SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 2001
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|_| Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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SEC File Number: 000-25009
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SKIBO FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
United States 25-1820465
- --------------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
242 East Main Street, Carnegie, Pennsylvania 15106
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(Address of principal executive offices) (Zip Code)
(412) 276-2424
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(Registrant's telephone number, including area code)
Check whether the registrant: (1) filed all reports required to be
filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to 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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Number of shares outstanding of common stock
as of July 31, 2001
$0.10 Par Value Common Stock 3,150,333 Shares
- ---------------------------- -----------------
Class Outstanding
Transitional Small Business Disclosure Format (check one)
Yes No X
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SKIBO FINANCIAL CORP. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
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PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
Consolidated Statements of Financial Condition (As of
June 30, 2001 (unaudited) and March 31, 2001)................1
Consolidated Statements of Income (For the three
months ended June 30, 2001 and 2000 (unaudited)).............2
Consolidated Statement of Stockholders' Equity (For the
three months ended June 30, 2001 (unaudited))................3
Consolidated Statements of Cash Flows (For the three
months ended June 30, 2001 and 2000 (unaudited)).............4
Notes to Consolidated Financial Statements...................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................7
PART II. OTHER INFORMATION
- -------- -----------------
Item 1. Legal Proceedings.................................................10
Item 2. Changes in Securities.............................................10
Item 3. Defaults Upon Senior Securities...................................10
Item 4. Submission of Matters to a Vote of Security-Holders...............10
Item 5. Other Information.................................................10
Item 6. Exhibits and Reports on Form 8-K..................................10
Signatures
SKIBO FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(Dollar amounts in thousands, except per share data)
June 30, March 31,
2001 2001
--------- ---------
(Unaudited)
ASSETS
------
Cash and amounts due from depository institutions $ 950 $ 1,026
Interest-bearing deposits with other institutions 8,651 8,186
Investment securities:
Held-to-maturity (market value $24,727 and $25,972) 25,102 26,084
Mortgage-backed securities:
Held-to-maturity (market value $59,116 and $56,551) 58,539 55,907
Loans receivable, net 49,517 49,798
Accrued interest receivable:
Investment securities 396 496
Mortgage-backed securities 426 411
Loans receivable 434 452
Federal Home Loan Bank stock, at cost 2,615 2,615
Premises and equipment, net 563 577
Prepaid expenses and other assets 4,398 4,360
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Total Assets $ 151,591 $ 149,912
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Deposits $ 75,065 $ 73,399
Federal Home Loan Bank advances 48,000 48,000
Advances from borrowers for taxes and insurance 138 107
Accrued expenses and other liabilities 3,468 3,304
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Total Liabilities 126,671 124,810
Stockholders' Equity:
Preferred stock, 5,000,000 shares authorized; none issued -- --
Common stock, $0.10 par value; 10,000,000 shares authorized;
3,449,974 shares issued 345 345
Additional paid-in capital 9,757 9,745
Treasury stock, at cost (310,723 shares at June 30, 2001
and 304,694 shares at March 31, 2001)(1) (2,132) (2,087)
Unearned Employee Stock Ownership Plan (ESOP) shares (41) (91)
Unearned Restricted Stock Plan (RSP) shares (75) (100)
Retained earnings, substantially restricted 17,066 17,290
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Total Stockholders' Equity 24,920 25,102
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Total Liabilities and Stockholders' Equity $ 151,591 $ 149,912
========= =========
(1)Included are shares held by the Bank's RSP totaling 11,082 at June 30, 2001
and 10,483 at March 31, 2001, respectively.
See accompanying notes to consolidated financial statements.
