UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2006
K-Fed Bancorp
(Exact name of registrant as specified in its charter)
Federal | 000-50592 | 20-0411486 |
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
|
|
|
1359 N. Grand Avenue, Covina, CA |
| 91724 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (626) 339-9663
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On April 28, 2006, K-Fed Bancorp issued a press release disclosing its earnings for the three and nine months ended March 31, 2006 and the comparison to June 2005.
A copy of the press release is included as Exhibit 99.1 to this report.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED: None
(B) PRO FORMA FINANCIAL INFORMATION: None
(C) SHELL COMPANY TRANSACTIONS: None
(C) EXHIBITS: |
Exhibit 99.1- Press Release
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, hereunto duly authorized.
K-FED BANCORP
Date: April 28, 2006 | By: /s/ Kay M. Hoveland |
Kay M. Hoveland
| President and Chief Executive Officer |
EXHIBIT 99.1
PRESS RELEASE
K-FED BANCORP | 1.626.339.9663 |
|
1359 N. Grand Avenue | www.K-Fed.com | |
Covina, California 91722-5107
FOR IMMEDIATE RELEASE
For Additional Information Contact:
Kay Hoveland (626) 339-9663
k.hoveland@kaiserfederal.net
K-FED BANCORP ANNOUNCES THIRD QUARTER 2006 EARNINGS
Covina, California –April 28, 2006 - K-Fed Bancorp (NASDAQ: KFED), the holding company for Kaiser Federal Bank announced net income for the three months ended March 31, 2006 was $1.4 million, or $0.10 per diluted common share, an increase of $128,000, or 10.4%, compared to net income of $1.2 million, or $0.09 per diluted common share for the three months ended March 31, 2005. Net income for the nine months ended March 31, 2006 was $3.7 million, or $0.27 per diluted common share compared to net income of $3.6 million, or $0.26 per diluted common share for the nine months ended March 31, 2005.
“While total assets reached $766.9 million at March 31, 2006, our earnings growth continues to be negatively impacted by further compression in our net interest margin as a result of a flat yield curve,” commented Kay Hoveland, President and CEO. “We are focusing on the expansion of new financial service centers and the deployment of additional ATMs to enhance our core deposit base. New financial service centers are now open in Bellflower and Harbor City with additional financial service centers located in Los Angeles and Riverside under construction. The expansion and growth of our core deposit base will enable us to better manage our net interest margin while generating additional deposit fee income for the Bank.”
Interest income increased by $2.4 million or 33.1%, to $9.5 million for the three months ended March 31, 2006 from $7.1 million for the three months ended March 31, 2005. The primary factor for the increase in interest income was an increase in the average loans receivable balance of $132.4 million, or 25.9%, from $511.4 million for the three months ended March 31, 2005 to $643.8 million for the three months ended March 31, 2006. This increase was primarily due to whole loan purchases of one-to-four family residential real estate loans. Interest income was also positively impacted by a 42 basis point increase in the average yield on loans receivable, from 5.03% for the three months ended March 31, 2005 to 5.45% for the three months ended March 31, 2006, resulting from the impact of adding higher-yielding loans to our portfolio, commensurate with increases in general market rates.
Interest expense increased $2.1 million, or 76.1%, for the three months ended March 31, 2006 to $4.8 million as compared to $2.7 million for the three months ended March 31, 2005. The increase is primarily attributable to an increase in average deposits and FHLB advances, combined with higher interest rates. The average interest rates on interest-bearing liabilities increased 87 basis points to 3.16% for the three months ended March 31, 2006 from 2.29% for the three months ended March 31, 2005. Average interest-bearing liabilities increased $130.9 million or 27.6% to $604.7 million for the three months ended March 31, 2006 from $473.8 million for the three months ended March 31, 2005.
Noninterest income increased $91,000, or 11.6%, to $873,000 for the three months ended March 31, 2006 from $782,000 for the three months ended March 31, 2005. The increase is primarily the result of income totaling $107,000 from bank-owned life insurance purchased in April 2005.
Noninterest expense increased $277,000, or 9.0% to $3.4 million for the three months ended March 31, 2006 from $3.1 million for the three months ended March 31, 2005. The increase was primarily due to a $102,000 increase in salaries and benefits, a $33,000 increase in professional services, a $58,000 increase in occupancy and equipment expense, and a $35,000 increase in other operating expense.
