UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-20956
HFB FINANCIAL CORPORATION
A Tennessee Corporation I.R.S. Employer
Identification
No. 61-1228266
Address Telephone Number
------- ----------------
1602 Cumberland Avenue (606) 248-1095
Middlesboro, Kentucky 40965
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding twelve 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 __.
The number of shares of the registrant's $1 par value common stock outstanding
at February 12, 2001 was 1,294,654.
There are a total of 14 pages filed in this document.
HFB FINANCIAL CORPORATION
I N D E X
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PAGE NO
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet 3
Consolidated Statement of Income 4
Consolidated Statement of Stockholders' Equity 5
Consolidated Statement of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8-12
PART II - OTHER INFORMATION 13
SIGNATURES 14
2
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
DECEMBER 31, JUNE 30,
2000 2000
ASSETS
Cash and cash equivalents $ 3,914,860 $ 3,171,389
Trading securities 904,460 758,570
Investment securities
Available for sale 33,813,106 36,672,364
Held to maturity 23,090,025 24,697,115
------------- -------------
Total investment securities 56,903,131 61,369,479
Loans 139,321,951 132,038,855
Allowance for loan losses (680,789) (645,107)
------------- -------------
Net loans 138,641,162 131,393,748
Premises and equipment 4,519,639 3,871,340
Federal Home Loan Bank stock 1,472,900 1,419,700
Real Estate Owned 144,981 345,790
Interest Receivable 1,827,826 1,908,022
Goodwill 310,790 366,769
Other assets 130,753 606,061
------------- -------------
Total assets $ 208,770,502 $ 205,210,868
============= =============
LIABILITIES
Deposits
Interest bearing $ 173,180,901 $ 167,221,697
Non-interest bearing 1,505,526 5,315,314
------------- -------------
Totals 174,686,427 172,537,011
Short term borrowings -- 400,000
Long term debt 12,491,178 12,528,050
Interest payable 842,303 850,771
Other liabilities 1,234,102 908,629
------------- -------------
Total liabilities 189,254,010 187,224,461
------------- -------------
STOCKHOLDERS' EQUITY
Issued and outstanding - 1,576,789 and 1,574,282 shares 1,579,082 1,574,282
Additional paid-in-capital 8,727,990 8,708,790
Less: Common stock acquired by Rabbi trusts for deferred
compensation plans (515,623) (515,623)
Treasury stock, at cost, 282,228 and 278,935 shares (2,478,330) (2,438,366)
Retained earnings 12,381,381 11,843,918
Accumulated other comprehensive loss (178,008) (1,186,594)
------------- -------------
Total stockholders' equity 19,516,492 17,986,407
------------- -------------
Total liabilities and stockholders' equity $ 208,770,502 $ 205,210,868
============= =============
See notes to consolidated financial statements.
3
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
THREE-MONTHS ENDED SIX-MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
INTEREST INCOME
Loans receivable $ 3,022,776 $ 2,510,638 $ 5,780,987 $ 5,058,302
Investment securities 961,053 1,014,096 1,981,056 1,935,231
Other dividend income 35,450 32,218 70,522 66,985
Deposits with financial institutions 25,584 39,086 39,613 41,496
----------- ----------- ----------- -----------
Total interest income 4,044,863 3,596,038 7,872,178 7,102,014
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 2,214,452 1,878,221 4,377,771 3,645,903
Short term borrowings -- 23,990 -- 104,614
Long term debt 175,109 142,461 349,151 285,266
----------- ----------- ----------- -----------
Total interest expense 2,389,561 2,044,672 4,726,922 4,035,783
----------- ----------- ----------- -----------
NET INTEREST INCOME 1,655,302 1,551,366 3,145,256 3,066,231
Provision for loan losses 22,480 (2) 44,980 (474,488)
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,632,822 1,551,368 3,100,276 3,540,719
----------- ----------- ----------- -----------
OTHER INCOME
Service charges for deposit accounts 161,545 98,009 291,002 192,040
Other customer fees 16,556 23,716 33,298 37,636
Net gain (loss) on trading securities 70,620 (18,532) 132,162 (74,039)
Net realized gain (loss) on sales of
available for sale securities (671) -- (671) --
Other income 3,478 2,185 15,536 8,802
----------- ----------- ----------- -----------
Total other income 251,528 105,378 471,327 164,439
----------- ----------- ----------- -----------
OTHER EXPENSES
Salaries and employee benefits 531,195 530,138 1,048,943 1,021,659
Net occupancy expenses 81,356 74,085 169,530 128,514
Equipment expenses 98,768 63,839 190,507 114,775
Data processing fees 67,090 97,667 134,659 141,292
Deposit insurance expense 8,712 22,824 17,418 45,251
Legal and professional fees 48,323 43,467 116,054 104,264
Advertising 42,583 69,226 84,236 123,741
State franchise and deposit taxes 42,431 35,710 88,317 74,290
Other expenses 275,903 245,283 525,004 483,791
----------- ----------- ----------- -----------
Total other expenses 1,196,361 1,182,239 2,374,668 2,237,577
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAX 687,989 474,507 1,196,935 1,467,581
Income tax expense 237,398 119,858 412,634 528,435
----------- ----------- ----------- -----------
NET INCOME $ 450,591 $ 354,649 $ 784,301 $ 939,146
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE $ 0.35 $ 0.32 $ 0.61 $ 0.85
DILUTED EARNINGS PER SHARE $ 0.35 $ 0.31 $ 0.60 $ 0.84
See notes to consolidated financial statements.
