U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
[ ] 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 0-22587
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SFB BANCORP, INC.
------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Tennessee 62-1683732
--------------------------------------------- ----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
632 East Elk Avenue, Elizabethton, Tennessee 37643
------------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 543-1000
--------------
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 No
---------- --------
As of October 25, 2001, there were 582,995 shares of the Registrant's common
stock, par value $0.10 per share, outstanding. The Registrant has no other
classes of common equity outstanding.
Transitional small business disclosure format:
Yes X No
---------- --------
1
SFB BANCORP, INC.
AND SUBSIDIARY
Elizabethton, Tennessee
Index
PART I. Page(s)
------- -------
FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Balance Sheets-(Unaudited) as of December 31, 2000 and September 30, 2001..................................3
Consolidated Statements of Comprehensive Income - (Unaudited) for the three and nine month
periods ended September 30, 2000 and 2001...............................................................................4
Consolidated Statements of Stockholders' Equity - (Unaudited)...........................................................5
Consolidated Statements of Cash Flows - (Unaudited) for the nine months
ended September 30, 2000 and 2001.....................................................................................6
Notes to (Unaudited) Consolidated Financial Statements................................................................7-8
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................................................................9-13
PART II.
--------
OTHER INFORMATION
Item 1. Legal Proceedings.............................................................................................14
Item 2. Changes in Securities.........................................................................................14
Item 3. Defaults Upon Senior Securities...............................................................................14
Item 4. Submission of Matters to a Vote of Security Holders...........................................................14
Item 5. Other Information.............................................................................................14
Item 6. Exhibits and Reports on Form 8-K..............................................................................14
Signatures ............................................................................................................15
2
SFB BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
December 31, September 30,
------------- -------------
Assets 2000 2001
------ ---- ----
Cash on hand $ 581 $ 715
Interest earning deposits 1,540 6,013
Investment securities:
Held to maturity (market value of $841
in 2000 and $729 in 2001) 870 749
Available for sale 1,621 -
Loans receivable, net 46,814 46,075
Mortgage-backed securities:
Available for sale 1,659 1,485
Premises and equipment, net 957 958
Federal Home Loan Bank stock, at cost 524 552
Accrued interest receivable 355 264
Other assets 47 99
--------- ---------
Total assets $ 54,968 $ 56,910
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Deposits $ 42,252 $ 44,340
Federal Home Loan Bank advances 1,000 -
Advance payments by borrowers for taxes and insurance 222 527
Accrued expenses and other liabilities 128 186
Income taxes:
Current 18 79
Deferred 129 161
--------- ---------
Total liabilities 43,749 45,293
--------- ---------
Stockholders' equity:
Preferred stock ($.10 par value, 1,000,000 shares authorized;
none outstanding) - -
Common stock ($.10 par value, 4,000,000 shares authorized;
767,000 shares issue 588,595 and 582,995 outstanding at
December 31, 2000 and September 30, 2001, respectively) 77 77
Paid-in capital 7,392 7,404
Retained earnings, substantially restricted 6,539 6,825
Treasury stock at cost (178,405 shares at December 31, 2000
and 184,005 at September 30, 2001) (2,245) (2,315)
Accumulated other comprehensive income (57) (9)
Unearned compensation:
Employee stock ownership plan (348) (296)
Restricted stock plan (139) (69)
--------- ---------
Total stockholders' equity 11,219 11,617
--------- ---------
Total liabilities and stockholders' equity $ 54,968 $ 56,910
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
3
SFB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands, except per share data)
For Three Months Ended For Nine Months Ended
September 30, September 30,
------------------------------ -------------------------------
2000 2001 2000 2001
---- ---- ---- ----
Interest income:
Loans $ 946 $ 965 $ 2,726 $ 2,879
Mortgage-backed securities 27 20 83 68
Investments 49 19 148 83
Interest earning deposits 8 45 20 107
------------ ----------- ------------ ------------
Total interest income 1,030 1,049 2,977 3,137
------------ ----------- ------------ ------------
Interest expense:
