UNITED
STATES SECURITIES AND EXCHANGE
COMMISSION
|
|
(X)
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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DELAWARE
|
33-0743196
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(State
or other jurisdiction of incorporation or organization)
|
(I.R.S
Employer Identification No.)
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1600
SUNFLOWER AVENUE, 2ND
FLOOR, COSTA MESA, CALIFORNIA 92626
|
(Address
of principal executive offices and zip
code)
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(714)
431-4000
|
(Registrant’s
telephone number, including area
code)
|
Large
accelerated filer
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[
]
|
Accelerated
filer
|
[
]
|
Non-accelerated
filer
|
[
]
|
Smaller
reporting company
|
[ X
]
|
(Do
not check if a smaller reporting company)
|
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
|
||||||||||||
(dollars
in thousands, except share data)
|
||||||||||||
ASSETS
|
March
31, 2010
|
December
31, 2009
|
March
31, 2009
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|||||||||
(Unaudited)
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(Audited)
|
(Unaudited)
|
||||||||||
Cash
and due from banks
|
$ | 49,541 | $ | 59,677 | $ | 8,081 | ||||||
Federal
funds sold
|
29 | 29 | 28 | |||||||||
Cash
and cash equivalents
|
49,570 | 59,706 | 8,109 | |||||||||
Investment
securities available for sale
|
120,270 | 123,407 | 66,199 | |||||||||
FHLB
stock/Federal Reserve Bank stock, at cost
|
14,330 | 14,330 | 14,330 | |||||||||
Loans
held for sale, net
|
- | - | 652 | |||||||||
Loans
held for investment
|
547,051 | 575,489 | 619,336 | |||||||||
Allowance
for loan losses
|
(9,169 | ) | (8,905 | ) | (6,396 | ) | ||||||
Loans
held for investment, net
|
537,882 | 566,584 | 612,940 | |||||||||
Accrued
interest receivable
|
3,592 | 3,520 | 3,768 | |||||||||
Other
real estate owned
|
6,169 | 3,380 | 55 | |||||||||
Premises
and equipment
|
8,697 | 8,713 | 9,386 | |||||||||
Deferred
income taxes
|
11,546 | 11,465 | 9,891 | |||||||||
Bank
owned life insurance
|
12,060 | 11,926 | 11,527 | |||||||||
Other
assets
|
3,528 | 4,292 | 409 | |||||||||
TOTAL
ASSETS
|
$ | 767,644 | $ | 807,323 | $ | 737,266 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||
LIABILITIES:
|
||||||||||||
Deposit
accounts:
|
||||||||||||
Noninterest
bearing
|
$ | 38,084 | $ | 33,885 | $ | 31,378 | ||||||
Interest
bearing:
|
||||||||||||
Transaction
accounts
|
174,644 | 161,872 | 66,596 | |||||||||
Retail
certificates of deposit
|
397,121 | 417,377 | 385,822 | |||||||||
Wholesale/brokered
certificates of deposit
|
3,052 | 5,600 | 9,554 | |||||||||
Total
deposits
|
612,901 | 618,734 | 493,350 | |||||||||
FHLB
advances and other borrowings
|
66,500 | 91,500 | 172,000 | |||||||||
Subordinated
debentures
|
10,310 | 10,310 | 10,310 | |||||||||
Accrued
expenses and other liabilities
|
3,812 | 13,277 | 3,395 | |||||||||
TOTAL
LIABILITIES
|
693,523 | 733,821 | 679,055 | |||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||||
Preferred
Stock, $.01 par value; 1,000,000 shares authorized; no
shares outstanding
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- | - | - | |||||||||
Common
stock, $.01 par value; 15,000,000 shares authorized; 10,033,836 shares at
March 31, 2010 and December 31, 2009, and 4,803,451 shares at March 31,
2009 issued and outstanding
|
100 | 100 | 47 | |||||||||
Additional
paid-in capital
|
79,928 | 79,907 | 64,373 | |||||||||
Accumulated
deficit
|
(4,308 | ) | (4,764 | ) | (3,767 | ) | ||||||
Accumulated
other comprehensive loss, net of tax of $1,118 at
March 31, 2010, $1,218 at December 31, 2009, and
$1,707 at March 31, 2009
|
(1,599 | ) | (1,741 | ) | (2,442 | ) | ||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
74,121 | 73,502 | 58,211 | |||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 767,644 | $ | 807,323 | $ | 737,266 |
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||
(dollars
in thousands, except per share data)
|
||||||||
(unaudited)
|
||||||||
Three
Months Ended
|
||||||||
March
31, 2010
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March
31, 2009
|
|||||||
INTEREST
INCOME
|
||||||||
Loans
|
$ | 9,155 | $ | 10,165 | ||||
Investment
securities and other interest-earning assets
|
1,029 | 787 | ||||||
Total
interest income
|
10,184 | 10,952 | ||||||
INTEREST
EXPENSE
|
||||||||
Interest-bearing
deposits:
|
||||||||
Interest
on transaction accounts
|
413 | 255 | ||||||
Interest
on certificates of deposit
|
2,168 | 3,456 | ||||||
Total
interest-bearing deposits
|
2,581 | 3,711 | ||||||
FHLB
advances and other borrowings
|
868 | 1,861 | ||||||
Subordinated
debentures
|
75 | 103 | ||||||
Total
interest expense
|
3,524 | 5,675 | ||||||
NET
INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
|
6,660 | 5,277 | ||||||
PROVISION
FOR LOAN LOSSES
|
1,056 | 1,160 | ||||||
NET
INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
5,604 | 4,117 | ||||||
NONINTEREST
INCOME
|
||||||||
Loan
servicing fees
|
70 | 159 | ||||||
Deposit
fees
|
188 | 212 | ||||||
Net
loss from sales of loans
|
(1,015 | ) | - | |||||
Net
gain from sales of investment securities
|
87 | - | ||||||
Other-than-temporary
impairment loss on investment securities, net
|
(326 | ) | 2 | |||||
Other
income
|
270 | 257 | ||||||
Total
noninterest income (loss)
|
(726 | ) | 630 | |||||
NONINTEREST
EXPENSE
|
||||||||
Compensation
and benefits
|
2,013 | 2,009 | ||||||
Premises
and occupancy
|
626 | 658 | ||||||
Data
processing and communications
|
184 | 155 | ||||||
Other
real estate owned operations, net
|
295 | (6 | ) | |||||
FDIC
insurance premiums
|
348 | 286 | ||||||
Legal
and audit
|
125 | 132 | ||||||
Marketing
expense
|
149 | 189 | ||||||
Office
and postage expense
|
123 | 80 | ||||||
Other
expense
|
459 | 427 | ||||||
Total
noninterest expense
|
4,322 | 3,930 | ||||||
NET
INCOME BEFORE INCOME TAX
|
556 | 817 | ||||||
INCOME
TAX
|
100 | 280 | ||||||
NET
INCOME
|
$ | 456 | $ | 537 | ||||
