SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8 - K
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 1998
Adirondack Financial Services Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-43697 14-1801465
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation or organization) Identification No.)
52 North Main Street, Gloversville, NY 12078
(Address of principal executive offices)
(518) 725-6331
(Registrants telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
Item 1. Changes in Control of Registrant.
None
Item 2. Acquisition or Disposition of Assets.
None
Item 3. Bankruptcy or Receivership.
None
Item 4. Changes in registrant's Certifying Accountant.
None
Item 5. Other Events.
On January 20, 1999, the Registrant issued the attached press release.
Item 6. Resignations of Registrant's Directors.
None
Item 7. Financial Statements and Exhibits.
Exhibit 1 - Press Release
Item 8. Change in Fiscal Year.
None
Item 9. Sales of Equity Securities Pursuant to Regulation S.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Adirondack Financial Services Bancorp, Inc.
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(Registrant)
Dated: January 20, 1999 \s\ Lewis E. Kolar
----------------------
Lewis E. Kolar
President and CEO
Dated: January 20, 1999 \s\ Menzo D. Case
----------------------
Menzo D. Case
Executive VP and CFO
Adirondack Financial Services Bancorp, Inc.
Exhibit 1. Press Release
Adirondack Financial Services Bancorp, Inc.
52 North Main Street
Gloversville, NY 12078
NASDAQ Symbol: AFSB
Contact: Menzo D. Case
EVP & CFO
(518) 725-6331
For Immediate Release
Tuesday, January 20, 1999
Adirondack Financial Announces Quarterly Earnings
Gloversville, NY -- Adirondack Financial Services Bancorp, Inc. (Nasdaq OTC:
AFSB) reported that unaudited net income for the quarter ended December 31, 1998
was $104,000 compared to $23,000 for the quarter ended December 31, 1997. Basic
and diluted earnings per share were $.16 and $.17 per common share,
respectively, for the quarter ended December 31, 1998. Per share earnings data
for the three-month period in 1997 is not applicable as the Company converted to
stock form on April 6, 1998.
Total assets were $70.3 million at December 31, 1998 as compared to $68.2
million at September 30, 1998. The increase was primarily attributable to a $2.5
million increase in borrowings offset by a $417,000 decline in deposits.
Gross loans decreased $151,000 and were $50.0 million at December 31, 1998 as
compared to $50.2 million at September 30, 1998. Multi-family and commercial
real estate loans and commercial business loans decreased $555,000 from $11.2
million at September 30, 1998 to $10.7 million at December 31, 1998. One-to-four
family residential mortgages increased $401,000 during the same period.
Nonperforming loans decreased $764,000 from $1.8 million at September 30, 1998
to $1.1 million at December 31, 1998 due primarily to charge-offs on
nonperforming loans of $262,000 as well as the foreclosure of a nonperforming
loan carried at $375,000 which is now classified as OREO. The ratio of
nonperforming loans to gross loans decreased to 2.07% at December 31, 1998 from
3.52% at September 30, 1998.
Deposits decreased $417,000 from $56.8 million at September 30, 1998 to $56.4
million at December 31, 1998. Demand and NOW account balances decreased from
$5.7 million at September 30, 1998 to $5.4 million at December 31, 1998. Savings
and money market accounts were $24.4 million at December 31, 1998 as compared to
$23.9 million at September 30, 1998. Time deposits declined $743,000 from $27.2
million at September 30, 1998 to $26.4 million at December 31, 1998. Borrowings
increased from $2.0 million at September 30, 1998 to $4.4 million at December
31, 1998. The Company increased borrowings as a part of an overall leverage
strategy implemented to increase return on equity.
Net interest income for the quarter ended December 31, 1998 was $673,000, an
increase of $116,000 from $557,000 for the quarter ended December 31, 1997. The
increase is primarily the additional interest income earned from investing the
net proceeds received from the stock conversion offering.
The provision for loan losses was $4,000 and $15,000 for the three month periods
ended December 31, 1998 and 1997, respectively. The allowance for loan losses
was $1.2 million or 117.39% of nonperforming loans at December 31, 1998,
compared to $1.5 million or 81.91% of nonperforming loans at September 30, 1998.
Non-interest expense decreased $5,000 to $552,000 for the three months ended
December 31, 1998 as compared to $556,000 for the same period in the prior year.
Included in non-interest expense for the period ended December 31, 1998 is a
$36,000 gain realized on the sale of foreclosed property. Absent the gain,
operating expenses increased $31,000 quarter to quarter. The increase is
primarily attributable to the higher benefit costs associated with the recently
adopted recognition and retention stock plans and to increased advertising
expense.
Adirondack Financial Services Bancorp, Inc. began trading its stock upon the
completion of its initial subscription offering on April 6, 1998.
Simultaneously, Adirondack Financial became the owner of all of the outstanding
shares of Gloversville Federal Savings and Loan Association. The Company has two
retail offices located in Gloversville, NY and Saratoga Springs, NY.
END
Adirondack Financial Services Bancorp, Inc.
Selected Consolidated Financial Information
At December 31, 1998 At September 30, 1998
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(In Thousands)
Total assets $ 70,306 $ 68,241
Cash and cash equivalents 4,262 4,745
Net loans receivable 50,050 50,201
Mortgage-backed securities available for sale 7,345 3,959
Other securities available for sale 6,336 7,213
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Total securities available for sale 13,681 11,172
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Deposits 56,377 56,793
Borrowings 4,463 2,000
Total equity 9,232 9,155
For the Three Months Ended December 31,
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1998 1997
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(In Thousands)
Interest income $ 1,319 $ 1,184
Interest expense 646 628
Net interest income 673 556
Provision for loan losses 4 15
Net interest income after provision for loan losses 669 541
Total non-interest income 58 53
Non-interest expense 552 555
Income (loss) before income tax expense 175 39
Income tax expense 71 16
Net income (loss) 104 23
Selected Financial Ratios (Annualized) and Other Data
At or For the Three Months Ended
12/31/98 12/31/97
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Performance Ratios:
Return on average assets 0.61% 0.15%
Return on average equity 4.50% 2.69%
Average interest rate spread during period 3.56% 3.72%
Net interest margin 4.04% 3.82%
Ratio of operating expenses to average total assets (1) 3.37% 3.62%
Efficiency ratio (2) 79.48% 89.82%
Ratio of average interest-earning assets
to average interest-bearing liabilities 112.42% 102.54%
Quality ratios:
Non-performing assets to total assets at end of period 2.29% 6.10%
Allowance for loan loss to non-performing loans at end of period 117.39% 44.32%
Allowance for loan losses to gross loans receivable at end of period 2.42% 3.09%
Capital ratios:
Equity to total assets at end of period 13.13% 5.57%
Average equity to average assets 13.47% 5.66%
Other data:
Number of full service offices 2 2
(1) Operating expenses exclude OREO net gains of $29,000 and net expenses of
$8,000 for periods ended December 31, 1998 and 1997, respectively.
(2) The efficiency ratio represents opeating expenses (as defined above) divided
by the sum of net interest income and other income.