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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 June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 000-23667
HOPFED BANCORP, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 61-1322555
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 Fort Campbell Boulevard, Hopkinsville, Kentucky 42240
- ---------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (270) 885-1171
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 ninety days.
Yes X No ___
As of August 8, 2002, 3,630,396 shares of Common Stock were issued and
outstanding.
CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of June 30, 2002
and December 31, 2001................................................................ 2
Consolidated Statements of Income for the Three-Month and Six-Month
Periods Ended June 30, 2002 and 2001................................................. 3
Consolidated Statements of Comprehensive Income for the Three-Month
and Six-Month Periods Ended June 30, 2002 and 2001................................... 4
Consolidated Statements of Cash Flows for the Six-Month
Periods Ended June 30, 2002 and 2001................................................. 5
Notes to Unaudited Condensed Financial Statements..................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................................. 8
Item 3. Quantitative and Qualitative Disclosures About
Market Risk.......................................................................... 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders................................... 13
Item 6. Exhibits and Reports on Form 8-K...................................................... 14
SIGNATURES..................................................................................... 14
1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HOPFED BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31,
2002 2001
------------ ------------
(Unaudited)
(In thousands)
ASSETS
Cash and due from banks............................... $ 4,387 $ 3,941
Interest-earning deposits in Federal Home
Loan Bank ("FHLB")................................... 31 39
Federal funds sold.................................... 1,270 690
Securities available for sale......................... 78,388 100,519
Securities held to maturity, market value of
$3,829 and $4,822 at June 30, 2002 and
December 31, 2001, respectively...................... 3,679 4,462
Loans receivable, net of allowance for loan
losses of $1,068 at June 30, 2002, and $923
at December 31, 2001................................. 208,799 170,016
Loans held for sale.................................. -- 928
Accrued interest receivable........................... 1,706 1,405
Premises and equipment, net........................... 3,374 3,315
Deferred tax asset.................................... 170 82
Other assets.......................................... 514 242
------------ ------------
Total assets................................. $ 302,318 $ 285,639
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits........................................... $ 220,384 $ 200,316
Advances from borrowers for taxes and insurance.... 326 201
Advances from FHLB................................. 33,714 38,747
Dividends payable ................................. 396 399
Accrued expenses and other liabilities............. 2,516 2,387
------------ ------------
Total liabilities............................ 257,336 242,050
------------ ------------
Stockholders' Equity:
Common stock....................................... 40 40
Additional paid in capital......................... 25,714 25,714
Retained earnings, substantially restricted........ 23,673 22,110
Treasury stock (at cost, 408,909 shares at
June 30, 2002 and 407,767 shares at
December 31, 2001................................. (4,857) (4,845)
Accumulated other comprehensive income
net of taxes...................................... 412 570
------------ ------------
Total stockholders' equity................... 44,982 43,589
------------ ------------
Total liabilities and stockholders' equity... $ 302,318 $ 285,639
============ ============
The balance sheet at December 31, 2001 has been derived from the audited
financial statements of that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying Notes to Unaudited Condensed Financial Statements.
