UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 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: 0-22444
WVS Financial Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1710500
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9001 Perry Highway
Pittsburgh, Pennsylvania 15237
------------------------------- ----------
(Address of principal (Zip Code)
executive offices)
(412) 364-1911
-------------------------------
(Registrant's telephone number,
including area code)
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 requirement for the past 90 days. YES [ X ] NO [ ]
Shares outstanding as of May 9, 2000: 2,892,176 shares Common Stock,
$.01 par value.
WVS FINANCIAL CORP. AND SUBSIDIARY
----------------------------------
INDEX
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PART I. Financial Information Page
- ------- --------------------- ----
Item 1. Financial Statements
Consolidated Statements of Financial
Condition as of March 31, 2000
and June 30, 1999 (Unaudited) 3
Consolidated Statements of Income
for the Three and Nine Months Ended
March 31, 2000 and 1999 (Unaudited) 4
Consolidated Statements of Cash Flows
for the Nine Months Ended March 31,
2000 and 1999 (Unaudited) 5
Consolidated Statements of Changes in
Stockholders' Equity for the Nine Months
Ended March 31, 2000 (Unaudited) 7
Notes to Unaudited Consolidated
Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations for the Three and Nine Months
Ended March 31, 2000 10
Item 3. Quantitative and Qualitative Disclosures
about Market Risk 17
PART II. Other Information Page
- -------- ----------------- ----
Item 1. Legal Proceedings 21
Item 2. Changes in Securities 21
Item 3. Defaults upon Senior Securities 21
Item 4. Submission of Matters to a Vote of
Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 21
-- Signatures 22
2
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(in thousands)
March 31, 2000 June 30, 1999
-------------- -------------
Assets
------
Cash and due from banks $ 760 $ 745
Interest-earning demand deposits 1,196 1,148
Investment securities available-for-sale (amortized cost of
$1,380 and $1,380) 1,282 1,402
Investment securities held-to-maturity (market value of
$124,509 and $87,850) 131,215 90,764
Mortgage-backed securities available-for-sale (amortized cost of
$10,647 and $9,342) 10,397 9,273
Mortgage-backed securities held-to-maturity (market value of
$63,230 and $62,167) 65,441 63,107
Federal Home Loan Bank stock, at cost 4,619 6,195
Net loans receivable (allowance for loan losses of $1,842) 178,978 170,327
Accrued interest receivable 3,288 3,105
Premises and equipment 1,078 1,154
Deferred taxes and other assets 1,333 1,188
--------- ---------
TOTAL ASSETS $ 399,587 $ 348,408
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Savings Deposits:
Non-interest-bearing accounts $ 10,142 $ 9,037
NOW accounts 18,326 16,668
Savings accounts 38,116 38,923
Money market accounts 12,995 12,610
Certificates of deposit 91,718 93,876
--------- ---------
Total savings deposits 171,297 171,114
Federal Home Loan Bank advances 92,384 116,900
Other borrowings 103,251 25,820
Advance payments by borrowers for taxes and insurance 2,424 3,130
Accrued interest payable 1,791 1,929
Other liabilities 2,110 1,577
--------- ---------
TOTAL LIABILITIES 373,257 320,470
Stockholders' equity:
Preferred stock:
5,000,000 shares, no par value per share, authorized; none
outstanding -- --
Common stock:
10,000,000 shares, $.01 par value per share, authorized;
3,674,420 and 3,668,060 shares issued 37 37
Additional paid-in capital 19,268 19,062
Treasury stock: 777,274 and 498,303 shares at cost, respectively (11,410) (7,596)
Retained earnings, substantially restricted 19,039 17,024
Accumulated other comprehensive loss (230) (31)
Unallocated shares - Recognition and Retention Plans (243) (326)
Unallocated shares - Employee Stock Ownership Plan (131) (232)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 26,330 27,938
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 399,587 $ 348,408
========= =========
See accompanying notes to consolidated financial statements.
3
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
INTEREST AND DIVIDEND INCOME:
Loans $ 3,421 $ 3,158 $ 10,318 $ 9,536
Investment securities 2,215 1,193 6,060 4,013
Mortgage-backed securities 1,333 1,236 3,860 3,093
Interest-earning deposits with other
institutions 8 32 29 64
Federal Home Loan Bank stock 117 99 367 277
---------- ---------- ---------- ----------
Total interest and dividend income 7,094 5,718 20,634 16,983
---------- ---------- ---------- ----------
INTEREST EXPENSE:
Deposits 1,573 1,576 4,711 4,928
Borrowings 2,747 1,550 7,432 4,436
Advance payments by borrowers for taxes
and insurance 11 11 25 25
---------- ---------- ---------- ----------
Total interest expense 4,331 3,137 12,168 9,389
---------- ---------- ---------- ----------
NET INTEREST INCOME 2,763 2,581 8,466 7,594
PROVISION FOR LOAN LOSSES -- -- -- --
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 2,763 2,581 8,466 7,594
---------- ---------- ---------- ----------
NON-INTEREST INCOME:
Service charges on deposits 69 64 218 200
Investment securities gains, net -- -- -- 36
Other 63 45 194 137
---------- ---------- ---------- ----------
Total non-interest income 132 109 412 373
---------- ---------- ---------- ----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 676 683 2,236 2,091
Occupancy and equipment 88 89 266 272
Deposit insurance premium 9 26 60 76
Data processing 44 43 132 131
Correspondent bank service charges 36 33 107 94
Other 188 165 553 548
---------- ---------- ---------- ----------
Total non-interest expense 1,041 1,039 3,354 3,212
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 1,854 1,651 5,524 4,755
INCOME TAXES 723 644 2,076 1,814
---------- ---------- ---------- ----------
NET INCOME $ 1,131 $ 1,007 $ 3,448 $ 2,941
========== ========== ========== ==========
EARNINGS PER SHARE:
Basic $ 0.39 $ 0.30 $ 1.16 $ 0.84
Diluted $ 0.39 $ 0.30 $ 1.15 $ 0.84
AVERAGE SHARES OUTSTANDING:
Basic 2,915,300 3,360,599 2,983,285 3,485,380
Diluted 2,936,508 3,390,557 3,008,733 3,516,200
See accompanying notes to consolidated financial statements.
