first quarter
of 2010 from 2.97% in the same quarter of 2009 as the Company repaid some of
its longer maturity advances.
Provision for Loan Losses
The
Company recorded a $50,000 provision for loan losses in the first quarter of
2010, compared to no loan loss provision in the same period of 2009. Net loan
charge-offs decreased to $1,000, compared to net charge-offs of $18,000 in the
first quarter of 2009. Asset quality metrics declined slightly at March 31,
2010 with non-performing loans as a percent of loans of 0.70% and the allowance
for loan losses as a percent of non-performing loans of 108.7% at March 31,
2010, compared to 0.67% and 111.4%, respectively, at December 31, 2009. While
the Company has seen an increase in non-performing loans in 2010, management
believes that these loans are adequately collateralized. The allowance for loan
losses as a percentage of loans increased to 0.76% at March 31, 2010 compared
to 0.74% at December 31, 2009.
In
determining the appropriate provision for loan losses, management considers the
level of and trend in non-performing loans, the level of and trend in net loan
charge-offs, the dollar amount and mix of the loan portfolio, as well as
general economic conditions and real estate trends in the Companys market
area, which can impact the inherent risk of loss in the Companys loan
portfolio.
Non-Interest Income and Non-Interest Expense
Non-interest
income increased by $448,000 to $980,000 in the first quarter of 2010 from
$532,000 in the same period of 2009, largely due to a gain realized on the sale
of real estate. In the first quarter of 2010, the Company sold a parcel of
non-operating commercial real estate, realizing a gain of $418,000. The
remainder of the increase in non-interest income is primarily attributable to
an increase in the gains realized on sales of residential mortgages to the
secondary market as a greater volume of loans have been sold in 2010.
Non-interest
expense slightly decreased by $96,000 to $2.6 million in the first quarter of
2010 from $2.7 million in the same quarter of 2009, primarily due to a decrease
in deposit insurance expense. This decrease from the prior year resulted from the
2009 FDIC mandated industry-wide special assessment which was charged to member
banks to replenish the insurance fund. Income tax expense for the first quarter
of 2010 increased to $604,000 from $332,000 in the same period of 2009,
primarily due to the increase in pre-tax income.
Liquidity and Capital Resources
The
Companys primary sources of funds consist of deposits, scheduled amortization
and prepayments of loans and mortgage-backed securities, maturities of
investments, interest-bearing deposits at other financial institutions and
funds provided from operations. The Bank also has a written agreement with the
FHLB that allows it to borrow up to $44.1 million. At March 31, 2010, the Bank
had $5.9 million of outstanding borrowings against this line of credit, and
outstanding advances and amortizing notes totaling $34.8 million. At March 31,
2010, the Company also had approximately $8.5 million in unused short term
borrowing capacity at the Federal Reserve Bank of New York, which is collateralized
by a portion of the consumer loan portfolio.
Loan
repayments and maturing investment securities are a relatively predictable
source of funds. However, deposit flows, calls of investment securities, and
prepayments of loans and mortgage-backed securities are strongly influenced by
interest rates, general and local economic conditions, and competition in the
marketplace. These factors reduce the predictability of the timing of these
sources of funds.
The
Companys primary investing activities include the origination of loans, and to
a lesser extent, the purchase of investment securities. For the three months
ended March 31, 2010, the Company originated loans of approximately $10.9
million, compared to $6.2 million of loans in the same period of 2009. For the
past
22
several
quarters, the Company has been selling a large percentage of its residential
loan originations into the secondary market. Loan sales through three months of
2010 were $2.3 million, compared to $831,000 for the first three months of
2009. Year to date 2010 bond purchases were $1.3 million. No investments were
purchased in the same period of 2009.
At
March 31, 2010, the Company had loan commitments to borrowers of approximately
$8.6 million, and available letters and lines of credit of approximately $19.9
million.
Time
deposit accounts scheduled to mature within one year were $52.3 million at
March 31, 2010. Based on the Companys deposit retention experience and current
pricing strategy, the Company anticipates that a significant portion of these
time deposits will remain with the Company. The Company is committed to
maintaining a strong liquidity position; therefore, the Company monitors its
liquidity position on a daily basis. The Company anticipates that the Company
will have sufficient funds to meet the Companys current funding commitments.
