x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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JEFFERSON BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
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Tennessee
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45-0508261
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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120 Evans Avenue, Morristown, Tennessee
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37814
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(Address of principal executive offices)
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(Zip code)
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Large Accelerated Filer o
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Accelerated Filer o
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Non-Accelerated Filer o
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Smaller Reporting Company x
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(Do not check if a smaller reporting company)
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PART I. FINANCIAL INFORMATION | |||
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SIGNATURES |
March 31,
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June 30,
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|||||||
2012
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2011
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|||||||
Assets
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(Unaudited)
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|||||||
Cash and cash equivalents
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$ | 3,956 | $ | 5,327 | ||||
Interest-earning deposits
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34,661 | 35,221 | ||||||
Investment securities classified as available for sale, net
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89,260 | 74,780 | ||||||
Federal Home Loan Bank stock
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4,735 | 4,735 | ||||||
Bank owned life insurance
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6,802 | 6,625 | ||||||
Loans receivable, net of allowance for loan losses of $6,807 and $8,181
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341,524 | 378,587 | ||||||
Loans held-for-sale
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243 | - | ||||||
Premises and equipment, net
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26,501 | 26,617 | ||||||
Foreclosed real estate, net
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7,823 | 9,498 | ||||||
Accrued interest receivable:
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||||||||
Investments
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404 | 311 | ||||||
Loans receivable
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1,279 | 1,521 | ||||||
Deferred tax asset
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11,405 | 9,009 | ||||||
Core deposit intangible
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1,642 | 1,978 | ||||||
Other assets
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3,795 | 6,980 | ||||||
Total Assets
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$ | 534,030 | $ | 561,189 | ||||
Liabilities and Stockholders’ Equity
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||||||||
Deposits
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||||||||
Noninterest-bearing
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$ | 55,247 | $ | 54,340 | ||||
Interest-bearing
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378,575 | 399,922 | ||||||
Repurchase agreements
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890 | 945 | ||||||
Federal Home Loan Bank advances
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37,883 | 37,942 | ||||||
Subordinated debentures
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7,217 | 7,133 | ||||||
Other liabilities
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2,185 | 4,988 | ||||||
Total liabilities
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481,997 | 505,270 | ||||||
Commitments and contingent liabilities
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- | - | ||||||
Stockholders’ equity:
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||||||||
Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares issued or outstanding
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||||||||
Common stock, $.01 par value; 30,000,000 shares authorized; 9,182,372 shares issued and 6,632,039 shares outstanding at March 31, 2012 and 6,634,523 shares outstanding at June 30, 2011
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92 | 92 | ||||||
Additional paid-in capital
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78,657 | 78,895 | ||||||
Unearned ESOP shares
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(2,916 | ) | (3,241 | ) | ||||
Unearned compensation
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(1,046 | ) | (1,019 | ) | ||||
Accumulated other comprehensive income
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811 | 459 | ||||||
Retained earnings
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7,776 | 12,067 | ||||||
Treasury stock, at cost (2,550,333 and 2,547,849 shares)
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(31,341 | ) | (31,334 | ) | ||||
Total stockholders’ equity
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52,033 | 55,919 | ||||||
Total liabilities and stockholders’ equity
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$ | 534,030 | $ | 561,189 |
Three Months Ended
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Nine Months Ended
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|||||||||||||||
March 31,
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March 31,
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|||||||||||||||
2012
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2011
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2012
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2011
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|||||||||||||
Interest income:
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||||||||||||||||
Interest on loans receivable
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$ | 4,758 | $ | 6,049 | $ | 15,595 | $ | 18,443 | ||||||||
Interest on investment securities
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478 | 411 | 1,412 | 1,302 | ||||||||||||
Other interest
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66 | 105 | 190 | 306 | ||||||||||||
Total interest income
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5,302 | 6,565 | 17,197 | 20,051 | ||||||||||||
Interest expense:
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||||||||||||||||
Deposits
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671 | 1,293 | 2,427 | 4,490 | ||||||||||||
Repurchase agreements
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2 | 1 | 5 | 5 | ||||||||||||
Advances from FHLB
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316 | 445 | 956 | 1,788 | ||||||||||||
Subordinated debentures
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84 | 79 | 243 | 241 | ||||||||||||
Total interest expense
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1,073 | 1,818 | 3,631 | 6,524 | ||||||||||||
Net interest income
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4,229 | 4,747 | 13,566 | 13,527 | ||||||||||||
Provision for loan losses
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600 | 1,400 | 9,273 | 2,350 | ||||||||||||
Net interest income after provision for loan losses
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3,629 | 3,347 | 4,293 | 11,177 | ||||||||||||
Noninterest income:
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||||||||||||||||
Mortgage origination fee income
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68 | 66 | 264 | 430 | ||||||||||||
Service charges and fees
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265 | 286 | 841 | 957 | ||||||||||||
Gain on investments
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- | 1,279 | 39 | 2,031 | ||||||||||||
Gain (loss) on sale of fixed assets
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- | - | (19 | ) | - | |||||||||||
Gain (loss) on sale of foreclosed real estate, net
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(61 | ) | (186 | ) | (140 | ) | (591 | ) | ||||||||
BOLI increase in cash value
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58 | 58 | 177 | 177 | ||||||||||||
Other
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178 | 194 | 527 | 527 | ||||||||||||
Total noninterest income
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508 | 1,697 | 1,689 | 3,531 | ||||||||||||
Noninterest expense:
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||||||||||||||||
Compensation and benefits
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1,494 | 1,620 | 4,625 | 5,064 | ||||||||||||
Occupancy expense
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334 | 309 | 1,047 | 1,031 | ||||||||||||
Equipment and data processing expense
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591 | 638 | 1,798 | 1,900 | ||||||||||||
DIF premiums
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203 | 165 | 606 | 490 | ||||||||||||
Advertising
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155 | 62 | 290 | 167 | ||||||||||||
Legal and professional services
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72 | 144 | 383 | 387 | ||||||||||||
Valuation adjustment and expenses on OREO
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273 | 371 | 2,144 | 1,475 | ||||||||||||
Amortization of intangible assets
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106 | 120 | 336 | 377 | ||||||||||||
Loss on early extinguishment of debt
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- | 585 | - | 775 | ||||||||||||
Other
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544 | 621 | 1,658 | 1,709 | ||||||||||||
Total noninterest expense
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3,772 | 4,635 | 12,887 | 13,375 | ||||||||||||
Earnings before income taxes
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365 | 409 | (6,905 | ) | 1,333 | |||||||||||
Income taxes:
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||||||||||||||||
Current
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- | 2 | - | 5 | ||||||||||||
Deferred
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31 | 147 | (2,614 | ) | 450 | |||||||||||
Total income taxes
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31 | 149 | (2,614 | ) | 455 | |||||||||||
Net earnings
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$ | 334 | $ | 260 | $ | (4,291 | ) | $ | 878 | |||||||
Net earnings per share, basic
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$ | 0.05 | $ | 0.04 | $ | (0.69 | ) | $ | 0.14 | |||||||
Net earnings per share, diluted
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$ | 0.05 | $ | 0.04 | $ | (0.69 | ) | $ | 0.14 |
Unallocated
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Accumulated
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|||||||||||||||||||||||||||||||
Additional
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Common
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Other
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Total
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Common
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Paid-in
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Stock in
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Unearned
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Comprehensive
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Retained
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Treasury
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Stockholders’
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Stock
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Capital
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ESOP
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Compensation
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Income
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Earnings
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Stock
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Equity
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Balance at June 30, 2011
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$ | 92 | $ | 78,895 | $ | (3,241 | ) | $ | (1,019 | ) | $ | 459 | $ | 12,067 | $ | (31,334 | ) | $ | 55,919 | |||||||||||||
Comprehensive income:
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Net earnings
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- | - | - | - | - | (4,291 | ) | - | (4,291 | ) | ||||||||||||||||||||||
Change in net unrealized gain (loss) on securities available for sale, net of taxes of $218
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- | - | - | - | 352 | - | - | 352 | ||||||||||||||||||||||||
Total comprehensive income
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- | - | - | - | - | - | - | (3,939 | ) | |||||||||||||||||||||||
Dividends used for ESOP payment
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- | - | - | - | - | - | - | |||||||||||||||||||||||||
Shares committed to be released by the ESOP
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- | (238 | ) | 325 | (27 | ) | - | - | - | 60 | ||||||||||||||||||||||
Purchase of common stock (2,484 shares)
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- | - | - | - | - | - | (7 | ) | (7 | ) | ||||||||||||||||||||||
Balance at March 31, 2012
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$ | 92 | $ | 78,657 | $ | (2,916 | ) | $ | (1,046 | ) | $ | 811 | $ | 7,776 | $ | (31,341 | ) | $ | 52,033 |
Unallocated
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Accumulated
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|||||||||||||||||||||||||||||||
Additional
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Common
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Other
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Total
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|||||||||||||||||||||||||||||
Common
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Paid-in
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Stock in
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Unearned
