UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
Commission File Number: 0-27930
Community Federal Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 64-0869537
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification No.)
P.O. Box F
333 Court Street
Tupelo, Mississipi 38802
(Address of principal (Zip Code)
Executive offices)
Registrant's telephone number, including
area code: (601) 842-3981
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 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.
Class Outstanding at March 31, 1999
Common Stock, 4,266,150 shares
$.01 par value
COMMUNITY FEDERAL BANCORP, INC.
PART I. FINANCIAL INFORMATION
Page
ITEM 1. FINANCIAL STATEMENTS:
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL 2
CONDITION AS OF MARCH 31, 1999 AND
SEPTEMBER 30, 1998
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR 3
THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
THE SIX MONTHS ENDED MARCH 31, 1999 AND 1998
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 4
FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND 1998
THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FURNISHED HAVE NOT BEEN AUDITED BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS, BUT REFLECT, IN
THE OPINION OF MANAGEMENT,ALL ADJUSTMENTS
NECESSARY FOR A FAIR PRESENTATION OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS FOR
THE PERIODS PRESENTED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 9
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
OTHER INFORMATION 12
SIGNATURES 13
Part I. Financial Information
Item 1. Financial Statements
COMMUNITY FEDERAL BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
unaudited
ASSETS
March 31, September 30,
1999 1998
CASH AND CASH EQUIVALENTS $10,470,060 $4,070,714
SECURITIES AVAILABLE FOR SALE, at fair value 142,369,015 119,799,017
SECURITIES HELD TO MATURITY,
fair values of $2,126,120 and
$2,760,651 respectively 2,124,319 2,742,209
LOANS RECEIVABLE, net 143,355,356 141,414,264
PREMISES AND EQUIPMENT 3,259,514 2,944,000
OTHER ASSETS 3,830,083 4,350,238
Total assets $305,408,347 $275,320,442
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, September 30,
1999 1998
DEPOSITS $152,476,413 $144,801,613
FHLB ADVANCES $87,929,278 $65,451,449
OTHER LIABILITIES 6,484,645 7,502,754
Total liabilities 246,890,336 217,755,816
STOCKHOLDERS' EQUITY:
Preferred stock, no par, no shares issued,
2,000,000 authorized 0 0
Common stock, par $.01 per share, 4,628,750
issued and outstanding, 10,000,000 authorized 46,288 46,288
Additional paid-in capital 45,310,992 45,210,144
Retained earnings 16,270,263 15,487,717
Treasury Stock at cost, 362,600 and 310,500,
respectively (6,330,042) (5,545,540)
Other Comprehensive income 8,050,137 7,643,803
Unearned compensation (4,829,627) (5,277,786)
Total stockholders' equity 58,518,011 57,564,626
Total liabilities and stockholders' equity $305,408,347 $275,320,442
The accompanying notes are an integral part of these statements
COMMUNITY FEDERAL BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Six Months
Ended March 31, Ended March, 31
1998 1997 1999 1998
INTEREST INCOME:
Interest and fees on loans 2,738,355 2,630,220 5,490,946 5,225,486
Interest on securities, HTM 31,976 53,250 68,916 112,310
Interest on securities, AFS 1,888,499 1,304,346 3,595,635 2,450,384
Total interest income 4,658,830 3,987,816 9,155,497 7,788,180
INTEREST EXPENSE:
Interest on deposits 1,825,047 1,746,628 3,699,255 3,476,815
Other interest expense 963,475 507,889 1,823,309 829,064
Total interest expense 2,788,522 2,254,517 5,522,564 4,305,879
PROVISION FOR LOAN LOSSES 22,500 15,000 45,000 25,000
Net interest income after
provision for loan losses 1,847,808 1,718,299 3,587,933 3,457,301
NONINTEREST INCOME:
Deposit fees 37,101 20,521 72,467 40,257
Loan servicing fees 96,252 143,367 241,728 233,960
Other income 188,577 203,459 468,598 216,344
Total noninterest income 321,930 367,347 782,793 490,561
NONINTEREST EXPENSE:
Compensation and benefits 677,183 648,401 1,315,492 1,235,085
Occupancy and equipment 66,904 41,930 125,746 83,948
Other operating expense 352,047 246,716 610,491 479,478
Total noninterest expense 1,096,134 937,047 2,051,729 1,798,511
