MT. TROY SAVINGS BANK, FSB
STATEMENTS OF FINANCIAL CONDITION
December 31, September 30,
2001 2001
(UNAUDITED) (As Restated)
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ASSETS
Cash and cash equivalents
Interest bearing $ 1,970,150 $ 796,703
Non-interest bearing 446,729 263,253
Interest-bearing deposits in other banks 300,000 400,000
Securities held-to-maturity (estimated fair value of
$2,925,897 and $2,177,533) 2,958,309 2,161,455
Mortgage-backed securities held-to-maturity (estimated
fair value of $208,735 and $225,337) 202,402 223,531
Securities available-for-sale, at fair value 1,178,230 1,644,952
Mortgage-backed securities available-for-sale, at fair value 276,583 316,831
Loans, net 37,413,573 37,731,075
Federal Home Loan Bank stock, at cost 312,600 312,600
Accrued interest receivable 291,753 296,496
Premises and equipment, net 272,798 243,760
Prepaid expenses 141,801 44,136
Deferred income taxes 123,681 119,450
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TOTAL ASSETS $ 45,888,609 $ 44,554,242
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LIABILITIES AND RETAINED EARNINGS
Deposits $ 40,102,692 $ 39,037,658
Advances from borrowers for taxes and insurance 239,790 83,372
Accrued interest payable 153,372 179,177
Other liabilities 118,021 90,127
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TOTAL LIABILITIES 40,613,875 39,390,334
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Commitments and contingencies
Retained earnings 5,267,081 5,150,151
Accumulated other comprehensive income, net of
applicable income taxes of $5,449 and $9,796 7,653 13,757
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TOTAL RETAINED EARNINGS 5,274,734 5,163,908
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TOTAL LIABILITIES AND RETAINED EARNINGS $ 45,888,609 $ 44,554,242
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See accompanying notes to the unaudited financial statements.
(1)
MT. TROY SAVINGS BANK, FSB
STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
December 31,
2001 2000
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INTEREST AND DIVIDEND INCOME
Loans $ 733,659 $ 673,978
Investments 55,559 69,844
Mortgaged-backed securities 9,349 13,580
Interest-earning demand deposits 7,656 17,611
FHLB stock 5,000 5,600
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811,223 780,613
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INTEREST EXPENSE
Deposits 416,445 418,951
Advances from Federal Home Loan Bank - 6,495
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416,445 425,446
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NET INTEREST INCOME 394,778 355,167
PROVISION FOR LOAN LOSSES 4,500 4,500
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 390,278 350,667
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NONINTEREST INCOME
Service charges and other fees 36,398 20,553
Income from real estate rental 1,200 875
Gain on sale of investments - 15,500
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37,598 36,928
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NONINTEREST EXPENSE
Compensation and benefits 119,255 105,590
Occupancy and equipment expense 28,056 28,008
Federal insurance premiums 6,783 5,510
Service bureau expense 26,074 24,414
Other 64,462 75,306
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244,630 238,828
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INCOME BEFORE INCOME TAX 183,246 148,767
INCOME TAX EXPENSE 66,316 52,710
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NET INCOME $ 116,930 $ 96,057
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See accompanying notes to the unaudited financial statements.