4
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Nine Months Ended March 31,
---------------------------
2000 1999
-------- ---------
OPERATING ACTIVITIES
Net income $ 3,448 $ 2,941
Adjustments to reconcile net income to cash provided by operating
activities:
Gain on sale of investments and mortgage-backed securities -- (36)
Depreciation and amortization, net 87 88
Amortization of discounts, premiums and deferred loan fees (71) 33
Amortization of ESOP, RRP and deferred and unearned
compensation 355 263
Increase in accrued interest receivable (183) 333
Increase (decrease) in accrued interest payable (138) 216
Increase in accrued and deferred taxes 548 408
Other, net (39) 289
-------- ---------
Net cash provided by operating activities 4,007 4,535
-------- ---------
INVESTING ACTIVITIES
Available-for-sale:
Purchases of investments and mortgage-backed securities (2,932) (26,908)
Proceeds from repayments of investments and mortgage-backed securities 1,618 50,272
Proceeds from sale of investments and mortgage-backed securities -- 905
Held-to-maturity:
Purchases of investments and mortgage-backed securities (53,880) (147,763)
Proceeds from repayments of investments and mortgage-backed securities 11,345 99,507
Increase in net loans receivable (8,820) (2,216)
Decrease (increase) in FHLB stock 1,576 (1,520)
Other, net (16) --
Purchases of premises and equipment (10) (79)
-------- ---------
Net cash used for investing activities (51,119) (27,802)
-------- ---------
5
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Nine Months Ended March 31,
---------------------------
2000 1999
-------- --------
FINANCING ACTIVITIES
Net increase in transaction and passbook accounts 2,342 274
Net (decrease) increase in certificates of deposit (2,158) 914
Net (decrease) increase in FHLB advances (24,516) 19,643
Net increase in other borrowings 77,431 9,889
Net decrease in advance payments by borrowers for taxes and insurance (706) (929)
Net proceeds from issuance of common stock 34 238
Funds used for purchase of treasury stock (3,814) (6,104)
Cash dividends paid (1,435) (1,643)
-------- --------
Net cash provided by financing activities 47,178 22,282
-------- --------
Increase (decrease) in cash and cash equivalents 66 (985)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 1,893 2,506
-------- --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 1,956 $ 1,521
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits, escrows and borrowings $ 12,306 $ 9,173
Income taxes $ 1,427 $ 1,153
See accompanying notes to consolidated financial statements.
6
WVS FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(in thousands)
Accum.
Other Retained
Add'l. Unallocated Unallocated Compre- Earnings
Common Paid-In Treasury Shares Held Shares Held hensive Substantially
Stock Capital Stock by ESOP by RRP Loss Restricted Total
----- ------- ----- ------- ------ ---- ---------- -----
Balance at June 30, 1999 $ 37 $19,062 $(7,596) $ (232) $ (326) $ (31) $17,024 $27,938
Comprehensive income:
Net Income 3,448 3,448
Other comprehensive
income:
Change in unrealized
holding losses on
securities, net of
income tax benefit
of $103 (199) (199)
-------
Comprehensive income 3,249
Purchase of shares for
treasury stock (3,814) (3,814)
Release of earned
Employee Stock
Ownership Plan (ESOP)
shares 172 101 273
Accrued compensation
expense for Recognition
and Retention Plans (RRP) 83 83
Exercise of stock options 34 34
Cash dividends declared
($0.48 per share) (1,433) (1,433)
------- ------- -------- ------- ------ ------- ------- -------
Balance at March 31, 2000 $ 37 $19,268 $(11,410) $ (131) $ (243) $ (230) $19,039 $26,330
======= ======= ======== ======= ====== ======= ======= =======
See accompanying notes to consolidated financial statements.
7
WVS FINANCIAL CORP. AND SUBSIDIARY
----------------------------------
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions for Form 10-Q and
therefore do not include information or footnotes necessary for a
complete presentation of financial condition, results of operations,
and cash flows in conformity with generally accepted accounting
principles. However, all adjustments (consisting only of normal
recurring adjustments) which, in the opinion of management, are
necessary for a fair presentation have been included. The results of
operations for the three and nine months ended March 31, 2000, are not
necessarily indicative of the results which may be expected for the
entire fiscal year.
2. RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The statement provides accounting
and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, by requiring the
recognition of those items as assets or liabilities in the statement of
financial position, recorded at fair value. Statement No. 133 precludes
a held-to-maturity security from being designated as a hedged item,
however, at the date of initial application of this statement, an
entity is permitted to transfer any held-to-maturity security into the
available-for-sale or trading categories. The unrealized holding gain
or loss on such transferred securities shall be reported consistent
with the requirements of Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". Such transfers do not raise
an issue regarding an entity's intent to hold other debt securities to
maturity in the future. In June 1999, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133 - an amendment
of FASB Statement No. 133." This statement delayed the effective date
of Statement No. 133 for one year, to fiscal years beginning after June
15, 2000. Earlier adoption is permitted for any fiscal quarter that
begins after the issue date of this statement.
The Company does not believe the effect of the adoption of this
accounting statement will be material.
8
3. EARNINGS PER SHARE
------------------
The following table sets forth the computation of basic and diluted
earnings per share.
