FIRST BELL BANCORP INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

or

o	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 0-25172

FIRST BELL BANCORP, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		251752651

(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

300 DELAWARE AVENUE, SUITE 1704, WILMINGTON, DELAWARE		19801

(Address of principal executive offices)		(Zip Code)

(302) 427-7883

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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.

x Yes

o No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

x Yes

o No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,535,714 shares of common stock, par value $.01 per share, were outstanding as of May 14, 2003.

FIRST BELL BANCORP, INC.
FORM 10-Q

INDEX

			PAGE

PART I		FINANCIAL INFORMATION

	Item 1	Financial Statements	1

		Consolidated Balance Sheet March 31, 2003 and December 31, 2002 (unaudited)	2

		Consolidated Statement of Income for the Three Months Ended March 31, 2003 and 2002 (unaudited)	3

		Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2003 and 2002 (unaudited)	4

		Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2003 and 2002 (unaudited)	5

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

		Notes to Unaudited Consolidated Financial Statements for the Three Months Ended March 31, 2003 and 2002	7

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

	Item 3	Quantitative and Qualitative Disclosure About Market Risk	16

	Item 4	Controls and Procedures	16

PART II		OTHER INFORMATION

	Item 1	Legal Proceedings	17

	Item 2	Changes in Securities and Use of Proceeds	17

	Item 3	Defaults Upon Senior Securities	17

	Item 4	Submission of Matters to a Vote of Security Holders	17

	Item 5	Other Information	17

	Item 6	Exhibits and Reports on Form 8-K	17

SIGNATURES			18

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

FIRST BELL BANCORP, INC
CONSOLIDATED BALANCE SHEET
(unaudited, in thousands)

	March 31, 2003			December 31, 2002

ASSETS
Cash and cash equivalents:
Cash on-hand	$	1,033		$	1,205
Non-interest bearing deposits		2,725			3,340
Interest-bearing deposits		13,445			30,869

Total cash and cash equivalents		17,203			35,414
Fed funds sold		17,550			10,750
Investment securities-available for sale, at fair value (cost of $305,016 and $305,538, respectively)		308,250			309,108
Mortgage-backed securities available-for-sale- at fair value (cost of $217,535 and $157,475, respectively)		217,824			158,637
Loans - Net of allowance for loan losses of $925		297,509			333,672
Properties and equipment, net		3,140			3,209
Federal Home Loan Bank stock, at cost		12,293			11,752
Bank owned life insurance		22,352			22,096
Other assets		9,620			8,247

Total Assets	$	905,741		$	892,885

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Passbook, club and other accounts	$	159,136		$	131,497
Money market and NOW accounts		72,916			73,628
Certificate accounts		366,887			381,561

Total deposits		598,939			586,686
Borrowings		220,500			221,750
Advances by borrowers for taxes and insurance		6,848			6,995
Other liabilities		5,257			3,748

Total liabilities		831,544			819,179

Stockholders’ equity:
Preferred Stock, ($0.01 par value, 2,000,000 shares authorized; no shares issued or outstanding)		—			—
Common Stock, ($0.01 par value, 20,000,000 shares authorized: 8,596,250 issued; 4,535,714 outstanding; one stock right per share)		86			86
Additional paid in capital		63,310			63,184
Retained earnings		80,308			79,196
Unearned ESOP shares (419,240 and 426,479 shares, respectively)		(2,966	)		(3,017	)
Unearned MRP (180,845 shares)		(2,521	)		(2,521	)
Treasury stock (4,060,536 shares)		(66,346	)		(66,346	)
Accumulated other comprehensive income, net of taxes		2,326			3,124

Total Stockholders’ Equity		74,197			73,706
Total Liabilities and Stockholders’ Equity	$	905,741		$	892,885

See notes to unaudited consolidated financial statements

FIRST BELL BANCORP, INC.
CONSOLDATED STATEMENT OF INCOME
(unaudited, in thousands except per share amounts)

	THREE MONTHS ENDED

	MARCH 31, 2003			MARCH 31, 2002

Conventional mortgage loans	$	5,325		$	7,504
Interest-bearing deposits		107			151
Mortgage-backed securities		1,713			599
Federal funds sold		41			28
Investment securities - taxable		795			902
Investment securities - exempt from federal income tax		2,181			2,043
Federal Home Loan Bank stock		98			116

Total interest income		10,260			11,343
Interest expense on deposits		4,456			5,519
Interest expense on borrowings		3,084			3,022

Total interest expense		7,540			8,541

Net interest income		2,720			2,802
Provision for loan losses		—			—

Net interest income after provision for loan losses		2,720			2,802
Other income:
Loan fees and service charges		355			301
Gain on sale of investments, net		2			—
Other income		257			262

Total other income		614			563
General and administrative expenses:
Compensation, payroll taxes and fringe benefits		924			585
Office occupancy expense, excluding depreciation		162			146
Depreciation		77			76
Computer services		87			82
Other expenses		374			329

Total general and administrative expenses		1,624			1,218

Net income before taxes		1,710			2,147
Provision for income taxes:
Current:
Federal		299			1,171
State		81			107
Deferred credit		(462	)		(1,106	)

Total provision for income taxes		(82	)		172
Net income	$	1,792		$	1,975

Basic earnings per share	$	0.46		$	0.48
Diluted earnings per share	$	0.43		$	0.47
Weighted average shares outstanding-Basic		3,931			4,122
Weighted average shares outstanding-Diluted		4,134			4,225

See notes to unaudited consolidated financial statements

FIRST BELL BANCORP, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited, in thousands)

	Three Months Ended

	March 31, 2003			March 31, 2002

Net income	$	1,792		$	1,975
Unrealized gains/(losses) on securities:
Unrealized holding gains (losses) arising during the period		(1,210	)		870
Less: reclassification adjustment for gains realized in net income		(2	)		—

Other comprehensive income, before taxes		(1,208	)		870
Tax expense		410			(431	)

Other comprehensive income, net of taxes	$	994		$	2,414

See notes to unaudited consolidated financial statements

FIRST BELL BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(unaudited, in thousands)

Number
Common
Stock
Shares

Common
Stock

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