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 December 31, 2000
-------------------------------------------------
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- -----------------------
Commission file number 0-32139
-------
FLORIDAFIRST BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3662010
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
205 East Orange Street, Lakeland, Florida 33801-4611
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (863) 688-6811
-----------------------------
N/A
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate 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 February 9, 2001.
Class Outstanding
- ------------------------------------ ------------------
$.10 par value common stock 5,520,000 shares
FLORIDAFIRST BANCORP, INC.
FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 2000
INDEX
Page
Number
------
PART I - CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF
FLORIDAFIRST BANCORP, INC. AND SUBSIDIARY
Item 1. Financial Statements and Notes Thereto......................... 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 6
Item 3. Quantitative and Qualitative Disclosure About Market Risk...... 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 12
Item 2. Changes in Securities.......................................... 12
Item 3. Defaults upon Senior Securities................................ 12
Item 4. Submission of Matters to a Vote of Security Holders............ 12
Item 5. Other Information.............................................. 12
Item 6. Exhibits and Reports on Form 8-K............................... 13
SIGNATURES.............................................................. 14
FLORIDAFIRST BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Financial Condition
(Unaudited)
December 31, September 30,
ASSETS 2000 2000
-------- --------
(In thousands)
Cash and cash equivalents $ 7,639 $ 6,734
Investment securities available for sale, at fair value 89,257 96,661
Investment securities held to maturity,
market value $8,565 and $9,391 8,687 9,687
Loans receivable,
net of allowance for loan losses of $3,415 and $3,321 450,751 440,386
Premises and equipment, net 8,907 8,935
Federal Home Loan Bank stock, at cost 5,800 7,925
Other assets 10,605 11,852
--------- ---------
Total assets $ 581,646 $ 582,180
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 362,508 $ 354,554
Federal Home Loan Bank advances 96,000 158,000
Other borrowings - 2,937
Stock subscription refunds 25,209 -
Other liabilities 3,757 5,608
--------- ---------
Total liabilities 487,474 521,099
--------- ---------
Commitments and contingencies - -
Stockholders' equity:
Common stock, $ .10 par value, 80,000,000 shares authorized,
5,520,000 and 5,752,875 issued
552 575
Additional paid-in capital 52,211 25,085
Retained earnings 43,385 42,506
Treasury stock, at cost, -0- and 314,000 shares - (3,606)
Unallocated shares held by the employee stock ownership plan (1,513) (1,838)
Unallocated restricted stock plan shares (313) (410)
Accumulated other comprehensive loss (150) (1,231)
--------- ---------
Total stockholders' equity 94,172 61,081
--------- ---------
Total liabilities and stockholders' equity $ 581,646 $ 582,180
========= =========
See accompanying notes to unaudited condensed consolidated financial statements.
1
FLORIDAFIRST BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Earnings
(Unaudited)
For the three months ended
December 31,
2000 1999
------- -------
(In thousands, except per share amount)
Interest income:
Loans $ 8,869 $ 7,581
Investments and other 2,078 1,560
------- -------
Total interest income 10,947 9,141
------- -------
Interest expense:
Deposits 4,601 3,607
Federal Home Loan Bank advances and other borrowings 2,160 1,417
------- -------
Total interest expense 6,761 5,024
------- -------
Net interest income 4,186 4,117
Provision for loan losses 180 120
------- -------
Net interest income after provision for loan losses 4,006 3,997
------- -------
Other income:
Fees and service charges 363 337
Net gain on sale of assets 44 22
Other, net 166 87
------- -------
Total other income 573 446
------- -------
Other expenses:
Compensation and employee benefits 1,743 1,555
Occupancy and equipment 490 437
Marketing 92 187
Data processing 121 129
Federal insurance premiums 18 50
Other 660 681
------- -------
Total other expenses 3,124 3,039
------- -------
Income before income taxes 1,455 1,404
Income taxes 483 493
------- -------
NET INCOME $ 972 $ 911
======= =======
Basic earnings per share $ 0.18 $ 0.16
======= =======
Diluted earnings per share $ 0.18 $ 0.16
======= =======
Weighted average common and common equivalent shares outstanding: (1)
Basic 5,366 5,623
======= =======
Diluted 5,478 5,748
======= =======
(1) Shares outstanding for both periods have been adjusted as of the beginning
of the periods to give effect to the 1.0321 exchange ratio of previously
issued shares in conjunction with the conversion.
