UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2000
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to _______________
Commission File Number: 0-25906
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ASB FINANCIAL CORP.
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(Exact name of small business issuer as specified in its charter)
Ohio 31-1429488
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
503 Chillicothe Street Portsmouth, Ohio 45662
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(Address of principal executive offices)
(740) 354-3177
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(Issuer's telephone number)
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(Former name, former address and former fiscal year, if changed
since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: February 9, 2001 - 1,559,858 shares
of common stock
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
Page 1 of 16 pages
INDEX
Page
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II - OTHER INFORMATION 15
SIGNATURES 16
2
ASB Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
December 31, June 30,
ASSETS 2000 2000
Cash and due from banks $ 709 $ 917
Interest-bearing deposits in other financial institutions 4,258 4,152
------- -------
Cash and cash equivalents 4,967 5,069
Investment securities available for sale - at market 20,336 19,112
Mortgage-backed securities available for sale - at market 8,151 8,616
Loans receivable - net 97,450 95,084
Office premises and equipment - at depreciated cost 1,396 1,366
Federal Home Loan Bank stock - at cost 761 733
Accrued interest receivable on loans 118 63
Accrued interest receivable on mortgage-backed securities 60 59
Accrued interest receivable on investments and
interest-bearing deposits 350 355
Prepaid expenses and other assets 477 542
Prepaid federal income taxes 319 228
Deferred federal income tax assets 141 671
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Total assets $134,526 $131,898
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $114,088 $110,007
Advances from the Federal Home Loan Bank 4,774 7,790
Advances by borrowers for taxes and insurance 164 173
Accrued interest payable 128 89
Other liabilities 1,145 1,258
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Total liabilities 120,299 119,317
Shareholders' equity
Preferred stock, 1,000,000 shares authorized, no par value;
no shares issued - -
Common stock, authorized 4,000,000 shares without par or stated value;
1,746,924 shares issued - -
Additional paid-in capital 8,535 8,454
Retained earnings, restricted 8,245 7,870
Shares acquired by stock benefit plans (834) (1,059)
Accumulated comprehensive income (loss), unrealized gains (losses)
on securities designated as available for sale, net of related tax effects 437 (592)
Less 184,566 and 177,366 shares of treasury stock, respectively - at cost (2,156) (2,092)
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Total shareholders' equity 14,227 12,581
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Total liabilities and shareholders' equity $134,526 $131,898
======= =======
3
ASB Financial Corp.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
For the six months For the three months
ended December 31, ended December 31,
2000 1999 2000 1999
Interest income
Loans $4,013 $3,437 $2,024 $1,769
Mortgage-backed securities 295 307 142 151
Investment securities 811 757 410 371
Interest-bearing deposits and other 2 9 1 4
----- ----- ----- -----
Total interest income 5,121 4,510 2,577 2,295
Interest expense
Deposits 3,001 2,445 1,548 1,230
Borrowings 221 162 105 88
----- ----- ----- -----
Total interest expense 3,222 2,607 1,653 1,318
----- ----- ----- -----
Net interest income 1,899 1,903 924 977
Provision for losses on loans - 1 - -
----- ----- ----- -----
Net interest income after provision for
losses on loans 1,899 1,902 924 977
Other income
Gain on sale of investment securities 52 - 27 -
Other operating 184 155 98 77
----- ----- ----- -----
Total other income 236 155 125 77
General, administrative and other expense
Employee compensation and benefits 778 748 386 376
Occupancy and equipment 88 52 44 28
Federal deposit insurance premiums 14 29 7 14
Franchise taxes 76 88 25 37
Data processing 168 145 83 76
Other operating 267 252 145 158
----- ----- ----- -----
Total general, administrative and other expense 1,391 1,314 690 689
----- ----- ----- -----
Earnings before income taxes 744 743 359 365
Federal income taxes
Current 205 212 98 93
Deferred - (1) - 13
----- ----- ----- -----
Total federal income taxes 205 211 98 106
----- ----- ----- -----
NET EARNINGS $ 539 $ 532 $ 261 $ 259
===== ===== ===== =====
EARNINGS PER SHARE
Basic $.36 $.34 $.18 $.17
=== === === ===
Diluted $.35 $.34 $.17 $.17
=== === === ===
4
ASB Financial Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
For the six months For the three months
ended December 31, ended December 31,
2000 1999 2000 1999
Net earnings $ 539 $ 532 $261 $ 259
Other comprehensive income (loss), net of taxes:
Unrealized holding gains (losses) on securities during
the period, net of taxes (benefits) of $548, $(268),
$347 and $(152) during the respective periods 1,063 (520) 673 (296)
Reclassification adjustment for realized gains included
in earnings, net of taxes of $18 and $9 during the six
and three month periods ended December 31, 2000,
respectively (34) - (18) -