-2-
HOPFED BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------------------- -----------------------------------
2002 2001 2002 2001
----------------- ----------------- --------------- ---------------
(Dollars in thousands, except per share data)
Interest income:
Interest on loans...................... $ 3,412 $ 2,810 $ 6,611 $ 5,470
Interest and dividends on investments.. 1,249 1,400 2,619 2,899
Time deposit interest income........... 18 170 36 313
----------------- ----------------- --------------- ---------------
Total interest income............. 4,679 4,380 9,266 8,682
----------------- ----------------- --------------- ---------------
Interest expense:
Interest on deposits................... 1,663 2,267 3,326 4,413
Interest on advances................... 338 206 724 420
----------------- ----------------- --------------- ---------------
Total interest expense............ 2,001 2,473 4,050 4,833
----------------- ----------------- --------------- ---------------
Net interest income......................... 2,678 1,907 5,216 3,849
Provision for loan losses................... 90 42 180 102
----------------- ----------------- --------------- ---------------
Net interest income after provision
for loan losses............................ 2,588 1,865 5,036 3,747
----------------- ----------------- --------------- ---------------
Non-interest income:
Loan and other service fees............ 250 176 475 256
Gain on sale of AFS securities......... 143 -- 345 --
Other, net............................. 9 4 18 22
----------------- ----------------- --------------- ---------------
Total non-interest income......... 402 180 838 278
----------------- ----------------- --------------- ---------------
Non-interest expenses:
Salaries and benefits.................. 527 490 1,049 1,050
Federal insurance premium.............. 8 15 17 23
Occupancy expense, net................. 158 24 305 82
Data processing........................ 85 47 176 92
Other operating expenses............... 363 441 730 704
----------------- ----------------- --------------- ---------------
Total non-interest expenses....... 1,141 1,017 2,277 1,951
----------------- ----------------- --------------- ---------------
Income before income taxes.................. 1,849 1,028 3,597 2,074
Income tax expense.......................... 624 367 1,239 744
----------------- ----------------- --------------- ---------------
Net income ................................. 1,225 661 2,358 1,330
================= ================= =============== ===============
Basic net income per share.................. $ 0.34 $ .17 $ 0.65 $ .35
Diluted net income per share............... $ 0.34 $ .17 $ 0.65 $ .35
Dividends per share......................... $ 0.11 $ .11 $ 0.22 $ .22
================= ================= =============== ===============
Weighted average shares outstanding......... 3,630,396 3,806,893 3,630,941 3,831,921
================= ================= =============== ===============
Weighted average shares outstanding, diluted 3,636,979 3,806,893 3,635,605 3,831,921
================= ================= =============== ===============
See accompanying Notes to Unaudited Condensed Financial Statements.
-3-
HOPFED BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
---------------------------- ------------------------------
2002 2001 2002 2001
------------- ---------- -------------- -----------
(In thousands)
$ 1,225 $ 661 $ 2,358 $ 1,330
Net income
Other comprehensive income, net of tax Unrealized
holding gains (losses) arising during period net
of tax effect of ($187) and ($11) for the three
months ended June 30, 2002 and 2001, respectively,
and $81 and ($134) for the six months ended June
30, 2002 and 2001, respectively 362 20 (158) 261
Less: reclassification adjustment for gains
Included in net income (94) 0 (227) 0
------------- ---------- -------------- -----------
Comprehensive income $ 1,493 $ 681 $ 1,973 $ 1,591
============= ========== ============== ===========
See accompanying Notes to Unaudited Condensed Financial Statements
-4-
HOPFED BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
June 30,
------------------------------
2002 2001
------------- ------------
(In thousands)
Cash flows from operating activities:
Net cash provided by (used) in operating activities.. 2,431 (249)
------------- ------------
Cash flows from investing activities:
Proceeds from maturities of held-to-maturity
securities ......................................... 779 1,854
Proceeds from sale of available-for-sale securities.. 42,860 54,840
Purchases of available-for-sale securities........... (21,640) (46,205)
Net increase in loans................................ (37,576) (16,522)
Purchases of premises/equipment...................... (190) (285)
------------- ------------
Net cash used in investing activities................ (15,767) (6,318)
------------- ------------
Cash flows from financing activities:
Net increase in demand deposits...................... 6,430 1,471
Net increase (decrease) in time deposits............. 13,638 17,738
Advances from (payments to) FHLB.................... (5,032) 960
Increase in advance payments by
Borrowers for taxes and insurance................... 125 119
Net dividends paid................................... (795) (847)
Purchase of treasury stock........................... (12) (1,437)
------------- ------------
Net cash used in financing activities................ 14,354 18,004
------------- ------------
Increase in cash and cash equivalents..................... 1,018 11,437
Cash and cash equivalents, beginning of period............ 4,670 3,807
------------- ------------
Cash and cash equivalents, end of period.................. 5,688 15,244
============= ============
Supplemental disclosures of cash flow information.........
Cash paid for income taxes........................... $ 1,405 $ 315
============= ============
Cash paid for interest............................... $ 4,050 $ 4,405
============= ============
See accompanying Notes to Unaudited Condensed Financial Statements.
