UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
x
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended September 30, 2012.
¨
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from
to
Commission File Number 0-24948
PVF Capital Corp.
(Exact name of registrant as specified in its charter)
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Ohio
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34-1659805
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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30000 Aurora Road, Solon, Ohio
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44139
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(Address of principal executive offices)
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(Zip Code)
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(440) 248-7171
(Registrants telephone number, including area code)
Not
Applicable
(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
x
NO
¨
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
x
NO
¨
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
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller Reporting Company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES
¨
NO
x
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.
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Common Stock, $0.01 Par Value
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26,392,195
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(Class)
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(Outstanding at November 14, 2012)
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PVF CAPITAL CORP.
INDEX
Part I FINANCIAL INFORMATION
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
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September 30,
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June 30,
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2012
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2012
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ASSETS
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Cash and amounts due from financial institutions
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$
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16,903,187
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$
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5,840,608
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Interest-bearing deposits
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97,672,255
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114,269,532
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Total cash and cash equivalents
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114,575,442
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120,110,140
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Securities available for sale
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38,280,551
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38,658,044
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Loans receivable held for sale, net
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19,765,946
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25,062,786
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Loans receivable, net of allowance of $16,135,640 and $16,052,865
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543,186,276
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541,627,515
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Office properties and equipment, net
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7,286,062
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7,237,165
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Real estate owned, net
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7,232,119
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7,733,578
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Federal Home Loan Bank stock
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12,811,100
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12,811,100
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Bank-owned life insurance
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23,696,129
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23,648,663
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Prepaid expenses and other assets
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12,289,670
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14,560,882
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Total assets
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$
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779,123,295
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$
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791,449,873
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LIABILITIES AND STOCKHOLDERS EQUITY
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Liabilities
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Non-interest bearing deposits
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$
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57,769,225
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$
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51,786,588
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Interest bearing deposits
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588,381,234
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604,192,552
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Total deposits
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646,150,459
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655,979,140
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Note payable
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1,019,445
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1,046,111
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Long-term advances from the Federal Home Loan Bank
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35,000,000
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35,000,000
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Advances from borrowers for taxes and insurance
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6,955,246
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4,469,292
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Accrued expenses and other liabilities
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17,167,776
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24,224,709
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Total liabilities
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706,292,926
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720,719,252
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Stockholders equity
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Serial preferred stock, $.01 par value, 1,000,000 shares authorized; none issued
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Common stock, $.01 par value, 65,000,000 shares authorized; 26,392,195 and 26,217,796 shares issued, respectively
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263,922
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262,178
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Additional paid-in capital
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101,297,166
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100,897,561
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Retained earnings (accumulated deficit)
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(24,568,768
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)
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(26,119,855
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)
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Accumulated other comprehensive income (loss)
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(324,804
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)
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(472,116
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)
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Treasury stock at cost, 472,725 shares
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(3,837,147
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)
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(3,837,147
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)
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Total stockholders equity
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72,830,369
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70,730,621
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Total liabilities and stockholders equity
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$
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779,123,295
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$
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791,449,873
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See Notes to the Consolidated Financial Statements
1
Part I FINANCIAL INFORMATION
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three months ended
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September 30,
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2012
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2011
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Interest and dividends income
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Loans
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$
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6,986,437
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$
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7,104,267
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Mortgage-backed securities
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80,231
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49,721
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Federal Home Loan Bank stock dividends
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135,374
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127,760
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Securities
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141,238
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24,217
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Federal funds sold and interest-bearing deposits
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68,295
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92,498
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Total interest and dividends income
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7,411,575
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7,398,463
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Interest expense
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Deposits
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1,325,728
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1,949,047
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Long-term borrowings
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270,706
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272,440
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Total interest expense
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1,596,434
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2,221,487
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Net interest income
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5,815,141
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5,176,976
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Provision for loan losses
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1,050,000
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1,500,000
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Net interest income after provision for loan losses
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4,765,141
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3,676,976
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Non-interest income
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Service charges and other fees
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180,392
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178,818
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Mortgage banking activities, net
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3,126,247
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1,010,165
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Gain (loss) on sale of SBA loans
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(3,686
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)
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221,218
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Increase in cash surrender value of bank-owned life insurance
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47,466
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62,699
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Gain (loss) on real estate owned
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(17,881
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)
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140,112
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Provision for real estate owned losses
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(233,719
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)
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(69,400
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)
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Other, net
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192,200
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127,507
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|
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Total non-interest income
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3,291,019
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1,671,119
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Non-interest expense
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Compensation and benefits
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3,109,759
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2,894,698
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Office occupancy and equipment
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569,589
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598,910
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FDIC insurance
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432,239
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428,699
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Professional and legal
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120,000
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115,000
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Outside services
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774,845
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495,667
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Franchise tax
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196,707
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225,428
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Real estate owned and collection expense
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385,504
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613,859
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Other
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916,430
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|
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821,609
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Total non-interest expense
|
|
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6,505,073
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|
|
|
6,193,870
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|
|
|
|
|
|
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Income (loss) before federal income taxes
|
|
|
1,551,087
|
|
|
|
(845,775
|
)
|
Federal income tax provision (benefit)
|
|
|
|
|
|
|
(25,178
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,551,087
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|
$
|
(820,597
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)
|
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|
|
|
|
|
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|
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Basic earnings (loss) per share
|
|
$
|
0.06
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|
$
|
(0.03
|
)
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|
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|
|
|
|
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Diluted earnings (loss) per share
|
|
$
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0.06
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|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
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Dividend declared per common share
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to the Consolidated Financial Statements
2
Part I FINANCIAL INFORMATION
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
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|
|
|
|
|
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|
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|
Three months ended
|
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|
|
September 30,
|
|
|
|
2012
|
|
|
2011
|
|
Net income (loss)
|
|
$
|
1,551,087
|
|
|
$
|
(820,597
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
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Unrealized holding gains (loss) on available for sale securities
|
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|
147,312
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|
48,874
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Reclassification adjustment for (gains) included in net income
|
|
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|
|
|
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|
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Tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total other comprehensive income (loss)
|
|
|
147,312
|
|
|
|
48,874
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
$
|
1,698,399
|
|
|
$
|
(771,723
|
)
|
|
|
|
|
|
|
|
|
|
See Notes to the Consolidated Financial Statements
3
Part I FINANCIAL INFORMATION
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
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|
|
|
|
|
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Three months ended
|
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|
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September 30,
|
|
|
|
2012
|
|
|
2011
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,551,087
|
|
|
$
|
(820,597
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)
|
Adjustments to reconcile net income to net cash flow from operating activities
|
|
|
|
|
|
|
|
|
Accretion of discount on available for sale securities
|
|
|
(6,180
|
)
|
|
|
(8,940
|
)
|
Depreciation and amortization
|
|
|
176,153
|
|
|
|
177,621
|
|
Provision for loan losses
|
|
|
1,050,000
|
|
|
|
1,500,000
|
|
Gain on the sale of loans receivable held for sale
|
|
|
(3,550,824
|
)
|
|
|
(847,607
|
)
|
(Gain) loss on the sale of SBA loans
|
|
|
3,686
|
|
|
|
(221,218
|
)
|
Provision for real estate owned losses
|
|
|
233,719
|
|
|
|
69,400
|
|
Accretion (defferral) of loan origination fees, net
|
|
|
(95,144
|
)
|
|
|
633,032
|
|
(Gain) loss on disposal of real estate owned, net
|
|
|
17,881
|
|
|
|
(140,112
|
)
|
Market adjustment for loans held for sale
|
|
|
87,634
|
|
|
|
(231,052
|
)
|
Change in fair value of mortgage banking derivatives
|
|
|
(567,931
|
)
|
|
|
(748,776
|
)
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Stock compensation
|
|
|
399,606
|
|
|
|
61,005
|
|
Proceeds from loans receivable held for sale
|
|
|
112,540,431
|
|
|
|
44,937,267
|
|
Origination of loans receivable held for sale, net
|
|
|
(105,332,333
|
)
|
|
|
(47,622,223
|
)
|
Increase in cash surrender value of bank-owned life insurance
|
|
|
(47,466
|
)
|
|
|
(62,700
|
)
|
Net change in other assets and other liabilities
|
|
|
(2,745,430
|
)
|
|
|
2,482,067
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) operating activities
|
|
|
3,714,889
|
|
|
|
(842,833
|
)
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
Loan repayments and originations, net
|
|
|
(3,323,245
|
)
|
|
|
2,899,216
|
|
Principal repayments on securities available for sale
|
|
|
1,881,562
|
|
|
|
246,328
|
|
Calls of securities available for sale
|
|
|
5,750,000
|
|
|
|
8,950,000
|
|
Purchase of securities available for sale
|
|
|
(7,024,690
|
)
|
|
|
(3,000,000
|
)
|
Additions to office properties and equipment, net
|
|
|
(225,050
|
)
|
|
|
(146,920
|
)
|
Proceeds from sale of real estate owned
|
|
|
1,059,485
|
|
|
|
657,264
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) investing activities
|
|
|
(1,881,938
|
)
|
|
|
9,605,888
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
Net increase in demand deposits, NOW and passbook savings
|
|
|
12,928,106
|
|
|
|
(1,518,884
|
)
|
Net decrease in time deposits
|
|
|
(22,756,787
|
)
|
|
|
(2,530,726
|
)
|
Repayment of note payable
|
|
|
(26,666
|
)
|
|
|
(26,667
|
)
|
Net increase (decrease) in advances from borrowers for taxes and insurance
|
|
|
2,485,954
|
|
|
|
(3,705,833
|
)
|
Proceeds from the issuance of common shares
|
|
|
1,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) financing activities
|
|
|
(7,367,649
|
)
|
|
|
(7,782,110
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(5,534,698
|
)
|
|
|
980,945
|
|
Cash and cash equivalents at beginning of year
|
|
|
120,110,140
|
|
|
|
149,291,405
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
114,575,442
|
|
|
$
|
150,272,350
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
Cash payments of interest
|
|
$
|
1,589,416
|
|
|
$
|
2,221,594
|
|
Cash payments of income taxes
|
|
$
|
|
|
|
$
|
|
|
Supplemental noncash investing activity:
|
|
|
|
|
|
|
|
|
Transfer of loans to real estate owned
|
|
$
|
809,626
|
|
|
$
|
538,978
|
|
See Notes to the Consolidated Financial Statements
4
Part I FINANCIAL INFORMATION
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended
September 30, 2012 and 2011
(Unaudited)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
The accounting and reporting policies of PVF Capital Corp. (the Company) conform to U.S. generally accepted
accounting principles (U.S. GAAP) and general industry practice. The Companys principal subsidiary, Park View Federal Savings Bank (the Bank) is primarily engaged in the business of offering deposits through the
issuance of savings accounts, money market accounts, and certificates of deposit and lending funds primarily for the purchase, construction, and improvement of real estate in Cuyahoga, Summit, Geauga, Lake, Medina, Lorain and Portage Counties, Ohio.
The deposit accounts of the Bank are insured up to applicable limits by the Federal Deposit Insurance Corporation (the FDIC). The following is a description of the significant policies which the Company follows in preparing and
presenting its consolidated financial statements.
Basis of Presentation
: The accompanying Unaudited Consolidated
Financial Statements of PVF Capital Corp. have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and the instructions for Form 10-Q and Article 10
of Regulation S-X. Accordingly, these financial statements do not contain all of the information and footnotes required by U.S. GAAP for annual financial statements and should be read in conjunction with PVF Capital Corp.s Annual Report on
Form 10-K for the fiscal year ended June 30, 2012. These consolidated financial statements are prepared without audit and reflect all adjustments that, in the opinion of management, are necessary to present fairly the financial position of the
Company at September 30, 2012, and its results of operations and cash flows for the periods presented. All such adjustments are normal and recurring in nature. The accounting principles used to prepare the consolidated financial
statements are in compliance with U.S. GAAP. However, the financial statements were prepared in accordance with the instructions of Form 10-Q and, therefore, do not purport to contain all necessary financial and note disclosures required by
U.S. GAAP.
Principles of Consolidation
: The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, the Bank, PVF Service Corporation (PVFSC), Mid Pines Land Company, PVF Holdings, Inc., PVF Mortgage Corp. and PVF Community Development Corp. PVFSC owns certain premises and leases them to the Bank. Mid
Pines Land Company, PVF Holdings, Inc., PVF Mortgage Corp. and PVF Community Development Corp. did not have any significant assets or activity as of or for the periods presented. All significant intercompany transactions and balances are eliminated
in consolidation. In the period ended September 30, 2012, the Company reclassified certain loans between the loan portfolio segments and reclassified certain deposits between interest bearing and non-interest bearing as presented previously in
the Companys Annual Report on Form 10-K to conform to the current period presentation.
PVFSC and the Bank have entered
into various nonconsolidated joint ventures that own real estate, including properties leased to the Bank. The Bank has created various limited liability companies that have taken title to property acquired through or in lieu of foreclosure.
Use of Estimates
: The preparation of consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets
5
Part I FINANCIAL INFORMATION
and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The allowance for loan losses, valuation of mortgage servicing rights, fair value of mortgage
banking derivatives, valuation of loans held for sale, fair value of securities, valuation of other real estate owned, and the realizability of deferred tax assets are particularly susceptible to change.
NOTE 2 SECURITIES
As of September 30, 2012 and June 30, 2012, respectively, the amortized cost and fair value of securities
available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
|
|
Amortized
|
|
|
Unrealized
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
Cost
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
FNMA structured notes
|
|
$
|
2,000,000
|
|
|
$
|
3,600
|
|
|
$
|
0
|
|
|
$
|
2,003,600
|
|
Trust preferred and corporate securities
|
|
|
18,210,212
|
|
|
|
460,346
|
|
|
|
(13,562
|
)
|
|
|
18,656,997
|
|
Mortgage-backed GSE securities
|
|
|
17,247,156
|
|
|
|
387,506
|
|
|
|
(14,708
|
)
|
|
|
17,619,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
37,457,369
|
|
|
$
|
851,452
|
|
|
$
|
(28,270
|
)
|
|
$
|
38,280,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
|
|
Amortized
|
|
|
Unrealized
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
Cost
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
FNMA structured notes
|
|
$
|
2,000,000
|
|
|
$
|
9,320
|
|
|
$
|
0
|
|
|
$
|
2,009,320
|
|
Trust preferred and corporate securities
|
|
|
20,964,197
|
|
|
|
344,230
|
|
|
|
(46,665
|
)
|
|
|
21,261,762
|
|
Mortgage-backed GSE securities
|
|
|
15,093,864
|
|
|
|
293,098
|
|
|
|
|
|
|
|
15,386,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
38,058,061
|
|
|
$
|
646,648
|
|
|
$
|
(46,665
|
)
|
|
$
|
38,658,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management performs a quarterly evaluation of investment securities for other-than-temporary impairment.
At September 30, 2012 and June 30, 2012, respectively, the gross unrealized losses were in a loss position for less than 12 months. Management does not believe that any of these losses at September 30, 2012 or June 30, 2012
represent an other-than-temporary impairment. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized within net income in the period the
other-then-temporary impairment is identified.
The amortized cost and fair value of securities available-for-sale, by
contractual maturity, are shown below:
6
Part I FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
Amortized
|
|
|
|
|
|
|
Cost
|
|
|
Fair Value
|
|
One to five years
|
|
$
|
2,000,000
|
|
|
$
|
2,003,600
|
|
Five to ten years
|
|
|
5,037,865
|
|
|
|
5,102,220
|
|
Greater than 10 years
|
|
|
13,172,347
|
|
|
|
13,554,827
|
|
Mortgage-backed GSE securities
|
|
|
17,225,615
|
|
|
|
17,619,954
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
37,435,828
|
|
|
$
|
38,280,551
|
|
|
|
|
|
|
|
|
|
|
The Fannie Mae (FNMA) structured note held at September 30, 2012 is callable on
November 9, 2012 and quarterly thereafter, has multiple coupon resets and matures on November 9, 2016. These mortgage-backed securities are backed by residential mortgage loans and do not mature on a single maturity date.
Securities pledged as collateral for contingent funding at the Federal Home Loan Bank of Cincinnati were approximately $14.6 million.
