-----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, R4gUrIidFlci+u8ijWntcjAdQT/4iFk8B4uq6DJKSSxEQsIKkeJ4X453Zakv3Ebd 4iDotgXpkhYcXoZ4vJ7Odw== 0001065407-05-000587.txt : 20050818 0001065407-05-000587.hdr.sgml : 20050818 20050818145732 ACCESSION NUMBER: 0001065407-05-000587 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050815 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050818 DATE AS OF CHANGE: 20050818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST KEYSTONE FINANCIAL INC CENTRAL INDEX KEY: 0000856751 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 232576479 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25328 FILM NUMBER: 051035761 BUSINESS ADDRESS: STREET 1: 22 WEST STATE ST CITY: MEDIA STATE: PA ZIP: 19063 BUSINESS PHONE: 610 565-6210 MAIL ADDRESS: STREET 1: 22 WEST STATE ST CITY: MEDIA STATE: PA ZIP: 19063 8-K 1 firstkeystone8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 15, 2005 ______________________________ First Keystone Financial, Inc. ______________________________________________________________________________ (Exact name of registrant as specified in its charter) Pennsylvania 000-25328 23-2576479 ______________________________________________________________________________ (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 22 West State Street, Media, Pennsylvania 19063 ______________________________________________________________________________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (610) 565-6210 ___________________________ Not Applicable ______________________________________________________________________________ (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition _____________________________________________ On August 15, 2005, First Keystone Financial, Inc. (the "Company") reported its results of operations for the quarter ended June 30, 2005. For additional information, reference is made to the Company's press release dated August 15, 2005, which is included as Exhibit 99.1 hereto and is incorporated herein by reference thereto. The press release attached hereto is being furnished to the SEC and shall not be deemed to be "filed" for any purpose except otherwise provided herein. ITEM 9.01 Financial Statements and Exhibits _________________________________ (a) Not applicable. (b) Not applicable. (c) Exhibits The following exhibits are filed herewith. Exhibit Number Description __________________ _______________________________________ 99.1 Press release dated August 15, 2005. 2 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. FIRST KEYSTONE FINANCIAL, INC. Date: August 18, 2005 By: /s/Rose M. DiMarco ____________________________ Rose M. DiMarco Chief Financial Officer 3 EX-99.1 2 firstkeystonepressrelease.txt PRESS RELEASE Exhibit 99.1 FIRST 22 West State Street KEYSTONE Media, PA 19063 FINANCIAL, INC. 610-565-6210 FOR IMMEDIATE RELEASE _____________________ FIRST KEYSTONE FINANCIAL ANNOUNCES THIRD QUARTER RESULTS Media, PA August 15, 2005 - (Nasdaq: FKFS) The Company reported today a net loss for the quarter ended June 30, 2005 of $(613,000), or $(0.32) per diluted share, compared to net income of $627,000, or $0.32 per diluted share, for the same period last year. Net income for the nine months ended June 30, 2005 was $548,000, or $0.30 per diluted share, as compared to $2.0 million, or $1.02 per diluted share, for the same period in 2004. The loss incurred in the third quarter of fiscal 2005 reflected a significantly larger than normal loan loss provision. As a result of the review of the Company's loan portfolio, the Company increased the loan loss provision by $1.6 million for the quarter ended June 30, 2005. The increased provision was due to the establishment of a reserve for a large commercial real estate loan as well as increased general reserves deemed necessary due to various factors including changes in non-performing loans and the changing nature of the commercial and multi-family real estate and commercial business loan portfolios. "Although we are disappointed in how the increased loan loss provisions impacted our results of operations, the Company's focus will be to continue to generate lower cost core deposits to fund higher yielding, shorter term assets. In accordance with this strategy, our commercial and home equity loans showed solid growth along with increases in our lower cost core deposits," said Thomas M. Kelly, President and Chief Executive Officer of First Keystone Financial, Inc. For the three months ended June 30, 2005, net interest income decreased slightly by $94,000, or 3.2%, while net interest income for the nine months ended June 30, 2005 increased $18,000, or 0.2%, as compared to the same periods in 2004. Interest income increased $283,000, or 4.4%, for the quarter ended June 30, 2005 compared to the same period in the prior year primarily due to a 14 basis point increase in the average yield earned on interest-earning assets. However, such increase was offset by a $377,000, or 