x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD
|
VSB
Bancorp, Inc.
|
(Exact
name of registrant as specified in its
charter)
|
New York
|
(State
or other jurisdiction of incorporation or
organization)
|
11 - 3680128
|
(I.
R. S. Employer Identification No.)
|
4142 Hylan Boulevard,
Staten Island, New York 10308
|
(Address
of principal executive offices)
|
(718)
979-1100
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Registrant’s
telephone number
|
Common Stock
|
(Title
of Class)
|
Large
Accelerated Filer o
|
Accelerated
Filer o
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Non-Accelerated
Filer o
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Smaller
Reporting Company x
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Page
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PART I | |||
4
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5
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6
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7
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8
to 24
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25
to 38
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38
to 39
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39
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40
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Exhibit
31.1, 31.2, 32.1, 32.2
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41
to 44
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●
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deterioration
in local, regional, national or global economic
conditions which could result in, among other
things, an increase in loan delinquencies, a
decrease in property values, or a change in the
real estate turnover rate;
|
|
●
|
changes
in market interest rates or changes in the speed at
which market interest rates change;
|
|
●
|
increases
in inflation;
|
|
●
|
technology
changes requiring additional capital
investment;
|
|
●
|
breaches
of security or other criminal acts affecting our
operations;
|
|
●
|
changes
in laws and regulations affecting the financial
service industry;
|
|
●
|
changes
in accounting rules;
|
|
●
|
changes
in the public’s perception of financial
institutions in general and banks in
particular;
|
|
●
|
changes
in borrowers’ attitudes towards their moral
and legal obligations to repay their debts;
|
|
●
|
the
health and soundness of other financial
institutions;
|
|
●
|
changes
in the securities or real estate markets;
|
|
●
|
weather,
geologic or climatic conditions;
|
|
●
|
changes
in government monetary or fiscal policy or other
government political changes;
|
|
●
|
changes
in competition; and
|
|
●
|
changes
in consumer preferences by our customers or the
customers of our business borrowers.
|
June
30,
|
December
31,
|
|||||||
2011
|
2010
|
|||||||
Assets:
|
||||||||
Cash
and due from banks
|
$ | 38,622,272 | $ | 28,764,987 | ||||
Investment
securities, available for sale
|
120,282,630 | 121,307,907 | ||||||
Loans
receivable
|
82,727,855 | 81,538,224 | ||||||
Allowance
for loan loss
|
(1,192,630 | ) | (1,277,220 | ) | ||||
Loans
receivable, net
|
81,535,225 | 80,261,004 | ||||||
Bank
premises and equipment, net
|
2,518,610 | 2,732,229 | ||||||
Accrued
interest receivable
|
627,905 | 673,967 | ||||||
Other
assets
|
1,319,457 | 1,513,605 | ||||||
Total
assets
|
$ | 244,906,099 | $ | 235,253,699 | ||||
Liabilities
and stockholders’ equity:
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Demand
and checking
|
$ | 75,204,955 | $ | 66,407,225 | ||||
NOW
|
31,092,654 | 35,138,867 | ||||||
Money
market
|
28,978,292 | 27,057,632 | ||||||
Savings
|
17,482,082 | 14,938,440 | ||||||
Time
|
63,085,310 | 63,644,963 | ||||||
Total
deposits
|
215,843,293 | 207,187,127 | ||||||
Escrow
deposits
|
207,219 | 219,530 | ||||||
Accounts
payable and accrued expenses
|
1,824,726 | 1,802,186 | ||||||
Total
liabilities
|
217,875,238 | 209,208,843 | ||||||
Stockholders’
equity:
|
||||||||
Common
stock ($.0001 par value, 10,000,000 shares
authorized, 1,989,509 issued, 1,825,009 outstanding
at June 30, 2011 and at December 31, 2010)
|
199 | 199 | ||||||
Additional
paid in capital
|
9,265,716 | 9,249,600 | ||||||
Retained
earnings
|
18,205,496 | 17,563,435 | ||||||
Treasury
stock, at cost (164,500 shares at June 30, 2011and
at December 31, 2010)
|
(1,643,797 | ) | (1,643,797 | ) | ||||
Unearned
Employee Stock Ownership Plan shares
|
(479,055 | ) | (563,594 | ) | ||||
Accumulated
other comprehensive income, net of taxes of
$1,418,716 and $1,213,545, respectively
|
1,682,302 | 1,439,013 | ||||||
Total
stockholders’ equity
|
27,030,861 | 26,044,856 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 244,906,099 | $ | 235,253,699 |
Three
months
|
Three
months
|
Six
months
|
Six
months
|
|||||||||||||
ended
|
ended
|
ended
|
ended
|
|||||||||||||
June
30, 2011
|
June
30, 2010
|
June
30, 2011
|
June
30, 2010
|
|||||||||||||
Interest
and dividend income:
|
||||||||||||||||
Loans
receivable
|
$ | 1,366,027 | $ | 1,451,191 | $ | 2,820,319 | $ | 2,841,487 | ||||||||
Investment
securities
|
997,887 | 1,124,032 | 2,010,439 | 2,286,254 | ||||||||||||
Other
interest earning assets
|
13,603 | 13,683 | 24,741 | 22,890 | ||||||||||||
Total
interest income
|
2,377,517 | 2,588,906 | 4,855,499 | 5,150,631 | ||||||||||||
Interest
expense:
|
||||||||||||||||
NOW
|
23,183 | 41,348 | 56,272 | 80,600 | ||||||||||||
Money
market
|
61,101 | 63,018 | 120,480 | 125,504 | ||||||||||||
Savings
|
13,278 | 12,129 | 25,974 | 23,589 | ||||||||||||
Time
|
118,885 | 147,893 | 240,391 | 308,010 | ||||||||||||
Total
interest expense
|
216,447 | 264,388 | 443,117 | 537,703 | ||||||||||||
Net
interest income
|
2,161,070 | 2,324,518 | 4,412,382 | 4,612,928 | ||||||||||||
Provision
for loan loss
|
25,000 | 20,000 | 55,000 | 110,000 | ||||||||||||
Net
