UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 2006
-----------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ To _______________
Commission File Number 000-51078
LINCOLN PARK BANCORP
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FEDERAL 61-1479859
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
31 Boonton Turnpike, Lincoln Park, New Jersey 07035
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (973) 694-0330
-----------------------------------------------
Indicate by check X whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes [ ] No [X]
The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 1,851,500 shares of common stock, par
value $.01 per share as of August 11, 2006.
Transitional Small Business Disclosure Format. Yes [ ] No [X]
LINCOLN PARK BANCORP AND SUBSIDIARY
INDEX
Page
PART I - FINANCIAL INFORMATION Number
-------------
Item 1: Financial Statements
Consolidated Statements of Financial Condition
at June 30, 2006 and December 31, 2005 (Unaudited) 1
Consolidated Statements of Income for the Three Months and
Six Months Ended June 30, 2006 and 2005 (Unaudited) 2
Consolidated Statements of Comprehensive Income for the Three Months
And Six Months Ended June 30, 2006 and 2005 (Unaudited) 3
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2006 and 2005 (Unaudited) 4
Notes to Consolidated Financial Statements (Unaudited) 5 - 9
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 17
Item 3: Controls and Procedures 18
PART II - OTHER INFORMATION 19-20
SIGNATURES 21
PART I- FINANCIAL INFORMATION
LINCOLN PARK BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(Unaudited)
June 30, December 31,
ASSETS 2006 2005
------------ ------------
Cash and amounts due from depository institutions $ 1,234,194 $ 1,627,946
Interest-bearing deposits in other banks 1,073,297 688,232
------------ ------------
Total cash and cash equivalents 2,307,491 2,316,178
------------ ------------
Term deposits 583,141 580,629
Securities available for sale 2,509,401 3,002,336
------------ ------------
Securities held to maturity, estimated fair value of $18,657,000
and $18,320,000, respectively 18,967,077 18,817,087
Loans receivable, net of allowance for loan losses of $162,000
and $158,500, respectively 69,048,049 66,383,298
Premises and equipment 884,137 883,848
Federal Home Loan Bank of New York stock, at cost 1,391,300 1,264,500
Interest receivable 485,318 448,172
Other assets 71,046 262,209
------------ ------------
Total assets $ 96,246,960 $ 93,958,257
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 54,573,423 $ 54,366,814
Advances from Federal Home Loan Bank of New York 27,975,933 25,533,730
Advance payments by borrowers for taxes and insurance 402,381 364,785
Other liabilities 100,090 305,390
------------ ------------
Total liabilities 83,051,827 80,570,719
------------ ------------
Stockholders' equity:
Preferred stock; no par value; 1,000,000 shares authorized;
none issued or outstanding -- --
Common stock; $.01 par value; 5,000,000 shares authorized;
1,851,500 issued and outstanding 18,515 18,515
Additional paid in capital 7,456,192 7,776,418
Retained earnings - substantially restricted 6,121,460 5,982,726
Unearned ESOP shares (356,540) (366,220)
Accumulated other comprehensive loss -
unrealized loss on securities available for sale (44,494) (23,901)
------------ ------------
Total stockholders' equity 13,195,133 13,387,538
------------ ------------
Total liabilities and stockholders' equity $ 96,246,960 $ 93,958,257
============ ============
See notes to consolidated financial statements.
-1-
LINCOLN PARK BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Interest income:
Loans $ 953,554 $ 820,170 $ 1,860,777 $ 1,585,143
Securities 261,709 262,359 526,382 519,670
Other interest-earning assets 16,277 13,860 26,645 25,241
----------- ----------- ----------- -----------
Total interest income 1,231,540 1,096,389 2,413,804 2,130,054
----------- ----------- ----------- -----------
Interest expense:
Deposits 343,770 245,194 652,992 478,041
Advances and other borrowed money 282,766 152,953 532,704 288,110
----------- ----------- ----------- -----------
Total interest expense 626,536 398,147 1,185,696 766,151
----------- ----------- ----------- -----------
Net interest income 605,004 698,242 1,228,108 1,363,903
Provision for loan losses 116 (9,000) 3,616 18,000
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 604,888 707,242 1,224,492 1,345,903
----------- ----------- ----------- -----------
Non-interest income:
Fees and service charges 18,036 25,698 36,635 40,695
Gains (losses) on calls of securities held to maturity 500 -- 500 (7,239)
Gains on sale of securities available for sale -- -- 9,612 --
Miscellaneous 5,879 6,060 10,940 14,096
----------- ----------- ----------- -----------
Total non-interest income 24,415 31,758 57,687 47,552
----------- ----------- ----------- -----------
Non-interest expenses:
Salaries and employee benefits 208,742 200,371 413,588 394,743
Net occupancy expense of premises 25,242 27,049 55,252 62,584
Equipment 56,447 50,386 116,851 102,368
Advertising 10,505 16,435 20,238 28,692
Federal insurance premium 1,740 2,107 3,570 4,192
Miscellaneous 173,284 172,876 380,332 335,313
----------- ----------- ----------- -----------
Total non-interest expenses 475,960 469,224 989,831 927,892
----------- ----------- ----------- -----------
Income before income taxes 153,343 269,776 292,348 465,563
Income taxes 58,566 105,835 111,305 181,862
----------- ----------- ----------- -----------
Net income $ 94,777 $ 163,941 $ 181,043 $ 283,701
=========== =========== =========== ===========
Net income per common share:
Basic $ 0.05 $ 0.09 $ 0.10 $ 0.16
=========== =========== =========== ===========
Weighted average number of common shares and
common stock equivalents outstanding:
Basic 1,794,046 1,818,212 1,800,163 1,818,000
=========== =========== =========== ===========
Net income per common share:
Diluted $ 0.05 $ 0.09 $ 0.10 $ 0.16
=========== =========== =========== ===========
Weighted average number of common shares and
common stock equivalents outstanding:
Diluted 1,798,922 1,818,212 1,804,325 1,818,000
=========== =========== =========== ===========
See notes to consolidated financial statements.
