FORM 10-QSB/A
AMENDMENT NO. 1 **
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
MARK ONE
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________to ____________.
Commission File Number: 0-24194
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HARBOR FEDERAL BANCORP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 52-1860591
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
705 York Road, Baltimore, Maryland 21204-2562
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(410)321-7041
------------
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 ninety days. Yes X No
--- ---
As of December 31, 1999, 1,664,515 shares of the
registrant's Common Stock, par value $0.01 per share, were
issued and outstanding.
Transitional small business disclosure format (check one):
YES NO X
--- ---
** This Amendment corrects the dollar amount of mortgage-
backed securities for December 31, 1999 in the Consolidated
Statements of Financial Condition.
PART I. FINANCIAL INFORMATION.
------------------------------
Item 1. Financial Statements
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HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Financial Condition
December 31, March 31,
Assets 1999 1999
------ ------------ --------
(Unaudited)
Cash:
On hand and due from banks $ 1,431,107 1,501,358
Interest-bearing deposits 251,372 114,259
Federal funds sold 2,773,496 2,545,437
Investment securities, fair value of $58,749,262
and $59,963,291, respectively 58,749,262 59,963,291
Mortgage-backed securities, fair value of
$11,072,536 and $14,280,938, respectively 11,018,258 14,172,392
Loans receivable, net 171,718,044 153,918,968
Investment in real estate, net -- 446,899
Investment in Federal Home Loan Bank stock, at cost 1,725,000 1,433,500
Investment in and advances to affiliated corporation -- 2,525,000
Property and equipment, net 1,699,619 1,760,516
Prepaid expenses and other assets 3,269,985 916,015
------------ ------------
Total assets $252,636,143 239,297,635
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Savings accounts $179,592,015 181,485,848
Borrowed funds 45,660,000 27,555,000
Advance payments by borrowers for taxes,
insurance and ground rents 1,253,951 1,841,672
Accrued expenses and other liabilities 1,376,098 1,612,963
------------ ------------
Total liabilities 227,882,064 212,495,483
------------ ------------
Stockholders' Equity:
Preferred stock $0.01 par value; authorized
5,000,000 shares; none issued -- --
Common stock $0.01 par value; authorized
20,000,000 shares; 1,664,515 and 1,676,515 shares
issued and outstanding 16,645 16,765
Additional paid-in capital 13,197,139 13,071,570
Unearned ESOP shares (407,118) (662,056)
Retained income, substantially restricted 15,248,063 14,422,503
Accumulated other comprehensive income (3,300,650) (46,630)
------------ ------------
Total stockholders' equity 24,754,079 26,802,152
------------ ------------
Total liabilities and stockholders' equity $252,636,143 239,297,635
============ ============
See accompanying notes to consolidated financial statements.
3
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Income and Comprehensive Income (Loss)
(Unaudited)
Nine Months Ended Three Months Ended
December 31, December 31,
------------------ ------------------
1999 1998 1999 1998
------ ------ ------ ------
Interest income:
Loans receivable $ 9,376,046 8,956,611 3,227,025 3,042,025
Mortgage-backed securities 589,741 970,593 193,111 291,397
Investment securities 3,584,818 2,725,768 1,271,001 866,712
Interest-earning deposits and other short-term
investments 87,961 243,689 34,866 80,617
----------- ----------- ---------- ---------
Total interest income 13,638,566 12,896,661 4,726,003 4,280,751
----------- ----------- ---------- ---------
Interest expense:
Savings accounts:
Certificates 5,276,454 5,396,096 1,750,173 1,776,509
NOW and money market deposit accounts 694,447 698,456 224,630 232,328
Passbook and statement savings 742,783 731,157 246,223 241,798
----------- ----------- ---------- ---------
6,713,684 6,825,709 2,221,026 2,250,635
Borrowed funds:
Federal Home Loan Bank advances 722,347 385,764 459,843 129,056
Securities sold under agreements to repurchase 721,497 590,610 231,025 192,873
----------- ----------- ---------- ---------
1,443,844 976,374 690,868 321,929
Total interest expense 8,157,528 7,802,083 2,911,894 2,572,564
----------- ----------- ---------- ---------
Net interest income 5,481,038 5,094,578 1,814,109 1,708,187
Provision for losses on loans 40,000 60,000 25,000 20,000
----------- ----------- ---------- ---------
Net interest income after provision for
losses on loans 5,441,038 5,034,578 1,789,109 1,688,187
----------- ----------- ---------- ---------
Noninterest income:
Loan fees and service charges 187,403 350,570 42,247 118,040