interest income after provision for loan
loss
|
2,136,070 | 2,304,518 | 4,357,382 | 4,502,928 | ||||||||||||
Non-interest
income:
|
||||||||||||||||
Loan
fees
|
13,036 | 16,551 | 40,606 | 18,855 | ||||||||||||
Service
charges on deposits
|
536,148 | 551,019 | 1,058,385 | 1,091,720 | ||||||||||||
Net
rental income
|
10,105 | 14,266 | 21,718 | 26,249 | ||||||||||||
Other
income
|
64,004 | 39,675 | 110,287 | 86,361 | ||||||||||||
Total
non-interest income
|
623,293 | 621,511 | 1,230,996 | 1,223,185 | ||||||||||||
Non-interest
expenses:
|
||||||||||||||||
Salaries
and benefits
|
988,835 | 990,642 | 1,968,838 | 1,954,258 | ||||||||||||
Occupancy
expenses
|
361,665 | 361,606 | 738,228 | 725,396 | ||||||||||||
Legal
expense
|
34,974 | 87,260 | 99,960 | 176,781 | ||||||||||||
Professional
fees
|
72,050 | 60,650 | 152,501 | 126,850 | ||||||||||||
Computer
expense
|
73,247 | 65,597 | 138,569 | 132,552 | ||||||||||||
Directors’
fees
|
62,925 | 60,575 | 125,375 | 119,525 | ||||||||||||
FDIC
and NYSBD assessments
|
45,500 | 105,000 | 139,500 | 199,000 | ||||||||||||
Other
expenses
|
331,822 | 342,350 | 641,097 | 642,694 | ||||||||||||
Total
non-interest expenses
|
1,971,018 | 2,073,680 | 4,004,068 | 4,077,056 | ||||||||||||
Income
before income taxes
|
788,345 | 852,349 | 1,584,310 | 1,649,057 | ||||||||||||
Provision/(benefit)
for income taxes:
|
||||||||||||||||
Current
|
565,691 | 344,800 | 980,381 | 787,110 | ||||||||||||
Deferred
|
(205,050 | ) | 45,173 | (255,566 | ) | (32,651 | ) | |||||||||
Total
provision for income taxes
|
360,641 | 389,973 | 724,815 | 754,459 | ||||||||||||
Net
income
|
$ | 427,704 | $ | 462,376 | $ | 859,495 | $ | 894,598 | ||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 0.24 | $ | 0.26 | $ | 0.48 | $ | 0.51 | ||||||||
Diluted
|
$ | 0.24 | $ | 0.26 | $ | 0.48 | $ | 0.51 | ||||||||
Comprehensive
income
|
$ | 952,959 | $ | 644,867 | $ | 1,102,784 | $ | 1,299,835 | ||||||||
Book
value per common share
|
$ | 14.81 | $ | 14.08 | $ | 14.81 | $ | 14.08 |
Number
of
Common
Shares
Outstanding
|
Common
Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Treasury
Stock,
at
cost
|
Unearned
ESOP
Shares
|
Accumulated
Other
Comprehensive
Gain
|
Total
Stockholders’ Equity
|
|||||||||||||||||||||||||
Balance
at January 1, 2010
|
1,762,191 | $ | 195 | $ | 9,317,719 | $ | 16,112,741 | $ | (1,840,249 | ) | $ | (732,672 | ) | $ | 1,626,215 | $ | 24,483,949 | |||||||||||||||
Exercise
of stock option, including tax benefit
|
44,375 | 4 | 292,207 | 292,211 | ||||||||||||||||||||||||||||
Stock-based
compensation
|
70,811 | 70,811 | ||||||||||||||||||||||||||||||
Amortization
of earned portion of ESOP common stock
|
169,078 | 169,078 | ||||||||||||||||||||||||||||||
Amortization
of cost over fair value - ESOP
|
(35,551 | ) | (35,551 | ) | ||||||||||||||||||||||||||||
Cash
dividends declared ($0.24 per share)
|
(429,935 | ) | (429,935 | ) | ||||||||||||||||||||||||||||
Purchase
of treasury stock, at cost
|
(17,057 | ) | (199,134 | ) | (199,134 | ) | ||||||||||||||||||||||||||
Contribution
to RRP Trust from treasury shares
|
35,500 | (395,586 | ) | 395,586 | — | |||||||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
1,880,629 | 1,880,629 | ||||||||||||||||||||||||||||||
Other
comprehensive income, net:
|
||||||||||||||||||||||||||||||||
Change
in unrealized gain on securities available for
sale, net of tax effects
|
— | — | — | — | — | — | (187,202 | ) | (187,202 | ) | ||||||||||||||||||||||
Total
comprehensive income
|
1,693,427 | |||||||||||||||||||||||||||||||
Balance
at December 31, 2010
|
1,825,009 | $ | 199 | $ | 9,249,600 | $ | 17,563,435 | $ | (1,643,797 | ) | $ | (563,594 | ) | $ | 1,439,013 | $ | 26,044,856 | |||||||||||||||
Stock-based
compensation
|
23,390 | 23,390 | ||||||||||||||||||||||||||||||
Amortization
of earned portion of ESOP common stock
|
42,270 | 42,270 | ||||||||||||||||||||||||||||||
Amortization
of cost over fair value - ESOP
|
(16,753 | ) | (16,753 | ) | ||||||||||||||||||||||||||||
Cash
dividends declared ($0.06 per share)
|
(108,716 | ) | (108,716 | ) | ||||||||||||||||||||||||||||
Purchase
of treasury stock, at cost
|
— | |||||||||||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
431,791 | 431,791 | ||||||||||||||||||||||||||||||
Other
comprehensive income, net:
|
||||||||||||||||||||||||||||||||
Change
in unrealized gain on securities available
for sale, net of tax effects
|
— | — | — | — | — | — | (281,966 | ) | (281,966 | ) | ||||||||||||||||||||||
Total
comprehensive income
|
149,825 | |||||||||||||||||||||||||||||||
Balance
at March 31, 2011
|
1,825,009 | $ | 199 | $ | 9,256,237 | $ | 17,886,510 | $ | (1,643,797 | ) | $ | (521,324 | ) | $ | 1,157,047 | $ | 26,134,872 | |||||||||||||||
Stock-based
compensation
|
25,671 | 25,671 | ||||||||||||||||||||||||||||||
Amortization
of earned portion of ESOP common stock
|
42,269 | 42,269 | ||||||||||||||||||||||||||||||
Amortization
of cost over fair value - ESOP
|
(16,192 | ) | (16,192 | ) | ||||||||||||||||||||||||||||
Cash
dividends declared ($0.06 per share)
|
(108,718 | ) | (108,718 | ) | ||||||||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
427,704 | 427,704 | ||||||||||||||||||||||||||||||
Other
comprehensive income, net:
|
||||||||||||||||||||||||||||||||
Change
in unrealized gain on securities available for
sale, net of tax effects
|
— | — | — | — | — | — | 525,255 | 525,255 | ||||||||||||||||||||||||
Total
comprehensive income
|
952,959 | |||||||||||||||||||||||||||||||
Balance
at June 30, 2011
|
1,825,009 | $ | 199 | $ | 9,265,716 | $ | 18,205,496 | $ | (1,643,797 | ) | $ | (479,055 | ) | $ | 1,682,302 | $ | 27,030,861 |
Three
months
|
Three
months
|
Six
months
|
Six
months
|
|||||||||||||
ended
|
ended
|
ended
|
ended
|
|||||||||||||
June
30, 2011
|
June
30, 2010
|
June
30, 2011
|
June
30, 2010
|
|||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Net
