-----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, IeAi1XJrKRqDn6Wje0G+bbfG2cU2W+WrR9qomM4z1mYcBqXI9wH6WUsl1rRu4lIt 20dFb4gYyRnMJyDhexypKg== 0000914317-97-000378.txt : 19970814 0000914317-97-000378.hdr.sgml : 19970814 ACCESSION NUMBER: 0000914317-97-000378 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERMANENT BANCORP INC CENTRAL INDEX KEY: 0000916604 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351908797 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23370 FILM NUMBER: 97659330 BUSINESS ADDRESS: STREET 1: 101 SOUTHEAST THIRD ST CITY: EVANSVILLE STATE: IN ZIP: 47708 BUSINESS PHONE: 8124286825 MAIL ADDRESS: STREET 1: 101 SOUTHEAST THIRD STREET CITY: EVANSVILLE STATE: IN ZIP: 47708 10-Q 1 PERMANENT BANCORP, INC. -- 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-23370 PERMANENT BANCORP, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 35-1908797 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or Origination) Identification No.) 101 Southeast Third Street, Evansville Indiana 47708 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (812) 428-6800 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] As of August 1, 1997, there were 2,100,520 shares of the Registrant's Common Stock outstanding. PERMANENT BANCORP, INC. AND SUBSIDIARY FORM 10-Q INDEX PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Consolidated Statements of Financial Condition Consolidated Statements of Income Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Supplemental Data Regulatory Developments PART II. OTHER INFORMATION Signatures
PERMANENT BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) JUNE 30, 1997 MARCH 31, 1997 ------------- ------------- ASSETS: Cash .................................................................... $ 1,259,511 $ 3,211,091 Interest-bearing deposits ............................................... 1,431,337 3,153,385 ------------ ------------ Total cash and cash equivalents ......................................... 2,690,848 6,364,476 Securities available for sale - at fair value (amortized cost $87,847,535 and $87,020,254) ..................................................... 86,934,874 85,180,313 Mortgage-backed securities available for sale at fair value (amortized cost $81,993,498 and $74,846,178) .................................... 81,784,771 74,052,253 Securities held to maturity (fair value $25,000 and $25,000) ............ 25,000 25,000 Mortgage-backed securities held to maturity (fair value $26,210,508 and $27,197,070) ..................................................... 25,992,279 27,180,891 Other Investments ....................................................... 1,177,922 1,056,036 Loans (net of allowance for loan losses of $2,144,900 and $2,126,225) ... 214,399,547 210,189,422 Interest receivable, net ................................................ 3,188,188 3,539,085 Office properties and equipment, net .................................... 7,966,635 6,968,587 Real estate owned, net .................................................. 44,156 40,653 Deferred income tax ..................................................... 769,623 1,374,109 Federal Home Loan Bank stock ............................................ 5,414,000 5,192,600 Cash surrender value of life insurance .................................. 1,571,265 1,552,875 Goodwill (net of accumulated amortization of $1,782,328 and $1,741,967) . 579,588 326,198 Other ................................................................... 700,384 655,833 ------------ ------------ TOTAL ASSETS ................................................................ $433,239,080 $423,698,331 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: LIABILITIES: Deposits ................................................................ $283,736,880 $280,753,353 Federal Home Loan Bank advances ......................................... 103,570,650 98,483,986 Advance payments by borrowers for taxes and insurance ................... 510,038 1,014,598 Other borrowed funds .................................................... 2,153,621 1,793,967 Interest payable ........................................................ 2,378,684 2,049,727 Other ................................................................... 1,193,011 508,073 ------------ ------------ TOTAL LIABILITIES ........................................................... $393,542,884 $384,603,704 ------------ ------------