-2-
LINCOLN PARK BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
-----------------------------------------------
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Net income $ 94,777 $ 163,941 $ 181,043 $ 283,701
--------- --------- --------- ---------
Other comprehensive income (loss), net of income taxes:
Gross unrealized holding (loss) gain on
securities available for sale (13,681) 32,621 (34,332) 4,347
Deferred income taxes 5,512 (13,021) 13,739 (1,719)
--------- --------- --------- ---------
Other comprehensive income (loss) (8,169) 19,600 (20,593) 2,628
--------- --------- --------- ---------
Comprehensive income $ 86,608 $ 183,541 $ 160,450 $ 286,329
========= ========= ========= =========
See notes to consolidated financial statements.
-3-
LINCOLN PARK BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
Six Months Ended
June 30,
------------------------------
2006 2005
------------ ------------
Cash flows from operating activities:
Net income $ 181,043 $ 283,701
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of premises and equipment 33,528 32,152
Amortization and accretion, net 17,701 27,867
(Gain) on sales/calls of securities available for sale (9,612) --
(Gain) loss on calls of securities held to maturity (500) 7,239
Provision for loan losses 3,616 18,000
(Increase) in interest receivable (37,146) (36,183)
Decrease (increase) in other assets 191,163 (5,540)
Increase in accrued interest payable 11,000 1,089
Increase (decrease) in other liabilities (195,187) 71,083
ESOP shares committed to be released 8,253 8,280
Restricted Stock Earned 35,552 --
------------ ------------
Net cash provided by operating activities 239,411 407,688
------------ ------------
Cash flows from investing activities:
Purchases of term deposits -- (495,000)
Purchases of securities available for sale (72,262) (49,180)
Proceeds from maturities and calls of securities available for sale 500,000 1,100,000
Proceeds from sales of securities available for sale 24,298 --
Principal repayments on securities available for sale 15,996 23,311
Purchases of securities held to maturity (1,000,000) (3,460,000)
Proceeds from maturities and calls of securities held to maturity 710,500 1,185,000
Principal repayments on securities held to maturity 139,834 198,243
Net (increase) in loans receivable (2,688,221) (4,357,493)
Additions to premises and equipment (33,817) (19,242)
Purchase of Federal Home Loan Bank of New York stock (265,800) (264,600)
Redemption of Federal Home Loan Bank of New York stock 139,000 71,100
------------ ------------
Net cash used in investing activities (2,530,472) (6,067,861)
------------ ------------
Cash flows from financing activities:
Net increase (decrease) in deposits 199,235 (1,726,404)
Proceeds from advances from Federal Home Loan Bank of New York 49,250,000 11,800,000
Repayments of advances from Federal Home Loan Bank of New York (46,807,797) (7,929,376)
Net increase in payments by borrowers for taxes and insurance 37,596 32,223
Net change in paid in capital -- (8,025)
Purchase of restricted stock (355,778) --
Dividends Paid (40,882) --
------------ ------------
Net cash provided by financing activities 2,282,374 2,168,418
------------ ------------
Net decrease in cash and cash equivalents (8,687) (3,491,755)
Cash and cash equivalents - beginning 2,316,178 5,898,288
------------ ------------
Cash and cash equivalents - ending $ 2,307,491 $ 2,406,533
============ ============
Supplemental information:
Cash paid during the period for:
Interest on deposits and borrowings $ 1,175,131 $ 762,739
============ ============
Income taxes $ 295,797 $ 131,741
============ ============
See notes to consolidated financial statements.
-4-
LINCOLN PARK BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. PRINCIPLES OF CONSOLIDATION
--------------------------------
The consolidated financial statements include the accounts of Lincoln
Park Bancorp (the "Company") and its wholly owned subsidiary, Lincoln Park
Savings Bank (the "Bank"). The Company's business is conducted principally
through the Bank. All significant intercompany accounts and transactions have
been eliminated in consolidation.
2. BASIS OF PRESENTATION
--------------------------
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-QSB and regulation S-X and
do not include information or footnotes necessary for a complete presentation of
financial condition, results of operations, and cash flows in conformity with
U.S. generally accepted accounting principles. However, in the opinion of
management, all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the consolidated financial statements have
been included. The results of operations for the three months and six months
ended June 30, 2006, are not necessarily indicative of the results which may be
expected for the entire fiscal year.
3. NET INCOME PER COMMON SHARE
--------------------------------
Basic and diluted net income per share were computed by dividing net
income by the weighted average number of shares of common stock outstanding,
adjusted for unearned shares of the ESOP, restricted stock and stock options.
4. CRITICAL ACCOUNTING POLICIES
---------------------------------
We consider accounting policies involving significant judgments and
assumptions by management that have, or could have, a material impact on the
carrying value of certain assets or on income to be critical accounting
policies. Material estimates that are particularly susceptible to significant
changes relate to the determination of the allowance for loan losses.
