SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
[ ]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 0-23645
LEEDS FEDERAL BANKSHARES, INC
-----------------------------
(Exact name of registrant as specified in its charter)
UNITED STATES 52-2062351
------------- ----------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
1101 Maiden Choice Lane, Baltimore, Maryland 21229
--------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 410-242-1234
Former name, former address and former fiscal year, if changed since last
report: N/A
Indicated by a check whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: There were 4,538,518
shares of the Registrant's common stock outstanding as of May 1, 2001.
LEEDS FEDERAL BANKSHARES, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of March 31, 2001
(unaudited), and June 30, 2000 ............................................ 3
Consolidated Statements of Income and Comprehensive Income (unaudited)
for the nine months and three months ended March 31, 2001 and 2000 ........ 4
Consolidated Statements of Cash Flows (unaudited) for the nine months
ended March 31, 2001 and 2000 ............................................. 5
Notes to Consolidated Financial Statements (unaudited) ................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................................... 8
PART II. OTHER INFORMATION ...........................................................................12
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LEEDS FEDERAL BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31,
2001 June 30,
(unaudited) 2000
----------- ----
Assets
- ------
Cash:
On hand and due from banks ................... $ 2,086,532 $ 2,059,010
Interest-bearing deposits .................... 2,134,512 1,982,152
Short term investments ............................ 17,741,282 9,551,979
Secured short-term loans to commercial banks ...... 27,074,112 9,562,746
Investment securities held-to-maturity ............ 62,855,827 67,392,698
Securities available-for-sale ..................... 5,584,325 5,258,493
Mortgage backed securities held-to-maturity ....... 10,445,051 8,317,018
Loans receivable, net ............................. 212,788,653 219,203,607
Investment in Federal Home Loan Bank
of Atlanta stock, at cost .................... 2,187,200 2,187,200
Property and equipment, net ....................... 2,234,104 2,242,783
Cash surrender value of life insurance ............ 6,938,212 6,687,537
Accrued interest receivable ....................... 2,040,862 2,116,855
Prepaid expenses and other assets ................. 313,052 486,229
------------- -------------
$ 354,423,724 337,048,307
------------- -------------
Liabilities and Stockholders' Equity
- ------------------------------------
Liabilities:
Savings accounts ................................. $ 298,602,128 281,866,206
Borrowed funds-- Employee
Stock Ownership Plan ......................... 298,123 384,000
Advance payments by borrowers for taxes,
insurance and ground rents ................... 2,134,363 5,073,906
Federal and state income taxes:
Currently payable ............................ 180,447 267,283
Deferred ..................................... 1,183,202 493,303
Accrued expenses and other liabilities ........... 1,808,199 1,554,136
------------- -------------
Total liabilities ............................ 304,206,462 289,638,834
------------- -------------
Stockholders' equity:
Common stock, $1 par value: 20,000,000
shares authorized: and 5,205,597 shares issued 5,205,597 5,205,597
Additional paid in capital ....................... 9,646,449 9,606,811
Unearned employee stock ownership plan shares .... (204.912) (297,066)
Retained income, substantially restricted ........ 41,259,160 39,573,847
Treasury Stock at cost: 667,416 and 656,416 shares
respectively ................................. (8,336,969) (8,216,719)
Accumulated other comprehensive income ........... 2,647,937 1,537,003
------------- -------------
Total stockholders' equity ................... 50,217,262 47,409,473
------------- -------------
$ 354,423,724 $ 337,048,307
------------- -------------
See accompanying notes to consolidated financial statements.