PERMANENT BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (continued) JUNE 30, 1997 MARCH 31, 1997 ------------- ------------- STOCKHOLDERS' EQUITY Serial Preferred Stock ($.01 par value) Authorized and unissued - 1,000,000 shares Common Stock ($.01 par value) Authorized - 9,000,000 shares; Issued - 2,458,982 shares; Outstanding - 2,010,506 and 2,052,075 shares ...... $ 24,590 $ 24,590 Additional paid-in capital ............................................. 24,122,863 24,045,413 Treasury Stock - 359,462 and 317,893 shares ............................ (6,479,106) (5,547,823) Retained Earnings - substantially restricted ........................... 23,848,444 23,393,701 Unrealized loss on securities available for sale, net of deferred tax of $(427,443) and $(1,043,275) ......................................... (664,704) (1,590,591) ESOP Borrowing ......................................................... (892,688) (952,200) Unearned compensation - restricted stock awards ........................ (263,203) (278,463) ------------- ------------- TOTAL STOCKHOLDERS' EQUITY ................................................. $ 39,696,196 $ 39,094,627 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................. $ 433,239,080 $ 423,698,331 ============= ============= See notes to consolidated financial statements
PERMANENT BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) THREE MONTHS ENDED JUNE 30, --------------------------- 1997 1996 ----------- ----------- INTEREST INCOME: Loans ............................................... $ 4,287,820 $ 4,117,639 Mortgage-backed securities .......................... 1,659,951 1,526,338 Investment securities ............................... 1,586,688 1,479,355 Deposits ............................................ 17,473 19,801 Dividends on Federal Home Loan Bank stock ........... 101,905 82,984 ----------- ----------- 7,653,837 7,226,117 ----------- ----------- INTEREST EXPENSE: Deposits ............................................ 3,404,019 3,337,990 Federal Home Loan Bank advances ..................... 1,417,928 1,228,240 Short-term borrowings ............................... 28,951 5,152 ----------- ----------- 4,850,898 4,571,382 ----------- ----------- NET INTEREST INCOME ..................................... 2,802,939 2,654,735 PROVISION FOR LOAN LOSSES ............................... 77,386 60,000 ----------- ----------- NET INTEREST INCOME AFTER LOAN LOSS PROVISION ........................................... 2,725,553 2,594,735 ----------- ----------- OTHER INCOME: Service charges ..................................... 226,811 204,767 Gain on sale of loans ............................... 19,371 2,997 Net gain (loss) on real estate owned ................ 13,241 $ (2,829) Commissions ......................................... 127,686 95,313 Gain (loss) on sale of investment and mortgage-backed securities ......................................... 6,269 (5,835) Other ............................................... 103,657 56,741 ----------- ----------- 497,035 351,154 ----------- -----------
PERMANENT BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (continued) THREE MONTHS ENDED JUNE 30, --------------------------- 1997 1996 ----------- ----------- OTHER EXPENSE: Salaries and employee benefits ...................... 1,122,767 1,025,563 Deposit insurance assessments ....................... 68,956 181,991 Occupancy ........................................... 198,577 193,247 Equipment ........................................... 163,472 159,511 Computer service .................................... 125,083 130,111 Advertising ......................................... 88,914 85,200 Postage and office supplies ......................... 78,247 52,877 Other ............................................... 277,422 206,186 ----------- ----------- 2,123,438 2,034,686 ----------- ----------- INCOME BEFORE INCOME TAXES .............................. 1,099,150 911,203 INCOME TAX PROVISION .................................... 461,228 406,800 ----------- ----------- NET INCOME .............................................. $ 637,922 $ 504,403 =========== =========== EARNINGS PER SHARE OF COMMON STOCK Primary ............................................. $ 0.30 $ 0.23 Fully Diluted ....................................... $ 0.30 $ 0.23 WEIGHTED AVERAGE SHARES OUTSTANDING Primary ............................................. 2,129,810 2,205,513 Fully diluted ....................................... 2,133,141 2,208,612 See notes to consolidated financial statements