Determining the amount of the allowance for loan losses necessarily involves a
high degree of judgment. Management reviews the level of the allowance on a
quarterly basis, at a minimum, and establishes the provision for loan losses
based on the composition of the loan portfolio, delinquency levels, loss
experience, economic conditions, and other factors related to the collectibility
of the loan portfolio. Since there has been no material shift in loan portfolio,
the level of the allowance for loan losses has changed primarily due to changes
in the size of the loan portfolio and the level of nonperforming loans. We have
allocated the allowance among categories of loan types as well as classification
status at each period-end date. Assumptions and allocation percentages based on
loan types and classification status have been consistently applied. Management
regularly evaluates various risk factors related to the loan portfolio, such as
type of loan, underlying collateral and payment status, and the corresponding
allowance allocation percentages.
-5-
LINCOLN PARK BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
4. CRITICAL ACCOUNTING POLICIES (CONT'D)
-------------------------------------------
Although we believe that we use the best information available to
establish the allowance for loan losses, future additions to the allowance may
be necessary based on estimates that are susceptible to change as a result of
changes in economic conditions and other factors. In addition, the regulatory
authorities, as an integral part of their examinations process, periodically
reviews our allowance for loan losses. Such agencies may require us to recognize
adjustments to the allowance based on its judgments about information available
to it at the time of their examinations.
5. STOCK COMPENSATION PLANS
-----------------------------
The Company has two stock-related compensation plans, including stock
option and restricted stock plans, which are described in Note 13 to the
Company's Consolidated Financial Statements included in its Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2005. Through December 31,
2005, the Company accounted for its stock option and employee stock ownership
plans using the intrinsic value method set forth in Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB No. 25") and
related interpretations for these plans. Under APB No. 25, generally, when the
exercise price of the Company's stock options equaled the market price of the
underlying stock on the date of the grant, no compensation expense was
recognized. The Company adopted SFAS No. 123R, using the modified-prospective
transition method, beginning on January 1, 2006 and, therefore, began to expense
the fair value of all options over their remaining vesting periods to the extent
the options were not fully vested as of the adoption date and began to expense
the fair value of all share-based compensation granted subsequent to December
31, 2005, over its requisite service periods.
SFAS No. 123R also requires the benefits of realized tax deductions in
excess of previously recognized tax benefits on compensation expense to be
reported as a financing cash flow (there were no realized tax benefits for the
three or six months ended June 30, 2006) rather than an operating cash flow, as
previously required. In accordance with Staff Accounting Bulletin ("SAB") No.
107, the Company classified share-based compensation within salaries and
employee benefits and other expenses to correspond with the same line item as
the cash compensation paid to employees and non-employee directors.
Employee options vest over a seven-year service period and non-employee
director options vest over a five-year service period. Compensation expense
recognized for all option grants is recognized over the awards' respective
requisite service periods. The fair values relating to all of the calendar 2005
option grants were estimated using the Black-Scholes option pricing model.
Expected volatilities are based on historical volatility of our stock and other
factors, such as implied market volatility. We used historical exercise data
based on the age at grant of the option holder to estimate the options' expected
term, which represents the period of time that the options granted are expected
to be outstanding. We anticipated the future option holding periods to be
similar to the historical option holding periods. The risk-free rate for periods
within the contractual life of the option is based on the U.S. Treasury yield
curve in effect at the time of grant. We recognize compensation expense for the
fair values of these awards, which have graded vesting, on a straight-line basis
over the requisite service period of the awards. We did not grant any options
during the six months ended June 30, 2006 and 2005.
- 6 -
LINCOLN PARK BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
5. STOCK COMPENSATION PLANS (CONT'D)
--------------------------------------
Restricted shares granted to outside directors and employees vest in five
annual installments and seven annual installments, respectively. The fair value
of restricted shares under the Company's restricted stock plans is determined by
the product of the number of shares granted and the grant date market price of
the Company's common stock. The fair value of restricted shares is expensed on a
straight-line basis over the requisite service period of five years for the
outside directors and seven years for the employees.
During the six months ended June 30, 2006, the Company recorded $35,000 of
share-based compensation expense, which was comprised of stock option expense of
$20,000 and restricted stock expense of $15,000. The Company estimates it will
record share-based compensation expense of approximately $72,000 in fiscal 2006.
The following table illustrates the impact of share-based compensation on
reported amounts:
Three Months Ended Six Months Ended
June 30, 2006 June 30, 2006
-------------------------- --------------------------
Impact of Impact of
Share-Based Share-Based
Compensation Compensation
As Reported Expense As Reported Expense
----------- ----------- ----------- ----------
Net operating income before taxes $ 153,343 $ 17,290 $ 292,348 $ 35,552
Net Income 94,777 17,290 181,043 35,552
Earnings per share:
Basic $ 0.05 $ 0.01 $ 0.10 $ 0.02
=========== ========== =========== ==========
Diluted $ 0.05 $ 0.01 $ 0.10 $ 0.02
=========== ========== =========== ==========
- 7 -
LINCOLN PARK BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
5. STOCK COMPENSATION PLANS (CONT'D)
--------------------------------------
A summary of the Company's stock option activity and related information
for its option plans for the six months ended June 30, 2006, was as follows:
WEIGHTED
WEIGHTED AVERAGE AGGREGATE
AVERAGE REMAINING INTRINSIC
EXERCISE CONTRACTUAL VALUE
OPTIONS PRICE TERM (000'S)
----------------- ------------------ ------------------ --------------
Outstanding at December 31, 2005 66,520 $ 8.90
Granted - -
Exercised - -
Forfeited - -
-----------------
Outstanding at June 30, 2006 66,520 $ 8.90 5.5 years $ 40,000
=================
Exercisable at June 30, 2006 - $ - 5.5years $ -
A summary of the status of the Company's non-vested options as of June
30, 2006 and changes during the six months ended June 30, 2006, is presented
below:
WEIGHTED
AVERAGE
GRANT DATE
OPTIONS FAIR VALUE
-------------- ---------------
Non-vested at December 31, 2005 66,520 $ 3.38
Granted -- --
Vested -- --
Forfeited -- --
--------------
Non-vested at June 30, 2006 66,520 $ 3.38
==============
- 8 -
LINCOLN PARK BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
5. STOCK COMPENSATION PLANS (CONT'D)
--------------------------------------
Expected future compensation expense relating to the 66,520 non-vested
options outstanding as of June 30, 2006 is $204,000 over a weighted-average
period of 5.5 years.