EARNINGS
PER SHARE
|
||||||||
Basic
|
$ | 0.05 | $ | 0.11 | ||||
Diluted
|
$ | 0.04 | $ | 0.09 | ||||
WEIGHTED
AVERAGE SHARES OUTSTANDING
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||||||||
Basic
|
10,033,836 | 4,852,895 | ||||||
Diluted
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11,021,014 | 6,038,129 |
FOR
THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
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||||||||||||||||||||||||||||
(dollars
in thousands)
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||||||||||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||||||||||
Common
Stock Shares
|
Amount
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
Accumulated
Other Comprehensive Income (Loss)
|
Comprehensive
Income
|
Total
Stockholders’ Equity
|
||||||||||||||||||||||
Balance
at December 31, 2008
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4,903,451 | $ | 48 | $ | 64,680 | $ | (4,304 | ) | $ | (2,876 | ) | $ | 57,548 | |||||||||||||||
Comprehensive
Income:
|
||||||||||||||||||||||||||||
Net
income
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537 | 537 | 537 | |||||||||||||||||||||||||
Unrealized
holding gains on securities
arising
during the period, net of tax
|
434 | |||||||||||||||||||||||||||
Net
unrealized gain on securities, net of tax
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434 | 434 | 434 | |||||||||||||||||||||||||
Total
comprehensive income
|
971 | |||||||||||||||||||||||||||
Share-based
compensation expense
|
76 | 76 | ||||||||||||||||||||||||||
Common
stock repurchased and retired
|
(100,000 | ) | (1 | ) | (383 | ) | (384 | ) | ||||||||||||||||||||
Balance
at March 31, 2009
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4,803,451 | $ | 47 | $ | 64,373 | $ | (3,767 | ) | $ | (2,442 | ) | $ | 58,211 | |||||||||||||||
Balance
at December 31, 2009
|
10,033,836 | $ | 100 | $ | 79,907 | $ | (4,764 | ) | $ | (1,741 | ) | $ | 73,502 | |||||||||||||||
Comprehensive
Income:
|
||||||||||||||||||||||||||||
Net
income
|
456 | 456 | 456 | |||||||||||||||||||||||||
Unrealized
holding gains on securities
arising
during the period, net of tax
|
94 | |||||||||||||||||||||||||||
Reclassification
adjustment for net loss on sale
of
securities included in net income, net of tax
|
48 | |||||||||||||||||||||||||||
Net
unrealized gain on securities, net of tax
|
142 | 142 | 142 | |||||||||||||||||||||||||
Total
comprehensive income
|
598 | |||||||||||||||||||||||||||
Share-based
compensation expense
|
21 | 21 | ||||||||||||||||||||||||||
Balance
at March 31, 2010
|
10,033,836 | $ | 100 | $ | 79,928 | $ | (4,308 | ) | $ | (1,599 | ) | $ | 74,121 |
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
(in
thousands)
|
||||||||
(unaudited)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
income
|
$ | 456 | $ | 537 | ||||
Adjustments
to net income:
|
||||||||
Depreciation
and amortization expense
|
247 | 252 | ||||||
Provision
for loan losses
|
1,056 | 1,160 | ||||||
Share-based
compensation expense
|
21 | 76 | ||||||
Loss
on sale and disposal of premises and equipment
|
12 | 24 | ||||||
Loss
on sale of other real estate owned
|
27 | - | ||||||
Write
down of other real estate owned
|
226 | (6 | ) | |||||
Amortization
of premium/discounts on securities held for sale, net
|
129 | 19 | ||||||
Gain
on sale of investment securities available for sale
|
(87 | ) | - | |||||
Other-than-temporary
impairment loss (recovery) on investment securities, net
|
326 | (2 | ) | |||||
Loss
on sale of loans held for investment
|
1,015 | - | ||||||
Proceeds
from the sales of and principal payments from loans held for
sale
|
- | 16 | ||||||
Deferred
income tax provision (benefit)
|
(81 | ) | 613 | |||||
Change
in accrued expenses and other liabilities, net
|
(1,227 | ) | (1,675 | ) | ||||
Income
from bank owned life insurance, net
|
(134 | ) | (132 | ) | ||||
Change
in accrued interest receivable and other assets, net
|
416 | 474 | ||||||
Net
cash provided by operating activities
|
2,402 | 1,356 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Proceeds
from sale and principal payments on loans held for
investment
|
28,670 | 17,372 | ||||||
Net
change in undisbursed loan funds
|
(2,471 | ) | (2,259 | ) | ||||
Purchase
and origination of loans held for investment
|
(2,922 | ) | (7,001 | ) | ||||
Proceeds
from sale of other real estate owned
|
489 | 45 | ||||||
Principal
payments on securities available for sale
|
3,216 | 1,963 | ||||||
Purchase
of securities available for sale
|
(32,795 | ) | (10,986 | ) | ||||
Proceeds
from sale or maturity of securities available for sale
|
24,351 | - | ||||||
Purchases
of premises and equipment
|
(243 | ) | (26 | ) | ||||
Net
cash provided by (used in) investing activities
|
18,295 | (892 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Net increase
in deposit accounts
|
(5,833 | ) | 36,222 | |||||
Repayment
of FHLB advances and other borrowings
|
(25,000 | ) | (37,900 | ) | ||||
Repurchase
of common stock
|
- | (384 | ) | |||||
Net
cash used in financing activities
|
(30,833 | ) | (2,062 | ) | ||||
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(10,136 | ) | (1,598 | ) | ||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
59,706 | 9,707 | ||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 49,570 | $ | 8,109 | ||||
SUPPLEMENTAL
CASH FLOW DISCLOSURES
|
||||||||
Interest
paid
|
$ | 3,403 | $ | 5,512 | ||||
Income
taxes paid
|
$ | 150 | $ | 475 | ||||
NONCASH
OPERATING ACTIVITIES DURING THE PERIOD
|
||||||||
Restricted
stock vested
|
$ | - | $ | 91 | ||||
NONCASH
INVESTING ACTIVITIES DURING THE PERIOD
|
||||||||
Transfers
from loans to foreclosed real estate
|
$ | 3,530 | $ | 55 |
Tier-1
Capital to
|
Tier-1
Risk-Based Capital to
|
Total
Capital to
|
||||||||||||||||||||||
Adjusted
Tangible Assets
|
Risk-Weighted
Assets
|
Risk-Weighted
Assets
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
March 31, 2010
|
||||||||||||||||||||||||
Bank:
|
||||||||||||||||||||||||
Regulatory