PERMANENT BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED JUNE 30, ------------------------------ 1997 1996 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ............................................. $ 637,922 $ 504,403 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation ................................... 133,007 121,965 Deposit premium purchased ...................... (293,751) Amortization and accretion .................... 135,066 174,219 Vesting of restricted stock awards ............. 4,760 Provisions for loan and real estate owned losses 18,675 14,103 (Gain) on sale of securities ................... (7,770) (11,624) Loss on sale of mortgage-backed securities ..... 2,412 (Gain) on sale of loans ........................ (19,371) (2,997) ESOP shares earned ............................. 80,020 36,453 Changes in assets and liabilities: Proceeds from the sales of loans ................... 619,431 222,982 Origination of loans for resale .................... (600,060) (219,985) Other investments .................................. (121,885) Interest receivable ................................ 350,897 (282,862) Deferred income tax ................................ (3,532) (317,998) Other assets ....................................... (44,552) (189,230) Interest payable ................................... 328,957 49,107 Other liabilities .................................. 684,938 652,058 ----------- ----------- Net cash provided by operating activities .............. 1,902,752 753,006 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Loans originated ....................................... (17,814,339) (17,776,343) Loan principal repayments .............................. 15,732,151 19,443,018 Proceeds from: Maturities of: Securities available for sale .................. 1,000,000 5,000,000 Sales of: Securities available for sale .................. 10,961,520 5,528,233 Mortgage-backed securities available for sale .. 3,572,360 Purchases of: Securities available for sale .................. (11,825,781) (29,988,750) Mortgage-backed securities available for sale .. (9,634,234) (1,014,099) Loans .......................................... (3,204,199) (3,695,083) FHLB Stock ..................................... (221,400) (1,427,100) Office properties, equipment and land .......... (1,131,056) (198,029) Payments on mortgage-backed securities ................. 3,704,484 4,780,729 Increase in cash surrender value of life insurance ..... (18,390) (10,743) Payments on real estate owned .......................... (3,503) 8,439 ----------- ----------- Net cash used in investing activities .................. (12,454,747) (15,777,368) ----------- -----------
PERMANENT BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued) THREE MONTHS ENDED JUNE 30, ------------------------------ 1997 1996 ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid ...................................... $ (157,113) $ (111,852) Net change in deposits .............................. 2,983,527 (6,155,983) Receipts from FHLB advances ......................... 71,150,000 41,000,000 Payments on FHLB advances ........................... (66,063,336) (18,702,256) Principal repayment of ESOP borrowing ............... 59,513 59,512 Advance payments by borrowers for taxes and insurance (504,560) (268,026) Net change in other borrowed funds .................. 359,654 (1,767) Purchase of treasury stock .......................... (993,628) Sale of common stock ............................... 44,310 10,983 ------------ ------------ Net cash provided by financing activities ........... 6,878,367 15,830,611 ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS ............. (3,673,628) 806,249 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ........ 6,364,476 4,916,421 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD .............. 2,690,848 5,722,670 ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest ........................................ $ 3,094,621 $ 3,334,841 Income taxes .................................... 100,000 80,000 See notes to consolidated financial statements.
