Federal
|
59-3764686
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
505
Haines Avenue
Waycross,
Georgia
|
31501
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (800)
342-2824
|
Class
|
Outstanding
at November 8, 2010
|
Common
Stock, $0.01 Par Value
|
13,415,874
shares
|
Page Number
|
||
PART
I. FINANCIAL INFORMATION
|
||
Item
1.
|
Financial
Statements
|
3
|
Item
2.
|
Management’s
Discussion and Analysis of Financial
Condition and Results of Operations
|
29
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
48
|
Item
4.
|
Controls
and Procedures
|
49
|
PART
II. OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
50
|
Item
1A.
|
Risk
Factors
|
50
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
53
|
Item
3.
|
Defaults
upon Senior Securities
|
53
|
Item
4.
|
Removed
and reserved
|
53
|
Item
5.
|
Other
Information
|
53
|
Item
6.
|
Exhibits
|
53
|
Form
10-Q
|
Signature
Page
|
54
|
Ex-31.1
|
Section
302 Certification of CEO
|
|
Ex-31.2
|
Section
302 Certification of CFO
|
|
Ex-32
|
Section
906 Certification of CEO and CFO
|
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Cash
and due from financial institutions
|
$ | 6,042 | $ | 8,211 | ||||
Short-term
interest-earning deposits
|
15,601 | 28,933 | ||||||
Total
cash and cash equivalents
|
21,643 | 37,144 | ||||||
Securities
available for sale
|
176,528 | 177,938 | ||||||
Loans
held for sale
|
49,597 | 8,990 | ||||||
Loans,
net of allowance of $10,955 in 2010 and $13,810 in 2009
|
575,780 | 614,371 | ||||||
Federal
Home Loan Bank stock, at cost
|
9,798 | 10,023 | ||||||
Land,
premises and equipment, net
|
15,854 | 16,014 | ||||||
Bank
owned life insurance
|
23,377 | 22,806 | ||||||
Other
real estate owned
|
8,604 | 5,028 | ||||||
Accrued
interest receivable and other assets
|
11,431 | 13,247 | ||||||
Total
assets
|
$ | 892,612 | $ | 905,561 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Deposits
|
||||||||
Non-interest-bearing
demand
|
$ | 37,046 | $ | 34,988 | ||||
Interest-bearing
demand
|
71,773 | 79,192 | ||||||
Savings
and money market
|
182,143 | 160,784 | ||||||
Time
|
279,401 | 280,480 | ||||||
Total
deposits
|
570,363 | 555,444 | ||||||
Securities
sold under agreement to repurchase
|
92,800 | 92,800 | ||||||
Federal
Home Loan Bank advances
|
167,765 | 182,694 | ||||||
Other
borrowings
|
5,000 | 12,200 | ||||||
Accrued
expenses and other liabilities
|
5,279 | 5,882 | ||||||
Total
liabilities
|
841,207 | 849,020 | ||||||
Commitments
and contingent liabilities
|
- | - | ||||||
Preferred
stock: $0.01 par value; 2,000,000 shares authorized none
issued
|
- | - | ||||||
Common
stock: $0.01 par value; 18,000,000 shares authorized, shares issued
14,813,469 at September 30, 2010 and December 31, 2009
|
148 | 148 | ||||||
Additional
paid in capital
|
61,500 | 61,225 | ||||||
Unearned
employee stock ownership plan (ESOP) shares of 151,294 at September 30,
2010 and 186,208 at December 31, 2009
|
(1,513 | ) | (1,862 | ) | ||||
Retained
earnings
|
7,787 | 16,777 | ||||||
Accumulated
other comprehensive income
|
3,413 | 152 | ||||||
Treasury
stock, at cost, 1,397,595 shares at September 30, 2010 and 1,375,260 at
December 31, 2009
|
(19,930 | ) | (19,899 | ) | ||||
Total
stockholders' equity
|
51,405 | 56,541 | ||||||
Total
liabilities and stockholders' equity
|
$ | 892,612 | $ | 905,561 |
Three months ended Sept. 30,
|
Nine months ended Sept. 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Interest
and dividend income
|
||||||||||||||||
Loans,
including fees
|
$ | 9,316 | $ | 10,094 | $ | 27,997 | $ | 31,183 | ||||||||
Securities
and interest-earning deposits in other financial
institutions
|
1,883 | 2,123 | 6,096 | 5,987 | ||||||||||||
Total
interest and dividend income
|
11,199 | 12,217 | 34,093 | 37,170 | ||||||||||||
Interest
expense
|
||||||||||||||||
Deposits
|
2,462 | 3,819 | 7,925 | 12,566 | ||||||||||||
Federal
Home Loan Bank advances
|
1,554 | 1,714 | 4,675 | 5,135 | ||||||||||||
Securities
sold under agreements to repurchase
|
1,186 | 1,085 | 3,508 | 3,085 | ||||||||||||
Other
borrowings
|
114 | - | 203 | - | ||||||||||||
Total
interest expense
|
5,316 | 6,618 | 16,311 | 20,786 | ||||||||||||
Net
interest income
|
5,883 | 5,599 | 17,782 | 16,384 | ||||||||||||
Provision
for loan losses
|
3,090 | 6,650 | 14,306 | 18,657 | ||||||||||||
Net
interest income (loss) after provision for loan losses
|
2,793 | (1,051 | ) | 3,476 | (2,273 | ) | ||||||||||
Non-interest
income (loss)
|
||||||||||||||||
Service
charges and fees
|
1,032 | 1,099 | 2,864 | 3,119 | ||||||||||||
Gain
on sale of loans held for sale
|
349 | 147 | 531 | 448 | ||||||||||||
Gain
(loss) on sale of portfolio loans
|
46 | (1,317 | ) | (114 | ) | (1,245 | ) | |||||||||
Gain
(loss) on sale of securities available for sale
|
(397 | ) | 117 | 831 | 333 | |||||||||||
Other
than temporary impairment loss:
|
||||||||||||||||
Total
impairment loss
|
(444 | ) | (568 | ) | (1,154 | ) | (2,695 | ) | ||||||||
Gain
(loss) recognized in other comprehensive income
|
444 | 316 | 1,073 | 1,122 | ||||||||||||
Net
impairment loss recognized in earnings
|
- | (252 | ) | (81 | ) | (1,573 | ) | |||||||||
Interchange
fees
|
241 | 235 | 704 | 685 | ||||||||||||
Other
|
287 | 2,210 | 849 | 2,762 | ||||||||||||
Total
non-interest income
|
1,558 | 2,239 | 5,584 | 4,529 | ||||||||||||
Non-interest
expense
|
||||||||||||||||
Compensation
and benefits
|
2,838 | 2,861 | 7,845 | 8,403 | ||||||||||||
Occupancy
and equipment
|
547 | 674 | 1,632 | 1,962 | ||||||||||||
FDIC
insurance premiums
|
400 | 422 | 1,246 | 1,435 | ||||||||||||
Foreclosed
assets, net
|
560 | 318 | 681 | 1,308 | ||||||||||||
Data
processing
|
309 | 251 | 966 | 760 | ||||||||||||
Outside
professional services
|
465 | 316 | 1,195 | 1,477 | ||||||||||||
Collection
expense and repossessed asset losses
|
326 | 355 | 1,324 | 831 | ||||||||||||
Goodwill
impairment
|
- | 2,811 | - | 2,811 | ||||||||||||
Other
|
1,060 | 864 | 3,161 | 2,837 | ||||||||||||
Total
non-interest expense
|
6,505 | 8,872 | 18,050 | 21,824 | ||||||||||||
Loss
before income tax expense
|
(2,154 | ) | (7,684 | ) | (8,990 | ) | (19,568 | ) | ||||||||
Income
tax expense
|
- | 4,472 | - | 282 | ||||||||||||
Net
loss
|
$ | (2,154 | ) | $ | (12,156 | ) | $ | (8,990 | ) | $ | (19,850 | ) | ||||
Loss
per common share:
|
||||||||||||||||
Basic
|
$ | (0.16 | ) | $ | (0.93 | ) | $ | (0.68 | ) | $ | (1.52 | ) | ||||
Diluted
|
$ | (0.16 | ) | $ | (0.93 | ) | $ | (0.68 | ) | $ | (1.52 | ) | ||||
Dividends
declared per common share
|
$ | - | $ | - | $ | - | $ | 0.02 |
ACCUMULATED
|
||||||||||||||||||||||||||||
ADDITIONAL
|
UNEARNED
|
OTHER
|
||||||||||||||||||||||||||
COMMON
|
PAID IN
|
ESOP
|
RETAINED
|
COMPREHENSIVE
|
TREASURY
|
TOTAL
|
||||||||||||||||||||||
STOCK
|
CAPITAL
|
SHARES
|
EARNINGS
|
INCOME (LOSS)
|
STOCK
|
EQUITY
|
||||||||||||||||||||||
For
the nine months ended September 30, 2010
|
||||||||||||||||||||||||||||
Balance
at January 1, 2010
|
$ | 148 | $ | 61,225 | $ | (1,862 | ) | $ | 16,777 | $ | 152 | $ | (19,899 | ) | $ | 56,541 | ||||||||||||