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Comprehensive
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Retained
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Treasury
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Stockholders’
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|||||||||||||||||||||||||
Stock
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Capital
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ESOP
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Compensation
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Income
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Earnings
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Stock
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Equity
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Balance at June 30, 2010
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$ | 92 | $ | 79,175 | $ | (3,673 | ) | $ | (1,053 | ) | $ | 1,206 | $ | 12,023 | $ | (31,247 | ) | $ | 56,523 | |||||||||||||
Comprehensive income:
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Net earnings
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- | - | - | - | - | 878 | - | 878 | ||||||||||||||||||||||||
Change in net unrealized gain (loss) on securities available for sale, net of taxes of ($1,030)
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- | - | - | - | (1,659 | ) | - | - | (1,659 | ) | ||||||||||||||||||||||
Total comprehensive income
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- | - | - | - | - | - | - | (781 | ) | |||||||||||||||||||||||
Dividends used for ESOP payment
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- | - | - | - | - | 13 | 13 | |||||||||||||||||||||||||
Shares committed to be released by the ESOP
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- | (209 | ) | 324 | - | - | - | - | 115 | |||||||||||||||||||||||
Earned portion of stock grants
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- | - | - | 34 | - | - | - | 34 | ||||||||||||||||||||||||
Purchase of common stock (24,453 shares)
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- | - | - | - | - | - | (86 | ) | (86 | ) | ||||||||||||||||||||||
Balance at March 31, 2011
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$ | 92 | $ | 78,966 | $ | (3,349 | ) | $ | (1,019 | ) | $ | (453 | ) | $ | 12,914 | $ | (31,333 | ) | $ | 55,818 |
Nine Months Ended
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March 31,
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2012
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2011
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Cash flows from operating activities:
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||||||||
Net earnings
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$ | (4,291 | ) | $ | 878 | |||
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities:
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Allocated ESOP shares
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87 | 115 | ||||||
Depreciation and amortization expense
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1,404 | 812 | ||||||
Amortization of premiums (discounts), net on investment securities
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228 | 88 | ||||||
Provision for loan losses
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9,273 | 2,350 | ||||||
Amortization of deferred loan fees, net
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(112 | ) | (209 | ) | ||||
(Gain) loss on sale of investment securities
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(39 | ) | (2,031 | ) | ||||
(Gain) loss on sale of foreclosed real estate, net
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140 | 591 | ||||||
(Gain) loss on sale of fixed assets, net
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19 | - | ||||||
Deferred tax benefit
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(2,614 | ) | 450 | |||||
Originations of mortgage loans held for sale
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(11,391 | ) | (16,708 | ) | ||||
Proceeds from sale of mortgage loans
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11,148 | 17,535 | ||||||
Increase in cash value of life insurance
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(177 | ) | (177 | ) | ||||
Earned portion of MRP
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(27 | ) | 35 | |||||
Decrease (increase) in:
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Accrued interest receivable
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149 | 186 | ||||||
Other assets
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3,185 | (4,432 | ) | |||||
Increase (decrease) in other liabilities and accrued income taxes
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(2,803 | ) | 4,145 | |||||
Net cash provided by (used for) operating activities
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4,179 | 3,628 | ||||||
Cash flows used for investing activities:
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||||||||
Loan originations, net of principal collections
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27,235 | 30,045 | ||||||
Investment securities classifed as available-for-sale:
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- | - | ||||||
Proceeds from maturities, calls and prepayments
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42,132 | 41,899 | ||||||
Proceeds from sale
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501 | 11,778 | ||||||
Purchase of securities
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(56,771 | ) | (45,371 | ) | ||||
Proceeds from sale of premises and equipment
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26 | - | ||||||
Purchase of premises and equipment
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(707 | ) | (183 | ) | ||||
Proceeds from sale of (additions to) foreclosed real estate, net
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1,962 | 3,363 | ||||||
Net cash provided by (used for) investing activities
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14,378 | 41,531 | ||||||
Cash flows from financing activities:
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||||||||
Net decrease in deposits
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(20,407 | ) | (9,907 | ) | ||||
Net increase (decrease) in repurchase agreements
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(55 | ) | 48 | |||||
Proceeds from advances from FHLB
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- | 309 | ||||||
Repayment of FHLB advances
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(19 | ) | (46,625 | ) | ||||
Purchase of treasury stock
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(7 | ) | (86 | ) | ||||
Dividends paid
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- | - | ||||||
Net cash provided by (used for) financing activities
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(20,488 | ) | (56,261 | ) | ||||
Net increase (decrease) in cash, cash equivalents and interest-earning deposits
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(1,931 | ) | (11,102 | ) | ||||
Cash, cash equivalents and interest-earning deposits at beginning of period
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40,548 | 69,303 | ||||||
Cash, cash equivalents and interest-earning deposits at end of period
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$ | 38,617 | $ | 58,201 | ||||
Supplemental disclosures of cash flow information:
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Cash paid during period for:
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Interest on deposits
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$ | 2,361 | $ | 4,470 | ||||
Interest on borrowed funds
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$ | 786 | $ | 1,788 | ||||
Interest on subordinated debentures
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$ | 159 | $ | 162 | ||||
Income taxes
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- | $ | 50 | |||||
Real estate acquired in settlement of loans
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$ | 2,495 | $ | 11,897 |
(1)
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Basis of Presentation
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The condensed consolidated financial statements include the accounts of Jefferson Bancshares, Inc. (the “Company” or “Jefferson Bancshares”) and its wholly-owned subsidiary, Jefferson Federal Bank (the “Bank” or “Jefferson Federal”). The accompanying interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. The results of operations for the nine months ended March 31, 2012 are not necessarily indicative of the results which may be expected for the entire fiscal year or any other period. These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2011, which was filed with the Securities and Exchange Commission on September 27, 2011. All dollar amounts, other than per-share amounts, are in thousands unless otherwise noted.
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(2)
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Principles of Consolidation
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The consolidated financial statements include the accounts of Jefferson Bancshares, Inc. and its wholly-owned subsidiary, Jefferson Federal Bank. All significant intercompany balances and transactions have been eliminated in consolidation.
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(3)
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Use of Estimates
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In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the statement of condition dates and revenues and expenses for the periods shown. Actual results could differ from the estimates and assumptions used in the consolidated financial statements. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of foreclosed real estate and deferred tax assets.
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(4)
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Limitation on Capital Distributions
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Jefferson Federal may not pay dividends on its capital stock if its regulatory capital would thereby be reduced below the amount then required for the liquidation account established for the benefit of certain depositors of Jefferson Federal at the time of its conversion to stock form.
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Under applicable regulations, Jefferson Federal is prohibited from making any capital distributions if, after making the distribution, the Bank would have: (i) total risk-based capital ratio of less than 8.0%; (ii) Tier 1 risk-based capital ratio of less than 4.0%; or (iii) a leverage ratio of less than 4.0%.
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Under the banking laws of the State of Tennessee, a Tennessee chartered savings bank may not declare dividends in any calendar year in which the dividend would exceed the total of its net income for that year, combined with its retained net income for the preceding two years, without the prior approval of the Commissioner of the Tennessee Department of Financial Institutions.
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(5)
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Earnings Per Common Share
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Earnings per common share and diluted earnings per common share have been computed on the basis of dividing net earnings by the weighted-average number of shares of common stock outstanding, exclusive of unallocated employee stock ownership plan (“ESOP”) shares. Diluted earnings per common share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate to outstanding stock options and are determined using the treasury stock method. For the three and nine months ended March 31, 2012, stock options to purchase 340,638 shares were not included in the computation of diluted net income per share as their effect would have been anti-dilutive. The following table illustrates the number of weighted-average shares of common stock used in each corresponding earnings per common share calculation:
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Weighted-Average Shares
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Weighted-Average Shares
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|||||||||||||||
Outstanding for the
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Outstanding for the
|
|||||||||||||||
Three Months Ended
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Nine Months Ended
|
|||||||||||||||
March 31,
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March 31,
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2012
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2011
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2012
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2011
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|||||||||||||
Weighted average number of common shares used in computing basic earnings per common share
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6,261,939 | 6,231,452 | 6,237,203 | 6,211,295 | ||||||||||||
Effect of dilutive stock options
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- | - | - | - | ||||||||||||
Weighted average number of common shares and dilutive potential common shares used in computing earnings per common share assuming dilution
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6,261,939 | 6,231,452 | 6,237,203 | 6,211,295 |
(6)
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Accounting for Allowance for Loan Losses and Impairment of a Loan
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The allowance for loan and lease losses is an estimate of the losses that are inherent in the loan and lease portfolio. The allowance is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The Bank’s charge-off policy is consistent with bank regulatory standards. Generally, loans are charged off when the loan becomes over 120 days delinquent. Real estate acquired as a result of foreclosure is initially recorded at the lower of the amount of the loan or the fair value, less estimated selling costs. Any writedown to fair value is charged to the allowance for loan and lease losses. Any subsequent writedown of foreclosed real estate is charged against earnings.
