1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ----- to -----
Commission file number 0-19611
CITFED BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 31-1332674
(State of other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
ONE CITIZENS FEDERAL CENTRE, DAYTON, OHIO 45402
(Address of principal executive offices) (Zip code)
(937) 223-4234
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
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 report), and (2) has been subject to such filing
requirements for the past 90 days.
YES X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock November 8, 1996
--------------------- ----------------
$.01 par value 5,722,928
2
CITFED BANCORP, INC.
FORM 10-Q
INDEX
Page No.
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PART I. Financial Information
Item 1. Financial Statements:
Consolidated Statements of Financial
Condition as of September 30, 1996
and March 31, 1996 1
Consolidated Statements of Operations
for the Three and Six Months ended
September 30, 1996 and 1995 2
Consolidated Statement of Stockholders'
Equity for the Six Months ended
September 30, 1996 3
Consolidated Statements of Cash Flows
for the Six Months ended
September 30, 1996 and 1995 4
Notes to Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Signatures 21
Exhibit Index 22
3
CITFED BANCORP, INC. AND SUBSIDIARIES
FORM 10Q
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1996 AND MARCH 31, 1996
(Dollars in thousands)
Part 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS SEPTEMBER 30, MARCH 31,
1996 1996
------------ ---------
(unaudited)
ASSETS
------
CASH AND DEMAND DEPOSITS $ 26,682 $ 23,047
Interest-bearing time deposits and cash equivalents 17,567 29,677
---------- ----------
TOTAL CASH AND EQUIVALENTS 44,249 52,724
Investment securities held to maturity 223,221 188,743
Mortgage-backed securities available for sale 732,567 655,679
Loans (less allowance for loan losses of $17,811 and $16,330
at September 30, 1996 and March 31, 1996, respectively) 1,546,361 1,445,844
Loans held for sale 31,112 75,656
Accrued interest receivable:
Investment securities 3,732 2,479
Loans 9,118 8,929
Mortgage-backed securities 4,056 3,578
Real estate held for sale, net 6,739 5,862
Federal Home Loan Bank stock, at cost 37,362 31,908
Office properties and equipment, net 19,258 20,039
Cost in excess of fair value of net assets acquired 21,769 23,219
Other assets 68,073 83,226
---------- ----------
TOTAL $2,747,617 $2,597,886
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Deposits $1,561,842 $1,649,265
Advances from Federal Home Loan Bank 724,106 602,504
Other borrowings 256,020 145,557
Other liabilities 30,620 26,451
---------- ----------
TOTAL LIABILITIES 2,572,588 2,423,777
STOCKHOLDERS' EQUITY:
Serial Preferred Stock, ($.01 par value),
Authorized 5,000,000 shares; none outstanding
Common Stock ($.01 par value),
Authorized 20,000,000 shares; 5,721,194 outstanding 57 57
Additional paid-in capital 55,190 54,718
Retained earnings-substantially restricted 126,041 123,743
Unearned ESOP shares (632) (632)
Net unrealized loss on securities available for sale (5,306) (3,402)
Unearned compensation - restricted stock awards (321) (375)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 175,029 174,109
---------- ----------
TOTAL $2,747,617 $2,597,886
========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 1996 and 1995
(DOLLARS IN THOUSANDS, except per share data)
Three Months Ended Six Months Ended
September 30, September 30,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- --------
INTEREST INCOME: (unaudited)
Loans $30,632 $29,043 $60,167 $56,756
Mortgage-backed securities 12,510 8,442 23,176 17,048
Investments 3,756 2,645 7,166 5,617
Other 661 881 1,269 1,376
------- ------- ------- -------
Total interest income 47,559 41,011 91,778 80,797
------- ------- ------- -------
INTEREST EXPENSE:
Deposits 17,738 18,326 35,775 36,174
Borrowings 12,958 8,606 23,320 17,111
------- ------- ------- -------
Total interest expense 30,696 26,932 59,095 53,285
------- ------- ------- -------
NET INTEREST INCOME 16,863 14,079 32,683 27,512
Provision for loan losses 1,050 300 1,500 600
------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 15,813 13,779 31,183 26,912
------- ------- ------- -------
NON-INTEREST INCOME (LOSS):
Servicing fees and charges:
Consumer banking 3,300 2,359 6,136 4,490
Trust 865 635 1,766 1,235
Mortgage loan origination & servicing, net 2,664 1,790 5,076 3,589
Gain (loss) on sale of earning assets:
Mortgage servicing rights 0 2,060 0 3,662
Investments 0 63 0 63
Loans and mortgage-backed securities 0 26 0 50
Land held for development (30) (19) (110) (36)
Gain (loss) on sale:
Office properties and equipment (4) 1 32 1
Provision for losses on real estate held for sale (9) (9) (18) (19)
Other 584 157 1,091 367
------- ------- ------- -------
Total non-interest income 7,370 7,063 13,973 13,402
------- ------- ------- -------
NON-INTEREST EXPENSES:
Salaries and benefits 6,800 5,946 13,251 11,947
Occupancy and equipment 3,278 3,219 6,487 6,449
Amortization of cost in excess of fair value of
net assets acquired 725 723 1,450 1,475
SAIF recapitalization charge 10,293 0 10,293 0
FDIC premiums and OTS assessments 1,025 1,038 2,030 1,953
Marketing and advertising 551 486 1,023 929
Franchise Tax 396 435 793 866
Other 2,662 3,057 5,130 5,484
------- ------- ------- -------
Total non-interest expenses 25,730 14,904 40,457 29,103
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES (2,547) 5,938 4,699 11,211
Income tax provision (benefit) (661) 2,169 1,549 3,759
------- ------- ------- -------
NET INCOME (LOSS) $(1,886) $ 3,769 $ 3,150 $ 7,452
