UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------------
FORM 10-Q
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the Quarterly Period Ended June 30, 2001.
or
[_] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the Transition Period From __________ to __________.
Commission File Number 1-13676
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KANKAKEE BANCORP, INC.
--------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-3846489
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
310 South Schuyler Avenue, 60901
Kankakee, Illinois
(Address of Principal Executive Offices) (Zip Code)
(815) 937-4440
(Registrant's telephone number, including area code)
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 _______
-------
As of August 8, 2001, there were 1,207,408 issued and outstanding shares of the
Issuer's common stock (exclusive of 542,592 shares of the Issuer's common stock
held as treasury stock).
KANKAKEE BANCORP, INC.
INDEX
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Page
Number
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial
Statements (Unaudited)
Statements of Financial Condition,
June 30, 2001 and December 31, 2000 1 - 2
Statements of Income and Comprehensive Income,
Three Months Ended June 30, 2001 and 2000 3
Statements of Income and Comprehensive Income,
Six Months Ended June 30, 2001 and 2000 4
Statements of Cash Flows, Six Months
Ended June 30, 2001 and 2000 5 - 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8 - 18
Item 3. Quantitative and Qualitative Disclosure
About Market Risk 9 - 10
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
June 30, December 31,
2001 2000
-------- ------------
Assets
Cash and due from banks $ 13,142,830 $ 18,707,762
Federal funds sold 3,082,981 1,329,776
Money market funds 4,167,880 5,109,735
------------ ------------
Cash and cash equivalents 20,393,691 25,147,273
------------ ------------
Certificates of deposit 50,000 50,000
Securities:
Investment securities:
Available-for-sale, at fair value 40,574,225 57,169,644
Held-to-maturity, at cost (fair value: June 30, 2001 -
$2,110,071; December 31, 2000 - $1,434,708) 2,104,897 1,447,846
------------ ------------
Total investment securities 42,679,122 58,617,490
------------ ------------
Mortgage-backed securities:
Available-for-sale, at fair value 13,709,705 16,050,792
Held-to-maturity, at cost (fair
value: June 30, 2001 -
$51,567; December 31, 2000 - $67,727) 50,906 66,867
------------ ------------
Total mortgage-backed securities 13,760,611 16,117,659
------------ ------------
Non-marketable equity securities 501,000 501,000
Loans, net of allowance for losses
on loans ($2,191,420 at
June 30, 2001; $2,156,420 at
December 31, 2000) 372,497,070 338,956,136
Loans held for sale 390,750 -
Real estate held for sale 564,700 484,320
Federal Home Loan Bank stock, at cost 2,368,400 2,112,000
Office properties and equipment 8,446,849 8,594,823
Accrued interest receivable 3,076,250 3,282,214
Prepaid expenses and other assets 1,436,733 1,225,070
Intangible assets 4,618,475 4,805,849
------------ ------------
Total assets $470,783,651 $459,893,834
============ ============
(Continued)
1
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (continued)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
June 30, December 31,
2001 2000
--------- ------------
Liabilities and stockholders' equity
Liabilities:
Deposits
Noninterest bearing $ 24,518,539 $ 25,357,749
Interest bearing 376,705,711 362,692,592
Short term borrowings - 14,000,000
Other borrowings 27,000,000 15,000,000
Advance payments by borrowers for taxes and insurance 2,021,453 1,813,412
Other liabilities 1,263,294 1,740,938
------------ ------------
Total liabilities 431,508,997 420,604,691
------------ ------------
Stockholders' equity
Preferred stock, $.01 par value; authorized, 500,000
shares; none outstanding - -
Common stock, $.01 par value; authorized, 3,500,000
shares; issued 1,750,000 17,500 17,500
Additional paid-in capital 15,308,401 15,328,249
Retained income, partially restricted 35,358,788 34,285,960
Treasury stock (545,092 shares at June 30, 2001;
486,892 shares at December 31, 2000) (11,863,866) (10,458,535)
Accumulated other comprehensive income 453,831 115,969
------------ ------------
Total stockholders' equity 39,274,654 39,289,143
------------ ------------
Total liabilities and stockholders' equity $470,783,651 $459,893,834
============ ============
See notes to consolidated financial statements (unaudited)
2
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
Three Months Ended June 30,
-----------------------------
2001 2000
------------ ------------
Interest income:
Loans $ 7,084,193 $ 5,806,430
Investment securities and other 918,042 1,180,595
Mortgage-backed securities 255,582 315,259
------------ ------------
Total interest income 8,257,817 7,302,284
------------ ------------
Interest expense:
Deposits 4,524,089 3,828,002
Borrowed funds 328,652 199,438
------------ ------------
Total interest expense 4,852,741 4,027,440
------------ ------------
Net interest income 3,405,076 3,274,844
Provision for losses on loans 40,000 -
------------ ------------
Net interest income after provision for losses on loans 3,365,076 3,274,844
Other income:
Net gain on sales of real estate held for sale 931 5,216
Net gain on sales of loan held for sale 40,080 1,702
Fee income 616,781 466,929
Insurance commissions 21,341 22,823
Other 110,289 96,511
------------ ------------
Total other income 789,422 593,181
------------ ------------
Other expenses:
Compensation and benefits 1,618,205 1,504,499
Occupancy 301,828 259,511
Furniture and equipment 164,960 174,811
Federal deposit insurance premiums 18,207 18,192
Advertising 105,211 66,309
Provision for losses on foreclosed assets 18,214 13,304
Data processing services 99,256 82,021
Telephone and postage 119,776 75,084
Amortization of intangible assets 93,687 94,617
Other general and administrative 512,420 415,371
------------ ------------
Total other expenses 3,051,764 2,703,719
------------ ------------
Income before income taxes 1,102,734 1,164,306
Income taxes 369,150 395,925
------------ ------------
Net income $ 733,584 $ 768,381
============ ============
Net income $ 733,584 $ 768,381
Other comprehensive income:
Unrealized gains (losses) on available-for-sale
securities, net of related income taxes (135,780) 142,659
------------ ------------
