SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-22608
FFLC BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 59-3204891
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
800 North Boulevard West, Post Office Box 490420,
Leesburg, Florida 34749-0420
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (352) 787-3311
Former Name, Former Address and Former Fiscal Year, if Changed Since 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 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 90 days. Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common stock, 2,310,955 shares outstanding
par value $.01 per share at August 5, 1997
FFLC BANCORP, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
at June 30, 1997 (unaudited) and at December 31, 1996....................
Condensed Consolidated Statements of Income -
Three and Six months ended June 30, 1997 and 1996 (unaudited)............
Condensed Consolidated Statement of Stockholders' Equity -
Six months ended June 30, 1997 (unaudited)...............................
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1997 and 1996 (unaudited)......................
Notes to Condensed Consolidated Financial Statements (unaudited)...........
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................
Part II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................
Item 2. Changes in Securities...............................................
Item 3. Default upon Senior Securities......................................
Item 4. Submission of Matters to a Vote of Security Holders.................
Item 5. Other Information...................................................
Item 6. Exhibits and Reports on Form 8-K....................................
SIGNATURES......................................................................
FFLC BANCORP, INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
($ in thousands)
At At
June 30, December 31,
1997 1996
--------- ---------
Assets (unaudited)
Cash and due from banks ...................................................... $ 5,873 6,080
Interest-bearing deposits .................................................... 11,019 4,077
--------- ---------
Cash and cash equivalents ........................................ 16,892 10,157
Investment securities held to maturity, at cost
(market value of $3,160 in 1997 and $3,271 in 1996) ...................... 3,127 3,239
Investment securities available for sale, at market .......................... 31,221 29,593
Mortgage-backed and related securities held to maturity, at cost (market value
of $38,724 in 1997 and $47,396 in 1996) .................................. 38,302 46,892
Mortgage-backed and related securities available for sale, at market ......... 14,632 18,844
Loans receivable, net of allowance for loan losses of $1,193 in 1997
and $1,063 in 1996 ....................................................... 272,439 227,948
Accrued interest receivable:
Investment securities .................................................... 581 577
Mortgage-backed securities ............................................... 217 243
Loans receivable ......................................................... 1,437 1,199
Premises and equipment, net .................................................. 5,291 5,144
Foreclosed real estate ....................................................... 234 361
Real estate held for development ............................................. 122 122
Restricted securities - Federal Home Loan Bank stock, at cost ................ 2,304 1,939
Other assets ................................................................. 298 184
--------- ---------
Total ............................................................ $ 387,097 346,442
========= =======
Liabilities and Stockholders' Equity
Liabilities:
NOW and money market accounts ............................................ 47,663 43,306
Passbook and statement savings accounts .................................. 24,551 27,412
Certificates ............................................................. 229,641 211,946
--------- ---------
Total deposits ................................................... 301,855 282,664
Advances from Federal Home Loan Bank ......................................... 20,000 150
Securities sold under agreements to repurchase ............................... 10,008 8,048
Deferred income taxes ........................................................ 829 930
Accrued expenses and other liabilities ....................................... 2,219 1,024
--------- ---------
Total liabilities ................................................ 334,911 292,816
--------- ---------
FFLC BANCORP, INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
($ in thousands)
At At
June 30, December 31,
1997 1996
--------- ---------
(unaudited)
Stockholders' equity:
Preferred stock .......................................................... -- --
Common stock ............................................................. 28 28
Additional paid-in-capital ............................................... 27,800 27,386
Retained income .......................................................... 35,295 33,962
Unrealized loss on securities available for sale, net of tax
of $114 in 1997 and $116 in 1996 ..................................... (189) (193)
Treasury stock, at cost .................................................. (9,644) (6,295)
Stock held by Incentive Plan Trusts ...................................... (1,104) (1,262)
--------- ---------
Total stockholders' equity ....................................... 52,186 53,626
--------- ---------
Total ............................................................ $ 387,097 346,442
========= =======
See accompanying Notes to Condensed Consolidated Financial Statements.
FFLC BANCORP, INC.