3
LEEDS FEDERAL BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(unaudited)
Nine Months Ended Three Months Ended
March 31, March 31,
--------------------------- ----------------------------
2001 2000 2001 2000
---- ---- ---- ----
Interest Income:
First mortgage and other loans ............ $ 11,559,671 $ 11,454,069 $ 3,815,789 $ 3,874,397
Mortgage-backed securities ................ 455,166 482,172 157,158 158,713
Investment securities and short term
investments ........................... 5,127,693 4,552,025 1,745,416 1,508,304
------------ ------------ ------------ ------------
Total interest income ..................... 17,142,530 16,488,266 5,718,363 5,541,414
------------ ------------ ------------ ------------
Interest expense:
Savings accounts .......................... 11,545,085 10,322,212 3,889,868 3,459,233
Other ................................. 23,577 27,491 6,226 9,251
------------ ------------ ------------ ------------
Total interest expense .................... 11,568,662 10,349,703 3,896,094 3,468,484
------------ ------------ ------------ ------------
Net interest income ....................... 5,573,868 6,138,563 1,822,269 2,072,930
Provision for loan losses ................. -0- 20,983 -0- -0-
------------ ------------ ------------ ------------
Net interest income after
provision for loan losses .......... 5,573,868 6,117,580 1,822,269 2,072,930
------------ ------------ ------------ ------------
Noninterest income:
Service fees and charges .................. 144,425 112,955 50,529 38,018
Other ..................................... 286,815 218,495 125,221 95,140
------------ ------------ ------------ ------------
431,240 331,450 175,750 133,158
------------ ------------ ------------ ------------
Noninterest expense:
Compensation and employee benefits ........ 1,517,249 1,269,061 548,719 469,765
Occupancy ................................. 261,025 183,297 94,460 59,562
SAIF deposit insurance premiums ........... 98,383 151,454 33,132 32,796
Advertising ............................... 128,970 102,850 51,372 37,786
Other ..................................... 644,808 522,479 263,745 177,089
------------ ------------ ------------ ------------
2,650,435 2,229,141 991,428 776,998
------------ ------------ ------------ ------------
Income before provision for income taxes .. 3,354,673 4,219,889 1,006,591 1,429,090
Provision for income taxes .................... 1,140,890 1.454,892 340,500 488,927
------------ ------------ ------------ ------------
Net income ............................ 2,213,783 2,764,997 666,091 940,163
------------ ------------ ------------ ------------
Other comprehensive income (loss), net of taxes
Unrealized gain (loss) on securities
available-for-sale, net ............... 1,110,934 (642,159) (141,381) (111,144)
------------ ------------ ------------ ------------
Comprehensive income .......................... $ 3,324,717 $ 2,122,838 $ 524,710 829,019
------------ ------------ ------------ ------------
Net income per share of common stock
Basic ..................................... $ .49 $ .59 $ .15 $ .21
------------ ------------ ------------ ------------
Diluted ................................... $ .49 $ .59 $ .15 $ .20
------------ ------------ ------------ ------------
See accompanying notes to consolidated financial statements.
4
LEEDS FEDERAL BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
March 31,
-----------------------------
2001 2000
---- ----
Cash flows from operating activities:
Net income ................................................ $ 2,213,783 $ 2,764,997
Adjustments to reconcile net income to
net cash provided by operating activities:
Accretion of loan fees .................................... 53,720 65,015
Provision for loan losses ................................. -0- 20,983
Accretion of premiums (discounts) on investment
securities and mortgage-backed securities, net ........ (16,753) (15,480)
Depreciation .............................................. 135,813 95,372
Non-cash compensation under stock-based benefit plans .... 131,792 175,534
Decrease (increase) in accrued interest receivable ........ 75,993 (41,329)
Decrease in income taxes currently payable ................ (86,836) (85,846)
Increase in accrued expenses and other liabilities ........ 254,063 310,553
Increase (decrease) in unearned loan fees ................. (102,224) 29,889
Decrease (increase) in prepaid expenses and other assets .. 173,177 (210,074)
------------ ------------
Net cash provided by operating activities ............. 2,832,528 3,109,614
------------ ------------
Cash flows from investing activities:
Purchase of investment securities held-to-maturity ........ (485,240) (1,700,000)
Maturities of and principal repayments on
investment securities held-to-maturity ................ 5,037,655 398,350
Maturies of securities available-for-sale ................. 1,475,000 -0-
Purchase of Federal Home Loan Bank Stock .................. -0- (251,500)
Loan repayments (disbursements), net ...................... 6,463,458 (14,565,861)
Purchase of mortgage-backed securities held-to-maturity ... (3,296,022) (400,000)
Principal repayments on mortgage-backed securities
held-to-maturity ...................................... 1,169,199 1,736,311
Purchases of property and equipment ....................... (127,134) (637,007)
Investment in life insurance policies ..................... (250,675) (217,975)
------------ ------------
Net cash provided by (used in) investing activities ... 9,986,241 (15,637,682)
------------ ------------
Cash flows from financing activities:
Net increase in savings accounts .......................... 16,735,922 3,964,901
Decrease in advance payments by borrowers for taxes,
insurance and ground rents ............................ (2,939,543) (1,496,592)
Payment of dividends ....................................... (528,470) (773,656)
Purchase of treasury stock ................................. (120,250) (2,871,294)
Proceeds from exercise of stock options .................... -0- 10,000
Repayment of borrowed funds ................................ (85,877) (62,813)
------------ ------------
Net cash provided by (used in) financing activities 13,061,782 (1,229,454)
------------ ------------
Net increase (decrease) in cash and cash equivalents ........... 25,880,551 (13,757,522)
Cash and cash equivalents at beginning of period ............... 23,155,887 33,010,666
------------ ------------
Cash and cash equivalents at end of period ..................... $ 49,036,438 $ 19,253,144
------------ ------------
Cash paid during the period for interest
on deposits and other borrowings .......................... $ 11,569,000 $ 10,350,000
Cash paid during the period for income taxes ................... 1,227,000 1,422,000
See accompanying notes to consolidated financial statements.
