Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20429
FORM 10-Q
(Mark
One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2010
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 0-29709
HARLEYSVILLE
SAVINGS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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Pennsylvania
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23-3028464 |
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
271 Main Street, Harleysville, Pennsylvania 19438
(Address of principal executive offices)
(Zip Code)
(215) 256-8828
(Registrants telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate
Web site, if any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation
S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was
required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definition of large
accelerated filer accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes þ No
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date:
Common Stock, $.01 Par Value, 3,663,509 shares outstanding as of May 14, 2010
HARLEYSVILLE SAVINGS FINANCIAL CORPORATION
Index
Harleysville Savings Financial Corporation
Unaudited Consolidated Statements of Financial Condition
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March 31, |
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September 30, |
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(In thousands, except share data) |
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2010 |
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2009 |
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Assets |
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Cash and amounts due from depository institutions |
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$ |
3,066 |
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$ |
3,222 |
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Interest bearing deposits |
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12,157 |
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6,220 |
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Total cash and cash equivalents |
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15,223 |
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9,442 |
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Investment securities held to maturity (fair value
March 31, $116,415; September 30, $106,174) |
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115,773 |
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105,194 |
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Investment securities available-for-sale at fair value |
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3,888 |
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6,728 |
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Mortgage-backed securities held to maturity (fair value
March 31, $150,609; September 30, $169,210) |
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144,556 |
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162,430 |
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Mortgage-backed securities available-for-sale at fair value |
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802 |
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|
785 |
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Loans receivable (net of allowance for loan losses
March 31, $2,330; September 30, $2,094) |
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511,495 |
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498,391 |
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Accrued interest receivable |
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3,611 |
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3,719 |
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Federal Home Loan Bank stock at cost |
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16,096 |
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16,096 |
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Foreclosed real estate |
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747 |
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Office properties and equipment, net |
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12,121 |
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10,486 |
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Prepaid expenses and other assets |
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19,509 |
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15,989 |
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TOTAL ASSETS |
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$ |
843,074 |
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$ |
830,007 |
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Liabilities and Stockholders Equity |
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Liabilities: |
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Deposits |
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$ |
491,574 |
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$ |
466,601 |
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Long-term debt |
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290,398 |
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309,046 |
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Accrued interest payable |
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1,457 |
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1,606 |
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Advances from borrowers for taxes and insurance |
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4,484 |
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1,445 |
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Accounts payable and accrued expenses |
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3,481 |
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1,170 |
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Total liabilities |
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791,394 |
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779,868 |
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Commitments and contingencies |
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Stockholders equity: |
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Preferred Stock: $.01 par value;
7,500,000 shares authorized; none issued |
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Common stock: $.01 par value; 15,000,000 shares authorized;
3,921,177 shares issued; outstanding March 31, 2010
3,660,892 shares
September 30, 2009 3,627,696 shares |
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39 |
|
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39 |
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Additional paid-in capital |
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8,039 |
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8,002 |
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Treasury
stock, at cost (March 31, 2010, 260,285 shares; September 30, 2009, 293,481 shares) |
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(3,747 |
) |
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(4,202 |
) |
Retained earnings partially restricted |
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47,321 |
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46,329 |
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Accumulated other comprehensive income (loss) |
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28 |
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(29 |
) |
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Total stockholders equity |
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51,680 |
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50,139 |
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
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$ |
843,074 |
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$ |
830,007 |
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See notes to unaudited consolidated financial statements.
page -1-
Harleysville Savings Financial Corporation
Unaudited Consolidated Statements of Income
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For the Three Months Ended |
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For the Six Months Ended |
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March 31, |
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March 31, |
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(In thousands, except per share data) |
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2010 |
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2009 |
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2010 |
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2009 |
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Interest Income: |
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Interest on mortgage loans |
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$ |
4,992 |
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$ |
5,096 |
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$ |
10,076 |
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$ |
10,105 |
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Interest on commercial loans |
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976 |
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740 |
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1,915 |
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1,449 |
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Interest on mortgage-backed securities |
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1,772 |
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2,409 |
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3,677 |
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4,955 |
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Interest on consumer and other loans |
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1,090 |
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1,188 |
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2,227 |
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2,495 |
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Interest on taxable investments |
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851 |
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|
743 |
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1,760 |
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|
1,562 |
|
Interest on tax-exempt investments |
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262 |
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|
325 |
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|
543 |
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|
656 |
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Dividends on investment securities |
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1 |
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3 |
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2 |
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8 |
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|
|
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Total interest income |
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9,944 |
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10,504 |
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|
20,200 |
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21,230 |
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Interest Expense: |
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Interest on deposits |
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2,273 |
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2,744 |
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4,808 |
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5,714 |
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Interest on borrowings |
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3,152 |
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|
3,403 |
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6,486 |
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6,974 |
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Total interest expense |
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5,425 |
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|
6,147 |
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11,294 |
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12,688 |
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Net Interest Income |
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4,519 |
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|
4,357 |
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|
8,906 |
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|
8,542 |
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Provision for loan losses |
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150 |
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|
100 |
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|
300 |
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|
|
200 |
|
|
|
|
|
|
|
|
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|
|
|
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|
Net Interest Income after Provision for Loan Losses |
|
|
4,369 |
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|
4,257 |
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|
8,606 |
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|
8,342 |
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Other Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Customer service fees |
|
|
152 |
|
|
|
158 |
|
|
|
313 |
|
|
|
336 |
|
Impairment of equity securities |
|
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|
(449 |
) |
|
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|
|
|
|
(449 |
) |
Gain on sale of investments |
|
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|
|
|
20 |
|
|
|
|
|
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|
20 |
|
Loss on sale of investments |
|
|
|
|
|
|
(11 |
) |
|
|
|
|
|
|
(11 |
) |
Income on bank-owned life insurance |
|
|
121 |
|
|
|
121 |
|
|
|
243 |
|
|
|
243 |
|
Other income |
|
|
185 |
|
|
|
184 |
|
|
|
404 |
|
|
|
355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income |
|
|
458 |
|
|
|
23 |
|
|
|
960 |
|
|
|
494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Other Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
1,762 |
|
|
|
1,580 |
|
|
|
3,431 |
|
|
|
3,195 |
|
Occupancy and equipment |
|
|
336 |
|
|
|
291 |
|
|
|
629 |
|
|
|
601 |
|
Deposit insurance premiums |
|
|
226 |
|
|
|
239 |
|
|
|
453 |
|
|
|
257 |
|
Data processing |
|
|
169 |
|
|
|
127 |
|
|
|
322 |
|
|
|
263 |
|
Other |
|
|
737 |
|
|
|
582 |
|
|
|
1,465 |
|
|
|
1,256 |
|
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|
|
|
|
|
|
|
|
|
|
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|
Total other expenses |
|
|
3,230 |
|
|
|
2,819 |
|
|
|
6,300 |
|
|
|
5,572 |
|
|
|
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|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income Taxes |
|
|
1,597 |
|
|
|
1,461 |
|
|
|
3,266 |
|
|
|
3,264 |
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Income tax expense |
|
|
437 |
|
|
|
258 |
|
|
|
892 |
|
|
|
685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
1,160 |
|
|
$ |
1,203 |
|
|
$ |
2,374 |
|
|
$ |
2,579 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
Basic Earnings Per Share |
|
$ |
0.32 |
|
|
$ |
0.33 |
|
|
$ |
0.65 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
Diluted Earnings Per Share |
|
$ |
0.32 |
|
|
$ |
0.33 |
|
|
$ |
0.65 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Dividends Per Share |
|
$ |
0.19 |
|
|
$ |
0.18 |
|
|
$ |
0.38 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
See notes to unaudited consolidated financial statements.
page -2-
Harleysville Savings Financial Corporation
Unaudited Consolidated Statements of Comprehensive Income
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Three Months Ended |
|
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|
March 31, |
|
(In thousands) |
|
2010 |
|
|
2009 |
|
Net Income |
|
$ |
1,160 |
|
|
$ |
1,203 |
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on securities available for sale, net of tax expense
2010, $28; 2009, ($66) and reclassifications |
|
|
56 |
(1) |
|
|
128 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Income |
|
$ |
1,216 |
|
|
$ |
1,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
(1) Disclosure of reclassification amount, net of tax for the three months ended: |
|
|
|
|
|
|
|
|
Net unrealized gain (loss) arising during the three months ended |
|
$ |
84 |
|
|
$ |
(246 |
) |
Reclassification adjustment for net losses (gains) included in net income |
|
|
|
|
|
|
440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84 |
|
|
|
194 |
|
Tax expense |
|
|
(28 |
) |
|
|
(66 |
) |
|
|
|
|
|
|
|
Net unrealized gain on securities available for sale |
|
$ |
56 |
|
|
$ |
128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
March 31, |
|
(In thousands) |
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
2,374 |
|
|
$ |
2,579 |
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on securities available for sale, net of tax expense
(benefit) 2010, $29; 2009, ($2) and reclassifications |
|
|
57 |
(1) |
|
|
(4) |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Income |
|
$ |
2,431 |
|
|
$ |
2,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
(1) Disclosure of reclassification amount, net of tax for the six months ended: |
|
|
|
|
|
|
|
|
Net unrealized gain (loss) arising during the six months ended |
|
$ |
86 |
|
|
$ |
(446 |
) |
Reclassification adjustment for net losses included in net income |
|
|
|
|
|
|
440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86 |
|
|
|
(6 |
) |
Tax (expense) benefit |
|
|
(29 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
Net unrealized gain on securities available for sale |
|
$ |
57 |
|
|
$ |
(4 |
) |
|
|
|
|
|
|
|
See notes to unaudited consolidated financial statements.
