SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-QSB
(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, 2000
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 01-13465
Falmouth Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3337685
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 Davis Straits, Falmouth, MA 02540
(Address of principal executive offices)
(Zip Code)
(508) 548-3500
(Registrant's telephone number including area code)
NA
(Former name, former address and former fiscal year,
if changed from last Report)
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 twelve months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirement for the past 90 days.
Yes X No____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date
Outstanding at
Class December 31, 2000
----- -----------------
Common Stock, Par Value $.01 1,023,838
Transitional small business disclosure format:
Yes No X
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION Page
Item 1 Financial Statements
Consolidated Balance Sheets
December 31, 2000 and September 30, 2000 1
Consolidated Statements of Income
For Three Months Ended December 31, 2000 and 1999 2
Consolidated Statements of Changes in Stockholders' Equity
For Three Months Ended December 31, 2000 and 1999 3
Consolidated Statements of Cash Flows
For Three Months Ended December 31, 2000 and 1999 4
Notes to Unaudited Consolidated Financial Statements 5-6
Item 2 Management's Discussion and Analysis of Financial Condition
and Operating Results 7-10
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
============================================================================
FORWARD LOOKING STATEMENTS
This report contains certain forward looking statements consisting of
estimates with respect to the financial condition, results of operations and
business of the Company and the Bank that are subject to various factors
which could cause actual results to differ materially from these estimates.
These factors include: changes in general, economic and market conditions,
or the development of an adverse interest rate environment that adversely
affects the interest rate spread or other income anticipated from the Bank's
operations and investments. We undertake no obligation to publicly update
forward-looking statements, whether as a result of new information, future
events or otherwise.
============================================================================
Part I. Item I. FALMOUTH BANCORP, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
December 31, 2000 and September 30, 2000
----------------------------------------
December 31, September 30,
2000 2000
------------ -------------
(Unaudited) (Unaudited)
ASSETS
- ------
Cash and due from banks $ 3,220,983 $ 3,450,297
Federal funds sold 3,934,696 3,380,176
-----------------------------
Total cash and cash equivalents 7,155,679 6,830,473
Investments in available-for-sale securities
(at fair value) 8,078,724 7,807,742
Investments in held-to-maturity securities
(fair values of $8,399,071 as of December
31, 2000 and $10,781,002 as of September 30,
2000) 8,371,002 10,776,000
Federal Home Loan Bank stock, at cost 720,700 720,700
Loans, net 107,171,746 105,731,509
Premises and equipment 1,974,544 1,991,077
Accrued interest receivable 752,359 750,690
Cooperative Central Bank Reserve Fund Deposit 395,395 395,395
Other assets 564,172 460,301
-----------------------------
Total assets $135,184,321 $135,463,887
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Deposits:
Noninterest-bearing $ 13,377,140 $ 14,243,255
Interest-bearing 96,104,168 98,130,985
-----------------------------
Total deposits 109,481,308 112,374,240
Securities sold under agreements to repurchase 531,274 863,943
Advances from Federal Home Loan Bank of Boston 6,774,302 3,851,961
Other liabilities 348,931 327,680
-----------------------------
Total liabilities 117,135,815 117,417,824
-----------------------------
Minority preferred stockholders' equity in a
subsidiary company of Falmouth Cooperative Bank 54,000 54,000
-----------------------------
Stockholders' equity:
Preferred stock, par value $.01 per share,
authorized 500,000 shares; none issued
Common stock, par value $.01 per share,
authorized 2,500,000 shares; issued
1,454,750 shares 14,547 14,547
Paid-in capital 13,935,289 13,901,452
Retained earnings 11,920,638 11,669,877
Unallocated Employee Stock Ownership Plan shares (455,622) (477,668)
Treasury stock (430,912 shares as of December 31, 2000;
418,912 shares as of September 30, 2000) (7,021,473) (6,850,722)
Unearned compensation (291,097) (291,097)
Accumulated other comprehensive income (loss) (107,776) 25,674
-----------------------------
Total stockholders' equity 17,994,506 17,992,063
-----------------------------
Total liabilities and stockholders' equity $135,184,321 $135,463,887
=============================
The accompanying notes are an integral part of these
consolidated financial statements.