Deposits 529 540 1,473 1,683
FHLB Advances 4 - 19 1
------------ ----------- ------------ ------------
Total interest expense 533 540 1,492 1,684
------------ ----------- ------------ ------------
Net interest income 497 509 1,485 1,453
Provision for loan losses 9 9 27 27
------------ ----------- ------------ ------------
Net interest income after provision
for loan losses 488 500 1,458 1,426
Non-interest income:
Loan fees and service charges 42 51 136 147
Other 7 1 13 7
------------ ----------- ------------ ------------
Total non-interest income 49 52 149 154
------------ ----------- ------------ ------------
Non-interest expenses:
Compensation 183 177 519 515
Employee benefits 31 33 95 98
Net occupancy expense 29 37 94 99
Deposit insurance premiums 2 2 6 6
Data processing 31 32 91 98
Other 69 72 203 211
------------ ----------- ------------ ------------
Total non-interest expenses 345 353 1,008 1,027
------------ ----------- ------------ ------------
Income before income taxes 192 199 599 553
Income tax expense 71 76 221 212
------------ ----------- ------------ ------------
Net income 121 123 378 341
Other comprehensive income (loss) 10 30 (11) 48
------------ ----------- ------------- ------------
Comprehensive income $ 131 $ 153 $ 367 $ 389
============ =========== ============ ============
Earnings per share
Basic $ .22 $ .22 $ .65 $ .62
Diluted $ .22 $ .22 $ .65 $ .62
The accompanying notes are an integral part
of these consolidated financial statements.
4
SFB BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
(in thousands, except share data)
Accumulated
Other
Compre- Unearned Compensation
Common Paid-In Retained Treasury hensive ---------------------
Stock Capital Earnings Stock Income for ESOP for RSP Total
----- ------- -------- ----- ------ -------- ------- -----
Balance at December 31, 1999 $ 77 $ 7,382 $ 6,165 $ (1,208) $ (45) $ (419) $ (236) $ 11,716
Net income - - 485 - - - - 485
Other comprehensive income - - - - (12) - - (12)
Cash dividends declared ($.20 a share) - - (111) - - - - (111)
Treasury stock purchased (90,822 shares) - - - (1,037) - - - (1,037)
Compensation earned - 10 - - - 71 97 178
--------- --------- --------- --------- ------ --------- -------- --------
Balance at December 31, 2000 77 7,392 6,539 (2,245) (57) (348) (139) 11,219
Net income - - 341 - - - - 341
Other comprehensive income - - - - 48 - - 48
Cash dividends declared ($.10 a share) - - (55) - - - - (55)
Treasury stock purchased (5,600 shares) - - - (70) - - - (70)
Compensation earned - 12 - - - 52 70 134
--------- --------- --------- --------- ------ --------- -------- --------
Balance at September 30, 2001 $ 77 $ 7,404 $ 6,825 $ (2,315) $ (9) $ (296) (69) $ 11,617
========= ========= ========= ========= ====== ========= ======== ========
The accompanying notes are an integral part
of these consolidated financial statements.
5
SFB BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
------------------
2000 2001
------- -------
Operating activities:
Net income $ 378 $ 341
Adjustments to reconcile net income to net cash provided by
Operating activities:
Depreciation 69 71
Provision for loan losses 27 27
Increase (decrease) in reserve for uncollected interest (1) -
Net increase (decrease) in deferred loan fees (15) (19)
Accretion of discounts on investment securities, net (19) (20)
Amortization of premiums on mortgage-backed securities 7 4
Amortization of unearned compensation 134 134
FHLB stock dividends (27) (28)
(Increase) decrease in other assets 53 (52)
(Increase) decrease in accrued interest receivable (43) 91
Increase (decrease) in accrued expenses and other liabilities 50 58
Increase (decrease) in current income taxes 39 61
------- -------
Net cash provided by operating activities 652 668
------- -------
Investing activities:
Maturities of investment securities held to maturity 136 140
Purchase of investment securities available for sale - (700)
Maturities of investment securities available for sale - 2,325
Principal payments on mortgage-backed securities
Available for sale 400 248
Net increase (decrease) in loans (2,225) 730
Purchase of premises and equipment (27) (72)
------- -------
Net cash (used) provided by investing activities (1,716) 2,671
------- -------
Financing activities:
Net increase (decrease) in deposits 1,478 2,088
Repayment of FHLB Advances (500) (1,000)
Increase in advance payments by borrowers for taxes
and insurance 358 305
Treasury stock purchased (1,013) (70)
Payment of cash dividend (56) (55)
------- -------
Net cash provided by financing activities 267 1,268
------- -------
(Decrease) increase in cash and cash equivalents (797) 4,607
Cash and cash equivalents at beginning of period 2,162 2,121
------- -------
Cash and cash equivalents at end of period $ 1,365 $ 6,728
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 1,486 $ 1,671
Income taxes 130 152
======= =======
Noncash transactions:
Unrealized gains (losses) on securities and mortgage-backed
securities available for sale, net of deferred taxes (11) 48
Loan charge off's 7 -
The accompanying notes are an integral part
of these consolidated financial statements.
