SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 September 30, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-25180
CKF Bancorp, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 61-1267810
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
340 West Main Street, Danville, Kentucky 40422
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (859) 236-4181
--------------
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 ninety days.
Yes X No
--------- ---------
As of November 7, 2000, 752,761 shares of the registrant's common stock were
issued and outstanding.
Page 1 of 14 Pages Exhibit Index at Page N/A
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CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2000 (unaudited) and
December 31, 1999 ................................................................ 3
Consolidated Statements of Income for the Three-Month Periods
Ended September 30, 2000 and 1999 (unaudited) and the
Nine-Month Periods Ended September 30, 2000 and 1999
(unaudited) ...................................................................... 4
Consolidated Statement of Changes in Stockholders' Equity for the
Nine Month Periods Ended September 30, 2000 and 1999
(unaudited) ...................................................................... 5
Consolidated Statements of Cash Flows for the Nine-Month Periods
Ended September 30, 2000 and 1999 (unaudited) .................................... 6
Notes to Unaudited Consolidated Financial Statements ................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ........................................................... 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .................................................................. 13
Item 2. Changes in Securities .............................................................. 13
Item 3. Defaults Upon Senior Securities .................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders ................................ 13
Item 5. Other Information .................................................................. 13
Item 6. Exhibits and Reports on Form 8-K ................................................... 13
SIGNATURES
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
As of As of
September 30, December 31,
2000 1999
--------------- ---------------
ASSETS (Unaudited)
Cash and due from banks $ 389,313 $ 835,547
Interest bearing deposits 2,344,451 3,488,269
Investment securities:
Securities available-for-sale 432,480 376,500
Securities held-to-maturity 1,744,041 2,004,600
Loans receivable, net 66,955,819 63,160,359
Foreclosed real estate 32,923 32,923
Accrued interest receivable 566,371 453,587
Office property and equipment, net 1,472,013 854,154
Other assets 31,507 7,826
--------------- ---------------
Total assets $ 73,968,918 $ 71,213,765
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 53,355,030 $ 53,324,839
Advances from Federal Home Loan Bank 7,565,020 4,589,359
Advance payment by borrowers for taxes and insurance 155,607 25,966
Other liabilities 689,010 663,215
--------------- ---------------
Total liabilities 61,764,667 58,603,379
--------------- ---------------
Stockholders' equity:
Common stock, $.01 par value, 4,000,000 shares authorized;
1,000,000 shares issued 10,000 10,000
Additional paid-in capital 9,600,114 9,585,429
Retained earnings, substantially restricted 7,902,499 7,733,718
Accumulated other comprehensive income 280,269 243,322
Treasury stock, 238,389 and 187,365 shares, respectively, at cost (3,983,942) (3,265,804)
Incentive Plan Trust, 55,600 shares, at cost (1,119,573) (1,172,073)
Unearned Employee Stock Ownership Plan (ESOP) shares (485,116) (524,206)
--------------- ---------------
Total stockholder's equity 12,204,251 12,610,386
--------------- ---------------
Total liabilities and stockholders' equity $ 73,968,918 $ 71,213,765
=============== ===============
See accompanying notes to consolidated financial statements.
3
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
---------------
For the Three-Month Periods For the Nine-Month Periods
Ended September 30, Ended September 30,
------------------------------- ------------------------------
2000 1999 2000 1999
-------------- ------------- ------------- -------------
Interest income:
Interest on loans.................... $ 1,327,159 $ 1,156,065 $ 3,821,545 $ 3,313,726
Interest and dividends on investments 27,975 31,441 90,531 96,178
Other interest income................ 23,958 16,747 65,569 72,839
-------------- ------------- ------------- -------------
Total interest income............. 1,379,092 1,204,253 3,977,645 3,482,743
-------------- ------------- ------------- -------------
Interest expense:.......................