----- ---- --- ----
Comprehensive income (loss) $1,568 $ 12 $916 $ (37)
===== ==== === ====
Accumulated comprehensive income (loss) $ 437 $(255) $437 $(255)
===== ==== === ====
5
ASB Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended December 31,
(In thousands)
2000 1999
Cash flows from operating activities:
Net earnings for the period $ 539 $ 532
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of discounts and premiums on loans,
investments and mortgage-backed securities - net (37) 16
Amortization of deferred loan origination fees (29) (28)
Depreciation and amortization 60 52
Amortization of expense related to stock benefit plans 306 325
Provision for losses on loans - 1
Federal Home Loan Bank stock dividends (28) (28)
Gain on sale of investment securities (52) -
Increase (decrease) in cash due to changes in:
Accrued interest receivable (51) (10)
Prepaid expenses and other assets 65 257
Other liabilities (74) (101)
Federal income taxes
Current (91) 79
Deferred - (1)
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Net cash provided by operating activities 608 1,094
Cash flows provided by (used in) investing activities:
Purchase of investment securities - (765)
Proceeds from maturity of investment securities 255 -
Proceeds from sale of investment securities 53 -
Principal repayments on mortgage-backed securities 581 955
Loan principal repayments 9,620 8,563
Loan disbursements (11,957) (16,048)
Purchase of office equipment (90) (280)
Decrease in certificates of deposit in other financial institutions - net - 99
------ ------
Net cash used in investing activities (1,538) (7,476)
Cash flows provided by (used in) financing activities:
Net increase in deposit accounts 4,081 1,957
Proceeds from Federal Home Loan Bank advances - 7,500
Repayment of Federal Home Loan Bank advances (3,016) (5,516)
Advances by borrowers for taxes and insurance (9) (16)
Purchase of treasury stock (64) (649)
Proceeds from exercise of stock options - 61
Dividends paid on common stock (164) (1,792)
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Net cash provided by financing activities 828 1,545
------ ------
Net decrease in cash and cash equivalents (102) (4,837)
Cash and cash equivalents at beginning of period 5,069 7,566
------ ------
Cash and cash equivalents at end of period $ 4,967 $ 2,729
====== ======
6
ASB Financial Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the six months ended December 31,
(In thousands)
2000 1999
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ 225 $ 157
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Interest on deposits and borrowings $3,183 $2,598
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Supplemental disclosure of noncash investing activities:
Unrealized gains (losses) on securities designated as available
for sale, net of related tax effects $1,029 $ (520)
===== =====
7
ASB Financial Corp.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the six and three months ended December 31, 2000 and 1999
1. Basis of Presentation
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-QSB and, therefore, do not
include information or footnotes necessary for a complete presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. Accordingly, these financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto of ASB Financial Corp. (the "Corporation")
included in the Annual Report on Form 10-KSB for the year ended June 30,
2000. However, in the opinion of management, all adjustments (consisting of
only normal recurring accruals) which are necessary for a fair presentation
of the financial statements have been included. The results of operations
for the three and six-month periods ended December 31, 2000, are not
necessarily indicative of the results which may be expected for the entire
fiscal year.
2. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Corporation and its wholly owned subsidiary, American Savings Bank, fsb
("American" or the "Savings Bank"). All significant intercompany items have
been eliminated.
3. Earnings Per Share
Basic earnings per share is computed based upon the weighted-average shares
outstanding during the period, less shares in the ASB Financial Corp.
Employee Stock Ownership Plan (the "ESOP") that are unallocated and not
committed to be released. Weighted-average common shares outstanding, which
give effect to 37,209 unallocated ESOP shares, totaled 1,517,630 and
1,515,335 for the six and three-month periods ended December 31, 2000.
Weighted-average common shares deemed outstanding, which give effect to
51,432 unallocated ESOP shares, totaled 1,561,834 and 1,546,206 for the six
and three-month periods ended December 31, 1999.
Diluted earnings per share is computed taking into consideration common
shares outstanding and dilutive potential common shares to be issued under
the Corporation's stock option plan. Weighted-average common shares deemed
outstanding for purposes of computing diluted earnings per share totaled
1,545,384 and 1,540,201 for the six and three-month periods ended December
31, 2000, and 1,578,686 and 1,556,030 for the six and three-month periods
ended December 31, 1999, respectively. Incremental shares related to the
assumed exercise of stock options totaled 27,754 and 24,866 shares for the
six and three-month periods ended December 31, 2000 and 16,852 and 9,824
shares for the six and three-month periods ended December 31, 1999.