PERMANENT BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements 1. BASIS OF PRESENTATION - The consolidated financial statements include the accounts of Permanent Bancorp, Inc. (the "Company"), its wholly owned subsidiary, Permanent Federal Savings Bank, its wholly owned subsidiary, Perma-Service Corp, and its wholly owned subsidiary, Permanent Insurance Agency, Inc. (collectively the "Bank"). All significant intercompany accounts and transactions have been eliminated. These consolidated interim financial statements at June 30, 1997 and for the three month periods ended June 30, 1997, and 1996, have not been examined by independent auditors, but reflect, in the opinion of the Company's management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations for such periods. These statements should be read in conjunction with the consolidated financial statements and related notes which are incorporated by reference in the Company's Annual Report on Form 10-K for the year ended March 31, 1997. 2. CHANGES IN PRESENTATION - Certain amounts and items appearing in the financial statements for the quarter ended June 30,1996 have been reclassified to conform with the presentation presented for the period ended June 30, 1997. 3. FINANCIAL ACCOUNTING STANDARDS NO. 128 (FAS 128) "EARNINGS PER SHARE" - FAS 128 applies to financial statements for public companies for periods ending after December 15, 1997. Accordingly, the Company will adopt FAS 128 in the third quarter of fiscal 1998. This statement establishes new accounting standards for the calculation of basic earnings per share as well as diluted earnings per share. The Company's basic and diluted earnings per share calculated in accordance with FAS 128 for the periods ended June 30, 1997 and 1996 is as follows:
Three Months Ended June 30, --------------------------- 1997 1996 ---- ---- Basic .32 .24 Diluted .30 .23
The difference between basic and diluted earnings per share represents the dilutive impact of the Company's outstanding stock options. 4. FINANCIAL ACCOUNTING STANDARDS NO. 130 (FAS 130) "ACCOUNTING FOR COMPREHENSIVE INCOME" - FAS 130 requires that changes in the amounts of certain items, including foreign currency translation adjustments and gains and losses on certain securities be shown in the financial statements. FAS 130 does not require a specific format for the financial statement in which comprehensive income is reported, but does require that an amount representing total comprehensive income be reported in that statement. FAS 130 is effective for fiscal years beginning after December 15, 1997. FAS 130 will receive reclassification of earlier financial statements for comparative purposes. Management has not yet determined the effect, if any, of FAS 130 on the consolidated financial statements. 5. FINANCIAL ACCOUNTING STANDARDS NO. 131 (FAS 131) "DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION" - FAS 131 changes the way public companies report information about segments of their business in their annual financial statements and requires them to report selected segment information in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues, and its major customers. FAS 131 is effective for fiscal years beginning after December 15, 1997. Management has not yet determined the effect, if any, of FAS 131 on the consolidated financial statements. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Permanent Bancorp, Inc. (the "Company") is a bank holding company which owns 100% of the capital stock of Permanent Federal Savings Bank (the "Bank") and has no other subsidiaries. Material changes in the consolidated statements of Financial Condition and Results of Operations of the Company, except where noted, are attributed to the operations of the Bank; therefore the following analysis is centered on the activities of the Bank. QUARTER ENDED JUNE 30, 1997 COMPARED TO JUNE 30, 1996 NET INTEREST INCOME - Net interest income before provision for loan losses increased by $148,000 or 5.6% for the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996. This increase was primarily attributable to an increase in the average balances of interest earning assets. Net interest income after provision for loan losses increased by $131,000, or 5.0% for the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996. The increase was smaller than the increase in net interest income before provision for loan losses because of an increase in the loss provision reflecting actual and anticipated loan growth. INTEREST INCOME - Total interest income for the three months ended June 30, 1997 increased $428,000, or 5.9%, from the three