SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 27, 1999
PEEKSKILL FINANCIAL CORPORATION
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(Exact name of Registrant as specified in its Charter)
Delaware 0-27178 13-3858258
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1019 Park Street, Peekskill, New York 10566
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 737-2777
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
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On July 27, 1999, the Registrant issued the attached press release
announcing its fourth quarter and fiscal year net income, declaring a cash
dividend and announcing its annual meeting date.
Item 7. Financial Statements and Exhibits
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(a) Exhibits
99.1 Press release, dated July 27, 1999.
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.
PEEKSKILL FINANCIAL CORPORATION
Date: July 30, 1999 By: /s/ Eldorus Maynard
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Eldorus Maynard, Chairman and
Chief Executive Officer
EXHIBIT 99.1
DATE: July 27, 1999
CONTACT: Eldorus Maynard, Chairman & CEO
PHONE: 914-737-2777
FOR IMMEDIATE RELEASE
PEEKSKILL FINANCIAL CORPORATION ANNOUNCES FOURTH QUARTER AND
FISCAL YEAR NET INCOME, DECLARES CASH DIVIDEND AND ANNOUNCES ANNUAL
MEETING DATE
Peekskill, New York - Peekskill Financial Corporation ("Company"), the holding
company for First Federal Savings Bank ("Bank"), today announced net income of
$228,000, or $0.14 per diluted share, for the quarter ended June 30, 1999,
compared to net income of $461,000, or $0.17 per diluted share, for the same
period last year. For the year ended June 30, 1999, net income totaled $1.5
million, or $0.69 per diluted share, compared to $1.9 million, or $0.66 per
diluted share, for the year ended June 30, 1998. Basic earnings per share
amounts were $0.14 and $0.18 for the quarters ended June 30, 1999 and 1998,
respectively, and $0.71 and $0.68 for the fiscal years ended June 30, 1999 and
1998, respectively. Fiscal 1999 net income amounts for the fourth quarter and
full year were reduced by approximately $125,000 for the after-tax costs
incurred to establish a Real Estate Investment Trust ("REIT"), as discussed
below. Excluding the REIT expenses, diluted earnings per share would have been
$0.22 and $0.75, respectively, for the quarter and year ended June 30, 1999.
The Company also announced that the Board of Directors has declared a quarterly
cash dividend of $0.09 per share, payable September 3, 1999 to holders of record
as of August 13, 1999. In addition, the Company announced that the annual
meeting of stockholders will be held on October 20, 1999 at the main office of
the Company at 3:30 p.m.
Net interest income decreased $185,000 in the current quarter compared to the
quarter ended June 30, 1998 and decreased $277,000 for the year ended June 30,
1999 compared to the prior year. Interest and dividend income decreased $21,000
to $3.2 million for the quarter ended June 30, 1999 compared to the quarter
ended June 30, 1998, reflecting a 22 basis point decrease in the average yield,
substantially offset by a $5.4 million increase in average interest-earning
assets. Interest expense increased $164,000 to $1.8 million for the quarter
ended June 30, 1999 compared to the same quarter last year. This increase was
due primarily to a $21.8 million increase in average interest-bearing
liabilities partially offset by a 16 basis point decrease in the average cost.
Interest and dividend income increased $656,000 to $13.3 million for the year
ended June 30, 1999 compared to the same period a year ago. The increase was
caused primarily by a $15.4 million increase in average interest-earning assets,
partially offset by a 19 basis point decrease in the average yield. Interest
expense increased $933,000 to $7.0 million for the year ended June 30, 1999
compared to the year ended June 30, 1998, primarily due to a $23.8 million
increase in average interest-bearing liabilities.
During the current year, the Company recognized interest income on certain
participation loans ("TASCO Loans") for which the FDIC, as a servicer of these
loans, has disputed its obligation to pass-through certain principal and
interest payments whether or not such amounts are collected from the borrowers.
The FDIC suspended payments beginning in 1996, but resumed making certain
payments in 1997 and has continued to do so. As a result, interest payments of
$44,000 received in the current year (including $10,000 for the current quarter)
were recognized as income on a cash basis. No interest income was recognized on
the TASCO Loans during the year ended June 30, 1998. The Company's participation
interests in the TASCO Loans totaled $643,000 and $876,000 at June 30, 1999 and
1998, respectively. The decrease during fiscal 1999 reflects current year
principal payments, as well as principal reductions from the reclassification of
$143,000 in interest payments deferred in fiscal 1997 and 1998. Based on the
present payment status of the loans underlying the participation interests,
management has classified participation interests of $316,000 as non-performing
at June 30, 1999. All participation interests were classified as non-performing
at June 30, 1998.
In addition to the TASCO Loans, the Bank had three loans, with principal
balances totaling $382,000 on non-accrual status at June 30, 1999 and two loans,
with principal balances totaling $245,000 on non-accrual status at June 30,
1998. One-to-four family mortgage loans past due more than 90 days but still
accruing interest totaled $432,000 at June 30, 1999 compared to $370,000 at June
30, 1998. The Bank had no real estate owned at June 30, 1999 and one property
classified as real estate owned with a carrying value of $94,000 at June 30,
1998.
