-----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, GZUxGgE9yJm7GG1a1LUV9eT3voDeC0JXocKbU8I55Aj0Bk7inE/rVUyPUNTMYOIb Wn8L804JDVcNt+u56Dqrig== /in/edgar/work/20000814/0001005477-00-005756/0001005477-00-005756.txt : 20000921 0001005477-00-005756.hdr.sgml : 20000921 ACCESSION NUMBER: 0001005477-00-005756 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GASTON FEDERAL BANCORP INC CENTRAL INDEX KEY: 0001051871 STANDARD INDUSTRIAL CLASSIFICATION: [6035 ] IRS NUMBER: 562063438 STATE OF INCORPORATION: SC FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23971 FILM NUMBER: 697854 BUSINESS ADDRESS: STREET 1: 245 WEST MAIN STREET CITY: GASTONIA STATE: NC ZIP: 28053 MAIL ADDRESS: STREET 1: 245 WEST MAIN STREET CITY: GASTONIA STATE: NC ZIP: 28053 10QSB 1 0001.txt FORM 10-QSB 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 June 30, 2000 |_| 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 0-23971 GASTON FEDERAL BANCORP, INC. ---------------------------- (Exact name of registrant as specified in its charter) United States 56-2063438 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 245 West Main Avenue, Gastonia, North Carolina 28052-4140 --------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (704)-868-5200 -------------- - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check |X| 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 |_| APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: There were 4,218,934 shares of the Registrant's common stock outstanding as of August 8, 2000. GASTON FEDERAL BANCORP, INC. INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements ........................... 2 Consolidated Statements of Financial Condition as of June 30, 2000 and September 30, 1999 ............................ 2 Consolidated Statements of Operations for the three and nine months ended June 30, 2000 and 1999 ........................ 3 Consolidated Statements of Comprehensive Income for the nine months ended June 30, 2000 and 1999 ........................ 4 Consolidated Statements of Cash Flows for the nine months ended June 30, 2000 and 1999 .......................................... 5 Notes to Consolidated Financial Statements ........................ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................... 8 PART II. OTHER INFORMATION ................................................ 12 1 PART I. FINANCIAL INFORMATION ITEM 1. Consolidated Financial Statements Gaston Federal Bancorp, Inc. and Subsidiary Consolidated Statements of Financial Condition (unaudited) (in thousands)
June 30, September 30, 2000 1999 --------- ------------- Assets Cash and cash equivalents ......................................... 2,814 12,583 Investment securities available-for-sale, at fair value ........... 19,948 15,777 Investment securities held-to-maturity, at amortized cost ......... 12,864 12,865 Mortgage-backed securities available-for-sale, at fair value ...... 17,703 16,167 Mortgage-backed securities held-to-maturity, at amortized cost .... 3,003 3,825 Loans, net ........................................................ 177,267 168,044 Premises and equipment, net ....................................... 3,886 2,503 Accrued interest receivable ....................................... 1,125 1,244 Federal Home Loan Bank stock ...................................... 2,177 1,775 Other assets ...................................................... 4,701 2,670 --------- --------- Total assets .................................................... $ 245,488 $ 237,453 ========= ========= Liabilities and Equity Deposits .......................................................... $ 160,821 $ 159,425 Advances from borrowers for taxes and insurance ................... 1,004 761 Borrowed money .................................................... 43,050 35,500 Other liabilities ................................................. 2,206 2,059 --------- --------- Total liabilities ............................................... 207,081 197,745 Retained earnings, substantially restricted ....................... 23,477 22,653 Common stock and additional paid in capital, net of ESOP loan ..... 15,174 16,879 Unrealized gain/(loss) on securities available-for-sale, net of tax (244) 176 --------- --------- Total equity .................................................... 38,407 39,708 --------- --------- Total liabilities and equity ...................................... $ 245,488 $ 237,453 ========= =========
See accompanying notes to consolidated financial statements. 2 Gaston Federal Bancorp, Inc. and Subsidiary Consolidated Statements of Operations (unaudited) (in thousands, except per share data)