6
SFB BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------
SFB BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(Tabular amounts in thousands)
1. Basis of Preparation
--------------------
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-QSB and therefore, do not
include all disclosures necessary for a complete presentation of the
consolidated balance sheets, consolidated statements of comprehensive
income, consolidated statements of stockholders' equity, and consolidated
statements of cash flows in conformity with U. S. generally accepted
accounting principles. However, all adjustments, which are, in the opinion
of management, necessary for the fair presentation of the interim financial
statements have been included. All such adjustments are of a normal
recurring nature. The statement of comprehensive income for the nine month
period ended September 30, 2001 is not necessarily indicative of the
results which may be expected for the entire year or any other future
interim period.
It is suggested that these consolidated financial statements be read in
conjunction with the audited consolidated financial statements and notes
thereto for the Company for the year ended December 31, 2000 which are
included in the Form 10-KSB by reference (file no. 0-22587).
2. Earnings Per Share
------------------
Basic earnings per common share ("EPS") for all periods presented is
computed by dividing net income by the weighted average number of common
share outstanding. Diluted earnings per common share is computed by
dividing net income available to common stockholders by the weighted
average number of common shares outstanding and dilutive potential common
shares, which include stock options. Dilutive potential common shares are
calculated using the treasury stock method. Options to purchase 73,630
shares of the Company's common stock were outstanding during the three and
nine months ending September 30, 2001, but were not included in the
computation of diluted EPS because their effect would be anti-dilutive.
7
SFB BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------
Three months ended,
-------------------------------------------------------
September 30, 2000 September 30, 2001
--------------------------- ---------------------------
Income Shares Income Shares
------ ------ ------ ------
Net Income $121 $123
BASIC EPS
Income available to common stockholders $121 556 $123 552
Per share amount $.22 $.22
Effect of Dilutive Securities $.00 $.00
DILUTED EPS
Income available to common stockholders $121 556 $123 552
Per share amount $.22 $.22
Nine months ended,
-------------------------------------------------------
September 30, 2000 September 30, 2001
--------------------------- ---------------------------
Income Shares Income Shares
------ ------ ------ ------
Net Income $378 $341
BASIC EPS
Income available to common stockholders $378 582 $341 552
Per share amount $.65 $.62
Effect of Dilutive Securities $.00 $.00
DILUTED EPS
Income available to common stockholders $378 582 $341 552
Per share amount $.65 $.62
3. Asset Quality
-------------
The following table provides information regarding the Bank's nonperforming
loans (i.e., loans which are contractually past due 90 days or more) at
December 31, 2000 and September 30, 2001, respectively. As of the dates
indicated, the Bank had no loans categorized as troubled debt restructuring
within the meaning of SFAS 15.
December 31, September 30,
2000 2001
---- ----
(Dollars in Thousands)
Nonaccrual loans $ 192 $ 246
Repossessed real estate - -
------- -------
Total nonperforming assets $ 192 $ 246
======= =======
Nonperforming loans to net loans 0.41% 0.53%
Nonperforming assets to total assets 0.35% 0.43%
8
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The Private Securities Litigation Reform Act of 1995 contains safe harbor
provisions regarding forward-looking statements. When used in this discussion,
the words "believes", "anticipates", "contemplates", "expects", and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest rates, risk associated with the effect of opening a new
branch, the ability to control costs and expenses, and general economic
conditions.
