SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 1, 2003
Oregon Trail Financial Corp.
(Exact name of registrant as specified in its charter)
| Oregon State or other jurisdiction of incorporation | 0-22953 Commission File number | 91-1829481 (I.R.S. Employer Identification No.) |
| 2055 First Street, Baker City, Oregon (Address of principal executive office) | 97814 (Zip Code) | |
Registrant's telephone number, including area code: (541) 523-6327
Not Applicable
(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 News Release of Oregon Trail Financial Corp. dated August 1, 2003
On August 1, 2003, Oregon Trail Financial Corp. issued its earnings release for the quarter ended June 30, 2003. A copy of the earnings release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.
The information being furnished under this "Item 9. Regulation FD Disclosure" is intended to be furnished under "Item 12. Disclosure of Results of Operations and Financial Condition." The information in this report shall not be treated as "filed" for purposes of the Securities Exchange Act of 1934 and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934.
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OREGON TRAIL FINANCIAL CORP.
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OREGON TRAIL FINANCIAL CORP., ANNOUNCES QUARTERLY EARNINGS AND DIVIDEND
BAKER CITY, Ore., August 1, 2003 / Oregon Trail Financial Corp. (Nasdaq:OTFC), the holding company for Pioneer Bank, A Federal Savings Bank, announced earnings of $.40 per diluted share for the quarter ended June 30, 2003, a decrease of $.04 compared to the $.44 earned in the same quarter a year ago. Net income for the quarter ended June 30, 2003 was $1.3 million, a $55,000 decrease from the quarter ended June 30, 2002.
The slight decrease in earnings for the first quarter was generally caused by a reduction in net interest margin as well as a decrease in average interest earning assets. The reduction in net interest margin was caused by a decrease in interest rates while the reduction in interest earnings assets was generally attributable to Pioneerdue to the Bank selling newly originated first mortgage loans. Partially offsetting the reduction in net interest margin was an increase in non-interest income and decreases in the provision for loan losses, non-interest expense, and the provision for income taxes.
For the quarter ended June 30, 2003 interest income was $5.4 million, a $1.1 million, or 17.1%, decrease from the $6.5 million earned in the same period a year ago. The decrease in interest income for the quarter was a result ofdue to a 95 basis point reduction in the average yield on interest earning assets and a $15.6 million decrease in average interest earning assets when comparing the quarter ended June 30, 2003 with the quarter ended June 30, 2002. Interest expense was $2.0 million for the quarter ended June 30, 2003, a $603,000 decrease from the $2.6 million expended in the quarter ended June 30, 2002. The decrease in interest expense was caused by a 55 basis point reduction in the average cost of funds and a $25.7 million decrease in average costing liabilities for the quarter ended June 30, 2003 compared to the quarter ended June 30, 2002.
At June 30, 2003 the Company's allowance for loan losses was 1.02% of net loans, an increase of five basis points compared to .97% of net loans at March 31, 2003. Management believes the allowance for loan losses, at 543% of non-performing loans, is adequate to absorb potential losses in the loan portfolio.
Non-interest income was $1.1 million for the quarter ended June 30, 2003, an increase of $221,000, or 26.0%, from the $850,000 earned for the quarter ended June 30, 2002. The increase in non-interest income was primarily attributablelargely due to a $170,000 gain on sale of a $1 million trust preferred security and a $107,000 increase in gain of sale on loans in the first quarter of fiscal 2004.
Non-interest expense was $2.7 million for the quarter ended June 30, 2003, a $49,000, or 1.8%, decrease from the quarter ended June 30, 2002. The reduction in non-interest expense was primarily a result ofdue to decreases in administration and deposit product expenses partially offset by an increase in total compensation and benefits expense when comparing the first quarters of fiscal 2003 and fiscal 2002.
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Total assets were $370.1 million at June 30, 2003, a decrease of $7.3 million, or 1.9%, compared to total assets of $377.5 million at March 31, 2003. Net loans receivable totaled $213.1 million, a decrease of $15.1 million, or 6.6%, compared to net loans of $228.2 million at March 31, 2003. Pioneer BankThe bank has been gradually reducing its exposure to one-to-four family loans over the past several years to improve earnings quality and better manage interest rate risk. At June 30, 2003 one-to-four family loans represented 37.3% of total loans, down from a three year high of 57.2% of total assets at March 31, 2000. The reduction in assets and loans for the quarter ended June 30, 2003 is a result ofdue to a continuation of this strategy as one-to-four family loans declined by $22.0 million, or 21.5%, during the quarter to $80.2 million, while all other loans increased by $5.4 million, or 4.2%, to $135.0 million at June 30, 2003.
Total Ddeposits were $250.5 million at June 30, 2003, an increase of $1.3 million, or 0.5%, compared to $249.1 million at March 31, 2003. For the three months ended June 30, 2003, transaction and savings deposit accounts increased $3.4 million to $149.7 million while certificates of deposits decreased by $2.0 million to $100.7 million at June 30, 2003.
For the three month period ending June 30, 2003, the Company's book value per share increased 1.4% to $20.63 per share. Shareholders' equity increased 2.1%, or $1.2 million to $61.4 million at the quarter ended June 30, 2003 from $60.1 million in the quarter ended March 31, 2003.
Dividend
The Oregon Trail Financial Corp. Board of Directors is pleased to announce the declaration of $.11 per share dividend. The dividend will be paid on August 30, 2003 to shareholders of record as of August 15, 2003. This is the twenty-third consecutive regular quarterly dividend since the mutual to stock conversion in October 1997.