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------------- ----------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
Weighted average common shares
outstanding 3,670,583 3,664,343 3,668,965 3,661,535
Average treasury stock shares (726,444) (250,771) (648,786) (119,113)
Average unearned ESOP shares (28,839) (52,973) (36,894) (57,042)
---------- ---------- ---------- ----------
Weighted average common shares
and common stock equivalents
used to calculate basic earnings
per share 2,915,300 3,360,599 2,983,285 3,485,380
Additional common stock
equivalents (stock options) used
to calculate diluted earnings
per share 21,208 29,958 25,448 30,820
---------- ---------- ---------- ----------
Weighted average common shares
and common stock equivalents
used to calculate diluted earnings
per share 2,936,508 3,390,557 3,008,733 3,516,200
========= ========= ========= =========
Net income $1,131,119 $1,007,343 $3,447,987 $2,940,786
========= ========= ========= =========
Earnings per share:
Basic $0.39 $0.30 $1.16 $0.84
Diluted $0.39 $0.30 $1.15 $0.84
========= ========= ========= =========
9
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2000
GENERAL
WVS Financial Corp. ("WVS" or the "Company") is the parent holding
company of West View Savings Bank ("West View" or the "Savings Bank"). The
Company was organized in July 1993 as a Pennsylvania-chartered unitary bank
holding company and acquired 100% of the common stock of the Savings Bank in
November 1993.
West View Savings Bank is a Pennsylvania-chartered, SAIF-insured stock
savings bank conducting business from six offices in the North Hills suburbs of
Pittsburgh. The Savings Bank converted to the stock form of ownership in
November 1993. The Savings Bank had no subsidiaries at March 31, 2000.
The operating results of the Company depend primarily upon its net
interest income, which is determined by the difference between income on
interest-earning assets, principally loans, mortgage-backed securities and
investment securities, and interest expense on interest-bearing liabilities,
which consist primarily of deposits and borrowings. The Company's net income is
also affected by its provision for loan losses, as well as the level of its
non-interest income, including loan fees and service charges, and its
non-interest expenses, such as compensation and employee benefits, income taxes,
deposit insurance and occupancy costs.
The Company's strategy focuses on community-based lending, maintaining
asset quality and generating consistent earnings growth.
FINANCIAL CONDITION
The Company's assets totaled $399.6 million at March 31, 2000, as
compared to $348.4 million at June 30, 1999. The $51.2 million or 14.7% increase
in total assets was primarily comprised of a $42.2 million or 24.7% increase in
investment and mortgage-backed securities, including Federal Home Loan Bank
("FHLB") stock, a $8.7 million or 5.1% increase in net loans receivable and a
$183 thousand or 5.9% increase in accrued interest receivable. The Company's
investment securities increased from $98.4 million to $137.1 million while
mortgage-backed securities increased from $72.4 million to $75.8 million from
June 30, 1999 to March 31, 2000.
The Company's total liabilities increased $52.8 million or 16.5% to
$373.3 million as of March 31, 2000, from $320.5 million as of June 30, 1999.
The $52.8 million increase in total liabilities was primarily comprised of a
$52.9 million or 37.1% increase in FHLB advances and other borrowings which was
partially offset by a $706 thousand decrease in advance payments by borrowers
for taxes and insurance.
Total stockholders' equity decreased $1.6 million or 5.8% to $26.3
million as of March 31, 2000, from $27.9 million as of June 30, 1999. Capital
expenditures for the Company's stock repurchase program and cash dividends
totaled $3.8 million and $1.4 million, respectively, which were partially funded
by Company net income of $3.4 million for the nine months ended March 31, 2000.
10
ASSET AND LIABILITY MANAGEMENT
The Company continued a strategy designed to reduce the interest rate
sensitivity of its financial assets to its financial liabilities. The primary
elements of this strategy include:
1) expanding the Company's investment growth program in order to enhance
net interest income;
2) maintaining the Company's level of short-term liquid investments by
funding loan commitments and purchasing longer-term investment
securities;
3) emphasizing the growth of lower-cost savings and checking accounts; and
4) pricing the Company's certificates of deposit and loan products nearer
to the market average rate as opposed to the upper range of market
offered rates.
The Company has continued its investment growth program, originally
initiated in the third quarter of fiscal 1994, in order to realize additional
net interest income. Under this strategy, a longer-term callable or noncallable
investment security, or mortgage-backed security, is purchased and funded
through the use of non-deposit liabilities, such as FHLB advances and other
borrowings. With this strategy, the Company increases its net interest income,
but also faces the risk, during periods of rising market interest rates, that it
may experience a decline in net interest income if the rate paid on its various
borrowings rises above the rate earned on the investment security purchased. In
order to mitigate this exposure, the Board has placed certain restrictions on
the investment growth program, including:
1) the average outstanding daily balance of total borrowings, computed
quarterly, may not exceed $220.0 million;
2) suitable investments shall be restricted to those meeting the credit
quality criteria outlined in the Company's investment policy;
3) each security purchased shall initially yield a minimum of one hundred
and twenty-five basis points above the incremental rate paid on
short-term borrowings, at the time of purchase; and
4) the Company's total borrowed funds position, allocated to the
investment growth program, may not exceed $225.0 million.
In most cases, the initial yield spread earned on investment security
purchases ranged from approximately 230 to 234 basis points.
During the nine months ended March 31, 2000, the Company increased its
mortgage-backed securities portfolio by $3.4 million or 4.70%. The increase for
the nine months was attributable to securities purchases partially offset by
principal repayments. Mortgage-backed securities purchases for the nine months
totaled approximately $11.4 million with an estimated weighted average purchase
yield of 7.66%. At March 31, 2000, the Company held $75.8 million of
mortgage-backed securities with an approximate yield of 6.97%. The
mortgage-backed securities purchases were made in order to mitigate the
principal calls on the Company's callable bond portfolio and to earn a higher
yield with an expected average life profile comparable to longer-term callable
agency bonds.