8
ASB Financial Corp.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six and three months ended December 31, 2000 and 1999
4. Effects of Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which requires entities
to recognize all derivatives in their financial statements as either assets
or liabilities measured at fair value. SFAS No. 133 also specifies new
methods of accounting for hedging transactions, prescribes the items and
transactions that may be hedged, and specifies detailed criteria to be met
to qualify for hedge accounting.
The definition of a derivative financial instrument is complex, but in
general, it is an instrument with one or more underlyings, such as an
interest rate or foreign exchange rate, that is applied to a notional
amount, such as an amount of currency, to determine the settlement
amount(s). It generally requires no significant initial investment and can
be settled net or by delivery of an asset that is readily convertible to
cash. SFAS No. 133 applies to derivatives embedded in other contracts,
unless the underlying of the embedded derivative is clearly and closely
related to the host contract.
SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years
beginning after June 15, 2000. On adoption, entities are permitted to
transfer held-to-maturity debt securities to the available-for-sale or
trading category without calling into question their intent to hold other
debt securities to maturity in the future. Management adopted SFAS No. 133
effective July 1, 2000, as required, without material impact on the
Corporation's financial position or results of operations.
In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," which
revises the standards for accounting for securitizations and other transfers
of financial assets and collateral and requires certain disclosures, but
carries over most of the provisions of SFAS No. 125 without reconsideration.
SFAS No. 140 is effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after March 31, 2001. SFAS No.
140 is effective for recognition and reclassification of collateral and for
disclosures relating to securitization transactions and collateral for
fiscal years ending after December 15, 2000, and is not expected to have a
material effect on the Corporation's financial position or results of
operations.
9
ASB Financial Corp.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Discussion of Financial Condition Changes from June 30, 2000 to December 31,
2000
At December 31, 2000, the Corporation's assets totaled $134.5 million, an
increase of $2.6 million, or 2.0%, over total assets at June 30, 2000. The
increase in assets was funded primarily by growth in deposits of $4.1 million
and a $1.6 million increase in shareholders' equity, which were partially offset
by a $3.0 million decrease in advances from the Federal Home Loan Bank ("FHLB").
Liquid assets (i.e. cash and interest-bearing deposits) decreased by $102,000,
or 2.0%, from June 30, 2000 levels, to a total of $5.0 million at December 31,
2000. Investment securities totaled $20.3 million at December 31, 2000, an
increase of $1.2 million, or 6.4%, over June 30, 2000 levels. During the six
month period ended December 31, 2000, unrealized gains on available for sale
securities increased by $1.4 million.
Mortgage-backed securities totaled $8.2 million at December 31, 2000, a decrease
of $465,000, or 5.4%, from the total at June 30, 2000. The decrease was due
primarily to principal repayments of $581,000, which were partially offset by a
decline in net unrealized losses totaling $132,000 for the quarter.
Loans receivable increased by $2.4 million, or 2.5%, during the six month period
ended December 31, 2000, to a total of $97.5 million. Loan disbursements
amounted to $12.0 million and were partially offset by principal repayments of
$9.6 million. The allowance for loan losses totaled $719,000 and $723,000 at
December 31, 2000 and June 30, 2000, respectively. Nonperforming and nonaccrual
loans totaled $694,000 and $281,000 at December 31, 2000 and June 30, 2000,
respectively. The allowance for loan losses represented 103.6% and 257.3% of
nonperforming loans as of December 31, 2000 and June 30, 2000, respectively.
Although management believes that its allowance for loan losses at December 31,
2000, was adequate based upon the available facts and circumstances, there can
be no assurance that additions to such allowance will not be necessary in future
periods, which could adversely affect the Corporation's results of operations.
Deposits totaled $114.1 million at December 31, 2000, an increase of $4.1
million, or 3.7%, over June 30, 2000 levels. The growth in deposits was
primarily attributable to management's efforts to maintain a moderate rate of
deposit growth through marketing and pricing strategies. Proceeds from deposit
growth were generally used to fund new loan originations and repay advances from
the FHLB.
Advances from the FHLB totaled $4.8 million at December 31, 2000, a decrease of
$3.0 million, or 38.7%, compared to June 30, 2000.
Shareholders' equity totaled $14.2 million at December 31, 2000, an increase of
$1.6 million, or 13.1%, over June 30, 2000 levels. The increase resulted
primarily from a $1.0 million increase in unrealized gains on securities
designated as available for sale and net earnings of $539,000, which were
partially offset by dividends on common shares totaling $164,000 for the
six-month period.