======= ======= ======= =======
EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARES $ (0.32) $ .64 $ .53 $ 1.27
======== ======= ======= =======
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For The Six Months Ended September 30, 1996
(Dollars in thousands)
ADDITIONAL NET UNREALIZED OTHER
OUTSTANDING COMMON PAID-IN RETAINED (LOSS) GAIN ON SECURITIES EQUITY
(unaudited) SHARES STOCK CAPITAL EARNINGS AVAILABLE FOR SALE ADJUSTMENTS
----------- -------- ---------- -------- ------------------------- ------------
BALANCE, MARCH 31, 1996 5,685,567 $57 $54,718 $123,743 $(3,402) $(1,007)
Net Income 3,150
Dividends Paid (852)
Change in net unrealized
(Loss) Gain on securities
Available for sale (1,904)
Stock options exercised 37,149 454
Shares retired (2,022)
ESOP compensation 72
Restricted Stock awards:
Compensation 500 18 (18)
--------- --- ------- -------- ------- -------
BALANCE, SEPT. 30, 1996 5,721,194 $57 $55,190 $126,041 $(5,306) $ (953)
========= === ======= ======== ======= =======
TOTAL
STOCKHOLDERS'
(unaudited) EQUITY
-----------------
BALANCE, MARCH 31, 1996 $174,109
Net Income 3,150
Dividends Paid (852)
Change in net unrealized
(Loss) Gain on securities
Available for sale (1,904)
Stock options exercised 454
Shares retired
ESOP compensation 72
Restricted Stock awards:
Compensation 0
--------
BALANCE, SEPT. 30, 1996 $175,029
========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended September 30, 1996 and 1995
(Dollars in thousands)
Six Months Ended
September 30,
----------------------
(Unaudited) 1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,151 $ 7,452
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,439 1,895
Amortization of intangibles 1,320 5,874
Amortization of deferred loan fees (352) (655)
(Increase) decrease in loans held for sale 42,880 (18,837)
FHLB stock dividends (561) (962)
(Gain) loss on sale of earning assets 1,742 (429)
Provision for loan and REO losses 1,518 619
ESOP and RRP 62 107
Increase in accrued interest receivable (1,920) (1,832)
(Increase) decrease in other assets 18,257 (1,778)
Increase (decrease) in other liabilities, net 5,195 (2,296)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 72,731 (10,842)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment securities:
Purchased (55,730) (38,207)
Matured/principal collected 21,247 32,008
Mortgage-backed securities held to maturity:
Principal collected 16,177
Mortgage-backed securities available for sale:
Purchased (139,018) (9,701)
Sold 1,939
Principal collected 59,247 13,822
Loans held for investment:
Originated (260,253) (202,247)
Principal collected 156,605 102,756
Gain on sale of mortgage servicing rights 3,662
Purchased and originated mortgage servicing rights (3,060) (4,012)
Purchases/Redemptions of FHLB stock (4,892) 2,184
Proceeds from real estate sold 1,105 859
Real estate acquired for development and sale (95) (242)
Office properties and equipment, net (605) (1,051)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES $(225,449) (82,053)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits, net (87,423) 24,662
FHLB advances:
Borrowings 749,200 755,500
Payments (627,598) (711,703)
Other borrowings 112,726 96,744
Payments (2,263) (96,933)
Common stock issuances 454 152
Cash dividends paid (853) (709)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 144,243 67,713
--------- ---------
NET DECREASE IN CASH AND EQUIVALENTS (8,475) (25,182)
Cash and equivalents, beginning of year 52,724 72,660
--------- ---------
CASH AND EQUIVALENTS, END OF YEAR $ 44,249 $ 47,478
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 58,059 $ 50,706
========= =========
Income taxes paid (received) $ 3,950 ($626)
========= =========
SUPPLEMENTAL OF NON-CASH INVESTING ACTIVITIES:
Transfer of loans to foreclosed real estate $ 2,016 $ 1,806
========= =========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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CITFED BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended September 30, 1996 and 1995
(Unaudited)
1. BASIS OF PRESENTATION
The foregoing consolidated financial statements as of September 30, 1996
and 1995, and for the three and six months ended September 30, 1996 and 1995
are unaudited. However, in the opinion of management, all adjustments (which
consist of normal recurring accruals) necessary for a fair presentation of the
consolidated financial statements have been included. Results for any interim
period are not necessarily indicative of results to be expected for the year.
The interim consolidated financial statements include the accounts of CitFed
Bancorp, Inc. (the "Corporation"), its subsidiary, Citizens Federal Bank,
F.S.B. (the "Bank" or "Citizens Federal") and the Bank's subsidiaries.
2. COMMITMENTS AND CONTINGENCIES
At September 30, 1996, the Bank had outstanding commitments to originate
and purchase loans aggregating approximately $56.6 million. The commitments
extend over varying periods of time with the majority being disbursed within
thirty days. Loan commitments with interest rates established with the
borrower amounted to $45.1 million; the remainder are at floating rates. The
Bank had outstanding mandatory and optional forward commitments to sell loans
and mortgage-backed securities of $54.5 million at September 30, 1996.
The Corporation and its subsidiaries are defendants in certain lawsuits
arising in the ordinary course of business. Management, after review with its
legal counsel, is of the opinion that the resolution of these legal matters
will not have a material adverse effect on the Corporation's financial position
or results of operations.