page -3-
Harleysville Savings Financial Corporation
Unaudited Consolidated Statements of Stockholders Equity
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
|
|
|
|
|
|
|
|
Retained |
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
|
|
|
|
Additional |
|
|
Earnings- |
|
|
Other |
|
|
|
|
|
|
Total |
|
(In thousands, except share |
|
Shares |
|
|
Common |
|
|
Paid-in |
|
|
Partially |
|
|
Comprehensive |
|
|
Treasury |
|
|
Stockholders |
|
and per share data) |
|
Outstanding |
|
|
Stock |
|
|
Capital |
|
|
Restricted |
|
|
(Loss) / Income |
|
|
Stock |
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at October 1, 2009 |
|
|
3,627,696 |
|
|
$ |
39 |
|
|
$ |
8,002 |
|
|
$ |
46,329 |
|
|
$ |
(29 |
) |
|
$ |
(4,202 |
) |
|
$ |
50,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,374 |
|
|
|
|
|
|
|
|
|
|
|
2,374 |
|
Dividends $.38 per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,382 |
) |
|
|
|
|
|
|
|
|
|
|
(1,382 |
) |
Stock option compensation |
|
|
|
|
|
|
|
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81 |
|
Treasury Stock Purchase |
|
|
(5,659 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(77 |
) |
|
|
(77 |
) |
Treasury stock delivered under ESOP |
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137 |
|
|
|
137 |
|
Treasury stock delivered under reinvestment plan |
|
|
20,939 |
|
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
286 |
|
|
|
280 |
|
Employee options exercised |
|
|
7,916 |
|
|
|
|
|
|
|
(38 |
) |
|
|
|
|
|
|
|
|
|
|
109 |
|
|
|
71 |
|
Change in unrealized holding loss on
available-for-sale securities, net of
reclassification and tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57 |
|
|
|
|
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2010 |
|
|
3,660,892 |
|
|
$ |
39 |
|
|
$ |
8,039 |
|
|
$ |
47,321 |
|
|
$ |
28 |
|
|
$ |
(3,747 |
) |
|
$ |
51,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
|
|
|
|
|
|
|
|
Retained |
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
|
|
|
|
Additional |
|
|
Earnings- |
|
|
Other |
|
|
|
|
|
|
Total |
|
(In thousands, except share |
|
Shares |
|
|
Common |
|
|
Paid-in |
|
|
Partially |
|
|
Comprehensive |
|
|
Treasury |
|
|
Stockholders |
|
and per share data) |
|
Outstanding |
|
|
Stock |
|
|
Capital |
|
|
Restricted |
|
|
(Loss) / Income |
|
|
Stock |
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at October 1, 2008 |
|
|
3,567,934 |
|
|
$ |
39 |
|
|
$ |
7,993 |
|
|
$ |
44,235 |
|
|
$ |
(41 |
) |
|
$ |
(5,017 |
) |
|
$ |
47,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,579 |
|
|
|
|
|
|
|
|
|
|
|
2,579 |
|
Dividends $.36 per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,287 |
) |
|
|
|
|
|
|
|
|
|
|
(1,287 |
) |
Stock option compensation |
|
|
|
|
|
|
|
|
|
|
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70 |
|
Treasury stock delivered under ESOP |
|
|
10,000 |
|
|
|
|
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
137 |
|
|
|
120 |
|
Treasury stock delivered under reinvestment plan |
|
|
23,808 |
|
|
|
|
|
|
|
(41 |
) |
|
|
|
|
|
|
|
|
|
|
326 |
|
|
|
285 |
|
Employee options exercised |
|
|
1,667 |
|
|
|
|
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
23 |
|
|
|
16 |
|
Change in unrealized holding loss
on available-for-sale securities, net of
reclassification and tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2009 |
|
|
3,603,409 |
|
|
$ |
39 |
|
|
$ |
7,998 |
|
|
$ |
45,527 |
|
|
$ |
(45 |
) |
|
$ |
(4,531 |
) |
|
$ |
48,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to unaudited consolidated financial statements.
page -4-
Harleysville Savings Financial Corporation
Unaudited Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, |
|
(In thousands) |
|
2010 |
|
|
2009 |
|
Operating Activities: |
|
|
|
|
|
|
|
|
Net Income |
|
$ |
2,374 |
|
|
$ |
2,579 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
259 |
|
|
|
224 |
|
Provision for loan losses |
|
|
300 |
|
|
|
200 |
|
Realized gains on securities |
|
|
|
|
|
|
(9 |
) |
Loss on impairment of equity securities |
|
|
|
|
|
|
449 |
|
Loss on sale of foreclosed real estate |
|
|
159 |
|
|
|
|
|
Amortization of deferred loan fees |
|
|
58 |
|
|
|
25 |
|
Net amortization of premiums and discounts |
|
|
65 |
|
|
|
63 |
|
Increase in cash surrender value of bank owned life insurance |
|
|
(243 |
) |
|
|
(243 |
) |
Compensation charge on stock options |
|
|
81 |
|
|
|
70 |
|
Changes in assets and liabilities which provided (used) cash: |
|
|
|
|
|
|
|
|
Decrease in accounts payable and accrued expenses |
|
|
(489 |
) |
|
|
(980 |
) |
Increase in prepaid expenses and other assets |
|
|
(3,277 |
) |
|
|
(858 |
) |
Decrease in accrued interest receivable |
|
|
108 |
|
|
|
342 |
|
Decrease in accrued interest payable |
|
|
(149 |
) |
|
|
(129 |
) |
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
|
(754 |
) |
|
|
1,733 |
|
|
|
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
|
|
|
Purchase of mortgage-backed securities held to maturity |
|
|
(1,571 |
) |
|
|
|
|
Purchase of investment securities held to maturity |
|
|
(50,953 |
) |
|
|
|
|
Purchase of investment securities available-for-sale |
|
|
(30,900 |
) |
|
|
(10,563 |
) |
Net purchase of FHLB stock |
|
|
|
|
|
|
478 |
|
Proceeds from the redemption of investment securities available-for-sale |
|
|
33,780 |
|
|
|
9,912 |
|
Proceeds from maturities of investment securities held to maturity |
|
|
40,429 |
|
|
|
1,365 |
|
Proceeds from sale of foreclosed real estate |
|
|
588 |
|
|
|
|
|
Principal collected on mortgage-backed securities |
|
|
22,125 |
|
|
|
22,928 |
|
Principal collected on loans receivable |
|
|
55,161 |
|
|
|
64,116 |
|
Loans originated or acquired |
|
|
(68,623 |
) |
|
|
(70,854 |
) |
Purchases of premises and equipment |
|
|
(1,894 |
) |
|
|
(257 |
) |
|
|
|
|
|
|
|
Net cash (used in) provided by investing activities |
|
|
(1,858 |
) |
|
|
17,125 |
|
|
|
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
|
|
|
Net increase in demand deposits, NOW accounts
and savings accounts |
|
|
44,219 |
|
|
|
8,941 |
|
Net (decrease) increase in certificates of deposit |
|
|
(19,246 |
) |
|
|
5,039 |
|
Cash dividends |
|
|
(1,102 |
) |
|
|
(1,002 |
) |
Net decrease in short-term borrowings |
|
|
|
|
|
|
(21,800 |
) |
Proceeds from long-term debt |
|
|
|
|
|
|
24,500 |
|
Repayment of long-term debt |
|
|
(18,648 |
) |
|
|
(32,399 |
) |
Acquisition of treasury stock |
|
|
(77 |
) |
|
|
|
|
Treasury stock delivered under employee stock plans |
|
|
208 |
|
|
|
136 |
|
Net increase in advances from borrowers for taxes and insurance |
|
|
3,039 |
|
|
|
3,106 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
8,393 |
|
|
|
(13,479 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
5,781 |
|
|
|
5,379 |
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
|
|
9,442 |
|
|
|
9,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
|
$ |
15,223 |
|
|
$ |
14,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Interest (credited and paid) |
|
$ |
11,444 |
|
|
$ |
12,817 |
|
Income taxes |
|
|
925 |
|
|
|
1,203 |
|
|
|
|
|
|
|
|
|
|
Securities purchased and not settled |
|
$ |
2,800 |
|
|
$ |
|
|
See notes to consolidated financial statements.
page -5-
Harleysville Savings Financial Corporation
Notes to Unaudited Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of
Presentation The unaudited consolidated financial statements include the accounts of
Harleysville Savings Financial Corporation (the Company) and its subsidiary. Harleysville
Savings Bank (the Bank) is the wholly owned subsidiary of the Company. The accompanying
consolidated financial statements include the accounts of the Company, the Bank, and the Banks
wholly owned subsidiaries, HSB Inc, a Delaware corporation which was formed in order to hold
certain assets, Freedom Financial LLC that allows the Company to offer non deposit products and
HARL LLC that allows the Bank to invest in equity investments. All significant intercompany
accounts and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared in accordance with
the instructions for Form 10-Q and therefore do not include information or footnotes necessary for
a complete presentation of financial condition, results of operations and cash flows in conformity
with accounting principles generally accepted in the United States of America. However, all
adjustments (consisting only of normal recurring adjustments) which, in the opinion of management,
are necessary for a fair presentation of the consolidated financial statements have been included.