See accompanying notes to unaudited condensed consolidated financial statements.
2
FLORIDAFIRST BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For The Three Months
Ended December 31,
2000 1999
---- ----
(In thousands)
Operating activities:
Net income $ 972 $ 911
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 180 120
Depreciation 226 175
Decrease in other assets 645 458
Decrease in other liabilities (1,430) (1,402)
-------- --------
Net cash provided by operating activities 593 262
-------- --------
Investing activities:
Proceeds from sales, maturities and repayments of investment securities 13,290 7,234
Increase in loans, net (10,578) (11,152)
Purchase of investments available for sale (3,170) (17,529)
Redemption (purchase) of FHLB stock 2,125 (1,568)
Purchases of premises and equipment (202) (382)
Proceeds on sale of premises and equipment 4 25
-------- --------
Net cash provided by (used in) investing activities 1,469 (23,372)
-------- --------
Financing activities:
Net increase (decrease) in deposits 7,954 (2,161)
Net (decrease) increase in FHLB advances (62,000) 33,250
Net decrease in other borrowings (2,937) (2,005)
Payments to acquire treasury stock - (2,859)
Dividends paid (92) (98)
Stock subscription refunds 25,209 -
Net proceeds from issuance of common stock 30,709 -
-------- --------
Net cash (used in) provided by financing activities (1,157) 26,127
-------- --------
Net increase in cash and cash equivalents 905 3,017
Cash and cash equivalents at beginning of period 6,734 2,598
-------- --------
Cash and cash equivalents at end of period $ 7,639 $ 5,615
======== ========
Supplemental disclosure of cash flow information -
Cash paid during the period for:
Interest $ 7,380 $ 6,367
======== ========
Taxes $ 229 $ -
======== ========
Supplemental disclosure of non-cash information -
Additions to investment in real estate acquired through foreclosure $ 33 $ 69
======== ========
Change in unrealized gain (loss) on investments available for sale, net of
deferred tax expense (benefit) of $635 and ($311) $ 1,081 $ (526)
======== ========
Net distribution of restricted stock plan shares $ 97 $ -
======== ========
Allocation of shares held by the employee stock ownership plan $ 325 $ 325
======== ========
See accompanying notes to unaudited condensed consolidated financial statements.
3
FLORIDAFIRST BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and, therefore, do not include all
information 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 of normal recurring
accruals, which, in the opinion of management, are necessary for a fair
presentation of the financial statements have been included. The results of
operations for the periods ended December 31, 2000 and 1999 are not necessarily
indicative of the results that may be expected for the entire fiscal year or any
other period. These statements should be read in conjunction with the
consolidated financial statements and related notes, which are included in the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2000.
FloridaFirst Bancorp, Inc. (the " Company) was formed as a corporation chartered
under the laws of the State of Florida in July 2000 at the direction of the
FloridaFirst Bank (the "Bank") to acquire all of the outstanding stock of the
Bank issued in connection with the Bank's plan of conversion and reorganization
from the mutual holding company form of organization to a full stock corporation
(the "Conversion"). The Conversion was completed on December 21, 2000.
Accordingly, all references prior to December 21, 2000 refer to FloridaFirst
Bancorp, the former middle tier holding company, which had stock outstanding
while in the mutual holding company form of organization prior to the
Conversion. The stock of FloridaFirst Bancorp was exchanged for stock of the
Company along with new shares issued in the Conversion. See Note 2 below for a
description of the Conversion.
Note 2 - CONVERSION FROM MUTUAL HOLDING COMPANY TO FULL STOCK COMPANY
The Bank, FloridaFirst Bancorp, and the former mutual holding company adopted
plans of merger and conversion ("Conversion") to convert from a federally
chartered mutual holding company to a state chartered capital stock holding
company known as FloridaFirst Bancorp, Inc. The Conversion was accounted for
similar to a pooling of interests with no resulting change in the historical
basis of the Company's assets, liabilities and equity. The shares formerly held
by the mutual holding company were cancelled, the Company sold 3,147,952 new
shares to the public and the shares held by stockholders of FloridaFirst Bancorp
were exchanged for 2,373,048 shares of the Company (the exchange ratio was
1.0321). Cash in lieu of shares was issued for all fractional shares. As a
result of the Conversion, approximately $30.7 million was added to stockholders'
equity in December 2000.