1
SKIBO FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Income
For the Three Months Ended June 30, 2001 and 2000
(Dollar amounts in thousands, except per share data)
2001 2000
---------- ----------
(Unaudited)
Interest income:
Loans receivable $ 899 $ 1,025
Mortgage-backed securities 965 1,007
Investment securities 423 463
Other 138 66
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Total interest income 2,425 2,561
Interest expense:
Savings deposits 848 815
Federal Home Loan Bank advances 663 672
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Total interest expense 1,511 1,487
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Net interest income 914 1,074
Provision for loan losses -- --
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Net interest income after provision for loan losses 914 1,074
Other income:
Fees and service charges 10 8
Other 32 18
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Total other income 42 26
Other expenses:
Compensation and employee benefits 596 460
Premises and occupancy costs 48 53
Federal insurance premiums 4 4
Other operating expenses 85 88
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Total other expenses 733 605
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Income before income taxes 223 495
Provision for income taxes 85 212
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Net income 138 283
Other comprehensive income:
Unrealized gain on securities available-for-sale, net of tax -- --
---------- ----------
Total comprehensive income $ 138 $ 283
========== ==========
Basic earnings per share $ .04 $ .09
Diluted earnings per share $ .04 $ .09
Weighted average shares outstanding - Basic 3,130,993 3,230,863
Weighted average shares outstanding - Diluted 3,155,334 3,230,863
See accompanying notes to consolidated financial statements.
2
SKIBO FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
For the Three Months Ended June 30, 2001 (unaudited)
(Dollar amounts in thousands, except per share data)
Additional Unearned Unearned
Common Paid-in Treasury ESOP RSP Retained
Stock Capital Stock Shares Shares Earnings Total
-----------------------------------------------------------------------------
Balance at March 31, 2001 $345 $9,745 $(2,087) $(91) $(100) $17,290 $25,102
Cash dividends declared net
($.12 per share regular,
$.20 per share special) -- -- -- -- -- (362) (362)
Excess of fair value above cost of
ESOP shares released or
committed to be released -- 12 -- -- -- -- 12
Amortization of ESOP liability -- -- -- 50 -- -- 50
Amortization of RSP liability -- -- -- -- 25 -- 25
Treasury stock purchased,
at cost (6,029 shares) -- -- (45) -- -- -- (45)
Net income -- -- -- -- -- 138 138
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Balance at June 30, 2001 $345 $9,757 $(2,132) $(41) $ (75) $17,066 $24,920
=============================================================================
See accompanying notes to consolidated financial statements.
3
SKIBO FINANCIAL CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Three Months Ended June 30, 2001 and 2000
(Dollar amounts in thousands)
2001 2000
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(Unaudited)
Operating activities:
Net income $ 138 $ 283
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation 16 19
Compensation expense-ESOP and RSP 87 70
Net amortization of premiums and discounts (49) 25
Decrease in accrued interest receivable 103 92
Increase in prepaid expenses (38) (470)
Increase in accrued interest payable 130 137
Increase (decrease) in accrued income taxes 54 (53)
Other, net (20) 389
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Net cash provided by operating activities 421 492
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Investing activities:
Purchases of premises and equipment (2) (1)
Purchases of investment securities held-to maturity (131) (300)
Purchases of mortgage-backed securities held-to-maturity (7,639) (1,459)
Proceeds from maturities/calls and principal repayments of:
Investment securities held-to-maturity 1,113 264
Mortgage-backed securities held-to-maturity 5,028 2,468
Loans purchased (3,292) (653)
Net principal repayments on loans 3,601 1,641
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Net cash provided by (used in) investing activities (1,322) 1,960
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Financing activities:
Net increase (decrease) in savings deposits 1,666 (1,283)
Proceeds from Federal Home Loan Bank advances -- 8,500
Net increase in mortgage escrow 31 52
Treasury stock purchased (45) (441)
Cash dividends paid (362) (182)
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Net cash provided by (used in) financing activities 1,290 (2,354)
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Net increase in cash and cash equivalents 389 98
Cash and cash equivalents, beginning of period 9,212 1,726
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Cash and cash equivalents, end of period $ 9,601 $ 1,824
======= =======
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 1,381 $ 1,349
======= =======
Income taxes $ 67 $ 346
======= =======
See accompanying notes to consolidated financial statements.
4
SKIBO FINANCIAL CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying unaudited consolidated financial statements include the
accounts of Skibo Financial Corp., its wholly- owned subsidiary First Carnegie
Deposit (the "Bank"), and the Bank's wholly- owned subsidiary, Fedcar, Inc.
Fedcar, Inc. is a service corporation that is currently inactive.