Other 170,548 139,840 47,385 52,522
----------- ----------- ---------- ---------
Total noninterest income 357,951 490,410 89,632 170,562
----------- ----------- ---------- ---------
Noninterest expense:
Compensation and benefits 2,044,209 2,111,884 647,142 760,916
Occupancy and equipment 284,461 293,842 93,465 87,824
SAIF deposit insurance premiums 64,281 67,209 22,092 21,846
Advertising 134,961 105,694 44,897 32,498
Other 745,689 588,124 244,242 219,896
----------- ----------- ---------- ---------
Total noninterest expense 3,273,601 3,166,753 1,051,838 1,122,980
----------- ----------- ---------- ---------
Income before income taxes 2,525,388 2,358,235 826,903 735,769
Income taxes 1,048,457 961,050 346,257 312,900
----------- ----------- ---------- ---------
Net income 1,476,931 1,397,185 480,646 422,869
Other comprehensive income (loss), net of tax:
Unrealized holding gain (loss) on securities
available for sale (3,254,020) 169,156 (1,305,339) (163,420)
----------- ----------- ---------- ---------
Comprehensive income (loss) $(1,777,089) $ 1,566,341 (824,693) 259,449
=========== =========== ========== =========
Net income per share of common stock:
Basic $ .91 .80 .30 .25
=========== =========== ========== =========
Diluted $ .89 .77 .29 .24
=========== =========== ========== =========
See accompanying notes to consolidated financial statements.
4
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
December 31,
-----------------------
1999 1998
---- ----
Cash flows from operating activities:
Net income $1,476,931 1,397,185
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 60,897 71,273
Provision for losses on loans 40,000 60,000
Amortization of premium on savings deposits 286,038 286,038
Noncash compensation under stock-based
benefit plans 357,487 504,689
Loans originated for sale, net of repayments 505,187 (988,897)
Sale of loans originated for sale -- 1,016,685
Amortization of loan fees, premiums and
discounts, net (40,722) (109,442)
Increase in prepaid expenses and other assets (306,720) (51,732)
Decrease in accrued expenses and other
liabilities (187,022) (87,307)
Decrease in federal and state income
taxes payable -- (355,981)
Increase in accrued interest receivable (604,783) (160,791)
Increase (decrease) in accrued interest
payable 61,157 (85,866)
Loss on sale of investments in real estate 14,600 --
------------ -----------
Net cash provided by operating
activities 1,663,050 1,495,854
------------ -----------
Cash flows from investing activities:
Maturities of investment securities available for sale -- 24,000,000
Maturities of investment securities held to maturity 1,000,000 13,000,000
Purchase of investment securities available for sale (4,184,845) (30,063,388)
Principal repayments of mortgage-backed securities
held to maturity 529,822 1,799,761
Principal repayments of mortgage-backed securities
available for sale 2,227,599 3,631,974
Proceeds from sale of investments in real estate 532,417 76,386
Loan principal disbursements, net of repayments (15,473,775) (6,899,435)
Loan purchases (2,830,783) (341,300)
Purchase of Federal Home Loan Bank stock, net (291,500) --
Purchases of property and equipment -- (19,426)
Decrease in investment in and advances to
affiliated corporation, net 2,525,000 325,000
------------ -----------
Net cash provided by (used in)
investing activities (15,966,066) 5,509,572
------------ -----------
(Continued)
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HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
December 31,
-----------------------
1999 1998
---- ----
Cash flows from financing activities:
Net increase (decrease) in savings deposits (2,179,871) 4,016,153
Net increase (decrease) in borrowed funds 18,105,000 (6,456,250)
Decrease in advance payments by borrowers
for taxes, insurance and ground rents (587,721) (687,591)
Purchases of common stock (173,188) (1,225,699)
Purchases of common stock for Stock Option Trust (111,920) (642,325)
Dividends paid (651,371) (695,888)
Exercise of stock options by Stock Option Trust 197,008 81,813
----------- -----------
Net cash provided by (used in)
financing activities 14,455,937 (5,609,787)
----------- -----------
Net increase in cash and cash equivalents 294,921 1,395,639
Cash and cash equivalents at beginning of period 4,161,054 3,239,405
----------- -----------
Cash and cash equivalents at end of period $ 4,455,975 4,635,044
=========== ===========
Supplemental information noncash investing
activities:
Unrealized holding gain (loss) on
securities available for sale, net of
income tax effect $(3,254,020) 169,156
=========== ===========
Transfer of loans receivable to investments in
real estate $ 100,117 --
=========== ===========
See accompanying notes to consolidated financial statements.