4
At the time of the Conversion, the Bank established a liquidation account in an
amount equal to its equity as reflected in the statement of financial condition
used in the final Conversion prospectus. The liquidation account will be
maintained for the benefit of eligible account holders and supplemental eligible
account holders who continue to maintain their accounts at the Bank after the
Conversion. The liquidation account will be reduced annually, to the extent that
eligible and supplemental eligible account holders have reduced their qualifying
deposits as of each anniversary date. Subsequent increases in balances will not
restore an eligible or supplemental eligible account holder's interest in the
liquidation account. In the event of a complete liquidation of the Bank, each
eligible and supplemental eligible account holder will be entitled to receive a
distribution from the liquidation account in an amount proportionate to the
current adjusted qualifying balances for accounts then held.
Subsequent to the Conversion, the Bank may not declare or pay cash dividends on
its shares of common stock if the effect thereof would cause equity to be
reduced below applicable regulatory capital maintenance requirements or if such
declaration and payment would otherwise violate regulatory requirements.
Note 3 - COMPREHENSIVE INCOME
Comprehensive income for the periods presented was as follows:
Three Months Ended Three Months Ended
December 31, 2000 December 31, 1999
----------------- -----------------
Net income $ 972 $ 911
Other comprehensive income (loss) 1,081 (526)
------- -----
Comprehensive income $ 2,053 $ 385
======= =====
Other comprehensive losses consisted entirely of unrealized gains (losses), net
of taxes, on available for sale securities.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward-Looking Statements
The Company may from time to time make written or oral forward-looking
statements, including statements contained in the Company's filings with the
Securities and Exchange Commission (the "Commission") and its reports to
stockholders. Statements made in such documents, other than those concerning
historical information, should be considered forward-looking and subject to
various risks and uncertainties. Such forward-looking statements are made based
upon management's belief as well as assumptions made by, and information
currently available to management, pursuant to "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. The Company's actual results
may differ materially from the results anticipated in forward-looking statements
due to a variety of factors, including governmental monetary and fiscal
policies, deposit levels, loan demand, loan collateral values, securities
portfolio values, and interest rate risk management; the effects of competition
in the banking business from other commercial banks, savings and loan
associations, mortgage banking firms, consumer finance companies, credit unions,
securities brokerage firms, insurance companies, money market mutual funds and
other financial institutions operating in the Company's market area and
elsewhere, including institutions operating through the Internet; changes in
governmental regulation relating to the banking industry, including regulations
relating to branching and acquisitions; failure of assumptions underlying the
establishment of reserves for losses, including the value of collateral
underlying delinquent loans, and other factors. The Company cautions that such
factors are not exclusive. The Company does not undertake to update any
forward-looking statements that may be made from time to time by, or on behalf
of, the Company.
Overview
On December 21, 2000, FloridaFirst Bancorp, Inc. completed its second step
conversion from a mutual holding company structure to a full stock company. As
part of the mutual holding company reorganization, the shares formerly held by
the mutual holding company were cancelled, the Company sold 3,147,952 new shares
to the public and the shares held by stockholders of FloridaFirst Bancorp, the
former middle tier holding company, were exchanged for 2,373,048 shares of the
Company.
Unless the context otherwise indicates, all references to the Company include
its wholly owned subsidiary, the Bank. Prior to December 21, 2000, all
references refer to the Bank and FloridaFirst Bancorp.
Comparison of Financial Condition at December 31, 2000 and September 30, 2000
Assets. Total assets decreased $534,000 to $581.7 million at December 31, 2000
from $582.2 million at September 30, 2000. The decrease in total assets resulted
primarily from a $7.4 million net decrease in the investment securities
available for sale portfolio, together with a $2.1 million decrease in Federal
Home Loan Bank ("FHLB") stock. The decrease in investments was almost entirely
offset by a $10.4 million, or a 9.4% annualized increase in the residential
mortgage and commercial loan portfolios attributable to steady loan demand in
our market areas and funding of construction loans. The required investment in
FHLB stock was lowered because we repaid $62 million of FHLB borrowings with
funds received in the stock offering.
Management plans to focus on consumer and commercial loan growth to effectively
utilize the new capital raised in fiscal 2001. The Company plans to redirect its
residential mortgage loan origination strategy to originate and sell, on a
servicing-released basis, fixed rate loans with original terms in excess of 15
years. This strategy should cause our residential mortgage loan balances to
decline, while increasing our fee income from selling the loans and related
servicing rights. The capital leveraging strategy will consider:
>> purchase of investment securities to complement the loan origination
efforts, and
>> analysis of loan, deposit, branch or whole bank acquisition opportunities.