income
|
$ | 427,704 | $ | 462,376 | $ | 859,495 | $ | 894,598 | ||||||||
Adjustments
to reconcile net income to net cash provided by
operating activities
|
||||||||||||||||
Depreciation
and amortization
|
150,377 | 149,560 | 298,918 | 301,766 | ||||||||||||
Accretion
of income, net of amortization of premium
|
49,419 | 505 | 82,763 | 9,275 | ||||||||||||
ESOP
compensation expense
|
26,077 | 25,799 | 51,594 | 51,487 | ||||||||||||
Stock-based
compensation expense
|
25,671 | 21,450 | 49,061 | 23,394 | ||||||||||||
Provision
for loan losses
|
25,000 | 20,000 | 55,000 | 110,000 | ||||||||||||
Decrease
in prepaid and other assets
|
20,621 | 91,366 | 194,148 | 196,519 | ||||||||||||
(Increase)/decrease
in accrued interest receivable
|
(3,666 | ) | 39,433 | 46,062 | 102,897 | |||||||||||
(Decrease)/increase
in deferred income taxes
|
(205,050 | ) | 45,173 | (255,566 | ) | (32,651 | ) | |||||||||
Increase/(decrease)
in accrued expenses and other liabilities
|
36,443 | (290,911 | ) | 72,935 | 121,356 | |||||||||||
Net
cash provided by operating activities
|
552,596 | 564,751 | 1,454,410 | 1,778,641 | ||||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Net
change in loan receivable
|
(2,940,099 | ) | 738,889 | (1,272,170 | ) | 1,607,758 | ||||||||||
Proceeds
from repayment and calls of investment
securities, available for sale
|
7,517,021 | 8,479,744 | 16,948,321 | 18,721,798 | ||||||||||||
Purchases
of investment securities, available for
sale
|
(9,539,269 | ) | (6,524,461 | ) | (15,614,398 | ) | (15,465,622 | ) | ||||||||
Purchases
of premises and equipment
|
(64,857 | ) | (26,677 | ) | (85,299 | ) | (48,271 | ) | ||||||||
Net
cash (used in)/provided by investing
activities
|
(5,027,204 | ) | 2,667,495 | (23,546 | ) | 4,815,663 | ||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Net
increase in deposits
|
5,544,851 | 13,429,699 | 8,643,855 | 15,094,431 | ||||||||||||
Exercise
of stock options
|
— | 292,211 | — | 292,211 | ||||||||||||
Purchase
of treasury stock, at cost
|
— | (16,346 | ) | — | (16,346 | ) | ||||||||||
Cash
dividends paid
|
(108,718 | ) | (109,121 | ) | (217,434 | ) | (212,663 | ) | ||||||||
Net
cash provided by financing activities
|
5,436,133 | 13,596,443 | 8,426,421 | 15,157,633 | ||||||||||||
NET
INCREASE IN CASH AND CASH
EQUIVALENTS
|
961,525 | 16,828,689 | 9,857,285 | 21,751,937 | ||||||||||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
|
37,660,747 | 44,640,167 | 28,764,987 | 39,716,919 | ||||||||||||
CASH
AND CASH EQUIVALENTS,
END OF PERIOD |
$ | 38,622,272 | $ | 61,468,856 | $ | 38,622,272 | $ | 61,468,856 | ||||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
INFORMATION:
|
||||||||||||||||
Cash
paid during the period for:
|
||||||||||||||||
Interest
|
$ | 216,040 | $ | 264,220 | $ | 447,107 | $ | 567,204 | ||||||||
Taxes
|
$ | 680,225 | $ | 627,680 | $ | 867,125 | $ | 714,405 |
Reconciliation
of EPS
|
||||||||
Three
months ended
|
Three
months ended
|
|||||||
June
30, 2011
|
June
30, 2010
|
|||||||
Basic
|
||||||||
Distributed
earnings allocated to common stock
|
$ | 106,109 | $ | 105,888 | ||||
Undistributed
earnings allocated to common sock
|
314,243 | 350,351 | ||||||
Net
earnings allocated to common stock
|
$ | 420,352 | $ | 456,239 | ||||
Weighted
common shares outstanding including participating
securities
|
1,799,414 | 1,788,535 | ||||||
Less:
Participating securities
|
(30,929 | ) | (23,742 | ) | ||||
Weighted
average shares
|
1,768,485 | 1,764,793 | ||||||
Basic
EPS
|
$ | 0.24 | $ | 0.26 | ||||
Diluted
|
||||||||
Net
earnings allocated to common stock
|
$ | 420,352 | $ | 456,239 | ||||
Weighted
average shares for basic
|
1,768,485 | 1,764,793 | ||||||
Dilutive
effects of:
|
||||||||
Stock
Options
|
2,351 | 318 | ||||||
Unvested
shares not considered particpating
securtities
|
— | — | ||||||
1,770,836 | 1,765,111 | |||||||
Diluted
EPS
|
$ | 0.24 | $ | 0.26 |
Reconciliation
of EPS
|
||||||||
Six
months ended
|
Six
months ended
|
|||||||
June
30, 2011
|
June
30, 2010
|
|||||||
Basic
|
||||||||
Distributed
earnings allocated to common stock
|
$ | 211,817 | $ | 209,432 | ||||
Undistributed
earnings allocated to common sock
|
631,810 | 679,801 | ||||||
Net
earnings allocated to common stock
|
$ | 843,627 | $ | 889,233 | ||||
Weighted
common shares outstanding including participating
securities
|
1,798,340 | 1,757,203 | ||||||
Less:
Participating securities
|
(33,202 | ) | (11,936 | ) | ||||
Weighted
average shares
|
1,765,138 | 1,745,267 | ||||||
Basic
EPS
|
$ | 0.48 | $ | 0.51 | ||||
Diluted
|
||||||||
Net
earnings allocated to common stock
|
$ | 843,627 | $ | 889,233 | ||||
Weighted
average shares for basic
|
1,765,138 | 1,745,267 | ||||||
Dilutive
effects of:
|
||||||||
Stock
Options
|
1,905 | 253 | ||||||
Unvested
shares not considered particpating
securtities
|
— | — | ||||||
1,767,043 | 1,745,520 | |||||||
Diluted
EPS
|
$ | 0.48 | $ | 0.51 |
Weighted
Average
|
||||||||
Shares
|
Grant
Date Share Value
|
|||||||
Non
vested at beginning of period
|
35,500 | $ | 11.46 | |||||
Granted
|
— | |||||||
Vested
|
6,400 | $ | 12.22 | |||||
Non
vested at end of period
|
29,100 | $ | 11.46 |
June 30, 2011 | ||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
FNMA
MBS - Residential
|
$ | 2,638,262 | $ | 113,855 | $ | (188 | ) | $ | 2,751,929 | |||||||
GNMA
MBS - Residential
|
7,400,832 | 121,931 | — | 7,522,763 | ||||||||||||
Whole
Loan MBS - Residential
|
971,538 | 22,867 | — | 994,405 | ||||||||||||
Collateralized
mortgage obligations
|
106,170,979 | 2,867,257 | (24,703 | ) | 109,013,533 | |||||||||||
$ | 117,181,611 | $ | 3,125,910 | $ | (24,891 | ) | $ | 120,282,630 |
December 31, 2010 | ||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
FNMA
MBS - Residential
|
$ | 3,428,696 | $ | 142,521 | $ | — | $ | 3,571,217 | ||||||||
GNMA
MBS - Residential
|