10.5%, increase in interest expense for the quarter ended June 30, 2005 as compared to the third quarter of fiscal 2004 primarily due to a 25 basis point increase in the average rate paid on interest-bearing liabilities combined with a $6.6 million increase in the average balance of such liabilities. As a result, net interest income decreased as the rate of repricing of interest-bearing liabilities outpaced the upward adjustments on interest-earning assets. The Company's interest rate margin on a tax-equivalent basis decreased to 2.17% for the quarter ended June 30, 2005 as compared to 2.27% for the same period last year. (See footnote to the table below). On a linked quarter basis, net interest income decreased $136,000 in the third quarter of fiscal 2005 compared to the second quarter of fiscal 2005. The net interest margin on a tax- equivalent basis decreased 12 basis points to 2.17% from 2.29% for the three months ended March 31, 2005. (See footnote to the table below). During the third quarter of fiscal 2005 as compared to the second, the Company experienced a 10 basis point increase in the rates paid on interest-bearing liabilities which was partially offset by a 3 basis point increase in the yield earned on average interest-earning assets. The net interest margin for the three months ended March 31, 2005 included the effects of a special dividend which amounted to 12 basis points. For the quarter ended June 30, 2005, non-interest income increased $108,000 to $683,000 from the same period last year. The increase was primarily the result of a $92,000 increase in service charges and other fees due to continued emphasis on additional fee-based deposit services. Non-interest expense for the quarter ended June 30, 2005 increased $300,000, or 11.3%, from the same period last year primarily due to increases of $108,000, or 36.3%, $65,000, or 33.3%, and $52,000, or 12.6% in occupancy and equipment, professional fees, and other non-interest expense, respectively. The increase in occupancy and equipment was related to branch expansion in the first quarter of fiscal 2005 combined with increases in costs relating to rent, maintenance and taxes. Professional fees increased due to the additional auditing and legal fees resulting from additional regulatory requirements. The increase in other non-interest expense was due to the implementation of a training program designed to emphasize the Company's commitment to maximizing customer service as well as increased general administrative expenses. The Company's total assets increased to $573.6 million at June 30, 2005 from $571.9 million at September 30, 2004. Investment and mortgage-related securities held to maturity increased to $54.0 million from $42.7 million at September 30, 2004 mainly due to the Company's strategy to reinvest the proceeds and cash flows from the available for sale securities portfolio into the held to maturity portfolio in order to minimize the effect of price volatility to the Company's equity. Although loans receivable decreased slightly to $303.6 million at June 30, 2005 from $304.2 million at September 30, 2004, the composition of the loan portfolio continued to shift to more interest-sensitive assets. Commercial and multi-family real estate, construction, home equity and commercial business loans accounted for 51.7% of the total loan portfolio at June 30, 2005 as compared to 48.7% at September 30, 2004. Total deposits increased $13.5 million, or 3.9%, to $358.4 million at June 30, 2005 from $344.9 million at September 30, 2004. Core deposits increased $11.4 million, or 6.3%, as a result of the Company's commitment to focus on business development and aggressively pursue those relationships. The level of the Company's borrowings decreased $15.6 million, or 9.1%, from September 30, 2004 to June 30, 2005 as the Company used deposit increases to repay borrowings. Stockholders' equity decreased $265,000 to $29.4 million resulting from the Company's comprehensive income decreasing $768,000 combined with dividend payments totaling $604,000 partially offset by net income of $548,000 for the nine months ended June 30, 2005. Total non-performing assets totaled $5.7 million at June 30, 2005 as compared to $3.3 million at September 30, 2004. The Company's ratio of non-performing assets to total assets was 1.0% at June 30, 2005 compared to 0.51% at September 30, 2004. The increase in non-performing assets was primarily due to a $3.8 million commercial real estate loan being placed on a non-accrual status partially offset by a $1.3 million commercial and construction loans returning to current status and a $309,000 decrease in real estate owned. First Keystone Bank, the Company's wholly owned subsidiary, serves its customers from eight full-service offices located in Delaware and Chester Counties. Certain information in this release may constitute forward- looking statements as that term is defined in the Private Securities Litigation Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those