-5-
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
HopFed Bancorp, Inc. (the "Company") was formed at the direction of
Heritage Bank, formerly known as Hopkinsville Federal Bank (the "Bank") to
become the holding company of the Bank upon the conversion of the Bank from
a federally chartered mutual savings bank to a federally chartered stock
savings bank. The conversion was consummated on February 6, 1998. The
Company's primary asset is the outstanding capital stock of the converted
Bank, and its sole business is that of the converted Bank.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of
only normal recurring accruals) necessary for fair presentation have been
included. The results of operations and other data for the six month period
ended June 30, 2002 are not necessarily indicative of results that may be
expected for the entire fiscal year ending December 31, 2002.
The accompanying unaudited financial statements should be read in
conjunction with the Consolidated Financial Statements and the Notes
thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001. The accounting policies followed by the Company
are set forth in the Summary of Significant Accounting Policies in the
Company's December 31, 2001 Consolidated Financial Statements.
-6-
2. EARNINGS PER SHARE
The following schedule reconciles the numerators and denominators of the
basic and diluted earnings per share ("EPS") computations for the three and
six-months ending June 30, 2002. Diluted common shares arise from the
potentially dilutive effect of the Company's stock Options outstanding.
Quarters Ended June 30
-----------------------------
2002 2001
Basic EPS:
Net income $ 1,225,000 $ 661,000
Average common shares outstanding 3,630,396 3,806,893
------------ -------------
Earnings per share $ 0.34 $ 0.17
------------ -------------
Diluted EPS:
Net income $ 1,225,000 $ 661,000
Average common shares outstanding 3,630,396 3,806,893
Dilutive effect of stock options 6,583 --
------------ -------------
Average diluted shares outstanding 3,636,979 3,806,893
------------ -------------
Diluted earnings per share $ 0.34 $ 0.17
------------ -------------
Six Months Ended June 30
-----------------------------
2002 2001
Basic EPS:
Net income $ 2,358,000 $ 1,330,000
Average common shares outstanding 3,630,941 3,831,921
------------ -------------
Earnings per share $ 0.65 $ 0.35
------------ -------------
Diluted EPS:
Net income $ 2,358,000 $ 1,330,000
Average common shares outstanding 3,630,941 3,831,921
Dilutive effect of stock options 4,664 --
------------ -------------
Average diluted shares outstanding 3,635,605 3,831,921
------------ -------------
Diluted earnings per share $ 0.65 $ 0.35
------------ -------------
-7-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND DECEMBER 31, 2001
Total assets increased by $16.7 million, from $285.6 million at December
31, 2001 to $302.3 million at June 30, 2002. Securities available for sale
decreased from $100.5 million at December 31, 2001 to $78.4 million at June 30,
2002. Federal funds sold increased from $690,000 at December 31, 2001, to $1.3
million at June 30, 2002.
At June 30, 2002, investments classified as "held to maturity" were carried
at an amortized cost of $3.7 million and had an estimated fair market value of
$3.8 million, and securities classified as "available for sale" had an estimated
fair market value of $78.4 million.
The loan portfolio increased $38.8 million during the six months ended June
30, 2002. Net loans totaled $208.8 million and $170.0 million at June 30, 2002
and December 31, 2001, respectively. For the six months ended June 30, 2002, the
average yield on loans was 7.0%, compared to 7.69% for the year ended December
31, 2001.
The allowance for loan losses totaled $ 1.1 million at June 30, 2002, an
increase of $145,000 from the allowance of $923,000 December 31, 2001. The ratio
of the allowance for loan losses to loans was 0.51% at June 30, 2002 and 0.55%
at December 31, 2001. Also at June 30, 2002, non-performing loans were
$478,000, or 0.23% of total loans, compared to $551,000, or .34% of total loans,
at December 31, 2001, and the ratio of allowance for loan losses to
non-performing loans at June 30, 2002 and December 31, 2001 was 223.3% and
167.5%, respectively. The determination of the allowance for loan losses is
based on management's analysis, performed on a quarterly basis.