The results of operations for the three and six months ended March 31, 2010 are not necessarily
indicative of the results which may be expected for the entire fiscal year ending September 30,
2010 or any other period. The financial information should be read in conjunction with the
Companys Annual Report on Form 10-K for the period ended September 30, 2009.
Use of Estimates in Preparation of Consolidated Financial Statements
The preparation of consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of income
and expenses during the reporting period. The most significant of these estimates is the allowance
for loan losses, the determination of other-than-temporary impairment on securities and the
valuation of deferred tax assets. Actual results could differ from those estimates.
Reclassifications
Certain amounts in the prior periods financial statements have been reclassified to conform with
the current years classifications. The reclassifications had no effect on net income.
Subsequent Events
The Company has evaluated events and transactions occurring subsequent to the balance sheet date of
March 31, 2010 for items that should potentially be recognized or disclosed in these financial
statements.
page -6-
New Accounting Standards
In October 2009, the FASB issued ASU 2009-16, Transfers and Servicing (Topic 860) Accounting
for Transfers of Financial Assets. This Update amends the Codification for the issuance of FASB
Statement No. 166, Accounting for Transfers of Financial Assets-an amendment of FASB Statement No.
140. The amendments in this Update improve financial reporting by eliminating the exceptions for
qualifying special-purpose entities from the consolidation guidance and the exception that
permitted sale accounting for certain mortgage securitizations when a transferor has not
surrendered control over the transferred financial assets. In addition, the amendments require
enhanced disclosures about the risks that a transferor continues to be exposed to because of its
continuing involvement in transferred financial assets. Comparability and consistency in
accounting for transferred financial assets will also be improved through clarifications of the
requirements for isolation and limitations on portions of financial assets that are eligible for
sale accounting. This Update is effective at the start of a reporting entitys first fiscal year
beginning after November 15, 2009. Early application is not permitted. The Company is continuing
to evaluate the impact that the adoption of this new guidance will have on our financial position
and results of operations.
In October 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities. This Update amends
the Codification for the issuance of FASB Statement No. 167, Amendments to FASB Interpretation No.
46(R). The amendments in this Update replace the quantitative-based risks and rewards calculation
for determining which reporting entity, if any, has a controlling financial interest in a variable
interest entity with an approach focused on identifying which reporting entity has the power to
direct the activities of a variable interest entity that most significantly impact the entitys
economic performance and (1) the obligation to absorb losses of the entity or (2) the right to
receive benefits from the entity. An approach that is expected to be primarily qualitative will be
more effective for identifying which reporting entity has a controlling financial interest in a
variable interest entity. The amendments in this Update also require additional disclosures about
a reporting entitys involvement in variable interest entities, which will enhance the information
provided to users of financial statements. This Update is effective at the start of a reporting
entitys first fiscal year beginning after November 15, 2009. Early application is not permitted.
We do not expect the adoption of this new guidance to have an impact on our financial position or
result of operations.
page -7-
The FASB has issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements. This ASU requires some new disclosures and clarifies
some existing disclosure requirements about fair value measurement as set forth in Codification
Subtopic 820-10. The FASBs objective is to improve these disclosures and, thus, increase the
transparency in financial reporting. Specifically, ASU 2010-06 amends Codification Subtopic 820-10
to now require:
|
|
|
A reporting entity to disclose separately the amounts of significant transfers in
and out of Level 1 and Level 2 fair value measurements and describe the reasons for the
transfers; and |
|
|
|
In the reconciliation for fair value measurements using significant unobservable
inputs, a reporting entity should present separately information about purchases, sales,
issuances, and settlements. |
In addition, ASU 2010-06 clarifies the requirements of the following existing disclosures:
|
|
|
For purposes of reporting fair value measurement for each class of assets and
liabilities, a reporting entity needs to use judgment in determining the appropriate
classes of assets and liabilities; and |
|
|
|
A reporting entity should provide disclosures about the valuation techniques and inputs
used to measure fair value for both recurring and nonrecurring fair value measurements. |
ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15,
2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll
forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal
years beginning after December 15, 2010, and for interim periods within those fiscal years. Early
adoption is permitted. We do not expect the adoption of this standard to have an impact on our
financial position or results of operations.
ASU 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure
Requirements. The amendments in the ASU remove the requirement for an SEC filer to disclose a date
through which subsequent events have been evaluated in both issued and revised financial
statements. Revised financial statements include financial statements revised as a result of either
correction of an error or retrospective application of U.S. GAAP.
All of the amendments in the ASU were effective upon issuance (February 24, 2010).
The adoption of this new guidance did not have an impact on our financial position or result of
operations.
page -8-
2. INVESTMENT SECURITIES HELD TO MATURITY
A comparison of amortized cost and approximate fair value of investment securities held to
maturity with gross unrealized gains and losses, by maturities, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
(In Thousands) |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
U.S. Government Agencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due 1 year or less |
|
$ |
11,966 |
|
|
$ |
12 |
|
|
$ |
(8 |
) |
|
$ |
11,970 |
|
Due after 1 year through 5 years |
|
|
13,000 |
|
|
|
83 |
|
|
|
(11 |
) |
|
|
13,072 |
|
Due after 5 years through 10 years |
|
|
7,999 |
|
|
|
|
|
|
|
(34 |
) |
|
|
7,965 |
|
Due after 10 years through 15
years |
|
|
59,990 |
|
|
|
215 |
|
|
|
(274 |
) |
|
|
59,931 |
|
Due after 15 years |
|
|
2,432 |
|
|
|
134 |
|
|
|
|
|
|
|
2,566 |
|
Tax Exempt Obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due after 5 years through 10 years |
|
|
4,535 |
|
|
|
149 |
|
|
|
|
|
|
|
4,684 |
|
Due after 10 years through 15
years |
|
|
13,838 |
|
|
|
579 |
|
|
|
(44 |
) |
|
|
14,373 |
|
Due after 15 years |
|
|
2,013 |
|
|
|
|
|
|
|
(159 |
) |
|
|
1,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Securities |
|
$ |
115,773 |
|
|
$ |
1,172 |
|
|
$ |
(530 |
) |
|
$ |
116,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
(In Thousands) |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
U.S. Government Agencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due 1 year or less |
|
$ |
5,000 |
|
|
$ |
98 |
|
|
$ |
|
|
|
$ |
5,098 |
|
Due after 1 year through 5 years |
|
|
8,000 |
|
|
|
34 |
|
|
|
|
|
|
|
8,034 |
|
Due after 5 years through 10 years |
|
|
10,996 |
|
|
|
4 |
|
|
|
(80 |
) |
|
|
10,920 |
|
Due after 10 years through 15
years |
|
|
56,175 |
|
|
|
299 |
|
|
|
(278 |
) |
|
|
56,196 |
|
Due after 15 years |
|
|
2,431 |
|
|
|
178 |
|
|
|
|
|
|
|
2,609 |
|
Tax Exempt Obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due after 5 years through 10 years |
|
|
3,898 |
|
|
|
170 |
|
|
|
|
|
|
|
4,068 |
|
Due after 10 years through 15
years |
|
|
16,303 |
|
|
|
708 |
|
|
|
(3 |
) |
|
|
17,008 |
|
Due after 15 years |
|
|
2,391 |
|
|
|
|
|
|
|
(150 |
) |
|
|
2,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Securities |
|
$ |
105,194 |
|
|
$ |
1,491 |
|
|
$ |
(511 |
) |
|
$ |
106,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A summary of investments with unrealized losses, aggregated by category, at March 31, 2010 is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
|
Total |
|
(In Thousands) |
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
US Government agencies |
|
$ |
45,638 |
|
|
$ |
(327 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
45,638 |
|
|
$ |
(327 |
) |
Tax exempt obligations |
|
|
1,205 |
|
|
|
|
|
|
|
3,988 |
|
|
|
(203 |
) |
|
|
5,193 |
|
|
|
(203 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
46,843 |
|
|
$ |
(327 |
) |
|
$ |
3,988 |
|
|
$ |
(203 |
) |
|
$ |
50,831 |
|
|
$ |
(530 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2010, investment securities in a gross unrealized loss position consisted of 23
securities that at such date had an aggregate depreciation of 1.03% from the Companys amortized
cost basis. Management believes that the estimated fair value of the securities disclosed above is
primarily dependent upon the movement in market interest rates. Management evaluated the length of
time and the extent to which the fair value has been less than cost; the financial condition and
near term prospects of the issuer, including any specific events which may influence the operations
of the issuer. The Company does not have the intent to sell these securities prior to recovery and
the Company does not believe it will be required to sell such securities prior to recovery.
