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: March 31, 2002
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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 ________
SEC File Number: 000-32437
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BUCS FINANCIAL CORP
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(Exact name of registrant as specified in its charter)
Maryland 52-2265986
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10455 Mill Run Circle, Owings Mills, Maryland 21117
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(Address of principal executive offices) (Zip Code)
(410) 998-5304
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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 May 13, 2002:
$0.10 Par Value Common Stock 380,285
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Class Shares Outstanding
Transitional Small Business Disclosure Format (check one)
Yes No X
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BUCS FINANCIAL CORP AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2002 (unaudited)
and December 31, 2001 (audited)................................1
Consolidated Statements of Operations for the three months
ended March 31, 2002 and 2001 (unaudited)).....................2
Consolidated Statements of Cash Flows for the three
months ended March 31, 2002 and 2001 (unaudited)...............3
Notes to Consolidated Financial Statements.....................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................11
Item 2. Changes in Securities and Use of Proceeds......................11
Item 3. Defaults Upon Senior Securities................................11
Item 4. Submission of Matters to a Vote of Security-Holders............11
Item 5. Other Information..............................................11
Item 6. Exhibits and Reports on Form 8-K...............................11
Signatures
BUCS FINANCIAL CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2002 AND DECEMBER 31, 2001
(Unaudited)
March 31, December 31,
2002 2001
------------ ------------
ASSETS
Cash and cash equivalents $10,030,756 $ 2,359,036
Investment securities available for sale 20,194,810 19,103,091
Investment securities held to maturity 651,378 722,765
Loans receivable, net 59,222,924 59,360,908
Accrued interest receivable 304,669 332,433
Property and Equipment, net 1,020,258 977,991
Investment required by law - Federal
Home Loan Bank Stock 930,800 930,800
Goodwill and other intangible assets 321,659 327,240
Prepaid expenses and other assets 459,746 445,472
----------- -----------
Total Assets $93,137,000 $84,559,736
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $70,075,097 $61,417,093
Accounts payable and other liabilities 839,283 925,116
Borrowed funds - Federal Home Loan Bank 12,500,000 12,500,000
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83,414,380 74,842,209
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Stockholders' Equity:
Preferred stock, par value $0.10 per share,
2,000,000 shares authorized, 0 shares issued
and outstanding -- --
Common stock, par value $0.10 per share,
5,000,000 shares authorized, 405,085 shares
issued and outstanding at March 31, 2002 and
December 31, 2001 40,508 40,508
Additional paid-in capital 3,508,708 3,508,708
Retained Earnings 6,557,916 6,443,132
Unallocated common stock held by employee
stock ownership plan ("ESOP") (298,172) (298,172)
Accumulated other comprenhensive (loss) income (86,340) 23,351
------------ -----------
9,722,620 9,717,527
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Total liabilities and stockholders' equity $ 93,137,000 $84,559,736
============ ===========
The accompanying notes are an intregal part of these consolidated statements
1
BUCS FINANCIAL CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2002 AND 2001
(Unaudited)
Three month periods ended
March 31,
----------------------------
2002 2001
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Interest Income
Loans receivable $1,057,087 $1,058,907
Investment securities 299,490 349,804
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Total interest income 1,356,577 1,408,711
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Interest expense
Deposits 479,356 546,318
Borrowed funds 156,106 229,305
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Total interest expense 635,462 775,623
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Net interest income 721,115 633,088
Provision for loan losses 54,000 45,000
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Net interest income after provision
for loan losses 667,115 588,088
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Noninterest income
Fees and service charges 402,860 281,874
Loss on sale of investment securities - (4,375)
Fee to process and maintain cash facility 30,000 30,000
Other 80,331 48,277
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Total noninterest income 513,191 355,776
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1,180,306 943,864
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Noninterest expense
Compensation and benefits 502,194 350,726
Professional fees 60,882 50,034
Occupancy Expense 135,215 138,350
Office Operations 203,025 159,080
Other operating expense 96,690 108,447
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Total noninterest expense 998,006 806,637
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Income before income taxes 182,300 137,227
Income taxes 67,516 48,913
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Net income 114,784 88,314
Net change in unrealized gains/losses on
securities available for sale, net of deferred
income tax benefit (109,691) 113,715
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Comprehensve income $ 5,093 $ 202,029
========== =========
Earnings per share - basic and diluted 0.31
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Shares used in computing earnings per share $ 375,268
==========
The accompanying notes are an integral part of these consolidated statements.