3. SUBSIDIARY OPERATIONS
CitFed Bancorp has four subsidiaries:
Citizens Federal Bank, F.S.B. CitFed Mortgage Corporation of America
(federal savings bank) (mortgage banking)
C. F. Property Management Company Dayton Financial Services Corporation
(which does business as CitFed Investment (residential land development)
Group) (mutual fund and insurance sales)
Earnings (losses): THREE MONTHS ENDED SIX MONTHS ENDED
(In thousands) SEPT. 30, SEPT. 30
------------ ----------
1996 1995 1996 1995
---- ---- ---- ----
Citizens Federal Bank $(2,222) $3,352 $2,485 $ 6,430
CitFed Mortgage 752 1,343 1,488 2,344
CitFed Investment Group 78 (11) 175 6
Dayton Financial (45) (44) (103) (61)
CitFed Bancorp (including consolidating entries) (450) (871) (895) (1,267)
------- ------ ------ -------
NET INCOME (LOSS) $(1,887) $3,769 $3,150 $ 7,452
======= ====== ====== =======
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4. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings per common and common equivalent share for the three and six
months ended September 30, 1996 and 1995 are divided by the weighted average
number of common shares and common share equivalents outstanding during the
period. Average common and common stock equivalents outstanding for the three
month period ended September 30, 1996 and 1995 were 5,921,949 and 5,876,633,
respectively. Average common and common stock equivalents outstanding for the
six month period ended September 30, 1996 and 1995 were 5,911,255 and
5,875,864, respectively. Stock options are considered common share
equivalents.
5. DIVIDEND
The Board of Directors declared on October 18, 1996, a 50% stock dividend,
which will have the effect of a 3-for-2 stock split payable November 29, 1996,
to stockholders of record on November 15, 1996. The Corporation also declared
on October 18, 1996, a post-split quarterly dividend of $0.08 per share payable
December 2, 1996 to stockholders of record on November 15, 1996. The total
amount of the dividend will be approximately $686,750.
6. ACCOUNTING FOR MORTGAGE SERVICING RIGHTS
Effective April 1, 1996, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage
Servicing Rights" ("SFAS 122"). SFAS 122 requires that a mortgage banking
enterprise recognize, as separate assets, rights to service mortgage loans for
others that have been acquired through either the purchase or origination of a
loan. A mortgage banking enterprise that sells or securitizes those loans with
servicing rights retained should allocate the total cost of the mortgage loans
sold or securitized to the mortgage servicing rights ("MSR's") and the loans
based on their relative fair values. Additionally, SFAS 122 requires that
MSR's be periodically assessed for impairment and reported on the Consolidated
Statement of Financial Condition at the lower of cost or fair value. As a
result of adopting SFAS 122, the Corporation capitalized $2.7 million of MSR's
from its retail lending operations.
The fair value of capitalized MSR's is calculated, on a disaggregated
basis, by discounting estimated expected future cash flows using a discount
rate commensurate with the risk involved. In using this valuation method, the
Bank used assumptions that market participants would use in estimating future
net servicing income which included estimates of the cost of servicing per
loan, the discount rate, float value, inflation rate, ancillary income per
loan, prepayment speeds and default rates. The Bank conducts its periodic
impairment analyses using a disaggregated method, based on the underlying
loans' interest rates and loan type. There was no valuation allowance recorded
at September 30, 1996.
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7. ACCOUNTING FOR STOCK-BASED COMPENSATION
On April 1, 1996, the Corporation adopted Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123"). SFAS 123 establishes optional financial accounting standards and
additional disclosure requirements for stock-based employee compensation plans.
The Corporation is retaining its current accounting method for its stock-based
employee compensation plans, and as such, its adoption of SFAS 123 has had no
material impact on the Corporation's financial condition or results of its
operations.
8. ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED OF
On April 1, 1996, the Corporation adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of" ("SFAS 121"). SFAS 121
requires that long-lived assets and certain identifiable intangibles, and
goodwill related to those assets to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Adoption of this statement
did not have a material impact on the financial condition or results of
operations of the Corporation.
9. RECLASSIFICATIONS
Certain amounts for prior periods have been reclassified for comparative
purposes to conform with the current year's presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Corporation is a Delaware corporation organized on January 25, 1991 for
the purpose of acquiring all of the outstanding capital stock of Citizens
Federal which was issued on January 29, 1992. Citizens Federal is a
federally-chartered stock savings bank headquartered in Dayton, Ohio. The Bank
has 33 offices in a seven county area that comprises the greater Dayton area. In
addition, through the Bank's wholly owned subsidiary, CitFed Mortgage
Corporation of America (the "CitFed Mortgage"), it operates thirteen mortgage
loan origination offices in Dayton, Columbus and Cincinnati, Ohio; Indiana,
Kentucky, Virginia and North Carolina.
FORWARD-LOOKING STATEMENT
When used in this Quarterly Report on Form 10-Q, the words or phrases
"will likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks
and uncertainties - including, changes in economic conditions in the Company's
market area, changes in policies by regulatory agencies, fluctuations in
interest rates, demand for loans in the Company's market area and competition,
that could cause actual results to differ materially from historical earnings
and those
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presently anticipated or projected. The Company wishes to caution readers not
to place undue reliance on any such forward-looking statements, which speak
only as of the date made. The Company wishes to advise readers that the
factors listed above could affect the Company's financial performance and could
cause the Company's actual results for future periods to differ materially from
any opinions or statements expressed with respect to future periods in any
current statements.
The Company does not undertake -- and specifically disclaims any
obligation -- to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
RESULTS OF OPERATIONS
Citizens Federal's results of operations depend primarily upon the level
of net interest income, which is the difference between the interest income
earned on its interest-earning assets such as loans and investments, and the
costs of the Bank's interest-bearing liabilities, primarily deposits and
borrowings. Results of operations are also dependent upon the level of the
Bank's non-interest income, including fee income and service charges, and
affected by the level of its non-interest expenses, including its general and
administrative expenses. Net interest income depends upon the volume of
interest-earning assets and interest-bearing liabilities and the interest rate
earned or paid on them, respectively.