The Company has continued to purchase bonds with optional principal
redemption features ("callable bonds") in order to capture additional net
interest income. Callable bonds generally provide investors with higher rates of
return than noncallable bonds because the issuer has the option to redeem the
bonds before maturity. While this strategy affords WVS the current opportunity
to improve its net interest income, during a period of declining interest rates,
the Company would be exposed to the risk that the investment will be redeemed
prior to its final stated maturity. In order to mitigate this risk, the Company
has funded a significant portion of its purchases of callable bonds with
short-term borrowings. Approximately $4.0 million of callable agency bonds with
an estimated weighted average yield to call of 5.83% were called during the nine
months ended March 31, 2000.
During the nine months ended March 31, 2000, the Company purchased
approximately $31.1 million of callable agency bonds with an approximate
weighted average yield to call and maturity of 8.17% and 7.91%, respectively.
The callable agency bond purchases, totaling $31.1 million, are summarized by
initial term to call as follows: $10.0 million within three months, $3.2 million
with greater than three months and
11
within six months, $4.0 million with greater than six months and within one
year, $1.0 million with greater than twelve months and within twenty-four
months, $7.7 million with greater than twenty-four months and within thirty-six
months, and $5.2 million with greater than thirty-six months and less than sixty
months.
During the nine months ended March 31, 2000, the Company purchased
approximately $9.7 million of bank qualified tax-exempt bonds with a taxable
equivalent yield of 8.43%. Bank qualified tax-exempt bonds generally have longer
terms to maturity (e.g. twenty years) and longer first call dates (e.g. five
years). The Company purchased these securities in order to capture attractive
yields for an extended period of time as measured by the first call date.
During the nine months ended March 31, 2000, the Company borrowed
approximately $394.4 million in various advances from the FHLB with a weighted
average rate of 5.39% and incurred $539.3 million in other borrowings with a
weighted average rate of 5.72%. During the nine months ended March 31, 2000, the
Company repaid $418.9 million of FHLB advances and $461.9 million of other
borrowings.
The Company also makes available for origination residential mortgage
loans with interest rates which adjust pursuant to a designated index, although
customer acceptance has been somewhat limited in the Savings Bank's market area.
The Company will continue to selectively offer commercial real estate, land
acquisition and development, and shorter-term construction loans, primarily on
residential properties, to partially increase its loan asset sensitivity. The
Company continues to emphasize higher yielding commercial real estate, home
equity and small business loans to existing customers and seasoned prospective
customers.
As of March 31, 2000, the implementation of these asset and liability
management initiatives resulted in the following:
1) an aggregate of $50.7 million or 28.6% of the Company's net loan
portfolio had adjustable interest rates or maturities of less than 12
months;
2) $16.2 million or 21.3% of the Company's portfolio of mortgage-backed
securities (including collateralized mortgage obligations - "CMOs")
were secured by floating rate securities; and
3) $130.7 million or 95.3% of the Company's investment securities
portfolio was comprised of callable bonds.
The effect of interest rate changes on a financial institution's assets
and liabilities may be analyzed by examining the "interest rate sensitivity" of
the assets and liabilities and by monitoring an institution's interest rate
sensitivity "gap". An asset or liability is said to be interest rate sensitive
within a specific time period if it will mature or reprice within a given time
period. A gap is considered positive when the amount of rate sensitive assets
exceeds the amount of rate sensitive liabilities. A gap is considered negative
when the amount of interest sensitive liabilities exceeds the amount of interest
sensitive assets. During a period of falling interest rates, a positive gap
would tend to adversely affect net interest income, while a negative gap would
tend to result in an increase in net interest income. During a period of rising
interest rates, a positive gap would tend to result in an increase in net
interest income, while a negative gap would tend to adversely affect net
interest income.
The Company's one year cumulative interest rate sensitivity gap is
estimated at a negative 45.1% of total assets at March 31, 2000, as compared to
a negative 8.9% at June 30, 1999, in each instance, based on certain assumptions
by management with respect to the repricing of certain assets and liabilities.
At March 31, 2000, the Company's interest-earning assets maturing or repricing
within one year totaled $85.5 million while the Company's interest-bearing
liabilities maturing or repricing within one year totaled $265.9 million,
providing an excess of interest-earning liabilities over interest-bearing assets
of $180.4 million. At March 31, 2000, the percentage of the Company's assets to
liabilities maturing or repricing within one year was 32.2%. Accordingly, due to
the Company's high negative gap, rising interest rates would most likely
adversely affect the Company's net interest income.
12
RESULTS OF OPERATIONS
General. WVS reported net income of $1.1 million, or $0.39 diluted
earnings per share, and $3.4 million, or $1.15 diluted earnings per share, for
the three and nine months ended March 31, 2000, respectively. Net income
increased by $124 thousand or 12.3% and diluted earnings per share increased
$0.09 or 30.0% for the three months ended March 31, 2000, when compared to the
same period in 1999. The increase was primarily attributable to a $182 thousand
increase in net interest income and a $23 thousand increase in non-interest
income, partially offset by a $79 thousand increase in income tax expense. Net
income increased by $507 thousand or 17.2% and diluted earnings per share
increased $0.31 or 36.9% for the nine months ended March 31, 2000, when compared
to the same period in 1999. The increase was principally the result of a $872
thousand increase in net interest income, partially offset by a $142 thousand
increase in non-interest expense and a $262 thousand increase in income tax
expense.