Interest on deposits................. 711,345 626,809 2,022,424 1,863,287
Other interest expense............... 111,810 28,900 270,089 42,534
-------------- ------------- ------------- -------------
Total interest expense............ 823,155 655,709 2,292,513 1,905,821
-------------- ------------- ------------- -------------
Net interest income..................... 555,937 548,544 1,685,132 1,576,922
Provision for loan losses............... 9,000 9,000 27,000 27,000
-------------- ------------- ------------- -------------
Net interest income after
provision for loan losses......... 546,937 539,544 1,658,132 1,549,922
-------------- ------------- ------------- -------------
Non-interest income:
Loan and other service fees.......... 24,266 22,319 63,161 63,298
Other, net ......................... 4,344 788 5,966 2,699
-------------- ------------- ------------- -------------
Total non-interest income......... 28,610 23,107 69,127 65,997
-------------- ------------- ------------- -------------
Non-interest expense:
Compensation and benefits............ 159,272 149,784 447,993 412,051
Federal insurance premium............ 4,783 7,858 13,095 22,073
State franchise tax.................. 14,922 15,513 44,767 44,176
Occupancy expenses, net.............. 25,981 9,756 55,242 35,327
Data processing expenses............. 22,140 16,989 54,928 45,303
Legal and professional fees.......... 1,379 2,383 14,289 30,472
Other operating expenses............. 74,580 59,130 202,597 193,265
-------------- ------------- ------------- -------------
Total non-interest expense........ 303,057 261,413 832,911 782,667
-------------- ------------- ------------- -------------
Income before income tax expense........ 272,490 301,238 894,348 833,252
Provision for income taxes.............. 92,646 118,545 304,078 283,314
-------------- ------------- ------------- -------------
Net income.............................. $ 179,844 $ 182,693 $ 590,270 $ 549,938
============== ============= ============= =============
Earnings per common share............... $ .27 $ .24 $ .88 $ .72
============== ============= ============= =============
Earnings per common share
assuming dilution.................... $ .27 $ .24 $ .88 $ .71
============== ============= ============= =============
Weighted average common shares
outstanding during the quarter....... 658,520 759,276 670,225 768,340
============== ============= ============= =============
Weighted average common shares
after dilutive effect outstanding
during the quarter................... 661,032 767,155 672,737 776,219
============== ============= ============= =============
See accompanying notes to consolidated financial statements.
4
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
for the nine month periods ended September 30, 2000 and 1999
(unaudited)
Accumulated
Additional Other
Common Paid-in Retained Comprehensive Treasury Incentive
Stock Capital Earnings Income Stock Plan
-------- ---------- ---------- ------------- ---------- -----------
Balance, December 31, 1998 $ 10,000 $ 9,555,017 $ 7,366,006 $ 410,294 $(1,683,489) $(1,221,853)
Comprehensive income:
Net income 549,938
Other comprehensive loss, net of tax
unrealized losses on securities (86,755)
Total comprehensive income
Dividend declared (443,433)
ESOP shares earned 35,965
Purchase of common stock, 56,745 shares (968,595)
Shares issued upon exercise of options (10,500) 42,000
Shares issued as compensation 7,780
-------- ----------- ----------- --------- ----------- -----------
Balance, September 30, 1999 $ 10,000 $ 9,580,482 $ 7,472,511 $ 323,539 $(2,652,084) $(1,172,073)
======== =========== =========== ========= =========== ===========
Balance, December 31, 1999 $ 10,000 $ 9,585,429 $ 7,733,718 $ 243,322 $(3,265,804) $(1,172,073)
Comprehensive income:
Net income 590,270
Other comprehensive income, net of tax
unrealized gains on securities 36,947
Total comprehensive income
Dividend declared (421,489)
ESOP shares earned 14,685
Purchase of common stock, 51,024 shares (718,138)
Shares issued upon exercise of options 52,500
-------- ----------- ----------- --------- ----------- -----------
Balance, September 30, 2000 $ 10,000 $ 9,600,114 $ 7,902,499 $ 280,269 $(3,983,942) $(1,119,573)
======== =========== =========== ========= =========== ===========
Unearned Total
ESOP Stockholders'
Shares Equity
--------- ------------
Balance, December 31, 1998 $(569,270) $ 13,866,705
------------
Comprehensive income:
Net income 549,938
Other comprehensive loss, net of tax
unrealized losses on securities (86,755)
------------
Total comprehensive income 463,183
Dividend declared (443,433)
ESOP shares earned 31,959 67,924
Purchase of common stock, 56,745 shares (968,595)
Shares issued upon exercise of options 31,500
Shares issued as compensation 7,780
--------- ------------
Balance, September 30, 1999 $(537,311) $ 13,025,064
========= ============
Balance, December 31, 1999 $(524,206) $ 12,610,386
------------
Comprehensive income:
Net income 590,270
Other comprehensive income, net of tax
unrealized gains on securities 36,947
------------
Total comprehensive income 627,217
Dividend declared (421,489)
ESOP shares earned 39,090 53,775
Purchase of common stock, 51,024 shares (718,138)
Shares issued upon exercise of options 52,500
--------- ------------
Balance, September 30, 2000 $(485,116) $ 12,204,251
========= ============
See accompanying notes to consolidated financial statements.