A summary of the status of the Company's restricted shares as of June 30,
2006 and changes during the six months ended June 30, 2006, is presented below:
WEIGHTED
AVERAGE
RESTRICTED GRANT DATE
SHARES FAIR VALUE
------------------ ---------------------
Non-vested at December 31, 2005 18,705 $ 8.90
Granted - -
Vested - -
Forfeited - -
------------------
Non-vested at June 30, 2006 18,705 $ 8.90
==================
Expected future compensation expense relating to the 18,705 restricted
shares at June 30, 2006 is $150,000 over a weighted-average period of 5.1 years.
For purposes of pro forma disclosures, the estimated fair value of the
stock options, restricted shares, and shares under the employee stock ownership
plan were amortized to expense over their assumed vesting periods.
-9-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
ITEM 2.
FORWARD-LOOKING STATEMENTS.
This Form 10-QSB may include certain forward-looking statements based
on current management expectations. The actual results of the Company could
differ materially from those management expectations. Factors that could cause
future results to vary from current management expectations include, but are not
limited to, general economic conditions, legislative and regulatory changes,
monetary and fiscal policies of the federal government, changes in tax policies,
rules and regulations of federal, state and local tax authorities, changes in
interest rates, deposit flows, the cost of funds, demand for loan products,
demand for financial services, competition, changes in the quality or
composition of loan and investment portfolios of the Bank, changes in accounting
principles, policies or guidelines, and other economic, competitive,
governmental and technological factors affecting the Company's operations,
markets, products, services and prices.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2006 AND DECEMBER 31, 2005
Our total assets increased by $2.3 million, or 2.4%, to $96.3 million
at June 30, 2006, from $94.0 million at December 31, 2005. At June 30, 2006, and
at December 31, 2005, the level of cash and cash equivalents remained unchanged
at $2.3 million. Term deposits increased $2,000 to $583,000 at June 30, 2006
when compared with $581,000 at December 31, 2005.
Securities available for sale decreased $493,000 or 16.4% to $2.5
million at June 30, 2006 when compared with $3.0 million at December 31, 2005.
The decrease in securities available for sale during the 2006 period resulted
primarily from maturities and repayments of $540,000. Securities held to
maturity increased by $150,000 or .80% to $19.0 million at June 30, 2006 when
compared with $18.8 million at December 31, 2005. During the six months ended
June 30, 2006, purchases of securities held to maturity amounted to $1.0 million
which was sufficient to offset maturities and repayments of $850,000.
Loans receivable amounted to $69.0 million and $66.4 million at June
30, 2006 and December 31, 2005, respectively, representing an increase of $2.7
million or 4.01%. Our increase in loans resulted primarily from increased one-to
four family mortgage loan originations. The loans receivable was funded by
borrowings.
Federal Home Loan Bank of New York ("FHLB") stock increased $127,000 or
10.0% to $1.4 million at June 30, 2006 when compared with $1.3 million at
December 31, 2005 primarily due to an increase in borrowings.
Other assets decreased $191,000 or 73.0% to $71,000 at June 30, 2006
from $262,000 in December of 2005. The decrease was mainly due to a $ 200,000
loan that was originated but not closed at the end of December 2005.
-10-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2006 AND DECEMBER 31, 2005
(CONT'D.)
Total deposits increased $207,000 or .38% to $54.6 million at June 30,
2006 from $54.4 million at December 31, 2005. The increase in deposits was due
to a management decision to be more competitive with deposit rates. Advances
from FHLB increased $2.4 million or 9.6% to $28.0 million at June 30, 2006 when
compared with $25.5 million at December 31, 2005. The proceeds from new advances
were used to fund loan originations.
Other liabilities decreased $205,000 or 67.0% to $100,000 at June 30,
2006 when compared to $305,000 at December 31, 2005. The decrease was primarily
due to the debit balances in tax accounts.
Stockholders' equity totaled $13.2 million and $13.4 million at June
30, 2006 and December 31, 2005, respectively, reflecting net income of $181,000
for the six months ended June 30, 2006, offset by the purchase of stock in the
amount of $ 356,000 for the restricted stock plan.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2006
AND 2005
GENERAL. Net income decreased by $69,000, or 42.0%, to $95,000 for the
three months ended June 30, 2006, from $164,000 for the three months ended June
30, 2005. The decrease in net income reflects increases in interest expense,
provision for loan losses, and an increase in non-interest expenses, partially
offset by an increase in total interest income.
INTEREST INCOME. Interest income increased $135,000, or 12.3%, to $1.2
million for the three months ended June 30, 2006, from $1.1 million for the
three months ended June 30, 2005. The increase in interest income is due to
increases of $133,000 in interest income from loans, and $2,000 in interest
income from other interest earning assets.
Interest income from loans increased by $133,000, or 16.26%, to
$954,000 for the three months ended June 30, 2006, from $820,000 for the three
months ended June 30, 2005. The increase was due to an $8.0 million or 13.4%
increase in the average balance of loans to $68.2 million in 2006 from $60.2
million in 2005 and an increase in the average yield to 5.59% from 5.45%.