Net Interest Income. The Company's net interest income increased by
$182 thousand or 7.1% for the three months ended March 31, 2000, when compared
to the same period in 1999. For the nine months ended March 31, 2000, net
interest income increased by $872 thousand or 11.5%, when compared to the same
period in 1999. Both increases were principally attributable to increases in the
Company's investment, mortgage-backed securities and loan portfolios which were
primarily funded with FHLB advances and other borrowings.
Interest Income. Interest and dividend income on interest-bearing
deposits with other institutions, investment securities and FHLB stock ("other
investment securities") increased by $1.0 million or 76.9% for the three months
ended March 31, 2000, when compared to the same period in 1999. The increase was
primarily attributable to a $53.3 million increase in the average balance of
investment securities outstanding and a 51 basis point increase in the weighted
average yield earned on investment securities for the three months ended March
31, 2000, when compared to the same period in 1999. Interest on other investment
securities increased $2.1 million or 48.8% for the nine months ended March 31,
2000, when compared to the same period in 1999. The increase in interest income
on investment securities was attributable to a $35.3 million increase in the
average balance of investment securities outstanding and a 42 basis point
increase in the weighted average yield earned on investment securities for the
nine months ended March 31, 2000, when compared to the same period in 1999. The
increases in the average balance of investment securities during both the three
and nine month periods ended March 31, 2000, were principally attributable to
purchases of investment securities under the Company's investment growth
program. The increase in the weighted average yield earned was consistent with
market conditions for the three and nine months ended March 31, 2000.
Interest on net loans receivable increased by $263 thousand or 8.3%
for the three months ended March 31, 2000, when compared to the same period in
1999. The increase was attributable to an increase of $24.9 million in the
average balance of net loans receivable outstanding, which was partially offset
by a decrease of 55 basis points in the weighted average yield earned on net
loans receivable for the three months ended March 31, 2000, when compared to the
same period in 1999. Interest on net loans receivable increased by $782 thousand
or 8.2% for the nine months ended March 31, 2000, when compared to the same
period in 1999. The increase was attributable to a $20.1 million increase in the
average balance of outstanding loans which was partially offset by a 34 basis
point decrease in the weighted average yield earned on outstanding loans for the
nine months ended March 31, 2000. The increases in the average loan balance
outstanding for the three and nine months ended March 31, 2000, were primarily
attributable to an increased level of mortgage originations due to a stronger
local demand for permanent mortgage financing and an emphasis on multi-family,
commercial and consumer loan products in order to earn returns greater than
those offered in the single-family residential mortgage market. The Company's
weighted average loan yield was impacted by a $3.8 million increase in
nonaccrual commercial real estate loans during the quarter ended March 31, 2000.
Interest on mortgage-backed securities increased by $97 thousand or
7.8% for the three months ended March 31, 2000, when compared to the same period
in 1999. The increase was attributable to a 70 basis point increase in the
weighted average yield earned on mortgage-backed securities, which was partially
offset by a $2.4 million decrease in the average balance of mortgage-backed
securities for the three months ended March 31, 2000, when compared to the same
period in 1999. Interest on mortgage-backed securities
13
increased $767 thousand or 24.8% for the nine months ended March 31, 2000. The
increase was primarily attributable to a $11.1 million increase in the average
balance of mortgage-backed securities outstanding and a 41 basis point increase
in the weighted average yield earned on mortgage-backed securities for the nine
months ended March 31, 2000, when compared to the same period in 1999. The
Company has increased its purchases of mortgage-backed securities in order to
mitigate the principal calls on the Company's callable bond portfolio and to
earn a higher yield with an expected average life profile comparable to
longer-term callable agency bonds.
Interest Expense. Interest expense on deposits and escrows decreased
by $3 thousand or 0.2% and decreased by $217 thousand or 4.4% for the three and
nine months ended March 31, 2000, respectively, when compared to the same
periods in 1999. The decrease in interest expense on deposits and escrows was
principally attributable to a 5 basis point decrease in the average yield paid
on deposits and escrows, which was partially offset by a $1.7 million increase
in the average balance of interest-bearing deposits and escrows for the three
months ended March 31, 2000, when compared to the same period in 1999. For the
nine months ended March 31, 2000, the decrease in interest expense on deposits
and escrows was primarily attributable to a 2 basis point decrease in the
average yield paid on deposits and escrows which was partially offset by a $1.7
million increase in the average balance of interest-bearing deposits and
escrows. The average yield paid on interest-bearing deposits and escrows
decreased due to lower rates paid on time deposits.
Interest expense on FHLB advances and other borrowings increased by
$1.2 million and $3.0 million for the three and nine months ended March 31,
2000, respectively, when compared to the same periods in 1999. The increases
were primarily attributable to a $77.6 million or 67.2% and $68.9 million or
63.6% increases in the average balance of such borrowings outstanding, and a 32
and 13 basis point increase in the weighted average rate paid on such borrowings
for the three and nine months ended March 31, 2000, respectively. The increased
amount of borrowings outstanding was used to fund the Company's loan
originations and purchases of investment securities.
Provision for Loan Losses. A provision for loan losses is charged to
earnings to maintain the total allowance to a level considered adequate by
management to absorb potential losses in the portfolio. Management's
determination of the adequacy of the allowance is based on an evaluation of the
portfolio considering past experience, current economic conditions, volume,
growth and composition of the loan portfolio, and other relevant factors.
The Company did not record a provision for possible losses on loans
for the three and nine months ended March 31, 2000, respectively. At both March
31, 2000 and June 30, 1999, the Company's total allowance for loan losses
amounted to $1.8 million or 1.0% of the Company's total loan portfolio.