American is required to meet minimum capital standards promulgated by the Office
of Thrift Supervision ("OTS"). At December 31, 2000, American's regulatory
capital was well in excess of the minimum capital requirements.
10
ASB Financial Corp.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Six-Month Periods Ended December 31,
2000 and 1999
General
Net earnings amounted to $539,000 for the six months ended December 31, 2000, an
increase of $7,000, or 1.3%, compared to the $532,000 of net earnings reported
for the same period in 1999. The increase in earnings resulted primarily from an
$81,000 increase in other income and a $6,000 decrease in the provision for
federal income taxes, which were partially offset by a $4,000 decrease in net
interest income and a $77,000 increase in general, administrative and other
expense.
Net Interest Income
Net interest income decreased by $4,000, or 0.2%, for the six months ended
December 31, 2000, compared to the 1999 period. Interest income on loans
increased by $576,000, or 16.8%, during the six-month period ended December 31,
2000, compared to the 1999 period, due primarily to an approximate $10.4 million
increase in the average portfolio balance outstanding and a 33 basis point
increase in the weighted-average interest rate year to year. Interest income on
investment and mortgage-backed securities and interest-bearing deposits and
other increased by $35,000, or 3.3%, due primarily to a 24 basis point increase
in the weighted-average interest rate year to year, which was partially offset
by a $110,000 decrease in the average balance of the related assets.
Interest expense on deposits increased by $556,000, or 22.7%, due primarily to
an increase of approximately $10.2 million in the average balance of deposits
outstanding, coupled with a 56 basis point increase in the weighted-average
interest rate year to year. Interest expense on borrowings increased by $59,000,
or 36.4%, due primarily to a 101 basis point increase in the average cost of
borrowings, and a $900,000 increase in the average balance of borrowings
outstanding.
Provision for Losses on Loans
As a result of an analysis of historical experience, the volume and type of
lending conducted by the Savings Bank, the status of past due principal and
interest payments, general economic conditions, particularly as such conditions
relate to the Savings Bank's market area, and other factors related to the
collectibility of the Savings Bank's loan portfolio, management determined that
the allowance for loan losses was adequate and did not record a provision for
losses on loans for the six-month period ended December 31, 2000. There can be
no assurance that the loan loss allowance will be adequate to cover losses on
nonperforming assets in the future.
Other Income
Other income increased by $81,000, or 52.3%, for the six months ended December
31, 2000, compared to the same period in 1999, due primarily to a $52,000 gain
on the sale of investment securities, coupled with a $29,000, or 18.7%, increase
in other operating income, due primarily to increased service fees on ATM and
other account transactions, as well as increased revenues related to sales of
non-deposit investment products through an agency arrangement with a third-party
vendor.
11
ASB Financial Corp.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Six-Month Periods Ended December 31,
2000 and 1999 (continued)
General, Administrative and Other Expense
General, administrative and other expense increased by $77,000, or 5.9%, during
the six months ended December 31, 2000, compared to the same period in 1999.
This increase resulted primarily from a $30,000, or 4.0%, increase in employee
compensation and benefits, a $36,000, or 69.2%, increase in occupancy and
equipment expense, a $23,000, or 15.9%, increase in data processing expense and
a $15,000, or 6.0%, increase in other operating expense, which were partially
offset by a $15,000, or 51.7%, decrease in FDIC premiums and a $12,000, or
13.6%, decrease in franchise taxes. The increase in employee compensation and
benefits was due primarily to an increase in staffing levels including the
hiring of a chief financial officer. The increase in occupancy and equipment
expense reflects increased depreciation and maintenance costs associated with a
new drive-through location and the new computer hardware purchased during fiscal
2000. The increase in data processing expense primarily reflects an increase in
transaction costs, coupled with the effects of the Corporation's overall growth
year to year. The decrease in FDIC insurance premiums and franchise tax expense
is due to a reduction in FDIC premium rates and a decrease in shareholders'
equity in prior periods. The increase in other operating expense relates
primarily to higher amortization expense associated with the Corporation's
participation in a low income housing partnership.
Federal Income Taxes
The provision for federal income taxes totaled $205,000 for the six months ended
December 31, 2000, a decrease of $6,000, or 2.8%, compared to the same period in
1999. This decrease resulted primarily from the effects of additional tax
credits from the Savings Bank's investment in a low-income housing partnership.
The effective tax rate was 27.6% and 28.4% for the six months ended December 31,
2000 and 1999, respectively.