Net Income: For the three months ended September 30, 1996, the
Corporation incurred a net loss of $1.9 million compared to net income of $3.8
million for the three months ended September 30, 1995. The current quarter's
loss was attributable to a one-time charge of $7.2 million (net of tax) for the
recapitalization of the Savings Association Insurance Fund ("SAIF") resulting
from legislation enacted on September 30, 1996. (See "Regulatory
Developments") Net income without the SAIF recapitalization for the three
month period ended September 30, 1996 would have been $5.3 million as compared
to $3.8 million for the three month period ended September 30, 1995, resulting
in an increase of $1.5 million, or 41.1%.
Net income for the six months ended September 30, 1996 was $3.2 million
compared to $7.5 million for the same period a year ago. Without the SAIF
recapitalization charge, net income for the six months ended September 30, 1996
would have been $10.4 million, or a 39.0% increase over the same period in
fiscal 1996.
Interest Income: Total interest income increased $6.5 million, or 16.0%
from $41.0 million for the second quarter of fiscal 1996 to $47.6 million for
the second quarter of fiscal 1997. Of this increase, $9.7 million resulted
from an increase of $397.3 million in the average balance of interest-earning
assets, primarily loans receivable and mortgage-backed securities. The
offsetting $3.2 million decrease resulted from a 14 basis point decrease in the
weighted average yield on interest-earning assets.
Total interest income increased $11.0 million, or 13.6% from $80.8 million
for the six months ended September 30, 1995, to $91.8 million for the six
months ended September 30, 1996. Of this increase, $13.3 million resulted from
a $334.7 million increase in the average balance of interest-earning assets.
The offsetting $2.3 million decrease resulted from a 12 basis point decrease in
the average yield on interest-earning assets.
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Management decided, throughout fiscal 1996 and 1997, to grow the Bank's
assets by increasing its permanent portfolio of consumer and one- to
four-family loans held for investment. As a result, the average balance of
loans increased $108.8 million from September 1995 to September 1996. In
addition, purchases during this same period have resulted in an increase in the
average balance of mortgage-backed securities and investment securities of
$238.2 million and $52.4 million, respectively.
Interest Expense: Total interest expense increased $3.8 million, or
14.0% from $26.9 million for the second quarter of fiscal 1996 to $30.7 million
for the second quarter of fiscal 1997. Of this increase, $10.3 million was the
result of an increase of $365.2 million in the average balance of
interest-bearing liabilities. The offsetting $6.5 million decrease related to
a 13 basis point decrease in the cost of funds.
Total interest expense increased $5.8 million, or 10.9% from $53.3 million
for the six months ended September 30, 1995, to $59.1 million for the six
months ended September 30, 1996. Of this increase $12.5 million was the result
of a $310.6 million increase in the average balance of interest-bearing
liabilities. The offsetting $6.7 million related to a 16 basis point decrease
in the cost of funds.
The Bank's average deposits decreased $14.2 million for the second quarter
of fiscal 1997 as compared to the second quarter of fiscal 1996 primarily due
to a $23.3 million decrease in demand and money market deposits partially
offset by a $6.7 million increase in retail certificates of deposit. In
addition, FHLB advances and securities sold under agreements to repurchase
increased $271.3 million and $108.3 million, respectively. These increases
were necessary to fund the asset growth planned by management and to fund the
reduction in deposits.
Rate/Volume Analysis. The following table presents the dollar amount of
changes in interest income and interest expense for major components of
interest-earning assets and interest-bearing liabilities. For each category of
interest-earning assets and interest-bearing liabilities, information is
provided on changes attributable to (i) changes in rate (i.e., changes in rate
multiplied by old volume) and (ii) changes in volume (i.e., changes in volume
multiplied by old rate). For purposes of this table, changes attributable to
both rate and volume which cannot be segregated have been allocated
proportionately to the change due to rate and the change due to volume.
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RATE/VOLUME ANALYSIS
(In Thousands) 3 Months Ended Sept. 30,
|---------------- 1996 vs 1995 ---------------------|
Total
Increase(Decrease) Due to Increase
Volume Rate (Decrease)
------ ---- ---------
Interest-Earning Assets:
Loans receivable $ 4,899 $(3,310) $1,589
Mortgage-backed securities 4,017 51 4,068
Investment securities 849 262 1,111
Other (29) (191) (220)
------- ------- ------
Total interest-earning assets $ 9,736 $(3,188) $6,548
======= ======= ------
Interest-Bearing Liabilities:
Deposits:
NOW Accounts 136 (329) (193)
Savings Deposits (7) (231) (238)
Money Market Deposits (111) 24 (87)
Certificates of Deposits 480 (550) (70)
FHLB advances 6,497 (3,304) 3,193
Securities sold under agreement
to repurchase 3,290 (2,174) 1,116
Other Borrowings (14) 57 43
------- ------- ------
Total interest-bearing liabilities $10,271 $(6,507) 3,764
======= ======= ------
Net interest income $2,784
======
RATE/VOLUME ANALYSIS
(In Thousands) 6 Months Ended Sept. 30,
|---------------- 1996 vs 1995 ---------------------|
Total
Increase(Decrease) Due to Increase
Volume Rate (Decrease)
------ ---- ----------
Interest-Earning Assets:
Loans receivable $ 5,344 $(1,933) $ 3,411
Mortgage-backed securities 6,581 (453) 6,128
Investment securities 1,405 144 1,549
Other (51) (56) (107)
------- ------- -------
Total interest-earning assets $13,279 $(2,298) $10,981
======= ======= -------
Interest-Bearing Liabilities:
Deposits:
NOW Accounts 120 (286) (166)
Savings Deposits (28) (336) (364)
Money Market Deposits (228) (14) (242)
Certificates of Deposits 1,044 (671) 373
FHLB advances 8,718 (3,774) 4,944
Securities sold under agreement
to repurchase 2,925 (1,633) 1,292
Other Borrowings (4) (23) (27)
------- ------- -------
Total interest-bearing liabilities $12,547 $(6,737) 5,810
======= ======= -------
Net interest income $ 5,171
=======
Net Interest Margin. The following table presents, for the periods
indicated, the total dollar amount of interest income from average
interest-earning assets and the resultant yields, as well as the interest
expense on average interest-bearing liabilities, and the resultant rates and
the net interest margin. No tax equivalent adjustments have been made. All
average balances are daily average balances.
