U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10 - QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
[ ] 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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Commission File Number 0-49696
RESERVE BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Pennsylvania 23-3102103
- --------------------------------------------- -------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
2000 Mt. Troy Road, Pittsburgh, Pennsylvania 15212
- -------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 322-6107
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Indicate by check mark 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.
X Yes No
----------- ----------
As of February 13, 2003, there were 757,500 shares of the Registrant's common
stock, par value $0.10 per share, outstanding. The Registrant has no other
classes of common equity outstanding.
Transitional small business disclosure format:
Yes X No
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RESERVE BANCORP, INC.
AND SUBSIDIARY
Pittsburgh, Pennsylvania
Index
PART I. Page(s)
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FINANCIAL INFORMATION
Item 1. Financial statements
Consolidated Balance Sheets - as of December 31, 2002
(Unaudited) and September 30, 2002..................................................................3
Consolidated Statements of Income - (Unaudited) for the
three months ended December 31, 2002 and 2001.......................................................4
Consolidated Statements of Cash Flows - (Unaudited) for the three
months ended December 31, 2002 and 2001...........................................................5-6
Notes to (Unaudited) Consolidated Financial Statements..............................................7-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................................9-11
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.............................................................12
Signatures ..........................................................................................13-16
(2)
RESERVE BANCORP, INC
CONSOLIDATED BALANCE SHEETS
December 31, September 30,
2002 2002
(UNAUDITED) (AUDITED)
------------ ------------
ASSETS
Cash and cash equivalents
Interest bearing ..................................... $ 1,873,460 $ 1,335,623
Non-interest bearing ................................. 345,919 319,537
Interest-bearing deposits in other banks ................... 1,796,021 1,795,869
Securities held-to-maturity (estimated fair value of
$5,950,102 and $5,672,445) ........................... 5,554,116 5,405,046
Mortgage-backed securities held-to-maturity (estimated
fair value of $6,659,988 and $6,986,926) ............. 6,522,417 6,891,886
Securities available-for-sale, at fair value ............... 8,630,162 5,979,584
Mortgage-backed securities available-for-sale, at fair value 2,452,460 2,665,481
Loans, net ................................................. 34,923,346 35,016,785
Federal Home Loan Bank stock, at cost ...................... 376,600 303,600
Accrued interest receivable ................................ 462,791 421,735
Premises and equipment, net ................................ 376,858 369,237
Prepaid expenses ........................................... 20,408 13,040
Deferred income taxes ...................................... 40,580 42,299
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TOTAL ASSETS ......................................... $ 63,375,138 $ 60,559,722
============ ============
LIABILITIES AND RETAINED EARNINGS
Deposits ................................................... $ 45,884,511 $ 42,986,487
Federal Home Loan Bank advances ............................ 4,432,717 4,883,312
Advances from borrowers for taxes and insurance ............ 216,968 61,835
Accrued interest payable ................................... 117,472 119,641
Other liabilities .......................................... 198,392 158,504
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TOTAL LIABILITIES .................................... 50,850,060 48,209,779
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Commitments and contingencies
Preferred stock, no par value; 2,000,000 authorized;
none outstanding ..................................... - -
Common stock, par value $.10 per share; 8,000,000
shares authorized; 757,500 shares issued ............. 75,750 75,750
Additional paid-in-capital ................................. 7,094,022 7,089,908
Retained earnings - substantially restricted ............... 5,808,742 5,654,945
Accumulated other comprehensive income, net of
applicable income taxes of $44,005 and $42,286 ....... 62,816 60,340
Unallocated shares held by Employee Stock Ownership
Plan (ESOP) .......................................... (516,252) (531,000)
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TOTAL STOCKHOLDERS' EQUITY ........................... 12,525,078 12,349,943
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... $ 63,375,138 $ 60,559,722
============ ============
See accompanying notes to the unaudited financial statements.
