-----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, FsUAckp+ApweW9eEoEfAWqRC2xcbZneorFeetyMydHUTBboG0XI/jInU2Xepx16w 1axuqqfdvxMDcc1UGsTgfg== 0000906197-99-000063.txt : 19990513 0000906197-99-000063.hdr.sgml : 19990513 ACCESSION NUMBER: 0000906197-99-000063 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COHOES BANCORP INC CENTRAL INDEX KEY: 0001070321 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25027 FILM NUMBER: 99618524 BUSINESS ADDRESS: STREET 1: 75 REMSEN STREET CITY: COHOES STATE: NY ZIP: 12047 BUSINESS PHONE: 5182336500 MAIL ADDRESS: STREET 1: 75 REMSEN STREET CITY: COHOES STATE: NY ZIP: 12047 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, 1999 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: 00025027 COHOES BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware 14-1807865 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 75 Remsen Street, Cohoes, New York 12047 (Address of principal executive offices) (Zip Code) (518)233-6500 (Registrant's telephone number, including area code) 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. [ X ] Yes [ ] No As of May 3,1999, there were 9,535,225 shares of the registrant's common stock outstanding. 1 FORM 10-Q Cohoes Bancorp, Inc. INDEX Page PART 1 - FINANCIAL INFORMATION Number Item 1. Financial Statements Consolidated Statements of Financial Condition at March 31, 1999 and June 30, 1998 3 Consolidated Statements of Income for the three and nine months ended March 31, 1999 and 1998 4-5 Consolidated Statements of Changes in Stockholders' Equity for the nine months ended March 31, 1999 and 1998 6 Consolidated Statements of Cash Flows for the nine months ended March 31, 1999 and 1998 7 Notes to Consolidated Interim Financial Statements 8-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-21 Item 3. Quantitative and Qualitative Disclosures about Market Risk 22 PART II - OTHER INFORMATION Item 1. Legal Proceedings 22 Item 2. Changes in Securities and Use of Proceeds 22 Item 3. Defaults Upon Senior Securities 22 Item 4. Submission of Matters to a Vote of Security Holders 22 Item 5. Other Information 22 Item 6. Exhibits and Reports on Form 8-K 22 Signature Page 23 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements COHOES BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) March June 1999 1998 ASSETS: (In thousands) CASH AND CASH EQUIVALENTS: Cash and due from banks $ 8,653 $ 6,891 Federal funds sold 15,510 5,000 Interest-bearing deposits with banks 330 576 Total cash and cash equivalents 22,731 14,229 MORTGAGE LOANS HELD FOR SALE - 38 SECURITIES AVAILABLE FOR SALE, amortized cost of 43,147 48,720 $43,084 and $48,701 at March 31, 1999 and June 30, 1998, respectively INVESTMENT SECURITIES, Approximate fair value of 54,921 45,424 $55,027 and $45,547 at March 31, 1999 and June 30, 1998, respectively NET LOANS RECEIVABLE 489,527 412,759 ACCRUED INTEREST RECEIVABLE 3,687 3,482 BANK PREMISES AND EQUIPMENT 7,639 7,303 OTHER REAL ESTATE OWNED 507 509 MORTGAGE SERVICING RIGHTS 892 1,042 OTHER ASSETS 5,168 2,210 Total assets $ 628,219 $ 535,716 LIABILITIES AND STOCKHOLDERS' EQUITY: LIABILITIES: Due to depositors $ 429,004 $ 449,541 Mortgagors' escrow deposits 6,146 8,994 Borrowings 49,263 19,897 Other liabilities 5,376 4,002 Total liabilities 489,789 482,434 Commitments and contingent liabilities STOCKHOLDERS' EQUITY: Common stock 95 - Additional paid in capital 93,018 - Retained earnings 54,035 53,270 Unallocated common stock held by ESOP (8,757) - Accumulated other comprehensive income, net 39 12 Total stockholders' equity 138,430 53,282 Total liabilities and stockholders' $ 628,219 $ 535,716 equity See accompanying notes to consolidated interim financial statements. 3 COHOES BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the three months ended March 31, 1999 1998 (In thousands, except per share amounts) INTEREST INCOME: Loan receivable $ 9,278 $8,269 Securities available for sale 501 372 Investment securities 785 443 FHLB stock 59 64 Federal funds sold 530 267 Bank deposits 4 - Total interest income 11,157 9,415 INTEREST EXPENSE: Deposits 4,066 4,594 Mortgagors' escrow deposits 22 21 Borrowings 698 40 Total interest expense 4,786 4,655 Net interest income 6,371 4,760 Provision for loan losses 425 180 Net interest income after Provision for loan losses 5,946 4,580 NONINTEREST INCOME: Service charges on deposits 187 175 Loan servicing revenue 88 124 Net gain on sale of mortgage loans 2 31 Other 424 376 Total noninterest income 701 706 NONINTEREST EXPENSE: Compensation and benefits 2,176 1,905 Occupancy 736 661 FDIC deposit insurance premium 17 16 Advertising 96 150 Other 959 688 Total noninterest expense 3,984 3,420 Income before income tax expense 2,663 1,866 Income tax expense 1,043 731 NET INCOME $ 1,620 $1,135 Net income per share since conversion Basic $ .18 $ N/A Diluted $ .18 $ N/A See accompanying notes to consolidated interim financial statements. 4 COHOES BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the nine months ended March 31, 1999 1998 (In thousands, except per share amounts) INTEREST INCOME: Loan receivable $26,668 $25,129 Securities available for sale 1,750 1,262 Investment securities 2,223 1,276 FHLB stock 186 183 Federal funds sold 980 605 Bank deposits 22 3 Total interest income 31,829 28,458 INTEREST EXPENSE: Deposits 13,451 14,083 Mortgagors' escrow deposits 299 83 Borrowings 1,781 40 Total interest expense 15,531 14,206 Net interest income 16,298 14,252 Provision for loan losses 785 580 Net interest income after provision for loan losses 15,513 13,672 NONINTEREST INCOME: Service charges on deposits 590 555 Loan servicing revenue 296 380 Net gain on sale of mortgage loans 8 77 Other 1,282 1,099 Total noninterest income 2,176 2,111 NONINTEREST EXPENSE: Compensation and benefits 6,290 5,470 Occupancy 2,220 2,004 FDIC deposit insurance premium 44 49 Advertising 289 313 Contribution to Cohoes Savings Foundation 2,777 - Merger termination fee 2,000 - Other 2,785 2,196 Total noninterest expense 16,405 10,032 Income before income tax expense 1,284 5,751 Income tax expense 519 2,279 NET INCOME $ 765 $ 3,472 Net income per share since conversion Basic $ .18 $ N/A Diluted $ .18 $ N/A See accompanying notes to consolidated interim financial statements. 5 COHOES BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (In thousands)
