 1.17% 2.76% 1.12% 2.50% 3.63% Allowance for credit losses to non-performing loans 111.30% 61.66% 120.32% 70.24% 31.91% Allowance for credit losses to 1.30% 1.70% 1.35% 1.75% 1.16% loans receivable
PART II. OTHER INFORMATION Item 1. Legal Proceedings Not applicable 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 Not applicable Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K 1. February 8, 1998....The Company reported on the preliminary results of litigation brought by a significant shareholder for the purpose of obtaining access to the Company's shareholder list and other data. 2. February 25, 1998....The Company reported the results of the Company's request to the Court for clarification or modification on certain of the issues subject to the litigation reported on Form 8-K on February 8, 1998. 3. March 31, 1998......The Company announced that its Board of Directors had approved the extension of its stock repurchase program until December 31, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned duly authorized. NSS BANCORP, Inc. Registrant Date : May 14, 1998 by: /s/ Robert T. Judson Robert T. Judson President & CEO Date : May 14, 1998 by: /s/ Marcus I. Braverman, CPA Marcus I. Braverman Sr. VP, Treasurer & CFO EX-27 2
9 This schedule contains summary financial information extracted from the registrant's March 31, 1998 unaudited balance sheet, income statement and cash flow statement, and notes thereto, and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1998 MAR-31-1998 18,622,000 13,778,000 3,000,000 2,018,000 185,499,000 0 0 423,850,000 5,577,000 668,671,000 455,899,000 0 2,205,000 156,299,000 0 0 25,000 54,243,000 668,671,000 8,407,000 3,273,000 0 11,680,000 4,310,000 6,575,000 5,105,000 0 211,000 4,182,000 2,258,000 2,258,000 0 0 1,438,000 0.59 0.56 3.20 5,011,000 0 0 7,900,000 5,832,000 710,000 455,000 5,577,000 5,577,000 0 0
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