Comprehensive income (loss) $ 597,804 $ 911,040
============ ============
Basic earnings per share $0.61 $0.61
============ ============
Diluted earnings per share $0.60 $0.59
============ ============
See notes to consolidated financial statements (unaudited)
3
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
Six Months Ended June 30,
-----------------------------
2001 2000
----------- -----------
Interest income:
Loans $13,939,859 $11,079,148
Investment securities and other 1,975,286 2,495,134
Mortgage-backed securities 537,412 623,943
----------- -----------
Total interest income 16,452,557 14,198,225
----------- -----------
Interest expense:
Deposits 9,011,143 7,513,495
Borrowed funds 691,054 339,688
----------- -----------
Total interest expense 9,702,197 7,853,183
----------- -----------
Net interest income 6,750,360 6,345,042
Provision for losses on loans 55,000 -
----------- -----------
Net interest income after provision for losses on loans 6,695,360 6,345,042
Other income:
Net gain on sales of real estate held for sale 11,314 11,961
Net gain on sales of loans held for sale 40,080 3,294
Net gain on sales of property held for expansion - 11,552
Fee income 1,089,684 878,104
Insurance commissions 47,968 108,833
Other 197,941 180,739
----------- -----------
Total other income 1,386,987 1,194,483
----------- -----------
Other expenses:
Compensation and benefits 3,173,361 3,079,050
Occupancy 605,847 526,324
Furniture and equipment 348,981 351,097
Federal deposit insurance premiums 36,534 36,340
Advertising 173,729 144,320
Provision for losses on foreclosed assets 34,914 31,726
Data processing services 199,958 169,976
Telephone and postage 221,756 177,094
Amortization of intangible assets 187,374 189,234
Other general and administrative 1,048,856 918,277
----------- -----------
Total other expenses 6,031,310 5,623,438
----------- -----------
Income before income taxes 2,051,037 1,916,087
Income taxes 686,450 647,425
----------- -----------
Net income $ 1,364,587 $ 1,268,662
=========== ===========
Net income $ 1,364,587 $ 1,268,662
Other comprehensive income:
Unrealized gains (losses) on available-for-sale
securities, net of related income taxes 337,862 (98,508)
----------- -----------
Comprehensive income (loss) $ 1,702,449 $ 1,170,154
=========== ===========
Basic earnings per share $1.12 $1.01
=========== ===========
Diluted earnings per share $1.10 $0.98
=========== ===========
See notes to consolidated financial statements (unaudited)
4
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
Six Months Ended June 30,
-------------------------
2001 2000
------- --------
Cash flows from operating activities:
Net income $ 1,364,587 $ 1,268,662
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for losses on loans 55,000 -
Provisions for losses on real estate held for sale 34,914 31,726
Depreciation and amortization 656,998 644,514
Amortization of investment premiums and discounts, net (16,564) 4,652
Accretion of loan fees and discounts, net 2,020 19,279
Deferred income tax provision (benefit) 23,858 (41,838)
Originations of loans held for sale (5,598,265) (174,873)
Proceeds from sales of loans 5,247,595 178,167
Decrease (increase) in interest receivable 205,964 (98,559)
Decrease in interest payable on deposits (130,036) (23,152)
Net gain on sales of loans (40,080) (3,294)
Net gain on sales of real estate held for sale (11,314) (11,961)
Net income on sales of office related property - (11,553)
Federal Home Loan Bank of Chicago, stock dividend (79,100) -
Other, net (986,405) 184,128
------------ ------------
Net cash from operating activities 729,172 1,965,898
------------ ------------
Cash flows from investing activities
Investment securities
Available-for sale:
Purchases (6,041,387) (6,486,521)
Proceeds from calls and maturities 23,070,000 11,500,000
Held-to-maturity:
Purchases (660,404) (100,000)
Proceeds from maturities and paydowns 3,166 2,976
Mortgage-backed securities:
Available-for-sale:
Purchases (300,890) (1,962,724)
Proceeds from maturities and pay downs 2,737,439 1,794,958
Held-to-maturity:
Proceeds from maturities and pay downs 15,962 16,834
Proceeds from sales of real estate 58,484 130,263
Deferred loan fees and costs, net 134,661 70,318
Loans originated (97,779,454) (96,081,673)
Principal collected on loans 63,824,276 59,014,287
Purchases of office properties and equipment, net (322,350) (105,947)
------------ ------------
Net cash from investing activities (15,260,497) (32,207,229)
------------ ------------
See notes to consolidated financial statements (unaudited).
5
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (continued)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
Six Months Ended June 30,
----------------------------
2001 2000
------------ -----------
Cash flows from financing activities
Net increase in non-certificate of deposit accounts $ 9,053,886 $ 1,992,121
Net increase in certificate of deposit accounts 4,250,059 9,427,375
Net increase in advance payments by
borrowers for taxes and insurance 190,736 331,105
Proceeds from short-term borrowings 5,000,000 19,000,000
Repayments of short-term borrowings (19,000,000) -
Proceeds from other borrowings 12,000,000 -
Repayments of other borrowings - (6,200,000)
Proceeds from exercise of stock options 66,281 600,577
Dividends paid (291,759) (302,621)
Purchase of treasury stock (1,491,460) (535,470)
------------ -----------
Net cash from financing activities 9,777,743 24,313,087
------------ -----------
Decrease in cash and cash equivalents (4,753,582) (5,928,244)
Cash and cash equivalents:
Beginning of period 25,147,273 30,093,583
------------ -----------
End of period $ 20,393,691 $24,165,339
============ ===========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest on deposits $ 9,141,200 $ 7,490,300
============ ===========
Interest on borrowed funds $ 716,900 $ 298,400
============ ===========
Income taxes $ 692,218 $ 358,144
============ ===========
Supplemental disclosures of non-cash investing activities:
Real estate acquired through foreclosure $ 182,393 $ -
============ ===========
Increase (decrease) in unrealized gains on
securities available-for-sale $ 511,912 ($149,255)
============ ===========
(Increase) decrease in deferred taxes attributable to the
unrealized gains on securities available-for-sale ($174,050) $ 50,747
============ ===========
See notes to consolidated financial statements (unaudited).