Accumulated Unallocated Additional other Com- ESOP Com- Common Paid In Retained prehensive Common prehensive Stock Capital Earnings Income, net Stock Total Income Nine Months Ended March 31, 1999 Balance at June 30, 1998 $ - $ - $53,270 $ 12 $ - $ 53,282 Net Income, July 1, 1998 - March 31, 1999 - - 765 - - 765 $ 765 Issuance of 9,257,500 shares of $.01 par value common stock in initial public offering, net of conversion related expense 92 90,258 - - - 90,350 Issuance of 277,725 shares of $.01 par value common stock to the Cohoes Savings Foundation 3 2,774 - - - 2,777 Open market purchases of Cohoes Bancorp, Inc. common stock by ESOP trustee - - - - (9,137) (9,137) Allocation of ESOP shares - (14) - - 380 366 Change in unrealized gain or loss on securities available for sale, net - - - 27 - 27 27 Balance, March 31, 1999 $95 $93,018 $54,035 $ 39 $(8,757) $138,430 $ 792 Nine Months Ended March 31, 1998 Balance, June 30, 1997 $ - $ - $49,183 $(91) $ - $ 49,092 Net Income, July 1, 1997 March 31, 1998 - - 3,472 - - 3,472 $3,472 Change in unrealized gain or loss on securities available for sale, net - - - 84 - 84 84 Balance, March 31, 1998 $ - $ - $52,655 $ (7) $ - $ 52,648 $3,556
See accompanying notes to consolidated interim financial statements. 6 COHOES BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the nine months ended March 31, 1999 1998 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS: (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 765 $ 3,472 Adjustments to reconcile net income to net cash provided by operating activities- Charitable contribution to the Cohoes Savings Foundation 2,777 - Depreciation 980 869 Amortization of purchased and originated mortgage servicing rights 151 136 Provision for loan losses 785 580 ESOP compensation expense 366 - Net (gain) loss on securities available for sale (2) 1 Net premium (discount) amortization of investment securities 38 28 Net premium (discount) amortization of securities available for sale (7) 5 Net gain on sale of mortgage loans (8) (77) Proceeds from sale of loans held for sale 602 8,138 Loans originated for sale (556) (7,886) (Increase) decrease in interest receivable (205) 383 Increase in other assets (2,958) (390) Increase (decrease) in other liabilities 1,374 144 Net loss on sale of other real estate owned 73 145 Total adjustments 3,410 2,076 Net cash provided by operating activities 4,175 5,548 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from investment securities called/matured 16,025 15,000 Purchase of investment securities (32,580) (29,047) Proceeds from the maturity of securities available for sale - 585 Proceeds from securities available for sale called 22,300 24,000 Proceeds from the sale of securities available for sale 716 - Purchase of securities available for sale (23,569) (29,823) Proceeds from principal reduction in investment securities 7,020 5,115 Proceeds from principal reduction in securities available for sale 6,162 3,065 Net loans made to customers (78,839) (2,668) Originated mortgage servicing rights (1) (81) Proceeds from sale of other real estate owned 1,215 1,688 Capital expenditures (1,316) (571) Net cash used in investing activities (82,867) (12,737) CASH FLOWS FROM FINANCING ACTIVITIES: Net decrease in mortgagors' escrow deposits (2,848) (3,160) Net Increase in borrowings 29,366 5,000 Net increase (decrease) in deposits (20,537) 2,445 Net proceeds from the issuance of common stock 90,350 - Purchase of ESOP common stock (9,137) - Net cash provided by financing activities 87,194 4,285 Net increase (decrease) in cash and cash equivalents 8,502 (2,906) CASH AND CASH EQUIVALENTS, beginning of period 14,229 16,664 CASH AND CASH EQUIVALENTS, end of period $ 22,731 $ 13,760 ADDITIONAL DISCLOSURE RELATIVE TO CASH FLOWS: Interest paid $ 15,538 $ 14,343 Taxes paid 540 1,599 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES: Transfer of loans to other real estate owned $ 1,286 $ 979
See accompanying notes to consolidated interim financial statements. 7 COHOES BANCORP, INC. NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Basis of Presentation Cohoes Bancorp, Inc. ("Company") was incorporated under Delaware law in September 1998 as a savings and loan holding company to purchase 100% of the common stock of the Cohoes Savings Bank ("Bank"). On December 31, 1998, Cohoes Bancorp, Inc. completed its initial public offering of 9,257,500 shares of common stock in connection with the conversion of the Bank from a mutual form institution to a stock savings bank (the "Conversion"). Concurrently with the Conversion, Cohoes Bancorp, Inc. acquired all of the Bank's common stock. The consolidated financial statements included herein reflect all normal recurring adjustments which are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. The results of operations for the three and nine months ended March 31, 1999 are not necessarily indicative of the results of operations that may be expected for the entire year ending June 30, 1999. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These consolidated financial statements should be read in conjunction with the Bank's audited consolidated financial statements and notes thereto included in the Company's Prospectus dated November 12, 1998. 2. Earnings Per Share On December 31, 1998, Cohoes Bancorp, Inc. completed its initial stock offering of 9,257,500 shares of common stock. Concurrent with the offering, approximately 8% of the shares issued (762,818) were purchased by the Cohoes Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") using the proceeds of a loan from the Company to the ESOP. As of March 31, 1999, 18,363 shares have been released and 13,294 have been committed to be released from the ESOP trust for allocation to ESOP participants. Consequently, the remaining 731,161 shares have not yet been released and under AICPA Statement of Position 93-6, these shares will not be considered outstanding for purposes of calculating per share amounts. Earnings per share are not presented for periods prior to the initial public offering as the Bank was a mtutal savings bank, and had no stock outstanding. During the three month period ended March 31, 1999, the Company had no outstanding securities or other contracts which, if exercised or converted, would have resulted in the issuance of common stock. Hence, in accordance with Statement of Financial Accounting Standards No. 128 "Earnings per Share," basic and diluted earnings per share are identical. 3. Comprehensive Income The Company adopted Statement of Financial Accounting Standards No.130 "Reporting Comprehensive Income" ("SFAS N0. 130") in 1998. All comparative financial statements provided for earlier periods have been reclassified to reflect application of the provisions of this Statement. Comprehensive income includes net income and all other changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income includes revenues, expenses, gains, and losses that under generally accepted accounting principles are included in comprehensive income but excluded from net income. Comprehensive income and accumulated other comprehensive income are reported net of related income taxes. Accumulated other comprehensive income for the Company consists solely of unrealized holding gains or losses on available-for-sale securities. 8 4. Loan Portfolio Composition The following table sets forth the composition of the loan portfolio in dollar amounts and percentage of the portfolio at the dates indicated.