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The allowance consists of specific and general components. The specific component relates to loans that are classified as doubtful, substandard or special mention. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors.
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In connection with assessing the allowance, we have established a systematic methodology for determining the adequacy of the allowance for loan losses. Loans are grouped into pools based on loan type and include residential mortgage loans, multi-family loans, construction and land development loans, non-residential real estate loans (owner occupied and non-owner occupied), commercial loans, HELOC and junior lien, and consumer loans. Commercial business loans and loans secured by commercial real estate are generally larger and involve a greater degree of risk than residential mortgage loans. In addition, loans secured by commercial real estate are more likely to be negatively impacted by adverse conditions in the real estate market or the economy. Management utilizes a loan grading system and assigns a loan grade of “Pass”, “Watch”, “Special Mention”, “Substandard”, “Doubtful” or “Loss” based on risk characteristics of loans. Lending staff reviews the loan grades of customers on a regular basis and makes changes as needed given that the creditworthiness of customers may change over time.
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Descriptions of loan grades are as follows:
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Pass - loans in this category represent an acceptable risk and do not require heightened levels of monitoring by lending staff.
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Watch - loans in this category represent an acceptable risk; however, require monitoring by lending staff due to potential weakness for any number of reasons.
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Special Mention - loans in this category have potential weaknesses that may result in deteriorating prospects for the asset or in the Bank’s credit position at some future date.
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Substandard - loans in this category are inadequately protected by the sound worth and paying capacity of the borrower or the collateral pledged. Borrowers in this category have a well-defined weakness(es) that jeopardize the proper liquidation of the debt.
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Doubtful - loans classified as doubtful have a clear and defined weakness making the ultimate repayment of the loan, or portions thereof, highly improbable.
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Loss - loans classified as “loss” are those of such little value that their continuance as bank assets is not warranted, even though partial recovery may be affected in the future. Charge off is required in the month this grade is assigned.
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Specific valuation allowances are established for impaired loans. The Company considers a loan to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement on a timely basis. A specific reserve represents the difference between the recorded value of the loan and either its estimated fair value less estimated disposition costs, or the net present value as determined by a discounted cash flow analysis. On a quarterly basis, management evaluates individual loans and lending relationships which have outstanding principal balances of $500,000 or more and which are classified as either substandard, doubtful or loss according to the loan grading policy for impairment. Troubled debt restructurings (“TDRs”) are also considered to be impaired, except for those that have been performing under the new terms for at least six consecutive months.
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A TDR occurs when the Bank grants a concession to a borrower with financial difficulties that it would not otherwise consider. The Bank has adopted the guidance and definitions found in ASU 2011-02 in determining if a borrower is experiencing financial difficulties and if a concession has been granted. The majority of the Bank’s TDRs involve a modification involving changes in amortization terms, reductions in interest rates, interest only payments and, in limited cases, concessions to outstanding loan balances. A TDR may be non-accruing or it may accrue interest. A nonaccrual TDR will be returned to accruing status at such time when the borrower successfully performs under the new terms for at least six consecutive months. The Bank’s TDRs totaled $11.3 million at March 31, 2012 compared to $15.8 million at June 30, 2011.
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The following table presents the Bank’s loans classified as TDRs by loan type and accrual status as of March 31, 2012:
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March 31, 2012
|
||||||||||||
Accrual
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Non-accrual
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Total
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||||||||||
Status
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Status
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TDRs
|
||||||||||
Residential Mortgage
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$ | 904 | $ | 523 | $ | 1,427 | ||||||
Multi-family
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632 | 5,284 | 5,916 | |||||||||
Construction and land development
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153 | 33 | 186 | |||||||||
Non-residential real estate
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- | 2,000 | 2,000 | |||||||||
Owner occupied
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- | 402 | 402 | |||||||||
Commercial
|
836 | 338 | 1,174 | |||||||||
HELOC and Junior Lien
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172 | - | 172 | |||||||||
Total
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$ | 2,697 | $ | 8,580 | $ | 11,277 |
The following table presents newly restructured loans with concessions related to loan balances that occurred during the three- and nine-month periods ended March 31, 2012:
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Nine Months Ended March 31, 2012
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||||||||||||
Pre-Modification
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Post-Modification
|
|||||||||||
Outstanding
|
Outstanding
|
|||||||||||
Number of
|
Recorded
|
Recorded
|
||||||||||
Loans
|
Investment
|
Investment
|
||||||||||
Multi-family
|
2 | $ | 7,775 | $ | 5,284 | |||||||
Non-residential real estate
|
1 | 3,025 | 2,000 | |||||||||
Total
|
3 | $ | 10,800 | $ | 7,284 |
The accrual of interest on all loans is discontinued at the time the loan is 90 days delinquent. All interest accrued but not collected for loans considered impaired, placed on non-accrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash basis or cost-recovery method until the loan is returned to accrual status. Loans are returned to accrual status when future payments are reasonably assured. Payments received on non-accrual loans are applied to the remaining principal balance of the loans.
|
|
The evaluation of the allowance for loan and lease losses is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The Company is subject to periodic examination by regulatory agencies, which may require the Company to record increases in the allowances based on the regulator’s evaluation of available information. There can be no assurance that the Company’s regulators will not require further increases to the allowances.
|
The following table summarizes the activity in the allowance for loan losses for the nine months ended March 31, 2012:
|
Residential Mortgage
|
Multi-family
|
Construction and land development
|
Non-residential real estate
|
Owner occupied
|
Commercial
|
HELOC and junior Lien
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||||||
Balance at June 30, 2011
|
$ | 1,543 | $ | 1,858 | $ | 803 | $ | 1,934 | $ | 803 | $ | 1,197 | $ | - | $ | 43 | $ | 8,181 | ||||||||||||||||||
Charge Offs
|
(261 | ) | (2,491 | ) | (147 | ) | (1,102 | ) | (220 | ) | (6,617 | ) | (53 | ) | (13 | ) | (10,904 | ) | ||||||||||||||||||
Recoveries
|