Various factors are considered in determining the necessary allowance for
loan losses, including the market value of the underlying collateral, growth and
composition of the loan portfolio, the relationship of the allowance for loan
losses to outstanding loans, historical loss experience, delinquency trends and
prevailing economic conditions. Although management believes the allowance for
loan losses is adequate, there can be no assurance that additional provisions
for loan losses will not be required or that losses on loans will not be
incurred. Minimal losses on loans have been incurred in prior years.
Real estate owned of $27,000 at June 30, 2002 represents one parcel of
residential property on which the Bank held a first mortgage and acquired the
property in a foreclosure sale initiated by the Bank. During the second quarter,
the Bank reduced the outstanding balance of this asset by $10,000.
At June 30, 2002, deposits increased to $220.4 million from $200.3 million
at December 31, 2001, a net increase of $20.1 million. The average cost of
deposits during the three and six month periods ended June 30, 2002 and the year
ended December 31, 2001 was 3.08%, 3.15% and 4.83%, respectively.
-8-
Management continually evaluates the investment alternatives available to
customers and adjusts the pricing on its deposit products to more actively
manage its funding cost while remaining competitive in its market area.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
Net Income. Net income for the six months ended June 30, 2002 was $2.4
million, compared to net income of $1.3 million for the six months ended June
30, 2001. The increase in net earnings for the six months resulted primarily
from a $783,000 reduction in interest expense and significant loan growth.
Net Interest Income. Net interest income for the six months ended June 30,
2002 was $5.2 million, compared to $3.8 million for the six months ended June
30, 2001. The increase in net interest income for the six months ended June 30,
2002 was primarily due to a reduction in interest expense and additional loans
outstanding. For the six months ended June 30, 2002, the Bank's average yield on
average interest-earning assets was 6.51%, compared to 7.49% for the six months
ended June 30, 2001, and its average cost of interest-bearing liabilities was
3.38% for the six months ended June 30, 2002, compared to 5.04% for the six
months ended June 30, 2001. As a result, the Bank's interest rate spread for the
six months ended June 30, 2002 was 3.13%, compared to 2.45% for the six months
ended June 30, 2001, and its net yield on interest-earning assets was 3.67% for
the six months ended June 30, 2002, compared to 3.34% for the six months ended
June 30, 2001.
Interest Income. Interest income increased by $600,000 from $8.7 million to
$9.3 million, or by 6.7%, during the six months ended June 30, 2002 compared to
the same period in 2001. This increase primarily resulted from increased loan
volume. The average balance of securities available for sale increased $7.3
million, from $80.2 million at June 30, 2001, to $87.5 million at June 30, 2002,
while the average balance of securities held to maturity declined $1.8 million,
from $6.9 million at June 30, 2001 to $4.1 million at June 30, 2002. In
addition, average time deposits and other interest-earning cash deposits
increased $4.1 million, from $150,000 at June 30, 2001 to $4.2 million at June
30, 2002. Overall, average total interest-earning assets for the six month
period ended June 30, 2002 are $284.7 million. The ratio of average
interest-earning assets to average interest-bearing liabilities declined from
120.8% for the six months ended June 30, 2001 to 119.0% for the six months ended
June 30, 2002.
Interest Expense. Interest expense declined by $783,000, or 16.2%, to $4.1
million for the six months ended June 30, 2002, compared to $4.8 million for the
same period in 2001. The decline was attributable to the repricing of
certificates of deposits to lower interest rates. The average cost of average
interest-bearing deposits decreased from 5.08% for the six months ended June 30,
2001 to 3.26% for the six months ended June 30, 2002. Over the same periods, the
average balance of deposits increased $37.5 million, from $173.8 million for the
six months ended June 30, 2001 to $211.3 million for the six months ended June
30, 2002, or 21.6%.
-9-
Provision for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the risk
inherent in the loan portfolio and the general economy. Such evaluation
considers numerous factors, including general economic conditions, loan
portfolio composition, prior loss experience, the estimated fair value of the
underlying collateral and other factors that warrant recognition in providing
for an adequate loan loss allowance. The Bank determined that an additional
$180,000 provision for loan losses was required for the six months ended June
30, 2002. In addition, the Bank determined to recognize an additional expense of
$10,000 to reduce the outstanding balance of one parcel of real estate owned.