6
KANKAKEE BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2001
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-Q. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The statement of condition
at December 31, 2000 has been derived from the audited financial statements at
that date, but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
Operating results for the three-month and six-month periods ended June 30, 2001
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in the annual report for
Kankakee Bancorp, Inc. (the "Company") on Form 10-K for the year ended December
31, 2000.
Note 2 - Earnings Per Share
Basic earnings per share of common stock have been determined by dividing
net income for the period by the average number of shares of common stock
outstanding. Diluted earnings per share of common stock have been determined by
dividing net income for the period by the average number of shares of common
stock and common stock equivalents outstanding. Common stock equivalents assume
exercise of stock options, and the calculation assumes purchase of treasury
stock with the option proceeds at the average market price for the period (when
dilutive). The Company has an incentive stock option plan for the benefit of
directors, officers and employees. Diluted earnings per share have been
determined considering the stock options granted, net of stock options which
have been exercised.
Note 3 - Accounting for Certain Investments in Debt and Equity Securities
At June 30, 2001, stockholders' equity included a positive $454,000, which
represents the amount by which the market value of the available-for-sale
securities and the available-for-sale mortgage-backed securities exceeded the
book value, net of income tax of $234,000. A decrease in market interest rates
during the six months ended June 30, 2001 resulted in a $338,000 increase in the
market value, net of income tax effect, of the available-for-sale securities and
the available-for-sale mortgage-backed securities. At the end of 2000, the
market value of the available-for-sale securities portfolio exceeded the book
value by $116,000, net of income tax benefit.
7
KANKAKEE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company is a Delaware company formed in 1992 for the purpose of
becoming the savings and loan holding company of Kankakee Federal Savings Bank
(the "Bank"), the Company's principal subsidiary. The Bank was originally
chartered in 1885 as an Illinois savings and loan association and was converted
to a federally chartered thrift institution in 1937.
The Company serves the financial needs of families and local businesses in
its primary market areas through its main office at 310 South Schuyler Avenue,
Kankakee, Illinois and fourteen branch offices located in the communities of
Ashkum, Bourbonnais, Bradley, Braidwood, Champaign, Coal City (2), Diamond,
Dwight, Herscher, Hoopeston, Manteno, Momence and Urbana, Illinois. The
Company's business involves attracting deposits from the general public and
using such deposits to originate residential mortgage loans and, to a lesser
extent, commercial real estate, consumer, commercial business, multi-family and
construction loans in its market areas. The Company also invests in investment
securities, mortgage-backed securities and various types of short term liquid
assets.
ECONOMIC CLIMATE AND BUSINESS DEVELOPMENTS
During the first half of 2001, the Federal Open Market Committee (the
"FOMC") lowered its target short-term interest rates six times, by a total of
two and three-quarters percentage points. The federal funds target became 3.75%
and the Federal Reserve discount rate became 3.25%. The federal funds rate is
the rate at which financial institutions borrow from each other, while the
discount rate is the rate at which member institutions borrow from the Federal
Reserve. The FOMC continues to cite a slowing economy and the risk of recession
as the motivating factors for lowering interest rates. Lower rates should
provide stimulus to the economy by reducing borrowing costs for both businesses
and individuals.
A slowing economy could adversely affect cash flows for both commercial and
individual borrowers, as a result of which, the Company could experience
increases in problem assets, delinquencies and losses on loans.
Lower market interest rates could benefit the Company by reducing its cost
of funds, as term deposits and borrowed money reprice to lower rates at
maturity. However, lower interest rates could also reduce the Company's return
on interest-earning assets. As investments mature or are called, and as loans
are repaid or prepaid, the reinvestment rates on those funds are lower. The
impact of changes in market interest rates on the Company's financial condition
and results of operations is the Company's interest rate sensitivity. While
management believes that the Company's current level of interest rate
sensitivity is reasonable, significant fluctuations in interest rates may have
an adverse effect on the Company's financial condition and results of
operations.
During 2000, the Company initiated an aggressive growth strategy which was
aimed at increasing deposits and growing the loan portfolio, while continuing to
reduce the size of the investment portfolio. While committed to continuing
profitable growth of its assets and liabilities, the Company, during the second
quarter of 2001, again began to sell most of the long-term, fixed-rate single-
family mortgage loans it originated. Loans with terms of less than 20 years
will continue to be retained in the portfolio.
8
FINANCIAL CONDITION
Total assets of the Company increased by $10.9 million, or 2.4%, to $470.8
million at June 30, 2001 from $459.9 million at December 31, 2000.
Cash and cash equivalents decreased by $4.7 million, or 18.9%, from $25.1
million at December 31, 2000 to $20.4 million at June 30, 2001. The decrease
was primarily attributable to an increase in loans during the period.
During the six-month period ended June 30, 2001, net loans receivable
increased by $33.5 million, or 9.9%, from $339.0 million to $372.5 million. This
was primarily the result of the origination of $69.0 million of real estate
loans and the origination of $28.8 million of consumer and commercial business
loans, offset by loan repayments which totaled $63.8 million.
Loans held for sale were $391,000 as of June 30, 2001. There were no loans
held for sale at December 31, 2000. During the six months ended June 30, 2001,
$3.8 million in residential real estate loans were originated for sale and $3.4
million of those loans were sold. In addition, $1.8 million in commercial real
estate loans were originated for sale and sold during the period.