month period ended June 30, 1996. This increase was attributable to an increase of $22.1 million in average balances for the comparable periods. INTEREST EXPENSE - Total interest expense increased by $280,000, or 6.1%, during the three months ended June 30, 1997 compared to the three months ended June 30, 1996. Average interest bearing liabilities increased by $27.9 million, but the cost of such liabilities decreased by 8 basis points, compared to the quarter ended June 30, 1996. OTHER INCOME - Total other income increased by $146,000 during the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996. Service charges were $22,000 more and commissions were $32,000 more during the quarter ended June 30, 1997 than during the comparable quarter in 1996. During the quarter ended June 30, 1997 the Company earned profits on sales of loans of $19,000 compared to $3,000 during the quarter ended June 30, 1996 and recognized profits of $6,000 on sales of investment and mortgage-backed securities compared to losses of $6,000 during the quarter ended June 30, 1996. The Company recognized net gains on real estate owned of $13,000 during the current year quarter compared to net losses of $3,000 during the previous years quarter. The remaining other income accounts increased $47,000 during the current year quarter. OTHER EXPENSE - Other expense increased a total of $89,000 during the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996. Salaries and employee benefits increased by $97,000 during the quarter ended June 30, 1997 compared to the same period in 1996, with $44,000 of the increase being higher expense recognition on the Company's employee stock ownership plan due to increased market value of Company stock. Occupancy expenses increased by $5,000 and equipment and computer expenses decreased by $1,000 during the comparable periods. Deposit insurance assessments were $113,000 lower during the quarter ended June 30, 1997, due to the recapitalization of the Federal Deposit Insurance Corporation Savings Association Insurance Fund while advertising expenditures were $4,000 higher than during the quarter ended June 30, 1996. Postage and office supplies were $25,000 higher during the quarter ended June 30, 1997. The remaining other expense categories were $71,000 higher during the quarter ended June 30, 1997 than during the quarter ended June 30, 1996, with the most significant change being an increase of $16,000 in legal expense. INCOME TAXES - Provisions for income taxes amounted to $461,000, or 41.9% of income before taxes during the quarter ended June 30, 1997, compared to $407,000, or 44.6% of income before taxes during the quarter ended June 30, 1996. FINANCIAL CONDITION JUNE 30, 1997 COMPARED TO MARCH 31, 1997 The Company's total assets at June 30, 1997 were $433.2 million representing an increase of $9.5 million, or 2.3%, from March 31, 1997. Investment and mortgage-backed securities, including those classified as available for sale, increased by $8.3 million to $194.7 million at June 30, 1997 from $186.4 million at March 31, 1997. Net loans increased by $4.2 million to $214.4 million at June 30, 1997 compared to $210.2 million at March 31, 1996. During May, 1997 the Bank assumed the $5.7 million deposit liabilities and purchased the building and certain other assets of a branch of First Chicago/NBD Corp. located in Bell Oaks Shopping Center in Newburgh, Indiana. This Branch is located in what is widely considered the prime banking and commercial area of Newburgh, an upscale and rapidly growing community immediately east of Evansville. On September 19, 1997, the Bank's existing Newburgh Branch at Stonegate Square, will be closed and the accounts transferred to the new location. The loan growth occurred in single family mortgage loans, commercial loans and through the purchase of commercial paper. Consumer loans decreased by $2.1 million during the quarter. By policy, the Bank retains all adjustable rate loans and all fixed rate loans with terms of 20 year or less in its portfolio, and sells all fixed rate loans of terms exceeding 20 years. Non-performing assets were at $4.7 million at June 30, 1997, and at March 31, 1997, compared to $6.9 million at June 30, 1996. As of June 30, 1997, the Bank's loan loss allowance was $2,107,538. Although no assurance can be provided, management believes this amount to be sufficient based upon historical averages and current trends. Based on management's analysis of classified assets, loss histories and future projections, the allowance for loan losses (presented below in tabular form) was deemed by management to be adequate at June 30, 1997.