Non-Interest Expenses. There was a $326,000 increase in total non-interest
expenses in the six months ended June 30, 2002 compared to the same period in
2001, due to several factors, including the opening of new offices in Benton and
Murray, Kentucky.
Income Taxes. The effective tax rate for the six months ended June 30, 2002
was 34%, compared to 35.9% for the same period in 2001.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2002
AND 2001
Net Income. Net income for the three months ended June 30, 2002 was $1.2
million compared to net income of $661,000 for the three months ended June 30,
2001. The increase in net income for the three months ended June 30, 2002 was
the result of several factors, including reduced interest expense, loan
portfolio growth, and growth in non-interest income.
Net Interest Income. Net interest income for the three months ended June
30, 2002 and June 30, 2001 was $2.7 million and $1.9 million, respectively. For
the three months ended June 30, 2002, the average yield on total
interest-earning assets was 6.51%, compared to 7.43% for the three months ended
June 30, 2001, and the average cost of interest-bearing liabilities was 3.34%
for the three months ended June 30, 2002, compared to 5.03% for the three months
ended June 30, 2001. As a result, the interest rate spread for the three months
ended June 30, 2002 was 3.17%, compared to 2.40% for the three months ended June
30, 2001, and the net yield on interest-earning assets was 3.72% for the three
months ended June 30, 2002, compared to 3.23% for the three months ended June
30, 2001.
Interest Income. Interest income increased by $299,000, from $4.4 million
to $4.7 million, or by 6.8%, during the three months ended June 30, 2002
compared to the same period in 2001. The average balance of securities available
for sale increased $3.3 million, from $78.1 million at June 30, 2001 to $81.4
million at June 30, 2002, while the average balance of securities held to
maturity declined $2.4 million, from $6.4 million at June 30, 2001 to $4.0
million at June 30, 2002. In addition, average time deposits and other
interest-earning cash deposits increased $3.9 million, from $126,000 at June 30,
2001 to $4.0 million at June 30, 2002. The average balance of loans receivable
at June 30, 2002 was $198.2 million, an increase of $48.4 million from the
average balance at June 30, 2001. Overall, average total interest-earning assets
for the quarter ended June 30, 2002 was $287.6 million. The ratio of average
interest-earning assets to average interest-bearing liabilities was 119.9% for
the three months periods ended June 30, 2001 and June 30, 2002.
-10-
Interest Expense. Interest expense declined $472,000, or 19.1%, to $2.0
million for the three months ended June 30, 2002, compared to $2.5 million for
the same period in 2001. The decline was attributable to lower interest rates.
The average cost of average interest-bearing deposits decreased from 5.07% at
June 30, 2001 to 3.23% at June 30, 2002. Over the same period, the average
balance of deposits increased $27.2 million, from $178.8 million at June 30,
2001 to $206.0 million at June 30, 2002, or 15.2%. The average balance of
advances from the FHLB was $33.8 million at June 30, 2002, compared to $18.0
million at June 30, 2001.
Provision for Loan Losses. The Bank determined that an additional $90,000
provision for loan losses was required for the three months ended June 30, 2002,
compared to an additional $42,000 provision for the three months ended June 30,
2001. The Bank incurred a provision for loss against non-earning assets in the
amount of $10,000 to reduce the outstanding balance of one parcel of real estate
owned.
Non-Interest Expenses. There was an approximate $124,000 increase in total
non-interest expenses in the three months ended June 30, 2002 compared to the
same period in 2001, primarily due to opening a new branch office in Benton,
Kentucky.
Income Taxes. The effective tax rate for the three months ended June 30,
2002 was 33.7%. The effective tax rate for the three month period ending June
30, 2001 was 35.7%. The decline in the effective tax rate is the result of the
Bank purchasing tax-exempt municipal bonds.
LIQUIDITY AND CAPITAL RESOURCES
The Company has no business other than that of the Bank. Management
believes that dividends that may be paid by the Bank to the Company will provide
sufficient funds for its initial operations and liquidity needs. However, no
assurance can be given that the Company will not have a need for additional
funds in the future. The Bank is subject to certain regulatory limitations with
respect to the payment of dividends to the Company.