5
CKF BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
---------------
For the Nine-Month Periods
Ended September 30
------------------------------
2000 1999
------------- -------------
Cash flows from operating activities:
Net income $ 590,270 $ 549,938
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 27,000 27,000
Amortization of loan fees (10,704) (16,427)
ESOP benefit expense 53,775 59,033
Provision for depreciation 41,424 23,589
FHLB stock dividend (32,900) (29,700)
Amortization of investment premium 520 2,069
Stock issued for compensation 7,780
Change in:
Interest receivable (112,784) (47,267)
Other liabilities and federal income taxes payable (3,936) 95,717
Prepaid expense (23,681) (25,694)
Interest payable 10,698 15,395
------------- -------------
Net cash provided by operating activities 539,682 661,433
------------- -------------
Cash flows from investing activities:
Loan originations and principal payment on loans, net (3,811,756) (5,220,840)
Purchase of office equipment and furnishings (175,511) (83,457)
Payments for land and construction of Branch bank building (483,772) 240,000
Purchase of held-to-maturity securities (500,000)
Matured held-to-maturity securities 250,000 500,000
Principle repayment on mortgage-backed securities 42,939 65,621
------------- -------------
Net cash (used) by investing activities (4,178,100) (5,478,676)
------------- -------------
Cash flows from financing activities:
Net increase (decrease) in demand deposits, NOW accounts
and savings accounts (1,145,543) 1,136,710
Net increase (decrease) in certificates of deposit 1,175,734 2,807,620
Net increase (decrease) in custodial accounts 129,641 95,728
Proceeds from FHLB advances 3,000,000 3,500,000
Payments on FHLB advances (24,339) (2,022,733)
Dividends paid (421,489) (443,433)
Purchase of common stock (718,138) (968,595)
Additional principal payment on ESOP loan 8,892
Proceeds from exercise of stock options 52,500 31,500
------------- -------------
Net cash provided (used) by financing activities 2,048,366 4,145,689
------------- -------------
Increase (decrease) in cash and cash equivalents (1,590,052) (671,554)
Cash and cash equivalents, beginning of period 4,323,816 4,003,872
------------- -------------
Cash and cash equivalents, end of period $ 2,733,764 $ 3,332,318
============= =============
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes $ 353,045 $ 185,000
============= =============
Cash paid for interest $ 2,281,815 $ 1,867,831
============= =============
Mortgage loan originated to finance sale of foreclosed real estate $ 70,625
=============
See accompanying notes to consolidated financial statements.
6
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
CKF Bancorp, Inc. (the "Company") was formed in August 1994 at the
direction of Central Kentucky Federal Savings Bank (the "Bank") to become
the holding company of the Bank upon the conversion of the Bank from mutual
to stock form (the "Conversion"). Since the Conversion, the Company's
primary assets have been the outstanding capital stock of the Bank, cash on
deposit with the Bank, and a note receivable from the Company's Employee
Stock Ownership Plan ("ESOP"), and its sole business is that of the Bank.
Accordingly, the consolidated financial statements and discussions herein
include both the Company and the Bank. On December 29, 1994, the Bank
converted from mutual to stock form as a wholly owned subsidiary of the
Company. In conjunction with the Conversion, the Company issued 1,000,000
shares of its common stock to the public.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments
(consisting of only normal recurring accruals) necessary for fair
presentation have been included. The results of operations and other data
for the nine month period ended September 30, 2000 are not necessarily
indicative of results that may be expected for the entire fiscal year
ending December 31, 2000.