5
LEEDS FEDERAL BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
(unaudited)
(1) Basis of Presentation
The accompanying consolidated financial statements include the accounts
of Leeds Federal Bankshares, Inc. (the Company), its wholly owned subsidiary,
Leeds Federal Savings Bank and Leeds Investment Corporation, a wholly owned
subsidiary of Leeds Federal Savings Bank. Adjustments, consisting of normal
recurring adjustments, which, in the opinion of management are necessary for a
fair presentation of financial position and results of operations have been
recorded. The financial statements have been prepared using the accounting
policies described in the June 30, 2000 Annual Report. The results of operations
for the three months and nine months ended March 31, 2001, are not necessarily
indicative of the results that may be expected for the entire year.
(2) Reclassification of Prior Year's Statements
Certain amounts in the 2000 financial statements have been reclassified
to conform to the 2001 presentation.
(3) Dividends on Common Stock
On March 14, 2001, the Company declared a quarterly cash dividend of
$.15 per share. The dividends were payable to stockholders of record as of April
4, 2001 and were paid on April 18, 2001. Leeds Federal Bankshares, M.H.C. (the
MHC) , which owns 3,300,000 shares of stock in the Company, waived receipt of
its quarterly dividend, thereby reducing the actual dividend payout to
approximately $186,000. The dollar amount of dividends waived by the MHC is
considered as a restriction on the retained earnings of the Company. The amount
of any dividend waived by the MHC shall be available for declaration as a
dividend solely to the MHC. At March 31, 2001, the cumulative amount of such
waived dividends was $11,213,400.
(4) Subsequent Event
At March 31, 2001, the Company had a $2.5 million loan which matured in
June, 1998, and has not been repaid. A foreclosure sale for the property was
held on April 30, 2001. Based on the results of the sale, management believes it
will recover the entire amount due, including all unpaid interest and late
charges.
(5) Net Income per Share of Common Stock
Basic earnings per share (EPS) is calculated by dividing net income by
the weighted average number of common shares outstanding for the applicable
period. Diluted EPS is calculated after adjusting the numerator and the
denominator of the basic EPS calculation for the effect of all dilutive
potential common shares outstanding during the period. Information related to
the calculation of net income per share of common stock is summarized as
follows:
6
Three months Three months
Ended March 31, Ended March 31,
2001 2000
----------------------- ------------------------
Basic Diluted Basic Diluted
----- ------- ----- -------
Net income ........................... $ 666,091 $ 666,091 $ 940,163 $ 940,163
---------- ---------- ---------- ----------
Weighted-average shares outstanding .. 4,503,490 4,503,490 4,561,558 4,561,558
Dilutive securities - options ........ 55,524 28,066
---------- ----------
Adjusted weighted-average shares used
in EPS computation .............. 4,503,490 4,559,014 4,561,558 4,589,624
---------- ---------- ---------- ----------
Nine months Nine months
Ended March 31, Ended March 31,
2001 2000
----------------------- ------------------------
Basic Diluted Basic Diluted
----- ------- ----- -------
Net income ........................... $2,213,783 $2,213,783 $2,764,997 $2,764,997
---------- ---------- ---------- ----------
Weighted-average shares outstanding .. 4,503,490 4,503,490 4,659,995 4,659,995
Dilutive securities - options ........ 52,447 33,983
---------- ----------
Adjusted weighted-average shares used
in EPS computation .............. 4,503,490 4,555,937 4,659,995 4,693,978
---------- ---------- ---------- ----------
7
LEEDS FEDERAL BANKSHARES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward Looking Statements
- --------------------------
In addition to historical information, this Quarterly Report contains
forward-looking statements. The forward-looking statements contained in this
document are subject to certain risks and uncertainties that could cause actual
results to differ materially from those projected in the forward-looking
statements. Important factors that might cause such a difference include, but
are not limited to, those discussed in this section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Readers should not place undue reliance on these forward-looking statements, as
they reflect management's analysis as of the date of this report. The Company
has no obligation to update or revise these forward-looking statements to
reflect events or circumstances that occur after the date of this report.