The ratio of average interest-earning assets to average interest-bearing
liabilities increased to 102.2% for the six months ended September 30, 1996, as
compared to 101.4% for the same period last year. Although the weighted
average interest rate declined for both interest-earning assets and
interest-bearing liabilities, the decline was greater for interest-bearing
liabilities resulting in an increased interest spread.
Page 10
13
Three months ended September 30,
1996 1995
---------------------------------- -------------------------------
Average Interest Yield/ Average Interest Yield/
Outstanding Earned/ Weighted Outstanding Earned/ Weighted
Balance Paid Rate Balance Paid Rate
----------- -------- ----------- ----------- -------- --------
(Dollars in thousands)
Interest-Earning Assets:
Loans receivable (1) $1,540,967 $ 30,632 7.95% $1,432,189 $29,043 8.11%
Mortgage-backed securities 741,206 12,510 6.75 502,977 8,442 6.71
Investment securities 227,262 3,756 6.61 174,836 2,645 6.05
Other 59,412 661 4.45 61,503 881 5.73
---------- -------- ------ ---------- ------- ------
Total interest-earning assets $2,568,847 $ 47,559 7.41% $2,171,505 $41,011 7.55%
========== -------- ------ ========== ------- ------
Interest-Bearing Liabilities:
Deposits:
NOW account $175,660 $ 858 1.95% $ 172,198 $ 1,051 2.44%
Demand deposits 112,529 0 0.00 125,199 0 0.00
Savings deposits 211,369 1,308 2.48 212,367 1,546 2.91
Money Market deposits 131,543 1,111 3.38 142,214 1,198 3.37
Certificates of deposit 955,160 14,461 6.06 948,485 14,531 6.13
FHLB advances 711,268 9,738 5.48 439,986 6,545 5.95
Securities sold under agreements
to repurchase 175,613 2,363 5.38 67,351 1,247 7.41
Other borrowings 41,167 857 8.33 41,274 814 7.89
---------- -------- ------ ---------- ------- ------
Total interest-bearing liabilities $2,514,309 30,696 4.88% $2,149,074 26,932 5.01%
========== -------- ------ ========== ------- ------
Net interest income; interest
rate spread $ 16,863 2.53% $14,079 2.54%
======== ====== ======= ======
Net interest margin (2) 2.63% 2.59%
===== =====
Average interest-earning assets to
average interest-bearing liabilities 102.17% 101.04%
====== ======
Six months ended September 30,
1996 1995
-------------------------------- -------------------------------
Interest-Earning Assets:
Loans receivable (1) $1,521,698 $60,167 7.91% $1,416,781 $56,756 8.01%
Mortgage-backed securities 700,107 23,176 6.62 510,775 17,048 6.68
Investment securities 218,032 7,166 6.57 175,237 5,617 6.41
Other 57,754 1,269 4.39 60,049 1,376 4.58
---------- ------- ----- ----------- ------- -----
Total interest-earning assets $2,497,591 $91,778 7.35% $2,162,842 $80,797 7.47%
========== ------- ------ =========== ------- ------
Interest-Bearing Liabilities:
Deposits:
NOW account $ 177,341 $ 1,854 2.09% $ 173,405 $ 2,020 2.33%
Demand deposits 121,577 0 0.00 122,350 0 0.00
Savings deposits 212,095 2,621 2.47 214,131 2,985 2.79
Money Market deposits 131,671 2,202 3.34 145,291 2,444 3.36
Certificates of deposit 963,171 29,098 6.04 942,124 28,725 6.10
FHLB advances 658,304 17,945 5.45 426,823 13,001 6.09
Securities sold under agreements
to repurchase 138,013 3,652 5.29 67,351 2,360 7.01
Other borrowings 41,188 1,723 8.37 41,282 1,750 8.48
---------- ------- ------ ---------- ------- ------
Total interest-bearing liabilities $2,443,360 59,095 4.84% $2,132,757 53,285 5.00%
========== ------- ------ ========== ------- ------
Net interest income; interest
rate spread $32,683 2.51% $27,512 2.47%
======= ===== ======= =====
Net interest margin (2) 2.62% 2.54%
====== ======
Average interest-earning assets to
average interest-bearing liabilities 102.22% 101.41%
====== ======
(1) Average balances for loans receivable include average balances for
non-accrual loans.
(2) Net interest margin is net interest income divided by average
interest-earning assets.
Page 11
14
Provision for Loan Losses. The Bank's provision for loan losses was $1.5
million for the six months ended September 30, 1996, compared to a provision of
$600,000 for the six months ended September 30, 1995. Both provisions reflect
the Bank's continuing evaluation of its loan portfolio, the growth of the
portfolio, and the effect thereon from general economic conditions.
Management's estimate of the adequacy of its general allowances for loan
losses is based upon an analysis of the Bank's loan portfolio including such
factors as prior loan loss experiences, economic conditions affecting the real
estate market, regulatory considerations and other matters.
The following table sets forth an analysis of the Bank's allowance for
loan losses at the dates indicated.