5 | - | - | - | - | 230 | 3 | 19 | 257 | |||||||||||||||||||||||||||
Provision
|
(755 | ) | 1,182 | (118 | ) | 228 | (305 | ) | 8,842 | 225 | (26 | ) | 9,273 | |||||||||||||||||||||||
Balance at March 31, 2012
|
$ | 532 | $ | 549 | $ | 538 | $ | 1,060 | $ | 278 | $ | 3,652 | $ | 175 | $ | 23 | $ | 6,807 | ||||||||||||||||||
Ending balance, Individually Evaluated
|
$ | 114 | $ | 139 | $ | 294 | $ | 753 | $ | 8 | $ | 2,358 | $ | 66 | $ | - | $ | 3,732 | ||||||||||||||||||
Ending balance, Collectively Evaluated
|
$ | 418 | $ | 410 | $ | 244 | $ | 307 | $ | 270 | $ | 1,294 | $ | 109 | $ | 23 | $ | 3,075 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||||||
Balance at March 31, 2012
|
$ | 101,968 | $ | 10,836 | $ | 31,327 | $ | 50,419 | $ | 75,405 | $ | 53,511 | $ | 20,191 | $ | 4,909 | $ | 348,566 | ||||||||||||||||||
Ending balance, Individually Evaluated
|
$ | 593 | $ | 632 | $ | 1,042 | $ | 5,282 | $ | 393 | $ | 5,378 | $ | 172 | $ | - | $ | 13,492 | ||||||||||||||||||
Ending balance, Collectively Evaluated
|
$ | 101,375 | $ | 10,204 | $ | 30,285 | $ | 45,137 | $ | 75,012 | $ | 48,133 | $ | 20,019 | $ | 4,909 | $ | 335,074 |
The following table is an aging analysis of the loan portfolio at March 31, 2012:
|
30-59 days past due
|
60-89 days past due
|
Greater than 90 days
|
Total past due
|
Total Current
|
Total loans receivable
|
|||||||||||||||||||
Residential Mortgage
|
$ | 2,609 | $ | - | $ | 5,597 | $ | 8,206 | $ | 93,762 | $ | 101,968 | ||||||||||||
Multi-family
|
- | - | 5,284 | 5,284 | 5,552 | 10,836 | ||||||||||||||||||
Construction/land development
|
341 | 1,396 | 976 | 2,713 | 28,614 | 31,327 | ||||||||||||||||||
Non-residential real estate
|
1,790 | - | 2,915 | 4,705 | 45,714 | 50,419 | ||||||||||||||||||
Owner occupied
|
242 | - | 1,875 | 2,117 | 73,288 | 75,405 | ||||||||||||||||||
Commercial
|
111 | 1,234 | 1,579 | 2,924 | 50,587 | 53,511 | ||||||||||||||||||
HELOC and Junior Lien
|
2 | - | 204 | 206 | 19,985 | 20,191 | ||||||||||||||||||
Consumer
|
37 | 3 | 38 | 78 | 4,831 | 4,909 | ||||||||||||||||||
Total
|
$ | 5,132 | $ | 2,633 | $ | 18,468 | $ | 26,233 | $ | 322,333 | $ | 348,566 |
The following table summarizes the credit risk profile by internally assigned grade at March 31, 2012:
|
Residential Mortgage
|
Multi-family
|
Construction and land development
|
Non-residential real estate
|
Owner occupied
|
Commercial
|
HELOC and Junior Lien
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
Grade:
|
||||||||||||||||||||||||||||||||||||
Pass
|
$ | 89,997 | $ | 4,821 | $ | 26,358 | $ | 28,731 | $ | 66,679 | $ | 46,657 | $ | 18,312 | $ | 4,443 | $ | 285,998 | ||||||||||||||||||
Watch
|
2,984 | - | 1,976 | 15,563 | 6,527 | 1,450 | 622 | 420 | 29,542 | |||||||||||||||||||||||||||
Special mention
|
- | - | - | 1,256 | - | - | - | - | 1,256 | |||||||||||||||||||||||||||
Substandard
|
8,987 | 6,015 | 2,993 | 4,869 | 2,199 | 5,404 | 1,257 | 46 | 31,770 | |||||||||||||||||||||||||||
Doubtful
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Loss
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total:
|
$ | 101,968 | $ | 10,836 | $ | 31,327 | $ | 50,419 | $ | 75,405 | $ | 53,511 | $ | 20,191 | $ | 4,909 | $ | 348,566 |
The following table summarizes the composition of impaired loans, the associated specific reserves, and interest income recognized on impaired loans at March 31, 2012:
|
Recorded investment
|
Unpaid principal balance
|
Specific allowance
|
Interest income recognized
|
|||||||||||||
With an allowance recorded:
|
||||||||||||||||
Residential Mortgage
|
$ | 593 | $ | 593 | $ | 114 | $ | 19 | ||||||||
Multi-family
|
632 | 632 | 139 | 34 | ||||||||||||
Construction and land development
|
1,042 | 1,042 | 294 | 68 | ||||||||||||
Non-residential real estate
|
5,282 | 5,282 | 753 | 131 | ||||||||||||
Owner occupied
|
393 | 393 | 8 | 27 | ||||||||||||
Commercial
|
5,378 | 5,378 | 2,358 | 192 | ||||||||||||
HELOC and Junior Lien
|
172 | 172 | 66 | - | ||||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Total
|
$ | 13,492 | $ | 13,492 | $ | 3,732 | $ | 471 | ||||||||
With no related allowance:
|
||||||||||||||||
Residential Mortgage
|
$ | 3,021 | $ | 3,021 | $ | - | $ | 133 | ||||||||
Multi-family
|
5,284 | 5,284 | - | 98 | ||||||||||||
Construction and land development
|
1,688 | 1,688 | - | 48 | ||||||||||||
Non-residential real estate
|
3,098 | 3,098 | - | 132 | ||||||||||||
Owner occupied
|
947 | 947 | - | 78 | ||||||||||||
Commercial
|
396 | 396 | - | 31 | ||||||||||||
HELOC and Junior Lien
|
703 | 703 | - | 15 | ||||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Total
|
$ | 15,137 | $ | 15,137 | $ | - | $ | 535 | ||||||||
Total:
|
||||||||||||||||
Residential Mortgage
|
$ | 3,614 | $ | 3,614 | $ | 114 | $ | 152 | ||||||||
Multi-family
|
5,916 | 5,916 | 139 | 132 | ||||||||||||
Construction and land development
|
2,730 | 2,730 | 294 | 116 | ||||||||||||
Non-residential real estate
|
8,380 | 8,380 | 753 | 263 | ||||||||||||
Owner occupied
|
1,340 | 1,340 | 8 | 105 | ||||||||||||
Commercial
|
5,774 | 5,774 | 2,358 | 223 | ||||||||||||
HELOC and Jr Lien
|
875 | 875 | 66 | 15 | ||||||||||||
Consumer
|
- | - | - | - | ||||||||||||
Total
|
$ | 28,629 | $ | 28,629 | $ | 3,732 | $ | 1,006 | ||||||||
Average impaired loans for the nine months ended March 31, 2012 | $ | 31,917 |
(7)
|
Financial Instruments With Off-Balance Sheet Risk
|
Jefferson Bancshares is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments generally include commitments to originate mortgage loans. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Company’s maximum exposure to credit loss in the event of nonperformance by the borrower is represented by the contractual amount and related accrued interest receivable of those instruments. The Company minimizes this risk by evaluating each borrower’s creditworthiness on a case-by-case basis. Collateral held by the Company consists of a first or second mortgage on the borrower’s property. The amount of collateral obtained is based upon an appraisal of the property.
|
At March 31, 2012, we had approximately $7.4 million in commitments to extend credit, consisting of commitments to fund real estate loans. In addition to commitments to originate loans, we had $4.5 million in unused letters of credit and approximately $29.9 million in unused lines of credit.
|
|
(8)
|
Dividends
|
On February 2, 2011, the Company announced that the Board of Directors had voted to suspend the payment of the quarterly cash dividend on the Company’s common stock in an effort to conserve capital.
|
|
(9)
|
Stock Incentive Plans
|
The Company maintains stock-based benefit plans under which certain employees and directors are eligible to receive stock grants or options. Under the 2004 Stock-Based Benefit Plan, a maximum of 279,500 shares may be granted as restricted stock and a maximum of 698,750 shares may be issued through the exercise of nonstatutory or incentive stock options. The exercise price of each option equals the market price of the Company’s stock on the date of grant and an option’s maximum term is ten years.
|
|
The table below summarizes the status of the Company’s stock option plans as of March 31, 2012.
|
Three Months Ended
|
||||||||
March 31, 2012
|
||||||||
Weighted-
|
||||||||
average
|
||||||||
Shares
|
exercise price
|
|||||||
Outstanding at beginning of period
|
340,638 | $ | 3.69 | |||||
Granted during the three-month period
|
- | - | ||||||
Options forfeited
|
- | - | ||||||
Options exercised
|
- | - | ||||||
Outstanding at March 31, 2012
|
340,638 | $ | 3.69 | |||||
Options exercisable at March 31, 2012
|
340,638 | $ | 3.69 |
The following information applies to options outstanding at March 31, 2012: |
Number outstanding
|
340,638 | |||
Range of exercise prices
|
$ | 13.69 | ||
Weighted-average exercise price
|
$ | 13.69 | ||
Weighted-average remaining contractual life
|
1.83 | |||
Number of options remaining for future issuance
|
358,112 |
The estimated fair value of stock options at grant date was determined using the Black-Scholes option-pricing model based on market data as of January 29, 2004. An expected dividend yield of 1.17% and expected volatility of 7.01% were used to model the value. The risk free rate of return equaled 4.22%, which was based on the yield of a U.S. Treasury note with a term of ten years. The estimated time remaining before the expiration of the options equaled ten years.