The Bank's principal sources of funds for operations are deposits from its
primary market areas, principal and interest payments on loans, proceeds from
maturing investment securities and the net conversion proceeds received by it.
The principal uses of funds by the Bank include the origination of mortgage and
consumer loans and the purchase of investment securities.
The Bank is required by current federal regulations to maintain specified
liquid assets of at least 5% of its net withdrawable accounts plus short-term
borrowings. Short-term liquid assets (those maturing in one year or less) may
not be less than 1% of the Bank's liquidity base. At June 30, 2002, the Bank met
all regulatory liquidity requirements, and management believes that the
liquidity levels maintained are adequate to meet potential deposit outflows,
loan demand and normal operations.
The Bank must satisfy three capital standards: a ratio of core capital to
adjusted total assets of 4.0%, a tangible capital standard expressed as 1.5% of
total adjusted assets, and a combination of core and "supplementary" capital
equal to 8.0% of risk-weighted assets. At June 30, 2002, the Bank exceeded all
regulatory capital requirements. The table below presents certain information
relating to the Bank's capital compliance at June 30, 2002.
-11-
Amount Percent
-------- --------
(Dollars in thousands)
Tangible Capital.................... $ 41,644 13.85%
Core Capital........................ $ 41,638 13.85%
Risk-Based Capital.................. $ 43,307 23.69%
At June 30, 2002, the Bank had outstanding commitments to originate loans
totaling $21.8 million. Management believes that the Bank's sources of funds are
sufficient to fund all of its outstanding commitments. Certificates of deposits
which are scheduled to mature in one year or less from June 30, 2002 totaled
$77.0 million. Management believes that a significant percentage of such
deposits will remain with the Bank.
In March of 2002, the Bank announced a definitive agreement to purchase the
business assets and liabilities of Old National Bancorp located and assigned to
Fulton, Kentucky. These assets include Fall & Fall Insurance Agency and two
retail banking locations. The purchase of these assets is scheduled to close in
September 2002 and will result in the Bank acquiring approximately $95 million
dollars in deposits, $40 million dollars in loans, and more than $40 million
dollars in treasury securities with a final maturity of less than one month.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements.
Additional written or oral forward-looking statements may be made by the Company
from time to time in filings with the Securities and Exchange Commission or
otherwise. The words "believe," "expect," "seek," and "intend" and similar
expressions identify forward-looking statements, which speak only as of the date
the statement is made. Such forward-looking statements are within the meaning of
that term in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements may
include, but are not limited to, projections of income or loss, expenditures,
acquisitions, plans for future operations, financing needs or plans relating to
services of the Company, as well as assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Future events and actual
results could differ materially from those set forth in, contemplated by or
underlying the forward-looking statements.
The Company does not undertake, and specifically disclaims, any obligation
to publicly release the results of revisions which may be made to
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company monitors whether material changes in market risk have occurred
since year-end. The Company is unable to predict future changes in market rates
and their impact on the Company's profitability. The Company does not believe
that material changes in market risk exposures have occurred since December 31,
2001.
-12-
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 15, 2002, the Company held its Annual Meeting of Stockholders at
which the following matters were considered and voted on:
Proposal I - Election of Directors:
Nominees For Withheld
- -------- --------- --------
Boyd Clark 2,746,490 36,683
Dr. Harry Dempsey 2,736,683 46,490
Gilbert Lee 2,735,121 48,052
There were no abstentions or broker non-votes.
Proposal II - Ratification of Rayburn, Betts and Bates, P.C. CPA's as the Bank's
independent auditors.
For Against Abstain
2,757,954 18,721 6,488
There were no broker non-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
99.1 Certification of Financial Statements
-13-
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.
HOPFED BANCORP, INC.
Date: August 12, 2002 /s/ John E. Peck
-------------------------------------
John E. Peck
President and Chief Executive Officer
Date: August 12, 2002 /s/ Billy C. Duvall
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Billy C. Duvall
Vice President, Chief Financial
Officer and Treasurer
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