ESOP
shares earned, 34,914 shares
|
- | (267 | ) | 349 | - | - | - | 82 | ||||||||||||||||||||
Management
restricted stock expense
|
- | 356 | - | - | - | - | 356 | |||||||||||||||||||||
Stock
options expense
|
- | 210 | - | - | - | - | 210 | |||||||||||||||||||||
Management
restricted stock granted
|
- | (99 | ) | - | - | 99 | - | |||||||||||||||||||||
Director's
deferred compensation
|
- | 75 | - | - | - | (75 | ) | - | ||||||||||||||||||||
RRP
shares relinquished, 6,671 shares
|
- | - | - | - | - | (21 | ) | (21 | ) | |||||||||||||||||||
Treasury
stock purchased at cost, 22,500 shares
|
- | - | - | - | - | (34 | ) | (34 | ) | |||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (8,990 | ) | - | - | (8,990 | ) | |||||||||||||||||||
Other
comprehensive income (loss)
|
||||||||||||||||||||||||||||
Net
change in unrealized losses on securities available-for-sale net of
reclassification and taxes
|
- | - | - | - | 2,188 | - | 2,188 | |||||||||||||||||||||
Change
in unrealized gains (losses) on securities available-for-sale for which a
portion of an other-than-temporary impairment has been recognized in
earnings, net of reclassification and taxes
|
- | - | - | - | 1,073 | - | 1,073 | |||||||||||||||||||||
Total
comprehensive income (loss)
|
- | - | - | (8,990 | ) | 3,261 | - | (5,729 | ) | |||||||||||||||||||
Balance
at September 30, 2010
|
$ | 148 | $ | 61,500 | $ | (1,513 | ) | $ | 7,787 | $ | 3,413 | $ | (19,930 | ) | $ | 51,405 |
ACCUMULATED
|
||||||||||||||||||||||||||||
ADDITIONAL
|
UNEARNED
|
OTHER
|
||||||||||||||||||||||||||
COMMON
|
PAID IN
|
ESOP
|
RETAINED
|
COMPREHENSIVE
|
TREASURY
|
TOTAL
|
||||||||||||||||||||||
STOCK
|
CAPITAL
|
SHARES
|
EARNINGS
|
INCOME (LOSS)
|
STOCK
|
EQUITY
|
||||||||||||||||||||||
For
the nine months ended
September
30, 2009
|
||||||||||||||||||||||||||||
Balance
at January 1, 2009
|
$ | 148 | $ | 60,061 | $ | (2,328 | ) | $ | 46,201 | $ | (308 | ) | $ | (19,814 | ) | $ | 83,960 | |||||||||||
ESOP
shares earned, 34,914 shares
|
- | (171 | ) | 350 | - | - | - | 179 | ||||||||||||||||||||
Management
restricted stock expense
|
- | 484 | - | - | - | - | 484 | |||||||||||||||||||||
Stock
options expense
|
- | 236 | - | - | - | - | 236 | |||||||||||||||||||||
Dividend
declared ($0.02 per share)
|
- | - | - | (89 | ) | - | - | (89 | ) | |||||||||||||||||||
Director's
deferred compensation
|
- | 16 | - | - | - | (16 | ) | - | ||||||||||||||||||||
Capital
contribution by parent
|
- | 400 | - | - | - | - | 400 | |||||||||||||||||||||
RRP
shares reliquished, 6,227 shares
|
- | 29 | - | - | - | (45 | ) | (16 | ) | |||||||||||||||||||
Treasury
stock purchased at cost, 7,400 shares
|
- | - | - | - | - | (29 | ) | (29 | ) | |||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (19,850 | ) | - | - | (19,850 | ) | |||||||||||||||||||
Other
comprehensive income (loss)
|
||||||||||||||||||||||||||||
Net
change in unrealized gains on securities available-for-sale net of
reclassification and taxes
|
- | - | - | - | 1,188 | - | 1,188 | |||||||||||||||||||||
Change
in unrealized gains (losses) on securities available-for-sale for which a
portion of an other-than-temporary impairment has been recognized in
earnings, net of reclassification and taxes
|
- | - | - | - | (668 | ) | - | (668 | ) | |||||||||||||||||||
Total
comprehensive income
|
- | - | - | (19,850 | ) | 520 | - | (19,330 | ) | |||||||||||||||||||
Balance
at September 30, 2009
|
$ | 148 | $ | 61,055 | $ | (1,978 | ) | $ | 26,262 | $ | 212 | $ | (19,904 | ) | $ | 65,795 |
Nine months ended Sept. 30,
|
||||||||
2010
|
2009
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
loss
|
(8,990 | ) | (19,850 | ) | ||||
Adjustments
to reconcile net loss to to net cash from operating
activities:
|
||||||||
Provision
for loan losses
|
14,306 | 18,657 | ||||||
Gain
on sale of loans held for sale
|
(531 | ) | (448 | ) | ||||
Loss
on sale of portfolio loans
|
114 | 1,245 | ||||||
Loans
originated for sale
|
(214,032 | ) | (69,199 | ) | ||||
Proceeds
from sales of loans held for sale
|
180,390 | 63,067 | ||||||
Foreclosed
assets, net
|
681 | 1,308 | ||||||
Gain
on sale of securities available for sale
|
(831 | ) | (333 | ) | ||||
Other
than temporary impairment loss on AFS securities
|
81 | 1,573 | ||||||
Loss
on disposal of equipment
|
21 | 52 | ||||||
ESOP
compensation expense
|
82 | 179 | ||||||
Share-based
compensation expense
|
466 | 720 | ||||||
Net
depreciation and amortization
|
1,918 | 1,691 | ||||||
Net
change in accrued interest receivable
|
157 | 518 | ||||||
Net
change in cash surrender value of bank owned life
insurance
|
(571 | ) | (550 | ) | ||||
Goodwill
impairment
|
- | 2,811 | ||||||
Net
change in other assets
|
1,752 | 183 | ||||||
Net
change in accrued expenses and other liabilities
|
(602 | ) | (1,015 | ) | ||||
Net
cash (used in) from operating activites
|
(25,589 | ) | 609 | |||||
Cash
flows from investing activities
|
||||||||
Proceeds
from maturities and payments of securites available for
sale
|
68,101 | 40,622 | ||||||
Proceeds
from the sales of securities available for sale
|
40,958 | 47,295 | ||||||
Purchase
of securities available for sale
|
(104,638 | ) | (113,674 | ) | ||||
Proceeds
from sale of portfolio loans
|
7,025 | 16,020 | ||||||
Purchase
of loans
|
(2,420 | ) | - | |||||
Net
change in loans
|
6,480 | 54,982 | ||||||
Expenditures
on premises and equipment
|
(572 | ) | (758 | ) | ||||
Proceeds
from the sale of other real estate owned
|
2,095 | 2,226 | ||||||
Purchase
of FHLB stock
|
(135 | ) | (1,028 | ) | ||||
Redemption
of FHLB stock
|
360 | 1,063 | ||||||
Net
cash from investing activities
|
17,254 | 46,748 |
Nine months ended September 30,
|
||||||||
2010
|
2009
|
|||||||
Cash
flows from financing activities
|
||||||||
Net
change in deposits
|
$ | 14,919 | $ | (24,449 | ) | |||
Proceeds
from FHLB advances
|
33,071 | 20,000 | ||||||
Repayment
of FHLB advances
|
(48,000 | ) | (27,180 | ) | ||||
Proceeds
from other borrowings
|
5,000 | - | ||||||
Repayment
of other borrowings
|
(12,200 | ) | - | |||||
Capital
contribution from parent
|
- | 400 | ||||||
Share
based compensation items
|
99 | 28 | ||||||
Treasury
stock repurchased
|
(34 | ) | (29 | ) | ||||
RRP
shares relinquished
|
(21 | ) | (45 | ) | ||||
Dividends
paid
|
- | (89 | ) | |||||
Net
cash from financing activities
|
(7,166 | ) | (31,364 | ) | ||||
Net
change in cash and cash equivalents
|
(15,501 | ) | 15,993 | |||||
Cash
and equivalents beginning of period
|
37,144 | 34,058 | ||||||
Cash
and equivalents at end of period
|
$ | 21,643 | $ | 50,051 | ||||
Supplemental
information:
|
||||||||
Interest
paid
|
$ | 16,384 | $ | 20,973 | ||||
Income
tax paid
|
15 | 9 | ||||||
Supplemental
noncash disclosures:
|
||||||||
Loans
transferred to other real estate
|
$ | 6,372 | $ | 3,333 | ||||
Loans
transferred to held for sale
|
6,434 | 3,008 |
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses |
Fair Value
|
|||||||||||||
September
30, 2010
|
(Dollars
in Thousands)
|
|||||||||||||||
U.S.