4,092,912 | 65,164 | (76,964 | ) | 4,081,112 | |||||||||||
Whole
Loan MBS - Residential
|
1,212,246 | 23,255 | — | 1,235,501 | ||||||||||||
Collateralized
mortgage obligations
|
109,921,495 | 2,906,359 | (407,777 | ) | 112,420,077 | |||||||||||
$ | 118,655,349 | $ | 3,137,299 | $ | (484,741 | ) | $ | 121,307,907 |
June
30, 2011
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Less
than one year
|
$ | 23,388 | $ | 23,200 | ||||
Due
after one year through five years
|
2,693,201 | 2,829,679 | ||||||
Due
after five years through ten years
|
20,917,541 | 21,972,269 | ||||||
Due
after ten years
|
93,547,481 | 95,457,482 | ||||||
$ | 117,181,611 | $ | 120,282,630 |
June
30, 2011
|
Less
than 12 months
|
More
than 12 months
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
|||||||||||||||||||
FNMA
MBS
|
$ | 23,200 | $ | (188 | ) | $ | — | $ | — | $ | 23,200 | $ | (188 | ) | ||||||||||
GNMA
MBS
|
— | — | — | — | — | — | ||||||||||||||||||
Whole
Loan MBS
|
— | — | — | — | — | — | ||||||||||||||||||
Collateralized
mortgage obligations
|
8,852,054 | (24,703 | ) | — | — | 8,852,054 | (24,703 | ) | ||||||||||||||||
$ | 8,875,254 | $ | (24,891 | ) | $ | — | $ | — | $ | 8,875,254 | $ | (24,891 | ) |
December
31, 2010
|
Less
than 12 months
|
More
than 12 months
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
|||||||||||||||||||
FNMA
MBS
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
GNMA
MBS
|
2,991,961 | (76,964 | ) | — | — | 2,991,961 | (76,964 | ) | ||||||||||||||||
Whole
Loan MBS
|
— | — | — | — | — | — | ||||||||||||||||||
Collateralized
mortgage obligations
|
20,223,509 | (407,777 | ) | — | — | 20,223,509 | (407,777 | ) | ||||||||||||||||
$ | 23,215,470 | $ | (484,741 | ) | $ | — | $ | — | $ | 23,215,470 | $ | (484,741 | ) |
June
30, 2011
|
December
31, 2010
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 38,622,272 | $ | 38,622,272 | $ | 28,764,987 | $ | 28,764,987 | ||||||||
Investment
securities, available for sale
|
120,282,630 | 120,282,630 | 121,307,907 | 121,307,907 | ||||||||||||
Loans
receivable
|
81,535,225 | 82,576,575 | 80,261,004 | 81,526,941 | ||||||||||||
Other
financial assets
|
627,905 | 627,905 | 673,967 | 673,967 | ||||||||||||
Total
Financial Assets
|
$ | 241,068,032 | $ | 242,109,382 | $ | 231,007,865 | $ | 232,273,802 | ||||||||
Financial
Liabilities:
|
||||||||||||||||
Non-interest
bearing deposits
|
$ | 75,412,174 | $ | 75,412,174 | $ | 66,626,755 | $ | 66,626,755 | ||||||||
Interest
bearing deposits
|
140,638,338 | 140,624,104 | 140,779,902 | 140,634,427 | ||||||||||||
Other
liabilities
|
17,212 | 17,212 | 19,039 | 19,039 | ||||||||||||
Total
Financial Liabilities
|
$ | 216,067,724 | $ | 216,053,490 | $ | 207,425,696 | $ | 207,280,221 |
Fair
Value Measurements at June 30, 2011 Using
|
||||||||||||||||
Total
|
Quoted
Prices in Active Markets for Identical Assets
(Level 1)
|
Significant
Other Observable Inputs
(Level 2) |
Significant
Unobservable Inputs
(Level 3) |
|||||||||||||
Assets:
|
||||||||||||||||
FNMA
MBS - Residential
|
$ | 2,751,929 | $ | — | $ | 2,751,929 | $ | — | ||||||||
GNMA
MBS - Residential
|
7,522,763 | — | 7,522,763 | — | ||||||||||||
Whole
Loan MBS - Residential
|
994,405 | — | 994,405 | — | ||||||||||||
Collateralized
mortgage obligations
|
109,013,533 | — | 109,013,533 | — | ||||||||||||
Total
Available for sale Securities
|
$ | 120,282,630 | $ | — | $ | 120,282,630 | $ | — |
Fair
Value Measurements at December 31, 2010
Using
|
||||||||||||||||
Total
|
Quoted
Prices in Active Markets for Identical Assets
(Level 1)
|
Significant
Other Observable Inputs
(Level 2) |
Significant
Unobservable Inputs
(Level 3) |
|||||||||||||
Assets:
|
||||||||||||||||
FNMA
MBS - Residential
|
$ | 3,571,217 | $ | — | $ | 3,571,217 | $ | — | ||||||||
GNMA
MBS - Residential
|
4,081,112 | — | 4,081,112 | — | ||||||||||||
Whole
Loan MBS -Residential
|
1,235,501 | — | 1,235,501 | — | ||||||||||||
Collateralized
mortgage obligations
|
112,420,077 | — | 112,420,077 | — | ||||||||||||
Total
Available for sale Securities
|
$ | 121,307,907 | $ | — | $ | 121,307,907 | $ | — |
Fair Value Measurements at June 30, 2011 Using | ||||||||||
Total
|
Quoted
Prices in
Active
Markets for
|
Significant
Other
|
Significant
Unobservable
Inputs |
|||||||
Assets:
|
||||||||||
Impaired
loans
|
$ |
273,095
|
—
|
—
|
$ |
273,095
|
Fair Value Measurements at December 31, 2010 Using | ||||||||||
Total
|
Quoted
Prices in
Active
Markets for
|
Significant
Other
Observable Inputs |
Significant
Unobservable
Inputs |
|||||||
Assets:
|
||||||||||
Impaired
loans
|
$ |
643,758
|
—
|
—
|
$ |
643,758
|
June
30,
|
December
31,
|
|||||||
2011
|
2010
|
|||||||
Commercial
loans (principally variable rate):
|
||||||||
Secured
|
$ | 1,399,742 | $ | 1,393,532 | ||||
Unsecured
|
12,906,384 | 12,924,378 | ||||||
Total
commercial loans
|
14,306,126 | 14,317,910 | ||||||
Real
estate loans:
|
||||||||
Commercial
|
59,856,278 | 58,204,596 | ||||||
Residential
|
2,375,190 | 2,460,114 | ||||||
Total
real estate loans
|
62,231,468 | 60,664,710 | ||||||
Construction
loans (net of undisbursed funds of $2,107,500 and
$2,672,000, respectively)
|
5,527,500 | 5,874,500 | ||||||
Consumer
loans
|
464,536 | 533,860 | ||||||
Other
loans
|
448,942 | 386,750 | ||||||
913,478 | 920,610 | |||||||
Total
loans receivable
|
82,978,572 | 81,777,730 | ||||||
Less:
|
||||||||
Unearned
loans fees, net
|
(250,717 | ) | (239,506 | ) | ||||
Allowance
for loan losses
|
(1,192,630 | ) | (1,277,220 | ) | ||||
Total
|
$ | 81,535,225 | $ | 80,261,004 |
June
30,
|
December
31,
|
|||||||
2011
|
2010
|
|||||||
Nonaccrual
loans:
|
||||||||
Unsecured
commercial loans
|
$ | — | $ | 37,706 | ||||
Commercial
real estate
|
4,210,130 | 4,064,281 | ||||||
Residential
real estate
|
2,263,027 | 2,276,306 | ||||||
Construction
|
397,500 | — | ||||||
Total
nonaccrual loans
|
$ | 6,870,657 | $ | 6,378,293 |
June
30,
|
December