2. Regulatory Capital
The Bank's actual capital and its statutory required capital levels based
on the consolidated financial statements accompanying these notes are as
follows (in thousands):
September 30, 2000
--------------------------------------------------------------------------------
To be Well
Capitalized Under
For Capital Prompt Corrective
Adequacy Purposes Action Provisions
------------------------ ------------------------ -------------------------
Actual Required Required
------------------------ ------------------------ -------------------------
Amount % Amount % Amount %
------------------------ ------------------------ -------------------------
Core capital $10,724 14.7% $2,944 4.0% $4,416 6.0%
Tangible capital $10,724 14.7% $1,104 1.5% N/A N/A
Total Risk based capital $10,906 22.2% $3,959 8.0% $4,948 10.0%
Leverage $10,724 14.7% N/A N/A $3,680 5.0%
3. Dividends
For the nine months ended September 30, 2000, the Company paid the regular
semi-annual dividends to stockholders of record on January 28, 2000 and
July 28, 2000 totaling $.30 and $.32 per share, respectively. The total
dividends paid by the Company for the nine month period ended September 30,
2000 amounted to $421,489.
4. Common Stock
During the nine months ended September 30, 2000, options to acquire 4,000
shares at $13.125 per share were exercised with the Company receiving total
proceeds of $52,500. In addition, the
7
Company purchased 51,024 shares of treasury stock at a cost of $718,138
during the nine months ended September 30, 2000.
ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Financial Condition
Total assets increased approximately $2.8 million, or 3.9%, from $71.2 million
at December 31, 1999 to $74.0 million at September 30, 2000. The net increase in
assets includes a $3.8 million, or 6.0%, increase in net loans receivable, and a
$618,000, or 72.3%, increase in office property and equipment offset by a
$205,000, or 8.6%, decrease in investment securities and a $1.6 million or 36.8%
decrease in cash and interest bearing deposits.
The Company's aggregate investment securities portfolio decreased $205,000, or
8.6% to $2.2 million at September 30, 2000. Securities classified as
available-for-sale and recorded at market value per SFAS No. 115 increased
$56,000 due solely to the increase in the market value of such securities.
Securities held-to-maturity decreased $261,000 due primarily to the maturity of
a FHLB bond.
Under SFAS No. 115, unrealized gains or losses on securities available-for-sale
are recorded net of deferred income tax as a separate component of stockholders'
equity. At September 30, 2000, the Company included net unrealized gains of
approximately $280,000 in stockholders' equity. At December 31, 1999, the
Company included net unrealized gains of approximately $243,000 in stockholders'
equity. Per SFAS No. 115, such gains or losses will not be reflected as a charge
or credit to earnings until the underlying securities are sold, and then only to
the extent of the amount of gain or loss, if any, actually realized at the time
of sale.
Loans receivable increased by $3.8 million, or 6.0%, from $63.2 million at
December 31, 1999 to $67.0 million at September 30, 2000 as management continued
its efforts to be competitive in meeting the loan demand in the Bank's market
area.
Deposits remained relatively constant at $53.3 million at September 30, 2000 and
December 31, 1999. Advances from FHLB increased approximately $3.0 million from
$4.5 million at December 31, 1999 to $7.5 million at September 30, 2000
reflecting management's decision to obtain FHLB advances, which were available
at attractive rates and used to offset the lack of growth in deposits.
Results of Operations for the Three Months Ended September 30, 2000 and 1999
Net Income
Net income for the three months ended September 30, 2000 was $180,000 compared
to $183,000 for the corresponding period in 1999, a decrease of $3,000, or 1.6%.
The decrease resulted from an increase of $42,000 in non-interest expense offset
by an increase of $7,000 in net interest income, an increase of $6,000 in
non-interest income, and a decrease of $26,000 in income tax expense.
Interest Income
Interest income totaled 7.8% of average assets for the quarter ended September
30, 2000 compared to 7.2% for the quarter ended September 30, 1999. Interest
income increased $175,000, or 14.5%, to $1.4 million for
8
the quarter ended September 30, 2000 from $1.2 million for the quarter ended
September 30, 1999. The increase was due to an increase of 57 basis points in
the effective rate earned on interest-bearing assets for the quarter ended
September 30, 2000 as compared to the quarter ended September 30, 1999, and an
increase in the average earning assets of $4.1 million for the quarter ended
September 30, 2000 compared to the same period in 1999.
Interest Expense
Interest expense totaled $823,000 and $655,000 for the three months ended
September 30, 2000 and 1999, respectively. The increase in interest expense of
$168,000 or 25.5%, for the three months ended September 30, 2000 as compared to
the same period for 1999 was due to an increase of $5.7 million in average
interest bearing liabilities for the quarter ended September 30, 2000 compared
to the same period in 1999 and an increase of 65 basis points in the effective
rate paid on interest bearing liabilities for the quarter ended September 30,
2000 as compared to the quarter ended September 30, 1999.