March 31, 1999 June 30, 1998 Amount % of Total Amount % of Total (Dollars in thousands) Real estate loans: One-to-four family real estate $309,426 62.76% $258,399 62.07% Multi-family and commercial real estate 121,568 24.66 93,229 22.39 Total real estate loans 430,994 87.42 351,628 84.46 Consumer loans: Home equity lines of credit 20,055 4.07 21,976 5.28 Conventional second mortgages 13,122 2.66 15,093 3.63 Automobile loans 9,651 1.96 9,783 2.35 Credit cards - - 1,655 0.40 Other consumer loans 1,305 0.26 1,184 0.28 Total consumer loans 44,133 8.95 49,691 11.94 Commercial business loans 17,919 3.63 14,991 3.60 Total loans 493,046 100.00% 416,310 100.00% Less: Net deferred loan origination fees and costs 244 (18) Allowance for loan losses (3,763) (3,533) Net loans receivable $489,527 $412,759
9 5. Non-Performing Assets The following table sets forth information regarding non-accrual loans, other past due loans, troubled debt restructurings and other real estate owned at the dates indicated.
March 31, June 30, 1999 1998 (Dollars in thousands) Non-accrual loans: One-to-four family real estate $2,306 $2,635 Multi-family and commercial real estate 1,152 823 Conventional second mortgages 10 35 Consumer loans 106 105 Commercial business loans 62 65 Total non-accrual loans 3,636 3,663 Loans contractually past due 90 days or more and still accruing interest: Consumer loans - 57 Total loans 90 days or more and still accruing interest - 57 Troubled debt restructurings 1,306 1,929 Total non-performing loans 4,942 5,649 Other real estate owned (ORE) 507 509 Total non-performing assets $5,449 $6,158 Allowance for loan losses $3,763 $3,533 Coverage of non-performing loans 76.14% 62.54% Total non-performing loans as a percentage of total loans 1.00% 1.36% Total non-performing loans as a percentage of total assets .79% 1.05%
10 6. Allowance for Loan Losses The following table sets forth the activity in the allowance for loan losses at the dates and for the periods indicated. At or for the nine months ended March 31, 1999 1998 (In thousands) Allowance for loan losses, beginning period $3,533 $3,105 Charge-off loans: Real estate loans One-to-four family real estate 205 266 Multi-family and commercial real estate 339 74 Total real estate loan charge-offs 544 340 Commercial business loans charge-offs - 52 Consumer loans Home equity lines of credit - 8 Conventional second mortgages 24 16 Automobile loans 23 116 Credit cards 144 167 Other consumer loans 34 28 Total consumer loan charge-offs 225 335 Total charged-offs loans 769 727 Recoveries on loans previously charged-off: Real estate loans One-to-four family real estate 113 40 Multi-family and commercial real estate 50 93 Total real estate loan recoveries 163 133 Commercial business loan recoveries 1 35 Consumer loans Home equity lines of credit 19 - Conventional second mortgages - - Automobile loans 3 8 Credit cards 20 16 Other consumer loans 8 7 Total consumer loan recoveries 50 31 Total recoveries 214 199 Net loans charged-off (555) (528) Provision for loan losses 785 580 Allowance for loan losses, end of period $3,763 $3,157 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General Cohoes Bancorp, Inc. ("Company"), headquartered in Cohoes, New York is a savings and loan holding company incorporated in September 1998 under the laws of the State of Delaware. The Company was organized at the direction of Cohoes Savings Bank ("Bank") for the purpose of acquiring all of the common stock of the bank issued in connection with the conversion of the Bank from mutual to stock form ("Conversion"). On December 31, 1998, the Bank completed its Conversion, and the Company sold 9,257,500 shares of its common stock at a price of $10.00 per share in a subscription offering ("Offering") to certain depositors of the Bank. In connection with the Conversion and Offering, the Company established the Cohoes Savings Foundation, Inc. ("Foundation") and made a charitable contribution of 277,725 shares of the Company's common stock to the Foundation, which resulted in a one-time charge relating to the funding of the Foundation of $2.8 million ($1.7 million net of tax). The net proceeds from the Offering amounted to $90.4 million, and the Company contributed 50% of the net proceeds from the Offering to the Bank in exchange for all of the issued and outstanding shares of common stock of the Bank. The Company had no significant assets or operations prior to December 31, 1998. Per share data is reported for the period since Conversion. Presently, the only significant assets of the Company are the capital stock of the Bank, the Company's loan to the Employee Stock Ownership Plan of the Company and the investments of the net proceeds from the Offering retained by the Company. The Company is subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended. Financial Condition For the nine month period ending March 31, 1999, total assets of the company increased $92.5 million, or 17.3%, from $535.7 million at June 30, 1998 to $628.2 million at March 31, 1999. This increase in total assets was primarily attributable to a $76.7 million, or 18.6%, increase in net loans receivable which increased from $412.8 at June 30, 1998 to $489.5 million at March 31, 1999, and a $10.5 million increase in federal funds sold, which increased from $5.0 million at June 30, 1998 to $15.5 million at March 31, 1999. These increases resulted from the investment of conversion proceeds in loans, particularly mortgage loans, and in federal funds sold. The increase in the loan portfolio was reduced by the sale of the $1.5 million credit card portfolio in February 1999. Deposits decreased $20.5 million, or 4.6%, from $449.5 million at June 30, 1998, to $429.0 million at March 31, 1999. This decrease was primarily attributable to the withdrawal of deposits to purchase stock in the Conversion. Borrowings, comprised primarily of Federal Home Loan Bank advances, increased $29.4 million, or 147.7%, from $19.9 million at June 30, 1998 to $49.3 million at March 31, 1999. This increase was primarily the result of additional longer term fixed rate Federal Home Loan Bank advances used to fund long-term fixed rate residential mortgages held in the portfolio. Total stockholder's equity increased $85.1 million, or 159.7%, from $53.3 million at June 30, 1998 to $138.4 million at March 31, 1999. The increase was primarily attributable to the $90.4 million in net proceeds raised by the Company in its Offering in connection with the Bank's Conversion. 12 Average Balance Sheets. The following tables set forth certain information relating to the Company for the three and nine months ended March 31, 1999 and 1998. The yields and costs were derived by dividing interest income or expense by the average balance of assets or liabilities, respectively, for the periods shown. The yields include deferred fees and discounts which are considered yield adjustments.