Salaries and benefits represented 54.9% of total noninterest expense for the three months ended March 31, 2006 compared to 56.5% for the three months ended March 31, 2005. Total salaries and benefits increased $102,000, or 5.8%, to $1.9 million for the three months ended March 31, 2006 from $1.7 million for the three months ended March 31, 2005. The increase was primarily due to the addition of $92,000 in stock option expense related to the the adoption of FAS-123R partially offset by a reduction in fair market value costs related to our employee stock ownership plan.
Professional services increased $33,000, or 22.4% to $180,000 for the three months ended March 31, 2006 from $147,000 for the three months ended March 31, 2005. The increase in professional services was primarily due to increased audit fees and increased costs related to loan quality reviews.
Occupancy and equipment expense increased $58,000, or 14.9% to $448,000 for the three months ended March 31, 2006 from $390,000 for the three months ended March 31, 2005. The increase was primarily due to costs associated with the current relocation of our Pasadena Branch and non-capitalizable costs related to build-outs of financial service centers in Bellflower and Harbor City in addition to increased equipment maintenance expense.
Other operating expense increased $35,000, or 11.0% to $353,000 for the three months ended March 31, 2006 from $318,000 for the three months ended March 31, 2005. The increase in other expense was primarily due to increased operational costs to support continued growth of the Bank.
Total assets increased by $127.0 million, or 19.9%, to $766.9 million at March 31, 2006 from $639.9 million at June 30, 2005. The increase primarily reflects growth in our net loan portfolio of $107.8 million to $645.4 million from $537.6 million. To fund the increase in assets, advances from the Federal Home Loan Bank increased $109.1 million to $179.9 million at March 31, 2006 from $70.8 million at June 30, 2005.
Equity increased $2.8 million to $93.6 million at March 31, 2006 from $90.8 million at June 30, 2005 primarily as a result of $3.7 million in income earned for the nine months ended March 31, 2006 in addition to the allocation of ESOP shares, stock awards, and stock options earned during the same period totaling $1.0 million. This increase was partially offset by the repurchase of 65,000 of our outstanding common shares at an average price of $12.44 and a total cost of $812,000 and the payment of $998,000 in cash dividends to shareholders of record, excluding shares held by K-Fed Mutual Holding Company, or $0.20 per share for the nine months ended March 31, 2006. Shares remaining under the Company’s stock repurchase program totaled 165,129 as of April 28, 2006.
K-Fed Bancorp’s sole subsidiary is Kaiser Federal Bank which was originally chartered in 1953 as a federal credit union, converted to a federally chartered mutual savings association in 1999 and reorganized into a federally chartered mutual holding company form of organization in 2003. The bank operates 3 full service offices and 4 financial service centers in southern and northern California, as well as a network of 35 ATMS which provide retail and commercial banking services to individuals and business customers throughout California.
For additional information visit WWW.K-FED.COM or WWW.KAISERFEDERAL.COM
FORWARD-LOOKING STATEMENTS:
STATEMENTS CONTAINED IN THIS NEWS RELEASE THAT ARE NOT HISTORICAL FACTS MAY CONSTITUTE FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED), WHICH INVOLVE SIGNIFICANT RISKS AND UNCERTAINTIES. THE COMPANY INTENDS SUCH FORWARD-LOOKING STATEMENTS TO BE COVERED BY THE SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS CONTAINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, AND IS INCLUDING THIS STATEMENT FOR PURPOSES OF INVOKING THESE SAFE HARBOR PROVISIONS. THE COMPANY’S ABILITY TO PREDICT RESULTS OR THE ACTUAL EFFECT OF FUTURE PLANS OR STRATEGIES IS INHERENTLY UNCERTAIN. FACTORS WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON THE OPERATIONS AND FUTURE PROSPECTS OF THE COMPANY AND KAISER FEDERAL BANK INCLUDE, BUT ARE NOT LIMITED TO, CHANGES IN INTEREST RATES, GENERAL ECONOMIC CONDITIONS, LEGISLATIVE/REGULATORY CHANGES, MONETARY AND FISCAL POLICIES OF THE U.S. GOVERNMENT, INCLUDING THE U.S. TREASURY AND THE FEDERAL RESERVE BOARD, THE QUALITY OR COMPOSITION OF THE COMPANY’S LOAN OR INVESTMENT PORTFOLIOS, DEMAND FOR LOAN PRODUCTS, DEPOSIT FLOWS, COMPETITION, DEMAND FOR FINANCIAL SERVICES IN THE COMPANY’S MARKET AREA, THE POSSIBLE SHORT-TERM DILUTIVE EFFECT OF POTENTIAL ACQUISITIONS AND ACCOUNTING PRINCIPLES, POLICIES AND GUIDELINES. THESE RISKS AND UNCERTAINTIES SHOULD BE CONSIDERED IN EVALUATING FORWARD LOOKING STATEMENTS AND UNDUE RELIANCE SHOULD NOT BE PLACED ON SUCH STATEMENTS.