Income before income taxes 1,073,604 1,148,599 2,318,997 2,149,351
PROVISION FOR INCOME TAXES 377,949 414,167 811,604 754,913
NET INCOME 695,655 734,432 1,507,393 1,394,438
Basic $0.18 $0.18 $0.39 $0.34
Diluted $0.18 $0.17 $0.38 $0.32
The accompanying notes are an integral part of these statements
COMMUNITY FEDERAL BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE SEX MONTHS ENDED MARCH 31, 1999 AND 1998
1999 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,507,393 $1,394,438
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 76,242 60,926
Amortization of premium/discounts, net 220,506 30,648
Amortizatin of Unearned Compensation 549,007 560,160
Provision for loan losses 45,000 25,000
Gain on sale securities, AFS, net (173,018) (196,069)
Changes in assets and liabilities:
Increase (Decrease)in other assets 520,155 (58,010)
Decrease (Increase) in other liabilities (896,427) (664,733)
Total adjustments 341,465 (242,078)
Net cash provided by operating activities 1,848,858 1,152,360
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal payments
on securities, AFS 25,900,979 16,503,568
Proceeds from maturities and principal payments
on securities, HTM 305,278 654,962
Proceeds from sales of securities, AFS 3,671,325 222,096
(Purchase of) sale of property and equipment (391,756) 290,195
Loan (originations) and principal
repayments, net (1,986,092) (8,381,638)
Purchase of securities, AFS (51,592,526) (38,607,997)
Net cash used by investing activities (24,092,792) (29,318,814)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in customer deposits, net 7,674,800 6,319,079
Dividends paid (724,847) (653,678)
Purchase of Treasury Stock (784,502) (1,869,513)
Purchase of Stock for stock plan trust (13,474)
Proceeds (repayments)in FHLB advances, net 22,477,829 29,632,143
Net cash provided by financing activities 28,643,280 33,414,557
Net increase in cash and cash equivalents 6,399,346 5,248,103
CASH AND CASH EQUIVALENTS, beginning of year 4,070,714 5,437,003
CASH AND CASH EQUIVALENTS, end of period $10,470,060 $10,685,106
The accompanying notes are an integral part of these statements
COMMUNITY FEDERAL BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Community Federal Bancorp, Inc. (The "Company") was incorporated
in the State of Delaware on November 22, 1995, for the purpose of
becoming a holding company to own all of the outstanding capital
stock of Community Federal Savings Bank (the "Bank"), an existing
Stock Bank which was 100% owned by Community Federal Mutual
Holding Company (the "MHC"). Upon the conversion from a
federally chartered mutual holding company form of organization
to a federally chartered stock savings association (the
"Conversion"), the MHC was dissolved.
The accompanying unaudited condensed consolidated financial
statements as of March 31, 1999, and for the three and six month
periods then ended, include the accounts of the Company and the
Bank. All significant intercompany transactions and accounts
have been eliminated in consolidation.
The condensed consolidated financial statements were prepared by
the company without an audit, but in the opinion of management,
reflect all adjustments necessary for the fair presentation of
financial position and results of operations for the three and
six month periods ended March 31, 1999 and 1998. Results of
operations for the current interim period are not necessarily
indicative of results expected for the fiscal year ended
September 30, 1999. While certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange commission, management believes
that the disclosures herein are adequate to make the information
presented not misleading. These condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended
September 30, 1998. The accounting policies followed by the Bank
are set forth in the summary of significant accounting policies
in the Bank's September 30, 1998 consolidated financial
statements.
2. STOCK CONVERSION
On March 14, 1996, the Conversion to a federally chartered stock
savings bank through amendment of its charter, dissolution of the
MHC, and issuance of common stock to the company was completed.