Three Months Ended March 31, 1999 1998 Average Interest Average Interest Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate (Dollars in thousands) Interest-earning assets Loans receivable $478,600 $ 9,278 7.86% $400,405 $8,269 8.38% Securities available for sale 34,516 501 5.89 23,748 372 6.35 Investments securities 53,126 785 5.99 27,523 443 6.53 Federal funds sold 40,549 530 5.30 19,637 267 5.51 FHLB stock 3,603 59 6.64 3,469 64 7.48 Other interest-earning assets 398 4 4.08 6 - - Total interest-earning assets 610,792 11,157 7.41 474,788 9,415 8.04 Non-earning assets 23,830 18,276 Total assets $634,622 $493,064 Interest-bearing liabilities Savings accounts $126,559 934 2.99 $119,952 887 3.00 School savings accounts 16,477 172 4.23 15,383 210 5.54 Money market accounts 20,510 167 3.30 18,095 139 3.12 Demand deposits 67,539 87 0.52 47,138 76 0.65 Time deposits 206,332 2,706 5.32 227,649 3,282 5.85 Escrow accounts 5,022 22 1.78 5,240 21 1.63 Borrowings 49,362 698 5.73 2,611 40 6.21 Total interest-bearing liabilities 491,801 4,786 3.95 436,068 4,655 4.33 Other liabilities 5,488 4,504 Stockholders' equity 137,333 52,492 Total liabilities and stockholders' equity $634,622 $493,064 Net interest income $ 6,371 $4,760 Net interest rate spread 3.46% 3.71% Net earning assets $118,991 $ 38,720 Net yield on average interest-earning assets 4.23% 4.07% Average interest-earning assets to average interest-bearing 1.24 X 1.09 X liabilities
13
Nine Months Ended March 31, 1999 1998 Average Interest Average Interest Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate (Dollars in thousands) Interest-earning assets Loans receivable $449,161 $26,668 7.91% $403,661 $25,129 8.29% Securities available for sale 37,953 1,750 6.14 26,025 1,262 6.46 Investments securities 49,471 2,223 5.99 26,531 1,276 6.41 Federal funds sold 26,253 980 4.97 14,724 605 5.47 FHLB stock 3,569 186 6.94 3,452 183 7.06 Other interest-earning assets 528 22 5.55 58 3 6.93 Total interest-earning assets 566,935 31,829 7.48 474,451 28,458 7.99 Non-earning assets 22,097 18,506 Total assets $589,032 $492,957 Interest-bearing liabilities Savings accounts $127,768 2,863 2.98 $120,448 2,707 2.99 School savings accounts 17,286 640 4.93 14,608 607 5.54 Money market accounts 20,129 504 3.34 17,327 402 3.09 Demand deposits 59,457 255 0.57 46,161 223 0.64 Time deposits 219,536 9,189 5.58 230,905 10,144 5.85 Escrow accounts 16,305 299 2.44 6,692 83 1.65 Borrowings 41,238 1,781 5.75 858 40 6.21 Total interest-bearing liabilities 501,719 15,531 4.12 436,999 14,206 4.33 Other liabilities 5,485 4,656 Stockholders' equity 81,828 51,302 Total liabilities and stockholders' equity $589,032 $492,957 Net interest income $16,298 $14,252 Net interest rate spread 3.36% 3.66% Net earning assets $ 65,216 $ 37,452 Net yield on average interest-earning assets 3.83% 4.00% Average interest-earning assets to average interest-bearing 1.13 X 1.09 X liabilities
14 Rate/Volume Analysis. The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume) and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.