7
Part I FINANCIAL INFORMATION
NOTE 3 LOANS RECEIVABLE
Loans receivable at September 30, 2012, and June 30, 2012 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
June 30,
|
|
|
|
2012
|
|
|
2012
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
59,297,788
|
|
|
$
|
58,743,933
|
|
1-4 Family Non-Owner Occupied
|
|
|
34,303,456
|
|
|
|
34,368,320
|
|
1-4 Family Second Mortgage
|
|
|
28,729,779
|
|
|
|
29,202,145
|
|
Home Equity Lines of Credit
|
|
|
64,933,215
|
|
|
|
65,908,899
|
|
Home Equity Investment Lines of Credit
|
|
|
5,267,763
|
|
|
|
5,645,851
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
1,341,302
|
|
|
|
514,052
|
|
1-4 Family Construction Models/Speculative
|
|
|
621,042
|
|
|
|
1,608,137
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
62,638,057
|
|
|
|
53,959,459
|
|
Multi-Family Second Mortgage
|
|
|
144,754
|
|
|
|
145,642
|
|
Multi-Family Construction
|
|
|
108,428
|
|
|
|
5,375,000
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
198,023,597
|
|
|
|
198,287,457
|
|
Commercial Second Mortgage
|
|
|
4,799,704
|
|
|
|
5,750,283
|
|
Commercial Lines of Credit
|
|
|
22,656,803
|
|
|
|
22,335,619
|
|
Commercial Construction
|
|
|
9,126,892
|
|
|
|
7,732,736
|
|
Commercial and Industrial Loans
|
|
|
37,556,592
|
|
|
|
35,443,184
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
9,346,567
|
|
|
|
12,091,093
|
|
Acquisition and Development Loans
|
|
|
18,968,781
|
|
|
|
19,093,006
|
|
Consumer Loans
|
|
|
2,101,434
|
|
|
|
2,112,708
|
|
|
|
|
|
|
|
|
|
|
Total loans receivable
|
|
|
559,965,954
|
|
|
|
558,317,524
|
|
|
|
|
Net deferred loan origination fees
|
|
|
(644,038
|
)
|
|
|
(637,144
|
)
|
Allowance for loan losses
|
|
|
(16,135,640
|
)
|
|
|
(16,052,865
|
)
|
|
|
|
|
|
|
|
|
|
Total loans receivable, net
|
|
$
|
543,186,276
|
|
|
$
|
541,627,515
|
|
|
|
|
|
|
|
|
|
|
8
Part I FINANCIAL INFORMATION
The following table presents activity in the allowance for loan losses by portfolio segment for the
three months ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
|
|
|
Commercial
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
Family
|
|
|
Multi-
|
|
|
Real
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
Family
|
|
|
Construction
|
|
|
Family
|
|
|
Estate
|
|
|
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Beginning balance at June 30, 2012
|
|
$
|
5,765,276
|
|
|
$
|
305,312
|
|
|
$
|
1,903,138
|
|
|
$
|
5,084,179
|
|
|
$
|
928,043
|
|
|
$
|
2,057,301
|
|
|
$
|
9,616
|
|
|
$
|
16,052,865
|
|
Provision for loan losses
|
|
|
623,779
|
|
|
|
43,601
|
|
|
|
(766,960
|
)
|
|
|
943,294
|
|
|
|
312,966
|
|
|
|
(120,627
|
)
|
|
|
13,947
|
|
|
|
1,050,000
|
|
Charge-offs
|
|
|
(741,685
|
)
|
|
|
(45,959
|
)
|
|
|
|
|
|
|
(248,493
|
)
|
|
|
(12,500
|
)
|
|
|
(20,078
|
)
|
|
|
(13,000
|
)
|
|
|
(1,081,715
|
)
|
Recoveries
|
|
|
42,569
|
|
|
|
10,000
|
|
|
|
|
|
|
|
17,614
|
|
|
|
1,585
|
|
|
|
42,480
|
|
|
|
242
|
|
|
|
114,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at September 30, 2012
|
|
$
|
5,689,939
|
|
|
$
|
312,954
|
|
|
$
|
1,136,178
|
|
|
$
|
5,796,594
|
|
|
$
|
1,230,094
|
|
|
$
|
1,959,076
|
|
|
$
|
10,805
|
|
|
$
|
16,135,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents activity in the allowance for loan losses by portfolio segment for the three months ended
September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
|
|
|
Commercial
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
Family
|
|
|
Multi-
|
|
|
Real
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
Family
|
|
|
Construction
|
|
|
Family
|
|
|
Estate
|
|
|
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Beginning balance at June 30, 2011
|
|
$
|
8,841,454
|
|
|
$
|
1,266,740
|
|
|
$
|
1,767,335
|
|
|
$
|
8,458,943
|
|
|
$
|
1,663,894
|
|
|
$
|
7,891,305
|
|
|
$
|
107,222
|
|
|
$
|
29,996,893
|
|
Provision for loan losses
|
|
|
(511,394
|
)
|
|
|
39,566
|
|
|
|
(360,444
|
)
|
|
|
949,896
|
|
|
|
493,657
|
|
|
|
728,029
|
|
|
|
160,690
|
|
|
|
1,500,000
|
|
Charge-offs
|
|
|
(476,158
|
)
|
|
|
(109,322
|
)
|
|
|
(236,663
|
)
|
|
|
(1,089,347
|
)
|
|
|
(29,609
|
)
|
|
|
(28,421
|
)
|
|
|
|
|
|
|
(1,969,520
|
)
|
Recoveries
|
|
|
4,765
|
|
|
|
|
|
|
|
|
|
|
|
19,271
|
|
|
|
1,755
|
|
|
|
|
|
|
|
|
|
|
|
25,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at September 30, 2011
|
|
$
|
7,858,667
|
|
|
$
|
1,196,984
|
|
|
$
|
1,170,228
|
|
|
$
|
8,338,763
|
|
|
$
|
2,129,697
|
|
|
$
|
8,590,913
|
|
|
$
|
267,912
|
|
|
$
|
29,553,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
Part I FINANCIAL INFORMATION
The following table presents the allowance for loan losses and the recorded investment
in loans by portfolio segment and based on the impairment method as of September 30, 2012. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees, but excludes accrued interest receivable
which is not considered to be material.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
|
|
|
Commercial
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
Family
|
|
|
Multi-
|
|
|
Real
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
Family
|
|
|
Construction
|
|
|
Family
|
|
|
Estate
|
|
|
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
699,204
|
|
|
$
|
101,716
|
|
|
$
|
|
|
|
$
|
98,725
|
|
|
$
|
300,860
|
|
|
$
|
252,000
|
|
|
$
|
|
|
|
$
|
1,452,505
|
|
Collectively evaluated for impairment
|
|
|
4,990,735
|
|
|
|
211,238
|
|
|
|
1,136,178
|
|
|
|
5,697,869
|
|
|
|
929,234
|
|
|
|
1,707,076
|
|
|
|
10,805
|
|
|
|
14,683,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance balance
|
|
$
|
5,689,939
|
|
|
$
|
312,954
|
|
|
$
|
1,136,178
|
|
|
$
|
5,796,594
|
|
|
$
|
1,230,094
|
|
|
$
|
1,959,076
|
|
|
$
|
10,805
|
|
|
$
|
16,135,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
12,208,532
|
|
|
$
|
833,904
|
|
|
$
|
300,254
|
|
|
$
|
11,851,912
|
|
|
$
|
540,441
|
|
|
$
|
6,763,662
|
|
|
$
|
|
|
|
$
|
32,498,705
|
|
Loans collectively evaluated for impairment
|
|
|
180,102,030
|
|
|
|
1,126,183
|
|
|
|
62,518,652
|
|
|
|
222,485,254
|
|
|
|
36,972,956
|
|
|
|
21,519,119
|
|
|
|
2,099,017
|
|
|
|
526,823,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loans balance
|
|
$
|
192,310,562
|
|
|
$
|
1,960,087
|
|
|
$
|
62,818,906
|
|
|
$
|
234,337,166
|
|
|
$
|
37,513,397
|
|
|
$
|
28,282,781
|
|
|
$
|
2,099,017
|
|
|
$
|
559,321,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
Part I FINANCIAL INFORMATION
The following table presents the allowance for loan losses and the recorded investment
in loans by portfolio segment and based on the impairment method as of June 30, 2012. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees, but excludes accrued interest receivable which is not
considered to be material.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
|
|
|
Commercial
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
|
|
|
Family
|
|
|
Multi-
|
|
|
Real
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
Family
|
|
|
Construction
|
|
|
Family
|
|
|
Estate
|
|
|
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
665,033
|
|
|
$
|
101,716
|
|
|
$
|
|
|
|
$
|
98,725
|
|
|
$
|
300,860
|
|
|
$
|
252,000
|
|
|
$
|
|
|
|
$
|
1,418,334
|
|
Collectively evaluated for impairment
|
|
|
5,100,243
|
|
|
|
203,596
|
|
|
|
1,903,138
|
|
|
|
4,985,454
|
|
|
|
627,183
|
|
|
|
1,805,301
|
|
|
|
9,616
|
|
|
|
14,634,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance balance
|
|
$
|
5,765,276
|
|
|
$
|
305,312
|
|
|
$
|
1,903,138
|
|
|
$
|
5,084,179
|
|
|
$
|
928,043
|
|
|
$
|
2,057,301
|
|
|
$
|
9,616
|
|
|
$
|
16,052,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
13,243,350
|
|
|
$
|
880,749
|
|
|
$
|
622,228
|
|
|
$
|
11,902,730
|
|
|
$
|
740,297
|
|
|
$
|
7,189,109
|
|
|
$
|
|
|
|
$
|
34,578,463
|
|
Loans collectively evaluated for impairment
|
|
|
180,404,558
|
|
|
|
1,239,018
|
|
|
|
58,789,996
|
|
|
|
221,936,205
|
|
|
|
34,662,439
|
|
|
|
23,959,404
|
|
|
|
2,110,297
|
|
|
|
523,101,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loans balance
|
|
$
|
193,647,908
|
|
|
$
|
2,119,767
|
|
|
$
|
59,412,224
|
|
|
$
|
233,838,935
|
|
|
$
|
35,402,736
|
|
|
$
|
31,148,513
|
|
|
$
|
2,110,297
|
|
|
$
|
557,680,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
Part I FINANCIAL INFORMATION
The following table presents loans individually evaluated for impairment by class of
loan as of September 30, 2012 and the average recorded investment and interest income recognized by class for the three months ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
Unpaid
|
|
|
|
|
|
Allowance for
|
|
|
Average
|
|
|
Interest
|
|
|
Cash Basis
|
|
|
|
Principal
|
|
|
Recorded
|
|
|
Loan Losses
|
|
|
Recorded
|
|
|
Income
|
|
|
Interest
|
|
|
|
Balance
(1)
|
|
|
Investment
|
|
|
Allocated
|
|
|
Investment
|
|
|
Recognized
|
|
|
Recognized
|
|
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
5,878,741
|
|
|
$
|
5,075,565
|
|
|
$
|
0
|
|
|
$
|
5,373,322
|
|
|
$
|
0
|
|
|
$
|
0
|
|
1-4 Family Non-Owner Occupied
|
|
|
3,487,465
|
|
|
|
2,130,102
|
|
|
|
0
|
|
|
|
2,291,842
|
|
|
|
164
|
|
|
|
164
|
|
1-4 Family Second Mortgage
|
|
|
1,405,390
|
|
|
|
1,142,585
|
|
|
|
0
|
|
|
|
1,186,435
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Lines of Credit
|
|
|
1,751,282
|
|
|
|
1,749,268
|
|
|
|
0
|
|
|
|
1,790,931
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
157,122
|
|
|
|
156,941
|
|
|
|
0
|
|
|
|
156,942
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
1-4 Family Construction Models/Speculative
|
|
|
678,779
|
|
|
|
308,146
|
|
|
|
0
|
|
|
|
331,566
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
312,714
|
|
|
|
300,254
|
|
|
|
0
|
|
|
|
461,241
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
10,366,525
|
|
|
|
9,239,212
|
|
|
|
0
|
|
|
|
9,262,945
|
|
|
|
43,972
|
|
|
|
43,972
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Lines of Credit
|
|
|
613,910
|
|
|
|
613,204
|
|
|
|
0
|
|
|
|
614,870
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
828,491
|
|
|
|
643,855
|
|
|
|
0
|
|
|
|
643,859
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
484,799
|
|
|
|
239,927
|
|
|
|
0
|
|
|
|
339,854
|
|
|
|
0
|
|
|
|
0
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
5,379,609
|
|
|
|
4,254,141
|
|
|
|
0
|
|
|
|
3,966,345
|
|
|
|
11,569
|
|
|
|
11,569
|
|
Acquisition and Development Loans
|
|
|
4,990,178
|
|
|
|
2,374,790
|
|
|
|
0
|
|
|
|
2,874,945
|
|
|
|
0
|
|
|
|
0
|
|
Consumer Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with no related allowance recorded
|
|
$
|
36,335,005
|
|
|
$
|
28,227,990
|
|
|
$
|
0
|
|
|
$
|
29,295,097
|
|
|
$
|
55,705
|
|
|
$
|
55,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
231,051
|
|
|
$
|
230,786
|
|
|
$
|
39,982
|
|
|
$
|
231,635
|
|
|
$
|
0
|
|
|
$
|
0
|
|
1-4 Family Non-Owner Occupied
|
|
|
116,463
|
|
|
|
116,329
|
|
|
|
8,286
|
|
|
|
116,778
|
|
|
|
0
|
|
|
|
0
|
|
1-4 Family Second Mortgage
|
|
|
246,621
|
|
|
|
246,337
|
|
|
|
14,685
|
|
|
|
246,674
|
|
|
|
592
|
|
|
|
592
|
|
Home Equity Lines of Credit
|
|
|
963,762
|
|
|
|
962,653
|
|
|
|
338,080
|
|
|
|
928,753
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
398,424
|
|
|
|
397,966
|
|
|
|
298,171
|
|
|
|
402,629
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
1-4 Family Construction Models/Speculative
|
|
|
526,363
|
|
|
|
525,758
|
|
|
|
101,716
|
|
|
|
525,760
|
|
|
|
7,062
|
|
|
|
7,062
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
1,357,202
|
|
|
|
1,355,641
|
|
|
|
98,725
|
|
|
|
1,355,647
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Lines of Credit
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
300,860
|
|
|
|
300,514
|
|
|
|
300,860
|
|
|
|
300,515
|
|
|
|
0
|
|
|
|
0
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
134,886
|
|
|
|
134,731
|
|
|
|
252,000
|
|
|
|
135,095
|
|
|
|
2,031
|
|
|
|
2,031
|
|
Acquisition and Development Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Consumer Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with an allowance recorded
|
|
$
|
4,275,632
|
|
|
$
|
4,270,715
|
|
|
$
|
1,452,505
|
|
|
$
|
4,243,486
|
|
|
$
|
9,685
|
|
|
$
|
9,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans evaluated for impairment
|
|
$
|
40,610,637
|
|
|
$
|
32,498,705
|
|
|
$
|
1,452,505
|
|
|
$
|
33,538,583
|
|
|
$
|
65,390
|
|
|
$
|
65,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $14.5 million of loans individually identified for impairment accruing interest.
|
12
Part I FINANCIAL INFORMATION
The following table presents loans individually evaluated for impairment by class of
loans as of June 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
|
Unpaid
|
|
|
|
|
|
Allowance for
|
|
|
Average
|
|
|
Interest
|
|
|
Cash Basis
|
|
|
|
Principal
|
|
|
Recorded
|
|
|
Loan Losses
|
|
|
Recorded
|
|
|
Income
|
|
|
Interest
|
|
|
|
Balance
(1)
|
|
|
Investment
|
|
|
Allocated
|
|
|
Investment
|
|
|
Recognized
|
|
|
Recognized
|
|
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
6,380,803
|
|
|
$
|
5,671,079
|
|
|
$
|
0
|
|
|
$
|
5,437,834
|
|
|
$
|
30,882
|
|
|
$
|
30,882
|
|
1-4 Family Non-Owner Occupied
|
|
|
4,597,708
|
|
|
|
2,453,581
|
|
|
|
0
|
|
|
|
3,503,049
|
|
|
|
48,828
|
|
|
|
48,828
|
|
1-4 Family Second Mortgage
|
|
|
1,455,914
|
|
|
|
1,230,284
|
|
|
|
0
|
|
|
|
1,374,161
|
|
|
|
3,958
|
|
|
|
3,958
|
|
Home Equity Lines of Credit
|
|
|
1,834,685
|
|
|
|
1,832,595
|
|
|
|
0
|
|
|
|
1,344,562
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
157,120
|
|
|
|
156,943
|
|
|
|
0
|
|
|
|
204,703
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
52,573
|
|
|
|
4,821
|
|
|
|
4,821
|
|
1-4 Family Construction Models/Speculative
|
|
|
678,779
|
|
|
|
354,986
|
|
|
|
0
|
|
|
|
475,027
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
635,053
|
|
|
|
622,228
|
|
|
|
0
|
|
|
|
550,760
|
|
|
|
4,081
|
|
|
|
4,081
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
10,902,253
|
|
|
|
9,286,679
|
|
|
|
0
|
|
|
|
8,005,131
|
|
|
|
147,148
|
|
|
|
147,148
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
192,399
|
|
|
|
1,660
|
|
|
|
1,660
|
|
Commercial Lines of Credit
|
|
|
617,240
|
|
|
|
616,536
|
|
|
|
0
|
|
|
|
2,413,942
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
828,490
|
|
|
|
643,863
|
|
|
|
0
|
|
|
|
575,159
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
801,075
|
|
|
|
439,781
|
|
|
|
0
|
|
|
|
2,335,961
|
|
|
|
662
|
|
|
|
662
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
5,235,050
|
|
|
|
3,678,550
|
|
|
|
0
|
|
|
|
2,955,360
|
|
|
|
5,519
|
|
|
|
5,519
|
|
Acquisition and Development Loans
|
|
|
5,986,575
|
|
|
|
3,375,100
|
|
|
|
0
|
|
|
|
2,258,295
|
|
|
|
19,132
|
|
|
|
19,132
|
|
Consumer Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with no related allowance recorded
|
|
$
|
40,110,745
|
|
|
$
|
30,362,205
|
|
|
$
|
0
|
|
|
$
|
31,678,916
|
|
|
$
|
266,691
|
|
|
$
|
266,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
232,751
|
|
|
$
|
232,485
|
|
|
$
|
39,981
|
|
|
$
|
526,956
|
|
|
$
|
0
|
|
|
$
|
0
|
|
1-4 Family Non-Owner Occupied
|
|
|
117,360
|
|
|
|
117,226
|
|
|
|
8,286
|
|
|
|
1,243,154
|
|
|
|
10,112
|
|
|
|
10,112
|
|
1-4 Family Second Mortgage
|
|
|
247,293
|
|
|
|
247,011
|
|
|
|
14,685
|
|
|
|
175,881
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Lines of Credit
|
|
|
895,875
|
|
|
|
894,852
|
|
|
|
299,759
|
|
|
|
1,629,256
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
407,757
|
|
|
|
407,293
|
|
|
|
302,322
|
|
|
|
470,382
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
526,363
|
|
|
|
525,762
|
|
|
|
101,716
|
|
|
|
1,064,520
|
|
|
|
14,047
|
|
|
|
14,047
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
92,056
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
1,357,202
|
|
|
|
1,355,653
|
|
|
|
98,725
|
|
|
|
3,796,149
|
|
|
|
37,340
|
|
|
|
37,340
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
34,220
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Lines of Credit
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
48,854
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
711,804
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
300,860
|
|
|
|
300,517
|
|
|
|
300,860
|
|
|
|
1,404,807
|
|
|
|
0
|
|
|
|
0
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
135,614
|
|
|
|
135,459
|
|
|
|
252,000
|
|
|
|
962,537
|
|
|
|
0
|
|
|
|
0
|
|
Acquisition and Development Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
2,397,176
|
|
|
|
0
|
|
|
|
0
|
|
Consumer Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with an allowance recorded
|
|
$
|
4,221,075
|
|
|
$
|
4,216,258
|
|
|
$
|
1,418,334
|
|
|
$
|
14,557,752
|
|
|
$
|
61,499
|
|
|
$
|
61,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans evaluated for impairment
|
|
$
|
44,331,820
|
|
|
$
|
34,578,463
|
|
|
$
|
1,418,334
|
|
|
$
|
46,236,668
|
|
|
$
|
328,190
|
|
|
$
|
328,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $13.9 million of loans individually identified for impairment accruing interest.