K-FED BANCORP AND SUBSIDIARY
Consolidated Statements of Financial Condition
(Unaudited)
(Dollars in thousands, except share data)
|
| March 31 |
| June 30 |
| ||
ASSETS |
|
|
|
|
| ||
Cash and due from banks |
| $ | 8,388 |
| $ | 6,990 |
|
Federal funds sold |
|
| 26,095 |
|
| 10,325 |
|
Total cash and cash equivalents |
|
| 34,483 |
|
| 17,315 |
|
Interest bearing deposits in other financial institutions |
|
| 9,010 |
|
| 9,010 |
|
Securities available-for-sale |
|
| 17,166 |
|
| 18,848 |
|
Securities held-to-maturity, fair value of $25,351 and |
|
| 25,949 |
|
| 30,834 |
|
Federal Home Loan Bank stock, at cost |
|
| 8,640 |
|
| 4,027 |
|
Loans receivable |
|
| 647,704 |
|
| 539,025 |
|
Deferred net loan origination fees |
|
| (89 | ) |
| (32 | ) |
Net premium on purchased loans |
|
| 312 |
|
| 982 |
|
Allowance for loan losses |
|
| (2,544 | ) |
| (2,408 | ) |
Loans receivable, net |
|
| 645,383 |
|
| 537,567 |
|
Accrued interest receivable |
|
| 2,999 |
|
| 2,310 |
|
Premises and equipment, net |
|
| 2,862 |
|
| 1,491 |
|
Core deposit intangible |
|
| 469 |
|
| 568 |
|
Goodwill |
|
| 3,950 |
|
| 3,950 |
|
Bank-owned life insurance |
|
| 10,410 |
|
| 10,089 |
|
Other assets |
|
| 5,586 |
|
| 3,873 |
|
Total assets |
| $ | 766,907 |
| $ | 639,882 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
Noninterest bearing |
| $ | 58,067 |
| $ | 43,744 |
|
Interest bearing |
|
| 431,990 |
|
| 432,048 |
|
Total deposits |
|
| 490,057 |
|
| 475,792 |
|
Federal Home Loan Bank advances, short-term |
|
| 10,000 |
|
| 11,000 |
|
Federal Home Loan Bank advances, long-term |
|
| 169,910 |
|
| 59,777 |
|
Accrued expenses and other liabilities |
|
| 3,294 |
|
| 2,553 |
|
Total liabilities |
|
| 673,261 |
|
| 549,122 |
|
Commitments and contingent liabilities |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
Nonredeemable serial preferred stock, $.01 par value; |
|
| — |
|
| — |
|
Common stock, $0.01 par value; 18,000,000 authorized; |
|
| 147 |
|
| 147 |
|
Additional paid-in capital |
|
| 57,818 |
|
| 57,541 |
|
Retained earnings |
|
| 45,422 |
|
| 42,689 |
|
Accumulated other comprehensive loss, net of tax |
|
| (242 | ) |
| (168 | ) |
Unearned employee stock ownership plan shares |
|
| (3,639 | ) |
| (3,981 | ) |
Unearned employee stock awards |
|
| (1,595 | ) |
| (2,015 | ) |
Treasury stock, at cost (March 31, 2006 — 343,470 shares; |
|
| (4,265 | ) |
| (3,453 | ) |
Total stockholders’ equity |
|
| 93,646 |
|
| 90,760 |
|
Total liabilities and stockholders’ equity |
| $ | 766,907 |
| $ | 639,882 |
|
| |||||||
K-FED BANCORP AND SUBSIDIARY
Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(Dollars in thousands, except per share data)