(3)
RESERVE BANCORP, INC
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
December 31,
2002 2001
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INTEREST AND DIVIDEND INCOME
Loans $632,310 $733,659
Investments 159,542 50,005
Mortgaged-backed securities 116,148 9,349
Interest-earning demand deposits 26,809 13,210
FHLB stock 3,250 5,000
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938,059 811,223
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INTEREST EXPENSE
Deposits 371,808 416,445
Advances from Federal Home Loan Bank 41,218 -
-------- --------
413,026 416,445
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NET INTEREST INCOME 525,033 394,778
PROVISION FOR LOAN LOSSES 4,500 4,500
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 520,533 390,278
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NONINTEREST INCOME
Service charges and other fees 49,635 36,398
Income from real estate rental 2,150 1,200
Gain on sale of investments 16,793 -
-------- --------
68,578 37,598
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NONINTEREST EXPENSE
Compensation and benefits 146,980 119,255
Occupancy and equipment expense 24,723 28,056
Federal insurance premiums 6,117 6,783
Service bureau expense 25,517 26,074
Other 81,547 64,462
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284,884 244,630
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INCOME BEFORE INCOME TAX 304,227 183,246
INCOME TAX EXPENSE 112,554 66,316
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NET INCOME $191,673 $116,930
======== ========
EARNINGS PER SHARE - BASIC $ 0.27 N/A
WEIGHTED AVERAGE SHARES OUTSTANDING 702,433 -
See accompanying notes to the unaudited financial statements.
(4)
RESERVE BANCORP, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
December 31,
2002 2001
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OPERATING ACTIVITIES
Net income $ 191,673 $ 116,930
Adjustments to reconcile change in net income to
net cash provided by operating activities
Amortization of:
Deferred loan origination fees 19,917 20,700
Premiums and discounts on investment securities 8,381 2,151
Provision for loan losses 4,500 4,500
Depreciation and amortization of premises and equipment 10,560 12,211
Net gain on sales of securities available-for-sale (16,793) -
Amortization of ESOP unearned compensation 18,862 -
(Increase) decrease in:
Accrued interest receivable (41,056) 4,743
Prepaid expenses (7,368) (97,665)
Increase (decrease) in:
Other liabilities 37,719 2,089
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 226,395 65,659
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INVESTING ACTIVITIES
Proceeds from maturities of interest-bearing deposits
in other banks - 100,000
Proceeds from maturities and calls of
securities held-to-maturity 250,000 250,000
Proceeds from principal repayments of
mortgage-backed securities held-to-maturity 364,475 20,715
Purchases of securities held-to-maturity (400,000) (1,050,000)
Proceeds from sales of securities available-for-sale 216,793 -
Purchases of securities available-for-sale (3,094,939) -
Proceeds from maturities and calls of
securities available-for-sale 250,000 460,000
Proceeds from principal repayments of
mortgage-backed securities available-for-sale 208,968 38,044
Purchases of FHLB stock (73,000) -
Purchases of premises and equipment (18,181) (41,249)
Net loan originations and principal repayments on loans 69,022 292,302
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NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (2,226,862) 69,812
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See accompanying notes to the unaudited financial statements.
(5)
RESERVE BANCORP, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - CONTINUED
Three Months Ended
December 31,
2002 2001
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FINANCING ACTIVITIES
Net decrease in FHLB advances (450,595) -
Net increase in deposits 2,898,024 1,065,034
Dividends paid (37,876) -
Net increase in advances from borrowers
for taxes and insurance 155,133 156,418
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NET CASH PROVIDED BY FINANCING ACTIVITIES 2,564,686 1,221,452
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NET INCREASE IN CASH AND CASH EQUIVALENTS 564,219 1,356,923
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,655,160 1,059,956
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 2,219,379 $ 2,416,879
=========== ===========
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest on deposits, advances, and other borrowings $ 415,195 $ 442,250
=========== ===========
Income taxes $ 12,025 $ -
=========== ===========
Loans transferred to foreclosed real estate owned $ - $ 32,850
=========== ===========
See accompanying notes to the unaudited financial statements.
(6)
RESERVE BANCORP, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated 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. The
accompanying unaudited consolidated interim financial statements should be read
in conjunction with the September 30, 2002 audited consolidated financial
statements, including the notes thereto.
NOTE B - BUSINESS/PLAN OF CONVERSION
Reserve Bancorp, Inc. (the "Company") was incorporated under the laws of the
Commonwealth of Pennsylvania for the purpose of becoming the holding company of
Mt. Troy Bank (the "Bank") in connection with the Bank's conversion from a
federally chartered mutual savings bank to a federally chartered stock savings
bank, pursuant to its Plan of Conversion. Prior to fiscal 2002, the financial
statements include the accounts of the Bank only. The operating results of the
Company depend primarily upon the operating results of the Bank and, to a lesser
extent, income from interest-earning assets such as investment securities. Mt.