|
13
Part I FINANCIAL INFORMATION
The following table presents loans individually evaluated for impairment by class of
loans as of September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2011
|
|
|
|
Unpaid
|
|
|
|
|
|
Allowance for
|
|
|
Average
|
|
|
Interest
|
|
|
Cash Basis
|
|
|
|
Principal
|
|
|
Recorded
|
|
|
Loan Losses
|
|
|
Recorded
|
|
|
Income
|
|
|
Interest
|
|
|
|
Balance
(1)
|
|
|
Investment
|
|
|
Allocated
|
|
|
Investment
|
|
|
Recognized
|
|
|
Recognized
|
|
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
6,101,095
|
|
|
$
|
6,091,111
|
|
|
$
|
|
|
|
$
|
6,605,736
|
|
|
$
|
47,473
|
|
|
$
|
47,473
|
|
1-4 Family Non-Owner Occupied
|
|
|
2,845,537
|
|
|
|
2,840,881
|
|
|
|
|
|
|
|
1,998,029
|
|
|
|
7,295
|
|
|
|
7,295
|
|
1-4 Family Second Mortgage
|
|
|
1,517,563
|
|
|
|
1,515,080
|
|
|
|
|
|
|
|
1,279,294
|
|
|
|
107
|
|
|
|
107
|
|
Home Equity Lines of Credit
|
|
|
796,506
|
|
|
|
795,203
|
|
|
|
|
|
|
|
867,519
|
|
|
|
582
|
|
|
|
582
|
|
Home Equity Investment Lines of Credit
|
|
|
310,121
|
|
|
|
309,614
|
|
|
|
|
|
|
|
221,646
|
|
|
|
317
|
|
|
|
317
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
176,887
|
|
|
|
176,598
|
|
|
|
|
|
|
|
176,753
|
|
|
|
1,322
|
|
|
|
1,322
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
305,904
|
|
|
|
305,404
|
|
|
|
|
|
|
|
1,224,791
|
|
|
|
|
|
|
|
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
7,266,866
|
|
|
|
7,254,974
|
|
|
|
|
|
|
|
6,842,586
|
|
|
|
25,577
|
|
|
|
25,577
|
|
Commercial Second Mortgage
|
|
|
571,473
|
|
|
|
570,538
|
|
|
|
|
|
|
|
570,519
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
2,623,140
|
|
|
|
2,618,848
|
|
|
|
|
|
|
|
2,758,567
|
|
|
|
2,186
|
|
|
|
2,186
|
|
Commercial Construction
|
|
|
370,000
|
|
|
|
369,395
|
|
|
|
|
|
|
|
369,382
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
2,559,945
|
|
|
|
2,555,755
|
|
|
|
|
|
|
|
2,057,142
|
|
|
|
|
|
|
|
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
1,344,192
|
|
|
|
1,341,993
|
|
|
|
|
|
|
|
1,153,055
|
|
|
|
807
|
|
|
|
807
|
|
Acquisition and Development Loans
|
|
|
109,818
|
|
|
|
109,638
|
|
|
|
|
|
|
|
274,431
|
|
|
|
|
|
|
|
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with no related allowance recorded
|
|
$
|
26,899,047
|
|
|
$
|
26,855,032
|
|
|
$
|
|
|
|
$
|
26,399,450
|
|
|
$
|
85,666
|
|
|
$
|
85,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
1,631,018
|
|
|
$
|
1,628,349
|
|
|
$
|
405,552
|
|
|
$
|
1,158,082
|
|
|
$
|
719
|
|
|
$
|
719
|
|
1-4 Family Non-Owner Occupied
|
|
|
4,625,921
|
|
|
|
4,618,352
|
|
|
|
1,924,308
|
|
|
|
4,747,990
|
|
|
|
3,565
|
|
|
|
3,565
|
|
1-4 Family Second Mortgage
|
|
|
457,261
|
|
|
|
456,513
|
|
|
|
224,653
|
|
|
|
361,465
|
|
|
|
|
|
|
|
|
|
Home Equity Lines of Credit
|
|
|
2,329,197
|
|
|
|
2,325,385
|
|
|
|
987,669
|
|
|
|
2,298,073
|
|
|
|
|
|
|
|
|
|
Home Equity Investment Lines of Credit
|
|
|
345,735
|
|
|
|
345,170
|
|
|
|
102,008
|
|
|
|
345,158
|
|
|
|
1,286
|
|
|
|
1,286
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
2,685,405
|
|
|
|
2,681,011
|
|
|
|
862,554
|
|
|
|
2,838,155
|
|
|
|
|
|
|
|
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
368,828
|
|
|
|
368,224
|
|
|
|
226,067
|
|
|
|
368,212
|
|
|
|
|
|
|
|
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,660
|
|
|
|
1,660
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
6,378,282
|
|
|
|
6,367,846
|
|
|
|
929,808
|
|
|
|
7,485,402
|
|
|
|
6,936
|
|
|
|
6,936
|
|
Commercial Second Mortgage
|
|
|
137,105
|
|
|
|
136,881
|
|
|
|
3,553
|
|
|
|
68,440
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Construction
|
|
|
2,851,883
|
|
|
|
2,847,217
|
|
|
|
751,178
|
|
|
|
3,146,613
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
3,279,788
|
|
|
|
3,274,422
|
|
|
|
1,041,066
|
|
|
|
2,456,243
|
|
|
|
2,920
|
|
|
|
2,920
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
3,202,019
|
|
|
|
3,196,779
|
|
|
|
1,291,302
|
|
|
|
3,084,307
|
|
|
|
6,742
|
|
|
|
6,742
|
|
Acquisition and Development Loans
|
|
|
9,604,420
|
|
|
|
9,588,705
|
|
|
|
4,810,417
|
|
|
|
9,826,391
|
|
|
|
24,176
|
|
|
|
24,176
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with an allowance recorded
|
|
$
|
37,896,862
|
|
|
$
|
37,834,854
|
|
|
$
|
13,560,135
|
|
|
$
|
38,184,531
|
|
|
$
|
48,004
|
|
|
$
|
48,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans evaluated for impairment
|
|
$
|
64,795,909
|
|
|
$
|
64,689,886
|
|
|
$
|
13,560,135
|
|
|
$
|
64,583,981
|
|
|
$
|
133,670
|
|
|
$
|
133,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $17.0 million of loans individually identified for impairment accruing interest.
|
14
Part I FINANCIAL INFORMATION
Past Due and Non-Accrual Loans
The following table presents the recorded investment in non-accrual loans and loans past due over 90 days still on accrual by class of
loan as of September 30, 2012 and June 30, 2012. Non-accrual loans and loans past due over 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified
impaired loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
June 30, 2012
|
|
|
|
|
|
|
Loans Past Due
|
|
|
|
|
|
Loans Past Due
|
|
|
|
|
|
|
Over 90 Days
|
|
|
|
|
|
Over 90 Days
|
|
|
|
Nonaccrual
(1)
|
|
|
Still Accruing
(2)
|
|
|
Nonaccrual
(1)
|
|
|
Still Accruing
(2)
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
2,293,702
|
|
|
$
|
|
|
|
$
|
2,871,746
|
|
|
$
|
|
|
1-4 Family Non-Owner Occupied
|
|
|
2,084,520
|
|
|
|
0
|
|
|
|
2,461,281
|
|
|
|
0
|
|
1-4 Family Second Mortgage
|
|
|
481,843
|
|
|
|
0
|
|
|
|
566,444
|
|
|
|
0
|
|
Home Equity Lines of Credit
|
|
|
2,715,044
|
|
|
|
0
|
|
|
|
2,727,447
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
555,545
|
|
|
|
0
|
|
|
|
564,235
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
1-4 Family Construction Models/Speculative
|
|
|
308,927
|
|
|
|
0
|
|
|
|
355,355
|
|
|
|
0
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
5,720
|
|
|
|
0
|
|
|
|
324,602
|
|
|
|
0
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
3,146,513
|
|
|
|
0
|
|
|
|
3,310,170
|
|
|
|
0
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Lines of Credit
|
|
|
613,910
|
|
|
|
0
|
|
|
|
616,537
|
|
|
|
0
|
|
Commercial Construction
|
|
|
644,808
|
|
|
|
0
|
|
|
|
644,072
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
238,229
|
|
|
|
0
|
|
|
|
437,729
|
|
|
|
0
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
3,578,542
|
|
|
|
0
|
|
|
|
3,815,778
|
|
|
|
0
|
|
Acquisition and Development Loans
|
|
|
1,197,045
|
|
|
|
0
|
|
|
|
1,380,199
|
|
|
|
0
|
|
Consumer Loans
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
17,864,348
|
|
|
$
|
|
|
|
$
|
20,075,595
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-accrual status denotes loans on which, in the opinion of management, the collection of additional interest is unlikely, or loans that meet the non-accrual criteria
established by regulatory authorities. Payments received on a non-accrual loan are either applied to the outstanding principal balance or recorded as interest income, depending on an assessment of the collectibility of the principal balance of the
loan.
|
(2)
|
At September 30, 2012 and June 30, 2012, the Company had balances of approximately $6.1 million and $6.3 million, respectively, in loans that have matured and
continue to make current payments. These loans are not considered past due as a result of their payment status being current.
|
15
Part I FINANCIAL INFORMATION
The following table presents the aging of the recorded investment in past due loans as
of September 30, 2012 by class of loan. Performing loans are accruing loans less than 90 days past due. Nonperforming loans are all loans not accruing or greater than 90 days past due and accruing. At September 30, 2012, the Company had a balance of
approximately $6.1 million in loans that were contractually past maturity but were not considered past due as a result of the payment status being current.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater
Than
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59 Days
|
|
|
60-89 Days
|
|
|
90 Days
|
|
|
Total
|
|
|
Loans Not
|
|
|
|
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Total
|
|
Performing Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
2,050,531
|
|
|
$
|
247,273
|
|
|
$
|
|
|
|
$
|
2,297,804
|
|
|
$
|
54,638,081
|
|
|
$
|
56,935,885
|
|
1-4 Family Non-Owner Occupied
|
|
|
16,284
|
|
|
|
|
|
|
|
|
|
|
|
16,284
|
|
|
|
32,163,198
|
|
|
|
32,179,482
|
|
1-4 Family Second Mortgage
|
|
|
273,583
|
|
|
|
|
|
|
|
|
|
|
|
273,583
|
|
|
|
27,941,310
|
|
|
|
28,214,893
|
|
Home Equity Lines of Credit
|
|
|
777,134
|
|
|
|
19,991
|
|
|
|
|
|
|
|
797,125
|
|
|
|
61,346,364
|
|
|
|
62,143,489
|
|
Home Equity Investment Lines of Credit
|
|
|
235,512
|
|
|
|
|
|
|
|
|
|
|
|
235,512
|
|
|
|
4,470,647
|
|
|
|
4,706,159
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,339,759
|
|
|
|
1,339,759
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
311,401
|
|
|
|
311,401
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
235,540
|
|
|
|
|
|
|
|
|
|
|
|
235,540
|
|
|
|
62,324,755
|
|
|
|
62,560,295
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,588
|
|
|
|
144,588
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,303
|
|
|
|
108,303
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
405,037
|
|
|
|
616,238
|
|
|
|
|
|
|
|
1,021,275
|
|
|
|
193,628,054
|
|
|
|
194,649,329
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,794,184
|
|
|
|
4,794,184
|
|
Commercial Lines of Credit
|
|
|
587,524
|
|
|
|
1,183,484
|
|
|
|
|
|
|
|
1,771,008
|
|
|
|
20,245,827
|
|
|
|
22,016,835
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,471,587
|
|
|
|
8,471,587
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,275,168
|
|
|
|
37,275,168
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
14,622
|
|
|
|
95,903
|
|
|
|
|
|
|
|
110,525
|
|
|
|
5,646,750
|
|
|
|
5,757,275
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,749,919
|
|
|
|
17,749,919
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,099,017
|
|
|
|
2,099,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performing Loans
|
|
$
|
4,595,767
|
|
|
$
|
2,162,889
|
|
|
$
|
|
|
|
$
|
6,758,656
|
|
|
$
|
534,698,912
|
|
|
$
|
541,457,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,036,669
|
|
|
$
|
2,036,669
|
|
|
$
|
257,033
|
|
|
$
|
2,293,702
|
|
1-4 Family Non-Owner Occupied
|
|
|
57,235
|
|
|
|
58,470
|
|
|
|
1,870,021
|
|
|
|
1,985,726
|
|
|
|
98,794
|
|
|
|
2,084,520
|
|
1-4 Family Second Mortgage
|
|
|
|
|
|
|
41,014
|
|
|
|
393,349
|
|
|
|
434,363
|
|
|
|
47,480
|
|
|
|
481,843
|
|
Home Equity Lines of Credit
|
|
|
119,966
|
|
|
|
|
|
|
|
2,249,808
|
|
|
|
2,369,774
|
|
|
|
345,270
|
|
|
|
2,715,044
|
|
Home Equity Investment Lines of Credit
|
|
|
84,536
|
|
|
|
|
|
|
|
471,009
|
|
|
|
555,545
|
|
|
|
|
|
|
|
555,545
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
190,256
|
|
|
|
190,256
|
|
|
|
118,671
|
|
|
|
308,927
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
5,720
|
|
|
|
5,720
|
|
|
|
|
|
|
|
5,720
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
3,013,679
|
|
|
|
3,013,679
|
|
|
|
132,834
|
|
|
|
3,146,513
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
494,972
|
|
|
|
494,972
|
|
|
|
118,938
|
|
|
|
613,910
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
644,808
|
|
|
|
644,808
|
|
|
|
|
|
|
|
644,808
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
38,229
|
|
|
|
38,229
|
|
|
|
200,000
|
|
|
|
238,229
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
|
|
|
|
3,096,352
|
|
|
|
3,096,352
|
|
|
|
482,190
|
|
|
|
3,578,542
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
1,197,045
|
|
|
|
1,197,045
|
|
|
|
|
|
|
|
1,197,045
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Nonperforming Loans
|
|
$
|
261,737
|
|
|
$
|
99,484
|
|
|
$
|
15,701,917
|
|
|
$
|
16,063,138
|
|
|
$
|
1,801,210
|
|
|
$
|
17,864,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans
|
|
$
|
4,857,504
|
|
|
$
|
2,262,373
|
|
|
$
|
15,701,917
|
|
|
$
|
22,821,794
|
|
|
$
|
536,500,122
|
|
|
$
|
559,321,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
Part I FINANCIAL INFORMATION
The following table presents the aging of the recorded investment in past due loans as
of June 30, 2012 by class of loan. Performing loans are accruing loans less than 90 days past due. Nonperforming loans are all loans not accruing. At June 30, 2012, the Company had a balance of approximately $6.3 million in loans that were
contractually past maturity but were not considered past due as a result of the payment status being current.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater
Than
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59 Days
|
|
|
60-89 Days
|
|
|
90 Days
|
|
|
Total
|
|
|
Loans Not
|
|
|
|
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Past Due
|
|
|
Total
|
|
Performing Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
584,430
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
584,430
|
|
|
$
|
55,220,719
|
|
|
$
|
55,805,149
|
|
1-4 Family Non-Owner Occupied
|
|
|
375,660
|
|
|
|
303,667
|
|
|
|
|
|
|
|
679,327
|
|
|
|
31,188,492
|
|
|
|
31,867,819
|
|
1-4 Family Second Mortgage
|
|
|
14,221
|
|
|
|
|
|
|
|
|
|
|
|
14,221
|
|
|
|
28,588,155
|
|
|
|
28,602,376
|
|
Home Equity Lines of Credit
|
|
|
114,558
|
|
|
|
23,230
|
|
|
|
|
|
|
|
137,788
|
|
|
|
62,968,449
|
|
|
|
63,106,237
|
|
Home Equity Investment Lines of Credit
|
|
|
200,657
|
|
|
|
|
|
|
|
|
|
|
|
200,657
|
|
|
|
4,874,516
|
|
|
|
5,075,173
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
145,771
|
|
|
|
|
|
|
|
145,771
|
|
|
|
367,695
|
|
|
|
513,466
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,250,946
|
|
|
|
1,250,946
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,573,280
|
|
|
|
53,573,280
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,476
|
|
|
|
145,476
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,368,866
|
|
|
|
5,368,866
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
744,536
|
|
|
|
|
|
|
|
|
|
|
|
744,536
|
|
|
|
194,006,468
|
|
|
|
194,751,004
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,743,721
|
|
|
|
5,743,721
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,693,593
|
|
|
|
21,693,593
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,079,839
|
|
|
|
7,079,839
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,965,008
|
|
|
|
34,965,007
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,261,518
|
|
|
|
8,261,518
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,691,018
|
|
|
|
17,691,018
|
|
Consumer Loans
|
|
|
|
|
|
|
58,394
|
|
|
|
|
|
|
|
58,394
|
|
|
|
2,051,903
|
|
|
|
2,110,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performing Loans
|
|
$
|
2,034,062
|
|
|
$
|
531,062
|
|
|
$
|
|
|
|
$
|
2,565,124
|
|
|
$
|
535,039,662
|
|
|
$
|
537,604,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
105,333
|
|
|
$
|
|
|
|
$
|
2,124,062
|
|
|
$
|
2,229,395
|
|
|
$
|
642,351
|
|
|
$
|
2,871,746
|
|
1-4 Family Non-Owner Occupied
|
|
|
|
|
|
|
|
|
|
|
2,405,774
|
|
|
|
2,405,774
|
|
|
|
55,507
|
|
|
|
2,461,281
|
|
1-4 Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
499,154
|
|
|
|
499,154
|
|
|
|
67,290
|
|
|
|
566,444
|
|
Home Equity Lines of Credit
|
|
|
14,607
|
|
|
|
|
|
|
|
2,371,962
|
|
|
|
2,386,569
|
|
|
|
340,878
|
|
|
|
2,727,447
|
|
Home Equity Investment Lines of Credit
|
|
|
|
|
|
|
134,195
|
|
|
|
430,041
|
|
|
|
564,236
|
|
|
|
|
|
|
|
564,236
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
235,945
|
|
|
|
235,945
|
|
|
|
119,410
|
|
|
|
355,355
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
324,602
|
|
|
|
324,602
|
|
|
|
|
|
|
|
324,602
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
3,166,992
|
|
|
|
3,166,992
|
|
|
|
143,178
|
|
|
|
3,310,170
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
122,129
|
|
|
|
494,407
|
|
|
|
616,536
|
|
|
|
|
|
|
|
616,536
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
644,072
|
|
|
|
644,072
|
|
|
|
|
|
|
|
644,072
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
237,957
|
|
|
|
237,957
|
|
|
|
199,772
|
|
|
|
437,729
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
|
|
|
|
3,144,721
|
|
|
|
3,144,721
|
|
|
|
671,057
|
|
|
|
3,815,778
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
1,380,199
|
|
|
|
1,380,199
|
|
|
|
|
|
|
|
1,380,199
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Nonperforming Loans
|
|
$
|
119,940
|
|
|
$
|
256,324
|
|
|
$
|
17,459,888
|
|
|
$
|
17,836,152
|
|
|
$
|
2,239,443
|
|
|
$
|
20,075,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans
|
|
$
|
2,154,002
|
|
|
$
|
787,386
|
|
|
$
|
17,459,888
|
|
|
$
|
20,401,276
|
|
|
$
|
537,279,105
|
|
|
$
|
557,680,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
Part I FINANCIAL INFORMATION
Troubled Debt Restructurings:
Included in loans individually impaired are loans with recorded investment of $15,345,654 and $15,590,705 for which the Company has
allocated $153,391 of specific reserves to customers whose terms have been modified in troubled debt restructurings as of both September 30, 2012 and June 30, 2012, respectively. Included in troubled debt restructurings are $1,608,276 and
$1,805,855 of restructured loans on non-accrual at September 30, 2012 and June 30, 2012, respectively. Of the restructured loans, both performing and non-accrual, one loan totaling $111,944 was not performing in accordance with its
modified terms. There are no commitments to lend additional amounts at September 30, 2012 and June 30, 2012.