Six Months Ended
September 30,
1996 1995
--------- ---------
(Dollars in thousands)
Balance at beginning of period $16,330 $15,782
------- -------
Charge-offs:
One-to four-family real estate (125) (44)
Other real estate (6) (975)
Consumer (167) (22)
Commercial business (20) 0
------- -------
Total charge-offs (318) (1,041)
------- -------
Recoveries:
One-to four-family real estate 38 47
Other real estate 201 83
Consumer 40 28
Commercial business 20 53
------- -------
Total recoveries 299 211
------- -------
Net recoveries (charge-offs) (19) (830)
Transfer from REO (for adoption of FAS #114) 0 110
Provisions 1,500 600
------- -------
Balance at end of period $17,811 $15,662
======= =======
Ratio of net recoveries (charge-offs) during the period
to average loans outstanding during the period (0.00%) (0.06%)
======= =======
Ratio of allowance to non-performing loans
at end of period. 90.09% 159.69%
======= =======
Management believes that the relationship of the allowance to total loans
and to non-performing loans is adequate based on all information currently
available. See "Asset Quality."
Page 12
15
The ratio of the allowance to non-performing loans decreased to 90.09% at
September 30, 1996, compared to 159.69% for the same period one year ago
primarily because of the increase in non-performing loans from $9.8 million to
$19.8 million. This increase was the result of the Bank placing its 1%
participation in a first mortgage loan on two office buildings in New York City
amounting to $9.3 million on non-accrual status during the December 1995
quarter. This was the result of the debtors filing for Chapter 11 bankruptcy
protection. The Bank has a $2.5 million reserve recorded on this loan at
September 30, 1996, and no additional reserves were considered necessary based
on management's analysis of this loan.
Non-Interest Income: Non-interest income for the three months ended
September 30, 1996, totaled $7.4 million as compared to $7.1 million for the
same period a year ago, an increase of $307,000, or 4.3%. Non-interest income
for the six months ended September 30, 1996, totaled $14.0 million as compared
to $13.4 million for the same period a year ago, an increase of $571,000, or
4.3%.
Consumer banking fees and charges increased 39.9% to $3.3 million for the
three months ended September 30, 1996, up from $2.4 million for the same period
last year. This increase continued to reflect the benefits of increases in the
number of checking accounts and fees associated with these accounts and
increased fees associated with consumer and commercial loan activities.
Consumer banking fees and charges increased 36.7% to $6.1 million for the six
months ended September 30, 1996, up from $4.5 million for the same period last
year.
Trust and investment services fee income for the second quarter of fiscal
1997 increased 36.2% to $865,000 compared to $635,000 for the second quarter of
fiscal 1996. Administered trust assets were $412.2 million at September 30,
1996, compared with $396.5 million at September 30, 1995. CitFed Investment
Group initiated a new program during the first quarter of fiscal 1996 to
facilitate the sale of mutual funds and insurance products through the Bank's
retail branches. Commission revenue from CitFed Investment Group was $312,000
for the second quarter of fiscal 1997, compared to $163,000 for the second
quarter of fiscal 1996. Trust and investment service fee income for the six
months ended September 30, 1996, increased 43.0% to $1.8 million from $1.2
million for the same period a year ago.
Income from mortgage banking operations increased by 48.8% in the second
quarter of fiscal 1997 to $2.7 million, up from $1.8 million for the same
period a year ago. This increase was due primarily to $1.1 million of income
recognized from the adoption of SFAS 122 during the period. See Note 6 of the
Notes to Consolidated Financial Statements under Item 1 of this Part I.
Without the effects of SFAS 122, mortgage banking fee income would have
declined by $231,000. This decline was primarily due to secondary marketing
losses which were $570,000 higher in the second quarter of fiscal 1997 compared
to the same period a year ago. Income from mortgage banking operations
increased by 41.4% for the six months ended September 30, 1996, to $5.1
million, as compared to $3.6 million for the same period last year.
Page 13
16
CitFed Mortgage maintains the flexibility to either sell servicing rights
for current income and cash flow or retain servicing for future income. The
decision to sell or retain servicing is based on current market conditions, as
well as, CitFed Mortgage's financial objectives. To help offset lower
origination revenues in the second quarter of fiscal 1996, CitFed Mortgage sold
$167.7 million of mortgage loan servicing rights generating a gain of $2.1
million. During the second quarter of fiscal 1997 there were no servicing
rights sold. Mortgage loan closings totaled $164.3 million for the three
months ended September 30, 1996, compared to $184.1 million for the three
months ended September 30, 1995, a decrease of 10.7%.
Non-Interest Expenses: Non-interest expenses for the three months ended
September 30, 1996 were $25.7 million, which includes the one-time SAIF
recapitalization charge of $10.3 million. Without the SAIF recapitalization
charge, non-interest expenses were $15.4 million for the three months ended
September 30, 1996, compared to $14.9 million for the same period a year ago,
an increase of $533,000, or 3.6%. See "Regulatory Development" herein.
Non-interest expenses for the six months ended September 30, 1996 were
$30.2 million without the SAIF recapitalization charge, compared to $29.1
million for the six months ended September 30, 1995, an increase of $1.1
million, or 3.6%.
Salaries and benefits increased $854,000 over the prior year's second
quarter from normal wage increases during the quarter and the opening of
Williamsburg, Virginia and Indianapolis, Indiana mortgage origination offices.
Salaries and benefits increased by $1.3 million to $13.3 million for the six
months ended September 30, 1996, as compared to $11.9 million for the same
period a year ago, a 10.9% increase.
Income Tax Provision: The Bank had a net income tax benefit for the
three months ended September 30, 1996, of 26.0% because of the one-time SAIF
assessment incurred. Without the SAIF assessment, the effective tax rate was
31.3% for the second quarter of fiscal 1997 compared to 36.5% for the second
quarter of fiscal 1996.
For the six months ended September 30, 1996, the effective tax rate
decreased to 33.0%, compared to 33.5% for the six months ended September 30,
1995.
Page 14
17
ASSET QUALITY
Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Bank's loan portfolio as of the
dates indicated below.