Three Months Ended March 31,1999 Nine Months Ended March 31,1999 Compared to Compared to Three Months Ended March 31,1998 Nine Months Ended March 31,1998 Increase (Decrease) Total Increase (Decrease) Total Due To Increase Due to Increase Volume Rate (Decrease) Volume Rate (Decrease) (Dollars in thousands) Interest and dividend income from: Loans receivable $3,897 $(2,888) $1,009 $3,287 $(1,748) $1,539 Securities available for sale 302 (173) 129 590 (102) 488 Investment securities 585 (243) 342 1,088 (141) 947 Federal funds sold 335 (72) 263 468 (93) 375 FHLB stock 14 (19) (5) 8 (5) 3 Other interest-earning assets 4 - 4 20 (1) 19 Total interest and dividend income 5,137 (3,395) 1,742 5,461 (2,090) 3,371 Interest expense for: Savings accounts 59 (12) 47 169 (13) 156 School savings accounts 84 (122) (38) 131 (98) 33 Money market accounts 19 9 28 68 34 102 Demand deposits 92 (81) 11 71 (39) 32 Time deposits (293) (283) (576) (487) (468) (955) Escrow accounts (5) 6 1 162 54 216 Borrowings 680 (22) 658 1,746 (5) 1,741 Total interest expense 636 (505) 131 1,860 (535) 1,325 Net interest income $4,501 $(2,890) $1,611 $3,601 $(1,555) $2,046
15 Comparison of Operating Results for the Three Months Ended March 31, 1999 and 1998 For the three months ended March 31, 1999 the Company reported net income of $1.6 million, as compared to net income of $1.1 million for the three months ended March 31, 1998. Net interest income increased $1.6 million for the three months ended March 31, 1999 as compared to the same period last year. This increase was in part offset by an increase in the provision for loan losses of $245,000, an increase in noninterest expense of $564,000 and an increase in income tax expense of $312,000. Net Interest Income. Net interest income for the three months ended March 31, 1999 was $6.4 million, up $1.6 million from the same period last year. The increase was primarily the result of the increase of $136.0 million in average earning assets from $474.8 million for the three months ended March 31, 1998 to $610.8 million for the same period this year. Interest-bearing liabilities also increased during the same period, up $55.7 million. The net impact of these volume increases resulted in an increase in net interest income of $4.5 million. The volume increase was offset by a 25 basis point reduction in the interest rate spread resulting in a $2.9 million decrease in net interest income due to rate. The Company's net interest margin for the three months ended March 31, 1999 was 4.23%, up 16 basis points from 4.07% for the same period last year. The yield on average earning assets decreased from 8.04% to 7.41% , while the rate paid on average interest-bearing liabilities decreased from 4.33% to 3.95%. Interest Income. Interest income for the three months ended March 31, 1999 was $11.2 million, up from $9.4 million for the comparable period in 1998. The largest component of interest income is interest on loans. Interest on loans increased from $8.3 million for the three months ended March 31, 1998 to $9.3 million for the three months ended March 31, 1999. This increase of $1.0 million is the result of an increase in the average balance of loans partially offset by a decrease in the average yield earned. The average balance of loans increased $78.2 million to $478.6 million, while the yield on loans decreased 52 basis points from 8.38% to 7.86%. The increase in interest on loans was supplemented by increases in interest on securities available for sale, investment securities and federal funds sold. Interest income on these categories of earning assets increased $129,000, $342,000 and $263,000, respectively. Substantially all of the increases in interest income on these assets are attributed to increases in volume. The average balance of securities available for sale increased from $23.7 million for the quarter ended March 31, 1998 to $34.5 million for the quarter ended March 31, 1999. This increase in volume resulted in an increase in interest income of $302,000. The average balance of investment securities increased from $27.5 million in the quarter ended March 31, 1998 to $53.1 million in the quarter ended March 31, 1999, resulting in a $585,000 increase in interest income due to volume. The average balance of federal funds sold increased from $19.6 million in the quarter ended March 31, 1998 to $40.5 million in the quarter ended March 31, 1999. The increase in the volume of federal funds sold resulted in a $335,000 increase in interest income in the quarter ended March 31, 1999 as compared to the quarter ended March 31, 1998. The changes in yield on securities available for sale, investment securities and federal funds sold reduced interest income by $488,000. Interest Expense. Interest expense increased during the quarter ended March 31, 1999 to $4.8 million, up from $4.7 million for the comparable period in 1998. Substantially all of the Company's interest expense is from the Company's interest-bearing deposits. The largest category of interest-bearing deposits is time deposits. Interest on time deposits for the quarter ended March 31, 1999 was $2.7 million, down $576,000 from the $3.3 million for the quarter ended March 31, 1998. This decrease is the result of a decrease in the average balance of time deposits, from $227.6 million for the quarter ended March 31, 1998 to $206.3 million for the quarter ended March 31, 1999 and a decrease of 53 basis points in the rates paid on these deposits from 5.85% for the quarter ended March 31, 1998 to 5.32% for the same period in 1999. Interest expense on savings accounts increased $47,000 for the quarter ended March 31, 1999 as compared to the same period in the prior year. This increase is almost entirely attributable to an increase in the average balance of savings accounts of $6.6 million. Interest on school savings accounts decreased $38,000, from $210,000 for the quarter ended March 31, 1998 to $172,000 for the quarter ended March 31, 1999, due primarily to a decrease of 131 basis points in the average rate paid on school savings accounts from 5.54% to 4.23% partially offset by an increase in the average balance of school savings accounts of $1.1 million. Interest on money market accounts increased $28,000, from $139,000 for the quarter ended March 31, 1998 to $167,000 for the quarter ended March 31, 1999. The increase is attributed to an increase in the average balance of money market accounts of $2.4 million as well as an increase of 18 basis points in the rates paid on these money market accounts, from 3.12% to 3.30%. Interest on borrowings increased $658,000, from $40,000 for the quarter ended March 31, 1998 to $698,000 for the quarter ended March 31, 1999. The increase is primarily due to a $46.8 million increase in the average balance of borrowings. 