Government-sponsored enterprises
|
$ | 2,000 | $ | - | $ | - | $ | 2,000 | ||||||||
State
and municipal
|
946 | 15 | (42 | ) | 919 | |||||||||||
Mortgage-backed
securities residential
|
53,583 | 1,796 | (19 | ) | 55,360 | |||||||||||
Collateralized
mortgage obligations U.S. Govt.
|
108,600 | 2,003 | (244 | ) | 110,359 | |||||||||||
Collateralized
mortgage obligations - other
|
7,986 | 114 | (210 | ) | 7,890 | |||||||||||
$ | 173,115 | $ | 3,928 | $ | (515 | ) | $ | 176,528 | ||||||||
December
31, 2009
|
(Dollars
in Thousands)
|
|||||||||||||||
U.S.
Government-sponsored enterprises
|
$ | 15,998 | $ | - | $ | (246 | ) | $ | 15,752 | |||||||
State
and municipal
|
947 | - | (103 | ) | 844 | |||||||||||
Mortgage-backed
securities residential
|
37,390 | 1,028 | (8 | ) | 38,410 | |||||||||||
Collateralized
mortgage obligations U.S. Govt.
|
101,236 | 1,530 | (327 | ) | 102,439 | |||||||||||
Collateralized
mortgage obligations - other
|
22,116 | 534 | (2,157 | ) | 20,493 | |||||||||||
$ | 177,687 | $ | 3,092 | $ | (2,841 | ) | $ | 177,938 |
September 30, 2010
|
||||||||
(Dollars in Thousands)
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Due
in one year or less
|
$ | - | $ | - | ||||
Due
from one to five years
|
2,000 | 2,000 | ||||||
Due
from five to ten years
|
- | - | ||||||
Due
after ten years
|
946 | 919 | ||||||
Mortgage-backed
securities - residential
|
53,583 | 55,360 | ||||||
Collateralized
mortgage obligations - U.S. Government
|
108,600 | 110,359 | ||||||
Collateralized
mortgage obligations - other
|
7,986 | 7,890 | ||||||
Total
|
$ | 173,115 | $ | 176,528 |
(Dollars in Thousands)
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Description of Securities
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||||||
September 30, 2010
|
||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
State
and municipal
|
- | - | 420 | (42 | ) | 420 | (42 | ) | ||||||||||||||||
Mortgage-backed
securities - residential
|
10,293 | (19 | ) | - | - | 10,293 | (19 | ) | ||||||||||||||||
Collateralized
mortgage obligations - U.S. Govt.
|
31,651 | (244 | ) | - | - | 31,651 | (244 | ) | ||||||||||||||||
Collateralized
mortgage obligations - other
|
2,780 | (210 | ) | - | - | 2,780 | (210 | ) | ||||||||||||||||
Total
|
$ | 44,724 | $ | (473 | ) | $ | 420 | $ | (42 | ) | $ | 45,144 | $ | (515 | ) | |||||||||
December 31,
2009
|
||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | 15,752 | $ | (246 | ) | $ | - | $ | - | $ | 15,752 | $ | (246 | ) | ||||||||||
State
and municipal
|
- | - | 844 | (103 | ) | 844 | (103 | ) | ||||||||||||||||
Mortgage-backed
securities - residential
|
7,206 | (8 | ) | - | - | 7,206 | (8 | ) | ||||||||||||||||
Collateralized
mortgage obligations - U.S. Govt.