Related thereto, the Company sold 4,628,750 shares of common
stock, par value $.01 per share, at an initial price of $10 per
share in subscription and community offerings. Costs associated
with the Conversion were approximately $1,300,000 including
underwriting fees. These conversion costs were deducted from the
gross proceeds of the sale of the common stock.
In connection with the Conversion, the Company has established an
employee stock ownership plan (the "ESOP"). The ESOP purchased
approximately 8%, or 363,200 shares, of the total shares of
common stock sold. The company lent $3,632,000 to the ESOP for
the purchase of the shares of common stock. Unearned
compensation for the ESOP was charged to stockholders' equity and
is reduced ratably in connection with principal payments under
the terms of the Plan.
The Management Recognition and Retention Plan Trust and the Stock
Option Plan (the "Plans") were approved by shareholders and was
effective April 1, 1997. Under the Management Recognition and
Retention Plan ("MRP"), employees and directors could be awarded
an aggregate amount of shares of common stock equal to 4% of the
shares issued in the Conversion (185,150 shares of common stock).
The aggregate fair market value of the shares purchased by the
MRP is considered unearned compensation at the time of purchase
and compensation is earned ratably over the stipulated vesting
period. Under the Company's Stock Option Plan, employees and
directors could be granted options to purchase an aggregate
amount of shares of common stock equal to 10% of the shares
issued in the Conversion (462,875 shares of common stock) at
exercise prices equal to the market price of the common stock on
the date of grant. The Company accounts for the Stock Option
Plan under the provisions of Accounting Principles Board Opinion
No 25, Accounting for Stock Issued to Employees.
3. EARNINGS PER SHARE
Basic earning per share were computed by dividing net income by
the weighted average number of shares of common stock outstanding
during the three and six months ended March 31, 1998 and 1997.
Common stock outstanding consists of issued shares less treasury
stock, unallocated ESOP shares, and shares owned by the MRP and
Stock option plan trust. Diluted earnings per share for the
three and six months ended March 31, 1999 and 1998, were computed
by dividing net income by the weighted average number of shares
of common stock and the dilutive effect of the shares awarded
under the MRP and Stock Option plans, based on the treasury stock
method using an average fair market value of the stock during the
respective periods.
The following table represents the earnings per share
calculations for the three and six months ended March 31, 1999
and 1998:
Per Share
For the Three Months Ended Income Shares Amount
March 31, 1999
Net Income $695,655
Basic earnings per share:
Income available to
common shareholders $695,655 3,817,368 $0.18
Dilutive Securities
Management recognition
plan shares 55,676
Stock option plan shares 0
Diluted earning per share:
Income available to common
shareholders plus assumed
conversions $695,655 3,873,044 $0.18
March 31, 1998
Net Income $734,432
Basic earnings per share:
Income available to common
shareholders $734,432 4,088,553 $0.18
Dilutive Securities:
Management recognition plan
shares 140,120
Stock option plan shares 81,052
Diluted earnings per share:
Income available to common
shareholders plus assumed
conversion $734,432 4,309,726 $0.17
Per Share
For the Six Months Ended Income Shares Amount
March 31, 1999
Net income $1,507,392
Basic earnings per share:
Income available to common
shareholders $1,507,392 3,825,602 $0.39
Dilutive Securities:
Management recognition
plan shares 112,590
Stock option plan shares
Diluted earning per share:
Income available to common
shareholders plus assumed
conversions $1,507,392 3,938,192 $0.38
Per Share
For the Six Months Ended Income Shares Amount
March 31, 1998
Net income $1,394,438
Basic earnings per share:
Income available to common
shareholders $1,394,438 4,108,008 $0.34
Dilutive Securities:
Management recognition
plan shares 140,120
Stock option plan shares 72,693
Diluted earning per share:
Income available to common
shareholders plus assumed
conversions $1,394,438 4,320,821 $0.32
4. PENDING ACCOUNTING PRONOUNCEMENTS
The AICPA has issued Statements of Position 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for Internal
Use. This statement requires capitalization of external direct
costs of materials and services; payroll and payroll-related
costs for employees directly associated; and interests costs
during development of computer software for internal use
(planning and preliminary costs should be expensed). Also,
capitalized costs of computer software developed or obtained for
internal use should be amortized on a straight-line basis unless
another systematic and rational basis is more representative of
the software's use.