31,
|
|||||||
2011
|
2010
|
|||||||
Interest
income that would have been recorded during the
period on nonaccrual loans outstanding in
accordance with original terms
|
$ | 234,258 | $ | 469,484 |
June
30, 2011
|
30-59
Days |
60-89
Days |
Greater
than
90 Days
|
Total
|
Loans
Not
|
|||||||||||||||||||
Total
|
Past
Due
|
Past
Due
|
Past
Due
|
Past
Due
|
Past
Due
|
|||||||||||||||||||
Commercial
loans:
|
||||||||||||||||||||||||
Unsecured
|
$ | 12,906,384 | $ | — | $ | 240,107 | $ | — | $ | 240,107 | $ | 12,666,277 | ||||||||||||
Secured
|
1,399,742 | 999 | — | — | 999 | 1,398,743 | ||||||||||||||||||
Real
Estate loans
|
||||||||||||||||||||||||
Commercial
|
59,856,278 | 1,784,526 | 827,250 | 4,210,130 | 6,821,906 | 53,034,372 | ||||||||||||||||||
Residential
|
2,375,190 | — | — | 2,263,027 | 2,263,027 | 112,163 | ||||||||||||||||||
Construction
loans
|
5,527,500 | 400,000 | — | 397,500 | 797,500 | 4,730,000 | ||||||||||||||||||
Consumer
loans
|
464,536 | 1,129 | — | — | 1,129 | 463,407 | ||||||||||||||||||
Other
loans
|
448,942 | 8,490 | — | — | 8,490 | 440,452 | ||||||||||||||||||
Total
loans
|
$ | 82,978,572 | $ | 2,195,144 | $ | 1,067,357 | $ | 6,870,657 | $ | 10,133,158 | $ | 72,845,414 |
December
31, 2010
|
30-59
Days
|
60-89
Days
|
Greater
than
90 Days
|
Total
|
Loans
Not
|
|||||||||||||||||||
Total
|
Past
Due
|
Past
Due
|
Past
Due
|
Past
Due
|
Past
Due
|
|||||||||||||||||||
Commercial
loans:
|
||||||||||||||||||||||||
Unsecured
|
$ | 12,924,378 | $ | 46,562 | $ | 42,708 | $ | 37,706 | $ | 126,976 | $ | 12,797,402 | ||||||||||||
Secured
|
1,393,532 | — | — | — | — | 1,393,532 | ||||||||||||||||||
Real
Estate loans
|
||||||||||||||||||||||||
Commercial
|
58,204,596 | 3,103,589 | 277,960 | 4,064,281 | 7,445,830 | 50,758,766 | ||||||||||||||||||
Residential
|
2,460,114 | — | — | 2,276,306 | 2,276,306 | 183,808 | ||||||||||||||||||
Construction
loans
|
5,874,500 | 795,000 | — | — | 795,000 | 5,079,500 | ||||||||||||||||||
Consumer
loans
|
533,860 | 11,277 | — | — | 11,277 | 522,583 | ||||||||||||||||||
Other
loans
|
386,750 | 2,279 | — | — | 2,279 | 384,471 | ||||||||||||||||||
Total
loans
|
$ | 81,777,730 | $ | 3,958,707 | $ | 320,668 | $ | 6,378,293 | $ | 10,657,668 | $ | 71,120,062 |
June
30,
|
December
31,
|
|||||||
2011
|
2010
|
|||||||
Loans
with no allocated allowance for loan losses:
|
||||||||
Commercial
real estate
|
$ | 37,533 | $ | 39,377 | ||||
Residential
real estate
|
2,200,000 | — | ||||||
Loans
with allocated allowance for loan losses:
|
||||||||
Commercial
and financial
|
39,140 | 36,837 | ||||||
Commercial
real estate
|
682,640 | 3,448,695 | ||||||
$ | 2,959,313 | $ | 3,524,909 | |||||
Amount
of the allowance for loan losses allocated:
|
||||||||
Commercial
and financial
|
$ | 3,914 | $ | 7,367 | ||||
Commercial
real estate
|
57,125 | 83,459 | ||||||
$ | 61,039 | $ | 90,826 |
2011
|
2010
|
|||||||
Average
of individually impaired loans during period
|
$ | 2,988,624 | $ | 813,419 | ||||
Interest
income recognized during time period that loans
were impaired, using accrual or cash-basis method
of accounting
|
$ | — | $ | — |
At June 30, 2011 | ||||||||||||||||||||
Special
|
Not
|
|||||||||||||||||||
Mention
|
Substandard
|
Doubtful
|
Classified
|
Total
|
||||||||||||||||
Commercial
Loans:
|
||||||||||||||||||||
Secured
|
$ | — | $ | — | $ | — | $ | 1,399,742 | $ | 1,399,742 | ||||||||||
Unsecured
|
47,695 | 258,662 | — | 12,600,027 | 12,906,384 | |||||||||||||||
Commercial
Real Estate
|
3,193,387 | 6,234,495 | — | 50,428,396 | 59,856,278 | |||||||||||||||
Residential
Real Estate
|
— | 2,263,027 | — | 112,163 | 2,375,190 | |||||||||||||||
Construction
|
— | 397,500 | — | 5,130,000 | 5,527,500 | |||||||||||||||
Consumer
|
16,138 | — | — | 448,398 | 464,536 | |||||||||||||||
Other
|
8,490 | — | — | 440,452 | 448,942 | |||||||||||||||
Total
loans
|
$ | 3,265,710 | $ | 9,153,684 | $ | — | $ | 70,559,178 | $ | 82,978,572 |
At December 31, 2010 | ||||||||||||||||||||
Special
|
Not
|
|||||||||||||||||||
Mention
|
Substandard
|
Doubtful
|
Classified
|
Total
|
||||||||||||||||
Commercial
Loans:
|
||||||||||||||||||||
Secured
|
$ | — | $ | — | $ | — | $ | 1,393,532 | $ | 1,393,532 | ||||||||||
Unsecured
|
459,160 | 37,706 | — | 12,427,512 | 12,924,378 | |||||||||||||||
Commercial
Real Estate
|
4,250,511 | 5,623,816 | — | 48,330,269 | 58,204,596 | |||||||||||||||
Residential
Real Estate
|
— | 2,276,306 | — | 183,808 | 2,460,114 | |||||||||||||||
Construction
|
— | — | — | 5,874,500 | 5,874,500 | |||||||||||||||
Consumer
|
18,117 | — | — | 515,743 | 533,860 | |||||||||||||||
Other
|
12,096 | — | — | 374,654 | 386,750 | |||||||||||||||
Total
loans
|
$ | 4,739,884 | $ | 7,937,828 | $ | — | $ | 69,100,018 | $ | 81,777,730 |
Three
Months
|
Six
Months
|
|||||||
Ended
|
Ended
|
|||||||
June
30, 2011
|
June
30, 2011
|
|||||||
Beginning
balance
|
$ | 1,301,598 | $ | 1,277,220 | ||||
Charge-offs:
|
||||||||
Commercial
Loans:
|
||||||||
Unsecured
|
(147,257 | ) | (185,054 | ) | ||||
Consumer
|
— | — | ||||||
Other
|
— | — | ||||||
Total
charge-offs
|
(147,257 | ) | (185,054 | ) | ||||
Recoveries:
|
||||||||
Commercial
Loans:
|
||||||||
Unsecured
|
12,625 | 36,300 | ||||||
Commercial
Real Estate
|
500 | 5,500 | ||||||
Consumer
|
164 | 164 | ||||||
Other
|
— | 3,500 | ||||||
Total
recoveries
|
13,289 | 45,464 | ||||||
Provision
|
25,000 | 55,000 | ||||||
Ending
balance
|
$ | 1,192,630 | $ | 1,192,630 |
June
30, 2 011
|
||||||||||||||||||||||||||||
Commercial
|
Commercial
|
Commerical
|
Residential
|
Other
|
||||||||||||||||||||||||
Unsecured
|
Secured
|
Construction
|
Real
Estate
|
Real
Estate
|
Loans
|
Total
|
||||||||||||||||||||||
Allowance
for loan losses:
|
||||||||||||||||||||||||||||
Ending
allowance balance attributable to
loans
|
||||||||||||||||||||||||||||
Individually
evaluated for impairment
|
$
|
49,877
|
$
|
—
|
$
|
—
|
$
|
105,131