16 Provision for Loan Losses. The provision for loan losses increased from $180,000 for the quarter ended March 31, 1998 to $425,000 for the quarter ended March 31, 1999. The increase in the provision is attributed to an increase in the level of net charge-offs from $135,000 for the quarter ended March 31, 1998 to $357,000 for the quarter ended March 31, 1999 and an increase in the balance of loans outstanding. Noninterest Income. Total noninterest income for the quarter ended March 31, 1999 was $701,000, substantially unchanged from the $706,000 for the quarter ended March 31, 1998. Service charges on deposits increased slightly to $187,000 for the quarter ended March 31, 1999, from $175,000 for the quarter ended March 31, 1998. Loan servicing revenue declined $36,000 from $124,000 for the quarter ended March 31, 1998 to $88,000 for the quarter ended March 31, 1999. The decline relates to a reduction in the balance of loans serviced for others. Net gain on sale of mortgage loans decreased $29,000 from $31,000 for the quarter ended March 31, 1998 to $2,000 for the quarter ended March 31, 1999. The decrease is a result of management's decision to sell fewer loans in the secondary market. Other noninterest income increased $48,000 primarily as a result of the establishment of ATM surcharges in April 1998. Noninterest Expense. Total noninterest expense increased $564,000 to $4.0 million for the quarter ended March 31, 1999, up from $3.4 million for the comparable period in 1998. The increase in compensation and benefits of $271,000, occupancy of $75,000 and other noninterest expense of $271,000 were the primary contributors to the overall increase. The increase in compensation and benefits is primarily attributable to the establishment of the Company's Employee Stock Ownership Plan in connection with the Company's Conversion and annual merit increases. Occupancy increased as a result of the opening of two new branch locations. The increase in other noninterest expense was attributable to an increase in professional service fees associated with being a public company and a general increase in other operating expenses. Income Tax Expense. Income tax expense increased from $731,000 for the quarter ended March 31, 1998 to $1.0 million for the comparable period in 1999. The increase is primarily the result of increased income before income tax expense. Comparison of Operating Results for the Nine Months Ended March 31, 1999 and 1998 For the nine months ended March 31, 1999 the Company reported net income of $765,000, as compared to net income of $3.5 million for the nine months ended March 31, 1998. Noninterest expense increased $6.4 million for the nine months ended March 31, 1999 as compared to the same period last year. This increase was in part offset by an increase in net interest income of $2.0 million and a reduction in income tax expense of $1.8 million. Net Interest Income. Net interest income for the nine months ended March 31, 1999 was $16.3 million, up $2.0 million from the same period last year. The increase was primarily the result of the increase of $92.4 million in average earning assets from $474.5 million for the nine months ended March 31, 1998 to $566.9 million for the same period this year. Interest-bearing liabilities also increased during the same period, up $64.7 million. The net impact of these volume increases resulted in an increase in net interest income of $3.6 million. The volume increase was offset by a 30 basis point reduction in the interest rate spread resulting in a $1.6 million decrease in net interest income due to rate. The Company's net interest margin for the nine months ended March 31, 1999 was 3.83%, down 17 basis points from 4.00% for the same period last year. The yield on average earning assets decreased from 7.99% to 7.48% , while the rate paid on average interest-bearing liabilities decreased from 4.33% to 4.12%. Interest Income. Interest income for the nine months ended March 31, 1999 was $31.8 million, up from $28.5 million for the comparable period in 1998. The largest component of interest income is interest on loans. Interest on loans increased from $25.1 million for the nine months ended March 31, 1998 to $26.7 million for the nine months ended March 31, 1999. This increase of $1.6 million is the result of an increase in the average balance of loans offset by a decrease in the average yield earned. The average balance of loans increased $45.5 million to $449.2 million, while the yield on loans decreased 38 basis points from 8.29% to 7.91%. The increase in interest on loans was supplemented by increases in interest on securities available for sale, investment securities and federal funds sold. Interest income on these categories of earning assets increased $488,000, $947,000 and $375,000, respectively. Substantially all of the increases in interest income on these assets are attributed to increases in volume. The average balance of securities available for sale increased from $26.0 million for the nine months ended March 31, 1998 to $38.0 million for the nine months ended March 31, 1999. This increase in volume resulted in an increase in interest income of $590,000. The average balance of investment securities increased from 17 $26.5 million in the nine months ended March 31, 1998 to $49.5 million in the nine months ended March 31, 1999, resulting in a $1.1 million increase in interest income due to volume. The average balance of federal funds sold increased from $14.7 million in the nine months ended March 31, 1998 to $26.3 million in the nine months ended March 31, 1999. The increase in the volume of federal funds sold resulted in a $468,000 increase in interest income in the nine months ended March 31, 1999 as compared to the nine months ended March 31, 1998. The changes in yield on securities available for sale, investment securities and federal funds sold reduced interest income by $336,000. Interest Expense. Interest expense increased during the nine month period ended March 31, 1999 to $15.5 million, up from $14.2 million for the comparable period in 1998. Substantially all of the Company's interest expense is from the Company's interest-bearing deposits. The largest category of interest-bearing deposits is time deposits. Interest on time deposits for the nine months ended March 31, 1999 was $9.2 million, down $955,000 from the $10.1 million for the nine months ended March 31, 1998. This decrease is the result of a decrease in the average balance of time deposits, from $230.9 million for the nine months ended March 31, 1998 to $219.5 million for the nine months ended March 31, 1999 and a decrease of 27 basis points in the rates paid on these deposits from 5.85% for the nine months ended March 31, 1998 to 5.58% for the same period in 1999. Interest expense on savings accounts increased $156,000 for the nine months ended March 31, 1999 as compared to the same period the prior year, almost entirely attributable to an increase in the average balance of savings account of $7.4 million. Interest on school savings accounts increased $33,000, from $607,000 for the nine months ended March 31, 1998 to $640,000 for the nine months ended March 31, 1999, as a result of an increase in the average balance of school savings accounts of $2.7 million partially offset by a 61 basis point reduction in the rates paid on these school savings accounts. Interest on money market accounts increased $102,000, from $402,000 for the nine months ended March 31, 1998 to $504,000 for the nine months ended March 31, 1999. The increase is attributed to an increase in the average balance of money market accounts of $2.8 million as well as an increase of 25 basis points in the rates paid on these money market accounts, from 3.09% to 3.34%. Interest on borrowings for the nine months ended March 31, 1999 was $1.8 million, due to a $40.4 million increase in the average balance of borrowings which were used to fund loan growth. Interest on escrow accounts increased $216,000, from $83,000 for the nine months ended March 31, 1998 to $299,000 for the nine months ended March 31, 1999. The increase is attributed to an increase in the average balance of escrow accounts of $9.6 million as well as an increase of 79 basis points in the rates paid on these escrow accounts, from 1.65% to 2.44%. Provision for Loan Losses. The provision