Sept. 30, March 31,
1996 1996
---------- ----------
(Dollars in thousands)
Non-Performing Assets
Non-accruing loans:
One- to four-family $ 6,562 $ 4,595
Multi-family and commercial real estate 12,967 12,760
Consumer 44 38
Commercial business 197 303
------- -------
Total 19,770 17,696
------- -------
Foreclosed assets:
One- to four-family 2,524 823
Multi-family and commercial real estate 2,709 3,449
------- -------
Total 5,233 4,272
------- -------
Total non-performing assets $25,003 $21,968
======= =======
Non-performing loans to total loans 1.26% 1.21%
==== ====
Non-performing assets to total assets 0.91% 0.85%
==== ====
The $3.0 million increase in non-performing assets from March 31, 1996 to
September 30, 1996, was the result of several factors. Non-accruing one-to
four-family mortgage loans increased $2.0 million during the period. Sixty
loans totaling $5.4 million were placed on non-accrual status, eight loans
totaling $915,000 were transferred to foreclosed assets, twenty loans totaling
$1.2 million were returned to accruing status and fourteen loans totaling $1.2
million were paid off.
Non-accruing multi-family and commercial real estate loans increased
$207,000 for the period. Five loans for $1.1 million were added to
non-accrual status and four loans totaling $858,000 were paid in full.
Foreclosed assets increased $961,000 for the period. Fourteen residential
properties totaling $2.0 million (net of $21,000 in loss reserves) were added,
and four properties totaling $302,000 were sold. Seven commercial properties
totaling $667,000 were sold. The reserve for foreclosed assets increased by
$73,000 from net recoveries of $55,000 and a provision of $18,000.
Page 15
18
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY--The Corporation conducts its business through its subsidiary,
Citizens Federal and Citizens Federal's subsidiaries. The main source of funds
for the Corporation are dividends from the Bank. The Bank meets the OTS
regulatory capital requirements that would allow the Bank to declare and pay
capital distributions to the Corporation. The Corporation is not subject to
any OTS regulatory restrictions on the payment of dividends to its
stockholders. The Board of Directors of the Corporation declared on October
18, 1996, a three-for-two stock split in the form of a stock dividend and a
cash dividend on its common stock of eight cents ($0.08) per share. The stock
dividend will be paid on November 29, 1996 to stockholders of record on
November 15, 1996. The cash dividend will be based upon the post-split shares
and will be paid on December 2, 1996 to stockholders of record on November 15,
1996.
The Bank's principal sources of funds include deposits, advances from the FHLB,
reverse repurchase agreements, repayments on loans and mortgage-backed
securities, maturities of investment securities, proceeds from the sale of
loans, mortgage-backed and investment securities available for sale, funds
provided by operations and capital invested by the Corporation. Investment
maturities and scheduled amortization of loans and mortgage-backed securities
are generally a predictable source of funds. Deposit flows and mortgage
prepayments are influenced by the general level of interest rates, economic
conditions, competition and the restructuring of the thrift industry.
Management also considers the Corporation's interest sensitivity "gap" when
considering alternative sources of funds. At September 30, 1996, the
Corporation's one-year gap was a negative 12.58%.
The Bank is required to maintain minimum levels of liquid assets as
defined by OTS regulations. This requirement, which may vary at the discretion
of the OTS depending upon economic conditions and deposit flows, is based upon
a percentage of deposits and short-term borrowings. The required ratio is
currently 5.0%. While the Bank's liquidity ratio varies from time to time, it
has generally maintained liquid assets substantially in excess of the minimum
requirement. The Bank's liquid asset ratio was 15.36% at September 30, 1996.
Liquidity management is both a daily and long-term responsibility of
management. The Bank adjusts its investments in liquid assets based upon
management's assessment of (i) expected loan demand, (ii) the projected amount
of loans to be originated by the mortgage banking subsidiary and held for
re-sale, (iii) expected deposit flows, (iv) yields available on
interest-earning deposits, and (v) the objective of its asset/liability
management program. Excess liquidity is invested generally in interest-earning
overnight deposits and other short-term government and agency obligations. If
Citizens Federal requires funds beyond its ability to generate them internally,
the Bank has additional borrowing capacity with the FHLB and collateral
eligible for reverse repurchase agreements.
The Bank anticipates that it will have sufficient funds available to meet
current loan commitments. At September 30, 1996, the Bank had commitments to
purchase from CitFed Mortgage loans totaling $33.0 million. CitFed Mortgage
had commitments to fund loans of $56.6 million and to sell loans of $54.5
million.
Page 16
19
CAPITAL--Savings institutions insured by the Federal Deposit Insurance
Corporation are required to meet three regulatory capital requirements. If a
requirement is not met, regulatory authorities may take legal or administrative
actions, including restrictions on growth or operations or, in extreme cases,
seizure. Institutions not in compliance may apply for an exemption from the
requirements and submit a recapitalization plan. The following table
demonstrates the Bank's compliance with each of these requirements as of
September 30, 1996:
Fully Phased-in
Requirement (1)
------------------
(Dollars in thousands) Amount %(2)
------------------
Tangible Capital:
Bank's $163,452 6.00%
Requirement 40,865 1.50
-------- ----
Excess $122,587 4.50%
======== ====
Core Capital
Bank's $163,452 6.00%
Requirement 81,730 3.00
-------- ----
Excess $ 81,722 3.00%
======== ====
Risk-Based Capital:
Bank's $179,004 13.91%
Requirement 102,937 8.00
-------- -----
Excess $ 76,067 5.91%
======== =====
(1) Entire investment in non-qualifying subsidiary is excluded for
calculations.
(2) Tangible and core capital levels are shown as a percentage of total
adjusted assets, risk-based capital levels are a percentage of
risk-weighted assets.