The
following table presents the aggregate balance of loans by loan class whose terms have been modified in troubled debt restructurings as of September 30, 2012 and June 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
|
|
|
Outstanding
|
|
|
|
|
|
|
Recorded
|
|
|
|
|
|
Recorded
|
|
|
|
Number
|
|
|
Investment
|
|
|
Number
|
|
|
Investment
|
|
|
|
of Loans
|
|
|
9/30/2012
|
|
|
of Loans
|
|
|
6/30/2012
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
|
20
|
|
|
$
|
3,756,859
|
|
|
|
20
|
|
|
$
|
3,775,715
|
|
1-4 Family Non-Owner Occupied
|
|
|
1
|
|
|
|
49,594
|
|
|
|
1
|
|
|
|
53,993
|
|
1-4 Family Second Mortgage
|
|
|
5
|
|
|
|
908,979
|
|
|
|
5
|
|
|
|
912,147
|
|
Home Equity Lines of Credit
|
|
|
1
|
|
|
|
63,782
|
|
|
|
1
|
|
|
|
63,782
|
|
Home Equity Investment Lines of Credit
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
1-4 Family Construction Models/Speculative
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
1
|
|
|
|
294,893
|
|
|
|
1
|
|
|
|
297,979
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
12
|
|
|
|
8,230,906
|
|
|
|
12
|
|
|
|
8,264,020
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Lines of Credit
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
2
|
|
|
|
40,485
|
|
|
|
2
|
|
|
|
40,696
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Acquisition and Development Loans
|
|
|
2
|
|
|
|
2,000,156
|
|
|
|
2
|
|
|
|
2,182,373
|
|
Consumer Loans
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
44
|
|
|
$
|
15,345,654
|
|
|
|
44
|
|
|
$
|
15,590,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The summary of activity for troubled debt restructured loans for the three months ending September 30, 2012 was as
follows:
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30, 2012
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
Beginning Balance
|
|
$
|
15,590,705
|
|
Additions
|
|
|
|
|
Charge-offs
|
|
|
(3,688
|
)
|
Payoffs or pay downs
|
|
|
(241,363
|
)
|
|
|
|
|
|
Ending Balance
|
|
$
|
15,345,654
|
|
|
|
|
|
|
18
Part I FINANCIAL INFORMATION
During the periods ended September 30, 2012 and September 30, 2011, the terms
of certain loans to borrowers experiencing financial difficulty were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the
loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. In order to determine whether a borrower is
experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the
Companys internal underwriting policy.
The following table presents loans, by classes, which were modified during the
three months ended September 30, 2012. All modifications during the three months ended September 30, 2012 were limited to loans which were already classified as troubled debt restructurings and involved an extension of the maturity dates
and were for periods ranging from 12 months to 24 months.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
|
|
|
|
Pre-Modification
|
|
|
Post-Modification
|
|
|
|
Number
|
|
|
Outstanding
Recorded
|
|
|
Outstanding
Recorded
|
|
|
|
of Loans
|
|
|
Investment
|
|
|
Investment
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
1-4 Family Non-Owner Occupied
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate
|
|
|
1
|
|
|
$
|
1,283,869
|
|
|
$
|
1,283,869
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Acquisition and Development
|
|
|
1
|
|
|
|
816,672
|
|
|
|
816,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2
|
|
|
$
|
2,100,541
|
|
|
$
|
2,100,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The troubled debt restructurings described above did not result in an increase in the allowance for loan
losses for the three months ended September 30, 2012, and did not result in charge offs during the three months ended September 30, 2012.
The following table presents loans by class modified as troubled debt restructurings that occurred during the three-month period ended September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2011
|
|
|
|
|
|
|
Pre-Modification
|
|
|
Post-Modification
|
|
|
|
Number
|
|
|
Outstanding
Recorded
|
|
|
Outstanding
Recorded
|
|
|
|
of Loans
|
|
|
Investment
|
|
|
Investment
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate
|
|
|
1
|
|
|
$
|
295,362
|
|
|
$
|
295,362
|
|
Commercial and Industrial
|
|
|
1
|
|
|
|
44,149
|
|
|
|
44,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2
|
|
|
$
|
339,511
|
|
|
$
|
339,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The troubled debt restructurings described above increased the allowance for loan losses by $36,395 and
did not result in charge offs during the period ended September 30, 2011.
19
Part I FINANCIAL INFORMATION
During the three months ended September 30, 2012, one loan modified as a troubled
debt restructure had a payment default within twelve months following the modification.
The following table presents loans by
class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period ended September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Modification
|
|
|
Post-Modification
|
|
|
|
Number
|
|
|
Outstanding
Recorded
|
|
|
Outstanding
Recorded
|
|
|
|
of Loans
|
|
|
Investment
|
|
|
Investment
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Non-Owner Occupied
|
|
|
13
|
|
|
$
|
1,050,206
|
|
|
$
|
1,050,206
|
|
Home Equity Lines of Credit
|
|
|
1
|
|
|
|
63,782
|
|
|
|
63,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
14
|
|
|
$
|
1,113,988
|
|
|
$
|
1,113,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the purpose of this disclosure, a loan is considered to be in payment default once it is 90 days contractually past
due under the modified terms.
The troubled debt restructurings that subsequently defaulted described above did not result in
increasing the allowance or result in charge offs during the period ending September 30, 2011.
Credit Quality Indicators
The Company categorizes loans into risk strata based on relevant borrower information about the ability to service debt.
This information includes a review of current financial information, historic payment experience, credit documentation, relevant public information and other factors, as determined by credit underwriting guidelines. Through its analysis of
individual borrowers, the Company classifies each loan as to credit risk. All loans considered non-homogeneous, specifically those that are deemed commercial and industrial or commercial real estate loans, are subject to review by the Company,
regardless of loan size. In practice, these loans are reviewed continually and changes to the risk rating, if necessary, occur on a quarterly basis. Loans that are considered homogeneous, or those which fall into the categories of one-to-four family
loans or into consumer loans, are not individually rated annually. The payment performance of the homogeneous loans serves as the clear credit indicator of classification into the categories of pass-rated loans or into substandard, non-accrual
loans. Homogeneous loans that are less than 90 days past due are generally reported as pass-rated loans, unless related to a rated commercial and industrial or commercial real estate loan. Homogeneous loans which are greater than 90 days past
due are placed on non-accrual and rated substandard. Payment performance indicators are based on performance through September 30, 2012. The Company uses the following definitions for adverse risk ratings:
Special Mention.
Loans classified as special mention have a potential weakness that requires close attention. If left unattended,
the potential weaknesses may result in further deterioration in the repayment prospects of the loan or of the institutions credit position at a future date.
Substandard.
Loans classified as substandard are protected inadequately by the current financial means of the borrower or through the liquidation of collateral pledged. Loans classified as
substandard have a well-defined weakness and without substantial intervention, there is a distinct possibility that the Company may incur a loss. As a matter of practice, if the Company feels that a total loss is imminent, it
20
Part I FINANCIAL INFORMATION
designates nearly all of these loans to charge off. Accordingly, the Company uses the loan
classification of doubtful (as defined hereafter), sparingly.
Doubtful.
Loans classified as doubtful have all of the
inherent weaknesses of those loans classified as substandard with the added structural weakness that the collection in full is highly unlikely. As such, this category is used sparingly by the Company.
As of September 30, 2012, and based on the most recent analysis performed by the Company, the risk category of loans by class of
loan was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
(1)
|
|
|
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Total
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
56,662,038
|
|
|
$
|
0
|
|
|
$
|
2,567,550
|
|
|
$
|
0
|
|
|
$
|
59,229,588
|
|
1-4 Family Non-Owner Occupied
|
|
|
30,693,293
|
|
|
|
1,108,211
|
|
|
|
2,462,498
|
|
|
|
0
|
|
|
|
34,264,002
|
|
1-4 Family Second Mortgage
|
|
|
27,762,887
|
|
|
|
205,384
|
|
|
|
728,464
|
|
|
|
0
|
|
|
|
28,696,735
|
|
Home Equity Lines of Credit
|
|
|
62,045,109
|
|
|
|
49,585
|
|
|
|
2,763,839
|
|
|
|
0
|
|
|
|
64,858,533
|
|
Home Equity Investment Lines of Credit
|
|
|
4,312,353
|
|
|
|
200,846
|
|
|
|
748,505
|
|
|
|
0
|
|
|
|
5,261,704
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
1,030,832
|
|
|
|
0
|
|
|
|
308,927
|
|
|
|
0
|
|
|
|
1,339,759
|
|
1-4 Family Construction Models/Speculative
|
|
|
93,964
|
|
|
|
0
|
|
|
|
526,364
|
|
|
|
0
|
|
|
|
620,328
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
61,448,233
|
|
|
|
1,112,062
|
|
|
|
5,720
|
|
|
|
0
|
|
|
|
62,566,015
|
|
Multi-Family Second Mortgage
|
|
|
144,588
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
144,588
|
|
Multi-Family Construction
|
|
|
108,303
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
108,303
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
182,950,964
|
|
|
|
3,389,855
|
|
|
|
11,455,022
|
|
|
|
0
|
|
|
|
197,795,841
|
|
Commercial Second Mortgage
|
|
|
4,794,184
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,794,184
|
|
Commercial Lines of Credit
|
|
|
19,724,964
|
|
|
|
0
|
|
|
|
2,905,781
|
|
|
|
0
|
|
|
|
22,630,745
|
|
Commercial Construction
|
|
|
8,471,587
|
|
|
|
0
|
|
|
|
644,808
|
|
|
|
0
|
|
|
|
9,116,395
|
|
Commercial and Industrial Loans
|
|
|
36,356,799
|
|
|
|
87,877
|
|
|
|
1,068,721
|
|
|
|
0
|
|
|
|
37,513,397
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
4,901,956
|
|
|
|
38,650
|
|
|
|
4,395,212
|
|
|
|
0
|
|
|
|
9,335,818
|
|
Acquisition and Development Loans
|
|
|
17,367,339
|
|
|
|
0
|
|
|
|
1,579,625
|
|
|
|
0
|
|
|
|
18,946,964
|
|
Consumer Loans
|
|
|
2,099,017
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
2,099,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
520,968,410
|
|
|
$
|
6,192,470
|
|
|
$
|
32,161,036
|
|
|
$
|
0
|
|
|
$
|
559,321,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $2.1 million in non-homogeneous loans which are subject to individual review for risk rating included in the pass risk category based on payment status as
they have not yet been individually reviewed.
|
21
Part I FINANCIAL INFORMATION
As of June 30, 2012, and based on the most recent analysis performed by the Company, the risk
category of loans by class of loan was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
(1)
|
|
|
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Total
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
55,526,297
|
|
|
$
|
0
|
|
|
$
|
3,150,598
|
|
|
$
|
|
|
|
$
|
58,676,895
|
|
1-4 Family Non-Owner Occupied
|
|
|
30,621,009
|
|
|
|
1,117,122
|
|
|
|
2,590,969
|
|
|
|
|
|
|
|
34,329,100
|
|
1-4 Family Second Mortgage
|
|
|
28,147,735
|
|
|
|
206,701
|
|
|
|
814,384
|
|
|
|
|
|
|
|
29,168,820
|
|
Home Equity Lines of Credit
|
|
|
63,030,206
|
|
|
|
49,585
|
|
|
|
2,753,893
|
|
|
|
|
|
|
|
65,833,684
|
|
Home Equity Investment Lines of Credit
|
|
|
4,828,651
|
|
|
|
200,886
|
|
|
|
609,872
|
|
|
|
|
|
|
|
5,639,409
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
513,466
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
513,466
|
|
1-4 Family Construction Models/Speculative
|
|
|
724,177
|
|
|
|
0
|
|
|
|
882,124
|
|
|
|
|
|
|
|
1,606,301
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
52,448,152
|
|
|
|
1,124,756
|
|
|
|
324,974
|
|
|
|
|
|
|
|
53,897,882
|
|
Multi-Family Second Mortgage
|
|
|
145,476
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
145,476
|
|
Multi-Family Construction
|
|
|
5,368,866
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
5,368,866
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
183,422,738
|
|
|
|
3,100,295
|
|
|
|
11,538,141
|
|
|
|
|
|
|
|
198,061,174
|
|
Commercial Second Mortgage
|
|
|
5,743,721
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
5,743,721
|
|
Commercial Lines of Credit
|
|
|
19,401,017
|
|
|
|
0
|
|
|
|
2,909,112
|
|
|
|
|
|
|
|
22,310,129
|
|
Commercial Construction
|
|
|
7,079,104
|
|
|
|
0
|
|
|
|
644,807
|
|
|
|
|
|
|
|
7,723,911
|
|
Commercial and Industrial Loans
|
|
|
34,042,381
|
|
|
|
91,634
|
|
|
|
1,268,721
|
|
|
|
|
|
|
|
35,402,736
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
8,217,784
|
|
|
|
39,374
|
|
|
|
3,820,138
|
|
|
|
|
|
|
|
12,077,296
|
|
Acquisition and Development Loans
|
|
|
16,486,141
|
|
|
|
0
|
|
|
|
2,585,076
|
|
|
|
|
|
|
|
19,071,217
|
|
Consumer Loans
|
|
|
2,110,297
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
2,110,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
517,857,218
|
|
|
$
|
5,930,353
|
|
|
$
|
33,892,809
|
|
|
$
|
|
|
|
$
|
557,680,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $2.6 million in non-homogeneous loans which are subject to individual review for risk rating included in the pass risk category based on payment status as
they have not yet been individually reviewed.
|
NOTE 4 MORTGAGE BANKING ACTIVITIES
Loans held for sale at September 30, 2012 and June 30, 2012 were $19,765,946 and $25,062,786, respectively.