|
34,820 | (327 | ) | - | - | 34,820 | (327 | ) | ||||||||||||||||
Collateralized
mortgage obligations - other
|
7,118 | (203 | ) | 9,462 | (1,954 | ) | 16,580 | (2,157 | ) | |||||||||||||||
Total
|
$ | 64,896 | $ | (784 | ) | $ | 10,306 | $ | (2,057 | ) | $ | 75,202 | $ | (2,841 | ) |
September 30,
|
||||||||
2010
|
2009
|
|||||||
(Dollars
in Thousands)
|
||||||||
Beginning
balance, January 1
|
$ | 4,467 | $ | - | ||||
Amounts
related to credit loss for which an other-than-temporary impairment was
not previously recognized
|
- | 182 | ||||||
Amounts
realized for securities sold during the period
|
(960 | ) | - | |||||
Amounts
related to securities for which the company intends to sell or that it
will be more likely than not the company will be required to sell prior to
recovery of amortized cost basis
|
- | - | ||||||
Reductions
for increase in cash flows expected to be collected that are recognized
over the remaining life of the security
|
- | - | ||||||
Increases
(decreases) to the amount related to the credit loss for which
other-than-temporary impairment was previously recognized
|
(2,349 | ) | 1,391 | |||||
Ending
balance, September 30
|
$ | 1,158 | $ | 1,573 |
September 30,
2010
|
% of total
loans
|
December 31,
2009
|
% of total
loans
|
|||||||||||||
|
(Dollars
in Thousands)
|
|||||||||||||||
Real estate loans: | ||||||||||||||||
One-to-four
family
|
$ | 277,840 | 47.9 | % | $ | 306,968 | 49.3 | % | ||||||||
Commercial
|
73,196 | 12.6 | % | 77,403 | 12.4 | % | ||||||||||
Other
( land and multi-family)
|
32,567 | 5.6 | % | 37,591 | 6.0 | % | ||||||||||
Total
real estate loans
|
383,603 | 66.1 | % | 421,962 | 67.7 | % | ||||||||||
Real estate construction
loans:
|
||||||||||||||||
One-to-four
family
|
6,636 | 1.1 | % | 4,189 | 0.7 | % | ||||||||||
Commercial
|
5,684 | 1.0 | % | 8,022 | 1.3 | % | ||||||||||
Acquisition
and development
|
2,358 | 0.4 | % | 3,148 | 0.5 | % | ||||||||||
Total
real estate construction loans
|
14,678 | 2.5 | % | 15,359 | 2.5 | % | ||||||||||
Other loans:
|
||||||||||||||||
Home
equity
|
86,896 | 15.0 | % | 93,929 | 15.1 | % | ||||||||||
Consumer
|
75,296 | 13.0 | % | 73,870 | 11.9 | % | ||||||||||
Commercial
|
19,553 | 3.4 | % | 17,848 | 2.9 | % | ||||||||||
Total
other loans
|
181,745 | 31.3 | % | 185,647 | 29.8 | % | ||||||||||
Total
loans
|
580,026 | 100 | % | 622,968 | 100 | % | ||||||||||
Allowance
for loan losses
|
(10,955 | ) | (13,810 | ) | ||||||||||||
Net
deferred loan costs
|
6,823 | 5,122 | ||||||||||||||
Premiums
(discounts) on purchased loans
|
(114 | ) | 91 | |||||||||||||
Loans,
net
|
$ | 575,780 | $ | 614,371 |
2010
|
2009
|
|||||||
(Dollars in Thousands)
|
||||||||
Beginning
balance, January 1
|
$ | 13,810 | $ | 10,598 | ||||
Loans
charged-off
|
(18,240 | ) | (15,202 | ) | ||||
Recoveries
|
1,079 | 722 | ||||||
Net
charge-offs
|
(17,161 | ) | (14,480 | ) | ||||
Provision
for loan losses
|
14,306 | 18,657 | ||||||
Ending
balance, September 30
|
$ | 10,955 | $ | 14,775 |
September 30,
2010
|
December 31,
2009
|
|||||||
(Dollars
in Thousands)
|
||||||||
Loans
with no allocated allowance for loan losses
|
$ | 23,134 | $ | 27,692 | ||||
Loans
with an allocated allowance for loan losses
|
13,522 | 16,700 | ||||||
Total
|
$ | 36,656 | $ | 44,392 | ||||
Amount
of the allowance for loan losses allocated to impaired
loans
|
$ | 2,260 | $ | 5,398 | ||||
Amount
of charge-offs taken on period-end impaired loans
|
$ | 3,307 | $ | 2,157 |
September 30, 2010
|
||||
(Dollars in Thousands)
|
||||
Notional
amounts
|
$ | 25,000 | ||
Weighted
average pay rates (3 month LIBOR, 2.50% floor)
|
2.50 | % | ||
Weighted
average receive rates (3 month LIBOR, 4.37% cap)
|
0.29 | % | ||
Weighted
average maturity (years)
|
1.0 | |||
Fair
value of interest rate swaps
|
(267 | ) |
Liability Interest Rate Swaps
|
|||||||||||
September 30, 2010
|
December 31, 2009
|
||||||||||
(Dollars in thousands)
|
|||||||||||
Balance Sheet
|
Balance Sheet
|
||||||||||
Location
|
Fair Value
|
Location
|
Fair Value
|
||||||||
Interest
rate swaps not designated as hedging instruments under SFAS
133:
|
|||||||||||
Interest
rate contracts
|
Accrued expenses and
other liabilities
|
$ | (267 | ) |
Accrued
expenses and other liabilities
|
$ | (520 | ) | |||
Total
interest rate swaps not designated as hedging instruments under SFAS
133:
|
|||||||||||
Total
interest rate swaps
|
$ | (267 | ) | $ | (520 | ) |
Nine Months Ended
|
||||||||||
September 30, 2010
|
September 30, 2009
|
|||||||||
Location of Gain or (Loss)
|
(Dollars in Thousands)
|
|||||||||
Recognized in Non-interest
|
Amount of the Gain or (Loss)
|
|||||||||
Income
|
Recognized in Income
|
|||||||||
Interest
rate swaps not designated as
hedging instruments under SFAS
133:
|
||||||||||
Interest
rate contracts
|
Other
|
$ | (253 | ) | $ | (237 | ) | |||
Total
|
$ | (253 | ) | $ | (237 | ) |
(Dollars in Thousands, except per share data)
|
||||||||||||||||
For the three months
|
For the nine months
|
|||||||||||||||
ended September 30,
|
ended September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Basic
|
||||||||||||||||
Net
loss
|
$ | (2,154 | ) | $ | (12,156 | ) | $ | (8,990 | ) | $ | (19,850 | ) | ||||
Weighted
average common shares outstanding
|
13,375,999 | 13,419,026 | 13,381,965 | 13,427,182 | ||||||||||||
Less:
Average unallocated ESOP shares
|
(186,208 | ) | (232,760 | ) | (186,208 | ) | (232,760 | ) | ||||||||
Average
unvested restricted stock awards
|
(21,117 | ) | (63,955 | ) | (44,922 | ) | (94,253 | ) | ||||||||
Average
Shares
|
13,168,674 | 13,122,311 | 13,150,835 | 13,100,169 | ||||||||||||
Basic
loss per common share
|
$ | (0.16 | ) | $ | (0.93 | ) | $ | (0.68 | ) | $ | (1.52 | ) | ||||
Diluted
|
||||||||||||||||
Net
loss
|
$ | (2,154 | ) | $ | (12,156 | ) | $ | (8,990 | ) | $ | (19,850 | ) | ||||
Weighted
average shares outstanding from above
|
13,168,674 | 13,122,311 | 13,150,835 | 13,100,169 | ||||||||||||
Add:Dilutive
effects of assumed exercise of stock options
|
- | - | - | - | ||||||||||||
Dilutive
effects of full vesting of stock awards
|
- | - | - | - | ||||||||||||
Average
shares and dilutive potential common shares
|
13,168,674 | 13,122,311 | 13,150,835 | 13,100,169 | ||||||||||||
Diluted
loss per common share
|
$ | (0.16 | ) | $ | (0.93 | ) | $ | (0.68 | ) | $ | (1.52 | ) |
(Dollars in Thousands)
|
||||||||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
loss
|
$ | (2,154 | ) | $ | (12,156 | ) | $ | (8,990 | ) | $ | (19,850 | ) | ||||
Other
comprehensive income (loss):
|
||||||||||||||||
Change
in securities available for sale:
|
||||||||||||||||
Unrealized
holding gains (losses) arising during the period
|
(582 | ) | 1,397 | 2,956 | 2,329 | |||||||||||
Less
reclassification adjustments for (gains) losses recognized in
income
|
398 | (117 | ) | (831 | ) | (333 | ) | |||||||||
Net
unrealized gains
|
(184 | ) | 1,280 | 2,125 | 1,996 | |||||||||||
Income
tax effect
|
(11 | ) | (486 | ) | 63 | (808 | ) | |||||||||
Net
of tax effect
|
(195 | ) | 794 | 2,188 | 1,188 | |||||||||||
Other-than-temporary-impairment
on available-for-sale debt securities recorded in other comprehensive
income
|
432 | (696 | ) | 1,123 | 451 | |||||||||||
Less
other-than-temporary-impairment on available-for-sale debt securities
associated with credit loss realized in income
|
- | (252 | ) | (81 | ) | (1,573 | ) | |||||||||
Income
tax effect
|
12 | 360 | 31 | 454 | ||||||||||||
Net
of tax effect
|
444 | (588 | ) | 1,073 | (668 | ) | ||||||||||
Total
other comprehensive income (loss)
|
249 | 206 | 3,261 | 520 | ||||||||||||
Comprehensive
loss
|
$ | (1,905 | ) | $ | (11,950 | ) | $ | (5,729 | ) | $ | (19,330 | ) |
Fair Value Measurements at September 30, 2010 Using:
|
||||||||||||||||
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available
for sale
|
||||||||||||||||
U.S.