These statements have been prepared in accordance with instructions for Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. However, such information presented reflects all adjustments
(consisting solely of normal recurring adjustments) which are, in the opinion of
the Company's management, necessary for a fair statement of results for the
interim period. All significant intercompany transactions and balances have been
eliminated in consolidation.
The results of operations for the three months ended June 30, 2001 are not
necessarily indicative of the results to be expected for the year ending March
31, 2002 or any other period. The unaudited consolidated financial statements
and notes thereto should be read in conjunction with the audited financial
statements and notes thereto for the year ended March 31, 2001.
NOTE 2 - Dividends on Common Stock
-------------------------
On May 14, 2001, the Board of Directors of the Company declared a $0.20 per
share special cash dividend on the Company's outstanding shares of common stock,
payable to stockholders of record as of May 24, 2001. Skibo Bancshares, M.H.C.
(the "M.H.C.") waived the receipt of dividends on its 1,897,500 shares. The cash
dividends on the outstanding shares held by persons other than the M.H.C. were
paid on June 7, 2001. On June 14, 2001, the Board of Directors of the Company
declared a $0.12 per share regular cash dividend on the Company's outstanding
shares of common stock, payable to stockholders of record as of June 29, 2001.
The M.H.C. waived the receipt of dividends on its 1,897,500 shares. The cash
dividends on the outstanding shares held by persons other than the M.H.C. were
paid on July 13, 2001. Under the interim final rule of the Office of Thrift
Supervision (the "OTS") effective July 12, 2000, any waiver of dividends by the
M.H.C. will no longer result in the OTS requiring an adjustment to the ratio
pursuant to which shares of Company common stock are exchanged for shares of a
stock holding company should the M.H.C. convert from the mutual to stock form of
organization. Such an adjustment would have had the effect of diluting the
minority stockholders of the Company.
Skibo Financial Corp.'s common stock is currently listed on the Nasdaq SmallCap
Market, traded under the symbol of "SKBO" and listed in the Wall Street Journal
as "SkiboFn".
NOTE 3 - Comprehensive Income
--------------------
For the three months ended June 30, 2001 and 2000, the Company's total
comprehensive income was $138,000 and $283,000, respectively. Total
comprehensive income is comprised of net income and other comprehensive income.
For both three month periods, there was no other comprehensive income.
NOTE 4 - Earnings Per Share (EPS)
------------------------
Basic EPS is computed by dividing net income applicable to common stock by the
weighted average number of common shares outstanding during the period, without
considering any dilutive items. Diluted EPS is computed by dividing net income
applicable to common stock by the weighted average number of common shares and
common stock equivalents for items that are dilutive, net of shares assumed to
be repurchased using the treasury stock method at the average share price for
the Company's common stock during the period. Common stock equivalents arise
from the assumed conversion of outstanding stock options and unvested RSP
shares.
5
SKIBO FINANCIAL CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The computation of basic and diluted earnings per share is shown in the table
below:
Three Months Ended
---------------------------
June 30, June 30,
2001 2000
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Basic EPS computation:
Numerator-Net Income $ 138,000 $ 283,000
Denominator-Wt Avg common shares outstanding 3,130,993 3,230,863
Basic EPS $ .04 $ .09
=== ===
Diluted EPS computation:
Numerator-Net Income $ 138,000 $ 283,000
========== ==========
Denominator-Wt Avg common shares outstanding 3,130,993 3,230,863
Dilutive Stock Options 24,341 --
Dilutive Unvested RSP -- --
--------- ----------
Weighted avg common shares and common stock
equivalents 3,155,334 3,230,863
Diluted EPS $ .04 $ .09
=== ===
For the quarters ended June 30, 2001 and 2000, 7,683 and 15,366 RSP shares,
respectively, were excluded from the diluted EPS computation due to their
anti-dilutive effect. Shares outstanding for the three months ended June 30,
2001 and 2000 do not include ESOP shares that were unallocated in accordance
with Statement of Position ("SOP") 93-6, "Employers' Accounting for Employees
Stock Ownership Plans". Unallocated ESOP shares amounted to 6,078 and 33,046 at
June 30, 2001 and 2000, respectively.