This statement is effective for financial statements for fiscal
years beginning after December 15, 1998 (prospectively) and is
not expected to have a material effect on the consolidated
financial statements.
The AICPA has issued Statement of Position (SOP) 98-5 Reporting
on Cost of Start-up-Activities. This SOP provides guidance on
the financial reporting of start-up cost and organization costs.
It requires cost of start-up activities and organization cost to
be expensed as incurred and the initial application of this SOP
should be reported as the cumulative effect of a change in
accounting principle. This SOP is effective for financial
statements for fiscal years beginning after December 15, 1998.
Earlier application is encouraged in fiscal years for which
annual financial statements previously have not been issued.
Management does not believe that the adoption of this statement
will have a material impact on the presentation of the Company's
financial condition or results of operations.
5. COMPREHENSIVE INCOME
The Company adopted SFAS No 130 October 1, 1998 SFAS No. 130
established standards for reporting and display of comprehensive
income and its components.
The Company has classified certain securities as available for
sale in accordance with Financial Accounting Standard Board
Statement No. 115. For the three month period ended March 31,
1999 the net unrealized gain on these securities decreased by
$1.5 million and increased $792,000 for the same period in 1998.
For the six month periods ended March 31, 1999 and 1998, the net
unrealized gain on these securities increased by $406,000 and
$2.1 million, respectively. Pursuant to Statement No. 115, any
unrealized gain or loss activity of available for sale securities
is to be recorded as an adjustment to a separate component of
shareholder's equity, net of income tax effect. Accordingly, for
the three and six month periods ended March 31, 1999 and 1998,
the Company recognized a corresponding adjustment in the net
unrealized gain component of equity.
Since comprehensive income is a measure of all changes in equity
of an enterprise that result from transactions and other economic
events of the period, this change in unrealized gain serves to
increase or decrease comprehensive income. The following table
represents comprehensive income for the three and six month
periods ended March 31, 1999 and 1998:
Three Months Ended Six Months Ended
March 31, March 31,
1999 1998 1999 1998
Net income $ 696 $ 734 $1,507 $1,394
Other Comprehensive
income(loss),net
of tax:
Unrealized gain
(loss)on
Securities
available for
Sale (1,463) 792 406 2,146
Total Comprehensive
Income (loss) $ (767) $1,526 $1,914 $3,540
6. Commitments and contingencies
On January 21, 1999, the Company's Board of Directors approved
the Key Employee Retention Plan for certain officers and the Severance
Pay Plan for substantially all employees of the Company and the Bank.
Under the provisions of the Plan, the Company could be continently
liable to the employees if an employee is terminated within one year
after a change of control of the Company. As of March 31, 1999, the
amount the Company could be continently liable would be approximate $295,000.
Part 1
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
On March 25, 1996, Community Federal Bancorp, Inc. (The
"Company") completed the sale of 4,628,750 shares of its common
stock in an initial public offering at a price of $10.00 and
simultaneously acquired the shares of common stock of Community
Federal Savings Bank (the "Bank") in connection with the mutual
to stock conversion (the "Conversion"). Costs associated with
the conversion were approximately $1,300,000. Prior to March 25,
1996, the Company had not issued any stock, had no assets or
liabilities, and had not engaged in any business activities other
than of an organizational nature.
Comparisons of Financial Conditions at March 31, 1999 and
September 30, 1998
Total assets increased by $30 million, or 10.9%, from $275.3
million at September 30, 1998 to $305.4 million at March 31,
1999. The increase in total assets was primarily attributed to a
$22.6 million increase in securities available for sale, $1.9
million increase in loans receivable and a $6.4 million increase
in cash and cash equivalents.