FALMOUTH BANCORP, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
Three Months Ended December 31, 2000 and 1999
---------------------------------------------
2000 1999
---- ----
(Unaudited) (Unaudited)
Interest and dividend income:
Interest and fees on loans $2,059,439 $1,532,873
Interest and dividends on securities:
Taxable 245,674 282,995
Dividends on marketable equity securities 30,745 24,445
Dividends on Cooperative Bank Investment
and Liquidity Funds 7,745 12,347
Other interest 52,558 64,426
-------------------------
Total interest and dividend income 2,396,161 1,917,086
-------------------------
Interest expense:
Interest on deposits 1,061,582 764,967
Interest on securities sold under agreement
to repurchase 13,172 11,146
Interest on Federal Home Loan Bank advances 51,384 85,654
-------------------------
Total interest expense 1,126,138 861,767
-------------------------
Net interest and dividend income 1,270,023 1,055,319
Provision for loan losses 85,000 12,000
-------------------------
Net interest income after provision
for loan losses 1,185,023 1,043,319
-------------------------
Other income:
Service charges on deposit accounts 37,895 36,838
Securities gains, net 75,724 95,143
Gains on mortgages sold, net 17,862 1,711
Other income 76,043 66,431
-------------------------
Total other income 207,524 200,123
-------------------------
Other expense:
Salaries and employee benefits 437,262 405,607
Occupancy expense 47,042 48,278
Equipment expense 44,132 39,116
Data processing expense 71,505 58,287
Directors' fees 14,900 13,250
Legal and professional fees 70,602 65,473
Other expenses 175,356 145,093
-------------------------
Total other expenses 860,799 775,104
-------------------------
Income before income taxes 531,748 468,338
Income taxes 188,563 191,882
-------------------------
Net income $ 343,185 $ 276,456
=========================
Comprehensive income $ 209,735 $ 269,597
=========================
Earnings per common share $ 0.35 $ 0.26
=========================
Earnings per common share, assuming dilution $ 0.35 $ 0.24
=========================
The accompanying notes are an integral part of these
consolidated financial statements.
FALMOUTH BANCORP, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
Three Months Ended December 31, 2000
------------------------------------
(Unaudited)
Unallocated
Employee
Stock Accumulated
Ownership Other
Common Paid-In Retained Plan Treasury Unearned Comprehensive
Stock Capital Earnings Shares Stock Compensation Income(Loss) Total
------ ------- -------- ----------- -------- ------------ ------------- -----
Balance, September 30, 2000 $14,547 $13,901,452 $11,669,877 $(477,668) $(6,850,722) $(291,097) $ 25,674 $17,992,063
Employee Stock Ownership Plan 8,236 8,236
ESOP shares released 22,046 22,046
Recognition and retention plan 27,357 27,357
Purchase of treasury stock (180,532) (180,532)
Exercise of stock options and
related tax benefit (1,756) 9,781 8,025
Dividends declared ($.09 per
share) (92,424) (92,424)
Comprehensive income:
Net income 343,185
Net change in unrealized
holding gain on available-
for-sale securities (133,450)
Comprehensive income 209,735
----------------------------------------------------------------------------------------------------
Balance, December 31, 2000 $14,547 $13,935,289 $11,920,638 $(455,622) $(7,021,473) $(291,097) $(107,776) $17,994,506
===================================================================================================
Three Months Ended December 31, 1999
------------------------------------
(Unaudited)
Balance, September 30, 1999 $14,547 $13,907,812 $10,818,456 $(565,853) $(4,600,671) $(443,284) $128,446 $19,259,453
Employee Stock Ownership Plan 10,858 60 10,918
ESOP shares released 22,046 22,046
Recognition and retention plan 27,654 27,654
Purchase of treasury stock (1,973,155) (1,973,155)
Exercise of stock options and
related tax benefit (1,526) 13,078 11,552
Dividends declared ($.07 per
share) (79,159) (79,159)
Comprehensive income:
Net income 276,456
Net change in unrealized
holding gain on available-
for-sale securities (6,859)
Comprehensive income 269,597
----------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $14,547 $13,944,798 $11,015,813 $(543,807) $(6,560,748) $(443,284) $121,587 $17,548,906
===================================================================================================
The accompanying notes are an integral part of these
consolidated financial statements.