Non-Interest Income. Total non-interest income increased by $23
thousand and $39 thousand for the three and nine months ended March 31, 2000,
respectively, when compared to the same periods in 1999. The increase in
non-interest income for the three months ended March 31, 2000, was primarily
attributable to an $18 thousand increase in other income, including ATM fee and
loan late charge income and a $5 thousand increase in service charges on
deposits during the three months ended March 31, 2000. The increase in
non-interest income for the nine months ended March 31, 2000, was principally
attributable to a $57 thousand increase in other income including ATM fee and
loan late charge income and an $18 thousand increase in service charges on
deposits, which were offset by the absence of $36 thousand in net gains on the
sale of investment securities during 1999.
Non-Interest Expense. Total non-interest expense increased $2
thousand or 0.2% and $142 thousand or 4.4% for the three and nine months ended
March 31, 2000, respectively, when compared to the same periods in 1999.
Compensation and employee benefits expense decreased $7 thousand or
1.0% and increased $145 thousand or 6.9% for the three and nine months ended
March 31, 2000, respectively, when compared to the same periods in 1999. The
increase for the nine months ended March 31, 2000 was primarily attributable to
increases in salaries and employee benefits.
14
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $4.0 million during
the nine months ended March 31, 2000. Net cash provided by operating activities
was primarily comprised of the $3.4 million of net income.
Funds used by investing activities totaled $51.1 million during the
nine months ended March 31, 2000. Primary uses of funds during the nine months
ended March 31, 2000, included $56.8 million for purchases of investment and
mortgage-backed securities and a $8.8 million increase in net loans receivable
which were partially offset by $13.0 million of proceeds from repayments of
investment and mortgage-backed securities.
Funds provided by financing activities totaled $47.2 million for the
nine months ended March 31, 2000. The primary financial source included a $77.4
million increase in other borrowings and a $184 increase in deposits, which were
partially offset by a $24.5 million decrease in FHLB advances, $3.8 million in
purchases of treasury stock, a $706 thousand decrease in advance payments by
borrowers for taxes and insurance and $1.4 million of cash dividends paid on the
Company's common stock. During the nine months ended March 31, 2000, the Company
repurchased 278,971 shares of common stock. Management believes that it
currently is maintaining adequate liquidity and continues to better match
funding sources with lending and investment opportunities.
The Company's primary sources of funds are deposits, amortization,
prepayments and maturities of existing loans, mortgage-backed securities and
investment securities, funds from operations, and funds obtained through
short-term borrowings. At March 31, 2000, the total approved loan commitments
outstanding amounted to $1.6 million. At the same date, commitments under unused
lines of credit amounted to $10.4 million and the unadvanced portion of
construction loans approximated $16.5 million. Certificates of deposit scheduled
to mature in one year or less at March 31, 2000, totaled $60.0 million.
Management believes that a significant portion of maturing deposits will remain
with the Company.
Historically, the Company used its sources of funds primarily to meet
its ongoing commitments to pay maturing savings certificates and savings
withdrawals, fund loan commitments and maintain a substantial portfolio of
investment securities. The Company has been able to generate sufficient cash
through the retail deposit market, its traditional funding source, and through
FHLB advances and other borrowings, to provide the cash utilized in investing
activities. The Company has access to the Federal Reserve Bank discount window.
Management believes that the Company currently has adequate liquidity available
to respond to liquidity demands.
On April 25, 2000, the Company's Board of Directors declared a cash
dividend of $0.16 per share payable May 18, 2000, to shareholders of record at
the close of business on May 8, 2000. Dividends are subject to determination and
declaration by the Board of Directors, which take into account the Company's
financial condition, statutory and regulatory restrictions, general economic
conditions and other factors. There can be no assurance that dividends will in
fact be paid on the Common Stock or that, if paid, such dividends will not be
reduced or eliminated in future periods.
As of March 31, 2000, WVS Financial Corp. exceeded all regulatory
capital requirements and maintained Tier I and total risk-based capital equal to
$26.5 million or 14.0% and $28.3 million or 15.0%, respectively, of total
risk-weighted assets, and Tier I leverage capital of $26.5 million or 6.71% of
average quarterly assets.
Nonperforming assets consist of nonaccrual loans and real estate owned.
A loan is placed on nonaccrual status when, in the judgment of management, the
probability of collection of interest is deemed insufficient to warrant further
accrual. When a loan is placed on nonaccrual status, previously accrued but
uncollected interest is deducted from interest income. The Company normally does
not accrue interest on loans past due 90 days or more, however, interest may be
accrued if management believes that it will collect on the loan.
15
The Company's nonperforming assets at March 31, 2000, totaled
approximately $4.3 million or 1.08% of total assets as compared to $765 thousand
or 0.22% of total assets as of June 30, 1999. Nonperforming assets at March 31,
2000, consisted of $4.1 million in commercial real estate loans, $86 thousand in
single-family loans, $86 thousand in consumer loans and $6 thousand in
commercial loans. During the quarter ended March 31, 2000, a commercial real
estate loan participation totaling $3.6 million, and approximately 74% of the
aggregate loan balance, was classified as nonaccrual. The participation loan is
secured by a first mortgage lien on real property located in Allegheny County
and the Company has commenced foreclosure and confession of judgment actions.
The Company continues to work with the borrower to work-out this credit.
Approximately $83 thousand of additional interest income would have been
recorded during the nine months ended March 31, 2000, if the Company's
nonaccrual and restructured loans had been current in accordance with their
original loan terms and outstanding throughout the nine months ended March 31,
2000.
FORWARD LOOKING STATEMENTS
When used in this Form 10-Q, or, in future filings by the Company with
the Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases "will likely
result", "are expected to", "will continue", "is anticipated", "estimate",
"project" or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties
including changes in economic conditions in the Company's market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area and competition that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made. The Company wishes to advise readers that the factors listed
above could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
The Company does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions which may be made to
forward-looking statements to reflect events or circumstances after the date of
statements or to reflect the occurrence of anticipated or unanticipated events.