2
BUCS FINANCIAL CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2002 AND 2001
(Unaudited)
2002 2001
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Cash flows from operating activities
Cash inflows
Interest income $ 1,384,341 $ 1,428,200
Fees and service charges 402,860 281,874
Other income 80,331 48,277
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1,867,532 1,758,351
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Cash outflows
General and administrative expenses 827,907 551,970
Interest on deposits 479,356 546,318
Interest on borrowed funds 152,106 261,355
Income taxes 171,222 1,152
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1,630,591 1,360,795
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Net cash provided from operating activities 236,941 397,556
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Cash flows from investing activities
Cash inflows
Loan principal repayments and loan
participations sold 5,784,483 7,871,602
Proceed from maturities and redemptions
of securities available for sale 1,904,770 3,305,873
Proceeds from repayments on securities
held to maturity 71,387 22,701
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7,760,640 11,200,176
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Cash outflows
Purchase of securities available
for sale 2,996,489 6,813,348
Loan disbursements 7,105,875 8,836,603
Purchase of property and equipment 100,186 10,046
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10,202,550 15,659,997
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Net cash used by investing activities (2,441,910) (4,459,821)
----------- -----------
Cash flows from financing activities
Cash inflows
Proceeds from sale of common stock - 3,223,567
Net decreases in borrowed funds from
the Federal Home Loan Bank - (5,000,000)
Net increase in deposits 8,658,004 7,282,394
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8,658,004 5,505,961
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Cash outflows
Payments on notes payable 77,000 -
----------- -----------
77,000 -
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Net cash provided from financing
activities 8,581,004 5,505,961
Net increase in cash and cash equivalents 7,671,720 1,443,696
Cash and cash equivalents, beginning of
period 2,359,036 5,354,010
----------- -----------
Cash and cash equivalents, end of period $10,030,756 $ 6,797,706
=========== ===========
Reconciliation of net income to net cash
provided by operating activities
Net income $ 114,784 $ 88,314
Investment securities gains - 4,375
Adjustments for items not providing
or not requiring cash or cash
equivalents
Provision for loan losses 54,000 45,000
Depreciation and amortization 63,500 52,706
Effects of changes in operating assets
and liabilities
Accrued interest receivable 27,764 19,489
Prepaid expenses and other assets (14,274) 44,654
Accounts payable and other liabilities (8,833) 143,018
----------- -----------
Net cash provided by operating activities $ 236,941 $ 397,556
=========== ===========
The accompanying notes are an intregal part of these consolidated statements
3
BUCS FINANCIAL CORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - Organization
BUCS Financial Corp (the "Company") was incorporated under the laws of the State
of Maryland in October 2000, primarily to hold all the outstanding shares of
capital stock of BUCS Federal Bank (the "Bank").
In March 2001, the Bank completed its mutual to stock conversion (the
"Conversion"). In connection with the Conversion, the Company sold 405,085
shares of its common stock in a subscription offering at $10.00 per share. Upon
completion of these transactions, the Bank became the wholly owned subsidiary of
the Company.
The Company's primary operations are conducted by the Bank, which operates two
offices, one in Owings Mills, Maryland and one in Columbia, Maryland. The Bank
is principally engaged in the business of providing retail banking services,
with an emphasis on residential mortgage loans and home equity, auto, and other
consumer loans.
NOTE 2 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include the activity of BUCS
Financial Corp and its wholly-owned subsidiaries BUCS Federal Bank, C.U.
Benefits, Inc. and Armor Insurance Group, Inc. All material intercompany
transactions have been eliminated in consolidation.
The accompanying consolidated financial statements for March 31, 2002 and the
three month periods ending March 31, 2002 and 2001 have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations. However, the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These consolidated financial statements should be read in conjunction with the
financial statements and notes thereto for the year ended December 31, 2001,
included in the Company's Annual Report on Form 10-KSB, filed with the
Securities and Exchange Commission. The balance sheet as of December 31, 2001
has been derived from the audited financial statements at that date.
The unaudited consolidated financial statements included herein reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of management, necessary to state fairly the financial position of the
Company as of March 31, 2002, the results of its operations for the three month
period ended March 31, 2002, and cash flows for the three month period ended
March 31, 2002. The results of the interim periods are not necessarily
indicative of the results expected for the full fiscal year.
4
Cash and Cash Equivalents
Cash and cash equivalents include interest-bearing deposits in other banks with
original maturities of less than three months, investments in overnight
investment funds with no stated maturity and Federal funds sold. Generally,
Federal funds are purchased and sold for one-day periods.
Federal Home Loan Bank Stock
Federal Home Loan Bank stock is carried at cost.