The following discussion and analysis is intended to assist in understanding the
financial condition and the results of operations of the Company. References to
the "Company" include SFB Bancorp, Inc. and/or the Bank as appropriate.
Comparison of Financial Condition
The Company's total assets increased by approximately $1.9 million, or 3.5% from
approximately $55.0 million at December 31, 2000, to $56.9 million at September
30, 2001. The increase in assets for 2001 was primarily due to an approximate
$4.6 million increase in cash and interest-earning assets, offset by a reduction
in loans outstanding of approximately $739,000 and other assets.
Total cash and interest-earning deposits increased approximately $4.6 million to
$6.7 million at September 30, 2001. The increase in cash and interest-earning
deposits resulted primarily from the $2.0 million increase in deposits and a
$1.6 million decrease in investment securities. As investment securities have
matured, these funds have not been re-invested in other securities. The Company
anticipates utilizing this increase in the cash and interest-earning deposit
balances to fund future loan demand.
Total liabilities increased by approximately $1.5 million from $43.7 million at
December 31, 2000, to $45.0 million at September 30, 2001. The increase in
liabilities at September 30, 2001 was primarily the result of a $2.0 million
increase in deposits, offset by a reduction in other liabilities. The $2.0
million increase in deposits was primarily comprised of certificate of deposits
Comparison of Results of Operations for the Three and Nine Months Ending
September 30, 2000 and 2001
Net Income. Net income for the three months ending September 30, 2001 increased
$2,000, or 1.7%, from $121,000 in 2000, to $123,000 in 2001. Net income
decreased $37,000, or 9.8%, to $341,000 for the nine months ending September 30,
2001, from $378,000 in 2000. The decline in net income for the nine months
ending September 30, 2001, as compared to the same period in
9
2000, was primarily the result of a decline in net interest income and an
increase in non-interest expenses. For the current nine month period ended
September 30, 2001, net interest income continued to be affected by the higher
short-term interest rates paid on certificates of deposits during 2000.
Net Interest Income. Net interest income increased $12,000, from approximately
$497,000 for the three months ending September 30, 2000, to $509,000 for the
three months ending September 30, 2001. Net interest income decreased $32,000
for the nine months ending September 30, 2001. The increase in net interest
income for the three months ending September 30, 2001, as compared to the same
period in 2000, primarily reflects an increase in average interest-earning
assets over average interest-bearing liabilities of approximately $233,000,
offset by a 7 basis point decrease in the interest rate spread. The interest
rate spread for the period decreased to 2.77%. The net interest margin decreased
15 basis points to 3.69% for the three months ending September 30, 2001, from
3.84% for the three months ending September 30, 2000. The overall decrease in
net interest income for the nine months ending September 30, 2001, primarily
reflects a 30 basis point decrease in the interest rate spread from 2.92% for
the nine months ending September 30, 2000, to 2.62% in 2001. The net interest
margin decreased 31 basis points to 3.57% for the nine months ending September
30, 2001, from 3.88% for the nine months ending September 30, 2000.
Interest Income. Interest income increased $19,000 for the three months ending
September 30, 2001. The increase was attributable to a increase in average
interest-earning assets of approximately $3.4 million from $51.7 million at
September 30, 2000, to $55.1 million at September 30, 2001, offset by a decrease
in the average yield on interest-earning assets of 35 basis points, from 7.97%
for the three months ending September 30, 2000, to 7.62% for the same period in
2001. Interest income increased $160,000 for the nine months ending September
30, 2001. The increase was attributable to a increase in average
interest-earning assets of approximately $3.3 million, from $51.0 million at
September 30, 2000, to $54.3 million at September 30, 2001, offset by a decrease
in the average yield on interest-earning assets of 8 basis points, from 7.78%
for the nine months ending September 30, 2000, to 7.70% for the same period in
2001.
