UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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, 2004
or
| ¨ | 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 1-14671
WORONOCO BANCORP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 04-3444269 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 31 Court Street, Westfield, Massachusetts | 01085 | |
| (Address of principal executive offices) | (Zip Code) | |
(413) 568-9141
(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. 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 ¨
As of April 30, 2004, there were 3,683,427 shares of the Registrant’s Common Stock outstanding.
FORM 10-Q
INDEX
| Page | ||||
| PART I. FINANCIAL INFORMATION | ||||
| Item 1. |
||||
| Consolidated Balance Sheets at March 31, 2004 and December 31, 2003. |
1 | |||
| Consolidated Income Statements for the Three Months Ended March 31, 2004 and 2003 |
2 | |||
| 3 | ||||
| Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 |
4 | |||
| 5 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 | ||
| Item 3. |
25 | |||
| Item 4. |
25 | |||
| PART II: OTHER INFORMATION | ||||
| Item 1. |
26 | |||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
26 | ||
| Item 3. |
26 | |||
| Item 4. |
26 | |||
| Item 5. |
26 | |||
| Item 6. |
27 | |||
| 28 | ||||
Item 1. Financial Statements (unaudited)
WORONOCO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
| Unaudited March 31, 2004 |
December 31, 2003 |
|||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 18,050 | $ | 18,110 | ||||
| Interest-bearing deposits |
1,041 | 1,069 | ||||||
| Federal funds sold |
— | 7,115 | ||||||
| Cash and cash equivalents |
19,091 | 26,294 | ||||||
| Securities available for sale, at fair value |
225,612 | 233,376 | ||||||
| Federal Home Loan Bank stock, at cost |
15,774 | 15,373 | ||||||
| Loans, net of allowance for loan losses ($3,486 at March 31, 2004 and $3,280 at December 31, 2003) |
540,641 | 497,962 | ||||||
| Premises and equipment, net |
9,913 | 10,131 | ||||||
| Accrued interest receivable |
3,308 | 3,156 | ||||||
| Goodwill and other intangible assets, net |
1,823 | 1,835 | ||||||
| Cash surrender value of life insurance |
6,207 | 6,143 | ||||||
| Other assets |
3,089 | 1,782 | ||||||
| Total assets |
$ | 825,458 | $ | 796,052 | ||||
| Liabilities and Stockholders’ Equity |
||||||||
| Deposits |
$ | 412,553 | $ | 419,473 | ||||
| Mortgagors’ escrow accounts |
2,052 | 1,825 | ||||||
| Short-term borrowings |
41,001 | 42,466 | ||||||
| Long-term debt |
283,420 | 248,598 | ||||||
| Net deferred tax liability |
1,145 | 551 | ||||||
| Accrued expenses and other liabilities |
3,901 | 4,396 | ||||||
| Total liabilities |
744,072 | 717,309 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ Equity: |
||||||||
| Preferred stock ($.01 par value; 2,000,000 shares authorized; no shares issued and outstanding) |
— | — | ||||||
| Common stock ($.01 par value; 16,000,000 shares authorized; 5,998,860 shares issued; shares outstanding: 3,673,393 at March 31, 2004 and 3,631,974 at December 31, 2003) |
60 | 60 | ||||||
| Additional paid-in capital |
61,011 | 60,337 | ||||||
| Unearned compensation |
(2,858 | ) | (3,087 | ) | ||||
| Retained earnings |
48,970 | 48,365 | ||||||
| Accumulated other comprehensive income |
4,812 | 3,731 | ||||||
| Treasury stock, at cost (2,325,467 shares at March 31, 2004 and 2,366,886 shares at December 31, 2003) |
(30,609 | ) | (30,663 | ) | ||||
| Total stockholders’ equity |
81,386 | 78,743 | ||||||
| Total liabilities and stockholders’ equity |
$ | 825,458 | $ | 796,052 | ||||
See accompanying notes to unaudited consolidated financial statements
1
WORONOCO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(In Thousands Except Per Share Amounts)