4
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
SIX-MONTHS ENDED DECEMBER 31, 2000
(UNAUDITED)
ADDITIONAL
COMMON PAID-IN RABBI TREASURY
STOCK CAPITAL TRUSTS STOCK
---------------------------------------------------
Balances, June 30, 2000 $1,574,282 $8,708,790 ($515,623) ($2,438,366)
Net income
Other comprehensive income, net of tax
Unrealized gain on securities
Comprehensive income
Cash dividend declared ($.19 per share)
Stock issued upon exercise of stock options 4,800 19,200
Purchase of treasury stock (3,293 shares) (39,964)
---------------------------------------------------
BALANCES, DECEMBER 31, 2000 $1,579,082 $8,727,990 ($515,623) ($2,478,330)
===================================================
Table continued from above
ACCUMULATED
COMPRE- OTHER TOTAL
HENSIVE RETAINED COMPREHENSIVE STOCKHOLDERS'
INCOME EARNINGS INCOME (LOSS) EQUITY
-----------------------------------------------------------
Balances, June 30, 2000 $11,843,918 ($1,186,594) $17,986,407
Net income $784,301 784,301 784,301
Other comprehensive income, net of tax
Unrealized gain on securities 1,008,586 1,008,586 1,008,586
------------
Comprehensive income $1,792,887
============
Cash dividend declared ($.19 per share) (246,838) (246,838)
Stock issued upon exercise of stock options 24,000
Purchase of treasury stock (3,293 shares) (39,964)
-----------------------------------------------
BALANCES, DECEMBER 31, 2000 $12,381,381 ($178,008) $19,516,492
===============================================
See notes to consolidated financial statements.
5
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX-MONTHS ENDED
DECEMBER 31,
2000 1999
Operating Activities
Net cash provided by operating activities $ 1,257,711 $ 810,825
----------- -----------
INVESTING ACTIVITIES
Purchases of securities available for sale (500,000) (6,332,482)
Proceeds from maturities of securities available for sale 1,340,949 7,451,963
Purchases of securities held to maturity -- (7,874,038)
Proceeds from sales of securities available for sale 3,649,998 --
Proceeds from maturities of securities held to maturity 1,643,580 3,862,471
Net change in loans (7,269,914) (733,115)
Purchases of premises and equipment (828,595) (835,491)
Acquisition of deposits (net of cash acquired) -- (459,423)
----------- -----------
Net cash used by investing activities (1,963,982) (4,920,115)
----------- -----------
FINANCING ACTIVITIES
Net change in
Non interest-bearing, interest-bearing and
savings deposits 2,149,416 3,291,172
Certificates of deposit -- 8,057,786
Short term borrowings (400,000) (3,125,000)
Repayment of long term debt (36,872) (34,029)
Cash dividends (246,838) (231,311)
Proceeds from exercise of options on common stock 24,000 34,998
Purchase of treasury stock (39,964) --
----------- -----------
Net cash provided by financing activities 1,449,742 7,993,616
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 743,471 3,884,326
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,171,389 3,573,139
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,914,860 $ 7,457,465
=========== ===========
ADDITIONAL CASH FLOWS INFORMATION
Interest paid $ 4,735,390 $ 3,668,567
Income tax paid 261,812 600,505
See notes to consolidated financial statements.