Troy Bank is a federally-chartered, SAIF-insured stock savings bank conducting
business from two offices, Reserve Township and the City of Pittsburgh. The
Bank's principal sources of revenue originate from its portfolio of residential
real estate and commercial mortgage loans as well as income from investment and
mortgage-backed securities. The Bank is subject to regulation and supervision by
the Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift
Supervision (OTS).
On April 5, 2002, Mt. Troy Bank (the "Bank") completed its mutual-to-stock
conversion (the "Conversion"). In connection with the Conversion, Reserve
Bancorp, Inc. (the "Company") a Pennsylvania chartered corporation, sold 757,500
shares of its common stock in a subscription offering at $10.00 per share. Upon
completion of these transactions, the Bank became a wholly-owned subsidiary of
the Company.
The common stock of the Company began trading on the OTC Bulletin Board on April
8, 2002 under the symbol "RSVB."
NOTE C - EARNINGS PER SHARE
Earnings per share is computed by dividing net income by the weighted average
number of common shares outstanding, less unallocated shares held by the Bank's
Employee Stock Ownership Plan, during the period. Diluted earnings per share is
calculated by dividing net income by the weighted average number of common
shares outstanding, including the effect of stock options, if dilutive, in
accordance with SFAS 128. At December 31, 2002, the Company did not have any
stock options or potentially dilutive common stock equivalents outstanding.
Three Months Ended
December 31,
-------------------
2002 2001
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Net income $191,673 $116,930
======== ========
Income available to common stockholders
Used in basic EPS $191,673 N/A
======== ========
Weighted average number of shares
Used in basic EPS 702,433 N/A
======== ========
The Company currently maintains a simple capital structure, thus there are no
dilutive effects on earnings per share.
(7)
RESERVE BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE D - EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
As part of the conversion discussed in Note B, an Employee Stock Ownership Plan
(ESOP) was established for all employees who have completed one year of service
and have attained the age of 21. The ESOP borrowed $590,000 from the Company and
used the funds to purchase 59,000 shares of common stock of the Company issued
in the offering. The loan will be repaid principally from the Bank's
discretionary contributions to the ESOP over a period of 10 years. On December
31, 2002, the loan had an outstanding balance of $531,000 and an interest rate
of 4.75%. The loan obligation of the ESOP is considered unearned compensation
and, as such, recorded as a reduction of the Company's stockholders' equity.
Both the loan obligation and the unearned compensation are reduced by the amount
of the loan repayments made by the ESOP. Shares purchased with the loan proceeds
are held in a suspense account for allocation among participants as the loan is
repaid. Contributions to the ESOP and shares released from the suspense account
are allocated among participants on the basis of compensation in the year of
allocation. Benefits become fully vested at the end of five years of service
under the terms of the ESOP Plan. Benefits may be payable upon retirement,
death, disability, or separation from service. Since the Bank's annual
contributions are discretionary, benefits payable under the ESOP cannot be
estimated. Compensation expenses are recognized to the extent of the fair value
of shares committed to be released.
For the three month period ended December 31, 2002, compensation from the ESOP
of $18,862 was expensed. Compensation is recognized at the average fair value of
the ratably released shares during the accounting period as the employees
performed services. At December 31, 2002, the ESOP had 5,900 allocated shares
and 53,100 unallocated shares. For the purpose of computing earnings per share,
all ESOP shares committed to be released have been considered outstanding.
NOTE E - COMPREHENSIVE INCOME
Total comprehensive income for the three months ended December 31, 2002 and 2001
was $198,260 and $123,034, respectively.
NOTE F - ASSET QUALITY
At December 31, 2002 and September 30, 2002, the Company had total nonperforming
loans (i.e., loans which are contractually past due 90 days or more) of
approximately $399,000 and $385,000, respectively. Nonperforming loans were
1.14% of total loans at December 31, 2002. Total nonperforming assets as a
percent of total assets at December 31, 2002 was 0.63%.
(8)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Our 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 investment securities
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 income,
such as loan-related fees and fees on deposit-related services, and the
provision for loan losses.
The Management's 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. We do not undertake
to update any forward-looking statement, whether written or oral, that may be
made from time to time.