| Unaudited Three Months Ended March 31, |
|||||||
| 2004 |
2003 |
||||||
| Interest and dividend income: |
|||||||
| Loans, including fees |
$ | 6,993 | $ | 7,368 | |||
| Interest and dividends on securities: |
|||||||
| Taxable interest |
1,987 | 1,704 | |||||
| Tax exempt interest |
247 | 247 | |||||
| Dividends |
514 | 513 | |||||
| Trading account securities |
— | 190 | |||||
| Federal funds sold |
4 | 13 | |||||
| Other |
1 | 2 | |||||
| Total interest and dividend income |
9,746 | 10,037 | |||||
| Interest expense: |
|||||||
| Deposits |
1,532 | 1,695 | |||||
| Borrowings |
3,052 | 3,053 | |||||
| Total interest expense |
4,584 | 4,748 | |||||
| Net interest and dividend income |
5,162 | 5,289 | |||||
| Provision for loan losses |
150 | — | |||||
| Net interest and dividend income, after provision for loan losses |
5,012 | 5,289 | |||||
| Non-interest income: |
|||||||
| Fee income |
1,040 | 755 | |||||
| Insurance commissions |
423 | 363 | |||||
| Gain on sales, disposition and impairment of securities available for sale, net |
— | 404 | |||||
| Net loss on trading account activities |
— | (564 | ) | ||||
| Gain on sales of loans, net |
80 | 403 | |||||
| Gain on sale of supermarket branch |
— | 183 | |||||
| Penalty for prepayment of FHLB advances |
— | (539 | ) | ||||
| Gain on derivative instruments and hedging activities |
— | 5 | |||||
| Other income |
70 | 6 | |||||
| Total non-interest income |
1,613 | 1,016 | |||||
| Non-interest expenses: |
|||||||
| Salaries and employee benefits |
2,784 | 2,475 | |||||
| Occupancy and equipment |
545 | 553 | |||||
| Marketing |
80 | 153 | |||||
| Professional services |
271 | 391 | |||||
| Data processing |
270 | 257 | |||||
| Other general and administrative |
634 | 701 | |||||
| Total non-interest expenses |
4,584 | 4,530 | |||||
| Income before income taxes |
2,041 | 1,775 | |||||
| Provision for income taxes |
608 | 493 | |||||
| Net income |
$ | 1,433 | $ | 1,282 | |||
| Earnings per share: |
|||||||
| Basic |
$ | 0.42 | $ | 0.39 | |||
| Diluted |
$ | 0.40 | $ | 0.37 | |||
| Weighted average shares outstanding: |
|||||||
| Basic |
3,390,398 | 3,282,989 | |||||
| Diluted |
3,611,181 | 3,494,120 | |||||
See accompanying notes to unaudited consolidated financial statements
2
WORONOCO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Three Months Ended March 31, 2004 and 2003
(Dollars In Thousands)
(Unaudited)
| Common Stock |
Additional Paid-in Capital |
Unearned Compensation |
Retained Earnings |
Accumulated Other Comprehensive Income |
Treasury Stock |
Total |
||||||||||||||||||||
| Balance at December 31, 2003 |
$ | 60 | $ | 60,337 | $ | (3,087 | ) | $ | 48,365 | $ | 3,731 | $ | (30,663 | ) | $ | 78,743 | ||||||||||
| Comprehensive income: |
||||||||||||||||||||||||||
| Net income |
— | — | — | 1,433 | — | — | 1,433 | |||||||||||||||||||
| Change in net unrealized gain on securities available for sale |
— | — | — | — | 1,058 | — | 1,058 | |||||||||||||||||||
| Net gain on derivative instruments |
— | — | — | — | 23 | — | 23 | |||||||||||||||||||
| Total comprehensive income |
2,514 | |||||||||||||||||||||||||
| Decrease in unearned compensation |
— | 277 | 229 | — | — | — | 506 | |||||||||||||||||||
| Adjustment for tax benefit related to vesting of stock awards and stock option exercises |
— | 331 | — | — | — | — | 331 | |||||||||||||||||||
| Reissuance of treasury shares in connection with stock option exercises (62,981 shares) |
— | 66 | — | (183 | ) | — | 819 | 702 | ||||||||||||||||||
| Cash dividends paid ($0.19 per share) |
— | — | — | (645 | ) | — | — | (645 | ) | |||||||||||||||||
| Treasury stock purchased (21,562 shares) |
— | — | — | — | — | (765 | ) | (765 | ) | |||||||||||||||||
| Balance at March 31, 2004 |
$ | 60 | $ | 61,011 | $ | (2,858 | ) | |||||||||||||||||||