capital
|
$ | 78,928 | 10.01 | % | $ | 78,928 | 13.96 | % | $ | 86,009 | 15.21 | % | ||||||||||||
Adequately
capitalized requirement
|
31,538 | 4.00 | % | 22,623 | 4.00 | % | 45,246 | 8.00 | % | |||||||||||||||
Well
capitalized requirement
|
39,423 | 5.00 | % | 33,934 | 6.00 | % | 56,558 | 10.00 | % | |||||||||||||||
Consolidated
regulatory capital
|
80,160 | 10.17 | % | 80,160 | 14.06 | % | 87,311 | 15.32 | % | |||||||||||||||
December 31, 2009
|
||||||||||||||||||||||||
Bank:
|
||||||||||||||||||||||||
Regulatory
capital
|
$ | 78,463 | 9.72 | % | $ | 78,463 | 13.30 | % | $ | 85,855 | 14.55 | % | ||||||||||||
Adequately
capitalized requirement
|
32,300 | 4.00 | % | 23,600 | 4.00 | % | 47,201 | 8.00 | % | |||||||||||||||
Well
capitalized requirement
|
40,375 | 5.00 | % | 35,401 | 6.00 | % | 59,001 | 10.00 | % | |||||||||||||||
Consolidated
regulatory capital
|
79,801 | 9.89 | % | 79,801 | 13.41 | % | 87,256 | 14.67 | % | |||||||||||||||
March 31, 2009
|
||||||||||||||||||||||||
Bank:
|
||||||||||||||||||||||||
Regulatory
capital
|
$ | 65,426 | 8.89 | % | $ | 65,426 | 10.94 | % | $ | 71,822 | 12.01 | % | ||||||||||||
Adequately
capitalized requirement
|
29,427 | 4.00 | % | 23,917 | 4.00 | % | 47,834 | 8.00 | % | |||||||||||||||
Well
capitalized requirement
|
36,784 | 5.00 | % | 35,876 | 6.00 | % | 59,793 | 10.00 | % | |||||||||||||||
Consolidated
regulatory capital
|
66,492 | 9.04 | % | 66,492 | 11.03 | % | 72,888 | 12.09 | % |
Three
Months Ended March 31,
|
||||||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||||||
Net
|
Per
Share
|
Net
|
Per
Share
|
|||||||||||||||||||||
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
|||||||||||||||||||
(dollars
in thousands, except per share data)
|
||||||||||||||||||||||||
Net
income
|
$ | 456 | $ | 537 | ||||||||||||||||||||
Basic
income available to common
stockholders
|
456 | 10,033,836 | $ | 0.05 | 537 | 4,852,895 | $ | 0.11 | ||||||||||||||||
Effect
of warrants and dilutive stock options
|
- | 987,178 | - | 1,185,234 | ||||||||||||||||||||
Diluted
income available to common stockholders plus assumed
conversions
|
$ | 456 | 11,021,014 | $ | 0.04 | $ | 537 | 6,038,129 | $ | 0.09 |
March
31, 2010
|
||||||||||||||||
Fair
Value Measurement Using
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Assets
at
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Marketable
securities
|
$ | 115,218 | $ | 4,851 | $ | 201 | $ | 120,270 | ||||||||
Total
assets
|
$ | 115,218 | $ | 4,851 | $ | 201 | $ | 120,270 |
Fair
Value Measurement Using Significant Other Unobservable
Inputs
|
||||
(Level
3)
|
||||
Marketable
securities
|
||||
(in
thousands)
|
||||
Beginning
Balance, January 1, 2010
|
$ | 623 | ||
Total
gains or losses (realized/unrealized):
|
||||
Included
in earnings (or changes in net assets)
|
(153 | ) | ||
Included
in other comprehensive income
|
(245 | ) | ||
Purchases,
issuances, and settlements
|
(24 | ) | ||
Transfer
in and/or out of Level 3
|
- | |||
Ending
Balance, March 31, 2010
|
$ | 201 |
March
31, 2010
|
||||||||||||||||
Fair
Value Measurement Using
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Assets
at
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Impaired
loans
|
$ | - | $ | 7,930 | $ | - | $ | 7,930 | ||||||||
Other
real estate owned
|
- | 6,169 | - | 6,169 | ||||||||||||
Total
assets
|
$ | - | $ | 14,099 | $ | - | $ | 14,099 |
·
|
The
strength of the United States economy in general and the strength of the
local economies in which we conduct
operations;
|
·
|
The
effects of, and changes in, trade, monetary and fiscal policies and laws,
including interest rate policies of the Board of Governors of the Federal
Reserve System (the “Federal Reserve
Board”);
|
·
|
Inflation,
interest rate, market and monetary
fluctuations;
|
·
|
The
timely development of competitive new products and services and the
acceptance of these products and services by new and existing
customers;
|
·
|
The
willingness of users to substitute competitors’ products and services for
our products and services;
|
·
|
The
impact of changes in financial services policies, laws and regulations,
including laws, regulations and policies concerning taxes, banking,
securities and insurance, and the application thereof by regulatory
bodies;
|
·
|
Technological
changes;
|
·
|
The
effect of acquisitions we may make, if any, including, without limitation,
the failure to achieve the expected revenue growth and/or expense savings
from such acquisitions;
|
·
|
Changes
in the level of our nonperforming assets and
charge-offs;
|
·
|
Oversupply
of inventory and continued deterioration in values of California real
estate, both residential and
commercial;
|
·
|
The
effect of changes in accounting policies and practices, as may be adopted
from time-to-time by bank regulatory agencies, the SEC, the Public Company
Accounting Oversight Board, the Financial Accounting Standards Board or
other accounting standards setters;
|
·
|
Possible
other-than-temporary impairments of securities held by
us;
|
·
|
The
impact of current governmental efforts to restructure the U.S. financial
regulatory system;
|
·
|
Changes
in consumer spending, borrowing and savings
habits;
|
·
|
The
effects of our lack of a diversified loan portfolio, including the risks
of geographic and industry
concentrations;
|
·
|
Ability
to attract deposits and other sources of
liquidity;
|
·
|
Changes
in the financial performance and/or condition of our
borrowers;
|
·
|
Changes
in the competitive environment among financial and bank holding companies
and other financial service
providers;
|
·
|
Geopolitical
conditions, including acts or threats of terrorism, actions taken by the
United States or other governments in response to acts or threats of
terrorism and/or military conflicts, which could impact business and
economic conditions in the United States and
abroad;
|
·
|
Unanticipated
regulatory or judicial proceedings;
and
|
·
|
Our
ability to manage the risks involved in the
foregoing.
