-----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, C+0k2sO74WASo7/ag/8ghd8h/ymqxPAVplGYbgvCqcGxuEV0ekm7FNwQNUhVkT9t DunfNVLEXHKTnqxMUKpHIA== /in/edgar/work/0001046386-00-000135/0001046386-00-000135.txt : 20001115 0001046386-00-000135.hdr.sgml : 20001115 ACCESSION NUMBER: 0001046386-00-000135 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASB FINANCIAL CORP /OH CENTRAL INDEX KEY: 0000944304 STANDARD INDUSTRIAL CLASSIFICATION: [6035 ] IRS NUMBER: 311429488 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-25906 FILM NUMBER: 763095 BUSINESS ADDRESS: STREET 1: 503 CHILLICOTHE ST CITY: PORTSMOUTH STATE: OH ZIP: 45662 BUSINESS PHONE: 6143543177 MAIL ADDRESS: STREET 1: 503 CHILLICTHE ST CITY: PORTSMOUTH STATE: OH ZIP: 45662 10QSB 1 0001.txt QUARTERLY FINANCIAL STATEMENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 ---------------------------------------------- OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____________ to _______________ Commission File Number: 0-25906 -------------- ASB FINANCIAL CORP. - ------------------------------------------------------------------------------ (Exact name of small business issuer as specified in its charter) Ohio 31-1429488 - ------------------------------- -------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 503 Chillicothe Street Portsmouth, Ohio 45662 - ------------------------------------------------------------------------------ (Address of principal executive offices) (740) 354-3177 - ------------------------------------------------------------------------------ (Issuer's telephone number) - ------------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the issuer filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: November 6, 2000 - 1,569,558 shares of common stock Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] Page 1 of 14 pages INDEX Page PART I - FINANCIAL INFORMATION Consolidated Statements of Financial Condition 3 Consolidated Statements of Earnings 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II - OTHER INFORMATION 13 SIGNATURES 14 2 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands, except share data) September 30, June 30, ASSETS 2000 2000 Cash and due from banks $ 3,557 $ 917 Interest-bearing deposits in other financial institutions 1,797 4,152 ------- ------- Cash and cash equivalents 5,354 5,069 Investment securities available for sale - at market 19,423 19,112 Mortgage-backed securities available for sale - at market 8,279 8,616 Loans receivable - net 97,414 95,084 Office premises and equipment - at depreciated cost 1,386 1,366 Federal Home Loan Bank stock - at cost 747 733 Accrued interest receivable on loans 60 63 Accrued interest receivable on mortgage-backed securities 62 59 Accrued interest receivable on investments and interest-bearing deposits 307 355 Prepaid expenses and other assets 512 542 Prepaid federal income taxes 128 228 Deferred federal income tax assets 478 671 ------- ------- Total assets $134,150 $131,898 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $112,526 $110,007 Advances from the Federal Home Loan Bank 6,282 7,790 Advances by borrowers for taxes and insurance 89 173 Accrued interest payable 839 89 Other liabilities 1,353 1,258 ------- ------- Total liabilities 121,089 119,317 Shareholders' equity Preferred stock, 1,000,000 shares authorized, no par value; no shares issued - - Common stock, authorized 4,000,000 shares without par or stated value; 1,746,924 shares issued - - Additional paid-in capital 8,454 8,454 Retained earnings, restricted 7,976 7,870 Shares acquired by stock benefit plans (1,059) (1,059) Accumulated comprehensive loss, unrealized losses on securities designated as available for sale, net of related tax effects (218) (592) Less 177,366 shares of treasury stock - at cost (2,092) (2,092) ------- ------- Total shareholders' equity 13,061 12,581 ------- ------- Total liabilities and shareholders' equity $134,150 $131,898 ======= =======
3 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF EARNINGS For the three months ended September 30, (In thousands, except per share data) 2000 1999 Interest income Loans $1,989 $1,668 Mortgage-backed securities 153 156 Investment securities 401 386 Interest-bearing deposits and other 5 11 ----- ----- Total interest income 2,548 2,221 Interest expense Deposits 1,453 1,215 Borrowings 116 74 ----- ----- Total interest expense 1,569 1,289 ----- ----- Net interest income 979 932 Provision for losses on loans - 1 ----- ----- Net interest income after provision for losses on loans 979 931 Other income Gain on sale of investment securities 25 - Other operating 82 72 ----- ----- Total other income 107 72 General, administrative and other expense Employee compensation and benefits 392 372 Occupancy and equipment 44 24 Federal deposit insurance premiums 7 15 Franchise taxes 51 51 Data processing 85 69 Other operating 122 94 ----- ----- Total general, administrative and other expense 701 625 ----- ----- Earnings before income taxes 385 378 Federal income taxes Current 107 119 Deferred - (14) ----- ----- Total federal income taxes 107 105 ----- ----- NET EARNINGS $ 278 $ 273 ===== ===== EARNINGS PER SHARE Basic $.18 $.17 === === Diluted $.18 $.17 === ===
4 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended September 30, (In thousands) 2000 1999 Net earnings $ 278 $273 Other comprehensive income, net of tax: Unrealized holding gains (losses) on securities during the period, net of tax of $201 and $(115) in 2000 and 1999, respectively 391 (224) Reclassification adjustment for realized gains included in earnings, net of tax of $8 in 2000 (17) - ---- --- Comprehensive income $ 652 $ 49 ==== === Accumulated comprehensive income (loss) $(218) $ 41 ==== ===