government-sponsored entities and agencies
|
$ | 2,000 | - | $ | 2,000 | - | ||||||||||
State
and municipal
|
919 | - | 919 | - | ||||||||||||
Mortgage-backed
securities – residential
|
55,360 | - | 55,360 | - | ||||||||||||
Collateralized
mortgage obligations – U.S. Govt.
|
110,359 | - | 110,359 | |||||||||||||
Collateralized
mortgage obligations - other
|
7,890 | - | 4,991 | 2,899 | ||||||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swap
|
$ | (267 | ) | - | $ | (267 | ) |
Fair Value Measurements at December 31, 2009 Using:
|
||||||||||||||||
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available
for sale securities
|
||||||||||||||||
U.S.
government-sponsored entities and agencies
|
$ | 15,752 | - | $ | 15,752 | - | ||||||||||
State
and municipal
|
844 | - | 844 | - | ||||||||||||
Mortgage-backed
securities – residential
|
38,410 | - | 38,410 | - | ||||||||||||
Collateralized
mortgage obligations – U.S. Govt.
|
102,439 | - | 102,439 | - | ||||||||||||
Collateralized
mortgage obligations – other
|
20,493 | - | 19,141 | 1,352 | ||||||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swap
|
$ | (520 | ) | $ | - | $ | (520 | ) | $ | - |
Investment
|
||||
Securities
|
||||
Available-for-sale
|
||||
(Dollars in thousands)
|
||||
Balance
of recurring Level 3 assets at January 1, 2010
|
$ | 1,352 | ||
Total
realized and unrealized gains (losses):
|
||||
Included
in earnings - realized
|
768 | |||
Included
in earnings - unrealized
|
- | |||
Included
other comprehensive income
|
(740 | ) | ||
Proceeds
from maturities and payments, net
|
(7,738 | ) | ||
Transfers
in and/or out of Level 3
|
9,257 | |||
Balance
of recurring Level 3 assets at September 30, 2010
|
$ | 2,899 |
Fair Value Measurements at September 30, 2010 Using:
|
||||||||||||||||
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Other
real estate owned
|
$ | 8,604 | $ | - | $ | - | $ | 8,604 | ||||||||
Impaired
loans – collateral dependent
|
24,830 | $ | - | $ | - | 24,830 |
Fair Value Measurements at December 31, 2009 Using:
|
||||||||||||||||
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Other
real estate owned
|
$ | 5,028 | $ | - | $ | - | $ | 5,028 | ||||||||
Impaired
loans – collateral dependent
|
$ | 28,773 | $ | - | $ | - | $ | 28,773 |
As of September 30,
|
As of December 31,
|
|||||||||||||||
2010
|
2009
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
Amount
|
Fair Value
|
Amount
|
Fair Value
|
|||||||||||||
|
(Dollars
in Thousands)
|
|||||||||||||||
FINANCIAL
ASSETS
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 21,643 | $ | 21,643 | $ | 37,144 | $ | 37,144 | ||||||||
Loans
held for sale
|
49,597 | 49,597 | 8,990 | 8,990 | ||||||||||||
Loans,
net
|
575,780 | 581,609 | 614,371 | 614,229 | ||||||||||||
Federal
Home Loan Bank stock
|
9,798 | n/a | 10,023 | n/a | ||||||||||||
Accrued
interest receivable
|
3,104 | 3,104 | 3,261 | 3,261 | ||||||||||||
FINANCIAL
LIABILITIES
|
||||||||||||||||
Deposits
|
570,363 | 572,721 | 555,444 | 557,094 | ||||||||||||
Securities
sold under agreements to repurchase
|
92,800 | 106,739 | 92,800 | 102,537 | ||||||||||||
Federal
Home Loan Bank advances
|
167,765 | 184,746 | 182,694 | 201,227 | ||||||||||||
Other
borrowings
|
5,000 | 5,000 | 12,200 | 12,200 | ||||||||||||
Accrued
interest payable
|
1,245 | 1,245 | 1,318 | 1,318 |
Year to date
|
||||||||
September 30, 2010
|
September 30, 2009
|
|||||||
Pre-tax
loss
|
$ | (8,990 | ) | $ | (19,568 | ) | ||
Effective
tax rate
|
37.8 | % | 38.1 | % | ||||
Tax
benefit
|
(3,398 | ) | (7,448 | ) | ||||
Increase
in valuation allowance - federal
|
3,145 | 7,142 | ||||||
Increase
in valuation allowance - state
|
253 | 588 | ||||||
Income
tax expense (benefit)
|
$ | - | $ | 282 |
September 30,
|
December 31,
|
Increase (decrease)
|
||||||||||||||
2010
|
2009
|
Dollars
|
Percentage
|
|||||||||||||
|
(Dollars in Thousands)
|
|||||||||||||||
Assets
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 21,643 | $ | 37,144 | $ | (15,501 | ) | -41.7 | % | |||||||
Securitites
available for sale
|
176,528 | 177,938 | (1,410 | ) | -0.8 | % | ||||||||||
Loans
|
586,735 | 628,181 | (41,446 | ) | -6.6 | % | ||||||||||
Allowance
for loan losses
|
(10,955 | ) | (13,810 | ) | 2,855 | -20.7 | % | |||||||||
Loans,
net
|
575,780 | 614,371 | (38,591 | ) | -6.3 | % | ||||||||||
Loans
held for sale
|
49,597 | 8,990 | 40,607 | 451.7 | % | |||||||||||
Other
assets
|
69,064 | 67,118 | 1,946 | 2.9 | % | |||||||||||
Total
assets
|
$ | 892,612 | $ | 905,561 | $ | (12,949 | ) | -1.4 | % | |||||||
Liabilities
and Stockholders' equity
|
||||||||||||||||
Deposits
|
||||||||||||||||
Non-interest
bearing demand
|
$ | 37,046 | $ | 34,988 | $ | 2,058 | 5.9 | % | ||||||||
Interest
bearing demand
|
71,773 | 79,192 | (7,419 | ) | -9.4 | % | ||||||||||
Savings
and money market
|
182,143 | 160,784 | 21,359 | 13.3 | % | |||||||||||
Time
|
279,401 | 280,480 | (1,079 | ) | -0.4 | % | ||||||||||
Total
deposits
|
570,363 | 555,444 | 14,919 | 2.7 | % | |||||||||||
Federal
Home Loan Bank advances
|
167,765 | 182,694 | (14,929 | ) | -8.2 | % | ||||||||||
Securities
sold under agreements to repurchase
|
92,800 | 92,800 | - | 0.0 | % | |||||||||||
Other
borrowings
|
5,000 | 12,200 | (7,200 | ) | -59.0 | % | ||||||||||
Accrued
expenses and other liabilities
|
5,279 | 5,882 | (603 | ) | -10.3 | % | ||||||||||
Total
liabilities
|
841,207 | 849,020 | (7,813 | ) | -0.9 | % | ||||||||||
Stockholders'
equity
|
51,405 | 56,541 | (5,136 | ) | -9.1 | % | ||||||||||
Total
liabilities and stockholders' equity
|
$ | 892,612 | $ | 905,561 | $ | (12,949 | ) | -1.4 | % |
At September 30, 2010
|
||||||||||||||||
Amortized
|
Fair
|
Number of
|
Cumulative
|
|||||||||||||
Cost
|
Value
|
Securities
|
OTTI
|
|||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Private
label collateralized mortgage obligations with OTTI
|
$ | 1,492 | $ | 1,301 | 2 | $ | 1,158 | |||||||||
Private
label collateralized mortgage obligations with no OTTI
|
6,494 | 6,588 | 6 | - | ||||||||||||
Total
private label collateralized mortgage obligations
|
$ | 7,986 | $ | 7,889 | 8 | $ | 1,158 |
Non-performing assets:
|
September 30,
|
December 31,
|
||||||
2010
|
2009
|
|||||||
(Dollars in Thousands)
|
||||||||
Real Estate Loans
|
||||||||
One-to-four-family
|
$ | 9,573 | $ | 12,343 | ||||
Commercial
|
1,025 | 3,895 | ||||||
Other
|
5,376 | 9,638 | ||||||
Construction
- One-to-four-family
|
- | - | ||||||