Management does not believe any individual unrealized loss as of March 31, 2010 represents an
other-than-temporary impairment.
A summary of investments with unrealized losses, aggregated by category, at September 30, 2009 is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
|
Total |
|
(In Thousands) |
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
US Government agencies |
|
$ |
29,637 |
|
|
$ |
(358 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
29,637 |
|
|
$ |
(358 |
) |
Tax exempt obligations |
|
|
1,000 |
|
|
|
(3 |
) |
|
|
3,036 |
|
|
|
(150 |
) |
|
|
4,036 |
|
|
|
(153 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
30,637 |
|
|
$ |
(361 |
) |
|
$ |
3,036 |
|
|
$ |
(150 |
) |
|
$ |
33,673 |
|
|
$ |
(511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
page -9-
3.
INVESTMENT SECURITIES AVAILABLE-FOR-SALE
A comparison of amortized cost and approximate fair value of investment securities available
for sale with gross unrealized gains and losses is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
(In Thousands) |
|
Cost |
|
|
Gain |
|
|
Losses |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities |
|
$ |
355 |
|
|
$ |
66 |
|
|
$ |
(41 |
) |
|
$ |
380 |
|
Money Market Mutual Funds |
|
|
3,508 |
|
|
|
|
|
|
|
|
|
|
|
3,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Securities |
|
$ |
3,863 |
|
|
$ |
66 |
|
|
$ |
(41 |
) |
|
$ |
3,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
(In Thousands) |
|
Cost |
|
|
Gain |
|
|
Losses |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities |
|
$ |
355 |
|
|
$ |
48 |
|
|
$ |
(92 |
) |
|
$ |
311 |
|
Money Market Mutual Funds |
|
|
6,417 |
|
|
|
|
|
|
|
|
|
|
|
6,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Securities |
|
$ |
6,772 |
|
|
$ |
48 |
|
|
$ |
(92 |
) |
|
$ |
6,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A summary of investments with unrealized losses, aggregated by category, at March 31, 2010 is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
|
Total |
|
(In Thousands) |
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
Equity Securities |
|
$ |
67 |
|
|
$ |
(22 |
) |
|
$ |
137 |
|
|
$ |
(19 |
) |
|
$ |
204 |
|
|
$ |
(41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2010 there were three equity securities in an unrealized loss position.
Management evaluated the length of time and the extent to which the market value has been less than
cost; the financial condition and near term prospects of the issuer, including any specific events
which may influence the operations of the issuer such as changes in technology that may impair the
earnings potential of the investment or the discontinuance of a segment of the business that may
affect the future earnings potential. The Company has the ability and intent to hold these
securities until the anticipated recovery of fair value occurs. Management does not believe any
individual unrealized loss as of March 31, 2010 represents an other-than-temporary impairment.
A summary of investments with unrealized losses, aggregated by category, at September 30, 2009 is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
|
Total |
|
(In Thousands) |
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
Equity Securities |
|
$ |
104 |
|
|
$ |
(43 |
) |
|
$ |
74 |
|
|
$ |
(49 |
) |
|
$ |
178 |
|
|
$ |
(92 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
page -10-
4. MORTGAGE-BACKED SECURITIES HELD TO MATURITY
A comparison of amortized cost and approximate fair value of mortgage-backed securities held
to maturity with gross unrealized gains and losses, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Approximate |
|
(In Thousands) |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized mortgage obligations |
|
$ |
10,219 |
|
|
$ |
93 |
|
|
$ |
(128 |
) |
|
$ |
10,184 |
|
FHLMC pass-through certificates |
|
|
55,088 |
|
|
|
2,804 |
|
|
|
|
|
|
|
57,892 |
|
FNMA pass-through certificates |
|
|
74,894 |
|
|
|
3,287 |
|
|
|
|
|
|
|
78,181 |
|
GNMA pass-through certificates |
|
|
4,355 |
|
|
|
|
|
|
|
(3 |
) |
|
|
4,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential mortgage-backed
securities |
|
$ |
144,556 |
|
|
$ |
6,184 |
|
|
$ |
(131 |
) |
|
$ |
150,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Approximate |
|
(In Thousands) |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized mortgage obligations |
|
$ |
11,681 |
|
|
$ |
54 |
|
|
$ |
(271 |
) |
|
$ |
11,464 |
|
FHLMC pass-through certificates |
|
|
65,005 |
|
|
|
3,270 |
|
|
|
|
|
|
|
68,275 |
|
FNMA pass-through certificates |
|
|
85,744 |
|
|
|
3,728 |
|
|
|
(1 |
) |
|
|
89,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential mortgage-backed securities |
|
$ |
162,430 |
|
|
$ |
7,052 |
|
|
$ |
(272 |
) |
|
$ |
169,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A summary of securities with unrealized losses, aggregated by category, at March 31, 2010 is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
|
Total |
|
(In Thousands) |
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
Mortgage-backed securities
held to maturity |
|
$ |
4,584 |
|
|
$ |
(24 |
) |
|
$ |
1,707 |
|
|
$ |
(107 |
) |
|
$ |
6,291 |
|
|
$ |
(131 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2010, mortgage-backed securities in a gross unrealized loss for less than twelve
months consisted of 5 securities that at such date had an aggregate depreciation of 0.52% from the
Companys amortized cost basis. At March 31, 2010, mortgage-backed securities in a gross
unrealized loss position for twelve months or longer consisted of one security that at such date
had an aggregate depreciation of 5.91% from the Companys amortized cost basis. Management
believes that the estimated fair value of the securities disclosed above is primarily dependent
upon the movement in market interest rates. Management evaluated the length of time and the extent
to which the fair value has been less than cost; the financial condition and near term prospects
of the issuer. The Company does not have the intent to sell these securities prior to recovery and
the Company does not believe it will be required to sell such securities prior to recovery.
Management does not believe any individual unrealized loss as of March 31, 2010 represents an
other-than-temporary impairment.
A summary of securities with unrealized losses, aggregated by category, at September 30, 2009 is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
|
Total |
|
(In Thousands) |
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Unrealized Losses |
|
Mortgage-backed securities
held to maturity |
|
$ |
2,264 |
|
|
$ |
(49 |
) |
|
$ |
6,576 |
|
|
$ |
(223 |
) |
|
$ |
8,840 |
|
|
$ |
(272 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
page -11-
5. MORTGAGE-BACKED SECURITIES AVAILABLE-FOR-SALE
A comparison of amortized cost and approximate fair value of mortgage-backed securities
available for sale with gross unrealized gains and losses, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
(In thousands) |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FNMA pass-through certificates |
|
$ |
785 |
|
|
$ |
17 |
|
|
$ |
|
|
|
$ |
802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Residential
Mortgage-Backed Securities |
|
$ |
785 |
|
|
$ |
17 |
|
|
$ |
|
|
|
$ |
802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
(In thousands) |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FNMA pass-through certificates |
|
$ |
785 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Residential
Mortgage-Backed Securities |
|
$ |
785 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. LOANS RECEIVABLE
Loans receivable consist of the following:
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
March 31, 2010 |
|
|
September 30, 2009 |
|
Residential Mortgages |
|
$ |
344,701 |
|
|
$ |
346,202 |
|
Construction |
|
|
5,856 |
|
|
|
2,912 |
|
Home Equity |
|
|
89,963 |
|
|
|
92,434 |
|
Commercial Mortgages |
|
|
60,210 |
|
|
|
48,958 |
|
Commercial Business Loans |
|
|
14,163 |
|
|
|
10,389 |
|
Consumer Non-Real Estate |
|
|
2,085 |
|
|
|
2,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
516,978 |
|
|
|
503,137 |
|
Undisbursed portion of loans in process |
|
|
(2,364 |
) |
|
|
(1,873 |
) |
Deferred loan fees |
|
|
(789 |
) |
|
|
(779 |
) |
Allowance for loan losses |
|
|
(2,330 |
) |
|
|
(2,094 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Receivable net |
|
$ |
511,495 |
|
|
$ |
498,391 |
|
|
|
|
|
|
|
|
The total amount of loans being serviced for the benefit of others was approximately $1,950,000 and
$2,550,000 at March 31, 2010 and September 30, 2009, respectively.
The following schedule summarizes the changes in the allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
(In thousands) |
|
March 31, 2010 |
|
|
March 31, 2009 |
|
|
March 31, 2010 |
|
|
March 31, 2009 |
|
Balance, beginning of period |
|
$ |
2,194 |
|
|
$ |
2,097 |
|
|
$ |
2,094 |
|
|
$ |
1,988 |
|
Provision for loan losses |
|
|
150 |
|
|
|
100 |
|
|
|
300 |
|
|
|
200 |
|
Recoveries |
|
|
4 |
|
|
|
2 |
|
|
|
6 |
|
|
|
17 |
|
Charge offs |
|
|
(18 |
) |
|
|
(6 |
) |
|
|
(70 |
) |
|
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of period |
|
$ |
2,330 |
|
|
$ |
2,193 |
|
|
$ |
2,330 |
|
|
$ |
2,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Federal Home Loan Bank Stock
Federal law requires a member institution of the Federal Home Loan Bank (FHLB) to hold stock of
its district FHLB according to a predetermined formula. The restricted stock is carried at cost. In
December 2008, the FHLB of Pittsburgh notified member banks that it was suspending dividend
payments and the repurchase of capital stock.