Equity increased $953,000 since September 30, 1998, which was
primarily attributed to $1.5 million in net income for the six
month period, a decrease of $448,000 in unearned compensation,
and an increase of $406,000 in unrealized gain on securities
available for sale, which was partially offset by the purchase of
$785,000 in treasury stock and the declaration of dividends of
$725,000.
Comparison of Results of Operations for the Three Months Ended
March 31, 1998 and 1997
The company reported net income for the three months ended March
31, 1999 of $696,000 as compared to $734,000 for the three months
ended March 31, 1998. The decrease in income for the three
months ended March 31, 1999 was due mainly to an increase in
non-interest expense and a decrease in non-interest income.
Net Interest Income
Net interest income after provision for loan losses for the three
months ended March 31, 1999 amounted to $1.8 million as compared
to $1.7 million for the three months ended March 31, 1998. Total
interest income increased $671,000 during the quarter ended March
31, 1999 as compared to the same three month period of the prior
year. This increase resulted primarily from increased interest
and fees on the higher average balance in interest earning
assets. Total interest expense increased $534,000 during the
second quarter 1999 compared to the same three month period of
the previous year. The main reason for this increase is due to
an increase in interest expense associated with FHLB advances to
fund the growth of $49 million in interest earning assets, since
March 31, 1998.
Provision for Loan Losses
A $22,500 provision for loan losses was made during the second
quarter of 1999 to correspond with the volume in the mortgage
and consumer loan portfolio, as compared to the $15,000 provision
for loan losses during the comparable 1998 second quarter. This
adjustment reflects management's estimates which took into
account historical experience, the amount of nonperforming
assets, and general economic condition. Total nonperforming
assets at March 31, 1999 were $904,000, compared to $1 million at
March 31, 1998. The allowance for loan losses at March 31, 1999
was $800,000 compared to $605,000 at March 31, 1998.
Noninterest Income
Noninterest income decreased $45,000 from $367,000 for the three
months ended March 31, 1998 to $322,000 for the three months
ended March 31, 1999. This decrease was due primarily to a
decrease in Loan servicing fees, as a result of increased loan
refinancing during the three months ended March 31, 1998.
Noninterest Expense
Noninterest expense increased $159,000 from $937,000 for the
three months ended March 31, 1998 to $1.1 million for the three
months ended March 31, 1999. The main reason for this increase
was related to compensation expense, office occupancy and
equipment expense.
Provision for Income Tax
Income tax expense for the three months ended March 31, 1999
decreased $36,000 to $378,000 as compared to income tax expense
of $414,000 for the three months ended March 31, 1998. This
decrease is the result of the decrease in income before income
taxes.
Comparisons of Results of Operations for the Six Months Ended
March 30, 1999 and 1998.
The Company reported net income for the six months ended March
31, 1999 of $1.5 million as compared to $1.4 million for the six
months ended March 31, 1998, an increase of $113,000. The
increase in income for the six months ended March 31, 1999 was
due mainly to an increase in net interest income.
Net Interest Income
Net interest income after provision for loan losses for the six
months ended March 31, 1999 amounted to $3.6 million as compared
to $3.5 million for the six months ended March 31, 1998. Total
interest income increased $1.4 million during the six months
ended March 31, 1999 as compared to the same six month period of
the prior year. This increase resulted primarily from increased
interest and fees on the higher average balances in interest
earning assets. Total interest expense for the six month period
ended March 31, 1999 increased $1.2 million compared to the same
six month period of the prior year. The above resulted from the
increase in FHLB advances to fund the growth in interest earning
assets.
Provisions for Loan Losses
A $45,000 provision for loan losses was made during the six
months ended March 31, 1999 to correspond with the volume in the
mortgage and consumer loan portfolio, compared to the $25,000
provision made during the six months ended March 31, 1998. This
adjustment reflects management's estimates which took into
account historical experience, the amount of nonperforming
assets, and general economic conditions.