6
HFB FINANCIAL CORPORATION
Notes to Consolidated Financial Statements (Unaudited)
1. BASIS OF PRESENTATION
The unaudited consolidated financial information for the three and
six-month periods ended December 31, 2000 and 1999 includes the results of
operations of HFB Financial Corporation (the "Corporation") and its wholly
owned subsidiary Home Federal Bank, Federal Savings Bank ("Home Federal" or
the "Bank"). The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial statements and with the instructions to Form 10-Q. It is
suggested that these statements and notes be read in conjunction with the
financial statements and notes thereto included in the Bank's annual report
for the year ended June 30, 2000 on Form 10-K filed with the Securities and
Exchange Commission.
In the opinion of management, the financial information reflects all
adjustments (consisting only of normal recurring adjustments), which are
necessary for a fair presentation of the results of operations for such
periods but should not be considered as indicative of results for a full
year.
2. NON-PERFORMING LOANS AND PROBLEM ASSETS
The following sets forth the activity in the Bank's allowance for loan
losses for the six-months ended December 31, 2000 and 1999:
(Dollars in thousands)
2000 1999
---- ----
Balance July 1 $ 645 $ 1,212
Charge offs (10) (125)
Recoveries 1 2
Provision for loan losses 45 (474)
------- -------
Balance December 31 $ 681 $ 615
Information on impaired loans is summarized below
AT DECEMBER 31 2000
----
Impaired loans with an allowance $ 275
Allowance for impaired loans (included in the Company's
allowance for loan losses) $ 99
SIX-MONTHS ENDED DECEMBER 31 2000
----
Average balance of impaired loans $ 626
Interest income recognized on impaired loans 209
Cash-basis interest received 206
7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes",
"anticipates", "expects", "estimates" or words of similar import. Similarly,
statements that describe the Company's future plans, objectives or goals are
also forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties, which are described in, close proximity to such
statements and which could cause actual results to differ materially from those
anticipated as of the date of this report. Shareholders, potential investors and
other readers are urged to consider these factors in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included herein are
only made as of the date of this report and the Company undertakes no obligation
to publicly update such forward-looking statements to reflect subsequent events
or circumstances.
GENERAL:
HFB Financial Corporation, a Tennessee Corporation, was formed in September 1992
at the direction of Home Federal Bank, Federal Savings Bank for the purpose of
becoming a holding company for the Bank as part of its conversion from mutual to
stock form. The Corporation's primary operation is its investment in the common
stock of the Bank.
The Bank is principally engaged in the business of accepting deposits from the
general public and originating permanent loans, which are secured by one-to-four
family residential properties located in its market area. The Bank also
originates consumer loans and commercial real estate loans, and maintains a
substantial investment portfolio of mortgage-backed and other investment
securities.
The operations of Home Federal, and savings institutions generally, are
significantly influenced by general economic conditions and the monetary and
fiscal policies of government regulatory agencies. Deposit flows and costs of
funds are influenced by interest rates on competing investments and prevailing
market rates of interest. Lending activities are affected by the demand for
financing real estate and other types of loans, which in turn are influenced by
the interest rates at which such financing may be offered and other factors
related to loan demand and the availability of funds. Just as regulatory
authorities influence the Bank's operations, so are its liquidity levels and
capital resources. As of December 31, 2000, management is not aware of any
current recommendations by the regulatory authorities, which if implemented,
would have a material effect on the Bank's operations, liquidity or resources.
FINANCIAL CONDITION
The Corporation's assets increased by 1.75% to $208.8 million at December 31,
2000 compared to $205.2 million at June 30, 2000. The majority of this increase
is reflected in increases in cash and cash equivalents, loans and fixed assets.
These increases were financed primarily by an increase in deposits and a
decrease in investment securities.
Cash and cash equivalents increased by $743,000 to $3.915 million at December
31, 2000 from $3.171 million at June 30, 2000. This increase was primarily due
to a larger uncollected balance at the Bank's clearing account at the Federal
Reserve Bank.