Managements determination of whether these investments are impaired is based on their assessment
of the ultimate recoverability of their cost rather than by recognizing temporary declines in
value. The determination of whether a decline affects the ultimate recoverability of their cost is
influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as
compared to the capital stock amount for the FHLB and the length of time this situation has
persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level
of such payments in relation to the operating performance of the FHLB, and (3) the impact of
legislative and regulatory changes on institutions and, accordingly, on the customer base of the
FHLB.
Management believes no impairment charge is necessary related to the FHLB restricted stock as of
March 31, 2010.
page -12-
8. DEPOSITS
Deposits are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
March 31, 2010 |
|
|
September 30, 2009 |
|
Non-interest bearing checking accounts |
|
$ |
14,309 |
|
|
$ |
12,364 |
|
NOW accounts |
|
|
21,859 |
|
|
|
16,818 |
|
Interest bearing checking accounts |
|
|
32,012 |
|
|
|
29,282 |
|
Money market demand accounts |
|
|
111,699 |
|
|
|
77,432 |
|
Passbook and club accounts |
|
|
3,176 |
|
|
|
2,940 |
|
Certificate of deposit accounts |
|
|
308,519 |
|
|
|
327,765 |
|
|
|
|
|
|
|
|
Total deposits |
|
$ |
491,574 |
|
|
$ |
466,601 |
|
|
|
|
|
|
|
|
The aggregate amount of certificate accounts in denominations of more than $100,000 at March 31,
2010 and September 30, 2009
amounted to approximately $57.1 million and $60.1 million, respectively.
9. COMMITMENTS
At March 31, 2010, the following commitments were outstanding:
|
|
|
|
|
|
|
(In thousands) |
|
Letters of credit |
|
$ |
456 |
|
Commitments to originate loans |
|
|
11,740 |
|
Unused portion of home equity lines of credits |
|
|
51,077 |
|
Unused portion of commercial lines of credits |
|
|
5,243 |
|
Undisbursed portion of construction loans in process |
|
|
2,169 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
70,685 |
|
|
|
|
|
Outstanding letters of credit written are conditional commitments issued by the Company to
guarantee the performance of a customer
to a third party. The majority of these standby letters of credit expire within the next twelve
months. The credit risk involved in issuing letters
of credit is essentially the same as that involved in extending other loan commitments. The
Company requires collateral supporting these letters
of credit as deemed necessary. Management believes that the proceeds obtained through a
liquidation of such collateral would be sufficient to cover
the maximum potential amount of future payments required under the corresponding guarantees. The
current amount of the liability as of
March 31, 2010 for guarantees under standby letters of credit issued is not material.
page -13-
10. EARNINGS PER SHARE
The following shares were used for the computation of earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Basic |
|
|
3,654,047 |
|
|
|
3,592,286 |
|
|
|
3,643,583 |
|
|
|
3,582,760 |
|
Diluted |
|
|
3,670,280 |
|
|
|
3,600,292 |
|
|
|
3,658,087 |
|
|
|
3,592,571 |
|
The difference between the number of shares used for computation of basic earnings per share and
diluted earnings per
share represents the dilutive effect of stock options.
11. LONG-TERM DEBT
Advances consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(In thousands) |
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
Interest |
|
Maturing Period |
|
Amount |
|
|
Rate |
|
|
Amount |
|
|
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 to 12 months |
|
$ |
19,999 |
|
|
|
4.52 |
% |
|
$ |
30,358 |
|
|
|
4.37 |
% |
13 to 24 months |
|
|
31,945 |
|
|
|
4.42 |
% |
|
|
16,849 |
|
|
|
4.34 |
% |
25 to 36 months |
|
|
46,184 |
|
|
|
4.30 |
% |
|
|
55,793 |
|
|
|
4.49 |
% |
37 to 48 months |
|
|
53,797 |
|
|
|
4.14 |
% |
|
|
37,189 |
|
|
|
4.00 |
% |
49 to 60 months |
|
|
3,697 |
|
|
|
3.58 |
% |
|
|
29,856 |
|
|
|
4.07 |
% |
61 to 72 months |
|
|
15,000 |
|
|
|
3.89 |
% |
|
|
19,031 |
|
|
|
3.82 |
% |
73 to 84 months |
|
|
35,000 |
|
|
|
4.86 |
% |
|
|
10,000 |
|
|
|
4.71 |
% |
85 to 120 months |
|
|
84,776 |
|
|
|
4.30 |
% |
|
|
109,970 |
|
|
|
4.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
290,398 |
|
|
|
4.33 |
% |
|
$ |
309,046 |
|
|
|
4.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank (FHLB) advances are collateralized by Federal Home Loan Bank stock and
substantially all first mortgage loans. The Company has a line of credit with the FHLB of which $0
out of $75.0 million was used at March 31, 2010 and September 30, 2009, respectively. Included in
the table above at March 31, 2010 and September 30, 2009 are convertible advances whereby the FHLB
has the option at a predetermined strike rate to convert the fixed interest rate to an adjustable
rate tied to London Interbank Offered Rate (LIBOR). The Company then has the option to repay
these advances if the FHLB converts the interest rate. These advances are included in the periods
in which they mature. The Company has a total FHLB borrowing capacity of $471.5 million of which
$240.4 was used as of March 31, 2010. In addition, there are three long-term advances from other
financial institutions totaling $50 million that are secured by investment and mortgage-backed
securities.
12. REGULATORY CAPITAL REQUIREMENTS
The Company and the Bank are subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain
mandatory and possibly additional discretionary actions by regulators that, if undertaken,
could have a direct material effect on the Companies consolidated financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company
and the Bank must meet specific capital guidelines that involve quantitative measures of assets,
liabilities and certain off-balance-sheet items as calculated under regulatory accounting
practices. The capital amounts and classification are also subject to qualitative judgments by
the regulators about components, risk weightings, and other factors. Quantitative measures
established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts
and ratios (set forth in the table below) of total Tier 1 capital (as defined in the regulations)
to risk weighted assets (as defined), and of Tier 1 capital (as defined) to assets (as defined).
Management believes, as of March 31, 2010, that the Bank meets all capital adequacy requirements
to which it is subject.
As of March 31, 2010, the most recent notification from the Federal Deposit Insurance Corporation
categorized the Bank as well capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based,
Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions
or events since that notification that management believes have changed the Banks category.
The Banks actual capital amounts and ratios are also presented in the table. The Companys capital
ratios are not significantly different than the Banks ratios disclosed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To Be Considered Well |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized Under |
|
|
|
|
|
|
|
|
|
|
|
For Capital |
|
|
Prompt Corrective |
|
|
|
Actual |
|
|
Adequacy Purposes |
|
|
Action Provisions |
|
|
|
Amount |
|
|
Ratio |
|
|
Amount |
|
|
Ratio |
|
|
Amount |
|
|
Ratio |
|
|
|
(In thousands) |
|
As of March 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Capital (to assets) |
|
$ |
51,638 |
|
|
|
6.18 |
% |
|
$ |
33,411 |
|
|
|
4.00 |
% |
|
$ |
41,763 |
|
|
|
5.00 |
% |
Tier 1 Capital (to risk weighted assets) |
|
|
51,638 |
|
|
|
11.13 |
% |
|
|
18,566 |
|
|
|
4.00 |
% |
|
|
27,849 |
|
|
|
6.00 |
% |
Total Capital (to risk weighted assets) |
|
|
53,979 |
|
|
|
11.63 |
% |
|
|
37,132 |
|
|
|
8.00 |
% |
|
|
46,415 |
|
|
|
10.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Capital (to assets) |
|
$ |
50,149 |
|
|
|
6.06 |
% |
|
$ |
33,103 |
|
|
|
4.00 |
% |
|
$ |
41,459 |
|
|
|
5.00 |
% |
Tier 1 Capital (to risk weighted assets) |
|
|
50,149 |
|
|
|
11.26 |
% |
|
|
17,809 |
|
|
|
4.00 |
% |
|
|
26,714 |
|
|
|
6.00 |
% |
Total Capital (to risk weighted assets) |
|
|
52,242 |
|
|
|
11.73 |
% |
|
|
35,618 |
|
|
|
8.00 |
% |
|
|
44,523 |
|
|
|
10.00 |
% |
page -14-
13. FAIR VALUES MEASUREMENTS AND DISCLOSURES
The Company uses fair value measurements to record fair value adjustments to certain assets and
liabilities and to determine fair value disclosures. In accordance with the new accounting guidance
adopted by the Company, effective October 1, 2008, the fair value of a financial instrument is the
price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Fair value is best determined
based upon quoted market prices. However, in many instances, there are no quoted market prices for
the Companys various financial instruments. In cases where quoted market prices are not
available, fair values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumption used, including the discount rate and
estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an
immediate settlement of the instrument.