1997 1996 ----------- ----------- Balance, April 1 ..................... $ 2,126,225 $ 2,237,804 Provision for loan losses ............ 77,386 60,000 Net charge offs ...................... (58,711) (45,897) ----------- ----------- Balance, June 30 ..................... $ 2,144,900 $ 2,251,907
The loan growth and the increase in investment and mortgage-backed securities was funded through Federal Home Loan Bank advances which increased by $5.1 million to $103.6 million at June 30, 1997 compared to $98.5 million at March 31, 1997, and deposits which increased by $2.9 million to $283.7 million at June 30, 1997 compared to $280.8 million at March 31, 1997. Total stockholders' equity increased by $600,000 to $39.7 million at June 30, 1997 from $39.1 million at March 31, 1997. The increase was attributable to a decrease of $926,000 in unrealized losses on securities available for sale, retention of earnings, reduction of Employee Stock Ownership Plan liability, vesting of restricted stock awards and through the exercise of stock options. Decreases in stockholders' equity resulted from the repurchase of stock and the payment of dividends. LIQUIDITY AND CAPITAL RESOURCES - The standard measure of liquidity for the thrift industry is the ratio of cash and eligible investments to a certain percentage of borrowings due within one year and net withdrawable deposit accounts. The minimum required level is currently set by OTS regulation at 5%. At June 30, 1997, the Bank's liquidity ratio was 11.44%. Historically, the Bank has maintained its liquid assets which qualify for purposes of the OTS liquidity regulations above the minimum requirements imposed by such regulations and at a level believed adequate to meet requirements of normal daily activities, repayment of maturing debt, and potential deposit outflows. Cash flow projections are regularly reviewed and updated to assure that adequate liquidity is maintained. Cash for these purposes is generated through the maturity of investment securities and loan sales and repayments, and may be generated through increases in deposits. Loan payments are a relatively stable source of funds while deposit flows are influenced significantly by the level of interest rates and general money market conditions. Borrowings may be used to compensate for reductions in other sources of funds such as deposits. As a member of the FHLB system, the Bank may borrow from the FHLB of Indianapolis. At June 30, 1997, the Bank had $103.6 million in such borrowings. As of that date, the Bank had commitments to fund loan origination's and purchase investment securities of approximately $7.4 million. In the opinion of management, the Bank has sufficient cash flow and borrowing capacity to meet current and anticipated funding commitments. The following table sets forth the Bank's compliance with its capital requirements at June 30, 1997.
Amount Percent (*) ----------- ----- Tangible Capital: Capital level .................... $35,258,815 8.20% Requirement ...................... 6,450,915 1.50% ----------- ----- Excess ........................... $28,807,900 6.70% ----------- ----- Core Capital: Capital level .................... $35,550,118 8.26% Requirement ...................... 12,910,570 3.00% ----------- ----- Excess ........................... $22,639,548 5.26% ----------- ----- Risk-Based Capital: Capital level .................... $37,334,872 20.57% Requirement ...................... 14,518,452 8.00% ----------- ----- Excess ........................... $22,816,420 12.57% ----------- -----
(*) Tangible capital is computed as a percentage at adjusted total assets of $430,061,027. Core capital is computed as a percentage of adjusted total assets of $430,352,330. Risk-based capital is computed as a percentage of risk-weighted assets of $181,480,649.
SUPPLEMENTAL DATA Three Months Ended June 30, ------------------ 1997 1996 ---- ---- Weighted average interest rate earned on total interest-earning assets ........................ 7.46% 7.52% Weighted average cost of total interest-bearing liabilities ......................... 5.04% 5.12% Interest rate spread during period ..................... 2.42% 2.40% Net yield on interest-earning assets (net interest income divided by average interest-earning assets on annualized basis) ......... 2.73% 2.76% Total interest income divided by average total assets (on annualized basis) ................... 7.15% 7.16% Total interest expense divided by average total assets (on annualized basis) ........... 4.53% 4.53% Net interest income divided by average total assets (on annualized basis) ................... 2.62% 2.63% Return on assets (net income divided by average total assets on annualized basis) ............ 0.60% 0.50% Return on equity (net income divided by average total equity on annualized basis) ............ 6.48% 4.94% Interest rate spread at end of period .................. 2.38% 2.44% Data as of June 30, March 31, 1997 1997 ------ ------ (IN THOUSANDS) NONPERFORMING ASSETS: Loans: Non-accrual .............................. $2,483 $2,463 Restructured ............................ 2,118 2,128 ------ ------ Total nonperforming loans ........................ $4,601 $4,591 Real estate owned, net ........................... 44 41 Other repossessed assets, net .................... 77 58 ------ ------ Total Nonperforming Assets ......................... $4,722 $4,690 Nonperforming assets divided by total assets ....... 1.09% 1.11% Nonperforming loans divided by total loans ......... 2.14% 2.18% Balance in Allowance for Loan Losses ............... $2,145 $2,126