Interest income from securities, including available for sale and held to
maturity, remained unchanged at $262,000 for the three months ended June 30,
2006, and for the three months ended June 30, 2005. The average yield on these
securities increased to 4.57 % for the three months ended June 30, 2006 as
compared to 4.42% for the three months ended June 30, 2005, sufficient to offset
a decrease in the average balance of $ 751,000. The average balance of
securities was $23.0 million during the three months ended June 30, 2006 as
compared to $23.7 million for the three months ended June 30, 2005. Interest
income from other interest-earning assets increased $2,000, or 17.4% to $16,000
for the three months ended June 30, 2006, from $14,000 for the three months
ended June 30, 2005. The increase in interest income from other interest-earning
assets was due to an increase in the average yield to 4.3 % in 2006 from 3.14%
in 2005, sufficient to offset a decrease in the average balance to $1.5 million
in 2006 from $1.8 million in 2005.
INTEREST EXPENSE. Total interest expense increased $229,000, or 57.4%,
to $627,000 for the three months ended June 30, 2006, from $398,000 for the
three months ended June 30, 2005. The interest expense on interest-bearing
deposits increased by $99,000 or 40.2% to $344,000 in 2006 when compared with
$245,000 in the comparable 2005 period. The increase in interest expense on
deposits resulted from an increase in the average cost of interest-bearing
deposits to 2.55% from 1.78%, reflecting increasing market interest rates during
the period between the comparable quarters. Partially offsetting this increase
was a decrease in the average balance of interest-bearing deposits to $54.0
million in 2006 from $55.0 million in 2005.
-11-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND
2005 (CONT'D.)
The interest expense on borrowed money increased $130,000 or 85.0% to
$283,000 in 2006 from $153,000 in the comparable 2005 period. The increase
resulted from an increase of $8.0 million in the average balance of borrowed
money to $26.7 million in 2006 from $18.6 million in 2005 and an increase in
cost of borrowed money to 4.25% in 2006 from 3.28% in 2005.
NET INTEREST INCOME. Net interest income decreased $93,000, or 13.3%,
to $605,000 for the three months ended June 30, 2006 from $698,000 for the three
months ended June 30, 2005. Our interest rate spread decreased to 2.21% in 2006
from 2.96% in 2005, reflecting a 95 basis points increase in the cost of our
interest bearing liabilities that exceeded a 20 basis point increase in yield on
interest-earning assets. Our net interest margin decreased to 2.61% from 3.26%.
PROVISION FOR LOAN LOSSES. We establish provisions for loan losses,
which are charged to operations, at a level necessary to absorb known and
inherent losses that are both probable and reasonably estimable at the date of
the financial statements. In evaluating the level of the allowance for loan
losses, management considers historical loss experience, the types of loans and
the amount of loans in the loan portfolio, adverse situations that may affect
the borrower's ability to repay, the estimated value of any underlying
collateral, and prevailing economic conditions. This evaluation is inherently
subjective as it requires estimates that are susceptible to significant revision
as more information becomes available or as future events change. Based on our
evaluation of these factors, a provision of $116 for loan losses was required
for the three months ended June 30, 2006. Management recovered $9,000 in
provision for loan losses for the three months ended June 30, 2005. We had no
charge-offs during the three month periods ended June 30, 2006 and 2005. We used
the same methodology and generally similar assumptions in assessing the
allowance for both periods. The allowance for loan losses was $162,000, or 0.23%
of gross loans outstanding at June 30, 2006, as compared with $174,000, or 0.28%
of gross loans outstanding at June 30, 2005. The level of the allowance is based
on estimates, and the ultimate losses may vary from the estimates.
NON-INTEREST INCOME. Non-interest income decreased 23.1%, to $25,000
for the three months ended June 30, 2006, as compared to $32,000 for the three
months ended June 30, 2005. The primary reason for the decrease in non-interest
income was a decrease of $7,000 in fees and service charges.
NON-INTEREST EXPENSES. Non-interest expenses were $476,000 and $469,000
for the three months ended June 30, 2006 and 2005, respectively, representing an
increase of $7,000 or 1.4%. The increase in non-interest expenses is due to
increases of $8,000 in salary expenses, and $6,000 in equipment, offset by a
decrease of $6,000 in advertising expenses.
Advertising expenses decreased $6,000 or 36.1% to $11,000 in 2006 from
$16,000 in 2005. Equipment expenses increased $6,000 or 12.0% to $56,000 in 2006
from $50,000 in 2005.
-12-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND
2005 (CONT'D.)
INCOME TAX EXPENSE. The provision for income taxes decreased to $59,000
for the three months ended June 30, 2006 from $106,000 for the three months
ended June 30, 2005. The decrease in the provision for income taxes is primarily
due to a decrease of $116,000 in income before income taxes to $153,000 for the
three months ended June 30, 2006, as compared to $270,000 for the three months
ended June 30, 2005.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
GENERAL. Net income decreased $103,000, or 36.2%, to $181,000 for the
six months ended June 30, 2006, compared with $284,000 for the same 2005 period.
The decrease in net income during the 2006 period resulted primarily from an
increase in interest expense and non-interest expense, partially offset by
increases in total interest income and decreases in income taxes.
INTEREST INCOME. Interest income increased $284,000 or 13.3%, to $2.4
million for the six months ended June 30, 2006, from $2.1 million for the six
months ended June 30, 2005. The increase in interest income was primarily due to
an increase of $276,000 in interest income from loans.