Securities available-for-sale decreased by $16.6 million, or 29.0%, to
$40.6 million at June 30, 2001 from $57.2 million at December 31, 2000 as the
result of the maturity, or the exercise of call options by issuers, of $23.1
million of securities, which was partially offset by the purchase of $6.0
million of securities and by the net change in market value adjustment.
Mortgage-backed securities available-for-sale decreased by $2.4 million, or
14.6%, to $13.7 million at June 30, 2001 from $16.1 million at December 31,
2000. The decrease resulted from the maturity of $2.7 million of securities,
which was partially offset by the purchase of $301,000 of securities and by the
net change in market value adjustments.
Deposits increased by $13.1 million, or 3.3%, from $388.1 million at
December 31, 2000 to $401.2 million at June 30, 2001. During the six month
period, there was a $4.0 million increase in certificate of deposit accounts and
a $9.1 million increase in passbook, checking and money market accounts.
Total borrowings decreased by $2.0 million, or 6.9%, from $29.0 million at
December 31, 2000 to $27.0 million at June 30, 2001. The decrease was the
result of $19.0 million in repayments, which were partially offset by new
borrowings of $17.0 million. Borrowings consisted entirely of advances from the
Federal Home Loan Bank of Chicago.
ASSET/LIABILITY MANAGEMENT
Management attempts to control fluctuations in net interest income which
result from an imbalance in the amounts of assets and liabilities that reprice
during a period of time. The Company attempts to mitigate its interest rate
exposure, to the extent consistent with the maintenance of an adequate interest
rate spread. Adjustable rate mortgage loans, and loans with typically shorter
terms, such as commercial real estate loans, commercial business loans and
consumer loans, have historically been, and continue to be, retained.
Historically, most fixed-rate mortgage loans, particularly those with terms of
20-years or longer, have been sold in the secondary market (with servicing
usually retained). Since the beginning of 2000 and through the first quarter of
2001, the Company retained virtually all the fixed-rate mortgage loans it
originated. Approximately $10.3 million of fixed-rate mortgage loans with terms
of 20 years or longer were originated and retained
9
during the first quarter of 2001. While the Company continues to promote the
origination of adjustable rate mortgages, commercial real estate loans,
commercial business loans and consumer loans, management determined that the
Company's asset/liability position was such that retention of additional longer
term fixed-rate mortgage loans was appropriate. In light of the changing
economic climate and the current interest rate environment, the Company has,
during the second quarter of 2001, resumed selling fixed-rate mortgage loans
with terms of 20 years or longer in the secondary market. Management reviews the
Company's asset/liability position on a regular basis.
The Company has not entered into derivative financial instruments including
futures, forwards, interest rate risk swaps, option contracts, or other
financial instruments with similar characteristics. However, the Company is a
party to financial instruments with off-balance sheet risk in the normal course
of business to meet the financing needs of its customers such as commitments to
extend credit and letters of credit.
NON-PERFORMING ASSETS AND ALLOWANCE FOR LOSSES ON LOANS
The Company's non-performing assets decreased to $2.6 million, or 0.56%, of
total assets at June 30, 2001 from $3.5 million, or 0.76% of total assets at
December 31, 2000. During the six month period ended June 30, 2001, non-
performing construction and development loans, non-performing one-to-four family
loans, non-performing consumer loans, and non-performing commercial business
loans decreased by $900,000, $27,000, $77,000 and $733,000, respectively. These
decreases were partially offset by increases in non-performing commercial real
estate loans and non-performing multi-family loans of $447,000 and $121,000,
respectively. In addition, foreclosed assets increased by $80,000 and
restructured troubled debts increased by $71,000. The decrease in non-
performing construction and development loans was due to the repayment in full
of a single loan. The decrease in non-performing commercial business loans was
due to the loans involved having been brought current. The ratio of the
allowance for losses on loans to non-performing loans increased to 140.9% as of
June 30, 2001 compared to 83.9% as of December 31, 2000. The increase in this
ratio, which excludes foreclosed assets and restructured troubled debt, was
primarily the result of the decrease of $1.0 million in non-performing loans.
The Company classified $3.8 million of its assets as Special Mention, $2.5
million as Substandard and $103,000 as Loss as of June 30, 2001. No assets were
classified as Doubtful at June 30, 2001. This represents an increase of
$195,000 in the Special Mention category and a net increase of $282,000 in the
other categories from the December 31, 2000 totals for classified assets. The
ratio of classified assets to total assets (including items classified as
Special Mention) was 1.36% at June 30, 2001 as compared to 1.29% at December 31,
2000. The ratio of the allowance for losses on loans to classified assets
decreased to 34.2% as of June 30, 2001 compared to 36.3% as of December 31,
2000.
The allowance for losses on loans is established through a provision for
losses on loans based on management's evaluation of the risk inherent in the
loan portfolio and changes in the nature and volume of its loan activity. Such
evaluation, which includes a review of all loans with respect to which full
collectibility may not be reasonably assured, considers the fair value of the
underlying collateral, economic conditions, historical loan loss experience,
level of classified loans and other factors that warrant recognition in
providing for an adequate allowance for losses on loans.
While management believes that it uses the best information available to
determine the allowance for losses on loans, unforeseen market conditions could
result in adjustments to the allowance for losses on loans and net earnings
could be significantly affected if circumstances differ substantially from the
assumptions used in establishing the allowance for losses on loans.
10
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
Net income for the quarter ended June 30, 2001 was $734,000 compared to
$768,000 for the same period in 2000. This represented a $34,000, or 4.5%,
decrease. The decrease in net income resulted from an increase of $348,000 in
other expenses, and an increase of $40,000 in provisions for losses on loans,
which were substantially offset by increases in net interest income of $130,000
and other income of $196,000, and by a decrease of $27,000 in income tax
expense.
Basic earnings per share were $.61 for both the quarter ended June 30, 2001
and the comparable 2000 period. Diluted earnings per share were $.60 for the
quarter ended June 30, 2001 compared to $.59 for the comparable 2000 period.