Three Months Nine Months Ended June 30, Ended June 30, ----------------------- ----------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Interest income Loans ............................................... $ 3,306 $ 3,088 $ 9,569 $ 8,902 Investment securities ............................... 590 562 1,597 1,856 Mortgage-backed and related securities .............. 275 236 973 606 ---------- ---------- ---------- ---------- Total interest income ............................. 4,171 3,886 12,139 11,364 Interest Expense Deposits ............................................ 1,766 1,602 5,104 4,738 Borrowed funds ...................................... 619 398 1,637 1,060 ---------- ---------- ---------- ---------- Total interest expense .............................. 2,385 2,000 6,741 5,798 ---------- ---------- ---------- ---------- Net interest income ................................. 1,786 1,886 5,398 5,566 Provision for loan losses ........................... 8 25 23 90 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 1,778 1,861 5,375 5,476 Noninterest Income Service charges on deposit accounts ................. 150 103 413 262 Gain on sale of assets .............................. 226 1,198 226 1,342 Other income ........................................ 377 164 836 459 ---------- ---------- ---------- ---------- Total noninterest income .......................... 753 1,465 1,475 2,063 Noninterest Expense Compensation and benefits ........................... 995 1,807 2,702 3,168 Occupancy and equipment expense ..................... 152 104 472 313 Other expenses ...................................... 427 461 1,316 1,440 ---------- ---------- ---------- ---------- Total noninterest expense ......................... 1,574 2,372 4,490 4,921 Income before income taxes .......................... 957 954 2,360 2,618 Provision for income taxes .......................... 338 338 783 939 ---------- ---------- ---------- ---------- Net income .......................................... $ 619 $ 616 $ 1,577 $ 1,679 ========== ========== ========== ========== Basic earnings per share ............................ $ 0.15 $ 0.14 $ 0.37 $ 0.38 Diluted earnings per share .......................... $ 0.15 $ 0.14 $ 0.37 $ 0.38 Basic weighted average outstanding shares ........... 4,234,044 4,461,911 4,283,731 4,464,578 Diluted weighted average outstanding shares ......... 4,234,044 4,473,623 4,285,206 4,468,482 Dividends paid per share ............................ $ 0.06 $ 0.055 $ 0.18 $ 0.155
3 Gaston Federal Bancorp, Inc. and Subsidiary Consolidated Statements of Comprehensive Income (unaudited) (in thousands)
Nine Months Ended June 30, ------------------ 2000 1999 ------- ------- Net income .............................................................. $ 1,577 $ 1,679 Other comprehensive income, net of tax: Unrealized gains on securities: Unrealized holding gains/(losses) arising during period ............ (275) (271) Reclassification adjustment for (gains)/losses included in net income (145) (753) ------- ------- Other comprehensive income ............................................ (420) (1,024) ------- ------- Comprehensive income .................................................... $ 1,157 $ 655 ------- -------
4 Gaston Federal Bancorp, Inc. and Subsidiary Consolidated Statements of Cash Flows (unaudited) (in thousands)
Nine Months Ended June 30, -------------------- 2000 1999 -------- -------- Cash flows from operating activities: Net income .................................................. $ 1,577 $ 1,679 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses ................................. 23 90 Depreciation .............................................. 256 245 (Gain) on sale of investment securities ................... (227) (1,177) (Gain) loss on sale of other assets ....................... 1 (138) (Increase) in other assets ................................ (1,969) (170) Increase (decrease) in other liabilities .................. 146 (957) -------- -------- Net cash provided by (used for) operating activities .... (193) (428) -------- -------- Cash flows from investing activities: Net (increase) in loans receivable .......................... (9,092) (30,566) Sale of investment securities ............................... 2,050 5,727 Sale of mortgage-backed securities .......................... 615 0 Maturities and prepayments of investment securities ......... 2,936 7,734 Maturities and prepayments of mortgage-backed securities .... 2,820 3,705 Purchases of investments .................................... (9,350) (10,639) Purchases of mortgage-backed securities ..................... (4,149) (6,480) Net cash flows from other investing activities .............. (2,041) (746) -------- -------- Net cash provided by (used for) investment activities ... (16,211) (31,265) -------- -------- Cash flows from financing activities: Net increase in deposits .................................... 