-----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, Pat1xBX+o5Px4fsh2fgom3BSZbxA5ZPOska1F2+JPZ7tYonm0w6/O7xtk6rPIJRs 63UKa3tAHp8lJkfcz/HFQg== 0001046386-02-000141.txt : 20021114 0001046386-02-000141.hdr.sgml : 20021114 20021114095444 ACCESSION NUMBER: 0001046386-02-000141 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASB FINANCIAL CORP /OH CENTRAL INDEX KEY: 0000944304 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 311429488 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-25906 FILM NUMBER: 02822137 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 asb10qsb_93002.txt QUARTERLY REPORT ON FORM 10QSB 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, 2002 ----------------------------------------------- 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, 2002 - 1,526,079 shares of common stock, no par value Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] 1 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 CERTIFICATIONS 15 2 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands, except share data) September 30, June 30, ASSETS 2002 2002 Cash and due from banks $ 930 $ 1,428 Interest-bearing deposits in other financial institutions 3,102 6,276 ------- ------- Cash and cash equivalents 4,032 7,704 Certificates of deposit in other financial institutions 100 100 Investment securities available for sale - at market 20,802 20,866 Mortgage-backed securities available for sale - at market 9,442 7,091 Loans receivable - net 110,043 109,015 Office premises and equipment - at depreciated cost 1,499 1,277 Federal Home Loan Bank stock - at cost 1,029 1,017 Accrued interest receivable on loans 181 216 Accrued interest receivable on mortgage-backed securities 53 41 Accrued interest receivable on investments and interest-bearing deposits 350 293 Prepaid expenses and other assets 664 646 Deferred federal income taxes - 6 ------- ------- Total assets $148,195 $148,272 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $126,058 $126,872 Advances from the Federal Home Loan Bank 4,214 4,223 Advances by borrowers for taxes and insurance 77 162 Accrued interest payable 569 85 Other liabilities 1,398 1,307 Accrued federal income taxes 41 169 Deferred federal income taxes 89 - ------- ------- Total liabilities 132,446 132,818 Shareholders' equity Preferred stock, 1,000,000 shares authorized, no par value; no shares issued - - Common stock, 4,000,000 shares authorized, no par value; 1,760,698 and 1,760,681 shares issued at September 30, 2002 and June 30, 2002, respectively - - Additional paid-in capital 8,619 8,619 Retained earnings, restricted 9,438 9,152 Shares acquired by stock benefit plans (537) (537) Accumulated comprehensive income, unrealized gains on securities designated as available for sale, net of related tax effects 879 850 Less 234,619 and 232,819 shares of treasury stock at September 30, 2002 and June 30 2002, respectively - at cost (2,650) (2,630) ------- ------- Total shareholders' equity 15,749 15,454 ------- ------- Total liabilities and shareholders' equity $148,195 $148,272 ======= =======
3 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF EARNINGS For the three months ended September 30, (In thousands, except per share data) 2002 2001 Interest income Loans $2,031 $2,066 Mortgage-backed securities 129 131 Investment securities 303 317 Interest-bearing deposits and other 11 57 ----- ----- Total interest income 2,474 2,571 Interest expense Deposits 1,058 1,511 Borrowings 21 41 ----- ----- Total interest expense 1,079 1,552 ----- ----- Net interest income 1,395 1,019 Other income Gain on investment securities transactions 5 31 Other operating 128 92 ----- ----- Total other income 133 123 General, administrative and other expense Employee compensation and benefits 468 415 Occupancy and equipment 44 46 Franchise taxes 3 45 Data processing 131 93 Other operating 191 151 ----- ----- Total general, administrative and other expense 837 750 ----- ----- Earnings before income taxes 691 392 Federal income taxes Current 123 76 Deferred 80 33 ----- ----- Total federal income taxes 203 109 ----- ----- NET EARNINGS $ 488 $ 283 ===== ===== EARNINGS PER SHARE Basic $.32 $.19 === === Diluted $.31 $.18 === ===
4 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended September 30, (In thousands) 2002 2001 Net earnings $488 $283 Other comprehensive income, net of tax: Unrealized holding gains on securities during the period, net of tax of $16 and $2 in 2002 and 2001, respectively 32 3 Reclassification adjustment for realized gains included in earnings, net of tax of $2 and $11 in 2002 and 2001, respectively (3) (20) --- --- Comprehensive income $517 $266 === === Accumulated comprehensive income $879 $762 === ===