|
$
|
—
|
$
|
—
|
$
|
155,008
|
||||||||||||||
Collectively
evaluated for impairment
|
492,681
|
11,701
|
37,517
|
459,821
|
5,173
|
30,729
|
1,037,622
|
|||||||||||||||||||||
Total
en ding allowance balance
|
$
|
542,558
|
$
|
11,701
|
$
|
37,517
|
$
|
564,952
|
$
|
5,173
|
$
|
30,729
|
$
|
1,192,630
|
||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Individually
evaluated for impairment
|
$
|
279,247
|
$
|
—
|
$
|
397,500
|
$
|
6,213,910
|
$
|
2,2
63,027
|
$
|
—
|
$
|
9,153,684
|
||||||||||||||
Collectively
evaluated for impairment
|
12,627,137
|
1,399,742
|
5,130,000
|
53,642,368
|
1
12,163
|
913,478
|
73,824,888
|
|||||||||||||||||||||
Total
ending loans balance
|
$
|
12,906,384
|
$
|
1,399,742
|
$
|
5,527,500
|
$
|
59,856,278
|
$
|
2,3
75,190
|
$
|
913,478
|
$
|
82,978,572
|
December
31, 2 010
|
||||||||||||||||||||||||||||
Commercial
|
Commercial
|
Commerical
|
Residential
|
Other
|
||||||||||||||||||||||||
Un
secured
|
Secured
|
Construction
|
Real
Estate
|
Real
Estate
|
Loans
|
Total
|
||||||||||||||||||||||
Allowance
for loan losses:
|
||||||||||||||||||||||||||||
Ending allowance balance attributable to loans | ||||||||||||||||||||||||||||
Individually
evaluated for impairment
|
$
|
7,541
|
$
|
—
|
$
|
—
|
$
|
132,511
|
$
|
1,717
|
$
|
—
|
$
|
141,769
|
||||||||||||||
Collectively
evaluated for impairment
|
513,412
|
13,486
|
52,138
|
520,851
|
5,457
|
30,107
|
1,135,451
|
|||||||||||||||||||||
Total
ending allowance balance
|
$
|
520,953
|
$
|
13,486
|
$
|
52,138
|
$
|
653,362
|
$
|
7,174
|
$
|
30,107
|
$
|
1,277,220
|
||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Individually
evaluated for impairment
|
$
|
37,706
|
$
|
—
|
$
|
—
|
$
|
5,623,816
|
$
|
2,276,306
|
$
|
—
|
$
|
7,937,828
|
||||||||||||||
Collectively
evaluated for impairment
|
12,886,672
|
1,393,532
|
5,874,500
|
52,580,780
|
183,808
|
920,610
|
73,839,902
|
|||||||||||||||||||||
Total
ending loans balance
|
$
|
12,924,378
|
$
|
1,393,532
|
$
|
5,874,500
|
$
|
58,204,596
|
$
|
2,460,114
|
$
|
920,610
|
$
|
81,777,730
|
●
|
a
$9,857,285 net increase in cash and cash
equivalents
|
|
●
|
a
$1,274,221 net increase in net loans receivable,
partially offset by
|
|
●
|
a
$1,025,277 net decrease in investment securities
available for sale.
|
1.
|
The
law exempts smaller reporting companies filing
with the Securities and Exchange Commission, such
as our company, from the internal controls
attestation rules of Section 404(b) of the
Sarbanes-Oxley Act. Thus far, we have incurred
expenses to prepare for compliance but we have
not been governed by Section 404(b) due to
temporary SEC extensions of the compliance
deadline. The permanent exemption means that we
will not be required to incur the expense of
actual compliance as long as we continue to
qualify as a smaller reporting company.
|
2.
|
Securities
brokers may not vote shares held in “street
name” unless they receive instructions from
their customers on the election of directors,
executive compensation or any other significant
matter, as determined by the SEC. This may
increase our costs of holding annual stockholder
meetings if it becomes necessary for us to retain
the services of a proxy solicitor to increase
shareholder participation in our meetings or to
obtain approval of matters that the Board
presents to stockholders.
|
|
3.
|
At
least every three years, we will be required to
submit to our stockholders, for a non-binding
vote, our executive compensation. This
requirement may increase the cost of holding some
stockholder meetings. The law also requires that
the SEC implement other requirements for enhanced
compensation disclosures. The SEC adopted a
temporary exemption for smaller reporting
companies, such as our company, until annual
meetings occurring on or after January 21,
2013.
|
|
4.
|
The
law includes a number of changes to expand FDIC
insurance coverage, as well as changes to the
premiums banks must pay for insurance coverage,
and the requirements applicable to the reserve
ratio (the ratio of the deposit insurance fund to
the amount of insured deposits). One important
change is that, in the future, deposit insurance
premiums we pay will be based upon total assets
minus tangible capital, rather than based upon
deposits. Since we do not use material borrowings
to provide funds for asset growth, and we do not
have material intangible assets that are excluded
from capital such as goodwill, we anticipate that
our share of the total deposit premiums to be
collected may decrease as the result of this
change. However, other factors, such as required
replenishment of the current reserve fund, which
has a negative reserve ratio and which must be
increased to 1.35% of total insured deposits by
September 30, 2020, as well as future failures of
banks that may further deplete the fund, may
result in an increase in our future deposit
insurance premium. The FDIC must provide an
offset for smaller banks negating the adverse
effect of requiring a reserve ratio in excess of
1.15%, but reaching even the 1.15% ratio may
require additional burdens on smaller banks. The
FDIC approved final regulations implementing
these changes on February 25, 2011, effective
April 1, 2011. According to the FDIC, the
substantial majority of banks will see reduced
deposit insurance premiums as a result of the new
rules. We believe that will be the case for us as
long as all other relevant factors remain
unchanged.
|
|
5.
|
The
law increases the amount of each customer’s
deposits that are subject to FDIC insurance. The
general limit has been permanently increased from
$100,000 to $250,000. In addition, non-interest
bearing transaction accounts will be fully
insured, without limit, from December 31, 2010 to
December 31, 2012.
|
|
6.
|
The
law repeals the prohibition on paying interest on
demand deposit accounts, effective in July 2011.