6
Liabilities. Total liabilities decreased $33.6 million, or 6.5%, to $487.5
million at December 31, 2000 from $521.1 million at September 30, 2000. The
decrease in total liabilities resulted primarily from a $62.0 million net
decrease in FHLB advances utilizing funds provided by the public stock offering,
a $2.9 million decrease in other borrowings and funding of mortgage customers
annual real estate tax payments. The decrease in total liabilities was offset by
net deposit growth of $8.0 million. The increase in deposits was primarily due
to special pricing promotions on one- and two-year certificate accounts during
the quarter. Management cannot predict if the certificates accounts will be
retained at their maturity since the interest environment that may exist at that
time is unknown. Checking and money market accounts continue to grow through
expansion of our customer base.
Total funds received during the stock offering totaled $80.9 million. Based on
the final valuation of the Company as approved by the OTS, checks for refunds of
oversubscriptions in the offering and interest paid on funds held during the
offering, totaling $50.3 million, were distributed on December 26, 2000. The
$25.2 million balance of stock subscription refunds represents the refund checks
outstanding at December 31, 2000, net of the excess cash held in the Company's
bank account at FHLB. The Company utilized FHLB advances to fund the checks as
they cleared in January 2001.
Management continues to evaluate the available funding sources. The attributes
of the alternative funding sources that management considers in its analysis
include the interest and other costs of such funding, the maturity
considerations and the nature and characteristics of assets being funded.
Stockholders' Equity. The increase in the Company's stockholders' equity
reflects:
>> net income for the three months ended December 31, 2000 of $972,000
>> decrease in accumulated other comprehensive loss of $1.1 million
(attributable to the reduction in net unrealized loss on investments
available for sale)
>> repayment of $325,000 on the ESOP loan
>> net distribution of $97,000 from the restricted stock plan
>> dividend distribution of $92,000, and
>> net proceeds from the sale of common stock of $30.7 million.
The decrease in accumulated other comprehensive loss resulted from the
fluctuation in market value of the Company's investment securities available for
sale. Because of interest rate volatility, accumulated other comprehensive loss
and stockholders' equity could materially fluctuate for each interim period and
year-end period.
Comparison of Operating Results for the Three Months Ended December 31, 2000 and
December 31, 1999
Net Income. Net income for the three months ended December 31, 2000 increased
6.7% to $972,000, compared to $911,000 for the same period in 1999. Net income
for the three months ended December 31, 2000 partially benefited from the
short-term investing of the funds received in the stock offering during the
quarter.
Net interest income increased $69,000, or 1.7%, for the three months ended
December 31, 2000 compared to the same period in 1999. This increase resulted
primarily from an increase in interest income of $1.8 million, offset by an
increase in interest expense of $1.7 million. Other expenses increased to $3.1
million for the three months ended December 31, 2000 from $3.0 million for the
three months ended December 31, 1999, primarily due to increases in compensation
and employee benefits, and occupancy and equipment costs related to an upgrade
in information technology.
7
Interest Income. The following discussion highlights the major factors that
impacted the changes in interest income during the quarter when compared to the
prior year. Details are contained in the average balance sheet at page 9.
>> Loan growth remained steady over the past year, as the Company increased
its emphasis on commercial loan growth in order to restructure the loan
portfolio. Average commercial loans outstanding during the quarter
increased by approximately 38% from the same quarter in the preceding year.
>> The yield on loans increased 45 basis points to 7.92%, for the three months
ended December 31, 2000 compared to the same period in 1999. Loan rates for
new mortgage loan originations increased approximately 1%, causing mortgage
portfolio yields to increase approximately 34 basis points. Overall
consumer portfolio yields increased 34 basis points and commercial
portfolio yields increased approximately 100 basis points, primarily due to
prime rate increasing 75 basis points during fiscal 2000 and the general
rise in other borrowing rates.
>> Average balances in the investment securities portfolio grew 26% as the
Company continued to pursue the strategy of leveraging the capital level
raised in the April 1999 stock offering.
>> The higher yield in the investment portfolio resulted from the leveraging
strategy (outside the loan portfolio) during fiscal 2000 as investment
yields had risen significantly over the prior year. In addition, the
Company lengthened the average life of its investment portfolio to provide
higher yields that should achieve reasonable margins over various interest
rate environments.