1,396 10,526 Dividends to stockholders ................................... (753) (697) Repurchase of common stock .................................. (1,801) (2,427) Net increase in borrowed money .............................. 7,550 13,500 (Decrease) in advances from borrowers for insurance and taxes 244 (334) -------- -------- Net cash provided by financing activities ............... 6,636 21,236 -------- -------- Net (decrease) in cash and cash equivalents ................... (9,769) (10,457) Cash and cash equivalents at beginning of period .............. 12,583 13,798 -------- -------- Cash and cash equivalents at end of period .................... $ 2,814 $ 3,341 ======== ========
5 GASTON FEDERAL BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A - Basis of Presentation In management's opinion, the financial information, which is unaudited, reflects all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the financial information as of and for the three and nine month periods ended June 30, 2000 and 1999, in conformity with generally accepted accounting principles. The financial statements include the accounts of Gaston Federal Bancorp, Inc. (the "Company") and its wholly-owned subsidiary, Gaston Federal Bank (the "Bank"). Operating results for the three and nine month periods ended June 30, 2000, are not necessarily indicative of the results that may be expected for future periods. The organization and business of the Company, accounting policies followed, and other information are contained in the notes to the consolidated financial statements of the Company as of and for the years ended September 30, 1999 and 1998, filed as part of the Company's annual report on Form 10-KSB. These consolidated financial statements should be read in conjunction with the annual consolidated financial statements. Note B - Earnings per Share Earnings per share has been determined under the provisions of the Statement of Financial Accounting Standards No. 128, Earnings Per Share. For the quarters ended June 30, 2000 and 1999, basic earnings per share has been computed based upon the weighted average common shares outstanding of 4,234,044 and 4,461,911, respectively. For the nine months ended June 30, 2000 and 1999, basic earnings per share has been computed based upon the weighted average common shares outstanding of 4,285,206 and 4,464,578, respectively. The only potential stock of the Company as defined in the Statement of Financial Accounting Standards No. 128, Earnings Per Share, is stock options granted to various directors and officers of the Bank. The following is a summary of the diluted earnings per share calculation for the three and nine months ended June 30, 2000, and 1999: (in thousands, except per share data)
Three Months Nine Months Ended June 30, Ended June 30, ----------------------- ----------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Net income ........................ $ 619 $ 616 $ 1,577 $ 1,679 Weighted average outstanding shares 4,234,044 4,461,911 4,283,731 4,464,578 Dilutive effect of stock options .. 0 11,712 1,475 3,904 ---------- ---------- ---------- ---------- Weighted average diluted shares ... 4,234,044 4,473,623 4,285,206 4,468,482 Diluted earnings per share ....... $ 0.15 $ 0.14 $ 0.37 $ 0.38
Options were excluded from the calculation of diluted earnings per share for the three months ended June 30, 2000, because the exercise prices of $12.00 for 192,569 shares and $13.00 for 10,000 shares exceeded the average market price of $10.87 for the period. There was no potential stock outstanding as of June 30, 1999. 6 Note C - Stock Compensation Plans On April 12, 1999, the Company's shareholders, among other actions, approved the Gaston Federal Bank 1999 Recognition and Retention Plan. Subsequently, 84,534 shares of common stock were awarded under the plan to directors and management. All such awards vested during the quarter ended June 30, 1999. In addition, the Company's shareholders approved the Gaston Federal Bank 1999 Stock Option Plan that provided for the issuance of 211,335 options for directors and officers to purchase the Company's common stock. As of June 30, 2000, 202,569 options had been awarded under the plan at a weighted average exercise price of $12.05 and a weighted average contractual life of 106 months. There were 111,627.6 options fully vested as of June 30, 2000. The Company applies the provisions of Accounting Principles Board Opinion No. 25 in accounting for the Stock Option Plan described above and, accordingly, no compensation expense has been recognized in connection with the granting of the stock options. 