16
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure is interest rate risk and,
to a lesser extent, liquidity risk. All of the Company's transactions are
denominated in U.S. dollars with no specific foreign exchange exposure. The
Savings Bank has no agricultural loan assets and therefore would not have a
specific exposure to changes in commodity prices. Any impacts that changes in
foreign exchange rates and commodity prices would have on interest rates are
assumed to be exogenous and will be analyzed on an ex-post basis.
--------
Interest rate risk ("IRR") is the exposure of a banking organization's
financial condition to adverse movements in interest rates. Accepting this risk
can be an important source of profitability and shareholder value, however
excessive levels of IRR can pose a significant threat to the Company's earnings
and capital base. Accordingly, effective risk management that maintains IRR at
prudent levels is essential to the Company's safety and soundness.
Evaluating a financial institution's exposure to changes in interest
rates includes assessing both the adequacy of the management process used to
control IRR and the organization's quantitative level of exposure. When
assessing the IRR management process, the Company seeks to ensure that
appropriate policies, procedures, management information systems and internal
controls are in place to maintain IRR at prudent levels with consistency and
continuity. Evaluating the quantitative level of IRR exposure requires the
Company to assess the existing and potential future effects of changes in
interest rates on its consolidated financial condition, including capital
adequacy, earnings, liquidity, and, where appropriate, asset quality.
The Federal Reserve Board, together with the Office of the Comptroller
of the Currency and the Federal Deposit Insurance Corporation, adopted a Joint
Agency Policy Statement on Interest Rate Risk, effective June 26, 1996. The
policy statement provides guidance to examiners and bankers on sound practices
for managing interest rate risk, which will form the basis for ongoing
evaluation of the adequacy of interest rate risk management at supervised
institutions. The policy statement also outlines fundamental elements of sound
management that have been identified in prior Federal Reserve guidance and
discusses the importance of these elements in the context of managing interest
rate risk. Specifically, the guidance emphasizes the need for active board of
director and senior management oversight and a comprehensive risk-management
process that effectively identifies, measures, and controls interest rate risk.
Financial institutions derive their income primarily from the excess of interest
collected over interest paid. The rates of interest an institution earns on its
assets and owes on its liabilities generally are established contractually for a
period of time. Since market interest rates change over time, an institution is
exposed to lower profit margins (or losses) if it cannot adapt to interest rate
changes. For example, assume that an institution's assets carry intermediate- or
long-term fixed rates and that those assets were funded with short-term
liabilities. If market interest rates rise by the time the short-term
liabilities must be refinanced, the increase in the institution's interest
expense on its liabilities may not be sufficiently offset if assets continue to
earn at the long-term fixed rates. Accordingly, an institution's profits could
decrease on existing assets because the institution will either have lower net
interest income or, possibly, net interest expense. Similar risks exist when
assets are subject to contractual interest rate ceilings, or rate sensitive
assets are funded by longer-term, fixed-rate liabilities in a decreasing-rate
environment.
An institution may use several techniques to minimize interest rate
risk. One approach used by the Company is to periodically analyze its assets and
liabilities and make future financing and investment decisions based on payment
streams, interest rates, contractual maturities, and estimated sensitivity to
actual or potential changes in market interest rates. Such activities fall under
the broad definition of asset/liability management. The Company's primary
asset/liability management technique is the monitoring of the Company's
asset/liability gap which was discussed in detail under "Asset and Liability
Management" commencing on page 11.
17
An institution could also manage interest rate risk by selling existing
assets, repaying certain liabilities or matching repricing periods for new
assets and liabilities (for example, by shortening terms of new loans or
investments). A large portion of an institution's liabilities may be short-term
or due on demand, while most of its assets may be invested in long-term loans or
investments. Accordingly, the Company seeks to have in place sources of cash to
meet short-term demands. These funds can be obtained by increasing deposits,
borrowing, or selling assets. Also, FHLB advances and wholesale borrowings have
become increasingly important sources of liquidity for the Company. Financial
institutions are also subject to prepayment risk in falling rate environments.
For example, mortgage loans and other financial assets may be prepaid by a
debtor so that the debtor may refund its obligations at new, lower rates.
Prepayments of assets carrying higher rates reduce the Company's interest income
and overall asset yields.
An institution might also invest in more complex financial instruments
intended to hedge, or otherwise change the interest rate risk of existing
assets, liabilities, or anticipated transactions. Interest rate swaps, futures
contracts, options on futures, and other such derivative financial instruments
often are used for this purpose. Because these instruments are sensitive to
interest rate changes, they require management expertise to be effective. The
Company has not purchased derivative financial instruments in the past and does
not presently intend to purchase such instruments in the near future.
The following table provides information about the Company's financial
instruments that are sensitive to changes in interest rates as of March 31,
2000, based on the information and assumptions in the notes. The Company's
assumptions are based on statistical data provided by a federal regulatory
agency in the Company's market area, and are believed to be reasonable. The
Company had no derivative financial instruments or trading portfolio as of March
31, 2000. The expected maturity date values for loans receivable,
mortgage-backed securities, and investment securities were calculated by
adjusting the instrument's contractual maturity date for expectations of
prepayments. Similarly, expected maturity date values for interest-bearing core
deposits were calculated based upon estimates of the period over which the
deposits would be outstanding. With respect to the Company's adjustable rate
instruments, expected maturity date values were measured by adjusting the
instrument's contractual maturity date for expectations of prepayments.
Substantially all of the Company's investment securities portfolio is comprised
of callable government agency securities. From a risk management perspective,
the Company believes that repricing dates, as opposed to expected maturity
dates, may be a more relevant metric in analyzing the value of such instruments.