(2)
MT. TROY SAVINGS BANK, FSB
STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
December 31,
2001 2000
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OPERATING ACTIVITIES
Net income $116,930 $ 96,057
Adjustments to reconcile change in net income to
net cash provided by operating activities
Amortization of:
Deferred loan origination fees (20,700) (10,622)
Premiums and discounts on investment securities 2,151 5,195
Provision for loan losses 4,500 4,500
Depreciation and amortization of premises and equipment 12,211 12,783
Net gain on sales of securities available-for-sale - (15,500)
(Increase) decrease in:
Accrued interest receivable 4,743 (24,847)
Prepaid expenses (97,665) (12,720)
Increase (decrease) in:
Other liabilities 2,089 32,222
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NET CASH PROVIDED BY OPERATING ACTIVITIES 24,259 87,068
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INVESTING ACTIVITIES
Purchases of interest-bearing deposits in other banks - (200,000)
Proceeds from maturities of interest-bearing deposits
in other banks 100,000 297,000
Proceeds from maturities and calls of
securities held-to-maturity 250,000 -
Proceeds from principal repayments of
mortgage-backed securities held-to-maturity 20,715 15,458
Purchases of securities held-to-maturity (1,050,000) (615,000)
Proceeds from sales of securities available-for-sale - 119,375
Proceeds from maturities and calls of
securities available-for-sale 460,000 -
Proceeds from principal repayments of
mortgage-backed securities available-for-sale 38,044 9,202
Purchases of premises and equipment (41,249) (9,064)
Net loan originations and principal repayments on loans 333,702 1,025,670
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NET CASH PROVIDED BY INVESTING ACTIVITIES 111,212 642,641
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See accompanying notes to the unaudited financial statements.
(3)
MT. TROY SAVINGS BANK, FSB
STATEMENTS OF CASH FLOWS (UNAUDITED) - CONTINUED
Three Months Ended
December 31,
2001 2000
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FINANCING ACTIVITIES
Net decrease in FHLB advances - (1,450,000)
Net increase in deposits 1,065,034 598,969
Net increase in advances from borrowers
for taxes and insurance 156,418 210,096
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,221,452 (640,935)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 1,356,923 88,774
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,059,956 988,608
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CASH AND CASH EQUIVALENTS AT END OF YEAR $ 2,416,879 1,077,382
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SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest on deposits, advances, and other borrowings $ 442,250 437,116
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Income taxes $ - 28,510
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Loans transferred to foreclosed real estate owned $ 32,850 -
================ ================
See accompanying notes to the unaudited financial statements.
(4)
MT. TROY SAVINGS BANK, F.S.B.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10 - QSB and, therefore, do not necessarily
include all information that would be included in audited financial statements.
The information furnished reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results of operations. All
such adjustments are of a normal recurring nature. The results of operations for
the interim periods are not necessarily indicative of the results to be expected
for the full year or any other interim period.
NOTE B - PLAN OF CONVERSION
On November 7, 2001, the Board of Directors of the Bank, subject to regulatory
approval, ratified a Plan of Conversion (the "Plan") to convert from a federally
chartered mutual savings institution to a federally chartered stock savings
institution and the concurrent formation of a holding company for the Bank. The
Plan provides that the holding company will offer nontransferable subscription
rights to purchase common stock of the holding company. The rights will be
offered first to eligible account holders, the Bank's tax- qualified employee
stock benefit plans, supplemental eligible account holders, and other members.
Any shares remaining may then be offered to the general public. As of December
31, 2001, the Bank had incurred conversion costs of approximately $107,000. If
the conversion is ultimately successful, actual conversion costs will be
accounted for as a reduction in gross proceeds. If the conversion is
unsuccessful, the conversion costs will be expensed.
The Plan provides for the establishment, upon completion of the conversion, of a
special "liquidation account" in an amount equal to the Bank's net worth as of
the latest practicable date prior to the conversion. This account is for the
benefit of eligible account holders and supplemental eligible account holders in
the event of liquidation of the Bank. The interest as to each deposit account
will be in the same proportion of the total liquidation account as the balance
of the deposit account on the qualifying dates was to the aggregate balance of
all deposit accounts of eligible account holders and supplemental account
holders on the qualifying dates. The liquidation account will be reduced in a
proportionate amount if the amount in any deposit account on any annual closing
date is less than it was on the respective qualifying dates. The liquidation
account will not be increased despite any increase in a deposit account after
the respective qualifying dates.
The regulations of the OTS prohibit the Bank from declaring or paying a cash
dividend if the effect thereof would cause the Bank's regulatory capital to be
reduced below either the amount required for the liquidation account or the
federal regulatory capital requirement in section 567.2 of the Rules and
Regulations of the OTS.
(5)