|
(10)
|
Investment Securities
|
Investment securities are summarized as follows:
|
At March 31, 2012
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Securities available-for-sale
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
Federal agency
|
$ | 24,217 | $ | 242 | $ | (160 | ) | $ | 24,299 | |||||||
Mortgage-backed
|
58,683 | 1,534 | (247 | ) | $ | 59,970 | ||||||||||
Municipals
|
4,436 | 276 | - | 4,712 | ||||||||||||
Other Securities
|
609 | - | (330 | ) | 279 | |||||||||||
Total securities available-for-sale
|
$ | 87,945 | $ | 2,052 | $ | (737 | ) | $ | 89,260 | |||||||
Weighted-average rate
|
2.32 | % | ||||||||||||||
Pledged at March 31, 2012
|
$ | 13,186 |
At June 30, 2011
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Securities available-for-sale
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
Federal agency
|
$ | 43,721 | $ | 228 | $ | - | $ | 43,949 | ||||||||
Mortgage-backed
|
24,551 | 861 | (56 | ) | 25,356 | |||||||||||
Municipals
|
5,150 | 112 | (25 | ) | 5,237 | |||||||||||
Other Securities
|
613 | - | (375 | ) | 238 | |||||||||||
Total securities available-for-sale
|
$ | 74,035 | $ | 1,201 | $ | (456 | ) | $ | 74,780 | |||||||
Weighted-average rate
|
2.35 | % | ||||||||||||||
Pledged at June 30, 2011
|
$ | 19,389 |
Securities with unrealized losses not recognized in income are as follows: |
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
March 31, 2012
|
||||||||||||||||||||||||
Federal agency securities
|
$ | 7,837 | $ | (160 | ) | $ | - | $ | - | $ | 7,837 | $ | (160 | ) | ||||||||||
Mortgage-backed securities
|
8,607 | (141 | ) | 629 | (106 | ) | 9,236 | (247 | ) | |||||||||||||||
Municipal securities
|
- | - | - | - | - | - | ||||||||||||||||||
Other securities
|
- | - | 279 | (330 | ) | 279 | (330 | ) | ||||||||||||||||
$ | 16,444 | $ | (301 | ) | $ | 908 | $ | (436 | ) | $ | 17,352 | $ | (737 | ) |
The Company evaluates its securities with significant declines in fair value on a quarterly basis to determine whether they should be considered temporarily or other than temporarily impaired. The Company has recognized all of the unrealized losses reflected in the foregoing table in other comprehensive income. The Company neither has the intent to sell nor is forecasting the need or requirement to sell the securities before their anticipated recovery.
|
|
Federal Agency Securities – The unrealized losses of $160,000 for these six federal agency securities were caused by changes in market interest rates. The contractual cash flows of these investments are guaranteed by an agency of the U.S. Government. Because the decline in market value is attributable to changes in market interest rates and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost bases and it is not more likely than not the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2012.
|
|
GSE Residential Mortgage-Backed Securities – The unrealized losses of $141,000 for these five GSE mortgage-backed securities was caused by changes in market interest rates. The contractual cash flows of these investments are guaranteed by an agency of the U.S. Government. Accordingly it is expected that the securities would not be settled at a price less than the amortized bases of the Company’s investments. Because the decline in market value is attributable to changes in market interest rates and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost bases and it is not more likely than not the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2012.
|
|
Private-Label Residential Mortgage-Backed Securities - The unrealized losses of $106,000 for this private-label mortgage-backed security is primarily driven by higher projected collateral losses, wider credit spreads and changes in interest rates as indicated by the annual independent valuation of the investment. The valuation methodology used is a future cash flow analysis which is built upon a model based on collateral-specific assumptions as they relate to the underlying loans. Given the expected improvement in the future performances of the expected cash flow, the unrealized losses are not deemed to be attributable to credit quality. Accordingly it is expected that the security would not be settled at a price less than the amortized bases of the Company’s investment. Because the decline in market value is attributable to higher projected collateral losses, wider credit spreads and changes in interest rates and not credit quality, the Company expects to recover the entire amortized cost bases of this security.
|
Other Securities – The unrealized loss of $330,000 on this CDO was a result of updated variables and inputs that comprise the model used in the annual independent valuation of this security. The collateral for the CDO investment is comprised of trust preferred securities and senior and subordinated debt issued by banks, insurance companies, REIT’s, real estate operating companies and homebuilding companies. The CDO security is valued using three different scenarios as a predictor of future collateral performance and the fair market value determined accordingly. Given the expected improvement in the future performance of the collateral, the unrealized loss is not deemed to be attributable to credit quality. Since the Company does not intend to sell this investment before recovery of its amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2012.
|
|
Maturities of debt securities at March 31, 2012, are summarized as follows:
|
Weighted
|
||||||||||||
Amortized
|
Fair
|
Average
|
||||||||||
Cost
|
Value
|
Yield
|
||||||||||
Within 1 year
|
$ | 391 | $ | 392 | 2.50 | % | ||||||
Over 1 year through 5 years
|
12,795 | 12,979 | 1.67 | % | ||||||||
After 5 years through 10 years
|
14,070 | 14,308 | 2.71 | % | ||||||||
Over 10 years
|
60,689 | 61,581 | 3.12 | % | ||||||||
$ | 87,945 | $ | 89,260 | 2.32 | % |
(11)
|
Fair Value Disclosures
|
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. When measuring fair value, the Company uses valuation techniques that are appropriate and consistently applied. A hierarchy is also established under the standard and is used to prioritize valuation inputs into the following three levels used to measure fair value:
|
|
Level 1
|
|
Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain U.S. Treasury, other U.S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets.
|
|
Level 2
|
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency mortgage-backed debt securities, corporate debt securities, derivative contracts and residential mortgage loans held-for-sale.
|
Level 3
|
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly structured or long-term derivative contracts.
|
|
The following is a description of valuation methodologies used for assets recorded at fair value.
|
|
Investment Securities Available for Sale
|
|
Level 2 investment securities classified as “available-for-sale” are recorded at fair value on a recurring basis. Fair value measurements are based upon independent pricing models or other model-based valuation techniques with inputs that are observable in the market or that can be derived principally from or corroborated by observable market data. Level 2 securities include mortgage-backed securities issued by government-sponsored entities, municipal bonds, bonds issued by government agencies, and corporate debt securities. Level 3 investment securities classified as “available-for-sale” are recorded at fair value on at least a semi-annual basis. Fair value measurements are based upon independent pricing models based upon unobservable inputs which require significant management judgment or estimation. Level 3 includes certain mortgage-backed securities and other debt securities.
|
|
Impaired Loans
|
|
The Company records loans at fair value on a non-recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows.
|
|
Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At March 31, 2012, substantially all of the total impaired loans were evaluated based on either the fair value of the collateral or its liquidation value. Impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the impaired loan as nonrecurring Level 3.
|
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
|
|
Below is a table that presents information about certain assets and liabilities measured at fair value:
|
March 31, 2012
|
||||||||||||||
Total Carrying | ||||||||||||||
Amount in | ||||||||||||||
Statement of | Assets/Liabilities | |||||||||||||
Financial | Measured at | |||||||||||||
Description
|
Level 1
|
Level 2 | Level 3 | Condition | Fair Value | |||||||||
Securities available for sale
|
-
|
$ |
86,244
|
$ |
3,016
|
$ |
89,260
|
$ |
89,260
|
Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis
|
|
The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. Assets measured at fair value on a nonrecurring basis are included in the table below.
|
March 31, 2012
|
|||||||||||||
Total Carrying | |||||||||||||
Amount in | |||||||||||||
Statement of | Assets/Liabilities | ||||||||||||
Financial | Measured at | ||||||||||||
Description
|
Level 1
|
Level 2
|
Level 3 | Condition | Fair Value | ||||||||
Impaired Loans
|
-
|
-
|
$ |
24,897
|
$ |
24,897
|
$ |
24,897
|
The carrying value and estimated fair value of the Company’s financial instruments are as follows:
|
March 31, 2012
|
June 30, 2011
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash and due from banks and interest-earning deposits with banks
|
$ | 38,617 | $ | 38,617 | $ | 40,548 | $ | 40,548 | ||||||||
Available-for-sale securities
|
89,260 | 89,260 | 74,780 | 74,780 | ||||||||||||
Federal Home Loan Bank stock
|
4,735 | 4,735 | 4,735 | 4,735 | ||||||||||||
Loans receivable, net
|
341,524 | 348,309 | 378,587 | 379,787 | ||||||||||||
Accrued interest receivable
|
1,683 | 1,683 | 1,832 | 1,832 | ||||||||||||
Loans held-for-sale
|
243 | 243 | - | - | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
(433,822 | ) | (426,261 | ) | (454,262 | ) | (446,115 | ) | ||||||||
Borrowed funds
|
(38,773 | ) | (40,684 | ) | (38,887 | ) | (40,718 | ) | ||||||||
Subordinated debentures
|
(7,217 | ) | (4,500 | ) | (7,133 | ) | (6,277 | ) | ||||||||
Off-balance sheet assets (liabilities):
|
||||||||||||||||
Commitments to extend credit
|
- | 7,394 | - | 11,932 | ||||||||||||
Unused letters of credit
|
- | 4,453 | - | 4,809 | ||||||||||||
Unused lines of credit
|
- | 29,934 | - | 34,362 |
(12)
|
Subordinated Debt
|
As part of the State of Franklin acquisition, the Company acquired State of Franklin Statutory Trust II (the “Trust”) and assumed the Trust’s obligation with respect to certain capital securities described below. On December 13, 2006, State of Franklin issued $10.3 million of junior subordinated debentures to the Trust, a Delaware business trust wholly owned by State of Franklin. The Trust (a) sold $10.0 million of capital securities through its underwriters to institutional investors and upstreamed the proceeds to State of Franklin and (b) issued $310,000 of common securities to State of Franklin. The sole assets of the Trust are the $10.3 million of junior subordinated debentures issued by State of Franklin. The securities are redeemable at par after January 30, 2012, and have a final maturity of January 30, 2037. The interest is payable quarterly at a floating rate equal to 3-month LIBOR plus 1.7%.
