Exhibit 99.3
Item 1. Financial Statements
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AT SEPTEMBER 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
September 30, December 31,
2001 2000
---- ----
(Unaudited)
ASSETS (In thousands)
Cash and cash equivalents:
Cash and amounts due from depository institutions $ 17,462 $ 17,844
Interest-bearing deposits 48,837 27,274
--------- ---------
Total cash and cash equivalents 66,299 45,118
Securities available for sale 93,028 131,418
Securities held to maturity 29,818 34,025
Loans receivable, net of allowance for loan losses of $4,375 at
September 30, 2001 (unaudited) and $3,875 at December 31, 2000 695,038 691,294
Accrued interest receivable 3,745 4,363
Premises and equipment, net 27,547 25,323
Real estate held for investment 2,085 2,193
Investment in and advances to real estate venture 17,694 14,612
Real estate owned, net 10 170
Federal Home Loan Bank stock - at cost 8,063 8,063
Other assets 6,640 6,126
--------- ---------
Total assets $ 949,967 $ 962,705
========= =========
LIABILITIES
Deposits:
Demand deposits $ 50,960 $ 44,662
NOW and statement savings 78,182 79,110
Savings deposits 41,476 34,506
Money market deposits 106,059 91,214
Certificates of deposit 390,289 431,577
--------- ---------
Total deposits 666,966 681,069
Mortgage-backed bond, net 12,879 13,582
Advances from Federal Home Loan Bank 134,143 146,714
Advances by borrowers for taxes and insurance 8,816 1,153
Other liabilities 9,524 7,724
--------- ---------
Total liabilities 832,328 850,242
--------- ---------
SHAREHOLDERS' EQUITY
Preferred stock ($1 par value): 10,000,000 shares authorized, no shares issued -- --
Common stock ($1 par value): 60,000,000 shares authorized; 8,660,254 and 8,542,363
shares outstanding at September 30, 2001 and December 31, 2000, respectively 10,571 10,571
Additional paid-in capital 94,401 94,043
Retained income - substantially restricted 40,704 39,832
Common stock purchased by Employee Stock Ownership Plan (3,576) (4,038)
Common stock issued to or purchased by Recognition and Retention Plans (1,261) (1,907)
Accumulated other comprehensive income (loss) 504 (855)
Treasury stock, at cost: 1,910,886 and 2,028,777 shares at September 30, 2001 and
December 31, 2000, respectively (23,704) (25,183)
--------- ---------
Total shareholders' equity 117,639 112,463
--------- ---------
Total liabilities and shareholders' equity $ 949,967 $ 962,705
========= =========
See notes to consolidated financial statements.
2
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
For the three months For the nine months
ended September 30, ended September 30,
2001 2000 2001 2000
---- ---- ---- ----
(Unaudited)
(Dollars in thousands, except per share data)
Interest income:
Loans $ 13,200 $ 13,052 $ 40,422 $ 37,069
Securities 2,327 3,130 7,588 9,421
Other interest and dividend income 536 658 1,746 1,914
----------- ----------- ----------- -----------
Total interest income 16,063 16,840 49,756 48,404
----------- ----------- ----------- -----------
Interest expense:
Deposits 6,756 7,143 21,822 19,510
Advances from Federal Home Loan Bank and other borrowings 2,247 2,763 6,905 7,682
----------- ----------- ----------- -----------
Total interest expense 9,003 9,906 28,727 27,192
----------- ----------- ----------- -----------
Net interest income 7,060 6,934 21,029 21,212
Provision for loan losses 90 75 270 300
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 6,970 6,859 20,759 20,912
----------- ----------- ----------- -----------
Other income:
Servicing income and other fees 49 49 165 206
NOW account and other customer fees 920 899 2,700 2,585
Net gain (loss) on real estate owned 4 (13) 28 12
Loss on write down of securities available for sale -- -- -- (138)
Loss on sale of securities available for sale (8) -- (8) --
Equity in net income (loss) of real estate venture 28 145 249 (55)
Net gain (loss) on termination of defined benefit plan -- (15) -- 907
Miscellaneous 99 94 384 279
----------- ----------- ----------- -----------
Total other income 1,092 1,159 3,518 3,796
----------- ----------- ----------- -----------
Operating expense:
Employee compensation and benefits 3,457 3,130 10,301 9,365
Occupancy and equipment 1,469 1,425 4,308 4,372
Advertising and promotion 171 168 515 547
Federal deposit insurance premium 31 32 95 94
Miscellaneous 1,044 814 3,116 2,563
----------- ----------- ----------- -----------
Total operating expense 6,172 5,569 18,335 16,941
----------- ----------- ----------- -----------
Income before provision for income taxes 1,890 2,449 5,942 7,767
Provision for income taxes 612 850 1,875 2,561
----------- ----------- ----------- -----------
Net income $ 1,278 $ 1,599 $ 4,067 $ 5,206
=========== =========== =========== ===========
Basic earnings per share $ 0.16 $ 0.19 $ 0.50 $ 0.61
=========== =========== =========== ===========
Diluted earnings per share $ 0.15 $ 0.18 $ 0.49 $ 0.59
=========== =========== =========== ===========
Weighted average common shares outstanding - basic 8,169,766 8,493,351 8,092,583 8,575,565
=========== =========== =========== ===========
Weighted average common shares outstanding - diluted 8,482,845 8,734,721 8,362,609 8,809,971
=========== =========== =========== ===========
See notes to consolidated financial statements.