Condensed Consolidated Statements of Income
($ in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Interest income:
Loans receivable .......................... $ 5,332 4,039 10,171 7,980
Mortgage-backed securities ................ 912 1,289 1,920 2,707
Investment securities and time deposits ... 636 611 1,272 1,198
---------- ---------- ---------- ----------
Total interest income ............. 6,880 5,939 13,363 11,885
---------- ---------- ---------- ----------
Interest expense:
Deposits .................................. 3,511 3,165 6,821 6,378
Borrowed funds ............................ 230 3 359 5
---------- ---------- ---------- ----------
Total interest expense ............ 3,741 3,168 7,180 6,383
---------- ---------- ---------- ----------
Net interest income ........................... 3,139 2,771 6,183 5,502
Provision for loan losses ..................... 70 15 138 29
---------- ---------- ---------- ----------
Net interest income after provision
for loan losses ............... 3,069 2,756 6,045 5,473
---------- ---------- ---------- ----------
Noninterest income:
Deposit account fees ...................... 106 116 225 227
Other service charges and fees ............ 92 66 163 129
Other ..................................... 18 13 26 21
---------- ---------- ---------- ----------
Total noninterest income .......... 216 195 414 377
---------- ---------- ---------- ----------
FFLC BANCORP, INC.
Condensed Consolidated Statements of Income
($ in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Noninterest expense:
Salaries and employee benefits ............ 1,180 938 2,162 1,821
Occupancy expense ......................... 226 203 445 398
Deposit insurance premiums ................ 36 154 72 306
Advertising and promotion ................. 65 25 99 46
Data processing expense ................... 107 91 220 185
Professional services ..................... 57 56 117 115
Other ..................................... 212 169 399 328
---------- ---------- ---------- ----------
Total noninterest expense ......... 1,883 1,636 3,514 3,199
---------- ---------- ---------- ----------
Income before income taxes .................... 1,402 1,315 2,945 2,651
Income taxes .................................. 500 519 1,070 1,044
---------- ---------- ---------- ----------
Net income .................................... $ 902 796 1,875 1,607
========== ========== ========== ==========
Net income per share of common stock .......... $ .39 .31 .79 .62
========== ========== ========== ==========
Dividends per share of common stock ........... $ .12 .10 .24 .18
========== ========== ========== ==========
Weighted average number of shares outstanding . 2,337,074 2,601,294 2,377,762 2,597,533
========== ========== ========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements.
FFLC BANCORP, INC.
Condensed Consolidated Statement of Stockholders' Equity
Six Months Ended June 30, 1997
($ in thousands, except per share amounts)
Unrealized Stock
Loss on Held by
Additional Securities Incentive Total
Common Paid-In Retained Available Treasury Plan Stockholders'
Stock Capital Income For Sale Stock Trusts Equity
----- ------- ------ -------- ----- ------ ------
Balance at December 31, 1996... $ 28 27,386 33,962 (193) (6,295) (1,262) 53,626
Net proceeds from the issuance
of 16,740 shares of common
stock (unaudited) ........ -- 173 -- -- -- -- 173
Net income (unaudited) ........ -- -- 1,875 -- -- -- 1,875
Dividends paid, net of $30 of
dividends on ESOP shares
recorded as compensation
expense (unaudited) ...... -- -- (542) -- -- -- (542)
Purchase of treasury stock,
136,842 shares (unaudited) -- -- -- -- (3,349) -- (3,349)
Shares committed to
participants in
incentive plans
(unaudited) .............. -- 241 -- -- -- 158 399
Change in unrealized
loss on securities
available for sale,
net of income
taxes of $2
(unaudited) .............. -- -- -- 4 -- -- 4
------- ------- ------- ------- ------- -------
Balance at June 30, 1997
(unaudited) .............. $ 28 27,800 35,295 (189) (9,644) (1,104) 52,186
======= ======= ======= ======= ======= ======= =======
See accompanying Notes to Condensed Consolidated Financial Statements.
