QUAKER CITY BANCORP INC - 10-Q Quarterly Report

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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, 2003

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: 0-22528

QUAKER CITY BANCORP, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		95-4444221
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7021 Greenleaf Avenue, Whittier, California		90602
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (562) 907-2200

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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x NO ¨

Number of shares outstanding of the registrant’s sole class of common stock at May 9, 2003: 6,377,265.

Quaker City Bancorp, Inc.

Index

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Statements of Financial Condition (unaudited) as of March 31, 2003 and June 30, 2002	3

	Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended March 31, 2003 and 2002	4

	Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended March 31, 2003 and 2002	5

	Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended March 31, 2003 and 2002	6

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION

Item 5.	Other Information	25

Item 6.	Exhibits and Reports on Form 8-K	26

SIGNATURES		33

CERTIFICATIONS		34

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Quaker City Bancorp, Inc.

Consolidated Statements of Financial Condition

Unaudited

(In thousands, except share data)

	March 31, 2003			June 30, 2002
Assets

Cash and due from banks	$	25,496		$	14,128
Interest-bearing deposits		443			762
Federal funds sold and other short-term investments		8,000			3,500
Investment securities held-to-maturity		17,209			14,273
Investment securities available-for-sale		30,123			79,234
Loans receivable, net		1,264,773			1,193,035
Loans receivable held-for-sale		1,660			3,436
Mortgage-backed securities held-to-maturity		96,982			117,827
Mortgage-backed securities available-for-sale		85,584			26,449
Real estate held-for-sale		—			18
Federal Home Loan Bank stock, at cost		19,578			16,685
Office premises and equipment, net		7,447			7,327
Deferred tax asset		806			324
Accrued interest receivable and other assets		10,314			10,436

Total assets	$	1,568,415		$	1,487,434

Liabilities and Stockholders’ Equity

Deposits	$	1,064,424		$	1,009,725
Federal Home Loan Bank advances		354,500			330,700
Accounts payable and accrued expenses		7,790			8,605
Other liabilities		6,883			9,893

Total liabilities		1,433,597			1,358,923

Stockholders’ Equity:
Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 6,359,682 shares and 6,610,017 at March 31, 2003 and June 30, 2002, respectively		64			66
Additional paid-in capital		127,335			124,428
Accumulated other comprehensive loss		(471	)		(244	)
Retained earnings, substantially restricted		8,274			4,818
Deferred compensation		(384	)		(557	)

Total stockholders’ equity		134,818			128,511

Total liabilities and stockholders’ equity	$	1,568,415		$	1,487,434

See accompanying notes to consolidated financial statements.

Quaker City Bancorp, Inc.

Consolidated Statements of Operations

Unaudited

(In thousands, except share and per share data)

	Three Months Ended March 31,				Nine Months Ended March 31,
	2003		2002		2003		2002
Interest income:
Loans receivable	$	21,770	$	22,473	$	65,975	$	68,252
Mortgage-backed securities		1,920		2,129		5,809		6,243
Investment securities		527		640		1,854		1,745
Other		256		417		761		957

Total interest income		24,473		25,659		74,399		77,197

Interest expense:
Deposits		5,964		7,386		19,012		25,717
Federal Home Loan Bank advances		3,873		3,968		11,663		11,803

Total interest expense		9,837		11,354		30,675		37,520

Net interest income before provision for loan losses		14,636		14,305		43,724		39,677

Provision for loan losses		114		—		514		200

Net interest income after provision for loan losses		14,522		14,305		43,210		39,477

Other income:
Deposit fees		1,315		851		3,707		2,526
Loan service charges and fees		410		470		1,503		1,548
Gain on sale of loans held-for-sale		844		256		1,445		530
Commissions		125		167		484		649
Gain on sale of securities available-for-sale		—		—		47		—
Other		61		7		208		32

Total other income		2,755		1,751		7,394		5,285

Other expense:
Compensation and employee benefits		4,043		3,480		11,558		9,870
Occupancy, net		805		723		2,450		2,169
Federal deposit insurance premiums		110		104		326		304
Data processing		400		299		1,166		906
Advertising and promotional		364		252		1,046		945
Consulting fees		202		136		641		491
Prepayment penalty — Federal Home Loan Bank		—		536		—		536
Other general and administrative expense		1,099

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