|
|
On January 11, 2012, the Company notified the Trustee for the Trust that, beginning with the January 30, 2012 interest payment period, the Company has elected to defer all payments of interest on the Company’s junior subordinated debentures for an indefinite period of time (but no longer than 20 consecutive quarterly periods). Under the terms of the indenture, the Company is prohibited from paying dividends on its common stock during the period that interest is deferred on the debentures.
|
|
(13)
|
Subsequent Events
|
The company has evaluated subsequent events for potential recognition and disclosure for the three months ended March 31, 2012. No items were identified during this evaluation that required adjustment to or disclosure in the accompanying financial statements.
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2012
|
2011
|
|||||||
(Dollars in thousands,
|
||||||||
except per share data)
|
||||||||
Net earnings
|
$ | 334 | $ | 260 | ||||
Net earnings per share, basic
|
$ | 0.05 | $ | 0.04 | ||||
Net earnings per share, diluted
|
$ | 0.05 | $ | 0.04 | ||||
Return on average assets (annualized)
|
0.25 | % | 0.17 | % | ||||
Return on average equity (annualized)
|
2.56 | % | 1.83 | % |
Three Months
|
|||||||||||||||
Ended
|
|||||||||||||||
March 31,
|
|||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
||||||||||||
(Dollars in thousands)
|
|||||||||||||||
Interest income:
|
|||||||||||||||
Loans
|
$ | 4,758 | $ | 6,049 | $ | (1,291 | ) | (21.3 | %) | ||||||
Investment securities
|
478 | 411 | 67 | 16.3 | % | ||||||||||
Interest-earning deposits
|
54 | 51 | 3 | 5.9 | % | ||||||||||
FHLB stock
|
12 | 54 | (42 | ) | (77.8 | %) | |||||||||
Total interest income
|
5,302 | 6,565 | (1,263 | ) | (19.2 | %) | |||||||||
Interest expense:
|
|||||||||||||||
Deposits
|
671 | 1,293 | (622 | ) | (48.1 | %) | |||||||||
Repurchase Agreements
|
2 | 1 | 1 | 100.0 | % | ||||||||||
Borrowings
|
316 | 445 | (129 | ) | (29.0 | %) | |||||||||
Subordinated Notes & Debentures
|
84 | 79 | 5 | 6.3 | % | ||||||||||
Total interest expense
|
1,073 | 1,818 | (745 | ) | (41.0 | %) | |||||||||
Net interest income
|
$ | 4,229 | $ | 4,747 | $ | (518 | ) | (10.9 | %) |
Three Months Ended March 31,
|
||||||||||||||
2012
|
2011
|
|||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||
Balance
|
Cost
|
Balance
|
Cost
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||
Loans
|
$ | 358,261 | 5.34 | % | $ | 410,128 | 5.98 | % | ||||||
Investment securities
|
83,698 | 2.38 | % | 52,101 | 3.37 | % | ||||||||
Interest-earning deposits
|
28,202 | 0.17 | % | 72,591 | 0.28 | % | ||||||||
FHLB stock
|
4,735 | 4.59 | % | 4,735 | 4.63 | % | ||||||||
Deposits
|
380,949 | 0.71 | % | 426,378 | 1.23 | % | ||||||||
FHLB advances
|
37,895 | 3.35 | % | 51,757 | 3.49 | % | ||||||||
Repurchase agreements
|
858 | 0.94 | % | 836 | 0.49 | % | ||||||||
Subordinated debentures
|
7,200 | 4.69 | % | 7,087 | 4.52 | % |
Three Months
|
||||||||||||
Ended March 31,
|
||||||||||||
2012 Compared to 2011
|
||||||||||||
Increase (Decrease)
|
||||||||||||
Due To
|
||||||||||||
Volume
|
Rate
|
Net
|
||||||||||
(In thousands)
|
||||||||||||
Interest income:
|
||||||||||||
Loans receivable
|
$ | (722 | ) | $ | (569 | ) | $ | (1,291 | ) | |||
Investment securities
|
53 | 14 | 67 | |||||||||
Daily interest-earning deposits and other interest-earning assets
|
(24 | ) | (15 | ) | (39 | ) | ||||||
Total interest-earning assets
|
(693 | ) | (570 | ) | (1,263 | ) | ||||||
Interest expense:
|
||||||||||||
Deposits
|
(126 | ) | (496 | ) | (622 | ) | ||||||
FHLB advances
|
(116 | ) | (13 | ) | (129 | ) | ||||||
Repurchase agreements
|
- | 1 | 1 | |||||||||
Subordinatd debentures
|
1 | 4 | 5 | |||||||||
Total interest-bearing liabilities
|
(241 | ) | (504 | ) | (745 | ) | ||||||
Net change in interest income
|
$ | (452 | ) | $ | (66 | ) | $ | (518 | ) |
Three Months Ended
|
||||||||||||||||
March 31,
|
$ | % | ||||||||||||||
2012
|
2011
|
Change
|
Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest income:
|
||||||||||||||||
Mortgage origination fee income
|
$ | 68 | $ | 66 | $ | 2 | 3.0 | % | ||||||||
Service charges and fees
|
265 | 286 | (21 | ) | (7.3 | %) | ||||||||||
(Loss) gain on investment securities
|
- | 1,279 | (1,279 | ) | (100.0 | %) | ||||||||||
Gain (loss) on sale of foreclosed real estate, net
|
(61 | ) | (186 | ) | 125 | (67.2 | %) | |||||||||
BOLI increase in cash value
|
58 | 58 | - | 0.0 | % | |||||||||||
Other
|
178 | 194 | (16 | ) | (8.2 | %) | ||||||||||
Total noninterest income
|
$ | 508 | $ | 1,697 | $ | (1,189 | ) | (70.1 | %) |
Three Months Ended
|
||||||||||||||||
March 31,
|
$ | % | ||||||||||||||
2012
|
2011
|
Change
|
Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest expense:
|
||||||||||||||||
Compensation and benefits
|
$ | 1,494 | $ | 1,620 | $ | (126 | ) | (7.8 | %) | |||||||
Occupancy expense
|
334 | 309 | 25 | 8.1 | % | |||||||||||
Equipment and data processing expense
|
591 | 638 | (47 | ) | (7.4 | %) | ||||||||||
Deposit insurance premiums
|
203 | 165 | 38 | 23.0 | % | |||||||||||
Advertising
|
155 | 62 | 93 | 150.0 | % | |||||||||||
Professional services
|
72 | 144 | (72 | ) | (50.0 | %) | ||||||||||
Valuation adjustment and expenses on OREO
|
273 | 371 | (98 | ) | (26.4 | %) | ||||||||||
Amortization of intangible assets
|
106 | 120 | (14 | ) | (11.7 | %) | ||||||||||
Loss on early extinguishment of debt
|
- | 585 | (585 | ) | (100.0 | %) | ||||||||||
Other
|
544 | 621 | (77 | ) | (12.4 | %) | ||||||||||
Total noninterest expense
|
$ | 3,772 | $ | 4,635 | $ | (863 | ) | (18.6 | %) |
Nine Months Ended
|
||||||||
March 31,
|
||||||||
2012
|
2011
|
|||||||
(Dollars in thousands,
|
||||||||
except per share data)
|
||||||||
Net earnings
|
$ | (4,291 | ) | $ | 878 | |||
Net earnings per share, basic
|
$ | (0.69 | ) | $ | 0.14 | |||
Net earnings per share, diluted
|
$ | (0.69 | ) | $ | 0.14 | |||
Return on average assets (annualized)
|
(1.05 | %) | 0.19 | % | ||||
Return on average equity (annualized)
|
(10.44 | %) | 2.05 | % |
Nine Months
|
|||||||||||||||
Ended
|
|||||||||||||||
March 31,
|
|||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
||||||||||||
(Dollars in thousands)
|
|||||||||||||||
Interest income:
|
|||||||||||||||
Loans
|
$ | 15,595 | $ | 18,443 | $ | (2,848 | ) | (15.4 | %) | ||||||
Investment securities
|
1,412 | 1,302 | 110 | 8.4 | % | ||||||||||