FFLC BANCORP, INC.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
Six Months Ended
June 30,
1997 1996
-------- --------
(unaudited)
Cash flows from operating activities:
Net income .......................................................... $ 1,875 1,607
Adjustments to reconcile net income
to net cash provided by operations:
Provision for loan losses ................................... 138 29
Depreciation ................................................ 192 161
Credit for deferred income taxes ............................ (103) (50)
Shares committed and dividends to incentive plan participants 429 466
Amortization of premiums or discounts
on investment and mortgage-backed securities ............ (27) (54)
Accretion of deferred loan fees and unearned income ......... 3 (11)
Deferral of net loan fees collected, net of costs deferred .. 97 53
(Gain) loss on sale of foreclosed real estate ............... (11) 2
Increase in accrued interest receivable ..................... (216) (113)
Increase in other assets .................................... (114) (75)
Increase (decrease) in accrued expenses and other liabilities 1,195 (212)
-------- --------
Net cash provided by operating activities ........... 3,458 1,803
-------- --------
Cash flows from investing activities:
Proceeds from maturities of investment securities held to maturity .. 111 96
Proceeds from maturities of investment securities available for sale 4,647 3,446
Purchase of investment securities available for sale ................ (6,230) (7,923)
Purchase of mortgage-backed securities available for sale ........... -- (7,577)
Principal repayments on mortgage-backed securities
held to maturity ................................................ 8,606 16,158
Principal repayments on mortgage-backed securities
available for sale .............................................. 4,185 2,264
Loan disbursements .................................................. (66,175) (41,196)
Principal repayments on loans ....................................... 21,342 23,883
Purchase of premises and equipment, net ............................. (339) (458)
Purchase of Federal Home Loan Bank stock ............................ (365) (11)
Proceeds from sales of foreclosed real estate ....................... 242 13
-------- --------
Net cash used in investing activities ............... (33,976) (11,305)
-------- --------
(continued)
FFLC BANCORP, INC.
Condensed Consolidated Statements of Cash Flows, Continued
($ in thousands)
Six Months Ended
June 30,
1997 1996
-------- --------
(unaudited)
Cash flows from financing activities:
Net increase in noninterest bearing demand, savings, NOW and
money market accounts .................................... 1,496 416
Net increase in certificate accounts ......................... 17,695 5,185
Increase in advances from Federal Home Loan Bank ............. 19,850 --
Net increase in securities sold under agreements to repurchase 1,960 --
Stock options exercised ...................................... 173 43
Purchase of treasury stock ................................... (3,349) (413)
Cash dividends paid .......................................... (572) (446)
-------- --------
Net cash provided by financing activities ........ 37,253 4,785
-------- --------
Net increase (decrease) in cash and cash equivalents ............. 6,735 (4,717)
Cash and cash equivalents at beginning of period ................. 10,157 13,929
Cash and cash equivalents at end of period ....................... $ 16,892 9,212
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ................................................. $ 7,130 6,245
======== ========
Income taxes ............................................. $ 1,055 985
======== ========
Noncash investing and financing activities:
Increase (decrease) in equity valuation allowance
for market value of investment and mortgage-
backed securities available for sale ................. $ 4 (213)
======== ========
Transfer from loans to foreclosed real estate ............ $ 158 55
======== ========
Loans originated on sales of foreclosed real estate ...... $ 54 --
======== ========
Loans funded by and sold to correspondent ................ $ 968 1,967
======== ========
See accompanying Notes to Condensed Consolidated Financial Statements.
FFLC BANCORP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Basis of Presentation. In the opinion of the management of FFLC Bancorp,
Inc., the accompanying condensed consolidated financial statements contain
all adjustments (consisting of normal recurring accruals) necessary to
present fairly the financial position at June 30, 1997 and the results of
operations for the three- and six-month periods ended June 30, 1997 and
1996 and cash flows for the six-month periods ended June 30, 1997 and 1996.
The results of operations and other data for the three and six months ended
June 30, 1997, are not necessarily indicative of results that may be
expected for the year ending December 31, 1997.
The condensed consolidated financial statements include the accounts of
FFLC Bancorp, Inc. (the "Holding Company") and its wholly-owned subsidiary,
First Federal Savings Bank of Lake County (the "Savings Bank") (together,
the "Company"). All significant intercompany accounts and transactions have
been eliminated in consolidation.
2. Loan Impairment and Loan Losses. The Company prepares a quarterly review of
the adequacy of the allowance for loan losses to also identify and value
impaired loans in accordance with guidance in the Statements of Financial
Accounting Standards No. 114 and 118. No impaired loans were identified by
the Company during the six months ended June 30, 1997 or 1996.
An analysis of the change in the allowance for loan losses was as follows
(in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1997 1996 1997 1996
------ ------ ------ ------
Beginning balance ................ $1,123 988 1,063 977
Provision for loan losses ........ 70 15 138 29
Loans charged-off ................ -- -- (8) (3)
------ ------ ------ ------
Ending balance ................... $1,193 1,003 1,193 1,003
====== ====== ====== ======
3. Impact of New Accounting Issues. In June 1996, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS No. 125"). That Statement provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. That Statement also provides
consistent standards for distinguishing transfers of financial assets that
are sales from transfers that are secured borrowings. SFAS No. 125 is
effective for transfers and servicing of financial assets as well as
extinguishments of liabilities occurring in 1997. The adoption of SFAS No.