Use of Estimates
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note 3 - Earnings
Earnings per common share is computed by dividing net income (loss) by the
weighted average number of common shares outstanding, less unearned ESOP shares,
during the period. Diluted net income per common share is computed by dividing
net income by the weighted average number of common shares outstanding during
the period, including any potential dilutive common shares outstanding, such as
options and warrants. At March 31, 2002, the Company did not have any
potentially dilutive common shares outstanding.
Note 4 - Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 141 requires that the
purchase method of accounting be used for all business combinations initiated or
completed after June 30, 2001. SFAS No. 142 will require that goodwill and
intangible assets with indefinite lives no longer be amortized, but instead be
tested for impairment at least annually. The adoption of these standards will
not have a material impact on the Company's financial position or statement of
operations.
5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
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 (including this Quarterly Report on Form
10-QSB), in its reports to stockholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economy in which the Company conducts operations;
the effects of, and changes in, trade, monetary and fiscal policies and laws,
including interest rate policies of the board of governors of the federal
reserve system, inflation, interest rate, market and monetary fluctuations; the
impact of changes in financial services' laws and regulations (including laws
concerning taxes, banking, securities and insurance); competition; and the
success of the Company at managing the risks involved in the foregoing.
The Company cautions that the foregoing list of important factors is not
exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.
The Company's results of operations are primarily dependent upon net
interest income, which is the difference between the interest income earned on
interest-earnings 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 provision for
loan losses.
Changes in Financial Condition
The Company's total assets of $93.1 million at March 31, 2002 reflect an
increase of $8.5 million as compared to $84.6 million at December 31, 2001. The
increase in assets was comprised of increases in cash and equivalent and
investment securities available for sale of $7.7 million, and $1.1 million,
respectively.
6
The increase in the Company's liabilities was due primarily to a $8.7
million increase in deposits reflecting the cyclical nature Bank's deposit
levels resulting from its status as a former credit union. The increase in
deposits was partially offset by a $100,000 decrease in accounts payable and
other liabilities. Changes in the components of major assets, liabilities and
equity are discussed herein.
Cash and Cash Equivalents. Cash and cash equivalents, which include
interest-bearing deposits in other banks with original maturities of less than
three months and Liquid Cash Trust investments, totaled approximately $10.0
million at March 31, 2002, an increase of $7.7 million or 325.2% as compared to
$2.4 million at December 31, 2001. The increase is due primarily to an inflow of
payroll deposits on the last business day of March and other cyclical deposit
growth trends resulting from deposit of customer income tax returns and
employment bonuses. In addition, the Bank was holding funds to meet commitments
to make loans and purchase available for sale investments totaling $4.7 million.
The payroll deposit inflow results from the Bank's past history as a credit
union. As is common with credit unions, there is a strong tie to several
employer groups whose employees use the services of the employer endorsed
financial institution (credit union or bank). This results in significant cash
inflows to the Bank on company pay days. The majority of this is transaction
account funds and, as a result, a good portion of these deposits will flow back
out during the ensuing two-week pay cycle.
Investment Securities Available for Sale. Investment securities available
for sale increased by $1.1 million or 5.7% to $20.2 million at March 31, 2002 as
compared to $19.1 million at December 31, 2001. This is primarily the result of
purchases of $3.0 million of mortgage backed securities offset by maturities of
available for sale investments and repayments on mortgage backed securities
totaling $1.9 million.
Loans Receivable, Net. Net loans receivable at March 31, 2002 totaled $59.2
million, a decrease of $168,000 or approximately .3%, as compared to $59.4
million at December 31, 2001. Originations of $5.8 million, which includes $4.2
million of consumer loans including home equity loans, $896,000 in first
mortgage loans on one-to-four-family residences, and $767,000 of commercial real
estate loans in the Bank's prime lending area were offset by principal
repayments and loan participations sold totaling $5.8 million.
Deposits. Total deposits, after interest credited, increased by $8.7
million or 14.1% to $70.1 million at March 31, 2002, as compared to $61.4
million at December 31, 2001. The increase was primarily due to the cyclical
trends resulting from the Bank's former status as a credit union and from the
deposit of income tax refunds and bonuses. This resulted in increases in regular
savings, non-interest bearing checking, and money market account balances of
$3.7 million, $1.9 million and $2.7 million, respectively.
FHLB Advances. FHLB advances totaled $12.5 million at March 31, 2002,
representing no change from the total at December 31, 2001. No additional
borrowing was needed due to the large deposit inflow during the period.
