ADVANCE FINANCIAL SAVINGS BANK, F.S.B.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
September 30, June 30,
1996 1996
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ASSETS
Cash and Cash Equivalents
Cash and amounts due from banks $ 821,219 $ 948,671
Interest - bearing deposits with other institutions 2,816,503 3,067,912
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Total cash and cash equivalents 3,637,722 4,016,583
Investment Securities
Securities held to maturity (fair value of $4,299,999
and $4,761,709) 4,299,534 4,799,596
Securities available for sale 65,735 68,549
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Total investment securities 4,365,269 4,868,145
Mortgage - backed securities (fair value of $517,883
and $561,203) 517,544 536,808
Loans held for sale 380,000 1,375,143
Loans receivable, (net of allowance for loan losses
of $328,275 and $324,983) 80,769,371 77,565,831
Office properties and equipment, net 2,094,207 2,099,470
Federal Home Loan Bank Stock, at cost 559,500 559,500
Accrued interest receivable 543,897 521,187
Other assets 308,416 309,726
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Total assets $ 93,175,926 $ 91,852,393
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LIABILITIES AND RETAINED EARNINGS
Deposits $ 79,013,919 $ 80,770,646
Advances from Federal Home Loan Bank 7,368,202 4,376,452
Advances from borrowers for taxes and insurance 121,434 182,977
Accrued interest payable and other liabilities 621,384 322,439
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Total liabilities 87,124,939 85,652,514
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Retained Earnings - substantially restricted 6,059,898 6,209,329
Net unrealized loss on securities (8,911) (9,450)
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Total retained earnings 6,050,987 6,199,879
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Total liabilities and retained earnings $ 93,175,926 $ 91,852,393
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See accompanying notes to the unaudited consolidated financial statements.
ADVANCE FINANCIAL SAVINGS BANK, F.S.B.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended
September 30,
1996 1995
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INTEREST AND DIVIDEND INCOME
Loans $ 1,623,884 $ 1,498,671
Investment securities 70,004 44,379
Interest - bearing deposits with other institutions 29,303 30,171
Mortgage - backed securities 21,735 27,691
Dividends on Federal Home Loan Bank Stock 8,966 8,538
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Total interest and dividend income 1,753,892 1,609,450
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INTEREST EXPENSE
Deposits 905,796 893,553
Advances from Federal Home Loan Bank 73,516 36,424
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Total interest expense 979,312 929,977
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NET INTEREST INCOME 774,580 679,473
Provision for loan losses 3,000 4,553
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 771,580 674,920
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NONINTEREST INCOME
Service charges on deposit accounts 57,208 42,457
Gain on sale of loans 7,043 -
Other income 18,633 15,594
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Total noninterest income 82,884 58,051
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NONINTEREST EXPENSE
Compensation and employee benefits 229,087 195,355
Occupancy and equipment 52,227 51,009
Deposit insurance premiums 515,593 41,125
Professional fees 23,358 23,259
Advertising 29,050 16,261
Data processing charges 39,988 36,293
Other expenses 170,188 130,192
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Total noninterest expense 1,059,491 493,494
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Income before income taxes (205,027) 239,477
Income taxes (55,596) 89,918
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NET INCOME $ (149,431) $ 149,559
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See accompanying notes to the unaudited consolidated financial statements.
ADVANCE FINANCIAL SAVINGS BANK, F.S.B.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Three Months Ended
September 30,
1996 1995
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OPERATING ACTIVITIES
Net income (149,431) 339,251
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion, net 15,222 (10,964)
Provision for loan losses 3,000 4,553
Proceeds from sale of loans 995,143 -
Increase in federal deposit insurance premiums 469,908 -
Decrease (increase) in accrued interest receivable
and other assets (21,400) 53,791
Decrease in accrued interest payable
and other liabilities (24,301) (48,694)
Decrease (increase) in federal income tax receivable (159,768) 3,171
Increase (decrease) in deferred federal income taxes 13,106 (185,715)
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Net cash provided by operating activities 1,141,479 155,393
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INVESTING ACTIVITIES
Proceeds from maturities of held to maturities 500,000 -
securities
Principal collected on mortgage - backed securities 19,264 29,199
Net increase in loans (3,195,917) (2,141,081)
Proceeds from the sale of other real estate - 298,000
Purchases of office properties and equipment (17,167) (224,389)
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Net cash used for investing activities (2,693,820) (2,038,271)
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FINANCING ACTIVITIES
Net increase (decrease) in deposits (1,756,727) 1,488,479
Net increase (decrease) in advances
from Federal Home Loan Bank 2,991,750 (247,700)
Net change in advances for taxes and insuraance (61,543) (49,341)
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Net cash provided by financing activities 1,173,480 1,191,438
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Decrease in cash and cash equivalents (378,861) (691,440)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 4,016,583 3,139,383
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CASH AND CASH EQUIVALENTS
AT END OF YEAR 3,637,722 2,447,943
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest on deposits and borrowings $ 974,509 $ 928,853
Income taxes 87,500 85,500
ADVANCE FINANCIAL SAVINGS BANK, F.S.B.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Advance Financial Savings Bank,
f.s.b. ("Savings Bank") includes its wholly - owned subsidiary Advance
Financial Service Corporation of West Virginia. All significant
intercompany items have been eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10 - KSB 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.
Note 2 - SAVINGS ASSOCIATION INSURANCE FUNDS RECAPITALIZATION
On September 30, 1996, the President signed into law legislation which
included, among other things, recapitalization of the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation
("FDIC") by a one time charge to SAIF - insured institutions of 65.7 basis
points per one hundred dollars of insurable deposits. The gross effect to
the Bank amounted to $469,908, which was paid on November 29, 1996 and is
reflected in the financial results of the Bank, for the quarter ended
September 30, 1996.
Note 2 - CONVERSION AND REORGANIZATION
On September 3, 1996, the Board of Directors of the Bank adopted the Plan
of Conversion pursuant to which the Bank proposed to convert from a
federally-chartered mutual savings bank to a federally-chartered stock
savings bank and concurrently form a Bank Holding Company. The conversion
is expected to be accomplished throught the amendment of the Bank's federal
charter and the sale of the holding company's common stock in an amount
equal to the pro forma market value of the Bank after giving effect of the
conversion. A subscription offering of the sale of the Bank's common stock
will be offered initially to the Bank's depositors, then to other members
and directors, officers, and employees of the Bank. Any shares of the
Bank's common stock not sold in the subscription offering will be offered
for sale to the general public in the Bank's market area. The Bank received
regulatory approval on November 12, 1996.