Company borrowings were tabulated by contractual maturity dates and without
regard to any conversion or repricing dates.
18
EXPECTED MATURITY DATE-QUARTER ENDED MARCH 31,
------------------------------------------------------------
There- Fair
2001 2002 2003 2004 2005 after Total Value
---- ---- ---- ---- ---- ----- ----- -----
ON-BALANCE SHEET FINANCIAL INSTRUMENTS
Interest-earning assets:
Loans receivable (1)(2)(3)(4)
Fixed rate $29,147 $16,446 $12,801 $11,552 $9,215 $59,650 $138,811 $138,106
Average interest rate 7.91% 7.62% 7.58% 7.57% 7.51% 7.43%
Adjustable rate 12,982 5,887 5,478 4,170 3,500 10,789 42,806 39,823
Average interest rate(5) 8.33% 6.67% 8.00% 8.01% 8.02% 7.85%
Mortgage-backed securities
Fixed rate --- 45 845 498 --- 58,547 59,935 57,357
Average interest rate 0.00% 8.00% 5.97% 6.11% 0.00% 6.93%
Adjustable rate --- --- --- --- --- 16,153 16,153 16,270
Average interest rate(6) 0.00% 0.00% 0.00% 0.00% 0.00% 7.16%
Investments(7) 6,299 --- --- --- --- 130,915 137,214 130,410
Average interest rate 6.85% 0.00% 0.00% 0.00% 0.00% 7.71%
Interest-bearing deposits 1,196 --- --- --- --- --- 1,196 1,196
Average interest rate 6.19% 0.00% 0.00% 0.00% 0.00% 0.00%
-------- ------- ------- ------ ------ ------- -------- --------
Total 49,624 22,378 19,124 16,220 12,715 276,054 396,115 383,162
Interest-bearing liabilities:
Interest-bearing deposits
and escrows(8)(9)(10) 88,251 21,429 21,429 9,075 9,075 24,462 173,721 173,274
Average interest rate 4.36% 3.45% 3.45% 3.41% 3.41% 2.11%
Borrowings
Fixed rate 105,585 --- --- --- --- 18,000 123,585 123,153
Average interest rate 6.08% 0.00% 0.00% 0.00% 0.00% 5.25%
Adjustable rate(11) 72,050 --- --- --- --- --- 72,050 72,028
Average interest rate 6.16% 0.00% 0.00% 0.00% 0.00% 0.00%
-------- ------- ------- ------ ------ ------- -------- --------
Total $265,886 $21,429 $21,429 $9,075 $9,075 $42,462 $369,356 $368,455
(1) Net of undisbursed loan proceeds and does not include net deferred loan
fees or the allowance for loan losses.
(2) For single-family residential loans, assumes annual amortization and
prepayment rate at 18% for adjustable rate loans, and 7% to 38% for fixed
rate loans. For multi-family residential loans and other loans, assumes
amortization and prepayment rate of 10%.
(3) For second mortgage loans, assumes annual amortization and prepayment rate
of 15%.
(4) Consumer loans assumes amortization and prepayment rate of 13%.
(5) Substantially all of the Company's adjustable rate loans reprice on an
annual basis based upon changes in the one-year constant maturity treasury
index with various market based annual and lifetime interest rate caps and
floors.
(6) Substantially all of the Company's adjustable rate mortgage-backed
securities reprice on a monthly basis based upon changes in the one month
LIBOR index with various lifetime caps and floors.
(7) Totals include the Company's investment in Federal Home Loan Bank stock.
(8) For regular savings accounts, assumes an annual decay rate of 17% for three
years or less, 16% for more than three through five years and 14% for more
than five years.
(9) For NOW accounts, assumes an annual decay rate of 37% for one year or less,
32% for more than one through three years and 17% for more than three
years.
(10) For money market deposit accounts, assumes an annual decay rate of 79% for
one year or less and 31% for more than one year.
(11) Includes a $50 million FHLB advance that reprices monthly based upon
changes in the one month LIBOR index.
19
The table below provides information about the Company's anticipated
transactions comprised of firm loan commitments and other commitments, including
undisbursed letters and lines of credit. The Company used no derivative
financial instruments to hedge such anticipated transactions as of March 31,
2000.
Anticipated Transactions
------------------------
Undisbursed construction and
land development loans
Fixed rate $6,261
8.27%
Adjustable rate $9,543
9.57%
Undisbursed lines of credit
Adjustable rate $10,384
9.05%
Loan origination commitments
Fixed rate $1,163
8.34%
Adjustable rate $479
8.14%
Letters of credit
Adjustable rate $44
12.00%
---------
$27,874
20
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
The Company is involved with various legal actions arising in the
ordinary course of business. Management believes the outcome of these
matters will have no material effect on the consolidated operations or
consolidated financial condition of WVS Financial Corp.
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
---------------------------------------------------
Not applicable.
ITEM 5. Other Information
-----------------
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) The following exhibit is filed as part of this form
10-Q, and this list includes the Exhibit Index.
Number Description Page
------ ----------- ----
27 Financial Data Schedule E-1
99 Independent Accountant's Report E-2
(b) The Company filed a Current Report on Form 8-K, dated January
27, 2000, reporting under Item 5 that the Company's Board of
Directors authorized the repurchase of up to 200,000 shares,
or approximately 6.76% of the Company's outstanding common
stock. Repurchases are authorized to be made during the next
twelve months as market conditions warrant. All repurchase
shares will be held as treasury stock and may be reserved for
issuance pursuant to the Company's stock benefit plans.
21
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, thereunto duly authorized.
WVS FINANCIAL CORP.
May 9, 2000 BY: /s/ David J. Bursic
-------------------
Date David J. Bursic
President and Chief Executive Officer
(Principal Executive and Financial Officer)