The provision for loan losses was $15,000 for the quarters ended June 30, 1999
and 1998, and $60,000 for the years ended June 30, 1999 and 1998. The allowance
for loan losses was $742,000 or 65.7% of non-performing loans at June 30, 1999,
compared to $682,000 or 45.7% of non-performing loans at June 30, 1998. There
were no loan charge-offs or recoveries in the years ended June 30, 1999 and
1998. Management's ongoing evaluation of the adequacy of the allowance for loan
losses is based on an assessment of local economic and real estate market
conditions, loan portfolio growth and the level of non-performing loans.
Non-interest expense increased $245,000 for the quarter ended June 30, 1999
compared to the prior year quarter. The increase was caused primarily by a
$214,000 increase in professional fees due to the Company's establishment of a
Real Estate Investment Trust ("REIT") in the quarter ended June 30, 1999. For
the year ended June 30, 1999, non-interest expense totaled $3.8 million, an
increase of $332,000 compared to last year. The increase was caused primarily by
a $248,000 increase in professional fees (primarily related to the REIT), a
$22,000 increase in occupancy costs, a $50,000 increase in computer service fees
and a $76,000 increase in other operating expenses, partially offset by a
$74,000 decrease in compensation and benefits expense. The decrease in
compensation and benefits expense for the year ended June 30, 1999 was caused
primarily by a $64,000 charge to expense last year for the full vesting of
certain shares, under the Company's Recognition and Retention Plan, due to the
death of a Director.
Income tax expense for the quarter ended June 30, 1999 decreased $194,000, or
51.9%, compared to the same period last year and decreased $248,000 for the year
ended June 30, 1999 compared to the prior year, primarily due to decreases in
pre-tax income. The establishment of the REIT is expected to produce substantial
tax savings and a lower effective tax rate for the Company in fiscal 2000 and
beyond. The Company anticipates that the amount of tax benefits realized within
approximately the first year will match the after-tax costs incurred in fiscal
1999 to establish the REIT.
Total assets at June 30, 1999 were $206.9 million compared to $200.3 million at
June 30, 1998. The increase of $6.6 million is primarily comprised of a $15.8
million increase in net loans, partially offset by a $9.1 million decrease in
total securities. Changes in the Company's funding sources during the current
year included two additional borrowings under securities repurchase agreements
totaling $15.0 million and an $8.8 million increase in depositor accounts,
partially offset by a $15.9 million decrease in stockholders' equity. The
increase in depositor accounts is comprised primarily of a $5.1 million increase
in money market and NOW accounts and a $3.9 million increase in certificates of
deposit. The decrease in stockholders' equity primarily reflects treasury stock
purchases of $16.8 million (including $13.5 million in the third fiscal quarter
upon completion of the Modified Dutch Auction Tender Offer) and dividends paid
of $773,000, partially offset by net income of $1.5 million.
The Company's stock is traded on the NASDAQ National Market System under the
symbol "PEEK".
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Forward-Looking Statements
The Company has made, and may continue to make, various forward-looking
statements with respect to earnings, credit quality and other financial and
business matters for periods subsequent to June 30, 1999. The Company cautions
that these forward-looking statements are subject to numerous assumptions, risks
and uncertainties, and that statements for subsequent periods are subject to
greater uncertainty because of the likelihood of changes in underlying factors
and assumptions. Actual results could differ materially from forward-looking
statements. The Company's forward-looking statements speak only as of the date
on which such statements are made. By making any forward-looking statements, the
Company assumes no duty to update them to reflect new, changing or unanticipated
events or circumstances.
In addition to those factors previously disclosed by the Company and
those factors identified elsewhere herein, the following factors could cause
actual results to differ materially from such forward-looking statements:
pricing pressures on loan and deposit products; actions of competitors; changes
in local and national economic conditions; customer deposit disintermediation;
changes in customers' acceptance of the Company's products and services; the
extent and timing of legislative and regulatory actions and reforms; and Year
2000 related costs and issues substantially different from those now
anticipated.
PEEKSKILL FINANCIAL CORPORATION
SELECTED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share amounts)
June 30, June 30,
1999 1998
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Selected Financial Condition Data:
Total assets $206,932 $200,341
Loans, net 63,436 47,631
Securities:
Held-to-maturity 119,122 135,446
Available-for-sale 15,673 8,498
Cash and cash equivalents 4,157 4,626
Depositor accounts 148,693 139,858
Securities repurchase agreements 28,000 13,000
Stockholders' equity 27,352 43,206
Non-performing loans $1,130 $1,491
Real estate owned --- 94
Book value per share $14.49 $14.92
Equity as a percent of total assets 13.22% 21.57%
For the three months For the year
ended June 30, ended June 30,
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1999 1998 1999 1998
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Selected Operating Data:
Interest and dividend income $3,248 $3,269 $13,299 $12,643
Interest expense 1,782 1,618 6,967 6,034
Net interest income 1,466 1,651 6,332 6,609
Provision for loan losses 15 15 60 60
Non-interest income 62 59 255 225
Non-interest expense (1) 1,105 860 3,806 3,474
Income before income tax expense 408 835 2,721 3,300
Income tax expense (1) 180 374 1,198 1,446
Net income $228 $461 $1,523 $1,854
Earnings per share:
Basic $0.14 $0.18 $0.71 $0.68
Diluted $0.14 $0.17 $0.69 $0.66
Return on average assets 0.45% 0.94% 0.75% 0.98%
Return on average equity 3.22% 4.14% 4.05% 4.02%