Interest income from loans increased by $276,000, or 17.4%, to $1.9
million for the six months ended June 30, 2006, from $1.6 million for the same
2005 period. The increase was due to an $8.0 million or 13.6% increase in the
average balance of loans to $67.0 million in 2006 from $59.0 million in 2005.
The average yield on loans increased to 5.54% in 2006 from 5.37% in 2005.
Interest income from securities, including available for sale and held to
maturity, increased $7,000, or 1.3%, to $527,000 for the six months ended June
30, 2006, from $520,000 for the six months ended June 30, 2005. The average
balance of securities decreased to $23.0 million in 2006 when compared to $23.7
million in 2005. The decrease in the average balance of securities was offset by
an increase of 19 basis points in the average yield. The average yield on
securities for the six months ended June 30, 2006 was 4.59% when compared to
4.40% for the same period in 2005. Interest income from other interest-earning
assets increased $2,000 or 5.6% to $27,000 for the six months ended June 30,
2006 when compared to $25,000 for the six months ended June 30, 2005. The
average balance of other interest earning assets decreased to $1.7 million
during the six months ended June 30, 2006, when compared to $2.3 million during
the six months ended in June of 2005, partially offset by an increase in the
average yield. The average yield on other interest earning assets for the six
months ended June 30, 2006 was 3.14% when compared to 2.20 % for the same period
in 2005.
INTEREST EXPENSE. Total interest expense increased $420,000, or 55.0%,
to $1.2 million for the six months ended June 30, 2006, from $766,000 for the
six months ended June 30, 2005. The interest expense on interest-bearing
deposits increased by $175,000 or 36.6% to $653,000 in 2006 when compared with
$478,000 in the comparable 2005 period. The increase in interest expense
resulted from an increase in the average cost of interest-bearing deposits to
2.43% from 1.73%, reflecting an increase in market interest rates during the
period between the comparable periods. Partially offsetting this increase was a
decrease in the average balance of interest-bearing deposits to $53.7 million in
2006 from $55.4 million in 2005. The interest expense on borrowed money
increased $245,000 or 85.0% to $533,000 in 2006 from $288,000 in the comparable
2005 period. The increase resulted from an increase of $8.2 million in the
average balance of borrowed money to $25.9 million in 2006 from $17.7 million in
2005, as well as an increase of 87 basis points in the cost of borrowed money to
4.12% in 2006 from 3.25% in 2005.
-13-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(CONT'D.)
NET INTEREST INCOME. Net interest income decreased $136,000, or 10.0%,
to $1.2 million for the six months ended June 30, 2006 from $1.4 million for the
six months ended June 30, 2005. Our interest rate spread decreased to 2.28% in
2006 from 2.92% in 2005, reflecting an increase of 88 basis points in the cost
of our interest-bearing liabilities that exceeded an increase of 25 basis points
in the yield on interest-earning assets. Our net interest margin decreased to
2.68% from 3.21%. The decrease was primarily due to an increase in total
interest expense of $420,000, which was partially offset by an increase of
$284,000 in total interest income.
PROVISION FOR LOAN LOSSES. Based on our evaluation, we recorded
provision for loan losses of $3,600 for the six months ended June 30, 2006, and
$18,000 for the six months ended June 30, 2005. We had no charge-offs during the
six month periods ended June 30, 2006 and 2005. We used the same methodology and
generally similar assumptions in assessing the allowance for both periods. The
allowance for loan losses was $162,000, or 0.23% of gross loans outstanding at
June 30, 2006, as compared with $174,000, or 0.28% of gross loans outstanding at
June 30, 2005. The level of the allowance is based on estimates, and the
ultimate losses may vary from the estimates.
NON-INTEREST INCOME. Non-interest income increased $10,000, or 21.0%,
to $58,000 for the six months ended June 30, 2006, as compared to $48,000 for
the six months ended June 30, 2005. The increase in non-interest income was
primarily due to a gain of $10,000 on the sale of available for sale securities,
as compared to a loss of $7,000 on the call of securities held to maturity in
2005. Fees and service charges and other miscellaneous income decreased by
$7,000 or 13.2% for the six months ended June 30, 2006 when compared with the
same period in June 2005.
NON-INTEREST EXPENSES. Non-interest expenses were $990,000 and $928,000
for the six months ended June 30, 2006 and 2005, respectively, representing an
increase of $62,000 or 6.7%. The increase in non-interest expenses was primarily
due to increases of $45,000 in other non-interest expense, $19,000 in salaries
and employee benefits and $14,000 in equipment expense. This increase was offset
by decreases of $9,000 in advertising expenses and $7,000 in occupancy expense.
Miscellaneous expenses increased $45,000 or 13.4% to $380,000 in 2006
from $335,000 in 2005, primarily due to expenses associated with the
implementation of the stock-based incentive plan, directors' retirement plan,
and additional legal expenses.
INCOME TAX EXPENSE. The provision for income taxes decreased to
$111,000 for the six months ended June 30, 2006 from $182,000 for the six months
ended June 30, 2005. The decrease in the provision for income taxes is primarily
due to a decrease in income before income taxes of $173,000 to $292,000 for the
six months ended June 30, 2006, as compared to $466,000 for the six months ended
June 30, 2005.
-14-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
MANAGEMENT OF MARKET RISK
GENERAL. The majority of our assets and liabilities are monetary in
nature. Consequently, our most significant form of market risk is interest rate
risk. Our assets, consisting primarily of mortgage loans, have longer maturities
than our liabilities, consisting primarily of deposits. As a result, a principal
part of our business strategy is to manage interest rate risk and reduce the
exposure of our net interest income to changes in market interest rates. Our
full board of directors is responsible for evaluating the interest rate risk
inherent in our assets and liabilities, for determining the level of risk that
is appropriate, given our business strategy, operating environment, capital,
liquidity and performance objectives, and for managing this risk consistent with
the guidelines approved by the board of directors. Senior management monitors
the level of interest rate risk and reports to the board of directors on a
regular basis with respect to our asset/liability policies and interest rate
risk position.