125 had no significant effect on the Company's financial position at June
30, 1997 or result of operations for the six months then ended.
FFLC BANCORP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
4. Future Accounting Requirements. The FASB has issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). This
Statement specifies the computation, presentation and disclosure
requirements for net income per share for entities with publicly-held common
stock. SFAS 128 is effective for both interim and annual periods ending
after December 15, 1997 and upon adoption, all prior period net income per
share data presented will be restated to conform with SFAS 128.
5. Per Share Amounts. Income per share of common stock has been determined by
dividing net income for the period by the weighted average number of shares
outstanding. Shares of common stock purchased by the ESOP and RRP incentive
plans are only considered outstanding when the shares are released for
allocation to participants. Stock options are regarded as common stock
equivalents and are therefore considered in both primary and fully diluted
income per share calculations. Common stock equivalents are computed using
the treasury stock method. The following table presents the calculation of
income per share:
FFLC BANCORP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Weighted average shares of common stock issued
and outstanding before adjustments for ESOP,
RRP and common stock options ......................... 2,334,176 2,637,155 2,375,760 2,638,200
Adjustment to reflect the effect of unallocated
ESOP and RRP shares .................................. (117,723) (152,643) (121,575) (156,803)
---------- ---------- ---------- ----------
Weighted average shares outstanding before
adjustments for common stock options ................. 2,216,453 2,484,512 2,254,185 2,481,397
Shares assumed outstanding to reflect the dilutive
effect of common stock options ....................... 120,621 116,782 123,577 116,136
---------- ---------- ---------- ----------
Weighted average shares, including common stock
equivalent for primary income per share .............. 2,337,074 2,601,294 2,377,762 2,597,533
========== ========== ========== ==========
Primary income per share ................................ $ .39 .31 .79 .62
========== ========== ========== ==========
Total weighted average common shares and
equivalents outstanding for primary income
per share computation ................................ 2,337,074 2,601,294 2,377,762 2,597,533
Additional dilutive shares using the higher of the end
of period market value versus average market value
for the period utilizing th treasury stock method
regarding stock options .............................. 6,391 670 6,548 1,316
---------- ---------- ---------- ----------
Weighted average common shares and equivalents
outstanding for fully diluted income per share ....... 2,343,465 2,601,964 2,384,310 2,598,849
========== ========== ========== ==========
Fully diluted income per share .......................... $ .38 .31 .79 .62
========== ========== ========== ==========
FFLC BANCORP, INC.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
FFLC Bancorp, Inc. (the "Holding Company") was formed as the holding company
for First Federal Savings Bank of Lake County (the "Savings Bank") (together
the "Company") in connection with the Savings Bank's conversion from a
federally chartered mutual savings and loan association to a federally
chartered stock savings bank on January 4, 1994. The Company's consolidated
results of operations are primarily those of the Savings Bank.
The Savings Bank's principal business continues to be attracting retail
deposits from the general public and investing those deposits, together with
principal repayments on loans and investments and funds generated from
operations, primarily in mortgage loans secured by one-to-four-family
owner-occupied homes, mortgage-backed securities and, to a lesser extent,
construction loans, consumer and other loans, and multi-family residential
mortgage loans. In addition, the Savings Bank holds investments permitted by
federal laws and regulations including securities issued by the U.S.
Government and agencies thereof. The Savings Bank's revenues are derived
principally from interest on its mortgage loan and mortgage-backed
securities portfolios and interest and dividends on its investment
securities. The Savings Bank is a member of the Federal Home Loan Bank
("FHLB") system and its deposits are insured to the applicable limits by the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation (the "FDIC"). The Savings Bank is subject to regulation by the
Office of Thrift Supervision (the "OTS") as its chartering agency, and the
FDIC as its deposit insurer.
The Savings Bank has 9 full-service locations in Lake and Sumter Counties,
Florida.