estimated due to a number of factors. Persons are cautioned that such forward-looking statements are not guarantees of future performance and are subject to various factors, which could cause actual results to differ materially from those estimated. These factors include, but are not limited to, changes in general economic and market conditions and the development of an interest rate environment that adversely affects the interest rate spread or other income from the Company's and the Bank's investments and operations. The Company does not undertake and specifically disclaims any obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP") as discussed below. Management of the Company uses these non-GAAP measures in its analysis of the Company's performance. FIRST KEYSTONE FINANCIAL, INC. SELECTED OPERATIONS DATA (In thousands except per share data) (Unaudited) Three Months Ended Nine Months Ended June 30, June 30, ______________________________________________ 2005 2004 2005 2004 ______________________________________________ Net interest income $2,825 $2,919 $8,606 $8,588 Provision for loan losses 1,645 75 1,735 225 Non-interest income 683 575 2,683 3,808 Non-interest expense 2,946 2,646 9,196 9,674 ______________________________________________ (Loss) income before taxes (1,083) 773 358 2,497 Income tax (benefit) expense (470) 146 (190) 501 ______________________________________________ Net (loss) income $ (613) $ 627 $ 548 $1,996 ============================================== Basic (loss) earnings per share $(0.33) $ 0.34 $ 0.30 $ 1.09 Diluted (loss) earnings per share (0.32) 0.32 0.30 1.02 Dividends per share 0.11 0.11 0.33 0.33 Number of shares outstanding at end of period 2,022,378 1,926,384 2,022,378 1,926,384 Weighted average basic shares outstanding 1,874,143 1,835,609 1,827,849 1,831,822 Weighted average diluted shares outstanding 1,912,779 1,956,155 1,846,321 1,953,103 _____________________________________________________________________________________________ FIRST KEYSTONE FINANCIAL, INC. SELECTED FINANCIAL DATA (In thousands except per share data) (Unaudited) June 30, September 30, 2005 2004 _____________________________ Total assets $573,581 $571,919 Loans receivable, net 303,558 304,248 Investment and mortgage-related securities available for sale 160,751 161,235 Investment and mortgage-related securities held to maturity 53,953 42,650 Cash and cash equivalents 17,198 17,975 Deposits 358,360 344,880 Borrowings 155,505 171,149 Junior subordinated debt 21,529 21,557 Loan loss allowance 3,471 2,039 Total stockholders' equity 29,433 29,698 Book value per share $14.55 $15.41 ____________________________________________________________________________________________ FIRST KEYSTONE FINANCIAL, INC. OTHER SELECTED DATA (Unaudited) At or for the At or for the Three Months Nine Months Ended Ended June 30, June 30, ______________________________________ 2005 2004 2005 2004 ______________________________________ Return on average assets (1) (0.43)% 0.44% 0.13% 0.48% Return on average equity (1) (8.26)% 8.06% 2.45% 8.42% Interest rate spread (1)(2) 2.14% 2.25% 2.19% 2.23% Net interest margin (1)(2) 2.17% 2.27% 2.21% 2.25% Interest-earning assets/interest-bearing liabilities(2) 100.90% 100.70% 100.62% 100.72% Operating expenses to average assets (1) 2.07% 1.88% 2.16% 2.31% Ratio of non-performing assets to total assets at end of period 1.00% 0.55% 1.00% 0.55% Ratio of allowance for loan losses to gross loans receivable 1.13% 0.71% 1.13% 0.71% Ratio of loan loss allowance to non-performing loans at end of period 72.38% 116.49% 72.38% 116.49%
(1) Annualized. (2) Adjusted for the effects of tax-free investments. This is a non-GAAP presentation. Management believes that presentation of its interest rate spread and net interest margin on a tax- equivalent basis provides useful information that is essential to a proper understanding of the operating results of the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. In order to provide accurate comparisons of yields and margins for all earning assets, the interest income earned on tax-exempt assets has been increased to make them fully equivalent to other taxable investments. Without the adjustment for taxes, the interest rate spread was 2.08% and 2.18% for the quarter ended June 30, 2005 and 2004, respectively, while the net interest margin would be 2.10% and 2.20% for the quarter ended June 30, 2005 and 2004, respectively. Without the adjustment for taxes, the interest rate spread was 2.12% and 2.16% for the nine months ended June 30, 2005 and 2004, respectively, while the net interest margin would be 2.14% and 2.18% for the nine months ended June 30, 2005 and 2004, respectively. In addition, with respect to March 31, 2005, without the adjustment for taxes, the interest rate margin was 2.22%. CONTACT: Thomas M. Kelly, President and Chief Executive Officer Rose M. DiMarco, Chief Financial Officer (610) 565-6210 -----END PRIVACY-ENHANCED MESSAGE-----