Oregon Trail Financial Corp. is headquartered in Baker City, Oregon and is the parent company of Pioneer Bank, which was founded in 1901. The Company operates nine full service locations in seven eastern Oregon counties.
Merger
The Oregon Trail Financial Corp., and FirstBank Northwest merger is progressing in accordance with plan and is expected to close in late September or early October 2003.
Forward Looking Information
This press release contains statements about the Company's future results and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of such words as "believe", "may", "expect," "planned", "anticipated" and "potential." We have used forward-looking statements to describe future plans and strategies, including our expectations of the Company's future financial results. These forward-looking statements are based on current expectations and the current economic environment. Management's ability to predict
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results or the effect of future plans or strategies is inherently uncertain. Factors which could cause actual results to differ materially include, but are not limited to, general and local economic conditions, changes in interest rates, deposit flows, demand for mortgages and other loans, real estate values, competition, loan delinquency rates, changes in accounting principles, practices, policies or guidelines, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors effecting operations, pricing, products and services. Accordingly, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements.
CONTACT: Berniel L. Maughan, President and CEO, or Jonathan P. McCreary, Senior Vice President, CFO, Oregon Trail Financial Corp., (541) 523-6327
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| OREGON TRAIL FINANCIAL CORP | |||
| (unaudited) (in thousands except share data) | |||
| First Quarter Ended | |||
| FINANCIAL HIGHLIGHTS | 30-Jun-03 | 30-Jun-02 | |
| (ratios annualized) | |||
| Interest income | $5,400 | $6,515 | |
| Interest expense | 1,950 | 2,553 | |
| Provision for loan losses | 54 | 143 | |
| Net interest income after provision for loan losses | 3,396 | 3,819 | |
| Noninterest income | 1,071 | 850 | |
| Noninterest expense | 2,660 | 2,709 | |
| Provision for income taxes | 535 | 633 | |
| Net income | $1,272 | $1,327 | |
| Basic Earnings Per Share | $0.43 | $0.46 | |
| Diluted Earnings Per Share | $0.40 | $0.44 | |
| Weighted average common shares outstanding | |||
| Basic | 2,965,962 | 2,863,188 | |
| Diluted | 3,174,889 | 3,026,925 | |
| FINANCIAL STATISTICS | |||
| Return on average assets | 1.34% | 1.34% | |
| Return on average equity | 8.40% | 9.88% | |
| Average equity/average assets | 15.96% | 13.59% | |
| Average equity/average loans | 27.72% | 20.59% | |
| Efficiency ratio | |||
| (noninterest expense/revenue) | 58.84% | 56.30% | |
| Noninterest expense/average assets | 2.80% | 2.74% | |
| Net interest margin | 3.92% | 4.31% | |
| Average interest-earning assets/ | |||
| average interest-bearing liabilities | 121.41% | 116.48% | |
| BALANCE SHEET HIGHLIGHTS | 30-Jun-03 | 31-Mar-03 | |
| Total Assets | $370,149 | $377,485 | |
| Loans receivable, net | 213,083 | 228,227 | |
| Mortgage backed securities | 67,326 | 63,616 | |
| Investment securities | 48,507 | 44,319 | |
| Deposits | 250,457 | 249,126 | |
| Advances from Federal Home Loan Bank of Seattle | 54,500 | 64,500 | |
| Total shareholders' equity | $61,355 | $60,107 | |
| Book value per share | $20.63 | $20.34 | |
| Shares outstanding | 2,973,711 | 2,954,938 | |
| Equity/Total Assets | 16.58% | 15.92% | |
| Spread (yield, less cost of funds) | 3.44% | 3.85% | |
| Core Capital to Total Assets | 12.97% | 12.39% | |
| Risk based capital to risk-weighted assets | 21.66% | 20.70% | |
| Number of full-time equivalent employees | 110 | 110 | |
At or For the | At or For the | ||
| LOANS | Quarter Ended | Year Ended | |
| (unaudited) (in thousands except share data) | 30-Jun-03 | 31-Mar-03 | |
| Loan Originations | $39,505 | $121,171 | |
| Loan portfolio analysis: | |||
| Real estate loans: | |||
| Residential | $80,220 | $102,203 | |
| Construction | 368 | 676 | |
| Agricultural | 3,991 | 3,952 | |
| Commercial | 36,040 | 30,874 | |
| Total real estate loans | 120,619 | 137,705 | |
| Other Loans: | |||
| Home equity | 11,262 | 12,313 | |
| Auto | 28,603 | 27,058 | |
| Other Consumer | 12,348 | 12,173 | |
| Commercial | 24,992 | 26,270 | |
| Agricultural | 17,431 | 16,294 | |
| Total Other Loans | 94,636 | 94,108 | |
| Total Gross Loans Receivable | $215,255 | $231,813 | |
| Allowance for loan losses: | |||
| Balance at beginning of period | $2,221 | $2,280 | |
| Provision for loan losses | 54 | 321 | |
| Charge offs (net of recoveries) | (103) | (380) | |
| Balance at end of period | $2,172 | $2,221 | |
| Loan loss allowance/net loans | 1.02% | 0.97% | |
| Loan loss allowance/non-performing loans | 543.00% | 432.94% | |
| Non-performing assets: | |||
| Non-accrual loans | $400 | $513 | |
| Real estate owned | $164 | $217 | |
| Other repossessed assets | $83 | $85 | |