The Savings Bank's results of operations are dependent primarily on net
interest income, which is the difference between the interest income earned
primarily on its loans and investment and mortgage-backed securities
portfolios, and its cost of funds, consisting of the interest paid on its
deposits and borrowings. The Savings Bank's operating results are also
affected, to a lesser extent, by fee income and by gains or losses on the
sale of loans, investment and mortgage-backed securities available for sale
and foreclosed real estate. The Savings Bank's operating expenses consist
primarily of salaries and employee benefits, occupancy expenses, deposit
insurance premiums and other general and administrative expenses. The
Savings Bank's results of operations are also significantly affected by
general economic and competitive conditions, particularly changes in market
interest rates, government policies, and actions of regulatory authorities.
FFLC BANCORP, INC.
Liquidity and Capital Resources
The Company's most liquid assets are cash, amounts due from banks and
interest-bearing deposits. The levels of these assets are dependent on the
Company's lending, investing, operating, and deposit activities during any
given period. At June 30, 1997, cash, amounts due from banks and
interest-bearing deposits, totaled $16.9 million.
The Savings Bank is required to maintain an average daily balance of
specified liquid assets equal to a monthly average of not less than a
specified percentage of its net withdrawable deposit accounts plus
short-term borrowings. This liquidity requirement is currently 5% but may be
changed from time to time by the OTS to any amount within the range of 4% to
10% depending upon economic conditions and the savings flows of member
institutions. OTS regulations also require each member savings institution
to maintain an average daily balance of short-term liquid assets at a
specified percentage (currently 1%) of the total of its net withdrawable
deposits and borrowed funds payable in one year or less. Monetary penalties
may be imposed for failure to meet these liquidity requirements. The Savings
Bank's liquidity and short-term liquidity ratios for June 30, 1997 were
13.2% and 4.7%, respectively, which exceeded the requirements. The Savings
Bank has never been subject to monetary penalties for failure to meet its
liquidity requirements.
The Savings Bank's primary sources of funds include proceeds from payments
and prepayments on loans and mortgage-backed securities, proceeds from
maturities of investment securities, and increases in deposits and
borrowings. While maturities and scheduled amortization of loans,
mortgage-backed and investment securities are predictable sources of funds,
deposit inflows and mortgage and mortgage-backed securities prepayments are
greatly influenced by local conditions, general interest rates, and
regulatory changes.
At June 30, 1997, the Savings Bank had outstanding commitments to originate
$18.7 million of loans and to fund the undisbursed portion of loans in
process of approximately $8.0 million. The Savings Bank believes that it
will have sufficient funds available to meet its commitments. At June 30,
1997, certificates of deposit which were scheduled to mature in one year or
less totaled $139.3 million. Management believes, based on past experience,
that a significant portion of those funds will remain with the Savings Bank.
The Savings Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory-and possibly additional
discretionary-actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Savings Bank must meet specific capital guidelines that involve
quantitative measures of the Savings Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Savings Bank's capital amounts and classification are also subject to
qualitative judgements by the regulators about components, risk weightings,
and other factors.
FFLC BANCORP, INC.
Quantitative measures established by regulation to ensure capital adequacy
require the Savings Bank to maintain minimum amounts (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined). Management believes, as of June 30, 1997,
that the Savings Bank meets all capital adequacy requirements to which it is
subject.
As of June 30, 1997, the most recent notification from the OTS categorized
the Savings Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Savings
Bank must maintain minimum tangible, Tier I (core), Tier I (risk-based) and
total risk-based capital ratios as set forth in the table. There are no
conditions or events since that notification that management believes have
changed the institution's category.
FFLC BANCORP, INC.
The Savings Bank's actual capital amounts and ratios at June 30, 1997 are
also presented in the table.
To Be Well
Minimum Capitalized
For Capital For Prompt
Adequacy Corrective Action
Actual Purposes Provisions
Ratio Amount Ratio Amount Ratio Amount
----- ------ ----- ------ ----- ------
($ in thousands)
Stockholders' equity,
and ratio to total
assets 10.9% $ 42,096
Less: investment in
nonincludable
subsidiary (202)
Add back: unrealized loss on
available-for-sale
securities 131
---------
Tangible capital,
and ratio to adjusted
total assets 10.9% $ 42,025 1.5% $ 5,792
========= ========
Tier 1 (core) capital, and
ratio to adjusted total
assets 10.9% $ 42,025 3.0% $ 11,583 5.0% $ 19,306
======= ======== ========
Tier 1 capital, and ratio
to risk-weighted assets 22.5% 42,025 4.0% $ 7,484 6.0% $ 11,226
========= ======== ========
Tier 2 capital (allowance for
loan losses) 1,193
---------
Total risk-based capital,
and ratio to risk-
weighted assets 23.1% $ 43,218 8.0% $ 14,968 10.0% $ 18,710
========= ======== ========
Total assets $ 386,181
=========
Adjusted total assets $ 386,110
=========
Risk-weighted assets $ 187,096
=========
FFLC BANCORP, INC.