|
| Three Months Ended March 31 |
| Nine Months Ended March 31 |
| ||||||||
|
| 2006 |
| 2005 |
| 2006 |
| 2005 |
| ||||
Interest Income |
|
|
|
|
|
|
|
|
| ||||
Interest and fees on loans |
| $ | 8,776 |
| $ | 6,431 |
| $ | 24,072 |
| $ | 18,861 |
|
Interest on securities, taxable |
|
| 410 |
|
| 476 |
|
| 1,237 |
|
| 1,481 |
|
Federal Home Loan Bank dividends |
|
| 86 |
|
| 38 |
|
| 174 |
|
| 113 |
|
Other interest |
|
| 202 |
|
| 171 |
|
| 690 |
|
| 400 |
|
Total interest income |
|
| 9,474 |
|
| 7,116 |
|
| 26,173 |
|
| 20,855 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on Federal Home Loan Bank advances |
|
| 1,904 |
|
| 464 |
|
| 4,219 |
|
| 1,438 |
|
Interest on deposits |
|
| 2,868 |
|
| 2,246 |
|
| 8,298 |
|
| 6,301 |
|
Total interest expense |
|
| 4,772 |
|
| 2,710 |
|
| 12,517 |
|
| 7,739 |
|
Net interest income |
|
| 4,702 |
|
| 4,406 |
|
| 13,656 |
|
| 13,116 |
|
Provision for loan losses |
|
| 128 |
|
| 123 |
|
| 488 |
|
| 275 |
|
Net interest income after provision |
|
| 4,574 |
|
| 4,283 |
|
| 13,168 |
|
| 12,841 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees |
|
| 428 |
|
| 444 |
|
| 1,382 |
|
| 1,385 |
|
ATM fees and charges |
|
| 371 |
|
| 338 |
|
| 1,108 |
|
| 988 |
|
Referral commissions |
|
| 53 |
|
| 49 |
|
| 168 |
|
| 157 |
|
Loss on equity investment |
|
| (101 | ) |
| (71 | ) |
| (443 | ) |
| (434 | ) |
Bank-owned life insurance |
|
| 107 |
|
| — |
|
| 321 |
|
| — |
|
Other noninterest income |
|
| 15 |
|
| 22 |
|
| 32 |
|
| 50 |
|
Total noninterest income |
|
| 873 |
|
| 782 |
|
| 2,568 |
|
| 2,146 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
| 1,850 |
|
| 1,748 |
|
| 5,436 |
|
| 5,036 |
|
Occupancy and equipment |
|
| 448 |
|
| 390 |
|
| 1,263 |
|
| 1,072 |
|
ATM expense |
|
| 282 |
|
| 260 |
|
| 862 |
|
| 774 |
|
Advertising and promotional |
|
| 93 |
|
| 83 |
|
| 296 |
|
| 295 |
|
Professional services |
|
| 180 |
|
| 147 |
|
| 560 |
|
| 611 |
|
Postage |
|
| 77 |
|
| 72 |
|
| 219 |
|
| 198 |
|
Telephone |
|
| 86 |
|
| 74 |
|
| 262 |
|
| 227 |
|
Other operating expense |
|
| 353 |
|
| 318 |
|
| 1,029 |
|
| 902 |
|
Total noninterest expense |
|
| 3,369 |
|
| 3,092 |
|
| 9,927 |
|
| 9,115 |
|
Income before income tax expense |
|
| 2,078 |
|
| 1,973 |
|
| 5,809 |
|
| 5,872 |
|
Income tax expense |
|
| 723 |
|
| 746 |
|
| 2,078 |
|
| 2,226 |
|
Net income |
| $ | 1,355 |
| $ | 1,227 |
| $ | 3,731 |
| $ | 3,646 |
|
Comprehensive Income |
| $ | 1,356 |
| $ | 1,112 |
| $ | 3,657 |
| $ | 3,603 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 0.10 |
| $ | 0.09 |
| $ | 0.27 |
| $ | 0.26 |
|
Diluted |
| $ | 0.10 |
| $ | 0.09 |
| $ | 0.27 |
| $ | 0.26 |
|