|
March
31, 2010
|
December
31, 2009
|
March
31, 2009
|
||||||||||||||||||||||||||||||||||
Amount
|
Percent
of Total
|
Weighted
Average Interest Rate
|
Amount
|
Percent
of Total
|
Weighted
Average Interest Rate
|
Amount
|
Percent
of Total
|
Weighted
Average Interest Rate
|
||||||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||||||
Multi-family
|
$ | 264,996 | 48.4 | % | 6.18 | % | $ | 278,744 | 48.4 | % | 6.20 | % | $ | 289,803 | 46.7 | % | 6.30 | % | ||||||||||||||||||
Commercial
investor
|
139,953 | 25.6 | % | 6.88 | % | 149,577 | 26.0 | % | 6.84 | % | 161,409 | 26.0 | % | 6.99 | % | |||||||||||||||||||||
One-to-four
family (1)
|
8,364 | 1.5 | % | 8.23 | % | 8,491 | 1.5 | % | 8.25 | % | 8,922 | 1.4 | % | 8.67 | % | |||||||||||||||||||||
Land
|
- | 0.0 | % | 0.00 | % | - | 0.0 | % | 0.00 | % | 2,550 | 0.4 | % | 0.00 | % | |||||||||||||||||||||
Business
loans:
|
||||||||||||||||||||||||||||||||||||
Commercial
owner occupied (2)
|
96,336 | 17.6 | % | 7.14 | % | 103,019 | 17.9 | % | 7.11 | % | 107,714 | 17.4 | % | 7.05 | % | |||||||||||||||||||||
Commercial
and industrial
|
33,166 | 6.1 | % | 6.87 | % | 31,109 | 5.4 | % | 6.98 | % | 43,604 | 7.0 | % | 7.19 | % | |||||||||||||||||||||
SBA
|
3,002 | 0.5 | % | 5.69 | % | 3,337 | 0.5 | % | 5.73 | % | 4,620 | 0.8 | % | 5.67 | % | |||||||||||||||||||||
Other
loans
|
1,770 | 0.3 | % | 1.29 | % | 1,991 | 0.3 | % | 1.33 | % | 2,010 | 0.3 | % | 2.13 | % | |||||||||||||||||||||
Total
gross loans
|
547,587 | 100.0 | % | 6.58 | % | 576,268 | 100.0 | % | 6.58 | % | 620,632 | 100.0 | % | 6.66 | % | |||||||||||||||||||||
Loans
held for sale
|
- | - | (652 | ) | ||||||||||||||||||||||||||||||||
Total
gross loans held for investment
|
547,587 | 576,268 | 619,980 | |||||||||||||||||||||||||||||||||
Less
(plus):
|
||||||||||||||||||||||||||||||||||||
Deferred
loan origination costs (fees) and premiums (discounts)
|
(536 | ) | (779 | ) | (644 | ) | ||||||||||||||||||||||||||||||
Allowance
for loan losses
|
(9,169 | ) | (8,905 | ) | (6,396 | ) | ||||||||||||||||||||||||||||||
Loans
held for investment, net
|
$ | 537,882 | $ | 566,584 | $ | 612,940 | ||||||||||||||||||||||||||||||
(1)
Includes second trust deeds.
|
||||||||||||||||||||||||||||||||||||
(2)
Secured by real estate.
|
Three
Months Ended
|
||||||||
March
31, 2010
|
March
31, 2009
|
|||||||
(in
thousands)
|
||||||||
Beginning
balance gross loans
|
$ | 576,268 | $ | 628,767 | ||||
Loans
originated:
|
||||||||
Business
loans:
|
||||||||
Commecial
and industrial
|
2,740 | 2,100 | ||||||
SBA
|
50 | - | ||||||
Other
loans
|
132 | 850 | ||||||
Total
loans originated
|
2,922 | 2,950 | ||||||
Loans
purchased:
|
||||||||
Multi-family
|
- | 4,051 | ||||||
Total
loans purchased
|
- | 4,051 | ||||||
Total
loan production
|
2,922 | 7,001 | ||||||
Principal
repayments
|
(15,395 | ) | (16,695 | ) | ||||
Change
in undisbursed loan funds
|
2,471 | 2,259 | ||||||
Sales
of loans
|
(14,290 | ) | - | |||||
Charge-offs
|
(859 | ) | (645 | ) | ||||
Transfer
to other real estate owned
|
(3,530 | ) | (55 | ) | ||||
Net
decrease in gross loans
|
(28,681 | ) | (8,135 | ) | ||||
Ending
balance gross loans
|
$ | 547,587 | $ | 620,632 |
March
31, 2010
|
||||||||||||||||
Number
of Loans
|
Amount
|
Weighted
Average
Interest
Rate
|
Weighted
Average Months to Reprice
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
1
Year and less (1)
|
223 | $ | 217,626 | 6.21 | % | 3.86 | ||||||||||
Over
1 Year to 3 Years
|
123 | 143,449 | 6.78 | % | 25.47 | |||||||||||
Over
3 Years to 5 Years
|
46 | 55,220 | 6.54 | % | 45.23 | |||||||||||
Over
5 Years to 7 Years
|
12 | 15,549 | 6.97 | % | 72.09 | |||||||||||
Over
7 Years to 10 Years
|
18 | 15,158 | 7.47 | % | 94.76 | |||||||||||
Fixed
|
48 | 54,283 | 7.04 | % | - | |||||||||||
Total
|
470 | $ | 501,285 | 6.56 | % | 21.36 | ||||||||||
(1)
Includes three and five-year hybrid loans that have reached their initial
repricing date.