The recent fair value guidance provides a consistent definition of fair value, which focuses on
exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between
market participants at the measurement date under current market conditions. If there has been a
significant decrease in the volume and level of activity for the asset or liability, a change in
valuation technique or the use of multiple valuation techniques may be appropriate. In such
instances, determining the price at which willing market participants would transact at the
measurement date under current market conditions depends on the facts and circumstances and
requires the use of significant judgment. The fair value is determined at a reasonable point
within the range that is most representative of fair value under current market conditions.
The primary effect of the new fair value measurements standard on the Company was to expand the
required disclosures pertaining to the methods used to determine fair values.
The new guidance establishes a fair value hierarchy that prioritizes the inputs to valuation
methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to unobservable inputs (Level 3 measurements). The three levels of the fair value
hierarchy under are as follows:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for
identical, unrestricted assets or liabilities.
Level 2: Quoted prices in markets that are not active, or inputs that are observable either
directly or indirectly, for substantially the full term of the asset or liability.
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair
value measurement and unobservable (i.e., supported with little or no market activity).
An assets or liabilitys level within the fair value hierarchy is based on the lowest level of
input that is significant to the fair value measurement.
For financial assets measured at fair value on a recurring basis, the fair value measurements by
level within the fair value hierarchy used at March 31, 2010
and September 30, 2009 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Level 1) |
|
|
(Level 2) |
|
|
|
|
|
|
|
|
|
|
Quoted Prices in |
|
|
Significant |
|
|
(Level 3) |
|
|
|
|
|
|
|
Active Markets |
|
|
Other |
|
|
Significant |
|
|
|
March 31, |
|
|
for Identical |
|
|
Observable |
|
|
Unobservable |
|
Description |
|
2010 |
|
|
Assets |
|
|
Inputs |
|
|
Inputs |
|
Investment securities available for sale |
|
$ |
3,888 |
|
|
$ |
3,888 |
|
|
$ |
|
|
|
$ |
|
|
Mortgage-backed securities available for sale |
|
|
802 |
|
|
|
|
|
|
|
802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,690 |
|
|
$ |
3,888 |
|
|
$ |
802 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Level 1) |
|
|
(Level 2) |
|
|
|
|
|
|
|
|
|
|
Quoted Prices in |
|
|
Significant |
|
|
(Level 3) |
|
|
|
|
|
|
|
Active Markets |
|
|
Other |
|
|
Significant |
|
|
|
September 30, |
|
|
for Identical |
|
|
Observable |
|
|
Unobservable |
|
Description |
|
2009 |
|
|
Assets |
|
|
Inputs |
|
|
Inputs |
|
Investment securities available for sale |
|
$ |
6,728 |
|
|
$ |
6,728 |
|
|
$ |
|
|
|
$ |
|
|
Mortgage-backed securities available for sale |
|
|
785 |
|
|
|
|
|
|
|
785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,513 |
|
|
$ |
6,728 |
|
|
$ |
785 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For financial assets measured at fair value on a nonrecurring basis, the fair value
measurements by level within the fair value hierarchy used at March 31, 2010 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using |
|
|
|
|
|
|
|
Quoted Prices |
|
|
Significant |
|
|
|
|
|
|
|
|
|
|
in Active |
|
|
Other |
|
|
Significant |
|
|
|
|
|
|
|
Markets for |
|
|
Observable |
|
|
Unobservable |
|
|
|
March 31, |
|
|
Identical Assets |
|
|
Inputs |
|
|
Inputs |
|
Description |
|
2010 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Impaired Loans |
|
$ |
266 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has no financial assets measured at fair value on a non-recurring basis at
September 30, 2009.
The following valuation techniques were used to measure fair value of the Companys financial
instruments in the tables above and below:
Cash and Cash Equivalents (Carried at Cost)
The carrying amounts reported in the balance sheet for cash and short-term instruments approximate
those assets fair values.
Securities
The fair value of securities available for sale (carried at fair value) and held to maturity
(carried at amortized cost) are determined by obtaining quoted market prices on nationally
recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical
technique used widely in the industry to value debt securities without relying exclusively on
quoted prices for the specific securities but rather by relying on the securities relationship to
other benchmark quoted prices.
page -15-
Loans Receivable (Carried at Cost)
The fair values of loans are estimated using discounted cash flow analyses, using market rates at
the balance sheet date that reflect the credit and interest rate-risk inherent in the loans.
Projected future cash flows are calculated based upon contractual maturity or call dates, projected
repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently
and with no significant change in credit risk, fair values are based on carrying values.
Impaired loans are those loans which the Company has measured impairment generally based on the
fair value of the loans collateral. Fair value is generally determined based upon independent
third-party appraisals of the properties, or discounted cash flows based upon the expected
proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input
that is significant to the fair value measurements. The fair value consists of the loan balances
of $313,000 less their specific valuation allowances of $47,000.
Federal Home Loan Bank Stock (Carried at Cost)
The carrying amount of this restricted investment in bank stock approximates fair value, and
considers the limited marketability of such securities.
Accrued Interest Receivable and Payable (Carried at Cost)
The carrying amount of accrued interest receivable and accrued interest payable approximates its
fair value.
Deposit Liabilities (Carried at Cost)
The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook
savings and money market accounts) are, by definition, equal to the amount payable on demand at the
reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit
are estimated using a discounted cash flow calculation that applies interest rates currently being
offered in the market on certificates to a schedule of a aggregated expected monthly maturities on
time deposits.
Borrowings (Carried at Cost)
Fair values of borrowings are estimated using discounted cash flow analysis, based on quoted prices
for new advances with similar credit risk characteristics, terms and remaining maturity. These
prices obtained from this active market represent a market value that is deemed to represent the
transfer price if the liability were assumed by a third party.
Off-Balance Sheet Financial Instruments (Disclosed at Cost)
Fair values for the Companys off-balance sheet financial instruments (lending commitments and
letters of credit) are based on fees currenctly charged in the market to enter into similar
agreements, taking into account, the remain terms of the agreements and the counterparies credit
standing. The fair value of these off-balance sheet finer instruments are not considered material
as of March 31, 2010 and September 30, 2009.
The estimated fair value amounts have been determined by the Company using available market
information appropriate valuation methodologies. However, considerable judgement is necessarily
required to interpret the data to develop the estimates.
The carrying amounts and estimated fair values of financial instruments are as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
Carrying |
|
|
Estimated Fair |
|
|
Carrying |
|
|
Estimated Fair |
|
(In Thousands) |
|
Amount |
|
|
Value |
|
|
Amount |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,223 |
|
|
$ |
15,223 |
|
|
$ |
9,442 |
|
|
$ |
9,442 |
|
Investment securities held to maturity |
|
|
115,773 |
|
|
|
116,415 |
|
|
|
105,194 |
|
|
|
106,174 |
|
Investment securities available-for-sale |
|
|
3,888 |
|
|
|
3,888 |
|
|
|
6,728 |
|
|
|
6,728 |
|
Mortgage-backed securities held to
maturity |
|
|
144,556 |
|
|
|
150,609 |
|
|
|
162,430 |
|
|
|
169,210 |
|
Mortgage-backed securities
available-for-sale |
|
|
802 |
|
|
|
802 |
|
|
|
785 |
|
|
|
785 |
|
Loans receivable net |
|
|
511,495 |
|
|
|
524,359 |
|
|
|
498,391 |
|
|
|
512,512 |
|
Federal Home Loan Bank Stock |
|
|
16,096 |
|
|
|
16,096 |
|
|
|
16,096 |
|
|
|
16,096 |
|
Accrued interest receivable |
|
|
3,611 |
|
|
|
3,611 |
|
|
|
3,719 |
|
|
|
3,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking, Passbook, Club and NOW
accounts |
|
|
71,356 |
|
|
|
71,356 |
|
|
|
61,404 |
|
|
|
61,404 |
|
Money Market Demand accounts |
|
|
111,699 |
|
|
|
111,699 |
|
|
|
77,432 |
|
|
|
77,432 |
|
Certificate of deposit accounts |
|
|
308,519 |
|
|
|
313,217 |
|
|
|
327,765 |
|
|
|
332,733 |
|
Borrowings |
|
|
290,398 |
|
|
|
309,837 |
|
|
|
309,046 |
|
|
|
331,330 |
|
Accrued interest payable |
|
|
1,457 |
|
|
|
1,457 |
|
|
|
1,606 |
|
|
|
1,606 |
|
Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and
information about the financial instrument. These estimates do not reflect any premium or discount
that could result from offering for sale at one time the Companys entire holdings of a particular
financial instrument. Because no market exists for a significant portion of the Companys financial
instruments, fair value estimates are based on many judgments. These estimates are subjective in
nature and involve uncertainties and matters of significant judgment and therefore cannot be
determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on and off-balance-sheet financial instruments without
attempting to estimate the value of anticipated future business and the value of assets and
liabilities that are not considered financial instruments. Significant assets and liabilities that
are not considered financial instruments include deferred income taxes and premises and equipment.