FALMOUTH BANCORP, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
For the Three Months Ended December 31, 2000 and 1999
-----------------------------------------------------
2000 1999
---- ----
(Unaudited) (Unaudited)
Cash flows from operating activities
Net income $ 343,185 $ 276,456
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on sales of investment securities, net (75,724) (95,143)
Accretion of investment securities, net (4,861) (19,129)
Provision for loan loss 85,000 12,000
Change in unearned income (10,496) (11,062)
Net gains on sales of loans (17,862) (1,711)
Depreciation and amortization 43,984 42,493
(Increase) decrease in accrued interest receivable (1,669) 185,260
(Increase) decrease in other assets (14,905) 18,025
Recognition and retention plan (RRP) 27,357 27,654
Increase in other liabilities 21,251 125,290
--------------------------
Net cash provided by operating activities 395,260 560,133
--------------------------
Cash flows from investing activities
Purchases of available-for-sale securities (1,106,107) (730,009)
Proceeds from sales of available-for-sale securities 155,623 825,010
Proceeds from maturities of available-for-sale securities 525,597 4,691,779
Purchases of held-to-maturity securities (983,176) (995,004)
Proceeds from maturities of held-to-maturity securities 3,400,247 2,262,124
Net increase in loans (3,942,300) (3,254,243)
Proceeds from sales of loans 2,445,422 61,711
Capital expenditures (27,451) (27,949)
--------------------------
Net cash provided by investing activities 467,855 2,833,419
--------------------------
Cash flows from financing activities:
Net decrease in demand deposits, NOW and savings accounts (4,514,089) (3,135,966)
Net increase in time deposits 1,621,157 1,681,993
Net increase (decrease) in securities sold under agreements
to repurchase (332,669) 339,121
Proceeds from Federal Home Loan Bank long-term advances 2,000,000 5,000,000
Repayments of Federal Home Loan Bank long-term advances (20,659) (5,019,464)
Net change in Federal Home Loan Bank short-term advances 943,000 283,000
Proceeds from exercise of stock options 8,025 11,552
Dividends paid (92,424) (79,159)
Employee Stock Ownership Plan 8,236 10,858
Unallocated ESOP shares released 22,046 22,046
Purchase of treasury stock (180,532) (1,973,155)
--------------------------
Net cash used in financing activities (537,909) (2,859,174)
--------------------------
Increase in cash and cash equivalents 325,206 534,378
Cash and cash equivalents at beginning of period 6,830,473 7,277,359
--------------------------
Cash and cash equivalents at end or period $ 7,155,679 $ 7,811,737
==========================
Supplemental disclosures
Interest paid $ 1,126,138 $ 861,767
Income taxes paid 57,920 130,200
The accompanying notes are an integral part of these
consolidated financial statements.
FALMOUTH BANCORP, INC.
----------------------
AND SUBSIDIARIES
----------------
Notes to Unaudited Consolidated Financial Statements
Note 1 - Basis of Presentation
The consolidated financial statements of Falmouth Bancorp, Inc. (the
"Company") and its subsidiaries presented herein are unaudited and should be
read in conjunction with the consolidated financial statements of the
Company for the year ended September 30, 2000. The results of operations for
the three-month period ended December 31, 2000 are not necessarily
indicative of the results to be expected for the full year. All material
intercompany balances and transactions have been eliminated in
consolidation. In the opinion of management, the consolidated financial
statements reflect all adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation of results for the interim
periods.
Note 2 - Accounting Policies
The accounting and reporting policies of the Company conform to
generally accepted accounting principles and prevailing practices within the
banking industry. The interim financial information should be read in
conjunction with the Company's 2000 Annual Report contained on Form 10-KSB.
Management is required to make estimates and assumptions that affect
amounts reported in the financial statements. Actual results could differ
significantly from those estimates.
Note 3 - Impact of New Accounting Standard
In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities". Statement No. 133, as amended by SFAS
No. 138, establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. The Statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. The adoption
of SFAS No. 133 did not have a material effect on the Company's consolidated
financial statements.