We have emphasized the origination of fixed-rate mortgage loans for
retention in our portfolio in order to maximize our net interest income. We
accept increased exposure to interest rate fluctuations as a result of our
investment in such loans. In a period of rising interest rates, our net interest
rate spread and net interest income may be negatively affected. In addition, we
have sought to manage and mitigate our exposure to interest rate risks in the
following ways:
o We maintain moderate levels of short-term liquid assets. At June 30,
2006, our short-term liquid assets totaled $3.0 million;
o We originate for portfolio adjustable-rate mortgage loans and
adjustable home equity lines of credit. At June 30, 2006, our
adjustable-rate mortgage loans totaled $14.7 million and our adjustable
home equity lines of credit totaled $6.5 million;
o We attempt to increase the maturity of our liabilities as market
conditions allow. In particular, since 2004, we have emphasized
intermediate- to long-term FHLB advances as a source of funds. At June
30, 2006 we had $5.5 million of FHLB advances with terms to maturity of
between three and fifteen years; and
o We invest in securities with step-up rate features providing for
increased interest rates prior to maturity according to a
pre-determined schedule and formula. However, these step-up rates may
not keep pace with rising interest rates in the event of a rapidly
rising rate environment. In addition, these investments may be called
at the option of the issuer.
Net Portfolio Value. The Company utilizes an outside vendor to prepare
the computation of accounts by which the net present value of the Bank's cash
flow from assets, liabilities and off-balance sheet items (the Bank's net
portfolio value or "NPV") would change in the event of a range of assumed
changes in market interest rates. The vendor provides the Company with an
interest rate sensitivity report of net portfolio value by utilizing a
simulation model that uses a discounted cash flow analysis and an option-based
pricing approach to measuring the interest rate sensitivity of net portfolio
value. The model estimates the economic value of each type of assets, liability
and off-balance sheet contracts under the assumption that the yield curve
increases or decreases instantaneously by 100 and 200 basis points. A basis
point equals one-hundredth of one percent, and 100 basis points equals one
percent. An increase in interest rates from 3% to 5% would mean, for example, a
200 basis point increase in the change of interest rates.
-15-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
MANAGEMENT OF MARKET RISK (CONT'D.)
The following table sets forth the Bank's NPV as of June 30, 2006, the
most recent date the Bank's NPV was calculated.
CHANGE IN NET PORTFOLIO VALUE
--------------------- ---------------------------------------------- NET PORTFOLIO VALUE AS A PERCENTAGE
INTEREST RATES OF PRESENT VALUE OF ASSETS
--------------------- -------------------------------------
(BASIS POINTS)
---------------------
ESTIMATED AMOUNT OF PERCENT OF NPV RATIO CHANGE IN BASIS
NPV CHANGE CHANGE ------------- POINTS
-------------- -------------- --------------- -------------------
(DOLLARS IN THOUSANDS)
+200 $ 12,796 $ (2,791) (17.9)% 15.34% (224)basis points
+100 14,461 (1,126) (7.2) 16.64 (94)basis points
0 15,857 -- -- 17.58 -- basis points
-100 17,065 1,478 9.5 18.25 67 basis points
-200 17,870 2,283 14.6 18.50 92 basis points
The table above indicates that at June 30, 2006 in the event of a 200
basis point decrease in interest rates, we would experience a 14.6% increase in
net portfolio value. In the event of a 200 basis point increase in interest
rates, we would experience a 17.9% decrease in net portfolio value.
Certain shortcomings are inherent in the methodology used in the above
interest rate risk measurement. Modeling changes in net portfolio value require
making certain assumptions that may or may not reflect the manner in which
actual yields and costs respond to changes in market interest rates. In this
regard, the net portfolio value table presented assumes that the composition of
our interest-sensitive assets and liabilities existing at the beginning of a
period remains constant over the period being measured and assumes that a
particular change in interest rates is reflected uniformly across the yield
curve regardless of the duration or repricing of specific assets and
liabilities. Accordingly, although the net portfolio value table provides an
indication of our interest rate risk exposure at a particular point in time,
such measurements are not intended to and do not provide a precise forecast of
the effect of changes in market interest rates on its net interest income and
will differ from actual results.
LIQUIDITY AND CAPITAL RESOURCES
The Bank is required to maintain levels of liquid assets sufficient to ensure
the Bank's safe and sound operation. Liquidity is the ability to meet current
and future financial obligations of a short-term nature. The Bank adjusts its
liquidity levels in order to meet funding needs for deposit outflows, payment of
real estate taxes from escrow accounts on mortgage loans, repayment of
borrowings, when applicable, and loan funding commitments. The Bank also adjusts
its liquidity level as appropriate to meet its asset/liability objectives.
The Bank's primary sources of funds are deposits, amortization and prepayments
of loans and mortgage-backed securities principal, FHLB advances, maturities of
investment securities and funds provided from operations. While scheduled loan
and mortgage-backed securities amortization and maturing investment securities
are a relatively predictable source of funds, deposit flow and loan and
mortgage-backed securities prepayments are greatly influenced by market interest
rates, economic conditions and competition.
The Bank's liquidity, represented by cash and cash equivalents, is a product of
its operating, investing and financing activities.
-16-
LINCOLN PARK BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (CONT'D.)