for loan losses increased from $580,000 for the nine months ended March 31, 1998 to $785,000 for the nine months ended March 31, 1999. The increase in the provision is attributed to a slight increase in the level of net charge-offs from $528,000 for the nine months ended March 31, 1998 to $555,000 for the nine months ended March 31, 1999 and an increase in the balance of loans outstanding. Noninterest Income. Total noninterest income for the nine month period ended March 31, 1999 was $2.2 million, up $65,000 from the $2.1 million for the nine month period ended March 31, 1998. Service charges on deposits increased slightly to $590,000 for the nine months ended March 31, 1999, from $555,000 for the nine months ended March 31, 1998. Loan servicing revenue declined $84,000 from $380,000 for the nine months ended March 31, 1998 to $296,000 for the nine months ended March 31, 1999. The decline relates to a reduction in the balance of loans serviced for others. Net gain on sale of mortgage loans decreased $69,000 from $77,000 for the nine months ended March 31, 1998 to $8,000 for the nine months ended March 31, 1999. The decrease is a result of management's decision to sell fewer loans in the secondary market. Other noninterest income increased $183,000 primarilly as a result of the establishment of ATM surcharges in April 1998. Noninterest Expense. Total noninterest expense increased $6.4 million to $16.4 million for the nine months ended March 31, 1999, up from $10.0 million for the comparable period in 1998. The break-up fee paid to SFS Bancorp, Inc. of $2.0 million, the contribution of $2.8 million to the Cohoes Savings Foundation, Inc., the increase in compensation and benefits of $820,000, occupancy expenses of $216,000 and other noninterest expense of $589,000 were the primary contributors to the overall increase. The break-up fee was paid as a result of the termination of the merger agreement with SFS Bancorp, Inc. The contribution to the Cohoes Savings foundation, Inc. was associated with the Company's conversion. The increase in compensation and benefits is primarily attributable to the establishment of the Company's Employee Stock Ownership Plan in connection with the Company's Conversion and annual merit increases. Occupancy increased as a result of the opening of two new branch locations. The increase in other noninterest expense was attributable to an increase in professional service fees associated with being a public company, increases in ORE expense, merger related expense, Y2K expense and a general increase in other operating expenses. 18 Income Tax Expense. Income tax expense decreased from $2.3 million for the nine month period ended March 31, 1998 to $519,000 for the comparable period in 1999. The reduction is primarily the result of less income before income tax expense. LIQUIDITY AND CAPITAL RESOURCES Liquidity Liquidity is defined as the ability to generate sufficient cash flow to meet all present and future funding commitments, depositor withdrawals and operating expenses. Management monitors the Company's liquidity position on a daily basis and evaluates it ability to meet depositor withdrawals or make new loans or investments. The Company's liquid assets include cash and cash equivalents, investment securities that mature within one year, and its portfolio of securities available for sale. The Company's cash inflows result primarily from loan repayments, maturities, calls and pay downs of securities, new deposits, and to a lesser extent, drawing upon the Company's credit lines with the Federal Home Loan Bank of New York. The bank's cash outflows are substantially new loan originations, securities purchases, and deposit withdrawals. The timing of cash inflows and outflows are closely monitored by management although changes in interest rates, economic conditions, and competitive forces strongly impact the predictability of these cash flows. The Company attempts to provide stable and flexible sources of funding through the management of its liabilities, including core deposit products offered through its branch network as well as with limited use of borrowings. Management believes that the level of the Company's liquid assets combined with daily monitoring of inflows and outflows provide adequate liquidity to fund outstanding loan commitments, meet daily withdrawal requirements of our depositors, and meet all other daily obligations of the Bank. Capital Consistent with its goals to operate a sound and profitable financial organization, the Bank actively seeks to remain a "well capitalized" institution in accordance with regulatory standards. The Bank's total equity was $91.8 million at March 31, 1999, 14.6% of total assets on that date. As of March 31, 1999, the Bank exceeded all of the capital requirements of the FDIC. The Bank's regulatory capital ratios at March 31, 1999 were as follows: Tier I (leverage) capital, 14.2%; Tier I risk-based capital, 23.38%; and Total risk-based capital, 24.34%. The regulatory capital minimum requirements to be considered well capitalized are 5.0%, 6.0%, and 10.0%, respectively. Impact of the Year 2000 General. The year 2000 ("Y2K") issue confronting the Bank and its suppliers, customers, customers' suppliers and competitors centers on the inability of computer systems to recognize the year 2000. Many existing computer programs and systems originally were programmed with six digit dates that provided only two digits to identify the calendar year in the date field. With the impending new millennium, these programs and computers will recognize "00" as the year 1900 rather than the year 2000. Financial institution regulators recently have increased their focus upon Y2K compliance issues and have issued guidance concerning the responsibilities of senior management and directors. The Federal Financial Institutions Examination Council ("FFIEC") has issued several interagency statements on Y2K Project Management Awareness. These statements require financial institutions to, among other things, examine the Y2K implications of their reliance on vendors and with respect to data exchange and the potential impact of the Y2K issue on their customers, suppliers and borrowers. These statements also require each federally regulated financial institution to survey its exposure, measure risk and prepare a plan to address the Y2K issue. In addition, the federal banking regulators have issued safety and soundness guidelines to be followed by insured depository institutions, such as the Bank, to assure resolution of any Y2K problems. The federal banking agencies have asserted that Y2K testing and certification is a key safety and soundness issue in conjunction with regulatory examinations and, thus, that an institution's failure to address appropriately the Y2K 19 issue could result in supervisory action, including the reduction of the institution's supervisory ratings, the denial of applications for approval of mergers or acquisitions or the imposition of civil money penalties. Risk. Like most financial institutions service providers, the Bank and its operations may be significantly affected by the Y2K issue due to its dependence on technology and date-sensitive data. Computer software and hardware and other equipment, both within and outside the Bank's direct control and third parties with whom the Bank electronically or operationally interfaces (including without limitation its customers and third party vendors) are likely to be affected. If computer systems are not modified in order to be able to identify the year 2000, many