Noninterest Income
Non-interest Income increased $292,000 from $491,000 for the six
months ended March 31, 1998 to $783,000 for the six months ended
March 31, 1999. This increase was due to increased fee income
and gain on the sale of securities available for sale.
Noninterest Expense
Noninterest expense increased by $253,000 from $1.8 million for
the six months ended March 31, 1998 to $2.1 million for the six
months ended March 31, 1999. The increase was primarily due to
an increase in compensation expense and office occupancy and
equipment expense.
Provision for Income Tax
Income tax expense for the six months ended March 31, 1999
increased by $57,000 to $812,000 as compared to the income tax
expense of $755,000 for the six months ended March 31, 1998.
This increase was due to the increase in income before income
taxes.
Capital Resources
The Bank's primary sources of funds are customer deposits,
repayments of loan principal, and interest from loans and
investments. While scheduled principal repayments on loans and
mortgage-backed securities are relatively predictable source of
funds, deposit flows and loan prepayments are greatly influenced
by general interest rates, economic conditions, and competition.
The Bank manages the pricing of its deposits to maintain a
desired deposit balance. In addition, the Bank invests in short
term interest-earning assets which provide liquidity to meet
lending requirements.
The Bank is required to maintain certain levels of regulatory
capital. At March 31, 1999, the Bank was in compliance with all
regulatory capital requirements.
Year 2000 Issue
The Company is aware of the issue associated with the programming
code in existing computer systems as the Year 2000 approaches.
The Year 2000 issue is the results of computer programs being
written to store and process data using two digits rather than
four to define the applicable year. Computer programs that have
time sensitive coding may recognize a date using "00" as the year
1900 rather than the year 2000. Systems that do not properly
recognize such information could generate erroneous data or cause
systems to fail.
The Bank has conducted a review of its computer systems to
identify the systems that could be affected by the Year 2000
issue and has developed an implementation plan to resolve the
issue. The majority of the Bank's data processing is provided by
a third party service bureau. The service bureau is actively
involved in resolving Year 2000 issues and has provided the Bank
with frequent updates regarding its progress. The service bureau
has advised the Bank that it has resolved the majority of the
Year 2000 issues. The Bank tested the service bureau's system
for Year 2000 compliance during November of 1998 and again in
April, 1999 . The Bank presently believes that, based on the
progress and testing of the Bank's service bureau, the Year 2000
will not posse significant operational problems for the Bank's
computer system. In addition, the Bank has developed a
contingency plan to address any unforeseen problems. The total
cost of Year 2000 projects are not estimated to be material to
the financial performance of the Company.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company and any subsidiaries may be a
party to various legal proceedings incident to its or their
business. At March 31, 1999, there were no legal proceedings to
which the Company or any subsidiary was a party, or to which any
of their property was subject, which were expected by management
to result in a material loss.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders held on January
21, 1999, in Tupelo, Mississippi, the shareholders
elected directors and ratified the appointment of
Arthur Andersen, LLP as Community Federal's independent
auditors for 1999. The following is a tabulation of
all votes timely cast in person or by proxy by
shareholders of Community Federal for the annual
meeting:
To elect directors to three-year terms:
Nominee For Withheld
J. Leighton Pettis 3,575,875 23,600
Robert W. Reed 3,563,675 35,500
H. Lewis Whitfield 3,568,375 31,100
To ratify the appointment of Arthur Andersen, LLP as
Community Federal's independent auditors for 1999.
For 3,541,135
Against 37,300
Abstain 21,040
Item 5: Other Information
Not applicable
Item 6: Exhibits and Reports on Form 8-K
On February 12, 1999 the company filed a Registration Statement
on form S-8 to register the 1997 stock option plan.
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.
COMMUNITY FEDERAL BANCORP, INC.
Date: May 14, 1999 (s)Jim Ingram
Jim Ingram,
Chief Executive Officer
Date: May 14,1999 (S) H. Lewis Whitfield
H. Lewis Whitfield
President
Date: May 14, 1999 (s)Sherry McCarty
Sherry McCarty,
Vice President
and Chief Financial Officer