In addition, the tax ramifications related to the realization of the unrealized gains and losses
can have a significant effect on fair value estimates and have not been considered in the
estimates.
page -16-
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
This report contains certain forward-looking statements and information relating to the Company
that are based on the beliefs of management as well as assumptions made by and information
currently available to management. In addition, in those and other portions of this document, the
words anticipate, believe, estimate, intend, should and similar expressions, or the
negative thereof, as they relate to the Company or the Companys management, are intended to
identify forward-looking statements. Such statements reflect the current views of the Company with
respect to future-looking events and are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize or should underlying assumptions
prove incorrect, actual results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update these
forward-looking statements.
The Companys business consists of attracting deposits from the general public through a variety of
deposit programs and investing such deposits principally in first mortgage loans secured by
residential properties, commercial loans and commercial lines of credit in the Companys primary
market area. The Company also originates a variety of consumer loans, predominately home equity
loans and lines of credit also secured by residential properties in the Companys primary lending
area. The Company serves its customers through its full-service branch network as well as through
remote ATM locations, the internet and telephone banking.
Critical Accounting Policies and Judgments
The Companys consolidated financial statements are prepared based on the application of certain
accounting policies. Certain of these policies require numerous estimates and strategic or
economic assumptions that may prove inaccurate or subject to variations and may significantly
affect the Companys reported results and financial position for the period or in future periods.
Changes in underlying factors, assumptions, or estimates in any of these areas could have a
material impact on the Companys future financial condition and results of operations. The Company
believes the following critical accounting policies affect its more significant judgments and
estimates used in the preparation of the consolidated financial statements: allowance for loan
losses, and other-than-temporary security impairment.
Allowance for Loan Losses
Analysis and Determination of the Allowance for Loan Losses The allowance for loan losses is a
valuation allowance for probable losses inherent in the loan portfolio. The Company evaluates the
need to establish allowances against losses on loans on a monthly basis. When additional allowances
are necessary, a provision for loan losses is charged to earnings.
Our methodology for assessing the appropriateness of the allowance for loan losses consists of
three key elements: (1) specific allowances for certain impaired loans; (2) a general valuation
allowance on certain identified problem loans; and (3) a general valuation allowance on the
remainder of the loan portfolio. Although we determine the amount of each element of the allowance
separately, the entire allowance for loan losses is available for the entire portfolio.
Specific Allowance Required for Certain Impaired Loans: We establish an allowance for certain
impaired loans for the amounts by which the collateral value, present value of future cash flows or
observable market price are lower than the carrying value of the loan. Under current accounting
guidelines, a loan is defined as impaired when, based on current information and events, it is
probable that a creditor will be unable to collect all amounts due under the contractual terms of
the loan agreement.
General Valuation Allowance on Certain Identified Problem Loans We also establish a general
allowance for classified loans that do not have an individual allowance. We segregate these loans
by loan category and assign allowance percentages to each category based on inherent losses
associated with each type of lending and consideration that these loans, in the aggregate,
represent an above-average credit risk and that more of these loans will prove to be uncollectible
compared to loans in the general portfolio.
General Valuation Allowance on the Remainder of the Loan Portfolio We establish another general
allowance for loans that are not classified to recognize the inherent losses associated with
lending activities, but which, unlike specific allowances, has not been allocated to particular
problem assets. This general valuation allowance is determined by segregating the loans by loan
category and assigning allowance percentages based on our historical loss experience, delinquency
trends and managements evaluation of the collectibility of the loan portfolio. The allowance may
be adjusted for significant factors that, in managements judgment, affect the collectability of
the portfolio as of the evaluation date. These significant factors may include changes in lending
policies and procedures, changes in existing general economic and business conditions affecting our
primary lending areas, credit quality trends, collateral value, loan volumes and concentrations,
seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio,
duration of the current business cycle and bank regulatory examination results. The applied loss
factors are reevaluated monthly to ensure their relevance in the current economic environment.
page -17-
Other-than-Temporary Impairment of Investment Securities
Securities are evaluated periodically to determine whether a decline in their value is
other-than-temporary. Management utilizes criteria such as the magnitude and duration of the
decline, in addition to the reasons underlying the decline, to determine whether the loss in value
is other-than-temporary. The term other-than-temporary is not intended to indicate that the
decline is permanent, but indicates that the prospects for a near-term recovery of value are not
necessarily favorable, or that there is a lack of evidence to support realizable value equal to or
greater than the carrying value of the investment.
Changes in Financial Position for the Six-Month Period Ended March 31, 2010
Total assets at March 31, 2010 were $843.1 million, an increase of $13.1 million for the six-month
period then ended. The increase was primarily due to an increase in loans receivable of
approximately $13.1 million, an increase in cash and investments of approximately $13.5 million and
an increase of prepaid and other assets of approximately $3.5 million. Also, there has been an
increase in office property for the six-month period ended March 31, 2010 of $1.6 million due to
the opening of a new branch. These increases were offset by a decrease in mortgage-backed
securities totaling $17.9 million, due to pay downs. The increase in prepaids and other assets
was due to a $2.8 million prepayment of FDIC premiums at March 31, 2010.
Asset growth was primarily funded by growth in deposits during the six-month period ended March 31,
2010. Total deposits increased by $25.0 million to $492.6 million. Advances from borrowers for
taxes and insurance also increased by $3.0 million due to the timing of property tax payments. The
increase was partially offset by a decrease in borrowings of $18.6 million due to normal repayments
for the period.
Comparisons of Results of Operations for the Three Month and Six Month Period Ended March 31,
2010 with the Three Month and Six Month Period Ended March 31, 2009
Net Interest Income
Net interest income was $4.5 million for the three-month period ended March 31, 2010 compared to
$4.4 million for the comparable period in 2009. The increase in the net interest income for the
three-month period ended March 31, 2010 when compared to the same period in 2009 can be
attributed to the increase in interest rate spread from 1.97% in 2009 to 2.05% in 2010, and the
difference between the average interest earning assets in relation to the average interest earning
liabilities in comparable periods. The increase in the net interest income for the six-month
period ended March 31, 2010 when compared to the same period in 2009 can attributed to the increase
in interest rate spread from 2.02% in 2009 to 2.23% in 2010. Net interest income was $8.9 million
for the six-month period ended March 31, 2010 compared to $8.5 million for the comparable period in
2009.
Non-Interest Income
Non-interest income increased to $458,000 for the three-month period ended March 31, 2010 from
$23,000 for the comparable period in 2009. Non-interest income increased to $960,000 for the
six-month period ended March 31, 2010 from $494,000 for the comparable period in 2009. The
increase is primarily due to an impairment write-down of four equity securities resulting in a loss
of $449,000 in 2009.
Non-Interest Expenses
For the three-month period ended March 31, 2010, non-interest expenses increased by $411,000 or
14.6% to $3.2 million compared to $2.8 million for the same period in 2009. For the six month
period ended March 31, 2010, non-interest expenses increased by $728,000 or 13.1% to $6.3 million
compared to $5.6 million for the same period in 2009. These increased costs are primarily due to
the increase in FDIC insurance, normal salary and health care costs increases and expenses related
to the opening of the new branch in February, 2010. Management believes that these are reasonable
increases in the cost of operations after considering the impact of additional expenses related to
the Companys commercial loan department, business banking, opening a new branch and additional
FDIC premiums. FDIC insurance expense decreased to $226,000 for the three-month period ended March
31, 2010 from $239,000 for the comparable period in 2009. FDIC insurance expense increased to
$453,000 for the six-month period ended March 31, 2010 from $257,000 for the comparable period in
2009. The FDIC premium increases began in January 2009. The annualized ratio of non-interest
expenses to average assets for the three and six month periods ended March 31, 2010 and 2009 were
1.54%, 1.48% and 1.37%, 1.35%, respectively.
page -18-
On May 22, 2009, the FDIC adopted a final rule imposing a 5 basis point special assessment on each
insured depository institutions assets minus Tier 1 capital as of June 30, 2009. The Banks
special assessment totaling $460,000 was collected on September 30, 2009. Instead of imposing
additional special assessments, the FDIC required all banks to prepay their estimated risk-based
assessment for the fourth quarter of 2009 and for all of 2010, 2011 and 2012 on December 30, 2009.
The Bank pre-paid $3,100,000 which is included in other assets and will be amortized over 36
months.
Income Taxes
The Company made provisions for income taxes of $437,000 and $892,000 for the three-month and
six-month period ended March 31, 2010 respectively, compared to $258,000 and $685,000 for the
comparable periods in 2009. These provisions are based on the levels of pre-tax income, adjusted
primarily for tax-exempt interest income on investments.
In evaluating our ability to recover deferred tax assets, management considers all available
positive and negative evidence, including our past operating results and our forecast of future
taxable income. In determining future taxable income, management makes assumptions for the amount
of taxable income, the reversal of temporary differences and the implementation of feasible and
prudent tax planning strategies. These assumptions require us to make judgments about our future
taxable income and are consistent with the plans and estimates we use to manage our business. Any
reduction in estimated future taxable income may require us to record a valuation allowance against
our deferred tax assets. An increase in the valuation allowance would result in additional income
tax expense in the period and could have a significant impact on our future earnings.