Comparison of Operating Results for the Three-Month Periods Ended December 31,
2000 and 1999
General
Net earnings amounted to $261,000 for the three months ended December 31, 2000,
an increase of $2,000, or 0.8%, compared to the $259,000 of net earnings
reported for the same period in 1999. The increase in earnings resulted
primarily from a $48,000 increase in other income and an $8,000 decrease in the
provision for federal income taxes, which were partially offset by a $53,000
decrease in net interest income.
12
ASB Financial Corp.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three-Month Periods Ended December 31,
2000 and 1999 (continued)
Net Interest Income
Net interest income decreased by $53,000, or 5.4%, for the three months ended
December 31, 2000, compared to the 1999 period. Interest income on loans
increased by $255,000, or 14.4%, during the three-month period ended December
31, 2000, compared to the 1999 period, due primarily to an approximate $8.9
million increase in the average portfolio balance outstanding and a 35 basis
point increase in the weighted average interest rate year to year. Interest
income on investment and mortgage-backed securities and interest-bearing
deposits and other increased by $27,000, or 5.1%, due primarily to a 22 basis
point increase in the weighted-average interest rate year to year, and a
$580,000 increase in the average balance of the related assets.
Interest expense on deposits increased by $318,000, or 25.9%, due primarily to
an increase of approximately $10.8 million in the average balance of deposits
outstanding, coupled with a 66 basis point increase in the weighted-average
interest rate year to year. Interest expense on borrowings increased by $17,000,
or 19.3%, due primarily to a 73 basis point increase in the average cost of
borrowings, and a $340,000 increase in the average balance of borrowings
outstanding.
Provision for Losses on Loans
As a result of an analysis of historical experience, the volume and type of
lending conducted by the Savings Bank, the status of past due principal and
interest payments, general economic conditions, particularly as such conditions
relate to the Savings Bank's market area, and other factors related to the
collectibility of the Savings Bank's loan portfolio, management determined that
the allowance for loan losses was adequate and did not record a provision for
losses on loans for the three-month periods ended December 31, 2000 and 1999.
There can be no assurance that the loan loss allowance will be adequate to cover
losses on nonperforming assets in the future.
Other Income
Other income increased by $48,000, or 62.3%, for the three months ended December
31, 2000, compared to the same period in 1999, due primarily to a $27,000 gain
on the sale of investment securities, coupled with a $21,000, or 27.3%, increase
in other operating income, due primarily to increased service fees on ATM and
other account transactions during the period, as well as increased revenues
related to sales of non-deposit investment products through an agency
arrangement with a third-party vendor.
General, Administrative and Other Expense
General, administrative and other expense increased by $1,000, or 0.1%, during
the three months ended December 31, 2000, compared to the same period in 1999.
This increase was comprised primarily of a $10,000, or 2.7%, increase in
employee compensation and benefits, a $16,000, or 57.1%, increase in occupancy
and equipment expense and a $7,000, or 9.2%, increase in data processing
expense, which were partially offset by a $7,000, or 50.0%, decrease in FDIC
premiums, a $12,000, or 32.4%, decrease in franchise taxes and a $13,000, or
8.2%, decrease in other operating expense. The increase in employee compensation
and benefits was due primarily to an increase in staffing levels including the
hiring of a chief financial officer. The increase in occupancy and
13
ASB Financial Corp.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three-Month Periods Ended December 31,
2000 and 1999 (continued)
General, Administrative and Other Expense (continued)
equipment expense reflects increased depreciation and maintenance costs
associated with a new drive-through location and the new computer hardware
purchased during fiscal 2000. The increase in data processing expense primarily
reflects an increase in transaction costs, coupled with the effects of the
Corporation's overall growth year to year. The decrease in FDIC insurance
premiums and franchise tax expense is due to a reduction in FDIC premium rates
and a decrease in shareholders' equity during the franchise tax assessment
period. The decrease in other operating expense resulted primarily from
management's overall effort to reduce overhead costs and improve operating
efficiency.
Federal Income Taxes
The provision for federal income taxes totaled $98,000 for the three months
ended December 31, 2000, a decrease of $8,000, or 7.5%, compared to the same
period in 1999. This decrease resulted primarily from the decline in net
earnings before taxes of $6,000, or 1.6%, and the effects of additional tax
credits from the Savings Bank's investment in a low income housing partnership.
The effective tax rates were 27.3% and 29.0% for the three-month periods ended
December 31, 2000 and 1999, respectively.
14
ASB Financial Corp.
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities and Use of Proceeds
Not applicable
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
Exhibits: None.
Reports on Form 8-K: None.
15
ASB Financial Corp.
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.
Date: February 12, 2001 By: /s/Robert M. Smith
------------------------ ---------------------------------
Robert M. Smith
President, Chief Executive Officer
and principal financial officer
16