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements provided that the Company notes that a variety of factors could cause the Company's actual results to differ materially from the anticipated results expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, and results of the Company's business include, but are not limited to, changes in economic conditions, changes in interest rates, and changes in laws and regulations. Accordingly, past results and trends should not be used by investors to anticipate future results or trends. Statements included in this report should be read in conjunction with the Company's Annual Report on Form 10-KSB and are incorporated into this discussion by this reference. Comparison of Financial Condition Assets. Total assets of the Company increased by $8.0 million, or 3.3%, from $237.5 million as of September 30, 1999, to $245.5 million as of June 30, 2000. During the nine month period ended June 30, 2000, cash and cash equivalents decreased by $9.8 million to $2.8 million. These funds were used to fund $9.2 million in additional loans outstandings, $2.0 million investment in bank-owned life insurance, $1.8 million in common stock repurchases, $1.0 million in facilities and equipment for the new Dallas branch, and $753,000 in cash dividends. During the period, mortgage loans decreased by $5.6 million, or 3.9%, to $136.9 million, while nonmortgage loans increased by $14.8 million, or 57.8%, to $40.4 million. This shift in the loan portfolio composition reflects management's efforts to make the Company's balance sheet more reflective of a community bank. Management plans to continue to grow the loan portfolio in a safe and sound manner with an emphasis on short-term, high-yielding nonmortgage loans. Also during the period, investment securities increased by $4.1 million to $32.8 million, and mortgage-backed securities increased by $715,000 to $20.7 million. Liabilities. Total liabilities increased by $9.4 million, or 4.5%, from $197.7 million as of September 30, 1999, to $207.1 million as of June 30, 2000. The primary reason for the change was a $7.6 million increase in borrowed money to $43.1 million and a $1.4 million increase in total deposits to $160.8 million. Management plans to continue in its efforts to gain deposit market share through new product development, aggressive marketing, and branch expansion with an emphasis on demand deposits. The borrowed money is primarily comprised of various callable and fixed-term Federal Home Loan Bank advances with a weighted average interest rate of 5.8%. Equity. Total equity decreased by $1.3 million, or 3.4%, from $39.7 million as of September 30, 1999, to $38.4 million as of June 30, 2000. This decrease was primarily due to the repurchase of 150,700 shares of common stock for $1.8 million at a weighted average price of $11.95 per share, the payment of $753,000 in cash dividends, or $0.18 per share, and a $420,000 reduction in unrealized gains on available for sale securities. This decrease in equity was partly offset by $1,577,000 in earnings for the period. Management plans to continue repurchasing its common stock in the open market when such actions are considered to be financially prudent. The Company has been authorized to repurchase a total of 303,894 shares of common stock, or 131,976 additional shares. 8 Comparison of Results of Operations for the Three Months Ended June 30, 2000 and 1999 General. Net income for the Company for the three months ended June 30, 2000, amounted to $619,000, or $0.15 per share, as compared to $616,000, or $0.14 per share, for the three months ended June 30, 1999. Net interest income. Net interest income decreased slightly to $1.8 million for the three months ended June 30, 2000, from $1.9 million for the three month period ended June 30, 1999. Interest income increased by $285,000, primarily due to a $9.0 million increase in total loans and a $2.1 million increase in investment and mortgage-backed securities, coupled with an increase in interest rates. In addition, interest expense increased by $385,000, primarily due to a $6.4 million increase in total deposits and a $10.0 million increase in borrowed money, coupled with an increase in interest rates. Provision for loan losses. The provision for loan losses amounted to $7,500 for the three months ended June 30, 2000, as compared to $25,000 for the three months ended June 30, 1999. This represents a decrease of $17,500. The amount of the provision for loan losses was reduced, in part, due to an overall reduction in the percentage of nonperforming assets to 0.06% of total assets as of June 30, 2000, from 0.23% of total assets as of June 30, 