Note 4 - Earnings per Share
EPS for the three months ended December 31, 2000 and 1999 have been
calculated according to the guidelines of Statement 128. ESOP shares are
only considered outstanding for earnings per share calculations when they
are committed to be released.
Reconciliation of the numerators and the denominators in the calculation
of basic and diluted per share are as follows:
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Three Months Ended December 31, 2000
Basic EPS
- ---------
Net income and income available to
common stockholders $343,185 982,778 $0.35
Effect of dilutive securities options and warrants 5,630
-------------------------
Diluted EPS
- -----------
Income available to common stockholders $343,185 988,408 $0.35
=========================
Three Months Ended December 31, 1999
Basic EPS
- ---------
Net income and income available to
common stockholders $276,456 1,073,376 $0.26
Effect of dilutive securities options and warrants 59,851
-------------------------
Diluted EPS
- -----------
Income available to common stockholders $276,456 1,133,227 $0.24
=========================
Note 5 - Dividends
On November 21, 2000, the Board of Directors of the Company declared a
quarterly cash dividend of $0.09 per share of common stock, which was paid
to stockholders of record on December 21, 2000.
Note 6 - Recent Developments
During the quarter ended December 31, 2000 the Company repurchased
12,600 shares of its common stock. The Company released 600 shares due to
exercised employee stock options. At December 31, 2000, the Company had
430,912 treasury shares.
Effective December 17, 1999, the Falmouth Co-operative Bank
established a subsidiary, Falmouth Capital Corporation, a Real Estate
Investment Trust, as part of managing its tax plan.
Part I. Item 2. Management's Discussion and
Analysis of Financial Condition and Operating Results
General
Falmouth Bancorp, Inc. (the "Company" or "Bancorp"), a Delaware
corporation, is the holding company for Falmouth Co-operative Bank (the
"Bank" or "Falmouth"), a Massachusetts chartered stock co-operative bank. At
December 31, 2000, there were 1,023,838 shares outstanding. The Company's
stock trades on the American Stock Exchange under the symbol "FCB".
The Company's sole business activity is ownership of the Bank. The
Company also makes investments in long and short-term marketable securities
and other liquid investments. The business of the Bank consists of
attracting deposits from the general public and local businesses and using
these funds to originate primarily residential and commercial real estate
loans located in Falmouth, Massachusetts and surrounding areas and to invest
in United States Government and Agency securities. To a lesser extent, the
Bank engages in various forms of consumer and home equity lending. The
Bank's business strategy is to operate as a profitable community bank
dedicated to financing home ownership, small business, and consumer needs in
its market area and to provide personal, high quality service to its
customers. The Bank has two subsidiaries, Falmouth Securities Corporation, a
Massachusetts corporation, which was established solely for the purpose of
acquiring and holding investments that are permissible for banks to hold
under Massachusetts law and Falmouth Capital Corporation, a real estate
investment trust.
Comparison of Financial Condition at December 31, 2000 and September 30, 2000.
The Company's total assets decreased by $280,000 or 0.2% for the three
months ended December 31, 2000, from $135.5 million at September 30, 2000 to
$135.2 million at December 31, 2000. Total deposits decreased $2.9 million or
2.6%, from $112.4 million at September 30, 2000 to $109.5 million at December
31, 2000. This decrease was due, in part to withdrawals from retail checking,
commercial checking, and regular savings accounts during the period. Total
net loans were $107.2 million or 97.9% of total deposits at December 31,
2000, as compared to $105.7 million or 94.1% of total deposits at September
30, 2000, representing an increase of $1.4 million for the quarter. This
increase is due, in part, to the continued strong local real estate market
driving single-family loan originations and the Bank's commitment to increase
market share. Investment securities were $17.2 million or 12.7% of total
assets at December 31, 2000, as compared to $19.3 million or 14.3% of total
assets at September 30, 2000. Investment securities decreased $2.1 million
due, in part, to cash flows to fund loans, as well as retail checking,
commercial checking, and regular savings account withdrawals.