During the six months ended June 30, 1997, the Savings Bank declared and
paid a cash dividend of $1.8 million to the Holding Company.
The following table shows selected ratios for the periods ended or at the
dates indicated:
Six Months Six Months
Ended Year Ended Ended
June 30, December 31, June 30,
1997 1996 1996
------------ -------------- ----------
Average equity as a percentage
of average assets .......................... 14.53% 16.62% 17.02%
Total equity to total assets at end of period . 13.48% 15.48% 16.98%
Return on average assets ...................... 1.04% .65% .98%
Return on average equity ...................... 7.13% 3.94% 5.73%
Noninterest expense to average assets ......... 1.94% 2.49% 1.94%
Nonperforming assets to total assets
at end of period ........................... .19% .30% .13%
Operating efficiency ratio .................... 53.27% 68.77% 54.40%
At At At
June 30, December 31, June 30,
1997 1996 1996
--------- ------------- --------
Weighted average interest rates:
Interest-earning assets:
Loans receivable 8.18% 8.20% 8.20%
Mortgage-backed securities 6.60% 6.45% 6.26%
Investment securities and other interest-
earning assets 6.13% 6.19% 5.89%
Total interest-earning assets 7.69% 7.62% 7.43%
Interest-bearing liabilities:
Deposits 4.84% 4.72% 4.70%
Borrowed funds 6.02% 7.17% 7.17%
Total interest-bearing liabilities 4.95% 4.74% 4.70%
Interest-rate spread 2.74% 2.87% 2.73%
FFLC BANCORP, INC.
Change in Financial Condition
Total assets increased $40.7 million or 11.7%, from $346.4 million at
December 31, 1996 to $387.1 million at June 30, 1997, primarily as a result
of an increase in loans receivable of $44.5 million, partially offset by
decrease in mortgage-backed securities of $12.8 million. Customer deposits
increased $19.2 million from $282.7 million at December 31, 1996 to $301.9
million at June 30, 1997. Advances from Federal Home Loan Bank increased
$19.8 million from $150,000 at December 31, 1996 to $20.0 million at June 30,
1997. The $1.4 million net decrease in stockholders' equity during the six
months ended June 30, 1997 resulted from the repurchases of shares of the
Company's stock of $3.3 million and dividends paid of $542,000, partially
offset by net income of $1.9 million, credits to equity totaling $399,000
related to the stock incentive plans, proceeds of $173,000 from stock options
exercised and a $4,000 decrease in unrealized loss on securities available
for sale, net of tax effect.
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest income; (iv) interest-rate spread; and (v) net
interest margin.
Three Months Ended June 30,
--------------------------------------------------------------------------------
1997 1996
---------------------------------------- -------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
($ in Thousands)
Interest-earning assets:
Loans receivable (1) .................. $254,484 5,332 8.38% $194,604 4,039 8.30%
Mortgage-backed securities ............ 56,624 912 6.44 83,098 1,289 6.21
Investment securities and other
interest-earning assets (2) ....... 42,240 636 6.02 42,043 611 5.81
-------- -------- -------- ------
Total interest-earning assets ..... 353,348 6,880 7.79 319,745 5,939 7.43
-------- ------
Noninterest-earning assets ................ 20,982 11,867
-------- --------
Total assets ...................... $374,330 $331,612
======== ========
Interest-bearing liabilities:
Deposits .............................. 295,650 3,511 4.75 271,093 3,165 4.67
Borrowed funds ........................ 15,611 230 5.89 150 3 8.00
-------- -------- -------- ------
Total interest-bearing liabilities 311,261 3,741 4.81 271,243 3,168 4.67
-------- ------
Noninterest-bearing liabilities ........... 10,828 4,011
Stockholders' equity ...................... 52,241 56,358
-------- --------
Total liabilities and
stockholders' equity .......... $374,330 $331,612
======== ========
Net interest income ....................... $ 3,139 $ 2,771
======== ========
Interest rate spread (3) .................. 2.98% 2.76%
==== ====
Net average interest-earning assets,
net interest margin (4) ............... $ 42,087 3.55% $ 48,502 3.47%
========= === ======== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities .. 1.14 1.18
========= ========
FFLC BANCORP, INC.