Net interest income increased $130,000, or 4.0%, during the quarter ended
June 30, 2001, compared to the quarter ended June 30, 2000.
The table presented on page 17 ("Table I"), sets forth an analysis of the
Company's net interest income for the three-month periods ended June 30, 2001
and 2000.
As Table I indicates, interest income increased $956,000, or 13.1%, to $8.3
million for the three-month period ended June 30, 2001 from $7.3 million for the
same period in 2000. The increase in interest income was the result of an
increase in the average balance of interest-earning assets to $441.1 million
during the 2001 period from $385.6 million during the 2000 period, which was
partially offset by a decrease in the yield earned on interest-earning assets to
7.51% during the 2001 period from 7.60% during the 2000 period. The increase in
the average balance of interest-earning assets was due to increases in balances
of loans and other interest-earning assets, which were partially offset by
decreases in balances of mortgage-backed securities and investment securities
during the quarter. The decrease in the yield earned on interest-earning assets
was the result of decreasing market interest rates during the quarter, which
resulted in lower yields on short term assets and a lower yield on the
reinvestment of principal repayments and prepayments on loans and on newly
originated loans. The increase in average loans was primarily the result of an
aggressive lending program during 2000 and the first half of 2001.
Interest expense increased $825,000, or 20.5%, to $4.9 million during the
second quarter from $4.0 million in the same period in 2000. The increase in
interest expense was the result of an increase in the average outstanding
balance of interest-bearing liabilities to $426.9 million during the 2001 period
from $374.5 million during the 2000 period, and by an increase in the average
yield on interest-bearing liabilities to 4.56% during the 2001 period from 4.31%
during the 2000 period. The increase in average interest-bearing liabilities
resulted primarily from a more aggressive pricing policy and the continuing
movement to a sales oriented operation. The increase in the average yield on
interest-bearing liabilities resulted from a more aggressive pricing policy,
primarily during 2000, the effects of which are reflected in higher interest
costs on certificate balances.
Based on management's review of the adequacy of the allowance for losses on
loans, a provision for losses on loans of $40,000 was recorded during the second
quarter of 2001. There was no provision for losses on loans recorded during the
second quarter of 2000.
Other income for the three-month period ended June 30, 2001 increased
$196,000, or 33.1%, to $789,000 compared to $593,000 for the same period in
2000. The increase was attributable to increases of $150,000 in fee income,
$38,000 in gain on sale of loans held for sale and $14,000 in other income.
These increases were partially offset by decreases of $4,000 in gain on the sale
of real estate held for sale and $1,000 in insurance commissions. The $150,000
increase in fee
11
income resulted primarily from an increase in checking accounts subject to fees.
Other expenses for the second quarter of 2001 increased $348,000 or 12.9%,
to $3.1 million from $2.7 million for the second quarter of 2000. There were
increases of $42,000 (16.3%) in occupancy costs, $97,000 (23.4%) in other
expenses, $17,000 (21.0%) in data processing services, $114,000 (7.6%) in
compensation and benefits, $39,000 (58.7%) in advertising, $45,000 (59.5%) in
telephone and postage and $5,000 (36.9%) in provision for losses on foreclosed
assets. These increases were partially offset by decreases of $10,000 (5.6%) and
$1,000 (1.0%) in furniture and equipment expense and amortization of intangible
assets, respectively. The increase in the cost of data processing services was
due to costs associated with an upgrade in mainframe hardware and to costs
associated with implementation of on-line banking. Postage expenses increased as
a result of an increase in the number of checking accounts and an extensive
mailing required to inform customers of the Company's privacy policy. A
contributing factor to the increase in compensation and benefits was the higher
cost of health insurance.
Federal income taxes decreased $27,000 to $369,000 for the three-month
period ended June 30, 2001, compared to $396,000 for the same period in 2000.
The primary reason for this decrease was the decrease in pre-tax income.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2001 and 2000
Net income for the six-months ended June 30, 2001 was $1.4 million compared
to $1.3 million for the same period in 2000. This represented a $96,000, or
7.6%, increase. The increase in net income resulted from an increase of $405,000
in net interest income, and an increase of $193,000 in other income, which were
partially offset by increases of $408,000 in other expenses, $55,000 in
provision for losses on loans and $39,000 in income tax expense.
Basic earnings per share were $1.12 for the six months ended June 30, 2001
compared to $1.01 for the 2000 period. Diluted earnings per share were $1.10
for the six months ended June 30, 2001 compared to $.98 for the comparable 2000
period.
Net interest income increased $405,000, or 6.4%, during the six months
ended June 30, 2001, compared to the six months ended June 30, 2000.
The table presented on page 18 ("Table II"), sets forth an analysis of the
Company's net interest income for the six-month periods ended June 30, 2001 and
2000.
As Table II indicates, interest income increased $2.3 million, or 15.9%, to
$16.5 million for the six-month period ended June 30, 2001 from $14.2 million
for the same period in 2000. The increase in interest income was the result of
an increase in the yield earned on interest-earning assets to 7.62% during the
2001 period from 7.51% during the 2000 period, and an increase in the average
balance of interest-earning assets to $435.1 million during the 2001 period from
$380.0 million during the 2000 period. The increase in the average balance of
interest-earning assets was primarily due to increases in balances of loans and
other interest-earning assets, which were partially offset by decreases in
balances of mortgage-backed securities and investment securities during the
period. The increase in the yield earned on interest-earning assets was the
result of increasing market interest rates during 2000, a period during which
the Company had significant growth. While market interest rates have decreased
significantly during the first six months of 2001, the repricing to lower rates
of maturing and prepaying assets has not yet reduced yields to the levels
experienced in the first six months of 2000.