Interest-free demand deposits represent a
substantial portion of our deposit base. We are
not currently offering a demand deposit product
that pays interest. If other banks offer
interest-bearing demand deposits in our
community, that competitive pressure may require
that we offer interest checking accounts to
businesses in order to retain deposits. That
could have a direct adverse effect on our cost of
funds. Although current market interest rates are
very low, and such deposits are unlikely to carry
high rates of interest, an increase in market
interest rates could result in significant
additional costs in order to maintain the level
of such deposits.
|
|
7.
|
The
law makes interstate branching by banks much
easier than in the past. We have no plans to
branch outside New York State, but the law
facilitates out of state banks branching into our
market area, thus potentially increasing
competition.
|
|
8.
|
The
law creates a new federal agency – the
Consumer Financial Protection Bureau
(“Bureau”)– which has
substantial authority to regulate consumer
financial transactions, effective July 21, 2011.
Our loans are primarily made to businesses rather
than individual consumers, so the Bureau will not
have a direct effect on many of our loan
transactions. However, the Bureau also has
authority to regulate other non-loan consumer
transactions, such as deposits and electronic
banking transactions. The implementation of new
consumer regulations may increase our operating
costs in a manner we cannot predict until
regulations are adopted.
|
●
|
Interest
income of $2,377,517
|
|
●
|
Reduced
by interest expense of $216,447
|
|
●
|
Reduced
by a provision for loan losses of $25,000
|
|
●
|
Increased
by non-interest income of $623,293
|
|
●
|
Reduced
by non-interest expense of $1,971,018
|
|
●
|
Reduced
by income tax expense of $360,641
|
●
|
a
$59,500 decrease in FDIC and NYSBD assessments due
to the reduction in the FDIC assessment
rate;
|
|
●
|
a
$52,286 decrease in legal expense due to a lower
level of collections and a recovery of legal fees
previously expensed on a settled lawsuit; partially
offset by;
|
|
●
|
a
$7,650 increase in computer expense due to a
one-time conversion.
|
●
|
Interest
income of $4,855,499
|
|
●
|
Reduced
by interest expense of $443,117
|
|
●
|
Reduced
by a provision for loan losses of $55,000
|
|
●
|
Increased
by non-interest income of $1,230,996
|
|
●
|
Reduced
by non-interest expense of $4,004,068
|
|
●
|
Reduced
by income tax expense of $724,815
|
●
|
a
$76,821 decrease in legal expense due to a lower
level of collections and a recovery of legal fees
previously expensed on a settled lawsuit
|
|
●
|
a
$59,500 decrease in FDIC and NYSBD assessments due
to the reduction in the FDIC assessment rate;
partially offset by
|
|
●
|
a
$25,651 increase in professional fees due to use of
an independent contractor and
|
|
●
|
a
$14,580 increase in salaries and benefits as a
result of higher benefit costs and normal raises
for existing employees.
|
Three
Months Ended
June 30, 2011 |
Three
Months Ended
June 30, 2010 |
Six
Months Ended
June 30, 2011 |
Six
Months Ended
June 30, 2010 |
|||||||||||||||||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Cost |
Average
Balance
|
Interest
|
Yield/
Cost
|
Average
Balance
|
Interest
|
Yield/
Cost |
Average
Balance
|
Interest
|
Yield/
Cost |
|||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||||||||||||||
Loans
receivable
|
$ | 81,033,439 | $ | 1,366,027 | 6.75 | % | $ | 78,326,658 | $ | 1,451,191 | 7.41 | % | $ | 81,491,744 | $ | 2,820,319 | 6.95 | % | $ | 78,988,776 | $ | 2,841,487 | 7.08 | % | ||||||||||||||||
Investment
securities, afs
|
119,835,363 | 997,887 | 3.34 | 113,703,764 | 1,124,032 | 3.97 | 118,916,691 | 2,010,439 | 3.41 | 114,495,374 | 2,286,254 | 4.03 | ||||||||||||||||||||||||||||
Other
interest-earning assets
|
34,037,827 | 13,603 | 0.16 | 40,934,051 | 13,683 | 0.13 | 31,605,943 | 24,741 | 0.16 | 36,448,827 | 22,890 | 0.13 | ||||||||||||||||||||||||||||
Total
interest-earning assets
|
234,906,629 | 2,377,517 | 4.06 | 232,964,473 | 2,588,906 | 4.45 | 232,014,378 | 4,855,499 | 4.21 | 229,932,977 | 5,150,631 | 4.51 | ||||||||||||||||||||||||||||
Non-interest
earning assets
|
6,866,466 | 8,744,393 | 6,955,598 | 8,944,806 | ||||||||||||||||||||||||||||||||||||
Total
assets
|
$ | 241,773,095 | $ | 241,708,866 | $ | 238,969,976 | $ | 238,877,783 | ||||||||||||||||||||||||||||||||
Liabilities
and equity:
|
||||||||||||||||||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||||||
Savings
accounts
|
$ | 17,091,175 | 13,278 | 0.31 | $ | 15,664,965 | 12,129 | 0.31 | $ | 16,572,161 | 25,974 | 0.32 | $ | 15,315,629 | 23,589 | 0.31 | ||||||||||||||||||||||||
Time
accounts
|
63,501,639 | 118,885 | 0.75 | 65,911,614 | 147,893 | 0.90 | 63,581,610 | 240,391 | 0.76 | 65,195,585 | 308,010 | 0.95 | ||||||||||||||||||||||||||||
Money
market accounts
|
28,532,598 | 61,101 | 0.86 | 28,833,948 | 63,018 | 0.88 | 28,296,113 | 120,480 | 0.86 | 28,918,039 | 125,504 | 0.88 | ||||||||||||||||||||||||||||
Now
accounts
|
28,419,262 | 23,183 | 0.33 | 35,563,678 | 41,348 | 0.47 | 30,492,021 | 56,272 | 0.37 | 34,139,385 | 80,600 | 0.48 | ||||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
137,544,674 | 216,447 | 0.63 | 145,974,205 | 264,388 | 0.73 | 138,941,905 | 443,117 | 0.64 | 143,568,638 | 537,703 | 0.76 | ||||||||||||||||||||||||||||
Checking
accounts
|
75,218,675 | 67,605,548 | 71,418,435 | 67,569,281 | ||||||||||||||||||||||||||||||||||||
Escrow
deposits
|
426,759 | 479,199 | 386,939 | 449,315 | ||||||||||||||||||||||||||||||||||||
Total
deposits
|
213,190,108 | 214,058,952 | 210,747,279 | 211,587,234 | ||||||||||||||||||||||||||||||||||||
Other
liabilities
|
1,937,696 | 2,004,555 | 1,811,345 | 1,966,557 | ||||||||||||||||||||||||||||||||||||
Total
liabilities
|
215,127,804 | 216,063,507 | 212,558,624 | 213,553,791 | ||||||||||||||||||||||||||||||||||||
Equity
|
26,645,291 | 25,645,359 | 26,411,352 | 25,323,992 | ||||||||||||||||||||||||||||||||||||
Total
liabilities and equity
|
$ | 241,773,095 | $ | 241,708,866 | $ | 238,969,976 | $ | 238,877,783 | ||||||||||||||||||||||||||||||||
Net
interest income/net interest rate spread
|
$ | 2,161,070 | 3.43 | % | $ | 2,324,518 | 3.72 | % | $ | 4,412,382 | 3.57 | % | $ | 4,612,928 | 3.75 | % | ||||||||||||||||||||||||
Net
interest earning assets/net interest
margin
|
$ | 97,361,955 | 3.69 | % | $ | 86,990,268 | 3.99 | % | $ | 93,072,473 | 3.82 | % | $ | 86,364,339 | 4.04 | % | ||||||||||||||||||||||||