Liquidity and Capital Recourses
For a financial institution, liquidity is a measure of the ability to fund customers needs for
loans and deposit withdrawals. Harleysville Savings Bank regularly evaluates economic conditions
in order to maintain a strong liquidity position. One of the most significant factors considered
by management when evaluating liquidity requirements is the stability of the Banks core deposit
base. In addition to cash, the Bank maintains a portfolio of short-term investments to meet its
liquidity requirements. Harleysville Savings also relies upon cash flow from operations and other
financing activities, generally short-term and long-term debt. Liquidity is also provided by
investing activities including the repayment and maturity of loans and investment securities as
well as the management of asset sales when considered necessary. The Bank also has access to and
sufficient assets to secure lines of credit and other borrowings in amounts adequate to fund any
unexpected cash requirements.
As of March 31, 2010, the Company had $70.7 million in commitments to fund loan originations,
disburse loans in process and meet other obligations. Management anticipates that the majority of
these commitments will be funded within the next six months by means of normal cash flows and new
deposits.
The Company invests excess funds in overnight deposits and other short-term interest-earning
assets, which provide liquidity to meet lending requirements. The Company also has available
borrowings with the Federal Home Loan Bank of Pittsburgh up to the Companys maximum borrowing
capacity, which was $471.5 million at March 31, 2010 of which $240.4 was outstanding at March 31,
2010.
The Banks net income for the six months ended March 31, 2010 is $2.4 million compared to $2.6
million for the comparable period in 2009. This increased the Banks stockholders equity to $51.7
million or 6.18% of total assets. This amount is well in excess of the Banks minimum regulatory
capital requirement.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
The Company has instituted programs designed to decrease the sensitivity of its earnings to
material and prolonged increases in interest rates. The principal determinant of the exposure of
the Companys earnings to interest rate risk is the timing difference between the repricing or
maturity of the Companys interest-earning assets and the repricing or maturity of its
interest-bearing liabilities. If the maturities of such assets and liabilities were perfectly
matched, and if the interest rates borne by its assets and liabilities were equally flexible and
moved concurrently, neither of which is the case, the impact on net interest income of rapid
increases or decreases in interest rates would be minimized. The Companys asset and liability
management policies seek to decrease the interest rate sensitivity by shortening the repricing
intervals and the maturities of the Companys interest-earning assets. Although management of the
Company believes that the steps taken have reduced the Companys overall vulnerability to increases
in interest rates, the Company remains vulnerable to material and prolonged increases in interest
rates during periods in which its interest rate sensitive liabilities exceed its interest rate
sensitive assets. The authority
and responsibility for interest rate management is vested in the Companys Board of Directors. The
Chief Executive Officer implements the Board of Directors policies during the day-to-day
operations of the Company.
page -19-
Each month, the Chief Financial Officer (CFO) presents the Board of Directors with a report,
which outlines the Companys asset and liability gap position in various time periods. The gap
is the difference between interest- earning assets and interest-bearing liabilities which mature or
reprice over a given time period.
The CFO also meets weekly with the Companys other senior officers to review and establish policies
and strategies designed to regulate the Companys flow of funds and coordinate the sources, uses
and pricing of such funds. The first priority in structuring and pricing the Companys assets and
liabilities is to maintain an acceptable interest rate spread while reducing the effects of changes
in interest rates and maintaining the quality of the Companys assets.
The following table summarizes the amount of interest-earning assets and interest-bearing
liabilities outstanding as of March 31, 2010, which are expected to mature, prepay or reprice in
each of the future time periods shown. Except as stated below, the amounts of assets or
liabilities shown which mature or reprice during a particular period were determined in accordance
with the contractual terms of the asset or liability. Adjustable and floating-rate assets are
included in the period in which interest rates are next scheduled to adjust rather than in the
period in which they are due and fixed-rate loans and mortgage-backed securities are included in
the periods in which they are anticipated to be repaid.
The passbook accounts, negotiable order of withdrawal (NOW) accounts, interest bearing accounts,
and money market deposit accounts, are included in the Over 5 Years categories based on
managements beliefs that these funds are core deposits having significantly longer effective
maturities based on the Companys retention of such deposits in changing interest rate
environments.
Generally, during a period of rising interest rates, a positive gap would result in an increase in
net interest income while a negative gap would adversely affect net interest income. Conversely,
during a period of falling interest rates, a positive gap would result in a decrease in net
interest income while a negative gap would positively affect net interest income. However, the
following table does not necessarily indicate the impact of general interest rate movements on the
Companys net interest income because the repricing of certain categories of assets and
liabilities is discretionary and is subject to competitive and other pressures. As a result,
certain assets and liabilities indicated as repricing within a stated period may in fact reprice at
different rate levels.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Year |
|
|
1 to 3 |
|
|
3 to 5 |
|
|
Over 5 |
|
|
|
|
|
|
or less |
|
|
Years |
|
|
Years |
|
|
Years |
|
|
Total |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans |
|
$ |
52,713 |
|
|
$ |
58,309 |
|
|
$ |
46,583 |
|
|
$ |
187,096 |
|
|
$ |
344,701 |
|
Commercial loans |
|
|
31,116 |
|
|
|
8,221 |
|
|
|
20,131 |
|
|
|
14,905 |
|
|
|
74,373 |
|
Mortgage-backed securities |
|
|
48,330 |
|
|
|
49,485 |
|
|
|
24,247 |
|
|
|
23,296 |
|
|
|
145,358 |
|
Consumer and other loans |
|
|
61,176 |
|
|
|
16,224 |
|
|
|
7,471 |
|
|
|
13,033 |
|
|
|
97,904 |
|
Investment securities and other investments |
|
|
71,054 |
|
|
|
24,288 |
|
|
|
42,256 |
|
|
|
10,316 |
|
|
|
147,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets |
|
|
264,389 |
|
|
|
156,527 |
|
|
|
140,688 |
|
|
|
248,646 |
|
|
|
810,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passbook and Club accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,176 |
|
|
|
3,176 |
|
NOW and checking accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,871 |
|
|
|
53,871 |
|
Consumer Money Market Deposit accounts |
|
|
35,527 |
|
|
|
|
|
|
|
|
|
|
|
48,295 |
|
|
|
83,822 |
|
Business Money Market Deposit accounts |
|
|
20,908 |
|
|
|
|
|
|
|
|
|
|
|
6,969 |
|
|
|
27,877 |
|
Certificate accounts |
|
|
126,603 |
|
|
|
121,121 |
|
|
|
60,795 |
|
|
|
|
|
|
|
308,519 |
|
Borrowed money |
|
|
26,765 |
|
|
|
78,316 |
|
|
|
52,725 |
|
|
|
132,592 |
|
|
|
290,398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
|
|
209,803 |
|
|
|
199,437 |
|
|
|
113,520 |
|
|
|
244,903 |
|
|
|
767,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repricing GAP during the period |
|
$ |
54,586 |
|
|
$ |
(42,910 |
) |
|
$ |
27,168 |
|
|
$ |
3,743 |
|
|
$ |
42,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative GAP |
|
$ |
54,586 |
|
|
$ |
11,676 |
|
|
$ |
38,844 |
|
|
$ |
42,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of GAP during the period to total assets |
|
|
6.47 |
% |
|
|
-5.09 |
% |
|
|
3.22 |
% |
|
|
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of cumulative GAP to total assets |
|
|
6.47 |
% |
|
|
1.38 |
% |
|
|
4.61 |
% |
|
|
5.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
page -20-
Item 4. Controls and Procedures
Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial
Officer, the effectiveness 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 on such evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time periods specified in
the SECs rules and regulations and are operating in an effective manner.
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the most recent fiscal
quarter that has materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
page -21-
Part II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 1A. Risk Factors
There are no material changes to the risk factors set forth in Part
1, Item 1A, Risk Factors of the Companys Form 10-K for the year ended
September 30, 2009. Please refer to that section for disclosures
regarding the risk and uncertainties related to the Companys business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. (Removed and Reserved)
Item 5. Other information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
|
|
|
|
|
No. |
|
31.1 |
|
|
Certification of Chief
Executive Officer |
|
31.2 |
|
|
Certification of Chief
Financial Officer |
|
32.0 |
|
|
Section 1350
Certification of Chief
Executive Officer and
Chief Financial Officer |
page -22-
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.
|
|
|
|
|
|
HARLEYSVILLE SAVINGS FINANCIAL CORPORATION
|
|
Date: May 14, 2010 |
By: |
/s/ Ronald B. Geib
|
|
|
|
Ronald B. Geib |
|
|
|
Chief Executive Officer |
|
|
|
|
Date: May 14, 2010 |
By: |
/s/ Brendan J. McGill
|
|
|
|
Brendan J. McGill |
|
|
|
Executive Vice President
Treasurer and Chief Financial Officer |
|
page -23-