5 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended September 30, (In thousands) 2000 1999 Cash flows from operating activities: Net earnings for the period $ 278 $ 273 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Amortization of discounts and premiums on loans, investments and mortgage-backed securities - net (47) 6 Amortization of deferred loan origination fees (15) (29) Depreciation and amortization 30 24 Federal Home Loan Bank stock dividends (14) (14) Provision for losses on loans - 1 Gain on sale of investment securities (25) - Increase (decrease) in cash due to changes in: Accrued interest receivable 48 (21) Prepaid expenses and other assets 30 209 Accrued interest payable 750 595 Other liabilities 95 88 Federal income taxes Current 100 118 Deferred - (14) ----- ----- Net cash provided by operating activities 1,230 1,236 Cash flows provided by (used in) investing activities: Proceeds from maturity of investment securities 255 - Proceeds from sale of investment securities 26 - Purchase of investment securities - (765) Principal repayments on mortgage-backed securities 384 652 Purchase of loans (972) - Loan principal repayments 4,242 4,206 Loan disbursements (5,585) (8,037) Purchase of office premises and equipment (50) (202) Decrease in certificates of deposit in other financial institutions - net - 1 ----- ----- Net cash used in investing activities (1,700) (4,145) Cash flows provided by (used in) financing activities: Net increase in deposit accounts 2,519 1,232 Proceeds from Federal Home Loan Bank advances - 1,500 Repayment of Federal Home Loan Bank advances (1,508) (1,508) Advances by borrowers for taxes and insurance (84) (85) Dividends paid on common shares (172) (1,822) Proceeds from exercise of stock options - 61 Purchase of treasury stock - (587) ----- ----- Net cash provided by (used in) financing activities 755 (1,209) ----- ----- Net increase (decrease) in cash and cash equivalents 285 (4,118) Cash and cash equivalents at beginning of period 5,069 7,566 ----- ----- Cash and cash equivalents at end of period $5,354 $3,448 ===== =====
6 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the three months ended September 30, (In thousands) 2000 1999 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest on deposits and borrowings $819 $ 694 === ==== Supplemental disclosure of noncash investing activities: Unrealized gains (losses) on securities designated as available for sale, net of related tax effects $374 $(224) === ====
7 ASB Financial Corp. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the three months ended September 30, 2000 and 1999 1. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-QSB and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto of ASB Financial Corp. (the "Corporation") included in the Annual Report on Form 10-KSB for the year ended June 30, 2000. However, in the opinion of management, all adjustments (consisting of only normal recurring accruals) which are necessary for a fair presentation of the financial statements have been included. The results of operations for the three month period ended September 30, 2000, are not necessarily indicative of the results which may be expected for the entire fiscal year. 2. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiary, American Savings Bank, fsb ("American" or the "Savings Bank"). All significant intercompany items have been eliminated. 3. Earnings Per Share Basic earnings per share is computed based upon the weighted-average shares outstanding during the period, less shares in the ASB Financial Corp. Employee Stock Ownership Plan (the "ESOP") that are unallocated and not committed to be released. Weighted-average common shares outstanding, which give effect to 49,633 unallocated ESOP shares, totaled 1,519,925 for the three month period ended September 30, 2000. Weighted-average common shares deemed outstanding, which give effect to 62,795 unallocated ESOP shares, totaled 1,577,463 for the three month period ended September 30, 1999. Diluted earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be issued under the Corporation's stock option plan. Weighted-average common shares deemed outstanding for purposes of computing diluted earnings per share totaled 1,519,925 for the three month period ended September 30, 2000, and 1,600,851 for the three month period ended September 30, 1999, respectively. Incremental shares related to the assumed exercise of stock options included in the calculation of diluted earnings per share totaled 23,388 for the three month period ended September 30, 1999. Options to purchase 164,557 shares of common stock with a weighted-average exercise price of $10.08 were outstanding at September 30, 2000, but were excluded from the computation of common share equivalents for the three months ended September 30, 2000, because their exercise prices were greater than the average market price of the common shares. 8 ASB Financial Corp. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the three months ended September 30, 2000 and 1999 4. Effects of Recent Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," which requires entities to recognize all derivatives in their financial statements as either assets or liabilities measured at fair value. SFAS No. 133 also specifies new methods of accounting for hedging transactions, prescribes the items and transactions that may be hedged, and specifies detailed criteria to be met to qualify for hedge accounting. The definition of a derivative financial instrument is complex, but in general, it is an instrument with one or more underlyings, such as an interest rate or foreign exchange rate, that is applied to a notional amount, such as an amount of currency, to determine the settlement amount(s). It generally requires no significant initial investment and can be settled net or by delivery of an asset that is readily convertible to cash. SFAS No. 133 applies to derivatives embedded in other contracts, unless the underlying of the embedded derivative is clearly and closely related to the host contract. SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years beginning after June 15, 2000. On adoption, entities are permitted to transfer held-to-maturity debt securities to the available-for-sale or trading category without calling into question their intent to hold other debt securities to maturity in the future. Management adopted SFAS No. 133 effective July 1, 2000, as required, without material impact on the Corporation's financial statements. In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", which revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but carries over most of the provisions of SFAS No. 125 without reconsideration. SFAS No. 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. SFAS No. 140 is not expected to have a material effect on the Corporation's financial position or results of operations. 9 ASB Financial Corp. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Discussion of Financial Condition Changes from June 30, 2000 to September 30, 2000 At September 30, 2000, the Corporation's assets totaled $134.2 million, an increase of $2.3 million, or 1.7%, over the balance of total assets at June 30, 2000. The increase in assets was funded primarily by growth in deposits of $2.5 million, which was partially offset by a decrease in Federal Home Loan Bank ("FHLB") advances totaling $1.5 million. Liquid assets (i.e. cash, interest-bearing deposits and certificates of deposit) increased by $285,000 from June 30, 2000 levels, to a total of $5.4 million at September 30, 2000. Investment securities totaled $19.4 million at September 30, 2000, an increase of $311,000, or 1.6%, over June 30, 2000 levels. During the three months ended September 30, 2000, net unrealized losses decreased by $512,000. Mortgage-backed securities totaled $8.3 million at September 30, 2000, a decrease of $337,000, or 3.9%, from the total at June 30, 2000. The decrease was due primarily to principal repayments of $384,000, which were offset by a decline in net unrealized losses totaling $55,000 for the quarter. Loans receivable increased by $2.3 million, or 2.5%, during the three month period ended September 30, 2000, to a total of $97.4 million. Loan disbursements and purchases amounted to $6.6 million and were partially offset by principal repayments of $4.2 million. The allowance for loan losses totaled $723,000 at both September 30, 2000 and June 30, 2000. Nonperforming and nonaccrual loans totaled $507,000 and $281,000 at September 30, 2000 and June 30, 2000, respectively. The allowance for loan losses represented 142.6% and 257.3% of nonperforming loans as of September 30, 2000 and June 30, 2000, respectively. Although management believes that its allowance for loan losses at September 30, 2000, was adequate based upon the available facts and circumstances, there can be no assurance that additions to such allowance will not be necessary in future periods, which could adversely affect the Corporation's results of operations. Deposits totaled $112.5 million at September 30, 2000, an increase of $2.5 million, or 2.3%, over June 30, 2000 levels. The growth in deposits was primarily attributable to management's efforts to maintain a moderate rate of deposit growth through marketing strategies. Proceeds from deposit growth were generally used to fund new loan originations. Advances from the FHLB totaled $6.3 million at September 30, 2000, a decrease of $1.5 million, or 19.4%, compared to June 30, 2000. Shareholders' equity totaled $13.1 million at September 30, 2000, an increase of $480,000, or 3.8%, over June 30, 2000 levels. The increase resulted primarily from a decrease in unrealized losses on securities designated as available for sale of $374,000, and net earnings of $278,000, which were partially offset by dividends on common shares totaling $172,000 for the quarter. American is required to meet minimum capital standards promulgated by the Office of Thrift Supervision ("OTS"). At September 30, 2000, American's regulatory capital was well in excess of the minimum capital requirements. 10 ASB Financial Corp. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Comparison of Operating Results for the Three Month Periods Ended September 30, 2000 and 1999 General Net earnings amounted to $278,000 for the three months ended September 30, 2000, an increase of $5,000, or 1.8%, compared to the $273,000 of net earnings reported for the same period in 1999. The increase in earnings resulted primarily from a $47,000 increase in net interest income and a $35,000 increase in other income, which were partially offset by a $76,000 increase in general, administrative and other expense. Net Interest Income Net interest income increased by $47,000, or 5.0%, for the three months ended September 30, 2000, compared to the 1999 period. Interest income on loans increased by $321,000, or 19.2%, during the three month period ended September 30, 2000, compared to the 1999 period, due primarily to an $11.9 million increase in the average portfolio balance outstanding and a 36 basis point increase in the weighted average interest rate year to year. Interest income on investment and mortgage-backed securities and interest-bearing deposits and other increased by $6,000, or 1.1%, due primarily to a 52 basis point increase in the weighted average interest rate year to year, which was partially offset by a $2.4 million decrease in the average balance of the related assets. Interest expense on deposits increased by $238,000, or 19.6%, due primarily to an increase of approximately $9.7 million in the average balance of deposits outstanding, coupled with a 44 basis point increase in the weighted average interest rate year to year. Interest expense on borrowings increased by $42,000, or 56.8%, due primarily to a 150 basis point increase in the average cost of borrowings, and a $1.2 million increase in the average balance of borrowings outstanding. Provision for Losses on Loans As a result of an analysis of historical experience, the volume and type of lending conducted by the Savings Bank, the status of past due principal and interest payments, general economic conditions, particularly as such conditions relate to the Savings Bank's market area, and other factors related to the collectibility of the Savings Bank's loan portfolio, management determined that the allowance for loan losses was adequate and did not record a provision for losses on loans for the three month period ended September 30, 2000. There can be no assurance that the loan loss allowance will be adequate to cover losses on nonperforming assets in the future. Other Income Other income increased by $35,000, or 48.6%, for the three months ended September 30, 2000, compared to the same period in 1999, due primarily to a $25,000 gain on the sale of investment securities, coupled with a $10,000, or 13.9%, increase in other operating income, due primarily to increased service fees on ATM and other account transactions during the period. 11 ASB Financial Corp. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Comparison of Operating Results for the Three Month Periods Ended September 30, 2000 and 1999 (continued) General, Administrative and Other Expense General, administrative and other expense increased by $76,000, or 12.2%, during the three months ended September 30, 2000, compared to the same period in 1999. This increase resulted primarily from a $20,000, or 5.4%, increase in employee compensation and benefits, a $20,000, or 83.3%, increase in occupancy and equipment expense, a $16,000, or 23.2%, increase in data processing expense, and a $28,000, or 29.8%, increase in other operating expense. The increase in employee compensation and benefits was due primarily to an increase in staffing levels including the addition of a chief financial officer. The increase in occupancy and equipment expense reflects increased depreciation and maintenance costs associated with a new drive-through location and the new computer hardware purchased during fiscal 2000. The increase in data processing expense primarily reflects an increase in transaction costs, coupled with the effects of the Corporation's overall growth year to year. The increase in other operating expense relates primarily to amortization associated with the Corporation's participation in a low income housing partnership. Federal Income Taxes The provision for federal income taxes totaled $107,000 for the three months ended September 30, 2000, an increase of $2,000, or 1.9%, compared to the same period in 1999. This increase resulted primarily from the growth in net earnings before taxes of $7,000, or 1.9%, offset by the effects of tax credits from the Savings Bank's investment in a low income housing partnership. The effective tax rate was 27.8% for the three months ended September 30, 2000 and 1999. 12 ASB Financial Corp. PART II 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 On October 25, 2000, the Corporation held its Annual Meeting of Shareholders. In connection therewith, two matters were submitted to the shareholders for a vote. The shareholders elected five directors to terms expiring in 2001 by the following votes: For Against William J. Burke 1,291,149 12,613 Lee O. Fitch 1,288,685 15,077 Gerald R. Jenkins 1,291,149 12,613 Louis M. Schoettle 1,291,149 12,613 Robert M. Smith 1,291,149 12,613 The shareholders also ratified the selection of Grant Thornton LLP as the Corporation's auditors for the 2001 fiscal year by the following vote: For: 1,298,499 Against: 1,780 Abstain: 3,483 ITEM 5. Other Information None. ITEM 6. Exhibits and Reports on Form 8-K Form 8-K: None. Exhibits: 27 Financial data schedule for the three months ended September 30, 2000. 13 ASB Financial Corp. 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. Date: November 10, 2000 By:/s/Robert M. Smith -------------------------- --------------------------------- Robert M. Smith President, Chief Executive Officer and principal financial officer 14 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
9 1,000 3-MOS JUN-30-2001 JUL-01-2000 SEP-30-2000 3,557 1,797 0 0 27,702 0 0 97,414 723 134,150 112,526 0 2,281 6,282 0 0 0 13,061 134,150 1,989 554 5 2,548 1,453 1,569 979 0 25 701 385 278 0 0 278 .18 .18 3.07 423 84 0 0 723 0 0 723 0 0 723
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