Provision for Loan Losses
The Bank established a provision for loan losses of $9,000 for both quarters
ended September 30, 2000 and 1999. Management established the Bank's existing
level of its allowance for loan losses based upon its analysis of various
factors, including the market value of the underlying collateral, composition of
the loan portfolio, the Bank's historical loss experience, delinquency trends
and prevailing and projected economic conditions in the Bank's market area.
Non-Interest Income
Non-interest income amounted to $29,000 and $23,000 for the three months ended
September 30, 2000 and 1999, respectively. Non-interest income included
primarily fees charged in connection with loans and service charges on deposit
accounts of $24,000 and $22,000 for the three months ended September 30, 2000
and 1999, respectively.
Non-interest Expense
Non-interest expense totaled $303,000 and $261,000 for the three months ended
September 30, 2000 and 1999, respectively, an increase of $42,000, or 15.9%, and
such expense amounted to 1.7% and 1.5% of average assets for the three month
periods ended September 30, 2000 and 1999, respectively. The increase of $42,000
was due primarily to a $9,000 increase in compensation and benefits, a $16,000
increase in occupancy expenses, a $5,000 increase in data processing expense,
and a $15,000 increase in other operating expenses offset by a decrease of
$3,000 in all other non-interest expense categories. These increases were
primarily related to the opening of a second branch office in Danville, Kentucky
effective June 14, 2000.
Income Taxes
The provision for income taxes for the three months ended September 30, 2000 and
1999 was $93,000 and $119,000, respectively, which as a percentage of income
before income taxes was 34% and 39%, respectively.
9
Results of Operations for the Nine Months Ended September 30, 2000 and 1999
Net Income
Net income for the nine months ended September 30, 2000 was $590,000, as
compared to $550,000 for the corresponding period in 1999, an increase of
$40,000, or 7.3%. The increase resulted primarily from an increase of $108,000
in net interest income, an increase of $3,000 in non-interest income, offset by
a $50,000 increase in non-interest expense and a $21,000 increase in income tax
expense.
Interest Income
Interest income totaled $4.0 million for the nine months ended September 30,
2000, which was $495,000 more than the comparable period in 1999. The increase
in interest income of $495,000, or 14.2%, for the nine months ended September
30, 2000 as compared to the same period for 1999 was due primarily to an
increase of 55 basis points in the effective rate earned on interest bearing
assets plus an increase of $4.0 million in the average balance of interest
earning assets.
Interest Expense
Interest expense totaled $2.3 million for the nine months periods ended
September 30, 2000, which was $387,000 more than the comparable period in 1999.
Interest expense increased due to the increase of $6.0 million in the average
interest bearing liabilities plus the increase of 39 basis points in the
effective rate paid on deposits and FHLB advances.
Provision for Loan Losses
The Bank established a provision for loan losses of $27,000 for both nine month
periods ended September 30, 2000 and 1999. Management considers many factors in
determining the necessary level of the allowance for loan losses, including an
analysis of specific loans in the portfolio, estimated value of the underlying
collateral, assessment of general trends in the real estate market, delinquency
trends, prospective economic and regulatory conditions, inherent loss in the
loan portfolio, and the relationship of the allowance for loan losses to
outstanding loans.
Non-Interest Income
Non-interest income amounted to $69,000 and $66,000 for the nine months ended
September 30, 2000 and 1999, respectively. Noninterest income included primarily
fees charged in connection with loans and service charges on deposit accounts of
$63,000 for both nine-month periods ended September 30, 2000 and 1999.
Non-Interest Expense
Non-interest expense totaled $833,000 and $783,000 for the nine months ended
September 30, 2000 and 1999, respectively, an increase of $50,000 or 6.4%, and
such expense amounted to 1.5% of average assets for both periods. The increase
of $50,000 was due primarily to a $36,000 increase in compensation and benefits,
a $20,000 increase in occupancy expenses, a $10,000 increase in data processing
expenses, and a $9,000 increase in other operating expenses offset by a $9,000
decrease in federal insurance premiums, and a $16,000 decrease in legal and
other professional fees. The increases in compensation and benefits, occupancy
expenses, data processing, and other operating was primarily due to the opening
of a second branch office in Danville, Kentucky effective June 14, 2000. The
decrease of $16,000 in legal and
10
professional fees was attributable to professional services provided in
connection with the Bank's analysis of opening a second branch during the third
quarter of 1999. The decrease of $9,000 in federal insurance premiums was caused
by the decline in the assessment rate.