Interest on loans increased $19,000 for the three months ending September 30,
2001 and $153,000 for the nine months ending September 30, 2001, as compared to
the same periods in 2000. The increase for the three months ending September 30,
2001 primarily reflects a $685,000 increase in average loans outstanding, and a
increase in the average yield on average loans outstanding of 5 basis points,
from 8.25% for the three months ending September 30, 2000, to 8.30% for the same
period in 2001. The increase for the nine months ending September 30, 2001
primarily reflects a $1.8 million increase in average loans outstanding, and a
increase in the average yield on average loans outstanding of 13 basis points,
from 8.06% for the nine months ending September 30, 2000, to 8.19% for the same
period in 2001.
Interest on investment securities decreased $30,000 for the three months ending
September 30, 2001 and decreased $65,000 for the nine months ending September
30, 2001, as compared to the same periods in 2000. The decreases are the result
of the reduction in funds invested in securities. Investments for the three
months ending September 30, 2001 reflected a decrease of approximately $2.3
million in the average investment balance as compared to 2000. The average yield
on these investments also decreased 35 basis points, from 5.28% in 2000, to
4.93% in 2001. Investments for
10
the nine months ending September 30, 2001 reflected a decrease of approximately
$1.8 million in the average investment balance as compared to 2000. The average
yield on investments for the nine months ending September 30, 2001 was 5.64%,
compared to 5.28% in 2000.
Interest on interest-earning deposits increased $37,000 for the three months
ending September 30, 2001 and $87,000 for the nine months ending September 30,
2001, as compared to the same periods in 2000. These increases in interest on
interest-earning deposits for three and nine months ending September 30, 2001,
compared to 2000, primarily reflect an increase of approximately $5.2 million
and $3.6 million, respectively, in the average balance of interest-earning
deposits.
Interest on mortgage-backed securities decreased $7,000 for the three months
ending September 30, 2001 and $15,000 for the nine months ending September 30,
2001, as compared to the same periods in 2000, as the portfolio continued to pay
down principal and those funds were invested in other earning assets.
Interest Expense. Interest expense increased $7,000, from $533,000 for the three
months ending September 30, 2000, to $540,000 for the three months ending
September 30, 2001. Interest expense increased $192,000, from approximately $1.5
million for the nine months ending September 30, 2000, to $1.7 million for the
nine months ending September 30, 2001. The increase for the three months ending
September 30, 2001, as compared to the three months in 2000, was primarily the
result of an increase of approximately $3.2 million in the average balance of
interest-bearing liabilities, offset by a 29 basis point decrease in the average
cost of funds. The increase for the nine months ending September 30, 2001, was
primarily the result of a 22 basis point increase in the average cost of funds,
combined with an approximate $3.3 million increase in the average balance of
interest-bearing liabilities for the nine months ending September 30, 2001,
compared to 2000. Interest rates on certificate of deposits began to reprice at
lower rates during three months ending September 20, 2001, as compared to the
same period in 2000. The average rate paid on certificate of deposits decreased
22 basis points to 5.66% during the three months ending September 30, 2001,
compared to 2000. The average rate paid on certificate of deposits increased 31
basis points to 5.87% during the nine months ending September 30, 2001, compared
to 2000. The cost of funds for certificates of deposit are affected by the
interest rate environment at the time those certificate accounts are opened or
reprice.
Provision for Loan Losses. The provision for loan losses was $9,000 for the
three months ending September 30, 2001 and 2000, respectively. The provision for
loan losses was $27,000 for the nine months ending September 30, 2001 and 2000,
respectively. The Company's management routinely performs an analysis to
quantify the inherent risk of loss in its portfolio. At September 30, 2001, the
ratio of the allowance for loan loss was at a level deemed adequate by
management to provide for losses in the loan portfolio. The ratio of allowance
for loan loss to non-performing loans at September 30, 2001, was 151%, and
nonperforming assets represented 0.43% of total consolidated assets.
Nonperforming assets were $246,000 at September 30, 2001, compared to $192,000
at December 31, 2000. Management is not aware of any trends or events inherent
to its loan portfolio that has not been provided for in its loan loss allowance.
There, however, can be no assurance that future losses will not exceed estimated
amounts or that additional provisions for loan losses will not be required in
future periods.
11
Non-Interest Income. Non-interest income continues to be an additional source of
income for the Company. The income is produced by certain fees on new loan
production and service fees on other products and services. Total non-interest
income amounted to $52,000 and $154,000 for the three and nine months ending
September 30, 2001, respectively.