Construction
- Commercial
|
1,681 | 4,988 | ||||||
Construction
- Acquisition & Development
|
404 | 404 | ||||||
Other Loans - Consumer
|
||||||||
Home
Equity
|
2,295 | 2,973 | ||||||
Other
|
972 | 909 | ||||||
Commercial
|
227 | - | ||||||
Total
non-performing loans
|
21,553 | 35,150 | ||||||
Other
real estate owned
|
8,604 | 5,028 | ||||||
Total
non-performing assets
|
$ | 30,157 | $ | 40,178 | ||||
Total
troubled debt restructurings (TDR)
|
$ | 20,880 | $ | 22,660 | ||||
Total
impaired loans (including TDR)
|
$ | 36,656 | $ | 44,392 | ||||
Non-performing
loans to total loans
|
3.67 | % | 5.64 | % | ||||
Non-performing
loans to total assets
|
2.41 | % | 3.88 | % | ||||
Non-performing
assets to total assets
|
3.38 | % | 4.44 | % |
Non-
Performing
Loans
|
Amount of
General and
Specific Loan
Loss
Allowance
|
Percent of
General and
Specific Loan
Loss
Allowance to
Non-
Performing
Loans
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Real Estate Loans
|
||||||||||||
One-to
four-family
|
$ | 9,573 | $ | 3,873 | 40.46 | % | ||||||
Commercial
|
1,025 | 752 | 73.37 | % | ||||||||
Other
(land & multi-family)
|
5,376 | 1,495 | 27.81 | % | ||||||||
Real Estate Construction
|
||||||||||||
Construction
One-to four family
|
- | 16 | - | |||||||||
Construction
Commercial
|
1,681 | 13 | 0.77 | % | ||||||||
Acquistion
& Development
|
404 | 110 | 27.23 | % | ||||||||
Other Loans
|
||||||||||||
Home
Equity
|
2,295 | 2,044 | 89.06 | % | ||||||||
Consumer
|
972 | 2,421 | 249.07 | % | ||||||||
Commercial
|
227 | 231 | 101.76 | % | ||||||||
Totals
|
$ | 21,553 | $ | 10,955 | 50.83 | % |
Non-Performing
Loans
|
Amount of
Loan Loss
Allowance
|
% of Loan
Loss
Allowance to
Non-Performing
Loans
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Real Estate Loans
|
||||||||||||
One-to
four-family
|
$ | 12,343 | $ | 3,446 | 27.92 | % | ||||||
Commercial
|
3,895 | 575 | 14.76 | % | ||||||||
Other
(land & multi-family)
|
9,638 | 1,305 | 13.54 | % | ||||||||
Real Estate Construction
|
||||||||||||
Construction
One-to four family
|
- | 47 | - | |||||||||
Construction
Commercial
|
4,988 | 3,322 | 66.60 | % | ||||||||
Acquistion
& Development
|
404 | 110 | 27.23 | % | ||||||||
Other Loans
|
||||||||||||
Home
Equity
|
2,973 | 2,240 | 75.34 | % | ||||||||
Consumer
|
909 | 2,447 | 269.20 | % | ||||||||
Commercial
|
- | 318 | - | |||||||||
Totals
|
$ | 35,150 | $ | 13,810 | 39.29 | % |
September 30,
|
September 30,
|
|||||||
2010
|
2009
|
|||||||
Balance
at beginning of period
|
$ | 13,810 | $ | 10,598 | ||||
Charge-offs:
|
||||||||
Real Estate Loans
|
||||||||
One-to
four-family
|
7,906 | 5,982 | ||||||
Commercial
|
1,261 | 690 | ||||||
Other
(Land & Multi-family)
|
1,416 | 3,393 | ||||||
Real Estate Construction
Loans
|
||||||||
Construction
One-to four family
|
- | 50 | ||||||
Construction
Commercial
|
3,307 | - | ||||||
Acquistion
& Development
|
- | - | ||||||
Other Loans
|
||||||||
Home
equity
|
2,306 | 3,696 | ||||||
Consumer
|
1,346 | 801 | ||||||
Commercial
|
698 | 590 | ||||||
Total
charge-offs
|
18,240 | 15,202 | ||||||
Recoveries:
|
||||||||
Real Estate Loans
|
||||||||
One-to
four-family
|
648 | 212 | ||||||
Commercial
|
- | - | ||||||
Other
(Land & Multi-family)
|
123 | 17 | ||||||
Real Estate Construction
Loans
|
||||||||
Construction
One-to four family
|
- | - | ||||||
Construction
Commercial
|
- | - | ||||||
Acquistion
& Develpoment
|
- | - | ||||||
Other Loans
|
||||||||
Home
equity
|
88 | 204 | ||||||
Consumer
|
213 | 271 | ||||||
Commercial
|
7 | 18 | ||||||
Total
recoveries
|
1,079 | 722 | ||||||
Net
charge-offs
|
17,161 | 14,480 | ||||||
Provision
for loan losses
|
14,306 | 18,657 | ||||||
Balance
at end of period
|
$ | 10,955 | $ | 14,775 |
(Dollars in Thousands)
|
||||
Average
daily balance during the period
|
$ | 92,800 | ||
Average
interest rate during the period
|
5.04 | % | ||
Maximum
month-end balance
|
$ | 92,800 | ||
Weighted
average interest rate at period end
|
5.11 | % |
For the three months ended September 30,
|
||||||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
Average
Balance
|
Interest
|
Average Yield
/Cost
|
Average
Balance
|
Interest
|
Average Yield
/Cost
|
|||||||||||||||||||
INTEREST-EARNING ASSETS
|
||||||||||||||||||||||||
Loans
receivable(1)
|
$ | 617,473 | $ | 9,316 | 6.03 | % | $ | 684,784 | $ | 10,094 | 5.90 | % | ||||||||||||
Securites(2)
|
198,620 | 1,835 | 3.70 | % | 180,391 | 2,080 | 4.61 | % | ||||||||||||||||
Other
interest-earning assets(3)
|
30,360 | 48 | 0.63 | % | 46,365 | 43 | 0.37 | % | ||||||||||||||||
Total
interest-earning assets
|
846,453 | 11,199 | 5.29 | % | 911,540 | 12,217 | 5.36 | % | ||||||||||||||||
Non-interest
earning assets
|
52,754 | 60,138 | ||||||||||||||||||||||
Total
assets
|
$ | 899,207 | $ | 971,678 | ||||||||||||||||||||
INTEREST-BEARING
LIABILITIES
|
||||||||||||||||||||||||
Savings
deposits
|
$ | 52,923 | $ | 91 | 0.69 | % | $ | 34,978 | $ | 34 | 0.39 | % | ||||||||||||
Interest
bearing demand accounts
|
75,585 | 240 | 1.27 | % | 76,012 | 353 | 1.86 | % | ||||||||||||||||
Money
market accounts
|
122,807 | 342 | 1.11 | % | 142,344 | 525 | 1.48 | % | ||||||||||||||||
Time
deposits
|
284,606 | 1,789 | 2.51 | % | 322,273 | 2,907 | 3.61 | % | ||||||||||||||||
Securities
sold under agreements to repurchase
|
92,800 | 1,186 | 5.11 | % | 92,800 | 1,714 | 7.39 | % | ||||||||||||||||
Federal
Home Loan Bank advances
|
170,511 | 1,554 | 3.65 | % | 177,656 | 1,085 | 2.44 | % | ||||||||||||||||
Other
borrowings
|
5,000 | 114 | 9.12 | % | - | - | - | |||||||||||||||||
Total
interest-bearing liabilities
|
804,232 | 5,316 | 2.64 | % | 846,063 | 6,618 | 3.13 | % | ||||||||||||||||
Non-interest
bearing liabilities
|
41,584 | 48,276 | ||||||||||||||||||||||
Total
liabilities
|
845,816 | 894,339 | ||||||||||||||||||||||
Stockholders'
equity
|
53,391 | 77,339 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 899,207 | $ | 971,678 | ||||||||||||||||||||
Net
interest income
|
$ | 5,883 | $ | 5,599 | ||||||||||||||||||||
Net
interest spread
|
2.65 | % | 2.23 | % | ||||||||||||||||||||
Net
earning assets
|
$ | 42,221 | $ | 65,477 | ||||||||||||||||||||
Net
interest margin(4)
|
2.78 | % | 2.46 | % | ||||||||||||||||||||
Average
interest-earning assets to average interest-bearing
liabilities
|
105.25 | % | 107.74 | % |
(1)
|
Calculated
net of deferred loan fees. Nonaccrual loans included as loans carrying a
zero yield, includes loans held for
sale.