12
Interest expense increased $1.8 million, or 23.5%, to $9.7 million during
the first six months of 2001 from $7.9 million in the same period in 2000. The
increase in interest expense was the result of an increase in the average
outstanding balance of interest-bearing liabilities to $421.1 million during the
2001 period from $370.4 million during the 2000 period, and by an increase in
the average yield on interest-bearing liabilities to 4.65% during the 2001
period from 4.26% during the 2000 period. The increase in average interest-
bearing liabilities resulted primarily from a more aggressive pricing policy and
the continuing movement to a sales oriented operation. The increase in the
average yield on interest-bearing liabilities resulted from increasing market
rates during 2000 and a more aggressive pricing policy. While market interest
rates have decreased significantly during the first six months of 2001, the
impact of these decreases has not yet reduced funding costs to the same levels
as those of the first six months of 2000.
Based on management's review of the adequacy of the allowance for losses on
loans, a provision for losses on loans of $55,000 was recorded during the first
six months of 2001. There was no provision for losses on loans recorded during
the first six months of 2000.
Other income for the six-month period ended June 30, 2001 increased
$193,000, or 16.1%, to $1.4 million compared to $1.2 million for the same period
in 2000. The increase was attributable to increases of $212,000 in fee income,
$17,000 in other income and $37,000 in gain on the sale of loans held for sale.
These increases were partially offset by decreases of $61,000 in insurance
commissions and $1,000 in gain on the sale of real estate held for sale. The
increase in fee income was primarily the result of an increase in checking
accounts subject to fees. The increase in gain on the sale of loans held for
sale was the result of resuming the sale of long-term, fixed-rate loans during
the second quarter. The decrease in insurance commissions was due to a high
level of commissions during the first quarter of 2000 which did not recur in
2001.
Other expenses for the first half of 2001 increased $408,000, or 7.3%, to
$6.0 million from $5.6 million during the 2000 period. Most categories of other
expenses increased, including increases of $94,000 (3.1%) in compensation and
benefits, $80,000 (15.1%) in occupancy expenses, $29,000 (20.4%) in advertising,
$30,000 (17.6%) in data processing services, $45,000 (25.2%) in telephone and
postage and $131,000 (14.2%) in other expenses. The increase in compensation and
benefits was due in large part to increased costs of medical insurance in 2001.
The increase in the cost of data processing services was due to costs associated
with an upgrade in mainframe hardware and to costs associated with
implementation of on-line banking. Postage expenses increased as a result of an
increase in the number of checking accounts and an extensive mailing required to
inform customers of the Company's privacy policy.
LIQUIDITY AND CAPITAL RESOURCES
The Company maintains a level of cash and other liquid assets sufficient to
fund normal volumes of loan commitments, deposit withdrawals and other
obligations. The Office of Thrift Supervision (the "OTS") regulations currently
require each savings association to maintain sufficient liquidity to ensure its
safe and sound operation.
The Company's primary sources of funds are deposits and proceeds from
payments of principal and interest on loans and the sale or maturity of
investment securities and mortgage-backed securities. Management considers
current liquidity and additional sources of funds adequate to meet outstanding
liquidity needs.
Federally insured savings banks, such as the Bank, are required by federal
law and OTS regulations to maintain minimum levels of regulatory capital. The
OTS has established the following minimum capital requirements: a risk-based
capital ratio, a core capital ratio and a tangible capital
13
ratio. In addition to these minimum regulatory capital requirements, another
provision of federal law grants the OTS broad power to take prompt corrective
action to resolve the problems of undercapitalized institutions. The OTS
regulations implementing this statutory authority (the "prompt corrective action
regulations") establish other capital thresholds which determine whether an
institution will be deemed to be "well capitalized", "adequately capitalized",
"undercapitalized", "significantly undercapitalized" or "critically
undercapitalized". The capital category to which an institution is assigned in
turn determines the actions the OTS may take to address the institution's
undercapitalization. The capital regulations of the OTS exclude the effect of
SFAS 115 for the purpose of calculating regulatory capital.
The capital regulations currently require tangible capital of at least 1.5%
of adjusted total assets (as defined by regulation). Under the prompt corrective
action regulations, however, an institution with a ratio of tangible capital to
total assets below 2.0% is deemed to be "critically undercapitalized" and, as
such, will be subject to a variety of sanctions under the prompt corrective
action regulations, including, without limitation, limits on asset growth,
restrictions on activities and, ultimately, the appointment of a receiver.
Tangible capital generally includes common stockholders' equity and retained
income and certain non-cumulative perpetual preferred stock and related income
less intangible assets (other than specified amounts of mortgage servicing
rights) and certain non-includable investments in subsidiaries.
The capital regulations also currently require core capital equal to at
least 3.0% of adjusted total assets (as defined by regulation). Under the prompt
corrective action regulations, however, an institution with a ratio of core
capital to adjusted total assets of 3.0% will be deemed to be "adequately
capitalized" only if the institution also has a composite rating of A1" under
the Uniform Financial Institutions Rating System ("UFIRS"). All other
institutions must maintain a minimum ratio of core capital to adjusted total
assets of 4.0% in order to be deemed to be "adequately capitalized", and an
institution, regardless of its UFIRS rating, will be deemed to be "well
capitalized" only if it maintains a ratio of core capital to adjusted total
assets of at least 5.0%. If an institution fails to remain at least "adequately
capitalized", the OTS may impose one or more of a variety of sanctions on the
institution to address its undercapitalized condition, including, without
limitation, requiring the submission of a capital plan, restricting growth and
restricting the payment of capital distributions (such as dividends). Core
capital generally consists of tangible capital plus specified amounts of certain
intangible assets.
The OTS risk-based requirement currently requires associations to have
total capital of at least 8.0% of risk-weighted assets. In order to be
considered "well capitalized" under the prompt corrective action regulations,
however, an institution must maintain a ratio of total capital to total risk-
weighted assets of at least 10.0% and a ratio of core capital to total risk-
weighted assets of at least 6.0%. Total capital consists of core capital plus
supplementary capital, which consists of, among other things, maturing capital
instruments, such as subordinated debt and mandatorily redeemable preferred
stock, and a portion of the Bank's general allowance for losses on loans.