NOTE 5 - Income Taxes
------------
The Company joins with its wholly owned subsidiary, First Carnegie Deposit, in
filing a consolidated federal income tax return and accounts for income taxes
using the asset and liability method. The objective of the asset and liability
method is to establish deferred tax assets and liabilities for temporary
differences between the financial reporting and tax basis of the Company's
assets and liabilities based on enacted tax rates expected to be in effect when
such amounts are realized and settled.
6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company's results of operations are primarily dependent upon net interest
income, which is the difference between the interest income earned on
interest-earning assets, primarily loans, mortgage-backed securities, and
investments, and the interest expense on interest-bearing liabilities, primarily
deposits and borrowings. Net interest income may be affected significantly by
general economic and competitive conditions and policies of regulatory agencies,
particularly those with respect to market interest rates. The results of
operations are also significantly influenced by the level of noninterest
expenses, such as employee salaries and benefits, noninterest income, such as
loan-related fees and fees on deposit-related services, and the Company's
provision for loan losses.
The Management Discussion and Analysis section of this Form 10-QSB contains
certain forward-looking statements (as defined in the Private Securities
Litigation Reform Act of 1995). These forward-looking statements may involve
risks and uncertainties. Although management believes that the expectations
reflected in such forward-looking statements are reasonable, actual results may
differ from the results in these forward-looking statements.
Changes in Financial Condition
The Company's total assets of $151,591,000 at June 30, 2001, are reflective of
an increase of $1,679,000 or 1.1%, as compared to $149,912,000 at March 31,
2001. The increase in total assets was due to increases in mortgage-backed
securities, interest-bearing deposits with other financial institutions, and
prepaid expenses and other assets, offset by decreases in investment securities,
cash, loans receivable, premises and equipment and accrued interest.
The increase in the Company's liabilities was due to increases in savings
deposits, advances from borrowers for taxes and insurance, and accrued expenses
and other liabilities. Changes in the components of assets, liabilities and
equity are discussed herein.
Cash and Cash Equivalents. Cash and cash equivalents, which consist of
interest-bearing and noninterest-bearing deposits, totaled $9,601,000, an
increase of $389,000 or 4.2% from the prior quarter. This increase was primarily
due to increased interest-bearing deposits maintained at the Federal Home Loan
Bank ("FHLB").
Investment Securities. Investment securities totaled $25,102,000 at June 30,
2001, a decrease of $982,000 or 3.8%, as compared to $26,084,000 at March 31,
2001. The decrease was primarily due to proceeds received from maturities, calls
and payments totaling $1.1 million, offset by purchases of $131,000 of U.S.
Agency securities.
Mortgage-backed Securities. Mortgage-backed securities totaled $58,539,000 at
June 30, 2001, an increase of $2,632,000 or 4.7%, as compared to $55,907,000 at
March 31, 2001. The increase was due to purchases of $7.6 million, partially
offset by principal repayments and maturities totaling $5.0 million.
Loans Receivable, net. Net loans receivable at June 30, 2001 totaled
$49,517,000, a decrease of $281,000 or 0.6%, as compared to $49,798,000 at March
31, 2001. The decrease was primarily due to principal repayments totaling $3.8
million, partially offset by the origination of $61,000 in one- to four-family
mortgage loans and $134,000 in consumer loans, and purchases of $2.1 million
conventional one- to four-family mortgage loans, $187,000 insured Federal
Housing Administration ("FHA") and Veterans Administration ("VA") one- to
four-family mortgage loans, $238,000 Government National Mortgage Association
("GNMA") insured multi-family project loans, and $781,000 Small Business
Administration (SBA) loans.
Deposits. Total deposits, after interest credited, increased by $1,666,000 or
2.3% to $75,065,000 at June 30, 2001, as compared to $73,399,000 at March 31,
2001. The increase was due to increases in passbook and Money Market accounts,
and certificates of deposit, offset by a decrease in NOW accounts.
FHLB Advances. FHLB advances totaled $48,000,000 at both June 30, 2001 and March
31, 2001. The Company uses FHLB advances as a supplement to deposits to fund its
purchase of loans and investments.