|
(2)
|
Calculated
based on carrying value. Not full tax equivalents, as the numbers would
not change materially from those presented in the
table.
|
(3)
|
Includes
Federal Home Loan Bank stock at cost and term deposits with other
financial institutions.
|
(4)
|
Net
interest income divided by average interest-earning
assets.
|
Increase/(Decrease)
|
Total
|
|||||||||||
Due to
|
Increase
|
|||||||||||
Volume
|
Rate
|
(Decrease)
|
||||||||||
|
(Dollars in Thousands)
|
|||||||||||
INTEREST-EARNING ASSETS
|
||||||||||||
Loans
receivable
|
$ | (1,011 | ) | $ | 233 | $ | (778 | ) | ||||
Securities
|
204 | (448 | ) | (244 | ) | |||||||
Other
interest-earning assets
|
(20 | ) | 24 | 4 | ||||||||
Total
interest-earning assets
|
(827 | ) | (191 | ) | (1,018 | ) | ||||||
INTEREST-BEARING
LIABILITIES
|
||||||||||||
Savings
deposits
|
23 | 33 | 56 | |||||||||
Interest
bearing demand accounts
|
(2 | ) | (110 | ) | (112 | ) | ||||||
Money
market accounts
|
(66 | ) | (118 | ) | (184 | ) | ||||||
Time
deposits
|
(311 | ) | (807 | ) | (1,118 | ) | ||||||
Securities
sold under agreements to repurchase
|
- | 101 | 101 | |||||||||
Federal
Home Loan Bank advances
|
(67 | ) | (93 | ) | (160 | ) | ||||||
Other
borrowings
|
115 | - | 115 | |||||||||
Total
interest-bearing liabilities
|
(308 | ) | (994 | ) | (1,302 | ) | ||||||
Net
interest income
|
$ | (519 | ) | $ | 803 | $ | 284 |
Increase(decrease)
|
||||||||||||||||
2010
|
2009
|
Dollars
|
Percentage
|
|||||||||||||
(Dollars in Thousands)
|
||||||||||||||||
Service
charges and fees
|
$ | 1,032 | $ | 1,111 | $ | (79 | ) | -7.1 | % | |||||||
Gain
on sale of loans held for sale
|
349 | 147 | 202 | 137.4 | % | |||||||||||
Gain
(loss) on sale of portfolio loans
|
46 | (1,317 | ) | 1,363 | - | |||||||||||
(Loss)
gain on available for sale securities
|
(397 | ) | 117 | (514 | ) | -439.3 | % | |||||||||
Other
than temporary impairment losses
|
- | (252 | ) | 252 | -100.0 | % | ||||||||||
Interchange
fees
|
241 | 235 | 6 | 2.6 | % | |||||||||||
Other
|
287 | 2,210 | (1,923 | ) | -87.0 | % | ||||||||||
$ | 1,558 | $ | 2,251 | $ | (693 | ) | -30.8 | % |
Increase(decrease)
|
||||||||||||||||
2010
|
2009
|
Dollars
|
Percentage
|
|||||||||||||
(Dollars in Thousands)
|
||||||||||||||||
Compensation
and benefits
|
$ | 2,838 | $ | 2,861 | $ | (23 | ) | -0.8 | % | |||||||
Occupancy
and equipment
|
547 | 674 | (127 | ) | -18.8 | % | ||||||||||
FDIC
insurance premiums
|
400 | 422 | (22 | ) | -5.2 | % | ||||||||||
Foreclosed
assets, net
|
560 | 318 | 242 | 76.1 | % | |||||||||||
Data
processing
|
309 | 251 | 58 | 23.1 | % | |||||||||||
Outside
professional services
|
465 | 316 | 149 | 47.2 | % | |||||||||||
Collection
expense and repossessed
|
||||||||||||||||
asset
losses
|
326 | 355 | (29 | ) | -8.2 | % | ||||||||||
Goodwill
impairment
|
- | 2,811 | (2,811 | ) | -100.0 | % | ||||||||||
Other
|
1,060 | 876 | 184 | 21.0 | % | |||||||||||
$ | 6,505 | $ | 8,884 | $ | (2,379 | ) | -26.8 | % |
For the nine months ended September 30,
|
||||||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
Average
Balance
|
Interest
|
Average Yield
/Cost
|
Average
Balance
|
Interest
|
Average Yield
/Cost
|
|||||||||||||||||||
INTEREST-EARNING ASSETS
|
||||||||||||||||||||||||
Loans
receivable(1)
|
$ | 621,703 | $ | 27,997 | 6.00 | % | $ | 714,394 | $ | 31,182 | 5.82 | % | ||||||||||||
Securites(2)
|
199,873 | 5,954 | 3.97 | % | 169,450 | 5,902 | 4.64 | % | ||||||||||||||||
Other
interest-earning assets(3)
|
31,216 | 142 | 0.61 | % | 47,174 | 86 | 0.24 | % | ||||||||||||||||
Total
interest-earning assets
|
852,792 | 34,093 | 5.33 | % | 931,018 | 37,170 | 5.32 | % | ||||||||||||||||
Non-interest
earning assets
|
51,342 | 58,747 | ||||||||||||||||||||||
Total
assets
|
$ | 904,134 | $ | 989,765 | ||||||||||||||||||||
INTEREST-BEARING
LIABILITIES
|
||||||||||||||||||||||||
Savings
deposits
|
$ | 46,157 | $ | 233 | 0.67 | % | $ | 34,621 | $ | 99 | 0.38 | % | ||||||||||||
Interest
bearing demand accounts
|
78,075 | 885 | 1.51 | % | 73,712 | 1,076 | 1.95 | % | ||||||||||||||||
Money
market accounts
|
123,174 | 1,075 | 1.16 | % | 139,766 | 1,834 | 1.75 | % | ||||||||||||||||
Time
deposits
|
292,254 | 5,732 | 2.62 | % | 337,970 | 9,556 | 3.77 | % | ||||||||||||||||
Securities
sold under agreements to repurchase
|
92,800 | 3,508 | 5.04 | % | 92,800 | 5,135 | 7.38 | % | ||||||||||||||||
Federal
Home Loan Bank advances
|
171,577 | 4,675 | 3.63 | % | 182,688 | 3,085 | 2.25 | % | ||||||||||||||||
Other
borrowings
|
3,218 | 203 | 8.41 | % | - | - |
#DIV/0!