The marginal cost of new funding however, whether from deposits or borrowings
from the FHLB, will be carefully considered as the Company monitors its liquidity
needs. Therefore, in order to minimize its cost of funds, the Company may
consider additional borrowings from the FHLB in the future.
At
March 31, 2010, the Bank exceeded each of the applicable regulatory capital
requirements. The Banks leverage (Tier 1) capital at March 31, 2010 was $55.4
million, or 16.78% of adjusted assets. In order to be classified as
well-capitalized by the OTS, the Bank is required to have leverage (Tier 1)
capital of $16.5 million, or 5.0% of adjusted assets. To be classified as a
well-capitalized bank by the OTS, the Bank must also have a Tier 1 risk-based
capital ratio of 6% and a total risk-based capital ratio of 10.0%. At March 31,
2010, the Bank had a Tier 1 risk-based capital ratio of 22.87% and a total risk-based
capital ratio of 23.80%.
The
Company paid cash dividends of $0.09 per share during the quarter ended March
31, 2010 totaling $587,000.
During
the first quarter of 2010, $128,000 was expended to repurchase 14,300 shares of
the Companys common stock.
The
Company does not anticipate any material capital expenditures, nor does it have
any balloon or other payments due on any long-term obligations or any
off-balance sheet items other than the commitments and unused lines of credit
noted above.
Off-Balance Sheet Arrangements
The
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Companys financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.
|
|
I
tem 3. Quantitative and Qualitative Disclosures about Market Risk
|
There
has been no material change in the Companys interest rate risk profile since
December 31, 2009. For a more complete discussion of the Companys asset and
liability management policies, see Managements Discussion and Analysis of
Financial Condition and Results of Operations in the Companys 2009 Form 10-K.
|
|
I
tem 4. Controls and Procedures
|
Management,
including the Companys President and Chief Executive Officer and the Chief
Financial Officer, has evaluated the effectiveness of the Companys disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of the end of the period covered by this report. Based upon that
evaluation, the President and Chief Executive Officer and the Chief Financial
Officer concluded that the disclosure controls and procedures were effective to
ensure that information required to be disclosed in the
23
reports the
Company files and submits under the Exchange Act is (i) recorded, processed,
summarized and reported as and when required and (ii) accumulated and
communicated to the Companys management, including the Companys President and
Chief Executive Officer and the Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.
There
have been no significant changes in the Companys internal controls over financial
reporting identified in connection with the evaluation that occurred during the
Companys last fiscal quarter that has materially affected, or that is
reasonably likely to materially affect, the Companys internal control over financial
reporting.
P
art II - OTHER
INFORMATION
|
|
I
tem 1.
|
Legal Proceedings
|
|
|
|
None.
|
|
|
I
tem 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
The
following table provides information with respect to purchases made by or on
behalf of the Company or any affiliated purchases (as defined in Rule 106-18
(a)(3) under the Securities Exchange Act of 1934) of the Companys common stock
during the quarter ended March 31, 2010.
COMPANY PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
(a) Total Number
of Shares (or
Units) Purchased
|
|
(b) Average Price
Paid per Share
(or Unit)
|
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that may yet be
Purchased under
the Plans or
Programs
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2010 through January 31, 2010
|
|
2,300
|
|
$
|
8.05
|
|
2,300
|
|
210,162
|
|
February 1, 2010 through February 28, 2010
|
|
|
|
|
|
|
|
|
210,162
|
|
March 1, 2010 through March 31, 2010
|
|
12,000
|
|
$
|
9.10
|
|
12,000
|
|
198,162
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
14,300
|
|
$
|
8.93
|
|
14,300
|
|
198,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
I
tem 3.
|
Defaults Upon Senior Securities
|
|
|
|
None.
|
|
|
I
tem 4.
|
Submission of Matters to a Vote of Security Holders
|
|
|
|
None.
|
24
|
|
I
tem 5.
|
Other Information
|
|
|
|
None.
|
|
|
I
tem 6.