Borrowed funds from the Federal Home Loan Bank of Boston increased
from $3.9 million at September 30, 2000 to $6.8 million at December 31,
2000. The increase of $2.9 million was utilized, primarily to fund
residential loan originations, and to a certain extent to fund savings
withdrawals, while allowing several securities maturities to be reinvested.
Securities sold under an agreement to repurchase (sweep accounts for
commercial depositors) decreased from $864,000 at September 30, 2000 to
$531,000 at December 31, 2000. The decrease was attributed to the increased
seasonal liquidity needs of selected commercial deposit accounts at December
31, 2000.
Stockholders' equity was $18.0 million at December 31, 2000, and
September 30, 2000. The components of stockholders equity changed as a
result of an increase in retained earnings of $251,000, which was offset, in
part, by an increase in treasury shares purchased of $170,000 under the
Company's stock repurchase programs and an increase in the unrealized
accumulated comprehensive loss in securities of $134,000. The ratio of
stockholders equity to total assets was 13.31% at December 31, 2000, and the
book value per share of common stock was $17.58, compared to 13.28% and
$17.37, respectively, at September 30, 2000.
The ratio of the allowance for loan losses to total loans was .78% at
December 31, 2000. Management believes the allowance will be adequate based
upon, among other things, past loss experience, prevailing economic
conditions, and the level of credit risk in the loan portfolio. However, the
Bank may periodically provide additional provisions as deemed necessary to
maintain a sufficient allowance for the loan loss to total loan ratio. The
Bank added $85,000 to the allowance during the three month period ended
December 31, 2000. The Bank plans to continue to set aside additional
specific reserves for commercial loans and large residential mortgages.
Net Income. The Company's net income for the three months ended
December 31, 2000 was $343,000 as compared to $276,000 on December 31, 1999.
The increase in net income of $67,000 was primarily due to an increase in
other income of $8,000, a decrease in income taxes of $3,000, and an increase
in interest and dividend income of $479,000, offset, in part, with an
increase in the provision for loan losses of $73,000, an increase in other
expenses of $86,000 and an increase in interest expense of $264,000. The
annualized return on average assets (ROA) for the three months ended December
31, 2000 was 1.02%, an increase of 8 basis points, as compared to 0.94% for
the same period of the prior year. Interest and dividend income increased,
primarily, as the result of increased residential lending activity during the
year.
Interest and Dividend Income. Total interest and dividend income for
the three months ended December 31, 2000 was $2.4 million, an increase of
$479,000, as compared to $1.9 million for the three month period ended
December 31,1999. The increase was attributable to an increase in interest
and fees on loans of $527,000, which was offset, in part, by a decrease in
dividends on securities and other interest of $48,000.
Interest Expense. Total interest expense for the three months ended
December 31, 2000 was $1.1 million, as compared to $862,000 for the same
period of the prior year, an increase if $264,000. The increase in interest
expense is primarily due to an $18.0 million growth in savings deposits for
the twelve months ended December 31, 2000.
Net Interest and Dividend Income. Net interest and dividend income for
the three-month period ended December 31, 2000 was $1.3 million as compared
to $1.1 million for the three months ended December 31, 1999. The increase of
$215,000 was the result of a $479,000 increase in interest and dividend
income, offset by a $264,000 increase in interest expense. The net interest
margin for the three months ended December 31, 2000 was 4.01%, an increase of
17 basis points, as compared to 3.84% for the three months ended December 31,
1999. The increase in net interest margin was primarily the result of an
increase in interest income.
Provision for Loan Losses. The Bank added $85,000 to its allowance for
loan losses during the quarter ended December 31, 2000, as compared to
$12,000 for the quarter ended December 31, 1999. Management believes that,
although the provision is deemed adequate based on its delinquency and loan
loss record, additional provisions may be added from time to time as the loan
portfolio expands by loan type and volume, including expansion in the
commercial loan portfolio. As of December 31, 2000, the Bank had no loans
classified as doubtful or loss.
Other Income. Other income for the three-month period ended December
31, 2000 was $208,000, as compared to $200,000 for the three months ended
December 31, 1999. The $8,000 increase was primarily the result of an
increase in service charge income of $1,000, an increase in net gains on the
sale of mortgages of $16,000 and an increase in other income of $10,000. This
was offset, in part, by a decrease in net gains realized from the sale of
investment securities of $19,000.