Readers should carefully review the risk factors described in other documents
the Company files from time to time with the Securities and Exchange Commission,
including current reports filed on Form 8-K.
Discussion of Financial Condition Changes from June 30, 2000 to March 31, 2001
- ------------------------------------------------------------------------------
Cash on hand and due from banks, interest bearing deposits, other
liquid investments and investment securities totaled approximately $119.7
million at March 31, 2001, an increase of approximately $21.7 million, or 22.1%,
from June 30, 2000. Mortgage-backed securities totaled $10.4 million, an
increase of $2.1 million, or 25.3%, due primarily to the purchase of $3.3
million of mortgage-backed securities, partially offset by repayments of
principal. Loans receivable totaled $212.8 million, a decrease of $6.4 million,
or 2.9%, due primarily to a decrease in mortgage originations.
Deposits increased approximately $16.7 million to a total of $298.6
million at March 31, 2001. Such increase was primarily attributable to general
market trends. The Company has offered savings rates that are competitive with
other banks. However, it has not relied on brokered funds or negotiated jumbo
certificates to achieve increased deposit levels.
The Bank is subject to capital standards which generally require the
maintenance of regulatory capital sufficient to meet each of three tests,
hereinafter described as the Tier 1 core capital requirement, the Tier 1 risk
based capital requirement and the total risk based capital requirement. At March
31, 2001, the Bank had Tier 1 core capital of $47.2 million, or 13.5% of total
adjusted assets, which was $33.2 million in excess of the requirement of minimum
core capital of $14.0 million, or 4% of total adjusted assets; Tier 1 risk based
capital of $47.2 million, or 27.0% of risk weighted assets, which was $40.2
million in excess of the requirement of minimum Tier 1 risk based capital of
$7.0 million, or 4% of risk weighted assets; and total risk- based capital of
$49.9 million, or 28.6% of risk weighted assets, which was $35.9 million in
excess of the requirement of a minimum total risk-based capital of 8% of risk
weighted assets.
Comparison of Operating Results for Three and Nine Month Periods Ended March 31,
- --------------------------------------------------------------------------------
2001 and 2000.
- --------------
General
- -------
The Company's net income for the three months ended March 31, 2001,
totaled $666,000,
8
a decrease of $274,000, or 29.1% as compared to $940,000 for the three months
ended March 31, 2000, due principally to a decrease in net interest income and
an increase in noninterest expenses. Unrealized losses on securities
available-for-sale increased $30,000 to $141,000 for the three months ended
March 31, 2001, as compared to the same period last year, as a result of a
decrease in the fair value of the Company's investment securities
available-for-sale, principally the Company's FreddieMac preferred stock. The
Company's net income for the nine months ended March 31, 2001, decreased
$551,000, or 19.7%, to $2.2 million as compared to the same period in 2000.
Unrealized gains on securities available for sale increased $1.8 million to $1.1
million for the nine months ended March 31, 2001, as compared to the same period
last year, as a result of an increase in the fair value of the Company's
investment securities available-for-sale.
Net Interest Income
- -------------------
Interest income on loans for the three months ended March 31, 2001,
decreased slightly to $3.8 million, from $3.9 million for the three months ended
March 31, 2000. The average yield on loans remained unchanged at 7.1% while
average balances of loans decreased by $5.5 million for the same periods.