Interest Expense. The following discussion highlights the major factors that
impacted the changes in interest expense during the quarter when compared to the
prior year. Detailed changes are contained in the average balance sheet at page
9.
>> The increase in deposits is attributable mainly to an increase in rates in
order to attract new deposits and retain current deposits. The inverted
yield curve that existed through much of the year placed significant rate
pressure on the shorter term certificate accounts, which represent a large
part of the deposit base. The growth in average balances in checking
accounts has helped offset the increased costs related to money market and
certificate accounts.
>> Average FHLB advances outstanding increased this quarter compared to the
same quarter last year due to the significant growth in earning assets that
could not be funded by deposit growth.
>> The higher cost of funds related to the FHLB advances is reflective of the
significant rise in short-term interest rates over the past year.
Provision for Loan Losses. The provision for loan losses is charged to
operations to bring the total allowance for loan losses to an amount that
represents management's best estimate of the losses inherent in the loan
portfolio, based on historical experience, volume and type of lending conducted
by the Company, industry standards, the level and status of past due and
non-performing loans, the general economic conditions in its lending area and
other factors affecting the collectibility of the loans in its portfolio.
The provision for loan losses was $180,000 for the three months ended December
31, 2000 compared to $120,000 for the three months ended December 31, 1999. The
provision for loan losses increased for the current three month period primarily
as a result of the Company's net growth in commercial real estate and
residential mortgage loans and a resulting increase in the risk profile inherent
within the loan portfolio, higher charge-offs of loans over the same 1999
period, commercial and consumer loans, and as a result of increasing the overall
size of the loan portfolio. The allowance for loan losses increased to $3.4
million at December 31, 2000 from $3.0 million at December 31, 1999. The current
allowance represents .75% of loans outstanding at December 31, 2000. The Company
had net charge-offs of $87,000 for the three months ended December 31, 2000
compared to net charge-offs of $37,000 for the same period in 1999. The Company
intends to continue to increase its allowance for loan losses commensurate with
increases in its loan portfolio, especially its commercial real estate and
consumer loan portfolio.
8
Average Balance Sheet. The following table sets forth certain information
relating to the Company for the periods indicated. The average yields and costs
are derived by dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods presented. Average balances are
derived from average daily balances.
Three months Three months
December 31, 2000 December 31, 1999 Changes in
---------------------------- ------------------------------ ---------------------------------------
Average Yield/ Average Yield/ Yield/
Balance Interest Cost Balance Interest Cost Balances % Interest Cost
---------------------------- ------------------------------ ---------------------------------------
Interest-earnings
assets (IEA):
Loans receivable $448,172 $ 8,869 7.92% $ 406,034 $ 7,581 7.47% $ 42,138 10% $1,288 0.45%
Investments and other (2) 115,479 2,144 7.43% 91,587 1,599 6.98% 23,892 26% 545 0.45%
-------- ------- --------- ------- -------- ------
Total (1) 563,651 $11,013 7.82% 497,621 $ 9,180 7.38% $ 66,030 13% $1,833 0.44%
======= ======= ======== ======
Other assets 24,965 13,565
======== =========
Total assets $588,616 $ 511,186
======== =========
Interest-bearing
liabilities (IBL):
Interest checking $ 31,592 $ 148 1.86% $ 29,543 $ 135 1.83% $ 2,049 7% $ 13 0.03%
Savings 28,520 148 2.06% 32,157 134 1.67% (3,637) -11% 14 0.39%
Money market accounts 25,857 331 5.12% 24,611 238 3.87% 1,246 5% 93 1.25%
Certificate accounts 256,828 3,897 6.07% 238,507 3,100 5.20% 18,321 8% 797 0.87%
-------- ------- --------- ------- -------- ------
Total deposits 342,797 4,524 5.28% 324,818 3,607 4.44% 17,979 917 0.84%
Advances and other
borrowings 138,844 2,160 6.22% 106,032 1,417 5.35% 32,812 31% 743 0.88%
-------- ------- --------- ------- -------- ------
Total 481,641 6,684 5.55% 430,850 $ 5,024 4.66% $ 50,791 12% $1,660 0.89%
======= ======== ======
Other liabilities (3) 42,138 77 19,850
-------- ------- ---------
Total liabilities 523,779 $ 6,761 450,700
=======
Stockholders' equity 64,837 60,486
-------- ---------
Total liabilities
and equity $ 588,616 $ 511,186
========= =========
Net interest income (1) $ 4,252 $ 4,156
======= =======
Average IEA to IBL 117% 115%
Interest rate spread 2.27% 2.72%
Interest margin 3.02% 3.34%
(1) Interest income and net interest income do not agree to the statement of
operations because the tax equivalent income on municipal bonds is included
in this schedule.