As of June 30, 2001, the Bank exceeded all current minimum regulatory
capital standards and was deemed to be "well capitalized" for purposes of the
OTS's prompt corrective action regulations. At June 30, 2001, the Bank's
tangible capital was $32.2 million, or 6.9%, of adjusted total assets,
which exceeded the 1.5% requirement by $25.3 million and exceeded the 2.0%
"critically undercapitalized" threshold by $22.9 million. In addition, at June
30, 2001, the Bank had core capital of $32.2 million, or 6.9%, of adjusted total
assets, which exceeded the 4.0% requirement by $13.7 million and exceeded the
5.0% "well capitalized" threshold by $9.0 million. The Bank had risk-based
capital of $34.3 million at June 30, 2001, or 11.4%, of risk-adjusted assets,
which exceeded the minimum risk-based capital requirement by $10.3 million and
exceeded the 10.0% "well capitalized" threshold by $4.3 million. Additionally,
the Bank's $32.2 million of core capital equaled
14
10.7% of total risk-weighted assets, which exceeded the 6.0% "well capitalized"
threshold by $14.2 million.
EMERGING ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board issued two
statements which are summarized as follows:
Business Combinations Statement of Financial Accounting Standard No. 141,
"Business Combinations" (FAS 141) addresses financial accounting and reporting
for business combinations. It requires all business combinations covered by the
scope of the Standard to be accounted for using the purchase method. It is
effective for business combinations initiated after June 30, 2001 and business
combinations completed July 1, 2001 and later which use the purchase method of
accounting. The Company has no pending business combinations which would be
impacted by this statement. The requirements of this statement would need to be
considered in any business combination contemplated in the future.
Goodwill and Other Intangible Assets Statement of Financial Accounting
Standard No. 142, "Goodwill and Other Intangible Assets" (FAS 142) addresses
financial accounting and reporting for goodwill and other intangible assets. It
addresses how intangible assets should be accounted for at the time of
acquisition and in subsequent periods. It requires that goodwill and other
intangible assets having indefinite useful lives not be amortized. Instead,
such assets must be tested at least annually for impairment. Such assets having
finite useful lives would continue to be amortized over those lives. The
Standard provides specific guidance for testing goodwill and other intangible
assets for impairment and also requires additional disclosures concerning
goodwill and other intangible assets.
FAS 142 is effective for fiscal years beginning after December 15, 2001 and
must be applied to all goodwill and other intangible assets recognized in
financial statements as of the start of that fiscal year. Impairment losses
resulting from the initial application of the Standard are to be reported as
resulting from a change in accounting principle. At this time, the Company does
not believe the adoption of the Standard will have a material impact on the
consolidated financial statements. However, the evaluation of the impact has
not yet been completed.
STOCK REPURCHASE
During the quarter ended June 30, 2001, the Company repurchased 18,500
shares of common stock at a total cost of $442,000 under the repurchase program
approved the Company's Board of Directors in January 2001. Through June 30,
2001, a total of 667,507 shares of common stock of the Company had been
purchased under the current and previous repurchase programs at a total cost of
$14.3 million. As of June 30, 2001, the Company held 545,092 shares of its
common stock as treasury stock. During the period from June 30, 2001 through
August 8, 2001 no additional shares of common stock were repurchased.
STOCK OPTIONS
During the second quarter of 2001, no options on shares of common stock
were exercised. Between June 30, 2001 and August 8, 2001, options on 2,500
shares of common stock were exercised. Through August 8, 2001, no notice was
received from holders of options of their intent to exercise options.
15
DIVIDENDS
On July 10, 2001, a cash dividend of $.12 per share was declared, payable
on August 31, 2001 to stockholders of record as of August 10, 2001. Future
dividends will depend primarily upon earnings, financial condition and need for
funds, as well as restrictions imposed by regulatory authorities regarding
dividend payments and capital requirements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such forward-
looking statements to be covered by the safe harbor provisions for forward-
looking statements contained in the Private Securities Reform Act of 1995, and
is including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Company, are generally
identifiable by use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project" or similar expressions. The Company's ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on the operations
and future prospects of the Company and its subsidiaries include, but are not
limited to, changes in: interest rates, general economic conditions,
legislative/regulatory changes, monetary and fiscal policies of the U. S.
Government, including policies of the U. S. Treasury and the Federal Reserve
Board, the quality of composition of the loan or investment portfolios, demand
for loan products, deposit flows, competition, demand for financial services in
the Company's market area, implementation by the Company of new technologies,
the Company's ability to develop and maintain secure and reliable electronic
systems and accounting principles, policies and guidelines. These risks and
uncertainties should be considered in evaluating forward-looking statements and
undue reliance should not be placed on such statements. Further information
concerning the Company and its business, including additional factors that could
materially affect the Company's financial results, is included in the Company's
filings with the Securities and Exchange Commission.