The Company utilizes the fair value option for accounting for its loans held for sale. The fair value of loans held for sale
exceeded the unpaid principal balance of these loans by $651,108 and $738,742 as of September 30, 2012 and June 30, 2012, respectively. The gain on loans held for sale as of September 30, 2012 was reported as gain on sale of mortgage
loans on the consolidated statement of operations. Interest on loans held for sale was reported in interest income.
The
Company services real estate loans for investors that are not included in the accompanying consolidated financial statements. Mortgage servicing rights are established based on the fair value of servicing rights retained on loans originated by the
Company and subsequently sold in the secondary market. Mortgage servicing rights are included in the consolidated statements of financial condition under the caption Prepaid expenses and other assets. At September 30, 2012, the
mortgage loan servicing portfolio was approximately $1.0 billion.
22
Part I FINANCIAL INFORMATION
Originated mortgage servicing rights capitalized and amortized during the three months
ended September 30, 2012 and 2011 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30
|
|
|
|
2012
|
|
|
2011
|
|
Servicing rights:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
$
|
6,867,334
|
|
|
$
|
7,519,287
|
|
Additions
|
|
|
1,548,248
|
|
|
|
520,263
|
|
Amortized to expense
|
|
|
(972,306
|
)
|
|
|
(773,379
|
)
|
Change in valuation allowance
|
|
|
(604,179
|
)
|
|
|
(698,468
|
)
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
6,839,097
|
|
|
$
|
6,567,703
|
|
|
|
|
|
|
|
|
|
|
Activity in the valuation allowance for mortgage servicing rights over the three months ended
September 30, 2012, as compared with the same periods during 2011, were as follows:
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Three months ended
|
|
|
|
September 30, 2012
|
|
|
September 30, 2011
|
|
Balance, beginning of period
|
|
$
|
(816,481
|
)
|
|
$
|
(304,001
|
)
|
Impairment charges
|
|
|
(604,179
|
)
|
|
|
(698,468
|
)
|
Impairment recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
(1,420,660
|
)
|
|
$
|
(1,002,469
|
)
|
|
|
|
|
|
|
|
|
|
Mortgage banking activities for the three months ended September 30, 2012 and 2011, net consisted of
the following:
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30
|
|
|
|
2012
|
|
|
2011
|
|
Mortgage loan servicing fees
|
|
$
|
671,611
|
|
|
$
|
654,577
|
|
Amortization of mortgage loan servicing rights
|
|
|
(972,306
|
)
|
|
|
(773,379
|
)
|
Impairment of mortgage loan servicing rights
|
|
|
(604,179
|
)
|
|
|
(698,468
|
)
|
|
|
|
|
|
|
|
|
|
Mortgage loan servicing (loss), net
|
|
|
(904,874
|
)
|
|
|
(817,270
|
)
|
|
|
|
Changes in fair value of loans held for sale
|
|
|
(87,634
|
)
|
|
|
231,052
|
|
Changes in fair value of mortgage banking derivatives
|
|
|
567,931
|
|
|
|
748,776
|
|
Realized gains on sale of loans
|
|
|
3,550,824
|
|
|
|
847,607
|
|
|
|
|
|
|
|
|
|
|
Gain on the sale of mortgage loans
|
|
$
|
4,031,121
|
|
|
$
|
1,827,435
|
|
|
|
|
|
|
|
|
|
|
The above amounts do not include non-interest expense related to mortgage banking activities.
At September 30, 2012 and June 30, 2012, the Company had interest rate-lock commitments on $74,101,724 and $65,996,365,
respectively, of loans intended for sale in the secondary market. These commitments are considered to be free-standing derivatives and the change in fair value is recorded in the consolidated financial statements. The fair value of these commitments
as of September 30, 2012 and June 30, 2012 was estimated to be $3,067,188 and $1,773,453, respectively, as a reduction of accrued expenses and other liabilities in the consolidated statements of financial position. In order to mitigate the
interest rate risk represented by these interest rate-lock commitments, the Company entered into contracts to sell mortgage loans of $65,021,613 and $69,150,472 as of September 30, 2012 and June 30, 2012,
23
Part I FINANCIAL INFORMATION
respectively. These contracts are also considered to be free-standing derivatives and the change in fair
value is also recorded in the consolidated financial statements. The fair value of these contracts at September 30, 2012 and June 30, 2012 were estimated to be $(843,522) and $(117,718) respectively. These amounts were netted against the
fair value of interest rate-lock commitments recorded in accrued expenses and other liabilities. Changes in fair value for both types of derivatives are reported in mortgage banking activities in the consolidated statements of operations.
NOTE 5 STOCK BASED COMPENSATION
The 2010 Equity Incentive Plan (the 2010 Plan) replaced the 2008 Equity Incentive Plan and all remaining
available shares from the 2008 Equity Incentive Plan were available for distribution under the 2010 Plan. Generally, the Company can issue incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock and other
stock-based compensation under the 2010 Plan; Generally, for incentive stock options, a percentage of the options awarded become exercisable on the date of grant and on each anniversary date of grant. The option period expires ten years from the
date of grant, except for awards to individuals who own more than 10% of the Companys outstanding common shares. Incentive stock options awarded to individuals owning more than 10% of the Companys outstanding common shares may only be
granted if the exercise price of such incentive stock options is at least 110% of the fair market value on the date of grant and the term of such options must expire not later than five years from the date of grant.
Previously, nonqualified stock options have been granted to directors, which vest immediately. The option period expires ten years from
the date of grant and the exercise price is the market price at the date of grant.
For the three months ended
September 30, 2012, and 2011, compensation expense of $35,906 and $61,005, respectively, was recognized in the income statement related to the vesting of option awards.
As of September 30, 2012, there was $288,169 of compensation expense related to unvested awards not yet recognized in the consolidated financial statements. The weighted-average period over which
this expense is to be recognized is 1.7 years.
The aggregate intrinsic value of all options outstanding at September 30,
2012 was $322,962. The aggregate intrinsic value of all options that were exercisable at September 30, 2012 was $71,865.
Options outstanding at September 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
Exercisable
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
Range of
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
Exercise
|
|
|
|
|
Remaining
|
|
|
|
|
|
Exercise
|
|
Price
|
|
Number
|
|
|
Life
|
|
|
Number
|
|
|
Price
|
|
$1.79 to $4.42
|
|
|
561,100
|
|
|
|
8.05
|
|
|
|
248,340
|
|
|
$
|
2.29
|
|
$8.32 to $13.64
|
|
|
177,456
|
|
|
|
2.30
|
|
|
|
195,494
|
|
|
|
11.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
738,556
|
|
|
|
6.67
|
|
|
|
443,834
|
|
|
$
|
6.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
Part I FINANCIAL INFORMATION
A summary of stock-based compensation activity for the three months ended
September 30, 2012 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30, 2012
|
|
|
|
Total options
outstanding
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
Options outstanding, beginning of period
|
|
|
740,256
|
|
|
$
|
4.15
|
|
Forfeited
|
|
|
(7,200
|
)
|
|
|
3.06
|
|
Expired
|
|
|
(4,500
|
)
|
|
|
10.64
|
|
Exercised
|
|
|
|
|
|
|
|
|
Granted
|
|
|
10,000
|
|
|
|
1.96
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, end of period
|
|
|
738,556
|
|
|
$
|
4.28
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of period
|
|
|
443,834
|
|
|
|
6.15
|
|
|
|
|
|
|
|
|
|
|
The weighted-average remaining contractual life of options outstanding as of September 30, 2012 was
6.7 years. The weighted-average remaining contractual life of vested options outstanding as of September 30, 2012 was 4.7 years.
The fair value for stock options granted during the three months ended September 30, 2012, which consisted of individual grants in July and August 2012, were determined at the date of grant using a
Black-Scholes options-pricing model and the following assumptions:
|
|
|
|
|
|
|
September 30
|
|
|
|
2012
|
|
Expected weighted average risk-free interest rate
|
|
|
0.81
|
%
|
Expected weighted average life (in years)
|
|
|
6.00
|
|
Expected volatility
|
|
|
60.00
|
%
|
Expected dividend yield
|
|
|
0.00
|
%
|
The weighted-average fair value of these grants was $1.10 per option. The expected average risk-free rate
is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the life of the option. The expected average life represents the weighted-average period of time that options granted are expected to be
outstanding giving consideration to vesting schedules, historical exercise and forfeiture patterns. Expected volatility is based on historical volatilities of the Companys common shares. The expected dividend yield is based on historical
information.
There were 420,790 restricted shares issued to directors and executive officers with a weighted average fair
value of $1.84 per share at September 30, 2012. During the three months ended September 30, 2012, the Company issued 77,937 restricted stock awards to directors of the Company in connection with the reinstitution of a directors
compensation plan. This grant received prior approval from the OCC. The total fair value of restricted shares issued at September 30, 2012 was $773,148. As of September 30, 2012, there was $370,729 of compensation expense related to
unvested awards not yet recognized in the consolidated financial statements. The weighted-average period of time over which this expense is to be recognized was 1.77 years at September 30, 2012.
25
Part I FINANCIAL INFORMATION
A summary of changes in the Companys restricted shares for the three months ended
September 30, 2012 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Grant-Date
|
|
Nonvested Shares
|
|
Shares
|
|
|
Fair Value
|
|
Nonvested at July 1, 2012
|
|
|
162,333
|
|
|
$
|
303,537
|
|
Granted
|
|
|
77,937
|
|
|
|
157,432
|
|
Vested
|
|
|
(48,000
|
)
|
|
|
(90,240
|
)
|
Forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at September 30, 2012
|
|
|
192,270
|
|
|
$
|
370,729
|
|
|
|
|
|
|
|
|
|
|
There were 2,330,210 shares available for future issuance under the 2010 Plan at September 30, 2012.
NOTE 6 EARNINGS PER SHARE
The following table discloses the income (loss) per share for the three months ended September 30, 2012 and
September 30, 2011, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Income
|
|
|
|
|
|
Per Share
|
|
|
Income
|
|
|
|
|
|
Per Share
|
|
|
|
(Loss)
|
|
|
Shares
|
|
|
Amount
|
|
|
(Loss)
|
|
|
Shares
|
|
|
Amount
|
|
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,551,087
|
|
|
|
25,832,271
|
|
|
$
|
0.06
|
|
|
$
|
(850,597
|
)
|
|
|
25,669,718
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
Effect of dilutive securitiesstock options and warrants
|
|
$
|
|
|
|
|
216,777
|
|
|
$
|
0.00
|
|
|
$
|
|
|
|
|
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,551,087
|
|
|
|
26,049,048
|
|
|
$
|
0.06
|
|
|
$
|
(850,597
|
)
|
|
|
25,669,718
|
|
|
$
|
(0.03
|
)
|
There were 235,496 and 618,338 options not considered in the diluted earnings per share calculation for
the three months ended September 30, 2012 and 2011, respectively, because they were not dilutive as the exercise price is higher than the average stock price for the periods. There was no dilution attributable to stock options for the three
months ended September 2011, since the Company was in a net loss position for the period.
Also included for consideration in
the diluted earnings per share calculation for the three month period ended September 30, 2012 were warrants to acquire common shares issued as part of two separate exchange offerings. The warrants issued on September 3, 2009 include
warrants to purchase 797,347 common shares, which expired on September 3, 2011. The warrants issued on March 16, 2010 include warrants to purchase 1,246,179 common shares and are exercisable at any time before March 16, 2015 at a
price of $1.75 per share. The warrants issued on March 16, 2010 were considered for potential dilution for the three months ended September 30, 2012.
26
Part I FINANCIAL INFORMATION
NOTE 7 FAIR VALUE
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in
the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the company has the ability to access as of
the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for
similar assets or liabilities, quoted market prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants would use to price an asset or liability.
The Company used the following methods and significant assumptions to estimate fair value.
Securities and mortgage-backed securities
. The fair value of securities available for sale is determined by obtaining quoted
market prices on nationally recognized securities exchanges, if available (Level 1 inputs). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities. The fair value of
mortgage-backed securities is determined through matrix pricing. This is a mathematical technique widely used 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 securities (Level 2 inputs).
Loans held for sale at fair
value
. The fair value of loans held for sale, which consist of single-family residential loans, is determined using quoted secondary market prices, adjusted for specific attributes of that loan or other observable data, such as outstanding
commitments from third party investors (Level 2 inputs).
Mortgage banking pipeline derivatives
. The fair value
of loan commitments is measured using current market rates for the associated mortgage loans (Level 2 inputs). The fair value of mandatory forward sales contracts is measured using secondary market pricing for similar product types (Level 2 inputs).
Impaired loans
. The fair value of impaired loans with specific allocations of the allowance for loan losses is
generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by
the independent appraisers to adjust for differences between the comparable sales and income data available as well as type and status of the property. Such adjustments are usually significant and typically result in a Level 3 classification of the
inputs for determining fair value.
Other real estate owned.
Nonrecurring adjustments to certain commercial and
residential real estate properties classified as other real estate owned are measured at fair value, less costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of
approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data approach. Such adjustments
are usually significant and typically result in a level 3 classification of the inputs for determining fair value.
27
Part I FINANCIAL INFORMATION
Appraisals for both collateral dependent impaired loans and other real estate owned are
performed by certified general appraisers for commercial properties or certified residential appraisers for residential properties, whose qualifications and licenses have been reviewed and verified by the Company. When the appraisals are received,
Credit Administration reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. The Company
currently utilizes a 9% discount for selling costs and it is applied to all properties, regardless of size. This discount is supported by the Companys most recent analysis. Also, an additional 10% discount is applied to properties with
appraisals performed greater than 12 months ago.
Loan Servicing Rights.
On a quarterly basis, loan servicing rights
are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. If the carrying amount on an individual tranche exceeds fair value, impairment is recorded on that tranche so that the servicing asset is carried at
fair value. Fair value is determined at a tranche level based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilizes assumptions that market participants would use in estimating
future net servicing income and that can be validated against available market data (Level 2).
28
Part I FINANCIAL INFORMATION
Assets and liabilities measured at fair value on a recurring basis at September 30,
2012 and June 30, 2012, respectively, are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
September 30, 2012
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FNMA structured note
|
|
$
|
2,003,600
|
|
|
$
|
|
|
|
$
|
2,003,600
|
|
|
$
|
|
|
Trust preferred and corporate securities
|
|
|
18,656,997
|
|
|
|
|
|
|
|
18,656,997
|
|
|
|
|
|
Mortgage-backed GSE securities
|
|
|
17,619,954
|
|
|
|
|
|
|
|
17,619,954
|
|
|
|
|
|
Loans held-for-sale
|
|
|
19,765,946
|
|
|
|
|
|
|
|
19,765,946
|
|
|
|
|
|
Interest rate-lock commitments
|
|
|
3,067,188
|
|
|
|
|
|
|
|
3,067,188
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory forward sales contracts
|
|
|
843,522
|
|
|
|
|
|
|
|
843,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
June 30, 2012
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FNMA structured note
|
|
$
|
2,009,320
|
|
|
$
|
|
|
|
$
|
2,009,320
|
|
|
$
|
|
|
Trust preferred and corportate securities
|
|
|
21,261,762
|
|
|
|
|
|
|
|
21,261,762
|
|
|
|
|
|
Mortgage-backed GSE securities
|
|
|
15,386,963
|
|
|
|
|
|
|
|
15,386,963
|
|
|
|
|
|
Loans held-for-sale
|
|
|
25,062,786
|
|
|
|
|
|
|
|
25,062,786
|
|
|
|
|
|
Interest rate-lock commitments
|
|
|
1,773,453
|
|
|
|
|
|
|
|
1,773,453
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory forward sales contracts
|
|
|
117,718
|
|
|
|
|
|
|
|
117,718
|
|
|
|
|
|
There were no transfers between Level 1 and Level 2 in the period ended September 30, 2012 or
June 30, 2012. The Company's policy is to transfer assets or liabilities from one level to another when the methodology to obtain the fair value changes such that there are more or fewer unobservable inputs.