Interest-earning deposits
|
149 | 151 | (2 | ) | (1.3 | %) | |||||||||
FHLB stock
|
41 | 155 | (114 | ) | (73.5 | %) | |||||||||
Total interest income
|
17,197 | 20,051 | (2,854 | ) | (14.2 | %) | |||||||||
Interest expense:
|
|||||||||||||||
Deposits
|
2,427 | 4,490 | (2,063 | ) | (45.9 | %) | |||||||||
Repurchase Agreements
|
5 | 5 | - | 0.0 | % | ||||||||||
Borrowings
|
956 | 1,788 | (832 | ) | (46.5 | %) | |||||||||
Subordinated Notes & Debentures
|
243 | 241 | 2 | 0.8 | % | ||||||||||
Total interest expense
|
3,631 | 6,524 | (2,893 | ) | (44.3 | %) | |||||||||
Net interest income
|
$ | 13,566 | $ | 13,527 | $ | 39 | 0.3 | % |
Nine Months Ended March 31,
|
||||||||||||||
2012
|
2011
|
|||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||
Balance
|
Cost
|
Balance
|
Cost
|
|||||||||||
(Dollars in thousands)
|
||||||||||||||
Loans
|
$ | 371,555 | 5.59 | % | $ | 422,854 | 5.81 | % | ||||||
Investment securities
|
81,676 | 2.38 | % | 50,147 | 3.63 | % | ||||||||
Interest-earning deposits
|
26,597 | 0.21 | % | 84,995 | 0.24 | % | ||||||||
FHLB stock
|
4,735 | 4.19 | % | 4,735 | 4.36 | % | ||||||||
Deposits
|
386,666 | 0.84 | % | 439,852 | 1.36 | % | ||||||||
FHLB advances
|
37,916 | 3.36 | % | 67,960 | 3.50 | % | ||||||||
Repurchase agreements
|
949 | 0.70 | % | 1,074 | 0.62 | % | ||||||||
Subordinated debentures
|
7,171 | 4.51 | % | 7,059 | 4.55 | % |
Nine Months
|
||||||||||||
Ended March 31,
|
||||||||||||
2012 Compared to 2011
|
||||||||||||
Increase (Decrease)
|
||||||||||||
Due To
|
||||||||||||
Volume
|
Rate
|
Net
|
||||||||||
(In thousands)
|
||||||||||||
Interest income:
|
||||||||||||
Loans receivable
|
$ | (2,173 | ) | $ | (675 | ) | $ | (2,848 | ) | |||
Investment securities
|
26 | 84 | 110 | |||||||||
Daily interest-earning deposits and other interest-earning assets
|
(92 | ) | (24 | ) | (116 | ) | ||||||
Total interest-earning assets
|
(2,239 | ) | (615 | ) | (2,854 | ) | ||||||
Interest expense:
|
||||||||||||
Deposits
|
(493 | ) | (1,570 | ) | (2,063 | ) | ||||||
FHLB advances
|
(760 | ) | (72 | ) | (832 | ) | ||||||
Repurchase agreements
|
- | - | - | |||||||||
Subordinatd debentures
|
4 | (2 | ) | 2 | ||||||||
Total interest-bearing liabilities
|
(1,249 | ) | (1,644 | ) | (2,893 | ) | ||||||
Net change in interest income
|
$ | (990 | ) | $ | 1,029 | $ | 39 |
Nine Months Ended
|
||||||||||||||||
March 31,
|
$ | % | ||||||||||||||
2012
|
2011
|
Change
|
Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest income:
|
||||||||||||||||
Mortgage origination fee income
|
$ | 264 | $ | 430 | $ | (166 | ) | (38.6 | %) | |||||||
Service charges and fees
|
841 | 957 | (116 | ) | (12.1 | %) | ||||||||||
Gain (loss) on sale of fixed assets
|
(19 | ) | - | (19 | ) | - | ||||||||||
(Loss) gain on investment securities
|
39 | 2,031 | (1,992 | ) | (98.1 | %) | ||||||||||
Gain (loss) on sale of foreclosed real estate, net
|
(140 | ) | (591 | ) | 451 | (76.3 | %) | |||||||||
BOLI increase in cash value
|
177 | 177 | - | 0.0 | % | |||||||||||
Other
|
527 | 527 | - | 0.0 | % | |||||||||||
Total noninterest income
|
$ | 1,689 | $ | 3,531 | $ | (1,842 | ) | (52.2 | %) |
Nine Months Ended
|
|||||||||||||||
March 31,
|
$ | % | |||||||||||||
2012
|
2011
|
Change
|
Change
|
||||||||||||
(Dollars in thousands)
|
|||||||||||||||
Noninterest expense:
|
|||||||||||||||
Compensation and benefits
|
$ | 4,625 | $ | 5,064 | $ | (439 | ) | (8.7 | %) | ||||||
Occupancy expense
|
1,047 | 1,031 | 16 | 1.6 | % | ||||||||||
Equipment and data processing expense
|
1,798 | 1,900 | (102 | ) | (5.4 | %) | |||||||||
Deposit insurance premiums
|
606 | 490 | 116 | 23.7 | % | ||||||||||
Advertising
|
290 | 167 | 123 | 73.7 | % | ||||||||||
Professional services
|
383 | 387 | (4 | ) | (1.0 | %) | |||||||||
Valuation adjustment and expenses on OREO
|
2,144 | 1,475 | 669 | 45.4 | % | ||||||||||
Amortization of intangible assets
|
336 | 377 | (41 | ) | (10.9 | %) | |||||||||
Loss on early extinguishment of debt
|
- | 775 | (775 | ) | (100.0 | %) | |||||||||
Other
|
1,658 | 1,709 | (51 | ) | (3.0 | %) | |||||||||
Total noninterest expense
|
$ | 12,887 | $ | 13,375 | $ | (488 | ) | (3.6 | %) |
At
|
At
|
|||||||||||||||||||||||
March 31,
|
June 30,
|
|||||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||||||
Percent
|
Percent
|
$ | % | |||||||||||||||||||||
Amount
|
of Portfolio
|
Amount
|
of Portfolio
|
Change
|
Change
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential one-to four-family
|
$ | 99,494 | 28.5 | % | $ | 110,046 | 28.4 | % | $ | (10,552 | ) | (9.6 | %) | |||||||||||
Home equity line of credit
|
19,050 | 5.5 | % | 20,029 | 5.2 | % | (979 | ) | (4.9 | %) | ||||||||||||||
Commercial
|
139,373 | 40.0 | % | 144,519 | 37.3 | % | (5,146 | ) | (3.6 | %) | ||||||||||||||
Multi-family
|
10,836 | 3.1 | % | 14,062 | 3.6 | % | (3,226 | ) | (22.9 | %) | ||||||||||||||
Construction
|
2,241 | 0.6 | % | 2,171 | 0.6 | % | 70 | 3.2 | % | |||||||||||||||
Land
|
28,485 | 8.2 | % | 30,053 | 7.8 | % | (1,568 | ) | (5.2 | %) | ||||||||||||||
Total real estate loans
|
299,479 | 85.9 | % | 320,880 | 82.9 | % | (21,401 | ) | (6.7 | %) | ||||||||||||||
Commercial business loans
|
44,377 | 12.7 | % | 60,497 | 15.6 | % | (16,120 | ) | (26.6 | %) | ||||||||||||||
Consumer loans:
|
||||||||||||||||||||||||
Automobile loans
|
875 | 0.3 | % | 1,237 | 0.3 | % | (362 | ) | (29.3 | %) | ||||||||||||||
Mobile home loans
|
7 | 0.0 | % | 13 | 0.0 | % | (6 | ) | (46.2 | %) | ||||||||||||||
Loans secured by deposits
|
1,070 | 0.3 | % | 1,268 | 0.3 | % | (198 | ) | (15.6 | %) | ||||||||||||||
Other consumer loans
|
2,876 | 0.8 | % | 3,235 | 0.8 | % | (359 | ) | (11.1 | %) | ||||||||||||||
Total consumer loans
|
4,828 | 1.4 | % | 5,753 | 1.5 | % | (925 | ) | (16.1 | %) | ||||||||||||||
Total gross loans
|
348,684 | 100.0 | % | 387,130 | 100.0 | % | (38,446 | ) | (9.9 | %) | ||||||||||||||
Less:
|
||||||||||||||||||||||||
Deferred loan fees, net
|
(353 | ) | (362 | ) | 9 | (2.5 | %) | |||||||||||||||||
Allowance for losses
|
(6,807 | ) | (8,181 | ) | 1,374 | (16.8 | %) | |||||||||||||||||
Loans receivable, net
|
$ | 341,524 | $ | 378,587 | $ | (37,063 | ) | (9.8 | %) |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
March 31,
|
March 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Dollars in thousands)
|
(Dollars in thousands)
|
|||||||||||||||
Balance at beginning of period
|
$ | 10,880 | $ | 7,945 | $ | 8,181 | $ | 9,649 | ||||||||