Income Taxes
The provision for income taxes for the nine months ended September 30, 2000 and
1999 was $304,000 and $283,000, respectively, and, as a percentage of income
before income taxes was 34% for both nine-month periods ended September 30, 2000
and 1999.
Non-Performing Assets
The following table sets forth information with respect to the Bank's
non-performing assets at the dates indicated. No loans were recorded as
restructured loans within the meaning of SFAS No. 15 at the dates indicated.
September 30, December 31,
2000 1999
------------- -------------
(amounts in thousands)
Loans accounted for on a non-accrual basis:/1/
Real Estate:
Residential $ 139 $ 132
Commercial
Consumer 24 28
------------- -------------
Total $ 163 $ 160
============= =============
Accruing loans which are contractually past due 90 days or more:
Real Estate:
Residential 559 140
Commercial
Consumer 6
------------- -------------
Total 559 146
============= =============
Total of loans accounted for as non-accrual or as accruing past
due 90 days or more $ 722 $ 306
============= =============
Percentage of total loans 1.08 .48%
============= =============
Other non-performing assets/2/ $ 33 $ 33
============= =============
Restructured loans $ - $ -
============= =============
/1/Non-accrual status denotes any mortgage loan past due 90 days and whose loan
balance, plus accrued interest exceeds 90% of the estimated loan collateral
value, and any consumer or commercial loan more than 90 days past due. Payments
received on a non-accrual loan are either applied to the outstanding principal
balance or recorded as interest income, or both, depending on assessment of the
collectibility of the loan.
/2/Other non-performing assets represent property acquired by the Bank through
foreclosure or repossession. Such property is recorded initially at its fair
value less selling expenses, and subsequently at the lower of the established
carrying value or fair value less cost to sell.
During the nine months ended September 30, 2000, additional interest income of
$8,031 would have been recorded on loans accounted for on a non-accrual basis if
the loans had been current throughout the year.
11
Interest on such loans actually included in income during the nine months ended
September 30, 2000 totaled $1,545.
At September 30, 2000, there were no loans identified by management, which were
not reflected in the preceding table, but as to which known information about
possible credit problems of borrowers caused management to have serious doubts
as to the ability of the borrowers to comply with present loan repayment terms.
Liquidity and Capital Resources
The Bank's principal sources of funds for operations are deposits from its
primary market area, principal and interest payments on loans, and proceeds from
maturing investment securities. The principal uses of funds by the Bank include
the origination of mortgage and consumer loans and the purchase of investment
securities.
The Bank is required by current OTS regulations to maintain specified liquid
assets of at least 4% of its net withdrawable accounts plus short-term
borrowings. Short-term liquid assets (those maturing in one year or less) may
not be less than 1% of the Bank's liquidity base. During the third quarter of
fiscal year 2000, the Bank satisfied all regulatory liquidity requirements, and
management believes that the liquidity levels maintained are adequate to meet
potential deposit outflows, loan demand, and normal operations.
The Bank must satisfy two capital standards, as set by the OTS. These standards
include a ratio of core capital to adjusted total assets of 4.0%, and a
combination of core and "supplementary" capital equal to 8.0% of risk-weighted
assets. The Bank, at September 30, 2000, was classified as "Well Capitalized"
under current regulatory capital requirements.
At September 30, 2000, the Bank had outstanding commitments to originate loans
totaling $650,000, excluding $1.5 million in approved but unused home equity
lines of credit. Management believes that the Bank's sources of funds are
sufficient to fund all of its outstanding commitments. Certificates of deposits
which are scheduled to mature in one year or less from September 30, 2000
totaled $22.9 million. Management believes that a significant percentage of such
deposits will remain with the Bank.
12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
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 None
Item 6. Exhibits and Reports on Form 8-K
(a) The following Exhibit is filed herewith:
Exhibit 27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CKF Bancorp, Inc.
Date: November 7, 2000 /s/ John H. Stigall
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John H. Stigall, President and Chief Executive Officer
(Duly Authorized Officer)
Date: November 7, 2000 /s/ Ann L. Hooks
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Ann L. Hooks, Vice President and Treasurer
(Principal Financial and Accounting Officer)
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