(1) Includes nonaccrual loans.
(2) Includes interest-bearing deposits and FHLB stock.
(3) Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(4) Net interest margin is net interest income divided by average
interest-earning assets.
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of FFLC Bancorp from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest and dividend income; (iv) interest-rate spread;
and (v) net interest margin.
Six Months Ended June 30,
---------------------------------------------------------------------------
1997 1996
------------------------------------ ------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
($ in Thousands)
Interest-earning assets:
Loans receivable (1) ......................... $244,090 10,171 8.33% $190,466 7,980 8.38%
Mortgage-backed securities ................... 59,883 1,920 6.41 86,807 2,707 6.24
Investment securities and other
interest-earning assets (2) .............. 41,991 1,272 6.06 40,698 1,198 5.89
-------- ------- -------- ------
Total interest-earning assets ............ 345,964 13,363 7.73 317,971 11,885 7.48
------- ------
Noninterest-earning assets ....................... 16,111 11,457
-------- --------
Total assets ............................. $362,075 $329,428
Interest-bearing liabilities:
Deposits ..................................... 290,541 6,821 4.70 269,881 6,378 4.73
Borrowed funds ............................... 12,459 359 5.76 150 5 6.67
-------- ------- -------- ------
Total interest-bearing liabilities ....... 303,000 7,180 4.74 270,031 6,383 4.73
------- ------
Noninterest-bearing liabilities .................. 6,455 3,335
Stockholders' equity ............................. 52,620 56,062
-------- --------
Total liabilities and stockholders' equity $362,075 $329,428
======== ========
Net interest income .............................. $ 6,183 $ 5,502
======== ========
Interest rate spread (3) ......................... 2.99% 2.75%
==== ====
Net average interest-earning assets,
net interest margin (4) ...................... $ 42,964 3.57% $ 47,940 3.46%
======== ==== ======== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities ......... 1.14 1.18
======== ========
(1) Includes nonaccrual loans.
(2) Includes interest-bearing deposits and FHLB stock.
(3) Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(4) Net interest margin is net interest income divided by average
interest-earning assets.
FFLC BANCORP, INC.
Comparison of the Three-Month Periods Ended June 30, 1997 and 1996
Results of Operations
General Operating Results. Net income for the three-month period ended June 30,
1997 was $902,000, or $.39 per share, compared to $796,000, or $.31 per
share, for the comparable period in 1996. The increase in net income was
primarily a result of an increase of $368,000 in net interest income which
was partially offset by a $247,000 increase in noninterest expense and an
increase of $55,000 in the provision for loan losses.
Interest Income. Interest income increased $941,000 or 15.8%, from $5.9 million
for the three-month period ended June 30, 1996 to $6.9 million for the
three-month period ended June 30, 1997. The increase was due to a 10.5%
increase in average interest-earning assets outstanding for the three months
ended June 30, 1997 compared to the 1996 period, coupled with an increase in
the average yield on interest-earning assets from 7.43% for the three months
ended June 30, 1996, to 7.79% for the three months ended June 30, 1997.
Interest Expense. Interest expense increased $573,000, from $3.2 million for the
three-month period ended June 30, 1996 to $3.7 million for the three-month
period ended June 30, 1997. The increase was due to a 14.8% increase in
average interest-bearing liabilities outstanding during the three months
ended June 30, 1997 compared to the 1996 period, coupled with an increase in
the weighted average rate paid on interest-bearing liabilities from 4.67%
during the 1996 period to 4.81% during the 1997 period.
Noninterest Expense. Noninterest expense increased by $247,000, or 15.1% from
$1.6 million for the three-month period ended June 30, 1996 to $1.9 million
for the three-month period ended June 30, 1997. The increase was due to
increases in salaries and employee benefits of $242,000, occupancy expense
of $23,000, advertising and promotion expense of $40,000 and other expenses
of $43,000. These increases were partially offset by a decrease in deposit
insurance premiums of $118,000 due to a decrease in the assessment rate paid
on deposits from 23.0 cents per $100 in 1996 to 6.50 cents per $100 in 1997.