5 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended September 30, (In thousands) 2002 2001 Cash flows from operating activities: Net earnings for the period $ 488 $ 283 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 73 8 Amortization of deferred loan origination fees (23) (24) Depreciation and amortization 36 27 Federal Home Loan Bank stock dividends (12) (14) Gain on investment securities transactions (5) (31) Increase (decrease) in cash due to changes in: Accrued interest receivable (34) 58 Prepaid expenses and other assets (18) 310 Accrued interest payable 484 765 Other liabilities 91 67 Federal income taxes Current (128) (56) Deferred 80 33 ------ ------ Net cash provided by operating activities 1,032 1,426 Cash flows provided by (used in) investing activities: Proceeds from maturities of investment securities 5,003 6,296 Proceeds from sale of investment securities - 32 Purchase of investment securities (4,879) (3,089) Principal repayments on mortgage-backed securities 3,963 833 Purchase of mortgage-backed securities (6,398) - Loan principal repayments 9,703 9,005 Loan disbursements (10,708) (10,404) Purchase of office premises and equipment (258) - ------ ------ Net cash provided by (used in) investing activities (3,574) 2,673 Cash flows provided by (used in) financing activities: Net decrease in deposit accounts (814) (334) Repayment of Federal Home Loan Bank advances (9) (8) Advances by borrowers for taxes and insurance (85) (80) Purchase of treasury stock (20) - Dividends paid on common shares (202) (184) ------ ------ Net cash used in financing activities (1,130) (606) ------ ------ Net increase (decrease) in cash and cash equivalents (3,672) 3,493 Cash and cash equivalents at beginning of period 7,704 4,649 ------ ------ Cash and cash equivalents at end of period $ 4,032 $ 8,142 ====== ======
6 ASB Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the three months ended September 30, (In thousands) 2002 2001 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest on deposits and borrowings $595 $787 === === Federal income taxes $230 $ 53 === === Supplemental disclosure of noncash investing activities: Unrealized gains (losses) on securities designated as available for sale, net of related tax effects $ 29 $(17) === ===
7 ASB Financial Corp. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For three-month periods ended September 30, 2002 and 2001 1. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with the 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 accounting principles generally accepted in the United States of America. 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, 2002. 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, 2002, are not necessarily indicative of the results which may be expected for the entire fiscal year. In June 2002, the Corporation's wholly-owned subsidiary, American Savings Bank, fsb ("American" or the "Savings Bank") acquired substantially all of the assets and liabilities of The Waverly Building and Loan Company ("Waverly"). The acquisition was accounted for using the purchase method of accounting. The business combination with Waverly added approximately $5.6 million in assets and $4.6 million in liabilities to the Corporation at June 30, 2002. Consistent with the purchase method of accounting, the Corporation's prior years operating results were not restated for the acquisition. 2. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Corporation and American. All significant intercompany items have been eliminated. 3. Earnings Per Share Basic earnings per common share are computed based upon the weighted-average number of common shares outstanding during the period less shares in the ESOP that are unallocated and not committed to be released. Weighted-average common shares deemed outstanding give effect to 21,979 and 34,918 unallocated ESOP shares for the three month periods ended September 30, 2002 and 2001, respectively. Diluted earnings per common share include the dilutive effect of all additional potential common shares issuable under the Corporation's stock option plan. The computations are as follows:
For the three months ended September 30, 2002 2001 Weighted-average common shares outstanding (basic) 1,505,233 1,503,861 Dilutive effect of assumed exercise of stock options 70,534 46,913 --------- --------- Weighted-average common shares outstanding (diluted) 1,575,767 1,550,774 ========= =========
8 ASB Financial Corp. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For three-month periods ended September 30, 2002 and 2001 4. Effects of Recent Accounting Pronouncements In June 2001, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Intangible Assets," which prescribes accounting for all purchased goodwill and intangible assets. Pursuant to SFAS No. 142, acquired goodwill is not amortized, but is tested for impairment at the reporting unit level annually and whenever an impairment indicator arises. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. Management adopted SFAS No. 142 effective July 1, 2002, as required, without material effect on the Corporation's financial position or results of operations. In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which carries over the recognition and measurement provisions in SFAS No. 121. Accordingly, an entity must recognize an impairment loss if the carrying value of a long-lived asset or asset group (a) is not recoverable and (b) exceeds its fair value. Similar to SFAS No. 121, SFAS No. 144 requires an entity to test an asset or asset group for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. SFAS No. 144 differs from SFAS No. 121 in that it provides guidance on estimating future cash flows to test recoverability. SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. Management adopted SFAS No. 144 effective July 1, 2002, without material effect on the Corporation's financial condition or results of operations. In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 provides financial accounting and reporting guidance for costs associated with exit or disposal activities, including one-time termination benefits, contract termination costs other than for a capital lease, and costs to consolidate facilities or relocate employees. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. SFAS No. 146 is not expected to have a material effect on the Corporation's financial condition or results of operations. In October 2002, the FASB issued SFAS No. 147, "Accounting for Certain Financial Institutions: An Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9," which removes acquisitions of financial institutions from the scope of SFAS No. 72, "Accounting for Certain Acquisitions of Banking and Thrift Institutions," except for transactions between mutual enterprises. Accordingly, the excess of the fair value of liabilities assumed over the fair value of tangible and intangible assets acquired in a business combination should be recognized and accounted for as goodwill in accordance with SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 147 also requires that the acquisition of a less-than-whole financial institution, such as a branch, be accounted for as a business combination if the transferred assets and activities constitute a business. Otherwise, the acquisition should be accounted for as the acquisition of net assets. SFAS No. 147 also amends the scope of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," to include long-term customer relationship assets of financial institutions (including mutual enterprises) such as depositor- and borrower-relationship intangible assets and credit card holder intangible assets. The provisions of SFAS No. 147 related to unidentifiable intangible assets and the acquisition of a less-than-whole financial institution are effective for acquisitions for which the date of acquisition is on or after October 1, 2002. The provisions related to impairment of long-term customer relationship assets are effective October 1, 2002. Transition provisions for previously recognized unidentifiable intangible assets are effective on October 1, 2002, with earlier application permitted. SFAS No. 147 is not expected to have a material effect on the Corporation's financial condition 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, 2002 to September 30, 2002 At September 30, 2002, the Corporation's assets totaled $148.2 million, a decrease of $77,000, or .1%, from total assets at June 30, 2002. Cash and cash equivalents decreased by $3.7 million, or 47.7%, from June 30, 2002 levels, to a total of $4.0 million at September 30, 2002. Investment securities totaled $20.8 million at September 30, 2002, a decrease of $64,000, or .3%, from June 30, 2002 levels. The decrease was due primarily to maturities of $5.0 million, which were substantially offset by purchases of $4.9 million. Purchases of investment securities consisted primarily of fixed-rate medium-term U.S. Government agency obligations. Mortgage-backed securities totaled $9.4 million at September 30, 2002, an increase of $2.4 million, or 33.2%, over the total at June 30, 2002, due primarily to purchases of $6.4 million, which were partially offset by principal repayments of $4.0 million during the period. Loans receivable increased by $1.0 million, or .9%, during the three-month period ended September 30, 2002, to a total of $110.0 million. Loan disbursements amounted to $10.7 million and were substantially offset by principal repayments of $9.7 million. During the three-months ended September 30, 2002, loans originated consisted of $4.7 million of loans secured by one- to four-family residential real estate, $3.9 million of loans secured by nonresidential real estate, $1.1 million of commercial loans and $1.0 million of consumer loans. The allowance for loan losses totaled $855,000 at both September 30, 2002 and June 30, 2002. Nonperforming and nonaccrual loans totaled $1.4 million and $707,000 at September 30, 2002 and June 30, 2002, respectively. The allowance for loan losses represented 60.0% and 120.9% of nonperforming loans as of September 30, 2002 and June 30, 2002, respectively. At September 30, 2002, nonperforming loans consisted of $955,000 in one- to four-family residential real estate loans and $471,000 in nonresidential real estate, consumer and other loans. Management believes such loans are adequately collateralized and does not expect to incur any losses on such loans. Although management believes that its allowance for loan losses at September 30, 2002, 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 $126.1 million at September 30, 2002, a decrease