16
TABLE I
NET INTEREST INCOME ANALYSIS (UNAUDITED)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
Three Months Ended June 30,
-----------------------------------------
2001 2000
----------------------------------- -----------------------------------
Average Average
Outstanding Interest Yield/ Outstanding Interest Yield/
Balance Earned/Paid Rate Balance Earned/Paid Rate
----------------------------------- -----------------------------------
(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1) $362,541 $ 7,084 7.84% $293,843 $ 5,806 7.93%
Mortgage-backed securities (2) 14,573 256 7.05% 18,130 315 6.97%
Investments securities (3) 41,692 632 6.08% 60,840 949 6.26%
Other interest-earning assets 19,972 248 4.98% 10,957 199 7.28%
FHLB stock 2,315 38 6.58% 1,835 33 7.21%
-------- ------- -------- -------
Total interest-earning assets 441,093 8,258 7.51% 385,605 7,302 7.60%
-------- ------- -------- -------
Other assets 29,622 29,068
-------- --------
Total assets $470,715 $414,673
======== ========
Interest-bearing liabilities:
Certificate accounts $249,478 3,633 5.84% $221,558 3,006 5.44%
Savings deposits 61,499 405 2.64% 61,942 388 2.51%
Demand and NOW deposits 88,942 486 2.19% 76,279 434 2.28%
Borrowings 27,000 329 4.89% 14,750 199 5.41%
-------- ------- -------- -------
Total interest-bearing liabilities 426,919 4,853 4.56% 374,529 4,027 4.31%
-------- ------- -------- -------
Other liabilities 4,616 3,657
-------- --------
Total liabilities 431,535 378,186
-------- --------
Stockholders' equity 39,180 36,487
-------- --------
Total liabilities and
stockholders' equity $470,715 $414,673
======== ========
Net interest income $ 3,405 $ 3,275
======= =======
Net interest rate spread 2.95% 3.29%
==== ====
Net earning assets $ 14,174 $ 11,076
======== ========
Net yield on average interest-
earning assets (net interest
margin) 3.10% 3.41%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 103.32% 102.96%
======= =======
(1) Calculated including loans held for sale, and net of deferred loan fees,
loan discounts, loans in process and the allowance for losses on loans.
(2) Calculated including mortgage-backed securities available-for-sale.
(3) Calculated including investment securities available-for-sale and
certificates of deposit.
17
TABLE II
NET INTEREST INCOME ANALYSIS (UNAUDITED)
KANKAKEE BANCORP, INC. AND SUBSIDIARY
Six Months Ended June 30,
------------------------------------------------------
2001 2000
------------------------------------- ------------------------------------
Average Average
Outstanding Interest Yield/ Outstanding Interest Yield/
Balance Earned/Paid Rate Balance Earned/Paid Rate
------------------------------------- ------------------------------------
(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1) $353,422 $13,940 7.95% $283,456 $11,079 7.86%
Mortgage-backed securities (2) 15,126 537 7.16% 18,041 624 6.96%
Investments securities (3) 46,929 1,408 6.05% 61,704 1,918 6.25%
Other interest-earning assets 17,398 492 5.70% 14,941 512 6.89%
FHLB stock 2,240 75 6.75% 1,825 65 7.16%
-------- ------- -------- -------
Total interest-earning assets 435,115 16,452 7.62% 379,967 14,198 7.51%
-------- ------- -------- -------
Other assets 29,468 30,029
-------- --------
Total assets $464,583 $409,996
======== ========
Interest-bearing liabilities:
Certificate accounts $247,940 7,240 5.89% $219,997 5,895 5.39%
Savings deposits 59,375 762 2.59% 61,256 762 2.50%
Demand and NOW deposits 87,249 1,009 2.33% 75,955 856 2.27%
Borrowings 26,571 691 5.24% 13,229 340 5.17%
-------- ------- -------- -------
Total interest-bearing liabilities 421,135 9,702 4.65% 370,437 7,853 4.26%
-------- ------- -------- -------
Other liabilities 4,344 3,237
-------- --------
Total liabilities 425,479 373,674
-------- --------
Stockholders' equity 39,104 36,322
-------- --------
Total liabilities and
stockholders' equity $464,583 $409,996
======== ========
Net interest income $ 6,750 $ 6,345
======= =======
Net interest rate spread 2.97% 3.25%
==== ====
Net earning assets $ 13,980 $ 9,530
======== ========
Net yield on average interest-
earning assets (net interest
margin) 3.13% 3.36%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 103.32% 102.57%
======= =======
(1) Calculated including loans held for sale, and net of deferred loan fees,
loan discounts, loans in process and the allowance for losses on loans.
(2) Calculated including mortgage-backed securities available-for-sale.
(3) Calculated including investment securities available-for-sale and
certificates of deposit.
18
KANKAKEE BANCORP, INC.
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings - There are no material pending legal proceedings
-----------------
to which the Company or the Bank is a party other than ordinary routine
litigation incidental to their respective businesses.
Item 2. Changes in Securities - None
---------------------
Item 3. Defaults Upon Senior Securities - None
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders - The Annual
---------------------------------------------------
Meeting of Stockholders of the Company was held on April 20, 2001. At
the meeting, Brenda L. Baird and Larry D. Huffman were elected to serve
as directors with terms expiring in 2004. Continuing with terms
expiring in 2002 were William Cheffer and Michael A. Stanfa. Continuing
with terms expiring in 2003 were Charles C. Huber, Thomas M. Schneider
and Wesley E. Walker.
The matters approved by stockholders at the meeting and the number of
votes cast for, against or withheld (as well as the number of
abstentions and broker non-votes) as to each matter are set forth
below:
Number of Votes
---------------
For Withheld
-------- ---------
The election of the following
directors for a three-year term:
Brenda L. Baird 913,198 120,333
Larry D. Huffman 899,273 134,258
Broker
For Against Abstain Non-Votes
------- --------- --------- ---------
The ratification of McGladrey
& Pullen, LLP, as the auditors
for the year ending December
31, 2001 1,021,920 9,514 2,097 -
Item 5. Other Information - None
-----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits - None
--------
b. Reports on Form 8-K
-------------------
On April 18, 2001, the Company filed a report on Form 8-K stating
under Item 5 that the Company had, on April 18, 2001, issued a news
release announcing its earnings for the quarter ending March 31,
2001, as well as other recent corporate events.
19
KANKAKEE BANCORP, INC.
SIGNATURES
----------
In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KANKAKEE BANCORP, INC.
Registrant
Date: August 8, 2001 /s/ LARRY D. HUFFMAN
-------------------------- -----------------------------
President and CEO
Date: August 8, 2001 /s/ RONALD J. WALTERS
-------------------------- -----------------------------
Vice President and Treasurer
(Principal Financial
And Accounting Officer)
20