|
|||||||||||||||||
Total
interest-bearing liabilities
|
807,255 | 16,311 | 2.69 | % | 861,557 | 20,785 | 3.22 | % | ||||||||||||||||
Non-interest
bearing liabilities
|
40,814 | 48,283 | ||||||||||||||||||||||
Total
liabilities
|
848,069 | 909,840 | ||||||||||||||||||||||
Stockholders'
equity
|
56,065 | 79,925 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 904,134 | $ | 989,765 | ||||||||||||||||||||
Net
interest income
|
$ | 17,782 | $ | 16,385 | ||||||||||||||||||||
Net
interest spread
|
2.64 | % | 2.11 | % | ||||||||||||||||||||
Net
earning assets
|
$ | 45,537 | $ | 69,461 | ||||||||||||||||||||
Net
interest margin(4)
|
2.78 | % | 2.35 | % | ||||||||||||||||||||
Average
interest-earning assets to average interest-bearing
liabilities
|
105.64 | % | 108.06 | % |
(1)
|
Calculated
net of deferred loan fees. Nonaccrual loans included as loans carrying a
zero yield.
|
(2)
|
Calculated
based on carrying value. Not full tax equivalents, as the numbers would
not change materially from those presented in the
table.
|
(3)
|
Includes
Federal Home Loan Bank stock at cost and term deposits with other
financial institutions.
|
(4)
|
Net
interest income divided by average interest-earning
assets.
|
Increase/(Decrease)
|
Total
|
|||||||||||
Due to
|
Increase
|
|||||||||||
Volume
|
Rate
|
(Decrease)
|
||||||||||
|
(Dollars in Thousands)
|
|||||||||||
INTEREST-EARNING ASSETS
|
||||||||||||
Loans
receivable
|
$ | (4,149 | ) | $ | 964 | $ | (3,185 | ) | ||||
Securities
|
983 | (929 | ) | 54 | ||||||||
Other
interest-earning assets
|
(38 | ) | 93 | 55 | ||||||||
Total
interest-earning assets
|
(3,204 | ) | 128 | (3,076 | ) | |||||||
INTEREST-BEARING
LIABILITIES
|
||||||||||||
Savings
deposits
|
41 | 92 | 133 | |||||||||
Interest
bearing demand accounts
|
61 | (252 | ) | (191 | ) | |||||||
Money
market accounts
|
(199 | ) | (560 | ) | (759 | ) | ||||||
Time
deposits
|
(1,171 | ) | (2,653 | ) | (3,824 | ) | ||||||
Securities
sold under agreements to repurchase
|
- | 422 | 422 | |||||||||
Federal
Home Loan Bank advances
|
(306 | ) | (153 | ) | (459 | ) | ||||||
Other
borrowings
|
203 | - | 203 | |||||||||
Total
interest-bearing liabilities
|
(1,371 | ) | (3,104 | ) | (4,475 | ) | ||||||
Net
interest income
|
$ | (1,833 | ) | $ | 3,232 | $ | 1,399 |
Increase(decrease)
|
||||||||||||||||
2010
|
2009
|
Dollars
|
Percentage
|
|||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
Service
charges and fees
|
$ | 2,864 | $ | 3,153 | $ | (289 | ) | -9.2 | % | |||||||
Gain
on sale of loans held for sale
|
531 | 448 | 83 | 18.5 | % | |||||||||||
Loss
on sale of portfolio loans
|
(114 | ) | (1,245 | ) | 1,131 | - | ||||||||||
Gain
on available for sale securities
|
831 | 333 | 498 | 149.5 | % | |||||||||||
Other
than temporary impairment losses
|
(81 | ) | (1,573 | ) | 1,492 | -94.9 | % | |||||||||
Interchange
fees
|
704 | 685 | 19 | 2.8 | % | |||||||||||
Other
|
849 | 2,762 | (1,913 | ) | -69.3 | % | ||||||||||
$ | 5,584 | $ | 4,563 | $ | 1,021 | 22.4 | % |
Increase(decrease)
|
||||||||||||||||
2010
|
2009
|
Dollars
|
Percentage
|
|||||||||||||
(Dollars in Thousands)
|
||||||||||||||||
Compensation
and benefits
|
$ | 7,845 | $ | 8,403 | $ | (558 | ) | -6.6 | % | |||||||
Occupancy
and equipment
|
1,632 | 1,962 | (330 | ) | -16.8 | % | ||||||||||
FDIC
insurance premiums
|
1,246 | 1,435 | (189 | ) | -13.2 | % | ||||||||||
Foreclosed
assets, net
|
681 | 1,308 | (627 | ) | -47.9 | % | ||||||||||
Data
processing
|
966 | 760 | 206 | 27.1 | % | |||||||||||
Outside
professional services
|
1,195 | 1,477 | (282 | ) | -19.1 | % | ||||||||||
Collection
expense and repossessed
|
||||||||||||||||
asset
losses
|
1,324 | 831 | 493 | 59.3 | % | |||||||||||
Goodwill
impairment
|
- | 2,811 | (2,811 | ) | -100.0 | % | ||||||||||
Other
|
3,161 | 2,837 | 324 | 11.4 | % | |||||||||||
$ | 18,050 | $ | 21,824 | $ | (3,774 | ) | -17.3 | % |
At September 30, 2010
|
||||||||||||||||||||||||||||||||
NPV as a Percentage of
|
||||||||||||||||||||||||||||||||
Present Value of Assets (3)
|
Net Interest Income
|
|||||||||||||||||||||||||||||||
Change in
|
Increase (Decrease) in
|
|||||||||||||||||||||||||||||||
Interest Rates
|
Increase
|
Estimated
|
Estimated Net Interest
|
|||||||||||||||||||||||||||||
(basis points)
|
Estimated
|
Estimated (Decrease) in
NPV
|
(Decrease)
|
Net Interest
|
Income
|
|||||||||||||||||||||||||||
(1)
|
NPV (2)
|
Amount
|
Percent
|
NPV Ratio (4)
|
(basis points)
|
Income
|
Amount
|
Percent
|
||||||||||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||||||||||||||||||
+300
|
$ | 55,023 | $ | (3,645 | ) | (6.2 | )% | 6.19 | % | (12 | ) | $ | 24,480 | $ | (482 | ) | (1.93 | )% | ||||||||||||||
+200
|
61,375 | 2,707 | 4.6 | % | 6.78 | % | 47 | 24,760 | (202 | ) | (0.81 | )% | ||||||||||||||||||||
+100
|
63,544 | 4,876 | 8.3 | % | 6.90 | % | 60 | 24,862 | (100 | ) | (0.40 | )% | ||||||||||||||||||||
0
|
58,668 | - | - | 6.31 | % | - | 24,962 | - | - | |||||||||||||||||||||||
-100
|
52,028 | (6,640 | ) | (11.3 | )% | 5.56 | % | (75 | ) | 24,817 | (145 | ) | (0.58 | )% |
(1)
|
Assumes
an instantaneous uniform change in interest rates at all
maturities.
|
(2)
|
NPV
is the discounted present value of expected cash flows from assets,
liabilities and off-balance sheet
contracts.
|
(3)
|
Present
value of assets represents the discounted present value of incoming cash
flows on interest-earning assets.
|
(4)
|
NPV
Ratio represents NPV divided by the present value of
assets.
|
Item
1.
|
Legal
Proceedings
|
Item
1A.
|
Risk
Factors
|
Item
2.
|
Unregistered Sales of
Equity Securities and Use of
Proceeds
|
Item
3.
|
Defaults Upon Senior
Securities
|
Item
4.
|
Removed
and reserved
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
|
a.
|
Exhibits
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
32.
|
Certification
of Chief Executive Officer and Chief Financial Officer of Atlantic Coast
Federal Corporation pursuant to Section
906
|
ATLANTIC
COAST FEDERAL CORPORATION
|
|
(Registrant)
|
|
Date: November
15, 2010
|
/s/ G. Thomas
Frankland
|
G.
Thomas Frankland, Interim President and
Chief
|
|
Executive
Officer
|
|
Date: November
15, 2010
|
/s/ Thomas B. Wagers,
Sr.
|
Thomas
B. Wagers, Sr. Senior Vice–President and
|
|
Chief
Financial Officer
|