Income Tax Provision. The income tax provision decreased from $519,000 for the
three-month period ended June 30, 1996 (an effective tax rate of 39.5%) to
$500,000 (an effective tax rate of 35.7%) for the corresponding period in
1997.
FFLC BANCORP, INC.
Comparison of the Six-Month Periods Ended June 30, 1997 and 1996
Results of Operations
General Operating Results. Net income for the six-month period ended June 30,
1997 was $1.9 million, or $.79 per share, compared to $1.6 million, or $.62
per share, for the comparable period in 1996. The increase in net income was
primarily the result of an increase in net interest income of $681,000,
partially offset by an increase in noninterest expense of $315,000 and an
increase in provision for loan losses of $109,000.
Interest Income. Interest income increased $1.5 million, or 12.4% from $11.9
million for the six-month period ended June 30, 1996 to $13.4 million for
the comparable period in 1997. The increase was due to an 8.8% increase in
average interest-earning assets outstanding for the six months ended June
30, 1997 compared to the 1996 period, coupled with an increase in the
average yield earned on interest-earning assets from 7.48% for the six
months ended June 30, 1996, to 7.73% for the six months ended June 30, 1997.
Interest Expense. Interest expense increased $797,000, or 12.5% from $6.4
million for the six-month period ended June 30, 1996 to $7.2 million for the
six-month period ended June 30, 1997. The increase was due to a 12.2%
increase in average interest-bearing liabilities outstanding during the six
months ended June 30, 1997 compared to the 1996 period.
Noninterest Expense. Noninterest expense increased by $315,000, or 9.8%, from
$3.2 million for the six-month period ended June 30, 1996 to $3.5 million
for the six-month period ended June 30, 1997. The increase was due to
increases in salaries and employee benefits of $341,000, occupancy expense
of $47,000, advertising and promotion expense of $53,000 and other expenses
of $71,000. These increases were partially offset by a decrease in deposit
insurance premiums of $234,000 due to a decrease in the assessment rate paid
on deposits from 23.0 cents per $100 in 1996, to 6.49 cents per $100 in
1997.
Income Tax Provision. The income tax provision increased from $1.0 million for
the six-month period ended June 30, 1996 (an effective tax rate of 39.4%) to
$1.1 million (an effective tax rate of 36.3%) for the corresponding period
for 1997.
FFLC BANCORP, INC.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which FFLC Bancorp, Inc.
or its subsidiary is a party or to which any of their property is subject.
Item 2. Changes in Securities
Not applicable
Item 3. Default upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders (the "Annual Meeting") of FFLC Bancorp,
Inc. was held on May 8, 1997, to consider the election of three directors
each for a term of three years and the ratification of the appointment of
the Company's independent auditors for the year ending December 31, 1997.
At the Annual Meeting, incumbent directors Joseph J. Junod, Claron D.
Wagner and Paul K. Mueller were reelected. The terms of Directors James R.
Gregg, James P. Logan, Stephen T. Kurtz and Ted R. Ostrander, Jr.,
continued after the Annual Meeting.
At the Annual Meeting, 1,900,396 shares were present in person or by proxy.
The following is a summary and tabulation of the matters that were voted
upon at the Annual Meeting:
Proposal I.
The election of three directors, each for a term of three years:
Abstentions
and Broker
For Withheld Against Nonvotes
--- -------- ------- --------
Joseph J. Junod 1,895,884 4,512 - -
========= ===== ======== =====
Claron D. Wagner 1,895,384 5,012 - -
========= ===== ======== =====
Paul K. Mueller 1,897,384 3,012 - -
========= ===== ======== =====
Proposal II:
To ratify the appointment of the Company's independent auditors for the year
ending December 31, 1997:
Abstentions
and Broker
For Withheld Against Nonvotes
1,896,934 - 812 2,650
========= ======= === =====
FFLC BANCORP, INC.
Part II. OTHER INFORMATION
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit 27 Financial Data Schedule (for SEC use only)
b. There were no reports on Form 8-K filed for the three months ended June
30, 1997.
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.
FFLC BANCORP, INC.
(Registrant)
Date: August 8, 1997 By: /s/ Stephen T. Kurtz
---------------------
Stephen T. Kurtz,
President and Chief
Executive Officer
Date: August 8, 1997 By: /s/ Paul K. Mueller
--------------------
Paul K. Mueller,
Executive Vice President, Chief
Operating Officer and Treasurer