The Company maintains a portfolio of trading account securities, which is
comprised of common stock of other financial institutions. The portfolio was
$904,000 at December 31, 2000 compared to $759,000 at June 30, 2000. Most of
this increase was attributable to an increase in the fair market value of the
portfolio.
Investment securities, available for sale, decreased $2.9 million to $33.8
million at December 31, 2000 from $36.7 million at June 30, 2000 as the result
of the sale of $3.2 million in securities, net of securities purchased and $1.3
million in securities matured offset by a $1.6 million increase in market value.
Investment securities, held to maturity, decreased $1.6 million to $23.1 million
at December 31, 2000 from $24.7 million at June 30, 2000 due to
8
securities maturing. The proceeds from sold and matured securities were
primarily used to fund an increase in the loan portfolio.
Loans, net, increased by $7.2 million to $138.6 million at December 31, 2000
from $131.4 million at June 30, 2000 as the result of continued mortgage loan
demand and an increase in participation loans. The Corporation continues to
maintain a high percentage of its loan portfolio in adjustable-rate residential
mortgages.
At December 31, 2000, the allowance for loan losses was $681,000 or .49% of
loans receivable compared to $645,000 or .49% of loans receivable at June 30,
2000.
Premises and equipment increased by $645,000 to $4.520 million at December 31,
2000 from $3.871 million at June 30, 2000, primarily due to the $437,000
purchase of real estate which houses the recently acquired branch in Harlan
Kentucky, purchases of office furniture for the main office, computer software
and computer hardware.
Total deposits increased by $2.2 million to $174.7 million at December 31, 2000
from $172.5 million at June 30, 2000. During the six-months ended December 31,
2000, certificates of deposit increased $3.0 million, while NOW accounts and
savings deposits decreased $800,000. Competition for deposits in the local
market has become increasingly fierce from other banks primarily due to
increased loan demand.
Short-term borrowings were paid during the six-months ended December 31, 2000
primarily due to funds provided from an increase in deposits and a decrease in
the investment portfolio.
The Bank's regulatory liquidity ratio was 38.6% at December 31, 2000 as compared
to 40.1% at June 30, 2000. At December 31, 2000 the Bank met all the regulatory
capital requirements to be considered "well capitalized" under bank regulations.
Tangible, core and risk-based capital ratios were 8.7%, 8.7% and 17.6%
respectively at December 31, 2000 as compared to 8.6%, 8.6% and 18.3%
respectively, at June 30, 2000.
RESULTS OF OPERATIONS FOR THE THREE-MONTHS ENDED DECEMBER 31, 2000 AND 1999
Net income increased by $96,000 to $451,000 for the three-month period ended
December 31, 2000 from $355,000 for the three-month period ended December 31,
1999. The primary reasons for the increase were a $104,000 increase in net
interest income and a $146,000 increase in other income offset by a $22,000
increase in the provision for loan losses, a $14,000 increase in other expense
and a $118,000 increase in income tax expense.
Net interest income increased by $104,000 for the three-month period ended
December 31, 2000 as compared to the three-month period ended December 31, 1999,
primarily a result of a higher average balance of earning assets.
Interest on loans increased by $512,000 to $3.023 million for the three-month
period ended December 31, 2000 as compared to $2.511 million for the three-month
period ended December 31, 1999. This increase is mainly attributable to a higher
weighted-average balance of loans receivable outstanding and the receipt of
$125,000 for payment of interest on a non-accruing loan.
Interest on investment securities and other dividend income decreased by $49,000
to $997,000 for the three-month period ended December 31, 2000 from $1.046
million for the three-month period ended December 31, 1999. This decrease is
primarily the result of a lower weighted-average balance during the period.
Interest on deposits with other financial institutions decreased by $13,000 to
$26,000 for the three-month period ended December 3, 2000 from $39,000 for the
three-month period ended December 31, 1999 primarily due to a lower level of
interest-bearing cash balances.
Interest expense on deposits increased by $336,000 to $2.214 million for the
three-month period ended December 31, 2000 from $1.878 million for the
three-month period ended December 31, 1999 as a result of higher volume and a
higher cost of funds.
9
Interest expense on short-term borrowings and long-term debt increased by $9,000
to an aggregate of $175,000 for the three-month period ended December 31, 2000
from an aggregate of $166,000 for the three-month period ended December 31,
1999, primarily due to a higher level of long-term debt.