3
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
--------------------------------------------------------------------------------------------------
Retained Employee Recognition Accumulated
Additional Income- Stock and Other
Common Paid-In Substantially Ownership Retention Comprehensive Treasury
Stock Capital Restricted Plan Plans Income(Loss) Stock Total
--------------------------------------------------------------------------------------------------
(In thousands)
--------------------------------------------------------------------------------------------------
Balance - December 31, 1999 $ 10,571 $ 93,744 $ 37,869 $ (4,722) $ (2,586) $ (3,358) $ (15,817) $ 115,701
Net income for the nine
months ended September 30,
2000 -- -- 5,206 -- -- -- -- 5,206
Other comprehensive income:
Unrealized increase in
market value of securities
available for sale (net
of income taxes) -- -- -- -- -- 993 -- 993
---------
Comprehensive income 6,199
Stock options exercised -- -- -- -- -- -- 754 754
Shares committed to be
released - Employee Stock
Ownership Plan and
Recognition and Retention
Plans -- 206 -- 513 537 -- -- 1,256
Stock benefit plan tax
adjustment -- -- 159 -- -- -- -- 159
Purchase of treasury stock -- -- -- -- -- -- (6,598) (6,598)
Dividends declared -- -- (2,786) -- -- -- -- (2,786)
--------------------------------------------------------------------------------------------------
Balance - September 30, 2000
(unaudited) $ 10,571 $ 93,950 $ 40,448 $ (4,209) $ (2,049) $ (2,365) $ (21,661) $ 114,685
--------------------------------------------------------------------------------------------------
Balance - December 31, 2000 $ 10,571 $ 94,043 $ 39,832 $ (4,038) $ (1,907) $ (855) $ (25,183) $ 112,463
Net income for the nine
months ended September 30,
2001 -- -- 4,067 -- -- -- -- 4,067
Other comprehensive income:
Unrealized increase in
market value of securities
available for sale (net
of income taxes) -- -- -- -- -- 1,359 -- 1,359
---------
Comprehensive income 5,426
Stock options exercised -- -- (526) -- -- -- 1,479 953
Shares committed to be
released - Employee Stock
Ownership Plan and
Recognition and Retention
Plans -- 358 -- 462 646 -- -- 1,466
Dividends declared -- -- (2,669) -- -- -- -- (2,669)
--------------------------------------------------------------------------------------------------
Balance September 30, 2001
(unaudited) $ 10,571 $ 94,401 $ 40,704 $ (3,576) $ (1,261) $ 504 $ (23,704) $ 117,639
==================================================================================================
See notes to consolidated financial statements.