Interest income on loans for the nine months ended March 31, 2001, totaled $11.6
million, an increase of $106,000, or 0.9%, as compared to the nine months ended
March 31, 2000. Average balances on loans increased by $441,000, to $216.7
million, for the nine months ended March 31, 2001, as compared to $216.3 million
for the nine months ended March 31, 2000, while average yield on loans remained
unchanged at 7.1%.
Interest income on mortgage-backed securities decreased $2,000 to
$157,000 for the three months ended March 31, 2001, compared to $159,000 for the
three months ended March 31, 2000. The average yield on mortgage-backed
securities increased to 7.6%, from 7.1%, while the average balance of
mortgage-backed securities decreased by $610,000 to $8.3 million for the three
months ended March 31, 2001, compared to $8.9 million for the same period last
year. Interest income on mortgage-backed securities decreased by $27,000 to
$455,000 for the nine months ended March 31, 2001, as compared to $482,000 for
the prior period, due principally to a decrease in average balance of
mortgage-backed securities of $1.2 million to $8.1 million from $9.3 million,
offset by an increase in the average yield on mortgage-backed securities to
7.5%, from 6.9%. The decreases in the average balance of mortgage-backed
securities for the three and nine months ended March 31, 2001, were the result
of repayments, offset by the purchase of $3.3 million in new mortgage-backed
securities during the third quarter. The increase in average yield on
mortgage-backed securities for the periods was attributable to faster repayments
of lower yielding securities.
Interest income on investment securities and short-term investments
("Investments") increased by $237,000, to $1.7 million for the three months
ended March 31, 2001, from $1.5 million for the three months ended March 31,
2000. The average balance of Investments increased by $18.9 million to $112.8
million for the three months ended March 31, 2001, from $93.9 million for the
same period in the prior year, while yield on Investments decreased to 6.2% from
6.4%. Interest income on Investments increased by $576,000 to $5.1 million
during the nine months ended March 31, 2001, from $4.6 million for the nine
months ended March 31, 2000. The average balance of Investments increased by
$9.5 million to $105.8 million for the nine months ended March 31, 2001, from
$96.3 million for the same period in the prior year, while yield on Investments
increased to 6.5% from 6.3%. The increases in average balance of Investments for
the three and nine months ended March 31, 2001, were the result of an increase
in the supply of funds to invest in such securities. The changes in average
yield on Investments for these periods was due to changes in market rates on
short term investments.
Total interest expense increased by approximately $428,000 during the
quarter ended March 31, 2001, to $3.9 million from $3.5 million for the quarter
ended March 31, 2000. This
9
increase was the result of an increase in average balances of interest bearing
liabilities outstanding to $292.4 million from $280.6 million, and an increase
in average rates paid on deposits to 5.3%, from 4.9%. For the nine months ended
March 31, 2001, total interest expense increased by $1.2 million to $11.6
million, from $10.3 million for the nine months ended March 31, 2000. The
increase was the result of an increase in average balances of interest bearing
liabilities outstanding to $287.8 million from $279.1 million and an increase in
average rates paid on deposits to 5.4% from 4.9%. The increases in average
balance on interest bearing liabilities outstanding for the three and nine
months ended March 31, 2001, as compared to the same periods last year, were due
to increased customer deposits, while the increase in average rates paid on
deposits for these periods was due to general market conditions.
As a result of the foregoing changes, the increase in interest income
was more than offset by an increase in interest expense resulting in a decrease
in net interest income of $251,000, or 12.0%, to $1.8 million during the three
months ended March 31, 2001, as compared to $2.1 million during the three months
ended March 31, 2000. During the nine months ended March 31, 2001, net interest
income decreased by $565,000, or 9.3%, to $5.6 million from $6.1 million for the
same period in the previous year.
Provision for Loan Losses
- -------------------------
The Bank had no provision for loan losses for the three and nine months
ended March 31, 2001, compared to no provision and a provision of $21,000 for
the three and nine months ended March 31, 2000. The allowance for loan losses,
which was $744,000 and $742,000 at March 31, 2001 and June 30, 2000,
respectively, is established in accordance with generally accepted accounting
principles and exists to absorb known and inherent losses in the Company's
overall loan portfolio. In addition to historical loss experience, the Company
considers other factors that are likely to cause credit losses, including
changes in economic and business conditions and developments, changes in the
nature and volume of the portfolio, trends in the level of past due and
classified loans, and the status of nonperforming loans. Based on management's
review and analysis of the allowance for loan losses as of March 31, 2001,
management considered the allowance for loan losses to be adequate.