The primary sources of investing activity are lending and the purchase of
mortgage-backed securities. Net loans amounted to $69.0 million and $66.4
million at June 30, 2006 and December 31, 2005, respectively. Securities
available for sale totaled $2.5 million and $3.0 million at June 30, 2006 and
December 31, 2005, respectively. Securities held to maturity totaled $19.0
million and $18.8 million at June 30, 2006 and December 31, 2005, respectively.
In addition to funding new loan production and securities purchases through
operating and financing activities, such activities were funded by principal
repayments on existing loans, mortgage-backed securities, and borrowings from
FHLB.
Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments,
such as federal funds and interest-bearing deposits. If the Bank requires funds
beyond its ability to generate them internally, borrowing agreements exist with
the FHLB which provide an additional source of funds. At June 30, 2006 advances
from the FHLB amounted to $28.0 million.
The Bank anticipates that it will have sufficient funds available to meet its
current loan commitments. At June 30, 2006, the Bank had outstanding commitments
to originate loans of $704,000, and unused lines of credit of $8.4 million.
Certificates of deposit scheduled to mature in one year or less at June 30,
2006, totaled $19.5 million. Management believes that, based upon its experience
and the Bank's deposit flow history, a significant portion of such deposits will
remain with the Bank.
The following table sets forth the Bank's capital position at June 30, 2006, as
compared to the minimum regulatory capital requirements:
To Be Well
Capitalized
Under Prompt
Minimum Capital Corrective
Actual Requirements Actions Provisions
---------------------- --------------------- ---------------------
Amount Ratio Amount Ratio Amount Ratio
------- ------- ------- -------- ------- -------
(dollars in thousands)
Total Capital
(to risk-weighted assets) $ 9,577 18.54% $ 4,133 8.00% $ 5,166 10.00%
Tier 1 Capital
(to risk-weighted assets) 9,415 18.23% - - 3,099 6.00%
Core (Tier 1) Capital
(to average total assets) 9,415 10.23% 3,683 4.00% 4,603 5.00%
Tangible Capital
(to adjusted average assets) 9,415 10.23% 1,381 1.50% - -
-17-
LINCOLN PARK BANCORP AND SUBSIDIARY
CONTROLS AND PROCEDURES
-----------------------------------
ITEM 3.
Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) as of the end of the period covered by this report. Based
upon that evaluation, the Chief Executive Officer and the Chief Financial
Officer has concluded that, as of the end of the period covered by this report,
our disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports that the Company files or submits under
the Securities Exchange Act of 1934, is recorded, processed, summarized and
reported within the applicable time periods specified by the SEC's rules and
forms. There has been no change in the Company's internal control over financial
reporting during the Company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
-18-
LINCOLN PARK BANCORP
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
Neither the Company nor the Bank is involved in any pending legal
proceedings other than routine legal proceedings occurring in the
ordinary course of business, which involve amounts in the aggregate
believed by management to be immaterial to the financial condition of
the Company and the Bank.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
-----------------------------------------------------------
a) Not applicable
b) Not applicable
c) Information regarding the Company's purchases of its equity
securities (common stock) during the three months ended June 30,
2006 is summarized below:
-------------------------------- ------------------- ------------------- ---------------------- ----------------------
Total Number Average Price Total Number of Maximum
of Shares Paid For Shares Purchased Number of Shares
Purchased Shares Under a Publicly That May Yet Be
Announced Purchased Under
Repurchase Plan Repurchased Plan
-------------------------------- ------------------- ------------------- ---------------------- ----------------------
April 1 - April 30 - - - -
-------------------------------- ------------------- ------------------- ---------------------- ----------------------
May 1 - May 31 17,584 $10.11 17,584 -
-------------------------------- ------------------- ------------------- ---------------------- ----------------------
June 1 - June 30 - - - -
-------------------------------- ------------------- ------------------- ---------------------- ----------------------
As of June 30, 2006, the Company has purchased 36,289 shares to
fund the restricted stock of the Company's 2005 Stock-Based
Incentive Plan.
ITEM 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The annual meeting of stockholders of the registrant was held on
April 20, 2006. At the meeting, the stockholders elected David G.
Baker and John F. Feeney to three-year terms as directors of the
Company. Also at the meeting, Beard Miller Company LLP was ratified
as the Company's independent auditors. The results of the voting for
each matter considered were as follows:
(a) The election as director to serve for a term of three years
until a successor has been elected and qualified.
FOR WITHHELD
--------- --------
David G. Baker 1,748,391 42,202
John F. Feeney 1,748,526 42,067
- 19 -
LINCOLN PARK BANCORP
(b) The appointment of Beard Miller Company LLP as auditors of the
Company for the fiscal year ending December 31, 2006.
FOR WITHHELD ABSTAIN
-------------- -------- -------
1,788,093 2,000 -0-
In addition, the following directors, in addition to those elected,
continue to serve as directors after the annual meeting of
stockholders:
Stanford Stoller
Edith M. Perrotti
William H. Weisbrod
ITEM 5. Other Information
-----------------
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
The following Exhibits are filed as part of this report.
11.0 Computation of earnings per share.
31.1 Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief
Financial Officer Pursuant to n 906 of the Sarbanes-Oxley
Act of 2002.
-20-
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.
LINCOLN PARK BANCORP
Date: AUGUST 14, 2006 /s/ EDITH M. PERROTTI
--------------------- ------------------------------
Edith M. Perrotti
Interim President and Chief
Executive Officer
Date: AUGUST 14, 2006 /s/ NANDINI MALLYA
--------------------- ------------------------------
Nandini Mallya
Vice President and Treasurer
(Principal Accounting Officer and
Interim Chief Financial Officer)