The provision for loan losses increased $22,000 for the three-month period ended
December 31, 2000 as compared to the same period in 1999. The provision was the
result of management's evaluation of the adequacy of the allowance for loan
losses including consideration of recoveries of loans previously charged off,
the perceived risk exposure among loan types, actual loss experience,
delinquency rates, and current economic conditions. The Bank's allowance for
loan losses as a percent of total loans at December 31, 2000 was 0.49%.
Non-interest income increased by $147,000 to $252,000 for the three-month period
ended December 31, 2000 as compared to $105,000 for the same period in 1999. The
increase was primarily attributable to a net increase in realized and unrealized
gains on trading account securities and realized gains on available for sale
securities of $88,000 and an increase of $64,000 in service charges on deposits.
Non-interest expense increased slightly by $14,000 to $1.196 million for the
three-month period ended December 31, 2000 as compared to $1.182 million for the
same period in 1999.
Occupancy expense increased by $7,000 to $81,000 for the three-months ended
December 31, 2000 from $74,000 for the three months-ended December 31, 1999
primarily due to an increase in utilities expense.
Equipment expense increased by $35,000 to $99,000 for the three-months ended
December 31, 2000 from $64,000 for the three months-ended December 31, 1999
primarily due to an increase in depreciation expense attributable to the
addition of fixed assets over the past 12 months.
Data processing fees decreased by $31,000 to $67,000 for the three-month period
ended December 31, 2000 from $98,000 for the three-month period ended December
31, 1999 primarily due to one time costs associated with the acquisition of the
branch office in Harlan expensed during the three-months ended December 31,
1999.
Advertising expense decreased by $26,000 to $43,000 for the quarter ended
December 31, 2000 compared to $69,000 for the quarter ended December 31, 1999
primarily due to a lower level of advertising activity in the current period.
Other expenses increased by $31,000 to $276,000 for the three-month period ended
December 31, 2000 from $245,000 for the three-month period ended December 31,
1999, primarily due to the addition of core deposit intangible amortization
expense related to the Harlan branch purchase in 1999.
Income tax expense increased by $117,000 to $237,000 for the three-month period
ended December 31, 2000 compared to $120,000 for the three-months ended December
31, 1999 due a higher level of income.
RESULTS OF OPERATIONS FOR THE SIX-MONTHS ENDED DECEMBER 31, 2000 AND 1999
Net income decreased by $155,000 to $784,000 for the six-month period ended
December 31, 2000 from $939,000 for the six-month period ended December 31,
1999. The primary reasons for the decrease were a $519,000 increase in provision
for loan losses and a $137,000 increase in non-interest expense offset by a
$79,000 increase in net interest income, a $307,000 increase in non-interest
income and a $115,000 decrease in income tax expense.
Net interest income increased by $79,000 for the six-month period ended December
31, 2000 as compared to the six-month period ended December 31, 1999, primarily
as the result of a higher volumes in the period ended December 31, 2000.
Interest on loans increased by $723,000 to $5.781 million for the six-month
period ended December 31, 2000 as compared to $5.058 million for the six-month
period ended December 31, 1999. This increase is mainly attributable to higher
yields and higher volume.
10
Interest on investment securities and other dividend income increased by $50,000
to $2.052 million for the six-month period ended December 31, 2000 from $2.002
million for the six-month period ended December 31, 1999. This increase is
primarily the result of higher weighted-average balances during the period.
Interest expense on deposits increased by $732,000 to $4.378 million for the
six-month period ended December 31, 2000 from $3.646 million for the six-month
period ended December 31, 1999 as a result of higher volume and a higher cost of
funds.
Interest expense on short term borrowings and long term debt decreased by
$41,000 to an aggregate of $349,000 for the six-month period ended December 31,
2000 from an aggregate of $390,000 for the six-month period ended December 31,
1999 due to lower levels of short-term borrowings.
The provision for loan losses increased $519,000 for the six-month period ended
December 31, 2000 as compared to the same period in 1999. This change actually
reflects an unusual one-time recovery in the quarter ended September 30, 2000
when a total of $904,000 of impaired loans were paid off. The amount charged off
for those loans was significantly less than what was specifically reserved for
these loans and resulted in a $474,000 reduction in the overall allowance. The
provision was the result of management's evaluation of the adequacy of the
allowance for loan losses including consideration of recoveries of loans
previously charged off, the perceived risk exposure among loan types, actual
loss experience, delinquency rates, and current economic conditions. The Bank's
allowance for loan losses as a percent of total loans, net at December 31, 2000
was .49%.