Noninterest Income
- ------------------
Noninterest income increased $43,000 to $176,000, from $133,000 for the
three months ended March 31, 2001. For the nine months ended March 31, 2001,
noninterest income increased to $431,000, from $331,000 for the nine months
ended March 31, 2000. The increases were primarily the result of increases in
income from life insurance contracts and increases in service fee income.
Noninterest Expense
- -------------------
Noninterest expense for the three months ended March 31, 2001,
increased by $214,000 to $991,000, from $777,000, for the three months ended
March 31, 2000. Compensation and employee benefits increased $79,000 to $549,000
for the three months ended March 31, 2001, from $470,000 for the same period
last year, due to additional staffing related to the opening of a branch; a
onetime charge to complete funding of the directors' retirement plan due to the
attainment of retirement age of two directors who continue to serve as
directors; and an increase in the noncash charge to expense for ESOP shares
earned due to an increase in the market price of the Company's stock. Occupancy,
advertising and other expenses increased by $135,000 for the quarter ended March
31, 2001, due to an increase in expenses associated with the new branch. During
the nine months ended March 31, 2001, noninterest expense increased $421,000, or
19.1%, to $2.7 million, from $2.2 million, compared to the nine months ended
10
March 31, 2000. This increase was due to increased compensation costs, higher
levels of advertising, and increased occupancy expenses associated with the new
branch, partially offset by a decrease in SAIF deposit insurance premiums.
Provision for Income Taxes
- --------------------------
Provision for income taxes for the three months ended March 31, 2001,
totaled $341,000, compared to $489,000 for the three months ended March 31,
2000. For the nine months ended March 31, 2001, the provision for income taxes
totaled $1.1 million, as compared to $1.5 million for the same period last year.
The effective income tax rate for the three months ended March 31, 2001, was
33.8%, compared to 34.2% for the three months ended March 31, 2000. The
effective income tax rate for the nine months ended March 31, 2001, was 34.0%,
compared to 34.5% for the nine months ended March 31, 2000. The lower effective
rates are due to lower state taxes.
Classified Loans
- ----------------
There were five loans totaling $23,000 which were 90 or more days
delinquent but still accruing at March 31, 2001, and no such loans at June 30,
2000. Loans 90 or more days delinquent and not accruing totaled $2.7 million at
March 31, 2001 and June 30, 2000. At March 31, 2001, the Company had a $2.5
million loan which matured in June, 1998, and has not been repaid. A foreclosure
sale for the property was held on April 30, 2001. Based on the results of the
sale, management believes it will recover the entire amount due, including all
unpaid interest and late charges.
Liquidity
- ---------
The Company is required to maintain liquid assets, as defined by Office
of Thrift Supervision regulations to support safe and sound operations. The
Company's liquidity ratio averaged 40.66% during the quarter ended March 31,
2001, and equaled 43.24% at March 31, 2001.
Stock Repurchase Plan
- ---------------------
As of March 31, 2001, the Company has repurchased 667,416 shares of its
common stock in connection with its repurchase plan. The Company has the Board's
authorization to repurchase an additional 356,025 shares as, in the opinion of
management, market conditions warrant.
11
PART II. OTHER INFORMATION
Legal Proceedings
- -----------------
The Company is not involved in any litigation, nor is it aware of any
pending litigation, other than legal proceedings incidental to the Bank's
business. In the opinion of management, no material loss is expected from any
such claims or lawsuits.
Exhibits and Reports on Form 8-K
- --------------------------------
No Form 8-K reports were filed during the quarter.
Changes in Securities
- ---------------------
None
Defaults Upon Senior Securities
- -------------------------------
None
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
LEEDS FEDERAL BANKSHARES, INC.
Date: May 14, 2001 By: /s/Gordon E. Clark
------------- -------------------------------------
Gordon E. Clark
President and Chief Executive Officer
Date: May 14, 2001 By: /s/Kathleen Trumpler
------------- -------------------------------------
Kathleen Trumpler
Treasurer and Chief Financial Officer
13