29
Part I FINANCIAL INFORMATION
Assets measured at fair value on a nonrecurring basis at September 30, 2012 and
June 30, 2012, respectively are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
September 30, 2012
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
$
|
3,784,204
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,784,204
|
|
1-4 Family Construction
|
|
|
614,903
|
|
|
|
|
|
|
|
|
|
|
|
614,903
|
|
Multi-Family
|
|
|
5,720
|
|
|
|
|
|
|
|
|
|
|
|
5,720
|
|
Commercial Real Estate
|
|
|
5,201,249
|
|
|
|
|
|
|
|
|
|
|
|
5,201,249
|
|
Commercial Non-Real Estate
|
|
|
238,229
|
|
|
|
|
|
|
|
|
|
|
|
238,229
|
|
Land
|
|
|
3,938,058
|
|
|
|
|
|
|
|
|
|
|
|
3,938,058
|
|
Real estate owned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
|
2,256,177
|
|
|
|
|
|
|
|
|
|
|
|
2,256,177
|
|
Commercial Real Estate
|
|
|
2,136,191
|
|
|
|
|
|
|
|
|
|
|
|
2,136,191
|
|
Land
|
|
|
2,839,751
|
|
|
|
|
|
|
|
|
|
|
|
2,839,751
|
|
Impaired mortgage servicing rights
|
|
|
6,121,857
|
|
|
|
|
|
|
|
6,121,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
June 30, 2012
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
$
|
4,033,385
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,033,385
|
|
1-4 Family Construction
|
|
|
660,862
|
|
|
|
|
|
|
|
|
|
|
|
660,862
|
|
Multi-Family
|
|
|
324,974
|
|
|
|
|
|
|
|
|
|
|
|
324,974
|
|
Commercial Real Estate
|
|
|
5,688,747
|
|
|
|
|
|
|
|
|
|
|
|
5,688,747
|
|
Commercial Non-Real Estate
|
|
|
238,229
|
|
|
|
|
|
|
|
|
|
|
|
238,229
|
|
Land
|
|
|
4,223,074
|
|
|
|
|
|
|
|
|
|
|
|
4,223,074
|
|
Real estate owned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
|
2,042,573
|
|
|
|
|
|
|
|
|
|
|
|
2,042,573
|
|
Commercial Real Estate
|
|
|
923,262
|
|
|
|
|
|
|
|
|
|
|
|
923,262
|
|
Land
|
|
|
2,914,174
|
|
|
|
|
|
|
|
|
|
|
|
2,914,174
|
|
Impaired mortgage servicing rights
|
|
|
6,499,157
|
|
|
|
|
|
|
|
6,499,157
|
|
|
|
|
|
Impaired loans that are measured for impairment using the fair value of the collateral for collateral
dependent loans had a principal balance of $23.3 million after the application of impaired charge-offs and impaired recasting of $8.0 million, with a specific valuation allowance of $1.4 million at September 30, 2012. At June 30, 2012,
impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans had a principal balance of $26.3 million after the application of impaired charge-offs of $9.7 million, with a specific valuation
allowance of $1.4 million. The provision for loan losses related to changes in the fair value of impaired loans was $.1 million and $2.5 million for the three months ended September 30, 2012 and 2011, respectively.
Tranches of mortgage servicing rights carried at fair value totaled $6.1 million, which is made up of the outstanding balance of $7.5
million, net of a valuation allowance of $1.4 million at September 30, 2012. During the three months ended September 30, 2012 and 2011, the Company recognized an impairment charge of $0.6 million and $0.7 million respectively. Tranches of
mortgage servicing rights carried at fair value totaled $6.5 million, which is made up of the outstanding balance of $7.3 million, net of a valuation
30
Part I FINANCIAL INFORMATION
allowance of $0.8 million at June 30, 2012. Mortgage servicing rights are valued by an independent third party that is active in purchasing and selling these instruments. The value reflects
the characteristics of the underlying loans discounted at a market multiple.
Other real estate owned which is maintained at
fair value less costs to sell, had a net carrying amount of $7,232,119 and $7,733,578 at September 30, 2012, and June 30, 2012, respectively. The carrying amount of other real estate owned is not re-measured to fair value on a recurring
basis, but is subject to fair value adjustments when the carrying amount exceeds the fair value, less estimated selling costs. For the three months ended September 30, 2012, the Company recognized a net loss of $17,881 on the disposal of other
real estate owned compared to the gain of $140,112 recognized for three months ended September 30, 2011. The Company also recorded a provision for other real estate owned losses of $233,719 and $69,400 for the quarters ended September 30,
2012 and 2011, respectively. These direct write-downs recognized for the period are the result of obtaining updated appraisal valuations and reflect declining property values while holding the asset. The Company values all other real estate owned by
obtaining updated appraisal valuations every twelve months. There have been no upward adjustments made in determining fair value.
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value at
September 30,
2012
|
|
|
Valuation Techniques
|
|
Unobservable Inputs
|
|
Range and
(weighted
Average)
|
Impaired loans
|
|
$
|
13,782,363
|
|
|
Appraisal value - sales comparison approach
|
|
Adjustment by management to reflect current conditions and selling costs
|
|
9% - 19%
|
Real estate owned
|
|
|
7,232,119
|
|
|
Appraisal value - sales comparison approach
|
|
Adjustment by management to reflect current conditions and selling costs
|
|
9% - 19%
|
31
Part I FINANCIAL INFORMATION
The Company has elected the fair value option for loans held for sale. These loans are
intended for sale and are hedged with derivative instruments, and the Company believes the fair value is the best indicator of the valuation of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance
with the Companys policy on loans held for investment. None of these loans are 90 days or more past due or on nonaccrual as of September 30, 2012 and 2011.
As of September 30, 2012 and 2011, the aggregate fair value, contractual balance (including accrued interest), and gain or loss was as follows:
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
Aggregate fair value
|
|
$
|
19,765,946
|
|
|
$
|
12,856,969
|
|
Contractual balance
|
|
|
19,114,838
|
|
|
|
12,443,953
|
|
Gain (loss)
|
|
|
651,108
|
|
|
|
413,016
|
|
The total amount of gains (losses) from changes in fair value included in earnings for the period ended
September 30, 2011 and 2012 for loans held for sale were $231,052 and $(87,634) respectively.
The carrying amounts and
estimated fair values of financial instruments at September 30, 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Fair Value Measurements at September 30, 2012
|
|
|
|
Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(dollars in thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and amounts due from financial institutions
|
|
$
|
16,903
|
|
|
$
|
16,903
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
16,903
|
|
Interest-bearing deposits
|
|
|
97,672
|
|
|
|
97,672
|
|
|
|
|
|
|
|
|
|
|
|
97,672
|
|
Securities available for sale
|
|
|
38,281
|
|
|
|
|
|
|
|
38,281
|
|
|
|
|
|
|
|
38,281
|
|
Loans receivable, net
|
|
|
543,186
|
|
|
|
|
|
|
|
|
|
|
|
565,090
|
|
|
|
565,090
|
|
Loans receivable held for sale, net
|
|
|
19,766
|
|
|
|
|
|
|
|
19,766
|
|
|
|
|
|
|
|
19,766
|
|
Federal Home Loan Bank stock
|
|
|
12,811
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Accrued interest receivable
|
|
|
2,142
|
|
|
|
|
|
|
|
126
|
|
|
|
2,016
|
|
|
|
2,142
|
|
Commitments to make loans intended to be sold
|
|
|
3,067
|
|
|
|
|
|
|
|
3,067
|
|
|
|
|
|
|
|
3,067
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and savings
|
|
|
(284,340
|
)
|
|
|
(284,340
|
)
|
|
|
|
|
|
|
|
|
|
|
(284,340
|
)
|
Time deposits
|
|
|
(361,810
|
)
|
|
|
|
|
|
|
(343,358
|
)
|
|
|
|
|
|
|
(343,358
|
)
|
Notes payable
|
|
|
(1,019
|
)
|
|
|
|
|
|
|
(1,019
|
)
|
|
|
|
|
|
|
(1,019
|
)
|
Advances from the Federal Home Loan Bank
|
|
|
(35,000
|
)
|
|
|
|
|
|
|
(37,173
|
)
|
|
|
|
|
|
|
(37,173
|
)
|
Mandatory forward sale contract
|
|
|
(844
|
)
|
|
|
|
|
|
|
(844
|
)
|
|
|
|
|
|
|
(844
|
)
|
Accrued interest payable
|
|
|
(127
|
)
|
|
|
(28
|
)
|
|
|
(99
|
)
|
|
|
|
|
|
|
(127
|
)
|
32
Part I FINANCIAL INFORMATION
The carrying amount and estimated fair values of financial instruments at June 30,
2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Fair Value Measurements at June 30, 2012
|
|
|
|
Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(dollars in thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and amounts due from financial institutions
|
|
$
|
5,841
|
|
|
$
|
5,841
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,841
|
|
Interest-bearing deposits
|
|
|
114,270
|
|
|
|
114,270
|
|
|
|
|
|
|
|
|
|
|
|
114,270
|
|
Securities available for sale
|
|
|
38,658
|
|
|
|
|
|
|
|
38,658
|
|
|
|
|
|
|
|
38,658
|
|
Loans receivable, net
|
|
|
541,628
|
|
|
|
|
|
|
|
|
|
|
|
569,603
|
|
|
|
569,603
|
|
Loans receivable held for sale, net
|
|
|
25,063
|
|
|
|
|
|
|
|
25,063
|
|
|
|
|
|
|
|
25,063
|
|
Federal Home Loan Bank stock
|
|
|
12,811
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Accrued interest receivable
|
|
|
2,047
|
|
|
|
|
|
|
|
174
|
|
|
|
1,873
|
|
|
|
2,047
|
|
Commitments to make loans intended to be sold
|
|
|
1,773
|
|
|
|
|
|
|
|
1,773
|
|
|
|
|
|
|
|
1,773
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and savings
|
|
|
(271,412
|
)
|
|
|
(271,412
|
)
|
|
|
|
|
|
|
|
|
|
|
(271,412
|
)
|
Time deposits
|
|
|
(384,567
|
)
|
|
|
|
|
|
|
(385,872
|
)
|
|
|
|
|
|
|
(385,872
|
)
|
Notes payable
|
|
|
(1,046
|
)
|
|
|
|
|
|
|
(1,046
|
)
|
|
|
|
|
|
|
(1,046
|
)
|
Advances from the Federal Home Loan Bank
|
|
|
(35,000
|
)
|
|
|
|
|
|
|
(37,222
|
)
|
|
|
|
|
|
|
(37,222
|
)
|
Mandatory forward sale contract
|
|
|
(118
|
)
|
|
|
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
(118
|
)
|
Accrued interest payable
|
|
|
(120
|
)
|
|
|
(112
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
(120
|
)
|
The estimated fair value amounts have been determined by the Company using available market information
and appropriate valuation methodologies. However, considerable judgment is involved in interpreting market data so as to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts
the Company could realize in a current market exchange and may not necessarily be the exit price. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
The Company used the following methods and assumptions to estimate fair value for items not described above:
Cash and amounts due from financial institutions, interest-bearing deposits, and federal funds sold.
The carrying amount is a
reasonable estimate of fair value because of the short maturity of these instruments and therefore are classified as Level 1.
Loans receivable
. For performing variable-rate loans that reprice frequently and with no significant change in credit risk, fair
values are based on carrying values resulting in a level 3 classification. For other performing loans receivable, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary
market sources adjusted to reflect differences in servicing and credit costs resulting in a level 3 classification.
Federal Home Loan Bank stock.
It was not practical to determine the fair value of FHLB stock due to
33
Part I FINANCIAL INFORMATION
restrictions placed on its transferability.
Accrued interest receivable and accrued interest payable
. The carrying amount is a reasonable estimate of the fair value. The fair
value level classification is consistent with the related final instrument.
Demand deposits and time deposits.
The
fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date resulting in a level 1 classification. The fair value of fixed-maturity certificates of deposit is estimated
using discounted cash flows and rates currently offered for deposits of similar remaining maturities resulting in a level 2 classification.
Note payable.
The carrying amount is a reasonable estimate of the fair value resulting in a level 2 classification.
Federal Home Loan Bank Advance.
The fair value of the Companys FHLB debt is estimated based on the current rates offered to the Company for debt of the same remaining maturities resulting in
a level 2 classification.
NOTE 8 NOTE PAYABLE
On November 24, 2008, one of the Companys subsidiaries obtained a $1.4 million dollar loan from another
financial institution with a principal balance of $1,019,445 as of September 30, 2012. The loan was a refinance of a line of credit loan and is collateralized by the Companys Solon, Ohio headquarters building. The note carries a variable
interest rate that adjusts to The Wall Street Journal published prime lending rate plus 50 basis points. The loan required the payment of interest only for nine months and then converted to an amortizing loan for a term of 15 years. At
September 30, 2012, the interest rate was 3.80%.
NOTE 9 REGULATORY MATTERS
The Company and the Bank are subject to various regulatory capital requirements, which are now administered by the
Board of Governors of the Federal Reserve System (the Federal Reserve Board) and the Office of the Comptroller of the Currency (OCC). Failure to meet minimum capital requirements can result in certain mandatory and possibly
additional discretionary actions by banking regulators that, if undertaken, could have a direct material effect on the Companys consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Banks
capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Prompt corrective action regulations provide five classifications: well capitalized; adequately capitalized; undercapitalized; significantly undercapitalized; and critically undercapitalized, although
these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and
capital restoration plans are required. The most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that
management believes have changed the Banks category.
34
Part I FINANCIAL INFORMATION
Federal regulations require savings institutions to maintain certain minimum levels of
regulatory capital. An institution that fails to comply with its regulatory capital requirements must obtain approval of a capital plan and can be subject to a capital directive and certain restrictions on its operations. At September 30, 2012,
the adjusted total minimum regulatory capital regulations require institutions to have a minimum tangible capital to adjusted total assets ratio of 1.5%; a minimum leverage ratio of core (Tier 1) capital to adjusted total assets of 4.0%; a minimum
ratio of core (Tier 1) capital to risk-weighted assets of 4.0%; and a minimum ratio of total capital to risk-weighted assets of 8.0%. At September 30, 2012 and 2011, respectively, the Bank exceeded all of the aforementioned regulatory capital
requirements. For more information, please see Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources.
On October 19, 2009, the Company and the Bank each entered into a Stipulation and Consent to the Issuance of Order to Cease and
Desist with the Office of Thrift Supervision (the OTS), whereby the Company and the Bank each consented to the issuance of an Order to Cease and Desist (the Company Order and the Bank Order) without admitting or
denying that grounds existed for the OTS to initiate an administrative proceeding against the Company or the Bank. Effective July 21, 2011, the OCC and the Federal Reserve Board succeeded to all powers, authorities, rights, and duties of the
OTS relating to the enforcement of the Bank and Company Orders, respectively, as a result of the regulatory transition under the Dodd-Frank Wall Street Reform and Consumer Protection. On August 27, 2012, the Bank was released from the Bank
Order.
The Company Order requires the Company to take several actions, including, but not limited to: (i) submit a
capital plan that includes, among other things, (1) the establishment of a minimum tangible capital ratio of tangible equity capital to total tangible assets commensurate with the Companys consolidated risk profile, and (2) specific
plans to reduce the risks to the Company from its current debt levels and debt servicing requirements; (ii) not declare, make or pay any cash dividends or other capital distributions or purchase, repurchase or redeem or commit to purchase,
repurchase or redeem Company equity stock without the prior non-objection of the OTS, except that this provision does not apply to immaterial capital stock redemptions that arise in the normal course of the Companys business in connection with
its stock-based compensation plans; and (iii) not incur, issue, renew, roll over or increase any debt or commit to do so without the prior non-objection of the OTS (debt includes loans, bonds, cumulative preferred stock, hybrid capital
instruments such as subordinated debt or trust preferred securities, and guarantees of debt).
The Company Order also imposes
certain on-going reporting obligations and additional restrictions on severance and indemnification payments, changes in directors and management, employment agreements and compensation arrangements that the Company may enter into, third-party
service contracts and transactions with affiliates.
At September 30, 2012, the Company believes it is in compliance with
all requirements of the Order that are required to date. The Company Order will remain in effect until terminated, modified, or suspended in writing.
Regulations limit capital distributions by savings institutions. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At September 30, 2012,
the Bank was not allowed to make any capital distributions without regulatory approval.