Changes in Financial Condition
Our total assets of $63.4 million at December 31, 2002, are reflective of an
increase of $2.8 million or 4.6% as compared to $60.6 million at September 30,
2002. Stockholders' equity increased by $175,000 to $12.5 million at December
31, 2002, as compared to $12.3 million at September 30, 2002. The increase in
total assets was due to increases in cash and cash equivalents, and investment
securities, partially offset by decreases in loans receivable and
mortgage-backed securities. The increase in the liabilities was primarily due to
increases in savings deposits and certificates. 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 with original maturities of
three months or less, totaled $2,219,000 at December 31, 2002, an increase of
$564,000 or 34.1% as compared to $1,655,000 at September 30, 2002. This increase
was primarily due to increased interest-bearing deposits maintained at the
Federal Home Loan Bank.
Interest-bearing Deposits in Other Banks. Interest-bearing deposits in other
banks totaled $1.8 million at December 31, 2002, and at September 30, 2002.
Investment Securities. Investment securities totaled $14,184,000 at December 31,
2002, an increase of $2,799,000 or 24.6%, as compared to $11,385,000 at
September 30, 2002. This was primarily a result of purchases of $3.5 million of
FHLB bonds, and municipal securities, offset by the proceeds from maturities,
sales, and calls totaling $700,000.
Mortgage-backed Securities. Mortgage-backed securities totaled $8,975,000 at
December 31, 2002, a decrease of $582,000 or 6.1%, as compared to $9,557,000 at
September 30, 2002. The decrease was primarily due to principal repayments
totaling $573,000.
Loans Receivable, net. Net loans receivable at December 31, 2002 totaled
$34,923,000, a decrease of $94,000 or 0.3%, as compared to $35,017,000 at
September 30, 2002. The decrease was primarily due to net principal repayments.
Deposits. Total deposits, after interest credited, increased $2,899,000 or 6.7%
to $45,885,000 at December 31, 2002, as compared to $42,986,000 at September 30,
2002. The increase was primarily due to increases in statement savings accounts
and certificates of deposits.
FHLB Advances. FHLB advances totaled $4.4 million at December 31, 2002 as
compared to $4.8 million at September 30, 2002.
(9)
Stockholders' Equity. Stockholders' equity totaled $12,525,000 at December 31,
2002, as compared to $12,350,000 at September 30, 2002. The increase of $175,000
or 1.4% was due to earnings for the three months ended December 31, 2002 of
$192,000, along with an increase in accumulated other comprehensive income of
$2,000, and an increase of $19,000 from the release of ESOP shares, less
dividends paid of $38,000.
Results of Operations for the Three months Ended December 31, 2002 and 2001
Net Income. We recorded net income of $192,000 for the three months ended
December 31, 2002, as compared to net income of $117,000 for the three months
ended December 31, 2001. The $75,000 or 64.1% increase in net income for the
three months ended December 31, 2002 was primarily the result of increases in
net interest income and noninterest income, partially offset by increases in
noninterest expense and provision for income taxes. Changes in the components of
income and expense are discussed herein.
Net Interest Income. Net interest income increased $130,000 or 32.9% for the
three months ended December 31, 2002, as compared to the three-month period
ended December 31, 2001. Although the average balance of interest-earning assets
increased $17.9 million or 41.6%, the average yield earned thereon decreased 138
basis points. The average balance of interest-bearing liabilities increased by
$10.4 million or 27.2%, however, the average rate paid thereon decreased 95
basis points.
The net interest rate spread decreased to 2.78% for the three month period ended
December 31, 2002 from 3.21% for the three month period ended December 31, 2001.
Interest Income. Interest income increased $127,000 or 15.7% to $938,000 for the
three month period ended December 31, 2002, as compared to $811,000 for the
three month period ended December 31, 2001. The increase is due primarily to a
higher balance of interest-earning assets in the 2002 period following the
completion of the Company's stock offering in April 2002.
Interest on loans receivable decreased $102,000 or 13.9% for the three months
ended December 31, 2002, as compared to the three month period ended December
31, 2001. This decrease was the result of a $1.7 million decrease in the average
balance of loans receivable, and a 78 basis point decrease in the average yield
earned thereon.
Interest income on investment securities increased $110,000 or 220% for the
three months ended December 31, 2002 as compared to the three month period ended
December 31, 2001. The increase was the result of a $8.48 million increase in
the average balance of investment securities and a 26 basis point increase in
the average yield earned thereon.
Interest income on mortgage-backed securities increased $107,000 or more than 11
times for the three months ended December 31, 2002, as compared to the three
months ended December 31, 2001. This increase was the result of a $8.71 million
increase in the average balance of mortgage-backed securities, partially offset
by a 126 basis point decrease in the average yield earned thereon.