The Bank's non-interest income increased by $307,000 to $471,000 for the
six-month period ended December 31, 2000 as compared to $164,000 for the same
period in 1999. The increase was mainly attributable to a net increase in
realized and unrealized gains on trading account securities of $206,000 and a
$99,000 increase in service charges for deposit accounts. The increase in
realized and unrealized gains on trading account securities was primarily the
result of an increase in the market value of equity securities included in the
trading account portfolio. The trading account portfolio is comprised of common
stocks of other financial institutions.
Non-interest expense increased by $137,000 to $2.375 million for the six-month
period ended December 31, 2000 as compared to $2.238 million for the same period
in 1999. Compensation and benefits increased by $27,000 to $1.049 million for
the six-month period ended December 31, 2000 as compared to $1.022 million for
the same period in 1999. This increase is primarily attributable to annual wage
increases.
Occupancy expense increased by $41,000 to $170,000 for the six-month period
ended December 31, 2000 compared to $129,000 for the same period in 1999. as the
Company incurred additional expenses from its new Harlan branch office. This
increase was primarily due to a $14,000 increase in depreciation expense, an
$11,000 increase in repairs and maintenance expense, an $11,000 increase in
property tax expense and an increase of $5,000 in utilities expense.
Equipment expense increased by $76,000 to $191,000 for the six-month period
ended December 31, 2000 compared to $115,000 for the same period in 1999. This
increase was mainly the result of higher deprecation associated with the
purchase of new furniture and equipment over the past year.
Data processing fees decreased by $7,000 to $134,000 for the six-month period
ended December 31, 2000 from $141,000 for the six-month period ended December
31, 1999 primarily due to one time conversion expenses incurred for the Harlan
branch acquisition in the six-months ended December 31, 1999.
Deposit insurance expense decreased by $28,000 to $17,000 for the six-month
period ended December 31, 2000 from $45,000 for the six-month period ended
December 31, 1999 due to lower deposit premium rates.
Legal and professional fees increased by $12,000 to $116,000 for the six-month
period ended December 31, 2000 from $104,000 for the six-month period ended
December 31, 1999 primarily due to an increase in legal fees.
Advertising expense decreased by $40,000 to $84,000 for the six-month period
ended December 31, 2000 compared to $124,000 for the six-month period ended
December 31, 1999 due to a lower level of advertising.
11
Other expenses increased by $41,000 to $525,000 for the six-month period ended
December 31, 2000 from $484,000 for the six-month period ended December 31, 1999
primarily as the result of the addition of core deposit intangible amortization
expense related to the Harlan branch purchase in 1999.
Income tax expense decreased by $115,000 to $413,000 for the six-month period
ended December 31, 2000 compared to $528,000 for the six-months ended December
31, 1999 due to a lower level of taxable income.
12
HFB FINANCIAL CORPORATION
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a. The Corporation held its annual meeting of Stockholders on
October 31, 2000.
b. Not Applicable
c. At the Annual Meeting, shareholders voted on the following
matters:
(1) The election of the following persons to three-year
terms as directors of the Corporation:
Nominees For Withheld
-------- --- --------
David B. Cook 912,211 999
Earl Burchfield 912,211 999
As a result, all were elected as directors of the Corporation for
terms to expire in 2003.
(2) The approval of the HFB Financial Corporation Long-term
Incentive Compensation Plan:
For Against Abstain
--- ------- -------
880,884 13,086 19,330
As a result, the HFB Financial Corporation Long-term Incentive
Compensation Plan was Approved with a total of 163,807 broker
non-votes.
d. Not Applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
None
b. Reports on Form 8-K
None
13
HFB FINANCIAL CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned, thereunto duly authorized.
HFB FINANCIAL CORPORATION
By: /s/ David B. Cook
-------------------------
David B. Cook
President and
Chief Executive Officer
By: /s/ Stanley Alexander, Jr.
----------------------------
Stanley Alexander, Jr.
Chief Financial Officer
Dated: February 12, 2001
14