35
Part I FINANCIAL INFORMATION
At September 30, 2012, the Bank was in compliance with regulatory capital requirements
as set forth below (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To Be Well
|
|
|
|
|
|
|
|
|
|
|
|
|
Required
|
|
|
Capitalized Under
|
|
|
Required Under
|
|
|
|
|
|
|
|
|
|
For Capital
|
|
|
Prompt Corrective
|
|
|
Regulatory
|
|
|
|
Actual
|
|
|
Adequacy Purposes
|
|
|
Action Regulations
|
|
|
Bank Order
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital to risk weighted assets
|
|
$
|
79,587
|
|
|
|
13.34
|
%
|
|
$
|
47,765
|
|
|
|
8.00
|
%
|
|
$
|
59,706
|
|
|
|
10.00
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
Tier 1 (Core) Capital to risk weighted assets
|
|
|
72,017
|
|
|
|
12.06
|
%
|
|
|
23,882
|
|
|
|
4.00
|
%
|
|
|
35,824
|
|
|
|
6.00
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
Tier 1 (Core) Capital to adjusted total assets
|
|
|
72,017
|
|
|
|
9.16
|
%
|
|
|
31,454
|
|
|
|
4.00
|
%
|
|
|
39,318
|
|
|
|
5.00
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
Tangible Capital to adjusted total assets
|
|
|
72,017
|
|
|
|
9.16
|
%
|
|
|
11,795
|
|
|
|
1.50
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
At June 30, 2012, the Bank was in compliance with regulatory capital requirements as set forth below
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To Be Well
|
|
|
|
|
|
|
|
|
|
|
|
|
Required
|
|
|
Capitalized Under
|
|
|
Required Under
|
|
|
|
|
|
|
|
|
|
For Capital
|
|
|
Prompt Corrective
|
|
|
Regulatory
|
|
|
|
Actual
|
|
|
Adequacy Purposes
|
|
|
Action Regulations
|
|
|
Bank Order
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital to risk weighted assets
|
|
$
|
77,932
|
|
|
|
13.10
|
%
|
|
$
|
47,605
|
|
|
|
8.00
|
%
|
|
$
|
59,506
|
|
|
|
10.00
|
%
|
|
$
|
71,407
|
|
|
|
12.00
|
%
|
Tier 1 (Core) Capital to risk weighted assets
|
|
|
70,387
|
|
|
|
11.83
|
%
|
|
|
23,802
|
|
|
|
4.00
|
%
|
|
|
35,704
|
|
|
|
6.00
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
Tier 1 (Core) Capital to adjusted total assets
|
|
|
70,387
|
|
|
|
8.74
|
%
|
|
|
32,224
|
|
|
|
4.00
|
%
|
|
|
40,280
|
|
|
|
5.00
|
%
|
|
|
64,448
|
|
|
|
8.00
|
%
|
Tangible Capital to adjusted total assets
|
|
|
70,387
|
|
|
|
8.74
|
%
|
|
|
12,084
|
|
|
|
1.50
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
NOTE 10 FEDERAL INCOME TAXES
Management recorded net deferred tax assets at September 30, 2012 of $4.2 million. A valuation allowance is
established to reduce the deferred tax asset if it is more likely than not that the related tax benefits will not be realized. In managements opinion, it is more likely than not that the tax benefits will not be realized; consequently, a full
valuation allowance was established as of June 30, 2011. When determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all
available information. This information includes, but is not limited to, taxable income in prior periods, projected future income, and projected future reversals of deferred tax items. Based on these criteria, the Company determined that it was
necessary to carry a valuation allowance against deferred tax assets of $4.2 million at September 30, 2012 to reduce the carrying amount of the Companys net deferred tax asset to zero. At June 30, 2012, the Company recorded a
deferred tax asset of $4.8 million with a valuation allowance of $4.8 million reducing the carrying amount of the Companys net deferred tax asset to zero.
36
Item 2.
|
Managements Discussion and Analysis of Financial Condition and Results of Operations.
|
The following analysis discusses changes in financial condition and results of operations at and for the three months ended
September 30, 2012 for the Company, the Bank, its principal and wholly-owned subsidiary, PVFSC, a wholly-owned real estate subsidiary, Mid Pines Land Company, a wholly-owned real estate subsidiary, and PVF Holdings, Inc., PVF Community
Development and PVF Mortgage Corporation, three wholly-owned and currently inactive subsidiaries.
Forward-Looking Statements
When used in this Quarterly Report on Form 10-Q, the words or phrases will likely result, are expected
to, will continue, is anticipated, estimate, project, or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Companys market area, changes in policies by regulatory agencies, fluctuations in interest rates,
demand for loans in the Companys market area, and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Additional factors that may affect the Companys
results are discussed under Item 1A. Risk Factors in the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2012. The Company cautions readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The Company advises readers that the factors listed above could affect the Companys financial performance and could cause the Companys actual results for future periods to differ
materially from any opinions or statements expressed with respect to future periods in any current statements.
The Company
does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events except as and required by law.
Financial Condition
Consolidated assets of the Company were $779.1 million as of September 30, 2012, a decrease of approximately $12.3 million, or 1.6%,
as compared to June 30, 2012. The Companys regulatory capital ratios for Tier 1 (core) capital, Tier 1 risk-based capital, and total risk-based capital were 9.16%, 12.06%, and 13.34%, respectively, at September 30, 2012. At
September 30, 2012, the Companys cash and cash equivalents, which consist of cash, interest-bearing deposits and federal funds sold, totaled $114.6 million, a decrease of $5.5 million, or 4.6%, as compared to June 30, 2012. The
change in the Companys cash and cash equivalents consisted of increases in cash of $11.1 million and a decrease in interest bearing deposits of $16.6 million as the Company deployed a portion of its liquidity to fund the reduction in deposits
and reduce its cost of funds.
The Company continued the origination of fixed-rate, single-family loans in its marketplace,
with most originated for sale in the secondary market rather than for its portfolio. The origination and sale of fixed-rate loans has historically generated gains on sale and allowed the Company to increase its investment in loans serviced, without
assuming the interest-rate risk associated with holding long-term fixed-rate assets, which facilitates the maintenance of stronger liquidity levels. Mortgage application volume has remained elevated in the current quarter, due to a low interest rate
environment.
37
During the three months ended September 30, 2012, securities available for sale
decreased by $.4 million the result of the purchases of $4.0 million in mortgage-backed securities and $3.0 million in corporate securities, which was offset by principal repayments, calls exercised, amortization of book premium and changes in
market value of available for sale securities.
Loans receivable increased by $1.6 million, or .3%, during the three months
ended September 30, 2012. The Company continued its strategic focus on the origination of high quality commercial and industrial loans and select commercial real estate loans, experiencing growth in performing loans of approximately $3.7
million, or .7%, during this same period. During the quarter ended September 30, 2012, the Company recorded net charge-offs of $1.0 million. The desired decline in nonperforming loans, $2.2 million or 11.01% from June 30, 2012 is due to
the successful disposition of problem and nonperforming loans combined with the results of problem loan charge-offs. The Company historically recognized specific impairment on individual loans through the use of specific valuation allowance, but did
not charge off the impaired loan amount until the loan was disposed and removed from the loan accounting system. The loan balances were reported in the loan totals, including nonperforming loans, at the contractual amount and the specific allowance
was included and reported as part of the allowance for loan losses. During the three months ended December 31, 2011, the Company implemented an enhanced loan accounting system, which provides for the systematic recording of charged-off loans
for financial recognition without losing its ability to track the legal contractual amounts. As such, during the quarters ended March 31, 2012 and December 31, 2011, the Company charged off those loan amounts which had previously been
specifically impaired through the use of a specific valuation allowance, totaling approximately $0.7 million and $11.8 million, respectively. In addition to reducing loan balances, including nonperforming loans, the implementation of this new
enhanced loan accounting system had the impact of elevating reported charge-offs for the quarter ended December 31, 2011 and reducing the allowance for loan losses associated with specific valuation allowances this same period. The remaining
decline in nonperforming loans was the result of net dispositions and transfers to other real estate owned. The Company continues to sell almost all new residential loan production in the secondary market in this interest rate environment, as the
Company manages its interest rate and liquidity risk along with its capital ratios. As the Company continues to make meaningful progress in its problem asset resolution, it intends to continue accelerating the origination of commercial and
industrial loans for its portfolio as part of its plan to diversify the balance sheet.
The Company does not originate
sub-prime loans and only originates Alt A loans for sale, without recourse, in the secondary market. The Company considers subprime borrowers typically to have weakened credit histories that include payment delinquencies and possibly more severe
problems such as charge-offs, judgments and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories. Subprime
loans are loans to borrowers displaying one or more of these characteristics at the time of origination or purchase. The Company also does not originate any hybrid loans, low-doc/no-doc loans or payment option ARMs. All one-to-four family loans are
underwritten according to agency underwriting standards. Exceptions, if any, are submitted to the Companys board loan committee for approval. Any exposure the Company may have to these types of loans is immaterial.
The decrease of $5.3 million in loans receivable held for sale as of September 30, 2012 was the result of steady new loan
originations and timing differences between the origination and the sale of loans. One-to-four family mortgage application volume has remained elevated in the current period as a result of lower interest rates, resulting in higher refinancing
activity and related revenue.
For the three months ended September 30, 2012, other real estate owned decreased $.5
million. The activity for the period consisted of the addition of properties totaling approximately $.8 million, offset by
38
the disposal of properties totaling $1.1 million. The Company realized a net loss of approximately $0.02 million on the disposition of these properties. The Company also recorded an impairment
charge of $.2 million on the carrying amount of real estate still in inventory at September 30, 2012, based on updated valuations and market conditions. At September 30, 2012, the Company held 51 properties, totaling $7.2 million in other real
estate owned. The other real estate owned included 24 single-family properties, 20 land properties, and 7 commercial properties.
The Company generally seeks to fund loan activity and liquidity by generating deposits through its branch network and through the use of various borrowing facilities. Deposits decreased by $9.8 million,
or 1.5%, which was a result of an increase of $12.9 million in non-maturing deposits partially offset by a decrease of $22.8 million in retail certificates of deposit. The decline in retail certificates of deposit was strategically directed as part
of managements relationship pricing initiative which targeted rate sensitive, non-relationship deposits for reduction coupled with an emphasis on increasing commercial deposits. Management will continue to modify its noncore deposit strategies
to support the funding needs of the Companys loan activities, while maintaining appropriate liquidity levels, as it executes its strategies to diversify its funding mix by expanding core deposit relationships and building business deposits.
The increase in advances from borrowers for taxes and insurance of $2.5 million for the period ended September 30, 2012
was attributable to timing differences between the collection and payment of taxes and insurance. The increase of $7.1 million in accrued expenses and other liabilities was primarily the result of timing differences between the collection and
remittance of funds received on loans serviced for investors.
Results of Operations: Three months ended September 30, 2012, compared
to three months ended September 30, 2011
.
The Companys net income is dependent primarily on its net interest
income, which is the difference between interest earned on its loans and investments and interest paid on interest-bearing liabilities. Net interest income is determined by: (i) the difference between yields earned on interest-earning assets
and rates paid on interest-bearing liabilities (interest-rate spread); and (ii) the relative amounts of interest-earning assets and interest-bearing liabilities. The Companys interest-rate spread is affected by regulatory,
economic and competitive factors that influence interest rates, loan demand, the collectibility of loans, and deposit flows. Net interest income also includes amortization of loan origination fees, net of origination costs.
The Companys net income is also affected by the generation of non-interest income, which primarily consists of loan servicing
income, service fees on deposit accounts, and gains on the sale of loans held for sale. In addition, net income is affected by the level of operating expenses, loan loss provisions, and costs associated with the acquisition, maintenance and disposal
of real estate.
The Company recognized a net profit for the three months ended September 30, 2012 of $1.6 million, or
$0.06 per basic and diluted share, as compared to a net loss of $0.8 million, or $0.03 per basic and diluted share, for the prior-year comparable period. The increase in income is the result of an increase in net interest income of $.6 million, a
decrease in the provision for loan losses, of $.5 million and an increase in noninterest income primarily associated with mortgage banking activity of $1.6 million offset by an increase in operating expenses of $.3 million.
39
PART I FINANCIAL INFORMATION
Net Interest Income
Despite lower interest earning assets and liabilities, net interest income for the three months ended September 30, 2012 increased by $0.6 million, as compared to the prior-year comparable period.
Interest income increased slightly with a larger decline realized in interest expense. Total interest income decreased $0.01 million during the current period compared with the same period in the prior year. A continued effort to replace
nonperforming loans with performing loans as well as the change in mix of cash and available for sale securities to acquire better yielding assets limited the decline in yield during the ongoing low rate environment. Total interest expense declined
$.6 million from a year ago, partially due to a decline in deposits, but primarily due to the Companys ability to lower the cost funds. The low interest rate environment has allowed more repricing opportunities augmenting a more rapid decline
in cost of funds.
40
PART I FINANCIAL INFORMATION
The following table presents comparative information for the three months ended
September 30, 2012 and 2011, respectively, with respect to average balances and average yields and costs for interest-earning assets and interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
September 30, 2011
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
Balance
|
|
|
Interest
|
|
|
Yield/Cost
|
|
|
Balance
|
|
|
Interest
|
|
|
Yield/Cost
|
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
(1)
|
|
$
|
579,092
|
|
|
$
|
6,986
|
|
|
|
4.83
|
%
|
|
$
|
584,752
|
|
|
$
|
7,104
|
|
|
|
4.86
|
%
|
Mortgage-backed securities
|
|
|
16,241
|
|
|
|
80
|
|
|
|
1.98
|
%
|
|
|
4,911
|
|
|
|
50
|
|
|
|
4.07
|
%
|
Investments and other
|
|
|
129,776
|
|
|
|
345
|
|
|
|
1.06
|
%
|
|
|
151,019
|
|
|
|
244
|
|
|
|
0.65
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets
|
|
|
725,109
|
|
|
|
7,411
|
|
|
|
4.09
|
%
|
|
|
740,682
|
|
|
|
7,398
|
|
|
|
4.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-earning assets
|
|
|
55,441
|
|
|
|
|
|
|
|
|
|
|
|
42,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
780,550
|
|
|
|
|
|
|
|
|
|
|
$
|
783,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
647,398
|
|
|
$
|
1,326
|
|
|
|
0.82
|
%
|
|
$
|
651,711
|
|
|
$
|
1,949
|
|
|
|
1.20
|
%
|
Borrowings
|
|
|
36,028
|
|
|
|
270
|
|
|
|
3.00
|
%
|
|
|
36,135
|
|
|
|
272
|
|
|
|
2.98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities
|
|
|
683,426
|
|
|
|
1,596
|
|
|
|
0.93
|
%
|
|
|
687,846
|
|
|
|
2,221
|
|
|
|
1.29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing liabilities
|
|
|
26,555
|
|
|
|
|
|
|
|
|
|
|
|
24,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
709,981
|
|
|
|
|
|
|
|
|
|
|
|
712,655
|
|
|
|
|
|
|
|
|
|
Stockholders equity
|
|
|
70,570
|
|
|
|
|
|
|
|
|
|
|
|
70,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
780,551
|
|
|
|
|
|
|
|
|
|
|
$
|
783,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
|
|
$
|
5,815
|
|
|
|
|
|
|
|
|
|
|
$
|
5,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-rate spread
|
|
|
|
|
|
|
|
|
|
|
3.16
|
%
|
|
|
|
|
|
|
|
|
|
|
2.71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net yield on interest-earning assets
|
|
|
|
|
|
|
|
3.21
|
%
|
|
|
|
|
|
|
|
|
|
|
2.80
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets to interest-bearing liabilities
|
|
|
106.10
|
%
|
|
|
|
|
|
|
|
|
|
|
107.68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-accruing loans are included in the average loan balances for the periods presented.
|
41
PART I FINANCIAL INFORMATION
Provision for Loan Losses and Asset Quality
For the three months ended September 30, 2012, a provision for loan losses of $1.1 million was recorded to bring the total allowance
for loan losses to a level considered by management to be appropriate, based on managements evaluation of relevant factors, including the risk characteristics and trends of the loan portfolio, historic and current loss experience, current
economic conditions and underlying collateral valuations. This compares with the $1.5 million for the three months ended September 30, 2011.
The Company implemented an enhanced loan accounting system in December 2011 which provides for the systematic recording of charged-off loans for financial recognition without losing its ability to track
the legal contractual amounts. The Company charged off those loan amounts which had previously been specifically impaired. Remaining specific impairments known in prior periods as specific valuation allowances are now tracked as specific allocations
to the allowance. In addition to reducing loan balances, including nonperforming loans, this new enhanced loan accounting system had the impact of elevating reported charge-offs for the quarter ended December 31, 2011 and reducing the allowance
for loan losses associated with specific reserves. The provision for loan losses for the current period reflects managements judgments about the credit quality of the Companys loan portfolio. As of September 30, 2012, the allowance
for loan losses no longer consists of a specific component and a general component. Rather, the allowance for loan losses maintains specific allocations where appropriate on loans where known risks have been identified but no clear loss has been
quantified or deemed appropriate to be taken.
The following is a breakdown of the allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
June 30, 2012
|
|
General allowance
|
|
$
|
14,683,135
|
|
|
$
|
14,634,531
|
|
Specific allocation
|
|
|
1,452,505
|
|
|
|
1,418,334
|
|
|
|
|
|
|
|
|
|
|
Total allowance for loan losses
|
|
$
|
16,135,640
|
|
|
$
|
16,052,865
|
|
|
|
|
|
|
|
|
|
|
The allowance for loan losses remained flat at 2.9% of loans outstanding at September 30, 2012, and
June 30, 2012. The company recorded net charge-offs of $1.0 million for the current quarter down from the $2.4 million recorded for the quarter ended June 30, 2012. The coverage ratio of the allowance for loan losses to nonperforming loans
improved to 90.3% at September 30, 2012, compared with 80.7% at June 30, 2012, which is attributable to the ongoing reduction in nonperforming loan balances. Adversely classified assets continue to show reductions falling to $38.4 million
at September 30, 2012. Trends continue to reflect directional improvement, management remains cautious due to continued uncertainty surrounding macroeconomic indicators. Furthermore management desires additional time periods of improved
conditions and asset quality indicators before releasing reserves.
Managements approach includes establishing a
specific allocation by evaluating individual nonperforming loans for probable losses based on a systematic approach involving estimating the realizable value of the underlying collateral. Additionally, management establishes a general allowance for
pools of performing loans segregated by collateral type. For the general allowance, management is applying a prudent loss factor based on historical loss experience, trends based on changes to nonperforming loans and foreclosure activity, and a
subjective evaluation of the local population and economic environment. The loan portfolio is segregated into categories based on collateral type and a loss factor is applied to each category. The initial basis for each loss factor is the
Companys loss experience
42
PART I FINANCIAL INFORMATION
for each category. Historical loss percentages are calculated based on transfers from the general reserve to the specific reserve, indicating a loss has been incurred, for each risk category
during the historical period and dividing the total by the average balance of each category. Presently, historical loss percentages are updated on a monthly basis using an 18-month rolling average. Subjective adjustments are made to the
Companys historical experience, including consideration of trends in delinquencies and classified loans, portfolio growth, national and local economic and business conditions including unemployment, bankruptcy and foreclosures and
effectiveness of credit administration, as appropriate.