Provision for loan losses
|
600 | 1,400 | 9,273 | 2,350 | ||||||||||||
Recoveries
|
175 | 11 | 257 | 113 | ||||||||||||
Charge-offs
|
(4,848 | ) | (1,475 | ) | (10,904 | ) | (4,231 | ) | ||||||||
Net charge-offs
|
(4,673 | ) | (1,464 | ) | (10,647 | ) | (4,118 | ) | ||||||||
Allowance at end of period
|
$ | 6,807 | $ | 7,881 | $ | 6,807 | $ | 7,881 | ||||||||
Net charge-offs to average outstanding loans during the period, annualized
|
5.22 | % | 1.43 | % | 3.82 | % | 1.30 | % |
March 31,
|
June 30,
|
|||||||
2012
|
2011
|
|||||||
(Dollars in thousands
|
||||||||
Nonaccrual loans:
|
||||||||
Real estate
|
$ | 8,609 | $ | 5,401 | ||||
Commercial business
|
1,241 | 848 | ||||||
Consumer
|
38 | 41 | ||||||
Total nonaccrual loans
|
9,888 | 6,290 | ||||||
Nonaccrual restructured loans:
|
||||||||
Real estate
|
8,242 | 1,531 | ||||||
Commercial business
|
338 | 427 | ||||||
Consumer
|
- | - | ||||||
Total nonaccrual restructured loans
|
8,580 | 1,958 | ||||||
Total nonperforming loans
|
18,468 | 8,248 | ||||||
Nonaccrual investments
|
277 | 464 | ||||||
Real estate owned
|
7,823 | 9,498 | ||||||
Other nonperforming assets
|
147 | 1 | ||||||
Total nonperforming assets
|
$ | 26,715 | $ | 18,211 | ||||
Accruing restructured loans
|
$ | 2,697 | $ | 13,821 | ||||
Accruing restructured loans and nonperforming loans
|
$ | 21,165 | $ | 22,069 | ||||
Total nonperforming loans to total loans
|
5.30 | % | 2.13 | % | ||||
Total nonperforming loans to total assets
|
3.46 | % | 1.47 | % | ||||
Total nonperforming assets to total assets
|
5.00 | % | 3.25 | % |
OREO balance at beginning of period
|
$ | 9,498 | ||
OREO acquired
|
2,495 | |||
OREO sold
|
(2,188 | ) | ||
Initial valuation adjustments
|
(598 | ) | ||
Subsequent valuation adjustments
|
(1,384 | ) | ||
OREO ending balance
|
$ | 7,823 |
March 31,
|
June 30,
|
||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
||||||||||||
(Dollars in thousands)
|
|||||||||||||||
Noninterest-bearing accounts
|
$ | 54,636 | $ | 54,340 | $ | 296 | 0.5 | % | |||||||
NOW accounts
|
46,974 | 46,134 | 840 | 1.8 | % | ||||||||||
Savings accounts
|
100,589 | 91,637 | 8,952 | 9.8 | % | ||||||||||
Money market accounts
|
53,812 | 51,252 | 2,560 | 5.0 | % | ||||||||||
Certificates of deposit
|
177,811 | 210,899 | (33,088 | ) | (15.7 | %) | |||||||||
Total
|
$ | 433,822 | $ | 454,262 | $ | (20,440 | ) | (4.5 | %) |
To Be Well
|
|||||||||||||||||||||||
Capitalized Under
|
|||||||||||||||||||||||
For Capital
|
Prompt Corrective
|
||||||||||||||||||||||
Actual
|
Adequacy Purposes
|
Action Provisions
|
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||
At March 31, 2012
|
|||||||||||||||||||||||
Total Risk-Based Capital
|
|||||||||||||||||||||||
(To Risk Weighted Assets)
|
$ | 46,387 | 12.37 | % | $ | 29,998 |
>
|
8.0 | % | $ | 37,498 |
>
|
10.0 | % | |||||||||
Tier 1 Capital
|
|||||||||||||||||||||||
(To Risk Weighted Assets)
|
41,674 | 11.11 | % | 14,999 |
>
|
4.0 | % | 22,499 |
>
|
6.0 | % | ||||||||||||
Tier 1 Capital
|
|||||||||||||||||||||||
(To Average Assets)
|
41,674 | 8.03 | % | 20,762 |
>
|
4.0 | % | 25,952 |
>
|
5.0 | % | ||||||||||||
At June 30, 2011
|
|||||||||||||||||||||||
Total Risk-Based Capital
|
|||||||||||||||||||||||
(To Risk Weighted Assets)
|
$ | 52,254 | 13.00 | % | $ | 32,168 |
>
|
8.0 | % | $ | 40,210 |
>
|
10.0 | % | |||||||||
Tier 1 Capital
|
|||||||||||||||||||||||
(To Risk Weighted Assets)
|
47,189 | 11.74 | % | 16,084 |
>
|
4.0 | % | 24,126 |
>
|
6.0 | % | ||||||||||||
Tier 1 Capital
|
|||||||||||||||||||||||
(To Average Assets)
|
47,189 | 8.50 | % | 22,208 |
>
|
4.0 | % | 27,760 |
>
|
5.0 | % |
( d )
|
|||||||||||||
Maximum Number
|
|||||||||||||
( c )
|
(or Approximate
|
||||||||||||
Total Number of
|
Dollar Value)
|
||||||||||||
(a)
|
(b)
|
Shares (or Units)
|
of Shares (or
|
||||||||||
Total Number
|
Average
|
Purchased as
|
Units) That May
|
||||||||||
of Shares
|
Price Paid
|
Part of Publicly
|
Yet Be Purchased
|
||||||||||
(or units)
|
per Share
|
Announced Plans
|
Under the Plans
|
||||||||||
Period
|
Purchased
|
(or Unit)
|
or Progams
|
or Programs
|
|||||||||
Month #1
|
|||||||||||||
January 1, 2012 through January 31, 2012
|
- | $ | - | - | 437,802 | (1) | |||||||
Month #2
|
|||||||||||||
February 1, 2012 through February 29, 2012
|
- | $ | - | - | 437,802 | (1) | |||||||
Month #3
|
|||||||||||||
March 1, 2012 through March 31, 2012
|
- | $ | - | - | 437,802 | (1) | |||||||
Total
|
- | $ | - | - | 437,802 |
(1)
|
On November 13, 2008, the Company announced a stock repurchase program under which the Company may repurchase up to 620,770 shares of the Company’s common stock, from time to time, subject to market conditions. The repurchase program will continue until completed or terminated by the Board of Directors.
|
101.0*
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Condition, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statement of Changes in Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements, tagged as blocks of text.
|
||
* Furnished, not filed.
|
JEFFERSON BANCSHARES, INC. | ||
May 14, 2012
|
/s/ Anderson L. Smith
|
|
Anderson L. Smith
|
||
President and Chief Executive Officer
|
||
May 14, 2012
|
/s/ Jane P. Hutton
|
|
Jane P. Hutton
|
||
Chief Financial Officer, Treasurer and Secretary
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Jefferson Bancshares, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and in preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 14, 2012
|
/s/ Anderson L. Smith
|
|
Anderson L. Smith
|
||
President and Chief Executive Officer
(principal executive officer) |
1.
|
I have reviewed this quarterly report on Form 10-Q of Jefferson Bancshares, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and in preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 14, 2012
|
/s/ Jane P. Hutton
|
|
Jane P. Hutton
|
||
Chief Financial Officer, Treasurer and Secretary (principal financial and accounting officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
|
May 14, 2012
|
/s/ Anderson L. Smith
|
||
Anderson L. Smith
|
|||
President and Chief Executive Officer
|
|||
May 14, 2012
|
/s/ Jane P. Hutton
|
||
Jane P. Hutton
|
|||
Chief Financial Officer, Treasurer and Secretary
|
Principles of Consolidation
|
9 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2012
|
|||||
Principles Of Consolidation | |||||
Principles of Consolidation |
|