|
Exhibits
|
|
|
2.1
|
Amended and Restated Plan
of Conversion and Agreement and Plan of Reorganization. (1)
|
|
|
3.1
|
Certificate of
Incorporation of New Rome Bancorp, Inc. (1)
|
|
|
3.2
|
Bylaws of New Rome Bancorp,
Inc. (1)
|
|
|
4.1
|
Form of Stock Certificate
of New Rome Bancorp, Inc. (1)
|
|
|
10.1
|
Form of Employee Stock
Ownership Plan of Rome Bancorp, Inc. (2)
|
|
|
10.2
|
Amendment No. 1 to
Employee Stock Ownership Plan of Rome Bancorp, Inc. (1)
|
|
|
10.3
|
Amendment No. 2 to
Employee Stock Ownership Plan of Rome Bancorp, Inc. (1)
|
|
|
10.4
|
Form of Executive
Employment Agreement by and between Charles M. Sprock and Rome Bancorp, Inc.
(2)
|
|
|
10.5
|
Amended and restated form
of One Year Change in Control Agreement by and among certain officers and
Rome Bancorp, Inc. and The Rome Savings Bank. (8)
|
|
|
10.6
|
Amended and restated form
of Employment Agreement between New Rome Bancorp, Inc. and Charles M. Sprock.
(8)
|
|
|
10.7
|
Amended and restated form
of Employment Agreement between The Rome Savings Bank and Charles M. Sprock.
(8)
|
|
|
10.8
|
Rome Bancorp, Inc. 2000
Stock Option Plan. (3)
|
|
|
10.9
|
Rome Bancorp, Inc. 2000
Recognition and Retention Plan. (3)
|
|
|
10.10
|
Amended and Restated
Benefit Restoration Plan of Rome Bancorp, Inc. (4)
|
|
|
10.11
|
Amended and Restated
Directors Deferred Compensation Plan of Rome Bancorp, Inc. (4)
|
|
|
10.12
|
Loan Agreement by and
between the Employee Stock Ownership Plan Trust of Rome Bancorp, Inc. and
Rome Bancorp, Inc. (5)
|
|
|
10.13
|
Amendment No. 3 to the
Employee Stock Ownership Plan of Rome Bancorp, Inc. (6)
|
|
|
10.14
|
Rome Bancorp, Inc. 2006
Stock Option Plan. (7)
|
|
|
10.15
|
Rome Bancorp, Inc. 2006
Recognition and Retention Plan. (7)
|
|
|
31.1
|
Rule 13a-14a/15d-14a
Certification.
|
|
|
31.2
|
Rule 13a-14a/15d-14a
Certification.
|
|
|
32.1
|
Section 1350
Certification.
|
|
|
32.2
|
Section 1350
Certification.
|
|
|
|
(1)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form S-1 (Registration No. 333-121245),
filed with the Commission on December 14, 2004, as amended.
|
|
|
(2)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form SB-2 (Registration No. 333-80487),
filed with the Commission on June 11, 1999, as amended.
|
|
|
(3)
|
Incorporated
by reference to Rome Bancorp, Incs Proxy Statement on Schedule 14A, filed
with the Commission on April 5, 2000 and amended on April 2, 2001.
|
|
|
(4)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
December 27, 2005.
|
|
|
(5)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
March 29, 2005.
|
|
|
(6)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
August 29, 2005.
|
|
|
(7)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form S-8 filed with the Commission on
May 19, 2006, as amended.
|
|
|
(8)
|
Incorporated
by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
December 3, 2007.
|
25
S
IGNATURES
Pursuant
to the requirement 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.
R
OME
B
ANCORP
, I
NC
.
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/Charles
M. Sprock
|
|
Chairman of
the Board, President and Chief Executive Officer (Principal Executive Officer)
|
|
May 10, 2010
|
|
|
|
|
Charles M.
Sprock
|
|
|
|
|
|
|
|
|
/s/David C.
Nolan
|
|
Executive
Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
May 10, 2010
|
|
|
|
|
David C.
Nolan
|
|
|
|
|
|
|
|
|
/s/Mary
Faith Messenger
|
|
Vice
President and Controller (Principal Accounting Officer)
|
|
May 10, 2010
|
|
|
|
|
|
Mary Faith
Messenger
|
|
|
|
|
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