|
||||||||||||||||
30
- 59 Days
|
60
- 89 Days
|
90
Days or More (1)
|
Total
|
|||||||||||||||||||||||||||||
#
of
Loans
|
Principal
Balance
of
Loans
|
#
of
Loans
|
Principal
Balance
of
Loans
|
#
of
Loans
|
Principal
Balance
of
Loans
|
#
of
Loans
|
Principal
Balance
of
Loans
|
|||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||
At
March 31, 2010
|
||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||
Commercial
investor
|
- | $ | - | 2 | $ | 3,384 | - | $ | - | 2 | $ | 3,384 | ||||||||||||||||||||
One-to-four
family
|
2 | 31 | 2 | 25 | 2 | 65 | 6 | 121 | ||||||||||||||||||||||||
Business
loans:
|
||||||||||||||||||||||||||||||||
Commercial
owner occupied
|
- | - | - | - | 2 | 972 | 2 | 972 | ||||||||||||||||||||||||
Commercial
and industrial
|
1 | 38 | 1 | 400 | - | - | 2 | 438 | ||||||||||||||||||||||||
SBA
|
3 | 497 | 1 | 96 | 4 | 499 | 8 | 1,092 | ||||||||||||||||||||||||
Total
|
6 | $ | 566 | 6 | $ | 3,905 | 8 | $ | 1,536 | 20 | $ | 6,007 | ||||||||||||||||||||
Delinquent
loans to total gross loans
|
0.11 | % | 0.71 | % | 0.28 | % | 1.10 | % | ||||||||||||||||||||||||
At
December 31, 2009
|
||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||
Multi-family
|
1 | $ | 3,149 | - | $ | - | 3 | $ | 2,073 | 4 | $ | 5,222 | ||||||||||||||||||||
Commercial
investor
|
1 | 694 | - | - | 1 | 1,851 | 2 | 2,545 | ||||||||||||||||||||||||
One-to-four
family
|
3 | 45 | - | - | 4 | 97 | 7 | 142 | ||||||||||||||||||||||||
Business
loans:
|
||||||||||||||||||||||||||||||||
Commercial
owner occupied
|
- | - | - | - | 2 | 996 | 2 | 996 | ||||||||||||||||||||||||
SBA
|
1 | 69 | 1 | 52 | 3 | 463 | 5 | 584 | ||||||||||||||||||||||||
Other
|
1 | 19 | - | - | - | - | 1 | 19 | ||||||||||||||||||||||||
Total
|
7 | $ | 3,976 | 1 | $ | 52 | 13 | $ | 5,480 | 21 | $ | 9,508 | ||||||||||||||||||||
Delinquent
loans to total gross loans
|
0.69 | % | 0.01 | % | 0.95 | % | 1.65 | % | ||||||||||||||||||||||||
At
March 31, 2009
|
||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||
Multi-family
|
2 | $ | 3,940 | - | $ | - | - | $ | - | 2 | $ | 3,940 | ||||||||||||||||||||
Commercial
investor
|
- | - | 1 | 541 | 2 | 2,084 | 3 | 2,625 | ||||||||||||||||||||||||
One-to-four
family
|
7 | 158 | - | - | 6 | 333 | 13 | 491 | ||||||||||||||||||||||||
Land
|
- | - | - | - | 1 | 2,550 | 1 | 2,550 | ||||||||||||||||||||||||
Business
loans:
|
||||||||||||||||||||||||||||||||
Commercial
owner occupied
|
- | - | 1 | 517 | 1 | 317 | 2 | 834 | ||||||||||||||||||||||||
Commercial
and industrial
|
- | - | 1 | 15 | - | - | 1 | 15 | ||||||||||||||||||||||||
SBA
|
- | - | 5 | 1,077 | 3 | 278 | 8 | 1,355 | ||||||||||||||||||||||||
Total
|
9 | $ | 4,098 | 8 | $ | 2,150 | 13 | $ | 5,562 | 30 | $ | 11,810 | ||||||||||||||||||||
Delinquent
loans to total gross loans
|
0.66 | % | 0.34 | % | 0.90 | % | 1.90 | % | ||||||||||||||||||||||||
(1)
All 90 day or greater delinquency are on nonaccrual status and are
reported as part of nonperforming loans.
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
(dollars
in thousands)
|
||||||||
Balance,
beginning of period
|
$ | 8,905 | $ | 5,881 | ||||
Provision
for loan losses
|
1,056 | 1,160 | ||||||
Charge-offs:
|
||||||||
Real
estate:
|
||||||||
Multi-family
|
334 | - | ||||||
One-to-four
family
|
10 | 99 | ||||||
Business
loans:
|
||||||||
Commercial
and industrial
|
515 | 356 | ||||||
SBA
|
- | 227 | ||||||
Other
loans
|
- | - | ||||||
Total
charge-offs
|
859 | 682 | ||||||
Recoveries
:
|
||||||||
Real
estate:
|
||||||||
One-to-four
family
|
20 | 21 | ||||||
Business
loans:
|
||||||||
SBA
|
43 | 12 | ||||||
Other
loans
|
4 | 4 | ||||||
Total
recoveries
|
67 | 37 | ||||||
Net
loan charge-offs
|
792 | 645 | ||||||
Balance
at end of period
|
$ | 9,169 | $ | 6,396 | ||||
Ratios:
|
||||||||
Net
charge-off to average net loans
|
0.14 | % | 0.10 | % | ||||
Allowance
for loan losses to gross loans at end of period
|
1.67 | % | 1.03 | % |
March
31, 2010
|
December
31, 2009
|
March
31, 2009
|
||||||||||||||||||||||||||||||||||
Balance
at End of Period Applicable to
|
Amount
|
Allowance
as a % of Category Total
|
%
of Loans in Category to Total Loans
|
Amount
|
Allowance
as a % of Category Total
|
%
of Loans in Category to Total Loans
|
Amount
|
Allowance
as a % of Category Total
|
%
of Loans in Category to Total Loans
|
|||||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||||||
Multi-family
|
$ | 3,910 | 1.5 | % | 48.4 | % | $ | 3,350 | 1.2 | % | 48.4 | % | $ | 1,773 | 0.6 | % | 46.7 | % | ||||||||||||||||||
Commercial
investor
|
1,688 | 1.2 | % | 25.6 | % | 1,585 | 1.1 | % | 26.0 | % | 2,021 | 1.3 | % | 26.0 | % | |||||||||||||||||||||
One-to-four
family
|
161 | 1.9 | % | 1.5 | % | 269 | 3.2 | % | 1.5 | % | 193 | 2.2 | % | 1.4 | % | |||||||||||||||||||||
Land
|
- | -- | 0.0 | % | - | -- | 0.0 | % | - | -- | 0.4 | % | ||||||||||||||||||||||||
Business
loans:
|
||||||||||||||||||||||||||||||||||||
Commercial
owner occupied
|
936 | 1.0 | % | 17.6 | % | 897 | 0.9 | % | 17.9 | % | - | 0.0 | % | 17.4 | % | |||||||||||||||||||||
Commercial
and industrial
|
2,052 | 6.2 | % | 6.1 | % | 2,384 | 7.7 | % | 5.4 | % | 2,386 | 5.5 | % | 7.0 | % | |||||||||||||||||||||
SBA
|
262 | 8.7 | % | 0.5 | % | 323 | 9.7 | % | 0.5 | % | - | 0.0 | % | 0.8 | % | |||||||||||||||||||||
Other
Loans
|
10 | 0.6 | % | 0.3 | % | 2 | 0.1 | % | 0.3 | % | 23 | 1.1 | % | 0.3 | % | |||||||||||||||||||||
Unallocated
|
150 | -- | -- | 95 | -- | -- | - | -- | -- | |||||||||||||||||||||||||||
Total
|
$ | 9,169 | -- | 100.0 | % | $ | 8,905 | -- | 100.0 | % | $ | 6,396 | -- | 100.0 | % |
March
31, 2010
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Securities
available for sale
|
||||||||||||||||
U.S.