Stockholders' Equity. Stockholders' equity totaled $24,920,000 at June 30, 2001,
as compared to $25,102,000 at March 31, 2001. The decrease of $182,000 or 0.7%
was primarily due to the purchase of 5,430 shares of treasury stock at an
average cost of $7.38 per share, and the payment of a $0.12 regular quarterly
cash dividend and a $0.20 special cash dividend, partially offset by earnings
for the three months ended June 30, 2001.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations for the Three Months Ended June 30, 2001 and 2000
Net Income. The Company recorded net income of $138,000 for the three months
ended June 30, 2001, as compared to net income of $283,000 for the three months
ended June 30, 2000. The $145,000 or 51.2% decrease in net income for the three
months ended June 30, 2001 was primarily the result of a decrease in net
interest income and an increase in other expenses, partially offset by a
reduction in the provision for income taxes. Changes in the components of income
and expense are discussed herein.
Net Interest Income. Net interest income decreased $160,000 or 14.9% for the
three months ended June 30, 2001, as compared to the three month period ended
June 30, 2000. The average balance of interest-earning assets decreased $799,000
or 0.6%, and the average yield earned thereon decreased 34 basis points. The
average balance of interest-bearing liabilities decreased by $884,000 or 0.7%,
however, the average rate paid thereon increased 11 basis points.
The interest rate spread, which is the difference between the yield on average
interest-earning assets and the cost of average interest-bearing liabilities,
decreased to 1.76% for the three month period ended June 30, 2001 from 2.21% for
the three month period ended June 30, 2000. The decrease in the interest rate
spread was primarily the result of decreased yields on the average balances of
interest earning assets and increased rates paid on the average balances of
savings deposits and FHLB advances.
Interest Income. Interest income decreased $136,000 or 5.3% to $2,425,000 for
the three month period ended June 30, 2001, as compared to $2,561,000 for the
three month period ended June 30, 2000.
Interest on loans receivable decreased $126,000 or 12.3% for the three months
ended June 30, 2001, as compared to the three month period ended June 30, 2000.
This decrease was primarily the result of a $6.0 million decrease in the average
balance of loans receivable and a 13 basis point decrease in the average yield
earned thereon.
Interest income on mortgage-backed securities decreased $42,000 or 4.2% for the
three months ended June 30, 2001, as compared to the three months ended June 30,
2000. This decrease was primarily the result of a $786,000 decrease in the
average balance of mortgage-backed securities and a 19 basis point decrease in
the average yield earned thereon.
Interest income on investment securities decreased by $40,000 or 8.6% for the
three months ended June 30, 2001, as compared to the three months ended June 30,
2000. The decrease in interest income on investment securities was primarily due
to a decrease of $1.2 million in the average balance of such securities and a 31
basis point decrease in the average yield earned thereon.
Interest income on other interest-earning assets increased by $72,000 or 109.1%
for the three months ended June 30, 2001, as compared to the three months ended
June 30, 2000. The increase was primarily due a $7.2 million increase in the
average balance of other interest-earning assets, offset by a 171 basis point
decrease in the average yield earned thereon.
The average yield on the average balance of interest-earning assets was 6.74%
and 7.08% for the three month periods ended June 30, 2001 and 2000,
respectively.
Interest Expense. Interest expense totaled $1,511,000 for the three months ended
June 30, 2001, as compared to $1,487,000 for the three months ended June 30,
2000. The $24,000 or 1.6% increase was primarily due to an 11 basis point
increase in the average rate paid on the total average interest-bearing
liabilities, partially offset by decreased average balances in savings deposits
and FHLB advances.
Interest expense on deposits (including escrows) totaled $848,000 for the three
months ended June 30, 2001, as compared to $815,000 for the three months ended
June 30, 2000. The $33,000 or 4.0% increase was primarily due to an 18 basis
point increase in the average rate paid on deposits and escrows, partially
offset by a $51,000 decrease in the average balance of deposits.
Interest on FHLB advances decreased $9,000 or 1.3% for the three months ended
June 30, 2001, as compared to the three months ended June 30, 2000. The decrease
was primarily due to a decrease of $833,000 in the average balance of advances,
partially offset by a 3 basis point increase in the rate paid thereon. The
Company uses FHLB advances as a funding source and has in the past used
borrowings to supplement deposits, which are the Company's primary source of
funds.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Allowance for Loan Losses. Based upon management's evaluation of the underlying
credit risk of the loan portfolio and the level of allowance for loan losses,
the Company established no provisions for loan losses during the three month
periods ending June 30, 2001 and 2000.