1999. The ratio of loan loss reserves to gross loans was 0.86% as of June 30, 2000, and 0.92% as of June 30, 1999. Noninterest income. Total operating noninterest income amounted to $527,000 for the three months ended June 30, 2000, as compared to $267,000 for the three months ended June 30, 1999. This increase of $260,000, or 97.4%, was primarily due to additional commissions paid on the sale of uninsured financial products through the Bank's wholly-owned subsidiary and additional fee income derived from loan and deposit products. Management plans to continue in its efforts to increase its outstanding balance of fee-generating demand deposit accounts through targeted advertising and branch expansion. Outstanding demand deposit accounts increased by 20.2% during the past 12 months to $20.3 million as of June 30, 2000. Noninterest income for the quarter ended June 30, 2000, also included a $226,000 gain on the sale of investment securities and real estate owned. Noninterest income for the quarter ended June 30, 1999, included a $1.2 million gain on the sale of investment securities and mortgage loans. These items are not recurring and should not be considered a part of operating income. Noninterest expense. Total noninterest expense amounted to $1.6 million for the three months ended June 30, 2000, as compared to $2.4 million for the three months ended June 30, 1999. During the June 1999 quarter, the Company incurred a nonrecurring $1.0 million increase in compensation as a result of the implementation of the 1999 Gaston Federal Bank Recognition and Retention Plan that was adopted by the shareholders in April 1999. Excluding this nonrecurring item, noninterest expense increased by $202,000, or 14.8%. This increase was primarily due to the expenses associated with the opening of the Bank's fifth full-service branch office in February 2000 and the operation of the Bank's new loan production office that opened in October 1999. The Company plans to break ground on its sixth full-service branch later this summer with an estimated completion date of December 2000. Income taxes. Income taxes amounted to $338,000, or 35.3% of taxable income, for the three month period ended June 30, 2000, as compared to $338,000, or 35.4% of taxable income, for the three month period ended June 30, 1999. 9 Comparison of Results of Operations for the Nine Months Ended June 30, 2000 and 1999 General. Net income for the Company for the nine months ended June 30, 2000, amounted to $1,577,000, or $0.37 per share, as compared to $1,679,000, or $0.38 per share, for the nine months ended June 30, 1999. Net interest income. Net interest income decreased slightly to $5.4 million for the nine months ended June 30, 2000, from $5.5 million for the nine months ended June 30, 1999. Interest income increased by $775,000, or 6.8%, primarily due to a $9.0 million increase in total loans and a $2.1 million increase in investment and mortgage-backed securities, coupled with an increase in interest rates. In addition, interest expense increased by $943,000, or 16.3%, primarily due to a $6.4 million increase in total deposits and a $10.0 million increase in borrowed money, coupled with an increase in interest rates. Provision for loan losses. The provision for loan losses amounted to $22,500 for the nine months ended June 30, 2000, as compared to $90,000 for the nine months ended June 30, 1999. This represents a decrease of $67,500. The amount of the provision for loan losses was reduced, in part, due to an overall reduction in the percentage of nonperforming assets to 0.06% of total assets as of June 30, 2000, from 0.23% of total assets as of June 30, 1999. The ratio of loan loss reserves to gross loans was 0.86% as of June 30, 2000, and 0.92% as of June 30, 1999. Noninterest income. Total operating noninterest income amounted to $1,249,000 for the nine months ended June 30, 2000, as compared to $721,000 for the nine months ended June 30, 1999. This increase of $528,000, or 73.2%, was primarily due to additional commissions paid on the sale of uninsured financial products through the Bank's wholly-owned subsidiary and additional fee income derived from loan and deposit products. Management plans to continue in its efforts to increase its outstanding balance of fee-generating demand deposit accounts through targeted advertising and branch expansion. Outstanding demand deposit accounts increased by 20.2% during the past 12 months to $20.3 million as of June 30, 2000. Noninterest income for the nine month period ended June 30, 2000, also included a $226,000 gain on the sale of investment securities and real estate owned. Noninterest income for the nine month period ended June 30, 1999, included a $1.3 million gain