Treasury
|
$ | 147 | $ | 8 | $ | - | $ | 155 | ||||||||
Municipal
bonds
|
19,177 | 176 | (60 | ) | 19,293 | |||||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Government
Sponsored Enterprise
|
96,156 | 83 | (469 | ) | 95,770 | |||||||||||
Private
label securities
|
7,508 | 82 | (2,538 | ) | 5,052 | |||||||||||
Total
securities available for sale
|
122,988 | 349 | (3,067 | ) | 120,270 | |||||||||||
FHLB
stock
|
12,731 | - | - | 12,731 | ||||||||||||
Federal
Reserve Bank stock
|
1,599 | - | - | 1,599 | ||||||||||||
Total
equities held at cost
|
14,330 | - | - | 14,330 | ||||||||||||
Total
securities
|
$ | 137,318 | $ | 349 | $ | (3,067 | ) | $ | 134,600 | |||||||
December 31,
2009
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Securities
available for sale:
|
||||||||||||||||
U.S.
Treasury
|
$ | 148 | $ | 6 | $ | - | $ | 154 | ||||||||
Municipal
bonds
|
17,918 | 200 | (153 | ) | 17,965 | |||||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Government
Sponsored Enterprise
|
100,104 | 244 | (738 | ) | 99,610 | |||||||||||
Private
label securities
|
8,196 | 63 | (2,581 | ) | 5,678 | |||||||||||
Total
securities available for sale
|
126,366 | 513 | (3,472 | ) | 123,407 | |||||||||||
FHLB
stock
|
12,731 | - | - | 12,731 | ||||||||||||
Federal
Reserve Bank stock
|
1,599 | - | - | 1,599 | ||||||||||||
Total
equities held at cost
|
14,330 | - | - | 14,330 | ||||||||||||
Total
securities
|
$ | 140,696 | $ | 513 | $ | (3,472 | ) | $ | 137,737 | |||||||
March
31, 2009
|
||||||||||||||||
Amortized
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Securities
available for sale
|
||||||||||||||||
U.S.
Treasury
|
$ | 148 | $ | 15 | $ | - | $ | 163 | ||||||||
Government
Sponsored Enterprise
|
37,809 | 1,457 | (9 | ) | 39,257 | |||||||||||
Mortgage-backed
securities:
|
||||||||||||||||
Private
label securities
|
32,390 | 511 | (6,122 | ) | 26,779 | |||||||||||
Total
securities available for sale
|
70,347 | 1,983 | (6,131 | ) | 66,199 | |||||||||||
FHLB
stock
|
12,731 | - | - | 12,731 | ||||||||||||
Federal
Reserve Bank stock
|
1,599 | - | - | 1,599 | ||||||||||||
Total
equities held at cost
|
14,330 | - | - | 14,330 | ||||||||||||
Total
securities
|
$ | 84,677 | $ | 1,983 | $ | (6,131 | ) | $ | 80,529 |
March
31, 2010
|
||||||||||||||||||||||||||||||||||||||||
One
Year
|
More
than One
|
More
than Five Years
|
More
than
|
|
||||||||||||||||||||||||||||||||||||
or
Less
|
to
Five Years
|
to
Ten Years
|
Ten
Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||||||||
Fair
|
Average
|
Fair
|
Average
|
Fair
|
Average
|
Fair
|
Average
|
Fair
|
Average
|
|||||||||||||||||||||||||||||||
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
|||||||||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Investement
securities available for sale:
|
||||||||||||||||||||||||||||||||||||||||
U.S.
Treasury
|
$ | - | 0.00 | % | $ | 78 | 3.53 | % | $ | 77 | 4.15 | % | $ | - | 0.00 | % | $ | 155 | 4.04 | % | ||||||||||||||||||||
Municipal
bonds
|
- | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 19,293 | 4.34 | % | 19,293 | 4.37 | % | |||||||||||||||||||||||||
Mortgage-backed
securities:
|
||||||||||||||||||||||||||||||||||||||||
Government
Sponsored Enterprise
|
- | 0.00 | % | 4,775 | 2.60 | % | 213 | 5.46 | % | 90,782 | 3.36 | % | 95,770 | 3.31 | % | |||||||||||||||||||||||||
Private
label securities
|
- | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 5,052 | 6.29 | % | 5,052 | 6.18 | % | |||||||||||||||||||||||||
Total
investment securities available for sale
|
- | 0.00 | % | 4,853 | 2.61 | % | 290 | 5.11 | % | 115,127 | 3.65 | % | 120,270 | 3.60 | % | |||||||||||||||||||||||||
Stock:
|
||||||||||||||||||||||||||||||||||||||||
FHLB
|
12,731 | 0.83 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 12,731 | 0.83 | % | |||||||||||||||||||||||||
Federal
Reserve Bank
|
1,599 | 6.00 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 1,599 | 6.00 | % | |||||||||||||||||||||||||
Total
stock
|
14,330 | 1.41 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | $ | 14,330 | 1.41 | % | ||||||||||||||||||||||||
Total
securities
|
$ | 14,330 | 1.41 | % | $ | 4,853 | 2.61 | % | $ | 290 | 5.11 | % | $ | 115,127 | 3.65 | % | $ | 134,600 | 3.37 | % |
March
31, 2010
|
December
31, 2009
|
March
31, 2009
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Nonperforming
assets
|
||||||||||||
Real
estate:
|
||||||||||||
Multi-family
|
$ | 2,032 | $ | 5,223 | $ | - | ||||||
Commercial
investor
|
- | 1,851 | 5,627 | |||||||||
One-to-four
family
|
74 | 107 | 333 | |||||||||
Business
loans:
|
||||||||||||
Commercial
owner occupied
|
972 | 996 | 317 | |||||||||
Commercial
and industrial
|
438 | 955 | 15 | |||||||||
SBA
(1)
|
783 | 880 | 1,300 | |||||||||
Total
nonaccrual loans
|
4,299 | 10,012 | 7,592 | |||||||||
Other
real estate owned
|
6,169 | 3,380 | 55 | |||||||||
Total
nonperforming assets, net
|
$ | 10,468 | $ | 13,392 | $ | 7,647 | ||||||
Allowance
for loan losses
|
$ | 9,169 | $ | 8,905 | $ | 6,396 | ||||||
Allowance
for loan losses as a percent of total nonperforming loans,
gross
|
213.28 | % | 88.94 | % | 84.25 | % | ||||||
Nonperforming
loans as a percent of gross loans receivable (2)
|
0.79 | % | 1.74 | % | 1.22 | % | ||||||
Nonperforming
assets as a percent of total assets
|
1.36 | % | 1.66 | % | 1.04 | % |
(1)
|
The
SBA totals include the guaranteed amount, which was $588,000 as of March
31, 2010, $624,000 as of December 31, 2009, and $652,000 as of March 31,
2009.
|
(2)
|
Gross
loans include loans receivable held for investment and held for
sale.