At both June 30, 2001 and March 31, 2001, the allowance for loan losses totaled
$425,000 or .85% and 1,416.7% of total loans and total non-performing loans,
respectively. The Company's non-performing loans (non-accrual loans and accruing
loans 90 days or more overdue) totaled $30,000 at both June 30, 2001 and March
31, 2001, which represented 0.06% of the Company's total loans. The Company's
ratio of non-performing loans to total assets were 0.02% at both June 30, 2001
and March 31, 2001.
Other Income. During the three months ended June 30, 2001, other income
increased $16,000 or 61.5%, as compared to the three months ended June 30, 2000.
Other Expenses. Total other expenses increased by $128,000 or 21.2% during the
three months ended June 30, 2001, as compared to the three months ended June 30,
2000. The increase was primarily attributable to an increase of $136,000 in
compensation and employee benefits expense, offset by a decrease of $5,000 in
premises and occupancy costs and $3,000 in other operating expenses.
Compensation and employee benefits expense increased due to increases of $74,000
in the Company's defined benefit plan and Supplemental Employee Retirement Plan
(SERP) costs, $45,000 in compensation and other employee benefits expense due to
increased salaries and bonuses, and $21,000 in ESOP expense, offset by a $4,000
decrease in RSP expense. The increase in SERP costs was due to an amendment to
the SERP in December 2000, resulting in an increase in the Projected Benefit
Obligation ("PBO") and the expense to the plan. The increase in ESOP expense was
due to an increase in the market price of the stock and the Company's commitment
to release an additional 4,492 shares of stock in anticipation of repaying the
ESOP loan in its entirety by December 2001.
Income Tax Expense. The provision for income tax totaled $85,000 for the three
months ended June 30, 2001, as compared to $212,000 for the three months ended
June 30, 2000. The $127,000 or 60.0% decrease was due to decreased income.
Regulatory Capital Requirements
The Bank is subject to federal regulations that impose certain minimum capital
requirements. Quantitative measures, established by regulation to ensure capital
adequacy, require the Bank to maintain amounts and ratios of tangible and core
capital to adjusted total assets and of total risk-basked capital to
risk-weighted assets. On June 30, 2001, the Bank was in compliance with its
three regulatory capital requirements as follows:
Amount Percent
------ -------
(Dollars in thousands)
Tangible capital............................ $23,988 15.84%
Tangible capital requirement................ 2,271 1.50
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Excess over requirement..................... $21,717 14.34%
======= ======
Core capital................................ $23,988 15.84%
Core capital requirement.................... 4,542 3.00
------- ------
Excess over requirement..................... $19,446 12.84%
======= ======
Risk based capital.......................... $24,413 55.82%
Risk based capital requirement.............. 3,499 8.00
------- ------
Excess over requirement..................... $20,914 47.82%
======= ======
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.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
The company's subsidiary First Carnegie Deposit and other third
parties were informed of an impending legal action regarding a
previously completed sale of foreclosed real estate. Although
First Carnegie Deposit has not been served as a defendant in any
lawsuit, the Company has notified its insurance carrier of this
potential action. At this time management believes this action,
if commenced, will not result in significant loss to the Company.
The Company and its counsel are not in a position at this time to
express an opinion as to the outcome of this action.
Item 2. Changes in Securities.
---------------------
Not applicable.
Item 3. Defaults Upon Senior Securities.
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security-Holders.
---------------------------------------------------
Not applicable.
Item 5. Other Information.
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
a) Not applicable
b) Not applicable
10
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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.
SKIBO FINANCIAL CORP.
Date: July 31, 2001
By: /s/ Walter G. Kelly
---------------------------------------
Walter G. Kelly
President and Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Walter G. Kelly /s/ Carol A. Gilbert
- ------------------------------------- ---------------------------------------------------
Walter G. Kelly Carol A. Gilbert
President and Chief Executive Officer Chief Financial and Operating Officer and Treasurer
(Principal Executive Officer) (Principal Financial and Accounting Officer)
Date: July 31, 2001 Date: July 31, 2001