Ratio
of interest-earning assets to interest-bearing
liabilities
|
1.71 | x | 1.60 | x | 1.67 | x | 1.60 | x | ||||||||||||||||||||||||||||||||
Return
on Average Assets (1)
|
0.71 | % | 0.76 | % | 0.72 | % | 0.75 | % | ||||||||||||||||||||||||||||||||
Return
on Average Equity (1)
|
6.42 | % | 7.19 | % | 6.51 | % | 7.11 | % | ||||||||||||||||||||||||||||||||
Tangible
Equity to Total Assets
|
11.04 | % | 10.21 | % | 11.04 | % | 10.21 | % |
Contractual
Obligations and Commitments at J une 30,
2011
|
||||||||||||||||||||
Contractual
Obligations
|
Payment due by Period | |||||||||||||||||||
Less
than
One
Year
|
One
to three
years
|
Four
to five
years
|
After
five
years
|
Total
Amounts
committed
|
||||||||||||||||
Minimum
annual rental payments under non-cancelable
operating leases
|
$ | 416,878 | $ | 831,224 | $ | 741,891 | $ | 8 55,256 | $ | 2,845,249 | ||||||||||
Remaining
contractual maturities of time deposits
|
56,868,126 | 2,053,872 | 4,163,312 | — | 63,085,310 | |||||||||||||||
Total
contractual cash obligations
|
$ | 57,285,004 | $ | 2,885,096 | $ | 4,905,203 | $ | 8 55,256 | $ | 65,930,559 |
Other
commitments
|
Amount of Commitment Expiration by Period | |||||||||||||||||||
Less
than
One
Year
|
One
to three
years
|
Four
to five
years
|
After
five
years
|
Total
Amounts
committed
|
||||||||||||||||
Loan
commitments
|
$ | 17,041,917 | $ | 4,731,230 | $ | 75,000 | $ | — | $ | 21,848,147 |
●
|
$2,200,000
in two residential mortgage loans that are
secured. We previously had a modified repayment
arrangements with the borrowers, which expired,
and we have confessions of judgment. The loan is
secured by a first mortgage and second mortgage
on a residential property and first mortgages on
two commercial properties. We have commenced
foreclosure proceedings.
|
|
●
|
$1,800,000
in two construction loans to a local borrower,
which are secured by a first mortgage and a
second mortgage on the related real estate
collateral that is substantially completed. The
loans are also secured by the personal guaranty
of the principal. The loans are past maturity and
the borrower is in the process of obtaining the
certificate of occupancy for the mortgaged
property, after which we expect to convert the
loans into performing term loans. The borrower is
continuing to pay interest, and we are recording
the interest on a cash basis, but the loans are
considered non-performing because they are past
maturity and we will not convert the loans into
term loans until there is further substantial
progress in obtaining a certificate of occupancy
is received before we term out these two
loans.
|
|
●
|
$672,500
in two commercial real estate loans and a
construction loan to a local business. The loans
are secured by a first, second and third mortgage
on real estate collateral. The loans are
guaranteed by the principal and a security
interest in the business. The loans have been
sent to our attorneys for collection and to begin
foreclosure proceedings.
|
●
|
$499,000
in a loan to a local business, which is secured
by a first mortgage and a second mortgage on
commercial real estate collateral. The loan is
also secured by the personal guaranties of the
principals and we have a security interest in the
business. We have commenced foreclosure
proceedings.
|
|
●
|
$352,420
in a loan to a local business in which we are a
participant in the loan with another bank. We are
not the lead lender. The loan is in arrears and
the lead lender has commenced a foreclosure
action. The loan is secured by a first mortgage
on a commercial building, a security interest in
the business, and the personal guaranties of the
principals. We have entered into a temporary
forbearance agreement with modified payment terms
with the borrower, for which we have received a
significant upfront payment.
|
|
●
|
$273,095
in a net loan to a local business, which is
secured by a first mortgage on two parcels of
commercial real estate. We also have a security
interest in the business as well as the personal
guaranty of the principal. We have commenced
foreclosure proceedings.
|
|
●
|
$259,787
in a loan to a local business, which is secured
by a first mortgage on commercial real estate
collateral. We have entered into modified
repayment arrangements with the borrower and we
have obtained confessions of judgment. We
maintain a security interest in the business as
well as the personal guaranty of the principal.
The borrower is current under the modified
payments terms.
|
VSB
Bancorp, Inc.
|
||
Date:
August 10, 2011
|
/s/
Raffaele M. Branca
|
|
Raffaele
M. Branca
|
||
President,
CEO and Principal Executive Officer
|
||
Date:
August 10, 2011
|
/s/
Jonathan B. Lipschitz
|
|
Jonathan
B. Lipschitz,
|
||
Vice
President, Controller and Principal
|
||
Accounting
Officer
|
Exhibit
|
||
Number
|
Description of
Exhibit
|
|
31.1
|
Rule
13A-14(a)/15D-14(a) Certification of Chief
Executive Officer
|
|
31.2
|
Rule
13A-14(a)/15D-14(a) Certification of Principal
Accounting Officer
|
|
32.1
|
Certification
by CEO pursuant to 18 U.S.C. 1350.
|
|
32.2
|
Certification
by Principal Accounting Officer pursuant to 18
U.S.C. 1350.
|
|
101.INS
|
XBRL
Instance Document (furnished
herewith)
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema Document (furnished
herewith)
|
|
101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase Document
(furnished herewith)
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition Linkbase Document
(furnished herewith)
|
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase Document
(furnished herewith)
|
|
101.PRE
|
XBRL
Taxonomy Extension Presentation Linkbase Document
(furnished herewith)
|
Exhibit
|
||
Number
|
Description of
Exhibit
|
|
31.1
|
Rule
13A-14(a)/15D-14(a) Certification of Chief
Executive Officer
|
|
31.2
|
Rule
13A-14(a)/15D-14(a) Certification of Principal
Accounting Officer
|
|
32.1
|
Certification
by CEO pursuant to 18 U.S.C. 1350.
|
|
32.2
|
Certification
by Principal Accounting Officer pursuant to 18
U.S.C. 1350.
|
|
101.INS
|
XBRL
Instance Document (furnished
herewith)
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema Document (furnished
herewith)
|
|
101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase Document
(furnished herewith)
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition Linkbase Document
(furnished herewith)
|
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase Document
(furnished herewith)
|
|
101.PRE
|
XBRL
Taxonomy Extension Presentation Linkbase Document
(furnished herewith)
|