Stockholders' Equity. Stockholders' equity totaled $9.72 million at March
31, 2002, virtually unchanged from $9.72 million at December 31 2001. The
increase to equity provided by net income of $114,784 during the period was
almost totally offset by a decrease in accumulated other comprehensive income
(loss) of $109,691 resulting from a decline in the estimated fair value of
investment securities available for sale.
7
Results of Operations for the Three Months Ended March 31, 2002 and 2001
Net Income. The Company recorded net income of $115,000 for the quarter
ended March 31, 2002, as compared to $88,000 for the same quarter in 2001,
representing a $27,000 or 30.7% increase. Net interest income increased $88,000
and noninterest income increased by $157,000, while noninterest expense
increased by $191,000. The increases in interest income and noninterest income
were partially offset by an increase in provision for loan losses during the
quarter of $9,000 or 20.0% and by a $19,000 or 38.0% increase in the provision
for income taxes. Changes in the components of income and expense are discussed
herein.
Net Interest Income Net interest income increased $88,000 or 13.9% for the
quarter ended March 31, 2002, as compared to the same quarter in 2001. The
average balance of interest-earning assets increased $16.9 million or 23.5%,
while the average yield thereon decreased 139 basis points. The average balance
of interest-bearing liabilities increased $8.7 million or 12.7%, and the average
rate paid thereon decreased 124 basis points. The increase in interest-earning
assets is attributed to the increase in deposit volume at both of the Bank's
office locations. The average yield on interest-earning assets and the average
cost of interest-bearing liabilities both declined primarily due to repeated
rate reductions by the Federal Reserve throughout 2001 as the general economy
slowed. The yield on interest-earning assets declined faster than the cost of
interest-bearing liabilities because the Company's interest-earning assets
repriced more rapidly than interest-bearing liabilities and because a large
percentage of the deposit growth during 2001 came in higher costing money market
and certificate of deposit accounts. The total of higher costing money market
and certificate of deposit accounts equaled 50.5% and 45.7% of total deposits as
of March 31, 2002 and 2001, respectively. The net interest rate spread, which is
the difference between average yield on interest-earning assets and the average
cost of interest-bearing liabilities, decreased to 3.15% for the quarter ended
March 31, 2002 from 3.31% for the same quarter in 2001. The decrease in the net
interest rate spread is primarily due to the fact that interest-earning assets
repriced more rapidly then interest earning liabilities
Interest Income. Interest income decreased $52,000 or 3.7% to $1.36 million
for the quarter ended March 31, 2002, as compared to $1.41 million for the same
quarter in 2001.
Interest on loans receivable decreased $1,800 or .2% for the quarter ended
March 31, 2002, as compared to the same quarter in 2001. The decrease is mainly
the result of a 147 basis point decline in the average yield loans, partially
offset by a $10.4 million or 20.7% increase in the average balance of loans
receivable.
Interest income on investment securities decreased by $50,000 or 14.4%for
the quarter ended March 31, 2002, as compared to the same quarter in 2001. The
decrease is the result of a 136 basis point decline in the average yield on
investment securities, partially offset by a $934,000 or 4.2% increase in the
average balance of investment securities.
The average yield on interest-earning assets was 6.44% and 7.83% for the
quarter ended March 31, 2002 and 2001, respectively.
Interest Expense. Interest expense totaled $635,000 for the quarter ended
March 31, 2002, as compared to $776,000 for the same quarter in 2001, a decrease
of $141,000, or 18.1%. The average balance of interest-bearing liabilities
increased $8.7 million or 12.7%, however, the average rate paid thereon
decreased by 124 basis points.
8
Interest expense on deposits decreased $67,000 or 12.3% for the quarter
ended March 31, 2002, as compared to the same quarter in 2001. The decrease was
due to a decline in the average cost of deposits of 108 basis points, partially
offset an increase in the average balance of deposits of $10.5 million or 19.5%.
Interest on FHLB advances decreased by $73,000 or 31.9% for the quarter
ended March 31, 2002, as compared to the same quarter in 2001. The decrease was
due to a decrease in the average balance of advances outstanding of $1.7 million
or 11.8% and a decline in the average cost of advances of 141 basis points. 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.
The average cost of interest-bearing liabilities was 3.28% and 4.52% for
the quarters ended March 31, 2002 and 2001, respectively.
Provision for Loan Losses. During the quarter ended March 31, 2002 and
2001, the Company established provisions for loan losses of $54,000 and $45,000,
respectively. This reflected management's evaluation of the underlying credit
risk of the loan portfolio and the level of allowance for loan losses. The
increase in the loan loss provision of $9,000 or 20% reflects management's
decision to increase funding from the prior period based on the strong overall
growth of the loan portfolio and the initiation of commercial real estate
lending programs.