Interest income on other interest-earning assets and FHLB stock increased
$12,000 or 66.7% for the three months ended December 31, 2002, as compared to
the three months ended December 31, 2001. The increase was primarily due to a
$2.4 million increase in the average interest-earning deposits at other
financial institutions, partially offset by an 108 basis point decrease in the
average yield earned thereon.
The average yield on the average balance of interest-earning assets was 6.17%
and 7.56% for the three month periods ended December 31, 2002 and 2001,
respectively.
Interest Expense. Interest expense totaled $413,000 for the three months ended
December 31, 2002, as compared to $416,000 for the three months ended December
31, 2001. The $3,000 or 0.7% decrease was primarily due to a 95 basis point
decrease in the average rate paid on the total average interest-bearing
(10)
liabilities, partially offset by an increased average balance of all
interest-bearing liabilities of $10.4 million.
Interest expense on deposits totaled $372,000 for the three months ended
December 31, 2002, as compared to $416,000 for the three months ended December
31, 2001. The $44,000 or 10.6% decrease was primarily due to a 95 basis point
decrease in the average rate paid thereon, partially offset by a $5.7 million
increase in the average balance of deposits.
Interest on FHLB advances increased $41,000 for the three months ended December
31, 2002, as compared to the three months ended December 31, 2001. The increase
was due to an increase of the borrowings outstanding.
Provision for Loan Losses. During the three month periods ended December 31,
2002 and 2001, we established provisions for loan losses of $4,500. This
reflected management's evaluation of the underlying credit risk of the loan
portfolio and the level of allowance for loan losses.
Noninterest Income. During the three months ended December 31, 2002, noninterest
income increased $31,000 or 81.6%, as compared to the three months ended
December 31, 2001, primarily due to a $17,000 increase on gains of sale of
investments and a $14,000 increase in service charges and other fee income.
Noninterest Expense. Total noninterest expense increased by $40,000 or 16.3%
during the three months ended December 31, 2002, as compared to the three months
ended December 31, 2001. The increase was primarily attributable to increases of
$28,000 in compensation and employees benefits, including $19,000 attributable
to the ESOP plan, and a $10,000 increase in legal expense.
Income Tax Expense. The provision for income tax totaled $113,000 for the three
months ended December 31, 2002 as compared to $66,000 for the three months ended
December 31, 2001. The $47,000 increase was due to increased income.
Liquidity and Capital Resources
Our primary sources of funds are new deposits, proceeds from principal and
interest payments of loans, and repayments on investment and mortgage-backed
securities. While maturities and scheduled amortization of loans are a
predictable source of funds, deposit flows and mortgage repayments are greatly
influenced by general interest rates, economic conditions and competition. We
maintain liquidity levels adequate to fund loan commitments, investment
opportunities, deposit withdrawals and other financial commitments. At December
31, 2002, we had obligations to fund outstanding loan commitments of
approximately $264,000, for which adequate resources were available to fund
these loans.
At December 31, 2002, management had no knowledge of any trends, events or
uncertainties that will have or are reasonably likely to have material effects
on the liquidity, capital resources or operations of the Company. Further at
December 31, 2002, management was not aware of any current recommendations by
the regulatory authorities, which, if implemented, would have such an effect.
(11)
OTHER INFORMATION
Part II.
Item 1. Legal Proceedings
-----------------
None
Item 2. Change 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
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
99.1 Certification pursuant to 18 U.S.C.ss.1350
(b) Reports
During the quarter ended December 31, 2002, the Registrant
filed a Current Report on Form 8-K dated November 26, 2002
to report the declaration of a semi-annual dividend.
(12)
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.
RESERVE BANCORP, INC.
Date: February 14, 2003 By /s/ Richard A. Sinewe
-----------------------------------------
Richard A. Sinewe
President
(Principal Executive Officer)
Date: February 14, 2003 By /s/ Robert B. Kastan
-----------------------------------------
Robert B. Kastan
Treasurer/Controller
(Principal Financial/Accounting Officer)
SECTION 302 CERTIFICATION
I, Richard A. Sinewe, President, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Reserve Bancorp,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 14, 2003 /s/ Richard A. Sinewe
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Richard A. Sinewe
President
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SECTION 302 CERTIFICATION
I, Robert B. Kastan, Treasurer/Controller, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Reserve Bancorp,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 14, 2003 /s/ Robert B. Kastan
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Robert B. Kastan
Treasurer/Controller
(15)