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HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 -- Business. The accompanying unaudited consolidated
--------
financial statements include the accounts of Harbor Federal
Bancorp, Inc. (the "Company") and wholly-owned subsidiaries,
including Harbor Federal Savings Bank ("Harbor Federal").
Harbor Federal provides a full range of banking services to
individual and corporate customers through its subsidiaries and
branch offices in Maryland. Harbor Federal is subject to
competition from other financial institutions. Harbor Federal
is subject to the regulations of certain federal agencies and
undergoes periodic examinations by those agencies.
Note 2 -- 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.
However, all adjustments (consisting of normal, recurring
adjustments) which in the opinion of management, are necessary
for a fair presentation of the consolidated financial statements
at and for the nine and three months ended December 31, 1999
have been recorded.
In preparing the financial statements, management is required to
make estimates and assumptions that affect the reported amounts
of assets and liabilities as of the date of the statement of
financial condition and revenues and expenses for the period.
Actual results could differ significantly from those estimates.
The results of operations for the nine and three months ended
December 31, 1999 are not necessarily indicative of the results
that may be expected for the entire year ending March 31, 2000.
Note 3 -- Principles of Consolidation. The accompanying
---------------------------
unaudited consolidated financial statements include the accounts
of the Company and Harbor Federal, and its wholly owned
subsidiaries, Harbor Service Corporation and Bank Street
Mortgage Company. All significant intercompany items have been
eliminated.
Note 4 -- Retained Income. Harbor Federal is required to
---------------
maintain certain levels of regulatory capital. At December 31,
1999, Harbor Federal was in compliance with all regulatory
capital requirements.
Note 5 -- Earnings per Common Share. Information related to the
-------------------------
calculation of net income per share of common stock is
summarized as follows for the nine and three months ended
December 31, 1999 and December 31, 1998:
Nine Months Ended
-----------------
December 31, 1999 December 31, 1998
-------------------- ---------------------
Basic Diluted Basic Diluted
--------- --------- --------- ---------
Net income $1,476,931 1,476,931 1,397,185 1,397,185
Dividend on unvested common stock
awards (6,135) (4,773) (11,892) (8,034)
---------- --------- --------- ---------
Adjusted net income used in EPS
calculations $1,470,796 1,472,140 1,385,293 1,389,151
========== ========= ========= =========
Weighted average shares outstanding 1,612,044 1,612,044 1,739,784 1,739,784
Dilutive securities:
Options --- 33,659 --- 56,679
Unvested common stock awards --- 3,444 --- 10,205
---------- --------- --------- ---------
Adjusted weighted-average shares
used in EPS computation 1,612,044 1,649,147 1,739,784 1,806,668
========== ========= ========= =========
7
HARBOR FEDERAL BANCORP, INC.
AND SUBSIDIARY
Three Months Ended
------------------
December 31, 1999 December 31, 1998
-------------------- ---------------------
Basic Diluted Basic Diluted
--------- --------- --------- ---------
Net income $ 480,646 480,646 422,869 422,869
Dividend on unvested common stock
awards (2,045) (1,644) (4,090) (2,764)
---------- --------- --------- ---------
Adjusted net income used in EPS
calculations $ 478,061 478,990 418,779 420,105
========== ========= ========= =========
Weighted average shares outstanding 1,605,305 1,605,305 1,702,539 1,702,539
Dilutive securities:
Options -- 29,254 -- 56,640
Unvested common stock awards -- 2,994 -- 10,198
---------- --------- --------- ---------
Adjusted weighted-average shares used
in EPS computation 1,605,305 1,637,553 1,702,539 1,769,377
========== ========= ========= =========
Note 6 Investment Securities. Investment securities available
---------------------
for sale included in investment securities have a carrying value
and fair market value of $57,603,287 at December 31, 1999 and
$59,458,780 at March 31, 1999 and related accrued interest of
$1,145,975 at December 31, 1999 and $504,511 at March 31, 1999.
Note 7 Mortgage-Backed Securities. Mortgage-backed securities
--------------------------
available for sale included in mortgage-backed securities have a
carrying value and fair market value of $9,243,688 at December
31, 1999 and $11,846,898 at March 31, 1999 and related accrued
interest of $67,891 at December 31, 1999 and $84,484 at March 31,
1999.
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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.
HARBOR FEDERAL BANCORP, INC.
Date: February 8, 2000 /s/ Robert A. Williams
_____________________________
Robert A. Williams
President
(Duly Authorized Representative)
9