(2) Interest includes interest income on $80.9 million of funds received from
the public stock offering.
(3) Interest includes interest expense on $80.9 million of funds received from
the public stock offering.
9
Other Income. Other income increased $127,000 to $573,000 for the three months
ended December 31, 2000. The major changes were:
>> Net gain of $44,000 related to the sale of $4.3 million of mortgage loans,
and
>> Cash surrender value of bank owned life insurance policies purchased in
January 2000 increased $86,000.
Other Expense. Other expense increased by $85,000 to $3.1 million for the three
months ended December 31, 2000 from $3.0 million for the three months ended
December 31, 1999. The major changes were:
>> Compensation and employee benefits increased $188,000 due primarily to
having certain key positions filled this year compared to last year, 5%
average salary increases due to merit and cost of living adjustments and an
increase in retirement plan costs due to the increased price of Company
stock in the ESOP and an increased accrual for 401(k) plan contributions.
>> Occupancy and equipment costs increased $53,000 due to implementation of
new technology,
>> Marketing costs decreased $95,000 due to a marketing campaign staged in the
1999 time period and the elimination of an agency retainer agreement, and
>> Federal insurance premiums declined due to the elimination of assessment of
federal insurance premiums on deposits effective January 1, 2000.
Liquidity and Capital Resources
The liquidity of a savings institution reflects its ability to provide funds to
meet loan requests, to accommodate possible outflows in deposits, and to take
advantage of interest rate market opportunities. Funding of loan requests,
providing for liability outflows, and management of interest rate fluctuations
require continuous analysis in order to match the maturities of specific
categories of short-term loans and investments with specific types of deposits
and borrowing. Savings institution liquidity is normally considered in terms of
the nature and mix of the savings institution's sources and uses of funds.
Asset liquidity is provided through loan repayments and the management of
maturity distributions for loans and securities. An important aspect of
liquidity lies in maintaining sufficient levels of loans and mortgage-backed
securities that generate monthly cash flows.
Cash and cash equivalents increased $905,000 to $7.6 million for the three
months ended December 31, 2000. Significant cash flows or uses (amounts shown in
parentheses) were as follows (in millions):
Cash provided by operations $ .6
FHLB advances and other borrowings (65.0)
Increase in net deposits 8.0
Maturities, calls, sale and repayments on investment securities
and sale of FHLB stock 15.4
Purchases of investment securities (3.2)
Net increase in loans (10.6)
Net proceeds from issuance of common stock 30.7
Stock subscriptions refund checks outstanding 25.2
Other - net (.2)
------
Net increase in cash and cash equivalents $ .9
======
10
On December 31, 2000, the Bank was in compliance with its three regulatory
capital requirements as follows (dollars in thousands):
Amount Percent
------ -------
Tangible capital $70,436 12.0%
Tangible capital requirement 8,776 1.5
Excess over requirement 61,660 10.5
Core capital $70,436 12.0%
Core capital requirement 23,404 4.0
Excess over requirement 47,032 8.0
Risk based capital $73,851 20.1%
Risk based capital requirement 29,375 8.0
Excess over requirement 44,476 12.1
Management believes that under current regulations, the Bank will continue to
meet its minimum capital requirements in the foreseeable future. Events beyond
the control of the Bank, such as increased interest rates or a downturn in the
economy in areas in which the Bank operates could adversely affect future
earnings and as a result, the ability of the Bank to meet its future minimum
capital requirements.
ITEM 3. Qualitative and Quantitative Disclosure About Market Risk
Qualitative Analysis. There have been no material changes from the Qualitative
Analysis information regarding market risk disclosed under the heading
"Management of Interest Rate Risk and Market Risk" in the Company's Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Company's Form 10-K for the fiscal year ended September 30, 2000.