Operating Expenses. Operating expenses for the three months ended
December 31, 2000 were $861,000, as compared to $775,000 for the three months
ended December 31, 1999. The $86,000 increase was primarily due to the
combination of an increase in salaries and employee benefits of $32,000, an
increase in equipment expense of $5,000, an increase in data processing
expense of $13,000, an increase in directors' fees of $2,000, an increase in
legal and professional costs of $5,000, and an increase in other expenses of
$30,000, combined with a decrease in occupancy expense of $1,000. The
annualized ratio of operating expenses to average total assets for the three
months ended December 31, 2000 was 2.57, as compared to 2.63% for the three-
month period ended December 31, 1999, a decrease of 6 basis points. Data
processing expense increased as a result of the addition of two ATMs to the
Bank's electronic financial services network. Other operating expenses
increased, in part, due to the formation of the Bank's subsidiary, Falmouth
Capital Corporation, a Real Estate Investment Trust.
Liquidity and Capital Resources
The Bank's primary sources of funds consist of deposits, repayment and
prepayment of loans and mortgaged-backed securities, maturities of
investments and interest-bearing deposits, and funds provided from
operations. While scheduled repayments of loans and mortgage-backed
securities and maturities of investment securities are predictable sources
of funds, deposit flows and loan prepayments are greatly influenced by the
general level of interest rates, economic conditions and competition. The
Bank uses its liquidity resources principally to fund existing and future
loan commitments, to fund net deposit outflows, to invest in other interest-
earning assets, to maintain liquidity, and to meet operating expenses.
The Bank is required to maintain adequate levels of liquid assets.
This guideline, which may be varied depending upon economic conditions and
deposit flows, is based upon a percentage of deposits and short-term
borrowings. The Bank has historically maintained a level of liquid assets in
excess of regulatory requirements. The Bank's liquidity ratio at December
31, 2000 was 20.02%.
A major portion of the Bank's liquidity consists of short-term
securities obligations. The level of these assets is dependent on the Bank's
operating, investing, lending and financing activities during any given
period. At December 31, 2000, regulatory liquidity totaled $23.1 million.
The primary investing activities of the Bank include origination of loans
and the purchase of investment securities.
Liquidity management is both a daily and long-term function of
management. If the Bank requires funds beyond its ability to generate them
internally, the Bank believes that it could borrow additional funds from the
Federal Home Loan Bank of Boston (FHLB). At December 31, 2000, the Bank had
outstanding advances from the FHLB of Boston in the amount of $6.8 million
in short and long-term borrowings. As these advances mature, they will be
repaid or re-written as longer term matched borrowings which will assist the
match of rate sensitive assets to rate sensitive liabilities.
At December 31, 2000, the Bank had $3.2 million in outstanding
residential and commercial commitments to originate loans, as well as $17.2
million in unadvanced loan commitments. If the Bank anticipates that it may
not have sufficient funds available to meet its current loan commitments it
may commence further matched borrowing from the Federal Home Loan Bank of
Boston. Certificates of deposit that are scheduled to mature in one year or
less totaled $45.8 million at December 31, 2000. Based on historical
experience, management believes that a significant portion of such deposits
will remain with the Bank.
At December 31, 2000 the Bank exceeded all of its regulatory capital
requirements.
OTHER INFORMATION
Part II.
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
Falmouth Bancorp, Inc. is a publicly owned bank holding company and
the parent corporation of Falmouth Co-operative Bank, a Massachusetts
chartered stock co-operative bank offering traditional products and
services. The Bank conducts business through its main office located at 20
Davis Straits, Falmouth, Massachusetts 02540, and its two branch locations
in North and East Falmouth. The telephone number is (508) 548-3500.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
FALMOUTH BANCORP, INC.
(Registrant)
Date: January 31, 2001 By: /s/ Santo P. Pasqualucci
---------------------- ------------------------
Santo P. Pasqualucci
President and Chief Executive
Officer
Date: January 31, 2001 By: /s/ George E. Young, III
---------------------- ------------------------
George E. Young, III
Vice President and Chief
Financial Officer