At March 31, 2002, the allowance for loan losses totaled $659,000 or 1.11%
and 210.5% of total loans and total non-performing loans, respectively, as
compared to $630,000 or 1.26% or 211.4%, respectively. The Bank's non-performing
loans (non-accrual loans and accruing loans 90 or more days overdue) totaled
$313,000 and $298,000 at March 31, 2002 and 2001, respectively, which represents
...5% and .6% of the Bank's total loans, respectively. The Bank's ratio of
non-performing loans to total assets was .3% and .4% at March 31, 2002 and 2001,
respectively.
Noninterest Income. Total noninterest income, primarily fees and service
charges, increased $157,000 or 44.2% for the quarter ended March 31, 2002, as
compared to the same quarter in 2001. The increase reflects an emphasis on
charging appropriate fees for services, such as ATM fees, insufficient funds
fees, and interchange income generated by customers' use of check cards. In
addition, other noninterest income comprised mainly of commissions on insurance
sales by the Company's wholly-owned subsidiary, Armor Insurance Group, Inc.
increased to $80,000 for the quarter ended March 31, 2002 from $48,000 for the
same quarter in 2001.
Noninterest Expense. Total noninterest expense increased by $191,000 or
23.7% for the quarter ended March 31, 2002, as compared to the same quarter in
2001. This increase was attributable to increases of $151,000 or 43.2% in
compensation and benefits resulting from addition of employees at both the Bank
and Armor Insurance Group, Inc., increased cost for employee insurance programs,
and normal cost of living increases, $11,000 or 21.7% in professional fees
resulting from increased attorney and accounting fees associated with being a
publicly traded company, and $44,000 or 27.6% in office operating expense
resulting primarily from costs associated with the operation of Armor Insurance
Group, Inc.
Income Tax Expense. The provision for income taxes totaled $68,000 for the
quarter ended March 31, 2002, as compared to $49,000 for the same quarter in
2001. The $19,000 or 38.0% increase is the result of increased net taxable
income.
9
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-based capital to
risk-weighted assets. On March 31, 2002, the Bank was in compliance with all of
its regulatory capital requirements.
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 changes in market 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.
10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
The Registrant and its subsidiaries, from time to time, may be a party to
routine litigation, which arises in the normal course of business, such as
claims to enforce liens, condemnation proceedings on properties in which BUCS
Federal Bank, the wholly-owned subsidiary of the Registrant, holds security
interests, claims involving the making and servicing of real property loans, and
other issues incident to its business. There were no lawsuits pending or known
to be contemplated at March 31, 2002 that would have a material effect on
operations or income.
Item 2. Changes in Securities and Use of Proceeds.
------------------------------------------
None.
Item 3. Defaults Upon Senior Securities.
--------------------------------
None.
Item 4. Submission of Matters to a Vote of Security-Holders.
---------------------------------------------------
None.
Item 5. Other Information.
------------------
On April 25, 2002, the Registrant entered into a letter of intent providing
for the acquisition of a local insurance agency. The Registrant is currently in
the process of negotiating a definitive agreement to merge such insurance agency
into the Registrant's wholly-owned subsidiary, Armor Insurance Group, Inc., in
exchange for total cash consideration of $90,000, which will be payable in three
equal annual installments. The consummation of these acquisitions is expected to
occur in the second quarter of 2002.
As reported in the Registrant's Form 10-Q for the quarter ended September
30, 2001, the Registrant is in the process of building a new branch office in
Columbia, Maryland. The completion of construction and the opening date of the
new office is now anticipated to occur in first quarter 2003. Costs associated
with the opening of the new branch office are now estimated at $2.4 million,
including the purchase price of the property and construction and equipment
expense.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
a) Exhibits:
None
b) Reports on Form 8-K:
On March 27, 2002, the Registrant filed a Current Report on Form
8-K to report the adoption of a plan to repurchase up to 40,508,
or 10%, of its outstanding shares in open market purchases.
11
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.
BUCS FINANCIAL CORP
Date: May 13, 2002 By: /s/ Herbert J. Moltzan
--------------------------------------
Herbert J. Moltzan
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/ Herbert J. Moltzan /s/ Herbert J. Moltzan
- -------------------------------------- --------------------------------
Herbert J. Moltzan Herbert J. Moltzan
President and Chief Executive Officer Chief Financial Officer
(Principal Executive Officer) (Principal Financial and Accounting
Officer)
Date: May 13, 2002 Date: May 13, 2002