Quantitative Analysis. There have been no material changes from the Quantitative
Analysis information regarding market risk disclosed under the heading
"Management of Interest Rate Risk and Market Risk" in the Company's Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Company's Form 10-K for the fiscal year ended September 30, 2000. Since the OTS
Net Portfolio Value ("NPV") Model measures exposure to interest rate risk of the
Bank to assure capital adequacy for the protection of the depositors, only the
Bank's financial information is used for the model. However, the Bank is the
only subsidiary and significant asset of the Company, therefore the OTS NPV
model provides a reliable basis upon which to perform the quantitative analysis.
The results of the NPV model are not yet available for December 31, 2000, but
management expects, though there is no assurance, a significant improvement in
the NPV as a Percentage of Present Value of Assets as a result of the Company
contributing $16.0 million in capital to the Bank in December 2000. The capital
contribution was approximately 52.6% of the net proceeds received by the Company
in the stock offering (see Note 2 to the financials statements). In addition,
the sensitivity measure should reflect an improvement due to the reduction in
the significant level of short-term borrowings during the quarter.
11
FLORIDAFIRST BANCORP, INC.
PART II
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor the Bank was engaged in any legal proceeding
of a material nature at December 31, 2000. From time to time, the
Company is a party to routine legal proceedings in the ordinary course
of business, such as claims to enforce liens, condemnation proceedings
on properties in which the Company holds security interests, claims
involving the making and servicing of real property loans, and other
issues incident to the business of the Company. There were no lawsuits
pending or known to be contemplated against the Company at December
31, 2000 that would have a material effect on the financial condition
or earnings of the Company or the Bank, taken as a whole.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(d) USE OF PROCEEDS
(1) The effective date of the Form S-1 was November 3, 2000 and the Commission
file number was 333-45150.
(2) The offering commenced on November 16, 2000.
(3) Not applicable.
(4) (i) The offering was terminated on December 6, 2000.
(ii) The name of the managing underwriter: Sandler O'Neill & Partners, L.P.
(iii) Common stock, par value $.10 per share was registered;
(iv) Amount registered - 6,348,000 shares;
Aggregate price of offering amount
registered - $63,480,000; Amount sold -
5,520,000 shares; Aggregate offering price
of stock sold - $55,200,000;
(v) Expenses of the offering which were direct or indirect payments to others;
Actual expense paid to and for underwriters: $348,800;
Estimated other expenses - $659,200;
Estimated total expenses - $1,008,000;
(vi) Estimated net offering proceeds - $30,471,520;
(vii) Direct or indirect payments to others:
Purchase outstanding stock of subsidiary
bank - $16,000,000; Intercompany loan to
subsidiary bank - $13,500,000; Working
capital- $971,520.
(viii) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a special meeting on December 18, 2000, the stockholders of
FloridaFirst Bancorp, the former middle tier holding company, approved
the plan of conversion and reorganization to convert from a federally
chartered mutual holding company form of organization to a state
chartered capital stock holding company known as FloridaFirst Bancorp,
Inc. The results were as follows:
Approval of the Conversion:
Public stockholders vote - 1,248,106 (For) 15,399 (Against) 0 (Abstain)
Total vote (including the
mutual holding company - 4,297,130 (For) 15,399 (Against) 0 (Abstain)
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Number
--------------
3(i) Articles of Incorporation for FloridaFirst Bancorp, Inc.*
3(ii) Bylaws of FloridaFirst Bancorp, Inc.*
4 Specimen Stock Certificate of FloridaFirst Bancorp, Inc.*
10.1 Employment Agreement with Gregory C. Wilkes*
10.2 Form of Employment Agreement with Four Employees of the Bank*
10.3 1999 Stock Option Plan **
10.4 Restricted Stock Plan **
* Incorporated by reference to the Registrant's Registration Statement on
Form S-1 initially filed with the Commission on September 5, 2000 (File No.
333-45150).
** Incorporated by reference to the identically numbered exhibits to the Form
10-K filed by FloridaFirst Bancorp, Inc. on December 29, 1999 (File No.
0-25693).
(b) Reports on Form 8-K
None
13
FLORIDAFIRST BANCORP, INC.
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.
FLORIDAFIRST BANCORP, INC.
Date: February 14, 2001 By: /s/Gregory C. Wilkes
-----------------------------------------
Gregory C. Wilkes
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 14, 2001 By: /s/Kerry P. Charlet
-----------------------------------------
Kerry P. Charlet
Chief Financial Officer
(Principal Accounting Officer)
14