|
March
31, 2010
|
December
31, 2009
|
March
31, 2009
|
|||||||||||||||||||||||||||||||||||
Balance
|
%
of Total Deposits
|
Weighted
Average Rate
|
Balance
|
%
of Total Deposits
|
Weighted
Average Rate
|
Balance
|
%
of Total Deposits
|
Weighted
Average Rate
|
|||||||||||||||||||||||||||||
(dollars
in thousands)
|
|||||||||||||||||||||||||||||||||||||
Transaction
accounts:
|
|||||||||||||||||||||||||||||||||||||
Non-interest
bearing checking
|
$ | 38,084 | 6.2 | % | 0.00 | % | $ | 33,885 | 5.5 | % | 0.00 | % | $ | 31,377 | 6.4 | % | 0.00 | % | |||||||||||||||||||
Interest
bearing checking
|
21,067 | 3.4 | % | 0.34 | % | 22,406 | 3.6 | % | 0.39 | % | 19,321 | 3.9 | % | 0.95 | % | ||||||||||||||||||||||
Money
market
|
89,927 | 14.7 | % | 0.95 | % | 77,687 | 12.6 | % | 1.17 | % | 28,917 | 5.9 | % | 1.89 | % | ||||||||||||||||||||||
Regular
passbook
|
63,650 | 10.4 | % | 1.11 | % | 61,779 | 9.9 | % | 1.33 | % | 18,359 | 3.7 | % | 1.86 | % | ||||||||||||||||||||||
Total
transaction accounts
|
212,728 | 34.7 | % | 0.77 | % | 195,757 | 31.6 | % | 0.93 | % | 97,974 | 19.9 | % | 1.12 | % | ||||||||||||||||||||||
Certificates
of deposit accounts:
|
|||||||||||||||||||||||||||||||||||||
Less
than 1.00%
|
47,655 | 7.8 | % | 0.53 | % | 30,867 | 5.0 | % | 0.82 | % | 98 | 0.0 | % | 0.31 | % | ||||||||||||||||||||||
1.00 - 1.99 | 67,956 | 11.1 | % | 1.69 | % | 91,207 | 14.7 | % | 1.63 | % | 19,183 | 3.9 | % | 1.82 | % | ||||||||||||||||||||||
2.00 - 2.99 | 280,833 | 45.8 | % | 2.43 | % | 292,689 | 47.3 | % | 2.44 | % | 99,333 | 20.1 | % | 2.47 | % | ||||||||||||||||||||||
3.00 - 3.99 | 731 | 0.1 | % | 3.47 | % | 3,427 | 0.6 | % | 3.29 | % | 202,290 | 41.0 | % | 3.61 | % | ||||||||||||||||||||||
4.00 - 4.99 | 1,679 | 0.3 | % | 4.44 | % | 3,463 | 0.6 | % | 4.40 | % | 72,680 | 14.7 | % | 4.27 | % | ||||||||||||||||||||||
5.00
and greater
|
1,319 | 0.2 | % | 5.34 | % | 1,324 | 0.2 | % | 5.34 | % | 1,792 | 0.4 | % | 5.42 | % | ||||||||||||||||||||||
Total
certificates of deposit accounts
|
400,173 | 65.3 | % | 2.10 | % | 422,977 | 68.4 | % | 2.18 | % | 395,376 | 80.1 | % | 3.37 | % | ||||||||||||||||||||||
Total
deposits
|
$ | 612,901 | 100.0 | % | 1.64 | % | $ | 618,734 | 100.0 | % | 1.79 | % | $ | 493,350 | 100.0 | % | 2.92 | % |
·
|
One
FHLB term borrowing of $38.0 million at an interest rate of 4.92%,
collateralized by pledges of certain real estate loans with an aggregate
principal balance of $470.8 million and FHLB stock totaling $12.7 million,
and that matures in November 2010;
|
·
|
Three
inverse putable reverse repurchase agreements totaling $28.5 million at a
weighted average rate of 3.04% and secured by approximately $45.4 million
of mortgage backed securities issued by the Federal Home Loan Mortgage
Corporation, Government National Mortgage Association, and Federal
National Mortgage Association; and
|
·
|
Subordinated
debentures used to fund the issuance of trust preferred securities in 2004
of $10.3 million with a rate of
3.00%.
|
March
31, 2010
|
December
31, 2009
|
March
31, 2009
|
||||||||||||||||||||||
Balance
|
Weighted
Average Rate
|
Balance
|
Weighted
Average Rate
|
Balance
|
Weighted
Average Rate
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
FHLB
advances
|
$ | 38,000 | 4.92 | % | $ | 63,000 | 4.90 | % | $ | 143,500 | 4.74 | % | ||||||||||||
Reverse
repurchase agreements
|
28,500 | 3.04 | % | 28,500 | 3.04 | % | 28,500 | 2.43 | % | |||||||||||||||
Subordinated
debentures
|
10,310 | 3.00 | % | 10,310 | 3.00 | % | 10,310 | 3.84 | % | |||||||||||||||
Total
borrowings
|
$ | 76,810 | 3.96 | % | $ | 101,810 | 4.19 | % | $ | 182,310 | 4.33 | % | ||||||||||||
Weighted
average cost of
borrowings
during the period
|
4.14 | % | 4.36 | % | 4.13 | % | ||||||||||||||||||
Borrowings
as a percent of total assets
|
10.0 | % | 12.6 | % | 24.7 | % |
·
|
A
$1.0 million loss on the sale of $14.3 million of commercial real estate
loans in 2010, which loss was essentially all derived from the sales of
$6.0 million of delinquent loans, compared with no sales activity in
2009;
|
·
|
A
$326,000 other-than-temporary impairment (“OTTI”) loss taken on private
label securities in 2010, compared to small recovery of loss in 2009;
and
|
·
|
A
$301,000 increase in other real estate owned operations, net, primarily
related to current period write
downs.
|
·
|
Interest
income earned from average interest-earning assets and the resultant
yields; and
|
·
|
Interest
expense incurred from average interest-bearing liabilities and resultant
costs, expressed as rates.