A reconciliation of the Corporation's GAAP Capital is as follows:
(Dollars in thousands) Sept. 30, 1996
--------------
Bank's stockholder's equity $181,201
Less additional capital contributed to
Bank by the Corporation (22,000)
Plus Corporation's stockholders'
equity not available for regulatory capital 15,828
--------
Stockholders' equity of the Corporation $175,029
========
Minimum capital requirements, as required by the Federal Deposit Insurance
Corporation Improvement Act of 1991, to determine whether an institution is
well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, or critically undercapitalized became effective December 19,
1992. Well capitalized institutions are defined as having core capital of at
least 5.0%, core capital to risk-weighted assets of at least 6% and risk-based
capital of at least 10.0%. The Bank's ratios at September 30, 1996 were 6.00%,
12.68% and 13.91%, respectively. As a result, the Bank meets the capital
requirements of a well capitalized institution.
Page 17
20
REGULATORY DEVELOPMENTS
On September 30, 1996, federal legislation was enacted that requires the
SAIF to be recapitalized with a one-time assessment on virtually all
SAIF-insured institutions, such as the Bank, equal to 65.7 basis points on
SAIF-insured deposits maintained by those institutions as of March 31, 1995.
This SAIF assessment, which is to be paid to the FDIC by November 27, 1996, is
approximately $10.3 million and has been accrued by the Company at September
30, 1996.
As a result of the SAIF recapitalization, the FDIC has proposed to amend
its regulation concerning the insurance premiums payable by SAIF-insured
institutions. Effective October 1, 1996 through December 31, 1996, the FDIC
has proposed that the SAIF insurance premium for all SAIF-insured institutions
that are required to pay the Financing Corporation (FICO) obligation, such as
the Bank, be reduced to a range of 18 to 27 basis points from 23 to 31 basis
points per $100 of domestic deposits. The Bank currently qualifies for the
minimum SAIF insurance premium of 23 basis points. The FDIC has also proposed
to further reduce the SAIF insurance premium to a range of 0 to 27 basis points
per $100 of domestic deposits, effective January 1, 1997. Management cannot
predict whether or in what form the FDIC's final regulation may be promulgated.
Page 18
21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In August 1995, the Corporation filed suit against the United States
Government for reneging on contracts with the Bank regarding the
treatment of supervisory goodwill as capital. Although, the U. S.
Supreme Court recently decided for the plaintiff in three pending
supervisory goodwill cases involving other entities it is uncertain as
to how this will affect the Corporation's claim.
Item 4. Submission of Matters to a Vote of Security Holders
a) The Annual Meeting of stockholders was held on July 26, 1996 and
adjourned to and reconvened on September 20, 1996.
b) The matters approved by stockholders at the annual meeting on July 26,
1996, and the number of votes cast for, against or withheld (as well as
the number of abstentions and broker non-votes) as to each matter are
set forth below:
Election of the following Directors
for a three-year term: For Withheld
--------- --------
Cheryl A. Craigie 4,963,510 355,810
Allen M. Hill 5,112,338 206,982
Gilbert P. Williamson 5,108,817 210,503
The approval and ratification of the amendment to CitFed's 1991 Stock
Option and Incentive Plan to increase by 280,000 the number of shares reserved
for issuance thereunder.
For 4,096,127
Against 1,136,901
Abstain 71,363
Broker Non-votes 14,929
c) The matter approved by stockholders at the adjourned and reconvened
annual meeting held on September 20, 1996 and the number of votes cast
for, against or withheld (as well as abstentions and broker non-votes)
as to each matter are set forth below:
The approval and ratification of the amendment of Article Fourth of
CitFed's Certificate of Incorporation to increase the total number of
shares of common stock which the Corporation shall have authority to
issue to twenty million shares.
For 3,624,782
Against 1,482,060
Abstain 57,801
Broker Non-votes 154,677
Page 19
22
Item 5. Other Information
In connection with the Corporation's acquisition of PSB Holdings,
Corporation ("PSB") during fiscal 1996, the Corporation filed
a request with the Internal Revenue Service ("IRS") for a
determination letter with respect to the tax qualified status of
PSB's employee stock ownership plan ("ESOP") upon termination. In
August, 1996, the Corporation received a determination letter from
the IRS indicating that the PSB ESOP could be terminated, with
shares distributed, without adversely affecting its qualifications
for federal income tax purposes. As a result, the ESOP intends to
pay off its obligation to the Corporation and distribute all
remaining shares of stock to qualifying employees. The fair value of
the shares released for distribution to participants (estimated to
be approximately $1.4 million as of the filing of this form 10-Q)
would be recorded as compensation expense upon distribution of such
shares to participants. The actual amount recorded as compensation
expense will be based upon the market price of the Corporation's
stock at the date the ESOP obligation is extinguished.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit - Index
Exhibit Number Description Page No.
-------------- ----------- --------
3(i) Amended and Restated Certificate
of Incorporation
11 Statement regarding computation
of per share earnings
27 Financial Data Schedule
99.1 Employment Contracts
99.2 Supplemental Retirement Income
Plan Amendments
b) Report on Form 8-K - There were no reports on Form 8-K
filed during the three months ended September 30, 1996.
Page 20
23
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.
CITFED BANCORP, INC.
(Registrant)
Date November 13, 1996 By /s/ Jerry L. Kirby
-------------------- --------------------------------
Jerry L. Kirby
Chairman of the Board, President and
Chief Executive Officer
(Duly Authorized Representative)
Date November 13, 1996 By /s/ William M. Vichich
-------------------- ---------------------------------
William M. Vichich
Executive Vice President,
Chief Operating Officer and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
Page 21
24
EXHIBIT INDEX
Exhibit Number Description Page No.
-------------- ----------- --------
3(i) Amended and Restated Certificate
of Incorporation
11 Statement regarding computation
of per share earnings
27 Financial Data Schedule
99.1 Employment Contracts
99.2 Supplemental Retirement Income
Plan Amendments
Page 22