REGULATORY DEVELOPMENTS Legislation Regarding Bad Debt Reserves - Under Section 593 of the Internal Revenue Code of 1986, as amended (the "Code"), thrift institutions such as the Bank, which meet certain definitional tests primarily relating to their assets and the nature of their business, were permitted to establish a tax reserve for bad debts and to make annual additions thereto, which additions could, within specified limitations, be deducted in arriving at their taxable income. The Company's deduction with respect to "qualifying loans", which are generally loans secured by certain interests in real property, could previously be computed using an amount based on the Company's loss experience (the "experience method"), or a percentage equal to 8.0% of the Company's taxable income (the "percentage of taxable income method"), computed without regard to this deduction and with additional modifications and reduced by the amount of any permitted addition to the non-qualifying reserve. Under recently passed legislation, Section 593 of the Internal Revenue Code of 1986 has been repealed and the Bank will be permitted to use only the experience method of computing additions to its bad debt reserve. In addition, the Bank will be unable to make additions to its tax bad debt reserve, and will be permitted to deduct bad debts only as they occur. The legislation will affect the Company's tax calculation during the current fiscal year. Management can not now predict the impact of the legislation on the results of operations in the current or future fiscal years. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings None. ITEM 2. Changes in Securities None. ITEM 3. Defaults Upon Senior Securities None. ITEM 4. Submission of Matters to a Vote of Security Holders None ITEM 5. Other Information None ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K A Form 8-K was filed on April 15, 1997, with the Securities and Exchange Commission, regarding a press release dated April 15, 1997, announcing the date of the registrant's annual meeting and the record date for voting purposes. A Form 8-K was filed on April 30, 1997, with the Securities and Exchange Commission, regarding changes to the registrant's bylaws and a press release dated April 28, 1997 announcing the adoption of a bylaw amendment concerning director qualifications and an extension of time period for shareholders to submit nominations for directors for the July 22, 1997 Annual Meeting of Shareholders to June 17, 1997 and a press release dated April 28, 1997 announcing a bylaw amendment increasing the number of directors from nine to ten and the appointment of Murray J. Brown as director to fill the newly created directorship. A Form 8-K was filed on May 27, 1997, with the Securities and Exchange Commission, regarding a press release dated May 19, 1997, announcing the completion of its assumption of deposit liabilities and its acquisition of certain assets associated with the branch of NBD Bank, N.A. in Newburgh, Indiana. A Form 8-K was filed on May 29, 1997, with the Securities and Exchange Commission, regarding a press release dated May 22, 1997, announcing an increase in dividends to $.10 per share for the quarter ending June 30, 1997. 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. PERMANENT BANCORP, INC. DATE: AUGUST 13, 1997 By /s/ Donald P. Weinzapfel, ------------------------- Donald P. Weinzapfel, Chairman of the Board President and Chief Executive Officer (Principal Executive Officer) DATE: AUGUST 13, 1997 By /s/ Joseph M. Schnapf Joseph M. Schnapf Chief Financial Officer (Principal Financial Accounting Officer) EX-27 2
9 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAR-31-1998 JUN-30-1997 1,259,511 1,431,337 0 0 168,719,645 26,017,279 26,235,508 216,544,447 2,144,900 433,239,080 283,736,880 80,353,621 4,081,733 25,378,320 24,590 0 0 39,671,606 433,239,080 4,287,820 3,246,639 119,378 7,653,837 3,404,019 4,850,898 2,802,939 77,386 6,269 2,123,438 1,099,150 637,922 0 0 637,922 0.30 0.30 7.46 2,483,000 0 2,118,000 235,560 2,126,225 77,386 58,711 2,144,900 355,146 0 1,789,754
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