computer applications could fail or create erroneous results. As a result, many calculations which rely on date field information, such as interest, payment or due dates and other operating functions, could generate results which are significantly misstated, and the Bank could experience an inability to process transactions, prepare statements or engage in similar normal business activities. Likewise, under certain circumstances, a failure to adequately address the Y2K issue could adversely affect the viability of the Bank's suppliers and creditors and the creditworthiness of its borrowers. Thus, if not adequately addressed, the Y2K issue could result in a significant adverse impact on the Bank's operations and, in turn, its financial condition and results of operations. State of Readiness. During November 1997, the Bank formulated its plan to address the Y2K issue. Since that time, the Bank has taken the following steps: * Established senior management advisory and review responsibilities; * Completed a Bank-wide inventory of applications and system software; * Built an internal tracking database for application and vendor software; * Developed compliance plans and schedules for all lines of business; * Initiated vendor compliance verification; * Begun awareness and education activities for employees through existing internal communication channels; and * Developed a process to respond to customer inquiries as well as help educate customers on the Y2K issue. The following paragraphs summarize the phases of the Bank's Y2K plan: Awareness Phase. The Bank formally established a Y2K plan headed by a senior manager, and a project team was assembled for management of the Y2K project. The project team created a plan of action that includes milestones, budget estimates, strategies, and methodologies to track and report the status of the project. Members of the project team also attended conferences and information sharing sessions to gain more insight into the Y2K issue and potential strategies for addressing it. This phase is substantially complete. Assessment Phase. The Bank's strategies were further developed with respect to how the objectives of the Y2K plan would be achieved, and a Y2K business risk assessment was made to quantify the extent of the Bank's Y2K exposure. A corporate inventory (which is periodically updated as new technology is acquired and as systems progress through subsequent phases) was developed to identify and monitor Y2K readiness for information systems (hardware, software, utilities and vendors) as well as environmental systems (security systems, facilities, etc.). Systems were prioritized based on business impact and available alternatives. Mission critical systems supplied by vendors were researched to determine Y2K readiness. If Y2K-ready versions were not available, the Bank began identifying functional replacements which were either upgradable or currently Y2K-ready, and a formal plan was developed to repair, upgrade or replace all mission critical systems. This phase is substantially complete. 20 Beginning in October 1998, all unsecured credits greater than $100,000 were sent a questionnaire developed by the Bank's credit administration staff to evaluate Y2K exposure. The Bank also contacted its most significant borrowers informing them of the Y2K issue. Because the Bank's loan portfolio is primarily real estate-based and is diversified with regard to individual borrowers and types of businesses, and the Bank's primary market area is not significantly dependent on one employer or industry, the Bank does not expect any significant or prolonged Y2K-related difficulties that will affect net earnings or cash flow. As part of the current credit approval process, all new and renewed loans are evaluated for Y2K risk. Renovation Phase. The Bank's corporate inventory revealed that Y2K upgrades were available for all vendor supplied mission critical systems, and all these Y2K-ready versions have been delivered and placed into production. The upgrades include the automated teller machines, the voice response unit, network equipment, and the Bank's voice mail system. Validation Phase. The validation phase is designed to test the ability of hardware and software to accurately process date sensitive data. As of March 31, 1999, the Bank completed the validation testing of its mission critical systems. The remainer of the validation phase, including testing with our service providers and supply vendors, will be completed by June 30, 1999. To date, the validation testing indicates that the mission critical systems are Y2K-ready. Implementation Phase. After passing the validation phase, the modified or upgraded versions of hardware/ software have been placed into production. As of March 31, 1999, the Bank has been operating all mission critical systems with Y2K compliant versions. Any remaining systems requiring Y2K upgrades will be installed by June 30, 1999. Contingency Plans. During the assessment phase, the Bank began to develop back-up or contingency plans for each of its mission critical systems. Since virtually all of the Bank's mission critical systems are dependent upon third party vendors or service providers, the contingency plan included the option of selecting new vendors or service provider if Y2K-ready products could not be delivered by our current suppliers. To date, it has not been necessary to exercise this option. In addition, the Bank is preparing and testing contingency plans in the event of power outages or telecommunication disruptions. These plans include backup generators, reversion to manual procedures, and the use of paper reports until the problems are corrected. Customer Education. In October 1998, the Bank sent out FDIC Y2K brochures with all statement mailings, explaining the Y2K problem and reassuring customers that FDIC insurance coverage guarantees the safety of their deposit accounts. All Bank employees have attended special Y2K classes and there is an ongoing awareness campaign to encourage Y2K dialogue with customers. A statement mailer with an updated status of our system testing will be distributed during the month of May. In addition, the Bank will begin offering public education seminars on Y2K in June 1999. 21 Item 3. Quantitative And Qualitative Disclosures About Market Risk Not applicable PART II - OTHER INFORMATION Item 1. Legal Proceedings Not Applicable. Item 2. Changes in Securities and Use of Proceeds 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 (a) Exhibits 27. Financial Data Schedules (submitted only with filing in electronic format) (b) Reports on Form 8-K Not Applicable. 22 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. Cohoes Bancorp, Inc. (Registrant) Date: May 10,1999 By: /s/ Harry L. Robinson ----------------------- Harry L. Robinson President and Chief Executive Officer Date: May 10, 1999 By: /s/ Richard A. Ahl ----------------------- Richard A. Ahl Executive Vice President, Chief Financial Officer and Secretary 23 EX-27 2
9 This schedule contains summary financial information extracted from the consolidated statement of financial condition and the consolidated statement of income and is qualified in its entirety by reference to such financial statements. 1000 9-MOS JUN-30-1999 MAR-31-1999 6,891 330 15,510 0 43,147 54,921 55,027 493,046 3,763 628,219 429,004 0 5,377 49,263 0 0 95 138,335 628,219 26,668 4,159 1,002 31,829 13,451 15,531 16,298 785 2 16,405 1,284 765 0 0 765 .18 .18 3.83 3,636 0 1,306 0 3,533 769 214 3,763 2,942 0 821
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