of $814,000, or .6%, from June 30, 2002 levels. The decrease in deposits was primarily attributable to the low interest rate environment. Advances from the Federal Home Loan Bank ("FHLB") totaled $4.2 million at September 30, 2002, a decrease of $9,000, or .2%, compared to June 30, 2002 due to the repayment of advances during the period. Shareholders' equity totaled $15.7 million at September 30, 2002, an increase of $295,000, or 1.9%, over June 30, 2002 levels. The increase resulted primarily from net earnings of $488,000 and a $29,000 increase in unrealized gains on securities designated as available for sale, which were partially offset by dividends on common shares totaling $202,000 and a $20,000 repurchase of treasury shares. American is required to meet minimum capital standards promulgated by the Office of Thrift Supervision ("OTS"). At September 30, 2002, 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, 2002 and 2001 General Net earnings amounted to $488,000 for the three months ended September 30, 2002, an increase of $205,000, or 72.4%, compared to the $283,000 of net earnings reported for the same period in 2001. The increase in earnings resulted primarily from a $376,000 increase in net interest income and a $10,000 increase in other income, which were partially offset by an $87,000 increase in general, administrative and other expense and a $94,000 increase in the provision for federal income taxes. The aforementioned increases in income and expense are partially attributable to the acquisition of Waverly in June 2002. Prior year results were not restated for the acquisition. Net Interest Income Interest income on loans decreased by $35,000, or 1.7%, during the quarter ended September 30, 2002, compared to the 2001 period. This decrease was due primarily to a 53 basis point decrease in the weighted-average yield, to 7.42% for the 2002 quarter, which was partially offset by a $5.5 million, or 5.3%, increase in the average portfolio balance outstanding year to year. Interest income on investment securities, mortgage-backed securities and interest-bearing deposits decreased by $62,000, or 12.3%, due primarily to a 96 basis point decrease in the weighted-average yield, to 5.41% for the 2002 quarter, and a $1.0 million, or 3.3%, decrease in the average balance of the related assets year to year. Interest expense on deposits decreased by $453,000, or 30.0%, for the three months ended September 30, 2002, compared to the same quarter in 2001. This decrease was due primarily to a 167 basis point decrease in the weighted-average cost of deposits, to 3.35% for the quarter ended September 30, 2002, which was partially offset by a $5.9 million, or 4.9%, increase in the average balance of deposits outstanding year to year. Interest expense on borrowings decreased by $20,000, or 48.8%, due primarily to a decrease in the average balance of borrowings outstanding and a 185 basis point decrease in the average cost of borrowings. The decrease in the yields on interest-earning assets and the costs of interest-bearing liabilities was due primarily to the overall decrease in interest rates in the economy during 2001, which continued through the nine month period ended September 30, 2002. As a result of the foregoing changes in interest income and interest expense, net interest income increased by $376,000, or 36.9%, to a total of $1.4 million for the three months ended September 30, 2002. The interest rate spread increased to 3.65% for the three months ended September 30, 2002, from 2.60% for the 2001 period, while the net interest margin increased to 3.92% in the 2002 period, compared to 3.00% in the 2001 period. Provision for Losses on Loans American charges a provision for losses on loans to earnings to bring the total allowance for loan losses to a level considered appropriate by management based on historical experience, the volume and type of lending conducted by American, the status of past due principal and interest payments, general economic conditions, particularly as such conditions relate to American's market area, and other factors related to the collectibility of American's loan portfolio. As a result of such analysis, management determined that the allowance for loan losses was adequate and therefore did not record a provision for losses on loans during the three-month periods ended September 30, 2002 and 2001. There can be no assurance that the loan loss allowance will be adequate to absorb losses on known nonperforming assets or that the allowance will be adequate to cover losses on nonperforming assets in the future. 