|
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||||||||||
March
31, 2010
|
March
31, 2009
|
|||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
Assets
|
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | 59,761 | $ | 34 | 0.23 | % | $ | 9,390 | $ | 4 | 0.17 | % | ||||||||||||
Federal
funds sold
|
29 | - | 0.00 | % | 5,743 | 4 | 0.28 | % | ||||||||||||||||
Investment
securities
|
133,910 | 995 | 2.97 | % | 71,780 | 779 | 4.34 | % | ||||||||||||||||
Loans
receivable, net (1)
|
555,106 | 9,155 | 6.60 | % | 616,182 | 10,165 | 6.60 | % | ||||||||||||||||
Total
interest-earning assets
|
748,806 | 10,184 | 5.44 | % | 703,095 | 10,952 | 6.23 | % | ||||||||||||||||
Noninterest-earning
assets
|
43,340 | 34,803 | ||||||||||||||||||||||
Total
assets
|
$ | 792,146 | $ | 737,898 | ||||||||||||||||||||
Liabilities
and Equity
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Transaction
accounts
|
$ | 207,533 | $ | 413 | 0.81 | % | $ | 93,340 | $ | 255 | 1.11 | % | ||||||||||||
Retail
certificates of deposit
|
405,128 | 2,150 | 2.15 | % | 367,470 | 3,304 | 3.65 | % | ||||||||||||||||
Wholesale/brokered
certificates of deposit
|
4,352 | 18 | 1.68 | % | 20,210 | 152 | 3.05 | % | ||||||||||||||||
Total
interest-bearing deposits
|
617,013 | 2,581 | 1.70 | % | 481,020 | 3,711 | 3.13 | % | ||||||||||||||||
FHLB
advances and other borrowings
|
82,133 | 868 | 4.29 | % | 182,693 | 1,861 | 4.13 | % | ||||||||||||||||
Subordinated
debentures
|
10,310 | 75 | 2.95 | % | 10,310 | 103 | 4.05 | % | ||||||||||||||||
Total
borrowings
|
92,443 | 943 | 4.14 | % | 193,003 | 1,964 | 4.13 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
709,456 | 3,524 | 2.01 | % | 674,023 | 5,675 | 3.41 | % | ||||||||||||||||
Non-interest-bearing
liabilities
|
8,708 | 6,285 | ||||||||||||||||||||||
Total
liabilities
|
718,164 | 680,308 | ||||||||||||||||||||||
Stockholder
equity
|
73,982 | 57,590 | ||||||||||||||||||||||
Total
liabilities and equity
|
$ | 792,146 | $ | 737,898 | ||||||||||||||||||||
Net
interest income
|
$ | 6,660 | $ | 5,277 | ||||||||||||||||||||
Net
interest rate spread (2)
|
3.43 | % | 2.82 | % | ||||||||||||||||||||
Net
interest margin (3)
|
3.56 | % | 3.00 | % | ||||||||||||||||||||
Ratio
of interest-earning assets to interest-bearing liabilities
|
105.55 | % | 104.31 | % |
(1)
|
Average
balance includes loans held for sale and nonperforming loans and is net of
deferred loan origination fees, unamortized discounts and premiums, and
allowance for loan losses.
|
(2)
|
Represents
the difference between the yield on interest-earning assets and the cost
of interest-bearing liabilities.
|
(3)
|
Represents
net interest income divided by average interest-earning
assets.
|
·
|
Changes
in volume (changes in volume multiplied by prior
rate);
|
·
|
Changes
in interest rates (changes in interest rates multiplied by prior volume);
and
|
·
|
The
net change or the combined impact of volume and rate changes allocated
proportionately to changes in volume and changes in interest
rates.
|
Three
Months Ended March 31, 2010
|
||||||||||||
Compared
to
|
||||||||||||
Three
Months Ended March 31, 2009
|
||||||||||||
Increase
(Decrease) due to
|
||||||||||||
Rate
|
Volume
|
Net
|
||||||||||
(in
thousands)
|
||||||||||||
Interest-earning
assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 1 | $ | 29 | $ | 30 | ||||||
Federal
funds sold
|
(2 | ) | (2 | ) | (4 | ) | ||||||
Investment
securities
|
(303 | ) | 519 | 216 | ||||||||
Loans
receivable, net
|
- | (1,010 | ) | (1,010 | ) | |||||||
Total
interest-earning assets
|
(304 | ) | (464 | ) | (768 | ) | ||||||
Interest-bearing
liabilities
|
||||||||||||
Transaction
accounts
|
(85 | ) | 243 | 158 | ||||||||
Retail
certificates of deposit
|
(1,464 | ) | 310 | (1,154 | ) | |||||||
Wholesale/brokered
certificates of deposit
|
(49 | ) | (85 | ) | (134 | ) | ||||||
FHLB
advances and other borrowings
|
67 | (1,060 | ) | (993 | ) | |||||||
Subordinated
debentures
|
(28 | ) | - | (28 | ) | |||||||
Total
interest-bearing liabilities
|
(1,559 | ) | (592 | ) | (2,151 | ) | ||||||
Change
in net interest income
|
$ | 1,255 | $ | 128 | $ | 1,383 |
·
|
Proceeds
of $28.7 million from the sale and principal payments on loans held for
investment; and
|
·
|
Proceeds
of $24.4 million from the sale of securities available for
sale.
|
·
|
Reduce
borrowings by $25.0 million; and
|
·
|
Purchase
of $32.8 million of securities available for
sale.
|
March
31, 2010
|
||||||||||||||||||||
Less
than
|
1 - 3 | 3 - 5 |
More
than
|
|||||||||||||||||
1
year
|
years
|
years
|
5
years
|
Total
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Contractual
obligations
|
||||||||||||||||||||
FHLB
advances
|
$ | 38,000 | $ | - | $ | - | $ | - | $ | 38,000 | ||||||||||
Other
borrowings
|
- | - | - | 28,500 | 28,500 | |||||||||||||||
Subordinated
debentures
|
- | - | - | 10,310 | 10,310 | |||||||||||||||
Certificates
of deposit
|
277,077 | 117,555 | 4,813 | 728 | 400,173 | |||||||||||||||
Operating
leases
|
635 | 1,257 | 1,192 | 3,310 | 6,394 | |||||||||||||||
Total
contractual cash obligations
|
$ | 315,712 | $ | 118,812 | $ | 6,005 | $ | 42,848 | $ | 483,377 |
March
31, 2010
|
||||||||||||||||||||
Less
than
|
1 - 3 | 3 - 5 |
More
than
|
|||||||||||||||||
1
year
|
years
|
years
|
5
years
|
Total
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Other
unused commitments
|
||||||||||||||||||||
Home
equity lines of credit
|
$ | - | $ | - | $ | - | $ | 475 | $ | 475 | ||||||||||
Commercial
lines of credit
|
5,431 | 1,027 | - | 513 | 6,971 | |||||||||||||||
Other
lines of credit
|
256 | - | - | 196 | 452 | |||||||||||||||
Standby
letters of credit
|
1,000 | - | - | - | 1,000 | |||||||||||||||
Total
commitments
|
$ | 6,687 | $ | 1,027 | $ | - | $ | 1,184 | $ | 8,898 |
|
Exhibit
32
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of
2002
|
|
|
May
12, 2010
|
By:
|
/s/
Steven R. Gardner
|
May
12, 2010
|
/s/
Kent J.
Smith
|
|
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
|