Non-Interest Expense. For the three and nine month periods ending September 30,
2001, non-interest expense increased $8,000 and $19,000, respectively, as
compared to the same periods in 2000. For the nine months ending September 30,
2001, the increase was primarily the result of a combined increase in data
processing and other expenses. The increase in data processing expenses for the
nine months ending September 30, 2001, compared to 2000, was mainly attributable
to expenses associated with increased transaction volumes, data communications
expenses, and the new teller operating system. The increase in other expenses
for the nine months in 2001, compared to 2000, was mainly attributable to higher
general operating expenses and those expenses associated with being a public
company.
Income Taxes. Income tax expense for the three months ending September 30, 2000
was $71,000, compared to $76,000 for the same period in 2001. Income tax expense
for the nine months ending September 30, 2000 was $221,000 compared to $212,000
for the same period in 2001. The effective tax rate for both the three and nine
months in 2001 and 2000 was approximately 38%.
Liquidity and Capital Resources. The Company's primary sources of funds are new
deposits, proceeds from principal and interest payments on loans, and repayments
on mortgage-backed securities. While maturities and scheduled amortization of
loans are a predictable source of funds, deposit flows and mortgage prepayments
are greatly influenced by general interest rates, economic conditions and
competition. The Company's primary investing activity is loan originations. The
Company maintains liquidity levels adequate to fund loan commitments, investment
opportunities, deposit withdrawals and other financial commitments. Obligations
to fund outstanding loan commitments at September 30, 2001 were approximately
$382,000.
At September 30, 2001, management had no knowledge of any trends, events or
uncertainties that will have or are reasonably likely to have material effects
on the liquidity, capital resources or operations of the Company. Furthermore,
at September 30, 2001, management was not aware of any current recommendations
by the regulatory authorities that, if implemented, would have a material
effect.
12
The Bank exceeded all of its capital requirements at September 30, 2001. The
Bank had the following capital ratios at September 30, 2001:
For Capital Categorized as
Actual Adequacy Purposes "Well Capitalized"(1)
------------------------ ----------------------- ------------------------
Amount Ratio Amount Ratio Amount Ratio
------------ ----------- ----------- ----------- ------------ -----------
As of September 30, 2001:
Total Capital
(to risk weighted assets) $ 10,809 31.5% $ 2,745 8.0% $ 3,431 10.0%
Tier I Capital
(to risk weighted assets) $ 10,437 30.4% $ 1,372 4.0% $ 2,059 6.0%
Tier I Capital
(to total assets) $ 10,437 18.6% $ 1,682 3.0% $ 2,804 5.0%
Tangible Capital
(to total assets) $ 10,437 18.6% $ 841 1.50% $ 2,804 5.0%
(1) As categorized under the Prompt Corrective Action Provisions.
13
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company and its subsidiaries may be a party
to various legal proceedings incident to its or their business. At
September 30, 2001, there were no legal proceedings to which the
Company or any subsidiary was a party, or to which of any of their
property was subject, which were expected by management to result in
a material loss.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
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
--------------------------------
(a) 3(i) Charter of SFB Bancorp, Inc.*
3(ii) Bylaws of SFB Bancorp, Inc. *
4 Specimen Stock Certificate *
10 Employment Agreement with Peter W. Hampton *
10.1 SFB Bancorp, Inc. 1998 Stock Option Plan * *
10.2 Security Federal Bank Restricted Stock Plan * *
* Incorporated by reference to the Registration Statement on Form SB-2,
File No. 333-23505.
** Incorporated by reference to the proxy statement for the annual
meeting of stockholders on June 1, 1998, and filed with the SEC on
April 17, 1998 (File No. 0-22587).
(b) Reports on Form 8-K
None.
14
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.
SFB Bancorp, Inc.
Date: October 25, 2001 By /s/ Peter W. Hampton
---------------- ---------------------------------------
Peter W. Hampton
(President and Chief Executive Officer)
Date: October 25, 2001 By /s/ Bobby Hyatt
---------------- ---------------------------------------
Bobby Hyatt
(Vice President and Finance Officer)
15