A provision for loan losses is recorded when necessary to bring the
allowance to a level consistent with this analysis. Management believes it uses the best information available to make a determination as to the adequacy of the allowance for loan losses. The current provision for loan losses is allocated by loan
portfolio segment and lower historical loss factors resulted in recoveries in certain loan portfolio segments in the current period and are illustrated as a negative provision in Note 3 Loans Receivable. The current period provision for loan
losses reflects the continued level of elevated charge-offs during the period.
The total allowance for loan losses increased
slightly during the three months ended September 30, 2012. During the quarter $1.0 million was provided to commercial real-estate, $.6 million to one-to-four family, and $.3 million to commercial and industrial segments. While the one-to four
family allocation was a replacement of charge offs the commercial and industrial and commercial real-estate were additional allocations reflecting overall changes in the portfolio. The multifamily and land both saw a release of reserves of $.8
million and $.1 million respectively back into the general allocation. The portion of the provision associated with the multi-family category was reduced during the quarter ended September 30, 2012 due to multi-family construction loans being
converted to amortizing loans thus resulting in a lower risk profile. The remaining portion of the provision was allocated between consumer and one-to-four family construction. These allocations more than covered the $1.0 million in net charge offs
taken during the quarter.
The Company continues to aggressively review and monitor its loan portfolio. This review involves
analyzing all large borrowing relationships, delinquency trends, and loan collateral valuation in order to identify impaired loans. This analysis is performed so that management can identify all troubled loans and loan relationships as well as
deteriorating loans and loan relationships. As a result of this review, detailed action plans are developed to either resolve or liquidate the troubled loans and end the borrowing relationship.
43
PART I FINANCIAL INFORMATION
Nonperforming assets at September 30, 2012 and June 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
June 30,
|
|
(Dollars in thousands)
|
|
2012
|
|
|
2012
|
|
Loans on non-accruing status
(1)
|
|
|
|
|
|
|
|
|
Real estate mortgages:
|
|
|
|
|
|
|
|
|
One-to-four family residential
|
|
$
|
8,131
|
|
|
$
|
9,191
|
|
Commercial
|
|
|
4,405
|
|
|
|
4,571
|
|
Multi-family residential
|
|
|
6
|
|
|
|
325
|
|
Construction and land
|
|
|
5,084
|
|
|
|
5,551
|
|
Non real estate
|
|
|
238
|
|
|
|
438
|
|
|
|
|
|
|
|
|
|
|
Total loans on nonaccrual status
|
|
$
|
17,864
|
|
|
$
|
20,076
|
|
|
|
|
|
|
|
|
|
|
Ratio of nonperforming loans to total loans
|
|
|
3.19
|
%
|
|
|
3.60
|
%
|
|
|
|
|
|
|
|
|
|
Other nonperforming assets
(2)
|
|
$
|
7,232
|
|
|
$
|
7,734
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets
(3)
|
|
$
|
25,096
|
|
|
$
|
27,927
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets to total assets
|
|
|
3.22
|
%
|
|
|
3.51
|
%
|
|
|
|
|
|
|
|
|
|
The levels of nonperforming loans at September 30, 2012 and June 30, 2012 were attributable to
continued challenging local economic conditions. Residential markets nationally and locally have been adversely impacted by an elevated level of foreclosures, as a result of the problems faced by sub-prime borrowers and the resulting contraction of
residential credit available to all but the most credit worthy borrowers. Land development projects nationally and locally have experienced slow sales and price decreases. The Company has significant exposure to the residential market in the Greater
Cleveland, Ohio area. As a result, the Company continues to experience an elevated, but improving level of nonperforming loans. Due to an increase in foreclosure activity in the area, the foreclosure process in Cuyahoga County, the Companys
primary market remains elongated. As such, loans have remained past due for considerable periods prior to being collected, transferred to other real estate owned, or charged off.
Non-Interest Income
For the three months ended September 30, 2012,
non-interest income increased by $1.6 million from the prior-year comparable period. The increase in the current period was primarily attributed to higher income from net mortgage banking activities of approximately $2.1 million partially offset by
higher provision for write downs and losses on the disposal of other real estate owned totaling $0.3 million. Also the Company did not sell the guaranteed portions on its Small Business Administration (SBA) loan originations during the
quarter. This compares with SBA gains of $0.2 million in the quarter ended September 30, 2011.
The Company pursues a
strategy of originating long-term fixed-rate loans pursuant to FHLMC and FNMA guidelines and selling such loans to the FHLMC or the FNMA, while retaining the servicing rights of such loans. The majority of the mortgage lending activities in the
current environment continues to involve refinancing and is highly correlated to interest rate movements and levels. The net gains on loan origination and sales activities totaled $4.0 million for the current period, which represented an increase of
$2.2 million
44
PART I FINANCIAL INFORMATION
compared with the prior-year period of $1.8 million. The high level of refinancing in the current period resulted in a loan servicing loss of $0.9 million compared to $0.8 million in the
prior-year comparable quarter end. The Company recorded a valuation impairment charge against the book value of the mortgage loan servicing rights of $0.6 million and $0.7 million for the three months ended September 30, 2012 and 2011,
respectively.
Gains and losses on the sale of other real estate owned, including write-downs, is recorded in non-interest
income and was a net loss of $0.3 million for the quarter ended September 30, 2012, down from the net gains of $.1 million for the same prior-year period.
Non-Interest Expense
Non-interest expense for the three months ended
September 30, 2012 increased by $0.3 million, or 5.0%, from the prior-year comparable period. This resulted from increased compensation of $.2 million, and outside service costs of $.3 million offset by lower other real estate owned expenses of
$0.2 million.
The decrease to other real estate owned expense for the current period is attributable to a decline in the
acquisition and maintenance of properties acquired through foreclosure as compared with last year, but remains elevated during the current period due to the activity levels associated with problem asset disposition. The increase in outside services
was primarily due to increased cost associated with the migration to an outside service provider for information technology.
Income Tax
Expense (Benefit)
There was no federal income tax provision (benefit) recorded for the three months ended
September 30, 2012, compared to a 3.0% benefit on the net loss for the prior-year comparable period. An ongoing analysis of the Companys deferred tax asset has resulted in recognizing a valuation allowance of $4.2 million, resulting in a
net deferred tax asset of $0 at September 30, 2012.
45
PART I FINANCIAL INFORMATION
Liquidity and Capital Resources
PVFs shareholders equity totaled $72.8 million and $70.6 million for the quarters ended September 30, 2012 and 2011
respectively. On March 26, 2010, PVF completed a rights offering and an offering to a standby investor. Stockholders exercised subscription rights to purchase all 14,706,247 shares offered at a subscription price of $1.75 per share.
Additionally, the standby investor purchased 2,436,610 shares at the subscription price of $1.75 per share. In total, PVF raised proceeds of $27,964,015, net of issuance costs. Upon completing the offering, PVF contributed approximately $20.0
million of the proceeds to the capital of Park View Federal to improve its regulatory capital position. At September 30, 2012, Park View Federals Tier 1 (core) capital ratio was 9.16% and its total risk-based capital ratio was 13.34%. The
Banks primary regulator, the OCC, has implemented a statutory framework for capital requirements which establishes five categories of capital strength ranging from well capitalized to critically undercapitalized. An
institutions category depends upon its capital level in relation to relevant capital measures, including two risk-based capital measures, a tangible capital measure and a core/leverage capital measure. At September 30, 2012, the Bank was
in compliance with all of the current applicable regulatory capital measurements to meet the definition of a well-capitalized institution, as demonstrated in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park View
|
|
|
|
|
|
Requirement for
|
|
|
|
Federal
|
|
|
Percent of
|
|
|
Well-Capitalized
|
|
(In thousands)
|
|
Capital
|
|
|
Assets
(1)
|
|
|
Institution
|
|
Tangible capital
|
|
$
|
79,587
|
|
|
|
9.16
|
%
|
|
|
N/A
|
|
Tier-1 core capital
|
|
|
72,017
|
|
|
|
9.16
|
%
|
|
|
5.00
|
%
|
Tier-1 risk-based capital
|
|
|
72,017
|
|
|
|
12.06
|
%
|
|
|
6.00
|
%
|
Total risk-based capital
|
|
|
72,017
|
|
|
|
13.34
|
%
|
|
|
10.00
|
%
|
(1)
|
Tangible and core capital levels are shown as a percentage of total adjusted assets; risk-based capital levels are shown as a percentage of risk-weighted assets.
|
Park View Federals liquidity measures its ability to fund loans and meet withdrawals of deposits and
other cash outflows in a cost-effective manner. Park View Federals primary sources of funds for operations are deposits from its primary market area, principal and interest payments on loans and mortgage-backed securities, sales of loans,
proceeds from maturing securities, and advances from the FHLB of Cincinnati. While loan and mortgage-backed securities payments and maturing securities are relatively stable sources of funds, deposit flows and loan and mortgage-backed securities
prepayments are greatly influenced by prevailing interest rates, economic conditions and competition. FHLB advances may be used on a short-term basis to compensate for deposit outflows or on a long-term basis to support expanded lending and
investment activities.
Park View Federal uses its capital resources principally to meet its ongoing commitment to fund
existing and continuing loan commitments, fund maturing certificates of deposit and deposit withdrawals, repay borrowings, maintain its liquidity and meet operating expenses.
PVFs ability to pay dividends depends, in part, on its receipt of dividends from Park View Federal because the Company has minimal sources of income other than distributions from the Bank. Federal
regulations impose limitations upon all capital distributions, including cash dividends, by a savings
46
PART I FINANCIAL INFORMATION
institution, such as Park View Federal. Under the regulations, an application to and prior approval of federal regulators is required prior to any capital distribution if the institution does not
meet the criteria for expedited treatment of applications under applicable regulations (i.e., generally, examination and Community Reinvestment Act ratings in the two top categories), the total capital distributions for the calendar year
exceed net income for that year plus the amount of retained net income for the preceding two years, the institution would be undercapitalized following the distribution or the distribution would otherwise be contrary to a statute, regulation or
agreement. If an application is not required, the institution must still provide prior notice to federal regulators of the capital distribution if, like Park View Federal, it is a subsidiary of a holding company.
The Company currently does not pay dividends on its common shares. In addition, pursuant to the terms of the Company Order, the Company
is not permitted to declare, make or pay any cash dividends or other capital distributions or purchase, repurchase or redeem or commit to purchase, repurchase or redeem any Company equity stock without the prior non-objection of the Federal Reserve
Board. The Companys ability to pay dividends is also dependent, in part; on its receipt of dividends from Park View Federal. This restriction may adversely affect the market price for PVFs common shares. Besides the limitations imposed
by the Company Order, PVFs ability to pay dividends will depend on a number of factors, including capital requirements, its financial condition and results of operations including its ability to generate sufficient earnings to warrant the
payment of dividends, tax considerations, statutory and regulatory limitations and general economic conditions. PVF has cash of approximately $.8 million at the parent company level available to service its operating expenses and for future
investment in Park View Federal, if necessary. It has no debt obligations. PVF also derives its liquidity resources for operating obligations from its non subsidiaries which are sufficient to meet current operating obligations. Management believes
its current liquidity levels are adequate to meet its operating obligations over the next twelve months.
Park View Federal
maintains liquid assets sufficient to meet operational needs. Park View Federals most liquid assets are cash and cash equivalents, which are short-term, highly-liquid investments that are readily convertible to known amounts of cash. The
levels of such assets are dependent upon Park View Federals operating, financing and investment activities at any given time. Management believes that the liquidity levels maintained are more than adequate to meet potential deposit outflows,
repay maturing FHLB advances, fund new loan demand and cover normal operations.
47
PART I FINANCIAL INFORMATION
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates and equity prices. The Companys market risk
is generally composed of interest rate risk.
Asset/Liability Management
: The Companys asset and liability
committee (ALCO) monitors and considers methods of managing the rate sensitivity and repricing characteristics of the balance sheet components consistent with maintaining acceptable levels of changes in net portfolio value
(NPV) and net interest income. The Companys asset and liability management program is designed to minimize the impact of sudden and sustained changes in interest rates on NPV and net interest income.
The Companys exposure to interest rate risk is reviewed on a quarterly basis by the ALCO and the Companys Board of Directors.
Exposure to interest rate risk is measured with the use of interest rate sensitivity analysis to determine the Companys change in NPV in the event of hypothetical changes in interest rates, while interest rate sensitivity gap analysis is used
to determine the repricing characteristics of the Companys assets and liabilities. If estimated changes to NPV and net interest income are not within the limits established by the Board, the Board may direct management to adjust its asset and
liability mix to bring interest rate risk within Board-approved limits.
In order to reduce the exposure to interest rate
fluctuations, the Company has developed strategies to manage its liquidity, shorten the effective maturity and increase the interest rate sensitivity of its asset base. Management has sought to decrease the average maturity of its assets by
emphasizing the origination of adjustable-rate loans and loans with shorter balloon maturities which are retained by the Company for its portfolio. In addition, all long-term, fixed-rate mortgages are underwritten according to guidelines of the
Freddie Mac and the Fannie Mae, which are then sold directly for cash in the secondary market. The Company carefully monitors the maturity and repricing of its interest-earning assets and interest-bearing liabilities to minimize the effect of
changing interest rates on its NPV. The Companys interest rate risk position is the result of the repricing characteristics of assets and liabilities. The balance sheet is primarily comprised of interest-earning assets having a maturity and
repricing period of one month to five years. These assets were funded primarily utilizing interest-bearing liabilities having a final maturity of two years or less.
48
PART I FINANCIAL INFORMATION
Item 4.
|
Controls and Procedures.
|
As of the end of the period covered by this Quarterly Report on Form 10-Q, management of the Company carried out an evaluation, under the
supervision and with the participation of the Companys principal executive officer and principal financial officer, of the effectiveness of the Companys disclosure controls and procedures. Based on this evaluation, the Companys
principal executive officer and principal financial officer concluded that the Companys disclosure controls and procedures (as defined in Rule 13a-15e under the Securities Exchange Act of 1934) are effective in ensuring that information
required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended: (i) is recorded, processed, summarized and reported, within the time periods specified in the SECs rules
and forms; and (ii) is accumulated and communicated to the Companys management, including its principal executive and principal financial officers or persons performing similar functions, as appropriate to allow timely decisions regarding
disclosure. It should be noted that the design of the Companys disclosure controls and procedures is based in part upon certain reasonable assumptions about the likelihood of future events, and there can be no reasonable assurance that any
design of disclosure controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote, but the Companys principal executive and financial officers have concluded that the
Companys disclosure controls and procedures are, in fact, effective at a reasonable assurance level. During the period covered by this Quarterly Report on Form 10-Q, there was no change in internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.
PART II OTHER INFORMATION
Item 1.
|
Legal Proceedings.
|
None.
There have
been no material changes to the Companys risk factors from those disclosed in the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2012.
Item 2.
|
Unregistered Sale of Equity Securities and Use of Proceeds.
|
|
(c)
|
The Company did not repurchase its equity securities during the period ended September 30, 2012.
|
Item 3.
|
Defaults Upon Senior Securities.
|
None.
49
PART II OTHER INFORMATION
Item 4.
|
Mine Safety Disclosures.
|
None.
Item 5.
|
Other Information.
|
None.
|
|
|
3.1
1
|
|
First Amended and Restated Articles of Incorporation, as amended
|
|
|
3.2
2
|
|
Code of Regulations, as amended and restated
|
|
|
4
3
|
|
Agreement to furnish instruments and agreements defining rights of holders of long-term debt
|
|
|
31.1
4
|
|
Rule 13a-14(a) Certification of Chief Executive Officer
|
|
|
31.2
4
|
|
Rule 13a-14(a) Certification of Chief Financial Officer
|
|
|
32
4
|
|
Section 1350 Certifications
|
|
|
101.INS
5
|
|
XBRL Instance Document.
|
|
|
101.DEF
5
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.SCH
5
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
5
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.LAB
5
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
5
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Incorporated by reference from Exhibit 3.1 to the Companys Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on
February 10, 2010 (Commission File No. 333-163037).
|
(2)
|
Incorporated by reference from Exhibit 3.2 to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on February 6, 2008
(Commission File No. 0-24948).
|
(3)
|
Incorporated by reference from the Companys Current Report on Form 8-K filed with Securities and Exchange Commission on December 6, 2011.
|
(5)
|
In accordance with Rule 406T of Regulation S-T, the XBRL (Extensible Business Reporting Language) information in these exhibits shall not be deemed to be
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document
filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
|
50
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.
|
|
|
|
|
|
|
|
|
PVF Capital Corp.
|
|
|
|
|
(Registrant)
|
|
|
|
Date: November 14, 2012
|
|
|
|
/s/ Robert J. King, Jr.
|
|
|
|
|
Robert J. King, Jr.
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Duly authorized officer)
|
|
|
|
|
|
|
|
/s/ James H. Nicholson
|
|
|
|
|
James H. Nicholson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
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