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, 2002 and 2001 (continued) Other Income Other income amounted to $133,000 for the three months ended September 30, 2002, an increase of $10,000, or 8.1%, compared to the same period in 2001, due primarily to increased fee income on transaction accounts during the quarter, which were partially offset by a $26,000 decrease in the gain on sale of investment securities. General, Administrative and Other Expense General, administrative and other expense totaled $837,000 for the three months ended September 30, 2002, an increase of $87,000, or 11.6%, compared to the same period in 2001. This increase was comprised primarily of increases of $53,000, or 12.8%, in employee compensation and benefits, $38,000, or 40.9%, in data processing and $40,000, or 26.5%, in other operating expense. These increases were partially offset by a $42,000, or 93.3%, decrease in franchise tax expense. The increase in employee compensation and benefits was due primarily to the effect of the Waverly acquisition, an increase in health and other benefit plan costs, as well as normal merit increases year to year. The increase in other operating expense was due primarily to an increase in costs resulting from American's acquisition of Waverly and an increase in professional fees, including regulatory compliance consulting services, during the quarter. The increase in data processing also related to the effects of the acquisition of Waverly as compared to the same quarter in 2001. The decrease in franchise taxes resulted from refund claims filed on prior year tax liabilities. Federal Income Taxes The provision for federal income taxes totaled $203,000 for the three months ended September 30, 2002, an increase of $94,000, or 86.2%, compared to the same period in 2001. This increase resulted primarily from the increase in net earnings before taxes of $299,000, or 76.3%. The effective tax rates were 29.4% and 27.8% for the three-month periods ended September 30, 2002 and 2001, respectively. ITEM 3: Controls and Procedures (a) The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Corporation's disclosure controls and procedures (as defined under Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934, as amended) as of a date within ninety days of the filing date of this quarterly report on Form 10-QSB. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Corporation's disclosure controls and procedures are effective. (b) There were no significant changes in the Corporation's internal controls or in any factors that could significantly affect these controls subsequent to the date of the Chief Executive Officer and the Chief Financial Officer's evaluation. 12 ASB Financial Corp. PART II ITEM 1. Legal Proceedings Not applicable. ITEM 2. Changes in Securities Not applicable. ITEM 3. Defaults Upon Senior Securities Not applicable. ITEM 4. Submission of Matters to a Vote of Security Holders On October 23, 2002, the Corporation held its 2002 Annual Meeting of Shareholders. Two matters were submitted to the shareholders for a vote. The shareholders elected five directors to terms expiring in 2003 by the following votes: For Against Abstain William J. Burke 1,351,252 0 6,987 Lee O. Fitch 1,331,451 0 26,788 Gerald R. Jenkins 1,351,960 0 6,279 Louis M. Schoettle, M.D. 1,351,860 0 6,379 Robert M. Smith 1,344,310 0 13,929 The shareholders also ratified the selection of Grant Thornton LLP as the Corporation's auditors for the 2003 fiscal year by the following vote: For: 1,350,839 Against: 5,392 Abstain: 2,008 ITEM 5. Other Information None. ITEM 6. Exhibits and Reports on Form 8-K Exhibits: EX-99.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 EX-99.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 Reports on Form 8-K: None. 13 ASB Financial Corp. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ASB FINANCIAL CORP. Date: November 12, 2002 By: /s/Robert M. Smith ---------------------- ------------------------------------ Robert M. Smith President and Chief Executive Officer Date: November 12, 2002 By: /s/Michael L. Gampp ---------------------- ------------------------------------- Michael L. Gampp Chief Financial Officer 14 CERTIFICATION I, Robert M. Smith, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of ASB Financial Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 12, 2002 /s/Robert M. Smith --------------------------------------- Robert M. Smith President and Chief Executive Officer 15 CERTIFICATION I, Michael L. Gampp, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of ASB Financial Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 12, 2002 /s/Michael L. Gampp ---------------------------------- Michael L. Gampp Chief Financial Officer 16 EX-99.1 3 asb10qsb_ex99193002.txt CERTIFICATION OF CHIEF EXECUTIVE OFFICER Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of ASB Financial Corp. (the "Company") on Form 10-QSB for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert M. Smith, the President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Robert M. Smith - ------------------------------------ Robert M. Smith President and Chief Executive Officer November 12, 2002 EX-99.2 4 asb10qsb_ex99293002.txt CERTIFICATION OF CHIEF FINANCIAL OFFICER Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of ASB Financial Corp. (the "Company") on Form 10-QSB for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael L. Gampp, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Michael L. Gampp - -------------------------------------------- Michael L. Gampp Chief Financial Officer November 12, 2002 -----END PRIVACY-ENHANCED MESSAGE-----