on the sale of investment securities and mortgage loans. These items are not recurring and should not be considered a part of operating income. Noninterest expense. Total noninterest expense amounted to $4.5 million for the nine months ended June 30, 2000, as compared to $4.9 million for the nine months ended June 30, 1999. During the June 1999 period, the Company incurred a nonrecurring $1.0 million increase in compensation as a result of the implementation of the 1999 Gaston Federal Bank Recognition and Retention Plan that was adopted by the shareholders in April 1999. Excluding this nonrecurring item, noninterest expense increased by $568,000, or 14.5%. This increase was primarily due to the expenses associated with the opening of the Bank's fifth full-service branch office in February 2000 and the operation of the Bank's new loan production office that opened in October 1999. The Company plans to break ground on its sixth full-service branch later this summer with an estimated completion date of December 2000. Income taxes. Income taxes amounted to $783,000, or 33.2% of taxable income, for the nine month period ended June 30, 2000, as compared to $939,000, or 35.9% of taxable income, for the nine month period ended June 30, 1999. This represents a decrease of $156,000, or 16.6%. This difference was primarily due to a $258,000 decrease in net income before taxes for the nine months ended June 30, 2000, and an increase in interest income from tax-advantaged securities such as bank-qualified municipal securities, government agency securities, and bank-owned life insurance. 10 Liquidity and Capital Resources The objective of the Bank's liquidity management is to ensure the availability of sufficient cash flows to meet all financial commitments and to capitalize on opportunities for expansion. Liquidity management addresses the Bank's ability to meet deposit withdrawals on demand or at contractual maturity, to repay borrowings as they mature, and to fund new loans and investments as opportunities arise. The Bank's primary sources of internally generated funds are principal and interest payments on loans receivable and cash flows generated from operations. External sources of funds include increases in deposits and advances from the Federal Home Loan Bank of Atlanta. The Bank is required under applicable federal regulations to maintain specified levels of liquid investments in qualifying types of investments having maturities of five years or less. Current OTS regulations require that a savings bank maintain liquid assets of not less than 4% of its average daily balance of net withdrawable deposit accounts and borrowings payable in one year or less. Monetary penalties may be imposed for failure to meet applicable liquidity requirements. At June 30, 2000, the Bank's liquidity, as measured for regulatory purposes, was 16.1%, or $20.0 million in excess of the minimum OTS requirement. The Bank is subject to various regulatory capital requirements administered by the banking regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly discretionary actions by the regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classifications are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors. As of June 30, 2000, Gaston Federal Bank's level of capital substantially exceeded all applicable regulatory requirements. 11 PART II. OTHER INFORMATION Legal Proceedings There are various claims and lawsuits in which the Bank is periodically involved incidental to the Bank's business. In the opinion of management, no material loss is expected from any of such pending claims or lawsuits. Changes in Securities Not applicable. Defaults Upon Senior Securities Not applicable. Submission of Matters to a Vote of Security Holders There were no meetings of the Company's shareholders during the quarter ended June 30, 2000. Exhibits and Report on Form 8-K. No Form 8-K reports were filed during the quarter. 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 thereunto duly authorized. GASTON FEDERAL BANCORP, INC. Date: August 9, 2000 By: /s/ Kim S. Price -------------------------------------- Kim S. Price President and Chief Executive Officer Date: August 9, 2000 By: /s/ Gary F. Hoskins -------------------------------------- Gary F. Hoskins Senior Vice President, Chief Financial Officer and Treasurer 13 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
9 1,000 9-MOS SEP-30-2000 OCT-01-1999 JUN-30-2000 2,814 0 0 0 19,948 12,864 12,111 177,267 1,529 245,488 160,821 10,550 2,206 32,500 0 0 15,174 23,233 245,488 9,569 1,597 973 12,139 5,104 6,741 5,398 23 226 4,490 2,360 2,360 0 0 1,577 0.37 0.37 2.6 144 0 0 1,453 1,522 0 0 1,529 1,529 0 0
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