4
COMMUNITY SAVINGS BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
For the nine months ended
September 30,
2001 2000
---- ----
(Unaudited)
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,067 $ 5,206
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,684 1,654
ESOP and Recognition and Retention Plans compensation expense 1,466 1,415
Accretion of discounts, amortization of premiums, and other deferred yield items (1,511) (1,316)
Loss on sale of securities available for sale 8 --
Provision for loan losses 270 300
Decrease (increase) in other assets 205 (361)
Increase in other liabilities 8,748 5,664
-------- --------
Net cash from operating activities 14,937 12,562
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in loans (1,887) (39,642)
Principal payments, calls and maturities received on securities and FHLB stock 48,678 8,280
Proceeds from sale of securities available for sale 246 --
Purchases of:
Loans and participations (2,127) (28,507)
Securities available for sale and Federal Home Loan Bank stock (2,750) (3,686)
Premises and equipment, net and real estate held for investment, net (3,489) (2,021)
Net change in investment in real estate venture (3,055) (2,362)
-------- --------
Net cash from investing activities 35,616 (67,938)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposits (14,103) 49,445
Advances from Federal Home Loan Bank -- 70,000
Repayments, calls of advances from Federal Home Loan Bank (12,571) (62,972)
Purchase of treasury stock -- (6,598)
Proceeds from exercise of stock options 953 754
Payments made on mortgage-backed bond (1,041) (1,040)
Dividends paid (2,610) (2,786)
-------- --------
Net cash from financing activities (29,372) 46,803
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 21,181 (8,573)
CASH AND CASH EQUIVALENTS, beginning of period 45,118 45,239
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 66,299 $ 36,666
======== ========
See notes to consolidated financial statements.
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The unaudited consolidated interim financial statements for Community
Savings Bankshares, Inc. ("Bankshares") and its subsidiary Community
Savings, F. A. (the "Association"), reflect all adjustments (consisting
only of normal recurring accruals) which, in the opinion of management,
are necessary to present fairly Bankshares' consolidated financial
condition and the consolidated results of operations and cash flows for
the interim periods presented herein. The results for interim periods
are not necessarily indicative of trends or results to be expected for
the full fiscal year. All weighted interest rates are presented on an
annualized basis. The unaudited consolidated interim financial
statements and notes thereto should be read in conjunction with the
audited consolidated financial statements and the notes thereto
included in Bankshares' Annual Report to Shareholders for the year
ended December 31, 2000.
Reclassifications - Certain items in the 2000 financial statements and
the notes thereto have been reclassified to conform with the 2001
presentation.
2. AGREEMENT AND PLAN OF MERGER
On September 9, 2001, Bankshares and BankAtlantic Bancorp
("BankAtlantic") (NYSE:BBX) executed the Agreement and Plan of Merger,
(the "definitive agreement"), pursuant to which BankAtlantic will
acquire Bankshares. In the transaction, Bankshares' shareholders will
receive $19.00 per share in cash resulting in a transaction value of
approximately $170 million. The transaction is currently expected to
close in the first quarter of 2002 and is subject to certain conditions
including, among other things, approval by the Office of Thrift
Supervision ("OTS") and Bankshares' shareholders.
3. LOANS RECEIVABLE
Loans receivable consists of the following:
September 30, December 31,
2001 2000
---- ----
(In thousands)
Real estate loans:
Residential 1-4 family $ 534,022 $ 511,324
Residential 1-4 family construction 84,015 113,179
Multi-family 8,776 10,501
Multi-family construction 20,541 33,960
Land 21,767 20,216
Commercial 40,178 37,255
Commercial construction 11,333 8,170
--------- ---------
Total real estate loans 720,632 734,605
--------- ---------
Non-real estate loans:
Consumer 14,992 14,029
Commercial business 8,783 5,454
--------- ---------
Total non-real estate loans 23,775 19,483
--------- ---------
Total loans receivable 744,407 754,088
Undisbursed loan proceeds (46,981) (60,874)
Unearned discounts and premiums and
net deferred loan fees and costs 1,987 1,955
Allowance for loan losses (4,375) (3,875)
--------- ---------
Total loans receivable, net $ 695,038 $ 691,294
========= =========
6
An analysis of the changes in the allowance for loan losses is as
follows:
For the nine months
ended September 30,
2001 2000
---- ----
(In thousands)
Balance, beginning of period $ 3,875 $ 3,923
Provision charged to income 270 300
Losses charged to allowance (14) (381)
Recoveries 244 --
------- -------
Balance, end of period $ 4,375 $ 3,842
======= =======
The Association accounts for impaired loans in accordance with SFAS No.
114 "Accounting by Creditors for Impairment of a Loan" ("SFAS 114") as
amended by SFAS No. 118 "Accounting by Creditors for Impairment of a
Loan - Income Recognition and Disclosures".
An analysis of the recorded investment in impaired loans is as follows:
At or for the nine months
ended September 30,
2001 2000
---- ----
(In thousands)
Impaired loan balance $ 2,195 $ 3,675
Related allowance -- --
Average impaired loan balance 2,394 2,059
Interest income recognized 46 187
For a further discussion of delinquent loans, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Asset Quality" in this Form 10-Q.